tting crushed. well tell you about the comment on the conference call that sent that stock sharply lower. and big newsmakers at the world economic forum they'll tell you what treasury secretary mnuchin said that is moving the dollar. have you ever seen this before, a treasury secretary saying he likes a weaker dollar? i've never seen that wednesday, january 24, 2018 day two in davos "squawk box" begins right now. ♪ good morning welcome to day two in davos, switzerland. another beautiful day. sun is out things are bright. >> warm. >> so bright, it feels like we're staring at the sun sitting here look at what's happening with the u.s. equity futures.

you saw most of the major averages yesterday sitting at new highs. the dow was off by 3 points. this morning green arrows across the board. dow looks to open up another 60 points s&p up by 3.5. the nasdaq up by a half point. overnight in asia, look at what was happening there. the nikkei was down. it slipped by 0.8% the hang seng and the shanghai were stronger. shanghai up 0.4% if you look at what's happening in the european equities market. at this point it looks like markets are flat across the board. ftse is down by a quarter percentage point treasury yields, let's look at that market. oil prices, don't mow if you saw this yesterday oil prices surging yesterday that will be something to watch. highest levels in quite awhile check out the ten-year note which at this point is yielding

2.634% let's tell you about some big stories we're watching the biggest here in davos, treasury secretary steve mnuchin making headlines at a news conference he said the united states welcomed a weaker dollar, saying it could benefit the country. saying the government is committed to growth of 3% or higher and said the dollar index -- or we should say the dollar index dipped slightly after his comments, trading below 90 we were talking about this earlier. you're not supposed to athsay ts aloud. >> why is the dollar getting weak with the rates going up >> i didn't understand the dollar's move all last year. as our fed prepares to move up and other central banks are flat -- >> look at you with your bad self that's awesome >> what are you -- >> just to have the -- to have the -- the intestinal fortitude. >> the nerve >> the t neck --

>> the what. >> the turtleneck. >> you had one on last night enough about our splendor that is davos >> you are making a statement. you must wanted to talk about it. >> you have a beautiful yellow sweater on >> you said big bird wait until yi get out the yellow gloves >> jay powell getting final approval from the senate to run the fed. powell won't officially assume duties until janet yellen's term expires on february 3rd. it's another busy day for earnings a number of earnings reports including comcast, expected to report around 7:00 a.m also hearing from abbott labs, united technologies and general electric then ford out after the close. we'll bring you those numbers, too. >> i'm scheduled to do that on friday >> what? >> the turtleneck. >> scheduled to do the

turtleneck >> i thought -- i don't have a nerve to do it -- casual friday i'll do it. >> we're in the alps >> hey i think it's youthful, you're able to do it. i think friday is better for me. >> okay. >> you going to wear jeans, too? >> i may do that that would be stepping out >> better than the shorts you're wearing now. fourth quarter airlines for united bet expectations. shares are getting hammered because investors were spooked by a comment on the earnings call that united plans to match fare prices from some low-cost carriers, hurting profit margins. also weighing on this, on margins, higher jet fuel, up 18% in the fourth quarter. that's up from the same period a year ago shares had risen more than 15% just this month thanks to upbeat forecasts at the beginning of the year shares are off 7% in early trading. airline stocks are down across

the board. you would think it would have something to do with the possible or what looks like a price car. >> all right this week in davos, citi group's ceo spoke about ambivalence with the markets shrugging off the u.s. shutdown. michael corbatt joins us right now. good morning >> good morning. great to be here >> let's talk about the news of the morning with the treasury secretary saying a weak dollar is okay. what do you think about that does that matter >> it matters, but it depends why it's a weak dollar there's two predominant schools of thought we saw it in 2014, when the fed was moving away from the quantitative easing towards the taper, towards rates rising. we saw the dollar perform well a bit of the story today may be a europe that's performed better

than expectations in terms of growth, therefore may be giving the ecb the chance to start to renormalize monetary policy, and people are saying that maybe japan is not far out there either if the dollar is adjusting because of that that's fine. >> how do you feel about the treasury secretary of the united states from a policy perspective, from a public perspective saying allowed that the strategy of the country is to have a weaker dollar. what does that mean? what does that say >> he didn't say the strategy. he said they welcome a weaker dollar f it happens. >> welcome a weaker dollar, and provided the weaker dollar is happening for the right reasons, makes manufacturing, exports, u.s. economy more competitive. we know the pains it causeded so only our companies with the numbers, the foreign exchange and frictions because of that. the second side of it, the other side of the story is is it

coming from fears of protectionism, fears of penning or looming trade wars? that's much more concerning if that's the reason that the dollar is underperforming. >> what do you think the proper answer is? >> i'm more in the camp of the first. we have to see, see some of these trade talks play out further. we can talk about trade. i'm much more of the camp that clearly to most people, certainly me, the growth coming out of europe and the breadth o that growth has been a positive surprise >> president trump is headed here tonight it's the headline of the "wall street journal" today and talk of everybody's lips here about what will happen with trade. what do you expect his message to davos to be >> i would expect it to be consistent with what he's been saying in the past, that the administration is not

anti-trade, it's anti anti multilateral trade. we've seen that with nafta, wove seen th we've seen that as a precursor in conversations i don't view any one of these conversations as one-off i view them as a broader series of conversations that are beginning and will take place over the next several months in terms of the u.s. direction of trade. >> a year ago in davos people were convinced that trade wars were looming on the horizon. that has not played out the past year, but we have seen moves to raise tariffs on solar panels, washing machines we've seen the bombardier situation, where the u.s. and canada have strained relations, and talks about intellectual property with china. do you think that trade war is still looming or that this is a smoother process, where it's a give and take along the way?

>> i'm not a believer today in trade war. when you look at trade, trade imbalances, when you look at mexico and south korea, you can specifically point to a contained area where those trade imbalances come from ie electronics so when we look at the imbalance with mexico today, the vast majority of the trade imbalance between mexico and the u.s. comes as a component of auto imports, but it's realistically not the assembly of those autos, it's the electronics so 1994, nafta is written. electronics comprise 15% of the sticker price of an automobile today that's 35% nafta didn't -- >> didn't anticipate that. >> is there room for the united states to be tougher with china? are we not justified in certain instances in being tougher than in prior administrations they do tend to -- if they get an edge, they'll exploit it, won't they >> i think you can always be

tougher. we need to be smart about where and how we use those powers or how we negotiate those you can always be tougher around certain aspects. i don't think of this as a broad brush. >> maybe we're not quite as hungry as -- we have a lot of bounty in this country obviously there's going to be people that think some of what we have, they're going to take advantage of >> i see a lot of companies in the u.s., they're hungry >> you know, i don't want -- there's the sense that maybe we're a patsy in certain instances. we're the biggest on the block and not quite as -- we don't stand up for our side of things. there's some room there. what a >> starbucks just announced that

they'll be giving raises and bonuses to their own employees we've had discussions about perhaps my cynicism or skepticism about the political reality of why some of these institutions are doing this. starbucks is antithetical in terms of -- >> now you're not cynical? >> explain that to me. what are you saying? >> i'm saying howard schultz is a democrat who has been critical of the president so the extent we talked about whether companies are trying to curry favor with the administration or washington, i'm -- by the way, maybe. >> sounds like you're saying if howard does it, it's okay. >> i'm not saying that i'm saying maybe i'm wrong save the video, maybe i'm wrong. how about that is that okay >> we'll take that >> let's ask mike corbat about what citi is doing >> as we think of the benefits or outcomes of tax reform two things the biggest benefit comes from how it affects our clients, in particular our u.s. clients in

terms of how they operate in the u.s. and around the world. we think this is going to be a catalyst for spending, investment i think people are underestimating the impact of repatriation not just money coming back but money moving around the world what it means to our consumer bank and the consumer wallet and the fact that people will have more in take home. we've seen a consume ner good sha consumer in good shape >> do you want to announce anything here that you're doing? a company perspective, we get a benefit in two different ways. we benefit in a tax rate going from 35% to 21%. citi has been a high taxpayer and will get the benefit of that as we get to take more of our ebit to net income the second piece is a legacy of the crisis, we had this large deferred tax asset, a tax credit

from some losses we took during the crisis that goes away and we get a benefit from capital that actually gets released as a function of that and increased top line what do you make of companies, including jpmorgan, announcing plans or like starbucks just did and including comcast as well, increasing one-time bonuses, salaries, is that something that will happen at citi? >> what we said, we said in our earnings call a week ago, we'll watch this unfold. we don't know what percentage of the tax decrease gets competed away we don't know what the needs of ku xh xhus m customers and clients will be. >> are you less ready to do what jpmorgan did >> no. when you think about that, it's

a trade we would do all day long we would rather take the net increase income from the tax rates and give up the tax asset, because net-net it's a positive. we make a dollar, we give back 50 cents of it so we have plenty of capacity to support our customers and clients. we'll see this unfoeld a bit then we'll react >> do you think you have rank and file employees who are wondering where their bonuses are? >> we always pay competitively >> do you think what's happened in the past month will put pressure on you an everybody else if comcast does it, does charter have to do it? if jpmorgan does it, does citi have to do it? if starbucks does it, does dunkin' donuts have to do it that's what you have to hope for from an economic perspective >> we have to see. we talked on earnings call, we have to watch the competition

and see what we get to utilize and what gets competed away. >> a couple questions on citi. the stock buyback was large. you brought down share count by 7% in the fourth quarter alone i know you have to go back to the fed to ask how much to do, is that a continuing plan? how much do you plan to buy back if you get your trust druthers >> in 2017 we reduced share count about 200 million shares, it's our intention to continue we believe we have got the capital return capability of returning somewhere at least 20 billion in each of the next two years. obviously subject to fed approval again, like the other banks, we'll go through our stress testing stub missiubmission pro get feedback on that but we're actually running at an excess today, and we have significant

capital generating capabilities. >> one thing the street would like to see is a bigger return on assets. it was 0.8% how do you improve those numbers? >> the dta was counted in our tangible common equity, now 22 billion of that has gone away. we said as a result of that going away, very little of what we would call the good calories of capital are left. so that was capital we were forced to hold an couldn't earn on so we get an increase on the enumerator, and a decrease in the denominator, and we expect returns to go up by 200 basis points >> five years from now, if we're sitting here, will we be talking about cryptocurrency and bitcoin? >> i think we'll be talking about digital currencies, i'm not sure we will be talking about bitcoin. >> do you own any? >> i do no. >> would you own any

>> i would not >> because >> i don't see it as a currency, and i don't understand the underlying fundamentals of the investment like becky's friend, i don't invest in things i don't understand >> thank you appreciate you being here. >> we should thank his wife, she gave us this cowbell to keep joe in line. okay >> i'll -- we can do it for other guests how about that coming up, more financial leaders talk to "squawk box. larry fink is next he's the chairman and ceo of blackrock, and then later, jamie dimon will be our special guest. we'll follow that at 8:00 a.m. with lloyd blankfein "squawk box" will be right back.

united technologies out with quarterly earnings the company earned 1.60 a share. this is a fourth quarter number. four cents above estimates revenue was above the consensus. organic sales growth in 2017 was the fastest in three years the latest company to hand out bonuses and raise pay after the new tax law, starbucks is giving out 2$250 million in benefits saying it was sharing

benefits with employees. hourly employees will get a raise in april eligible employees will receive stock grants of various amounts. the coffee chain expanding its parental leave policy. howard schultz is a democrat who has been critical of the president. to the extent we had conversations on whether these increases are cynical efforts to ingratiate themselves with the president. there may be something else going on here. maybe i'm wrong. i don't know >> do you believe that >> larry fink is here. larry fink pushing companies to look beyond the bottom line. in his annual letter, which is making a lot of noise in davos, he urged companies to find a sense of social purpose and orient themselves towards long-term growth larry fink joins us now. >> welcome to davos. >> welcome to davos yourself i've now been to a number of dinners where your letter has

been the topic of conversation >> did you create that topic or someone else >> other people did. in one instance i did. there's been a debate since you put this letter out. a lot of people applauding it, other people critical of it. you suggested that it's not just profit that you're after as an investor, but that to get to that profit you think the companies need to have a social purpose. that's a bit stepping out. maybe you don't think it's stepping out >> i don't think it's stepping out. i think i'm reconfirming what milton freedman said if you read his whole essay that everyone talks about, he talks about you need to be connected in your community. especially for a small company back then, 1970s as global companies in davos, we have communities everywhere. we have to be connected with every community. the most important thing i said,

profits are paramount to everything a company does. their connectivity with shareholders is about profit what i did say, to remain in front of change, to be a part of a growth environment, i believe the involvement in a community to have a purpose is vital for long-term survivability but also long-term profitability. for most people it resonates, yes, you need to be connected to employees, you need to be connected to clients that's the essence of what i'm saying most importantly i believe the companies that have purpose are the best companies in the world because it unites employees, if connects the clients most importantly it brings the

organization on to a common plain. the best companies i know of are the ones that work towards a purpose. >> the second part of the critique of this is that you're going to be taking a more active approach, and we had sam zell on the day the letter was released. >> you are sure i was watching >> i hope you were he said i didn't know larry fink was made god why should a passive fun, why should you do anything more than be completely a passive fund and let the market do what it does >> great question. as i said in my letter, an active manager, if they don't like it, they can sell they don't have to own it.

s a a pas a passive investor we have to own the companies in an index. whatev half are good. half are underperforming we have to have a voice if we're going to try to be the highest level of fiduciary on behalf of our clients. our investors are asking for this a big component talk to us about your corporate stewardship team. so we have 35 people the largest team in the investment universe. our team is inadequate now so i committed to raise the team to 70, 75 people we put in barbara novak, a great reputation in many circles already. it's about us being engaged. what i said loudly is being engaged during a proxy season is not being engaged. it's a binary outcome.

yes or no do i agree with it we were criticized because we vote 91% with managementment the reality is we're engaged with so many of these clients and they're changing their input towards our proxy with our engagement so i'm happy that we agreed with 91% of the companies that's a good testimony that we're working with more and more companies, that we're engaged. our hope is that we are leading that effort towards having more engagement throughout the year with more companies to try to produce better long-term outcomes on behalf of investors. >> i completely understand what you're saying. i agreed with a lot of what you said over years, pushing companies to take a longer-term focus on things, i agreed with telling people they need to be saving more for retirement i invest in index funds, i want to own the broad market.

that's a passive ownership, if you become the market and tell the market what to do, that's no longer me owning an index fund and me owning these things >> i hear what you're saying i don't agree. i think it's our responsibility to be engaged. >> do you charge more in fees as result >> no. no it's all expense -- just another service. we were criticized, and probably criticized on this show and many others, people called -- >> i've harassed you before. >> people called it capasive dumb money >> right >> the other piece of this is i y you have clients in i-shares, that business, but at the same time a lot of companies use you for all sorts of other programs. whether it's 401(k) programs, it's bond programs

there's a whole assortment, there's a huge corporate client base the question is can you effectively decide i will attack two, three board members when we also have business with them on the other side >> great question, but we had that conflict from day one that has not changed that conflict is as real this is why we have this independent organization that's doing this i personally am not involved when i get a phone call from a ceo asking about a board member, i send that inquiry to that team we have to be independent. the leadership of the firm, we have to be independent on these individual votes we do meet with our corporate stewardship team and talk about policies so there's some policies that i'll have an input on. when it comes to any single company, we're not involved at

all. >> let me approach it from a different angle. corporation x, y, z makes a fantastic product. they satisfy their customers needs better than the competition. they're employees are happy. they're making great strides in planning for their retirement. they pay taxes to the united states government. everything is great, but the ceo doesn't feel like embracing whatever societal changes that are en vogue at the moment sohe is not going to play ball with you on what you think -- you said change. you are embracing change he thinks some of these changes may not be lasting they may be whatever side of the political spectrum decides is important at that moment will you try to get him -- oust that board and vote your shares against him? >> no, of course not

you're personalizing it with me. >> fine. blackrock. >> thank you >> this is your idea, isn't it whose idea is it okay blackrock. i think of you as blackrock, which is a compliment. >> thank you, but it's not hopefully it's not not a compliment -- >> i get you >> thanks, joe >> biggest money man in the world. >> if a company is performing well, as you just suggested and it's a beacon for employees, i'm very confident that that engagement will be positive. you framed it in a way that i don't see that being a reality i will tell you, i have had conversations close to half the ceos who have received the letter, and i don't believe they're sucking up to me they were favorable -- >> what if they got to do

renewable energy -- >> but you're framing things -- that's not going to happen we have not done that. >> okay. >> you're framing hypotheticals that are not even the realm of reality. >> let me ask you this -- >> it's nice to talk about and frame questions that are 2% probability. >> how about coca-cola you tell them no more sugary drinks that's their business. >> how about philip morris, no more tobacco products. >> we will not do that either. >> what will you do? >> those are not issues. if they're -- we have issues many times if an individual is investing in an index that has philip morris and coca-cola, we won't change their business models to that way. that's their business model. we're not saying get out of your business >> understood. what do you make of these companies who have announced

recently plans to increase salaries or bonuses, we were talking about starbucks, jpmorgan i don't know if you're doing anything similar at blackrock. >> you know, we pay people up 11% last year. so people did very, very well at blackrock. i actually believe people are raising compensation because it's harder to find talented people a 4% unemployment rate, i believe it's harder to do it >> purely economic decision? >> 90% of it is economic the last 10% is pr would have done it any way we constantly raise wages. we try to remain competitive we don't announce it there's areas where we raise wages much more than other areas, where there's a competitive issue. i believe if the ceos are raising compensation and providing more equity owner slp

ownership to employees, that's a fantastic outcome. the big issue that will confront more and more companies is retention of employees that's going to become a big try out, especially with our immigration policies. >> thank you >> love you. i'm sure when we come back, the ceo parade continues up next, the chief executive from levi strauss. and a block bluster lineup starting at 7:00 a.m the ceos of ibm, coca-cola and jpmorgan "squawk box" will be right back. alerts -- wouldn't you like one from the market

when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time.

fidelity. open an account today. fidelity. ♪ take off for mexico with expedia. ♪ one click gives you access to discounts on thousands of hotels, cars and things to do. like the fairmont mayakoba for 59% off. ♪ everything you need to go. ♪ expedia.

general electric just out with quarterly results ge earning an adjusted number of 27 cents a share for the fourth quarter, 2 cents below estimates. g eshg sa ge says it is seeing progress with strategic initiatives the stock is up by 1%. ge is predicting 2018, adjusted earnings of $1 to $1.07 per share. so potential upside with the guidance brought down so many times in recent history. right now shares are up by 1.4%. fourth quarter organic orders down 5%. revenue down 6%. 2017 organic growth flat to 3.5% rang range. we will continue to read through more of this. >> still kitchen sink quarters from this company.

>> you have a couple more rmt. >> at '17, y17 you think you mue getting close to bottoming >> what's the honeymoon period that the investor class -- >> i think you have to start going better from here i don't know will they break it up? >> they keep announcing these surprises. at some point there can't be surprises anymore. >> this is a new executive he has kind of come clean on everything that they found to this point if he's saying there's the potential for higher guidance this quarter, maybe that signals the turn look, you get a clean slate when you walk in once you start giving me your guidance, we'll hold you accountable to that they are talking $1 to 1.07, versus the dollar the street was anticipating that's probably why the stock is up futures are still up

ge is a dow component still. up by 71 points on the dow >> when is the levis guy on? >> right now what gave it away? >> okay. now i see. now i see. i like that. the trucker jacket we'll talk about that. i should have known you were the levis guy. >> it's in my contract >> let me give you the intro that you deserve clothing legend levis has been on the forefront -- my favorite. if i'm not at work, i'm wearing levis. forefront of non-investigation and collaboration. nothing feels like those pants, right? joining us is chip bergh it's been like that my whole life you don't feel comfortable unless you're in denim the question is, if everybody already owns a pair of jeans, how do you keep reinventing and keep the innovation going, get the 10% or whatever you're looking for.

how do you keep doing that >> it gets back to the strategy. i've been there six and a half years now. and we were just talking about ge big turnaround opportunity at levis when i got there focusing on the core, which is our men's bottoms business but that's a well-developed business we have a high share globally. to grow we had to focus on two other legs of the stool, expanding for more, we were way underdeveloped in women's and in tops, way underdeveloped in outerwear. and that gave us room to grow. then the third leg on the stool is becoming a world class leading omni channel retailer. >> omni channel. >> the famous buzzwords. when i joined the company we were heavily skewed towards wholesale. the first time i started walking through wholesale stores, i was like we are entrusting our bands to this? the consumer experience was horrible we needed to step up our game and become a player in retail.

now we have 3,000 doors globally >> what percentage of your business is online jeans is like a fit thing. it matters a lot >> not as much as shoes or jewelry. >> i would put jeans up there. >> if you know what size you wear, you don't need to. >> there's so many styles. >> you're getting these skinny jeans that are sketchy that you can wear to the nightclub. >> we can help with you that online if you compare, it's more than 10% of our business and it's growing quickly. we have our owned and operated sites. we are using artificial intelligence to help the consumer with an online stylist to help them find the jeans they want especially for women it's a stressful -- >> how i don't understand how you could do that. if i don't try them on, forget it >> but you can buy them. you can return them if they don't fit. the online stylist, powered by

artificial intelligence. we have lots of data >> given the return story, what's the margin on the pair of jeans you sell online versus in store? >> if i'm selling it through amazon or my own site? >> both. >> our wholesale dotcom business is profitable. our online owned and operated business is approaching break even it's an investment we invested about 25 million, 0 $40 million a year on technology and building out a global team it's not profitable but we know the consumers come to the online business they shop. half wind up buying product somewhere else you have to be there >> you have a $200 pair of jean force andrew >> i do. >> levis makes them? >> they probably have these japanese denim jeans >> i can top that. we've got customized, the spoke

tailor jeans for $700. >> oh, my god. >> do you ever put your jeans in the refrigerator or freezer? >> that's such a bad rumorments. >> instead of cleaning them -- >> i hand wash them. >> okay. >> i scrub them with a scrub brush. >> how often >> never throw them into a washing machine. >> freeze them >> that's bad. >> people say you're not supposed to wash the jeans

it's all yours. wow! record time. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital. ronoh really?g's going on at schwab. thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer,

ask again at schwab. schwab, a modern approach to wealth management.

welcome back to davos. it's an ipo the word wald wantsa slice of according to saudi aramco's ceo, it's still ready to go public the back half of this year i asked if it's possible shareholders, meaning the government, might be aiming for a different time frame >> it's not about become ready it's about evaluating all the

information that's being passed through the government in terms of different markets that we have in terms of visited venues evaluating all of that, they're taking their time, rightfully so, to decide which market to list on. when the decision is made, the company is ready to march. >> how certain are you an ipo will take place in the second half of 2018 >> as i say, that's not for the company to figure out. it's what we only can do is be prepared and make sure we're ready for the ipo, and we are, and we will be. >> president trump tweeted that you should have your ipo in the united states. what did you think when you saw his tweet? >> i mean, to us, it looks like -- it's good that we have been looked at as a good company to be listed in different

markets. each market is wanting saudi aramco to list, either in the uk, hong kong, tokyo or the u.s., new york that is good ultimately the decision is with the shareholders what do you think of mbs' corruption campaign that has taken place and been public the last several months? >> i think it should be viewed as positive. anything tackling corruption should be creating a more healthy environment for the investment community if anything it should raise the trust in the saudi market.

when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and. that's it. i'm calling kohler about their walk-in bath. nah. not gonna happen. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. the kohler walk-in bath features an extra-wide opening

and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. call for a free kohler night-light toilet seat with consultation... or visit kohlerwalkinbath.com for more info.

welcome back to "squawk box", i'm wilfred frost. we'll get you back out to davos.

first, here's some of this morning's headlines. key stocks to watch. texas instruments fourth quarter missed forecasts ti saw strong demand for chips used by the auto industry, chips for communications industry were soft down 6.6%. sandridge rejects icahn's proposal to replace board. icahn had also sought by law changes. capitol one swung to a fourth quarter loss the company took charges related to the new u.s. tax law excluding items the company's profit and revenue missed forecast as it set aside more cash to offset credit losses at&t is embarking on a major ad campaign to pledge support for net neutrality the company published a letter from ceo randall stevenson

including "the new york times" and the washington post. he promises at&t won't block websites or slow speeds based on content that consumers want to have but the company isn't saying whether it may some day charge startups and tech giants for faster delivery of their sites and services at&t's pledge comes a month after the trump administration overturned rules requiring internet proprietors to treat all web content equally. apple is releasing patches for meltdown on older version of mac computers. this will affect several generations of intel chips apple is up about 15 basis points in the pre-market amazon's cloud business has acquired a startup called sqrrl. they previously worked for the u.s. national security agency to help amazon's push amazon formed a secret region of

data centers meant to handle computer and data storage from intelligence services. axios had previously reported that amazon was in talks to buy sqrrl for $40 million. amazon is up .2 of a percent in the pre-market disney will give a $1,000 bonus to 125,000 employees they're eligible for the bonus disney will also invest $50 million in a new education program to cover tuition costs for hourly workers disney's plat today. tows toys "r" us is shutting down 1/5 of the stores it will start next month and continue until mid april the toy retailer did note that some closings may be avoided if it's able to negotiate more favorable lease terms. we'll see if that comes around or not. still to come, a huge lineup in davos for the next two hours including the ceos of coca-cola,

ibm, jpmorgan and goldman sachs. wilbur ross will be coming when "squawk" returns and the wolf huffed and puffed... like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement

of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. if you can't afford your medication, astrazeneca may be able to help. with its high-tech the cameras and radar,c... contemporary cockpit, 360 degree network of driver-assist technologies and sporty performance what's most impressive about the glc? all depends on your point of view. lease the glc300 for $449 a month

at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

good morning and welcome back to "squawk box" here on cnbc i'm wilfred frost live at cnbc headquarters we'll get you back out to joe, becky and andrew who are in davos in just a few moments' time firstly though, u.s. equity futures at this hour you can see up by 60 points on the dow the s&p is up 2.5 points the nasdaq is going between the red and the green for the last couple of minutes or so. it's just lower at the moment.

yesterday nasdaq led markets higher it was up 0.7%. the s&p was up 0.2%. the dow was fractionally low it didn't have its own record close but this morning pointing higher to a 60 point close -- 60 point open as we look at things. dow component general electric reported quarterly profit of 27 cents per share. they missed guidance ge said the cash flow is improving. it gave a 2018 outlook largely above consensus. the national association of realtors will be out with december existing home sales later this morning it's expected that sales will grow -- sorry, expected sales fell 2.2% last month after jumping 5.6% in november and we'll see those numbers coming up later meantime comcast earnings hit 49 cents per share, two cents above estimates. revenue also above street forecasts. the company also announced a 21%

dividend increase. it will repurchase at least $5 billion in stock this year comcast, of course, the parent company of nbc universal and cnbc it's up about 15 or 16 basis points in the free market. some other headlines this morning, treasury secretary steven mnuchin in davos saying that the united states welcomed a weakened dollar. it would benefit the country and the government is committed to a growth of 3% or higher the dollar slipping slightly after those comments trading at below 90. near a three-year low. it's down half a percent this morning. if we look at the broader currency board, it's not so much those comments it's a broader dollar weakness story. the euro is up 1/3 of a percent. it comes off of strong pmi data. we've got 58.6 for the composite. the forecast was 57.9. it was the services data that surprised the up side this month.

both services and manufacturing very strong in the high 50s. so significant economic growth continuing out of europe the pound crossing 141 for the first time since the brexit vote it's the post brexit high. the british pound up significantly, 0.9%. unemployment, 4.3% wage growth plus 2.5%. the economic growth in the u.k. surprising to the up side as well as we saw, the dollar is the big mover of the morning, significantly weaker against all major currency pairs there's the futures board for you. the dow higher by 62 points. the s&p by 3 points. the nasdaq lower by a point and a half jay powell got approval from the senate yesterday to run the fed. this will make him the 16th chair. he won't officially assume his duties until janet yellen's term ends february 3rd. he's not commenting on the strong dollar policy he said the fed doesn't have a

perspective on the, quote, right level of the dollar. slightly different perspective from what we got from steven mnuchin this morning the dollar continues its weakness -- this year following last year's dollar weakness. let's have a look at markets around the rest of the world the moves in the dollar are affecting things indeed, the strong yen that we're seeing against the dollar has hurt the anything kanikkei shanghai up 0.4% hong kong in particular has had a fantastic start after a fantastic performance in 2017. european trade, not as significantly as you might expect given the run of the euro of late. it's at or near all-time highs it's down just three basis points ftse down a half a percent or so the british pound up nearly 1% again, you might expect a worse performance than that given the strength in the currencies against the dollar this morning.

checking in on commodities as well, oil prices about a percent and a half, 1.4% to be precise wti crude is up 1/3 of a percent. brent is flat at 65 -- 64.7 for wti. gold prices at a four-month high given the dollar weakness we've seen there is gold this morning up nearly a percent 13.48. let's dip back into currencies as well given of course there is the big mover of the morning we're seeing the dollar lower across the board yen, euro, british pound and indeed against the canadian dollar and other currencies as well, but let's get back out to davos. joe is going to pick things up an amazing lineup of guests to come in the next couple of hours. joe, take it away. >> actually, we're in davos, wilf. >> actually, i wanted to ask some swiss people how to pronounce it i think you'll hear it's davos >> you're right. you're right and it's "squawk box."

>> you definitely can correct me on that one. i can't really -- >> it's coca-cola. >> papa john's. >> well played, becky. >> thanks. thanks, wilf coke has a new mission to help create a world without waste this is a big initiative and it will appeal to a younger generation here to discuss all of that and more is james quincy, president and ceo of the coca-cola company. it's going to take a while to do, but it's an ambitious initiative that is for every beverage you sell or that's in a container you're going to recycle one. this is by the year? >> 2030. 2030 it's a big goal. if you want to dimensionalize it, that means every person in the world needs to return two bottles a month to us and that way we can collect absolutely everything we put into the marketplace and then recycle it and reuse it so it's not just about getting it back, it's about reusing it so there's no such thing as a single use container anymore very exciting. >> where would we see the big problem with single use

containers now in landfills and the like? where's the problem? and at events like -- the world would be covered, i guess. >> landfills are part of the problem. that's where most of them are. you don't see it of course, there are some getting into the oceans which are visibly the wrong place for them to be, and i think as we push forward on this initiative we can get them back as we use less, we'll put less stuff in the ground, less stuff will get to the ocean and use less virgin -- coca-cola stock for you. we're up 13% for the year. it's flat in the premarket 47.45. we're going to get you back out to davos in a few minutes. we'll ke ata quick break on "squawk box. we'll be back in a few minutes' time obvious.

sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

. welcome back to "squawk box. general electric earnings out a short time ago morgan brennan joins us with the key things to look at within the results. hey, morgan. >> hey, wilf general electric did miss on the top and bottom line for q4 when you dig down into these numbers, there are a lot to go through, it was actually much better than analysts had expected now i say that with a big asterisk next to it because i think there wasn't a lot that was expected if anything, many analysts with the flurry of downgrades we saw,

we're expecting more potential bad news, more surprises to the down side. but that wasn't necessarily the case here. so industrial cash flow for full year 2017 actually came in better than expected that's been the key metric everybody's been watching. $9.7 billion versus the $7 billion guide from the company also there was no change to the industrial 2018 earnings per share outlook or the free cash flow guidance. that was important as well because bank of america earlier this week you'll recall said that they expected to see the outlook downwardly revised so the fact that that's staying in place also considered pretty good news. orders growth for aviation and health care. still a lot of pain in the power segment, which is ge's biggest, but in general john flannery, the new chairman and ceo of the company saying in the fourth quarter eps was at the low end of the guidance excluding insurance items, tax reform and portfolio items. our visibility and execution on

cash is improving. so that is something that the street was looking to hear we're going to be getting the earnings call at 8:30 a.m. eastern. i'd expect to hear a lot more commentary on this and this turn around strategy that is underway also worth noting, we just got baker hughes results a few moments ago. we saw a beat on the top and bottom line. ge is a 62.5% stakeholder in that company majority stakeholder so as we've seen, oil prices begin to improve but we seem to be seeing those results improve as well. >> indeed, morgan. that helping the share price in the premarket up about 2% or more now. >> it was up 0.8 before the numbers hit. either way, thank you very much for that, morgan shares up 2% in the premarket. meantime, at&t is embarking on a major ad campaign to pledge support for net neutrality the company has published a letter from ceo randall stevenson in several u.s. papers including "the new york times" and the washington post. he promises at&t won't block

websites or slow speeds based on content that customers consume but the company isn't saying whether it may some day charge startups and tech giants for faster delivery of their sights and services at&t's pledge comes a month after the trump administration overturned rules requiring internet providers to treat all web traffic equally. apple is releasing patches for the meltdown security vulnerability for older versions of its mack computers. the security flaw affected several generations of intel chips. apple had already patched the latest version of its operating system as you can see, apple shares up about .2% in the premarket black rock ceo joined andrew, becky and joe. >> i think i'm actually reconfirming what milton friedman said. if you read his whole essay that everyone talks about, he talks

about that you need to be connected in your community, especially for small companies back then, in 1970 as global companies we're here in davos, we have communities everywhere we have to be connected with every community. the most important thing i said, and i repeated maybe three times, profits are paramount to everything the company does and their connectivity with their shareholders is about profit what i did say though to remain in front of change, to be a part of a growth environment, i believe the involvement in a community to have a purpose is vital for long term survivability but long-term profitability. and i think most people -- for most people it resonates that, yes, you need to be connected to your employees, you need to be connected with your clients, your communities and you

operate. that's really the essence what i'm saying, but most importantly, i believe the companies that have purpose are the best companies in the world because it unites their employees, it connects the clients but most importantly, it brings the organization on to a common plain and i think that's very vital the best companies that i know of are the ones that work towards a purpose. >> so the second part though of the critique of this -- >> yes. >> -- is that you're going to be taking more active approach and try to hold companies accountable, not just for the profits but for the purpose. and as i think you know because i think you were watching, we had sam zell on -- >> you sure i was watching >> i hope you were >> okay. >> he said, i didn't know that larry fink has been made god why should a passive fund, effectively you have $6 trillion but why should -- why should you do anything more than be

completely passive fund and let the market do what it does >> great question. as i said in my letter, an active manager, if they really dislike the company, they can sell they don't have to own it. as a passive investor, we have to own every company that's in an index, and definition nal aly that means half the companies are good and half are under performing so we have to have a voice if we are going to try to be the highest level of fiduciary on behalf of our client i will tell you, our investors are asking for this. a big component, how we win now in many of the passive management talk to us about, you know, about your corporate stewardship team so we have 35 people we have the largest team in the investment universe and our team is just inadequate right now so i've committed to raise a team to 70, 75 people.

we put in one of the founding partners to lead it, barbara novak, who has a great reputation in many circles already, and it is about for us to be engaged. so what i've said very loudly is being engaged during a proxy season is not being engaged because it's a binary outcome. yes or no, do i agree with it. we're criticized quite considerably because we vote 91% with management. now the reality is, we're engaged with so many of these clients and they are changing their input towards their proxy with our engagement. so i'm very happy that we agreed with 91% of the companies. i think that's a good testimony that we are working with more and more companies, that we're engaged, and our hope is that we are leading that effort towards having more engagement throughout the year with more companies to try to produce better long-term outcomes on behalf of our investors. >> fink earlier this morning

still to come, j.p. morgan chase and ceo jamie dimon joins us live from davos. tax reform, the global economy, interest rates and much more we'll hear from him in a few minutes. "squawk box" returns in just a few minutes' time. time now for today's aflac trivia question. how many participants attended the first world economic forum in 1971? the answer when cnbc "squawk box" continues and a gentle wave-like motion... liberate your spine... aflac! and reach, toes blossoming... not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. so he had your back? yup in just one day, we process, approve and pay. one day pay. only from aflac

♪ ♪ ♪ ♪ what we do every night is like something out of a strange dream. except that the next morning... it all makes sense. fedex powers global commerce with vast, far-reaching networks... deep knowledge of industries... and, yes... maybe a little magic. ♪

how many participants attended the first world economic forum in 1971 500 participants welcome back, everybody. the declining revenue in the fourth quarter first gain in 2018, is this an anomaly. we're here today the revenuethey've been puttin into it. >> i am very proud

this has been a number of years of repositioning ibm, of reinve-inventing the portfolio that's what you just referred to, right? so we now after this quarter actually started in the third, improved third quarter, then you saw in fourth quarter, you saw the growth i have to say given the introduction though, it has been like five years of currency in pack 2 this is in currency and actuals. now you have to focus on accelerating back to one of the topics i've seen you talk about is the stable margins. we're high value business. >> that was my next question you've been watching carefully that's one thing the analysts tell us. they like to see the revenue there. they're looking at the new business when it comes to the cloud, when it comes to a.i., when it comes to blockchain. when do you think those margins can be improved? what's your guidance that you're giving >> i had -- i'm glad you made a comment on that. first kind of i think misconception about margins because what do you think our

margins are? our gross profit margins when we ended last year the full year, they are 47.4. >> i think what they're talking new businesses versus the old. >> so let me -- and if you look over a ten-year period the line's like this, right? those businesses are actually higher margin than the core businesses. >> the new businesses are? >> yes when we look at the strategic imperatives, they offer two really straightforward reasons. >> okay. >> one is that the cloud for us, which we had great growth, you saw it, 30%, 17 billion. think of this, when you do something standard versus custom, there's more margin in it the more we shift to the cloud with us is actually a credo to our margins. the other pieces, new areas we've gone into, they're all service, they're cloud they have higher margin as they scale. >> what is missing >> so i think this is just a matter of you talked about our services business. continuing to improve there. but so this is just a matter of i think us scaling those businesses to see that

improvement. that's really my focus now we talked about high value business next steps, stable margins, we've been investing heavily now you get the benefit of that as you scale from those investments. >> one of the topics we talk about often especially when it comes to ibm, we've had your people on, blockchain. >> i love it. >> talking heavily there when is there going to be a profit piece to that though? everybody we've talked to thus far has said that's a hard business and hard to see when the payoff happens. >> i don't feel that way about it at all. you guys had on maerst earlier he was on to talk about the joint venture earlier today. if you look at all of the even maritime trade, right? in total $1.8 trillion of moving goods around the world to take the friction out of that, that's normal supply chain work this is going to be redoing that supply chain work, right so i see it -- i see it already in the projects.

400 projects underway and it's not only the software, it's all the services. >> adding to the services businesses >> and the software platform, but both sides both sides. >> repatriation or manufacturing, anything going to change after -- >> for us? >> well, you know, i've got it tell you, joe, over the years, i have made so many calls on tax reform in congress and in the senate so i'm a big fan of tax reform and repatriation. given the way that we've been set up and sort of our length of time being in business, 106 years, we've been able to move our monies around pretty freely as we've needed. we've paid the tax we've been a strong proponent while in the short run it's a bit of a headwind. in the long run it will be a good thing. >> will it change the calculus of where you build new facilities at home >> probably not right now. only for the most part it's because being global we're pretty well globally disbursed. >> what was the -- there was a huge year over year number was it main frame? >> oh, now, now, now, this is

not at all -- i have to give you a separate lesson on this. >> what was up 70 -- >> so reinvented it is the main frame. >> up 70 -- >> you have to call it by its real name, z 14. >> z 14. >> they're tiny. >> just for viewers, i wasn't using the real name. so they would understand. >> it is our oldest youngest franchise. i have to say that, oldest youngest we've shipped more than we've shipped in history for a simple reason, it's been reinvented for security. it's always had world class security, best you could get, now it encrypts everything end to end when you think of things being encrypted, only 4% of the world's data is encrypted, 4. >> that's it >> that's it, 4. this encrypts everything and the benefit is you don't have to change anything in your programs it's like -- >> plug it in. >> you just plug it in that is why that is really driving it the other reason is it really -- 60% of what runs on it is open source, it's linux people don't always think about

us in that we're the main driver of it. ibm is either the number one or two or at least top five contributor of every open source project out there. >> i just want to talk a little bit about trade because it's such a big issue here. >> yeah. >> when you start looking at nafta, about 40% of foreign direct investment in mexico comes from a handful of companies including ibm. you know, things are really heating up a bit are you worried about what happens with nafta what do you think? >> well, look, if you line up a set of priorities, one of the things i work on on a policy perspective, trade would be one of them. i've spent a lot of time on digital trade. of course, we would be a strong supporter of free and fair trade everywhere in the world given we're in 170 countries and here i think the other part is that many of these trade agreements though, they did need modernization. there really was nothing like a digital chapter in them, nothing to protect i.p., nothing to let data flow. so they absolutely need to be modernized my hope is on a nafta that these do find a common ground

and that they get modernized, which is what they need. >> what do you want to hear president trump say on friday? when it comes to the america first agenda here? >> yes, i hope it is a way to work with all the different countries in what's good for both countries. >> better for us >> well, i think -- i live in a world where it's fair for both i have to say that i believe it. >> final question, real quick if you could. they always talk about the davos man. this year is the year of the davos woman. >> there are six of us. >> seven. >> seven chairs and they're all women. what do you think of the #metoo movement which is one thing that's going on and what's happening here. >> two things, first #metoo. there's nothing to think positive of any kind of discrimination, harassment, period, point blank. i'm fortunate to be in a company that for decades has held that for me, point blank, that's it diversity though to say what do you think about here, look, i think i would really like to get across diversity is much more

than inclusion, sexual orientation, ethnicity, orientation, it doesn't matter for work this is work and life and everyone being themselves in what it is they do today for here at davos as part of this, it gives us a chance, i think, to address what is really a big issue on inclusion in its broadest sense that's what is really part of why i accepted being a co-chair here was for that and to get to drive home i think one of the biggest issues of our time is how to get the great technologies safely into the world and not divide the world >> ginni, we want to thank you for joining us today always a pleasure seeing you. >> pleasure. when we return, a very special interview with one of wall street's most powerful executives j.p. morgan chase chairman and ceo, jamie dimon is going to join us. from record markets, tax reform to global interest rates we will cover it all in the extended interview it's going to happen live in just a moment. as we head to break, take a look at u.s. equity futures at this

hour we are in the green. back in a bit. when mother nature's done her worst, the only thing that matters to us is keeping the lights on for you. the hard working men and women of the international brotherhood of electrical workers, dedicated to keeping the power on in communities across the country. because when bad weather strikes, we know what matters most. the ibew. the power professionals. they're not investing in commodities or fixed income. what people areally putting their money into is what they hope to get out of life. but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more.

i thyou never got the brakes looked at?l... oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital.

good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. let's talk about the stories front and center mortgage applications rose by 4.5% that was from the mortgage bankers association. purchase applications and refinancing rose the average 30 year mortgage rate rose by 3 basis points to 4.63%. starbucks announcing bonuses and improved pay for employees that's the latest company to do so following tax reform. employees will get stock grants of varying amounts depending on their job rank they'll get pay raises and improved parental leave. and qualcomm has a fine. that follows an investigation that began back in 2015. qualcomm is planning to appeal that fine. jpmorgan citing the new tax

reform law in its announcement this week that it plans to raise employee's wages and open new bank branches. joining us for an extended interview, jamie dimon. >> how to be here. >> great to see you, jamie >> help us understand the thinking that got you to the point of making this announcement this week >> so we went out to our folks and said we're going to have tax reform, which is good. obviously improves the position for j.f. morgpmorgjpmorgan what can we do to do more? we wanted to do it thoughtfully. we're adding salespeople, opening more branches will be 4 or 5,000 jobs. we think it's good for jpmorgan and we think it's going to be very good for the economy. >> you've got jamie here. >> yeah. >> ask him if he's doing this in a cynical way. you finally got someone you can ask. that's what you've been implying. >> what do you think has driven -- immediately within the day -- a day after the

announcement was made, including the parent company of this network, comcast, announced one-time bonuses what you're doing is not a one-time bonus. >> we already do one every year, $750 for people making $65,000 a year we reduced the medical deductibles to reduce the burden when you have large medical expenses. >> what do you make of the decision, the economic decision that companies have made over the past month >> two things. we -- our tax system 20 years ago was the same as everybody else over 20 years it's come down here we've all known that is a huge competitive disadvantage driving capital, brains, companies, headquarters over seas studies have shown 5,000 companies net are owned by foreign companies. i'm not against foreign ownership, i'm against uncompetiti uncompetitive. once you become competitive, i totally applaud what companies are doing saying we're going to help our people but the real benefit comes over time.

competitive taxes will have more capital, more jobs, more companies investing here, more foreign companies investing here that will raise jobs, it will raise wages, increase jobs and it's better than it will always be i hate this argument, we didn't need stimulus. you should have a competitive tax system in good times and bad times. i can't believe people think that having an uncompetitive tax system is a good thing for america. it shocks me that we even argue that point. >> by the way, should we look at some of these bonuses and things as a temporary stimulus? >> yeah. like i said, i think people will do certain things now to show that they're going to have more to give to help employees, but the important thing -- >> is that a tighter labor market or is that a function of we think that employees are going to see that our profits are so much higher -- >> that's what larry fink thinks he thinks people will be doing this in terms of pay raises. >> i think people will do this and then they'll be more aggressive when they invest over time they might be more aggressive when they pay people over time you'll have a more competitive job market that's a good thing. wages are going to go up

i promise you we'll be sitting here in a year and you'll all be worried about inflation and wages going up too high. >> jamie, you already said barely a democrat, that was like five years ago or so, maybe more at this point. so you saw the rhetoric from nancy pelosi, chuck schumer and acro across the board the word pathetic for this thing. it's a tax scam. huge give away for the rich. are you still a democrat >> i'm not -- i'm not getting into politics. we need a competitive tax system for the sake of america. >> when you say it was the way it was demagogued. is that productive >> it shocks me that they don't understand the importance of this for the sake of america i understand the individual side i might have done things differently. we were focusing on the corporate side there are things i might have done differently on the individual. >> what would you have done differently? >> i'm not going to go there my point is, if you want america to be competitive you need a competitive tax system. if you don't, it will hurt business in america which hurts jobs and wages what you do on the individual

side, you can have a huge moral argument about how you do it, why you go about it. >> do you think the public opinion on the tax plan is evolving and is it -- when it was only 17% for, was that misguided? i mean, what should the publ public -- should the public embrace this >> you make it sound like we're giving money to riv corporations. >> who made it sound like that >> a lot of people, mostly from the other party. the fact is, that is somewhat true, but my argument is that capital investment in america driving america drives wages remember, for every big company we're supported by 40,000 inventors. when we open those 400 branches, there could be hundreds of jobs supporting those branches. there are going to be people building those branches, people on the internet of the branches. capital investment as part of a large company usually leads to three or four times more jobs per person in the plant itself people don't understand, that's how the economy works. >> here's jampy dimon, fat cat

ceo, of course he likes it you've made the point to completely bifurcate what's good for the man and corporations completely say that they're an at the they t an antithey the particular call. >> 125 million people work in america. at the end of the day 125 million is an ecosystem like this, big and large. support large companies and small companies. they support each other. that grows, everything else can take care of itself. matter of fact, people would generally say it's part of national security. having a weak economy is bad for national security. several military people told me that >> president trump's going to be here on friday what do you want to hear him say? >> you know, i saw steve schwartzman on the show. on the policy side they're doing a lot of pro growth.

i'm not going to say retroreform. having regulations that make sense, going to create proper control on companies doing bad things but also, you know, enhance growth and stuff like that we're pro immigration. i'd like to see him describe pro immigration. he's pro daca. i've heard him speak about it many times they have to negotiate an immigration bill trade. i'm a big person in trade. i think it's a very good thing i think there are legitimate issues being raised by the administration in trade, much more in china than around mexico. >> intellectual properties >> intellectual property, tear ris, when they talk about fair they mean reciprocal that's not what the chinese mean you don't have to have a reciprocal system to be compliant on the wto there are issues that need to be resolved, done strategically, think it through, do it right. you can hear that. gary cohen was on your show or something talking about america first means -- doesn't mean america alone. >> steve mnuchin this morning talked about how a weak dollar

may be a good thing. do you agree with that and do you like that idea, the treasury secretary saying that publicly >> you know, usually treasury secretaries don't comment on that publicly. what you have today is a struggling u.s. economy. even stronger than people expected, japan, europe, china the dollar relates to the relative strength versus what people say i think it's fine it's weak in the short term doesn't matter that much. >> thinking about the stock market, we had ray dahlia on he said if you're in catsh, you're stupid. he said we could have a recession before the next election. >> i don't guess about the stock market jpmorgan, markets go up, markets go down, if you postulate we're going to have a good -- >> you're a private banker you have huge clients trying to make bets. >> they don't allow me to give advice about the market for a very good reason. >> how do you get to 4% when you've heard the rhetoric from

every person and, jamie, there are some people, god, i can't believe they would actually not want to get to 3%, but i think they've got a vested interest in it not being possible because their policies result in -- >> i've always -- >> but with immigration and productivity, those are the two things aging population, they say 3% is basically impossible long term how can you get to 4%? >> it's not true we've hampered -- i've said this for years. we've had 2% growth, which is kind of below norm -- it's long but it's half of a normal recovery we've had 16%, it should have been 32, and the reason for that is uncompetitive taxes, excess regulation, lack of infrastructure building. education doesn't work that's why it's growing slower. >> larry somers would want to go like that to you right now some -- >> larry might agree that we did all of these things right we'd be growing faster. >> not without population growth. >> immigration would be a plus, too. >> okay, how do you get

productivity that's already at high level how do you get that back >> capital all of productivity -- >> technology and -- >> all of productivity comes -- >> i think it's possible >> you're going to see it. people will say, my god, it was because of what we did, it didn't have to be that way. >> will there be egg on the face on all the economists and people who say we can't do it >> i hope there is on people who say we're structurally stuck on 2%. >> there aren't enough eggs. i'm looking at you. >> what is possible and what makes it possible? >> long term we can grow to 3? >> i think it's possible i think it's possible we'll hit 4% the people look at the past an they think somehow it has to repeat it doesn't i made a list in my chairman's letter of things holding us back, and they are extensive, and they didn't have to be that way. it was us making decisions over a long period of time. >> infrastructure is one of those things on the list >> yeah. >> we've got all of this talk around infrastructure. it sounds like the two sides are

pretty far apart yet again. >> infrastructure yet again, united states, unbelievable country, we're blessed with everything and yet it takes 12 years to build a bridge. bayonebridge it took 12 years to build shame on us. that's called bureaucracy and corruption you see it all around the nation we can't build airports, we can't build highways, tunnels. that should be fixed this administration, the prior administration tried to fix that that's doable. that costs us gdp, it costs us jobs it can be done here democrats and republicans have a common objective. both parties want that and the only question is how you do it again, i'm he not an expert politician they should figure it out. in any event, everyone has interest in reducing the time to build a bridge from 12 years to 2. germany -- i think it's germany and canada, two years to get the permits. china's probably one year. >> if that. >> you think we could aspire to something like that.

that means this whole pipeline of projects that are in the works that are taking year a after year to be approved. that's kind of that shovel ready project. beat th speed them up, you have a lot of projects out there. >> we had a lot of conversations about cryptocurrency, bitcoin. you've switched your view a little bit on this >> i think all have said enough. i'm not going to say anymore. >> you are popping this thing. you talk about it too much you should stop talking about it and go backto something relevant. >> cryptocurrency, take it off -- >> it's not my interest. i don't want to be a spokesman for or against. >> you were looking -- you didn't mean to look in my direction? >> okay. i'm clueless about a lot of things. >> okay. >> different but related, mike corbat from citi, he said credit cards are on their way to extinction, do you think that's true >> it depends what he means by that. >> he said over the long term. >> yeah, but then the long term is going to be on a chip in your finger. >> yes >> on your phone but something -- >> but the other piece is do the

banks get disintermeade eighted. do we get to some blockchain system where the third party are peerless but then there's no margin for you >> that is what he meant different version. >> that we're going to lose the business >> he meant a different version. we're working on that, too we're not stupid we're working on technologies to make it easier, seamless, painless generally margins come down. that's called capitalism so we can always prepare for that. don't complain about it, deal with it. so you'll see it you have to do things better, faster, quicker, cheaper in every business you know we have some great credit card fraud. we have some great products this year not just 400 branches in new markets. we have investing products coming this year, credit card products coming this year, more stuff that you can do on the phone, digital with mortgage, with credit card, with your basic banking account. some of those things are linked up so we're -- >> what are the other -- >> what are the other big banks that you think are doing well with fintech

we'll have lloyd blank on. they've invested in fintech. >> we've invested in -- >> probably more than anybody else. >> hundred different companies again, technology, this is not new. you use technology to do a better job for your customers. if you don't, you lose that was true 30 years ago, 20 years ago, 10 years ago. i think it's faster today. more competitive payment system is one place someone may come and disrupt something. we try to be conscious both from a consumer side and the who wholesale side we're bigging blockchain faster, quicker, big new computers that ginni was talking about. >> z 14. >> i'm going to get one. >> we have a whole bunch of z 14s. >> what color are they do they come in blue >> just in black >> i want a blue one so dahlia was on he said just to paraphrase, he said that 4% is the new 8% in terms of where we need to worry about dislocation and actually -- >> interest rates. >> not being able to service the

debt that we've built up i guess my question is we kind of think that it's clear sailing for the fed. they orchestrated, you know, the recovery from the financial crisis they blew out the balance sheet. we're going to be fine in sort of reversing it. is everything going to be okay >> i think it's hard to say the fed made it fine, benign, easy for the fed to deal with so, you know, the next chairman may not have a benign environment to deal with the most important is growth it's not just whether the rates are going up, you have growth. if you have healthy growth the rates are going up. >> wouldn't scare you in terms of -- >> no. >> what about five >> the world should expect 4%, 5% if you were a borrower, you should be very careful you have too much interest rate exposure, interest rate mismatch or currency mismatch or too much leverage which i think there's less than people think in the system relative to years ago you compare everything other than governments by the way. governments can keel with deal t

easier than governments. >> that doesn't sound nearly as -- i think dahlia was -- >> dahlia was very concerned. >> kind of a warning. >> because if interest rates go up 25, 50, 75% he thinks that's a bit jolting. >> it is but, again, consumers are in very good shape credit card balances are still not unbelievably high. all credit extended in the united states has been almost super prime, mortgages, credit card, subprime component is much less middle market companies are in good shape small business companies in good shape. large corporations generally if you look at their balance sheets are pretty good. most of them hedge their interest rate exposures. they're betting on interest rates. but if you have -- eventually you might have growth slowing down, inflation going up, yeah, someone is going to get hurt that happens in life again, my job at jpmorgan, build a company, serve the clients i completely understand the weather may change

i don't spend a lot of time guessing what's going to happen to the weather i don't know >> we're sitting here and just about everybody you talk to, everything is going gangbusters. things look great on just about every level on every country around the world that's where surprises can sneak up if there's something you have to worry about, what would it be? >> first of all, we can't believe we've been doing well. >> it's been a long ten years. >> this is going to help citizens around the world and remind people we could have good growth remind people good policy will lead to good growth. there will be things to disrupt it. >> nothing around the corner >> i don't see any pothole i acknowledge that i may not be able to see the pothole. i can't see any pothole that you had in 2016. huge leverage in funds, cdos, mortgages, subprime, in -- nothing like that is taking place. you don't have that kind of leverage or exposure in the system, but it doesn't mean that rates can't go up, that reception can't go up, inflation can't go up, surprise people

am i going to be surprised not really i'm telling you it can happen. it might happen. >> here's the smart guy. it's made a lot of money, one of the best investors around. he says you, only democrat not gritting its teeth if you run in 2020 he'll vote for you. >> i don't plan to. >> what do you mean, you don't plan to -- >> absolutely not? >> huh >> i don't plan to >> you know you're going to get this question for the next 18 months. >> that's fine i don't make promises to anyone. i don't think i'm a political type. >> i would say over the last six months many of your friends off the record and whatnot have been whispering much more than ever before that they say what's going on with jamie? is he planning on running? >> jamie's doing quite fine, thank you. i appreciate your concern. >> and also before i let you go, we wanted to get a little inside take on what's now being called this pre-davos party that took place on monday in paris >> yeah. >> versailleversailles.

>> versailles. >> paris and versailles. >> what happened >> before davos. >> right >> well, you know, president macron, he knows people are coming to davos so he had a function which he said he's going to do every year, stuff like that. and he spoke for two hours, 2 1/2 hours mostly about policy. you know, pro business, pro capital, labor reform. knowing that all these things will help the average french citizen. he talked about trade. he talked about china. he's -- he's done a lot of things in eight months and so, you know, after brexit we were all afraid about what might happen to europe after brexit instead of halad you get macron. >> that was the first state dinner. >> yeah. >> interesting comments about it, if he pulled a cameron, he thinks that france might say, brexit >> i don't think there's any chance. >> there won't be a -- >> he is very, very pro europe. >> yeah. >> but he acknowledges that some of the flaws that created some

of the concerns in brexit need to be fixed, which is exactly the right thing to do. pull it together, fix the flaws, make the common market stronger, make the regulations better. they do need some european entity to manage the banks and stuff like that. he's doing all the right stuff. >> so you won't run -- you're not running in france either >> i'm not running in france, but they have made france -- you talk about a bank -- their tax rates are going to 25% they're not going to have a wealth tax on people they want you to move there. >> unbelievable. better than us. >> it is unbelievable. they're going to make it a very attractive place paris is attractive to start with, including education. and the infrastructure, universities all of these great things. >> jamie dimon, thank you. >> great time. >> we could go until 9:00. >> yes. >> see ya. coming up, stocks you need to watch ahead of the opening bell and more on bitcoin for jamie. still to come from the world economic forum in davos, goldman sachs chairman and ceo lloyd

blankfein and wilbur ross. it's another big hour of "squawk x" fm borodavos when "squawk box" returns i think we should do that meeting tomorrow. well wait. what did you think about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital.

wow! record time.s. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice

for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital. yes or no?gin. do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. it's abor it isn't. ence in 30,000 precision parts. it's inspected by mercedes-benz factory-trained technicians. or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle,

it's either mercedes-benz certified pre-owned, or it isn't. the mercedes-benz certified pre-owned sales event. now through february 28th. only at your authorized mercedes-benz dealer. nothey're not investing iney commoditiesies. or fixed income. what people are really putting their money into is what they hope to get out of life. but helping them get there requires a real refusal to settle for average. because when you approach investing

with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more. good morning, everybody. welcome back to "squawk box" on cnbc we are live from the world economic forum in davos. i'm becky quick here with joe kernen and andrew ross sorkin. take a look right now, that is the still the case for the dow which is up 80 points. s&p futures up by over 4

the nasdaq turning slightly negative this comes on a day that both the nasdaq and s&p 500 finished at record highs yesterday. dow down only by 3 points. treasury yields, ten year yielding 2.654%. the dollar, which we've been talking about an awful lot today after treasury secretary steven mnuchin said if a weaker dollar comes along, that's okay you can see the dollar is down against the euro at 1.2338 another newsmaker joining us on the set goldman sachs chairman and ceo lloyd blankfein. >> good morning, good afternoon. >> a lot of stuff has happened in the past year 40% in the stock market, 3% for two quarters, maybe three. but the volatility is so low that goldman's trading actually is affected by it to some extent because there's so little volatility is it worth it for all the good things that are happening that you can't make as much money

trading? you'd probably trade it for that, wouldn't you >> we just go with it. i take peace and happiness at least for a while. >> so even though the debt trading is so quiet right now. >> it is quiet think about it risk levels are low. risk premium is low. if you think the markets are never going to move, you're not going to hedge anything because why spend that money and the irony always is that when things haven't moved for a while, the risk premium gets low. the cost of hedging gets low which sets you up for the next big move and then everybody wishes they had bought insurance. the funny thing is -- it's like having a bunch of hurricanes on the east coast of the united states the risk of a hurricane is the same the summer before and the summer after the string of hurricanes when do people pay the bigger risk premium. >> what does that say about where the market is? >> the canary is in the coal mine once tax reform passed, he said

you revalue what valuations are based on the e in p to e. >> we are in a sweet spot. i like it this way let me tell you, trading is soft all our other businesses which correlate to global growth are kind of doing very, very well. finance -- you know, doing m&a, managing assets for people, that's going very well trading is a little soft, no big surprise in the market that's not that volatile, but they tend not to stay this way. >> trading was a little softer than a lot of your peers >> we're indexed -- we're indexed to a certain kind of market and we're moving -- you know, we're moving ourselves around you know, look, two things two things, one is the strategic question of whether commodity over the long term is a good business to be in. fixed income is a good business to be in the answer is, yes there's another question which is execute sometimes you zig, the market zags that goes with the territory over the cycle we have tended to out perform in trading but we

don't do that. but that's tactical. >> as a great risk guy, anything that you see in the equities market globally that rises to the level of irrational in terms of the economy >> i won't say things have been going well for a long time, but i'd feel better about where asset prices are including equities if interest rates were normalized how much -- you know, basically you discount earnings by an interest rate. interest rates are very, very low. if global growth is over 4% and interest rates around the world are close to zero or very low, can't be surprised that there's a lot of investment and a lot of froth in the market. maybe there should even be more. what's going to happen when interest rates normalize and get closer to where the growth rate is and catch up? >> what is normalized? is that 5 or 6% >> is that dahlia -- >> you have to time it right that's the problem that's not the problem, the challenge. >> i've been doing it for 35 years, goldman sachs has been

doing it for 149 years over the cycle you have to see things they don't call you up the day before i'll give you food for thought i think we're in a sweet spot. i think there's a good runway. i don't see where the problem immediately is going to come from, but just think as a thought, how much of asset prices, how many businesses -- interest rates have been low for a long time. how much of commerce and trade and business and investment is premised on very, very low interest rates if you think back ten years, weren't we shocked to find out how much assets around the world were hinged on u.s. real estate prices well, if that could be the way of real estate pricing, people could get low by low -- people were investing in real estate, they were using real estate as collateral to borrow money to invest in other things and but basically there was a big -- the crisis was real estate. >> where do you see that happening? do you see that happening now? >> i think we have to chew our way through, and i'll use this term, a normalization.

people say,what's the new norm maybe interest i don't think it's normal to allocate one of the most important commodities in the world, namely money, and have it be allocated in a sense of a way if it's priced very, very low. in some cases zero and so i don't think of that as normal i don't think it stays there in the long run and i think we have to go through a period of that normalization before we get really confident that, gee, this is the way life's going to be forever, but i don't necessarily see, you know, any shock -- i think we can absorb the kind of interest rate rises we have in the united states that are forecast over the next year, but if you ask me what i would be nervous about, i'd say, listen, we have to get through a period of interest rate normalization before you could say that this is where asset prices belong. >> how do you assess the trump administration he's going to be here on friday, but you've trolled him a little bit occasionally on twitter, but we've also had this tax reform plan >> look, there's a lot of stuff that i like and probably if i

just added, you know looked at it and say like a lot more stuff than i don't like and some of the stuff i don't like i really don't like ironically, the stuff i tend not to like is not as substantive. it goes to -- some of it is and some of it is social aspects of it i've said this, but i don't want to be, you know, hypocrite call either i've really liked what he's done for the economy and i think he's gone out of his way to be very, very supportive of the system and i don't want to be antagonistic to that. >> i love it. >> frankly, i want to honor that. >> i thought about how i'd ask you that question in that you basically just did a ben franklin close, you put the positives on one side, the negatives on the other the positives out weigh. are you now happy about the outcome of the election or do you still wish the other candidate had won? >> well, that's a compound question. >> just a yes or no. >> you know, i don't have to -- you know, it is what it is i'm very good at, you know,

being a risk kind of guy, i kind of adapt to the way the world is. >> tax reform would not have happened. >> true. i think the market would be lower. i'd be dealing with more regulation compounding. >> right >> too much regulation in some respects. >> yes >> you're happy with the outcome? >> i'd say the animal spirits are out there in a little bit more vital than they would have been otherwise i'd say the country might be a bit less polarized but i'm not even sure about that particular point because there's a lot of -- you know, not one party is responsible for the polarization by the way, it's the extreme wing of both parties responsible for it i'd love to find the moderates stepping up and compromising again, i want to be, you know, true, it's not just policies themselves in a gross kind of macro way, tax reform. i think we're going to go up on to a period where there's been a push for infrastructure spending, et cetera. >> you think 3% is doable? if you and dimon both say 3% is doable, i'm ready to call it doable. >> i think so.

>> you do? >> i do think it's durable doable and durable. >> get to 4%. >> we have to get to 3% on the way to 4%. >> supposedly there's not an economist in the world that believes it. that's what i'm told. >> there's a lot of things -- okay >> i know. >> another thing, you know, i want to -- i went as part of the trade mission to china and, again, aside from the big mac crow in policy issues, you know, there was the president bringing companies from the united states and very aggressively with will who is coming on next, aggressively promoting u.s. business dealings with china, and i know specifically there were things that got done that otherwise wouldn't have gotten done so i don't want to not mark that. >> there are issues on trade though and, you know, last year at this time i remember we were all sitting around the desk and every person said there could be a potential trade war based on the commentary it didn't happen. >> it didn't happen. you have to put the word yet at

the end of all of this. >> yeah. >> i have anxiety about that but, look, like everything else, there's a core of -- at least a core of validity to these points the trade. we all went to -- we all took eq one. everyone knows the theory of relative advantage everybody should do what they're best at and then we should all trade with each other. that's how you create wealth in the world. maximize wealth in the world also there's a distribution element. where does the wealth go, both among nations and within a nation and the fact of the matter is it may well have been that the u.s. didn't do as well even though the wealth of the world was maximized, not necessarily for the u.s. now, you know, you don't stop there because you say, well, gee, if you're going to have that situation, certain industries are going to get hollowed out in the u.s. and you have political unrest, which is kind of what we have a bit of, unrest because of this whole inequality issue which may have

been caused by certain kinds of jobs disappearing and not being replaced you say, well, gee, political instability is not very good for commerce either. >> right. >> you have to go together and so my eyes have been -- i haven't thrown in -- i haven't changed radically my thoughts about a lot of stuff like everything else, i have an open mind. i listen to this stuff and i see the other side. >> are you surprised after this tax reform package that we've seen so many companies, starbucks this morning announcing that they're going to be giving raises to their people obviously we had jamie dimon, he's doing the same. did that surprise you that it happened as quickly as it did? >> you know, i don't -- yes, it surprised me i didn't think that it would so far the only accounting effect that we've had from the change in the tax law is we had a $4.4 billion writedown, accounting writedown if anybody wants to share that with us, please give me a call. >> soundslike a non-cash thing >> no, it's a non-cash thing. >> still beat expectations from last year, right >> tangible equity.

>> yeah, we had a very high return on equity. >> with the trading where it is? >> yeah. no no, all the other businesses we had are doing very well and well enough to compensate for the falloff. you know, look, the bottom line is where i don't want to be known for a good trading firm, we go with that, it's not a great trade. even an environment that's very unsupportive of trading where trading against our revenue base is well under 20%, our other businesses are performing so well that we outperformed and did better on a whole and so it is what it is. and you're right, i have a mixed mind do i really want the kind of market that would generate a lot of -- >> exactly. >> -- a lot of trading but guess what, whether i want it or not, it's going to happen eventually. >> you're opening a bitcoin trading desk. >> we are? >> that's what i read. is that true >> yes, it's not true and i read it also.

>> what we said was we were opening -- we were clearing futures in bitcoins for some of our futures clients. we'd clear them. we're a prime broker and so if our clients are going to do it, we're going to go do it. a principle bitcoin business where we're going long and short bitcoin, market making, so far we're not -- >> my family is not involved. >> i can't speak for all of my -- you know, for all of my millennial children -- >> your children. >> but the grownups aren't >> god, i just had a flashback when you were trying to explain to levin what it meant to be a market maker, a principle and trade. you're going to have to do that again. >> don't rekindle my ptsb. >> ju-- ptsd. >> yeah, had a horrible flashback. china is adults. do you think we could get them so angry something happens or do you think they understand the way things work. >> on trade? >> yeah, on trade. do you think we could actually screw this up?

they're adults. >> of course we can, of course again, i look at this, what's going on and, again, you know, we're at the point now where we kind of know what's going on in the world and i'd say, you know, it's not so -- you know, it' not so clear what the right strategy in the negotiation has to be. >> right >> if you're going to negotiate and get some benefits, you have to lay it down and say, you know, this is the way it's going to be. what do you want to do >> right >> i think the chinese have been an emerging market but a lot of parts of the chinese market have emerged. >> yeah. >> and now we have to compete on more of a level playing field, and i think they recognize it. in some cases they request a subsidy. not a real subsidy but a benefit and in some cases i think they dominate certain aspects of the market, especially in some aspects of the industrial market so, you know, we'll see where it goes, but, you know, it's easy to second guess where it goes,

but if we -- you know, if we had the -- if we had that brief and we had to engage and we had to improve, make things come out better than they're coming out, you know, we might adapt some of the strategy as well >> right great to have you here. >> great to be had thank you. >> thanks for coming in. >> extended time >> thank you. >> thank you >> good. thanks when we come back, we're going to be talking health care withbernard tyson, then in the next half hour of "squawk box", commerce secretary wilbur ross will come here we'll talk trade, the dollar and much more. stay tuned, you are watching "squawk box" right here on cnbc. oh good, you're awake! finally. you're still here? come on, denise. we're voya! we stay with you to and through retirement... ...with solutions to help provide income throughout.

i get that voya is with me through retirement, i'm just surprised it means in my kitchen. oh. [whispering] so that means no breakfast? i said there might be breakfast. i was really looking forward to breakfast... i know. voya. helping you to and through retirement.

welcome back to "squawk box. our next guest is a leader in the health care industry bernard tyson, kaz ser personal ma then tai. >> good afternoon. >> we want to talk about health care in america, but i'm curious given that president trump is here or will be here later in the week, we have wilbur ross coming p, how you think of thi

administration relative to your own goals these days >> like we do any administration figuring out how to work with the administration for the good of the american people and we're still on that journey and still figuring out how we can contribute and help with the ongoing problem in our country that health care is still unaffordable to millions of americans and we still have millions of americans who do not have entry to the front door of the american health care system. >> and when you look -- for example, we talked to a lot of institutions about the tax reform plan. how do you think about the tax reform plan, both in the context of your own business and also in the context of health care that also became sort of part of the debate >> yeah. i mean, from the business standpoint in terms of we're not for profit organization so it was a different effect on us obviously. >> right. >> as it pertains to the intersection to health care, especially with what was added that affects health care,

obviously the concern is will individuals who are already trying to figure out how to afford health care be locked out of the health care system, and those are the ones who fall in that gap of making too much money for the subsidy but quite frankly not enough money to really afford health care. their premiums ultimately probably will go up as the risk continues to rise. for the ones in the subsidy it means the government will pick up more of the tab. >> talk to us also about drug prices because that's a huge issue. hospitals now creating generic drugs. what do you think of that? >> well, i mean, i think everyone is trying to solve to what we consider to be some unacceptable problems with drug prices and so there are many people in the industry who's trying to figure out how do we get to solutions and this is another example of trying to do that >> is that a business you ever thought the hospital business should be in though? >> it probably is not a business

proposition that i would entertain inside of kaiser-permanente. i think hospitals as an industry is rethinking their purpose because, quite frankly, with technology, with procedures that we're able to do in the setting, it's not the central location for all things health care now kaiser-permanente, we now perform unbelievable types of surgeries in the out-patient setting. we get our members in and out of the hospital quicker and they go into the out-patient -- >> what did you make of the merger between cvs and -- >> viacom? >> cvs. >> cvs. >> aetna i was thinking cvs/aetna does that seem to be the future to you do you think that's where all of this is headed >> we have four of those centers now and we have an agreement to build 38, 39 more of those we have the partnership where target is also linked with cvs

so it is all about looking at a different way of accessing care and so if you believe that there is a large segment of society and/or consumers will be willing to entertain another entry point into health care, then it's a valuable -- >> what about amazon what role amazon is going to play in the future, whether it be in drugs or other parts of the business >> well -- >> is that a conversation in your board room? >> yeah. i mean, from my view, it would be wonderful, quite frankly, because organizations like amazon are thinking very differently from the traditional health care industry i am not here to defend the current state of the industry. >> kaiser-permanente is not -- cannot be replicated can what you do be replicated? >> well, part of our growth strategy and growing in new markets now in the united states, particularly that's our focus area, is to demonstrate how to make our model work in those models

so the answer is, yes, but as long as the industry is still siloed and it's on a fee for service chassis, the incentives will still be around get as much of the dollar in your segment of the health care chain and what you end up with is a fragmented set of solutions. >> mr. tyson, thank you. >> thank you. >> great to see you. >> great to be here. >> it's so warm, he doesn't even need a coat. making us all look like we're -- >> silly. >> it is a beautiful day. >> thanks, bernard. >> this is for looks >> davos. >> thank you >> all right. when we come back this morning, we will have more of today's stocks to watch. then coming up at 8:30 eastern time, commerce secretary wilbur ross will join us on set the first member of the administration we're talking to ay davos st tuned you are watching "squawk box" live from the world economic forum in switzerland

we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom. with the right financial advisor, life can be brilliant.

o also below cash flow is improving and it gave a 2018 outlook in stocks just under 2%. united technologies felt with

results out this morning, it beat the street. company says it's organic sales growth in 2017 it was its fastest in three years. and the preeminent u.s. media company, comcast, earnings and revenue topping forecasts. nothing in the teleprompter. >> you want credit for that. >> go ahead. >> the parent company of cnbc also announced a 21% dividend increase said it's going to repurchase at least $5 billion worth of stock in the current year. coming up when we return live from davos, commerce secretary wilbur ross is going to join us he's going to talk trade, dollar, much, much more. first as we head to break, take a look at u.s. equity futures this morning we are in the green with the dow, looks like it might on peup 100 points back in a moment

each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

welcome back to davos, switzerland. the helicopters are out in force and they are overhead. this is all happening as we are

awaiting the arrival of president trump. he's coming here later today in fact, president trump says the tariffs on washing machines and solar panels are not a declaration of a trade war the tariffs are coming as the sixth round of nafta talks are coming joining us right now to talk about all of those things, trade policy deals, much more, commerce secretary wilbur ross thank you for being here. >> thank you for having me on. >> you are the first member of the administration that we are talking to here at davos. >> oh, my goodness. >> welcome we love having you here. trade is a huge issue, and we saw the tariffs that came down on solar panels and washing machines earlier this week and it has all of us wondering, is this a precursor of things to come are there additional tariffs to come on steel, aluminum and more >> i don't think it symbolizes anything those cases have been ongoing for quite a while, and i don't think it should come as a shock to anybody, least of all the south koreans or the chinese.

>> may not come as a shock, but we know that there have been a lot of other actions, including those on steel and aluminum. i know that the commerce department has given their recommendations to the white house earlier this month on both of those issues. >> right. >> what do you expect to happen? the president has 90 days to decide >> well, the president has 90 days from when those reports were submitted one was just last week and one was a little bit before. there's a time period by statute. whether he'll take that long is really a question of what else he is working on at the time. >> you are somebody who has had a tougher stance on trade than what we've seen in previous administrations and certainly from another faction in the white house that seems to be more about open borders. you're somebody that comes at it from experience in steel and other areas. what would you say the official administration approach is right now? >> well, i think we're all in favor of open borders, but it has to be a two-way street it can't be just a one-way street and whoever goes on the

two-way street has to go by the laws, the rules of the road. those are the things we're objecting to, and that's why we brought 86 -- 84 trade cases last year up from 52 the year -- last year of obama we didn't invent new trade infractions, they were there just we're now trying to deal with them. >> one of the huge issues though is nafta, the renegotiations where do things stand right now? if you had to bet on it, would you guess we do see nafta renegotiated >> i think there's a good chance be of it i think everybody would prefer to have it be a satisfactory deal for all three parties, but the president has made it clear that if it's not a deal that he likes, he won't do it. >> there's been a lot of speculation about what the president is going to say when he comes here and speaks on friday is he going to have an america first kind of speech is it going to be about bringing people together?

is he going to be humiliating the crowd and saying, look, what we did here, all of you globalists got it wrong? what do you know about what he's planning to say? >> well, i think it will be largely consistent with positions that he's already taken, as it should be, but i think the main purpose of the visit is more to communicate with a broader con ststituency r here there's a lot of people there that don't have very much direct access to washington, but, second, there will be undoubtedly some bilaterals at the outskirts of the session so that's always a useful thing. >> who's he going to be seeing >> oh, come now. you have to ask his people. >> let's ask you what's your agenda while you're here what are your plans? >> well, been involved with quite a few panels already and some of the smaller meetings as well because this is both a very formal event and a very informal event.

so it's a very interesting combination. >> wilbur, let's go back to nafta for a minute because we've been debating whether it's a good deal for america, whether it's not we can certainly run through the numbers. we've talked about it in the past about where maybe it's a little out of line for americans. you've complained about other countries that are using it as a way to get business into the united states, china in particular >> well, exactly china and other southeast asian nations. think about it, the concept of the trade agreement is to protect those inside somewhat from the people outside and facilitate transfers among the three parties. something that instead is very porous and lets a lot of material in from outside nafta, it goes against the very concept of an agreement. >> but when you talk to the auto manufacturers, they will complain about some of the new things that the u.s. is insisting on right now i think it's 62.5% of materials for cars and light trucks have to be produced within nafta

the new request from the united states is 85% from nafta and 50% of that, half of it, coming from the united states itself they say that that's something that basically no car on the market would be able to meet >> well, there are two different issues one is what is the arithmetic, the other is what's the definition of something that's made within nafta? the old nafta went part by part. a lot of the parts to which the percentage applied aren't even used in cars anymore because automotive technology has moved on >> so maybe there's a way to rewrite it that doesn't actually -- >> the electronic parts weren't even invented back when nafta was done so those rules are, at best, archaic, but at worse we don't feel they accomplish the purpose they were intended to, which was to facilitate production within that. >> we had sam zell on our set last week and we asked him about nafta. he is somebody who has agreed with the administration on a lot of areas but when it comes to

nafta he says potentially the administration is not thinking about the security implications, why nafta was first put in place. it made the south of our border a safer place to be. how would you respond to that? >> well, i don't know what was in their head on security originally, but i think it didn't become very secure until this administration. >> wilbur, got to ask you about this report in axios earlier this week that suggested you had been side lined. i would imagine actually by being here it's hard to say that the president has side lined you, yet he also had quotes, the writer of the piece, jonathan swan we've had on the show before, where it appeared that the president was dressing you down effectively about some of the negotiations and trade deals that were made, i think particularly with china. >> definitely. first of all, the president responded very explicitly that was 100% in support so i'd like you to compare what he says to anonymous sources, former administration people.

those to me are not very much the same quality source. >> let's talk about trade with china because that's been another huge issue people who are worried about a potential trade were breaking out and look at china and say that's probably where we need the most work to be done, that we have the most unfair balance there but it's also a pretty delicate situation what happens what are the priorities in terms of how we deal with the chinese? >> our trade deficit basically has two sources. one is geographic and the most important one there is china and the other is product and the most important one there is automotive so those are the two things that you really need to deal with if you're going to have meaningful reduction in the trade deficit so it's only logical that should be in focus. >> although intellectual property is the one issue that so many business leaders talk about, too. >> as you know, there's a movement afoot there in investigation going on right now that will undoubtedly come out

with some recommendations. >> wilbur, can i ask you a little bit about what we've heard from treasury secretary mnuchin today. he was talking in some of the meetings where you were and spoke about how if a weak dollar comes along, that's it not only commerce secretary, business leader and somebody who has had to deal with currency prices i was there when he said what he said i don'tthink that's exactly what he said i think what he exactly said is the dollar just like the treasury bond market is a huge market, very liquid market it's not something we worry a lot about day by day i think that's really the intention that he wanted to -- >> so he was not advocating a weaker dollar in any way, shape or form? >> no. he wasn't advocating anything.

>> in talking about the weaker dollar, the rates starting to rise, the yield starting to rise a little bit on that, too. when you add those two things together, what does that mean for the united states and for our markets? >> well, as steve pointed out, the treasury market, which he was asked about specifically in the context of suppose we did get into some sort of trade fight with china and they started selling the treasury securities, he pointed out that's a very, very huge, very, very liquid market so, again, he was simply saying that's not something that he stays up nights over. >> secretary ross, want to thank you very much for your time today. we really appreciate you being here. >> good to see you. >> that was not your chopper that we heard. >> no. >> it was security. >> security detail. >> mine. >> you know who's got a chopper. >> that's what i was going to say. you got to be somewhere after? >> no. >> davos man. >> security situation. keeping an eye out. >> it did say ars. >> exactly

exactly. >> good to see you. >> thanks, wilbur. v.c. perspective jim breyer that will be live like everything is today. you're watching "squawk box" from the world economic forum in davos. get some ice cream we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer,

ask again at schwab. directv has been rated number one in customer satisfaction over cable for 17 years running. but some people still like cable. just like some people like pre-shaken sodas. having their seat kicked on an airplane. being rammed by a shopping cart. sitting in gum. and walking into a glass door. but for everyone else, there's directv. for #1 rated customer satisfaction over cable, switch to directv and get a $200 reward card. call 1.800.directv where can investors seek pin an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential.

welcome back to "squawk box"

live in davos, switzerland this morning. our next guest has been a huge investor in artificial intelligence he believes the space is going to grow exponentially. joining us is jim breyer who's the founder of breyer capital. >> always a pleasure. >> i remember, i can't remember exactly when, a couple of years ago you said i'm going all in on a.i. i'm going to spend the next year or two or three enmeshing myself into this world. >> it was exactly two years ago at davos, and since that time i've met with i would say over 1,000 phenomenal doctors, hospital systems, medical school deans, university leaders with a particular focus around using a.i. very specifically around computational pathology, cancer, trying to integrate data and then running machine learning algorithms against that data to

help patients and help doctors and nurses. >> give us some hope what's the coolest thing going right now that you think is the closest to reality >> the one i'm working on right now to be announced over the next week or two, i hope, is in the area of using medical images, digitizing them, something the chinese, by the way, are far behind us on, and running machine learning capability against that to help doctors do a much better prognosis, whether it's radiology, breast cancer, anything where there is imaging that is analyzable that can help doctors provide better care. >> you just mentioned the chinese. there is a race going on right now between the u.s. and china over a.i. with some speculating that china may be actually moving ahead of us is that right? >> it's neck and neck, and i just came from a meeting with some very senior chinese a.i. researchers last night several meetings with some of the best of the best from the u.s.,

google, facebook, amazon it's neck and neck simple as that. >> people talk about a.i. and they sort of use this as a very general term and then they say google is doing it, facebook is doing it, amazon's doing it, microsoft is doing it. sometimes apple's in that conversation, sometimes not. how -- what's the distinction between the approach that they're all taking and of course when you talk about china, alley baba, tencent, everybody else. >> a.i. is narrow based, very specific, might be around voice input, echo, et cetera, that's less interesting as a venture investor at this point but what's really interesting is when not only is it a simple voice recognition capability but it's image analysis and we can affect industries, vertical industries like health care. for sure the faang stocks and the bat stocks are not yet being appreciated enough for their core artificial intelligence. >> wait a second the faang stocks have been on

fire they've been on fire they've continued to soar this year you're saying it's not enough no matter what. >> i invented in facebook at 5 cents a share in 2005. what's happening is they are under valued only when one looks at their capability and talent in the worlds of artificial intelligence one analogy i would make, tom brady, i'll pass this along to jim cramer, i know he's an eagles fan, was drafted 199th. i know the faang companies know and the bat companies know, who are the top 200 a.i. technologists in the world and my job as a venture capitalist is to help recruit that top 10 or 20 to the best private companies that i'm involved with, and it's a lot easier to figure out the top 200 than a tom brady who went 199th. >> final question before we leave you. i interviewed mark fenioff both on a panel and later on cnbc

he talked about regulations coming to silicon valley, specifically he equated facebook with cigarettes and nicotine, meaning that it's an addictive business and also that there are other addictive businesses in the valley that need to be fixed, changed by washington what do you make of that >> he's just flat out wrong and mark's a great friend and we've invested together. regulation should be appropriately applied, but the comparison i don't believe holds any weight >> but in the responsibility when it comes to -- and we talked about apple recently, is it parents or us that need to be responsible or does the -- do the technology companies themselves have to have a different level of responsibility than they've taken thus far, whether it be the addiction to the devices or the software or the social networks themselves or other parts of the business? >> andrew, we can all get much better the technology leaders, venture capitalists, board members, we

should be taking a much more significant leadership role. >> totally unfair to the tobacco companies to compare facebook. totally. >> jim breyer, thank you. >> when we come back, senator bob corker will be joining us right here on set. stick around

i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital.

jim cramer is joining us now. gosh, it is kind of our history, jim. comcast is our parent now, remember ge used to be our parent i don't think they report on the same day either comments on either reports? >> comcast is terrific when you have comcast flow in this regime, court, cut all you want this is a wi-fi world, 20 million viewers, yes, i work for it what are you going to do it? buy back stock at $1.35 cents? good luck, that's good trade

>> because we are in business, do normal people love wine fine and diamonds did you get to watch any of that. >> i loved it. lloyd is like a butterfly. these guys are fabulous at boxing i thought breyer's interview is totally on point i think they're survivors and people are warming up to them because they are putting people to work. i hope lloyd files a lawsuit with jaime of the number of people you can hire. >> all right, jim. >> all right, craig, we got to go >> thanks jim. coming up, bob corker.

a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley you or joints. something for your heart... but do you take something for your brain. with an ingredient originally found in jellyfish, prevagen is the number one selling brain-health supplement in drug stores nationwide. prevagen. the name to remember. like you do sometimes, grandpa? and puffed...

well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. if you can't afford your medication, astrazeneca may be able to help. flexshares etfs are built around the way investors think.

with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. president trump heading to davos to emphasize his agenda including trade policies joining us now senator bob corker from tennessee. senator, what do you expect the president to say and what would

you like him to say? what would bob corker say? >> i have no idea what he's going to say i think it is great that he's coming sort of out of character if you will. hopefully, it is an embracing discussion and obviously, imf is just raising raise growth of what we did in the country, you ought to be proud of that. hopefully it is going to be embracing. >> i remember back when i was younger, it was america love it or leave it, could he come here with, he did not have to be davos love it or leave it, he does not have to come here and embrace everything >> my guess is he will be talking -- >> you have been here before, right? >> not everybody ththing that gn here is great. >> i iunderstand that. i think obviously the world, our

economy is doing well. >> yep >> ours is well. >> led by america. >> that's right, i would focus on that. lets face it, we got a lot to be proud of during the first year as far as what happens and we have a lot of challenges, economically in spite of other things that people continue to talk about economically. >> the 1.5 trillion, if you change your mind whether it is worth it or not? >> i voted for him >> it was never 1.5 trillion, okay that's getting into senate the number was really 500 billion because it is the difference -- we had 500 billion of it was the baseline using current policy instead of law which is what we should do we have the 500 billion and growth, it was estimated by joint tax. so you ended up having a

$500 billion gap until a question was on a $43 trillion base is it worth it i hope it is going to be >> it was worth it to me to get the corporate rate >> is it going better than you thought or is it about as expected in terms of the response that you see? >> the initial kickoff has been good and it is going well. i love seeing what companies are doing. >> were you surprise >> the first time or two then i realize it is probably a little coordinated effort >> well, probably a little coordinated effort taken place by some. >> to do what? >> to emphasize and promote what it is going to do for our economy. i think it is great. i am glad employees are getting bonuses, importantly investments that are taken place and cap x that's going to be occurring and apple bring back and the huge

tax consequence with that. >> what's going to happen in 16 or 15 days of whatever it is is there any way that mcconnell will go for a simple majority in i think schumer feels like he would burn and he may take a tougher stance >> the bill that was discussed on daca that was more last landing in the case of the house. you have a group of republican senators who are working with the bill with some democrats that'll get more republican votes than democrats that's going to be a challenge we got to write an entire bill over the next very short -- it is tough >> i think infrastructure is tough because of the pay for, how do you pay for it? he's floated things like the gas

tax and i don't want to mention some of the other things he's thrown out and have the wall street journal wears him out i know he's looking for a way to pay for it so that's the tough part >> senator bob corker, thank you very much for joining us today it is great to see you >> folks, that does it for us today, make sure you join us tomorrow, right now it is "squawk on the street. ♪ >> good wednesday morning, welcome to "squawk on the street," i am carl quintanilla and david faber and jim cramer we watch earnings from industrial bell weather like ge, busy morning in davos with dimon. solid flash in the pmi back to 265. we begin with earnings central ge up in the