this morning. the dow logging another record high as it marches toward 20k. day one of that fed meetinging. >> president-elect trump announcing exxon mobil chairman and ceo rex tillerson as his pick for secretary of state. >> plus, microsoft co-founder bill gates speaks out. trump's policies on trade, relations with china, interest rates, and a lot more. but first up, the march towards 20,000 continues. the dow is on track to open trading at an all-time high one day after posting its 15th record closing high since the election. we also have the fed kicking off the two-day meeting, many expecting it to result in a rate hike tomorrow. jim, i assume there's no doubt in your mind about that. >> no. and i think that the banks have to have it. we saw the banks waivever. this is not an all trump stock day. we got china, good numbers. italy, major recapitalization. i think there was another time this market would be up huge just recognizing these italian banks are getting their act together. i'm worried about the next one in line, $48 billion in debt. there were euro bad loans and they raised a lot the of capital. this is the last template to get rid of the bad banks in europe, a major positive, something taken off the table with deutsche bank all the way up. we start looking at european banks as opportunities not dangerous. and the next thing you know we have a better position around the world than we had. and trump can add to the flame today if he tweets that he likes something. >> the new prime minister in italy gets a confidence vote today and tomorrow. echoing the things you're saying which is the analysts are behind, they're going to catch up. >> we did a piece, thank you for mentioning, about the key regional banks that are way behind and every one of the major regional banks have been downgraded. they were before the election, downgraded after, and they just keep climbing. the analysts are done kicking and screaming. emerson an upgrade. they went from a sell to a hold. the analysts just don't believe -- there's a note today by citi. this was a shocking one. reasons to buy apple. it was like, are you kidding? it's like a white swan. i don't know what color it is. >> rose gold. >> an orange swan? >> i think that stood out to me as a positive note in a sea of down grades because people just think the markets extend. the markets extend if you think inflation is coming back, the ten-year goes to three. it's not if we get the deregulation. >> a lot of discussion about corporate tax. brady looking at revenue neutral which we have ses inspected. 15 to 20 is their number. on the hill whether or not they co-mingle corporate and income and it would be a very ambitious piece of legislation. others say that's too complicated. >> david understand profits and the stock market and commodity prices. very sophisticated man. >> and he will have a very important voice, no doubt about it. that was an interesting appointment by the president-elect of mr. cone. he has a lot of capital market experience, right? now reuben did make the move to the secretary job in the clinton administration. >> he was ceo. rubin, tremendous experience, worked under bob rubin, solid. mnuchin, his father, he was arbitrage but gary cohn is initially a trader. moved out to be much more of a manager, a statesman than the gary cohn of old. >> it happens as you get older. >> it was always done with a kid glove approach like lebron. jim brown. anyway, gary is a guy that people recognize and understands the interplay between technology and job loss which is something we talk about a lot. a bloomberg seminar when he was in davos where he said, listen, it's not all that we can't create jobs, it's the job destruction, so to speak from progress. >> on tax reform, guys, it is important to note that majority leader mcconnell in contrast to what you indicated, jim, has said that he wants corporate and individual in one bill. >> i know, that will be hard. >> they can get this through reconciliation. 51 votes. i think he wants two budget resolutions. first obamacare repeal res lougs and then one later in the spring largely dedicated to tax reform is what mcconnell is quoted as saying. also raising concerns about dangerous u.s. debt levels. as we've said tax reform will be vitally important. it is the focus of the incoming administration but it will include not just mr. ryan but mr. mcconnell in what happens. >> this rally depends on trump rolling those guys. >> trump rolling mcconnell? >> rubio this michael jordan on tillerson and his concerns about rex tillerson, to serve as secretary of state and geo po politics make him the right choice for the job. this comes as some lawmakers on both sides have expressed concerns about the business connections there, the relationship to putin. exxon had a statement out congratulating tillerson saying the board will be meeting regarding transition but some discussion about not just potential clashes but clashes with your own party this early, jim. the trump rally depends on going very rapidly on deregulation, very rapidly on repatriation and if you start mingling -- co-mingling the individual that's going to cause a lot of problems. it's difficult to figure out -- that's a delaying tactic. rex tillerson became sceo in 206 at $58.47. this stock is up about 50%. s&p up about 78%. >> they've had to borrow to pay their dividend with falling oil prices being a key there. >> do you think into comes up, david? >> no, i don't. >> just kidding. >> it's not going to come up. a tillerson is a politic choice, clearly the -- merkel said nothing. when you were at sochi, that was the peak economic activity right before the sanctions. i think this is the beginning of the repeal of the sanctions because tiller son is not in favor of the sanctions and this is against merkel. >> it is. it also gives a business perspective to the chief diplomat of the united states which we haven't had and i know people in the business community will embrace it across the board as carl said. others may question particularly the ties to russia or the relationship. a statement supporting it. >> how about gates and rice? >> not bill gates -- >> no. >> robert gates. >> although exxon is a client of the gates rice firm. on jeff immelt's statement a ground level view of our most important relationships. he's highly respected, well traveled, a great negotiator and smart. by the way, a cabinet appointee has not been rejected since '89. >> it would be amazing. tillerson, i have to admit, exxon is an international company based here that has made more treaties and has done more boots on the groundwork. immelt is correct in the description of this man. >> and another ceo. >> cohn is a coo. >> right. it is interesting. obviously we know this but business is going to have such an important voice in this cabinet. >> i just wait when we interview gary cohn on the monthly employment numbers. what do you think? not that bad on the white color. >> who will come out, labor. >> it could be either one. >> a lot of machines came out. >> we can ask him about other capital market stuff. >> what do you think about the dollar? >> the dollar is a little too strong. >> the speeches may not compare to the way it is now. >> do you think gary is not going to speak his mind? >> we should point out this is an element of this beneficial part about joining government where you do get to sell your stock and your employer will accelerate vesting because you're going into public service so there's a question with tillerson whether the board will waive the ten-year vesting. they have an interesting program at exxon mobil under which close to two-thirds of his compensation was in the form of long-term equity and so it has to invest over ten years after retirement. tillerson is stepping down i think at 65 -- expected to step down, let's call it next spring of '17 so he was almost done anyway but they may accelerate his vest iing, gets it all at oe instead of ten years, and then you get to sell tax free and put it in bonds. treasury bonds. it's not a bad deal sometimes to join government if you're ready to cash out. >> ready to go. >> you know, i'm getting older. >> what have you got? do you have a vesting schedule we can waive for you. >> yes. i'm not going anywhere. i have a lot of vesting going on. i might as well be wearing a vest. i will come to work in a vest. maybe that will be the signal. >> he's still pushing for the s.e.c. job. >> i'm not pushing. i'm pushing to sit here and pushing for "mad money." >> it hasn't been filled yet. head of the securities and exchange commission, jim cramer. >> we're watching for news of perry to energy. you talk about a pro business energy slate, amazing. >> manufacturing cabinet. pretty amazing, don't you think? >> when we come back, bill gates and his take on a trump presidency. you'll hear what he said exclusively to our becky quick on "squawk" this morning. jean-claude trichet on draghi and trump. the dow is going for seven up days which would be the second such streak this month. or in a month. before we go, do you want to see this, kanye west -- >> i was with him last night. >> are you kidding me? >> we were told to keep our eyes open on the lobby of trump tower. >> what is kanye west doing in the building? >> he was supportive. >> really? >> all those people -- >> maybe interior. we'll talk about that after a break. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. ♪ yet a lot of people still build portfolios with strategies that just track the benchmarks. ♪ but investing isn't about achieving average. it's about achieving goals. ♪ and invesco believes doing that today requires the art and expertise of high-conviction investing. ♪ translation? why invest in average? and her new mobile wedding business.tte at first, getting paid was tough... until she got quickbooks. now she sends invoices, sees when they've been viewed and ta-da, paid twice as fast! see how at quickbooks-dot-com. bill gates is speaking out on energy. this is what he told becky quick in an exclusive earlier this morning on "squawk box." >> i think that whether it's education or stopping epidemics, other health breakthroughs, finishing polio and in this energy space there can be a very upbeat message that his administration is going to organize things, get rid of barriers and have american leadership through innovation be one of the things that he gets behind. >> he talked about how he can't even keep up with trump on twitter and he's in technology. trump will have to pivot to what america can do and do well. >> one of the top tech ceos comes in tomorrow and if you have a statement i've met with the best and brightest and they know what they're doing, that would be the logical extension of corporate like. the corporations that have been representing classic industries, you're not seeing a lot of the tech industries. they did not vote -- >> they did not support trump. >> so what do you think happens when they get together? i would suspect it would be respectful. >> you never know what they're going to do. >> i was on "the apprentice" as a judge. >> some are watching implied volatility against the yuan. that is also unpredictability. >> closer ties with china. >> every day we have to get used to the eidea there will be something that feeds the beast that's positive and then shocks you. i'm trying to figure out whether we are at a moment -- look, i have twitter on now. i typically have things i'm watching but i wait for the tweet. adam schefter is doing good stuff about the browns. he's on espn. i follow him. i don't want to miss a tweet because i will pivot, you will pivot if you get a tweet. >> news from apple just now that air pods, of course, the new replacements for your head phone, are here, going to start delivering to customers in stores next week, available online now. their release is officially out. this is evidence of apple thinking way down the road. >> do not underestimate this. a bunch of apple stores keep asking, this is the thing most asked for and they've been d disappointing people. it does matter. citi says five reasons to own an apple including an iphone 8 super cycle. not just a cycle. super cycle. >> wow. >> a big one. >> that's a big one? >> is the timing weird like ten days before christmas? >> it must have been a technology issue, almost the night before christmas, all through the house. the buds were sleeping. >> i can never tire of hearing that. will you come over and read that one to me before bedtime? >> it does work. "christmas carol" holds up, too. checked that out late ly? >> actually i have. >> scrooge mcduck is what you're probably more familiar with. >> i've gone both. we've gone more classics now. >> it does bring to mind the meeting tomorrow -- >> so huge. >> a widely read piece out last night saying shame on silicon valley for vowing before this trump altar -- basically what she argues after resisting him so much during the campaign. >> mark beniof has said we have to go in with open hearts. i thought that was important because it shows you even the people, an open heart philosophy. >> we'll count down to the opening bell, the premarket on this tuesday. 19, 824 is the new number for a dow record. ya sleepin'? come on!e up!!! coy what time is it? it's go time. come on. let's go, let's go, let's go. woooo hoooo!! yeah!! i feel like i went to bed an hour ago. i'll make the cocoa. get a great offer on the car of your grown-up dreams at the mercedes-benz winter event. it's the look on their faces that make it all worthwhile. thank you santa!!! now lease the 2017 c300 for $389 a month at your local mercedes-benz dealer. ♪ guyhey nicole, happening here? 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i think it's a great company. coca-cola, i like what's going on. i'm saying people have to understand that these are the ones not the facebooks. >> we've seen it in the market the last four weeks but it has not been the one you're describing. >> yesterday j&j going up would be a misdirection trade. it should be going down. i like j&j. this is what the classic money managers do. they sell these not the high growth stocks and yet we keep hearing high growth being sold. it doesn't have the big earnings surprise next year. between here and year end i don't ex inspect to see a wholesale sell in tech. i do expect the stocks will be sources of funds no matter how good you think the companies are. >> speaking of that rotation an eye on the financials with that fed meeting coming up as well on the ten-year hovering around 2.5%. the opening bell as well right after this. we need to be ready for whatever weather may come our way. my name's scott strenfel and i'm a meteorologist at pg&e. we make sure that our crews as well as our customers are prepared to how weather may impact their energy. so every single day we're monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. during storm season we want our customers to be ready and stay safe. learn how you can be prepared at pge.com/beprepared. together, we're building a better california. you recommend synthetic and can yover cedar?to me why "super food"? is that a real thing? it's a great school, but is it the right the one for her? is this really any better than the one you got last year? if we consolidate suppliers what's the savings there? so should we go with the 467 horsepower? or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. ok. sure. but are you asking enough about how your wealth is managed? wealth management, at charles schwab. you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in a minute and a half. a lot going on, the dow shooting for another record, a seven seventh day up. rex tillerson to state. garpy cohn to the nec. kanye west is at trump tower as we speak. >> it's hard to keep up. i get up early and i see that italy's changed, i see china, and these should be the focus but, no, it's the elevator. it's "the apprentice." it's the, what, cabinet apprentice? you're not hired. having been in the boardroom, there's serious decisions being made and as a judge i was consulted and i liked that my view was heard. but it's different in that boardroom. >> newt gingrich said the other day it's actually a lot like that room that you saw on television. >> there's a lot of tension in the room and that's not false tension. >> to the s&p and the opening bell at the nyse. at the big board it is greek day in its 12th year, enkorncouragi investment in greece over the nasdaq. it's the national guard celebrating its 380th anniversary. that puts the marine corps to shame. that's a long time. >> some boeing news this morning. >> i'm so glad you mentioned it. boeing is quintessential of this market. you get this news that they're slowing down. in a previous market before the election we would have focused on the wide body. instead the dividend boost. 30 and people looking for 20. it's a $14 billion buyback this is a company that's a billion dollar company. instead of the thing we thought would be the best gross margins we focus on the capital allocation. we look at the positives. we accentuate the positives. we -- that's -- i was going to do a song. >> i know. when do we do the opposite? >> if the gop pushes back, we do the opposite. that's why i'm so focused on this mcconnell/mccain/rubio fashion. the big tail winds have to get through in order to continue this rally. you have to have deregulation. >> i don't think that's in question. is it going to be revenue neutral, what do you really end up with? you're going to do something and it will be significant. that may not be the case. >> when you get to individuals there are so many different deductions that get fought over. i remember when we were going over reagan's plan, it was -- reagan was able to roll everybody and it was rapid, it was incredible and it was a c-change. that's what trump has to count on. >> there's a reason it's been 30 years since we redid the whole thing. it is extreme lip hard. >> ridiculously hard and i remember trying to figure out recapture. recapture was a real estate -- reagan's people had thought about everything and just had answers to everything. a trump tweet, not a statement. close enough. i just think, wow, right back on track, yesterday was the nasdaq down 0.5. we're right back on track for 20,000. >> yes, not too far from that statistically relevant average. >> do you think it will be on the front page of "the times"? >> dow 20,000? >> "the times" used to talk about it. "the times" doesn't focus on it so much. >> they don't? >> "the journal" doesn't. "the journal" does some. do you think the 20,000 will be the lead story on the upper right-hand column of the "new york times"? >> yes. >> you do? >> yes. >> i do not. >> i believe they'll put it on page one. >> maybe "the new york post" will do it. >> you don't think "the times" will? which will "the times" more likely do? trump will not sell his properties or the dow is at 20,000? which would you -- >> you can do both. next to each other. >> for those people who get the physical newspaper. there are five of us. >> i love the ink on my hands. i do. >> boeing is leading the dow. the top performing component we're at 75 points ahead this morning. 3m is the laggard on investing day. they straddled the range 845 to 880: >> the stock did run up seven points in anticipation of the meeting that may it be too much but i would not go against him. rex tillerson, ambassador ceos, howard schultz ambassador -- executive chairman unlikely to be in the administration. >> ambassador ceo. >> kent, puts a plant in gaza. visits every hot area. that's tonight's show. >> now we have one who is the secretary of state ceo. jeff immelt. >> yeah. >> interesting. >> i did want to take a look, guys, at yesterday yesterday's story in my area, going to talk about getting together. viacom shares down again today, another 2.5%. this morning. cbs not. shares are up. yesterday it was a weird rumor about verizon having interest. the shareholder of cbs and viacom is not selling either company except to themselves and that is not happening at least for quite some time but nobody's buying cbs or doing anything with them. >> the stock was off two yesterday and then it rallied to be up? >> yeah. >> and now it's continue couple bent upon the full-time ceo, the permanent ceo to come out and really start to talk to the street about his plans and try to get things moving there given we have a stock down, what, 11% or 12%. looking forward to getting to know him but i don't know him. people who have met him say he's on top of every number and they like that. and he certainly -- >> downgraded by a lot of people. >> he has attracted his shareholder in the form of national amusements and sherry red stone with a great deal of confidence in his plan. they can't communicate. a lot of people saying, yes, we get it but why are you going to spend this cash on this? why is it burning a hole in your pocket? real questions in wanting to understand the strategy from a fox shareholder perspective today. down yesterday. >> down very badly. yesterday some of the apparel stocks were up big, some down big. macy's down big, walmart up big. there was really lulu doing well but pvh badly. yesterday was very hard. >> urban looking at high single digits for the quarter. inconsistency in retail is a constant. >> a play on the post election because too many companies just tell me that the flood gate's opened once the vi it triol ended. >> yes. financials up. >> bank of america far wells fargo, the stage coach keeps running off -- >> jpm, bank of america, morgan stanley. >> citi is well below it. wells has been hamstrung. love to see what the quarter will be. those won't go back. >> prudential now. i find wells to be a problem. >> that's going to -- >> cedar fair has been strong. that's the one i favor in that group. people worry about whether yield gets past that. we've forgotten immereecommerce. the demand for distribution centers to be close to urban because of amazon is extraordinary. i think it's a trump. >> the boxes are just piling up in my entryway there. >> i know. >> every day. they're not allowed to be opened. you just have to leave them there. >> i don't want to lose sight of the fact amazon, how did we not think about amazon because it's kind of in stall here because it's not ingersoll, it's not emerson, it's not honeywell, united technologies which then passed and goes up. >> it has had a solid year. the stock is up 14%. >> it's amazon. >> it's amazon. >> amazon has the most pirated show the most popular show. you're going to put up with that theft. >> a pirate's life for you. i got that. >> it's a ride at disneyworld. >> it was from the animated walt disney classic. >> could be. >> i know it was. i can tell you that factually. >> that's right. so the watch for 20k, 105 points away. to bob pisani. >> reporter: good morning, carl. a positive open right across the board and the key to this rally and the reason it keeps moving forward is the rotation we have been talking about. other groups are doing well now. take a look this morning at our etf leadership group and you can see banks are still doing well. telecom and even tech stocks are doing better. we had positive preopen trading in the energy names. all the big names like murphy were on the upside. put up the energy names all on the upside, that's the important thing. i think what's interesting we opened down on oil. we were trading up nicely in it oil. the iea forecast for next year there will be an oil deficit in the second hatch of the year. that's moving the stocks weaker. we have seen no significant pull backs and now in december where we had big moves up in bank stocks and look at telecom, real estate and utilities and consumer staples that were laggards are now leaders in december. they are not the big leadership groups that they were. i hate to keep harping but that's why the market remains really strong right now. there has been considerable consternation the fed might throw a monkey wrench by being more aggressive about rate hikes. this is one of the findings for our fed survey but yellen's comments when she testified in congress the fed will be watching the decisions that congress makes and the policy landscape is clear. >> remember, we had bill dudley on he said the same thing. we don't know what the fiscal policy is, how big it is. we don't know when it's going to occur so it's premature for us to take onboard these market expectations. that's dudley. again, your two key people at the federal reserve sure don't sound like they're aggressively going to raise rates. big changes to the forecast, big changes to their gdp commentary, i really doubt it. i think more change than people are anticipating. 19,907 to be precise. the march toward 20,000 continues. >> bob, we'll be watching that. thank you very much. let's get to the bond pits as well. rick santelli at the cme. >> reporter: i know this is a bit indirect but i want to bring it up on the first day of a two-day fed meeting. november year over year import prices. that is the smallest increase in import prices on a year over year basis since july of 2014. something to ponder. we traded up as high as the 252 yield. we have reversed back into the well worn areas mid to upper 240s. the end of august 2014 and the next three will chart on november 1st of this year. ours is around 2.5 but it's the 240s. look at 40 basis points in the same light. look at how it's flattening level. if you look at it, the fed meeting following the ecb meeting the differential between the two will be something to pay attention to. when the fed raises tomorrow night, and i think they will raise, is that going to widen or will we drag them up the way they dragged us down on the antithesis? you know, our high for the cycle for almost 14 years was the 23rd of november at 101.70. even been in the range and one would think we're 40 miles away from it. it certainly hasn't given anything back. we'll have form earp ecb head jean-claude trichet. i'll ask him some interesting questions. you won't want it to miss it. >> we can't wait. rick santelli, take a look at the s&p here, we have new highs on the dow. the dow is up 106 points going for its best quarter since the end of 2013 and we are 97 points away from dow 20,000. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of at&t, and security that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t. dow 30 heat map. and, microsoft, intel, 3m, coke, disney, and procter & gamble, the only dow components in the red. >> i think that nike -- i've been waiting for that sleeping giant. obviously there's been foot locker has been saying, look, there's a lot of confluence there among under armour and adidas and nike but that is a laggard that would be a catch-up play without -- this is something interesting, guys. ba? just a catch-up flight based on nothing. you used to see that in the '80s or the mid-'90s. >> at this point there are only three dow components negative for the year after disney's run-up, which is now almost flat for '16. >> i remember being on the trading desk and karen kramer would say what about nike. let's take some. we're back. we're back to that. hey, why don't you take some proctor, go against the grain. >> so what, 97? >> 87. >> around then? >> when did we do that? '93, '94, '95, '96, '97, '98. '98 second half not so good. but you'd look at the tape and say, caterpillar hasn't moved later. let's take 50,000 caterpillar, maybe close to 100. that's the kind of thing. it's like a throwback. that's what used to happen. you'd be on the desk and jim, it used to be at 90, now it's at 85. let's buy 100,000. that's happening again. it's like, wow, cisco has been stuck here at 30. all right, buy 100,000. that's what's happening. believe me, that's what's happening right now. >> caterpillar, yeah, closing in 100 here, $5 away. that is the best performer of the year still. >> goldman slapped that sell on in the 60s. when are they going to upgrade that? >> and they replaced their ceo. >> unfair. >> to use a cramerism. >> i thought that was really wrong. he's turned that company around and this is the way they're repaying him. i don't know. >> we'll get stop trading with jim in a moment. the dow is up 104 to 19,901. yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird. when a moment turns romantic, why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis and a $200 savings card. stop taking cialis and get medical help right away. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet? >> that's a picture right there, kanye west and donald trump at trump tower. no word yet on what they discussed. apparently kanye said just wanted to take a picture with him. >> some people have kidded that he's co-opting his 2020 opponent because mr. west has made it clear he might run for the presidency. >> yes. but also made clear if he had voted, he would have voted for trump a few days ago. meanwhile the a.p., since you guys are speechless, the a.p. is going with rick perry to energy. we'll see if that happens later on. >> he famously did not remember that wilfred ran that clip. >> whose debate was that? >> november 11th. >> it may have been ours. it was our debate, yes. >> but rick perry, very nice man. spoke to him a lot about business, about oil and gas. he understands the oil and gas business better than anyone. on the board of an oil and gas company. >> governor of texas for many years. >> the department of energy historically has been nuclear, that's what they focused on. this time it might be oil and gas. >> and was on "dancing with the stars" this year. >> he was on "dancing with the stars"? >> yeah. >> how about "america's got talent"? >> i don't believe he was on that show. >> i don't think appearances on reality shows are a liability anymore for politicians. >> not at all. >> i think it's the opposite. >> yeah, it's like it's going to be a cabinet. they have to have -- don't you think they have to have a cabinet there. get mark burnett to do these cabinet meetings. he'd be fantastic. you're wrong. >> jim, let's get stop trading. what are you watching here? >> jetblue reported that november traffic is up 7. some of the other numbers weren't that great. up 7 is what southwest air said for november and that's enough to ignite that group which was down very badly yesterday. so this is that rotation yesterday out of airlines, today into airlines. a rotation into health care today. rotation back to bags today and we're seeing tech because of leadership from apple. so the rotation is alive and well. let's see what "the new york times" has to say. 1:00 p.m. today jetblue analyst meetings. >> tonight. >> i've got digital realty. why? they are data farm and diebold, a security company. they did not do as well as people had hoped when they were on last so we'll hold their feet to the fire. this is amazon, again, amazon, google, data farms, david, the best form of agriculture. >> yes, they do require a lot of cooling. >> yes. not fertilizer, cooling. >> cooling. >> jim, we'll see you tonight. it's crazy and getting crazier. "mad money" 6:00 p.m. dow is up 91. more on the market's move after this. good tuesday morning and welcome back to "squawk on the street." we're at post nine of the new york stock exchange. dow 20k moving closer and closer to reality. just about 110 points away. we're watching tillerson's appointment to state. day one of a two-day fed meeting. kanye west at trump tower and watching a lot more. >> a lot of excitement there. our road map for the hour begins with stocks hitting fresh new highs here. the dow as carl mentioned closing in on 20,000. we'll discuss and later we'll be joined by former ecb president jean-claude truchet. plus president-elect trump announcing his pick for state, exxonmobil ceo rex tillerson. >> and our exclusive interview with founder and principal of rch energy, robert raymond. his take on oil prices, production and trump's pick of rex tillerson. let's get straight to the markets, though. a lot of action as the dow inches ever closer to that clee 20,000 level. what's driving it and what does that level psychologically mean? >> i think initially what's driving it is a gravitational pull. everybody who has felt underinvested and this rally has not given them any chance to get in, i think basically you have no sellers on the field right now, no urgency on the sell saesae side. as far as the significance of 20,000, i think it's much more just about a psychological sign post that reminds people how far the market has come. it's come far in a short period of time, but of course you can point back to 10,000 when it first hit that in 1999. i think the annualized return since then is 4%. i do think it shows you that large blue chip companies and very small companies like the russell 2000 have been participating in this rally. i think the question now is has the chase gotten a little too intense. i'm looking at some technical indicators of the market being overbought, is sentiment getting too bullish, that's the short-term concern. >> we often wonder how bullish has this market gotten, how many front pages has the stock market made it to. what sort of indicators are you looking for to tell us where we are on this spectrum of exuberance? >> if you look at the options market indicator, i'm not talking about the level of the market volatility index, but if you look at the relative exposure, that's one area that shows you traders have been playing it for the upside. that's just one thing. i think a lot of the survey work is showing that the merrill lynch global fund managers survey show it all especially on things like banks. but on the other hand if i look at what would really puncture the rally, something that would lead to something more substantial than just a little bit more of a dip, i'm not seeing the credit markets fall apart, none of that. so to me it's do we enter another january leaning a little too much to the bullish side. we had that a couple of years in a row. it doesn't mean that you're in for something nasty but it does suggest that you had some deferred selling that might hit. >> and nike is leading the dow right now in terms of percentage, so a lot of rotation and re-rotation into stocks, which is all adding up to a nice rally. we know you'll be here all day, mike santoli with the dow. the dow is up 100 and we are at 19,900, just about 100 points away, carl, from 20,000. meanwhile the president-elect nominating exxonmobil's ceo rex tillerson as secretary of state. john harwood is outside trump tower with more on that. good morning, john. >> reporter: good morning, carl. first of all, there's something unpredictable every single day here at trump tower and we just had one. a new example, which was that kanye west came to trump tower, met with donald trump, came down into the lobby after the meeting and they had a nice embrace and hug there. kanye west, of course, recently hospitalized, now out. and that was a moment we didn't expect to see in the campaign. however, it was not as big a hug as donald trump this morning gave to the fossil fuel industry, big oil and to the values that he expressed during the campaign. we expect him shortly to nominate rick perry, former governor of texas, as his energy secretary, somebody very close to the oil industry himself. but he has formally nominated rex tillerson, the exxonmobil ceo, to be his secretary of state. this is somebody that he has described as a world class player, a world class deal maker, and mike pence, the vice president-elect, was in trump tower a few moments ago and he offered these words of support. >> we just couldn't be more grateful that someone of rex tillerson's proven leadership and accomplishments has been willing to step forward to serve our nation as our next secretary of state. he along with general john kelly at the department of homeland security represent the caliber of experience the american people are coming to expect from the cabinet coming together around our president-elect. we're looking forward to more announcements this week. >> reporter: now, the challenge is going to be getting a majority of the senate to agree with vice president-elect pence's sentiment. democrats, of course, are going to resist rex tillerson in terms of senate confirmation, but there's increasing concern among republicans, especially over rex tillerson's ties to russia in light of the cia's conclusion about russian interference in our election and in light of donald trump's evident closeness to some of the policy positions that vladimir putin is sympathetic with. that is going to get a thorough airing. we have had mitch mcconnell yesterday, the senate republican leader, embrace the call for a bipartisan investigation of russian interference in the election and even before that investigation is completed, it's going to be a challenge for them to get the 50 votes plus one that they need to get rex tillerson through as secretary of state, guys. >> appreciate that very much. john harwood this morning in midtown manhattan. for more on this we're joined by former chief white house ethics lawyer under george w. bush, richard painter, and the top diplomat for the state department, john gerwin. gentlemen, how do you think this resistance to tillerson regarding russia will impact the hearings? >> mr. tillerson brings a lot of skills to the job in terms of being an executive, understanding the rule of law and investing in people. i think the question will be not whether as secretary of state he's capable of faithfully executing the laws and policies of the united states, i think the question of the hearings will be what are those policies. the questions will be what do you believe about the role of nato? do you believe in the independence of the balkans and the new independent states. do you believe hacking is a problem the united states ought to investigate and respond to it and do you believe the united states ought to use sanctions when necessary to implement our policies. so mr. trump hasn't been so clear on what those policies are and the nature of the confirmation hearings is that mr. tillerson will be asked his views on russia's not only dealing -- his policies not only on russia but really his policies on every major conflict point in the world. so that's where i think the inquiry will come. >> richard, does his tenure at exxon lead you to what some of his potential answers might be to that? >> well, we have yet to see. he's certainly a man of high intelligence and valuable experience. but we need to make sure that he is going to do the work of the state department in an unbiased manner. he's going to have to get rid of all of his stock in exxon, all of his stock options, all of that needs to be left behind. he cannot have a financial conflict of interest in this job. this isn't just about russia, it's about the middle east where a lot of the world's oil supply is and the problems that come up there. an then most important perhaps is the problem of climate change. that is a problem that's going to be solved through multi lateral negotiations between the united states and other countries. we can't just solve that problem alone. and the secretary of state is the key job for that. and the question is whether he's going to be beholden to the oil industry or whether he's going to focus on climate change and negotiating on behalf of the united states to make sure that we collectively solve that problem before it gets even worse. so he's got a lot of work to do. he cannot be beholden to the oil industry in this job. he needs to sell the stock and distance himself from his former colleagues at exxonmobil and others in the oil industry and be an effective secretary of state. i think he can do it, but he's going to have an uphill battle if he appears to be at all tied to the oil industry in this job. that simply won't work. >> if i can come in on the climate change question. >> go ahead. >> it's an irony of the trump administration, if confirmed mr. tillerson will be the only member of the cabinet who has come out in favor of a carbon tax. his company uses an internal cost of carbon. they invest in carbon sequestration. and i think he understands the importance of keeping your word because the oil industry and every other industry depends on enforcement of the word of law. with respect to climate change i think mr. tillerson at least as an engineer is used to making empirically based decisions. so i wouldn't predict where he is going to come out but in looking at the paris agreement where every country makes its own commitments and in seeing what exxonmobil has invested in around the rest of the world, i think if there is a chance of a rational voice at the table on paris, on climate, on investing in innovation and keeping the united states at the front of the clean energy technology innovation and not taking us out of the conversation, you know, i think we have a good chance that mr. tillerson would be a rational voice in that conversation. he will be questioned about it. >> that will be one of the big questions. richard, as the former ethics lawyer at the white house, i wanted to ask you about the new revelations about president-elect trump's own businesses. he did offer some more clarity on twitter. he said no new deals during the election. we're going to get more details from that postponed news conference from trump himself, but do you think this quiets some of the critics at all that have been saying maybe foreign governments and businesses are going to come woo trump and it will be equally beneficial for him in his business dealings. the fact that he has said i'm not going to make any deals? >> well, deals, that's just a slang term for transactions. you can't run a business without transactions, without deals, so i don't understand how he's not going to do any new deals. is he not going t.o. any new tenants in these buildings, any new loans, is he not going to have payments on existing loans. is he not going to allow diplomats to stay in hotels and book them like the government of bahrain did? we have a whole range of different deals going on and you can't say no new deals and keep a business running so that's not clear at all. it appears that he is digging his heels in with respect to retaining ownership of the businesses and that simply won't work from an ethics perspective. and for weeks i've been raising and now many, many other people have been raising this question under the constitution of emoluments, payments from foreign governments and profiteering from dealing with foreign governments. he absolutely has to deal with that problem or he cannot take office consistent with the constitution. we do not allow someone to be president or have any other position of trust with the united states government if they're receiving emoluments, payments, from foreign governments. it's right there in the constitution. i expected with him to deal with this before the electoral college met so they could go ahead and have a vote in good conscience. i'm very disappointed with the tweeting last night and the no new deals slogan doesn't make any sense. you can't run a business without deals. you have deals day in and day out, so he needs to clarify that and he needs to come up with a plan to dispose of ownership in the businesses or he's not going to be able to comply with the constitution and he's going to have a whole range of other problems. i'm very concerned about it. >> you've been very focal on that, richard, but it does appear we're on his timeline and we'll see if and when that presser does happen. richard, david, appreciate your time. a lot to talk about. thanks so much. >> thank you. >> thank you. when we come back, we've got an exclusive interview with the founder and principal of rr advisors and rch energy, robert raymond. plus the former president of the ecb jean-claude trichet will be joining us live. as we head to break, take a look at a 20-year chart as the dow closes in on 20,000 for the first time ever. we are just about 100 points away right now. goldman sachs, apple and ibm are adding the most points. we could make history today. stay with us here on cnbc. is happening before our eyes. shift in human history sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim the global investment management businesses of prudential. keeping our close eye on the stock market hitting new all-time highs, closing in on dow 20,000. we're a little over 100 points away. stocks up about half a percent. the nasdaq outperforming, up 1%. are stocks over their skis here? steve liesman is here. >> a good time to ask if stocks are over their skis. first we asked our 46 respondents why is this market up quite so much? 82% say it's because of policy expectations from the new president. just 18% say it's economic fundamentals. so what do you think about how the market has priced this in? you see 56% say it's too optimistic about the expectations for policies from the new president-elect. 42% say they are realistic. and that's why when you look at the expectations for where the s&p is going, they're more muted than what's happened. currently 2256, or thereabouts, looking to go to 2357. big jump from the forecast back in november but looking to go less than they had previously. just about 9% higher. all this comes amid expectations for higher interest rates. you'll see right here the new expectation, well, they surpassed that since the last forecast. now it's 290 for the end of '17 and 344 for 2018. remind you again of the main findings of this survey. 90% say the fed will hike tomorrow. 44% say the next hike in may and then they'll get done the second quarter of 209 and that is 50 basis points than they had forecast. >> the optimism is so notable, steve, i wonder how members of the federal reserve tomorrow are going to reflect their change in the outlook for the economy, the fact that stocks have shot up along with bond yields and the dollar since the last fed meeting. we get to hear from janet yellen and we also get the whole shebang. how do they tackle the outlook. >> you're asking the right question. the market will be on its edge waiting to see tomorrow. how they project it forward. i think they're going to try to be a little poker faced about this in the sense that, hey, we see this, we know it's coming, but we cannot fully price this in until we see what actually happens here. they will take into account what the market has done and it's a bit of a balancing act here because on the one hand you have the stronger dollar and higher interest rates. those are tighter financial conditions. and you have a much more buoyant stock market and those are looser. so the fed will say we're going to hike and we're going to watch is what janet yellen will tell us tomorrow. >> steve, a busy 36 hours ahead. >> looking forward to it. when we come back, a big player in the energy space. our exclusive with robert raymond. we'll get his take on oil prices, trump's secretary of state state pick, rex tillerson, and more. dow is up 82. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. every great start-up begins with a simple idea. but with growth comes complexity. that's why so many innovators are on the ibm cloud. like refinery 29, with nearly a billion views a year. or runkeeper, a training app used by over 50 million runners. or game developers whose popularity depends on launching new updates fast. helping to keep a company's success uncomplicated - that's what the ibm cloud is built for. president-elect donald trump nominating exxonmobil ceo rex tillerson as his secretary of state. this as crude oil moves higher today as middle east producers confirm those production cuts. robert raymond is principal advisor for rrh and is the son of former exxonmobil ceo lee raymond who preceded tillerson at that post. so you've grown up in this industry, i know, all along the way and of course run these funds that are making decisions every day in terms of what companies are best positioned. so let's start there with the bigger picture of oil and these production cuts from opec. do you believe they are going to be consistent, and what does it mean sort of as you look over your portfolio and what you think actually will benefit. >> yeah. so we do think they're going to be relatively consistent. so maybe a little bit of this time it's different. but i think it's important to understand that part of the reason opec is doing what they're doing is because some of the financial strains and stresses inside of the major producing countries in opec. if we go back a few years here shall the funds mental issue within opec became the concept to call on opec, the amount of oil opec is required to produce on a daily basis to meet demand fell to 29 million perils a day. so as a percentage of global market share that's a relatively low number. in the last couple of years they have sought to recover that lost market share. they're up to 32.5 million. so in one sense if you understand what saudi and opec were really trying to do two and three years ago, sort of mission accomplished. >> get that market share back and pressure our open shale producers right here. >> exactly. so gain the market share back at the expense of the high-cost producer but also so now they're transitioning from a market share battle back to more of a price stability issue because of those 20% budget deficits a lot of those countries are running. so put that in context, in 2009 at the peak of the financial crisis here, we ran a 10% budget deficit in the united states. >> and it has come down significantly since. >> right. >> the saudis are borrowing in the capital markets for the first time in many years because of that deficit. >> and we're talking about the wealthy opec members if we think about the venezuelas of the world at the other end of that spectrum, they're obviously in much tougher shape. so opec as a whole needs an answer, which really incensed some discipline around the concept of quota and compliance. >> so what does it mean back here? again, you've made the point, we both have, shale producers then suffer as a result of the saudis taking back market share or opec taking back share. we've seen that happen, particularly at the eagleford and the balkan where production costs have been higher. >> right. >> is it back in business for everybody now, though? >> that's one of the differentiating points here. if we think about the big three oil shales in the u.s., the permean has some structural advantages the other two simply don't have. if we go back 18 months ago, they collectively produced a million barrels of oil a day. today, 18 months later, the permean produces more than the other two combined. so the big tectonic plates of energy are shifting, the sea change that's happening here, but it's really emblematic of a structural advantage in the permean that the other two don't have. so that's why we've seen production be relatively resilient. it produces about 2 million barrels of oil a day today. that is flat from a year ago. meanwhile the other two have declined a lot. >> structural advantage, explain to viewers what that's about as quickly as you can. >> there are a lot of components but it's the concept of large stacked intervals of hydro carbons that at the end of the day sums up to one of the largest oil fields in the world. 275 billion barrels of oil in place. what's really happening is the industry is taking technology and leveraging technology, i'll call it disruptive technology, fracking, and figuring out how to get the recovery factor across 275 billion barrels up. so it's a function of efficiency, how many barrels of that can we ultimately commercialize and at what cost, what price, which really is the last component of this. the one other important comment i'd make is that, you know, i hear a lot of talk about 45 and $50 oil is the cap and the permean guys are all economic at those prices. there's a big asterisk there. i would just caution as we go through the recovery phase of the energy cycle here, it's likely to service costs will start to inflate. at the end of the day for every 10% cost of inflation and service costs, that translates into about $5 a barrel of incremental price required to generate the same return if you're the producer. so if a $5 million camp in midland county goes to $6 million, all things equal, the price of oil needs to be $10 a barrel higher to generate the same economic outcome for the producer. >> which means what for you as an investor? >> so we've been really focused on the high quality permean names, the some microcap guys that have leveraged technology and sort of if you will generically hit the home run. resolute energy is a good example. the diamondbacks, the rsps of the world. and then almost i'd go a step further now and i think what we're going to see evolve is the concept of the superindependent. so there's the super major in exxonmobil and chevron texaco. >> of course. >> but if i think of something like the super independent, huge asset base, huge footprint of leasehold. decades, right, of drilling inventory. very efficient operator and an ability to grow against a conservatively and well structured balance sheet and effectively get to the point where you're generating more free cash flow, more cash flow than you're investing in your business, which is almost unheard of in the energy business, right? >> yes. >> the idea that we would sit here and have a conversation about a free cash flow generating company defined as n e and p company is almost unheard of over the course of my career and many others in the industry. >> finally, mr. tillerson, sflt, you talked about super majors, he ran the biggest of them, as did your dad. do you think it's one that lends itself to being secretary of state? >> so in some ways i do. maybe setting rex aside for a minute, my suspicion, i haven't talked to him obviously, but i think what president-elect trump is trying to accomplish here is to reinstate a relationship between the business community and the state department. and so i would argue that over the last sort of eight or ten years, right, the state department has lost sight of the relevance of the business community as it relates to setting policy globally. so as i think about who would you want to have in place, right, to help further that initiative or sort of hit the reset button in terms of how do we really think about all of this if you're the state department, that's probably an interesting way to think about it. i think the second point then becomes maybe my own view here, others may disagree, right, but our foreign policy in the middle east probably has left a lot to be desired. and so given some of his relationships and some of the rebuilding of relationships in the middle east, saudi arabia as one example, right, he's probably helpful in some of those aspects as well. >> robert, we appreciate your stopping by. thank you. >> you're very welcome. >> send it back to you, sara. the dow a little more than 100 points away from 20,000. let's send it over to sue herera for cnbc news update at this hour. hi, sue. >> hi, sara. good morning, everybody. here's what's happening at this hour. a spokesman for the chinese foreign ministry says china is willing to work with whoever becomes u.s. secretary of state and as you've been hearing, president-elect trump has nominated exxonmobil's ceo rex tillerson who has close ties with russia to that position. a judge in sicily has convicted a ship captain and crew member in the april 2015 sinking that left 700 people dead in one of the mediterranean's worst migrant disasters. the captain was sentenced to 18 years in prison. the crew member got five years. the egyptian government has released foot annuage which it shows the suicide bomber that killed 25 people at a cairo church during sunday mass. the video shows a man holding his jacket around him before walking into the church shortly before the explosion. so far, no group has taken responsibility for that attack. a rare copy of a book illustrated by j.k. rowling is to be auctioned off at sotheby's in london today. it is estimated to fetch up to $635,000. the book is one of only seven that rowling produced. you're up to date. that's the news update this hour. sara, i'll send it back downtown to you. >> which is why i've never heard of it. sue, thank you. when we come back, boeing has a $17 million contract with iran. we'll speak with representative peter roskam, an outspoken critic of this deal. intraday records all around for the dow, s&p and nasdaq. it is the dow we are watching carefully. we're about 100 and less than 50 points away from dow 20,000. it would be the first time ever and we'll be all over it for you. we'll be right back on "squawk on the street." market gains fading here a bit. the dow is up 52 points, about 150 away from 20k. both the dow, s&p and the nasdaq setting record highs earlier this morning. boeing agreeing to ship 80 planes to iran at a deal valued just under $17 billion but there have been outspoken foes to such a deal in congress, none more than illinois congressman peter roskam who joins us now to talk about this issue from washington. >> nice to be with you. >> how hard are you going to fight this deal? it would be the biggest for a u.s. company with iran since president obama lifted through that executive order the sanctions. >> we're going to fight very hard on this and there's an overwhelming majority in congress who supported efforts to stop this deal. now we have an incoming administration. and here's the point, the iranians are the world's largest state sponsors of terror and they are using these planes to shuttle various pieces of material and weapons and so forth to syria, to hezbollah and other places around the world. with all of the discussion over the past several months, boeing has not been able to answer a simple question. how do you preclude that from being used by terrorists, and they have no answer and this is a terrible deal. >> why wouldn't the planes have some sort of identification numbers on them for that point, so that boeing and/or the u.s. government could track them to make sure they're not transporting weapons and terrorists around the middle east? >> they have got tail numbers, but remember we're talking about the regime that fooled the entire world in terms of putting together a nuclear program. so the capacity to move a plane is a fairly easy thing, and it has been documented in early july of this year there were planes that were -- these were iran airplanes that were going from tehran to damascus at 3:00 in the morning, no commercial purpose obviously at 3:00 in the morning, only a necessifarious purpose so this has been well documented and there's even been photographs of iranian irgc, that is the iranian guard, in front of boeing planes using these things from the past. so look, it's all well and good to talk about sales, and sales is a very good thing of american products. but not at the price of human life. and boeing now is making a threshold decision, i think, which is a terrible one, and its name, if it goes through with this sale, will be instrikably linked to every future terrorist or bad act iranians are involved in. so we're going to fight this hard an i think we've got some tea tools to mitigate this. >> boeing did point to the fact that this deal would support 100,000 u.s. jobs. that's something new. and potentially would appeal to president-elect donald trump, who has made that one of his hallmark campaign promises, to bring back manufacturing jobs. are you worried that that sort of pr move or even if it is a real thing, to support jobs in this country, might hurt your chances of blocking this deal? >> well, it's interesting. i am from the chicago area and boeing is headquartered in chicago. there are members of congress who have joined with me as outspoken critics of this who represent tens of thousands of boeing employees in their constituencies and they're scandalized by the notion that this company would make those workers be complicit in terror by creating these planes and giving them to what is unarguably the world's largest state sponsor of terror and the iranians continue to repudiate any effort to move away from terror. so is jobs a good thing? absolutely jobs is a good thing. are lives more important than jobs? yes, it is. >> is it your expectation that if this deal were not to happen that the iranians would go ahead with the deal with airbus? >> they could go ahead with the deal with airbus but airbus has a similar problem that boeing has. that is the amount of american technology that is in airbus means that they need certain licenses in order to transfer that to the iranians. we've been successful in passing legislation through congress overwhelmingly supported, by the way, through congress that says you can't get one of those licenses to move forward. so airbus is similarly situated. it hits closer to home with boeing, but airbus is similarly situated. >> we learned today that president-elect donald trump intends to have rex tillerson be his secretary of state, our top diplomat. tillerson was on cnbc back in march, congressman, and listen to what he said specifically about whether he was looking to do deals in energy and gas in iran with the lifting of these sanctions. listen. >> i don't know that we're necessarily at a disadvantage. the history of iranian and foreign investment in the past, their terms were always quite challenging, quite difficult. we never had large investments in iran for that reason and i don't know that the iranians are going to be any different today. we'll have to wait and see. there hasn't been any contracts put out. but i also learned a long time ago that sometimes being the first in is not necessarily best. we'll wait and see if things open up for u.s. companies. we would certainly take a look. >> we would certainly take a look. does that trouble you if he does get confirmed as secretary of state? >> well, i think he's going to be reporting to a man that is the new president, donald trump, who said he intends to tear up the iranian deal on his first day in office. so president trump ran on a repudiation of the iran nuclear deal and i think he intends to follow through on that. it's also interesting that he said that they would take a look at it and he wasn't anxious to be the first one in. and the companies that are now pressing to be the first ones in are finding out that the iranians are manipulating them in some cases and are now trading on their reputations, that is trading in a downward trend. so i'm not concerned. i think president-elect is going to stick with his promise to walk away from this deal and i don't think, frankly, that there was a meeting of the minds between the iranians and the obama administration, both of whom came away from that deal telling their own people something different happened. so the iranians have a chance to change and to change their disposition and to walk away from terrorism. if they do, i have no objection to moving forward for the next discussions. but absent their change in behavior and their willingness to say we're not going to support assad, we're not going to support hezbollah, i think we continue to block their capacity to do harm around the world. >> i hope you won't mind one question on taxes. we had kevin brady this morning talking about whether or not we have such a head of steam that we can commingle corporate and income and do this all at once or whether corporate comes first. what's the read right now on the hill? >> my sense is and i think chairman brady is doing a great job leading this committee. my sense is we've got a tax code that is dissolving underneath us. it is complex to the point of absurdity. the shine has come off of the penny that is the enforcement agency, that is the irs, and companies will continue to leave with inversions. so my view is we should be talking about comprehensive tax reform and i think that's the best place to start and i think that's the chairman's intention as well. >> we'll see what happens on both fronts, taxes and iran. thanks for joining us for joining us to talk about those key issues, peter roskam, republican congressman who is very much against this boeing deal. >> learned a lot just then. thanks very much. when we come back, former ecb president jean-claude trichet joins us live. we'll get his take on yellen, rates, president-elect trump and a lot more. take a look at shares of dow opponent 3m. although the guidance not bad for 2017, it is the biggest laggard. the dow down after being up as much as 119 points. does driving a sports car make you a worse investor? a team of researchers compared the performance of hedge fund managers with the kinds of cars they drive. find out what they discovered at tradingnation.cnbc.com. more "squawk on the street" coming up. welcome back to "squawk on the street." the market is hitting record highs but the s&p real estate sector is struggling to make gains. one of the worst performers. morgan stanley analysts release a report today changing its view on the sector to cautious from a prior in line. the firm's bearish call comes from the impact of rising rates and slower growth. nearly all components are negative with that sector today, with boston properties, vornado and sl green. those all down between 1% and 2% in early trading. sara, back to you. let's get over to rick santelli with a special edition of the santelli exchange. good morning, rick. >> good morning, sara. of course on this first day of a two-day fed meeting, we do have a special guest. jean-claude trichet. it's always a pleasure, thank you for taking the time. >> pleasure to be with you. >> well, with the delay, i'm going to ask you three questions, mr. trichet. the first has to do with the post election market moves both domestically and even globally. we've seen stocks move up aggressively, rates continue to move up, the dollar gets strong. my question is, how should, in any capacity, our federal -- our federal reserve take into account post election moves with regard to their current policy which looks like the beginning of what will be a tightening cycle? >> well, first of all, let me say that i personally have full confidence in the open market committee to take the right decision in circumstances that are a little bit exceptional, obviously, because of the market reaction to the new election. i think that we have not to concentrate necessarily on short-term reaction of the market, you know that better than anybody, and to have some kind of medium-term vision. i expect the fed to do whatever is good for the u.s. economy independently on other factors and they have prepared the market very well for an increase of rates. so i take it that, again, they will take a decision which is certainly appropriate for the u.s. economy taking into account the cycle and in my opinion they are going through the overall i would say immediate reaction of the market after the election. >> all right. currently we have a yield of about 2.45 on our ten-year note in the u.s. and overseas the current yield on a bund is about 35 basis spoints so they'points separated by 110 basis points. how in your opinion will that difference between rates get affected? are the u.s. rates going to move european rates higher? how will that relationship be altered with our strategy going in a different direction? >> well, your tactics, if i may, in the united states are going in a different direction. i'm not sure that the strategy goes in a different direction. the difference between the u.s. and europe is that the business cycle is not the same. we are not at the same, i would say, episode in the business cycle. it is absolutely legitimate to increase rates in the u.s., it seems to me, taking into account all, i would say, figures that i have in mind. it is not the same in europe for many reasons, in particular because we had the sovereign risk crisis. so our cycle is not the same. but the objective remains the same, to provide both economy on both sides of the atlantic what is best for them, taking all into account, including, of course, fact that both central banks have the same definition of price stability in the medium and long run, namely 2% or very close to 2%. so, again, the strategies are not different. the tactics are different because they have to be different, taking into account facts and figures. >> let's take that to an even higher level. let's go from the way the markets are -- relationships currently exist to policy relationships. every central bank will do what they need to do for their own economies. i get that. but we see definite bias to markets to move independently, in some ways, of policy. so, how will this tightening cycle affect the policies and the longevity of accommodation by the ecb, the bank of england, bank of japan, bank of china? will our tightening cycle force them to rethink their current accommodation strategies? >> i'm not sure of that. of course, all our economies are interdependent and we are all intertwined. very narrowly, if i may, in this global economy, global finance. so, of course, we all have to take into account the policies and the decisions that are taken by the others. but, again, consider that at least for the advanced economies when i say their strategies are very much alike, it is because we have the same definition of price stability in the medium and long run and the same ambition on top of all other goals that the central banks have, the same ambition to suddenly anchor in the medium term infringement expectations ve close to 2%. there is unity the world over. i'm speaking not necessarily of china. there is more unity the world over than is generally suspected because a lot of observers and market participants are only looking at the very short term decisions, which are not alike, obviously. so, again, you see, i remain confident that all central banks will take into account the decisions of the others, including the u.s. at the decisions in europe because we are all interdependent of each other. >> thank you very much. it's always a pleasure to listen to the opinions of one who has sat in the big chair. >> thank you. >> thank you again. hope the holidays treat you well. >> pleasure. >> sara back to you. >> tech is leading this market right now. with that in mind, let's send it over to john forte with a look at what's coming up on "squawk alley." hi, john. >> hi, sara. we'll take a look at how business is likely to be affected once president trump actually takes office in a month and a week. also ho, ho, ho, apple will have air pods on shelves for christmas. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. when we come back, a lot more on the record-breaking markets. dow, s&p and nasdaq hit record highs today. secretary of state ambassador nicholas burns, we'll get his take on trump's secretary of state pick and a lot more. let's show you where we are on stocks right now. the march to 2017 continues. we got about 19,900 for the first time ever, just below that number. financials like goldman sachs seem to be fueling the dow. but even losers of the year like nike. a change from what we've seen post election. the nasdaq right now is up a full percent and s&p tech sector is leading the s&p 500. if the dow closes at another record, that would be the 16th, one-six record close since the election. they're all in interday record territory ahead of the fed announcement tomorrow. carl, over to you with "squawk alley." >> thank you very much, sara. it's 11:00 am on wall street and "squawk alley" is live. ♪ ♪

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