at the $60 level. still, we have a couple of headwinds. stronger dollar is one of them. the second piece is, we're seeing u.s. recounts go up and the problem there is shale producers could start to produce more and push this price down. carl? >> jackie, thank you very much for that. it is 11:00 a.m. at lockheed martin headquarters in bethesda, maryland, 11:00 a.m. on wall street, and "squawk alley" is live. good monday morning, welcome to "squawk alley." i'm carl quintanilla with john

ford, kayla tausche this morning at post nine. first it was utx, now boeing, and now donald trump has a new target, lockheed martin. speaking with chris wallace on fox news on sunday. we don't have that sound, but he did talk to chris wallace, and, of course, the tweets followed up this morning, in which he talked about the cost of the f-35, the cost overruns, the amount of money he hopes to save. bill george joins us this morning, cnbc contributor, former exxon board member. bill, good morning to you. >> carl, good to be back on the best show on cable tv. >> here we are again. do you see any pattern emerging here regarding trump and his willingness to call out individual companies? >> well, this is a president who knows how to use social media, and he's going to target it. frankly, i'm happy to see him going after cost overruns in the department of defense. i spent the first three years of my career back in the late '60s doing this, and i'm not sure we

made much progress, and i think these overruns need to be looked at. taking a lot of money away from other parts of the federal government, so i'm not opposed to his doing that. and he's going to use social media in the same way that john f. kennedy used television, so i think he's pretty astute at doing that. >> yep. >> i wouldn't want to be on the receiving end if i were lockheed martin or boeing or anyone else, however, so that's a tough issue that business executives are trying to stay under the radar on that. >> but for those who are unsuccessful in doing that, are you starting to develop recommendations for what investor relations, public relations, legal, all of those need to be doing in response? >> well, obviously, you need to develop your ties closely with the president-elect's team. right now it's a transition team, but i think when he does get inaugurated, never seen a president do this much, carl, pre-inauguration, but i think

you need to get close ties there and present your case so that his team knows that and it's going to be advising him so he doesn't come after your company and try to stay below the radar screen. i notice boeing on the iran deal had a very clear story about the number of jobs that this was going to impact and add, so i think it's really important you get that message out, but on the other hand, i think it's good to get your house in order so he's not coming after you, too. >> you say we've never seen a president-elect do this much pre-inauguration, but there's a difference between doing and tweeting. he's tweeting a lot, but twitter is not a tool for attacking cost overruns at the department of defense. he's actually got to follow up, work through the d.o.d. bureaucracy, somebody's got to negotiate these deals. he looks like he's doing something, but at some point will we and the american people know if he's actually having success? >> jop, you nailed it.

the department of defense is a huge organization and there are people there concerned about this at the time they let the contracts and the time they negotiate them. it will be interesting to see under general mattis who is his under-secretary and does he have someone conscious about this and knows business and knows how to run a very large organization, because that's what this is, and can go after the issues. if not it's going to fall on deaf ears and be a one-day p.r. story. >> bill, there's been a question of how scalable this approach of tweeting and focusing on single companies will be. 159 million people in the u.s. labor force. what do you think the material affect of saving hundreds of jobs at a time will be, and what do you think the momentum going into the trump presidency will be? >> well, i think this is going to be have to be followed up with growth policies like an infrastructure project, like adjustment of taxes, like encouragement of companies to

invest in the united states in some form of adjustment of the repatriation taxes and things like that that are hard, concrete policies that the congress can get behind the president on. and he's going to need very good people in his administration to carry those things out, or it won't happen and we won't see the growth or have the macro growth. so a few hundred jobs here, there, not going to make any difference. right now it's sending a message and deterring people not to pull jobs out, but i can tell you the long-term economics will dictate they'll either upgrade their work force or move to lower cost labor areas. there's no getting around that with a few individual attacks. >> bill, we talked to you last week when tillerson's name was initially floated. looks like we're very close to getting that, his appointment to state. two schools of thought. one is, he understands putin better than just about any other executive. the other being mcconnell on tape this morning saying

russia's not our friend, and do you want a state department chief who received the order of friendship. what's your take? >> well, let's clarify what's meant by friendship. i've known rex tillerson for ten years, serving together on the exxon board. he's an extraordinary individual, extremely high integrity. he's like a rock, and the one thing, he's extremely loyal. he's been loyal to exxon for 41 years, and if he takes on this job as secretary of state he's going to be extremely loyal to the united states. he's not putting russia or anyone else's interest ahead. and we say friendship, i don't know rex has any personal friends in these areas, you know, i've not seen that. he has professional relationships, and that's what he did. and he knows how to negotiate and how to get things done in the middle east, in russia, in iraq, and in other parts of the world, in venezuela, very tough areas. he's dealt in the toughest areas. so he knows the leaders, but he is a very strong, tough

negotiator, who is not going to back down to anyone. he's not going to show favoritism towards putin. he knows what he's dealing with. i think we got off on a misnomer about a personal friendship, and i think when he has his testimony in front of congress, i think everyone will see his integrity. this is a man who is an eagle scout, president of boy scouts of america, and he's carried those values with him all his life. >> bill, perhaps what makes him unique is he's not a general, and he's not from goldman sachs, he is an outsider and there has been some opposition from senator mccain, senator rubio. do you think they'll come around on him? >> i think they will. i think mccain will like him a lot when he sees the real person in front of him and has a chance to ask him some very tough questions, and that's the normal confirmation process. they should ask those questions. the thing he lacks is government experience, so i think the thing you're going to have to do here is team him up, like i was saying about defense, you need to team him up with a very

astute foreign policy expert. let me give you a couple examples. if i think of somebody like richard haas, who used to work with colin powell in state back in the bush administration, who's currently head of the council on foreign relations, or somebody like bob zellic, who was special trade representative who knows everyone in the world, as well. these are kind of inside players, so team the outside player with the inside player and i think you have a very strong approach at state to get things done. and rex knows how to run a big organization. >> can we call the ceo of exxon an outsider, though? >> yeah, he is. i tell you, he's not political, he's conservative, but he is not ideological. and i've never seen that in him. he just is representing the best interests here. i think he is an outsider. and i think -- i never thought he would take a job like this, he's so loyal to the country. the timing is perfect, by the way. he turns 65 in the first quarter of 2017, so he'll be retiring

from exxon anyway, and so this is good timing, and good for him for stepping up to the country, assuming that he gets offered the job. you know, and he takes it. >> i think there have been a few surprises in terms of cabinet appointments from executives who you never thought would go to government, who appear to be at least leaning that way, bill. we hope to talk with you about it again. have a good one. >> okay. thanks a lot, carl, appreciate it. thanks for having me on the show. turning to markets this morning, the dow and s&p have yet another record high, oil surging above $53 a barrel. let's bring in co-founder roger mcnamee who joins us here this morning. good to see you. >> great to be back in the big city. >> these shorts, are they getting murdered, and do you expect them to continue in the year end? >> let's face it, the election turned the markets on its head, so you had groups like energy, like banks that were deeply out

of favor going into the election with high degrees of conviction about what was going to happen. suddenly we get literally the opposite thing, and, you know, to me where this ends is anybody's guess. what's clear is that we have a classic situation of more buyers than sellers, and a rotation within the market. and how far it goes, i have no idea. what i know is that today is john ford's 40th birthday, and as a consequence, we have something to celebrate, even if you're short stocks. >> record highs. >> indeed. how do you protect yourself in an environment like this? and thank you for the birthday wishes. when things have switched so quickly, people seem to know what the president-elect is going to do when he gets into office. we've got a republican congress that's in place. tech ceos meeting with trump. we have no idea what they are going to ask for and what he's going to say. >> john, my assumption is the only things as an investor we

can count on are the things you would expect a republican congress to do when they have a republican president, which is to say they are going to cut taxes, they are going to attempt to change entitlements pretty dramatical dramatically, and those things, i think, are going to -- the cutting of taxes in particular, is going to be very bullish for financial assets. i do not expect the administration to be particularly successful in persuading companies to invest capital in the country. we've had a long period of time where companies have been reluctant to spend a lot on capital spending where the country itself has been reluctant to do infrastructure, so i'm not expecting that to happen. the result is, all the money goes into the stock market or financial markets, so i expect stocks to be a relative beneficiary of this change until the economy runs out of gas, which could happen any time. >> are you going to play in that game, having been cautious for much of the past year? >> i have to be honest with you, carl, i'm trying to figure out which way is up. in my world, which is

technology, again, i don't invest broadly in the market, i invest in technology, i think there's a tremendous amount of uncertainty, and i think there is in the tech sector a few bright lights. i'm a big fan of amazon, been a big fan of facebook, and i continue to hold some apple, because i think it's a good value, but realistically, i'm reassessing everything, because i do think that the position of growth and the position of technology in our economy is less certain today than it's been in a couple of generations. >> don't go anywhere. you mention amazon and we are getting news this morning the president-elect is holding the high profile meeting later this week with key silicon valley executives, including jeff bezos. deidre? >> that's right, carl. just is this morning a source close to the matter confirmed jeff bezos will be participating in that round table. others expected to attend include some of the other biggest names in tech, including apple's tim cook, alphabet's

larry page, and facebook's sheryl sandberg. all-star lineup. bezos was a question mark because of the public spat between him and trump during the campaign. much of silicon valley say peter thiel was broadly opposed to trump during the campaign, this week will be the first chance for the tech sector to get an indication how the trump administration might work on immigration, information security, taxes, trade, and diversity. the meeting's agenda, as well as timing and location, are still unclear, and another source over the weekend tells me it's not even clear that trump himself attends. he says that it's likely to be a reince priebus, jared kushner, and peter thiel with mostly older tech names. i can also confirm uber's ceo was invited, though he will not be attending. carl? >> deidre, thank you very much for that. you want to be a fly on the wall, too?

>> i don't know what's going to happen in that meeting. so many of these things that have been going on in the transition have been more for show than for substance. >> better than the alternative of no meeting. >> well, i agree with that, i agree with that, but it's not at all clear what they have to discuss, because until there is a direction, it's really hard to know. i mean, i look at the things with china. if you're a technology company, the current situation with china throws your entire planning process into confusion. and, you know, if they can resolve that kind of stuff, that will be huge progress. if they can't, i think it's really hard to be a tech ceo right now. >> when you think about other companies' priorities for the administration, health care, financials, roll back of regulation, beyond china you would think what tech really wants is immigration reform, but how likely do you think what tech wants is even possible out of a trump administration? >> kayla, i think it's a really good point. i think the other thing tech wants is stability, the same

thing the market wants long term, which is a consistent set of rules that it can operate under, and i think the thing we have going on right now is serious inconsistency, particularly with respect to our relationships with trade, and tech is so dependent on foreign manufacturing and also foreign markets, that i just think that uncertainty is challenging. i don't know that it ends badly. it might end perfectly well, but from where we sit right now, the uncertainty is unlike anything that's happened in the 34 years i've been doing this. >> absolutely. while we've been talking, we're getting breaking news on a subject that is lockheed martin, a statement this time from the company. morgan brennan has that at hq. >> that's right, on the heels of president-elect's donald trump's tweet this morning about the f-35 program and specifically how expensive, how costly it is and the issues there, we have a response from lockheed martin, which is the company that supplies that weapons system saying, at the israeli f-35

delivery ceremony that is taking place as we speak there right now, an executive saying that they welcome the opportunity to address any questions the president-elect has about the program, that it's an amazing program. also that lockheed martin has invested hundreds of millions of dollars to reduce the price of the airplane by more than 70%. we project the price, lockheed martin says, of the aircraft will be $85 million in the 2019-2020 time frame. at that price, this would be the most -- the least expensive of any fourth generation fighter jet in the world. also lockheed's executive saying we understand the importance of affordability and that's what the f-35 have been about. shares are down about 4%, as are some of their suppliers, including north run grum fund, so, again, getting response from lockheed martin on the heels of that tweet from the president-elect earlier today. guys? >> yes, utx getting a two for one in this case, morgan, thank

you very much for that. we talked with bill george about this, but do you have final thoughts on this? >> my one observation is there are plenty of places in the defense budget where cuts would not only be appropriate, but, frankly, necessary. and the issue with the f-35, i think, as much as the cost has been the fact that it hasn't met the mission requirements that the services have looked for, and it seems to me that when the customer for a military system doesn't want the product, that's a pretty good indicator that maybe that's a place you can do constructive work. >> right. roger, good to see you. >> great to be here. john, have a happy birthday. >> thanks, roger, appreciate it. when we come back, more on the morning's not so private negotiations between trump and corporate america. the ceo of borg warner joins us. plus, viacom is walking away from a deal with cbs. we'll weigh in. and later, microsoft announcing

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generosity is its oyou can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. global auto parts supplier borg warner, is the ceo concerned with trump's comments on production in mexico? joining us in a first on cnbc interview is james verrier, borg warner ceo, phil, take it away. >> thank you, kayla, and james,

thank you for joining us here today. we're going to talk more specifically about borg warner in just a bit, but you mentioned the last time you were here stock went down. you're down a little today, but overall when you look at the market and the rally since the election, what do you think? >> i think it's pretty good at the moment. the rally has been going pretty well over the last few weeks, which is good to see, and it's nice to see a little love coming back to the auto suppliers and for borg warnerspecifically, we've done beyond the rally, which is cool to see. >> you had a big acquisition with reed and you have $400 million you have set aside for acquisitions. you plan to be more aggressive. is that a taste of what we're going to see not only for your company, but the parts suppliers overall over the next year or two? >> yeah, i think first of all, the position is superb for us, terrific acquisition, we acquired them into the company as we drive forward on efforts

and i think that's what we're going to see more of. technologies trying to bring technology into the company to bring growth, particularly for us. >> you need that in this day and age where the auto makers are exercising their pricing power right now. >> you need to be a strong, scapable supplier, right, just like we are. to do that you need a suite of technology and products that can help you support the auto makers. >> is diesel dead? vw is your biggest customer and they said, look, we're not completely abandoning diesel, but it's, you know, you can see the tombstone not too far in the future. >> diesel is not dead. diesel is not dead. today it's about 50% or thereabouts of cars produced in europe. we are seeing a bit of a decline and that's replaced with advanced gasoline. that's good for borg warner. >> president-elect trump loves to tweet, loves to say things and certainly has nafta in his sights. what happens to the automakers if nafta is torn up and they

come back and say 2% tax on every vehicle coming in, not 35%, but 2% or 5% tax. what happens to the automakers and auto suppliers? >> i think we're going to need to see what goes on here. nobody is really sure and we need a little bit more time from a borg warner perspective, maybe i can talk to that a little bit. for us, we're in a really great position. we're very well balanced. we produce both in mexico and in the u.s., so we're well positioned. so we feel good about our position. >> but will it be chaotic for the industry? i hear people say, well, we can manage through this. they don't realize how many vehicles are coming from mexico into the u.s. and canada. >> well, one thing we do know, we both know this, if there's an industry that can deal with a little bit of chaos, little bit of turmoil, the auto industry is the place to come. >> i want to ask you about cafe standards. you mention regardless of whether or not the current standard of 54.5 miles per gallon by 2025, whether or not that comes down a little bit, you're still going to have to

increase fuel economy, so the question becomes how steep is the curve. >> exactly. you nailed it. there's a rate of improvement that's required, and that will go on, and for people like us at borg warner, that's a great thing, because what we're doing is bringing technology that's going to help the automakers meet those standards. >> and for you as a ceo, you make up every morning and see a new tweet from the president. may not be your company or industry. what do you think? do you wake up in the morning and say, please don't let it be me today? >> i take a look and then try and focus on running the company, but it's certainly a new world, right? it's a little different right now. more and more of these tweets, but we want to stay focused and run borg warner in the right way. >> james verrier, ceo of borg warner. by the way, ask james where his phone is and whether he's allowed to tweet. what's the story? >> i'm not a tweeter. >> his staff won't let him tweet. >> by choice or rule? >> i focus on doing my job and no tweeting. >> all the cool leaders are doing it now. you might want to reconsider.

>> there's always time for change. thank you, and thank you, phil, for bringing us that great interview. still to come, viacom walks away from a potential deal with cbs and donald trump meets tech leaders later this week. walter isaacson weighs in. plus, bill gates is leading a $1 billion fund focused on climate change. it's called the breakthrough energy breakthrough fund. he'll sit down with becky quick tomorrow live on "squawk box." we'll be right back.

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the dow and the s&p trading near lifetime highs. the nasdaq just about 35 points away from a new record on that index. we also have a handful of stocks hitting all-time highs, as well. logistics companies like fedex, ups, bb&t, microsoft, dow chemical, pretty broad-based batch there. we'll be right back.

what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

keeping the power lines clear,my job to protect public safety, while also protecting the environment. the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california.

good morning, everyone, i'm sue herrera. here is your cnbc news update at this hour. a federal judge rejecting a green party backed request to recount paper ballots in pennsylvania's presidential election won by donald trump. the judge ruling there was no credible evidence hacking occurred. british police say they have arrested six people in an anti-terrorism raid across central england and london. no other details were released. britain is on its second highest threat level. scores of demonstrators

marched near istanbul's police station to denounce bombings over the weekend. the kurdistan workers union has claimed responsibility for that attack. and a supreme court declining to hear a challenge to the nfl's estimated $1 billion settlement of concussion-related lawsuits with thousands of retired players. the justices rejected an appeal of the lower court ruling upholding the settlement. you're up to date, back downtown to "squawk alley." carl, back to you. >> sue, thank you very much, sue herrera. getting a mixed close in europe to start this monday. seema? >> happy monday. stocks in europe, as you point out, retreating from 11-month highs as investors look to the upcoming fed policy meeting, but we should point out there are some select markets outperforming the oil and gas makers. sharply higher on the non-opec members agreeing to a production cut. italy's eni and royal dutch shell all up sharply.

russian assets, including the stock market and currency are also gaining ground. in fact, we're looking at the russian ruble trading at a 14-month high. remember, russia, which produces more crude oil than any other country, will benefit from any sustained rise that we see in the price of oil, as its economy tries to turn around. meantime, a mixed session for the italian banking sector after the foreign foreign minister has been appointed as prime minister. it's widely seen as a solid pick following renzi's resignation. i want to show you shares trading higher saying that it will make a last ditch effort to raise 5 billion euros before the end of the year to avoid being bailed out by the italian government. lastly, keep an eye on the uk pound. there's a lot of data coming out this week from inflation, which comes out tomorrow, followed by employment and retail sales ahead of the bank of england policy meeting. there's also a new survey getting a lot of attention, over

30% of british hedge funds say they are now uncertain about remaining in the uk following britain's vote to leave the european union. it's raising fears, guys, of london potentially losing its role as europe's top financial sector. back to you. >> all right, seema, thank you very much. $24 billion in three-year notes. let's get to rick santelli for his grade in chicago. rick? >> hi. boy, timing's impeccable. $24 billion three-year notes yielded the highest yield at a dutch auction since april of 2010. i gave this one a c-minus. i could have gone d-plus. the metrics aren't anything to write home about. the 1.452 is higher, the bid side was 145 on the issue market. 2.65, benchmarked against a 10 auction average bid to cover 2.79 doesn't sound like a lot. i had to go back to july of 2009 to cover. well below the 50% ten auction

average. 9% on directs below the 10% ten auction average. light on all the metrics, c-minus. hey, we're going to do all this again in about an hour and a half for 20 billion ten-year notes. back to you. >> thank you very much, rick. what could have been a major media deal, viacom pulling from a deal with cbs. our david faber reported the deal first is here at post nine. really it was redstone pulling for the two companies, david, but i imagine you've been on the phone the last couple of hours gathering new insights. >> that's right, controlling shareholder of viacom and cbs, previously that company had called for a potential combination between the two. this morning, as we first reported and then was confirmed in a letter from national amusements, it no longer supports that combination. at least not now. in that letter itself, shari redstone said, "over the past few months after careful assessment and meetings with the leadership of both companies,

we've concluded this is not the right time to merge the companies. following the management changes that the viacom board put in place, we have been very impressed with the forward-looking thinking and strategic plan being pursued under bob backes' leadership." he's been in the job less than one month. a number of investors i've spoken with have been similarly impressed with him in the early going. of course, there are still plenty who would say, listen, in the current environment where at&t and time warner are getting together, you have a proliferation of over the top platforms, wouldn't it make sense to have more scale to protect yourself against the possibility that your networks, whether it be a cbs or any of the other networks at a viacom, such as a nickelodeon, b.e.t., comedy central protect yourselves against not having the audience you won't did, that does not appear to be a near term concern, though, at least for the controlling shareholder

of both companies at this point. it also zp, i must say, you know, we'd expected this would have moved along at a fairly rapid pace given that request came some time ago, but things were not moving very quickly. there may have been discussion continuing about governance, and what rights if any he was able to get out of that. there may also have been a resistance to pay a large premium for viacom and, in fact, that's certainly something that's been confirmed to me by people close to both sides. that may have also added at least to shari redstone's decision to reverse course at this point and say from our perspective at national amusements, we want both of you to stay independent. and that's where they will be. of course, the stocks reacting to that news. >> david, stick around, because we want to bring in walter isaacson, president and ceo of the aspen institute, as well as the former chairman and ceo of cnn. walter, what do you make of shari redstone's decision, and do you think five years down the line it will have been the right

one to shun scale in favor of potentially preserving your governance control? >> yeah, i think it's the right decision, as david faber, and congratulations, david, on your scoop, said. having scale is good in this over the top world to make sure you have the leverage to get all your brands out there. on the other hand, i've grown up in a media world in which i was at time and time inc. and then time warner, aol time warner, turner, then separated again, and i'm somewhat skeptical of media consolidation and i kind of flinch when i hear the word synergy. you got a great ceo in les moonves, smart, funny, cares about product, doesn't want to dilute his stock and you don't want him waking up every morning about what decision he might make at cbs, how that's going to affect paramount studios or mtv. i think you want flexibility in this new media environment, and consolidation sometimes hurts

your flexibility. >> david, what do you make of the fact cbs shares are down 2%, because if as you reported, potentially they were unwilling to pay a big premium for the company, you would think investors would have been happy with that. >> yeah, it's a bit of a surprise, although again, there was a contingent of shareholders of both companies that believe the benefits of the deal, and to use that word, synergy, as well, would be significant cost savings and, therefore, both companies would have benefited, both stocks would have benefited from a deal at a particular price, but it may have been resistance on the part of moonves to pay a significant premium and viacom, in fact, wanting one. things may start to improve for the company. they are going to have lack the nasty comparisons from comedy central when they lost colbert and jon stewart. a number of networks are performing better and they did manage to get carriage on the directv now platform, a very important one. >> they do have investment bankers on retainer. david, for now, thank you.

walter, we also want to bring your attention to a new initiative at the aspen institute called the american prosperity project that focuses on jobs, infrastructure investment, education, and tax reform. it's been in the works for the last year but is launching at a time when the new president-elect seems focused on job creation. explain to our audience what exactly this is. to me it seems akin to the simpson bowles tax reform plan, but what are you actually putting together? >> i don't think it's like simpson-bowles. i think it's tailor made for the environment we're in right now and the new administration with president-elect trump, because what it is is trying to get the long-term investment in infrastructure we need in our society and not be constrained by too many of these short-term considerations. at the moment we've now become, like, 25th in the world in our infrastructure and research and development, you know, we're way down on research and

development. we're about to be overtaken by china in basic scientific research and development. and if we want to have jobs for the future, it really requires simplifying the tax code, having corporate tax reform, lowering tax rates, looking to more long-term investments so that investors are incented to invest for the long-term the way a warren buffett does, but also a way to get back into the process of doing infrastructure that has a good return on investment and not being outpaced by other companies when it comes to the basic scientific research that for a century has kept the united states as the most, you know, productive nation. people like marty lipton have been part of our commission. i think it works well in this environment. >> walter, it's john. what's the magic phrasing you think that's going to create

bipartisan energy around a proposal like this? is it a specific focus on technology, innovation, is it getting people to work in the rust belt? how do you turn this from an idea into something that a lot of people can get behind? >> yeah, i think what you want is to have it be an infrastructure investment program done both with the private sector and with the public sector so that it's not just about crazy little crony capitalism incenting investments in one or two companies, but saying we're going to have a simplified lower corporate tax rate and an incentive for investors to think a little bit more about the long term so that we can have the type of infrastructure investment, high-tech, low tech, medium tech, manufacturing, whatever, that will create jobs here, but also create a future in the united states that's really based on a good infrastructure and not allowing ourselves to

slip way behind the rest of the world in all of our infrastructure, whether it's air traffic control or, you know, high fiberoptics and not slip behind the world in having a complexed tax structure and not slip behind the world and have less research and development. >> walter, it's been carl. as we've been talking, we got word of a possible trump administration, carly fiorina is under consideration for director of national intelligence. of course, they had a meeting with trump scheduled for today. she was seen earlier entering trump tower, being greeted by kellyanne conway. walter, we know they fought viciously during the primary, but he has proven again and again his ability to at least have discussions with those he thought were his political arch nemesis. >> oh, man, i like that. that's great. and governor nikki haley, somebody i truly admire, they struggled in the primary season and now she's the u.n.

ambassador, you know, i think carly fiorina is very smart. i didn't know she was in consideration for d.n.i., but that's sort of important, because we're having a bit of a mess with our intelligence community, especially, you know, trump fighting with the cia over the russian hacking questions, and so i think it will be nice to have a ceo who knows the world of technology help bring some order as director of national intelligence. >> a lot of ceos, walter, more than i think i'm used to seeing, at least being considered. >> this is not a bad thing. you know, i was talking to my wife earlier today as part of a group of people who have run some businesses. i think every now and then it's good to have somebody who's run a small, medium-sized enterprise or a big corporation to have them involved in government. if you look at our military procurement process, for example, and i know that president-elect trump has attacked the f-35 fighter,

strike fighter aircraft, procurement process. you really do need to bring a more business-like structure up and down government, especially when it comes to things like military procurement. >> it will be interesting to watch, and especially interesting to see whether we do, in fact, get that appointment. walter, for now, our thanks for having you join us today. >> yeah, thanks for having me. and still to come, the results of the cnbc all america survey are out, and online shopping is boss. we're going to break down the results next. then microsoft venture is making a big bet on artificial intelligence. the first invest tomt, element a.i., its ceo is coming up.

coming up on the half-time report in a bit, the warning signs investors may be warning as the dow approaches 20,000. plus, the latest sector to come under fire now from president-elect donald trump's twitter account. and the american oil giant one top analyst calls a takeover target. all today, half-time report top of the hour. see you in about ten minutes or so. >> see you then, thanks a lot. when it comes to the recent run-up in equities, hard to ignore the consumer comeback and the role it's playing in bringibring ing confidence back to the market. courtney reagan has that back at hq. >> hi, carl. the cnbc all-america economics survey shows there's no stopping the surge in online shopping activity. 41% of americans say they are shopping online a lot or fair

amount this holiday season. that is actually the highest in our survey history, jumping nearly 20% in the last two years, so we wanted to find out just how much attention amazon is getting specifically. so when it comes to searching for products and prices among the most hard core ardent online shoppers, they are looking at amazon 71% of the time. but when you broaden that out to all online shoppers, not just the most prolific ones, more than half say they are searching amazon always or most of the time. that's a big jump of seven percentage points from just last year, but doesn't mean amazon always wins the sale of those who shop online or search it. 29% actually buy from amazon always or most of the time. 29% is still an impressive number, though. adobe says the average online conversion rate or getting a sale from a site visit is just 2.7%. carl, back to you. >> court, thanks very much for that. i want to take a quick listen to

fiorina outside trump tower. >> to reset america's role in the world and how we're perce e perceived in the world, and i think it's why he's getting such fantastic people in his administration. the high quality of people that he's it also says that people recognize the opportunity that our new president-elect has to really make a huge impact on people's lives in this country and on events around the world, so it was an honor for me to be there. thank you all so much. thank you. thanks. >> carly fiorina there with kellyanne conway. under the times under consideration for national intelligence as walter isaacson just said, it would be nice to have a ceo who knows technology, bring some order to intelligence in this country. as walter said, at the same time they'll be once again a revisiting of her tenure at hp, compaq, board drama, and all of

that. >> yes, indeed. yes, we as cnbc know a lot of ceos. it's interesting, though, to see so many being considered or getting the nod for top administration post in an election that was so much about the little guy being left behind by folks like ceos. we'll see where this goes. >> and an appointment like that would be proof positive that the hatchet from the campaign can truly be buried. >> given the kinds of things that they bickered about during the primary and we all remember what they were. that would be quite a turn. i think we can all agree on that. when we come back, amazon, facebook, apple, now microsoft venture is betting big in artificial intelligence. get some details on that after a break. world ugly and messy. they are the natural born enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful.

>> montreal based element ai. joining us now on a cnbc exclusive element ai ceo john francois ganier. >> good morning. how are you sf. >> doing great. i want to ask you thief obviously spent a lot of rnd dollars around the hollow lens, and things like that, and you help businesses see what opportunities there might be for them to invest in ai and generate business. >> a lot of solutions that you have are using very rudimentary

technologies, and there's a huge interest in using the latest progress in artificial intelligence to help businesses around the world. how do you do that? does it take a big force of people going out and interacting directly with companies? >> yes. first for us the key is to connect with private data sets from large corporations where there's a lot of great insights and expose that to researchers. people that are very knowledgeable about what's possible, and it's combining really these two assets and enables us to produce unique business solution. ge's jeff immelt told us earlier this year that he sees tremendous potential in using ai to fix things like broken down locomotives or keep them from breaking down in the first place. is that kind of industrial investment where you see the biggest opportunity to start?

>> i see that, but i see it as we're looking at a bunch of challenges. especially in the area of cyber security where clearly this is a race to having the best technology. there's a lot of talks about reshoring and bringing back jobs. as you do that, you need to stay competitive. you need to augment the workers. you need to provide them with better tools, and these are all areas where artificial intelligence can do a lot. >> well, we will see where this goes, literally, with augmented reality. thank you, jean-francois, and we'll be right back. >> thank you. they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations,

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>> s&p into the red. the dow hanging on to a 20 point gain. pfizer with a spike a few moments ago, but the story has been largely about energy and oil prospects for production in the u.s. if this non-opec production cut holds. >> the rise in oil has sparked some inflation. that's why you've seen the yield on the ten-year come back below 2.5%. that's going to be in focus again as the fed meeting kicks

off. >> one particular bright spot in tech, amd, up about 3% today. it's been on a run for all of december. >> the 20k launch continues. 115 points away. that's going to be a dynamic for the entire week along with the fed. let's get over to wapner and "the half." >> are stocks and investors ignoring the warning signals. joe terra nova, josh brown, steve weiss, jim leventhal. also on set today is our senior economics reporter steve liesman. all right. jim leventhal, have you taken some heat on this table lately. does this rally -- are we ignoring any of the risks that are out there? people don't even want to hear it. they don't want to hear it. >> at the end of the day this is not an o