"squawk on the street," along with the new ceo as well. >> what do you think of the fact that the shares are higher? >> that's an interesting commentary. >> what is it 46 to 41. >> up 1%. make sure you join us on monday. have a great weekend, everybody. peter boockvar, thank you. >> thank you. >> and kelly. >> and kelly. >> "squawk on the street" begins right now. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla, jim cramer, david faber at the new york stock exchange. big morning not just with those record closes for the major indices, but we're watching coca-cola. muhtar kent stepping down effective may 1. europe's in the green. the dax is looking at a 6% climb for the week. oil's back above 51 and we will get michigan confidence in an hour. changes at coke, long-time

ceo muhtar kent stepping down. details coming up. march to 20,000, how high can the trump rally go? and president-elect's cabinet team looks to include a fast food executive, but is he good for small business? first up though, 13 is a lucky number for the trump rally. that's how many days the dow has closed at record highs since the election. the blue chips marching toward 20k, s&p and dow transports hitting fresh all-time highs in thursday's session. last night at his thank you event in iowa the president-elect spoke about the trump rally. >> and we had a lot of people in nebraska, a lot of good wealthy people fighting us, right? that didn't work. but those wealthy people aren't so unhappy now because the stock market's gone up so much because of us that those wealthy people just got wealthier, right? >> this is turning out to be the fourth best week of the year for the dow. that's only because it can't compare with the week that followed the election. >> it's an amazing rally.

it's broadening. still not hitting the drug stocks because they're not -- you know, not trump, not trump, not trump. i do think what's happened right now, this is a pivotal day, is i think you're going to see technology go up. we haven't seen technology really participate. and that's because we had a couple of really great earnings. but i think what's interesting, coupled with the election is just this kind of absence of news. so, i mean, it's not like -- we take industrials up, not like industrials are reporting bad numbers, there's been a lot of levation in the market. i know a lot of people worried about price-to-multiple expansion. keep paying for more and more and more. but i think that people kind of genuinely feel like the steve liesman survey this morning feel more optimistic, they buy, little self-fulfilling, like president-elect trump said. kind of, hey, listen, everyone's making more money. >> we're going to get as we said michigan confidence in an hour. people are looking forward to break what has been a down trend slope over the past several quarters and months.

courtney reagan with this retail survey, average spending for the holiday $702 up 4% year on year. >> last three weeks of the country i have yet to find another one other than restoration hardware say business hasn't picked up. in some cases dramatically. restoration hardware no, no increase. >> no, that did not go particularly well. >> no, it did not have a good last three weeks. but almost everybody else did. costco talking unbelievable. by the way, when with talk about broadcom, it's not necessarily that broadcom, that anything changed there in the last few weeks, but broadcom is a stock people are going to key on this morning, symbol avgo, sense of the stock market and where the rally could broaden to. i think it could happen. >> utilities, big piece in the journal today. i thought of you because you talked about trump being a president to bring more fossil fuels out of the ground.

journal says it doesn't matter x moving on. >> one of the things the utility companies have had to do retro fit the 40-year plan build under the jimmy carter cole era, the question is whether the epa could move the goal post, had to raise the rate payers prices for electricity and also be able to not give you the dividends that you thought. and that's what the epa can roll back is the retro fit. remember, we're a coal based -- we are a coal based baseline counted. and i don't know when people read these articles what they're thinking. now, that could change, but we are so cold in this country still. natural gas is very important. it's becoming more and more a part of the mix. but if you can tell a.p. they don't have to switch right now and you have a little more extra time and the retro fit can go on, that's huge for these companies. now, these companies trade off of interest rates, i know, but that article seemed to indicate it's glacial. now, a lot of people felt natural gas would never get to

be this much of the fleet, but we're a coal based country and anyone who thinks we're not a coal based country doesn't know the numbers. it's going to change, but not that fast. >> so you do not believe gas long-term makes coal more uneconomic? >> no. i think that these companies that are actually in charge don't want to retro fit if they don't have to. if the epa -- if they were to roll back the epa's rulings over the last few years, these guys then would have a chance to breathe, or we'll not breathe because of them. i used to call these guys part of the no rainbow black lung coalition. i kind of changed my view. i kind of softened on them. but a lot of these companies it's about how quickly they have to move off of coal. they all want to move to nat gas, but nat gas has spiked. >> yeah, it's getting cold. >> as it gets higher these guys can switch back to coal which is why the rails have been so good. it's pretty complex. it's not as simple, hey, turn the switch, go to nat gas. >> also last night at this thank you tour in iowa he talked about how he's calling out companies

on various topics. take a listen. >> i actually love calling these companies. i said give me a list of ten companies that are leaving. and i actually love calling these companies and saying, hi. and i get the president of this company. and i say, hi, how are you doing? oh, hello, mr. president-elect, congratulations. yeah, congratulations. by the way, while we're on the phone, please don't leave, please. and we've had great success. you'll be seeing a lot more great success. >> this morning on cbs john dickerson said he's redefining the job. and that sort of rings true with what he just said. >> i interviewed i played a clip of from 200 when i sat down with mr. trump and talked about the notion he's just going to call people. why the president can't just call people and get the job done. i asked muhtar kent the now retiring ceo of coca-cola a few minutes ago whether he expected a call from president-elect trump. he goes, look, we're in 207

countries and we're local, local, local, local, local, meaning that unlikely that the new ceo -- >> not talking about companies taking headquarters and moving. we spend an awful lot of time on this show and others talking about inversions from when they first began and the opportunity that many corporations in the u.s. saw in terms of using that as a way to move their headquarters and their tax paying to a more favorable location. but here he's talking just about the outsourcing of jobs. >> right. >> which i guess is a daily occurrence to a certain extent, if you want to look for it. i'm sure you can find some factory somewhere unfortunately that is moving some workers. those seem to be the focus of his calls. because frankly, companies are headquartered here are not moving. they can't anymore. i mean, remember allergan/pfizer got stopped, inversion's more or less had been stopped. and with the prospect of much lower taxes, why would you move anyway? >> but you know it's funny, i've been able to go around the country a lot in the last couple years and there isn't a town that doesn't have shuttered factories.

it got into the consciousness. 95% of the counties voted for trump. and i just think when you go across the country you just see it. you see the abandoned factories. just became part of the psyche. >> and he may be successful in keeping certain jobs here and that would be great. but you and i talk oftentimes about automation. it came up in your interview with greg hayes. came up in your interview yesterday with the gentleman who runs the union there. automation is replacing jobs anyway even at those carrier plants. >> checkers. checkers. no, you get rid of checkers -- remember the self did not work. the self-check hasn't worked, but you get that new checkout and that's a lot of people jobs. why doesn't president-elect trump like these pipelines so much? i mean, you talk to the pipeline -- god bless you. >> thank you. >> when you talk to the pipeline companies, there's a lot of people that are needed to build a pipeline. these are not automated jobs. and president-elect trump has informed a lot of people in this industry, listen, we're going to

get these pipelines done. and we're not going to block them. and the federal government has a lot to do whether they're blocked or not. >> absolutely. jim mentions coke, of course a big story this morning. let's get to sara eisen in washington at the national competitiveness forum talking about kent's departure. good morning, sara. >> reporter: good morning. and i know that james quincey, who will be the incoming ceo and muhtar kent, spoke with jim. i had a chance to speak with them this morning as well as this transition was announced. kent said it was one of my most proud days in his 38 years at the company. he called it the most orderly transition in coke's history. remember quincey is kent's c.o.o. he's been in that job for about a year and a half. so this has been telegraphed to the market and to investors that he was sort of next in line. the timing was a little bit uncertain. coke is in the middle of a transformation, as they call it. they're getting rid of some of their bottlers to try to be more

asset light, more focused. a smaller company, interestingly enough, more purely focused around the beverage portfolio. i talked to the two gentlemen about some of the biggest challenges quincey is going to face in his new role when he takes over in may. he says one of the biggest is digitizing the franchise. kent sort of joked when he took over there was no such thing as an iphone. and they have to bring this company really to the 21st century, modern technology. they're very focused on that aspect of things. kent did say quincey has an acute understanding evolving consumer tastes and of course the message there is that people are drinking less carbonated beverages. this has been going on for more than a decade. it's something that coke and its rival pepsi have struggled through. they've been trying to move their portfolio more to bottled water, juices, teas, which are growing a lot faster than the so-called sparkling beverages. that's how coke calls them. i did ask quincey about m&a because a lot of investors are

looking to him to make more moves. we've seen coke strategically invest for instance in monster beverage, the energy drink company. here's what quincey said about that. he said, m&a takes two to party, there are things that we're interested in. we will look for the right bolt-on opportunities. so that could be something to watch for coke and consumer staples in general. always with the food and beverage companies and the slow growth environment there is talk of m&a. kent also said that he knows james well, he likes him, he believes -- excuse me, also wanted to highlight this quote from warren buffett, the biggest shareholder, because there are some questions after howard buffett stepped off the board. yesterday this news came out, and so warren buffett in the release saying i know james and like him and believe the company has made a smart investment in its future with his selection. an important sort of symbolic quote, carl and guys, about buffett's backing of this transition. clearly after some questions

with howard, his son, stepping off the board. >> quincey, 51 years old, ran europe, ran mexico, joined in '96. knows the company pretty well. >> mexico a great company for them. bounced back after the tax was put on. europe is far more, i think, because of some work that they did with salesforce.com much better in terms of digitization. and i think it's going to be very smooth. but i also recognize these are the stocks that are completely out of favor. remember, coca-cola's hedged. muhtar hedged in europe with the euro, hedged with the yen. but it's not the kind of stock that's in favor right now. just a great dividend payer over time. hasn't shot out the lights, pepsico has done better because of its model with snacks. but no one ever got hurt recommending coca-cola when i was at goldman sachs in 1983 and i think it's pretty much continued. no one ever got hurt recommending goldman sachs. holy cow. >> at least not recently. >> no. >> i can remember some periods

where it probably wasn't the best advice. >> no, it wasn't, but in the last four weeks it's made up for about four years. >> yes, it has. yes, it has. >> still nothing out of gary chon. >> we were just talking before the show, schultz at starbucks, kent at coke, these things go in threes. >> it would be monumental if he did leave. i do think we are in a period where these are -- the cage -- the move to kevin johnson was not that telegraphed, but it was done very well ahead of a very good five-year plan. this one, if it shocked anybody then it's because you were in a time capsule somewhere watching john hamm at the end of "mad money." >> this is done as it should be done and succession is one of the key things a board should be focused on. i certainly have to give the board at coca-cola credit for having a plan here that everybody, right, sara, was fully aware of, i would argue. >> reporter: certainly. it shouldn't come as any

surprise. but there are challenges. and coke, as i mentioned, is still sort of in the middle to the tail end of its so-called transformation. muhtar kent told me this morning that it's actually ahead of schedule. and what he's talking about there is getting rid of some of the bottling facilities to try to make this a smaller company. that is set to be finished by the end of next year. but it is a company that faces challenges. there are rising sugar taxes on sugary drinks that we even saw passed in this previous election. they have to deal with this consumer shift. and they have to deal with the fact that around the world you've seen a sluggish ma macroeconomic environment. they're not as much concerned with emerging markets which has been the engine of growth for the last few years in this company in a u.s. market that has seen declining carbonated beverage sales and especially for diet coke, which is their second biggest product. >> yeah, diet coke's still down. coke zero a little better.

the only thing i would say is this asset light model you haven't really reaped the benefits yet. what he's done is give james quincey a really terrific 2017 regardless of whether people turn even more against sugar drinks. >> yeah. sara, we're going to talk to you in a bit. she has a first on cnbc interview with fed ex ceo fred smith. and talk about trade and the future of what his industry under a trump administration, that stock hitting all-time highs lately. take another look at the premarket. s&p up five, hasn't had six up since june of 2014. see if that happens today. we'll be back in a minute.

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then why settle for slow internet? comcast business. built for speed. built for business. president-elect trump's pick for labor secretary is the ceo of cka restaurants and the parent of carl's junior and hardee's changed. puzder opposed to hiking the minimum range. last night in iowa the president-elect defended choosing millionaires and billionaires to serve in his administration. >> some of the people i've been putting onto negotiate are some of the most successful people in the world. the news criticize me, why can't they have people of modest means. because i want people that made a fortune, because now they're negotiating with you, okay? it's no different than a great baseball player or a great golfer. >> actually, puzder, if you look at cabinet appointees, one of

the less affluent members when you pit him up against mnuchin or ross. >> mnuchin actually does not have that much money. wilbur ross is really rich. he may be number one. he's a multibillionaire. but mnuchin, not to -- yeah, he's been termed a billionaire, that is way, way, way off. >> but mr. puzder as frequent guest on "mad money" and very good business person. obviously these places are all involved in the same thing of wendy's when they had three people make a burger, now it takes automation. these are something i know david talks about endlessly which is the job gets replaced by the machine, of which he talked about the machine show up every day, a lot of the machine issue is absentee versus whether people -- machines are never absent. i know that sounds like -- >> but certainly this move towards a national minimum wage would seem to be over and done with, right? >> yeah, well, i know most of

the restaurants -- i have most of the restaurant chains come on "mad money" and it's a big issue. in the coast it doesn't matter because they're already up there, but, yes, minimum wage is kind of pretty crucial to the labor leverage of what we see. >> yes. >> so this will be well received in the restaurant industry. >> absolutely. in fact, this is a sound bite of puzder back in may talking about minimum wage. >> the congressional budget office, which isn't bipartisan, it's nonpartisan, said at $9 an hour you'd eliminate about 100,000 jobs, at $10 an hour it's about 500,000 jobs. i'm not in favor of eliminating 500,000 jobs, but i think you could go to $9 with minimal impact. >> so we've had some upgrades of mcdonald's, nelson peltz buying more wendy's. this add fuel to that fire? >> just step back for a second. when i heard it, again because the labor department right now is what people regard as being pro-labor. mr. puzder is a guy who

recognizes automation and the value of it, but he is -- >> antilabor? >> what? >> he's antilabor. >> well, you said it. >> okay, i did. >> i spent 180 words trying to say it, and didn't say it, you did it in less than 140 characters. >> to david's point, here's again wapo, page one, trump fuels labor unease. whether it's unions yesterday. >> yeah, guys, you should be uneasy. i mean, this is a guy -- there isn't anyone in the industry that's been more vocal. and there isn't any industry that needs the minimum wage more. look, i own a restaurant and i always follow the restaurant trend so much. and, wow, i mean, this is not -- this is not -- let's put it this way, how about this, president obama would unlikely appointee under president obama. >> yes. >> that's fair statement. >> people point out reagan patco when unions had 20% of workers, now unions have 7%.

amazing change. >> seven, six, five, four, three, two, one, blast off. >> yeah. >> we'll get cramer's mad dash and countdown to the opening bell in a moment. more "squawk on the street" from the nyse straight ahead. this is my headquarters. this is where i trade and manage my portfolio. since i added futures, 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. for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities

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we were just talking here about guests, how jim gets all of them. we've got now mad dash here for you to talk more about mgm, and jim murn, who you had on last night who had been a guest that i used to have on. not that we fight over these things. >> no, i used to speak to jim all the time when i was a hedge

fund manager, so we have longstanding ties. >> you do. >> he was talking about the new magnificent -- not a lot to do, that's changing when bruno mars is there. there were rumors a restriction at atms, how much money comes out because of currency restrictions with china. macaw ju macau just denied that thursday, does it not then go up 4%? i would say yes. >> and it's been great since the spin of the reits and property and they still own a lot. >> because your man jim has done a fantastic job. that's why he was one of the reasons he was your guy here and switched to "mad money." >> all right. we got a lot more of this show coming your way right after this.

you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in 90 seconds

after another crazy week looking for more potential records today. dow's up four straight, s&p's up five straight. s&p, transports, russell, what's next, jim? what are you looking for to happen next? >> i want everyone to be watching the stock of broadcom, avgo, run by a man who's the least promotional great ceo in the industry. he had good things to say about communications, hardware, good things to say about pretty much everything involved with 5g but didn't call it that anymore on these calls. and that group plus the fiberoptic group and then the advanced micro older throwback tech is where this rally needs to go. the problem is they're not trump. they have nothing to do with trump. but they have something to do with earnings. and the earnings are great. >> interestingly the worst

performers, medtronic, allergan, regeneron. >> well, no trump, no trump, no trump. valeant should be one that you might -- you have to think who could get the call next. it might be one of those executives. >> here's the opening bell and s&p at bottom of your screen, at the big board one of the biggest ipos of the year fixed annuity provider athene set to open for trading later today. they're going to raise more than $1 billion. at the nasdaq, kewaunee scientific celebrating 35th listing anniversary. you've mentioned rh at the top of the show. >> rh was the conference call that was really one for the ages in just terms of just hair sure just basically saying, listen, we didn't send the model book out right, we have the wrong stuff. we didn't get it right. it was a call i just kind of in the end felt bad for the guys. now, gary freeman did buy a ton

of stock in the 20s and the stock had run up betting this was going to be the breakout quarter but it was a breakdown quarter. and i just don't have -- i don't have anything good to say because they had nothing good to say. they basically just said, listen, we didn't execute. and it was -- these guys were very candid, very up front. and i left and finished and said, wow, i called my wife, i said is it bad stuff? i mean, what happens, it's expensive, no one interesting, it was a bad call. you know, a weird moment. ucb rejects italy's plea for more time to rescue mont montmonte monte paschi. oldest bank in the world. at one time we would be glued to this. a local bank. >> shares down 15.5%, we would be leading the show. >> we would be crazy over cypress. >> took a tour of the bank when i was there. >> now it's sort of like thought wed throw it in there.

>> they could turn that beautiful building maybe into like, you know, like a giant starbucks roast -- this is a major bank on the continent and we ignore it because, well, so what. i mean, so what, this is what -- neither one and the ecb may be letting it go and now it's only fun to say because it has a cool name and sienna is beautiful. >> what if in fact that were to happen given rejected their plea for more time to be rescued. how bad is it? >> they would have to have a huge bailout, the italian government. >> okay. >> it's very big. that's not the only one there that's in trouble. when i did business with them, i was concerned.

>> this happened last week? has renzi officially stepped down? >> italy has very few options. they have to inject state funds. >> of course they're used to rapid turnover at the top. >> true. but it's about the depositors here. depositors could be heard. this is a major story. >> i'm focused on it now. >> you are? >> i am. i'm going to start focusing on this a bit. >> remember when deutsche bank was in trouble a few months ago and we were focused on it every day? deutsche bank is obviously very importa important. this bank is the oldest in the world. we kind of overlook it seems wrong. >> was it the end of '11 when we would end every single show on the ecb what was going to happen until he came out and sort of said by any means necessary. >> yeah. >> portugal, spain, greece. >> remember the italian 10-year was at 7% during the first week

of november of 2011. that was kind of an interesting moment. >> corzine got it all right. little leverage -- >> well, being offset by things like airlines. united boosting their guide. >> gary kelly said week after week after week since the election has been a great time. i got to tell you i think that osc oscar munoz has done an excellent job. it took a railroad guy to fix united. anyone remembers the great job he did at csx, it was natural to think -- southwest by the way is just now taking out its high from a year ago. it's not like that stock is still cheap. these are inexpensive stocks still. they were so hated. remember, warren buffett -- he bought these stocks. good buy on these remember when he reversed his thinking with them? united continental is up organically.

a good situation. >> buffett once famously said, frankly no airline's going to be a wonderful business, but maybe it's not so much warren pulling the trigger on some of these names. >> well, i think the capacity gary kelly was talking about only going to be 1% to 2%, very hard to get, remember the industry went away from wide body and went to these more medium smaller bodies and there's not a lot of planes for sale. there's a lot of wide bodies if you want them if president-elect trump just wanted to buy a used plane. he bought paul allen's plane. you can retro fit it, but planes are obviously get off my plane from the movie "air force one," which was obviously se semi historical, right? >> it was fiction. it was. >> it was? >> harrison ford, right? he was never actually the president. >> are they ever going to make that battle for fallujah where he plays mad dog? it's rumored from the moment no true glory came out that harrison ford was going to play mad dog. interesting article today about how mad dog about general mattis

is wrong about water boarding. i don't want a call from him. different kind of call. >> saw that piece, opinion piece in the journal. >> opinion? not a factual piece. >> not necessarily factual. >> thank you, david. >> the srx reversing some of the losses from yesterday, which sort of raises a question about what you do, jim, when a short says he thinks trump is going to one day tweet about his specific security. >> i don't know, brent saunders tweeted me today from allergan talking about the need for the industry to kind of get in line, go back to innovation, express scrips are they the big villain? i do point out that brent saunders is and -- from regeneron, really worried about the willy nilly price increases and who could get a call, valeant could get a call, joe pop pa get a call saying you have to roll back those prices

obviously. ian reed could get a phone call. i know that tom price who is in government, who's running that department by the way, is running health -- he's very aware of pricing and who's done a good job and who hasn't. and has not been a friend of the pharma companies already that have raised prices. so be aware that the president-elect is acutely aware of who has raised prices big for older drugs in the last six months. and one of those guys is going to get a phone call. >> and what if on that phone call you say, listen, we think our prices -- we are priced appropriately for the marketplace and for the value for the consumer and for what we've spent on r & d and you say thank you very much for your interest, mr. president-elect, but we feel okay about it? what levers really other than the bully pulpit are there to actually effect change? doesn't that require congress? >> $78 billion in spending, medicare part d. >> okay. good point. >> and i think he calls over to medicare and says that lyrica

drug, boy, that went up a lot. maybe we shouldn't buy lyrica. you know, whatever. i'm just say iing president-ele trump said $300 billion that could be rolled back, but that's all the pharmaceuticals in the country. but medicare part d they could very quickly say we want to do a little more negotiation, which is -- that's the curse word. remember lost in california, but if you went to v.a. like prices, the v.a. is a bargain. if you negotiate, if you said, listen, i'm just going to negotiate right now, i don't like -- listen, i just think if you were to take those prices down, i think what would happen is they say, we got to roll back. remember joe papa came on "mad money" and said they have to roll back some of the prices to value -- >> i'm not aware of it. i don't know. i think rolling back prices could be difficult. >> i think the call is going to be expected and the call is going to go, you know, we don't want to have medicare negotiate. i think you guy haves to self-negotiate. now, they're going to self-medicate after they get the

self-negotiate call. self-medicate is, david, that was funny. >> that was funny. it was. i was thinking about disney because i wanted to talk a little about that. >> what kind of segue is that? >> it's not one. >> okay, go ahead. >> getting to something i thought we should bring up. have you noticed had a very strong week? >> up ten points since the election. >> it is. up maybe five or six points this week alone. percentage wise not bad well above 100 now and up again today. a lot of people just want to talk about disney. not that they necessarily know anything. >> they do. >> we talked about the research. one report has, oh, do the netflix deal, another say maybe we should be thinking about the breakup, others are saying, well, who's peltz, would he ever consider with that big position that peltz has taken on that he disclosed in that interview with me on monday? i don't know about that. >> people love when you mention twitter and disney. >> well, some people -- i have had some conversations explaining the strategic rationale behind why disney originally was thinking about

twitter, not that they are now, not that they are now, and a lot of it did come back to the idea of sports programming and the benefits that they conceivably saw on that platform. >> david, travel and leisure is up very big since the election. you know, they got these theme parks, maybe people go more. >> true. >> you see vail tonight season pass sales up 16. >> numbers weren't so bad. i think they would do better with zika virus, the mosquito dies -- >> they raised their guide for '17. season looks strong. >> i think travel and leisure is a fantastic place to be. i think x paid ya has done well since the election. but i think we have to be aware that theme park division could be up a lot, but i think you're right, david. disney up again today. it feels like something's going to happen, david. >> it doesn't mean it will, but yeah, just everybody wants to keep talking about it. all these bankers are chasing it. we'll see. and i'll chase it. >> where there's smoke, there's fire. >> sometimes. sometimes it's just a lot of

smoke. >> we'll see. >> smoke from a distant fire? >> i think it could be. >> couple more bucks and you're looking at the high for the year with disney. >> smoke in the water. >> remember the shorts espn minus 500 now it's like, wait, what are the numbers there? >> espn and monte paschi, how about king dollar? remember when the king dollar would go up say sell, sell, sell. >> iger indicate more of an investment, focus on '18 is a growth year and that seems to have worked. >> and how about baseball, bam tech. >> yes. >> you know, bob always ringing the bell the other day and i think bam tech coupled with twitter -- >> now you're putting it out there again. >> david, i think machine learning is something you better start learning about. >> found a very high engagement for sports fans on twitter. could be an extension free espn. >> last night tired night football was on twitter, right? nbc. these thursday games are very tough.

i feel for the guy who is are so tired. >> andy reid's doing okay though. >> andy reid's the best. best thing ever happened to kansas city. they also won the series. >> so new highs on the nasdaq, the russell and the transports. bit of a different tone today as financials are underperforming. let's get to bp ob pisani. >> and the reason, carl, the market is hitting new highs is because we're getting rotation. every time we fall back on the sector leadership group, others come to the fore. look at the etf leaders today. the important thing is, remember carl's right, the trump rally has been banks, industrials and materials. but this week we're seeing other things come up, beaten up groups that were ignored. so real estate's been stronger this week. consumer staples have been stronger this week. even many technology names that got left out of the initial rush after the election have been up this week. and that top one that's pharmaceuticals, we know trump commented earlier this week the pjp, that's the pjp, that was at a 52-week low just this week.

it too is bouncing today. so this rotation is really what's keeping the market going here. there's your banks as carl referenced that's the kbe new highs you can see down slightly today. bottom line here is that rotation is really healthy overall. another group left for dead that's suddenly come back this week, don't ask me why, retailers, abercrombie. remember what we were talking about all the apparel makers having a hard time of it? not this week. express, urban outfitters, gap, they're all back too. another group sort of cycling through looking for losers that might be mean regression kind of stocks at this point. very interesting action this week. stocks are at new highs. how about this for a wish in 2017. we talked about this on the floor yesterday, the return of the average investor. we know what happened after 2008 the average investor walked away. here's the gallup poll done in april, 52% of americans are invested in stocks 2016. that's the lowest on record. the highest was 65%, that was

back in 2007. so americans have been walking away. and it's even worse, most of the stock is owned by richer people. 2013 study that was out indicated 90% of stocks are owned by the wealthiest 10% of households. put up that next full screen. that's what we're talking about. we're essentially talking to 10% of the households. so there's some hope that maybe we get this rally going maybe things can change a little bit. what would it take to get more households to own more stock? the most important thing would be some kind of change in sentiment. if you pull the next full screen, that's the most important thing, that's people debating are we actually going to get some kind of change in sentiment overall. maybe higher revenues and some real earnings growth not just manufactured. change in sentiment's going to be very, very key at this point. we're going to have our cnbc all american survey, steve liesman's going to be around in the next hour to talk about that. there are some indications that more americans now believe that this is a good time to be investing in stocks.

steve will give you all the details at 10:30, but it's very encouraging that maybe that can turn things around a little bit. wouldn't that be a great present for 2017? more americans owning more stock because they're more confident in the markets. i want to point out second biggest ipo of the year right behind me here, athene, one of the big retirement companies. they do a lot on annuities, for example, this would be the second biggest ipo of the year, 27 million shares at $40, that's an upgrade. it priced right in the middle of the range. indications right now are $41.50 to $43. so this would be a nice ipo, billion dollar ipo essentially. the only other ipo bigger, zto express, remember that one? that was the chinese company. they went public back in october, i believe. 19.50 they went public at and as you can see that's not been a terribly successful ipo now trading at $14 and change. right now dow is up 30 points. that rotation, carl, just keeps on rolling on.

>> bob, thank you very much. bob pisani. let's get to the bond pits as well. rick santelli at the cme in chicago. happy friday, rick. >> happy friday. you know, the roller coaster analogy just keeps getting better and better. you know you get on, you have a wild ride, you basically get off the same place you get on. that's kind of like treasuries this week. if you look at a one-week of twos, you can see it's reverted back some of that volatility came out. we are now unchanged on the week with regard to twos up one on the day. look at the euro twos. boy, they're about ready to challenge an all-time low negative yield close. all they need to do is take out 70 -- minus 75.5 and they're pretty much right there right now. look at a one-week of tens, shall we? tens on the week they're up two on the day minus one. what's fascinating here if you look at a one-week of bunds they're up five. let's look at 11-1 start rally

to tens. maybe it's not as tight of a range we had in august but still pretty tight in the intraday extremes always seem to revert back especially when you get towards the weekend. look at the same chart of bunds. their top of the range around mid 30s. if you look at 10s minus bunds, there's so much mean reversion here but net net we keep moving towards that 200 and then backing away. but really interesting that after ecb and mario draghi the differential of course is narrowing a bit. and that is pretty interesting especially considering how yields moved initially. and finally if you look at what's going on with the euro versus the dollar a level one chart really says it all, yes, they had some volatility yesterday, but it's flattening out. if you really want to get some follow through, traders say close under 1.05 or close above 1.085. so we're closer to the bottom of the range test. carl, back to you. >> rick, rick santelli in chicago. we'll talk to you soon.

when we come back, trump, trade and the transports rally. you'll want to hear what fed ex ceo fred smith has to say about all this in a first on cnbc interview. later on former labor secretary robert reich who's been very outspoken about the trump transition. again, record highs for the s&p, nasdaq, russell and transports. 2252. back in a minute.

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and then you'll notice apple going up. and that's a readthrough from the broadcom call where people were saying on the call you got the feeling that apple's doing better and that the orders are good for next year. now, apple's been in the doldrums here along with the rest of tech, but you can see tech is leading today. and i just want to say i thought broadcom did make you feel better about owning apple, not trading it. >> all right. what do you got tonight, jim? >> one of my absolute favorite companies is on, cimarex, sce. jorden is an unbelievable guy at finding where the oil is. he's not a guy, by the way, david, who wants to keep the energy in the ground. he's more of an extractor. and we'll talk about the new president. and we'll talk about the fact that been one of the great performers, fantastic assets in permian. anyone wants a growth oil, pioneer and cimarex are growth oils. >> one last thing, for viewers who write in and say why is everyone so giddy, sentiment's getting out of control, how do

you stay cautious on that at this point? >> well, look, we're in a vacuum. january is when selloffs have occurred. i don't think you want to sell and take the capital gains yet because maybe you get a break in capital gains next year. so there's a bias against selling, all right, because potential tax reform. and we have a vacuum of news. so when you do get news, it reverberates like a broadcom, and then you look at the trump calls and say, listen, greg hayes, it's not like united technologies is hurting, you do have a president -- new president comes on every day with something that is positive for capital. not necessarily for labor, but then again, if you're working at a carrier plant in indiana, you're feeling a little better. so it's absence of news and a bet that you get a better tax rate if you do sell next year. >> yeah. but watch out for january. >> january could be hard. >> yeah. >> jim, we'll see you tonight. "mad money" 6:00 p.m. when we come back, sara's first on cnbc interview with fed ex ceo fred smith.

dow's up 31.

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good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with mike santo santoli, david faber at the new york stock exchange. moments from now sara eisen will sit down with the ceo of energy giant exelon and ceo of fed ex fred smith. in the meantime industrials, s&p, nasdaq, russell. >> we've got some economic data crossing the tape. let's get to rick santelli with the numbers for us. rick. >> absolutely, on october home sale inventories on a month over month basis exactly as expected down 0.4, no revision. if we look at the alternative to this on the sale side, it's up much more. it's a good thing, double actually, up 1.4, and we double last month which was up 2 now stands it up 4. the money ball, everybody wants to see how confidence was effected. this is all post election.

this is preliminary moved from 93.8. remember -- i'm sorry, yeah, moved from 93.8 up to 98 even. that is indeed something interesting to ponder. if you look at current conditions, they move from 107.3 to 112.1. these are both solid numbers. on the inflation side no real surprises actually, they both backed away a bit, 2.3 on one year down from 2.4. 2.5 on five, the 10-year down from 2.6. obviously they've had two handles, but still not cracking the envelope on the top end. we'll pay close attention to that. maybe what's most noteworthy is how the dollar index making another beeline to the 1.02 handle. carl and the gang, back to you. >> all right, rick, we'll see you in a bit. rick santelli. while the march to dow 20,000 continues. dow's not far from one of its own up 29. many are wondering just how long the rally will last though.

charles, vice chairman at ar yell investments, happy friday to you, good to have you back. >> thanks for having me on. >> market is obviously trying to get accustom to this rally. it started narrow. it's getting more broad. your point is you got to look at what was cheap and expensive prior to election day. >> that's exactly right. people are making the mistake, they're anchoring what the numbers that they remember in october and they're saying, well, they're higher than they were in october therefore they're expensive. that's the wrong way to think about it. value investing is about comparing something to its intrinsic value. yes, morgan stanley was trading for 25 earlier this year, but that doesn't mean at 43 it's expensive. a lot has changed. not just the fact that they're going to be able to declare their own dividend and return capital. so people need to be valuing stocks on their intrinsic worth, not based on moved in the last month. >> all right. and you do have some favorites. you want to give us the three? >> yeah. you do have to look a little harder and see what's still cheap, kkr is our favorite name.

you can't own it in an index fund because it is partnership structure, but we think that's probably going to change this year. it's a wonderful business. we think it's worth $26, it's trading for around $17. borgwarner trading at 12 times earnings because people were worried about the auto business rolling over. we think a stronger economy is going to mean people are going to continue to buy cars at roughly the current rate and at 12 times earnings borgwarner is just too cheap. and the last one we love zimmer, hips and knees, unfortunately demand for hips and knees go up every year as people get older. people are not going to be as worried about price controls in hips and knees as they are in drugs. so we think zimmer is a great company. >> a lot of nodding heads at this table about that. really quickly, charles, is the strong dollar and european banking sector not a concern anymore for anyone? >> no, it absolutely is. that's why the dow hasn't rallied the way the small cap indexes have. because if you're a multinational with two-thirds of your business overseas, you don't get the benefits a lot of

the things that are going to happen in the u.s. and european banks are just not in the kind of shape that american banks are. so we would still avoid european banks, but they're just not going to have the effect on particularly on smaller u.s. companies. >> charles, you mentioned it's getting a little bit harder maybe to find new ideas. i wonder where that takes you as you do prospect for things to buy now. i think it's striking that the s&p financial sector's outperformed tech on a one in five year basis, it's been a big readjustment. so outside of financials perhaps are you looking at things like the beaten down pharma stocks? or is it taking you anywhere else? >> yeah, it's actually a great point on the pharma stocks. things that are related to pharma that have in our opinion been overhit, so for example cvs and cardinal health, have gotten crushed in the last three or four months because of concerns about lower drug price increases. that's going to have some effect, but nowhere near as bad as those stocks have gotten hit. cvs is down over 30%, which is in our opinion way, way

overdone. >> all right, we're going to watch that obviously. you know, it's funny, just the demarcation line of the election and how that changed our perception of central banks, our reliance on them, on every nook and cranny of fed policy. do you think that ever comes back? is that a story for january? or does it really take a backseat to macro activity. >> absolutely. i'm glad you brought that up. this is another thing the market is anchoring on. people are saying, oh, the 10-year was 1.30 two months ago so now at 2.30 it's gone up too much or 2.40. the long term average for the 10-year is 4%. we've got a 2.3% inflation rate. it makes no sense still for the 10-year to be at 2.30. it's going to go up a lot more from here, a lot more. and that's going to affect some businesses positively, like banks. and some businesses negatively, like the bond substitute stocks. so that move which we've seen in the last month is going to continue pretty dramatically in

our view for the next year and a half. >> and i assume you believe the same thing on companies that are leveraged to an increase in wages? >> yeah. now, that one is obviously trickier for certain industries that are more leveraged to higher wages. but we think frankly that some of the pressure may be on overtime rules is going to let up a little bit. some of the regulatory pressure on wages will soften a little bit. even some of the health care cost issues are going to soften a little bit. so that's not all a negative story. >> charles, it's good to see you, thanks so much. we'll see you next time. >> thanks for having me. well, we got some news out of importance from coca-cola this morning. muhtar kent will be stepping down as the company's ceo. he will be succeeded by current president and c.o.o. james quincey. sara eisen, she's with us from the national competitiveness forum in washington, spoke earlier with muhtar kent and brings us up-to-date on these changes. sara. >> coke is making big changes, david, at a time of great change for the industry and for the

130-year-old company. muhtar kent will be stepping down as ceo after nine years leading this company. quincey has been his number two for the past year and a half. he'll be taking over may 1st. kent will be staying on as chairman of the board. kent told me this morning, quote, today is one of my proudest days in 38 years with coca-cola. my biggest legacy, when i asked him about this, he said will be the success of james. he called it the most orderly transition in the company in history. now, this move was widely expected, but it does come at a time when coke is going through some big transformations. it is in the middle of selling off of its bottlers, going to a more asset light model. that is on track to finish by the end of next year. both gentlemen told me this morning it is ahead of schedule. the company's dealing with consumer changes. and they've done so by investing in faster growing brands like monster beverage, and before that keurig green mountain. they've been growing some of their nonsparkling brands,

juices, teas, bottled waters, they've also been shrinking the coke cans into the minicans to squeeze higher profits and more pricing out of that. they've also been proved more popular than the regular coke cans. and the company's been dealing with changing ways that consumers buy beverages. they're going increasingly online and on their mobile phones. in fact, quincey told me this morning that that digitizing the business, he said, was going to be one of his biggest challenges going forward leading this company. he said he's also looking at bolt-on acquisitions to continue that trend and that he will create more billion dollar brands. under muhtar kent the company created seven billion dollar brands. it grew market share several quarters in a row, but overall the declining carbonated beverage in the u.s. has defined his leadership. the stock has lagged both this year and over the past few years. its competitor, pepsico, and the

broader market. pepsico has responded very differently to some of the changes in the industry. they've been growing frito-lay, their snacks business, and focusing more on healthy foods, actually shrinking that company's exposure in terms of sales to colas and carbonated drinks. coke has gone the other way. it is the dominant player in this industry. it has gone all-in on beverages and on sparkling. they see this as more of a focused asset light pure company on beverages, which muhtar also described as one of his major accomplishments when i asked him over the years taking a company that was a hybrid with the bottlers and the beverages and more purely focused on selling and increasing these beverage brands. they're focused a lot on marketing right now. the taste, the feeling campaign was mentioned this morning. and getting people nostalgic with the idea of coke through the mini cans and growing some of those other beverage brands like juices and teas and waters, carl. >> sara, what's coming up?

you got a lot more today. >> yes, we're going to talk to other ceos today. we're at the national competitiveness forum where fred smith, the ceo of fed ex, just spoke about some of his optimism around the new administration, but doubled down staunchly defending free trade. why it is so important not just for fed ex but for america to be trading and having regional trade deals. not something we've heard from this administration. so we're going to ask him what to expect. he's been cited inside trump tower after the last few weeks after the election. hopefully he can share some of those conversations as well. ? it's a great school, but is it the right the one for her? is this really any better than the one you got last year? if we consolidate suppliers what's the savings there? so should we go with the 467 horsepower? or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. ok. sure. but are you asking enough about how your wealth is managed?

wealth management, at charles schwab.

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comcast business. built for business. ♪ welcome back to "squawk on the street." live from the national council on competitiveness in washington, d.c., the ceo and chairman of fed ex just making a strongly worded speech on the u.s. economy. and he joins me now to discuss. fred smith, founder and chairman and ceo of fed ex, good to see you. >> good morning, sara. >> good morning. so you just told an audience here that trade makes america great, which is not something we're feeling in the public mood. and before we get your thoughts on that, we just want to go to the house speaker paul ryan who is speaking right now, quickly.

oh, we doept have that anymore. so i'll go back to you. >> all right. >> so trade makes america great. not necessarily something we're getting in the public right now. and we're hearing from the incoming administration. >> well, you've got to remember, sara, president-elect trump was not against trade. what he's against is mercantilism and bad trade agreements. he's for fair trade. so the speech was basically to note that about 28% of our economy today is trade, that's up from 9% 40 years ago. the problem is we have allowed ourselves to be outmaneuvered with some other countries using mercantilist policies. and there are things in the current trade agreements which are not good. where we have free trade agreements, which is what the president supports, which we

have with 20 countries, we actually have a trade surplus with those countries as a whole. >> and yet you warned of the dangers of rising protectionism, something we are seeing around the globe. how are you seeing that? >> well, of course, over the last few years there's been a tremendous rise in protectionism. it's a natural state of affairs. it's happened many times in the past. we did it in this country in 1929 with disastrous results. the republicans, smoot and and hol lee, trade went down 66%, we went into the great depression. the model is there, you don't want to get into a trade war. >> aren't we seeing that now? >> no, not at all. >> we heard more tough talk last night from the president-elect on china. abusing the system. >> well, in my speech we talk

about china. we've been there for 30 years. i've been going to asia for 50 years since i was sent there courtesy of the u.s. government. we know a lot about it. and china has been quite mercantilistic. the japanese before it. we permitted that in this country, which the president speaks about quite often. and our suggestion is that we focus on broadening our trade agreement with china to produce more u.s. exports, not necessarily restricting all of their imports. >> but do you worry about when the president-elect tweets about china manipulating its currency it sets the wrong tone for those kind of conversations? >> well, i think the reality is that in past years china did manipulate their currency. i think today that's no longer true because the dollar's rising and the chinese are actually trying to bolster their currency. but there's no question about

the fact a lot of countries over the years have tried to pursue mercantilist policies including unilateral currency devaluations to promote their exports to the united states while cutting off our exports to them. >> it's been a slow growth sort of economy globally. >> no question. >> you also talk about the merits of tpp. >> yeah. >> transpacific partnership, which the president-elect says he will withdraw the u.s. from on day one. did you tell him that you support this? are you hoping to change his mind? >> well, i gave the speech which i hope the president or his advisors will read. what our recommendation is to take tpp and improve it. you've got to understand that the chinese are now the second largest economy in the world. they have their own version of tpp. it's called rcep. if we completely abandon tpp and don't improve it, if we cancel

it rather than improve it, then we're going to see leadership in the trade area and in asia to china. that's a very bad thing in my opinion. >> you were one of the first ceos spotted going into trump tower after he won the election. what was that conversation like? >> well, you'd have to ask the president that. i've had the honor to speak to a number of presidents privately. and it's up to them to say what we talk about, not me. >> donald trump as a businessman though you've known a long time. >> yes, i have. >> and how have you known him as a businessman? and what do you think about a businessman running this country? already it's a whole different playbook. >> well, i think it's fabulous. i mean, he's talked about lowering corporate tax rates and going to a territorial system. that's one of the biggest reasons that our exports aren't greater. we do not have a competitive tax system. it'd be like playing basketball and on the goal you shoot at it's two feet taller.

we've impeded our competitiveness by our tax system of 35% corporate tax rate. and we're on one of only two countries in the world, industrial countries, that taxes u.s. earnings everywhere. so we have $2 trillion sitting offshore that with a lower tax rate here would come back, there would be investments and we would have more jobs. >> tax reform, infrastructure spending, rolling back regulation. what kind of growth spurt are you looking for? >> well, i think that the president's policies are very sound. he's articulating them very well. and i think that's what you're seeing in the rise of the stock market. an anticipation of higher growth. and i think that the -- that one of the key areas that the president will focus on after he gets in place are these trade and geopolitical issues, which is what i was trying to talk about in my speech today here.

>> one of the approaches to business that we've seen is him getting on the phone and calling up the ceo of united technologies to talk about keeping jobs in this country at carrier, a campaign promise he made. do you see that deal as a dangerous precedent in terms of offering incentives? or productive policy to keep u.s. jobs here? >> well, it's important, sara, to remember what the president himself last night said about what he talked to the utc ceo about. he said we're going to lower the corporate tax rate and go to a territorial system. we're going to improve these trade imbalances. for instance, mexico gets to deduct their value added tax at the border, we can't deduct our corporate income tax. that was an error, it's a long story, but back in the 1990s. so he's exactly right. we have got to improve these trade disadvantages. but you take lower tax rates,

territorial system, fix these trade agreements, that's what he told the utc chairman. he said give me some time to do this. >> well, he also said though in a speech from carrier that he threatened other companies that he would tax them at the border if they took jobs overseas. as a company that operates all over the world and expands all over the world, doesn't that worry you? >> the president is a master negotiator. he wrote a book about it. "the art of the deal." the president starts here and compromises in the middle. the president wants us to grow jobs in the united states. the best way to do that is lower corporate tax, go to a territorial system, stop this insane regulations -- >> so opening bid to keep jobs here. >> of course. absolutely. and i think we will create a lot of jobs. your andrew sorken this morning i was watching him he was ta talking about this repatriation and will this money coming back

in the united states be dividended out or used for stock buybacks and so forth. the thing that's missing in that conversation is u.s. corporate tax rate. you lower the corporate tax rate, the returns on capital investment become better. you'll see more investment in the united states with the repatriation. but you can't do one without the other. >> in other words you're looking for an acceleration of capital expenditures, job growth, economic growth coming from that -- >> we're already an enormous cap x producer. we're spending about $4.7, $4.8 billion employing machinists in cincinnati by ge and boeing engineers and production people and truck manufacturers. but you've got to remember our investment levels are at percentage of gdp that hasn't been seen since 1952. now, the people on the left will tell you, oh, that's not demand

there so people don't spend it. in my opinion that's not true. i'm on the cycle of job baptiste say production equals consumption. lower corporate tax rate, go to a territorial system, you'll see u.s. ceos investing in the united states. >> not just doing buybacks and dividends and m&a? >> well, there may be some of that, but the mathematics then support more capital investment. that's what the president knows. he's very wise in this regard. >> you also just said in your speech that nafta has made our economy very competitive. donald trump on the campaign trail has called it one of the worst trade deals ever in the history. >> well, i think one of the reasons that the president says that is the example i gave you a moment ago. we cannot deduct our corporate taxes at the border against our exports to mexico. they get to deduct their -- that tax.

now, in the 1990s when that was negotiated by mickey canner, we did have equivalency there. europeans took us to court. our provision that allowed us to deduct corporate taxes at the border was ruled illegal. there that continues. so the president is exactly right. these things have to be renegotiated. but he understands this north american economy as one basic integrated system. it just can't abide these unfair advantages that china has done with mercantilism in japan and he's going to fix that. >> how do you see trading with mexico, canada and the trump administration? >> well, i think they'll be good. i think that our trading partners if they understand what we're trying to go are towards free trade agreements, like we have with 20 countries. >> do you believe in this idea of unilateral trade agreements

and not regional as wilbur ross has talked about here on our air and as the president-elect has talked about? >> well, sure. i mean, i think trade agreements in general are good whether they're multilateral or bilateral. the point is you need to move in the right direction. let's just take a very simple example. the united states probably became the wealthiest country in the world because of the commerce clause. it prohibited pennsylvania from putting a tariff on things going from massachusetts to georgia, if they went through pennsylvania. europe didn't have that. so we just outgrew them. what we basically need to do is to have a level trade system around the world and not mercantilist practices, whether japan or china, both of whom have been very mercantilistic.

we'veak wessed in that. >> you're also impressed by some cabinet picks, who in particular? >> well, i'm a former marine so can't do much better than general mattis and general kelly. they're the globe and anchor. they're great men. i think the picks at labor, transportation, secretary chau was executive before, tremendous executive, knows the way government works, committed to improving our infrastructure which is something i talked about today as well. >> and as someone who does business all around the globe, who would you like to see in the secretary of state role? >> well, gosh, they've had an all-star list up there, our senator corker from tennessee would be great. i know governor romney's great. my friend alan was up there yesterday. alan a genius, knows the world. i could go on and on. he's got a great group of people

to pick from. >> fred smith, thank you for sharing some of your thoughts about the administration, the economy and importantly trade. fred smith is the ceo, founder and chairman at fed ex, carl. >> great stuff, sara. thank you so much. our sara eisen with fred smith of fed ex. as you've been talking athene holdings just started trading here at the new york stock exchange up about 8%. raised over $1 billion. makes it the second largest u.s. listed company to go public in 2016. an annuity provider over at post five. when we come back, president-elect trump not yet saying if he'll give up his stake in his real estate empire. we'll discuss possible of conflicts of interests with the former chief lawyer under bush.

the president-elect's conflict of interest in his business is drawing more scrutiny as his inauguration approaches. joining us this morning to talk about that is the former chief white house ethics lawyer under george w. bush, in minneapolis, our own robert frank joins us here at post nine. gentlemen, thank you to you both for joining us. >> thank you. >> richard, we've been talking

about the capacity of his holdings, would-be exit of operations versus complete divestment. can you walk us through what is legal and/or ethical? >> well, the question here is what makes sense for the president. he needs to focus on being president, not on his business interests. and he really does need to divest of all of his business interests so he does not have conflicts of interest, so he does not have the risk of our government money getting into his pocket, which would violate the constitution of the united states. he doesn't get wrapped up and in bribery investigation and all of the other problems that could come up if the president has controlling interests of business enterprises all over the world while he's trying to do his job in the white house. and he also should not be a television producer on the side. we don't need the president moonlighting. he needs to focus on his job. he wants to create jobs in america, i suggest he give "the

apprentice" to an unappointed american, for example billy bush or somebody else, a friend. >> you're suggesting it needs to be a 100% sale of all shares in every llc? >> not legally required, but that is the best way to go here. that's going to avoid conflicts of interest and litigations of improprie impropriety, constitutional problems with foreign government money coming into his business enterprises. if he chooses not to do that, we're going to have to go through the entire trump organization piece by piece and look for the foreign government money, get his name off of buildings outside the united states, particularly in places where there's a high risk of a terrorist attack, and we don't stick the president's name up on a building in high risk areas. that's just asking for trouble. and there are a whole range of other problems with this business empire if he chooses to hold onto it rather than have an initial public offering or some other transaction where he could

convert this to cash and he'll have several billion dollars of cash if he's worth what he says he is. and then he could be a good president. he's gotten off to good starts, good cabinet picks, but he's got to focus on his job. >> mr. painter, you just talked about bribery investigations, constitutional problems, the challenge here is that there is no law preventing the president from doing this. is it the e mo-- that will be hidden risk to the trump's presidency? >> it's the immoll -- the bribe gratuity laws will come into play any time anyone in the united states government or in the trump business organization combines discussion of u.s. government business with trump organization business. and that could be a very, very bad situation. if anybody working on either side starts to say things that

could be interpreted as a quid pro quo. we have the terrorism risk with the buildings around the globe that have his name on them. and we have a whole range of conflicts of interest that really would best be dealt with by selling off the business interest, taking some of the companies public or all of them. >> but mr. painter, he's not going to do that. and i say that only because he's said repeatedly he's not going to do that. so i'm very curious as to what your expectations are day-to-day for a white house in which he's going to continue to have his holdings, even though he says he's not going to be running the business. >> well, we'll see which ones he actually holds onto. it is possible to try to clean out all of the foreign government money. but you're going to have to tell foreign governments that the diplomats can't stay at the hotels at government expense. you're going to have to refinance the bank of china loans. you're going to have to get his name off of buildings in high risk locations. we cannot risk people's lives

because we have the president of the united states have his name up on a building in a place where it cannot be protected. so we can deal with this piecemeal if that's the approach president trump chooses to take, but it's going to be a lot more challenging. and there is the risk of scandal and also the risk of litigation. the lawyers are going to be looking to sue every piece of this business in order to try to drag him in court and pull out that paula jones case with a supreme court said that the president could be sued in his personal capacity. and if he still owns the businesses, the plaintiff's lawyers are going to be looking for that opportunity. and it could be an enormous distraction. so i hope he sells as much of the business empire as he can to reduce that risk so he can be a good president. >> you do realize that if you're forcing him to do all of this, obviously everyone sees him as a transparent motivated seller, he's not going to get a good price for any of these assets.

>> i think he's a good negotiator. i think he knows how to get a good price. i don't think anybody's ever taken advantage of donald trump. and i think that's why he could be an effective president. but he needs to focus on his day job, being president. and say let somebody else run "the apprentice," let these businesses be sold to someone. he can find a buyer. >> richard painter, appreciate that very much. chief white house ethics lawyer under george w. bush and our own robert frank here at post nine. thanks so much. >> yeah. >> looking forward to more of your reporting, sounds like you'll be busy, robert. >> the announcement is on the 15 9. we'll see what he'll do. >> by the way as we've been talking here dow's up 47. that adds to the new high list along with the s&p, nasdaq, russell and transports. >> and when we come back, energy in the trump era, we're going to head back to washington where we speak with energy giant exelon's ceo christopher crane. much more ahead.

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good morning everyone. i'm sue herera. here's your cnbc news update at this hour. secretary of defense ash carter holding a joint news conference with afghan president ash afghani in kabul after a surprise visit to that country. and he reaffirmed the u.s. commitment to afghanistan. >> the united states' presence continued to support afghan forces and strategic partnership with the government of afghanistan demonstrates to the world that america is and will remain committed to a sovereign and secure afghanistan. south korean lawmakers voting to impeach president park geun-hye following allegations of a corruption scandal that left her isolated and loathed across the country. according to career builders annual holiday survey 69% of employers are planning to throw a holiday bash for their

employees this year. that's a 3% jump from last year. 54% of employers plan to give employees a holiday bonus. that's about the same as last year, but 15% say the bonuses will be bigger. little bit of holiday cheer perhaps. that's the cnbc news update this hour. let's go down to washington and sara. yeah, good sentiment indicator there, sue, thank you. welcome back to "squawk on the street." we are live from washington, d.c. at the national competitiveness council wondering what the new administration will mean for big business. signals of new energy policy under president-elect donald trump who stands to benefit and what does it mean for consumers. joining me now to discuss that here is chris crane, he is the ceo of energy company exelon. chris, good to see you. >> sara, thanks for having me. >> so what does the incoming administration mean for the country's biggest nuclear energy provider? >> well, it's yet to be seen.

the administration has talked about making sure we have a resilient but affordable grid going forward. we have to see how that plays out in regulation. >> all signs though do point to deregulation. and your company has been a big beneficiary of president obama's policies. of cleaner environment, clean energy, are you expecting that to turn? >> well, as far as a benefit from obama's policies, the policies have not been inactive, the clean power plan is still in debate and adjudication at this point. we have been beneficiary of the state requirements where our customers and our states want to have clean, reliable and affordable power and being able to make some adjustments in some marketplaces to compensate our nuclear plants and our renewable facilities on that level playing field has been helpful. >> but what about the fact republicans have not prioritized limiting carbon emissions and now that they're in control of

congress doesn't appear a lot of work is going to get done on that key issue for you. >> well, what's happened in the last decade or so is environmental policy has gone in one direction, energy policy has really gone nowhere. the two have not been combined. in a very bipartisan way the republicans, the democrats have incented green or renewable technologies to come online. that is more of an environmental policy. it does not match up with the energy policies. and so it's made quite a bit of confusion on investment and return on investment on the assets on the grid. so what we're hoping with the trump administration is we step back, we look at what's the outcome we want from an environmental perspective, and what's the outcome from an energy perspective and see if we can merge those together. so we all can provide the clean, reliable and affordable energy to our customers. >> what about his pick to run the epa? epa critic scott pruitt.

what sort of policies do you expect from him? >> well, it's yet to be seen. we know the position of the attorney general, have seen the position of the attorney general on carbon. and on fossil fuels. but we also know that the supreme court has mandated that epa regulates carbon. so we'll have to see what -- how that takes place and how they fulfill requirements to the courts. >> what does it mean for consumers and energy consumption? >> i think we're going to be able to have a good debate, as i keep saying, to make sure it's maintained affordable. reliable is key. we have to have a secure grid. we have to have a reliable grid. it has to be affordable and our customers want it clean. so keeping those three balanced together i think is going to be critical. and we do feel like we can have the right debate now. >> how dependent is your business at this point on subsidies? and do you worry about that aspect of it? >> no. we have very few investments tax

credits or production tax credits that come into our cash flows. they're there, all of those are phasing down over the next couple years across the renewable industry. as far as the nuclear plants, two states now compensate or will compensate on the zero carbon benefits, the societal benefits, but it's a small part of our business. >> the other factor we were talking about is as a utility, utilities have been an interesting group, losers of this climb in bond yields that we've seen. but you've got an interesting model where it's actually helping your earnings. >> right. so we're correlated positively to the interest rate increases. our pension liability is calculated off the ten-year treasury. our utility in illinois is 580 basis points off the 30-year. so the rise that we've taken since the beginning of november in these rates has been very accretive. >> all right. thank you so much for joining me to discuss some of the implications. still a lot of question marks and unknowns.

chris crane is the ceo of exelon and some of the environmental and energy policies we're expecting from president-elect donald trump, carl. back to you. >> sara, thanks so much. our sara eisen in washington, d.c. as we go to break, take a look at shares of broadcom up by more than 5%. latest earnings came in well above estimates and perhaps more notably doubled its quarterly dividend to $1.02 a share. it's the top gainer on the s&p. back in a minute. how was your commute? good. yours? good. xerox real time analytics make transit systems run more smoothly... and morning chitchat... less interesting. xerox transportation services... ...soon to be conduent. thank you for calling. we'll be with you shortly. yeah right... xerox predictive analytics help companies provide a better and faster customer experience. hello mr. kent. can i rebook your flight? i'm here! xerox customer care services... ...soon to be conduent. wait i'm here! mr. kent?

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think that the stock rally can continue rolling? we asked the nobel winning economist in a wide ranging interview. to see it go to tradingnation.cnbc.com. more "squawk on the street" coming up.

welcome back to "squawk on the street." as you can see stocks hitting record highs yet again with health care standing out within the s&p 500 up more than 1% so far in early trading. big gainers like biogeneral,

alexon, allergan and pfizer helping to lead higher this as the nasdaq etf, ticker ibb, about 2% higher in early trading. today's gains pushing health care to positive territory for the week. but the sector is still the worst performer this year down almost 5%, mike. back over to you guys. >> dom, thanks very much. as this market rallies, the mom and pop investor seems to be back. that's according to our quarterly all america economic survey. steve liesman joins us with the exclusive results. hello, steve. >> yeah, mike. mom and pop look like they're getting bullish on stocks. and whether or not they're invested remains to be seen, but we want to show you this extraordinary post election surge in stock optimism. you can see here when we ask people is it a good time to invest in stocks, it's come up to 40%. and that's a ten-point jump. you can see the decline in those who say it's a bad time. we've had some moves like this, but never to the point where that blue line gets so far above the red line. you can see we've had times of a lot of pessimism. that's characterized a lot of the public's feelings about this

rally or the rally over the past several years. they haven't been involved. these numbers suggest perhaps they might become interested in that we have this optimism over whether or not now is a good time to invest in stocks. and what is the best best inves? interestingly enough, when we asked the public, real estate again is the most chosen asset class. you can see here gold came down and real estate came down and stocks came up when we asked people what the best investment is. and it's very interesting, there's a political element to this in the postelection. you might expect it. take a look at what's happened by individual party. the preference for gold went down among independents, demontagnacs, and especially among republicans, and that translated over my left shoulder so to a preference for stocks. independents had a preference for stocks in terms of the best investment as did republicans. a couple other points. the overall framework of this

survey shows a 17-point jump in the outlook for the economy with 42% now saying the economy will get better. that come comes, by the way, gu weather optimism about what's going to happen to their wages, what's going to happen to their home price, and david, this is driven very much by republicans becoming more optimistic, independents somewhat more so, and that offsets more pessimism on the part of demontagncrats. david? >> john harwood has news on a potential appointment, economic appointment of somebody who's got a long history on wall street, but i guess not a done deal, john. >> not a done deal, not officially confirmed but it looks as though jerry cohn is going to become the third goldman sachs executive to chair the national economic council. of course that is a relatively recent position created under the clinton administration. bob ruben held it then, steve

freedman later held it, and our colleague, stephanie ruehl is reporting that gary cohn has been offered that job. on the transition call a few minutes ago, transition officials did not confirm that appointment. gary cohm had been rumored as potential candidate for the office of management and budget. he is not someone steeped in government experience but he's a very roll up your sleeves and practical deal maker and goldman sachs executive. so it appears that gary cohn is going to the nec. we'll wait for official confirmation later. >> somewhat surprising. gary cohn is a markets guy. it's interesting that he would take that job. i obviously can't speak for him. >> that becomes the third former goldman sachs executive to join the trump administration. steven mnuchin of course will be treasury secretary and also

steve bannon is the chief strategist at the white house. so for a president who ran as a populist and breaking up the establishment, he's got a lot of goldman sachs establishment in his administration. wanted to bring to viewers' attention one other thing. president obama has ordered a review by u.s. intelligence of the cyber intrusions on political entities including the hillary clinton campaign during the election and has directed for that report to be delivered to him before he leaves office. so it appears that he is not going to turn over the key os the white house without getting a full accounting of exactly what happened in terms of the hacking of the dnc, the clinton campaign and others during the fall campaign. >> yeah. interesting news point there. mike, you know, cohn is -- first of all, he's president of goldman sachs. so he has a significant job there as opposed to bannon, who was a banker there many years ago, mnuchin, who had a fairly

senior role at the firm for some time but has not been there for many years. this is a different animal entirely. i could have imagined him as being on the short list for treasury secretary. >> exactly. somebody with that kind of capital markets focus is a little more in tune with the treasury job, you would think. it will kick off another conversation about goldman sachs, of course, right, because perhaps he was not necessarily considered to be any obvious or leading front runner to replace lloyd blankfein as ceo, but it is interesting he'd be willing to take this role. it seems as more of an advocacy role, somebody who's a front-runner for the president's agenda and getting legislation through as opposed to somebody who's necessarily getting deep into, you know, economic and markets policy. >> yeah. again, we have no word from mr. cohn, of course, but that is interesting. have to admit. reading up on the national economic council. both of us, we're perhaps more familiar with the council of economic advisers. take a look at the markets as we send you to break.

right near highs on everything. so what else is new? how's your mother? umm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

let's get a check on oil, send it over to jackie deangelis. >> heading into the weekend,

we're seeing oil prices on the rise and very much supported, over $50 a barrel. now, of course the risk here is noncompliance by russia, but i spoke to peck former secretary-general abadri who says he thinks there's incentive for all the nonproducers to comply. a new record, 38.86 million barrels but he said the cut announced will help with this. are there risks to the market? certainly. >> the biggest risk for the market if the shale oil and maybe not shale oil but all non-opec, if they start producing like what they did in the last six, seven years. >> okay. so he is worried about the u.s. producers taking the opportunity here with higher prices to pump more and that could have the opposite impact that opec was hoping for. it could push these prices down. so that's the concern that everybody has to watch in the

marketplace. i spoke to other industry leaders, harold hamm was there last night, el-badri and hamm got lifetime achievement awards, harold said he thought this was a $50 support level, that the worst is behind us, and that, in fact weather the trump policies that are going to be rolled out next year, we'll see the energy industry do quite well and that these players in the united states will self-regulate nap's the key. there are so many unknowns at this point. we've got a very strong dollar. so this could be a little bit of a rocky strad, but when it comes to oil prices as you all know, very important to the overall equity indices as well. they keep those on the move higher and the energy sector has done very well. so these are all things to take into consideration when it come toss the crude oil trade. now, i will say this -- there are a lot of people talking about the optimism as we go forward. they believe rolling back regulations will take the industry to new levels. and they're very optimistic that, in fact, oil prices by the end of next year could get to

the $60, $70 level, david. >> thank you very much, jackie. jackie deangelis at the nymex. we hit highs today on all three of the big indices. the s&p, the nasdaq, and the dow jones industrial. that 'cause it for us on "squawk on the street." let's send it over the carl for "squawk alley." >> thanks, david. good friday morning. 8:00 a.m. at facebook headquarters out west, 11:00 a.m. on wall street. and "squawk alley" is live. ♪ ♪ in a white room with black curtains ♪