live from new york where business never sleeps, it's "squawk box." good morning. welcome to "squawk box." i'm melissa lee. our guest host this hour, kenny dichter from wheels up. we'll check on equity futures at this hour after the first back-to-back losses yesterday in the markets in six weeks. looks like we will have a higher open. the last trading day before christmas, the average return is ten points. looks like we're in line there with 8 points at the open. s&p has indicated to add 2.5 points. nasdaq opening slightly lower. a look at the picture overnight in asia. japan's nikkei was closed for a public holiday. we did see losses in shanghai as well as the hang seng. as for europe, the big news there, deutsche bank settling over the mbs investigation. that is giving a lift across the

board here to europe, except the ftse. look at the trade in crude. wti and brent trading slightly lower. >> here are the big stories we're watching today. the tunisian man suspected of committing the berlin christmas market truck attack was killed in a shootout in a suburb of milan. italy's interior minister said there was no doubt the man killed was the suspect, anise amri. at home, shares of lockheed martin are falling after president-elect trump tweeted about the f-35 program. trump said based on the cost and cost overruns of the f-35, he asked boeing to price out a comparable f18 super hornet. lockheed did not comment on the tweet. in a statement boeing said we have committed to working with the president-elect and his administration to deliver the best capability, deliverability

and affordability. a comparable f-18 is tough. >> the super hornet doesn't have vertical capabilities, it's traditional -- why are you looking at us like that. >> i get kind of turned on -- it's kind of cool you know this stuff about these fighter jets. >> i liked "top gun." >> my take is that boeing seemed to kind of -- i understand what the ceo is doing. seeing they gravelled more than lockheed. lockheed didn't seem like they quite understood, therefore it was like if you're not going to play ball -- >> i took it as this is boeing's opportunity to dig it to the competitors. for lockheed, the f-18 was 20%

of revenue. sticking it to them saying we'll stick it to you. >> maybe boeing saying 4 billion was a bit much. >> should we read the -- boeing came out and said they would make sure that the air force one would cost less than 4 billion. they always said it cost less than 4 billion. it's an odd -- >> we have to talk about -- he was in milan, the guy. >> yes. >> no problem going between -- >> they have open borders. that's the issue. >> the thing that gets me, i'm glad he did, but when you get in a car, my wallet sometimes bothers me. sometimes i'll take it out and put it somewhere instead of -- this guy actually left his wallet in the truck of the -- >> if you're going to be a martyr, you don't care if they know who you are. >> maybe they thought he would

die in the truck. >> and wanted to be identified. >> his fingerprints, no dna for that other guy, this guy's fingerprints were found. glad they got him, but a bit late for that. >> another trump tweet making headlines. the president-elect surprised nuclear experts by calling for more u.s. nuclear weapons. he tweeted saying the u.s. must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes. the tweet came hours after russian president vladimir putin called on his country to boost nuclear power. trump spent yesterday meeting with top pentagon officials. >> and reince priebus tried to explain what he meant, as a deterrent. this would be -- >> a longwinded explanations. no one doubts that the nuclear capabilities of the nation need to be modernized. >> really? >> even under president obama --

>> they're from the ''60s and 70s. >> our bombers rolled off the production line in the '60s. >> is there any thought of one of you wearing red? i wore red yesterday. >> it's so green. so green. so green. it's nice. >> look at the poinsettias behind you. >> that's what we did. >> you know you're giving mary conniptions this morning. >> you're pointing out that we are -- >> i don't think this would go down with the clothing police at the office. >> i think one of us will be wearing different tresses on "power lunch." >> how is that? is that better? >> you can do that? amazing. >> so cool. ♪ >> technology. look at that. that's so weird. >> that is amazing. you should see when they put my face in janet yellen's hair. >> scary? >> they did that on halloween. >> they do that. >> russian -- this is

interesting. russian president vladimir putin is holding annual end of year news conferences. it's usually a marathon event which lasts between three and four hours. he's already addressed a number of topics. he says he wants business-like constructive relations with the united states under president-elect trump. he addressed the tweet by president-elect trump about u.s. nuclear capabilities saying it's not a surprise. it's normal. these guys get along so well. he said russian would not be drawn into an arms race at any price. putin took a shot at u.s. democrats saying they're wrongly trying to blame the electoral defeat on external factors and need to learn how to lose gracefully. that's classic, lecturing the democrats. they must love that. how do they feel about that, alison? we'll talk to you in a second. now to today's top corporate

stories. deutsche bank agreeing to a $7.2 billion settlement with the j t justice department over its sale of toxic mortgages. the tentative deal offers some relief to banks. the stock was hit hard back in september after it acknowledged the doj had been seeking a $14 billion penalty. deutsche bank will pay a civil fine of 3.1 billion and provide $4 billion in consumer relief. they will have a pretax charge of $1.2 billion in the fourth quarter. there is no assurance yet of a final agreement. >> credit suisse is settling a u.s. probe into the sale of mortgage backed securities before the financial crisis of $5.3 billion. the bank says the deal includes a $2.5 billion penalty from the justice department and $2.8 billion in consumer relief to be paid over the next five years. credit suisse says they will take a $2 billion charge in the fourth quarter. italy will bail out monte dei paschi after the third largest bank failed to raise enough capital on its own to stay afloat.

the government passing a decree early this morning approving a $20 billion euro found to prop up the banking sector with bmps the most vulnerable. monte dei paschi said it will apply to tap the fund. this is the bank's third bailout since 2011. shares suspended today on the milan stock exchange. barclays is responding to the justice department lawsuit against the company and two former executives for fraud over the tail of toxic mortgages before the financial crisis. the bank says the u.s. government's claims are not consistent with the facts and it will defend itself. barclays won't say why settlement talks with the doj broke down but the bank believes continuing negotiations under a new u.s. administration may be more beneficial. deutsche bank, this news, when i look at the stock, takes a capital raise off the table.

>>. >> so this bank is older than -- >> the oldest bank in the world, isn't it? monte dei paschi. >> founded before -- >> italy. >> 1492. >> before columbus came to the united states. >> the name means -- a mount of piet piety. >> how ironic. >> doing god's work. >> a mount of piety. with a little bit on the side some profitability. >> giveaways for politicians. did you know that's what it meant? >> no. you got me. they're close but not -- not the same. >> it's a mount of piety in case you were wondering. 1472. >> for more on the markets, let's bring in alison dientz, and stephen friedman. nice rally. then suddenly we stalled here the last couple of days, what's

the problem, mr. fre? why can't we get over the hurdle of 20,000? >> there's a lot of upside based on hope. basically based on not necessarily the fundamental picture, but expectations of tax reform, tax relief, infrastructure, at this point, you need more specifics in terms of policy. you will have to wait for next year for that to happen. >> has the rally been justified based on what we know? >> justified to some extent but contingent on a lot of this being delivered. at this point, it's still relatively vague and speculation as to specifics. so continuing on some of the pro-growth policies being delivered next year, i think you can justify the rally. we do get concerned that some of the negatives, such as the trade policy, which has become more topical this week again have not

been actor factored in here. >> depending on the range of expectations, either none of the positives or negatives of the trump policies weigh in, the market is at 18 1/2 times earnings. even if you assume some ripple effect on the benefit side of that, trade retaliation or trade wars, the market is over 17 times earnings. it's looking expensive in an environment of uncertainty. i also feel as if the rally seems to be biased towards all the good aspects of the trump policy without concerns of the potential trade issues that could crop up. in some papers this morning, china is looking at some of the appointments saying we are looking at this with great concern. so it's sort of a goldilocks attitude. >> are there some parts of the

rally that are based on hopes, b but financials are rallying because of the yield curve. and the trade war, whatever you want to call it, may not impact financials as much as discretionary or other sectors. >> they wouldn't necessarily, but financials are closely tied to the economy. if there is some type of trade issue -- >> a big enough trade issue to bring down gdp. >> it's a risk out there that has not been factored into the market. all the positives have been factored in at these types of multiples you get volatility with limited upside. >> one thing i want to say, joe -- >> i will introduce you right now we'll talk to you. >> i want to say with the market people, let's get 20,000 today. >> that's what i was going to say. because of the narrative. because if you see -- >> i just want to get 20,000 today. a christmas present. >> a santa claus rally.

have you seen "it's a wonderful life." jimmy stewart at the bridge, where he finally realizes everything he had, he says bring me back again. they have it dubbed in, bring back america, donald. bring back america, donald. i was crying. even watching this, it's sort of -- today, if you want that narrative -- >> i want it. >> i wanted it to. >> i want 20,000. >> it's thin trading. it's only -- i already checked how far away we are. not that far away. about 81 -- >> the average gain last trading day before christmas is ten points. >> we need 10 s&p points. >> that's an average. >> it can be higher. it can be lower. >> i want to believe. >> merry christmas to the country. >> alison, thank you. the state of -- this is another thing that just to gauge the optimism, the state of the private aviation industry is poised to fly sky high under

president-elect president trump, apparently ivanka still flies commercial. texton ron up more than 28%. our guest host for the hour partnered with textron. kenny ddichter of wheels up. on saturday morning, a wheels up guy comes so tight with the guys, they go to break, a wheels up commercial, ricky fowler, jv j. watt, ricky fowler, they're everywhere. whose idea was it, you're flying commercial, you look in the bins to put your stuff in the bins, it says wheels up while you're waiting -- in all the bins at newark. whose idea was that? >> that's contextual relevance.

that's the pain point when the shoes come off. >> already, we have seen gauges of small business optimism. gauges of these different things. already -- >> joe, wheels up -- the trump bump. we're at the tip of the spear. we see revenues every day. as i said to you before break. we'll do $50 million of revenue this month. again, i attribute a piece to that to the optimism and exuberance. >> 50 compared to what? >> 25, 30. december is typically a big month. >> usually is. >> usually a big month. we've doubled our projection for this month. i attribute a lot of it to the optimism of what's coming. >> in boeing's latest quarter they cited a slow down there business jets as a weak point.

is it really the flip of a switch here? >> boeing and airbus are in a different plus than textron and general dynamics who make business jets. what i'm saying, two big names in the space, u.s. based, which is very based under the trump administration, would be texton and general dynamics. >> if you buy a boeing business jet, you have serious scratch what do those go for? >> could be in the hundreds. if you want to deck that out, it could be in the hundreds. >> tom cebol. >> he has a boeing? >> that's a top thin point of the business. >> i've been on one. welch had one. >> that was a corporation. >> i understand. i understand. but it was like jack's jet. >> donald himself has used private aviation. >> big story today, kenny, you can't -- on the cover of the

post and the daily news, plane idiots, they got -- >> that's an infomercial. >> with the daily news, are they talking about ivanka and her kids? >> that's an infomercial forewheels up. >> they're talking about the professor and his husband. normally the daily news would be -- >> ivanka could have avoided the professor, the husband and everyone else had she chosen wheels up. >> don't you think the optics are better if she flies commercially. >> the optics might be better, but the pain is too much. >> this guy tweeted out he was looking at a student at his college, he was walking away, he a reagan/bush t-shirt orngs he said i'm furious. i consider them wearing that t-shirt hate speech. if you need to know anything about this guy. >> wow. >> she looks good without makeup. you know me without makeup. >> no, actually i don't. >> i would be horrified to be on

the front page. >> i didn't know you without makeup. >> a running gag that we have. there was some woman friending to be me -- >> she talked to me. said i'm back today. i'm back from where? that's horrible. you look wonderful. >> you have beautiful lines. it's like a palate. >> beautiful lines? >> for the makeup artist -- >> trying to make -- >> all right. we're keeping an eye on an ongoing situation out of libya. there's a jet flying between two libyan cities that has been hijacked. it has landed with 118 people on board. there's no word on any demands from the two hijacker the. we'll keep an eye on this situation and let you know of developments. coming up, news from the trump transition team.

eamon javers will have details next. this is my retirement. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? 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. sign up at etrade.com and get up to six hundred dollars.

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jobs left to fill. eamon javers has more on that. >> reporter: there are 4,000 jobs left to fill in the trump administration. that's the number of federal jobs that any president would have to fill coming in and taking over the vast apparatus of the federal government. but even though donald trump campaigned on reducing the size of the federal government, i talked to a key liaison yesterday, chris collins a republican who is a transition liaison for filling those federal work force jobs, he said they will not let some of those jobs go untilled. he said they will fill all those jobs initially, and then gradually reduce the size of the government after that. here's what he said yesterday. >> so i think in some cases we will fill most of the jobs, then reengineer the processes to ultimately through attrition, you would like to do it through attrition, then move people around, if it's done right, you

can reduce headcount. >> as he is going through jobs, he is discovering some he didn't even know existed. >> one of my fellow members came up and said his son was interested in one of the jobs on the railroad advisory council. that there's five members, there's currently three openings, i can't even tell you for sure whether it's a paid job or not. but there are a lot of these advisory boards. that was one that i had to say i had never heard of. we would get that into the transition team. >> a lot of jobs. if you look through the federal plum book, you find all kinds of oddities. two historians employed inside the federal government. also 21 different speechwriters, 218 people whose job title is senior advisers. i didn't find any junior advisers. 218 senior advisers inside the federal government. of course a number of jobs that were filled yesterday, starting

with sean spicer. he will be the man behind the podium for donald trump. so much speculation about who would get the job. yesterday think announced sean spi spicer. also on the donald trump communication's team. sean spicer, a familiar face to reporters in washington, d.c. also on the team, jason miller, somebody who folks in washington were not as familiar with before the trump campaign. a veteran of the cruz team. and hope hicks, a relatively new face coming in with this trump team. she will be in the communications department inside the trump white house. all those jobs filled yesterday. that wraps up some of the key n internal white house staff. >> eamon, i've been thinking about all the stuff we've been talking bs ing about, the confl.

tillerson, full of conflicts. icahn, full of conflicts. then i realized the genius of obama -- >> i'm waiting to see where this will go. >> 4,000 people, not a single one had private sector experience. there wasn't the slightest possibility of conflict but none had been in the private sector. not one thing any of them could do to benefit themselves, until they get out. after the eight years, a lot will do really well now. that's the difference. with that team, there's no experience. there's not a single guy in trump's administration that doesn't have private sector experience. they'll all be conflicted. >> when you go back to icahn, talking about this yesterday, typically what you see with people who are full-time on the staff, is that they will divest themselves of their holdings while in federal government. saying that chapter of my life is done.

>> one other nuance -- >> we haven't seen that with trump or carl icahn. >> one other thing, trump, all these guys have some -- their holdings are affected by the overall economy. what if trump goes from 2% to 4%, so like everybody they benefit from the stronger economy. should they be frozen in the obama years with anything they got so they don't benefit from any of the improvement in the overail economy? >> i don't know. sounds like you have a olympian worked out. >> what if we do better and everything does better in they should be frozen in the d doldrums. >> i hope we all do better. coming up, airline stocks taking off. up more than 13% since the election. we'll tell you where they're headed in the new year. that's next. ♪

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♪ ♪ >> warming your hands on the fire. >> yes, welcome back to "squawk box." it is chilly again today on cnbc. u.s. equity futures, we could go like this. sometimes the lights are kind of hot. but there we are. dichter, we are both predicting 20,000. it would be cool to do it as a christmas present. >> icing on the cake. >> i'm not sure. can you call in trade from st.

bart's? >> yeah. >> a lot of the players are gone. >> i think the retail community will bring it. people at home. just figuring -- >> a lot of people on vacation. >> they don't want to miss it a lot of investment from mainstream. >> good sign, we put the hats away. we had them ready to go. if we stop talking about it, we're sure to hit it. >> that's in the watched pot never boils vain. or the frog. >> forget it. we're dead. >> don't you like the frog one? if you have a frog, he won't jump. then you have frog legs. >> this is bad luck now. >> don't wear it. do not wear it. don't wear it. just don't wear it. >> it's okay to have it on the set? >> it's okay to have it on the set. >> don't touch it. >> can't happen on the show any way. >> we could surge in the futures. >> he would could totally set

the tone. >> yes. >> definitely. >> 2016 has been a wild year for airlines, what trends do you need to be watching next year? phil lebeau opens his 2017 play book for the airline sector. >> reporter: pardon the pun but in 2017 airlines are trying to fly through the type of turbulence that could keep profits and airline stocks from flying higher. first, the battle of basic airfares raises the question of whether airlines can finally grow passenger revenue. in the fight to keep from losing passengers to low-cost carriers, larger airlines like delta rolled out basic fares. they may be filling seats, but those cheap seats and that competition is keeping airfares down. good for travelers, not the bottom line of airlines. >> second, congestion at america's biggest airports is not going away. >> for all the talk about fixing america's airports, it's the air traffic control system that needs to be upgraded. the faa made progress.

still at the largest airports you can expect some rough days in the next year. the good news, the tsa security lines from 2016 are unlikely to return due to greater staffing by airlines and airports. finally, some flyers could be in store for a better experience in the air. united's new polaris brand is a major upgrade of business class service. american is adding premium economy to more international routes and delta is experimenting with bringing back complimentary meals. overall, if you're flying in the u.s. next-year, be prepared for packed planes. phil lebeau, cnbc business news. for more on what to expect from the airline sector, let's bring in seth kaplan of airline weekly. phil was talking about the pressure that the major airlines are facing because of the low-cost carriers, and that they're seeing margins erode

here. there was an interesting downgrade of jetblue the other day from raymond james, saying there was pressure because of see the growth. does all of this mean 2017 could be a great year for the consumer in terms of fares? >> great year for the consumer, though these falling airfares from an airline perspective, this is a good thing, seem to be at least plateauing. delta, as early as mid 2015 last year was saying by the end of this year we'll get our hands around these falling unit revenues. a year later and they're just about to do that. generally speaking good deal for consumers. good deal for investors for now. the question is if fuel prices continue rising or should they spike, will you see that transfer of wealth back to the oil producers from the airlines as happened last decade? very difficult for them. or have the airlines put themselves in position where they can transfer the wealth

from consumers back to the oil producers. airlines think they restructured the industry to the point they can make money. >> so the transfer of wealth meaning will the airlines have to just sort of pay up for that increase in the price of fuel or can they pass that coast on to the consumer? we've already seen an 18% rise in wti in the past three months. at what point do you think there will be a transfer of wealth from whom ever to oil producers? >> it has to go to somebody. airlines are paying the higher fuel prices. in the past what happened was consumers, you know, even though everybody complains about airlines, the reality was consumers a decade ago when prices were spiking passengers got a good deal. that drove many airlines into bankruptcy. now because of consolidation and all the other things, the things phil talks about, basic economy, the unbundling, airlines think they have gotten to a point where fuel prices rise and they

can get their hands around capacity. that comes down to supply and demand and economics and squeeze up airfares. as long as air prices remain rather low, it's decent deal for airlines and consumers. >> i think the fuel, we can plan on it going up a bit. you have rex in there, you have governor perry on energy. i think the fuel numbers will go up. i think it's going to hurt the airlines a little bit moving forward. >> you know, seth, as you know, kenny is in the private jets business. a lot of airlines are upgrading first class experience, upgrading cabin experience. how good will it get on the commercials? >> it's getting better. this is what happens when you have an industry that's no longer struggling to get through the day. that can reinvest in product. even in the economy cabin, improvements there. so, what seemed a few years ago at least in the economy cabins

to be this race to the bottom, what will they take away next, now even as on one hand they're trying to offer these base economy fares to compete for price sensitive passengers, on the other hand, if they are restoring some of that service. free snacks. united, america, dealt it are serving free beer and wine on intercontinental flights. they can do these things. it's never going back to the old days where it's all bundled, that doesn't work. they can make those investments now. they have the money to do it to think about the long-term in a way they couldn't do the last decade. >> there was a time, i don't quite remember, but there was a time whenever flying commercial was almost something for the 10% or whatever. it's no longer like that. we were talking to kenny to try to figure out when will airline weekly be talking about a seat opens up, you go on the

internet. here is a seat on a private jet, it comes down to where the price point is -- that people who are not ultimate 1 percenters can fly private. does that happen today? ten years? sometime in our lifetime? >> like an uber for the skies? >> yes. >> i think -- there's scope to do that. the fundamental difference between uber, airbnb and the airline industry is the basic economics of it don't support something like that because there is no way to transport 6, 8, 10 people on anywhere near the kind of unit cost basis that you can cost 150, 200 people. >> right. >> i would just say to seth and the rest of the world, on the long-range stuff it will never be competitive.

own the sho on the short stuff, you take six, eight executives to logan, wheels up is more than competitive. >> king air, a turboprop. >> it's a jet. >> it's a jet, but that brings it down a bit, too. i don't know. i'm wondering how long it is or if it's impossible. >> no question there will be a convergence but i won't see basic economy fares on those kinds of aircraft. yes, absolutely between new aircraft technology and new distribution technology, the uber, that sort of thing, it will converge. never quite get there to where it price-sensitive travelers can do that. >> seth, thank you. >> likewise. coming up, squawk goes shopping. it's the home stretch for retailers. a look at winners and losers of the holiday season. here's a quick check of the european markets.

we have to get those going if we want to see 20,000 today. just the ftse not cooperating. what's critical thinking like? a basketball costs $14. what's team spirit worth?

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♪

attention shoppers. there's two days left until christmas. for the executive edge let's bring in dana telsey from telsey advisory group. good to see you. >> good to see you, too. >> it's busy. >> yes. it's busy. what is wrong with retailing stocks. got hammered yesterday. they did so well in the wake of the election, boom. underperforming dramatically. what's going on? >> fears of border attacks coming is driving retail stocks down. our retailers, they produce a lot of goods in asia. you can't bring things over here to the united states. you can't give consumers a 30% to 35% price hike when we've had pricing on apparel come down. competition from the international fast fashion retailers, h&h, prime mark all in the u.s., their prices are competitive. we have to be competitive. >> the border tax, the house gop plan they want to change the way

we do corporate taxes in america. no longer on profits, want to do it on cash flows. and if you export, you get all your taxes back. so you get a tax rate of zero. >> yep. >> if you import, if they go to 15% or 20%, you would ta a 20% import tax on anything you bring into the country. have you done work on this? there are economists who are big proponents of this saying it's so dollar strong the stuff that the retailers buy will drop so markedly in price because the dollar will buy so much more it won't impact them. >> we have spoke tonnn to our accounts and run numbers on this we're hearing anything from companies having impacts to earnings 10% for some, 30% to 40% for some. the bottom line is who knows

when this will happen. >> are they also incorporating an idea that a shirt that used to cost 5 dollars now drops to $4 instead? that's another -- they don't think that will happen? >> they don't think that will happen. they don't see that happening. >> on that spectrum, in terms of the companies who will be hurt the most, who could that be? >> apparel companies. >> nike for instance? >> nike, all my apparel retailers. look at the manufacturers who bring goods in. that's what they're all planning for. these stocks, stock market down 15%, 17% in a month. >> layer on top, we had an mpd record yesterday that sales were down 4% versus last year. so there are a number of things stacked up against the retail sector. do you see it that way or are people overreacting? >> on the holiday season so far, holiday season starts with the letter "h," around halloween. we had fewer stores open on thanksgiving day.

black friday was better. we went into a lull period, now is when the bread is buttered, december 15 th to the 25th is when it all happens. have promotions ramped up? yes. >> any stocks where you're saying the selloff is way overdone? >> when you look at some of these names, who could be less impacted? supermarkets will be less impacted. some cosmetics companies. what you have from ulta, sephora, winners for the holiday season and winners for cosmetics growing. that's in there. when you think of elle brands growing, that's important. what we're seeing this holiday season is macy's has a lot of traffic. okay. dana, thank you very much. >> dana telsey, thank you.

>> i heard the word sephora yesterday, never heard of it. >> what? >> they're all over new york city. >> it's a big hit. >> for emergencies. >> anybody taking selfies, going sephora and then taking selfies. >> not only do you wear makeup, but you also cry at movies. >> only that one. andrew at "finding dory" cried. i cried, because i was watching an octopus driving a truck and didn't walk out. >> mary called. she was not -- >> yeah. >> the green screen. so cool. >> love it. coming up, wheels up founder, kenny ddichter, and

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welcome back to "squawk box." final test results confirm an

experimental ebola vaccine is effective. this is the first vaccine proven to work. the world health organization led the study which was developed by the canadian effort. it's now licensed to u.s. based merck. the w.h.o. noted vaccines are still needed for other strains of the virus. let's get back to our guest host. kenny, you've been in the business for awhile. somehow you realize that these manufacturers, they'd love for a lot more people to be flying on these. so it makes sense to work with you. >> yes. >> we've known each other for awhile. and you personally were -- you know, risk takers. that's why they're called risk takers. but some of your risk was off flow. you got some really great investors, right? >> we got great investors in price fidelity. blue chip guys.

our partner on the oem side earns unbelievable -- >> right. and they got -- they can do the jets with cessna, right? >> and the kings with beach craft. but they also -- you know, from henry to t-row, they see the sharing economy. >> let me ask, who is -- so i would think small to medium sized companies don't own jets for the most part. right? but anyone can see how more efficient it is. >> there's two markets for us. the monday to thursday market is the hundreds of thousands of small and medium sized businesses that can use private jets to make it more efficient. >> they may fly all over oklahoma. >> sunday we have an entrepreneur named santa claus who's been flying privately for thousands of years on that sleigh. if he was forced to fly

commercially, i don't think the gifts would get delivered. >> just use your service? >> i can't comment. but the individual market, joe, what we've done is we've taken it down. it's millions of people that can afford to pay the $17,500. and the king air is 4295 per hour moving forward. and the excel 7495. >> you've got a big family, you can start to work it out. >> 80% of flights -- i've been doing this now almost 20 years. 80% of flights private in north america, less than two hours. the king air 350-i is the perfect. it's the flying suv. >> what do you think is the addressable market? >> the addressable market is 2 million to 3 million people that can afford this individually. probably hundreds of thousands of companies that can afford it. >> since the elections, have you been getting much more confident? i mean, are you adding planes, for instance? >> i would tell you this. we're closing on three planes

between now and the end of the election. we accelerated a couple to meet the demand. we called them to say we need a couple more. >> we don't want to build any of our jets. they said yes, right? >> again, like i said they do a great job for us. the truth of the matter is this is a revolution where people -- you know, the most valuable commodity in the world is time. if you can save time, that's really what we deliver for people. >> you remember during the election, couple of times that big black trump plane was flying around. his competitors were -- they were in their buses. that's a powerful statement too. >> i would say two things about donald trump. one is he's an unbelievable marketer. the delivery on that plane, just the paint job he has, that started the whole thing. wheels up has a special livery but i say u-p, t-r-u-m-p.

we have two of the letters. >> that may not be all we think about from here on out. >> i think, listen -- >> move beyond that where we try to lift everybody up. >> every enter should have a wheels up membership in their pocket. he or she is going to create more jobs. >> small business and entrepreneurs, that's where the jobs are. prosperity. happy holidays. you're not allowed. >> don't do that. >> no, no. >> he almost put on the hat. >> that's bad luck. thank you, kenny. coming up, the march to dow 20,000. going to talk strategy with peter boockvar and hans olson. and later, tweets on trump's nuclear policy. "squawk box" will be right back. ♪ there's a lot of places you never want to see "$7.95." [ beep ]

but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be. i thyou never got the brakes looked at? oh yeah...no. at cognizant, we're helping today's leading manufacturers make things that think and do, automatically. imagine that. a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready. because we're helping leading companies lead with digital.

tweeter in chief. president-elect donald trump moving stocks again after tweeting about the f-35 program and expanding america's nuclear capabilities. we check on shares of lockheed martin and speak to former cia chief james woolsey. after promises of a renaissance in the coal industry, the stocks have been on fire. we talk sectornomics. plus the battle for an open internet. what's in store for pipeline and content under president trump. the second hour of "squawk box" begins right now. ♪

live from the beating heart of business, new york city, this is "squawk box." >> you have enough rhythm for both of us. definitely do. welcome back to "squawk box" here on cnbc. i'm joe kernen along with melissa lee and michelle caruso-cabrera. the green team. the futures -- it's like -- the jets did -- actually, the jets having a tough year. the eagles. >> i thought you were talking about the giants and eagles yesterday. i went to bed before it was over. >> the producer is mad. he's a giants fan. you never know with them. they look good. they look like they're coming along and peaking. i knew they were going to lose last night. because they had it in their destiny in the hands. they can make the playoff ifs they beat the lowly eagles. >> they choked. >> yeah. i didn't watch it, though, obviously. anyway. developing story overseas. the man believed to be the suspect in the berlin christmas

market truck attack was killed in a shootout in a suburb of milan today. here's what's making headlines at this hour. two big european banks forking over billions to the u.s. to settle charges related to the sale of mortgage backed securities. deutsche bank will pay $7.2 billion. roughly half the $14 billion the government had originally sought. only $3 billion in cash up front. credit suisse struck a deal worth $5.3 billion. two economic reports to finish out the week both at 10:00 a.m. eastern time. home sales for november are out along with the university of michigan's consumer sentiment index. then check out shares of discount store operator fred's. they're up again this morning after activist investor aldon global took a 25% stake and called the stock undervalued on tuesday. stocks are at 81% after the announcement of the deal.

now to politics. donald trump once again tweeting about lockheed martin and boeing. the president-elect says what he calls a tremendous cost and cost ov overruns have led him to ask boeing to price out a comparable f-18 super hornet. lockheed martin shares falling after the news. boeing said it has committed, quote, to working with the president-elect and his administration to provide the best capability, deliverability, and affordability across all boeing products and services to meet our national security needs. a spokesman for lockheed martin declined to comment. president-elect trump met with ceos of both companies in mar-a-lago on wednesday. in other political news, president-elect donald trump calling for more u.s. nuclear weapons. he tweeted saying that the u.s. must, in his words, greatly strengthen and expand its nuclear capability until such time as the rest of the world comes to its senses regarding

nukes. the tweet came just hours after russian president vladimir putin called on his country to boost its nuclear power. i don't think they meant -- i thought they didn't mean nuclear power. i thought they meant their nuclear power. right? and he's just made a comment to msnbc saying let it be an arms race because we will outmatch them at every pass and outlast them all. >> trump did that and not putin. >> really? that sounded like a -- i guess. maybe. i don't know. carl icahn taking a role in the trump administration as a special adviser on regulation. here's what he said yesterday on the half-time report. >> there's a major problem in this country because we don't have investments. we've lacked corporate investments. and you can't get around it. you know, the market is good now and you see some.

but i think part of that is because you have very low interest rates over the years. but we can't compete in this country and we can't really give good jobs to the middle class because corporations perceive themselves at war with the government. >> joining us now, global head of investment strategy at investment management. and peter boockvar. analyst at the lindsey group. guys, good to have you with us. i'll start with you. in terms of regulation, has it been that stifling to growth? we're sitting here, stock market's not in bad shape. and granted it's on the promise of some deregulation. but still. >> i think if you can stack up the regulations that's been piled on over the past eight years, you can get to a pretty high level. sometimes it's difficult to quantify. because if you're a small business that has to allocate time to meeting the state and local federal regulations, how do you quantify that in dollars. there's been a new surround to the economy in terms of regulation. just relieving that hopefully

could release a lot more confidence and a lot more investment spending. and even one to two hires that didn't happen because of the cost of complying with a regulations could be a help on a micro level. >> the other side of what icahn said yes is he's worried about the valuations. you are too? >> yeah. that it was overvalued in the short-term. i am too. most of the overturn we've seen since the election, it's been impressive for sure. has pulled forward in the return from 2017. because when you come back on earnings growth, if you give earnings growth the obligatory hair cut that one should always do and apply reasonable to it, you get a return -- you get a year-end number that's somewhere around where the number is right now. where the market is right now. so if you're going to make money in 2017 if these things come to pass, the way you'll do it is

either expectations will be exceeded or you will have to buy the dips. you have to be much more tactical. >> does that imply that in your valuation analysis is the assumption that everything that's good in 2017 has been priced into e the markets if you think we've already pulled forward gains? >> yes. i think we've priced a lot of things going right in 2017. and it kind of reminds me -- i was having this conversation last week with a fellow market participant. and he and i were observing that this feels a lot like in terms of expectations around 1980. >> ronald reagan. >> yeah. and what happened in 1981, right? president comes in, great expectations, market has a phenomenal run. president comes in and then it corrects. now, true, the economy went into recession in 1981. we don't expect that to happen. it is pricing perfection. in reality is somewhat short of that. >> everything is priced in? i mean, corporate tax reform, a

lot less regulation -- all of that? that's all we were going to get for dramatic changes? >> yeah -- >> or is it only half? i mean -- >> or can you get any? right? maybe regulation, but -- >> -- why wouldn't we get a lot of it? >> here's the other thing. every step of the way, the world has underestimated donald trump. you don't think it's possible they're doing it again now? >> perhaps. but when you run headlong into the establishment -- right? >> who he crushed. >> hold on a second. what he hasn't run into yet is k street. when you start monkeying around with tax reductions, tax rates, cherished items that vested interests have, you run into a stone wall. because k street, the lobby class starts to pool up. they will slow things down. >> and then you sick your opinion via twitter on all your enemies and the legislators who don't want to go along with you --

>> and the dirty lobbyists. drain the swamp in washington. >> and the messengers they have in the white house. i don't think they know what's coming. >> he reiterated the draining of the swamp last night. it's just a matter of how we respond to it. the whole border adjustment thing is a big deal. getting the deductibility going forward. we are a credit sensitive economy. you take away the interest expense, well, what impact is that going to have? >> that's going to be an exchange for immediate depreciati depreciation. >> that is the hope. absolutely. we have to wait to see where this goes. it's going to pass. i'm confident it's passing next year. >> we already saw the sharp reaction to the border tax though. is that -- when you took a look at that, did you think that's fair? because this could be a huge impact to them? >> it's going to be but i think also yesterday bed bath & beyond

disappointed. i think the personal income number was disappointing. the spending number was disappointing. consumers are still stretched. they're still allocating more of their wallet to health care cost and rising housing costs leaving less to spend on other things. the consumer still has an issue. but from the company standpoint, the border adjustability is for them. >> and it's not just retailers. it's going to be the oil industry. the refiners are going to have a big problem. half of their product is imported that they refine. >> as long as you believe that the dollar is not going to adjust enough to strengthen enough to offset it. >> part of passing this is a bet they will continue to offset. >> i think you can do with a lot of -- with the stroke of a pen on january 20th, the deregulation stuff could be more important than the tax stuff. >> i agree. >> but with carl icahn, right? he wants to make more favorable for the oil industry, refiners specifically. and then here we have the

refiners being -- i'm sure. yeah, yeah. of course. but it's interesting dynamic. >> we'll see what happens. but carl and everyone else in total that has seen all of these -- i mean, we've got so many now. you could just take off, like, in the past week -- then go back further than that and -- >> i bet there's more to come before he leaves office. can't wait to get more stuff. >> right. >> temporarily done. >> there's an interesting study. going to try to do a visual on regulation in the united states. they did it in terms of stacks of books. and i think it was over the last 30 years, but the growth was parabolic. >> they never go away. they never come off the books. >> thank you. merry christmas. peter's sticking around. coming up, president-elect donald trump promising to resurrect the coal industry. that could mean big gains for the rail stocks. we'll find out which names should be in your portfolio. as we head to a break, take a look at the dow transports which

hit an all-time high earlier this month. "squawk box" will be right back. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you.

morgan stanley.

welcome back. can the railroad sector continue forward ahead in 2017? morgan brennan joins us with more. >> reporter: you've got the dow transports reversing course to

end the year up 22% near all-time highs. thank the trump rally with the average gaining 10%. that's only part of the story here. amid signs the freight recession is thawing. so take the cast freight index while edging lower in november. october marked the first positive growth in 20 months who pens that report noting data is showing consumers are starting to spend a bit more and the rate of deceleration is easing as crude prices begin to strengthen. seeing that with the sequential improvement, the less bad barge and rail volume. that's the reason that rail and truck stocks are the year's biggest winners. land star and ryder on the truck side. also parcel and air freight, that's been a boom. and that is something to watch right now. we've got u.p.s. and fed ex. it's the final hours of peak

shipping season. we have a lot of risks that aren't getting fully priced in right now including oil prices which could also be a head wind for these companies that use a lot of energy, rising rate, and also the strong dollar. joe? >> thanks, morgan. let's bring in david vernon. i was -- my ben franklin clothes. the rallies in this we see coming versus the negatives. i had trouble coming up with negatives. don't they use fuel surcharges th th th that doesn't matter. so can you give me one negative for the rails given that commodities go up, autos do better, they're going to start moving coal again. i mean, is there a single negative? and they've reflected some of that already. >> you're kind of paid to look for negatives as an analyst. if you wanted to find one, you could look at the stronger

dollar. >> that's like everyone. >> to the extent we've seen early signs that coal is booming off the coast for picking up a little bit. u.s. coal gets more expensive as the dollar gets stronger. >> and how many positives you got? >> whole laundry list. starting with tax reform. these are obviously businesses with huge margins. all domestic u.s. taxpayers at 35%, 36% rates. potentially large increase in free cash flow from tax reform. you've got the end of the freight recession. natural gas prices creeping into the 350 range. you're going to see coal moving back into favor. and that's going to lead to better demand. pretty much all -- most signs are positive. >> it sounds like 50% of that list is because of trump if not more. >> i think the commodity markets were sort of recovering before that. i think the election has certainly had a positive impact. a lot of expectations for better freight demand. these are businesses with a huge

amount of leverage. waiting for volumes to turn positive so the sector can turn better numbers. >> what are you seeing in autos? said they're laying off a few thousand people. the auto plants, the three big, are shutting down for three weeks instead of one week because they need to lower inventory. seeing an effect on that? >> auto is one sector that -- you've seen it moving higher than the czar rate. the one of the things happening the last several years, you've seen manufacturing trends. plants being moved to mexico from other parts of the world allowing the railroads to grow at better than sale rate. auto could be a little bit weaker but i think everything else looking forward when you start to look at the potential for commodities getting higher, expectations for better local regional manufacturing, agricultural crops are supposed to be pretty good from a harvest perspective. >> morgan, i know you have a

question. we also want to get another shot of that red dress because we've got these two here with the green. so maybe we can put you in between. you have a question, too, right? >> reporter: i do. in light of the fact we're seeing traffic tick back up, what is your take on pricing? remember back when we had the last round of earnings, union pacific said they were seeing softness in pricing. that's been a big issue from many of the folks i've spoken to is whether we can see it come back for the railroads. what's your take on that? >> i think it's very much intact. with the backward looking metrics talking about on the earnings calls are things that are going to go away as the truck market tightens up. as you see economic activity come back, start to see demand for transportation services across it pick up. the industry has done a tremendous job improving their service levels, investing in the capabilities that are attracting more freight away from the

highways. as you would expect with a step up in economic activity. >> is the selloff in terms of the fears of mexico. it's actually down from the election. >> they are down. they're probably the worst performer in the u.s. rails. the story there is the possibility of the -- the cross border activity. i think what investors are struggling with is what you do with the terminal value on a business like this. >> what do you do with it? >> we don't actually have a rating on the stock. i think it's one of those stocks you have to be very cautious about. >> build a wall. even if he doesn't build a wall, it changes all the incentives about where you locate manufacturing, et cetera. so that could slow down cross border parts, auto parts, et cetera. >> should always stay long kfc. the extra crispy. what did you say? k-what? >> no, no, no.

ksu. >> oh. i thought you said kfc. i'm sorry. >> they don't move that across the border. >> are you an original? >> crispy. >> it's not as spicy as the original. >> we don't eat for -- well -- anyway. we got a little bit -- good morgan. >> reporter: it's interesting, too, because even as we see a stock like kansas city southern sell off, you recently had an announcement from them and berkshire hathaway that they're doubling down with mexico with a new service. so that's -- it's -- i've been hearing that from transportation names. that they're still looking at that as a big growing business. >> my personal view is that the market's a lot better as allocating capital and labor than regulation. what we saw even before the election was a slowdown in global trade, a retail manufacturing that i sort of talk about it with the regards to the volume. my thought is they're going to keep trading with regards of what happens with the border

tax. you buy more. there's going to be a lot of compensating factors on that. i think the outlook for the rail industry for the next 20, 30 years is positive. believe we'll be away from pushing them to asia and putting them more in this hemisphere. >> that too. didn't even think about that. still thinking about kfc. anyway, thank you, david. there we go. >> wow. >> happy holidays, guys. >> merry christmas. >> that is nice. >> that is really -- uh-oh. >> wow. nobody can compete with that. >> this is amazing. >> thank you, morgan. coming up, how much do green bay packers love their team? find out.

and netflix is one of the most traded of 2016. will rolling back free internet hurt the stock in 2017? we talk your portfolio in just a bit. "squawk box" will be right back.

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green bay packers fans will do anything for their team. even showing up on a random week day to shovel snow from the stadium. the packers put out a call for volunteers to clear out the stands yesterday after a recent storm dumped several inches in the area. some people waited in line for three hours for the opportunity to shovel snow from lambeau field. the reward for their efforts? $10 an hour. >> that's good. >> yeah. that's very impressive. isn't green bay owned -- don't they have stock that's owned by the people who have the tickets? >> it's symbolic, but they do. great fans, obviously. maybe not a whole lot to do in green bay. >> i wasn't going to say that, but you did. i love cheese. >> cheese. cheese. >> that's a big industry. cheese. >> turned into a red state. >> that's right. >> the state of feingold and who else was -- >> how many times has she -- >> paul ryan's from there.

coming up, james woolsey talks national security on the trump transition and then the days of net neutrality could be over under president trump. and stocks you need to watch in the final days of trading before santa arrives. "squawk" will be right back.

♪ among the stories front and center this morning, we're still waiting for further word on a hijacking out of libya. a jet flying from the southern libya city of seba to tripoli was hijacked with 118 people aboard. earlier reports said there were two hijackers. more recent word is there's only one. he is said to be willing to let everyone leave the jet if his demands are met. goldman sachs has a new board member. in case you're wondering, today is a full trading day on wall street. during most years the last session before christmas day

features an early close. but not when december 24th falls on a weekend. carl icahn taking a role in the trump administration as a special adviser. i saw this on the half-time report. this was pretty deep about janet yellen and her performance as federal reserve chair. >> i'm not going to talk about the fact that she should resign. that's up to donald. i mean, that's not up to me to discuss what you do about janet yellen. but i do believe that it was ill-thought out in my mind to keep these interest rates so low. sooner or later you pay the price for the low rates. and really that's one of your thoughts here. that these interest rates are moving up very quickly. and then as they move up, can you control inflation? i mean, you have so many variables and so many things to worry about. >> icahn also warned about all the money pouring into etfs saying many americans are putting the money into them

without really knowing what they own. you know what some of the negative consequences could be. >> i don't understand about not knowing what they own if you can get a list of components of the etfs on a website and see what you own. it's the most transparent -- >> are they non-correlated to the underlying -- >> oh you mean if they're etns or -- >> even if oil went up, you could have lost money because of the rollovers. >> but those are criticisms of etns, not etfs. >> it was vague enough to be accurate. >> all right. the etf companies were all trading lower on the back of those comments. that stroked the fear in the industry, that's for sure. >> blackrock stock was trading lower. president-elect donald trump is calling for the u.s. to expand its nuclear arsenal. he tweeted on thursday, quote, the united states must greatly strengthen and expand its nuclear capability until such time as the world comes to its

senses regarding nukes. for more let's bring in former cia director who's now a senior adviser on national security to president-elect donald trump. and you also helped negotiate arms reductions treaties. >> negotiated on three nuclear ones. and then headed up the negotiation on the conventional armed forces in europe in '79 to '81. >> is donald trump right? >> well, what he said was expand not arsenal but capability. and i think he's right because we have been degrading our nuclear capability for the last eight years resolutely. the obama administration has done virtually nothing to modernize and there's a lot of modernization that needs to be done. particularly in the face of the sort of thing that mr. putin keeps trumpeting. >> you know how it's going to be portrayed. in a perfect world we don't want any nuclear weapons. the left is going to say here we are trying to get everyone in the world trying to limit the amount of nuclear weapons and this guy wants more.

that's a red herring. that's not what he's saying. he says we haven't done anything for eight years. >> the icbms we have were deployed in the '70s. the submarines have been working for 42 years. and the stockpile we have is the lowest that its ever been in terms of nuclear weapons. >> and people. you got to have people who understand these issues and a lot of people have retired. it takes a constantly renewing plan to go back and get people to come back out of retirement to instruct other people. >> in the meantime, the chinese and the russians, what are they doing? >> building and modernizing. both increasing numbers. and modernizing. but survivability is very important. got to make sure your forces can't be taken out with a first strike. that takes money. that takes time. it takes effort. and i don't think that there's any commitment to increased numbers in what donald trump said.

but improved capability, absolutely. >> we just want 21st century technology opposed to 20th century. >> i think, yeah. i mean, one of the things that happened to the russians in the cold war is that they got sufficiently worried about our improvements and nuclear capability. that they overcommitted themselves and it damaged their economy hugely. their economy more or less collapsed at the end of the cold war. and their inability to keep up with us in the so-called arms race contributed to that. >> i'm confused. there was a plan in 2011 to do modernization. the left attacked president obama for committing money to modernization, billions. did it not happen finally? >> very little. it's always been just about to get going. >> i see.

>> they've done a few things, but not many. >> you are actually advising the president-elect at this point. what about -- and you think the biggest threat is not russia but iran still. >> yes. i mean, i think over the long-term iran is a very serious problem. it's the world's leading terrorist state. and also it is governed by an ideology that is not stable. >> we don't know at this point whether he gets -- he's calling it the worst deal ever but he's also said that, you know, maybe you can make it better. certainly watch everything they do a lot closer. is that what you're advising him to do? >> i think this agreement is the worst one the united states has ever assigned. >> get out of it completely? >> i think it's very simple. you submit it to the senate as a treaty. it was not submitted to the senate as a treaty requiring to approve. it was submitted sort of kind of as an executive agreement pursuant to a statute that has

not yet been implemented. as far as we know, we don't have the 16 or 17, however many appendices there were negotiated to the agreement. and once those -- agreement doesn't take effect until those are turned over to the other negotiators. >> there is another deal in your view on a legal basis, there's no deal. >> as far as i'm concerned, there is no deal. >> what would be a better deal, a tougher deal, what would be the deal you advocate to the president-elect? >> i don't think iran would remotely consider signing a deal. it is not in their -- it's not in their quiver to have a reasonable deal. they're all about dominance. they don't care about the substance of the agreement. they'll violate it if they need to. they're about dominance. >> and these two conversations coincide. right? their current capability was built for the soviet union. and now the world is filled with far more smaller players with

nuclear capability. something we tried to stop but didn't work. >> keeping there from being proliferation should be a very high if not the highest priority. and this agreement undercuts that because as soon as iran has a nuclear weapon and i think it's going to be a lot less than ten years maybe a brief period of time where it could go boom and have a mushroom cloud. >> could they hit the united states? >> well, once they could do that -- no, i mean, just if they have it. once they have that, they are in a situation where saudi arabia is going to want a nuclear weapon. jordan's going to want a nuclear weapon. turkey's going to want a nuclear weapon. and the next crisis in the mid-east as a result of this damn iranian deal, some with strategic differences. that is not a stability world. >> so how does israel approach -- >> israel sits there quietly with its rather substantial military capability and doesn't say a thing.

they follow as i think we should most of the time teddy roosevelt's victim that one should speak softly and carry a big stick. i wish that's what we were doing. >> always great to have you on. we appreciate your insight. >> good to be with you. coming up, president-elect trump's plan for net neutrality and what it means for stocks like netflix, google. could think of some others. maybe comcast. maybe others. we're going to talk about the battle for the open internet and your portfolio right after the break. check out the futures right now. "squawk box" coming right back. governor has declared : a winter weather emergency... announcer: soon, insurance companies won't pay for damages, that is, not if they can help prevent damages from happening in the first place. at cognizant, we're turning the industry known for processing claims, into one focused on prevention with predictive analytics... helping them proactively protect the things that matter most.

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♪ the days of the so-called open internet could be numbered under the trump administration. the scrapping of this policy could be a big win for broad band providers like comcast, at&t, and verizon. companies all rising after the election. at&t up 15%. comcast up nearly 14%. shares of netflix, however, dropped nearly 8% in the week after the election.

joining us now is raymond james editor at re -- >> one, two, three, four -- >> we're testing his mike. so we're going to start with you. >> sure. >> net neutrality goes away under a trump administration? >> very likely. he's against regulations or regulations that don't make sense. what's interesting is net neutrality was like a de facto guideline for the internet. there was no rule for it or against it. it was a custom. and then the obama administration made it basically a rule. said let's make this a formal thing. and, you know, trump saw that as an unnecessary regulation. >> the implications when it comes to the markets and correct me if i'm not explaining this correctly. if i am a provider of the highway, the band down which all this stuff goes, i am not allowed to charge the trucks more than the fiats for their use of that road in terms of how much space they're taking up,

how much use they're -- >> that's a good way of putting it. the trucks have more load is part of the point. companies like netflix are the trucks. other companies, smaller websites might be the fiats you're talking about. right? so it's another way to think about it with that analogy, it's a two-way toll. but on one end, the isps are charging customers to access the internet. you pay for service to get to the internet. the other end they're charging companies like facebook or netflix or google to send it. >> to be on that highway. >> but you have to understand, the internet was born out of this other idea that information should all be treated equally. one shouldn't be privileged over the other. that's the foundation of how the internet happened. >> but things changed. frank, it seems to me if net neutrality is going away and we take that as, you know, a given, that the stock reaction is pretty rational here. >> it is. the net neutrality going away is probably better for everybody. net neutrality has been the most

pervasive fake news story of the last decade. it really has nothing to do with the narrative that's usually put out there. the issue -- the crime here is that the carriers have restricted their investment because they've been acting as if net neutral thety has been in place forever. if it was not in place, they'd be free to make more investment which would benefit all the consumers and ironically provide a better experience for the likes of google and netflix. >> give me an example. >> for example, if you wanted to pay extra to have content that you preferred come faster to your home or a business, that would -- that could absolutely be done. the carriers would be willing to invest a lot in their networks to have that opportunity. and the fake news narrative here about this is that that is if you're getting a better experience, it has to come at the expense of anybody else. that's not the case at all. none of the carriers would restrict to any of the major providers because the market place would take them to the wood shed. getting rid of net neutrality is

going to get rid of regulation that would unlock investment. >> it's a bizarre scenario to even try to describe the last couple of years with wheeler and the president and the way the president told wheeler how to think about this. talk about randall stephenson. he said we're spending all this money to do this and, you know, when we put out all this money, we need to be able to charge to recoup some of these huge capital investments and we're just not going to do it if we don't know we're going to be able to do it. he focused maybe more on mexico. do you know for a fact, frank, whether he didn't invest as much as would have been invested on the buildout because of this? >> it's not they lowered their existing but the overall amount of capital the industry spends about $65 billion. my argument is that number would be 10% or 15% higher and would have been for the last decade had they had the opportunity to be able to spend and to expand other revenue opportunities.

but the fear of net neutrality regulation has restricted that investment. if you take that away and put certainty in the marketplace, they would like to spend more which would increase everybody's overall experience. >> i've got to challenge that a little bit. as i said earlier, this was sort of a de facto rule meaning it was a rule people abided by on their own without government stepping in. they would have spent that money anyway. they would have invested more and said netflix, we're going to charge you more for sending more band witt down our pipe. i think consumers don't want to pay more. the idea i pay more for faster service, consumers don't want that. >> i don't agree with that. there are many people who pay for the final line. all the time. >> you want better seats at a game, yes. there's always going to be some part of the market which will pay more. >> why not discover whether or not the consumer is willing to do that? let the consumer decide the marketplace rather than stick to -- >> i think the end of this argument, the key thing to understand here is on the other

side of this is innovation, right? the idea that a facebook or google was born out of this level playing field, you know, will be harder in this next generation once you start charging at the other end. >> i disagree with that. >> companies like facebook and amazon and google can pay the next fees. the next start-up out of a stanford lab will have a much harder time because all of a sudden there's another cost of doing business. >> that seems -- >> those start-ups already have a disadvantage because they can't afford the connections and the server capacity that the facebooks and google can do anyway. >> but we're not talking about -- if you add another constraint on that, it makes it that much harder. >> we're not talking about charging them. we're talking about allowing the consumer the opportunity to pay more. the extent they're effectively a carrier, then a that's a different argument. >> is that the number one argument? >> that's the only argument. only argument. >> that you're afraid the next

generation -- there will be a mow noply of those who exist because the next -- >> i don't think that's the only -- i think it's a key argument in terms of the economics of the internet, innovation, when the start-ups are going to come out and who they are going to be. i think that's huge. >> we call it net neutrality, they've got this nice sounding word. oh, of course i'm for net neutrality. >> they enacted a regulation that restricted all of that without ever seeing whether it actually happened. and then why don't we let the ftc or other trade organizations take care of that if something does actually happen that restricts access. there's 12 major isps in the country. we would see if that was happening. but instead we put this blanket regulation that restricted everyone. >> what's the timeline on this? >> if you're going to reverse, it's going to take awhile anyway. you have to create a new rule making body. probably a year at the earliest to reverse it or change it. >> we can wait a year. that's all right. >> but in the meantime --

>> i think net neutrality is, like, the most faux -- the way it was sold -- somebody got in obama's ear and he turned the screws on wheeler who totally back tracked a netflix

itself would have had a harder time existing in the first place had you not had this sort of de facto understanding of how the internet should work. >> frank? >> i think netflix grew up when they were no net neutrality standards. and they grew fine before they existed. >> wait a second. the thing is as i said the de facto standard. we're not going to charge you for the faster or higher loads. so therefore you can have this open and level playing field. the reversing of net neutrality, it opens the door for them to charge for for the services. that's the key to understand. and what's different going forward than potentially what had been different in the past. >> what's the flip side if the

networks then work better? if they are able to generate revenue from some of the carriers that are being the heavier burden, you go back to the trucks example, they do pay more for this. because they use more fuel. >> it's a similar price control. >> you're talking about almost -- they invest their money. they invest the money on building out this network. and then you're saying this is all you can charge for it. who in their right mind think it's still -- >> there is a way that the internet works that we haven't really discussed which is transit fees. anyone that sends a lot of band width down, they do pay transit fees across the backbone of the internet. so there is an economics in place that load happens. there's another potential charge, though, in the last mile. that's what this issue is. >> this discussion is way more fun than i thought it was going to be. wow. >> all you've got to say is i want a free and open internet as if net neutrality, without it it wouldn't be free --

>> frank, you came ready to play this morning. >> this is great. thank you. >> thank you, ed. >> you got to get with the program. >> get with the program? >> and wheeler stayed too long. he screwed his successor. >> coming up -- we got to go. we got to go. stocking to watch ahead of the opening bell. and in the next hour we're going to hear from the ceo of flight aware on what you can expect in the holidays during the holiday season at the airports during the holiday season. "squawk" will be right back.

what's critical thinking like? a basketball costs $14. 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

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♪ i love her. >> you always say that. >> she was on the floor now. >> oh, you do like -- >> i dance all the time on the show. >> you like to move -- whatever. >> got moves like jagger. >> huh? >> she got moves like jagger. >> is that what he says? >> come on, joe. >> is he on "the voice"? adam i think he is? we love him. let's look at stocks to watch this morning. cintas reported earnings of $1.13 a share. 2 cents shy of forecast.

however, raised full year forecast slightly. lost 48 cents a share for the latest quarter. matching street forecasts. however, revenue was a little bit short. coming up on "squawk box" next hour, futures pointing to a flat o ep. we will find out if markets will bounce back after the break. and later, the oil batch. what you need to watch in 2017. >> by the way, she's really good.

welcome to "squawk box." it's christmas eve eve and we've got a lineup you can't believe. joe kernen is here and i'm sure you'll agree he's in good company with melissa and mcc. >> oh, you're warming your hands on the fire. >> it's been a long, unpredictable year. the brexit first triggered uncertainty fear. the election got nasty. but once votes were tallied, the markets went up and they rose and they rallied. and now we're flirting with dow

20k, but who knows if we'll hit it before new year's day. travel delays, oh no. why and where? to answer these questions we'll ask flight aware. oil output promises, will opec fill fast? kilduff will tell us if prices will last. and if you aren't done shopping you did miss the cutoff for amazon prime. don't check out yet. because there's still time to trade. and add or subtract from investments you've made. it's christmas eve eve and we're watching the dow. the third hour of "squawk box" begins right now. ♪

live from the most powerful city in the world, new york, this is "squawk box." >> still have a daytime emmys? do you know? >> that was impressive, dave evans who wrote it. that was fantastic. >> great rhyming. plus we sent it to our dude that the guy with the famous voice. he's out in the west somewhere. >> technology, you can do it anywhere. >> he's in kansas? well, we're not in kansas anymore. we had to send that script to the guy from yesterday, obviously, and he had to read it for today. he's got that voice, that -- >> perfect. >> yeah. that was really, really good. let's do that -- >> we'll play it again. >> yeah. welcome back to "squawk box" here on cnbc. we should. we got -- or maybe next year. no we can't because it'll be dated. i loved trump with the santa hat on. and he was -- >> and the smirk. >> yeah, yeah, yeah.

he was much bigger than her too. that's gloating. far be it for me. i'm joe kernen along with melissa lee and michelle caruso-cabrera. the futures right now -- >> dow 20,000 not looking good there. >> it's early. >> it could go. treasury yields, not much has happened really all week in the treasuries or the currencies or the markets where we've seen a lot of the action after the election. you know, we saw -- i thought we were going to get through 118 on the yen. i thought we were going to get below 1.04 on the euro. we haven't. >> the dollar slowing down and yield slowing down in theory should be good for stocks. right? and yet it's been just the opposite. >> not the last few weeks. >> dollar went up, treasury yield went up. and now -- >> for an amount of time this is

back and forth up. things happen. if it was a straight line, things would move off the paper. >> if it was obvious, we'd all be rich. we have new developments in the jet hijacking we've been following. passengers have been seen leaving the plane which has been on the ground for several hours. it had been flying from southern libya to tripoli when it was hijacked. there had been 118 aboard. no word on the hijacker's demands yet. among today's top stories, deutsche bank agreeing to a $7.2 billion settlement with the justice department over its sale of toxic mort gagages during th crisis. the stock was hit hard in september after it acknowledged the doj had been seeking double that, a $14 billion penalty. stock was up even more earlier today. but still in positive territory as it reduces concerns about a capital raise. credit suisse also a probe into the mortgage securities for

about $5.3 billion. as a result they say they will take a $2 billion charge in the fourth quarter. italy will bail out its bank after it failed to raise enough to stay afloat. the government passing a decree this morning approving a 20 billion euro fund. and bmps says it will apply to tap that fund. stocks to watch this morning. cintas falling short of forecasts. expecting full year to come in above the previous estimate. that stock is down almost 4%. mark zuckerberg sold just over 798,000 shares of the company. this was part of a preplanned sale. time warner getting a downgrade to hold over at brean capital. and that related to the company stock swap takeover had become less compelling. that stock is trading just off

fractionally right now. cal-maine foods says its results reflect a challenging market in the egg industry. it saw lower as the prices spiked. and synergy reports positive results. shares of weight watchers we're also watching. shares of weight watchers adding to their gains -- ha-ha -- this morning. after the company announced a new oprah winfrey ad campaign. she actually said she lost 40 pounds. >> yeah, but that's where she got involved back there when it ran up. nothing good has happened since. >> no. td ameritrade out with its list of the top bought and sold stocks o the year. who could we get to do -- oh. how did i know? >> how did you know? >> how did i know? dom chu, you were -- when did you set your alarm for today? >> today, it's tough. i live in the ultra outside suburbs out in connecticut so it

takes me about 45 minutes to an hour to get to the city at 3:00 in the morning. >> so what time was your alarm? did it have a two handle? >> it did. yes. so it made my -- >> merry christmas, dom. >> it hurts my wife to no end. it was commotion in the morning as i try to get myself dressed. >> you did fine. >> i did all right. >> yeah. you did all right. >> i put on a christmas tie. >> you got the little sorkin pocket sweater. >> it's not a sweater. i think he's the only one allowed to wear sweaters. >> no plaid tie. >> he looked like pajama boy the other day. >> he's not even here, joe. come on. >> yeah. but do you remember the obamacare thing? he did. he had that -- i'm sorry. go ahead. >> that's all right. my attire and andrew's aside, we decided to take a look at what's going on with the stock market overall. we talked about the retail investor and whether or not they're getting back in the market kind of buying and

selling stock. we asked the folks over at td ameritrade to give us their list of top tickers traded so far in 2016. this is data through the end of last week. if you look at the name of the top stocks bought on this retail platform, it's one of the biggest in america. so a good sample size if you will. take a look at this. tesla, one of the most bought stocks among retail traders on this td ameritrade platform. also gilead sciences on the pharma side of things. and while mark zuckerberg has preprogrammed to sell some stock, many buying facebook shares this year as well. valeant pharmaceuticals. a lot of problems there but investors did come out and buy one of the best bought stocks in 2016. and amazon.com. no surprise there especially during this retail season. the flip side, guys, is the top stocks sold. the big tickers here, apple coming to the top of the list. one of the biggest stock selling

volume trades of the year. netflix also on that list as well. alibaba.com, bank of america, and chevron. if you look at this list, it gives an idea. we've got a lot of pros in our ranks of viewers, but for those people at home trading on their own, those are the stocks that made it to the top of the list. i will say this, one other interesting tidbit. 20% of all their trades were done on a mobile device. out of those trades, 75% were done on this type of a smartphone platform. >> really? wow. that's all mobile now too. mobile finally -- mobile, there's a big future, i think. >> there is. just imagine. 75% of people did it on this one smartphone platform. >> and yet to sell the stock. >> yeah. >> because it's the top sold stock. >> exactly. right? >> thanks, dom. >> all right, dom.

we won't see you again. so we'll see you next week. and merry christmas, dom. happy holidays. for more now on where the smart money is putting its fire power to work in 2017, let's bring in mark yusko. has $2.5 billion under management. did you see what you looked like in the santa hat? >> i did not. i'm looking forward to seeing that a little later. i'm in a booth in chapel hill today. >> yeah. we already showed it. so we just decided that earlier in the show that the rail stocks were played. couldn't come up with one negative other than the strong dollar. how many sectors are there like that or individual situations like that and how many are just absolute nonbeneficiaries of a trump presidency? do you have them all figured out for us? >> that's a great question, joe. you know, i think the challenge

for sectors right now is we're in a little bit of a momentum wave here at the end of the year. people are buying a little bit kind of what they wish they would have bought and selling maybe what they're going to need. i think what you're going to be careful of in the new year is a little rotation that we see every year. people will kind of do tax gain selling in the new year. so some of the things up big this year could probably suffer in january, february, and some of the things that have lagged like biotech could be kind of interesting. >> that always -- when we see that, it always just kind of looks like background, some of that -- anything that's done for taxes. and actually if you're ever in the business, people tell you don't do anything on a buy or sell decision just based on taxes. maybe there's certain exceptions to that. but i guess anybody would wait until next year to sell anything because of capital gains likely -- think if hillary had been elected. everybody would be selling rite now.

capital gains taxes were going to go sharply higher. now isn't everybody waiting because we're assuming there's going to be some type of relief there? >> i think it's a big part of it. and also you have to look at, you know, certain sectors. you talk about the rails. let's talk about oil for a second. the oil stocks have just crushed it this year. one of my favorite slogans all year has been fang beats fang. diamondback energy has really out performs all the fang stocks. and those oil stocks are really pricing in a $70 oil price. which we don't see real quickly. we think those could struggle in the new year as people try to push those gains into next year and capture those lower rates. >> so mark, what do you like going into next year? where in the world is the most attractive? >> so, there are a lot of things around the world. i think that's exactly the key point. we look at what's going on in

japan. i think talking about the yen at 118, we think the bank of japan has figured it out with the equities. particularly japanese financials look good. i think the european financials -- i was with you guys back at the end of september. and that was the day that everyone was beating up on deutsche bank. said at this price, it's probably a good long-term buy. i think it's gone from 11 to 18. >> do you sell that now, though, mark? deutsche bank? it's up 18%, 17.5% in one month. we had the settlement today which was half of what was expected back on that day when it was getting beaten up. and in european trading it's kind of flat which seems to say a lot of this was in the stock prior to this actual announcement. >> we think the european financials are still very, very cheap. you know, you look at some of the german financials and swiss financials selling at 0.4, 0.5 times book.

you can go really cheap find things at 0.2 and 0.3 times book. bank of cypress very cheap. then the italian financials with this new bailout fund could scream here. i think there's a lot of upside over the next year, european financials. we also really like the india story. india has plunged here. we think that's much adieu about nothing. that's going to be a long-term benefit for business. he's a very pro-business president. so i think there's really great opportunities in india particularly in the banking sector there as well. >> okay, mark. maybe the yen goes to where the euro was. >> that is a great point. it's really what japan needs. you know, they have no way out. they've got too much government debt, not enough growth. they've got poor demographics. in fact, if you want to know what the u.s. is going to struggle with, you've got to

look at japan 11 years ago. we trail them by about 11 years. it's going to continue to put pressure on interest rates and growth. every day in this country, 10,000 people turn 65. same thing in europe. and that puts a real strain on economic growth. it's going to be a challenge. >> millennials got to put down their devices. >> get out of the basement. >> start dating. and, you know, that leads to -- >> reproduce. population growth. it's important for gdp growth. >> so you don't have a monitor, mark. i think we got a shot of you. >> with the hat. look at that. jolly. >> smart. >> that's really nice. thanks for putting that on for us earlier. >> all right. >> letting us take that shot. okay, mark. see you later. >> thanks, guys. coming up, if you're traveling this weekend, listen up. there are already hundreds of delays and cancellations. the ceo of flight aware will be here with the details.

plus the oil playbook. and later it's one of the busiest weekend for retail but the sector is under pressure. how to play it. stay tuned. "squawk box" will be right back. this is where i trade andrs. manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay.

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it's one of the busiest travel days of the year. globally more than 3900 flights are already delayed today. and 307 have been canceled. joins us ceo of flight aware. great to have you with us. when you sit there and you're looking at the maps and looking at the weather systems moving in, how is it going to shape up, you think? >> i think we're in pretty good shape. sometimes we get a huge storm right before a holiday and it can prevent people from getting where they need to go. yes, there are a handful of cancellations. but by and large, there's no terrible weather systems disrupting some of the largest hubs that can affect hundreds of thousands of travelers. we're not seeing that. and also it's fortunate that this year some of the biggest holidays like christmas and new year's are falling over the weekend. some people are traveling thursday, friday, saturday. there's a number of days that

are really spreading the density of people that are trying to get where they want to go. and if you do have a problem on a day like today, you've still got another day or so to get where you want to be. >> 307 flights canceled isn't a lot for today? >> well, it's a lot if you have a ticket on one of those 307 flights. you're going to say that's a lot. >> but that's typical? put it in context. >> yeah, so on a typical day, it's pretty common to see maybe 100 or so flights canceled. on a winter day when there's some very small amount of storms coming through, we'll see a few hundred flights cancel. on a day with a major weather event, we can see that number in the thousands. this is 10% of what a bad day would look like. >> dan, one of the things with flight cancellations, when the obama administration start eed fining airplane companies because if they left the plane on the tarmac for a long period of time, companies were quick to cancel. what sort of percentage increases in cancellations have

we seen post-that rule opposed to prior to that rule? >> there's the law of unintended consequences. so the risk to airlines of having a flight delayed on the tarmac more than three hours is enormous. we've seen an increase as a result of that. and it's pretty sizable. but the impact also could be these are flights that could have been canceled anyway potentially after they would have experienced that delay on the tarmac. so it's hard to know exactly who would have been impacted, who wouldn't have been impacted. i think a lot of people would argue that if the airline will cancel the flight, maybe 6, 12 hours ahead of time thinking there's going to be a huge impact they could reaccommodate people in a different route or on a schedule that works for the travelers. it's hard to know what the end impact is. but in some cases it can negatively impact people and say i'll wait on the plane to get

where i want to go. but a lot of people want a reliable schedule. >> i want to talk to you about the technology behind flight aware. you can track if a plane has landed or at the gate or whatever, how far into the flight you are. when will the technology -- i mean, how much more can it improve at this point? >> well, yeah, there's a lot going on. and so we're working right now with a company called areon. and so veridion is replacing their satellite constellations. starting next month, spacex will launch ten of their new satellites. so areon has flight tracking receivers on each one of these satellites. areon's business is to provide radarlike separation for airplanes. air traffic control data to governments so places like the north atlantic will be able to separate airplanes as if they were flying over new york.

with regular radar, keeping the planes closer together. >> it's going to get even better. >> that's right. and we're going to take that data and provide it to airlines. when you hear these stories about airlines not necessarily knowing where the planes are or using the satellite systems over 15 or 30 minutes, we're going to be providing positions and to the consumer as well once a minute. anywhere in the world. basically every airliner. this is truly revolutionary. >> daniel, thank you. >> thank you. coming up, if you ever wanted to see where donald trump grew up, you're in luck. the president-elect's childhood home is back on the market. cnbc's camera is going to take you inside right after the break. and we want to hear from you. have you finished your holiday shopping yet or are you waiting for last-minute deal? tweet us @squawkcnbc and we may air your response later in the show. we'll be right back. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge.

that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.

what's critical thinking like? a basketball costs $14. 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

coming up, the year ahead for energy. we open up cnbc's 2017 playbook next. is there anything more affected by the new administration? take a look at oil prices. unchanged on wti.

♪ welcome back to "squawk box." here's what's making headlines this hour. the government is out with its latest read on new home sales.

about 90 minutes. i was looking over. >> i was dancing. >> the economists were looking for a jump of 3% for november. i've seen her dance to the star spangled banner which is weird. >> it's patriotic. >> i know. it's hard to get a good beat going. >> we should play silent night and see what happens. >> all right. we're also going to get the final december consumer sentiment index at 10:00 eastern. it's expected to expand from the prior reading. consumer sentiment measures in general have been rising since the election. as we've seen in the strong rise of the stock. russian president vladimir putin says he's hoping to discuss with president-elect donald trump. he made his comments at the year-end news conference. he also said he would come to the u.s. to meet trump if he were to be invited. >> one of my predictions for next year is he will come to the united states. >> that'd be an interesting state dinner. >> yeah.

i predicted we'd do it the same night as the president of mexico just to be fun. most people associate president-elect donald trump with extreme wealth, but we got a look at his childhood home which shows he came from more humble beginnings. here's wealth editor robert frank. >> reporter: just 13 miles from president-elect donald trump's lavish 5th avenue apartment is this queens, new york, home where he lived until he was 4 years old. this is the address listed on donald trump's birth certificate. the modest tudor hits the auction block on january 17th. and thanks to its unique history, it's expected to bring in millions. >> the home originally went on the market for $1.65 million back in july. some have speculated that the house is worth anywhere from three to ten times the original price now that he a president-elect. >> reporter: the 2500 square foot home was built by trump's father in 1940 and still includes many of its original features. >> the hardwood floors, we

expect those are original. panelled library, the wood trims, wood fire place. those are expensive trims that weren't commonly added to homes of this nature after they were built. >> reporter: there are five bathrooms and four and a half bathrooms. >> we're on the second floor now. this could have been the room he slept in when he was a child. >> reporter: a piece of history that could be yours for the right price. >> the auction will take place on january 17th through paramount realty usa. we won't know the exact price of the home until it closes. the auction house expects the home will likely be sold to an investor or perhaps someone who would preserve the property as a museum or library. maybe donald trump himself will buy it back. >> i mean, you -- it will be an historical building some day. it will be. all right. as 2016 comes to a close, cnbc is breaking out the 2017 playbook looking at ways to make

money in the coming year. this hour we look at energy. >> reporter: it was a volatile year for energy. oil stocks shares up and downs from $25 to over $50. and energy related stocks moved in tandem with crude. in 2017 the market should finally see some stability. crude prices will find an equilibrium. with u.s. production stabilizing, opec and non-opec making some cuts, and expectations for demand to rise, the formula to balance prices should start to work. analysts are expecting crude to settle into a range of $60 to $70 next year. trump's energy-related policies will support energy stocks. need a cue for how trump feels about the oil industry? look at his pick for secretary of state. the pipeline companies, the refiners, they're all expected to benefit from less regulation and restrictive policies. trump has vowed to invest in

energy-related projects to spur growth and create jobs. that will lift stocks as well. opec and other global producers maintain better relations. we saw opec and non-opec producers coordinate on a cut this year. next year expect the willingness to work together to continue. the big producers realize that market stabilization will come easier if competitors can be cordial. the energy industry is changing. new resources are being found and old rules of doing business just may not apply. all right. it's two days before christmas so that is the class half full approach to what could happen for oil prices next year. remember there are a lot of caveats here you have to consider. the rosy range is that we'll see oil between $60 and $70 next year. but that requires all of the opec members to play ball, to do what they said they were going to do. for russia to cooperate and for the u.s. producers not to flood this market with oil. so there are some risks when it comes to the oil picture next year. >> let's turn to ron kilduff.

that sounds like a pretty tall order. we've seen rig counts with the price risen as much as it has, u.s. producers are coming back online every week the numbers go up and up. the price draws more supply to market. feels like a natural cap on the price. >> it does. and to jackie's report, i think the plan is for equilibrium. i'm not sure they're going to get it. so consumers have cheap gasoline at the pump. but i think what i for one am waiting for non-opec and opec deal to fall apart. when they realize all they did was to succeed in propping up the u.s. shale industry and getting us into more. particularly as we export more and more barrels, as well, to the global market. >> that was my idea. we step up to meet supply. >> since july you've seen our production here in the united states which has come down a

million barrels in a year go up another 400,000 barrels. when you look at the opec/non-opec deal, we could easily eclipse it in not a long period of time. >> particularly if the libyan barrels come back online which they're in the process of doing. nigeria, the same thing. and the iranians are on track as well to continue to ramp up. and again, i just keep waiting for russia. i think number one to say they're cheating, we're not playing along, and it's back to the races. >> is growth going to offset this next year? there's so many calls for deficits some time in 2017. more like the second half of 2017. what do you think? >> i think the earliest is the latter part of 2017. i think the big wild card here is china and its demand with prices rising as they have. they're backing off on filling up their petroleum reserve which is a big part of their demand curve. and two, they're also messing with their teapot refining industry.

i think they're looking at the pollution it's been causing and whether it's worth it or not. to the extent they rein those guys in -- >> you mean deficit of oil. opposed to deficit spending. >> yes. >> can i bring up another point, we're all wearing green, what about the dollar? the dollar has made a quick move. many aren't watching this right now. but i think when it gets back into the market place and everybody looks at the dollar particularly if higher, we could see crude prices see some pressure. >> so for eight years, we have made unbelievable progress, obviously. has the wind, the government wind been at the back of the oil industry here? we have the idea that the greens would like to keep it in the ground permanently. the president did try to satisfy them. if we had been full bore like we could go from here on out the last eight years, would we even be producing more?

would it be below $52 a barrel? >> it might have been too much of a good thing. i think the irony is they're making it hard for them to keep which would have got us down to the 18 we saw. >> what about from here on out? held them way back. but the big thing obama did do was to allow u.s. exports of crude oil which are already up to -- >> what happens now if we're full bore? does it go back down below $40 again? >> i don't think necessarily. but i think we're going to get a much bigger share of the pie. and i think our energy security is going to be -- >> that arctic stuff, no one wants to go up there anyway. >> it's expensive. >> projects like keystone make much sense now. >> but the pipe lines for refined products are going to help keep a much more stable energy picture going forward.

and help our industry. we're going to be major, major players here because of our technology and efficiencies. >> thanks, john. jackie, thanks. coming up, calling all citizens of procrastination. >> that's clever. >> that wasn't in the prompter. >> i know. nice. >> amazon is making a pitch to last-minute shoppers. the details next. plus we want to hear if you've started your holiday shopping yet. tweet us. it's friday. tweet us @squawkcnbc. stay tuned. you're watching "squawk box."

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welcome back to "squawk box." today is expected to be one of the busiest shopping days of the year. courtney reagan joins us with the pulse of last-minute shoppers. probably racing right now. courtney? >> reporter: yeah. that's right. good morning to you, melissa. there's just two days left until christmas if you haven't paid attention to the calendar. while many americans have shopped online, pushing online sales up 11%, you're out of time if that's your plan now. unless you're ready to pay those expedited shipping fees. it's in-store retailers' turn. but shopper track says shopper traffic should be heavy today. could be the third busiest day

of the season with the 26th actually forecast to be second busiest to black friday. now, a slice intelligence scan of 1.7 million online shopping receipts does show that amazon is dominating online sales. so far this season at least through december 16th with 37% market share. that's followed by best buy, but at a distant number two with 3.9% and then target, walmart, and macy's. most consulting groups are confident that total holiday sales will hit that forecasted range to grow between 3% and 4%. however, it will probably be at the expense of traditional retailers. in part due to amazon's dominance. but also in part to strength across the board. if you're a retailer like jcpenney, you would rather sale your item to a shopper in stores rather than online. it costs you more to sell that same item online. b and we know online sales are growing while in-store sales are

slowing. retail consultants partner joel bynes says that he thinks that promotions in store are actually much deeper than retailers had planned. while they will get the sales, it will likely be because they had to offer those deeper discounts which means margins will ultimately be compressed when we get the numbers. back to you. >> all right. thank you. let's talk more about retail on this christmas eve. and joining us now is jan kniffen. and would have been a great year except it wasn't for this border stuff that keeps harping. but it's true. there's real trepidation about what's finally in the tax bill. >> everyone's afraid of the tax bill at the moment because nobody knows where it's going. i read the 35-page gop blueprint. if they put it in just like right now, no tax deductibility of interest which would be a big deal for retailers. because they have a lot of debt.

expensing of capital but we don't spend a lot in retail. and then this cross-border transaction, if it were put in exactly as written and essentially you don't get to deduct cost of goods sold. so your tax bill basically cuts your profits in half if you're the normal retailer and all that works the way we think b it might. >> what do you say to the supporters of this kind of structure that this is so strong dollar that all that stuff that you were buying, you can get a -- it cost you a lot less. because that dollar is buying so much more than it did before? >> i think that's probably true. as it all balances out. in the meantime, people can go broke and bad things happen. so yes, we would worry a lot about that. down the road. maybe that'll be true. but we don't know what other countries are going to do. that's all in the theoretical construct of how economics is supposed to work. >> but retailers in every other country of the world do it this way, and they survive, right? >> they actually don't. they have a value added tax.

this is different. but it is true that they do have 17 to 20 out on the goods -- >> their exports are corporate tax at zero. right. >> right. and in fact, in those countries when those were implemented, we saw sales go down dramatically. then they start back from that level and it all works out eventually. >> but in that period, that's when you go broke. so who could go broke in that scenario? >> if you're highly leveraged -- >> like who? >> like who? anybody that's done a recent acquisition. i worry about penney even though i support them. i worry about them because they've got a lot of interest. and so those kind of things can be going forward. they've got all the carry forward. but we don't know what's going to happen under carry forward. >> the plan is for there to be a loss of carry forward still. but we don't know if that's ultimately going to happen.

>> and who it's going to effect. you worry about that and anybody who imports 100% of the goods. everybody does in retailing. either you import it yourself or somebody imports it for you. so you've still got the issue. now, do i really think that just because you import 20% direct you're better off? not really. because if ralph lauren is importing and selling it to you, they've got to adjust their pricing based on whatever happens with the cross border tax as well. so i think most of retail is significantly affected by this because everything they sell comes from some place else. >> and the consumer is going to be very sensitive to retailers trying to offset that higher cost through higher prices. >> that's another thing we didn't talk about in foreign countries where there actually is less competitive pressure in retailing. it has worked a little better. but here there's extreme competitive pressure in retailing. we're the most over-stored country on the face of the earth. and we've got new competitors here that are very low priced.

so if, in fact, it causes dislocations, it's harder to get the dollar back from the consumer than it used to be. beyond that, the consumer may look healthy and maybe it's saying in all the reports you read, things are getting better for the consumer. yes, wages are rising. more people are working. the consumer doesn't seem that healthy. they're fighting pricing. >> are you worried about the report that came out yesterday, sales in the first four weeks down 4% compared to last year? >> i am not worried about that. we have two extra days of selling this year. they're happening yesterday and the day before. we're past that now. that will have basically come back to even. i think we're still going to see the 3.5%. but i'm also assuming penetration online is 15% and growth online is 20% for this quarter. which means 100% of the growth goes online. >> thanks, jan. >> people are going to start using -- housing's going get

better, i think the stock market $3 trillion or something. these are animal spirits that aren't conjured up by the fed that we're starting to see. merry christmas. >> i'm in favor of this change. i voted for donald trump, okay? >> all right. i don't know if i'd admit -- you're going to leave here. >> we'll have a bodyguard out front. >> michelle did too. when we return, the big screen boost they're to bring in this year. it's not all good news. we'll tell you why next. as we head to break, we ask you to tweet us about holiday shopping. one tweeted, haven't bought a single gift yet. hoping cash is still king. #kingdollar. cute hofor larry kudlow. we'll be right back.

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as the year comes to an end, it's not all good news with hollywood. julia boorstin joins us with more. >> hey, melissa. the north american box office on track to top $11.3 billion. that's up about 1.5% from last year's record. but hidden in this new record are some concerning trends. higher ticket prices are driving the record box office haul, not

bigger audiences. attendance is expected to remain pretty much flat from last year but still down about 6% from a decade ago. and thanks to declining home entertainment revenue, a high marketing cost and fewer bigger hits, average profits at the seven biggest studios fell 17% in the first three quarters of the year, according to cowen. and disney dominated, earning 50% of those industry profits in the first nine months of 2016. plus, all the studios suffering some high budget flops from paramount's "ben hur" to disney's bfg. while box office grew 48% last year boosting hollywood revenue, this year chinese growth slunk to less than 9%. only three of 14 summer sequels outperformed their predecessors. certainly some trends to watch. >> certainly.

thanks, julia. coming up, we're going to get our guest host peter boockvar's top predictions for 2017. that's next. and the tweets are rolling in. many of you haven't started your holiday shopping yet. what? but nstripe jr. said he was shopping for himself because he sees a great deal on something he likes. "squawk box" will be right back. my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on

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♪ welcome back. we ask you, the royal you, to tweet us about holiday shopping. one viewer writes his shopping is nearly complete. the last thing he says he needs to pick up is a gift for me. he says he wants to buy me harry reid's autobiography. that would be really, really good. i want the real truth on that whole black eye situation. >> sounds like a nightmare. >> i use those stretchy things. >> yeah. >> you know what i mean? i saw the room where he had a stretchy workout thing attached to his shower door, supposedly. and he pulled it and something let go and he hit something.

>> i can believe that. have you worked with those things? >> no, showed the inside, didn't look like a place -- he's in -- he's in nevada, okay? he's got dealings with all these different types of individuals of all these types of -- >> i'm staying out of this conversation. >> oh. there's a martin scorcese movie in there. >> harry's already admitted the whole tax thing with romney was i did what i have to do. that's what he said. i did what i had to do. that was like -- this is the guy who's in charge of the senate. >> hello, peter. >> am i right or am i right? >> you're right. >> you've learned. >> i do want that -- that's really cute. did barbara boxer write one? send me hers. >> so, market. so i want to bring up, you had a care in the coal mine this past summer, it was about the japanese ten-year, right? >> yes. >> the jgb, that that had signalled we were turning in the credit markets. you're looking pret good on that

call, dood. >> so far. i think that's going to continue next year. i think interest rates on the long end will continue higher. i think further into 2017 the ecb is going to be talking about tapering that will further increase the rise in rates. if this border adjustment tax will further raise u.s. interest rates. >> right there, look at that. we had you right there in that august move. >> yeah, once i saw long end of the yield curve start to steepen in japan because kuroda started buying less long term jgbs, i said this is a change -- >> for the whole world. >> yeah. we're all correlated in some way. that spilled over into europe and certainly here. >> so long dollar is a trade? >> i think that will depend on the fed. if the fed raises only twice next year, i think the dollar rally's going to end. i think next year is going to be a tug of war between fiscal policy and the positives and the headwinds of monetary policy and higher interest rates. that's the story of 2017. that tug of war. >> happy holidays. merry christmas. >> thank you. you as well. >> all that stuff. happy new year. great having you here these two

hours. >> 20,000 today? >> yes. >> you're saying yes. >> i'm saying 20,000 today. >> as a christmas slash hanukkah. >> yes. >> hanukkah is tomorrow, right? >> i heard it's on the same day as christmas eve. >> okay. in there somewhere. all right, good, thanks. thank you, too, greenies. make sure you join us on tuesday. "squawk on the street" is next. ♪ good morning and welcome to "squawk on the street." i'm david faber with sara eisen and kelly evans, and we are live from the new york stock exchange. jim and carl both off today. let's get a live look at futures this morning. we are headed towards what appears to be a lower open for the broader markets. as for europe you ask, well, asked and now answered as you see, we were up on two of the