high. >> the mnuchin effect. >> the mnuchin effect. >> the mnuchin rally. >> quick mnuchin rally. >> they keep mentioning tax reform and we keep going higher. >> the squawk quick-mnuchin-lee, sorken rally. positive sentiment again today. that would be ten straight. melissa, thanks for being here. >> pleasure to be here. >> we'll see where the day ends up. see you later today at 5:00. make sure you join us tomorrow. "squawk on the street" begins right now. it will take a couple years to get growth, but we're committed in this administration and you can see this in the markets. you can see the stock market's up, you can see the dollar's up. there's a lot of confidence in the trump administration and in the desire to invest in the u.s. this is a very competitive place to do business. we got great companies. and you see that reflected in the markets. treasury secretary steven mnuchin this morning on cnbc. good thursday morning.

welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. markets reacting tobeck ki quick's interview with the treasury secretary in which he covered a lot of ground, taxes, china, interest rates. we're going to get to all of that along with earnings from tesla and retailers. europe pretty mixed this morning. benchmark yield remains 2.4 although gold on the cusp of 12.50 today. our road map begins with tax reform, regulatory reform and the future of the mnuchin rule. the treasury secretary talking the trump administration's economic policies in another cnbc first. >> plus, the historic run for stocks, futures pointing to a higher open. the dow now on track for its tenth day of gains. that would be its best record setting streak in three decades. >> and the ceo president meeting manufacturing ceos for a jobs and economy brainstorming session at the white house. we'll take you there live. but we want to get right to our own becky quick who sat down with steven mnuchin who sat down

in first interview since being named secretary for the united states. good stuff, becky. >> thanks, carl. you know, tax reform is probably the top issue markets have been concerned about. a lot of questions because the border adjustment the house plan has in it is not something that looks like it will necessarily fly in the senate. has a lot of people wondering what happens to tax reform, how they pay for it because that raises a trillion dollars. the good news when we talked to him about this morning from the markets perspective asked whether their plan is revenue neutral. he talked a lot about what has to happen. here's what he had to say. >> one of the issues when you talk about revenue neutral, there's going to be the scoring junk committee uses and then our own internal views at treasury and the administration. my guess is that our growth assumptions will be higher than what they use to score the plan. again, these are the types of things we're looking at. we're running a lot of numbers. i believe you heard me we believe in dynamic scoring.

>> dynamic scoring and where the administration sets the rules not necessarily watching the cbo, all bets are off to what you're finding with these things. if you see 3% growth gdp or better as mnuchin said he is expecting to see at some point soon, then you can obviously use all those measures to cut taxes without cutting spending quite as much. the other thing we talked about this morning is whether the wealthy can expect a tax cut as well. mnuchin made a lot of headlines when he joined us on cnbc back in november and said that he did not expect the wealthy would be getting a tax cut. their tax rates would drop, but he thought in the end they'd be paying just as much as in taxes because of loopholes being closed around some of these issues. he sat down with us this morning and commented on that controversy. >> i actually think there's a rule. i think during information got named the mnuchin rule. i was very keen on that. there's a volcker rule and a mnuchin rule and a buffer rule so i have like i have good

company. like i said before, we're primarily focused on a middle income tax cut and simplification for business. and what we are foe kulsed is that on the high end if there are tax cuts that they are offset with reduction of deductions and other things. so it's something we're going to carefully look at. and when we come out with the plan, we'll come obviously out with the distribution and how it impacts people. that's something we're very focused on. >> now, president trump just yesterday saying that he expects that they'll be rolling out some sort of tax plan in the early to middle part of march. not a lot of details yet, but this today gives us some bit of a roadmap of how you might expect to get to that timeline, being trying to get something passed before end of august before the august recess takes place. carl, back to you. >> becky, don't go anywhere. we want to toss this around with david and jim. jim, one discussion he had with becky was about longer structured bonds when it comes to government debt. he talked about 50, maybe

100-year. let's take a quick listen to what he told becky a few moments ago. >> sure. >> we're not ready to make any formal announcement on whether we are going to have a 50-year or a 100-year, but i have said this before. i think it's something that we should seriously look at. i've already begun to talk to the staff about looking at that. again, we'll reach out to the market, investors, different people, but i think it's something that is a very serious issue of whether we should explore. whether we can raise 50 or 100-year money at a very slight premium. >> you've been talking about that for seems like years. >> i know. i mean, i wanted the 50-year make america great bonds. i wanted to be able to raise $500 billion with that. i think they'd be snapped up. i think if you looked at the yield curve you'd say wait a second, everybody says the economy's getting better and yet the ten-year doesn't go -- the rates don't go higher. kind of a nice opportunity. i love the fact we're market to market.

look, mnuchin versus let's go back to jack lew. okay. previous treasury secretary. this is a treasury secretary who is not only uniquely from wall street, but he speaks a language that is more sophisticated than most wall streeters. he recognizes the yield curve, he recognizes what could be an opportunity for the government. that's new. to have someone that savvy. it's like gary cohn. i mean, if you get these guys out there, they are like what bob ruban did when he first became secretary treasure with clinton. he said i think that the euros -- he had them all short the dollar versus the euro and then bam sent the dollar straight higher. you're playing with some guys who really get the curve. and they're going to bring what is going to be the cheapest piece of paper they can for the government. >> right. i think from the corporate point of view people who run companies, big and small, had to be hanging on every word that mnuchin was sharing with becky there when it came to tax reform of course.

and specifically i know, becky, that border adjustment destination based tax with a border adjustment is such a key part of any potential reform plan. and of course as you brought up to him a key area of some debate. when he said to you, becky, we think there's some interesting aspects, we think there's some concerns about it, it's very much unclear about what exactly that means in terms of where the administration will come down or when we're really frankly going to even hear from them in terms of their plan, i guess, for lack of a better term given the president has said a number of things that seem to foreshadow hearing about it very soon. >> david, i think he was intentionally illusive on that point. they're not going to get pinned down on anything just yet until they can get some details. he said, listen, we're listening to the manufacturers, listening to big business, small business and retailers, that might be a key too small business how they might relate. border tax adjustment is great

if you're a big business, but not a small business that will benefit from some of those issues out there. that is a key. i think going back to this idea of dynamic scoring being able to set their own guidelines for where they see growth, those are all to me pathways that you can say we can do this without a border tax. obviously nothing's set in stone at this point, but to me those were the markers that kind of jumped out. okay, we're going to do this with or without a border adjustment. >> yeah, but are you going to get everybody to go along with your ideas of growth to be able to dynamically score it so that you're going to meet the objections of the deficit hawks. >> right. >> some of which still remain in the republican party as far as i was last aware. >> yeah. >> they're still out there. this is going to be so interesting to see. >> on the republican party and then the people who've basically said no way for border adjustment, i counted at least six or seven republican senators who would not go along with a border adjustment. guys like tom cotton who's got walmart in his state. it's pretty wide. purdue also somebody saying they're not going to do this. lindsey graham saying you

wouldn't get ten votes for that in the senate. that's the complication with the whole fact, but it does sound he made it sound like they are listening to all points. and they're trying to find some way to come to some agreement to get all those people on the same page. >> well, we know how the bond market is reacting to some of that. we also talked more about how the stock market's been reacting. as we said at the top of the show nine straight record closing highs on the dow. we haven't done that since' 87. and becky asked the treasury secretary whether or not the stock market is the white house's report card. >> obviously the stock market has rallied significantly since president trump took office and actually since the election. and then again since he took office. do you view that as a report card? >> absolutely. absolutely. i mean this is a market to market business and you see what the market thinks. >> if the market were to pull back, is that just disappointment in things not getting done as quickly as market anticipated -- you've watched markets for a long time. do you expect a pullback at some

point when you see things move so quickly? >> i've always focused on not day trading and where they are day today, whether the market goes up or down on any given day, i've givenen up figuring out why that is. >> smart man. >> but do i think that, you know, over the course of the year we're in an environment where there's very attractive investment opportunities in the u.s. and i think that's reflective of the administration's goals and what the market thinks of it. >> thinking back to a conversation we had during the transition whether or not the dow was the president's neilsen rating, as you said. >> i think it is. look, it's very interesting because he says on one hand we're not into market to market, but second we're not going to look at day today, market to market would apply hour to hour. listening to these guys, work with some of these people at goldman sachs and i'm saying, you know what, they are not only concentrated on where the markets are but they are so uniquely different from the

previous gang. which really did not care at all about the stock market and thought it was a rich person's game. these people are not afraid about talking about the stock market where felt the previous administration was like we're not going to let that rich person's gauge be a determinate of anything. what was a shame for obama the research gauged him pretty well. talk behind the scenes with obama people -- oh, i actually did that? always like why don't you take some credit. the markets were pretty good. and they're always like, no, we don't want to be affiliated with the stock market because the stock market is for rich people. these guys are rich and they think the stock market is for everybody. interesting and different perspective. but when i listen to mnuchin, i say all right, well, he didn't say anything that would drive the market down. he doesn't want the ratings to go lower. but at the same time i look and say, okay, who's president trump meeting with today? oh, meeting with dow jones industrial average again. >> in fact, another meeting of manufacturing ceos at the white house. at 10:30 they're all going to meet with the president and give

some opening remarks. as jim says some of the ceos include dow's andrew liveris, alex gors ki of j&j, mark fields of ford. he's already met with retailers, drug companies, automakers, airlines, unions. in this case, guys, they're going to break up into groups apparently and try to come up with policy suggestions on trade, on job creation, on regs. >> this is when they're going to have to go upstairs and someone's going to be fired. it's inconceivable they all get to stay, right? i remember being there as a judge. you had to pick someone. i hope it's not mark fields. >> are you suggesting this is a tv show for the cameras? or is work getting done here? >> they're supposed to come up with these proposals in what, an hour? how is that supposed to work? >> yeah, 15 minutes. you had 15 minutes in "apprentice". >> i assume they were able to do prep work prior to coming. >> i would like to see teams come up -- i'd like to see some guys really going at it, but i

think that in the end that trump really uniquely did like the style of the apprentice. >> yeah. >> i'm not mocking him. >> you're not joking. >> no. it's a style where you make teams and you come up with ideas. and it wasn't a fatuous experience in the sense there were things that came out of it. i do think there are too many people at these meetings. that's why i'm being a little facetious, but he needs to get down to a working group. there's too many people. if he got people who really focused -- >> as mnuchin told becky, he's got 100 people working on tax reform and treasury running numbers all the time. flat out. >> right. well, if that's the case what he needs to do -- this is for free, but he needs to do u.s. government bonds. savings bonds. need to bring back savings bonds for infrastructure. that's my idea. and when it happens, just like i said -- >> that's one last point to becky, things like infrastructure. a lot of people talking about your interview and what a

backseat they took. >> those are not subjects he said a whole lot on. he did say the infrastructure tied that to the long term bond that could be something if you were using a 50 or 100-year bond. on housing he says he's committed to the changes and they're sitting down and continue to follow through with this. but i think tax reform is front and center. he understands that that is what businesses and the markets want to see. and i think that is front and center as far as he's concerned. >> yeah. front and center. i think he wants to see these guys in there pushing their own congress people. by the way, it would not shock me at all. he would say to you, do you remember how you have to raise money -- give money to a cause for "the apprentice"? i think he will say to any one of these guys whoever hires the most people, good things coming. greg hayes is in there, united technologies. >> they survive to the next meeting. >> yes. >> jim knows. >> and finally a titanic clash and numbers are going to be huge. huge. >> jim, i meant to tell you yesterday, i love the high and tight. i need it out here today because it's humid out here.

>> she said that's it with the hair. >> i like it. >> she wanted to go to jason -- >> looks good. >> i said if i were jason stathem. >> even a more dangerous man. >> she said i wanted high and tight. >> becky, thanks again. when we come back, some stocks to get to including tesla up after earnings last night. more on the mnuchin interview, what we can take away on the president's plan for tax, trade and regulatory policies. we'll break that down and take another look at the premarket. as we said dow nine straight record closing highs for the first time since '87. say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $6.95 per trade? uhhh- and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering?

what's with all the questions? ask your broker if they're offering $6.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

tesla's out with earnings reporting a wider than expected loss, 69 cents. but revenue did beat forecast. company says new model 3 sedan is on track for production later this year. separately elon musk announced the departure of cfo jason wheeler in april to be replaced by the former cfo. shares are moving lower in the premarket. most of the focus though on this model 3. >> look, this was a hilarious conference call frankly. only could a guy have a billion dollar negative free cash flow, declining gross margins, $16 billion in debt, suddenly departing cfo and everybody was like, hey, at one point the stock was up big. the conference call starts with

morgan stanley's adam jonas asking whether he's going to leave to be the leader of the planet and put a man on mars. >> or maybe those seven new planets they just found 40 lightyears away. >> but then of course what happens he's going to raise capital, the way he puts it, listen, don't want to get to the edge, but they did 6.5 million shares at 215 in may 2016, up 70 points. one of those conference calls where i found myself saying bezos did not have the guts to do this call. he had a lot of guts, but not this one, right in your face. there was uaw, yeah, bring them on, we have the best benefits of all. gm needs subsidies more than we do. this was it. this was basically, you know, we don't even care. by the way the cfo we're bringing back old cfo. it's even better. this one was one for the books. may i suggest people read this conference call to understand what a guy is doing to be able

to say i want your money. 500,000 cars coming. stop asking me silly questions. i'm a bigger thinker than you are, i'll see you on mars. >> but it works. >> totally. >> i mean, you've made the point many times, he's a great salesman, but he does follow through with -- i mean, who was the last guy to start a car company that actually is going to produce that many cars? >> look, there's an undercurrent. the undercurrent is there's tremendous demand for the cars. of course at one point they had 400,000 for the model 3. no longer giving you the demand list. says we're not going to play that game. but this would not work if he weren't selling a product that people want. and i think that that is behind a lot of what makes this thing go. amazon had a product that people want. people want tesla. so he can do it. he's the two -- amazon was incredible demand. i bet if he could sell a million car ifs he could make them. >> unlike amazon i would argue the calls are more polarized. ron saying you're going to forex

your money by 2020. >> yes. >> we had one firm reiterate 60 target. remember that last week? and you've long said it's a cult stock. >> it's really hard to figure out what it's worth. if he makes 500,000 cars -- at one point someone says aren't your gross margins going to be bad on the new car. he says they're going to be horrendous. i'm a guy with higher gross margins that's not exactly what i want to hear. at the same time go to the great tech companies say, yes, we have negative cash flow right now because opportunity's so great we're not going to pass up on sales. >> not just about cars anymore either. they own solarcity. >> produce money. david, i'm asking you, you need to suspend a lot of your critical judgment and faculties when you read this. i'm asking you to do that. just as when he said i was most likely a simulation, i ask you to approach this in the same way approach the spirit of calling me most likely a simulation. 50% chance. >> that's very high. >> we're going to hedge our bets

and assume you're real for now. >> yeah, i don't know. i don't know. the brian krzanich said i was -- >> guns, those guns are real. >> hardly. augmented reality is me. >> we'll count down to the opening bell and take one more look at the premarket busy thursday morning shaping up. more "squawk on the street" from the nyse straight ahead. ♪ we're drowning in information. where, in all of this, is the stuff that matters?

the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. ♪ to err is human. to anticipate is lexus. experience the lexus rx with advanced safety standard. experience amazing. ♪ guyhey nicole, happening here? this is my new alert system for whenever anything happens in the market.

kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all? not only that, you can act on that opportunity with just one tap right from the alert. wow, i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade. all right. we're back. we got about five and a half minutes or so before we get to the opening bell this morning. it's thursday already. week's gone by fast. plus we had the holiday. you want to talk a little retail. >> yeah. l brands, this is leslie

distinguished merchandiser, victoria's secret down for the forecast, bath & bodyworks down mid single digits. dramatic guide down from just a few weeks ago. as they said in the call off to a slow start with challenging mall traffic. 10 to 15 point cut in 20 days. this is something matthew boss at j.p. morgan has said over and over again, do not trust the mall. do not trust anything in the mall. and this is a sign. victoria's secret is pretty steady business. amazon coming against them and obviously there is traffic that's lower, but if you look at home depot's call that's where they're still going. they're spending on the home. if it's apparel, david, it's just not there. i mean it really is rather extraordinary to see those declines on a very consistent retailer that's done a good job over the years. so i would be very concerned. look over your portfolio and saw upgrade of vanity fair, vf, yesterday. other than maybe sneakers and there i'm thinking nike, i don't like this group.

wow. this was very -- this was a very worrisome call. good balance sheet, but very worrisome call. >> we'll be keeping an eye on other retailers as well, jim, as we head to the opening bell. we're about four minutes or so away from that. we'll be back on "squawk on the street" right after this.

this is where i trade andrs. manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in about a minute's time. busy thursday with the treasury secretary of course on cnbc this morning, the president meeting with some manufacturing ceos, a lot of earnings to get to. one thing we didn't hear from with becky a few moments ago was the treasury secretary's answer on border adjustment and the degree they're looking at it, not looking at it with regards to the house plan. here's the secretary. >> i think that there is a consensus on the majority of where we are on tax reform. we're looking closely at the issues on the border adjusted tax. i've spoken extensively with paul ryan and with chairman brady on this. and we're looking at it. we think there's some very interesting aspects of it. we think there's some concerns

about it. but i think one of the things, you know, we are all committed to do is make sure there is a combined plan that is a plan that is the administration's plan with the support of the house and the senate that we're all working together on one plan that gets passed. >> markets going to react to that at the open. there's the opening bell. and the s&p here at the bottom of your screen. santandser and bank of montreal and elk horn but, guys, having a tax plan that's not revenue neutral some say okay if you score it the right way. >> well, i think one of the reasons why interest rates are actually going down is a sense that, listen, border tax is out. look, they got to find some revenues. >> that was the most important interview for the market. >> and the august timeline.

>> yes. and the august timeline and sticking with that and making that a specific point that they want to try and get this done. you know, there is a great deal of dialogue going on right now amongst fortune 500 companies and all of their advisors in terms of how do we play this, how do we figure it out, what do we actually model here in terms of expectations. i don't know though what the give and take is on the border tax adjustment. can you fashion it in a certain way that it will still raise a decent amount of revenue but not penalize retailers quite as much? is there a sort of minimum that will go -- that doesn't need to be taxed before you reach some sort of number? you know, going to be very interesting to see where they end up here. and then to becky's point about all those senators and we've made it many times, i don't know where the votes are. >> i don't either. i mean, i think when you look at retail, you've got -- well, we talk about walmart, okay, but

home depot, when you get these really big retailers, they tend to be very important to community. target, minnesota. now, some of these democrats it doesn't matter, but i'm just saying retail has a lobby. and the lobby is not to be sniffed at. they're very powerful. >> right. >> very powerful. >> aca remains a big fat obstacle. at these town halls this week that's all that's being talked about. there's also bill crystal this morning writes reagan in '81, he just cut the rate. they didn't do comprehensive reform for five more years. is that the simplest plan? >> i think there's a lot of people, carl, who believe if you really had to nail them down by the end of this year what we end up with is perhaps lower rates, some sort of repatriation deal and that's it. >> and that's -- i totally agree with you. that is the real undercurrent that you're going to have a reagan like move in the end. i remember studying reagan's recapture proposal.

it was like in '84 -- '82 and '84 and it was like the only wrinkle that was really difficult because otherwise it was so simple that everybody understood it. everybody had a real -- i did my taxes back then. >> right. but he's still talking about corporate and individual. >> right. >> which raises the bar even more because they are linked and your point's a good one, carl, it's also linked to the aca in part when it comes to reconciliation and argue that it's going to be revenue neutral. they're connected. you've got to get those cost savings from repeal and replace, which i mean you tell me how long is that going to take? >> kudlow went to town this morning saying let's just do corporate, but others respond it's hard to do corporate without small business, and it's hard to do small business without individual. they all interconnect. >> 80% of businesses are passthroughs. it gets complicated to not do both. >> but trump has stood for simplification along the whole way. that has been the major theme,

simplify, deregulate and simplify. so where do we get this incredibly complicated procedure? who's going to push that through for his side? >> the treasury secretary. >> treasury secretary mnuchin. >> are bonds underestimating what may happen? >> i think there's strong demand for our paper because of what first of all there's a lot of areas around the globe starting to heat up. so i don't trust there are low rates also a lot of political turmoil. i look at the italian rates and french rates and german rates and think are you kidding me? those should be so much higher than us. so i look around the globe and i really say to myself, you know what, if i'm a money manager around the globe, do i really want to be in those countries? >> those rates on your screen don't jibe with this front page today, right? >> no. >> i mean, after getting -- >> no, you would get a flat yield curve if they take them up, which would signify we're in a recession which i certainly don't think is the case. >> is that what you took away from the minutes? >> i thought they were saying

business is pretty darn good. you know i'm a marks rate hike guy and i think they're going to fall behind if they don't do a march rate hike because of what you hear from a home depot and a walmart, what you hear from all of the numbers, fabulous cfo from home depot will tell you about a multi-year spending pattern that's really starting to gain steam. the auto companies, i know you have worries about self-driving cars but the numbers are really good. there's a lot of spending going on, hiring going on, rates are too low. rates are just too low. >> get to a few stocks here. square, jim, is at an all-time high. this is a 15 -- almost 16% gain. >> i love the quarter. what can i say? they're growing it. square's good. so my career advice has been ignored so far every bit of jack dorsey. he's totally ignored me. given me the hand. talk to the hand. i would say he could declare victory, move on from square and

go right to twitter. because this was that good a quarter. this company tremendous momentum. strong -- 30% revenue growth, produces 60% ebitda, it's like, jack, this is it, man. you just did it. high-five me and move over to twitter. >> so he can leave square. >> oh, he's done. he squared square, now it's time -- >> he's done? he's probably saying i'm just getting started. >> no, no, he has to listen to me. he just has to listen to me. >> he's not going to listen to you. >> no? >> no, he's not. >> my dogs didn't listen to me last night. i got up because there were someone drilling on the block buggi bugging everest, so i got bug, everest, dorsey, no one listens. >> it happens. >> get a goldfish. >> you mentioned l.b. at the board a few moments ago. kohl's also $1.44 beats by 11. >> how do you like that? >> comps see for the full year

flat to down 2, which is mostly below the range. >> but a dividend boost. comps in line. not horrible. there you go. it wasn't horrible. how about that for a reason to buy something. >> i'll take it. not horrible. sometimes that's all you need. >> like macy's an inventory question there. and they do look to trim inventories for the rest of the year. >> i really think you just got to stay away. you had that retail burst, but we have retail winners and the retail winners are really clear. it's home depot, it's walmart. yesterday tjx, my travel trust owns it. fabulous quarter. stock didn't go up initially until people started realizing they have a great runway, good article in the journal about how great tjx is doing. but that's, you know, about it. >> the fallout from unilever's strategic review announced yesterday, which may result in them doing something as in something external continues to move some stocks.

colgate is up again, guys, 74.46 up another 1.3%. >> interesting. >> you got a bunch of analysts now wading into this using the name outright saying maybe they try and buy colgate. who knows. unclear. certainly not clear -- don't expect anything to be happening now. but no shortage of speculation about what unilever might do including names such as that. >> well, look, i think when you get those bankers going. >> get the bankers going they're going to certainly try and focus for you on what might happen. but they've got decent margins already at colgate. we'll see. >> yeah. >> unilever maybe will. >> last quarter wasn't that good. emerging markets, everyone wants to be in emerging markets but they weren't that good this time. i don't know. something's going to happen. >> one last point on

restaurants. yesterday it was texas roadhouse, today it's jack, jim. 7 cent miss, revenue shy, comps disappoint at qdoba. >> now no one's buying my thesis here, but i'm giving it. i gave it on the way down. i felt the qdoba neither jack nor chipotle indicated, i thought qdoba picked up because chipotle got in trouble. i think the return of chipotle is hurting qdoba. and anyone who eats at both places would know it is somewhat interchangeable although i know the guys at chipotle would hate me to say that because they're natural organic, but i think this is the return of chipotle. the barron's piece saying chipotle going to fall 30%. chipotle is just five months now from when they're going to be able to annualize and really good numbers. this is about chipotle coming back, not about jack falling apart, although they did mention rain. it rained. didn't rain at chipotle. >> you've been saying the timeline for people forgetting about chipotle is year and a

half. >> american public is very forgiving. >> yeah. >> very forgiving. good public. >> good public. yes. >> better public than other publics. >> so far. for a long time too. >> yeah. long tradition of public. >> yes. >> thank you. >> with all that chevron is leading the dow higher as oil gets closer and closer to 55. let's get to bob on the floor. hey, bob. >> good morning, carl. happy monday -- excuse me, happy thursday everybody. and we need oil stocks to move up. boy has it been a mess for oil so far this year. let's look at the sectors 4-to-1 advancing to declining stocks at the open. another new high for the s&p 500. finally energy is leading. we've been talking about what a mess it's been for the last several weeks. serl also up. but as you saw rates down a little bit this morning, utilities come to the fore, banks underperforming as well this morning. hope you all saw becky's interview with steve mnuchin, treasury secretary. made a rather extraordinary claim said the stock market

rally was a report card on the trump administration performance saying it's a mark to market business. live by the stock market, die by the stock market, but certainly there have been two factors powering the rally. we have discussed them extensively here on cnbc. number one certainly is the trump trade, tax cuts, infrastructure spending and regulation, but there's a second power called reflation trade higher rates, synchronous improvement in global economies, this was before the trump victory, this started in the summer of last year. this also has been going on and also adding fuel to the rally overall. what we're seeing today of course is a continuation of the trends that we've been seeing in the stock market. people have been worried about whether or not the market's going too far too fast. we're not seeing any signs of deterioration. new highs every day keeps broadening out. today big names, united technologies, apple, j.p. morgan, cisco, all new highs. the advance/decline line, accumulative market, stocks up versus down every day keeps

hitting new highs. credit conditions remain favorable. no immediate signs of technical breakdown in the market. there has been problems in a specific sector. we've talked about it for a week and a half. that is in the oil sector here. we have seen the s&p energy group down almost 4% for the year. while the s&p 500 is up almost 6%. that's a ten percentage point divergence and you can't blame it on oil. oil's been fairly steady for most of the year right now up about 1%. we've talked about problems with exxon. yesterday exxon was not far from a 52-week low here. it's been down 10% for the year. there's a one-year chart for it. you see it's up a little bit today as oil is on the upside. problem is simple, analysts are expecting earnings to go up about 75% for exxon this year but much predicted on oil getting into the 60s but the market is starting to doubt that might happen here. this morning they're writing down almost 15% of their oil reserves from the books, some canadian oil sands. it would be too expensive to extract that at the current

prices. that's a very big writedown, about 15%. number two problem is remember they are the largest natural gas producer in north america. you know what's been going on with oil -- excuse me, natural gas below $3. warmer weather, that happened yesterday, that's a problem. and finally we have the fracking production increases, a lot of discussion about that that may very well limit the moves in oil towards getting towards $60 where a lot of these companies need to be to get the earnings up to where they're expected for 2017. morningstar just had a comment out about this. i think they echo a lot of sentiment on the street. major increases in shale activity now have u.s. production firmly on a path of rapid growth. this growth plus the eventual supply increases from opec is likely more than enough to erase any market tightness and throw crude markets back into oversupply. and i think that is the primary overhang on exxonmobil as well as the rest of the oil section. but today remember oil stocks to the upside. dow's up 30 points, s&p another

historic high. back to you. >> thank you, bob. i'll take it here. let's head to the bond pits now and join rick santelli at the cme group in chicago. rick. >> good morning and thank you, david. two-day of tens a bit of a slow steady drip. year-to-date of tens really tells you what we probably already know. look at all those bottoms. you have a bottom at 2.34, 2.32, 2.33. looks like we're testing the lower bounds. tens minus twos the spread, it has been flattening, again as you see on this chart. another three or four basis points lower might be something to really pay attention to. let's look at europe. let's look at europe's paper. we know that their two-year was record breaking in terms of minus 90 basis points. you see it there on a one-week chart. now, if you look at 20 years, i just love this chart. of course we know you're not going to see a low rate, but it isn't only twos. if you look at the coupon curve in europe, twos, threes and

fours are making new all-time low negative closing yields. but it stops at the four-year. five-year is getting close. we'll continue to pay attention. you know, the desk had some great conversations today. jim, kudos, you talked about, hey, there's actually a lot of buyers out here. look at a 90 basis point minus two-year and it's not hard to figure out why. that puts the relative value trade in capital letters. but there's also a lot of channels that want to push rates higher. it's just they're a bit swamped now. think about it. what's going on with trumpon nomics, there's a lot of channels. treasuries aren't easy, they might not be dissing, they may be swamped but other factors keeping rates low. if we continue to pay attention what's going on in europe that makes mario draghi and what he's going to do on quantitative easing so important. and finally today the dollar

index dripping a little bit yesterday and today, by the way we all talk about as if it skyrocketed, well, it did in november and for a part of december, but actually down on the year in '17. we're at just under 101 as we speak. it closed at 102.21 at the end of '16. but the one-week chart is interesting. yes, it's fallen, but for the most part it jumped a little bit two or three sessions ago. you really want to pay attention to this violation of 101. jim, carl, david, back to you. >> little love from santelli there. >> that was great. total agreement. and it's terrific. my dad, my late dad loved rick more than me on these issues. said why don't you listen to him more. >> when we come back, a lot more on secretary mnuchin's comments on cnbc this morning including the plan for tax reform. we'll get to the white house where the president's meeting with that long list of ceos. talk about what's on the agenda and get you those comments as soon as they come in. dow 20,800, back after a break.

♪ ♪ ♪ ♪ whether you're after supreme performance... ...advanced intelligence... ...or breathtaking style... ...there's a c-class just for you. decisions, decisions, decisions. lease the c300 sedan for $389 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

♪ heigh ho heigh ho ♪ ♪ heigh ho heigh ho it's off to work we go here's to all of you early risers, what's up man? go-getters, and should-be sleepers. from all of us at delta, because the ones who truly change the world, are the ones who can't wait to get out in it.

we're in an environment where we are at historically low interest rates. >> uh-huh. >> and i think if you look at this on a historical basis, we will probably have low interest rates for a long period of time. but that doesn't mean that there within that there's not the context that interest rates can go up. and you've seen the fed signal that. so, again, i'm not going to speculate on what they're going to do, but my comments are really about where we are not relative to just today but where we are relative to where interest rates have been over a long period of time. >> that was treasury secretary mnuchin on with becky earlier talking rates. kudlow's takeaway from that was if you believe or suspect they'll be a showdown between the president and yellen, mnuchin essentially told you no, that's not going to happen. >> yeah, i mean, this was one of the -- unbelievable interview. because when you came away from the interview, this was not a confrontational, this was not a -- this was an interview that calmed you, i felt.

just seemed like gary cohn on labor day, said it's going to work here. we have all business people, it's going to work out, don't worry about rates, don't worry about yellen, we're not going to bust the budget. >> label china a currency -- >> yeah, good comments on barclays. look, there was no -- there were no bombs thrown. >> yeah, but there were no specifics. >> oh, definitely none. none. >> right. so by that very nature there's nothing you can latch onto one way or the other. >> well, he had specifics when he was on squawk earlier about taxes. >> he did. >> and fannie mae. >> he did, he referenced the mnuchin rule. this time fallen back as priority judging from his comments. >> yeah. so this was -- i think there was -- i remember once i interviewed bob rubin for the street and he said, listen, if there's any news coming out of this then you've done it wrong. there's no news about -- you're not going to get me to say anything newsworthy.

i said why are we doing the interview? because you wanted me to be interviewed. >> i had the same experiences with him. >> newly appointed officials learn that early and often the hard way. >> i know. >> bernanke. >> oh, all of them. ajit pai yesterday didn't say much either. >> no, he didn't, but he tweeted he had a good conversation with us. wasn't that nice? >> he is. >> he's wicked on twitter. he's very good. we'll get stop trading with jim in just a moment.

i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise

it's time for cramer and stop trading. >> oh, boy, they're coming after nvidia big time. bmo this morning did take it to a sell. saying amd is catching up. perfect storm. there's an intel ad, i had a feeling brian krzanich was going to reveal something like this saying the cloud runs on intel. everyone wants to hate nvidia. the stock that was up the most last year. let them come out and do it. let the shorts come out and do it. a lot of people saying, jim, you got to go into broadcom, well, i've been liking broadcom forever. but nvidia, listen, guys are shooting at it because it has a great handle on gaming, great handle on data centers and unbelievable on autonomous cars

and autos in general. let it come in. let all these guys downgrade it and say it's no good get all the hot money out of the stock because man is there ever hot money in that thing. >> yes. what's on "mad money" tonight? >> waste management, new ceo there, james fish, yeah, we're going to talk about a couple of industries that looked like they had failed us really cost people a lot of money. can't wait to get going. this is one of the most -- bizarrely exciting moments in the market in ages. i mean, incredible. it's incredible exciting time. it is. >> i believe you. >> he's doing that. >> i know. jim, we'll see you tonight. "mad money" 6:00 p.m. of course we're going to continue to dig in on that interview with secretary mnuchin. take you live to the white house as ceos sit down with president trump in a moment.

is it because so many go after it the same way? chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential

uh, yeah. what is?r, larry. the whole wheelie thing. what do you mean? i just got this baby to get around the plant floor. right, but now ge technology monitors every machine. yeah, it brings massive amounts of information right to you. so you don't need that. well, it makes me look young and uh..."with it." time to move on. oh i'll move on... right into the future. ...backwards. you're going backwards. the future's all around us! not just on your little tablet, my friend. this is where i trade andrs. manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do.

visit learnfuturestoday.com to see what adding futures can do for you. good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with david faber and mike santoli as sara

eisen is at the white house, we'll talk to her in a moment. meantime dow is 20,808. oil having a nice run as well. >> our road map begins with the meeting at the white house. president trump is hosting manufacturing ceos and executives to discuss deregulation, workforce training, infrastructure, taxes and trade. >> stephven mnuchin on the reco saying he wants to see very significant tax reform passed before the august recess. >> and the dow and s&p hitting new highs with the dow looking for its tenth straight record close today. >> we're going to dig into those mnuchin comments in a moment, but first get to the white house. the president set to meet with manufacturing executives this hour. among the ceos attending dow chemicals andrew liveris, jeff immelt of ge, greg hayes of utx, alex gorsky of johnson & johnson, mark fields or ford and our sara eisen is outside the white house with more. >> reporter: good morning.

yes, the ceos are inside the white house right now. they're talking specific policy ideas. as we understand it they're broken into different working groups alongside some of president trump's cabinet secretaries, that includes treasury secretary steven mnuchin who made his way next door from the treasury. also commerce secretary treasure designate and also advisors for president trump along with gary cohn and ivanka trump. the subjects here include tax and trade, regulatory reform, infrastructure and workforce of the future. this is all under the umbrella of making american manufacturing great again, bringing back american manufacturing jobs from overseas and making the industry at large competitive. and we've got ceos here from a wide swath of industries across america's manufacturing. you mentioned some of them, carl. i'll mention some as well. michael dell of course of dell, kent frazier of merck, marillyn

hewson, the chair of the group is andrew liveris, who is the ceo of dow chemical. and remember this group, the manufacturing council, last got together a little less than a month ago. it was president trump's full working day at the white house and that sent a clear signal that he intends to fulfill his promise made on the campaign trail and post campaign as president to bring american manufacturing jobs back, made in america. it's something he reiterated in south carolina at the boeing plant last week. and just leave you with a chart here on how tough that's going to be and what some of the ideas here are going to be like, made in america is actually doing fine. manufacturing output in terms of volume is at a record high. so we are making products in this country with fewer workers. 7.3 million fewer workers than back in 1979. that's going to be a predicament whether it's globalization or automation, these are the issues the ceos are discussing with the

cabinet secretaries and then they present to the president within the hour. we'll bring it all to you live. for now back to you. >> all right, sara, we look forward to that. look for the pictures and commentary after yet another meeting between industry executives and the president. sara eisen in washington. also in washington another cnbc first treasury secretary sat down with our own becky quick this morning as you may know. stressed need for tax reform by august. take a listen. >> our economic agenda, the number one issue is growth and the first most important thing that will impact growth is a tax plan. so we are committed to pass tax reform. it will be very significant. it's going to be focus on middle income tax cuts, simplification and making the business tax competitive with the rest of the world. which has been a big problem and a lot of reason why companies are leaving and cash is sitting offshore. so that's really our focus. we want to get this done by the august recess. we've been working closely with the leadership and the house and the senate, and we're working on a combined plan.

>> joining us this morning, pam olson is u.s. deputy tax leader at pst, michael chief u.s. economist at j.p. morgan. good morning to you both. >> good morning. >> pam, let's start with that timing. this suggestion that we can do this by recess, is that wishful thinking? or are they trying to light a fire under congress? >> i think it's a bit optimistic, but certainly if people put their minds to it we can make some very good progress by august. i'm not sure we can get a bill enacted by august, but certainly if we can gelt something, you know, through one of the houses of congress by august then we can look at moving things forward this year. and that would be tremendous progress. >> pam, did you take anything away from the way the treasury secretary characterized the priorities? basically individual tax cuts, ones that would apply also to the middle class and then tax simplification seemed to be his focus on the corporate side, maybe not as much of an appetite to tackle the entire corporate tax code? >> no, i thought when he talked

about wanting to spur economic growth that he was definitely focused on the need to make corporate changes. and i think, you know, that's clearly at the top of the agenda for all the ceos that are meeting with them today. we really need to do some changes on the corporate side, but i think, you know, key to moving tax reform is bringing the middle class individuals along with it. and so you've got to have both sides of it to get it through congress. >> michael, kbw has a note out this morning. they argue that the fact the secretary emphasized simplification over rate cuts may worry some investors. they say that such rates may not be cut as significantly as they have been anticipating. what do you think of that? >> yeah. i think on the corporate side trying to find, you know, tax expenditures to pay for a lower rate is going to be really difficult. so without the border adjustment taxes, it's going to be difficult to get the number down i think over 30% in terms of top marginal rate. so right now i agree with pam

that seeing any sort of plan by august just seems very optimistic because once you lose the border adjustment taxes, speaker ryan's plan sort of falls apart, we don't have anything from the administration. so getting this all done in six months just seems really very optimistic. >> right. although he did not say of course that they were losing the border adjustment tax. sort of gave indications they're considering a lot of different things. >> right. >> but michael, he also came back to this idea of generating more than 3% gdp growth a number of times, both with becky and of course with "the wall street journal" interview this morning. do you think that's possible? >> i think maybe for a quarter or two, but on a trend basis that just seems really optimistic for two reasons. one, we're at full employment, so we don't have that above trend capacity for growth. and two, the demographics, which are decimated right now, just mean that you're going to need really strong labor productivity growth like we haven't seen in decades for that to happen. so i think it's -- >> give me a sense what you're

talking about when you say demographics? more specifics on that. >> right. so just because of the aging of the population, labor supply growth, or growth in labor hour is about half a percent. so to get to 3% gdp growth you need productivity growth, labor productivity of 2.5%. and those are really tough numbers to achieve on a sustained basis. and i should add labor supply may be a little slower if we start deporting a lot of people. >> pam, when we get back to what can get done on taxes, you know, in this interview today with secretary mnuchin, he did, you know, essentially say they might score any tax plan assuming higher growth. it all seems to knit back to what the republicans in congress have an appetite for in the way of deficit neutrality, right? i mean it basically comes down to are they going to be willing to accept a higher deficit if the border adjustment tax can't get through? what do you think the prospects are that we can have progress on tax reform without it seems on paper revenue neutral?

>> so i think the dynamic scoring there is really a key part of this. and i think it is something as your earlier discussion indicated is something that needs to be done, needs to be taken into account. i think for the last eight years companies have poured an enormous amount of money into compliance programs. and some of the regulatory reform is going to have a positive effect on the economy. and so if we can get some of that done, and we can get tax reform done, i think we will see more economic growth. right now the code is clearly distorting investment decisions and a lot of those investment decisions are driving investments out of the country. so if we can do some things to fix the corporate tax code, i think we'll be able to make some real progress on getting the economy growing faster. i think that's really an important thing. >> but will republicans in congress buy into that idea is the real key question because it's all about whether you can work it. >> yes. and i think that they will because i think that the republicans in congress do think that we should be looking at things on a dynamic basis, that

we should be setting policies that are going to lead to growth. there's probably still some education that needs to be done. we keep thinking about things in terms of whether or not they're revenue newel tr revenue neutral, but we have to think about what's fiscally responsible and what's sustainable. if we have a tax code that is impeding economic growth, then we're not doing what's going to do best by the economy. and in the long run it's not going to produce the revenues that we want to generate on any basis. so we really need to focus on fixing the tax code, fixing our regulatory system so that companies can focus on creating jobs here in america. and that's the kind of thing that's going to lead to more economic growth. and i think congress will take that into account. but there is some education that needs to be done. >> michael, if the credibility of comprehensive tax cuts and reform is waning, infrastructure did not get discussed much at all today with the treasury secretary. is a growing likelihood we see

2% on the ten-year before 3%? >> i think we are going to continue to see rate hikes this year because we are at full employment. we do see labor markets tightening, we think the fed's on a path to still be tightening rates. i do think we continue to look for rates longer term rates that gradually move higher even though we may not see the type of growth people had been looking for or hoped for maybe in some of the fiscal policy. >> michael, at the end of your answer when i was asking you about overall gdp growth, you mentioned i think deportation. i mean, does the more aggressive stance on immigration figure at all into the way you're thinking about growth and/or the labor force? >> somewhat. i mean we aren't talking necessarily about -- well, maybe huge numbers, but that is something we have to figure into our calculations when thinking about growth, just number of workers in the economy. take out fewer workers in the economy means fewer and lower gdp and lower gdp growth.

so that is something we're trying to grapple with as these policies are changing, you know, week by week. >> yeah. greg yipp this week tried to argue you mentioned demographics and put immigration on top of that, you start to look in some ways a lot more like japan than we have in the past. is that fair? >> yeah, exactly. japan even if they have a good year is going to be pretty slow because of their demographics. so foreign labor supply has been a large part of labor -- overall labor supply growth in the west. you take that out and you're going to lower trend growth. >> but i wonder, michael, if the one way we wouldn't be like japan is with some inflationary proponents with it. a lot of people point tightness in the market exacerbated by policy and fiscal stimulus, are we looking at an inflationary scare or two down the road? >> perhaps. i don't necessarily think the immigration policy would change that too much because you're taking out when you think about

unemployment you may be taking people out of both the numerator and denominator. so not sure it has a very strong near-term inflationary impact, but i think regardless of that policy we are seeing labor markets as we saw in this morning's jobless claims report still look really good. so we think the unemployment rate is still probably headed lower. wages are picking up. and that is a factor of the business cycle that seems to be ongoing regardless of these policies that are happening in washington. >> michael, appreciate your time. pam, thanks to you as well. good discussion. we'll see you next time. >> thanks. >> when we come back, a cnbc exclusive with paul atkins, former s.e.c. commissioner, top advisor to the president on financial regulation. and let's get back to sara eisen at the white house for more on what else is coming up. sara. >> busy morning here at the white house, david. 24 ceos from top manufacturing firms across the u.s. inside talking policies, ideas with cabinet secretaries and presidential advisors. what do they want out of this

meeting? well, we're going to talk to the heads of two top manufacturing industry groups when we come back live from the white house on "squawk on the street." onboard cameras and radar detect danger all around you. driver assist systems pull you back into your lane if drifting. hi chief. hi bobby. and will even help you brake, if necessary. it makes driving less of a production. lease the gle350 for $579 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $6.95 per trade? uhhh- and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering

$6.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

we need to cut back regulations that have prevented small and medium size businesses from being the engine of growth in this country. and we're also focused as you know on dodd/frank and looking at dodd/frank and making sure banks can lend. there's an incredible amount of liquidity out there and we want to make sure banks put it to

work. >> treasury secretary steven mnuchin talking to becky quick first on cnbc this morning. so as the white house looks to the business community to cut business and financial regulations, how might that look? joining us exclusively is the former s.e.c. commissioner, member of the president's strategic and policy forum paul atkins, good to have you back this morning. good to see you again. >> good to see you too. thanks for having me. >> we've seen some targeted examples of this in mining and oil and gas, but if you can put all of this into some broad context what is the white house trying to do? >> well, with mining and oil and gas that was -- those were executive orders aimed at two extraneous provisions of dodd/frank that were thrown in basically at the last minute that had nothing at all to do with the financial crisis, that mineral extraction disclosures and conflict minerals so-called coming out of the congo in africa. and so those were -- that's an example of how dodd/frank this

2,319 page monstrosity of a bill that had incomplete sentences, you know, wrong citations in it and everything else, it was really a very slapdash effort then morphed into this big regulatory, you know, downer for the economy that really costs a lot of money. and like secretary mnuchin says, you know, really inhibits growth in the capital markets and in business in general. >> paul, if you looked at this entire bill knowing it's not necessarily going to be revoked as one piece and talk to ceos in the financial industry, investors are clearly banking on the fact this is going to be helpful to banks, this deregulatory effort. what would be some of the specific provisions you hear should be targeted in this effort to streamline things? >> well, you know, dodd/frank stretches to 15 different titles. again, like i said, more than 2,000 pages.

but then you have thousands -- tens of thousands of pages of rules that were enacted by a number of different agencies, banking agencies, the whole alphabet soup here in washington. so the first job is for new -- since personnel is policy basically, the first thing is to get people into these particular regulatory agencies. and some have been nominated and some are yet to come. and once they get in, then they can start the hard slog of reviewing like the president said in an order he issued a couple weeks ago to review the rules out there and figure out which ones are not helpful from a cost benefit basis and which ones are actually inhibiting activity in the marketplace. one great place to start is called the volcker rule title 6 of dodd/frank. and that is one thing when the

secretary talks about inhibiting liquidity, the volcker rule, even the fed staff has put out a report talking about how the volcker rule has basically diminished liquidity in the marketplace and especially in the fixed income side and in parts of the market like that. >> paul, it's sara eisen from washington. one of those regulatory rules that you just mentioned is the vice chairman for supervision on the federal reserve, a position created by dodd/frank to oversee bank regulation. your name repeatedly comes up as a candidate for that job. this fed needs a bank regulator. have you been having any discussions with the white house about it? >> no, i'm happy where i am. thank you very much. but i think there are a number of good folk who is are under consideration for that. it's an incredibly important job. and especially now with the fed there will be three openings on the board of governors since governor tarullo announced he would be stepping down in april. and that particular position has never been filled. governor tarullo sort of did it

de facto rather than actually being appointed to it. the obama administration never appointed anyone to it. so that position should be filled. and i think it is very important. it has a lot of interaction to do abroad especially on the -- with respect to the financial stability board. and this particular board has no real authority. it has a lot of inherent authority just because of the way bank regulators work in a consensus type of way. but it's not powered by treaty, not by anything else. and i think we need to have somebody who is philosophically strong in that and who realizes that regulations really do -- have really cost the economy in terms of jobs, in terms of growth and we need to be smart about the regulations. >> one last question on process here, paul.

we mentioned you're a member of the forum. we got these manufacturing ceos doing working groups at the white house today. we had a discussion this morning about how much of this is truly for show and what policy, if any, actually gets done at these meetings. can you think of an example of one? >> well, we've only had one meeting that was earlier this month. and steve swarzman who's done a great job in organizing this has talked about having forthcoming meetings. at the first meeting you cover a lot of territory. financial regulation, we talked about women in the workplace and other sorts of topics, taxation and the whole thing. so i think this is a great opportunity for the white house, the president himself and the vice president were there for the entire two-hour period at the beginning of the month. so i think that is a great opportunity for them to tap into folks who are in all sorts of

parts of the economy and can give them informal feedback and ideas. that's really what the whole thing is about. i think it's a great form of outreach. >> paul, it's good to get your insight on that and everything else. we'll talk to you again soon. >> thank you very much. >> former s.e.c. commissioner, ceo of potomac global partners. when we come back, the white house pushing the made in the usa mantra. our own phil lebeau will join us from the port of charleston, which is making a major investment to make exporting those goods even easier. back in a minute. ♪ across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives,

infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. let us help grow your company's tomorrow - today at esd.ny.govive. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade. "best cracked pepper sauce" barbeque trophies: "most ribs eaten while calf roping". yep. greatness deserves recognition. you got any trophies, cowboy?

uh, yea, well, uh... well, there's this one. "best insurance mobile app"? yep, three years in a row. well i'll be! does that thing just follow you around? like a little puppy. the award-winning geico app. download it today. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.

welcome back. president trump pushing for fewer imports and more exports. what is the port of charleston doing to make that possible? let get to phil lebeau. he's on a crane at that port and has the story for us. phil. >> reporter: david, i've been in a lot of unique places in my career, but i'm not sure i've ever been 14 stories high looking down into a cargo ship. my photographer is going to look down here. our crane operator, tony, how heavy is this cargo, this container that's coming out right now? >> this here is about 45 tons.

>> 45 tons, guys. and just to give you some perspective, this cargo ship came from the middle east, has consumer goods, there are 6,700 of these types of containers being offloaded from this ship. we've got a second signal here at the port of charleston to give you some perspective to give you how quickly they are loading and unloading containerships like this. the reason we're here is because exports, especially in south carolina and in the southeastern united states have become so important and are becoming even more important as more manufacture manufacturers either expand operations here in south carolina or they add facilities, petrol chemical business by the way is exploding in this part of the country. and that means more business here at the port of charleston. tenth busiest in the country. and they're in the midst of a $2.3 billion expansion to make this the deepest port on the eastern coast. here's the ceo of the port talking about the importance of that expansion. >> we think that fair trade doesn't mean no trade.

so we think the global supply chain is sound and it will continue to grow. most of the foreign direct investment in manufacturing we believe will be in the southeast. so we have to invest in existing facilities and new facilities and our harbor depth to we can handle the big ships that will carry that traffic. >> reporter: and part of that is dredging this harbor so it becomes the deepest on the east coast. guys, a little later on today we're going to be at a different location here at the port where they send all of the bmws out that are being exported out of this country. it is the primary export port for that. in the meantime, i'll give our photographer one more chance to give you some perspective of what it's like to be in one of these cranes as they are loading and unloading 6,700 containers. tony, how long will it take to unload this ship? >> about ten hours. >> ten hours. ten hours, guys, some perspective from charleston. >> all right, phil, that's impressive to watch.

don't work too hard down there. thanks very much, phil lebeau. meanwhile, president trump about to meet with his manufacturing council. we'll bring you the news as it comes in. our sara eisen's at the white house with what to expect. hey, sara. >> reporter: hey, mike. it's a who's who of manufacturing ceos ge's jeff immelt and greg hayes of united technology among the group. they're just wrapping up discussions with their groups and about to meet with president trump. we'll be back on "squawk on the street" live from the white house. t i use? yes, sir, your password. there's been another breach! sir! right. okay. i-h-a... ...t-e-m-y-j-o-b-1. ihatemyjob1? wanna get away? now you can with southwest fares as low as 59 dollars one-way. yes to low fares with nothing to hide. that's transfarency. sfx: clap, clap, ding

i'm con tessa brewer. here's your cnbc news update this hour. an explosion at an upscale restaurant in eastern pakistan killed six people and injured 15 more. it's not clear yet what caused the blast. a string of suicide bombings and other attacks across the country over the past two weeks have killed more than 125 people. carlos ghosn is stepping down at

nissan. ghosn turned the automaker around after joining as chief operating officer in 1999. he will remain as the company's chairman of the board. a spacex cargo ship has docked with the international space station a day after a gps problem prevented the capsule from doing so. the error was fixed quickly so everything went smoothly the second time around. second time's a charm. someone from indiana is $400 million richer this morning, and it's not me. the winning power ball numbers were drawn last night. one winner, the winning numbers in case you'd like to check whether you're a second place, runner-up, 10, 13, 28, 52, 61, powerball number one e wwas 2, congratulations to you, that was our cnbc news update this hour. sara, back to you. >> all right. one lucky gal or guy. thank you very much. meantime, president trump is about to meet with manufacturing executives here at the white

house. they're just wrapping up some working group sessions on policy to create jobs and manufacturing. our eamon javers sat in on parts of the meeting and he's here with me on the white house lawn a few positions over. eamon, what can you tell us about the meeting? >> hi, sara. i just came out of the eisenhower executive office building where the ceos were meeting with the vice president, with ivanka trump, with gary cohn, a whole host of senior administration officials in the room for these meetings. gives you a sense of just how important this day is to the white house. they gave us nearly unprecedented access, a group of reporters was invited in to sort of sample each of the working group sessions. they had four different groups, one on tax and trade, one on regulatory reform, one on infrastructure and one on the workforce of the future. and we were brought in to each one for a few moments to listen to what they were saying. you can see these are some of the pictures i took on my iphone just a few moments ago. there you see the vice president, mike pence, along with jarred kushner in some of the meetings. ivanka trump sitting in on the

workforce of the future meeting. a whole host of top level officials there. a lot of these discussion is so general you don't get any real sense of debate or contention. but in one of the meetings i observed they were talking about the border adjustment tax, one of the ceos who we're not under the rules of engagement here permitted to identify said that the border adjustment tax would create $2 million high paying jobs and therefore he was for it. another ceo interrupted immediately and said and it also would expose 42 million jobs to destruction. so be careful. that ceo said. so there was a point of disagreement on the border adjustment tax among the ceos who were in the room. we're of course waiting to see where the white house lands on that issue. also, overheard conversations about education. officials saying they want to bring back vocational education in a big, big way in this country. one very senior administration official said that when the president was growing up in queens and this administration official was growing up in indiana vocational education was

just a big piece of high school in a way that it's not now. they want to get back to that and make a big push on that. so that's just some of the conversation that we heard in the room, sara. now they're moving over to the white house itself. they'll gather in the east room and they will talk to the president of the united states himself. >> very good color, thank you very much, eamon javers. especially after treasury secretary steven mnuchin didn't really commit one way or the other on the border adjustment tax in the president's tax proposal. eamon javers, thank you. we'll check back in with you. we want to have more discussion now on the manufacturing initiative. what do these ceos want? joining us former missouri governor matt blunt now president of the american automotive policy council. and scott paul, executive director of the alliance for american manufacturing. governor blunt, manufacturers seem to be split on this idea of the border adjustment tax as eamon just highlighted. some of them are big exporters, and that would be tax exempt. it could create jobs, but some of them are also consumers and retail companies. so where do manufacturers

overall stand here? >> well, i think a lot of manufacturers and certainly the three companies i represent fiat chrysler, ford and general motors, are really interested in the details of the proposal. certainly support a lot of the idea behind tax reform, but really need to see the details of that proposal before they can say one way or another. clearly a tax proposals that are good for exporters are good for our companies that export, and the u.s. auto industry exports more cars and parts than anything else from the united states. we are certainly interested in the details and want to have a full understanding of what the propos proposal would entail. >> beyond the automakers, scott, you represent a large array of manufacturers. what's your take on the border adjustment tax and whether this group can come to any consensus to advise the white house as they are doing behind me right now? >> it's a good question. i think a lot depends as governor blunt said on the

details that emerge from this. right now we have a framework, but i think we need to understand that the united states is uniquely ill positioned right now in the global economy from a manufacturing perspective and our tax code. it does not conform so 160 other industrialized countries around the world. there is no adjustment at the border. we're unique in that respect. and so i think that there's an upside. and the outcome of corporate tax reform should be ensuring that industries that are in global competition, and by that i mean manufacturing much more so than the retail sector. >> sure. >> or certainly the financial sector, their needs should be addressed i think at the front of the line because these are the jobs that can be most easily shipped overseas and the jobs we can get back as well. >> governor blunt, there are four major topics of discussion. that's how the working groups are divided here, trade and tax is one of them, improving the

quality of the workforce is another. there's no automation group. there's nobody talking about robotics. there's nobody talking about the advancements of manufacturing. perhaps it's within those groups and perhaps they are talking about that, but is that something that needs to be discussed here in order to understand the fact that we have been losing millions of manufacturing jobs in this country over the last few decades? >> well, i think certainly understanding how automation has made u.s. manufacturing more productive is important. my guess would be in the workforce development discussions they are talking about the need for a highly skilled workforce that can manage all of this automation. and certainly automation requires folks that understand how it works, understand how the equipment works. so my guess is they are discussing that in some degree. but certainly automation's contributed to making u.s. manufacturing more productive. there are obviously implications for employment, but it has made

u.s. manufacturing more productive and more competitive in the global economy. >> the president is focused on jobs, especially in the states that he won along the rust belt where they have been hit hard by manufacturing declines in jobs. scott, what's realistic for this president to expect from the ceos when it comes to job creation in our nation's manufacturing industry? about 12.5% of our economy. >> well, i think that there is a renewed interest in looking at ways to bring work back to the united states and how to be more competitive. and i think a lot of the ceos have relayed to the white house and to the president the fact that it will enhance their business plans and their hiring plans if we have a more favorable tax code, if we have a workforce development system, if we're investing in infrastructure to modernize it and have a 21st century infrastructure. and if we have a trade policy that's going to create that level playing field. i think u.s. manufacturing is well positioned.

we're great at making automobiles. we're great at making airplanes and a lot of the other things as well. and i would -- what i would hope would come out of this is both a commitment from the ceos to take another look at locating production to the united states. and i think a number of them already have done that. and from the white house to pursue these policies. and i can't emphasize the urgency of it. i mean, the voters who put donald trump into office are these working class voters. >> right. >> many of whom affected or displaced by manufacturing job loss. and i think governor blunt is right, these jobs are going to probably look a little different than they did when they left, but we need to be in the position to compete for them. and so let's get moving on tax reform. let's get moving on infrastructure. let get moving on some of these investments. i think that's very important and that's going to take the congress and their cooperation and partnership as well. >> competitive certainly is the name of the game, governor blunt, you and i have talked so many times before about

competitive currency pressures especially when it comes to the automakers complaining about the weaker japanese yen and the edge that gives. what do you expect to hear? mark fields is behind me of ford motors when it comes to currencies what these manufacturers are asking of the president and what they can actually deliver because treasury secretary steven mnuchin this morning did not sound like he was in a hurry to label china a currency manipulator as president trump had campaigned on earlier in the trail. >> sure. certainly the president has addressed this many times as a candidate and now as president. i do think that president trump understands the unique and extremely powerful and negative impact foreign currency manipulation has on the united states. and we have allowed asian economies to manipulate their currency in a way that has had a severe impact on american manufacturing and job creation and actually created job loss. so we think it's important that

the administration apply pressure to countries when they are manipulating their currency, do everything they can within the existing toolbox they have to combat foreign currency manipulation. and we believe believed for a long time and continue to believe that every free trade agreement that the united states enters into ought to have a strong and enforceable currency discipline that would in no way undermine a country's ability to have a sovereign monetary policy but would stop the sort of just obscene manipulation we've seen from economies like japan which has over 350 times since the 1990s directly intervened in the currency market to devalue the yen and give them an unfair and unearned competitive advantage. >> not since 2011. you know you and i can go back and forth on who's manipulating currencies and whether it's even happening, but we have to leave it there. thank you for joining us as always governor matt blunt and scott paul from the alliance for american manufacturing as we

await, carl, these ceos sitting down with president trump at this hour. >> we are starting to see some pictures, sara, on the left side of screen there. we'll try to get that on the other side of this break. in the meantime, dow's paired its gains, s&p and nasdaq have gone into the red. we'll await the ceos and the president at this meeting in the white house. be back after a short break.

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? it is a busy day for the president today in meeting with manufacturing ceos of all stripes. later on this morning a call with justin trudeau of canada, a listening session on human trafficking, an issue being led by ivanka trump and later tonight dinner with the business council, guys, but this is going to be the highlight for our purposes as the president once again after meeting with executives from the retail industry, the auto industry, the drug industry, the airline

industry and unions as well tries to get a core group together to tackle all kinds of very large issues. >> a core group and breakout sessions, i guess you would say, right? based on different issues what the ceos are aligned with or interested in, tax reform, infrastructure, various other things. it's interesting that at least want to give the impression that there's going to be kind of action items or at least priorities set today. >> there's elaine chao, wilbur ross in there as well. we mentioned some of the key players, gorsky from j&j, immelt from ge, actually frazier there i believe. >> ken frazier from merck and greg hayes from utx one of the first ceos to deal with then-president-elect trump and that early announcement about keeping some of those jobs at the carrier plant as they managed to do in indiana. but he's certainly also a part of this meeting. some of these guys getting pretty familiar with the white house. mark fields has to be at least what his third trip there at

this point. >> some are overlapping on various meetings. this group got together three days after the president took office. there's michael dell. but fields as you mentioned, david, also joining on the auto meeting as some meetings are industry specific. this one is not. art cashin is with us here at post nine watching all of this. an interesting chat with cramer this morning about lessons the president has taken from television for these exact purposes, but others have tried to argue that kind of like the golf course, work does get done. >> yeah, no, it very clearly does. and one of the more impressive things is hopefully not pandering. what many of these ceos have said is the man appears to actually listen and pick up on criticisms and do follow-up questions. so that's heartening. and so far his cabinet and his appointees have come across as rather professional. so that's somewhat reassuring.

while that's demonstrated, yesterday was the ninth record closing in the dow. they've only done that five times since 1897. the longest string was in 1987, we had 12 in a row. we'll take that, but not the follow-up. >> that was early in '87. there was a lot of upside, right? >> yeah, back around january. january to february. so we'll wait and see. the other thing the viewers want to keep their eye on is at 11:00 we're going to get the crude inventories. and it was a surprise drawdown last night in the api data. that's put crude up. as we've been saying over and over again, we've been stuck in a rectangle on wti between $55 and $51. if they breakout significantly above $55, if the inventories are a drawdown again, that could be important. so it's well worth watching. so we'll watch the meeting and

fallout from the meeting and we'll watch the inventories. >> list of all highs again today, art, very impressive. everything from berkshire to amazon to altria to j.p. morgan and yet ten-year stubbornly below 2.4. how much are you watching that versus what some specific equities are doing? >> well, i've been watching it very carefully. it was interesting to watch the treasury secretary speak. and the dollar actually weakened a little bit. i think that was because he was certainly nowhere near aggressive talking about china, et cetera. also because he hinted that the border tax was not a lock and that it might have some problems itself. so we're beginning to see the dichotomy is going to be when the market figures out the timing. trump keeps talking like it's going to be two or three weeks you'll get to see what we're going to do. treasury secretary indicated that they hope, hope, hope to

get things done by august. >> what did you think when you heard that? >> i was -- i thought it was somewhat more realistic but somewhat disappointing because it depends on what they do. if they do the tax reform, will it be retro active to january 1st? and where are things going to go? >> and he also -- the secretary was also relatively sober in terms of promising growth or at least tangible benefits from whatever tax plan even if it gets done in august, right? he said this 3, 3.5% that we're kind of pencilling out here is maybe 2018. so i mean obviously that's kind of realistic looking at the cadence of the economy. but he wasn't exactly sort of overpromising in the near-term. >> no, i understand that. but from a political standpoint they needed to be as early as possible. there are at least ten democratic senate seats that are vulnerable in 2018. and if they can demonstrate that they actually got the economy moving and moving smartly, they

could take full control of the senate that might last for a decade or more. >> filibuster proof and the whole bit. >> right. >> eamon javers, you mentioned education and vocational education in your last hit. one question last night was whether or not education secretary devos would be part of this meeting if the intent really is to develop a new class of workers for today's modern jobs and manufacturing. >> that's a good question, carl. i did not see her in any of these sessions and not listed on my sheet of attendees here. i don't believe she did participate in any of this today. we'll have to wait for further readout from the white house on that. when you talk about vocational education and training, one of the countries interestingly around the world that seem to be on the mind of both the senior administration officials in the room and the ceos in the room was germany. their example was cited several times by ceos and officials talking about vocational education, how to create jobs and a workforce that's focused on blue collar jobs. and also in terms of how they

streamline the process for building plants and operations in germany. one ceo i was listening to was asked by a high ranking administration official whether it was easier to do business in foreign countries or in the united states, and he said frequently it's much easier in terms of regulatory term of regd tape to simply do business, this administration clearly attuned to that, listening for specific ideas. each of the sessions that i listened in on, carl, the administration officials were asking for specific feedback, including the most senior administration officials who came into the room, asking for specific ideas, and one of those to be presented to the president today. so the goal of all this, a bit unclear. we asked them if they were considering a jobs bill, particular executive orders, what is the specific takeaway, and one administration official said simply all of these ideas will find their way into policy one way or another, depending on

what the ideas are. >> sara, this leads to an important point. the white house i could imagine doesn't want this to be about old-school industrial-style routine work, right? i mean there are a quarter million job openings for software developers, that has to be part of this equation. >> it has to be part of this equation, but the representatives from the industry that president trump are talking to, it ranges, there are some heavy machinery for ceos like ge's jeff immelt. that's what president trump has made it clear that he wants to turn around. you remember during his inaugural address, i think i have the quote here, because it was so descriptive and vivid. he called out the, quote, rusted out factories scattered like tombstones. he campaigned on this, he promised it, it was one of his most consistent messages, so the

trick is going to be getting those factories going again, getting made in america a priority again, but doing it in a modern world, where you do have globalization, so many of these companies inside the ceos represented have businesses around the world. they export, they wherever they even outsource, so the trick is marrying that modern-day business along with automation and robotics, which has improved our manufacturing capabilities, and led to somewhat of a skilled gap in manufacturing, and figuring out how to create jobs. that's why education, of course, is going to be important. that's why i was trying to figure out from our previous guest, just what is realistic when it comes to manufacturing jobs. according to the ceos we've heard so far, if you can make these companies more competitive and do it without jeopardizing relationships with foreign trade partners, they can get investing again in factories in this

country. we'll see. mike, i know we've been watching all of this as it relates to the conversation with the treasury secretary earlier today and to what degree a corporate tax cut would be fuel for the jobs we're talking about. >> exactly. i don't necessarily -- what's interesting is if you look at wall street -- for s&p 500 earnings, they're assuming every dollar flowing down to earnings. they're not saying there's going to be an investment boom, a hiring boom, so there's a lot of play in between what the objectives of this move are from a d.c. white house perspective and what investors might be counting on. i don't think that's unperjurable. i don't think the market is pricing in all those earnings, so i feel as if there's a bit of a difference in terms of what it's supposed to mean and what the actual objective's intent is. >> and of course the effective tax rate for many corporations far lower than what we expect, and where that rate ends up,

given the treasury secretary didn't focus again as much on the lower rate as simplifying. part of the plan out of the house ways and means doesn't involve other things. although you are then able to duct all of your capital expenses in a year, so it will really vary according to company and industry in terms of the impact. >> mike just tweetsed one note that suggests you can do revenue neutral without border adjustment. this is dan clifton. he's saying, by the way, that you have $700 billion in existing corporate credits and exceptions and such. if you consider that to been potential savings, you can get to -- a 23% rate. would that excite people? 23% is in the 27 range right now? >> it would help, but i don't think it's the grant stroke. >> getting rid of those credits,

though. >> no, that would be a thing of beauty. they're going to turn over everything possible. that's why, unfortunately for our timing, they had to put the tax reform behind the health reform. that goes more to the neutrality. >> especial le doing it until reconciliation, which is important, because you only need 51 points opposed to 60. although i would assume some of the people in that room may want to. >> transmission secretary talking to steve bannon. by the way, you see reince priebus there, chief of staff, devos. later tonight the vice president, all part of cpac in advance of the president's address there tomorrow. carl? >> yes, eamon. >> i wanted to bring in another smallish piece of news from the

gathering earlier, so much speculation about whether the infrastructure plan is going in the last 24 hours, whether that would be this year, next year. the business community very focused on that in the wake of the president's election, a proposal for a $1 trillion package on infrastructure spending, a senior administration official in this gathering was talking to the ceos about infrastructure, and he said we need to get away from the 1920s and 1930s model of paying for infrastructure. they wanted to spend time in financing it. he also talked about the canadian federal aviation system saying it's far superior, saying how did we allow that to happen? this official said we can't by looking at 1,000 different projects, i would rather do ten well. >> indeed. that's a big request as to whether or not that package will be about roads and bridges or how fitting on today day we have tess her and hyper loops.

the the president is making his what i into the radio many shaking hands. we'll look to see if he gives any opening spoke comments. let's take a listen and see if the president speaks. well, thank you very much. it's a great honor to have everybody. some of the great people in the world of business, many of you i know, many of you know from reading all of our wonderful magazines and business magazines in particular. so it's an honor to have you with us today. bringing manufacturing back to america, creating high-wage jobs was one of our campaign promises and themes, and it resonated with everybody.

it was really something what happened. states that hadn't been won in many, many years, they came over to our fold. a lot of it had to do with job, and other reasons, but jobs. i'm delivering on everything that we've said. in fact people are saying they've never seen so much happen in 30 days of a presidency. we've delivered on a lot. i think mark can explain and can probably say some of the things we're doing for the auto industry. we'll be doing that for many of the industries. as you know, the united states lost one third of our manufacturing jobs since nafta. that's an unbelievable number, statistic. 70,000 factories closed since china joined the wto. 70,000 factories. when i used to give that statistic, i used to talk about it, and i always thought it was a typo. i said it has to be a typo and told wilbur, that could be

right. 70,000 factories. so you say, what are we doing? my administration's policy on regular torrie reform, tax reform, trade policies will return significant manufacturing jobs to our country. they have to come back. you've already seen companies such as intel, ford, gm, walmart, amgen, amazon, fee at, they came the other day, carrier and many others announced significant new investments in the united states. for example, ford is doing 700 million in michigan, creating 700 news jobs as a vote of confidence. it was actually stated, a vote of confidence. we have many other companies done the same thing.

i got involved very late, but many of the jobs that were leaving from mexico, they're bringing back, at least 800 jobs. they actually never got to leave. i don't know what they did with the plant in mexico, we'll have to ask them, because it was largely built. general motors investing $1 billion in u.s. plants, adding or keeping 7,000 jobs. long heed martin. 1800 new jobs. u.s. plants, they're doing a great job, and we started negotiating with them a bit on the f-35. thank you very much. he's tough. >> it worked out well, and marilyn, i have to say this, you've gotten a lot of credit. you did the right thing. we appreciate