>> 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. manufacturing ceos meeting at

the white house this hour as president trump sets renegotiating trade deals atop his early agenda. we'll take you there live. >> plus, the mcdonald's turnaround taking shape. the fast food giant reporting earnings and revenue better than expected. >> and cyber scrutiny. yahoo facing an s.e.c. probe into its two hacks and whether investors should have been al t alerted to those attacks sooner. first up though, all on first monday on the job, quote, 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. we have some idea who that will include. we've already seen elon musk and kevin plank go in. but andrew leading the group. hayes from utc. fields from ford. big group. >> yep. when you look at this makeup, andrew obviously close to the president, one of the first people named to his group of adviso

advisors. we know the -- >> we know he was close to clinton. >> he was close to everybody. one thing he's done is equal opportunity political. fields builds the most cars hereby -- >> that's not true though. >> no, as a percentage. >> of percentage of overall? >> of overall production. 100%. >> oh, well, yes. >> although morgan stanley had that out with a trump stock. have kevin plank he did tweet he's there because he's a u.s. citizen, patriotic citizen. but my issue there is where do they make their stuff? and does that matter? particularly in the confines of nafta, which took away a huge number of our apparel jobs. that's well documented by commerce. >> speaking of which the president has already signed

executive actions announcing his intention to renegotiate nafta. >> right. >> withdraw from tpp. >> yeah. >> delay or waive any federal implementation of the affordable care act. and that's just on talk about keeping your promises on day one, jim, is exactly what he said he was going to do. >> we need congress to be able to repatriate, congress to be able to cut corporate taxes, but we saw here sheryl with an unbelievable note here's what the deregulation of aca would mean. it means you've got to sell the hospitals. they are the adverse selection that would come from this leave hospitals at risk in 2017 and pretty much obliterates exchanges in 2018. she reiterates her favorite united health because that's pretty much cleared and gotten out. trump wants to replace -- anyone familiar with how much it costs for health care knows that as sheryl says that would be about three months of health care. >> now, in terms of more broadly

speaking of the market, any reaction to the inaugural address and what many people see as sort of its -- well, certainly america first, but protectionist theme? >> well, you know, i think that the -- it's funny because when you look at what news is generated, you know that the communist party put out some things about how democracy doesn't work, but then foxconn, we start hearing about foxconn wanting to build here being everything is an arm of the communist party. >> some reports about putting a new factory in pennsylvania. >> well, i thought that was shocking. that was to me -- >> considering. >> considering. was part of masa son's piece of paper that he had. >> but why is it not talked about? that would be monumental. >> it is being talked about. >> well, by us. >> well, it hasn't happened. >> no. >> earlier today saw you're going to see companies fishing for incentives? >> well, i think foxconn is part of the communist party going to

start building here? >> foxconn industries is an arm of the communist party? >> everything is. >> it would be interesting when you think about protectionism and foxconn's place and the relationship between china and this country how that will be impacted by protectionist theme in this administration or certainly the america first because of course they employ what a million people? >> i know. many make iphones which are then sold back here. many are sold in china too. >> no, look, nafta, one of the things he can do is deregulate. that he's doing pretty rapidly. the aca, i mean. >> yeah. >> there's a lot of implementation that is required by the executive branch. and you can stop the implementation. you can reverse it. >> right. >> one thing i think people think about is no penalties for people who are no longer under the exchanges. >> exactly. so who enters the exchanges? perhaps the people who -- >> well, that's unfortunately been a problem overall with the

law. >> but people have been buying the hospital stocks like there's no tomorrow in the last few weeks. i question that. based on this level of deregulation that happened pretty quickly. >> so we got this meeting with ceos and some union officials and american workers later in the day. we're going to have a vote on pompeo and tillerson. it's going to be busy in washington. let's get to eamon javers and get the setup. >> good morning, carl. it is busy here in washington. a little blustery here in washington too this morning, rainy and windy at the white house. the ceos meeting has begun. the ceos are in the white house. i talked to a couple of them on their way in. i saw elon musk on his way into the west wing here. i also talked to andrew liveris of dow. he's not here to make any job announcements, said he's simply here to listen and also talked to kevin plank of under armour as he was walking in. asked him if he was given an agenda for this meeting. said no, he hasn't. said why are you here?

any job announcement? he said no, i'm here because i'm a good american. that's the attitude of the ceos on their way into the meeting. we'll wait and see what transpires in that room and we'll do our best to get some information from them on the way out if donald trump has any specific marching orders for those ceos or if they come up with any specific new ideas we'll bring that to you as soon as we can. but those ceos are here in the white house. and this white house focusing on jobs and manufacturing right from day one, guys, back over to you. >> eamon, we'll be coming to you later on this morning for some details as we get them. our eamon javers in washington. turning to some corporate news this morning. mcdonald's better than expected fourth quarter results. $1.44 beats $1.41. global comps up 2.7, best number in about six years. but u.s. comps were down 1.3 from a year ago. mc citing a challenging comparison against the launch of all day breakfast which, jim, believe it or not it's been a year already. >> i think one of the reasons

people were surprised the stock was down given those powerful numbers is people feel that's the only thing easterbrook has in his arsenal and now it's going to be annualized and he's going to lose that. i would tend to think that's a short sided view of this man who is just beginning to make a lot of changes. i'm not just talking about the three different kinds of. >> big macs. i tried the grand mac, this weekend. >> you did? >> it's quite good. you do need two hands. >> that's incredible. >> thanks. camera adds ten pounds. >> he worked it off. >> people are so quick to decide that easterbrook -- they buried this guy a million times. i talk about the fact there was no strong dollar reference in that release. qualcomm is the one that is down the most today. and i like that. mcdonald's is down and i would take the other side of that. i just don't think mcdonald's honestly, i don't think mcdonald's is bad. i think qualcomm's bad. >> i'm going to talk about qualcomm later. >> do you have the faber report?

>> i do, i think so. >> oh, shoot, sorry. didn't mean to jump the gun. >> i want to hear what you have to say. why do you think mcdonald's should not be down? >> i think if you just read this as it is, you're ignoring the fact he did have better worldwide comps. you're ignoring the fact he's refranchising what's left. and you're saying, you know what, that u.s. minus 1.3 versus minus 1.4 shows that the string is played out. that ignores everything he's saying about technology. ignores everything he's saying about loyalty. loyalty program i think has come up short so far, but let's hear what he has to say for heaven's sake. the idea we make a judgment these good numbers are bad is based on a negative bias. >> yeah, i'm looking at some other competing wire service headlines. all day breakfast has lost its novelty. >> oh, geez, that's all he has. i mean, give this guy more credit than that. he's done a lot of things. and i think he's just at the early stages. i want to see what he does in terms of more -- you know, you can't upend the food chain.

you can't go natural and organic. >> not at this scale. as far as overall earnings commentary goes, there's more discussion this morning about a lack of references to deregulation. i mean, within calls, right, it's been more about consumers feeling good, sentiment's positive. >> well, it's tough. if you go look at the unbelievably excellent proctor & gamble conference call, i mean they address at the end they talk about taxes and what would it mean. they're very little -- i don't say they're glib but say it's a work in progress. i think a lot of companies think everything is a work in progress and reluctant to say anything of substance. i do point out again that aca is something where there's substance immediate impact possibilities, immediate impact for the hmo world. >> right. and that is first on the agenda legislatively as well. >> right. >> because of course it's going to require a lot more than the white house issuing some executive orders. >> right. >> to really change that and/or and most importantly replace it

with something -- >> with what? we don't know yet. look, i'm waiting to hear some big tech companies that have a lot of cash overseas what that would mean. we didn't get any clarity from say ge on friday about that ge quarter. >> was not particularly good. and we talked about it, interestingly ge's effective tax rate was 12%. >> yeah. >> so you can go down a few different roads there, benefit, not benefit, one being lower tax rate even get to 20%. now, obviously 12% is not typical, but they are known for being very aggressive in terms of -- >> right. >> making sure tax as low as this law allows. >> that was a disappointing quarter. turbine sales don't close. >> renewable energy is very strong for ge. >> right, but turbine these are long cycle businesses. i think they should forecast. >> right. the industrial is where the real forecasting disappointment was. >> forecasting really let's say ill advised. ill advised forecast that they gave previous. >> when we come back, of course

we're going to stay on top of the movements in and out of the white house as these ceos meet with president trump on manufacturing. take another look at the premarket. we'll also talk to alexandra lebenthal, one of the wall streeters who participated in the women's march on washington. this week brings earnings from as jim was saying boeing, alphabet, intel, microsoft, cat. dow's down two weeks in a row, first time since october. we're back in a minute. (b

getting some headlines regarding this meeting between president trump and some ceos talking manufacturing at the white house. first up trump tells business leaders they will have meetings whenever they need them, perhaps quarterly. wants to bring manufacturers back to the u.s. praises the head of lockheed as terrific. goes onto say they're going to cut taxes massively for the middle class and companies, going to cut regulations which he says have gotten out of control. says he's very big on the environment but regulations can get in the way. thinks they can cut regs, guys, by 75%, maybe more. of course he already is part of his platform guided to only one additional regulation if you cut

two existing regulations, this is sort of a piece of that. >> the pipeline companies -- we were talking earlier about is anyone really talking about -- the pipeline companies offline are just ready to go. they just feel that what's going to happen is even with part of nafta is a direct pipe out of canada, not just ski stone but lots of oil in canada that can come down here that had been, i think, somewhat stymied. >> right. >> also more pipelines. dow chemical needs tons of pipelines to be able to go to its plants. pipelines are on the agenda. >> i think it's important for people to be able to differentiate between regulations, which the executive branch has the opportunity to roll back without input from congress. >> right. >> or at least limited. and legislation, such as tax reform. which of course is really going to be led by the congress. the house ways and means right now and then we'll see where the senate gets involved. and frankly we don't really have any blueprint at all from the trump white house.

>> no. >> other than what did he say about individual? we're going to massively cut taxes. there's no specifics whatsoever. >> right. >> and those are the things that are going to take quite some time and be necessary to have details. >> by the way, one more here, tells executives companies that move abroad will face major border tax on products coming into the u.s. not everybody's on the same page on that. >> no. >> no. >> that's interesting. move abroad does not necessarily mean have moved abroad. i'm just saying that there's no move to try to bring manufacturing back that just got there. >> right. i know. i don't know what that means either. right. >> i think it's much more currency. he's got to start talking currency. because that's where the advantage comes in. more than labor even. >> you want to weaken the dollar then? >> well, i think the peso needs to be stronger. peso was 4-to-1 when they created nafta now it's 21. >> that's one of the interesting parts the peso got substantially weaker since trump was elected and coming back a bit which only

helps make things even cheaper. >> that's a conundrum. >> totally. >> i think it's interesting this praise of lockheed. if you make a deal, you want to bring down the joint fighter then suddenly you're on his team, united technologies they agree to keep some employees in indiana, these are negotiations. you start with one idea. you then battle mer lin hewson and agree to a deal and when you agree to a deal you're on the right side of trump. >> as carlos gutierrez told us friday, he shoots for the moon and works his way back. we're beginning to see that pattern here. >> that's what he's always done in terms of negotiating. for him it's a deal, everything is a deal. it's a transaction. >> notice claus -- now no longer represents aa, which is the actual commodity business. but there's a belief that aluminum is perhaps -- you know, obama put through some aluminum tariffs, but that's the belief that is fundamentally the

commodity that they want the chinese to stop throwing in here. >> but the bigger question is border tax, whether it comes in the form of tax -- an adjusted border tax as part of tax reform or whether as the president seems to indicate much more of just a tariff, protectionist themes, bringing jobs back, all of these things, jim, longer term good or bad? >> i don't know. you're going to hear from i think kevin plank. i'm surprised he didn't mention to eamon javers there's a piece when the titan wants to build the town, 5.5 billion plan for baltimore, this is what i think the president wants to see. and so you bring in kevin plank. and have kevin plank talk about how he wants to bring back jobs that have been long lost. i think there's a lot of by example here. it's one-off, but as an entire mosaic it doesn't seem too one-off. you agree or just kind of on the next?

>> i'm going to be fascinated every day and excited to report because there's going to be so much to find out. >> i think fascinated is legitimate. >> historic. we're running out of adjectives. >> i spent the whole weekend doing nothing other than this, you didn't have to worry because brady and ryan made it so you had a lot of time on your hands. >> that's true. >> when we come back, we'll get cramer's mad dash, count down to the opening bell, one more look at the premarket as headlines continue to come in from the new white house. more "squawk on the street" from the nyse in a moment. mdont thatavk cacacaro

th in unlite2%ca ha th in unlite2%ca ths goba bess...h f botline. we're going to do a mad dash here. we may cut away to the white house, but let's get to it for this monday. >> now, you broke the news last

week about what could be happening with t-mobile and the german which is have a big stake in it. j.p. morgan talking about odds increased dramatically could be a deal with sprint. if you buy t-mobile, you're going to get lucky because fundamentals are very good and that's what i know about. i do not know about the possibility of a talk. i know this is a highly unusual situation where the earnings, the cash flow are so great that i don't think you'll get crushed if there's no bid. >> right. >> i reported on thursday the end of the spectrum auction which is coming let's call it by the end of february. it will allow everybody to start talking to everyone although sprint was not a part of that auction. so they were not actually stopped from speaking to t-mo, but i don't believe there's anything going on. what i talked about thursday jim was the willingness of the germans to consider of course maintaining a position here in the united states of significance, but perhaps part of a larger player. >> right. >> now, doesn't necessarily mean it's with a sprint deal. by the way, even with pi as the

fcc chair, sprint, t-mo, fcc, doj review, not going to be a layup. >> there's a lot of people who think deregulation includes the idea that they'll be easy merger talk. i don't get that at all. i think that if you are a populist president, as i think president trump envisions himself, then you don't -- you fear that your phone bill will go up. >> right. >> i don't find this as necessarily, well, yeah, sure, anything goes when it comes to business. so i say that's why you need to fall back on the fundamentals. but fortunately the fundamentals are good for t-mo. >> and of course the idea is if you were to get a deal, we know masa would like one, controls softbank which controls more than 80% of sprint made that famous visit to trump tower, promised jobs in terms of softbank fund and what that would do here, but doesn't mean to your point allow 4 go to 3, however germans would love their guy to run it, i'm sure. >> yeah. >> legere has had such success.

>> the stock doesn't stop running. >> take you to some pictures here of the president with the ceos at the white house. >> thank you very much everybody. this is really our first official meeting. and, andrew, it's nice to have you set everything up so well. i hear your company's doing well. >> thank you, mr. president. >> i really do, i appreciate, we'll get to know each other very well. we'll have these meetings every -- whenever you need them. i would say every quarter perhaps. you could say monthly, but then all of a sudden monthly becomes re repeative, sounds good and then you have to do it and gets a little repetitive. i would say probably on a quarterly basis. you are great people. you've done an amazing job. and the biggest in the world. and this is a worldwide meeting. and what we want to do is bring manufacturing back to our country. vice president pence, good morning. >> good morning, sir.

>> is very much involved with me on that. one of my most important subjects. it's what the people wanted. it's one of the reasons i'm sitting here instead of somebody else sitting here. and i think it's something i'm good at. we've already had a big impact. and i want to thank mark and ford because you've been great. i think that merilyn is going to be drifk. we're going to find out soon, right? that's lockheed martin. and i think we're going to have a tremendous amount of business coming back. if you read today's papers, you'll see what's happening with four or five different companies that announced they feel much differently. foxconn is going to spend a tremendous amount of money on building a massive plant and probably more than one. so that's what we want. we want people -- we want to start making our products again. we don't want to bring them in. we want to make them here. that doesn't mean we don't trade, because we do trade. but we want to make our products

here. if you look at some of the original great people, the grandest country you will see they felt very strongly about that. and we're going to start making our products again. and they'll be advantages to companies that do indeed make their products here. so we've seen it. it's going to get -- it's going to be a wave. you watch. it's going to be a wave. and i've always said by the time you put them in these massive ships or airplanes and fly them, i think it's going to be cheaper. now, what we're doing is we're going to be cutting taxes ma massively for both the middle class and for companies. and that's massively. trying to get it down from anywhere 15% to 20%, and it's now 35%. but it's probably more 38% than it is 35, wouldn't you say?

a bigger thing that surprised me we're going to be cutting regulation, it's going to be strong and good and protective of the people as the regulation we have right now. the problem with the regulation we have right now is you can't do anything. i have more people working on regulations than i have doing product. and it's out of control. it's gotten out of control. i'm a big person when it comes to the environment, i've received awards on the environment, but some of that stuff makes it impossible to get anything done. it takes years and years. you can look at some examples, i read one recently where a man's been trying to build a factory for many, many years. and his vote was going to be fairly soon and he gave up because he wasn't going to win the vote. spent millions and millions of dollars -- actually ruined his

life. and we can't have that. so when somebody wants to put up a factory, it's going to be expedited. you have to go through the process, but it's going to be expedited. and we're going to take care of the environment. we're going to take care of safety and all of the other things we have to take care of, but you're going to get such great service. there will be no country that's going to be faster, better, more fair and at the same time protecting the people of the country. whether it's safety or so many other reasons regulations are good. we think we can cut regulations by 75%, maybe more. but 75%. have in a certain way better protections. but when you want to expand your plant or when mark wants to come in and build a big massive plant, or when dell wants to come in and do something monstrous and special, you're going to have your approvals really fast.

>> thank you, sir. >> and the one thing that surprised me then i want to hear what you have to say, but the one thing that surprised me going around meeting with a lot of the people at this table and meeting with a lot of the small business owners, if i gave them a choice of this massive tax decrease that we're giving for business, for everybody, but for business, or the cutting down of regulation, if i took a vote, i think the regulation wins 100%. now, in one case it's hard dollars. and the other case it's regulation. you would think that the regulations would have no chance. i've never seen anything like it. virtually everybody is happier with regulation than even cutting the taxes. so the regulations are going to be cut massively. and the taxes are going to be cut way down. so you're going to have now incentive, incentive to build. the one thing i do have to warn you about, when you have a company here, you have a plant

here, it's going to be in indiana or it's in ohio or it's in michigan or it's in north carolina or pennsylvania, anywhere in this country, when it decides -- when you decide, if you decide to close it, and you no longer will have a real reason because your taxes are going to be lower -- by the way if you go to another state, that's it, that's great. if you can go from ohio to indiana or from indiana to ohio, that's fine. so you have 50 great wonderful governors to negotiate with. so it's not like we're taking away competition. but if you go to another country and you decide that you're going to close and get rid of 2,000 people or 5,000 people, i tell you united technologies was an example with carrier. and i got involved, you know, two years after they announced. so in all fairness that was tough but united technologies was terrific. and they brought back many of those jobs.

but if that happens, we are going to be imposing a very major border tax on the product when it comes in. which i think is fair, which is fair. so a company that wants to fire all of its people in the united states and build some factory some place else and then thinks that product is going to just flow across the border into the united states, that's not going to happen. they're going to have a tax there, a border tax, substantial border tax. now, some people would say that's not free trade, but we don't have free trade now. because we're the only one that makes it easy to come into the country. if you look at china, if you look at many other countries, i'd have to name but many other countries, they can't believe what we do. so we take in things free and yet if you want to take a plant or you want to do something, you want to sell something into china and other countries, it's very, very hard. and in some cases it's impossible.

they won't even take your product. but when they do take your product, they charge a lot of tax. so i don't call that free trade. what we want is fair trade. fair trade. and we're going to treat countries fairly, but they have to treat us fairly. and if they're going to charge tax to our countries, if as an example we sell a car into japan and they do things to us that make it impossible to sell cars in japan and yet they sell cars into us and they come in like by the hundreds of thousands or the biggest ships i've ever seen, we have to all talk about that. it's not fair. it's not fair. never was. i just can't believe it took so long for somebody to come along. so that's the only thing i will tell you. so essentially i'm talking about no tax because if you stay here, there's no tax. say, oh, trump is going to tax. i'm not going to tax. there is no tax. none whatsoever. and i just want to tell you all you have to do is stay. don't leave.

don't fire your people in the united states. we're the greatest people. and many other countries have great people, but we all have great people. this isn't that kind of a competition. everybody has great people. but if we're going to fire people and build a product outside, not going to happen. thank you. so with that we'll take some questions, marillyn, do you want to start? have gotten to know marillyn very well. we've had deep negotiations. >> mr. president, thank you -- >> all right. we're going to watch this tape see if we get any more, but obviously the optics of that meeting, the first official sit-down by the president on his first weekday in office with ceos reaffirming his commitment to deregulation and tax cuts. and major tax cuts. >> he's slamming the door. i mean, he's slamming the door. if you have it on your agenda to

offshore. >> right. he's reiterating all of the main points he's made now time and again both during the campaign and during the period where he was president-elect. >> right. >> namely we're going to bring the jobs back, we're going to do that by offering companies the dual benefit of less regulation and lower taxes, but if you still choose to make things overseas and you want to bring them back, you're going to pay a substantial, in his words, border tax. and again i did note 15% to 20% are the numbers he keeps using on tax reform. i guess both individual rates for some and then the corporate rate. mine is 20, 25. >> right. >> it will be interesting to see where they end up. the deficit will figure prominently into some of this talk in terms of where you actually end up. they need something that's going to be neutral at least to get through reconciliation. it's got to be shown to be neutral. that could be tough. >> right. but i would tell you that from now on right now if you're

looking at a company and you think that they can cut costs by moving offshore and you put that in your 2017, 2018 numbers, think again, that's over. >> even with some of these currency differentials? >> yeah. >> they're going to look for the delta, right? >> i mean, if you're a manufacturer and you say i could move this manufacturing to taiwan, you're not going to move. you're just not going to do it. you're not going to risk this man's ire. and i think that that's -- you look at dow chemical, where could they build? where are the two sources of cheap natural gas? kuwait and here. but where is he building? here. and that is emblemmatic. >> but we're not importing any natural gas anyway. >> no. >> so that doesn't really matter. you build a plant over there to sell it over there, right? >> well, i think that that's going to be an issue. are you allowed to build plants over there to sell into the local markets? >> i would hope. i mean, that's not a border tax. the good is not crossing our border therefore it will not be taxed. >> go listen to the end of the proctor & gamble conference call where they talk about where they make their stuff. >> our immelt's commencement

speech last summer, right? talk about being early and right. local production, local sales. >> but you know who's the winner here? a lot of these intellectual property technology companies that don't make anything overseas. what if you're facebook? where do you make your stuff? california, right? >> right. >> you make in california. if you're alphabet, where do you make it? >> although frankly the tax reform is needed in part because of these labyrinth of intellectual property agreements that's got all of -- apple's intellectual property or so much of it in ireland. you know whoo why that is. >> i didn't mention apple deliberately because i don't necessarily think that -- i think they could be in the cross hairs for all we know. >> by the way lowering the rate maybe that will all end all that nonsense and all the intellectual property will come back here because you're going to have a low rate. >> yes. >> don't you wrestle at all -- there's steve bannon by the way at the end of the table, liveris behind him. don't you wrestle with the fact manufacturing is a fraction of our labor force. >> right. >> and those jobs, i mean, he's

not talking at all about automation. the production may come back. doesn't mean labor comes back. >> i still think to service those plants -- i know i'm in the minority here. to service those plants and the infrastructure -- there's michael dell. infrastructure around the new plant, huge numbers of jobs created by pipelines. remember in the 1930s the number one job creator was -- government, pipeline companies. >> all true. but this focus on manufacturing jobs, jim, to carl's point and one we've made a number of times, unless you are going to roll back progress itself in the never ending attempts of companies to increase their margins by gathering efficiencies, which largely are going to be attained through automation and robotics into the future. >> right. >> it's going to be a tough game. >> but there's a gift to get here. the give is don't open overseas and i will fight for you to get these incredible tax rates. i think this is on message. i think this is on message. guys, don't build your plants overseas. wait until you see what i do for you. >> yeah, we're looking at jared kushner talking to michael dell

and andrew liveris. it's interesting first meeting of all the people we know, the business community of america that is -- >> well, i mean, we follow a lot of companies. who would we expect to see in there? >> i'm just saying the first meeting. >> right. >> that's my point. not necessarily -- >> i also think you have to look at it through the prism of the election itself. and that is we talk about manufacturing being a small slice of liver, but in the states that put it over the top it is huge. >> thank you. that's what i think this is about. >> executives with him in the office on day one, pennsylvania. >> right. >> i mean, where can alcoa build plants? they could build them over here, build there, end up building here with natural gas. i think the president lacks a coherent message of why you would build here besides taxes. and i think the natural resources we have. it just doesn't seem to come up. gary cohn. there's a familiar face. >> yeah, these are all familiar faces. gary cohn of the nec.

>> mark fields behind. ford motor. yes, manufacturing is not a big part of our country. >> by the way we have more manufacturing output now than we ever had. ever have. so it's not as though manufacturing has gone away. >> no. >> the dollar volume of it is larger than it's ever been. >> look, i'm not saying -- i'm saying this is part of what you need to get the corporate taxes lower. that's all i'm saying. i'm saying this is the give. you guys have got to give us this. and in return i am going to do nothing but fight for you on this lower tax. which is, again, the earnings that you might gain -- the gross margin you might gain from moving overseas will be more than made up by the lower tax rate, for most companies. >> that's true. interesting the president actually seemed to indicate in his conversations regulation rollback was more important than tax rollback, he said that, i think i heard him say that. >> i had the ppg ceo on the other day, what's ppg? they own a mexican plant.

they have this gigantic factory -- net of factories for paint in mexico. but where do they make that? where do they send that? they do not send it here. they keep it in mexico. again, i think that's okay. i think the gate's been shut. if you have it over there, yeah, sure e he would love to build it over here. but i think it's going forward. it's a go forward situation. you disagree with that? >> no. if you're going to sell stuff here, you're going to want to have it made here potentially given lower tax rates, less regulation and huge border tax. >> right. >> if we in fact get that. or the border adjustment tax as part of tax reform, either one. >> all right. by the way -- >> if you're selling overseas, you're going to make it overseas. >> other countries have levers of their own. it's unlikely they'll sit still. they could create incentives. >> yeah, look -- i still do not hear if you're building it overseas to sell locally that that's an issue. i just don't hear that. david, there's some people we

don't know. couple people there. kevin plank to the left of pence. it's like "people business" magazine. >> yeah, kevin plank. >> see mike pence with whom the president will lunch today after an intelligence briefing at 11:00 a.m. eamon javers, what are you watching as we look at this tape from a few moments ago? >> carl, this is what you call a command performance for these ceos. so reminiscent for me of that moment early in the obama presidency back in 2009 when he summoned the big bank ceos here to the white house for a meeting on the financial crisis. this president today sees a manufacturing crisis in this country. but the big difference here ultimately is that the presidential twitter account has entered the white house tool kit. and we've seen some of these tweets from then-president-elect donald trump moving stock prices in the very short term of some of these companies when he singles out for criticism. that's an element of presidential power we haven't seen deployed before and something that will have to be very much on the mind of all of these ceos who are on their way

into this meeting. i spoke to kevin plank as he was walking in. i asked him why he was here. he said i'm here because i'm a good american. and that is almost word for word what some of those big bank ceos told me back in 2009 about their meeting with president obama. so you look at this and you see a president who's very much focused on getting these ceos to come to the table to cut a deal. what that deal is going to be ultimately we'll have to wait and see, carl. >> indeed, eamon. some sound that you heard a few moments ago. >> yes, it is. >> lockheed martin miss the quarter because of the rollback sns will they miss the quarter? certainly not acting that way. company acts like they're going to get the break. i look at united technology, hon honeywell, companies that keep going higher. they're building things here. they're keeping companies here. keeping divisions. >> market is not e afusive this morning, jim, dow started down about 20, down about 8 right now. >> if you missed sound a few

moments ago, this is the president in this case referring specifically to the border tax. >> a company that wants to fire all of its people in the united states and build some factory some place else and then thinks that product is going to flow across the border into the united states, that's not going to happen. they're going to have a border tax. substantial border tax. now, some people would say that's not free trade, but we don't have free trade right now because we're the only one that makes it easy to come into the country. >> we wapt to start making our products again. doesn't mean we don't trade, because we do trade. as he said. said now on regs more people are working on regs than actually working on the product. >> right. >> a complaint that you hear certainly in finance. >> why aren't the stocks that could go offshore getting hurt? why are people not factoring anything he says into earnings per share? >> you know, this is all going

to require legislation. >> right. >> and i think, jim, don't you agree there's certainly a prospect of going down a road here that is as we know the walking well back from globalization. >> right. >> but it's unknown where that heads. where does protectionism take us? >> well, i think that to some degree there's a little symbolism here. but i think also amazon puts out another release today hiring more people. i think you want to be on the right side of this guy, is what i'm saying. you want to be on the right side. that's what's happening. you want to be able to say, listen, my next plan is here. my foxconn, i'll just be here. and i think that really does matter. now, how much does it cost to buy things that are made here versus overseas? i mean, you know, maybe you save some manufacturing jobs, but geez, if you make it with a currency of 21 -- look at that. you make things with a peso and you bring them here, wow. that's a cheap shirt. that's a cheap pair of slacks.

>> you can pay your workers over there. >> a cheap pair of slacks versus having a job making slacks. >> one question if this actually does all come to pass, what is the consumer paying? does that go up? is it either it goes up because frankly you're buying your t-shirts or whatever and they're still made in indonesia or vietnam or china? >> honduras. >> or honduras. and therefore they're more expensive and/or your japanese car is more expensivexpensive, because it's made here it's more expensive. and therefore it's always expensive. >> demonstrable it's more expensive. >> raising prices for people, is that going to be, you know -- >> well, i think against that you've got this core deflationary aspect of the economy that's from an amazon. i mean, look at -- >> you see walmart today? lowest price on walmart since may, right? where you go to find things that are made overseas you can buy on a limited household budget. >> there's an attack on walmart and target where you have amazon coming in keeping prices down,

and then you have possibility they're going to have to pay more for theirs and eat the margin. maybe they have to eat the margin. >> who? walmart? well, there's so much lobbying to go here. it's the first $5 the border tax adjustment doesn't apply to. there's so many different things they're trying -- you're going to hear about. >> i think the trade-off of things being more expensive here because they're manufactured here, that's not been -- that's a real issue that should be addressed by somebody. >> maybe that's for the benefit of the country. more people have jobs and so -- you know. >> look, if you're tesla, if you're elon musk and he has found a way to make cars here that are, well, some people say are profitable, other people say not profitable, but he's found a way to do it. and there's mark fields thinking, you know what, i got to do it too. provided there's an expansion market. one of the reasons why these i think the rails have been so strong is they are a way to be able to get products that are made -- >> i would love to see some statistics on employees per

vehicle in terms of production. >> it's very low. >> for tesla. >> in general. >> in general do they have fewer people in their factories? >> cost of labor is very small. that's why i keep coming back to the currency. cost of labor's small. but we're raising the price. that's what goes on. someone is going to have to eat these gross margins. someone. >> little more sound here from the president a few moments ago. take a listen to this. >> we are going to be cutting taxes massively for both the middle class and for companies. and that's massively. we're trying to get it down to anywhere from 15% to 20% and it's now 35%. but it's probably more 38% than it is 35, wouldn't you say? that's a big thing. a bigger thing and that surprised me is the fact we're going to be cutting regulation

massively. now, we're going to have regulation, and it will be just as strong and just as good and just as protective of the people as the regulation we have right now. >> in this case he's referring to factories and production, but it could equally apply, jim, to what you said about the epa. more memos reported today about budget cuts over there and putting a clamp on the epa's ability to squash other regional or state regs. >> well, you roll back where coal one of the reasons why the rails -- again, the rails are the fulcrum of this. dow and dupont are merging. >> yes, they are. >> well, i mean, if you're the european authorities, you can't be that happy about this kind of discussion. >> no. there's a lot of countries that are going to be very much focused on the relationship with our country and what it's going to mean. >> isn't it interesting that the

retailers, money for retail is flowing into the companies that have the least worry about this? home depot. >> right. >> the portfolio managers are saying, listen, i don't want to be in apparel. i don't want to be in macy's. i want to be in home depot even though a lot of stuff home depot sells a lot overseas, but they don't have that much exposure as a company. >> right. >> so people want to buy home depot. >> overall percentage of sales whereas you can walk into many retailers and very hard to find things made in america. >> target's the target. >> but retail's going to be very actively involved in trying to roll back in some way either the border tax adjustment as a part of tax reform if in fact that takes the lead or the president's talking about a substantial border tax. by the way, he's thinking of something different than the border tax adjustment. fair to say, right? >> right. >> he said last week he thinks that's too complicated. he wants to go a different route. but we'll see. we don't know where we're going to end up. and tax reform, which all of this would be a part of is going to be months and months and

months in the making. >> but at the same time you want to move -- it if you're looking for a restaurant stock that works. >> yeah. >> you're looking for a retailer that works. these portfolio managers are watching this show saying, holy cow, i got to get out of this, get out of that, what can i get into? give me some safety. give me a safe harbor against this discussion. >> i'll give you one. >> what? >> comcast. >> parent company. >> parent company of this network. domestic company. the only thing it exports generally are movies, by the way that would under the tax reform bill be positive because you're not going to pay taxes on exports. capital investment, written off year one, huge investor of capital is comcast given all of its expenses. and regulation rollback and fcc commissioner new guy coming in seemed very beneficial. things on net neutrality, friend of the show, hope to have him on soon, yeah, it's our parent company. i agree. has anybody noticed it's up 6.5% this year alone? those are the kinds of companies

that you can find that benefit across the board. >> last couple weeks -- >> feels like the patriots, doesn't it? >> by the way to your point on depot, depot is the top -- >> there you go. makes sense. tesla is going to go up even though short sellers are going to be furious. doesn't matter. >> tesla is up. yeah. >> well, they make it here. if you make it here, then maybe you get some sort of advantage. i don't know. they're not a taxpayer. >> how about earnings -- a lot of technology companies have no choice but -- the hottest ones have been semiconductor equipment companies. they have no choice. they have to make -- they have to put factories where the customers are. but they also if they have customers here, a customer that's a micron, you can build a plant here. but, again, i say you have to

look at where the customers are and that that's not going to hurt -- that somehow trump is not going to say you have to build it here to be able to service there. proctor & gamble's betting that's not the case when they talked in their call about making things in india. which by the way is the weakest country because of that change in the rupee worth pointing out. big indian exposure going to get hurt. >> let's get to the bond pits this morning. dow's down 17. check in with rick santelli. rick. >> good morning, carl. you know, i look up at the board i see 2.44 and change, that should be familiar to viewers, that's about where we closed last year. and if you look at a year-to-date chart, on friday we closed at 2.47, basically the high yield close of the year, all in the mid 2.40s. these are very important levels. they could hold the market closes like a magnet. if you look at what's going on with bunds, similar but a little different story. see the one-week definitely climbing, looks very similar to our one-week. a one year looks a bit different. hovering at the highest yields in basically a year. the relative value of trade if we look back in the past is

european rates came down due to a variety of issues, we were connected at the hip. real question is are we going to be connected at the hip moving up? and whose central banking policy is going to rhyme? is the world going to rhyme with us? are we going to continue to be odd man out? the new mantra that many traders are talking about is, is that european rates may also move higher. this could create an interesting dynamic. foreign exchange, you know, i know that the president was barely sworn in, markets seem a lot less nervous about him than everybody else pulling their hair out. but when it comes to foreign exchange, there's some real activity going on here. as you see on the year-to-date chart of the euro versus the dollar. but this is sort of the same old story. you know, cheapen your currency, do better. we have a president who's going to put all this under the microscope, so it's going to be fascinating to see how this period of letting your currency breathe a minute maybe to see how the new president's going to act maybe something to pay close attention to to get your

ultimate levels of where new ranges would be established. and you saw the euro versus dollar year-to-date, mirror image is the dollar index. look at all the moves since the election, i caution, you know, covering 200 points below 20,000 does show some giveback, but do keep in mind the giveback has been small based on technical retracement levels. carl, back to you. >> all right, rick, thank you very much for that. speaking of the euro, theresa may with her own industrial strategy unveiled over the weekend. we're not doing this by ourselves. it looks like she's going to be the first world leader to meet with the president. >> yeah. jump ball there. wow. pound's been stronger. interesting. >> brexit will be completed by what, 2019? is that what the calendar looks like? >> yeah, three years from now when we get final details on nafta and brexit, it's going to take a long time. >> yes, it is. >> jim, what's on mad tonight? >> we've got the hottest stock -- ceo of the hottest stock in america which is we've

got the ceo of skyworks solutions, which was up the most. this company makes a lot of stuff overseas. liam griffin is monumental. and fritz van paasschen, more than just technology. i'm very excited about tonight's show. i think skyworks is at the fulcrum of what i regard as a revolution among the american companies taking back what's inside of watch, what's inside pc, what's inside cell phone and skyworks is probably the best manufacturer along those lines. qualcomm by the way getting hurt. not a factor. it's not. that's an i.p. -- >> qualcomm is getting crushed on the lawsuit from apple. we'll actually hit that in the next hour perhaps. >> right. remember retail's major focus. does home depot buy stuff from overseas? remember, they sell plants during the holiday season, which is their -- remember what's their black friday? what's their christmas? it's planting season. thank you, mr. costello for teaching me that. he's the former ceo. >> busy week ahead, jim.

>> just 3:00 a.m. set the alarm, david, for 3:00 a.m., we'll talk. >> you know it, every morning. >> the dog will wake you up. >> actually, you're right. >> "mad money" 6:00 p.m. eastern time. when we come back, very busy day for president trump. dow's down 22 points. don't go anywhere. at yoesk

t n n ke minrevego tthleci ohiell go wi at yoesk

hetas st..haprhelileasrk h.k udg rie boineasosoght neicrevego tthleci w sta.om

♪ good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at the new york stock exchange. what a morning. president trump, his first meeting on his first full weekday in office meeting with ceos talking about manufacturing, a lot of details coming out of there. for the time being markets relatively flat. dow's down 20 and oil down a percent. >> our roadmap for the hour begins with getting down to business. trump meets with executives at the white house, as carl mentioned, commenting on taxes, manufacturing and regulation. we've got the details and

analysis for you as the first 100 days gets underway. >> first full week of trading with donald trump as president. what can we expect from the markets, where to put your money. >> and an unexpected beat from mcdonald's on the top and bottom line. we'll discuss whether the fast food giant's turnaround plan is working. president donald trump hitting the ground running in washington, a packed agenda this week including a visit from british prime minister theresa may coming up on friday. but first up this morning the president meets with manufacturing ceos at the white house to talk trade and tax agenda. plans to renegotiate nafta, withdraw from tpp. take a listen to what the president had to say on regulation. >> we think we can cut regulations by 75%. maybe more. but by 75% have in a certain way better protections. but when you want to expand your plant or when mark wants to come in and build a big massive plant or when dell wants to come in

and do something monstrous and special, you're going to have your approvals really fast. >> let's bring in former bush and reagan advisor ed rogers, good friend at post nine and scott paul head of alliance for american manufacturing in washington. gentlemen, good morning to you both. >> good morning. >> good morning. >> scott, for your sector, could a morning like this go any bet sner. >> it's a great morning. i'm glad they're having this conversation. one of the first days of the administration. it's important. glad we have an administration that values manufacturing. the scale of the challenge is pretty large. we haven't gained a manufacturing job over the last two years. we know there's technological globalization challenges. you saw a lot of different companies in there that have different needs. some that face fierce competition from china, like u.s. steel and whirlpool, some companies that are on the cutting edge of clean edge technology like elon musk with

tesla and solarcity. and others that have very globalized supply chains. so it is complicated to get the policy right on trade and taxes, but i'm glad the conversation has started. >> ed, politically, can he get the job done? cut taxes massively, roll back 75% of regulation on businesses and impose a very major border tax on companies that want to outsource overseaoverseas? >> he can do all that with this congress. what that's going to do to the deficit and how it's going to get paid for is very much open to debate and there's an important retreat with the house and president going to start this wednesday, they're going to start talking about that. it's all possible, how feasible it is from a budget standpoint we'll see. but it's a great new dawn. i mean, here's the president of the united states sitting down in a collaborative way with american manufacturers talking about how to make their lives easier, not just an american first but least an american bias, wildly different than what they're used to over the last eight years.

>> scott, how much of american manufacturing products everything that gets made in this country gets sent abroad? how much do we export? >> we export a fair amount though we have a lot of domestic consumption as well. we specialize in exporting things like aerospace, we're especially good at that. trade is a two-way street. i agree with donald trump hourve that we've negotiated some bad deals. i think we had a bad deal with china. i don't know that tpp would have been a winner for manufacturing. i think nafta could stand for renegotiation. it's been more than 20 years. we're in a digital economy. all three nafta countries face fierce competition from china. i think if done properly we can boost prospects for manufacturing jobs keep in mind we have industries that suffer devastating consequences from unfair trade practices and those that benefit from exports. doesn't mean we're going to enter into a trade war, but i

think the trade policy is going to enter a new direction. it's going to be much more aggressive and bargain much more heavily for manufacturing when that sector in many ways has been left behind in past negotiations at the expense of financial services and retail. >> eamon javers watching this from washington, i noticed b of a did a fund managers survey late last week asked about top concerns for the market, top risks, protectionism and a trade war is number one pick. >> that's right, carl. that strikes me this is a facetime presidency for some of these ceos. some have spent a lot of time with donald trump already, marillyn hewson this may be her second or third meeting with donald trump since negotiating on the f-35 price personally with the president-elect of the united states and now in this meeting. and also elon musk invited to the tech ceo meeting at trump tower now invited to the manufacturing meeting here. you wonder what the

interpersonal strategies are for these ceos as they deal with this new president here at the white house. and you mentioned the prospect of a trade war. that's going to be something that's on the minds of all of these ceos. donald trump talked a little bit about the prospect of a border tax in the meeting this morning. here's what he had to say. >> a company that wants to fire all of its people in the united states and build some factory some place else and then thinks that product is just going to flow across the border into the united states, that's not going to happen. they're going to have a tax, a border tax, substantial border tax. now, some people would say that's not free trade, but we don't have free trade now. because we're the only one that makes it easy to come into the country. >> so the question is going to be what does the word substantial mean here. donald trump talking about the prospect of a substantial border tax, carl, i think a lot of ceos are going to want to know the details behind that proposal and

of course the 75% cut in regulations that he was talking about earlier this morning as well. a lot of ceos will be very, very curious of which regulations he's talking about, how they plan to manage such a dramatic drawdown of regulatory authority by the federal government. all of that in play. so a whole lot at stake here at the white house, carl. >> ed rogers, you wrote there is no velvet cover on trump's presidential hammer. get used to it. does he need a foil? and if it's not the media, is it china, is it some big trade partner? >> i don't think he needs to pick gratuitous fights. i don't think he needs the distractions. he's already saying things that are getting people's attention even with american manufacturers he's suggesting there's going to be carrots and there's going to be sticks. but more important than any of that he's making it plain that if a manufacturer wants to leave here, or thinks they need to leave here, go some place else, manufacture their goods, there's going to be a friendly collaborative place to go and

say why? what is it driving my industry out of america? what can we do to keep that from happening? last eight years that hasn't existed. so at least again in the case of trump, wilbur ross, some other of his appointees, these people are going to get a fair hearing about what's the root cause of jobs leaving. what can be done to keep it from happening? >> right. i think also what kind of jobs are we talking about creating. scott, maybe you can shed some light on that. how high skilled are these jobs? how many manufacturing jobs are there that are set to be brought back? and what kind of wages are we talking about? >> yeah, the manufacturing jobs that should be coming back will be working with complex machines. they'll need a high skill set. they should be well paying. and, look, it is possible to do this. i mean there are other countries that have successfully fought off china competition. i look to germany as an example of that. it's a completely different set of macroeconomic policies than what we have here in the united states, but you can attract

investment business to come back with the right set of workforce policies if we're investing in our infrastructure, if we get the tax code right. and i think currency is an issue that we also have to take a strong look at. that makes a big difference in our competitiveness. but the manufacturing that should be coming back there will be fewer jobs. we're not going to see a 1950s manufacturing sector ever again. i don't think we want to. but we can successfully compete. we can gain our share of exports back. and these jobs are going to look good. they're going to pay better than service sector jobs. one of the issues that we're confronting in our economy right now is this sense particularly in the younger generation that they're getting left behind. their wages are less than their parents and, you know, america needs a raise. having good manufacturing jobs is a way to get it. >> one last point here, ed, point should be made that this message, this entire economic message is still aimed at his core supporters, right? middle america, rust belt,

manufacturing. >> exactly. the places hit the hardest, the places where there's a lot of rotting empty factories, the places where jobs have got to come back to. that is the epicenter of trump's message. and there's nothing wrong with that. you want to start from your strength and work out. somebody said earlier on the show, politics is about addition. well, that addition does need to start, but, but, he's right to go to the heartland. he's right to speak to his base here in the early days of the administration. >> ed, scott, thank you guys, good stuff. helping us understand the message of today's meeting. >> when we come back, we're keeping our eye on the markets here, digesting president trump as he heads into his first full week in office. the dow's lower by about 32 points. s&p 500 off 0.2. so just a minor selloff here. we've got analysis for you straight ahead on what investors are expecting. plus, that big meeting at the white house with executives this morning on taxes, manufacturing and more. we will discuss.

we want to start making our products again. we don't want to bring them in. we want to make them here. that doesn't mean we don't trade, because we do trade. but we want to make our products here.

president donald trump meeting this morning with top executives as he begins his first 100 days in office. focused on jobs, trade and regulation. joining us to discuss market implications of all of it, jeff rosenberg of blackrock and

christian, oppenheimer funds chief investment officer and head of fixed income. gentlemen, welcome to you both. is it bullish to take some of the bets off the table and see details in clarity or you stick with it? >> i think you stick with it. i think longer term outlook if you can get things done on regulation front, so for productivity growth and on fiscal side with some additional stimulus i think markets are higher rather than lower in six months time. >> jeff, do you agree? >> yeah, generally i'd agree with that. i think the outlook here is for the upside when it comes to what we might see out of fiscal reform. that being said we've certainly seen a bit of pullback in its realization that the types of expectations for the market, the big rally post the election are hard to get done. and so we have to have a realistic expectation about the volatility that is going to ensue as we work through the details.

>> what about the america first policy, which was the feature of his inauguration speech and continues to be a major theme for him, jeff? does that make you nervous? >> so, you know, it gets to this notion of trade and trade policy. it's about fair trade. and there's two ways that could go about. one could be leveling the playing field, understanding and coming to agreements that perhaps some of the trade agreements there's a real focus on some of the details here that many people hadn't been focused on, things like rules of origin, that perhaps we didn't have as nearly a fair playing field. we negotiate in such a manner may not be such a bad outcome. the other side of that of course is a more protectionist notion, tariffs that would be negative. and i think what the market is going to have to do is work through and see which path is more likely. if we take the first path, it's not a bad outcome at all.

>> i think nst investors also have to figure out winners and losers from the policy, whether it's trade, regulation, that's what's been going on since the election. >> absolutely. i think america first is more about politics than it is really about economics. in my mind that is probably the biggest risk we face for the markets from a longer term perspective. this is not productivity enhancing. and for u.s. growth to get to the next level, that is what we need. and regulation certainly help. fiscal stimulus certainly helps. america first i'm not so sure is really the panacea that everyone is making it out to be. and i think the key point in that regard is bringing manufacturing jobs in the u.s. is more about politics than economics. you know, that is inevitable that the path of technology for manufacturing to not be as substantial a part of the economy as it has been in the past. >> there must be some multiplier of confidence, right? >> sure. >> we'll see what it does to

household balance sheets, but it's not just strictly political. it's not just optical, is what you're saying. >> well, no, it's not optical, it's not strictly optical, but i think it's more politics than economics. >> i wonder how crowded these trades have gotten, jeff. i mean, i'm looking at the dow now down 36 points. banks, they're off about 3%, 4% from post election highs. it was a very popular trade. even if you say to stick with it, i'm sure that the positioning has gotten extremely crowded. >> well, it certainly became a very popular narrative in the post election environment moving more towards friendly policies, the regulation policy, what you've seen what we talked about a second ago you've seen across all measures of confidence. whether it's small business confidence, consumer confidence, large corporate ceo confidence, that's the boost. we call that the soft data. that's the survey data. what needs to follow is the evidence that the confidence boost is translating into real

economic activity. kirshna talked about in terms of productivity. one of the sources of productivity is capital investments. do we see the confidence translate into higher levels of hiring and higher levels of capital investment. to the extent we do, then the crowded trades may be crowded for a reason because they're right because what we're talking about is a fundamental change in the growth outlook. >> is inflation a risk to that? >> well, inflation is definitely a risk to that in that the federal reserve may be forced to act more prematurely than they would probably like. having said that, i think janet yellen is deeply aware of that. and over the last two days she has gone out of her way to make it clear that they will be gradual. >> we'll see about what the economic guidance we get from some of the earnings which really kick off in earnest this week. guys, leave it there. thank you very much. >> thank you. well, certainly worth

focusing this morning a bit on qualcomm. $100 billion company or at least it had been until this morning. the stock down over 13%. this after a lawsuit filed by its customer, apple, late on friday. alleging a number of things including the fact apple says, hey, you're -- you owe us over $1 billion, or at least we want that sum of money from you. other targets of the lawsuit from apple against qualcomm, qualcomm they say has withheld the required contractual payments from apple even though the agreement clearly permits apple to respond. this specific to the action brought by the korean trade commission. they go onto say that the lawful investigation request for information, if that were not enough qualcomm then attempted to extort apple into changing its responses and providing false information to the kftc in exchange for qualcomm's release of those payments to apple.

apple refused. this is one point of a larger lawsuit of course again in which apple says we're owed $1 billion over licensing fee practices in which they simply say qualcomm is taking way too much of what they are entitled to. for those who've been following this story of course this comes after the action but from the kftc, it comes after the action from our own ftc, not very long ago. that back a couple weeks ago charging qualcomm with monopolizing cell phone components in terms of the market both saying we're going to sell you the chips and we want more for them as a result of intellectual property agreements. remember, qualcomm is both a chip company and a company that invests a great deal in r & d for what are the open standards to what it says is enabled the industry broadly, that industry being of course the cell phone industry and collecting a royalty fee on virtually every

cell phone that is manufactured and sold. apple of course as you might expect one of its larger customers. and it did respond, although we don't have a full response here of course which will come in some sort of a response to the actual complaint from apple. but the general counsel did say on the record apple's been actively encouraging regulatory tax on qualcomm's businesses in various jurisdictions around the world as reflected in that recent complaint from -- or that fine from the kftc and the ftc complaint by misrepresenting facts and withholding information. they're hoping for discovery, you might expect, to actually start to unturn what they believe perhaps on the qualcomm side is an interesting comingling of interests from both samsung and apple. samsung of course a korean company and lg another korean company to what they say is at least an attempt here to extract benefits from what is simply a commercial dispute about paying more than they want to in an

industry perhaps that is starting to see some margin compression. we will see where all of this ends up. certainly it could go in the courts for quite some time, perhaps years if there's no settlement. but today investors are fearing for qualcomm overall. you see the stock price. this should have no impact, guys, on the deal to acquire nxpi. but again, given all the different things that are going on for qualcomm, sometimes these kinds of issues can creep in even though on the facts and the laws as it pertains specifically to the antitrust review of that deal, it shouldn't necessarily -- >> actually, nomura came out today and downgraded the stock i think to neutral lowering the price target to 70 on concerns about the timeline for this nxp deal, to your point. not necessarily on the tax side. >> right. the worry on nxpi seems specific to chinese antitrust approval. >> right. >> with all of that, guys, dow close to session lows here down 48.

when we come back a surprise beat from mcdonald's this morning. we're going to break down the fast food giant's global growth and turnaround plans when "squawk on the street" comes right back. yd otrad yolln ou brarr

itng79ae mehi itng79ae

mcdonald's out with earnings this morning beating on both the top and bottom lines. the fast food giant reporting a 2.7% jump in global comps. that's including gains in the uk and in china. ceo steve easterbrook notes changes in its mean yu and technology delivered a better experience to the customer helping the company achieve its strongest annual global comp growth since 2011, although the debate rages this morning. we talked about it with jim about whether breakfast has lost its mojo, lost its novelty, can it continue to drive growth a year after it's unveiling? >> that's certainly how they explain the negative comp store growth that there was a year or two left, that's going to be the focus of the call that kicks off in about a half hour. how does mcdonald's get u.s. sales trends positive in 2017. david palmer of rbc put out a note saying food deflation will ease, so that grocery

competition will ease. they're focused on the core burger category, the big mac trio, and other, you know, measures of consumer confidence are higher and that should help. but that's going to be the key after pretty impressive international comp. >> yeah, worst performing dow stock this morning. by the way for awhile at least, we'll get starbucks later in the week but giving us more reads on the consumer. >> rest vaunts have done really well since the election. all right, let's send it out now to rick santelli at the cme group in chicago with "the santelli exchange." good morning, rick. >> good morning, sara. thank you. like to welcome my guest professor charles lipson. thanks for taking the time. >> good to see you. >> a lot of talk today regarding manufacturing and the notion that president trump is maybe standing up for an industry that isn't necessarily going to benefit the way he thinks it will. your thoughts. >> i think he's taking things off cruise control. i think what he wants to do is there've been a lot of regulations that have held down manufacturing, especially small manufacturers who don't have the

economies of scale in dealing with them. i think the big manufacturers have had a lot of money overseas they'd like to bring it back. i think that's what he's trying to go after. >> if we had to look at the single biggest issue on the scale of manufacturing that makes it sometimes more advantageous to move offshore, what would that one variable be? >> i think the biggest cost is that it's cheaper to manufacture -- >> from a labor side. >> from a labor side. but i think it's also the case there are a lot of countries, especially china, that protects its market so you want to be there in order to sell there. >> so if you don't make it there, it's much harder to bring it in and sell tlit. >> that's right. >> that's something that differentiates free and fair trade. so that's at the epicenter of the president's radar screen. >> bingo. >> the other issue. why are overseas labor costs cheaper? it might sound like a dumb question to ask, but give me a simple answer? why is it cheaper? >> well, because they have less developed economies. and they have a lot less regulation. >> so if they get hurt on the job, do they get compensation? >> generally no.

>> if they retire they get some type of pension? >> only if their kids are paying. >> in china if three kids get sick, does the company's insurance stand up in many cases? >> no, but that's only part of the cost. part of the cost is it just costs a lot less to live in these places. so you can pay people less. but we're not going to compete with them by driving our wages down. >> so is it fair to say that those issues, which might change over time. >> right. >> is more middle class growing some of these countries that have cheap labor they're going to get better benefits. all this is going to change. >> exactly. >> the other issue is if he lowers taxes for some of these corporations, if he changes regulation structure, are those chips going to make up for the cost in some of the benefits employing side. >> for many employers they will, but if you look at some countries like italy, i've read things where you're paying a worker $45,000 for that worker to only get $17,000 take home. well -- >> do they have a vibrant economy? >> absolutely not. >> i rest my case. in the last 30 seconds, when i

look at tesla's stock, i'm not saying i don't think that there's other types of vehicles that will really get true economies going of scale and make their own benefits without subsidies, but i see an investor class that's given him a lot of latitude. can't the same be said when i look at the stock market down a couple hundred that investors are giving donald trump a longer runway than many in the media understand everyone though they understand that dynamic with tesla? >> absolutely. they're feeling more certain. they're seeing a lot more. so some of the uncertainty's been wrung out of the market, but there's a lot of betting to come. there's a lot of expectations. all those railroads in the 1900s build in colorado said the names of two little colorado towns and then said and pacific. never made it over the mountain. >> some made it, some didn't. >> exactly. >> charles, thank you for taking the time this monday morning. sara, back to you. >> rick, thank you. when we come back, president trump's first week getting under way. it's a busy one already. executives gathering at the

white house to discuss jobs, taxes and manufacturing. we'll take a look at the first 100 days. i have people that tell me they have more people working on regulations than they have doing product. and it's out of control. it's gotten out of control. i'm a very big person when it comes to the environment. i've received awards on the environment, but some of that stuff makes it impossible to get anything built.

a busy first week getting under way for president trump. our john harwood joins us with more. good morning, john. >> good morning, carl. donald trump's gotten some good news this morning. marco rubio, the florida senator who had expressed some reservations about supporting rex tillerson, the former exxonmobil ceo who's been appointed by donald trump to be secretary of state said he will support him. it appears that rex tillerson, who also has the support now of lindsey graham and john mccain is going to be confirmed as secretary of state. that will be welcome news as well as the confirmation later today that's expected for mike pompeo at the cia. but donald trump has already taken some actions using the stroke of his pen, using his executive authority to set his agenda in motion. and i just want to run through a

few of those things and talk about the implications of them. first of all, he's announced he's withdrawing from the transpacific partnership. we expect that to be signed at some point this morning, maybe by noon. now, the effects of this are not great because the transpacific partnership has not come into effect. it's not been ratified by the senate. it was never submitted for a vote. doesn't change a whole lot except that it creates an opening for china to make its own regional trade deal. we'll see what happens there. he's going to announce that he is signing an executive order starting the renegotiation of nafta. now, again, that's something that doesn't have immediate effect because it involves the other parties, canada and mexico. and it also involves the congress, since both houses of congress approve the nafta trade deal some years ago during the clinton administration. third, he issued a regulatory freeze subject to emergency exceptions. this is something that pretty much every president does to halt things from the previous

administration. that was to be expected. and finally, he did a regulatory step on obamacare saying he was going to grant maximum flexibility to alleviate burdens. now, let's see what exactly could he do on obamacare? because it's a little ambiguous exactly what the effects are going to be. first of all, there's the individual mandate. president trump could stop enforcing the individual mandate, stop collecting the penalties that are applied to people who don't buy coverage that can't afford it. secondly he could change and a senate republican over the weekend told me this was the goal to change the minimum benefits that insurance companies have to provide. that's a key factor in the cost of those insurance plans. and then finally, there is the medicaid insurance waiver process. conceivably that could add health coverage to people if it convinces states like texas, for example, republican controlled state, that has not expanded

obamacare, to -- excuse me, expanded medicaid under obamacare to do so under changed rules. but as for the first two, the individual mandate and the minimum benefits, the problem for donald trump is that he has signalled pretty clearly he doesn't want to immediately blow up the individual insurance market without a repeal option. so that suggests that this executive order might be something that signals big change but doesn't actually end up producing big change. and besides there aren't the second level officials below the cabinet level in place to implement big changes right now anyway. so it's going to take a little time. >> all right, john, thank you. we'll wait to see pictures and hear more about those executive orders. john harwood. stocks taking another little leg lower down now 76 points on the dow. let's send it to sue herera with a cnbc news update. >> good morning, sara. goork everybody. here's what's happening at this hour. russian and turkish backed talks between syrian rebel factions and the syrian government began

today in pakistan. it is the first face-to-face meeting between the two sides. they will focus on consolidating the shaky cease-fire that has been in place since december 30th. the search and rescue operation for possible survivors in the deadly train derailment in southern india continuing into the night. 39 passengers were killed and another 30 injured in the fatal accident. >> heavy rains in southern california sent a car tumbling and flipping down the fast moving flood waters. the female driver managed to get out just moments before that car was swept away. more than 20,000 people lost power in the region. >> and the story continues, mars says it doesn't know why skittles found on a wisconsin highway might have been headed to become cattle feed. yes, you heard me correctly. that was previously reported last week. hundreds of thousands of the red skittles without the letter s on them were found spilled on the highway last week. apparently cows like skittles.

news you can use, carl and sara. back to you. >> we saw -- >> it's a true story. you cannot make that up. >> we saw the pictures. >> exactly. >> sue herera, thank you. >> you're welcome. energy ministers are gathering today in vienna and have been over the weekend. our hadley gamble is there after speaking with russian energy minister. she joins us with the latest. hadley. >> well, hey there. russian energy minister tells me he welcomes president trump's refocus on energy even if that means america's energy independence. he also wants the united states and russia to go back to that pre-ukraine crisis dialogue. let's listen in on what he had to say. >> translator: it's very pleasant for us energy occupies first place in the new administration's program. it would make sense in the future to resume the dialogue we enjoyed before 2014. >> and of course this comes at a

time when most governments around the world are looking to really decipher the tea leaves on just what president trump's foreign policy doctrine is really going to look like. we heard earlier today from the foreign minister sergei lavrov saying mr. putin and mr. trump share many of the same views on geopolitics and of course the whole nomination question about rex tillerson, i had the chance to ask russian energy about that, he waited. he basically said, we welcome his appointment and think it will be good for the energy industry, guys. >> hadley gamble on that. hadley, thank you very much. when we come back, obamacare and drug pricing in the age of trump. we're going to speak with the president and ceo of pharmaceutical research and manufacturers of america. as we go to break, take a look at shares of yahoo. s.e.c. looking into whether yahoo was quick enough to tell investors about data breaches that occurred in 2013 and '14 but only revealed in the past few months. company has earnings tonight. about these levels the worst day of the year for the dow and the s&p. we're back in a minute. bimle tp

is the fed even more important to bank stocks than most investors think? we discussed interest rates, regulations and more with the financial policy analyst. catch that conversation on tradingnation.cnbc.com. more "squawk on the street" coming up. rha..te

the drug industry has been disastrous. they're leaving left and right. they supply our drugs, but they don't make them here. they're getting away with murder. pharma. pharma has a lot of lobbyists, a lot of lobbyists and a lot of power. and there's very little bidding on drugs. we're the largest buyer of drugs in the world. and yet we don't bid properly. we're going to start bidding and we're going to save billions of dollars over a period of time. >> that was then-president-elect donald trump at his pre-inauguration news conference, comments which sent pharmaceutical stocks sharply

lower. the pharma industry now looking to give itself a reputational boost launching a major new marketing campaign today. and joining us now stephen ubl, the president and ceo of pharma. you're getting away with murder, says the president. what do you guys say in response? >> well, this industry really is a crown jewel of the american economy. if you step back, you know, you look at life expectancy more than doubling over the last hundred years and death rates associated with a host of diseases falling dramatically. at the same time, the industry employs either directly or indirectly 4.5 million americans. we invest $70 billion in r & d in the united states, which is more than any other industry. so we have a great story to tell. and we're going to do a better job telling it. >> when it comes to drug price increases, which certainly have been a focus over the last year both from the democratic side, from bernie sanders and hillary

clint clinton, and from president trump, what is going to be the narrative that you guys use in terms of explaining why drug prices continue to increase at a rate far above inflation? >> the reason we're launching this campaign is that unfortunately much of the public discussion has been myopically focused on drug prices and not on the value that the products bring to patient care, the health care system and the economy as a whole. much of the public discussion has been focused on some guy in a hoodie and really this yawning gap between what's happening in the labs, the researchers and scientists that are working across the country to identify better treatments and cures. so we want to close that gap. in short, less hoodie, more lab coats. >> it's a little late. i mean, already the industry has become a political pinata for democrats and republicans and now the president. so what would this bidding if this actually happened do to the

industry? would r & d budgets get cut back as pharma has threatened? >> well, i think there's a range of policies that would enhance the private market. and we look forward to working with the new administration and members on both sides of the aisle. and i expect we're going to find common ground. for example, we think there are reforms that can modernize the fda and ensure they keep pace with tomorrow's treatments and cures. reforming the tax code to make a more american manufacturing more competitive. identifying barriers through unleashing private market forces in negotiations around drug prices. and there's a lot of barriers that stand in the way. you know, our members are willing to put their money where their mouth is and be reimbursed differentially based on the outcome achieved by the patient. but there are barriers that stand in the way and we expect they'll be reception on both sides of the aisle moving in that direction. >> mr. ubl, when the president spoke a couple weeks back during that press conference on lack of bidding, i think he was

referring perhaps to federal law which forbids the government from negotiating with drug prices when it comes to medicare. is that going to be an issue, do you think? are we going to start to see perhaps legislation or something from the administration that tries to change that? and what would be the response from the pharma industry? >> well, it's a bit of a misnomer in the sense that under medicare's part d program there's already private market negotiation between manufacturers and private payers. in fact, research suggests that on average due to that fierce negotiation that already takes place on average consumers get a 35% discount. but if you look at countries that have moved towards government price setting and control, like the uk, for example, it's marked by reduced patient access to cutting edge treatments. i don't think we want to move in that direction. >> yeah, there's also this sense that we actually subsidize other countries though because we are paying a fuller price here to

subsidize the very research you discussed. and they're not paying a full price for it. is there something that could be done there? >> well, again, here's where i think we're going to find common ground. we think we should have stronger trade agreements that level the playing field and ensure we're protecting intellectual property and american jobs at the same time. >> the president earlier this morning was talking about a significant border tax. a lot of our u.s. based drug companies manufacture their drugs overseas, or at least quite a few of them, is that an issue you're hearing from your membership about? and what are your expectations when it comes to the actual manufacturing of drugs that may face a significant tax when they cross the border into the united states? >> i would say that more generic medicines are manufactured abroad and that the highest value portion of the discovery process happens right here in the united states. we have the secret sauce that no other country has replicated, an

ecosystem where companies partner with academic institutions and scientists to bring breakthrough medicines to market. so we think the highest value portion of that is right here in the united states. butstates, but that doesn't mean we can't make policy improvements to improve our competitive posture and create more incentives for investment here at home. >> steve, what do you hear about a potential fda commissioner? there are some names being floated, and i understand that pharma ceos may be nervous because they don't have formal medical training. >> yeah, i think it would be, you know, premature to comment on specific nominees before they're named. we're confident that the president will put somebody in place that truly wants to, you know, harness the progress that's being made in the labs across the country. i have to say, since i've taken this job, i've taken 56 trips to visit with researchers and scientists, and we truly are

entering a new era of medicine, the stuff that would be referred to as science fiction just years ago. so, whether it's immunotherapies that are revolutionizing the way we treat cancer or cart-t, where we're removing cells from the human body, re-engineering them and sending them back on smart bomb missions. i mean, wasn't it great to see president carter on stage this past weekend? his melanoma diagnosis three years ago would have been a death sentence, but thanks to advances, really breakthrough, in the way we're treating disease, we see great progress on the horizon. >> yep, and it certainly does take a lot of investment and a long time. mr. ubl, thank you. appreciate you joining us this morning. >> thanks so much for having me. >> you're welcome. >> let's send it out now to jon fortt with a look at what's coming up in the next hour on "squawk alley." good morning, jon. >> good morning, sara. samsung's got an explanation of what went wrong with the note 7 battery issues, and we'll see if that will reassure consumers for

samsung's next phone. we'll dig into that. also, qualcomm getting sued by apple. the stock is in free fall this morning, but the company is punching back on legal issues. i'll give you some information on that. and president trump's business strategy and policies are shaping up. we will also be digging into that. all that and more, coming up on "squawk alley."

bob pisani is joining us with highlights and hopefully to name some names. >> i will. i just came off the lead panel, the moderator for investing in 2017, the number one topic from all of the panelists and people in the audience was trump and his impact on the markets, and specifically, trump etfs. you can't buy a trump etf right now. you can't buy an etf that has stocks that might be influenced by donald trump on it, but there was a number of attempts here at the panel to construct portfolios of etfs based on how

trump might influence the market. so, here's a few that came out -- long etfs, for example, aerospace and defense. ita is the one here, and that got considerably more volume in november as mr. trump won the election. a lot of debate about gold. many people felt if you believe in higher volatility and higher inflation and more debt, you'll be interested in owning the gld. infrastructure and power shares, pkb has seen increased volume in hopes on a big deal on infrastructure. and a lot of disagreement on the u.s. dollar. some people say you should go long, but others pointed out mr. trump doesn't like that, has been trying to jawbone the dollar down. there were even people who argued you should be shorting the u.s. dollar. so this is a big bone of contention. no real course of action was very clear on this. on the short, some people mentioned the u.s. dollar, but a lot of people talked about the clean energy portfolios, that clean energy and wind might be

out of favor in favor of dirtier technologies, you might say, like oil and natural gas. since mr. trump's presidency will be headline-driven, tough to make clear sector plays here. a lot of people were talking more thematic investments, smaller sector plays, so oil and gas exploration. the xop's seeing an increase in volume, defense space, pharmaceuticals, pjp has also seen increased volume recently. a lot of people are arguing that you essentially have to follow mr. trump and his whole etf strategy. so for example, if mr. trump talks one day about restaurants that he likes, there is a restaurant etf out there, menu, m-e-n-u, and a lot of people are saying they have to get used to investing around the tweets. not an easy game to play right now. guys, back to you. >> yeah, no, it is not. never know when the next one's coming. bob, thank you. bob pisani. coming up, we're going to be joined by a wall streeter who participated in the women's march on washington, alexander lebenthal, president and ceo of

lebenthal holdings joins "squawk alley." we have a lot more ahead. tototoy

stocks broadly are lower. here are some individual names on the move this morning to watch. halliburton reporting profit that beat estimates, but revenue was below forecast. the oil field services company says it's returned to profitability in north america, but as an international downward cycle is still playing out. call.com w qualcomm was downgra from to neutral. and the broader dow is down about 63 points. yields are lower and that's boosting interest rate-sensitive stocks. the dollar weaker as well. we'll send it over to you, carl, for "squawk alley." >> sara, thank you very much for that. good morning. it's 10:00 a.m. at sprint headquarters in kansas, 11:00 a.m. on wall street. "squawk alley" is live. we want to take you to washington, d.c. we've been talking about this meeting with manufacturing ceos and the president in the white house today. looking to see if we'