kate posted higher revenue and profit in the fourth quarter amid a weak handbag market. now to carl and the gang at "squawk alley." back over to you guys. >> all right, dom, thank you very much. good morning. it is 8:00 a.m. at snap headquarters in venice, california, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ good thursday morning. welcome to "squawk alley." jon fortt, kelly evans and me at post 9. good to have you, kelly. thanks for joining us. >> good morning. >> breaking news, the president announcing a news conference in about an hour from now. we'll look forward to taking that live when it happens.

before we get started, we have breaknews. let's get to steve liesman back at hq. steve? >> from a trump press conference to liesman on big numbers on debt, huge numbers. the new york fed saying household debt rising by $226 billion in the fourth quarter of 2016. that is the biggest jump in household debt since the fourth quarter of 2013. it is now at $12.58 trillion, the biggest number since the fourth quarter of '08, which you'll remember is right around when it started to decline with the financial crisis. what led the way? mortgages at auto loans were behind this rise in household debt. but interestingly, bankruptcies and foreclosures reached an 18-year low, which is the history of this particular survey. so, those rates are really well down. you're not seeing a rise in bankruptcies and foreclosures, even while you're seeing the rise in debt. credit cards and student loan balances were also part of the increase.

carl, we don't know if this is part of the trump phenomenon, the post confidence or something toward the fourth quarter that was more tied to the prior economic regime. carl, back to you. >> yeah, that feisty debate going on right now. >> yeah, right. >> thanks, steve. >> thanks. >> by the way, along with this news conference at noon, we are expecting the president to announce a new nominee for labor secretary, so we'll be seeing that in about an hour. meantime, our top story -- snapchat's parent company, snap, releasing its amended ipo filing, between $19 and $22 billion. expected to meet with investors and underwriters in new york. leslie picard is in midtown with the latest. >> reporter: hey, carl. we're here at jpmorgan now, which is the second stop for the snap executives. they're meeting with the sales forces at the banks today. they were at morgan stanley first thing this morning. we saw their two cadillacs pull in. they spent about an hour and a half there talking with the sales team. i'm told that their presentation and video explaining how they intend to pitch this ipo will be

available later online today. as you mentioned, earlier today they posted their amended filing. we learned a few thing $19.5 billion to $22.2 billion. we did some back-of-the-envelope calculations on that, looking at how that compares to the sales numbers they put up for 2016 -- 48 times, carl, 48 times sales numbers for 2016. that compares to about 14 times at facebook, which is particularly interesting because this is the first time we've ever seen an ipo being offered and conversations with people who were in these meetings will be ever more interesting to see exactly how they plan to pitch that valuation to investors, how they get investors to buy into this. after this, of course, they're headed to goldman sachs, so we'll be on the ground following

it from here. >> leslie, thank you for that. our leslie picker. speaking of social media, we'll talk with anthony noto. jim's going to have that at one market in a few moments, but valuing social media is tricky business right now. >> here's my question for you, john, the amount of money they're raising, the valuation for snap, would that be lower than it was valued at in private? wasn't it a $25 billion company? does this make that a down round, so to speak? >> i'm not sure, that's a good question. i'd have to look back at the numbers. it's unusual for the time in that it's a relatively large float and you get no votes if you buy into it, and as you mentioned last hour, they're marketing themselves as a camera company. i think that's actually sort of smart, because if they talk about themselves as just social media and raw numbers, then you've got to compare with facebook, which is the largest of them all. i think they want to avoid that, but you don't want the gopro comparison either, and trying to talk about yourself as something you're maybe not. >> yes. let's get to the aforementioned

jim cramer with anthony noto out at one market. hey, jim. >> thank you so much, carl. so much to talk about with anthony noto, the coo of twitter. let's get right to it. i want to talk about the real donald j. trump. are you surprised that twitter did so much to elect a president, anthony? >> what i'd say is the american people elected the president. we love that he's using the platform. he's built greater awareness of the platform and the power of the platform. when he tweets, it drives discussion, it sparks debate, and that's great for us being able to show what's happening in the world better than anyone else. >> okay, my screen -- i've been around for as long as you have, okay? this is my screen. my column is "the real donald j. trump." i have to watch it the moment i get up, the moment i sleep, everything. i want to know why it's free? >> i think tweet deck represents one of the opportunities we have to really grow the business in a number of different ways. it's great that our audience has been accelerating for three consecutive quarters. we grew 3% in the first quarter, 5% in the second quarter, 7% in the third, and we just posted 11% growth in the fourth quarter, and we said that our growth remains strong as we go

into q-1, so we're encouraged by that. that should drive a return, advertising revenue, as dollars follow eyeballs and tweet deck represents ways we can make money. >> as we know, there's been a disremediation of the media by trump but also the odd ball to revenue relationship because of the plethora of content. it really broke down in q-4 for everybody, not for you. a lot of people think it's just for twitter. we always see twitter, facebook, alphabet, but the truth, is as you know, you're an old analyst from wall street, that somehow, eyeballs stop producing the amount of revenue because of the glut of content, and that's been affecting twitter as well as everybody else. >> well, for us, what i'd say is we haven't been able to leverage the more attractive roi we're driving through this bigger audience and also double-digit engagement over the past three quarters and prices down over 60%. most of the budgets allocated to w twitter have been allocated six months ago when we had lower

roi. we're delivering that positive message that we have accelerating audience growth, our engagement is up double digits three quarters in a row. they have long lead times, it takes 6 to 12 months, but we're delivering that message and we're starting to hear -- >> i know you didn't give revenue guidance. why not just say look, we know revenue will be down until we refigure the model, but 2018's going to be a big year for us? >> i think the investment community got a pretty good take on what the trends are from the advertising business -- >> you were pretty negative on that call. >> we do face challenges and we think revenue will lag audience growth in addition to the fact we have to prove our roi's better, which it is. we also have to make sure we put the right products in front of customers and de-emphasizing is also having an impact. >> the president came out and said the stock market hits new highs. is there a fire drill on twitter? let's get bank of america on the phone, sponsor that tweet? >> there is not. >> why not, man, there's a fire burning? >> we have an auction platform

that allows advertisers to advertise in the moment in realtime without having to reach out allow you also to advertise against that organic activity in a unique way. >> jack dorsey said our greatest superpower is we break news faster than anybody on the planet. why won't people pay for that? should be part of a cable bundle? >> no. >> why? they may a lot of money? >> we have significant opportunities in advertising business, as you mentioned tweet deck. we also have a super large audience in syndicated, 1.5 liv we can monetize the audiences with a product that is exactly the same as it is on twitter. >> i'm hearing so much good and i keep thinking there should be an explosion of revenues, not unlike from facebook. 24% alphabet. but i am not getting those numbers from you. what is wrong at twitter? >> the biggest factor that we face is that advertisers are using our audience and audience

size from 6 to 12 months ago. we're now seeing accelerating growth and we have to get allocations in their future budgets and they allocate 6 to 12 months ahead of time. >> but with cbs last night, we hear they can take advantage of the fact that there could be a good second half of a super bowl. >> we can in our capturing dollars from the scatter markt, but that's a small percentage of the overall budgets. >> i want to know how much you communicate with the president of the united states? >> i don't. >> how about jack dorsey? >> i can't comment on who he communicates -- >> he's doing it seven times a day. seven times a day is perhaps more than you'll get if you're from say cnn. so why not capture the mindshare for the dollars? >> there are a lot of products on twitter that allows us to capture all of these high-profile use cases of the platform. two years ago if president trump tweeted at 3:00 a.m. and you woke up on 6:00 a.m., that would be at the bottom of your timeline. today that's injected to the top based on your profile and interests and our machine learning, so you can see that

tweet today. you can also -- >> then let me pay. i have to pay. why is that for free? here is something that is -- i'm pointing to my user -- it is more valuable than almost anything else i get, and yet it's free! it's like oxygen! i mean, it's oxygen! >> we're monetizing the platform through advertising. there are alternative ways to monetize it and we're evaluating those. >> dorsey spoke yesterday about the iranian green revolution, arab spring. could you overthrow a government? >> i think the platform is powerful and we'll let people decide how to use it and the impact it has. >> will you advertise against it snurz an old brand guy. west point, you were kraft. do the advertisers want that demographic? trump is an overdemographic. maybe they want snap more. >> i'd say that we have tens of billions of tweet impressions every day and those tweet impressions span categories across sports, entertainment, music, health and wellness, and finance and many other areas, so advertisers can advertise in the

context of those impressions and be able to point their messages to the targeted audiences that matter most to them and they don't have to be around content they're not interested in. >> do you have the right reps? i'm looking at numbers about the turnover. are there people just not out there selling, anthony? because errs telling me, alphabet may have this, but we've got 10x alphabet. >> i would say three things about our sales force. first of all, their clients love them. i've met with dozens of advertisers since early december. they think -- if they allocated dollars based on service, we'd be number one. number two is the advertisers love the fact that we're seeing accelerating growth again and they're adjusting their budgets. it just takes time. >> we'll go back to president trump holding a congressional session. go ahead, carl, take over. >> jim, thank you very much. let's get to the president. [ applause ] >> hello, everybody. what a nice group.

>> thank you all for being here. i had a lot of good discussions this morning. i'm negotiating a lot of contracts that are saving billions and billions of dollars for the american people and for all of us, and i'm very proud of it. you know the 835 fighter jet, the air force one program, which was totally out of control. and now it's back, very much in control, and many other things. in addition, i had a very good phone call this morning about a major plant that's moving back into the united states. we'll be talking about it soon. and what i do have is a little free time at about 12:00, so i don't think the press will want to show up, but i think i have a press conference probably at 12:00 in the east room. we had a little time in between

things. so, if the press would like to show up. will anybody show up to that press conference? [ laughter ] historically, they didn't care about these things, but me, they show up. so, i think 12:00 in the east room of the white house, we'll have a press conference. i just want to thank you folks for coming today. this was great. this was scheduled a long time ago. some of my very, very early supporters, and i've been your supporter also. we're doing really well. the fake news media doesn't like talking about the economy. i never see anything about the stock market, sets new records every day, chris. i never see that. but i think the people understand it. we're giving a speech in melbour melbourne, florida, on saturday. i think it's going to be around 4:00, and i hear the tickets, you can't get them. that's okay. that's better than you have too many, right? so, it's going to be great. i look forward to that. so, that will be melbourne at

4:00. i really appreciate you folks. you folks have been so great, and right from the beginning. and tom, right at the beginning, just about every one of you right at the beginning. some were a little after the beginning, but we forgive. but we forgive. let's go around just for the media and you'll introduce yourselves and then we'll start talking and i'll see the media back at 12:00. chris? >> well, mr. president, we're all honored to be here. this is really our trump caucus reconvening for the first time in a little bit, but our first meeting was the first part of march. duncan hunter and i both endorsed you on february 24th, a week from tomorrow. so, it's the one-year anniversary. but this is the trump caucus reconvening, and we're just so honored you're taking time out of your busy schedule to be with us. >> these are real friends, thanks. >> western new york. >> duncan hunter, mr. president. from california.

>> kevin cramer from north dakota. >> bill schuster, western pennsylvania, chairman of the transportation committee. >> give you some money for transportation. that's good. [ inaudible ] >> pennsylvania. >> mr. president, tom reed. pleasure to travel with you to florida. congratulations. >> thank you. >> president, tom. [ inaudible ] from williamsport, pennsylvania, and please, for 30 seconds -- >> uh-oh. uh-oh. >> got something for you to sign. >>. [ inaudible ] >> 60-some years old, never voted. never registered. he registered for you and voted for you and asked to give this to you. there's a nice letter there. i'm sorry, mr. vice president, but that's that. i'll set this over here. >> that's beautiful. thank you. he's a talented guy. i can see it.

>> and i have the chairman and ceo of world series baseball right here. >> right. >> and mr. vice president, i kind of figured that you would be here as well, so, this is from the new york team last year that was in the world series. that's for you. and this is a jersey, an original jersey of the new york team in the world series last year and this is for you as well. >> well, thank you very much. [ applause ] thank them for me. >> i will do that. >> thank them for me. >> mr. president -- >> rick, we know who you are. >> from tennessee and i just want you to know that tennessee is fully behind you. we're excited about the work you're doing. we know that health care and tax reform has to be done this year and we like the work you're doing. we need you to help us continue -- >> right, we're going to get it done. and the health care's going really well. now that we finally have tom,

tom price, dr. tom price, it's a big thing. we are going to be announcing -- i guess i'll do it at 12:00, a new secretary of labor who is really phenomenal. so, that will be at 12:00. and we're getting -- i mean, this is the slowest in history the approval of a cabinet, and these people are outstanding people. the man i'll be announcing for labor is a star, great person, great person. and so, i look forward to that. but i appreciate everything you've done. you've been fantastic, and i appreciate it. thank you. >> mr. president, good to see you, mike kelly. >> i know mike. >> pittsburgh, erie. thank you so much. what an exciting summer we had together. >> we did okay. >> we did better than okay. >> we took an area that wasn't typically republican and swamped them. >> 30 years erie finally voted for a republican, thanks to you. >> thank you. >> billy long, and i'm co-chair of the congressional study group

on japan. i'm going to be leading the delegation to japan saturday, meeting with prime minister abe on monday. >> who is a great guy. >> so, if you will tell me how many golf balls he lost in florida, i'll know how many house of representatives golf balls to take. >> he played well, i will tell you. and we played with ernie els. i called out billy, said see if you can get me somebody good to play with. the prime minister of japan wants to play golf. so we get there and ernie els is waiting for us. we had a very good time. he played very nicely and he's a great guy. you're going to like him. >> oh, yeah, i met with him the last three or four years, he's a great guy. i knew you all would hit it off because you're both people persons and great personality. so i knew you guys would get along good. >> well, i always said about president obama, it's great to play golf, but play golf with heads of countries, and by the way, people like yourself, when you're looking for votes, don't play with your friends that you play with every week. does that make sense? >> yeah, it does. >> i hit it off with the prime

minister. he is a fabulous guy. he loves his country, and we spoke all day long and well into the night. as you know, they launched a missile, north korea. we were discussing that. so, it was really something. but have a good time over there. >> i will. >> and give him my regards. >> the ambassador was in my district for two full days and he mentioned he was with you down there in florida also. >> he was. >> he is another great guy. and fran drescher from "the nanny," said you were on "the nanny" one time. she has a request that their battle for cancer, that you have a cancer board that has one non medical person, so she wanted me to put her name in the hat for that. >> she's fought hard. she's fought hard. yeah. you know, if you would, why don't you give me that request and let's see if we can do that. >> we will. >> okay? >> i'm marsha blackburn from tennessee. i chair the telecommunications

and technology subcommittee at energy and commerce, and we are looking forward to broadband expansion. >> okay. >> rural broadband. >> you're going to get it. thank you very much, everybody. thank you. i'll see you at 12:00, if you want. if you don't want -- if you don't show up, i won't be -- >> going to find the leakers, mr. president? >> we're going to find the leakers. they're going to pay a big price for leaking. >> that is the president making that last comment about leaks in the intelligence community, commenting briefly on playing golf with the prime minister of japan, saying that his new secretary of labor nominee, which he'll announce in about 40 minutes is "really nominal, a star, a great person." eamon javers listened to all of that along with us. eamon? >> reporter: hi, carl. that announcement setting off a mad scramble at the white house. the press conference the president was just talking about was not on the official schedule, so crews and reporters here are scrambling to get in position in the east room.

not clear who the president is going to pick for the new secretary of labor now that andy puzder has withdrawn in the wake of lack of republican support up on capitol hill. so, we'll see where the president goes there. and you also saw the president clarifying a little bit his thoughts on golf. he frequently criticized president obama on twitter for playing golf while president, but today you heard president trump now saying that, really what you should do if you're the president is play golf with heads of state and members of congress so that you can lobby them and get business done while you're out on the golf course. so, sort of a free-wheeling session there with the president talking to some of his most loyal and early congressional supporters here. they call themselves the trump caucus up on capitol hill, and those are people he's going to need in the weeks and months to come, especially when we talk about the tax deal, obamacare and all of the other things that this president wants to do on capitol hill, carl. >> we will see you at the top of the hour, eamon, if not before. our eamon javers. when we come back, busy hour on "squawk alley."

three-time "s.i." swimsuit model kate upton will be here at post 9. house speaker paul ryan addresses a busy week in washington from flynn to puzder. and later, a cnbc exclusive, the ceo of marriott on everything from earnings to the president, when "squawk alley" comes back. t e you dog?oh h jcong oin t soat's a g ia, ing tradinknowledg g oin but you st gtothinkorsch rooms eryou sharstrateteesids,n ts but you st gtothinkorsch rooms th market prals d thndof othrc mm bluerer inhe kwledge o otaders tnkim. onlymetrad know you ha dedicated vir and tm ♪

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welcome back to "squawk alley." the president moments ago

promising to announce his new pick for labor secretary when he holds a news conference in the east room of the white house in about half an hour. the president also promising to find those behind the leaks in the intelligence community. we're going to have that news conference, of course, live when it happens. and still to come, house speaker paul ryan makes comments on a busy week in washington. we're going to bring those to you live. but first, from the cover of the "sports illustrated" swimsuit issue to post 9, kate upton joins the show right after this break. we'll be right back. ♪ why domanyusess re on the u.spoervice becacawhenhey ship witus, thr busseces o ne. ♪ecacawhenhey ship witus, th's we keoree-mmerce dels to hr ♪ he, ere, everywhere. uned states st sviiority : you

for the third time in five years, model kate upton graces the cover of "sports illustrated," but this year they did three different covers to mark the occasion. joining us at post 9 is 2017 cover model kate upton. kate, great to have you. welcome. >> thank you so much for having me. >> i read something yesterday that this time around you approached the shoot and the cover with a new mind-set. is that true? >> yes. it was true. i looked at my body as something completely different, and i have

to say that after my first cover and all the controversy about my body really helped me get there and this new mind set that my body is, you know, there for function. it's there to get me through the day and in modeling, we forget that. and in this world we forget that, as women are sitting there thinking that they have to fit into this size or that size, i don't know, probably because of magazines, and in my way of training, weight training, it was all about strength, it was wanting my body to be as strong as i possibly could be for my life, for energy. >> so, how has that changed the way you approach a shoot? you say you're thinking about your body completely differently. i'm not sure that the buyers of the magazine will be, but modeling is a tough job. there are long days. how did thinking about your regimen differently affect the job? >> well, because it was more of a lifestyle for me. it was more of, you know -- i mean, for the shoot, i really just kind of upped my workouts a little bit, but it wasn't that

strenuous because i was living a healthier lifestyle because of your mind-set. whenever you change your mind and the way you think about your body, it's much easier to change your lifestyle. it doesn't feel like a diet. >> who here can do the most pull-ups, do you think? do you think it's you? >> i definitely can't do pull-ups. but i can push 500 pounds on a slide. >> wow! >> nice. >> has verlander informed your workout? knowing somebody whose job it is to be a professional athlete? >> well, men and women working out are two completely different workouts. he likes to think he knows, but i like to tell him he does not. >> one thing i'm fascinated by, whether it's you, teigen, gisele to some degree, supermodels get famous, they get trolled a lot, and they fight back, they hit hard. you haven't been shy about doing that. is that hard to do? >> um, i guess it's not hard to do. whenever you feel passionate about something, and in this case, the something is myself,

it's not hard to defend yourself. >> i'm wondering about some of your endorsement deals. bobby brown is one of them, correct? do people come to you all the time with offers? and how do you think about where you might want to see your face, who you might want to invest with, you know, all those kinds of opportunities going forward? >> well, "sports illustrated" really gave me the platform to be able to launch my career and be involved with different companies or start creating my own because they gave me that name recognition. they were one of the -- they were the first magazine, i believe, that actually put the model's name on the image, where people actually knew who that model was. so it gave you a place to start from. and now i am able to pick companies that i'm interested in and, you know, being passionate about health and being passionate about fit and women loving themselves. >> apple is launching this show, this digital show plan of the apps. you have been the face of an app in the past, "game of war."

i understand that that ad campaign was really successful. but boy, i associated you with a video game for a long time. was that too much association of you with that? would you do it again the same way? >> you know, every deal i have i learn something from it. so, every aspect, there's positives and there's also negatives. and that was -- i think that it was one of the first -- well, for me, for sure, deal i had with an app. and it was a completely new formula for the contract. and i think maybe i would have done it differently in a lot of ways just because i guess i didn't really know even what the game was. >> real quickly along those lines, we do love to ask people, what's the biggest money mistake you'veman, something you've learned from as you've become more lucrative and had a flourishing career? >> i think at the beginning i trusted everyone around me, all of my advisers, and i have much more interest in it, in what's going on now. >> well, you've got a lot to manage, that's for sure,

especially now. congratulations again. >> thank you so much. >> on the cover. >> thank you. >> kate upton with us here at post 9. we're getting some comments out of the speaker of the house, paul ryan. let's get to that in washington. >> so, this will meet even more instability. and then on wednesday, the ceo of etna, another large insurance carrier, said that obamacare is in a death spiral, his words. here is what is important for us all to understand -- obamacare is not simply stuck in some kind of status quo, it is getting worse by the day, and it will keep getting worse unless we act. we need to rescue people from this collapsing law, and we need to replace it with a true, patient-centered system, one that gives every american access to quality, affordable coverage. that means more choices and lower costs. it means real protections and peace of mind. and it means returning your care to your control. patients and doctors should be making the big decisions, not

government bureaucrats. step by step. this is what our plan to repeal and replace obamacare will do. we look forward to making progress in the coming weeks and keeping our promise to the american people. questions? >> why do you think we're seeing so many leaks coming from this administration? the president has said that they will be caught. do you think or do you feel that those behind these leaks should be referred to the justice department? >> i can't answer why. i really don't know the answer why so many leaks are coming from the administration or from wherever they're coming from, but if you know, let us know. what i do worry about, though, is if classified information is being leaked. that is criminal. so, i think there should be an investigation as to the leaks of information leaving, wherever they're coming from. and if it's classified information, that is criminal and there should be a criminal investigation of these leaks. that does compromise our national security. >> to follow up on that, should the house intelligence committee

include in its inquiry an investigation into these leaks? >> the house intelligence committee is the proper place for this. they're the ones who get access to the sources and methods. and so, i do think it's appropriate, and all of these -- by the way, everything involving russia is what the house intelligence committee has been working on, looking at. and we've had an ongoing investigation in all of this. and so, yes, that would be the proper purview for something like that. >> do you believe mike lynn should testify before the house intelligence committee? >> i haven't given any thought to that. i'll defer to the house intelligence committee. >> yesterday, federal reserve chairwoman janet yellen testified on the hill that the border-adjusted tax would create economic uncertainty, and even in some cases weaken the dollar. what's your response on that? >> weaken the dollar? i don't know if i would agree with that. >> she suggested that. >> yeah. i think most analysts -- i think maybe you got that the other way around. >> what's your response? >> here's how border adjustability works. a lot of people -- there's a lot of confusion surrounding this.

we are one of the few countries in the world that do not border adjust our taxes. 160 countries currently border adjust their taxes. we're in the company of countries like north korea and somalia, afghanistan and iran or something like that. so, almost all other countries border adjust their taxes. and what that means is you tax based on if it was consumed in your country, not if it's made in your country. what america does, we tax people based on whether it's produced in america. and so, that means we do not tax our imports and we tax our exports, and we're putting american-made products at a huge disadvantage. in our tax code to outsource manufacturing that's really important to this country. that's not good for american jobs or american manufacturers or american growth. we're suggesting let's equal iz, let's be fair to ourselves and

treat them like we are our self. when we make something in america, put on a playing field with everybody else. let's take this tape recorder, and i hope i didn't turn it off. american-made tape recorder. this is an olympus. i have no idea where that's made. made in japan. oops. [ laughter ] i just want to explain this to you. all right. american-made tape recorder. japanese-made tape recorder. here's what japan does when they make this. when they send it for export, they take the tax off of it. then it comes to america and it's not taxed, and it comes here to compete against our good which is taxed. theirs was untaxed twice. when america makes something like a tape recorder, we tax it. and then we send it to japan. as it enters japan, it's taxed again to compete against their tape recorder. so, we're doing it to ourselves. we are hurting american manufacturing and jobs. we are putting a bias against making things in america and the tax code. that is why we think -- i hope i didn't screw up your tape

recorders -- that is why we think this is very important. this is good manufacturing policy. all right, respect to currency adjustments, it is obvious and mathematical that a currency adjustment would occur when we harmonize our tax laws with the rest of the world. for people who are concerned about it, i believe that there are things we can do and ways and means committee is looking into this, to ameliorate those concerns, to address those concerns so the transition from a really bad tax system to at best in the world we would get out of this is a gradual transition. i would also say that those who are concerned about this, i think they underappreciate how much better our tax system will be with this kind of provision. >> just a quick follow-up is that you're not -- >> you got me going on tax reform, sorry. >> but you're not concerned that the growing republican opposition to the border adjustment tax will jeopardize tax reform? >> no, i don't. look, go back and read the books written about the 1986 tax reform. it's going to be up, down, it's

going to be on, and it's going to be off. you're going to report 150 stories on tax reform between now and when we get tax reform done. we are doing tax reform. tax reform is going to happen. you know why? because it has to happen. america has the worst tax code in the industrialized world. it is killing economic growth. it is driving companies to become foreign companies. more and more and more, u.s. companies are going to leave this country because of our tax laws, or get bought by foreign companies and we will lose our seed corn, our employers. we will lose economic growth. this is existential to our economy. we know this. so, we are going to get tax reform done and there is going to be a whole bunch of drama you're going to enjoy covering between now and then. >> the affordable care act has tax credits. how is it different -- >> they call them refundable tax

credits. they're subsidies that say we will pay some people some money if you do what the government makes you do. that is not a tax credit. that is not free. a tax credit is you get the freedom to do what you want and buy what you need, and your choice. the affordable care act is the opposite of that. the affordable care act is the government makes you buy this -- and by the way, like i said, there's one or two plans left. there are zero plans left in some markets. they make you buy and then subsidize what you buy. a tax credit is a fixed amount. the affordable care act is not a fixed amount. a tax credit is a fixed amount that is universal to americans in the individual market to go buy the health insurance plan of their choosing. it is the opposite of obamacare, which is not a patient-centered system, it's a government-run system. what we're proposing is a patient-centered system where the patient designs their plan. the patient gets to decide what they want to do. the nucleus is the patient and her doctor versus the nucleus of

a system being the government and obamacare sick case. >> yes, thank you, mr. speaker. i know that you heard from secretary price this morning. i was wondering if there are any areas where you think the white house could improve communications with capitol hill? >> i should know. we're doing really well on that front. i don't know what you guys report, but we talked with the white house daily. our teams, our house and senate teams are in consultations with the white house constantly. we're very excited tom spris over there. tom price was one of the primary architects of our obamacare replacement plan that we rolled out last year, and now he is the secretary of hhs to execute and implement that plan. so, we're very pleased with that, and i think we have fantastic communication with him. better than i've ever seen before, actually. >> has the president shared his pick for labor secretary with you yet? >> no. i heard it's coming, but i have no idea who it is. yeah. >> just to follow up on that a little bit with the obamacare. i mean, obviously, there were democrats -- are democrats who

think the law needs to be fixed. republicans chose to go the reconciliation route, repeal and replace. do you think it's going to be possible to have the plan that you just spoke of without help from democrats? do you think that -- do you wish you had tried to go into this a little more bipartisan? >> we would love to have support from the other side. they have made it clear to us they're not interested in doing that. i think, jennifer, what the democrats -- just taking them at their word, they want to go down the socialized medicine path. they want to go down the government-run health care path. they want the public option, which is to basically have no options but a government-run plan. that is not something we're interested in doing. we think it will do even more damage to the health care system in america. and so, we believe in a patient-centered system where individuals have the freedom to buy what they want and not what the government makes them buy. and also, we think, jennifer, it's really, really important to have choice and competition in health care because that lowers cost and increases quality. that is the opposite of what obamacare does. obamacare restricts choice, it

denies competition. we have monopolies in a third of the counties in america. and as a result of the lack of choice and the lack of competition, you have much higher prices and fewer supply. >> do you have any concerns that there is a group of republicans in the senate who come from states where medicaid expansion was already accepted and they're very skeptical of any plan that takes that away from their states? >> yeah. i think it's 32 states, if i'm not mistaken, have medicaid expansion. mine did not. we're going to have to find a solution that accommodates each of these two concerns. i've asked greg walden, our chairman of the commerce committee, and he along with orrin hatch are working with governors to come up with a solution so that a state, whether a state chose to take the money or didn't, that going forward, as we give states more control, as we advance the principle of federalism by giving states more control over medicaid so they can have innovative reforms that we do it in a way that doesn't disadvantage either of the two

sides of that coin. >> last question. >> clarify on obamacare -- >> say again? >> on obamacare repeal and replace, the -- >> it's after the recess. it's coming. we're waiting for our scores, so i hate to tell you that cbo and joint tax are going to give us exactly what we want when they say they're going to give it to us. so, pending our drafting issues, we're going to be bringing it up after the recess. >> and that was house speaker paul ryan covering a tax reform, border adjustment tax, obamacare and more. our elon muay is in washington. >> my main takeaway from this press conference is he is determined to get tax reform done. he said it, "we are doing tax reform," can't get clearer than that. same message from kevin brady who was on our air yesterday, saying he was committed to this process. paul ryan brushed off criticism

from members of his own party, questions and skepticism over how this tax would actually impact businesses and impact consumers. however, before he can get tax reform done, they have to deal with the affordable care act, and that was really the message that he came with out of the gate. he said that he felt like there was progress being made in repeal and replace. however, there were some members of the conservative wing of the republican party who are calling for repeal to happen immediately, even before a replace plan might be fully fleshed out, so plenty of debate still and not a clear consensus within the republican party itself over how to move forward. that's the challenge for paul ryan. >> one question. it appears, especially after hearing from the speaker, that the house wants to be more aggressive on aca full repeal and border adjustment. is this in line with the traditional relationship between house and senate or not? >> the senate tends to be a little bit more moderate. it's a little bit more of a slow-moving body. i will say that senator orrin hatch reiterating yesterday that he believes that any obamacare

repeal should include a full repeal of all the taxes associated with it. however, that complicates any replacement plan because if they repeal the obamacare taxes, how are you going to pay for any program that replaces it? so, still plenty of questions on the senate side as well. >> elon moy in washington as we await the president's announcement for his next pick for labor secretary. making at statement at 12:30 eastern now, 12:30 for the president. we'll bring that to you live. take a look at where we stand. the dow is down 19 points, nasdaq and s&p also lower after hitting intraday highs for the sixth straight session. among the dow components hitting highs earlier, home depot, jpmorgan, ibm and cisco. we'll be right back.

i'm scott wapner. today on "the halftime report," we're expecting breaking news from president trump in the next hour. he says he's announcing his new pick for secretary of labor. the media may have a chance to ask questions. we are there live. plus, we are talking live with a top market-watcher at jpmorgan who says the rally at wall street is about to accelerate. and if you missed apple's run, can you find better opportunities in the supply chain? we'll discuss. "halftime" starts at 12:00 eastern. carl, see you in ten. >> sounds good, scott, thanks. marriott reporting a surge in earnings last quarter credited to the acquisition of starwood hotel and resorts worldwide. the stock hits an all-time high today since the spinoff in '93. susan li is with arne sorenson

for an interview. >> arne, good to see you today. beat on the top and bottom line and forecasting hotel revenue at maybe flat to 2% for 2017, but you said that you've noticed some positive trends to kick off the year. well, that's right. obviously, the markets have responded with tremendous optimism in the last couple of months. and are saying it expects a higher gdp growth rate in 2017 than we experienced in 2016. we're starting to pick up a few anecdotes that maybe support that. but they're anecdotes. when you look at the broad data, we would say we don't see the stronger gdp showing up, at least not yet. >> this year started off with the travel ban. since you talked about closed border and anti globalization as your two main concerns, what do you think of the executive orders signed? >> well, there are some parts of it which are not surprising. it's clear from president trump's election that there are concerns in the united states

about both security and about immigration policy. and it is certainly appropriate that president trump would try and address those things. i'm not sure this executive order was the best way to go about doing that. the executive order is viewed in the rest of the world as being probably much more important symbolically than maybe it was intended. being described, obviously, as a travel ban, a ban against muslims. but i think not only in the muslim part of the world. i think in much of the world it is being viewed as a warning shot that maybe people aren't welcome to come to the united states. so from our perspective, we would love to see whatever work has to get done around security or immigration. get done. get this behind us so we can go back out and say, you know what, you are welcome here. we would love to have you come visit the united states. gather your experiences, do business here, take your fond memories home. it's good for us. and hopefully we can get to that point really quickly. >> arnie, you mentioned a moment ago you don't yet see growth

accelerating. so are you waiting to see that before you plan investments? are you worried at all about being caught flat-footed if some of the sentiment and data pans out into stronger growth? >> well, our business continues to grow robustly. and i think when you look at -- we expect we'll open, for example, a hotel every 16 hours in 2017. that's a lot of hotels. and those are in the bag. they're under constructs. they've got scheduled opening dates. and we've got a big portfolio of hotels slated to open in 2018, right behind that. so the decisions, i suppose, that would be on the cusp are really decisions that are hotel-owning and franchising partners will be making about projects that would otherwise open in 2019 or 2020. this is a global dynamic. the questions exist here but in other parts of the world. and i think as people see this optimism that is maybe both -- best exemplified by the market itself, the financial market itself, that gives them some

encouragement. so even if they don't see it yet in the stayed and paid numbers, they have a bit more optimism than a few months ago which is a positive sign for decisions they'll be making. >> hey, arnie, it's carl. give us an update on cuba. do you worry about significant policy reversals in cuba? >> well, we are open with one hotel in cuba, four points by sheraton in havana. a second hotel we hope to open in 2017, which will be a luxury collection hotel right in the heart of havana. cuba remains a place people want to go see. obviously, we've got american airlines that are now beginning to fly in. increasingly, you hear stories from folks about how they've gotten there, they're planning to go there, how much easier it is to make arrangements to go to cuba. all of those are really good signs. i don't actively worry about this administration turning back the progress on cuba. you don't hear them saying much

about cuba. you don't hear a lot of debate in the political environment about cuba. i think for the lion's share of americans, they see this american/cuban relationship as a historically very interesting one, but also one that in some respects draws them to go visit that place. as opposed to pushes them away. and i think that forces a pretty powerful one. >> i just wanted to ask you about the strength in the washington, d.c., market. you've noted on the conference call, there has been a pickup so far in 2017. other people have noted that for this year, it looks like its going to be a hot hotels market with a new administration. has that been surprising to you? >> no, it hasn't. we have always believed that the first year of an administration is a strong year in washington. this january, of course, we had the inaugurate ral, which was a strong performance for our hotels. there were related events around the inaugural, as well, which probably also helped our business. but in the first year of an

administration, what you see is increasing activity, which is washington-centric. it's not just lobbyists, but it does include lobbyists, folks coming to try and develop the relationships with new members of the administration, advocate for whatever they think government should be doing, congress is in session more. lots of activity under way. so we would expect washington would be one of the strongest markets in the u.s. in 2017. >> susan, arnie, thank you guys. good to see you again. arn arnie sorenson and susan lee. "squawk alley" is back in just a moment.

getting some breaking news on the president's pick for labor secretary. eamon javers is at the white house. eamon? >> carl, that's right. nbc news's peter alexander has confirmed that trump's secretary pick will be alexander acosta, the dean at the florida international university now. he was an assistant attorney general under george w. bush. we're expecting that announcement now at 12:30 here at the white house and a hastily arranged press conference from the president of the united states. he just announced that while he was meeting with members of congress earlier today. so we're expecting that news her shortly at the white house. that's the name we are given, alexander acosta, the dean at florida international university for labor secretary, carl. >> we'll be hearing more from you in about half an hour. that press conference originally thought to be at noon. now 12:30 eastern time.

we'll see you then, eamon. meanwhile, markets still, a lot to digest today. >> certain stories that just aren't working well, like the avis car this morning, taking down the transportation sector by 116 points, just one of the contributors. yesterday that was a strong one. and overall markets kind of melting away here. 14 points lower on the dow, john. we have been on such a record streak for all of the averages that this doesn't amount to much yet. >> tivo up 11.5%. that's not something you see every day. kind of a fast-forward for them. network appliance also up better than 4%. on a day when cisco is up 3, as well. so some of that enterprise -- >> one of the best performers on the dow. what do you make of that? >> you know, i don't really know what to make of that. aside from when you see pretty good performance out of ibm, and you also see out of some of the other enterprise players, with currency stabilizing, better performance not entirely a surprise. i was talking to pete najarian.

>> wells fargo down a percent or more out of credit swooes. see if we get more downgrades, they have done well but a lot of them hitting their price objectives. >> does the valuation have to change? got to watch it. >> you're going to work more today? >> yes, we'll see you on the afternoon. >> let's get to the judge in "the half." carl, thanks so much. welcome to "the halftime report," i'm scott wapner. our top trade this hour, ready to run or run out of gas. the key question for investors as the major average set new highs today. how long can this rally really last? with us, joe terranova, steve weise, josh brown, pete najarian. we will get to the markets in a minute. first to eamon javers at the white house where the president has called that impromptu news conference, we're about 30 minutes from now. eamon, what should we expect to hear today? >> nbc news has kmplt that the