>> it's not a matter of the market moving, it's a matter of that generation generating an income, paying taxes, realizing that 401(k) plans and dollar cost averaging is a pretty good way to generate some wealth. >> the market can be exciting and compelling and rewarding and it hasn't felt that way. >> and for the last seven years the market, i think, people have mistrusted the rally because it was created by monetary policy. >> thanks. make sure you join us tomorrow. >> i'm here tomorrow. >> andrew is on "squawk alley." he's unbelievable. he's made for that show. make sure you join us tomorrow. "squawk on the street" is next. good morning and welcome to "squawk on the street." i'm david faber along with sara eisen and mike santoli.

let's give you a look at futures on this opening of the day of the week. most european markets also back from the holiday break, although i believe the uk closed for a bank holiday. there you see the markets that were open. more or less in the green this morning. the ten-year note yield, price was down a bit if i recall. there we are on the yield there, around 2.56 with crude up yet again. we've also got some breaking economic data. the latest s&p case showing home price reports out. prices registering 5.6% year-over-year gain and that was up from a 5.4% gain in september. so sequentially an increase there. let's get to our road map. >> and it begins with the march to dow 20,000. with just four trading sessions left, will the dow hit the milestone by the end of the year? and president-elect donald trump announcing plans to dissolve the trump foundation

ahead of inauguration day, plus tweeting about the market rally and holiday spending. we'll give you all the latest. plus retailers bracing for a flood of returns and hoping consumers will open their wallets when they exchange their gifts. let's get straight to the markets. futures right now, as david mentioned, little change ahead of the year's final week right now. we are still within 100 points of dow 20,000, just about 66 points away. 2016 got off to the worst start in history for stocks, but barring a massive sell-off we will ending the year with double-digit gains for the major averages. the president-elect weighing in on the rally tweeting over the weekend, the world was gloomy before i won. there was no hope. now the market is up nearly 10% and christmas spending is over a trillion dollars. guys, we've been truth squatting this statement as financial journalists. so the dow is up 9% since the election, so he's not far off there. the s&p is up a little less.

although mike said he should have gone with the small cap rally because then he would have gotten a double-digit gain. >> russell has had the business eg gain of any of them. >> maybe he's counting from the overinsig overinsig overnight sell-off. >> as for the trillion dollar spending number for retail. it looks like delight podeloit it would get above $1 trillion. that was before the election. >> and well before the holiday itself. >> though consumer confidence is up after the election. business confidence is up. home builder sent meant is up. so the president-elect does have a point when he talks about hope. at least if you're looking on wall street. >> yeah. well, we'll see. we haven't gotten the final read on holiday spend and today continues to be a pretty big day

for retail with those returns and the like. >> and you have consumer confidence at 10 today. >> another one. >> so you'll be able to have a check on whether there is a change in feeling throughout the month of december, i guess. >> meanwhile, when we see those kinds of numbers overall, whether it's 10% or not, the significant advances, michael, in the overall broader indices, i'm always brought back to active management and what an important year is this year and the years past, but even more so, once again active management will lose the battle there to outperform the broader indices. the rise of the index fund, which has already occurred, but etfs has only become more powerful. you wonder how many people will say why am i bothering with the fees, when all i had to do was buy the s&p. >> and the people who are in the business of active management are going to say, and there's some merit to it at this moment, that on paper they should be able to actually do better

because even though the overall indexes have done really well, you've had a lot of bifurcation in terms of what's working, what's not. in theory the reason these rallies after brexit and the election have been so powerful is those active managers have been on the wrong side of the trend and had to rush to catch up. so even though there's the opportunity there on paper for them to do well, they have been sort of caught flat footed with a lot of these dramatic moves. >> and they do chase as well. you cite individual names. suddenly everybody loves nvidia, but then since then they say we've got to own it. >> goldman sachs added it last week. the stock continues to climb after nearly tripling in 2016. it seems to be in the sweet spot. >> we spent a lot of time, jim, carl and i, talking about the internet of things and expect we'll continue to be doing that in 2017. it's only going to grow in importance as a theme and as an

important part of corporate america. >> but we were talking about earlier the fact that at least the stock trader's almanac puts this as the santa claus rally. >> that's right. we use it more loosely to say any year-end holiday-themed rally but the strict definition is the final five trading days of the year. the reason they isolate that, period, is as a tell for what might come in january. so it's not just that it -- you know, there's this unusual upside bias. there is some upside bias, but typically when you have a down market in that period, it has not been good for january. that's what happened the last two years. the last two januarys have been tough, especially last year's. that's why people are using it as a little bit of a test to see what the momentum is going into the year. >> last year we didn't get the sla santa claus rally and the market fell in january, the worst start ever, but climbed this tremendous wall of worry. which included a collapse of the

chinese currency and stock market and the price of oil and then the brexit and then the unexpected trump election win. >> i can remember being with so many active managers who were predicting a 10% drop in the s&p if trump got elected. and of course that was the opposite. >> yes. >> at least according to him we're up 10% even though we're not really. he's good, man, he keeps that gray area. talking about his sweets, president-elect donald trump also announced plans to shut down the donald j. trump foundation. that amid controversy over potential conflicts of interest but there is a snag in his plan. shortly after announcing he would shut down the foundation, the new york attorney general's office tweeted against his tweet that he legally can't until the state's investigation into the foundation is complete. back in october new york attorney general eric schneiderman ordered the foundation to stop raising money

in new york saying the charity was not registered to do so under state law and there has been a good amount of reporting from "the washington post" about this charitable foundation and it's been the go-to. i mean it was -- he has not given money to it or at least t had not been giving money between 2009 to 2015. he raised outside funds for the foundation and then some questions as to the donations that were made by the foundation, not just to buy portraits of himself and a tim tebow signed football, but also perhaps even more importantly payments of $100,000 and $158,000 where it had to do with legal trouble that he had to deal with and, therefore, said we'll make a charitable gift as a settlement and it came from the foundation, which as we know

is potentially other people's money and not his own. >> and the instinct at work here is to make it an anti-media take. nobody will report on the good work my foundation has done, therefore, we have to leave with this impression it wasn't doing great things. largely it was bidding in charity auctions, so that money that it was bidding was going to some charity, at least one mechanism, and then he's getting whatever stuff was bid on. >> generally the news out of this, the ethics experts that continue to be quoted in all these articles sort of applauding this news as a first step to avoid the appearance of any conflict. we also know the trump organization has been withdrawing from some deals ahead of the inauguration. clearly there's work being done behind the scenes ahead of this january press conference or announcement the president-elect has promised to make about some of the conflicts. i think it's fascinating what's going to happen with some of the cabinet picks as well. he has picked so far five billionaires and several multimillionaires to be in the

next administration. the journal over the weekend had a piece about how costly that's going to be and just how arduous the senate confirmations are going to be, these hearings. >> just going through all of the filings that are required by those nominees. >> especially mnuchen and ross. >> right. there are a minefield of conflicts that have to be dealt with at least. >> and a bit of friction over whether the senate committee was going to require tax returns from rex tillerson. they say they won't. but i guess maybe the call is do we really want to get bogged down here in the process or withdraw from conflicts, try to paper over it, get some people approved from office and move on. >> certainly wall street wants the policies that they are hoping for. the consumer certainly remains in focus this week as the nation's retailers deal with returns after the holidays and gift card redemptions. morgan brennan is joining us with more. morgan, what can we expect? >> reporter: hey, sara.

so far the early reading on holiday shopping is solid so far, so mastercard spending pulse says total holiday retail extending ex-autos and gas is up 4%. that is the high end of many forecasts. for the same period total holiday e-commerce spending is up 19%. the big winner's, men's apparel, furniture and furnishings. jewelry turning in negative growth. it isn't over with just five shopping days left for 2016. retailers are trying to capitalize on consumers' leftover appetite to spend. so after christmas sales began yesterday both online and in store. macy's and other department stores are offering big discounts. the big push is to get people into stores to redeem gift cards and/or bring in returns, since consumers tend to like to spend

more once they are there. now, the national retail federation's annual holiday survey indicated consumers would spend about $27.5 billion on gift cards this holiday. that's down from the 2014 peak, but still roughly about a third of the annual gift card market. the biggest beneficiaries of redemption this year, restaurants, followed by department stores, then visa/mastercard, american express, coffee shops, basically star publicatiobucks starbucks, and entertainment. returns are going to be particularly important this year. if retailers can get you through the doors to make those exchanges, that means more store traffic. it also means a greater potential for more profitable exchanges as well as additional purchases. sara. >> yeah, the edge that they have over those online retailers, morgan, thank you. morgan brennan in new york city. coming up, iran says its boeing order was about half of the price previously reported. and we'll have much more on the

markets and this march to dow 20,000. art cashin is with us as always. taking another look at futures, thin holiday trading. futures are point up after the dow's seventh straight weekly gain. s&p futures up 2.5. much more "squawk on the street" live when we come right back. grg makinevery dollar couou. wi i i earunlimited 2%arcash cash back ontal one. grg makinevery dollar couou. alof my purchasing. and that unlited 2% cash backkfm thousands of dollarsach year gog ck io usiness... which adds fuel to my bottom line. wh'sn youralt? th car is treling over 200 md maer both on the track anthousands of miles away. with the help of at&t, r bul racing c share critical inrmatn about ery

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welcome back. more news from boeing or involving boeing. iran said it sealed the deal to buy 80 jets for about half the announced price of $16.6 billion. boeing and airbus both signed contracts to supply commercial planes to iran. these were the first deal since international sanctions were lifted under the deal to curb iran's nuclear program. we haven't heard anything from boeing in terms of the overall cost of the deal or the revenues that will accrue to the company over time from selling those planes. i'm still trying to figure out what the actual price of air force one really is. the ceo of boeing last week did say it won't be $4 billion. that's only because the president-elect said $4 billion but nobody else had ever said $4 billion. but that did come from the company itself.

>> was that like a manufacturer's suggested retail price. but also does it involve service? there are other things that boeing gets over the life of a contract. very difficult to figure out what's being counted. >> and how common is it to get discounts on large bulk orders like this. we don't know. what we do know is this could be a source of contention for the president-elect. remember, when boeing announced this new deal with iran, they made a very clear point in the release to say this is going to support hundreds of thousands or tens of thousands of u.s. jobs in the process, which was sort of a nod to trump speak of how this is going to support american manufacturing in what is likely to be controversial. we already know that the house has passed a bill to try to ban the sale here of these planes. it has to go through senate and president obama said he would veto it if it happens before january 20th but this will be one of the central questions for trump. not just the boeing deal but what he does with the iran deal which is allowing this big

purchase to go through. >> airbus will still be able to sell its planes so that becomes also an issue here. as for the stock price, marike,t hasn't reacted negatively at all. there was that brief downturn on the first tweets about air force one but most of them have recovered. lockheed martin also has not been hit too hard over the separate tweets. >> i think obviously people focused on the long backlog of orders. of course they did announce some production line reductions related to the 777 and that was not including any cancellations from iran, so the stock price is weathering all of this. but the question is just what's built into lockheed martin and northrop grumman prices about the larger pi er pie potentiall getting bigger. >> lockheed tweeted that there's been a conversation. marilyn houston, the ceo,

personally committed to lowering the cost of the f-35 program. heard the message loud and clear about recan yducing the cost. gave him my personal commitment to drive the cost down aggressively. >> and lockheed stock has been hurt from recent highs close to 270. that around $250 a share. we'll watch the defense contractors. as we head to break, take a look at futures at this hour. a little over ten minutes to go before the opening bell. dow futures are up 3. we are keeping a close eye on dow 20,000. ubs director of floor operation art cashin and his holiday tie joins us next. much more "squawk on the street" straight ahead.

u.s. equity futures are point slightly higher on this holiday week of trade. let's bring in art cashin. coming off of seven straight weeks higher for the dow, art. what are you going to be looking for in today's trade. >> earlier in the program you guys brought up some of the seasonal indicators that we look at. so we're into the santa claus rally right now. and after the new year, we'll start looking at the first five to seven trading days of january, also a seasonal indicator. now, the reason they could be important is that the senate has promised to begin hearings on some of the cabinet members. so we can maybe get a little bit of a flavor when they discuss mr. sessions and whatever. one of the anxieties down here has been as we get to the inauguration, will the market begin to give up, seeing that,

once again, the rumor or the hope was better than the realization. and one other thing we're going to be watching that's not helpful to the bulls is that at year end it looks like we'll have major rebalancing in pension funds. as of right now, this can change from minute to minute, but it looks like about $35 billion in stocks for sale. they have got to reduce their stock position. because of the rally and because of what's going on with bonds to keep the bond/stock ratio in line. >> we're entering a new year with stocks, bonds, oil, all pretty much at their highs. are they culminating or vulnerable as we enter the new year? >> that's the great concern. traders are concerned that you've borrowed into the rallies that would have come and what's left for them. so this is going to be an important week, particularly what happens in that year-end,

if they're still for sale big and how is it taken down. >> what are you thinking about as we head into next year as the key sort of metrics and things that you're watching? >> i'm going to keep a big eye on europe. brexit is completely unsettled. you could see a variety of negative surprises there. if the british prime minister suddenly were to be overwhelmed and calls for a new quick election and lost out, so certainly the election of mr. trump was a major surprise, but i have some gut feeling that the surprises aren't over. that 2017 is going to be a very interesting year. >> well, there's a french election, there's a german election. i wonder if the fact that the brexit and trump proved to be buying opportunities, i wonder if that sort of idea carries over, because it's a different story when you're dealing with the eurozone and common currency.

>> and we haven't seen the real relation between what mr. putin and mr. trump will be and that can have market influences too. so i think you keep your seat belt fastened for the next two months and we get to see some really interesting stuff. >> a year ago people thought the fed was going to go three times this year. we bear low got one in. it the market going to be wrong with the fed in the different direction this time? >> i think so. unless mr. trump pulls a big trick out of his hat, the economy is still not quite strong enough to see where they're going. you've got other influences like the chinese currency. you live in an interesting time. >> art, thank you. we're glad to have you here to help us navigate through. art cashin. >> we've got the opening bell coming up in just a few minutes. stay with us. th ia le trading de

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you're watching cnbc's "squawk on the street." the opening bell will be ringing in about a minute and a half from now as we come to the last few trading sessions of the year. mike, what are you watching here as we close out? >> i think i'm watching the main trump rally beneficiaries to see if there's really a second wind going to come. really since december 15th, this

market has flattened out. you look at the banks, you look at the russell to see if it can continue to lead and there's some individual names which could be interesting. even at disney, which has gotten a little bit of a lift recently, just to see if money is looking to hold at year end. >> we continue to watch the rotation into various sectors we were talking about and whether it continues into some of the stocks that have been left behind lately. for instance, we saw some strength at the end of last week in some of the biotech names in concerns that the trump administration will crack down on drug prices. so will you see a continued rotation into some of the weaker spots to keep this rally going forward? "the new york post" looked at some of the dogs of the trump rally, some of the stocks that have not partaken. health care a big theme. gap and michael kors and even urban outfitters has been a loser since the election. >> as you hear the applause

build here at the nyse, we get ready for the opening bell. you can take a look back at the s&p realtime exchange back at our headquarters in new jersey. here at the big board, and over at the nasdaq communities and schools rang the opening bell. it's a bowl i'm not familiar with. >> the pinstripe bowl at yankee stadium. >> oh, okay. >> it's been going a few years. not one of the leading -- not a new year's day bowl. >> it's a good thing you have him here because i don't know what you're talking about. >> a tremendous northwestern fan. >> i won some of my bowls. college football not one of my expertise but santoli is on anything. >> no teams have a losing record in this bowl, unlike some. >> by the way, as we look at the opening trades here on the dow, great stat from peter, our other

a almanac. if this week is higher, that would be eight weeks in a row. haven't seen that since the fall of 2013. so certainly the momentum has been with the bulls. the dow has been feeling it a lot, but we do have a stronger dollar to watch. a lot of people looking at that as a potential risk to the earnings estimates next year, which are about 12.5% increases in earnings. and stocks are now at a higher multiple because they have run up so far before the election so one factor to watch could be the strong dollar in terms of what could get in the way of those double-digit earnings growth. >> we always mentioned the three -- 3ms of the world, not to mention google or ebay. you forget technology companies also derive a good deal of their revenues from overseas. >> there's a big question how

much of an offset that will be to any corporate tax relief you get. you have higher interest costs, at least marginally. it's probably not going to be a big deal for big companies right away, but trending a little bit higher and the headwind of the dollar. right now people don't really pay much mind to all that stuff. they're willing to put on the supposed policy beneficiary trades and see if they're proven wrong in a few weeks. >> sara, with rates going up, or deficits, that's going to potentially sending the dollar even higher. some are concerned. >> especially as enter rates go lower in europe and today again we see a record low for the german two-year. that differential is widening and the dollar is marching further. there's also talk of this import tax that's been spooking some of the retailers lately. that could also send the dollar, according to deutsche bank, higher by double digits. so a lot of factors ahead of next year. but so far, mike, to your point,

strong dollar and strong stocks have been correlated. it stedoesn't seem to be a fact >> and higher buying yields have been -- the market can tolerate somewhat higher yield or dollar or oil before it causes any pain. if you go back and look at the ten-year yield, you used to more or less track nominal gdp growth, you'd be talking about at least 4% right now on the ten-year and we're nowhere near that. >> nvidia soaring again to the top of the s&p again. >> they have had ann incredible year. their chips originally made for gamers are very, very well suited to being the chip that finds itself in more or less any kind of potential machine that's sending off data that will then allow for more efficient operation of said machine.

>> all the hot acronyms. >> we saw a deal earlier where they bought another chip company focused on this. this growing world we talk about in terms of artificial intelligence, which will be taking the data coming off of all of these machines -- by the way, when we get to 5g, we're not that many years away from it, which will allow so much more bandwidth for sending all of that information from so many things that are going to be doing so. it's going to be a different world. and so this is not something that's just going to end with 2016, but it has been a huge beneficiary of people's view of the growth that's still coming. >> i guess you just have to wonder has everyone already figured that out. the chip market obviously is boom/bust. it's people catch up, pricing is brutal once you get production up there. >> but sometimes these things go on for such a long period of time, far beyond what you expect. there are those who believe a.i.

will be as important if not more so than the internet itself. and so that's pretty big, as they say. we're dealing with a week, of course, where you don't expect to see a lot of corporate news. there's not going to be -- >> no earnings. >> no earnings. not expected to see much in the way of announcements in terms of marriages, corporate marriages or ceo departures are in anything else that might move a stock. we do have one this morning, seattle genetics worth mentioning, down about 17%. this after the food and drug administration placed a number of its early stage cancer drug trials on hold. this because four patients passed away during the trial. the trial of about 300 for drugs to treat acute myeloid leukemia. >> we're less than 40 points away. >> sgn is down about 17%. >> on the upside of the biotech

front, you have biogen which did have approval for a new treatment on a condition affecting infants. stock is up about 2%. the stock has struggled. a lot of the specialty pharmaceutical stocks have struggled. this one is getting a little bit of a lift on this approval. >> one stock i was going to watch was disney, dis. after another strong weekend for "rogue one" for the second weekend in a row, $15 million in north american ticket sales on christmas eve alone for the entire weekend, a long weekend, $120 million but for disney it has been a abogood run at the b office. they have had finding dory, captain america, the jungle book. you wonder at what point can that growth offset some of the problems at espn, which continues to plague sort of investors in the stock. which has come back. >> it's rebounded. >> and has moved a little bit on

the star wars numbers. >> it's flat on the year. this summer, of course, when really people started to focus on the potential loss of subscribers at espn, it suffered some dramatic losses. so it has clawed its way back to a large extent. parks is thought to be doing fairly well and the movie studio doing quite well. >> the market doesn't always want to pay up and put a big multiple on studio earnings. now, you need it for disney. they create the new franchises. it's interesting. they probably are going to be able to be very coy about the next "star wars" prequel, spinoff, whatever you call "rogue one" because they were downplaying expectations and now it's hit half a billion dollars worldwide. so clearly it's on its way to being a blockbuster. and this other new princess movie -- >> does that mean you've seen it? >> i have not seen it. my kids have seen it and loved it. one saw it twice. >> i just finally caug caught "frozen." >> did it live up to the hype?

>> no, not for me. >> wow. you're probably the wrong demographic. >> i may be. i like "tangled," though, much more. i continue to believe that in 2017 getting back to disney overall, it will be interesting to see if something significant occurs at the company in terms of a decision whether it's going to buy something of significance or choose another route. and you've got eiger scheduled to depart a year from july, so about a year and a half from now. no word yet on who his successor might be. tom staggs had been thought of as a successor but left earlier this year and it will be very interesting. we'll be talking a lot about disney, not just because of the box office. >> apple biggest percentage gainer in the dow as we watch the dow climbing 32 points. bob pi ssani is on the floor. less than 40 points away from

dow 20,000. >> we have a gentle lift to the market, not a lot of follow-through. europe slightly to the upside. take a look at the sectors. but it's a small, gentle lift. overall the market is up a bit. consumer discretionary, tech, health care, industrials, not a clear trending at all. telecom, some of the interest rate sensitive to the downside. not a trend but a gentle lift to the overall market. about dow 20,000, we've essentially gone sideways for the last two weeks. we essentially topped out around december 13th, so it's not unusual to see moves sideways when you have overbought conditions. that would be normal before setting up for a new leg higher, so nobody is particularly worried. i would say the trending is still very much to the upside. we have a very powerful, seasonal forces at work. not only the last two weeks of the year tends to be up, the last week tends to be up. the santa claus rally, first ten days of the new year tend to be up as well.

we asked how does it look this week? generally tends to be an upweek overall here. some of the big stocks, you can see the moves here, but overall the important thing is the s&p and the dow tend to rise in the final week of the year. what's also important here is we're getting some very notable rotation that's going on here, so remember the leadership groups in november and the first part of december were materials, industrials and financial stocks. those have been the laggards now so this have been lagging the last seven days. the stocks that were laggards in november and the first part of december like health care and utilities, they have now become leaders. so that's a very interesting reversion that's going on. one thing that's a little more difficult is to figure out what's going to happen when we have rising interest rates and what sectors like utilities and telecom are going to be doing. so here's the markets today. we're getting mean reversion. so the leaders are laggards, the laggards have become leaders

here. we're in the strong seasonal period and that's why people are still generally bullish. the dow 20,000 is right at the doorstep here. one question that's very difficult is how much stock is being withheld for tax purposes, potentially because of removal of obamacare taxation issues and tax reform down the road? we don't know, but it's widely discussed on the street. people believe that is some, that's why the effect may not be huge, but it's not zero out there on that potential for a lower tax rate. meantime, remember one other thing here. when you look at your portfolio at the endi of this quarter, if you have a balanced portfolio, there's not going to be a lot of movement. if you owned a portfolio, the largest bond etf, you'll find that they're even. so if you had a 50% portfolio spy and agg beginning on october

1st it's essentially flat on the year excluding dividends and they're practically the same for either one. a lot of people who have the big bond portfolio may not see the up that we've talked about. in fact the equity moves up were largely confined to the united states. if you look at the rest of the world, one of the biggest etfs in the world outside of the united states is the europe africa far east, that's down 2.5% this quarter. the other big one, van guard emerging markets, that's the biggest emerges market etf, that's down almost 7%. so again a lot of these equity gains and a lot of gains we're seeing is essentially u.s. equity based. bonds are not and equities outside the united states also are not generally gaining. right now we're 36 points and 30 points away from dow 20,000. guys, back to you. >> thank you very much. let's head to the bond pits now.

rick santelli joins us from the cme group in chicago. rick. >> good morning, david. you know, all interest rates are up several basis points. the 30-year was leading up four, it's eased back up three to join the rest of the crowd, but none of these maturities or the dollar index have taken out this cycle's high closes yet. if you look at a two-year, since mid-december you can see that 1.27 on the 15 was the high cycle yield. for tens it was the same day, just a whisker under 2.60. by the winner is if you look at european two-years, they're trading minus 0.815. it's the lowest yield ever and we want to continue to pay attention to some of the odd issues regarding mario draghi's effect on interest rates

overseas. if we look at the separation, and this is really fascinating, our tens minus bunds currently at 2.36. we separate it by 36 basis points from 2% to 2.36. november, let's look at november. november is separated 40 basis points from 1.60 to 2. which means in less than two months, the differential between our tens and their tens have moved 76 basis points. this is unbelievable. and it continues to merit not only to observe, but to observe how any of this will change as -- and finally the dollar index. the cycle high was around the 20th of december when it had a close of 103.29. mike, back to you. >> rick, thanks very much. appreciate it.

time now for a closer look at oil prices. jackie deangelis is at the energy desk with that. >> hi, good morning to you, michael. we're seeing a 1% spike in crude oil prices today. we just hit an intraday high, 53.67. that's also the closing high for crude oil in the last two weeks. this is pretty significant because we're seeing this off of the strength on the back of equities. right now the bullish sentiment just points away from dow 20k, definitely having an impact on crude oil prices here, especially when you have a dollar index that's trading over 103. that really should be pressuring crude right now. there certainly is some optimism about the opec deal. it will be implemented suppos supposedly on sunday. but people are less excited about it, although they are optimistic that that 1.8 million barrels will come off. right now crude traders are saying the equity sentiment certainly lifting this trade higher and they're optimistic about 2017 and trump policies

that will not only impact equities but growth and impact the crude market as well. >> stronger prices, even with a stronger dollar. jackie, thank you. when we come back, the dow closing in on 20,000. what does it mean for the share prices of the stocks involved? stocks are in rally mode. thank the trump rally or the santa claus rally. either way, we're all over it when we come right back.

welcome back. we have the nasdaq hitting a new record getting above 5500 for the first time. it's the first index to get to a new record high in this holiday week. the s&p 500 just a couple, maybe four points away from its intraday high and the dow is inching closer now to 20,000. eric joins us now with a look at what dow 20,000 really means. eric, i know you have the dow jones industrial average div divisor. >> obviously there's been plenty

of discussion about getting to dow 20,000. we know that's 66 points away from friday's close. let's talk about what that means in terms of actual share prices. it's just under $10. $9.67 to be exact. that's based on how the index was originally created and averaged across the companies. another point to remember because of that, the $10 can come from any of the 30 stocks since every dollar is worth the same in the index, no matter which stock provided it. it's not market cap weighted. not every company is worth the same. here's how it works if just one company moved the dow to 20k all by itself. $10 of travelers stock is only $$20.7 billion. these stocks have high share prices but relatively low market caps. you can imagine a small trade pushing those shares higher and moving the whole index in a big way. look at the other extreme, companies with low share prices and high market caps. that's where $10 is worth a lot

and much harder to find. for ge, a $10 increase per share would be worth $86 billion in market cap. for microsoft it's $75 billion and for pfizer it's $58. think about those numbers big and small. it's really just $10, but that's either a really easy or really hard task, back to you guys. >> good serious math there, thank you very much. was we continue to watch the dow up 42 points, apple is giving the most for the dow rally right now, 7.5 points on its own. ibm also 6 points. so this rotation theme into tech continues. >> the tech names that are getting the big cap nasdaq names up there is helping in limited fashion the dow. >> apple and s&p are up virtually the same amount for the year. >> it's on par. >> apple is basically the

market, right? >> apple is the market. all right, when we come back, as we mentioned, on dow 20,000 watch. p & g and goldman sachs are lagging today. we'll talk about which stocks will take us there when "squawk on the street" comes right back. ge to 500 customer cash on sele 2016 and 17 models r these terms.

the stock market rally continues, now putting the dow within about 25 points here of dow 20,000. it would be the first time ever. last tuesday we got within 13 or 12 points or so within that record number. we are in record territory, by the way, for the nasdaq right now. the s&p 500 on its own is up 0.4 of a percent, awfully close to its record high. some of the forecasts for next year are coming out from wall street, pretty bullish in terms of the strategist. citigroup says 2425 for the year-end target. >> 2500, what is that, that's about 10%, right? >> rbc. >> wall street strategists, their collective projection for what the index is going to do hovers in the high single digits. that's just kind of the way it tracks. i don't see 2500 as outlandish

in terms of being the high. i think it's more par for the course. it is a very large cap tech driven move today, though. the nasdaq 100 index, the big caps up 1%. so that's not really been the case since the election. it's been a very industrial and financials led rally so clearly people are finding their way into the other growth names. >> and didn't they say we need soy large cap tech participate to get over the hump? >> he had talked about expecting that group might need to participate. the financials in contrast a bit weak. weaker today. some of them actually even down after that incredible move in so many of the big and smaller banks. >> the big question, is there pent-up selling being accumulated ahead of the new year? really a lot of people want to ride this until -- >> there's also an expectation that capital gains rates go down

so would you consider waiting until next year to sell. >> a huge amount of volume in the january and february lows of last year. the buyers want that to be long-term capital gains. >> and who said the holiday week would not be exciting? >> being with the two of you is exciting for me. so i've got that going for me. we have a lot more coming up on "squawk on the street" for you. we'll have more on the march to 20,000. bob doll and raymond james' jeff saut will also join us.

good morning and welcome back to "squawk on the street." i'm sara eisen along with david faber and michael santoli. carl has the day off. will today be the day the dow hits 20,000? well, we are now about 30 points away, thanks in part by the strength in technology. that has sent the nasdaq right now to record highs, zooming ahead. and the s&p is within a few points of its own intraday record. oil up a percent is certainly helping this rally, david. >> it is indeed. we also have some breaking news

on the economy. let's get over to rick santelli in chicago. rick. >> wow, this is fascinating. so we get our december read on consumer confidence from the conference board, not to be confused with michigan. our last look was lofty enough, 107.10. that moves up to 109.4 and 113.7 is the new read. boy, that's the highest since august of 2001. that's a biggie. shouldn't be any surprise, though, given the performance of the market and the correlation of any confidence number to performance in markets, especially stock markets. and finally we're expecting 5 and we get 8. 10.2 is our last look and 10.2, does it stay? no, no, no. 4 -- no, richmond fed is the second best of the year and we want to continue to monitor -- is there any movement in rates

on this? no, but they're still hugging up close to their high yield and close to the psycycle. >> we went most of this under 100. we are within 30 points of dow 20,000. let's bring in bob doll and jeffy saut. gentlemen, thanks for being with us. bob, let's start with you. you know, we're entering 2017 it looks like with everyone kind of with a renewed sense of optimism about an economic acceleration. stock market at highs, bond yields rising, but people seem to be okay with that. what could interrupt this sort of happy scenario? >> so i think the happy scenario continues, but not without bumps, as you point out. what could bother the market? you already covered it. the dollar going up will hurt multi national earnings and interest rates moving higher has an issue with lots of parts of the economy, mortgages and stuff. i guess i would add to the list

the anticipation, the kind of donald trump gets inaugurated and growth takes off the next morning. you know this stuff has to be passed and that's going to take much of '17. so some of these things won't be effective until jan 1 of 2018 and that might cause the market to pause for a minute. but the economy is doing better. >> jeff, what's your read on the market's new field position going into the new year. the past three years, three down januarys in a row. they didn't necessarily lead to bad years, but you did have a bit of a hangover effect. are we set up for something like that again? >> my models said the markets were set up for a rally no matter who was elected president. obviously the trump win has accelerated the envisioned rally. the model says we still grind higher into the end of january and then we're due for some kind of pullback. i continue to think the market trades higher on everything bob

doll said. >> bob, the confidence boost. highest since rick said august, 2001, for consumer confidence. when you add that with some of the measures of business confidence, investor confidence, home builder sentiment, you name it, what kind of growth addition does that positive feedback cycle do on its own in the absence of any policy yet from washington? >> it certainly does. if people feel better about life, no matter what policy is, they spend a little bit more money and that would be the man on the street and the corporate ceos. that is in fact the case. the question is, is the confidence coming back so fast that no matter what happens, the markets can't deliver, the economy can't deliver? we'll see. we'll get pullbacks, but i think this confidence move really put in a bigger context. we've spent this entire bull market with nobody believing it. the caution, the concern, the next downturn is going to dikil me. and now we're beginning to have

people feel a little bit better. that's always a good sign. bull markets don't end until you get that euphoria. we may be moving from cautiousness to optimism but euphoria is down the line somewhere. >> jeffrey, you mentioned your models. are you talking about technical things or fundamentals? >> both. they're models my father and i developed. my dad was a portfolio manager. i would add to bob's comments that the pin wharton model says it could add 1.1 to 1.7 to the gdp model. i think the market is looking forward to that and looking forward to very good earnings comparisons over the next three or four quarters. >> bob, you know, just to build on this idea of the confidence effect, and as it relates to markets, not just the economy, if i'm looking back at prior dates when we had similar levels of consumer confidence, you get to 2006-7, you get to 2000 and

the late '80s. when everybody agrees things are better shall is that the time when the markets say, okay, it's kind of priced in here? >> eventually. i just think not yet. the markets tend to go through these cycles of i don't believe anything to, hmm, things look a little better, i'm cautious, and then people get optimistic. we've got to get euphoric and we're just moving into the optimism phase. the bull market is not young, but it certainly would seem to have further to go, because this is just the beginning of the optimism. >> i'm looking at some of these tech names, jeff. leading the dow right now, apple, ibm and microsoft. facebook is higher and the nasdaq is in record territory. how significant is that, a group that had been a little bit left behind after the election is making a run right now. >> technology to us still looks pretty cheap here.

they're trading at a price to estimated growth ratio of somewhere around 1.5, while utilities are trading at a pegged ratio of over 3. so we continue to like tech, we continue to like the financials and the industrials. >> some of those regional financials, mike, are also making new 52-week highs here. >> absolutely. bob, i wonder what your outlook for 2017 says about where within the world of equities to look right now. the u.s. is outperformed by such a dramatic degree. is it time to look elsewhere for part of your portfolio? >> at least not early in the year. i think as long as the u.s. growth expectations move higher, as long as the dollar is moving higher, this says the u.s. is where it's happening. stronger growth differential, the interest rate differential, i think this points to further strength in the u.s. versus the rest of the world. we're completing the seventh year in a row where the u.s. hasn't led. i think the signs are still

there at least early in the year. >> thanks very much for your time this morning. president-elect trump's twitter feed remaining busy over the holiday weekend, but in particular his cabinet picks and the confirmation battles to come taking center stage. our john harwood joins us from washington and he has the latest. john. >> you know, the cab knelt inet almost filled out in terms of donald trump's initial choices. the question is does he get all those choices and how fast does he get those choices? i want to take a look at three particular confirmation battles that the new trump administration is going to be looking at. first of all, rex tillerson for secretary of state. the number one issue that that's going to put on the table is the whole issue of donald trump's relationship with russia, which has become controversial with some republicans as well as democrats. remember, republicans have 52 votes in the senate. if democrats hold firm, republicans can only lose two votes and still win confirmation, so rex tillerson is vulnerable.

a secondary issue for rex tillerson is going to be the fact that he is the chief executive of exxonmobil. oil companies aren't particularly popular as many in big business are not popular. but rex tillerson has got a battle. secondly, steven mnuchen for treasury. now, i think he will be confirmed but he will face questions about the contradiction between appointing a former goldman sachs financial executive and the populist campaign that donald trump has run. and finally look at tom price, the georgia congressman who has been nominated to head the department of health and human services. that will be a major league ideological battle giving tom price's past support for blockading medicaid but also making big changes to medicare, the popular middle class retirement health program. this is something that donald trump has rejected. don't know whether the price

nomination signals that the shared agenda between tom price and paul ryan is going to take precedence over what donald trump said in the campaign. now, in terms of the effect overall on the administration by the slow process of winning confirmation for these nominees, not that great. it has the potential for slowing everything down, making it more difficult for them to get off the dime crisply from january 20th. however, the big thing that rex tillerson is over is foreign policy. in terms of steven mnuchin, he will look to overhaul the dodd-frank regulatory bill. republicans in congress can carry the ball on that if his confirmation is held up. finally, on tom price, the repeal of obamacare, which is a big core priority of price as well as donald trump, that again is something that the republican congress can move ahead on even in the absence of a confirmed

hhs secretary, guys. so you can have some impact and it could dent confidence in the new administration if a couple of scalps are claimed in the confirmation process, but not likely to be an overwhelming barrier to the trump agenda, guys. >> a net worth of almost $10 billion and running for the cabinet picks according to the journal. john harwood, thank you. coming up, we are on dow 20,000 watch. we're less than 30 points away. apple is leading the charge along with some other tech names. we'll have the winners, the losers and the surprises of the holiday shopping season as well. we'll break down the data when "squawk on the street" comes right back. nasdaq at a record high.

taking a look at the dow making another run for 20,000, within about 30 to 25 points away, it is up about 27 points and today is technology leading the charge. higher, david, we debate the dow 20,000 significance. it certainly is a milestone, a sign of confidence from where we were from the financial crisis, first passing over dow 10,000 in march, 2009. it's an important technical level as well. >> is it? >> certainly those big round numbers. >> when you're at an all-time high, your definition is some important threshold. the reason you can say it's worth making note of it as a milestone is the other indexes

are also clicking to new highs as well so it's not like the dow is rallying in the absence of everything else. the storize te izs it represent comeback for the markets in the last ten months. >> as our viewers know if they have been watching for any period of time, i always make fun of it because it is a statistically a relevant index. eric made the point that it is price weighted and not market cap weighted and impacts are much larger from higher priced stocks. but i guess they just had to keep it that way because that's the way they started it whenever they did. >> it's funny because now it's underneath s&p, dow jones indexes. so s&p used to snipe about the dow and now -- >> it's like all of the same family. >> it's a taste, it's a flavor. it's also what the person on the street thinks of. >> it makes the front pages.

when we try to measure the sentiment and you euphoric this rally has been, how widely aware the people are of it and the perception of a strong doubt. >> no doubt. >> and the market has had a hard time with very big round numbers in the past and has struggled to get behind them. we'll see. >> we will stay glued to it and david will wear a hat if it happens. meantime, e-commerce seeing continue growth this season with online and mobile sales soaring double digits. president-elect donald trump taking credit for some of the spending boom, tweeting over the weekend the world was gloomy before i won, no hope. now the market is up over 10% and christmas spending is over a trillion dollars. joining us is john who tracks the e-commerce spending. john, what kind of numbers are we seeing when it comes to online spending this year? >> well, it's going to be a really strong season for

digital. at this point we're pretty confident that by the end of the season that we'll see somewhere around $80 billion spent online which would be a growth rate of anywhere between 16 to 19% versus a year ago. and what's also interesting, given that kind of growth, is that if you look at the total expected growth that the national retail federation was forecasting, which is about 3.6%, if you do the math, it says that offline sales are barely going to grow in the discretionary sector this year, so it's really indicative of the major disruption that digital is causing to how consumers shop and buy. >> how much of it is going to amazon and how much of it goes to everyone else? >> well, amazon's share of total online spending runs around 20%, which isly high number. they keep growing that share. this year was no exception across every metric we track.

amazon leads everybody else. just as an example, the total number of visits to amazon for the season is greater than the next four retailers combined. and as the world shifts to more and more use of mobile devices, the amazon mobile app is so pervasive that it gives them an even greater advantage. and then on top of all of that is amazon prime. they have now over half of all u.s. households being members. and they get two-day free shipping, which then puts enormous pressure on all of the other retailers to deliver free shipping. this year we're seeing somewhere north of 70% of all online dollars in the season is spent with free shipping. so the pressure builds up even more on the retailers that are chasing the channel shift to online. >> so the picture you're painting, gian, pressure is building up. is there nothing for the core

traditional retailers to do in their own e-commerce efforts? we actually have the wall street journal talking about how they have the advantage on returns and exchanges and things like that. is it going to be fighting over a slowly shrinking pie? >> yeah, they do have the advantage of the physical stores. you know, they can use the physical stores so the consumers can buy online and pick up in the store and avoid the shipping costs, which is a very popular option and, as you say, returns are easier with the physical stores. but nonetheless, the pressure that's being put on, i think, the gross margins that the retailers -- that the multi channel retailers are able to get as they chase the channel shift i think really puts them in a very, very difficult position. especially if they're not getting any growth in the discretionary sector out of the physical stores. >> but it's not -- gian, it's not a zero sum game. the market is growing dramatically still for online, isn't it? >> yeah, it is.

you know, in terms of total share of dollars spent, online is now running at about 20%. so it's -- you know, it's a pretty significant share and there's no indication that it's slowing down. >> gian, thank you for joining us with some of the latest out of com score. >> you're welcome. when it comes to your portfolio, it will be one of the key areas to watch. the 2017 playbook on the defense sector when we returning. take a look at the dow. suey you see it nudging up within 30 minutes of 20,000. we'll be right back after this quick break.

as the nasdaq makes new intraday record highs, dow 20,000 is in sight. we're just about 30 points away. bob pisani is on the floor with more on what is driving the rally. >> there are a number of factors that have driven the dow 10,000 to 20,000, going back seven or eight years here. but the most important immediate factor is the election and trump's victory. remember, the dow has moved 1600

points. 1600 points since the november election. there's some very clear reasons why the dow has been outperform other sectors since then, primarily because of the financials. you see goldman is up enormously, the highest priced stock in the dow. jpmorgan is also up. we also see health care names as well. travelers and other financial names. so three of the top four movers on a percentage basis are financial names. meantime the low volatility names that have been the market stars up until the middle of the year, johnson and johnson and procter & gambles have all been laggards. we've seen a mean reversion but you get the general idea. sense the election, the dow is up 9%. the s&p 500 only up 6%. and the reason that is happening is because the highest priced names in the index have been moving the most. so we said this last week, the most important stock in the move to dow 20,000 recently has been

goldman sachs. they have gone from $180 at the election to $240. that's a 60-point move. simple way to do this in your head, 1.46, multiple ti by 7. goldman is responsible for nearly a quarter, 25% of the dow jones industrial average move since the election. the other important point is high price other financial stocks have pushed the dow up and outperformed other major indices. so jpmorgan, for example, moved 13 or 14 points. jpmorgan before was 70. now it's 86 or so. so there's 17, 18 points. that's, you know, add a couple more hundred points. also add on travelers, for example. travelers was another one. travelers was, what, 107, 108 before the election. and right now it's about $121. so travelers has also moved up.

so put in jpmorgan and travelers here, you've got essentially another 200 points on top of the 400 points that goldman sachs has moved. so there's 600 points, just three stocks. nearly 40% of the move in the dow jones industrial average at 1600 points since the election has been due to three stocks, goldman, travelers and jpmorgan. that gives you an idea of the influence and why people have argued about the worthiness of the dow as a good indicator of the overall state of the market being price weighted right now. so that's what we're keeping an eye on. 20 points, 30 points away right now. guys, back to you. >> bob, interesting. if the dow was up today as much as the s&p was up today, we'd actually be at 20,000. thank you, bob, appreciate it. the calendar set to flip over to 2017 very soon, so cnbc is getting out its playbook of predictions. morgan brennan has a look at what to expect in the defense sector.

>> in 2016, serious civil war escalated. north korea tested more nukes and u.s. agencies linked russia to election-related hacks. in 2017, tensions with russia will mounting. the iranian nuclear deal will be questioned and china will further flex its muscle in the south china sea. first, it's all about the budget, and the budget will increase, despite sequestration. details will be key, with more focus on cost efficiencies when president-elect trump releases the 2018 proposal this spring. sending, the nuclear triad could become a dyad. under the new administration, the fate of the land-based leg of the nuclear arsenal could come into question. even as modernization moves forward for the navy's ohio class replacement subs built by general dynamics and the air force's b-21 strelt bomber from northrop grumman. the race to secure space will take off. call this the other

infrastructure plan. as the pentagon -- expect more contracts, more launches, more business for boeing, lockheed, raytheon and oerds. one wild card, spacex, which landed a big military contract for a 2018 launch. on the heels of a falcon 9 rocket explosion, first it's got to get back into space. well, if president-elect trump's twitter account is any indicator, 2017 will be a very dynamic year for defense. i mentioned the nuclear triad and defense secretary pick mattis has in the past called into question the model that's currently in place for the deployment of our nuclear arsenal. a trump tweet last week calls for the nuclear arsenal, the american capabilities to be greatly strengthened and expanded. expect to see this massive modernization of the nuclear

arsenal move forward next year but an estimated cost of a trillion over the next three decades. cost is likely to come into question because, remember, we still have the budget control act in place, also known as sequestration. so expect a stronger modernizing of the nuclear arsenal, but as we've seen with the f-35 program, we could see some contractors come under the fire for cost on that. >> all of those stocks within the aerospace and defense sector or subsector of the s&p are higher for the year, some of them up double digits. morgan, thank you. a lot to watch there. morgan brennan. as we head to break, take a look at stocks that could be making history today. we are keeping an eye on every tick of the dow. 19,775, putting us 25 points away from the 20,000. the nasdaq is up, s&p within a few points of its own record high, up 0.4 of a percent. stay with us on "squawk on the street."

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good morning, everyone. i am bill griffeth. here's your cnbc news update. lots of demand, not much inventory. that helped push u.s. home prices higher by 5.1% in october. the index for 20 cities still has prices 7% below their peak back in 2006. republican senators john mccain and lindsey graham arrived in astonia today trying to reassure baltic states that

president-elect trump is committed to their defense despite campaign tweets that suggested that they should be contributing more to nato. korean airlines says today that it is changing its guidelines for when flight staff can use a stun gun. previously they were allowed only in what they called grave situations. after a highly publicized incident in which singer richard marx stepped in to subdue an unruly passenger, they are training crew members to use a stun gun in a fast and efficient manner. mourners continue to leave flowers, candles and other tributes outside george michael's london home today. the singer died christmas day at the age of 53. and that's the cnbc news update at this hour. sara, i got up early just to be with you this morning. >> this is amazing, a cameo from bill griffeth on "squawk on the street." lovy. good to see you, bill. a number of fights and disturbances across the country causing chaos and even shutting down several malls during the

post-christmas shopping day yesterday. morgan radford joins us from roosevelt field bamall in garde city, new york. >> reporter: dozens of malls are now reopening this morning after mass evacuations, pandemonium, chaos caused them to close yesterday. that was as several fights an even false reports of gunfire broke out. it all happened in several states. we saw it here in new york at the mall behind me as well as new jersey, ohio, three different malls in tennessee. what's odd, sara, is this all happened on the same day. the day after christmas. of course when lots of shoppers are going to return their items an even trying to get some of those after christmas day sales. police have no evidence that any of these incidents are connected. we do have suggestions what happened in ohio was posted on social media, but let me lay out the scene for you. in a lot of places what we saw was similar to what happened in new jersey. a fight broke out, someone slammed a chair.

when someone heard the chair slam, they kweyelled gunfire. then pandemonium broke out. people were scrambling to leave. we have seen a few arrests made, about seven arrests made. in connecticut where there was hundreds of teens involved in one particular fight. police do not have any indication that these events were related. they found no weapons, no actual gunfire, and so they're investigating now to see what exactly caused this string of events. sara. >> morgan radford, morgan, thank you. well, cyber security remains a focus in washington, on wall street and around the world. for more on the new relationship between incoming president trump and putin of russia and the yuds, joining usz is the co-founder of crowd strike which first connected russia to the dnc hack last summer. i'd love to get to china to begin because as important as russia and putin and trump's

relationship is, the relationship between the u.s. and china is also front saerntd rig -- and center right now. i did a documentary years ago on the stealing of corporate secrets by the chinese with the help of crowd strike as well. is that still a big issue? because the trump administration certainly seems to want to make it one. >> we've seen activity curtailed over the last year actually. when the agreement was signed between china and the u.s., we've seen industrial espionage actually drop a bit. it doesn't mean all espionage activity has dropped. if you're in the defense industrial base you're still subject to those attacks. but in terms of stealing intellectual property and secrets via cyber, we've seen a substantial reduction over the last year. >> that doesn't mean that the chinese have stopped their spying, their cyber espionage in broader ways and/or so many other countries i would assume

have also increased? >> absolutely. it's a quick way to make your economy better. when you think about what was signed between the u.s. and china, it was u.s. and china. it doesn't mean that china can't steal from other folks around the globe. there's still a broad case of espionage that takes place and china is good about it. >> what is the busiest state actor these days, is it russia? >> obviously with the dnc we've seen a lot of activity out of russia. i think it just highlights when we look at the broad global economic environment just how intertwined cyber is with our political and our industrial base. >> where is all this going? obviously the dnc hack has taken prominence certainly and some say may have even changed the outcome of the election along about some other things. but where are we going in terms of both our defenses and our offensive capability here in the u.s. and what we can expect not just from the chinese or the russians but perhaps iran, which

i know has been active, or even north korea? >> well, all of those countries have prolific cyber capabilities. when we think about the overall environment, it's just too easy to create malware that's not detected by the current generation of anti-virus products. this is the reason we're seeing a lot of these attacks. malware is tweaked, delivered to an organization, they're infected and overall you have a compromise. it's so easy had to, it's very little cost and very little opportunity to actually get caught. >> what is the u.s.' capability on this front? are we secretly doing anything to retaliate? >> certainly the u.s. has very great capabilities. we've seen some of the leaks from snowden. if you look at the response right now talking about sanctions, certainly there is capabilities to go back and gather information on these attacks. but right now publicly the u.s. has come out and has identified russia as the actor for the dnc. >> you were helping in that.

>> we helped in that. >> crowdstrike obviously also. >> we did, we did. >> that's sort of what they did with sony in north korea and then did anything come of it? this idea of just naming and shaming, is that enough? >> i don't know that it's enough. i think that sanctions are warranted here. does the u.s. have capabilities to take action? they certainly do. it will be up to the current and future administrations to decide what they're going to do. >> we have pretty sophisticated corporation here in terms of technology. google, for example. do they take offensive action when they feel it's getting a little much? >> i haven't seen any corporation take offensive action. i think what they're really focused on is shoring up their defenses, making sure they understand who the adversary is and making sure they can identify them quickly and prevent them from getting into the organization. >> some of this is so basic. podesta's e-mails, it was phishi phishing, it was basic stuff. >> you've been at this for many years. we still as an industry haven't

solved the password problem. think about how many people still use the same password on multiple websites. it's very easy to websites, log in and steal the information. >> george kurtz from crowdstrike. we remain an dow 20,000 watch. there we are up 38 points on the dow. that puts us within 28 points of dow 20,000, the first time ever. the nasdaq for its part at an intraday record high. what's driving the dow? apple and ibm adding 12.5 points. consumer confidence coming in at multi-year highs earlier this morning. we're also watching shares of nvidia, stock of the year. the best performing nasdaq 100 stock in 2016. goldman sachs last week adding the stock to its conviction buy list, giving it a little more air, up another 5%. stay with us on "squawk on the

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the dow is slowly closing in on 20,000. again, will today be the day? we've been wondering for a few days now. last tuesday got within 12 points and here we are within about 28 points. we've got a nice little rally. the nasdaq is at a record high. the s&p 500 is just a few points away from a record. it is up 0.4 of a percent. let's go out to rick santelli who has recovered from the consumer confidence beat and he has the santelli exchange. good morning, rick. >> good morning. and thank you, sara. i'd like to welcome my guest from phoenix, ira harris. ira, thanks for taking the time. >> rick, my pleasure. happy holidays to everybody and a happy new year coming up. >> absolutely. now, the ft ran a story a couple of days ago titled ecb should not be afraid to raise interest rates, says bundus bank chief. we all know that's about

wiedman. you think he's on to something there and you've written extensively at some of the thoughts that he's hinted at in that article. why don't you elaborate, ira. >> well, he wrote that piece and he's basically calling for a resix of the course of negative interest rate policy because, again, germany is far different from the rest of europe. there was a ten-page speech that he delivered at a conference and if you read the speech carefully, he's laying down the groundwork to counteract draghi. make no mistake about it that they are very much at odds. and i think when you saw the cut in the purchases from 80 billion to 60 billion, even though the program was extended, that was i think because of the pushback, even though overall it was still

a tremendously aggressive policy on the part of the ecb because they agreed to purchase paper below the negative 40 basis points. in that period we've seen the german two-year note go from basically about negative 56 to now negative 80. the two-year -- >> yes, minus 81 today. minus 81 basis points. ira, we've had dissention in our fed and we're still very reluctant with only two increases from toi50 to 75, so should mr. weidmann have any bigger impact than richard fisher did when he was on our fed dissenting. >> that is a great question, of course, because it's a different structure. and where richard fisher is part of the dallas fed, which is part of the united states, which has, and this is the key, a harmonize

edifi harmonized fiscal system. in europe, it's not harmonized. they rushed to do the euro so they have never harmonized the tax system. so what you have going on and weidmann is laying this groundwork down is that draghi, who i maintain is the most dangerous man in the world for what he's doing is trying to build the ecb balance sheet with all this other sovereign denting, italian, spanish, greek, and again this is the question, rick, for 2017. and i asked it to gentlemejerom directly. who guarantees the ecb. if you say europe, how can they when they don't have a harmonized tax system. draghi is trying to make the balance sheet so big and so overwhelming -- >> that they can't touch him. they can't touch him if he's so

big. >> you can't leave. >> when you owe the bank $1,000, they own you. when you so them $2 billion, you own them. i get the logic. thank you, ira harris. sara, back to you. >> rick, thank you. when we come back, iran says it will only pay half of the promised $16 billion for its 80 new boeing jumbo jets. gordon bethune will be here to weigh in on the airline negotiations next. and we are keeping a close eye on the dow. it's up 38 points. we've done this dance before on the march to 20,000. what's different today, it is being led by technology. apple, ibm, microsoft. they have underperformed since the election. will they take us over the edge? much more ahead on "squawk on the street."

new headaches for boeing this morning. iran announcing the country will only be paying half of the original $16 billion that was agreed upon in the original boeing deal. for more we're joined by gordon bethenu. boeing not the partaking in the dow rally.

gordon, welcome. >> glad to be here. >> so give us con testextcontex. boeing is not responding, but how normal is it for the big ticket purchase be offered at half of the announced purchase price? >> you have to go into the accounting. i worked for boeing many years as an executive, so sold a lot of airplanes and of course i bought a lot. and it all depends upon what the value to boeing, the rate increase they may avoid because they will have the holes in their production line filled. different ways to account for transactions. yes, there is always a discount, but i rarely have seen anything of that order of magnitude. >> so what would explain this? or do you just simply not believe it and believe that iran is trying to do something political here? >> i know that the government of iran is under tremendous pressure for spending these billions and billions of dollars for new airplanes when the country is suffering as they are. so i'm sure they are trying to

mitigate some criticism they're getting like we're not 13e7bding all that money from their own citizenry. and also, it's testosterone. i buy mine cheaper than you. but boeing rarely will comment on those. >> to that point, it seems as if however this particular contract is characterized by one side or another, it's not as if the market is taking it as if it's somehow going to be some kind of price discount that gets extrapolated over if future customers, right? >> well, sure. and they may be use things like net present value of the money that they will receive over the next ten years and what that is worth today. and we could say it's only worth half of what it will be over the 20 years. you just have to be really careful. what i see is a government official kind of thumping his chest saying look what we did. >> and what is your prediction for boeing's relationship in this new administration? it's already been the subject of a tweet from the

president-elect. we know boeing's ceo will go negotiate down the price and also the iran nuclear deal. >> i was there when we sold them the current air force one. and they special order and reconfigure that airplane to where it cost at least three times as much as a regular 747. so it's not boeing pumping up the charges, it's the government with special designs and feature takes are not commonplace. so mr. trump is just getting an wakening of how our government spending money. >> i feel as though we will be dealing with this a lot more as ceos certainly will be. waking up in the morning and finding you are the subject of a tweet that con receiverbly that could be negative for your

business. how do you go about responding? >> i think you learn to live with it. you don't ever want to get into a contest with the president or even the mayor of new york city. you just have to try to mitigate it. don't fight them head on. it would be foom lilish. >> do you agree with the critics that the deal with iran should not be allowed to go through because it would be going to nefarious purposes or to you ultimately believe that would put boeing at a big competitive disadvantage and it should be allowed to go through? >> i think that our government did a reasonable job trying to make the first steps in accommodating iran back in the civilization. i don't want to criticize the administration. i know there are a lot of criticisms. certainly if we're going to have trade with another country, airplanes are a big part of our export on balance of payments. so i don't know how you could avoid treating iran differently

if we've reached an accord under a treaty. >> all right. we'll leave it there. thank you. that was helpful. trying to understand, that's why we brought him on that about coming up, ron johnson on all things retail. but first the nbc universal family celebrating acts of kindness with our share kindness campaign and we've asked others to share how they give back. how is filmmaker ron howard. >> we have a attempt foufamily that makes donations to boys and girls club is a big one, women's rights issues around the world very important to our family.

you're watching cnbc first in business worldwide. welcome back. a looked a crude oil prices coming just off the session high of $53.75. more than 1% gain today on the back of the strength that we're seeing in the equity markets. part of this of course is the expectation that sunday's implementation of the opec deal, that cut of 1.8 million barrels,

will start to have some impact on the market. but also crude oil traders are doing some position squaring ahead of the end of the year and they're watching equities. we're just about 25 points away from the dow 20,000 and the potentially positive implementations of the trump administration policies will be good to both, as well. kayla, back to you. >> thanks so much. good morning, it's 8:00 a.m. out west, 11:00 a.m. here on wall street and squa"squawk alley" i live.