both spaces successfully? >> i think they can. i think that's part of the relationship that we're trying to build with discovery is actually thinking about how you merge linear and that world with digital. and that's what group nine's all about. >> cool. >> good to have you here. >> thank you guys so much for having me. >> make sure you join us tomorrow. "squawk on the street" is next. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. pretty steady premarket as earnings from twitter, coke, vie come, yum, all compete for attention with the ongoing debate over supreme court nominee gorsuch, the insertion of nordstrom. treasuries on their longest win streak since june. roadmap begins with continuing ceo outreach from the trump

white house. airline and airport executives meeting at the white house this hour. issues on the table, jobs, economic growth, modernizing the faa and air traffic control. >> plus, twitter tanks. the social network reporting its slowest quarterly revenue growth since it went public amid intense advertising competition from snapchat and facebook. >> viacom's vision ceo bob bakish will focus on the company's six flagship brands including mtv, paramount, he will join david later exclusively this morning. first up, the president meeting with airline executives this hour. they include the ceos of delta, southwest, united and alaska airlines. executives from fedex, u.p.s. and some of the nation's airpor airports among those attending the meeting. munoz on criticizing the

president's -- >> remember he talked about how he hated the airports? that the airports are terrible. that they are not in keeping with a great american country. it wouldn't surprise me because there are so many airport people there that this isn't a conversation about how to make it so that america's great again when it comes to airports. by the way, airports require a huge amount of infrastructure spend. so it's entirely possible that this is less about gates and what we can get from europe and more about just making it so that, well, what can the government do to make it a better experience for travelers. >> we don't hear as much about infrastructure when we think about those three pillars of the trump plan that certainly helped embolden investors. tax reform, regulatory rollback and infrastructure. i feel like infrastructure's taking a deep backseat. >> yes. >> gary cohn did mention it in our interview late last week, but it's not going to happen,

jim. given what would be deficit and everything having to be budget neutral, just hard to imagine a scenario under which you are really going to get and embrace broadly speaking among the republicans frankly of that kind of infrastructure spend. >> there has to be a public-private partnership where everybody has to pay in order to be able to offset. i think that partnership would be something that would be available. but i think we would all pay a $2 tax on our ticket if we knew that when we landed at the airport it looked like an airport in a foreign country. meaning any foreign country other than perhaps like a country that, i don't know, let's say emerging market -- really emerging market. >> yeah. modernizing air traffic control. >> that's been going on forever. >> technology's better than airport. >> yes. but as for david's point about prioritizing in washington, i mean, one reason people are giving for the run we've had on treasuries is increasing policy skepticism. we talk about this every day. >> oh, yeah, look, on "mad

money" i've been saying, look, guys, this market's going up because of earnings. i pondered the idea of a trump discount. a trump discount because people are feeling there's a bit of an erotic nature, whether it be the supreme court nominee talking about how disheartening it is that the president criticized a member of the federal judiciary. or i think that the nordstrom situation with his daughter, these are things people say maybe these are kind of distractions from the plan. the nordstrom -- the tweet about -- >> the ivanka and -- >> i don't know. i've never bought -- for my wife, i've not bought anything. >> not in the market for that kind of stuff, no. >> is it slowing sales or is nordstrom a bad guy? >> we had conway on this morning saying go buy ivanka's stuff, on-air. that's gotten a lot of attention this morning. who knows, maybe that moves sales.

who knows. >> president truman did not like the way "the washington post" critic portrayed his daughter singing and said he wanted to punch him in the nose and that he ought to get a cup for an area he was going to kick him. so maybe you can extrapolate. but it seemed a little much for some people, i think. little much. >> we'll see if the focus can be directed to these airline ceos. our phil lebeau is outside the white house this morning. good morning, phil. >> reporter: good morning, carl. and we're just a few feet away from the front gate where we expect perhaps some of the ceos to walk in. earlier this morning we heard or saw some of the executives from some of the leading airports around the country walking in. they didn't want to say anything ahead of the meeting. let's give you some perspective about the 15 to 20 people who will be meeting with president trump today. what's most noteworthy are you have five of the six largest airlines represented by their ceos here today. we're talking about oscar munoz from united airlines, ed

bastian, kelly, tilden and haez all going to be at the meeting. this is not just about the airlines, this is about the broader question of growing aviation and aviation infrastructure in the united states. one topic we know is going to come up is definitely coming up for many of the airline ceos, limiting the growth of the persian gulf airlines. that has to do with the fact they believe it's no longer competitive to fly to certain parts of the middle east and may not be competitive to fly to certain markets in europe unless that growth is halted. but also upgrading the air traffic control system and infrastructure spending. to give you some perspective about infrastructure spending, we were out at the salt lake city airport last week where they are building an all new airport. that's one of the few areas where you are seeing spending taking place. as you take a look at the airline index, it is estimated that if you were to truly upgrade and update all of the airports in this country, it would cost about $75 billion.

that's just one estimate. clearly congress is not going to say here's $75 billion to upgrade all the airports. but the airport executives believe you can do things with things like passenger fees, carl, that would help them perhaps free up some money and move it as quickly as possible for renovating, adding runways, updating terminals, things like that. again, the meeting is supposed to start in about 20 minutes. we have yet to see any ceos walk in, but we are here waiting for that. and then we'll be here after the meeting. back to you. >> we're going to rely on you, phil, to be our eyes and ears as they arrive and as they depart. our phil lebeau at the white house this morning. phil, thanks. on this note ge's jeff immelt last night with jim talking about whether he's on board with the president's idea on exports. >> i think we're running his play. i think we're running the export play. i think these things like wage arbitrage, that's 1980s. that's what ge did in the 1980s. now when we globalize, it's to sell more. and i would say to the president, look, level the

playing field. we can take on any company in the world. help us do that. >> all right. your thoughts from that interview, jim? >> well, i mean, there were two parts of the interview. there was a notion about what the president can do for the country, not for ge. and the idea that perhaps this notion of just pure manufacturing jobs, ge builds a lot of stuff here not necessarily the way to go about it. maybe you just want to have more trade done and more trade is good for everybody. so jeff's more of a free trader but at the same time he identifies that the corporate tax reform which they pay very low tax in this last quarter, corporate tax reform and repatriation all good. deregulation the best that could happen. everybody wants deregulation. and otherwise when we did talk about that last quarter which was i guess you could call it a suboptimal quarter, it was suboptimal and caused a lot of number cuts, brought a couple bears to light. and i believe it's made some shareholders as i mentioned to jeff i think unhappy.

>> i think we have some additional sound on that note. here's jim with jeff last night. >> last year overall segment earnings with both verticals and industrial roughly flat with 2015. we're forecasting 3% to 5% organic growth, 100 basis points improvement, good backlog, good momentum. i think strong 2017. i like the way we're positioned in 2017. >> then why -- >> you're going through the bears. >> tempted to put this on your charitable trust or no? >> i do own it. >> you do? >> yes, and was very forceful this has to be the year because 2016 was not the year. and because the industrials have been incredibly strong. comments this morning talking about low point, terrific number. i contrast them with the let's say the total shareholder return of some of the other great american industrials you'll see a honeywell, united technologies, have a list of nine others, boeing, it is deeply lagged. and this must be a follow-up on what he said, or i think that

it's going to be one of those years where people say maybe this isn't working out. now, that's a second year miss does count in corporate america. >> it does. jim, there was a brief period where they did seem to have the wind at their backs. >> oh, did they ever. >> but that's been a rarity frankly over these last 15 years for any number of different reasons. but after they -- after trian took the position and they came out sort of with a unified front in a way wanting ge obviously to return more capital. >> right. >> lever up a bit, do a number of other things. and then the move to dispose of ge capital there was momentum there. >> right. it was a big switch. give it to jeff. >> it seemed to come to a halt. >> right. well, i think this last quarter, look, they added 1.5 billion ebitda miss. that's a lot. that's a lot. 120 billion in sales, but i think jeff laid out a vision that if he hits it, the stock's going to go higher. right now it feels like it's

going to get a speeding ticket if it goes north of 30. but if he fulfills that vision you'll be thinking the stock will be up substantially. >> let's quickly get to twitter this morning. down sharply in the premarket. a fourth quarter revenue miss. user growth remains relatively flat from the previous quarter. weaker than expected guidance for the current quarter. sees full year ad revenue growth lagging that of audience growth. ad revenue goes down for the first time since the ipo. jack is asked on the call why potus hasn't brought in more users. says we've not seen a benefit to the top of the funnel from the activity throughout the election time period. >> one of the hidden issues that has come up that is masked by the way with facebook's incredibly strong quarter and alphabet's strong quarter is that if you increase your number of uniques, if you increase the number of viewers, it is not producing common increase in revenue. advertisers are it's true. look, i think revenues could be down this quarter. obviously didn't guide revenues, but ebitda number there is

substantially declined. this is a challenged market. you have to understand that digital is not the way it was even a year ago. you can either say facebook and google are getting so much of it. >> right. >> and everybody else get nothing. which we have a situation where there's two networks. >> it's a duopoly. >> it is. and everyone else is losing. everybody else is losing. and twitter's losing. and the president -- i mean, you're not going to get advertisers say, you know what, i got to put my ads where the president tweets. i think you're going to say i got to put my ads where i'm getting the biggest bang for my buck and go read sheryl sandberg in that facebook conference call. she's giving roi. >> if you want to point out engagement is up. >> right. >> we'll get more details cadence of user growth is a question. one of the reasons why members of the board pushed the company to engage and it did fully engage on a potential sale some time back when i reported on that, namely with salesforce and with disney. because they knew and they

wondered whether and how long they can keep putting up these kinds of punk quarters. >> well, now this might be the year you could argue in 2016 was the year to organize the team. and 2017 could be the year they figure out revenues. >> maybe. do they need new leadership? at what point does a board say let's try something else? >> i see internet companies with phenomenal leadership that have not been able to monetize advertisers. so, now, i know, look, when twitter's down and you can pile on, it's easy to pile on. >> you don't think that in an election year rising tides should at least lift all boats? maybe not to the same degree. >> it should. >> not to mention it's mentioned every single minute every single day by every media organization? >> it's not the thing if you're proctor & gamble you want to go all-in unless you're the nfl. look all the things they said about me on twit sgler if they can't monetize this environment, when are they going to be able to? when, i ask you? >> hey, last -- you're like

shakespearean rhetoric question? >> yes. >> i don't know. someone else might do a better job. i'm saying, listen, facebook has ads, google has ads and everybody else is sucking wind. >> we're going to fetch you donuts with chocolate sprinkles on top. >> dunkin had a good quarter. >> when we come back, two exclusive interviews, incoming ceo of coke james quincey going to join sara eisen. david's going to viacom hq and speak with robert bakish. claims in 2.34 below estimate of 2.39. back in a minute. so it sumyile style.psin fullle. wn mheov

♪ look at rock center there. of course we're getting a lot of snow here in new york city. viacom this morning reported better than expected quarterly results. also outlining its strategic turnaround plan focusing the company on six flagship brands that include paramount and nickelodeon. we're going to have an exclusive with new viacom ceo, he was interim but made permanent now coming out with a big plan today bob bakish will join me in the

next hour of "squawk on the street." the stock reacting positively in part because they did have affiliate fee growth. >> oh, that was the one? >> actually return. and that seems to have made a number of investors happy. it's not as though they had a great quarter. don't forget par amount still, and i mean he admits this fully, mr. bakish, still having a rough go of it. but they are focusing on what they're calling these flagship brands, which are going to be nickelodeon, nick jr., mtv, b.e.t., comedy central and paramount, and all the other networks out there that many of us have barely heard of, tvland, a few others, there's 16 of them which they sell as a package, they're not taking them off the air, but they're going to pull back on the investment significantly. does raise a question, we'll talk about with him of course, will you lose affiliate fees from the smaller channels and how do you make up for that. but this is long overdue. this was a company that was to

put it nicely, undermanaged for many years. >> i could use that term from now on. >> mr. bakish is coming on. >> twitter was undermanaged. >> he was already doing plenty but now he's got the plan. >> david, i looked through and said, geez, they can make a lot of money. forget because you can time shift everything doesn't mean that you are a loser. that's what i felt. seemed like a good quarter. >> these are still powerful brands. >> right. >> but the question has been in this world where we have these virtual mvpds, in other words all the sling tvs, the directv nows, do you need to be on all of them? why would they care to have you, is a question. are you a must-have cable network? >> can you put this in the context of espn yesterday? >> well, entertainment's still a lot cheaper than sports. so if you love sports, willing to pay for it. but how many are really in that category. if you're not do you want to pay your eight bucks a month? >> thank you. >> meanwhile netflix giving a

presentation yesterday their ahead product 1,000 hours of new series, documentaries, original films as i think it was politico this morning said they are looking to drown us in content. >> well, they've so far you drown them in a magic elixir. the content is fabulous and i think it does trade on content. by the way that stock jumped three on that. a lot of people felt it jumped three because maybe something was going to be announced. well, what they announced is pretty much business as usual. this is a company that is a hit machine. and when you speak with reed, they are artificial intelligence, machine learning about what people want. >> and they need the original programming. interestingly to connect it back to viacom, bakish is basically saying, listen, when they talk about their strategy, we're going to be highly selective he said in striking agreements with over-the-top distributors with the netflixs of the world confining it only to library content. remember, they were criticized heavily and people believed nickelodeon lost a great deal from making content available.

>> right. well, netflix is a winner. period, end of story. >> we're going to get cramer's mad dash and count down to the opening bell in a moment. pretty steady premarket. in fact, three days of virtually no movement. stocks are close to break even for the week. back in a minute. ♪ smanyess ly ? , eir businesses one annyonthcotry.s here, e. unittates poalerce

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♪ we're going to stay seated for our mad dash this morning, about six and a half minutes before we get started with trading here, jim. you want to talk a little coca-cola. >> i've got a silver lining playbook today which of course

was a movie about me and my dad fighting about the eagles. and it might as well be because it was exactly like that. coca-cola reported a quarter, david, it said this is a quarter in transition. i know we've got the incoming ceo, i think he'll tell a better story than the stock looks because the company's going into coca-cola light. they're selling the bottlers, they're reconfiguring. they're only going to have 20,000 people when they're done. it's going to be a huge cash generator. in the interim you got to back out a lot of currency because the currency did really hurt them. but organic revenues were good. they grew nongap, okay, grew 6% for the quarter. there's some slowing in the loss of diet coke in america. you know, zero is doing very well. you're going to get the usual dividend boost. remember they've got more than 50-year record of dividend boost. all i'm saying is if you want to sell the stock, let's wait to hear what the incoming ceo says. he might have a better story to tell than the stock indicates. going to be a very important interview. >> isn't it a reminder though of the dangers of the dollar right here?

>> yes. >> seven quarters of down revenue. >> they're more emerging because they're good at hedging against the yen, which is a story sara likes to talk about. she drills down on the yen. also europe they're hedged. but the main thing about coca-cola is that it sells a product that doesn't resonate any more, i think, with youth. which is soda. soda is not connected with the way that pepsico indra nooyi has moved so aggressively in all sorts of snacks. it's a better business model. indra nooyi has a better business model and they're executing better right now. my travel trust owns pepsico, why? it has fabulous organic growth and it's got humus. i'm mispronouncing that, i know, but it's got damn good humus. >> no, that's good. you say humus. >> no, they've got -- >> all right. >> whatever. >> the opening bell just a few minutes away. we're right back.

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more definitively a read out of the meeting either before or after it happens. meanwhile, looking for pretty steady market open although the ten-year at 2.351 this morning, jim, larry fink in an interview yesterday said he could make the case why the ten-year's going below 2, a better case for that than it going above 4. >> that would be such a failure of the pro-growth agenda if that happens. i respect his work so much. it does seem that ever since this theme of tweets that really kind of -- and the rankcor has produced a sense that the economy is not as strong. in the real economy i'm still getting deregulation is the driver. let's not forget that. dakota access, boom, bing go, you know? wait until you see the pipelines be built in texas. they put a lot of people to

work. that's something to watch. >> let's get to the s&p at the bottom of your screen. and the opening bell at the big board and at the nasdaq. down here it's software manufacturer s.a.p. doing the honors. at the nasdaq the investment advisor forum taking on management education conference today. so we'll look to see how the components of the dow open. coke is going to be the laggard though at the open. >> yeah, again, it's nothing to write home about. and that's the problem. you've got to have some story here to attract money, if you have -- that's working precisely because of what larry fink said, the money is pouring back into that group. that's why you see facebook ticking up again.

i think you'll see nvidia make a comeback here about to report. adobe fits that posture. these are companies that really just fit for the moment because people think growth's slowing. i don't think it is. but people think so. >> that was quite a rally yesterday in those names that you just discussed. >> big rally. wow. >> the nasdaq obviously far outperforming the other two averages which were -- well, the dow was down. >> i know. look, there's going to be another -- we'll see some other stocks going up. we'll see it will surprise people, ak la because a much better than expected quarter of the year. >> highs of the year. >> kellogg's back and they're calling the tune a little bit to these supermarkets. >> well, some interesting news you and i were discussing during the break from kellogg, jim, is the fact they're going to be transitioning from direct store distribution services for snacks, completely to warehouse network by the fourth quarter of 2017. >> you can save a lot of money on fuel. >> save a lot of money, right. now there's also some jobs at stake here too. >> yes. >> i would think.

in fact, for their part credit suisse says this could impact 700 to 800 salespeople covering 2 billion of sales for the keebler and sunshine brands in the u.s. this is also pressure brought on by the likes of kraft heinz and the 3g guys, so much of this world is now about zero base budgeting or zbb they like to call it. >> i think that's very important. by the way keebler i always think of them because the guys who run treehouse are the guys who sold keebler made all that money for people. i have treehouse on tonight. not coincidentally the stock is up, the most up $8 on a great quarter. >> staying in this sector, yum and dunkin you mentioned already, jim. yum, although pizza hut down two. >> right. >> they're bringing an outside agency to look at the brand. called it disappointing. but comps up one. both of those stocks not far from all-time highs. >> no. and dunkin raised your attention. i call your attention to panera. they fug yured out digital, 25% of the business is digital. they figured out they have

affinity, they've got 25 million people with an fz infinity card and 50% of the business done by infinty card and they've solved the problem of how to make sure there's good throughput. congratulations to ron shaich, he worked very hard to figure that out and look the stock's the biggest gainer in what's been a very challenged industry which is fast casual. >> as we knew would be the case because we actually were saying it, a judge did strike down anthem and cigna's plan to merge. no surprise there. the stocks have been trading of course with the expectation that deal as was the case with aetna's attempts to buy humana would be struck down. the question now for anthem or cigna may be over the termination fee in the deal. $ $1.85 billion, would anthem even try to appeal simply to make it clear or try to make it clear in their point of view that cigna

has not done its best efforts to try to get the deal to the finish line. during the actual case the judge did talk about some of the enmyty that had occurred between the two companies calling it kind of the elephant in the room or not in the room, but they're all independent, cigna, anthem, humana, aetna and still the largest united health care. the question now is will there be new combinations? can you figure something else out with a new administration? a new antitrust authority. and will we see more deals but not the deals that got struck down? >> remember the days when you could pear them off -- i made one great trade for the street.com, i managed to be able to get united health to go against oxford to drive prices down and united health bought oxford, that was the end of that game. i was like, wow, that was bad, they compete against each other and that was the fear. david, i ask you this like i ask

you with halliburton baker hughes, what kind of lawyer says, you know what, we're going to green light this other than a lawyer that says, you know what, this could be the biggest payday for our company ever. lawyers being companies. >> i think, listen, people of serious purpose look at these things and make a lot of arguments as to why they should have been allowed. certainly aetna, humana, there were people not just lawyers who thought at least it's got a shot. it depended how you define the medicare advantage market. >> right. >> versus medicare. >> this is not time warner. >> and joe sweeney, the ceo, maybe he'll join us at some point soon, going to put pressure on him to deliver even if they appeal that this deal is dead. >> just not the place to be. by the way, the drugs, again, biotech will move up because people feel the larry fink view. i had brent saunders on last night, allergan, that's the best story in the large pharma. by far. it's the fastest grower with one of the lower multiples in the

group, agn. it blew up because of pfizer. brent saunders by the way happened to buy a lot of stock at the absolute low, it was just coincidence. he bought it personally. but he bought back a gigantic amount when the stock was much lower. >> for the company. >> for the company. he is back. >> really? calling him back? >> but say he never left. >> calling brent saunders back, huh? >> that's what the big money's saying. i'm saying he never left. he did what gilead had to do. he bought a lot of companies that could produce blockblusters, also has a non-alcoholic liver drug, has a good drug with ilea, where you have fewer shots in the eye. >> funny you mention that, allergan is one of the top five gainers this morning. gilead is one of the top ten losers. >> there you go. gilead didn't employ the money. now they've got a central nervous system breakthrough drug for depression and antisuicide.

>> gilead does? >> no, they don't have jack. >> allergan does. that's what i was wondering. i'm sorry. gilead has an incredibly underlevered balance sheet and ability to do a big deal. >> they should have done a series of small deals. >> you can't complain about gilead just the deal alone that set the tone for everybody else. even though they paid a big number. >> if you wanted at 100 i think you can do a little complaining. >> okay. i suppose. just saying it's not like they don't know the blueprint for buying a small company and reaping enormous benefits. that may have been one of the great deals of all time. >> but, you know, to each time there's a season. a little -- >> turn, turn, turn. >> yeah, turn, turn, turn because your head is turning if you own gilead. but i do think -- i like the way brent saunders laid out a vision. he laid out a vision of $13 billion in blockbusters and kind of like the days you used to sit and dr. -- talk at merck. remember that all went away? allergan's got it.

allergan's got it. >> wow. all right. >> yeah. >> jim, on oil, your ongoing thesis that demand is intact is playing out today. >> yeah, everybody's got to understand why i'm bullish on oil, okay. i'm bullish on oil as it goes down because the u.s. has the capability, everyone says, oh, u.s. sweep producer, believe me, other than a couple producers, when oil goes below 50, substantially they shut down. you'll see a rig count on friday that goes down if oil goes down because we're able to turn it on and turn it off. that's some of the technology that different companies have that really does -- halliburton, baker hughes which is merging with ge, they have the capability of saying, you know what, we're not going to pull it out of the ground at 50 or 48. 53, 54, we'll pull it out. that's a change. and it matters. and also there was a headline yesterday that opec continues to be serious. i love that you can put out a headline say, listen, we're still serious. we're not jokers. we're serious. wouldn't you love to be able to put out a headline that says today i'm serious? >> one question mark still, i mean, that would be hanging over the market for some time is

retail. not just the fundamental challenges. >> you had to bring up retail. >> but the border tax. i'm looking at a note today from barclays. guys, they say if you get a border tax adjustment given the cost for retailers and others, free cash flow for the vast majority of retailers would fall to a negative position. this is a credit note actually. you got to remember sometimes it's not just about the stocks, it's about the debt. a lot of times when the stocks get particularly low, it becomes a lot more about the debt. >> very interesting. whole foods is now up. it was disappointing quarter but they're taking action getting rid of some of the stores that are underperforming. but they were asked about ga guacamole again, everyone asking about the border tax? will i have to pay a border tax san miguel? >> you will be paying to the people who provide your avocados. >> they'll jack up my price, i got to jack up the price to the consumer, they will no longer go to my place, they'll go to chipotle, next thing you know

why i'm going to have the negative number. >> and your mexican beer and cuervo, everything in your place going up 20%. >> onions are almost exclusively grown here. >> that's the only thing i got. >> you're in deep trouble, my friend. you are in deep trouble. >> tequila from flint, michigan, right? that's where the home of new tequila's from. >> grow a lot of agave. >> did you tackle nordstrom at all yesterday? because it's up another 2% after the best gains since early december. >> is that protest buying? >> it was up 3%, 4% yesterday. >> it was up yesterday. >> let's just go buy it to stick it to the president? i mean, like, how about earnings? just like stick ilt to the president buy. >> it is interesting because it did go down very briefly by 0.65, or 0.7% on the tweet yesterday and we do note a lot of these stocks do rebound but nobody expected it to rebound quite that much and followthrough on today. >> saying i'm waiting for a new tweet blasting someone i can buy

it. >> shows they're being disciplined in the way they approach their business. >> remember nordstrom said traffic in retail at malls is worse than any time since 1972. and remember 1972 starting to talk about gas lines. gaz. >> i'm from philadelphia, give me a break. >> dow's up 37. s&p right back to 2299. let's get to bob pisani. bob. >> hello, carl. good morning everybody. slightly more risk-on day today. take a look at sectors, number one. energy's been horrible all week, horrible all year but oil's finally rebounded a little bit. so energy stocks are rebounding. banks have had a tough week dealing with the lower yields that we've seen. that's reversed a little bit today. they're up so consumer staples, utilities, they're lagging. little more risk-on here. new highs, considering we're at new highs for all the major indices essentially, there's not a lot out there. couple in the tech world. you see tesla at a new high. nice to see it's up here today. they may finally begin production of their model 3

vehicle, no confirmation, but it's up about 4% on that. netflix at a new high, analog devices at a new high, adobe at a new high. but that's about it. pretty small list considering we're near new highs on the major indices. a lot of talk about what's been going on with lower bond yields this week. up a little bit today. some people are a little concerned about that. it's true there's been an uptick in prices and notable inflows into bond etfs in january. that was a little bit of a surprise. i'm not sure how much of a deal we should make about this. if you actually look at the etf flows in january, it's pretty balanced. yes, there's inflows into bond funds about $13 billion bounce put that up, but equities having inflows as well and so are international funds having inflows as well. it's pretty balanced. looks to me like a lot of people are putting new money to work overall for the year. and if you look at some of the big etfs that have had inflows like the vanguard short term bond etf, inflows here that's pretty balanced. looks like people are putting new money to work. vanguard gets a lot of this

money simply because they're long-term investors and that's where the money would flow. so i'm not sure i would put too much into this. you've got investors wanting to put new money to work, some want to hedge bets against the stock run-ups that we've seen. i think this is pretty normal here. if you want a relative value play, something that's very interesting, j.p. morgan made a big call this morning on europe. i've seen this a number of times, but they had a very long report up saying time to buy europe is right now. u.s. is at a 40-year high relative to europe on a relative value play. that's what you want to be. the u.s. has been outperforming for six, seven years against europe here. and it's time to look at that economic recovery. we've got a reflation story. and the even talk of possibility of fiscal stimulus should reform minded people come over in europe. so obviously the risks for europe are the political side of this, the populist sentiment that is there. and nobody's going to let that go for the next five or six months. if you want to know how important political risk is in

europe, look at thomas cook. thomas cook big travel agent. they had their report out today and it was not a bad report. a lot of nice bookings in greece and in spain, but they specifically said we remain cautious for the rest of the year given the uncertain political and economic outlook. thomas cook trading down about 7% over in europe. finally, over in mexico -- jose cuervo finally went public. in fact it's actually trading right now. it priced at 34 pesos at the high end of the range raised a good almost $100 million as you can see. opened a short while ago and trading to the upside. if we could get that up, this would be in mexico on the exchange there, but opened up about 8% here. remember, 71% of the revenue in the united states. and of course that's got a lot of discussion because they would definitely be impacted by any border adjustment tax. again, jose cuervo going public up about 8% just opened down in mexico. guys, back to you. >> bob, thank you very much.

bp bp. let's get to the bond pits to check in with rick santelli in chicago. good morning, rick. >> good morning, carl. well, as you look up at the boards, we've somewhat studied in some of the buying issues pushing rates down, and do remember it was almost right smack dab after the ten-year note auction yesterday which wasn't a spectacular auction with respect to demand. we saw yields reverse a bit. but the reason i talk about it is we're holding somewhat steady yesterday, was mostly the long end with yields moving lower especially tens and especially 30s, which if you recall before the fed meeting, if you recall before the employment report they were kind of the wild end of the last skater on the entire curve. and it was whipping around more to the upside. why do i bring it up? because, yes, we have taken reprieve from some of the selling that we saw in treasuries and indeed the steepening of the yield curve turned a bit to flattening, not as good for the financial sector as was evident yesterday by its

performance. you know, tens minus bunds continues to hover just above 200. and i continue to talk about that. why is it important? because i'll tell you what, if you look at what's going on in europe, if you look at one-year spanish rates or one-year french rates, what you'll see is they have been trending higher. and while they trend higher, bund yields have been moving lower. they actually settle under 30 basis points yesterday. but what i find fascinating for all you technicians and macroeconomists out there, at least armchair types what you should do is consider if you look at a one-year chart of italian rates versus one-year chart of ten-year rates, knowing that against the bund we've been steady in terms of the difference, what you'll see is a one-year chart from one year ago to right before the election they're like exactly on top of each other. but if you look at those charts since the election as europe rates started to move higher, we

started to move lower. so what we are finding is, is that the spread relationship between weaker and strongest sovereign, the german bund in europe, it's having an effect on ours. and then you add in liquidation by the likes of china or japan on our long end and the treasury in general, this seems like it started a log jam of cover your shorts. when will it be over? i can't tell you, but today's 30-year bond auction should give us some demand clues. carl, jim, back to you. >> all right, rick, thank you very much. when we come back, david is making his way to viacom's new headquarters. he'll have a live and exclusive with the new ceo bob bakish on the strategic turnaround plan for the company. we're staying on top of developments outside the white house as these airline ceos meet with the president. all-time high for the nasdaq, s&p up six of seven days is not too far away from a record of its own. back in a minute.

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house. we're going to keep you honest as these airline ceos arrive to meet with the president this morning from all sorts of airlines, ual, jetblue, some others from the aviation industry. not parker from american. had a previous commitment. but as we get arrivals and departures we'll try to get them in front of the camera. meanwhile, interesting comments this morning from the prime minister of the united kingdom, theresa may, on the immigration order here in the united states. take a listen. >> in relation to the executive order that president trump signed now nearly two weeks ago with the various movement bans, we thought that was wrong. that was divisive. it is not a policy that the united kingdom would adopt. >> of course as the world reacts at large to what the president is working on. >> it is always surprising to me that he did not wait for senator sessions, attorney general sessions to come in to do this because you needed attorney general in the united states to be able to articulate it.

instead he had an obama holdover. i mean, this is the kind of thing where people who share the president's agenda are surprised at his lack of dexterity to get the agenda. >> you're referring to say what matt drudge has said over the past 48 hours. criticizing gop -- not the president, but other gop leaders for not aligning and getting the agenda that was promised done. >> look, i think there's such discourt. there's three parties, there's the democrats, republicans and there's the trump. that's not what people expected. i think that when you see what i regard as being a little bit -- look, i love to break eggs to make a good omelet. but the omelet's got to be out there. it's just got to be out there. and it can't just be something that's sold at nordstrom. >> right. still not effecting stocks. >> no, because the earn are great. >> that's been your point. >> yes. >> earnings are great. >> what a quarter we have. dunkin donuts, treehouse, kellogg. look at these. >> we'll get stop trading with

jim in a moment. dow's up 26.

time for cramer and stop trading. >> always find rates going up change the whole complexion. i want to talk about micron. here's something you very rarely see a firm as good as bank of

america merrill going from sell micron to buy. i have been screaming buy micron now for a very long time because of tightness in the dram market and flash which they own. i cannot believe micron doesn't get a bid from someone. western digital by the way is another one to play off that. this is a very strong momentum situation, boom bust cycle admittedly and we are in the boom part of the cycle. that's a buy. >> yeah. micron's been amazing. >> yes. >> what's on "mad money" tonight? >> stock up 6%, sam reed of treehouse, one of my absolute favorite ones. just fantastic. we've got s.a.p. on. they rang the bell. they have a terrific story, steve singh, he is one of the great executives. >> yeah. >> bill has done a remarkable job at s.a.p. and always wish him well. such a good guy. >> a delight to be around. jim, we'll see you tonight. >> thank you. >> of course, david's on his way to viacom hq. we're going to get the latest on the president's meeting with airline industry leaders and

then exclusive with incoming coke ceo james quincey. what a morning. don't go away. o whou anck tax pro rp otson withhe finng o whou anck tax pro

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airline and airport executives meeting with the president this morning at the

white house. good morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen at post nine of the new york stock exchange. two big first-ever television exclusives this morning. the incoming ceo of coca-cola james quincey is with us. david faber is going to join us shortly from viacom headquarters in midtown manhattan with new permanent ceo of viacom robert bakish. meanwhile dow adding to its gains this morning up 40 points. s&p right around 2,300. oil's up a percent. yields trying to climb back a bit. the big story of the morning though of course will be that meeting between the president and airline executives along with some headlines we're getting regarding taxes. our eamon javers is there with the latest. hey, eamon. >> reporter: good morning, carl. let me explain the announcement you saw regarding taxes. right now wire reporters are in the meeting right now with the airline executives. and they have sent out a note saying the president has talked about making a tax announcement at some point in the coming weeks. we know the top airline ceos are in the meeting as well as some executives from airport

authorities around the country. i talked to one of the executives from the airport's council on his way into the meeting this morning. he said one of the items on his agenda for the meeting will be what they call a passenger facility fee. that will be a useful way for the airlines and airports to raise money for infrastructure spending. and that is going to be the big question of the morning here is what exactly does the president have in mind in terms of airport infrastructure. you've heard him again and again out on the campaign trail criticizing american airports as being not up to snuff with their global counterparts, but how are they going to pay for that and can they get any new taxes or fees they're proposing through a republican congress, which is very concerned about deficit spending, carl. a lot on the agenda today here at the white house. >> all right. eamon, thank you very much for that. we'll come back to you. in the meantime bring in former ceo of american airlines bob crandall. bob, always good to have you on. >> i'm good, carl. how are you? >> good. >> what are your expectations for this meeting? >> one of my biggest hopes,

carl, i gather that gary kelly who's running southwest these days is going to make a pitch to get presidential support for updating the air traffic control system. i think you know that the industry has been trying for 20 years to get political consent to take the atc out of the faa, put it into a not for profit corporation that's run by the airlines and general aviation and the airports, all the stake holders, and charge fees for running the system. and that's the way most of the other countries of the world do it and it works way better than having the faa in effect running it as supervised by congress. which is not a very desirable situation for anything. >> yeah, i mean, hasn't the federal government been running air traffic control since the '30s, bob? how big of an endeavor would be that be? >> oh, well, it's a big change, but the fact is if you take it out of -- if you take it out of

the faa and put it into a not for profit corporation and charge fees, what you're going to do is you're going to get better people developing the system, moving away from the world war ii kind of technology we use today towards the satellite based system. i mean, look, when you fly across the border, for example, into canada which long ago changed to a system similar to what the industry wants to adopt, it's just night and day. it's just a much better system. and the consequence the united states ought to move in that direction. we've got a big complicated system. it's time to move to update the technology and get it done as most of the rest of the world has already done. and on top of which, carl, i mean, i make this point to you, there are 40,000 controllers. the union is firmly onboard with doing this. and those 40,000 people would go off the federal payroll. so the president says he wants to promote efficiency and he wants to reduce the number of federal employees.

and updating the atc system would do both. >> as we're talking, bob, the president according to the readout at reuters says government contract for new atc system not good. says the system is obsolete. if this were to happen, bob, is the effect going to be on safety? is it going to be on slots? capacity? >> no, carl, the effect is going to be profound improvement in the efficiency of the system. it's going to be just as safe because this nonprofit entity, which is going to be represented on its board by all the users of the system is going to from a safety point of view is still going to be supervised by the faa. so nothing changes in terms of the responsibility of safety. but the day-to-day running of the system will be done by professionals and supported by a fee-based structure. the entity will be able to sell bonds so you can do long-term planning. i mean, it's just a vastly

better way to do business and politics have been getting in the way. and hopefully what we have now in kind of an upsidedown world is we can get the president's support for this. >> speaking of safety, some have expressed some concerns about president trump's recent executive order that the two-for-one regulation rule can't be two regulations without taking one away. is that going to impact safety? because so much changes constantly based on accidents and new revelations on airlines. i understand that there's a ton of safety procedures and regulations that need to come into place. >> well, of course, sara, you're 100% right. look, i have to assume that the president is speaking generally and not specifically so that i assume if we need a new safety regulation because of something we learn after a particular accident, i assume he's not going to say, no, no, you can't

implement that new needed rule because you have to eliminate two others. that would be silly. you know, i don't agree with him politically, but i don't think he's a silly man. so let's assume that's not going to happen. the fact is aviation is tremendously safe. and keeps getting safer every year. and everybody in aviation wants to keep making it safer. hey, you do need rules and regulations in the industry absorbs those and deals with them very effectively and i assume that's going to continue. >> hey, bob, one last thing. just broadly as a former ceo and chairman, obviously american business has a lot to like from the president's agenda. we'll see how much gets actually implemented. some argue that we are awash every day in a wave of distractions, awkward tweets, controversies that are unnecessary. how much of that do you agree or disagree with? >> well, i generally think and hope that, look, he was -- he won the election. and when you win an election,

you kind of get to set the rules. but i am profoundly distressed by a guy sitting in the white house sending out tweets excoriating a company for throwing out ivanka's fashion items that do not sell. that is not appropriate, carl. now he needs to evolve. he's now the president of the united states. and as the president of the united states he needs to behave differently than a guy running a business. >> bob, we appreciate your time today. we'll see what comes of this meeting with the president later this morning. thanks so much. >> always nice to talk to you, carl. thank you. >> a lot of earnings to get through today. one of them yum brands reporting earnings this morning that beat fourth quarter estimates. however, that same-store sales number did miss. taco bell has been a standout, pizza hut came in weak. joining us now for first-on-cnbc interview is greg fried, yum brands ceo.

welcome, greg. >> hi, sara, how are you? >> i'm good. this was the first quarter since the china separation, the stock has been a monster. talk us through some of the light sales numbers especially at pizza hut and kfc. >> yeah, look, before i do i think i want to say, look, 2016 was a landmark year for us. we spun-off china, we launched this sort of three-year transformation plan and returned $6.2 billion to shareholders. i think overall it was a great year. q4 i think we had a great q4. same-store sales obviously at kfc and taco bell were stronger than they were for the year. obviously pizza hut is a challenge for us. but i'm very encouraged by the momentum taking into 2017 and a lot of work to do on pizza hut. we've got our team in place and working with franchisees to turn that brand around. >> yeah, with pizza hut in particular, dominos is killing it right now, papa john's also has pretty good sales. americans are staying at home more, they're bingeing, they're ordering delivery, this should be right in your sweet spot.

how far behind is pizza hut? why isn't it catching up on this kind of trend? >> well, i think there's two things from yum's perspective. pizza hut is about 10% of operating profit, so the way i look at it, our international pizza hut business is doing well, kfc and taco bell, so 90% of our business is growing and strong. we have a lot of work, we have to work on assets, technology, we've got to work on all the things that will make this a more relevant brand. and we're doing that with the franchisees right now. we've got to get ourselves a long-term strategy. i believe as you said there's growth in the category. our competitors are demonstrating that. and we need to work harder to get our fair share. >> and on taco bell continues to be a standout all star among the three. naked chicken chalupas, what's the secret here? >> i think the secret to taco bell is they have a high low value strategy, most innovative talent and products. as you've said when you've got dollar all day and throw on top of that a nicked chicken chulupa, that's why i'm confident about the sales for

2017 and beyond for taco bell. keep executing high/low and innovation of new products and going to continue to be a standout performer for yum. >> greg, on pizza, what do you expect an outside agency to be able to tell you that you can't do internally? >> well, i think what we want to do is just make sure the things we need to focus on, carl, are the right things. we've got to transform our assets. we've got to transform our technology. we have to get better at operations and communications. there's a lot of things to do. i think what we're doing now is working with the franchisees. obviously our franchisees at pizza hut want to have the same success we've had with kfc and taco bell in the u.s. so we know what we've got to do. and what we've got to get is to transform those things. yes, we're playing catchup. yes, it's going to take time, but i believe we've got the team, the leadership and the franchise relationship to want to do it. look, i know this is a show me not tell me and it's going to take us a while. but i think the momentum we've got on kfc and taco bell i think will certainly, you know, carry

us forward while we fix the pizza hut brand in the u.s. >> i'm curious your thoughts on update on food deflation which has meant that people are eating at home more, they're getting cheaper groceries. is that abating at all? >> actually, i think underlying food deflation will continue. we think it will continue. obviously there is some wage inflation going on, but i think a combination of wage inflation and food deflation in terms of grocery stores, you know, prices going down, i think we've demonstrated, look, we have a dollar all day at taco bell, $5 flavor menu at pizza hut, we can be very competitive against grocery stores. what we've got to do is do a great job building these distinct and relevant brands and getting people to come to kfc, pizza hut and taco bell more often. >> so we learned today that andy puzder is going to be divesting from cke, some of your

competitors among other investments, if he does get confirmed, what do you see of him someone in your industry? >> obviously knows how to run an organization with a large number of employees which i think is great. i think he can provide leadership in that area as well, which is a big one for the industry. so i think they will all be good things. but as i said, you know, i'm not sitting around waiting for who's the next labor secretary. what we're doing is saying how do we drive same-store sales growth, how do we drive net new units and obviously how do we drive more growth at yum going forward. that's what i'm really focused on. >> finally, i wanted to ask you, greg, on your thoughts on emerging markets right now. about half of your business does come from overseas. coke had a really tough time with emerging markets particularly latin america. what did you see? and is there any hope that the macros are getting better there? >> yeah, we actually -- it's interesting, we opened, i think we built five taco bells in three months in brazil which is an all-time record for us. so that was a great investment. markets like russia, same store

sales up 30%. opening 100 restaurants a year at kfc. i still believe emerging markets is a growth story for yum. what you've got to do is make sure your brands are real valev great value and great assets and i think in the emerging markets whether it's latin america, africa, central and eastern europe, those are markets where we continue to perform really well. >> greg creed, thank you for joining us. ceo of yum brands. the stock is up 1.5% after that quarter. >> thank you very much. >> nice to see you, all-time high naked chicken chulupas, have you had one? >> no. >> the shell is chicken. >> yes. >> how do they come up with this stuff? >> menu innovation. we have a lot ahead, including interview with incoming ceo robert quincey. more "squawk on the street" in a moment. thgr pulio shif human hry

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airline and airport executives meeting with the president this morning. eamon javers is there and joins us with what we know at this moment. eamon. >> reporter: hi, carl. we're expecting now to see the video of president trump with the airline and airport ceos momentarily here. the pool has come back out from that meeting and our phil lebeau was just talking to some of the pool reporters who say that the president here is very critical of airport infrastructure, the faa. and this is a president remember

who's done a lot of private aviation himself. he's owned an airplane. he's operated an airline. so he would be entitled to feel as if he knows a little something about this business. so we're going to wait and see what the president has to say here. but we're also told that he said he's going to make a significant tax announcement in coming weeks. not clear whether that tax announcement is specifically connected to airport and infrastructure funding or if it's something else that he's talking about here. so we'll wait and watch for that as well. and then of course we'll wait and watch for any comments from the airline ceos themselves and the airport executives. one of whom told me that one of the focuses he's going to have is on the passenger facility fee, which he says would be one way to raise revenue to finance airport infrastructure. so it sounds like the interests here of the airport executives and this white house are dovetailing, carl, in terms of finding money and revenue to improve the nation's infrastructure and flying experience. >> it certainly sounds promising, especially after what bob crandall told us a few

moments ago about the possibilities and effects of modernizing what he called world war ii technology. eamon, we'll come back to you in a bit. eamon javers watching the meeting of airline ceos and the president today. meanwhile, twitter continues to be a focus of attention on the quarter. there was a beat, but maus up 319 million versus 317 million from the prior quarter. ad revenue disappoints. >> yeah. >> in ways it hasn't since the ipo more than three years ago. >> yeah, it was that slowing advertising revenue at a time where you would think twitter would be doing so well in an election year with the president using it multiple times per day. in fact, i was just going through the conference call and one of the analysts asked about this the president using twitter so much is it actually hurting you? because you can just see the tweets on all forms of media. and actually jack dorsey shot back and said, no, it just makes us even more impactful. it's good that there's so much attention on that, but clearly the company hasn't figured out a way to monetize that at this

point. it's getting increasingly competitive when it comes for the advertising, snap's ipo is coming up, facebook dominating on mobile and continues to grow its own mobile ad business. >> cramer called it a duopoly in digital ad spend. there's facebook, google and everybody else getting crushed by those two. as we're talking s&p hits a new record. 2301.37 does surpass prior record of 2399, so we're barely there. yields creeping up has helped. >> yes. yesterday they fell into the low 230s range and there were some questions about whether that was a reflection of pessimism over some of the trump policies. could also be the fact that the market is pushing out the next fed rate hike. less than 10% chance now of march for the fed. but today's an up day. also what you've got working today, carl, is oil prices higher as they go down toward that low 50 level it was becoming a little bit of a source of concern, went positive on the session yesterday, helped the markets. up today. and we've got --

>> and we have this afternoon. >> yes. when we come back, our interview with the incoming ceo of coca-cola james quincey. you won't want to miss that stock moving on earnings this morning. we'll be right back. ether itrig0 fans pi astscoecd. es countnunication, couniciocountsnceyl hey!y nile wted to t spopor lk thr only f. ll, e alababgletis gi. wedot n't thishmen to ea

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waiting for some tape to play of the president meeting with these airline ceos. he's already made some comments according to the wires about air traffic control, infrastructure and a tax announcement. let's get to the president. >> i think they understand. well, thank you all. i know so many of you through reading and through business magazines. and you've done an amazing job. and i want to congratulate you. i know you're under pressure from a lot of foreign elements and foreign carriers. i've been hearing that a little bit, at the same time we want to make life good for them also. they come with big investments. in many cases investments are made by their governments. but they are still big investments. i'm thrilled to welcome the leaders of the airline industry to the white house. your industry supports over 10 million well paying u.s. jobs

and creates almost $1 trillion in economic activity, which is really big stuff. really amazing. last year our airlines moved approximately 2 million people each day in our country, which is an incredible number of people. and they move them well. despite the bad equipment that the airports give you in many cases because they can't get approvals on anything and you have a regulatory morass that could be vaster. and i can tell you that a lot of the new equipment they order is obsolete the day they order it. that's according to people including my pilot who's a real expert and he said, sir, the equipment they're putting on is just the wrong stuff. we'll talk about that. because we're going to modernize our systems, we should be using the right equipment. i know mr. tilden is nodding you know what i mean. there's one thing to order equipment, but let's order the right equipment. probably the wrong equipment costs more. probably buy the right equipment

for less money. so we want to talk about that because my pilot, he's a smart guy, and knows what's going on, said the government is using the wrong equipment and instituting a massive multibillion dollar project, but they're using the wrong type of equipment. so let's find out about that. we want the traveling public to have the greatest customer service with absolute minimum of delays and with the greatest convenience all at the lowest possible cost. we want to help you realize these goals and we will indeed help you realize these goals. airports airports very important to me. travel very important to me. as an example somebody was saying yesterday to me that you go to china, you go to japan, they have fast trains all over the place. we don't have one. i don't want to compete with your business, but we don't have one fast train. and it's the same thing with our

airports. our airports used to be the best, now they're at the bottom of the lump. we've spent $6 trillion, think of it, as of about two months ago, $6 trillion in the middle east. we've got nothing. we've got nothing. we never even kept a small even tiny oil well. not one little -- i said keep the oil. but we've spent right now $6 trillion in the middle east. we have nothing. and we have an obsolete plane system. we have obsolete airports. we have obsolete trains. we have bad roads. we're going to change all of that, folks. you're going to be so happy with trump. i think you already are. so we want to help you realize these goals by rolling back burdensome regulations, and you people are regulated probably as much as almost anybody though i can think of a couple industries that are even worse. lowering the overall tax burden on american business is big league, that's coming along very well. we're way ahead of schedule, i believe. and we're going to be announcing

something i would say over the next two or three weeks that will be phenomenal in terms of tax. and developing our aviation infrastructure. again, i want to thank you all for being here. so i want this to be a meeting of substance. i want to be able to do things for you. the auto industry was in. they left they said it was the best meeting they've ever had. i even took them into the oval office. the head of ford, head of general motors, head of fiat, others, they never saw the oval office. i said i mean you never took you in? do you know how far away it was from the room? ten feet. but they never got taken in. i took them in. the auto companies are going to be making massive investments in michigan and ohio and pennsylvania. a lot of the places where jobs have left. so we're really happy about that. they've been great. ford is going to build, you know they canceled a big plant in a certain place.

i won't say where. a $2 billion plant. and they're building it in the united states. and they're expanding greatly. general motors same thing. they've been great. i think they'll continue to be great. but we're also going to be great for them. we're going to get rid of a lot of unnecessary regulation. and we're going to make their life a lot easier, they're going to employ a lot more people. so it's working. a lot of businesses are rushing in. they're coming in bigly. so with that i thought what we'd do is perhaps we'll start with mr. gray, we'll go around the room and just quickly say who you are and who you represent. the biggest of the airlines here. and you can -- no, stay, stay. >> that is the president. obviously the tape ran out there in a setting we've become familiar with surrounded by the chiefs of american business sitting to his right was debra flint of louisias angeles airpo and also head of operations ubs. and the theme remains the same

getting companies to invest in this country. >> he talked about the need for infrastructure spending on our nation's airports. also talked about some of the foreign carriers sort of alluded to that in the beginning saying we have to make them happy too. but they are under some foreign competition. he said some of them actually funded by their government, i think referring to emirates, some of the others that have been trying to expand in the u.s. they've had permission to do so by the obama administration. and that's made it more competitive for u.s. airlines. >> here's maybe a rerack of some of the pool spray. eamon javers, what did we just learn and what's next? >> reporter: yeah, carl, what we just learned is that the president wanted the press to stay in the meeting as the handlers were trying to you shall the reporters out. that's why you saw the abrupt cut in the tape. we're told that he did ultimately succeed in convincing the press to stay, which doesn't need a whole lot of convincing to hang around and continue filming these kinds of meetings. but what we learned was this is a president who's talking to airline executives and airport executives who's very much basing it on his own personal experience. he cited his own pilot in the

conversations he had with that pilot notd clear there whether he was talking about the private pilot of his trump branded aircraft or of course the pilots of air force one who are the best in the world, but clearly the president has spent a lot of time with top pilots talking to them about the airport experience and what can be done to improve it. he's also not shy about talking to airline ceos about trains and about cars and other things. he said i don't mean to add to your competition, but someone was just talking to me about china and japan and the high speed trains they have there. and we don't have any here. so this is a president who's very much focused on infrastructure and transportation. and that is clearly top of mind here for this white house today. >> well, if there's an industry he knows as well or maybe almost as well as real estate and leisure and hospitality, it is the aviation business. so we're going to watch for more headlines later on today. eamon, thanks to you. >> i would just say session highs here for stocks. s&p up, the dow's up 69 points. headlines earlier trump said he's working on a tax plan

within weeks. we saw the ten-year yield tick up on that as well. >> record highs for the nasdaq and the s&p. dow's above its record close. when we come back our exclusive with the incoming ceo of coca-cola, james quincey, and david with the new ceo and president of viacom robert bakish. you do not want to miss those. dow's up 67.

stocks are at record highs, but one company that is not joining the party, coca-cola. shares down little over 2%. delivering earnings this morning in line with estimates. revenue beating expectations, but guidance falling short. joining us for more, the incoming ceo of coca-cola, james quincey. this is his first interview since being named ceo. james, congratulations and welcome. >> thank you. thank you. good morning. >> good morning. we'll get to your leadership in a moment, but first on the quarter, it's kind of messy these days. i know you're going through a lot of transitions, spinning off some of the bottlers, working through some foreign exchange impacts.

can you just sort through the noise and tell us where the business is in terms of where you are in this transformation? >> sure. as you say there's some noise out there, whether it be the tax rate, the interest or in fact the refranchising where we're selling effectively selling divisions of revenue and profit, but i think the most important thing is to look through all that and look at the core underlying business, the business that's going to be left once we finish this transformation. it grew revenue in the full year 2016 4%. it grew profit before tax even with a higher interest charge grew 8%. so we're seeing a strong robust on the line business being created from this transformation and acceleration from '14. and that's the business we see emerging into the future. yes, still some noise as we complete the transformation in '17, but a robust growth business emerging from that. >> so is your message to investors you have to look out into 2018 to finally start to see a leaner growing coca-cola?

>> yeah. i think, you know, the central issue in '17 is it's the biggest year of refranchising, we're making a lot of structural adjustments, we're selling a division. and as they look at that they should pay most attention to is the business of the future growing strongly, growing in revenue, growing consumers and growing profits. and that's what they'll see in '17. they'll have to net off the structural. and that will continue into '18. so it will be a good business going into the future. >> north america is a bright spot for you, particularly in this quarter. what's driving that? is it the bump in consumer confidence that we saw after the election? >> the north american business had a great fourth quarter. really i think it's really the culmination of what they've been doing over the last few years. we made a transformation, our business, in north america. we focused the portfolio on more categories. we upped the marketing investment, we improve the execution, we transform the bottling system refranchising it and i think the whole team has pulled that together. and now they have two really

strong years capped off with a great fourth quarter. the north american business is humming. lot to do in 2017 with the biggest year of refranchising. but we're confident, the team is confident that we can continue to drive that business forward. >> though emerging markets have been painful. global volumes declining because of latin america. what's the outlook there? >> yeah. the developing and emerging markets are more of a mixed bag. some have performed really well this year. nigeria, pakistan, even china came back in the second half. but the concentration of the ones that are on the more macro economic stresses in latin america, particularly venezuela and also brazil, a big market for us. that came off a little towards the end of the year. and now we're really focused on the game plan that we know works. reset the packaging, reset the pricing approach, become more affordable, work with the consumers, gain share and as the economy in brazil would eventually improve, we'll see

that business rebound. it's a game plan that's worked well for us before. worked well in china this year. and it will come through in brazil over time. so it's still a mixed bag. >> uh-huh. i was just going to say muhtar kent this morning on the call who will become the chairman in a few months when you become ceo, called you the right leader at the right time. you're about to take over the world's biggest soft drink maker at a time where soft drink consumption has gone down, at least in this country, and continues to do so for years. sugar taxes are rising across the united states and internationally. how do you wrap your head around some of these major challenges and start to think about this company of the future? >> well, i think the company of the future is starting to merge. and i think what it's about going forward and what i'll be focused on is accelerating that, making us not just the world's largest soft drink maker, which we are, but we're also the world's largest beverage company. we make beverages across all categories. now number one or two in

virtually every category. and we not only see a path to grow those categories, we see a path to grow sparkling. sparkling grew in north america not just in revenue but in volume. so what we're seeing going forward as we focus on smaller packages, so north america smaller packages grew almost 10% in volume, as we focus on smaller packages, as we focus on no calorie sparkling beverages like no calorie colas, which accelerated in their growth in the second half of '16 and are now globally growing well ahead of the rest of the portfolio, we see a future emerging with a reshaped growth equation towards sparkling, more focused on transactions and less worried about volume, yes volume in the emerging but getting revenue growth of sparkling and that's building on growth in '15 and growth in '16 of sparkling as part of the total portfolio. >> when you say sparkling, i

want to be clear, you're talking about the carbonated beverages? brand coke, diet coke, coke zero, i know sprite and fan ta had a good quarter, but what are you going to do about diet? >> yes, absolutely. i mean, our biggest sparkling beverages, coke, fanta and sprite in the u.s., sprispriewe didn't get quite to growth in diet coke, for example. we're slowly reducing the rate of decline. we're getting there. i think this is a great brand. it's got a great future. it will come back. what's really important i think is to also look at the growth of coke zero. we globally have been driving coke cola zero sugar with graphic changes, with positioning changes, with formula changes, and that's starting to build real global momentum. 2015 the rate of growth was better than '14. 2016 the rate of growth was better than '15. and as i said, zero calorie colas now globally is outpacing the growth of our total portfolio and showing good growth across the world in

volume. there's a future for no calorie. >> yeah. what is your relationship like, james, with your number one shareholder warren buffett? >> warren buffett is clearly an important shareholder. we love all our shareholders. i've been up to see him up there in omaha and i expect to go and see him throughout the year including his agm, and he's been a long and loyal shareholder of the coca-cola company, but we deliver for all our shareholders. and we're very focused on making sure that we start to emerge from this big headwind of currency and to some extent selling our bottling businesses so we can get focused on growing our comparable eps into the future, deliver a better number there that will drive the stock and drive returns for shareholders including warren and including the secretaries of half of them in the 401(k)s. >> i'm glad you mentioned the stock, it's underperformed in the last year, underperformed

staples, pepsi, which is significantly higher in that period. do you feel like you have a big job ahead of you convincing investors of this transformation? they don't seem to be totally onboard. >> i think the investors see some of the headwinds. i mean, we're one of the companies in the u.s. most exposed to international earnings. and clearly the u.s. dollar has gotten stronger so that's played against us. we've sold off our bottling operations, we're selling profitable businesses, so that's clearly going to take our earnings down. but i think what investors are starting to pay attention to and starting to see emerging from the noise is a business which is growing revenues, growing -- we grew the core business 4% in 2016. we grew profits despite higher interest at 8%. that's the business they'll see growing into the future. and that's the business they're going to get excited about. >> i wanted to ask you of course about the new administration in the u.s. and on immigration, because you guys put out a statement opposing the new executive order. muhtar kent is from turkey, you are an immigrant from the uk,

clearly this has to hit home. do you have any other plans to fight it? and is this affecting your business? >> look, coca-cola has stood for inclusivity. we're in 200 countries around the world. we have always stood for that. we're always going to stand for that. so we think that that's part of our core values and that's what our statement that muhtar put out was all about. it doesn't affect a lot of our employees but we wanted to be clear about what our brand stands for and what our company stands for. and we see ourselves continuing to operate. now, in the end we are a local business in 200 countries. so we will be vibrant everywhere. >> what about the super bowl ad? i know you've re-upped the america the beautiful ad which got a lot of chatter on social media. have you seen any backlash from that? >> not everyone loves every ad, but i think generally overall the response was positive. we were talking about celebrating our beautiful country and all the people in it. we ran some other ads on sprite

with lebron and on coke, we're about celebrating every country and the super bowl was about celebrating america. >> finally, you mentioned you're a local company in 200 countries. you're one of the most globally exposed american countries. how nervous are you about what you're hearing from the white house some of this protectionist talk from the new administration? >> look, the great benefit of being local everywhere is we create great jobs. i mean, the coca-cola company with its bottling partners we have factories in virtually every country. we have many -- over 100 factories in the u.s. we employ truck drivers, salespeople, we create great blue collar jobs in every country. i think that's what governments appreciate. they're looking for people who invest in their countries and create robust real jobs. that's part of what the coca-cola system is really proud of doing in every country. >> have you had any interaction with the new administration? >> none myself personally. i think they've got their agenda full with other items at the

moment. >> all right. we will see. and we'll talk to you again, james. thank you so much for joining us here on earnings day. james quincey is the incoming coca-cola ceo. takes that job, carl, in may. and he's going to outline more of his strategy next week. there's a big consumer conference -- week after next, excuse me. >> that's a gig. that is a big job. when we come back, david's exclusive interview with the new ceo of viacom, robert bakish, his first-ever tv interview since taking that job. dow's up 84 points as ten-year yields and now retailers find their legs. thtune s ready n. wi the hp esineces mpies the agrowg thec modvd taaladenrorod in c u thtune s retantcmarialg.le yr cosowburg

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let's get to our own david faber with the new head of viacom, robert bakish at viacom hq. hey, david. >> hey, carl. i made it up to midtown here of

course at viacom's headquarters. and we are very happy to be joined by bob bakish, as you said, the ceo of viacom. it's been a while since we've spoken to a ceo of this company. so thank you for having us, bob. >> great to be here with you in the middle of a new york blizzard in times square. >> we're getting a great view of it out the window there. i think it's factual to say that this company was not managed particularly well by your previous administration. i can say it, you don't have to even comment. but given that mismanagement during a crucial period of time for your industry where changes were occurring very rapidly, what gives you the confidence that coming in as you have after that you can turn around this company? >> look, there's been a lot of drama around the name. no question about it. the last, you know, 12 to 18 months there was a lot of noise. what typically got lost in that noise was a couple sailing facts. one, we still have the largest share of viewing on pay tv in the u.s. in every demographic we serve. two, we have more television homes globally than any other media company in the world.

three, if you do the math, over 100 billion hours of our content viewed by consumers in 2016. and four, we are widely known to have some of the most advanced capabilities in the commercial space particularly when it comes to ad sales and data-driven tv product and sponsorship. so there's a lot to work with. and, you know, we got a set of world class brands. that said, you know, when i came in it was apparent the company had some issues. we had some near-term performance things we had to address. and we've talked about them in a variety of settings, whether that's mtv u.s. ratings, paramount studio, u.s. distribution where some relationships are a little frayed, but fundamentally we have a lot to work with. and so, you know, starting day one what i did was do a real clinical assessment of where we are. i mobilized the troops, so initially got each of my direct reports to give me one or two people from their team to work on a cross company task force to

help drive the development of a plan. that ultimately involved about 150 people. and i took that as input and shaped it into a strategy for the company that we delivered to the board on monday that they resoundingly approved and we started talking about today on the earnings call. >> and i want to ask you about that call. >> and i want to ask you about that strategy. but you know the larger criticism of viacom, certainly during the period of tumult, if i could call it that, that preceded you, is are these must-have networks in a world that's changing rapidly over the top to skinny bundles, to all sorts of different platforms? do they need to include a nickelodeon or mtv or comedy central or b.e.t.? is it must-have content? how do you answer that question? >> well, you talk about nickelodeon. if you look at calendar '16 or the last quarter, nickelodeon was number one in the u.s. on all three kids demographics, 2-11, 2-5, 6-11. it produces approximately 650 hours of original programming per year. so, not only did we deliver in

'16, but we had a really strong pipeline going forward. we have continued -- and this has actually been a criticism, perhaps, you know, looking in the rearview mirror, but the fact of the matter is nickelodeon is bringing new hits to life. looking at an animated show like "loud house," a hit, "paw patrol," hit in preschool. it's not all spongebob. that continues to be important, but the portfolio is much broader. and we have already extended that brand outside of television. and what we're talking about today in terms of our flagship introducing the notion of flagship brands. >> right, six brands. >> flagship six, yeah, which includes nickelodeon, that's an opportunity to elevate them even further. but consumers on a global basis, by the way, because that's a key element of the flagship, they have a real appetite for nickelodeon and our other brands. doesn't mean they're all in the same state of health, you know. some of them need some work. but i'll look at mtv outside the u.s. it's grown audience share from

'14 to '15, '15 to '16, '17 year to date, and our international portfolio is up 16%. >> mtv is doing well internationally, you've ran that for a few years, but mtv in the states has had a rough go of it. what makes you think you can turn it around? >> look, i'm a believer in strategy and enabling organization. so, in the case of mtv, we put in new leadership in i guess november in the form of chris mccarthy. chris is a very talented executive, drove vh1 to growth when he took that over. i've spent a lot of time with chris. he's got i believe the right strategy in place. he and his team have already done a lot of work stabilizing the ratings. they pulled actually 100 products out of development. they have a new pipeline going in. we saw growth in december, which is the first month we saw growth for 25 months. so, i fundamentally believe in the brand, because we've shown it can grow in this changing landscape outside the u.s., so

therefore, it can grow. we just need the right team and the right strategy. i believe we have that now. >> and how long do you see some of the changes you've put in place and sort of mark today with this six flagships -- how long until you expect to see real results at mtv with the new leadership and with some of the turns at comedy central and some of the other networks? >> so, in general, my objective for viacom is to have a continued evidence of improvement. so, it's not about a story one day or three months from now or the end of fiscal year. we're going to continually put points on the board. in the case of mtv, we've already -- u.s. -- we've already started to do that. as we get to the up-front, we'll unveil a new slate of programming, which will be on air in our fourth fiscal quarter, which is the summer. so in the summer you have a lot of new programs. so, i believe that trajectory will continue, but that's a microcosm of the overall story. because again, if you look at the strategy we unveiled today, parts of it are actionable near term and parts of it will take a little bit of time. take the -- for those that

weren't on the call, which is i guess most of your audience, this notion of flagship brands includes the fact that they will have a piece of the paramount film slate. now, if you look at a feature production, roughly speaking, on average, it's about 2 1/2 years from the time a project is conceived until it ultimately gets to theatrical box office. >> right. >> so, there is some window. today we announced four projects for nickelodeon, including films in 2019. the first one's actually an original piece of intellectual property called "amusement park," which will debut as a film in '19 and become a tv series on nickelodeon the following year. there will a bunch of franchises right behind that we're going to announce. some of those are existing nickelodeon properties. so, part of it is about growing these franchises, because that's where you can make a big difference in the world. >> as much as investors talk to me about the viability of the cable franchises, they really come back to paramount, oftentimes, because -- and these were your words on the call today -- i mean, significant

disappointment financially. and they look at all the costs there. i don't know if you break it out, but millions in costs. we're talking about a division that had i think $4.2 billion in revenues in '13, down to $2 billion in '17. how long will it take to turn around paramount? do you need to invest a lot to do it? and do you have a roadmap to offer investors that says we're going to get this back on track? >> there is no question paramount had a rough couple of years. you can look at the box office statistics and p&l and that is obvious. at the same time, it's an iconic studio, over 100 years old, that's a library that throws off hundreds of millions of cash every year. and it is -- it has strong capabilities. i believe we announced today a competitively advantaged strategy for the studio, which includes taking advantage of some of the pay brands we have in the house, which have audiences 365 days a year,

durable awareness from a brand perspective, have a pipeline in franchises and talent, and that will give focus to some of the projects paramount is working on, so people know, ah, this is the kind of film we can make with viacom together with the brands and paramount. i think that's a real source of advantage, and that will help us grow margins in the business. at the same time, we will continue to have a paramount slate. you look at a franchise like "transformers" which we do in partnership with hasbro, great franchise. we have a big film coming this summer, and that has been a big success for us historically. >> -- cost out, though. at the same time, people would say maybe you've got to invest a lot in tv production. >> well, i'm glad you mentioned tv production. four years ago, paramount wasn't in the tv production business. one of the truths of the split of cbs and viacom, you know, some ten years ago, was the cbs side took the television production business with it. >> right. >> now, it's true that cbs has a

broadcast network, and therefore, there was a lot of logic to having production. at the same time, a studio with only film production is actually a very volatile animal. it's important to have both television production and film production for the studio business. the good news is that starting from zero, you know, three, four years ago to today under amy powell's leadership, we have built a very nice and rapidly growing tv production business with a broad range of clients, clients including in-house customers like nickelodeon for "school of rock," traditional networks, as well as call it new-age networks. and that business is break-even or better this fiscal year and is on track to becoming a nice profit contributor to not only paramount, but obviously, viacom. so, paramount has -- by the way, paramount has great people, and i'm confident that as we turn the page on this new strategy, we will restore paramount to growth and profitability. a typical film studio should be

in the 8% to 12% margin range. i believe we'll get there. >> how many years? >> and i think it's very exciting -- >> how many years do you think it will take you to get there? >> i think it will take us -- look, if a project takes 2 1/2 years, you know, we will be on a continued improvement. and paramount has, i would believe solid performance coming in the back half of the year, and we are going to keep going incrementally. but to get all the way there, you're talking about two years. >> i want to talk quickly about the balance sheet. you're fairly highly leveraged, 3.7 times. the previous management took on a lot of debt, used it to buy back stock, which had the benefit of increasing eps, but not much else. do you feel you need to do more things than produce increased cash flows to get where you want to be in terms of investment grade or reduced leverage, or are you comfortable? >> look, we're absolutely committed to maintaining our investment grade status. as you point, the metrics aren't there today, but we have some runway, we have some time, and

we have a specific plan to get there. that plan includes improved operating performance, but that won't get you all the way there. we are looking at some nonstrategic assets that we own. that will help. and then we're looking at some other tactics. but you put them all together, we have a path back to investment-grade metrics. and again, it's very important to us. >> and no plans to sell any part of paramount? >> no plans to sell any part of paramount. in fact, it's interesting, if you think of paramount in the arc of six months -- six months ago, the strategy was to essentially go on track to selling or at least half of the studio. today we unveiled a strategy whereby paramount is an integral part of viacom. in fact, when i was with our employees opening our new state-of-the-art hollywood offices for our brands a couple weeks ago, one of the things i remarked that i like is you can see the paramount water tower out the window, and that was foreshadowing paramount becoming much closer to the pay brands and becoming an integral part of viacom. so no, there are no plans to sell paramount. >> finally, bob, affiliate fees

for your six flagships are built into agreements, but these other cable networks that you're not going to be investing in much any longer, do you run the risk of having affiliate fees go down as a result? >> so, a couple points. one is, yes, we talked today about the flagship six. all of our networks are not in the flagship six. we have some other strong networks -- vh1, cnt, tv land, logo, et cetera, that are still -- and the reason those networks are not in the flagship six is they are not global. that's one of the attributes. i don't believe they lend themselves well to a theatrical window. that's another attribute. so they're not flagship, but they are fundamentally important to the company, point one. point two is, if you look at our affiliate relationships, we tend to do business on a bouquet basis, right? so, we will evolve our relationships to place additional importance on those networks, particularly as they get more resources and they get stronger. >> bob, we've got