♪ live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. look at the u.s. equity futures at this hour. 24 hours ago is when we first realized we were likely going to push over 20,000 for the first time. that happened yesterday morning right after the open. managed to close above 20,000 as well. dow futures this morning indicating up by 26 points. s&p futures up by two. the nasdaq 12 1/2. the dow, s&p, nasdaq, s&p 400 mid caps all hitting highs yesterday. boeing, home depot and visa logged record highs. and trump weighing in on the milestone during his first television interview since his

inauguration late last week. >> i'm very proud of that. very proud of that. the business community and the labor community, you saw that with the labor leaders that came out. one said it was the single greatest meeting i ever had with anybody. it's the highlight of my life. the dow on top of it just hit 20, first time in history. i'm very proud of that. now we have to go up, up, up. we don't want it to stay there. >> vice president mike pence tweeting the dow closes above 20,000 for the first time in history. u.s. economy is being unleashed under president trump. let's get you caught up on what's going on. we have a $30 billion pharma deal. johnson & johnson buying actelion for $280 per share in cash after weeks of exclusive talks. we talked about this transaction before. a 23% premium to its closing price yesterday. both company's boards have

aprefapref approved that deal. today is the busiest day of earnings season, 38 companies in the s&p 500 reporting results along with three dow components. before the open, numbers from biogen, caterpillar, comcast, ford and southwest airlines. after the close, look for results from alphabet, intel, microsoft, paypal and starbucks. the coos of southwest airlines and ford will join us this morning to talk about their reports first on cnbc. mark fields just spent some time at the white house. we'll talk to him about his meeting with the president. on the economic agenda, weekly jobless claims come out at 8:30 a.m., followed by december new home sales at 10:00 a.m. lots of numbers to chew on in addition to the big 20,000 headline. >> forget the three dow components. comcast is reporting. did you say comcast is reporting?

comcast? >> comcast. >> comcast. we'll talk dow 20,000. we knew at 8:00. >> we did. >> futures. >> futures indicated they would open up. you called it you said in the first 15 minutes. >> it was immediate at 9:30. everybody is asking today "now what." the cover of "usa today." >> you went to journalism school. i don't know how to do print journalism. i don't know. "new york times," i'm trying to see the dow 20,000. i don't know how they select things. >> it's way down here. >> oh. >> let's look at the washington compost -- post! "washington post." here's the "washington post." mary tyler moore, i loved her. i did. >> right. >> she -- maybe down here? >> uh -- >> would they -- >> hold on. keep going. keep going. this is your favorite newspaper.

the post. >> is it because you have to -- >> no. >> it's not because you have to somehow say it's because of trump or not because of trump? >> no i'll tell you why. you'll be upset when i tell you the answer. >> i'm already upset, not really. >> because -- i shouldn't say it because we're doing this right this second, that -- just the number is commodity news. everybody knows that piece of news. >> what's the "journal's" problem? >> that's not on the cover of "usa today." that's the business section. it's on the cover of the business section of all these other papers, too. >> it's on the cover of "usa today." >> it's on the bottom of these other papers. >> it's this big. >> they have to say the market didn't crash. >> that's not why they -- >> whatever you say. here's one thing -- >> i didn't say anything. >> here's one thing to consider. that it took 17 years -- i didn't think about this, to go

from 10,000 to 20,000. do the rule of 72 on that. this century, the century we're in now has been a crappy, crappy century for growth. it's kind of weird, people who predicted 4% in the stock market for the foreseeable future, i said, please, we always do 7%, 8%, 9%. it has literally been since 1999, slow growth. took 17 years to double. >> we grew quickly from the lows of 6,660. >> that's true. >> there's been a couple of -- there was the internet bubble. then the financial crisis. if you do the rule of 72, it's, wow. it really want the normal historical advance that you would hope for. >> the last 1,000 points came in 43 days. >> yeah. but that could be because of anything.

i'm not tying that to -- i don't know, maybe a horoscope or something. let's check -- look at the "new york times" and "washington post." could be anything. the broader markets. overnight in asia, you can see -- >> it's a number. it's good. >> i know. we like it. dent you downplay it. don't you downplay it. you're on cnbc this is our story. >> it's our story, but it's a story. >> don't you love him? trying to scramble around. >> last night "nightly news" was talking about it. >> yes, it gets people excited. we have some professional investors around the table. i was having lunch with a professional investor who we all know, i mentioned 20,000, he said it is irrelevant and ridiculous that you guys go crazy about it. >> it's not how sophisticated investors look at it, but it

makes people think did i miss out? >> i will not dissuade you of those views. >> that's good. >> alternative views? >> those views. of those views. >> fake news. any way, european equities are chiming in. so is asia. japan up 300. the reflation trade, we'll talk to the gentleman from blackrock. reflation. reflation. i won't say -- i'm not going to say it has anything to do with trump, and i won't say that the u.s. is going to lead the rest of the world out of anything. i would have to argue then if i said that. globally things are improving also. maybe they already were. let's take a look at crude prices. looking at currencies. the -- cramer was making the point yesterday that it's important for bonds to go down and interest rates up. it indicates that everything sort of -- you're firing on all cylinders. if the ten-year goes back down to 220, that's telling you

something is amiss in the market that doesn't correlate with the market being at 20,000. probably crude if that were to fall under 50. >> it's about the border tax, too. what happens with that. >> about supply. >> drilling here. >> huge number of rigs that have gone back in in the united state states. >> theresa may is coming tomorrow. that was interesting. i saw comments she made. it's kind of exciting. it's like we'll rekindle this thatcher/reagan leadership, we'll lead the rest of the world. the uk grew 0.6% gdp. the fastest growing economy in europe. all of these things. you should be happy! i'm looking over at you, you're like, ugh. ugh. if only the market were down 5,000. >> i don't want it to be down. >> if only things were heading

into the shih-tzu -- shih-tzu is a dog. that's why i said that. 20,000. just pretend. >> good for it. >> it's big. cnbc, comcast. >> a lot of changes, people are concerned about some changes. we'll talk about that today, too. what it means if we get into some sort of trade war with china or mexico. we'll talk about all those things today. there have been plenty of leaders and laggards in the march from dow 10,000 to dow 20,000. dom chu has the stocks that played a crucial role getting to this milestone and the ones that didn't. >> it's a pleasure to be here. this is my first time with you guys at the new set. i'm a little excited. i got butterflies. >> because of dow 20,000? >> because of dow 20,000. >> so it's based on a meaningless thing. but you're here. try to pretend it means something. >> many of the professional money managers out there may think it means nothing, they may be right, but there was a good amount of adrenaline at the open

of the new york stock exchange. i was there yesterday. there was a sense of real excitement. you get the sense that if people can get excited about the market, it's a good thing. the reason why we're bringing this up, if you look at the overall picture among current members of the dow, the last time we crossed it was 2009. nike is in there now, hp no longer part of it among current members, united health group, up almost 550%. that's since 2009. october 14th. home depot, also a relatively newer member of the dow, 402%. visa and apple. apple has not been part of the dow for long, but it's still there and contributes. >> finally contributing. >> 350% to the upside. that's since the last time. the laggards here, every other name in the dow has opinion positive since then, but some notable laggards. walmart up 33%, cisco, 26%,

dpoeldma goldman, 23, and exxon, 19. >> what is ge? >> middle of the road performer. >> since 1999? >> this is since '09. ge is trying to get to those highs. cisco is as well. overall, you mentioned the idea could the retail investor be excited about this. rich repetto had research out about trading volumes for retail brokers over the course of the last few weeks since the election and prior to the election, they noticed retail trading across the board for the e-brokers up 21% in the weeks that followed the election until now versus what they were just before the election from a daily average trading volume standpoint. if people get back in, that's an important sign. though we should say those

trading volumes are tailing off. whether or not the dow 20,000 can continue with the uptrend will be a big point. >> if you look at the amount of money indexed to the dow versus indexed to the s&p 500, there is a weird correlation between the dow and the s&p 500 and the s&p 500 is at a new high yesterday. >> absolutely. over the long-term, you can ask any of the market technicians out there, over the very long-term there's a pretty tight correlation of trading relationship between the s&p and the dow. there are dislocations that happen. but people will say the dow is an irrelevant index but it's one many team know. >> we've been making this caveat for 20 years, the dow doesn't matter. the s&p is what people look at, but it's still what normally would be on the cover of the newspapers. >> i would say, just anecdotally, the amount of international press at the stock exchange yesterday, cameras from

how many different languages all over. so the dow meant something not just here but abroad as well. >> good. let's bring in some other voices on the markets. with us this morning, ed campbell, principle and portfolio manager at qma. charles campbell here, no relation, right? >> right. >> also with us, earl campbell, famous running back -- he's not here. but we did have -- we had -- we don't have glen campbell. we have calls out to naomi campbell. i don't think she's in town. and then nev campbell is doing "scream 6" and julian emanuel is here as well, and our guest host for the hour. you've been sitting here, laughing, listening, all this stuff, julian. is 21,000 next? some day? next in 2017?

>> the bull market will not end in '17 in our view. you could pause here, no question about it. we have come a long way, but you can't down play the importance psychologically of hitting 20,0 20,000. the investor is -- tends to be the boomer and gen-x knows the millennials are not invested yet. but it's an important milestone. >> that's important key. even you would have to admit that, andrew, millennials at this point have never seen an exciting stock market really. some day, if it gets exciting enough, years ago when you get in a cab and the guy would say do you own any excite.com or geo cities, the day will come where the guy with the man bun is talking about -- >> that's not how -- at the moment that's not how people are investing. >> no. i know. >> the question is when and if they do come back, are they

going to be talking about an individual stock or will they be giving their money to wealth front -- >> no, no, no. >> don't say no, no no, that's how this is all going. the minute snap comes out and doubles, i'm sure my daughter will want to buy some snap. she uses it all the time. the minute you get a couple names, and you double your money -- >> we lived through this with facebook. >> we did. they weren't millennials, they were 13 then. >> i did watch fast money last night, the ceo of e-trade said what has changed is the people investing in indx fex funds or etfs. it's a huge portion of their retail investing. that works as long as all the markets are going up. when markets standstill, active investors can beat you, that's when things switch. >> individual stocks get more interesting when you're not in a 17-year period where it takes

forever for stocks to double. >> charles, you think about interest rates, globally, bonds. are you worried? >> not really. you always should be worried, you always should be concerned, if you're not worried, that's very worrisome. we're in a favorable environment, rates have moved higher, 65, 70 basis points since the election. sovereign curves have moved higher overseas because of the reflation trade, higher stimulus in the united states. tax repatriation, corporate taxes getting cut, individual taxes getting cut. the federal reserve no longer carrying the full load for stimulating the economy. earnings are fairly decent. tech outperforming. every time you pass a milestone, 1,000, 5,000, 10,000, 20,000, investors think this is a sign of a market top. lo and behold, years later, we make a new high. if you're 22 and you are in college now and the market

remains in this environment, the market brings back 6%, the dow would be at 250,000. >> boone pickens said when he was born the dow was at 200. thousand it's at 20,000. >> and he's a young man still. doing really well. but i'm not quite there. i remember when i saw 780. i entered the work force at 780. >> it took a long time to get from 200 to 780. >> i'm the next thing after a millennial basically. what do you think? >> in terms of dow 20,000, is it a game changer? no. not by itself. in the context of rising investor business and consumer confidence, it's one more thing to feel good about. is it a signal of a top? no, i don't think so. i think that the market is rising because of good fundamentals. as was mentioned, corporate

earnings are rising now after we had a rough period that ended last year. we think stocks are going to return 8% to 10% this year. definitely not too late to get in. >> a little weird what threw us for a loop last year will be more prominent this year. oil prices won't necessarily go up to help that much. the dollar will stay strong and interest rates are backing up. these are all things that previously would have caused headwinds, now their tailwinds. >> i'm not worried about interest rates. >> what about the dollar? >> the dollar is down right now. >> if the germans get their way, the ecb stops being so loose with things -- >> as long as we get a kinder, gentler rise in the dollar looking forward, that won't derail the corporate earning recovery. >> we have -- you're not staying, domino. >> i'm not staying. i have to go to the stock exchange after this.

>> that's where the action is. do you think you'll feel that -- wait a minute. wait a minute. pisani was out yesterday? >> he was out yesterday. but he was -- to bob's credit -- >> he was out yesterday? >> he's in florida. you didn't see him -- bob did come on our air. >> that is murphy's law. >> he was down there. >> he came via remote. >> thank god. >> in his white miami blazer. it was pretty cool. >> good for him. >> i wanted to be bob at that point. >> you're the one. dom, thank you, ed, charles will be with us. we have not heard from naomi campbell. you're staying, right? >> yes. >> is this glen campbell? >> we have to go. >> this glen campbell? >> took me a second. >> coming up, at&t earnings.

>> it's rhinestone cowboy. >> the dollar pulling back from post-election highs. "squawk" returns in a moment.

>> welcome back. at&t's fourth quarter earnings coming in line with expectations, coming in at 66 cents per share but revenue missed the mark slightly. here with more is barry shine from drexel hamilton. so, what do you think? >> so, as you said, revenue was a bit of a miss. if you dig into the numbers, you know, the big initiative for at&t should be on monetizing and realizing the synergies on directv, they didn't do that. the subscriber additions were down, pretty significantly, and that hurt them in consumer wireless, because they're supposed to be bundling those. >> to me the larger question about at&t and the price of at&t has to do with the time warner transaction, but also to the extent they missed in this component, what does that say about their ability to integrate if they get the transaction through? >> if they are not realizing the synergies on directv what does that say about time warner? >> bingo.

>> time warner, the synergy is to put the content there, the consume consumers, if you don't grow that customer base, how do yyou grow time warner. i think time warner has been a distraction for at&t. >> do you think that's why -- >> that's why they had the weaker numbers. >> we're blaming the fact that they went after the deal they need for the reason they couldn't get the tv piece to work? >> they give you reasons, cable competition was up, but at&t has taken steps over the year, extending the nfl wireless ticket, they should have had a break out quarter in the fourth quarter for directv satellite ads, instead it was the weakest quarter of the year. >> i'm trying to figure out why you think that was the case. >> because they didn't focus. they need to be managing that

process, looking at those subscriber additions day by day, week by week. if you start out the first week low, take corrective steps. maybe you have to do a better n incentive program in retail stores to sell your satellite tv. but you need to be focusing on that. you don't end the quarter with -- >> does this undermine the strategic rational of the larger transaction? >> i've never been a big fan of the time warner transaction. >> you're not a fan of the deal. >> they don't need to own content to get good deals. they have a great deal with the nfl which is exclusive. they won't be able to do exclusive deals with time warner once the regulatory approvals are in place. even with that, if you're not going to grow the video base, that mitigates the potential synergies you can take with time warner. >> so given all of that, do you want to own this stock? >> no. i think you want to own verizon.

verizon's numbers were a disappointment as well. but verizon is on an upward trajectory. last year flat numbers. this year 2%, and continue to grow. they're spending less than $10 billion on video strategy. at&t will be well over $100 billion on their video strategy. >> so you don't disagree with the idea of bringing content in, just how much money you're willing to spend on the content? >> yeah. that's one of the things. verizon doesn't actually own the content. they're buying content from video producers, they're licensing exclusive content the way a netflix is doing. at&t is buying time warner. >> the huffington post purchase, a lot of that stuff they brought in. >> the stuff they're buying, the big acquisitions verizon has done is aol and yahoo! those are more about eyeballs than owning the content. then they'll source the content to put in front of those eyeballs. >> thank you.

>> thank you. >> what is your target on the stock price? >> a hold rating. so right where the stock is. i don't think it will do much. >> verizon? >> i like verizon. i think you can get that to 54, 56. >> do you cover comcast? >> no, i don't. >> verizon is in the dow. >> you have to cover comcast, man. you don't want to cover a big winner? those dogs you're covering. >> they don't get any synergies except cnbc. >> you just wait. dow 20,000. >> let's switch gears and turn our attention to the currency markets. joining us is borse schlossberg from fx strategy, alsocnbc contributor. boris, we were talking about the dollar strength, looking at the strength, do you expect that to continue through 2017? >> the trump trade was clear after the election.

basically long equities, short bonds, long dollar. since december 15 the dollar component of it has really stalled. as a matter of fact, to me the dollar trade, the strong dollar trade rests on the 1.15 dollar/yen. we have been at that level for a few days, but not able to get above it. i don't think the dollar trade gets better until we clear that. trump drove the dollar down. he saw it got too strong. he wants to make sure the landscape remains competitive. >> for manufacturers. >> correct. >> and the currency market is trying to figure out where the policy is going to go. >> you're talking about the tax -- >> the tax. he wants to see deregulation, the cross border, fiscal spend, which is really the most important part. if you get a fiscal spend, that means we juice up growth and the fed goes to three rate hikes, the dollar strength comes up. so, a lot of open questions

going forward. and then ironically enough, his success could create more turmoil as we go forward. if trump has great 100 days, we have european elections coming up in the netherlands, france and possibly italy. if he succeeds, that means the populous message succeeds, which means that if the populous governments in europe could win, and the euro could face a huge stress, that could be huge for the european markets. there's a lot of unknowns. >> yesterday when the president was speaking, the peso rallied. why do you think that happened? the second question is what major currencies are the most missed price right now? >> interesting question. the peso rallied because he was much more conciliatory. he wanted to see mexico succeed. the peso was so priced for complete destruction that there was a natural short covering

rally. he is trying to do this balancing act where he wants to create the wall, at the same time maintain the economic relationships we have with mexico. >> even though he reiterated he wanted to build the wall, you think it was interpreted by markets as conciliatory? >> only because he added on the comments he wants to see a stronger business relationship with mexico and do business. those two contradictory impulses is what happened. mispriced currency is actually the pound. the pound has been priced for destruction because of brexit. but if european fracture and everybody does a brexit, it could look fresh. this whole idea of bilateral trade -- >> it's not below 1.20. people had that thing going down into -- >> 1.10, parity. it's starting to rally. on friday prime minister may and president trump are talking to each other. it will be interesting to see how this whole new world is taking shape.

>> and the churchill bust is back. >> churchills because is bac bu. >> i will try this, andrew. the transports, the transports are up 13% since the election. when american pharoah won the triple crown, did you say they just picked those three? the preakness -- did you down play the triple crown? did that excite you a little? >> it's the smugness. i want the american economy and the markets to do spectacularly. >> the s&p is only at 2 points from 2300. you don't like the dow. 2300 is a big deal. >> great thing. >> so if the s&p gets to 2300, then you'll join in the celebratory mood? you promise?

we're at 2298. could happen today. >> s&p 2300, also a big deal. there's something for everybody here, andrew. come on. closer look at where the transports are headed, up 13%. here's a look at yesterday's s&p 500 winners and losers. american pharoh.

we've done well in life,

with help from our advisor, we made it through many market swings. sure we could travel, take it easy... but we've never been the type to just sit back... not when we've got so much more to give when you have the right financial advisor, life can be brilliant. ameriprise welcome back.

you're watching "squawk box." good morning. welcome back to "squawk box." on this thursday morning. u.s. equity futures, take a look at what's going on. we set up the day after our big market movement over the 20,000 mark. you're looking at the dow like it will continue on its rise. looks like it will rise about 39 points. nasdaq opening higher as well. s&p 500 looking to open a little over one point higher. >> you know you were famous in 1999. you were already famous. i have a piece you wrote back then about dow 10,000. see if you remember this. you were very excited. do you remember 10,000 maniacs? do you remember this piece? >> yeah. >> you wrote that in september of '81 they did their first concert. now -- i went and found the 10,000 maniacs. >> you did. >> they said that's -- call the dow the other 10,000. it took 18 years for us to get here. you were very excited writing

about it. >> how did you find that? >> why did you get so jaded over the last -- the last -- >> that's what happens sitting her here. >> you wrote this wonderful piece. >> i remember -- i went up to ithaca, new york to find the 10,000 maniacs. >> yes, you did. >> how did you find that? i was assigned to find this -- this is the "new york times." >> andrew ross sorkin. >> i was still in college. i think i was a grad student. '99? who sent you that? >> i have a lot of people send me a lot of stuff. they all try to help me, which is sick. the dow jones transportation average -- what was her name? >> natalie merchant. >> great voice. >> amazing voice. >> there weren't really 10,000 people in that band. >> nope. >> i did see a good concert in addition to writing that article. >> we are now going to talk --

want to warn you. we may talk bullishly about things. ifrn . >> i will get my pom-poms out. the dow jones trading higher in five out of the last six sessions. i didn't say this. for more on the trump rally -- it it started with obama, really, let's bring in chris weatherby and charles campbell is with us. hence all the glen campbell music you keep hearing. anything amuses us. at this point the dow theory is intact, is it not? both hitting new highs. what does that usually mean if the transports hit it on the same day as industrials? >> we can go higher from here. >> what is driving the transports? is it global reflation and that trade or is it a -- the idea we might have a 3% gdp economy? does everything go into this? >> i think we're hitting on a

bunch of those factors. so you certainly have reflation within the commodities markets which is good for the transportation stocks. we're also seeing the prospects of better economic growth in the united states. that's certainly a positive for these companies. as we looked over the course of the last couple months, we've seen a steady increase in volume activity. that's something that's been lacking from the transportation market over the course of the last 18, 20 months. as we see that come back -- >> so not just pricing. now volume starting to rise. across the board? rails? >> rails are getting in. that's an area where we see it the most. it's the most obvious, we get that data on a weekly basis. it's been clear that we've seen an improvement but also hearing from truckers. they have gotten tighter over the course of their peak season. as we roll into the first quarter, it's a seasonally softer period, but the outlook for the spring and summer is good. >> if you look back over the last couple years, this slump we see in the first quarter, it's extended for one reason or

another. you feel confident we won't hit that this year or get stuck in it? >> last year we had that, we had a bit of a head fake in january, volumes fell off hard. we didn't see a resurgence in the spring. i think there are better signs in the market. we heard better things about produce. generally speaking weather patterns have been more seasonal. >> maybe consumer confidence? >> i think that helps as well. as we go into that, we can see inventories which are a bit more balanced continuing to work through. that's a positive for volume. >> charles, you know, you -- i think of you sometimes as a macro thinker. but the transports must come into your thinking from time to time. when would we be concerned? would they peak before these other averages? what would you watch? can they go higher? 10%, 20%? >> what you'll see is a whole host of concurrent data forward looking indicators in the economic front.

earnings, guidance from companies. you would expect transports should lead, but it doesn't necessarily have to do so. you expect certain inefficiencies take place. ksu underperformed. that's practically the greatest inefficiency because of exposure to mexico? >> i think that's right. there's been amount of their revenue that the market has been uncomfortable with that they think might go away. rhetoric from washington has been negative for that stock. the likely outcome may be different than what's discounted in the stock. this is a company that moves goods both ways. that's probably a fair point. >> upside is higher than the down side? >> absolutely. >> it's something to pay attention to. we had delta air lines on. the ceo said since the election he had seen part of what the big numbers that the company reported was already reflected there. now -- >> bookings. >> with plant, equipment, other

sectors of the market it takes time for annual spirits to translate into bottom line numbers. delta was already seeing it. the transportation average, there's a reason it seems to lead. animal spirits can manifest directly. >> transportation historically leads the economy in general. as we see volumes continued to move, i think that's something that would suggest better economic activity down the road. we have not really talked about some of the potential capex benefits, some of that would happen further down the road. tax reform could have a benefit to that. there's probably a lot to like about what we could see. what we're seeing in the volumes now would suggest that the economy is in at least a better trajectory than it was maybe 6, 9 months ago. >> all right. chris, thank you. >> thank you. when we return, southwest airlines reporting. we'll dig through the report with the chairman and ceo, farry kelly first here on cnbc. then ford is set to report as well. mark fields will join us in

another first on cnbc interview. plus much more on the dow 20,000 milestone. market watcher jim grant will join us on set at 8:00 a.m. eastern time. stay tuned, you're watching "squawk box" here on cnbc.

welcome back. in squawk booze news, jose cuervo looking to raise $700 million in an ipo. they will offer more than $476 million worth of shares. priced between 30 to 34 paesos per share. they put the ipo on hold twice last year. earnings out from southwest airlines, chairman and ceo gary kelly will join us next to break down some of those numbers. as we head to break, a quick check on what's happening in european markets. green arrows across the board.

at bp, we empower anyone to stop a job if something doesn't seem right, so everyone comes home safely. because safety is never being satisfied. and always working to be better.

so i thought it might be time to talk about a financial strategy. you mean pay him back? so let's start talking about your long-term goals. knowing your future is about more than just you. it's how edward jones makes sense of investing.

southwest airlines reporting quarterly results, profit of 75 cents a share coming in 5 cents above what they were expecting. joining us now is gary kelly,

southwest airlines' ceo. tell us about the quarter. you have a lot of things going your way. oil prices still have not come back up, so jet fuel is a relatively low expense what else are you seeing? >> the story is mainly a strengthening of demand post-election we saw booking demands increase and then the period between the two holidays, especially in december before christmas we saw strengthening of close-end bookings and business travel. that was welcomed and that strength is continuing into the first quarter. so revenues outperformed what we thought 90 days ago. i'm hoping that that trend will continue here in 2017. >> gary, let's talk more about that. we heard from delta that they saw bookings increase after the election. what kind of an increase are we talking about? how much of that do you tie to the election? >> we ended up with a record

load factor. for the year we had traffic growth over 5%. i don't know what we'll grow traffic quite that much in 2017 because we're lowering capacity growth. but i don't know that i can really give you a number about how much it actually increased just because of the nature of guessing when bookings will come in. what we do know is we had strong traffic, strong load factor, and also a strengthening of fares, especially in december. the combination was an improvement of about a percentage point in revenues. it was meaningful. >> what do you attribute that to? business travelers who are willing to take more trips? actual vacationers? >> i think it was everybody. it feels like the consumer, you just look at broader economic numbers for the quarter and retail sales, the consumer felt

they could spend more freerly and business travel picked up. hopefully those trends will continue here. that's certainly what we're seeing so far in the first quarter. >> what kind of price increases have you seen? why do you think that you have been able to keep those price increases? why have they stuck? >> you look at the fourth quarter and our prices were down. the -- you know, just looking at the first quarter best guess is that prices could be roughly flat with a year ago. so prices are firming rather than continuing to fall. trending down with energy prices, if you will, over time. it's a very competitive environment out there, which is great for the consumer, domestic capacity this past year was increasing faster than gdp.

so, it looks like there will be slower capacity growth in 2017. but the pricing environment is very favorable for the consumer and the record traffic numbers reflect that. >> in the last quarterly filings we saw the berkshire hurricane matthewaway purchase stakes in delta, american airlines and united. warren buffett talked to us and said he had purchased shares of southwest as well. he didn't want herb to think he was leaving southwest out of the pack. have you had conversations with mr. buffett or anyone at berkshire hathaway about that? >> nothing that is public. so any conversations we have, we don't disclose. but we try to take good care of all of our shareholders, and we love that good housekeeping seal of approval that mr. buff testimony brings. >> gary, the southwest effect, entering new markets, traffic increasing, fare s declining, hw

much of that is still a story for your company? >> very much still a story. it was profiled early this year or last month what we have been able to do at washington reagan. it's a function, of course, of what the existing traffic and fare levels are when we go into new markets. we are in an expansion phase here since 2014. we've done a lot of good out of dallas, love field is an example. grown dramatically there and have lowered fares, stimulate travel. so, you have a couple of recent examples there. the expansion we have today is more beyond the 48 states, and so we're excited about the new international opportunities, and in doing exactly what you said, adding flights, lowering fares, stimulating the market. >> gary, real quick, under trump, do you expect more consolidation in the industry?

people talk about what could happen to jetblue, alaska airlines has been a perennial takeover target, less southwest. where do you stand on those issues? >> i don't know. the attitudes over the years have not varied much in my opinion towards consolidation. the industry is uber competitive right now, as i referred to earlier. w what we're hoping for is tax reform, regulatory reform and infrastructure investment in terms of modernizing the traffic control system. that would be a huge benefit for aviation and the traveling public. >> all right. thank you very much. we appreciate it. great to see you, sir. >> thank you. >> thanks for having us. >> charles, thanks for being here. come on back. coming up, ford set to report in the next few minutes. ceo mark fields will join us first on cnbc, and comcast

reporting. (bell chimes) ♪ nice work brother dominic. 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. ♪

i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound)

live from the beating heart of business, new york city, this is "squawk box." good morning. welcome back to "squawk box," we're live from the nasdaq market site in times square. the futures right now after the big dow 20,000 looking like it's on the move. about 40 points higher if we opened up now, nasdaq up about 9 points. the s&p 500 looking to open more than a point higher right now. we have some earnings from a company we know well. >> we do our parent company comcast out with earnings. this is the parent company of nbc universal.

earnings of 89 cents a share, two cents better than the street was expecting. the street raised estimates overnight, going from 86 cents to 87 cents. revenue above forecast. comcast anoupnouncing a two fore stock split, a 15% dividend hike and an increase in the company's buyback plan. a lot to look through. the headline for cable, video customers positive for the first time in a decade. 161,000 new. >> 12 billion with 5 billion of buybacks expected in 2017. that's a hike in the dividend of 15%. 1.26 a share. it is their 12th split. >> i didn't either. >> some of the other metrics, free cash flow above expectations, also consolidated as well as cable and nbc universal revenue above, and

consolidated and cable operating cash flow was also above. as you point out, andrew, did you -- that's the thing that goes into the -- flies into the face of the worry about -- just cable in general. the high speed internet stuff. did you see the ads there? huge. >> incredible. >> high speed internet customer additions 383,000 in the quarter. 1 1.37 million for the year. it is just hard to see the things waning when high speed internet continues to grow. it's so important. especially for businesses, too. >> video has been part of the tricky part. >> video, too. >> for a decade this is the best numbers they've seen in a decade coming into this. up from a loss of 36,000 they had back in 2015. >> it's such a -- there's so many different parts of the company now. we probably would be remiss if we didn't mention theme parks.

>> that was not supposed to work. that's working in a very big way. >> them park operating cash flow increased 18%, also new attractions. that cost money to do the new attractions. >> harry potter out in california. another new attraction that opened down in orlando. >> a tough year comparison-wise for ron myer and for the movie studio, but you stick in those two -- there was -- there was "sing" and another one -- >> "pets." >> "secret life of pets" which will both be franchises. the results, film revenue increased 12.6%. the stock now at a new all-time high, up above $74 a share. or $37 as of february 17th. >> 11th or something?

>> yeah. >> do it on -- >> you're right, february 17th. >> they should have done it on february 14th. >> valentine's day? >> because of the love the market is showing comcast today. all right. ford motor rolling out results. let's get to phil lebeau with the numbers. >> ford reporting earnings that came in line with estimates in the fourth quarter. 30 cents a share is what the company earned. revenue better than expected at $36 billion, about a billion dollars better than what analysts were expecting. let's bring in mark fields, ceo of the ford motor company in michigan. you're still looking at 2017 as being a bit of a pull back relative to '16, correct? >> a bit of a pull back. that's because we're making investments in emerging opportunities that will help grow the company going forward we're coming off a very strong

year, as you said. the second best ever in terms of our full-year adjusted company profit before tax. and importantly our key regions, north america, a strong margin for the year of 9.7%. europe an all-time profit record, and china all-time sales. it was a very, very good year for the company. >> a good year and yet you find yourselves in the cross hairs of the white house. president trump has said he wants cars sold in the u.s. and built in the u.s. after you along with mary barra and sergio marchionne met with the president on tuesday. do you expect to add assembly plants? >> i think we have the appropriate amount of assembly aplan plants. we had a positive meeting with the president. think about it. in the president's couple days in office he has said that he will focus on the economy.

manufacturing and auto have been going forward. >> he didn't give you a deadline for saying, look, i'm building more in the united states. what's your approach. do you wait and see what happens with decision in terms of your production? >> reporter: well, we have to see how the policies develop and actually are solidified over time. he was asking us. he wanted to know, what are the type of things that the administration can do to generate an environment for more growth here in the u.s. from a manufacturing and automotive standpoint? he talked to him about that. he listened. a number of key aides were in the meeting. we volunteered to work with him and his administration on policies that will support both investment and job creation here in the u.s., in particular. >> mark, does he understand that

generally speaking auto makers cannot make small cars in the united states and be profitable? from your perspective? does the president understand basic facts in terms of auto manufacturing here in the u.s.? >> well, i think very clearly the president understands it's really important that we run a profitable enterprise, he's looking for opportunities to see how he can grow manufacturing here in the united states. and what we talked to him about is our track record. you know, ford leads in this regard, given the 28,000 jobs and $12 billion we've invested over the last five years and we said with the right policies, we can continue to lead and we made announcements as you know earlier this year, phil, in investing $7 billion in our plant in flat rock. adding 700 new jobs. we look for more opportunities to do that. the economy grows and as our business grows. >> ma, i know he has a question. go ahead. >> it's along the same line with your questioning. so, mark, the administration i

think would like to move from the stick to the carrot. and you actually made comments saying that that can happen. and if business conditions in this country or the united states are improved enough, we won't lead you to move elsewhere. i guess my question is, is it really possible to improve business conditions or tax policy here to the point where it really doesn't make sense in some instances to build cars other places because of labor or where you are going? it seems like you can't completely offset the advantages of going somewhere else. i don't know if i speak freely about this now either. i might say, yes, just because i don't want to be in the crosshairs of another tweet or something. is it really possible to do that? >> well, listen, there's a lot of factors we put into place in terms of where we grow in place manufacturing. you know, obviously, like we made the decision to invest that $700 almost here in michigan. we look at a lot of the factors.

one of the fact ormgs we look at is we feel it will be a more positive business environment for manufacturing here in the united states. so whether it's trade policy or tax reform, or overall regulatory reform, regulations that are in line with market realities. to es are the types of things we look at. we look at it on a case by case basis. we will continue doing that going forward. i strongly believe there is an opportunity to keep that environment and improve that environment here in the united states, which would be good for the economy and i think good for the auto industry. >> mark, give me a simple answer on this, i know we have to run. when you look into your crystal ball four years from now, are you building and shipping as many cars from mexico to the u.s. as you are right now? >> well, i -- our object siv to grow our business. we're a global multinational, phil. so we want to grow our business around the world and grow our production around the world, wherever it comes from. but we also know we need to be strong and vibrant here in the

u.s. as we are being the leading manufacturer of cars here in the united states today. >> mark fields, ceo of the ford motor company, joins us fear here on cnbc from dearborn, michigan. there you have. mark fields will not say anything that won't put him back on target with the president. what is interesting if the president pushes them and the other auto makers to bring production back here. they're in a bit of a pick him as we talked about in terms of what can you do and make a profit here in the united states? thank you for that. appreciate it. when we return, we will hear from two market pros whether they think this rally has moved and where to put your money right noud and congressman chris collins, discusses the gop agenda. our utility stocks are ready to power up your portfolio. we will take a closer look at

that and see if they are under performing or they are ready to run. we are back in just a moment.

>> the do you hit 20k, will it hold? >> it's something that's sustainable. >> a couple guys have been saying, now is the time to put up or shut up for the markets. >> we did it. we closed above 20,000. >> her 15 out of 15 dow stocks that reported so far this quarter that i would buy. i think that is why this market is rallying. >>

take one. directv now. stream all your entertainment! anywhere! anytime! can we lose the 'all'. there's no cbs and we don't have a ton of sports. anywhere, any... let's lose the 'anywhere, anytime' too. you can't download on-the-go, there's no dvr, yada yada yada. stream some stuff! somewhere! sometimes! you totally nailed that buddy. simple. don't let directv now limit your entertainment. only xfinity gives you more to stream to any screen. >> welcome back to "squawk box." earn that income, it's the metric used.

it's always been the metric. blackstone came if 4 cents above revenue. the private equity chairman and ceo said the quarter marked a strong finish to what was an otherwise tush leapt year. the trump rally taking the blue clips beyond 20,000 t. dow led by a surge in boeing goldman sachs and ibmment let's talk more about that milestone and what is next for the market. the managing director and chairman of the s&p dow jones indieces and gentleman, welcome to both of you. we will start with you, you walked in and handed us these dow 20,000 hats, how long have you had these made up? >> since i think shortly before christmas. >> there is not something you had in the back storage area for a long time? >> no, no, no i mean, it's how

we jynxed it if we bought them a year or two, plus they'd by dirty and dusty. you can see they are nice and new. >> we have seen a huge run-up in shares, if you look back to where we were with the lows in 2009, just above 6,000, or 6ment 600. what do you think has happened here? what would you ascribe this to? >> i think you got two or three things going on, from 2009 was the bottom of a really horrendous bare market. this was the second in about ten years. we've taken it down over 50%. and a horrendous recession as well. that really powers you out, brings you up to sometime in 2016. the most recent couple months, since the election day, has clearly been excitement, anticipation, about what looks to be a big change in economic policy and gathering some momentum and on top of that i

think the whole idea of 20,000, news coverage, gets a lot of people excited. fought just the ones in this neighborhood on wall street. not just the ones you do -- >> probably not the ones in this neighborhood. it's wall street you are talking about. >> the 20,000 discussion in the news i think gets people excited and it encourages people to be more bullish and put more money in the market and so on. >> louie, you think that's the right move for investors if you were someone waking up paying attention to what's happening in the markets? you look at the momentum we've seen from this point? you think it continues from here? >> sure, i expect 20,000 to now go from a creeling to a launchpad for lack of a better word t. tail end of the s&p i still expect to do better. it did better than last year. it all has to do with the strong u.s. dollar still impeding a lot

of the multinationals, almost half the s&p still dropped out of america. so the small mid-cap arena is very well poised to continue to rally strongly, just on sheer full of fund as everybody realigns from what i would say from a -- >> a lot of things analyze on the chess board. we seen the excitement what's happening with donald trump moving out a lot of regulations and movering to do a lot of these things. where do you kind of look for any head winds? where do you look for additional tame winds when it tries to figure out how this will all work out? >> well, i think the i am buying the materials now, especially in the energies patch. so i need earnings every single quarter, but i think some stocks clearly got ahead of themselves. i still worry about caterpillar

rallying well before its earnings will be good. so i really want to buy a lot of those industrials and material stocks that like a tech resources that are benefiting from the trump administration. so there's a lot of good things to come. but that infrastructure is spending for next year. >> all right. let's talk about caterpillar, in particular t. company will be out with earnings later the morning. are you worried the stock has gotten away of itself, gone ahead of itself. how long do you think it will take before things actually materialize in the earnings there. >> is that one of the next year stocks you are talking about? >> it will have great results in 2018. to caterpillar's credit, they pete estimates. the sales and earnings are forecast to be down. it's the dollar. if they can successfully fight the strong dollar, i'd take it all back. i do commend them for surprises if recent quarters. but absolute sales and earnings are still not turning up. >> well, what do you think about donald trump's recent comments where he has said, look, he'd

like to see a slightly weaker dollar. >> that kind of goes hand-in-hand with what you are talking about. how do you think we should be figuring out what happens with the dollar? because that's confusing. >> that's posturing for trade negotiations. the truth of the matter is, on mexico or china, my currencies have weakened immensely against the dollar. i have an incredible negotiating posture right now. so he's just trying to set himself up to get a better deal. he can't really control the dollar. it's really controlled by interest rates and the strength of our economy. >> let's talk about the s&p 500, it's a couple of points away from a round number, itself, 23,000. how important and significant is something like that or is it at all? >> for the 500, it's a smidge from 2,300. that's a nice number. but it's not quite as round as 20,000 and so on. but i think what these numbers really do the, is get people

interested and excited and 20,000 has been talked about on and off certainly for a couple months. that builds the excitement. the s&p has always been morally substitutional professional measure than the man on the street measure. and that plus a not quite so round number means it's probably not driving much excitement, except for a couple technicians. >> we had a number of analysts and investors come on earlier in the beginning of the year, with the suggestion that if you look on a calendar basis, historically, there is usually dips throughout the year relative to where the market starts. the beginning of the year. which suggested to some people i think that if you actually had cash on the side leans that maybe you should wait. they talked about 5 and 7% pull backs of the sort. has something changed? >> you mean now and three weeks

ago? >> yes. maybe up didn't adproo we that had -- agree with that had vice from the beginning, i don't know? >> the thing about timing is difficulties, i wouldn't say time it this way, time it that way. i don't believe in market timing. i think what's happened sentence three weeks ago, is we know a lot more about what president trump wants to do and as we roll forward through the year, it's going to turn out, we're going to be more and more looking forward to what he has done. and there's a huge amount of noise on both side, probably moreoise than 20,000 for that matter. we have to wait and see whether he like it or not. >> louie, you said you think it is significant to see the s&p 500 at a new high, a couple points away from the 2,300. why is that? >> it should help consumer confident. it should help spending. i'm down here in florida. our real estate market tends to

go with the real estate market. at least the high end does. it will boost confidence for everyone. >> i would agree with that being you mentioned real estate, home prices as we maerp measure them on the educational index surpassed their highs in 2006 a couple months ago. in most parts of the country they look to continue to go up. so there is a lot of confident, a good deal of excitement and that's definitely a plus for the market. the longest term back through this year is whether the fundamental also and the results and everything comes through to those who support it. at this point clearly everybody is very upbeat an believes they will. we will have to think. >> thanks for coming in today. louie, thank you for joining us. >> all right. coming up, now the dow has closed above 20,000, johnson & johnson meanwhile pushing overseas in the markets, pushing the markets higher after a major

deal, details after the brang. as we head to the aforementioned break, here's a look at the markets at this hour. "squawk box" will be right back. dbre what? no. i just broke my leg. no, this is a full blown move in to the basement, you're gonna be out of work without that money from... aflac! you might miss your rent. aww i just moved out. bummer man. hey i used to have my own place. yeah? no, no i live with my mom, but it's cool. health can change but the life you love doesn't have to, keep your lifestyle healthy with... aflac! bp gives its offshore teams 24/7 support from onshore experts, so we have extra sets of eyes on our wells every day.

because safety is never being satisfied. and always working to be better.

because safety is never being satisfied. (bell chimes) ♪ nice work brother dominic. 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. ♪

>> wow, too fast. >> the first dwi. >> u.s. grant, great president. apparently he doesn't lick to imbible. >> of course.

you are waking up to a $30 billion pharma deal. they are buying actelion. it's up from the closing price yesterday. part of the agreement spins off actelion pipeline. >> coming up, cater bipillar ret results are out in a moment. we are back in a moment.

good morning, everybody, welcome back to "squawk box" here on cnbc. we are live from the nasdaq market site in time's square. among the stories front and center, check out nbc universal comcast t. stocks surging after fourth quarter earnings beat estimates, operating cash flow, free cash flow. they announced a 15% dividend increase and an increase share buy back authorization. by the way, if it opposite, it will be a new all time high for

comcast shares of 7570. a busy morning for economic statistics as well. in about an hour's time, we will get initial jobless claims. later the leading economic indicators of home sales will be out as well. food breaker kraft-heinz struck a deal with oprah winfrey, 10% of the profits will be donated to the world hunger organization. caterpillar is out with results. i will have to look closer, because the number nominally reported a loss of $2 a share. we will see what that entails because it was an estimate for 66 cents a share. so we will see exactly how it was pushed into a lot of sales. a loss of -- compare the loss of 16 cents in the year ago period.

the 4th quarter included three large non-cash charges, also higher than expected restructuring costs. the items resulted in a loss for the quarter and the primary reason was actually market-to-market losses for measurement of pension and other items. deferred tax aloun and restructuring costs. did you see a clean number? >> i'm still calling up the adjusted per share of 83 cents. >> 83. then that would be above estimates at 66. and then the revenue number, people are looking for 9.8 billion. i see 9.57 becoillion in sales. fiscal year 36 to $39 billion. i imagine that's for next year. >> i'm just taking a look at the

2017 outlook. they run through a lot of different things here. i don't see hard numbers for some of these issues, but they're saying they are seeing positive signs, that could be early indications of modest recovery and several of their businesses, resource industry. >> next year, 304 is the estimate for next year. they just said 230. i don't know whether that's -- >> their outlook is not one line. it's paragraph and paragraph. they're talking about the positives in resource industries commodity prices are at a higher level than a year ago in each of the last three quarters, suggest that mining-related sales may have bottomed. that's pretty significant. we have been looking for that for a long time. on the positive side, the construction industry, sales in chosen became recovering if 2016. sales in europe seem to have stabilized and could have improved in 2017 and sales if brazil which are often peaked by 80% could improve to the

brazilian economy recovers from recession. energy and compression, gas compression remains strong. they have a backlog on turbines. on their concerns, though, they have a pretty long list, mining products has improved. we expect capital spending to be flat in 2017 after several years of decline. europe and the middle east are the most concerning regions, better economic growth may be -- i can't get the bottom line number. >> no, we will do the outlook. i said 230 for 2017. the estimate is 304. the stock would be down more than it is right now. they say excluding restructuring costs of 500 million. we expect just a profit of 290 at the mid-point vs. 304. >> caterpillar is a stock they think will improve, not until

2018. that's a little of what you are getting from this guidance and outlook from caterpillar as well. >> well, 2 nine, which is excluding the costs compares to 2012 of 90 and 2011 of $7.40. so that just shows you how difficult it's been for caterpill caterpillar. in some parts because of the big, which was the company that they brought? remember he was open our air and it was in his district that it happened. >> that doubled down on an industry or a sector right before it went off a cliff. maybe long term it turns out, okay. but it's been a drag. it's been a drag on earnings and a drag on shareholders. home depot has been on quite a run, though, since 2009. more americans deciding to put money into their homes instead of moving, after the financial crisis and diana has more on the

comeback? you are right. the home improvement has been a leader on this rally, an absolute tear since 2009, not despite the epics housing crisis. because of it. take aing loose, home depo is up over 400% since the dow cropped 10,000. what fuels the gain? think of what happened during the foreclosure crisis. first, millions of homes were either taken back or abandoned by owners who could no longer pay. they fell into disrepair quickly, entire neighborhoods, in fact, very quickly, investors moved in, buying the homes, doing mostly repairs and rehabs, the kind of fixes that home depot products fuel. that was the first surge. then negative equity, which hit millions of occupants. it kept homeowners in place. they couldn't move without taking a loss, you don't move, you renovate, you update. home depot sweet spot. now as homeowners stay in place

longer, millennials start to buy, demand for remodeling products is strong. amid fast housing price, they are using extra cash to upgrade appliancens and fusiontures, all home depo. thank you for that. >> when we come back, we will head to the city of brotherly love and the site of the republican retreat. congressman collins is joining us after the break. check out the futures. we are in the green, the dow not only in the 20,000s, but pushing higher. we are back in a moment. that means you can take a universe of data - in your case literally - and turn it into medical discoveries, diagnostic breakthroughs... ...proof that black holes collapse into one singularity. i don't know what that is. but yes. innovation runs on supercomputers... ...and supercomputers run on intel. you are super smart. and super busy. ♪

ooh! ufo! false alarm, eyelash! it's your tv, take it with you. with directv and at&t, stream live tv anywhere data-free. join directv today starting at $35 a month. no extra monthly fees.

tbut what if it didn'tm. have to be? at blue apron, we're building a better food system. where we value quality and flavor over quantity and shelf-life. where chefs and farmers work together to make farms healthier, grow higher quality ingredients, and deliver them in-season, ripe and ready to cook. because food is better when you start from scratch. blue apron.

>> welcome back to "squawk box." in political news, president trump is taking the first steps now toward building a wall along the u.s.-members xicu.s.-mexico.

to begin construction on the wall and add more border patrol and i.c.e. agents. the orders will cut off money to so-called sa so-called sanctuary cities. >> the american taxpayer will pay for the fall first? >> whatever it is, we will be paid back at whatever date. >> that wall will cost us nothing. >> mexico president, though, responding, saying in his word, mexico does not believe in walls not on their northern border, maybe the southern, but they will not pay for any wall. the mexican president was expected to come to washington next week. his team says now that's possible that won't happen. our michelle caruso cabrero says he was at the white house yesterday and is still in d.c.. can you check out the mexican

p peso rallied from yesterday. republican lawmakers are gathering in philadelphia today in an effort to come up with a proposal to push this year. president trump is set to join the senate and health members later today. joining us with more congressman chris collins. he serves at the trump transition. good morning, congressman, joining us from the city of brotherly love. >> yes, i am. >> not too far from here. that's the first stop. that what we talk about. if you get on the flotilla if you miss it you go down to d.c. we are talking about the market in those concerns, congressman. so i will tell you one thing that came out yesterday. some of this stuff is expensive. i know there are certain guys in congress that are probably more fiscally conservative perhaps than the new occupant of the white house, but hiring the

i.c.e. agents, building the wall, if it's a half a trillion dollars in infrastructure, not sure where that comes from. anyone at this point starting to think, hey, we got to tread a little more slowly. >> >> well, no, when you really think about it, it's 4% gdp growth does an awful lot to generate revenue. we have the hiring freeze, president trump made certain promises during his campaign. he won overwhelming, 306 electoral votes, securing the wall number one. i.c.e. act as part of making sure we are desporting the criminal element in this country. so what president trump is doing is fulfilling the campaign promises. we acknowledge that. we respect that. and we're going to help him get that done. >> just to shift gears completely. when we hear the supreme court pick is coming next week and i don't know who it's going to be. i saw the top three.

and then watching -- and this is in the senate. i know are you in the house, leader mcconnell said that it's going to happen. is he implying that they're going to do, it's going to be filibuster proof in the scotus appointment? do you think that will happen? will that nuclear option be employed by republicans? >> well, no one wants to employ anything close to that nuclear option, but we also don't expect the democrats to filibuster a supreme court nominee for four years. i don't believe, there is no question in my mind, we will see a constitutionalist, somebody that does not want to make decisions that are from the bench that are contrary to yeah the legislative body is doing or the constitution says. so i'm not sure why the democrats will be upset with a true constitutionalist coming out of the supreme court. let's face it, we got ten democratic senators running for

re-election in states that president trump won. so we're certainly not thinking at this point that we got to do away with the nuclear "options action," the filibuster. it's not our intention, at least that's what i've we heard. we're going to put forth, the president will, a constitutionalist. we expect the democrats to do their duty. they said we need to have nine people on the court. so it will play out as it plays out u. but we certainly will not go four years without the supreme court. >> what are we at four confirmations? i think president obama was like at 15. or something, i don't know, 12. at the same point. you guys are down in philadelphia. nothing can happen today or tomorrow, right? i mean, do you think -- >> that's true. >> do you think there is some -- they can't stop it. are they just sort of feet, dragging their feet here? we do want some of these things filled, so the business of the country can be gotten too

quickly, right? is there some? >> yes. this is a childish reaction to losing the election. they didn't expect to lose this election. so putting some of the nominations by jeff sessions, who is going to be confirmed to say, let's delay it a week. it's childish. it's just -- their anger, their angst at losing the election. we realize that. under the rules of the senate, they can do it. all of the nominees will be confirmed. if it takes an extra week, it takes an extra week. >> to be fair, there have been vetting issues, questions, things as they may take a little longer to sort through. probably right. it's not going to be stopped. it will happen. maybe it's not so surprising it may take an extra week or something. >> well, no, no, jeff session's delay one week was simply that. one senator said let's delay it a week. that's her prerogative under the senate rules. so we wait a week and then he's

confirmed. >> what are you all planning on talking about today? i guess there has been so much frenetic activity that came out of this administration, how do you and congress sit down and figure out how to prioritize and what to put first? >> that's the beauty of what we are doing. the republican senators, the republican house members, our speaker, their leader talking if specifics about our 200 day agenda, how we're going to get it done to use donald trump speak using a gant chart showing who is doing what, when and a time line. we will have an extraordinarily busy legislative schedule. in many respects, it is president trump setting the schedule. we are respectful. he is the leader of our party. today we will continue to map out the details. we talked in depth about tax reform last night. so we are going to lit the road running pretty fast. this was a great way to jump start all things, including the president showing up.

>> i wanted to talk to you about the supreme court nomination in a second. we will keep rolling the music for a second. what i want to ask you is about george pryor one of the potential nominees to the supreme court and whether you would support him. he has talked about rolling back roe vs. wade and specifically said that law was the worst abomination of constitutional law in our history. you talked about a constitutionalist. he said not only is it a case, the texts and structure, it has led to a morally wrong result. you represent the people of new york. where do you stand on that? >> well, i mean, certainly today, roe v wade is the law of the land. i do not expect it's going to be re-visited any time in the near future. and certainly everyone is entitled to their position, but, you know, this many decade and i think to your point -- >> would you support the supreme court nomination, given those comments? >> we would be talking about these comments as i'm sure they

will. it's the first i've we heard what exactly is said. i'd have to put it in context, where does he stand today? >> two ought guys, one was 95, harmon or whatever 95-zip. i read that too about pryor. i wasn't assuming it would be him anyway. thank you. >> when we return, a look at the role oil played in the dow reaching 20,000. then the one factor that did not participate in the rally is now the time to buy utilities. we will find out after the break. "squawk box" will return after the break. we'll be right back. is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

is happening before our eyes. shift in human history sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim the global investment management businesses of prudential.

>> let's take a look at how energy stocks played a role. jackie deangelis joins us now with that story. >> good morning to you guys. since the dow 10k. exxonmobile and chevron up 25% respectively. both will be key should the dow move higher from here. excitement has been building around the energy name since president trump vowed to roll back the industry. two days ago he signed executive orders in the dakota access project, confirming his willingness to take action. they could lead to more drilling and pipeline, that would transport the oil. but they could create an environment where the mark becomes flooded with oil again. remember, if there is not enough demand the prices go down. we saw $26 a barrel in february

of last year. those low prices hurt the oil giant. right now, analysts are saying we should see 60 to $70 a barrel. right now we are a little above 50. >> that would boost the dow and there is a ril risk, here. >> talk about that risk. one sector that has not added to the rally, it's the worst performing s&p sector. sick around for this, greg gordon the a power researcher at isiment you just we heard that. are you bullish. >> are we missing something? >> utilities? no, i'm not bull in. in fact, the way things stack up, if you believe in sort of base-case trumpanommics, those are a bad cocktail for utility stocks. they're very interest rate sensitive, first of all, dividend-bering stocks. interest rates go up.

that's a head whipped for valuation. if we use our base case from isi, from our macroteam, 3%, 12, 18 months out. >> that would put corporate bond yields 5.5%. you can use a multiple on utilities. the ultimate result from that. then there is a second more deeper in the weeds issue, the tax plan, trump's tax plans, lower tacks get passed through to the customer. so if you looking at the market and say who is going to benefit from higher profit margins from lower tax, utilities are at the bottom of the list. >> is there any individual utility you would name that you think is better positioned from the others you think is long, and is there any in particular that you think is going to be particularly hidden away that's even worse than anybody else? >> yes. and yes. so there are a couple companies in my group that are conglomerates. they all regulate the utilities. they own other infrastructure

assets that are not regulated. sempra energy in san diego is 65% utility 35% gas infrastructure. they are building a big export facility that will have much higher profit margins under a lower tax rate. next air energy, it was hit really hard, it's the largest in north america. trump is anti-renewables, which is not accurate t. vast majority of wind production in the u.s. being built is being built in red states. it's a massive, massive economic boone for those states. it's actually cost effective, we think there is a great opportunity in next era to buy the dip on this sort of false negative on trump's knick economic policy on energy. >> what's the worst one out there? >> i would say it's a basket a. basket of utilities that have holding coverage leverage that have a buying spree on big premiums. >> like?

>> like the company is not well positioned. duke energy, fortis out of canada, they have been buying us utilities. >> when we come back, this morning, more on dow 20,000 and beyond. the author and founder of grant's interest rate observeer will joins join us and stick around "squawk" will be right backobserve us and stick around "squawk" will be right backobserver >> you know what i'h

today? you know how many dow xoepts hit all time highs today? >> the dow hitting that milestone for the further ever. this morning the rally continues. the trump bump. >> i'm very proud of that. you have to go up, up, up. we don't want to say that. >> one sector is on fire up nearly 20% since the election. we'll tell you what it is. >> plus, fang tamed. the biggest tech winner since the election may surprise you. the final hour of "squawk box" begins right now.

♪ >> live with from the most powerful city in the world, new york. this is "squawk box" ♪ >> good morning, welcome back to "squawk box" here on cnbc live from the nasdaq market site in time's square. i'm joe kernon along with becky quick and andrew ross sorkin. after a historic day yesterday, the dow is looking to add to its gains, looking up another 16.5 points t. s&p is indicated up fractionally. that's a key point. almost at 2,300 on the s&p. we will see if that happens today. i am telling you, we will make a big deal on the s&p as well. at least i am. there is the nasdaq indicated up seven treasury yields have been moving higher. just under 2.55 percent. >> let's get to those stories investors will be talking about today. comcast posting better than

expected revenues. the a person company announcing a two-for-one stock split. a 15% dividend hike and an increase in the buyback plan. stock up already by about 2%. a fixed quarter for caterpillar, beating the street, revenue falling short. the heavy equipment makeer says they are impacted around the world and waiting for the return of mining. in some businesses it could be bottoming this year. >> that stock is down by 1.5%. johnson & johnson is buying a sws company actelion for $80 a share in cash. they are spinning off the research and development pipeline. a little over 24 hours, it was indicated the dow would push over 20,000. it hit that mark and did not look back. what is next? the next milestone, senior

market commentator has that story mike santoli. >> i we heard you guys talk to david blitzer in the last hour about it as well a. little tongue in cheek, i do think professional investors are focused on 2300, a couple points away. it wouldn't surprise me if yesterday's major move, a big open and they sat there hovering under that 2300 mark perhaps because that's what the traders are fixated on as the next landmark. when we, assuming when we get the 2300, let's assess where that brings the market t. broadest benchmark that the pros use. one thing that's interesting about it, is it will have hit the year end target of multiple self side strategists. four are come income this year. i don't believe one is sitting at the desk, that had an s&p at the end of the year. that tells me wall street is cautious. it's probably a benefit that the sell side was not all that enthusiastic or aggressive with

the target. that's a positive. it does bring in about 20 times trailing earnings and a 2% dividend yield it's an interesting beacon for multiple years. when the yield is above that, stocks tend to do well. it taxes back to 2% overtime. you are looking at a total return on a one-year basis. anniversary the nasty correction of last year. so i don't know that 2,300 is going to be celebrated or necessarily a point of resistance. i will note 2,100 on the s&p capped the market for about a year-and-a-half. so whether coincidence or not, it's one other round number to watch. >> listen. for the people to say the dow doesn't matter and they won't celebrate the dow. they weren't celebrating the 2,300. if they weren't doing the dow. >> we don't want to celebrate. for me the key take away is an opportunity to assess where you are and -- they're all telling the same story. if the dow were telling a different story, by the way the

rest of the world blareaking ou you'd say we don't use the dow. >> we chose 10, we understand, but it's still you know psychologically it's fine. >> 2300. it's a story about numbers. >> if you do like the s&p, okay, as you pointed out, what itself your year end target, perfect? 2300. is it the ill january? >> january 26th today. >> there are 31 day, right? >> tuesday at the end of the month. >> how many months will they have 28 days? >> i got to go. all of them. you get me on this every time. i've finally figured it out. >> you got me on that one. a couple times. >> hey, you know what, we were going to high 5 if we got 20,000 of the dow. >> yeah. put your hand up there. hold it up. >> mike, stick around. we got more to talk about. waiting for it. joining us right now is the

chief u.s. equity strategist and jim grant of grant interest rate observer. a lot of interesting things to watch here. jim you have been negative and worried at times, but you can look at this, it's unusual. i'm sorry to call you out on this. you have been negative at times, you look at this and see two different paths we can say with donald trump as president. why done you la i that out for us. >> imagine a stock, tjt, that's a ticker. all the analysts despise it 100% bearish, heavily shorted. yet this particular stock types e keeps making new highs. one would begin to wonder if there is something the analysts aren't seeing. i think the interesting of that doubt. 20,000 is not so much the number or even the price earnings ratio, which is slightly worrying, more than 18-and-a-half times. rather i think it's curious that this metaphorical stock keeps climbing this wall of worry or,

indeed, of loatheing. the "new york times" on monday led the paper not with a news story but with a news analysis that basically said the administration failed while donald trump was hunting around for office supplies. so maybe the market senses something that many of us watching donald trump don't or maybe this is merely the reflection of very, very few capital for a very long time. i think perhaps that one worry at least is interestingly framed by market action. >> that is the shipping stocks are beginning to turn up and indeed were turning up after the election as if there would be no tariff. there may be better things coming from the fundamental point of view what do you think? >> i am looking at the ism new orders, they lead industrial

production. industrial products are incredibly linked with history. so it's reflecting the earnings going forward borrowing some potential trade protectionist act that would kind of end you know world trade in the way people try to present it. so i kind of, you know, it's interesting, i haven't looked at the stock, jim's point is pretty interesting in that regard. but the notion of it's aster when everything in washington is kind of pushing toward generating growth and more pro business activity. i think that's what the market is picking up. i tell investors automatic time, leave your political partisanship at the door when you walk in to trade. you cannot do that. your emotional state will be screwed up. if i look at our centrics, they're neutralists. they're not enthusiastic. they're not negative where they were a year ago. >> what does that mean? >> it's neutral. it's not telling us to buy or

sell. if we were euphoric, we would say sell. we are not getting that signal yet because there are a lot of doubters out there. >> is it to look at the targets hit, do you think we will sit here? >> i know two mind, our target is 24, 25 on the s&p, our target. but the other piece of it is i have been married for 30 years, i have three children. i know nobody listens to me. i assume my wife and my children don't care about what i think than many investors don't either. it's not up to me. it's up to them. >> so, jim, let's get back to shipping. we seen the transports kick out, people talk about consumer enthusiasm and business confidence and all of these things going in there. to your point, that's what you should be holding on to with the exception of all this gets knocked aside by trade protectionism? >> a little.

i think, here's, becky, what i would observe. in 1981, this exact moment in 1981, ronald reagan had a very new administration. the stockmarket was at nine times earnings. the ten-year note was about 12%. the economy was fought growing at all t. market was basically set up either for reagan's failure or for continued inflationary stagnation. today, the s&p is at about 20 times the ten-year note is not at 12% but rather two-and-a-half. and market is set up for donald trump's success, notwithstanding the virtually unanimous neck negative sentiment you read in the papers. so it's priced for success as well. this is a very expensive market. i think it's very expensive. later today and tomorrow. but i think things could, indoechld i think donald trump is the avatar tail risk.

he is the expression of possible extreme kout comes him things could but might say great. they could be nice. >> whatever we had you on, we were single mindedly on the fed being too accommodated for too long. how is that eventually the day of reckoning. we don't talk about that anymore. did trump kind of give the fed a lifeline? >> i think he's usurped the news. >> did me make it less likely the day of reckoning? >> no. >> it's still coming from the fed being too loose. >> we had six years, six or eight years of a unique in the history of the world monetary regime zero percent rates, negative nominal yields on the part of government through courtesy only are deemed to be solvent. >> wouldn't 3-and-a-half% gdp growth wouldn't that taper over

in the problems that it's created? >> would help the earnings to ratio charges, yes. >> are you convinced he's going to put in somebody significantly less dovish than you? >> no, my guess is he will put somebody in very dovish. >> right. >> i think he is a former leveraged new york city real estate speculator, who loves low rates and lovers a big real estate projects and growth. he wants somebody that will finance it. i think the g. william miller of this generation will finally take that seat. maybe steven bannon will get it. >> i'm confused. do you think this is a good thing or a bad thing? >> i did vote for him. i registered a short sale on hillary clinton by voting for the second worst candidate. >> okay. >> but that wasn't a vote of confident in what you want for the fed? >> it was a vote for the perspective rolling back of the administrative state.

it was a vote for, perhaps, for a rule under law. it was perhaps a vote for growth and for markets and enterprise. that was my hope. i was basically voting for mike pence, if you ask me. >> i think he said that. i pulled up my canadian flag, i didn't vote. >> have you your own problems up there. >> i'm a harper fan, so. >> all right. before we get -- you know i'm sorry, i mean he took a shot at the "new york times." i'm not taking a show. i will use the washington post. so here's the washington post. you said it's universally negative all the time. we hit 20,000 yesterday and you won't it's find it on the front page. what state elects presidents? what state you need to win and i'm not going to cincinnati. that's not where i'm going there andrew. >> florida? >> ohio? >> let's see for example in ohio what do you think the newspapers have? someone september this in for me, this is where the salt of

the earth is. above the fold in god's country is what someone said t. dow closes above a railroad, then down at the bottom, i wanted a screen shot of that it actually says the trump rally, after stalling continues in earnest. that's the way, andrew, i'm not talking about the "new york times," that itself the way to do the front baej i page on dow 20,000 page, radio it? >> we did a report called the bull run piece. just like the battle of bull run, it wasn't the quick end of the civil war t. trump trade wasn't going to en, we had four major changes. we are going to pro business versus a pro government perspective. two you got a move from monetary to fiscal policy. three, you got this america first identity of generating growth, not necessarily the trade aspects. number four, a great statistic if you want one, since 2005,

86.5 billion left equity etfs u.s. oriented and 1.75 trillion have gone into fwobond funds, i looking for miniscule reversals. >> i used that as my lead-in to break tobias. >> i have my own viewers. >> dayton, a screen shot of the washington post website. >> did they do it? >> yesterday, it was on big time on the home page, the "new york times." >> they were early. >> this person is saying you are showing your age by talking about newspapers. >> also, we will take a look at 17 years ago what happened to your hair. >> that will be when we come back. coming up, financials are on fire, mike mayo is doing something for the first time in 20 years. we will tell you what that is. i don't know if he's told his wife yet.

can the economy stay through the 20k? the grey chips are back. details next. stay tuned. you are watching "squawk box" on cnb ? ? plan your never tiring retiring retired tires retirement c. with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at etrade.com and get up to six hundred dollars.

trump rally. mike mayo a recent managing director at csa. his latest is moving back in black. there he is. we have him live. i don't know if you brought a guitar, it is nice to see you. was that photo shopped? >> it is photoshopped. >> you haven't liked the financials forever. >> let's put bank financials in perspective. since 1999 the dow has gone from 10,000 to 20,000. the bank has mot moved. two things happened, one september financial crisis. two is the reaction to the financial crisis. the attitude since the financial crisis is, in case of emergency. now, here is a -- >> i love when you bring props. >> there is my little bag.

it says if case of emergency what do you do? >> break the glass? >> well that attitude -- >> i would feel like i need to do that every morning. >> that attitude is the reason why banks increased tangible cash by a trillion, deposits by 3 trademark. bank balance sheets are the most resillient in a generation. banks can enjoy another global financial crisis and be back. in fact, they can absorb two global financial crises and still be fine and so that resiliency provides a strong economic foundation for bank stocks to do better. so here, you can have that for your new baby. and becky. >> thank you. >> wow, thank you. >> but the tile of that report is not just a strong foundation. banks are going back in black. by that we mean banks in the

u.s. should earn their cost or capital the next couple years. when that happens, valuations should be one-third higher than the current level. since we were on your show, we upgrate graded banc of america. we think there is another to go, another 50% over three years. >> across the board, among the smaller banks? people say will be the beneficiaries of the rollback if regulations? or you think the j.p. morgans, the biggest banks on the screen e scre right now? >> since we upgreated bask of marc last year the first time in 20 years we recommend six of the largest banks. we think they should all do well and earn their cost of capital. by the way, you still have banks out there with single digit roes that investors should put more pressure on management to get it right or change banks. we will be back with citigroup, we love the stock. we'd love it more if they had

more accountably in the longer tomorrow. >> goldman sachs, they still have more to go. >> absolutely. we think they hit their all time high in six-to-12 months. what you we heard earlier this decade, we are living to fight another day. we kept hearing that, get on with it. downsize. and they said, we are living to fight another day. guess what. >> move on. >> this is the other day. this should be goldman's moment. their job should be to facilitate expanding. trump's score card is spurring economic growth. >> if there are banks out there you don't like, given your bullishness across the board? >> look, we are positive on the bank group more so than we have been in two decades. having said that, the trust banks do have their problems. so we're still under weight the

trust banks the likes of state street, northern trust and so -- >> if you just lost that custodian business to blackhawk custodian business to j.p. morgan? >> absolutely. we like j.p. morningen. they're the lebron james of bank, they're good at offense and defense. >> you always like to go after ceos, so i have one governance question relates to donald trump and this new go. as you saw gary coen, so many of these other folks, a lot of the banks, golden sachs, haze out pr acknowledgment sell ra it the best of people who go into public service. do you like that or not? there are some who think this is a payoff. other think it's a great incentive and does good things for the culture of the institutions. >> there are serious public concerns as relate when people go into government. from a shareholder's perspective, that's who i represent, i don't see a big problem with that. i who you would not. when i go to annual meetings,

i'm going there to hold ceos accountable, to reach their financial targets. i'm not going to accelerated within they go to government. >> good to see you. when we come back, blackhawk's global chief investment strategist richard turnill on the surge and beyond. we will be right back.

>> welcome back. in news out of brazil,le from police are trying to arrest a brazilian businessman eike batista. they raided his house in rio de janeiro. the businessman wasn't home. his lawyer says he is out of the country. in recent years he sold assets and dismantled a former industrial group to pay off its huge debt of an empire of oil mining, collapsed. years ago, that was a big piece on the booming brazil. i think steve kroft maybe had done it for "60 minutes." he was the symbol. much of it come crumbling down. >> it didn't help. >> coming up, we are minute away from the weekly jobless claims

coming out. the numbers in the market are coming out. stay tuned. you are watching "squawk box" on cnbc. ld. whether it's in health care, customer care, technology, transportation or government. we touch millions of lives every day. conduent. advancing the everyday. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create,

not just wealth, but things that matter. morgan stanley

i'm not really sure why we are asked to follow up. we are seconds away the futures are flat after the big day yesterday ten year 255. rick santelli is standing by. the numbers, please. >> the december trade balance, of course the dest didn't move all that much. pretty tight. we're expecting a little over 65 billion. that's what minus 9, of course, we ended up with exactly 65 billion. following an unrevised 65 billion. let's move on. our preliminary december read on inventories, we see that home sale inventories are up 1%. that's a bit more than one-tenth we are expecting. it follows an unrevised 1%. it's right in the ballparks, sequentially. if we look at jobless claims, a

jump. no prize. post-holiday, getting the gps back. 259,000. so that's a 22,000 jump from 237,000 and, of course, some of the lowest levels we've seen since 1973 occurred recently around 233,000. i believe that was november or rather recently. you get the picture. we've moved up a bit. but in the big picture, it's at a fairly low level. interest rates in europe were approaching a whopping 50 basis points. half of 1% for the benchmark european tenure. that happens to be the highest yield since the end of 2015. we want to pay attention to that, of course. and there is still a bit more data that come in the form of new home sales. becky, joe, back to you. >> all right. thank you very much, rick. >> what's going on here? >> anders is here, too. he didn't hear him. it's hard to tell on remote who

is here or no. steve leishman our chief economic reporter. you want to weigh in in. >> we thought you were in a safe room. >> he's in a safe room. >> can i make a point that this advance trade number is good government? they've moved up the announcement of the trade number. if you haven't gone, this is the number when trade moves the market. this is the one that does it. the advance trade number. they get this out faster. it's just the goods portion, not the service portion. all the volatility is in the good portion. this comes out earlier. it looks like it's inline. potentially this claims numbers is the one number you can potentially attribute to actual economic data attribute to trump. but it's around the holidays. so i'm not willing to do that yet. it did dip down as rick said to those lows since the '70s. it's back up. let's see if that's a holiday volatility evening out. i want to say the president

trump take effect. the under lying economy has a couple things going for it. does this economy support dow 20,000? i think it does. the second half growth accelerated. now it is running 3% the last two quarters. the european financial crisis is off the boil. brexit so far is a non-issue and the threat of a government shutdown and default is a minimal. the big contribute to president trump so far is confident. >> that can be powerful. it showed up in stocks and confidence measures, not in the real economic data just yet. which is why hillary clinton is got given the credit for the most rally. she provided the most contribution, it's come by her losing. her defeat allowed the market to price out virtually certain tax increases of unknown amounts of new regulation. even if donald trump doesn't do a single rule the market can bank on fewer rules that would

have happened under president clinton t. backdrop is a better, not stunning growth, but a reduction in old risks. that's the basis on which the market has decided to make sense and take a bet on trump t. calculus seems to be a downside risk of stray policies and erat cal styles are outweighed by tax infrastructure spending. i like how he called donald trump the avatar of tail risk. i talk to my son, it's either going to turn out really good or bad. no in between on this. >> i want hillary clinton to run for mayor so bad. i would support her. >> why because you i had deblasio? >> deblah blah blah? i do. but that's not why. she has, you know, when you hit sort of bottom like that, then i think things become very clear. >> that there is a moment of clarity and redemption begins.

i think she'd be a great mayor. i do. why? >> i want her to be mayor. i don't want her to be president. i want her to be mayor of new york city. can you help me with this? >> i'd like to take a very middle of the road approach. >> you always do. >> since i'm running -- you can support me. you are the alternative. >> it would be tough for me. >> as of right now, i'm with her. >> i'm not kidding. i think shed be great. she would be madam mayor, if she were to run? it would be? >> are you not for that? that was a really back, you know, sayg that we should thank her? >> which, i'm just, i think. >> good or bad? making them go down? >> i'm serious about this. here's the thing, you have an 80% chance of a clinton victory priced into the market or better. which means have you an 80% chance of a tax increase on the

wealthy price tag. she loses, that comes off. that's a real contribution. >> okay. >> in the same way i do it goes away. >> i think it's kind of nasty and cynical. i think -- >> it will be beyond that. >> i am trying to 'ush the democratic party to realize business is an important aspect of the country. i think they've forgotten about that. >> that's unbelievable. private sector jobs come from -- government helps too, the private sector also matters. >> all right. >> i think they made a mistake t. reduction of risk is what i'm talking about. >> what can i get? >> can you get black or white. >> i want one of each. >> what's the matter? >> you want a printed tee-shirt? >> i don't want people to think -- >> are you totally trying to buy a tee-shirt at this minute? >> she'd be a great mayor. she's very talented. >> let's get back to the -- >> i can't. i'm on a diet.

large. join us again, join us now, that's a see food diet. richard turnill, a chief global investment strategist. i was reading your stuff. i liked it. because there is a slow and steady wins the race arizo race as pictu -- aspect. you will not get thrown off the side of it when it's turning. i think that might be anal gus to what happens in the global economy. right? >> i think this is a big turning point for the global economy. markets are adjusting to a inflationary environment. we are seeing persistent upside surprise, one of the changes

taking place is no longer just about the u.s. we are seeing it everywhere, here in europe, in asia. huge japanese export numbers earlier this week. we are seeing upsize the price to inflation. again that's moved from being a u.s. story to a global story, with positive inflation surprises coming through in europe and asia. a policy shift which i think supports global growth. so i think this is not a short-term trade. we are seeing a significant shift in the environment. >> but one of the concerns, richard, is that there could be a dislocation or a disruption, if the dollar were to go up too quickly, if interest rates were to rise too quickly, it's almost self defeating. it starts seeing a head wind. you don't see that? you see it in an orderly way which will allow it to continue? >> that's right. i think the dollar is the secret. i think ba could derail this

global story in inflation, a sharp dollar, not good for the u.s. economy, puts more pressure on chosen through the exchange rate. it's very bad for the commodity producers. that's the single risk. in the last few weeks, we learn a couple things there, i think it gives us greater confidence if that risk is low. one is that we're starting to get a global growth improving in wealth. this isn't just a u.s. source, some of those pressures on the u.s. are easing. on top of that, we are learning from donald trump's comments that actually the u.s. authorities want to try and manage the appreciation of the dollar at the same time. actually, the strong dollar is one of the consensus trades in the market right now. so it tells you there is a lot on the price, a lot of anticipation on the strong dollar. that gives us confidence that a significant slide is unlikely. >> for years, richard the sort of the wild card about global growth was always china.

china, china. because it almost seems like we are assuming we weren't going to get anything too, you know, too crazy one way or the other in the united states. not too bad. not too hot, not too cold. has that shifted now to where the global economy is going to key off the united states and it's no longer going to be china where we have to watch every economic indicator? >> well, i think developed markets are increasingly influential in terms of the impact on emerging markets. so certainly this cycle has been led more by the u.s. but clearly the interrelationships go both ways. i think part of what's encouraging is the chinese data, itself, has actually been stronger than expected. in some signs, particularly the end of 2016, cone ended on a firmer note than people expected. if you go back to previous comments, the decline in some of

the risks facing markets over the last few months. you go back to february last year the key risk the real concern of a hard line in china the real devaluing of the currency, what we have learned since then is the chinese torts have been effective in managing the volatility of their economy, growth has held up better than many analysts expected and they've managed to move the currency much more effectively as well. i think the concerns about china's decline, which means that people are focusing on whether the surprise is coming from. particularly, they're coming from developed markets. but the impact of those are felt on emerging markets, where you see significant updpradz to earnings expectations coming through. >> okay. all right. that's clear, richard. thank you. we appreciate your time this morning from black rock. thank you. >> you did it. i'm watching you, you used paypal, everything, when is my shirt going to be here,?

tuesday. >> it will be in the mail tuesday. you will get it wednesday. >> did you only buy one? >> i only bought one. are you the one who said. he's running against her. >> you probably had one. >> you are going to run for mayor? >> i don't have any. i did use your paypal account. >> you got to pay a large. i will wear that around. because suddenly i'll be like double act. people will be talking, come up to me, what about? i'm going to go along with it. yeah, yeah, this trump. >> he's like one of the tech guys. they pasted a bumper sticker on the back of his car honk if are you with hillary. eight years, nine years ago? and joe didn't understand why everybody was honking. >> i was waving. >> anyway, when we come back the dow 2,000 to dow 20,000. check out this chart since the index closed above 10,000 in march of '99, shares of this

company are up more than 10,000%. investors are ready. we'll be right back with the answer. my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet? this car is traveling over 200 miles per hour. 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. what witi'm stressed,e horse? trying to figure out this complex trade so i brought in my comfort pony. well you could get support from thinkorswim's in-app chat so you don't need a comfort pony. so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.

>> welcome back, everybody, the dow is grabing the headlines, deidre join us, good early morning to you. >> very early morning to you as well. becky, now, since dow's 10k, the

same basket of stocks has massively outperformed the grey chip companies. they are a basket of older tech chance that went public in 1990 or earlier. since 2009, okay, 950 saying versus 130% for the grey chips. this chart shows you their performance t. basket of legacy names, returns nearly five times that of the bank. and the old guard could be key to whether the markets can move even higher from here. now older stocks like advance microdevices have been given new life as a semi conductor space, surms on the back of tech no logical advance ps, artificial intelligence and it's worth noting, too, a few of the great ceos codes ed up to the

administration, trump's business advisory team. >> that i do sister the president's ear. now both of these stocks have been some of the biggest winners since the election as the gray chips continue to outperform the banks. guys. >> lock. thank you for that, deidre, we appreciate it. before we want to break, we wanted to ask you which stock is up more than 10,000% since march of '99 when the dow first closed above 10,000. can you guess? anybody want to take a gander? >> i can guess. it's on the screen. >> don't say it. >> it's on the screen. now it's on the screen. yeah. you can see is that when you look up and we're live, can you see what's on the screen. >> first it was in the proctor t. answer, of course, is apple. while the tech giant was added to the dow in march of 2015, it's one of the best performers. joinings unthis and more.

good morning. >> good morning. >> where does apple have to run in this crazy game? >> so apple slightly out performed the s&p last year. i look for the company return to growth in the december quarter. >> that means iphone will grow in fiscal '17 and ''18. all the fears that idoniphone ct grow. >> is there a trump effect issue when you think of in terms of the overall economy and the fox con, whether they will be manufacturing here? >> it's a great question. a couple things, number one, repatriatation will be huge with $216 billion overseas, so they can bring that back. i am a big proponent of hiking the dividend to 3.5 to 4%. >> is is that what you are

saying they will the? >> i think they should hike it. there will be pressure to bring manufacturing back to the u.s. if i were apple, i would bring wlefr they want to bring back through the repatriatation. they can market iphones made in the u.s. in terms of premium. i'd make an entire marking campaign. you can boost your markets if you did that. >> by how much? >> well, you know, maybe 100 $200. >> you think people will pay more for the exact saim same phone? >> a special edition made in the america icell phone. >> doesn't it bring up the points the rest around made in the usa? would you highlight that? >> i think as the tone out there is changing, there is probably a market. >> this is a big market or is this some kind of weird super premium market? >> apple still manufactured thely lion's share overseas for

sure. there will be some production to bring some back to the u.s. if i were them to macup for that extra cost. can you market a special edition made in usa the implication is? >> well, if there's going to be border tax, then that's something that will have an impact on them for sure. so the net-net will be a net-net negative for apple. if everything there's a border tax, everything they manufacture overseas it's a net-net negative. >> because trump is the avatar of tail risk, do you have any tail risk in your equation about a trade war with china and what that does to apple? >> our numbers for fiscal '17 to fiscal '18 are modest. we have not put anything great like the iphone 10 being a super huge hit. and we have not put any huge negative impact from the trump impact. >> could you ever see a day where trump somehow provokes china to the point where china just says, you know, i know

several hundred thousand phones were supposed to leave china today and they're not leaving. they're staying right here for now. >> i don't think so? because both countries need each other a lot. think about -- foxconn, for example, employs a million people on apple products in china, right? >> right. >> we as consumers, a vast majority of consumers in the u.s. enjoy lower prices. so i think when you offset those two, i think both countries are winning based on the way things are set up. and so if there is an opportunity to manufacture certain products in the u.s., apple will probably do that. will it be the lion's share? absolutely not. and as we've talked about before, the mac pro is made in texas. the volumes are very low. but it was kind of symbolic in 2014 to shift production to the u.s. >> okay. thank you. appreciate it. great to see you. >> when we come back, jim cramer live from the new york stock exchange. stay tuned, "squawk box" will be right back.

what are the top performing dow components in the first 100 days of a president? since 1993 american express, microsoft and apple all tend to microsoft and apple all tend to soar.

and they're absolutely right. they say that it's hot... when really, it's scorching. and while some may say the desert is desolate... we prefer secluded. what is the desert? it's absolutely what you need right now. absolutely scottsdale. president trump tweeting just moments ago, it's one of those that ends in dot dot dot. so there's another one coming we doept have yet, i don't think. but this is talking about nafta.

u.s. has a $60 billion trade deficit with mexico. been a one-sided deal from the beginning of nafta with massive numbers. jimbo, down in new york stock exchange. jim, one thing that we thought from 10,000 to 20,000 was 17 years, jim. i was thinking about where both of us were. do you remember? i think you were like guest hosting with haines like every couple of days. >> actually, i had moved to fox. [ laughter ] >> oops. >> do you remember what he used to -- i forgot that. do you remember toss over to me and faber and he'd say let's get over to hair force one, do you remember that? >> oh, yeah. those were the days. those were the days. >> i think we got a shot. that's why. >> holy cow. >> that shows you what can happen to hair -- oh, look at bill griffeth too. wow, that's -- anyway. fox, huh, when did you come back? i forgot about that? let's not talk about that. >> i think it was 2002 when fox

let me out of a contract that was actually quite a strange one. >> i remember there was a fight. >> yep. >> there was a bit of a fight. it was kind of a front page "new york times" fight there. those were the old days. that was before twitter. but i think that the president's tweet about mexico remember nafta was 4-to-1 on the peso. never thought it would get to 21-to-1. many say 18-to-21 because trump's been bashing mexico. but that's the difference. it's the currency. people have to understand it's the currency and manipulation however it happens. >> check out the rest of the tweet. if mexico is unwilling to pay for the badly needed wall, then it will be better to cancel the upcoming meeting. >> really? >> maybe he already knows it's been canceled. >> they have to be adjusted for currency. they never thought it would go to 21-to-1. i think everyone was involved with nafta. president clinton never thought it would go to 21-to-1.

that's what they have to ask. >> i'm sure you'll be talking about this tweet at the top of the hour, jim. see you then. ♪ whether you're after supreme performance... advanced intelligence... or breathtaking style... there's a c-class just for you. decisions, decisions, decisions. lease the c300 sedan for $389 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

dtry align junior probiotic.th digestive balance? so she can have a fraction dominating... status updating... hello-yellow-belt kind of day. get 24/7 digestive support with align junior. the #1 doctor recommended probiotic brand, now for kids. the market.redict but through good times and bad... ...at t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence. we have time for final check on the markets, which if you don't know hit 20,000 yesterday

on the dow. it is indicated up another 26 today, that would extend those gains. the s&p up less than one, the nasdaq also indicated a little bit higher. god almighty, what are you a cheerleader? relax. >> bye. >> make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good morning and welcome to "squawk on the street." i'm david faber. i got jim cramer with me right here. we're live from the new york stock exchange. carl quintanilla off today. take a look at futures of course as we are off that 20,000 on the dow. that statistically meaningless average, but there it is s&p looking up ever so slightly this morning along with the nasdaq of course. how are european markets fairing you ask, we like to answer at