it's tuesday, january 31, day 11 from the inauguration. only 89 to go. what else could possibly happen? "squawk box" begins now. ♪ live from new york where business never sleeps, this is "squawk box." >> good morning. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. u.s. equity futures this morning, yesterday was a down day for the markets. the worst day of the year for markets. you have to keep that in context. the dow was down 0.6%. same story with the s&p 500. still this was the biggest decline for the dow since october 11th. the biggest drop for the s&p 500 since december 28th. for the nasdaq since december 30th this morning you see red arrows again. dow futures down by 42 points

below fair value. the s&p looks like it would open down by four points. the nasdaq down by 11. we should point out with the last trading day of the month, you are still looking at the markets up for the month. the dow is up by 1.1%. the nasdaq up by 4.3%. breaking overnight in asia, the bank of japan keeping its monetary policy unchanged and raising gdp forecast. the boj will continue to buy bonds at the current price. the nikkei was down 1.7%. hong kong and shanghai remain closed for the lunar new year. let's look at equities this morning. right now things are in the green. ftse is the biggest advancer of the major markets. up a half percentage point. cac in france is up 0.3%.

crude oil prices, natural gas has been relatively pubullish. this morning giving back a bit. wti down by 21 cents. brent crude down by 3 cents. deutsche bank has now agreed to pay $630 million in fines to u.s. and uk regulateders for failing to prevent $10 billion in suspicious trades being laundered out of russia. the scheme involved mirror trades between the bank's moscow, london and new york offices. this took place between 2011 and 2015. those settlements are less than the $1 billion that deutsche bank had reportedly set aside in legal provisions for the probe. investors will look positively on that settlement. walmart stepping up its fight against amazon prime. becky quick is a customer of amazon prime. this is for walmart. the company is offering free two-day shipping with a minimum

order of $35. >> that's great. >> no membership required. >> the biggest thing is can you promise it will be there in two days? amazon prime is reliable. >> however, if you wanted it in one day, no such luck. with amazon you can sometimes get the one-day. the new program replacing walmart's shipping pass, which offered free shipping after a $50 annual fee. the company will fully refund those fees to customers. this is the first major move by walmart.com. jet.com was bought by walmart last year. and the u.s. senate advancing the nomination of former exxonmobil ceo rex tillerson, trump's pick for second taretary of state. that confirmation vote is expected early tomorrow morning. lots of interesting news.

interesting news about what he knew, how much he knew about this executive order on friday. some frustrations that other cabinet members are suggesting that they may have, lots of finger pointing back and forth. >> we will talk to eamon about that as andrew mentioned. it has been a busy 24 hours for president trump. he fired his acting attorney general last night. this morning he will be meeting with leaders of big pharma and is scheduled to name his nominee for the supreme court tonight. eamon javers is joining us from washington to wrap this up. good luck. a lot to of ground to cover. >> thanks. >> 60 seconds. >> dramatic developments overnight. let's started with sally yates, the obama holdover who was serving as acting attorney general over the department of justice while they were waiting for jeff sessions to be approved by the united states senate that has not happened yet. so in the meantime valley yates was running the department of justice, she said she could not in good conscious order the department of justice attorneys to defend the president's executive order.

she said at present i am not convinced that the defense of the executive order on immigration is consistent with these responsibilities nor am i convinced that the executive order is lawful. as a result, last night president trump fired sally y yates, put in mraplace his own choice. the white house called her weak, saying she betrayed the department of justice, saying she was weak on several issues as well. ironically, in a confirmation hearing back in 2015, jeff sessions, who will presumably replace sally yates as attorney general, pressed yates on whether or not she should uphold a president's orders if she believed those orders were not lawful? i think we have a sound bite of that moment. let's play that. >> if the views the president wants to executed are unlawful,

should the attorney general o d the deputy attorney general say no? >> i believe the attorney general or the deputy attorney general has an obligation to follow the law an give advice to the president. >> the vote for jeff sessions is sket d scheduled for tomorrow morning. i want to highlight what sally yates said in the memo to the ju justice department employees. she said it was reviewed by the office of legal council, but said their review did not take into account statements made by an administration or its surrogates in close time to the issuance of an executive order that may bear on the order's

purpose and said the office of legal counsel's review did not view whether any order was wise or just. that's the ground she's standing on here that this order was not wise or just. and she wasn't convinced of its legality. a dramatic turnaround overnight for the trump administration. they will have to figure out how to move forward with the department of justice if sally yates feels this way, you can assume there are other people inside the department of justice who feel that way. the trump administration will have to tangle with them in the weeks and months to come. >> you point out carefully that, look, a lot of this is the way she went about it. alan dershowitz was talking about if she was opposed to this, she should have taken the points of law where she could not find this constitutional. her problem by broadly saying don't enforce it sh, makes it a political act. >> she could have taken a couple of actions.

one was resign, i'm not doing this. i resign. in the end, she instructed the department of justice not to follow this order. that, the trump administration said was too much and decided to replace her. the trump administration is in the situation where they are rightly or wrongly, this is harkening back in the saturday night discussion to the saturday night massacre under richard nixon where he fired folks in the department of justice for refusing to fire a prosecutor investigating him. this is a different story because you have an a obama holdover. if the trump administration waited until after jeff sessions was sworn in as the attorney general, presumably they could have avoided this entire thing and all the comparisons that will come today to the nixon administration and that situation. chuck schumer, the democrat from new york already called this the monday night massacre. you can imagine democrats will pounce on what they see as a

political opportunity. >> the echo chamber, people will be talking to each other. it would be so easily solved with you're fired. the attorney general serves -- we give a lot of power to the executive branch. the other case to be made, if you weren't seeing the obstruction, four or five cabinet members in. we know what's going on, fine, they can do that. that's the only reason she was left there. probably a mistake to leave her there in the first place because something like this might happen. both sides will look at it in a different way. those were nixon -- like you said, those were his guys. this is an obama holdout. this is not even surprising that you would get this. >> that's why the saturday night massacre got so much attention in the '70s. this was nixon's own appointees standing up to him. these were people committed to what he was doing. >> how upset was schumer about

the monday night thing? he wasn't -- he wasn't crying again, was he? >> we saw this dispute between the president and chuck schumer over whether he was really crying or not. >> he is so sensitive, i think -- i'm not sure what's going on. we need to handle him in a bit with kid gloves. >> the president suggested he had an acting coach to help him cry. >> this might be even worse -- you know, i don't know anymore. i don't want to see him just full on sobbing. >> right. but now the question is, you know, how are democrats on the hill going to handle this today. what does this do to jeff sessions if anything. presumably republicans have the votes there. we'll have to watch that carefully. >> eamon, i wanted to talk about the people around trump, putting aside the democrats or the holdovers, which is to say there are a number of reports out that suggest that people like general mattis and rex tillerson who will be confirmed, we imagine in

the next 24, 48 hours, they were not involved in this and may be frustrated about the decision that took place on friday and goes to the question of who is really running things inside the white house. also a report in politico that suggested that there were congressional staff members that participated in the drafting of these executive orders without telling bosses and signed some kind of nondisclosure agreements and the legality of those. what do you know about that? >> we have to look into that. i don't know what they signed. it's not necessarily unusual for capitol hill staffers to be loaned out to the executive branch to consult on various items. typically their bosses know it and have approved it. capitol hill is a place where you as a staffer don't do anything without your boss's approval. we'll have to get to the bottom of that. >> do we have additional reporting on the cabinet members or the proposed cabinet members

and their involvement or lack of involvement in the executive order and whatever is going on? >> we know this white house is being run by a closely held group within the white house. close to president trump. and that they did not put this executive order out for a lot of public consumption inside the administration before it was signed. there are altd of reports about who foufrntd ond out about it a. they decided to do it when they had the political momentum, in retrospect given the sally yates issue, they might have been wiser to wait until they had their own attorney general in place before doing it if they s lated that more widely among various folks with experience in government they might have gotten that advice as well. >> eamon, thank you very much. the fed -- the fed -- the fed? we still have a fed? the fed is kicking off a two-day

meeting this morning. also a busy day for earnings. three dow components are set to report. let's talk more about the markets with kathy woods, ceo at character invest, and jim o'sullivan, chief u.s. economist at high frequency economics. somewhere along the line there was a son of a sullivan. do you know how far back that goes? >> many, many, many, many, many generations. >> many generations ago. when did you come over first? which? grandfather? great grandfather? >> i personally was born here. >> you were born here. >> i moved back and came back again. >> just checking. you know -- >> i'm a citizen. i'm a citizen. >> you may need -- just, any way. want to start with you, kathy. you said it makes sense for the markets to have gone up to where they are based on the prospect for regulatory relief, tax cuts. >> yes. >> you think 20,000 is not the

end, it probably has further to go. you have parts of the market that will do better. a type of company that will do better if this happens. can you explain that? >> i think the cyclicals have had a big move based on the tax cuts and the cycle will be much stronger than people expected. what we don't think has been as well recognized is the disruptive innovation that will be encouraged. if you notice, president trump had a technology roundtable and is thinking about innovation. if you listen to his youtube and other media clips and read through, you see he's really focused on innovation and keeping it here. >> so which -- so does that mean we start moving money out of cyclicals or down play? they had a move and are going somewhere else? >> i worry about the political capital that president trump is spending here with this immigration issue. it may delay tax reform into

2018. if that's true, there will be a lot of revenues deferred into 2018. a lot of expenses accelerated into 2017. and a risk to profits. now, will the market look beyond that? potentially. though it's been quite short-sighted recently. >> that does bring us to some concerns, jim. if it doesn't go smoothly we already have gotten -- we played it forward a lot of this positive stuff. you think if it doesn't go smoothly, but i wouldn't call you skeptical or bearish at this point. >> no. even apart from new fiscal stimulus, the economy is chugging along okay. unemployment is improving. when you look at confidence numbers they surged to the point where people are pricing in a true metamorphisus of expansion. i think even the confidence

number comes off from where it is. but in the end, i think it's skeptical with net new finance activity in 2017. >> did you see the kevin warsh piece in the "journal"? >> yes. >> what do you think is to be expected in terms of interest rates? >> i have three moves, like the dot plot, but i think there's more tightening than the fed is predicting, i have four in 2018. >> so not acting like more than predicted, are they. >> the bond market, at this point is pricing in less than the fed is projecting. we'll see how the numbers play out and what the fed does. we're not expecting anything in terms of clarity this week from the fed. they will make this a nonevent. much more importance is janet yellen's testimony in february. >> their forecasts have been wrong-way corridors. >> you can say that about everybody to a large extent.

potentially they're wrong again. just because they've been wrong for one direction the last couple of years -- >> i trust the market more than the fed. >> the markets have priced in more tightening than they were tightening in three months ago. >> all right. >> that's the direction they're moving in. if it was mcsullivan, is that different than o'sullivan? do you know the distinction there? >> often when somebody comes into the country they would drop the "o." >> that would be sullivan. originally, what was mc? that was son of, right? >> i think so. there's some scottish similarity as well. >> scottish? >> yes. >> okay. i'm in dangerous territory here again. ireland, scotland. >> don't bring up the brexit with these two. >> why? yeah. okay. i won't. i won't bring it up. they'll break from the breakers, which means they could stay or something. thank you. thank you both. okay. coming up a busy morning for earnings. results in a bit from pfizer,

under armour, exxon and mastercard. that all is taking place before the opening bell. the report of the day coming after the close when we get the latest numbers from dow component apple. the stock is up nearly 25% in the last year. we'll tell you what to expect next when "squawk" returns. 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

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welcome back to squawk squawk. apple will release quarterly results after the bell today. the tech giant expected to break its losing streak after three consecutive quarterly declines of iphone sales. joining us is the analyst at maxim group. great to have you with us. what are we expecting? will we break the streak? does that matter? >> we're definitely breaking the streak off tough comps of the blow-out sixth cycle. the seventh cycle will be off easy comps. our survey shows positive inflection in china and india. u.s., our survey data, that

shows down overyear, but overpowered by china and india. the key question is what is mark guidance guidance going to look like? i believe we will sustain year over year growth, but as we see in product cycles, it waynes as we go through the product cycle. >> is the iphone 7 a success or failure in your mind? hard to call it a failure given how many of these things they sell. but in terms of your expectations, where you think all of this goes. to a large degree the stock is selling now not on iphone 7 sales but on iphone 8 sales. >> yeah. >> that don't exist yet. >> to me the iphone 7, the data from skyworks, it's been less than what i've expected. that made me take down my estimates a bit going into the earnings call. we see the iphone 7 plus has longer lead times than the

iphone 7. that is going to be a positive shift relative to my expectations as well as relative consensus expectations. it's been disappointing relative to highest mates. >> what does your crystal ball say about the iphone 8 and what's coming in the fall and whether or not that's game changing? >> our survey does not ask about the iphone 8. we don't know what it's going to look like. we ask what are the buying patterns? when will they be buying? which device will they be buying? given that information, it does say we'll have two years of at least sustained year over year growth which is a primary reason why we have a buy on apple. this will blow away the primary scenario of one good year, one bad year. we'll have two good years of year over year growth. and supply chain checks which says the iphone 8 will be a significant departure of the

iphone 7. no home button. an infinity screen. that could potentially be attractive to existing users. >> tim took talked a lot about services in the cloud, recurring revenue. how much of that is becoming a significant part of the business? >> it's still a relatively small portion. >> nothing? >> it moves the needle. >> that's all they talked about in the quarter. >> yeah. i think the primary reason why they wanted to talk about that was to demonstrate their install base continues to grow and why you have volatility in terms of incremental users on a year over year basis which is what they saw in the 6s, they want to prove you are still growing and installing base. ten years ago when you had blackberry starting to see a decline in unit sales, that also started to correspond to weakening installed base. they can't wanted to make a str

point that their installed base is growing strongly. >> did you do a market cap calculation at your price target? >> we had this conversation. >> it's relevant. never been done before. so in your view, within a year, we have the first trillion dollar company and it will be apple. >> yeah. >> all right. you don't have any problem with the large numbers or gets harder and harder? nothing grows to the sky? >> my biggest concern is that will the margins continue to hold up? as long as the margins continue to hold up, we can see a clear path to the year over year growth. >> that's the first time ever. we have to do it sooner or later. people have come in saying they think it's google or amazon or microsoft. if they hit your price target, it will be a trillion dollar company. >> it's promised on multiple expansion here. >> but you can think of other things as an analyst. you don't have to go blindly into ten times earnings. you don't have to blindly do that, right? you think it will hit a

trillion? >> yeah. absolutely. >> if we get tax repatriation and they can actually bring the money back here and do big m&as, any big thing they need to buy? >> i prefer for them not to buy anything big. i prefer for them to continue to invest organically. one key thing i wanted to see them do is up their investment on self-driving car. that could be your next big thing. that's still three, four years away. putting significant investment towards that is critical. >> thanks. >> thank you. when we come back, president trump cleaning house last night firing the acting attorney general, who refused to defend his immigration order. we'll talk to jeff sonnenfeld after this break. first, a look at this week's winners and losers. ♪ the fu ♪ hello darkness my old friend ♪ i've come to talk with you

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welcome back. you're watching "squawk box," live from the nasdaq market site in times square. good morning. look at u.s. equity futures at this hour. things are looking down right about now. dow looks like it would open off 35 points. nasdaq off about nine points. the s&p 500 looking to open down 2 1/2 points. >> with president trump's executive orders growing day by day, managers are facing the balance of speaking up for their beliefs and staying on good terms with the administration.

joining us is jeff sonnenfeld, cnbc contributor. jeff, great to see you this morning. >> great to see you. >> this is the perfect topic for you to be weighing in on. we know that a lot of ceos live in fear of being called out on the carpet of being the subject of a tweet of somebody who will have to turn around and respond rapidly to heat. that brings us to the question of where you think corporate america lies these days. where you think they have room and where you think they're doing a good job. >> we've seen an incredible change just in the last few days. as you know, on this show and in many meetings with ceos, i've been advising them to not rely on the comfort of a shield of collective action through trade associations largely ineffectual, speak their own mind but do it with homework, preparation, showing grassroots legitimacy, don't get into a rosy o'donnell mudslinging thing with the president.

he can often deal with a counter opinion quite well if it's based on facts and you're not insulting him and giving him philosophy, he's pragmatic. that's been working out well for ceos until this sudden change in the last few days. i heard from 36 major ceos in calls, e-mails, andrew had a piece in the "new york times" talking about how much is going on back stage with a frenzied concern. we're seeing individual ceos now speaking out on issues that are not relevant to their company alone. of course, tim cook of apple, howard schultz of starbucks, jeff immelt of ge, lord blankfein of goldman sachs, mark field of ford. these are not flame throwers, these are sensible, grounded folks. i have not seen the business community this charged up since section 404 in 2002 of

sarbanes-oxley or t.a.r.p. >> part of what you bring up is the idea of how you approach this, to do it with facts, quietly probably? i would guess a lot of what is happening is happening behind the scenes because if you try and take him on with an open letter, i don't know how effective that would be. one ceo did said in the meetings that this person had with him, he listens. that's a little different than what they've been used to with the ceos have been used to with presidents in the past. >> yes. as i reminded -- i met with -- talked with president trump now about three weeks ago friday when he still had a transition team that was active. i wuas reminding him that i was the first, 18 months ago, except for anybody ain his family, i ws the first to support him.

he seemed to get that. we talked about the taking charge process. this is a terrible taking charge process. he's much better than this. he's been misadvised by a small group of advisers that are playing to some instincts that are not working out well. you know, the old cliche about new broom swooping clean, that's an old arastafarian proverb. new brooms sweep clean, but old brooms know the corners. being able to pick out the nuances here is critical. the blizzard of activity of these 20 different executive orders in the first ten days of president obama closing -- announcing he will close gitmo, we still have it open as a detention center, there were only six executive orders in the first month that obama had there. you take a look, there were presidents, founding fathers had one or two or three executive orders through their entire administration. >> jeff, to the issue about ceos

and whether they're supposed to speak up or not, how you are advising them to do so and one of the issues that i found and i think many ceos feel like they're confronting, especially those that have access or think they have access to trump, some of whom will be at this meeting on friday at the white house with him, some of them want to speak out, but are anxious about how to do so. everybody seems to have their own reason for doing so. you talked about ford, ford employs a lot of iraqis in detroit. howard schultz may seem obvious to you in certain ways. tim cook in others. but other companies like gm, marry barra has not said anything. sort of the push/pull about whether there's more benefit to being in the room and maybe being able to say it in that room than being able to say it on twitter or even to their

employee employees. >> i think that you were right to list out the companies as you did in your piece this morning, andrew and reiterating now. but the people who have spoken out and who have not yet spoken out are speaking out in one way or another. at least every ceo is taking to other ceos. they're concerned about their internal employees, customers, and the stand that most of them are making -- most of them, perhaps most tepid of all is elon musk saying to president trump let me rewrite that executive order, they're trying to find a way to find a positive, constructive tone saying i get what you're saying about fair trade or i get what you're saying about border security or i get what you're saying about burden sharing, whether it's nato or finding some kind of safe zones in the middle east to share the burdens with wealthy nations there. we understand that. but the negativity of this tone,

the messaging that is going out is coming out as a negative portrait of america or this company. they're trying to say here's what we stand for. in terms of execution, any ceo that we know and frankly any of our successful transitions as commander in chief, the first step of the taking charge process, something called taking hold, people do small things that are inconsequential, you watch how people react to it. those who didn't, remember in bob woodward's book, he t critiqued clinton for doing too much too soon. he said it was like a bunch of children chasing a soccer ball down the field. it's too much too soon as people were complain being clinton's taking charge process. my goodness, the host of issues here. we don't even have people in the key roles. to not have senator bob corker or john cornyn, the majority

leader of the senate, the head of the foreign relations committee saying we were left out here, we just met with him on thursday. not to mention homeland security john kelly having to correct unclear messaging, or general mattis, fantastic defense secretary -- >> jeff, trump is tweeting this morning saying when will the democrats give us our attorney general and the rest of the cabin cabinet? >> let me finish it, please. >> joe, you said i had the b block. >> i know that. >> i heard you say that. everybody else was in makeup. >> exactly was i referring to. >> to our listeners, joe insulted me while everybody else was getting their makeup on on the early introduction -- >> that wasn't an insult. that's why we book you. we had 12 minutes to kill. that's one question typically. they should be ashamed of themselves, no wonder dc doesn't work is what he said. this begs -- this gets to the question. he's not going to be -- he doesn't care what they said to

clinton. i didn't think there's many ceos in the basket of deplorables either. i think you saw the rasmussen poll, 57% of the people are actually agreeing with the immigration order. ceos have a different c constituency to satisfy. customers span the entire political spectrum. do you know for a fact that there is no ceos that agree with the security concerns addressed in the executive order? they couldn't possibly come out and say they agree with it. i don't think we should assume every one agrees with you and they're afraid to speak out. >> that was an entire b block question. but, yes. >> it's not a question, that's just trying to push back on the filibuster. >> it was a statement. it was a deflection statement because the issue we were talking about is the implementation not about security. sure, we're in favor of security and these other great issues. i think president trump is

addressing some very important issues and stepping into office. the anonymity in the business owner community. the rasmussen poll asked are you in favor of the border security travel concerns but not the implementation. we're not waiting for the democrats to ratify john cornyn to become head of the foreign relations committee or bob corker and john cornyn to be majority -- they're already in position, they're republican. why were they ignored? the expertise, why is it being ignored? why do we see joe dumfort taken off the national security council? there's a principle agents committee, he's not on it anymore. dan coates, the new head of national intelligence director is taken off of that, dumford is brilliant. incredible. nobody better in uniform out there. this has nothing to do with democrats.

>> now we're in the c block. jeff, now we're in the c block. now we have gone from the b to the c. that's okay. we expect this. >> it's okay. i have your daughter's application right here. that will give me more time. >> jeff, thank you very much for joining us. >> that's a separate issue. that's a separate issue. hold on now. >> c block. >> love you, jefferson sonnenfe. >> that's low, jeff. that's low. nobody would have brought that up. that was like 5:00 in the morning. thank you, sonnenfeld. much more on president trump's immigration order, the heritage foundation james carafano joins us at 7:30 eastern. he's been working with the trump team on foreign policy and homeland security since last summer. later, ari fleischer weighs in

on tonight's supreme court announcement. and the 100 days of which we only had 11 so far, a few things have happened. "squawk box" will be right back. this is where i trade andrs. manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. what's critical thinking like? a basketball costs $14.

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time for the executive edge. starting with some stocks to watch. nintendo reporting an increase in net profit driven by strong sales of the new pokemon 3ds game. the weaker yen boosting overseas profit helping the gamemaker increase its outlook for the year. and h & m posting net profit above expectations. it's a swedish fashion giant. sees higher sales in nontraditional market and the opening of hundreds of new stores. and werner enterprising posting better than expected earnings. still they say 2016 was a challenging freight year for the logistics business segments. .

. >> some headlines with pfizer, adjusted earnings of 40 cents a share, street looking for 50 cents a share. still waiting for the actual press release on that. it looks like the bottom line would be three cents shy of the street's expectations. >> that's a big miss for a company like that. that's the only numbers we have. what was the other number? >> 13.6 right in line with expectations. so the revenue number is where the street was expecting. they do talk about the essential health revenues being down 8%. again, revenue overall came in line with expectations. >> no outlook? >> no. just see that for 2017 they're looking at adjust the r & d expenses of 7.5 to $8 billion. these are headlines moving on the wire services.

>> yeah. okay. that looks to be right. sees fiscal year, they have some fiscal year adjusted eps of 2.50 to 2.60. is that the four-- >> what was the number again? >> 2.50 to 2.60. >> next year is the expectation of 2.56. >> that makes sense. stock is off a bit, i guess. down about 1.3%. here's what's coming up on today's agenda the fourth quarter employment cost index is out at 8:30 eastern time. that will be followed by the case-shiller home price index at 9:00 a.m. january chicago pmi at 9:45. consumer confidence at 10:00. the fed begins its two-day policy meeting, that statement is due tomorrow at 2:00 eastern time. mastercard and u.p.s. before the bell.

after the bell, apple has theirs. the president has a meeting with pharmaceutical companies. he said earlier this month that the farm suipharmaceutical comp were getting away with murder. >> there had been questions about whether or not the trump administration would remove the obama executive order that protected the rights of the lgbtq community in the workplace, the white house statement saying that president trump says he will enforce that executive order. >> ari fleischer tweeting that out, i think, earlier this morning. >> he will be joining us at:00 a.m. >> was saying on twitter that he thought that was a good thing. coming up, real estate investment trusts or reits have generally lagged the trump rally. but could be set to rise if trump's tax and infrastructure plans boost the economy.

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welcome back to "squawk box" this morning. one of the major business concerns around president trump's immigration ban is what it could cost workers and companies in immigrant rich fields like science and

technology. joining us now is a ceo whose office buildings are filled with high-tech workers in the life sciences. we want to welcome joe marcus. the company reporting fourth quarter and full-year results yesterday, which we want to talk about. before we talk results, real quick, to the extent that this immigration order has any impact on your business or people or calling back and forth, what are you thinking about? >> first of all, it's a -- the refugee halt is banning syrian refugees indefinitely. i guess refugees from seven countries for about four months. so i think people are going to have to take a wait-and-see attitude. it's also balancing the need for safety. we lost a navy s.e.a.l. over the weekend in action in yemen. i think people are going to need to sit back and just take hold -- >> but are your clients some of whom have been outspoken talking to you about this issue?

>> certainly. life sciences worldwide business. you recruit the best scientists to come to the u.s. people are a little concerned about the ease of difficulty of trying to get people into this country who have unique technical skills. >> we've talked to a number of pharmaceutical companies in your buildings and are going to be meeting with the president today. i don't know if you heard the tease, but i mentioned that he has talked about them, quote, getting away with murder and wanting to renegotiate drug prices. what do you think long term -- when you sort of look out and talk to your clients about margin, margin compression, what it does to their business, both on the poisetive side and neg ty side, how are you thinking about? >> i think you have to remember, we have the people who have gathered the most attention, which we consider to be kind of the few abusers versus the research-driven companies. i think merck just issued a transparency report on their

drug prices since 2010. they're only up less than 10% on a yearly basis, whereas some of the abusers who have not -- who have financially engineered drug price increases have not really done that great a job. so i think the industry itself probably needs to do a much better job, go back to the days of roy, who was the most admired ceo. merck was the most admired company. i think the companies will step up with good leadership and begin to, you know, let the president know and let the american people know that this is a critical industry. we've got 10,000 diseases, and we've only actually solved about 500. so a long way to go. >> how are you changing your business to the degree you are as a function of the new president? in terms of his infrastructure planning, tax implications. >> sure. well, i think one thing is true that if pharma and biotech have repatriation, that ability, they bring back something between $100 billion and $200 billion,

which can be reinvested in the business. some of it might go to dividends. pretty good opportunity. >> all right. thank you very much for coming in today, joel. >> pleasure, becky. >> thank you. we got to run. when we come back, a busy day for the marks. the fed kicking off a two-day policy meeting. we'll talk strategy right after the break. and later, president trump set to announce his supreme court pick tonight. former white house press secretary ari fleisher will join us. he'll weigh in at 8:00 a.m. eastern time. you're a rabbit?let me get th. im vern, the orange money retirement rabbit, from voya. riiight. and that means...? i'm the money you save for retirement. i help you get organized so your money could multiply. see? got it. who's he? he's green money for spending today. you know, paying bills, maybe a little online shopping... makes it easy to tell you apart. that, and i am better looking. i heard that. when it's time to get organized for retirement,

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u.s. stocks coming off their worst day of the year. can the bulls battle back on the final trading session of

january? we'll try to figure out where you should be putting your money to work. plus, the results from the latest cnbc fed survey are straight ahead. president trump fires the acting attorney general who defied his immigration orders. we'll hear from the man who helped build the president's policy on national security. plus, under armour's quarterly results. a look at the growing competition in the athletic apparel space. will a border tax hurt the company's plan to stay in the game? we'll find out as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." good morning. welcome to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. the futures at this hour are looking in the red after what was a tough day yesterday. the toughest of the year thus far. dow looks like it would open off about 45 points. nasdaq would open right about

now about ten points off. the s&p 500 would open down about 3 1/2 points off. let's get to some of our headlines this morning. technology leaders continuing to speak out against trump's controversial immigration order. amazon ceo jeff bezos sent an internal memo saying that employees affected by the ban will have the full extent of amazon's resources behind them. amazon also joining up with expedia to take legal action against trump's immigration order. the washington-based business filed sworn statements as part of the state's attorney general lawsuit against the president. in the meantime, president trump firing acting attorney general sally yates last night after she directed lawyers not to enact the immigration order. and we are expecting a supreme court nominee this morning. if confirmed by the senate, this lifetime appointment post would fill the seat left vacant by justice antonin scalia when he

died last year. the supreme court now operating with just eight justices since the senate declined to hold hearings on former president obama's nominee merrick garland. there appears to be two finalists, neil gorsuch and thomas hardiman. >> our audio guy used to have a button. you're fired. but it's too flip, i think, to use now. >> too on the nose, as they say, today. >> because it's the president now. but i think we have "celebrity apprentice" reruns. whenever we'd say you're fired, we could press a button. i don't want to do it though. >> what's the schwarzenegger version? you're terminated? >> it's not i'll be back. you're terminated. anyway. i don't think we can use it. >> we could use the you're terminated. >> maybe. but we're talking about trump firing -- meantime, senate committee

advancing the nomination of exxonmobil ceo rex tillerson. it happened late yesterday. he, of course, is president trump's pick for secretary of state. we expect a full senate confirmation vote on tillerson to come early tomorrow morning. hey, sorkin. so the hardiman guy, 95-0, including schumer and everybody else. that doesn't mean he gets -- i mean, would you do it because of that? 95-0 when he went on the appeals court. >> you could say the same thing with merrick garland. that didn't work either. >> so who do you think? any insight? >> no odds. i'm not handicapping. who's going to get the gig? i have no idea. >> okay. let me ask you this. are we going to hear about it before 8:00 p.m.? >> you will hear about it around 5:00 p.m. >> are -- 5:00 p.m. this is why i ask you things. a way to roll it out.

>> the complication of doing it at 8:00 p.m. makes it a little too late for the newspaper business. they might have to advance -- don't you think? >> newspapers? what newspaper world are you living in? most of us work very late when it comes to print. >> early deadlines. >> not for the first editions. >> you'll see the cartoons. a gaggle of reporters, something else happens, they move over like that. does that happen tonight? >> yes. >> so it goes from immigration to supreme court immediately? >> it will probably be on something else by noon today. it's 7:00 something. he hasn't tweeted. he can change the whole game in the next five minutes for all you know. >> so he has two personas. he does the @realdonaldtrump sometimes, and the potus. >> i haven't figured out what it

is. >> you think it's a difference in tone? >> that's what i'm assuming, but i'm not sure. do you know? >> i'm not sure. >> okay. >> oh. the nation's top economist, market strategists, and money managers responding to the cnbc fed survey over the past few weeks. the results are in, and here we are to introduce him. he's been here the whole time. >> interesting stuff here. let me dispense with the special stuff. 41 economists and managers surveyed. 98% say the fed is on hold this week. another 100% say the next move will be a rate hike. let's talk about where it gets interesting. normally we don't show you this chart. this is the distribution of answers of when that next rate hike comes. you see the 43% who say the next hike is in june. that's moved back from where it was in may. but what's interesting is the distribution. if you look to the left at those

yellow bars, more than 50% are saying it could happen earlier than june, with some folks saying keep your eye on march. so a possibility out there in the market of an earlier rate hike. moving on to the next chart, the number of rate hikes and what's happened is that has steadily moved up. the first bar up there is november before the election. looking at just two. after the election, we went to the halfway house. now we're very, very close to pricing in three. what's interesting about that is i don't see the bond market or even the fed funds futures market pricing in that third hike. it's a quarter point. it's not dramatic. but it shows there's some adjustment to do. finally take a look at the next chart, which is the fed and the market, or the survey and the fed. if you remember this, for a very long time, the survey was correct. it was below the fed. now these guys are all in agreement about the trajectory of rates for quite a while and we'll see if that's what pans out. finally, one more thing, which is finally the balance sheet is in play. if you look at this chart,

you'll see 67% expect the fed to reduce the balance sheet by the second half of 2018. that's up 52%. and 40% think it could happen this year. the fed has about a $4.5 trillion balance sheet. it holds a lot of mortgages, a lot of treasuries. there's some thinking about that inside the fed right now, but i don't think they're quite as close as maybe the market is pricing in. but that's an issue we're going to have to start to think about. does the fed start to reduce the balance sheet and how the bond market would react. >> what did you think of the piece today? >> what did he say? >> he said a lot of things. >> kevin has been a huge critic. >> it's about 10,000 words. >> he gets a lot of space. is he writing with stan or by himself? >> by himself. >> america needs a steady strategic fed. >> just so you know, 74% say yellen will not be reappointed by donald trump.

the number one pick remains john taylor, when we ask people who will replace her. but kevin is up there as well. kind of on the young side and not necessarily a monetary policy expert. he did spend -- do work during the financial crisis, understanding the banking system well. >> i think he's been focusing on the markets extensively. >> and the relationship between the markets and monetary policy. >> gary cohn. >> for the fed? i live too much in the world where it's hard for me to see a person who's not a monetary policy expert to be in charge of it. i could see there being more people who are investment bankers, more people like that on the committee. >> i thought the dark horse was santelli. definitely not rick santelli. you're not hearing that? >> i've not heard that. i think it's a possibility. i like richard cla rrida.

a lot of people have taken -- gotten their knowledge about monetary policy from him. >> can wie do under armour? i don't know what's happening here. >> bad news. the stock is falling. >> it was a $46 stock. it closed yesterday at 25. it's indicated down in the low 20s now. 23 cents. i'm trying to figure out -- this is like -- i don't know if it's your thing, sorkin, or not, but 23 is below. revenue is below. chief financial officer is leaving the company due to personal reasons. >> by the way, this is a huge surprise to see something like this from under armour, which has delivered better than expected earnings and earnings growth and revenue growth every single quarter. managed even through the financial crisis to continue to build on this. this is why this is such a huge shock to the street. one of the things they mentioned is the big issues in the retail environment.

i'm trying to figure out what that means. i'm guessing sporting authority and the bankruptcy there. could have really thrown a wrench into things for them, that they have to continue to maneuver through this. again, just reading through a lot of this as it's going out. they talked about numerous challenges and disruptions in north american retail, tempering their fourth quarter results. they say for the longer haul, they still think they're going to get back in for 2017 outlook. i'm just digging through. looking forward, our success track record of redefining performance gives us great confidence that the opportunities for long-term growth at under armour have never been greater. this is kevin plank saying this. they say the current environment represents an inflection point to maximize our unique strengths by staying ones on, investing smartly in innovation, deepening our brand cech with consumers, and amplifying our operations on excellence. you figure they must have to find new ways to really reach the consumer with some of the traditional retailers having such struggles.

>> it's definitely a 52-week low. i don't know when the stock last traded at these levels. 46 was the high. let me see. go back a little further on this to see. it's been a while. i don't know if it's ever been this low, actually. >> we're going get an analyst and talk about it. again, i also think the cfo leaving -- >> that's why i ask you. >> no, i agree. it's a strange thing to put in an announcement. >> a big miss. the stock is down. >> nlts as an investor you look at this and say they've thrown the whole kitchen sink together. >> get it all out. >> one foul swoop. >> perhaps. it will be interesting to hear from kevin plank. in the meantime, let's talk about the markets.

j.r., let's start with you, talking about what steve just mentioned with where we're headed with the fed. we've got this meeting kick off today. what are the bond markets watching? what are you expecting? >> bond markets have built in two to three rate hikes this yore. the issue really is the timing. at s&p, we don't think the timing is going to be this week. we think it's going to be down the line a little bit. keep in mind the fed's got a lot more to look at than it did at the end of last year. it's got to look at president trump's rollback plan for regulations. got to look at taxes and all that could spur the economy much faster than the fed expected. >> i guess we wait on the time lines. is that one way of saying nobody really knows what's going to happen at this point? >> it's very hard to predict. even bob dylan said don't speak too soon because the wheel is still spinning. there's a lot more spinning now than ever before for the bond markets. we've got to watch a lot more of the risk-off trade going on.

the fed's got to be concerned about the dollar and the strength of the dollar. >> what do you do in the meantime? >> well, i'd personally like to look at the other credit asset classes in the fixed income space. there's more yield in the investment grade bond market. that bond market is seeing strong demand, both domestically and globally. the u.s. high-yield market is still holding with good demand. we're beginning to see spreads wide. >> jeremy, how about you. we keep saying yesterday was the worst day of the year for stocks, but the stocks were only down by about 0.6%. really not too much concern. how do you weigh it all? >> yesterday's move was quite small in the context of normal market selloffs. we're still less than 1% below the all-time high. at the end of the day, what matters is earnings. we're seeing two things develop that are very positive. one, current earnings trends are good as of the third quarter of last year. we were still seeing earnings

flattening out and stalled for five consecutive quarters. this quarter, we're about halfway through earnings season and tracking to be up 7% or 8% year on year. this will be the fastest growth from an earnings perspective since the middle of 2014. revenue growth is coming back. >> so we're at these heightened levels, but you think there's justification. >> current earnings are doing reasonably well and are healthy. more importantly, forward looking estimates are holding up very nicely. the prospects for tax reform could be a game changer for earnings. we don't know the timing. we don't know the components. we don't know how it's going to be structured. most likely, we're going to see some form of tax reform, if not this year, next year, that's going to be added to s&p 500 earnings. this could add as little as 4% or 5%. >> j.r. just said he likes some of the corporate offerings. what do you like in particular?

>> so within the equity markets, we like u.s. equity markets versus the rest of the world. also, within the u.s. equity market, we like energy, we like tech, we like financials. tend to have a bit of a pro cyclical tilt. >> great. jeremy, j.r., thank you for joining us. >> thank you. >> thanks. >> when we come back, president trump signing an executive order to slash regulations. we will talk about the move and what it means for business right after the break. plus, under armour ceo kevin plank meeting with the president just days ago to get insight on the administration's policy objectives. we'll talk more about the company's quarterly earnings. that stock under some extreme pressure this morning. it's down by about 20%. we'll talk more when "squawk box" continues. ch p..

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welcome back to "squawk box." this morning, president trump signing an executive order to start rolling back regulations.

we want to talk this morning about what we imagine will be trump's policies. we still don't know. what's the top issue in terms of the agenda that you think is game changing? is it a tax piece, or is it a regulatory piece? >> i think longer run it's a tax piece. the reason that's the real game changer is because we know that's the most broken part of what's happening today. the corporate tax code is really complicat complicates. it's leading to inversions and is a real problem for u.s. competitiveness. the other piece of that is there was actually consensus. the democrats know it's broken. the republicans know it's broken. and there's a real plan, the brady/ryan plan. >> we seem to have a big question around this border tax. >> absolutely. and i think it's significant. in short, what the brady/ryan plan does is try to implement the tax via the corporate sector. we've never seen that happen before. they do it via these border tax adjustments. the real political attraction is

he can recharacterize those as protection. in reality, they're just border tax adjustments, like when you travel to europe and you get a rebate when you leave. the truth is we don't know what's going to happen in that kind of scenario. >> what are the economic implications of a border tax, both in terms of cost of product in -- so if you're walmart, you have a worry -- or if you are gm or, let'schrysler. a lot of product you're making in mexico and canada. does that impact the business in the united states and the employment base in the united states? meaning, you know, the goal is to create more employment in the united states. to some degree, i've heard arguments it will hurt. >> i think that's exactly right. what's going to end up happening is if you're an exporter, you're going to have a lot of losses. you won't be paying taxes as far as the eye can see. if you're an importer, you'll be paying a lot more taxes. that can be reversed by exchange

rate movements. that's a lot of urn certancerta the corporate sector. you're going to see mergers. we may end up with the same problem we have today. it's a risky move with unclear gains. >> and how should we think about the dynamic scoring of all this? the other piece of it -- fing you talk to a larry kudlow, if the border adjustment tax is taken off the table, meaning you're going to lose the trillion dollars in revenue you gain there, it may very well be tax policies still push through with just more aggressive numbers in the model in terms of the dynamic scoring to suggest we're going to make more money to try to claim it's revenue neutral. >> you're right. there's a great deal of budget gimmi gimmickry going on. we run a trade deficit today. so over the next ten-year window, that trade deficit persists. that's a trillion dollars.

if we were running a trade surplus, it would cost a trillion dollars. so it's really gimmickry more than anything else. >> if you were called down to the white house to talk to the president, you would tell him what? >> that what we considered a radical corporate tax reform a year ago, which is a lower rate is still the way to go. you don't need to do a tear down of the tax code in order to accomplish something really positive. >> what kind of rate do you get? >> you can get as low as 25 perhaps. and perhaps lower. we maybe should look past revenue neutrality within the business sector as a way to think about this. that's going to hamstring us. if we do a massive consumption tax through the corporate sector just to avoid, you know, revenue neutrality in a more modest, corporate tax reform, that's really the tail wagging the dog. >> and if you were to get on the regulatory side, what's the one piece you're looking at? >> i think the most important thing is that the approach currently seems to be blunder bus. put in one, take out two. that's not the way smart regulatory change goes, even if

you don't like regulations. you need to be much more surgical and thoughtful about what you want to remove and what you want to implement. it's also easily worked around. one regulation versus two regulations. craft them narrowly, craft them broadly. it's a nice political gesture, like many things we've seen in the last couple week, but substantively it doesn't make a lot of sense. >> come on back. great conversation. >> thank you. coming up, the world is reacting to president donald trump's executive order on immigration, which blocks refugees from seven majority muslim countries from entering the u.s. we'll speak to one gentleman, james carafano, of the heritage foundation. he recently wrote an article in support of the president's executive order. that interview is straight ahead. as we head to break, here's a look at january. the market returns as we wrap up this month. pretty good month. maybe it'll happen again, as january goes, so goes the year. stay tuned. e tspsss then i wt e rs r r

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still to come this morning, the man who helped shape president trump's national security policies during the campaign.

plus, under armour reporting quarterly results a short time ago. we're going to talk about the company's results. stock is severely under pressure this morning. we'll talk more about that. plus, we have some sad news to report this morning. iconic singer and song writer john wetten of the band asia has passed away. the band saying he died in his sleep overnight. he will be missed. "squawk box" will be right back. n

♪ good morning, everybody. welcome back to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. among the stories that are front and center this morning, under armour shares are under severe pressure this morning after the company posted lower than expected sales and announced its cfo will step down. the company is being hurt by intense competition and slowing growth in north america. they also pointed out this incredible retail environment. sports authority filing for bankruptcy. i'm guessing that had to have a big impact on things. that stock is down by almost 30%

this morning because under armour is a company that routinely outperforms, routinely beats expectations, delivers growth, even during the financial crisis. this company is one that was continuing to bring in higher and higher numbers, even as the american consumer was under so much pressure. so this is a huge surprise for the street. shares of rival nike, take a look. let's see where they stand this morning as well. nike down by about 2.8%. has to be some questions as to how its business is going to be hurt by the retail environment, how much is under armour specific, how much is a broader move for the consumer. also, harley davidson earnings and revenue missing the mark. harley now says it sees shipments for this year to be down to flat. coach beating the street on both the top and bottom lines. the company cutting back on discounting in the united states and selling more handbags in china and japan, and that stock is up by 1.5%.

pretty interesting news right now. the head of president trump's national trade council is acc e accusing germany of currency exploitation. some comments in "the financial times," arguing the euro is, in his words, like an implicit deutsch mark and germany is using the undervalued euro to exploit the u.s. and its eu partners. >> we've been saying that for years. so true when you have all of southern europe to hold your currency down. you know what i mean? >> peter navarro has been saying that for years. >> it's one thing to say that as part of a campaign or as an outside economist. once you have your white house hat on, does it change the dynamic in terms of the diplomatic relationship that we have or don't have. >> but andrew, how much of the german economic miracle is purely -- >> a function of exports? >> a function of that. and their gain is one of the reasons the rest of the countries are in such dire --

you know, that's part of the whole problem with the way the eu is set up. i've already said let's get him back on because he does speak the truth. hopefully we'll be able to get mr. north america ravarro back . our next guest is james carafano, who recently wrote an article for "the daily signal" in support of president trump's executive order on refugees. james, thanks for joining us. >> first of all, don't overhype me. i was not a campaign adviser. i worked on the transition team, which is a nonprofit, nonpartisan activity. >> that's good to point out. have you been on any other networks yet? >> oh, yeah. >> in the last couple of days? >> yeah. >> where?

>> cnn and cbs and a couple others. can't remember them all. >> looking for sort of the -- someone that has the opposing view? obviously you've seen the media coverage since friday. >> right. >> you have an outlying opinion. i can't wait to hear it. so can you just give us your rationale? >> fair criticism that the administration wasn't super out there getting out why they did this. you could ask them why they did that. look, so the origin of the executive order really had nothing to do with the campaign promises or anything else. had to do with the realities on the ground. what the realities are on the ground are you had tens of thousands of foreign fighters that fled into iraq and syria to fight for isis. as isis is rapidly contracting and losing their space, those foreign fighters have to go

somewhere. everybody agrees, not just this administration, but actually obama administration had the same assessment. europeans have the same assessme assessment. south asians have the same assessment. where those people are likely to go is into those seven countries. if they try to outflow from there, to go to other places to do terrorist acts, like we've seen in europe, for example, they're likely going to try to do that through visa travel or the refugee pipeline. h this is the opposite of the generals preparing to fight the last war. this was the administration trying to get ahead of what's an emergent threat that every terrorism expert in the world recognizes and to make sure we could can the off the pipelines so foreign fighters don't come from those seven countries to the united states. >> i've heard a lot of things that when i heard it on face value, they seem to make sense, like you know, we go back to september 11th. thae they were saudis. or a real threat are from people

already here that are in these cells supposedly. those are the ones we need to worry about. but i don't see how you can deny what you just said, that if there's a way of preventing -- if there's a wave from syria or that part of the world, are you surprised about the backlash we've seen so far? >> no. i think this was very predictable. ironically, if people were just calm and relaxed, if you look at all of president trump's executive order, this one actually probably departs least from all the obama policies. it's only marginally more tough than the visa policy that obama had for those seven countries. on the refugee front, it's a temporary suspension to review the program. oh, by the way, both obama and bush did temporary suspensions to review refugee programs.

so i think it's really all about the politics and not about the substance of the program. even the worldwide backlash, that's the world responding to our vitriol here and picking up on that. that's not them actually seeing a problem. >> how much of this is about the policy itself versus the implementation of the policy to the degree there were people on airplanes while this took place and literally the fence came down, if you will? in terms of the implementation, do you have any problem with the implementation issue? >> well, certainly i don't think the administration did a really good job of rolling out its justification. one is i think they don't care. i think right now they want to demonstrate that they are putting their stamp on government, and their priority is rolling these things out. the other thing is on january 20th, they own this. i think there was a great concern that if there's a terrorist attack on january 21st and our defense is well, we just did what the last guy did, that

wouldn't hold up fup very well. i think they felt a responsibility to get their program in place. >> i think the larger question, it's not the policy itself so much as could you have slow walked people into the country for the next 120 days or 90 days as we figured out what the policy should be? could you have done it in a different way that wasn't as, as you said, visit rtriolic. >> i think those are fair questions. one is i think this would have been highly controversial regardless of when they rolled it out. this is the perfect thing for people to yell and scream at. that i think is very predictable. there's always friction when you do these changes. congress implemented changes a while back. that created friction and confusion. obama did some changes. every time he made changes, it

created conflict. why are we so focused on this? the other times we just didn't pay attention to it. there's always somebody stuck at the airport. to the administration's defense, it's very hard to do these things in a frictionless manner. i think their concern was there's a terrorist flow coming, we want to stop it. yes, some people might be inconvenienced. we can figure that out. we can change the policy and get somebody on the plane the next day. if somebody's killed in the united states because we weren't on watch, that's a much more unforgivable sin than somebody being inconvenienced. >> james, to be absolutely fair, when chuck schumer cries because of something, that's not crying because of the way it was implemented. when it's conflated with a muslim ban or when people say it's absolutely based on religion, not based on where it's coming from, that's not based on the implementation. when howard schultz writes, you know, a 15-paragraph

sanctimonious -- which you called heroic, but he didn't mention implementation a single time. it's all about the moral issue. i disagree anyone is talking about implementation. they're talking about the policy itself from a moral high ground. >> well, to be fair, i think people have gone on to the implementation issue because they recognize that the constitutional complaint and this is completely disproportionate, that that argument doesn't really hold water. so people have moved on. these are big boys. they knew what they were getting into when they wrote this policy. they knew everyone was going to hate them, and they did it anyway because they thought it was the right thing to do for national security. >> and there's some truth to that as an outsider, i don't owe anyone anything, i'm just going to do things, scorched earth, and i'll suffer the consequences and sue me, i guess.

i just don't see anyone weeping because, well, i really didn't like the way it was implemented. you know what i mean. schumer. schumer is not talking about implementation. he's talking about the overall moral -- >> yes, yes. but i'm suggesting that we wouldn't even be having this conversation this way if it wasn't -- if it was implemented in an approach that seemed more just. >> i'm not seeing that. instantly, once the order was published, people started running to the airports and protesting. there were implementation issues, but the cow was way out of the barn down the street before anybody found a problem. >> they had their protest clothes on. they wore the same ones they wore the week before. >> this is just another issue to protest. >> exactly. all right. james carafano, thank you for being with us this morning. >> thanks. coming up, we're going to discuss it. under armour results are out. the street reaction, which is

not good. the company reporting a short time ago. the stock under a lot of pressure on that news. we're going to explaining. at the top of the hour, former white house press secretary ari fleisher is going to join us. a lot to talk about with him as well. check out the futures at this hour. we are in the red. dow looks like it would open lower. you're looking at under armour if the premarket. looks like it would open down 27%. "squawk box" returns in a moment. ererrs agoat stl atst g t aerigh-cotionnv.

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welcome back, everybody. shares of under armour under pressure this morning after reporting some disappointing results. take a look at this. under armour shares are down now by 26%, a decline of $7.75 to 21.20 after closing yesterday after 28.94. joining us right now to talk more about it is susan anderson, senior research analyst and senior vice president of equity research at fbr capital markets. susan, maybe this just tells you a little bit about how high expectations for under armour have always been.

i think it's been 26 quarters running that ua has delivered sales that grew at least 20%. so this comes as a bit of a shock to the street. what do you think? >> yeah, definitely a bit of a shock. but also maybe not so much a surprise given what we've seen out there just in terms of some oversupply in the athletic wear industry and the bankruptcies like sports authority. so i think we are, based on their guidance, going to see slower growth over the next year as we kind of work through some north america issues. but we're still seeing international growth over 50% and then also footwear, which i think was expected to be light, was still very strong, over 30%. so i think those are really the two growth platforms that we're going to start to see take hold over the next several years. >> i guess that's my question. why is this such a shock to wall street? when you look at the retail environment, you look at what's happened, look at the company itself, even offering slower guidance growth they gave back in october of last year, why did

this come as such a stunning surprise? >> you know, still 11% growth this quarter was well below their guidance of 20%. so i think it's probably just the initial shock, but going forward, i do think guidance will prove conservative. they're still growing international, over 50% next year. that's going add almost half of that 11% growth. i think they can easily make up the rest of it with north america footwear and other categories that they're going into, such as outdoors. >> the other announcement wrapped into this is the cfo will be leaving for personal reasons. however, the cfo is sticking around for guidance during this transition period. >> yes, that was a bit of a surprise. he just recently came on board and was well liked by the street. sounds like leaving on mutual terms. we don't know the full story behind it, but sounds like

leaving for personal reasons. good to hear he's sticking around in more of an advisory capacity for some time. >> what do you think about the stock here? the company is going to be able to rough things out over the long haul, what do you do when it's trading at $21? >> i think this is one you want to own for the long term. i like it over nike. i think it's one that's still going to have double-digit top line growth, which is hard to find these days out there in retail or apparel. i think as we kind of get through some tough issues in the north america industry, i think it's going to come out a winner. only 5 billion in revenue right now versus 33 billion for nike. i think there's a long runway for growth. >> you must think it's a basement bargain at this level. >> yes, definitely at these prices, it could be a good buying opportunity for the long term. >> susan, thanks for joining us

today. >> thank you. we got to do u.p.s., which is down. the company had a big charge for pensions. if you tobacback it out, the co did manage to earn $1.63, but that was below expectations. the street was looking for 1.69. the street was looking for over 17 billion in revenue. the company was slightly shy of that at 16.93. in reading some commentary, the company said there were some good things that were happening this time around in terms of the investments in orion and automation, providing some benefits. however, the results were challenged by a shift in product mix and the continued softness in industrial production. the continued softness. that could be, i don't know, ground versus air, something.

i don't know. not sure. didn't go into that. anyway, that stock is now down 2.5% to $3. okay. when we come back, former white house press secretary ari fleisher is going to join us. up next, president trump has promised infrastructure spending. but some airlines aren't waiting around for it to happen. a look at what airlines are moving ahead with in terms of upgrades before the money is handed out. phil lebeau has that story right after the break. stay tuned.

welcome back, everybody. president trump has big infrastructure plans for the united states, but the airlines are not waiting around. they're already taking off with their own upgrades. phil lebeau joins us right now from salt lake city, utah. phil, what can you tell us? >> reporter: becky, a lot of airlines are saying, look, we need to invest in new terminals. here's the reason why. look at the rise in the number of people flying in the united states over the last 45 years. last year, almost 800 million people flew. it won't be long until we have a billion people annually flying in the u.s. those people are increasingly finding this when they go to different airports around the country. old, tired airports. it's estimated we need to spend about $75 billion to either rebuild or renovate all the airports in the united states. that's part of the trump administration's infrastructure plan. though, they haven't put a price tag on it yet. here in salt lake city, they're

not waiting. they're actually building an all-new airport. that includes delta taking its hub here in salt lake city and building an all-new terminal for that hub, part of $12 billion that the airline is investing in infrastructure projects around the country. >> security, gate boarding, check-in will all be completely revamped and offered in a way that reduces stress, reduces variability and creates a more service oriented and less stressful experience. >> reporter: as you take a look at the airline index versus the s&p 500 over the last three years, keep in mind that what delta is doing we're seeing being done with other airlines as well. they're working with the airports, saying we need to update these terminals as quickly as possible. guys, you fly as much as i do. you know which airports when you're scheduled to go somewhere, you just kind of roll your eyes and go, oh, please,

just get me in and out as quickly as possible. there are some real dogs in this country. salt lake city is actually a nice airport, but it was built in 1961. it's time for it to be update pd. coming up later, we're going to go to the construction site. >> phil, you mentioned dogs. you kind of think of the three of them that we end up dealing with constantly. please, which terminal am i flying out of. >> they're not like the dogs of the dow. >> and the problem is, guys, the problem in the east coast, you're landlocked. you're not only have to update those airports, in many cases you're building a new airport on the land right next to the existing airport. that's what's going to have to be done. >> and trying to do that while they have the enormous number of flights coming through. you get it. you understand why it's complicated. >> but phil, does infrastructure include a baggage system? i don't care, i'll walk up an escalator that's broken.

depending on which airport, sometimes i get to the baggage claim, like in jacksonville, and my stuff is like, where you been? it's waiting for me. newark, it's been as long as the flight at different times. most of the time i'm in there filling out the forms for lost luggage when it finally comes. >> reporter: that's all part of the update of these airports. it is the baggage system as well. joe, you just hit on it. you mentioned certain airports. immediately you go, oh, no, no, i don't want to fly into there. but you're stuck. that's where you have to go. >> what am i going to do, drive to philadelphia? i can't. you can't. >> you ever get your stuff in davos? >> i haven't yet. >> you really haven't? >> no. >> lucky your prescription drugs weren't in there, if you know what i'm talking about. >> i have no idea what you're talking about. coming up at the top of the hour, former white house press secretary ari fleisher joins us.

then cisco releasing its annual report on cyber security threats. we'll get the details when squa you can squawk returns.

te,rs on of trump-anomics.

exclusive results from cnbc's fed survey straight ahead. shares of under armour getting slammed. plus, out of this world. start up moon express is readying its liunar mission. the final hour of "squawk box" begins in three, two, one. ♪ live from the most powerful city in the world, new york, this is "squawk box." a young producer that knows what this song is. good morning. i was expecting "rocket man" or something. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick, andrew ross sorkin.

a quick look at the futures. it was the worst day of the year yesterday, but it was like, what, 0.8% or something. >> 0.6% for both the dow and s&p. >> we're indicated down another 55. it's kind of interesting. how do you connect the dots? is it the general unease with the last three or four days in terms of the news cycle, or is it that some of these other things become less likely if so many people are -- if there's some political capital being wasted? who knows. like we said, what is this, still not a total of a 1% salvo. just off 20,000. it's not like we've taken a huge hit. still up for january. a little bit of weakness. three or four sessions in a row. treasury yields are also sort of under control. for an economy that's supposed to grow much more quickly in 2017, you're not necessarily seeing rates spike higher

anymore. okay. a few stocks on the move this morning. shares of under armour, take a look at this. under a lot of pressure. the sports apparel maker posting lower than expected sales, offering weak guidance, and perhaps most importantly, the cfo is stepping down. you're looking at that stock now off 24% in the premarket. shares of nike also falling this morning on questions about whether this is signaling a larger move in the retail space when it comes to athletic wear. separately, retailer coach beating the street on the top and bottom lines. the company cutting back on discounts in the u.s. and selling more hand backs in china and japan. then u.p.s. missing analyst expectations. daily package volume was up 5% in the quarter. that's the good news. the company says a currency drag will cut eps in 2017. then there's harley davidson earnings and revenue. those missed the mark. full-year motorcycle shipments falling short of stirestimates.

pfizer also out with earnings this morning. earnings and revenue falling below what the street expected, hit by lower demand set for products to go off patent. a lot to chew on this morning. >> we're looking at exxonmobil -- >> it's up. >> right, the stock is trading right now a little higher. looks like the dilution number -- they say earnings per sure with dilution is 41 cents. street was expecting 70 cents. i'm not entirely sure what's in this number and what's not. >> 62 237.2 was the estimate. 61 is where it came in. >> darren woods is the new chairman and chief executive officer. he said that, look, for the year the results were negatively impacted by the prolonged downturn in commodity prices and the impairment charge.

i don't have a breakdown on the impairment charge earnings per share, where that gets you. >> and with exxon, a lot of times you look at replacement and production and other metrics. makes sense. you look at upstream versus downstream as well. upstream was actually a loss, 642 million. then there's chemical earnings and petroleum product sales. >> the company does point out they completed five major upstream projects during the year in australia, kazakhstan, and the united states. and added 250,000 oil equivalent barrels a day. obviously a lot of moving parts here. we'll have to dig a little deeper. >> u.s. upstream had the loss. international actually made 1.7 billion. still, people have digested that bottom line number, which is well below. but that's not always the thing to look at with exxon. in news at the intersection of business and politics, the head of president trump's national trade council is

accusing germany of currency exploitation. in comments to the financial times, peter navarro, who we know well, argues that the euro is, in his words, like an implicit deutsch mark. he also says that germany is using the undervalued euro to exploit the united states and its eu partners. these are not comments knew to peter navarro. he's been on our show and talked about all of them. as we talked about earlier today, when you are in the white house and part of the administration, words matter a little more. and in other washington news, president trump firing acting attorney general sally yates last night after she directed justice department lawyers not to defend his executive order on immigration. joining us now, former white house press secretary ari fleisher. ari, good to see you. we can talk quickly about our off-camera -- i asked you, i said, you were never a never trumper, but you're a bush loyalist. there's some bad blood. although, not as much.

i saw george p. got on board trying to elect president trump down in texas. the w. still -- he never criticized president obama, never really -- i don't expect it to change now with president trump. kind of a classy post-presidential sort of attitude. >> i think that's exactly right. if president bush didn't have anything ill to say about president obama because he thought it was good for the country, he'll do the same thing with president trump. >> okay. now, with all that said, now let's talk about what we're seeing for the -- it's only been 11 days, ari. i said earlier on the show talking about this show that what a great time to be in the news business. at least every day the news cycle is about three hours long. >> revenues are soaring. >> and scotus later today. the gaggle will -- you can see

i it. the gaggle is over here on immigration. then scotus. you described it in the discussion we had, things are happening because ceos, the mentality is that's one of the reasons maybe he was able to be elected. he just does it. but there's risk to that too. >> i've spent the last 15 or so years in the private sector working with a lot of ceos. the difference is profound. government is much more slower, deliberative, sometimes to its credit, often not to. but a ceo particularly of a privately held corporation that's a billionaire who's done it his way and been successful at it has a different imperative. their imperative is get it done, get moving, let's go. they don't have the patients often for the deliberativeness of the government. with donald trump, sometimes that's to his advantage. this blizzard of executive

orders. he's getting things done. he's forcing change in washington. he's honoring his promises. on the other hand with immigration refugee order, i think this is one they should have slowed down. it would have done much better if they'd gone throw what i called four most boring words in government. the intergovernmental review process. it's slow, tedious, but makes for better decisions. >> how do you figure out which things can go through this fast track? >> great question. i think it deals with complexity of implementation. when you're announcing an executive order, for example this morning about lgbt community, no discrimination in the workplace, that's pretty straight forward. when you're announcing something that impacts how people are treated at airports, you better coordinate that with customs, with border control, with all the agencies you meet at an airport. if it's not coordinated properly, it's harder to implement and harder to build support for. >> don't you think that the president and people around him

after the campaign have decided that if they satisfy the deplorables that they can't be stopped and it doesn't really matter? and they write this off to the echo chamber of the left or of the mainstream media, and they're going to do it. torpedos be damned, they're going to go ahead. i still don't know whether they think this will negatively affect them in the future. do you think it can be self-defeating down the road? nothing you did in the campaign was self-defeating. >> it needs to be a mix. you need to have a mix of moxy and drive. this is what we're doing and we're going to make the agencies do it with us. but you have to do it with the agencies as well. that's where this one got derailed. >> it would help if they have a couple secretaries in place. >> well, hopeland security and department of defense. i predict what's going to happen here, the secretary of defense who didn't know about it, they're going to go in and say to reince prebus, you just took your mull began.

if you ever do this again without consulting us, coordinating with us, we're gone. i think that's how you get the white house to open up, slow down, and change some of these things. >> do you think those types of conversations are going to happen? >> oh, yeah. especially because you have two generals who run those agencies who know about the chain of command and respect it. i think they're bothered by the fact they weren't consulted, and they should be bothered. >> to the extent there's political capital being used up on this issue relative to some of the other issues that the market and investors are looking at, do you think that's an issue? the stock market fell because of this sort of perception that perhaps it's going to be harder to get some of these tax issues, tax reform, regulatory reform through. >> you know what i've noticed from my time in government, when the market falls, the press says it's the fault of somebody in government. when the mark goes up, it's because of what the private sector did. i have no faith that the analysis the mark fell because of the government is accurate. i think markets go up and markets go down for a myriad of reasons.

it's easy to say it's the government. >> to the extent that there is a perception and an expectation that we're going to have significant tax reform, significant regulatory reform, perhaps infrastructure spending, these are the things that the business community is looking at. do we have -- is our expectations overestimated, underestimated? and does this type of conversation that we're having on immigration have any impact on that at all? >> i think those regulatory, more direct financial matters have a bigger impact on market trends long term, not day-to-day fluk shakctuations as much. i think the market has reasonably priced that in here. i think expectations should be high for tax reform. there's pent-up demand in congress to do tax reform, and republicans recognize this is a rare, almost once in a lifetime moment to do it with president trump. so i think it will be done. they'll be fighting about the details. i think ultimately it gets done. >> although, one thing business hates is uncertain it i. business leaders say, well, we don't know exactly what we're dealing with or how things are going to be implemented.

>> but they're sophisticated enough to know there's no automatic certainty, that the government process is inherently uncertain. that's part of the democratic free and open process. they understand that. they'll watch the details. that's why they all have lobbyists. they'll fight for their provision when the time comes. tax reform is a train that i think will hit its station. >> you point out that business leaders aren't too worried about this because they have lobbyists who will go and fight on their behalf, but trump has said he's going to drain the swamp. that means getting rid of the lobbyists. >> if you want to get rid of the lobbyists, get the government out of our hair. the reason there are so many lobbyists is because the government does so many things to the private sector. >> but the reason there are lobbyists is because they're effective. you have someone who you pay a lot of money who goes to the hill and lobbies on your behalf to have something slipped into legislation that works. the only way to get rid of lobbyists is to say that's not going to happen anymore. >> no, it's to have the government stop taking away billions of dollars.

if the government is going to take billions of dollars away from you, you're going to spend millions to keep it. >> my point is there will be lobbyists as long as they are effective, right. >> there will be blood. >> and they'll be effective so long as the government is in our hair. the government is not in our business, you don't have to hire a lobbyist. >> i don't want to go yet. one more question. we introed you with the firing of the acting a.g. just tweeted that democrats are praising her as a patriot for defying donald trump. she's an obama appointee. do you ever get -- do you smile? what do you do? you've been in politics for a long time. does it ever get where it doesn't drive you crazy? >> when george bush was elected in 2011, the first cabinet meeting, attorney general eric holder from the clinton administration sat in george bush's first cabinet meeting. he was a holdover from the clinton era until we got our a.g. in place. if somebody in that holdover position so principally disagrees with what a president does, the proper course is to resign. stand your ground, state your case, and resign.

but she stayed there to be fired. and that's just not proper. especially considering the fact that the office of legal council, the justice department, said what president trump did was lawful. so this is an ideological position, not a constitutional one. >> did you think the left could hate a president more than w.? >> i used to see bush derangement syndrome on a daily basis. this is triple that. the hatred for donald trump is -- face it, he created a part of it. he's changes things and speaks in a manner that people aren't used to. >> what did w. do to conjure up that hate? >> he won. >> exactly. that's always a problem. all right. ari fleisher, thanks. >> great to see you. coming up when we return, the cyber threat. cisco out with its annual sicy r cybersecurity threat. plus, trump-o-nomics. and later, squawking with the stars. stay tuned. you're watching "squawk box" here on cnbc. ere'e'stng eni.

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welcome back to "squawk box." cisco releasing its annual cybersecurity report this

morning, touching on things such as customer security trends and the importance of cybersecurity as a boardroom topic. joining us is john stewart. good morning to you. >> good morning. how are you? >> thiank you. very good. we're trying to understand the cybersecurity threat, something donald trump has talked a lot about. when you talk to ceos, and you've now surveyed them, biggest issue on the docket for them. >> so we had about 3,000 security and executive professionals worldwide interviewed. then we combined it with telemetry with customer interactions. the combined report essentially concluded, number one, that cybersecurity at a ceo level has now become a business topic. number two, that there are still some fairly significant pushbacks and dilemmas to push there. it includes budget, time, resources, complexity. last and certainly not least, the fact we have got to get better to make it easier for all of our customers but frankly for

the entire industry. >> you know, a big issue for so many executive when is you talk to them about cybersecurity, ultimately this is about cost. it's a trade-off in that it's the cost of how much does it cost to try to protect yourself up front versus the cost of what may happen later, but it's ultimately an up front cost and how much should we be spending on this. how do you think they should think about that? >> so andrew, part of what the report talks about is efficacy and outcomes. the changing conversation where now cyber is business, business is cyber, has essentially allowed a much more progressive conversation to happen. namely, the fact that if you're looking for a detection rate that says i can find an attack in under six hours, it's going to cost this much. if i'm going to have this much business affecting outages, it would cost this much. here's how much i would invest to counteract it. all in all, what i'm enjoying and frankly i think for 30 years of being in this world, it's nice to see that it's now in business terms, not technology terms, where it's traditionally

been. >> is the cloud safer or less safe than doing it individually? >> neither one. in fact, more importantly in some cases, it can be that much more safer for particular use cases. for example, in many companies, small businesses especially, where the talent pool is just not available to hire, then you can be using cloud-based services frankly because they're invested just as much for keeping the service running with high integrity. it's not like every cloud service is equal. the review and capabilities of each and every one of them frankly needed to be studied and searched for so you get the right kind with the right vendor and provider. >> okay. john, we got to leave it there. is there a way for our viewers to read this report online? >> it's actually on the home page of cisco's website. if you go to goacr2017, you can pick it up there as well. it's a full-blown report. many, many, many pages of

detail. >> okay. john, appreciate it. coming up, we have a fresh read on the state of small business in america. that is next. then later, a space start-up call eed moon express is headin to mars. no, kidding. it's moon express, heading to the moon. the ceo will join us. "squawk box" will be right back. e e

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welcome back to "squawk box." new data out on the state of small businesses in america. the paychecks national index increased for the second month in a row. joining us now is the president and ceo of paychecks. good morning to you. >> good morning. >> so marty, the good news is things looking up for the most part. what do you attribute this to? >> well, you're seeing the highest optimism in consumer confidence and small business optimism in over ten years. we're really coming off a high on hopefully how great things are going to be. you saw the legislation that was -- or the executive order just signed on less regulations that have been choking small businesses. now we've had two months where the small business index has gone up. really good news. let's see if it continues to translate into jobs. >> fair to call it the trump effect? >> i think so. it's happened really in the last two months. i think there's hope particularly again when you see two for one sign the other day. hey, we're going to take away

two regulations choking business and for every one that goes in, i think that's all good news for small business hiring. >> particular region that increased the most? >> yeah, continue to see the southeast the strongest. southeast florida, georgia, tennessee. you know, you're seeing e-commerce really pick up, so you you have fedex in tennessee, that's picking up some small businesses around them. e-commerce are about 15% of all sales, up from 10%. really strong. that's helping, i think, tennessee and that whole southeast is good for construction as well. >> flip it around. what's the weakest? >> the weakest is still, you know, texas, even though it's come back some with oil prices. it's still being hurt. houston trying to come back. california, interesting, had the biggest job growth in '15, but now some of those jobs look to be moving up towards seattle, portland because of the high cost of the areas. >> okay. >> marty, when you have movements start, when texas

maybe comes under pressure from higher energy costs or you see the dakotas under pressure, once labor starts to move, once businesses start to move, when or how do you turn that around? how long does it generally take? >> yeah, it really depends if oil prices suddenly spiked up and that kind of brought that business back. it will take a little bit of time for small businesses, restaurants, contractors, construction to kind of come back around that because they see it turning. so it could take a little bit of time. obviously we've seen that with houston. it was on a real high, it fell, it's slowly coming back now, but that's been, what, a year and a half, two years since it was kind of at its low point. >> okay. marty, thank you. great to see you. >> okay, great. thanks. good to be here. when we come back, top economists and money managers speaking out on trade. exclusive results from cnbc's fed survey next. plus, we'll get reaction to it from former deputy u.s. trade

representative robert hollyman. we'll be right back.

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good morning. welcome back to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. among the stocks front and center at this hour, take a look at shares of under armour. they are under a lot of pressure. the sports apparel maker posting lower than expected sales, offering weak guidance and also announcing its cfo is going to be stepping down. you're looking a the that stock now in the premarket off about 24%. also, exxonmobil missing the mark on the bottom line. exxon eps of 40 cents. this is the correct number to compare with the estimate. mastercard earnings topping estimates but revenue falling a bit short as well. a lot to chew on as we get ready for the market open a little later. wow. look at this. cnbc's senior economics reporter, steve liesman, is back with more of the exclusive results from the cnbc fed

survey. the all-america fed survey. we're focusing on -- >> no, no. this is just the fed survey, joe. >> not all-america. >> no, this is just the wall street types, the economists, the strategists. >> how many surveys -- >> i do two. the all-america, which is all america, 800 people nationally. this one is done for like the last ten years or so, joe. which tells me how much attention you've actually been paying. >> the all-america survey -- or the fed survey. >> becky, what do you do in a situation like this? >> move right on. >> move right along. moving right along. folks, this is really interesting here. this is the fed survey, 41 economists, fund managers, and strategists polled. they say protectionist policies are the top economic threat, and it's so big that 51% say it's the biggest threat and we've never seen a number of any single threat be a majority. ever, okay. >> again, this is from

economists. >> and this was not going to be my lead. if you look at this, it's just one of four aspects we polled about. you see huge support there for individual tax cuts, 75%. huge support for business tax cuts, almost 80%. and even more support for deregulation. and there's that negative on trade. when you look at the comments, when you look at everything else that said the trade overshadows almost everything else, they make the economists and wall street concerned about the outlook for growth, and they make them concerned about the stuff to the left of that, the individual and the business tax cuts. 70% say import tariffs are bad for growth and jobs. just a fundamental disagreement here. and take a look at the trade effects they see. they're very concerned about a trade war. you can see there 53% say that if trump's relations with china will lead to less growth for both countries. 93% expect china to retaliate. the numbers are pretty much the same when it comes to mexico. 58% said trump's relations with mexico will lead to less growth for both countries.

finally, i thought it was interesting that there's not a lot of support out there on the street for this border adjustment tax, even though it's sort of an economist idea. only 18% are positive, 30% are neutral, and 45% are negative. perhaps it hasn't been explained all that well, but we're not getting a lot of support. >> perhaps it has. >> what's that? >> or perhaps it has. >> maybe it has and they don't like it. let me show you what a guy like art hogan says. he says, investors can get behind pro-growth policies and can't and won't support protectionist policies. trade wars like all wars end negatively for all. once again, we'll post the whole survey, the cnbc fed survey, not the all-america survey. people can read through the comments and just see how animated these normally unanimated people are about this trade issue and about the threat of protectionism. >> all right. that's a great intro for our next guest. joining us now to talk more about it is ambassador robert hollyman. thank you for being here this

morning. >> thank you. >> let's talk about what steve just laid out, this idea that at least when it comes to people on the street, they're incredibly worried about protectionist tendencie tendencies, the idea of renegotiating any of these -- not necessarily renegotiating, but throwing out tpp, looking again and restarting nafta. what do you think about it all? >> well, i think we know that there are substantial risks to the u.s. from protectionism. we also know there's a big opportunity for the u.s. as lead trading nation in the world. what i hope we do is use our strength as a global trading power to open up more markets so that we can access the fastest growing markets around the world from the strengths that we have in our domestic economy. >> this administration has already said it wants bilateral trade agreements, not these big bu bundled agreements, like a tpp, where the argument would go you're dealing with the lowest common denominator when you have

so many countries involved in one trade policy. what do you think? >> well, i think you look at what our competitors are doing. china is our largest competitor in trade. they are actively pursuing a 16-nation comprehensive trade agreement, the regional comprehensive economic partnership, that ranges from india to japan to vietnam to china. what that will do when it's completed this year, which is expected, is it will make it easy for chinese traders to quickly and readily access the fastest growing markets in the world. as we look to a potential bilateral relationship and striking a series of bilateral trade agreements, i think we have to do that with you are urd realize we're handicapping ourselves by playing an analog trade policy game when the world

has moved into a digital era and they're looking for these large network combined effect trade agreements like the one that china is negotiating or that we tried to negotiate through tpp. >> ambassador, let me make the trump administration's case on this. it doesn't sound that bad, really, when you think about it. an $800 billion goods deaf it, a $500 billion trade deficit, $60 billion trade deficit with mexico, $300 billion something with china. any time a country wants to stimulate its economy, it's got a perfectly good way of doing it. it devalues against the dollar. what's wrong with that way of looking at the world and saying, you know what, it's time for america to claw back some of that trade deficit and to really protect american jobs from all this foreign competition? >> well, we need to be strong on trade, and we need to use all of our mechanisms, whether they're enforcement or bilateral deals or multilateral deals to try to strengthen our inherent

advantages. two, we also know there's not a clear link between trade deficits and economic weakness. in fact, in times in our country where we've had lower trade deficits, we've actually had a weaker economy, like the great recession we've just seen. so we need to move away from thinking of a trade deficit as inherently negative for the u.s. and finally, what we need to do is recognize we need more access to the fastest growing markets. asia pacific in little more than a decade will have 3.2 billion middle class consumers. what we've got to do is strike trade deals that let our farmers and manufacturers and our ip producers, our service providers get more favorable access to those markets. and that's by being in the game, not by stepping out of the game and looking to protectionism just within our own borders. >> what are the biggest risks? i know that there are some areas where the united states wins on trade. do you think of an area like

aerospace where i think we have something like an $80 billion trade surplus. what happens if we get into some sort of a trade war? >> well, look, we win on trade in a lot of areas. i mean, we're the largest trading nation in the world. two, we also know from analysis by the bipartisan u.s. international trade commission that the u.s. does better with countries with whom we have free trade agreements. so we need to continue to focus on how we strengthen those agreements where we do the worst and where we have the biggest trade deficits or with countries with whom we do not have free trade agreements. so we need to recognize we have tools that have shown how we win and engaging in the game, doing so with a sense of urgency is absolutely critical for a u.s. leadership perspective and for u.s. economic perspective. >> ambassador, you have been in the room. you've negotiated with china, south korea. you've negotiated on tpp.

one of the strengths, they say, of donald trump is his negotiating ability. could you explain to us how you think what he's doing now, which some people have said, you know what, he doesn't want tariffs, he wants leverage, and he's getting leverage through these things he's saying. will these things help, in your opinion, when it comes to negotiations, or will they hurt? >> look, it's a new era. it'll be a new series of negotiations. but what i think we have to do is recognize that in all negotiations, you've got to find a way that both parties or all the parties can view this as a win-win. so the tpp was carefully crafted using the large economic clout of the u.s. so that in reality we had to give up very little and we gained a great deal through the economic force of the u.s. i think the people who have concerns about moving bilaterally believe that the u.s. will be asked to give up

more in each individual bilateral agreement that we had to give up in the larger agreements. that would -- if that's true, it would make it harder to get agreements done. although, i'm hopeful that in the urgency that we see for the u.s. to be in the game that we will not turn our back on trade and that we will actively negotiate the kind of agreements that we need. >> we all hope for that. ambassador, thank you for joining us. >> thank you. coming up, out of this world. we're going to talk to the ceo of moon express about business in the stars and the space race under a trump administration. stay tuned. "squawk box" will be right back.

♪ ♪ you're going to find out why we are playing this moon music in just a moment. joe has the reason why. >> oh, i do? okay. then good. let's take a break from the news on this planet for a moment. our next guest has his sights set on the moon.

naveen jain is cofounder and chairman of moon express, a company recently announcing a new round of funding. wow. it's exciting. what's the end -- if everything goes perfectly, when and what will we have, naveen? >> well, i'm so super excited about this year. we're going to be landing on the moon. imagine one day we'll all be sitting on our knees asking our honey, will you go to the moon with me? our goal ultimately is to clear the multiplanetary society. at the end of the day, if you don't do something, there's going to be a time when we're going to get hit by an asteroid and we're all going to become a dinosaur. that's not something any one of us likes. >> fly me to the moon. i guess that could be your theme song. tell us about -- you know, this is not going to happen immediately, obviously. but tell me in sequence the five or ten-year plan for this. >> sure. so we're going to land on the

moon this year. i have been waiting to say that for so long. it is going to be this year. the first mission is going to be a robotic mission. we're going to be exploring the moon for natch ural resources. our ultimate goal it to use helium 3 or the platinum grade material but also to really use the resources to live on the moon. my hope is that our landing on the moon will be symbolic of what entrepreneurs are i ccapab of doing. not only will we become the first ever to do so, we become the fourth superpower. that just goes to show the next set of superpowers are likely to be entrepreneurs, whether it's elon musk or jeff bezos or moon express. that's going to go out and solve the world's biggest problems. my hope is that this will inspire every entrepreneur to find their own moon shot, just like i found another moon shot,

where we are solving a health care problem. it's not going to be obamacare or trumpcare that's going to solve it. imagine living in the world where sickness becomes optional. that means you're able to live in the world where we can find the disease, cure the disease, even before you see the symptom. that world is well within our reach. and entrepreneurs are going to solve those problems. >> yeah. if sickness were optional, you'd have to be a real weird person to take that option, i think. >> actually, what happens, people take that option every day by eating the food that's not good for them, right. so when you tell someone and say, hey, you really should be eating, you know, this, and they say no, i'm going to eat burger and fries, that's a choice they make every single day. our hope is that we're able to personalize the diet and nutrition by looking inside your body to see what is going on, the biochemistry of the body and your gut. at the end of the day, the

majority of the diseases start in your gut. you take care of those truly and they take care of you. >> going back to the moon quickly, when we brought back moon rocks and samples before, are there things that we don't know might be in the composition of the moon, and of the things we do know, what are the most valuable? >> so most valuable thing obviously is going to be helium 3. a small quantity of helium 3 could really power this planet for generations to come. it's a really clean source of energy. in addition to that, we obviously have a massive amount of platinum grade materials and the rare earth elements. what we're mining on the moon really is the asteroids and all the asteroids that have been aggregating on the moon for billions of years. we're able to collect them and essentially use them for resources, both to live on the moon, and also to bring them back. the most important part of the moon really is the water.

water is components hydrogen and oxygen that not only make rocket fuel but fuels for humanity. one day there's going to be a child born on the moon. the parents are going to be sitting next to the child saying, look up, we come from that blue marble. how beautiful that is. and we should be going and visiting there some day. >> what citizenship do you get if you're born on the moon? >> well, i would believe you would be a lunatic. it's better to be a lunatic than to be a martian. any day i'd rather be a lunatic. >> i'm with you. >> naveen, we've got to run, but thank you. we got a lot to think about. that's exciting. next time i look up there, i'm going to think about something other than green cheese or something. anyway, thank you. >> thank you very much. really a pleasure to be here. >> you're welcome. when we return, jim cramer is going to join us live from the new york stock exchange.

plus, special visitors are going to join us on the set right here at the nasdaq. you don't want to miss this. yes, we have puppies coming up this morning. and here's a hint. it's some serious business. they're here for a reason. we're back in a moment. the mpim

s dropping to a multi-year low on friday. in the month following a move below 10.5, wti, gold a

let's get down to the new york stock exchange. jim cramer joins us now. not the biggest market cap. smaller than it was, that's for sure. but interesting to watch underarmor, isn't it, jim? >> yeah. when a cfo departs, i know he's staying for a while, but let's say a year after he comes in, that's kind of a not reassuring sign. i know it is going tough. they obviously missed in multiple ways. but this is a very competitive area. look, it is retail. we have to get our arms around the idea that retail is terrible. it's just a terrible category. and it is the worst place to be in when you're investing. i feel like other than amazon, you really try to make a case every day for why you should be in a retail stock and it just doesn't come underarmor is a good company. they're not jokers. the cfo resignation is

suboptim suboptimum. >> exxon, ups? >> i like exxon. it is doing well in a difficult environment. ups, last year was good. this year, seems like they can't figure out the mix again. the stock has run up a lot. i think that when you, you know, peel off the surface, it seems like ups gets surprised by how strong e commerce is and how it works each year. ecommerce is a real conundrum for everybody. whether it be walmart, united p parcel. it's a conundrum for everyone except amazon. >> when would you think something coming out of the white house could actually either derail or call into question the 10% move that we've had since the election? >> well, i think you just need a couple of senators who we haven't heard from yet to break ranks. that would change the equation of things. political risk is what is in front of us. and you want to be able to get

lower corporate taxes, repatriation and less regulation. if senators break ranks, i think it would change the complexion of the market heavily. >> you don't need mccain and graham. i read about them every day about. >> no. they're dissidents. i'm saying, you need to see some of the guys that don't speak up. it is still game on. doesn't seem like anyone is breaking ranks. my major focus is the earnings. the earnings are day to day, some good, some bad. as long as you don't see some new republican senators say, you know what, i can't take this guy, then i have to believe that there are still some decent wind behind his back, even if you don't like what he's been doing. >> jim, thanks. >> thank you. >> we'll be watching in a couple minutes coming up on "squawk on the street." don't miss the cfo of ups. that's 10:00 a.m. eastern.

when we return, "squawk" has gone to the dogs, puppies. nothing better. gather the family around. we're all going to hold one. our special guest will join us next. ♪ who let the dogs out ppdinn, a y seleg por ppdinn, a

good boy. bark like a dog for me. oh, welcome back to "squawk box." almost super bowl weekend. hope they're not watching at home. that'd be three jealous dogs. almost puppy boy weekend. >> let's not try to eat the tie. wanting to eat the tie. >> sweet pea. >> such a sweet pea. >> they're all so adorable. >> animal planet's furry friends are here to ring the opening bell at the nasdaq. i don't know which one is going to -- what is this guy's name? >> prancer. >> kato. >> it's a girl. >> i didn't check. okay, prancer. very sweet. and the cutest. >> i'm getting kisses. oh, hi, sweet pea. >> been a while, andrew, right?

>> while we're here, we should tell everybody about stocks to watch today, too. retailer coach beating the street on the top and bottom lines after the company cut back on discounting in the united states and also selling more handbags in china and japan as a result. that stock is up by 1%. harley davidson earnings and revenue missing the mark. the full year motorcycle shipments falling short of estimates. pfizer out with earnings. the drug makers revenue falling below what wall street expected. pfizer was hit by lower demand for products set to go off patent. finally, we should tell you a mixed quarter for eli lilly. earnings falling short but revenue topping estimates. the company is reiterating the full year guidance. >> final check on the markets. the futures are indicating lower after a weak session yesterday. weakest of the year, actually. indicated down about 52 points. hard to believe they're not going up a little on this. there is something about puppies, isn't there?

>> the market should be going up a little. >> you're a dog person, not a cat person, right? >> i love dogs. sweet pea is trying to take my microphone. can you say good-bye to everybody? want to say good-bye? >> "squawk on the street" is next. >> join us tomorrow. bye, everybody. >> bye. ♪ everybody dance now ♪ everybody dance now good tuesday morning. welcome to "squawk on the street." i'm carl with jim cramer and david faber at the stock exchange. whether it is high profile earnings misses, the turmoil at the department of justice over immigration, the start of a two-day fed meeting today, futures are lower. the euro is powering higher. we'll talk about that in a moment. s&p out. we begin with president