itself. and all reports absolutely outstanding. >> can i tell you i think that was -- i was a little scared. >> i was too, between that and the pyre tech nicks she was taking her life in her hands. >> there was a lot of stuff going on. >> wilf, been great having you today. >> pleasure as always. >> nice to see you too. >> nice to see you too. >> make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good monday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. we kick off a busy week of media and consumer earnings. we're going to watch this appellate court standoff over the president's immigration order, reaction of course to the incredible super bowl victory by the pats and the ads last night. futures down a little bit. europe's red, ten-year right around 2.42. roadmap this morning starts with tech ceos coming out against the president's immigration order. we're going to talk about that.

>> plus, we'll have tiffany's ceo. he's stepping down amid a sales slump, the stock selling off this morning. >> and in the biggest comeback in super bowl history, the patriots take their fifth title in overtime. the winners and losers from the ratings to the ads in just a moment. busy week though in politics. nearly 100 companies coming together to fight the trump administration controversial executive order on immigration including apple, facebook, google, microsoft among others filing a joint brief with the ninth u.s. circuit court of appeals. the order inflicts significant harm on american business and innovation and growth. the order effects a sudden shift regarding entry into the united states inflicting substantial harm on u.s. companies. some of these tech companies organizing sending a letter to the president in order to offer help in coming up with a different policy. something elon musk said he would try to do, jim. >> yeah, i thought the latter was the most significant thing which is that, look, the tweets tell you that the president's certainly not going to back

down. somewhat surprising for those of us who grew up in a house where the judiciary was worshipped to see the judiciary knocked so easily. it's not just one judge is the judiciary, a federal judge, but i think that the idea there is something that could work in between is something that musk is really kind of front and center with. saying, look, you got to work with the guy. and i think that when you have such a uniform protest and then you sit down, i mean, maybe this was the first example of there could be some compromise. it doesn't sound like it from the tweets, but this is pretty austere group of people against this. >> and the list of 97 companies that filed along with -- or against the order is pretty impressive. >> the s&p 100 there certainly the nasdaq 100. >> definitely nasdaq 100 without a doubt. i mean, yeah. google certainly amongst them. intel, i mean, you just go through it and you see most of

technology. >> yeah. these are real companies that really feel like this is, you know, unintended -- obviously an unintended issue, but a big enough that they're not going to lay down. i mean, it's going to go -- it's going to the supreme court, the supreme court's 4-4. i don't think by the way -- i don't think this is going to be as left/right as people think. i think there are people in the supreme court if you look at them who are republican who are really kind of backing the federal court system. >> sure. dianne feinstein, top democrat on the judiciary committee says no doubt in her mind it's going to go to scotus. >> right. >> of course the appellate court has given doj until 6:00 eastern tonight to file their briefs. meanwhile, the president this morning of course over the weekend tweeted about so-called judge robart. >> he got the ninth circuit, the ninth circuit's so liberal. the ninth circuit has been so liberal for as long as i remember. it was a bad draw for the president. >> true. although he is a george h.w.

appointee. >> right. court of appeals, but absolutely. that's one of those things. took our breath away. i think a lot of us -- that's why i say maybe it's not as republican/democrat issue. >> again, this morning, another tweet. if something happens, blame him. >> right. >> the president says. i mean, are you bothered at all by that? >> does anyone care if i'm -- no, personally? yeah, personally, i think again it depends on the way you grew up. depends on the way you feel about the judicial branch and how it just -- >> well, there was a belief this could foreshadow what will be the largest impediment to the trump agenda, which is the courts. >> right. >> and a lot of things will end up in the courts, not just this immigration ban. >> right. >> but other things. and then back to our audience and what i think they care about, will it in any way affect the timing and/or the ability to actually move forward on the deregulatory/tax reform agenda

that the business community embraces? interestingly the business community here not embracing at least in the form of many of those companies you just saw this immigration ban. so it kind of all does play together to a certain extent. >> well, i mean, gary cohn was on our show talking about how, look, we're going to get repatriation, we're going to get to corporate tax reform. right? i mean -- >> he said he's confident. >> he's confident. >> he's confident. why is he confident? because he's confident. >> yes. >> the ball's in the air. >> kind of circular reasoning. >> i'm confident because i'm confident. >> meanwhile, the journal this morning goes page one with a story about the capital that banks could return. >> right. >> six biggest banks they argue could return $100 billion in capital if dodd/frank is rolled back the way some hope it is. we're going to talk to barney frank later this morning. >> it's funny because before dodd/frank this was always just a consideration of the federal reserve. but suddenly we decided it's dodd/frank. i mean, dodd/frank is a lot of things. but overall return of capital

has been -- it's been other ends of the government. you know, it's the ccars, what i'm saying it's not really -- they're really kind of lumping nit with dodd/frank, but i've never felt that dodd/frank is the reason why you couldn't return capital. >> i know. i'm curious to see how that all plays out. citi is at the top of the list of what they call excess capital. >> right. excess capital. >> with i think what was the number $27 billion or something along those lines. but the stock's moved pretty dramatically on friday. >> right. interest rates are down today. and that's the buzz kill for the group. you need both interest rates shooting up, right? because you need the fed to go along. you've got that steepening yield curve and think that gives them some room. you have to have a move in march. and absolutely you need some sort of deregulation. but it's funny deregulation i'm saying, like people don't realize, when the bank examiners are inside the banks, and the compliance people feel

emboldened, then they can be very tough on lending. but if the compliance people like, whoa, you know what, maybe we're overstepping and the regulators feel like, well, we got a new sheriff in town, then i think you end up with more lending than people realize. it's how flaws are administered really do matter. you know, by the way, the epa -- if you see ferk. another quick approval with the pipeline, that's different. that's just deregulation at large. >> yes. >> in the pipeline business. holy cow. >> and there you've got the ability -- i mean, i would assume a certain environmental groups will try to file lawsuits against different deregulatory challenges as they come. but, yeah, pipelines you can get stuff done quickly, can't you, jim? >> absolutely. etp was a big winner. energy transfer. >> right. >> we see people bidding up cabot pipeline and gas. look, the pipeline business, this is the greatest time in the

world to be in the pipeline business. and it was the worst time in the world about three weeks ago. >> reminds me of a book. >> "best of times worst of times"? >> yeah. >> he's come up a lot lately. >> so 1984. >> yes, in particular, yeah. >> the biggest comeback in super bowl history of course, the new england patriots win claiming their fifth title. the falcons built that 25-point lead but tom brady and the patriots battled back in the second half forcing overtime with the late-game touchdown. the two-point conversion. brady throws for 466 yards, that's a super bowl record, two touchdowns, becomes the first quarterback to win five titles and was named super bowl mvp for the fourth time. the goatiest goat that ever goated, jim. >> yeah, i was very neutral about the game. i just felt it was important to just come in and be 50/50 and not really care, you know, for good solid gain. >> you're such a --

>> thank you to the krafts. >> you're an eagles fan. what are you doing? >> afc, i have no dog in the hunt. >> oh, okay. >> we beat the falcons, by the way, just for the record. >> you are so from the church of what's working now, aren't you? >> you bet i am, are you kidding me? holy cow when edelman caught that ball i said it's over. >> i was saying it's over when it was 28-3. >> no, you would have missed some great commercials. how about congratulations to indra nooyi and pepsico. >> early ratings down slightly from last year. 48.8 is the initial read. fox does report tonight, but it's likely some people gave up on the game. >> right. >> like mark wahlberg reportedly did. >> what, did he go home have to beat the traffic for the super bowl? >> i wanted to, but my son said no way, i'm not leaving. we're hanging in there. >> there you go. >> thankfully we did. >> just to see if there was any sort of fireworks. >> i just kept saying -- yeah. incredible. i mean, what can you say?

>> do you think -- is it 50% choke, 50% comeback? i mean, geez, i praise brady and people said are you kidding me it's about the play calling. >> play calling in the second half. >> you mean the fact atlanta basically didn't score for -- >> matt ryan's kind of in his zone there. but what do we know? takeaway, short home depot, go long lowe's, right? >> right. >> as arthur blank they looked older and older as the game went on. like, please, where's the lowe's management. i know he's retired but i was looking for the lowe's guys on the sideline, right on the patriots sideline. the lowe's guy's cheering like, yeah, man, same store sales going higher. >> when we come back this morning, it is the latest retail ceo to step down, tiffany. the head of tiffany is leaving the jewelry chain. we'll talk about that. dodd/frank reform of course in focus after the eos from the president. we'll talk to barney frank later this morning.

look at the premarket. s&p riding a three-day winning streak, that's the longest of the year. more "squawk on the street" from post nine in a moment. etitcoecnt bwi00an bues ommunicnd cmuoncots oceno etitcoecnt bwi00an st w wto thi tionorr lkg mehrough my fi

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and rl with changes in the past two sessions. >> i'm glad you mentioned that. cfos are out, ceos are out, is macy's going to give up here -- i think it would be a bit of a give up to make it more of a real estate play. i think everybody's challenged. and you can fire anybody you want. it may not matter. it's the business model. it's a business model of brick and mortar. tiffany, if you're going to spend all that money, you want to touch it. and they've been uniquely hurt by new york and by the strong dollar. but in the end it just doesn't matter. i mean, if you're in retail, you're having an existential crisis. and it doesn't matter which retailer with the exception of maybe children's place did a good job. ulta i think if they would go into men's i think it would be a real killer. costco because of the card. and then amazon, you see the checker list stores. >> we saw this story on i think it was "new york post" today but it's about their plans for the grocery store of the future

where you've got robots flying around upstairs and as few as three people working the store. >> you don't need a checker. you take your iphone. take your iphone. kind of scan it and leave. i don't know, to me it seems like a way to be able to scam, but what do i know? >> speaking of ceos, bob iger at disney may be staying on the job longer than planned. he may extend for a third time rather than retire as planned in 16 months. paper says there's no obvious successor in sight following the departure of the c.o.o. last year. that it would be something to have him stick around. we've talked about it. >> i know we have. and we've talked about the fact there's no heir apparent in sight and would it have to come from outside. stags, almost be a year since he was summarily given his walking papers. this would be at least the

third -- would it be the third time that bob has delayed his departure? scheduled now for july 18. >> look, i think the investors would like it. >> you do? >> well, when they report -- >> yeah, why not? he's been a great ceo. >> he's been terrific. seems to have a lot of energy. it's not like, hey -- he doesn't feel very retired, so to speak. >> no. i know. bob iger retiring is not something i want to think about given how old that means i am. >> his birthday is on friday. >> birthday on friday. they report this week. and we have seen a lot of action on analyst calls both up and down, but the bulls arguing that the film slate looks great, cost discipline at espn, maybe some moderation in sub losses over there as well. >> remember in that last quarter he did say he was feeling better about espn. >> he did. he did. you know, in the m&a community of course there's no shortage of bankers who want them to do

something big. >> right. >> whether that would involve buying something of size or selling, which just seems hard to imagine. but you do wonder whether during this period still given, again, we're relying on the journal's reporting now in terms of this idea that he would extend again, whether they do do something in these next 16 months. if you have a successor coming in, it's hard as it gets closer and closer to do something big when you're handing the reigns over to somebody else. although others will argue you want to get whatever you can done. >> that's a very good point. >> it becomes more and more that person's company. >> right. what do you think about the whole bamtech? the moving into tech more. >> i mean, it's important, but is it enough? >> no, you need something else. and can you -- somebody put a fork in the whole twitter conversation, right? >> yeah, there was real interest there. >> there was. >> as i reported. there absolutely was. i mean, very difficult in terms

of from a dilution standpoint as would be a netflix deal we talk about that all the time. could you get your shareholder base where they'd really be willing to take it. but big dilution, jim, the fact netflix doesn't really make a lot of money. >> right. i still think -- >> and you'd be buying it for a huge price. >> but if you could command all of the ways we watch espn so you would change the way you viewed -- >> and if people were to believe you were to actually do that is reed hastings a potential heir apparent? this is all speculation. so much of it out there. also while we're on it apple one day in the next five years will finally say we've got to take a big plunge, big, big, big and buy a thing like disney. >> one thing was in speculation week was a barron's report that the job's stake cut their stake in disney about a half since original stake was given to him

on the pixar deal. now below 5% which means no more disclosures required. >> that is interesting. of course iger remains on the apple board, correct? >> yeah. look, the stock has had such a run. they really do need to blow it out. it's got to be a blowout quarter. i think. at least showing a new way to value espn. they've got to show a new way to value espn. you can't just keep losing subs and take people's word for granted that it's going to be fine. >> yeah. >> not at 110. at 93, yeah, but not at 110. 110's a big run. >> it is a big run. >> we're going to get cramer's mad dash and count down to the opening bell in a few moments. take one more look at the premarket. only two times in the past ten years has the dow and the s&p been up both in january and february. last time in 2012 it has a shot with some nice gains for the month so far. back in a moment. shuman hto thstulatn

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♪ all right. we got about eight minutes before we get started for trading here for the week at the new york stock exchange. and everywhere else of course in the u.s. what's our mad dash? >> dolls and games are not dead, very much alive and hasbro is a very different company from mattel. didn't get a lot of credit, this last quarter was totally understandable because they're doing a little transition but didn't matter. people dumped the stock. that was a big mistake. now it's breaking out as it should. by the way, disney, they got

frozen which is a fantastic franchise from mattel. but remember it's not -- not everybody just plays video games. there are other games that people do, but they have actually kind of expeern shl and aspirational games. we're going to talk about that tonight with brian. this is the kind of quarter you say to yourself maybe one company has just pulled away from another. >> were there investors short the stock based on the mattel quarter? >> people thought it was going to be another one of these, the stock had run, and boom. boy were they ever wrong. there's a lot of scrambling being done right now also because they sell a lot of stuff in stores and everybody feels if you sell ilt it in a store it's no good either. so remarkable quarter. and made more remarkable by how bad mattel was. >> and one other name. >> another one very good tyson, been going up and down, because there's an s.e.c. investigation, didn't guide that much, but margins were much better than

expected. that acquisition they made, hillshire. >> yes. >> that just keeps on giving. a remarkable situation. remember this was a commodity play. it is no more a commodity. it's got high end -- >> an example of a time when they really paid up for hillshire, that multiple. >> but -- >> sock was at 40. unbelievable. chicken prices, i don't know, chicken wick wings, i had them last night at the game. always good. >> always. >> wing stop was a good story. i had them on last week. people like chicken. >> they eat a lot of it, that's for sure. and growing them even faster every day they get faster with growing them. don't get me started. >> you saying someone's using antibiotics? >> these poor chickens that can't even walk. all right, opening bell in about five minutes. we'll be back. we need to be ready for whatever weather may come our way.

my name's scott strenfel and i'm a meteorologist at pg&e. we make sure that our crews as well as our customers are prepared to how weather may impact their energy. so every single day we're monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. during storm season we want our customers to be ready and stay safe. learn how you can be prepared at pge.com/beprepared. together, we're building a better california.

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in two and a half minutes. a busy day as earnings fire up once again. it will be a busy week. the president's going to meet with some airline ceos later on. friday of course a meeting with the japanese prime minister. >> it will be interesting you see the airline -- i mean, the airlines aren't obviously hurt by the ban.

not that many. but much more importantly is i think that the airlines i wonder if they've been victimized by other countries. >> by other countries? >> by other countries, our airlines. there's always been a feeling that our airlines have been disadvantaged. i wonder if he doesn't say this is an industry that needs some help. >> bernstein did upgrade delta and american today. >> yes. i thought that was interesting because the ones that are better are the ones that are entirely domestic, like southwest. because there is price cutting in all these european routes. it's interesting to see the ones that have really been hurt like american, delta really been, yeah, kind of hung in there because it's a restructuring play, but a lot of that is just these overseas routes and southwest has hung in there, gary kelly with unique business model -- that's one to go to keep in mind. >> operationally is dhs making us comply with this or this, which is not happening now as we

await for this appellate court decision. >> look, that's been a challenged industry, but it's been so great in the last -- it was great last year. then it had this big decline. it's been coming back because the last quarter wasn't so bad. i still prefer southwest. alaska's very good too after they bought virgin. really good. >> in a similar vein, 210 from 188. >> they're talking about fedex spent in order to be able to handle what's going on. u.p.s. is so challenged. davis, i know there's a lot of ownership among people who work at u.p.s. >> yeah. >> i have to wonder if someone doesn't get involved there because this is a great business. and they just haven't been able to figure out the holidays. >> yeah. you know, i haven't heard the name in terms of you seem to be inferring the idea of an activist, but we're in that season. because the windows will be opening fairly soon and many companies for nominations given you want to do it prior to what

is typically an annual meeting let's call it the may-june timeframe. i don't know specifically, but in general. >> how about arconic? >> yeah, from the board. that's a big fight. >> at the bottom of your screen big screen. opening bell at the big board today, ubs highlighting its conference. over at the nasdaq the association of magazine media kicking off its conference in new york february 8th. it is going to be a big week for media earnings. we mentioned fox and disney, but we'll also get viacom this week, time warner, twitter later in the week, guys. >> does time warner, are they able to even talk about justice, david? they're just a thing of past -- >> yeah, i mean, time warner will talk about the regulatory review in order of extent and terms of timing and where things stand, the acquisition pending by at&t. not much more you can discuss on

those fronts. >> right. >> the most of the people who i have spoken with who are experts in this area expect that based on the vertical integration that that deal represents it should go through the doj review. by the way, the fcc really has no role here given the lack of any broadcast of licenses, there's certainly not many. but you do have this continued fear that the president's opposition to his coverage at cnn will in some way influence the view of the deal. i think all of us hope in the media hope that is not the case. >> right. in the meantime, hasbro acts like it's just got a takeover bid. 13. i mean, hello. >> that is a big move. >> that is a huge move because the shorts are just gaffed on that one. i mean just -- just on a major league hook. that was just brutal. actually, i like hasbro, i like brian. he's been on. he laid out a story when he was

on "mad money" last time about exactly what would happen. it's exactly what did happen. why people doubted him is insane to me. and when he takes his victory lap on tonight, i think he's just going to talk about more dominance. brian goldner is a great exec. and he did not fail in his mission. >> jim, what is their big product? what are they selling a lot of? >> this is a lot of disney strength. >> yes. >> frozen related strengths. >> frozen. also a lot of different games. when you see the numbers from something like play-doh, they're really extraordinary. there's kind of a back to basics. >> play-doh snrks. >> play-doh's been fabulous. i don't use it myself. >> that is an all-time high on hasbro. and interestingly there's, i mean, concerns about border adjustment certainly not applying in this case. >> no. not at all. boy, i tell you, it is so weird who does care and who doesn't.

>> i know. but we continue to get the rumblings and some reporting around where we stand on tax reform and so much of it does come back to the border tax adjustment, which of course is a key part of the blueprint from house ways and means, kecvin brady, its chair, paul ryan of the house, both of whom support it. >> right. >> but the idea you're going to be successful in the senate or where the trump administration stands at all on it. and we spoke to gary cohn who said on friday they're not including it but not excluding it but not including and don't say i'm excluding it because i'm not. >> right. >> it's the key. it's the key because it will raise the revenue necessary to be able to submit it under reconciliation as neutral under dynamic scoring. and if there's a lot of opposition to that border tax adjustment, tax reform itself takes a very different form and a different path. >> right. well, do the retailers have a good lobby, david, really? i mean, walmart does.

>> walmart does. walmart's already hired from what i understand and i've been doing reporting on this for obvious reasons five lobbying firms. why not hire five different ones? >> do they all coordinate? do they sit around in a room? what do they do? >> i don't know. i don't know. but that gives you a sense as to how important it is. >> and how about the senators from walmart -- i mean from arkansas. where are they? >> they're both republicans. >> right. >> and i don't know how they feel about border tax adjustment, but i'm sure they have an important constituency in walmart and its many employees in the state. and it is headquartered of course in bettonville, arkansas, a booming town, i had had not been to in a while but it's grown dramatically ever since i've been there, i've been there many times. >> it's factored in on the department stores, but their numbers were bad. it's factored in some of the suppliers, not other suppliers. i mean, it's the most -- the

analysts are so inconsistent with the exception of matthew boss from j.p. morgan which is, please, this group. >> this is going to be such a key area. and it's complicated because of course proponents of the border tax will also say don't worry the dollar will adjust almost exactly for that 20% tax. >> good luck. >> and the question is will it. and then if it does, what does that do to the exporters it hurts? >> on the currency front, by the way, we should mention the russian ruble on a weekend where putin got mentioned a lot is at a 19-month high. gold at the highest since november 16th. >> and rand gold blew the number away with incredible growth. we were waiting for him to put together a quarter and he has put it together rather remarkable flt i think that's interesting when it comes to russia by the way the only really publicly traded company i pay attention to with that is pepsico, which reports next

week. i think it's worth noting there may be individual commercials that did well, but there was a halftime that was a pepsico fabulous ad. >> what'd you think of lady gaga? >> i thought she was unbelievably good. i thought that she -- that venue's not an easy -- did she have a great time? is she in shape? holy cow. >> best halftime show since prince, ten years. >> yes, 2007. yes, best since prince, don't you think? >> i was very impressed. how do you even focus when you're hanging -- she was really high in the air. >> she was pumped in a way, man. >> wow. >> i thought it was so exciting. of course the game at that point hadn't been that exciting. >> no, that's true too. >> one thing we haven't mentioned on the ads, the mainstreamization of voice activation in your home, right? google home right out of the gate. >> right. >> amazon air, prime air getting an ad as well. >> yeah. i watched it with -- you know,

with ten couples and it is amazing how many people have these devices. and by the way, they haven't set them up, but their kids have. you need a little savvy, only kids have that savvy. adults don't have that savvy. >> really? you can't set up a alexa? it's pretty easy. say alexa, set yourself up. >> it's kind of plug and play. >> well, it kind of should be, yeah. >> really? the kids are ordering things left and right by mistake. >> that's true. >> how about netflix? stranger things 2. >> but not until october. >> right. >> i love stranger things. i'm in o.a. right now, very dark. is it worth sticking with? >> yeah, i go all the way on the oa. >> okay. that's good. >> original series out of netflix. >> interesting note today, guys from morgan stanley -- i think it was morgan stanley on nxpi, jim, i don't know if you saw this, we've talked a lot about the fact there's a fairly large

spread between $110 cash qualcomm is paying, by the way the deal is not going to close for a long time. >> right. >> there's continued concern though maybe shouldn't be about chinese justice approval in case things really ratchet up in terms of tension between china and our country, but morgan stanley says, you know what, doesn't matter to us whether this thing gets taken out or not, we still think it is worth more than $110, based on its fundamentals. >> i totally agree. it was a blowout quarter. my travel trust owns this. very rare, the trust always sells when there's a bid, not this one. i think the bid underrates the company. a big breakup fee by the way. >> and there's no other buyer there, which i remember when i was reporting on this initially with that. so the question would be, it's a tender offer, the question would simply be for shareholders are you happy or having it be alone. >> right -- i mean independent. >> right up there with broadcom. >> that would be a bummer for qualcomm should that for some

reason come not to pass. shareholders can speak here. this is a sad note. we're not tendering. >> this is a very big deal, by the way, don't forget nvidia reports this week. >> yes. >> that's so loved. i mean, there was another guy taking a shot at saying bad things about it and the stock down in the premarket but here it is again. nvidia being machine learning, artificial intelligence, gaming. >> right. >> data center. >> they've got it. automotive, gaming, data. you say data, i say data. >> well, i say tomato. >> and i say tomato. >> let's get to bob pisani on the floor. dow's down 13 to start the week. good morning, bob. >> good morning, carl. happy monday everybody. little weakness here. but we're weaker in europe. show you germany, france, spain, the whole complex over in europe trading to the downside. draghi came out and talked about the european recovery being resilient. that's certainly a good sign. eurozone pmi highest level in 69 months. yields blowing out over there on

the stronger economic data, but i think what's happening is a lot of europe is moving on politics, not necessarily economics even though the economic situation is better, populist politics really a big thing. we've got elections coming up in the netherlands and in france and a big, big topic over there. here in the u.s. you call them maybe trump sectors, i don't know, your financials, materials, industrials, all a little bit weaker today here. industrials just turned positive. health care also slightly on the weak side. very interesting research report, i think the number one topic on research reports was the goldman sachs report this morning. essentially saying that trump trades may be starting to fade a bit. that the economy's close to full employment so the scope for growth is capped. pro-growth policies that we've been talking about like lower taxes, regulation reduction could take years to realize. and that growth sentiment overall is peaking. i think there may be some truth to the idea that the recent strength in the economic data that people may be pushing out

and extrapolating a little too much in terms of gdp growth expectations, but the state of the market's been very strong. we've been pointing this out all last week that the indexes, the stock indexes are near record highs, breadth has been bullish, sentiment moved from overly bullish to mixed. that's a good sign. fundamentals have been improving and the primary paradigm remains reflation overall. it's true the dollar's a bit lower recently, yields are a little lower, but for the stock market still very much up intact here. and there have been periods if you take a look at the trump sectors there have been periods where the trump trades stalled out, but the sectors most associated with the trump trade financials, materials and industrials, they are the market leaders since the election. consumer staples, utility, everything else is sort of second tier at this point. yes, it's been stalled at certain points but hasn't faded away yet. they may be a bit ahead of themselves in terms of the call. many companies have them, if you

look at some of the major names associated with the trump rally, united rentals, infrastructure u.s. steel in infrastructure, j.p. morgan in financials, this is just since november 8th union pacific in terms of transports, general dynamics again in the aerospace area. these stocks have had periods where they moved sideways and a little lower, but overall this trade is still very much intact. finally heard jim and carl talking about tiffany's ceo leaving, abercrombie, ralph lauren ceo leaving recently, the big problem is the same issue for all of the retailers at this point. they have to find ways to innovate and hard to find people who can do that in an industry that's changing so rapidly. hard to find someone to sell into e-commerce successfully and to react to changing consumer demand. you have a company with very long lead times here. you can't change it on a dime like you can with apparel. you're dealing with jewelry. so bottom line is very, very tough business. right now the dow down 17 points. carl, back to you.

>> all right, bob, thank you very much. bob pisani. let's get to the bond pits as well. rick santelli at the cme. good morning, rick. >> good morning, carl. what a morning. lots of good super bowl jokes, i'm sure you're all hearing the same ones i'm hearing here in chicago. you know, if you look at sovereigns, rates are mostly lower. if you look at some of the weaker sovereigns, those rates are mostly higher. real split decision. look at a two-day of tens and of course realize that last week had an fomc meeting and labor statistics, so we're really coming down. year-to-date of tens though shows that even though we've reversed we're basically hovering. darn close one basis point away from unchanged. look at one-week of bunds, definitely a buy sort of downside under 40 basis points. but when you get to the southern economies and remember bob telling you there were some pockets of strength in some of the european areas and this has been a theme for 2017 indeed started late in 2016, look at a one-year it's around 110 basis

points, clearly, clearly still upside there. same for the italian ten-year hovering a bit below 2.35. and then finally the foreign exchange aspects, this really is interesting. we basically held right around that 99.5 level. you can see that it's come back, it's slightly over 100. the close in this regard over the next several sessions will be key for technicians trying to really understand were there too many longs in the dollar index for all the motivations we've been talking about? david faber talking about how the border adjustment tax indeed is supposed to force the dollar higher, maybe speculators sniff that scent a little bit too early. no matter how you slice it, key area for dollar index. carl, david, jim, back to you. >> all right, rick, talk to you soon. rick santelli. when we come back, alibaba's jack ma sending a trade warning to president trump and the world. also ahead, the ceo of 84 lumber is with us after unveiling a controversial ad during the super bowl last night. dow's down 22, "squawk on the street" continues in a moment. e foodyst f d dveo be

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♪ an indirect warning from jack ma to the president on trade during a visit in australia. alibaba's executive chairman said, quote, everybody's concerned about trade wars. if trade stops, war starts. we have to actively prove that trade helps people to communicate. and we should have fair trade, transparent trade, inclusive trade. while meeting with then-president-elect trump last week ma announced alibaba would help to create a million jobs in the u.s. he said it's about trade of values. he goes onto say trade of culture. >> geez, a lot of pushback on the agenda in the last few weeks in different forms. all that comes back to, again, what you keep saying which is how quickly can you get to what raises earnings per share.

you need repatriation, but you really need corporate tax reform for most of them, not every company's retail, most companies benefit. >> they do. you get it down to 15 as the trump administration says or even 20 as i think ryan is more comfortable with, that's a big change. but guys like jack ma are going to be important potentially in sort of bridging this difficult potentially difficult period in speaking for trade and speaking for a good relationship between china and the u.s. >> right. >> there aren't many of those kinds of people you can think from the business community who can sort of do that. >> it does seem that when members of the business community sit down with the president, it goes better than i think that most people would think. right? i mean, considering use the example of goldman sachs. a lot of people from goldman sachs in the administration by the way, remember goldman sachs was not a loved company during the campaign. >> no, it wasn't. >> it will be interesting to see when you sit down with the airlines ceos if he comes out

and says, look, our airlines need to be protected from foreign airlines, really kind of interesting. >> journal has a piece this morning on the deficit, federal debt rising on pace to hit a record as a percentage of gdp. we got the debt limit expiring next month. >> oh, no. >> does that make any kind of tax cut more difficult to argue? >> well, i think you have to have the border tax. >> border tax is a key revenue producer, but also infrastructure spending. that's got to be more of a uphill climb, doesn't it? with those kinds of numbers staring you in the face and still a part of the republican party certainly that is very much in favor of stringent spending. >> right. you need a giant bond deal. you know, $500,000,000,04 it wi fantastic.

>> we should have done it when the ten-year was 1.5 or wherever we were. that would have been nice. >> sure, everything should have been done at that point. >> remember apple hit the lows twice. >> they should have ended the game at the end of the first half. it would be a completely different feel, wouldn't it? >> we'll get stop trading with jim in a moment. dow's down six.

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time for cramer and stop trading. >> barron's had a critical piece this weekend about chipotle and i point out that chipotle company reported a decent quarter, not a great quarter. but this is all a question of timing. barron's talked about 10% fall this year, maybe even bigger than that. i would point out that, again, the last instance was december 7, 2015. and i always have to go back to the fact taco bell came back and jack in the box came back after far worse incidence. and i think when you go over that quarter you hear many positives, not full positives, but another six months and chipotle is going to be i think higher. i don't think it's going to drop 10% from now. it was down much more in the premarket. but i would caution people difficult to bet against company that does have an ethos that hasn't completely disappeared. >> you've been resolute on this

for a while. >> yes, i have. look, it was terrible what happened, but the stock they bought a lot of stock back when it's under 3.90. they did not buy that much this quarter, but i feel chipotle is a terrible short. but you got to wait five more months. five more months and i think you're okay. >> jim, what's on mad tonight? >> well, we got brian goldner from hasbro. so let's take a look and see whether that's a sustainable rally. i think it is. but after you have such a big move, oftentimes it's hard to have a second. but let's take a look. >> think he'll bring play-doh with him? >> i do. yeah, i like these high end retailers. i don't know how bad ulta will be hurt by the border tax, but ulta is doing well. i took that from the estee lauder call very good, just another one throwing out. >> i don't think it would be hurt too badly, right? >> no, i don't think so. ulta needs to do mens. >> yes, you and i were signing in at a corporate office the other day, we won't say which

one. >> yes. >> but we had to satake a selfi. and i said to you your ulta thesis, always got to look good. >> it's terrible to go out without makeup. >> i know, holding up the ipad taking the picture, you don't look good in those. it's hard to look good in an ipad picture when it's like this, okay. >> i got to get someone to spray paint me whenever i go out. just when i walk down the block people say who was that guy. spray paint. that's the answer. >> i hear you. i'm happy to take care of every morning -- >> hold your nose, have some krylon spray. >> jim, see you tonight "mad money" 6:00 p.m. eastern. when we come back, the story behind perhaps the most controversial ad of the super bowl last night. the owner and president of building material supply company 84 lumber is with us. dow quickly into the green up ten points.

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welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at post nine of the new york stock exchange. markets up just a little bit here. dow's gone into the green to the tune of about six points. busy week again as we watch the world of earnings and increasingly appellate courts on this immigration order. >> and a busy hour ahead. our roadmap begins with the future of dodd/frank. president trump promising to roll back regulation, what do we expect from the banking sector? we talk to former congressman and author of that legislation, barney frank. >> then with the dow rallying back to close above 20,000 last week, will the markets continue their gains as the president lays out his policy? >> and trouble at tiffany, the ceo departing after disappointing holiday sales and weak financials. we'll tell you what to expect from that company next. first let's get to washington, d.c., eamon javers with the latest out of the nation's capital. good morning, eamon. >> good morning, carl. not expected to be a business focused day here in washington, d.c. after we saw a legion of ceos at the white house on friday. today, the president is still in

florida. he went down to mar-a-lago over the weekend, had a super bowl watch party last night. but he's already been tweeting out some of his complaints and criticisms of some of the criticism he feels he's been taken over the weekend. start with this first tweet this morning, he said, any negative polls are fake news, just like the cnn, abc, nbc polls in the election. sorry, people want border security and extreme vetting. so the president there defending his executive order on immigration. and then also this one in terms of some of the news coverage of who's really in charge inside the white house. the president saying, i call my own shots. largely based on an accumulation of data. and everyone knows it. some fake news media in order to marginalize lies, so president paying close attention to the media coverage this morning. he is down in florida as i said he's expected to meet with leaders at centcom later this afternoon. and the pace should pick up,

expecting airline ceos on thursday to meet with the president here in washington, d.c. so this administration continues to go sector by sector meeting with all those chief executives. we'll see what's on tap for that meeting later in the week, guys. >> yeah, as investors continue to try to figure out what it means for those sectors. eamon, thank you. >> you're right. >> for more let's bring in jared bernstein, former economic advisor to vice president joe biden and managing director at cowen group. so, jared and jared -- >> well said. >> first up the idea that mostly 100 technology ceos are now filing a legal brief to oppose the immigration order. what's the significance of that? >> well, first of all, i think it is significant. if you look at their brief, they claim that the immigration ban is both discriminatory and bad for business. well, i think it's definitely discriminatory, i don't know that any objective person would challenge that, but let's talk

about bad for business. you know, we've already seen examples of people not being able to get into the country. clearly microcosms, we're talking tens and hundreds, not hundreds of thousands yet, but some of those people are physicians, one of them is an expert in math. these are people that historically have been very important for american innovation, the type of folks we're talking about. now, let me just say this, one of the reasons why gdp growth has often disappointed in recent years is because the growth of the labor force has slowed. now, donald trump and his kind of merry band of billionaires claim they want to double the gdp growth rate. the idea that you're going to block entry into the united states to people who want to join our workforce is absolutely antithet kal to that goal. >> let's stick with the economic anl cyst, jaret, and ask about that claim in this brief that it is disrupting business and hurting economic growth. do they have the ability to make that case? or is it just simply they don't agree with it?

and i should mention some of the biggest companies that have signed this legal order, microsoft, alphabet and apple. >> right. so, i mean, i think whenever you're looking at a brief like this, obviously you're trying to make points that are both going to score in public opinion and in the court. you know, i think there's certainly certainly empirical proof they'll bring up. the bigger point to me however is political. by having nearly 100 companies sign a brief, it makes it much harder for the president to argue that this is simply the democrats pushing back, that the election was already fought and this is just sour grapes. you know, these are big businesses, big employers pushing back. and i do think it changes the political dynamic of what's happening. >> speaking of politics, mr. sieberg, i'm sure a lot of clients at cowen read your

research are interested in this issue, but i would bet they're more interested in tax reform and the border tax adjustment. every day we get data points, though nothing firm in where do we stand, but what are you hearing -- >> i'm sorry, i'm not sure -- >> mr. sieberg and then mr. bernstein. >> smart move. >> so what i would say on that front is, you know, i think that what we're hearing from clients is that it depends upon whether you're looking at retailers or manufacturers as to where you're really thinking about this tax. i think clearly every day there seems to be a headline pointing in a different direction as to where we're ending up. what is concerning us is that the pace of action on obamacare repeal is slower. and if obamacare repeal was supposed to be the simple thing for this republican congress and

this republican president, then it makes us concerned about how they're really going to be able to tackle tax reform in a comprehensive manner. >> yeah. >> which is far more difficult. and really splits the business community. >> jared. >> so on the border adjustment tax, a few weeks ago i gave it a 20% chance of clearing a legislative bar. i might kick that up to 30%, but even that may be kind of optimistic for those who support the tax which is largely going to be exporting firms because they get a subsidy. the importers who are dinged by this, and dinged significantly, are just very powerfully in political terms whether you're talking about the walmarts or targets of the world or for that matter some of our energy importers, the koch brothers themselves obviously important players in this sort of thing are hostile to this tax. now, congress might start talking about carve outs, but then you run into jaret's very accurately mentioned problem there is once the complications start to set in, the thing gets

even more unlikely, i think, to cross the border, if you will. >> and the other problem -- >> jaret sieberg. >> -- once you start doing one carve out, you get a second carve out and now suddenly you're asking tea party republicans in the house to vote for a tax plan that's going to increase the deficit and the debt. and that is a big complication. >> more broadly, jaret sieberg, you listen to these sunday shows over the weekend and it's all about constitutional crises and stresses between the executive and the judiciary and can the country survive. you walk in on a monday, dow's down one point, and the vix is below 12. how long does that last? why is it happening that way? >> well, i mean, obviously it's the patriots victory. i mean clearly that has everybody cheering. as a kid from boston, what do you expect? but no, more broadly i think that the market is pretty smart at looking past some of the tweets and looking past some of

the executive orders that don't actually do that much that are more symbolic. and so, where you know, i think they're looking forward and the market is still fairly optimistic on tax reform. we're getting more pessimistic. obviously jared is more pessimistic, but the market is still envisioning less regulation, less taxes. and that's good for the market. >> well, let me just say that i actually think at the end of the day there will be a significant tax cut, and it will disproportionately favor the wealthy. they'll probably be some deregulation, but i think the market has overshot on the trump bump. and i think as you see some of the kind of very significant difficulties that this administration is having getting their act together, and a lot of new administrations face that, this one in particular though because they're understaffed and because trump is such an unusual manager, that i think markets are coming back down to earth on this point. i also think the strength of the dollar is a really interesting

variable here because of course that pushes against trump's goals of reducing the trade deficit. so there are a lot of moving parts. and i think as the market kind of tunes in on the real difficulties of getting anywhere near the promised agenda that trump is talking about, some of the initial optimism will fade a bit. >> yeah, that's sort of the point of a goldman sachs research note over the weekend. >> right. >> final question to you, jaret, you said markets are smart looking past the tweet risk. this morning we got a warning from alibaba's jack ma saying that if trade stops, war starts. speaking in melbourne, clearly warning against a trade war. do you think investors are smart to be looking past this risk as we continually hear a more controversial approach to china, to mexico and a lot of major trading partners from this administration? >> well, i think there's a difference between tweets about a judge and what the order does and broader issues about this administration's policy on trade.

i mean, this administration is taking a protectionist tone on trade. that is yet to translate into actual action on trade. but if you talk about areas where we believe the market is way too optimistic, one of those areas would certainly be that we're going to see a change in the perspective of the president. he campaigned questioning trade, and i think you have to have every expectation that he's going to deliver on that promise. it's another warning. >> yeah, i mean, i would just say that before the tweet about the judge, the so-called judge, which made all the news, president trump put out a tweet saying countries charge u.s. companies taxes or tariffs when the u.s. charges them nothing or little. so, jared, he hasn't really backed down from this. >> yeah, no, one thing that jack ma's statement kind of registered with me is that i'm pretty convinced that if a trump administration does half of what they say they're going to do on tariffs or even the border adjustment tax, which does violate international law, i believe, that other countries

will retaliate. now, when you say trade war, it really sounds like a terrible thing and i don't think it's good. but what it means is that we're going to raise our tariffs and they're going to raise their tariffs. at the end of the day that doesn't help the trade balance. it probably strengthens the dollar and it's pretty self-defeating. that's what a trade war is. we put up these restrictions, they put up those restrictions. we're not talking about tanks here, but we are talking about bad economics. >> we're going to talk a lot more about this later in the show. for now guys, thank you. jared bernstein and jaret sieberg. >> when we come back, we'll talk to ubs director of floor operations art cashin, get his take on the markets for the day and the week. later on former congressman barney frank will join us, talk about financial regulation under a trump white house. dow is almost perfectly flat. back after a break. etget saight. u'

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say hello to internet speeds up to 250 mbps. and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. some flattish action to start the morning, but following a strong rally in stocks at the end of last week, s&p's riding a three-day winning streak. art cashin's here at post nine, ubs director of floor operations. art, good morning to you. >> good morning. >> you called friday a gol di locks with influence on deregulation plus the jobs number. >> yeah, the jobs number was a goldilocks aspect of it you had

a big jump in payrolls but when you drilled down wages were not strong enough to push the fed, the chances of a fed hike in march fell from around 20% down to 9%. so it was a good number. and also lost in it was the idea that some of those jobs -- you lost jobs in the 25 to 54 area, and most of the gains were over 55. so that sounds like somewhat part time work. and we'll see. but for today stocks are consolidating the big gain they had on friday. but we do have a very slight flight to safety theme going on. you got the dollar up, you got gold up and you got treasuries up. so that may be some of the geopolitical nervousness you guy were discussing earlier. >> it's hard to focus on things outside the world of politics. we do have a few big earnings reports this week, disney, coca-cola, general motors among them. are we getting a real clear picture from earnings about

policy expectation and the economic outlook? >> no, unfortunately. and i think it's because you're not getting much detail out of washington. it's very difficult for ceos and cfos to give you a projection for the next half a year or year if they don't know what taxes they're going to be paying, what kind of schedule we'll be on and maybe a little better picture of what the deregulation is. so a little bit of a problem. i just have a gut feel though that after some of the bouncing around that happened on the weekend from the so-called judge and whatever that some of the advisors that mr. trump are going to try and make this a little more strategic in some of these releases that come out. so we'll see. i mean, he can blow me right away with a couple new tweets, but i feel he wants to get out of the spotlight a little bit

here. >> sounds like you're suggesting absent some swans, so to speak, we're going to remain in a range as tight as we were in january which was historically pretty thin. >> i think that will happen. the key event away from surprises in washington is next week janet yellen goes to congress to do what we used to call the humphrey hawkins testimony. and we'll get a stronger feel of how many hikes they think they're going to get. i don't think they're going to be able to do three at all. >> really? feels like this time last year. >> yeah. i think if they're really lucky and adapt, they might be able to do two. >> really? >> why? >> as a reminder to viewers, last year art was so stubborn all yearlong said there will be no rate hikes, no rate hikes in '16. we finally got the one in december. >> right. >> which was a lot less than the four that the fed predicted. >> yes. >> so why are you feeling that way, art?

>> well, i think that while the numbers look good in the payrolls on the top line. >> yeah. >> as i said, if you look at the job composition, not the right class getting it. so i think the economy may be struggling a bit more than we think. secondarily, it depends on how they prioritize things in the congress. if they go after the first order of business is the health plan, that's going to slow everything up. because they're beginning to realize this is not a press one button and everything moves. so that can delay. you're going to get a further delay on the supreme court judgeship. so i don't think we're going to see tax reform and deregulation move quite as rapidly as everybody -- as the market clearly was hoping. >> goldman says now it pushes it out to make it a 2018 story. the question is can the market continue to rally on hopes of the action coming, whether it's

in 2017 or 2018? >> well, i think if it becomes a 2018 factor, the market will begin to say, well, i got a lot of this priced in and there's still some doubt. secondarily, if it becomes a 2018 item, it will be critical how far into 2018. because you're going to have congressional elections coming up. and that will be very important. and the republicans if they have a decent showing could take almost full control of the senate. there are a great many democratic senators that are vulnerable running in states that trump took. so if the republicans give a credible presentation long enough before that, they can make a big dent in the house and also in the senate. >> how much is riding on what this appellate court says this week? if in fact they give us anything definitive that isn't passed onto another court? >> well, the idea is will it be

kicked up to the supreme court. and the perfect irony there will be a 4-4 split, which will certify the appellate court and get them all nothing that they wanted. so that's why i think they're going to, if you would, redraft this. i think they're going to let people with permanent visas in. you're going to let some people come in to make it far less exclusionary. and you might be able to get it passed through then. >> art, a lot to get to this week. we'll talk to you soon. art cashin. >> as the dow moves higher led by goldman sachs. adding almost 12 points. also take a look at shares of hasbro. speaking of strong, toymaker beat in earnings revenue expectations this morning raising quarterly dividend as well. big boost in the girls section, the dolls fueling this rise. hasbro shares up 15%. much more "squawk on the street" coming up. ew yor tal rst aantiu,

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toyota reporting earnings this morning as continued questions over taxes on imports swirl. our own phil lebeau has been digging through the numbers from

toyota. he joins us with more. phil. >> david, the fourth quarter numbers and by fourth quarter we're talking last quarter of last year. i know they're on a fiscal calendar for toyota, but we're going to refer to that as the fourth quarter. for that quarter the numbers are not that impressive for toyota. in fact, overall when you look at the company the net profit of $4.3 billion was down 23%. but it's the guidance for 2017 that's getting a lot of attention. toyota is raising that guidance almost 10%. however, most of that is due to the weak yen, which obviously helps pricing of its vehicles that they're exporting from japan. and when you look at manufacturing, this is a key part of the conference call that just wrapped up within the last hour. number of questions about capacity in the united states, 65% of the toyota vehicles sold in the u.s. are built in the u.s. toyota is increasing production at an indiana plant, but that's really not going to kick in until the fall of 2019. and we want to show you the dollar versus the yen. the reason we're showing you this is because prime minister

of japan, shinzo abe, is going to be meeting with president trump on friday. remember, just last week -- i think it was last week or a week and a half ago, when the big three ceos were at the white house, they had a chance to sit and talk with the president. and, guys, you can bet that one of the things they brought up is the fact that for the japanese automakers the yen continues to give them advantage when it comes to pricing in showrooms here in the united states. and they are certainly not happy about it. they haven't been for a number of years. interesting to see what will happen when that topic comes up on friday between the prime minister and president trump. guys, back to you. >> i mean, phil, you just have to look at a longer term chart. it argues the complete opposite. the japanese yen has strengthed. so all prime minister abe needs to say back there. i also noticed that the toyota president was meeting with abe ahead of this abe/trump meeting

this week. >> right. >> do you anticipate any announcements there? >> well, in terms of capacity being added in the united states, they're pretty close to capacity. the fact that they announced, i think a week and a half ago, that they're adding capacity in indiana, that's the type of announcement if we get any in the next couple of months, that's the type of announcement we'll get from toyota. but at this point they're not changing their plans for building a plant down in mexico. and remember the president has tweeted about that. and also keep this in mind, toyota gets a lot of its vehicles that they sell here in the united states something like 500,000 from plants up in canada. so the question becomes, okay, if you're going to be slapping an import tariff on those vehicles out of mexico, what about the ones coming in from canada? >> yeah. i think we're going to remember that 65% number for a while, phil, as this debate continues to rage. >> thanks so much, phil. when we come back, it is being called the most controversial ad of the super bowl last night. coming from building supply company 84 lumber. owner and president maggie hardy

magerko will join us to discuss their strategy, the border wall impact of their ad, stay with us. soins arrid. desigfo sinr drrrid.trodin fitix30 crosso desigfo whspci daiurbph. your do abouyour,k ouisthgh s. ot tcif u tafopain

good morning everybody. i'm sue herera. here's your cnbc news update at this hour. delegations from russia, turkey, iran and the u.n. are meeting today in kazakhstan's capital to discuss the cease-fire agreement with syria. they will discuss the implementation of the cease-fire and measures needed for a lasting peace in that region. hundreds of people in japan protesting against the resumption of offshore construction work to relocate a u.s. marine base in okinawa. riot police were called in after protesters began a sit-in protest and prevented construction vehicles from entering. queen elizabeth marking her sapphire jubilee today becoming the first british monarch to reign for 65 years. the occasion as you can see there was marked with a 41-gun salute in london. the palace said the 90-year-old

queen was spending the day quietly at her estate in eastern england. and if you're a little tired today, understandably so. it was a super bowl for the ages as tom brady won his record fifth championship with a grilling overtime win. fox's telecast drew 48.8 ef rating but the overtime let fox add four more commercials allowing it to bring in an estimated $510 million in ad revenue. and that's the news update. you're up-to-date. back to you, carl. sue, thank you very much. the president meantime promising to scale back financial regulation including parts of dodd/frank. confusion persists over the president's actions on the fiduciary rule. our own ylan mui has more at headquarters. >> that's right, carl. the administration told us it would delay the rule's start date, but the memo includes no such language.

that's a change that caught both industry groups and consumer groups alike off guard. of course as you know this will require financial advisors to put best interests first and delay had been considered a major win for the industry. they've argued the rule exposes them unfairly. this could cost the industry as much as $20 billion in lost revenue. pushing back the start date also would have given the labor department time to determine how to change the rule. now, i've been talking to folks on both sides of this debate all weekend, and they say the memo is causing a lot of confusion. the fiduciary rule is supposed to take effect on april 10th and now no one is sure what its ultimate fate will be. we've reached out to the white house for clarity on this issue. we want to know if there might still be a delay and how they would do it and wonder if the white house has authority to postpone the rule. there's still a lot of unanswered questions. back to you, carl. >> interesting story, ylan, thank you. please keep us posted if you

hear anything. ylan mui back at headquarters. meantime, trump administration pushing to reform dodd/frank. calling to make suggestions within 120 days but rolling back the complicated bill certainly won't be easy. and joining us now to discuss that, dodd/frank architect former house financial services chairman barney frank and aei fellow jim. gentlemen, welcome to you. mr. frank, i think we have to start with you. what is this like watching your legislation with your name on it that you helped build being rolled back? the president says he wants to do a number on it. we saw the first action in executive order. what's it like for you? >> well, it's not personal at all. i don't feel anymore strongly about this than i would have other important things that were done. this is a matter of public policy. secondly, the executive order really doesn't do anything. it literally is a note to his own appointee saying please tell

me what you think i ought to do. it has zero binding effect, unlike the fiduciary order which you know was not part of our bill, it came under the pension law. what we have is this, unlike the health care bill -- and i voted for the health care bill and supported it, but it was controversial for a number of reasons. financial reform has never had that kind of division in the public. it's overwhelmingly popular. that's why during the period when the republicans were in power in congress before this they never moved for the total repeal of it the way they did with health care. and you're going to need 60 votes to change any of the major legislative pieces. the only thing they could change with 51 votes, reconciliation, is how you finance the consumer bureau. i don't want them to do that, but there's probably no way to stop that. but other than that -- >> right. >> -- if they talk about weakening the substantive powers to protect consumers or putting people back in the business of being able to make subprime loans to people who can't repay

or re-empowering an aig to get so deeply in debt with credit default swap razzle-dazzle they can't pay off, i think they'll find a pulpit resistant and i don't think they'll get 60 votes in the senate to do it. >> and yet the financial stocks have been flying. i mean, they had another jolt on friday as a result of this executive order. up now 21% as a group in three months. jimmy, what's realistic? even if this order is symbolic, what do you think these banks can expect in terms of changes to dodd/frank now that congress does have to approve it? >> listen, i think that republicans have tried very, very hard to repeal it and replace it with something they call the choice act. you heard gary cohn talk a lot about it last week how it's crimping business lending. i don't think it's true but the republicans are going to focus on this. barney makes a good point going to be hard to repeal without 60 votes.

there's the orderly -- use reconciliation to get at that. if you're not funding that, you kind of destabilize dodd/frank. in a way it's kind of like obamacare which if it's destabilized, they need to find a replacement. if you destabilize dodd/frank, then you need to find a replacement. republicans think they have one. and i think they're going to push that hard. >> well, mr. frank, today "the wall street journal" has a story of course about excess capital or what they deem excess capital at many of the banks. the idea being that a more lenient dodd/frank would allow the return of that capital. go down the road for me in terms of what they can and can't do when it comes to capital and whether that would be something that would ultimately be necessary to get 60 votes in congress to support. >> well, actually, that's a very important point. this bill that they're talking about, that's jeb hensarling's bill. he's an outlier even among republicans.

he's a very rigid, i would say, and very pure he would say ideological view. his approach by the way is substantially to increase the claims of the banks to hold capital -- by the way, if you're worried about the banks lending, there's only one provision in the financial reform law that restricts lending and it's one that says please don't lend money to poor people, you can't lend money to poor people who can't pay you back for their mortgages. literally that restriction irresponsible subprime mortgages is the only lending restriction. in fact, one of the things that some of the people in wall street don't like is a pro-lending move. it's the volcker rule which says to large banks please get out of the derivative business, stop spending time trading and do more lending. goldman sachs which is helping to populate this administration because they are making less money from trading than they had been before has created a whole new entity to lending.

go back to mr. hensarling's approach, nothing cuts back more on lending more than that. the higher the capital you have to maintain, the less lending you're going to do. >> actually, that's the best bit of the hensarling bill is that as it would raise capital requirements doesn't raise them far enough. and listen there's an emerging consensus. the point of dodd/frank was to prevent another financial crisis, all right, but there's emerging consensus whether look at research from brookings or minneapolis fed that dodd/frank simply hasn't done that. it did not go far enough. what we need is to have much thicker capital requirements to prevent another financial crisis. so do we need to take another look at dodd/frank? we absolutely do. >> well, you can constantly -- >> congressman -- i'm just wondering to the degree there are tweaks that you or democrats would go along with, what would they be? for example. >> well, by the way, that consensus is very controversial. there's no such consensus. there are some things that the republicans i wish had done

before. for example, smaller banks, banks under $10 billion in assets. in 2013 dan tarullo, the chief under obama administration says let's exempt them from the volcker rule. i favor that. raising the $50 billion, again, tarullo said that in '13 and i agree with him. i don't think banks at 70, 80, 100 billion in assets are a threat. that one i think should change. the problem is the republicans who've been in power say the house for all these years since we passed the bill nearly seven years ago haven't wanted to do those smaller improvements because they would like to -- they're insisting on repealing the whole thing. by the way, as to the orderly liquidation, that's the part that outlaws bailouts. that's the part that says what the bush administration felt it had to do in 2008 when it paid off $170 billion of debt that aig hadd incured by credit

default swaps, that can't happen again. so if in fact they don't fund orderly liquidation, that's a way that makes bailouts illegal. repeals the authority to do that. if you don't have that, i guess you're getting back into a bailout situation. >> was the u.s. economy hostage to big banks in 2007? it was. is the u.s. economy hostage to big banks in 2017? it still is. that's a problem. >> you still think it is, jim? i mean, i'm interested -- >> i'm worried enough that it is. >> you think more capital is what's an issue here? >> yes. >> we've got more capital in the system now than we've ever had and as you know the banks complain in fact it's too much. >> right. i know they complain it's too much. listen, i worry about -- listen, there seems to be plenty of lending going on whether you look at commercial loans, consumer loans, that doesn't seem to be a problem. what i worry about is another financial shock and then having ten years of lousy economic growth. there's a cost to that. i would like to see sharply higher capital requirements like neil cash ka ri at the

minneapolis fed has been talking about. >> can i respond to that? the problem is not just the size of the banks but the size of thein debtedness they can't pay off. because what the bill does do it does increase capital requirements, empowers regulators to do that and you've had the basel agreements that do that, but what we've said is this and particularly with derivatives. we don't regulate lending very much except subprime. what the bill says -- not again, you cannot like aig indebt yourself through the derivative mechanism way beyond your ability to pay it back. so what we have done in this legislation is to severely restrict the ability of these financial institutions, the large ones, to become so indebted they can't pay back their debts. that's what threatened the system. it's when lehman brothers and aig and others became indebted. it's not size alone that does it. it's the size of indebtedness which they don't stand behind. part of that is for capital, i agree. but part of it is to keep them from doing that in the first place by requiring derivatives go on exchanges requiring margin

posted for derivatives. so we've substantially reduced the extent to which these large institutions can threaten us by having their own debts get out of control. >> right. right. >> don't we have to bring in other financial regulators into this conversation as well? it's not just congress. and it's not just the president and the administration and the treasury. there's also the fed. and to david's question earlier, barney, don't you have to have the fed be the one approving any capital return in the form of dividends and buybacks to shareholders? and i just wonder where janet yellen is going to fit in with this administration when it comes to deregulating banks. >> well, that's true. in fact, it is up to the fed. but you do have the ability of the administration -- i think frankly this is what's going to happen. on the whole there's going to be some deregulation because trump is going to appoint people who won't use the power that they have. he doesn't get control of the fed for a while, but he gets the occ, has secretary of treasury, fdic, he'll have some of those other -- and the s.e.c. all of

which sit on the financial stability oversight council. but, yeah, the fed will continue to have a major role in this. and on the other hand i do think that what you will see is not any substantial legislative change here. it's too popular. you have 60 democratic -- you're not going to get 60 votes in the senate. but you are going to see the appointment of people that won't use the powers the bill gives them. >> and if for any reason, congressman, the legislation effectively disappears, would you take it as a personal failure of sorts? >> no, of course not. again, i merely puzzled by that. i was in congress for 33 years. i pushed for things that passed, i pushed for things that failed. this wasn't personal. i didn't have a personal -- >> but it has your name on it. >> it has my name on it because i was the co-sponsor of the bill. i didn't work on this because i was offended by aig going so

deeply in debt that they caused a crisis. i did what i felt was right for the country. i don't have any more stake in this than anybody else. i'm sorry to see people try to trivialize this. it's not an ego thing. >> jim, let me end with you. you raised an interesting rebuttal of what was the president's key remarks which is that banks aren't lending. you don't seem to think that's true? >> you notice they actually didn't talk about any empirical way or data, i understand that may be a popular thing to say, but i don't think there's the evidence. j.p. morgan at their last earnings report they said lending was brisk, gone up about 6% or 7% a year with an economy only grown about 1.5%, 2%. that's not the problem. the problem is that this thing is supposed to solve too big to fail, too interconnected to fail. and i think to a great extent that is still a problem. that is my concern. i do worry about the community banks and stuff like that, but

as far as crimping lending that's not the big problem. having another financial crisis, that's the problem. >> could i say one last thing? the banks say -- >> very quickly. >> -- say one thing to the investors and another to the congress. >> yeah, may be. >> i have a feeling we'll have you back onto talk about this. it's not going anywhere. thank you for joining us going deep there on dodd/frank. congressman barney frank and jimmy pethokukous of ai. >> dow in an extremely tight range. up about four points right now. nasdaq coming off that record high down five. we're back in a moment. nile yoeam hete tnk tghionst foyo garwelli feelrear llucattistgi nile

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by one measure the market has become majorly overvalued, but is that really a reason for investors to be concerned? find out on tradingnation.cnbc.com. more "squawk on the street" coming up. he

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exchange." rick. >> thank you, david. and aloha charles biederman, thank you for taking the time. very early in honolulu. >> aloha to you and everybody else. >> let's start logistically, why don't you describe what flows you've seen in equities before, during and after the election, charles. >> well, before the election no flows, after the election record inflow over $100 billion went into u.s. equity etfs. since the inauguration though we've seen flows really slow dramatically. we've not seen much new money going into u.s. equity. there has been a lot of money going into global equity chasing returns there. but u.s. flows have slowed. >> all right. when it comes to corporates it's a bit of a two-way street. on one side you have just the buying side. on the other you have the issuance. why don't you touch on those, charles. >> well, for the last two years

we've seen a slowdown of new stock buyback announcements. and that slowdown has been dramatic this earnings season. this is the slowest earnings season for new buyback announcements in 12 quarters. it's the lowest since 2009, and last four weeks actual new buyback announcements. and since there's really no new money going into the market from individuals, the only money that's been going into the market is from companies reducing the share count. when companies start reducing their buying, that's really of concern particularly at the same time as we're seeing a ramp up of new offerings and companies selling and insider selling. there's been a lot of that going on. and very little -- and corporate buying is slowing. so that says that unless there's some change in fiscal policy or that the trump administration actually can accomplish anything worthwhile, corporate america's

concerned by their actions. >> all right. now, let's stick for our last minute with what everybody's investing and watching the markets wants to know. how long can the good will in the equities last? in other words, we have an administration that seems to be. that's worth something. then the issue is, are they going to hit the targets? how much patience will wall street investors have, charles? finish it off. >> well, right now i'm pretty much on the fence. i mean, you have a lot of people wanting this to work, wanting mr. trump to achieve his economic goals of lower taxes, free and fair trade, less regulation on business activity, stuff like that would be great for corporate america, repatriation of money. the real question in my mind is can he accomplish this? he seems to be getting bogged down in all kinds of nonsense that has nothing to do with the economy and nothing other than

placating his base and ticking off the rest of the world. so, will he be able to accomplish it? that is the real question. i doubt it, to be honest. i really doubt it. and if wall street thinks that his -- like he said over the weekend, he hopes to enact his lower tax plan this year, i mean, early next year, not this year, so it's not even on the table for this year. so without lower taxes, the u.s. economy is still sinking at a less than 2% rate. the employment gains -- >> charles, we're going to have to -- >> looking at the three-month, they weren't very good. yes, sir. >> we're going to have to leave it there, charles, and that is the big question. thank you for your opinions on it and we're going to go back to david faber. >> thank you, rick. interesting stuff there on kormt buybacks in particular. all right, let's send it over to jon fortt with a look at what's coming up on "squawk alley." >> david, we thought it might be coming, and it has. tech has gone on the legal offensive against the trump

administration's executive order on immigration, filing a brief with the appeals court. and what could come next? also, the winners and losers of the super bowl commercials, coming up on "squawk alley." uscu

we are watching shares of tiffany today, lower but off the lows after an abrupt announcement over the weekend that its ceo is stepping down. our courtney reagan joins us with more. so courtney, i guess it wasn't all just security disruptions from being next to trump tower. >> that's right, sara. it seems like it was a lot more, and it's just very interesting timing when the announcement came out right before the super bowl, where they had this very big ad with lady gaga and sort of the announcement of the new line, also right before valentine's day, which is a really important holiday for the company. and the ceo had only been there since -- i should say, in that position, since last april. so, the company says disappointed with recent -- or disappointed with recent financial results, which sort of begs the question, what's to come when they release their full results in march? they already told us the holiday sales number, so perhaps something came out in the interim. but then again, they reaffirmed the guidance, so kind of a head-scratcher on this one.

>> yeah, following the ralph lauren news last week. >> yes. >> boyds at the top in retail. we'll leave it there, courtney. we'll continue on the story, though. courtney reagan. much more ahead. stay with us. the dow's up about six points.

welcome back to "squawk on the street." i'm dominic chu. let's look at some of the bank stocks, because we're in this week here, the one-year anniversary of the diamond bottom, the market lows back on february 11th of 2016. since then, the market has gone up by about 25% in that time span, and jamie dimon famously bought a lot of his stock in that trade, netted him millions in terms of profits. now, look at the overall banking picture because it's been one of the best performing sectors out there, the best performing in the s&p 500. if you look at regional banks versus some of these broader banking sectors out there, regional banks have actually outperformed by about 3% to 4% during that time period just since that dimon bottom. so regional banks, some of the local banks, publicly traded doing a little better. interest rates playing a big part. as for the s&p 500, large cap stocks that have done well on the banking side of things. co-mirka up 120%, zions up 118%

and bank of america 109% and morgan stanley up 105%, all doubled in that time span. so, while jamie dimon's stock has gained, these guys have gotten a heck of a lot better. now to carl and the "squawk alley" crew. >> thank you so much, dom. good morning. it is 10:00 a.m. at nrg stadium in houston, texas, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ good monday morning! welcome to "squawk alley." jon fortt, sara eisen, myself at post 9. recode's kara swisher and aston instit