it's friday, december 29, 2017 "squawk box" begins right now. live from new york where business never sleeps this is "squawk box. good friday morning. welcome to "squawk box" live from the nasdaq market site in times square i'm kayla tausche along with andrew ross sorkin, becky and joe are off today. our special guests yet again, kevin o'leary. welcome back >> great to be here. >> if you liked wednesday and thursday, you will love today. >> it just keeps getting colder every day. >> did you bring this from boston >> no, no, no. >> canada. >> canada's warm now you know, you saw the president tweeting today we have this whole reverse global warming, baby that's what we need. also joining us on this final trading day of to 2017, j ter no terranov

terranova. he plays a great guitar? >> it's called the mr. wonderful. it's built by fender i was a shareholder in fender for years and i made no money. >> joe, was he actually playing the guitar >> he was. >> this wasn't a milli vanilli situation? >> no. no >> billy gibbons, the zz top guy, who i'm in awe of as a rocker tweeted me and said hey, hey, not bad, but you're leaving a little on the e chord. he's an investor he watches cnbc. >> this is good. >> joe, we're excited to have you. thank you for getting up early on a holiday week. the last day of trading for 2017 let's tell you where u.s. equity futures are. they've been negative throughout the morning. s&p is the only average that would open in positive territory if it were to open up now, up by

3 points overnight in asia, final trading night of the year has come and gone largely mixed. the nikkei slightly negative hong kong positive as well as shanghai 2017 finished off with a gain of nearly 20% for the nikkei. look at that 19% year to date look at crude. we've been watching this throughout the week. started the week with quite a lot of volatility. up sharply, 3% then we took air out of that rally. still above 60 bucks a barrel. that's the first time we pierced that level since 2015. seeing a spike in nat gas again up 1.5%. that's because of this epic cold front. >> isn't it amazing in 2017, where the investor is disappointed by nothing on the last day of the year, there goes oil above 60 bucks

the final piece to the puzzle. >> the sector was the only negative sector on the year. does that mean setting up energy is a great play? >> there's been a tremendous amount of talk and number two, fund flows in the last couple of weeks into the energy sector on the belief exactly of what you're saying, it's a value play, the last opportunity for the investor to make some money. mlps, that's the challenging area >> you could not have predicted this week's bump it came on the back of that libyan pipeline blast. >> i think this has been building the energy equity names, the xle had quite a move over the last ten days it's been building you're seeing the fund flows i would suspect it's more than libya. i think it's trying to increase the allocation does this change your mind about the bankruptcies pending next year when all of the debt raised -- >> great point >> about 20% of the junk credit market is oil companies issued

for sale they're still not cash flow positive >> but there's winners in that that leads to the necessary consolidation in the shale plays and bigger names they'll be the winners >> i keep hearing while business news is a good thing, the energy sector might bring so much production online that you have the ancillary effect of driving the price of oil back down again. >> yes i agree with that. when we talk further about tax reform and what is the benefit to the sector, not as much as other sectors. >> let's talk tech apple. >> what did they do? >> apple doesn't like to apologize, because couple big stories we're watching this morning. apple making a rare apology following customer outrage and lawsuits after seeing it slow down older phones with aging batteries. the tech giant cutting prices now for battery replacements and changing its software to show you whether your phone battery

is good. starting next month, out of warranty batteries for an iphone 6 or later will cost you $29 versus what was $79. in a blog post apple says we know some of you feel apple has let you down we apologize there's been a lot to of misunderstanding about this issue. so we would like to clarify and let you know about changes we're making shares are up 47% year-on-date nothing to do with this issue. >> i don't understand this wh >> what don't you understand >> the iphone 6 leaves a shell and crawls around your floor, you can't use it anymore who cares if it has a new battery. this is planned obsess obsoleteness they should say this is an old phone, it's dead, get over it. >> the perceived issue was the

issue was with the operating system not the battery now people are saying the whole time i could have spent 79 bucks instead of 600 >> as the operating systems get better, they take more power by default because they require more power to operate correctly. >> you can do 4k 60 frame of video on an iphone x, it's huge but it takes a lot of memory >> nobody thought the operating system itself was purposely slowing things down. >> apple should hire me to tell everybody stop your whining and buy a new phone. >> i love you. there's a difference i had the 6 plus, now i have the 10 >> the 10 is mind boggling good. >> a phone call is crystal clear. >> yeah. >> what do you think of the apology? people were saying this will end up in the business school hall

of fame. >> good or bad >> both. a little bit of both >> i agree with kevin. >> do you see anybody driving a 1954 car around? no the 6 is -- it's in the smithsonian already. it's showing you don't use that anymore >> a 6 is only four years old, is that right? three years old? >> an eternity in cell phone time >> like in dog years >> you would like to think it's still going to work. >> no, i would like you to buy a phone so i can make money as a shareholder. >> i'm just defending those who have old phones. by the way, we give our old phones -- i shouldn't say to our kids, they can't take them out of the house, but they do use them you think everyone should know the deal is, it's two or three years, then you're done. >> from now on when someone complains about this, you say please buy a new phone so you can enjoy the new technology and

kevin o'leary can make more money as a shareholder >> $1200 for the oled. >> and you need all the memory because if you need the new camera you need the memory >> i will resell one thing, the head phones. the air buds do you use them? >> no. >> it's aair pod air bud is a golden retriever who plays basketball >> you go on a conference call -- >> they go for six hours >> what kind of radioactive stuff are you putting to the side of your head. >> i thought of that >> have you lost them yet? >> have not. cost me about $160 the best investment made

>> when i do a long conference call, speakerphone away from the head let's get you the new years weekend forecast with michelle grossman what's the latest? >> all right looking at bitterly cold air again. dangerously cold air for the next several days. we have not seen the coldest yet. though it's been freezing. we have that arctic blast from canada that will affect us over the next several days. even reaching parts of the south. 14 in cleveland. 9 below zero in duluth feels like 25 below zero 2 degrees in boston. 16 in raleigh. we don't go high from here we don't get warm. tomorrow temperatures at 18 degrees for new york city. 1 degree in chicago. 25 degrees is the air temperature in fargo it will feel like 42 below zero.

sunday, that's the day, especially new year's eve, that's where we will see that surge of arctic air. we will look at temperatures as we wake up sunday morning, 17 in philadelphia 4 below zero in indianapolis on monday, 13 in washington, 12 below zero in minneapolis, 7 in denver layer up as you head out through the next several days. we're looking for this cold snap to continue through at least the next seven days. >> thank you for that. i don't know how i feel about all this how do you feel? >> i feel as though for the first year i'm not in ottawa during the new years break, i'm very happy >> probably good for coat selling. >> or hats, gloves >> arctic goose. another one called moose knuckles moving up >> i need to know this everybody has a cappnada goose . what is the next -- >> moose knuckles.

it's a slang for the other append dance that hangs loose on a moose. they're called moose knuckles. >> thanks for making that family friendly for the 6:00 hour >> i walk around proudly with my canada goose -- >> you're passe because you don't have moose knuckles. the thing about the coat, it has the fox lining, which is a big issue. i have a full seal coat to stay warm, made of seal pelts and animals were harmed in the making of that coat, but there's a lot of them. they eat a lot of crabs so i'm supporting the crab industry now. >> i have to process that. we'll continue our conversation about apple. joining us now is dan ives head of tech research at gbh insights you heard a bit of our love affair with the iphone x, the

air pods, not air buds what do you make of the apology? >> this was a pr nightmare this is something that they need to stop head on. they're going into the biggest product cycle ever the longer this lingered with 350 million consumers potentially upgrading over the next year, 60% of that will upgrade. they needed to address this head on this is something, especially the iphone x, 8, 8 plus, they're going into a pivotal year. this was the last thing they needed they did a smart move here getting ahead of this. >> when you say they needed it, you think this was so off-putting, so offensive to certain people that they wouldn't go back to an apple store and get the 10 or the 8 >> i think us more about the timing you have right now, what i would view as the biggest potential window opportunity they've had 350 million consumers.

you look at china, u.s., europe. they needed for those on the fence consumers that were thinking about upgrading, we were doing surveys and we saw this was something that made consumers think -- they were not necessarily going to switch, but it's something where the last thing they needed was a deterrent to get them to upgrade. this was easy to do. they needed to do it now they are moving 2018 with a little tailwind, significant upgrades >> do you think there's a misunderstanding about this? i read the material. when you get deep in it and try to understand what they were doing, it's not clear they were trying to slow the whole thing down they wanted to make sure it didn't shut off, which is different than what we've been talking about, which is as you upgrade the operating system overtime, if you have a

different operating system, it will be slower >> it's a great point. there was a misunderstanding that's why they needed to address this with a statement. if you look at it like you talk about an iphone 6 in the smithsonian, there is, based on the power and the chip a need to continue to slow it down they needed to hit this. it speaks to why consumers are continuing to upgrade. even with a 4 digit price tag on iphone x. they have momentum going into 2018 this has probably been one of the years they defied the skeptics more than any others in 2017 what do you make of these reports, you get the channel checks, this and that from people who are not buying these phones as much as we thought, that they're not going to produce as many phones you saw those headlines over the past seven days. >> yeah. we think about 3 million to 5 million iphone units got pulled

from march into december part of that was supply/demand issue. there were some soft spots in china. we think overall this is a super cycle product release that exceeds iphone 6 the next step in 2018, where they do that 200 rebbillion repatriated cash >> dan, the second half of 2018, you talk about tremendous momentum that currently apple has. in the second half, how do they continue that momentum once we get past repatriation and knowing what the numbers are surrounding the 10 does it come from the software and services business? what is the catalyst this time next year? >> it's software services. that's the second act here we believe that could be a 50 billion annual stream per year they have to continue to

enhance. they'll have interim releases. lower price points in june we think it's about streaming. it's about content on the video side there's an arms race you've seen it with disney, fox, apple needs to go after this market on the streaming side, further build out that software services, and some of those other growth areas to tap into the billion ios devices sold to date that's the opportunity to further monetize it. >> if you're advising the management of apple, would you have told them to apologize? is that something you would recommend is a good idea >> yeah. i actually recommended it a few days ago what we were seeing on the survey side, talking to 20,000 consumers in surveys, this was starting to be an issue. it's not that it was going to be a significant black eye, but the longer it builds, it becomes worse of a pr issue.

the last thing they needed, it's because of this upgrade cycle. it's the worst timing. thou they needed to hit it right away it was a mea culpa they did this last night which goes against cupertino's and cook's culture it was such an issue they needed to address it, part because of the misunderstanding and part because of the timing. >> dan, happy new year >> you, too. thanks for having me coming up, much more on the markets for this final trading day of the year and the new headaches expected to come with the new tax code in the new year first, a little wine a wine segment it's 6:20 a.m., long overdue per tekt time to talk about the prospects of this multibillion dollar industry. a toast to "squawk" up next. is this a phone?

or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. some news just in from goldman sachs. the new tax law will result in an earnings hit of $5 billion for the current quarter, two-thirds of that due to repatriation of taxes and

changes in deferred tax assets people will be looking through that you see a headline like that, you see goldman sachs taking a 5 $5 billion hit, that may seem surprising because the financials were supposed to be beneficiaries, because a lot of this is the repatriation issue and there will be a tax hit involved in that -- >> up front. but setting up for a benefit >> right >> a lot of previous conference calls, we heard ceos and cfos challenged on what would be the benefits or negatives surrounding tax policy the upcoming earnings conference calls will be important and interesting because now we have the certainty and they can ho l model out what it will look like >> do you care it's a one-time hit. >> no, don't care for the one-time hit, but how you are deploying that capital you just don't want it sitting on your balance sheet.

case in point, apple >> increase the dividend >> do something with it. >> a long list of companies have said they will take a hit because of the tax bill in the near-term. a lot of people will be poring through these filings. just a couple days from ringing in the new year and that means getting ready for some parties. now is the perfect time to talk all things wine. joining us to do that is ra ray aisles did you choose to come in at 6:6 6: a.m.? >> of course never too early to drink wine. >> what did you brinyou bring us >> some things to show where wine is going and in terms of sales. i spent part of the holiday season embedding myself in wine stores and working in sales to get a sense of what's going on for an article i'm doing people are out there buying this

stuff, which is great. first off, for the holiday season, prisecco is going crazy still. >> low-cost alternative to champagne. >> yeah. 20% growth these guys do a good job the main thing is it's a 15 buck alternative to what is a $35 sparkling wine >> is that in these glasses? >> no, i gave you something higher-end >> what did you give us? >> i gave you guys real champagn champagne. >> thank you >> you brought in canned wine, too. >> i did. >> i normally think of canned wine popular among the commuter set. >> the commuter set, camping set, beach going set, and it's taking off

it's a small segment of the market this is from coppola. a producer >> they're doing well. >> doing very well >> what's this on the end? >> i'm familiar with that one. >> this is the red blend, the red blend category la been popular. this is cool i wanted to show you guys this from a marketing point of view they have an app the app has been downloaded -- >> everything is going digital >> yes >> can we get the camera on this >> that's cool >> show us through the camera, if we can. can you see that >> he pits the phone ovputs the the label. now the label is talking to him through the app. >> that's cool if you drink that wine, do you go blind >> potentially or you are transported to australia as a convict, which is who these guys all were >> this is a ten buck red. perfectly tasty.

is it something you would cellar forever? no but as i was in these stores, a woman came rushing up, friends showed me this at a dinner party. i have to show all my friends. it's a cool tweak. >> do you think people know the difference between dd actually, do we have extra glasses if you put prosecco in these glasses and kristal, do you think we'd know -- >> i don't have time for my experiment >> you guys would know no question. >> it's typically sweet. has it gotten drier? >> it's a little more restrained it will not be as dry, elegant or complex as champagne. >> we let you go -- >> single serve wine the industry spent millions to make it happen will this finally work >> i think it will work.

>> you know how much has been wasted trying to get single serve. >> tons have been wasted when i did an article on it, i couldn't keep up on the new releases on cans before i had to turn the article in. they're trying this is basically 275. this is interesting, because this is not chilled down as much as it might. when wine is not chilled down all the way -- >> we will do this during the commercial break years ago, we drank a little bit too much early on in the show, and the rest of the show was -- >> lively. >> complicated, actually the teleprompter became complicated for us >> happy new year. >> think of it chilled down, on a beach, you can't bring glass it starts to -- you see the appeal >> thank you for getting our new years started right. >> cheers to everybody.

coming up, the fed is watching the economy and the bond market is watching the fed. we'll open a playbook on treasuries and the futures of interest rates in 2018 will the new tax code provide a bit of resistance to the manufacturing world? we'll explain in a moment. ♪ (nadia white) the moment a fish is pulled out from the water, it's a race against time. and keeping it in the right conditions is the best way to get that fish to your plate safely. (dane chauvel) sometimes the product arrives, and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred.

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back to "squawk box. it's cold as ice outside this morning. let's tell you if it's cold as ice in the markets u.s. equity futures looking better we'll call it close to unch across the board nasdaq looking down about 2 points s&p up 3 points. and we tried prot secoy ied then the break. you could tell the difference. >> of course you can >> just because of the color you could. >> that's because you have champagne taste. probably >> would you like prosecco better. >> i don't judge they're all delicious. >> not everybody can afford a 250 bottle of champagne, the

cristal. 90% of all wines sold in america are under $15 a bottle if i had not seen the color, i think i might not have -- i would have been happy. >> is this all a ploy to get two glasses in front of you? >> i would have been very happy. i thought that app thing was fantastic. everybody now -- i don't know if this is cynical. you get a bottle of wine for the holidays, you take an app, they put it on the label to figure out how much did this person spend on this. >> exactly >> christmas eve i'm hosting 15, 20 people at my house. everybody is exchanging bottles. i pull some bottoms out that were given to me, i said this is expensive wine one of my guests, gart snow, the general manager of the islanders, he pulls out the app, he says, no, that's not a couple hundred. that's a $36 bottle of wine. that's the new thing

i give you a gift, two hours later you drink the wine, and you say you spent x on me. >> i do that to figure out is this a bottle i want to open >> or regift >> or regift or save for a special occasion for myself and my husband so we can savor it. >> you are con flikflicted abou this i can tell >> what percentage do you regift we have two closets in the house. one closet, it goes to be regifted, the other closet it is for us to drink. >> you can see the prices vary if parker rates it higher, your inventory goes up 20%. >> i regift the good stuff, not the bad stuff. because i don't -- i'm not a wine lover so i don't have -- i'm much happier to give away the great

wine >> hmm >> i think someone will show up on "shark tank" with that idea >> the first asset that goes in a divorce is the wine. i buy it if you're getting divorced, buy it >> that's a bad divorce. arctic cold is gripping the midwest, the east and the south with frigid temperatures approaching record low levels. natural gas prices have flared up more than 13% since this time last year on strengthening demand and the outlook for more freezing weather this correlation never ceases to amaze me every single year this time of year we spikes like that when the fronts come through. >> we'll be looking at the economy for growth and the fed could be raising the rates a few times more steve liesman has our economic playbook for 2018. >> reporter: 2018 could be a

year of big change for monetary and fiscal policy. here's what could happen first, growth in the u.s. could average 2.5% to 3% as the u.s. gets a lift from overseas growth, better domestic demand and stimulus from the tax bill, that's better than previous years when gdp averaged around 2% the question is whether those gains can last. second, the u.s. budget deficit is likely to rise next year and we'll need more growth to pay the tax bill. the ten-year year nears 3% and finally, the fed is likely to hike interest rates three times as jay powell takes the helm and steers the course for the fed along the lines of his predecessor, janet yellen. if the fed really takes off, they could consider a fourth hike the fed will be keeping a close eye on the economy in

2018 so will the bond market. joining us is dave albert, joe terranova is on set with us as well dave, we have heard so many references in the fourth quarter to a credit bubble forming, even as stocks continue to notch records. does that worry you? >> i don't believe there's a credit bubble. fundamentals are sound leveraged finance, fair value. the loan market at 520, that's attractive but it's more of an alpha driven market you have to pick the right credits. i think we're in a range where total return is a thing of the past alpha will be driven by individual country selection, credit selection and industry selection. emerging markets, we look at the mb big, 67 countries, diverse. aaa, singapore down through

venezuela. you have dm versus em, you could pick up 2.7% in growth there we like to focus on local currency sovereign detd and dollars and co corporates >> what specific countries would you buy? >> in the local currency space we favor brazil, second highest real interest rate conservative central bank. russia we still like indonesia on a valuation basis the dollar denominated sovereign, up 10% last year, now 9% this year, the diversions between the best and worst performing countries is 90%. belize up around 58%, venezuela down 32. >> you have to hedge out the currency risk. how much does that cost? >> because i'm not a dedicated investor, i'm a multi sector investor, the currencies i bought avenue the oil collapse are up 15%

>> so you don't hedge out. >> don't hedge >> so what percentage is from currency >> about 70%, 30% from the underlying yield on the asset. >> that's higher volatility, right? >> definitely more volatility but a smaller portion of the portfolio and added a lot of alpha. >> there's a big conversation about tax reform one area for viewers that watch the show that would be greatly impacted is municipal bonds. many suggested that the evaluations of municipal bonds have gotten rich now with tax reform municipal bonds, the attractiveness may not be as much as in the past. do you gyou agree with that? >> you have to look at the technicals because of tax reform, maybe pension funds and insurance companies no longer wanted them. the source of demand is gone with the advanced refundings being gone, that's about 20%, 25% of supply we won't see next year so strong technical demand if i'm a corporation, maybe i don't wanted munis as much

if i'm an individual and i live in a salt state, connecticut, new jersey, new york, california, there's still that demand >> how burned do muni investors feel about puerto rico and what happened there >> you have puerto rico and chicago as the wildcards puerto rico, $70 billion of defaulted debt $20 billion of humanitarian aid needed to rebuild the island a serious concern. before the hurricane, the gos were trading around 60 cents on the dollar, after the hurricane, 45, after president trump said possible debt forgiveness, now trading at 20. even the bonds have dropped to 28 cents on the dollar >> would you buy 20 cent puerto ricans >> 0 to 80 cents is the valuation.

i think there's better risk elsewhere. puerto rico is uncertain puerto rico is the geographic size of rhode island the same population of kentucky. the economic power of mississippi with more debt than the state of new york. >> that's all bad. >> all bad >> the answer is no you wouldn't buy puerto rico. >> i wouldn't buy puerto rico. but you have chicago >> if you know the fed will raise rates 100 basis points next year, should you be shortening your duration on credits? >> depends on what you think of the shape of the yield curve which is driven by mario draghi and the eu if they continue to buy assets, they bought back 30% of all the sovereign countries debt within the eu, they started to buy high yield and investment grade corporates which put insatiable demand for u.s. products and the demand for yield if the curve stays steep and we get growth over 3%, duration could be painful >> what's your average duration on your portfolio? >> in our short duration

portfolio we keep within a band of two to three years, intermediate four to five years. >> how much are you making on the two to three years >> our coupon on that is 3.10. >> would you buy build american bonds if they came with an infrastructure package next year >> absolutely. >> we'll see if they're put out there. coming up, will the new kax code spark new life into u.s. manufacturing and hiring check out these brave soles in t the 12 degree weather in times square you're watching quk x""sawbo on cnbc stomizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need.

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you're going through a lot right now and i know you're scared. but you're stronger than you know. but look, we'll get through this together. and remember... we at the imaginary friends society always have your back! welcome back to "squawk box. time for the executive edge. manufacturers have been largely upbeat about the tax overhaul in addition to a lower corporate rate two changes stand to benefit them and boost operations. morgan brennan has those changes. did we get you a glass of champagne for your report? or are you stuck with a glass of water? >> i'm stuck with water, but that's okay. i think it's going to be a long

day for me >> we'll toast to that >> do it awesome. happy new year >> happy new year. >> happy new year to manufacturers, because the penn wharton budget model estimates manufacturers will see the biggest tax savings, 261 billion from 2018 to 2027. in addition to the shift to a territorial system and adoption of full expensing. nearly all of america's partners have territorial trade systems, so this will allow cash to be moved based on tax paid at each jurisdiction rather than at the set 35% rate experts say that will level the playing field so u.s. manufacturers can compete and the expectation is some of that money comes back to the u.s. for reinvestment add in full expensing which will enable deduction up front for the purchase of new equipment, there's impetus to spend more. companies can win two ways, tax

cuts can help the bottom line, but also encourage other companies to buy more of their products whether it's tax experts, wall street analysts or manufacturing ceos, the immediate takeaway the changes will staunch erosion of the u.s. industrial base meaning fewer jobs lost to places like mexico >> nice. thank you. >> okay. thanks happy new year >> happy new year to you >> oh, boy >> this is the last trading day of the year, is it not >> it is >> it's going to be very quiet out there today. that's my prediction very >> you mean the markets. >> yep probably the slowest volume day of the year. >> okay. i'm getting told we need to tease. great to see you coming up, when we return everybody was looking forward to "star wars," but what movies are

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. >> i'm a late -- lightweight we're talking about drinking all the champagne this morning >> already has two in front of him. >> this is a little like the third hour of -- or now the fourth hour of "the "today" show that's what i think about. >> except it's 6:00 a.m. >> except it's 6:00 a.m. fandango out with the list of the most anticipated films of 2018 joining us right now is eric davis. fandango's managing editor good morning to you. >> good morning. >> so i want to do it this way i want to talk about 2018. for those of us who still have a couple of days left this weekend to watch the film, what do we need to see just so we know? >> i mean, i have seen "star wars" three times. i just saw it again yesterday. i'm a big fan. it's two and a half hours long keep that in mind. if you are looking to entertain your kids for three hours, which i am this week, i have been twice to see "star wars. love that. love "jumanji.

>> do you want to see it on an imax >> you want to see it on the big screen that's how i see it. i see it in the movie theaters that have the reclining seats. that's the one i love to go with my kids because they climb all over the seats, and you have a lot of room. "star wars," "jumaji" would be the big ones also "the post" will be a big awards contender >> what about the movie that they took kevin spacey out of? >> all the money in the world. a little bit long and repetitive for me, but i really liked it. i saw it -- >> i mean, i think it's great. yeah i think it's a really fascinating story if you don't know all the specifics of it i think michelle williams is really great in it, and christopher plummer, nine days they replaced kevin spacey and shot all of christopher plummer's scenes in nine days, and he was fantastic >> did you think that was fair did that make sense to you to do that >> i think they made the decision that they wanted to make ridly scott is a guy that can shoot really fast, and he did it in nine days he said i'm going to do this originally i think he wanted christopher plummer in the role,

and he did a fantastic job >> i'm such a cynic. i think they did it for p.r. to help the film. >> what about "wonder? >> i'm a crier i cried from the first minute on i think one of the more underrated movies of the year. >> what about crishristian balen "hostiles. it's rugged. a little crazy a little repetitive and dry, but if you like westerns >> look forward for it we need to hear about 18 >> avengers infinity war then a pay-off ten years in the making. people have been waiting to see all of these characters of the marvel cinematic universe in films. that's the number one most anticipated movie. right behind it another marvel movie "black panther" which i think groundbreaking cast coming out. i think going to be a big talking point. similar, i think, in the ways that a lot of people talked about "wonder woman" in 2017 sort of this game-changer. a groundbreaking film. i think black panther is along those lines. a lot of other sequels, jurassic

world, and pixar has "incredibles." i think we're going to see a much better summer than we saw in 2017. pixar has "jurassic world," "dead pool." >> can you give us awards season pricks >> this is a wild one. i love the shape of water. i think speilberg's "the post," again. those three movies will be jock jockeying. >> which is bringing forward the most -- it used to be cannes now the toronto film festival is huge >> i think toronto in terms of awards contenders. that's when they bring them all out. s sundance, you can't turn that away >> final question, movie pass. do you know about this >> i do. >> this is a whole new -- it's like netflix for going to the theater. >> yeah. you have to live five minutes from the theater to take advantage of that. >> do you think that everybody is just going to get on the subscription model for movies in the future >> i would say, look, do your research you know, there's always the

fine print, and there's always these sort of little things like we're not too far away from the theater. i'm a family man i have kids. i like the comfort and the convenience of being able to reserve my seats i know where i'm sitting i can do it within a couple of days i think there's a lot of different -- certain theaters you can. certain theaters you have to be within 100 yards like i said, ed radio the fine print, do your research. i would say more options for consumers is always good >> on a weekend, though, where it's 6 degrees outside, and there are almost no activities besides going to see a movie, i mean, would you recommend that people get their ticket ahead of time >> exactly, yes. i would say go to your app, go to your fandango app >> what's the most popular seat in the theater the aisle or the center? >> probably the center is more popular. a lot of people like to see it right in the middle. i like to sit off on the side in those four seats recliners i feel like i have my own studio apartment there. we throw our shoes down, our jackets, and we just chill out >> we have to run. happy new year >> coming up on "squawk box",

new year, new tax code, new headaches. the confusion over the new rules isn't limited to property taxes. what needs to be done to transform tax law into money in your pocket. plus, wall street about to close the book on 2017 what will it take for the markets to repeat next year? we'll talk about that on the otr def isrehesi oth bak auto

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. >> we'll talk about the final trading day straight ahead making sense of alphabet soup what will push shares of google's parent company higher in 2018? we'll search for that in a minute one of the most popular

resolutions for the new year is always losing weight we're going to have the author of a book that uses economics to help you lose weight and to keep it off the crystale does not help, as the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm kayla along with andrew ross sorkin and kevin o'leary also joining us for the hour managing editor the qma. welcome. >> thank you >> joe terranova is also here. a cnbc contributor you are contributing this morning. >> he is >> i appreciate that i hope to continue >> and check out the futures at this hour. here's where we are. we've seen a little bit of air come out of the futures

throughout the morning, but we are now in positive territory despite the fact that we saw some flat to mixed trading in both asia and europe overnight we have seen both the dow and the nasdaq and the s&p 500 all turn around into positive territory. the s&p 500 would open up by four the dow up by two. the nasdaq up by two a fairly thinly traded morning echoing what we've seen throughout the rest of the day we will see what this last trading day brings once we open in a couple of hours time. here's what's making headlines at this hour the price of natural gas rising again this morning that continues a bullish run that it's had since the freezing weather across the country began. however, today's rise, notwithstanding, nat gas still down more than 20% for 2017. it's up about 11% in the last week apple has issued an apology to customers following the revelation that its operating system slows down older iphones to prevent shutdowns apple says it does not

intentionally degrade the user experience, and it's cut the price for replacing batteries in out of warranty iphones by $50 to $29 from $79. you can see the stock is roughly unchanged in the early morning trading after that apology came out last night netflix is giving top executives salary bumps for 2018 citing the new tax law as the reason. the law eliminates certain surcharges ol executive salaries among those getting raises -- david wells, and three other executives the chief content officer going from $1 million to $12 million these are pretty big raises. dproo good f >> good for him. >> the tax law is also mentioned in a new filing. it says it will reduce current earnings by $5 billion, partially due to repatriation of cash under new lower rates andrew >> okay. here we go elan joins us. we want to talk taxes. there's a lot going on is she here with us in d.c. this

morning? i think she is the paperwork is going to be starting to pile up very soon here businesses are waiting on the irs for guidance on how much money to withhold from their wages under the new tax code the american payroll association called this transition a "herculean task and said its numbers are starting to panic. the irs did try to calm everybody down say it does plan to provide companies more details on how much to withhold sometime in january, but the big question here is whether workers will have to update their w-4's or even fill out a totally new one.

>> on we have 1 -800-hrblock, and numbers coming from local offices trying to get information about what just changed, is there anything i can do here at the end of the season, at the end of this year to improve my situation? >> kayla, she said that they have 50 employees who have been working full-time just in trying to understand this new law before it goes into effect in 2018 back to you. >> some people are calling it the tax attorney employment act. that's keeping a lot of people in business. elan, thank you. turning our attention to the markets now, the -- they're tracking to end the year with six full weeks of gains. that would be the first time

that happened since 1954 allison deans founder of acc advisory and our guest host for the hour, ed -- and joe terranova is still with us >> still here. still contributing i'll be needing to contribute more >> here's your chance. >> kevin and andrew are going pretty hard here >> allison, set us up for the new year because we've had a 2017 where we've notched record after record after record, and it makes you think it would be impossible to have a repeat in 2018, but there are so many levers getting pulled in the market right now >> i'm not sure we have a record i do still think equities are the place to be. at this point i probably would diversify and take some of the winnings from the u.s. and spread them overseas even though the markets are good there, they're behind us in the recovery also, i think near term there's enough uncertainty around this tax policy, it does feel as if it's going to give earnings a big boost for the next year. you know, up to 10 %, 12% earnings i don't know how stimulative it's going to be for the economy, and with the market

trading at 17, 18 times earnings -- >> you think it's going to give a boost to the markets, not to the economy, and then we're going to realize it on the other end? is that your feeling >> realize on the other end? >> i'm trying to understand if the markets -- the market is going to go up you are saying it's not going to give a real boost to the economy. >> i don't think it has a long-term. there are enough pros and cons going on that i think it boosts earnings, but i don't see it really significantly improving wages, capital reinvestment. there could be some, but not a lot. >> that's why i said it will come out in the wash at the other end. >> with the market trading where it is, you know, you're going to have to boost in earnings and pushing the market somewhat. we are in a global growth environment. >> we're staying at a 20 pe with 17 forward cash flows are increasing, at least domestically we spend 15% how can i not want to own those equities even if pe doesn't go down, i'm going to get the bump of 15 % just on cash one of two things are going to happen appreciation of the asset value

or the pe is going to compress which is it? >> first of all, i don't think pe expanding, and we have rates going up in an inflationary environment. i did start by saying i think all equities are the better asset class to be in i just think there's a better group opportunity overseas my view is the market moves with potential earnings growth once we get this one-time leg up with 7% to 8% earnings growth >> should i mine for those one-time american companies that are going to get a 15% boost in cash not everybody is going to get that we've started to see that. goldman saying, no, it's going to hurt us, and the s&p guys are 47% overseas already pure plays, which mid-cap u.s. companies, are they not big opportunities for one-time >> i think one time except for those that are in the market already. 20 times earnings. 18 times -- >> multiples too >> also, you often get pretty good returns late in the cycle, which is i agree where we are. when i think the key to next year is not so much just the tax code per se, which will be a one-time boost, but rather, does

the increase in productivity gains, which we've seen over the past few quarters, is that real? we had 3% productivity in the last quarter if that's the beginning of a new option in productivity, which was weak for many years now, and maybe the tax law helps a little bit in that regard, the sense that it encourages capital investment, i think that's the key to this year in the markets is at the beginning of a longer term cycle or economic growth potential rises and both -- we just can rise without increasing inflation, and profits can rise. i think that's the key i think this is an area. if that happens, if you get a big productivity surge, then i think the cycle can last quite a bit longer >> where do we get the productivity surge we're already at low employment levels >> no one is talking about infrastructure how realistic is it? >> do we think that happens? >> i don't think we can afford it now this new tax bill will be over

$1 billion increasing the deficit where is the additional money coming from? >> i'm sure the administration will present a plan one month from now >> you don't think there's going to be a plan >> i think it will be legislated >> well, the restructure has been a big democratic priority for a long time. if the president can coral republican votes to go along with what the democrats have pushed for a long time >> why would the democrats do that >> i think there's a bill that schumer introduced early in this year -- earlier -- i guess this year still >> that was pretty much dead on arrival because at that point, you know, the -- nothing the democrats did was anything that the -- >> corrected if you modified that a bit to please the president and a few republicans, maybe you get a deal done. i don't know >> but more broadly, you have a tax reform package and potentially, potentially, an infrastructure package two measures of fiscal stimulus at a time many argue the economy does not need it were you at risk of overheating? >> you know, there's enough global growth and global demand going on

we haven't seen wage growth, and it often comes from a big spike in inflation we haven't seen that if it stays on course to start raising interest rates, i don't see it significantly overheating. i see a highly volatile market once you have adjusted for the earnings >> good volatility or bad volatility >> bad volatility. if you are a nimble investor, it's great volatility. not everyone sitting around waiting for pullbacks. that's why i think you have to be more global universefied. >> meanwhile, vol is at historic lows it's amazing people just don't believe there will be volatility anymore look at the vxx. >> the second people think it's gone forever, that's ushually when things come back. >> it helps you make money >> happy to see you. allison deans. >> when we return, what is next for google's parent company alphabet in 2018 the stock climbing about 32% in 2017 we're going to talk product expectations and what investors should be watching for after the break as we head to a break. look at u.s. oil prices at this

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welcome back to "squawk box" on this chilly friday morning. froo ray times square that is preparing for new year's eve take a look at the last trading day of the year. we have turned around slightly throughout the morning, but the gains are ever so slight if the s&p opened, it would be up four. the dow would be up six. the nasdaq would be up three points. >> i think towards the end of 2018, they'll start a commercial launch at wamo and push it aggressively in 2019 and build it out over the next -- >> this is so not priced into the stock of google at all >> at all. >> right now when you look out a year or two

or three, it looks like what it looks like uber what are we talking about here how would you even model what it will be? >> you know, i think by 2025 they'll generate it by $5 billion revenue from zero today at a 20% operating margin. >> that business is what people have been very confused there's a misunderstanding about what wamo is are they selling a brain to a car that they're going to then give to chrysler and all of these other guys, and know is going to pay for that? is it a fleet, a self-driving fleet that's like an uber? what are we talking about here >> i think it will be both from what i have been -- from what i understand they'll have their own fleet of cars they'll get it from chrysler right now.

>> i snap my fingers or i click my phone and it comes to pick me up i couldn't give a damn what brand it is. just like a railcar that moves stuff from one side of the country to the other we are going to commo dot ize the auto industry. why are they not all shorts? >> i they the entire automotive industry will be disrupted no matter whether it be car rentals, vehicle purchases, everything along that line the automobile industry, they know this. they've seen it. gm, surprisingly, in my opinion, is investing aggressively in a.v., autonomous driving they're second behind waymo. >> that is like our conversation on halftime about tesla. as we're talking about it, is it a software company i know as you believe it's a car company.

>> do you think there's going to be the brain -- the google version of the brain, the gm version of the brain the tesla. >> tesla has the lead in this. in the software you are talking about, tesla has the lead. do you believe tesla is a software company or as kevin discussed yesterday, it's just a car company. >> intel, interestingly -- intel is fascinating because of their acquisition of mobile i, what they're trying to do with the cloud, and their ideas with all of the oem's >> to answer your question, it's not a winner take all. i disagree i think waymo is actually in the lead right now above tesla tesla will catch up quite quickly. it's a $7 trillion addressable market that's developing right

now. apple has -- is talking about investing in the space right now. there's going to be multiple different winners. intel is another big winner. >> where is uber in all of this? the public -- or the public-private valuation, at least the one that's out there, $69 billion. soft bank put in $1 billion, and about 30%. then bought a huge slug of the company in the 30% discount. >> i saw that. >> so where do they land in the end of this? >> we're going to invest aggressively in the space. everyone was exposed to this industry, but -- >> is this 1999, meaning everybody is over spending, and the good news is we'll all come out on the other side even better because we'll have this technology and there's going to be a lot of losers >> there will be losers. i mean, in my opinion, i think the automobile manufacturers, oem's that are not investing right now, and there are a number of them that aren't, they'll come out on the losing end. industry is evolving everyone is investing significant capital in this

business. zbloolt they're in the process of having a commercial product out later this year. >> is there an advertising component? obviously the thing that google does better than anybody else is the advertising piece of it. >> i think it's a huge opportunity for google itself. i think it will overturn the spin-off in waymo. >> straight spin-off >> straight spin-off i think it will be the first >> is it going to trade at a $69 billion valuation or as the trade indicated yesterday, 43.

which is it, do you think? >> it depends on how they evolve with autonomous driving. >> i'm saying it comes at 2018 there's a lot of pressure to take it public now is this going to be a take under when it finally goes public. all those poor guys that put in money -- >> what is the soft bank investment signal to you the fact that they were willing to take a lower tender at $48 billion valuation. >> listen, i think what it is with uber and dara it's a recognition of the fact that, you know, uber has had the past three years has been somewhat disastrous from a p.r. perspective. not just p.r everything else. i think there's just in the process of trying to resolve that uber is a great company. it's a great business model. ultimately i think ougautonomous driving, they will turn profitable because they will eliminate the driver cost, and i think they'll come out on the opposite end of that in a much better shape with ougautonomous driving as well, and ultimately that's how they turn profitable.

you know, i'm not here to really say exactly what the true valuation for uber will be, but i think over time, you know, given the business model and the direction that uber is moving in, i think it will be -- i think the valuation creeps up quite significantly. >> and you could be correct. maybe waymo is in the lead, but isn't it about miles driven, and tesla has over $1 billion miles driven relative to waymo, which is in the millions >> it's not the level for autonomous driving, which is really with no human intervention, no human driver within the car they're not there yet. i think they're level two with their autonomous driving waymo is the only one that's at level four. >> you have the rest of us driving non-autonomous vehicles. all the autonomous vehicles are going the speed limit, and everybody else is speeding past them at 80 miles an hour

the roads are going to be very fast >> quick question. is it a mistake or not for gm to be investing as heavily as it is meaning, given that there's this first move or second mover advantage, does it matter if they have the brains or want there's a model issue here chrysler is spending nothing on this they're saying we don't understand this stuff. we're going to let these going the people do it ourselves >> they'll change quite quick. i think gm knows that over time because of this technology people will buy less cars, and that's how they make their money today. coming up, we open up the playbook for the biotech sector. what you need to be watching as we head into the new year. and just as we go to break, a look at your top billboard hits for 2017. "squawk box" loves the shape of you. us. it's what this country is made of. but right now,

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after underperforming in 2015 and 2016. what's going to happen when trading resumes in 2018? our own meg terrell gives us her biotech playbook

medicine is changing from the way we think about treating disease to how we may pay for it here are three predictions for pharma and biotech in 2018 drug pricing in focus. there's been no major government moves on prices since trump took office 2018 brings new challenges the rise of one-time treatments for cancer and genetic diseases that offer new hope to patients, but will carry price tags of hundreds of thousands or even a million dollars. the focus will turn to how we pay for those medicines. second, immuno-oncology dominance. already drugs that use the power of our own immune systems are improving the way you treat cancer it's a battle on wall street as well in 2018 it brings key data that can move stocks of bristol-myers, merck, astrazeneca and roche. also, it's marking a turnaround from a relatively slow 2017. when we return on "squawk

box," the good, the bad, and the ugly of tax reform and what it means for business and your wallet in 2018 as we head to break, take a look at u.s. equity futures that have been building in a positive direction throughout the morning. more on that when we come back mvo: you're not doing work to help somebody, you're gaining something from meeting mr. adderley. it's a calling to not only everybody in this neighborhood in miami, but to the nation how great we are. and how great we can be. ♪ ♪ i'll stand by you. ♪ i'll stand by you. ♪ and i'll never desert you. ♪ i'll stand by you. (daniel jacob) for every hour that you're idling in your car, you're sending about half a gallon of gasoline up in the air. that amounts to about 10 pounds of carbon dioxide every week.

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good morning welcome back to "squawk box. we're live at the nasdaq market site in times square among the stories front and center at had hour as we get ready for new year check out the prices of crude oil this morning it is higher than perhaps -- wti crude is now holding above $60 per barrel this morning. the last time crude ended the year over $60 per barrel it was 2013. it ended that year at nearly $99. then plunged by nearly half the following year crude is now at its highest level in two and a half years. folks at aramco have to be happy if they're looking for their ipo in 2018. also, ibm and priceline have

settled a patent dispute they accused the operator of violating four of its patents. the terms are confidential ibm did say it includes a patent cross-licensing agreement. an m&a deal has been scuttled. sanbridge energy has -- it will reimburse bonanza up for the transaction related expenses i remember investor carl icahn, the biggest sanbridge shareholder, has opposed the deal he is getting what he wants and had pressured sanbridge to abandon it also, a little bit of arctic cold gripping the midwest, east, and south with frigid temperatures approaching record low levels over the next few days natural gas prices flaring up more than 13% since this time last week on strengthening demand and an outlook for even more freezing weather. we also talked about people maybe buying coats that's why i'm wearing my blazer today, though. someone tweeted out that the

wardrobe folks might have gone on strike given my shirt combo that's -- it's -- >> it's very festive >> it's my fault that's not the wardrobe folks, guys >> it is nice to have a jacket to mute the busy pattern straight plaid on screen, i think it would have been -- >> a picnic table. >> the shirt has market confusion. there's no question about it >> i was -- you know, you got to ammortize it you can only wear it basically once a year. >> that might be too many. >> all right we want to talk a little bit more about the gop tax plan and its impact on 2018 we've been talking about its impact on the market, but let's bring in michael strain, whose aei's economic policies director and david wessel, the economic studies senior fellows with the brookings institution. also the director of the hutchings center on fiscal and monetary policy. thanks to both of you for joining us michael, we've seen this rush at the year end to prepay these property taxes there's a whole lot of nuance for who qualifies and whether it will even count. do you see this as the sole

moment of chaos in the rush to implementation >> well, it's certainly a moment of chaos, and, no, i don't see it as the sole moment of chaos i think that there are a lot of provisions in the new tax law that we're going to have to figure out how they work and what they mean for households and businesses it's going to be great business for lawyers. there is going to be some irs guidance that has yet to come, of course. the treasury department will have to weigh in some of this is ultimately going to have to be settled by the courts i would point out that i don't think that this is anything really unusual for a bill of this scope and this magnituking for there to be how the bill will be implemented. i think the fact that people are trying to get their checks in before december 31st, just a few days after the tax has passed, has added drama to the situation. i think, you know, we're going to have to figure out how this works as we move forward for the next through months. >> social media has changed the monday aker that people were using throughout the legislative

process. trah tax reform is hard we now say tax reform implementation is hard i wonder about how exactly this is going to take shape >> i think michael is right. this is a moment of chaos. i think he is understating how much the rush to put the bill through and how quickly it takes effect for multi-national corporations that takes effect on january 1st a lot of the market won't have any clues about how this complicated international tax regime will work i think probably the most serious problem is going to be defining what is pass-through income and what is not the congress tried to put some guardrails in or some bumpers or something to keep people from exploiting this loophole, but they can't possibly have thought of everything, and people all over the country, lawyers and accountants, are trying to figure out one income can benefit from this and what can't. i think that's going to be the big scandal of this thing. i think we'll be seeing stories for years to come about how people turn their wage income into business income to get the

pass-through benefit >> but we had this conversation yesterday about how just the process of being abouting a passion-through will have to get harder it will have to get more expensive to create a barrier to entry so that everyone can't do it, but, michael, i remember throughout this process when there was this uproar over the fact that so many of the minuta of the policies were being shared with the lobbyiests and with the industry groups, but on the flip side, if i were to play devil's advocate, looking at some of the very complicated accounting changes that are having to happen before the end of the year, if you are a ceo, i mean, how much detail do you have to make some of these decisions and how much time do you actually need to do that >> well, look, i mean, david is write. the international provisions of this bill are truly complicated. the way the bill is going to affect multi-national corporations is complicated. not everything may be done by january 1st. the bill is implemented on january 1s as well, but it may take corporations a little more time than that to adjust, and that's going to be okay. they're going to figure out how

to deal with this. i also agree with david that i think a bigger challenge is going to be individuals trying to figure out how to deal with these pass-through provisions and with their employers trying to figure out how to deal with the pass-through provisions. the big multi-nationals will be fine they'll figure out what the new law means for them >> does it indicate that even 1% of businesses that -- >> how is that to say? >> i think -- certainly the irs can't audit everyone, and that's going to be a factor here. that's not a new feature of the tax system i mean, as you look at -- >> my anxiety is knowing that so few -- so few businesses are going to get audited that if you

have to take an opinion basically about how you are doing it, you might be on the underpaying side rather than the overpaying side and plead for forgiveness later. >> sure. i mean, i think -- what's -- what's -- >> you might want to be careful about that i think what's relevant is not the number of businesses, but the share of business income it's the irs looking at the irs will have to figure out how to maneuver in this framework as wrl. it's not long going to be figured out by january 31st, but that'sen the end of the world. >> i to know the impact that it's going to have on ireland which used to advertise very low tax rate or canada which said it was much cheaper than the u.s. and corporate. 26% in quebec, for example >> does this move capital back

to the u.s.? >> i think the question is maybe. look, there's going to be some other countries that are going to react >> they have to pay at least some minimum tax that's a change in the law there are no provisions in here to stop companies from inverting from moving their headquarters overseas and i don't think you can expect the rest of the world to sit quietly by if capital starts or reported earnings because a lot of this isn't capital. it's where you book your earnings >> how will the reported earnings shake out as a result of this? the u.s. is narrowing the gap with other countries, but it hasn't closed it >> we know that blue state governors are not sitting idly by democrats have said they don't rule out repeeling it or attempting to repeal it if they have a wave election in 2018 michaeling, we asked this question earlier this week, but i'm curious what you think the

certainty is of this bill. >> that's going to be part of our political life for, you know, at least the next four years and possibly even longer >> david, it's joe let me ask you many have said in the last couple of weeks that the spending that we're going to do over the next decade is only going to quicken the timeline for the need to tackle entitlement spending do you think that's the reality?

what we've done here is widen the deficit by more than $1 trillion depends how you think of the temporary provisions and the question is what will happen as we've seen paul ryan is talking about cutting entitlement spending doesn't look like the politics are right for that mitch mcconnell isn't interested look, someday we're going to deal with this >> i think after the 1980 reagan tax cut there were tax increases that followed. they realized they had done too much i fully expect that we'll be raising taxes sometime in the next four to eight years without debt the question is whether that will be a way to get entitlement reform or not.

>> even bernie sanders thinks that the tax cut -- michael david, appreciate it have a great new year. >> thank you zbloog thanks so much. >> okay. we've got -- want to check in on our twitter poll which provisions of the tax bill do our viewers want to hear more about? more than 40% of you said pass-throughs. state and local tax deductions are second place there's still time to vote it's pinned to the top of our twitter page do check it out at squawk cnbc coming up with new year's three days away, good time to take a look at how we can all keep to our weight loss resolutions. we all have them the co-author of the economist tells us how dismal science can help you lose weight and keep it off as we head to a break. a look at some of the top grossing apps on itunes over the past year. squawk returns in just a moment.

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>> take a look at where the futures are right now. we have been building momentum throughout the morning, and if we were to open right now, we would see green arrows across the board. s&p would be up six.

dow would be up 22, which is off the highs that we saw just a few minutes ago, but still, quite significantly higher than the negative territory where we were at the beginning of the show the nasdaq would be up five. joe, you think this is significant, the mooumt that we've seen despite the fact that this is a notoriously thin volume trading day >> it's a little bit of an end of year mark-up. i also think -- kevin has done a great job in 2017 talking about the russell. >> issue is most people are going to throw that into the russell? >> would be a mistake in my view, because the majority of the companies in the russell only about 350 of them have a decent balance sheet, and make money. you have to make money to pay

tax. people forget that >> flagged all of last year, but regarding this new year, and all of our -- >> the rest -- >> we're going to talk about dieting because it's the new year everybody has a resolution to weigh a little bit less. we all do. >> joining us right now chris payne. straight from the book -- straight from the book's cover a formerly obese economist and co-author with robert burnett of the economist diet between the two of them, the dismal signs help them lose a combined 125 pounds. >> tell us what the diet is. by the way, you're using lose it, the app lose it. >> using two fitness pal and lose it, and the reason they work is it's such a pain in the u know what to put stuff in there that you just don't eat

it you say i'm not going on spend the time to go turn on the app and put the pie in and -- i'm just going to starve. >> we knew that salad was good for skpus that we were eating too much burgers, fries, pizza with needed to cut down on what we ate realizing that, we needed to self-impose eating austerity we needed something sustainable. opting for a short-term diet whether it's shakes or this or that, it just wasn't going to work people regain the weight when they do the short-term thing.

>> it's an economic problem, and that is what we're trying to say. most people -- people watching this show who want to lose a few pounds need more nutritional -- they realize that we have had a food processing revolution that goes back to the 1970s it's all about better storage, looking after food, but it makes cheaper -- it makes it cheap price comes down there's more of it you recognize, first of all, that it's an economic problem. then you realize that you are -- it's basically scarcity, right it's a problem about choice. how do you change your behavior? how do you bring in behavioral economics? our number one tip, and i'll tell you this now, you've got to weigh yourself every single day in the morning

you have to break through the tunnel vision, the bad thinking that comes when you're experiencing scarcity. it's like being short of money, short of time, same thing when you are dieting. you don't think clearly. you start out the day. you want to be -- >> do you think the scale can create great anxiety, though some. >> if you can't measure it, you can't manage it. people investing in stocks know that >> proteins cost a lot more, but you have less caloric count to them this is about -- >> i mean, there's a very much -- we actually ourselves are experiments and realize that eating too much pizza, carbo hydrates was definitely bad.

>> they bought a basket of bread,ing they inhaled the bread. >> in the same way they bring these things in front of us, and you guys watch the show. you know what happens. >> also, from an economic perspective, food is cheaper than it's ever been. >> that's our point. >> so you are having to behave as if food is scarce we have many tips in the book, but, for instance, my co-aurtor, we were overweight because we loved eating i still eat all the bread that comes, but we've learned one behavior, you have to budget, right? you have to think to yourself, well, if i'm having a big lunch, i've got to skip dinner. >> would i say one-third of my life is all of a sudden consumed with what i'm eating, what i'm not eating, whether i'm going --

all of this becomes very difficult to do it all the time. >> well, you have to put the attention in if you actually want to lose weight and keep it off we have never relied on exercise to lose weight because exercise, you're not going to keep that up for the rest of your life or some amount of exercise regime when i did kpenter size, you knw what happened? i got hungrier that didn't help me lose weight. number one, when i -- if i do exercise, i'm not doing it because i think i'm losing weight you can take that mental time away you have to think about it, but in everything, you have to come off autopilot eating, right? if you want to save money for the future, you have to think about what you are spending. i mean, as economists we have to think about benefits now, costs in the future. that's life. >> this all makes sense to me. i'm going to read this book. >> fantastic.

>> i walk a couple of miles every day. >> i did no carb diet. you go out of your mind, though. >> what happened when you finished >> gained it back. >> there you go. >> you're right. >> great to see you. happy new year >> can we drink this it's okay. >> absolutely. >> we got permission now >> 90 calories >> it is the season to kick bad habits why the so-called sin stocks could face a tough start to 2018 that story is up next. check out the futures. we're still in green territory, although we are losing a couple of points across the averages. we'll epou pteonhake yosd tt. squawk will be right back. for your heart...

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let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. landon joins us with more on that story is this having to do with resolutions or something else going on >> if you want to kick some of the old habits in the new year, consider taking a closer look at the sin stocks in your portfolio. let's start with the booze with the help of our partners at kid show, looking back the past 20 years, these stocks typically perform well in q4, and they

start to lose their biz in the new year ambev up and slides about half a percent in january molsten, coors, and boston beer slides 4% and 2% respectively. diageo up half a percent in q4 and jumps about 2% in january. to back-up stocks. smoking results in q4 before burning out in the new year. altria up 7% on average, and then drops one-third of a percent. philip morris up 2% and then down 3% typically in january stocks more of a gamble. went up 5% and holding on to the ganlz in t gains in the new year. mgm up about 1%. then they both slide about 2% on average in january looks look they're off to a great start. can't wait to see the 8:00. >> cheers. thank you. see you soon we're still drinking

the reading gets a little more difficult >> what happened to your glass >> i gave it to you, andrew, in case you forgot. it was about an hour ago >> now i remember. okay thank you, guys. happy new year >> and yours is just offset. we have more where this came from >> more when we come back. we're going to talk about the media landscape for 2018 wit chael wolf from activate back in a moment raphael: just four brothers who hate bullies, and love this city. leonardo: woo! michelangelo: whoa! haha. leonardo: gear up guys!

the final trading day of 2017 the major averages on track to post the best yearly gains in four years cold as ice. natural gas prices spiking as a winter chill spreads across the united states. plus, battery gate apple apologizes for slowing down older iphones, but is it too late to say sorry? the final hour of "squawk box" begins right now ♪ is it too late now to say sorry ♪ ♪ because i'm missing more than just your body ♪ live from the most powerful city in the world, new york. this is "squawk box." good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square

i'm andrew ross sorkin becky and joe are off today. hanging out with us today is mr. wonderful. we will cheers to him this morning. kevin o'leary. we're going to get a lot more. how are you doing there? >> very good, actually >> what number glass are you on? >> i've been pacing myself you know, it's a three-hour show, and we only got one bottle, so i think we're going to be okay >> okay. i don't know about myself, but thank you for that >> yeah, you're struggling a little bit >> well, you know, i don't -- i feel like you passed off a couple of extra on me earlier. >> well, you were drinking the cheap stuff, proseco i'm staying with the crystal >> where is kathie lee and hoda when we need them? we're going to have a quick check on the markets right now to show you what's going on this friday ahead of the new year here we go the dow looking like it's going to open up -- in fact, joe right before he left said it's going to look like a strong open in his mind s&p 500 looking to open about five points higher s&p, as i said, up 17. nasdaq up five making headlines this morning, president trump giving an imprompt your wide-ranging interview with the "new york

times" from mar-a-lago they talk about the russia investigation on that topic. president trump said he has no expectations for special investigator robert mueller. he said he thinks that mueller will be "fair" and wouldn't comment when asked about the. >> he said he could have made salt less severe they also talked about infrastructure and health care, saying that those two issues could be bipartisan.

on health care he says bipartisanship is possible because now we've essentially gutted obama care and on infrastructure he says $1 trillion is still possible because he says they're spending $7 trillion in the middle east, so why not spend $1 trillion on our roads and bridges? >> it makes a lot of sense the question is will democrats -- democrats who want infrastructure spending, do they play along ahead of a 2018 election that's the whole -- >> most of the sovereign wealth funds around the world have signalled to both paerts parties, and this will be signal that this is the rebuilding of america. it's a long-term investment, and it always has been this is going to be a blend of private money, sovereign money, build america bonds. >> is it half? is it a 50-50 deal >> it could be anything you want, andrew, because at the end of the day people understand if you look at these roads, we need it these roads need fixing. make them toll roads i'm cool with that that would be the best >> very interesting interview.

it's sort of a year-end wrap at the "new york times. separately, talking about infrastructure, new york governor andrew cuomo appearing on "power lunk" yesterday to voice his dismay with the state and local tax changes impacting his state and others. >> kwoemto also talked about how much new yorkers already pay >> there is no state in the united states of america that pays into the federal government more and gets back less than new york state we send in $48 billion more than we get back.

we subsidyize every other state. >> very interesting to hear governor cuomo striking back meebl, the president saying i would have knocked out salt altogether if democrats had been willing to give something else up >> by the way, do you think that this ever gets reversed? meaning, if democrats were to get back into power in washington, or is this toothpaste so far out of the tube -- >> it's so hard to turn around something you have given >> right >> if you want to be lekd again state by state, you can't do this >> he is selling his wook book he is selling new york other states, like florida and texas and colorado are going to start selling their book saying why are you paying crazy taxes up there to those guys what are you doing this? move here and spend six months and a day here and save a ton of money.

>> but do you -- what do you think of his argument? i have made the same argument that if you look at the state of new york -- by the way, many other states like this the amount of money that this state is effectively subsidyizing the rest of the country is remarkable. >> cry me a river. >> this is the most inefficient state in how it spends its money. that's what that tells me. that they're not good at taking in taxpayers' money and redeploying it that falls on deaf ears to me. oh, please, please, please you know what, stop spending money. >> this is the hirest tax jurisdiction in america. city tax, state tax. >> i'm saying get rid of this, but give me 100% of the money that i'm due >> you do that, and then you run

your business the way you see fit. >> but that's not how this country rolls. >> that's where we should go et to >> then you are not even running a united states. >> you are running switzerland, and it really works. that really works. trfrm just tweeting this morning dwr is the united states post office, which is losing many billions of dollars a year while charging amazon and others so little to deliver their packages, making amazon richer and the post office dumber and poorer should be charging much more taking a shot both at jeff bezos's amazon this morning, and the operations at least from the management of the post office, but i would -- if you look at the amazon chart right now, do you start to worry that the post office is going to say to bezos, no, you have to pay more >> the person who made this point first was warren buffett he said bezos is the smartest entrepreneur in america. he took the trillions invested

in infrastructure and made himself a central order hub to take advantage of all the other infrastructure the fedex, the post office, ups, all that, and made it the destination bh you place the order, and he rides the back of everybody else look, at the end of the day bezos probably has enough capital now to buy one of those distributors and so even if the president is unhappy, he can find another way -- >> is this a microissue? is the post office issue a microissue for the larger regulatory pressure that amazon may face over the next year or two, given the rhetoric at least that we have now heard from the president? by the way, remember, the president had rhetoric around at&t, time warner, and then everybody said he is not going to do anything because he is a business friendly guy. now we're back >> the cost of medicine. all these things are tweeted, and they come and go started with hillary you pick a sector like pharmaceuticals. i'm a large shareholder. she slaughtered it cost me 20% for two months then we forgot about it, and it went back up >> you generally think of a

republican administration keeping their hand out of business, whereas it seems that the populous nature of the president makes him want to be more involved. does that make investing risky >> i think the lines are blurred now in terms of what the republican brand means versus democratic brand >> why should he not be supporting jeff bezos saying this is one of the great american companies in the world that is creating new jobs for people i know i'm asking just because he owns the wa washington wash post -- >> i would argue this way. he has two channels of communication. the official white house and his own twitter account. i'm really intrigued you are actually hearing from the man's own personal opinion, and why shouldn't the president have a personal opinion? i'm cool with it you never see the white house put out a press release like that he puts it out himself.

>> he wrote yesterday disaincident positived that china is allowing oil to go into north korea. there will never be a friendly solution to the north korea problem if this continues to happen joining us now to discuss escalating tensions over north korea is michael o'hanlan, foreign senior policy fellow at the brookings institution. good morning >> good morning, and happy holidays to you all. >> after that tweet from the president, we did see some comments out of china denying that they were going against sanctions and shipping oil to north korea.

>> they don't have a real interest in having a bad report with beijing, and i think their assessment is consistent with ours and reinforces the point. also, one can imagine how the chinese spokeswoman could be sort of finessing this issue she could be saying there's no official chinese policy to do this the degree to which we clamp down on private business men doing it, you know, is sort of variable, and a function of a lot of things, including our own capacity, but also our own preference to really squeeze north korea or not at a given moment the fact that she's denying there's any official chinese policy to allow this kind of shipment at sea doesn't rule out the possibility of private chinese ships and business men doing it perhaps with some degree of the government looking the other way. >> how long is the clock on sanctions, though? how much time is running out when you look at 2017 and what north korea was able to do this year, they not only put together an intercontinental ballistic

missile that could reach the united states, but late this year we now learn that potentially they could have the capability to tip it with anthrax or something else that would be devastating rex tillerson wrote that 90% of the hard currency believes that he is dried out. at one point you believe these sanctions have been successful and have actually thwarted this threat >> a couple of points. well, first of all, you're right to sort of look back on 2017, and as you know, they did three icbm test launches during that period of time starting in july. we don't really know the degree of the perfection of their technical flolg, and it is clearly improving. they also did the one huge nuclear test in september, which was their sixth test overall the first one that we think was probably a hydrogen bomb, thunderstormo-nuclear weapon with the yield more than ten times that of the hiroshima or nagasaki bomb. that's quite a year. in terms of time running out, however, i'm not sure there ever is an end date when you say, you know, we just can't tolerate this any longer. if there were going to be such a date, i think it's probably ten years in the past.

they've already got a nuclear arsenal, and they can threatin seo -- threaten seoul and tokyo i think we have to think of this more as a long game and think of it more as creating pressure to get a reasonable compromise negotiated deal. not a complete nuclear disarmame disarmament. it's not going to happen >> do you think the president will put pressure in the form of trade in the next few weeks? >> i think he will gradually, and the strategy stepped up pressure on china too. i don't think china is going to go as far as we want ever. we're in for a tougher year with u.s.-china relations where. >> michael o'hanlan, appreciate your time this morning happy new year >> likewise. thank you. coming up when we return, former president and coo of mtv and viacom, michael wolf, will join us with his predictions for the media industry in 2018 always has provocative things to say. stay tuned you're watching "squawk" on cnbc experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts?

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welcome back into "squawk box" in 2017 >> welcome back to 2017 on december 29th. >> kayla is here mr. wonderful is here as well. figure for media we've been talking about takeovers a lot. joining us to discuss his outlook for media in 2018 is

michael wolf, founder and ceo of activate i had a lot of jobs at viacom as well you had. o.t.t., the streaming wars, where this is all headed as a function of now both the at&t time warner deal if you think that that plays into it, and also -- >> disney-fox. >> the disney fox deal even more so given what happens to hulu. >> we have a number of companies that are going after that $100 billion a year that is spent in the u.s. on television >> we have 90 million prime members. hulu with 50 million everybody is going to go after that we're going to see some real wars they're all -- they're all arming up. you've seen $6 billion in spend for netflix. you see apple is likely to spend just as much prices, netflix raise the the price $9.99 to $10.99. hulu dropped its price from

$9.99 to $5.99 we're about to see these guys coming after everything, and then on top of that disney-fox means that disney will now control hulu >> okay. let me ask you a separate question we keep talking about apple and its apology this morning where is apple in this ballgame? they just spent $200 million on a drama or comedy about morning shows. i don't know if you saw this >> yeah. >> they're going to be in this business then you have facebook which also has already gotten into this business to some extent, but not really yet >> facebook, what they're doing is really lame by adding a watch button, i mean, ultimately what facebook wants to do is go after user generated videos their ability to spend -- they say they're going to spend $1 billion. apple says it's going to spend $1 billion that's not going to go very far in this environment.

>> the average american is spending $1,200 a year on cable, and they're spending it on top of netflix there's more room to spend people want all of their sports. >> as hulu becomes a chess piece given that you also have 30% owned by the parent company of this network, comcast, and then you have the 10% owned by time warner, i imagine they say we're not going to give you content anymore. buy us out of this deal. or they try to make it difficult to end -- and try to force them to sell it >> what ends up happening, though, is suddenly with disney and fox.

>> do you think regulators -- you have where -- you are the president sawing he likes -- he is friends with rupert murdoch, and then there's a greater intent to raise prices across the board for even the at&t-time warner deal. >> the att-time warner deal, this is all about politics, and did really should go through what happens with the justice department or whether there's a negotiated celtsment, i don't know this is a deal that should happen >> you're a music guy. does apple buy spotify >> they're going to buy spotify or sound cloud something that gives them more r repe reperatoire. >> they bought beats >> apple music isn't doing so badly. what you have is both -- apple music and spotify, each of them has about 30 million tracks. the same tracks. >> buying spotify does what for them >> better user interface

finally. apple music is terrible. >> that's an spenexpensive interface. >> they can raise prices takes out a competitor >> p ale can pull out its checkbook any time apple gets other subscribers, and they're not necessarily -- >> crystal ball. two deals that happen in media >>le with, of course, there is the time warner -- the fox -- >> these are in your brain the ones that haven't happened yet. >> i think that somebody is going to end up owning one of the other entertainment companies. we saw discovery and scripps we're about to see more. >> okay. cheers to michael wolf thank you very much. appreciate it. we're going to talk about block chain and bitcoin. you told me to buy bitcoin do you remember hanginr me?vi dne 2012, my wife just reminded us last weekend ation?

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why block chain -- plus, tim cook, jeff bezos, mark zuckerberg who won tech in 2017 which company will dominate next year we're opening up the cnbc playbook right after this break.

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jackson five andrew ross sorkin along with kale why among the stories front and center, ef's grew in popularity this year, and now we know by how much more than 460 billion dollars of new money flowed into the u.s. this year. that dwarves the prior record set last year. you're in the ef business, sir >> this 2018 will be a real shift in the thinking about what people concern themselves with etf's, actively managed etf's are coming where you craft the art of the science of building an index not market cap weighted. that's what i did with ousm. i said find me those profitable small cap companies, and they did that and they built it, and i pay them it works it mined the 300 stocks out of the russell 2000 that are profitable that are going to have a huge lift in free cash flow they did it for me >> venezuela, another headline

for you this morning planning to launch an oil-backed crypto currency. its president announcing plans for the so-called petro-crypto currency this is fascinating. the government trying to battle a collapse of venezuela's traditional currency, and that collapsed this year. >> it's where that put bitcoin in the pain. >> etherium. >> i invest in you if you issue a coin -- >> it's a sovereign coin >> if i bought wonder coin from me, i might. we could be exchanging pins. >> they call it a round trip deal, and the s.e.c. gets you on it president trump targeting amazon in a new tweet just

minutes ago. he says "why is the u.s. post office losing many billions of dollars a year while charging amazon and others so little to deliver their packages making amazon richer and the post office dumber and poorer? chub char should be charging much more." this is not just a story of what the president charges the post office or for shipping it's what the regular alatory environment may look like for amazon and other big tech giants you are seeing that stock literally coming down. it was up before see what trump actually was hitting the stock right here >> they've been able to raise capital. take a look at bitcoin most of the coverage around block chain, that's the technical knowledge that underlies the volatile currency. smart minds are currently coming up with a vast array of other

block chain uses, and they could change fields as far off the currency trading as possible joining us right now is vice president for innovation and strategy at berkeley college of music in boston. good morning >> thank you >> so tell us about these other uses of block chain and what you think is about to happen here. >> so about a year and a half ago we launched an initiative out of berkeley called the open music initiative we're doing it in collaboration with number of other academic institutions including the m. i.t. media lab the idea is to create an open protocol that dramatically simplifies the way that rights owners are identified across the supply chain of the music industry >> so this is a rights system. >> it's an attribute use system. >> you're trying to solve this let's talk about that where.

>> well, consider that right now a global hit could have as much as 500,000 different ways of making money globally the average song has maybe eight different -- on a minimum eight different collaborators. being able to identify and drive the money to all these different people -- in many situations you have as many as 50 different intermediaries between the consumer and ultimately the person that created a song leads to a lot of revenue leakage at best in some cases they don't get paid >> this system knows and identifies who gets the fractional distribution. >> that's correct. that's one of the objectives >> and so how does it work does each player, if you will, in this get a key? >> so right now our aim is first to get the industry to cooperate. when you -- when you think of all the different ways that a

song makes money, every one of these different platforms has a different way of accounting for that the aim is for a shared -- what we do is create the conditions, ultimately, for applications to be built in order to accomplish what you talked about. >> who are you putting out of business >> that's a great question i think fundamentally it will reorient the music industry. right now the way that you track who is owed what is ultimately done through sampling. performing rights societies in the u.s., we have ask bbmi generally track who gets paid. >> now you don't have to sample. you're going to know with certainty every single time. >> that's correct. ultimately -- >> there's finally -- >> from a sampling mogdel to a

measurement model. >> i've been trying to find a real -- application with block chain, and this is an audit system aside from boitcoin zbloo >> if you are a songwriter, you would be able to track in real-time anywhere your songs are getting played irrespective of platform. >> that existing platform has been the most welcoming of using -- >> right now we have 200 different companies that have joined the initiative, including all three major labels that's sony, universal, warner almost every streaming service, with the exception of apple, has joined in. >> because they want to be part of an experiment or because they really see -- >> ultimately everybody is aligned that being able to compensate the rightful creator a big deal >> will it save them money >> it will save them money from a transactional cost if you share infrastructure especially for something that is not really a competitive advantage. you know, knowing who to pay is not your competitive advantage

if you are spotify or apple. >> this is so much more than i thought berkeley did, and i met panos when i lectured there. it was fascinating did you know that you have to be able to read music to get accepted into berkeley, and i think that's a mistake let me say that. there are so many brilliant ideas that should be engaged there that have nothing to do with reading music >> kevin, you bring up an interesting point. right? right now music is not created the traditional way, right if you -- if you are a kid and you are making music on your phone, ultimately if it you have a system of tracking, you know, you can take any amount of different tracks that have been recorded, mash them up, share them on social media, and if you are the person responsible for creating the next big hit, irrespective of who you are, why not make money out of it >> each song that has to have a digital code that's going to be connected to this block chain, right? >> think of it as a digital fingerprint, right if it's not just each song, it's each asset of a song right now you can take a drum loop

you can take a guitar list >> do you know why you're getting paid that money, or whether or not the money you are getting paid is exact or not >> well, and the cost to the company that's depositing those checks pays more for that process than the check is even worth. >> they do where, you can envision a system where you have smart contracting and ultimately payment flows happen automatically. >> right >> it's really nice to see you very cool. come on back as this progresses. >> thank you >> you bet >> thanks. >> well, the net neutrality rule back among this year's water shed moments shaping the tech sector in 2017 joining us now for what's ahead is devin, managing director at insight venture partners devin, welcome 2017 was a banner year at the tail end we saw this

division between the large providers of broadband and cable and the small upstarts that say they're not going to get a fair shake because of the repeal of these rules. sfwha the issue is that right now you have massive consolidation of the pipes the pipes basically have the ability to control 65%, 70% of the pipes controlled by three or four companies what the concern around next generation innovation is if you are -- if you have a next generation application, are you going to have access on the equal playing field to the antoinette carnivale fliks to be created. the concern is that -- it's as simple as that, and the long-term risk is to the extent that we don't make -- we don't make accessible net generation applications, something that's going to relatively be fundamental like in the phone service, you don't charge more or less because you like the person you're calling versus the person -- >> right how long until weknow whether those concerns are founded or not? whether that's actually

happening? >> i think it's going to take years. these regulations always take -- they take a long time to take effect they have a long time to actually have an of the affect on the market. the issue is really more one of capital availability because of the concern that investors might have is this going to be harder for these types of companies to get access to end consumers. >> is there any any evidence this problem even exists that's what i always ask here we are worried about how many fairies are dancing on the head of a pin, and there's no fairies dancing on any pins. >> i think the biggest short-term change that will probably happen is really more around innovation, around pricing, which actually affects the entrenched companies much more, which if you are facebook, your goal was to have things like zero rating basically give away your service for free not use up somebody's cell phone digital dollars for accessing facebook net neutrality will negatively kind of impact your -- was negatively impact your ability to do that you might be able to do that that -- there's no -- i can't point, kevin, to an example of a

company that says here's a company that because of net neutrality was not able to -- >> we have a raging debate on a problem that doesn't exist that's my point about this >> the question really just is if you believe that it's going to make it more difficult for people to raise capital to inoaino vat because they are not going to be able to get access -- >> so far no problem >> speaking of raising capital -- >> you change. >> we're in the business of predictions and we're about to have to go give us one ipo prediction, one m&a prediction for 2018. >> m&a prediction you're going to see microsoft do something very significant in the securities space that's my prediction for 2018. don't know the company have some ideas, but i think you'll see microsoft do something big. >> and the ipo >> the ipo, you know, i don't think uber is going at 18. i think it's going to 19 i think the thing is -- i think the ipo market in 2018 is going to be better than i think most people are thinking. >> does uber get the $69 billion valuation on an ipo if it goes in 18? >> i think the best case is $69 billion. not above that

i think part of the story that people aren't taking enough about uber is in order for it to get to $200 billion valuation, they need to succeed internationally, and if you look at what's happening from a regulatory standpoint and you look at the competitive landscape and china investing in every growth market that uber is going into, they have a much more constrained opportunity internationally than two years ago. >> get some wine on your way out. thank you for coming in. >> thank you >> cheers to you we have a lot of wine, by the way, still still there. up next, it is the busiest time of the year for criblhatae giving, but will the new tax bill change that that story next.ep's roa of electrical workers helped make that happen. the ibew's outstanding union professionals have the skills and training to get the job done right. that's good for our customers and for our bottom line. ibew members are our power professionals. they should be yours as well.

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welcome back the last three days of the year have been historically the biggest for charitable giving. our next guest says recent reforms will change that, however. tim delanie, the president and ceo of the national council of not for profits. good morning to you. are you like -- is this a scrooge situation? i think that it would be better for everybody. >> well, supposedly it's going to be better for a lot of people certainly the wealthy and certainly large corporations, but it is going to substantially hurt the work of charitable nonprofits and local communities. >> explain why >> americans across the country depend on nonprofits and turn to us every day for assistance and innovation in ermz terms of the arts, inspiration, faith. what congress did is nominally it didn't change the charitable

giving incentive however, it changed other components, supper as doubling the standard deduction, having the cap on how much state and local taxes you could deduct, so on they basically said that they don't want people to be itemizing in the name of simplification charitable nonprofits got caught up in that the experts are predicting that because of that change of the number of people who will be itemizing next year is going to plummet from 30% to just 5% of americans. >> that -- >> i want to snand that as a giver, okay? i haven't looked at this part of the code, and i'm writing checks hospital, arts, some other organizations that i give to every year five of them do i give less now why am i not incentiveized to -- let's say just for random -- argument's sake, i give $100,000 to five organizations. half a million dollars >> no. you're still in good shape

it's the average person on the street who now has a $24,000 reduction that used to itemize above 12,000, am i right, tim? >> absolutely right, andrew. >> am i still getting my deduction or not >> you are still getting your deduction because you're going to itemize the deduction, and you are allowed to what you are saying, i think, tim, before people were at about 12 or whatever the number was, and so there wasn't a tax incentive to actually give to some degree. now you already get the deduction. less of an incentive that means that everybody -- that means, by the way, your charitable giving wasn't that charitable to begin about, but that's a whole philosophical argument >> you still get to write off that gift you give to a charitable organization with a tax number >> tim >> no, no, no. only if -- only if you are in a tax bracket that allows you to be itemizing your deductions if you no longer itemize, there's no long aer an incentiv. let me use this as an example. each of you, the two k's, kayla and kevin, here's $3,000 pretax

dollars. well, kayla, you're starting your career doing great things kevin is more advanced he has probably a higher income level. >> we're both the same age i want you to know that. >> and, kevin, you are in the 37% tax bracket, and kayla, you are in the it 22% tax bracket. >> i think she's doing better than that, but that's okay >> does that mean yale doesn't -- she has no incentive to give anymore? >> that would be the argument. >> that sounds like a problem. that sounds like a problem >> it is a problem. glord do give, it costs her to give $ ,000, it cost her $40, and then on your side, kevin, at 37%, you only have to pay $1.

$18.40, so there's an incentive for you to give. >> i would like to be more charitable with your time, but we have to run >> we do hope this isn't as much of a problem as we think it is, but we imagine that it may be, and we'll have you back to talk more about it. >> credit great. america give thank you. >> thanks. the when we return, mmits 28. what to expect we'll be right back. ♪

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fluctuations continue to surprise investors fold lost some of its luster and gasoline prices remain relatively high, even with more supply coming online here's what to expect in 2018. gold prices stall. in 2017 gold lost its safe haven status as stocks rallied the precious metal traded more on fed related moves and will continue to do so next year. with the expectation of rate hikes on the whorizon, expect gold to continue to stall in 2018 oil is range bound, crude moved from the low 40s to around $60 a barrel this year, oversupply pushed prices lower, opec move moved pricing higher

those two opposing forces will jostle the market. gasoline prices remain high. gas prices rise faster than they fall, even if crude prices stay in the 40 to $60 range, the average price won't fall under $2 for that to happen, crude would have to see the 2016 low of near $25 a barrel and that's not in the cards. >> that was our jackie deank list reporting 2017 was a b yr reigeahe on "squawk box. we have all of the moments you might have missed. family. on us. plus, netflixe so, they get their shows... let's go, girl! you're gonna love this bit! and you get yours. watch however you want. on your phone, tablet, or tv. for just forty bucks per line. with no extra charges. let's rock this joint! all on america's best unlimited network, t-mobile.

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tcan lead toof plenty of questions. fortunately, there's a place to get the answers, for them and for you. find articles, tips and tools from experts and others who have been in your place. the caregiving resource center at aarp.org/caregiving. the entire community came whtogether as a whole.t, ♪ it was such an overwhelming response to help others. no one thought that they were going to do this before it happened and everyone just did it. i think that's the way that human nature should be looked at. ♪ i'll stand by you. ♪ i'll stand by you. ♪ won't let nobody hurt you. ♪ i'll stand by you.

welcome back to "squawk box. we have a couple of favorite/embarrassing moments to show you ♪ >> good morning, everybody, welcome to "squawk box." we're live from times square. >> bark like a dog for me. hello. >> hi. hello. >> this is going to be fun today. >> i have a little bit of a secret for you come closer, these are for you guys >> thank you. >> we head into earnings season, second hour of "squawk box" bins. >> breaking overnight, the white

house confirming -- >> i got out of the shower, buck naked -- >> thank you. >> nightmare. >> nightmare. >> alexa, could you wish joe concern an a happy birthday this morning? >> sorry, i didn't understand the question. >> snap. >> he's outside. >> put them on how do they look, okay >> this is not very interesting. >> happy national doughnut day. >> a munchkin zpl is that four >> that's my third. >> this will count as four i'm on number five. >> a munchkin. >> this goes back to adam and eve, dude. >> the thing that's -- >> you have a hollow leg. >> i love this ands so good. >> we want to congratulate andrew and his wife pillar on the birth of sidney -- >> let me say, you can be bruised all over your tuckus -- >> stay tuned people. >> this feels too weird.

>> dr. wu -- >> whoo hoo. not saying crude decree realities. >> has there been a mentor >> squawkbox mentor you looked up to. >> from new generational players, david ortiz >> enough to adopt your style, joe. you need to be excited. >> jeremiah was a bull frog. >> look here and your nose -- >> i'm on it >> we could be -- >> i'm the designated survivor, yeah. >> do it by bank account the futures -- inventor of my pillow, you're so famous now from those commercials. >> i spend my night every night with this guy. >> are there any single players that need someone to spar with them >> i'll keep them in mind?

>> held a racket -- probably not -- >> might be sitting here one day. >> what does this button do? i don't know >> if you think i'm going to get out -- you're out of your mind >> it can go both ways sfl you can go both ways >> some of andrew's favorite guests of all times. look at his face. >> we're in the chairs this morning with special guests, my son kyle is here but he's here because the minions are here. >> that's becky's boy, look at him go -- >> and we have -- >> when will comes in here and you're already here, it's like land of the giants, is she in -- is your news -- is that -- >> you can make people think i'm pregnant again, stop. >> that's not the news. >> happy birthday. >> andrew, read the

teleprompter -- no, i'm kidding -- wow >> phil lebeau brings it -- >> further down -- further front. one more time. better read this or i'll kick your -- three, two, one. [ bleep ] not now -- one more time alex rodriguez -- san francisco -- maker -- this is unfair unfair it's not fair. >> back to corporate news -- >> it's andrew's favorite thing and he's back -- he's back to -- here he is >> doot doot om. snap get in and it's all -- hello, prompter hello. no, reagan >> welcome back.

>> because i want -- >> you're too close to the camera, can't see it's you. >> liquid band aid, i don't want to do this. >> last night -- >> wow i told you that stings so much. >> ow. >> i'm a delicate flower be still my beating heart. >> end of the year clip material. >> i don't want to do this today. >> i'm getting a massage on the air. >> maybe cut that part out. >> do it like this >> hear music playing -- >> we're done. >> bye bye, everybody. >> bye bye >> nailed it >> wow little red the champagne -- >> you gave them so much material. >> we tape those things before the show and that's -- you don't see me saying hopefully let's start again -- >> you see a lot of it. >> you see more than you probably like of it. >> little prompter school. >> we should thank dean and ryan

who put that together. >> do they remember in the moment >> no, they take notes -- they take notes throughout the year to collect all of the stuff. thank you, guys. thank you to the wonderful crew who makes the show happen and to you guys >> happy new year to everybody. >> happy new year to everybody. >> mr. top dwonderful, thank yor a great year we're back on tuesday. ♪ good morning and lwelcome to "squawk on the street. where every moment is a highlight. >> where's your high leet reel >> that was fun to watch though. jim and carl continue to have the week off they will be back soon take a look at futures, last trading day they tel