Transcripts For CNBC Squawk On The Street 20180126

Americans are open for business and we are competitive once again. Thats the president making his case for u. S. Economic growth at the World Economic forum. Good friday morning, welcome to squawk on the street. I am Carl Quintanilla and jim cramer and david faber well have more on trade, the dollar and International Cooperation and we still have earnings to get to starbucks and intel both moving in different directions. The ceo of starbucks is also coming up with us a the president just finished at the World Economic forum in davos. He emphasized the new trade stance in his administration the United States will never turn an eye on economic planning these and other behaviors are harming businesses and destroying the Global Markets and harming businesses and workers around the globe went onto call regulations still taxation and talked about how it has been around the world. Americas first is not america alone. Look, i think that he made a great sales pitch for america. I think thats not what anyone ever done in davos it is about you are strong and we are weak and you become strong davos is a place for redistribution for almost every president and everyone speaking for the government this was not, look, if you give us the ability to be able to compete and trade, you do better i dont think i dont think thats necessarily a defense position for south korea or china. Hes saying we have been at war with you forever, we have not played kind of interesting yeah. Nothing new when it comes to trade, reciprocal is the keyword that they have been using. Bilateral you heard it from the treasury secretary moments ago of the last 15 minutes of squawk box. You heard it yesterday with trumps interview with joe cornyn details of any kind and what made it a bad deal or what would make it a good deal, i think those who were jumping into some sort of a conclusion is this is a willingness to theyre going on without us, theyre movingon there are tones a and substae the tone is hey, i am like you guys, i am with you. The substance is i am not with you. A good discussion on squawk this morning of this presentation came in nicer packaging, conciliatory packaging. They have not moved on these talks, at least with nafta in montrae montreal there is a new frame, did the president used a prompter . If he did, hes conciliatory if he used a property and stuck with the script to be much more one of them. There was not anything in there that was like anything i heard at davos davos is a conversation about how to get the poor to be rich and he was about how to get the rich to be even richer and therefore the poor will be better it is a worldwide trickle down you know what we are open for business and hes not saying you cannot come to our place, hes kind of saying you better come to our place the president addressed davos and he also talked about a number of issues, this is where the ttp conversation got renewed energy i saw your eye brows raised when he said that i wonder whats your reflection behind the answer that he gave you. You know we have been kicking it back and forth all morning. Kind of different of what your guys take on this. You know someone pointed out theyre going ahead of it without the United States and he goes really . You dont think the United States shows the willingness to engage and serious about it, you dont think they start over or at least go back on the few things they decided or making room for the United States during a trade deal without the United States, you know our biggest economy in the world and engine of growth, if there is any chance at all i dont know if there is a chance or not but remember most people said that it benefited the United States in terms of breaking down tariffs and protection in other countries that we were the beneficiaries. If trump were convinced it would benefit others and help us get the 3 gdp which we did not get. I think there would be room. The key theme of the speech that the president just gave and the interview was that if you want to do business, america is the place and here is how he said it in his speech. America is the place to do business so come to america where you can innovate and create and build i believe in america as president of the United States, i will always put America First. Just like the leaders of other countries should put their Country First also but, America First does not mean america alone. And guys, talk a little bit about one other point just coming to davos in general and the shifting tide that i picked up on when i was over here it was a piece highlighting some of macr macrons comment, globalization, we are not saying that it does not work but it does not satisfy everything that france needs and there was an element of renewed na nationalism everyone from macron that made me think oh, wait a minute, maybe there is some room there and you got trump soft softening his comments bein being i dont know if you guys agreed with that but overall after coming here with all the hand ringing that i have seen in previous years, it was not like that. There is an energy and optimism and it got shifted in a highgear once the president and his con fort a lot of it, all the ceos, i know you guys had been watching. It had to do with the tax plan this is what he told me. I think the tax plan has been even better than we thought. What did happen that nobody considered is that at t started but they immediately files and hundreds of companies are giving thousands of dollars to their workers and you have 300 workers receiving thousands of dollars and even starbucks. Yesterday disney and others the ones that are not doing it, those employers are going like how about us, theyll be doing it, too. We detected that. There was a little bit of defen defensiveness whether anything is coming down the pipe, you know, it is a little bit uncomfortable so well see what finally happens. Joe, the whole shows coverage all week is exemplary one more, you had mnuchin on. Is this understanding the wire carries and how traders take the headline and run with it or Something Else i guess it has happened before paul oneill in the same type of offhand nuance comment with a lot of ifs and buts and all kinds of phrases that led to that admission that maybe it is not always going to be strong. He did it too with the same outcome. I would say maybe mr. Mnuchin, i dont think you will hear anything about a weak dollar being okay i doubt that you will hear it again any time soon. Joe, when you go back when you go back to what secretary ruben said when he wanted a cheaper dollar, mnuchin knew what ruben said. Obviously, he could have done that i continue to believe that what he did was to say what everybody realizes and nobody wants to say it hey, we are getting clobbered and the dollars is coming down and well do better. Why is that so wrong they say listen the dollar went down well do better why is it so out of zinc to say what 500 ceos said i agree because i guess when it gets manifested and you know losses and gains and with real money with two seconds later, i guess it is something that you got to consider. Government is different than what we get to do, is it jim we got to watch ourselourselves right . Yeah, a lot of what we heard from the president is what we heard from the ceos. We are open for business, come here, we got a lot of things to do this was in a speech that tim cook could have given. I think the difference is when you are in davos you are supposed to talk about how we are going to give you our wealth because you deserve. You may think thats right or wrong. Thats been the tone of our administration and this was hey listen, well do so much better if you guys come here and you will do better and i want to know where there is anyone saying thats cynical or do people say yeah, thats working given how strong the u. S. Is i will tell you,every year one of the over riding themes here is that everybody here is rich and, theyre all trying to figure out how to make life better for on high for everybody else in the world. Income and equality and the disparity and income around the world and the United States is always on everyones mind and thats why i ask President Trump about that, too. We know what it is about it is about trying to get an educated work force for what we are going to need in the next five or ten years in this Digital World that we are living in and this rapidly moving world of technology, there is got to be a better way to do it i try to get him if we do 3 or 4 , if we are fortunate enough to have some fun to redeploy, thats what well have to figure out, he talked about vocational schools and other ideas. I have a feeling down the road if we got economic in order, theyll focus on domestic issues at some point. As you are talking, joe, fedex is now committing 3. 2 billion in wage increases and honey well announcing theyll boost to match today i hope you have some party to go to tonight good to see you, thank you for sticking around. I am going to watch law and order, i am tired well see you back home when we come back, well talk to starbucks ceo, Kevin Johnson. Looking okay at gdp is coming in at 26. Back in a moment we took legendary and made it liberating. We took safe and made it daring. We took intelligent, and made it utterly irresistible. We took the most advanced eclass ever and made the most exciting eclass ever. The 2018 eclass coupe and sedan. Lease the e300 sedan for 569 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. A busy morning for Rick Santelli this morning. It was not a bad number, it was just the disappointing you can see today, the 10year is a low yield listen, rates are firm and mostly in range, we spike up to 267 yesterday but here we are back at the kind of well warm and very much important level of 263, of course, that was 2017 high yield closed. Bund behaves, their spike we see correlated are mario graghi, this is a new world for bund, thats a key level, anything higher than 60 bases point there is so much talk about the dollar index and rightly so. If you are a trader, you had this long view of over a year and a half this one week chart which it is still going down other than a few bumps and year to date of the euro verses dollar shows it is strong. Dollar is not doing good against current either it is having a rough time across the spectrum but it is not diminishing with the impact with respect of the treasury yield being firm carl, jim, and david, back to you. Revenue cas came in below, wl talk to kervin johnson. Holiday merchandise did not work, whats going on . Mrs. Multiple reports here. One is china is unbelievable i thought the problem was maybe it was small banks howard, the formal ceo that the mall could not bring them down there was a mistake in the drinks executio executions these are all things and after day is not so good so what happens is you got this like wow, i wish i can own china and maybe i just own the u. S. And the rest of the world is a dividend play. You wish there was a yum china equivalent of starbucks . Yes think thatll ever happen yes really . Yeah, i already planned it. I think the company feels there is this synergy. They have to fix the u. S. , a percent away fixing it means having the right thing during the day and the afternoon and somehow having a drink thats worth paying 5 bucks or 6 bucks for it. Remember mcdonalds had such better comps did they talk about anything in terms of a driver yeah. Or reacceleration, thats where investors seem to focus right now and their stock is under performed. They have to convince people to become regular starbucks people they have to do that i know the front of the store, i want to know how much of it is amazon i think i can go on amazon to buy all those stuff at the front which i do buy but, yeah, i think they would get picked up. Wall street says enough is enough we are going to talk to johnson in a few moments stay tuned for that and cramers mad dash and the opening bell in about nine minutes each day our planet awakens with signs of opportunity. But with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. The entire Community Came whtogether as a whole. T, it was such an overwhelming response to help others. No one thought that they were going to do this before it happened and everyone just did it. I think thats the way that human nature should be looked at. Ill stand by you. Ill stand by you. Wont let nobody hurt you. Ill stand by you. All right time for mad dash to wrap up the week. The man is back, his voice, we got honey well perfect attendance. This is the first day of work that i ever missed in four years. I said earlier to you, of course, you do talk a lot. The problem is at the eagles game, i went nuts and vocal cords got shot now i am back. This is amazing. Why is it amazing . Honey well guided to 7 they came in at 6 but it does not matter because of free cash flow, 1. 4 and 1. 5 is where they did expansion and more flesh out of the split david, the split sounds like something that lowe came up. He wanted more and as you pointed out of a strong investment for a third point which hedge fund is important. David cody no change and yet the split up is the opposite of what cody would have liked. By the way, steve sousa, the hero of ge nobody is perfect. Nobody is perfect just what joey brown says. Something like it hot what a movie. Maybe like their coffee hot and some dont we got an exclusive with starbucks of ceo, Kevin Johnson, coming up. 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The numbers are hard to reconcile. I do think that, look, i have not found anywhere where the u. S. Is not doing well or doing worst than 3 quarters. He sees a 5 to 10 that we average over 3 over 10 years 10 to 15 that we get it to two years and pointing out that we need productivity growth and we need an increasing number of people working growth rate has risen for seventh quarter for gdp. Opening bell a supplier of a electronic slot machine. Celebrating its ipo today at the nasdaq and operating vessels carrying refined oil products. Oil was not doing a whole lot today but jim, we were watching it yesterday if you go out fiveyear, oil is in the 50s. The risk free is so pronounced you would not have this gigantic disparity between now and five years from now you are in the longterm it has not moved . No, not at all. I think it is rather ext extraordinary. Why you would think it is up for a few bucks from here but i think whats happening is there is a belief with the middle east but also venezuela that theyre going to slow down i dont think the middle east is slowing down i think venezuela is going bankrupt and they cannot pay their bills. If you cannot pay your bills, you cannot drill there is been stories that are reported theyre in ability operating any longer in terms of venezuela. It is a horrible situation and a humanitarian crisis. It is not on the front pages anywhere it is their only export and which is why we end up talking about venezuela and bitcoin so often. It made sense, their currency is hazard. The risk premium is there and it is not nigeria and i dont think it is saudi arabia i am not even sure of iran i think it is venezuela. Not producing yes going offline entirely, that would not shock mexico is not producing work in the end it is only going to be 300,000 or 400,000 more. Intel, as they come in ahead, 22 cents ahead at 108 and 10 di hike and well talk more about it today he said dont worry about this issue involving the two different kinds of holes in their plan and the patch and he did not. Had no reason to this is a story where a personal computer had stopped and rate of decline. The data center has acceleratac. The rate of increase mobilize of a lot of people skeptical of, it is waiting for them mobile wise, its got two businesses amd is competing against personal computer and you have nvidia is competing. I know that i have been some what critical of intel saying that you know they have been left behind in the auto. I cannot say that anymore. I cannot it is a good quarter. Yeah. Guys, we have not talked about kimberlyclark this week the stocks have moved up after a couple of days ago, they announced horrible lay offs. K b today is down after it is been a really strong rally the last few days. They hired senator goldman quite some time ago and they were worried of an activist in their share. I dont think if they have figured it out if there was an activist or who it was if there was somebody in there. And job losses is what announced. The stock reacted positively i dont know if thats wrapped up in some sort of take over speck around the name or you know come around and again and again and maybe the guy at 3 g would want to look at it i did want to know kmb is down today. There it is, since january 22nd. Let me come at it the other way. Okay. I was in a call, geez, these guys are in trouble. The stocks should be down and even with that big restructuring. The stocks should have been down well, thats fine it is interesting. The reaction was curious and whether it was because people somehow saw that as a reaction to an unknown investor that might start agitating i dont know, they have been wondering for a long time to somebody thats in there. It is unusual activities of some months back that led them to believe that somebody is in there. Jim, your points and good one. Private label diaper is sort of an issue it was a whole under current of private label. I came back and said, it is funny you said activist. Theyre Proud Company and remember that they have done a lot of things overtime they have done they gotten a lot of commodity stuff theyre up against Procter Colgate today is down 4 . Such a lousy group except for clor clorox you know this is a group that still needs further consolidation. You think so . Yeah, i do. There is no shortage of end less name everyone is wonder of the brazibrazi brazilians will make their move. We know how handicap they are with ability to make approaches. There is no way kimberly wants to sell. What do you do if you are in the industry of colgate, right your problem is that, you got private label and you got procter being competitive, what do you do if you are kimberly. I dont know. I heard gp which is a coke company but that wont be any trusts, no way i agree well, where are we at we have starbucks right now lets do it. Starbucks is moving a little lower this morning after the bell yesterday for more we are joined with in a cnbcs exclusive with Kevin Johnson, welcome back to the show good morning jim. All right, kevin, what do we do here . We got an unbelievable business in china that i want to own and we got this big cash flow generating business all over the rest of the world. Why not with this many stores separate china and give us a chance to own that you know that you can move the stock up dramatically. Give us a dividend blade and a growth blade well, jim, you are right, we have a huge opportunity ahead in china. Certainly, this last quarter represented 30 of growth in china and that was before the acquisition of the east china joint venture which just closed at the end of last quarter so, the opening of the shanghai roastery punctuated how strong of a position we had in china. China is the longterm Growth Opportunity. Certainly a lot of the capital were deploying of the way we generated cash around other businesses around the world. Both in terms of the innovation that we do around the design of our stores and the roastery and the innovation around food and beverage and innovation around digitals all of that is helping us drive our engine of the u. S. And china. U. S. Missed it and some of it was the drinks you had and some of it was the mall and some questioning during the quarter, what gets it back because i know that your fine company can do 34. Thats not an issue. What thoos happhas to happen iny part and the physical part of the stores to get 34. Yes, certainly if you look at our America Business thats led by the u. S we grew 7 year on year this quarter. The u. S. Had 2 growth and the same stores comparable the work that we have done we had Strong Performance and more runway for us to grow. Digital have been phenomenal we grew 11 bae year on year to 14. 2 million digital digital is strong. Our food, this last quarter was at a record, it drove twopoint. The one place that we were weak in the u. S. Was related to the holiday merchandise that we sell in the lobbies of our stores, that caused us of one point of comp the opportunity is this is to continue to drive the morning day park and for us to transform the way we engage of what i will call the occasional starbucks customers retothats the opportunity in the u. S kevin, it is carl, to jims point, the macro backdrop is working for you. Has anything change about starbucks and its leverage to things like employment or Consumer Spending or sentiment well, the one thing i will say, carl, is our brand remains very strong. We were named the fourth or fifth most admired company and the brand, it is strong with the consumer i think certainly when we look at the macro trends related away from home food and beverage, that entire industry in the u. S. Is still a bit flat. Well see what the results is of tax reforms and if some of those dollars start to trickle out and creating more of a Discretionary Income for people to spend money on whole foods and beverage. We feel good about our brand our holiday merchandise that we had did not perform up to our expectations thats not anything to do with the core execution of the company. Combining that with what we are doing in china we have light of site on how well drive our values with these growth interventions mr. Johnson, discussing the bear case says there are no clear drivers given what we are looking at this quarter. Youre facing new specials and concepts and some competitors and values and pricing from others, such as mcdonalds or Dunkin Donuts how do you respond those of questioning your optimism . Certainly you would probably agree that china is a separate huge Growth Opportunity for starbucks. Let me stay in the u. S we have always had competition in the u. S. And you know we measure this and we have data that informs us of what happens when a competitor builds a store in a micro trading area and the fact is this last quarter if you look at same store and new store transaction growth, we grew customer occasions by 5 at our scale growing customer occasions by 5 , i think you triangulate of whats happening with food and beverage, we are gaining shares we helicoptcontinue to build thd around the world and i think there is a lot of potential in the u. S. And there is an unlimited opportunity in china i got to pivot then, if you are gaining share, one must wonder whether people in america either dont shop as much or not enough traffic or is this a market where it is gotten so matu mature everyone though you are gaining share, the pie is getting small. Let me break those two pieces apart. First of all, we all know that c Consumer Retail behavior is changing everyone this holiday season, more purchases were done online. On lean had another significant year of growth there are still people in malls certainly, if we look at our mall stores this last holiday season, we saw negative comp growth in those smmall stores which is an indication of less traffic in malls the vast majority of our portfolio is not mall base thats an indicator that says consumer traffic patterns are changing and you separate that, does that mean there is less Growth Potential . We dont believe there is. Thats why we continue to build new stores in the u. S. Much of those are throughout middle america, down into Southern California and a High Percentage of those stores are drivethru that tells us that there are more demand in america and you just have to be smart about where you are Building Stores and you have to be smart about the format of stores you are building thats what we are doing and how we are approaching it. That will accelerate and i know you will come back to 34 Howard Schultz was on the call, there is just a tremendous amount of money being made by roastery one can make a difference just in terms of future and two, what can block chain do for starbucks and i know that may sound out of body but i did not bring it up, howard brought it up yeah, lets talk on the roastery, the average Starbucks Stores does 32,000 a week and the roastery in shanghai is doing more than double that in a day. If you do the math, thats a significant amount of revenue and high ticket. We think we serve a million customers a year out of that roastery certainly we are getting the traffic and ticket and interests and more important than that, we are getting a halo around the brand. The innovation that we are doing around the roastery is making its way out to designs and stores the innovation that we are doing around food is an opportunity for growth and the innovation of food and beverage comes from the roastery is key to how we are going to work to elevate the entire fleet of stores with the investments we are making in starbucks reserve. Come back to that block chain comment, can you focus on that one second so here is the plan you look at where we were five years ago on payment and where we have come today today we owe 30 of our payments in the United States is done with a mobile phone. Over 40 is done with our phones and star value cards with rewards. In china, over 60 of our tenders come from mobile payments five years ago it did not exist. So if you look at that evolution, that allowed us to explore and testing new things the first thing we are testing is a cashless store in seattle just to see what the behaviors are using mobile and credit cards. What howard was talking about pointing out is payment platform continues to involve he talked a little bit about cry cryptocurrency i this power rightfully states in a dynamic involving world, well stay aware of all the opportunities that we have to participate and creates values for our shareholders i think payment is a vehicle that we think is an important one to stay focus on excellent thank you very much, Kevin Johnson, president and ceo of starbucks. Great to talk to you, sir. Thanks guys still to come this morning, millionaire Thomas Steyer is running the campaign to impeach the president and some of the economic numbers we have been getting lately ge fell below 16 and cat is down again, back in a minute. Regularly with our ameriprise advisor. 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A report this morning in the journal i think it was out late last night says dell might take itself public, might buy in what it doesnt already own. It owns 81 of the company and it has issued those class v shares to track 65 of its economic ownership of vm ware. Why is it a story in the market today . Well, a lot of people who play these things are short vm ware common and long the Dell Technologies so the spread is blowing out on them today because they expected that to come together. However, if you were going to buy in the 19 you dont already own, you would pay a premium, send vm ware shares higher jim, a lot of questions about exactly what dells motivation may be for even examining these various options. One is that under the tax bill, remember, a company with as much as 2 billion in Interest Payments no longer going to have all of that tax deductible because of changes under tax reform may be motivating them. There is a lot of cash at vm ware might give them more flexibility if they were to buy it all in. That said, theyd have to take on more debt in a sense to buy the rest of vm ware, but eventually it might allow them to have more flexibility with that cash flow and potentially eventually delever i got a lot of questions, very few answers here but worth coming to. We dont talk often about dell because its a private company that said its an enormous company. Michael dell in the past had indicated no interest in going public so it is a surprising story to some extent i have the coo on mad money. This is the Fastest Growing stock in tech. It is remarkable ever since they got the deal with amazon web services, they have become the company that you need if you want to go on the cloud, its vm ware i think its been held back by its ownership stake. Im telling you. Its fully controlled dell consolidates 81 so its not going its going to o this idea that you short that well its a tracking stock. 65 of their economic ownership i know it gets complicated. Eventually you collapse that structure and the prices come together today people are learning the other side of that i only know one side of this. I know the fact that vm ware, when they made the deal with amazon, became far more valuable than it was before the coo, when he comes on, he tells a miraculous story of you cant do your off cloud to on cloud without them and theyre remarkable they are in the sweet spot if this company were a standalone company, david, it would sell at a similar multiple a lot of people questioning how it would be that they would buy in what they dont own of vm ware given they potentially have to take on more debt to do it even though they would get more access to cash its complex a lot of questions here. Ipo dell overall, oh wow, i would love some of that. Why would he ever want to be public its such a nasty thing to be public. Ford has people raising their eyebrows we already got spotify in the pipes. Its goingto be an interesting year. It sure is. I just feel like im just trying to make the point that vm ware is a great company. I didnt get to talk about ne y newell. It was down yesterday over 20 . Change of board of directors by the way, speaking of companies that are having a tough time its worth noting i think as carl did, ge did get below 16 very briefly. Its above it now. I had a feeling ge would come up i know its 9 55 and we havent mentioned ge so you knew it had to come up ge did get to 1595. And then apple hasnt followed the market this week at all. Apple is all about everybody deciding that what you need to know is that the ten isnt selling out. If you can get out and get in, i think you should do it remember, the company in 2015 had a problem. 130 down to 90 everyone felt so brilliant about selling it at 100. Whats on mad tonight, jim . One of the Great Companies that i follow is lamb, Lamb Research these guys are the reason why our semiconductors are incredible, because they make the equipment. Martin is very low key i have to promote him because he wont. Remember, when he bought novellis, thats what propelled this company hes got some very good people underneath him that can move up and i just think that if you want to go read a Conference Call about why the future is great, you got to read his and you got to read about the materials. Okay. We can read it thank you. What a week. Its a great week im going to get my vocal chords back next week ive got some screaming and yelling to do. Youll lose them for good. I am the 12th man not all those other thousands of people i am the 12th man. Youve been active on twitter. Well see you tonight on mad money. Wh we meenco back, more reaction to the president s interview in davos dows up 70. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at td ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom thats lesson one. Education to take your trading to the next level. Only with td ameritrade. Like you do sometimes, grandpa . And puffed. Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. If you cant afford your medication, astrazeneca may be able to help. Good friday morning. Welcome back to squawk on the street. Im Carl Quintanilla take a look at the markets the dow up 81 points s p 2150 our road map begins with the president. America is open for business, he says youll hear what he told our own joe kernan. Starbucks projecting sales growth for the low end of the forecast for 2018. What Ceo Kevin Johnson told us about the future of the company, trump taxes and more. The race for hq 2 is heating up well hear from one of the governors on the short list, his pitch to amazon, straight ahead. Joe kernan had a chance to sit down with the president at the World Economic forum in da vid davo, switzerland. What a difference a year makes. We come every year kind of weird because the weather was fitting too. Last year the mood was a little bit gray, the weather was five, eight degrees every day. You know, to prove that were in dav davos, we have to sit outside, i guess, because we do for three hours. Last year that wasnt easy so the sun came out this year. It was about air temperature 40 degrees every day. The optimism was already here when we arrived on monday but then when trump arrived it was kind of funny. You know how people dont really want to act excited, like we wouldnt, carl, if we were somewhere and there was like a movie star and we would be like, oh, i dont like him and then tom hanks walks by and its like, oh, my god and you get a selfie it was like that here but it was with these cool sort of europeans, you know what i mean . Theres trump and people dropped everything and wanted selfies. That was sort of the backdrop to all this with all the stock market up 40 and a resurgent feeling in the United States thats spreading maybe it didnt spread here, it was already going well in europe and japan looked a little better, but it was interesting in fact, i just mentioned the rally. I had a chance to ask President Trump and youve heard it before when he talks about the rally but this got even better i think in terms ofhyperbole check it out. Stock market is up almost 50 since my election. Had a democrat won, i believe you would have been down 50 thats the direction we were headed so lets do the math, q lets round it off at 18,000 so its up 50 only President Trump could say if it was hillary, we would be at 9,000 were at 27,000 with me, i figure we would be at about 9,000 with a democrat. So thats the president. We know what to expect and if you got it, you flaunt it i guess a little bit we also did, as you saw, the trade stuff. Thats why were here. Were here whether were gloe globalists or nationalists or populists. We want to do business and i think that was the key to why President Trump decided to come here heres the key word that he says when he focuses on trade everybody is taking advantage of our country they have ripped our country off. You look at what they do i saw something on motorcycles today with a certain country but they sell motorcycles into our country, no tax. We sell motorcycles into their country. Harley davidson is the greatest, right . We sell them into their country, 100 tax not going to happen. The word reciprocal is the most important word with donald trump. You guys, i know, tuned into the speech and i liked the speech but i felt like i dont know, i felt like i knew what was coming, so im glad we were able to talk with him before i think that the interview was a little longer than the speech actually when it was all said and done i liked the q a afterwards with the professor i guess President Trump calls schwab the professor i dont know whether Steve Leesman is unhappy about that or not, but it was quite a week. We are going to talk to leesman later on about the dollar comments this week. One last point, the president did say the administration has been present at nato and g7 and now at davos do you think hell go back next year i do. I think so you heard klaus schwab talk about the engagement of not just the president but of the entire cabinet. I dont think they went to as many things as andrew goes to in terms of panels, but they were very engaged and they really tried to pitch in with the whole thing and make it a great event. So i think theyll all be back next year. Who knows if well still be with the president by next year though, right . We know youll be there, joe, as you have been for many years. As we said, go watch law and order, get on the plane and well see you monday okay. I love that, every scene when they do, dunn dunn. See you later. The president also speaking with joe about tpp saying he was open to a new deal take a listen to that. I like bilateral because you have a problem you terminate when youre in with many countries like tpp so you have 12 if we were in you dont have that same you dont have that same option. Somebody asked me the other day why i do tpp heres my answer ill give you a big sfotory i would do it if we had a better deal we had a horrible deal nafta is a horrible deal i may terminate nafta. I may not. Are you opening up the door to reopening tpp . Im only saying this, i would do tpp if we were able to make a substantially better deal. The deal was terrible. The way it was structured was terrible if we did a substantially better deal, i would be open to tpp. For more lets bring in phillip swegle, former assistant secretary of the treasury for economic policy. Michael fullman is u. S. Trade rep under president obama and a key architect of tpp gentlemen, good to have you back michael, you told politico this morning, if there was Something Real behind those comments, they would welcome a chance to sit down and hear about what it is he specifically objects to do you think were going there its hard to tell first joe got a great scoop yesterday in that interview but it was interesting that the president repeated the comment more or less in his speech today. It would be interesting to know what it is specifically he objects to in tpp because a lot of the things that he said he wants to deal with, including by the way that 100 tariff on Harley Davidson motorcycles he just mentioned, that was eliminated in tpp. So was raising labor standards in mexico and vietnam and putting disciplines on stateowned enterprises. Hes got some misunderstanding of the deal. He mentioned to joe that one reason he doesnt like tpp is you couldnt pull out of it if it wasnt working. Thats simply not true its got the same ability to pull out of tpp as nafta hopefully hell get briefed on whats actually in it and how it works and if hes got specific items to renegotiate, it will be interesting to see if the other countries are willing to engage with him on that. Michael, what is the ability of the United States to reinsert itself into tpp at this point now that i mean, the Prime Minister of canada went to davos to announce the finalization of the tpp agreement that was reached days earlier has the shipped sailed no. The other countries very much want the u. S. To be back in the agreement, and as they move forward, the other 11 of them, theyve done so in a way to keep the door open to the United States in fact, they took about 20 provisions of tpp that were particularly important to the United States and said if the u. S. Rejoins, those provisions will go into effect. So there is a process there for the u. S. To rejoin if its really serious about doing so. Phillip, the times this week said there are 35 new bilateral or regional trade pacts under consideration around the world. This is coming out of davos. And that the u. S. Is party to one of them and that negotiations are dormant on that one. Would you expect that number to go higher . Boy, id sure like it to be like michael, id like to see us reengage in the tpp. Its hard to see that happening, really, any time soon. The president s got to make his decision on nafta and drive whatever bargain hes going to do there to get the canadians and mexicans to do what hes looking to do. To me a trade negotiation president is more a second term, right. If President Trump has a second term, i could see him then engaging in that for this term the next year or two years, id really like to see someone in the administration make the point about the benefits of trade for the u. S. Obviously in the trumpian way but to be that messenger, in the way that michael was in the Obama Administration and point out the gains in trade from the United States. Are you getting the message from the administration though that they are antitrade by bot langua body language . He says he wants trade he just wants bilateral reciprocal trade isnt that a fair case to make yeah, its a fair trade the body language until now has been antitrade. Thats why i agree with what you said earlier in the program that yesterdays interview with joe and todays speech was really a nice change, a big change. It was news that the president is slightly less antitrade and making more of this tradeoff thats a much better message and i hope we see it continue. Michael, just curious, given that there seems to be an opening here andyou sort of suggest that it would be possible if the u. S. Reengaged have you heard anything about that happening i think everyone was a little surprised by the comments yesterday and today and certainly its gotten the attention of the other tpp countries. I think phil is right a lot will depend on how the administration handles the nafta negotiations if they blow up nafta by withdrawing, no other country is going to want to engage with the u. S. In negotiations everybody is looking closely on these negotiations right now. How obstructive, mr. Ambassador, do you think l. G. s response was to that washer move . Was that more or less than you expected does it illustrate what others may do in the light of similar tariffs . People are digesting the tariff actions that the administration took. It certainly will raise prices for consumers. On the solar side it may have an adverse impact on the installing industry which is some of the Fastest Growing area in jobs in the United States. I think the real question is how do the other countries respond do they impose tariffs back on the u. S. Or imitate us and say if the u. S. Is going to start closing its market well start closing our market that remains to be seen. I think the other countries dont want to enter into a trade war but they dont want to send a message to the administration that its okay to unilaterally impose tariffs on imports when its not called for. Phil, thats one thing. The dollar stuff today, its easy to understand how the administration doesnt want tax cuts, higher paychecks to be bled off, and the same with trade. You dont want a 1,000 bonus going to more expensive washer, as limited as that may be. Yeah. Look, we have good news this morning on gdp on the other hand, trade was a negative, a drag some of that will unwind with the weak dollar as the treasury secretary said, but as you said, as michael said, if we start imposing tariffs and raising prices on imports, that bleeds off the tax cut. I still think were going to have a pretty good u. S. Economy later this year into next year and hopefully that really creates a Good Environment for moving forward with trade. Gentlemen, appreciate the time obviously an eventful davos and we appreciate you helping us make sense of it, mr. Ambassador, and phillip. When we come back, America First but not alone. We will have more on the president s message. Later on, making the pitch for amazons hq 2. Well talk to one of the governors on the short list. This rally rolls o un,p better than 7 squak is back in a moment. Wow . At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. Four quarter gdp out this morning with a slight miss the u. S. Economy grew by 6. 2 . Steve liesman joins us with more on the numbers. The details are stronger than the headline and thats good news for the u. S. Economy. Trading inventory ended up taking off nearly two full points of gdp while the parts that matter were up. Heres some of the details 2. 6, we were looking for 2. 9, so not a big miss consumer up a strong 3. 8, the best since the Second Quarter of 2016 Business Investment was strong at 6. 8, best since the Third Quarter of 2014. Housing was strong as well as government, federal and state both up as well. Bmo says the u. S. Economy had a solid end to 2017 and early indications point to a firm handoff to 2018. Lets get the political nonsense out of the way the president didnt get his Third Straight quarter 3 growth but thats irrelevant from an economic point of view i think were going to see shortterm aberrations in any quarter. Were comfortable in saying that our objective is a sustained 3 gdp over the long term so were not concerned about any one quarter which can be revised up or down relative to where everybody else was talking at the beginning of the year, i think people now expect were getting to 3 gdp what really matters is that for three quarters now weve been above what most economies think to be trend growth of 1. 8 which you can see is the line there on the graph we had two strong quarters and whats important is we didnt give it back in the fourth quarter. Weve had good strength in consumers, good strength in business and thats before the impacts from the tax cut and that impact could be on the way in the months ahead, melissa steve, thank you. The dow hitting a record high today as the dollar covers to hover knee threeyear lows. Guys, good to see you. Good morning to you. Tony, is 2. 6 a concern at all given the expectations of 3 . For the bond market or the equity market . Why dont you break it down. It is above what the fed views and most views as Growth Potential which is defined as changes in the labor force which these days about a half a percent change and productivity which is these days about one percent. Take 2. 5 , subtract the 1. 8. If its the same next year, its 1. 4 percentage point above the potential. The jobless rate will fall half the amount of difference so that would be a. 7 change today its at 4. 1. That would bring it down to 3. 4. The point is that the jobless rate is most likely to continue to move downward because growth is moving above potential. That means the Federal Reserve will have to continue to raise Interest Rates as it did three times in 2017. Its highly unlikely to raise rates in 2018. Will it raise rates meaningfully more than beyond 2018. The bond market thinks it will be one more time in 2019 the main reason the u. S. Tenure is still under 3 . The bond market cares about the path of Interest Rates which it now sees in the mid 2s it could all change next year if the view on rates changes. Steve made a key point and that is were not really seeing the full impact of the tax cuts yet. Sounds like upside risk to yields at this point, an upside risk that the fed will raise more than what the market is pricing in at this point. Thats very possible and the good news is what steve said the underlying numbers are better than the headline number and the good thing about the headline number, though it also chills a little bit any animal spirits that might have come in if we hit that three bogey as a result of that, we look at it as a good sign for the market we think that the markets upside risk remains in place with this Economic Growth likely to continue moving nicely with a little bit of stimulus coming in should be a good year. Tony, one of the things about this quarter people zeroed in on imports and trade and inventories. When you couple that with the tax cuts, they ask, is capacity really starting to be challenged and would debts finally spur caps in ways we hoped to see the past two years labor is getting a bit more expensive so its likely theres a pivot and thats what were seeing now its one of the main reasons to expect it to stay in the mid 2s. We all wanted strong growth. Its a good thing. We dont want too much good news, we meaning the bond market it would mean higher Interest Rates. For now its probably better to see moderate growth, something closer to potential than some robust figure on growth. The journal has a piece this morning saying that the president was with modi in davos and modi was saying we grew at 7. Ill read, mr. Trump told the executives he could deliver the same Economic Growth if given a second term, according to attendees. Perhaps on a nominal basis which is taking inflation rate plus the growth rate domestic purchases, the figure was close to 7 , not to give mr. Trump a figure to cite but there is one in that report. Its highly improbable that the u. S. Would achieve such a growth rate because of the labor story. Simply arent as many human beings to produce goods and services, at least in terms of entering the labor force, and the productivity story is already very good relative to india and even china john, were setting the stage, according to tony, for three more this year and maybe one next year. As an allocator of capital, what are you going to do . We remain long in equities, continue to have a position that allows for a bond position were right now 68 global equities, 20 fixed income with the fixed income primarily in the u. S. At the end of the day the yield differential isnt that great when you take consider currency risk involved should the dollar strengthen for u. S. Investors. You think the dollar is going to continue to weaken . Were basically sitting at threeyear lows. How much of that makes you bullish on the markets how important is a weak dollar to that narrative . Melissa, i think a weak dollar and i put that in quotes is a competitive dollar a competitive dollar is good for u. S. Multinationals its good for the u. S. Economy. At what point does it flip . Well, you know, i think if we saw a significant drop that was based on some fundamental problem or a risk that was developing that was unexpected, but otherwise i think we are in that environment and it goes back for years i can remember when secretary of the treasury ruben many years ago would say we want a strong dollar even as the dollar fell, and it seems to be that on the beltway a weak dollar means competitive dollar anything over the last few years, at one point we saw the dollar appreciate 20, 25 cents against many currencies and that was a bad thing for u. S. Investors and u. S. Companies. Were going to leave it there. Thanks so much as we go to break this morning, Pay Attention to starbucks. Reported that earnings beat but revenue did miss comps only up two and said that sales growth would be at the low end of its prior forecast. We talked to Kevin Johnson in the last hour where he talked about china. We have a huge opportunity ahead in china, and certainly this last quarter represented that 30 growth in china. That was before the acquisition of the east china joint venture which just closed at the end of last quarter so the opening of the shanghai roastery also punctuated how strong of a position we have in china. China clearly is the longterm Growth Opportunity secretary mnuchin joining squa squawk box to clarify his statements. The first part was we dont care where it is on the short term and the second part was stating there are positives and negatives and the third is consistent with our policy which is a longterm dollar is the best interest of the country and reflects the economy and the reserve currency. Dominic chu with more from our spotlight. Carl, with so much drama, theres no wonder some of the biggest traded funds and currencies in general have been a big focus. The value of the dollar hit multiyear lows yesterday. The ticker uup is a fund that has around half a billion dollars worth of assets and has been on a down trend, mirroring the moves weve seen in the value of the u. S. Dollar performance is tied to how the dollar fares against the euro, the yen, the pound, the ronea. It isnt straight dollar related funds. As you might suspect, ours attract currencies versus the dollar have also fared well as others have done better versus the dollar one example is the Euro Exchange traded fund. Its a 270 million fund that tracks the euro. Its up over 3 this year, up 15 over the last 12 months and of course we got to talk about the commodity complex. Its going to be a focus as that falling dollar helps provide a tailwind for dollar dominated commodities. Golden oil has been a beneficiary of the weaker trends and that means look to funds like the Spider Gold Trust and the u. S. Oil fund as well. There will be other funds that feel the ripple effects of the dollar move, certainly something well be keeping track of. Back over to you. The volume has been heavy really popular trade these days, tom. Thanks so much lets send it over to sue for a cnbc news update at this hour heres whats happening at this hour. In davos, President Trump calling a New York Times report that he ordered the firing of special Counsel Robert Mueller fake news. The times reported he backed off after white house lawyer don mcgahn threatened to quit. Did you speak to did you want to fire Robert Mueller . Fake news, folks. Fake news. Typical New York Times fake stories. At least 37 people were killed and more than 140 people were injured in a hospital fire in south korea it was the deadliest fire in that country in ten years. Most of the victims were elderly. Officials believe the fire started in the emergency room. The hospital didnt have a Sprinkler System because of its size it was not required by law. Residents are digging out from the heaviest snowfall of the season in the california sierra mountains crews are working around the clock to keep the roads clear as drivers endured some very tough conditions getting up and down the mountain that is the news update this hour melissa, i will send it back downtown to you. Sue, thank you. When we come back, america is open for business well break down the president s pitch to the world and were about an hour into the trading session, taking a quick check on where we stand right now. The dow hit a record high. Its up 69 points. S p adding 11. Nasdaq higher by half a percent. Back right after this. We took legendary and made it liberating. We took safe and made it daring. We took intelligent, and made it utterly irresistible. We took the most advanced eclass ever and made the most exciting eclass ever. The 2018 eclass coupe and sedan. Lease the e300 sedan for 569 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. In his first speech at the World Economic forum, President Trump pitching america to the global community. Now is the perfect time to bring your business, your jobs, and your investments to the United States. This is especially true because we have undertaken the most extensive regulatory reduction ever conceived regulation is stealth taxation weighing in this morning, Jerry Bernstein and james cucas. Happy friday, guys jimmy, long discussions this morning about potential policy shifts or at least the packages they come in what did this morning teach us i think we keep looking for shifts, i think particularly on trade. I know thats come up on the show theres been all this renewed enthusiasm that he wants back into the pacific trade deal. When i listened close to that speech, i saw the same donald trump, which says i like trade, trade is great, invest in america, but it will be on our terms. We are open for business on our terms and our terms are these trade deals have to be fair, reciprocal and by that i think what he means fundamentally is they cannot be about trade deficits i want smaller trade deficits, i want trade surpluses i heard that in the speech very clearly. Jared, he argues its working given sentiment here, stock market indicators and apparently bonuses in cap ex improvements and even the mood out of davos appears to agree with what hes saying do you agree i do. It certainly boosted the mood or the animal spirits of business folks and thats what happens when you give them a massive tax win fall so thats not a surprise to me i found the speech to be quite unique you really have two groups at davos, you have political leaders and their trade ministers, and you have business folks. Typically when president s speak to that group, to those groups, they talk about global integration. The theme of their talk may be to boost their own economy to some extent, but generally theyre talking about ways in which you might integrate more globally donald trump with his America First kind of motif wasnt able to do that instead he became a salesman in chief and argued heres why you should invest in america we can have a good argument about whether his Investment Strategy is the one id endorse it isnt but that was a unique speech. That was a different kind of talk too give at davos. This was not a globalist speech it was whats good for america is good for you. The train is leaving the station, im the conductor on that train, jump aboard, but we will set the terms for our engagement in the world, whether its investment or trade or foreign policy, again bringing up the part about nato, wanting nato members to spend more on their own defense. Is that such a hard pitch to accept, jimmy . I mean, what did you expect the president to say it sounds like he went within his framework of make America Great again and America First. This seems to be as far as he could go and still leave the door open to remaining integrated globally. Listen, i think this was mostly a speech you would probably hear from a lot of republican president s, not the stuff on trade if jeb bush was president , i think we would hear more about global integration, a more global vision, a lot more aspirational talk about global goals, whether its Climate Change even or global poverty. Youre not going to hear that from this president. It was a trumpian speech and he did downplay some of the more inter trumpy aspects its not waiting for him to become a free trader thats not going to happen. Jared, id love to get your take on all this dollar madness this week. Peter vukbarr says the best thing would be for the dollar to not drive economic behavior but instead just reflect it. Is that what they tried to do this week or was this a matter of just bad coms they really got their message all screwed up but ill tell you something and this may surprise you, i actually thought what mnuchin said yesterday and some of what he said today, what you just played, made a ton of sense. I dont think u. S. Treasury secretaries should have to go around always saying we want a strong dollar, a, because they dont, and b, it breaks with reality. This is a thing thats sort of like a verbal tick that theyve had since bob ruben was treasury secretary. They should be neutral they should be neutral on the dollar and pretty much every other variable mnuchin spoke the truth. Hes not the first one by the way. John snow used to talk about that, lloyd benson, paul oneil. So he spoke the truth and that got him into all kinds of trouble. I dont think any u. S. Treasury secretary should talk down the dollar i dont think they should talk up the dollar. I think they should be neutral on the dollar. I love the new republican supply side economics. Jimmy, jared, thank you guys. Have a good weekend, see you soon. Thank you the race for amazons Second Headquarters is heating up were with the governor of the one of the cities on the short list, larry hogan. Scott . Thanks, good morning. There are three sites in metropolitan washington d. C. On that list of 20 finalists for amazons hq 2, one of them Montgomery County, maryland. Governor larry hogan, youve proposed a package this week of 5 billion in incentives to lure amazon the others havent said what theyre offering is that what you think its going to take to bring them here look, if this is the Largest Economic Development opportunity in a generation, 50,000 jobs, it would have a tremendous impact on not just Montgomery County but our state and the entire region its something we believe were going to do Everything Possible to try to lure those jobs. These are 50,000 jobs that average 100,000 in salary so the impact is pretty fantastic. Some of this is tax incentives over a 15year period. Some of it is direct money from the state, and a lot of it is Infrastructure Improvements that will not only help amazon but will help the state and the region. Youre a state thats not without needs like any other state. A lot of urban areas, infrastructure issues that you just talked about, schools, pension liabilities. Is this the best use of your taxpayers money on the taxpayer money side, its about 10 million a year over 15 years. 3 billion is amazons money that we let them keep in their pocket over 15 years so its money were not currently getting. The rest of it is Infrastructure Improvements weve got almost 15 billion worth of infrastructure road projects happening were putting 5 billion into a light rail project, the purple line which runs through Montgomery County. You add it up, there are a lot more dollars involved but were fully funding our schools, record funding every year. Our budget our economy is going very well. Cnbc says we have the 7th best Overall Economic performance of the states in the country. So why Montgomery County in particular both over the other two sites, Northern Virginia, d. C. , the other 20 why is it important for maryland to have amazon here and why is it a good idea for amazon to come here . First of all, its great im excited that there are three potential sites in the washington area. I think that says a lot out of the 20 that we have three. Anywhere they decided to go would be good for maryland because even if its in d. C. Or virginia, many of those folks live in maryland but were fighting to try to bring it into our state. We believe we have a good shot and a good story to tell were located right in the heart of the midatlantic region weve got the most educated workforce in america we were called the most innovative state in the country. Weve put tons of money into infrastructure, and we have the highest Median Household Income in america weve had our best year for business in 15 years, our best year for job growth in a decade. Weve had one of the best economic turnarounds in america. We think that this would be just a tremendous shot in the arm for the entire region. So weve been looking at the various cities involved in this and putting our own numbers to it, our business numbers and doing these report cards i want to talk to you about maryland we give you a cminus overall, not bad but not great. In fact, Northern Virginia does better the areas where we ding you, yes, you have a great state economy as you mentioned but have come under some fire for regulatory issues, need of Regulatory Reform so that hurts for stable business friendly talent, yes, you got a great, strong workforce, educated workforce, but retaining them and attracting people here, theres issues like quality of life, crime and things like that on location, the infrastructure issues, second longest commutes in the country in this state, and you want to put 50,000 more people here. Wow, thats a lot of issues yeah, so maryland had some real problems before i was elected governor, we ranked 49th out of 50 states. You rank us number 7 we had tremendous improvements some of the things havent caught up yet. We have selfinflicted wounds. We were overregular rattedoverr overtaxed. Thats all changed weve cut 255 fees, cut taxes three years in a row that will be our fourth year in a row. Thats why were seeing the best job growth in the midatlantic region, much better than virginia, and many of the issues that youre talking about are problems that everybodys grappling with but Montgomery County maryland is not where you have the crime problem Montgomery County is one of the wealthiest in the america, very diverse, very highly educated and a tremendous place and i think it fits most of the criteria that amazon is looking for. We had the second worst traffic in america we currently have and nobody had done anything about it for 8 years. I now have 14. 7 billion in a transportation plan, 9 billion, 1,000 road projects currently under construction we Just Announced the largest Public Private partnership in the world. Another 9 billion to widen i270, i495, baltimore Ocean Parkway and a new transit system. Governor, we wish you well along with the other 20 cities well see how it goes as our amazon race coverage continues lots more about this always at cnbc. Com carl thank you very much. Intel reporting earnings beats on the top and bottom line chip maker is bullish. Ceo bob swan is going to join us on squawk alley dow is up 90, most ll ll lly 3 d intel having their best month since october of 2015. The stock market is at an alltime high but what stocks are trading at extreme highs find out on trading nation more squawk on the street coming up. Think your Large Cap Equity Fund has exposure to Energy Infrastructure mlps . Think again. Its time to shake up your lineup. The alerian mlp etf can diversify your equity portfolio and add potential income. Bring amlp into the game. Before investing, consider the Funds Investment objectives, risks, charges, and expenses. Read the prospectus carefully at alpsfunds. Com amlp markets having a good friday here a fresh record high. Intel continues to contribute to the dow. Continues to contribute to the dow. Yeah, ge not a contributor falling below 16 as we pointed out yet again this morning all right. Lets send it over to jon fortt now as we give you a look at the market there hell give you a look at whats coming up on squawk alley. Were going to have the chief Financial Officer live and talk about exactly whats coming next especially that First Quarter guide which is different from what some expected thats an squawk alley next. [ keyboard clacking ] [ click, keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. Of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Now lets get to the cme group in chicago and Rick Santelli with the san tell li exchange, rick. Thanks, melissa lee i like to welcome my guest, doug, thanks for taking the time today. Thanks, rick. Happy to be here. You know, davos has always been known as kind of global event and indeed it is and the president spoke there today, and ive often thought theres always a half empty and half full way to look at things. Half empty the way they seem to be more favored towards the term populist or nationalist. I think half full, lets talk about patriotism i think the president may have had that in mind id like to play a sound bite of his speech today when he was speaking at davos. I believe in america. As the president of the United States, i will always put America First just like the leaders of other countries should put their Country First also but America First does not mean america alone. You know, doug, i just find that very important. And i know sometimes media just doesnt give him the benefit of the doubt, but in this time we live in, especially after credit crisis, thinking about the home base and a patriotic way isnt a negative thing i think the president put it in terms where that all countries can think about their own because thats what theyre elected to do. But that doesnt hurt the global scheme of things and the global integration. Your thoughts. I think thats right, rick. I really think it was a very nice message that the president had. And he also emphasized that there are important changes in the United States that would invite other countries to invest here and to expand here and thats true. I think he put that on the radar screen and said, yeah, were going to take care of the United States, but thats an opportunity for you as well. You know, and joe had a great interview, and im sure you heard all or pieces of it. And a couple things jumped out at me, he brought up the notion of being reciprocal and also bilateral used as with regard to trade. On both those instances its hard to argue with the notion, doug, that if you have 11 countries, australia, malaysia, mexico, new zealand, peru, singapore, vietnam and tpp, that it would be much easier and maybe in the best interests of the u. S. To have more oneonone talks. Think of trying to make a decision around a holiday table with ten relatives isnt there some truth to the notion of getting more specific country by country with regard to negotiating trade so i understand their desire to do country by country enforcement of trade agreements, but im still in favor on balance of multilateral agreements what you want to have are the same rules for everybody and i think thats easier to get in the multilateral setting. But once it comes to enforcement, thats not an issue thats other than u. S. Versus someone who might be infringing on those trade agreement i like bilateral but would rather see multilateral trade agreements. More quickly, i think were almost out of time, i think its ironic one of the weak aspects of todays gdp although Steve Liesman pointed out all day pretty good is trade imports are ahead of exports, which is question mark with a weak dollar anyway, but that took about 1 away from gdp. Can you speak to that . And speak to the notion of how important trade is quickly. Trades very important. The globe is expanding rapidly, so the world economys in very good shape, but i think the hidden part of the dollar decline is the cost of dollar financing for other countries. And i think that explains the imports. All right thank you very much, doug. Have to go thank you for being our guest today. Melissa lee, back to you. Thank you, Rick Santelli. When we come back, much more on the president s comments from davos, joined by former treasury secretary larry summers, big hour ahead on squawk alley. A g. Liberate your spine. Aflac and reach, toes blossoming. Not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. So he had your back . Yup in just one day, we process, approve and pay. One day pay. Only from aflac but prevagen helps your brain with an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. 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