Listening about the european equities. Which are also positive right now. Right. I look at it every morning. Its called the cnbc app. Okay. Well say its the cnbc app. But you look at that, and see what time it was this morning. They were already sharply up. I saw 92 in the u. S. So we are off the highs at this point. I dont know. I didnt look at fair value. So you have to check that. But we left at 10 45. This was before 5 00. So at least for the last hour. I was listening to the radio at 4 00 a. M. I shouldnt listen to the radio. Are they experts like we are . No. So youre getting information from the local i wont say what Radio Station i was listening to. A lot of times it was wcbs. You should have known, it was in the markets. And number two, the counter factual never happens. Good things happen against the establishment thinking. Overnight in asia, this is what happened before we show you the european equities sharply higher. I heard that and i heard the european thing. Hang seng, japan, lower as we start the morning. France is lower. And spain is higher by 1 . And the price of crude oil at this hour is back above 50 solidly. 52 p 52. 26 relative to the deal announced last week for opec. Major currency, 106 on the euro. It dropped to below 106 in the immediate wake of the announcement about the upcoming referend referendum. We were worried at 122. I saw good quote, there was not going to be a brexit. They are just going to step away from the rubble. If europe breaks up before if then theyre well say you can call this a referendum on the eu. I think so. For sure. Im staying with the eu. Number one, they want to parallel i dont like the fivestar guys. They are so far left. But they want to do a parallel currency. They dont want to adhere to any of the Budget Constraints from the eu. They its all well and good if they want to do that if theyre responsible for things they do themselves. I want to go back to italy instead of being with the bureaucra bureaucrats. He was out, he was in. He was going to do something. Thats good, yeah. Hes not a billionaire. So how is the main stream media going to trash him . Hes just a loyalist. Right. Hes a doctor. Doesnt know anything ahabit housing. Well, you tell me how the main stream media is going to trash him . Am i representative of msnbc here . Does that make you the representative of clear thinking. Yes. Here are the big stories we are watching today, Larry Summers just kidding. That was a joke. Leading the headline Larry Summers doesnt like the plan. The u. S. Army corps of engineers denied a plan to move the pipeline through north dakota. They have protested this pipeline for months saying it violates land considered sacred. President elect donald trump supports the pipeline and policy experts, but they believe he can reverse the audience. Since the Obama Administration denied the waiver for the whatever it was. Right. The new york fed president fiph dudley says they must finish work of wall street reform. The new Trump Administration, the president elect has admitted this. And apple is working on tech not to develop a selfdriving car. Last year apple wrote to transportation officials saying apple is investing heavily in Machine Learning and automation and is excited about the Automotive Systems in many areas including transportation. If they put siri in charge, shes so dumb. I try to dictate, i look at the stuff, what i say and what she writes. Im like, you have to go back to the drawing board and need to start over with all of us are going 55. Think of it that you can read while riding in the car. Is everybody going to go exactly the speed limit . Nobody is going to pass anyone. Can you use the horn . Is there anything good about any of the things we like now . Well need i cant let a driver drive me. I have a jeep. I have a grand cherokee jeep. Very excited for that. You had a maxima before that. I love that you get the great bells and whistles in the jeep. And theres no reason to watch the road. Theres so much great stuff going upon is there a way to override i hope not. Thats the whole point. Everywhere you go, you leave earlier. For as long as there have been automobiles, there are people messing with the internal controls. Right now especially volkswagen. That was just as you put it, but the new guys who go into the things and mess with the chips there are engines that are the worst powers of 275 and 250. They are all about the same engine and how the manufacture opener programs it. You dont have to worry about people hacking you or pushing you off a limb or the edge. Italys Prime Minister is stepping down after his reform measures were defeating in yesterdays referendum. Julia chatterley is here with more. Reporter you said it, defeat for Prime Minister renzi. His response this morning is perfectly clear. Translator i lost and i say it loud and clear, even if i have a lump in my throat. Because we are not robots. I beg you to believe that i did Everything Possible at this stage. Reporter even though the result was expected, there were a few surprises. Huge turnout, more than 65 of voters. And this is far higher than we saw in the last election. We also saw the novote win by an 18percentage point margin that basically left Prime Minister renzi zero room to maneuver. He had to resign. And that is now awaiting for tod today. Hes going to hand in his resignation. The president can accept it or reject it. If he rejects it, Prime Minister renzi stays in power. The problem is theres so Much Negative sentiment, i dont think hell survive it. So the more likely scenario is that the parent will follow the Prime Minister. Heres a look at what the press is saying today. I think this picture literally says it all. You have Prime Minister renzi with his head in his hands. The constitutional defeat here as you can see. And another paper this morning saying that renzi goes home. Guys, it says it all. Renzi goes home. We have to watch what happens and the Banking System there. We want to have good stewardship and conservation of the environment and Economic Growth. We have a real Economic Growth problem in america. We are limping along. Wages are flat. And jobs arent being created near to the extent that they could and should be. So regulatory relief is very important. On wednesday squawk box will be live in washington, d. C. At a gathering of business leaderers and policymakers from the Business World table at 8 30 eastern. Fantastic. Thats exciting. Its okay. I like the train. You like the train . I love the train. The taxpayers subsidized, always losing that route makes money. But we had the guy on. I think hes still there right now. He said, thats the way the guys work. All of am quarter amtrak hes in charge of amtrak. Or he knew what he was saying and didnt i cant believe a politician would ever if anyone thought it was planned, supposedly it was in the plans for weeks, but he complained about china devaluing the u. S. Currency and militarizing the south china sea. He talked about all the things in china. Talk about a main stream advertisetizzy. On friday president elect donald trump accepted a call from taiwan. Well have much more on chinas reaction in. We have given them billions of dollars in Defense Products every year. I just cant believe that anyone would they told us not to do that, steve. What is this . What kind of world are we living in . I dont know. You tell me. Do you feel as if when i see a New York Times headline about how phenomenal it was that opened up dialogue when that is celebrate in the media, and this is suddenly, oh, my god how can we do that . Did he talk to a democracy . Terrible. Youre outnumbered. Just like that show why dont you go. The president elect sending warnings to companies considering a move overseas. Heres what he tweeted, quote, there will be a tax on our soontobe Strong Border of 35 for these companies. And the companies are those that move stuff overseas. Joining us now, derek scissors, at the American Enterprise institute as a scholar. Good morning, derek. Thank you for joining us. Happy to be here. Tell us, first of all, if the president can legally put a tariff on a company that moves jobs overseas, what is your understanding of the law here, derek . Reporter well, i think the difference is between a Single Company and a positivecy with broad powers to put on temporary tariffs. If he sees a national emergency, he could watch the terrorist activity. He cant say i dont like this company and put a tariff on the economy to get an Immediate Court injunction, but if he wants to put out 35 tariffs for five months, he can. How would you structure that . Im trying to figure it out, would you say if anyone invests overseas. I cant begin to think about how this will work. A serious Corporate Tax reform, that makes sense. If hes just putting a 35 tariff on Companies Heading overseas, that gives Foreign Companies the advantage to selling goods to the United States. Or those already overseas doing it, right . Exactly. I want you to know as i tried to report the storm advisers. Two did not respond. Then i talked to three experts including yourself. We had a conversation yesterday, and your reaction and the reaction of the other two was whether or not to take this seriously or if this was a negotiating position at the president trying to put a there are three. Hes referring to the house plan and we can talk about that if you like. Thats a real thing. The other is the casual reference. It wouldnt work. And the one in between which is the one you just raised, because this is a tariff that will apply to all of us. Im not sure a warning shot is appropriate here, but its better than thinking the president elect is randomly going to put out a 35 tariff to destroy the market. Derek, it cant i tried to also report whether or not this could be referring to the house plan. But the house plan is a border adjustment thing that deals with, as i understand, the interimmediate goods and implication from the tweets is these are finished goods, so they have to be the same. Could this be the player i magically follow. Can we underline the house plan is very specific about not taxing exports but definitely taxing imports, right . Thats the way i see it. The core, doing it baked on sale sales rather than profits. Thats right. There are a lot of implications for the dollar. People are arguing over whether we are really close to the u. S. Trade deficit or not. Its a serious matter. I would love it if that is where the 35 tax on products is, but that cannot just be on those that move overseas during the Trump Administration. That will what were the markets every job that shifts the house plan is Something Like that to reduce the tax labor in the United States essentially. So its similar to that proposal as other countries use. Again, thats a reasonable away. Why dont his advisers know that . Hopefully well see followup today. Thank you. Derek, you are kind to get up to help us understand. Are you going to tweet it . Im going to turn to the camera to make a comment. I need to say this, joe. Do you know how many conference championships there were on saturday in football . Sunday morning. Oh, yesterday morning. The tweets came out yesterday morning. I was immediately on the phone until the giant game. Did you see brady . Yes. Donald trump would love to report on the details and simply get it out there, let us know and well do the reporting job we do for a living. Thats what i want to say. If we didnt have to spend all sunday on the phone due to policy changes what you watched last week you think i should forget about it. No, hes president elect. Were in the transition. Like last week, we had chilly conditions on monday. I talked to two conservative guys yesterday. When both of them say, i dont know whether to take the president elect seriously. Wow, you found republicans that might not be on board, where did you find that . No, these were scholars on trade, joe. Okay. Market fallout from the busy geopolitical fallout. Who should we talk to, joe. Talk to people who invest money for a living. Only them. Yes. Well talk strategy after the break. And enjoy your weekends. Enjoy the weekends. I enjoy reporting. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Generosity is its oyou can handle being a mom for half an hour. Im in all the way. Is that understood . I dont know what shes up to, but its not good. Cant the world be my noodles and butter . Get your mind out of the gutter. Mornings are for coffee and contemplation. That was a really profound observation. You got a mean case of the detox blues. Dont start a war you know youre going to lose. Finally you can now find all of netflix in the same place as all your other entertainment. On xfinity x1. Political upheaval in italy is the latest example following the brexit vote of Donald Trumps victory at home. And with change and uncertainty as it does in the markets, joining us now for more on the markets and the economy, ian sh shephardson. Hes famous. He goes headtohead with our chief economist, steve liesman. Thank you for that label. And todd gordon, a founder of tradinganalysis. Com. And a cnbc contributor. Ian, ill start with you. Is it possible that we dont immediately move back to much higher Interest Rates and a much stronger dollar . Isnt it possible that all these macro forces that put us here in zero for so long, that those last longer. As a result, all the dollar fears are unwanted or are you warning . Im warning but anything is possible. So what we have is an economy, even before we get any stimulus before a president or congress does anything, its running kind of hot. 4. 6 unemployment rate, wage growth is accelerating, so theres not much resume for maneuver. In terms of stimulus, we dont know how much, we dont know what structure or when, but were assuming well get something quite big piling a lot of pressure on the economy that probably doesnt need it now. So we cant dip into the 92 million, the people sitting at home, you know, theyre like twiddling their thumbs, we cant dip into those to ease are they all old and retired and not ready to come back . We dont know. This is a swillion question. Swillion . Its a big number. If we can put in 3, 4, 5 million, it would fix pretty much everything. But theres no certainty that we can. If you Ask Companies or look what they are saying about the availability label, they are screaming they cant find people. They cant find the people they need. But in practice, we dont have a mechanism to get them in, trained, working in the sectors that the employees want. So we have a mismatch, even though in theory, we should absorb a lot of people. Squillion is an extremely large number. You know what is going on this morning in the wake of the italian referendum . The euro is trending over 107. Explain a to me. So is it priced in . Yeah. So all the questions about the euro due to next year are still out there . We still have the french action. Thats very alarming. But this these are very separate issues. Really . Yeah. What do you think if they voted for stay or leave, you dont think it would have been 60 40 . 55 45 . There were specific obligations that were going to give. They are chafing under the restrictions from the bureaucrats in belgium that are responsible for no one having a job and everyone living at home. Thats true. Italy was one of the weakest places for support of the euro. 50 of the population versus 70 in france. Five years from now, the euro is a viable im not a massive lifelong supporter of the euro. I think it is enormously flawed and wouldnt surprise me if it broke apart at some point. But this is not the media triggered. This is not the thing that will break us. I woke up todd was that saturday night live. Todd, you already said emily natel this morning. You already referenced saturday night live. Those were the good old days of saturday night live. So last week every day we said, is the trump rally over or is it ready to sell off . This was on market watch, lead story, the trump rally is now in bubble territory. Or is it in bubble territory . No. We will see this until they final finally i am Still Holding the target of 12 by when . In 2017, who was the latest bank to jump on the bandwagon, goldman just jumped in with a 2400 target by 2017. So that is the consensus that becomes a little concerning, because everybody is looking for the higher market. The way i look at it is were coming into obviously a seasonally strong area, December Santa clause rally. The statistics behind it, since 1990, we have seen the higher market 74 of the time. So that is great. I just love the sector rotation we have seen. Its been amazing as we increase with industrials and financials. It is no longer a fade market. Consensus to the dollar being strong is so pervasive. But i think it cant be right. Theres a lot that has to be right for that to go up. I think it will happen, but it could double to what . Well, i will check my fourth one what is the tenyear doing when they do that . Its going up a long way. Well ask the stock market guy. What happens if he ends next year . They are not pricing in a 10 chance of that next year. Yeah. Its a very low probability, right . I need the real from me from a technical point of view is where the 60 basis points ar