pound. >> those violent moves have calmed down. >> we have to wait until we get home sales in about an hour. >> s&p 500 at 2200. 10% total return year to date. >> wow. >> that's pretty amazing. >> thank you, mike. thank you. happy thanksgiving. anyway, make sure you join us tomorrow, whoever is here. "squawk on the street" is next. ♪ good tuesday morning and welcome to "squawk on the street." after all four indices hit record highs yesterday, they are only a point or two away from doing it again at the open. lots to get to this morning, including earnings and politics. watch europe and oil trying to hang on to 48 this morning with inventories tonight.

we begin on dow 19,000 watch. president-elect donald trump lays out his first 100 days in the form of a video. says he's going to abandon the tpp trade pact on day one in the white house. amazon could be getting into the lucrative live sports business. reports say they have held talks with the nba, mlb and the nfl for live game rights. but first up, stocks hitting those record highs, the dow is within 44 points of 19k, the s&p just two points from 2200. small caps making history as well. the russell at an all-time high and in the midst of its first 12-session winning streak in 13 years, jim. technicians love this setup over the next few weeks. >> more than 700 stocks hit an all-time high. that's very positive. the groups that have been involved in this rally are broad based, they don't seem to just be all oil or all tech or all

bank, it's really a huge part of the s&p. we saw yesterday the -- kind of a catch-up trade with a lot of the oils. we've got cold weather, a potential opec deal, a president who obviously a little more pro fossil fuel so it's a broad panoply. i've got to admit every time you think it's done, it finds something else. yesterday was oil going up. it was like a pretrump move. oil going up, a lot of stocks go up with it. so it's -- today would be a day that it could rest if oil comes back down. >> so what don't you trust going into the new year? >> let me give you an example of what i don't trust of the last night i'm reading jack in the box and i'm on the palo alto call. the palo alto call fraj frankly was -- i don't want to just call it disappointing because they did a lot of things. they talk about a mixed environment and taking longer to get some deals done, which is unfortunate, not as robust as expected quarter. now, one of the things that's happened, is no one is paying

attention to these. wait a second, it's a new year, everything is great, it's tech, there's servers. we've got to protect servers, right? e-mail. sometimes the facts don't get -- don't fit the story. but this is worrisome because it's not what you want to hear on a call. you don't want to hear that jack in the box had not great -- a slowdown in same-store sales so we've got to deal with reality, deal with the fact that medtronic did not do the number, but dollar tree, signet, they were two a lot of people expected bad things from and the short squeeze is on. yesterday was a fang day, both fang diamond energy and alphabet now google. so you had a lot of money coming in or else those couldn't be going up at the same time as all those others. >> not to put too much stress on it, overnight the earnings we got were largely not good on

monday. >> no, that's right. >> you mentioned palo alto and burger king. also we got dicom, a small provider of telecom equipment and the like. broadcom i think had some headline numbers that were pretty good. >> yeah, look, don't get in the way of the semi conductor rally. the semi conductor rally is just incredible. do not get in the way of that thing. i just have to tell you that the semis have been leaders here. micron and particularly amd, as everyone keeps thinking that there's something going on in your world, david. >> which world would that be? in m & a, i mean? >> west world. >> i have yet to catch that. i think that's a fair assumption. things are a bit quiet right now. it's unclear what we'll get in terms of before year end in m & a but the pace continues and probably is quickening. everybody i've been speaking to in t & t, technology, media,

semi com tends to be out. >> a lot of people talking about some of the bigger tech companies getting together, but what you have to realize is that the balance of power went from the western digitals and the seagates to the companies that buy. the companies that buy exercise a little too much power so the companies that are suppliers got together, being a little bit more tough. that is how broadcom managed to get some strength. qualcomm trying to do that but here they're worried about china. they're worried about not the trade war, but the ongoing trade wars. it's not a trade war, there's already been a trade war. we just didn't know. >> we were on the losing end of it. >> we're kind of like, well, geez, there could be a trade war. they're like we have a vicious trade war going. and the video -- >> although qualcomm has come to

a much better place in china over the last year and a half than they have been. >> if you caught the youtube channel, david, i don't know if you're busy watching broadcast or cable, but there's tpp is one of the first things that goes and that says -- >> although that's a benefit for china. >> right. >> the tpp was sdiedesigned to exclude china. if it goes away, that's good for china. >> right. but i'm saying that the tenor of the discussions with china are not -- they're a little strained. hence that china outlet, that newspaper that's communist party was talking about apple. now, i happen to look the qualcomm/nxpi deal very much but qualcomm has been going down ever since trump got in. >> nike responding to that tpp vow to make it the first day one

priority. do you believe that as we withdraw from the deal that free trade finds a new global leader in china? i mean it's not going to just stop. >> i was against tpp. i had stances on "mad money" that were prewhatever happened in the election. i always thought that we didn't get the bet of these deals and that this would be better but not better for nike. nike was a champion of it. what can i say. nike -- you can make nike a champion. that should be maybe a policy strategy. or maybe you look at it differently. i'm trying not to cast aspersions on nike, it's a great american company, and they want to be able to produce at a low cost and beat adidas, which i don't blame them. i want us to win on trade. i don't want us to lose on trade. you look at me like what? >> i'm aware of that. you've been talking about that

for some time. you are -- >> i don't like the fact that the koreans and the mexicans and japanese -- i've watched the koreans, mexicans and japanese build plants within a few miles of where i have a place and i just think this is what america could look like. i mean the growth, the unemployment, 4% in the county, in the state that i'm in. it's just amazing. you would love that kind of growth and all the ancillary businesses that are formed because of it. >> but some argue we got that in the southern united states, south carolina. >> yes, but the last few years we haven't. and they have gone there. bombardier just went there in a big way. >> that's going to be a key test of trump's promises. you know, i think there are others who wonder whether the jobs will come back, how many will there really be. if you build a new plant, how much robotics will be in that plant as opposed to human labor. >> it's the ancillary.

you need to put a ppg there, you need to put a semi conductor factory that makes those just in time chips. it's those guys. it's the need to have grocery stores and the need to have dry cleaners. when you see these executives get off these airplanes from japan and germany, they're not staying at motel 6. >> no, understood. >> i've stayed at motel 6. la quinta, i love la quinta. >> we understand the multiplier effect, yes. we get that. >> oh. >> we do. >> okay. i'm defensive. i'm defensive. >> no, you may be right and it's going to be fascinating to watch. >> i'm going to have a youtube show on it. because i need -- >> it's all the rage. the president-elect releasing a statement on video outlining his priorities once he takes office. this was created and distributed by the transition team. this was not an event that was open to the press. trump began by talking trade and

said, as david pointed out, he plans to withdraw from tpp and then he moved on to energy. >> on energy, i will cancel job-killing restrictions on the production of american energy, including shale energy and clean co creating many millions of high-paying jobs. that's what we want. that's what we've been waiting for. >> clean coal and shale. >> there are not millions of jobs that can be created, there's just not. one of the reasons is because the epa has made a mandate that all of the utilities are following, which is the phaseout of the 40-year plants that were built when jimmy carter called us the saudi arabia of coal. you know, those plants had a 40-year life. you can try to augment them or scrap them and build natural gas. coal is still the baseline fuel, but natural gas will be the baseline fuel in five years. but there are tremendous number of jobs involved with transporting natural gas from where it has to go and oil from where it has to go.

but in terms of the drilling, look, if the gulf of mexico were economic, yes, you would have more drilling. but we're stuck in a world where president-elect trump does not control the price of oil. natural gas is very cheap. coal, can you bring coal back? maybe to ship it away. but, look, our utilities thought that hillary was going to win too. they made judgments. >> well, it's easier -- they're all moving -- natural gas is what's powering them. >> it's cheaper. natural gas is plentiful. we have the most natural gas of anybody in the world, why not take advantage of it. there will be no new coal plants built in this country, period. period. that's just what the major utilities are committed to. >> millions of jobs seems like it might be a stretch. >> there's a couple of states where they are without a doubt -- >> what's coal right now, fo40,0

jobs? >> if you speak with norfolk southern and union pacific and csx, the coal loadings are down more than 20% and that's because natural gas is triumphant. that's not bad. natural gas i would argue is cleaner. i know there are people that think natural gas is dirty. it's certainly cleaner than coal unless you spend a fortune to make plants clean and the utilities have given up on that. >> sure. >> it made sense. they were afraid that one day you would get a president that wouldn't do it and say, listen, we're not going to have nicole plants. so they were phasing it out before what they thought would be a series of rules. i happen to be pro utilities. they have to have a balancing act. you can't just make it so that people who have no means get electric bills that are super high. you can't have it be a big part of disposable income. >> icahn, if the small and

merchant refineries start shutting down, it will jeopardize the economy and national security alike. the trump administration with new leadership at the epa should move quickly next year to reform the biofuels mandate and forestall the crisis. >> that's just a papered over trade that has gone wrong. it is an act that is wrong. >> 2005 when you read his editorial. >> he's totally right. >> regulation from 2005 that allows others to create them and ones who don't have them, buy them. the biofuels -- >> he's so right on that. that was such a good, well articulated argument. everyone who's followed -- now, people have investments in these companies. but this is entirely like a cap and trade program gone completely wrong. i cannot believe that president obama didn't get involved in this, but it's small potatoes in terms of the larger world. yeah, this is a system that failed. and small refineries are paying

way too much. it's a big subsidy for other refineries. it's ridiculous. i wish it didn't take icahn to get there. but he's dead right. that is just a factual set of arguments he puts out that are very cogent. very good piece. >> a good read today. when we come back, we might see dow 19k and s&p 2200 this morning. we need 43.2 points to get 19,000 on the dow. take a look at the premarket, looks like we might get there at the open. more "squawk on the street" in a moment. alpha seems more elusive today. is it because so many go after it the same way? chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential

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amazon reportedly exploring a premium sports package with prime membership. according to the journal, the company has held talks with major league bail, the nba, the nfl, and mls for live game rights. a lot of these rights are locked up for years, but you've got to start somewhere, jim. >> you know, it's funny. i dealt with some of the people in sports two years ago around the super bowl time, happened to be on a panel with a lot of the guys who were in charge of sports for the major networks. all they said was we've got to do these ten-year deals. why? because google is going to come in. they were worried about google, alphabet. they said it's only a matter of time before alphabet does this preemptive, look, you're paying x but we want all the games

international and will intrude. it turned out they were right about that idea but the wrong company. >> we talk so often about the crumbling of the so-called bundle, the bundle of programming that you buy as a consumer of cable news, including this very channel. and that sports is really what holds that bundle together. as you point out, these contracts are long-term in nature but we guys are in the midst now of significant and i would argue seminal change in the way people access tv. the internet is now tv. tv is becoming the internet. and whoen you have directv now, which launches i think next week, 100 channels at $35. some say you can't get the broadcast networks. last time i looked you can still put up an antenna and get the broadcast networks. hulu is coming out with their package before not too soon. >> just put that up. >> you're like al franken right now. >> my parents are like, did

you -- who pulled the -- jimmy, did you move over the thing? >> just think about if you have a netflix subscription, an amazon subscription, you get an over the top package, what more do you need if you're going to be able to get some sports or can get the broadcast networks in some fashion through your antenna, if it's possible. maybe that's somewhat naive and in an urban area it gets tougher. this change is happening and everybody is paying very close attention. the time warner/at&t deal of course also is a key and we are going to see real change, i think, in the next 18 months in terms of at least responses strategically from a lot of companies. >> okay. then what does it say about who's currently buying and whether they should now be prepared and will have to pay much more because of a deep pocketed player like amazon can go make a deal. >> that's a great question. >> if you were time warner, you might want to sell out. >> you might want to sell at this point or will you see more

integration. more integration of once again back to distribution and content the way we've seen with time warner of course and at&t. >> if you were cbs maybe you'd want to tie up with a movie theater. >> with a viacom and then something. but if you're a charter do you want to own content? if you are a comcast, which you already have a lot, do you want more? it's going to be fascinating. >> amazon has got a lot of money and they play with wamp 'em. they have a lot of money. why don't they just bid for the nfl? >> would you really want all that? >> no, i don't like the cleveland browns. right? the jags is all yours, small market. keep the big market players. >> when we come back, i'll get cramer's mad dash, count down to the opening bell and take a look at the premarket on this tuesday. more "squawk on the street" in a minute.

♪ we've gaot a mad dash. tuesday, that's the day. thanksgiving is in two days. >> yes, it is. >> it's getting cold outside. >> and isn't that interesting? because the old burlington coat factory which morphed into burlington once again more like tgx which had a great number. so this is a trifecta of companies that discount. burlington, tjx and ross. and, david, i was looking for roughly 34 cents.

it came in at 51 cents, comparable store sales well in excess of what the street was looking for. just an extraordinary story because they were private equity turned. not unlike dollar general. dollar tree reported great number this morning. so we're seeing some -- this is not a surprise. burlington has delivered. what did surprise was the stock had run so much, people thought it would sell off. no. and this is just a remarkably well-run retailer. i don't know if you've been to yours lately, it looks much better than it used to. >> so retail still can win. >> not only can it win but some of these stand-alone stores like burlington and best buy, very, very good. it's been a very good season for retail. very good. and we are on the cusp of buying season. >> all right. speaking of buying and selling, we're going to have the opening bell in just a few minutes from now.

you're watching cnbc's "squawk on the street" live from the financial capital of the

world. the opening bell in two and a half minutes. a day after all four indices have intra day and closing highs. the last time we got that, december 31st of '99. >> and a lot of the people i talk to who are market historians are continuing to compare this period to what was about let's say 38 days before we hit a high of record proportions. i come back and say it's the makeup. it's the companies that are doing quite well. when you look at where alphabet was on a market multiple yesterday before it took off, it was below coal gate, equal to clorox. this is not the way it was in 1999. cisco was not the most valuable company back then. cisco was not a high dividend-paying company with slow growth, it was a fast growth company with no prospect of dividend. so we can decide that amazon and tesla are out of bounds, but

facebook announces a $6 billion buyback. why? because their stock goes down to a point where actually on 2018 numbers irz not expensive. so i don't want to compare those two other than the fact they happen to be calendar dates. >> somebody pointed out the buyback from facebook is the same amount of capital they raised in the entire ipo. >> it's an extremely lucrative company. i really felt that this idea that the metrics -- remember, they have 200 metrics. some of them were off. this is a company when you speak to ceos, when they try to figure out how to get to people, they just go right to facebook. like how did you get those new customers? >> it's a monster. financially too. take a look at that last quarter. their growth rate, their free cash flow generation, it's staggering. you've made the argument and others agree that the multiple is still low given that growth rate. >> do you know what invisiline is?

the braces? i was thinking about getting them. >> no, no, on your show, didn't you have the guy on? >> yes. they are direct -- where's their advertisement? facebook, instagram, snapchat. that's where they advertise. align technology. they want to go direct to the consumers, they go right to where our kids are. it's incredible how powerful that is to go to teenagers and say you need our braces. >> both my kids went the traditional route. >> that was a shame. >> not really. you've got to take those things off and put them back on every day. >> so you like a mechanical screw of metal things that cut into your lips. >> my kids are tough, man. they don't mind. >> well, that's just great. >> toughening them up, you know. >> you better beat them until the morale improves. >> who knew this guy was such a spokesman for invisiline. >> i'm jim cramer, you might have seen me on shows like

"squawk on the street" and "mad money." let's get the opening bell. ishares by blackrock. at the nasdaq, ituran, provider of stolen vehicle recovery and tracking services. dollar's worth mentioning, jim. this thing is not coming in. >> it's amazing how people don't care. see, they don't care. they don't want to buy some of the packaged good stocks. some of the drug companies. but when you see numbers like i just saw on analog devices, what a quarter. this is before they even finish the merger with linear technologies, adi. take a look at that, that's a traditional analog semi conductor company putting up a fantastic number. these are incredible numbers. >> did you see the giant bull coming at us there? >> no. you like that, the graphic? >> 19,000. >> that's virtual reality. that's a machine learning, figured out that there's a bull. i urge people to go over some of these quarters, and don't take

your cue from palo alto, take your cue from some of these other companies that are reporting, yes, like cracker barrel. the last time i went cracker barrel, i had a piece of apple pie with a giant scoop of vanilla ice cream when i was weighing in at 210. nothing like it in order to make weight for ultimate fight club. i was in the senior division. >> were you? >> yeah, ultimate fight club. >> i see on social media the hats are at. somewhere on the floor they're wearing dow 19k hats. >> i had a 10,000 hat. >> is sentiment going to be a liability or is the chase truly on? >> i saw analog going up and burlington going up and said these guys better blow away the numbers or else they're going to get crushed. palo alto had been acting -- palo alto did say some things i didn't want to hear. jack in the box was a good quarter so they probably reverse at one point today. but we're not getting enough negative earnings during a

period of earnings. did designer shoe warehouse blow away the number? no. but the retailers have been good. david mentioned the other day about possible banking, regional banking mergers. david, i've been working on one. >> have you? >> yeah. i think it could happen. >> you do? >> yes, because it's one that has a 1.4 to book versus 1.1 to book so therefore it would be very additive. the citigroup guys, why not keep buying up to 64. i mean you just get these stories and they're all willing to talk about it as if -- i'm going to say a term and this is not politically loaded. the election is over and people feel good. in other words, i didn't say necessarily who won, i'm saying the election is over. i mean look at signet to deliver something that was quizzical. >> by the way, the leading gainer right now. >> but they delivered a darn good number. look, comps minus 2 versus minus

4. 30 cents was the number. people were looking for 20. there's a huge short condition in signet. people really felt signet was going to grow up, that it was a lending company that sells jewelry and then they put up this kind of number. it is incredible. boeing names a new guy -- >> kevin mcallister. >> did you know him? i never met him. >> people are making jokes about the same character -- the name as the character in "home alone." but he ran gea aviation services. that's a big job. >> that's a big job. at boeing people have been concerned making the planes is a problem. you bring that guy in and it's good. yes, you'll see the companies that do cyber security under pressure today. but you've got to live -- you have medtronic report a bad number and that was largely involved with diabetes. >> right. >> but you just aren't getting enough negative numbers to turn this company down. in terms of pieces that got

people upset yesterday, that notion that apple wasn't courageous. >> oh, yes. >> the oppenheimer note. >> that was not well received at apple. do you know that? >> i would imagine it wasn't. that's a long time. >> ten years, how do you pick that out? a ten year rebuilding year? even the 76ers didn't need ten years to turn around. they won last night. >> they have won three games so far this year? >> they have won three games. hey, that's something to build off of. >> that is something to build off of. jim, you did breeze past medtronic quickly with just that aside about diabetes, but the stock is down 7%. we're talking about a $115 billion market cap company. so the market cap is pretty significant in terms of dollar terms on medtronic. >> i see your medtronic and raise you a -- >> the deal has inverted. >> there was something i always find disconcerting in the

release of medtronic. they said this is always a bummer when you see this. they say our revenue is disappointing. when they use that term "disappointing," i feel disappointed. if they're disappointed, i'm disappointed. >> they didn't use suboptimal. >> no, they didn't use suboptimal. >> they, of course, inverted to take advantage of a lower tax rate, also be able to capture their foreign cash. so much of that potentially goes off the table if you get changes in corporate tax -- if you can get corporate tax reform. not just the repatriation we talk so often about but the lower rates themselves. has that been discounted now in the marketplace in terms of have we seen what i guess you could argue you're going to have higher earnings so multiples conceivably have been coming down. >> it's case by case. like j & j has seen no market expansion and pfizer hasn't. but that group has been in the doldrums and i think part of that is because the currency is so bad for them that it's making

up -- you know, money that would go to them is going instead to bb & t and pnc financial. >> and there are companies that never seem to pay the actual rate, right? >> you try to figure out the actual rate? >> yeah. the effective. >> it's very difficult. >> it seems to usually be in the 20s, not 35 or whatever the top is. >> i think it's worth point out that we have had a real decline in the package goods stores, the foods. until today. campbell's soup reported a good number. >> i was just going to ask you about that. >> it was a good number. they beat the number. the last quarter was subpar. a number have been subpar. >> you're talking 6 and 8% declines. >> i have a fondness for what campbell is trying to do, which is to become more natural and organic. they said we're a quarter or two away and we're going to do it. this was a very, very good quarter. the stock had been down a lot but it's up almost 10% for the year so that's a nice win.

hormel doing well in everything but the specialties. spam had a great quarter. i remember when we were looking for a home in the 1950s and my parents had to have a fallout shelter. that turned out to be a luxury like a home theater. but skippy was very strong and j jennie o turkey was good. so it's great to see a reversal in a group that had been hammered. >> you don't think it implies a rotation back into names that were staples? >> i think it's a rotation back into companies like dollar tree and dollar general that had missed the quarter and then people had decided they're done and it turns out they weren't done. go over that dollar tree. dollar tree had been saying as well as dollar general, look out, walmart is back and it's bigger than ever. well, dollar tree is able to do

the number even with walmart, so there's a forgiveness trade going on today. okay, we forgot that dollar tree screwed up. yeah, let's give campbell's the benefit of the doubt. and spam is not so bad if you put it on the right kind of crackers. look, you put it on cheese and it doesn't do any good but you can spruce up spam on the right -- like maybe some old london melba toast. that's a step up. when you serve spam, david, what do they put it on? >> i don't think i've ever had it. >> i used to live on spam juice when i lived in my car, which is by the way filled with protein. >> very popular in hawaii. >> i'm going to hawaii. >> really? >> yeah, really. more than pineapple? they make mai tais with it? i'll have a spam mai tai and hold some of the sugar. >> cramer in hawaii. >> i never put jim and spam together. let's get to i think dominic chu talking about where things are

moving on the floor. good morning, dom. >> good morning, carl. yes, when it comes to things moving down here, every trader i've spoken to this morning has said dow 19k is what they're keeping an eye on. otherwise we'll see if volumes can match up across those high levels. to start the day off, we are seeing a little weakness where we have seen it in the past, in places like utilities. also this morning in health care as well. so on the sector side of things, we are seeing a little bit of movement on the weak side there, at least dragging things down. telecom, consumer discretionary and real estate among some of the outperformers so a very mixed bag. you can't just say it's the interest rate sensitives going down or the cyclicals that are going up. so far in trade early at least we're seeing a bit of a mixed picture there. we are taking some at least positive efforts coming out of what's happening in europe for the time being. we are seeing some movements higher in all of the major forces there. the german dax up, france, ftse,

italy, spain all showing real signs of strength in trading over there so at least we're seeing a little carry-through from our record highs yesterday. one other place to watch, the russell 2000 small cap index, we do know it's been 12 days of small gains. we're working on number 13. it is not moving as highly as maybe some would want as a leading indicator for some of the overall markets, but that trump trade, the u.s. focused companies not as affected by the strength of the u.s. dollar certainly a focus there. one other thing i'd mention and this is something you guys were just chatting about, the idea there's been this rotation back into certain value-oriented names, one of the things we're watching pretty closely is the outperformance this year of the russell 1000 large cap value index versus the growth index, a theme that's been carrying on ever since the elections when many of these tech companies that are momentum names have been underperforming, some of the industrial counterparts in other indices. something to watch there. back over to you. >> dom chu on the floor.

let's get to the bond pits as well and check in with rick santelli at the cme group in chicago. good morning, rick. >> good morning. well, it's a fascinating day. if you look at a one week of our ten-year, you can see we're holding at the top of a range and the range basically goes back to july of last year. but bund deals are not looking anything like ours. look at a one week of bunds and they're moving lower. let's look at november, a month. why is this significant? because relative value trade is now dead. u.s. interest rates are firm, probably going to get firmer. if we look at tens minus bunds, you can see that this spread has widened dramatically, dramatically. another interesting dynamic going on is if you look at ten-year minus two-year, it's been flattening recently. now, forget what historically steepening and flattening means. all those rules don't apply anymore, whether it's fed, whether it's central banks globally, whether it's how

traders have treated ultra low interest rates. the long and short of it is the flattening of plalate is due to two-year notes moving higher. now, finally let's look at the dollar index. as i look up, it's virtually unchanged. it's trading slightly over 1. 1.so1 -- 101. the dynamic of higher interest rates is playing into the dollar and the dynamic of higher rates in the u.s. is putting much pressure in various areas of europe, although the latest drop in yields in europe is collateral damage, so to speak. short collateral, meaning everybody is scrambling to get the perceived best credit, which are of course the sovereigns and they're in roughly short supply. think of the quantitative easing going on in europe and japan. carl and the gang action back to you. >> we'll see you in a little bit. meanwhile dow 19,000 is official. meanwhile the russell is working on its 13th straight win.

if it can do that, that would be the longest streak for the russell in 20 years. i've got a lot to watch today. we'll be back in a minute. ♪ ♪ ♪ is it a force of nature? or a sales event? the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event. (bing) i've got a nice long life ahead. big plans.

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take a look at the dow this morning. obviously hovering just below 19,000. interesting look at the performance of components, jim. since 18k, unh the top performing dow stock followed by mcdonald's. worst, uxp and walmart. >> the other guys in the exchanges may go the way the whatever. mcdonald's was an overreaction to the downside. but that's -- it's a quizzical group. >> well, you've got the big lawsuit obviously of the u.s. government against anthem/cigna deal which is ongoing, add hu hugh --humana is going to

join. it's not a much a full repeal of the aca as it's going to be a redo. some believe you'll end up with medicaid just taking on a lot of it, jim. when you talk to the likes of the unh. >> and they're not going to get rid of the pre-existing. >> right. >> but i just think that mcdonald's is a bounceback trade. mcdonald's, by the way, this fast food business, people forget that that -- breakfast all day really, really hurt the industry and now the industry is starting to come back from it. could you see wendy's hit a 52-week high yesterday. they're finally recovering from the all huff d-day breakfast. watch these semi conductors. they're really on fire, like no other group. >> again, an ongoing supply chain story, right? >> yes. >> you're not seeing step functions and demand. >> no. actually the companies that have

seen actual revenue growth you're going to revert to f.a.n.g. and then invidia has. they make chips for machine learning and for artificial intelligence. basically for simulations. >> did you notice yesterday microsoft, the news about quantum computer, they're trying to -- they're moving heavily into making an investment in quantum computing? which is a theoretical exercise until recently? >> some of the people i know said they're just throwing their money around with that. but there's a big schism with microsoft and whether they have returned to the ways of baumer. >> why would they? >> because it was a deutsche bank presentation by one of the people who works for nudella talking about how to use linkedin. it's being used against them in the european --

>> oh, in that way. i thought you meant making really stupid sgleedeals. >> oh, no, no. that gives me a segue to making a major correction. the sixers have won four basketball games. how is baumer, has he brought in nokia yet? has he brought in the surface? . belichick doesn't like the surface. sometimes i wish i was from boston. i could like him so easy. but it wasn't for a long time with the red sox. >> no interceptions yet. meanwhile markets of course close to that record high. we'll get stop trading in a moment with jim. "squawk on the street" will be right back. oh caroline. so corporate put you up in a roadside motel. but with directv from at&t, you can download then binge watch your dvr'd shows from anywhere. that makes you more powerful than whatever it is you just stepped in.

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♪ it's time for cramer and stop trading. >> keep track of the strong dollar stocks, they are going down for health care and devise. goldman really puts a stake into

the fire eye take overstory here. if you go over the very disconcerting palo alto conference call, you see why you don't want to own fireeye. and then tyson went down the most. jpmorgan removes it from the focus list and says too much commodity exposure. but that's probably the talk to watch because you've got hormel saying a little better things and campbell saying a little better things. has tyson overreacted? i don't know. but if you get a move in the supermarket, buy general mills. that's the one that has been determined to try to get things right. it's come down a great deal and it's a fantastic company. >> on fireeye, part of trump's video talked about a cyber attack plan with dod. >> fire eye is kind of known as someone you bring in after. if you bring in -- if you talk about cyber arc, which is a fabulous company, they won't

confirm if it's a department of defense contract, they believe that the bad guys are already inside, that it's too late, and all you're trying to do is ferret out the bad guys. palo alto is soup to nuts and going up against big companies like cisco. what you really want to do is you presume bad guys in, let's find the bad guys. that is proof point for e-mail and cyber arc for what's known as the master key inside. so those are the two differentiated from palo alto, differentiated from fire eye in particular. so don't -- stop it with the buy fire eye. that's a no go. go after the high quality ones, don't speculate on the takeout ones. i cannot believe how good this analog device is before the linear tech deal closed. wait until you see when they close the ab net section. >> as you pointed out, device makers, medtronic leading them. but james day down a little over a buck, concerned about device

makers, given the medtronic quarter. >> zimmer is -- i've got to tell you that that was -- the medtronic took my breath away, because i did not expect that they were going to have a slowdown there. they claimed it was some sort of fda approval misdirection time. but i say this is a reality for industrials, it's a reality for aggressive technology, it's a reality for the banks. that's the keys to this market. >> jim, how are you going to handle this tonight? >> i have one of my favorite people. i cannot believe we managed to book her, thank you to heather gaines. this is going to be one of the most exciting, carol tome. i've got yuval, very controversial. but carol tome, i'm going to have her on for two segments because i think she is the best cfo in the world. she is the person they go to at home depot to decide what people want. she is a demographic specialist. she understands america better than anyone else in the world and i am so thrilled that she's

coming on and she's a gardener like me. we're not power gardeners, we're zen gardens. when i get in there, it is -- >> it is so large you can get lost in that thing. >> that's why jefferson had a garden because i often felt with malice towards all -- wait a second. >> jefferson brought us the tomato, right? >> he didn't bring us the german johnsons. i have the biggest german johnsons ever. >> that's a form of tomato. >> thanks for that. >> jim, we'll see you tonight, 6:00 p.m. eastern time. when we come back, more on this day of milestones for stocks with the dow just a shade below 19k, don't go away.

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♪ good tuesday morning, welcome to "squawk on the street." i'm carl quintanilla with sara eisen who's back, david faber. the dow cracks 19k, the s&p cracks 2200 as the rally continues now following the election. oil is really the only thing

that was not participating in a large way but has managed to find its way back above 48, as hopes for that opec production cut remain intact. amazing day. amazing day for commodities, for equities, for the dollar. people are now comparing the dividend on the s&p at 2-1 versus the ten-year at 2-3. >> the trump trade is back on. i can't believe i missed ten straight days of the dollar shooting up to a 13-year high. always seems to happen when i'm gone. >> we were thinking of you, sara, every time we saw a new high and the euro coming close to parity, backed off a little bit. >> about 106 or so. and you really see the move higher on the dollar along with yields higher, all predicated on this idea that we're going to get inflation and we're going to get growth. there's a lot of optimism baked in. when you look at a package of corporate tax cuts, rolling back some regulation and big infrastructure spend, that's bullish for a lot of parts of this market. the question is do the risks like trade offset that.

>> that is a key question as we move further into the transition. we'll get a better sense when we see other appointments, but the market over these last few sessions has begun discounting those benefits you're talking about, sara. >> now we're going to get some fresh data, this one on existing hoemtz. diana joins us. >> existing home sales in october up 2% month to month to a seasonally adjusted of 5.6 million units and that is from an upwardly revised september number of 5.4 million. now we're up 5.9% year over year. the realtors are calling it an autumn revival. this is the highest annualized pace in nearly a decade since february of 2007. median home price $232,200. and that is due to very low supply and that supply is getting even lower. inventory down 4.3% year over year.

2.02 million homes for sale. that is just a 4.3 month supply. first-time buyers backing off the market a little bit at 33%, down from 34% in september. remember, these are closings in october, so deals that were essentially done in august and september and all of this happened before mortgage rates shot up post election. the realtors saying that this may put a dampening on the rest of the market for the rest of the year because mortgage rates went from 3.5% to just over 4%. they said some buyers may be forced to delay. we'll see. that's still a beat for accounto. back to you guys. >> everybody is already talking about the jump in mortgage rates. diana, thank you. as we mentioned, stocks are stealing the show. the dow hitting 19,000. record highs all around. the s&p 500, the nasdaq and the russell 2000. this has president-elect donald trump laid out his plan for the first 100 days in office. he backed off the transpacific trade partnership, that's at the top of his agenda. here's what he said in a video that was created and distributed

by the president-elect's own transition team, not an event open to the press. listen. >> on trade, i am going to issue our notification of intent to withdraw from the transpacific partnership, a potential disaster for our country. instead, we will negotiate fair bilateral trade deals that bring jobs and industry back onto american shores. >> let's weigh in on how all of this could affect the markets, the chief investment strategist from oppenheimer asset management and john sylvia from wells fargo securities. good to see you, john and john. the optimism in the markets, is it tempered at all by trump's policies and positions now on trade? no one expected tpp. both parties were against it. but he's sending a signal here. >> well, i think he's most certainly sending a signal that he's effectively at its core, he's sticking to his guns. but i think he's also tempering

things as he moves forward just by the reality of what global trade is, technology and the effects on the workforce around the world and the need to keep trade flowing fairly evenly between mexico and canada. i think we're not going to see anything as draconian as i think might have been implied from the talk during the campaign. i think the reality is treaties that will be fairer to both sides. i think in the past when we would do trade deals, we were always giving away more because we were looking for power and influence, thinking that the u.s. economy was resilient enough. but in the last 10 to 20 years, what i think we've seen is the barriers of entry have been lowered for competitors around the world via technology and so the playing field, the competitive playing field -- >> you buy into this idea. you like this idea of renegotiating the deal? >> i think it will be a good deal. i think our trade deals, and i used to love them, but when i look at them now, i can't help

but think they might be slightly anacronist anacronistic. >> so how do you factor all of that, john, into your economic outlook both in the u.s. and globally? john sylvia, sorry. >> well, i think again, when you're looking at the overall framework of policy, the markets are betting that with the tax cuts, with the infrastructure spending, with the little bit of deregulation, that is the driving force expecting further growth and i think that is certainly the basis for the market rallying going forward. with respect to tpp and specifics, it seems as if the -- an institute released a study saying while tpp might be beneficial, overall if it wasn't done, it was not catastrophic. and it seems to me that donald trump is betting that his

ability to do bilateral deals will get the u.s. economy further than doing a multi-lateral broad deal overall for the global economy. >> john stoltzfus with the dow at 19,000 and the s&p 500 breaking 2200, where does that leave us? how much of the optimism has been factored in? >> i think a considerable amount has given the fact that it's going to take years to see the fruits of a lot of what's just on the drawing board. first you have to complete the design, then implement it. you've got all kinds of execution risks. the world moves forward as you're doing this. but we've got to think that the market -- the stock market not anything near ahead of itself as the dollar we believe is ahead of itself. we also think that the bond market has been grossly oversold at this point. >> john silvia, how much of a runway does deficit spending

have before those vigilantes whom we're getting reacquainted with start to raise their voice? >> yeah, i think, carl, this is a consideration looking at the bond market. i would say enough runway to give me maybe a year, year and a half, to see how they're going to implement infrastructure spending, to what extent tax cuts do generate growth that may offset and apart some of the tax revenue cuts. so i think there is one way probably for a year, year and a half, to see how the markets are going to react and what kind of economic growth we actually get, carl. >> all right. we will see. we've got to leave it there. gentlemen, thank you. thank you for joining us. when we come back this morning, the trump transition. a handful of positions on the president-elect's cabinet still up for grabs. we'll talk to former deputy treasury secretary under former president george w. bush, robert

kimmitt. and then we'll be joined by one of the architects of obamacare. more "squawk on the street" in just a moment. stay with us. so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade

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president-elect donald trump laying out his agenda for the first 100 days in office. our eamon javers is outside trump tower with more. >> reporter: it looks like that on again, off again request new york times" meeting is on again. hope hicks e-mailed the press pool and said that that meeting

will in fact take place. there had been some tweets earlier from donald trump saying that it was canceled. "the new york times" said they were surprised to learn that based on those tweets. now, though, it looks as though that meeting is going to be on again. one new thing that we are learning this morning comes from kellyanne conway who was on msnbc talking to joe scarborough this morning and she said one of donald trump's priorities in the first 100 days is not necessarily going to be going after hillary clinton, despite all those chants of "lock her up" that we heard out on the campaign trail. here's what she had to say about that this morning. >> i think when the president-elect, who's also the head of your party now, joe, tells you before he's even inaugurated he doesn't wish to pursue these charges, it sends a very strong message, tone and content to the members. and i think hillary clinton still has to face the fact that a majority of americans don't find her to be honest or trustworthy, but if donald trump can help her heal, then perhaps that's a good thing. >> reporter: and, carl, in terms of what to expect today, i talked to hope hicks inside

trump tower just a little while ago. i asked her if we should expect any major names to be rolled out and she didn't think early this morning necessarily there would be any major news, so we'll be waiting to hear through the afternoon. we saw rudy giuliani going in earlier today, we saw kellyanne conway going in today. a number of the top campaign officials and surrogates are in there right now and we'll wait here to see if we get any developments through the afternoon, carl. >> there's been nothing but news coming out of that building, thank you so much. we continue to await trump's key picks for top cabinet posts like defense, commerce, state and treasury. and what to expect from a trump white house is former deputy u.s. treasury secretary and former undersecretary of state ambassador bob kimmitt. thoughts and reflexes so far as you've watched this transition take place? >> well, this may be a little counter the narrative, but actually i think the transition is ahead of the game, certainly

at the cabinet level. president obama rolled out his national security team on the 1st of december, 2008. jim baker and i went into the state department in 1988 on the 4th of december. so i think at the cabinet level, things are moving a pace. i think the goal is probably to get as many names out as possible. so that these people can begin their courtesy calls on the senate confirming committees during the december lame duck session. but i think right now they're ahead of the game at the top of the cabinet departments. i think what we'll have to watch is once those cabinet departments' heads are named, when will we start seeing those very important subcabinet names emerging. >> on the names that have been floated for treasury, which ones do you sound realistic, reasonable, likely, what's your preference? >> well, first of all, the only preference that matters is that of the president-elect. what i would say is there is a

range of capability reflected in the people to whom the president-elect has been talking. i think that's reflective of the breadth and depth of the treasury agenda today. it's different than when i was deputy secretary, it's different when i was general counsel to the treasury under ronald reagan. it has a very strong domestic, a very strong international, national security component. and i think the new treasury secretary is going to have to have both breadth and depth. i expect treasury to be the most consequential, the busiest of agencies both in the first 100 days and in the first year. >> why is that? >> well, let's start at the top. first of all, bank regulatory reform, whether it be dodd-frank or the consumer finance protection bureau. next down, major tax reform and, by the way, taking over the irs as the tax filing season begins. third, treasury has become an active player now in the international agenda. they are the lead on the g-7 and the g-20, which will be held

next year in italy and germany respectively. the president-elect's first time on the world stage. treasury also runs the terrorist finance program and that means they're right in the middle of iran sanctions, north korea sanctions. they also chair the committee on foreign investment in the u.s. reviewing cross-border investments with chinese investments being of particular concern these days. leading to china, treasury also chairs the security economic dialogue with china. will that continue. within two months of taking office, the president-elect with the treasury department in the lead will have to issue a new currency report on china. so again, it is an agenda with breadth, depth, it's international, it is domestic and it is immediate. >> and based on what you've heard out of president-elect trump on some of those issues, like labeling china a currency manipulator, like withdrawing from the transpacific trade partnership on day one, how

difficult is that treasury secretary's job going to be and how damaging or what do you think the repercussions will be of some of those policies? >> well, the job is always a tough one to walk into, sara. again, i was there with jim baker in the reagan years, john snow and hank paulson in the bush 43 years. it is a tough job. good news is treasury has the best ratio of responsibility to bureaucracy. it's a relatively small agency, a highly capable career service and so it's easier to hit the ground running at treasury than anywhere else. on trade, i think the president-elect has put down an excellent marker. let's judge trade agreements bilateral or multi lateral about whether they produce good american jobs. i would say that on tpp, i don't know a lot of the details. but i know one of the reasons china is not part of tpp is that the transpacific partnership has restrictions on state-owned

enterprises. the chinese don't want those restrictions. i think we need to look very carefully at the role of these behemoth state funded enterprises, if not in tpp then they're forum. the transatlantic trade investment partnership has that key word "investment" in it and investment in the u.s. produces good american jobs. i think the president has the right measure for judging these trade agreements. >> mr. ambassador, i wonder, we talk a lot about those who will fill the jobs at the top of these departments. do you have a good read on whether or not the rank and file at departments like treasury are either enthusiastic or ambivalent about serving under trump? >> carl, i think it ranges from department to department. but again, having worked in the trade treasury multiple times, i think you will find it is a highly professional, nonpartisan group. the civil servants there i think

are the best in government. any one of them by picking up the phone could get a job in the private sector, they have just dedicated themselves to public service. so i think at treasury, they are going to be the professionals that they have always been. the treasury landing team has been in touch with the treasury department, as has been the case at state, defense, the national security council. again, i don't think they'll be more warmly received anywhere in government than at treasury. and by the way, that was the same welcome that we extended to the obama team when it came in in december of 2008. >> finally, you know, the press is obsessed with these tweets about snl and the hamilton cast. today it's this madness about whether or not he's going to meet with "the new york times." how do you synthesize that when there's obviously important decisions to be made right now? >> i know there's a lot of focus on those tweets. by the way, national security is my area of expertise. what i would say is what he has

said in the national security area, some of the appointments he's has made, particularly the very strong appointment of congressman mike pompeo to the cia to me are what we should be focusing on. i understand in today's world, particularly in the social media, that there is going to be a lot of focus on these other issues. i think the people in trump tower will respond to those. what i like, though, is that the transition is picking up pace, not just in the national security area but more broadly. i think we're going to see some real movement over the next seven to ten days and then again i hope that momentum continues as we go to the subcabinet. >> mr. ambassador, it's great to have your insight. we look forward to having you back. thanks again. >> all right, thanks. happy thanksgiving to all of you. >> same to you, ambassador bob kimmitt. as we head to break, take a look at where stocks are trading at this hour. records all around. the dow is above 19,000, up about a third of a percent. s&p 500 above that 2200 level,

it's up 0.2 and the nasdaq also up. retail consumer discretionary is one of the best performing sectors. black friday and cyber monday right around the corner. we will discuss what is ahead for the retailers. winners and losers this coming holiday season. tures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. if you're on medicare, remember, the open enrollment period is here. the time to choose your medicare coverage begins october 15th and ends december 7th. so call unitedhealthcare to enroll...

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take a look at the s&p retail sector. it's in the green today helped by burlington, dollar tree and barnes & noble. heading into the busiest retail week as black friday and cyber monday are just a few days away. so what is the best retail trade? jay sola and aaron kessler join us. we're going to attack this, both bricks and mortar and online, jay. what are your expectations as we got pretty rosy guidance from the likes of target, macy's and some of the other big stores ahead of the holidays? >> sara, i think black friday should be decent. our data shows that the number of total shoppers out this weekend from thursday through sunday should increase about 1% from last year and that's a positive. looking at cyber monday, we expect an increase of 8% in thames of total people shopping

on cyber monday. so that's relatively positive for retail. >> what do you expect, aaron? i know you cover amazon which is such a huge part of how the online retailers will be doing. >> yeah, we're looking for roughly 15% e-commerce growth. that would be in line with what we've seen so far this year. amazon has been growing around 28%, we think 28 to 30% revenue growth is what we would expect for amazon for the quarter, so another strong quarter for amazon. we expect that to continue during the holiday period here. >> how much does foot traffic actually get hurt by the fact that he's expecting 15% growth online. i know you're expecting only 8, but still that's where the growth is. >> obviously foot traffic migrating online is a big issue. this year 48% of consumers will do at least part of their shopping online and that's almost double where we were ten years ago. so it's a big theme. the key for brands is to make sure they can be online and present where consumers are

shopping and that way they can manage the transition from brick and mortar to online. >> in terms of rationalizing the number of stores we need given the traffic we have -- >> for the retailers i cover very few are adding stores. many are in store closure mode. the children's place is converting from a pure north american retailer into a pure global brand. they're closing stores but starting a wholesale business and having online sales. it's been a very good stock this year. >> aaron, i saw walmart is moving up its online sale instead of cyber monday to black friday. how does that change the equation and how close are they to getting some of the business back from amazon? >> yeah, so other retailers get very competitive, free shipping offers, obviously low pricing. i think increasingly the e-commerce season has lengthened, it's not about black friday or cyber monday, it's through the whole quarter up

until christmas day so it's not just cyber monday focus. increasingly amazon is focused on prime subscriptions creating this flywheel effect where they start their searches on amazon even more than google sometimes. as long as amazon has the prime customer, that's the key for us. >> jay, you cover a lot of the stocks that we talk about, nike, under armour, some of the sporting stocks. they have had a tough year so far. a little bit of boost since the election, but is the athleisure trend over or is that a bright spot again this holiday season? >> i don't think the trend is over, i think it's slowed. but i do think the big gift-giving idea this year, the big hot category is experiences. people want to be given a gift like concert tickets or a spa day or art classes. particularly millenials want this type of gift and females so that's kind of the big trend. athleisure is still good but it's really about experiences this holiday season. >> so what does that benefit the most? who are your holiday picks? >> we like a stock called hanes

brands. men's underwear, that's a stock that's a little underappreciated by wall street. we think they'll have a solid 4q. we think that's a good pick. >> men's underwear in stockings for the holidays i guess? >> socks, i'll always take socks. >> okay, good. now we know what to get carl. that's cheap and easy. aaron, what about you, which are your biggest beneficiaries? >> yeah, so we remain positive on large cap internet names. al sean will benefit. google is also doing very well. both have sold off after the election. facebook has also sold off recently. we think well positioned for 2017 as well. >> all right, guys, good to talk to you. thanks for sharing some names. >> thank you. >> aaron kessler and jay sole. when we come back, repealing or replacing obamacare. we'll break down the president-elect's plans and talk to one of the architects of obamacare as we know it, straight ahead. what i love most

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good morning, everybody. i'm sue herera. here is your cnbc news update at this hour. the driver behind the wheel of a school bus which lost control, flipped over and wrapped around a tree has been charged with vehicular homicide and reckless driving. the accident which happened yesterday afternoon in chattanooga killed five children and injured at least 30 others. spokes people for donald trump and "the new york times" say their meeting is back on. in a tweet just now, the newspaper confirms the president-elect will meet with its journalists. earlier this morning trump had tweeted he cancelled the sitdown after the newspaper attempted to change the conditions, an allegation the "times" denies. a philadelphia man is in the hospital after opening a package that turned out to be an explosive device. city police say it was meant to injure, it was not an accident. investigators are now trying to figure out who sent it and why. and it's not even thanksgiving, but parts of the northeast are getting buried in

nearly two feet of snow. these pictures are from lorraine, new york, and show those blizzard-like conditions. it's only good if you're santa. okay, that's the news update this hour, carl, i'll sending it back down to you. >> sue, thank you so much. let's get a check on crude oil at this our. our jackie deangelis joins us this morning. hey, jackie. >> good morning to you, carl. we're bouncing around between positive and negative today but now back over $48 a barrel. the session high this morning, $49.20. so make note of that. getting closer and closer to 50. but as we cross 19,000 with the dow, energy stocks have certainly helped us get there. i just want to point out how well we've done in some of these names. as oil has climbed and also as we've seen this trump rally, remember the energy investors feel donald trump will be friendly to a lot of these stocks. so big oil doing very well. companies like exxon, chevron, bp, shell in the last month seeing straight gains across the board. oil services as well,

halliburton, baker hughes, tosoro are names that have done well. these are all names you should continue to watch. we've pointed out the pipeline names in the past as well. now, i want to point out as i said it's a two-pronged rally here because you have the trump piece of it but you also have optimism about the opec meeting next week. some traders are telling me that could certainly take us up to 50 and even past, but they do believe we're in one of these scenarios where this is by the rumor and then sell the fact because they don't believe opec is going to actually give us what we are expecting. meantime you've got a dollar index, assay sara eisen is so excited about, just around 101. at some point it's going to have to take shape in this trade so that's something to be worried about in the coming days as well. back over to you. >> jackie, good stuff. thanks so much. meanwhile the dow hits 19,000 for the first time. joining us is the director of floor operations from ubs, art

cashen, has its thanksgiving tie. it's a good seasonal reminder, art. >> well, we're always trying to stay in tune with the seasons. >> that's right. speaking of seasonality and technicals, do you buy the setup here as being ideal for going into the year end? >> well, historically the period from thanksgiving to year end has an upward bias. oddly the tuesday of thanksgiving week has a mild downward bias, so we'll see if that comes through. i'm wondering if we got to 19,000 and 2200 and going to play a little game of touch and go. i think a lot of it will depend on what crude does. if it pulls appreciably back below 48, you're going to hear from some of the technicians it has by count achieved a reversal to a level that our mutual fund, dennis gartman refers to as the

box, the retracement level that you come back into. quite often when stocks re-rally into something or commodities re-rally into something like that, you do get a pullback. so i'll be watching crude here, i'll look for a little fatigue. it was an exciting run to 19,000 and 2200 and i wouldn't be surprised now that they're overbought a little pullback. >> so it was a run on stocks, also on the dollar. the euro just dropped below 106. usually a strong dollar and higher yields stand in the way of rallies, or at least that's been over the last few years. why do the equity bulls seem to be ignoring that this time and how much longer can that last? >> well, ike they' think they'r in speculation with what's going to happen with the new administration. they're hoping to see deregulation, tax relief, and maybe some better bilateral

trade agreements. >> but we don't know the timing on that. what we do know is when the dollar strengthens, that's a big headache. we're just coming off of five straight quarters of earnings declines in part thanks to the fact that the dollar hasn't been as strong. >> no, no, but if you'll notice the group that has done the very best in the rally recently has been the russell. and that is comprised of mostly nonmulti national domestic medium-sized companies. they would benefit from all that and not suffer any difficulty if the dollar keeps moving. so we'll wait and see. i think -- i get the sense that the president-elect wants to show a lot of accomplishments. i don't think he can get a full package done until probably the summer or even the fall. but i suspect what he'll come in and do is undo many of the executive commitments that president obama did. he will either undo them or delay them. he will go back to everything

that the republican congress had passed and obama vetoed by not signing and get them re-signed so that at the end of a couple of weeks and couple of months, see, i'm an action president, that's what i do. i think the markets are reacting to some of that. >> finally on opec, how do we know if this is charlie brown and lucy and the football all over again or not? >> i've got to believe it is the football. they may even get to the meeting and say something kind, but in practice i think you'll have a lot of people bootlegging and bringing stuff back out. but for now we're probably going to have to wait for the meeting. everybody is going to talk nice going into it. and they'll try and hold it up. that's why i say let's see what they do in the pits. if wti begins to break back below 48, maybe hits the 47.5 level, it might begin to weigh on stocks. >> art, good to see you. >> my pleasure. >> art cashin joining us here.

as we go to break, take a look at shares of dollar tree. the company beats estimates, gives an upbeat earnings forecast. that's good for almost 10%, up to $90. when we come back, one of the architects of obamacare will join us. we'll get his take on the president-elect's plans for the health care act in a moment.

there is a change afoot in the market and it could be very good news for stock pickers. find out why, what it is and why it matters at tradingnation.cnbc.com. more "squawk on the street" coming up.

♪ ♪ ♪ welcome back to "squawk on the street." stocks hitting record highs but the s&p 500 health care sector bucking the trend, down nearly 1%. weighing the most are shares of patterson companies, down 19%, and hitting a fresh 52-week low. shares of medtronic also tumbling on weak quarterly

revenue for the year. health care, the sector, is down 4%. sara, back to you. >> underperformer. seema, thank you. president-elect donald trump embracing the rally cry to repeal and replace obama's signature health care reform. so what would it like like if he actually did replace obamacare? our bertha coombs has been taking a look at this question. good morning, bertha. >> for all of the talk of repealing and replacing obamacare on day one, the new president and republicans will likely tread carefully. in fact the house has asked the court to pause its lawsuit to defund those subsidies. for one road map is paul ryan's a better way plan which includes republican proposals endorsed by president-elect trump like promoting health savings accounts and allowing insurance to be sold across state lines in order to increase competition. the ryan plan and other republican plans would repeal the unpopular individual mandate

while keeping the popular prohibition on excluding people with pre-existing conditions for those who remain insured. they'd lift requirements to cover specific things like birth control and annual screenings while offering more flexible options, insurers could charge older, sicker patients more. they would get rid of the dreaded cadillac tax on very expensive health plans but would introduce a cap on what companies can deduct for their employee health care expenses. >> you needed $87 billion or that's what the cbo projected that you would have from the cadillac tax to pay for many of the provisions in the health care plan. now with congressman ryan's plan, it is essential low a way of reducing the tax level and getting more revenue. >> what about the subsidies? well, the plan by representative

tom price, who is said to be in the running for hhs secretary, would replace them with flat tax credits ranging from $1300 to $3,000, depending on your age. sara, a lot of trade-offs in what could be a whole overhaul of obamacare. >> it's a lot for the republicans to work out. bertha, thank you. for more, we are joined by one of the obamacare architects, jay engoff is the former affordable care act implementation director. he's currently based at a d.c. law firm. welcome, jay, good to see you. >> thank you, sara. just one minor correction. i'm not an obamacare architect, i'm just one of many people who worked on implementing the law. >> okay. that's fair. but you understand it and you were there and you saw it take shape. so let's just start with a simple question. is it possible for a trump administration to repeal it without replacing it? >> well, it's not impossible, but it's very, very hard.

repeal and replace obamacare was a great campaign slogan, but actually repealing and replacing obamacare is much harder. and here is why. there are two fundamental problems that the trump administration is going to have. number one, the interest groups, the doctors, the hospitals, and even the insurers, they want obamacare. obamacare -- obamacare helps the hospitals get paid, helps the doctors get paid, and even the insurers who would like to make certain changes to obamacare, they still have a law which requires people to buy their product and subsidizes people for buying their product. so none of those three big interest groups involved in the health care system, insurers, hospitals and doctors, want to get rid of obamacare. a second big problem that the trump administration is going to have is this. there are people who under obamacare like their coverage and they want to keep their coverage. is the trump administration going to say if you like your coverage, you can keep your

coverage? that's something that the obama administration had some trouble with and i think the trump administration is also going to have trouble with that. >> well, okay, that's fair. what about this idea, you said the insurers are in favor of it, though over the last year or so we've seen a number of the big insurers pull out because it's been unprofitable. is there a way for the republicans to fix that issue in whatever they replace it with? >> sure, there's a way to make the system even better for insurers, absolutely. insurers can be permitted to sell skimpier coverage, to have more pricing freedom so they can charge people more. those things would be better for the insurance company. i'd argue that they'd be worse for consumers and particularly consumers with health conditions. but sure. obamacare can be changed to make it more friendly to insurers. now, a big question is what will happen to all these subsidies that the republicans have called

bailouts with some justification under obamacare. the insurers want to keep those subsidies. will the republicans keep those subsidies? and if they do, will they continue to call them bailouts? >> jay, what about this idea that i've heard amongst some insurers that basically a lot of this is just going to move over to medicaid. is that a -- an existing program that already works. is that a reasonable idea? >> well, medicaid is an existing program that already works, but, you know, the insurers -- and so is medicare. but private insurers have started to get into the medicare business. they'd also like to get into the medicaid business. what they'd really like to do is to take the good risks for themselves and have the taxpayers fund the bad risks. let me say one thing, though, just one ray of hope in the trump -- for the trump administration, i think, is this. one thing that donald trump has been very good at is

negotiating, is dealing. and if mr. trump on behalf of the american people can drive hard bargains with drug companies which congress now prohibits medicare from doing, and also negotiate stringently with doctors and with hospitals and with durable medical equipment manufacturers and with insurers, he really might be able to drive the prices down. but what that would mean is that donald trump would have to act on behalf of the government the way that he's acted on behalf of business and that's just very difficult to do in the government. >> but what about this idea that paul ryan has laid out. bertha mentioned some of it, that they can give tax breaks for people outside of the employer-sponsored health care system to help them pay and also get rid of the individual mandate to sort of satisfy them politically. >> well, there are various ways to provide incentives to people to stay on -- to continue to have coverage. the individual mandate is one, but there are other ways to do

it. i think those are -- you know, those are reasonable. if you penalize people for dropping coverage, if you make them pay more if they drop coverage and come back into the market. i think that that's -- those are things that are worth discussing. but it's important to recognize that even the most optimistic projections of any republican proposal assume that there are going to be fewer people who are covered by insurance under that plan, under any republican plan, than the current plan. so you get back to the question, can people who like their coverage keep their coverage under the new republican plan. >> well, it could be even worse if the story line goes that millions of americans lose their insurance and can't get it back. >> no question. and especially if these are people who are sick and who could have real, real problems if they lose their coverage. obviously that's something that i don't think -- i'd like to think no one wants to see happen. >> absolutely.

well, they voted so many times to repeal it. we'll see if they can finally get their wish this time, republicans. jay, thank you. >> be careful what you wish for. >> absolutely. all right, let's send it over for john who will give us a look at what's coming up on "squawk alley." >> we're"squawk alley." john? >> we'll dive into the artificial intelligence trade, amazon, google, facebook, apple. who else is poised to be big in that area? also continuing to track this trump transition, president-elect selecting members of his cabinet and finally minted is going to join us. it's time for holiday cards. there's a technology twist. all that and more coming up on "squawk alley."

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welcome back. let's get over to rick santelli who has the santelli exchange. >> i tell you, viewers and listeners, wish you could be with us off camera, this guy is a comedian. >> let me look up at the board. 19,000, too high in the dow. ten-year no yields hovering at the highest closing yields since fourth of july, 2015, right in

that area. why do you think the post election markets have done what they've done and how much, actually, was afoot before the election results came out? >> so many people were wrong and therefore were wrong-footed. >> brexit would be the biggest the day after the election. >> we put together different scenarios, whether hillary won, which was the high probability and the way congress would break down. we had trump scenarios, too. everybody had trump so they were wrong. i think part of this reaction is, well, you know, they're trying to figure it out. but my attitude was if hillary won, i was selling the reality that was going to take place. first of all, because a lot of people would have been selling, going at the end of the year to take the long-term capital gains that they've attained. i think those people are gone from the market. then all these people who are trying to chase this -- >> running to catch up? >> absolutely. >> in term of interest rates i'm a firm believer we talked many

times. many santelli exchanges about the rise in rates before the election results. no doubt that growth is part of the reason we're seeing these yields move higher, along with the fed. you said something i considered heresy regarding the fed. >> fed has want ed inflation. this rally is telling them you're going to get inflation. the question nobody asks is why do they want inflation? it will eradicate a lot of heavy debt load i hear people say this is like reagan. >> trump is a moderate democrat which might be considered a right conservative by. >> probably as liberal as richard nixon was when it came to social things. people will find that out. that's beside the point. there will be inflation. fed should be relishing this. that will relieve a heavy debt load on the books. ronald reagan came into office it was 5.2 trillion, the total debt load, private and public. we're sitting at 62.5.

this rise in rates won't help that situation. if the fed starts aggressive, they're going to compound the problem. they want inflation. why? >> it's an interesting argument. we're out of time but main street would be unhappy that way. big debt middle class top 1%. >> wait, can we talk -- >> real quick, who for treasury secretary? >> sheila bair. >> i think you guys could go all hour. thank you, rick. >> when we return, key developments for food and beverage companies, offering clues about the u.s. consumer. that's next.

welcome back to "squawk on the street." a deal to buy privately held brands for $1.7 billion. if you haven't heard of it, maker of antioxidant infused beverages, fast-growing organic beverages. the stock of dr. pepper is up 1.50%. in the consumer space, cohormel.

they issued a pretty upbeat forecast for 2017 fiscal year and announced the sale of its farmer john unit to cisco foods. spam is going strong. that does it for "squawk on the street." dow is trading just below that key 19,000 level we hit earlier. back to you, carl. >> thank you so much. at amazon headquarters out west it's 9:8:00 am out west an it's 11:00 am on wall street. "squawk alley" is live.