♪ live from new york where business never sleeps, this is "squawk box." ♪ >> good morning. welcome to "squawk box" here on cnbc. we're live from the nasdaq market site, i'm andrew ross sorkin along with joe kernen and melissa lee who is hanging out the last day before -- can i tease it? becky quick will be back tomorrow morning. >> she's clapping a little too much. a little too enthusiastic. >> we'll see if we want to clap about the u.s. equity futures. right now the dow will open higher by 26 1/2 points. the nasdaq about 5 1/2 points higher. s&p 500 up about a point. here's what's going on in asia overnight.

looking at the hang seng and nikkei up. shanghai composite took a dip overnight. european equities, pretty much a green picture across the board. mostly marginal with the italian ftse down a bit. wti crude, where we're now hovering at 51.17. >> today's the day donald trump will give his first news conference as president-elect. it is scheduled for 11:00 a.m. at trump tower. you can watch the conference on cnbc at 11:00. the mexican peso tumbled to historic lows since the election because of concerns that the president-elect could take measures that would weigh on mexico's currency. former exxonmobil ceo riler son facing the senate foreign relations committee in his

confirmation hearing. first trump responding to new unsubstance yated claims that russian intelligence operatives have compromising information about him. eamon javers has the latest. as this election season goes on, the bar continually gets raised for what can be shocking. as we hear more and more. yesterday completely filled that requirement in terms of where you just shake your head and go this can't get any more bizarre or insane. i watch it i watch jake tapper -- i don't know why i was on cnn, but watching it. i saw breaking news, breaking news, we've been working on this for a while. unbeknownst to me, it had been around. everyone had seen this stuff. next thing you know the actual document is published by someone, probably a normal news organization wouldn't have done that. then it's all out. then it goes to the twitterspere

and everything is broken. unbelievable, is it not. >> i cannot think of an analogy in my career covering washington other than when the drudge report put out material about monica lewinsky and the president of the united states in the 1990s of the internet changing the news distribution pattern. let me tell you what we can tell but this astonishing 12 hours in american politics. let's start -- let's do there backwards. let's start with donald trump's tweet last night and tell you what he's saying about this. this is what he put out about nine hours ago. he called it fake news, a total political witch hunt. this is what i can tell you about the intelligence situation. nbc news is reporting that briefing materials prepared for president-elect trump included information that initially circulated among trump's opponents, that is presumably republican opponents and the hillary clinton campaign.

trump briefing included damaging allegations about his dealings with the russians. the allegations themselves now have not been verified by u.s. agencies. the nbc sources would not comment on the nature of the specific allegations that were, in fact, briefed to donald trump last week. talking to some former u.s. intelligence officials last night, i can add a bit of color to that in that the sense that i'm getting is the thinking among u.s. intelligence agencies in presenting donald trump with these allegations, even though the intelligence agencies themselves had not verified the allegations was to go to donald trump and say this is the type of information that the russians likely or absolute i will have on you. they did not deploy this during the election season in terms of negative campaign information about you. therefore that adds to our argument, the u.s. intelligence community would say, that the russians favored you over hillary clinton during the course of the campaign. that would have been the logic

of why that material would have been included in that trump brief. in talking to a long-time former cia officer last night, i was told that it is standard practice and expected among intelligence agencies that russian intelligence will, when american businessmen or western businessmen are visiting moscow, will try to deploy honey pots, sexual temptations for american executives in general who are going to moscow and participating in high-level negotiations. u.s. intelligence understands that to be a standard tactic of russian intelligence when dealing with western business people. i'll leave it there. except to say the kremlin this morning has put out a statement in which they are denying that they harbor any information about donald trump at all or hillary clinton calling all of this pulp fiction. >> being used to damage u.s./russian relations.

it read like a novel yesterday. a shady british intelligence agent that was being employed by opposition research on the republican and democratic side. >> right. >> it's been around for months. if i had it, i certainly would have used it before november 8th if i was opposition. and so it's -- >> right. >> the guy has been -- guy or gal has been credible in the past. like james bond or something. what is it? m5? >> mi6. i'm told the expectation among some who are familiar with this is that much of the material in the dossier will turn out not to be true but that the person himself who put it together is viewed as not incredible, that is a credible person who has experience, but a lot of there will not prove to be true.

our job as journalists is to go very carefully with this material and establish what we can -- >> so-called journalists do not. >> but we are, but it's important to establish what we can establish as true fact and sort through this. there are wild allegations out there. it's our job to parse it. >> eamon, here's the question, as journalists, i think about this a lot. are we supposed to have a conversation about it? because they're unsubstantiated claims that we can't substantiate, should we be having the conversation at all? reporting on it, absolutely behind the scenes. >> we have been. >> we have been, but shouldn't we only be bringing those things forward when and if we have them? >> so we shouldn't go to the lowest common denominator, buzzfeed, we should not go to the lowest -- >> no. but this becomes -- >> once us out. >> you have to talk about it. they posted the 35-page report.

>> they posted the entire dossier. you read it, right? >> i read it. >> you must have been going -- >> no. >> it's bizarre. it's insanity. to shock us with this last year over the election to shock us at this point takes a lot. and it did. >> it does. you would think we would have been hardened by the 2016 election cycle. that said, what i can tell you right now is what i just reported, which is that nbc news is saying this material or some material was presented to donald trump in terms of damaging allegations about his dealing with russians. >> right. >> they presented that to the incoming president-elect. that's news and that's a fact. >> you can check whether cohen was in the czech republic. i don't know if this is confirmed, apparently he was not. >> according to a tweet he put out last night. >> he said he was never in prague. >> never in prague.

>> that seems easily verifiable. >> some things are verifiable and some things are not. >> my sense of what's in the dossier is some will prove not to be true. but the question is which will prove not to be true, our job is to sift through that and figure out what is true and not true and not just repeat allegations. >> we don't know if any of it is true. >> we don't. >> plenty of paying for opposition research. it reads like pulp fiction, completely. >> that's what the kremlin is saying this morning, they don't have information damaging on donald trump. trump called it fake news. u.s. intelligence thought there was something here worth telling the president-elect about. they told him about it in that briefing last week or they included it in the briefing materials last week. >> i would want to know it. >> you would. >> if you were donald trump, you would want to know about it. >> he's known for weeks.

certain entities are saying even the intelligence service has an axe to grind. and they were only too happy to consider the voracity of this stuff. >> look, this comes at a time when there's an enormous rift between the u.s. intelligence community and donald trump who has been openly mocking them on twitter. so this comes at a very, very sensitive time in the relations between that community and the incoming president-elect. you would expect and hope what u.s. intelligence agencies will do it the responsible and correct thing to do here. >> you could be talking -- you could be delving into a big argument about budget reconciliation and which way -- be happy that -- you are talking about stuff that, you know, it doesn't get crazier. >> it doesn't. >> thanks. eamon javers. the s&p 500 posting a flat session for the first time in

nine years, politics and earnings season likely to be big drivers for the week. joining us now is steven reese, global head of equity strategy, and j.j. hannigan. the nasdaq posted its fourth straight record high. the s&p is within a half percent of its record high. do you think that we have hit the stop? do you think that you missed out on the rally if you're not in already? you are seeing evidence in flows from the retail investor that that's the feeling they're getting. >> it's kind of interesting if we put out our imx on monday and it shows our retail traders sold last months a lot of stocks that you would expect they would be buying, particularly apple. apple is the number one held held stock for the third month in a row. they also sold higher dividend

paying stocks, like exxon and ser chevron. the stock they rolled out of from apple is to facebook. the other interesting thing since the trump election is bank of america has been a big buy. i think one of the reasons, three months in a row our clients bought bank. i think they're using it as a proxy for financials in general. for a retail trader, this is an affordable stock. >> low share price. >> yeah. low share price. very liquid. participated well. one thing back to your question, particularly retail traders have to be careful of, it's never too late to get involved. don't get all in. if you get n get in partially. if we go down, it's an opportune opportunity.

>> of the 15 most traded securities in 2016, bank of america was the only individual stock. all the others were etfs. in terms of where you see the markets in '17, you say 7% to 8% -- >> base case. >> base case. >> all coming from corporate earnings growth. we have not felt this confident in earnings growth in some time. you have to consider the financial sector and energy sector alone will contribute five points to that growth. we're confident earnings can take the market higher. i think it's easy to feel like we missed it given the year we had last year and how we started this year. we had 96 all-time highs in the market since the financial crisis. you could have been saying that all along and sat out. we recommend clients phase n look at what you have in your portfolio, compliment that dividend exposure with more cyclical exposure and small cap. >> it's interesting because if you look at the s&p 500, the top line number looks almost the

same for a very long time. but the rotations within have been very, very strong. healthcare up 3.7%. biotech up 8%. docontinuincontinuing? >> i think so. i think we may see selling into the more cyclical areas and areas that lagged like healthcare. that area was negative heading into this year because of the lack of news flow and optimism around potential reform. more positive on cyclicals, more cautious on the bond proxies, one exception is telecom. >> thank you. >> thank you. good to see you. when we rirn, stocks to watch. the biggest movers, plus a close look at trump's national secure er ers picks, jeremy bash will join us next to talk about it.

some stocks to watch today. ford confirms it will be less profitable this year than in 2016. the company is on track to report 10.2 billion in pretax adjusted prompt. ford will be pressured this year as it increases spending on emerging opportunities. united airlines is raising its fourth quarter guidance. citing stronger bookings in november and december. boeing will conduct a round of layoffs of engineers this year as it seeks to cut costs amid throwing aircraft sales. the cuts includes dozens of jobs eligible for voluntary layoffs in california, south carolina and washington state. boeing cut more than 10,000 jobs last year. confirmation hearings scheduled for several of president-elect trump's nominees, including secretary of defense and cia director. our next guest knows the inner

workings of the cia and defense department. let's bring in jeremy bash, the founder and managing director of beacon global strategies. thank you for being with us. i want to talk to you about these hearings coming up and what it means. that's probably the most substantive part of this interview that we'll have. i do want to ask you, since we have you this morning to react, if i will, to the news that we've heard about these intelligence briefings, and how you, at least, think about thos those. >> we have to drive under a caution flag. we can't race ahead of the facts, we don't know all the facts. but we know the russians had a clear preference for trump. they liked to use information to gain leverage and tried to gain leverage in our american political system. so we know that. that's a fact. that's what was pit out in the intelligence report declassified and publicized last friday. we think we know that

intelligence officials briefed trump about this, briefed obama and senior congressional leaders, because they're worried that russia will try to use leverage over the united states. i think this is important, not to see the us in the frame of democrats or republicans, because next friday donald trump becomes the 45th president. president obama said last night he was freely and fairly elected. if a foreign entity, foreign intelligence service has leverage over our president, that affects all information. what we don't know is whether the underlying information this dossier or set of memos is true. we have no idea. >> how often in your experience were you presented with information that ultimately was not true and might have been labeled as such from moment one?

to prove a point, if you will. >> it's rare you see things that are total fabrications, but sometimes 90% of the truth is 100% false. it depends on which aspects are accurate. to me, when i looked at the information last night, the things that i think are the most serious are not about what somebody might have done in moscow during moonlight hours. what i think is actually really important to focus on is that there are discussions about conversations between advisers to the campaign and officials in moscow to talk about policy issues. to try to figure out how russia could influence an incoming administration. that is very serious. that's something i would think that the fbi will be taking a close look at. if that were true, jeremy, the time frame they're talking about is five years. that's what scared me. when i went to bed, that's what i was worried about. not the salacious stuff, which,

you know, it was this stuff prior to that that for five years there this been a relationship cultivation, supposedly. that russia was involved with trying to elect donald trump for five years is what -- that's why to say some of it might be true, but some not. i don't know. there's now scuttlebutt that the whole thing -- there's a blog site, i don't know whether this is true either. i don't know what's real. >> it's impossible to know. but there are some things in there that we now know are true. a lot of the document that was posted was about the fact that russia was trying to disparage clinton and preferred trump and tried to influence our elections. that's been put out by 17 intelligence agencies, briefed to the president-elect and president and released to the public last friday. we know that. that's really not in dispute anymore. it's some of these other ancillary issues.

>> but russia doing that and being complicit with advisers and trump is a leap of faith. total leap. >> that's a totally different set of allegations. i agree. that's what i would characterize as things we don't know. >> on things we do know, we know congressman mike pompeo has been nominated as cia director and will be involved in a hearing this week. if you're him this week, given this news what are you thinking and how are you preparing for this hearing? >> it's challenging. he participated at the trump tower with the intelligence officials. he will be asked about it. whether he can say anything about it in open session or if he'll have to do that in closed session, i don't know yet. his fundamental job is to present the president with information about threats to our country. and he's got to have intelligence troops. as you saw from the last two weeks, there is a lot of tension built up between the new

president and intelligence officers. intelligence officers are not political. there's not a political bone in their body. they call it like they see it. pompeo's job here is to defend them and to get trust built up between the boss and the icntel pros. >> we had reports that general mattis' team is perhaps unhappy with some of the people that trump has tried to appoint underneath him, in-fighting within that department. pompeo obviously has to deal with the russian situation, police some comments that trump made about others in the intelligence community. how big a deal is this? or is this par for the course? that's the piece that i think us laymen don't necessarily understand. >> i think it's more par for the course. i think pompeo will be

confirmed. he's highly credible. he's capable. i don't see big issues in his confirmation. general mattis is one of the most decorated, venerated service members that we've had in a generation. i worked with him closely at the pentagon. he has great vision, is well liked. >> all right. >> i'm confident he'll be confirmed. >> yesterday, did you get to see much of the sessions questions? that devolved into a parity as well. mike bloomenthal -- is that his name. >> richard bloomenthal? >> yeah. not mike. do you have any awards, senator sessions, from the kkk? have you accepted any awards from the -- i don't know if there's any reason to think he was awarded anything by the kkk,

but verbalizing the question shows the level and depths sometimes the other side will go to to plant that seed. sessions was like -- then another award he accepted, lindsey graham had the same award and so did joe lieberman, but accepting an award from an organization where some member of the organization said something in the past. it is business as ushual. >> those guys have known sessions for a long time. i'm sure he will be confirmed as well. >> they'll do it because they can. coming up, the biggest challenges rex tillerson will face in his confirmation hearing today, including his relationship with russia. we saw russia a lot now. that story is next. and jeff sonnenfeld looks at the transition of power and president obama's relationship

with donald trump.

♪ >> good morning. welcome back to "squawk box" on cnbc. a quick look at u.s. equity futures. dow looks like it will open up higher this morning. about 23 1/2 points higher. nasdaq looking to open about 4 1/2 points higher. the nasdaq higher by a half point. the senate foreign relations committee will determine whether rex tillerson will be cleared to become the next secretary of

state. jackie deangelis looks s at so of the challenges he will face. >> reporter: by all indications he should be ready for difficult questions, not justs about h ab finances, but about his personal experiences, he has dealings with foreign heads of state, but now questions on how he will approach those same entities as a diplomat. there's the iran nuclear deal. this was a deal by executive order. will tillerson's tone on iran be more harsh. he already said he doesn't believe in sanctions or if they're effective, that was the case when it came to russia. what will he say on russian hacking. the president-elect called climate change in hoa hoax at o point. on the personal side of this, his financial have been in

focus. with personal fortune of nearly 500 million, he will divest some of his exxon stock, so what he says today will be scrutinized, his answers will pave the way for his potential confirmation and his impact as secretary of state will be on oil in general, dealing with countries abroad, this will have an impact not only on big oil companies but countries, too. >> thank you. >> is this me? >> yes. >> it is you. >> thank you, jackie. for more on the confirmation hearings, let's bring in jeffersonjef jeff sonnenfeld. it was like watching a greek tragedy yesterday. i don't know why i was watching it yesterday. i guess there was nothing else going on. i tell you one thing fsh, sessis

was prepared. it goes back and forth. i have this letter from 25 ags that says you're the greatest thing ever, and then the next guy comes up and says how many awards do you have from the kkk it was bizarre to watch. >> it was rough. if you watched general kelly's hearing, that was more cheerful, upbeat, a universal acclaim for general kelly coming into homeland security that cleared quickly. tillerson i think will clear. not as smooth, but i don't think we'll have as many as the actual got you questions, but i think there will be some tough questions asked. i think elaine chao will sail through as well. she's the only cabinet member in bush 43's administration that went through all eight years. she was secretary of labor then, but knows the transportation issue

issu issues. and i think both sides of the aisle will applaud her. sessions i think surprised people on the upside yesterday. >> governance question for you, jeff. you will note rex tillerson getting $180 million pay day in terms of stock investing as a function of this entity, his role in government. are you happy about that? unhappy about that? lots of debate about those types of payments on the way out. >> as you know, it's a huge issue. we actually could fill the rest of the show, bore people to death, but fill the show about talking about how the government should be upset about these accelerated payments. the idea of this kind of investing, it's a retention issue and an earning issue, you have to stay in there to quite earn it. he's not quite there. but he would be retiring this spring anyway. so the acceleration, which is

not purely for retention-de -- there's some question about how the trust will be handled. there's some issue about how -- >> i'm just asking the broader question, are you happy or unhappy as a governance expert that executives who are leaving to go into government are often having their stock vested on the way out, which is atypical relevant to what would happen if you went into a job at another company or even into public service, if you decided you wanted to be a professor, teacher or do something else. >> when you take another job it's a bad idea to get accelerated payments based on a vested time schedule. since is going to be retiring soon any way, it's not like we're not paying him for service he didn't give us. i'm not that upset about that. the tougher questions he'll get have to do about the league of friendship or whatever award from putin and some of these other things.

>> the "journal" has a piece on what we need to know about tillerson. the first half of the article is a cloak and dagger situation where an operative or putin associate was assassinated in moscow. and it implies there had to be 15 people that were involved, because there were cameras shut down. we have to ask rex tillerson about that because he got an award from putin, i guess? is that what we'll hear or climate change and alarmism all the time? >> there will be some on climate change. i think exxon changed their positions publicly on climate change. they're not as obstructionist on where the science is on that. when it comes to russia, there are tough issues about his positions on sanctions which will come up. and frankly the headlines yesterday create much more of an

elevated concern, much more of a shadow is cast on this. i think lewis brandice said that sunlight is the best disinfectant. so whatever trump does at 11:00 could be helpful or damaging from the tillerson hearings. you know, it was the old median jacob smirnoff who said they are surprised there are political people in russia. they're there, but it's difficult to criticize putin once. >> if it's so uncontroversial, the science what will they do to scott pruitt then? >> that will be a lot rougher. i know you don't want to take me down the path right now about how trees pollute, there are some areas about dramatic weather changes where some

meteorologists dispute some climate change people. but when you look at the seas rising and the -- >> no, no, no. no. >> i know you don't want to get started on that. >> that's like -- you went fake news. >> i'm waving red meat at you right now, joe. >> i don't know what you're contending, whether the planet is warming or every adverse weather event is because of co2. >> no people are overattributing adverse weather events would be an -- >> an understatement. >> okay. >> for tillerson, jeff, how successful can he be or how convincing will be for him to separate his views as an individual and the views of a company? he's a company man, 41 years at exxonmobil, can you do that? >> that's something which is a great point. we saw him do quite artfully yesterday. but it's a novel path for them to separate the company's positions on sanctions. the ukraine invasion, or

something not an issue of hot political contention on either side of the aisle, the implementation of these sanctions in congress. there will be concern where tillerson comes out on this. the positives are, while he's not a diplomat and he doesn't have a great history in government service, even among ceos he has not been that active in civic statesmanship the way jim mcnerny of boeing or others have been, he hasn't been that public of force. he has great stature a disarming press sense and he's a charming guy. his performance is okay. he is leaving exxon in worse shape than when he found it. the production is half what it was when he got there. his returns are not that great. 22% returns, total shareholder returns, he's nowhere near where

the industry is, let alone the s&p 500. his stock returns have not been so good. he is not being brought into a ceo position. ceos favor him, but not overwhelmingly. 65% in our survey of ceos think he should be confirmed and i think he will be confirmed. why did he get this job? the qualification for this job that i think in the minds of those in the senate is because he was selected because of his closeness to russia. some argue, keep your friends close, enemies closer. that only goes so far, because you get down the appeasement trail. >> we've been down that trail for about eight years. >> i'm sorry to see about wilbur ross deferred through this. she have sailed through. >> it's -- it's the harry reid confirmation. they're all going to sail through.

nothing they can do. >> but now he's been pushed back. >> we'll see. >> you have mnuchin -- >> how do you stop it? you need republicans to join in. and the question of why are they pushing them back? because they say they don't have all the documentation. this goes to the conversation we had yesterday -- >> and it's republicans in favor of pushing it back. >> john thune, chairman of the commerce committee is pushing them back. it's not just coming from one side of the aisle. >> the republicans decide on the date of the hearing, it has nothing to do with the other side. >> the chairman suggested the delay. >> all right. thanks, jeff. coming up, much more on rex tillerson's confirmation hearing. we will talk to ambassador wendy sherman. and then robert shiller weighs in on interest rates and the health of the housing market. at 8:00 a.m., tom barrack.

"squawk box" will be right back. >> you're watching "squawk box," live from the nasdaq market site in times square. we'll be right back.

welcome back to "squawk box." time for the executive edge. yes. yes. the world economic forum releasing its annual risk report ahead of next week's highly anticipated gathering in davos. andrew? >> you're going. >> i know i am. you say it with such sarcasm. >> i gave that a read with a lot of -- gathering in switzerland. >> sarcasm. >> among the top risks, dividing societies, fears for the world's climate. the report highlights the possibility of an anti establishment backlash in elections is possible. but they're talking about now the netherlands, france, germany and italy. among the guests at the meeting, china's president ji jinping, a

theresa may will also attend. are they going to land from the private jets this time or solve income and inequality as they fly. >> how are you going to land? >> i'm flying commercial. >> are they going to touch down or solve those things as they circle? >> i love you go to places like this. >> yeah. and i make fun. >> mock them. you mock the people. >> you mock as you -- as you desperately want to be there at the same time. >> do you think he wants to be there? >> you're definitely channeling. >> he mocks new york city and then says he wants to get a place in new york city. >> i want a place in new york city so i can show up here at 5:55 and make it on the air, like some people we know. >> good. >> let's tell byou about tesla,

they hired somebody from apple to oversee their self-driving vehicles. chris latner who worked at apple for a decade is best known for introducing swift, a programming language making it easier for developers to write apps for ios. tesla's autopilot feature had been run on an interim basis by the software chief at spacex. when we come back, let's make a deal. 2016 was a record year for m&a and could pick up more speed this year. let's take a quick check of european markets right now. green arrows everywhere.

welcome back to "squawk box" right here in times square. 2016 was a record year for m&a announcements. our next guest says deal making it likely to continue in q-1. joining us now is the head research editor at merger market americas. we're thrilled she's with us this morning. so help us understand what you think is going to happen in

2017. 2016 was a remarkable year, both for the number of deals but also the number of broken deals at the same time. >> right. the stage, according to our data, the stage is set for m&a to continue to be strong at least through q-1 in 2017. we see a low-interest rate environment. the economy is pretty strong. there's confidence the economy will continue to be strong. >> how do politics play into this when you think about donald trump and the large mega deals that during the campaign season came under fire from donald trump but now there seems to be some kind of, i don't know, but there's a sense that maybe he won't follow through on some of those pledges and that there will be more mega mergers. >> there's a lot of uncertainty surrounding trump's imminent presidency and what kind of relationship he will have with congress. he did come out totally against the at&t/time warner deal, for example, outright saying he'll block the deal once he's in

office. but right now, we don't know if that's going to be a policy -- if that's going to be a priority for him once he's in office. >> how much do you think there's going to be a wait-and-see attitude among companies to understand what the tax code is actually going to look like and therefore the implications both on the repatriation side but also just on the general rate here in the united states? >> that's likely -- there is likely to be some of that. companies may wait and see in order to see if tax cuts happen in which case repatriation of cash is likely. they may want to see if there's going to be a tax holiday, which would also cause them to want to repatriate cash. they're less likely to engage in tax inversion deals, which the obama administration worked so hard to address over the last three years. most successfully earlier last year in april. >> to the extent we have investors who are speculating about potential mergers, are there specific sectors that you think there's going to be more likely to be transactions in? >> yes, we'll probably see a continuation of consolidations in energy.

that's still benefitting from a low oil price environment. we'll also probably see more media mergers. we'll also see if at&t/time warner does indeed close. >> right. because of the knock-on effects. >> exactly. >> and when you talk about volume, are you thinking that we're going to be seeing a whole series of mega, mega deals, big headline grabbers, or do you think it's a whole other business? this goes to the whole russell 2000 story. >> right. we may not see huge, mega mergers because there has been a lot of scrutiny from the public in a regulatory sense on m mega mergers over the last several years. also, the cost of borrowing will go up. these are all factors at play. on top of that, there's a lot of uncertainty as to what a trump presidency will priority, if m&a will be a big part of that. >> if the fed was spurring a lot of this financial engineering and the fed gets out, maybe there won't be as much financial engineering. >> that remains to be seen.

his pick for the fed, to head the fed, mnuchin, he's not a policy person. he's not -- >> you mean treasury. >> sorry, the treasury. he's not from -- he's not a policymaker. he's from the private sector. we don't really know exactly what policies he's likely to be a proponent of. we don't know. >> he hasn't picked anyone for the fed. we have some suggestions though. >> what are they? >> santelli. >> one big m&a question for you which relates to activism and hostile takeovers. the sullivan and cromwell lawyers are going to run the s.e.c., if he gets through the process, which i think he will. is he going to come out on the half of the companies who historically wanted greater governance structures in place to defend against activism and hostile takeovers, or will he be more on the side of the investor class, if you will? >> that's a great question.

it really remains to be seen. he hasn't been a policymaker in the past. we don't know to what degree he'll abide by laws currently in effect or if he'll use his m&a knowledge to actually find loopholes to make these deals go through. >> okay. elizabeth, thank you for joining us this morning. >> thank you. pleasure. >> first timer right here on "squawk box." >> yes, excellent. oh, her. >> i know my behavior sometimes suggests i'm still learning. i am still learning. she's an old pro. >> you were fine. you were fine though. >> thank you. coming up, exxon's rex tillerson on the hill today for day one of his confirmation hearing for secretary of state. i want to watch this again, i think, just watching these guys. they love to grand stand. we'll tell you what to expect. then later, tom barrack will join us. he's chairman of president-elect trump's inaugural committee. he'll be in studio for the hour starting at 8:00. im)

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trump meets the media. markets in wait-and-see mode ahead of today's news conference. >> plus, secretary of state choice rex tillerson heads to the hill to face lawmakers. a preview of what you can expect today and how the markets will react is straight ahead. real estate and home prices under the trump administration, what are the head winds the sector may face in a rising interest rate environment? and is now the time to lock in that loan? yale economics professor and co-founder of the case shiller index, robert shiller, joins us. that interview just minutes away. and "squawk box" gets a new staff member. >> can you sing "happy birthday"? ♪ happy birthday to you ♪ >> that's very hal like. >> i'm not sure what you meant by that question. >> we introduce to you our very

own alexa and show you some pretty cool skills all investors can use. >> you know, like, nunchuck skills, computer hacking skills. girls only want boyfriends who have great skills. >> as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york city, this is "squawk box." good morning. welcome to "squawk box" right here on cnbc. we are live from the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen and melissa lee. the futures at this hour are looking up in a big way. i don't want to say big way. dow looks like it would open 30 points higher. the s&p 500 up about a point and a quarter. take a quick look at the ten year. we're at 2.381. finally a look at wti crude for those of you pumping your own

gas this morning. if you want to buy a barrel, it it'll cost you 51.09. >> that's after a 2.2% decline in yesterday's session. in the green right now. in the headlines, meantime, at this hour, the justice department has reportedly decided against bringing action against the u.s. airline industry. that's according to "the wall street journal." officials had been probing whether airlines colluded to control flight capacity and keep airfares high. >> and now nothing came of it. nothing came of it. remember when they started doing this? so annoying. so what was it all about? >> they needed to look at prices. there's a value in looking at how the marketplace is working or not working. we want the marketplace to work. we want the marketplace to work. >> when we make the airlines great again, we're going to be looking at ways to -- >> by the way, i think they already made themselves great again. >> they have. they've had quite a run. >> after 20 years of not making a dime, they're final able to stay in business and you're mad. >> i'm not mad. i'm just suggesting to you that

the government came to that conclusion, then we know. >> now we know either way. >> oh, they're looking into it, looking into it. something going on. looking into it. now, oh, no, nothing. >> don't you care about the little guy? >> i do, but the airplanes are full, prices are basically where they were in the '70s when it used to cost $800 to fly to l.a. you can do it cheaper now. be happy. be happy. you got five now. five people. you're going to need a minivan. you're not driving to florida. not with five kids. or three kids. plus you. >> what's the best minivan out there these days? is it a sonata? >> in that movie, whatever it was, with danny devito and john t travolta. there's no cool minivan. >> we can ask alexa. >> we have alexa can us.

is she here? we're going to find out. >> oh, later. we'll do that later. >> no, i think they like the toyota one. >> there's one where you can push a button and the door closes. >> matt, you have one? the sienna. our producer says the sienna. >> is that the color too? is it burnt sienna? it was "get shorty." they talk danny devito -- and he got one. >> there's the owner of the van. >> by the way, i think all -- have you been inside a minivan? >> they're great. they have compartments in the floor. it's amazing. it's everything you want. >> it is everything you want, except that it's a minivan. >> shoot me if that ever happens. wells fargo has implemented a new compensation structure for its branch bankers. it focuses on customer service rather than sales goals. that follows the bank's sales practices scandal last month. and mortgage applications jumped 5%. both new purchase applications and refinancing activity rose. this as the average 30-year

mortgage rate fell seven basis points to 4.32%. diana olick will have more in a few moments. two pieces of news involving boeing this morning. the jet maker is planning to conduct involuntary layoffs of engineers, according to an internal memo that's been seen by reuters. no numbers were specified. boeing may also implement a voluntary layoff plan at various locations. separately, boeing was beaten out by rival airbus in new orders for 2016. a last-minute surge gave airbus 688 new net orders last year. that was 20 more than boeing. okay. lawmakers kicking off confirmation hearings yesterday with alabama senators jeff sessions in his bid to become u.s. attorney general. this morning reports that russia is compromising material on the president-elect. a lot to go over and talk about. eamon javers joins us on what's on the agenda today. >> good morning, andrew.

let's start with that news you just mentioned about russia. let's do this backwards. let's start with donald trump's reaction to it because it has been an astonishing 12 hours in american politics overnight. it tees up a big day today as donald trump meets the press at trump tower. he tweeted out last night about these allegations. fake news, a total political witch hunt. here's what we can tell you about those allegations. according to nbc news, briefing materials that were prepared for president-elect donald trump last week included information that initially circulated among donald trump's political opponents. the trump brief included damaging allegations about his dealings with russians. the allegations themselves that were briefed to donald trump have not been verified by u.s. intelligence agencies. nbc sources would not comment on the nature of those allegations. i can add to that just a little bit of color in talking to some forem former u.s. officials last night who gave me some guidance on this. one official saying that the

reason to include this material in donald trump's brief, even though u.s. intelligence agencies can't verify it, is to suggest to the president-elect that this was the type of damaging information about him that the russians would have had in their dossiers. the fact they did not deploy it during the election season is evidence, they would suggest, that the russians, in fact, favored donald trump in the election as opposed to hillary clinton, where they did allegedly release damaging information about her. i also talked to a former cia official last night who suggested to me that in general, it is a long-standing well-known practice for russian intelligence to use what are called honey pots, sexual attractions to attract western business people who are doing business in moscow, engaging in contract negotiations and the like, and to use that -- evidence of those assignations in those negotiations as political and business leverage. so that is a long-standing practice according to u.s.

intelligence officials. we'll have to wait and see where all of this lands. but of course, you saw donald trump's tweet about it and of course the kremlin today is saying that all of this is not true. they deny in russia that they have any damaging information about donald trump, andrew. >> wow. let me ask you a couple other questions that are on deck today, or at least this week. we have some hearings coming up. we have gotten some news and word that some hearings are not going to happen or at least have been delayed, both for steve mnuchin and wilbur ross. what do you make of that? >> clearly they're struggling. the whole system is really not set up to process billionaires in terms of the ethics and disclosure issues. billionaires have vast assets. just detailing them can be hundreds of pages. it's very complicated going through all of that. it takes a lot of time. your standard government appointee doesn't have anything like this kind of level of assets. so just processing these people is going to take a lot of time. >> is it on the processing end that we have an issue, or is it

on the information itself and its timely delivery? there seems to be a little bit of a debate about that. the ethics office saying they're not getting the information from the nominees and the transition team. then others, including some in the senate, suggesting it's actually the ethics office which is slow walking all of this. >> well, we don't know. you can imagine that the billionaires themselves and their financial teams will want to process the information themselves before they turn it over to the ethics office. there could be some delay in compiling, aggregating, figuring out all the information they need to disclose. some of these people may be realizing that i do have to disclose. the old saying is you have to open the kimono a little bit here. that's something that some of these business figures may not have necessarily expected, may not be familiar with, and may not be comfortable with. all of that probably going on behind the scenes. whether the delay is there or on the ethics office itself, i

can't tell you for sure. but i can tell you there is a sense among some senators on the hill that they do not want to move forward with these until they know what the holdings are, know what the disclosures are on all of this. you can bet that donald trump will be asked about that today. >> okay. thank you. great to see you. let's get back to the markets. we spent a lot of time talking about politics in general, confirmation hearings, what senators are doing in terms of repeal and replace. are investors looking at this as sort of a barometer as to whether or not the trump agenda and specifically tax reform can actually get done? >> i think to an extent. any time the trump administration hits any type of a wall, slthere's a little bit doubt thrown out to as to what kind of tax reform can go through. i think ultimately what it boils down to is a couple things. one, keeping an eye on fundamentals.

we want to see an earnings react sell rati -- react sell ration, if you will. we want to keep an eye on trump and his agenda. >> the nasdaq keeps chugging along to new record highs. four times in a row now, past four sessions. the markets are like, eh, you know, everything is all right. >> i suspect a lot of this has to do with the outcome of the election. if you go back to november 8th and really just the rally and the magnitude of this rally we've had over the past couple months now, it's been nothing short of spectacular. for the first time in over a decade, you have now republicans in control of washington, the white house, both sides of congress. that really bodes well for some meaningful reform. right now expectations are building. expectations are high. they're priced into the market that you do, in fact, get some

type of tax reform, both on the corporate and individual side. some repatriation of profits overseas, some infrastructure spending. i think all of these things have helped fuel markets higher. we've really seen multiples expand over the last couple months. what we need to see now is earnings start to pick up the weight a little bit. >> is it your sense it's a front-end loaded year or a back-end loaded year? will the hope continue, and will we actually get results that will be disappointing? >> we're flirting with dow 20,000. as you get closer to that, i think animal spirits help take you a little further. i suspect it has a lot to do with what happens over the coming months. if markets can believe that trump's agenda, as it relates to tax reform, as it relates to fiscal spending, infrastructure spending, all of these things, if they believe that it can truly come to fruition, i suspect markets can rally even further from here. not to mention the impact all of this fiscal stimulus is going to have on the underlying economy and of course what that means for profitability. at the end of the day, i think

earnings are ultimately what's going to drive markets higher. if you provide a tail wind for profitability and earnings, i suspect you can see markets move higher. what we have to be mindful of is the risk, of course, that some of these expectations priced into the market are simply not met. >> which sectors do you like right now? >> when you have rising interest rates, you have to be mindful of what's happening in financials. we have a steeper yield curve. as the yield curve steepens, net interest margins look for attractive. you have a good looking household balance sheet. >> you still like them? >> we still like financials. aside from that, we're still looking at certain sectors like the consumer sector, discretionaries in particular. areas that stand to benefit from a strong consumer backdrop. >> all right, joe, thank you. >> thank you. coming up, the health of housing. what will rising interest rates mean for homeowners and potential buyers? we'll speak to yale university economics professor robert

shiller in a moment. and peter hoekstra joins us to talk about this week's hearings and the trump transition. and bill nygren talks markets and where you need to put your money right now. stay tuned. you're watching "squawk box" on cnbc. thngngng t i vegege ednvto ee'nd inadven ige an

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welcome back to "squawk box." we're live from the nasdaq market site. some corporate news stories for you this morning. tesla has now hired a top software engineer coming from apple to oversee its autopilot driving efforts. he's best known for introducing what's called swift, a programming language that joseph uses regularly. it makes it easier for developers like joseph to make apps for ios. are you only doing ios apps or also android? >> ios. >> bingo. the move is a significant win for tesla. its autopilot feature was previously ran by spacex. ford is on track to report

about $10.2 billion in pretax adjusted profit, matching previous forecasts. ford says it will be pressured this year as costs rise and it increases spending on emerging opportunities like self-driving cars. united airlines cites stronger bookings and passenger yields in november and december. boeing will conduct a round of layoffs of engineers this year as it seeks to cut costs amid slowing aircraft sales. the cut includes dozens of jobs eligible for voluntary layoffs in south carolina and washington state. boeing cut more than 10,000 jobs last year. donald trump just tweeting. the president-elect in his words, russia just said the unverified report paid for by political opponents is, quote, a complete and total fabrication, utter nonsense, close quote, very unfair. supposedly, andrew, and listen to this, it's been around for a year, this same report.

there's been time. but cnn breathlessly reports it yesterday, jake tapper taking the lead. legitimizing the dossier before they say what's in the dossier. then they get buzzfeed. >> hold on. i'm going to take the other side of this, only in this respect. i think it's absolutely fair game for jake tapper and any news organization report that it was shown to the government but not necessarily to disclose what was in the dossier. that was on buzzfeed. that's a more controversial and debatable decision. >> then leading up to the first news conference as president-elect, this is -- instead of talking about all this other stuff, this is what the entire media is talking about. >> by the way, it also overshadowed president obama's speech last night. >> hundred percent. the timing of the tweet was impeccab impeccable. >> there was a lot in that speech last night. if you put reagan and bush together, it was longer than the combined reagan and bush fa

farewells. >> by words. >> one word used 75 times apparently, i. can i just tell you about the silhouette that's the oldsmobile. >> it was a good speech. >> villanova was playing xavier. >> it was wonderfully done. people will go back and read it 20 years from now, and we'll see where the world is. >> farewell speech. i actually have the clip from "get shorty." >> on the minivan. >> it's the oldsmobile silhouette. you've been to the iv on robertson. i know you have. in beverly hills. that's the place. he drives up to it and like tosses the keys to the valet. and the valet is like, it's a minivan.

there's no way to make it cool. that was the point. anyway, the latest read -- we're going to show that. you can do the farewell speech. the latest read on the mortgage market just out. diana olick joins us from washington to break it down. hi, diana. you're breaking down the details. you're going to break dance or break down the details? >> just the details. no dancing this morning. thanks though. the news brought a sense of caution, which caused interest rates to pull back after a month of marching higher. that pushed mortgage application higher by 5.8% on a seasonally adjusted basis for the week ending january 6th compared to the previous week. volume still 25% below year-ago levels. applications to refinance a home loan, which are most rate sensitive, rose 4% for the week, but they're 32% lower compared to the same week a year ago. refi volume had been falling steadily since the presidential election and the selloff in the bond market. mortgage rates loosely follow the yield on the ten-year

treasury. the average contract interest rate for 30-year fixed mortgages with conforming loan balances fell to 4.32% last kweek. that's down from 4.39. that's for loans where you have to put at least 20% down. mortgage applications to purchase a home rebounded a stronger 6% for the week as buyers headed back to the housing market following the holidays. purchase volume is still down 18%, though, from a year ago, and that's likely due more to a lack of homes for sale and higher home prices than mortgage rates. rates are just slightly higher than one year ago. back to you guys. >> all right. thank you very much, diana. >> okay. still to come, yale economics professor robert shiller on the housing market. the trump economy and much more. check out the futures at this hour. we are in the green pretty much across the board. actually, s&p 500 just took a minor league dip. back in a moment.

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now the answer to today's aflac trivia question. which president had the first televised inaugural address? the answer, harry truman in 1949. stocks to watch this morning, veeco instruments expects earnings to come in above forecasts. they also see revenue in line with estimates. parsley energy is buying more oil and gas in the permian basin. they' and coming up, the health of the housing market and the trump effect. robert shiller will join us after the break. as we hoead to break, take a lok at u.s. equities one more time.

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good morning and welcome back to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. among the stories front and center this morning, president-elect donald trump holds his first news conference since winning the november election later this morning. it will take place at trump tower here in new york city. it's scheduled to begin at 11:00 a.m. eastern time. you can see it live here on cnbc. jeff gundlach says there will be trouble for equity markets if the yield on the ten-year bond moves 3%. he said he expects stocks to reverse their pacific oceaost-e gains. remember bill gross said 2.6% was the number. a little bit of a pissing match here. volkswagen has confirmed it's in talks for a settlement of its diesel emissions scandal. it would see the automaker plead

guilty to criminal misconduct. let's talk housing and what we can look forward to in the new trump administration. joining us now is robert shiller. great to have you with us. >> my pleasure. >> you know, we've seen animal spirits take hold of the equity markets and various asset classes. could we see that also translate into the housing market? >> i think that's a possibility. we've seen some signs of it, like the nah, national association of home builders, housing market index took a big jump up in december, right after the election results. i think trump is, for many people, an inspiration. he's a business -- pro business. think big, live large. that's trump. to some extent, that communicates to home buyers as well as other investors. >> we see consumer confidence numbers at 15-year highs. is that a decent pulse of where consumers are at in terms of their confidence and their own

financial well being and their ability to buy a home? >> well, it's only one number. i think confidence is hard to measure. i wrote a book called "animal spirits." that's a broader term. it's not just confidence. it's, i don't know, a sense of excitement. that's what -- unfortunately, not everyone reacts to trump the same way, but there are many people who react with excitement. let's get going. >> look at those rallies. and you are mr. animal spirits. if you say the animal spirits are getting conjured up, i believe the animal spirits are getting conjured up, robert. >> but not everyone. >> well, yeah, i know, but you saw the nfib. did you see that number yesterday? how do you explain that any other way? >> i'm sorry -- >> the nfib number yesterday d hadn't been a jump like that since 1980 for small businesses. the optimism, you can't explain it any other way. >> you know, i think economists

have to recognize there's a big psychological component to economic activity. it's just not easily captured with one number. you have to look at a number of different things. there's definitely a surge in confidence going on right now. >> in terms of -- i mean, what do you see for the housing market in this next year? we're sort of in this interesting place where there are maybe animal spirits taking hold. we have rising rates, but there's nothing on the policy side that has happened yesterday. so we're sort of in this juncture where the baton has to be passed to actual policy. we're in this in-between period. >> see, i think often the effects of policy are more in the words and the stance than in -- we're in a revolutionary time. we don't know what trump is going to do. we know one thing, he's got tremendous self-confidence, and he doesn't believe experts. he doesn't just routinely believe them. so we're going to see some big

changes. it's not just monetary -- whether they raise interest rates another 50 basis points. it might be something more fundamental that comes up about how the fed is even designed. >> you sound optimistic. are you? is that a correct read? >> well, i think i'm nervous. but sometimes that kind of nervousness can go along with optimism. i didn't vote for trump. we've got him. let's hope for the best. he might do something good. >> very open minded of you, robert. >> i'm trying. >> i could hear it earlier. it's killing him to say it. it's just indisputable that there's a different feeling. at least so far. he's not even president yesterday. who knows what happens. >> people used to say, go to one of his rallies and you'll see it, you'll feel it. that's the kind of -- he's a

motivational speaker. we've never had a president like this. >> should be interesting. in terms of interest rates, a lot of people are saying mortgage rates are rising. they haven't moved too much. maybe just enough for people to say, you know what, i'm going to take a pause. what have you found in terms of what that magic number is in terms of the increase and their sort of reluctance to pull the trigger? >> well, when people start seeing interest rates go up, then of course it looks like housing is not as good an investment as before. on the other hand, people might do anticipatory buying. they might think, i want to lock in. the 30-year mortgage rate is at 4.2%. it's been a lot higher in history. so some people may be thinking, i want to buy now. that can propel upward -- you know, the housing boom continued -- mortgage rates bottomed out in 2012. then they started rising. so should that have clipped the housing market?

no, it did the opposite. the housing market was rising with the interest rates after 2012. >> so what are these moves in interest rates mean for the markets that have seen the most price appreciation really? thinking of cities in the northwest like seattle and portland. does that really curb the growth we've seen there? >> well, one thing you see in such cities is a lot of construction. that's what happens when prices get high. so that should clip -- you know, usually these booms don't go on forever. i've been trying to figure out why seattle and portland are so hot. and vancouver, by the way, across the border. there's some regional psychology, i think, that's driving it. and it's real. also employment is growing in those cities. but it won't go on forever. they never do. >> you know, robert, in terms of the overall economy, just getting back to that, what kind of economy is trump getting from obama in your view? you pair that with trump as this

unprecedented motivational speaker, and what do we set ourselves up for? >> well, the economy is looking strong at the expense of still near zero interest rates. so it's not normally healthy. and it relies on an institution and janet yellen that's none too friendly with donald trump. so i think it's just a very uncertain time. >> all right. robert, thank you. robert shiller. >> the latest tweet from the president-elect. russia has never tried to use leverage over me. i have nothing to do with russia. no deals, no loans, no nothing. yesterday -- i don't know why, really, i guess i was watching the sessions thing on cnn. so i was watching that on cnn so i saw the entire -- the minute jake tapper started talking about it, i watched it all. he emphasized a couple times that in this dossier, there was

the notion that great deals had been offered. they actually said nothing was ever acted on. nothing was ever done. even before the salacious details came out later from buzzfeed, they already said there was nothing there, no quid pro quo. anyway, when we return, former congressman peter hoekstra will join us. we'll get a preview of tomorrow's hearing for mike pompeo. at the top of the hour, tom barrack as our special guest. we'll be right back.

welcome back to "squawk box." let's take a check on the futures right now. they are higher across the board. they've been holding here -- well, not across the board. the s&p 500 looks like it's going to give up a point at the open. the nasdaq is the one we're watching. it has actually had a six-session winning streak. we'll see if that can hold in today's session. okay. a senate hearing for congressman mike pompeo, president-elect trump's nominee for cia director, was pushed by a day, to tomorrow. for a preview of that and more

of what's going on in washington, pete hoekstra, former congressman in michigan, who served as the chair of the house and intelligence committee, also served as national security adviser to donald trump during the campaign and as his michigan co-chair. pete, thank you for joining us. first impressions on this russia news that we've been trying to make some sense of overnight and how that's going to ultimately play in this hearing tomorrow. >> well, i think what the indications are this morning is that the next couple of days are going to continue to be all about russia, russia, russia. whether russia was involved in hacking, whether they've got background material on donald trump or not, it appears that this whole process is doing exactly what the russians might want, which is to cast doubt on our elections and to cast doubt on donald trump. >> you've seen the tweets from trump. you've also seen, perhaps, some of the comments made by a spokesman for putin, suggesting that none of this is true.

what do you believe? >> well, i think number one your don't believe anything that comes from putin. you know the types of they've been accused of are the types of things that they do. they get data and information and try to get as much information on individuals as they can to blackmail people. you know that they want to perhaps influence elections and those types of don't believe th anything on donald trump that's of any significance. the reports are coming from a source that they're not verified, not substantiated, they've not been verified by our intelligence community. so right now it's a lot of noise about not a lot of substance. >> how do you square up donald trump's sometimes laudatory views of putin and some of the comments he's made and some of your own views about him?

putin, that is. >> a couple things happen. number one, i think donald trump may talk about vladimir putin as an individual or as a leader and say that he admires some of the leadership qualities that putin may have but not endorsing or agreeing with the policies that vladimir putin is engaged in or the direction that he has russia moving in. donald trump is very much posed to what russia is doing and has done, you know, in europe, the middle east, and those types of things. i think donald trump recognizes the threat that we face from russia, but i think he's also hopeful that in places like syria and combatting isis that we may be able to forge a better relationship with russia. if that doesn't work out, guess what, he will be tough on russia. >> so congressman, if you follow this whole story, it was, you

know, there's these operatives working for the opposition. they're looking for all these things. i know one of them, we don't need to mention names, then they give it to mccain. mccain gives it to the cia. they feel like if it were to have any voracity at all, we need to at least alert the candidate and others about it. is it possible the whole thing is -- the cia gets totally punked by stuff that's just word for word, you know, almost sounds like it's reasonable because of the cia findings about russia's involvement. this almost fits in with that narrative, but it goes so far beyond what they already found, so it's plausible. could they get totally punked like that? does that happen? wouldn't they try to verify a couple things to see if there was anything true in it? >> i think a couple things here,

the points you bring out. number one, the cia gets this information. i think -- and they're going to try ander if if verify it, but before they have the opportunity, they may share with the candidate. they may share it with mr. trump, the president-elect. when i was on the intelligence committee, we would get information from the fbi or the cia where they would brief members of the gang of eight about circumstances affecting a member of congress. no allegations of wrongdoing or anything like that. but just saying, hey, we want you to be aware of this and then work with us and let's determine what the appropriate course of action should be. should we inform the member that this kind of information is out there? and again, not validating or giving it credibility but just informing the proper personnel in the house and the senate that these things were floating around there. >> and then look how it works. a legitimate news organization,

i use the term loosely, like cnn puts it out and doesn't say anything. then you have a pseudo fake news organization, prints all the details, and the most salacious details are the top trending thing on twitter the next day, leading up to a press conference. it's almost like it worked perfectly for people that wanted to play -- if we are getting played, i don't know. >> that's right. and this is why i put in there with emphasis, maybe not strong enough, the information went to the gang of eight. sometimes only the chairman and the ranking member of the intelligence committees in the house and senate because the information isn't verified and we recognized how potentially damaging this information would be to an individual if it got out in the public. so it was a very narrow scope of dissemination of that information. when it leaks out, then it's very, very damaging.

>> so the intent was to to be narrow, but the fact is we are where we are right now. the american people, the message they're getting is we should not believe necessarily everything that the intelligence committee gives us, reports on. and doesn't that play exactly into the president-elect's notion that it is intelligence in quotes? >> that's exactly right. and this is why i think in a lot of -- you got a couple things here. i think the intelligence committee or community here will tell you, number one, we haven't verified this information and don't know whether it's true or not. but it undercuts the whole narrative, you know, that the intelligence community is working independently of politics, that it is dividing our leaders with good information from which they can make their policy decisions in that it is not influenced by politics. really, i hope one of the things they talk about with congressman pompeo is taking the intelligence community a little back into the shadows where it can really focus on developing

great content for republicans and democrats and do it in such a way that, you know, let the chips fall where they may in terms of policy. >> can a guy at the top do that? because we have the notion that a lot of these people are rank and file and don't change with administrations. i think it's not as simple as that. the cia right now reflects the guy who's in charge to a great extent, who is serving at the request of president obama. could it be a different cia a year from now with pompeo serving trump? >> well, one of the things -- i met with lots of, you know, cia and intelligence operatives at the grassroot level. they are all about getting the best information possible for america. most of the time they'll stay out of politics. i think the intelligence community gets into trouble when the people at the top of the

organization get too political and maybe get too close to a president. that's a bad place for the intelligence community to be. >> congressman, last question for you. we're going to be hearing from donald trump at about 10:00 this morning, who's going to be giving a news conference. it may very well get overshadowed by this issue and russia, but we were supposed to be hearing about how he was going to unravel some of his business interests to try to rid himself of the conflict of interest that may or may not present themselves. what do you think you would want to hear from him on those issues? >> i think what you really want to hear is that -- what he has already said. he's going to pull himself out of these businesses. he's not going to be involved in any day-to-day decisions. he's not even going to be involved in strategic decisions in where his business is headed. sure, it's going to continue to be a family business, but he is not going to be involved in any way with the business, in understanding or trying to

direct where it is going short, medium, or long-term. he's focused on being president of the united states. >> okay. congressman, we'll of course hear from the president-elect in just a little bit. we appreciate your time and of course your perspective. thank you. hope to talk to you again soon. in the meantime, when we return, we're going to introduce you to our newest staff member. let's just say she's way smarter than any of us around here. >> speak for yourself. >> at least most of the time, joseph. in the meantime, check out the futures. dow looks like it would open about 9 1/2 higher. s&p 500 is looking to open down. "squawk" returns in a moment. pi?

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welcome back to "squawk box" this morning. we have a new member of the "squawk box" crew we want to introduce you to. it is our very own amazon echo dot. it can do some pretty cool things. we're call her alexa because we know her that way. but i shouldn't have done that, alexa, because her light just went on. she can do things. she can actually answer stock questions, fact check, and do much more. we could use some fact checking sometimes. we're hoping she can help us when we need a second or third

opinion on topics or questions we may have. we also want to show you exactly how you can use these new ask cnbc skills, which are pretty cool. you can load echo at your home to do it for fast and pretty cool access right to cnbc market information. here's how it works on the stock stuff. then we can get to some of the dirtier questions i know that joseph is thinking. it's a complicated day. so here we go. alexa, ask cnbc how the markets are doing. >> she didn't go on. >> alexa, ask cnbc how the markets are doing. >> okay. here is a look at the u.s. markets. as of the market close, markets were mixed. the s&p 500 was at 2,268.9 points, unchanged -- >> alexa, stop. see, they don't even need us to do it anymore.

alexa, ask cnbc for the latest news. >> here's the top business news from cnbc. to go to the next story, say alexa, next. >> okay, alexa, stop. we can do the news ourselves. that's why "squawk box" is here. >> that's debatable. >> here's the question i have. we were talking about minivans earlier now that we have a party of five at home. alexa, what's the best rated minivan out there? >> i'm having trouble finding what's bought by just year. can i help you with something else? >> do you have any minivan that people would think is cool? is there anything that is -- just doesn't make you feel like awful about it? >> sorry, i'm having trouble accessing. >> yeah, i don't think there is one. >> let me try one more time. alexa, what is the best rated minivan? >> the top search result for

minivan is the fischer price minivan. >> it's a bargain, andrew. >> alexa, yes. >> would you like to buy it? >> alexa, yes. i have children. >> alexa, go away. stop. they actually try to make the oldsmobile silhouette cool. >> it is the cadillac of minivans. check this out. >> later he rents his own and takes it to the restaurant. there's no way it's cool. it's not happening. >> it's the coolest thing. >> get an suv. >> coming up, tom barrack. al

acmiatg. o-ki o esesupitwh? #1 dtor mmendeand,oh th wall street waits for a cue from trump, the president-elect holding the first news conference since the election. our special guest this hour, real estate mogul and chairman of trump's inaugural committee, tom barrack. rex tillerson on the hot seat. the former exxonmobil chief heading to capitol hill for his

confirmation hearing. all that, plus a bold call on the health care sector. value investor bill nygren is betting on the uncertain fate of obamacare. the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm joe kernen along with andrew ross sorkin and melissa lee. take a quick look at the futures. kind of a ragged session yesterday. not great. but today, they were rebounding more earlier. the dow was indicated up about 8 1/2. the s&p is now indicated down two. the nasdaq just off fractionally. treasury yields have been interesting to watch and really conflicting with some of the other data we're seeing.

instead of being up at 2.5, 2.6, 2.7, where people thought we would, yields have moderated. and oil prices also have -- maybe confirming a little bit of the -- i don't know whether it's perceived economic weakness or what with the ten-year, but crude hasn't been rallying much either. it's towards the low end of that 50 to 55 range. let's talk about some of the other top stories we're focusing on this morning. mortgage applications rising 5.8% in the latest week. the rebound coming as interest rates pull back from recent highs, but application volumes still 25% below year-ago levels. also, bitcoin falling below $800 for the first time in three weeks after china's central bank said it launched spot checks on major bitcoin exchanges. then of course the political news we've all been talking about, donald trump and moscow responding today to unverified reports that russia has compromising information about the president-elect. two u.s. officials told nbc news

that briefing materials prepared for trump including damaging allegations about his dealings with russia. the russian government dismissed the claims as a, quote, total hoax. meantime, president-elect trump tweeting, quote, russia has never tried to use leverage over me. i have nothing to do with russia. no deals, no loans, no nothing. we're going to be hearing from donald trump in just a little bit when he gives his press conference. >> speaking of which, let's talk more about that press conference and how these tweets set the table for that. j joining us on set, john harwood. what do you think? >> we originally thought this press conference that was supposed to take place in december was going to be about donald trump divesting himself of his interests in his business so he could be conflict free as president. also talking about jared kushner and his kids and how that related to their public policy duties. but this is now going to be dominated, i think, by this new report. the question that sort of hangs over it is, what is the effect

of this on the opening chapter of the trump presidency. you've had people like john mccain, who we saw from these reports, received the intelligence, passed it on to james comey personally, has called for a bipartisan select committee to investigate. if that happens, it has the potential for consuming the political oxygen of washington for some time and slowing down the substantive issues on the republican agenda. we'll have to see what president-elect trump says about these allegations beyond what he has said in his speech. >> there's another tweet i don't think we've mentioned yet. this is from @realdonaldtrump. intelligence agencies should never have allowed this fake now to, quote, leak, into the public. once last shot at me. are we living in nazi germany? >> yeah, i saw that. >> we haven't mentioned that yet on the air. that's the last one that we've seen. most up to date. >> right. and i think the situation is

that members of the intelligence community, though they have not verified these reports, take them seriously enough to include them, and i think getting this material from their point of view, getting this material out in the public domain is a way of ensuring that the information or that the questions are not buried. we just don't know where it goes from here. there's a lot of sensational material, personally salacious material. beyond the salacious stuff, there are the questions of whether or not people associated with donald trump's campaign and his organization, whether they, in fact, had communication with russian officials or representatives. because the one thing that the intel officials do feel confident about, that they feel they have verified, is that russia interfered in the election. then the question is was there contact. >> do you believe, though, that government officials are leaking this information? or the other piece of this

that's so interesting is other media organizations may have already had some of these documents. >> yes, and i don't know that has government officials -- remember, this document was prepared by a political research firm that was hired by opponents of donald trump, both republican and democrat. every time somebody runs for president, people do opposition research on him, sometimes using open-source public data and other times hiring people who do that research for them. this is the result of -- >> are you suggesting intelligence officials wanted this out? >> i don't know that for a fact, but i believe that they do. >> but they wanted this out in the same way that -- to protect themselves in the same way that comey wanted to get some of the hillary clinton stuff out to protect himself at one point? >> i'm sure it's discussed and explored. if you have the subject of allegations about to take power, i think they have some concern that the subject would not be

interested in pursuing those questions. but to your question, i have heard of these allegations for some time, okay. i did not possess the materials and would not have circulated the materials because it's so salacious. how can an individual reporter check out allegations like that. it's very difficult. and the intel community habit verified it. so i think the original source of the material was this political consulting firm that has put this around. but again, you know, john mccain had the information. he took it seriously enough to take it to the fbi director. the intel officials took it seriously enough to include it in the briefing materials for the president-elect. we're going to have a chance to hear directly from the

president-elect today. >> andrew, i thought the same thing about the weiner e-mails. shoot first, ask questions later. let's get this out, because comey felt like it's eight days to election. if it comes out and there is something, we have to do something now in the interest of doing it. i think it was similar. >> that's what i didn't know. >> thanks, john. let's get to our guest host, tom barrack, chairman of donald trump's inaugural committee. we just glossed over something i thought was interesting that john said. the hard core opposition research was being prepared by both democrats and republicans, which throws me back into the whole election season where, really, he was running against the world almost. running against republicans, the establishment, running against democrats, running against the media. so i just -- i thought it was weird the opposition research is coming from both sides. you don't know whether it's from the left or the right. >> he had 16 opponents. >> well, that too.

>> what i think is weird is that's history. the american people stepped in. we had a debate. we had unbelievable contested issues, and they decided on a president. and all the markets in the world that are empirical have applauded. financial markets are up. small businesses are hopeful. labor reports are getting better. at every instance of how you really vote with your feet, the world is starting to contain itself. even the lack of experience with this president-elect on a global basis is providing respect. not that president obama didn't have respect, but the dialogue became a little old and spoiled. so i just think it's time for everybody to get over it. you have a new president. you have two incredible celebrities. you have president obama, you have president trump. in this instant of transition,

we're still talking about dialogue of the past that's totally irrelevant. the fact that people would do research on each other in a vigorous campaign and other countries may be involved, well, come on. let's get a grip on life. of course. you have this president-elect who just wants to get to work. you have america who just wants to get to work. and you have a global community saying give me a taste. give me a texture of what this point of rue is going to be. i can tell you after being in washington for a month, i'm more hopeful than i've ever been. i have more faith in congress, actually on both sides. they're all hopeful. you see the dialogue going on now with these hearings, which is just a political pace. but i think the first four or five secretaries will get confirmed probably in the next week, which is a great thing. then it's time to get back to work for all of us. put this behind us. look at the future. say, how do we bring in the constituencies that were not behind this president, and he's

focused on that. he's focused on that as much as he is fulfilling the promises he had. how do you convert the never trump to forever trump. >> so you're absolutely convinced there's no voracity whatsoever to this latest report? you know how the media gets its teeth into something. it's going to have to be vetted to where it's laid to rest. the press conference today, i'm sure this is going to come up. i've seen what the president-elect has tweeted. i assume that's going to be similar to the responses he gives at the press conference. as far as you're concerned, this will just be put to rest and we'll move on. >> here's what i'm certain of. the man himself had nothing to do with any of it. he's not focused on it. he had no contacts there. it's not his world. it's not what he was interested in. it had no bearing on him personally. what goes on around it -- and the intelligence community is just intelligence. it's not that these people are bad people or that somebody is

proffering wrong information. it's information that somebody has to analyze. as we're all saying now in this bad news venue, it's great when we have professionals like you that can vet information and test it on all sides. >> so should the president-elect not let that govern the tone of the press conference today? >> that would be my advice. >> it's governing the tone of all the tweets coming out of his twitter account this morning. >> because you have a man who does it now. he's acting as a very responsible individual and saying i'm going to take what's coming at me head on. my advice to him would be blow through it. it's irrelevant. let's get back to running the country. let's get back to giving the world -- the world is in such a terrible situation. every world leader -- and i can tell you just from the inauguration. the interest in foreign leadership and trying to find a bridge, trying to find a texture, not only to this man but the other 535 people that are going to be vetting foreign policy, nobody has a clue. so let him get back to work. take a look at the first hundred days then judge him.

we're judging somebody a week before he's taking office. it's insane. >> what do you think we're going to hear from the president today around his business, the conflicts, and can you speak actually to "the new york times" piece over the weekend around jared kushner and his communications with the chinese and whether that was appropriate? >> sure. so first of all, i've known jared for almost a decade. this kid is out of central casting. he's bright. he's intelligent. he's ethically as solid as anything you can imagine. the couple together, ivanka and he, are out of camelot. they're workaholics. his business interests with anbang and everybody else are decade-long interests. so what he and his family have done, if you look at the buildings which they own and these allegations of anbang, which is one of the largest chinese conglomerates, these discussions started over a year or two years ago. vetting a capital structure for

the long-term ownership of what the family owned is they had discussions with all of these n entitie entities. the coincidence of these kind of discussions is coincidence and had nothing to do with the influence or influence peddling, but it's an indication of what happens with implication of propriety. i'm 1,000% convinced there was no impropriety. he doesn't deal that way. the family doesn't deal that way. it never would have happened. he's had long-term relationships with the chinese. >> do you think he looks back at those meetings that were reported on and says, you know what, i wish i hadn't had those particular meetings, the more recent meetings, and going forward i will not have any meetings like that? >> well, look, you need to ask him, but i'm sure that every experience builds on another and that the environment he's dealing in now is so sensitive that every move that he takes is going to be examined exactly with that scrutiny. i think he's of the quality and

ethics and intellect to say i'm going to eliminate the perception of impropriety around me. >> i do think it's interesting that when jared kushner's appointment was announced, you had someone like bill de blasio, the mayor of new york, coming out and saying he felt reassured about jared kushner being part of the administration. as tom was indicating, there's a demeanor and sensibility about kushner that some people from the outside who might not otherwise like the trump team do like. >> i've known jared for a very long time. i agree with that assessment. i haven't talked to jared about this. i imagine he wouldn't want to -- he doesn't like the perception, even the question to be asked, and will probably try to take steps to avoid those in the future. >> sure. i think he's signaled he intends to do that. the president-elect said they would be discussing that at the news conference today. the only question is, is there

going to be the bandwidth to cover all of that issue when there's so much attention to these allegations involving russia. >> great. tom, pleasure to have you for the next -- we don't have an hour left, but 45 minutes left. it will be great to have you here. >> thanks. >> stay close. we'll continue this big hour ahead. john, thank you for your help this morning. coming up next, bill nygren is making a bet on health care. we're going to tell you which stocks he's picking. plus, a busy day on capitol hill as well. confirmation hearings for trump's cabinet picks continues. senator gary peters will join us to talk about that. then we'll talk to saad senator john thune at 8:40 a.m. stay tuned. you're watching "squawk box" here on cnbc, live from the nasdaq market site in times square.

coming up, the health care play fund manager bill nygren will tell us why he's betting on that sector in 2017. he'll join us next.

stay tuned. "squawk box" on cnbc will be right back. t ief thic s.

the repeal of obamacare might mean trouble for health care stocks, particularly hospital operators,.

at least one fund manager is getting into the space. joining us now, bill nygren, portfolio manager at oak mark portfolio fund. bill, congratulations on the outperformance. i want to start out with the biggest new purchase in the quarter. that is hca. you're thinking that the aca will not only be repealed but it will be replaced. >> well, i think the market is acting as if there could be a repeal of the aca with no replacement. we'd had almost no investment in health care prior to the election. our big position has been in financials. post-election, the financials have done so well and the health care names haven't participated in the rally at all that we've gotten our toes back in the water. if the aca is not repealed but is tweaked instead, you're looking at a stock that's selling at under ten times next year's earnings, which we think

is a pretty good value in this market. >> there's still a danger in the tweaking of it, right? the devil's in the detail when is it comes to any of this. there's one analyst on the street who's been very outspoken on health care. i'm sure you know her work. she's saying that medicaid block grant, a shift to medicare privatization are far more dangerous to hospitals than the loss of aca. how does that play into your thesis on hca? if that happens, what do you think happens to the stock? >> we think hca is one of the best positioned of the hospital operators because of their geographic concentration. it puts them in a much better negotiating position than the hospital chains that are sped out and don't have density in any specific market. at the end of the day, we expect hospitals will get paid a fair price for the services they provide. >> health care certainly has sort of perked up in 2017, bill. the other big purchase in the quarter was baxter. is this also on the notion that

part of the aca was this device tax, medical device tax, that that will go away. >> well, with baxter, we're looking at a company that we think is about fairly valued on consensus numbers, which are something like 18, 19 times next year's earnings. but we really like the management team that has taken over at baxter. we have prior experience with them. they did an excellent job of increasing margins. the big question with baxter is do their margins deserve to be as much below the comparables as they currently are. we don't think they should be. we think they'll succeed at increasing margins and beating earnings estimates over the next few years. an o >> an old holding is alphabet, formerly known as google. it's underperformed the nasdaq in the past 12 months. what do you think the catalyst is finally? we have seen a real perking up in terms of the tech space in 2017 so far. facebook, amazon, netflix.

not so much google. >> well, at oak mark, we're never trying to predict what the catalyst is, but we're looking at we believe intrinsic value is. a company like google that's expected to earn i think it's about $38 next year, sells at about 800, it doesn't look super cheap on those numbers. but in that $38, you've got $4 or $5 a share of losses for their other bets. so the search business is earning more like 43. you've got about $130 of cash that's not earning much of anything. and you've got youtube, where they're investing really heavily so they can grow by something like 40% a year. we really like to purchase companies where we get these assets that aren't earning much today that other investors aren't paying for and our expectation is that management will find a way to monetize those. >> bill, great speaking with you. thanks for joining us today. >> thank you. >> bill nygren. coming up when we return,

hearings on the hill and trump meetin meets the media. a busy day for the new administration. first up, democratic senator gary peters is going to join us. later, republican senator john thune will be with us. "squawk" returns with all that in just a moment.

good morning and welcome to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. among the stories front and center, j.m. smucker has announced price hikes. the hike averages around 7%. drugstore giant walgreens teaming up with fedex, planning to offer fedex pickups and dropoffs at thousands of locations across the u.s. shares of supermarket operator super valu under pressure this morning. results were hurt by a highly competitive pricing environment in the supermarket industry. okay. our guest host it morning is tom

bar barrack, chairman of donald trump's inaugural committee. getting ready for the big day next friday. we'll all be there to cover the big event. in the meantime, you spent a lot of time in washington talking to all sorts of people. i'm curious, and it may not be in your interest to say, but to the extent you think the trump administration will have a challenge, whether it be on tax policy, obamacare, or revising obamacare, whatever it is, what do you see as the one thing that you worry about to the extent you worry about any of these things in terms of getting over a hump, there's going to be a fight on? >> i think just the plumbing of the process of consensus. you have a congress that's ready to do something. even on the democratic side. everybody's hopeful and logical. so if you take the first hundred days and say, we've got foreign policy, which is going to take a little bit longer, and i think there's a huge opportunity there, but the first hundred days it to do the things he said he was going to do. so start with the economy. start with taxation.

start with deregulation. start with jobs. start with immigration. and all those things are ready to go, but there's two roads. so on taxation, for instance, if you're revenue neutral, you could get something done quickly because you have 52 votes in the senate. if you're not revenue neutral, then you have a problem. so if everybody dillydallies too much, if you get past this window of a hundred days -- and remember, this president-elect is the most detailed individual on a business basis or administrative basis that i've ever seen. but the resource base of what he had legislatively is new. so the vice president-elect pence is a perfect partner in this legislative cadence. so they need to come together. they need to take the internal domestic issues and nail them in the first hundred days. that will give them a runway on the foreign policy and things. >> you talk about the taxation, but you also mentioned

immigration. then there's obamacare, which he also has pledged to repeal. do you think he's able to do all three in the first hundred days? do you think one or two of them upends the other? which is to say, if he cares about the economy most, is he going to go after taxes. there's a few he'll put immigration to the side temporarily to try to get the tax piece over the hump because the immigration issue is so polarizing for so many. >> that's the typical legislative response, right. put it all in a barrel, let something drip out, and leave everything else there. it's not his attitude. he's going to go after it all. i think the opportunity is it's got to be comprehensive. immigration will be iterative. it will be baby steps towards where he wants to go. but you get that moving. and i think -- honestly, in the last two months, i have more faith in congress than i've ever had.

they're all good people, even on the democratic side. everybody's ready to do something, but it's so complicated. so i actually think on the domestic front, he'll get it done. on the foreign policy side, he has an opportunity that nobody's had. so he could do what ronald reagan did. he could do in the middle east what ronald reagan and maggie thatcher did to bring down the wall. everybody's ready. the foreign leaders are ready. they haven't had anybody to talk to. >> we're putting up a wall, not bringing down a wall. that's the only difference. >> as a businessman, and i know there's some debate even within the administration itself, the border adjustment tax. where do you personally land on that topic? >> look, to go from a worldwide tax to a territorial tax is a departure, right. it benefits the local manufacturers. so for your viewership, the difference is that you're going to a tax system which benefits local manufacturers and is a deterrent to foreign manufacturers, and it's on a gross basis. so retailers go wild because

it's very complicated. so walmart and all of the other stores will not like it. it's a temporary basis. in other words, if you look at it and said it's not a 20% spread, it's a 10% spread, you can swallow it. so for a while, you're getting parody. again, i think you have to be revenue neutral. you have to create a trillion dollars in value some place to get rid of a trillion dollars. that's one way of doing it. i think you'll see a compromise on the personal income tax rate, the corporate income tax rate, the repatriation rate tied to an investment tax credit, and that border tax instead of a 20% bogey, maybe 10%. >> okay. always a question about what revenue neutral means with dynamic scoring, but that's a debate for another day. you're sticking around. i know we're going to continue this conversation. >> it is a busy week on capitol hill. the president's cabinet nominees face questions at confirmation hearings. our next guest will be sitting in on four of those hearings,

including one for commerce secretary nominee wilbur ross. joining us now, u.s. senator gary peters. senator, were you at any of the hearings yesterday? which ones? >> we had general kelly. i sit on the homeland security committee. we had his hearing yesterday. >> how'd that go? >> it went very well. we had an opportunity to explore issues related to homeland security, which means cybersecurity. it means immigration policy. it also means issues related to the muslim community in my state of michigan as well. >> were you brought up to speed on jeff sessions' hearing? have you worked with senator sessions? do you know him? are you friendly with him? >> oh, he is a colleague of mine. i certainly try to work with every colleague of mine here in the senate. >> how did you hear that went? i thought he was really prepared and maybe i like at it through a different prism, but i don't know. i don't know how many times the racist card works.

what did you hear from your colleagues? how did they think it went? did he do well or not? >> i've been focused on both that hearing, we have the department of transportation today. we have mr. ross coming up, who just recently, as you know, was deferred because of some ethics paperwork. i haven't had a chance to have those kinds of conversations. certainly i think there are some real issues with mr. sessions based on his votes that he's had here isn't the senate. his opposition to some major reforms, the voting rights act, for example. i think everybody should have the ability to have a vote, to make sure that their voice is heard. those are real substantive issues. it's not about the performance at a particular hearing. it's about where he's been and people are very concerned will he be an attorney general for everybody. i think that's the expectation of everybody in the country. >> a lot of light was shed on that yesterday. he was actually -- i think the plaintiff and the defendant on the voting rights.

i don't know. if you look at the details of what was going on, i think he was trying for what most people would think to be the outcome that you -- i don't know. i think it's been distorted to some extent. so every year there's a pool on what's going to get through and what's not. we just showed all the nominees. if you had to pick one or two you think are most problematic in your view from where you're sitting, who do you think they would be? >> as you know, you just need a majority voted to get one through. >> that's the thing. >> republicans have had 52 votes. you'd need all the democrats united against and three republicans. i think the one that is most troublesome and one that will probably have the most difficult time, and that's related to the whole issue of what we're seeing with the russian hacking, the russian interference into the election, new allegations that have come out just in the last 24 hours of even more involvement of the russians in the american political process, plus we know the russians are active in the cyberspace on a

daily basis, constantly attacking various institutions here in the united states. so you have a secretary of state nominee, mr. tillerson, who has strong ties to russia, financial ties through the oil industry, has shown opposition to some of the sanctions that were put against the russians as a result of their illegal annexation of crimea and of some of their activities in ukraine. so we have two republicans, as you know, who have been very outspoken against him. if there's a third, that could very well sink his nomination. >> and then runner-up, scott pruitt or who else? >> well, certainly scott pruitt is an example of that. >> i don't want to give you any ideas. just trying to read you. >> i get that. i want to say we've got to let these hearings work their process out. we have to have a full hearing. it's hard to speculate as to where that may be. the american people need to see that. that's what this process is all

about. that's why i'm pleased some of our chairman, in fact senator thune, who i think is on after me, delayed wilbur ross' nomination hearing just to make sure that the ethics disclosures are being made. that's very important. we have to be able to look at those documents, and if there are questions ask those questions in an open forum the american people can see. i say let's let this process work out the way it's supposed to work out. that kind of transparency build faith and confidence in the american system. >> senator, been a pleasure. did you mention anything to hillary clinton maybe to visit your state, instead of texas or something? was that an idea? what was your reaction when michigan went that way? are you still trying to figure that out? >> well, it was close, as you know. i always knew it would be close in michigan. michigan is not a blue state. all our state holders are

republican. >> been a while in the presidential race. >> it has been a while, but it does show you there's a lot of swing voters in michigan. we certainly would have liked to have seen her more. >> you should have had her out there. >> absolutely. >> should have begged her. anyway, appreciate your time. thank you. >> thank you. as the senator mentioned, we'll hear from senator john thune on today's hearings, tax reform, and the race to repeal and replace. stay tuned. you're watching "squawk box" on cnbc.

welcome back to "squawk box." inauguration day a week away and republicans prepares to deliver a new elective agenda, senator john thune of south dakota joins us. he's chair of the senate commerce committee. he's going to be leading hearings for wilbur ross and elaine chow. good morning to you. >> good morning. how are you? >> great, thank you. help us with this. it has been the headline we've seen the last 24 hours around the wilbur ross hearing. it sounds like it has been delayed. can you explain exactly why. >> our precedent at the commerce committee is to have all the paperwork and the application process completed before we move forward with the hearing. some of that paperwork didn't in yet. it's rolling in by the day. we expect to have it here soon. that's why we pushed it into next week. it's rescheduled now for wednesday of next week. we expect everything to proceed according to schedule. part of it is there's just such

a volume of paperwork associated with these positions that people have to comply with. when you're someone like wilbur ross who has extensive holdings, it takes a good amount of time to get through it. that's simply the reason for the delay. we expect to move forward in a timely way next week. >> there has been finger pointing. i'm not subjecting you need to finger point. but blame has been put on the trump transition team on one end, and others say the ethics committee doesn't have the resources to get through this, given the type of documents and documentation some of these nominees have. >> there's no question that the office of government ethics is i'm sure being hit with a deluge of paperwork, but that's what they do. we hope they can process it as quickly as possible. i do think in some cases where you have nominees like we have with the trump administration, people who have had a lot of success in the private sector, they've got a lot of stuff to sort through. look at conflicts and those sorts of things, which is typically what's done in these

circumstances. so i think it'll move forward, like i said. it's a lot to get through in a short amount of time, but we want to make sure we're doing everything we can to see when president-elect trump takes office next week, he has as much of his team on hand as is humanly possible. >> the general expectation is that both chow and wilbur ross will be confirmed. are there -- is there a tough question out there that you have for either of them? >> well, i think with respect to elaine chow, because she's had such an extensive background and experience in government and been through so many background checks, a lot of this will be more about her vision, her philosophy for the agency, how she sees issues like infrastructure, aviation, roads. i expect she'll get some tough questions from members on both sides. with ross probably more so. because he doesn't come from government and has a lot of involvement, engagement around the world in business dealings,

i think those are the things that we'll probably look into and ask some hard questions about. i don't think there's anything in here, like you said, andrew, there's no deal breakers here. my assumption is these folks will eventually get through that process and get confirmed. >> before we let you go, there have been a number of democratic senators -- i wrote a column about this, so you probably know where i land on this topic. elizabeth warren and some others have suggested that nominees or appointees of donald trump's or anybody's shouldn't be able to get this tax deferral on the sales of their assets that come with trying to comply with some of these ethics policies. they want to limit it to a million dollars of capital gains. where do you stand on that issue? >> i think that what we want to make sure we're doing is everybody is treated fairly. we process through the commerce committee penny pritzger. she had extensive holdings. i suspect that's will happen with bill wur ross and with others. but as long as the laws apply

fairly to everybody who enters into these positions, i'm fine with that. if you want to change the law, that's another issue. >> okay. senator, we appreciate it. we wish you luck with the hearings. >> thanks. appreciate it, andrew. >> slipping, aren't we? i'm slipping a little bit. i totally spaced on the whole penny pritzger debate we had when that happened. totally spaced on it. >> i don't think we had one. >> no? >> no. >> that's weird. i'm totally spaced. i don't remember -- i don't know. it's me. i'm slipping. doesn't that happen with age, tom? >> you're not there yet. this is a simple issue. if you make it more punitive for people who have proven success in whatever industry -- >> no, i think -- by the way, i'm on record. i think the attention deferral process is completely fine. i'm on the opposite end of elizabeth warren and some of the democratic senators.

>> spend end me that column youe on the time on penny. >> on penny? i didn't write that. but i wrote yesterday's column. >> where can i find something on this debate? she's a billionaire. where can i find something? >> anyway, when we return, jim cramer joins us live from the new york stock exchange. his take on today's top stories. and later this morning, do not miss president-elect trump's news conference. you can watch it here on cnbc. it starts 11:00 a.m. eastern time. stay tuned.

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♪ hi. >> you're skinny. i'm very envious. let's get down to the new york stock exchange. jim cramer joins us now. andrew's very -- in very good shape. very sfelt, jim. we got to work a little harder, don't we? but we're wise. we've got that going for us on the other hand. i didn't hear -- >> we couldn't hear you there. >> i think we have a mike problem. >> oh, there we go. >> oh, there you go. so, jim, i don't know, the elusive upside. we got a lot early and now we

are sort of turning around here. i don't know whether it's the ten-year or oil or the dollar. what is it now? >> look, i think there's resistance. and i think resistance as tom barack was talking about can delay things. but yesterday you had a great interview with a biotech ceo. and one of the things that led the market yesterday was biotech. you know what, joe, i am never negative, really negative when i see biotech lead us because what that says is innovation, drug, not worry about pricing, it's just a new group to take us out in front for the nasdaq. i like this rotation. i think it gives us fire power. >> that's a good way of looking at it. we do have a few other things going on in the world, too, jim, as the backdrop. that will start. we got the hundred days. so it's going to be fun though, jim, it's going to be interesting for us. >> why don't we leave it like that, which says we can be positive and we can be negative because it is going to be wild. and wild is good for us. >> and you saw robert shiller.

robert shiller no surprise he didn't vote for trump, but he's watching what's happening going this is guy is like inspirational. he had to at least concede that much. i mean, like the rallies, that can conjure up some animal spirits which can be self-fulfilling. >> i thought that small business index yesterday was the shocker. >> isn't it? >> that's talking about reagan. people say, listen, i got to go open a store, i got to do a business. >> 1980. >> can't overlook that even though it's something we never look at. >> right. >> let's keep it in mind. >> the imperirical measures. latered to, don't miss a big lineup on "fast money." unbelievable show led by melissa lee and the team are celebrating their tenth anniversary. wow. time flies. time flies when you're having fun. congratulations. vice ceo shane smith cant tor fitzgerald ceo, "squawk on the street" will be right back. y ng ctopntt do.keetw

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d i rkitmato♪♪tweknaon imaerthak intogegeny futurdon'pawi a fnavisegogornmg onma welcome back to "squawk box." our guest host all morning, founder and executive chairman at cowen capital and most importantly these days chairman

of donald trump's inaugural committee. big inauguration going down next friday. we're going to be there to cover it. give us a little glimpse of what it's going to be. tell us what this even means, i read it's going to be, quote, softly sensual. >> the softly sensual is the monuments, right? so if you think about it, the two biggest celebrities in the world at the moment are president-elect trump and president obama. and this peaceful transition of partisan power, right, this moment sitting on a podium in the capitol with the washington monoyum, lincoln, jefferson all going down the mall with the war memorials and monuments, i just encourage people to come and participate. it's not about the man. it's not about politics. it's about celebrating a democracy in america. and i promise you when you're standing there at that moment and that peaceful transition of power transpires in five seconds with a hand on the bible and you

read some of the transcriptions from our great founders in the past who anticipated this change in adaptability that were not challenged ever from the outside, we're only challenged from the inside. it's an opportunity to unite, to inhale what's around you in those monuments and memorials, to reflect a little bit on those enscriptio inscriptions and say god bless america, that we have the opportunity to complain, we have the opportunity to protest, that we have the opportunity to be inclusive and thank you for both of these great men who are taking this opportunity -- >> they're traveling together that morning. >> absolutely. they have coffee and tea together. and they proceed to capitol hill. >> you moved me, man. did he move you? >> the clintons will be coming down. >> absolutely. >> you're right with that as the backdrop, it's unbelievable. like nowhere else. >> amazing. and the clintons, i mean elegantly, right? it's a moment to put all of this behind us and celebrate why we're able to have the dialogue

that all of you are leading us in. so i encourage everybody to show up, which is the key to life, right? >> right. >> and it will be a great week. thank you. >> tom, thank you. >> thanks for being here. we appreciate it. >> see you next friday. >> thanks. >> seriously, i felt a little there. make sure you join us tomorrow. thank you, melissa. i think becky's back. >> becky's back. there's a tease. >> are you cheering for becky? >> for becky. >> "squawk on the street" coming up next. a pivotal morning, the trump presidency nine days away, the president-elect set to hold his first news conference since july. rex tillerson's confirmation hearing to become secretary of state about to get underway on capitol hill. good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. stocks will have a lot to digest over the next few hours. premarkets steady, downgrades of exxon and at&t. yields are not