president obama that was overanalyzed at that time, even though they did disagree on certain policy platforms, like the keystone pipeline, which is a policy that actually prime minister trudeau and trump now have in common. >> kayla, we'll come back to you in a little bit as we watch a lot of the pageantry around this meeting beginning right now. good morning. it is 11:00 a.m. in ottawa, canada, it's 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ good monday morning. welcome to "squawk alley."

jon fortt, sara ooist eisen and me at post 9. joining us, recode's executive editor kara swisher. kara, always good to talk to you. the dow is up and up across the board and the president meeting with canadian prime minister justin trudeau. it's not just that meeting. the president and trudeau will discuss launching a joint task force aimed at helping women in the workforce, talking about executives from general electric, accenture, gm, and a lot more. we know what an issue that has been over the past couple of years, kara, especially for the tech community out west. what do you think this brings? >> well, we'll see. i mean, he's obviously interested in creating jobs and he's got to meet with various executives, and we'll see where these meetings go. i think the real issue is where do the jobs get created and how? so, i think good terms with the business community is an important part of the job, i suppose. >> i'm wondering, kara -- and we want to keep talking about this

meeting, of course -- but this story that came to light over the weekend about the nasa engineer born in the u.s. but of indian heritage whose phone was basically taken by customs. he was forced to hand over his p.i.n. number. i imagine that could have been an apple engineer traveling -- >> right. >> -- who was working on the ios code. do companies now have to develop policy around what they do with corporate secrets when they're concerned about what might happen if the federal government demands access to their devices? >> yeah, the question is can the federal government take access to their devices? i mean, that's an unusual situation, but fact of the matter is, this is something apple, for example, has fought a lot in the last administration. and i think companies are going to have to start to develop different methodologies around protection of their data. you know, we're about to do one of our podcasts on this, what you can do to protect your data, how to do secure messaging, how

to keep your phone encrypted, what your rights are and things like that, and i think it's going to be a more -- it's a bigger issue for corporations going forward. this is an administration that's super aggressive on a lot of these things, and it's uncharted territory because no one's ever tried it in this kind of blatant way. so it will be an interesting issue as people move forward and companies have to develop strategies around how to protect their employees and how to protect their data at the same time. >> and strategies around immigration, which sort of looms large over this meeting between prime minister trudeau and president trump. there were reports initially after trump's immigration order that canadian tech companies were actually encouraging trudeau to try to recruit workers from other countries from the u.s. instead to go to canada, not that canada is necessarily the biggest threat for u.s. technology companies, but it does make you wonder, kara, about the u.s.'s competitiveness on a global basis. >> right. >> based on some of the policies we're seeing. >> yeah, i couldn't agree more.

i think the way we've built this up here in this country's an astonishing thing, but it could go just as quickly. and if there are other countries more amenable to immigration, amenable to innovation, amenable to what it takes to create innovation, which is, you know, open borders of talented people being able to create things, you know, we could shift there. canada's a great place. there's actually a lot of tech in canada, not like the u.s., but at the same time, things could shift very quickly if those workers don't feel safe. and i think a lot of the workers are -- i've heard a lot of stories of employees who are thinking twice about coming to the united states, and we don't want that to happen for one second. you want the best and the brightest to come to the u.s., work on research, work on new stuff, work on start-ups and get funded here. it's nothing but to the credit of the united states what we've built. and these policies just are not in line with kind of amazing things that tech has done over the past few decades. >> i mean, i really think the real question between these leaders is who's got a better twitter game, trudeau or

president trump? it is something they share in common. they're pretty savvy at social media. >> mm-hmm, yeah, they are. i mean, trudeau doesn't flap back. he doesn't use it as a bully pulpit. he's quite charming. it sort of reflects his personality, i think. i think he enjoys social media, he's very popular. he's obviously very facile. and so, i think the one thing is, going forward, every leader is going to have to have some facility with social media and be comfortable in that environment and using it as a communications tool going forward because the traditional ways of getting information out have changed so drastically that any leader has to be good at this stuff. >> there's a poll out in "fortune," kara. i know you've seen it. >> yeah, i've seen it. >> on the five tech leaders who could possibly run and win in 2020. that fourth name on the list there, interesting. >> yeah, yeah. >> i wonder how that candidate would use twitter. >> well, i use it really well and i try to stuff the ballot box. i'm trying to use it as much as

i can. people from canada have been voting for me, which is important. and i can't believe cuban is losing to me. that's the one thing. the rest, easy, but cuban was the candidate i was most fearful of, and the fact that he's so low at 17%, it's a little depressing for him, but we'll see if he can make it back. >> kara, you weren't kidding about running for mayor of san francisco, were you? >> no. no, i haven't been, and look how good i do already. no, i think it's just -- that's just a silly poll. it was just talking about the possibility of some candidates from business. and i think you are going to see more business candidates come into the fray. i mean, howard schultz at starbucks really interests me. i think he's going to get more active. i don't know about mark. i know mark was going back and forth with trump this weekend because trump tweeted something idiotic about him. but i think mark might be considering it. i don't know, but there will be other business candidates, i think, all over the country, sort of reassessing their chances and wanting to get into it.

>> we'll see. >> yeah. >> that dam is not broken by a long shot. i mean, they've talked or hinted about it but we have not seen one break that mold. >> no. i don't think you'll see sheryl sandberg, though. i know everybody talks about her, but i don't see her running. if she were going to run, she'd run for governor of california in the next cycle and i don't see that happening at all. >> one moment last night, taking a bit of a left turn, big culture moment at the grammys, as artists like beyonce and katy perry made some political statements of their own. we've seen this at other awards shows in recent months. meryl streep, of course, with the recent speech at a human rights awards show. how does this all get filtered in, kara? and for those who are critical of the president, does this all help or? >> you know, i just think it's been typical of hollywood and entertainers to do this for a long history. and you'll have the people who are for trump say it's a bunch of elites, we don't need them,

what are they saying these things, and people who like them that say go, girl, you know what i mean, that kind of thing, when they're making these statements. they're perfectly -- you know, one of the things that gets lost, i know people say they're celebrities, they shouldn't say anything. they're citizens of the united states, or most of them are, who are doing -- or anybody should be able to say what they want. and they have huge audiences. and if they feel like doing this, they should be able to do this. and you know, the president does it, and he's got his point of view and they've got theirs. so i don't think there's anything wrong with it and i don't get offended one way or the other. and i think you're going to see this more and more. you know, i'm a huge fan of meryl streep and i think she's so articulate about the issues that are before us, and i think it's fine that she wants to make commentary as a citizen of the united states and good for her to do it. >> a lot of those songs downloaded on apple music, and there is a lot going on with apple today. the stock's within a buck of an all-time high. we've got upgrades over at ubs. goldman takes their numbers up because they think the eight will have some augmented reality. tim cook's speaking out on fake news in this interview with "the

daily telegraph," saying "we are going through this period of time right here where unfortunately some of the people that are winning are the people that spend their time to get the most clicks, not tell the most truth. it's killing people's minds in a way." kara, your thoughts on that and your degree of confidence that we find any solutions for that problem? >> of course we're going to find solutions to the problem. it's just a matter of commitment on behalf of tech companies. tim -- i was glad tim said this and so explicitly. everybody else dances around it and acts as if mistakes were made here or we don't know what to do about it. it's like any technological problem when you have humans involved, you have to figure out ways to do filters, way to monitor these things. i mean, it's all to the negative of companies that have this stuff all over their systems because it only makes the experience bad from a business point of view. it ruins -- as i've said many times before, when facebook is plagued by this, it becomes, you know, a very nice suburb with broken glass on the ground. >> kara? >> tim's got a better ability to control it on apple news, but

it's an important issue and i'm glad he talked about it. >> yeah, but why isn't apple better at this? i mean, we saw "newsstand." we know they've got a revamped news product, which i should mention nbcuniversal is in the business of selling some advertising for. but apple has not been great at news products actually becoming really popular like its devices, similar to its struggles with services overall up to this point. >> yeah. well, they're not in the news business, right? that's not their business, and it hasn't been their business. now, we will see if they get into content. but their business is selling devices. so why would they be good at it necessarily? so, we'll see going forward what they're going to do. we'll be interviewing eddy cue tonight at our conference tonight and these are the topics we'll bring up with him, where is apple going in the content space. so, i don't know, i just, i don't imagine that they would be good at it, but if they want to be, they have to make a commitment to it, and we'll see if they do. >> is facebook good at it? i saw a story this morning on recode saying that one in ten

people according to a new pew research poll view facebook as a news source, whether it wants to be or not. >> yeah. i think they're a media company. i argue with our executives all the time. they're growing weary of me arguing this with them, but i feel like they are. i don't think they're get at it. i think they're good at being a distribution platform. now the question is will they take the responsibility that comes with distributing media, just the way here nbc does, just the way recode does? and we'll see if they do in the future and they acknowledge the role that they have in this media ecosystem, which is enormous, and take the responsibility of monitoring it and keeping it, you know, keeping it the way that it should be, which is lots of free flow of ideas, of ideas that aren't made up, that aren't fake news. and i couldn't agree with tim cook more about killing people's minds. this stuff is toxic, if it gets out of hand. >> kara, you'll keep cramer company out there as he has a week out at one market? >> yes. i'm going to go say hi to him. we'll hang out, probably have a

drink, because it's only 8:00 in the morning here. >> yes, you will. kara, thanks so much. >> he's great. >> good to see you. >> thanks. >> kara swisher. we want to check in on the markets here because we are seeing new record highs for the dow, the s&p 500, the nasdaq, and the russell 2000. the meltup continues. also all-time highs for ebay, adobe, netflix and priceline today. also watching telecom. not as hot. starting today, verizon will be selling unlimited data plans for the first time since 2011. at&t, t-mobile and sprint already offering unlimited data plans of their own. verizon's actually one of the losers in the dow right now, guys. and while it is joining on the unlimited plan, it's not undercutting on price, as best we can tell. it's not necessarily the cheaper option, but signals that they're going to all still fight for subscribers here. >> verizon doesn't do cheaper, it seems. and i guess their argument is they don't have to because they are the biggest, they have a lot

of coverage, their network quality, i don't think anybody argues that their network quality is pretty high, but they're hurt on the value argument. john ledger always taking opportunities at t-mobile to take swipes at the bigger competitors, but he really has been gaining ground with this kind of popular millennial-focused, value argument. hard not to see this verizon move as somewhat of a counter to that. >> dumb and dumber,has likes to call them. when we come back, we're keeping our eyes on the white house as the president meets with prime minister trudeau. we're expecting headlines out of that meeting sometime this hour. we're going to watch apple here, within about $1 of an all-time intraday high. unbelievable run it's had in the past month or so. later on, a dangerous situation developing in northern california around the country's tallest dam. we'll get the latest from oroville, california, when "squawk alley" continues. hey gary, what are you doing? oh hey john, i'm connecting our brains

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and the markets more broadly? john stoltz with oppenheimer and andy hargraves analyst with pacific crest securities. welcome to both of you. john, i want to start with you. so, this services argument around apple, i find it frustrating, even the argument that apple services should be valued like paypal because most of its services aren't services. it's digital transactions that seem to me to be tied very closely, at least in a lagging manner, to apple's device sales, its own device sales. am i wrong there? do you think it should be valued totally differently? >> i think it probably should in that it's got the apple brand to it. i think that makes a very big difference when you consider apple and the way it's tied to everything that is apple, and for the users, it makes it a lot easier to access that on a first-time basis. i think the problem for apple really is a question of innovation and how does it break

away from its dispense e e y de yhency on iphone calls going forward. looking at the stock today what it tells you is investors like the stock. people who buy computers, especially consumers and in the arts, they opt for an apple. >> well, andy, it seems there could be worse things to be tied to than iphone sales, given that the iphone unit number beat in the holiday quarter, and average selling prices were up. but around this services argument, again, if you're tied that closely to a premium product, as opposed to devices writ large, is that a problem? >> well, i'd see it slightly differently. the problem is that the scale of iphone gross profits dwarfs the services gross profits. even if you argue that services are tied to the size of the user base, not necessarily unit sales, the direction of iphone unit sales is still going to determine the direction of the stock. >> feels like the narrative on

this one really changed post the election of donald trump, john. the original narrative was that it would get hurt by trade wars, potentially, as a major international player. and now everyone's talking about corporate tax reform and repatriation and apple getting to bring back all that cash. is that the right sort of balance of risks? >> we think it is. and we think that the market had originally anticipated a negative outcome if trump was elected. we had thought that the market might pull back 3% to 6% initially, but once we saw what happened on election night and the way the futures were indicating positive by the end of the night, what we thought is this looks good and the market certainly has said i like it. and i think what it is, sara, is for business, this is just a terrific advancement that we've seen here in terms of business-friendly environment, repatriation of capital. it will help apple out, especially if the administration gives it -- puts its heavy

influence on apple to move manufacturing back stateside. there will be offsets available from bringing some of that capital back from outside of the u.s. >> andy, guessing about the next toy in an iphone cycle is an old, famous game, but we're back into it now, especially as goldman is speculating about augmented reality features. i mean, what are the wild guesses out there about what the eight may have? retina scanner? some other thing we had not thought of yet? >> i don't know. it converts to a car and drives you away automatically? so, the things that we know -- or the things that we think we know, right, that the high-end version, we think there's three skews. the highest inversion have a screen that's sized between the two current versions right now, glass back, sort of an ode to the iphone 4 form factor, and home button might be a virtual home button. outside of that, i have no idea what's coming, but i would argue that consumers don't really care. what they really want is

something that when they pull it out, people know that that's the new one. and so, it's sort of the consciousness they'll appeal to the most. >> john, it seems like inevitably, there will be another argument about law of large numbers, apple can't go any higher, which is what people seem to say on the street whenever the stock takes a dip, and then they say something completely different when the stock goes up. what should people really be paying attention to, investors, to fundamentally track where apple's going? >> well, we'd say as strategists, the big thing is just take a look and see the niche that they have. and in terms of profitability, the ownership of the consumer space, it's an affordable luxury, apple technology. i think their biggest risk right now near term is probably alexa bearing down on siri. i think that's something to consider. and i think, you know, they're going to be watching that. but the apple brand is extraordinary. the ability -- i think what steve jobs did is he took

computerization and he married it with customer service, with human beings. those aren't robos when you go to the genius bar at apple. and as a consumer, i can tell you, i'm microsoft at work, but at home i'm all apple. and i love that genius bar. they say, hey, pop, how can i help you with this? and i'm there helpless with -- >> unless you make an appointment. >> yes, ma'am. >> all right, john, andy, thanks. of course, we'll continue to watch this stock. still to come, a dangerous situation developing in northern california around the country's tallest dam. we'll bring you the details next. plus, we are keeping our eye this morning on the white house. we'll update you when we get headlines from the meeting that is happening now between prime minister justin trudeau of canada and president trump. "squawk alley" will be right back. the dow's up 120.

this tape here between the president and prime minister trudeau of canada. this is moments ago at the white house. let's take a listen here. as we await to see which issues they're going to highlight -- immigration, trade, national

security, m&a, cross-border activity, pipelines, et cetera. of course, the prime minister making that visit just days after the prime minister of japan, shinzo abe, came in, went to mar-a-lago over the weekend with a lot other news interrupting that meeting. >> and i would say investors, as a lot in the diplomatic community, breathe a sigh of relief. let's take the white house. >> okay? >> okay, thank you, press! >> thank you. >> thank you very, very much. appreciate it. going to go out these doors. >> thank you. >> thank you very much. >> this will be one of the more basic pool sprays that we've gotten over the past few days. his week's not over by a long shot, as we said, netanyahu coming later in the week. >> wednesday. >> yep. where the issues are arguably -- there's a lot more gravity to the issues surrounding the netanyahu meeting, you could

argue. kayla tausche's watching all of this for us at the white house. kayla, your thoughts as we just see that very short piece of tape? >> reporter: yeah, it was a very brief photo op for the press pool with the prime minister of canada and president trump. noticeably, there was no handshake until the very end when president trump asked for another handshake in front of the press, saying i think they want to see another handshake. of course, that follows the handshake when prime minister trudeau arrived at the portico here at the west wing after having to wait for a few minutes because he was early for the appointment. he was here just a few minutes before 11:00, and so, they were stalled here in the driveway just before going in. of course, there are several meetings to take place throughout the day, which is where some of the more substantive conversations will be taking place. as we get more of that news, carl, we'll bring it to you. >> i think our eamon javers is also standing by with a look at this meeting. a lot of the media is careful to point out the similarities and differences, and there are many differences, between president trump and prime minister trudeau. for one, trump is 70 years old,

trudeau is 45 years old. they're also on completely opposite ends of the political spectrum, eamon. >> reporter: yeah, prime minister trudeau is somebody who made barack obama feel like an old man. that will definitely apply to donald trump as well. and then watch the personal relationship that develops between these two leaders, because for donald trump, he very much values that interpersonal connection. we saw that at play over the weekend with shinzo abe going down to mar-a-lago. they played golf, they had dinner together, they made an emergency announcement responding to the north korean missile test over the weekend. all of that's so important to this president. and you've got a prime minister here in justin trudeau who had a really personal relationship with barack obama. they had the famous bromance that was dissected 60 ways from sunday in terms of their relationship. now, how are they going to make that relationship work here in the white house, the canadian side flooding the zone here. lots of canadian officials here at the white house here. so, we'll see how that develops over the course of the next few hours, guys. >> eamon, what's at stake for

the prime minister in this meeting? how much leeway does he have to cozy up to president trump, given that the president's comments about trade with mexico and canada have been somewhat aggressive? >> reporter: well, look, he's in a difficult box because he's playing to two audiences here. one is the audience of one here at the white house, donald trump himself. justin trudeau's going to want to have that good personal relationship we were just talking about, but then there's the domestic political audience back at home in canada, where his political base, trudeau's political base is not necessarily a base that looks favorably on donald trump. so, how does he finesse that, show enough warm relationship here with this white house, and yet, enough distance to appease his base back home? that's going to be the tricky balance and we'll have to see how it rolls out. >> well, the markets remain hopeful, eamon. dow is up 130, s&p, canadian stocks a 52-week high as well. >> and the looney's up. >> and the looney.

coming up, we'll talk to former trade ambassador ron kirk. he helped craft tpp. his take on the meeting in a moment. the value of capital? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley and the wolf huffed like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms.

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good morning, everyone. i'm sue herera. here's your "cnbc news update" this hour. a large bomb ripped through a protest rally in pakistan, killing at least 11 people and wounding 60 more. the blast occurred when a man on a motorcycle rammed into a crowd of pharmacists who were

protesting new amendments to a law governing drug sales. a taliban splinter group claiming responsibility. israeli prime minister benjamin netanyahu departing israel for the u.s., where he will meet with president trump on wednesday. he also told reporters he would be holding talks with vice president pence and secretary of state tillerson. charleston church shooter dylann roof wants a new trial. attorneys for roof are arguing federal prosecutors lack jurisdiction, claiming the case happened entirely in south carolina. roof has been given the death penalty. and nasa releasing a rare, spectacular photo. look at that. of a star that is dying. the image taken by the hubble space telescope shows the star transforming from a red giant to a planetary nebula when it blows its outer layers of gas and dust into space. amazing stuff. that's the "news update" this hour. back downtown to "squawk alley." carl, back to you. >> sue, thank you very much. now let's get over to seema mody

at hq, count down here to the close in the uk and europe. hi, carl! we are mostly in the green in europe. president trump appears to be adopting a more conventional position on foreign policy, and that's provided some level of assurance to global investors. and as a result, european stocks are on track for their highest close since december of 2015. what's leading the rally? the miners once again the big winners, rallying on the upbeat china iron ore data and strong prices. anglo american leading the pack. to drugs, stada is the biggest gainer, the drugmaker saying it's received two takeover offers, one from a private equity firm. shares up in today's trade. on the flip side, we have swedish defense company saab missing on fourth-quarter earnings but the stock is still up more than 40% over the last 12 months, to provide broader context. and when we look at populism

once again in the spotlight today, france's central bank governor warning, if national front leader marine le pen is elected as the country's president, her pledge to ditch the euro would cost france more than 30 billion euros a year in increased borrowing costs p.. the governor says that's the equivalent of france's annual defense budget. the latest presidential poll from opinionway showing le pen leading in the first round with 26% compared to 22% for macron and 21% for francois fillon. but the poll also says either opponent would defeat le pen head to head in the second round on may 7th. so, as we watch for these earnings out of the european corporates, politics still front and center in europe, sara. >> yep, we're going to have a few months here of watching the polls. seema, thank you. seema mody. president trump meeting with canadian prime minister justin trudeau right now at the white house. this is the first time both leaders are meeting face-to-face. we just saw that photo op just

moments ago, since trump's victory last november. likely on the agenda, economy, security and trade. joining us, former u.s. trade representative ron kirk, who among other things, helped traft the trans-pacific trade partnership, which president trump has since withdrawn, kept his campaign promise there. welcome, mr. ambassador. nice to see you. >> good morning. always good to be with you. >> so, the very popular torontostar.com leads with "trump's handshake with trudeau did not last 19 seconds." beyond the body language here, they're going to have a bilateral meeting. they're going to be meeting with some female executives, and then prime minister trudeau will be meeting with the majority leaders in congress, house speaker paul ryan and mitch mcconnell. what will you be looking for to come out of today? >> well, one, i think we have a little bit of a comfort level here in that president trump's language regarding trade, and

particular, trade in north america, was almost singularly focused in a negative way on mexico and not on canada. so you don't have some of the awkwardness for the prime minister trudeau that the mexican president did, so it gives them more space to feel each other out, build this relationship. but like mexico, canada's economy is largely dependent on trade, and you know, it bears repeating, we are their single biggest trading partner and they are ours, with almost $2 billion a day going back and forth. >> they're our second biggest trading partner, next to china. mexico's the third, but i get your point, they're our biggest export market for sure, mr. ambassador. so, as the markets, as everyone tries to figure out who the winners and losers are out of the trump policies, clearly, the currency market has deemed mexico the big loser. where does canada fall in the spectrum of that? >> well, i think canada's concerned.

canada -- i mean, you noted my work during the previous administration in helping pull together the coalition for the trans-pacific partnership. this was at the top of canada's agenda because they wanted to be a part of that new market. and the irony was that the trans-pacific partnership effectively was the opportunity for the three north american partners to modernize and update nafta. and it will be interesting to me to see what goes on. we are very strong partners on security. we have an integrated economy. you could argue we have an integrated manufacturing base, but canada's also shrewd enough, i think, to try to move forward and take advantage of our absence and our leadership, particularly in southeast asia, while we try to get our act together. >> yeah, ambassador, when i look at canada, trade deficits, largest with vietnam and south

korea, which i imagine must be on their minds as well. and when they export so much to the u.s. -- do you expect to see them do and how to position themselves, just in case the united states is not as reliable for them as an export market as they had hoped? >> well, i think -- look, they're going to continue, i think, to make the case to the president behind the scenes, and he has left himself some room by saying i'm going to bring you a better nafta, a better deal. and the trans-pacific partnership is a pretty good template for them to maybe make some changes around that and say mission accomplished. but while the canadians are good partners, they're also fierce competitors. and i can assure you, they are quietly saying to a lot of u.s. compani companies, look, if you're going to lose all of the advantages of what we negotiated in the trans-pacific partnership -- intellectual property protections and these tariff reductions -- not that big a

deal for you to at least move those goods across the border to canada and then ship them to these other markets. so, i think they will be very shrewd in positioning canada as sort of a safe alternative for those u.s. companies that are going to come out on the wrong end of this deal. but we'll know more as the weeks and months ahead come, but my biggest concern is just that i know it's very difficult to stand still in a global competitive market. and while the united states is in this period of flux, no matter how much these other countries say they love our partnerships, they're going to be acting in their own economic self-interests as well. >> yeah, that was the conversation around china's foreign minister meeting in australia last week. obviously, they're going to fill that vacuum. i wonder, there's been some reports this morning looking at asian countries that would ostensibly be targeted in the absence of tpp by a trump white house. some speculated that vietnam

would be the next on their list. do those economies have reason to worry, too? >> i wouldn't say worry, and i don't want to speak for them because this is a very, very careful subject for many of them, but you know, the sad thing, what hurts me the most, these were countries that very much came to the united states and effectively said, please don't leave us with only one global alternative. they had no choice but to be engaged with china. china is, you know, the 5,000-pound gorilla in southeast asia, but they very much wanted to hedge against that by entering this partnership with the united states. and so, i think in the absence of that, though, it does bear noting -- i don't want to sound like a broken record, there is nothing to keep the other 11 remaining partners among the trans-pacific partnership from going ahead and putting that agreement into effect, and that

would be a tragic outcome for u.s. businesses and exporters and farmers and their workers, because we would have effectively negotiated the largest duty-free zone in the world and then said to u.s. businesses, you can't play in that market. >> so, if you had to put a prediction out there right now on president trump's trade policies -- we know he wants the u.s. to become a bigger exporter and we know he wants fairer terms of trade, especially with those countries that we have big deficits with, like china and mexico -- can he accomplish that successfully? >> you know, i'll tell you what, at least i'm in good company. a lot of people have walked out of the casino with empty pockets trying to figure out what the trump administration's going to do. you know, i would feel better if i believe, and once he has a full complement of his cabinet, both at the state department and at ustr, at commerce. you know, my greatest concern

right now, even going into this meeting, who's kind of helping him think through these issues? we know it's not rex tillerson, because he doesn't have his people at state. i don't think u.s. trade representative-elect lig lighttower's been in, so i don't know enough to make any outlook on what this president might do. it feels like his policy has been more intuitive thus far than it's been strategic. and the only thing that gives me some hope is that if you look at his business past, certainly with he and his family, they have embraced this global economy and taken advantage of it. and as a businessman, surely, he has to understand how important it is for the u.s. to have access to these 95% of consumers around the world who don't call the u.s. home. >> we will leave it there with our thanks to you, mr. ambassador. ron kirk, the former trade

representative. we won't make you go to the casino either. thank you. >> thank you. as we go to break, take a look at where we stand on the markets. of course, new records for all the major averages. dow's up 130. dow an even 20,400. rick santelli, what are you watching? >> well, of course, i'm watching the dynamic of everything moving higher again -- rates, dollar, equities. but we're going to talk about some effects on treasuries. we know there's effects on fx. think border adjustment tax, think about a big rally. but there's something going on in treasuries that may change due to policy. tune in after the break.

i'm scott wapner. today on "the halftime report" from the new york exchange, the russell 2000 hits a record, far outpacing the nasdaq, s&p and s&p 500. plus, an exclusive interview with mick mcguire, focusing on buffalo wild wings and deckers. and more wall street support for apple as that stock nears its own new record high. what do you do, do you ride it or take profits? "halftime report" at noon eastern. j jon, see you in about 15. >> we'll keep a chair warm for you. now to the cme group and rick santelli has "the santelli exchange." rick? >> thanks, jon. we all know that policy changes are coming. market hasn't waited. it's already weighed in, maybe in a very large way. so has foreign exchange, and to

some extent, so has fixed income. we all know that things like border tax adjustment purr importantedly is going to have a big effect to the up side on the dollar index. is that affecting how speculators are trading it? i'm sure it is. how it turns out? well, nobody really knows. there's some pretty calculated guesses going on, because we have a good complexion, a good landscape politically. but consideri this. let's look at some charts. let's look at the corporate spreads. first, investment grade. one month, one year, five years. and as you look at those, look at how the spreads continue to narrow. if you look at high yield, it's even more dramatic. quite simply, the premiums you're getting for high-quality sovereigns are diminishing and diminishing fast, and the notion of how everything is turning out sector to sector is making some scratch their heads. interest the dow's up 3% year to date, the s&p darn close to 4%, the nasdaq 7%-plus.

yet, i see a 244 on the board for 10s, which is exactly where it closed 2016. so, what that may mean is the underperformance may get larger. why? let's consider another possible effect of policy, what's going on with repatriation. this is the hottest story in the sovereign fixed income market for treasuries, because as it goes -- and it makes quite a lot of sense -- is that much of the merger and acquisition, all the money stuck, the trillion stuck overseas is affected by issuance, corporate and high yield. investor complex has been fertile ground for all this record issuance in 2016, and a lot of it going on at a pace that's enviable for 2017 as well. but what happens when not only the money comes back, but think about the ongoing issues of how most likely we're going to end one some form of an import tax and repatriation won't be an issue once tax policy gets changed. that is definitely going to affect how the pieces get

financially put together. financial structure is not going to include so much issuance as it is actual cash. so, most likely, supply's going to start to go back the other way on high yield and investment grade. and what we're going to be left with are treasuries, and that's not the only channel of demand that may increase. i would also think that if you look at the underperformance of the fixed income market to equities, and it's somewhat a global perspective, you have things like the political movements going on in france, you have what's going on from the banking side with regard to italy, and of course, default issues in greece. all of this most likely is going to make the hedge side less aggressive on the selling for treasuries and the buy side looking for rates and a competition for equities probably that much more aggressive. jon fortt, back to you. >> all right, rick, thanks. up next, a flood watch in effect for parts of northern california. thousands are being evacuated. we'll bring you the latest when "squawk alley" returns. ♪

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ways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. california prompting a massive evacuation around the country's tallest dam. nbc news's steve patterson has details. >> officials here in northern california trying to avoid catastrophe. it predicted 30-foot solid wall of water would be coming in one of these spillways gives way. the problem is both the

spillways that are coming off of this dam are damaged by erosion. so you have a situation in which engineers rebind me are working to get a number of boulders chopped up so they can have this massive sandbag operation to try to shore this up before next rainfall which is as early as the middle of this week. meanwhile, that evacuation order given on sunday because officials were so scared of that spillway giving way nearly 200,000 people had to be evacuated from their homes, particularly in low-lying areas downriver from this dam. many of them we spoke to simply just loaded up bags of their belongings, threw those bags into cars and had to head on to the highway in a very scary situation with everybody trying to escape. now again, the work is being done. engineers will be back on scene to check out what they can do to shore this up before the next storm hits. back to you. >> all right. our thanks to steve patterson of nbc news. to the markets, of course another day of records.

for the dow, the s&p, the nasdaq and now the russell joining the party. bob pisani watching all that from the floor. >> it's not just the indexes, carl. finally getting individual breakouts from individual stock. it's not just apple hitting a new high. techs are breaking out. apple is at a 52-week high. tesla, seagate, adobe, hitting new highs. regional banks like zion, for example, or regent gions financ are hitting 52-week highs in the bank sector. industrials, a large swath, general dynamics, honeywell, paccar, emerson, all 52-week highs. new high list is expanding nicely now that there are significant breakouts including the russell 2000. the etfs, tech not surprising. xlk. midcaps as well, metals and mining, the xme. vanguard pacific, stocks over in

asia hitting new highs. vanguard's emerging market, vwo is hitting 52-week highs. in fact, global markets are expanding. let me show you an etf. you can own the whole world in the etf. this is the entire world x the united states. this is also just hitting a 52-week high as well. global reflationary trade has been swashing around the world. get a number of country etfs also at new highs today. chil chile is at a new high. commodity play, chile, peru, poland, and canada. you can see, carl, the reflation trade, whatever you want to call it is really expanding around the world right now. so new highs just about everywhere. back to you. >> bob, talk to you later. bob pisani. "squall alley" continues in just a moment. runs on intel?

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dow is up 114. not far from session highs. i was looking at the list of all-time highs today. man, it is a big play around consumer. netflix, price line, a lot of

financials. jpmorgan, m and t, pnc, norfolk southern, all time highs. >> not an all-time high but watch amazon as well. breaking up above 840. pretty much getting back all of its post-earnings losses. you can just see that little "v" there at the end jumping back. >> it's interesting to see the big tech names that underperformed after the election. had started to lead again, especially when it comes to technology. sort of joining the party with financials and industrials leading the dow, for instance, adding the most points, goldman sachs and caterpillar. there's going to be a lot of moving parts this weekend. janet yellen starts two days of testimony tomorrow on the hill. remember the fed. any hints of march particularly would a market mover. >> numnuchin going to be set toe heard tonight. largely along party lines.

politico says this morning that he's looking to tap another gold machine alum, jim donovan, to serve as his deputy. so this is all as the meeting between trump and trudeau continues. >> he had a good weekend as the executive producer of the "lego" batman movie. >> evidently there's been screen credit for mnuchin at the end. >> this is going to be interesting. but i think it to your point, it reminds me earlier of brian b l bellsky who likes the banks on the deregulation theme. if you look at who he's looking at for instance for these treasury official who take the lead rolling back dodd-frank. it points in one direction which makes life easier on the big banks. brian and the to be executives at vf wear will be joining jim cramer. en intel stock got doing bell.

spending on factories. >> having quite a photo-op with president trump at the white house at the oval. >> that's what i'm talking about. spending on factories. a lot of good jobs there. perhaps counter balancing the jobs that i tell is losing. >> finally, ten companies account for about 21% of s&p market value right now. apple, microsoft, berkshire, amazon all lead that incredible list. let's get to the judge at "post nine." ♪ >> thanks so much. welcome to the "halftime report." post nine new york stock exchange. top this hour, russell run, yet another record high for the smaller cap index which is now up 17% since the election. that easily outpaces the other mayer jos but does it mean it's the best place for your money right now? with us for the hour today, joe terranova, josh brown, john