live from new york where business never sleeps, this is "squawk box." >> good morning. welcome to "squawk box" on cnbc, live from the nasdaq market site in times square, i'm becky quick, with andrew ross sorkin and steve liesman who is in for joe today. you can see right now, some green arrows. dow futures look up about 21 points above fair value, this after the markets were down yesterday off the lows of the session. s&p 500 futures up by 2 1/2 points, the nasdaq futures up by 6 1/2 points. overnight in asia, market there's ended mix with the japan nikkei up 0.8%. in china, markets were mixed. the hang seng was up by a half percentage point.

looking at early trading in european equities, in the green. the dax up by 0.6%. cac up by 0.9%. let's check out the energy markets. yesterday energy markets traded higher. once again as it looked like demand in china might be pushing higher. some of the opec nations looked like they might be cutting back as they said they would be doing. this morning, wti down about 1%. steve? >> here are the big stories today. janet yellen says she is upbeat about the short-term economic outlook. speaking to a group of educators in washington late yesterday, janet yellen said the labor market is looking strong, but the central bank chief is worried about longer-term issues like growing income inequality and weak growth in labor productivity. >> it's the busiest day of the week for economic data, retail sales out at 8:30 a.m. eastern. this is the important december retail sales number.

at 8:30, the december producer price index. at 10:00 a.m., january consumer sentiment and november business invento inventories. and earnings, reports from blackrock, jpmorgan, wells fargo. and larry fink will join us at 7:00 a.m. eastern. on today's political docket, just one week to go until president-elect trump is inaugurated. no cabinet confirmation hearings today. they'll resume tuesday. that follows monday's martin luther king jr. holiday. trump tweeted moments ago, all of my cabinet nominees are looking good and doing a great job. i want them to be themselves and express their own thoughts, not mine. >> as he disagrees with -- as they disagree with him on everything. >> but the "journal" this morning, their op-ed says that is a good thing. it tells americans there are serious people in charge.

the "journal" takes comfort in that. >> this tweet is something that you might have expected given what we heard through the hearings the last couple of days. he's saying it's okay. it's okay they disagree with me. >> i think they'll get through. we've been watching these things. there were some blows landed by the democrats, sort of interesting. i think we could talk long and at length about the whole issue of russia. >> and we will. >> and how much that matters. we'll talk about that. i have one more thing to read here on capitol hill. the house plans to vote on a measure that would dismantling obamacare that will set the repeal process into motion. >> yes. our guest host this hour is joe t terranova. >> yesterday the narrative about the markets was disappointment in president-elect trump's press conference yesterday.

he didn't deliver upon the expectations that the market might have had in terms of what regulations might be removed, what will the tax reform look like? i think investors and money managers need to get comfortable with the fact that over the next four years you're going to have rhetoric from the president, but most importantly as it relates to the markets, we want to hear what his cabinet members, his economic team is saying. i think ultimately that will matter more what is gary cohen and steve mnuchin saying. >> i get they have to ask about rus russia, but the big stories are the tax stories. there's a single reason donald trump was elected, it has to do with the economy. the fact there were only one or two questions about the economy, donald trump needs to call in and talk to us about the economic plans.

they'll wait for the con if i makes to get steve mnuchin in and wilbur ross, but a lot of questions to me -- i watch a lot of science documentaries, it's like early planetary development. things are spinning in weird orbits. who is on what side of what issue? we don't know that. business wants that certainty. >> can we introduce dan lipman here from politico. >> good morning. >> since we're off the script at this point. >> and joe's idol. >> we should do the whole thing. the thing i can't figure out. i would think the market and other politicians in washington want to hear united front. i don't get the idea that people

have a hundred different opinions and that's okay. >> i think business leaders and people around the world will wonder who is in charge here. is this a team of rivals or everyone playing on their own team, kicking the soccer ball. we won't know which policies are front and center -- who is making the decisions. >> we have not even seen trump inaugurated. it's very early days. things are moving faster than in previous and trump administrations. >> what is important is next friday. >> on your view on the markets, everybody is happy as long as there's adults in the room. steve mnuchin came on this program and told us and they're going to have a tax plan at a corporate rate of 15%. if you're a wealthy person, you will be paying more and not less. >> correct. >> i will assure you in advance,

if you talk to people on the trump team, 15% they know is not a reality, and it will be between 20% and 25%. >> okay. >> wealthy people will pay less in tacks, not more for the most part. >> andrew, that's why the market has paused here. i think there was an initial optimism, now things have come down to reality. >> a pause for one day. >> the market got a bonus when hillary clinton was not elected. the bonus was hillary clinton was planning to raise taxes. that was definitely going to happen. that went away. that's an immediate boost. i think there was a lot of optimism, joe, and i think some of it was well placed. i think what andrew is saying makes sense. 15 won't happen. 25 is probably realistic. >> i can tell you how trump will argue this away. he'll say the same thing he said about tariffs, it's an opening

negotiation. it's not entirely up to us. we have to get it through congress. >> where the capital markets were in the cycle back in october and november, any wethe in need of fiscal policy. we have elected a president and an administration that has put forth initiatives that suggest you will get that fiscal policy. ultimately it comes down to one thing, can you get to 3.5%? >> gdp. >> yes. you and i might disagree on how to get there, ultimately that's how we will judge this. i think the administration has been clear in the message, this is about jobs, this is about the economy. everyone walking to trump tower right now, it's an economic conversation. >> but also hesitation among koe corporate executives, and lobbyists, everyone time trump

mentions a company or industry, they get pinged by their clients, is he coming after us next? from the white house podium when he takes over next week, going forward and for the next couple years, just saying one sentence or tweeting one bad thing against a company, that is also creating some uncertainty. >> do you believe that all the appointees make it through the confirmation hearings? mnuchin seems like he has been stalled. >> probably not until february. >> the most vulnerable cabinet appointees is posner and rex tillerson. >> you think he's vulnerable? >> if a bunch of republicans flee. >> what is rubio's game? was he trying to -- is he already running for president again? >> 2020 or 2024. >> he was out there on tillerson. >> i think he wanted to inject

himself into the headlines, and also he feels like it was a ready shot that he could take. and that tillerson was weak on the russian stuff with his business dealings. i think mitch mcconnell will work hard to make sure a person who is the secretary of state po se potentially, that he does not get defeated. >> as the co-author of the politico playbook every morning, can you tell us what the rules are inside the white house? vis-a-vis this l.l. bean endorsement issue? >> you're completely taking the thunder away. >> i'm sorry. >> go for it. >> i want to understand what the actual roles are. >> for those who don't know, donald trump tweeted out buy l.l. bean because one of the family members supported him very early on, as a result there's another group now telling consumers to try to

boycott. >> i don't want to go on that ll bean founder's website and buy those lobsters that you can ship. but i think the rule is, actually, which was put into place by obama, you can't endorse specific companies or products, but trump could roll back the rule. he did not violate it yesterday. he's only president-elect. >> can he fire the head of the ethics office? yes, right? >> i think the senate and the house -- jason chaffetz is going after walter schaub, the governor of ethics guy because he thinks he has gone way anti-trump. >> in a previous world, if you gave out a comment like that, like the kind of comments he gave out, you would have a job for life. >> are we supposed to bring joe in on this? >> yeah. >> i want to start off where i began the week. in chicago, i watched ken griffin from citadel talk, he said you guys better get ready

for no major infrastructure spending and no major tax cuts, that all the pro growth stuff is coming from deregulation because also not enough money. deficit politics will constrain the stimulus from the trump administration. is that your view? >> it's a good question. first thing i'd say, we're bullish on earnings, bullish on corporate profits, here we are at the beginning of the reporting season, we can see two, three quarters worth of profits growth here without any stimulus, whether it's fiscal stimulus or tax cuts. there's enough momentum in year over year comps, and enough momentum in energy markets and things like that to get earnings, continuing to grow from here for the next couple quarters. after that, we do need something, whether it's on the fiscal stimulus side, whether it's through actual stimulus policies or tax cuts, but the reality is sometimes we overcomplicate things. sometimes you know the expression, it's chess not

checkers. i would reverse that and say it's checkers not chess. we have an economy doing well. profits that are rebounding. investor sentiment which is turning bullish towards equities. and we're discussing do we get fiscal stimulus, infrastructure pack canages packages, either one of those is very bullish. >> we are talking about gdp getting to 3.5%, but today we get the financials. they've been up 17% since trump was elected. five will be reporting today, including jpmorgan, blackrock, wells fargo. that should give us an idea of how positive these guys are on earnings guidance for the rest of this year. maybe that's the tipping point for a day like today. >> we should see pretty good earnings. we could see s&p 500 earnings up 8%, 10% this quarter. you might step back and say how can you be so bullish on a stock market when earnings are coming

up 8%, 10% a quarter. think about where we have come from. we've been in a massive earnings recession and only now sort of climbing our way back out above i it. >> joe, comment on the other joe's idea here, that it doesn't have to be everything. you don't need the whole proposal. you don't need the 50 -- if you get something, that's good enough. >> the interesting thing is, if you think about profit margins, which peaked in the third quarter of 2014, then the markets stalled out all of 2015. the s&p, there's a high correlation. the s&p did not advance again until this past july, that's when profit margins began to accelerate again. people are look at earnings, not really giving them enough respect in terms of momentum they have. you talked about financials. this is the moment of truth. >> right. it's on this -- on this day, friday the 13th. >> my thought is maybe -- i still believe the sentiment and

talking to money managers, they don't believe the move in financials. maybe it is friday the 13th, where we get the settlement above 20,000 for the dow on the back of some strong financial earnings. that might actually happen. but one thing that you mentioned that i think is important. you will hear financial earnings today. we'll talk about loan growth. cni lone growth completely stalling out in the quarter. why was that? because of the uncertainty about the election. it comes back to now we have an administration training coming in again, are we comfortable now? >> you have business confidence buildin building. >> coming back in and lending on infrastructure projects. that could -- while you hear negative news on that, longer term that could be a good thing. >> is this really the quarter that we're going to judge the banks in the sense that we're looking for the steepness of the yield curve, how long in the quarter -- >> we're talking about short-term -- >> i know that, but we're saying

we'll judge the banks. they have not had a steeper yield curve for very long. >> just the end of the quarter. >> if we're going to judge the banks, judge them in a full quart quarter. >> the three of you, andrew i know you know jamie dimon well. you have ever heard jamie dimon sound as optimistic as he has the last couple of weeks? you have larry fink on at 7:00. let's understand what he thinks going forward. >> i think you won't see that in the -- it's hard to imagine you will see that in these numbers. >> i agree with that. >> despite the ceo of delta on yesterday who claimed he saw it in his numbers. the real issue on the stocks for the bank so far is what people think will happen in the yield curve and what people think will happen to regulations. >> also on the institutional side. the massive underweight that people carried in financials for

years. >> i think what's interesting about ceos, if hillary clinton will won in november, you would not be seeing a parade of ceos come visiting her like you do with donald trump. that row assures chief executives that they'll have a voice, a guy. maybe he's not their first choice, but he'll do business with them. >> daniel, thank you. >> thank you. >> your first time on "squawk." >> hopefully first of many. >> co-author of politico's playbook. you'll be sticking around. you're taking off. >> yeah. >> thank you. >> okay. among the stories we're following today, since we bypassed the headlines, we had some new ones, shares of nintendo has fallen nearly 6% in japan. the company disappointing investors. the price of its new gaming control, the switch s going on sale in the u.s. for march 3rd. the price tag, 299.99.

but here's the issue. the same -- it has the same as its predecessor, the wii-u, it will cost about 20% more. it's the same product and coasts 20% more here. the switch is a hybrid machine that can be used as a home console or handheld device. analysts say the price is not justified this time around because there won't be enough games available, just eight games in total when the switch hits stores. look at shares of renault. they are down sharply in europe today. reports say that french prosecutors opened a probe into whether the automaker cheateded on emissions tests for diesel vehicles. sounds similar to the charges levied against volkswagen and fiat chrysler. fiat chrysler shares are rebounding in italy this morning a day after u.s. regulators accused the automaker for using software to cheat on emissions tests. the government did not go so far as to say this was a default

device but it sounds similar to what we heard from volkswagen. shares down sharply yesterday before recovering some ground after the ceo, sergio marchionne, called the allegations hogwash. he came out sharply, actually speaking to an italian newspaper today saying the epa's accusations will not have impact on fiat chrysler's business plans targets. he spoke on "power lunch" yesterday and has taken huge issue with the way this has been described. and i think he's trying to make sure his company is not carved out of the same sort of likeness as what happened with vw. it's interesting. not knowing what's happening and negotiations behind the scene, there's been negotiations for months on this you can understand why the epa might bring charges right before a flu administration comes in. we'll have to wait and see what's in the papers.

>> heard a big segment on that yesterday. i couldn't understand why they would have that software in there. fiat chrysler was defended, but i don't understand it. >> that's what i mean. we have to see the paperwork behind some of this stuff. coming up, ridesharing wars. leaked data shows just how much money lyft lost last year in its fight against uber for market share. details coming up next. ir

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download the xfinity tv app today. welcome back. we're in chairs looking at some of the stories that caught our attention this morning. one thing i saw this morning was lyft. you know lyft and uber and these highly valued companies had trouble figuring out how profitable they'll be or when they will turn a profit. some interesting news out from lyft. it's the second largest ridesharing service in the united states. it lost about $600 million last year. yeah. that was up from a loss of $360 million in 2015. get this, this is how they painted this. they said we did what we said. we promised we wouldn't lose more than $50 million a month and didn't. this is the positive spin on

things that cracked me up. we get it. still a new business, but we did what we told you, we didn't lose more than 50 million a month and we didn't. >> i would like to predict that uber and lyft will merge. >> there's not room for two? >> competitively they can. >> because of taxes? >> the reason why they're losing business and money -- >> i mean trade concerns? monopoly concerns? >> no the reason why they're losing money is because of competition. there's too much competition. there's a transfer of wealth going on from the investor class, the venture capitalists who have been subsidizing uber and lyft to the consumer for the past five years. >> to drive the taxis out of business. >> that's been the ultimate goal. they have not succeeded at that goal. if this was like the amazon model, which you lose money, lose money, lose money until you

can switch it on, that's one thing. this looks like less of a revolutionary model and more of a revolutionary model because we subsidized the taxis. that's why it's been successful because the price has come down. the reason the prices come down is not because technology is so much more efficient. >> but it's a better nicer service. >> but if i told you it cost $10 more per drive, how would you feel? >> not that good. there are times when i would pay the $10 more. >> you can't say we're only losing $50 million a month. i don't know if they will be allowed to merge. >> you had to believe they would not only take over the taxi business but doing the delivery for everything in the world. that's where it gets complicated. >> your story? >> snapchat preparing for its ipo. i'm getting the spectacles.

>> we got some. the girls have them. the girls have them. >> do they? is it fun? >> i haven't used them. >> i will snapchat next week. addressing one of the biggest knocks against its platform, that is that the app is too confusing to use. >> you know what that means? you're old. if you don't get snapchat, you're old. >> there's icons on the entire screen. >> anyone under the age of 20, it's easy to use. >> they will design a new search bar, some navigation, increase crowd sourcing of user videos. >> and make it easier for all of us to use which will make it much less cool and our kids won't want to use it. >> maybe. >> it's great for us. it's the reason facebook is not cool for the kids, because all of us are on it. >> but it's an inherent barrier to use the product when most people can't. >> do you want the cool factor or the easy to use factor?

i don't know that you can have both. i'm all in favor of it, i would like to have an easier time using snapchat, if i'm on it -- >> i'm not a snapchater. >> you use the -- >> i'm still trying to figure out instagram. plus i don't think my kids want me over there. leave a little space for them. when we come back, we'll talk about the cuban thought, president obama using a 20-year-old immigration policy a week before leaving office. michelle caruso-cabrera has that story and will be with us next.

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live from the nasdaq market site in times square. good morning. welcome back to "squawk box," live from the nasdaq market site in times square. u.s. equity futures at this hour, as we try to figure out if the trump rally is rolling on or has stalled. dow opening up about 16 points higher. s&p 500 up about 1.5 points. a quick look at european markets. green arrows across the board. doing well if you have some money in italy now. the ftse there, italian ftse up almost 1.5%. a look at the dollar, as concerns continue, at least in my mind, continue about the strength of the dollar and the challenges that may pose to some of the trump administration's plans. you're looking at euro/u.s. at 1.065. finally stocks to watch right now. we're also going to be keeping

an eye on stocks that may be coming out in a second. anadarko petroleum agreeing to sell its south texas and ooil as assets to sanchez. we have the first of the reporting in with blackrock's numbers out. blackrock has numbers of $5.14 a share, that is above expectations. expectations were $5.02 a share. and the board of directors appro approving a repurchase of 6 million shares. larry fink, chairman and ceo is making some comments, talking about while domestic equities rallied following the u.s. election, the combination of a strengthening dollar, underperforming equities and negative fixed income markets produced challenging outcomes for global investors.

i think he's talking about how so many investor s not only focus in the u.s., worry about u.s. markets, we'll hear from mr. fink himself at 7:00. you can see the shares right now, down 1.29. >> did you say revenue -- >> revenue was 2.89 billion. >> that's a little light. >> yes. >> maybe that's why it's off. >> the estimate was 2.93 billion. >> a lot of times blackrock doesn't trade instantly. >> this is not -- >> i would not pay attention to the trade here now. wait for a half hour. >> one metric i like is 98 billion in net inflows in the quarter. that's strong. that's good. >> is that a sign that the average investor is more involved here? are those inflows potentially -- >> you'll have larry on, i think it's specific to the solutions

that blackrock is presenting now, utilizing technology. >> etfs, ishares. >> said it is led by momentum in ishares. >> we've been trying to figure out if the average investor has gotten into the rally or not. we've been looking for different metrics. i wonder if that's one. >> he'll offer more color on that. i think this may be because of solutions in particular. just about a half hour. the obam madministration is ending a longstanding policy for cuban migrants. we have michelle caruso-cabrera here. no other reporter can do a better job. that's true. nobody better locally than you. >> thank you. i love praise. for decades cubans have had a vaunted status within immigration policy. it was true for cubans and nobody else in the world. if you got to the united states,

regardless of how you got here, you could get parolee status, a year later a green card and on your path to citizenship like that. for everybody else in the world, if you arrive here illegally, you are not allowed to apply. why did that happen? that was because of the cold war. >> good reason, because of bay of pigs and our fault -- >> lots of things. we wanted to say look at all these cubans escaping communism. and we are taking them in. >> also domestic politics playing in there. >> that changes in the mid '90s. the soviet union falls, cuba loses its lifeline. things become desperate there. roll the video. thousands and thousands and thousands of people started coming. they're incentivized to come by our policy. clinton changes the policy, it becomes wet foot/dry foot. before clinton people would be picked up by the coast guard and

brought to u.s. soil and welcomed. after clinton, they said we pick you up at sea, we send you back. you manage to get to land, the beach at florida, texas, dry foot, you're in. now all of that goes away. cubans no longer will have a special status as of last night. they also ended a program designed for doctors. cuba uses doctors as an export. they use their people as a product to send to venezuela and other parts of the world. so, to screw the cubans what we would do is say a doctor any war in the world, if you can get to a u.s. consulate, u.s. embassy, you're in. that ended last night as well. we actually have a team in havana, a bureau there, they spoke with cubans last night to see how they feel about it. this first woman says, everybody is incredibly sad, so many people are desperate.

this woman says, listen, you know, on the one hand it's sad. on the other hand it incentivized people to go out to sea and risk their lives. i have two sons there, i was trying to get there. so mixed emotions. >> what do you think? >> so i think the question now is, you know, the obama administration ends in aigeight days. will donald trump change this back? >> should he? >> i doubt he will do it. one, it does incentivize people to risk their lives. and cubans won't gently say this qulout lied, but cubans who arrived in the '60s and '70s are less welcoming of the cubans who have arrived recently. they see them differently. they lived under communism for so long. they are concerned about the work ethic. recent arrival cubans say when i lived in cuba i had to steal all the time to feed my family.

>> i need to understand more about this. there's a reason why this was done. it has to do -- this is a big complaint from the cuban government? they complained about this to the zurs what i read. >> yes. this is obama giving something to cuba. did we get anything in return? >> we have a migration accord. they agree to take people back. for a long time they wouldn't. you could argue that's something they gave us. but the longstanding complaint, one of the reasons why cubans in florida went from one supporting obama to no longer supporting him, hence the vote we saw down there in the election, they felt the obama administration did not get enough out of the cuban government. that's what i wuas wondering about. >> yes. when we come back, bank of america is set to report. we'll bring you those numbers as soon as they hit the tape. at the top of the hour,

blackrock chairman and ceo, larry fink, will join us on set to talk blackrock earnings. that company out with earnings of $5.14 versus the $5.02 the street was expecting. busy morning on twitter from the president-elect as well. the unaffordable care act will soon be history. that's just one of many things he's been tweeting. "squawk box" will be right back. $ bull b eere. $ fili- tell alwwh..whthe gns obe a lpou ftry and exs

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welcome back to "squawk box." some stocks to watch. pandora laying off around 7% of its u.s. work force. that could happen by the end of the fourth quarter. you look excited about this? >> i'm long pandora. >> you're excited they're laying people off? >> no. >> what are you excited about? >> the stock is 9% higher. the company said it ended 20106 with more than 350,000 new

subscrib subscriber. lowe's expected to cut less than 1% of its work force. the home improvement company changing its store staffing model, reshuffling roles and responsibilities of staff to boost face time with customers. december exports declining 6.1% in china year over year. imports rose by 3.1%. for full-year 2016, china posted the worst export declines since 2009. eunice yoon is right here on set with us to break this down. great to see you. >> great to be here. the chinese authorities, i thinthink sh think, are looking at 2017 thinking it will be a tougher year if trump follows through with pledges to slap china with tariffs. overnight the customs agency said they believe that foreign trade was going to be tougher for china to improve because of what they saw as an anti-globalization trend. they said that china is a victim

of this protectionism. china is bracing for a tougher year. and for a tougher go with donald tru trump, because as we've seen in the state press, it's been a barrage of criticism, warnings, borderline hysteria when it comes to hits economic choices. they called peter navorro blind and deaf when it comes to the trade benefits. they've been critical of wilbur ross and said that a week ago the global times was saying it saw an iron curtain of protectionism falling around china because kichina has been criticized. >> doesn't sound like a lot of room for negotiations. what are people saying around the edges? what could bring the two administrations together? >> what you see in the state press, the state press acts like an attack dog. they're much more aggressive in

what they say versus the foreign ministry or the commerce ministry. so, i'm sure there is going to be room in china and in the united states, room for this relationship to improve and continue. because this relationship is so important. where you see u.s. companies more and more relying on china as an important market. however, it is really difficult right now because of the comments that trump is making, having such a backlash, making such waves in china. we saw that overnight with rex tillerson. rex tillerson, as you guys know, very critical of china saying the u.s. should have a blockade and the chinese press went bananas overnight. you could read you some of the statements. such remarks are not worth taking seriously because they are a mishmash of short sightedness and unrealistic

political fantasies. saying he doesn't have the foreign policy chops to be able to know what he's talking about. and then the global times was even more aggressive, saying tillerson had better bone up on nuclear power strategies if he wants to force a big nuclear power to withdraw from its own territories. unless washington plans to wage a large-scale war in the china sea, any other approaches to prevented access to the islands will be foolish. foreign ministry made a comment saying much more -- much more low key, but what people need to understand about the south china sea, there's another dynamic going on. that's that president shi has been using nationalism and the south china sea as a point to rally and consolidate his own power. so he looks at the south china sea, saying this is ours, this is our sovereignty, so don't touch it. >> does our relationship with

china concern you in terms of volatility that may or may not ensue? we spend time talking about russia, middle east, but how about the market. >> absolutely it's a risk. it's more a political risk more than anything else. imports to china are 0.9%. so economically i'm not necessarily sure. there is that headline political risk. >> hold the thought for a second, because we have bank of america news crossing the wires. wilfred frost has that news. wilf? >> just the headline numbers. we got revenue in at 20.0 billion. that's a bit light on consensus expecting 20.6 billion. eps better than expected, 0$0.4,

40 cents a share. eps expected 38 arencents a sha. moynihan says this is what responsible growth is all about. he's applauding the eps growth at 15%, without the need for too much revenue growth. i'll dive down into the numbers and come back with more in a second. >> we'll continue that conversation on bank of america in a moment. also bank of america's ceo, brian moynihan, will join us in davos on tuesday morning. our davos coverage begins tuesday, 6:00 a.m. eastern time. we'll be doing shows there on tuesday morning, on wednesday morning. the wex crowd will be there the whom time, and then thursday we head off to d.c. for the inauguration. >> can i -- do we have time to ask eunice a question? are we just learning here that both sides can negotiate from extreme positions? do you think that ultimately the relationship between the u.s. and china is so he important

that all this crazy rhetoric out there, cooler heads prevail? >> i -- i think that it's really important. because if you look at china going out, where is all the business going to be for u.s. companies? it's not going to be in russia it's going to be in asia. so one point that people forget when they look at this relationship is just the longer-term trend of how important the market is in asia and china because consumers are getting wealthier. and they are demanding more authentic products. they wanted products well made. american products have a good reputation -- broadly in asia, but because there's so many counterfeiting issues and other issues, china -- chinese people are looking at american products. they have this really good reputation. to me, when i look forward, i think a lot of american companies will be selling into

the chinese market as opposed to always looking at the chinese as the manufacturers of all these different goods. the way chinese policy is going, it is to make the country much more independent. they wanted to its own consumer market. china wants to be able to build its own economy so that it's on par with the united states or at least if not on par then maybe bigger. it's just that it wants to build that sort of dynamic. is becomes more and more important for american companies to be able to position themselves and look at what are the growth opportunities for myself, even though there's all this political squabbling and banter right now. >> okay. >> thank you. >> you're sticking around. we have a lot more we're going to talk about. bank of america earnings in just a minute. and check out our lineup from davos. it keeps get egg better. ceos of at&t. we're going to talk to randall about the state of that merger. jamie dimon.

honeywell, ebay, blackstone. a lot of big conversations coming out of davos all next week. 'squawk" returns in just a moment.

welcome back to "squawk box." our guest host this hour has

been the senior managing director. we have a minute and a half left. i don't know -- you've been doing a lot of math over there. i want to know what you're doing. >> pnc is out. bank of american is out. looking at bank of america. looks like fixed income trading up 12%. a little light on what the expectations were. >> that going to carry the market lower today? >> i like the reaction. no, i like the reaction. this seems to be a yawn, which is probably good enough. you and i talked before about the market being sideways, but we're sideways at the top of the range. i think the expectation could be that we break out towards the upside, but coming back for a second, you know, the important thing with bank of america, 20 consecutive quarters of job cuts. the impact of technology on this economy is incredible. i don't know if we really are paying enough attention to it. you think of the rise in production, of oil in this country, it's all based on technology. so it has such a deflationary impact, i think we need to address the impact of

technology. we're talking about all these potential job -- you know, the job growth. on the other side, you have technology, which is so deflationa deflationary. >> joe, thank you for being here. >> thank you for having me. >> it's been great to see you. see you soon. >> great to spend some time with mr. terranova. coming up, the world's largests largest asset management group out with numbers. larry fink will join us on set. plus, the earnings parade continues. jpmorgan, wells fargo set to report around 8:00 a.m. eastern. keep watching "squawk box," up to the minute earnings news and analysis.

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blackrock chairman and ceo larry fink joins us for a special extended interview you cannot afford to miss. we'll talk quarterly results, his outlook for the economy, and what he's expecting from the trump administration. that interview is just seconds away. can putin be trusted? the leader of the pro-democracy russian political party joins us to talk about political relations with russia under a trump presidency. plus, moderator of "meet the press" chuck todd is going to join us as we head toward inauguration day, as the second hour of "squawk box" starts right now. live from the beating heart of business, new york city, this is "squawk box." good morning. welcome back to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. i'm andrew ross cover ssorkin ay

quick, along with steve liesman, hanging out for joe. right now, the dow would open 16 points higher. the s&p 500 close to a point higher. the ten-year, you're looking at 2.356%. if you're buying oil, buy the barrel. you can do it right now. wti crude at 52.44. steve? >> thanks, andrew. among today's top stories, a business morning for bank earnings, starting with bank of america. it earned 40 cents per share, 2 cents above estimates. revenue was on the light side. wilfred frost joining us with more on the numbers. >> thanks, steve. the shares are down a little on the back of these results. a decent set of numbers in terms of cost discipline and operating leverage. that eps slight beat coming before the real benefits of the interest rate hike have come in, in the fourth quarter earnings. this is the important line from the release from the cfo.

he says while the recent rise in interest rates came too late to impact fourth quarter results, we expect to see a significant increase in net interest income in the first quarter of 2017. positive forward outlook off the back of it. they've almost doubled planned repurchases for the first half of the year. in the core part of the business, which is a good 70% of bank of america earnings, this is actually a pretty decent set of numbers. now, trading, which i know joe terranova was just mentioning, that is disappointing, but it's a smaller part, only 15% for bank of american. trading was soft. it was plus 11%. we were expecting as much as plus 25% across the industry year on year. fixed income was up 12. we were expecting plus 30. equities up 7, plus 14 was the expectation. trading picture is poor. that doesn't bode well for some of the investment banks. but the core part of this business looking decent, particularly as i say on operating leverage, which is why the eps beat, even though the revenue didn't and that

forward-looking statement is encouraging. >> all right, wilfred. thanks very much. other headlines, google parent alphabet won't be beaming internet service from high-flying drones. the company has confirmed the project called titan has been shut down. they actually discontinued it a year ago but only just acknowledged it. were you following this project, andrew? beaming this stuff from drones? that's your kind of thing. >> i'm curious about it, but i don't know. >> i'll have to come back to that. i want to learn more. nintendo is pricing its new video game console at just under $300. the nintendo switch launches on march 3rd. the stock fell in japanese trading as the pricing came in higher than investors anticipated. let's get to our guest of this hour. the big guest we've been waiting for is asset manager at blackrock, reporting fourth quarter earnings this morning. we told you about those numbers. $5.14 a share, better than the street had been expecting at $5.02. revenue was just slightly shy of

forecast. blackrock also announcing a 9% dividend hike and additional share purchases. joining us now to talk about all of this is blackrock's chairman and ceo larry fink, who is with us for the next half hour. thank you so much for being here today. >> nice to be here. >> the number is a little better than the street was expecting, at least on the earnings. i guess what we really want to hear from you is your sense of what's been happening with the markets, what's been happening with investors. are they buying into this rally? >> well, let me first talk about the quarter. probably the most significant component of the quarter is our $98 billion in net flows. >> we talked about this earlier. joe terranova was pointing out he thinks this is a blackrock specific issue because of the products you manage. >> most public asset managers have reported negative flows for the quarter, and we had extraordinary positive flows, both in our etf business and

institutional business. probably the most important thing for the year, we actually raised over a billion dollars in 15 different countries. we had 53 different products that grew by a billion dollars. so the breadth of the platform was pretty extraordinary. joe is correct when he asserted the solution-based relationship that we're building. i would just say -- and getting to your question, more clients were pausing a good part of 2016, and in the fourth quarter we saw clients start putting money to work. i don't know if that's going to be a long-term trend, but more clients are looking towards blackrock to help them in diagnosing what they need to do going forward. probably the most significant thing that i think most media sources have missed, we spend so much time talking about the rally since election.

for the typical u.s. pension fund, it hasn't been so good because if you think about an asset allocation for most of our clients, they have a large allocation bond. since the election, bonds are down about 3.8%. u.s. equities are up, depending on the component, anywhere from 5 to 7. if you are a global investor, because of the dollar appreciation, those investments were plus or minus a few percent. so the totality of a portfolio really didn't do much. and so investors who are not basically stock pickers or are the entirety of u.s. stocks, it was a mixed story in the fourth quarter. i think that has not gotten out. >> although, that's kind of the point. when you have a portfolio that includes global markets, global equities and bonds, you're doing that to insulate yourself. so if something drops, you don't

get killed. >> correct. butt story is not as euphoric as it feels in the u.s. equity markets. >> do you think -- when we sat with you a year ago and talked about what you saw in the markets, you said at that point you saw additional blood in the streets. we did see markets down from that point. i think more than 6% decline from those points. i just wonder -- >> the market has rallied quite considerably. we have high expectations with president trump's administration. to effectuate some of the policies he's set forth, whether it's tax policy or infrastructure, it always takes longer and more difficult to roll out. i don't see as much transformation in regulation. in fact, i think banks are going to be in very good shape going forward, even only with a modest change of regulation. the yield curve is going to be

much steeper. so -- >> the intimation from what you're saying is you think the markets are overshot. >> andrew, i can't say that. i can assert that if the rollout of some of these growth initiative programs by president-elect trump are slower, if they're less ambitious, then i think the market is ahead of itself. if some of these programs actually create a higher deficit, which they may do, if we have greater tension with some of our trading partners who buy our debt, we would see higher interest rates faster, which will stall out the economy, which will stall out our equity markets. i'm not saying that's going to happen. i don't want that to happen. all i'm trying to say, i could paint a very bullish scenario,

or you could paint a negative scenario. at this time, i think it's -- we don't have enough information. >> we had a big debate about that yesterday. jim bullard versus joe kernen. joe said, all due respect, it's going to happen, growth is going to be better, and bullard said show me the numbers and i'll plug them into my model. the reality is there isn't really anything to put into the model right now in terms of actual programs. you don't have a size of a stimulus, you don't know what the taxes will be. but what would be a disappointment, larry, and what would be something that would justify current levels, say on the corporate tax level? >> let me step back for a second. i actually believe right now we have a growth -- we have growth momentum going on already. you see that in the statistics. >> irrespective of policy. >> i think we're starting to see an acceleration of growth. we're starting to actually see, after the election, a rise in

attitudes. i think people are much more constructive. i think small businesses are feeling very good about their future. i am told from many bankers, they're seeing more potential small loan activity than they've seen in years. i actually believe we have begun a growth initiative. >> that's a pro-joe thing. that's joe's -- no, no, no, it's more than that because it's a real thing. i can be as confident as i want. if i don't take a loan out, it doesn't mean anything for the economy. >> but i think what larry said was potential loan activity. >> but i do believe that's going to happen. i actually think we've seen the momentum starting to pick up starting in the third quarter. now in some areas of the country, you have euphoria over the election. i think that euphoria is carrying on. i'm not suggesting this is short lived or long-lived because i don't know yet. but i do believe one thing that

is certain, we are seeing better numbers out of europe, better potential numbers here in the united states, and probably better numbers in japan. i actually think the initiatives of the central banks of japan and europe are creating a better environment. i would also say the strength of the dollar or in other words the devaluations of the euro, the devaluations of the yen, is creating a greater stimulus over there. that is a head wind for our economy. that is a head wind for all the manufacturers we want to help. and if we have -- you know, we're in a world with 4.7% unemployment, we're in a world of approximately 3% growth already. if we overstimulate the economy, see a rise of interest rates, depending on what foreigners do investing in our assets, we could have a very strong dollar,

which would put some huge head winds in our economy overall. that's why we need to see the extent of his fiscal policies to offset some of that. what i'm trying to say is i don't know where we're going to go. i think initially we're going to have a growth initiative. we'll see. the one thing i want to say clearly, and i harp on every time i'm on your show, even -- i said last year at this time there's not enough blood in the street. but i did say for most investors, stay invested. because you don't know when they'll go in and out one of the statistics i've said in our press release, in 2009 when we bought bgi, we're at close to the bottom of the market. shares were $385 billion. today, $1.3 trillion.

the message should be, for most investors, stop market timing. stay in the market. we're spending so much time, whether it's going to be a growth story or not a growth story, we're harming so many people who have long retirement plans. they need to stay invested. >> did you see more retail traffic in the wake of the election than you've seen previo previously? >> modest. so many people were short into the election. so many insurance companies actually were waiting for a rise of interest rates. so they were short their liability. we saw a huge improvement in flows, but i wouldn't call it a huge burst of bullishness. going forward, if we start seeing increasing sales, then that will carry on.

i will say, as the strength of the dollar occurred, we have seen central banks selling assets. >> you spend a lot of time talking to foreign ministers. you'll probably meet with many of the leaders of many of these countries. we were talking about some of the issues in china. you sort of alluded to the issue of debt and the folks who buy our debt. i thought you were alluding to our relationship with china. >> among -- >> among many. but how concerned are you about that? in terms of the rhetoric. >> i would say the rhetoric is creating added stress to the relationship. i believe the global ecosystem of the world needs a strong u.s./chinese relationship. if those relationships turn more

negative, which would be to both countries' disadvantage -- >> isn't that the point, maybe that trump can say the things he's saying and we can have -- the question is, are we overstating the problem? meaning, if everyone is a rational actor and understands what the deal is -- you're just saying you're not sure everyone is a rational actor. >> i believe both actors will act rationally in the long run. but in the short run, could we have volatility towards that objective? yes. >> i think that's what we were talking about. both sides ratchet up the rhetoric. hopefully they meet in the middle. we have more with larry. he's hanging around for the whole hour. coming up, i said much more larry fink. we'll talk about banks and other issues. he's a great fly fisherman, of course. late e moderator of nbc's "meet the press" chuck todd will join us. stay tuned. you're watching "squawk box." son ud t haveav

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welcome back to "squawk box." we're talking this morning with the chairman and ceo of blackrock, larry fink. we appreciate him being here. you're now the single largest -- i know you represent a lot of people, but you are the single

largest investor in the world at this point. >> representing all the small investors who awarded us their trust. >> so a couple questions about the trump administration and the policies that are coming and what you think it means to equities. one of the big issues is going to be repatriation and what all that money is going to go towards. we've had a lot of ceos come on over the past couple of weeks and months now and say we're going to be doing a lot of buy backs, we're going to be doing a lot of dividends, we're going to do a lot of m&a. >> yes. >> does that make you happy? >> well, no. you know, i'm not a believer -- i don't believe the concept that repatriation is going to stimulate our economy. okay, i've never believed in that. i don't believe in that. >> you don't? you don't believe what some people say is the trickle down effect. stocks should go up. >> let me be clear.

if a ceo told me, as one of their investors, we're not investing in our company today because we have all our money trapped, at the time when we had record-low interest rates. i would have been pretty annoyed at that type of response. i don't believe repatriation is going to be -- you know, that money is going to go back into the economy and building factories and all the other things. what it will do, as you suggested, it will go back to buy back more shares and it will go towards dividends and maybe m&a, as you suggested. so obviously there is a trickle down, but it is a secondary effect. as you know, every year around this time i write a corporate letter. i'll hope to have that out in the next few weeks. one of the components of my corporate letter is about i want to know, as one of your largest shareholders, what are you going

to do with your money if you're repatriating it and how are you going to utilize it. that's one of the big issues we want to know as a large investor. >> do companies give you a straight answer when you ask a question like that? i can imagine asking a ceo that and they would tell us kind of a gobbledygook of answers. >> they not going to give me any inside information. what we want them to publicly alert, what they're doing with it. i don't want to know privately. then i would know -- then i have an inside information issue. >> does it work? you're the 800-pound gorilla in the room. when you throw your weight around, does it work? >> i think in the last few years the letters we've been writing have changed behaviors. we saw many companies write about their long-term strategic plan, and many ceos talk about how they need to pivot. one of the key elements of this letter this time will be -- and i'm not finished with it, so i don't want to suggest, but if

you think about our assumptions going into 2016 and the assumptions we have now ending 2016, they're dramatically different. especially our views of inflation going into 2016 and our views leaving 2016. i want to know how you're responding to this big seat change. >> because companies should be responding. >> i'd love to get back to this thing. if the repatriation doesn't work, how do we fix the investment problem in this country? >> you're assuming we have an investment problem. >> capital investment has been down. it has been low. companies have not been investing in their businesses. there is a pretty obvious problem if you look at the data. and if repatriation doesn't do it, what does it? >> well, repatriation i don't think will do it at all. you should have been investing. as i said, we had record low interest rates. you could not finance at a better time in our lifetime.

>> do you not want the money repatriated? >> it's perfectly fine. it's trapped money. it may be more utilized. on the margin, it's very helpful. it's back here. the money will go to work, as you suggested, andrew. i see all that. but, look, i believe we have massive head winds that are affecting all global economies. that's technology, and technology is going to be transforming the need for capital expenditures because we're building more efficient plants. we're building plants that can produce more rapidly with less human input. this is going to accelerate. >> how come productivity has been so low? i've heard this a couple times. if we're so good at utilizing technology and becoming more productive, how come the productivity numbers, at least the way the government measures them, haven't been matching up to that? >> well, in some industries, productivity is low because we

have not invested enough in factories that have more robots. let's be clear. in almost every industry when you have more modern factories, you have better productivity. i think that's a fair assumption. i think the tension is, as we develop these more modern factories, what does it do to the human labor element. this is why i've been asserting for years we have to have a strong fiscal policy. we have to abandon our monetary policy. we need a strong plan for infrastructure to help the families who have been displaced or because of the technology -- >> you are really showing yourself to be in the secular st stagnation camp. larry has argued because of the low need for capital from technology, these companies that

come forward and make tremendous profits from very little capital investment, that means essentially the price of money will remain low for a long time. it's one of the things you're saying. there's not a big demand for investment because you can get so much, really, bank for the buck from the technology that's out there. >> but i don't believe in the conclusion that's called stagnation. i believe that's the transformation of our economies. >> fair enough. >> one of the reasons why the economy has been -- why we have a lower than we should economy in terms of gdp and growth is we have $2 trillion deferred in infrastructure. we have so heavily underinvested -- >> from the government side. >> from the government side, state, local, and federal. i believe that's a major component. and i do believe one of the reasons why productivity has not gone up, you know, we have

greater traffic problems, we have port issues. if you think about how bad our infrastructure is compared to the infrastructure of other countries today, we're slowing down our process. as we build better roads, better ports, systemically better airports, we are going to have an acceleration in productivity just by having a stronger infrastructure. >> what if repatriation was tied to the infrastructure? >> that's on the government side. how the government taxes that money and what they do with that money, that will certainly be added into the economy. so there's no question government can take that, but let's be clear, most infrastructure is state and local. so unless -- look, i do believe to shock the economy in a positive side, we're going to need a very large build america bond program again. that's going to be the first part. i strongly believe -- >> would you buy those bonds?

>> we have and we will. we need also a strong policy towards public/private in terms of infrastructure. >> okay. larry fink, thank you. great to see you. we'll see you in the alps. >> you will. >> thank you, larry. when we come back, more on the banks with financial analyst marty moseby. we're also expecting more numbers this morning. we still have wells fargo and jpmorgan to come. then, chuck todd of nbc's "meet the press" will be joining us to talk about the latest in politic, all the hearings taking place this week, and some of the press conferences as well. "squawk box" will be right back. time now for today's aflac trivia question. which president was the first to be inaugurated in washington, d.c.? the answer when cnbc's "squawk box" continues. asmong binke

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market site in times square. among the stories front and center, it's the busiest morning of the week for economic reports. in about an hour, we're going to get december figures for both retail sales and producer prices. that's the retail sales from the christmas season. so it's very important. later on, the latest consumer sentiment numbers as well as november business inventories. panera bread is the latest restaurant chain to, quote, go clean. announcing its entire menu is now free of artificial flavors, preservatives and sweeteners. the company reviewed more than 415 ingredients ahead of the menu conversion. >> the problem is clean eating is not supposed to include bread. >> so you can never do bread clean? >> i think it's hard to do bread clean, i think. >> i thought you might know something about that. >> just saying. >> and if joe were here, he'd be making fun of you. >> he would be. >> i'm not going to do that. i'm not going to make fun of you at all. >> keep eating the bread, my friend. >> i know. i'm trying.

china's exports fell for the second straight year in 2016 and the 7.7% drop the largest decline in seven years. officials also fear a trade war with the u.s. that they say may cloud the outlook for this year, andrew. >> i ate the entire bread basket yesterday. >> i can't believe you're even saying this. you eat like six donuts every time there are donuts on set. >> every day i wake up and say i'm not eating bread today. i make it maybe two-thirds of the day. >> then you binge. >> i don't binge necessarily. >> i was thinking i wasn't going to eat it. the bread was right there. then i had the whole basket. >> it's just hard to eat without bread. >> i don't disagree with you. >> there's no time to eat without bread. let's talk bread and bank of america, rolling out fourth quarter results earlier this morning. calling in now on the "squawk" newsline to break down results, our good friend marty mosby. great to see you, or hear from

you this morning. your headline of the morning on b of a. >> well, when you look at it, there's three things that the banks have been doing that will create value going forward. one is increase in ni as interest rates have moved higher. we didn't see a lot of that tangibly, but we got a good foreshadowing going into the first quarter. asset quality will continue to be strong. provision was down significantly, so that's been a positive. one of the reasons bank of america actually beat expectations on the market. we also had a foreshadowing in capital deployment. those are the three really primary investment analysts for last year which are continuing into 2017. >> i think the largest question, given that the stock is now down in the premarket, is just whether the banks across the board have overshot in terms of what investors have anticipated and expected. we will, of course, hear from jpmorgan, wells fargo, and next

week we hear from the rest of the banks. >> well, the reason that the bank valuations have, you know, moved up to the upper end of our range is the fact of the perception that we're going to see benefits going into next year. so there's three things that really are going to develop. lower corporate tax rates. we didn't see anything in that. there's nothing that should be in the numbers this quarter. or are we going to see deregulation. the third piece was an expectation of capital markets activities. we're going to get a little bit of a lift. that's the only one thing we saw which was a shade negative in the sense that we didn't see investment banking in capital markets react positively in the fourth quarter. so that's the reason we'll probably see a little bit, you know, with jpmorgan or bank of america, a little pressure just to see a little profit taking, pull back slightly on their price as we go through the day. >> marty, we got to run. real quick, of all the banks, your favorite at the moment? >> right now we like two banks that have organic strategies that can also generate positive

leverage. sun trust and state street. >> okay. we'll take that to the bank. marty, thank you. >> thank you. folks, one week to go until the inauguration. at this point, there are no cabinet confirmation hearings on today's agenda, but those hearings will resume next tuesday. that comes after monday's martin luther king jr. holiday. on capitol hill today, the house plans to vote on a measure that would move towards dismantling obamacare. the senate already voted o than yesterday to approve that legislation. that will set the repeal process in motion. joining us now is chuck todd, nbc news political director and the moderator of "meet the press" on nbc. chuck, my friend, long time no see. great to have you with us. >> welcome back. >> thank you very much. a few things have happened since i've been out. >> yes. donald trump is president, going to be president in a week. that's one thing you missed. >> missed out on the market reaction to all of that. chuck, the press conference this week kind of set the tone for what we might expect to see as

mr. trump assumes the office, assumes the administration position. on wall street, there was a little bit of disappointment that there wasn't more focus on the economy. i'm dying to hear the washington take on what happened with this press conference. what do you think? >> look, one thing i don't want to do is actually sit here and talk about this media relationship with him because i think that's -- that is -- it ends up being counterproductive for all of us. i will say this. i think donald trump had the type of press conference that we've all gotten used to. this is -- it may look chaotic to us. it may look like a circus to official washington, but this is sort of donald trump's comfort zone. he kind of likes a little bit of uncertainty. i think he feels as if he has more control when there's uncertainty around. look, i think one thing that the press corps has got to learn is you got to adjust. to get information, you know, don't ask four-part questions. ask one straightforward question.

ultimately, the job of the press is to extract information that means something to the american people. we got to figure out different -- there's always different methods to extract information from different politicia politicians. donald trump's no different. >> just watching from the sidelines and kind of seeing how things are progressing with the hearings this week, the plans that have been put forward, it feels to me like things are moving a lot faster, things are happening earlier. we haven't even seen him inaugurated yet. is that just me paying more attention this time, or is that really what's happening? >> no, i think things are moving fairly quickly. i think what's interesting here is with trump. there was a conservative writer who noted this. he's very much somebody who believes almost flood the zone. always try to stay on offense all the time. the more you do that, you may lose a battle here and there, but if you have eight simultaneous political battles going on, on policy or politics

or merging them both at the same time, it divides your opponents. >> and you're going to have some wins. >> you're going to have some wins. look at a jeff sessions. i think if jeff sessions were the only cabinet secretary that democrats were uncomfortable with, you might have seen a more concerted effort. but they seem to just be all over the map on where they want to go in these different confirmation hearings. so it is -- this is where the trump folks have been very clever in almost dividing the opposition. >> chuck, help us with this. we were talking about it in the 6:00 hour. who's in charge? donald trump has one view of the world, which he has espoused. by the way, he has multiple views of the world. his cabinet members have other views, many of which are in conflict with his own. he put out a tweet this morning saying he's happy that they have their own views, but it makes it very difficult, both if you're an investor/market watcher or a politician, to figure out who you're supposed to be listening

to. >> look, it depends on whether that cabinet secretary has a lot of regulatory leeway on their own or whether they don't. there are some cabinet secretaries where they do operate sort of in their own bubble a little bit. >> who do you put in that category? >> i would say the ones that have a higher amount of regulation. epa, for instance, is one of those. standalone regulation. you look at a secretary of state, and that's a different story. there isn't really any policy he does on his own, right. that's all going to be driven from the white house. and the department of defense is sort of split. the policy is driven by the white house, but the implementation very much is standalone, and there are a lot of things they can control. but i kind of think it's not uncommon during confirmation hearings to see the out party do their best to try to drive wedges between the president of their cabinet. and you'll look at a moment like this and think, oh, wow, there's

all these differences. one lesson i think everybody needs to be remind the of is that no matter what you think of a cabinet secretary, at the end of the day everything still gets driven from the white house. so i would not sit here and say, oh, there's -- i'd say if there's going to be uncertainty, the uncertainty is going to be coming from the white house. it's not coming because a cabinet secretary and the white house are disagreeing. >> chuck, what everybody is trying to do around here is to handicap the possibility of these programs to come from the administration. it has to do with either infrastructure spending, tax reform, corporate tax cuts. can you give us your read on congress right now. is the republican party unified in favor of these things, such that we can say, you know what, 100% chance we're getting some of this stuff. or are there still divisions within the party that have to do with split along the lines that the deficit matters a bit when it comes to these issues. >> it's the deficit that i think is the biggest unknown. how much of a priority is the deficit going to be to house

republicans, who in many cases ran on the issue of the debt, got to congress on the issue of the debt in many cases. so that is something -- and i think the infrastructure bill is when the rubber meets the road on that one. i think donald trump's in a place that the rest of the republican party, at least on capitol hill, may not be when it comes to infrastructure spending. donald trump's one of those that says, hey, with interest rates so low -- he was somebody that believes, which has been a democratic argument, which is, hey, do it now, finance this now. this is the time to go. money is cheap, go use it to do the infrastructure. so that's where i think you're going to see a splintering. but on taxes, there's certainly unanimity on the goal. the details there are maybe disagreements on. look at obamacare. that's another one. from 30,000 feet, everybody looks like they're on the same page. go down in a granular sense, and they're all over the map. is there going to be a quick bill, or is it going to take

months while they take their time to try to write this bill. will congress write the bill, or is donald trump's white house writing the bill? donald trump said they are. >> i guess that gets you to the point where do you think things are going to be less fractious in washington? it doesn't feel like it to this point at all. >> oh, no, no, no. >> if donald trump comes up with ideas for infrastructure spending that have traditionally been democratic ideas, would you see some cross-aisle cooperation, or is this the well is poisoned at this point and nobody is working with the other side? >> it's possible you'll see some cooperation on infrastructure because think about the states that donald trump did well in. there's a lot of democratic senators there who want that. i could see the democratic senator in pennsylvania, casey. you can see a stabenow out of michigan. i think in those specific cases, that is where there's opportunity. but let me take a larger step back.

becky, your first question was, i'm curious of washington's take. i can't tell you -- official washington has never been more uncertain, more nervous about what's going to happen in a week. because from the russia investigation, which appears to still be active, you have these, you know -- that situation is the cloud. we're sitting here trying to talk about obamacare, infrastructure spending, where that would be normal political debate. the cloud is russia. i don't know -- does the cloud get so thick on russia that it consumes everything else? i think that's the question a lot of folks down here are asking. >> and chuck, that is why we need you more than ever. if it's sunday, it must be "meet the press." we'll see you on sunday. thank you for joining us today. >> good to see you back, becky. liesman, it's been a while, brother. >> i like your thing, chuck. crazy is the new normal.

that's my new mantra. >> hey, jeb bush got this right. he said donald trump is a chaos candidate. donald trump enjoys the chaos. >> it's going to be interesting. it's a good time to be a reporter. that's all i can say. and nobody better than chuck. coming up, dealing with russia, something we were just talking about. how will president-elect donald trump handle vladimir putin? we're going to speak to the leader of the pro-democracy russian political party after the break about u.s. relations with russia. and check out the futures at this hour. we are still to the positive side, though maybe a little lower than when becky first read the boards this morning.

much has been made this week of how president-elect trump will deal with russia and vladimir putin. the kremlin said yesterday, quote, moscow hopes our presidents will get along well. for a preview of u.s./russian relations in the trump administration, let's bring in the russian opposition leader with the pro-democracy russian political party and co-founder and leader of the political movement. his new report is titled "the kremlin's hybrid aggression."

he warns of the dangers of putin's unchecked power in russia and the world. thanks for joining us. >> good morning. >> i have to say right off the bat, i knew very well boris from my time in russia who you founded that party with, and his assassination is something that moved me deeply. so that's a pretty amazing thing, and it's something that i think people don't really understand about putin's russia, that people and opposition leaders get killed. >> yes, that's true. it's dangerous to be in opposition in russia. many people left my country in these years because of criminal case against civil right activists, because of murder of boris. people are scared to be in opposition of putin. that's the reality of my country. >> how do you react when here in

america people praise vladimir putin? >> we a little bit nervous about future of u.s. and kremlin relations because, first of all, i believe it's a problem of russian people. we should solve this problem ourself. but our message to the world, our message to united states, to european leaders, please do not support mr. putin. please do not give him this support. do not make putin's authority more powerful. you know, it's not just about putin. it's not just about ukraine. it's about the world security. putin shows us that he's a dangerous leader not only for russian people, he's dangerous for every country around. >> are you suggesting that by praising putin here in the united states, we undermine the

pro-western, pro-democracy forces inside of russia? >> we have a lot of people who would like to have russia as a part of europe, who would like to have russia as a country where civil rights is supported and for democratic institutes to become the reality. we know that we had the huge demonstrations to support democracy, to support freedom in russia. we know that tens of thousands of people came to the march in the memory of my friend boris. we believe that russia has a democratic future, but we should fight for this. we still keep fighting. >> what would you like to see mr. trump do relative to russia? obviously there are interests of

the united states where they align with russia and russia can help us. so completely adversarial relationship may not be in the u.s.'s best interest. what would you like to see from mr. trump vis-a-vis russia right now? >> i have only one message. i believe mr. trump and top officials in his government will be not pro-kremlin, not pro-chinese. they should be pro-american. if they will be pro-american, they cannot be pro-putin. united states has extremely different values. i believe the new administration will focus on ukraine because it's not only about ukraine. it's about a system of security. it's about the russian future. i believe the new information will focus on ukraine. >> mr. yashin, i have to go, but i have to ask you one question. are not afraid for you own life when it comes to being in russia right now? >> i prefer to not think about

this because if you think about your personal life, you just go crazy, you know. you should do what you should. >> mr. yashin, thanks for boining us this morning. boris nemtsov was a courageous and bold economic reformer in russia. he was a assassinated on the streets of moscow. coming up, a run down of the big earnings report of the morning. at the top of the hour, hearing from wells fargo and jpmorgan. stay tuned. "squawk box" returns with that and more in a moment. ouchils . va e ay. thom tti

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welcome back, everybody. let's take a look at stocks to watch this morning. we're just hearing jpmorgan hitting -- just taking a look at these numbers quickly. it looks like the company came in with earnings of $1.71 a share, which is much higher than anticipated. street was looking for 1.43. also talking about revenue of $23.4 billion versus the $24.17 billion the street had been looking for as well. jamie dimon, the chairman and ceo making comments on that, saying that they had solid performance across their businesses. in the consumer business, he said, they had double-digit growth in deposits and core loan balances. credit card sales volume was a record for the year.

he said, we saw continued momentum from the third quarter in cib with strong market results across products, asset management, and commercial banking. both grew in loans and deposits. dimon also makes some comments on the u.s. economy. he says the u.s. economy may be building momentum, looking ahead there is opportunity for good national policies to be implemented which would spur growth, create jobs for america across the income spectrum and help communities. we'll look at more of this as we go along. again, jpmorgan beating expectations. we'll dig a little deeper into these numbers. okay. coming up, jpmorgan's numbers. more on that. wells fargo expected in minutes. you can't leave because we have the bank numbers coming. "squawk box" coming right back.

earnings alert. jpmorgan and wells for a low rolling out results. breaking economic news. key reads on inflation and the consumer just minutes away. plus, brand builder here to talk celebs and brands. 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. welcome back to "squawk box" right here on cnbc, live at the nasdaq market site in times square. i think that music is because it is friday the 13th. a little spook you or no? >> no, this is "the godfather." >> spooky unto itself. i wasn't really paying attention. maybe it's for you. >> why? >> oh, i know why. the guy we're having on later is the brand father. i just figured it out. >> the brand godfather. >> i thought it could be a spooky day. >> that's a stretch. that's a really obscure -- i mean, i thought i was obscure. >> take a look at futures as we look to see whether the trump rally continues or is stalled. the big question in the markets thee days. dow looks like it would open 16 points higher. nasdaq up about six points. the s&p 500 up about a point and a half as we get some bank

results. we've heard from bank of america, jpmorgan. wells in just a little bit. a quick look at treasuries. right now the ten-year note -- >> i got the release if you want the wells release. >> oil, if you're buying it by the barrel, 52.56. we're going to go to steve, who's going to talk -- >> me? >> yes, sir. >> we're going to wilfred, i think. >> i'll tell you quickly, wells fargo, 96 cents versus the dollar the street was expecting. wilfred frost join us from the breaking news desk. >> as you already reported, the revenue came in at $24.3 billion. the eps looks like a huge beat at $1.71. consensus was around $1.44. in terms of going into the numbers, loan growth continues

to be good, up 12%. as expected, a bit better than bank of america. also, the other reason for the beat, and this is interesting, trading revenue much better than bank of america's. as i said earlier, we're expecting about 25% for the industry. forecasts for some analysts for j.p. was for 30% growth. they did beat that. they hit 32% for the quarter -- sorry, up 24%. fixed income up 32%. equities up 8%. so that was closer to being in line with the very bullish forecast for trading revenue in the fourth quarter than bank of america, which is a bit behind. just to go back to bank of america, because i did speak to the cfo in between these numbers coming out. he said that was a tail off just in the final month. one point, which is bullish, in terms of commentary on capital returns. he said, we have enough capital, we are meeting the new

regulations and now it's time to take those earnings and return it to shareholders. he said that was irrelevant of any deregulation that they saw. but that's quite a positive statement in terms of the fact that the worst is behind them for regulation, allowing them to return capital, even if they don't see deregulation from here. so decent commentary from the cfo of bank of america on a call i had with him. big eps beat from jpm, driven partly by a tax beat and trading revenue much better than bank of america's. guys? >> thank you very much. we are continuing to get these financial earnings that have been coming out. wells fargo the latest company. it looks like wells fargo missed on both the top and bottom lines. 96 cents a share versus the $1 the street had been anticipating. revenue was $21.58 billion versus the $22.45 billion the street had expected. wells fargo is in a unique position among these financials because of the scandal there with their retail banking practices. as you might expect, that is what much of the commentary from

the ceo and the cfo is kind of surrounded by. the new ceo said that the bank continued to make progress in the fourth quarter in rebuilding the trust of our customers, team members, and other key stakeholders. i'm pleased with the progress we've made in customer remediation. the ongoing review of sales practices across the company and fulfilling our regulatory requirements for sales practice matters. talk abo talked about that new compensation program the bank launched this month, getting away from the idea that the retail bankers were opening new accounts at a hectic pace. that was the problem. wells fargo down by about 1%. >> can i just ask, is what you're saying that they missed because of these scandals? >> not necessarily. >> were the finds -- >> what impact it's had on their

relationship with their customers. i don't think anything is necessarily in those numbers from the fees with that. but i think there's an overhang on the business. >> that's why we have wilfred. we're going to get to him and ask him these very questions later on. okay. some other head license of the morning. bank of america earnings topping wall street estimates by two cents. revenue coming in a bit light. you're going to look at those shares right now. they're down in the premarket about 1%. also, blackrock posting a profit of $5.14 per share. that's also above estimates of $5.02. revenue very slightly shy of forecast. blackrock also announced a 9% dividend hike and additional share purchases. ceo larry fink joined us on set right here in the last hour. >> we had extraordinary positive flows, both in our etf business and our institutional business. probably the most important

thing for the year, we actually raised over a billion dollars in 15 different countries. we had 53 different products that grew by a billion dollars. so the breadth of the platform was pretty extraordinary fed chair janet yellen says she's upbeat about the short-term economic outlook. in a speech late yesterday, she suggested the labor market is looking strong, but the central bank chief is worried about longer term issues like income inequality and weak product growth. >> i'm continuing to look through this release. community banking, that unit of wells fargo, they saw revenue down 6%. so that might tell you about what's happening. >> people said i'm not doing business with them. >> i don't know for sure. they don't get specific about it. but yes, community banking down 6%. that's where they're issuing loans for small businesses and things. that could tell you a little bit about some of the head winds the company might be focusing. in the meantime, why don't we tell you about some other

stocks to watch. renault shares under pressure. similar charges levied against volkswagen and fiat chrysler. that stock down by 1.5%. not nearly the reaction you got yesterday from fiat chrysler when the u.s. epa made its own accusations. pandora shares rising after the company offered some upbeat guidance and announced plans to cut 7% of its work force. that stock is up by 9%. and anadarko petroleum is selling some texas assets. the price tag is $2.3 billion. comcast shares upgraded from a buy to a hold at deutsch bank. the firm says that nbc universal's parent would benefit from decreased regulation and tax reform. also this morning, raymond james raising its price target on comcast to $81 a share. and netflix was upgraded to

a hold from a sell. the sell rating was based on the stock being two years ahead of where it should be. deutsch bank now sees better subscriber growth thanks to strength in international markets. take a look at shares of facebook. upgraded to strong buy from raymond james. the call is based on continued strength and ad spending and improved results for advertisers. markets paying close attention to the start of earnings season, including this morning's reports from the banks, all the ones we've been running through. joining us now is charles campbell. how would you kind of combine all of these financials and say here's what we think of the bank so far? most of them have beat expectations, at least when it comes to eps. >> good morning, becky. thank you for having me. the financial markets have priced in a 2017 different environment for financial institutions. stimulus by new administration. steeper yield curve. higher inflation expectations. a lighter, more friendly regulatory environment. the results we're seeing thus

far represent the current administration and a period that will soon be the past. so markets are anticipatory, of course, six months, nine months out. they're expecting a better environment. we look at the dow components, you know, goldman sachs, unh, and jpmorgan account for 42% of the 1500-point move in the dow jones simply since the election. that's really because of a changing regulatory environment and a taking of the weight off of the federal reserve and putting it on the federal government in the form of stimulus so that janet yellen and the federal reserve is no longer carrying the burden of stimulating the u.s. economy. >> in terms of what we've seen early on in the economy, certainly the confidence seems to be building among consumers and small businesses, at what point do you see that kind of translating into real investment from companies as they try and keep up with maybe consumer demand that's maybe pent up? >> that's a good point.

today we saw, you know, this week the trump administration with a press release on a press conference on wednesday. markets anticipated there would be announcements. they were disappointed there was not a timetable about legislative priorities or specifics about an announcement. we had a predictable reversion from the election. sovereign bonds worldwide rallied. u.s. dollar traded off. gold rallied. reversing what we had seen -- >> still looking at the dow up maybe 150 points from 20,000. so you're not talking about a bill pull back. >> that's right. >> maybe a stalling out at this point. show us the money. >> that's right. so the administration will have to come through with programs. now, one thing they've talked about it on tax repatriation. so you've got 2.4 trillion which is offshore by u.s. companies. most of it u.s. assets. let's say they repay create a quarter of that. let's say a third goes to buybacks. that's 200 billion. in a typical year, there's about 600 billion in buy backs.

what else might they do with that? they might increase dividends. okay, that's fine. they might engage in mergers and acquisitions. okay, take out competition, adopt technology, get rid of legacy businesses from acquires they're getting and have creative acquisitions. that's fine. will they actually build $5 billion prefab in california? probably not. >> i want to get back to something we've been talking about all morning, which is what to make of the flalt lit lining the rally. you're down, what, like 30 basis points on the ten year, which is a meaningful prove from the top at 264. is the market -- >> when i left three months ago, we were 1.6% on the ten year. >> it went to 2.64. now it's town to 2.34. look how quickly they bring that up in the back. right on their toes. but i can't read it.

that's down quite a bit from where it was. is the market done trading prospectively on stuff that's going to happen? >> no. >> do we have all the anticipated gains and now we're going to trade based on stuff that's actually proposed? >> the ten-year was at 1.856 on november 8th, the close. generic ten year. so the market is really saying, okay, we've anticipated this, now we have to see results. that's what they're going to need. they're going to have to wait until probably january 20th, 25th, to see the legislative priorities, tactically how he's going to execute that. for traders and investors, they're assigning probabilities. >> and this question we talked about with chuck todd, which is how the republicans in congress are going to act, which i think is one of the most critical things for the market. the makeup and the internal discussions inside the republican party right now. i think there are members of congress right now who will be able to move markets more than fed officials.

>> fed officials for the longest time have been the headline driver. they are taking a second or third row to the administration, to fiscal policy, legislative initiatives by congress, the ability to tactically get things through congress, and that's going to be critical. you can have, you know, all the billionaires you want on a cabinet, but that doesn't necessarily mean they can effectively legislate to get from point a to point c. >> charles, thanks for coming in. >> my pleasure. when we return, it's been a busy morning for bank earnings. reaction from the street next. plus, breaking down the border tax. we're going to break down trump's plan with tax expert dan mitchell. then later, hollywood's brand father, rohan oza is going to join us. he's in the house. you're watching "squawk box" on cnbc. ion

welcome back to "squawk box," everybody. we've been watching the futures this morning on this friday the 13th. you're going to see right now the futures are indicated

slightly higher. dow futures up by about 14 points. s&p futures down by -- or up by about half a point. the nasdaq up by just about 4 1/2. take a look at what's been happening with the ten-year note. you'll see right now ten year is yielding 2.342%. currencies this morning, at least right now, the dollar is down against the euro, which is trading at 1.0657. it's down against the yen too. steve? >> thank, becky. we're watching the banks closely this morning. wilfred frost joins us with more on wells fargo. the question was earlier whether or not any of the issues they've had with regulators and/or issues with these fake accounts, did they play into the earnings at all? >> yes, and the answer to that, just to go in a different direction to what i was planning, is they haven't. it hasn't really hit the bottom line. we have a number of updates here. don't forget they've also on a monthly basis just been giving sales updates from the

cross-selling scandal. that still shows declines from a year ago, but a steady improvement month on month as they've been giving us those updates september, october, november, and now december. there's a trend of improvement, albeit still suffering from a year ago, but either way it doesn't affect the bottom line. that's been reiterated by the cfo in the quote included from him. so that's encouraging. they did say they've announced a new compensation plan for various sales operatives. i'm sure that's something that will be focused on quite closely on the analyst call with all the nitty-gritty to get into on that. the eps was a miss, coming in at 96 cents. estimate was $1. that was largely down to a one-off accounting thing. the hedge ineffectiveness accounting. it was priced in by analysts, but it's not something that you'd be too concerned about. it's sort of an accounting issue. guys? >> thank you, for that. in the meantime, joining us

now on the "squawk" newsline, banking analyst at raymond james. not that you'd sandbag the quarter, given everything you know that's going on, but if you could move the better news to this next quarter, if there is the possibility you do that in this instance, david? >> sure. thanks for having me on. thanks for the question, andrew. so regarding the quarter and, you know, the perception that they could sandbag, my thought going into the quarter given the potential for a change in tax rate that we could see expenses potentially run a little higher, which does not look like that was the case here in the fourth quarter for wells fargo. obviously, you know, it's a little bit of a messy quarter with the hedge ineffectiveness here. but the fundamentals at wells fargo were deteriorating prior to this account scandal that came up in september. >> is this deteriorating more

than you expected though? >> looking at the numbers here on the surface, you know, the fee income line was a little bit disappointing. loan growth came in pretty much in line, but consumer loan growth declined for the first time in quite some time. the company has started producing monthly growth rates in their retail banking business, and those growth rates continue to slow. and that's a concern for the long-term revenue outlook for the bank. >> okay. so what do you think the stock is worth right now? >> well, you know, the stock right now trades at 13 1/2 times. that's in line with jpmorgan, b of a. i think a bit of a discount is deserved given the head winds here. so you know, we don't formally put out price targets, but i do think the stock is primed to underperform and lose some of the premium valuation they carry relative to peers. >> david, appreciate your time

this morning. thank you. >> thank you. all right. coming up, tax reform in the trump era. the cato institute's dan mitchell joins us at 8:30 eastern. stay tuned. "squawk box" is coming right back. cnbc's willie geist is here. he's going to stop by our new home after the break. whare i'va omoy

welcome back to "squawk box" this morning. the "today" show celebrating its 65th anniversary. willie geist is here. he's at the nasdaq to ring the bell, also to celebrate the sunday "today" show, which he runs. >> hi, guys. this is a little historic. i'm usually on tv on msnbc across the street. i've never been over to visit you in why your handsome digs. >> have you ever done this before? >> no, i've never rung a bell. what do you do? i don't know what to do. i don't want to be bad luck. >> the whole market is depending upon how you ring it. if you ring it poorly, the market will go down. >> and willie, it's friday the 13th. >> this is a total setup. i know it was down marginally yesterday. >> right now it looks good. green arrows already. you have that going for you. >> you press a button. then don't you have to sign your name? >> yes. and we're doing it because we are celebrating the 65th anniversary of the "today" show.

reque can you believe that? it was 1962. >> was there television back then? >> just barely. >> are you being joined by the crew? >> the rest of the crew is on the "today" show. that's why i'm here doing this. i'm the designated survivor. they sent me over here. so dave garroway was the host. his side kick was a chimpanzee named jaye fred mugs. so we've come a long way. maybe. i don't know. >> or have we? >> that actually baffles my mind. you think about all of the historic anchor teams that have gone through "today" and how america turns to the "today" show. >> we go back to barbara walters. one of the original "today" girls. we see who she became. matt lauer celebrated his 20th anniversary. meredith is here this week. katie was last week. so you go down, it's sort of like a murderer's row of

greatest tv journalists of all time have come through doors at the "today" show. >> tease, what's going on sunday? >> okay. so sunday we got a lot to talk about. this week has been crazy, as you may have noticed, with donald trump and the confirmation hearings. every day it's like a fire hose of new stories we're contending with. our profile this week is thomas rhett, upcoming country singer. big superstar on the rise. went down to nashville this week and talked to him. we're doing longer profiles on sunday mornings. we've done ceos of lyft and uber. so you get some music icons, some movie stars, and a lot of ceos too. >> excellent. willie geist. >> thanks for stopping in. >> it's a lot of pressure. >> don't mess up. billions, trillions are riding on it. when we come back on "squawk box" this morning, two key economic reports about to hit the tape. retail sales and the producer price index. we're going to bring you those

numbers and the market reaction. stick around. "squawk box" will be right back. 0 ,anaredross es 0

folks, we are just a few seconds away from the retail sales and the producer price index. we've been watching the futures this morning on friday the 13th. you're sitting basically on the flat line. dow futures up by five points. we're waiting for numbers from the cme. rick santelli standing by. rick, take it away. >> all right. we're looking for a litany of these numbers, start out with ppi, up 0.3, as expected. strip out the all-important food and energy. it's up a bit more. 0.2 instead of 0.1. these follow a dual 0.4 on headline from last month. let's go to retail sales, shall we. on the retail sales front, the month over month number is up 0.6. that's pretty close to the up . 0.7 we were looking for. it follows a revision from 0.1 to 0.2 of november. and if we look at the control group, that is up 0.2. that's half what we were looking for. and maybe one of the reasons

there is if you take the ex-autos, we were looking for up half 1%. it's only up 0.2, although we garnered an extra 0.1 from last month. so pretty much -- and ex-autos and gas, by the way, was unchanged. that was a miss as well. we were looking for up 0.4 there. the market, well, interest rates have consolidated into the low to mid 230s, where they sit exactly right now. remember, we did sitting at 2.44, our low yield close still remains 2.30 or higher, though many continue to observe. and if we look at what's going on in the dollar index, which has been at the epicenter in many ways and has had the biggest retracement since the pop on november 8th, it's hovering about a seventh of a cent higher and trading slightly above 101. back to you. >> rick, thank you. nobody spits out those numbers as quickly or as effectively as

rick does. steve is here. he's been looking through the numbers too. he has a habit of mumbling to himself as he reads through these things. what's the number you were talking about? >> if you want to know about what's going on in the retail business, just look at this retail sales report. what kind of christmas is may or may not have been. first, take a look at motor vehicles. up 2.4%. in the last ten years, when do you remember the first bow on the lexus? the december to remember. >> december to remember? i don't know. a long time ago. >> my take, we'll have to ask phil, i think the autos are winning christmas. i think they're winning it at the expense of the department stores. all you have to do is scroll down, and you take a look at department stores, down 0.6%. general merchandise stores down 0.5%. by the way, it didn't help that in this christmas gasoline station sales were up 2%. so gas prices were a little higher. that came up in the ppi as well.

you may be wondering, becky quick, what happened to internet retailers. >> if you have a single line item for amazon. >> i have this broad thing called nonstore retailers, up 1.3%. >> that's it? >> well, that was a disappointment. i saw people -- now, maybe they don't count it so well, but -- >> that's what i would guess. >> how would they know what's internet, what's not. anyway, it's a disappointment. department store sales down. what did terry lundgren have to do? closed a whole bunch of stores. nonstore retailers up 1.3%. what did amazon just do? hired 100,000 new people because of their wholesale thing they have going on. what are cars doing? up 2.4%. by the way, that's a little light too. might have been higher because they're heavily advertising around christmas. i think the auto guys are winning the holiday sales. >> not only advertising but also offering some of their best

promotions of the year. that has a way of bringing people in. are they profitable sales or not. >> i got to think people wait maybe until december, wait for those sales and say, you know what, i'm going to spend my holiday dollars on getting that new car, which is weird to think that it trumps a sweater. maybe they're not going to buy as much for holiday shopping. >> all right. >> we're going to do one more thing here, folks, talk about politics and the economy. there's been a lot of discussion this week about the border adjustment tax proposal, call it the b.a.t., where importers get taxed 20%, exporters wouldn't be taxed at all. it's very complicated, but investors may be missing a bigger point. it raises a lot of revenue. nearly a trillion dollars or more over ten years. and why is that important? because republicans see it as a revenue source to help, at least partly pay for all the other

stuff that we're talking about here, like individual and corporate tax cuts and infrastructure spending. without the money, those other ideas could be watered down. you could get opposition on the deficit. so the border adjustment tax, or the b.a.t., is critical for investors gauging whether other stimulus measures actually pass, and it's a big reason why some investors tell me the market may be ahead of itself in pricing in some of these other programs. joining us now with more on this, cato institute senior fellow dan mitchell. dan, thanks for joining us. was this an idea that was a revenue source in search of a justification in your opinion? >> there's no question that it's there because it provides a trillion dollars. i don't like the underlying idea, but i like what they're trying to do with the money, lower corporate rates, things like that. >> so what happens -- somebody yesterday from another think tank said to me this is different than the house plan costing 4 trillion versus 3

trillion. what happens if you can't get this trillion? >> well, something else has to be dialed back, or heaven forbid you actually have to slow down the growth of government spending. you know they don't like doing that very much on capitol hill. if you give up the trillion dollars of revenue from this border adjustment provision, maybe the corporate rate can't come down to 20 or 25 or 15, whatever the final number will be. you have to give up something. it's going to to be a horse trade on capitol hill. >> so i'm right in telling investors -- i just want to be clear about this -- watch the b.a.t. in order to understand how big some of these other programs they like can be. >> i definitely think you have to key your eye on that provision, but of course if you're talking to investors, they need to be looking at the fact that the whole justification for this plan is that there's going to be a big appreciation of the dollar and that means, for instance, if you're looking at a company oversea that has a lot of dollar denominated debt, that could be a real hit to them.

>> so let's talk about that. who pays this trillion dollars of tax, if it actually is enacted, this border adjustment tax? >> it would be a tax on everything that gets imported into america. now, the supporters claim it's not protectist because we'll have this big appreciation in the dollar. if you believe that, and i think in general it would move in that direction, then you have to look at, as i just said, foreigners who hold a lot of dollar denominated debt because all the sudden if they earn money in local currencies, enough to pay back a dollar that's worth 25% more, that makes their life very, very difficult. >> so, i mean, these people claim -- look, i completely understand the math and economics behind the appreciation of the dollar, such that there's no increase in prices. you just don't think that's going to happen? >> i think lots of things affect

exchange rates. you have pegged currencies. you have central bank interventions. you have all sorts of things that may swamp, may offset, may not offset. we don't know. all i know is that it strikes me as a bit mysterious that republicans would put this in their plan when it creates civil war in the business community between importers and exporters. it runs the risk of the wto rejecting it because it's clearly not compliant with the wto rules about border adjustment only being for things like value added taxes. so it probably does, as you said, undermine the chances of this good tax plan going through. >> so complicated. people can't get their brain around it. i want to do one more level of complication. i know we got to go. but peter navarro and wilbur ross claim there's an imbalance, that you get to export to the united states for free because it gets written off, and you pay a tax when you go into mexico. you've argued they have the

economics of this exactly wrong, that mexican exporters don't compete with u.s. exporters. it's really the competition in the market. explain your piece, by the way where you agree with paul krugman on this. >> i don't agree with paul krugman a lot. if a mexican product comes into the united states, it's sold without a vat, competing with american products sold without a vat. if an american product gets exported to mexico, it is hit by a b.a.t., but so are all the mexican produced products sold in mexico. so a value had added tax, which by the way i think is a horrible idea and one of the reasons i don't like this b.a.t., is that when the wto rejects it, they might fix it by making it a b.a.t. anyhow, there's no trade advantage, no change in the terms of trade by having a value added tax inside your country. you're financing bigger and more wasteful government, but you're not distorting trade or getting an advantage on trade. >> dan, thanks so much for joining us this morning. >> thank you. >> dan mitchell from the cato institute. a programming note, please don't

miss my exclusive exit interview with treasury secretary jack lew tuesday at 10:00 eastern. guys, republicans, that's the only people i'm talking about to about this b.a.t.. they're very divided. i'm getting guys who love this thing and people who absolutely hate it. larry kudlow yesterday, did you see that? that was an eping appearance. if larry was ever going to ever -- very nice man, but larry got very animated, heated about this b.a.t. >> and the other problem, once you have a v.a.t. that comes in, you can set it at certain levels, but once the camel gets its nose under the tent, it goes higher and higher. >> i really want to know how to think about it. i can't make up my brain. i think the key is how it funds everything else. okay. coming up, when we return, he's been called the brand father of hollywood, convincing celebs like kobe bryant and tom brady to invest in health drinks. rohan oza will join us to talk

business and beverages in just a moment. ♪ m....hon, i.ns o geicuve a t ort ♪ i t wehowear as

god morning, everybody. welcome back to "squawk box" here on cnbc, where we're live from the nasdaq market site in times square. let's talk about the stories front and center this morning. financial earnings has been the big one for us. let's check on the stocks of

companies that have already reported this morning. bank of america beating estimates by two cents. a quarterly profit of 40 cents a share. revenue did come in just a little below estimates, but the results were helped by lower expenses. the bank also posting its biggest annual profit in a decade last year. that stock down by about 16 cents. jpmorgan chase earning $1.71 a share. that was well above the street's estimates of $1.44. revenue also beating forecasts, and its results benefitting from a surge in stock trading after the november election. of course, you remember all these financials have been up 17% since the election. you're still seeing some modest advances today. jpmorgan up by about 26 cents. asset manager blackrock reporting profit of $5.14 a share, 12 cents better than expected. blackrock announcing a 9% dividend hike and additional share repurchases as well. and that's helped that stock this morning. it's up by about $2.70. also, wells fargo missing

estimates by four cents. wells fargo also missing on the top line. this was the first full quarter under the new ceo, timothy sloane. he took over after john stumpf departed in the wake of bank's sales practicing scandal. that stock down by 42 cents. our next guest earned the title of brand father. he's now launching a firm that invests -- >> ortiz. >> what did i say? >> ortz. >> it's all good. let's just go straight to the guy. portfolio includes big name brands bai, which just exited to dr. pepper for $1.7 billion. watermelon water, which counts

bo beyonce as an investor. joining us more to talk about the cpg market is rohan oza. great to have you here. >> great to be here. >> what do i have here, the chef's cut? beef jerky. we're eating jerky this morning. >> i gave you the stick and you loved it. >> the stick looked like -- >> it looked odd. when you tried it? >> yeah. but this stuff is great. jerky is a popular thing now. >> jerky is taking off in a big way because everybody wants high protein, low sugar. it's pretty much standard. a lot of the times you go down the grocery aisle, everything is upside down. everything is high carb, high sugar, high fructose corn syrup, low protein, low fiber. we decided to package and process the -- out of everything. now we're coming back to the way we should eat, which is high

protein, high fiber, low sugar, low carbs. >> by the way, you come from a packaged goods background. when did you first notice that there were differences for consumers? >> soda is great, sugar is not. when bai changed the game, we have regular bai and bai bubbles. bai bubbles is amazing. it's the new soda. it's one gram of sugar. i first started realizing this when i switched and left coke and went to vitamin water. it had half the sugar of coke. people were looking to do that. now people want no sugar. in one wants to drink sugar. >> do you have a no sugar one there? >> yeah, bai. one gram. >> i need one. >> would you want to own stock in coca-cola? >> yes. >> you would? >> i think that -- i mean, let's pick dr. pepper/snapple.

i give those guys a let of credit. bai is a game changer. it's off the charts where consumers are absorbing it. willie geist was just on. he goes, oh, i love that. everybody i show the brand to, they've tried it, they love it. and dr. pepper/snapple group had the vision to say we're going to take a game changing brand because realize the system needs a game changing brand. the big guys are going to find the game changing brands, put it into their systems, and it's going to benefit them. >> how important is the celebrity aspect of all this? you've had a lot of celebrities involved in a lot of your projects. >> yeah, so you don't have to have a celebrity. people think it's like, okay, who's the new celebrity? it does not have to happen. but if you have the right celebrity who's very smart and 50 was very smart on vitamin water. he picked the flavor. he picked the marketing strategy. he told me, don't pay me, give me skin, and once you give that to me, i'll show what i do. justin timberlake understands the brand amazingly well. him and the founder, ben, have a fantastic relationship.

he got in because he believed in what ben was doing with bai. >> what's the hottest next trend? jerky is a new trend. this is not a new trend at this point. >> it's not a new trend, but sugar is public enemy number one. everyone understands that. bai is probably the best tasting low-calorie or one-gram sugar product on the market. that trend is here to stay. we have just scratched the surface. >> are you a yogurt guy? >> i do have yogurt, yeah. >> what about cottage cheese? >> we have an amazing -- cottage cheese is fantastic, by the way. >> that's a new thing. the new yogurt. >> one of the economic theories behind celebrity endorsement is this. it signals to the buyer that the people behind the product believe enough in it to pay a guy to step forward and endorse it. is that how you think it actually works? why would i buy a product like this because justin timberlake?

what does he know about drinks? how does he connect with the consumer? >> whoever the celebrity is has to believe in the product. consumers are very smart. they'll figure out whether it's an endorsement or they believe in in the company, invested, he believed in the brand. when you see how he believes in something authentically, consumers are then made aware of it. oh, okay, let me try it. you try the product and everything comes down to trying. once you try, it's great. i'm in. >> what's a company you missed in all of this? as a guy who understands brands, what's one you looked at said i don't really like that but then, you know. >> a friend of mine came to me about five years ago and i actually wanted to invest, but i'm mildly dyslexic so i wrote his number down wrong. he was a car or taxi app that i thought was cool thought okay i'll put the money in and i got the number wrong. but it's probably a two x or --

>> uber? >> uber. so the 3x ended up being a 300 miss. >> why can't big companies have to do this? why can't these brands be grown from the ground up and sold to big companies? why can't the big companies figure this out? >> the infrastructure in big companies doesn't allow for game changing and innovation and thinking. the beauty in why i think this is the greatest country in the world, my american mantra to be an entrepreneur because entrepreneurs in america have become the innovation incubators for corporate america. and corporate america has said, you know what, we'll create vcms and buy and develop them. >> name one big cpg company, it would be what? coke, pepsi? you like pepsi? >> i'm going to give my boys at dr pepper credit. dpsg, they made the big move. they believed in the brand. this brand is explosive. i'm behind them. >> very cool.

thank you. appreciate it. >> up next, jim cramer joins us live from the new york stock exchange. we're going to get his take on today's top stories and the trade. th tadsohohomibe s p bk?

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♪ let's get down to the new york stock exchange. jim cramer standing by. and, jim, we've been waiting to talk to you all morning about the banks. dick boef was supposed to join us this morning, he has the flu. he sent me a note, other than bank of america none of the five banks that reported this morning validate the current price increase. do you agree or disagree? >> no, i disagree. i think, look, these banks have all run. if you speak to the ceos they'll tell you they've run. i'm not interested in today's trading. i'm interested in the situation at bank of america where you get 100 basis points in fed rate hikes, they pick up another $3 billion that they're locked into $600 million in profit next quarter that this quarter didn't reflect a lot of the higher rates that next quarter will. >> right. >> that you're going to stop thinking about tangible book value. these are growth stocks. you see the kind of deposit growth these guys have all you're wondering is will the fed, will ccar, will all these regulators maybe go easy and

make a judgment of how much cash to return, will jamie dimon be able to pay a much bigger dividend? i hope so. same thing with moynihan. i got to tell you, wells fargo, this is funny, at 6% deposit growth. i mean, hello, america. >> right. >> so if they hit 6% -- but people are saying wells missed really big, why isn't it down? because they didn't have deposit outflows, they had deposit growth. america is a strange place. we're forgiving without even realizing we're forgiving. so you want to sell these, go ahead. you'll buy them back wednesday. you'll say what do i do. it's great for all the banks. if you have brokerage accounts, sell them and buy them. it will be terrific. you'll be up the next quarter. >> jim, see you at the top of the hours. >> wells. >> make sure you tune into your everything he sees about this. next week "squawk box" is live in davos, we'll be talking to ceos of bank of america, salesforce, at&t, honeywell and many, many more. stick around, "squawk box" will be right back. of ns youct ro hhe.

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buyo otersw reryotevealwi msionanthio welcome back everybody. you know, next week we're going to be in davos starting on tuesday, we'll be there tuesday and wednesday. so big lineup lined up for you. steve, i want to thank you for being with us today. >> pleasure. >> i know you have a big guest

today too. >> 10:00 on tuesday we'll have jack lew exit interview. you guys have a great time. some schnitzel -- >> i think we're taking the beef jerky with us. >> sausage, what do you eat? >> fondu, cheese fondu. >> bread. >> eat well. >> thank you very much. have a great weekend, it's a long weekend. we will be live in davos, "squawk on the street" begins right now. ♪ good friday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange. faber's off today. huge friday. earnings season begins with the banks. got some big name upgrades. europe finishes the week strong. retail sales, wholesale prices mostly in line. our roadmap begins with the banks, j.p. morgan, b of a and others out with results, china responds to rex tillerson's comments on the