and "squawk box" begins right now. ♪ living in america >> live from new york where business never sleeps. this is "squawk box." ♪ >> i'm making you cuban. that's a very cuban way to think. it got within a point. >> i was on call to come on and talk. >> really? >> on the phone. >> wow. extending your thanks for us. >> i was on the couch. >> good morning and welcome to "squawk box" we're live from the nasdaq spot and u.s. equities future suggest a lower open for the dow, and the s&p. pretty flat open so dow, you know what, still a possibility

but maybe not right away. >> close. >> we are close. overnight in asia, japan's nikkei was closed for a holiday. and u.k. prime minister teresa may indicating a exit from the single market as part of her brexit plan. she has no plans to keep bits of eu membership and the ftse 100 is the only that's positive. >> either you have control of immigration or you have a good trade deal. i don't see it as a binary issue. we will, outside the european union be able to set our rules for people to coming to the uk from member states of the european union but we also, as part of that brexit deal will be irk withing to get the best possible deal in the trading relationship with the european union. and here's a look at currencies dollar stronger

across the board. you'll get 117 yen for every dollar. pound will cost you $1.21 1/2. >> mcdonald's selling controlling stake to the group for about $2.1 billion. mcdonald's keeping a 21% stake in all of this. they plan to add more stores over the next five years and i don't know -- does this come on the heels of -- do we connect this to young brands and that move? if you're a big multinationalal, wheth whether you want to be there. >> a lot of big name brands struggle in that market. they said they're going to open more stores. >> but not with their own money. >> right. >> the auto sector, gmceo says the automaker has no plans to

move where it makes small cars. trump threatened to slap a border tax. they said the auto business has a long lead time for where it produces vehicles with decisions made two and ninety-fosqand fou ahead and only a small number being imported from mexico. she looks forward to being part of itlution. she's part of a group of ceo's advising trump on economice issues. the company says the move will create more than 2,000 jobs. and they plan to add three new jeep models and make those in the u.s. we'll have more at the bottom of the hour. >> chevy ted cruz i think it should be. so i was waiting on -- waiting

to come on if we went above 20,000. i got a call -- i don't need your insincere. >> it's very sincere. >> i had hinteresting things. number one, january 6th. we would have hit twe20,000 on birthday. being at 20,000 verses where we were -- >> it's 17, i'm in the wrong. >> from where we've come and i remembered a time back in the early '80s when we were below 1,000, remember granville so he said this is a really great mark market. buy everything and there was one day he said i was wrong. sell everything and we had the biggest crash we had ever had up to that to point. that was on january 6th, which

was weird, of 1981. the market was at 1,004 when it all began is the waves of selling came in and ended the day at 980. it was down 24 points. that was the biggest crash ever and 93 million shares. it had never been seen before. down 24 points. so that shows you even on a percentage basis that wouldn't be very much now and he started dressing up in pharaoh outfits and carrying a ceptor and spreading the seeds but he was a famous technician. >> one of the few guys that could do that, crash the market with his change in opinion. >> i think cashen started -- >> 770, something like that.

>> and i think down in the hundreds. >> the way this market's teasing us, you go back within cashen's career. and never closed there until 72, i think. >> and went back down, never got there until 80 again. joining us to talk about all of it. founder of aa deans. whenever i say that -- >> you think i'm the aa. >> you've got 12f h-step prograo getting profits. >> yes. i'm surprised you talked about profits and not something else. >> exactly. and cnbc contributor. and with us for the hour, cnbc senior markets commentator. so now i'm framing what happens

in three different scenarios. one we've gone too far, too fast. number two we haven't gone far enough given the possible synergies of everything that's going to happen after're just bo see the benefits and number three, nothing about january 20th matters. >> it feels a little ahead of itself. there is the possibility for positive things happening. some of the regulatory. the momentum in the economy seems to be going up. if you put in the earnings estimates, some benefit of these new policies, that's an expensive market for the possibility of us seeing -- >> it's a likelihood of things happening. regan didn't have as much

republican representation in congress but it was three or four months it was done alreada. bush did a tax cut. i mean these guys seem firmly committed to that and deregulation. i don't think it's questionable. >> i feel like everything out of washington is questionable. but there are offsets, joe. the wage numbers were wonderful for workers but does point to inflationary pressures. which means interest rates could go up and both of which usually indicates a lower perks e for the markets. i feel as if we're much more bait and see territory. >> inflation, we're on the side where weed arer like a little and we're so far away from where it would become a problem and interest rates we were at zero. i looked at japan.

almost negative in japan. we need to worry about those two? the fed hasn't worried. >> i'm not worried as a real problem but i'm saying there are offsets. >> you're not really going to disagree with this either. and you don't think you get any fiscal and not until the second half. >> i think infrastructure is going to be fairly small. it's more of the tax side. if you take the candidate trump's plans -- there's enough concern about the deficit not to get that. but there probably will be some form of tax cut. certainly in the front of it there's going to be some that boost but not 2% of gdp and it will take a while to get agreement on tat.

i mean to the extent the economy is genuinely boosted in the next six months, it has to be the confidence effect. they've all made a move here. have they run ahead of themselves? are we setting ourselves up for disappointment? yes. momentum is clearly up and the labor market continues to improve. i think the way to split this. if all you were bullish for is the policy you're likely to get in the next several months, it's probably not enough. and if you look that last month's market action, the trump trades, the ones levered to policy, that's not what's leading the market. nasdaq's out performed, the transports are down. the kind of high tax rate stocks that everyone created a basket

of, they've undercreated the market. so the market has more going for it than just the policy. so policy becomes good news and a kicker. that's fine. i think we're just knocking around hovering in this range. it's just that we were on the verge of 18,600. and not 20,000. so nobody noticed it refused to have momentum behind it. >> we got one last week that said what is santoli's problem with jacket? you've never taken off. why can't you get with the program and take it off? did he send that to you? >> i've made rule for myself -- if i'm here for an hour. >> now the same guy is writing and saying -- he's saying mike rolling with the program. >> no i'm here for an hour. >> you've been here many times

for an hour. you've taken it off before. okay. i forgot that. >> last week i was here for a quick job. >> like a guest. >> like a professional. >> not just hanging out. >> i try to respect the show. i'm going to roll up the sleeves at some point. >> we have people every hour to talk about the markets. we are a financial show but one of these days -- at least time passes and we'll see what does happen because we like to conjecture a lot about it. but we're either ahead of ourselves, ahead of ourselves not enough but 20,000, i'm ready to say it. 36 points. >> it can be done. >> it could happen today. >> i got to thank everybody. >> oh, thank you. >> awesome.

>> thank you, jim. mike is with us. for the rest of the hour. . >> should we talk a little political news? we could talk meryl streep but let's talk political news for now. don't say anything. i got china news. i knew you -- you get three hours every day to do it, she had five minutes to do it. some political news, things heating up between trump and china. the state-wide tabloid that china would take revenge if he tries to reverse the one-china policy comments coming just ohours after the president of taiwan met with u.s. senator, ted cruz and texas governor greg abbott in houston. bejing asked them not to allow taiwan's president to enter and rather he should not have any formal government meetings under

the one-china policy. it's the obligation of the u.s. president to respect the existing order of the asia pacific. so we have that news. >> brave. >> you're still on meryl streep. >> i am. i'm not done. this talk about a -- you should be talking about this story is reportedly in deal talks with trump's son in law, kushner to invest in a project to redevelop a flagship new york building owned by kushner companies who is married to trump's daughter, ivan ivanka. according to the new york times over the weengd, kushner is studying with law makers how he would have to distance himself from the family business if he were to take a position in the incoming administration. he's on the cover of this week's new york magazine with the headline president in law as the

in-law but also the president as in he might actually be the defacto president behind the scenes. people don't appreciate the role jar jared's playing in this and how does he distance himself? the rules are different. t thes is in one place but if you work for the president, you trulee have to be an uninterested party and this is a clear example of a very interested party. for this is more, our good friend john joins us now. >> the jared kushner story is part of the concerns democrats are raising and republicans are trying to push back against although some have concerns about business conflicts and all of this goes the to what we've seen the last few days. which is democrats trying to slow down the confirmation process for trump appointees.

it appears -- you were talking about the one china policy and the cruz/abbott meeting. it has appeared that donald trump's strategic objective is to have a closer relationship with russia and mutually counter a growing china and we just don't know how that's going to play out. go strategically it is a very unpredictable situation. we didn't expect what trump has had to say, the converseuation the chinese leader and reaction. don't know if that's a blip that will disappear and go away or whether that will surface and color relations as donald trump tries to react to china on trade and a host of other issues, national security as well. >> and the other thing that came out and continues to bow an issue, the issue of this ethics

office and all the submissions that have supposed to be made by nominees in advance of hearings. it now appears there's been a letter sent from the ethics office suggesting they've struggled to communicate with the trump transition team and struggling to get the information and historically that has been submitted prior to a hearing so the proper questions could be asked. this time around, that doesn't seem to be the case at all. >> there's nothing absolute in this situation and the republicans point to, accurately, to situations that have arisen in the past where some things moved without all of the paperwork being done. it is a reflection of what is so extraordinarily different about this particular administration. the fact that we've got a businessman with a world wide brand coming in, that he's appointed a lot of business

executive cans who potentially could have conflicts as well. conflicts arise with nominees of every president but it appears the concern is bigger and the web of questions is bigger. so democrats are going to try to see to what extent they can slow this process down as they scrutinize theetse nominees mor closely and what makes it more extraordinary is that it involves intimate family members of the president. the president elect. jared kushner, whether or not he takes a white house job, he was probably the most powerful single person in the trump campaign, apart from the candidate himself. and so what business activities he engages in or his company, same with ivanka, ivanka trump and donald and eric as they try to manage the president's

business. all of these are different in ways we haven't seen before. >> my twitter feed blew up last week. did you do a pole or something john, about wikileaks? >> yeah. i put a question on twitter while there was the back and forth between donald trump and the u.s. intelligence community as they were releasing the report from the director of national intelligence and i said who do you believe, america? wikileaks or -- >> what were the numbers? >> the numbers went heavily for wikileaks and against the u.s. intelligence agencies. >> heavily is 51 or 49 -- >> no 83/17. >> oh, 83. then did you trash your own poll or what did you do? >> i didn't say anything. a lot of people on twitter were

talking about it. all of these online polls, it's kind of like -- >> then why do it. when you're going to say it means nothing anyway? >> i do a lot of stuff on twitter simply to elicit reaction from other people. >> it was a great number. it was hilarious. what did you think of it? >> about what i thought it would be. there's a general feeling that you don't hear necessarily verbalized that a lot of these agencies people are wondering if they're all corrupted to some extent. erick holder and lynch. >> we talked last week i don't see them as corrupt. but i understand some people do. >> or at least somewhat questionable. anyway, thanks, john. coming up uber is opening its traffic flow data to city planners and researches. and we have a full line up of

market coverage as we are yet again on the verge of dow 20,000. "squawk box" will be right back. x nchmerepoli egjuck b bchmark x inn'ouevinave.'sutoao lindseigng tr egjuck b bchmark

♪ welcome back to "squawk box" we are in the chairs. first topic, corporate tax reform. i know you're very excited. i said i would explain the plan in the gop for corporate tax reform. what's the current tax regime? yes, current law. world wide revenues minus costs multiplied by .35 that equals how much the company pays in tax. the gop plan being advocated by paul ryan, domestic revenues, minus domestic costs multiply by only .2. 20%. so focus right there on domestic costs. that's really important. because if all you can do is

subtract your domestic costs, you're incentvised to bring as much of your cost base here to the united states rather than having it overseas. so we keep hearing they're going to tax imports anditary rr not going to tax exports. that's how it ends up being but it's not actually an import tax. you don't get to deduct those import costs. it's a big deal. >> it is. now you know, when i get up and look for the most surprising things and first it was meryl streep. so out there and so edgy and not knowing what her peers were going to say or their reaction and i hear larry summers and the ft -- >> hates this plan. i know you're shocked. >> he wrote an editorial -- >> it's going to exaser bait

inequality. >> larry somers said this? >> yes. >> that's why i get up every morning to see the crazy unexpected stuff that comes out. now he says it's going to hurt the tax base. what did you say? >> it will hurt the tax base. >> it races a ton of money. this is very similar to what all of our trading partners do, right and it raise as ton of money. 1.8 trillion you could get out of this on a yearly basis but if what he's referring to i feel he's gone krugman. but now everything is done through this political lens and i feel larry summers is doing the same thing. >> you don't think it makes costs higher? >> you're asking a different question. >> he speaks to this. but he does speak to this issue.

one of the great benefits of importing all the stuff has been cheap goods and when you talk about people in the middle class or the lower than that, one of the great beneficiaries of our policies has been the cheap goods you can buy at walmart. >> and what i did not add is this is a very strong dollar policy. huge. dollar could move 20 to 25%. which means the cost of the consumer wouldn't go up that much because you can buy so much more imports with your dollar. he argus both sides. the poor are going to get hurt beutthe dollar's going to strengthen. and that's going to wreak havoc around the world. that's a different point that is perhaps valid. >> the cheaper prices at walmart is why the left has embraced

walmart? >> now you're going to defend walmart? >> as we just saw. the hats keep shutting. coming up the detroit auto show is kicking off. you know they like walmart now. be there with bmw board member ian robertson. new play book for the market when trump takes office. here's a look at last week's s&p 500. the winners and losers. >> give me, give me, give me. >> where's the beef? ♪ my love for you went viral. ♪ atcal nga ballts

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welcome back. you're watching "squawk box" from the nasdaq market site in times square. good morning. take a look at u.s. equity futures as we try to climb closer to 20,000. we're going to show you what's going on right now. the dow looks like it would open off about eight points and nasdaq looking up and the s&p 500 down. the north american international auto show is kicking off in detroit. hey, phil. >> reporter: hey, i'm here with board member from bmw who joins us on a day where we're going to talk a little bit about the vehicle behind you a bit but i mentioned earlier today the presence of donald trump is all

over this show. you saw his tweets, you've seen his tweets. you have manufacturing scheduled to come online in mexico in 2018 -- >> 19. >> any concerns you may have to modify those plants? >> we decided to have a strategic plant in mexico that will supply product to many markets around the world. what's important is we continue to invest in spartanberg. so we're putting another billion dollars in between now and next year and that will take the capacity even higher and it is our central competence for the majority of all of our products that there exported. and that's about $10 billion a year from the united states. >> you're manufacturing in spartanberg. how much higher can you go? >> around 450/455,000 units.

that's way bigger than any other production plant we have around the world today. >> and you're going to bow releasing the exports from there. the fact that you export more than 300,000 last year? >> yeah. and as i said department of commerce numbers is around $10 billion worth in the u.s. we're in fact the biggest exporter from united states. we have around 8 1/2,000 direct emplies. and that will continue to develop as we move forward. >> do these tweets have the auto maker on edge? >> i think we need to see how it develops and we're always very flexible. we have production facilities around the world. we have 30 of them in 14 different countries and we will

mix and match where the supply lines go to follow the sales potential. >> let's talk about the five-series. we have a couple of the models. let's take a look at the vehicle right now. i think a lot of people look at sedans and yeah, they're important but it's all about suvs these days. >> sedans are still a very important part of the market and the 5-series is one of the core products for bmw. some 2.3 million cars were sold around the world. we're really excited about the new model. it builds on that success and i think we're dir 're going to se more potential. >> last year was a rough year for the luxury market. are you feeling that resistance? >> when we were here this time last year, i said i thought the market was going to flatline on

the premium side. it did just that. it was probably pushed a little harder than it should have been. we see the market, of course around 17 1/2 million. so it's way past its precrisis levels and probably plateauing right now and we'll see how it goes. >> you're teaming up with intel and mobili. have you had a chance to test drive any of those autonomous vehicles? >> we will bring 7-series in the second half of this year. they will be utilizing the mobileeye technology and intel technology. the road is probably another four to five years before it's fully mature, fully develops enough for the technology as well as hardware to take the

next big step which might be 2021 sfwlp board member for bmw joining us at the detroit auto show. coming up later this morning a "squawk box" exclusive. ceo of waymo. bringing down the cost of self-driving cars. back to you. >> kids born today will never drive and that will be fine with me, phil with what i'm going through every morning here. please god. anyway, thank you. we've got some comments from the president elect as we were wondering about meryl streep. it would have been funny just to do the first one because we could have done a poll. and we could have had like on "family feud". but he said meryl streep, one of

the most underrated actresses in hollywood doesn't know me but attacked me last night tat golden globes. she is a -- survey says. and here's the second thing. she's a hillary flunky and hillary, who lost big he says and for the hundredth time i never mocked a disabled reporter but simply showed him -- and we got six dots after that. we don't have that one yet. apparently right now getting the 140 characters filled out for how he's going to say that he didn't -- at least that he didn't mock the disablied reporter. >> he has a history of calling people retarded. so that's just the facts. coming up we have a lot more on the markets and the march to 20 dow. it's a whole new ball game when trump takes office and a former cia director is going to talk

national security. and later the ceo of bienaime weighs in on the future of health care. stay tuned, you're watching "squawk box" right here on cnbc.

♪ marxets came so close to 20,000 on friday. inching towards tat possibility today. next guest says throw out the old play book when trump takes office. chief strategist at hilltop securities. what to you mean? throw out which play book and what should we do instead? >> i think under the trump administration we've reached a break point in the markets and the economy. whatever takes place during the next two weeks, whatever the fed says in the fekst two weeks, none of this stuff makes any difference. we're go having to business people on the fed. we're going to have a whole new market and with these tax breaks, i don't think they're

thinking far enough ahead. if you go from a 35% tax, corporate tax, to a 15% tax or even paul ryan's 20% tax, it means that right to the bottom line of corporations in america you're getting between 38 to 43% and the pe multiples drop, by my calculations somewhere around 13 or 14. so you're just looking at a whole new world. >> so the doconcerns earlier in the show -- they expressed concerns because they are uncertain about whether or not tax reform is really going to happen as you stated. you are convince snd. >> i am absolutely convinced with the republican congress and mr. trump that someplace between 15 and 20% we're going to have a corporate tax rate and we're

going to have a tremendous move in supported for the oil industry, the coal industry in the united states and i think we're going to have a huge push to become self dependent in energy, which is great for us, great for make america great again and very bad for the rest of the world. >> that implies to me that you should back up the truck and load up on equities here. is that what you're suggesting? >> as you know, michelle, when i was with you on the 8th and 9th of november i said i thought trump was going to win and buy equities and you can judge the result of what i said. >> we've had ha tremendous rall since then. is there still more to go? >> i think we're going through the 20,000 number boom. it's a question of when it gets rolling and i'm very optimistic about the financial markets and

by the way i don't think we're goei going to back up in bonds because there are going to be a number of tax programs and the move in oil and energy is going to be very beneficial for our country. i'm very positive about the markets. >> that's what yrv been saying. what's the consensus right now? do you watch that top of the 6:00, the 7:00, the 8:00? what i'm hearing and i've started saying this. the consensus is we've gone too far, too fast, we don't know if any of these policies will be enacted, there may be problems with the trade war -- everyone of them thinks we've gone too far, too fast. we've had one person say we're underestimating the sum total of all of these pro business programs.

when has the consensus ever been right? when everyone comes on singing the same song? there's two scenarios and the one in the minority is that we're underestimating how powerful this could be. >> joe, part of this is being a human being and i mean by that, that people don't want to let go of the status quo. they have a great difficulty letting go off the status quo. they don't understand that the last 30/40 years of professional politicians, we are now going to have business people in the fed, business people in the government. i think we're going to have guys that sit on their own two feet, made something of themselves in very important parts of this government and i am had very optimistic that we're going to be charging ahead and doing very

well. i just don't think many people understand this. they haven't goten the joke. >> they're focussed on the conflicts of the business people which -- >> yeah, i think we're going to be doing much better than almost all of your guests have said. >> play the music. >> you've been right about a lot of things. >> thank you, michelle. coming up, louie navellier says a milestone will be a launch pad for stocks. if it's three big investment ideas. as we head to break, here's a check of what's happening in the european markets right now. sfrrs istrg 2 ury ece k

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>> the donald trump era officially begins. follow the leader wherever you are all january long. cnbc first in business worldwide. welcome back to "squawk box." take a shot like that you think something is going on, you get a shot of the police there. but they are always there in times square. dow coming in shy of milestone, tech sector hitting a 16-year

high. joining us with top stock picks, good morning, louis. >> good morning. >> how are you feeling this morning? last time we saw you, you were pretty bullish across the board. >> sure. i'm still bullish. the earnings are going to get stronger and stronger as the year goes on. the wild card is the tax cut. without tax cut s&p earnings up 8% this year. with tax cuts we expect they will be up over 20. that's the wild card. a lot of positive guidance and a lot of good news in the upcoming weeks and we expect the market to respond positively to that. real quick on the tax front and then i want to go to stock picks. when you talk about the tax cuts and do the math, what do you think the tax rate is supposed to be? >> well -- >> toting to 20% you're talking about. >> i would like 15% but i hear paul ryan wants 20, and i guess

they will work that out. something like constellation brands has 31.5% tax rate. so a stock like that is going to make more money with paul ryan or donald trump's plan. >> right now you're talking 15 to 20. there are other people in washington suggesting more at 22, 23, 24%, somewhere between 20 and 25 on the other end of this. how does that change your calculus if it does at all. >> the price. that's the bottom line, we're going to have surprises, mass repatriation and buybacks will continue. the big news for the stock market in the last several years is it's dying, it's shrinking. fewer stocks outstanding, relentless stock buybacks. you just can't have low interest rates and modest price ratios and not expect buybacks. we're going to be hitting on all cylinders in the upcoming months

and the market will melt up. >> one other question that relates, you said the stock market is dying. does the stock market continue to die in the sai same way or accelerate oddly enough if some of these policies go into effect. >> i think "the wall street journal" had a very good article on this last week how we lost over 3,000 stocks outstanding. it was a university of chicago study they were citing. the buybacks are still relentless. every kid that takes finance 101 learns do i finance my business with debt or equity. more companies continue to sell debt to retire their stock. i'm a stock guy and i have a big bond business. it's just just because everybody is selling debt. a lot of debt is going to retire stock. debt repatriation, stock is retired. >> the plan, louis, is for a dramatic change in depreciation, right? being able to depreciate everything immediately that you

invest and no longer be able to deduct interest expense. that would be part of the tax reform plan put forth by paul ryan. that would lead to a dramatic shift in that kind of thinking wouldn't it? >> it might. all boils down to return equity. i run a business and my return equity is 18% and i can still borrow at 3%, i'm going to continue to borrow and retire my stock. if i have money overseas that's burning a hole in my treasury, i might decide to use that to buy stock back. the stock buybacks are going to continue. >> louis, what does it matter for the average investor there are 3,000 fewer stocks than there were 15 or 20 years ago? stock market in the u.s. worth 20 something trillion, s&p 500. seems like there's enough actual equity to go around. >> sure there is, but my average stock is gone in current buyback pace. s&p is gone in 27 years of

current buyback pace. unless ipo market heats up, thematic the market is physically shrinking. >> the idea is fed at 0, don't invest long-term, don't do what normally do. don't invest in equipment, financial engineering like buybacks. the fed is not going to be at 0 much longer. after inflection point and after we turn, shouldn't buybacks start to slow down now as plants do what they used to do. i would think you would be on the other side. we don't have time but that would be the only point i would make. you're right about the last eight years but from here on out, they may actually do what they are supposed to do. >> the wild card is repatriation. we get more repatriation, we get more buyback. >> thank you, louis. thank you for hanging out for the hour without the coat. great to see you. coming up much more market strategy on tap as we approach dow 20,000. don't move. tuers? 'innfwhhi

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the markets creeping ever closer to dow 20,000, coming within fractions of that number. now earnings season is here and investors will be watching those numbers closely. we break down what you can expect and talk trump rally straight ahead. >> hearings on the hill, former cia director and trump adviser james woolsey will be here to talk about the trump transition and designees facing senators this week. that interview coming up. plus inside detroit auto show, what has auto execs buzzing about trump administration. phil lebeau with the latest as

the second hour of "squawk box" begins now. >> live from the beating heart of business, new york city, this is "squawk box." good morning, welcome back to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. take a look at the futures this hour as we try to get closer to 20,000. on the dow it's going to be a little harder this morning but we'll see where things land. dow open down 16 points, s&p 500 open off 2.5 points and nasdaq open up marginally. also the ten-year, looking at 2.394. oil wti crude at this hour is looking at 53.03. >> here is what's making headlines at this hour. less than two weeks to go until president-elect trump is inaugurated and officials from

the federal reserve are making predictions. fed governor jerome powell spoke over the weekend. although he didn't mention incoming president by name, he alluded to his proposals. powell suggesting the u.s. may be moving toward a more balanced policy with more business friendly regulations and possibly more fiscal support. fed president kaplan cautious as he spoke, said too early to know whether it will boost economic growth. and kashkari spoke more specifically about bank plans, wants to force holding more capital to fend off future financial crisis. he revealed he's more optimistic about his plan's chances under donald trump. at the detroit auto show, the automaker has no plans to change where it produces small cars despite criticism from the president-elect last week. trump threatened to slap a border tax on gm for importing

chevy cruise from mexico. decisions made two to four years in advance. iran air ownership of airbus after sanctions lifted on the country last year. the move will ask the company to revamp aging airline deals that also include boeing. although it marks turning point between u.s. and iran. haven't said but will try to undo deals between playmakers and the country of iraq. donald trump, incoming chief of staff of mr. trump says repeal and replacing obama care at the same time would be ideal. but in an interview yesterday reince priebus noted it may take time to get the elements ready. meantime president obama was asked about his opinion on the future of health care. >> is obama care going to survive? >> i think it will.

or it may be called something else. as i said, i don't mind. if, in fact, the republicans make some modifications, some of which i may have been seeking previously, but they wouldn't cooperate because they didn't want to make the system work and relabel it as trump care, i'm fine with that. >> last week house speaker paul ryan said congressional republicans will complete health care legislation this year. >> president obama is going to be delivering a farewell address to the nation tomorrow at chicago's mccormick place. tickets given out over the weekend free of charge. ,000 people waited in line to grand prix one. tickets and on online sites ebay and craigslist going for as much as $5,000 apiece. a few stocks on the move. mcdonald's selling a controlling stake in its china and hong kong operations to the carlyle and

state backed fund. they will keep a 20% stake as it plans to add 1500 stores in the region over the next five years. vertex pharmaceuticals expects full year revenue from cystic fibrosis drug. revenue expected to come in between 1.1 and $1.3 billion. evercore says that appears to be below analyst forecasts. vertex made the announcement ahead of its presentation today at the jpmorgan health care conference. i can't tell whether that's trading or wasn't as unexpected. let me just see. yeah, i can't tell. just looks like it hasn't traded yet. >> first full trading week of the new year and a new chance for dow to cross 20,000 threshold. show you what's going on with futures at this hour. dow lowered 14 points, nasdaq open higher one point, s&p open higher by two points. our guest host barbara reinhart with voya investment management

head of asset allocation and jeff hurst editor and chief farmers almanac. and chief market strategist. great to have you here. jeff, stock traders almanac. what should we think dow 20,000 in terms of historically what it's done when we get these big numbers in front of us. >> it's proven to be a bit of a resistant point right now. historically these numbers don't mean a whole lot. it's a psychological big round number. things like 1,000 and 10,000 gave us quite a long time before we cleared but really insignificant technically except the resistance level that formed this trading around that. >> barbara, can it get a lot more people spot market when they see it. they open this phone and see we finally crossed the milestone. does that get larger public involved in stocks? >> we think it does. psychology can play an important part in individuals as well as broader market kind of sentiment

moving higher. we have seen sentiment get rather bubbled up. it's moving towards i would say less neutral than it has been in the past. i do think the new high you saw in the s&p 500 on friday, in conjunction with the dow moving towards 20,000 is relatively signs of strong technicals. >> here is the thing. when the retail investor gets involved, a lot of people think, wow, that's the beginning of the end. the rally is old. how do you feel about the market right here? is it expensive? is it a bad signal retail investors might be joining? >> we look at two things. we look at data. epfr which tracks mutual fund and etf flows. last year $146 billion that went into bond funds. $93 billion redeed out of equity funds. we haven't seen redemptions that big since 2008. that was the year that you had relative -- >> financial crisis.

>> relatively good year for s&p 500. it's somewhat odd to see that. granted you did see some fund flows into the equity market moving towards the end of the year after the election but it's nowhere near where you would call a major market top. >> got it. donovan, same question to you. how do you feel about the market right here? >> first of all, i feel good about the market. when i talk to big institutions they kind of shrug their shoulders when they look at 30 stock dow which has had weird construction. because it's really heavy industrials and banks and holds virtually no bond proxies, no utilities and reits, it's almost the best proxy out there for how strong this trump rally is going. if you look since election day, the dow has crushed the s&p because all the stuff that really works under a trump presidency is in the dow, and it's really -- if you see this reverse over, this rally falls apart, the dow --

>> why do you say work under trump presidency, why help out industrials. >> financials, a big win. less regulation, financials by far the most overregulated sector. number two wants higher interest rates more than any other. hugely levered to pick up business activity. this quarter trading activity stronger on this news but we saw m and a just popped in the fourth quarter. all this is great for financials. obviously industrials, improving economy, less regulation is a big winner here. then rising interest rates beat up on those stocks which kind of look like a bond. there's none of that in a bond and in s&p. >> inventory restocking. you had five quarters of inventory drawdowns. industrials get the benefit from that, a restocking period as well. >> trump rally rules, 66. 7% chance it continues through the end of april. you've got a number like that.

>> statistical explanation of what's gone on after these types of new presidents come in. what's that? no, out of almanac research department. >> not nate silver. >> no, that's ours. >> not traders almanac.com. >> 98% huff post hillary wins. >> object the market was down. >> it's not a call on trump. it's a call on what's happened historically with elections period. >> new presidents coming in office. >> got it. >> the thing with the trump rally, i think small caps more beneficial, really domestically paced. they listened to industrials an financials. that's an interesting way. >> overbought yet? >> they have certainly had a big move. there are benefits especially through the first quarter. when we go back to early 2016,

when was all the difficulty felt? it was in the first quarter, earnings recession you had, troughed with the first quarter. but you've seen a clear improvement in the manufacturing data. clear improvement in the wage data on the friday employment report. these are not bad things. the great news is they are being met with scepticism. everybody is still concerned and has the psychological issue of, you know, should i chase it or am i waiting for pullback. >> as long as -- >> we do. it's not only among retail investors, institutional allocated to equities. many broad surveys take a look how institutions are allocating assets and they have not been allocating to equities. >> real quick. we talk to the most sophisticated institutional investors, they are concerned about two things. they want specificity before a lot of them are willing to jump in, which means they will be too

late. the second is they are concerned this thing is running too fast, which means they are still reluctant. we're seeing more people who are cautious on this thing, even though they believe in the story. >> a good sign. >> counter-intuitively a good sign. >> thanks very much. see you later. barbara sticking around for the hour. coming up former cia director james woolsey join us to talk about this intel hearing and president-elect trump's briefing, then head to detroit for buzz from automakers, international auto show. plus stocks on the move this morning. names you need to watch at the opening bell. you've got to watch that one. stay tuned. "squawk box" returns in just a moment. 'see 1t stwad, yet ofl po strs ag

welcome back to "squawk box." futures right now are indicated about 18 or so. the s&p indicated down three. they got to within a point, a third of a point. >> .37 i thought. >> which is weird. >> why? >> you figure one stock in the next instant. >> dot-com wrote a story one dow stock only had to move $0.05.

>> extreme. your lips -- >> watched pot. pot debate want to boil. >> you knew exactly what -- >> there are three other people on the show. >> all talking about it. 20,000, 20,000. >> wasn't just me. >> hedge fund manager of citadel making comments about economy and fed and what he expects from the incoming trump administration. he was in chicago where griffin spoke. good morning to you. >> good morning to you. ken griffin, ceo of hedge fund citadel, massive hedge fund citadel. he's not expecting a tax cut this year, at least not a personal one. speaking on a panel at the annual meeting in chicago, griffin spoke to the critical issue of what investors should expect this year and he's not so optimistic. >> i think the hard reality of just how significant our budget deficit is and our accumulated

deficit is will weigh heavily on a republican congress in terms of the contours of the tax plan. so unfortunately we're going to have to get to growth by deregulation, by encouraging incentives, not through trillion dollar infrastructure spend and massive tax cut. >> it does say trump administration from his contacts is very focused on growth. he criticized the fed for staying too low too long. federal governor powell was at his elbow when he did that. worried about overleveraged corporate america, unfunded pension and banks overregulated. the power for his part, he seemed to welcome the coming stimulus from washington. >> we may be moving to a more balanced policy mix where we have what sounds like more business friendly regulation and possibly more fiscal support and monetary policy able to hand it off. i think that's a healthier thing. >> one of the most positive

comments a federal official made about the administration. back with outspoken remarks about goldman sachs and powell's surprising comments about the boca rule. >> that's a good tease. >> i want to hear it right now. >> if you want me to -- >> he likes it but doesn't like it. >> don't say. he's going to do it at 8:30. >> whatever you want me to do. joe? >> glad you're okay. you were in chicago? >> i was. why wouldn't i be okay? >> a lot going in in chicago. >> a lot of economists there. >> very dangerous. economizing. >> a car backfire and you jump under your desk. >> well, i was in a nice part. coming up president-elect trump's plan to overhaul intelligence community. former cia director james woolsey here we'll ask him about that and more. the buzz at the international auto show taking place this week. "squawk box" will be right back.

welcome back to "squawk

box." jimmy fallon welcoming to golden globes one of the few places left where america honors popular vote. won all seven "la la land," best picture, meryl streep accepting cecil d. mill. steve jobs umbrella veiled first iphone to the public at the macroconvention. four models went on sale that june with lines all the way around the block. apple sold more than 1 billion iphones over the past decades. check out apple stock over the past 10 years, up nearly 800%. >> do you know how many gigabytes are in your iphone now? >> no. >> no idea. >> 64, some have 128. >> more. >> it's amazing.

>> more than those huge rooms of processors that used to exist at places like mit. >> they carry it around, only more powerful. >> amazing. coming up, former cia director james woolsey stepping aside as adviser to president-elect trump. hear about intelligence hearings slated later this week. that interview after a quick break. take a look, u.s. equity futures this hour, dow open lower by 21 points. "squawk box" would be right back. itrog fsyst

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>> more markets with guess host barbara reinhart from voya. we were talking on the break, not surprising to see consolidation, a little selling, as we head into the inauguration. why? >> because i think it was such a surprise to see that president-elect trump won, you know. nobody thought that was going to be the case. it was a major upside surprise.

and his policies clearly are very pro growth. the markets have moved very heavily in advance of that. it wouldn't be surprising to see maybe some chopping and churning between now and, say, inauguration day. but what we think is going to be able to carry the day after that is going to be a very good first quarter earnings numbers. also you've had a decisive move higher in manufacturing and service indexes. that does port end u.s. growth but global growth. >> you're head of asset allocation. >> yes. >> should i own any bonds at this point or no? >> we don't want to throw bonds out with the proverbial baby with the bath water. the reason is bonds can be very helpful during consolidation periods and also big hiccup events. so for example if the brexit negotiations end up being far more vociferous and far more

trying on the markets, bonds can end up being a very good safe haven. additionally bonds also can help you generate some income in a portfolio, which is very helpful in terms of how we're thinking about it. i'm head of asset allocation and head of asset allocation for two main types of businesses. our retirement businesses which is targeted funds and also 529 plans. so voya looking to help investors and clients think about their retirement and plan for big life events like paying for college. you cannot abandon bonds in that type of environment. while we may be at secular turning point where bonds hit low, there are opportunities and bonds come in lots of different flavors. opportunities in senior loans, which is where we see a lot of opportunity to grab yields but not have the same type of duration risk. but to abandon them recklessly is full hardy. abandoning them in 2008 was a

full hardy thing to do. >> barbara with us the full hour. headlines this hour, fiat chrysler investing $2 billion to retool two plants one in michigan and one in ohio. the company says the move is creating more than 2,000 jobs. it also plans to add three new jeep models to its product lineup and make them in the u.s. all this coming on the back of what's going on with gm and ford in mexico. whether this was all planned or not involving the trump administration. separately a young china relaunching taco bell brand in the country after a decade long absence, opening the first door in shanghai. that's happening today. first initiative since young china was spun off by its u.s. parent company. getting 3% of yum china's revenue as a licensing fee. >> are you going to shanghai now that they have a taco bell. >> writes the one here, the nasdaq. >> we're teasing you. that was a joke. >> one of those trucks. >> out front just for you.

>> there is a -- >> different taco. >> different taco stand out there you should check out. >> you tried the tacos. >> years ago, yes. >> years ago. the same one? >> i believe they are still there. >> would you eat a taco at 9:00 in the morning. >> i would. >> you would. >> why? we've been up since 3:00. >> i hear one bite and you have to take a second. >> jack in the box. it's vile and wonderful. >> it is. they are selling as many tacos as mcdonald's did just about 10 years ago. >> 2007. >> got to be tasttasty. i haven't had one but got to be tasty. >> wet envelope filled with cat food. >> you want to change your perspective, ride to work in a jeep with no doors and no roof. you will definitely be in a good mood when you get to the office no matter what time you get in. i did it in florida on vacation. >> in florida. >> do it in july. >> what just happened?

>> we were talking about jeeps. >> jeeps. >> going back to the other story. >> jeeps. >> the jeep without the door. i didn't understand what's happening. >> in your jeep. >> that's a nice segue to talk about the average gas prices, because they jumped $0.12 over past three weeks to $2.38 a gallon, $0.33 higher than a year ago. analysts say gasoline caught up with the climb that started in november. donald trump will be sworn in as president on january 20th. now just 11 days away. among the changes at this inauguration, the announcer will be different. 89-year-old charles brotman has been the voice of every inauguration parade since dwight eisenhower in 1957. trump team is replacing him with steve gray, washington-based freelance announcer who has worked with washington nationals. the trump committee says he'll be honored as announcer chairman emeritus. >> it's a week of big hearings in washington.

senators will be grilling jeff sessions tomorrow. on wednesday rex tillerson will be in front of the senate foreign relations committee. ammon jabbers joins us with more. 86 likes. want to call you ammon -- >> i walk out, like a monk, speechless. i ge to the camera. introduced me at eamon f'ing javers. i almost burst out laughing on air instead of giving jobs numbers but i managed to bumble through it. >> everything sounds cooler, warrants a high-five. >> tv high-five. >> a couple of followers said they went to court and legally changed their name to f'ing.

>> it's interesting. i have fanatical followers. >> i've done that to bernstein, too. i think it will become a viable middle name. something like seven or soda. >> almost went viral on friday. almost. several people retweeted. >> tens of dozens. >> exactly. >> let me tell you about what's happening this week. it is going to be an absolutely huge week for incoming donald trump team. take a look at this graphic we prepared listing all of the confirmation hearings we're going to see this week. it just about everybody in the trump administration is going to be on capitol hill starting on january 10th. attorney general sessions nominee for attorney general will have his confirmation hearing up on capitol hill. also on tuesday january 10th, we've got barack obama's fairwell speech at 9:00 p.m. in chicago. that will get a lot of headlines as well. on wednesday, the 11th, we're going to see rex tillerson for

state department sessions day two michael pompeo cia, elaine khao, transportation, kelly homeland security. what else is happening? donald trump's news conference somewhere in midtown manhattan expected that day as well. they are flooding the zone in terms of news republicans are. january 12th, thursday, wilbur ross for commerce secretary, tillerson for day two we're expecting, defense secretary nominee mattis, ben carson for hud. labor secretary also will be up there on thursday. so a big week of hearings packed clearly the strategy by the trump team is to flood the zone, put all those nominees up there all at once. try to make sure that any one thing the democrats find on any of these guys doesn't have the opportunity to dominate the news cycle. they are sort of guaranteeing that by having a donald trump news conference on the same day as the bulk of those hearings. so you can expect trump will make a lot of news.

that will be followed very intently around the world. that may sort of drown out those confirmation hearings that in another news cycle would dominate the day. so a savvy move by the republicans as they gear up for that trump inaugural on the 20th, guys. >> almost. eamon javers. it would have been so easy to say it again but you don't want to overdo. >> you were coming a long time but doing the jobs number. >> right. >> normally hampton or something. that was big. that was big and we were waiting for it. >> finally made it, eamon. >> every now and then they let me do the big news. i hang around the office, wait for my chance. on friday i got it. >> we had another moment. >> i seized the moment. i was like eminem, i seized the moment. >> remember your faux hawk? like a cone head. >> the problem is i only have a certain amount of hair, joe. when you come down fifth avenue

the wind this side, my part that way and the hair goes straight up. i felt like it looked a lot like david beckham. other people might not have felt that. >> cameraman and handlers didn't say anything. they were all saying, eamon, you look great. eamon f'ing javers. auto execs take over detroit for north american international auto show. the buzz this week will surely be about president-elect trump and some of his comments and production in mexico. we'll get an update straight ahead. as we head to break, check out futures right now. going the wrong way if you want 20,000. 20,000, 20,000, 20,000. "squawk box" live from nasdaq market site. we'll be right back. it sh eseeea tro. , 'gi it sh eseeea tro. o ofi fiy u owm m l

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welcome back to "squawk box." urban outfitters out with holiday sales number will sales increased by 3% compared to the same period back in 2015. the stock, though, falling sharply on that news on greater expectations. you're looking at the stock down

about 11%. welcome back to "squawk box." north america international auto show kicking off in detroit. phil lebeau talking to auto execs. the big buzz on the floor, of course, mexico. vis-a-vis donald trump. phil. >> michelle, donald trump's presence is felt here at the detroit auto show. really three themes we're hearing from executives walking around the floor talking to them. first off autonomous drive cars. if you thought this was something that would be pushed to the back burner under the trump add manage, the industry is moving full bore ahead because of the technology involved. we'll talk about that. then there is the trump impact. you hear executives talking about where manufacturing are taking place and the fact they are making job investments in the united states. for example, news of fiat chrysler. it's investing a billion dollars, adding 2,000 jobs as it

expands production at two plants, one in michigan, one in ohio. they are adding a pickup truck to the jeep lineup as well as drink-of- bringing back wagoneer and grand wagoneer. keep in mind fiat chrysler is one of the biggest importers of vehicles made in mexico as well as vehicles made in canada importing almost 400,000 from mexico in 2016. with regard to autonomous drive vehicles, waymo announced out with autonomous-drive cars. the google project, renamed waymo. the ceo of waymo, for the last year when he's been running this company he's saying i'm not doing any interviews. guys, he's giving an exclusive to us on "squawk box" coming up next hour. we're going to talk about bringing down cost of autonomous drive vehicles. and waymo's believe it can take technology and make it available to millions of people not only in the united states but around

the world. they believe they are making advancements. we'll talk about that. some really cool comments yesterday from john here at the auto show in detroit. make no mistake, donald trump's presence, you can feel it here. >> i'm excited about the interview, phil. i love self-driving cars. >> it will be good. >> thanks. meantime president-elect trump calling for overhaul cia briefed by current chiefs friday in new york on russian hacking situation. for more on that and a lot more, james woolsey, former cia director under bill clinton, advised president-elect trump on intelligence matters during the campaign and during the transition, just until recently. we welcome him to the show. good morning to you, director woolsey. >> good to be with you. >> let's get it out of the way. i know you've talked about it before but you haven't to our audience. you have stepped away from the trump team at the moment for what reason? >> well, i simply noticed

publicly that i had. what happened was i volunteered in early september to help with the campaign, and i did a bit. then when we got into the transition, i wasn't being asked to do anything, and i felt you uncomfortable each time i'm on television or otherwise that shows i was an adviser to trump and i wasn't functioning as an adviser to trump, so i thought i ought to change that designation. that's all. >> are you comfortable or up comfortable with the views trump has espoused regarding what some intelligence officers or intelligence community has talked about regarding elections involvement. >> i think he's going through an evolution. different ones of us are in different ways. i have been familiar with russian disinformation, otherwise known as lying about such political matters. they have gone after their

neighbors in eastern europe and other countries for years, decades. but what's new is that they have added cyber to their tools of attack, essentially, and distorting elections, trying to. that is something that a lot of people aren't familiar with. i think it's understandable that donald trump was highly skeptical about it at first and seems to be developing and learning and that's what you want in a president, to be able to have a look at something and say, wait, i think maybe i want to go this way. now i've got new facts. >> let me ask you this. this is donald trump on twitter last week. having a good relationship with russia is a good thing not a bad thing. only stupid people or fools would think it's bad. we have enough problems around the world without another one. when i am president russia will respect us far more than they do now and both countries will perhaps work together to solve

some of the many great and pressing issues of the world. do you agree with that? >> could be. depends on the russians. i've negotiated with them on four treaties, three nuclear and one conventional weapons treaty for a number of years. and in three of those negotiations, things were on the whole tense, formal, not relaxed at all. on one of the four, things were very easy going, got to know my russian counterpart reasonably well. we worked a very complex treaty very quickly. it depends. it depends on the russians. sometimes russians behave the way they did in my negotiations on conventional forces and sometimes they behave the way they did on the nuclear -- >> i think the spirit of your question, andrew, and correct me if i'm wrong, should he be posting that kind of opinion about russia and putin on twitter at this point? >> i think that's up to him.

i don't think it's a major coup or disaster either way. he is still a private citizen. he can comment either way on international affairs. >> do you think that changes in two weeks? >> sure. it changes a lot in two weeks. but still i don't consider what he said as something particularly damaging. >> help us understand this in terms of our own national security and the hearings we're going to be having on some of these nominees. this is a story in the "washington post." i want to know would you be concerned or not. mattis clark with trump transition team over pentagon staffing story published late last week, goes into some detail about some infighting between trump transition team and mattis over who is going to be on mattis's team and what kind of control he should have in terms of appointing and hiring them. >> well, i have the highest regard for james mattis. but i've got to say that i think

that this situation of cabinet member disagreeing with the white house staff about who might go into what job is at least as old as the republic. >> never been done before. never been done before, i think. >> right. come on. i imagine hamilton and madison were haggling about this in 1790. >> rapping about it. >> sir, michelle here. the report that was put out, declassified report, 25 pages. i read it. if you were looking for a reason not to be -- to try to have more confidence in intelligence organizations, i didn't see a lot of information in there that really was definitive in any way. there was a big examination of rt that used to be russian television, as far as i can tell can only see when i happen to be in europe. can you give us any hint of what more there could have been? were you satisfied with the level of disclosure that was in

the report? >> those of us who have been in the intelligence business have a different take on this than normal people, which is that the less disclosure the better, because it's almost always going to reveal some aspect of sources and methods which you don't want to reveal because it undercuts your ability to steal secrets the next time. michelle, if you know about it, then the russians are going to know about it, and they may say, i didn't know the americans knew about this. have to change that next time we try to outwit them. so completeness in reports from the intelligence community for public information is not an unbridled good. it is right at the edge of something you've got to be very, very careful about. >> i totally understand that position. but at the same time if you're making a big deal how to release something, how to explain to the public, it ends up being

self-defeating. >> this was a reasonably detailed report reporting on that sensitive a subject. that 25 pages was, i thought, well done and made several points very well. it was walking the borderline trying not to reveal sources and methods and i think they probably succeeded. >> can i just go back to twitter for a second. you talked about him being a private citizen and feeling okay about it. i want to know, do you think he should stop tweeting once he's the president and doesn't represent a national security risk to the extent he does. >> i think it's very hard. let me put it this way. he used twitter extremely effectively in the campaign. a lot of people told him he was crazy, shouldn't do it, shouldn't try it, and it worked for him superbly. campaigning with twitter is now in the lexicon of what people are going to do in the future i

rather imagine. governing in 140 character transmissions is a lot harder. there could be some circumstances in which twitter would be quite usefully exploited as a president. but i think one needs to look at it with fresh eyes and look at it differently than when one is looking at it as a campaign device. >> another question around logistics of it. there's conversation what the procedure should be to the extent he does tweet what kind of security there should be around his own twitter account given that if he were to tweet something that was hacked and nobody knew it, we've seen what happens when the market can move and when the world changes literally in a split second when he tweets. >> james madison was the genius who was chiefly responsible for

pulling our constitution together. it has survived a lot of struggles, a civil war over those 200 plus years. on the whole we've done very well. but we haven't had to figure out how to deal with twitter yet as part of our constitutional checks and balances. this is a whole new ball game and it's going to take creativity to manage it successfully. we'll hope he's double authenticated. meantime, director woolsey, thanks for joining us this morning. >> good to be with you. >> great to see you. when we return stocks to watch and market thoughts from our guest host. ceo biomarin join us with an update on gene therapy treatment for hemophilia. "squawk box" will return in just a moment. with the xfinity tv app,

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you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. let's take a look at stocks watch. goldman sachs downgrading coca-cola to sell. say again, to sell. price target cut to 39 from 41. meantime goldman upgrading dr. pepper snapple to neutral from sell. price 93 from 85. that's well above where goldman

thought dr. pepper shares would be trading. goldman sachs downgrading procter & gamble to a sell, neutral. home and personal care group as a whole there cautious to neutral. sell on dow component. shares of exact sciences rising this morning. the company announcing preliminary fourth quarter results including revenue top consensus. >> the big diet fad is now, anti-sugar. oh, my god, everywhere you go. >> big book about sugar. >> big book. >> w.h.o. did a study on sugar two years ago. it leaked in and now everyone is anti-sugar. >> does that make you worry about stocks that have sugar in them quite literally. >> it's difficult to have stocks with exposure to sugar because they have a number of businesses. if you think about coca-cola, they have das antti, a ton of

other things. >> precisely for this reason. >> soft drinks may come under some very specific pressure. >> salt and fat is back. >> fat is back big-time. >> my question, though, is this a fad? sugar for some reason seems differ. it may be different on sugar. >> sugar has to do with weight gain, cognitive abilities. it's very far reaching. the study that was done was very far reaching and could really affect sectors. will feel the pressure of the rising dollar. they tend to underperform when the dollar strengthens. that's what's going to hit the consumer sector, staples. >> i'll sell you a contract. >> i'm not saying -- >> the whole idea of it being -- >> go along with the idea -- >> pro big short. >> pro -- >> no, pro sugar. >> another cascade. coming up when we return,

thank you for that. >> thank you. >> she's leaving us. >> the road to dow 20,000 if we get there, trifecta market strategist after the break. google self-driving advance will soon hit the road. we're going to hear from ceo of google spinoff waymo about the future of autonomous cars and jpmorgan health care conference to hear news from ceo biomarin. back in a moment.

the dow's trek to 20,000, stops short of historical milestone. will it roll on. talking strategy. a major health care conference kicking off today. biomarin ceo talks about pharma deals and innovation in tech area. self-driving minivan hits the fast lane. we'll go behind the wheel chief ceo of waymo as final hour begins right now. ♪ ♪ >> announcer: live from the most powerful city in the world, new york. this is "squawk box." good morning and welcome back to "squawk box" on cnbc.

live from nasdaq market site right in the middle of times square. i'm joe kernen with andrew ross sorkin and michelle caruso-cabrera. i don't think elmo has made it. >> too cold. >> i would think it would be pretty warm in that suit. >> i see. >> treasury yield -- >> it was 1 degree when i went out this morning. 1 degree not 2 or 3 but 1. treasury yields, to 39. >> nothing in a straight line. oil prices. used to be equity prices all they did was crack, stuck at 55 for a while. >> let's get you to headlines this morning. fiat chrysler investing $2 billion to retool plants, one in michigan and one in ohio.

the company says the move will create 2,000 jobs. gm ceo mary barra says automaker has no plans to change where they manufacture cars. in spite of threats about border tax. part of a group that advise on economic issues and looks forward to part of the solution to strengthen manufacturing and businesses. fbi arrested volkswagen executive on fraud charges. oliver smith headed compliance office until march 2015. "new york times" reporting he's expected to be in court in detroit today. >> breaking news this morning. mars is buying vca, inc. for $93 a share. vca, inc. has a ticker woof. >> animal health care company, animal hospital segments. >> probably including dogs.

>> digital radiography and ultrasound imaging for animals. >> dogs since the symbol is woof. >> i get it. >> $9.1 billion, $1.4 billion in debt. >> that's why. >> it's a big deal. >> what's the share for 90? >> 31% premium. >> january 6th. >> market cap $5.7 billion. >> $5.7 billion. add the debt and premium and it is pretty big -- don't want any dog food in mars bars. >> i don't think they are going to put dog food in mars bars. >> see the synergy even though we have all kinds of treats for dogs. >> they aren't going to put sugar in the treats for dogs. >> anbang in deal talks with donald trump's son-in-law jared kushner.

investing to reinvest flagship building owned by kushner companies. kushner married to ivanka trump in consideration for senior white house role according to "new york times." kushner studying with lawyers how he would have to divest and distance himself from the family business if he were to take a position in the incoming administration. things are heating up between president-elect trump in china. a state-run paper is issuing a warning to trump threatening that china would, in its words, take revenge. take revenge if he tries to reverse one policy challenge, hours after met with taiwan met with u.s. senator cruz, greg abbott. chevy ted cruz or chevy ted cruz. we've been talking about the cruz a lot. had asked washington not to allow taiwan's president to enter u.s. saying she should not have any formal government meetings under the one china

policy. in other political news, lawmakers passed right to work legislation, governor bevin signed it into law. work in union represented shops and get union negotiated benefits without paying dues to the union. kentucky became the 27th u.s. state to enact such a law, had been unable to pass right to work laws in the pass because of strong union ties across the state. a few stocks on the move. urban outfitters reporting holiday sales up 3% compared to 2015. the stock falling sharply off 11% in premarket trading. obviously that was a disappointme disappointment. exact sciences, 18.5% in the premarket. french drugmaker ipsen, assets from merrimack pharmaceuticals up to $1 billion. includes treatment for cancer.

plans to return $200 million to shareholders through a special dividend. that stock is higher. it's only $5 stock. gain of $1.40 is 38, almost 39% in the free market. vertex pharmaceuticals full revenue from cystic fibrosis drug, $1.1 and $1.3 billion. that as to be below expectations. vertex made the announcement ahead of its presentation today at the jpmorgan health care conference. we didn't see trading in extended hours. live at the conference all day, bringing interviews with a host of top executives from the sector. >> dow came within a hair of 20,000. tom lee managing partner at global advisers. also brian bellsky. sam, cfra, chief investment strategist.

the reason i bring that up, need midwest -- you speak minnesota. >> oh yeah. 1 degree this morning? that's like balmy. >> i worked over here with just my shell coat on. >> elmo doesn't need a coat. so your latest s&p target, you finally raised it to 22.50? what was it? >> 2250, 2350 next year. >> what about the end of next year? >> it's going to be -- i think the problem with the market now in terms of targets, we had such a strong fourth quarter, joe. we robbed peter to pay paul as far as performance in 2017. but the problem i have with this near-term calls on the market trying to call for a correction, corrections happen when we least expect them, number one. number two, everybody calling for a correction right now. we were in san francisco seeing clients, everybody scared about the market. >> where were you, watching

earlier when i said that was the consensus. you were coming in listening? watching in agreement. >> we get here early. >> you get here early. so you agree with my take earlier that every person that we have come in here says -- >> some anecdotal evidence, meetings in san francisco, everybody looking for a correction, every single person. what's interesting was health care only negative performance sector last year in the s&p 500. last week one of the best performing sectors. so i think health care from our perspective, we've been overweight. we think that will be the surprise sectors. everyone worried financials gone too far too fast. everyone counting on tax cuts driving growth going forward. we think the fundamental driver is less regulation across the board, 15 year bull market compliance with respect to financial services is over. i believe the fcc, s.e.c., fda and epa are all going to benefit from less compliance side of things. when we start to see tax cuts

come out, i think people are actually going to be a little worried about that. i think the correction comes later not right now. >> we're having waymo on later. is bemo. are they a subsidiary? >> no self-driving. >> waymo before bemo, quiet after. >> no, we're just bemo. >> i'm worried. what are those tags on your sleeves? >> yeah, like minnie pearl. don't look, joe. >> new blazer. >> i'm going to be on "squawk box," i'm going to get new clothes. have you got a new suit on. >> this is in color. i'm turning red. >> it's charming, charming, joe. >> kmart. >> thank you for inviting me to this jam session, joe, andrew and michelle. >> wow, too far too fast. >> i like that.

>> too far too fast. >> too far too fast, i'm getting a little concerned, let me tell you why. every millennial mark since 10,000 on the dow, we have typically seen the dow advance about 4% and usually then hit a 5% decline without two and a half months later. only twice before have we hit two millennial marks without divesting those gains and they were just before the tech bubble burst and just before the financial crisis. no guarantee that's going to be happening this time but i think we need to reset the dials. >> so you're the same guy we were talking about. okay. all right. go. i didn't know if you heard. >> i didn't know. more breaking deal news. meg joins us from jpmorgan. >> meg terrell. >> hi, guys.

we do have breaking news deal news this morning. this is a conference for deal making, japanese drugmaker buying for $24 a share, 75% premium from where it closed last year, enterprise value of $5 billion. it has been in the news. it makes leukemia drugs, also developing a lung cancer drug. this is a hot area where companies are looking to acquire companies. people will be very happy with this news this morning. we understand it's halted right now expected to open 8:30 eastern. stay tune for news and interviews, including this hour byron ceo. speculation it might be taken out and now it has been. back to you. >> i know all these guys. david baltimore and phil sharp's company when they were on the fifth floor, mit and center for cancer research. both nobel laureates by the way.

they were involved in one of the founders of ariad. 20 years ago and now it's going. >> more than 20 years. yeah, it's been around a long time. people wondered when it would be acquired because it has some very high value assets in cancer drugs. >> all right. >> do you dare me to say why would a company want them? >> she just did. >> too far too fast. he says further to go. what do you think? >> i mean, i do think in general timing is important for clients, right? you know, they -- >> what if you think that, tom, and then you're out in november and you miss these two months. you're in there for the last 24 months and miss the last two months, stay long all the time. >> i think long-term investors should never worry about entry

points. but for the last seven years most clients have been sort of in cash. so we can expect investors to allocate into equities. is the first half of this year a great time to be buying stocks? i think you'll get a better entry point. so i guess i'm consensus. >> they are together here. >> right. >> 88% of all years since world war ii have experienced the year-to-date decline there by basically nine out of every ten years you've got an better entry point some point down the road. >> in the year. >> in the year. >> i think the bond market is giving us a lot more confusion than what we're hearing from equity investors. the yield curve has flattened a lot. that's usually pretty foreboding. the yield curve is the flattest it's been since '09. the change, two-month change, is one of the steepest. it's top change. if you look at the last four

years, how does the stock market perform when you have that, it's decline. >> when we show that board and say the ten-year is below 24, what's that about, you think it's about something not good. >> we look at the 10, 30, least manipulated by the fed. i think it's signaling confusion about inflation. if inflation is picking up and fed tightening, you k fed should be steepening. it's actually flattening, which means the bond market is confused. >> you want to take that on? >> sure. >> i think the problem with institutional research is that so much of our research is driven through hedge funds. as you know, hedge funds have dramatically underperformed the market since 2009 because they try to time the market and then they are wrong. last year fool me shame on you, twice, shame on me. fool me once january contagion in energy and brexit, everybody missed brexit. no way they were going to miss the trump rally. everyone jumped on the train.

now hedge funds were nervous, trying to book gains. the longer term investor has not been inequities for all intents and purposes since 2001. we've seen a massive rotation into private equity bonds, other things. so we're going to make stocks great again and believe inequities inequities u.s. stocks, north american stocks overall. >> that's an interesting statistical point you bring up, sam. year-to-date we're positive. historically there's always been, you know, a very large percentage of the time, there is a point where the averages are negative year-to-date early on. so statistically there's an entry point. >> absolutely. >> to expand on that and yes, joe, talking off the cuff, basically is that the spread between the low and the high of every year has averaged 27%. so if you just say i'm going to buy, hold, and close my eyes,

that's not bad for a long-term investor. but if you're trying to be more of an active investor, you're looking at better opportunities to add to holdings. not necessarily trying to time the market. we're 65% exposed to global equities. we're not saying you want to be selling equities. we're simply saying you can probably end up -- >> so many times a 3 or 4% break and thinking, wow, wait until 10. all of a sudden -- >> historically we've had 56 times the market has fallen by 5 to 10%. we got back to break even in two months. so it's to your point we've had 21 times we've fallen by 10 to 20% and gotten back in four months. you're better off doing what i call 7% solution. you add money at every 7% decline threshold and basically you'd end up looking like a terrific market timer. >> it's hard when the mark is going down, you think it's going to be down further. >> force your self to put money to work at those thresholds. >> i think minnesota, common

sense, midwest. learn from bemo. >> good. thank you. >> thanks, guys. >> you had a way -- is that why you did that? >> that's why i said it. >> thank you for embarrassing. >> when we return, hitting the road google's waymo a fleet of self-driving minivans. live from detroit auto show right after the break. plus we'll talk about what it's going to take to push the dow to 20,000. ask "squawk" market master mohamed el-erian in just a moment. ♪otr ni ne00e.at io 35izh d ed ache c

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welcome back to "squawk box." north american international auto show under way in detroit. we want to get over to phil lebeau who has an exclusive interview for us. phil. >> thank you. i want to bring you john krafcik, ceo of waymo. you talked yesterday in an

important speech about how far waymo has come and how quickly we're seeing autonomous drive come together. put it in layman's term. how fast has it gone? >> waymo stands for a way forward in mobility. we've been working on this. before waymo we were self-driving car project. we have since the start of that project put 2.5 million autonomous miles on our cars which is pretty good. over the last 12 months along we have driven 12 million miles in simulation. we're getting better and better. we've been developing our own software, developing our own hardware, 360 degree sensors, radar, vision systems. when you put all these things together, we are getting to the point where we're quite confident we can put these vehicles on the road in the near future. >> test drives california, arizona later this month of the

how far in the future is it that somebody living in phoenix or northern california will be in one of these vehicles. even though it's still a test vehicle, it will no longer be engineers, it will be mom and pop who want to see what it's like to be in a self-driving car? >> the thing is, we've done it already. in 2015, a friend of our project, we put steve mann, a blind fellow, he ran through the streets of austin in a car without a human, steering wheel or brake pedal. we've done that already. the question we're working hard on is bringing that to millions going forward. >> john has a question back in the study quo. >> i don't know if you can see this on the screen. we're seeing images of your vehicle with all sorts of images on it, much more so than what you see on tesla vehicles which have autoautopilot, which i kno not the same as what you're doing. how do you look at what tesla is doing relative to what you're

doing? >> the key thing you see on our vehicle is a lot of sensors. that's something we're very proud of. we've got three types of sensing. we think that is important and essential for the task of full autonomy. 360 degrees worth of lidor, 360 degrees of radar coverage of our own design and remarkable sensing suite of vision system with a whole lot of camera sensors that give the car a full 360 degree view. we do think that level of sensing is required to do a good joba safe job, a reliable job at true l 4 you a to be my. >> how much smaller ultimately do those sensors have to become, meaning will they so fully be built into the vehicle you don't even see them? >> i think that's a great question. it's a question we get a lot. we think in the future people are going to appreciate the ability to see when looking at a car that has self-driving

capability. one of the things we're pretty focused on at waymo is ensuring the safety of those cars. there's no question with that characteristic dome where we put a lot of our sensing equipment in our cars, that's a great place to have a great view of the view down the road and all the obstacles the car might see. so we think the future of self-driving cars you're going to see a lot more of those bumps and bulges. those will be good indications to consumers that's a self-driving kara car i can trust. >> those sensors becoming smaller you're bringing down the cost. it's down 90% from where it was a year, year and a half ago. >> we've worked really hard on the safety of these sensors. one of the things we're learned doing that lidar and radar and vision design work on our own, we understand the systems well, which means we can more tightly integrate with our software team, also means we can take cost out. that's going to make service accessible to millions. >> have you hit the tipping point, $1 ,000 for lidar.

have we hit the tipping point where people say, yeah, i want that in my car, or does it need to come down substantially from there. >> right now we're halfway there. we've taken design cost out but not mass scaling so we've got opportunities to make more cost out. we're quite confident we can get this to a point where it's accessible to many. >> the big question, as always, when do we see these in vehicles we might buy at a dealership or get to a ride service. >> sooner than you might think. >> you're going to tease me at the end. john krafcik, waymo ceo, at the detroit auto show. >> i'm excited about that. a self-driving car. >> i want a car that just does it. i do. i really, really do. >> so do i. >> can't stand interacting with some other guy at all in the morning.

>> no. it's just you're going to be so much more productive. >> think about when someone hacks it and you're like this and it's accelerating into a bridge abutment. that would be a problem. >> when we return, uber unveiling a new service -- >> hacking. >> access to its traffic data. that story next. later we're going to talk to former ceo of petsmart about mars $7.7 billion acquisition. stay tuned. we'll be right back. eos str bena

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♪ ♪ >> good morning and welcome back to "squawk box" on cnbc live from nasdaq market site right in the middle of times square. the futures have been weak for most of the session, now down 30. they have gotten even weaker than they had been. i don't know if p&g is down. that downgraded. that can hurt the dow, downgraded by goldman sachs all the way to a sell at procter & gamble. as a matter of fact, that stock is down a little bit, about $1. part of that loss there that's gotten worse might be from the call. oil prices right in between 50 and 55. almost right at the center. almost 53.

$52.90. >> all right. deal news in pet space. mars is buying veterinarian company vca, inc. $93 a share. joining us on the "squawk" line ceo of petsmart. what do you think of this deal? >> hi, michelle. it's an exciting deal for mars. if you look at some of the vet assets they already have, i think adding vca continues to give them bulk in the space which also helps their food brand. >> i was surprised when i saw a candy company buying a business that deals with dogs and cats and hospitals. but mars already has this line of business, right? this is an expansion of what they do. they have already got this within them. there's more synergies here than i originally thought. >> you're exactly right. mars has a worldwide pet business, predominantly in food. they have got a broad spectrum of food brand including some of

the most natural organic brands out there. as well as from a vet's side, banfield located in probably 900 plus petsmart stores at this point. so this is a nice add-on acquisition, particularly now with vets outside of petsmart stores. >> vca want to let the audience know, no longer halted, stock up 27%. some of these hospitals, dog pet hospitals were in pet smarts already. you were just talking about that, you're going to expand that now. >> my suspicion, i don't know but vca operates stand alone hospitals outside of pet smarts. prior to this, they continue to have an investment and own banfield, which is today probably in 900 plus petsmart stores. this is a continuing growth strategy moving out of pet smarts but this gives them the

platform to really grow outside of the stores as well. >> what's the average growth? i'll tell you what i'm asking mario talked about pets about 15, 20 years ago and how bullish he was. i had no idea how right he was going to be. prices -- the margins in pet stores must be huge, the stuff i pay for crazy stuff, for crazy stuff. >> hey, listen, yeah. you're absolutely right. margins are good. what you've seen in pet that continued unabated is the trend around continued humanization as pets. more and more people are treating their pets like family. when they do that, they are willing to give them the very best food. they are taking human trends and bringing them into the pet world. that's what manufacturers and retailers have done as well as from service providers, when your pet is sick, you'll take them to the vet more and more and spend whatever they need to

keep them happy and healthy. >> $530 dollars for a couple of blood tests to find out why they are down a little bit in weight, even though she's eating the same amount. then like an elk antler, a little bitty elk antler, a bone that lasts, $60 for an elk antler. i would never have believed any of this stuff. there's always people in front of me in line when i'm buying this stuff. it's insane. >> you know what, joe, you're a pet parent. you're family is a pet parent. you're treating your pet like family and customers will spend for that. again, they are treating them just like a member of the household. >> we were worried. people were asking me, what did they say? what are the tests? i'm getting e-mails. you're right. it's just like family. especially german shepherds. >> absolutely. >> thanks, david. >> okay. thanks very much. >> okay. coming up, when we return, the dollar dilemma, mohamed el-erian

said the market should be worried about strong green back. plus ceo bienaime here. to

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welcome back to "squawk box." should goldman sachs be a bank? should congress kill rules, weighing in on those questions economic reporter steve liesman hanging out in the windy city with that story. >> who would have thought such excitement? i thought. that's why i was there. fed governor jay powell making outspoken remarks on controversial volcker rule. it keeps banks from proprietary trading. >> we don't want largest snugs to be seriously engaged in proprietary trading as a line of business. we do want them to hedge their positions and be able to create markets. so the question is does the volcker rule, as it's been

enacted by congress in a 15-page statute and promulgated in 300 page regulation, does it do that efficiently? the answer is really in my view, no. >> that's a big deal, guys. he just said he doesn't think the volcker rule does the job but he wants congress essentially to repeal it. it's just one of the dodd/frank regulatory reform bill sure to be reviewed and replaced by republican congress. meanwhile on the same panel billionaire hedge fund manager bill griffin said one solution would be to keep invest men banks from being regulated or being banks at all. he mentioned specifically goldman sachs which was turned into a bank as an emergency measure during financial crisis. for the life of me, i still don't understand why goldman sachs is a bank. i mean, i understand hawaii they might want government subsidies being a bank but for the life of me i don't understand why u.s. taxpayer stands behind goldman

sachs. >> brought into the safety of the banking system during the crisis, should they be allowed to leave. given asked anyone in the audience if they had a deposit account at goldman, no one raised their hand. do you have an opinion on this? >> no, they are trying to get into the banking business, they are in the loan business online. can as, a, a good appoint, b, he's competing to some diagnosis against goldman sachs. >> the subsidy to some extent is ostensibly lower cost of capital. >> right. >> then we have this whole volcker rule designed to keep likes of goldman from doing stuff. should we get rid of goldman being a bank and have the volcker rule. >> interesting question. >> we're going to be talking a lot about this stuff. people got to get up on the lingo of this stuff because congress will take this on. >> meantime, thank you, steve, for that. stick around.

let's bring in mohamed el-erian, chief economic adviser. good morning, mohamed. >> good morning. >> before we weigh in on mark do you want to weigh in, did you hear the conversation about goldman sachs as a bank or not? >> i did. speaks of the issue of trying to balance efficiency with safety. we swung a little too far and we're trying to find the right balance. >> but where do you land on that issue? >> i think it's doing to be very difficult to undo goldman as a bank. i think the more general issue, ab drew, how does the whole banking sector respond. this is an important issue. you mentioned goldman is entering that space, and that space is totally unregulated right now. >> right. get your views on the market and where we stand. we've had a number of different people come on this morning on both sides of the issue. some people contending that a

pullback is imminent. everybody is waiting for one, that may be the conventional view. the other side, another group of folks say there's a huge leg up for the market to go. >> i agree with those that argue things are aligning well for the market. the economy has a solid foundation. policy is getting more pro growth and congress is getting more functional. that is good for the u.s. economy. it's good for the market. my main worry, as you know, andrew, has to do with the fact the u.s. doesn't operate in isolation and there's growing economic and policy divergence between the u.s. and the rest of the world, which means a stronger dollar. a stronger dollar does two things if it gets too strong let's hope europe gets its act together because that's key to sustaining the rally here. >> steve. >> ken griffin is concerned about the deficit and says

that's doing to limit the extent to which congress can pass tax cuts as well as infrastructure. do you think that's a well placed fear? >> i understand concerns about deficit with a very important qualification. the ability about the deficit relative to growth. if we can grow, we can sustain a bigger balance sheet. so to the extent that the deficit is caused by pro growth measures, i worry a lot less. i think we have space, we have physical space but we have to use it intelligently. >> wow. >> having a debate about the -- >> he says if it's pro growth i'm okay with the deficit. >> what's pro growth. >> really coming around. >> really coming around, mohamed, coming around, coming around. >> you've heard me say over and over again, this has never been really an engineering problem. it's always been about -- >> personal growth, personal growth. that's what it's all about,

mohamed. >> mohamed, the music is playing, we have to say good-bye but we look forward to talking to you very soon. >> thank you. >> another pet fanatic. >> coming up behind the wheel, audi of america's president joins us live from detroit auto show. .

welcome back to "squawk box." i'm meg terrell at jpmorgan health care conference where news is flowing "fast & furious." we're joined by biomarin ceo jean-jacques bienaime. it was a tough 2016. what are your expectations for what the mood will be here? >> my feel is that it's going to be a much more big conference than last year. the weather isn't quite as good but i think it looks like biotech's momentum is pretty good for the start of this year. >> contributing to that with data on gene therapy program in hemophilia updating that last night. what does that mean for patients of hemophilia if you can treat them just one time with this treatment? >> so i think the news is very good for hemophilia patients.

we have given preliminary data back in july of last year. and now we have data up to close to a year for some patients. we show the increasing coagulation factor level is sustained, stabilized. most patients are within 50 to 150% factory level, which is considered normal levels. more importantly we have shown that despite the availability of factor 8 injections, there's still a significant medical need because our data shows that the patients that were in our study, the number of bleeds, annualized bleeding rates go from about 13, 14 bleeds to 0 for all patients but one in the study.

so that is very exciting. >> so you're treating these patients one time with this gene therapy, fixing underlying problem here. what is the market opportunity for smg like this and how do you price a drug like that? >> so hemophilia a is largest one, b, too. but a is about 100,000 patients in the world. about 40, 50% of them are severe, which will be the patients we would be targeting. today severe hemophilia patients span in the developed world on average between 200 and $300,000 a year in recombinant injections and the cost of all the morbidity related to the disease like surgery. a lot of these patients, every time they have an internal bleed in their joints, it damages the joints. eventually most of them need knee replacement or hip

replacement surgery. so hopefully if our product is as effective as it looks like it is -- it is still early -- we are going to have dramatic impact on the quality of life of these patients. >> we have to leave it there. more squaurk after the break. >> thank you.

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and they're absolutely right. they say that it's hot... when really, it's scorching. and while some may say the desert is desolate... we prefer secluded. what is the desert? it's absolutely what you need right now. absolutely scottsdale.

let's get back to phil lebeau kicking off the detroit auto show. >> thank you, michelle. behind us we have the audi q8 concept. >> this car is coming. if you look at the segment it competes in, that segment is growing by 12%, 13%, we definitely feel there's room for a second car to join our q7. if you look at it, this is the new standard in luxury. people want this kind of quality. they want this kind of technology. and frankly they want the ride of an suv. >> and suvs are hot right now in the luxury market. >> yeah. >> but overall are you worried

you see how your gas prices we get close to $3 a gallon, does that impact the luxury market as much as the mass market? >> i shouldn't say no impact, but the truth of the matter you look at why people buy suvs. frankly they are used to that packaging. if you look at gen x and gen y, they're moving into family mode, and frankly they have great fuel economy. i see the sales holding. >> seven straight years of growing sales in north america, but the luxury market overall is running into resistance, overall. any worry that you're seeing that upper end of the market saying i think we've seen enough for awhile? >> phil, i think you're right. i think the market's plateaued. we're about 1.8 million in the luxury segment. i don't see it growing. frankly if you want to get your job done, you're going to have to conquest. >> scott koegh, day when they're introducing the new q8 concept

luxury suv. joe, back to you. >> thank you, phil. let's get down to the new york stock exchange. jim cramer joins us now, not every day, jim, you see goldman go to a sell on a couple dow components. is it the same call? >> yeah, it really is. i mean, i think it's a play on interest rates. actually ironically rates are down today to the point where i have to worry about the bank group. but this is one of those calls we're seeing a lot of these around the street which is even though there are a lot of critics of the trump plan and i keep hearing people come on over and over again saying it's not going to happen or it's going to be delayed or this or that, this is directly related to the idea that the economy is going to accelerate. if the economy accelerates, you don't want to be in proctor or coca-cola. i think it is a big call. >> that's interesting. so these are not on a relative basis these aren't the stocks you want to own in an accelerating economy. so go somewhere else. >> exactly. i mean, this is out of the consumer soft good plays into presumably a series of companies not just banks but a lot of the big cyclicals.

they've been very negative on cat. it will be interesting to see what they say about caterpillar, but in the end this is about a call i expect many firms to make which is to say these stocks are no good anymore. we've got a new administration. these stocks are a hillary clinton/obama administration stock. and therefore you don't want to be in them. it's a very big call and i think it's going to hurt those stocks. they're big dow stocks by the way. >> no kidding. jim, thanks. see you at the top of the hour. coming up on "squawk on the street," don't miss a first on cnbc interview with ford motor ceo mark fields. that's at 9:45 eastern time. "squawk box" coming right back. .

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"star wars" fever appears to be far, far away in china, at least for rogue one. the stand alone "star wars" film did not have a strong open in the country this weekend bringing in $31 million over three days. that's about 60% of what the force awakens grossed in its first two days in china last year. back here in the u.s. "rogue one" dominated the box office for the fourth week in a row. the film now earned more than $114 million around the world putting it among 2016's top global releases. >> wonder why it's not doing very well. >> to be honest, i didn't see

any of the golden globes, though it was on a great network, there's not one movie i want to see. not one. >> tell you the beginning of the golden globes that fallon did last night with the "la la land," it was awesome. truly awesome. >> was there a great movie this year? >> manchester city pretty good. >> that's so depressing. >> why do you want to live in someone's life? >> "lion" is a great film. >> about the orphan who goes back to finding his parents. >> a little indian boy and it's a really awesome film. it is a great film. >> to the degree an independent small film can have that one has gotten a lot of push. let's get you caught up on one other piece of news, call it the uber for shoveling. this is a new app that wants to make sure you never have to pull out the snow blower or shovel ever again. shoveller is designed to match shovellers with people who need their driveways, sidewalks and walkways cleared after a winter

storm. there's a bad joke to be made here for those of us in new york city. the app is called the doorman. >> exactly. be very careful when you shovel your snow. >> yes, you got to be careful. >> because of issues with heart attacks. >> yeah. >> seize up and fine and all of a sudden they're laying in the snow and be very careful. anyway, you got the doorman to answer. don't worry about it. make sure, thank you. >> pleasure being here. welcome back tobeck ki. >> make sure you join us tomorrow. becky's back. "squawk on the street" is next. >> no, she's back on thursday. >> thursday. ♪ good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. a very big week setting up for the markets. of course earnings season kicks off on friday with the banks, but until then we'll have one eye fixed on washington. donald trump confirmation hearings, futures are soft, europe's relatively red, oil's