and "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box." >> good morning. welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernan and melissa caruso-cabrera. the dow would open 21 points higher. the nasdaq looking to open 25 points down in the s&p 500 looking down as well, but only largely. stocks in china tumbled overnight after regulators banned insurance companies from buying stocks. the shanghai composite fell 2.5%. the hang seng fell nearly 5%. and the nikkei closed higher by .08. >> do the rules ever stay the same there? every day there's new financial regulation that you can do this.

they used to force companies to buy stock. now it's prohibited. >> earlier in the week when we did 300 i messaged you and said, this is definitely it. we have to call the top here, definitely. this has got to be it. >> they keep going. >> another 142. >> hope springs eternal. >> 19756. what is interesting is that, you know, things haven't even been done. so we don't know whether deregulation and cutting taxes and pro-growth supplies, we don't know whether they are going to put them in. but there was a question recently about whether those things even work. so now we're seeing this, we don't know if they are going to do it, but just the possibility we might do them is worth 2,000 points on the dow. >> and don't you think every single cabinet member he names leads you to the conclusion that it is going to happen. it's got to be the most pro-business cabinet since ronald reagan. >> i had a great talk with al

gore. it was interesting, it was nice, we got along really well. and he picks the oklahoma attorney -- and it's been happening one after another with things like that. >> how rick perry could be running the department of energy that he thinks shouldn't exist. >> obamacare, we had a good talk about obamacare. i even like some of it. and he picks tom price to do it. tillerson is the one that you guys might decide, this might be the one that -- >> i like it. >> you're not going to draw the line here? >> he lives in climate change, my friend. unlike you. he does, i've had conversations with him. >> i've had conversations with him, too. >> i've had conversations with him on a golf course. you know, you think he has no -- you don't think he has to actually -- >> do you think -- oh, so tell everybody. >> i have talked to him about it. >> so he lies when he goes in public? >> the same people are highly skeptical that co2 is the

ultimate determinant -- >> are you suggesting what he said publicly he's lied about? >> no. i don't know. >> he's telling you something different than he said publicly? >> when i pinned him down on it, he expressed skepticism about the afintive manmade elements of climate change. >> can i parse this, he can believe that the temperature is rising but it's not necessarily because of man? >> i've heard him say publicly he thinks man is responsible for this. >> what do you expect the ceo of exxon to say publicly? >> you are making his -- >> it wasn't public. i'm saying it wasn't public. his confirmation hearing could be a problem if he's a denier. >> it's going to make it a lot harder. absolutely. >> trump can't be president because he's a denier. >> just because the president -- by the way, he has republicans in the party that have other views in the world. >> here's the thing, climate

change will be the least of rex tillerson's issues during the confirmation process. >> right. >> in fact, it's the least of the normal person of the american public's concerns as well. dead last every time they talk about it. and around the world, in fact, i have seen polls. except for -- the whole liberal mindset, you have to get used to things starting to swing the other way, my friend. >> i recognize that things -- i'm not sure they are going to swing the way you think, but we'll see. >> you're kidding, really? but you're sure -- >> let's do headlines. >> let me just ask you one thing, does co2, does it cause the warming or is it causing any bad weather that we see anywhere? is it causing more storms or more tornadoes or more droughts or more floods? or is it just -- >> i'm no scientist, but my understanding is it is causing some degree of warming and that warming unto itself may be causing storms in other types of surges we haven't seen. >> i have seen much colder winters are predicted now.

i'm serious, i'm going to send you the latest -- >> clearly other people have different views on this, there are. >> interviewing insurance company executives about whether or not -- let me finish my sentence. >> no, because warren buffett will tell you on the annualized basis year to year he's not worried, but long-term there could be a problem. that's all. you can't price it. you can't price it on the year to year. >> if you think there's absolutely a connection between rising temperature and more catastrophic events, then of course you can raise prices when it comes to insurance. >> the church of climate change -- >> the church of climatology at this point doesn't know if they are talking warming or whether it is adverse weather event. >> it's both, but it makes it so much more when it is justifiable. >> when did trump announce you're joining the administration. >> trump wasn't even running --

>> given all the comments you have, i'm hoping there's an opportunity in the office for you. >> you got me. you got me. you were ready. you were armed and ready. >> just saying. >> here are the big stories. roll the teleprompter, please. oil prices are surging to their highest level in a year and a half. that's after opec and non-opec producers reached a deal to reduce output to cuts of 1.76 million barrels a day to 24 countries that currently supply more than half the world's oil. look at the screen, it went as high as 57.89 this morning. wti is at 53.79. it looks like one of the highest points in the session with gains of more than $2. they are gains of more than 4% for both wti and brent. natural gas, by the way, look at that. lower by almost 20 cents. a decline of more than 5%. in corporate news, boeing reaching a $17 billion deal to

sell 80 jet liners to iran. this is the first major transaction between an american company and iran since donald trump was elected. the deal was first announced in june, officially sealed yesterday. the u.s. companies including boeing began talking to iran earlier this year after a nuclear record removed sanctions on tehran. but there are questions on whether donald trump may look to slow or stop dealings with the islamic republic. meantime, airbus is close to finalizing a deal to sell passenger jets to iran as well. because of sanctions, they have some of the oldest fleets in the entire world. so the country is desperate to upgrade their planes. ford's ceo says president-elect trump's threats will not change the plans to move small car production to mexico. trump said he'll impose tariffs on companies who move jobs abroad. but mark fields says the ford focus will be moved from michigan to mexico as plan because american consumers demand low prices for small cars. and cnbc confirmed google is planning to expand

services in cuba. that gives cuba an access to google servers that accelerate internet speeds for google products including goe ining goh and youtube. eric schmidt is expected to sign the deal in havana. tomorrow we get novel import prices and the fed begins a two-day policy meeting. the announcement on rates comes on wednesday at 2:00 p.m. eastern. we are 2:50 now on the ten-year. when we did the futures, we should have done oil and the ten-year is what we should have put there, followed by janet yellen's news conference. >> we have not showed the ten-year yet. 2.05%. >> 1.05 on the euro. 1.15 on the yen. the dollar is strong. what is weird, the dollar is strong as oil is up 5%. >> that usually doesn't happen. >> which is weird. those are the things that probably needed to be said. a quarter point interest rate hike is going to be announced. and we'll get november sales and ppi.

on thursday, the november cpi and the latest philly fed survey. finally on friday, november housing starts. president-elect donald trump may be about to fill two cabinet positions with the coo of exxonmobil and one-time political rival john harwood is joining us now from washington with more on that story. good morning to you, john. >> good morning, andrew. for weeks we have been watching this roller coaster on secretary of state. and you've had moments where rudy giuliani, where mitt romney, where david petraeus, where bob corker appear to be the front-runners. it looks now, not final, not official, and donald trump even tweeted some mystery about it over the weekend, but it appears that rex tillerson, the ceo of exxonmobil, is his likely choice to become secretary of state. he defended that choice yesterday on "fox news sunday" with chris wallace. >> in his case, he's much more than a business executive. he's a world-class player.

he's in charge of, i guess, the largest company in the world. it's been a company that's been unbelievably managed. and to me, a great advantage is he knows many of the players. and he knows them well. he does massive deals in russia. he does massive deals for the company, not for himself. >> massive deals in russia, that's going to become a point of controversy. you had some republican senators yesterday including marco rubio, put out a statement saying a closeness to vladimir putin is not a trait i'm looking for in the secretary of state. in light of the cia's conclusion that the russian government was tied to interference in our election, you did have a bipartisan call for an investigation. don't know where that's going to head. now there's another cabinet post that donald trump is looking to fill, possibly this week. and interestingly enough, his choice may be former rival rick perry, former governor of texas, somebody who called donald trump a cancer on conservativism in

his own campaign. and he's the likely choice for secretary of energy. that just happens to be the agency that he forgot about when he and i had an exchange at the cnbc debate in 2011. take a listen. >> you can't name the third one? >> the third agency of government, i would do away with education, the -- commerce, and let's see -- i can't, the third one, i can't, sorry. oops. >> now, he was talking about the department of energy, wanted to get rid of it, now he may be heading it. there are other contenders as well. we'll be watching for appointments all week, guys. >> thank you, john. appreciate that. in the meantime, billionaire bill gates announced a $1 billion fund that's focused on combatting climate change through energy innovation investments called the break through energy venture fund. gates will serve as chairman of

the fund and anticipates being actively involved. jack mao will serve on the board among other investors will be saudi arabia's prince. and jeff bazos will join. bill gates will be sitting down with becky quick, an exclusive interview right here tomorrow at 8:00 a.m. eastern time on "squawk box." we'll get back to the other markets, here are some of the other things to look at here. we'll look at currencies. number one, it gets dicy when -- actually, it was 105 earlier. those are the lowest levels we have seen for it recently. there's the ten-year, 2.51. i've had people say, are the fed going to raise? it's like -- >> it doesn't matter, the ten-year is already done. >> it's already done. and it's kind of interesting, if you do worry about where interest rates are based on what we may see in the coming

administration, it seems like we may be too low based on the kind of plans that the incoming administration has. it's like we may be playing a little bit of catch-up. the next couple of years with tax cuts and theoretically a trillion dollars in infrastructure -- >> deregulation. >> and all the other things, deregulation, could be much faster economic growth. even if it is temporary, it just seems like they might be behind. they haven't -- you know what? it's one thing about the last eight years, they haven't been behind the curve at zero based on the economic growth for the past -- it's actually been okay. it's actually been okay to stay at zero. stocks coming off five positive weeks in a row. really, we forget, i think, we were at 1705. we were below 18,000 for the election. it is 2000, it is a really

2,000-point. the dow and nasdaq all broke records. the fed will start a two-day meeting. joining is ed campbell, managing director. julian emmanuel is here from ubs security. and all the correlations we have seen that we took for granted for years and years, some of them were thrown out the window. oil is up 5%. the bond market has been, like, imploding, or at least rates have been rising and the stock market goes up every day. so all these correlations or linkages are suspect at this point, maybe for a gooden are, maybe because we'll have faster growth. ed? >> yeah. and until the research we have done on pe ratios and interest rates, we may have talked about earlier, but our view is that higher interest rates are not really an obstacle for good stock returns. that p.e. ratios are generally higher and stock returns are

better in a normal interest rate environment than in a very low interest rate environment, because very low interest rates signal deflation risk and anemic growth. so i don't think higher interest rates are an obstacle for brighter stock market returns. and we're generally bullish looking forward. >> and you saw oil today. i'm sorry, gold, 1150. that makes sense with the stronger dollar. but if we're blowing all these, you know, if we're blowing the deficit out and ennation is coming back, when does gold move? >> at some point the dollar needs to take a rest. along the way, i mean, we really have discounted -- if you look at it, the biggest thing for us is ceo confidence. you look at every measure of ceo confidence is basically soaring over the last 30 days. and that's really been, you know, the story. america first is trading the dollar higher. and ceo confidence is why oil and the economic expectations have increased as much as they

have. >> so we get 20,000 before the end of the year do you think, ed? >> we could get that this week. it's only half a percent higher. the 21,000 is in sight before the end of next year. >> 2300 on the s&p to 2400 next year. that's like a 2% on the low end, i mean, really going out on a limb, what do you think 2017? >> i think 2017 is going to be a good year, we certainly could see 8% to 10% returns on the s&p 500. that's going to compare favorably to what you get in fixed income. >> you get 2600 or 2700 then. >> where you think you're going to get negative returns out of bonds. so i think the dominant theme that you're likely to see for 2017 is a continuation of the u.s. reflation theme. this trade is going to wax and wane, but we do think it's a new trend. >> donald trump is not a vix 11

president by any stretch of the imagine nation. he's made it very clear that part of his plan is unpredictability with the rest of the world. by that standard, the market is likely to trade higher because of this growth impotus. if you look at the last year and a half, you have the ups and downs, big volatility moments. we continue to expect that will be with us in '17. >> so in 2017, what is your prediction for the highest quarterly print on gdp next year? >> i think you will see a three handle at some point. >> we saw that last quarter. anything above -- >> in terms of quarterly gdp, you could get high numbers. i think in terms of the overall year, we're looking at something like 2.75 or so. >> so we're not going above 3.00 next year? >> the speed limit in the economy is a lot lower given the

productivity growth. but i think we'll see more growth than we saw this year and more inflation. >> the cruise liner around, eight years to turn it around, we're not ready yet with 4.5% unemployment at this point? we're not ready for liftoff? >> 2.75% growth for a mature developed economy is pretty good growth. >> it's okay. just relax. >> let the consensus lay there. we'll let the conventional wisdom stay there. >> do you think we can achieve 3% to 4% growth on a trend basis? i think that's probably too much to ask. we could achieve that over a shorter period of time. >> in the '80s we were not a developed economy? >> well, in the '80s we had faster labor force growth and in the '80s we had faster productivity growth. >> in the '80s, maybe they start mentoring -- >> i do think we can get a rebound in productivity growth, but i think 3% to 4% growth is

probably too much to ask for. >> you would think that -- >> larry kudlow thinks possibly 5%. >> i think we can get at least a 4%, but they will realize that there's more than just snapchatting. you can do tinder. and then you meet people -- >> does that help productivity growth? >> yeah, at the end, if they get married. >> they have babies. follow us here. >> you can't just hook up forever, right? >> settle down. >> how many times are you going to -- you want to be with somebody you care about. >> what you want to see in the stock market, you hit upon this -- does this situation get the millenials interested in investing for the first time? >> that may happen. i think that is possible. >> that's your up side right there. >> do they start investing in individually equities or start being etf and mutual funds? >> but it leads to buying. >> yes, but it changes the equation on how the whole thing

works. >> we think it's going to be a good year for active management next year. >> okay. thank you. >> are you active management? >> we are. >> it might be a good year. that's when you really need guys like you, julian. thank you. i love when you guys say that. coming up, much more on the trump transition, a closer look at the potential secretary of state pick in rex tillerson. what is next for exxonmobil if he takes that job. and later, new reaction from china over trump's comments on the one china policy. "squawk" returns in a moment. ♪ 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.

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welcome back to "squawk box." the dow is up 23 points. the s&p is flat. the nasdaq indicated down over 20. take a look at the yield on the ten-year after it moderated its upward move a little in recent sessions below 2.40. we are solidly above 2.40. we are at 2.5%. that's a new intermediate term high in the yield. and the crude prices also similar.

i would think it's been a number of months, we are up 5%, but we are still up solidly up almost $54 a share on wti and crude. president-elect trump is expected to name exxonmobil's ceo rex tillerson as secretary of state. what does this mean for the shareholders of exxon? this hasn't gotten a lot of attention just yet. >> good morning to you, andrew. this is a two-part story. first for the company and management. we'll look at that. the succession plan and the heir apparent were put in place last year. darren woods worked his way up through the ranks at exxon starting as an analyst in 1992 and has overseen the company's business units. the consensus is it should be a smooth transition, but the

bigger question is how will this impact the industry's secretary of state? and shares of exxonmobil as well? as ceo, he oversaw operations in over 50 countries. while he has no normal diplomatic experience, he does have long-standing relationships with global leaders. tillerson is being scrutinized for his ties to russia and the relationship with vladimir putin. over deals done there with rosneft. the central issue is if he would put business ahead of other geopolitical issues. this is a concern some worry has a broader impact even though it could be positive for energy companies in general. how would tillerson advise the president-elect on iran? a country with plentiful oil resources but a regime with policies that present so many conflicts. expect many of these questions to be raised by the senate in confirmation proceedings, guys. >> would he be soft on russia is the idea? not just because -- because it would help exxonmobil in theory, but does he have some kind of

relationship -- i keep reading he's close with putin, but just because you have negotiated deals with the leader of a country doesn't mean you're pals or friends or that you like each other. >> this is a different role than being ceo of a company. it's being a diplomat. >> the trump strategy is different when it relates to russia, which is to say he may believe if we can become friends with russia, then he can put pressure on china in a different way. meaning the way we have traditionally thought about the various chest pieces are so different than -- >> i would argue the last two presidents thought they were going to do that. president bush looked into vladimir putin's eyes and saw his soul. and hillary clinton showed up with a reset button with the big mistake. i mean, every president recently has tried to do this. i think maybe if you have somebody who really does know vladimir putin, maybe you're at an advantage. >> you know, there is something to be said about the enemy. if you can crush isis, you might

be -- >> a reason to boric wiork with russia. some people think isis is more of a threat than co2. some people, not everybody. coming up -- thank you, jackie. wide he held stocks that could be in your portfolio from walmart to starbucks. the stocks that could see an effect because of the trump presidency is next. 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. come on! why doesn't verizon offer unlimited data like t-mobile?

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are probably really close to where they were five minutes ago. they are up 23 on the dow, down .33 on the s&p and down 24 points for the nasdaq. at trump tower in manhattan, a small group of tech execs included larry page, apple ceo tim cook, facebook's ceo sheryl sandberg, microsoft's ceo and cisco's ceo, ibm's ceo, intel's ceo and oracle's ceo. they also say amazon's ceo jeff bezos was invited and likely to attend. >> i'm still wondering on elan musk. >> he's not on the list so far. >> do you want him on there? >> i do.

i think he's one of the most fascinating people in america right now. if you look at what he's doing both with tesla and solar city, he's created 1400 jobs. i know there's the government subsidies that you have -- >> i was just going to say, he's working hard on subsidies. >> we can talk about that. donald trump has no problem in using social media to call out big business as we saw last weekend with boeing. now we're looking at how a trump target could have an effect on the biggest names that could be in your portfolio. joining us is chris malone from fidelity partners, which is latin plural for fidelity. thank you for telling me that without studying latin. are there companies more likely to be in the targets of donald trump? are you predicting names you worry could fall because he tweets about them? >> i think there are easy targets. >> like what? >> for instance, volkswagen is an easy target. for investors who are seeking to

kind of identify profit opportunities and threats during a presidency by donald trump, we really have to expand our thinking beyond what drives the markets to include what drives president-elect donald trump as a man as well. >> we're showing people right now, walmart, booz allen, volkswagen and samsung electronics. booz allen is who edward snowden worked for and a second individual was arrested this summer accused of stealing secrets. it seems pretty obvious, what do you think happened? >> 97% of revenue comes from government contracts. the nsa is the largest client, the most popular spy organization in the world. donald trump has a lot of leverage given his emphasis on cyber security. >> when you look at the one-year chart, it has risen dramatically since the election of donald trump. so that could be something that if the investors could be very disappointed if you turn out to be right. >> exactly. there's all this run-up, everything related to defense, but if donald is going to look

to do two things with the bully game, he's looking to score points. so this economic group that you mentioned, ceos coming together, he's going to look to score points with the companies and e tract the wins from that. and then he'll be able to settle the scores with organizations that he thinks have fallen down, similar to booz allen. hold them to a higher standard. in the long run, they will do well in terms of defense spending, but he'll extract concessions out of them. >> walmart? >> i think as donald trump gets into the guts of obamacare and looking to roll that back in certain places, an easy target are the companies that are holding down the hours of their part-time employees to avoid paying them benefits. i think there's argument to be made, they are not paying their fair share and could put real pressure on walmart to step up and do the right thing, reduce the burden on taxpayers for health care coverage. >> very interesting because walmart, the booze allen chart was dramatic in response to the election. walmart has not responded that

much even though it's up 18% year to date. samsung? >> sam susung with the recent crisis related to galaxy 7. that i are in a weak position rebuilding their reputation, but a small production for semi-conductors in austin, they are selling tons of phones in the united states. put some jobs here. and i think they can have a lot of threat from him if he were to apply pressure. >> so i see in the notes that you think tesla the trump-proof, meaning you think he could tweet about tesla and still it would survive or he won't tweet about tesla? >> tesla is an example of a large following. they have one of their own. so he could probably have more points and more success scoring a win from them, earning respect, gaining some support from elan musk than he could to hammer them down. frankly, they create a lot of

jobs in the united states already. >> and it's hard to flip that around. i was curious where you stand on both apple, since there have been conversations with tim cook and his encouragement we'll call it from the euphemism for more than just encouraging somebody to manufacturing here in the united states, also where do you think amazon lands given the latest comments he's made? >> the ceos have strong followings, over 60 million iphone users in the united states. 70 million amazon prime customers in the united states, very loyal followings. so apple and amazon are two different cases. with apple, we're the largest most respected companies in the world. if you have gain their support, extract minor concessions, he'll consider that a win. with amazon, the criticism of them is really about "the washington post." and the criticism he received from jeff bezos and wanting to get more favorable coverage from the "washington post." and so i think that amazon was an easier target for him to go after, but again -- >> you don't think he's going to try to break up amazon then?

>> no. i think he's going to try to rattle the sword a little bit and say, i expect more favorable and reasonable coverage from the "washington post" and jeff bezos, but amazon is not a soft target for him. >> hence you put those on the trump-proof list. along with starbucks as well. >> yes, starbucks, they are kind of the model citizen in the united states as an employer. paying benefits for the part-time employees, got high wages, education assistance, howard schultz is very vocal with liberal politics, but i don't see donald trump being able to kind of leverage very much pressure on starbucks. >> chris, thank you for coming on. >> pleasure to be with you. when we come back, donald trump calling out the one china policy over the weekend, and now china is firing back. we'll bring you details of that as we return to a break. we'll check on what is happening in the overseas markets. we are back in just a moment. d can you explain to me why you recommend synthetic over cedar? "super food"? is that a real thing? it's a great school, but is it the right the one for her?

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welcome back to "squawk box." time for the executive edge. president-elect trump questioning the 44-year-old diplomatic recognition of the

one china policy on fox news yesterday. >> i don't know why we have to be bound by one china policy unless we make a deal with china. having to do with other things, including trade. >> this morning china's state media is lashing out at donald trump. eunice yoon is joining us live with more on that reaction. >> reporter: thank you so much, michelle. the state-run news agency xinhua just posted commentary moments ago. the headline is principles, not impulsiveness are needed for u.s./china ties. this comes after the "china times" describes trump as naive like a child when it comes to foreign policy and a man who has no idea how dangerous his words can be. now, that's the tenure of the state press, but officially beijing also issued a stern warning top donald trump saying that if he were to backtrack on the one china policy, that the u.s. and china would have nothing to discuss. this is what the foreign ministry had to say earlier

today. >> translator: the one china principle had political backlog for the compromise if it is disrupted. >> reporter: china considers the one china policy as core to the country's principles. in fact, the u.s. has recognized it since the 1970s. and that's why there was so much shock by so many people in china when trump started calling that into question. and guys, i've been talking to business people all week about this, and everyone i've spoken to is deriving a little bit of satisfaction from seeing china so rattled and irritated. but at the same time, one long-time china watcher was telling me all this confrontation would be good if it leads to something productive, but his concern is that he believes when it comes

to the relationship with china and the u.s., you need a scalpel instead of the unguided missile to try to maneuver the relations. guys? >> why are they deriving satisfaction? >> you're not? >> i think it's pretty much because of all the issues that we have talked about, the currency, trade, a lot of companies here are so frustrated because of what they perceive as a lack of market opening. and so all of these -- the american companies have so many legitimate concerns and frustrations with what they see as protective policies in the part of china. but they do want to see somebody rattling the cage. at the same time, what this one china watcher was saying to me was he was concerned that taiwan is such a sensitive issue that it just starts to -- it could potentially lead to confrontation for confrontation sake instead of actually addressing important investment or other economic issues that many of these american companies want to see addressed by china.

>> which is exactly why i think probably donald trump picked it. he finds the deepest and most hurtful scab and -- right there, we saw that through the entire primary and through the election as well. apparently it's not going to change now. eunice, thank you so much, from beijing on that story. >> do we worry that it opens up something -- if you woke up one morning and there was some true action that takes place as a function, then it's not just a -- >> we'll see if it actually happens. >> then it's not just a game of chicken. >> the united states doesn't have to tip-toe around the world. when you asked that question, weren't you one of the people thinking some satisfaction was there? >> i just wanted to draw out the answer for the benefit of our viewers. >> okay. you can take a congratulatory call from anyone. >> were you here when the ceo was here and we had a discussion with steven roach? >> i do remember that.

let's talk about hollywood right now. the weekend box office, disney's "moana" taking the top spot. the animated feature with dewayne "the rock" johnson brought in $18 million. one of the songs is from your friend from "hamilton." closing in on a second, the r-rated comedy "office party" debuted with $17.5 million. in the movie, jennifer aniston's character tries to close her brother's business. he tries to impress a climate. >> that's a great premise, the office christmas party. so many things can go wrong. >> and the latest "star wars'" film "rogue one" will open this friday. the crowd went wild with applause when the credits rolled. i heard so many good things about this. the numbers will be off the

charts. >> it's a good one. there have been a few disappointments in the "star wars" -- >> the last one did tremendously well. but this one, apparently, it's unclear. this is supposed to be a closed end, meaning -- >> it's a stand-alone, not part of the trilogy. >> there was word that "rogue one" could become its own -- but it's not set up like that. so the question is, what happens next? >> that's a guy from "the night of" -- >> that is maybe next on my what to watch. >> the guy is in -- he's a star of "the rogue." coming up -- you're behind on watching "star wars." >> i'm just getting to the last season of "homeland." >> that was like three years ago. >> it's a year ago. i'm all caught up on "game of thrones." i'm all caught up on "the american." i'm all caught up on "the homeland."

>> are you worried about quinn? i think he comes back. isn't he cool? i think he's okay. i think he's okay, hopefully. we'll see. and more communication satellites are in the sky other than any other company, which makes it a problem when you have to replace every one of them. the ceo will join us about talking about the climate business under the trump administration, although it is big business. as we head to bank, here's a look at s&p 500's big winners and losers from last week. ♪ mary buys a little lamb. one of millions of orders on this company's servers.

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when spacex suffered a launch explosion back in september, it not only destroyed a satellite facebook was hoping to use, it pushed back spacex launches, and it would have carried ten satellites about the size of cars into orbit, and that company getting ready to

execute a complicated refresh of its aging satellite fleet, who is now the ceo of the communications. >> we need seven successful launches. the next 18 months we will be very busy. >> it's important -- your market cap is approaching $1 billion for the company, and it's $5 billion you are spending to do this, right? >> 3 billion. >> i would be nervous. >> it's a huge capital program and one of the biggest in aerospace right now, and it's a large undertaking and we have been at it for many years and preparing for this day and very soon we are going to start our launch plans and that's quite exciting. >> like 20 years ago, something similar happened. the satellite was going to go up and there was an explosion.

aridam. was that filling out the whole, you know, the whole fleet? >> you mean this recent explosion that just occurred? >> back in '98, something similar happened, didn't it, and you got all 66 up there eventually? >> i think history is repeating itself, hopefully not for the company itself, but the first time it was launched -- the company was launched almost 20 years ago, and there was an explosion of a gps satellite, and the network was put into space in 1998, and it was not a business success at that time and we started the business in 2000, and here we are ready to have the largest tech refresh ever in history. >> it's exciting. one of the things you will know,

wherever commercial airliner is on the planet, right, in real time? there's been a lot of talk recently how antiquated our air traffic control system is, and they want to make it better for many reasons, we would not have missing airliners like we have had, and that's one of the things you can do, right? is that data that people -- would that be valuable? can you condense it to an individual air traffic controller can use it and nowhere everything is? >> that's one of the most exciting new features of the new satellites, each one has a receiver on it and they can hear any aircraft in the world no matter where it is, and relay that second by second to an air traffic controller. and the rest of the world is safe but inefficient in the terms of the way they manage aircraft, and the new

satellites, they can see every airplane from the vantage point close to the earth and it means it could go point to point quicker and burn less fuel, and be more efficient overall. that's a big business and a big opportunity for us going forward. >> it's michelle here. many, many years ago, i interviewed ae lawn musk before he was a household name. he said right now it costs $10,000 per pound to go into space and i want to get down to $1,000 per pound. i assume it has been beneficial for you, but before the only game in town were governments, correct? >> yeah, commercial space has been here for decades, and it would have been so much more expensive if we did not have a launcher like spacex.

they revolutionized the cost for space and it looks like they are going to do that even further going forward. iridium. >> what is the insurance policy on this stuff? >> it's a combination of you actually write normal insurance and self insurance because we are building extra satellites. if we have issues -- >> space x pays for it? >> no, we pay for it. it includes satellites, and rockets and ground infrastructure insurance. >> thank you. >> you drop them off, and they just -- they end up being fine in orbit? >> yeah, so we put them up into about 100 miles below our current satellites and it's going to be a very busy 18 months. >> thank you, and we appreciate it. >> good seeing you all. thank you. rocket science. coming up, the march dow 20,000.

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global markets eyeing crude this morning after oil-producing countries reached a historic deal to cut production, and wharton finance professor, jeremy siegel. >> and will tiller sun be the next second of state. here to discuss the possible pick, and what it says about the trump cabinet. is america running out of ideas and is it hurting economic growth? >> the puppy was like industry in that they were both lost in the woods.

>> a closer look at what really could be ailing america's economy. >> except that the puppy was a dog, but the industry, my friends, that was a revolution. >> greg eup is here. >> and the second hour of "squawk box" begins right now. >> announcer: live from the beating heart of business, new york city, this is "squawk box." welcome back to "squawk box" -- >> this is billy squire.

sorry. >> and andrew ross sorkin, and michelle -- futures at this hour, the dow now up 32, and the s&p is positive and the nasdaq weaker, down 21 points or so and we have had five straight weeks of pretty good gains and the dow 20,000 hats are on order. >> you know what i pulled out of the closet? my dow 10,000 hat. i will cross it out and put 20 there instead. >> rightly so. >> it's me, and i am reading page six. in headlines, tech out the action in the ten-year treasury, and the yield raising above the 2.5% mark, and has not closed at that in more than ten years.

there's worries about a surge in inflation which would diminish the return in debt over time and we will have more on that in a minute. and looking ahead to the two-day meeting, and the markets are considering a rate hike all but certain. and bowing reaching a deal to sell 80 jetliners to iran, and this is the first major transaction between an american company and iran since donald trump was elected. and boeing began to talk to iran earlier this year after a nuclear accord removed sanctions, and now there are questions as to whether president-elect trump will look to stop some of the deals. google expected to sign a deal in cuba this week to expanded some kind of internet services.

guys, these are two countries that clearly have seen major, major changes in the relationship with the united states with barack obama, and now with president-elect trump coming in are you going to see the deals get undone or not occur at all? there's a lot at stake here. >> can you do the deals and not -- >> fulfill them? >> no, do them and still have a problem with nuclear enrichment? can you undo or change parts of the iran deal and still sell them stuff? that's what trump would want to do. you don't want to tell boeing they can't sell $17 billion worth of airplanes, and airbus will do that if boeing -- >> there's another air path there. >> i don't have a problem selling commercial stuff, and i don't like when we send unmarked bills to them -- >> in a plane and deny it for days.

>> i want boeing to sell stuff to everybody. i don't know if i want to sell, you know, patriot missiles to iran, or some defense -- i'm not sure. it's a tough one. i don't know. how do we do it? >> i am raising the question as to what actually happens. there's going to be a big uncertainty there, right? and the same with whatever has gotten done in cuba. >> it's good to sell -- i don't know whether we have things to do with the centrifuge, can it be turned back -- it's a complicated deal the way it was structured. >> it's nuclear science. >> and yeah, the allies, would they do it anyway? >> does it show up in the intelligence briefings? >> are you worried about him -- >> pence will read it and if there's an issue he will tell the president about it. >> apparently it's the same stuff every day, and he has generals -- don't you think a

general like mattis -- it was the tax returns, and now it's the intelligence briefing? >> every president in history has read things things, supposedly, and maybe this is normal course -- >> like your generals and the -- if it's mostly the same type of information every day, and you can delegate certain things if you are in a position to delegate, right? would you be that uncomfortable? you know who did not delegate anything, but you were not around, and jimmy carter never delegated anything, and he made every decision and micromanaged the entire four years. >> reagan would do it every day, though. >> you said he delegated everything and didn't have a clue of what he was doing. >> that was the cold war. that was a different time. >> so you think it's okay? >> donald trump is a different

person. he's a different completely person. he's not ronald reagan. when you have three generals already in your cabinet -- today is the day to pay attention. this matters today, absolutely. cut through it. and tillerson expected to be president-elect trump's secretary of state. >> so tired. >> it's good discussion. >> can trump do anything wrong? anything? >> what? >> john, we will get to you in a second. >> is there anything that trump can be done? >> he may do a few things wrong, but he doesn't do everything wrong. >> by the way, there's a lot of things that i think he could do very right, including tax reform and we talked about all the issues, but i am saying anything ever on a morning where you could say, maybe i have a little misgiveings? >> maybe not directing capital?

>> well, john joins us now with more. >> am i supposed to talk now? >> your panties are all bunched up. >> joe, you and andrew done for a second? >> i don't know. ask him. i am fine. i'm good, john, go ahead. >> after all the talk about rudy guiliani, david petraeus and mitt romney, it appears donald trump is honing in on rex tillerson as his secretary of state. tillerson does not have diplomatic experience but has global business experience at the highest level and donald trump told chris wallace on fox news yesterday that was just fine. >> in his case, he's a world class player. he's in charge of, i guess, the largest company in the world. it has been a company that has been unbelievably managed, and to me a great advantage is he knows many of the players, and he knows them well. he does massive deals in russia

and massive deals for the company, and not for himself. >> there's going to be pushback from not only democrats but from republicans, and rubio tweeted out yesterday that being a friend of vladimir putin is not an attribute i am hoping -- and you have a call from chuck schumer and john mccain among others for a bipartisan investigation into the cia's conclusion that the russian government through intermediaries interfered in the u.s. election to help donald trump, and it adds uncertainty to this pick as well as the general environment over the next couple of months. >> the unfortunate part is it will fuel this whole

conversation about russia and it helps to feed that narrative, and it's going to be -- >> thank you. >> i wanted to ask what happens to romney in all of this? the question is, has romney played? now that romney -- no, because romney was very negative, right, publicly negative by bringing him in under the tent, it's impossible for romney to run around and screaming about how bad donald trump is given he was in contention for -- >> it's an interesting policy. >> i couldn't careless what happens to romney. >> he's dead to you? >> he lost. >> john kelly previously served as the u.s. southern command, and we will see if tillerson

gets to be the guy. another big step towards dow. 243 points away from the milestone level, and this morning the fed and oil taking center stage. and oil prices surging after a year half, and non-opec producers reached a deal to reduce output, and it went to 57.89 over in europe, and it had gone to nearly $54 per barrel this morning, and gains at 4% for both of them. here to talk markets is jeremy siegel, and processor siegel, you see a picture in the paper this morning, and you like that photo? wait, there it is. you don't want me to move it, you want to move the camera? no, that's not him, that's not

jeremy siegel. you are still -- the dow is right around the corner from 20,000, right? >> yeah, based on the futures, we are 1% away and we could do that in a day. the next thousand is going to be harder, i think, than this last one, but, no, the bullish trends are still in place definitely. >> are they more so in place because of the election? >> oh, yeah. i think this is 98% a trump rally. i mean, we have a pro business president. we have the prospect -- well, more than a prospect, a strong likelihood of substantial corporate tax reform, which we really need, and just as important, reduction in regulation. those are the two things that businesses want to hear that

investors want to hear, and those are priorities of trump. certainly we always worry about protectionism, but the first two are what i think are on investor's minds and they are moving towards a favorable outcome. >> so if 20,000 is a faya calm plea, what is the next stop? >> you think about 5%, and at that point -- we have to wait and see, but at this point markets are saying good things are going to happen, and then they are going to say, all right, let's have some of them start happening because very honestly we are at a rich multiple on earnings, so we have to have some of the earnings come in for it to move for the next thousand. >> gina, are you as optimisic? >> no, i am not as optimistic as dr. siegel. there are reasons for that. he mentioned, yes, i think

multiples are rich and if you look at expected earnings for next year, they are quite optimistic, and a lot of what has been pushing this rally is we have seen earnings repair over the last four quarters, and it has bench needed. we have had four straight quarters of negative earnings, and as we see the repair happening, that's beneficial. removing the uncertainty of the president did help unleash some of that and when you talk about the much-needed tax reform, and effective corporate tax rates used to be at 50%, and now they are at 20% and i am not sure how much further you can drive that down and get the beneficial idea of what everybody has in their minds as to what is going to happen, so much of that will be harder to realize, so i think there's that reality that we are at a different place. also when you talk about deregulation and corporate reform, that's putting rocket fuel into an engine and the engine we are putting it into is

not the same engine as they put it into ten or 15 years ago, and we are faced with high-debt burdens and low growth, so i am less optimistic. >> professor sieger, last word? >> i think corporate tax reform is going to be important. lowering statutory rates. think of how much money corporations spend trying to move their money from one place around the world to another, and if we can rationalize that totally crazy system and that's a big gain in efficiency. we know we are going to bring a lot of money back from abroad, and that's going to rationalize the system, and unless regulation, we have been overburdened by regulation for the last eight years and that's definitely going to move in the right direction and that's a real strong positive. >> thank you so much. good to have you on. sorry about the photo. >> thank you. coming up, nbc has learned

donald trump will pick tillerson for second of state, but close ties to russia already getting attention about a senate confirmation. and richard turnill joins us about one of the largest money management firms expectations, and "squawk box" will be right back. with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement

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president-elect trump will nominate john kelly for secretary homeland security. do you know general kelly? >> i do not know him personally. some of the others do you know, general mattis? >> met him but don't know him well. a lot of generals. i know wilber ross. >> general ross. >> yeah, he's a business general. just overall before we talk about rex tillerson and that possibility, although it's not official yet, looking down the list, what is your general impression of the people that you can see right there? general mattis, and ross, and sessions, and price? >> elaine chao. >> i think it's consistent with

the campaign and the positions taken by the president-elect. >> which one is most problematic to you at this point? pruitt, and tom price? >> i think there will be controversy over pruitt, particularly over his strong opposition previously to the agency which he will run. >> the e.p.a., exactly. >> i expect when all is said and done, most of them will be confirm. >> biden finally said sessions was okay, even though he opposed the judgeship 20 years ago. >> and there were confirmation hearings before the inauguration? >> we did that when i was the majority leader for president bush's -- some of his nominees, particularly at that time secretary of state, he wanted secretary of state confirmed quickly and we did that. >> and it was kind of tongue and cheek, but for the vice president biden to normize

sessions. he's off the reservation and calling everybody a racist. >> there will be plenty of other issues. >> yeah, maybe. so overall we have to ask ourselves, who has the most nuclear weapons? we have the most and russia is close. do we want to be friends with russia or confrontational with russia? it's like if we look like it's going to be a less hostile relationship, it's almost like people on the left would prefer a hostile relationship, and i guess it's because of syria? >> i don't think that's the case, joe. >> what do you think it is? >> we should be friends with every country in the world and want to be, but if you begin with the premise that the united states and russia relationship problem is the united states, that's the wrong premise. keep in mind russia violated

international law in the ukraine, and the statements from putin were false. >> you are an expert on the middle east, too, senator. what should we be doing in syria, the red line -- do we work with them or against them? do we want assad gone still? >> we should work with them where we can, but it's clear that in the syria discussions they have been dragging their feet, and enabling assad to regain control of aleppo. let me go back to my earlier comments. in response to russia's illegal actions in the ukraine, the united states led the effort to impose sanctions on russia. it's had a dramatic affect on the russian economy, and they are striking back, the hacking is something that maybe some dispute, but it seems to be clear what has happened. we should have better relations with them but can't begin with a premise that it's all america's

fault. we are acting in what i hope is a responsible way. >> and the relationship with vladimir putin, that's beneficial or not? >> i think less significant than the relationship, which could be beneficial, is the position on sanctions. i hope if he is nominated he will quickly say, no certainly later than the hearings, that i supposed sanctions on russia as a private citizen and as a head of a large company that was adversely affected by the sanctions, but as secretary of state i represent all the people of america and i believe the sanctions program is the appropriate response. >> senator, how should we think about the news over the weekend about what now seems like more confirmation around the hacking, even though i know president-elect doesn't believe that's the case? >> there's clearly going to be an inquiry -- >> a bipartisan inquiry, we should say, by the way. >> and the allegations that have

been made in the press have to be demonstrated and proved, and conclusions have been stated in the press and none of us know underlying data, and it's hard for the public to make a judgment when you have one side saying it's so and the other side saying it isn't. you need to divulge enough information as can be so the public can make a judgment. >> mike pence is taking the -- >> honestly i am less concerned about that than i am about what happens once he gets in office. he is dependant upon an effective security service which he has trust in, and that's important for any president, for any public official. >> the boeing deal over the

weekend with iran, is it in jeopardy or will it stand? >> president-elect said he will tear up the agreement. i hope he doesn't. i think that would be a profound error and it would contribute to upheaval in the region and possibly involve the united states militarily more deeply. >> they are going to make us go, but the taiwan policy? >> that was negotiated by the republican president and it has been american policy for many years, and democratic and republican. >> do you think it's right to open it up right now? does that make sense? >> no. >> what is the risk on the other side? >> the reisk is rupturing relations with china, and trump feels it's one-sided and you can address that but you don't have to tear up the relationship to address what grievances they have or we have. >> how dangerous of a moment we are in right now? >> i don't know. i can't assess the nature of the

danger, but there was a time in our history when there was a real danger of military action involving the issue of taiwan, and that's why president nixon negotiated the one-china policy to reduce that risk. >> thank you, senator, and good to have you on. >> thank you. coming up when we return, what is black rock saying about the trump rally and where it will take us, and we will ask the global chief strategist, and check out futures at this hour, and you are looking at the dow that could open up higher, and the s&p up about a point and a half. we're back in a moment.

welcome back to "squawk box." and iran has a deal to buy boeing jets. political opposition to the iranian and u.s. nuclear accord could threaten that deal, and lots of conversation about that. private equity may be able to strike a multi-billion deal,

and it could be more than $5 billion earlier this year there were reports kkr were considering a deal. and then the movie took in $18.8 million in north american ticket sales. and i bet i know who is going to win the box office next weekend. "rog "rogue 1." and then the breakthrough energy ventures fund, and gates will serve as chairman of the fund and anticipates being actively involved. and among the other investors in the fund, saudi arabia's prince, and richard branson and bridgewater's ray dolly o.

you can see the interview with bill gates here tomorrow morning on "squawk box." turning now to the markets in 2017, will the trump rally of 2016 continue into the new year? and richard joins us, and there's some big picture predictions, i think, richard, and we are going to try and use it and still be -- how to use the big picture to drill down what we need to do on a daily basis, reflation. >> you refer to it as a trump valley and the dynamics driving the reflation theme was going to

be before the trump win, and i wrote analysis that inflation data globally is picking up steadily, and we have seen that in the u.s. and we saw the chinese produce data coming in on friday, and we saw energy prices start to rise as well. we are getting the shift from monetary to fiscal policy we have been talking about for sometime, and it's really amplifying the reflationary theme. we think the bond yields have bottomed and it's important for where you want to be with the equity markets. >> some of the risks you highlighted are political and policy risks, and nobody knows exactly what the president-elect is going to do. i kick it back to where you are,

and michelle and i -- i don't know if you saw the mea culpa that ferguson said he was trying to keep his friends in, and he went against his own principles in going against brexit, and now -- >> now he says brexit was correct and he's glad it happened. >> and it might be italy next, at least some people think so, and god knows what could happen. should we hope that tide has stemmed or should we assume the cohesion of the eu is bound to fail? >> i think -- one of the lessons of 2016 has been that the economic fundamentals are just coming over the top, trump thatting any political risk, and investors that focused on the short-term political risks

missed out on the long-term fundamentals, and those short term risks still exist, and what is more important in tkreufing markets is what happens to global growth and inflation and what that means for corporate earnings and what that means for policy, and all of those things are lining up for the more even tphraeugs nary environment. >> what do i do with the merging markets, because historically u.s. interest rates rise, emerging markets get crushed, right, for the simple reason if i can get a certain and more secure return from the u.s. treasury, why would i put it at risk in the emerging markets, and they have to raise emerging markets, and yet the expectations, there's going to be greater growth around the world, and how is that going to play out in the emerging markets? do we do it or don't you?

>> well, they are going forward and that's because the concerns you highlighted about high interest rates, and if you looked at what happened to emerging markets since the ele t electi election, there was a lot of fear there, and then it comes back to what is driving yields higher? what is driving the upward move in interest rates? that has been driven by stronger global growth. we know emerging markets historically have been a key issue for that growth environment and in particular when that is related to growth and commodity prices, and the gap between the merge between stronger commodity prices and the weakness in emerging markets, that can't be sustained. one of those things can't be right. our view is you want to be in emerging markets, and of course you want to be selective in where you take your risk with

emerging markets and i think the u.s. election focused people on that emphasis on selecttive ty, and perhaps it has been more cautious to other areas, including china where we have large current account surpluses with the united states. >> do equity investors have to fear the end of the -- you know, the 20-year bond rally? if it is going to go the other way we think financial assets are correlated? is there a way for the markets to keep moving higher as the interest rates make a steady move to more normalized levels, or maybe we are still in a low interest rate environment, but can we handle it now? >> yeah, we believe that equities can move higher in a gradually bond yield

environment. lots of precedent in history where that has taken place and you will start to see money flow out of fixed income into equities, and the key is that the rise in yields likely to be gradual going forward, and that could be driven mainly by rising growth and inflation expectations, rather than a rise in the risk premium associated with bonds. so broadly equities can be doing well in that environment and what you will see is the continued rotation within the equity market, and so there are parts in the equity market where they will struggle with steeper yield curves, and those what i describe as the low volatility areas of the market which have done well, and other areas, such as valued stocks and japan do very well in the environment. >> lucky for the fed, and they get so nervous if the market trembles at all -- it would be nice if the stock market would

be able to hold up, and that's what is going to happen, they will be bailed out and be okay in spite of themselves. >> you now have full anticipation of the fed hikes, and the market is resilient. >> nice to be able to catchup with the overall market and say i am catching up and never had to make that decision to take the punch bowl away. >> he could be a guard at buckingham palace, never moves -- >> yeah, and the gains in science and technology. we will discuss about the article last week on that, and we will look at the u.s. equity futures.

♪ ♪

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expected to hike rates this week, and there's a lot of information. will it boost its growth and inflation out looks in the summary rates? and it's important to consider what would be most important, and significant to all of this is the inflation out look and we get a lot of it, and our friend over at pan neon rights, it could be a serious problem force the fed to raise rates rapidly. import prices come tomorrow and the trend there is down. capacity utilization, the trend is down, and cpi, the trend is

up. guys, you remember, it's been a very long time since we have seen an important trade based on an inflation number and that may be about to change, and that's why we will watch the inflation data closely this week. let's talk more about the broader economy and president-elect trump, and you wrote a piece the economy's problem is we are out of ideas. way to depress us this morning. >> sorry about that. >> you say outside of personal technology have been incremental and not revolutionary? >> look at the data, andrew. we have headlines about robots and artificial intelligence but the underlying story is what is happening to our standard of living, and productivity is terrible and it's the worst since the '70s or '80s, and so

amazing as all the advances are, they are not showing up in peoples' standards of living. last year was the first time since 1993 that mortality worsened in the united states and people are dying more from heart disease and drug overdoses and so forth, and not withstanding the great medical miracles the companies are announcing they are not affecting the average person's life span. a couple things going on, some of the low hanging fruit in innovation is taken care of, and the big killers of children are solved with vaccines, and then we are making it harder via regulations to take risks, and because we are an aging society fewer people at that stage can be try something brave and novel. >> it sounds like the end of history, and it sounds

defeatist. you know, i believe it. you don't think productivity rises and falls through a cycle? we could be on the verge of a big breakthrough? >> i am not making the case the growth is zero, but i am making the case that the 2% growth has been deeply depressed. the other point i want to make, i am not saying it's terrible and we have to accept it and go out and eat dirt, but we have to grasp the underlying causes and come up with solutions for them, and one basic solution, the regulators have to be a bit more accommodating for the risk taking process, not insist that we be 100% safe before we try out a new driverless car or drone. the other thing, it's taking more researchers to get a breakthrough idea and we need more people in research and stem education.

>> how are you accounting for this thing, the thing i am holding up, and it's the iphone. this thing used to be an entire room about 30 years ago in terms of the computing power in it and all that it can do? >> look, there's -- robert gordon from northwestern university, he has the iphone on the right side and the toilet on the left side, and which one would you rather go without is what he asks the audience, and the iphone doesn't measure up to some of the most amazing breakthroughs we have had in the past. i could totally get that the iphone is way better and does more things than my blackberry did ten years ago, and this is one very narrow area of innovation. when i talk to people in the tech industry or silicon valley, they always bring up the iphone and i ask what about materials and medicine? >> i want to make one point,

which is the productivity is essential to growth and economics, and yet we do not have a theory as to why technologies are developed when they are developed and how they are developed, and in terms of things that we can forecast, we can much better forecast things like life expect done tea and inflation better than productivity, and i have been perplexed at how robert gordon's work is becoming conventional wh wisdom, and the point i want to make ultimately productivity will rise and fall on things like investment, and we have had an investment drought over the past couple of years, and if we can get capital investment and the tools in the hands of the workers that is possible, and we would get a bounce in productivity? >> i think you are right, andpi

been zero, and we should be able to get it up to 1%, and getting more investment is part of the story, and the risk on rally that we have been experiencing since election day, it gives me hope, there's animal spirits out there in mainstream corporate america they don't want to take chances and invest, and if there's a selective return of animal spirits because they are optimistic, that would bring us more investment and growth. >> greg, i will tell you one thing -- it's what i have a feel for, the medical advances, and it would be sort of impossible to explain a slowdown in medical advances given how we are starting to understand so clearly what goes on. i am talking about rationally understanding now that we sequenced the genome, and it's

very difficult, and there's all the gene regulation, and it's going to be a quantum leap. i understand that it is taking longer than people thought, but it will be a quantum leap and will blow your mind what is going to be possible. i saw something last week and didn't agree with with it, but it was written by some doctors trying to explain the mortality, how we finally flattened out, and you know what they blamed it on? you don't believe this. >> what? >> obamacare. >> that looked to me, and i don't know if you could tie to have mortality declining to obamacare, but these were doctors that said actually the system has suffered in terms of quality, and they used that to explain for the first time we had not seen an increase. >> can you point, joe, and -- i don't know the answer to this and i ask it skeptically, is

there something that has happened because of the genes that prolonged life? >> we sequenced the jaw gnoma a decade ago, and the first theory came out in the '90s, and today we have one commercially medication genetically that is treating one person. >> it's scary. you do one thing and a lot of things happen, and before you doette kau see, you do -- you don't want to kill the patient. >> i am hopeful that what we have been talking about is about to have a boom. >> nobody disagrees that doing stuff to help productivity is good. >> i don't know about that. >> don't we need more education and -- >> maybe i should write a paper on that.

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we will talk markets, and donald trump expecting to tap rex tillerson as secretary of state, and we will have more on that pick's u.s. and russian relations when "squawk box" returns in just a moment.

the march to do you 20,000. >> it looks this week on the basis of futures, we are 1% away, and we can do that in a day. the trump transition. donald trump expected to tap another ceo for his cabinet. exxon mobile ceo rex chitillers

for secretary of state. we will hit the field after the team's big win, as the final hour of "squawk box" begins right now. >> announcer: live from the most powerful city in the world, new york. this is "squawk box." welcome back to "squawk box" here on cnbc, and futures this morning have been slowly heading up, and up now 31 on the dow, and last week was a great week, fifth straight positive week as we -- and the dow closes in on 20,000, and the s&p now positive, and oil prices were strong this morning. they were pushing 55 for a while on wti, and now moderated a little bit, and now to $53.75.

wti. global markets are waiting on the fed's two-day policy setting meeting which begins tomorrow, and the central bank expected to announce a rate hike, the second in a year. janet yellen will hold a news conference following that decision. and trump expected to nominate exxon mobile ceo rex tillerson as secretary of state. and his ties to vladimir putin could lead to resistance. >> in his case he is much more than a business executive. he's a world-class player. he's in charge of, i guess, the largest company in the world. it's a company that has been unbelievably managed, and to me a great advantage, he knows many of the players and knows them well, and he does massive deals

for the company. >> in other transition news, and donald trump will nominate john kelly as the secretary of homeland security. and then joining us now on the squawk news line, the director of research at buckingham. good to have you here. had you already priced this in to boeing's earnings? >> correct. we were pricing this into the deal. there were stumbles, as you know in november, the house voted to limit the treasury department from giving a license to banks to finance the deal, but in a sense, i think almost everybody, including myself, thought this was pretty much a done deal.

>> what other companies could benefit here? if they are going to buy planes, don't they have to about a engines? general election could do something? >> yeah, and so for example, boeing, iran is buying 737s, and the maker of the engines make the leap engine, and those engines would be made by general electric as well, and they would be among the big winners as well. >> when it comes to the revenues, do you look at them different as other revenues after the election of donald trump and uncertainty on what his policy will be? do you have an asterisk next to that deal? >> i think the way you kwaub tau tpaoeu the trump affect from a boeing commercial standpoint,

you have to put in a little more risk, especially with the iran deal. everybody is aware of trump's opposition to the nuclear iran deal and that could have a derivative on the deal if iran felt the united states were going back to the deal, and certainly there's a potential for repercussions. >> what about the wake in the tweet related to air force one? how do you put that in your model? >> it's a $3.2 billion program spread out over 10 years, and barely a blip on pentagon contracting and it's more of a prestige program. i don't think the program will be cancelled out right. i think the program could be restructured, and possibly down scoped a bit, and even if it were cancelled, it doesn't seem

like a big earnings contributor and wouldn't be a big impact even if the program were cancelled to boeing. >> should we be monitoring @realdonaldtrump? >> with this president you have to think outside the box and have to think about unorthodoxed methods, and you have to monitor this, and it's a complete new way of doing things, and this president has a different way approaching things, and we monitor this much more closely with donald trump than we ever would have before. >> you think about businessmen, if you are a businessman deep down and you see that $17 billion, and you are like, well, $17 billion -- i just don't see this -- this is not the place, maybe, the time or place to make a stand if it's our biggest manufacturer and airbus would get it anyway, i don't know if

this is where he would make the stand, richard? $17 billion is an important order for boeing? >> especially, if we take president-elect at his word that jobs are very important, and i don't think he's going to go out per se and attack the deal, and i don't think he will stop the deal or make an effort to stop the deal. i think you are spot on there. i do think, though, that he is not happy with the iran nuclear deal, and he doesn't think we got the fair end of that, and my only concern would be if he did do that, and upset the iranians would the iranians in retrobeauson down scope the order from boeing. >> boeing is up 20% in the last six months. what do you do with the shares here? >> i am neutral on the stock right now, and basically my view is of the stock is that the expectations, mostly on free cash flow are just getting a bit

lofty right now, and i say to investors, stay neutral. i don't think the stock is going to go much higher from here, and i don't think in the near term you are going to see much selling either. >> all right, thank you richard, and thank you for calling in. >> thank you very much and have a good day. we have news at the intersection of business and politics. top tech will meet in a summit with president-elect trump in new york on wednesday. and the attendees being called a heavy group and among those reportedly likely to attend, amazon's ceo jeff bezos, and microsoft ceo, and the ceos of intel, ibm and cisco also insisted to attend, and elon musk would attend but they say he has not accepted the invite

and have aub -- obligations. billionaire bill gates have announced a plan. it's called the breakthrough energy fund. bill gates anticipates being involved. among the other investors in the fund, saudi arabia's prince awowly. bill gates will sit down with our own becky quick tomorrow here at 8:00 a.m. eastern time on "squawk box." and u.s. stocks coming off the best week since the election, and the dow, really, balls to the wall is what we are seeing with the dow right now. are you okay with that, andrew? >> i don't know. >> you seem sour this morning, joseph. >> you guys are so smart. do you look it up, and it means

there's a throttle, and there's a ball and you push it up forward and it goes to the wall and you are going as fast as you can possibly go. i don't hear the word balls and immediately think -- >> i am forever 15, so that's the problem. >> you people -- really, both of you. i am ashamed. >> you look embarrassed. it's cute. >> he does it on purpose. what am i supposed to do. joining us now, bill smead. you knew this, right, bill? >> yeah, balls to the wall. >> it says terms used by a pilot, and there's something known as the urban ducktionairy.

>> is that going to continue, and is one sector -- big bank, small bank, investment bank, what is the best way to play it? >> nine years of hatred don't get dissolved in 90 days of trading and so the banks have been despised and hated and pounded on and political football and et cetera, so you could have a correction of the banks at anytime. if you think of it in a historical perspective, and the first three or four months after reagan's election, which peaked on inauguration day and went into a mild bear market and then took a cheap market to extremely cheap, and it looks a lot like this. so the banks could correct here, but longer term, it's hard to see how -- trump is a risk taker, and we have 86 million people between 22 and 41 that

kind of need to be led, and they need to be led to take risk and need to be lead to buy houses and lead to make families and so forth and that's happening. >> i don't understand the dirty -- what would that mean? >> i don't know. but there was a number of songs -- >> what would it mean, balls to the walls? what does that mean? i could understand if it's a throttle and you are pushing it forward -- i don't even understand the daughter tea, michelle. it just says something, i think. don wilson, what about small banks? they should benefit if there's some deregulation, they should benefit from higher interest rates. they have not moved as much, or have they already made their move? >> they made a move as well, and i agree with bill, this whole group has been the most hated group since the crisis, obviously, and was the cheapest group come into the election. if you look at some of the

policies being proposed and the steepening of the yield curve, and the steeper yield curve and all of that is a tail wind for this group, which was cheap come into the election. yes, we had a great move and in our view looking forward it's going to be a group that we think does very well. >> you go from half book, and then you get to book, and then it's -- if it gets totally over valued, can you go to two times and where are we now? >> that's kind of the history. you go to two to three times book -- >> two to three? >> when they get maniacal, the morgan stanleys got to three times book. it becomes an earning story. everybody forgets the markets are an teus paw tory in nature, and they get better for three or four consecutive years, because

if we are right, as the millennials begin to be the dominant force in the economy, marriages, babies, and houses, and then the activity for the banks goes up and they are set up to get the little knicks out of you in many different ways, and we have not had the velocity of money pick up for a long time and that's probably as big a factor as rising interest rates and how they do. >> do you have favorites that may be better positioned or not moved as much as the rest? >> well, i don't have ones that have not moved as much as the rest, but we like continue financial discover for a lot, and it was left for dead go into the election, but you are looking at a story with a lot of leverage to consumer loan growth, and pays a high domestic tax rate and has had the overhead on the whole group of regulation, and we still think there's 20% or more earnings power growth in that name.

>> okay. thank you. don wilson and bill, we appreciate it. >> are we done? >> no, i can see it on your face. >> it's a pilot thing. >> i don't know why you would assume i would take it into the gutter when all i am trying to do is describe -- we were just talking about boeing, and you know when they take off and they push it all and the throttle goes all the way to the wall, and then you come up -- i am trying to see -- >> i told you, i am forever 15. that's the problem. >> what does that mean if it means something else? to the wall? what does that -- all right, you know. >> thanks, and nice to see you. >> yeah. >> and you -- >> i don't know. >> shares -- >> you tell me i know nothing, and let's just leave it there. >> you are a reporter, and you know language supposedly. >> supposedly. >> and shares of alexen

pharmaceuticals. the cfo is also leaving. the reasons for the departures, personal reasons, seeking other opportunities, and the board lost confidence in them, and the board member david brennan named interim ceo, and cfo of phupb honeywell will become the cfo. lots still to come on "squawk box" this morning. up next, former defense secretary, chuck hagel, going to join us to weigh in on the trump transition. and then later, new york giants running back, rashad

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welcome back to "squawk box." president-elect donald trump is expect the to nominate tillerson for secretary of state. we have more on the exxon side of the story. >> good morning. here's what we know. rex tillerson has been at the helm of exxon since 2006 and worked his way up the latter in 1975. currently age 64, and if tillerson doesn't leave for a cabinet position he would have to retire in march of next year because exxon caps the time. and overall, it is higher. when tillerson leaves, darren woods is expected to take the reigns, and woods has almost 25 years experience of the company, and what impacts exxon's stock

more than management may have to do with the energy policy. tillerson would be expected to bring an oil man's mind-set to foreign relations and trump pledged to make it easier for companies at home, and exxon did business in over 50 countries and has established relationships with many global leaders, and there are relationships that have that raised concerns like with vladimir putin. >> i am reading all the coverage over the weekend and the focus on the arctic deals that exxon did with the russians. those arctic deals have since fallen apart because of sanctions, and i wonder if they dodged a bullet, and you need oil, $150 a barrel for these to be profitable, right? >> nobody has the crystal ball.

the point was he was trying to do business there and move the ball forward and he will bring the same expertise now, and the question, of course, with oil prices at the moment is do we see the shell producers continue to pump and all the positive pro energy policies raise their profitability and bring the price back down? that's the big turn, and everybody in the industry i speak to is worried about it. >> we will continue our conversation about the next secretary of state, and former defense secretary under president obama, chuck hagel, and a former united states senator. good morning to you. >> morning. >> what do you think the possibility of rex tillerson in the secretary of state role? >> i think, first of all, it's up to the president who he believes best fits his philosophy to run the government, and he was elected and i think he's entitled to bring the people around him if

they are qualified and capable, and ethically qualified to do the jobs that he wants done, and carry out his policies i think mr. tillerson, who i know, by the way, and i have known him for many years, i knew him in the senate, and he is capable and i like frankly changing up and putting a businessman and experienced and capable businessman in charge of the state department, and i think that brings a different view, yes, and a lot of questions, yes, but let's go back to the political environment that produced this president. this has been an unken srepb shaw null election and it's an unconventional president and i suspect to see an unconventional government. there will be hearings that will bring a lot of this out, but right now i am not bothered at all by the prospect of the

possibility of mr. tillerson being secretary of state. >> and what do you think about tillerson's relationship with putin and how that might affect the gop landscape? >> it might be a positive, frankly. before we jump to conclusions, and i read all the stories and hear the newscast about tillerson and putin being good friends, and i don't know if that's true or not, and obviously he has done business with putin and russia, and i don't see that as a downside. obviously there's a separation, of course, there is, and i believe mr. tillerson is smart enough to understand that and i believe mr. trump is smart enough to understand that, and like any cabinet member, they have the interest of the united states. >> can you help us with intelligence briefings and whether donald trump should or should not be taking them given your former role?

>> first, i was on the central intelligence committee for a number of years and foreign relations committee, and that's obviously up to president-elect trump, but i think he would be well served if he would take those briefings, because there's never enough time to know as much as you need to know in any of these jobs. i understand president-elect trump has questions about the veracity, and the depth and the quality of the report, and that's okay. i think those questions need to be asked in any government agency and our intelligence agencies need to be held accountable, and bottom line, before everybody gets too exercised with this, and i don't have any problems if congress wants to open up an investigation, and it should go further than russia, and chinese and isis, others with great

cyber capability are pinging on us all the time, and not just the russians. >> it's michelle here, and the leap that occurred over the weekend is that suddenly the cia thinks they know the motivation of those hacks. is there any certainty that anybody can say anything about that at this point based on your experience? >> well, again, i don't know -- first of all, i have not seen the reports so i don't know the classifications to your point about the motivations. i have read that as well as to we know the motives behind it and a number of people have been charging was to help mr. trump get elected president. that may be right and it may not be right, but i suspect we will find out more if the congress opens hearings and some of them will be closed, i am sure, and others will be open hearings. i will guess there will be more and more information that comes out of this, and let me go back

to a point i made. i don't think it's just the russians we need to be focused on here. as i already mentioned, there are other countries with tremendous capability, and cyber is a tricky business. you are never sure most of the time, at least initially -- >> are you referencing the chinese? who are you referencing? >> i am referencing -- i already mentioned, the chinese, the iranians and the north koreans and isis have capabilities, and there are hackers, nongovernment entities that have capability, and i think we have to be careful here and judicious as i am sure our intelligence communities are. >> donald trump just tweeted outlet trauly while we were speaking, i believe, the following. he says can you imagine the election results were the opposite and we tried to play the russia cia card and it would be called the conspiracy theory, and unless you catch hackers in the act it's hard to determine who is doing the hacking, and

why wasn't this brought up before the election? your reaction? >> i think the president-elect has a good point. this is complicated. this is very complicated business, and we have got to be careful here. you know, i used to ask a lot of questions, and we all did in committees, and when i was secretary of defense i would ask the same questions of the people around me, what happens next? >> secretary hagel, i have to interrupt you one more time because it's another tweet, and i think they make the f.-35 program and cost is out of control, and billions of dollars can and will be saved on military and other purchases after january 20th. so taking aim -- last week it was air force one with bowing and now he's looking at the f-35. what do you think about that? >> well, the f-35 program has been a mess from the beginning. it had tremendous costs

overruns. the congress has been paying on this for a long time, and one of my predecessors was concerned about it and i was concerned about it, and we are deep into this now and we have a number of partners that have ordered many copies of the f-35, and the current secretary of defense is in israel today and israel is accepting their first fleet of f-35s, and we should always be negotiating an effort to try and bring these costs down, but this is not a new problem. >> stock is getting hit this morning in the wake of the tweet. >> final question for you on the other boeing news of the morning, given the relationship with iran, i don't know if you saw the news that bow something going to be selling significant number of jets and planes there, and what is your take? >> well, that's not new, as you know. that news has been out there for the last few weeks, and first of all, i don't know all the details of it, but i am inclined

to be positive about those things and i will tell you why, and i think it enhances relationships with better understand when there's the commercial trade and that means iran is investing more in the things it should be investing in and not what it should not be invested in, and we need to be clear-headed about iran being the preimminent sponsor of terrorism, and those exchanges work in our interest, quite frankly, and we are a bit short sided if we try to cut those out and you have to be wise, but if we propose global economic interests, i don't know how we become the policemen of who gets what and where. that gets a little tricky. what i know of the deal, i think it works. i think it enhances american

industry, and our workers and productivity, and american products. >> okay. fair enough. secretary, we appreciate your time this morning. >> thank you. >> and your perspective. >> thank you. >> some anchor over the weekend said trump's tweets are not news and will not be treated as news. >> what? >> yeah, i just tried to find it. private equity firm, apollo global is buying car lighting and l.e.d. lighting, and will pay for a 1% stake, and phillips plans to keep the minority stakes for three years. and then a jump from that tphau sraurious, and macka lure

degeneration than loosen tuesday alone. some major management changes announced this morning in the pharmaceuticals, and current board member aoverhaul, and the company says the departures were due to personal reasons or for other opportunities. nothing to see here. and sources say that the board lost confidence in them, and all of that follows a completion of an accounting probe, although alexion did not say anything that would require a statement of prior results. and then the setback for eye drug offerings, and the drugs did not produce any better drugs

for the patients than when used alone. and 21st century fox downgraded the deal to buy britain's sky makes sense but the regulatory process could be drawn out and put fox under pressure. and another saying that he is unhappy about the size of the offer, it's too small. >> how about another one, and i am afraid to use it and i will tell you when we go to break. lock, stock and barrel, do you know what that is from? >> i am assume it's related to the guns. >> and there's another one, and i needed to use it, but i'm not going to, because of you two, because of where your minds are. >> with a bmusket, when you put in a gun powder, there's a piece of cotton or wad after you go

into -- >> stop! >> sometimes if you forget it, all you do is shoot -- it's impossible to say because you will immediately think it's going to be something disgusting, and it's not. look these things up -- >> disgusting is not the right word. >> there's the money shot. >> and coming up, dropping 3% on a trump -- >> that was so good, andrew. >> plus -- >> you know what, you just shot your wad -- >> and we're going to talk to market master, and then there are two special parts to this interview, bill gates will be with us, and becky quick, back for a cameo appearance here in an exclusive conversation on the microsoft co-founder's new $1 billion energy fund, and that's tomorrow at 8:00 eastern, and

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and shares are pulling back and dropping sharply following the tweet by president-elect donald trump. he says the f-35 program and costs is out of control, and

billions will be saved on purchases after january 20th. look at the stock, now it's down 2%. it's a $250 stock, and it looks bad, but it's a 2% drop which is significant. joining us on the line, and it's interesting, we were talking about the boeing situation and the order from iran and i said i guess we need to be watching president-elect trump's twitter feed because at anytime something can come out and this came out. how significant do you think it is in general, and it's sort of like sending up warning signs that it's not going to be business as usual in terms of procurement from here on out? >> the f-35 program represents 35% of lockheed's revenues, and

the program has begun to turn around and unit costs are declining so there are encouraging signs. >> what happened -- that's just today. there's a pretty big move last week. what was that? were you following last week? >> yes, it appears as if there were investors that were adjusting their books, although there's some concern that part of the realignment of the pentagon will involve, you know, finding the right balance in terms of profitability and investment for the future. >> just what you said, if i were going to defense in defense stocks i would buy them because supposedly we need to do a lot more in terms of the investment there, and number two, this is the flip side, what is a more powerful force that they are

going to be held more accountable for cost overruns or they are going to get a lot more business? >> to pre-assume that there's going to be cost overruns misses the mark, and the cost of building a weapon defense program involves much moreover sight than what happens in the commercial world, and we do find a lot of companies have negotiated commercial terms and they do tend to deliver products faster and at a lower price with higher profitability. what needs to get into some of the details, and i think what the president appears to be doing is using a common sense approach and asking how come something cost so much, let's look at it. i am sure there will be a list of how come things cost so much and then you look at the engineering involved or the quality required to protect a

soldier, it will be an understanding of the balance versus the cost. >> there's a website specifically dedicated, f-35.com, and they talk about the jobs and indirect jobs created by f-35, and this is a way to say this is good for jobs. and tell us about drgrumman. >> there's a balance between making sure we are spending tax dollars appropriately and getting value, and it's not just about jobs but effectiveness. so something might be expensive to the man on the street, and as we look into it, we find out

that, you know, its effectiveness is near 100%, and you actually avoid buying more. >> right. >> howard, thank you, we appreciate it. on quick notice, we thank you for coming on. >> anytime. thank you both. and we're going to get the take on the fed's big meeting this week. stay tuned. "squawk box" will be right back. no, this is a full blown move in to the basement, you're gonna be out of work without that money from... aflac! you might miss your rent. aww i just moved out. bummer man. hey i used to have my own place. yeah? no, no i live with my mom, but it's cool. health can change but the life you love doesn't have to, keep your lifestyle healthy with... aflac!

the markets could hit a major milestone very soon, and just a few points away from down. joining us now, muhammad el-erian. 98% trump, the rise since election day. do you agree with that? >> i do. liquidity, growth and inflation has had a impact on the stock market and bond market as well. >> we have been focussed on what stock markets are doing, and the 10-year yield, about 2.5%.

>> what you are see something a romance of reflation, and it's from the president-elect's policies on pro-growth policies, and you heard about infrastructure and others, and it doesn't surprise me greatly. what happens from here will depend on whether announcement become detailed design implementation. >> based on the cabinet that you have seen so far, what do you think? >> i am encouraged. he has picked on the economic side some people who are committed to pro growth and who have a feel for this, and it's an indodge tphus disruption from the system, and it's happening within the political system because of mr. trump's election, and finally you are starting to see people have hope we can get

out of the gridlock. it's about political implementation. >> we had breaking news about donald trump tweets, and so we have to go, but thank you for joining us. in the meantime, the shares falling sharply after donald trump tweeting about the f-35. the stock down a little over 2% already, and "squawk" returns in just a moment. plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests.

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let's get gown to new york stock exchange. jim cramer joins us now. i like this tweets. in this case, i saw somebody over the weekend said that trump tweets should not be seen as news. we can't ignore this when lockheed goes down $5 or $6. should we buy them because there's money spent or worried because at any minute the one we buy could get called out? what should -- how should we view it? >> i think that you have to pay less for defense contractor. this stock was red hot. did a lot right and not that expensive and the joint strike fighters, overruns are massive. i don't know how trump can get any money back from them other than trying to renegotiate per plane and then numbers come

down. then you have to be prepared to sell the stock. so, if the government is directly involved with paying any company, you have to rethink how you feel about that company. >> i like your quarterback but, again, you know, couldn't you -- >> i do, too. >> i watched it slow motion. knew cousins -- was going to happen. >> it was wentz's best game but at a loss. >> jets, petty -- you watch that? that was pretty interesting. >> i was busy coming home. >> great comeback. thank you. we'll see you in a few minutes. see how i do that? find out how giants running back jennings taking on america's reading deficit. he joins us next. "squawk box" will be right back. 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.

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nbc universal celebrating acts of kindness large and small with the annual share kindness campaign inspiring others to give back. joining us is rashad jennings, founder of the jennings foundation, seeks to educate and mentor children as well as promote health and fitness

worldwide. and you would have commented even if it's different yesterday, right? great last night. >> absolutely. i would have been here. but makes you feel that much better. >> 11-2 because of -- at 2 because of the giants this year. >> we have had a number of for the first first two matchups. hopefully things move and we'll see them again. >> how good is this guy? what's tony romo thinking? >> tony romo is watching a young kid that's special. and i think he's probably -- he's coaching him up and understand what's going on and tony romo could play ball, too. >> yes, he can. let's talk about -- you didn't have to do all this stuff and you have a three-pronged approach to your foundation. one of which is reading. in your history, you have a history of having some trouble early on and it affected not just that part of your life but your confidence and everything

else when you were in -- about 15 or so with reading. >> absolutely. i grew up with a reading comprehension deficit. i struggled, you know, i shied away from reading and i was that kid that when it was time to pass around the reading assignments, i kind of wanted to use the bathroom so i don't get called on. i was picked on because of it. i didn't want to public speak. i just wanted to, you know, kind of be my own person and kind of separate myself. and that really was a big struggle for me. and when i talk to kids, there's a lot of kids that really struggle with reading and i was just pushed through the system without properly being taught. >> numbers are -- people don't know about it. may be 25%, 30% of kids grow up without being totally confident in their ability to read. between 1 and 4 and 1 and 3? >> yes.

>> unbelievable. >> absolutely. that's the focus is a pill already of a reading challenge to actually inspire the kids to read and where we're proud to say we're inside of 35 different schools. we're impacting over 20,000 students and i'm just last year we had over 200 thousand dollars books read by these students. >> wow. >> it's empowering, exciting to see the kids be excited to read and the stories that i get, the e-mails i get from teachers, parents about their kid excited to go home and read is well worth my time. >> all kids love the electronic stuff, too. >> that's the hardest part now. >> you have to be able to read to do just what all kids are doing. >> partly. well, siri everybody else out, too. you can let her do the reading. unless you change the voice.

no. seriously. reading is the one element of success that you cannot hide from. i mean, i got a chance to maneuver around a world a little bit and everybody i talk to that's been successful, i mean, they have their stories and reading is a big part of it. >> i love how you go in and there's things when you pass you do 80% or above, you get automatically entered to get the great prizes an including nfl tickets as the giants start peaking again maybe. weird. late in the season. two super bowls -- >> all right. not weirdment it's good. >> okay. we have to run. thank you. >> thank you. >> check it out. >> dot-org. >> show's over. ♪ good monday