steve bannon it's thursday, january 4, 2018, "squawk box" begins now. live from new york where business never sleeps, this is "squawk box." good morning welcome to "squawk box" on cnbc. we' we're live from times square snow is coming down. look at the u.s. futures at this hour we were talking about green arrows this comes after a day of records again. the s&p 500 crossed 2500 for the first time yesterday today we'll watch the do you closely. the dow sitting at 24,922. we are a few points away from hitting 25,000

a few days ago it was the nasdaq at 7,000 overnight in asia, the nikkei, if you think these numbers have been good here, up by more than 3%. it had been closed for a bank holiday over the last two days so it had some catching up to do right now you can see the hang seng closed up by a half percentage point as did the shanghai if you look at what's been the early trade in some of those european markets that we watch closely, up across the board gains of almost a percent for the dax in germany and the cac in france. ftse hanging in there. still in the green with italy and spain, each up by 1% and look at crude oil prices yesterday a rally in crude oil, up by 2.1% this morning additional gains of 11cents. 61.74 a barrel for wti >> big corporate stories of the morning. tesla is still struggling with

production the carmaker releasing fourth quarter delivery numbers that fell short of expectations again, pushing back production targets for the model 3. tesla delivered 1550 units of the highly anticipated sedan that misses estimates of 2500. the initial goal was 5,000 a week they are addressing bottlenecks for the model 3. elan musk talked about the s curve. >> are people still dying to get these things in. >> there's a long, long waiting list >> still a waiting list. people are not, i don't think -- >> it has nothing to do with people not wanting them. >> no, this is physically can you make enough of them. but these are complicated vehicles >> i know. >> i would base a lot of my decision on what to do if i owned the stock on that.

you ever try to get into a hot nightclub? it may be empty inside, but outside there's a big line or at a restaurant no, no you finally get in, there's 12 people >> the question is is this something where they can continue to have the lines, do they eventually say we're moving on to the next fad do the other production companies catch up and have cars that are cool and can have the same attachments, can you maintain that? >> tough to get as cool as a tesla. >> if you walk into a tesla store and they tell you the wait list or the wait is now two years or a year -- >> maybe you don't >> you say, maybe i won't. i thought it was a year, i keep reading stories that maybe i won't get my car for two years >> having said that, there's no shortage of cash >> until they need to raise more money. that's part of their thing >> i think it's going well with amber hurd again >> are you on instagram? >> i'm not >> are you joking?

>> no. no >> you need to watch the reality show that is elon musk it's on instagram. >> i'm not on instagram. it's in my universe. you still have the baby. >> i do. >> not everything bubbles up >> it's gone to, yeah, they're just seeing each other to lunch, it's definitely a rekindled romance. then there was more to this. >> they're on vacation >> does that affect the stock? >> i have to be up to date for him. >> you should know there are hedge fund managers -- sorry, fund to funds, when they allocate money to hedge fund managers who care whether the hedge fund manager is married, divorced, dating, whether that's making -- >> performance issues. >> i don't flow about

performance issues >> on their stock. >> oh. oh okay yea yeah >> now we will move on to the headlines. nintendo shares are on the move following news that pokemon go plans to launch in china check out shares of nintendo the sorkin family just got a nintendo switch. >> you have to get the geek squad over to put ours together. >> that stock up about 5%. the plan is not without hurdles. pokemon go uses data supplied by google, the company that has most of its services blocked in china. games in china typically need to be registered with the government there will be a pair of economic reports later on the agenda. the december adp report will be out at 8:15 eastern time forecasts calling for an increase of 195,000 in private sector payrolls. at 8:30 a.m., look for weekly jobless claims our top story from

washington, fallout from a bombshell book that claims to give a rare glimpse inside the trump white house. eamon javers has more on this. this did make my radar >> this was a dramatic day in washington yesterday as have so many been. this is open political civil war between the president of the united states and his former chief strategist, steve bannon, who left the white house earlier in 2017. steve bannon quoted in a new book by michael wolff as saying the meeting that donald trump jr. took, the president's son, with russians in trump tower was " "unpatriotic and treasonous. sarah huckabee sanders was asked about that yesterday in the white house press briefing did the president's son commit treason she was asked. here's what she said >> i think that's a ridiculous accusation, one that i'm sure we

addressed many times from here before if that's in reference to comments made by mr. bannon, i would refer you back to the ones he made previously on "60 minutes" where he called collusion with russia with this president a total farce. >> the president himself issued a blistering statement the likes of which we have never seen from a president to a former aide here's what he said about steve bannon saying steve bannon has nothing to do with me or my presidency when he was fired he not only lost his job, he lost his mind steve was a staffer who worked for me after i had already won the nomination by defeating 17 candidates often described as the most talented field ever assembled in the republican party the president here clearly recentful of ster resentful of steve bannon's comments late last night one of the president's lawyers sent a cease and desist letter to steve bannon suggesting he may have

violated an agreement he signed with the administration. but the questionis is there lasting political damage sarah huckabee sanders said she doesn't think the trump base will fracture over this, and she thinks thil stay wiey'll stay w president. bannon says in the book he believes any way that the president took a meeting with the attendees of that russian meeting after the official russian meeting broke up with don jr. back in 2016 during the campaign bannon wasn't at the trump tower meeting, wasn't involved in the campaign until after that, but what does he know and who was he talking to those are political questions also >> do you try to follow steve

bannon on twitter? is this his account? >> i believe there's a phony steve bannon account out there >> 52,000 followers follow the account. >> welcome to social media >> you think it's funny. >> i do. >> this is taken out of context. >> i could -- >> even -- >> i believe steve bannon confirmed the quotes yesterday >> which quote >> that these were his quotes yesterday. >> okay. >> so for steve bannon to say things like this, to intentionally -- by saying these things, i don't know how he would expect to do anything other than provoke the president. >> when you go after the family. this is not a policy dispute or going after the senator this is going after the president's son and namesake, it couldn't be more personal. bannon clearly knew that when he made the comments. he's not a dumb buy. the question on everyone's mind is why did steve bannon do this? what is his game here? does he think the president is

political history at this point and he's positioning himself for a post-trump future? does he have a personal axe to grind with the president >> eamon, he was on a radio show last night, a sirius xm radio show, where he diverted attention from this and said this is a great man. >> but to see these things, if he said these things -- >> i didn't hear that radio interview. what did he say about don jr.? >> he didn't -- he skirted this issue apparently >> what did he say about ivanka and -- >> that's what i mean. he didn't talk about any of that here's the one thing, eamon. i don't know about michael wolff. i know now -- i know some of that stuff doesn't ring true because i talked to trump -- believe it or not before he won the nomination he indicated to me he was

serious and wanted to do this because he thought he could do great things >> trump told you that >> yeah, he did. maybe he was lying to me this was august of 2015. so he was -- this is even before any of the debates or any of that stuff all i will tell you, if seymour hirsch writes a book, the democrats say every word is assumed to be false. anything about bill and hillary, that's not true. bill did not throw the book in the trash can. this didn't happen that didn't happen it's possible to -- for one side or the other to say this is all made up. >> joe, you and i have talked about this offline when we see reports like this. i think you have to have a trustworthy and verified report to all of this and see what we can verify with our own reporting and our own sourcing this is michael wolff on his own producing this book. other people will have to go through and try to verify if

some of this is true >> where there's smoke and fire, that's what you always say >> at least you can say the stuff bannon said is stuff bannon said in the book. journalism is the first rough draft of history this may be a rough first draft. >> that's what i wanted to dauk about. i wanted to get to the gary cohen piece. it was fascinated that it was included in the book, this quote specifically from an e-mail which gary cohn seems to have suggested he didn't write but suggested his views of the president at the time is worse than you may think, saying he's an idiot surrounded by clowns. how will that play or work inside the white house >> gary cohn is somebody the president needed he needed him in the latter part of 2017.

cohn wrestled publicly with the president's comments after charlottesville, he debated whether or not to leave. he said ultimately he would stay he said publicly the reason he would stay is for tax reform now the big question is tax reform has passed. there's a political win there. what's gary cohn's reason for staying inside the white house now if those are his personal views? it's not clear they are. but if those are his personal views, does he have anything he wants to accomplish inside the white house? or will he leave there's been speculation he would leave but he has not signaled publicly one way or the other. people i'm talking to are not sure whether he will stay or go. >> given the indication in the book, is the view inside the white house that he didn't say those things he said he didn't say those things, so therefore he didn't or we view this with suspicion

and he may have said some of those things >> in this white house, loyalty is paramount a lot of people are under suspicion of being disloyal at certain times, a lot to of people are leaking and talking to the press i can tell you they now banned personal cell phones inside the white house. that's due to suspicions about m malware being brought into the white house and to keep people from texting on their personal phones and getting things into the outside world that the white house can't see. so there is dsuspicion about wh is loyal and who is disloyal and the president focuses on that. this book will drive them into fits figuring out what's true and not true >> that's what stuck with me even comments from jared and ivanka >> they could say we decided

this whole thing is lies so everyone will say anything written about me in that book was lying. you saw sara huckabee sanders say it was a pack of lies in the briefing room. >> my quick final question, relates to the nondisclosure agreement which the president cited in the letter to bannon, saying he has broken this nondisclosure agreement. that was an agreement made during the campaign with the trump organization, not with the white house. how does that work >> that's a good question. this broke late last night i would like to talk to lawyers before i give the answer to that i think there will be some questions here about whether or not that is an enforceable nondisclosure agreement. i don't think we've seen previous white houses have that. as a former white house official, you are required by law to keep classified information private. whether or not you can talk about political conversations or your impression of the president himself, that has never been blocked in the past. we'll have to see whether this is legally enforceable or not. it may be a shot across the bow.

politically, if you sue bannon under the nondisclosure agreement, you get into a back and forth legally with steve bannon what kind of discovery does steve bannon get as a result of that is that a process the president wants to go through? >> eamon, thank you. what is the weather like this morning? >> very snowy. i had trouble getting the car out of the driveway. how about you guys in. >> very snowy. >> i don't think you need a lawyer you think you need to talk to a lawyer at this point >> i'm thinking i need to talk to lawyers as experts, not for my own personal defense. >> you do push the envelope a little i don't think you need -- it's up to you. if you think you need to retain -- >> as long as no one finds out the stuff i've done, i'm safe. >> don't even joke about that nowadays

>> right >> stay warm i'll be getting a lawyer the snow is falling on the east coast with a big plunge in temperatures expected to follow. we have our weather team ready to go. >> contessa brewer is in boston, and angie lassman starts us off with the forecast. good morning >> good morning. we continued to watch this system right now you can see how many people it's affecting. we're talking 35 million dealing with the winter storm advisories as we peek at those blizzard warnings, that's really what the problem is going to be here as we move through the next day or so you can see where that bright purple is, up and down the east coast from the mid-atlantic up to maine, we will watch for those blizzard-like conditions currently not seeing visibilities as low as they go for that requirement for it to become a blizzard, but we will be watching over the next couple of hours notice the radar

over the last three hours, we have plenty of lightning in the center of the storm. that is a textbook nor'easter. we continue to see it intensifying right off the coast of new jersey, we do have a heavier snow band. it will be interesting to watch that band the next couple of hours and into the later morning hours. it is slightly intensifying and rotating into areas of massachusetts, connecticut, and we will be continuing to keep an eye on those snowfall accumulations as well as those wind speeds. we have a little bit of warm air in areas close to boston, across massachusetts, that is leaving us with rain right now but you can see the snowfall accumulations up to a foot, even a foot and a half up towards maine. we are watching that cold air moving in behind it. tough conditions to come from the mid-atlantic to the northeast. >> thank you we want to get to contessa brewer in boston >> you know, the snow emergency

begins here at 7:00 a.m., which coincides with the time that the national weather service is issuing a blizzard warning for boston people who are trying to get out of the storm's path have limited options at this point. amtrak is running on a modified schedule the flights largely are canceled in and out of logan. some 3500 flights in total have been canceled nationwide that's going to affect airports nationwide when we talk about how this affects daily life today, all the kids in massachusetts have school off the boston schools are closed. new york city schools are closed philadelphia schools are closed. the state offices in massachusetts are closed, too. the governor urged businesses throughout massachusetts to encourage to let employees work from home today. there's some 60,000 employees in boston proper. you have to imagine the formula that goes through their mind, is it worth it to risk employees

lives and safety to get them to work if there's no customers today? some people who will be at work today, the boston -- the new england patriots players it's so cold out here, my mouth is not working properly. bill belichick, the coach of the patriots told his players, guys, you live in new england, you better not be late for practice. he made it clear to them, blizzard or not, they're expected to show up for practice today. remember, i was just in everett last month for the win boston harbor i corrected in yesterday, i said, hey, is the construction site closed down where they're constructing the casino? they said nope these are wicked winds wicked >> contessa, thank you stay warm. love the hat don't you love the hat >> he does i do

>> he is into the dorkiest hats. >> i have some >> no shame. it's coming down here i thought my kids would never know what snow was that was the prediction. >> oh. >> now kids in florida know what snow is. that's all part of it. coming up, the dow inching closer to 25,000 just over a month after hitting 24,000 we'll talk stock strategy, tomorrow's big jobs report after the break. this is not a cloud. this is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. this is a financial transaction secure from hacks and threats others can't see.

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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. ♪ it's jobs week in america. by that we mean friday we get the employment report. but today we get the adp private payroll report as we do every month that will be at 8:15 we have andres here from zoe financial and we have matthew dizak from merrill lynch we are seeing signs of life in

the ten-year yield as we move again closer to that 2.5 range what is your year-end forecast >> our year-end forecast is based on what the fed does we think three rate hikes. that should lead us to another 50 or so on the ten-year probably finishing out the year around 3%. so the curve will continued to flatten a bit, but not too much. we expect higher rates the economy will be strong inflation will make a return that's 50% higher than 2%. but in someone that was in the business at a much higher level, 3% money is like awesome that shouldconstrictive, should it? >> it's not. but in a global context, 3% is high yield now >> the last time the fed hiked a couple times, the yield went back down after. why are you so sure this time it

affects that end of the curve? >> that's a good point you've been hearing the same thing from strategists for years, rates will go up. this time you look at the two-year treasury, there's a massive breakout it's gone to almost 2% the market is finally getting conviction that the fed is on a path to continued hiking rates they believe it this time. it's forecast for at least two hikes. march is a done deal the curve has flattened a lot over the past year, that's what we've been expecting and calling for. it will probably flatten a bit further, but most of that has been taken out of the market >> i think in previous appearances, anders, your enthusiasm has started to wane a little for u.s. stocks >> on u.s. equities relative to international. one last thing on fixed income, if you look at the two-year and five-year in the u.s., and you look at the spread of that

versus german bunds and japanese bond yields, the spreads are actually the highest in ten-years. going back to this idea that the five-year and ten-year will rise, for those investors there, this is like emerging market -- >> this is like gravity that will continue to pull on our yields >> yeah. there's a cross current occurring. i think that's why everyone keeps saying -- every strategist says rates will rise if you're in japan, you look at the two-year yield, they're thinking this is malaysian bonds or something >> as long as that money continues to pour into our markets, rates won't rise. >> yeah. even though the economy is improving, i don't think rates will rise as much. >> which is not necessarily a bad thing for investors looking at stock markets, or if you're trying to pay off debt >> that's true >> i've seen criticism in the last few days that if the

european central bankers are not raising rates now, given that there's all kinds of evidence that things are -- you wouldn't have to be ahead of the curve to start tightening now are they going to be the bankers behind the curve >> i think that's the biggest concern. the fed so far, going into this year, it has told us what they're going to do. and there's little volatility around those expectations. the biggest surprise could be with the ecb they will start changing direction in september, when it comes to at least not increasing the size of the balance sheet. if they were to basically change their mind or move that deadline sooner, i think that would have a bigger impact on rates globally than the fed. the fed is boring. that's a good thing for equity markets as well as fixed income. >> monotone delivery

>> she was born for that they have to build consensus it's not a dictatorship. once they're on camera, they have to represent the whole committee and itthey're not as monotone >> some trump tweets hold that thought. no >> i wanted to bring something up internationally >> really? >> in china we had a strong services pmi, 53.7, the strongest in a couple years. i found a nice factoid to bring this home, to see what's happening in places abroad what was the biggest movie of the year last year, the first box office week what do you think? >> i don't know.

>> the last year co the last jedi. which was the second largest i have to look this up >> minuionminions >> most would think beauty and the beast, it was wolf warrior ii what is that >> a chinese movie, 4$480 millin box office ticket on the first week i had to look up what this thing was. it tells you, this is only now imagine the next couple of years, how much the consumer in china will be dictating everything i mentioned international exposure is key, not just china because the asian consumer will become bigger, not just for chinese stocks, but also u.s. constituents last jedi is expected to get more sales abroad than in the united states. >> trump is tweeting about the voters

wh voter fraud stuff and why he ended that investigation axios is reporting that this michael wolff gentleman has tapes. dozens of hours of tapes to back up -- >> i'm sure. >> including bannon and former white house deputy chief of staff, katie walsh telling mike allen he has hours of tapes that's how you do a book put it on tape >> yeah. >> and, by the way, michael wolff himself when axios reached out to him pointed to the lawsuit that the trump lawyers bringing against bannon -- >> if everything i was saying was being recorded, i would be nervous. >> you're on air now >> if they didn't believe what bannon was saying was real, would be suing wolff you only sue wolff if you can

figure out bannon or someone else didn't say was they said. >> there's a lot of people talking. >> i should urge my children to go to law school basically there's lots of work out there >> ai will really hurt the legal field. it's a longer conversation >> okay. thank you for joining us today. when we come back, it has been a tough year for orange growers. the florida season disrupted by disease and hurricane irma, now growers are bracing for frigid weather. we will get a live report from the sunshine state after this. right now, as we head to break a look at the s&p 500 winners and losers let's begin. yes or no?

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♪ welcome back you're watching "squawk box," live from the nasdaq market site in times square. >> welcome back to "squawk box." good morning a quick look at u.s. equity futures on what is turning out to be a snowy thursday morning dow looks likeit would open up about 46 points. nasdaq up about -- we'll call it 9 points the s&p 500 looking to open higher a little over -- close to a point and a half intel's ceo brian krzanich reportedly sold a large chunk in

the firm after the chipmaker was alertd ed to security flaws krzanich reduced his total number of shares to 250,000 from more than 800,000. those vulnerabilities which have been dubbed melt jodown and spee could allow people to steel cache files and passwords. krzanich spoke about it last night. >> we're constantly learning new ways to exploit architectures. then patching and fixing that. that's what this is. we were working with all the industry partners, arm, amd, the os vendors, the oems of th various hardware systems to patch this issue and resolve it. >> it is a big deal. it's something that security experts have spent lots of time

trying to figure out one security expert i spoke to about this said this is a different situation, because instead of the operating systems being vulnerable it's the actual hardware he said this is something that could be a potential vulnerability that we have not thought about with cloud processing where you think each are individual systems that are unique and stand alone, but this is a back door in. >> the only patch they have is a software patch that can patch the chip but it slows the chip down by up to a third. >> it may slow down the processing it's going to be a much bigger process. you are talking about hardware that people had not considered being a back door in and it is vulnerabilities with the cloud that everybody has been talking about being a safe and secure way of doing things you saw what happened with intel shares there. it has been a brutal six months for the florida orange economy. hurricane irma and disease have

brought production down to 70-year lows this week farmers are bracing for freezing temperatures as well joining us with more on this is shannon shepp from the florida department of citrus thanks for being here today. maybe you can tell us about how the situation stands now 70-year low production numbers what's happening in the fields >> i can tell you this is pretty much the knockout year for florida citrus we are doing everything we can to make this american icon survive, it's like the hits keep on coming. we did start with citrus greening, then hurricane irma came as we were getting ready to be able to show the world we could start to cope with greening we got all of the trees that were hit by hurricane irma and the fruit fell on the ground so we can't quantify that we

were able to get with greening now after hurricane irma, and we're still waiting for disaster relief from that, we have these cold temperatures two weeks into winter >> i guess the larger question is what is going to happen, not with this crop but down the road you mentioned this is a three-punch blow that can seriously impact what's happening. if greening is under control what kind of long-term damage was sustained in hurricane irma? what happens to the trees? how long would it take you to get back up and running and how many farmers have been washed out by this? >> regarding the hurricane irma impacts, you had a ton of trees that were literally under water. the root systems had drowned so you have not only fruit loss and fruit that fell on the ground, but you have tree loss that's a longer sustaining problem for florida citrus growers. the other sustaining problem is that in other times of these types of disasters, we sought

federal relief from the government, and received it. at this point we vent done that. we've sought it, we just haven't received it. you have growers trying to make decisions for next year's crop, trying to make sure there is a crop of american orange juice, and they don't have what they need to be putting in the fields >> you're hinting at this, but ten years from now, do you think we'll still think of florida as a scitrusstate and will orange juice still be produced there? >> i believe we will i believe this will get worked out. i don't want to get into politics, but things are stuck up in d.c. i think at the end of the day we'll have champions in the government that will help to make this industry sustainable again. we have tons of small cities here in florida, the ones that nobody visits, because they're not on the coast, their economies are driven by florida

citrus with a 7$760 million loss from irma, followed by this type of weather, and the uncertainty that goes with that, because the trees have already sustained trauma, i think folks will pay attention. i think that disaster relief will be coming and you will see orange juice in florida in ten years. >> shannon, thank you for bringing there to our attention. it's not a story we hear often about. we hope help is on the way thank you for letting us know. >> thank you very much for doing it again, just drink your florida orange juice it's very important. coming up, hedge fund report cards. new data that shows the investment class is bigger than ever but is that really true? and palace intrigue at the white house this morning president trump blasting steve bannon after one of those excerpts was released from the book by michael wolff. and then we have the adp

private payroll report at 8:15 alth a me l atndoron "squawk" when we return expected to end$32

trillion in capital, according to hfr leslie picker joins us now to explain how the industry has remained so flush. i'm sure they did okay last year it would be hard to do totally horribly they ended with 3.2 trillion because they began with 3.7 trillion that's not true. they did okay. but i bet they didn't match the averages, did they >> interestingly we can't pat the hedge fund industry on the back yet because we don't know what a hedge fund industry is these days 2017 is bound to be another record year for the hedge fund industry a record because they're supposed to surpass 3$3.1 trillion in assets, but how can that be? for years hedge funds have been

liquidating en masse and seeing significant outflows that's because the size of the industry includes a broad definition of a hedge fund that's according to a haven't study by winton group. the study found the traditional definition of a hedge fund, a vehicle that takes on leverage of fees 2% of assets, 20% of profits and takes on short position consists of an industry that's only a quarter of the $3 trillion figure cited. researchers say that the hedge fund industry is 8$800 billion i assets by expanding the definition of lower fees of 1 in 10, the total would be closer to 2 trillion, not 3 trillion according to the researchers. where does the extra $1 trillio lapse come from? it's actually emblematic of the changing hedge fund world.

the lines have become much more blurred in recent times and the active management spectrum has been stretched this identity crisis is likely to continue in 2018. guys >> all right leslie, thanks let us know. i don't know i don't know how they did their performance, i just know they didn't pay taxes >> that's right. and they still won't. when we come back, if you're still using body heat to stay warm in the winter weather, it may be time for an upgrade we'll talk to the co-founder of the warming store. andrew has a specific desire to see more of this stuff >> yes stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient.

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♪ it was the heat of the moment telling me what ♪ ♪ my heart meant >> okay, welcome back to "squawk box. 2018 has been anything so far, it's been cold we have snow up and down the east coast that's where heated apparel comes in joining us is justin silverman, the co-founder of the web site

thewarmingstore.com. good morning to you. you should know everybody at this desk wants heated clothing, including myself, when it comes to battery i never had battery-powered warming clothes so first of all, how warm does it get >> well, good morning, andrew, thank you so much for having me on and, yeah, i've got great recommendations on how to stay warm the answer to your question is usually between 135 and 150 degrees so that's the surface temperature. and the best way to describe it is the same feeling of aed car seat in your car so nice-day-old morning and you get in your car. if you have a heated car seat you can feel that warmth radiating right away and heated clothing is basically like taking that feeling with you wherever you go. >> so most of this stuff is for people -- i mean, i assume your business began for people who are out doors for five, six,

seven eight hours a day? >> ight. our core customer base is for people who enjoy outdoor fall and winter activities outdoor sportsmen that enjoy hunting and fishing. if you're going out early in the morning and it's very cold, a layer of heated clothing does keep you warmer, more comfortable, helps you enjoy your outdoor experience more there's also a pretty interesting crossover into kind of people that use heated clothing for medical reasons for example, people with poor circulation in their hands or feet i don't know if you're familiar with raynaud's, but it's a condition that stops blood flow to the fingertips. so it crosses over into home use, too, where people really just need a way to stay warm. >> not cheap i went online. there are a pair of socks that i was thinking of getting, they

cost $299. one pair of socks. and can you put these socks in a washing machine? how does it work >> so at the warming store, we're a hub so we're really the leading retailer of heated gear. some allow for machine washing, some do not. >> what do you do with it if you can't wash it? >> you can wash it some garments are hand wash you have wires and connections inside in a washer or dryer it could pull them apart. >> i have a selfish question but this might work for people in the audience who might want to know out about this. we're going davos in a couple weeks. can you bring it on an airplane? i was thinking about the batteries. i don't know if you use lithium ion batteries and what that means. can you put them on a plane

these days >> that's a great question the answer is yes. we don't have issues bringing batteries in checked luggage on airplanes. to give you an idea, this is the size of a standard battery pack. this is really a five-volt battery that has a usb output, very similar to a cell phone charger so if you can -- you should haven't any issues bringing this traveling. no problems at all. >> okay. is that -- are you being heated right now, by the way? is your vest heated? >> yeah, it's pretty chilly here in philadelphia so i'm wearing a heated vest so i can show you how it works so i have my bat ain my pocket and here's my temperature control right here and i can toggle through the heat settings. >> we may wear some soon so we'll get in touch with you. thank you very much, anderson cooper was wearing their stuff in times square two weeks ago -- just two days ago. happy new year, thanks. coming up, we have more on the west wing drama, president

trump mbtilaasng former adviser steve bannon stay with us

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cyclone bomb incoming. a major blizzard barrelling up the east coast do you know bomb genesis is a meteorological term that means a very sharp drop in pressure or something. so the media now days they name average storms so you think they're making up bomb also, president trump blasting steve bannon after a new book after a new book

reveals inflammatory remarks about everything, including his family and making generic drugs more accessible. the second hour of "squawk box" begins right now ♪ you're as cold as ice you're welling to sacrifice our love ♪ >> announcer: live from the b t beating heart of business, new york city, this is "squawk box." >> good morning, it's about to be cold as ice right here. welcome to "squawk box" on cnbc. we're live at the nasdaq market site in times square snow coming down but it's about to get worse i'm andrew ross sorkin along with becky quick and joe kernan. we look like we're going to have a nice little open here. dow looks like it will open about 50 points higher nasdaq looking to open close to 10 points higher and the s&p 500 opening up two points higher. here's what's making headlines. intel's ceo brian crkrzanich so

a stake in his firm even after they was aware of flaws in his processors he reduced his shares to 250,000 from 800,000 cnbc reached out to intel. krzanich addressed the security interview with cnbc last night. >> we're constantly learning new ways to exploit architectures. and going in and patching and fixing that. and that's what this is. we're working with the oems of the various hardware systems to patch this issue and basically resolve it. >> intel shares having their worst day in months. the stock now off about 1.5% in early trading. also news on tesla releasing fourth-quarter delivery numbers that fell short of expectations. also pushing back production

targets for the model 3 again. tesla delivered 1550 units of the highly anticipated sedan but it missed estimates of 2,500 and the original goal was 5,000 per week total deliveries of all models for the quarter topped 101,000 that's slightly higher than what the company expected so there's good news/bad news in that and we're waiting on a new read on the u.s. employment picture. the december adp report is coming out forecasters calling for an increase in private sector payrolls. president trump lashing out at former white house aide steve bannon in response to comments in a new book written by columnist and author michael wolf amm eamon javers joins us with more. >> he says donald trump's meetings with the russians in

the trump tower were treasonous and unthinkable. he went after the president's family, that's a cardinal sin inside the white house and it developed into a backlash from the president and the white house yet. it was some time before we got official reaction from the white house but sarah huckabee sanders, the press secretary, did push back in the briefing saying that some of what was in the book was simply not true here's what she said >> i'm not sure what the author's statement is on how the book came to be. i know that the book is -- has a lot of things so far of what we've seen that are completely untrue you have many people that have quotes that are sourced to them that are coming out publicly and saying those things are not true so i can't speak to what the authors comments were, i can only speak for the white house. >> reporter: in a blistering statement, president trump said steve bannon had lost his mind after he was fired by the

president earlier in 2017. here's the statement from the president also going on to say "steve pretends to be at war with the media which he calls the opposition party yet he spent his time at the white house leaking fake information to the media to make himself seem far more important than he was. it is the only thing he does well steve was rarely in one on one meetings with me and only pretends to have had influence to fool a few people with no access and no clue whom he hired to help write phony books. so the president there blasting steve bannon saying that he had no access, doesn't know what he's talking about and has lost his mind this is going reverberate for some days because it's open political war between the president's former chief strategist and the president of the united states himself. guys, i was talking to white house officials yesterday, the big question here in this is why did steve bannon do this why did he do it now what does it all mean? the chronology with the book is

that bannon would have been talking to michael wolf over a period of months, going back to when he was in the white house i can tell you i saw michael wolf at the white house on soefrlication several occasions. he had a very high level of access to white house officials. we'll see how this plays out not a good day politically for the white house yesterday. >> for more on the inner circle of the white house, we're joined by former bush/cheney senior campaign adviser robert traynham long news cycle, robert? i lived through the last year, i have -- actually, the last two years and the news cycles seem to be contracting a little bit i mean, i've seen supposedly things where the world was going to end from this development from either trump or the administration or at least the way the media was portraying it and two days later something else happens that totally supplants it and it's completely forget about it.

how long do you think this is going to last? >> good morning. i think this is going to last a little bit longer. the analogy i would use the that this is almost like a rock in your shoe where you can continue to run the marathon, you can continue to walk, but that little flock your shoe is annoying >> what's mueller? >> well, muellrobert mueller is bolder so two things, the little rock is steve bannon who's never going to go away the big boulder is robert mueller and that's the one you have to worry about from a statutory standpoint, he's not going anywhere and from a factual standpoint or a research standpoint there's a lot of work to uncover and somewhat ban steve bannon i doing is giving robert mueller more material to go after. >> then you have the previous -- you have him on record just stridently saying that there's nothing to the whole russian collusion thing from a couple months ago now he's saying that's treasonous. you know, that's one man's opinion whether it's treason,

whatever you want to call it now we've got evidence where both sides can point to -- one side's opposition research is another side's treason so you've got -- the democrats -- who knows what was going on they were listening to russians too, apparently, the dnc, so i don't know what's treason and what isn't but just because bannon calls it treason doesn't suddenly raise that to the level in the eyes of the law where it becomes that de facto just because he says it. >> of course two things, it's not evidence, it's innuendo what bannon is saying and it may be true, we don't know what we do know is that robert mueller is literally turning over every single rock, every single stone to see exactly what is out there we do know he has paul manafort on record. we do know he has papadopoulos on record. >> manafort is 2014. that's money laundering stuff with him personally that could maybe be used to squeeze something out of -- about stuff that happened more recently that

might be relevant to trump but i don't know if that at this point -- it was supposed to be about collusion. i don't know how much of it is about collusion anymore and how much of it is just manafort suing him. that's the basis for the lawsuit is that it has nothing to do with russian collusion, it has to do with something that happened before trump even announced his candidacy. >> i don't think we know that. i think there's a lot of speculation in terms of what you said and i think to your earlier question, which i'm trying to get to, is that the former fbi director and the special counsel is literally going to that here's what we know about robert mueller. we know he's a consummate professional, we know he's apolitical, he's a former fbi -- >> now you're saying things -- i don't know if any of those things are true. look at the -- did you see the grand jury how about the prosecutors he picked they're -- they're almost across the board democrats and people that have contributed to democrats. >> correct me if i'm wrong, maybe you know better than i just because you're a democrat

doesn't mean you can't be professional i don't know what you're saying there. and what i'm saying here is based on history over the last 20 years that robert mueller has been on the national scene, to my knowledge he's never done anything unprofessional. do you know something different? >> i would definitely look at the relationship between robert mueller and comey. i'd look at -- >> and the last thing that i would say is just because you're a democrat or republican, i would encourage that, because we're all americans here and you're encouraged to be a part of the political system. i think what's different here -- and correct me if i'm wrong is that who robert mueller has picked are people that have not leaked to the press -- and correct me if i'm wrong. robert mueller has picked people -- >> i don't know whether that's true i think -- i knew when those indictments were getting handed down days and hours before they came down on manafort. >> so i think to your original point, just because you're a democrat doesn't mean you can't be -- >> but do you want me to correct you when you're wrong or does that mean you're absolutely right when you're saying these things. >> i think there's a lot of innuendo >> well, it's innuendo on both

sides here i think there has been leaks and i think there is -- i mean, maybe you think it's just fake news undercutting mueller. i know that's the latest narrative, but there's a lot happening here do you -- the former fbi director, mccabe, do you have any problem -- assistant director, he still is but he's leaving. do you have any problem with all of the different ramifications of his previous life, his wife, any of that stuff raise an eyebrow on maybe some of the stuff that hasn't been above board? >> well, i'll go back to my original statement and this is that robert mueller to my knowledge has been a consummate professional what's ironic here is that when democrats do not like what he did or does, obviously he's criticized for that and republicans don't like what he does or did he's criticized for that so i guess he's doing something right there. and i'll go back to rob rosenstein, the deputy attorney general who testified before congress not once but twice and said that robert mueller has not done anything to remove him from office

so, again, just going by what consummate professionals are saying, going by what the facts that we know are telling us -- >> do you have something for this >> i wanted to try to understand what he thought of some of the comments that either were made or weren't made by gary cohn who still is in the white house. but some of the comments that were quoted in the book, if they're accurate, are relatively damning and you'd imagine it might change the relationship, if it hasn't already, given by the way gary cohn has made other critical comments i think directly to the president after charlottesville. >> yeah, i think that's a conundrum people find themselves in as i understand it, a lot of folks thought they were speaking off the record a lot of feolks -- to this book a lot of folks were transparent about what they were saying about this president because they thought this would be deep source now, according to the author, he's got tapes basically saying "you know you're on the record here you know this is on background" which is different from being off the record as i understand it, the president will sue the author

later this morning so the question becomes is whether or not the author will release those tapes where hopefully it's very transparent in terms of what people said and didn't say >> we appreciate it. thank you robert traynor. >> good morning. >> when we return, the next move for stocks the s&p 500 closing and we'll talk markets after this break. and later scott gottlieb talks us about the push for generic drugs. stay tuned, you are watching "squawk box" right here on cnbc.

welcome back the broader indices pushing further into record territory as we count down to the payroll numbers. joining us right now, steven rischuto, chief economist at mizuto security. i never get that right did you see that to help me, they tried to do it fphonetically phonetically. >> and you still mispronounced it i know you have good eyes. >> i'm going to have to get glasses. covering the equity angle we have the global head of investments for city private bank i was a private bank question

for you before we go anywhere. >> okay. >> you don't know this it's coming out of nowhere did you see the report that merrill lynch for its clients won't allow them to trade anything related to bitcoin or cryptocurrencies >> i've heard that this morning and i find it an interesting thing to do. so that's interesting to me. but their rationale for it i don't think is clear it's as if they know definitively it's a fraud. even though it's not someo ee'si would put in a core portfolio, it's an odd thing to do. >> do you have clients calling you about bitcoin. >> not at all. people are skeptical a global client is looking at their ability to move money all over the world and they don't consider this to be a stable way to do that at all. >> sorry to go into the boip re - bitcoin realm. >> every client meeting i've been to in the past four months has had questions about

cryptocurrencies talking about equity investors, fixed income clients or issuers, for that matter, corporate america asking questions about, you know, what are the purposes behind it. >> and you tell them >> i am involved in a very small way because i only get involved to learn about it is if i was involved i think the whole blockchain concept is extraordinarily interesting and will have extraordinarily technological ramifications throughout the entire financial services industry and the question then becomes well, is there one vehicle that is going to dominate in that process and that's what i think the debate is all about. it's not necessarily boyne, it's about the whole blockchain process in general and which may be the one that dominates. >> i'm reading your notes. i don't remember you being a 2.25 to 2.50 you're saying the tax cut may do

something, 25 basis points if it goes to 2.50 to 2.75 for gdp. but you weren't at 2.25 to 2.5 i give you grief about how bearish you are about the economy. >> i never understood that, those are my growth numbers. >> 2% are anemic and bonds aren't going up? >> but i believe we'll test 3% before we come back to 2.75%. >> so you think yields are headed up to 3%? you've gotten more bullish on the economy, is that fair to say? >> i've bumped up my growth numbers by 25 basis points based on the fact that we'll spend -- >> i didn't know you were at 2.25% to 2.5% before >> yeah, the average growth rate has been -- >> i thought that would be an uptick. >> i was saying we'd have average growth. >> we're higher than that. our real focus is we can see growth rates going up to 3% pretty easily but what's happening now is a sequence

where global growth is actually accelerating if you look at the pmi numbers across the world, manufacturing, utilization, commodity prices, although this is a blip i think, moving higher. and there is a general acceleration taking place globally that will be built upon, because of what the united states did with its tax policy so if you think about it, the deficit spending that will happen here, the tax policy change and global growth acceleration is going to drive rates higher i think people expect that but they're also going to drive equity earnings much higher than people expect outside of the u.s. >> we're at -- we've been at 3% for a couple quarters already. so we'll have to go to back down to get to your numbers you don't have to attribute this to trump it could be global growth. you don't have to give credit to -- >> you've been at 3% for two consecutive quarters we've managed to do that once before in this expansion. >> i know, i know, but 3% we haven't. >> so we'll see if we do. >> what are your numbers for the fourth quarter

>> my number is 2.7%. >> that's not that far off. >> i think you'll lose 3% expectations to trade and inventory. i think what happened in fourth quarter is inventory and trade. >> if you're right, what do you do about it? >> equity markets will do well earnings will outperform the economy. that's the difference because the tax structure is preferential to corporations, it's going to drop more money to the bottom line. they won't invest a hell of a lot in plant equipment and you'll wind up with -- 10% is a great year. >> but that's in the united states. >> that is correct. >> 10% would be a great year in the united states, i agree i think you'll have more exciting returns outside of the united states. >> and where are you going what are you doing >> we're moving clients into emerging market equities broadly. i don't think there's a specific market you want to pick out. and the reason is the large discount that you have to the u.s., about 35% on a pe-adjusted basis discount to the u.s. and you'll see specific sectors, whether it be health care,

financials, tech, that will clearly continue to outperform and that's why active managers will make their money so the answer to your question is we are overweight equities, underweight fixed income for the reasons you're chatting about and we're really telling clients one critical thing, they need to go global. they need to move their portfolios for real out of the united states because 80% of investors -- >> for real? >> as in a significant portion of their assets, 20% or more out of the united states to equities not here four out of five investors don't do that and i think they're going to miss the benefit of the dollar being weaker in the future and they'll miss the earnings rise. >> why is the dollar going to be weaker when our central bank moves to raise rates >> the tax policy is done. we know what it is now the question is -- and that's what we were debating a second ago -- what's growth in the united states and whether it's 2.75% or 3%, at the end it will be a known thing. then the question is what do central banks do outside of the united states where we expect them to become tighter investors are going to have to

take and buy $870 billion worth of securities as the fed steps away from its central buying policies so there's some significant things under way that are going to drive returns higher but are going to -- >> we just had a conversation earlier about how if you can get zero interest rates basically in japan, when you look at our low interest rates that they may be, it still looks like a great deal if you're an overseas investor to be saying i can get much better rates by just buying that. >> but that's my point it won't just be a rate story. i think we'll see rates not necessarily in japan but definitely in europe on the rise to a small degree. this momentum is moving on. >> i don't remember in november of 2016. were you just rabidedly bullish about domestic equities? >> we were bullish on domestic equities. >> were you saying better abroad back then? were you saying 10% for 2017 or

what were you saying >> we were 8%. >> this was much more -- a lot more happened than what you thought would happen. >> i think the degree to which this tax bill affected the corporate sector alone, it's that single thing, is going to change the dynamic in the united states for many years. the -- and that's very good from an eps standpoint. what is going to happen outside of the u.s. and to corporations generally is they're going to get more efficient, they'll generate more returns in total earnings, the earnings growth will be greater than the growth of the economy and that's a critical thing for investors to look at. so when you think pes are expensive, they're only expensive if you don't have that happen. >> guys, thank you. >> my pleasure. coming up, fda commissioner dr. scott gottlieb is our guest. can we ask him about that drug from yesterday $850,000 for a single treatment. but you either go blind or you get -- i'd try to --

>> the problem is trying to get the insurance companies to cover it. >> well, we're talking generics but that's a big number for the single treatment plus the latest on the winter storm and the extremely cold weather gripping much of the country. it's cold because it's warm. plus patriots coach bill belichick with some words of wisdom for his players as the blizzard works its way toward new england. playoffs are coming up "squawk box" will be right back.

. coming up, the push for more access to generic drugs for the fda in 2018. we'll hear from fda commissioner scott gottlieb. u.s. equity futures are in the green, dow opening almost 70 points higher. we're back in a moment

good morning, welcome back to "squawk box" here on cnbc, we're live at the nasdaq market set in times square. among the stories front and center, jace pea repo.c. penneyg its year guidance. shares are up about 5.5% in the

pre-market walgreens boots alliance posting better-than-expected earnings revenue the cia saying results were driven by prescription volume and market share volume. the company is raising the lower end of its 2018 guidance but notice this does not take into account any impact from the recent tax legislation. and capital one says it is working with all hands on deck to fix an issue that caused customers to be charged with duplicate debit card transactions this is a serious issue if you have a debit card because the money is literally taken out -- it's not a credit card you pay at the end of your month. >> back this up. what happened? >> no word on how many people have been affected apparently if you are -- certain capital one clients, customers, were affected by this. literally if the price tag was $20, it would be $40. >> how long was this going on? i have a capital one card, i have to look this up. >> i don't know. they say they're working on it they do say all these charges

will get reversed but that's what's happening. >> so no worries, just stay waum we'll get back to you. >> we'll see. in the meantime, the fda is prioritizing access to generic drugs in 2018. joining us with more on the fda's agenda in the new year and a preview of the upcoming j.p. morgan health care conference is fda commissioner dr. scott gottlieb also joining us is meg tirrell thank you for being with us today, doctor. gottlieb. >> thanks for having me. >> let's talk about generic drugs first. you have made this a big issue, you want this to be a priority this year and you've released two sets of guidelines, one is for the industry to tell them what they need do better, the other is for the fda internally. what keeps generic drugs from getting to market quicker? >> so we released these yesterday. the goal is to try to cut down on what we call multiple cycles of review. the reason why generic drugs were delayed getting to the market is because many times the applications would undergo multiple cycles of review, up to

four on average. it would take four years to get a generic drug approved. we want to see more of these drugs get approved in the first cycle. that means the applications need to come in in better quality, so we put out the guidelines to the industry on how to improve the quality applications we also need to make our own process more efficient so the other guidance we put out was to fda describing a more efficient streamlined process for reviewing those applications and trying to get them approvedon the first cycle. >> what are the issues with the applications coming in from the city what kinds of things have been missing? >> often times they're missing certain information. you're dealing with smaller sponsors that may not have the sophistication, haven't gone through the fda process many times. a lot of times there's manufacturing information missing, a lot of the issues that come up in the generic drug approval process are in issues with the application itself, the way the studies were run, but more related to the manufacturing process. so we need better information about that we approved a record number of generic drug this is year, over

a thousand, we'll release the final number in a couple days. we're on pace to do more this year but the only way to do that is to get more of these applications approved on the first cycle. >> if you are talking about generic drugs taking an average of about four years to get to market at this point, where do you think we'll be by the end of 2018 >> that's come down a lot. we've committed to try to approve them on average of about eight to ten months depending on the type of application being filed with us. i think we'll hit that for the applications where we've made that commitmentment i think the numbers will come down draw that theally a-- dramatically. we're also focusing on biosimilars, copies of biological drugs, releasing policies around that trying to streamline that process as well and create more competition for biologics. >> is there any consideration at fda in potentially publishing complete response letters, the companies that you send to

letters when you don't approve a drug >> i'm going to give a talk about the steps we're taking to increase transparency and get more information to providers and patients we'll take certain steps to increase the amount of information that we released related to the review process. we're still looking at the issue around the complete response letter and the question is what subset -- potentially what subset of response letters if we redacted them and made them available would serve a public health purpose i realize there's interest among the investment community to get access to this information i believe we should facilitate more transparency but we want to make sure there's a public health bottom line for why we're doing that so there may be a subset of complete response letters that have certain safety information in them. where it's important to get that out and that's what we'd be looking at. >> as we approach the j.p. morgan health conversation next year, this huge industry summit, one of the biggest events in health care investing, a lot of people saying one of the positives of 2017 has been the fda under your leadership. but some critics say that the

fda's standards may be lowering when it comes to approving a new branded drug how do you respond to those critics? >> i think this is a false dichotomy. any time people see the process becoming more efficient or see more robust innovation coming to the market they think the only reason that's happening is because we're sacrificing on the gold standard for pre-market review and that's not the case i think we can make the process more efficient and see more robust innovation coming to the market and get a higher degree of assurance around safety and effectiveness if we're doing smart things in the review process. this year we hit a record for the number of devices approved, 95, an all-time high we also hit a record for the number of novel drugs approved at 46 and we approved the only gene therapy products ever approved on the market so this was a robust year for new innovation that's a reflection of what's happening in the pipeline. >> dr. gottlieb, you've made a lot of changes at the fda and shaken things up very quickly

and rapidly, however this week there was an inspector general report that came out from health and human services that criticized the fda for being slow in take e taking tainted ff the shelves. this was before you were there be can you tell us about that? >> it was 2012 to 2015 they looked at 30 food recalls, they looked at complex food recalls. any time there's a single food recall that doesn't happen the way it should isn't efficient, is too slow, consumers don't get informed quickly enough. that's the problem we need to fix it. we've put in place process improvements when we look back at the 2017 numbers which we're doing right now it will show improvement there's things we'll do going forward to make the process better one thing i want to work on is getting more information to consumers when there is a food recall so if a food is recalled and you happen to come into contact with it at school or restaurant, can we disclose the school or restaurant distributed that food? we want to do that and we'll look at how we can provide that information for the first time. >> of course one of your biggest

stated goals coming into the job was taking on and trying to help with the opioid epidemic and last year we saw the fda request the removal of an opioid drug from the market for the first time it seemed like the fda was going to look more at that what can we expect in terms of looking specifically at the opioid drugs on the market already. could there be more steps to that and other steps the agency is taking on the epidemic? >> that was based on assessment with a risk associated with the illicit use so we recommended the market withdrawal of an opioid product based solely on an assessment of the risks associated with the misuse of a product, the illicit use we'll look more closely at illicit use as a component of how we assess safe any the pre-market and post-market setting so you could see more actions on the basis of safety concerns that arise in the setting of the misuse of a product. we'll put out more specific guidelines and we're doing some analysis of different opioids to

look at the likability and see whether certain opioids have more abuse potential than others because they're more likable so if we do find that, we could take additional regulatory actions on the basis of that information. so i think that there's a possibility that in 2018 we could be looking at additional regulatory actions if we make these scientific determinations. >> commissioner gottlieb, can you talk about your theory for managing the fda and how you come at this we talk all the time about how breaking down regulations has been a really powerful part of what the trump administration has done i think you take a very nuanced view of this a lot of times you're breaking down regulations, in other places, you're making regulations smarter and making government smarter how do you approach this and what would you say other agencies could maybe learn from what you've been doing >> i think we're trying to look at places where we can make the process more efficient, make it more modern. there's a lot of things we do not necessarily because they're the best way of doing things but because they're the way they've been done historically

where there's opportunity to build in more modern approaches, better science into how we make considerations that's what we're looking to do. there's good ideas on the shelf. one of the things i learned when i was at the agency last time is that the ideas need to come from the professional staff and what doing is come in there and set out goals and work with professional staff on how we're going to implement the goals but let the ideas come from them because they know how to get things done. the other thing that i will just say coming into that agency and having been there before and worked with two commissioners is you have sort of what i will call a crisis of the day there's something that's going to happen unexpected on a daily basis just because of the scope of the agency. you need to be able to manage in the front office to both handle that issue and also advance your agenda at the same time. you need to do both. if you don't have the staff to do that and you aren't set up to do that, you can become consumed by the issues that will come up in the job and not advance a forward agenda so that's been the challenge historically for people in this role that's something i was mindful

coming into this. >> what's the crisis of the day today? >> i don't know yet. i'm not in the office. >> well, dr. gottlieb, to end it where we began, with generic drugs. one of the unique things you did to deal with the martin shkrelis of the world is publish a list of drugs that are old that don't have patent protection but that don't have competition how much response have you seen from the industry in trying to develop competitors to drugs on that list and avoid these kinds of 1,000% price increases? we just saw one with the cancer drug, the "wall street journal" reported. >> the other purpose of that list -- we've seen some interest, the short answer to your question. the other purpose of that list was to identify which drugs we'll prioritize the review of so i think this serves as a deterrent from people coming into the market, playing what i've told you i think is a regulatory arbitrage where they buy the low volume drug that doesn't face a lot of competition, jack up the price a whole lot, know it will take maybe up to four years for fda to approve another application so they get that monopoly to themselves because of the slowness of the regulatory

process. so i've said for the drugs on that list, any application that comes on that list we put at the top of the queue that's a deterrent from anyone trying to pick up the drugs and jack up the price. they know they won't have a four year monopoly, they might only have a six-month monopoly. that was the goal in publicizing that i was trying to objectify the potentially bad behavior, if you will. >> commissioner gottlieb, i want to thank you very much for your time today and, by the way, e-mail us later, let us know what the crisis is. >> i hope there's none today thank you very much. >> and, meg, thank you. on march 28, 2018, this year, cnbc will be holding its first ever health care conversation in new york, it's called healthy returns and it will be featuring fda commissioner scott gottlieb. it will have leaders of hot startups like flatiron health. if you're interested, you can go to cnbc.com/healthyreturns for tickets and more information. coming up, the winter bomb,

the bombogenesis incoming. a major snowstorm and wind storm gripping states along the atlantic in the new york area, nearly 900 flights have been canceled and as far south as florida water parks and resorts are being impacted by temperatures nearly 20 degrees below normal. weird. we'll have a live report after the break. in the next hour, jobs data from adp as we get ready for tomorrow's employment report "squawk box" will be right back. and i had all these points from my chase ink card. so i bought ingredients, utensils, even made custom doughnut cutters. wow! all with points. that's how i created the ripple. the doughnut, in a doughnut, in a doughnut. suddenly, it's everywhere. i mean, it really took off. what will you create with your points? chase for business. make more of what's yours.

welcome back we've been watching the markets very closely because of the huge run we've continued to see in the first couple trading days of this year. two days and two new records the nasdaq two days ago crossing 7,000 for the first time ever. then yesterday you saw the s&p 500 crossing 2,700 for the first time ever. there are green arrows across the board once again with dow futures up 63 points, s&p up by 2.5% and the nasdaq up by 16 parts of the sunshine state seeing snow as temperatures in florida hit 20 degrees below normal we're joined now from -- where

are you? back it up again let me see it. what beach are you, eric >> it's easier to say amelia island we're in the northeast corner of florida. it's freezing cold right now the sand i'm standing on is hard as a rock it's like concrete it's very cold nobody behind me the beach is empty but there's still a convention business those businesses keep going on even though it's freezing cold 20, degrees colder than normal we spoke to gill langley a few minutes ago, the ceo of the visitors convention bureau on amelia island. he talked about how they're dealing with the cold. here's what he said. >> well, it's cold but it has so many benefits for the destination. the spectacular sunrise, everybody is on the beach taking a look at this it's not been this cold in a while but it's a good break from

the normal 65-degree temperatures we have. >> he talked about how rare. they don't feel their business will struggle that much. he contrasted it to the hurricanes they had last year, they still had growth despite the hurricanes so he's looking for something similar here on this island. i think the key is that as the tide is coming towards me, you have to realize as long as it's not snowing, their business can function and those flights just need to deliver those tourists to get down here from wherever they're coming, like where you guys are in new york back to you in the studio. >> that was going to be my point, eric. you are down there roughing it, oh, my goodness, it's a little colder than normal we feel for you. >> i'm shivering. >> look at this shot here. >> it was 27 degrees 27 27 degrees that's weird. >> look at what's happening here eric, i got e-mail from your wife who left up here who says she's been shoveling this morning. so nicely done. >> i tried to get back i tried to get back, they told me to stay. >> i bet. >> did you fly into jacksonville, eric

you're just north -- i know exactly where you are, right below cumberland island. >> we flew to orlando yesterday and looked at the theme parks that were closed and then they said "now you have to go to the beach. so they've given me these hard assignments. >> are you going to get a drink with an umbrella or what that's what i'd be doing. >> i brought an umbrella but i haven't had to use it. >> we're talking a drink with an umbrella. >> it's freezing, it's 27 degrees in jacksonville. >> he's on a beach >> i'm on the job here there's no drinking. i'm on the job i have these hard assignments talking about how cold it is it's freezing in florida that's rare. >> 27 degrees. >> the theme parks have had to close all of the water parks associated, which never happens. >> there's a place down there where i play golf that i got a thing that says closed the entire -- the clubhouse is closed. >> we don't do 20s here. eric, thank you. >> that's in sea island. coming up, when we return, doctors on demand. the co-founder of the startup plush care talks about the state

of the health care industry and how they are shaking things up with their on demand urgent care business in the meantime, some european markets. let's show them to you at this hour green arrows across the board. "squawk box" returns on this very snowy thursdamoiny rng. is this a phone?

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co-founder and chief medical officer at plushcare, a mobile telehealth service good morning to you. we've been talking a lot about these services yours is among a handful of these. we're about to get into flu season, if we aren't already, am i right, doctor? >> we are well into flu season it's widespread in 36 states in fact, the cdc is telling doctors don't even have your patients come into the clinic, ask them to give you a call on the phone and you should prescribe the flu medicine without even seeing them in person. >> when am i supposed to go visit the physical doctor? when am i supposed to call or do something over telepresence? >> if you're worried you have the flu, give your doctor a call, give plushcare a call and get that prescription. >> you don't want people leaving their home >> you don't want people coming

to the doctor's office and spreading other bugs. >> the piece i don't know about is when you go visit a physical doctor they take your temperature, they might take your blood pressure, other types of vitals. doesn't a doctor -- i don't know, maybe a doctor doesn't need that in which case there's a larger question why they're doing that in the first place. >> i think 90% of the diagnosis is in the questions the doctor is asking you. and that's -- any doctor will tell you that. for some people it does make sense to go in if you're elderly, frail, have other illnesses it's important to get seen. but for most people a high fever, you can take your temperature at home, you have body aches and you can get seen over video chat and we can make an assessment. >> what are the economics for the doctors? one thing i remain concerned about -- maybe because i live in new york city where so many doctors don't even take insurance so you're out of network before you even start the game -- but in terms of the quality of the doctors who want to be on a service like this where i assume the amount of money they're making on any

given hour has to be less than what they'd be doing if people were coming to see them physically, am i wrong about that >> so because we take insurance and get paid by the insurer, you just pay your co-pay the doctors make the same or even more than they would make by having their own clinic. >> doctor, did you see -- i don't know what's going on in the uk, but the flu season is so bad there, i'm sure you saw this, it's frightening to me because i don't know what it says about their health care system over there but the national health service is recommending because of the flu season that any non-urgent operations, anything that's not cancer or something that needs to be done, 55,000 operations are going to be delayed, hip and knee surgery, the number could rise to 350,000, they're saying they won't do these operations for at least two or three months because they don't have the beds for flu patients is that -- that's never coming here, is it? >> well, hospitalshere are

full a lot of people have the flu this year. the flu vaccine was not incredibly effective, unfortunately, so we are seeing just a huge influx of flu patients in hospitals -- >> everybody's coming but nobody can get access. >> the question joe is asking is a different one which is is that coming here meaning not about the flu but do we have enough beds, do we have enough services, do we have too much service? >> we're fortunate here that we have lots of hospital beds, lots of capacity, that's the way our d stem works anso we're -- >> works is the operative term there, doctor. anyway, thank you. you always pay

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dow on 25k watch we await the adp report, we'll bring you those numbers. white house intrigue president trump slams former adviser steve bannon after excerpts from a tell yawl book are released the fallout straight ahead. plus, brr. a monster winter storm wallops the east coast a live report coming up as the final hour of "squawk box" begins right now ♪ feeling hot, hot, hot, feel g hot, hot, hot ♪ >> announcer: live from the mos

powerful city in the world, new york, this is "squawk box." good morning and welcome back to "squawk box" live from the nasdaq market site in times square, squawk square, whatever. i'm joe kernan along with becky quick and andrew ross sorkin futures last we looked are 70 on the dow after another record yesterday now up 61. the nasdaq had a -- has a great start to the year up another 15 a day. the s&p trailing a little bit in terms of relative basis indicated just under three in europe we had good markets. i think it was in relation to what happened here yesterday, playing catch up in germany and france and then a ten year was above 245 but below 250 last time we looked at 246 right now and a lot of people talking about that elusive 3% finally, we might see that print in yield in 2018. that's 2018, right >> yeah.

>> uh-huh. >> goes fast, doesn't it. >> i'm still thinking decades i need to catch up on. >> i have some horrific -- well, every birthday is good -- >> it's a birthday and you're here beats the alternative. >> thank god it's on saturday so i don't have to listen to -- >> we'll have to celebrate early on friday. thank you for the reminder. >> you can't celebrate until next year. >> we will we will. we won't just sing "happy birthday" we're going to sing "how old are you now?" >> that's the bad part and the good part. in corporate news,check ou shares of roku right now, they are dropping after a downgrade by morgan stanley from equal weight to underweight. the firm says the streaming success at roku is already priced in and that the market is overreacting to the company's momentum the analyst says roku's current valuation is hard to justify that company, by the way, after its ipo, was up about 280% as people started comparing it to netflix as a play if you will -- sort of a pure play on over-the-top performance and

specifically an advertising play on the ott market but you're seeing that stock drop on this new downgrade. >> also making headlines, intel's ceo brian krzanich sold a stake in his firm. he reduced his total number of shares from 800,000 to 250,000 we have not heard back on this yet. the vulnerabilities we're talking about having dubbed meltdown and spector meltdown is specific to intel, spector effects lots of chips. >> that affects 007. >> you're going back to the james bond films. >> that was a bad organization there. >> >> this is pretty awful. >> the speck to situation could be worse over the long haul. it could let hackers steal data stored in the chip itself, things like passwords and cached files. that's causing a lot of concern

in the technology world as people try to look for patches but as andrew pointed out before, the patch in this case has -- >> a software patch on top of the chip that then slows the chip down by about a third. >> did anyone ever get hacked from -- anyone's identity get stolen >> we don't know that's the type of thing you don't know what happens. >> this is the question about the liability. >> how do you trace it back? >> five years, three years, somehow -- >> so it could still happen? >> it could certainly still happen. >> and debit cards, i worry about debit cards in general, don't you? >> i try to use credit cards. >> you can get it reversed >> a debit card comes straight out of your account and you have to appeal to get the money put back in. >> debit cards are used for what what do you use a debit card for? >> where you buy lots of stuff.

>> but to be smart, which i'm not. >> only that's the only reason i can think of. >> to use a deb bait card. >> then it's not a debit card, just an atm card. >> plus there's the whole one pass miles that you get if you have -- >> you can get that on a credit card. >> i encourage spending in my house. does that make sense >> no. >> please spend more. >> but think of how much -- >> they comply they comply. i get so many one pass miles. >> i would listen to you, too. in the meantime, walgreens/boots alliance posted better-than-expected earnings and revenue. the ceo says the results were driven by prescription volume and market share growth in the u.s. retail pharmacy the company is raising the lower end of its 2018 guidance but it note this is does not take into account impact from the recent tax legislation so we'll see what happens with that. macy's just out with holiday sales. courtney reagan is here with those numbers. drum roll, please. >> actually pretty good. macy's holiday sales, this is

november and december, up 1.1% this is on an owned plus license basis. the first positive holiday comp we've seen since the 2014 holiday season as a result, they are also increasing their full-year guidance range and they're giving us several different ranges here. but if you include the impact from the new tax reform, the guidance for the full year is 359 to 369 it was previously 338 to 363 analysts we think are looking at 346 but it's unclear they also were looking at that from a tax reform lens if you look at the store closures, macy's has further identified 11 stores to close, but this is part of that 100 store closure program that they announced in august of 2016 so they're still working towards those 100 store closures, 11 have been identified including the fountain square store in cincinnati. >> no, you're kidding me.

>> macy's will be closing that the clearance sales start on january 8 and will go from eight to 12 weeks depending on how long it takes to clear that inventory. and j.c. penney holiday sales are up 3.4% and that company is reaffirming their financial outlook for the year so far what we know, pretty good >> all the stores i grew up with are gone mcal pipincalpine's, pogue it was a big deal when we got saks down in cincinnati. it wasn't too long ago huge to get a saks 5th avenue store in cincinnati. it was huge, andrew, big deal. >> real quickly, let's go back to the macy's numbers. you pointed out 359 was up to 369. >> there are a lot of numbers

here, 338 to 363 the updaded guidance excluding federal tax reform, 363, update including tax reform, 359 to 369 then they have this union square store gain and they have a whole other range far if you exclude that because it's a one-i'm tem. >> so the bulk is coming from better performance some additional stuff coming from federal taxes but for anybody just trying to figure out how the company is performing, they're raising their own guidance we don't know for the street estimates who hasn't, but just from their own internal guida e guidance, that's much improved largely based on their own >> it is and they point out that sales were improved at macy's, bloomingdale bloomingdale's, blue mercury they list many categories were things were better so it looks like a good holiday season for macy's across the board, categories and formats >> thank you. >> thanks. vice president mike pence out this morning with an op-ed

in the "washington post" titled "we will not be silent on iran." the vice president defending president trump's decision to speak out on the protest writing "where his successor stayed silent in 2009, trump swiftly offered iranian people america's unwaiveri unwavering support." joining us now is the former undersecretary of affairs, she was the policy negotiator for north korea and led the u.s. negotiating team in the 2015 nuclear deal talks i imagine you read this op-ed. i'm curious what your take was before we get into it. >> thanks, andrew. of course i read the op-ed and, look, everyone wants to stand with the iranian people as they speak out on their own voice, but what i think one has to be careful about is for the united states not to become the story we want the story to be the voices of the iranian people and what they want for their future

and if the united states becomes the enemys the regime wants, it just feeds into their nationalism, their ideology of resistance, the united states becomes the story and the iranian regime is no longer the story, we no longer hear the voices of the iranian people so that's the very careful step that one haas to take. >> ambassador, if i put you in charge, if you were writing the op-ed this morning, you would write what >> what i would write is let's let the iranian people speak just as we want citizens all over the world to have freedom to speak their minds, to assemble, to organize, to protest. but let's not insert ourselves in the middle of this debate between the iranian people and the regime the other thing i would say this morning is that, indeed, the president has a decision to make about the iran deal, the nuclear deal in the upcoming day starting on january 12 with waivers. and i know his instinct is to

say, well, given what the iranian people are doing we should just jettison this deal and stand behind them. if he does that, he will playwright into the iranian regime, they will say things are falling apart not because of what we're doing but because of what donald trump is doing, he is the enemy, we are not and so i hope he holds on to the deal. >> ambassador, hillary clinton, secretary of state at the time, referred to the 2009 response of the united states in terms of saying "wait and see," president obama, as perhaps the greatest regret she has from that period. so what are you saying what's the right thing are you saying that identical response of the obama administration of 2009 -- >> no, no. >> how do you walk the fine line between -- >> it is a fine line, joe, that is the problem here. so i think it is fine to say -- and best to say it with a chorus of voices across the world, not

just a u.s. voice, which is also the issue here i do want our european colleagues to speak up more. i do want colleagues around the world to speak up more and say every group of citizens, every citizen in every country has the right to speak out and i would -- >> where did we cross the line this time around by saying too much what was it that made us the story? you know that the regime -- you could -- you could just twitch when you're saying something over here and they'd say that, you know, you're -- >> of course, of course. >> they said we started the whole thing. so how do you do anything that's not going to be seized upon by the regime as meddling >> you do it multilaterally, you don't do it with just a u.s. voice, you do in the concert with others to say that this is something that is necessary for people all over the world and, quite frankly, you say it everywhere there are countries where the trump administration has not spoken out in support of human rights, in support of people's

rights to assemble so it shouldn't be just about iran we say very little about human rights in this administration all together and we need to do that more. >> i guess we just see the tentacles of iran just -- spread everywhere causing trouble and very few countries have "death to america" in their constitution it's almost part of the dna over there. >> it's not in their constitution, but they certainly say it and during the negotiations they even said "death to wendy sherman" so i take this quite personally. >> that's horrible that's horrible. >> ambassador, given your history with north korea i wanted you to weigh in on two things, the comments that the leader of north korea made about south korea and what these talks may or may not lead to and also, of course, the trump tweets over the weekend. >> well, the trump tweets over the weekend were absurd, dangerous, reckless and aren't going to help the situation. i think this is very serious

we're talking about nuclear war. i'm sure all of the investors listening to you this morning want to make sure there's peace and stability on the korean peninsula, there's a lot at stake here not only to the economy of northeast asia but to the entire world economy if we go to war on the korean peninsula. that said, i think it's a good thing that the north and south are talking but i think it's essential south korea stay in very close consultation with the united states, because north korea's trying to separate south korea from us. this has always been their intention and south korea has to be careful not to play into that while we make sure that the olympics go off without a hitch. >> do you want the north korean team to play in the olympics >> i do think it would be fine for the north korean team to play in the olympics the olympics are supposed to be in essence non-ideological and allow everyone to come forward sports have often been used, they certainly were in china with ping-pong diplomacy as a way to take a step forward

but nobody should overestimate what can be accomplished here in these talks to ensure security for the olympics we should be careful. >> we want to thank you, appreciate it very, very much. >> thank you. we have breaking economic news the adp employment report is just about to hit. steve liesman has the numbers and he joins us right now with those. >> good timing, becky. up 250,000 adp says the december payroll private sector rose by 250,000 that's better than expected. and they revised down november by 5,000 to 185,000. that 250 is the biggest number for adp back to march of 2017 and it's the third one this year above or at 250,000 or higher. here are the numbers, the good sector, that's a strong number, 28,000, the service sector an even stronger number up 222,000. there's your estimate for non-farm payrolls of 180 this is the difference that makes me think some economists are going to revise up their

expectations for tomorrow's report from the government here's how we did it small business up almost 100,000. medium business up 100,000 and large business up 56,000 so that is broad based by business. >> also broad base by specific sector here. you can see education and health up 50. trade and transport, some will be holiday spending hiring up 45,000, leisure hospitality up 28%. construction a strong 16 and manufacturing is strong as well, up by 9,000. let's bring in mark zandi, he put this is together for adp mark you think we're approaching a situation of a tight labor market >> it's very tight just over 4% unemployment, underemployment is 8%, that's consistent with an economy that's operating beyond full employment and at 250,000, that's more than double the rate of the labor force so

unemployment is going sub4%. and given the deficit finance tax cuts, this time next year we'll be mid-threes. the last time we were in the mid-threes in the korean war when men were in the military. so it will be a tight labor market. >> i'm as likely to stick to a logical theory as another person but we keep coming in month after month with these stronger jobs reports and the economists keep saying, hey, this is bigger than the rate of the growth in the labor force, we can't sustain it i think i've been saying this for two or three years and it's starting to feel foolish maybe there is some kind of well of labor here, maybe there is some miscounting here as to the total amount amount of slack in the labor market and maybe it's time to say the job market is able to keep providing workers to the economy right now.

>> unemployment keeps falling. it's falling a half percentage point per annum at this rate of job growth and at some point you run out of available labor we have a number of open job position out there already, never seen anything like that. and so you're right, 4.1 i would have thought we'd seen more wage in price pressures but at 3.5 -- if it's not 3.5, maybe it's 3, but we're headed in that direction so this economy can't sustain this on a long-run basis. particularly when we start pulling back on immigration. we need workers, high skilled, low skilled, middle skilled, we need those workers. >> let's talk about what this means for christmas spending is this a sign that retailers hired in anticipation of good retail sales in december, what is it saying about the growth of the economy? where are we after the couple 3s we put up in q-2 or q-3?

are we at 3% for q-4 >> christmas was very strong you saw in the the adp numbers the big outsized gain was in retail and transportation so the online retailers, the delivery package. so it -- that is a sector that came back to life in a significant by that the christmas buying season, so very strong and, yeah, gdp growth is probably tracking -- as you know we track gdp together and it's close to 3%. so we're right around that 3% gdp growth number. with the deficit finance tax cuts -- i think the december numbers were affected to some degree by anticipation of the tax cuts that with the tax cuts 3% gdp numbers are very possible for next year. >> mark, thanks for joining us you're going to weather the storm in orlando so you'll be in good shape down there. becky, back to you where those fed probabilities of rate hike this is year are climbing a bit

as of yesterday. back to you. >> thanks, steve, we'll talk more about that in a bit. when we come back, though, a winter storm barrelling across the east coast we have a live report from boston right after this break. stay tuned, you are watching "squawk box" right here on cnbc. ♪ don't bring me down

coming up, we're tracking the winter storm tracking the east coast contessa is live in boston some of our people got to go to florida. you're new, you haven't been here that long. >> short end of the stick. >> but you get to wear that hat. >> joe, i don't know if you know this, i'm new to somebody. behind me, copley square, iconic boston, center of business bostonians are bracing for a blizzard and their attitude this morning is "hey, we're from new england, who cares, we get this five times a year. coming up, what they will really pe f bins ren w england after this ♪

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welcome back to "squawk box," i'm contessa brewer in boston, massachusetts, where a snow emergency began an hour and a half ago the snow the falling but the wind has calmed down somewhat. this is cliched calm before the storm. already we know that the power companies here, national grid among others, expecting significant impact for their customers. they say some 9% of their customers could be without power for 72 hours part of the problem here is that the trees -- and you can see them here in copley square -- have been frozen in this cold snap it makes them much more

vulnerable to these blizzard force, even hurricane-force winds expected today we know hospitals are on standby, some of them have equipped emergency vehicles with sleds so they can get in and out of snow. and as far as businesses, 60,000 businesses in boston, this one, the new balance store, is closed for the storm. but just next door, the cvs is open and will remain so 24 hours a day, they say, they don't close,here f ty'rom new england. quick break here, "squawk box" is back after this

welcome back to "squawk box. rick santelli here with supposed breaking news. we're looking for jobless claims hey, they're out congrats to all the people involved considering the weather. 250,000 was adp and on jobs looks like we have 250,000 i had to take a double take, the same as adp which means it's up 3,000 from a slightly revised 245, that was up 2,000 listen i have my questions on anything on the initial claims side with all the holiday, but, of course, we'll have to see how next week looks. continuing claims, week in arrears dropped from 1.591 to

1.491 million and as for that adp number, it's just amazing to me how the notion of full employment and how we calibrate so much policy to the unemployment rate and the notion that we've used up the jobs. it's so blatantly wrong we continue to expand in paces that don't seem logical with the assumptions we made in the past. it will be interesting to see tomorrow's non-farm number becky, back to you. >> rick, thank you very much and happy new year great to see you. >> happy new year. as the new year begins, so does the republican tax law and while democrats in high-tax states are up in arms over the loss of the salt deduction, corporations are celebrating with stock buybacks, bonuses and in some cases pay raises joining us is ohio senator rob portman, thank you for being here today good to be on with you. >> i know this is very early days the tax law has been in effect for a couple of days, but what are you seeing in your own state at this point? >> i'm seeing people getting

better paychecks because yesterday i've got news that another small business in ohio wants me to come visit him tomorrow tuesday i was at a small manufacturer in cincinnati and in both cases these are small companies but companies that are excited about the tax relief and they're giving their employees bonuses, putting more in 401(k) plans, in one case giving more to charity so it's happening nationwide in ohio yesterday announced they'll move forward with bonuses and provide more with their 401(k)s as you and i have talked about before, that in combination with the middle-class tax cuts is important but i think it's overshadowed by the fact that you will have businesses moving production back to america i've talked to a number of ceos over the past several months about the tax reform as it relates to international business they can now be competitive here in america foreign companies will nova scotia more in america. this is the bigger story

i know you'll cover it when it happens but i think you'll see some big news coming up as to companies that are literally moving factories from overseas back to the united states. >> i want to talk about manufacturing more in-depth in just a moment but let's talk about the tax bill first we have talked about how the tax bill was not popular when it was being conceived in congress. particularly in a lot of the blue states where they'll see those salt deductions come down. what do you hear from your constituents in ohio what are you getting in terms of feedback is this going to be something that it takes time before people really buy into or is it something that's already popular there? >> well, look, i think these announcements are making it more realistic for people they can see it's happening in the way that some of us have talked about, but proof is in the paycheck, too. so i think come february when people see their withholdings change, in other words when they look at their paycheck and see that uncle sam is taking less out of their paycheck and more is going into the family budget, that will be a big difference for people folks are skeptical about

washington in general right now and i get that but it's real middle-class tax relief and it will affect people's bottom line so i think that will be important and as i say when you start to see bigger moves and when i'm talking about is companies invested in ohio now saying they're going to put more money into ohio, they're telling me that because the lower rates and the expensing and so on makes it better to put investment in america rather than in japan or china or germany. >> but from your answer, i'm guessing you are getting people who are calling in, writing in, people who maybe you met at home over the holidays who are saying that they're not pleased with it right now, that it's going to take time before people in ohio -- >> i'm getting just the opposite because when i go to the grocery store, which i did a lot over the last week or so, and to the gas station, people just say thanks went through the tsa line yesterday and the tsa guy said "thanks for my tax cut." so i think people are seeing it. what i've said all along, bucecy

check it out go to the jct.gov, go to a tax calculator, the "washington post" has one. figure it out for yourself. >> i'll put you in touch with my accountant and you are not going to hear a thank you from -- because we have new york and new jersey problems. >> is that joe or andrew here's the average deduction in ohio for state and local taxes, $2500, here's the average in the county where you live, $25,000 is that fair >> no. i'm just preaching to the choir. if i see you in the gas station i won't say thanks. >> i just want to know what the senator thinks of some states like new york, you've heard cuomo and others float different

ideas around how to get around -- payroll tax, either running things through payroll t tax. running through a 501(c)(3). do any of those things work, should work or hold up >> i don't know, i won't give tax advice but i will say that i think you have to look at this in terms of what the overall effect is. the economy is going to be improved because of this this is a longer term play, too. this is going to result in american workers being more competitive everyday and foreign investors liking america better, basically america will be a better place to do business. we went from the worst business tax code among all the developed countries to one of the best overnight so it will take a while for that to sink in and second in on state and local taxes and property taxes there is a deduction capped at 10,000 bucks. it's something that is philosophical. i mean if you think the federal government ought to be

subsidizing the states for taxes then you feel differently. >> we have other problems. we can't write off our agencies anymore. we got -- these are very high -- these are 1%er problems and i'm sort of kidding and if andrew hadn't sold all of his stocks on november 9 after the election he would have -- >> i do not do any of that. >> he would be making more i have a question. do they ask you in the gas station what is in god's name is wrong with mike brown? does this make sense to you, marvin lewis [ a can you explain to me this should we have given him another two years? >> for the bengal to win the last two games was a shock to everybody. >> they helped buffalo, they didn't help the bengals. >> people were excited. >> they're giving money -- buffalo has given money to andy daltan's foundation. >> tens of thousands of dollars

already in 17$17 increments the bengals came through at the end so hope springs eternal for next season, joe. >> no, it doesn't. >> senator, thanks we're not allowed to own stocks but he sold his mutual funds >> i do not do that, either. i did nothing of the sort. >> still hasn't bought back in, either still short. >> wrong again >> coming up -- >> the sorkin family happens to be relatively long. >> rpm international out with earnings we'll talk to the ceo right after the break. us. it's what this country is made of. but right now, our bond is fraying. how do we get back to "us"? the y fills the gaps. and bridges our divides.

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welcome back futures are indicated up now take a quick look up 77 points now which is what the dow needs it's better given the strong adp numbers we saw the s&p up 5 and nasdaq up 7.5. rpm international is up. joining us now, the ceo and chair of rpm, frank sullivan rpm has various and sundry operations in different -- some of it is industrial codings and the like can you tell us what your

company does and we'll talk about the just-reported numbers then we'll talk about whether tax reform will help or not. what does rpm do mostly? >> sure, good morning and happy new year rpm is a holding company we have 40 independent business units. about 60% serve industrial markets and about 40% consumer markets. our consumer products include primers, sensors, tester model paints we're kind of the kings of paints and in the industrial sector we serve high performance codings and construction chemicals typically that protect concrete or steel or go into construction markets. >> commercial roofing as well or -- what do you do with commercial roofing >> commercial roofing, waterproofing, our roofing business mostly north american is one of the leading producers of industrial roofing products and as we speak they are on a

role really good pickup in industrial markets globally but particularly in the united states that was a big reason for our strong second-quarter results. >> so how much do you sell here and how much do you sell internationally? >> so we sell probably about 3.5 billion in the united states and another billion or so in europe and the balance throughout the rest of the world. >> in the past have you -- has the tax structure in the past caused you do things that gave you less of a difference this country for the tax -- i mean, this will make a difference for you 2at 21% >> absolutely. huge difference. i can't speak for technology or finance, but for manufacturing this bill is great and i think anybody that says otherwise is missing what happened here it's going to end up being somewhere between good, very

good, or great it allows repatriation of foreign earned profits in cash flow back to the u.s. which previously we could not do one of the things we're excited about is the ability to 100% deduct for tax purposes immediately capital goods result of tax reform we're looking at accelerating 10 million dollars to $15 million of capital spending, up about 15% increase where we are now and $130 million budget that will be accelerated into this year as we read it, there's about a five-year window for immediate expensing. that's for u.s. capital spending our numbers don't sound big but that's a 10% or 15% boost and if you see that boost across the board, capital goods in the u.s., happy days will be here again, at least in the manufacturing sector. >> and that would allow some companies it wouldn't be a

choice of what to do with some of the repatriated earnings or profits. it wouldn't be share buybacks and dividendive crease iv incree hopefully it spurs demand for products you make and you have to hire more people and invest maybe it does work a lot of people think it's a pipe dream. >> time will tell in terms of better understanding this bill as time passes but our early thoughts are twofold -- first of all, it's accelerating u.s. capital spending, particularly production capacity. a lot of that will go in our home state of ohio kudos to senator portman for his effort to make this happen the other thing we're looking at is additional on top of our normal contribution, $50 million contribution to our pension plan, rpm still has an active pension plan along with a match 401(k) so pretty healthy benefit program and those are the two

things we're looking at immediately but there is a lot of good stuff in here for u.s. manufacturers. >> you mentioned portman i was needling him about the bengals and i'm sorry. the bengals look like alabama compared to what you're dealing with in cleveland and my condolences to you for that season. >> last year we said it couldn't get worse. i promise you next year the browns will be better. >> it's impossible to get worse next year. hope springs eternal given how much better your company is going do, and i know you're an industrial company, but is 3% gdp in your view possible if all companies do better it seems like it might be possible, right? >>. >> one of the things that's missed about the big let's say eight-year pickup in the economy is for the last three years globally there's been a real recession in manufacturing and this year we're coming out of it pretty much across the board so i think 3% gdp growth is doable.

>> mr. sullivan, thank you. >> thank you, happy new year when we return, it may be cold outside but we have a look at some of the hottest stocks that end to do well in the winter we'll tell you about them next one hint, netflix. plus jim cramer will join us from theeworstk chge ve n yk ocexan back in a moment

welcome back it's cold outside but dom chu is he's got a few stocks that usually heat up during the winter >> we're talking about stocks that heat up when the winter weather hits all of us our data partners at kensho take a look at the last ten years to see which stocks do well on a performance basis. check out some of these names. one of the best-performing stocks during that winter span winter is between the end of november, we'll call it, and the end of march during that time over the last ten winters, home depot shares, home improvement retail up about 11%. it's a positive trade 80% of the time maybe people going out buying salt, shovels, that type of stuff. netflix, we talk about that whole cabin fever of people huntering down and watching online videos all the time, binge watching everything. those shares up 35% on average

each season. 80% positive trade for those over the last ten years. auto zone. are you going out there buying new car batteries, scrapers for your windshield? that sort of thing that trade is up 11% on average. it's a positive trade 90% of the time dominos pete cedar people who don't want to go outside, it's 24% upside on average, positive trade, 90% of the time and for those outdoor gear thuzithu enthusiasts, timberland or northface, the parent companies of both up 17% on average. it's been a positive trade 100% of the time. it's not to say these performance numbers will continue this time around, but if history is a guide, some of these stocks do heat up when the winter weather gets really cold, guys >> you are a good soldier, aren't you, dom. so somebody came up with that hot stocks for cold weather and you, they say, let's give it to dom. and you take it and you do it and you run with it and you

smile. our good -- you're a good guy. i love you >> i appreciate the fact that you love me. and i like the fact that we have a news magazine here that can go through some of these. it's not exactly the craziest thing. maybe some of these stocks aren't exactly -- >> my wife used to -- she would always come up with hot summer stocks it works, it's fun, i like it. but you do it with enthusiasm and i like it. >> i'll tell you what, joe -- >> it's -- >> it's going to happen, guys. in the middle of the summer, i'll tell you what, when things heat up, i will probably do a story about stocks that cool off. >> tailor made >> or that heat up or -- yeah, anyway we'll come to you to do it, dom. >> you got it. let's get down to the new york stock exchange 77 points now, jim that would be three straight more records adp, 250 i don't know, man. and people are still not ready to say, you know, all systems go they're still not, are they? >> well, mark sandy sounded positively -- yeah, he's very

worried. he's a very worried guy. this is killing him -- >> i know, i wasn't going to say it, jim. he's been saying the labor market can't do any better it's been two years it's been too tight. >> it's bad. it's bad we're hiring people like mad since trump got elected. it's bad >> because now there aren't -- there's no one left to hire. >> i gave you phony news, i'm sorry. how about dominos? i love what domino's said. i love what dom said about domino's two upgrades, rpm, there's flooring and roofing, bingo, buy home depot hiring bad, joe. >> you see -- >> hiring's cleveland. >> jim, you see -- >> 0-16 on hiring -- >> did you see sprint's down -- halted >> who >> sprint. sprint is halted for news. do you have any -- >> who is? >> sprint. >> do you have any spidey sense on that, jim >> no. i like macy's here

>> you like macy's here? >> that's a domino name. >> jim, i was impressed by macy's, just in terms of the guidance that they gave, based not just on the tax stuff, that was fine, but the majority of that came from their own performance they revised on. >> becky, absolutely right the people who were selling it down, they had it down almost $1 what are they doing? they should get out of the pajama traders, obviously, and recognize that that was a great number they're negative people. they probably think hiring's bad. how's hiring there are way many people -- we were under the impression that sprint was trying to do a deal with t-mobile. >> right >> whether there was a merger to be head, was on the table, but went off the table when there was a meeting among both sides in tokyo with mossason, didn't happen the question is, does this somehow come back. i don't want to speculate. >> well, we just needed some

background >> that's a little bit of the history. could it be that they're raising money in some other way? doing some other kind of convertible deal also sorts of possibilities in that realm, perhaps. i don't know but we're going to try to get to the bottom of it get there before they announce >> so, jim, we may -- probably has a 258,000 hat, doesn't he? that may be today? >> i'm sure he does. he's got the has beenberdasheryg here but hiring's not that left >> i know, there's no one left to hire. i know, jim. thank you. 79 that would be 25,000 that would do it we'll see you in a few minutes elsewhere, there's some financial advisers were banned from bitcoin and it wasn't some small unknown firm yeah, you can't do it -- well, we'll tell you about it. >> they banned tmsheelves. >> no, merrill banned. and respond 60 times faster. it lets you know where your data lives,

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bitcoin or execute client requests not even just pitching, but if the client comes, you can't do it merrill lynch cited concerns over what they say is the cryptocurrency's suitability so, it's interesting from a competitive perspective, given that everybody is calling their advisers these days to say, can i get into this, can i not does this help their business in terms of creating a sense of trust? or does it hurt them in terms of people saying, i can't do it with you, i'm going to go across the street and do it at citigroup or goldman or -- >> can we move on to something a little bit more relevant >> to you? >> important yeah taco bell may have an answer to mcdonald's fries i heard about this yesterday at home the fast food chain rolling out a limited edition of french

fries. they're called nacho fries including bold mexican seasoning including a side of nacho cheese dipping sauce. >> they're nacho fries, they're mine >> yeah. taco bell, i defer to. whatever they do, i like you like taco bell >> i like taco bell. make sure you join us tomorrow stay warm, everybody "squawk on the street" begins right now. a shot of the winter weather outside slamming the east coast as blizzard warnings hit at least half a dozen states. good thursday morning. welcome to "squawk on the stree street". i'm carl quintanilla with jim cramer faber is off today we're watching the dow and s&p 500. adp comes in strong. that two-year is