brent crude up to 55.48. >> okay. breaking global market news some early news this morning. the uk supreme court ruling against the british government in a key brexit decision. the vote means the prime minister, theresa may, must get parliament's approval in order to trigger brexit. look at the pound moving on a result of this. you're seeing it falling there over a half percent this morning. a couple other big stories to tell you about, yahoo! reporting better than expected results on the top and bottom line. the company saying the sale of its core internet business to verizon should be completed in the second quarter which helped ease investor concerns that the deal might collapse. the $4.8 billion transaction was supposed to close in the first quarter. we talked about it yesterday along with that news that the government was looking at yahoo! and the fact it had not disclosed that breach earlier. barclays turning cautious on apple. downgrading the iphonemaker. the analyst is cutting apple to equal weight from overweight. seeing no meaningful rebound in growth in 2017. >> dupont is reporting. we have five dow components coming out. i can give you -- something for everyone here. the estimates are 42 cents. bottom line number is 30 cents. continuing ops number is 29 cents, but the adjusted earnings per share is 51. that's 9 cents above expectations because the revenue number is 5.2 billion. the estimate is 5.294. it's very interesting to look at dupont. in the first and second quarter the company earned 75% of its earnings for some reason. 75% of the year usually comes in the first two quarters. it's not a school book. not like a textbookmaker, not like h & r block, but the way it's booked, if you look historically, in the first and second quarter, the company earned 1.26 and 1.24. third quarter, 34 cents, this quarter 51 cents. >> they make a big deal about the year overall. much more focused in the press release on the year. 2016 is an important year for dupont as we exceeded expectation for earnings, cost savings, free cash employee improvement. this is according to ed breen, chairman and ceo. >> they expect to close the dow chemical merger in the first half. constructive discussions with regulators on that deal. volume in the fourth quarter fell 1%. asia pacific sales, 1.54 billion. u.s. and canada the lion's share, 1.68 billion. we have four more dow components to go today. we have that going for us which is nice. let's check on the global markets this morning. wasn't a whole lot happening when i looked on the way in. europe was marginally positive last i looked. asia, not much happening there. germany, france, ftse, italy all up fractionally. italy doing the best. the asian markets, not a lot to happening. hang seng, the best performer, up over 51 points. the dollar was more or less what we have seen recently, not a whole lot of movement on this news about brexit. i saw gold was back above 1200. a bit of a mini rally for the last six weeks or so. did we get a number on the inches of rain? did you -- >> here? >> did you notice how much rain? >> a lot of rain, wind. >> the pool cover -- dipping significantly? >> i can't see the pump. it's over the top. my question is i don't like rain when it's 40 degrees, it feels like 30 degrees. it gets into your bones. would you rather have -- >> davos? >> 12 inches of snow, i don't know how much snow this would have been. >> i'll take the rain. because we just came back from davos. >> what do you like? >> giving me a hard time about the driver in the morning and you're talking about the pool cover being -- >> it's a big above ground pool that i built myself with wood and matt greco came over, it's an above-ground pool. no, it is not. it's a pretty nice pool. i do give you grief about that but we're from the same place obviously. >> from a position of love. >> it would be much more impressive if i had my own pool in new york city. not really that big deal. if -- i shouldn't be admitting t because i may get taxed on it now, like in greece, where everybody has a pool but no one admits it. >> but you may have to pay higher insurance premiums. >> earnings will once again be front and center on the agenda. there are five dow components reporting results today. we already heard from dupont. still to come, 3m, johnson & johnson, travelers and verizon. we'll be hearing from alibaba and lockheed martin. after the close, texas instruments and alcoa. this will give a feel for not only how companies have done in the last quarter but what they expect to see this quarter and this year. the monthly philly fed survey of manufacturing and business conditions is out at 8:30 a.m. eastern time. followed by flash manufacturing pmi at 9:45, and existing home sales at 10:00 a.m. . on the washington agenda, committee votes are scheduled for the nomination of ben carson as secretary of housing and urban development and jeff seg sessions as attorney general. tom price will face his second day of hearings. hearings scheduled for linda mcmahon for small business administration administrator, and mickey mulvaney for director of the office of management and budget. doing a lot very quickly as this administration gets underway. >> not that quick. i think president obama had about ten people already confirmed by now, right? >> yeah. seven confirmed on his first day. there has been some noise from republicans saying they think that democrats are trying to slow things down. schumer says that he wants to make sure everybody gets a thorough vetting. >> that was it, that schumer thing with tom cotton. did you see that? pretty deep. eamon javers up to speed at the white house. president trump will have breakfast with the chief executives of general motors, ford, fiat chrysler. if he doesn't want the middle name, it's yours. >> i will take it. >> you already have a middle name, don't you? >> i do have a middle name, andrew after my grandfather. >> that's a crappy name. >> great name. easily -- >> but not after andrew ross sorkin. i'm named after andrew javers. not andrew ross sorkin. it's one of those long royalty names where you get 19 different names. effin is right in the middle. >> it modifies a happening guy, all the other names. >> i decided it modifies it in a good way. >> yeah. duh. >> it's a compliment. >> all right. take us away. >> big day of ceos at the white house yesterday. another big day today. we have the big three automakers. let's start with last night, we had the congressional leaders at the white house last night meeting with president trump. this was a bipartisan group. democrats, nancy pelosi, republicans, the vice president, the speaker of the house there. this is something that we didn't see all that much of in the obama years, president obama famously didn't like socializing and schmoozing with members of congress up on the hill, even those of his own party. famously introverted. now donald trump extending an olive branch, bringing those folks in. we'll see if that had the desired effect. the new york sometimes is reporting this morning that their sources are suggesting that donald trump repeated an untrue statement last night about the number of illegal votes that cost him what he said was the popular vote in the election last fall. we will see if that smooths relationships or further ruffles their feathers. but the trump administration did get a couple of big wins on capitol hill yesterday. feathers ruffled or not, rex tillerson was moved out of committee, there you see the vote, 11 in favor, 10 against. the big news there is marco rubio decided to back rex tillerson. he was the one vote on the republican side that could have caused trouble for rex tillerson. he decided to get in line. he said the president deserves a significant amount of deference when it comes to picking the cabinet. mike pompeo confirmed last night. 66-31. easy confirmation fight for the new head of the cia, who will go over to langley and deal with relationships between the trump administration and the intelligence community. today, the big three will be at the white house. you know the names, mary barra, jim fields, and marchionne going to be at the white house this morning. we'll try to talk to them on their way in and way out and hear what they have to say to the president. the supply chain globally will be a big focus of the meeting. we will see if specifics get hammered out or if this is an introductory get to know you session with more to come down the line. >> eamon, thank you. i saw you tweeting yesterday as they were coming in. >> we were staking them out in the driveway yesterday. we'll do that again today. key comments from trump's treasury secretary pick, steve mnuchin. in written answers to the senate finance committee mnuchin said an excessively strong dollar could have a negative impact on the economy. he was trying to walk a fine line between comments his boss already made about how he does not think a strong dollar is a good thing. in the past treasury secretaries say they look for a strong dollar, he said that but tried to say in the short-term sometimes it's not great to have an excessively strong dollar. as a result, the dollar was a bit weaker yesterday in reaction to the reporting of some of this mnuchin also accused the imf of not doing enough to combat currency manipulation. he would not give the committee a clear answer on whether china is manipulating the yuan. the trump administration said in the first 100 days that they plan to declare china a currency manipulator. president trump named agit pai the new chair of the fcc. he's a republican, he's been a commissioner at the agency since 2012. he is expected to roll back net neutrality laws passed by the fcc in 2015. he's known for being an anti-regulation and pro merger generally. last month he said he wanted to take a weed whacker to current fcc rules and predicted net neutrality's days are numbers. he previously worked at the justice department and verizon. >> this is really interesting. i have to go back and remember what net neutrality is. i know it's bad for the cable companies, good for the new technology companies. >> flip it around. if you -- >> net neutrality itself. >> yes. good for the companies trying to push traffic down the pipeline. >> you spend, you know, $30 billion building out your network, then you're unable to charge for people that use most of it. it was like an acronistic ruling. and wheeler was anti-net neutrality. the president told him what to do, he got in line. >> silicon valley was too close to the obama administration. you wonder what happens with some of this. >> it was purely political. three guys, two of them are one party, one is the other. whoever is president controls what's going on. not apolitical at all. joining us now is ed keon from qma, mary ann bartels, head of merrill lynch wealth management portfolio strategy. if we were to look at an s&p chart or dow chart, we're short-term oriented, so the flat line i'm talking about is six weeks or something. maybe only four weeks. we had the big run up after november 9th. we stalled. we're not babove 20,000. is it just consolidation after the big gains? is the market waiting to see the actual policies that get enacted and gauging what trump will do? or waiting for the underlying economy to show signs it has now gone above -- or is it all of those? >> i think on some level it's all of them. >> you think so, too? >> yeah. >> any of them more -- is it 33, 33, 33? or 34, 33, 33? >> i think it's more digesting the gains than anything else. >> what do you think? >> we had a sharp run up, a short period of time. it's not unusual to consolidate the gains. we have not seen concrete policy yet, it's only been less than a week of the new administration. and earnings will be the most important driver of stock prices this year overall. but policy will matter, so it's a pause that refreshes. >> a pause that refreshes implies when it resumes t resumes by going up. not giving back all the gains we already have gotten from disappointment. >> that's my best guess. >> you, too? >> i think we should break to the upside, most people are not expecting it. the market inflicts the maximum amount of pain, everybody said to sell after the inauguration. i think we can break to the upside. i wouldn't be surprised somewhere in the first quarter if we had a 5%, 7% pull back within the markets, that would be normal and seasonal. >> so the outlook this week, will the outlook be that these companies -- any of it based on the new administration or animal spirits? do you think they'll raise their guidance based on a better business environment? >> i don't know if they'll raise guidance, but we will see investment decisions -- >> hiring? >> that stuff is more likely to happen as a result. we have the consumer confidence numbers are up. psychology matters a lot. it looks different so far. >> you think so? >> i think what many of us are looking for is a capex bomb. we have not had one for a while. energy was the last capex. a lot of optimism is coming in under the new administration. there seems to be confidence in corporate america. so, if we can get that confidence, get commitment -- >> are you talking about in forms of manufacturing as was the focus of trump's meeting with business leaders yesterday? >> it's not just manufacturing. i think just corporate america in general. entrepreneurship, starting your own company, innovation. that's what we need to get back to. >> the president tweeted five minutes ago under the atreal donald trump handle. we'll be meeting at 9:00 a.m. with top automobile executives concerning jobs in america. i wanted new plants built here for cars sold here. not a big surprise. >> so ed, qma, now you're ans a set allocator, too. >> overweight stocks, underweight bonds. >> all stocks? what about healthcare and energy and financials? >> where we have more flexibility, i'm overweight f financials. it has been flattish in the whole period where the market has flattened out. i still think that's a good place to be. >> did a lot on the first day. i wonder if there comes a day where he says i will look at dodd-frank, here's what i don't like. i wonder if that day can be coming. >> that's a hard -- you can't sign it all away. >> you can do a few things. >> that's a larger project than a -- that's more than a day project. >> but it might make sense to stay long financials thinking that's coming, right? i imagine many are. i think we'll talk to dick bovet who has a view on how the banks are managing this. >> really? >> i think so. >> he's coming up. how timely. >> how fortuitous. >> i would say how seren d serendipitous. >> did you know if you're good at something, it's a forte? >> itnstead of forte? >> you learn a lot. a full service operation here. especially early in the morning. i think the biggest thing that happen the last year is the breakout in the banks and move in financials. that's important for the markets going forward. and that it continues? >> yes, markets generally don't go down when financials are going down. >> thank you. >> thank you. >> thank you. when we come back, watch out uber eats and grubhub. a beer and pizza fetching robot will give you a run for your money. these are pictures you have to see to believe. we'll tell you about the new heights in artificial intelligence when we come back. poit hseow pdge,bre r'ch poit stolewih onwnsu♪whetr er shem..h e.e. a asasasorns, one c3an for$389de with the xfinity tv app, anything with a screen is a tv. stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. welcome back to "squawk box." i don't -- terminator was hunter killers, they were bad. this sounds positive to me. a humanoid robot hitting the street today ready to bring you beer and pizza. it's been nicknamed funny. among the things that make this guy special, it can order and pay for food instead of just picking up and delivering a meal. he has a funny look. great idea. beer and pizza. no indication he'll kill you at this point. who knows. >> looks a little slow. >> stupid or -- >> no, literally slow. when they showed the pictures of him going down the sidewalk. >> three years from now he'll be running down the street. >> which will be great. >> unless you're trying to create jobs in america. >> i was thinking the same thing. you have seen that scary thing running on hills and stuff. >> the robot from google. >> i was thinking about in reference to this was the president, you know, if really does want to keep jobs here with manufacturing. but where do you draw the line by saying do you -- do you tell people not to out mate? >> i don't know if you saw some of the stuff -- >> the one thing that impressed me, don't know if you got a chance to go to the panels in davos at all. >> that would be a no. >> this was how advanced some of the a.i. stuff was, artificial intelligence. >> that was a big discussion. >> that was really freaky. >> what's an example? >> how quickly some of this is coming. that robot made it look like some driinky thing that's not impressive. two, three years from now, how many jobs, not just blue collar jobs, but white collar jobs. >> there's watson. we talked about that. watson is doing a lot of those things, crunching some numbers. those would be white collar jobs. >> somebody said manufacturing in america is almost like an acronystic. >> our guest yesterday was saying manufacturing was much bigger than it was. >> manufacturing is bigger, not necessarily in the context of jobs. manufacturing is bigger in terms -- >> dollar terms. >> we'll be building all sorts of factories, but they'll have a lot of robotics and ai in them. >> so you in davos, you landed. >> i landed. >> i stay in the private jet, stay up there and circle and talk about how to solve climate change. get down with the people. >> these panels -- >> i didn't go to many. >> are they televised? >> you can watch them on youtube. you can sit in your room, joseph -- >> there's other things besides the -- >> cue hang out in your room, eat pizza and watch at home. >> lots of panels. >> in the last 15 years, have they had success addressing any of them? >> they have. some gender inequality issues. you talked with matt damon. >> that i want to do something. >> it's better that people around the world come together than they don't. >> if this were to go by the wayside, you think something would change in the world? >> i do. >> i do. >> polycarbon footprint, the waste in davos, the people there might not like it. >> a lot of them go out of town, but they do get money in town. when we return, banking in the trump era, dick bove he wil have his take on the sectors to watch. plus as we go to break, the s&p 500 winners and losers. >> good . welcome back to "squawk box" on cnbc. we're live from the nasdaq market site in times square. u.s. equity futures have been indicating higher. dow up by 1, nasdaq up by 44. dupont earnings beating the street. revenue just about in line. the company says it expects its merger with dow chemical will close in the first half of 2017 pending regulatory approval. that stock up about 18 cents. shares of european telecom giant bt group are having their worst day in eight years. they found an accounting standal at its italian business and it's bigger than previously thought. bt is increasing a writedown announced in october by more than three times to $660 million. reports say that staff in italy colluded with suppliers to inflate profits for several years. the stock down about 17%. earnings out from alibaba. the company beating estimates on the top and bottom line and the numbers you're seeing on the screen right now are in renminbi. there was a 25% increase in mobile users. a company that seems to be -- >> 53 billion is not in dollars. that's in renminbi. >> yes, we're in renminbi. >> think about a company that has this year over year growth. >> you could put up anything then. >> we have no idea what it means. >> the uk supreme court ruling against the british government in a key brexit decision. the vote means that prime minister theresa may must first get parliament's approval in order to trigger the brexit. nancy hungerford joins us from london. i was looking for reaction in the pound of ftse. i don't know. it makes me think maybe this was not as big a surprise as we thought. nothing is going on, is there? >> well, it is a landmark decision coming from the supreme court here in the uk. but, joe, it was widely expected by the market and by legal analysts. it is a symbolic blow to uk prime minister theresa may and her government who brought this appeal, but nevertheless the government has come out and said we will move forward with our timeline to trigger article 50 by the end of march. that is the legal framework through which they must formally start the negotiation process to leave the european union. now the government has to get busy on bringing a bill to the houses of parliament just across the square from me in order to get formal authorization to start that process. the labour party said it will go along with the will of the people and it will not impede the formal brexit process, but they will be looking forward to put on the table an amendment that seeks to not allow britain to become a bargain basement tax haven as part of leaving the european union. that was word coming from jeremy corbyn himself. the other takeaway is on the issue of devolution, when we talk about the powers granted to parliaments in northern ireland, scotland and wales. there was some concern that the supreme court could give them a formal consultation on leaving the european union. that's a threat for the uk government because scotland has a big base of support remaining inside and northern islareland an election coming up. so this is clearing a big hurdle for theresa may and her government. they don't have to do formal consultation with those devolved parliaments. that's a big step as they move forward to clear the timeline. as we heard from theresa may last week, she wants to get out of the single market, from where she stands brexit still means brexit despite this decision from the supreme court today. guys, back to you. >> thank you. back in the united states, 18 of the nation's banks have reported earnings with nearly an $18 billion dip in common equity across the board. our next guest says that trend could be a drag on lending to president trump's economic revival program. joining us now is dick bove, vice president of rafferty capital markets. a bit of a contrarian piece you put out. got my attention. not as bullish as i thought you would be. >> the problem is that most of the information that you hear about banks is incorrect. if we compare it to history, and there's no likelihood that dodd-frank will be repealed. so, the net effect is these stocks are moving on incorrect theories about interest rates, incorrect views about what will happen with dodd-frank, and that makes them highly vulnerable. what we did see in the fourth quarter was that these banks are a staggering drop in their common equity. their common equity for the ones that reported that we follow dropped by $19 billion. that basically cuts $250 billion in lending power out of the banking system, which weakens the ability of the trump program to work. the banks more than any other industry need the trump program to work in order to get more loans made, in order to see earnings go up. all this fodder about interest rates is just ridiculous. >> that's the thing. walk us through it. i don't understand it. the prevailing or conventional view is that interest rates will go up, yield curve steepens, that's good for the banking business. separately we have the possibility -- i think possibly more than the possibility that at least parts of dodd-frank get repealed. you think neither of these things will happen or benefit the banks? >> correct. in other words, if we look at -- let me give you a couple urban myths. the first one is if interest rates are low for long, banks can't make money. interest rates were at record all-time lows from 2010 to 2015, bank earnings went up five of those six years, and in 2015, bank earnings were at all-time records. another myth, if the yield curve is inverted banks can't make money. from 1966 to 1982, the yield curve was inverted 47% of the time. in every one of those years bank earnings went up. another theory, if interest rates go up, it's beneficial for bank earnings, that will cause stocks to rise. >> i don't understand whether it's brian moynihan or jamie dimon or lloyd blankfein wo cho come on and said this, you think they're plaflat out wrong and dt understand their own business? >> yes. that's a strong statement. they're definitely correct that a rize se in interest rates wil lead to a rise in earnings, no doubt about that. but will the banks hold on to those earnings. if you look at the balance sheets, they won't. why don't they? banks have huge portfolios of financial assets. those financial assets go down in value as interest rates go up. in the fourth quarter what we saw was a big increase in earnings in the banking industry, partly due to the increase in interest rates, but every one of the big banks saw a decline in the common equity. why? because their financial assets dropped precipitously in value. in other words, you have a big piggie bank. in that piggie bank you're throwing in all this money coming from the higher interest rates. the problem is that piggie bank has a huge hole in the bottom. and you are losing that money because it's flowing out as the financial assets are dropping. >> i had that problem as a kid. i used to leave the bottom of the bank open, the pennies would fall to the ground. one on dodd-frank. only 30 seconds. >> the republicans don't want to get rid of it. the republicans want to keep it the only thing that the republicans wanted to do, this is a big government approach by the republicans, they want to reshape it to give the smaller banks some freedom has the bigger banks are not allowed to happen. the net effect is they're not talking about getting rid of dodd-frank. the shelby bill put into effect last year in the committee, you know, showed clearly that what they want to do is increase the strength of credit unions, small banks, old "sns nshgnls. >> so is the answer in all of this don't own the big banks? >> forget all the stuff about financial rates and deregulation. if the trump programs work, you will get a big increase in lending. if you get a big increase in lending, bank earnings will go up. focus on loan volume. forget interest rates and deregulation. dick bove, thank you, sir. >> the urban legend where the hook is on -- you find it on the car door, as they drive away. is that an urban legend? >> the dog licking your hand -- >> the maniac under the bed. do you know that one? do you know the one where they're warning her, she thinks that the guy is chasing her, he's warning her that there's a guy in the backseat. ndstinprcoan omerr rn t liv l earnings just out from johnson & johnson. this is the second of five dow components reporting today. johnson & johnson beating estimates by two cents, came in with profit of 1.58 a share, versus 1.56 the street was expecting. revenue just below the street forecast. j & j sales in the united states up by 2.6 in the quarter. international sales up by 0.6%. that stock is down by over 1.1%. >> defense and national security front and center as president trump shakes up the white house. there's already an update on the white house remember site about developing a statement of the art missile defense system. morgan brennan has more on this morning's executive edge. good morning. >> good morning. defense top priority for the white house. with its website promising to do away with sequester and the budget caps imposed on defense spending and to rebuild america's military so nuclear modernization is a key part of the agenda. the expansion of the ground-based mid course defense system to move forward. we have boeing, northrop grumman, lockheed martin to benefit from that. keep an eye on a 2017 defense appropriations bill. and the top line budget blueprint for 2018. that's expected in a few weeks, all of that as lockheed martin kicks off sector earnings this morning. we have about 24 hours after ceo marilyn husen met with trump about manufacturing. the street is looking about 3.05 a share on a little over $13 billion in revenue. other names reporting this week, lockheed martin, general dynamics, north north, ratheon just to name a few. so mulvaney having his confirmation hearing today, he will be a key person on defense spending going forward. >> so a lot of defense spending, but it has to be cheaper. how does that add up? looking at the formula one stuff. maffei will be on, to develop a car, $120 million. you wonder if you can do that -- >> and that thing stays on the ground. >> but it goes 240 miles per hour on the ground. someone's driving it. that will be an interesting interview. thank you. coming up, the cfo of johnson & johnson will join us to talk quarterly results and the industry's prospects under a trump administration. stay tuned. you're watching "squawk box" here on cnbc. thisurecway.heulul srica akesng wmeie toak, ack icgith t wheheco. n.shor or wheheco. itemo emig arouuayde he he.not fe le a vm f oun ud..thnsin♪ as we told you, johnson & johnson out with its fourth quarter earnings. we're joined by meg terrell and dominic caruso, the chief financial officer of johnson & johnson, also a member of the cnbc global cfo council. meg, start us off. >> thank you. dominic, thank you for joining us this morning. >> good morning. >> we got to start off by asking you, of course, about your ceo's meeting yesterday at the white house with donald trump. this is a president who just two weeks ago said the pharma industry is getting away with murder about its pricing. what can you tell us about that meeting? >> sure. well, thanks for having me on today. before i get into that, let me comment about our earnings this morning, which i thought were very strong for the year. we grew our top line at an accelerated rate versus the prior year. strong u.p.s. growth of 8.5%. a strong shareholder return for 2016 in excess of 15%. we're excited about that. we're excited about the momentum we built moving into 2017. you're right. our ceo along with other ceos met with the president yesterday. they talked about a variety of things, and we're very excited about working together with the administration to advance policies that would stimulate economic growth and job creation in the u.s. they talked about tax reform, regulatory reform, job creation, trade, all those things are very important and we're very pleased to be working with the administration to advance those. >> when you have a tone coming from the new president like calling your industry murderers, i mean, how do you respond to that with either policies or just sort of statements trying to work together with him? what kind of tone are you getting from the new administration? >> well, we're getting a positive tone in terms of advancing economic growth and also about controlling health care costs, which is, in fact, a concern. overall, the drug pricing, which seems to be a focus these days, is really, as you know, only about 12% or 14% of total health care costs. we know we have to price our products responsibly, which we do, and we know we have to disclose what's important about our products. for example, the benefits that they provide to society and the overall reduction over health care costs that can occur by using some of our products. we'll make sure we make those points very clear to the new administration. >> dominic, just to meg's point, that's some strong rhetoric to be called murderers. do you worry about the rhetoric? >> we don't really worry too much about rhetoric because the real action, of course, happens in legislation in congress, in committees, with the staff, and we're very open to working together to advance the cause of economic growth and job creation in the u.s. >> well, let's talk about the quarter and the guidance you just issued for the year ahead. looking like your stock is down slightly premarket on the results. maybe revenue coming in slightly light. what do you i this is driving investor reaction this morning? >> i think there's been, you know, if you look at consensus estimates estimates, we notice that not all the analysts that follow us have updated their projections for 2016 based on the recent currency movement. so of course we're reporting now based on real currency movements. we think that's one area of difference. we think that's really the only area of any significant difference. and it's really on a top line maybe $100 million. on the bottom line, we still beat consensus estimates by 2 cents. that was despite the negative headwinds of currency. even going into next year, we've updated our models to reflect the current currency rates, not all of the investment community has done that. we think that's the only difference between our expectations and theirs. on a constant currency basis, our expectations are really in line with the investment community going into 2017. >> well, looking forward to the year ahead, you also announced potential strategic review of three of your units in the devices category of your business. tell us about how you're shaping the business, what that might n mean for the devices part, and how you're building up in other parts. >> sure. we did announce this morning that in our diabetes consumer medical device, we're looking at strategic options. we're going to evaluate the businesses there, life scan. that's one part of our presence in diabetes. we're not at all abandoning our presence in diabetes. we have very strong drugs in diabetes. we have bar yat rik procedureia. i think that all those things are open. there's no assurance that any particular transaction will come out of that. your question regarding m&a, we're always looking to deploy our capital to increase shareholder value. we're very active in the m&a space. we did two significant deals last year. as you know, we're in exclusive discussion right now. i can't comment on those discussions, but regardless of the outcome of those discussions, we have enough capital and good capital allocation priorities to continue to deploy capital to increase shareholder value. >> what can you tell us about tax policy and how you're looking at that, shaping what you would do potentially with m&a? >> well, i don't think the tax policy would impact our capital allocation priorities a the all. m&a would still be front and center. it first has to be strategic, has to create value for shareholders. if there's a tax benefit associated with that, that's even better, but it wouldn't be our primary concern. we're very pleased, actually, with the progress being made on corporate tax reform. we support the house blueprint, and we look forward to active dialogue with the administration on this topic. >> dominic, thanks so much. >> thank you. when we come back, this morning's top stories, plus we'll welcome a special guest host. liberty media ceo will join us in studio. stay tuned. you're watching "squawk box" here on cnbc. inpop po ppsu attace aackenta a bye nd we ppsu attace p ts omg orin rucuc ck. aackenta a bye nd ngm kettix opakin ing door ayse bg an iss r , soti taeedi. vemalcy ng door neu beealedoorbo bd ors ofrea, the first 100 days. trade and jobs taking center stage in washington. liberty media group ceo joins us to discuss president trump's agenda and the future of media. earnings from personal care giant kimberly-clark. we'll hear from the ceo about the results and how changes at the corporate level by president trump will affect his business and the consumer. and investors, start your engines. formula 1 racing could get a makeover at liberty media completes its takeover at wildly popular racing league. the ceo joins us in a first on cnbc interview as the second hour of walk squawk beg-- "squa box" begins right now. live from the beating heart of business, new york city, this is "squawk box." good morning. welcome to "squawk box" right here on cnbc. we are live from the nasdaq market site in times square. i'm andrew ross sorkin along with becky quick and joe kernen, who's very happy this morning, he tells us, perhaps because of the futures. >> this is joe in a good mood, everybody. dow looks like it would open ten points higher. nasdaq up about three. the s&p looking to open up a little over a point. i know why you're happy. take a look at oil. if you're buying it by the barrel, wti crude trading at 52.80. finally the ten-year note, you're at 2.43. the other big piece of news out this morning, it is breaking out of europe this morning. it is moving markets. the uk supreme court ruling against the british government in a key brexit decision, meaning that prime minister theresa may may get parliamentary approval in order to trigger the brexit. check out the price of the pound, which has fallen on that news. europe at this hour as well. you're looking at still green arrows relatively speaking across the board. earnings just out from dow component travelers. earnings of 3.20 a share was above estimates. the estimate was $2.73. also, estimates came in above street forecasts, as i just said, for revenue as well. just barely though. the insurance company did see results in its auto sector fall, but improvements in international and business insurance helped as well as bond and specialty insurance. >> what's interesting is the auto business, the auto insurance business declining is because there have been so many more catastrophic crashes. we hear all the time about how you're not supposed to be texting and driving. people aren't paying attention to that. crashes are on the rise. the severity of those crashes are on the rise too, making it more expensive for medical costs. just a reminder, don't text and drive. it's showing up in all kind of business lines. obviously it's something you worry about if you have kids too. just pay attention to the road, people. >> two weeks. >> two weeks? >> two and a half weeks. every time you get somewhere, i need to know. >> yes, exactly. tell me, but not wihile you're driving. also, verizon came out with adjusted earnings of 86 cents a share. revenue is in line at $32.3 billion, versus the $32 billion the street had been anticipating. some other stories making med lines this hour, one of this morning's premarket winners is alibaba, which is out with its earnings. the company beat estimates by a wide margin on the top and bottom lines and increased its full-year revenue outlook. helped by a strong increase in mobile revenue. that stock is up by about 5% this morning. dupont one of just five dow components reporting this morning. it was the first of the bunch with earnings out at 51 cents a share. that was 9 cents better than the street was expecting. revenue essentially in line. dupont also saying it expects its merger with dow chemical to close during the first half of the year. johnson & johnson came in two cents above estimates with a profit of $1.58 a share. revenue just below the street's forecast. however, the company did get full-year revenue outlook. it falls short of estimates. that may be why the stock is down by about 1.7%. president trump will have breakfast with the chief executives of ford and fiat chrysler as he continues his efforts to boost employment. eamon javers is following this and joins us this morning. >> good morning. we've had our first tweet from the president of the united states this morning, coming in the 6:00 a.m. hour. here's what the president said about that meeting coming up later this morning. he said, we'll be meeting at 9:00 with top automobile executives concerning jobs in america. i want new plants to be built here for cars sold here. he's going to be meeting with the big three auto executives today, including mary barra of general motors, mark fields of ford, and sergio marchionne of chrysler. mark fields was there yesterday for the manufacturing ceo's meeting. fields recently re-read "the art of the deal" in order to better understand president donald trump. i think you guys can call that the art of dealing with the new president. a lot of ceos are wrestling with this issue, as andrew has been writing about, of how to deal with a president who can ding your stock price with an errant tweet or a tweet drek edirectedy time of day or night. yesterday the manufacturing ceos were given some homework, a 30-day deadline to come back and report to the president with ideas on how time prove manufacturing in the united states. we'll see what their homework assignment is today in the auto industry. >> all right, eamon. got other things happening on the washington agenda as well. committee votes are scheduled for the nominations of ben carson as secretary of housing and urban development. betsy devos as secretary of education, and jeff sessions as attorney general. tom price, who has you know is nominated for health and human services secretary, will face a second day of hearings. also hearings scheduled for linda mcmahon. she's ready to rumble. and nick mulvane, nominee for director of the office of management and budget. >> omb. we never say the whole thing. >> i would never want to do that. >> to be in charge of the budget? >> i would love that. >> with the pursestrings comes the power. >> sounds too complicated. speaking about trump this morning, our guest host this morning was quoted as saying that the regulatory environment for cable companies would likely be more favorable under president trump. let's get right to the president and ceo of liberty media corporation. we're thrilled to have him. we love it when you come. >> thank, andrew. >> there's a new fcc chief in town, which we just talked about at the very beginning of the show. why do you think this is going to change the game for your world? >> he's been very anti-regulation, pro-free markets. i heard you all were talking as i was getting my coffee this morning on my way over about net neutrality, title two, a lot of the issues likely to be addressed under a new fcc and a republican president, republican congress. i think those are all very bullish for cable. and probably level the playing field somewhat versus some of the over the top competitors and traditional silicon valley types. >> is this like a rip up the business plans sort of move for anybody who's in silicon valley, any of these ott companies who are planning on just using these networks to push a ton of traffic through? >> look, it's a little bit evolving and who knows, but net neutrality is a couple of things. one is the idea that you can't block content from providers. i think no one is going to change that. that part of net neutrality will stay. but the idea that you might be able to charge for quality of service for variability, the amount of traffic, the speed of the traffic, how you want to make sure the traffic is delivered might change the ability to price it. i think that now becomes a reality. does that fundamentally change the game for over the top providers? i doubt it. >> so you think it's on the margin better for the companies, so a netflix gets hit? i'm thinking of who gets hit and who wins. >> netflix is the most obvious, but if you take charter, some company that we're involved with, largest shareholder of, they cut a deal with both net flex and with the fcc about not charging interconnect fees, not charging for that quality of service. will the fcc rip all that up? i suspect that's going to take a while. >> is there an end date for the agreement with charter? >> a seven-year deal that probably has 6 1/4 to run. but could the fcc come in and say, look, we're going to level the playing field and change those terms, i don't know. >> what happens to the deal game, the m&a game, john malone, you, and others play that game regularly. he was out there speculating about the possibility of wanting to own a wireless player like a t-mobile, whether a deal like that is necessary in a world where you have at&t now playing seriously potentially with time warner. i want to ask you where that deal goes as well, but just more broadly. >> first of all, i think nothing happens that quickly in a lot of these things. if you look at charter, if you look at comcast, who are the largest cable providers, both of them have a business plan which they're executing on and have a lot of confidence in. tom rutledge has outlined a very aggressive strategy on growing cash flows, generating free cash to pay down debt and/or return capital via share repurchase. wireless is an opportunity. it's not a threat. little bit different than the european system where quad play is really an issue. here the plan that charter has is very good. looking at things like wireless is interesting. >> you said opportunity but not -- >> yeah, i don't think they're a threat. >> yet, you hear randall stephenson from at&t come on and say one of the great impetuses and motivations for buying time warner is the future of 5g, the idea he's going to bypass cable, bypass the physical line into the home. that sounds like a threat. >> what's the old line? he would say that, wouldn't he. randall is a friend. i get his hopes and dreams. i don't think that's really doable. if you look at 5g, you either need to have a massive amount of more spectrum, which neither of these guys do, with the exception of sprint in certain markets, or you need much more wire line to put repeaters in a terrestrial network. i don't believe either of the two big providers, at&t or verizon, has enough physical plans to roll out 5g markets. >> would they have to buy a sprint, or could they buy more spectrum? >> verizon has said they're going to roll out 5g in boston. that's going to take three years in a city where you have soup to nuts the whole stack. >> so this is like fios rollout all over again. >> yeah, i think it's very much market by market. if you look market by market, do they really have that capacity where they have to buy it or find somebody who will sell it to them. i think most markets there's not a lot of choices for them from whom to buy it. i think that's going to when a very, very slow rollout. i think 5g is a great statement, much less of a reality. >> when you look out into the future, ten years out, you say, okay, that's the future or no? >> there will either need to be significant tech no logical changes or more wire line plan. much more spectrum or wire line to roll it out. >> weigh in on the transaction of the at&t/time warner deal. does it happen, and does it make sense to you? >> you know, i have no great insights. start with the does it make sense. i think first, from the perspective of at&t, diversifying away from the more volatile mobile business is attractive. i'm less convinced there's enormous synergies between what they have with directv and what they have with time warner. they paid a pretty full price, but the diversification effort is a plus. whether it gets done, again, that's where i don't have any great insights. my guess is that trump, president trump is a deal guy. he's known for making statements and then seeing what the impact of them is. his statements about not wanting to see the deal get done, i suspect at the end of the day, will be more about not getting the deal done on terms which he doesn't find attractive for the american consumer, particularly around cnn cnn. >> is it even up to him? his department of justice will have to weigh in. >> i would be shocked if the department of justice was influenced by any political statements. >> or any agency. >> amazed. >> cia, any of them. intelligence, fbi. justice department, never. >> did you see the speculation about verizon wanting to buy parent company of this network, comcast? >> you told me yesterday -- i told you that, you had no idea what i was talking about. >> i think the chances are very slim. >> people weighed in, said it wasn't going to happen. >> i think it's crazy. >> well, i think there's a couple issues there. one, the relative market caps are not small. and two, you know, the organization of comcast, because of the high share count or high vote count that the roberts family has with the relatively deminimus economic stake makes some of those kind of deals more difficult. >> last one. sprint/t-mobile. >> if you look at the logic that the doj used in shooting down the at&t/t-mo merger, it's hard to see how that deal gets done. >> you're going to be sticking around. we have a lot more to talk about, including formula 1. >> vroom. >> a lot to talk about there. coming up, keeping america competitive with a fair tax plan. grover norquist breaks down president trump's ideas for corporate tax reform after the break. then at 7:30, we're going to hear from the ceo of kimberly-clark about the company's latest quarter and what president trump has in store for american manufacturing. and then we're off to the races with the ceo of formula 1 racing. he's a familiar face, familiar gentlemen. liberty media bought the racing league last year. how they plan to keep racing fans coming back for more. you're watching "squawk box" on cnbc. hng.ile tti eea anngreas,it we asked whether you had been in contact with the administration. i think off and on, and you're certainly willing, yesterday we didn't hear 15%, we heard 15 to 20. is that a sign of the negotiations that the president is willing to do to get this done? 20 look more likely? >> 20 looks more likely. these negotiations have been going on for maybe eight months. you remember trump had his original plan at 15% corporate. the republicans in the house, their original plan was 25. so the republicans moved from 25 to 20, towards the trump position on corporate rates. then trump at roughly the same time added full business expensing to his original plan, which did not have it. all of the other republican presidential candidates had fum business expensing rather than long depreciations, as did the republican house bill, ryan and brady's legislation. and trump moved in that direction. in both cases, they're moving towards a more pro-growth policy, and i think you're seeing that continue as you move forward. trump also adopted the house republican numbers on individual rates, 33, 25, and 12. so the two plans are coming together, which makes moving forward a lot easier. >> so the border adjustment tax, how difficult would that be to just get passed? ceos are petrified for the most part from that. you are too, greg? >> grover, this is greg. we own qvc. if you look at qvc, like many retailers, there are a substantial number of imports that we're selling to our customers. the effective tax rate for qvc would go up nearly three times. we'd be 4x the original, 300% increase. i don't think we're unique. now, you hear about -- and this is in the house plan and in president trump's plan. you hear about the idea that the currencies will rise to offset that. i've also read some evidence that that won't happen as quickly. and secondly, the inflationary impact seems like it would be potentially very negative. and even if the currency does rise to offset some of that, doesn't that go against some of president trump's statements about the currency being too strong? how do you look at all of this, grover? >> i think the piece of the house republican plan that trump folks are also looking at that is most problematic is the border adjustable part of it. it is the one that actually seriously disadvantages retailing that will raise costs for middle-income people, and it is a trillion-dollar pay for that allows a lot of the other very good pro-growth reforms to happen. if you're doing tax reform inside reconciliation, which means 51 votes are needed, and there is no deal -- we learned over the last eight years, there is no deal for which you can get 60 votes. obama was never willing to take the corporate rate down at all unless the whole package was a net $1.4 trillion tax increase. that was a nonstarter. so if you're trying to get to 60 votes, you've got nothing. you've got to do it within 51 votes. but you can replace tax increases inside tax shifts that raise revenue inside reconciliation with spending reduction. it is revenue neutral in order to be inside a reconciliation package -- i'm sorry, it's deficit neutral, not revenue neutral. you can have a big tax cut as long as you also reform policies to save money. so it's possible -- >> but grover, so you're talking about a massive benefit potentially to exporters and a massive hit primarily on retailers, to some degree importers, but primarily retailers that's going to get passed through to the american consumer, likely. i think that's very hard to see how that one trillion gets shifted without a lot of political heat. i think there's many cards left to play in that, even inside of a 51-vote republican majority. >> the overall package as constructed now, as put together, is extremely pro-growth and very powerful. there are winners and losers inside it, as you say. if you said is this whole package good for the economy, the whole package is great. can it be improved? might the senate want to tinker and stuff? and by tinker, i mean significantly look at, yes. >> grover, just to be clear, is this something that you would go along with, the border adjustment tax, even though it's going to be a higher tax on some entities. >> well, net it is a significant tax reduction, the whole package together. with dynamic scoring going out, it actually becomes revenue neutral, but that's -- >> is this finally a tax increase you could live with? >> if it was standalone, it would be no. side by side in a net significant several trillion-dollar tax reduction package, the whole package is pro-growth. could it be improved? absolutely. there are lots of areas that you could actually make this tax cut even better. but right now as a package, it will either pass or be improved on, and it should be done in the next six months. >> six months. we'll start hearing stuff immediately then as they hammer this out. >> yeah, it'll be out in a hundred days from the house trump side. >> wow. that's fast. >> who still buys stuff on qvc? who are these people? have you ever? >> of course. >> oh, crap. >> do you know how expensive that is? i'm amazed you bought that thing. that's like a $5,000 machine, joe. coming up when we return, the ceo of kimberly-clark. then at the top of the 8:00 a.m. hour, mario gabelli of gamco investors. back in a moment. time now for today's aflac trivia question. who was the first president to be inaugurated in washington, d.c.? ? sty le , ths t gonna wthouonu . m ? sty le e.? now the answer to today's aflac trivia question. who was the first president to be inaugurated in washington, d.c.? the answer, thomas jefferson in 1801. the v whti a a a baos $14.? (cworttoo v olkthod good morning. welcome back to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. a very busy morning for earnings. a mixed quarter for verizon, earnings of 86 cents per share, missing estimates by 3 cents. revenue topped expectations. another dow component, johnson & johnson coming in 2 cents above estimates with profit of $1.58 per share. revenue was slightly below street forecasts. however, the company gave a full-year revenue outlook that falls short of estimates. and dupont earnings at 51 cents per share was 9 cents above estimates with revenue essentially in line. dupont also said it expects its merger with dow chemical to close during the first half of this year. 3m is reporting looks like $1.88, if that is the clean number. that's versus expectations of 8 $1.87. sales, $7.33 billion. that's exactly in line with the estimate of $7.33 billion. i saw an outlook. a fairly big range. must be next year. yeah, that's next year. they just finished up 2016. so 8.63 is the estimate. 8.45 to 8.80. the trump administration is setting a goal of generating a dramatic acceleration in economic growth to an annual pace above 3%, even the four number has been bandied about. what would a 3% economy look like? steve liesman is old enough to remember the reagan years. >> no, i don't go that far back. bush years. there were two years in the bush years. >> only two. >> only two. that's the thing i want to get to. it's been 11 years since the economy last grew north of 3%. president trump says his plan can get us to four, but economists say he'll be lucky to get to 3 from the current 2% average. i look at the bloom years, the nine times since 1990 that we grew north of 3%. the first thing you realize is the secret sauce is rare. it happens just 30% of the me. here are some other characteristics of a strong economy like that. you get consumer spending north of 3.5%, that'll be good news to our guest host here, greg. productivity averages 2.7%. it's now just one. you have to really boost productivity. the s&p 500 on average grew 16% a year during those boom years. and proving the first law of kudlowian growth, only a modest rise in inflation. trump has the recipe at least half right, unclear if we know he has the other half right. we don't know all the policies. take a look at some of the components of gdp and what happens. the first thing you see, we talk about the consumer goes up. trump is right. you need a boost in business investment to get there. you also get a boost in exports. but here's where it's interesting. you also routinely see a boost in imports when the economy surges. you also see somewhat stronger government spending. unclear if donald trump plans to increase or decrease government spending. cutting off imports account also reduce the ability to get to 3%. here's another nice fact. worth noting the ten-year yield average is nearly 6% during these nine boom years. but over time, as rates have trended down, the ten-year has been progressively lower during the boom years we looked at. that says we can get to these better growth numbers with lower yields, but there's a long way to go. it's hard to do. it is doable, but you have to get the secret sauce just right. i don't -- there's an idea in economics that the trade deficit has nothing to do with growth. you get higher growth and strong trade deficits. greg, if we had that kind of strong growth, right, your imports would go up to meet that demand, right. that would be part of the growth that's out there, if we end up reducing imports what would happen to your growth? >> i think it depends on which business you're looking at. a lot of our businesses aren't tied to that, like sirius xm or charter. but businesses like qvc, that would be an issue. >> i have a viewer that are buys things on qvc. one. >> how about 8 million? >> awesome customer service, greg. >> there you go. >> very defensive about qvc. >> you're attacking him left and right. >> we own 38% of hsn as well. >> doesn't seem fair. almost like you're cornering the market. >> just trying to get by. >> the one thing to be careful about by looking at this, guys, is we don't know what's correlation and what's causation. government spending may go up as a result of the stronger growth, or it could be that it helps cause it. one thing we know for sure is that over this expansion period, government spending has been one of the big laggards of gdp. you can imagine bumping it up bit to get back at least to the averages. one thing for sure, in the nine times i looked up, government spending never goes down during these boom years. >> do you think steve roth and richard lafrack have a big plan to spend on infrastructure that's going to be positive. >> but i can't get my brain around the sum total of it. donald trump has said you can reduce nondiscretionary defense spending by 1% a year. i don't know how that is offset by potential infrastructure and potential increases in defense spending. does it flat line, go up, go down? >> do gryou think the world was too different prior to 1990? >> i feel the economy is so different now in terms of productivity and consumer spending. i can go back and look at what it was like during the reagan years, but i also felt like reagan had this huge advantage of having very, very high marginal rates and being able to cut them. what you're going to get from donald trump if this plan that grover norquist talked about, you're going to get a six percentage decline on the top rate, some adjustments. it's a big number in terms of total dollar value, but the decrease in the marginal rate, plus productivity, technology, manufacturing, services. >> plus no interest rate bump. >> that's a great point, greg. >> we've made some great progress here. so you're admitting the higher the tax rates were, the more you could cut, the better it would have been for growth. >> that would be only a slight exaggeration of what i just said, joe. >> not really. you said very high marginal rates to work with, more room to cut. >> that's right. what i have maintained is that a very, very sharp decrease in tax rates has a big effect. but the flip side is i haven't thought the smaller marginal increase under obama mattered that much. i think, you know -- i don't know. >> what about deregulation, animal spirits? >> this is the thing that economists are thinking about, and they have no ability to plug this into their models, these confidence numbers. there's some people who are very skeptical about it. others say you get the ball rolling. we've had ceos come in here and they're like, we're ready go. the animal spirits on the part of ceos could be very influential. on the other hand, you would not break ground on a plant or a factory or business for which there's no demand. so you've got to see and feel comfortable about the demand out there. >> the science of -- and i use the word loosely in terms of economics -- >> you said it. >> the science of economics, that human factor, the emotion, the animal spirits is probably the biggest unquantifiable you have in market behavior. >> a hundred percent true. that's why so much of economics has started to do what we had. behavior economics, so much of that. >> steve, thank you. >> my pleasure. >> some progress with you, i think. kimberly-clark reporting earnings of $1.45 a share. that was better than the street was expecting. they beat by 3 cents. revenue came in essentially in line with the forecast. joining us now to talk about it is the ceo of kimberly-clark. tom, thanks for being here today. >> good morning, becky. welcome back. >> thank you very much. >> congratulations. i saw the pictures you tweeted last week coming back from davos. she's beautiful. >> she's a big girl. >> i was just wondering, did andrew come up from five rows back and help you change diapers, or did he leave that just to you? >> he came up and visited but did not change diapers. >> i did come up and say hello. >> he was nice, very nice, but i didn't put him to work changing diapers. >> still opportunity to get him trained up. >> we're going to talk more diapers in just a moment, but let's talk from the top line of some of your results. i saw you beat earnings expectations. revenue came in, in line. for the guidance in 2017, it looks like you straddled the position where the street is right now. 620 to 635. it sounds like it's right about in line. you see similar sales next year to this year. sales this year were about 4.5 billion. next year the street was looking for 4.66 billion. does that mean you're going to come in below the street's expectations for sales this year, or is that just roughly in line? what are you talking about? >> i think for the full year, our sales were 18.3 billion. we're looking for a pretty similar level next year. we had a little bit of currency drag coming yet. we're seeing about 2% organic top line. most of that will be volume. we're still seeing good volume growth in lots of places like china, like russia. latin america has been a little soft, markets like brazil and argentina. the markets have gone backwards as the middle class has gotten under pressure with a weaker gdp. >> meaning people have less money to spend on some of the goods they've been able to purchase in recent years. >> even if it's something like going from using five or six diapers a day to using three or four diapers a day, you're still in the category, but you've had to change your consumption habits because you just have to make the money work out to balance the family budget. >> i saw when it comes to some of these areas, baby wipe demand was up but huggies diaper demand was down. >> i would say in argentina in particular, the diaper category volume was negative double digits in the third and fourth quarter. in brazil, the category value was up because there were price increases due to the currency effects, but the category volume was down 3% or 4%. those are two that are probably anomalie anomalies. if you look at a market like russia, which has had similar economic activity, we saw double-digit volume growth and very strong category performance. it is hard to tell what basket of goods a consumer is going to prioritize and where they are in category development. a market like china, we saw strong double-digit volume growth, continued strong negative pricing because it's a competitive market right now. in the fourth quarter, i think we had high single-digit organic growth in china as well. >> this is greg. certainly anecdotally you hear a lot about zika in some caribbean, latin-american, other places like that. has that had any impact? do you foresee it will have an impact on your business? >> not really. i was in brazil late last year. they were worried about a lot of other things more than zika. i think it's probably been popularized in the u.s. press maybe a little more than it has done there. i think pregnant moms everywhere are taking care of themselves and watching out for all kinds of mosquito-bourn illnesses. malaria still present in some places. you're seeing dengue and other things that are even more dangerous than zika that they are trying to protect themselves against. >> hey, tom, in terms of what you're seeing in the united states, how would you gauge the economy right now and demand for your products? >> in our kc professional business, i would say cautiously optimistic, continuing to make progress, not booming. i heard the conversation earlier about animal spirits. i haven't seen animal spirits everywhere that i go yet, but i would say you're seeing signs of optimism. economies run on expectations, as you were all talking earlier. certainly there's a more positive momentum happening in business generally. >> tom, thank you very much for joining us on this earnings day. we hope you'll come visit us when you're in new york next time. >> i will. thanks again. >> great. thank you. when we return, liberty media's greg mathea joined by formula 1. we're going to hear about the company's turnaround plan and changes in store for the league. in the meantime, a quick look at futures. dow looks like it would open up about eight points higher. back in a moment. t e butis d. .. hvesis d. liberty media completing its takeover of the commercial side of formula 1. the equity deals valued at more than $4 billion. for more on the deal, we're joined by the new chairman and ceo of formula 1 and a director at 21st century fox. i'm sure our guest host will have a lot to say about this. it's great to see you. in your resume, did you see this in your future, that you would be ceo of formula 1 some day? i can't imagine. >> no, i guess if i was going to lay odds, it wouldn't have been at the top of the list, even a year ago. when the opportunity arose this summer, it really caught my imagination and excitement. thrilled to have the opportunity to be here now. >> i would like to be the ceo of formula 1. no one asked. just for the parties before the monaco grand -- i don't know. there's just something. there's an allure obviously to the sport in the way that people think about it. is the state of it right now, is it in need of a huge overhaul? there's a feeling that it's not living up to its potential at this point. is that fair to say? >> i think first bernie deserves tremendous credit for this sport that's been built over the past decades. proof of that is in the pudding. it just got sold for $8 billion. i think he should be recognized. we certainly do appreciate what he built here. but that being said, i think when you look at the last four or five years, the sport has really not grown to its potential. we have an opportunity to really grow this sport in a new and exciting way. i think there are two fundamental parts. one, put an organization in place that lets us make these events everything they can be, reaches out across digital media that we're not connecting to today, build a marketing organization that connects to fans, enables fans to connect to the sport. on another level, to really build the spirit of partnership with our teams and promotors, sponsors, broadcasters, that enables us to work together with a common vision. >> i think it's the mustache, chase, that got you the job. you look like one of those old grand prix drivers. does that go into the thinking at all? he's dashing. >> i've always thought he was dashing back to our directv days. there was a great tweet someone had of the formula 1 logo inside of chase's mustache that we had on investor day. it was awesome. chase, let me ask you, when you look at the revenue source -- >> they still won't let me in a car. >> chase, when you look at the three big revenue sources, broadcast, sponsorship, and promotion, how do you see those going forward? where do you see the great opportunity? >> i think probably the more immediate -- probably the one that grows the fastest, you know, is probably sponsorships. realistically today, we have a one-man sponsorship operation. there are many categories we're not even selling into. putting an organization in place that enables us to execute on that probably is the most immediate impact. >> on sponsorship, chase, we have rob manfred, the major league baseball commissioner coming up shortly. i know they have something like 75 people or 80 people in sponsorship. in contrast, you said formula 1 has one. >> we have one. our group is one. in television, there's no question there's a lot of growth there. we just did a deal recently in the uk that increased our annual revenue by, you know, more than two times. we are not yet really even a player in the digital media landscape. so that's an opportunity for us to add the digital dimension to our traditional broadcast media. i think the opportunity on the events side is really probably creating more of making our events bigger, broader, better. i've talked about we have 21 races, having 21 super bowls. realistically, we have run race in every country. we should make these races week-long extravaganzas with entertainment and music and events that capture the whole city, not just events at the track. that's an opportunity for us to really over time continue to grow that dimension of the business. >> i can remember michael schumacher. he was like the highest paid athlete in the world. we knew about him. i don't know anyone anymore. >> lewis hamilton is both pretty well paid and well known outside the united states. chase, it seems like -- sorry, go ahead, chase. >> no, i was just going to say, look, we have great stars. you mentioned lewis hamilton. max versteppen who was an 18-year-old who broke out in a great way this year. we have one person in spons sponsorship, so we have gezero marketing. we have to do a better job of enabling fans to connect to our stars. we have wonderful stars. we have incredible cars. we've got to create the vehicles that are available today to connect, enable fans to connect to them and understand and relate to them. >> i see the las vegas grand prix. >> right down the strip. >> i see a video game coming from it. >> they used to have a video game. i was on the electronic arts board. electronic arts and formula 1 had a video game. >> where is it now? where is it in the united states now? >> austin. >> it's in austin. you can't have two in this country, chase? it might work. think about it. >> no, sure. and we'd like to. the u.s. is clearly a real opportunity, you know, for us. we didn't acquire the business because -- pending on the u.s. success. but there's real upside in the u.s. market. we'd like to add a race in a destination city. new york, l.a., miami, las vegas. a space that really people would come to for a week long event. >> all right. chase -- >> multiple dimensions with the race at the center. >> thank you. and thanks for coming on today. hope to see you again. >> thanks, chase. >> come on back. another big hour of "squawk" ahead. gamco chair and ceo mario gabelli. plus, mlb commissioner rob manfred going to join us. then, congressman sean duffy on trump's first hundred days. all that and more. yilthisct and the wolf huffed like you do sometimes, grandpa? 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 doesn't 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! (child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. a power breakfast in washington. on the menu, jobs and manufacturing in america. ceos of the nation's biggest automakers head to the white house for a meeting with president trump. the trump trade, what the president's policies mean for your portfolio. legendary value investor mario gabelli gives his top stock picks. plus, play ball. the mlb wants to speed up america's favorite past time. we're going to hit the field with commissioner rob manfred as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. for five minutes only, we have a collection of beautiful stuff. it's first come, first serve on this stuff. >> qvc is the best. >> let's get a check on the -- this has been a running commentary. it's a great asset. barry dillard built his empire starts with that. >> anything i can do to help barry. >> exactly. let's get a check on the markets right now. futures are indicated marginally higher on the dow, up about five or so. up six on the nasdaq. currency check because of what's going on with the uk supreme court. they do need to vote, but they don't need to get the okay from us. i think it could be done for march 31st. so not a whole lot of movement based on that development. the ten year back to 243, which has been in a range between 2.3 and 2.6 or 2.7. took another turn on the way to 3%. wrong turn at albuquerque to head back down. we are in the middle of earnings season. we've had five dow components already reporting this morning. let's run you through some of the numbers. dupont's earnings came in at 51 cents a share, 9 cents better than the street was expecting. revenue essentially in line. dupont said it expects its merger with dow chemical to close during the first half of the year. j & j also reporting, the pharmaceutical giant with quarterly profit of $1.58 a share. revenue just below the street's expectations. as you can see, that stock is down by close to $2. a drop of almost 1.7%. a mixed quarter for verizon. earnings of 86 cents a share missing street's estimates by 3 cents, but revenue did top expectations. still, that stock is down by about 2.4% this morning. and travelers earnings, $3.20 a share, well above the street's expectations of $2.73. revenue estimates also came in above the street's expectations for the insurance company. as you can see, that stock is slightly higher. finally, 3m reporting quarterly profit of $1.88 a share. that was one cent better than the street was expecting. revenue in line. the company also affirming its full-year forecast. that stock is up by about 50 cents. a little washington news today. president trump will have breakfast with the chief executives of general motors, ford, and fiat chrysler. the president tweeting earlier this morning he'll be talking to them about jobs in america. quote, i want new plants to be built here for cars sold here. you can imagine what that conversation may go like a little later today. our next guest is a member of president trump's economic advisory council. joining us right now to talk trade and tax reform, the president and ceo of the vector group. howard, thank you very being here today. >> thank you. >> we've will be spent a lot of time this morning trying to talk through taxes. this is probably one of the issues where wall street is really focusing much of its attention, whether to continue to push stocks higher or not. depends on whether or not we can get a tax reform bill through. how quickly do you expect these plans to be pushed? >> look, i think for sure we're going to get a tax reform bill through. the timing is always a little bit iffy. my guess would be within the first six months of this year. >> which is fast. >> pretty quick. >> we haven't seen that reform since 1986. one of the questions we've spent time talking about this morning is that border adjustment tax. it's a new idea. it's a little complicated, even president trump himself has said. and it's something that people like greg, who have operations, retailers who will be hit significantly by, have pushback. where do you come down on this debate? >> it's new. i'm not an expert in it by any stretch of the imagination. you can sit and argue the pluses and minuses. at the end of the day, it's probably going to be good for some and not quite as good for others. that's generally true in tax reform all the time. so i don't know why it's that much different. >> i guess what's different about this is we've never seen it tried. we don't know what some of the unintended consequences might be. it could push the dollar higher, and maybe that would upset the tax against the retailers. >> i think the good news about this administration is they'll move quickly to do what's right. so if they come up with a plan and it's not working the way they want it to work, it's going to be changed. >> do you ultimately think it has to be revenue neutral, which is to say my anxiety on all this is that actually they don't do the border adjustment tax, don't raise funds that way, and say we're dynamically scoring this anyway, we're just going to make our numbers more aggressive than they were before. now we've decided it's revenue neutral, meaning from on high. call me in ten years from now whether you get there. >> revenue neutral is a term like, you know, the financial people use when they talk about risk free or hedged. there is never such a thing as a perfect hedge. there's probably never such a thing as revenue neutral. so i'm not so sure how much that matters. and look, taxes are something you have to look at all the time. as becky said, we haven't really had a major tax reform since 1986. that's a long time, over 30 years. it's time. >> i just don't want you to be so worried. i watched you for the last eight years just day in and day out just going like this about the ten trillion we were adding. i don't want you to go through that again. i don't want you to have to go through that again, being so concerned about the deficit, day in and day out. >> you used wear these pins called rise above. remember that? simpson-bowles was all about the debt and deficit and balancing. >> i wasn't just marketing. i'm a soldier. >> can't we all jeust get along? i have a question. historically, we don't have many major tax reforms. doesn't that suggest if they actually put one in and the consequences are not yet known on some of these issues, fixing it later may not be as simple as you suggest? >> yeah, it's definitely not simple. you try to do the best you can. when you talk about tax reform in general, overall, what we mean is lower taxes. because where we're at with the high taxes, we're still running big deficits. they're not going to ever cure the deficit problem by raising taxes. there's not enough money to do it. what you need to do is lower taxes, promote your business, grow the economy. the only way to get rid of deficits is a growing economy, not a stagnant economy with high taxes. and it seems in the past number of administrations, their idea of cutting the deficit, which nay never accomplish doing anyway, was raise taxes. so we know that doesn't work. and we do know in 1986 when there were tax cuts, the economy grew. so i think history shows it. >> but this isn't actually just cutting taxes. this is cutting taxes for some exporters and dramatically increasing taxes for a whole other series of people who pass it on to the consumer. >> but you're looking at one part of it. >> only a trillion dollars. small part. >> no, it's a big part, but we're going to have tax reform. it's going to be big and wide. there is going to be pieces for everyone. >> we've got grover norquist on board, but we can't get you on board because of qvc. >> he has other retailers too. >> i'm trying to represent american consumers, joe. >> if you want to talk about american consumers, talk about regulations. everyone talks about regulations, how it hurts business. how about how it hurts the consumers. a fiduciary rule proposed by the department of labor, they talk about jobs going to be lost by the financial institutions. how about the tens of millions of americans that are not going to have anybody that want to deal with them and telling them what to do with their ira and retirement accounts because they can't get paid for it. there's more to regulation than just -- it's the jobs, but it's also how it affects the consumers. >> but the fiduciary rule was just one you have to have your client's best interest in mind, right? >> no, i don't think a lot of people think that. i think basically what it does is it makes sure you have to sort of have them in the lowest cost products, the lowest. the lowest cost products is not always the best thing for the client. clients need advisers. they need people to speak to when the market is down 300 and they want to sell. someone has to tell them, you know, this isn't the time to sell. if you don't have any way for those advisers to make any money, they're not doing to do it and therefore tens of millions -- >> it's more complicated than it looks. >> yeah, much more complicated. >> howard, thank you very much. >> my pleasure. thank you for having me. >> a viewer is writing in. i didn't see the trump comments about the pharmaceuticals. earlier we said that he said pharmaceutical companies commit murder. >> that's what meg said. >> that's how we characterize it. do you know what he actually said? pharmaceutical companies, the way they price durings, they're getting away with murder. >> not quite the same. when we return -- i just had to look it up. all these people are saying you just totally -- not me -- but you just totally distorted. that's like fake news. value investor mario gabelli will be here. we're going to talk trump's policies and what it means for the markets. stay tuned. today, i am helping people work better... and also feel better. i am helping hospitals personalize treatments using billions of data points. and working with medtronic to predict the highs and lows of diabetes, hours in advance. and i am working with orreco to use biomarker data to boost the performance of athletes. hello, my name is watson. working together, we can outthink anything. hwe're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. yes, yes. a lot still ahead on "squawk box" this morning. up next, investing in the trump era. stock picks from value investor mario gabelli. later, getting in the game. we'll talk to mlb commissioner rob manfred about the pace of play and that meeting he had with president trump. stick around. "squawk box" will be right back. welcome back to "squawk box." our next guest is one of wall street's first big voices to come out and predict the trump victory as early as last year. joining us is mario gabelli. you like this company, by the way. >> well, you know, i followed malone since the early '70s when all of the cable gurus -- and i was the head of the entertainment committee in new york. i actually went to watch franchises being negotiated. i was on the other end. i was on the committee in the town of eastchester, negotiating with chuck dolan. so i've been there from the bottom up. >> before we get into individual, your favorite media stocks -- >> well, i like the military too, but that's okay. >> under trump, in a trump land, trump world, how have you changed your portfolio over the last couple weeks, months? >> our turnover is about 8% to 10%. when we buy a company that's a cash generator, the major change is inflation, but the real element of the trump victory dealt with the end of creeping socialism and the notion that the american economy, even with all the flaws of capitalism, is the greatest play to keep capital on a global basis. there are flaws. the second part is fiscal stimulation is going to offset any drag for monetary slowdown or reversal. those are the elements. within that inflation is coming back. we like companies with pricing power. pricing power is important. earnings are going to go up sharply over the next 12 months pretax, even with higher costs for labor. so the question is who's got the pricing power. the obvious negative is the multiple on earnings from rising interest rates. that could be offset -- >> so answer your own question. who has the pricing power? >> there's all sorts of companies that basically can take 3% real gdp and hadd 2% or 3%. anything in the consumer products area. you have to go back 30 years ago to figure this out. those will continue. distributors of products. the supermarkets, for example. food and fuel are going to rise. they maintain gross margin. they'll lose and cover the sg&a. >> so mario, you were kind enough to talk about ten odd stocks you liked. two of them were liberties. i'm always happy to hear that. you liked live nation, ticketmaster. another stock you like is viacomm. >> you don't have enough viacomm. this is your grid. it touches about $340 billion of companies, and you're a poor billionaire, such is life. >> don't say that, please. my wife may be listening. >> it is what it is. and the comment is simple. what we like is everything it's doing with live entertainment. you own 35% of live nation. you just did formula 1. chase carey was on. he's a terrific add. then you have content and connectivity. you are somewhat u.s. centric. >> let me ask you about viacomm. cbs deal didn't get done. aren't they enormously vulnerab vulnerable? one big distributor goes, they could drop a quarter. >> absolutely. you've got it down in terms of why the stock is at 38 and not at 65. greg, let's cut a deal. there's 400 million shares, the stock is 16 billion. you have 11 billion of debt. you're paying $27 billion. what do you get, you get paramount that can earn 250 million from their library, and they're losing money. they have got to fix it. >> have they not given away enough market share yet? >> it's terrible. you know that. so the question is you go back into the 1950s. how many movie companies were there and how many are there today? mgm is the only one that's not there that was at that time. >> six, now there's 5 1/2. >> you won't count the ones in bollywood and china. content is important for the connectivity. >> what's the solution there? is it fixing it? >> yeah, it's a fixer upper. greg is right. there are a lot of potholes. infrastructure and military also have to be taken care of. >> a lot of their channels are overpriced. they can't give one distributor a better deal than another, or they all have to come down. they're at real risk that if one distributor says i need a big cut or i'm leaving, he leaves. >> we agree completely. on the other side, let's look where they are globally. 7 billion people, 330 million in the united states. somebody is going to want to have his talent in latin america. >> their channels are relatively behind. >> are we will being to a deal being hashed out? >> you've been a successful money manager. you like that business. but aren't they trailing in their performance in a lot of cases? >> oh, stop. you can give me a hug. i'm an endangered species. etfs. the problem is the investment company institute, we have to change the way taxes are cut. if you have a section 1031, you sell a building, you can defer the tax. we need to do that for common shards. -- shareholders. >> you're suggesting tax efficiency is important. that's one of the elements of etfs. the other one is some inherent cost in terms of that. that's why we started -- look, we're taking an active etf following the media mogul era. this was our first, launching code named love fest. we're going to do one called green giant. we're going to be in this as a business. >> don't push. you're getting nothing. >> what else is new. >> i'll send you some nathan's hot dogs. >> i'll take anything. >> you're only going to get dogs. >> thank you, mario. >> mrs. mathea doesn't know you're a billionaire? >> shhhh. >> that's bad. >> i'm not agreeing with anything you say. >> is it all parked offshore? he does this. >> the group of companies that they have their fingerprints on compounded at 13.5%. >> hold that up so we can get a shot. she was watching earlier. >> come on, i'll send it to anybody that wants it. >> he's everywhere. >> agree. we do this for carl icahn, for a lot of companies everywhere in the world. >> we spoke to greg earlier about the future of net neutrality and its implications on the business. as an investor, how do you see it, and what are you doing about it? >> the fcc issued a 400-page report. a hundred pages were a rebuttal of what's going on. bottom line, net neutrality, i got stuck at the george washington bridge. trucks pay four times what passenger cars. what should netflix allow themselves to hog up the spectrum. right now -- >> they have a good reason to allow it. >> the answer is they have to pay. somebody's paying for this $20 billion bid i can't comment on because i'm in the spectrum auction. sorry about that. but bottom line is that's a big number. somebody's got to pay for that. spectrum on a global basis is a scarce resource. >> but it changes potentially winners and losers. have you changed any of your holdings? >> the free market system has got to change. >> has it change ed your view o netflix? >> i don't own much of it. i kick myself for missing. i hope the new challenges with content can also help. notwithstanding, where do we go. wireless. i own milicom. guess who's going to buy them down the road. >> by the way, this gentleman says 5g. >> but he's right. five years from now, you're going to think about it. >> he thinks that just the physics of it make it very complicated. >> there's never a doubt that technology will improve at an accelerating rate and they'll figure out a way to fill the needs of the consumer where they want at the price they can afford to pay and they'll make a profit if they do it at a low cost. this is standard 101. >> you just talked down the whole wireless game. now he's talking it up. >> no, no, no. broadband is important because the data that's going through those pipes are growing exponentially. >> so you think the pipe guys need to own wireless guys. >> i think they all should make love. the more deals that take place, the better off we are. look, we own some of these guys. what do you think this guy is putting that billion dollars into the united states. he wants to do something with sprint. >> mario gabelli is going to be sticking around, making love here on the "squawk" set. are you going? i think you're leaving us. >> it's up to you guys if you want to get rid of me. i don't care. coming up, rob manfred, the business of baseball. he's the mlb commissioner. he is on deck. and they're absolutely right. they say that it's hot... when really, it's scorching. and while some may say the desert is desolate... we prefer secluded. what is the desert? it's absolutely what you need right now. absolutely scottsdale. good morning. welcome back to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. among the stories front an center at this hour, amazon selling 3.1 million echo speakers in the u.s. during the fourth quarter. can you say alexa? that's according to research firm consumer intelligence research partners. that blings total u.s. sales to 8.2 million since the echo debuted in 2014. i wonder whether they owe us a commission given that we've been talking to alexa on the show a lot lately. >> you set them off. >> all over the country. >> it's a she. not a him. >> set them off. >> we set her off. separately, ford launching a new auto parts brand. it's going to be called omni craft and sell parts to both ford dealers and independent repair shops that fix nonford vehicles. six months after it became a hit, everywhere else in the world pokemon go made its debut in south korea. the delay came about because pokemon go needs the google maps function to work. it was not revealed how that particular issue was resolved. joseph? our next guest has spoken about his desire to have more action in baseball games as a way to retain viewers, especially young ones. but can he do it without messing up the fundamentals of the game? joining us now, rob manfred, commissioner of major league baseball. our guest host, greg mathea, continues with us. mr. commissioner, good to see you. again, how's the game? both of us are struggling still, i guess, right, to break a hundred. >> i'd like to think i do a little better than break a hundred. >> i'm kidding. >> always a challenge. >> depends on the galleries and the cameras. >> that's right. makes it harder. the game is in great shape. a fantastic ending to the season last year. the cubs victory produced a tremendous uptick in our business, great ratings. ratings we haven't seen in decades. we're looking forward to the start of 2017 to see if we can repeat that performance. >> a great year. >> thanks for joining. why has baseball been so much better than -- in holding those ratings than some of the recent things happening in football? >> well, i think that for baseball, the trick in terms of good postseason ratings is having story lines that take the great local audiences that we have all year long and keep them engaged with the postseason. even after their favorite team is out of it. i think both cleveland and chicago last year provided that type of story line and produced the ratings that we saw. >> what more can you do? it's been a long sort of process to try to, i don't know -- you're never going to be football, although football, how many minutes out of the 3 1/2 hours, how many minutes are they actually doing anything? it's like 11 minutes or something. as we saw, rob, with those playoff games, you put two great teams together, doesn't mean you're going to have a good game. that's for sure. you can definitely be competitive, but what more can you do? >> well, look, i think the pace of play, delays in the action is an issue for all sports. i'm sure all the commissioners are thinking about it. we believe we fundamentally have a great product. people love our game. but it's incumbent on us to continue to looblg at those slow spots in the game in an effort to try to move things along, particularly for our broadcast audience. for us, everything is on the table in terms of thinking about it. commercial breaks, you know, number of warmup pitchers for relief pitchers. maybe even small changes in the way the game is played. >> how's labor? how is everything going? anything on the horizon we need to worry about with caps and walkouts? that hurt the sport badly last time that happened. >> well, we made a new labor deal right at the end of 2016, so we're locked up for five more seasons. we were prael pleased about that. we think we made a deal that's good for the clubs, good for the players, and most importantly keep the game on the field for the next five years, which is good for the fans. >> so rob, you've had luck in that small market teams like kansas city have had a lot of success, but a lot of sports were worried about parody. certainly at formula 1, we're worried about making sure rich teams and poor teams can compete. a lot of leagues have done different things. how do you think about that? what is baseball trying to do to ensure competitiveness? >> well, it's the most fundamental issue in any sport, ensuring competitive balance at the end of the day. what you sell is competition. your fans need to believe that every franchise can compete. the new agreement that we just made with the players association continued to focus in baseball on entry level talent to make sure that all of our teams have equal access to talent coming into the game. we believe that's the bedrock of competitive balance. we made some changes in that area five years ago. it produced a series of teams like kvd, like kansas city, that won the world series. we continue to focus on that area in this last agreement. >> so rob, nl and a.l. ever going to have the same dh? i don't know which way to go. for you, i guess we ought to do dh in the nl because you want more action. for me, i like when a manager has to think about what he's going to do based on where the pitcher is coming up. i love watching the strategy of trying to figure out whether to pinch run some guy or all that. will it ever come back together? it seems weird now. the two leagues have different ways of -- the game is different with the dh. >> yeah, there's no question that the game is different. i think it's important to remember that the american league and the national league are really important competitive devices for us. you play up through your leagues to get to the world series. the dh differentiates those leagues. i think it's a good thing. it's a really good thing. whenever someone gets bored in an interview with me, they can ask about the dh. people are always interested in hearing about it. >> i wasn't bored. if i get bored, i'll ask you about juice and steroids or something. that where you want to go? or pete rose. i thought i was nice. or orange baseballs. i thought i was being nice. i really am interested in that. >> rob, the brains of the national league, we're not changing out of our position on the dh. i have a question. how was your effort to revive inner city baseball working? i know it's been a big focus of yours. >> we've spent a tremendous amount of time and the clubs have allowed us to invest in the inner cities. we have five urban youth academies, we call them, up and running. we have three more on the draws board that will be up and running this year. kansas city and texas, dallas are both doing fantastic facilities. we have a grassroots program known as reviving baseball in the inner cities, designed to get kids playing the game. all these efforts are starting to bear fruit. we have about 8% of our current player complement is african-american. the first round the last three years has run about 20%. almost every one of those african-american kids that are drafted has some connection to one of our inner city programs. >> i swear i wasn't pointing that out. that is the one thing i need that i think about when i think about baseball. it's been like 30 years. >> making stuff up, rob. >> no, dh. i got to probably tell you what dh is. anyway, rob, thank you. we appreciate it. am i going to see you this year? >> i don't know if you're going to -- i don't think you're going to see me this year playing. it's that day job thing, joe. i'm going to be working that week. >> trying to figure out what to do with the dh. i understand it. >> that's right. >> thanks, rob. see you later. >> stands for designated heavy. >> right. taxes and trade under trump. congressman sean duff ify will n us to talk tax reform. an take a universe of data - in your case literally - and turn it into medical discoveries, diagnostic breakthroughs... ...proof that black holes collapse into one singularity. i don't know what that is. but yes. innovation runs on supercomputers... ...and supercomputers run on intel. you are super smart. and super busy. ♪ ooh! ufo! false alarm, eyelash! safety doesn't come in a box. it's not a banner that goes on a wall. it's not something you do now and then. or when it's convenient. it's using state-of-the-art simulators to better prepare for any situation. it's giving offshore teams onshore support. and it's empowering anyone to stop a job if something doesn't seem right. at bp, safety is never being satisfied. and always working to be better. welcome back to "squawk box." let's check out the futures right now, which have been quiet for most of the session. still all green. president trump wasting no time making changes in his final day -- his first days in the oval office. sticking to his promise of changing how the united states handles trade, the president signed an order withdrawing from the transpacific partnership. joining us right now is congressman sean duffy. he's part of president trump's transition team. congressman, again, wasting no time with this, saying right away something he had talked about all the time on the campaign trail, but that we will not be part of the transpacific partnership. >> that's right. he kept his campaign promise yesterday and withdrew us from tpp. i think it's important to note, and i would imagine most of your viewers agreed, that trade is really important for the american economy. mr. trump said, you know, listen, i think tpp was a bad deal for the american worker and the american economy. my hope is he now gets quickly to the business of negotiating individual deals, at least with our asian trade partners that were going to be a part of tpp. trade is important to growth and jobs. >> yeah, i think that's one of the questions that's risen up. if we're not there, if we're not partnering with asian nations, that china is going to step into that void and already is trying to do that. how quickly can we expect individual trade deals with some of these nations? >> obviously a trade deal will take some time, but you see mr. trump moves at lightning speed. i think what's important after yesterday is that he very quickly started to signal to these asian countries, japan specifically, that we want to sit down and quickly come up with deals that work for both of our countries. i think the signaling is incredibly important here. >> it makes sense from our perspective to want to restructure some of these deals. i guess i wonder how quickly some of the partners on the other side might be to agree to some of those issues. are we just looking at some pretty tough talk out of the beginning as a negotiating point to start from? >> well, i think tough talk is important from a negotiating stand point, but we're the biggest market in the world. all these countries want access to the american marketplace. >> by dollars, but not by people. >> it'll behoove them to sit down and negotiate with us and frankly i think that leads us to a position of strength in these negotiations. i think that's what mr. trump sees here. again, when you have all these countries and different issues at play, it's really tough to get a good deal for the whole economy. you have some winners in these trade deals and some losers in these trade deals because they're so complex. you can really hone the issues down when you go one on one. >> seeing some language around the nafta agreement, too, where he was talking about canada as being a very special partner and one that we may very well have a strong deal with. does that signal that mexico is going to be in for some more troubling negotiations? >> well, i think there's been a lot of signaling towards mexico. i think mr. trump has been very clear he thinks that mexico has stolen a lot of american manufacturing, which means a lot of american jobs. he wants to re-evaluate how our trade partnership with mexico works. i think we also have to look at what does north america look like as a production and trade unit. canada, u.s., and mexico as we compete against other regions of the world. and if you look at us as north america, we're incredibly powerful. so again, i want to make sure we don't go too far with mexico because they are an important ally in trade with us, but again we want to make sure we have a structure that still supports american jobs and doesn't incentivize businesses. >> congressman, today the president is expected to sit down with the heads of the three major u.s. auto companies, gm, ford, and fiat chrysler. we have seen a lot of his language already. he's tweeted pretty actively about what he expects from these companies. what do you expect to have come out of this today? >> listen, i think the president needs to continue to signal that he's going to be a better president in regard to rules and regulations. i mean, if you look at the last month of obama's presidency, there was 99 rules that have come out costing the economy i think the total was $150 billion. incredibly painful regulations on economic growth and on our businesses. again, we want to make sure we have sound rules and regulations, but if we can reduce the burden, make it more competitive here in america, this will insent these car manufacturers to stay with more of their production in america. then you couple that with tax reform. i think this could be some very powerful signaling to american manufacturers that they should stick around, they should stop any plans to go overseas and give the president some time to restructure how america works to make it a better home for manufacturing. >> yeah, he's made that message fairly clear. i'm guessing a lot of these ceos are already shaking in their boots a bit. congressman, thank you for joining us today. >> thank you. coming up next, jim cramer live from the new york stock exchange. we're going to get his take on today's top stories. i want to talk about banks. here are the futures right now. take a quick look. down looks like it would open about seven points higher. s&p 500 about two points higher. back in a moment. y gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. it's your tv, take it with you. with directv and at&t, stream live tv anywhere data-free. join directv today starting at $35 a month. no extra monthly fees. time now for your stat of the day. a week after a presidential inauguration, the utilities and energy sectors outperform, up an average of 2%. let's get down to the new york stock exchange. cramer joi. out of the dow components we've seen, jim, any surprise you or delight you or disappoint you? >> no. look, maybe travelers, which last quarter was just okay. i didn't see anything that jumped out at me like i did procter & gamble last week, which was very good. some of these, obviously, are dependent on conference calls. the idea that some of them are just so bad on the face of it is very difficult. i didn't like verizon. they spend a lot of money to get customers. j&j is getting hurt for being conservative. nothing jumped out other than -- >> i like your -- >> just that there is -- >> i saw your tweet. >> i'm sorry? >> you're like potus. your tweets resonate when i see them. i saw one that said, 43% of the cars we buy here are imported. that's all you need to know to know why this is happening. 43% are imported, made somewhere else? >> i got that phil lebeau. when i saw that, i said, really? is it that many? honestly, i thought it was closer to 70%. when you see a number like that, you say, okay, bring the guys in. what are you doing? i really wish they'd bring in guys from mercedes and toyoda a -- toyota and say, guys, do owe need all the plants down there? it is more important because they're the guys building new plants. i think that needs to be examined. i also think the nafta currency advantage is insane. that number jumped out at me. >> it's greg. i have a question about the market. seems the market is giving a lot of credit to tax reform, you know, infrastructure investment and a whole bunch of things i think the trump administration is going to attempt to do and is likely to succeed on. but haven't they already discounted, and the potential that this takes a little longer to get done, and that there are hiccups along the way, couldn't we have market destruction before all that happens? i think we're pretty excited. >> it is a great question, greg. i'll tell you when i see what numbers are being raised, they tend to be for 2018, not 2017. we have historically not, greg, been able to look through a valley like that without serious selling. at the same time, if we do get better animal spirit growth, which people were talking about this morning, i think we'll be afraid to sell, afraid to let go of bank stocks and international companies that could benefit. there is like -- i think we can get it. i think we can get there kind of attitude. yes, the 100 days has to be more than just rhetoric. it has to be one of these, besides deregulation. you need something about repatriation and corporate taxes in the next 100 days or you'll go in the valley. it'll be unsustainable. >> you like the banks. dick beauvais was not happy about the banks and suggested higher interest rates and -- that higher interest rates won't help as much as we think and he is not so sure about how much of dodd tr/frank will be repealed what it means to the banks. >> one more at anything president trump has done in the last 36 hours means he is meaningful about deregulation. it'll help the guys. higher rates helps the guys. jamie diamond, matt kan are smo dope, other than that, i don't know where dick gets it. mike, who has been negative for a generation is positive. >> we have to go. designator hitter, yes or no. >> i didn't think -- i've always felt it should be uniform. i don't think it is a competitive advantage like the gentleman said, no. >> thank you, jim. need to get that in. "squawk box" will be right back. mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle. and it keeps my investments fully mobile... even when i'm on the move. sign up at etrade.com and get up to six hundred dollars. (bell chimes) ♪ nice work brother dominic. now we just need 500 more... translated into 35 languages, personalized oh and shared across the 7 continents. (other languages spoken) look abbot, i got it. it's a miracle. ♪ welcome back. our guest host has thought on the changing media landscape, particularly as it relates to over the top content and music streaming. we've been talking about this throughout the morning. what do the you think? >> the music space continues to see great demand. as far as being a service that you can make money on, i think the streaming services will see continued price declines, lots of pressure from things like amazon, the echo, alexa, we talked about earlier, and i think the opportunity to make money in the space is very hard. on the other side, there are no regulatory restrictions on what the three major record labels can charge you. they're squeezed on declining revenue and increasing costs. >> one-third of a business was sold to sprint. >> it is a tough deal. can sprint get enough -- title has challenges like all the other streaming services -- but can they get promotion to help their mobile business? that's open. the idea of spending a value at $600 million doesn't make sense but the promotion might. >> your point is it is going to get tougher and tougher. businesses won't need to make the same profit that are in this. >> between google, amazon, apple, spotify, i think it is a very tough space. >> wow. greg, just looking out at other things you're focused on right now, we are dealing with a big transition. new administration in town. what kind of things are you doing? how has your thinking changed? >> some of the things we talked about today on net neutrality, the opportunity to open up some of the items around pricing on usage base pricing. today, there are restrictions on what you can charge for usage. joe rightly says -- or somebody said earlier, we charge different prices. if you bring a different one through today, you can only charge for speed, not usage. i think that'll change. interconnection fees can change. on the other side, we talked about the border adjustment tax. i think there's a lot to be figured out there. it is a disruptive issue among american consumers. >> you'd never design net neutrality the way it is now, if you start from scratch. people would say it is impossible. >> comey is being capped by donald trump as his role. >> great america. >> it is going to dominate the headlines. we've been talking about things the last few hours but this is going to be the story of the day. >> integrity. >> the cia is all democrats and the fbi is all republicans, some people think. who knows. >> greg, want to thank you very much for joining us today. it is always a pleasure seeing you. come back sooner than you did the last time around. >> not if joe tortures me again. >> what was it about, just qvc. that's all. >> the b word. >> billionaire. >> he started it. >> he is a brilliant man. >> b as in brilliant. >> yes. >> brilliant billionaire. >> dh is designated heavy, which i'll play right now because we have to go. join us tomorrow. "squawk on the street" begins right now. sticking with the push for more manufacturing jobs in the u.s., president trump meets with ceos for a second straight day. this time, it is ford, chrysler and gm. good tuesday morning. welcome to "squawk on the street." carl with jim at the new york stock exchange. you have j&j, verizon, 3 m. action in the pound as the supreme court rules on

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