"squawk box." ♪ good morning everybody. welcome to "squawk box" live from the nasdaq market size. and our guest host for the hour is bob doll. he's chief equity strategist and good to see you. we're going to talk a lot about what's been happening with the markets and what to expect this week. look at the u.s. equity futures for the hour. dow futures down by 27 points and closed up by 95 points on friday, breaking a five-day losing streak. you can see the s&p 500 is down by about 4 a1/2 points. and in japan at least, the nikkei was down.

and shanghai composite up. and red arrows across the board. biggest dekleiner is the ftse 100 in london down by just over half a percent. look at crude oil prices. energy markets are a little bit weaker, at least when it comes to crude oil. brent crude off by 1.2%. and natural gas off. and the biggest, yahoo reportedly facing an sec probe into two massive hacks. authorities are investigating whether the company shtd have reported those sooner to investors. investigation will likely focus on the 2014 data breach that compromised the information of half a billion users. they knew about the incident two years before they reported it. has yet to explain why it waited. and the key in all of this is whether it's going to impact its

sale to verizon. both reported earnings this week. so we will probably learn more. there was an indication in the new york post that because of the timing of the earnings releases, i believe yeahoo goes first. it is believed it was timed. and the question is whether this changes the dynamic.. >> we're now talking about whether investors should have been told and that's the sec's purview. and we haven't talked about whether the actual users should have been told maybe when they could have prevented something bad from happening. >> we're not sure why they waited and didn't tell anyone? i would have never told anyone if i could have gotten away with it. it's obvious. you find out it happened. oh, my god, do we have to tell anyone? >> as a customer -- >> you'd want to know as a company you'd want to say what? i don't know. >> so the sec is the only one

who can come after them. >> pretty bad. it's obvious what the self interest would dictate for you to do but doesn't mean it's the right move, that's for sure. >> and samsung saying the faulty batteries from two suppliers are to blame for the galaxy note fires. given how many there were. thp product failure wiped $5.3 billion off its operating profit. the flagship galaxy phones could be delays. certain phones got one size and others got another and that was half the problem. this is good news. put this in the trump effect catego category. foxconn may be teaming up with apple to build a facility in the u.s. that could cost $7 billion and create 30,000 to 50,000 new

jobs. there's a bit of back and forth about how this all happened. this sort of an amyl story and bit of a hedge haddinging your bets story. if you think there's going to be a trade war with china, this may put you on friendly leer ground if you have a $7 billion facility here. and airlines operations are back to normal operations after they were grounded because of a outage. united said the issue was caused by a technology that sends text messages to pilots in the cockpit and they weren't able to get information they needed to push back from the gate. the airline was able to resolve the issue about 9:00 p.m. eastern but warned the customers may still be experience some

delays. >> technology, right? it's great when it works. >> it flu a little bit last week, are of us. let's talk about other stocks to watch. phillips lighting falling short of its estimates with quarterly earnings. but it's promising to increase margins in sales this year. the u.s. government is investigating herbalife. it is cooperating with the sec 's investigation. >> too low? what type of violating the -- our laws are different than their laws. >> that would be the laws being applie applied. in all fairness china has been trying to crack down significantly on bribery and any sort of corporate largess and you've seen some of the luxury stocks have warned because of this we're not seeing the same sales. >> and despite being long on the stock in terms of making money

on it, you might have been right on the moral out read of what goes on. >> i don't think bribery was something he brought up. >> that was not on the list sdplp there was a long laundry list but i don't remember bribery. >> but he did talk about things going on in the other countries. >> let's talk about one other stock. actelion's drug is missing a primary endpoint. they have been doing a phase three trial for those suffering from a heart and lung ailment. politics and president trump's first 100 days in office. says he will talk soon with leaders of canada and mexico and begin renegotiating the nafta trade pact. it was a central promise of his campaign and he's scheduled to meet with prime minister tereeszau may this friday and discuss a potential trade pact.

they're at the front of the cube. >> the first one to be meeting. special relationship. >> so that was -- that was rubbish. i like rubbish. >> depends on who was going to be negotiating. we are also watching key confirmation hearings today. at 4:30 eastern time they're expected to vote on rex tillerson and send his nomination to the full senate floor. lindsey graham and john mccain said they would vote for him even though they've been voesing concerns for weeks over his russian ties. also expected to vote on cia director nominee mike pompeo. it was delayed on friday after democratic senator, ron widen formally sited concerns about his positions on surveillance and other issues. in washington to talk about

are the big political stories from over the weekend and boy, were there many. john. hey, andrew. it was a rocky first weekend for the administration. you have the back and forth over the size of the inaugural crowd size and donald trump delivering the speech that cia in which he was venting about that and sean spicer came in the white house briefing room and vented more. and i think that was counterproductive for the administration and now they're hoping to get back to some of the substance of what they intend to do as well as moving some of their nominees along. you've got the issue of trade as you mentioned. with teresa may coming on friday, that's an opportunity to talk about a bilateral deal with the u.k. and you've got the obamacare executive order which everyone is trying to figure out what exactly it means. i'm not sure it means a tremendous amount because i

think the more flexibility that is used to gut the individual mandate, either by not enforcing the penalty or by changing the nature of obamacare health benefits by changing what the federal government requires to be in obamacare plans, the more you accelerate the demise of the aca and they don't want that to happen immediately. donald trump has said explicitly we don't want to own this and destroy it until we have something to replace it. so that's the -- what everyone's sorting out and i was talking to republican senators over the weekend and they're unsure of the implications and maybe even the trump team. >> john, of course investors want to hear where they're going to all go on policy but the distraction of the weekend was this issue of what spicer said during the press conference and all these other issues and it

more you read, the more there's this suggestion that even the aids are frustrated. how much focus internally is focussed on the issues themselves which is waut we all want and care about and how much is becoming a distraction with all these other issues and how focussed is he on those issues? >> not as much as on the distractions because that's in the nature of distractions. they don't have a lot of -- the second level of people below the cabinet nominees, many haven't been picked. they're just learning out where the -- where their offices are and how they get going. you know, every white house faces an adjustment when they come in and the learning curve on this one is steeper because they've got so many people

including the president who haven't served in public office. but the one danger of all these distractions and things that damage the credibility of the white house, like the back and forth over crowds this weekend is that makes it -- that adds another layoff difficulty towards getting the policy agenda faszed and another layer of distraction. that's why some republicans were concerned about the weekend. but this is his first full day today and they've gaut a chance to try to achieve -- or build some momentum from here. >> i don't know how much you take away from tweets, but do you think there was a pivot on sunday? >> of a kind. you did have an acknowledgment by the president that people have the right to protest. that is not a huge acknowledge since it's pretty obvious that people have a right to protest and that's been part of the american system throughout our

history but it was better than what he was doing before and he has not tweeted since. it's been 20 hours since he's sent out a message and i imagine that people like jared kushner, who have his ear are telling him that if you reach for that phone and tweet out something incendiary, that is going to slow down our attempts to do the substntive things we say we want to do. there's a whole range of things he as said he intends to do that he could set in motion. there's an ethics order that he has talked about. codifying his pledge that aids will not be allowed to lobby the federal government. we've got all the issues surrounding the transpacific partnership and nafta. now it's easier with the transpacific partnership to say we're not going to be a part of it anymore.

nafta's more complicateds because this is an agreement enforced. but that's something he could make headway on and you have all the issues surourrounding clima and carbon emissions. does he set in motion reversing the paris climate agreement or the u.s. participation in it or the clean power pact. >> okay. john harwood in washington d.c. this morning. thank you. >> i was -- had to go in for a sitting on saturday with my daughter in the city because we -- none of the streets were open. >> going to the march. >> we were doing something else but it was right at about the same time. so my son and daughter were walking all around like 6th avenue in the mid-40s. and so if anyone had been there taking pictures, i would have -- i would have definitely been --

i have a daughter and wife. so i'm fully behind all these things. i think it's good. but it was a little weird. seeing all the people dressed as gen tailia. that was weird. that was weird for my son, and we were all a little -- thought that was a little weird. very graphically accurate representation. i'm just hoping -- i'm just hoping there's never a men's march where everybody's like a pen. just hundreds of thousands of do, do, do. >> i'll join you. >> perfectly entitled but could you imagine -- it looked like a march of the -- you got anything? any response? you scared? >> slightly. >> never mind, go ahead, becky. that was pretty edgy. >> i'm with you to not see that

marching down through times square. woody allen movie. >> that would be like a woody allen movie. >> it would. it's time to begin the first full week of trading with donald trump as president of the united states. we finish would a gain of 8% of the dow and 6% for the s&p 500. to talk more about it all is global market strategist at jp morgan asset and manager at luvine asset management. bob, why don't we talk about what this means, the first week of the trump aed ministration and he's planning to meet with congressional leaders today and we could see actions, executive orders on things like immigration and trade this week. what does that mean for wall street? >> i think wall street needs to see prioritization.

they loved the idea that we have a pro grow president. but we had a press conference, an inaugural address and he really didn't talk about those issues. he's got to come back to i'm going to cut taxes, reform taxe taxes. >> he has an executive order limiting regulations. and two other regulatory issues will come out but you want to see and does that mean you think it market is going to pause? >> tax reform repatriation. isis, fight the press. what are your three most important oneses? you can't beat them all. and he's got to walk arm and arm with the congressional republicans.

they're all over the place. one wants tax cuts, one wants tax reform. let's get some spes fisty. i know it's his first day in office. we got to give hymn time. >> monday at not 6:30 even. >> but he's said a lot. >> by 7:00 i hope we have some specifics, bob, for you, hopefully. >> you know he's all over the place. and people -- >> people know exactly -- >> exactly what he stands for. >> his people know pretty close what they're going to do today and tomorrow and all the obamacare stuff that was done on friday. all i'm saying is this guy's going to get it done and now it's oh, my goodness, what's he going to tackle first? he says one thing monday and a different thing tuesday. and they want tacome behind him

but don't know what to come behind. >> i think you made a good point. it's a laundry list and prioritization would be helpful. and we're in the midst of earnings season and what's important is to separate the signal from the noise. there was a lot of noise over the weekend and it's going to be a really exhausting four years if this is how things go. but when we look at what's going on with corporate profits, companies are back to making money, this reflation trade in the global economy is very much underway so focusing on the facts and not letting the noise and speculation get in the way is going to be key for navigating this first quarter. but in large part the last month 1/2 has been a speculation on what is or is not going to happen. so do people pull back now? what's the -- >> so the trump rally people have called it. i think that's bit of a

misnomer. that's part of it, for sure. but the economy got better and obscured by all the election noise was this u.s. economy is getting better. so i think we do have a bit of a tail wind. >> not 10% better. >> i'll call it half and half. 5% is better economy and 5% is hope for pro-growth policies. >> sentiment is at the upper end of the range and if sentiment in multiples have a very tight relationship, the question in my mind is how long can the s&p 500 trade around 17 times? we need to see the earnings growth come through. >> we're in the middle of earnings season now. are you saying that's more import ntd than what we hear out of the trump administration? >> long term yes. longer term, prices follow cash flows. >> but the idea that we follow the stock market during the

inaugural speech, does that even make sense to you? at certain point he's optimistic in his speech, the market went up and then he got darker and the market -- how much of those are real issues? >> that's a lot of noise. the signal is will earnings get belt better? you have people with earnings $124 and some people at 140. part of that is legislation. it's rare you get a spread that wide and so that's going to have to narrow. is it going to narrow at 140 or 120 or somewhere in between. >> that's why tax cuts, regulation, the stuff that actually effects corporate america is what should be on the top of trump's list and that's what he needs to provide the most clarity on for investors to

stay the course. this week i would say hold your nose a little bit. don't make any emotional investment decisions. we think mid to high single digits but dependent again on the earnings growth. the fourth quarter of 2015 was the low in earnings. so we're looking at double digit year over year earnings and 2017 stands to be a pretty good year. >> good to see you and bob's going to be with us the rest of the hour. >> that was a solid session. >> it was up 95 points. so broke its five-day losing streak at that point. let's go to hadley gamble but ministers are gathered in vienna. and she's got more on that story. hadley. >> reporter: hey, good morning, joe. so essentially what i heard from russia's energy minister is that

he welcomes this plan that could tap into trillions of theres in resource and he wants a return to the dialogue that the u.s. and russia enjoyed before the ukrain crisis and at a time when most foreign governments are trying to read the tea leaves of what mr. trump's foreign policy is going to read like. he is the foreign minister of russia who was saying that president trump and putin share a lot of the same geopolitical views and we heard from folks about the appointment of rex tillerson. and we're expecting a vote on his nomination. i asked the russian energy minister about that and he says he thinks he will be good for the oil industry. coming up soon. on the weekend, winners on the football field and at the box office. we need to talk about the super bowl and now that we have a line

up, i wish we were on planes when the good games were being played so that looking forward to the two games yesterday and it's like i watched both of them it looks like the teams that should be in the super bowl. >> are the ones in. >> were the balls deflated again? because brady doesn't seem -- inflated, deflated. stay tuned. oduconofhe l linespresmpanhe w etr 'salcuerarecespresmpanhe w

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♪ we now know what teams will be playing in super bowl 51, which is cool in and of itself because it's just an "l and an i." anyway, in houston in two weeks. the new england patriots and it atlanta falcons. they took down pittsburgh steelers in the afc title.

never seemed close. brady threw three touchdown passes. they will play for the ninth time, the most for any team in nfl history and brady and coach bill belichick have been to vaev and won four times. well, without wes welker, he wouldn't be and without gronkowski, he's not tom brady. this amendola guy, if he doesn't have edelman. it doesn't matter. who's chris hogan? who is he? >> i was reading all this stuff over the weekend -- >> i know who he is now. >> from the time he was in california and in college and practicing from sunrise, to sunset. it was work, work, work. >> almost 40. but i'm just saying. i'm finally figuring it out. these are great receivers. >> no slam on them but tom brady --

>> it's not them, it's somebody else and they're in the end zone. did you see his big coat that he put on? what was that thing? >> it goes over the pads, right? >> yeah. no, it did. it was cool. but anyway, now we know something of this mvp matt ryan lost in college. remember the last one? >> doug flutie. when rutgers played boston college. we got some of the reporters, maybe rutgers is going to the bowl game and he goes the only bowl they're going to is the one i got off of. >> and compared to let's get in the big 12. let's get in there. that's what i say to those guys. who we playing this weekend? ohio state. >> we're getting there. rebuilding the program. >> anyway.

they're rr going to face thee a atlanta falcons and the falcons beat aaron rodgers. i don't know what happens here. it's like the momentum and it just couldabout gets out of the way. miss the first field goal and a guy fumbled on the one-yard line. never any doubt about what was going to happen. quarterback matt ryan looks like true -- like unbelievable. this is great. we had had four great quarterbacks. now maybe the two best of this last year anyway are going to be in the super bowl. he threw for nearly 400 yards and four touchdowns. it was the final game of the georgia dome. this will be -- watch these next two weeks. we'll be soisk it by the time it comes around but the talk of tom brady and roethlisberger, he's

so tough. but if you had to pick a super bowl. these two, to be in it was maybe the way to go. >> m. night shyamalan's latest film blew away the competition, doubling forecasts. the psychological thriller which stars james mca voy was released by universal pictures. >> also how do you pronounce this? >> hugo barra says he'd be heading back to sillicon valley in a facebook posting, he praised what he calls a rock star start up but that his role had had impacted his health. >> because -- >> i don't -- >> because he's in china? >> i don't know the history of it. when we come back, a flood of

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♪ ♪ i'm back back in a new york groove ♪ ♪ i'm back back in a new york groove ♪ >> good morning, welcome back to

"squawk box" we're live in times square in washington d.c. in davos. take a look at futures at this hour. dow a little over 21 points off and the nasdaq off 10 1/2 points. making headlines this morning. mcdonald's set to release its quarterly earnings later, expected to report profit of $1.21 per share. and the latest letterer saying the average price fell 1% per gallon over that period and now hoi hovering at $2.36. and donald trump laying out a clear priority in his inaugural address. from fr more on what to expect, an advisor who assisted with

speech writing. a law professor at george mason university and author of -- and there's the name, the book. the way back, restoring the promise of america. in your view, frank, to restore the promise, what are the top three things to get out of the box with this week do you think from trump? >> i tell you it's not just about growth, but it's about how growth is going to be spread across the economy to people who have been left behind in our economy which has been pretty stagnant. one part of the picture is removing bearriers to entrepreneurship and what do we do to smak sure it's to americans across the globe? the book i wrote describes how we become a class society and i think that help hads explain the election big time. >> in hindsight, there had could

be volumes written about this, but the very top and very bottom were sort of the -- that's rr where the democrats were playing in the most recent one and suddenly the entire middle -- i would have never thought they'd go back to republicans because republicans were seen as favoring the 1%ers and not really caring about the middle class and suddenly the republicans became the cheer leader for the middle class again. it was weird. it happened without anyone knowing about it. it's sort of a third party trump thing. >> it was strange and what i did in the book. i'm a dual, a american and canadian. canada is really mobile and that's the american dream and it just moved off shore. we have a top 10% of kids who stay in the top and the bodm 10% is stuck where it is. we want to break things up a little bit more and make sure,

particularly people at the bottom are able to move up. bad schools and really the ravages of crime in american cities. he is going to really take a close look at that. >> it comes down to schools, obviously, right? but not just throwing more money at it. it's teachers unions and things like that. more student centric and not union centric. >> it comes down to choice. what we've learned is throwing money at things is not going to fix it. somehow it stays in the pockets of the teachers and never seems to effect their teaching. choices are going to make a big difference. betsy devos is dpgoing to be grt for kids. if they get choices, they'll be better off and even the public schools will be better off with competition. that'ser how it works.

>> this is the wall street journal editorial from his speech over the weekend to the cia. they write this was not a presidential performance. mr. trump may think he succeeded by breaking normal rules of politics but he's now president and americans expect a level of seriousness and decorm consistent with responsibilities of the office. he should meet their expectations. >> the people who voted for him, am many of them thought this is really broken and with hillary, it would be more of the same and with the other republican candidates, more of the same. so the more he was, let's say, rude the more people said yeah, he's going to do it. >> but you looked at those speeches over it weekend and you were satisfied with them? >> i was satisfied with the

inauguration speech. the speech that cia i didn't pay a lot of attention to. but the inauguration speech said i meant it. >> and what about the spicer news conference? >> the what news conference? >> the what? i'm sorry. >> the news conference. >> i missed that. i'm just talking about the inauguration. that's the big one. >> you're focusing on are the wrong things. that'san ancance lair things to about that trump actually did tweet busy week planned. with a hechby focus on jobs and national security. top executives coming in at 9:00 a.m. to talk manufacturing in america. >> good. get back to work. >> you don't have a view on which crowd is bigger, frank? if we don't get this squared away pretty soon. >> this is going to have implications all over the world. one message is that trade is

going to dominate everything with respect to our friends abroad. trade is going to help determine our military policy. we're going to look at countries underperforming. we're going to look at trade balances with other countries and that's going to effect our foreign policy and that's you and it's not a bad thing. >> all right. thank you. we appreciate your time this morning and see you again soon. thanks. >> thank you so much. when we return "shark tank" star launching a new hub in new york city. we'll give you a look inside. stay tuned. you're watching "squawk box" on. .

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i provide for my family. i will use my education to help my community. i will inspire our next generation of leaders. i am a college student, but i am only 1%. only 1% of college students are american indian. donate now, and help our numbers grow. ♪ ♪ welcome back to "squawk box." "shark tank" star launching a entrepreneurial hub.

>> well, good morning. damon john is a presidential ambassador under former president obama and he's hoping donald trump's business experience will have a positive impact. >> well, i can only hope it's good for business. i'm an american and my fellow americans elected mr. trump and i think he's a brilliant business person, no matter what we may think about him. his name is around the globe which means he obviously knows how to work with people. >> and he likes trump's direct style of negotiating with companies. >> love that because i'm sitting here with you because i will be here every day myself and not give it to an assistant and he's not like have your people call my people. he's like, tom, dick, harry, sarah, what are we doing? i heard you're not going to do it or i heard this is what you need and that's what business

people do. >> now damon himself is launching a new endeavor called blue print and co. it's members only. entrepreneurial hub right in the city for members who have inhad vested or raised $250,000 for their ventures, he's calling it the for us buy us. and a lot of what he said about trump being a business man and a lot of small businesses i talked to did like that style as well. >> and he's calling it what? >> fubu. that's his clothing company. so he's calling it the fubu for us or buy us entrepreneur. when we come back, investment ideas for the first 100 days of the trump administration. and we're going to take a quick check of the european markets. red arrows across the board. ftse down by 4/10th of a

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♪ welcome back to "squawk box." it is the first full trading day under president trump. let's find out what our guest

hopes think might be the best bet for investors. senior portfolio manager here to talk about what's working and what worked preinauguration and what works post inauguration if you think there's a distinction. >> i do. financials started doing better on brexit monday accelerated post election. while maybe a little ahead of themselves in the short-term, i assume they are going to do well this year. better economy, higher interest rates, roll back in legislation. >> you think still room to run? >> i do. how much years did they get smacked around, there's catchup, if it continues to go. >> one thing for people, look, we've moved so far already. there's so much waiting on this. there's not any there. i've also heard people say this is the longest recovery we've seen to date. in 24 months the longest to date. do you think bull markets die of

old age? what do you think happens here? >> we need excess to show up, for somebody to stomp on it, usually the fed. that's not in sight. if we get ahead on steam in growth it could short the cycle. i think we have a long time before we have to worry about that. >> real quickly to put a fine point on bank issue, are you interested in big banks or small regional players. >> big global players, bank of america, goldman sachs, more to go there as example. >> other industries. >> health care very controversial. the worst performer. i think you do a mix of things, biotech, celgene, biotech. what does repeal and replace look like. united health care will weather the storm and do well through this period. >> why do you like biotechs? it's eventually the view biotechs get bought out by big phar pharma. big pharma may take a hit if denver follows through on some

of the things he said on negotiating on price. therefore they might not have firepower to buy celgene or biotechs at the kind of sky high multiples they seem to sit at right now. >> my views, the multiples are not that ridiculous, not that much more than underlying pharmaceutical companies and much faster growth. i don't need a buyout. the big broad companies i think will be fine. >> what's the stuff that's not working? to the extent there are folks out there that are playing the market themselves and you just want to put out there that you are putting a caution on. >> stocks that look like bonds. again, believe the economy is going to get better, interest rates creep higher. stocks that look like bonds did did phenomenally well. >> name some names. >> utilities, some teleconnames, consumer staples. they are not cheap to begin w they have underperformed but

more to come. everybody loved, give me safety, yield, low volatility. with 2020 hindsight we bid the price to ridiculous levels. >> some telecom companies look different through deals they enacted or trying to enact. i'm thinking at&t or verizon specifically. is that a good thing or bad thing? >> there's a lot of competition. stocks not nearly as expensive as utilities. between those two companies and utilities i'll own technical. t-mobile is one of my favorite. >> as takeover. benefits with donald trump. >> lightning strike but own it without lightning. >> finally really talking about domestic stocks at the moment or multi-nationals based here. do you have any view on europe or asia? >> cheaper than u.s. without question but for a lot of good reasons. are they due for a rally? i think so but not with my money. they are in secular decline. europe and asia, declining

populations. how do you grow your economy? fewer people go to the mall every year. >> you'd like to think some of the stuff is on sale in europe right now. >> it is on sale. >> is there anything in europe you would buy right now? >> the question is there a big multinational in europe that has exposure every else that makes it more appealing. >> own multi national not domestic european company. that makes sense. >> great to see you. >> thanks. >> is day one today? >> first day of the rest of your life. you're going to love this. coming up this morning's top stories plus welcome guest host ed lazzeer. his take on policy goals for president trump's first 100 days. that's coming up. stay tuned. you're watching squawks live from the nasdaq in new york times square. w' drog ion

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. the first 100 days, a busy first week ahead for president trump and investors. a number of policy issues will be on the table in the oval office while investors await some of the biggest names in the s&p 500 to report earnings of breakdown of what to watch this week is straight ahead. hope for democrats. with republicans controlling congress and the white house, find out what democrats are planning to do to try and win back voters. congressman joseph crowley of new york joins with us a game pl

plan. >> the stage is set for super bowl li. >> touchdown new england. touchdown atlanta. early line for what's sure to be shoot-out in houston as second hour of squawks begins right now. > . >> announcer: live from the beating heart of business, new york city, this is "squawk box." good morning, welcome back to squawks right here on cnbc live. with becky quick and joe kernen. take a look at futures this hour as donald trump gets to work on what he's calling his day one. dow jones looks like would open off 20 points, dow down 20 points and s&p 500 looking to open off about four points. take a look at oil as well. we'll show you what a barrel cost these days, wti crude, 52.61 is the price. finally the dollar, which came down a little bit as the president-elect or now the president spoke on friday.

we're going to show you that dollar if we could as we flip the board around. you're looking at euro at $1.07. >> it is the busiest earnings season. most prominent names this morning restaurant giant mcdonald's reporting about an hour's time. here is something we haven't heard of in the last year upbeat comments about stock. goldman sachs added it to squix buy list. goldman says the automaker will benefit after strikeing a settlement with u.s. regulators over its diesel emission scandal. hilton introduced upscale hotel brand tapestry collection by hilton. the outlook saying it expects to add 25,000 new jobs this year. united airlines operations getting back to normal today after domestic flights were

grounded more than two hours because of computer outage. united said the issue was caused by technology that sends text members to pilots in the cockpit and they weren't able to get information they needed to push back from the gate. the airline was able to resolve the issue around 9:00 eastern. some customers experienced delays. two hours. nobody would like two hours. >> it could have been worse. we've seen computer delays that shut down for a day at a time. >> just in the normal course of commercial flights, you know, two hours. >> you think about the ripple effects of the entire country. >> it's bad. >> let's get you caught up on this yahoo! data breach. it ain't over yet. the now reportedly facing s.e.c. probe into its two massive hacks. investigating whether hacks should be reported to investors, on 2014 data breach that

compromised half a billion users. yahoo! -- it's amazing -- >> half a billion people. >> yahoo! knew about that incident two years before it reported it and has yet to explain why it waited to disclose that breach. all of that weighing or not on whether this transaction with verizon goes through. stock market moved up in large part because the deal still happens, the question a haircut to the price. >> can't imagine they wouldn't push back. >> or do liabilities stay with what they are calling -- what is that crazy name, alt baba, the extra company holding alibaba shares. >> that's interesting. >> that's what's interesting. >> baba -- >> i'm still, again, outraged over the fact consumers don't have much recourse in this entire situation. s.e.c. can do this. that's their purview to find out what was and wasn't told to

investors. still no rules of the road what any company has to tell consumers themselves. not just yahoo! but anybody that gets into trouble. for two years. >> how many? >> there's a number of class action lawsuits as a result of it. the question, though, is how you actually prove damages. have you to prove some kind of damage to your self as a function of the breach, which is very hard to do. >> usually damaging to the brand, though. >> shareholders are suing the company for that, too. >> what's the half a billion -- wow, half a billion, a big number or actually half a billion people that still have something to do with yahoo! >> we don't know how many are active users. >> active user. >> i know. she's so upset about it because she's a user. >> i think it's outrageous you haven't told people about this. >> what do you do on yahoo! >> not a lot anymore but i still

use it from time to time. >> good for you. okay. >> and a little more news for you this morning, washington news. sean spicer issued his first statement as white house press secretary saturday night but not without controversy. eam eamon javers. >> you couldn't have predicted first week of the administration if you tried. a wild one. let's start with donald trump himself who went on saturday to cia headquarters in virginia to make amends for divisions between the trump camp and u.s. intelligence community. he went there to try to improve relations between the intelligence community and himself. he ended up speaking quite a bit about how many times he had and on the cover of "time" magazine, also the size of his inaugural crowds disputing media reports disputing he was at war with the media. he also suggests media was to blame between the apparent rift

between the trump team and the intelligence community attachment a listen to that. >> at a teal when our nation and the world was watching the peaceful transition of power, and as the president said the transition and balance of power from washington to the citizens of the united states, some members of the media were engaged in deliberately false reporting. these attempts to lessen the enthusiasm of the inauguration are shameful and wrong. >> that obviously was not donald trump, that was sean spicer. we had the wrong sound byte loaded up there. that was the statement later on saturday. went to the press briefing room, gave a statement denouncing the media, didn't take any questions from the media. during the course of that sean spicer said several things that were just simply not true. that got a lot of attention over the weekend as members of the press tried to figure out how they are going to have this relationship with the trump press team. let's see if we have that trump queued up here on the visit to

the cia headquarters because that was important as well. >> they sort of made it sound like i had a feud with the intelligence community. i just want to let you know, the reason you're number one spot is exactly the opposite. >> so trump there speaking in front of the memorial wall, guys. that is the memorial to all the cia officers who died in the line of duty. i can tell you among former obama cia officials who spoke publicly about that -- that is comments on saturday, they were not pleased at all. we'll wait and see what the reporting says the reaction from rank and file members of the cia was inside the room. but a dramatic first weekend and more to come today, guys. can we just talk about the credibility issue and how much you think it matters. i know we talk about it the context between the relationship between the press and administration but what about the public and administration and when it comes to actually talking about truthful facts. >> right.

the public likes to believe the president of the united states is going to tell them the truth and the president's spokesperson speaking in the white house is going to tell them the truth as well. on this one, this dispute was all about something that mattered personally to donald trump, the size of his inaugural crowd as compared to other crowds. he stood on that podium. i can tell you i was standing very close to where donald trump was standing when he was sworn in. when you looked out it did look like an enormous crowd. from trump's perspective, he wanted to make that point. personally very important to him and apparently overwhelming other priorities of the trump administration over the first weekend including things they campaigned on, immigration, tax relief and others. the whole public focus was on this issue of crowd size. that's a relatively small thing, though, andrew. ultimately the american public is going to need to know they can trust sean spicer when they are telling the truth about big

issues that matter, economic, statistics and other things. those are the things -- kind of a low bar. kind of a low bar, right? we went through two press secretaries. i think of both of them in the way when i'm listening i'm not thinking this is unvarnished truth all the time. >> oh, yeah. press secretaries spin. the relationship between press and press secretaries -- >> caused demonstrations, of course, in benghazi, resulted in spontaneous -- come on. >> if you believe that and you think wrong it's absolutely wrong to be doing this. let's be principled about it. >> that's fine. i'm just saying it's not new. >> joe, here is the tactical thing, though. if you go out your first weekend and talk about things -- sean spicer said the first time news on the national mall and

demonstrably not the first time. easily checkable facts. if you're the trump team why do you go out on the first day and say things easily disprovable. >> probably down from '09 but up from '13. >> ultimately it doesn't matter. >> it doesn't. >> the trump team -- >> the kellyanne conway comment about alternative facts have you to layer on top the idea he said during his campaign he was going to release his taxes if and when irs -- >> i knew that. >> she came out and said now that he's president he won't. i don't know if you saw this republic piece over the weekend despite press conference about ethics and how he was going to remove himself from the process, they went and called all the different states to figure out if the trusts have been moved and none of it has happened. i think there's make real questions. then when the real stuff happens

and there's an attack somewhere and you want to find out did people die in the name of service a service and you get one number and it's another number that's when it's an issue. >> it's a credibility thing for the trump team. you only have a certain amount of credibility and political capital and it diminishes over time. how quickly you spend that is up to the trump team. they seem to have decided very on in the first weekend to fight a battle over crowd size simply unnecessary. it's obvious the trump team would draw fewer peel than the obama team simply the fact most of their supporters, large bulk of most passionate supporters are in the midwest and south, people in rural communities spread all across the country, ex urban areas across the country. it's not easy for them to travel to washington, d.c. whereas barack obama is very much urban city oriented crowd

that lives right in the area. it's an easier draw for obama, apples and oranges. >> there's truth to it and media response. truth, thin skinned, defensive, narcissistic, any of the things we saw for the year and a half for the campaign that everyone looked at. >> story if sean spicer. >> nets one of the gold star mom -- all these things that we talk about a solid week afterwards and we see didn't matter that much when it comes down toyota. it will never end because the same people -- >> what we think and what we talk about is not that significant. the question is -- >> if it isn't let's stop -- eamon, if it's not significant let's stop and i'll go ahead to ed lazear and talk about economics instead of doing stuff.

>> okay, fine. >> joining us to talk about -- actually we have to take a break because we -- we're going to get this crowd size thing down, ed, before we talk to you. we're going to settle it all because we have to. >> when we do come back in just a moment, ed lazear on the trump economy. future of the democratic policy. congressman crowley will join us after the break to talk about that. later earning season in high gear, 3m, boeing, chevron. today we get mcdonald's. find out what you can expect and where you should put your money to work. christine short will share her thoughts. richard lefrak of the lefrak organization will be here to talk trump, housing and much more. stay tuned. you're watching "squawk box" on cnbc.

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joining us now not to talk about crowd size but top priorities for the new administration, the lindsey group chief market analyst cnbc contributor ed lazear professor at stanford, senior fellow at the hoover institution. i'm going to start real quickly. so ed, you think what the stock market is indicating, and you

think that's probably the best thing to look at, it's indicating a gdp of 3.1%. is that for 2017? >> correct. that's right. so the best indicator of where we're going is not past gdp, labor market, not government but the labor market itself. if you look at historical predictions and ask who does the best job, essentially it's the market. because the market has been quite strong over the last few months, three months in particular, what the market is basically saying 3.1%. that's not 6%. that's certainly a far cry from what the new administration is talking about or hoping for. but 3.1% would be stronger, if true. certainly stronger than where we would have been in the recovery. >> apples to apples 3.1, including inflation and everything else, when it's 3% that we've been hoping for instead of 1.6. >> yeah.

3.1 is 30-year average prerecession. so that's where we should be. >> is it because, a, that the economy was ready to get above stall speed before anything happened? is it, b, anticipation of what's going to happen with trump? or is it animal spirits that become self-fulfilling. it could be all of those things. >> i'd have to say if i pick one of the three, it would be two. it's anticipation. when you look at what the market does, we're going to look at the future, figure out what the future looks like and capitalize that into current earnings. the market has as good or better information in aggregate than any single individual. so if i had to basically say who do i trust, i don't trust anybody. but if i have to trust something collectively, i trust the market. the market is essentially putting its money where its mouth is. that's the best predictor but based on where the economy is going.

>> i agree. the key component to get to that 3% growth is capital investment. it's been anemic in this recovery. are companies going to be encouraged by what they are seeing to invest more to get us there. if capital spending doesn't improve it will be more difficult to get to three. getting to three doesn't come in a vacuum. the unlucky nature of trump is he's got to deal with the legacy of bernanke and yellin that left him with interest rates so low now moving higher. i see 2017 and 2018 as tug-of-war between welcome relief tax regulatory policy but reality monetary policy and interest rates are tightening and how is the economy going to deal with that. >> historically speaking you don't think rise too rapidly, still talking about interest rates. >> yellin no question on short rates. it's a question of do long rates -- you saw a rapid move. hopefully gradual from here, we see a rapid move, market seems

to think 3% real and 4, 5, 6% knopf national, 10-year not 2 1/2%. it's going to be much higher. >> you're right. certainly in terps of the direction you're right. i'll be honest with you, i think that stuff is rounding error. if i'm thinking how monetary policy is going to affect year or two, a minor factor. >> that's the hope. >> no. there's so much going on in terms of what the new administration is promising, whether it actually happens or not remains to be seen. there's so much going on there that's going to dominate monetary policy. >> ten years would be good for me between where monetary policy isn't affecting anything. either good or bad. grow something, stimulate something, just let us alone, leave us alone. go away. we don't want to hear about it. thanks, peter. ed, you'll be with us the rest of the show. >> coming up congressman crowley on the democrats playbook. future of that party and futures right now. looks like open down 22 points.

"squawk" returns in just a moment.

welcome back to "squawk box." now that president trump has taken office minority leadership faces tough task of rebuilding fractured democratic party.

joining us house democratic caucus chairman and a member of the ways and means committee. we were just talking during commercial break. i don't know if i can say it but you said only one way and that way is up from here. what do you need to do? personalities. >> as we were saying off the air, we were at rock bottom at this point. i think one side it's been a very, very difficult year. it was a reversal of fortune. most experts predicted we win the white house, probably win the senate and come closer to recapturing house of representatives. none of that happened. so it is a time for introspection, a time to look back and see, look at ourselves and what was it about our message that did not get through. >> what do you think that was? >> look, i think our message is good. i think we're about the party of inclusion. we have been and always will be. i think our template that included all made some feel excluded and that was never the

intent. look, i come from a working class background. my father was new york city detective, went to law school at night. my mom was uneducated, didn't have a degree but was one of the smartest women i ever met. i think i have that personality -- i and others in our conference can be effective winning back those people. >> how effective, the postmortem on this, was the message itself versus the person delivering that message. >> we look at all of that. i'm fairly newer on the house in leadership not democratic caucus, i'm the chair of the democratic caucus at this point. i intend to use this as an opportunity to have people be more expressive and reaping out to the country and expressing why i'm a democrat and remind them as to why democrats. i think that's what's going to bring them back to the fold.

>> it was complicated, because the candidate at the top, not being the perfect candidate, doesn't explain what happened down ballot everywhere. it's not just the candidate at the top, it's the candidate -- president the last eight years. one thing i've noticed recently, some people like you trying to figure out how to recover from this. others are still in a bit of denial. i watched axelrod and others say 46% of -- is a low number. people didn't support trump, they talk about the popular vote. they leave out winning the popular vote in pennsylvania, michigan, and wisconsin, florida, ohio, north carolina. that is not the sign of an illegitimate vote. you've got to come to grips with something was wrong with your message. >> what i do see, joe, one of the point i saw on statistics, 40% of the americans who voted

for donald trump voted for him understanding not that he was unqualified but unfit for office. >> still voted for him. >> that's a clear message. clearly they did not -- they weren't hearing from us. whatever that is we have to be about fixing it. you came back to the point -- >> you said you're working class. you must have thought the party is way too left, still way too left. >> i'm a personal friend of secretary clinton. i thought she had the right message, it just didn't break through. >> thank you. coming up donald trump reversing a mortgage fee. a cut on his first day in office. a look at what it means for home buyers next. later some of the biggest names in s&p are reporting. find out what you can expect and what it means to your portfolio. g oubaifft

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welcome back to "squawk box." this morning we are live from nasdaq market in times square. among stories front and center, oilfield services company halliburton earned $0.04 per

share. $0.02 above estimates. said it returned to profitability in north america but slowdown in international markets is still playing out. so we'll watch that stock. also a white house official telling nbc news president trump will sign an executive order that will put renegotiating of nafta into motion. that order could be signed as soon as today. the president also expected to sign an order announcing his intention to withdraw from trans-pacific partnership trade against. he said he was going to do it. here we are on day one of his presidency. qualcomm responded to a lawsuit by apple call accusations baseless. apple had said chipmaker abusing monopoly position demanding unfair terms for use of technology. qualcomm says apple failed to acknowledge the value of the chip technology it developed. we now know which teams will be staying in the super bowl. it's li, l-i roman numerals.

patriots and falcons. yesterday tom brady took down pittsburgh steelers, 36-17. brady through three touchdown passes. the falcons and matt ryan beat aaron rodgers. 44-21. a lot of people think ryan will be mvp this year. he threw for nearly 400 yards and four touchdowns. it was clinical watching it. i haven't seen him that much. the final game at the georgia dome. the falcons are going to move into a new $1.5 billion stadium next season. the early line have the patriots favored just by three points over falcons. over under is currently 57. i don't know what that means. >> means a lot of scoring. >> over under total score. >> add together. >> that will be an exciting game

to watch. >> we'll see. once again, that's a consensus, which means 3-0. not with those two guys. that's probably pretty good idea there to go with that consensus. >> just like a soccer game. >> just like a soccer game. very similar. the fha, annual insurance premium cut would have gone into effect this week but no more. the trump administration said it would put it on hold in order to study it further. what does it really mean for home owners and home buyers as we look forward to the crucial spring season. diana olick joins us with so many things viewed through a political prism, diana. i saw "wall street journal" was giving kudos for getting rid of this, like a political gift on the way out to the housing industry by the obama administration. >> right. you could look at it that way but you could look at it from the other side they are concerned about fha fund. i'm not doing politics i'm looking at numbers. quarter cut in annual insurance

premium would have allowed 30 to 40,000 additional home buyers to qualify for a loan. that's according to national association of realtors. around 800,000 annual new f 1/2 a borrowers would have gotten a break which they sorely need given the spike in home prices. on a $190,000 loan, which was fha's average loan size last year the premium cut translates into about $40 per month or $480 per year. now, that may not sound like a lot, but the announcement of the premium cut two weeks ago, which wouldn't have gone into effect until this week sparked a 7% jump in applications to refinance loans with fha driving that. no surge in fha applications to buy a home. we might have seen that later. now, the last time fha cut its premium, which was exactly two years ago, a bigger cut, 50 basis points. as a result fha refis initially tripled for a while and then leveled off. applications for fha loans to

buy a home also moved higher but not quite the spike. that according to mortgage bankers association. fha estimates the 2015 cut helped 75,000 borrowers with credit scores below 680 qualify for a mortgage in just that year. now, it is possible that the hud secretary ben carson will make the cut later this year, but the odds are shrinking and it is not likely going to be in time for the spring market. backadiana, does anybody put together what that would cost in general. is it something that needs to be balanced out with the budget, is that why they got rid of it? >> no, it has to do with fha housing fund. they stepped in as only low down payment lender out there and they took a hit for that. a lot of foreclosures, delinquencies and their fund fell below where it was supposed to be. it is now above that. all the new loan fha insures are very, very solid, which is why they felt it was okay to lower

that premium back to where it really was historically. they had raised the premium because they needed to help the fund. that's the question going forward, how does the administration see the fund, do they see it as healthy or maybe want to help private mortgage insurers get back into the market more. it's going to be -- that's going to be the political question. >> you started with some numbers. i thought those were interesting. you said 30 and 40,000. even if they were all new homes and we think about housing starts, housing starts are about 1.2 million. at the peak of the building boom in 2006, 2007, we were talking about 2.2 million and long-term average is about 1.5 million. so the 30 to 40,000, while it sounds like a big number is not so large relative to the annual average number. but i think the more important point -- >> you're talking about housing starts versus 30 to 40,000 borrowers who would qualify for a loan under fha.

that's the big issue. we have a big problem, we need to build more homes definitely. getting people into the mortgage market, the hardest thing now is not affording a loan but qualifying for that loan. fha lowering the premium might have helped them to qualify for the loan. >> i understand that. i guess the point i'm making is in terms of getting economy going what you care about is building new homes. that's the major effect, not churn of old homes. so my question for you was essentially where do you think we ought to be in terms of housing starts, in terms of the housing number. >> a lot higher. >> a lot higher. >> a lot higher. we're at about 75% of normal historical average and we have pent-up demand out the wazoo. we need to get more homes built and more lower priced homes. that's the key. >> diana, real quickly, you also mentioned this is about government funded, government backed loans that are out there versus private mortgage market. i know a few years ago it was still at 90% of the market because taken up by these

federally backed loans. what is it now? >> it's still up there. we have not gotten the private capital back into the market. that's going to be gse reform. you want to talk about political hot potato going forward, that's going to be the story for the rest of the year, gse, fannie, freddie and how we get more private capital back into the market. >> thank you so much. our guest host ed lazear is here and we'll be talking more with him in just a moment. >> christine short on estamize will be here. your portfolio and putting it to work under the trump administration. top of the hour, richard lefrak of the lefrak organization with us for an extended interview. we'll talk about what he's expecting from this economy under president trump. "squawk box" will be right back.

welcome back to "squawk box," everybody. watching futures this morning, as can you see on this monday morning, looks like right now futures are in the red but just

barely. dow futures down 30 points below fair value. looks like s&p would close down close to 5 points and nasdaq down by about 12 points. >> earnings season kicking into high clear this week nearly a third of the s&p 500 releasing results. earnings expect freddie dow component mcdonald's this morning. joining us now christine short senior vice president. we missed the buffett thing. where were we? >> we were flying to washington. davos. >> everyone snuck in a burger, mcdonald's burger. >> that doesn't surprise me at all. that's kind of standard fair. >> that would be a good endorsement. >> yeah, the brand. >> of the brand. what should we think about mcdonald's? >> mcdonald's we're pretty bullish on. the estimize looking at 145, the

street a little lower at 141. i think you've seen this return to fast-food. it was fast casual for a while. now you've got a value customer out there looking at mcdonald's, wendy's, taco bells of the world and seeing value there and migrating back. will you've got starbucks on thursday. they should start to fear this like investment in the whole mccafe thing mcdonald's is doing right now. i think there's a lot of momentum behind mcdonald's heading into today's report which we'll get in the next few minutes here. >> i've had so much history with mcdonald's, i don't mean just going there all the time. the history goes all the way back when ceos got sick and stock went down to below teens, like $12. then you could see it, the demise of fast-food and mcdonald's greatly exaggerated. it ran up. the don thompson era got underloved, underappreciated. comes in and another huge move to new highs. that's kind of moderated. most recently it's come back a

little. what are we to think of his efforts, totally on track? >> i think on track. if you look, every arranges season for the last year they were able to put up beats when others weren't able to, innovation, investments into digital, marketing and mobile apps has been successful. >> that's one of the knocks how successful they have been now tougher comps, same-store sales a year ago when they reintroduced breakfast all day. >> that's been very successful. like you say, your comps do get more difficult so you'll see growth rate moderate somewhat. this morning we're still looking for a bead on both the top and bottom line. they are going to be one of the stronger fast-food competitors we see reporting earnings this season. >> you mentioned earlier some trends in the industry. how much of the stock movement you guys watch based on industry trends versus idiosyncratic company specific stuff. how much would you say is one versus the other? >> there's certainly winners and

losers. i think you're seeing a lot of trends toward fast-food and overall consumer trends getting priced in as you're seeing what people are willing to allocate money towards. look at the retailers right now. we're seeing a move away from investment into apparel and accessory, technology, health care, experiences both dining out and vacation. so we are starting to see that trend. it's being priced into these stocks. but again, you can go into each of these industries and pick winners and losers based on that competition. >> mcdonald's needs to refocus on trying to get in and out quickly and quality and freshness and all those things. they have gone back to the core, big macs. do they need to innovate in terms of whole foods. >> i think it goes over pretty well but at what cost. if you're going to mcdonald's are you really going for a

salad? those items tend to come with higher price tags. we see more salads, those items might not have gone over as well. people are going for big mac, if they can get it at the dollar menu, better value. >> that was the idea. >> right. >> how about alphabet or google. >> yeah. we've got google coming out this week. look, internet software and services are expected to be one of the strongest industries in tech. tech is our leader for the quarter. we're looking for about 14% earnings growth overall. revenue growth is half of that. we're expecting big beat from google, microsoft out on thursday. a lot of big tech names expected to drive the overall sector higher when we see more reports come out this week. all right, christine. thank you. it's an important earnings season. >> supposed to be the best since q 3, 2017. >> outlooks, strong dollar, all

kinds of things to estimize. >> we made it one. >> i've made a few. refudiate is better repudiate and better than refute. >> stronger. >> so if you can come up with something like refudiate, strat edgery, desire. >> housing and economy and a lot more. richard lefrak, we're going to talk to him. we're expecting earnings as we mentioned from mcdonald's in a couple minutes. the numbers and street reaction. all of that straight ahead. inue tchilli les everwhalecol b

a look at stocks to watch. wireless carrier t-mobile likely involved in consolidation transaction in the next five years. that's according to new jpmorgan report which puts the chances of that happening at 90%. the most likely scenarios according to this report a merge with sprint or takeover by cable company. t-mobile shares up by $0.38. verizon downgraded by wells

fargo. recent outperformance by verizon stock is not sustainable and consensus revenue estimates for 2017 are too high. >> okay. quick thoughts from guest host ed lazear. i want you to react, i don't know if you got a chance to see it, headline will trump deliver a growth miracle. he says don't count on it. in particular he quotes some research suggesting that, quote, u.s. historical data shows huge shifts in taxes with virtually no observable shift in growth rates. he writes by cutting top brackets does redistricting come from have nots to haves. that is why stock traders cannot contain their lead. that is what he writes. what do you think? >> i'm with him on one point. i think thinking about numbers like 6% are unrealistic. going back to what i said earlier, more in the range of 3%. i'd settle with 3%. i'd be happy relative to 2.

where i don't agree and he's probably ignoring important evidence, tax cuts can have big affect but virtually everybody that looked at this, tax experts, both sides, democrat tax experts, republican tax experts argue that the most important tack cuts are on capital. so if you're talking about the kinds of tax cuts that people seem to like, which are personal income taxes rate those don't have affect. cuts on capital do have effects. capital's mobile crosses borders. if you cut the tax here, a dollar or euro that would have been spent in germany moves to the united states. those are big and can be dramatic. >> speak to this, a question what the corporate tax rate will be also the balance with the debt, which is to say the big debate is whether you're going to have border adjustment tax. and if you don't, how do you make that up on the other side. i've talked to people, by the way, very close to administration who suggested to me maybe we don't do border

adjustment tax but much more aggressive numbers in terms of what we think dynamic scoring is going to be, if if you're skeptical suggests maybe we'll have larger debt. is that balance a fair one? >> you raised a number of points. first on border adjustment. this is when economists and businessmen tend to disagree because economists tend to think border adjustment is overrated in terms of effects, much offset by exchange rates. business people think we're absolutely nuts. that one i think depends on evidence still to come in. but in terms of debt, i like the point that you're focusing on, because one of the things that's really been ignored throughout the political campaign and also early days of this administration is thinking about the debt side, which is obviously something that republicans have worried about for a very long time. you can't have everything. you can't have more infrastructure. you can't have more spending. you can't have cuts in personal taxes and cuts in capital taxes

all at the same time without growing the debt. so the issue is what does that do to economic activity in the long run. that's one thing we need to focus on more. >> where do you stand on that. you were simpson-bowles, a lot of us at the table along with a number of ceos who may be changing their tune now. i don't know. >> i guess i'm closer to speaker ryan's view on this than i am to president trump's view on it. i'd like to see us move in a more moderate direction. but again i'd go back to focusing primarily on capital cuts. it would be not so much the rate cuts but rather expensing. one of the things he's talking about and probably get to in the next half hour when you talk about infrastructure is credit for infrastructure. that's not a bad idea but should be more general. it should be credits for all investments rather than cutting taxes on that. that's a much better way to get the economy moving if you do full expensing and immediate

depreciation, essentially bonus depreciation is a much better way to go. so i'd like to see us do something like that. i would want to make sure we have a more revenue neutral kind of structure. again, sorry, but one last point. you've got to do this on the spending side. you can't do it on the tax side. it's just impossible. go ahead, becky. >> the campaign on that. >> absolutely right. >> how likely do you think it is the the expense side is going to be -- >> in fact, he campaigned the other way. he campaigned against it. i think this is going to be a question of the wonks encongress, senator ryan who focuses on this, think about it night and day in dealing with the white house. the question will be who has the leadership in terms of actually structuring the actual legislation. >> we have only 30 seconds but can continue this next hour. have you mapped out at all the immediate impact of the repeal of obama care and, of course, trump has already begun taking those steps with executive

actions over the weekend. >> the question is when you talk about repeal of obama care, you have to think about what's the replacement. it's not true republicans don't have a replacement. they have lots of replacements. the question is which one ends up being there. there are two effects of obama care you want to think about. one is getting people on the rolls, insurance rolls, the other is keeping costs under control. in order to do the latter, what you've got to do is make people responsible on the margin for their care. if you do that and you do it appropriately, that's actually not a cost increase for the government, that's a cost decrease. the question will be how they implement that. i like a plan we had back in 2007, which is essentially a refundable tax credit, acts like a voucher, gives people essentially money to buy a plan. if they want cadillac they buy it themselves, creates right incentives to help on health care expenditures. i think that's the key thing. >> ed lazear, you'll be sticking

around, richard lefrak of the next hour. richard lefrak of the lefrak organization. wow, it's a coincidence. he will join us. we may play a little -- >> looking contemplative there. >> thinking about how to make america great real estate-wise. plus more on what to expect in the first 100 days of the trump presidency. check out futures at this hour, please. i'm not telling you you have to. we'll be right back.

getting down to business. president trump takes steps to renegotiate america's trade deals. our special guest this hour, longtime friend of president trump and real estate magnet richard lefrak. >> earnings alert. mcdonald's serving up results. we'll dig through the numbers. >> plus don't have a cow, man. candy maker mars investigates a serious skittle spell. ♪ ♪ skilgttle.

good morning, live from market square i'm joe kernen with becky quick and andrews ross sorkin. our guest host for the show ed lazear, senior fellow and a goodfellow. a senior fellow and goodfellow. future -- not a good fella, not that i know of anyway. futures right now are indicated down, as you can see 30 points or so. 11 or 12, closer to 12 on the nasdaq down 5, s&p 500. take a quick look at the dollar, which has come down recently after strong moves toward the end of next year. can you see euro back up to 107 which actually back up to, but it looked like it was going 104, a long way from 130. there's treasury, yields backed up a little bit. 2, 3, 6, 7 on the ten-year.

>> bring you results just out, earnings for restaurant chain coming in third quarter with a profit of $1.44, $0.03 better than street had been pantsants pagt. revenue beating forecast. looks like global comp sales up 2. %. that was better than consensus estimate of 2.4%. in the united states comps down by 1.3%. again, they were facing tough comps in the united states because a year ago was when they had rolled out that breakfast all day that was very, very popular. some comments from steve easterbrook, chairman and ceo of the company talking about how, he says i'm confidence we're on the right path as we pursue our goal as being recognized by customers as modern progressive company alluding a little bit in terms of the fresh food used there. mcdonald's up. >> calls itself burger company. the popularity of bugger companies in the last few years

was something people tried to move away from in certain ways. anyway, among other top stories we're looking at this morning, fox conn technology, building a plan in the united states. saying the facility could cost $7 million, create 30,000 to 50,000 new jobs. speaking at a foxconn event, he said the company would need incentives to make it happen. met with president-elect -- what was president-elect now president trump just a couple weeks ago promising to bring jobs to the united states. some people calling this a little bit of a hedge, if you will, between the relations between china and the united states for foxconn it is. yahoo! facing an s.e.c. probe into its two hacks. authorities investigating whether the tech company should have reported those cyber attacks sooner to investors. the investigation will likely focus on what was 2014 data breach that compromised information with half a billion

users. yahoo! knew about that incident two years before it reported it. it has not explained so far why it waited so long to disclose that breach. it's also a busy week for economic data. tomorrow existing home sales. thursday weekly jobless claims new home sales and friday durable goods, consumer sentiment and first read on fourth quarter gdp. now let's talk a little politics. president trump taking the first tep to tackle trade reform. white house official telling nbc news he'll be signing an executive order that will put renegotiation of nafta into motion. that order could be signed as soon as today. president also expected to sign an order announcing his intention to withdraw from trans-pacific partnership trade agreement. he promised to do both those things when he campaigned and here it is, it's happening. >> president trump is preparing for a busy first full week in office writing on twitter -- the long way of saying tweeting,

busy week planned with a heavy focus on jobs and national security. top executives coming in at 9:00 a.m. to talk manufacturing in america. no word who is meeting with the president yet. i'm not clear, andrew, when does he use potus and when @real donald trump. >> he uses both. >> is he going to keep both? >> apparently he wants to keep both. there are people who encourage him just to use potus. he wants to keep his own. unclear. >> do you think he could use potus to only say the kind of things you'd like him to say as a lofty presidential type and use @president donald trump himself to go after personal vendettas? >> i don't like the second part, as you know. i'd prefer he stick with potus, that approach. >> would you rather have him use the petty defensive @realdonald

trump, confine those comments there and combine lofty ones for potus. would that be a way to compartmentalize. >> i'd like one voice on one handle. >> what are you expecting? >> i'm not expecting anything to change. >> let's get to our special guest who may have some insight. richard lefrak, president of the lefrak organization. >> tweet adviser. >> he knows donald trump very well. tapped president trump to lead a new infrastructure council -- tapped by trump to lead new infrastructure council. good to have you here. >> thank you, joe. >> you have not been here a while. >> with becky. >> with any of us. >> you've known mr. trump for -- >> forty plus years. >> forty plus years. >> yeah. >> and as you would probably say, to know him is to love him. you backed him during the campaign but you live in new york. >> i do live in new york. >> you might not have been walking around with a big trump

sign. you're also in business. you have a lot of democrats living in how many apartments now, 40 million or something? >> enough. >> enough. tens of thousands, probably. >> yes, i'm a success -- fortunate man. fortunate man. >> you pick your battles obviously. now, though, you are trying to help the president with what he wants to do infrastructure wise. >> yes. he called me and asked myself and steve rolloff, another developer would help him on this infrastructure advisory council. the words he used to me when he spoke to me about it related to how can we do things smarter, better, stretch our dollars and think how private industry would think about getting things built. both of us are builders, so he thinks maybe we can be a little helpful streamlining some of the processes and helping decide

what's really an investment that has a payback and what's pork. >> on the twitter discussion we were just having, what do you expect? do you expect to keekeep @rea keep @realdonald trump. >> has he changed that much now that he's gone onto number one spot in the world. i said actually probably not. it's not -- he's not that different from the guy i knew when i met him, you know, almost 50 years ago. >> knowing him that well, are you scared? are you optimistic? are you tentative? are you all of these things? >> i'll dispel one, i'm totally not scared by him. you know, he's donald. he's not a scary guy. >> andrew, tell him, he's got the nuclear codes. you're not scared? you want to live, don't you? >> he's had them two days, he hasn't blown up north korea so

far. >> is he okay so far? >> donald, you know, he's got more good sense than people give him credit for, some people give him credit for. he didn't get where he got by being silly or stupid. he's a very shrewd guy. being president, it's a new thing, a brand-new thing. you have to find your way. if you read about the history of the presidency, who has experience in doing this? just former presidents, right? so nobody is prepared really to do this job. i'm sure when bill clinton came from arkansas, it was a culture shock. there was no -- there's no infrastructure, no matrix in your background. >> help us, though, with this. members of his administration and others have said, don't always listen to what he says, it's actually what he does and what he feels. so that becomes very challenging for those of us listening to his

words and then trying to make sense of it. >> i would agree with joe. i would say look at what he does, not always what he says. there's always a little bit of negotiating posture in a lot of the things that he says. now, if you're thinking -- i heard about nafta, for example, today. so he's always told the american public, hey, i want to make a better deal for you, okay? nafta is 15 -- is it 15 years old? it's probably a little out of date. right. so he's going to try to now improve it. okay? he may say i'm going to blow up nafta, you know, i'm going to get rid of nafta. i'm going to do this or do that. in the end in my mind what he's going to do is make a better transaction for people in the united states. as a new york real estate deal person and a very skillful

negotiator, he's going to take a pretty far out position to get the best deal he can. >> do you think he'll do the same thing with respect to the trans-pacific partnership? one of the things i must give president obama credit for is he renegotiated president bush's treaty with korea, which we couldn't get through congress and was effective at renegotiating it and getting it through congress. president trump could do the same thing. he could say, look, the tpp was flawed but that doesn't mean the concept is flawed. there are deals we can do with japanese and others that would actually move the economy forward. let me think about more constructive things along that front. any hope for that? >> listen, i'm not his trade adviser. >> right. >> i'm a person who knows him well. i'd say, yes, if he can find and do something he thinks is a better deal, he'll do a better deal but it has to do a deal that's good for american public. >> richard, let's talk about infrastructure, which is where you are, his adviser and his guy

on this. looking at infrastructure, looking at how things have been done in the past, what are some of the immediate things you can think of that would be a better way to get things done? >> well, we're just starting on this process, but everybody knows for example a major product in the united states just to get the approval takes 10 years. that's wild. that's insane. that's to use his word a disaster. he's going to want to try to get things done more quickly and examine the processes that have created this kind of tangle on these kind of projects. >> you're not just talking about fasttracking particular projects. >> no. >> talk about changing the way. >> trying to change some of the processes. then if you look at let's say the famous "air force one" -- >> cost structure. >> cost structure. >> he said it's crazy, two planes for $4.5 billion.

that's crazy. he called up boeing and said, hey, what can you do to make this good and make it better for american public and less expensive for taxpayers. so he wants to address these things like a businessman. when i went up to see him, he said to me, hey, i've got to get people around me who are going to make government more effective, more efficient, to get things done more quickly, better, and stretch the dollars of the taxpayers here. so i think one of the things he's asking us to do is to try and apply that to the infrastructure. now, the thing with infrastructure which is interesting is how do you define it today? is it clean water and good bridges? is it internet in every public school, every school, high-speed internet? what's the world going to look like when cars are automated? how do highways work? there's lots of things. it's kind of like the sky.

infrastructure means everything. to some people means fix a pothole in the street next to my house. to other people it's clean water. to other people it's think about the future. now, one of the interesting things about it is the federal government really can't affect it that much, because it's mostly done at a local or state level of the federal government feeds money to it, okay? but they certainly can put conditions on the money to force the states to work more quickly, more efficiently and also to help prioritize the things that will have a payback. >> can you talk -- we're going to go to break. >> slip in a quick break. for me it would be every tv has xfinity. it would be the infrastructure where everybody is able to have -- >> the the best of all possible worlds on your television. >> you don't even have that in the city, do you? >> no. >> we've got to work on this

infrastructure. >> only cnbc is the only channel. >> the only channel. >> up next digging -- i wish we were digging into big mac plus mcdonald's earnings or hot cakes, sausage mcmuffin. analysts can't bring them. the next half hour, next 100 days, trump's policies and how they are going to impact the markets. plus a new world order former congressman jackson kingston will talk about future of u.s.-russia relations. stay tuned. you're watching "squawk box" on cnbc. e group avavitie e u rglalke

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welcome back, everybody. mcdonald's out with its earnings just agents bit ago beating estimates on both top and bottom lines. joining us right now is senior restaurant analyst at morningstar. r.j., numbers are better than expected what really jumps out at you from this release. >> they were better than expected. if you look at the international numbers across the board, international, growth markets, shows operational improvements they put in other markets

outside the u.s. that worked pretty well. that said u.s. encouraging, too. we always expect them to be negative after all day breakfast, two-year stat numbers, plus four, pretty encouraging. i think the mcdonald's story is still on track there. >> the initial reaction to the street was to bid the stock higher. you can see right now it's down $0.63. why? i didn't see anything bad in the report. >> i don't know if there's anything bad. i think the market might have been looking for next shareholder return market. mcdonald's does that on three-year increment basis. looking for 2017 and 2019 cash return targets. there wasn't anything in the print on that. that may be introduced later this month, analyst date in march. that might be the story here shareholder return targets, we think between 15 and $20 billion, less than $30 billion the company did this past round. but you know -- $30 million, sorry. this is something that's a big part of the story here. that's what they may have been

looking for. other than that i think it was pretty much right in line with what the market was looking for. >> the stock has been doing very well recently. is that something where you look at it and think the stock is expensive or still a bargain buy? >> i think it's slightly undervalued. i think i would be looking for a better entry point. i think there's a lot of things positive. i think on the operations side, the company will be talking about things, life after all day breakfast. i think interesting things across the nation here. i think cash and targets we just mentioned also a big part, too. the impact of refranchising, not only china transaction, look across the world, that a positive catalyst for stocks. looking cheaper but positive on long-term basis. >> what's your favorite stock in the sector. >> right now panera is our favorite name. we have $250 fair value estimate. i think that's interesting here they put a lot of improvements customers are looking for whether it be technology, mobile ordering, making it a much more convenient experience. i think that's what all restaurant customers are looking

for. they have done that at company level. they are shipping responsibilities to franchisees. that's on the radar screen. large cap, starbucks still worth it, very compelling long-term story. >> r.j., thanks very much for joining us. >> thank you. meantime let's getd back to richard lefrak, president of lefrak organization, longtime friend of president trump. ed lazear is here. mr. lefrak you've been working to advise the president on infrastructure. what is the first thing you think he'll be able to put in motion? >> well, i think he has to come up with a financing plan. i think there's going to be a tug-of-war between conservatives and republican party concerned about deficits and a president who is concerned about jobs. i think he will prevail ultimately because he wants to put people to work. >> the number we're talking about here, a t or b. >> i think he'd like it to start with t but i think the number

i've heard tossed around is about 550 billion. >> one of the other issues is what a private-public partnership looks like. wilbur ross asked a little about this last week, the role private equity and others may play, whether private equity wants to spend money on certain projects that may not ultimately be as profitable but create more jobs long-term. >> well, if you are taking private dollars, it means you're taking dollars in that are going to get a return, whether it's wilbur's plan in which the return is a tax credit or it's a cash flow out of a project. it's a different type of project than a project that could be, for example, the repair of a bridge or road, something like that. which would be more meaty in terms of kraelgt jobs or big project where revenue is associated with it but has to go

through this complex approval process. >> so how do you change that dynamic, the idea of repairing roads quickly a job but not long-term versus big project like new bridge or buildings or other things that actually create jobs but take you two or three years to get off the ground? >> i think that's a delicate balance that has to be weighed. i think part of our assignment with the president is to try to advise him the best we can on the merits of these different things. there's a lot of politics involved in obviously anything related to infrastructure, too. there's pork involved, how much am i getting for my district. congress is the one that appropriates the money. it's not a simple -- there's no simple answer to any of these things. >> can you make it streamlined as you've been tasked with doing as a simple businessman? >> i would hope we can do that.

come back in a month or two, maybe i'll have a better answer for you. >> throw out a number. when i was in government we had an estimate that said for every dollar you spent department of transportation one of the faster ways to get money into the economy, about $0.25 of that dollar is spent in the first year and the rest trickles out over the next 11. the point is, goes back to what you're saying earlier, so much regulation, takes a very long time to get things through. i guess what i would say is we don't want to suffer delusions of grandeur getting money into infrastructure. there's lots of infrastructure. i guess my view is creating jobs is unfortunately secondary simply because it's not effective in the long run, it takes too long. do you think president trump has

some magic in terms of turning things around? >> i'd like to think we can escalate the time. there must be ways to do it faster. i would like to think we can help him select areas of focus that are really in investment that will have a big payback and multiplier affect. there's no question there's a crying need to fix roads and bridges and we all know that. i'm sure some of the money is going to go into that as well. and you know, the political process is what it is, so nobody knows how the scramble is going to get unscrambled just yet. >> have you already begun looking at various places around the country where you might want to look at infrastructure? >> no. >> he talked about rust belt as an area? >> no. we haven't really looked at anything. what we're looking to do right now, mr. ross and myself form an advisory council, study the

problems and get back to the president in a reasonably short period of time with some sort of report that will look at many of the things you've raised today. >> you know, richard, we talk an awful lot about how gdp could grow significantly under this administration if regulations are stripped down, if other things happen. but some of the market people we talk to also say, look, you may not see any real impact until 2018 and beyond because it does take time. you're looking at this from your perspective and how it takes place. does that sound like something that happens this year or are you thinking it will take time to get things running. >> take time to get things running. there are immediate things that probably can be done that will be helpful to gdp, helpful to creating jobs. i don't think it's all of one thing or all of the other? i'm sure that every state highway commissioner will be happy to come out and put his hand out and say i need money for this or that and i can get going right away.

>> you've done work on that as of dodd/frank when it was legislated drop-off in spending and financial services. >> absolutely. if you look at job creation, jobs coming back in finance after the financial crisis, 2010 dodd/frank comes in, it just takes a sharp dip. >> ed, we'll continue this. richard, thank you, we'll continue this. some news about sprint and jay z when we return. we'll give you the details when we come back.

good morning, everybody. welcome back to "squawk box" on cnbc. we're live at nasdaq markets in times square. let's talk about stories front and center. sprint announcing a deal to buy 33% of title, the music service founded by jay z. this deal gives customers at the mobile service provider access to all of title's content. it will see sprint ceo join the board of directors. >> that's a pretty big deal and actually could change dynamic for sprint in a way. people have talked about the type of artist jay z has been able to track and exclusive content. talked about spotify and apple music and exclusives they had, unclear whether it changes games for whether people sign up for one or the other but this could be another reason for sprint to get ahead in a time where it's looking for anything it can against at&t and verizon. >> don't they have the guy. >> which guy? >> the guy, the verizon guy.

that's all they need. >> the ad. can you hear me now? >> that's why geico gecko is a really good spokesman, he can't trade up and go to anybody else. >> why not? >> you own him. >> he can do what he wants. oh, he's not real. he is a voice, a voiceover. >> so did godfrey. kroger latest company to announce it's adding new workers of the supermarket expects to fill 10,000 permanent position this is year. gasoline prices down a little over one cent over the last two weeks, that is according to latest lundberg letter. that puts average cost $2.36 a gallon, $0.46 above what it was a year ago. let's get more on what to expect in the first 100 days of the presidency. what does it mean for investors. joining us chuck gabriel, president of capital partners.

good morning to you as we try to make sense of where all of this is headed. this is day one of donald trump's presidency when he's going to be physically in the office making decisions. what do you expect and how do you think investors should think about this at this point in the game. >> i certainly don't think they should be in any way detoured from their bullishness on basis of fairly surly weekend demeanor of the weekend. that's no surprise. first orders about as expected. we've got a hiring freeze. he's announced this morning or will that he's going to renegotiate nafta. at least some signs of moderation. he's at least for now not going to label china as currency manipulator. build a wall with mexico but not freeze deportations on children of undocumented aliens. so that plus some of the positive -- some of the moderating comments from steve

mnuchin on volcker rule and they might nominate even handed vice chair for the fed should be seen for those watching inside baseball signs of moderation and pretty good start. >> let's talk about inside baseball. you called it surly this weekend. david cumberland says i think a stock market correction is building. he says the more trump sends a mixed message, the worse this will get in my opinion. this in the morning money. does that make any sense to you? >> it's funny, guys that you that write a lot, me, too, we love using words like dystopian which we don't get to use very often. andr andrew, i guess it's predictable a month or so it's exactly where it left off the end of the year or started the year. you know, there's a lot of

impatiei impatient. worried might get more of a boone with trump. expansion might end on regular basis in a couple years so people worry about recession. some people are actually thinking bonds might look good again, will be on over under of two or three hikes. if you actually have a lot more energy production, energy prices could fall. so we're going to have a period of distraction here as we begin this long slog towards tax cutting and deregulation agenda. people are filling that void. >> chuck, since most of the optimism i think among executives investors is based on tax cuts and perhaps deregulatory measures perhaps along with infrastructure. walk us through the math on the tax cuts. the inside baseball of where you think that number might land and what that maps out to. >> yeah, andrew. the problem that we're going to run into is that republicans are likely in order to maintain 52

votes or a simple majority in the senate, very narrow margin are likely going to need to adhere to revenue neutrality. the way the house proposal everybody works two revenue raises, assume new revenues from the repeal of the deductibility of net interest for corporations and then it has this border adjustable business tax flow tax which is very controversial, which would raise prices at the gas pump and at walmart. if either of those but particularly business adjustable, border adjustable tax falls out, you don't broaden the base and you don't lower corporate tax rate from 15 to 20, maybe only stops at 25. i think that's creeping in as a new conventional wisdom. >> can i just say 25, the effective tax rate for s&p 500 is 23%. so while it would help certain domestic companies to get down there, our part of the s&p, it doesn't necessarily get you where i think the stock market is today. am i right on that, ed?

>> yeah, exactly of i was going to ask something to the point andrew just raised, how big is the effect? the effects seem to be pretty big in terms of tut capital taxation. we estimated 5% effect on gdp growth. the clinton administration estimated 9%. so those are big numbers. i don't know if they square with the kinds of things you're thinking about. the other thing i wanted to follow up on andrew raised earlier revenue neutrality. a lot of this depends on dynamic scoring and how you score it. the question is what kind of growth figures will build into this to offset those revenue losses as a result of the increases in tax breaks to capital. >> we would absolutely expect that you have more of a measure of dynamic scoring than we've had in the past. the senate parliamentarian has signaled some receptivity to

that. this is an exercise with upfront expensing and repatriation. what's more worrisome to us this is going to be such a food fight, it could take throughout much of the year. that will call into question whether any of those good things could happen. >> you didn't address the point andrew made, which is the rate is already below where we're cutting it to. why would you give this big, extremely bullish scenario for doing it when it doesn't get below anyway. address what he said, not true? not cutting rates? >> what i thought andrew was saying, the normal rate 35% but effective rate is 23. >> only 24 what good -- >> effective rate is going to go to 17. >> okay. thank you. should have answered -- it does go below, doesn't stay above. the effective rate is also lower. the effective rate around the world is lower than the nominal rates we have as well. we never go into that. >> thank you very much for

joining us. when we come back future of u.s. russia relations former congressman jack kingston will weigh in when we come back. i'nnou w

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when we come back, trump on the world stage. former georgia congressman jack kingston just back from moscow. he's going to tell us what business leaders there want to hear from the trump administration. "squawk box" will be back in just a bit. .

nbc news reporting president trump will sign an executive

order that will put renegotiation of nafta into motion. joining us right now is jack kingston, former u.s. congressman from georgia who served as vice chair of the republican conference. kingston served as trump senior adviser during the campaign and recently traveled to russia last month to brief u.s. business leaders there on what to expect from the trump administration. sir, thank you for joining us this morning. >> thank you, becky. it's great to be here. >> let's talk about first of all your trip to moscow. what happened on that trip and what did you tell the american business leaders there. >> well, i met with a number of business leaders through american chamber of commerce and also ypo, young presidents organization. these are pretty serious, large businesses, procter & gamble, boeing, 3m organization, caterpillar. caterpillar tractor, for example, has been in russia since 1930. most of these companies had been in russia for over 20 years, probably 30 would be the average

of any of them. so you know, they have seen lots of presidents come and go in the united states. loo lots of leaders in russia and soviet union come and go. they believe engagement in that economy is important for national security for both nations. you know, they would like to have normalcy and realize tensions between soviet union/russia and america. normalcy is something elusive. i think there's one really good thing that obama did. he set up a russian american business council. unfortunately it was short-lived. he disbanded it after russia invade crimea. but in the meantime there was a format for formal communications and cooperations and discussion. and i think that kind of structure could be constructive in the coming administration. now, at least i don't know the down sides of it. it's not cozying you have to

putin but being a pragmatist and talking to a nation, one that could be an ally, adversary and just like china we need to be engaged with them. >> you make some good points making sure we're engaged and talking to the business community there but that's a long step from normalizations. do you expect to see sanctions lifted any time soon? >> i don't think so. i think there's too much opposition to that in both parties in the capital. but i pointed out at the time that the sanctions have been in place long enough to know if they are effective or not. i think that the question is they haven't been effective so do you make them stronger, more sanctions, or do you abate them in some way? the administration is going to have to discuss that i don't think anybody would say these sanctions had been very effective. >> sure. is there a way to do that, end the sanctions without looking like you're totally rolling over, though? >> i think there's a way. trump is, of course, a

negotiator, a guy who makes deals. if you could say, listen, we need your help to defeat isis, we need your help in sir yarks we've been on the opposite side in syria, it's been a human disaster. it's the largest refugee crisis in the world. unfortunately in this election syria was not as big of an issue as many of us would have liked to have seen but we have got to address syria. you can't do that without russia being at the table. i think probably it would be better to deal with russia in the league than iran. but at the same time you've got this growing terrorist threat. former secretary of state kerry tried to deal with his russian counterpart to combat isis. maybe that could be the first step. i think i agree with you, we're a long way off from normalization but i think cooperation is a different matter. picking up where kerry left off might be a first step. >> you know, you mentioned

immigration and some of the things going on with syrians and others. the president has said certainly during his campaign he wasn't anti-immigration just anti-illegal immigration. one of the things we need to be looking at is how we reform our immigration system. is that anything you think he might be on? if so, what would you suggest he look at first. >> i think what he's going to have to do is start enforcing existing laws. that was one of the great frustrations, whether they were undocumented parents who had american-born babies or children who came over here without adult supervision. enforcing currently laws, cracking down on sanctuary cities, perhaps even saying if you're a sanctuary city in america and breaking federal law and not cooperation, there would be some penalties in terms of federal grants and moneys. so i think there's a lot that he can do. the wall itself in areas like

san diego have been very, very effective. might not be so effective in more rural and remote areas, but the construction of the wall was something that was actually passed by congress in 2007 and included hillary clinton voting for it by the way. so funding the wall is a different issue, but it is going to be one of this president's top priorities, and we will see more in the weeks ahead. >> congressman, i want to thank you for your time today. >> thank you. >> okay. when we return, we're going to check in with jim cramer at new york stock exchange. we'll get his take on top stories when "squawk box" returns in just a moment.

donald trump beginning his first full week as commander in chief. in the week following the inauguration of a new president, inauguration of a new president, the dow and s&p tend to trade and they're absolutely right. they say that it's hot... when really, it's scorching. and while some may say the desert is desolate... we prefer secluded. what is the desert? it's absolutely what you need right now. absolutely scottsdale.

let's get down to the new york stock exchange. and jim cramer joins us now. you've been following everything that's happened in mcdonald's very closely. how are the numbers today, jim? >> i thought the numbers were fine. i think that the rap is all-day breakfast is running out of steam. my problem with that rap is if you go through what easterbrook is doing, he has a lot more levers than that. i think there's things he can do with loyalty. i don't care for the loyalty plan right now. it's not that aggressive. people want to give up on him and every time they do he comes up with something new. so i'm not thinking this is the

end of the mcdonald's rope particularly because i think there's some good same-store sales around the globe. >> with what you know the other companies reporting this week, what do you think is going to be most significant? or are you looking forward to seeing to factor in to, you know, the whole equation of what's happening around here? >> well, first i think the narrative of the strong dollar's going to hurt companies is really overblown. you've got to look at what proctor said. it's kind of a big rap that i think is not going to pan out. i think what's happening is the economy's getting better. economy worldwide is getting better. whether it be europe, asia, us, it's a story people don't seem to want to tell or is obscured by current events and is really wlast going to determine the earnings. i think people have to forget necessarily everything is determined by washington and start thinking some things are determined by companies. >> right. but we will see some -- we're going to see some things, some action this week that could affect -- you know, not tweets, actual action. >> i was just going to tell you -- >> oh, yeah, definitely.

>> i was just going to tell you eamon javers is standing by the white house, there's a group of executives expected there at 9:00 a.m., we didn't know who, he's watched kevin plank, elon musk all walking in right now. >> yeah, these are people who are widely -- well, not plank, the others are connected with the president. look, i would just point out that as much as i think what matters about trump -- what happened this weekend as an important thing you talk about, what i'm dealing with are the companies. and the companies reporting pretty good numbers so far. we had a big week last week, big week this week. i'm not seeing anything that makes me disturbed yet. >> okay, jim, thanks. see you in a couple minutes. >> thank you. >> and tomorrow don't miss a big lineup on "squawk box," liberty media, ceo greg mcfay, mlb commissioner rob manfred. all be here. stay tuned. hryningef

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our guest host this morning hoover institution's ed lezier. so you have some nonconsensus opinions about things. you're not sure infrastructure necessarily is great for jobs,

that's not what people think because when you do infrastructure you need to hire people to do the jobs. and no infrastructure is permanent, but that doesn't mean you shouldn't do it and the jobs aren't real. >> absolutely. i agree with that. but again, i think we're thinking a little too small here. we're focusing on the details, which we need to do of course, but when you're starting an administration, usually a president sets the theme with thinking about big things, what do we have going for us. and actually we have a lot going for us. so let me sort of leave it on something positive for a change. >> okay. >> economists don't usually give you positives, but there are some. you know, if you look at the history of the united states and our economy in particular and you look at where we've been and what we've accomplished, it's really an amazing story. it's a story unmatched by any country in the history of the world. >> we have the secret sauce as buffett said. >> absolutely. you look at where we were relative to the united kingdom back in 1900, we've cooked everybody. we've beaten everybody. the question is what is it that causes that? i would say there are a few

things we have going. one is we're industrious, the other is we're mobile, the third is we're low tax and the fourth believe it or not is we're actually a welcoming society. we work harder than anybody else in the world. we move to opportunity unlike anybody else in the world. even in the labor market. look at the amount of churn in the labor market. every year 40% of the jobs turn over. every single year. that's amazing. taxes. you know, i complain about high taxes. i don't like what the last administration did to our tax rates, but even then even with that we still have a 25% tax to gdp ratio. france and italy they're at 45%. we're way, way lower. and in terms of welcoming, look at how we integrate immigrants. you look at any other country, any g7 country their immigrants have higher unemployment rates than we have. our immigrants have a 10% lower rate than the native population. we've got a lot of things going for us. i think we can look forward to a positive future.

i'm hopeful. >> that's -- you had a minute and a half and it was perfect. thank you. for an economist that was pretty optimistic. >> only hope. >> thank you. >> "squawk box" has a lot going for it too. and rebecca. >> sure we do. i think so too. thank you for joining us. >> thank you. >> that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ 100 days, 100 nights to know a man's heart ♪ president trump at the white house this morning meeting with ceos to talk manufacturing as the clock begins on his first 100 days. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures just below fair value as we watch the white house and the busiest week of earnings season. more than 100 s&p components will report this week. some weakness in europe today. oil is up as opec this weekend sees good compliance on that production cut. our roadmap begins with trump and trade.