>> i hear you got some lessons. >> i took some swings. i'm terrible. never. >> you got that one to the hole, right? it went like 80 feet past the hole, that wone putt, didn't it? >> yeah, little over. >> one journey starts with one step. >> 90% of putts that are short don't go in. it's a joke. make sure you join us monday. "squawk on the street" is next. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. stocks working to build on those record highs as the s&p goes for four straight wins. that would bed first such streak of the year. more talk about what tax announcement the white house has in mind as the president responds to the appeals court. europe is mixed. dollar's stronger. yields up, oil almost back to 54. roadmap begins with a trump rally after the president promises a phenomenal tax plan

announcement soon. futures point to more gains today. >> plus, he was the first world leader to meet with the president-elect. and today japanese prime minister shinzo abe heads to the white house to sit down with now-president trump to talk trade and the global economy. >> sears soaring after the retailer maps out its turnaround strategy to shed some debt and cut costs. first up, stocks are aiming to hit new milestones a day after all three major indices hit record highs. move sparked by the president saying he plans to announce tax reform measures in the next few weeks. meanwhile, apple shares awfully close to their all-time closing high up $2 from the intraday all-time high. we're going to watch 134.54. as for the tax stuff, guys, spicer in the briefing yesterday seemed to suggest comingling individual and corporate not out of the question. >> no, look, the rally yesterday was caused i feel like the money out of bonds into stocks because there were people who felt, wait a second, maybe this whole thing could happen. it's amazing how on-again

off-again it is. trump had big ratings in the phenomenal because it's a ratings derived administration. what do you think of that? >> i agree. >> you do? >> yes. >> is that because it's my birthday you agreed with me up front? >> no, i wouldn't do that. no playing favorites on your birthday. i'm always straight with you. >> that is when i saw interest rates soar yesterday. >> and when i heard about the phenomenal -- i've always approached taxes at not being phenomenal or not phenomenal, but that got people going. >> it did. >> it made people feel like maybe he's got a master plan. >> i don't think he does. do you? >> well, you got brady of house ways and means saying that the president and house gop members are going the same direction in a good way. that's his quote. you had senator purdue of georgia basically put a -- put the end of the week, a very bad week for border adjustment,

right? >> right. well, i think border adjustment, the way that border adjustments been talked about of late is that this is something that would decimate the american consumer. what consumer who shops at dollar tree and dollar general, those were the ones that really worried yesterday. a lot of the down and outers were. there was talk yesterday, we had some conference calls that were just not talked enough. the cummins, big company, called the bottom. clf, 50 million shares for sale, but that was a call to end all calls. that was drama. there was genuine drama on that call. called out all the other executives in the industry but talked about the chinese coming back. this is an issue that alcoa, the aa kind, the chinese are buying, i don't know, they're not doing this to stop trump but chinese are buying more high quality u.s.-based aluminum and iron ore because it's cleaner. there's pollution and they're reacting. and it happens to dovetail

correctly with the idea yesterday everything with no border tax and it was just a nirvana day. >> right. although when -- okay, phenomenal tax plan, house and white house some agreement there in terms of strategy maybe or what they're looking for. but if there's no border tax, i just don't know when you look at it you need it, it would raise the trillion dollars over ten years. it's the key part of having it be revenue neutral for the dynamic scoring that you need to do it for the 51 votes. >> at a time where -- >> i don't know how they get there without the border tax adjustment. >> we got this report yesterday on debt-to-gdp ratios. what trump's inheriting is not good. >> no. >> and what is projected is even worse. >> that's why rates went up, i think. people said, listen, government's going to have to borrow a lot of money. >> throwing infrastructure spending. i don't know. we will see. we've gone back and forth this week on tax reform, haven't we? the white house what they said

yesterday and earlier in the week though a lot of people thinking border tax, to your point, looks like it could be on the outs. >> well, you had about 20% of the stock market going down every day because of the border tax. >> right. as barclays in a note pointed out this week the vast majority of retailers would be free cash flow negative with a border tax. >> right. you want to wipe out everything other than amazon, be my guest. amazon can replace retail. we know that. one of the things amazon can do is literally replace retail. >> doesn't mean their prices wouldn't go up either. a lot of the stuff on amazon comes from somewhere else. >> i really want to tell these guys, where the dollar will go up, guys, go get a job in the private sector, realize how the economy works and stop trying to pontificate on what the dollar will do. because you really don't know what you're doing. you're elected officials, you don't really know. you've got some sort of playbook. i remember when we all went to school we read "samuelson." much of what they said has been

repudiated. >> right. >> i also took seven courses in communism, talk about repudiation. i think whatever model they're using is facetious. what really matters is if the president rams through these tax cuts and there's no offset, then we're going to have a ballooning deficit. >> the thing is the president can't ram through the tax cuts. >> that's what i'm thinking, but yesterday was a ram through day. >> right. but i think it's interesting when he says something like that, phenomenal, and somehow everybody thinks, okay, now it's all fine. it's going to happen. >> he's got compelling ratings. he's got the ratings to do that. did you buy any ivanka stuff yesterday? >> no. >> no for valentine's day. >> you know me, do i ever buy anything? >> no, you have to go online to buy it and i like to go to the stores so it's not as much fun for me. >> yes. >> i will tell you one thing people bought a lot of, i know we want to get to trade but we have to talk about nvidia here. >> i spent the morning and night last night talking about nvidia hoping you would ask about it. >> over what we've seen the last

few days in particularly the growth names, that was quite a quarter. wow. >> it's a quarter. i called my staff together from "mad money," i said, guys, drop everything. this is it. you have to understand nvidia. i've asked a bunch of people in silicon valley, i said -- i'm going out there next week, i don't know the people at nvidia, but nvidia's the answer. it's a frighteningly positive story. frightening because 66% gain in data center business. 8% linked quarter. professional viz ral sags -- anyone know what that is, triple data center. tesla, amazon, facebook, google, all mentioned in the quarter. virtual reality gaming e-games. >> epu computing platform, rapid adoption artificial intelligence. >> it's all a.i., self-learning, you need their chips to detect lanes, signs, buildings, curves, neuronetworks. this is it, guys. this is replacement of us. this is replacement of us. we don't need us with nvidia.

we just don't. >> takes a crack at why tech is doing so well. their point is that you look at u.s. tech, it's 83% of the sector's global market cap versus half of that for industrials. meaning there's less susceptibility to substitution if trade wars happen. because the u.s. dominates the global space. >> i got to tell you can't do -- if you want to solve cancer, it's nvidia. i know that sounds ridiculous. >> i get it, right. >> heavy section on cancer in the conference call. if you want to be able to deal with video games. >> that has to do with artificial intelligence. >> all artificial intelligence. the idea what is amazon -- they talk about inference, what is inference at amazon? that's if you like this, like that, it runs on nvidia chips. if i were intel today and i love bry bryan krzanich, i'll pay $50 million -- you know it's not the money at that point -- >> to the point, jim, a quarter where they had 55% revenue

growth and gap gross margins of 60%. >> which is the old -- well, intel -- >> right soch. so what are you willing to pay for that? >> it doesn't matter. >> overall year-to-year that is up 38%. fiscal year '17. >> this company should be worth $100 billion. >> well, it's worth about 65 now. >> if everything runs on this thing. by the way, can i also say on this conference call i need to take the night school class in comp science at stanford. do they have it online? like phoenix online there? >> there's no -- even the ceos of these companies couldn't program what their engineers are doing now. >> i have to tell you, you need a programmer to read this conference call. there's like -- i don't really understand the idea of the neuronetwork and what it means. >> the neuronetwork, it's recreating kind of the brain in a sense. >> and i read it and said we'll get rid of this -- >> it's a similar -- >> there was a movie about this. >> which one?

>> "terminator". >> because there also was, spielberg did have a.i. >> i'll be back. and it came back as nvidia. this is a frightening conference call. we're nothing. >> i've been spending time on this. i'm less concerned that it's coming so soon. the terminator, i mean. but it will. >> look, when you see your tesla just dropping everybody and using these guys. i mean, they are the brain. by the way, they're not -- they're like the least promotional guys. i mean, they're just very solid. i was talking to a gaming executive. i said i hope you read this thing because you can't do the gaming without their chips. artificial intelligence, virtual reality, this is like it. this is it. >> voice recognition. did you hear that bank of america has sort of their own alexa now called erica, as in bank of america in which you'll go to a branch and there will be nobody there but you'll interact and withdraw money. >> is there a name of one of these who i haven't gone out with at one point in my career?

>> we're going to get to a lot more on nvidia later on. trade obviously is going to be top of the agenda today. the president meets with japanese prime minister shinzo abe at the white house. both leaders looking to forge a tighter economic balance. president spoke to xi jinping last night and basically backed the one-china policy. >> yeah. >> but on japan it's going to be about qe, currency intervention, trade imbalance, toyota, sprint, u.s. auto barriers, right? >> yeah, i don't know how pleasant that's going to be. i mean, i just don't think so. i mean, it's good environment. but, no, i mean, you got to read the cliffs natural conference call to talk about the resumption of american greatness because of trump and just how trump is willing to reindustrialize our nation and make it so that we're a great nation. and it's almost zero sum. i read the cliffs natural call zero sum and the japanese are

not a winner in this environment. >> well, that's the way the trump team seems to view some of these relationships and that's a key question, i think. >> how do you think that goes over? >> will that evolve? >> ill advised? >> depends who you talk to. >> well, if you talk to cliffs natural, if you read the barcla barclays note today about the greatest time, most bullish investment secular case we've ever seen in industrials, this is about taking back the world. taking back the world under president trump. now, i know that twitter there's two presidents, there's the guy who like, you know, says see you in court. which is kind of like, all right. he's like the john wayne president, right? and then there's the president who is reigniting the industrial sector and people are just go to the cummins call. you get a sense, let's ride this baby. >> you got lloyd blankfein webcast goldman saying the environment is turning growthier, more opportunity, we're getting a bit more optimistic. of course the stock has added a

third since election day. >> he's usually a skeptical pessimist. that's good. thank you, lloyd. it's good to be back, lloyd. not unlike that scene in "the shining," right? lloyd? and i feel like it's about time. because he's always been so skeptical. and it's not been wrong. there hasn't been a lot of growth. but you're talking about a level of growth that jeff immelt talked about that. that we've had anemic growth for a decade, when i interviewed him. and i just think there's a lot of people say, look, it's going to happen. it's going to happen now. i know you're septicle. >> we'll talk more about things that haven't confirmed, right? some inflation expectations are not entirely going your way. >> the president if he were to tweet about that stuff, you know, let up a little bit about nordstrom, i don't know, why couldn't he call a failing nordstrom? they're not having that good a time. nordstrom's having a tough quarter. that's what i'm surprised about.

why doesn't he come back and say i hear you having a tough quarter, nordstrom. sears, maybe you're making a comeback. tweet a little more relevant. >> when we come back we will look at sears which is soaring 40% in the premarket. take another look at the premarket. none of the major averages have moved 1% in 43 sessions since december 7th on a closing basis. we're back after a break. i love how usaa gives me the peace of mind and the security just like the marines did. at one point, i did change to a different company with car insurance, and i was not happy with the customer service. we have switched back over and we feel like we're back home now. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children, and that they can be protected. we're the williams family, and we're usaa members for life. call usaa today to talk about your insurance needs.

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♪ sears holdings soaring in the premarket. the company announces a restructuring that will streamline its operations. sears says it's targeting at least $1 billion of cost savings on an annualized basis. the more they cut perhaps the better they would do. maybe, jim, if they just closed everything the stock would go up even more. >> well, you know what, this is another one of those releases, i don't like these kinds of releases. releases that talk about how great things are when i'm dealing with a lot of retailers that have minus -- >> sears has had same-store declines for as far back now as long as i can remember at sears and kmart. the stock was below $6 a share. the market value amazingly enough around $600 million. why are we talking about it? well, it's sears even though from a shareholder perspective let's not forget lampert's and

throw in bruce, not a lot of stock around for this thing. >> no. >> but you were saying the other day how much longer can sears hang in there, well, they're going to try to hang in there a lot longer with $40 million in new liquidity. >> obviously when the stock was at $5 they were concerned if the stock breaks below 5 credit gets cut off. they're very smart about the stock market. reduce outstanding obligations by 1.5 billion, utilizing proceeds, sell real estate, same playbook, stock goes up. >> so you think this is enough to offset what some have called for that is an end game of sorts come summer, august? at least this year? >> they'll forestall that, but look, i'm worried about outfits like target. >> right. >> i'm worried about kohl's and jc penney. i don't feel like this changes my mind. >> i'm sure it doesn't but target a $37 billion market value. why are you worried? >> i'm worried because of

amazon. i'm worried because of traffic. i'm worried people stopped going to stores. remember target had plus 40% e comp in november and down same-store. i think this is -- look, i'm worried about restaurants. i'm worried about anything -- drugstores. anything that amazon can be in. like sears, in the end comp stores can do it all they want. they can sell stores, they can do anything. in the end this is like dog food. okay. it's like dog food. new and improved, right? better tasting than ever. but if the dogs won't eat it, what does it matter? right? you can do all you want. >> you didn't just compare sears merchandise to dog food, did you? >> let's see, carl, total comparable stores for the fourth quarter were down 10.3%. 8% at k-mart, 12.3% at sears domestic. by the way adjusted ebitda they lost $61 million as opposed to actually $137 million in adjusted ebitda loss. i don't know. >> well, you know, the idea is if you bought it yesterday --

>> sounds like dog food to me. >> depends on the dog food. if it's private label -- >> by the way that stuff is expensive. >> if it's blue buffalo, they got a chance to go to 8. >> what about those treats? they charge a fortune. >> i had the pepperoni treats, i ate them on air and was sick for two days. don't eat those. don't eat dog food. just a heads up. >> nice little -- >> if sears survives, it survives. they're trying to play it for another day. maybe it will catch fire. maybe this time. they'll be able to sell die hard, it's a game to stay alive. and today they win. today is the day they win. and that's okay. it's about right sizing and selling to e-still properties. yeah, in the end if you don't go there and shop, it really doesn't matter. it's about shopping. and i've gone to sears. i haven't gone to a kmart in a while because, i mean, geez,

whoa, man, that's a tough experience. dollar tree is like going to saks and tiffany. >> we're going to get cramer's mad dash, we'll count down to the opening bell, take one more look at the premarket. it's jim's birthday. you can tell he's on fire. more "squawk on the street" in a minute. i'm vern, the orange money retirement rabbit, from voya. i'm the money you save for retirement. who's he? he's green money, for spending today. makes it easy to tell you apart. that, and i am better looking.

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it is your birthday. happy birthday, again, one of many we're going to wish you. >> thank you. >> atvi is the symbol, activision is the name. >> eddie put the whole thing in there with mnuchin, shin for steve, chin for the rest of the family. >> okay. >> this is a remarkable quarter. average user up 37%, 450 million players in 196 countries up 83% over two years. an apac growth, david, nvidia, i give you activision. it wouldn't work -- this thing, this is what people do, david. they order in, they watch netflix. when they're not watching netflix or maybe when they are watching netflix, they game. king, that business they bought, meaningful advertising, e-sports, everything. david, this is it replacing

every aspect of our life that isn't replaced by machines including what we do for fun. i don't know how much gaming you do. >> i don't do much. there's some that goes on in my family. >> my family games constantly. so take two a winner this week. activision a winner this week. i've got to tell you, david, this is the young. you know, my birthday, i have to recognize. i read books. i know. i mean, i'm an idiot, i read books. right now i'm reading the frank book about downfall about the end of the japanese -- just happens to be that is not related to president trump. but i read books. and i feel like every time i pick up a book it's like, wow, i mean, bam-bam. remember bam-bam? >> yes, i do. >> a lot of people are still reading books though. >> no, they do not. that's not true. >> yes, they are. there are people still reading books. >> we're octogenarians. >> no, you're a se--

>> stop it! >> don't worry, he's cranky. you would be too if you were as old as him.

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"squawk on the street" live from the financial capital of the world on this friday. the opening bell in about 60 seconds. interesting market setup here as we see these tax hopes keep policy hopes alive, jim. >> right. >> oil, these reports of 90% record high compliance that opec is about to crack 54. >> and 1.4 million increase, which by the way we keep hearing that u.s. production is driving prices down. there's no way if there's demand for 1.4 million additional barrels, there's no way u.s. can make that up. u.s. is not going to be able with the permian cannot do it. >> and the api number is a one-off. >> i sure did because gasoline is great demand. i think that the whole negative oil thesis is predicated upon people who got long and then blew it out right at the 50, 51. the companies i speak to just continue to say, listen, below 50 we can't make a lot of money. so they're not going to buy. other than pioneer which you saw is up today. >> we're going to watch that.

obviously japanese prime minister abe is at arlington national cemetery now and goes to the white house at noon. look for a press conference at 1:00. they go to west palm this evening. there's the opening bell. and the s&p at the bottom of your screen. at the big board foundation building material, specialty building products supplier celebrating its ipo today. over at the nasdaq one love foundation dedicated to ending relationship abuse. as for europe, industrial production in the uk up one, well above expectations. >> i continue to talk about europe being strong. and i know people come back and say, listen, how about that italian banking system? okay, look, italy is not good. >> italy is not good, but europe is good. >> well, italy's a very big part of europe. >> it is. >> because of the bond market. >> right. >> and bonds -- their bonds -- they should trade lower. interest rates should go higher in italy, but everyone figures

that the eu backstops them or the ecb. but i have to tell you i think germany's very good. i think france is good. i have not been recommending the banks because it's too risky because we don't really know how their banks -- they have not stress tested the way we are. but spain is good. and i'm going to keep on this theory i see europe turning. i see european industrials turning, banks turn, and that does matter. we do a huge amount of business over there. it's been a highlight particularly for power companies, for industrials, autos. what's the matter? >> looking at twitter down another 3%. >> oh, seven downgrades. six of them to sell. >> yeah. ubs can't fly with broken wings. kind of a littertiertive thing there. look, the part-time ceo was talking about all these great things. >> we had this conversation in part yesterday about twitter. >> they need a full-time ceo.

i mean, come on, it would be helpful. there's a challenge. >> they need a lot of things. i'm sure that would be helpful too. >> they need like five ceos. and they got to work around the clock. by the way, they need to invest. now, they say that they're investing like mad, but the fact is this is another dogs won't eat it situation. >> i was going to say, it sounds like what you just said about sears. >> yeah, the dogs won't eat it. by the way you can entice those dogs. all that stuff that's good and good for you dog food, you've got to starve the dogs to eat that stuff. and fresh pet, you put in the freezer -- in the refrigerator, you know my son ate that. he thought it was like -- he put it on a piece of bread. look, i'm just talking about dog food does not sell. >> they needed to sell the company and unfortunately they couldn't get there. and members of the board knew that. >> well, it's a lot of money. >> they were there. they were close. >> well, they needed the stock lower to sell it. maybe that's their plan. no. >> no. that's not a good plan. that's not the way you draw it up.

>> i mean, the revenues -- i don't know, look, there's so many places to advertise. maybe -- i was trying to giff them a break yesterday by saying, listen, the fold -- it's in the stars, not themselves kind of doing reverse shakespeare thing. no, doesn't hold up. shakespeare no good. >> we got record highs for all three indices again. second day in a row. just getting word from s&p that the president is on track for the best first month performance by a new president since potus 41, george h.w. bush. >> really? >> 1.6% in the first month. >> wow. geez. >> obama came into a different setup. first month was down 4%. >> right. well he had kind of cataclysm going there. >> he did. but then he got the turn. he was about only a month shy or two months shy of the bottom. >> that term when bernanke said we're done with the banks going out of business.

that was bernanke, remember him? >> a lot of things happened in march of '09 that helped our system. stress tests on the banks which came not long after. >> right. no. >> capital raising that went on. >> and tim geithner saying, hey, listen, guys, we're going to change everything. >> speaking of, you mentioned facebook, right? >> yeah. >> word from the journal this morning that they are going to agree to an audit of their viewership metrics. they gave a presentation in washington yesterday to the association of national advertisers, the journal here is citing sources familiar with that meeting. >> well, they'll take the stock down initially on that and then you'll say, listen, complete narrative, goes down first then goes back up. by the way, the stay at home market is incredible with the domino's pizza and the netflix. netflix goes up, geez, some of these companies stay at home. there was an article about a restaurant that closed near my

tavern. and it's like, you know, people don't go out. i mean, people don't go out. they take out, they deliver. >> well, they do go out. >> no, they don't go out. >> what do you mean they don't go out? you have a restaurant. people show up there every night. >> that's booze. booze still attracts. cuervo came public this week. border tax would ruin me. >> yes, it would. it would ruin you. >> do you think starbucks weakness relative to dunkin is political in nature? does nordstrom, under armour, do they need to start thinking about that stuff? >> i think starbucks is all about what panera talked about. it's throughput. >> really? >> now, i got mine today and it was incredible. i got it immediately. however, i was the first person there. that's the way to get it. beat the line. now, starbucks has a problem. and they claim they're going to fix it soon, which is exactly what panera did when ron shaich said, holy cow, we got people who are furious at each other because they come in with a mobile order and cutting the line and all that stuff. starbucks says it's going to fix it. when they do, it doesn't matter

if they adopt the marx is lennon able playbook, they fixed that thing. and i got to tell you, trotski could run that place. >> leon? >> yeah. had a couple good years there. >> died in mexico, didn't he? >> ice pick. >> ice pick. >> that's an unfortunate way to go. >> you mentioned netflix awfully close. kensho had a great stat yesterday, when new york city gets four inches of snow in 24 hour, it's up 1% the following day. and right now it's up about half to two-thirds of a percent. >> that's the strangest thing. that's it, man, people staying home to your whole thesis. you've got a few of them. i know most of them. you've got the stay at home thesis, the humanization of pets thesis, you've got -- i can go through all your thesis. >> the oa thesis, scary. >> oa?

>> the oa, season two just announced. >> isn't that great? and stranger things 2 going to start out halloween. >> i'm way behind. >> combined with the snowstorm. >> yeah. >> stock goes to 2.30. >> are some of these names getting a bit ahead of themselves? >> of course. >> netflix up 17% this year. >> are you kidding me? >> tesla by the way isn't it one of the best performers up 25%. >> they're doing the model 3 now. everybody's short it. they used the nvidia chip. >> they use the nvidia chip. >> i'm not going to be here on monday. i'm going to be in san francisco, but that won't be me by the way. i'm hooking up with the nvidia people right now. you're going to see a superior of me with a lot of artificial intelligence. >> are you going to get outfitted? they can put a chip in your brain pretty soon to help your output. >> i'm seeing those people at ucsf. >> are you? >> yes, i am. they can put a processor -- if

they can put an nvidia processor in, i could do every show. every show. all shows. >> you'd have full capacity. full capacity. you already do. >> it's scary. >> intel, guys, bounces off the 200-day here this morning. back to 35. canaccord, jim, cut to a hold. >> yeah, look, intel's challenged because they have to compete in all these markets that are not so good. and nvidia's in the good markets and intel is a dominant company that makes a ton of money and they'll figure this out. they always do. but nvidia reminds me of when arm holdings snuck up around the far turn and came up ending up winning by a nose. nvidia is 60 billion as i said going to 100. you can't contain them. they have the chips that matter right now. they have the chips that amazon needs. the chips that everybody needs. >> nike once again up another percent. of course they led the dow yesterday. huge exposure to a would-be border adjustment.

>> that's belief that the border tax adjustment's not going to happen. >> well, the senators -- >> there was a big move to carl's point and a lot of those stocks in retail issues. >> nike might have been some of the border tax. >> i continue to come back to the idea that when you hear that and when the border tax adjustment seems as though it may be something that doesn't happen, don't you have to then put broader tax reform in a less likely position? >> yes. which is why i think -- that's why you say is the market ahead of itself. on earnings i can make a case for some stocks, but if it's going to be tax reform, be careful. i don't think the republicans are going to roll over on the idea of a bigger budget deficit given what you said about the size of the budget deficit. you can't just cut rates and think, wow, just by magic. >> especially if the democrats remain a block. that's a question. because if you were to throw in a big infrastructure plan, maybe you get some democratic votes in

the senate so you can make an argument that offsets the arkansas senators and some others and the deficit hawks who would -- i don't know, who knows where it ends up. but that's the point. >> i don't know. >> this internal report dhs that reuters got ahold of saying a wall would cost $21 billion. take three and a half years -- that's a lot of infrastructure. >> well, look, i mean, i just thought when you talk -- i love the way the president -- i don't want to get in trouble on this, but i'm going to kennedy tonight, the airport, that's one they've tried to fix. it is kind of a bummer to go to u.s. airports. it's always like they're under construction and it's never really right. >> here is the prime minister of japan laying a wreath at arlington national cemetery. listen to this for a second.

♪ ♪ ♪ ♪

♪ ♪ >> prime minister abe laying a wreath at arlington national cemetery before he goes to the white house around noontime. a news conference around 1:00. among the things expected to be discussed we talked about qe and trade imbalance, of course now they've inherited the second biggest trade deficit over

germany but behind china with the u.s. also toyota and sprint some of the corporate announcements that have been made. >> yeah, i think a chance for the president to say, listen, i would love to see where u.s. -- more plants based here, not in mexico. you're in town i have a place in mexico is just heavily, heavily japanese and german. heavily. and i think that's not -- if you went to mexico, and i love mexico, i think it's terrific. and you understand why. i've got a great workforce, peso's cheap, makes a lot of sense, but i think the president's going to make the case, hey, listen, it would be better if you build them here. >> let's not forget japan has its own set of financial issues, largest debt-to-gdp out there of anybody i believe. actually having to raise rates a little bit. there's always been questions about whether they get to that

keynesian, but the good news is all the debt is internal for the most part. just the jgbs are all bought by the pension fund unlike our debt which is still widely owned, though not as much. you see a lot of sellers of treasuries. >> someone's buying that debt. >> yeah. >> it's two sides of every story there, but i think it's going to be a bit more -- well, you don't know. the president tweeted something this morning addressing, again, the "new york times" which obviously he doesn't really care for. could you say that? would you go for that? he doesn't really care for the "new york times." >> another reminder of the old school print deadlines. i mean, story's old within a few hours. times did report he spoke to xi. >> yeah, i know, i think he talks about fake news. it is a difficult situation for us in the media to cover another paper that we grew up reading and look at the balance sheet of the paper and it's not failing. it's not. >> no, it's not failing.

that said print advertising was down 20%. by the way also down for newscorp. dow jones about the same. so we know that's happening for the old line newspapers. >> right. but at the same time, you know, i just -- i mean, i follow institutions that are failing. i just don't want to lump -- i'm stuck with it's not failing. >> sure. >> but that's real news. >> yes. >> president of the united states. >> morgan brennan's on the floor for us as we got record highs across the board. hey, morgan. >> hey, carl. happy friday. we have record highs for the dow, s&p, nasdaq, albeit on relatively average volume at least here at the stock exchange. now, keep in mind it's been a very tight range this week. we've got volatility really just nonexistent. vix below 11 this morning. that said, reflation trade is what is back in focus. that's after those tax comments from president trump yesterday, which pushed the s&p down,

nasdaq to record highs at the close. that's playing out again this morning. you can take a look. it's materials, energy, financials that are leading the charge. rate sensitive safe haven sectors, utilities, consumer staples, real estate, the reits, those are falling today. though traders do expect this to be somewhat short lived until we get some of more of these policy details. not a lot of data or earnings today, but we do have a flurry of political headlines in focus. trump's support of one-china policy, the blocked travel ban and of course the president's meeting with japanese prime minister abe today, as you guys just showed the beginning of that whole process going on ahead of that the dollar stronger against the yen, nikkei hit a five-week high overnight. here, fourth of julinancials on darling as treasury yields move higher. good news for banks, also insurers. taking a look at the dow up about 56 points right now. back to you. >> morgan, thank you very much. let's get to the bond pits as well. rick santelli on a friday at the cme. good morning, rick. >> good morning, carl. you know, it's been a very

strange week if you're trading any of the fixed income markets, sovereigns, trading spreads. lots of action between french, italian, spanish, portuguese paper against the bund. the bund has a relationship as the high quality sovereign of europe and how it trades on the u.s. side against the tens. all that seems to be slowing down a bit. so if you look at the week, it's been a flattening week. that's what you walk away with. on the week we have twos down only one, tens down five, 30s down six. but on the day we have twos up one, tens up two and 30s up three. so all of this seems to be reversing a bit. a two-day of tens you could clearly see we really came out of here to the upside back into the well worn range basically one basis point away from unchanged on the year. look at a two-day bunds. of course it isn't the same type of intensity, but it is moving back up in yield. but maybe the most important chart, let's look at a november

start to tens minus bunds. when it's really hunkering down not moving much you look to the overseas spreads to see what's going on. but when you look at it now, it's popped about four or five basis points. i would think that's another signal along with the curve being less flat, moving the other way not on the week but on the day is going to put yields back up. dollar index it seems to withheld the technical test of the under par or under 100 closes. look at a two-day chart, look at a one-week chart, dollar's up on the day and up on the week and very close to a 101 handle. carl, david, jim, back to you. >> all right, rick, we'll talk to you in a little bit. when we come back, snapchat in focus as it plans to go public. find out who's accusing facebook of stealing all their ideas and why. dow's up 61 led by nike once again up almost 8% in the past four sessions. we're back after a break.

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snapchat's in focus ahead of its ipo here at the big board. the fiancee of the founder and ceo, evan spieg l calling facebook out on its stories feature in an interview with the times london supermodel miranda said she was appalled. i cannot stand facebook. can they not be innovative? do they have to steal all of my partner's ideas? how do they sleep at night. instagram stories featured last year she kind of in the interview realizes this is still on the record and checks with her pr person, but yeah. >> look, facebook's stories is just kind of snapchat stories. that was the peak. and snapchat's got other things going for it, so you don't want to just throw it away if they do a little bit of stock and get the big pop. >> we'll see people looked at that s-1, jim, reading through it are a little concerned. given daily average users, you

know, the various metrics by which they are going to be measured even if they don't want to be, they'd like you to focus on engagement. >> right. you're right. >> we'll see 20, 25 bill, we'll see if they get there. >> today's a cyclical day. a border tax day, like a columbia sportswear and a skechers. >> yes. maybe that's part of stop trading. we'll have to wait until the other side of this break to find out. don't go away. a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

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call today. comcast business. built for business. time for cramer and stop trading. >> skechers is a company that had a weaker quarter and a lot of people dumped it. it had always been a good short name, they reported a very good quarter today and you'll see the stock goes higher confound the shorts. i want to point out they exceeded fourth quarter guidance. and more importantly their china business is very strong. this is a strong china story. they have more than 500 locations in china. by the way of 16 india, saudi arabia, domestic not that strong. but understand when you have a footwear or an apparel store that's good, not unlike columbia sportswear, good meaning it kind of exceeds, in the day after the border tax looks dead skechers is a huge importer, right? and, boom. >> skechers usa is a huge

importer? come on. >> well, they don't make -- well, yeah, you don't really make -- >> what are they using usa in the title for in the name? >> what can i say? >> jim, what's on mad tonight? >> oh, usa-based company, taser. taser is on tonight. i can't get taser because you're not allowed to have them in new jersey. i figured i'd eat some dog food, some sears dog food, right? have some twitter cat food and then get tasered. that would be a way to celebrate my birthday, right? not. >> david and i both want to wish you the happiest. >> thank you. and i'll see you guys coming from san francisco. i love it because then i start doing the show at 6:00 a.m. so i don't have to go to sleep at all. pure victory over sleep. pure victory. >> jim, we'll see you tonight and monday. jim cramer, "mad money," happy birthday, man. when we come back, evercore isi chairperson ed hyman. dow's up 59. ratings of top analystss tk into a single score,

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nine of the new york stock exchange. yield's up, dollar up, we're going to watch all of that. >> our roadmap for the hour begins with japanese prime minister shinzo abe meeting with president trump at the white house. we will break down what's at stake here. >> they're calling it a meltup again hitting new record highs after the president promises a, quote, phenomenal tax announcement. >> plus, president trump pledging his respect to the one china policy in a call with chinese president xi jinping. we'll head to beijing for an update on that. >> getting you michigan, let's get to rick santelli in chicago. rick. >> thank you, carl. remember that this is a february preliminary read. so this gets tossed for a final read in a couple of weeks, but the number is 95.7. 95.7. we were expecting a little higher number. but keep this in mind, if you look at the last big data point at 98.5, 98.5, our last full month look in january, that was a 13-year best going all the way

back to january of 2004. so this number even though it's less than expected and if it was a final number it would be the lowest read only since november last year, it's still a very lofty level. maybe what's more fascinating is look at the inflation expectations built into the marketplace by the respondents. if you look for one-year inflation a pop from 2.6 to 2.8, these are really getting to be lofty levels. and 2.5 actually is down from 2.6 on the five to ten-year inflation. i know that many say that inflation is slowly picking up. but the real issue is the fed's slowly picking up on the slowly picking up inflation, sara, back to you. >> that is a question, rick, thank you. let's get back to our top story japan's prime minister meeting with president trump in the oval office in just a few hours. the relationship here is front and center. abe just met with ceos the likes of cisco, boeing and others at the chamber of commerce.

he will likely bring some goodies to president trump like investments in high speed rail for instance in the u.s., japan's super fast bullet trains and other job creating projects. here's some facts about the relationship. japan is our fourth largest trading partner. it's our second biggest trade deficit, $68 billion just behind china, something that president trump has complained about. but the prime minister abe will make it clear that the economic bond runs deeper than trade. look at this. japan has invested more than $400 billion into the u.s. in business assets projects. only the uk has invested more. also number two when it comes to u.s. jobs. japanese firms employing 839,000 workers in the united states. and importantly here for president trump it's the top source among foreign countries of manufacturing jobs in this country. abe is also set to stress a lot of the automakers in particular have thousands of hirings in small rural towns, lincoln, alabama, russells point, ohio.

now, where it could go wrong, currencies. just last week president trump referenced japan saying they've played the devaluation market and we sit here like a bunch of dummies while japan maintains it does not manipulate its currency, it plays by the g20 rules, hasn't intervened since 20 11 and only gotten strong eveer over the last decades. could move markets -- for president trump japan is also a close and powerful security ally, especially if he wants to be more confrontational with china. that's why they head south after the joint news conference this afternoon at 1:00 p.m. where they will play some golf. we understand that president trump is an excellent golfer. shinzo abe, i think just decent. handicap's 20. >> wow. you do intensive research, sara. >> that one i really did have to research, that's according to reuters.

>> more importantly the conversation between the two leaders, interesting point about the manufacturing jobs in this country most of them i would assume at auto plants. >> some electronics as well factories here in the u.s. which is going to be key. the question is does president trump complain about the fact there are also some mexican factories. he's already called out toyota on a tweet saying if you want to sell to the u.s. market they have to be produced in u.s. factories. we'll see if abe brings any sort of announcements of more factories being built in this country. >> yeah. abe whose father as foreign minister once came to washington to meet with president reagan, believe it or not. >> yes. it's in the family. i think there was always a round of golf being played as well. very significant. >> all business done on the golf course. >> that's the thing. this is a personal bond they need to forge. it's going to be really important. security, economics aside, japan is a key ally. and prime minister abe made that clear in november when he came right after the election. he was the first foreign leader to come to trump tower. >> yeah. we'll see what happens at noon.

of course then again at 1:00. meanwhile, as you know the dow, nasdaq, s&p hit fresh record highs this morning. the president making comments on taxes yesterday saying a phenomenal announcement is coming soon. weighing in on the markets, future of tax reform, abe visit and a lot more as evercore isi chairman ed hyman joining us here. >> thank you, carl. >> this phenomenal announcement coming, why should the market be waiting for this? >> my take on trump is he wants to win every minute. he's very aggressive. whether he does win or not we'll see. but this phenomenal whatever is just part of that mosaic. and there's also the deregulation part that's coming and increase in animal spirits which shows a little bit in the consumer sentiment numbers. >> uh-huh. we got some people saying, look, russell hasn't exactly been outperforming. you got breadth, the 80 line

hasn't been on fire relative to all the fireworks on record highs, do those things need to confirm? or can this be done sort of quietly? >> well, as you mentioned at the beginning, it's a multifactored advance here. you have oil up. you have the stock market up. foreign economies are improving. earnings are up. so i think it's a pretty fundamentally based advance. and then trump adds the pro growth policies on top of it. and whenever you think it's going to stop like it seemed to be the case a couple days ago, suddenly he's right back in your face with another tweet. >> do you think it says something that all it took was a phenomenal tax plan is coming, no real details of the legislation, no real details of whether border tax adjustment would be included or not to get this market back into rally mode again and breaking into new highs. what does that say? >> sara, it would take too long to go over it, but my view is that investors are still offsides. and so whenever you get a hint that something's coming, the market responds to it quite a

bit. and also i think people have realized that when he says something's coming, there's a good chance something is coming. in particular you could get an announcement on a corporate tax cut that could be the first part before the other parts like a border tax or anything like that gets put in place. >> he's also hinted though at some tense trading relationships including with some of our closest partners like japan, as i just said. why doesn't the market -- why don't investors appear as worried about that? >> the view of investors, which i spent all my time with, is they're willing to give him the benefit of the doubt. and then when you saw as you've all reported the letter to president xi then the phone call and we'll make it one china, suddenly he says, oh, that's the trump make trade happen, not the trade war happen. >> you guys do a lot of work in washington. we saw just a moment ago still i think your firm's putting in 80% probability that we get tax reform. >> yes, we are. >> is that right? what would change that?

you know, you see no border -- or lack of a border tax adjustment, i think also though, and many would say well that is the key component to at least have it be budget neutral so you can do it under reconciliation. and if you don't have it, where are you going? >> you're going to go through with a bulldozer. i think they're going to come out with something that doesn't have the border tax initially. say we'll do that later, but let's get the corporate tax part dun first or whatever he wants to say that would look like a phenomenal move. but right now people have almost pulled back to nothing's going to happen, phrase you guys use is it's gummed up. but i think that they'll be some action on the taxes. probably won't be everything people want. and you're right on the reconciliation and what has to happen to get it to not be revenue neutral. but i think there will be some pretty aggressive adjustments to the growth rate to get it to work. >> so regardless of what we end up with, your firm's feeling at

this point is that it will be enough to justify where investors have taken this market? >> so, again, david, i think there's more than one thing at work here. say for example earnings are coming in better and better and better. and the global economy's picking up. and central banks are pushing like crazy before you get to trump. so when you get something on trump, it sort of just adds to what is already out there. >> what's the more powerful dynamic, the argument that the fed is going -- that the refs are going to let the kids play, right? keep rates low and that lets the economy chug along. or they're going to hike and financials are going to lead everything? >> so this is a perfectly transparent situation where right now it doesn't look like a march tightening is justified. so they're not tightening in march. if you get a strong jobs number or a wage number that shows up, then odds will start to go up and they will tighten. so i think the fed is going to follow the events as they have

been. and so when they get the tightening, people say, oh, well that's okay because the economy justifies that. >> can they stay out of the political fire as they have been? and what would that do to markets if they get caught up? >> i think to get caught up they would have to get ahead of the economy. and they don't look like they're going to do that. so i think they'll always be, you know, behind inflation numbers or wage numbers or employment numbers or the perception of the economy. and so they'll tighten. you know, once it looks a little hot and so the markets will be okay with it is my take on it. >> ed, there is a continued fear of protectionism and of the potential of trade wars. i mean abe today visits a crucial one sara's outlined for us, do you see that as a possibility? >> it's definitely a possibility. probably have a multiple point or some significant weight on the stock market because of it. my view is that, you know, trump wants what he would think of as

more fair trade as opposed to a trade war. he wants to re-write nafta because it's out of date. >> i guess the question is how realistic is that? >> yeah. >> i think doing that is pretty realistic. >> but what about china a key point what he may view as fair others view as not working. >> as in your face, but it looks to me as though they're doing a pretty good job of advancing but doing it in a fairly diplomatic way as the letter to president xi showed and the phone call today. you might have seen that henry kissinger went over to china, i think representing trump and met with president xi about eight weeks ago. and as the governor of iowa is the ambassador, i think it's the first ambassador named. >> yep. >> so i think he's tough, but he knows that china is not a pinata. he can beat up mexico. >> despite the presence of people like navarro who have

written many books saying exactly the opposite? >> my view is he'll take those into account, but in the end he's a practical business guy. >> and so is rex tillerson, his secretary of state. i would say. >> do you talk to investors who say, look, i don't like the way he shames individual companies, i think this nordstrom's thing is totally inappropriate but i'm going to continue to buy stocks. are people sort of holding their nose? >> i think their holding their nose. so it's a very charged topic. and frankly i don't discuss it very much because people are so polarized. but in the meantime policies keep coming out that seem to be pro business. and business guys are announcing job -- you know, making jobs here like amazon or intel just announced jobs here. and abe, you know, saying we'll put jobs here. so people are willing to go on because there's also other factors at work, like earnings going up and the world economy improving. >> so, i mean, clearly there's winners and losers, but this

whole idea that america's going to become more competitive, american industry. so far in the market's judgment financials are the biggest winners. do you agree with that? >> that's been our favorite sector. and that's because, you know, rates have been up until just recently. but the feelings that rates are up. and the deregulation part, you know, is a big win for those guys. and so we still think that's a favorite sector. we like the industrials as well because of the global economy picking up. >> the two winners. >> ed, please come back soon. >> carl, thanks for having me. >> we need your insight. ed hyman of evercore. >> thanks. nice seeing you. >> before we go to break look at sears holdings up strongly this morning after announcing a restructuring they say will streamline operations. sears says it's targeting at least $1 billion worth of cost savings on an annualized basis. when we come back, president trump holding his first call with chinese president xi jinping since entering the white house. we're going to have the details

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did you know slow internet can actually hold your business back? say goodbye to slow downloads, slow backups, slow everything. comcast business offers blazing fast and reliable internet that's over 6 times faster than slow internet from the phone company. say hello to internet speeds up to 250 mbps. and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. president trump holding his first phone call with chinese president xi jinping pledging the u.s. will honor the one china policy. our eunice yoon has the call from beijing. >> reporter: the call marks reversal from president trump's approach toward china. white house described the call add cordial and lengthy. in the phone conversation which took place on thursday evening,

president trump told china's president xi jinping that the u.s. government would continue to honor the one china policy acknowledging that beijing, not taipei, is a seat of the chinese government. china welcomed the decision. in a regular press briefing the foreign ministry said the one china policy is the political foundation of the china-u.s. relationship. china is willing to work with the u.s. to promote a broader development of bilateral relations at a new starting point. now, this would be a new starting point for president trump who in previous statements has been calling into question america's commitment to the one china policy going as far as to suggest that the one china policy be used in negotiations on other matters such as trade. the chinese though have made it clear that the one china policy is a nonnegotiable and a nonstarter when it comes to discussions. analysts tell me they are now cautiously optimistic that now that this hurdle has been overcome the relationship can

move forward. eunice yoon, cnbc business news, beijing. softer tone. our eunice yoon from beijing. when we come back on the show, a huge week for media earnings. pulitzer prize winning "new york times" columnist jim stewart is with us. and taking a look at stocks at this hour. rally mode again building on the triple record. dow up 52 points. it's in the lead of the three. "squawk on the street" will be right back. the security just like the marines did. at one point, i did change to a different company with car insurance, and i was not happy with the customer service. we have switched back over and we feel like we're back home now. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children, and that they can be protected. we're the williams family, and we're usaa members for life. call usaa today to talk about your insurance needs.

newscorp capping off big week of earnings for media companies. that company did have weaker ad sales down 20%. meanwhile, viacom yesterday announced that big plan to turn around the company. i did sit down exclusively with ceo bob bakish and asked him about the new strategy. >> 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 -- i've talked to on 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. 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. >> yep, and they're going to stick with it and try and actually turn paramount around in a significant way. joining us here post nine pulitzer prize winning "new york times" columnist jim stewart also the author of "disney war." we actually heard from disney this week, jim. >> yeah. >> let me start there because you know the company's history well. iger may stay even longer. the whole idea of finding an heir apparent for him, tom stags exiting about a year ago was thought to be the guy to replace iger. now there's a lot of talk and he didn't dismiss it on the conference call that perhaps he will reup yet again past what would be call it end of june '18. >> you say he may stay longer. let's say he will stay longer. he said he was open to a contract renewal.

that is tant dlamount to sayingm staying. for a couple of years, he's a young 65ish or so, he's firing on all cylinders. disney's doing great. but there's a long history of succession issues there. and at some point he's going to have to step down. and they need someone strong to take over. and i think that's going to be an ongoing concern. near-term fine. but at some point, look, disney is going to need some creative rethinking given that all of -- they're doing so well in all their lines of business, but where do you get any growth out of those? how do you stop the decline in cable? this is going to take a lot of fresh thinking. i think probably some new eyes in there. >> speaking of declines, started by the introduction of you by talking about newscorp's earnings and "new york times" anything with print advertising, digital growing quickly but print still the bulk in many cases of their revenue streams and it's coming down dramatically for many of these old line media companies. >> it's true.

you see in viacom too these companies are all struggling to manage decline, and at some point you want to see that plateau and start to move the other direction. i mean certainly as somebody who works in this field i'm just dying to see those digital revenues make up for the loss in print. it's a struggle. my own view is quality content people are going to pay for it on whatever platform delivery. we'll still in this shaking out between quality sites and all the other junk that's out there on the internet. i thought there was a fantastic story in the times where a guy was blatantly generating fake news was making thousands of dollars off of ads placed on google purely because people clicked on it. that stuff is going to shake out and eventually i think quality media will make money. >> what have you been finding on the murdoch relationship with the trump administration? there have been a few stories out lately about the fact he is close to this white house. >> yeah, he was sitting in on meetings. it was kind of a shock to me i didn't realize ivanka trump was a trustee for his daughter's

trust. i mean, this is a really close relationship. and when you have a situation here where you have a major med med med media mogul like murdoch. number one he's clearly against the at&t-time warner merge cher will be up to the trump justice department. >> not forget fox of course tried to acquire time warner some time back and that's not something perhaps they'd want to revisit if they could make sure time warner stayed independent. >> right. these companies have huge regulatory issues at the same time they are covering the administration. and while you would hope there would always be a strict separation between church and state, there's beginning to be some rumblings, interesting story i think in politico yesterday there was a mini revolt going on at "the wall street journal" that is questioning their pressuring feeling to adopt a pro trump line. where is that coming from? is that related to their desire to get favorable treatment from the trump administration? which then raises really broader questions about whether every

media company is going to feel pressure from the white house to give them favorable coverage in return for the regulatory decisions they want. very troubling situation to keep an eye on. >> isn't that different though from what we see in other countries? countries where murdoch has media property. >> well, you know, look, i don't want to go there. somebody wrote like this is the first african, you know, like banana republic kind of administration we've had. let's don't even compare the united states to that. i think the relevant comparison is how does it compare to the standards and the high standards the united states has traditionally set in separating the press and honoring the first amendment from, you know, business pressures. and i think this is something we're all going to have to keep a close watch on. >> the ceo of at&t was a guest on "squawk box" earlier today, of course i think said he did not discuss the time warner deal in that meeting he had with the president-elect, i believe it was still at trump tower some time back. but it has sent a chill in general as you've described it.

if that deal gets held up because many people believe there's no reason for it to, it's vertical integration, it will come back to this idea that cnn was at the heart of it because president didn't like his coverage. >> absolutely. i think there's a lot of concern about that. and if they do decide that they're going to delay or block this, they better have some very good reasons because if not everyone's going to assume it is a result of this kind of outside the rule of law pressure being applied. very troubling, i think. >> although stephenson did say we still think we're going to be closed by the end of the year. >> this morning on squawk. >> he did. and we will see. jim, that's a subject i bet we're going to be revisiting during the course of this year. >> i expect, yes. >> thank you, jim stewart. >> when we come back, the prime minister of japan shinzo abe heading to the white house meeting with president trump. we're going to talk to a former u.s. ambassador to japan about that meeting and what we might expect this afternoon. dow's in a pretty steady range, new record highs across the board. back in just a moment.

good morning everybody. i'm sue herera. here is your cnbc news update at this hour. by a 52-47 margin georgia republican representative tom price was confirmed as secretary of health and human services. the vote took place in the early morning hours as part of the democrats strategy of delaying each of the president's nominees they oppose. utah republican representative jason chaffetz held an electronic town hall which was filled with angry chants thrown his way. so many protesters showed up the venue was moved to accommodate more people. most of the questions focused on how he was going to hold the trump administration accountable as head of the oversight and government reform committee. a nationwide celebration is underway in iran to commemorate the 38th anniversary of the 1979 islamic revolution. thousands of people marching in tehran. some carrying iranian flags while others were chanting against the u.s. and israel. and officials in paris say they want to replace the metal

security fencing around the eiffel tower with a more appealing glass wall. the proposal is part of a $3 million project announced in january to modernize the 128-year-old tower. that's the news update this hour. sara, down to you. happy friday. >> happy friday indeed, sue, have a great weekend. >> you too. >> president trump and japan's prime minister shinzo abe meeting at the white house today just a few hours from now. our eamon javers is outside the white house with some of the details. so what's the schedule here, eamon? >> good morning, sara. we're expecting this meeting to take place at noon. in fact, we just saw the color guard marching in with the american and japanese flags side by side here a minute or two ago. the prime minister of japan was over at the chamber of commerce this morning. the big question here is whether or not he's got any economic trade announcements to make, any specific deliverables ahead of this meeting. we haven't seen that yet. i just talked to some officials here at the white house and they are not saying whether there's going to be any major announcements here today. but the prime minister did talk

a little bit about the auto industry, the back and forth between the united states. here's what he said at the chamber. >> translator: on the economic front, growth seems to be picking up with the u.s. leading the way. against such backdrop it will be exceedingly kindly for i and president trump to compare notes on future global outlook and discussing debt, what rules we can mutually play in how to work more closely in cooperation. >> reporter: and the point that the prime minister made at the chamber was that the united states and japan were locked in sort of a zero sum game in terms of automotive competition back in the 1980s and '90s but found a way to have a win-win for everybody. he seems to be emphasizing that point here in terms of trade now in the 21st century, guys. >> all right, looks like there's some action behind you, eamon, i'll let you get back to it. >> reporter: that's right. >> eamon javers at the white house. joining us for more insight into the importance of today's meeting for the economy, the markets and of course politics,

the former u.s. ambassador to japan, tom schieffer who served in the post during the george w. bush administration. great to see you, mr. ambassador. thanks for joining us. >> thank you, sara. my pleasure. >> and also businessman. so the perfect person to talk us through this. what do you think president trump's goals are for these talks over the next day or two? >> well, i hope it's to get the alliance back kind of on the straight and narrow. the rhetoric of the campaign was such that it gave the japanese a great anxiety. and so i think the japanese are trying to respond. they're bringing the a-team to washington, not only is the prime minister coming but the minister -- the deputy prime minister as well as the finance minister, mr. aso, and foreign minister mr. kishida. i think they're going to try to engage the american government across the board. i think that's a very positive thing, frankly. so this summit, i think, has a

lot of promise. and i think both the president and the prime minister are anxious to allay people's fears and talk about how close the u.s.-japan relationship needs to be. >> one uncertainty factor that i mentioned earlier is trade. trade and currency, i would say, are the two biggies. tpp which was the transpacific trade partnership, japan was the first country and only country to ratify it. the u.s. was the first country to withdraw from it under president trump. where does that conversation go? >> i think you have to recognize that prime minister abe used a lot of political capital in japan to get japanese support for the tpp. so he feels like that he's got a large investment in the trade situation. and of course the president campaigned against it throughout the year. so i think what they may well talk about is some sort of

bilateral relationship that can save parts of the deal. the best parts of the deal. and be to the advantage of both countries. so that will be interesting to watch. on the currency, hopefully there won't be a lot of talk about the currency. i think currency is generally a better subject for treasury secretaries and finance ministers to talk about. >> yes. >> but if the subject comes up, it will be certainly watched all around the world as to what they say. >> yeah, movement could move the markets although would be unproductive i think from japan's perspective. can you just add the china element into this conversation as well? so the abe visit comes just after last night president trump called president xi. we got a softer tone, especially on the one china policy. what's the significance? we're talking about the three biggest economies in the world with obviously so many security implications. >> that's right. and the u.s.-japan alliance is the foundation of our foreign policy in northeast asia.

and when we have the u.s. and japan have worked together both have found it much easier to deal with china. and i think the call last night was very significant because the president called mr. xi and told him that the one china policy was still going to be the trump administration policy too. that's very important. and i think that the fact he was meeting with mr. abe today certainly had something to do with the timing. so i think that's all good. and hopefully what we're seeing here is the beginning of getting the u.s.-japan alliance and u.s. foreign policy aligned with dealing with china. and i think this is all coincidence -- i mean is all tied together. and i think it's a very significant and positive move. >> mr. ambassador, the times reported that they hadn't spoken, xi and the president, since mid november and some administration officials believed that they would not

speak until president trump walked back on one china. somebody wrote this morning, the president got the silent treatment and it worked. do you believe that? >> well, i wouldn't want to get into what the chinese do or don't do. but with regard to their foreign policy. but i think it was important for the president to recognize that the one china policy has been the foundation of our relationship. and it's just a place i don't think you want to go if you're going to have good relations in northeast asia. so i think it was very good that the president called. i'm delighted to hear that. i think it is also lays the predicate for a successful summit with the japanese. >> yeah. and on this summit, you know, some are wondering can you really be america first, which is clearly president trump's policies. i get trying to make american industry more competitive, but can you really do america first policies without jeopardizing some key relationships of some

of your closest allies like japan? >> well, when you say america first, it really causes anxiety among your allies. and i don't think any president has tried to diminish america with the idea that you have alliances and that you cooperate with your allies. and so hopefully what we're seeing here is a more conventional approach to japan and china than we've seen in recent days. >> tom schieffer, mr. ambassador, thank you so much for joining us today. >> thank you, sara. >> on this historic visit by prime minister abe to washington. carl. >> when we come back, taxes in the age of trump. we'll talk to congressman peter roskam with rick in just a few moments. take a look at shares of mead johnson, by the way, baby formula maker gets acquired by a british consumer goods company. that's going to be the biggest u.s. m&a deal of the year. dow session highs 80 points. back in just a moment. ♪

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everybody's hot on etfs these days, but what if you're not really getting what you're paying for? one researcher shares his troubling findings on tradingnation.cnbc.com. more "squawk on the street" coming up.

savor it because there aren't too many are the santelli exchanges this week. >> thanks, david. real good one too. sixth district of illinois, my area of the country, representative -- republican representative peter roskam, congressman, thanks for taking the time. >> great to be with you, rick. thanks for having me on. >> what a wildtime we've had, i'm not only talking about the cubs winning the world series. the markets have had big moves since november 8th. your thoughts on president trump and how the markets have played out since the election.

>> all right. so you know my constituency well, it's the west and northwest suburbs of chicago, a lot of manufacturers, a lot of financial services, and they're looking over the landscape saying, hey, we've got an administration that's not coming after us anymore. we've got an administration that's not going to be burying us with regulation. we've got an administration that is going to give us the benefit of the doubt. and from a business point of view i think that's explaining part of the buoyancy and part of the excitement. so there's a lot of work that needs to be done, but in terms of anticipation and the feeling that washington is not got a target on the back of business, i think that explains a great deal of the momentum. >> i think that explains a lot. so basically when you talk to some of these constituents, the first thing they say is, oh, we're hoping that we have a lot to ticket here for the government to do good things. it's much more than that in your opinion? >> it's much more than that. it's get off my back. if you're going to have a regulation, make sure the regulation is rational and reasonable, probably it's unnecessary first of all. but if it is necessary -- >> but see, when you give things name of consumer financial

protection board, how can that possibly be not good? that's like having the law say you must be good and somebody wants to repeal it and the media says, oh, my god, it's the law, everybody must be good. but these great names don't really describe what's underneath, do they? >> no, they don't. i'll give you an example, i was out with a not for profit constituency, the department of labor rule -- >> that was a big one. >> a $13 million budget. they said, peter, this is going to cost us half a million dollars a year. think about that $13 million annually, a half a million bucks, it had an impact negatively on the exact clients and kids with disabilities that they were hoping to help. and it creates this level of absurdity. so now you've got an administration that comes in and says we're not going to do that to you. that's where some of the freshness comes. that's where the opportunity comes. and that's where people say, all right, i know with a level of certainty that these guys are not going to come and be yanking my chain anymore. >> okay. i've heard your speaker. speaker of the house ryan say several occasions that, listen,

we can't have this log jam of legislation. we're going to have to deal with one thing at a time. i know in my circles there's some debate on that. do you have any thoughts about that statement and how deep it is? >> well, you can only vote on one thing at a time physically. >> well, i get that. >> but i think what is actually happening is the amount of work that's going on in tax reform right now is very exciting. chairman brady of the ways and means committee is driving a process and moving to create a tax code that's competitive and growth oriented and simpler. and that's happening. at the same time you've got house committees that are dealing with repealing obamacare, coming up with a better alternative. you've got house committees that are moving through dealing with regulatory reform. you've got house committees that are dealing with infrastructure. so what we want to make sure is that we avoid the lesson of the aca, which was what? it gets written in the speaker's office -- >> yeah, but it's so much easier to pass it. let everybody else write it and then send the speaker of the house who is pelosi say if you want to know what's in it, you

have to pass it. >> and it's a disaster. >> i can't believe being dubbed the new party of no how can they expect that you're going to have all this legislation and it's not going to take some time to do? i'm sure everybody asks the same question. when is it going to happen? is it done yet? >> and here's the point. with some of these people it doesn't matter what you would propose, it's not good enough. it's too hot, it's too cold, it's too fast, too slow, too heavy, too light, whatever. here's what we got to do. we need to work steadily, clearly, build consensus, put together a good agenda that makes sense. that takes time. but it doesn't give an excuse for dotling. so there's an urgency here. the urgency in the house of representatives is to move these pieces of legislation with dispatch. there's one thing liberals do we learn from, they use power when they get it. for us to dither and over contemplate is a fool's errand. but for us to jam the process is a fool's errand as well. we need to move clearly.

>> like discovery in court, right? if you get pressed on a date or time table and you give it, boy, you're going to be held to it. my final question, ninth district of course the ruling was out yesterday. any thoughts. >> well, it's a district that just doesn't disappoint, right? it's very predictable. and of course that's the district out of which you're going to find the harshest criticism. that said i think the trump administration could have been more nimble in their drafting and so forth and laying out the refugee program. but when it all comes down to it, i think there's an urgency here that needs to be dealt with. look, the country elected donald trump to flip the game board. and he's flipping the game board. >> you know what, i think you're wrong on that. if this is like football, we have a team that's running away with the ball in my opinion. congressman, absolute pleasure. thanks for taking the time. >> thank you, rick. >> david faber, back to you. >> all right, thank you very much, mr. santelli. now let's send it to jon fortt get a look at what's coming up on "squawk alley." >> hey, david. we've got representative ted deutsche of the house committee on ethics, lots of questions

about conflicts of interest in the government right now. we'll dig in on that. also of course talk about japan trade with the prime minister there here in the u.s. to meet with president trump. and we're going to talk broadband through satellites with the founder of one web joining us. all that and more coming up on "squawk alley." only at&t offers you all your live channels and dvr on your devices, data-free. it's entertainment. your way.

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some news this morning from goldman sachs. abby joseph cohen, president of the global market institute there has decided to retire after 26 years at the firm. of course, she previously was chief u.s. investment strategist, probably one of the best-known investment strategists of her time. her career is the subject of a harvard business school case study. standard bearer for the firm on our air going back, david, 20 years? >> yeah, into the mid-'90s. >> and she's been bullish. she was bullish for a long time. >> she always managed to be bullish somehow. she parsed a lot of phrases and used a lot of different words, even when she might not have been quite as bullish, but she certainly did become for some time was the most high-profile strategist on wall street and was rightly bullish along the way. >> all right. goldman says, by the way, she

will continue as an advisory director and help with the firm as a senior investment strategist. >> we wish her well. japan's prime minister shinzo abe meeting president trump at the white house. one topic on the table, japan's auto industry and how it fits into president trump's vision for fair trade. our phil lebeau has been looking into this angle and has some details and more. phil? >> sara, remember, just a few weeks ago, president trump tweeted about toyota's plans to build a plant in mexico, which they are actually building right now, and then export from mexico into the u.s. toyota corollas. well, it has a lot of people saying, how much of this is going to be a top yinkt conversation today? japanese brand auto plants here in the u.s. are pretty much near capacity, like the rest of the industry. we should note that toyota is adding capacity and jobs at its indiana plant. and in terms of the industry, how many of the vehicles built in the u.s. are sold in the u.s.? look at these numbers. honda, 68% of what they sell here they build here.

nissan, toyota, subaru. mazda, they don't do any of that here in this country, and that's why a lot of people are saying at some point they wouldn't be surprised if mazda adds some production here. as for the u.s. auto industry, it has long complained that the weak japanese yen gives an advantage to the japanese automakers, particularly in the showroom when it comes to pricing of vehicles, adding incentives, or changing the pricing so it makes it much more competitive for them. japanese brands have about 38% of the u.s. market share in terms of new vehicle sales. take a look at toyota versus general motors over the last year. really not an interesting chart. i think a lot of people would assume that toyota would outperform gm, but if you look at this chart, it's clear. gm shares haven't done a whole lot since their ipo in the last year. they have done better than toyota. guys, it will be interesting to see how much of this conversation between shinzo abe and president trump actually revolves around manufacturing for japanese automakers here in the united states. >> well, no doubt, phil, it will

come up. i've been looking into some of the economic and business ties between the two countries, trying to impress favor with all my charts today. and here's one that prime minister abe could show president trump. it's a cars.com all american-made index. and it looks like some individual models of japanese cars -- there's the camry, the honda accord, the toyota sienna, and it shows how many thousands of u.s. workers go into the production of those individual cars. and what strikes me is that it's more than just made in america, made in mexico. there are so many different processes. it's so complicated. and some of these japanese automakers do employ a lot of american workers. >> yes, they do. yes, they do. and they have a number of plants here in this country. they have added them over the last 20 to 25 years. the flip-side argument that you will hear probably from the trump administration is that's wonderful, but you're also, when you look at imports into the united states, 9% of the vehicles coming in are from

japan. why not build more here in the u.s.? that would be the argument from the trump administration. >> so, what's the compromise here? more factories from japanese automakers? i mean, can they come up with some sort of bilateral currency deal and bilateral trade deal? what do you hear could be a solution? >> i have not heard any solutions offered. so, that's why i think people are interested. the japanese automakers are saying we're already invested in the u.s. and we'll invest more. is that enough to appease, so to speak, the trump administration? >> we will see. it will be interesting. phil lebeau, thank you. much more ahead on "squawk on the street." we're looking at a nice market rally here. the dow's up 75 points, led by caterpillar and nike. home depot also notching an all-time high. triple rally, triple record. we'll be right back. what are you doing? getting your quarter back. fountains don't earn interest, david. you know i work at ally. i was being romantic. you know what i find romantic? a robust annual percentage yield

that's what i find romantic. this is literally throwing your money away. i think it's over there. that way? yeah, a little further up. what year was that quarter? what year is that one? '98 that's the one. you got it! nothing stops us from doing right by our customers. ally. do it right. let's get out of that water.

welcome back to "squawk on the street." i'm dominic chu. shares of twilio are in focus today, actually fluctuating at this point in early trading. the cloud computing platform company says about 31 million additional shares are eligible for sale in today's trading. this is back in an october filing when twilio noted that the lock-up expiration for about 36 million shares was scheduled

for january 19th, but 31 million shares held by insiders have been subject to company blackout rules until today. so that's the trade there. shares are up about 15% just year-to-date. now back to carl and the gang for the start of "squawk alley." carl, back over to you. >> all right, dom, thank you very much. good morning. it is 8:00 a.m. at expedia headquarters in bellevue, washington, 11:00 a.m. on wall street, and "squawk alley" is live. good morning. welcome to "squawk alley." no tape this morning, but jon fortt, sara eisen and myself here at post 9. market, as sara just said, record highs across the board. dow up 75, awfully close to session highs. we're about an hour away from the president's first face-to-face meeting with japan prime minister shinzo abe at the white house, as the administration deals with the fallout from last night's appeals court decision over that immigration order. a new phone call between the president and the president of china. our eamon javers covering all of this outside the white house today. hey, eamon. >> reporter: good morning, carl. they are ready to go here at the white house.