>> what was it about, just qvc. that's all. >> the b word. >> billionaire. >> he started it. >> he is a brilliant man. >> b as in brilliant. >> yes. >> brilliant billionaire. >> dh is designated heavy, which i'll play right now because we have to go. join us tomorrow. "squawk on the street" begins right now. sticking with the push for more manufacturing jobs in the u.s., president trump meets with ceos for a second straight day. this time, it is ford, chrysler and gm. good tuesday morning. welcome to "squawk on the street." carl with jim at the new york stock exchange. you have j&j, verizon, 3 m. action in the pound as the supreme court rules on brexit.

president trump staying on his manufacturing message, hosting auto industry leaders for a breakfast at the white house this hour. we'll take you there live. plus, an eye on earnings. five dow components reporting results this morning, including verizon, j&j and dupont. and alibaba reporting quarterly earnings and raising its guidance. how investments, cloud and digital media are paying off for the chinese giant. yesterday at this time, industry leaders were meeting with the president. nowceos of auto makers. the president tweeted, will be meeting at 9:00 with automobile executives concerning jobs in america. i want plants to be built here for cars sold here. big piece on the cover of the journal this morning. auto makers in the cross hairs. mark fields of ford saying he's re-read part of the deal to better understand the president. they've assembled task forces to monitor the president's twitter

account. >> they should monitor phil lebeau's twitter. his note today is the one that has a lot of people talking. kps wi 43% of autos imported, the president wants production back here. i found that, and maybe others did, i know joe did, to be a shocking stat statistic. 43% are made here. i understand why there's predilection to look into this. now a lot of the cars that are sold here are not necessarily made by the big three. >> yeah. i know. 43%, right. toyota that's made in japan or a honda or a hyundai or an audi or a mercedes or a bmw. many have factories in the universi united states. or nissan. >> 500,000 cars being built in

mexico, infrastructu infrastructure, how about a new airport, and i point out we are a free nation that has lower price cars because we allow a lot of imports in. these are not like, wow, why aren't they making more here? if you bought a car -- my daughter bought a ford recently. at ganley, it was $13,000. it was a used ford with few miles on it. it doesn't cost $13,000 if 100% of the cars are made here. it just doesn't. >> no way. >> you agree, right? >> yes. apparently if you're going to be importing a foreign-made automobile that is manufactured overseas, you're going to be paying more for that, too. in china, when they're buying their mercedes or bmws, they're

paying more than we are. >> yes. gm, i don't know what the price is, it is a huge seller of cars in china. i just put out this. i thought phil's accurate -- i don't think there is alternative facts to phil. phil is facts. i think that that's a number where i think the president says, that's an easy industry to kind of make some jawboning with. i think i'm surprised he doesn't jawbone with the companies that are really building a lot of factories in mexico, to take advantage of it, which tend to be toyota and nissan, mercedes-benz and -- i mean. >> yeah. meanwhile, the market itself now has traded sideways for longer than it rallied after the election. >> isn't that something? >> so people wonder whether this trump rally, as we refer to it, is in the past, still going on? what do you think? >> look, we're in earnings. if you're looking at a trump rally and you look at j&j which didn't guide well, i thought it was a good quarter, verizon

spent too much money to try to compete against t-mobile and against sprint. those stocks come down and color the dow. then the next thing you know, people question the trump rally. what i'm looking at is interest rates have -- went lower. oil went lower. integral to a trump rally. then i say, don't lose heart but understand we're in an earnings period. whether trump or no trump -- not playing bridge here -- but in the end, the numbers are controlling. proctor had a great quarter. ibm had a better than expected quarter though the bears didn't want to say it was. mcdonald's was a conference call from hell. i look and we're back into earnings. you want to focus on washington. i have to focus on earnings. some of the quarters were just okay. >> the thing i will say about the guys who are visiting the white house today is they're spending time thinking about this idea of bringing jobs back, if that is possible, and what the new world is going to look like, but they're also thinking about three to five years from

now when they'll be making a autonomous vehicles. either fully or largely autonomous vehicles. >> yes. >> sergio spends a lot of time on that, i can guarantee you. in a world like that, where driving is such an incredibly important profession, in so many states for so many people, i wonder what that means for jobs. yeah, you can bring some jobs back here to make the automobiles that are going to then be autonomous in the not too distant future that'll put a lot of people to work. >> i'll push back. i had skywork solutions on last night, a stock that is up -- one of the best in the s&p. what are they doing? chips in autonomous cars. yes, there is a whoozer maybe in how many cars are bought, but there is a win in the makeup of the car for many american companies. >> is that resulting in more employment, when more chips are coming off the line? >> it is not clear but maybe.

four big factories -- one in mexico -- but a lot of the chips are more than just credit krel phones. the intellectual content in cars are up. >> the need for 5g to make it run ten years from now. $100 billion investment, if not more. >> i'll challenge that, too. i'm in a challenge mode. the ceo of skyworks was saying, griffin, 2020 for 5g. >> that'll be a big year. fields said it is their target for cars with no accelerator or steering wheel. >> i don't believe 5g. jim, the amount of money that needs to be spent to make 5g workable is enormous. >> i hope so. >> enormous. >> that'd be great for america. >> 2 million cell sites at $50,000 a piece or whatever it is. >> i'm trying to be a visionary. >> not 2020. >> okay. >> based on different

conversations i've had. >> the day is going to be a lot more that be the ceo meeting. we have votes on carson, chow and ross, looking for executive orders. the "times" is reporting that comey will stay. let's get to the white house. >> out here on the white house north lawn looking for the auto maker ceos. it is after 9:00 on the east coast here. presumably, they zigged when we zagged and they're already in the building. we have not seen them yet this morning. you mentioned that tweet from the president this morning. here it is again. the president tweeting out, in the 6:00 a.m. hour, we'll be meeting at 9:00 a.m. with top executives concerning jobs in america. i want new plants to be built here for cars sold here. the attendee list for the meeting, we are told, mary of general motors, mark fields of ford and sergio marchionne of fiat chrysler. presumably, all will be talking about the issue donald trump tweeted about this morning.

presumably, they'll be figuring out how to deal with the tweeter in chief. this is something new in the arsenal of the presidency. it is a short-term stick, you know, that the bully pulpit can use in this day and age that we haven't seen before. we're going to watch and see what this meeting brings today. we'll wait and see what the ceos have to say on the north lawn, if anything, when they come out of the meeting with president trump at 9:00, guys. >> we'll be on the lookout for that tape. going to you soon. appreciate that. >> listen and think about the cost of all this. a.k. steel reported a remarkably good number. why? tariffs. what do you hear about from companies that use a lot of steel? price of steel going higher. if they raise the price of steel, they'll raise the price of the car. there are consequences to tariffs and protectionism. we are only talking about the good things, which is maybe a factory here or there. ak steel, i say to myself, wow, there you go.

cut off what isn't fair but you raise the price of companies that use a lot of steel. we cannot overlook that. it is not coming up in washington. >> grover norquist this morning, becky asked him whether or not this border -- the tariff and border adjustments is a tax cut he can live with. he is looking at the net effect. obviously, pointing out there are going to be winners and losers. >> look, if you don't have a job, you can't buy a car, all right? if you have a job, you can buy a car. you know that the car zboing is to cost more. the favorite class of the people who voted the president state by state, and i understand. but remember, all of us who buy cars are going to be impacted by this. the steel numbers you see with u.s. steel, this is what happens with protectionism. that's why you don't have it. >> don't forget, the border tax adjustment is a very important

revenue producer for the blueprint we have on tax reform. >> true. >> otherwise, you blow the deficit out of the water. >> right. in order to get the republicans on board who are fiscal consumers. >> correct. >> maybe this is in the beaweed but when i look at the companies recording better quarters, it is because the obama government got involved. alcoa, 20% is owned. kle kleinfeld was at the meeting yesterday. obama looked at that. do we want the price of aluminum to go up if we're making f-150s and we're mark fields? no. he wants some way to get a cost break so people aren't outpriced for the f-150. it is more complicated than saying, you have to build here. >> yes, it is. we'll get to all of them. j&j, dupont, verizon, 3m, lockheed. we'll stay on top of the president's meeting with the auto industry, of course.

when the ceos come out, try to get sound from them. later on, reaction from bob n n nardn nardelli and what the supreme court decision is doing to the pound today. more "squawk on the street" in a moment. ur. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. [phone buzzing] some things are simply impossible to ignore. the strikingly designed lexus nx turbo and hybrid. the suv that dares to go beyond utility. this is the pursuit of perfection.

♪

five dow components joining the earnings parade. verizon, j&j, dupont, mixed results. travelers with a record operating profit. and 3m out with better than expected earnings. revenues in line with consensus. revenue misses from dupont and j&j, jim. >> both companies are in -- not in position to really give you guidance. j&j might be involved with acquisition. they have this wide range, if we do a deal, you'll get this. >> they are involved in an acquisition. made a few calls this morning. apparently, things continue to move ahead. the cfo was a guest earlier on cnbc and indicated they were in exclusivity. you may not see a deal in the next few days but at least it hasn't been derailed. because some had been expecting it would have been announced prior to j&j's earnings. >> i think people are being snap

judgment oriented if that is the case. they couldn't be as clear about the guidance. the quarter was fine. i like the pharmaceutical growth. i think, sitting next to the president yesterday, delivered on pharma growth, alex gorsky. the cost savings of dupont, something the ceo knows how to do better than anybody. he moved the merger talk to the first half. we were hoping it would be this quarter. suddenly, you say, you can't forecast it because when did we know the steel is going to close? i've been spectacle about this deal. >> you have. >> and more since the president was elected. there's a lot of ag involved. >> although, remember, monseno and beyer visited with trump and discussed that they were keeping

jobs here and add jobs. that's better. the deal, the judgment on dupont may lead to mthe eu, though it s not the same. >> green and livers assured me the deal will be done. i think overtime, when you see deals drag, alllike wall green rite aid, it doesn't give you reassurance. the longer it goes, the less likely. >> that is a fair statement. >> yahoo! and verizon? >> that was actually -- people should be grateful it is done. >> the usage numbers from yahoo! which ended up being good would be presented to verizon. they were. it seems the deal is most likely going to happen. >> right. >> i think we have some comment here from verizon on their call.

they said, pending yahoo! acquisition would increase their opportunity to scale in the digital media space. and we're working with yahoo! to assess the impact of the breaches. we've not reached any final conclusions. is what they are saying at this point. >> what did you think about the fact it looks like they were promotional, verizon? >> yeah. also, verizon did not have a good quarter. >> t-mobile up. >> headlines from the meeting with the auto ceos, telling the auto industry executives the u.s. must have a very big push to build auto plants and other facilities in america. cite a pledge to cut taxation since environmentalism is out of control. yup. couple others coming in. we'll get to those as they come in. interesting. figures out last night that facilities x homes are at the oldest they've been in the country, i think since the '60s. >> wow. >> commercial facilities on

average. >> it is interesting because there is a perspective that if you got that money back, the companies would not use it to rebuild. maybe that's a reason to rebuild. you know what? when cars were -- average car was tenure on the road, you have to buy more. lasted 11, 12 years. it used to last more. it is important. >> if you write-off capital investment, why wouldn't you invest more? bring the money back. >> larry cutlow would argue that. not trying to endorse or attack but there is a sense among the auto -- manufacturers that i deal with in mexico that they have a very, let's say, less rigorous approach to pollution in mexico. >> when you see a headline like that, environmentialism, does that mean the cap standards for

the auto makers. for example, tesla has benefitted from it, you could argue, given how far it goes. >> tesla is in every meeting. >> is there -- >> if you roll that back and say your fleet doesn't have to have the same mileage -- >> right. you have something there. we have to find out more. he tweeted this morning, other than the auto thing? >> it's all we have. >> the last time he tweeted was the 9:00 meeting. president trump, give us a little more. if it is environmental, meaning it is easier to build cars in dirty places, you bet it is. we have stringent control. >> we still haven't gotten to so many things, carl. the verizon numbers are worth hitting again. baba, of course. >> oscar nominations. a lot going on todayme. we'll get to all of it. the mad dash. opening bell in ten minutes. don't no anywhere.

♪ yesterday, you saw the president signing the executive orders. mostly related to trade. we are expecting, according to nbc news, others, guys, that would advance both the keystone and dakota pipelines today, per a senior white house official, as the orders are flying fast and furious on day two of the full business week. >> a lot of talk about the number of jobs created. obviously, people don't recognize, uniquely, people in the regulations -- various regulations are federal, and this will matter. it will matter in terms of

accelerating. you can get the regulators to approve. i was doing work on a particular cove -- there's a jordan cove, a plant in oregon, and it was stopped by the feds. it was going to be a huge number of jobs. this is the -- there is a surplus of natural gas, they were going to do liquefied gas in oregon. it was killed by the feds. he doesn't want to see that. this would be a job creator. obviously, people should recognize a lot of crude goes by rail. this is the way to have it not go by rail. i would also bring up a lot of the crude that people don't like, the heavy crude from canada. we have refineries to meet that, but just understand that i think that this is the change that the pipeline companies said over and over, we get this, we are going to make more money, including enterprise. now, there was an energy secretary on the board.

>> yes. >> rick perry. >> yes. >> likes the the president now. >> right. he favors keeping the department of energy. >> right. >> he's running it, so it is good he keeps it, right? >> i suppose. >> instead of putting it out of business. made a mistake. i think he is an honorable man he said he made a mistake, but it is a pipeline he is intimate with. >> we are expecting this tape in the meeting in about a minute and a half. stay with us. meanwhile, reuters runs a piece that fund managers are betting the aca does not change much. they cite gamco and others from managers buying hospitals, insurers, biotech on the thesis. buy it? >> you shouldn't buy hospitals -- >> they believe minimal change to the act. >> i think it is wrong. i mean, this is like an sat game. prices to hospitals as pruitt is

to regulation. i mean, these are -- no. i mean, wow, that's wrong. that's wrong. if you want to see a more thorough, rigorous analysis, go to the dean of the group and they'll explain why the hospitals tend not to pay. you go back to the days where hospitals have a lot of not paying. i would go against it. >> other news, as well, of course, dthe etna/humana deal. expectations are given anthem and sigma was seen as having less of an opportunity to get through the review by a judge, that that one will also be blocked. leaving all the players in tact of the big five. big five, right? >> here is the president moments ago. >> that's right. i want to thank you all for being here.

we have a very big push on to have auto plants and other plants, many other plants. you're not being singled out, believe me. mary, i promise. but have a lot of plants from a lot of different items built in the united states. and it is happening. it is happening bigly. we had whirlpool up yesterday. talking about big construction of facilities. and it is not the construction i want, although it brings jobs, it is the long-term jobs we're looking for. we're bringing manufacturing back to the united states bigly. we're reducing taxes substantially, and we're reducing unnecessary regulations. we want regulations but we want real regulations that mean something. mark and i were together yesterday, and i think we understand that. we're going to make the process much more simple for the auto companies and for everybody else that wants to do business in the united states. i think you're going to find us to be from very inhospitable to

extremely. we'll be one of the most friendly countries. now, it is not. i have friends that want to build in the united states and go many, many years and can't get their environmental permit over something nobody ever heard of before. it is absolutely crazy. and i am, to a large extent, an environmentalist. i believe in it. but it is out of control, and we're going to make a very short process. and we're going to either give you your permits or not give you your permits but you'll know quickly. generally speaking, we're going to be giving you your permits. we're going to be very friendly. and it is an honor to be with you today. and maybe we'll start with mark because we got to know each other pretty well yesterday. excuse me? would you like to -- you're not supposed to ask questions. you're not supposed to ask questions. >> about james comey.

>> [ inaudible ] >> there's always one, jonathan, right? got to be one. >> thank you very much. >> that is the president with chrysler's sergio on his left. mary barbara ra on the right. mark fields. happy birthday, by the way, turns 56 today. >> i saw that marchionne went with the sweater look. i'm not sure the president would be keen on that. i think he would have thought, where's your tie? >> maybe. maybe that was his first thought. i don't know. it's all bigly. >> echoing the themes of

yesterday. environmental regulation. >> that's why i say, oil and gas. i know oil was down yesterday. people sold. that's a mistake. >> watching the president shake hands. the opening bell right now. there's fields with the president. hear anything new out of this, other than -- >> no, it is a great question. i think that we tend to want to over and over again say what's new here. there's nothing. it is consistent with campaign, which is consistent with what he's been saying. actually, i'm surprised -- we know all the work says that small business is where the jobs are created. i keep waiting, where there are small business people involved, who do the hiring. because these guys, maybe they build a plant and it is a five-year process. how about the small businesses hurt by the -- they need the

deregulation more. i sam surprise e i am surprised it is the same group, the car companies. how about the people who do the hiring? >> let's bring in phil lebeau. phil, your reflections as you listen to this tape here? >> i agree with jim. there's nothing that is going to change just from this meeting, aside from the fact that it is clear president trump wants more auto plants built here in the united states for vehicles that'll be sold here in the united states. and to wrap our heads around how many vehicles we're talking about that are imported just from the big three -- not talking about all auto makers -- just gm, ford and fiat chrysler. last year, they imported from mexico and canada, 2.256 million vehicles. if you want to bring that production back to the united states, you're talking about a huge capital investment in terms of new facilitiefacilities. on top of that, figuring out what to do with your plants that are building the vehicles in canada and in mexico. so it is clear, they're pushing

in this direction. but you guys know, this is a capital intensive business. to make the investment of several billion dollars for just one auto plant, that's a huge decision. auto makers rarely make the decisions. they come up once every four, five years, at best. now, you're saying to the industry, hit the brakes. come back to the united states. >> now, phil, of course, he does couple that with talking about less regulation and taxes going down. >> right. >> you do have to figure that in if you are thinking about allocating capital and you're gm, ford or chrysler. your capital investment conceivably could be written off day one. you'll be facing a huge import tax if you don't come back. >> in some way. >> on the vehicles you'd be importing back. you can write-off whatever you're doing, again, in year one, and your tax rate will be lower. those may be things that do, at

least, stick in the consciousness of the people as they think about the long term plans. >> david, let me throw out another idea. see sergio next to the president? fiat chrysler made the decision, we're not building cars in the u.s. anymore. low profit margins, no sense in making the it. we'll have a third party do it. i won't be surprised if you see some of the auto makers say, at least with the small cars, okay, if we're going to be taxed to bring that in from mexico, maybe we hire a third-party firm like amg out of indiana to build a ford fusion or the ford focus, or whatever chevy vehicle you're talking about. that's a hypothetical out there. the idea of these guys building a plant somewhere in the midwest to build small cars, that's going to be a tough bill for the auto maker executives to swallow. the margins are so thin on those small vehicles.

suvs and trucks are completely different story. but a lot of the vehicles that are imported tend to be smaller vehicles, which is exception of -- with fiat chrysler, as well as gm, bringing in heavy duty pickup trucks from mexico and canada. >> phil, your point -- is your point that they don't need the additional capacity here? if so, what about the costs of closing their existing facilities overseas or cross borders? >> that's exactly what i'm getting at, carl. if you're an executive, you're not only looking at the cost of building a plant here in the u.s. it shall a-- and frankly s jim cramer talked about this before -- this is not an industry looking to add capacity. there is a lot of capacity worldwide already. so they're cautious about adding capacity. now, you not only have the billion spent to build a plant in the u.s. on top of that, what do you do with your plant that's in ontar

ontario? close that down? bell w well, if you're supplying the u.s. and you'll be importing and taxed, you shut it down and it is a hit on the bottom line. these guys are in a pickle, to be honest with you. >> i think the "journal" uses the term "rattled," right? >> they have to be. >> what do you think as we're looking at the tape again, reracked from moments ago? >> following up on what phil was saying, you have to think of this as a two-tiered process. there is the political tier and the economic tier. what you're looking at right now is the political tier. this is the trump administration sending a message to the country, laying down a marker with these ceos and telling the industry what it wants to have happen. on the economic tier, you heard donald trump yesterday saying he wants to get the united states into a position where it is economical for companies to manufacture here. that is by the time they pay for the cost of shipping and

transport halfway around the globe, energy, all the things you need to do to make a product overseas and bring it here, that it will not be economical for those companies. that is an enormous financial challenge. the reason all those jobs, of course, have gone global and all the companies have outsourced offshore all the jobs is because it is cheaper to do it that way. changing that math is going to be an enormous struggle in washington, d.c. if they can do it at all. that's going to involve all of the levers of national economic power, including legislation on capitol hill. we'll see whether they can do that or not. you wonder what happens when those two tiers can't really meet in the middle. if they get to a point where they can't make it economical for companies to do this, how will they continue on the political track when ceos say, simply, sir, we can't make money if we do it your way. >> phil, i brought this up earlier but i'd love your take. these guys and ladies have a lot

on their plate given the pressure they're facing from the trump administration. not to mention, autonomous vehicles, which you spent an enormous amount of time on. when you talk to a guy like sergio, that's what he's thinking about, in addition to manufacturing, isn't it? >> yes. >> this idea of how many jobs that will conceivably displace when it hits. >> yes. exactly. i mean, look at the capital investment for autonomous drive vehicles. that's one reason why ford shares haven't been moving higher, david. a lot of analysts are sitting there saying, wow, look at the money you guys are spending on this. we know you have to spend that and we're seeing the same thing from general motors and fiat chrysler to an extent is moving in that direction, as well. these guys to a large extent are boxed in here. they are going to be told, manufacture more in the u.s. by the way, while you're doing that, with your existing portfolio, there's competitors coming in with autonomous drive

vehicles. that technology is capital intensive in terms of developing it. you don't want to be the last one to the party. you want to be in there early on. your point, david, and i'm seeing the shares of the auto makers moving higher here, that's interesting. i think a lot of analysts will tell you, the guys are facing higher costs. one way or the other, they're facing the prospect of higher costs. >> interesting you say that, phil. >> true. >> since election day, fiat up 47%. ford up 7%. way underperforming. >> carl, real quick, look at the cafe standards. i'm sure they'll make the push with the trump administration on that. >> phil lebeau in chicago helping us understand this meeting. jim, you said it yesterday. you said the argument out of the white house is going to be your gross margins will be more than made up for ex-currency, ex-everything else. >> you have to close plants and add plants.

there's demand. doesn't maintain at this level. these are companies you have to sell. you have to sell the shares aggressively. i've been waiting for something to happen. listen, here's the call. this is going to hurt these companies. a follow through with the way phil just described is something that makes it so if you want to own ford, you're going to be challenged to to so. if they're being asked to do things like closing plants, building plants here, they can't afford it. they just cannot afford it and maintain their earnings power. >> right. >> it's not going to happen. >> you'll hear me talking about tax reform endlessly for months to come. i'll mention it again because it is vitally important to at least having the carrot part of this for the auto makers as they try to figure out what the world would look like should they actually choose to, in phil's words, make these investments that will take years to play out. yet, we don't really know. we don't have any specifics on tax reform. it is going to be potentially months until we start to get a sense as to the contours of what it will look like on the

corporate fund. will the adjustment be part of tax reform or a tariff, the way the president seems to want to frame it? will we get the capital investment right off year one? interest deductibility going away. so many questions these guys will think about as they work their models for -- in capital allocation for years. >> costs a fortune to build a new plant. i love what phil said. i went out to see ford's plant of the future, where they're making autonomous cars. what they were working on is what happens when a pedestrian walks in front of a car? what does the machine do? does it brake for the pedestrian? does it, therefore, throw the driver out to the window and you stop with an air bag? it is requiring hundreds of thousands of sensors to figure out what to do with a pedestrian. very hard stuff. >> it is. you need a lot of data, too. >> costs a fortune to make the car. you make the car in mexico and it costs less. no one is going to do that.

>> fair to say, you still, at this point, prefer energy? >> oh, yeah. >> but no health care, no rails -- >> no health care. rails, it depends on the rail. >> right. >> coal is not going down as much because natural gas has gone up, which is very good. the rails were not that bad. i'll point out the most important thing i heard this morning was dakota and keystone. keystone is transcanada. it is really fabulous for them. dakota is e.t.tp, terrific for them. the federal government regulators can be -- you can change those regulators and get something fast track. there's always going to be local, but the local can be overridden. i know the pipeline companies pretty well, and this is the real news of the morning. not the auto companies. keystone and dakota. a lot of jobs. environmentalists will be upset. >> other news of the morning, back to stocks, guys, is

verizon, which is worth taking a closer look at, given it is down over 4.5% after reporting earnings that were not really up to at least the people who follow the company hoped for. eps at 86. consensus had been higher. postpaid net additions of $595,000 looks good. the street was looking for over $700,000. >> wow. >> i think the note this morning wraps it up. a good story is a gross story and verizon isn't growing. they point out the wireless business has grown by subscribers 1.9% over the last year. avenue revenue per user was down 7.6% year-over-year, leaving total wireless revenue shrinking by 4.9% a year. that's going to wrong way. that is an interesting data point for this industry overall. as we watch at&t, of course, make serious strategic decisions. not just directv a few years

back. of course, the pending acquisition of time warner. verizon, for its part, still potential in the deal with yahoo!. bought aol. will it do something larger is a question. >> how act how much promotion there was for the iphone in order to stem t-mobile and sprint? this is a moment where there is --er verizon is struggling. >> cash flow was negative in the fourth before dividends. >> people will freak out about that. >> this is a dividend stock. t-mobile introduced so much competition. sprint, also. it's a very competitive marketplace, which does get back to the idea of, would you see a doj allow 4 to 3 if t-mobile and sprint wanted to go at it again, in terms of getting together. >> the answer right there. it'll be interesting. i know ied ledger to get his insight on the verizon call.

usually has constructive comments. >> are they dumb or dumber? >> there is a lot of different -- >> a lot of moving parts. >> western digital, 18-month high. >> big winner. western digital was down because people thought there was going to be a new plant involved. doesn't take long to build plants. western digital is a stock that can go up substantially, given the fact they're flash. look at that. i said it'd go to 100. d-ram is tight. flash is tight. these are boom/bust cycles. when you get involved and they build the plants, you do have a -- but right now, the tightness is on their side. there is a big, big demand. there is no surplus of -- tough to get flash, which is going to move up the price of a lot of devices. western

acquisition they made of sandisk. >> allibaba doesn't appear to b giving it up at all. the company reporting better than expected numbers earlier this morning. 54%, top line growth. raised their fiscal year '17 guidance from what had been at least 48% to now 53%. just to compare, 2016's revenue growth, 33%. they have seen an acceleration of growth at alibaba on a much larger base. montization seems to be increasing. mobile revenue up 73% year-over-year. does account for 80% of their retail revenue in china. and the average users on mobile, 493 million people. that's up 25% year-over-year. they're not just going to the platform to buy things. it is different than amazon in the sense of, they have movies, various forms of entertainment

on the platform designed to keep people engaged with alibaba. then maybe also transact in some way. >> you know, you have -- >> it is a somewhat different strategy. can't think of it as analogous to amazon. the chinese consumer, it seems to be going in the right direction. >> the proctor call gave you a hint it was doing well, online. 40% of proctor stuff in korea is sold online. >> i did not know that. >> yeah, imean, alibaba, justifiably on fire. remember the ruckus about whether the numbers were real? >> remember the -- >> john lang's story. >> up $40 since then. short position. >> the growth there -- growth the fabulous and they si it ay . it moved from 70. it's all i think is relevant. it is a w. ugly w but it is a w.

>> market value approaching $250 billion. j yahoo! shares, in part, are up because alibaba is up. and also purchased by verizon does appear to be, at least in the eyes of investors, stronger than it was given the comments from yahoo! and verizon. we told you about user engagement being strong. >> home builders having a nice morning on the back of horton. >> they're in a trump free zone, so to speak, and interest rates were down. i have liked that industry. the problem is, you get one day where the rates are higher and they sell again. there was a downgrade of k.b. hopes to sell. they're in california where there is a shortage of land. every time rates go up, they're sold out. the numbers are going higher and interest rates, they go lower. toll had a good quarter.

kb home and now horton. three for three. three for three is real good, unless it is ben roethlisberger and, you know -- >> and you know who. >> rodgers. >> your man, ledger, tweeted you back. >> what'd he say? >> calling it a midlife crisis. >> did he really? >> is that something he's already done? probably. >> i want new stuff from him. >> is that new? >> he called it a midlife crisis? >> intervention crisis, check list for verizon. >> look, ledger an an alternative fact story to verizon. >> yeah. >> about how many people are in the verizon stadium. it's a reference. >> i understand. i understand. >> so far, t-mobile has the goods. i don't want to dispute t-mobile because they've been the winner. >> let's get to kourtney reagan on the floor. >> good morning. politics and company forecast

and commentary is what investors are using. we had the run for stocks in the week of the election but stagnated since. investors are waiting for more specifics out of washington . it is great to see the ceos meeting but what does it mean for the companies? what is the conversation going to be like going forward? especially as you talked about, what the taxituation will look like under the new administration. now, the trading ranges for the indexes have been narrow. we've on either side for the s&p and the dow. s&p, slightly higher but under 2 2270. if you look what's going on with the dow, we had a lot of components reporting today. five of them -- four of the five actually doing pretty well when it comes to profit. three of the five revenues missing or in line. that's some of the concern that we think about going forward and the forecast we want to hear about what the companies will do with their u.s. manufacturing.

their u.s. jobs and how much we'll hear in the days and weeks to come. if we look at the broader indexes or broader measures for the market, the dollar destabilized after dropping on comments from treasury secretary mnuchin about the strong dollar having negative short-term implications on the economy. we've stabilized and seen the safe haven trades reserve. the yield on the tenure, above 243. that had fallen. gold is lower after being higher yesterday, helping to find its footing from the stronger dollar. we've seen a reversal in some of the sectors when it comes to who is leading and who is lagging. back to you. >> courtney ledger, thank you. >> what ledger says about verizon. hashtag, hopeless. >> you talk to them and they talk to you. let's talk to rich santelli at the cme in chicago. good morning, rick. >> good morning, carl. many of us look at the market to

try to glean some insight with regard to how we should trade the markets from this point forward. by looking at the interest rate complex, you're not getting a lot of new information of late. yes, rates are up about 3 or 3.5 basis points. but you do get more information if you take a wider shot. let's start at the third week of november. clearly see, tens have a lot of volatility. ten base point range yesterday. all in all, it doesn't seem to want to go below 230 and has a hard time staying above 2. that's what traders are trading. that's the range. if you look at the time reference to bund, a different picture. they're slowly bumping and going higher against significant levels around 40 basis points, which means the difference should be something to measure that's important.

on the 10s bunds, you see the correlation is key. the difference between the two yields narrow, there seems to be a propensity for slightly higher melting up rates. the built guil gilts are more s. the dollar index, 100. you see it at the bottom. the spread tens minus bunds, 200. saw it at the bottom of the last chart. the dollar index, that chart, the last chart we have here, very significant, that's where the volatility is. that's where the breakout was most important. you know the levels. now it is a matter of when we violate them on a closing basis. back to you. >> rick, thank you very much. rick san tetellsantelli. president trump wrapping up a meeting with the auto executives at the white house moments ago. here's what he had to say about the environment. >> i have friends that want to build in the united states. they go many, many years and can't get their environmental

permit. over something that nobody ever heard of before. it is absolutely crazy. and i am, to a large extent, an environmentalist. i believe in it. but it is out of control. still to come, former chrysler ceo bob nardelli on his take on the president's meeting with the auto chief executives. dow up 11 points. back in a moment.

this is john ledger and jim going back and forth on twitter. want to explain what's going on? gh t >> trying to get more color about what he thinks aboutveriz. he runs t-mobile, of course. he said we have to band together to help verizon through the midlife crisis. he's just saying, this didn't do the numbers. remember, he has numbers, too.

well, let's just say he doesn't mind throwing stones. stone thrower. follow my twitter if you want to read it. i don't have time to read it now. >> ceo for the time. >> which is dumb or dumber, he doesn't give insight to that. let's say he's having the time of his life and certainly not being lawyered up. >> what's on "mad" tonight? >> bigger gainer in the market, resmed. sleep apnea, sleep company. mick has done a tremendous job making this into a cloud based company. he's teamed up with dr. oz, mr. sleep, by the way. he said, jim, get more sleep. i said, i would if i can stay asleep. dr. oz not helpful for me. i love him though. goes to eagles games and is fantastic. i want to mention lockheed

martin. it is not down because the president has been tough with them but because of material weakness and the accounting. it's something united technologies is probably having a good laugh about because they sold them that bill of goods. oil-derise oi oil-derived. helicopters to go to the oil platforms. not doing a lot now. >> rig is up but -- >> hashtag hopeless. >> see you tonight. "mad money" 6:00 p.m. when we come back, bob nardelli. now we just need 500 more... translated into 35 languages, personalized oh and shared across the 7 continents. (other languages spoken) look abbot, i got it. it's a miracle. ♪

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♪ i gotta testify ♪ come up in the spot looking extra fly ♪ ♪ for the day i die ♪ i'm a touch the sky good tuesday morning. welcome back to "squawk on the street." i'm carl with sarah and david at the new york stock exchange. a lot going on. keeping an eye on cliapit hill. confirmation hearingor tom price. plus, paul ryan and house gop leadership holding a news conference. monitoring that. the speaker inviting the president to address a joint session of congress in february. look at the markets.

dow, basically flat up about 20 points or so. oil, up about 1%, as well. >> we have new economic data crossing the tape. let's get over to the numbers. diana? >> sarah, existing home sales, down 2.8% to a seasonally adjusted annual rate of 4.9 million units. that's a miss. the numbers revised up to 5.8 million units. we're barely higher than december of 2015, up 0.7% year-over-year. the big story here is inventory. 1.65 million homes for sale. that's down 6.3% year over the year. that is the lowest supply of homes for sale since 1999, just a 3.6-month supply. if you're wondering if higher mortgage rates factor into this, this was the calm before the storm, before mortgage rates shot up post election. these were deals made in november and early december.

that's not the effect of higher rates. the realtors say, we will see that in the next two months. that tight supply of homes for sale pushed prices up. median home price in december, 332,300%. we got the annualized number. december, full year, 2016 rounded out at 5.45 million u t units sold, up 3.8% year-over-year. that is the best year for sales since 2006. prices though, in the last five years, we have seen home prices up 41% in five years. we continue to see prices rise faster than incomes. with supply as low as it is, we'll see the price go higher this spring. the realtors warning this tight supply will continue to hurt affordability in the housing market. they're not expecting a bump up in sales for 2017. back to you, carl. >> diana, good information on a day where the home builders are doing well stock wise.

the white house turning to the result belt. gm, ford and chrysler attending a breakfast with president trump last hour. the president saying his administration will bring jobs back to the u.s. quote, bigly. in a moment, we'll discuss that with management expert and contributor bill george, as well as former deputy secretary for international trade, gary huffbauer. first, let's get outside of the white house. a busy day in d.c. again. >> we're all playing close attention to the video tape we saw of the ceos meeting, doing the learning of how the trump administration will operate. we're watch who is in the room, where they're sitting and the language the president uses in interacting with the folks. our eagle eyed d.c. bureau chief spotted matt blunt in the room at that ming, se in meeting, ac trump. he is the head of the automotive

lobby counsel. the son of senator roy blunt, who chaired the president's inaugural committee and introduced him at the inauguration last week. industry connections in the room. we're also watching this exchange between president trump and mary barra of gm. the president earlier in the month, before he was sworn in, singled out gm with a tweet. >> we're going to cut you off for a second and listen to house speaker paul ryan. >> does it trouble you that he continues to hold a belief like this that isn't based in fact? >> look, i've already commented on that. i've seen no evidence to that effect. i've made that very, very clear. on the infrastructure question, this is something that we will figure out in our spring budget. we'll carve out the fiscal space necessary for the infrastructure pa package. we discussed that. the infrastructure is going to be a part of the first 200 days t. size of the package will be determine bid the fiscal space

created in the spring budget. meaning we don't know the answer yet. the goal is to leverage as much as possible. the goal is to leverage not just roads and bridges but pipelines and so many things. infrastructure involves many aspects that'll create jobs in this country. we want to be as expansive as we can with respect to infrastructure. >> do you worry it's going to be hard to work with a president who believes certain things that don't -- >> i'm a policy guy. i'll focus on policy and not the effect it takes. >> speaker, along the idea of policy, yesterday, the president told business leaders if they have either sent jobs overseas or will send jobs overseas, it isn't very clear, it seems, what would be the defining line there, that they'd face a 35% border tax as he called it, for importing goods back -- or importing goods into the united states. what's your feeling about that? >> there is a difference between a tariff and border tax.

i'm not sure if you're getting the phrase correct. but we believe that comprehensive tax reform is going to solve this problem in many ways. so as a former chairman of the ways and means committee, i can tell you the current tax system we have innocecentivizes busine to go overseas. it encourages businesses to leave america and outsource. we don't want to encourage that. we want to have a tax system built for growth. we tawant a tax system that mak it clearly more preferable for a business to locate their business and manufacturing in america. so right now, the tax system says, move overseas and reimport back to america. that's what our current tax system incentivizes. we want to get away from that. we believe a border tax, which is what all the competitors do. don't forget most of the other countries in the industrialized nations remove the tax off their exports and place a tax on the imports. we do the opposite. we tax our exports and dot no

t -- do not tax the imports. we're putting ourselves on a level playing field so american bi businesses and jobs can compete. if we as american workers and american businesses are putting ourselves in a level competitive playing field, we're going to do great. that is not what our current tax system is today. tariffs are different than border taxes. tariffs are something the administration, as you know, has unilateral authority to do. fiscal policy is run by congress and the tax code and is tax reform. we want tax reform that works for american businesses, american jobs, and we want -- look, i can't tell you how many hearings we've had at ways and means where we see all these businesses leaving the country. we lost our biggest employer, biggest company in wisconsin, which is now an irish company. miller is an irish company -- or

belgai belgin, i think. we have to reset the system so american jobs and american businesses and american companies stay in this country and produce more economic growth and jobs. yeah? >> [ inaudible ]. >> it is. we've been working off -- that's the blueprint. we're working off the blueprint here in the house. the blueprint is designed to be revenue neutral and that's what we're working on. thank you. appreciate it. can't get started and keep going. >> that is speaker ryan with the press core at the briefing, talking about tax reform, trade, trump's agenda during the first 100 days. we are joined this morning by former medtronics ceo, bill george. as we said, also the former deputy secretary for international trade at the u.s. treasury, gary. good to see you both. bill, we had a long discussion

in the last hour about the decisions to move capacity is a big one. it takes place over many years. boards take it seriously. how much can the white house move that needle and how fast? >> well, as i said in my article last week in "fortune," this is good politics and poor economics. long term, the manufacturers have to have a global mother and father -- manufacturing plan and have to make things economically. they can't make small cars in the united states if they'll lose money. i think there is going to be a lot of rethinking about this. i agree with speaker ryan. we need to fix the tax system. we can fix the repatriation tax and bring back tens if not hundreds of billions of dollars into the united states and tell the manufacturers they have to reinvest in the u.s. i think that would be a huge boom. just trying to put border taxes on and punishing people, i think could ignite a worldwide trade

war, particularly with the chinese. i'm not in favor of that. i'm in favor of incentives that cause people to want to manufacture here. i think speaker ryan said it clearly, we have to stop disincentivizing people to manufacture here. exports created 6 million jobs. >> gary, this is your wheel house. on the border tax issue, which we just heard house speaker ryan defend, he said it is not a tariff and it levels the playing field. so many other countries do it, as well. is that true? >> yeah, all those things are true. but it is also true that president trump said it is too complicated and it is not lovely. and his treasury secretary, mnuchin, echoed those words. and i should add that there are a lot of firms in this country who are against it. in particular, retailers, oil refiners and some auto firms.

so there's a big battle as to whether we have the kind of border tax adjustment which speaker ryan and calling on and o advocating. >> is it harmful to the auto makers there, if he actually goes through and goes beyond the job owning and threatening and implements this border tax he's threatened? >> well, i think a border tax would be very harmful. where it'll hurt is the retailers. gary, go ahead. >> i was going to agree with you. you know, this business of job owning, what the president has done with some success, has gotten many firms to agree that they're going to locate a plan here, do something, not to move to mexico, whatever, that is going to get tiresome pretty quickly. and he has to provide the

incentives for firms to see it in their own interest, in their own interest to expand, invest more in the united states and so on. for that, he'll have to get together with the congress and hammer out a tax plan. the first thing, it has to bring these corporate rates way down. we have the highest corporate rates in the world. as was said, this is driving firms overseas, as paul and speaker ryan said. >> bill -- >> i'll pick up on that. go ahead. >> a lot was made of the congratulations of the president on his order on tpp. taxes are important. how much does the white house have to do with unions and afl-cio to lower costs here? >> they have to do that, carl. we just handed the asian ball

game to the chinese. i was with president xi last week in davos, and he made a very full throat endorsement of globalization, free trade and talks about how trade wars lead to real wars and poverty for people. we need to deal with just location. i think that's what we need -- we need to go under retraining programs for workers. we're very close to structural unemployment right now. we've still got the 5.5, 6 million jobs going unfilled. we need to retrain people and develop the skills for jobs of the future. 85% of the job loss is not globalization. it's automation. like tesla. elon musk was at the it ming. i've been to his factories, spent half a day there with him. it is 100% automated. you've got hundreds and hundreds of technicians and computer operators and programmers and skilled people, carl. that's what we need to put the emphasis on. get that right and the tax system right so we can lower --

make depreciation attractive to people to build here. i'm not optimistic about bringing all the jobs back from mexico and china. that's going to lead to problems for everyone, and it is going to be bad economics long term. >> gary, what about the regulation argument? president trump promised numerous times -- we heard it again this morning -- to lessen the regulations. help get the permits and the factories approved to be built in this country. will that work? how much has regulation been holding back our economy and jobs? >> that's the positive part of the trump agenda. but to be honest, the quantification of the cost of regulation is a very difficult thing. >> gary, i'll interrupt you. this is mark fields of ford right here. >> -- that will grow investment and jobs here in america, american industry and, of course, in the automotive industry, which is what we talked about this morning.

as an automotive industry, we employ many people across america. good paying jobs from the people that work in our factories to manufacturers that support our plants with parts to our wonderful dealers who are literally in every community across america, who help sell and service our vehicles. and we're very encouraged by the president and the economic policies that he's forwarding. i would just call out yesterday the president's decision to withdraw from the tpp. we've been very vocal, both as an industry and as a company, and we've repeatedly said that the mother of all trade barriers is currency manipulation. tpp failed in meaningfully dealing with that. and we appreciate the president's courage to walk away from a bad trade deal. so i think as an industry, we're excited about working together

with the president and his administration on tax policies, on regulation and on trade, to really create a renaissance in american manufacturing. so mary, want to say a few things? >> i think that -- >> you said everything. >> i think there is a huge opportunity, working together as an industry with government, that we can do and improve the environment, improve safety and improve the jobs creation and the competitives of manufacturing. we're looking forward to the elements mark talked about to be able to do that. >> there you are. >> thank you. >> can you give specifics on -- >> not yet. >> do you have any concerns about him tweeting at you and sometimes challenging you? >> that's sergio marchionne of chrysler. normally not afraid of a microphone. dressed in his trademark black sweater. looks like he might give a unilateral comment. >> he is shying away. >> not this time.

we did hear from mark fields of ford and mary barra, who sits on the president's strategic policy counsel. fields referencing a renaissance in american manufacturing. phil lebeau, your thoughts? >> exactly what i expected to hear. a lot of platitudes about working with the administration, woking with president trump. no long-term commitments. you wouldn't expect them to make that. as you guys were talking about last hour, these are huge capital investments that will have to be made if you're going to build vehicles back in the united states. vehicles you're currently importing from mexico or from canada. and the boards are going to have to think long and hard about whether or not they want to plunk down a couple billion dollars in ohio, in michigan, wherever, to build certain vehicles that they're currently importing from canada and mexico. and these decisions won't be made right away. the trump administration would like some commitments as quickly as possible. they want to see jobs added in the auto industry.

if you look at where the auto industry is in terms of job creation, certainly, well-off of where we were during the recession. that's when you saw a number of plants that were closed down. overcapacity in the industry. since then, the industry has brought back a number of jobs. not quite to where we were in 2006 and 2007. i'm not sure we'll ever get there for the auto industry overall in the united states. but for the auto makers, it all comes down to, where do you commit your capital right now? the president wants you to build in the u.s. you got to make that decision if you're going to do that. also, obviously, what do you do with your plants in canada and down in mexico? >> we also heard, phil, fields commend president trump for withdrawing from tpp. the auto industry, he says, has been against it. he said the mother of all trade barriers is currency manipulation. i don't know how you engineer a bilateral trade agreement that includes restrictions on the

foreign exchange market, the $5 trillion a day market that trades freely and is very hard to protect against manipulation. >> one of the chief complaints you will hear from the big three, and we've heard it for decades, is what's going on with japan and the yen? because they believe the japanese auto makers have a very advantageous situation when it comes to the yen and pricing with smaller vehicles in the united states. you'll hear this all the time. whenever incentives come up, they always -- the answer i always hear back from the auto makers and executives is, we have to do this because of what the japanese are doing with the yen. >> phil, thank you. appreciate that very much. joining us to talk more about this, first on cnbc interview, former chrysler and home depot ceo, bob nardelli. the founder of accelerator. robert, good to have you back. what a treat. thanks for joining us. >> great to be with you. what an exciting time for our

country, our economy and the auto industry. >> cerly feels that way. i mean, it is hard to argue this is anything but constructive for this sector, at least. but what is the calculus that these ceos need to work through in terms of knowing if or when to pull the trigger or repatriating capacity? >> i think first of all, again, just to go back, how can we not be excited about the -- what we see with this administration? it is positive, the approach to business, trying to grow our economy. when you think after the last eight years, we've had basically a low and slow gdp growth. without gdp, you're not going to be able to create the jobs and the demand for our products, number one. number two, i think the conversation was spot on with phil. i think there will be real examization. my experience with chrysler, do you move the chrysler 300, the

mine knee v mini van, the dodge products out of canada and back to the u.s.? talking about multi-billion dollars of refaciletizing abandoned factories we had to go through during the financial meltdown in '07, '08 and '09. that'll be one decision. the second decision on some of the imports from mexico, like the fiat 500, you know, they may elect not to import it. doesn't have that high of a demand. mary talked about maybe not importing the hatchback on the cruz. that's that decision. i think the other thing maybe with the trump administration, there will be an easing on some of the cafe standards that have cost millions of dollars in that regard, relative to technology. certainly, you know, you mention the need for continual investment in safety, quality, reliability for our consumers.

so they'll have a full plate of decisions to make. but i tell ya, i am really encouraged with the industry and the comments i just heard coming out of the trump meeting and the opportunity to restore manufacturing in the u.s. and really drive this gdp. i'm really excited for the industry and the economy. >> but, bob, it's sarah, don't you worry about the export markets? for some auto makers, their fastest growth is outside of the united states, in places like china and europe. the worry is if we start doing america first policies and put up border taxes, how are those big markets like china going to retaliate and what will it mean for sales? >> i think it is a great question, sarah. if you think about gm, basically, they are producing more cars over there for the china market already. so think globally and act locally. i think one of the subset issues that we face, you know, during the meltdown, was the global

supply chain. i think that's one of the issues we'll have to think about. globally, interconnected, think about takata air bags coming in. it is not much different than apple iphones coming in. it is not only the finished product but it is the component that goes into the cars with the cross border traffic, back and forth, until you get a finished car. that'll be another issue they'll have to think through here. do they start to localize some of the major components that go into the autos if, in fact, we'll produce them in the u.s.? and do we have the technology to do that? what is the time and cost to be able to accomplish it? >> bob, does it mean domestic produced cars need to get more expense i have for the cive for? >> let's hope not. i think the industry has done a fabulous job at trying to increase quality, improve

reliability, provide more confidence in the consumer relative to making such a big investment, second only to their home. let's hope that it does not have to add cost. i think one of the things that has added a lot of cost is some of the regulations that came out of the epa. not thate aren't very conce concerned about that, but i think there's beenome real -- those were put in place when fuel prices were high. we see oil trading around $52 a barrel today. we see the highest rate in history for consumer driving. you look at the car part all time record and production all time record. i think there is a volume and a mix issue here that is supportive of the auto industry. the highest margins come off of the big suvs, the trucks, which is really the result of what we heard ford and chrysler putting money back into the u.s. market,

in where a lot of the vehicles are being produced today. >> bob, what about nafta? the president has announced his intentions to go back to the drawing board. renegotiate with canada and mexico. how many jobs and lost production has nafta cost u.s. automakers? >> well, i think, again, from my experience at the time, it's probably been more loss into mexico than into canada, sarah. i don't have the exact numbers. but if i was just to focus on the auto industry. i think that'll be a more interesting and challenging discussion on, is there a repatriation of some of those jobs, and the component parts of the auto industry back into the u.s. market? i think, you know, that'll be an interesting discussion. this administration, unlike the last one, is totally focused on business. think about meeting with the union leaders the day before.

some of the major executives from the steel mills, technology and today, of course, with the auto industry, i think it is off to a great start. really, you know, putting the emphasis where it needs to be and growing our economy. >> one last point, bob f. some guests come on and try to defend the idea that xi jinping is the defender of free trade now. do you push back on that? >> i don't know. i mean, i think we heard about the dollar. we heard about, you know, controlling currency. you think it'll be interesting when trump sits down with him and has their first discussion on a whole host of things relative to not only trade but the border issues and the island. you know, the one china issue with taiwan. i think there is quite a long list of things to get started on when they have their first

meeting. >> bob nardelli, formerly of chrysler, we appreciate your time. hope you'll come back. thanks so much. >> thank you. thank you. >> let's get back now to eamon, live at the white house, where the auto ceos just sat down with president trump. >> just after the auto ceos came to talk, i had a chance to see if we could pull aside sergio of chrysler and ask him a question. what will the industry do and what will your company do differently under a trump administration than it would have done otherwise? he simply said, that's a difficult question and walked away. that is the $64,000 question. what can this industry group do under this administration that's different than what they've been doing over the past five to eight years, say? we saw in the meeting that each of the ceos appeared to have a vice president of government relations alongside them. those are the lobbyists in washington for those companies. all of them will have a wish

list at the ready. they all know specific thing s they would like changed in the washington regulatory system that'll benefit their company. the challenge in the industry is going to see if they can get all the lobbyists working together and see what kind of common elements are on all the wish lists. oftentimes when you see this trade group go into a meeting with the president of the united states, the individual companies are at odds with each other because of their different products, different customer bases and they compete with each other. ultimately, they're going to have to present some united front here. you heard the ceos making the point, we want to work together as an industry. it'll be fascinating to watch that take shape and see if they can find the common elements. it sounds like the white house is ready to work with them. >> thanks to you. outside the white house or another busy morning. more news out of washington. president trump set to sign executive orders advancing the

keystone and dakota pipelines. that's a big story. >> good morning. trump said that he'd be pro energy, pro infrastructure. it appears he is following through with some immediate action. these two projects are very significant. the president, political clash we've seen over energy projects, that we saw during the last administration. that's what this represents here. it is at a time when u.s. shale production started to boom, changing the production landscape in this country. with keystone, obama vetoed the project in 2015. environmental concerns were part of that national debate. this is a nearly 1200 mile pipe lynn that'll carry 800,000 barrels of canadian oil sands bru product down to the gulf coast. there is a debate on how much we need the oil at point in time and if it might flood the market with more product. analysts are pointing out that the heavier canadian oil sands product is different from the grades that we have here. we do import heavier crude but

this will scream litreamline th process. the dakota access project is crucial because it is going to carry prude out. the concern has been it has been difficult to safely get the oil out of the region, as more product has been discovered. remember, we saw some protests. the standing rock sioux reservation were opposing the project because it ran over sacred native american land and potentially threatened the nearby water supply. in december, the federal government denied a permit for construction to energy transfer partners. in what seems like a last ditch effort to stop the project and quell the protests. you have to watch the stocks of transcanada, etp. this is a showing of where the president stands on the crucial energy issues. carl? >> jackie, thank you. for the explainer on the keystone pipeline. let's send it out to sue updat.

the half hour flew by. >> it did. president trump plans to keep comey in his post according to the "new york times." this comes as the agency continues its investigation into potential ties between trump aides and the russian government. comey drew criticism from democrats for announcing the fbi was looking into additional hillary clinton e-mails just 11 days before the election. italian officials say rescuers pulled five more bodies from a hotel that was buried by an avalanche last week, bringing the death toll to 14. 11 people have been rescued by 15 are still missing. severe weather in parts of new england this morning. a combination of snow and ice have made driving dangerous in northern massachusetts. a number of traffic accidents have been reported as the nor'easter moves in. on a lighter note, the oscar nominations are in and the romantic musical "la la land" is a big winner. it received a record-tying 14

nominations, incloo uding best bikture, best actor, ryan gosling, best actress, emma stone, and best director. that is the news update this hour. back down to you. >> i'm glad that was the only one i saw of the nominations. >> i didn't even get there yet. i did see "sing." it was good. >> you should. "la la land" is good. when we come back, the confirmation hearing for representative tom price for secretary of health and human services. round two. plus, more ahead on "squawk on the street." dow is up 32. led by ibm and dupont. stay with us.

alibaba shares up 3% as you see after an earnings beat. the chinese giant reported stronger than expected revenue growth. 54% versus last year. 73% growth in its mobile usage. the company raised revenue guidance for 2017 to 53%. they've had a reacceleration of growth on a certainly larger base of overall users at the

company. the chinese consumer seems to be doing fairly well. for the most part, they're transacting their business with alibaba on mobile devices. mobile maus on the chinese retail marketplace reached 493 million in december, up 43 million over the september quarter. active buyers on the marketplace, 443 million, increase of 4 million from the 12-month period ending in september. overall, strong numbers for alibaba. of course, there continues to be a fairly large, short position in the stock from those who believe the numbers are inflated. we sat down and had long conversations with vice chairman of the company about that. overall, a strong quarter for the company. increase in revenue guidance. mobile certainly very important for them. overall usage of the platform, not just for purchases, but other engagement, also increasing. and still largely domestic story

for china. they have come here, jack ma famously met with the president-elect few weeks back, talking about how he could empower u.s. small businesses to use the platform to sell to chinese consumers. there's a look at the handshake that took place in the lobby of trump tower a couple weeks back. to ever al over all, a domestic platform for a domestic chinese consumers and the growth there, very strong. >> analysts like it. 91%. they capitulated as the price went back up. the target is $120. also, jack ma was in davos last week, part of the delegation of chinese ceos that followed president xi there. he was talking about the dangers, a disaster, he said, if the u.s. and china were to enter into a trade war. i don't know if you saw the headlines. he wrote with us and had interesting philosophies on why the u.s. was seeing economic

frustration. the money hasn't gone to the people. he said it's gone to wall street and toward fighting wars in the last 30 years. not to the midwest. therefore, you have frustrations. free trade should not be a scapegoat, he said. that was the message from the chinese. >> it will be interesting if tensions between china and the u.s. will rise. what will it mean? largely domestic in terms of consumption for alibaba. on the face, it wouldn't seem to an impact. keeping an eye on capitol hill. busy at the white house. house republicans talking tax reform. john harwood is live in washington with the latest. morning, john. >> morning, carl. there's no group in washington, no power center in washington, more prepared for tax reform than house republicans. they've got a plan that's ready to go. kevin brady is going to be talking about it in a few moments at the u.s. chamber. paul ryan this morning at a interaction with the press gave his endorsement for exactly why

they're going to undertake this project. >> we believe that comprehensive tax reform is going to solve th problem in many ways. so as a former chairman of the ways and means committee, i can clearly tell you the current tax system we have innocecentivizes businesses to go overseas. it encourages businesses to leave america and to outsource. we don't want to keep encoura encouraging that. >> of course, one of the things that kevin brady is going to be doing in these remarks at the chamber is strongly defending the key provision of the house tax reform bill, which is called border adjustability, which would tax imported factors of production and not tax exports. he calls it the made in america tax. this is something that donald trump has said he is not in favor of. it is too complicated. he wants a punitive tax. some senators are opposed to the tax. house republicans are pushing hard for this. they're going to see if they can

win over both the senate and donald trump. meantime, in about 20 minutes time, donald trump is going to sign more executive orders. what we expect to see are him green lighting both the keystone pipeline, which became a political football for the obama administration, and the dakota access pipeline. that is good news for the energy industry. environmentalists are going to be concerned. native american activists are going to be concerned. but this is donald trump keeping promises that he made in the campaign, guys. >> it also strikes me, john, that this is a very different approach to business. we see these pictures in his first day in office, where ceos are called to the white house, named in prominent cabinet positions, they're named in all sorts of committees to advise the president, just how stark of a contrast it is with the previous administration, where there was a lot of ceo bashing from bankers. we were used to seeing them face these leaders of congress in

very contentious hearings. it is early, but this is going to be a completely different story. >> well, in some ways, yes. in some ways, no. remember, president obama took office at a time when wall street was in crisis. the economy was collapsing. that generated some of the rhetoric. the president also had business advisory councils, various business people were constantly coming into the white house. they didn't always like the policies that they saw, but they didn't always hate them either. the other question is going to be, how do these business leaders feel if, in fact, the united states end up withdrawing from the world, withdrawing from the forces of globalization and international trade? so businesses like the low taxes. they like the low regulation. they like the pro energy stances that donald trump is striking. but they may not be so

enthusiastic with some exceptions, like the auto leaders were praising him for getting out of tpp this morning. but there are a lot of businesses that are not going to welcome getting out of the transpacific partnership or getting out of nafta if that's what it comes to. >> certainly, hard to -- unrealistic to expect other countries to stand still as we adjust our trade policy here. john, while talking, senate commerce approved the nomination of elaine chow, transportation, and wilber ross at commerce, advancing to the full senate. john, thanks. as we keep our eye on the confirmation hearings, tom price. also, look at dow johnson & johnson. it beat bottom line estimates but it came below consensus. verizon and j&j. more ahead on "squawk on the street."

[pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

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trail for every comment i've made. yes or no, doesn't this show bad judgment? >> no. >> well, i just -- >> let him answer the question, too. i mean, you kind of indicated he'd done something wrong. let him explain why it wasn't wrong. >> it was a yes or a no answer. >> i want to have him be able to handle that problem. >> maybe it'd be helpful if you laid out the accusation, sir. >> well, you purchased stock in an australian company through private offerings, discounts not available to the public. >> if i may, they were available to every single individual that was an investor at the time. >> well, that is not what we learn from company filings. company filings with the australian stock exchange state

that this specific private placement would be made at below market rates. the treasury department says it is only offered to sophisticated investors in a non-public manner. we have a paper trail for every one of the statements that i have gone into. and trading in stocks while you sit on two committees, introducing legislation that directly impacts the value of the stocks -- >> what legislation would that be, senator? >> we will take you through the various bills, but the reality is, this has been cited on a number of occasions. >> the reality is that everything that i did was ethical, above board, legal and transparent. the reason that you know about these things is because we have made that information available in real time, as required by the house ethics committee. there isn't anything that you have divulged here that hasn't been public knowledge. >> your stake in innate is more

than five times larger than the figure you reported to ethics officials when you became a nominee. >> and if you'd listen to your committee staff, i believe you would know that our belief is that that was a clerical error at the time the 278e was filed. we don't know where it happened, whether it was on our end or the end of the individuals of oge. but there was not any maliciousness involved. >> congressman, you also reported it in the questionnaire to the committee, and you had to revise it yesterday because it was wrong. >> and the reason for that is because when asked about the value, i thought it meant the value at the time i purchased the stock. not the value at some nebulous time when we supposedly made a -- >> i want to get in one other question. the president ised an executive order instructing the department and other agencies to do everything possible to roll back the affordable care act. if confirmed, you'll be the captain of the health team and

in charge of implementing the order. yes or no, under the executive order, will you commit that no one will be worse off? >> what i commit to, senator, is working with you and every single member of the with you a member of congress to make sure we have the highest quality of health care, and every single american has access to coverage. >> that is not what i asked. will you commit that no one will be worse off under the executive order. will you guarantee that no one will lose coverage? >> i guarantee you that the individuals that lost coverage under the affordable care act, we'll commit to making sure they do not lose coverage -- >> the question again is will anyone lose coverage, and you answered something i didn't ask. i will wrap up this round by

saying will you commit to not implementing the order until the replacement plan is in place. >> what i commit to you and the american people is to keep patients at the center of american health care. we will make sure they will be provided be the highest quality of health care that we can provide. >> i will close with saying that what the congressman is saying is that the order could go into effect before there is a replacement plan. and independent experts say this will destroy the market on which millions of working families buy health coverage. on the questions that i ask, will the congressman commit that no one will be worse off, no one will lose coverage, we didn't get an answer. >> how can anybody commit to

that. let me just say, dr. price, you have been accused of investing in computers that have a direct effect. the shares you own in therapeutics. you have a diversified portfolio with morgan stanley. as you see things getting testy again at the senate confirmation hearings for tom price, we knew they would focus on this issue. democrats called for an investigation for the investments he made in the legislation. of course on the alternative to obama care, repeal and replace, we'll continue to monitor that for you. in the meantime, the time has

come to go out to rick santelli. >> before we move on, these hearings, i always find them a little theater, but did you have any observations. i know in 2011, nancy pelosi was involved in a number of ipos. they have short memories on the cross examine escapades. >> this is very common with what mr. price did, buying new issue ipos, when you're already part owner of the company, i don't see where he did anything wrong or unethical. >> do you think the supreme court of the uk made the right

decision in that they have to be involved in triggering article 50? >> be that as it may, i think that prime minister may will be able to get it through. it might be more difficult or watered down, but i think the key is meeting with president trump on tried. that gives incentive to come back with a good trade plan. showing they can cut a good deal without the euro zone involved. >> i could not agree more. i will take is a step farther, there is probably a certain simplicity to this agreement that does not exist with others.

all of the things that they pilfered intellectual property, that they're a free market system atlas of the world. >> i think if you look at the speech last week, i think the chinese realize what is going on, i think they will be a fair trade partner, and i don't think that president trump will have to put together any trade policies against china, but time will tell. >> thank you so much for your thoughts, we'll go back to david john faber. >> yahoo surprising us to the up

side. and we'll talk net neutrality.

earnings are out this morning from lockheed martin. >> they are down about 3% right now. their guidance was lower than street expectations. the helicopter business it bought in 2015, but the pentagon's top weapon supplier reported a big fourth quarter beat. that was fuelled by sales of the f 35 fighter jets. better than expected last year, and as the joint strike fighter program suffered sharp criticism. it also jumped double digits. that was a conference call that is just getting started right now at 11:00 a.m. eastern.

they are looking to finalize negotiations. also on the latest face to face encounter with trump yesterday. so lockheed is really considered a bell weather. we have a number of other companies reporting as the week goes on. >> expect a lot of trump talk, that does it for us on "squawk on the street." it is 11:00 a.m. on wall street and "squawk alley" is live.