Ultimately either be eliminated as they were in canada, and when they were eliminated in canada, everybody said, oh, my god, its the end of the housing market, and it was hardly a blip. Or it will be cut to deductions on the first 100,000 or something, so youre effectively protecting the middle class. Thank you for this. Yeah, sam, it has been a pleasure having you here today. My pleasure. We really appreciate hearing from you. Sam zell has been our guest host for the last two hours. Youre putting your money where your mouth is. Its all about rental properties. Thats right. Sam. Thank you, appreciate it. That does it for us today. Make sure you join us tomorrow. Right now its time for squawk on the street. Good wednesday morning. Welcome to squawk on the street. Im melissa lee, along with Carl Quintanilla and david faber. Jim cramer is off this week. Today weve got treasury secretary nominee jack lew heading to capitol hill. Lets check on where we stand in terms of u. S. Futures. It looks like well be building off of multiyear highs here in the u. S. The picture in europe, again, the sort of antirace to the base movement going on. The euro is moving higher this morning. We see green arrows across the board. Overnight in asia, japans nikkei down by about a percent here. On heavy volume. The yen gaining there. Our road map starts in washington, d. C. The president unveiling an ambitious agenda. He also called for billions to rebuild the nations infrastructure. The dow is back above 14,000. Only 1 away from an alltime interday high. The s p also near its highest levels since november of 2007. What could help markets today . Better than expected earnings from deere and gains by General Electric and comcast. Those big gains because of a big deal. Comcast agreeing to buy General Electrics stakes. In the mean time, lets send it down to carl in d. C. A big night here last night. The president addressing the nation in the first state of the union during the second term. Front and center, the economy and bringing jobs back to america. After shedding jobs for more than ten years, our manufacturers have added about 500,000 jobs over the past three. Caterpillar is bringing jobs back from japan. Ford is bringing jobs back from mexico. And this year, apple will start making macs in america again. Tim cook there in the first ladys box. Fox played a major role in the address and official republican response. Our economy is stronger. When we harness the talents and ingenuity of striving hopeful immigran immigrants. If we have a Legal Immigration system to attract the best and brightest. We need a permanent solution to those here legally. We must follow through on the broken promises of the past to secure our borders. Steve case is the cofounder of aol, chairman and ceo of Holding Company revolution, chairman of the Case Foundation and a member of president obamas jobs and competitiveness council. Steve, good morning. Good morning. A lot of Inflection Points in those speeches last night. But the notion of h 1 b, immigration, got a huge ovation. I wonder if you think this is real this time, and if so, what has changed . What makes this possible now . I think it is a moment theres now bipartisan support for a comprehensive Immigration Reform approach. I think people in talking about this for more than a decade, in the technology and Entrepreneurial Community have been talking about stapling green cards to diplomas. Now it feels like republicans and democrats are coming together. So hopefully in the next few months we can build this coalition and pass Immigration Reform with a strong robust highskilled immigration component. Youre going to testify today before the Senate Judiciary committee on this topic. What is the net effect going to be on the effectiveness of startups in this country, on the labor market . Because some are still making the market its actually harmful to americans here, who are living na tifl, who are longterm unemployed. Do you agree with that . No, i dont. The data shows that the immigrant entrepreneurs are typically job makers, create companies that make jobs, not job takers. Thats what the evidence has been. The foundation that tracks this said the economy is driven by young high growth startups. 40 of the fortune 500 companies were started by first or secondgeneration immigrants. Now half of the Technology Companies are started by immigrants. Its driving our economy, and driving job creation. So the place to focus on is entrepreneurship. We need to double down on entrepreneurship and winning the battle for talent, which is what highskilled immigration is all about, so we can make it essential we remain the most forward going company. Prerecession levels, as someone who makes it his business to make it easier to create a business in this country, where are we in that narrative . Is it getting easier and are we at a point where a lot more people who are thinking about it are going to make that plunge . I think im optimistic. Last year there was bipartisan support for jumpstarting our businesses. It got broad support on the house side and passed overwhelming, about 80 . That made it easier for entrepreneurs to get access to capital, like funding and onramp for ideas. Now we need to start on the startup act introduced today by four senators, which deals with immigration, but also deals with regulation, commercialization of research, buy and hold strategy so we can invest in the industries of the future. So i think were making progress. Theres still work to be done. Startup act will be very important. But most important is winning this battle for talent, which is im glad the president talked about it last night. Senator rubio talked about it as well. I think it got the biggest ovation of the night from republicans and democrats. We need to come together and pass Immigration Reform. We heard from some Small Business people last night via twit tore a large degree, who said the immigration part is great, not so much on the minimum wage part. I wonder how much of an offset that might be to a Small Business person . A lot of things were talked about. It was an hour speech. There was a lot of components to it. I was encouraged when the president talked about they were building the economy. And solving the immigration issue. Particularly from president obama and senator rubio, on the highskilled Immigration Reform. I view it as a good night. And a hearing in the senate around Immigration Reformt. And this afternoon well hear more from the senators introducing that. Were making good progress. Theres a lot of work to be done. Immigration has always been a difficult, sensitive issue. It will require broad bipartisan support and include the business and Tech Community to step forward and have their voices heard. The best path to get that passed is to support a broader solution. Highskilled, a lot of people argue is the sweet spot in that. It is the sweet spot. It is the most important in my view. The best path to get it done is to support this broader reform. Look forward to your testimony today, steve. Thanks for getting up a little earlier for us. Thank you. Steve case on the hill. You see merck, well watch that in premarket trade here. It says it will post a 5 cents a share loss because of the venezuelan currency adjustment here. This is something weve heard from other multinational companies. We heard from clorox they will take a onetime aftertax loss as well. That currency will be a major theme Going Forward. Merck shares there, lower by. 6 of a percent. Bulls are looking to go after the dow and s p, finishing yesterday at fiveyear highs. The dow is 1 away from closing at a record high. Ross, great to see you. Good morning. First, lets talk about the state of the Union Address. Im curious if theres anything out of that address that makes you rethink your market thesis at all . I dont think so. I mean, i think generally, we had a little bit of a preview, the themes well see in the inauguration. Generally, you know, the issue from the investors standpoint is washington is still very divided. Youve got a different vision for the country from the president as Congressional Republicans are thinking. The economy is healing. Were seeing improvement in housing and manufacturing and the stock market. For the time being, thats trumping any issues unresolved in washington. Even trumping a potential sequester . At what point do you say that theyre trumping it and at what point do you say, you know what, whats coming out of d. C. Could put this rally in jeopardy or at least stall it for now . I think there is some potential to stall it as we get into february, march. Its not just the sequesters, but also the continuing resolutions that has to be extended by the end of march. Our expectations it will get extended, but i think what youre likely to see is Something Like the new years eve budget deal. Theres half a loaf, this is not a good thing. In a slow growing economy, it would be better if we could minimize the fiscal drag. But i think whatever marginal fiscal drag youre likely to get from the sequester is not a game changer. It adds a little to the speed bump were likely to see during the first half of the year. I think by the back half of the year well see some improvement. Russ, can i just kick the tires on that optimism there. Last night, Mitch Mcconnell, the Senate Minority leader, said it was pretty clear this sequester is going to kick in, 85 billion from the beginning of march. Lets not forget the cbo said it could shave growth and cost 750,000 jobs. That was testimony that came through yesterday. I know we are traditionally complacent on these deadlines set by capitol hill. But in this case, its awfully close, isnt it . It is awfully close, but i would push back a little bit on the nature of the sequester. In some ways the sequester is a very different animal than, lets say, the tax hikes were going to hit. The tax hikes, again, we did get some of them. Were going to hit on january 1st. The sequester is about spending. Its not as if the world changes on march 1st. Some of this may hit for a temporary period, but to the extent that you can mitigate the effect after the fact, two, three, four weeks later, the full brunt that the cbo is talking about, that can be effective. So even though we dont get a full deal by march 1st, you could retroactively fix some of this by march. Thanks for joining us this morning, russ. Thank you. Comcast said gem electrics stake is being sold. The comcast gets full control of nbcu earlier than anticipated. Brian roberts on squawk box this morning. We didnt have to do this now. And we chose to do it. If actions speak louder than words, the action is we know the businesses were buying. Three years since we signed a deal, two years since we closed it. Weve seen some early signs of turnaround and payoff for some of the investments were making, whether its in theme parks, or in the cable networks, or in the broadcast business or in the film business. Certainly comcast was in a position to do that. It had been harboring cash to a certain extent, 11. 4 billion in cash from the companys Balance Sheet will be used to help purchase that stake, in addition to a note taken back by ge. Its also a story of cheap money. Youve got cash on the Balance Sheet. Borrowing from the markets at extraordinarily low rates. We were still somewhat surprised, i have to say, because there was an expectation it would still perhaps kick in next year. They had seven years in which to actually do this. Theres also a somewhat complicated part of the transaction that was from when it was closed a couple of years ago when comcast equity ecreted over time. Perhaps that was used in leverage in the negotiation for the price. Gives them a lot more money to return to shareholders should they choose to do so. Its rare you see a deal happen in both stocks move sharply higher. This is really a story, its transformation al for General Electric. Right now it is more beneficial for the company to trade purely as an industrial financial. Those are the sweet spots in the market during this rally. For comcast, theyre using, as david mentioned, money that was sitting on the Balance Sheet, not earning much, and locking in a price at todays value. This is a vote of confidence in Nbc Universal. And the notion theyre getting a better deal today than years down the line. Thats something Brian Roberts said. I think maybe with you on fast money last night. And repeated it again this morning with the squawk team. In likelihood we would have had to pay more down the road. 39 billion overall enterprise value is what nbcu is valued at as a result of this deal and last deal. Well see how it goes. As for comcast earnings, we should point out as well, they did increase the dividend 20 , committed to a 2 billion repurchase this year. That was lower than last year. It is all being viewed rather positively by investors, by the analysts who follow the company. There was an uptick in Capital Expenditures that might be somewhat unexpected, about 1 billion more. The call has been going on. Im sure theyre going to get some questions trying to figure out where that various money is going to. They certainly made a big commitment to the future of content. We knew it was coming. It was just a matter of when it was going to happen. Exactly. For now the stock is set to open at a fresh high. Jeff will be in a Conference Call 9 30 eastern time and well have full coverage of that as well. The president s choice for treasury secretary will come fully into the spotlight. Jack lew is heading to the capitol hill hot seat for his confirmation hearing. A lot of discussion about bonuses at citigroup. Well keep you up to date on what is happening there. One of wall streets top banking analysts, does he think jack lew is the right man for the treasury. Lets look at the futures as we look at a higher open here this monday morning on cnbc. But we can still help you see your big picture. 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If you take care of your car your car will take care of you. Jack lew heads to the hill for a confirmation hearing before the Senate Finance committee. Morning, eamon . We have a little bit of information about what jack lew will say in the confirmation hearing. Look at this statement from his prepared testimony. Hes going to say hes a bipartisan character. Its not an abstract idea for me, the fundamental thread that spans my professional life. Hell also talk a little bit of time at citi. Thats been controversial, as you guys have pointed out. The question to a lot of lawmakers is, what exactly did jack lew while he worked at citi for the money he collected. Hell describe himself as a changed agent inside citi. He doesnt mention at all in the prepared remarks anything about this fund that he invested in, that was based in the Cayman Islands. Thats likely to be controversial. Were likely to hear several questions about that one. David, the prepared testimony is one thing, but when then get to the q a, theyll bear down on what jack lew has to say. Carl. Eamon, theres some discussion how his grilling might be a little bit light, only because republicans havent really coalesced around a whole lot of opposition. Yeah, i think the consensus is, they might bang him up a little bit in the hearing. But the expectation is hell get through and the president will get his man. Jack lew has been scrutinized in the past for a variety of jobs. Hes a wellknown figure here in washington. A lot of republicans dont like his negotiating style because they dont like where the president is coming from ultimately. But we expect jack lew will get through here. The questions and answers should be interesting in the meantime. Later on this morning, well talk to mike mayo on the impact on banks, if in fact lew is confirmed. Aym eamon, thanks a lot. The president has spoken. Now its art cashins turn. Find out what hes expecting from todays trading as we count down to the opening bell. Republican congresswoman Marsha Blackburn of tennessee gives her take on the state of the Union Address. Take a look at the futures, get a sense of where we are this morning. Were not looking too bad. More squawk on the street from the nyse straight ahead. I know what youre thinking. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to y