about doing what he says he's going to do, especially now. >> well, it's good to finally have you now it's safe to go back out there. >> the water, right? real le i'm delighted to come back and see my old friends. >> thank you. >> thank you. in the meantime, make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. futures holding in after wednesday's monster rally that took the dow, s&p, transports and russell to new highs. lots to work with today including the ecb extending qe with a taper, some whipsaw action in the euro this morning. claims below 300 k for the 92nd

week. road map begins with one month since the election the rally rolls on. too late to get in, or is dow 20 k around the corner. >> plus american carrier back in the jobs, president-elect goes after a union leader in indiana. and plenty of stock movers to get to including lululemon, shares surging on better than expected results. first up, stocks looking to hit more milestones during this trump rally a. ten-point gain in the dow would give blue chips new intraday high. transports coming off their first record high in about two years. and last night on "mad money" southwest's gary kelly told jim the airline has seen stronger business momentum since the election. >> we strengthened throughout november, had an all-time record -- >> week-to-week? >> yeah. absolutely. >> so linear positive? >> especially we could tell after election. >> so now 46 above the january

low, but it wasn't just transports. it was rotation into tech, jim. i wondered what all this means. >> i know numbers are too low in the airlines, which is amazing because the price-to-earnings multiples are still very, very low. that was the most bullish -- i've had gary on a bunch of times. this is the most bullish i've ever heard him and that's because the 7% number in november is really interesting. i've seen time and again people saying the last four weeks of november strongest in a very long time for a lot of industries. don't forget the rails won't quit. the rails won't quit because we are beginning to recognize that the big utilities will not have to phase out coal plants as quickly as we thought. especially with the new energy protection agency pick yesterday. >> scott pruitt. >> i meant environmental protection. i get that confused. not energy protection. just catching to see if you were listening. >> i was out of this ear. i was focused on one other thing. yeah, there's clearly that pick is going to be very -- as you say, he's opposed virtually everything the epa has done.

>> true. >> now he's going to run it. >> let's put numbers on it. what does it mean? utility stocks, now, we have rates are up today, utility stocks have spent billions retro fitting. and all the coal plants built 40 years ago when jimmy carter said we should be the saudi arabia of coal. this may be the end of the gigantic switch. and that's spending a fortune to try to retro fit and utilities may be able to raise dividends far more than people realize. i'm using this because the ramifications of these picks are extraordinary at a time when a gary kelly comes on and says christmas is going to be strong. >> what's the old saying? personnel is policy. in this case it's looking -- i mean, the switch from a lynch to sessions at justice now pruitt at epa, elections have consequences. >> when you talk about deregulation, i got some numbers today. associated press had a story about how the dakota delay is costing energy transfer partners $83 million a month. dakota access. i'm just saying you change the regulatory people, you change

the numbers. and some numbers are going higher. just like every day you see bank of america up 22, 23 cents before we start trading. the numbers are too low when you see treasuries go -- when you see prices go down and rates go up. so we are seeing actual earnings per share, you know, being made in front of us. and taken away, by the way, when it comes to drug stocks. >> and taken away when it comes to the drug stocks. as long as we can go outside and still breathe clean air, that will be fine. >> well, i don't know about you, i carry a mask at all times. >> you do. >> i do. >> we've actually discussed that. we're aware of your surgical mask. >> what are you just a risk taker? >> i am. you should see me on my city bike weaving in and out of traffic. i really take risks. >> not with my lungs, i'll tell you that much. i see there was a fellow bishop on squawk, he delivered big time alpha with tech resources reiterated these metal stocks they can go up. there are stocks i can put numbers on and it's not just anti-stink pants and abc

pants -- >> meanwhile i talk to guys everybody's now getting out of f.a.n.g. yesterday were short covering to a certain extent because we had that rally although facebook, but is that going to continue? >> yes. >> is this rotation -- it is really significant, just keep going? >> we had amazon named pick of the year, we had another firm. >> citi takes google as top internet pick. >> but my problem with these is they're going to have really good earnings and didn't need trump. right? >> no. >> they were going to have really good earnings. i want companies with really good earnings that will be boosted by trump. >> okay. >> so numbers are dwsh the rate of change is going to be much better this little calculus term. >> but you're abandoning growth stocks that have multiples that many would argue are quite reasonab reasonable. not necessarily netflix but facebook and google certainly, or alphabet. >> but people don't want tuna and good taste, they want good taste and tuna. >> okay. >> and f.a.n.g. represents those

stocks they know are going to do numbers. i think amazon is a great stock for 2017. i thi i think netflix is going to have a terrific year. by the way the anniversary of the founding of scotch tape. >> stock upgraded today over at rbc. >> went up $4. >> so you like sort of the bargain hunting here. >> i like when i look at kcostc today, okay, costco report inflection quarter. you had to actually be on the conference call, but costco has a very big tax rate. they're paying a 34%, 35% corporate tax. can you imagine that's a wind at its back. a growth stock that the numbers go up very big in 2017 if you get tax reform versus just typical f.a.n.g. good numbers. i like facebook, i think it's great. i'm saying these are being sold. they're going to be inexpensive eventually, but i like a company that i can cut numbers -- i can raise numbers dramatically off of deregulation, off of corporate taxes, off of

repatriation. i don't really like care for the last quarter of cisco. we had chuck robbins on, ceo, but he's got $60 billion overseas, a high corporate tax rate. and i see sienna this morning coming out saying orders are better in europe. my thinking is a stock like cisco which is stalled can reignite. >> as a result of what would be significant buybacks, maybe more capital spending. >> yes. >> and some m&a. >> but that's kind of what makes cisco maybe more attractive -- my travel trust owns it. we own facebook for the trust. maybe facebook -- look, have you noticed facebook's down dramatically from reporting that great quarter? >> yes. >> that's not idle. look at union pacific how much it's up after reporting a bad quarter? >> i know. but what would you want to own for the next three years? >> three years? >> yeah, three. >> starbucks. >> okay. starbucks. >> we're going to hear some sound -- >> i cannot believe their expansion plan. howard loeft at the right time. >> that number they gave last

night 12,000. 12,000. >> and biggest problem is launch. that's a high quality problem. that's one of the reasons why kevin johnson because he can understand throughput. the biggest issue is getting people in and out of the starbucks. second biggest is how fast they can do roastrie, that's howard schultz thing. he used a term yesterday that resonated with me. he said that's the bmw 750 versus bmw 350 line or the jordans, air jordans. so when you get the roasterie going it is going to be additive to earnings. if starbucks has a five-year plan, i want to own starbucks. >> okay. so here in five years we'll check it out. we'll discuss. >> that sounds like a fine plan to me. i signed on for that period. >> something we didn't know. >> didn't realize that was public. >> aren't you supposed to tell us? >> not. it's not. but this is just us talking. >> exactly. it's just us. >> when the show comes on it's going to be radical. this is prep. you know, on the "today" show they do that 6:57 start?

>> like we've ever prepped for anything. >> steve liesman joins us for back at hq taking stock of everything the ecb has said today. >> the dollar is absolutely ripping higher on this news from the european central bank. the euro initially spiked against the dollar, and then it came right back down. and i think the overall assessment is that this is a dovish move. there it is. the 100 now back above 100. just against the euro that's really where the action is obviously back to 1.06. you can see it falling there after spiking higher than the announceme announcement. what was announced? let me go through the bullet points. qe extended to december 15th, that was expected. second, monthly qe purchase has been reduced or will be reduced in april from $80 billion to 60 billion beginning in april. that will extend through april. it's less qe but for a longer time. total sum is a bit more. rules were broadened by

purchases for the ecb. signals if this is wrong, we will do more qe if necessary. had a big spike in yields in german 10-year, italian 10-year, stocks initially up and down and up and down and u.s. stocks eventually went higher. i'm making this a dovish call but a little bit when it comes to taper one other amusing aspect to this is draghi says don't call it a taper. taper wasn't discussed. i don't know. i'm not playing that game. go from 80 to 60 i'm calling that a taper, carl. >> people were lamenting back in the tapering tightening. >> yeah. we've been there. see that, we've been there already. >> one thing, steve, has draghi addressed the notion that europe could benefit from inflation that is state side based? >> he did not. but he was asked -- thanks for reminding me, carl, about new policies from the administration. he said these are things that take place over the medium to long term. and he said it's too early to assess what impact they will ultimately have. and i think that probably holds

true for inflation whether or not they'll be more inflation coming from the u.s., the ecb, as the fed has said we'll deal with that when it comes. >> carl, you are dead right. look at the action in these stocks. these companies benefitting from the inflation in the carryover, finally they can refinance. they can issue all the stock they want. deutsche bank right now i will offer you 25 million shares of -- i can do 50 million shares of deutsche bank and be grabbed up quickly. all those worries about capital, gone. you know what else has gone up? >> really? >> not to mention all the exporters in europe -- >> it's time. i'm telling you we're close to conclusion with monte depashi. >> need to raise a lot of capital. >> remember the -- showed you that -- >> yes, i do. i know, there's a close similarity. usually wears a tuxedo too wherever he goes. >> wilfred frost is more of a

sean connery than -- >> yes, he is. president-elect wading back into the carrier debate tweeting that chuck jones, president of the local union that represents carrier workers in indiana, quote, has done a terrible job representing workers. no wonder companies flee country, he says. the union replying on twitter, chuck is a hero, not a scapegoat. you and others know about carrier because of his members' tireless work since day one to save all jobs there. chuck jones will join us later this morning on "squawk on the street." another example of you speak out against the president-elect, you will get called out publicly. >> yeah, you probably have to ask chuck jones about what the absentee rate is on the various -- i would ask that on the various shifts. because only reason i say is because when i was up with greg hayes, he said that the mexican absentee rate is about 1%. i asked him why would you want to move jobs to mexico, he said the absentee rate is 1%. that might be an issue. >> yeah, turnover. >> and something else has come

up in this debate, which is -- again, numbers are so small when you look at the totality of what we're talking about, but within this how many jobs are really being saved? i remember when i was reporting on the story prior to it being made public trying to understand and it'd been very difficult to do that. during your interview hayes introduced some ideas of further automation that could lead to job losses. >> thank you. see, you just nailed that part of that interview that i thought was really subtle. the absentee and automation were the two big issues because they're going to have to automate to stay competitive. which may mean job loss. look at that whitney factory making the turbo fan, they used to have seven, eight times the number of people working there just a few years ago. >> right. >> because of automation. >> we've made this point many times, you win the battle, lose the war. automation is going to destroy an awful lot of jobs from here until you pick your date. it's only going to pick up. >> no, look, this is real. this is real. it's your iphone, it's the automation. they have to be competitive. everyone else is adopting the

automation. you know what the only industry doesn't have a lot of automation? pipelines. going to be making a lot of pipelines in the country. need natural gas to go to texas to be able to export it to the rest of the world. that's probably the biggest job creator in the next five. >> i hear when it comes to natural gas in texas there's an opportunity in '18 from somewhere closer down there that natural gas is going to be coming. >> louisiana and oklahoma. >> yeah. >> we have a deficit of natural gas in texas now because we have to be able to ship it to the rest of the world including mexico, which frankly has done very little to be able to drill. this is the biggest job creator in the world. i shouldn't say that because china has the eighth army building bridges. >> you made news today. you made news that your five-year pick at starbucks and pipelines will be the key job creator. >> yes, they will, like they were in the '30s. >> jim, permian associated gas production going from 7 bcp per day today to 12 plus by 2018, '19, isn't that going to replace the northeast and therefore not need those pipelines? >> no, more shale in utica coming down to reverse pipeline,

pennsylvania and ohio, reverse pipeline to make up for the deficit of what sha near is going to be exporting. >> also could contribute. >> have to reopen eagleford because been a little low in pricing. you have to recognize as much as permian's producing, that is not enough to feed the world of natural gas. we are sending it by pipe to mexico and we are exporting it. the biggest actual project in the country other than apple headquarters is to be able to take our natural gas to send around the world. but we need more pipe. we do not have enough pipe coming from the permian, which is by the way the second largest oil and gas field in the world after the saudi field. i rest my case. >> you get the last word. >> absolutely. prosecution rests. when we come back, a big morning for lulu as the stock surges on earnings today. also ahead, former dallas fed president richard fisher on yellen, trump and what's at stake for the economy. dow's up 18 of 22.

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lululemon surging in the premarket. the retailer upbeat guidance with higher than expected gross margins. stay tuned for sara eisen's exclusive with the ceo. we got a buyback, at least two upgrades on lulu today, jim. >> yeah, went from a sell to a buy. i thought the most salient thing other than the fact gross margins going up is terrific in different products is shanghai movement. reminds me of the inflection move from under armour from 2013 they moved aggressively in china and stock doubled. i think people are, quote, a lot short because felt same store sales would be down instead of up. i like this quote from laurent, i think it's important to -- from the athleisure trend and how people want to live their life. i think lulu is a metaphor for hour people want to live their life. there'd been a out of athleisure

into denim and it's a false premise. what it really is as laurent told me in the interview is it's a lifestyle. lululemon is a lifestyle. and my bill for my wife will prove to you it's a lifestyle. >> in other words, not a fashion trend that changes by season? >> exactly. now, i knew that he had me when he used the term mindfulness. he said it's about mindfulness. there was a time when i would have said it's about eps. but i am schooled enough by my kids to know mindfulness is millennial and gen-x eps. >> mindfulness, i'm still grappling with that concept. there are words that come up and you're like i never really heard that before and now everybody's using it. >> when you meditate you're in the now, david. >> okay. >> you want my chimes meditation or rain meditation? >> i would like to watch you meditate. >> i meditate at the maul. >> i don't believe it happens. >> i meditate between shopping between stores, except for sears and kmart. >> obviously it is a big deal. >> we haven't really mentioned

what i call -- what they call at home depot the donor. sears is a charity donor. >> yeah, we're going to get to shld in a few moments. we'll get cramer's mad dash, one more look at the premarket before we kick off this thursday. more "squawk on the street" from the nyse straight ahead.

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sometimes the songs crack me up. i don't know about you. we got a mad dash. it's thursday. and you want to talk about scott's miracle grow? >> the upgrade of the year, happened in the last month of the year. this is a sell to buy upgrade, why at bank of america? not your dad's grass company. what does that mean? they have a division, it's like plastics in the graduate, it is a division, david, that allows you to be able to grow cannabis. it's called hydroponics, hydroponics, allow you to grow cannabis. >> so grass is really grass now. >> yeah, they think the legal marijuana user base has doubled, the guide is conservative. this is going to be the biggest thing that has ever happened to scott's miracle grow. >> read that to me again? it's for hydroponic pot? >> hydroponics because that's what you need to grow marijuana, david. >> so they're going to give you the soil? >> it's only right now very small percentage of the business. but i have to tell you when i

was out visiting my daughter recently in oregon, she is near the jackson pinot noir fields, legendary, david, they are being plowed under. the grapes are being plowed under for marijuana. i am telling you this is a brilliant upgrade. sell to buy, everyone must get this. this grass has room to grow. ba-dum-dum. >> does anybody call it grass anymore or am i dating myself? >> i don't know. >> there are so many names for it. i like the chronic. >> you know what i'm going to do with my lawn? >> what? >> i'm going to lace it with ketamine. >> oh, god. we're going to get back to some other stocks when we come back.

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because no one knows & like at&t. you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in just over a

minute's time. coming off of that rally from yesterday. biggest since election day. the dow has not had back-to-back losses since november 4th. amazing. meanwhile, german 10-year yield highest since january on this ecb news. china exports were up for the first time since march. >> yes. >> a lot going on all around the world. >> well, look, i think you got -- those yields were all very unnaturally low as we talked about it. so they're kind of coming back to reality. there was a line in the costco conference call where the cfo said that post election there's been a big traffic improvement. he said the election week was, it was worse than a snowstorm in terms of nobody wanting to go out and buy stuff. i think this again is the inflection point of the election. no one says -- look, a lot of people are unwilling to say because of trump, but they want to say because it's over. i think that's important. much less political to say it's over than because it was trump. >> fair point. let's get to the opening bell

here. the s&p at the bottom of your screen, at the big board envision health carousel bre ceg merger. at the nasdaq, united nations development program celebrating its 50th anniversary. [ bell ringing ] so have you done sienna yet? >> european order up 20% very good even though the headline number didn't look so hot. what i like about sienna is frankly switching orders, which is what we've been looking for for that whole industry. those are the big, big orders that used to be the mainstay of what they did. so i regarded that as being very positive. some people have been upgrading juniper. so i think you've got a little bit of a tech story there that can work, old line tech. it's a compliment western digital, micro and advanced micro which have become the three mus ke ti three musketeers. >> that picked up steam

dramatically after you talked about it in the morning. >> it's a home run move. those guys have really reinvented that company. and i think micron is -- there's finally supply and demand in balan balance. for mu that stock can go much higher. so a couple areas of tech that have been really out of favor coming back in favor. and then you've got the areas of just pure internet that are kind of, you know, i don't know, you know, kind of yawns. >> so i assume earlier in the week last week you were saying this cannot be all about financials. >> thank you. >> or energy. or this is going to be limited. >> right. >> so are you beginning to feel like they're spreading the wealth in a move that will help the markets longer term? >> well, yeah, i think again you mention that -- you reference the 3m upgrade, like look, business is getting a little better. you can repatriate and cut corporate tax on those are what people are now focusing on. they're refocusing on what to buy. yesterday they decided to focus

on teleco which was an oddity. >> certainly, sprint and t-mo benefitted from that visit of masa son to trump tower a couple days back in which he discussed this $100 billion fund raising at softbank and then investing here in the states and people speculating, well, maybe it will mean that his desire to put together sprint and t-mo will prove to happen. >> wow. >> i am not -- >> you're skeptical? >> i'm somewhat skeptical. >> okay. >> i think that it's still hard to imagine four going to three given the competition that's taken place between those four wireless carriers in this country, particularly for a candidate who appealed to populism to say, okay, we're going to go 4-3, your bill may end up going up. but that said, jim, if t-mo were to consider doing something with sprint, you have to wonder whether our parent company would consider doing something for t-mo. >> that's a great point. and only you have made it. because i've read all the

research. that's a very compelling point. not been included. >> if you want to speculate on maybe you're better off buying t-mo which has been so just on the fundamentals of course so competitive and strong as opposed to buying sprint on the hopes that, you know -- by the way, it's a smaller company. and what would the germans do? so many different things. >> i think they were concerned when the stock was in the 40s that the comcast parent company would buy them. >> no indication that is the case, but no shortage of speculation on that front either that you are going to see a coming together of wireless and cable as we describe it in a more significant way than these mdnos we talk about where they get to resell and reuse some of the spectrum capacity. >> big 2017 story, i think, toward the end of 2016 amazon pushed very aggressively by cowen, stock not up. google, alphabet, made the switch that was recommended by citi, not up. this is a new world. those stocks would be gapping up

in the previous world. >> on similar upgrades. >> yes. now it's people, look, i get a chance to be able to sell those stocks. that won't last forever because companies will have good quarters. but i come back to caterpillar that said please don't buy our stock, it's well ahead. and that was the clarion call to buy. >> there was a great joke somebody joked on twitter that caterpillar's only a few more profit warnings from 100. >> come on. >> that's essentially what's happened this year. >> that's very good. that's a good routine. >> when you look at a chart of goldman over one month, or year-to-date, where -- i know you've said these numbers are too low, we don't understand the eps numbers here given new policy. when do you say enough is enough? >> i don't know. i thought it could go to 250 at one point. my travel trust owns citi, citi is at ten times earnings. i think you have to start thinking about price-to-earnings multiples. what's it doing?

>> i forget. >> it was cross selling. >> who's elizabeth warren? i don't remember that either. >> she was in butterfield 8 and national velvet. >> got it. >> that's a joke. that's a joke. did you see here in butterfield -- national velvet you knew early on. still by the way, best selling fragrant in history, diamonds, elizabeth taylor. >> really? >> no kidding. whatever happened to virginia wolfer? but i do think these are important changes in the market that goldman's got the animal spirits and doesn't have much stock to buy. first national bank of trump, again -- bank of america going to 25. and citi is still very undervalued. so i think people should recognize that there are some valuation conundrums in the bank group. goldman sachs of course best performing stock in the dow. rather amazing. when it was at 160, 170 reporting that last quarter saying, listen, we're trading at

discount to book value, so yeah. goldman, it's back, bigger than ever. golden slacks, david, how do you like that? the teailored man. >> it is. and financials have proven to be an incredibly lucrative place to be this year. >> yes. >> much of that in the last four to six weeks. >> trading's been great. >> by the way, if you invested with warren buffett this year not doing too badly either, berkshire right at a high, look at the b shares for example. many of the companies that are part of berkshire, rails and other things that basic industry will benefit. >> burlington northern. >> you hit that trump button yes, right, in "mad money"? >> i did that for you. >> i know. so what does it say? >> i think we have sound of it. >> oh, is that what it sounds like? >> it's the voice of god. >> they're going to rack it up. we'll get to it later. but you took our advice. >> tweaked it.

i ripped up the sound board, i took off the hog squeal and the star spangled -- you know, music. and put in trump, no trump. i'm not talking about bridge. >> let's hear it. this is on "mad money" last night. >> according to "time" magazine trump suggested and i quote that some stock analysts may have misread his intentions. the biotechnology stocks. >> not a trump stock. not a trump stock. not a trump stock. >> for example, which enjoy large profit margins under current law rose 9% in the day after trump's election. >> see, that is how you stay relevant there, my man. >> i didn't realize you were going for the full thing. >> not a trump stock, not a trump stock. >> then i got trump stock, trump stock. >> so berkshire hathaway. >> gtrump stock, trump stock, trump stock. >> got it. >> if companies don't adopt brent saunders' pledge to raise pricing they're going to be in the cross hairs. there will be a tweet which says i don't like the way lyrica went up in price, or i don't think

the epipen -- i'm looking for more epipens. not a trump stock. not a trump stock. not a trump stock. >> and you don't see that any different than obama calling someone a fat cat banker or demeaning las vegas post crisis, same thing? >> yeah, i think so. las vegas down 40% after that? i think that the american people voted in someone who said that there was $300 billion in drug stock savings now medicare program is only $78 billion, i don't know how you save -- but that could be like the $4 billion air force one. it's the art of the deal. it's your opening statement. >> it's your opening bid. >> it's your opening bid, david. >> most of the gids u bids on drug stocks are lower this morning again. >> well, they don't fit. they haven't taken the brent saunders pledge. they've got to do that. regeneron said the same thing and they've invented drugs. they are not salesforces. >> for those who may not know, what is the brent saunders who is the ceo of allergan pledged?

>> no double digit. just kind of just being what most people would say is reasonable if you're selling tide or proctor for non-innovation, for brand new drugs, yes. but if you're just going to make the same thing over and over again and raise the price, that's strucken -- >> have we done sld yet? >> oh, yes, sears. >> narrower than expected but fifth straight quarter of a loss. >> not an inflection point there. >> comps down 7.4. no more talk of profitability. >> i don't know what to say about that one. you know, home appliances, consumer electronics, apparel weak, what else is there? home appliance is home depot gaining from them according to the fabulous cfo. sears minus ten. still talking about monetization, david -- you know what dies hard? the notion they're going to monetize die hard. it's like die hard 7, right? remember?

>> i do. what did we end, four or five? >> there's a new one called christmas party, i think that's die hard one that's a sequal. >> $1.2 billion market value if that at this point -- >> what? >> less than $1.2 billion market value for sears. >> they have $258 million in cash versus $238 million in cash last year. i was looking for a positive. >> heading in -- i don't know. end game? end game yet? >> i don't know. i once bought tires at the sears next to the costco in neptune, and the cfo of costco called me and said that was ridiculous that i had done that. so i realized that, you know, you got to be careful if you ever buy sears over costco. >> it's right near a new 52-week low, but not quite. >> trump stock, trump stock, trump stock? >> no, sears is. >> is that a trump stock? oh, no, they don't have a corporate tax rate. >> right. >> because they make no money. >> it's true.

>> haven't for a decade. >> still haven't gotten same store sales moving in the up direction. >> you and i are going to go there and buy some shirts this weekend. >> really? >> yeah. maybe they have carhart. they have that in lou cage, one of the best netflix shows ever. >> i have some time let me know where to meet you. >> you want to shop? we're going to midtown this weekend. >> there's no sears in midtown? >> we're going to go to tiffany, harry winston and sears. which is better than kmart by the way. >> are you going to finally get me that ring? >> you know, every kiss begins with kmart. >> goldman and j.p. morgan once again leading the dow, record highs on the dow and s&p. let's get to bob pisani. >> good morning, carl. we have a mixed open here. about even on the advance/decline line. but we've had quite an extension of our rally overseas. let me show you what happened in asia. big spillover there, nikkei had a great day.

18,765, that's the highest level since january for the nikkei. we're up about 14% since the quarter began. the yen's weakened, dollar strengthened, elections help the nikkei as well. europe was up even before the draghi announcement. and it's extended again, you heard steve telling us qe extended to december, so they're extending but tapering at the same time. i guess satisfying hawks and doves, but all the european stocks are on the upside. take a look at the etf sectors here in the united states that are on the upside. looks to me like it's november again. banks as carl mentioned are the leadership group, but energy and materials is exactly what we saw in november. there's the pharmaceutical stocks, that's pjp down 0.8%, second day in a row it's been down after trump said he was going to do something about drug prices. utilities we've seen 10-year yields moving on the upside. many of the utilities and even some of the telecom stocks are weak today. again, looks like november. jim had a very good point about

costco because they saw more shoppers, traffic was up 2.2%. that's a really nice move. but take a look a little closer here. average transactions down 1.3%. huh. comps were only up 1%. so what's happening here is this deflation problem we have been talking about with many other retailers that are out there. so electronics now double digit deflation that we're seeing. we're seeing gasoline down. we're seeing food prices down overall. that's impacting the ability then to increase revenues and the average ticket prices here. so, again, great news, traffic is up for them but that deflation a big issue. good news for consumers, by the way. so it's december 8th, it's one month since the election. how's every done? take a look at the winners and losers. we've talked about this often but it's worth bearing in mind that the russell 2000 has been the big winner, banks have been a big winner and to a lesser extent industrials and materials have all been big winners in one month after the election. the losers that we've been talking about, well, it's the

same today. looks the same. utilities were down, consumer staples had been down notably, gold's been a big loser and 10-year treasuries, prices i'm talking about, treasuries, are down 4.3% overall. now, a lot of people have been saying, gee, when they open, your quarterly statement at the end of the month assuming prices, everyone's going to be happy. well, it depends on what your mix looks like. let me show you how etfs breakdown. the largest stock etf out there is the spider. that's the s&p 500. you are now up 3.8% if you would have bought it on the first of november. however, if you had a significant bond presence, the largest bond etf is the agg, this is a mix of treasuries as well as corporate bonds. so it's a mix. it's down 3.8%. so here's my point, essentially if you had a perfectly divided account, if you had $100,000 on october 1 st you put $50,000 into the spider and $50,000 into

the agg, you're essentially flat, including dividends between the two. be careful here while we've had great moves up in the stock market, we've had similar moves down in the bond market. and if you have a similar portfolio and evenly split portfolio, your gains really aren't there for this quarter. you're going to hear more about this in the next week or two as we get closer to the end of the quarter. right now the dow up 23 points. carl, back to you. >> bob, thanks so much. bob pisani. let's get to rick santelli as well at the cme group in chicago. good morning, rick. >> good morning. lots of volatility. let's start at the most beneficial sector and in my opinion that's equities. consider a lot of volatility in fx, no new extremes, lots of volatilities in rates, no new extremes, but if you look one-week of the dax it's been climbing. it started its climb in earnest yesterday. when you consider, open the chart up to early 2014, what you'll see is the dax all-time high is in the spring of 2015 at 12,374. it's currently at 11,150.

that is a one-year high. as you look at our record equities, look at the dax making up lots of ground, all the boards throughout europe equities really seem to be the beneficiary. if you look at a european two-year, yeah, we moved in a way that really is a steepening trade as they're mostly lower in yield, but really not making any new extremes. you look at a 24-hour chart of bunds, the extreme made here takes you back to the highest yields since january of 2016. we are flirting with the high yields in the neighborhood at least of july of 2015. but really it is about equities. if we go back to our two-year and look at a one-week chart, we didn't really surmount to huge moves. as a matter of fact, yields are coming off a bit. you could clearly see it in the 10s. so consider this, we're currently at 2.40, we had lots of volatility, high yield close is still 2.45 on the first of december last week. now, currencies megavolatility

for sure, look at one-week of the euro versus dollar, first direction versus the u-turn which makes sense. if you're looking at a defining route in terms of fowl language, dovish or hawkish, the euro way dollar is trading, euro is trading, it's really dovish with some asterisks. four-year chart of the euro versus dollar, this is the chart. this is the chart they're all looking at. and they made some money looking at this chart because if you recall the renzi referendum low was literally right on top of 1.05. so 1.05 is what you want to watch. and here we are 1.065, so, yes, lots of movement. no new extreme. we want to continue to monitor as our central bank is on tap for next week of course. carl, back to you. >> thank you, rick. rick santelli in chicago. still to come this morning, united steel workers local president chuck jones who had harsh words for president-elect trump and his characterization of the carrier deal will join us in the next hour. got record highs for the dow, for the s&p, for the nasdaq.

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starbucks hosted its investor day yesterday. and outgoing ceo, incoming executive chairman howard schultz joined jim last night where he outlined the company's store expansion, ceo transition and running a company in this new era. >> what we've tried to demonstrate over many years is that a great enduring company must do everything it can to share success and take care of its people and the communities we serve. i think in the world that we're living in today there's a greater responsibility on companies to ensure the fact that we balance profit with social impact. and that's the kind of message i would share with the president-elect. and i hope that he would share that. >> a lot of talk about share of gdp going from capital back to

labor. that's all part of that discussion. >> i know howard would love to sit down and talk about job creation with the president-elect because he's created a lot of what i regard as being excellent jobs that give you college degrees. and technology because of what's going on and throughput. and also talked about how he's not really concerned about china because 30,000 people, but more importantly when they go to china they meet with the moms and dads and parents of the people who work at starbucks. howard thinks that's important. my father worked for the chinese, they respected my father in his early 90, in his 80s selling, respect in this country let's say not thought of as being as productive in their life. >> yes. absolutely. >> the respect. they love my dad. at 92 my dad's big numbers. >> as we hurdle towards those ages ourselves. >> well, let's say we -- >> nice to be appreciated for our wisdom. >> we canter.

we don't hurdle. >> i'm hurdling. >> i'm taking my time. >> we'll get stop trading with jim in a moment. dow's up 25.

time for cramer and stop

trade sglg there's a stock up 250% just this year alone even more that be last year and this is a company upgraded from sell to buy, love double upgrades on bank of america, why is this? considered to be the poor man's intel when it comes to pcs and the poor man's nvidia when it comes to great graphics chips and they're saying this may be more legs than that. this is very important upgrade and i also believe they've done some great refinancing, the balance sheet is much better. if they hadn't i think they would be taken over by now. >> when will they? >> i said micron should buy them within the next year. micron needs that leg of graphic chips. and micron needs to be able to go beyond dram and flash, so, yes. i think in the interim they're creating a lot of wealth. >> we're all old enough to remember when they were clearly david to somebody else's goliath. >> there you go. >> stay alive long enough you'll

get lucky. that's how it works sometimes. >> exact. >> what's on mad tonight? >> i have ellie and two incredible company. ellie come down because of banking regulation, ollie's up on a selloff. an unbelievable guy those remember him from the sell side so to speak recall how great he was and now he's an even better operator. how many of these guys come from the critic side actually turn out to be great operators? and congratulations to bob peck on his new job by the way. >> yes. >> i got to come up with a new name. >> i'm sure he'd like the deal king. >> yeah. i like that. >> jim, we'll see you tonight. >> wow, what a show. >> "mad money" 6:00 p.m. when we come back, more on the trump rally, a month since the election. plus, the president-elect calling him out on twitter, chuck jones of the steel workers will join us live to respond when "squawk on the street" continues.

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♪ good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at the new york stock exchange. record highs once again for the dow, the s&p and the nasdaq. although all three have just dipped modestly into the red a few moments ago. financials are leading, s&p and nasdaq are working on their fifth straight gain. that would be the first since july. >> our road map begins with that trump rally. stocks settling in here at record highs. we'll discuss how high this market can actually go and more with former dallas fed president richard fisher. carrier's union president chuck jones says president-elect trump exaggerated the number of jobs he saved at carrier. trump going after him on twitter after those accusations. chuck jones will join us. plus, lululemon soaring on its earnings beat. the company also announcing a

$100 million stock buyback. how the ceo described the quarter coming up. first up, let's get to john harwood outside trump tower to talk more about the latest on the transition and this twitter fight with carrier's union president chuck jones. good morning, john. >> reporter: good morning, carl. the president-elect continues to fill out his cabinet yesterday for the environmental protection agency he selected scott pruitt, the oklahoma attorney general close to the oil and gas industry, skeptic of climate change science. for the small business administration he picked his long-time friend and wrestling executive, linda mcmahon, former republican candidate for the u.s. senate in the state of connecticut. but the most notable thing that donald trump did last night was continue his practice of using twitter as a weapon, this time targeting chuck jones, the local union leader in indiana who had questioned the extent and the impact of the carrier deal donald trump said, as you

indicated earlier, he said that donald trump had exaggerated the number of jobs saved. now, this is consistent with what donald trump did earlier in the week with boeing going after them after their chief executive had expressed doubts about donald trump's trade policies. now, so far if you look at the public opinion polls, the public is liking what donald trump is doing. he is trending up. he now has a favorable rating that exceeds his unfavorable rating. that was not the case for most of the year. look at these numbers from "the huffington post" averages, 49 to 46 in positive territory for donald trump. but there are some conservative voices beginning to raise questions about the way donald trump is approaching the practice of singling out individual companies and trying to get specific results from them, interfering with the market, george will, the conservative columnist wrote in "the washington post" today that this was the opposite of conservatism. we'll see whether he gets resistance from republicans in

congress. he has not so far. and one postscript on the cabinet discussion, we do expect secretary of state choice next week. when i asked this morning a senior trump advisor whether or not mitt romney was the leading candidate as some have indicated for this post, i got a simple one-word answer, no. we will find out the choice next week, guys. >> john harwood, thank you very much for that. outside trump tower. as we mentioned we'll be joined by the president of united steelworkers local 1999, chuck jones, in just a few moments. first up, the trump rally continuing. the markets as you saw coming off record highs a few moments ago all ahead of next week's fed meeting. getting more conversation joining us this morning richard fisher the former dallas fed president. always good to see you. welcome to post nine. >> thank you. >> thanks for joining us. we know what the president-elect has done for equities and inflation expectations and bondholde bondholders, but are you seeing

big changes in the macro forecast? >> no. we refer to black swans, i refer and my friends refer to donald trump as the orange swan. obviously based on his hair color. >> yes. >> it's kind of interesting because we had rates move up, you would expect a negative reaction in the equity markets. it's based on expectations. the business community's excited for a couple reasons. one is tax reform's a real possibility. and the other very importantly is deregulation. not just dodd/frank but everything across the board. you unshackle businesses, there's an expectation they'll be able to grow their top lines and not just be able to maneuver their bottom lines as they have for the longest time. so i think this is what we have. we have an orange swan effect. and we'll have to see. now, when ronald reagan was elected between the time he was elected and time he took office, the s&p 500 was up 8.5%. after he took office for one year we had a selloff of 20%. so the expectations, you know, it takes awhile for things to kick in. >> uh-huh. >> we'll see if this happens

here. but for business, you know, if we'd had president clinton, it would have been more of the same. and that's what i think i'm hearing when i speak to ceos around the country. >> you cited the reagan rally, but the difference there is that rates became lower throughout the reagan tenure. >> yeah, but remember they were rising for awhile. and volcker had to slam on the brakes. >> that's right. but the backdrop is totally different. we're going into potentially the first rate hike of the year next week. >> yeah. >> and a period of sustained interest rate increases. and i wonder if that kind of fed policy, higher rates, higher treasury yields is going to get in the way of this enthusiasm. >> the markets well discounted the first rate increase. i think my personal view is way behind the curve. we need several to catch up. but what really counts is what they do with the system open portfolio. there's $1.1 trillion in rollovers occurring between now and 2019. that will help shape the yield curve. it's a powerful tool.

i don't think people are paying enough attention to that. >> we had larry lindsey on this morning, he said we're drawing fuel on a fully employed economy, viewers wrote in saying what are you talking about? is he right or wrong? >> in the key demographic which is 25 to 54, which i'm not a part of, i'm too old, but we're pretty much fully employed. and where we're not employed, you'll notice whether it's the small business group or large businesses, i'm on the board of say at&t, there's a shortage. it's hard to find people with a skill sets that you need. so i would argue that we are if not fully employed certainly very, very close. but we live in a globalized world. and now of course with this we don't know what's going to happen in terms of our interaction with the rest of the world under a new president, but domestically i would say we are fully employed. >> so does that complicate efforts to bring manufacturing home at scale or do infrastructure at scale if labor's so hard to find? >> yeah. first let's put manufacturing in

perspective. it's only 12% of our economy. and the majority what we manufacture is exported. so a lot of this is, you know, you have to be careful. you don't want to cut off your nose to spite your face. manufacturing is very important to the united states, but only about 12% to 14% of our economy. the rest is service driven. remember also we consume more than we produce. which means we have to import. >> so given you laid out all the bullish cases for why the market is rallying, how do you expect us to finally break out of this sort of start, stop, lumpy, economic recovery that can't get above 2%. >> i think it's very possible because otherwise we have secular stagnation, but think of this as a businessman operating. you take off the shackles of regulation, you create a tax reform that if it's properly done incents you to expand your cap x to grow your employment base, to basically increase volume. that's what this is all about. and then i can see us if we do

it properly, if they do it properly, having some escape philosophy from this secular stagnation so many people have talked about so long. and they're trying to bump it up to 4%. whether this is doable or not, but certainly you could do it better than we have because i can tell you a small, big, large, public, private, businesses feel that they have been hampered and hemmed in by regulation and poor fiscal policy. we don't even know what taxes will be in 2017. >> right. speaking of regulation -- >> just having a fiscal policy would be nice. >> that's true. many people i think are perhaps not even as focused as they should be on the changes that will take place in the tax code and how that's going to be so important. >> this is our first chance for tax reform since ronald reagan. >> since '86. when it comes to being a board member of the at&t and as you refer to him as the orange swan. >> right. >> during the campaign he of course came out against the deal to buy time warner. yesterday the ceos were in front of the senate. what are your expectations there -- >> good try. i'll let randall stephenson

speak for the company. i don't think it's appropriate for me to -- >> everybody seems to be more optimistic though. and not really expecting anything that's going to come from those comments that took place previously. >> well, again, we're in the middle of something. i don't think it's right for a board member to comment on it and randall speaks for all of us. >> got it. >> but very good try, my friend. >> well, i have to try, richard. >> people have different views about how to discount trump's tweets. some call it white noise. some say in the absence of press conferences it's all the media has to go on. should a yellen or any fed official worry about being called out by the president on twitter? >> i think two things. first, every president -- i've worked for two, they all want to go to the public directly. roosevelt started with the radio. this man has mastered the new media, face it, that's the fact. secondly, my interpretation for what it's worth is while he's bringing about these appointments he's made and trying to figure out how to govern and move in the right direction, he has to feed red meat to his constituency. and to me that's what these twitters are. meanwhile, i know they're taking

this very seriously. he wants to be a successful president. it's going to require some moderation. >> but i think to carl's question, a deeper one is that is the fed independence and credibility at risk under this new administration? >> he'll have the chance to appoint six new governors over the next four years. there are two vacancies and then you have braynard for writing checks to the wrong candidate, viewed as being heavily partisan and wanting to move and then you have stan fischer coming up, six to ten he'll have a chance to appoint, that maybe will influence fed policy, but i hope he realizes it's important to keep central bank independence. remember, the congress left and right, bernie sanders to the congressman from east texas wanted to take away our independence and the fed, et cetera, they can't even get a budget together.

how do you expect them to manage monetary policy? it would be a disaster. >> no more gridlock now maybe. >> yeah, i know. it's very important that we all know this to have an independent central bank no matter what country you are from. >> richard, it's good to have you back. thank you for coming on. >> thank you for having me. >> richard fisher, former dallas fed. one of the stocks on the move today, lululemon, shares are soaring right now. beating on both the top and bottom lines. the company also boosted its outlook and announced a $100 million stock buyback program. look at shares up 18%. some of the highlights in this report 7% comp store sales growth, 51% plus margins and a forecast of mid single digit comp growth. that was all above wall street's expectations. i did speak exclusively last night with lululemon's ceo, laurent, he told me it was, quote, our merchandising and assortment that drove the better sales growth in the quarter. he gave a shoutout to 20% sales growth in bras as a category.

men's is also apparently working quite well. as for how the growth is set to continue here, potdevin said the holiday looked absolutely strong. record days for black friday where lulu saw 16% comps and 29% on cyber monday. he cited three major strategic goals going forward, growing internationally, growing the men's business and growing digitally. on that global growth he is inching high right now. he mentioned they had 10,000 orders from china on singles day alone. he said the biggest opportunity's right now in front of them short-term it's accessories, but he says you'll see faster growth with men's and part of it is the success of those men's pants. as for the peak athleisure which you see reflected in stocks like nike and under armour so far this year, potdevin says lifestyle is not going anywhere. this idea of healthier living and wearing more athletic clothes and if you look at the chart, say lululemon versus nike or adidas or under armour, it

sort of says it all, guys. the quote that potdevin said was, fashion brands don't have the athletic mindset. athletic brands don't have the fashion mindset. our styles are the intersection of both. and they are resonating. and if you think of that, it seems like the consumer while this athletic athleisure trend is still going on wants more of a fashion take on it and that's why you've seen the rise of adidas capturing the number two spot back in the united states and strong sales at lululemon last week. >> yeah, cramer obviously agreed this morning when he said it's not a seasonal trend. it's not about spring or fall. it is a different way of thinking about apparel. and that's what's leading a lot of this. by the way fascinating to see evercore go from a sell all the way to a buy. >> the sell side was a big part of this story. they were all negative, stock had been crushed more than 25% since the lags quarter. in august they were down beat. a retail expert contributor on twitter saying they were part of the problem here. they all were downgrading into this quarter and, bam, you saw that surprise.

and that's why you're seeing such a big reaction. >> when we come back this morning, drama in the twittersphere as united steelworkers president chuck jones accuses the president-elect of exaggerating the number of jobs he saved in that carrier deal. jones is going to join us next as we go to break take a look at the top s&p gainers since election day. a lot more still ahead. don't go away. maryuys a little lamb. one ofilons of ordon this company's servers. accessible by thsand of spliersnd eloyeglobally but wi cyber threats of spliersnd eloyeglobally on the rise, mary's data could be under attack. with the help of at&t, of spliersnd eloyeglobally on the rise, and curity tt senses and mitigas cyber threats, their itical data safer giving tm the agility to be open & secure. cause one knows & like at&t.

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donald trump taking to twitter again last night, this time to criticize the local union which represents workers at carrier in indiana. the president-elect saying chuck jones, president of united steelworkers 1999 has done a terrible job representing workers. no wonder companies flee country. the national union responded on twitter saying chuck is a hero, not a scapegoat. you and others know about carrier because of his members' tireless work since day one to save all jobs there. chuck jones joins us this morning on the phone. again, his union represents workers at both the carrier and rexnord plants in indiana. mr. jones, great to have you with us. thanks for your time. >> thank you very much for having me. >> you regret criticizing trump publicly? >> no, not at all. what i did was trying to get the people to understand that the numbers mr. trump and governor pence gave weren't accurate. and some of the statements that he made weren't accurate and i stand behind all of them. i'm not sorry about what i said. >> does it inhibit you from

calling him out on any topic from here on out? is there a silencing effect? >> no. no. it don't effect me one iota. i've been doing the work of the union for 30 some odd years and a whole lot more drastic things have happened. and i've got through them. so, no, this is not a big deal by no means. >> talk about some of the numbers behind the criticism you said when you said that he was lying -- i won't repeat exactly what you said, but what should he have said in his appearances in indiana? >> what he should have said and what they should have said when they first broke the story is that he got involved with utc and saved jobs. he should have said what they saved was 800 jobs, which is consists of 730 union jobs and another 70 management jobs. so that was the number. but what he did, he come out and

said prior to and at the carrier facility that he saved over 1,100 jobs. at that point in time we couldn't get any details, the company wouldn't share them with us and our people did not know, you know. they assumed, i would guess, that they were most likely going to have a job. okay. when we met with the company last thursday, when trump come into town, the company broke it down telling us that 800 was the total, 730 union and the other 30 that were management type jobs. well, what they were doing in february when the company made the announcement they was perfectly clear that 350 research and development jobs were going to stay in this city. that was publicly known. carrier announced that when they made the announcement on the plant closure.

then all a sudden -- excuse me. cold. then at that point in time then trump wants to count back in that he saved the 350 research and development jobs that were never leaving this country anyway. so i took exception to that because our people at that point in time got their hopes back up that they might have a job. and during his interviews -- or during his speeches at carrier he did not allude to any of that. and so people thought there was a good chance they was going to have a job to be able to provide for their families moving forward in order to find out friday when we told them, no, 550 people's jobs going to monterrey, mexico. so people had false hopes on something that i don't think was necessary for him or pence or the company to address in the way they did it. >> mr. jones, as somebody who was reporting on the story and in fact broke the story itself, i can also tell you though, utx,

i mean, he may have just been taking numbers from utx, which was using that more than 1,000, close to maybe even 1,100 number. i mean -- >> well, you know -- >> you're blaming trump, but it seems like your employer also was putting some numbers out there that ended up not being exactly right given those 350 jobs they already committed to keep. >> okay. but donald trump in his own words is a skilled negotiator. i don't know if you've ever heard that one. i've heard it numerous times. i negotiated a lot of contracts over 30 years. and one of the things that i would have to assume that when you're negotiating something like that you know how many damn jobs you're talking about. >> yeah, but chuck, why come out so publicly against him? when was the last time the u.s. president intervened? he did end up saving hundreds of jobs. you can't reverse globalization or raise wages in mexico to make it less competitive. but he did do what he was able to do and save some jobs in the process. why not applaud that? >> i've said in every interview

that i'm grateful very much for president-elect trump getting involved in saving 800 people's livelihood. you know, without his involvement these 800 jobs would not remain here in indianapolis. very grateful to that. but, you know, i want the truth to be known and that's what i said he took an exception to it. all he had to do, in my opinion, was come back and say, well, you know, i was misled by utc or maybe, you know, i shouldn't have said what i said. instead of doing that he goes on an attack on me? >> right. mr. jones, when we spoke to greg hayes, or i should say when jim cramer spoke to greg hayes, ceo of united technologies, he of course praised his workforce in indiana, but he also did say the level of absenteeism is far higher there than it would be in mexico. so to bring up this idea of productivity, how do you respond to that criticism? >> okay. i'm going to respond to it right now. the company's got the right to make reasonable rules of

conduct. in the reasonable rules of conduct is an absentee program. the carrier facility has got -- negotiated -- sorry, over there it's negotiated. we've got a negotiated agreement. if the company would have had issues with their attendance policy, we ought to sit down and work something out in order to work for both sides on attendance. that wasn't an issue on this past negotiations. and so if in fact they got a problem with their attendance, you know, they should address it. >> you know, there's some who might argue and we're hearing a lot from trump supporters that although you say you're grateful for the 800 that calling him out on specific targets or numbers was sort of like looking a gift horse in the mouth. is that not the case? >> okay. yeah. let me put it this way, let's say you're one of the people that in february you were told that we're moving the plant,

you're going to lose your job, okay. go through a traumatic experience. all of a sudden trump enters the scene saying we're keeping some 1,100 jobs in indianapolis, now all of a sudden for whatever you get your hopes back up. >> right. >> and people did in order to find out the 550 jobs, which nay never announced at any point in time when he was in town were still leaving to mexico. we heard about the 550 leaving two hours before trump got in town. why couldn't he address that? so consequently people got their hopes up they're going to have a job and provide for the families to find out from us the next day that wasn't the case. >> right. that's just wrong. >> understood. finally, mr. jones, i just wonder as someone who's helped lead and negotiate labor contracts for a long time, what do you make of trump's public negotiating style? taking public stances in front of everybody and hoping that leads to a better bid? >> well, i don't know. everybody's got their own

strategy. you know, what me and mr. trump's differences are right now if he would, you know, elect -- try to do something to save the jobs at the carrier facility or one of our other plants which is a mile away, rexnord 350 jobs that are scheduled to leave this country after the first of the year, i'd be glad to sit down and work side by side to try to do something to keep these jobs here in this country. >> chuck jones of steelworkers local 1999. we really appreciate your time. thanks again. >> thank you very much. >> quick programming note, we will continue our conversation on unions with the international president of the united steelworkers of america, that's coming up later on. and we'll hear from the ceo of a airstream bob wheeler as the discussion and debate about labor negotiations, state of manufacturing, employment at large goes on. >> yeah, whether you can really bring back manufacturing jobs en masse to this country. when we return though, we are keeping an eye on the stock

market in rally mode lately. we're sort of hovering around the flat line holding onto those record highs for the s&p and the dow. the nasdaq actually outperforming today. transports hitting a record high for the first time in nearly two years. we'll break down what sectors you should be keeping an eye on and what it says about the outlook. and then tomorrow we've got a big interview coming on the u.s. economy, the chairman and ceo of fed ex, fred smith, who spoke with president-elect donald trump just recently. much more ahead. stay with us. ♪ 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?

the dow transports hitting a record high yesterday. it was the first time we saw that in nearly two years. our morgan brennan joins us now with a look at what is fueling this sector. pretty bullish, morgan. >> certainly is, sara. so despite a modest move lower today, take a look transportation has been one of the biggest trump trades with the dow transports up 12.5% since the election one month ago. so driving the surge we got prospects for stronger economic growth from infrastructure spending, possible tax reform since many carriers do pay top rates. and these are offsetting perceived risk of more protectionist trade policies. however, this is more than a

trump trade. the index is up nearly 25% for 2016. now, the biggest winners, some of the trucking names including land star, ryder, j.b. hunt, as long as rail stocks year-to-date many of them are companies with big exposure to the industrial production which has shown signs of stabilization in recent months. so after a year and a half long freight recession, we've got volumes beginning to pick up. the cass freight index ticked higher for the first time in 20 months. shipments over year over year, up 1% sequentially, better than normal seasonal surge according to that index. weekly rail data looking better as well. some easy comps there. also some of the trucking data has been more upbeat. and we've got signals that consumer spending is ramping up as well. air freight tonnage up 10.5% last month according to

avondale's. so all this is contributing to the transport rally. keep in mind we still have a lot of risks that some analysts warn are not getting fully priced in to this rally right now including higher oil prices, rising interest rates and of course the strong dollar, carl. >> big story. especially yesterday, morgan. thanks so much. when we come back, the state of medicare and medicaid in the trump era. we'll be joined by acting administrate for the cms andy slavitt. take a look at the top dow gainers since the election. more "squawk on the street" continues in a moment. will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fila big orde

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welcome back to "squawk on the street" everybody. i'm sue herera. here's your cnbc news update at this hour. secretary of state john kerry says there has been a troubling shift away from democratic principles in too many of the 57 nations that comprise the organization for security and cooperation in europe. he spoke on day one of the two-day osce meeting in germany.

south korea's opposition controlled parliament has formally introduced an impeachment motion against president park gun-hye. more than 7,000 protesters took to the streets in athens taking part in three different demonstrations against os tausty measures. a strike called for by the unions also disrupted public services across greece. and airline trade group airlines for america says it expects 45.2 million people will fly worldwide on domestic airlines during the 21-day holiday season. that's a 3.5% increase from a year ago. the busiest travel days will be december 22nd and december 23rd. get there early. that's the news update this hour. carl, back down to you. sue, thanks so much. let's get to bertha coombs this morning. >> hey, carl. andy slavitt is the outgoing chief for centers for medicare

and med case-- medicaid held thb for about 18 months now to help fix obamacare exchange in 2015. andy, thanks for joining us on i guess what's your farewell tour here. you've been at a number of conferences, one of which yesterday you were saying that with the changes afoot in washington that health reform should have no authorship. what do you mean by that? >> yeah, thanks, bertha. and it's great to be here. i think what i said yesterday is we really shouldn't have any pride of authorship for better ideas for improving health care. i think once we get past the rhetoric of the campaign season and into the reality of governing, i think doesn't matter whether it's democrat or republican but if we can build on the progress that we've started over the last eight years ensuring 20 million people, bending the cost curve, improving quality in america, that can come from anywhere. and i think everybody should have a rooting interest in that success. >> that said, you also have

issued warnings about the republican repeal and replacement process and plans. you have concerns. >> well, it's not just my warning, bertha. yesterday the american academy of actuaries issued a warning to the speaker which said they'll be an immediate disruption and significant disruption in the market. and i think that disruption will come in the form of health plans really being paralyzed and not knowing what to do. hospitals and others, and i think that begins to ripple. one of the things we tried to do, bertha, and we still try to do is be very cognizant of the fact 20% of the economy is in the balance whenever we make a decision. so creating uncertainty whether for companies, consumers or investors generally not a good thing. >> the insurers have complained about the uncertainty over the last year or so because there hasn't been the risk -- reimbursement to offset the big losses they have seen.

what do you think the problem will be if there isn't a replacement plan in place and a process and timeline in place if the republican congress repeals obamacare in january or february? >> well, hospital ceos and health plan ceos are saying privately and are now beginning to say publicly that they're really going to be in no position to continue to invest. they're going to be in no position to understand as they move into 2018. by the way, 2018 in our world doesn't start in 2018. 2018 starts at the first quarter of 2017 when companies need to begin working on their rates and filing them. so those decision haves to get made right away. and if the congress says we're not sure what's going to be there, in all likelihood we're going to have really significant parts of the country without coverage. we're going to have resulting in people without coverage. and i think what results from that is job loss and so forth.

remind everybody that among many of the other things with the aca 2 million jobs have been created since the aca began. >> in health care. >> in health care. 2 million health care jobs. >> meantime yesterday cms put out some new figures for spending on drugs and medicare part d, a lot of the names that saw some of the biggest increases were generic drugs and the range of 300% to 400% in one year. it's the same day we saw the president-elect say he'd like to do something about it. it's been impacting biopharma drugs. they've been down. what do you think the next administration should try to do about it? >> yeah. you know, i think for too long we're living in the schizophrenic universe where the other thing that happened today the cures signed by the president, i was proud to work with the president and vice president and dr. biden really set an enormous amount of progress for our country forward because we're now going to have

really a shot at the cancer moonshot area, which is what he's been so much championing. so we need these cures, but at the same time if we can't afford to deliver these cures to the american public, if -- >> so should medicare and medicaid, should they negotiate with drug companies? >> oh, i think so. but i would say this, i was pleased to read the president-elect's comments yesterday. i think, you know, to the extent that the new administration sees what we see, which is that individual americans are getting taken advantage of, we're getting taken advantage of by other countries because they're of course riding on the back of our r & d, we're not able to negotiate prices, as you said we have generic drug prices increasing. that's something he's going to need some stamina, but it's something he's going to want to do something about. >> thank you so much, andy slavitt, we're going to leave it there. carl, gang, back to you guys. >> thank you so much, bertha coombs. union in the hot seat as president-elect takes aim at companies moving production

overseas. we're going to talk with ceo of airstream this morning. right now dow is up 8. don't go away.

as the market rally rolls on, one stock, apple, on all of your minds. should you buy it or sell it if you own it? the answer at tradingnation.cnbc.com. more "squawk on the street" coming up. mary buys a little lamb. on 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& and security tt senses anmitigates ber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t. welcome back to "squawk on the street." the s&p 500 industrial sector standing out as the worst performer so far in early trading. this after hitting all-time highs amid yesterday's big market rally. defense stocks among the names weighing on the sector the northeast, northrop, the biggest laggard kneelsen holdings, down about 4% hitting a 52-week low in trading with, david, those defense contractors some of the biggest gainers since the

election win for donald trump they're pulling back a bit today. back over to you guys. >> thank you, dom. dom chu. now let's get to the cme group and join rick santelli who has "the santelli exchange". >> good morning, david. i would like to welcome my ecb meeting day, thanks, chris for taking the time this central bank day. >> yes. thank you. >> all right. now, let's go through it just on the numbers. if there was no extension we'd have 80 billion for three months and i'm just rounding everything that's euros of course 240 billion euros, now it's going to be 60 billion. so we go from what was with no extension 240 to now nine months of 60 at 540, that's a difference of 300 billion more. the other way to look at it, my traders tell me this is a better way, is they were looking for an extension, but they thought maybe it would be all 80. so you go from 720 to 540, that's 180 billion less. how do you look at what mario draghi did with regard to less for longer?

>> well, i'm still struggling with why it's not called a taper. i think for the first 45 minutes from 7:45 we thought going from 80 billion down to 60 billion starting in april it's a lesser amount. isn't that a taper? but he said no. i think the consensus ahead of time was that they might loosen these limits on what they could purchase below that deposit rate and that, you know, realistically they could go 80 billion per month through september from april through september. but then they're really pushing it. i mean, they're really running out of stuff to buy there. but, you know, what was interesting to me is that he still doesn't sound very satisfied with where the economy's going to be in 2019. they don't really see inflation getting to 2% target. and that's why i think he's kind of trying to tell people they're in it to win it, they're going to be there for awhile providing

support for, you know, the euro area. >> well, you know what, let's get to the crux of the matter. i looked at all the headlines that he had out today on all the news services and i picked up two threads. first was, reform comes in a lot. i'll give you one example here, countries that need reform have to undertake them. this makes reform easier. been there, done that, mario. the reform many of these southern countries like to take the sugar but they don't want to do the reform. the other thing was politics. you know, politics are uncertain. yeah, they're uncertain, they're kicking all the policymakers out. comments on all of those issues and wrap it up. >> yeah, the reform's going to be very difficult to achieve. we've been down this road so many times before. you know, the u.s. -- people in the u.s. are very concerned about political risk in europe. but, you know, frankly we don't see it quite that way. i think merkel's going to be okay. lapenn is probably not going to

win in france. maybe a little bit overstated the political risks, but people are nervous. >> well, listen, chris, thank you. and many would debate whether the political risks are that status quo remains or status quo goes, case in point donald trump and the markets. chris, thank you. david faber, back to you. >> all right. thank you very much. now let's send it over to jon fortt give us a look at what's coming up on "squawk alley." jon. >> good morning, david. the back and forth between the president-elect and the steelworkers union continues. we're going to continue to dig in on what the issues there are. and j.d..com, big technology company in china, are they worried about a trade war? finally, we'll take a look at where the markets go from here as we head into president trump's first term. all that and more coming up on "squawk alley."

the companies were not stopping the flow of production and jobs south of the border and overseas.

the president-elect calling them out for not keeping jobs in indiana. airstream known for its iconic silver trailers. joining us to discuss this issue is their ceo, bob wheeler. nice to see you. >> good morning. thanks for having me. >> i know that your manufacturing employees are a, in this country, b, nonunion, but what are your thoughts on this feud between the president-elect and the head of the united steelworkers union 1999? i saw that interview. it made me feel grateful our markets have been primarily in the u.s. it's never been the impetus for our industry to export jobs so regardless of what policies come out of this administration, we think as a recreational vehicle goes we're going to be fine. >> in other words, you're thankful few yore another going to be called out on twitter or

singled out maybe a phone call from the president-elect. to move your jobs. >> i don't anticipate we'll have any issues with the current administration. it's been kind of fascinating seeing things unfold in the days leading up to inauguration, but i think we're in very good shape. >> do you think he made the right move by getting on the phone with you nighted technologies' ceo, the company that owns carrier, negotiating a deal that involved some incentives to keep those workers in this country and therefore keeping we know now not a thousand but hundreds of them here? >> well, keeping jobs in the u.s., no one's going to argue against that. you know, how it's done historically and how it's going to be done in the future, you know, things are really evolving. i'm not in a position to say whether it was right or wrong, but certain number of jobbed were saved in indianapolis and it's hard to say that's a bad thing. >> as you said, having your employers in this country, a lot

of industries are focused on what deregulation will occur that will benefit them. from your point of view, is there anything that you see in terms of deregul that could be benefit to airstream? >> our industry as a whole and airstream in particular, we've benefited from being self-regulated. there's a great industry association that makes sure the products are safe, they're built to great standards. so we're not a heavily regulated industry as it is. so we don't anticipate a big impact with deregulation. the products we make are made by hand. you know, they're typically nonunion facilities. we think all the economic indicators that we see moving forward look very good for our industry. >> just out of curiosity, why do you keep your manufacturing in this country? greg hayes told jim cramer that wages are significantly lower there, about 80% on average, absenteeism runs about 1%, turnover 2%, dedicated

workforce. why not go south of the boarder? why haven't you done so previously? >> because we have all those same things here right in ohio. the airstream workforce in shell by county, ohio, is really second to none. we've got tremendous attendance. we've got very low turnover, tremendous worker loyalty. when your labor costs are kind of in the high single digits, shaving a few percentage points off that is really not going to impact our company as a whole. and when it comes to airstream, hey, we're made in america. it's all about hand built, hand riveted. we couldn't dream of taking our products elsewhere even if we wanted to. >> and you expect that growth we just saw, 12%, going to continue beyond this year? >> yeah. they're calling -- wrapping up this year at 12% as an industry. airstream in particular is going to finish the year up 22%. we've been on a great run. the rv industry association is calling for 5% growth next year. frankly, i think that's a little conservative, but time will tell. all the economic indicators are really pointing our way.

it's low interest rates, gas prices are still low, credit's available. all the things that really drive our industry forward are looking good for years to come. >> that consumer confidence is up. thank you for joining us to discuss it. >> thank you. >> bob wheeler, ceo of airstream, a subsidiary of thor industries. coming up on "squawk alley," we'll speak with the international president of the united steelworkers of america, leo gerard. our business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com.

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let's take a look at where we are on stocks right now. they're holding their gains. the gains that took the s&p and the dow to fresh record highs in yesterday's session just barely positive on the session, the nasdaq performing about 0.3%, one of the three that's not actually yet at a record high. the russell 2000 is also at a record. we're also watching the euro today. after mario draghi, central bank decision of the day, decided to extend their stimulus program, bond buying, by more than the market expected. that's weighing on the euro. it's getting crushed right now, down 1.3%. they're also deciding to taper or scale back the amount of bonds that the ecb is buying, perhaps a little disappointing there weighing on the euro as

well. and add that up and off strong dollar getting even stronger. watch out, multinationals in the latest earnings. doesn't seem to be affecting the dow right now, which is up 11 points. also the consumer discretionary sector, which has come to life in this trump-related rally, this idea that consumer confidence is up, animal spirits are back, and the sector as a whole has turned around from earlier in this year. lululemon a big part of the reason why today. it is up 18% after a blowout quarter, 7% comped growth. talk to the ceo. has a good outlook for this current quarter on holiday sales. and if the s&p closing at a record, carl, 16th of 2016, and the sixth since election day. over the you for "squawk alley." >> sara, thanks so much. sara eisen. good morning. it is 8:00 a.m. at twitter headquarters out west, it's 11:00 a.m. on wall street and "squawk alley" is live. ♪