intel and dow inc. are out. dow out of the dow. it's friday, november 8th, 2024. "squawk box" begins right now. ♪ good morning. welcome to "squawk box" here on cnbc on this friday morning. we are live at the nasdaq site in times square. i'm andrew ross sorkin along with joe kernen and becky quick is off today. i'm so used to saying that. she is off today. >> you feel her presence. she's not here physically. we might be able to get her called in. i'm not sure what she had planned. she may not do that. >> let's show you futures at 6:00 on this friday morning. show you where things stand.

right now, you are looking at red on the screen after a lot of green. dow off about 17 points. nasdaq off 79 points. s&p 500 off 10 points. that comes after stocks mostly rose yesterday following the fed rate cut. we'll talk about that and what jay powell said in a moment. the dow falling by less than 1%. the s&p gained .75%. nasdaq up 1.5%. that brings s nasdaq's gains fo the week up 1.4%. if you are not in the market, it's those days -- you remove the biggest loser days and biggest gainer days and you are nowhere. joe said the top of the show, the dow jones industrial average is different today. nvidia and sherwin-williams

replacing intel and dow. at 9:30 this morning, those guys are in and the other guys are out. treasury yields is one piece of the puzzle we all have been trying to understand. the ten-year note is 4.298. >> we'll talk all about interest rates and all kinds of things. for some reason -- >> mortgage rates going up. >> i think -- i hope nvidia is not an alagory for the than tire market, andrew. by that, here we are getting in at $3 trillion. it's made unbelievable moves. will it go to $6 trillion? it might. we don't know. there's plenty of room if there's competition or if it's not quite as exciting -- if the futures -- i guess the future is bright for a.i. you can't discount that. here we are. in the past when it's happened,

the companies have continued to do well like apple. >> it's not just in the market for the first time and the only way -- yeah, most people, i think -- >> if it just says where it is, it's an achievement. i guess, you know what? i'm worried about the entire landscape from here. you've talked about how if elon musk does what he wants to do, there will be pain. >> there will be blood. you have to hope there's good on the other end. >> there hasn't been a recession in a long time. we racked up a lot of debt. both administrations. i'm not blaming either one. that's got to be dealt with. i think if we thought a recession was going to happen two years ago, for sure, and it didn't, are we two years closer to one actually coming around

usually? >> we're always -- yes. when you're in the 9th, 10th and 11th inning, you're closer. >> trying to bring manufacturing home. we'll have a debate with a couple of people. they're kind of polar opposites. yale professor and someone from the manhattan institute. the manhattan institute is not that different in terms of their view on tariffs and things aren't. i don't know if they will debate or agree. overnight, china announced $1.4 trillion stimulus over five years. eunice yoon joins us now. we said we would go to china and actually see the stimulus package. do you have it right there with you, eunice? >> reporter: yeah, that's right. that's right, joe. there could be more announcements in the next hour or so, but so far china's long awaited stimulus is not what investors had been hoping for. you mentioned the headline number. it's big. $1.4 trillion.

that money is not being used to stimulate demand. 60% of it is going to local governments to usissue new bond over three years to pay off what the government calls hidden debt. this is off balance sheet debt. debt that hasn't been recognized which is a primary source of risk in the economy. governments will allow more special bonds to raise more funds for the same purpose. the finance minister signalled that china would be open to the idea of expanding its fiscal deficit next year. implying there could be greater stimulus then. so far, the stimulus we are hearing, is going to mainly come from refinancing that debt at the local level and the finance minister said this would free up about $85 billion over five years so the local governments can spend more. but there is nothing in the plan that puts money in the hands

dr directly of consumers or companies, therefore, stimulating demand. that's one of the reasons why you saw the stocks sell off. chinese etf and alibaba and others. >> a lot of stimulus. stimulating ourselves yesterday with jay powell and another quarter point -- or this week, eunice. i don't know what that does. it's a time that i think is fraught with uncertainty. we say that more than usual. can you update us on what kind of relationship we'll see with the president-elect and president xi? that's a weird one. trump has said verycome complementary things about xi. exert so much control over so many people. you have the taiwan issue. we want -- we want to on-shore a

lot of stuff. can you sleep at night? there's a lot for you to be thinking about. >> reporter: well, there's definitely a lot of uncertainty and several research houses expected this stimulus plan could even be bigger than what the policymakers originally wanted. nomura said it could be 10% to 20% larger than expectations. we don't know if that will come to floor. we will wait to see if anything else's is announced. in terms of the relationship of president xi and president-elect trump, tariffs. president-elect trump said he would hit china with 60% tariffs. that would be very disruptive to the economy. something that china would not want to see especially at this time when they have a jobs problem and excess capacity in several different industries. at the same time, president-elect trump has signalled to xi jinping that he could potentially do a few

things the chinese would welcome. such as softer approach with russia's putin for example which is a chief ally of china maybe a weaker position taiwan which also beijing would appreciate. then president-elect trump expressed contempt for the allies. in that way, china could potentially benefit from the lack of coordination and coordinated front for what they are seeing on trade practices for example on evs. >> all right. eunice, thank you. it's been a while. good to see you. see you later. i hope you are ready for the next one, sorkin. i have so many things to say. president-elect trump neighborhood susy wiles. she is the first ever to be named chief of staff.

she is tough and than universely admired. i saw a lot of comments from democrats. she works across the aisle. if you look behind, pull back the kurcurtain, she is the pers who maybe has tempered some of trump's impulses during the campaign and ran the most disciplined campaign. i guess he had one strong woman. i don't know, maybe mark cuban didn't see this woman. she deserves it. pat sumeral's daughter. he was an arkansas razorback. that's like the last time the lions did. maybe not everyone knows. there's also how many chief of staffs ended badly in the first term? you mentioned a lot. you quoted a lot.

>> we have. >> you quoted john kelly. i think you played recordings of john kelly. >> if, in fact, she is the one responsible for the strategy that led to the win. >> great campaign. >> obviously, this is one of the campaigns for the ages. >> she's tough. she's tough. here we are back to no strong woman. that was a great comment. we haven't seen him since that comment. we will see the mooch today. >> we will see the mooch today. we will discuss what's happening. >> he is on with vivek. >> that's better. we can hear from both sides and hear where they can find some common ground. you know what, though? i said this on wednesday. >> did you read notes about what mooch is going to say? >> we will figure out a way. we have to. even folks who are frustrated and this was not their choice,

we have four years. i am -- i know you think i'm crazy. >> you might be okay. jimmy kimmel is not doing all right. stephen colbert is not doing all right. nancy is not doing all right. >> a lot of people have put their efforts into the other candidate. >> joe's doing all right. he's smiling and laughing. i think he's happy. >> can i say, for those folks who feel vindicated and who won, the other thing that is incumbent, i would argue upon them, is to try to embrace those on the other side who didn't win who may feel that way. i think it's important. that's the only way we'll get there. >> the honeymoon's already over. it is. >> it's friday morning. >> i'm already seeing the same old stuff. i'm seeing the same -- we'll hear it. for four years, we're going to hear how bad he is again.

then one day, he get 73 million votes and everyone sees wow. maybe we didn't understand the actual mood of the country and it's like a wake-up call. >> i said to you multiple times. i'm saying, look, you have to be introspective of what ha's happening in the country. there are lots of reasons the outcome landed the way it did. there are people who are frustrated and penople who are vin difficdicated like you may . if we don't try to come together and those who are vindicated try to embrace those who don't feel vindicated. >> once again, you are putting the onus on the sore winners. >> it is incumbent upon --

>> i'll point out when i'm unhappy with the return to tds and you can be unhappy when you see people gloating, how's that? >> we have until january 20th. >> i know. you know, the tariffs are already putting us into a recession. you know with gloat, take out the "l"and know what you get? goat. coming up, jay powell's ulmments on whether or not he wod step down if president-elect trump would ask for his resignation. also, we will hear from roger ferguson. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by truist securities. experience, expertise, execution. ts. shaping tomorrow, today

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today, the fmoc decided to take another step in reducing the rate of policy restraint by lowering the policy interest rate by a quarter percentage point. we continue to be confident that within appropriate recalibration of the policy stance, strength in the economy and labor market can be maintained by inflation moving down to 2%. >> that was fed chair jay powell outlining the rationale for the quarter point cut. powell was asked about the

legality of trump. >> some suggest you should resign. if he asked you to leave, would you go? >> no. >> can you follow-up on -- do you think legally you're not required to leave? >> no. >> do you believe that the president has the power to fire or demote you and has the fed determined the legality of a president demoting at will any of the other governors with relationship positions? >> not permitted under the law. >> not what? >> not permitted under the law. >> thank you. >> joining us now, roger ferguson. i will direction, roger, and figure out if the quarter point is likely -- in hindsight to look like the right move whether there's subsequent quarter point cuts or if we're headed higher. the whole idea of trying to

handicap how trump -- president-elect trump's proposals, how does it fit into monetary policy and some would be inflationary and somerecessin of both. i could see us raising rates because inflation get rekindled with tariffs. i could see lowering rates if elon musk comes in and puts the brakes on a lot of government and government spending. is it a hard time to handicap things, roger? >> i think it is, actually. i think chairman powell handled it very well. he said effectively it is a wait and see. we have to see exactly what the policies are and then he said that what they would do is what you expect them to do which is to put into their model the best of the u.s. economy and then make decisions. but i think he certainly is open to the possibility that that

modelling, once we know what the policies are and what that mixture is could lead to either thing. it is too early to lead to one or the other, but you are right t. is important to see what the policy mix is and he says they don't guess, they don't speculate, but they will decide once they have a better sense of the policy mix. >> in kind of a perverse way, roger, the jumbo cut of 50 basis points caused conditions to tighten. mortgage rates have gone back up. the ten-year has done nothing but go up in yield since then. it almost was, you know what they were trying to orchestrate, almost the reverse happened, yet the market continues to hit new highs and the wealth effect is on full display. do we -- i don't -- should we change what the neutral rate is right now given what's happened

with the ten-year? >> i think the question with the neutral rate is very much going to come into play. as you know, i thought the first move should have been 25 basis points. it was interesting that chair powell pushed back pretty hard on the thought that the shape of the yield curve and level of the ten-year and 30-year was the loss of confidence and fighting question and expectations. what he also said that i found really interesting is a certain kind of caution about exactly the pace at which they are going to continue to cut rates and he was clear that they are moving away from certain sentences that they are giving forward guidance. to your point, joe, while he is pushing back on the thought that there is perverse in the markets and the expectations are becoming a little more lucid, i heard in his voice that we will

take this one meeting at a time and i think he said explicitly, they're not on automatic pilot or a phrase to that effect. >> it was only one day, roger, i don't know how much you can read into the reaction to the election results, but gold was, after creating a series of new highs, gold was down significantly which seemed odd if it's inflationary. there are those watchers that say a highly deregulatory environment could be disinflationary and maybe at least counter some of the tariffs, if they are put on, maybe they won't, some of them, maybe it's negotiating. are you convinced we will see highly inflationary policies? we talked about elon musk and the department of government efficiency. that won't probably be

inflationary. that could be deinflationary as well. >> what i found interesting in the reporting is some members of congress, apparently, in the republican party, are thinking about how to pull back from some of president-elect's promises of taxes. i think what happened with regulation, very undcertain, as you say, we will see how far pro-growth is. there is reason we have regulation to protect consumers. the question of tariffs is a nuanced question than most people think. it depends very much on how much is passed through and whether or not profit margins go down or tariffs are a one-time change in price levels. they may or may not be inflationary. we have seen a period in history with tariffs are retaliatory tariffs and led to recession and some people think a global depression. the final point to make is, you know, an expectation of

increased debt and deficit, we all need to worry about. chair powell responded, i think, appropriately at this stage that the debt looks like it's manageable. the trajectory and increasing definitesfeficits have to be woo everybody. joe, it's a fraught time in economic policy. it could go either way. we have to wait and see what the first and second moves are and the secothird moves with tariff. >> roger, i say the oil complex and oil and gas and lng and the like. then you are looking at the solar and wind companies getting slammed from the equity perspective. i imagine there will be a lot of m&a in the industry with the companies that don't benefit from the tax benefits and the like. on the oil and gas piece, we had the ceo of exxon on last week,

darren woods. they don't want the price of gas to go too low. it's very important, i would think, from the inflationary perspective to offset the tariffs with prices. do you think they will get the lower gas prices? >> look, as you know, the price of oil is a global price. it depends on lots of things. the u.s. has the advantage of being energy independent and less concerned about, you know, uncertainties with supplies of the rest of the world. i think we have a little bit more chance of controlling the price of energy in this country because it's at this stage a domestic question and less driven by geopolitics. you put your finger on another important point, andrew, which depends on profit margins and whether or not businesses, if

there are tariffs or if there is an increase in input cost, their ability to pass those along. what we saw with the recent bout of inflation, some things, those companies, consumer goods companies, had to unwind those efforts to pass along price increases. so, there's quite a bit of cross current here. there may be, as you point out some things, movements and profit margins or on certain goods and commodities to offset inflationary pressures in other places. >> all right. roger, last question. do you expect the recession in the next four years at some point? are we due? >> i disagree with your theory that we're overdue for a recession. i really am hoping we don't have one. >> we cured the business cycle. we think we have. you think only policy mistakes result in business slowdowns?

>> look, i think we liearned a lot how the economy works. we have an economy that is more nimble and more service oriented. the periods we have with the rolling recessions tend to be around goods problems or policy mistakes. one of the things that chair powell said yesterday was that he was really pushing for complete fed independence which i think will help stabilize the economy. >> the last time we were sure we cured the business cycle and knew what we were doing was 2007. not kidding. that was the last time we decided there would never been another recession. >> i didn't siay there would never been another recession. recessions are inevitable. keeping my fingers crossed. >> we thought we had it down and we had the great recession. all right. roger, see you ater. >> we'll have a chance to discuss that later. >> okay. good. hopefully. thanks. coming up, first amazon and

now the washington post ordering workers to return to work five -fi d- veays a week, folks. details are next. and a closer look at the newest member of the dow jones industrial average, nvidia. "squawk box" is coming back after this.

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helping markets participants to manage risk and spot opportunity. (♪♪) welcome back to "squawk box" this morning. our executive edge right here. we have a story for you. employees at the washington post ordered back five days a week. just like us. according to a memo to employees, they have to come emply with the policy by february 3rd.

some others? june 2nd. you've got some time, folks. the policy at the jeff bezos company mirrors similar in-office mandates for amazon workers. this is a distinct policy. the memo was met with disapproval from the washington post guild which called the policy infleflectxible and out . will lewis, the head of the washington post, said look at how inspired they were, the staff was, when they were all in the office the night of the election. that's what they were making the argument to -- >> until the results started coming in. >> when you're in an office and doing the work -- >> andrew, in a businesslike that, remote work is fine. i think maybe even better since

the group thing pervasive at the washington post. you don't have to be there. you can be out on your own and come to certain conclusions. you don't need to be in an office setting at the washington post on. at other places -- >> we talked about deep work and when you are doing the writing and stuff, sometimes it's better. the joke is if you are a sales person and possibly a reporter, when i was young, i remember if you were -- >> when? >> when i was young. when you were in the newsroom, there was an editor that would walk around and say what are you doing here? there's no news inside the building. i remember that. i remember a similar phrase with ad sales people at one point. someone said, there's no money here. like go out and -- if you are a sales person or a reporter or people who have to be out and about, being in the office is a different thing. >> right. >> depends what the gig is. >> it does.

and, i mean, i remember when you're a telemarketer -- a stockbroker. when you're one of those guys, you're making calls to set up to make appointments to see people. in the report the oregonian, intel is bringing back free coffee and tea. in a memo, they said we understand that small comforts play a significant role in the daily routines. the company did not resume offering free fruit. another perk that was eliminated last summer. we're going to update this story, as important as it is, if we get any other details. andrew. coming up, when we return, we'll talk about the potential impact of president-elect trump's tariffs proposal on the retail sector. that is coming up next. as we head to break, take a look

at yesterday's s&p 500 winners and losers. as we're back in just a moment. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. [sending swoosh] we have tight turnarounds. at&t business helps us deliver. okay! client wants his head bigger. wow, fast response. sent! okay, oop! even bigger. sent. [sending swoosh, notification alert] still bigger. okay, yeah i'm not doing that— [typing noises, sending swoosh] i think it still looks good! [notification alert] oh — even bigger.

good morning. welcome back to "squawk box." live in nasdaq times square. intere there's the futures. not a lot to write home about. it's been quite a week in many ways. we have a guest. >> we do. president-elect trump said he could bring tariffs up to 60%. the federal retail administration said the spending power of retail goes could be as much as $76 billion annually. the question here is what does it does it mean for retail on the import or export side?

courtney reagan joins us. >> what is interesting so far, the retail etfs this week rallies in the election results for president-elect trump. all up more than 5.5% week to date. if you look deeper, there is worry in the water. president-elect trump increasing tariffs across the board, especially 60% for china is rattling. five below is one of those. five below doesn't have the pricing power to mitigate tariffs as it is reprioritizing lower priced items. 60% of sales from china and downgrading shares of yeti. 40% of the production is in china and adding a 60% tariff50

points. jeffries is aggressively buying yeti. shark ninja's production is planned to move out of china in those names. chuck grom points to academy sports is a loser with tariffs and piper sandler's peter keith says dollar tree is among those under pressure. obviously, andrew, we have so much more to parse through and think about. this has only been a proposal. president-elect trump has not taken office. >> what does steve say? you don't have to do anything and it starts? >> steve madden is another name. >> steve madden to slash china

sourcing as much as 45%. before anything happens. already bringing stuff back. >> that's what shark ninja is doing. >> not necessarily back, but other places. i you think also the other fear is what about the 20% import tax on anything. it takes years for the factories to be moved and find the skilled labor. when it is the united states or otherwise. yeti has 40% of production in china, but they said they plan to move it out by 2025. if the tariffs come into effect, maybe it won't be as bad as feared. he is less worried than bank of america on that. >> foreign leaders don't know how to figure out what it means. we were talking about eunice about it. trump, supposedly, loves aut autocrats. po putin. is this bad for me? >> tariffs. >> tariffs.

all of the things that we remember from the last -- the previous 45. 45. >> we don't know. we don't know. we're trying to prepare. >> one thing we know, he's unpredictable and that could be good and bad for foreign leaders trying to figure things out. >> the unknown. >> courtney, thank you. nice to see you. when we come back, china revealing a $1.4 trillion with a "t"stimulus package. we'll explain what's going on here when we come back after this.

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welcome back to squawk box." we'll talk about what is happening in china. announcing a $1.4 trillion in

stimulus over five years. joining us over what is happening in beijing and a number of indexes is down, we bring in china beige book kasi. what is -- what does this really mean? i thought that kind of number, you have things flying in a david tepper style way. not the case. >> not at all. this is not the stimulus markets are looking for at all. what they're doing is recycling debt. we've seen this playbook in china over and over again. i don't think this does anything to actually sdtimulate growth, not in a way that is meaningful for markets. >> when you say recycling debt. what do you mean? >> you can go out and issue more bonds and take on the hidden debt and bring it on the balance sheet and then some more. some of the debt that is owned by the local governments is

moving money around. it blrings out the interest rat payments and brings you more money to pay workers. it doesn't do much. >> what is the gamble for the next 12 months? tepper called it right. >> i think a lot of the calls are not as right as they sound at the moment. you haven't gotten the bazook arks style stimulus. you don't have a rescue package. i don't think it is happening no matter what happens in the next 12 months. the prospects of a trade war as of tuesday, just sky rocketing, obviously. what is happening is beijing is reserving the fiscal power and if this kicks off, we move in. >> let's talk about the trade war. the impending trade war. in your mind, what does that

look like? walk us through that, you know, the decision tree here of what could happen. >> i think the trump folks or more or less already working on the plans for the president on day one and how big they want to go and the debate is all starting out very, very live. we will find out, of course, once trump takes office and his priorities and he makes the announcement it's. the announcements could be dramatic and staggering and bold. we will see what the actual um p impact on the economy is. that is where china is stepping in. we will provide the manufacturing to help cushion the blow. they will keep that stabilization effort going. >> how should investors, one of the most owned companies in america is called apple. they have a huge manufacturing reliance on china. what do you think -- how would you even think about that right

now? >> there's been a target on the back of american companies for a while. i think when we talk about china's retaliation, outside of putting tariffs, which don't mean much, in the larger scheme of things. they could go after american companies. who do they go after? do they go after apple or say forget about this? there is a lot of medical and pharmaceutical production that happens in china that americans rely on. they could disrupt those supply chains. their tool kit is limited overall. we have a big arsenal, but they could still cause a lot of pain. >> thank you for coming on this morning. > mi u dftng. >>congp,rakis says it had a bit of a rough start to the current quarterers had been much. that story coming up next.

shares of draftkings are falling. the company cut its full year forecast citing a tough start to the fourth quarter because of customer friendly sports outcomes. customers have been winning. gamblers are winning more than expected. here's ceo jason robins last night on "mad money" with jim cramer. >> had a huge increase in handle in october. revenue was actually down 20% because customers were winning, but the handle was up 20%. so really excited about that. and i think we're going to have a really strong finish to the quarter and a really strong 2025. >> draftkings said it has a higher percentage of parlays than other books which usually is more profitable for draftkings unless people start hitting parlays and the favorites, apparently, have been hitting at a higher clip and shares right now as you can see down about 6%.

6.5%. coming up, nvidia's big day. another big day. nvidia had nothing but big days for a couple years now. as the a.i. chipmaker teenred the dow today, stock is up 200% this year. we'll talk about prospects for the entire chip sector, next. protecting against rsv rsv is a highly contagious virus if you're 60 or older with certain chronic conditions you're at higher risk of being hospitalized from rsv. and there are no prescription rsv treatments. you know how to protect against covid and flu so ask your pharmacist or doctor about scheduling an rsv vaccine, too. because moments like these matter

industrial average today. to discuss what this could mean for the chip sector is chris casio, wolf research senior analyst and anything we talk about in trying to handicap things, retail or, you know,

things made in china, it is all difficult to discern what is going to happen until it actually happens in a must admini administration. what are you expecting, chris? >> well, the first part is that as you say, as we knew from the last trump administration, whatever we thought one week, it changes the next. so it is unpredictable to start. but there is really kind of three things that we're watching here. one is, you know, further restrictions on equipment sold into china, a.i. restrictions, and then what happens with tariffs. on the first one, on the equipment, there is a lot of restrictions in place and, in fact, it sounds like there are going to be more restrictions before the end of the year by the existing administration. but, china is already very, very significantly hampered in what they can produce already. so, any other restrictions from here, it is either kind of tweaking along the edges or full

stop and a full stop hasn't been on the table. with a.i., similarly, nvidia can only ship into china about what huawei can do themselves. if you put additional restrictions on what nvidia can ship into china, that's going to move a lot of business to huawei. it doesn't have a lot of effect. and on the third thing, on tariffs, there is actually not a lot of semiconductors that come directly into the u.s. from china. as an example of iphone, you know, the chips are made in taiwan, they go to china for assembly and they come back to the u.s. in a fully manufactured iphone. so, you know, because of that, we kind of see tweaking along the edges, but not huge impact on the chip industry. >> chris, were you a proponent, supporter of the chips act and do you think that it has been a success at this point? i know it is still early. and do you think that the trump

administration is going to try -- is this one of the things if they do win the house, the republicans, that they're going to try and reverse? >> you know, joe, my view on the chips act was a bit mixed. there definitely was a real imperative to diversify production outside of taiwan for obvious geopolitical reasons. we're overexposed to this one country, that's not a good idea. the chips act helped that. however, as the money was dispersed, if you remember at the time when the chips act was being contemplated, it was about, you know, automotive semiconductors being in shortage and, you know, we need to encourage investment and now we have got way more semiconductors than we need, which is often what happens when government acts. but so, you know, the money that would have been -- that was

spent on manufacturing would have been spent anyway if the chips act never existed. it did encourage perhaps a little more investment in the u.s., but, you know, even that, you know, apple knew, apple knew that they needed tsmc to diverse outside of taiwan. they would have made them do it with the chips act or not. singapore is a new destination for new semiconductor facilities. part of it is, you know, it is friendly to business, it is low tax rates and they incentivize their business too. so the chips act, in some sense, just kind of levels the playing field the u.s. versus the rest of the world in terms of incentives that governments provide for what is a pretty important business. >> right. it is industrial policy, but trump has some things that at least look like industrial policy that he's proposing as well. i don't -- so you said it was mixed. i think what you finally said

was because other countries are doing it, we might as well do it to level our playing field but we're not very good at it. >> well, yeah. all industrial policy, you know, it is -- is the money being sent to the right companies for the right reasons. >> you mean intel? >> well, you know -- >> maybe we're lucky we sent it to them. >> they really -- it appears they need it now and in our view in intel is that -- >> we're buying coffee again for their employees. got that going for us. and tea, depending on your preference. chris, it is mixed and it is, you know, it is only three -- today's friday, so that was -- we didn't know anything until wednesday. there is a lot of these things that will be worked out. we got four years to figure out whether it is working or not, chris. anyway, thanks. >> interesting four years. >> chris caso, the wolf of wall street. no, that's a bad thing.

you work for wolfe. >> wolfe research. >> wolfe research, no relation. no relation. okay. >> okay. meantime, it is just after 7:00 a.m. on the east coast. 7:02 to be exact. you're watching "squawk box" here on cnbc. i'm andrew ross sorkin. that's joe kernen. becky is off on this friday morning. we got a number of big stories to tell you about. the biggest perhaps is this china announcing $1.4 trillion in stimulus over five years. the government will allocate funds to local governments to deal with debt issues. major indices on the back of that. we haven't been able to see what's happening. you can look at some of the futures and other things. they're closed. but lower overnight, which might sound surprising given the fact that that stimulus, you would have thought, would actually push equity prices up. we just had a guest on the broadcast suggesting that some of this money is being recycled. i'd love to talk to david tepper on a morning like this. >> yeah. >> get his take.

>> president-elect trump has named susie wiles his chief of staff. she has been running his political operation now for the last four years. and she will be the first woman to hold the job and as we discussed in the last hour, what a campaign she ultimately did run. >> and people are mad that i said pat summerall was a detroit lion, they love them because he's a giant, a new york giant. and a great broadcaster as you know for years and years and this lady is a pat summerall -- >> shares of airbnb down sharply this morning. the company earning $2.13 per share, a penny shy of estimates. revenue slightly higher than expectations. airbnb reported 123 million experiences booked, that's up 8% from the same quarter a year ago. so, the stock down about 5%, but the yolo travel economy does not

seem to be slowing down at all. >> let's check the futures this morning. wasn't a lot of action. the nasdaq down. that's been -- i think yesterday the nasdaq with a good, but the dow was basically unchanged. dow not a lot happening this morning. nvidia, and sherwin williams, which -- what do they do? they paint the entire world or something like that. that's their logo, paint going all across the entire globe, which would be bad. we would all suffocate. let's get to our senior economics reporter steve liesman with more on the fed decision, more on chair powell's comments and then i asked roger ferguson whether if the ten-year ticked higher, hasn't that tightened conditions instead of loosening conditions a little bit? haven't mortgage rates gone up, steve? it is also hard to understand and it is perverse. >> that's exactly what i asked powell yesterday. whether or not he would lean against it and he was, like,

way. >> wow. i hesitate to say great minds. this may be all we're agreeing on. >> it is a mind meld. that's what's going on. let me go through the bank basi what happened. the coverage by quarter as expected, and they did suggest more to come. fed chair jay powell said the central bank was on a course toward neutral, but in no particular hurry to get there. he tried to present the status quo policy as if nothing had changed even while of course much has changed with the presidential election. powell had to respond to the question about whether it would resign, he said he would not. and he was asked if president-elect trump could fire him. >> do you believe that the president has the power to fire or demote you and has the fed determined the legality of a president demoting at will any of the other governors with leadership positions? >> not permitted under the law. >> not what? >> not permitted under the law. >> thank you. >> okay. for another change, a trump

presidency promises a vastly different fiscal regime and powell responded that the fed would essentially take it as it comes. >> of course, the real question is not the effect of that law. it is all of the policy changes that are happening. what is the net effect? and, you know, the overall effect on the economy at any given time. i think that's a process that takes a lot of time and that we go through all the time with every administration constantly. and i just -- this will be no different. >> futures markets ended up a bit more dovish in their outlook than they started before the meeting for a rate cut in december, 92%. then 38% for january and back up to 78% for march 2025. so you can see they have come a long way to discounting recent better economic growth. and, by the way, that pattern there, you see on the screen, is this -- the pattern into next year, where it looks like they're into an over other

meeting regime. and then you have the higher yields already. and higher stocks. the results, i think the market and the fed's own outlook are more closely aligned now. the market has one less rate cut they'll take. just watch that. that's not a big deal. it is interesting, the market came to where the fed was, even before what happened with the presidential election. so, i don't know, joe. it is very weird. it is very weird. because the stock market rising is a loosening of conditions. bond yields rising is a tightening of conditions. i don't know the extent to which they offset. they offset, all things being equal, in favor of equity financing more than they do debt financing. >> all right. do you want to do worst case scenarios first or best case scenarios first for what happens now? which one and i'll tell you. >> you mean for the presidential election? >> what happens with the

policies. let's do the worst case scenario first. tariffs and other policies cause some reflation and immediately trying to pair down the government and not spending much causes a slowdown so we go into a stagflation. what is the fed supposed to do if that happens? >> you know, joe, i want to give some advice to the trump administration. are you ready? >> uh-huh. >> you can do -- i said this when he did s.a.l.t. you can do big changes and the american economy can adapt, but it is important to give business a runway. in other words, let business -- let consumers adapt. that's really a big answer to my question, to your question, joe. tell me how it is implemented. tell me how big it is. if he wants to put tariffs on, okay, maybe what you say is over the course of a two-year period, we're going to have a rising

tariff rate that will try to induce and incentivize companies to bring back manufacturing to america. >> you're doing my best case scenario. you're doing my best case scenario now. the other side is let's say it is gradual and you do tariffs like that and let's say that the -- in terms of deregulation and cutting spending and shrinking the government, let's say that all becomes actually growth oriented. you don't get the inflation and you actually have more growth. then what does the fed do? either way i can see -- but you kind of got into the best case scenario why you were complaining what to do to avoid the worst case scenario. >> right. exactly. i don't know. i think the fed has to stand back and i think tariffs overall are very, very harmful to the global economy. i think they're ultimately harmful to the u.s. economy. joe, if i could just tell you one thing, when i was in russia,

all the products there absolutely suck, right? i always wondered, did they suck because of communism, which took away the profit incentive, or did they suck because of protectionism, which took away any incentive? one of the things that imports do to the u.s. economy and to all economies is they create competition. if you close the borders, you'll have all these shiny products and none of them will work. >> you ever been to budapest? >> i have not. >> i think you probably saw it, though, beautiful renaissance architecture right next to something that looks like the worst prison and it is like an office building and right next -- the c comeies came in a it is a blight and next to is beautiful european everywhere, very strange, very strange.

like perfect juxtaposition of communism and freedom and capitalism. all right. thank you. >> exactly. >> thanks. >> coming up, the presidential election, it is over. the fed has now cut rates again, so what is next for the markets? time to ask fund strategist tom lee, he's been right about so much of this. he'll be on set with us in just a moment with his latest market call. you got to hear this, folks. and then around 7:30 a.m. eastern time, a post election follow-up debate with vivek ramaswamy and anthony scaramucci. they don't ever hold back, do tey >>hey were nice last time. >> it is going to be good. it is going to be good. >> vivek is like -- >> set your clock. >> he's a symphony. >> if you got a subway or train schedule. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. dehydratech processing of a glp-1 drug demonstrated improved blood sugar reduction and reduced side effects.

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joining us now on the markets, tom lee, head of research at fund strat global advisers. he's a cnbc contributor. first post election appearance that we have had. you knew trump was going to win. >> well -- >> not many people did. >> yes. that's -- >> i'll give you credit. are you saying you didn't? maybe you didn't say it in so many words. >> we were placing a lot more weight on what the betting markets were pointing to and so -- and we, you know, when we look at the -- >> you saw it in the trump trade and in bitcoin. >> right. >> and you saw it in sectors of the market that would benefit from -- >> that's right. >> presumably, but who knows, from a trump presidency. so 1500 points out of the gate. more to come or have we already -- we're already there?

>> i think we need to respect this move. there was a tremendous rally post election and it continued yesterday. i think it really does reflect a lot of money was taken out of the market because of the uncertainty around the election. and now we know that because of policy changes and animal spirits that this is really going to benefit things like bitcoin and small caps and regional banks and financials. i think there is a lot of upside. small caps trade at ten times median forward earnings. that's -- >> what do you think that should be? 12 times? what is the opportunity set in your mind? >> since 1987, small caps traded on a median pe basis at a premium to the s&p. the s&p is at 17 times. small caps could in the next couple years outperform by more than 100%. >> and what do you think about the macro issues that i think create a different level of uncertainty, talking about the bond market and what that might be saying, what you think has

happened with gold, you know, the bond vigilantes this governor on whatever you think is going to happen in washington? >> as james carville famously said, you know, the bond market is everyone's scared of the bond market. that's something we need to watch. we had plenty of periods where stocks have risen with bonds. i agree with powell's assessment, yields have gone up not because of inflation, but a change in growth expectations. >> i thought that a sweep was for either party was a death nell for the markets and frightening to all involved. and now we're getting a sweep. why isn't it more frightening? maybe a sweep the other way would have been more frightening to some? >> yeah. i mean, i think part of the reason investors are getting somewhat optimistic is that president trump is entering office again, but this time with a lot more knowledge of how to build, you know, cabinet and a

team and so in some ways this would end up being more market friendly. and i think that's why investors are becoming optimistic. i agree with the idea there are animal spirits growing. >> he'll never be deficit friendly, will he? i mean, he will be, he won't be -- if we cut taxes on tips, social security, overtime, remove the s.a.l.t. cap, extend the tax cuts, if you do all those things, that seems like -- >> it is going to be very difficult to fix the deficit with just changes in tax and spending. but it is probably why bitcoin is kind of interesting here because it is potentially a treasury reserve asset and if bitcoin rises in price, it helps offset the liability such as the deficit. >> you were at 150 on bitcoin, weren't you? >> yeah. >> not necessarily -- by the end of this year or -- >> i think six figures is still possible for it, for the end of the year, yeah.

>> and then more next year and the year after? >> yeah, i think because now post having and now bitcoin is becoming a lot more relevant and i think the regulatory overhang is diminishing, there is a lot of upside from here, yes. >> s&p, end of next year? >> well, i -- between now and year end, 5% to 10% is probably the base case, just because that's the type of rally post election and we have a dovish fed and the normal seasonals. >> is that the right move now for the fed? >> i think inflation fighting war is largely over. the real rate is still too high. so i agree with the fed's view we need to move toward neutral, which is toward 3%. so i think it is supportive of markets. and, you know, business investment has been constrained. i think these things are positive. >> what about 2025?

they move so fast, like months now. years. what about 2025? 5% to 10% more would put us well above -- >> more than 6,000 before year end. i think at least for the foreseeable future -- >> no recession? >> no recession. >> people want you to answer. what are you saying, 60 what hundred on the s&p. >> i think well past 6700. >> no. >> 6700? >> yeah, sometime next year. >> that's another 20%, isn't it? >> yeah, well, maybe 10, 15. because margin debt hasn't really risen in the last four months. and the stock market is up. so we know investors haven't been adding risk. and now we have earnings visibility and we have a continued dovish fed and this election is behind us, so multiple tailwinds exist. >> wow. you're pretty bullish. >> i think i'm pretty positive

on the u.s. and fundamentals, yes. >> okay, good. all right. thank you. it was good to catch up with you post election. thanks. >> okay. when we come back, we have results out from paramount global this morning, we're going to jump right into the media landscape and how it could shift with president-elect trump heading back to the white house. "squawk box" coming back after this. >> announcer: time now for today's aflac trivia question. what are the three top states with the most countys? the answer when "squawk box" returns. ac pays people money for the expenses health insurance doesn't cover. aflac! health insurance does leave a gap. but aflac gives people money to help close that gap. aflac! oh! coach prime got one on the line too baby! uh huh! see that's how you hold up a trophy. trust me. get help with expenses health insurance doesn't cover. find an agent. get a quote at aflac.com. i hope you're hungry. i'm glad i brought my own dinner. uh huh. (vo) this season, try opendoor's turducken of offers.

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>> announcer: and now the answer to today's aflac trivia question. what are the top three states with the most counties? the answer, texas, 254, georgia, 159, and kentucky, 120. welcome back to "squawk box." some earnings to report this morning. paramount global just out with its quarterly reports. earnings coming in at 49 cents a share, beat estimates of 24 cents. revenue at $7.73 billion, that fell short of wall street expectations due to weaker performance in the film and television business. paramount plus revenue growth at

25%, with subscribers rising by 3.5 million in the quarter to 72 million now on that side. that was better than the expectations. filmed entertainment revenue decreased 34% and tv media fell -- sales fell by 6%. joining us to discuss this and so much more about what's going on with the media giants, the rest of the landscape in media land, puck's matt bellamy. good morning. we can talk about paramount. i would really want to talk more broadly about what happens in a post, you know, election world, where trump has now won, the regulatory world may be shifting under our feet in a very different way, and what your sources are telling you about what transactions and things may be possible or may not. >> listen, there is certainly optimism in the c suites of entertainment and media companies because it is pretty clear over the next few years there needs to be a realignment,

consolidation and some of the ceos, like david zaslav, he's openly cheering for it, saying to the market, we need to consolidate, we have been stymied by this past administration, the current administration, and we're hoping that the new administration will let us do what we need to do to, in his words, make everyone better. and he thinks he's directly equating this to the consumer experience, but it really, here, is what he believes needs to happen in the industry and that's -- they need to merge, they need to do joint ventures, they need to consolidate their streaming services, and if he's right, that's going to happen over the next few years. >> six months ago, matt, they asked -- and david, believe me, democrat, huge, but six months ago they asked, you remember what he said, he said i'm for whichever candidate is best for the business. i was, like, oh, my god, it

sounded like he was not just dismissing the notion of a trump presidency out of hand. like he was saying, you know, i almost would be open -- that's the way i read it. long time friends with him. i know how he feels. >> yeah. i mean, no secret that the tech world and the entertainment world had been really put off by particularly lina khan and some of the actions by the department of justice, and that's what they are talking about. and he did openly say at sun valley that i'm for whoever is going to let us consolidate. and there is a sense in the industry, you know, you think of hollywood as a bastion of liberalism, but there was a sense that people had their fingers crossed for a result in this election that would let them consolidate. i actually believe that if harris had won, she would -- she might have taken some action against lina khan, but now i think it is pretty clear what

we're going to get. because president trump's first term did allow more consolidation. now, there is the personal element there. remember in the first term, the department of justice went after at&t's acquisition of time warner then. and now david zaslav owns that same asset, cnn, that was supposed by the problem for president trump. so would trump be a little bit less likely to let warner discovery do what they want to do because he's not a fan of cnn? and same goes for disney with abc news, which trump is currently suing or comcast with this program and this network and more importantly msnbc. will that become an issue in this race to consolidate? >> so, matt, let's talk about the chess board, let's talk about the various permutations and things that you could imagine coming together or not. you just mentioned the parent company of comcast, which, of course, is considering spinning off as you said this network,

msnbc, potentially bravo, sci-fi, e, some of the other channels, the golf channel and the like, into another company. obviously have paramount which we just discussed with their earnings this morning. questions about what you think of the future of max looks like. there is the disney piece of this. walk through the sort of chess board as you see it and who you think really wants whom. >> well, there is three companies that are, i think, in play. it is paramount, which is obviously being sold right now to the skydance group and that transaction is scheduled to close in the first or second quarter. but they could do some deals with their cable channels, with other assets, we don't know exactly the disposition of paramount. we know that they're bullish on streaming, we saw the results today, 3.5 million additional subscribers, profit and streaming, which is significant, but it is not big. the other two are warner

discovery, which is openly saying we want to consolidate. if you read the s-4 document on the paramount sale, it goes through the background of the transaction. david zaslav was pretty heavily lobbying to merge with the paramount assets or at least do some kind of a deal so we know he wants that, and then there is the nbc universal assets which could either be spun off, there is the scenario where they're spun off together with other cable assets, they could be a joint venture for streaming where peacock combines with max or paramount plus or all three or perhaps they do a deal with some larger platform, like an amazon prime video, where peacock becomes part of that, or it is an international joint venture or something like that. there is a lot of scenarios on the play, but there is a lot of scenarios on the plate, but they all require working together among media and in some cases tech companies, and that's where

the regulatory element comes in. >> it seems like we're -- now we're back to talking about pipes and how things get to -- there is valuable content in all those -- most of those -- i mean, is mtv still on? is that still valuable? does anyone still -- >> it is. and it makes money, but it is declining pretty rapidly. has no future. >> and if you put melting ice cubes together, just seems like it is just a bigger ice cube that's still melting. or because the content, like i think cnbc is so valuable in that -- it throws off cash and everything else, the distribution model is melting. but the content itself is not melting. so where does it end up? where does it belong? how do you -- >> it is all going to end up on streaming. the market knows that. but there is value in these

cable networks currently. news networks are more valuable now because they have urgency. they have a reason to tune in, they got habitual audiences. all the content on the other cable networks that has any value is available on streaming. so there is really no reason for cable networks without sports or news to exist anymore, yet they still throw off a lot of profit, they still have carriage, there still is a cable business around them that has been built, so just like the newspaper business, there will be a market for cash flow, essentially. people will milk it and milk it and the ice cube will get smaller and smaller. it will eventually disappear but not for a while and that's why the thinking is maybe if we separate these nongrowth cash flow assets into separate entities or combine them or do something with them, it will free up the rest of the companies to grow, while still giving an opportunity to milk that cash. >> matt, always great to see

you, sir. look f look forward to seeing you soon. have a great weekend. >> thanks. a rundown of the top stock movers. "squawk box" is coming right back. and you might be thinking... can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. because when your people work better, everything works better. so, let's get to work. idris elba works here? mm-hmm. ya, he's super nice.

welcome back to "squawk box." i'm dominic chu with a check on your friday morning movers. we'll start with some evmakers. shares of rivian right now just up about half a percent after reporting a loss of 99 cents a share in the third quarter. that was worse than the 92-cent loss that analysts were looking for. the company missed revenue expectations for the quarter and lowered its full year earnings forecast. shares of lucent up 2.5% after the company narrowly beat wall street's third quarter expectations. the electric vehiclemaker reaffirmed plans to be consumer production of its new suv by the end of the year. we'll throw up a quick check of tesla as well, down just marginally here this morning, on the heels of ia 22% gain ahead f the election. shares of firm holdings are falling 2% right now. despite posting better than

expected first quarter results. the buy now, pay later service said it is growing faster than the e-commerce market in general with gross merchandise volumes up 35% from last year to $7.6 billion and another key metric, the revenue less transaction cost was at 3.8%, that was relatively flat from a year ago. shares doubled in just over the course of the last three months here. keep an eye on those affirm shares. we'll end on pinterest, tumbling around 12.5% after posting weaker guidance, the company reported beats on the top and bottom lines for its past quarter. point rift cfo pointing toward ongoing weakness from food and beverage advertisers. shares down 12.5%. andrew, back over to you guys. >> dom, thank you for that. we'll see you in a little bit. i was going to say have a good weekend. we're not doing that yet. i'll see you one or two more times. when we come back, the challenges facing the incoming trump administration, economy,

immigration, a lot on the table. and we're setting the debate table ourselves up again. vivek ramaswamy and anthony scaramucci are going to go and discuss all of it right after this. move your train schedule back. stop whatever you're doing. be here right after this.

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welcome back to squawk. for a look at expectations for a second trump term and bitcoin and to much more, want to bring in strive asset's vivek ramaswamy and skybridge's anthony scaramucci. a lot to discuss. before we even get into sort of the economics of where this goes, i want to go to anthony, i know you've been outspoken throughout the campaign, and ultimately we're on the losing end of it and wanted to get your reaction to it. ing. >> well, first of all, congratulations to vivek and the team. they had an unbelievably well executed campaign and also susie wiles is someone i know very long time, congratulations to her on being chief of staff. listen, we lost, they won, but

it is america, and one of the things i like about vivek is that he is an american. and he wants to unify people. i'm hoping this will bethat type of discussion. there were certain things that happened in that campaign, andrew, that i'm not in love with, there was a coarseness to some of the rhetoric, there was some threatening suggestions to people related it being political adversaries and so on and so forth, and i hope we can put that rhetoric aside and move forward and think about what we're going to do as a country to unify the country, and make the people in the country, particularly the lower and middle income people in the country more prosperous. >> the rhetoric got heated everywhere. you got pretty heated, anthony, at times. >> joe, how did i get heated? what did i say, joe? >> about trump? >> what did i say? i said -- i repeated what he was saying. i said this is wrong. come on, joe. >> you have -- you have had an utter disdain for trump. you'll always be welcome at the table of legacy media and have

people nodding as you trash trump. that's always going to happen. aren't you the slightest bit embarrassed or humbled by how wrong you were about the feeling of most americans -- let me finish -- enthusiastically supporting a candidate who a majority of people thought had no business being anywhere near the oval office and you're a republican, and you saw the -- all the different policies that she was talking about are anathema to what you thought your whole life and yet you went along with it, do you ever eat any crow -- or not even -- >> i'm sure what you -- >> the little cape on or -- mic michael avenatti could be on tv trashing trump. if he wasn't in prison, woehe wd be on cnn running for president. give me a little bit. >> first of all, i immediately put out a congratulatory tweet, they won, we lost, and the immortal words of barry diller,

he lost the paranomount deal, wt would you like me to do, get on bended knee before you? >> no -- >> that's not what america is about. we have a disagreement about lots of things related to trump's personality. you like trump. i was close to trump. i got to see the ugliest of what he is and, by the way, joe, it is not just me. there were 40 of us that worked for the president who -- >> here we go. i think he's been very good for your career, anthony. i think he's been incredibly good -- you're here, are you not? you're going to be welcome anywhere you want to go. he's been very good for you. and you have to live off this for another four years. >> joe, why don't you calm down a second, joe. we know each other a long time. are you saying you and i can't disagree on someone's personality? is that what you're saying? and you're saying -- you're saying what i'm saying in terms of identifying those features and traits of the personality, you don't see those too, but you're choosing to ignore them?

>> i guess 75 million people looked at everything you looked at and they decided there were other things that -- >> but there were 67 million people who didn't, joe. that's what makes america, joe. that's what makes america, joe. you're saying to me that stuff that i was saying wasn't fa factually true. if someone is saying they're going to use the american military to go after their political adversaries, and i say, geez, that sounds very un-american to somebody like me -- >> is that what he said, vivek? >> of course he said it. >> let me see if i can -- let me just take a moment to say, this was a decisive win. put aside republican or democrat, this was the first time -- >> i admitted that, vivek. i admitted that. joe wants something more. he wants an extra pound of flesh or something like that. i admitted. >> let me just -- so, i think this is useful in one way, we have had a heated year and a half headed into this election

and right now in these few days afterwards, let's process what happened. you have every county that joe biden performed well in, every county across the country, there was not one in which kamala harris did better. this is not to dunk on the other side. that decisive win gives us an opportunity as a country. and my advice to our fellow republicans is that after, yes, we won and won decisively, we're done criticizing kamala harris or joe biden over the past. let's turn the page to schchasee future. one thing i loved was him beginning to talk about this golden age in america. i think everyone wants that golden age, a growing economy, and immigration system that works, we now have an electoral mandate to deliver it, and so the republicans may ask, let's put aside our own sense of grievance or vengeance or whatever, we won, let's use it, we're running to something and i ask democrats and those on the left who may not have liked donald trump and may not like him still, just give him a chance and give us a chance to say that, you know what, we have

a chance to unite this country in a way that we have not in a very long time. most people favor economic growth. most people want to pay lower taxes. most people want an american dream for their kidds and immigration system that works and secure borders for our country and don't want their kids lining up to fight in world war iii. that's the opportunity that we have. and i think it is a generational opportunity that we shouldn't squander and so, even to those who disagreed, my ask is give us a chance and we'll do our part by exhibiting, i hope, some grace to the people who we believe were wrong, but moving this country forward, that's what we're looking to do. >> vivek -- >> can i say something, andrew, or not yet? >> absolutely. but i appreciate the point about the grace. >> but not only do i agree with vivek about all of that, the only thing i would say to vivek and the trump people, just be very careful setting up deportation camps and deportation centers. they got people on "60 minutes" talking about rounding up all

the family members, there are people making suggestions that they're going to renounce birth right citizens for moms that are illegal, where the child was born in the united states. i would just say, listen, if we're talking about grace, i would put aside those sorts of things and i would focus on growing the economy, and making people more prosperous. if joe has an issue with me, that's fine. but let's look at the videotape of what the president-elect was saying during the campaign, and let's joe and i sit down and go over that tape and joe will tell me about what he likes about some of that rhetoric. >> if i may, forget the tape of the past, let's talk about some healthy debates and areas where -- >> let's not forget those campaign promises, vivek. we're going to use the american military to -- >> you laid out your view, i

hear you. let me lay out the alternative case for you, on the case of mass deportations and secure, the border, here is the basic premise. if your first act of entering the united states of america violated the law, if you lied to the u.s. government to enter, then you broke the law and we're a nation founded on the rule of serious reform to benefit this country. but i do think that that is a campaign promise that is worth keeping, even looking at smart things we can do out of the gate for voluntary deportations. you could self-deportation. end the incentives, stop funding sanctuary cities, end the usage of the government state, end government benefits for somebody who broke the law entering this country. we will see a huge wage of self-deportations from that alone. >> i think that's the question. by the way, in terms of also healing the country, right, as anthony said, there's still 67 million people who voted on the other end.

how do you bring those people together? there is a question about what kind of grace goes into how the immigration piece of this is solved and that's not to say that it doesn't need to be solved, it 100% needs to be solved and needs sob solved qu -- to be solved quickly but on those edge cases can it be done with grace? we learned during the campaign -- by the way, i'm so glad that this guy is in this country and is here now and is hopefully going to do great things about this country, i'm back to talking about elon musk, but there were questions about his immigration status at one point. the point is how we can do this in a way that actually benefits the country and that people feel good about it. >> sure. >> i think the important point about this honeymoon period, if there is one at all, is to do it in a way where everybody is brought together and with this administration and to also not belittle -- and i'm not suggesting you are as all -- but

to belittle those who may have questions and may care deeply about trying to hold, frankly, folks accountable for what they're saying. i don't think that's too much to ask for. >> absolutely. andrew, a few things. first of all, i will never belittle those who ask questions, we will be the best version of ourselves when we have open debate and are questioned. on the question of grace, let's be more specific about to whom that grace is owed and i have a view on that. that is to americans who already live here, the 67 million people who voted in this election, let's hope that didn't include too many illegal immigrants to this country, but to the people who legally voted as citizens of this country in the election, even on the other side, that's the people to whom we owe grace. on the question of immigration i think first principles could go a good place to start. no migration without consent, consent should be granted to migrants who benefit america, but those who enter without consent must be removed. i think those are fair

principles that most americans actually agree with. >> it's not practical, though, vivek. >> if i may just finish on how practical i believe it is, remain in mexico was the law of the land when trump was president, courts have ruled it is still the law of the land, it just isn't being enforced. anyone who has committed a crime after coming here, automatic deportation. anybody who violated the law while they're here, automated deportation. people who are already in detention who are not even integrated into the communities of this country, who have come over the course of the last year, 12 months is not a time period for establishing roots, easy case, automatic deportation. the question of birth right citizenship, this is one of the most controversial ones and you brought it up, the kid of an illegal born in this country should not automatically enjoy birth right citizenship just as the kid of a mexican diplomat who is here legally in the country if he has a kid on the

soil of the united states that kid doesn't enjoy birth right citizenship, no one thinks he does. the 14th amend amendment is clear on that. the same for someone who intentionally entered this country illegally for that purpose. some of this is going to spark serious debate. >> you're going to have -- you're going to open a pandora's box that's going to be a nightmare. >> i think we can pragmatically and in a principled way, a way that respects people, actually say if you are going to come to this country legally and make contributions to this country and integrate that's what the united states of america is at our best and we've always been, but that is separate from prioritizing those who have entered the country illegally and are exploiting our welfare state. i believe if we are able to do this in a principled way that respects basic human dignity but above all the citizens of this country that's the kind of grace i want to see for all americans and toactually respect their interests whether or not they voted for us. >> anthony? >> quickly, we're going to have a nightmare on our hands. you have to talk about the

practicality of all of this stuff. when that stuff goes down we have a lot of people in this country that want to stay in this country and they're law-abiding, tax-paying people that are in this country. okay? and this country does stand for something, okay? you know, that statue of liberty stands for something. now, vivek wants to say there is a difference between illegal and legal, and i respect that i understand that. >> yes. >> but if you want to put in place a system, let's say we have 10 million people in the country that are here illegally and let's just stipulate that for this discussion. if you want to put in place a system that removes those people, you're going to terrorize the rest of the people in the country. it's not necessary to do that. >> anthony, let me be specific and find common ground here. >> at some point i will get a sent dense in. >> you've had a few. i want to use this to be useful here in establishing common ground. do you believe that somebody who has entered this country even in the last six months who is in

detention should be returned to their country of origin? i do. do you believe somebody that has committed a crime while being in this country should be deported that their country of origin? i do. and do you believe we should not be giving out government benefits of any kind to legal illegally entering this country, i do. i think we're going to have made a leap on tackling this. >> vivek, i have to give the last word to anthony and, unfortunately, we only have a minute, anthony, it's yours. >> listen, i respect vivek and congratulations on the win, but the way he is explaining it is too simplistic. as vivek knows president trump won on feeling and emotion and the culture and the democrats are going to have to examine what they did to lose, even -- you know, even the catholic vote, trump won the catholic vote. i'm just telling you this is the type of thing that will inspire fear in people, it will tip us into a recession, it will reduce

our tax revenues and, by the way, a lot of the people that are here if we figured out a pathway to citizenship for them they're going to look like the rest of the country. a good majority are going to vote republican, some will vote democrat and i will say something -- i will finish this one thing, the best among us choose not to judge human freighty so harshly. we should figure out a path for these people because i'm telling you they help america. most of them do. the ones vivek are talking about, doing illegal things, totally understand that, but there is a lot of law-a bagd people here that are paying taxes. >> we've got to end it. it was a great discussion, i hope we can do it again. >> two on one, joe. i felt like trump, joe.

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it's our son, he is always up in our business. the it's the verizon 5gogue home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall. change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name! i swear to god, kevin! -we told you to wait in the car. everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people. 8:00 a.m. on the east coast, you're watching "squawk box" on cnbc. i'm verona long with andrew ross sorkin. becky is off today. the dow about to get two new stocks, nvidia replacing intel prior to the market open,

sherwin-williams will take the place of dow inc. the chinese government announce ago five year, $1.4 trillion stimulus package but investors are registering some disappointment because the new measures are mainly geared towards refinancing debt. there's nothing in the plan that puts money directly in the hands of consumers or companies. and five people were hospitalized and more than 60 injured after protesters clashed with israeli soccer fans following a match in amsterdam. dutch authorities say the attackers systematically targeted israeli fans and leaders denounced the violence as anti-semitic. the video also shows israeli fans chanting anti-arab slogans in the street at some point. israel is sending commercial planes to the netherlands to bring their fans home. meantime, double line capital question jeff gunlack said he thinks we have one more

rate cut coming in september. mike also raising a concern about the impact of the election on the fed. here is what he had to say. >> if the house goes the republicans, there's going to be a lot of debt. there's going to be higher interest rates at the long end and it will be interesting to see how the fed reacts to that. >> joining us now with more on the fed and the fixed income market let's bring in priya misra from jpmorgan asset management. another 25, we are on the right track? >> yes, and i think a few more. monetary policy is restrictive, if it's restrictive right now it's restrictive with another 25 basis points. any policy mix we're going to get from the new administration we're only going to hear about that late next year. i think the fed is on a steady path as they get closer to the neutral rate i think they can slow down. it could be 25, a quarter, but i

think there are more rate cuts. >> has the neutral range changed ever since the fed did the jumbo cut all we've seen is the long end tick higher, the ten year? >> i don't think it's the neutral rate, it's the fear around the deficit. the deficit is on aunt unsustainable track, i don't think the level of debt is an issue. there is a lot of demand, a lot of money that's sitting on the the sidelines as the field cuts interest rates that money is coming into fixed income, i think makes a lot of sense. you ask about the neutral rate, if we get the policy mix, do we get more tariffs, deregulation? i do think deregulation can raise our star. this is stuff we're going to look at the data and i think the fed doesn't know where the neutral rate is. i'm in the 3, 3.5% camp, i think the fed is lower than that. we are at 4.5. so there's still a lot of room until we figure out what the neutral rate s we have to look at the economy. i would say the labor market is slowing. it's normalizing. then we have to look at the

entire policy mix. the one point i will highlight, a lot of us us are looking at 2016, the inflation and debt backdrop is very different. you have elon musk trying to set up doge to get spending cut or efficiencies. i think even president trump knows that he doesn't have a blank check from the bond market. you talk about this move. a lot of this move is the bond market saying not so fast, we are not writing you a blank check and i think the administration will understand that and try to find some force as they talk about tax cuts. >> the fed doesn't seem to really have a very good, i don't know, record or ability to look forward. so now the election. all the things they're doing were based on things that have already happened. should they be doing anything differently based on the proposed policies of what a trump administration looks like? suddenly it seems like all bets are off.

>> right, and i think jay powell was asked a lot about that. i am sure they're doing scenario analysis but look at everything that's been talked about, deregulation, tariffs, trade negotiation, taxes. do we get fiscal stimulus or do we just get a redistribution? does it come out of efficiency? do you just extend the tax cuts or do you actually get more tax cuts? i think it's just so uncertain that for the fed, you know, i think everyone talks about them being data dependent, they're really outlook dependent. did their outlook change? i don't think so. did the distribution of outcomes become a lot wider? yes. but as jay powell said they're going to look at what are the policy proposals, what's making its way. are the tariffs going through as proposed or is that a negotiating tool? i think we don't know. as they think about inflation growth, they have the dual mandate. we will hear more from them as we know what is the number one priority and what actually is taking shape. >> i wouldn't want to be -- i

don't think i would want to be making those decisions, thank you, priya. >> after this we will get stock picks in the tech detector with dan niles. it's next. don't go awhe.nyer "squawk box" rolling on on a friday morning.

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welcome back to "squawk." futures on this friday morning, looks like the dow will open up 29 points higher with nvidia and sherwin-williams in that dow index for the first time this

morning. i want to get down to the new york stock exchange where our good friend mike santoli is standing by. what are you looking at this morning? >> the broadmarket taking a deserved breather after a real vertical sprint we have had in the last couple of days. look at the two year chart of the s&p 500, this goes back to basically when the bull market started, a very aggressive vertical move we have there at the end. wednesday was all about the market quickly pricing in not just a decisive result in obviously the election, a big volatility crush, then of course figuring out the winners and losers of the underlying policy mix and repricing them really aggressively. it wasn't an all-in rally, it was really about winners versus losers, but the winners gained so much. yesterday was more routine, nasdaq 100 sort of outperforming which is a familiar thing. it brings us basically to the upper edge of this long-term trend path. that's not something that means it's a peak, it's something that means it would not be surprising to have it settle back a little bit.

but these types of aggressive upside moves are not necessarily to be faded, let's put it that way. russell 2,000 of course especially on wednesday was at the center, 6% move higher, did not give back much yesterday. interestingly has been tracking emerging markets and they're both value oriented sectors, liquidity dependent. and this is going back two years as well. look at the russell, just kind of shot ahead right there. this also happened before the 2016 election but the russell outperformance didn't last very long, a six-week, one-time upward adjustment in price and large caps and more stable companies started to take over from there. so still a little bit of a moving target right here. take a look, obviously investment banks and other financials been really huge immediate beneficiaries here. here is goldman sachs relative to the mag 7 etf, goldman all of a sudden making a bid to be -- that's another vertical move that says all of a sudden we're going to have tons of deals, this will flow to the bottom

line of goldman sachs and regulatory relief. we're front loading the perceived benefits in one particular segment of the market. >> mike, shoe for thinking about all of those issues v a fabulous weekend if i don't see you first. coming up, staffing and top business priorities in a second trump presidency. former s.e.c. chair jay clayton will speak with that. later we will speak with key trump supporter joe loans dale. "squawk box" will be right back.

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welcome back to "squawk box." wall street digesting president-elect trump's win earlier this week and considering what it could mean for taxes, regulation and more. joining us right now to talk about all of that jay clayton former s.e.c. chairman under president trump, now independent chair at apollo and a cnbc contributor. good morning to you. >> good morning. >> i think we're all trying to make sense of where all of this goes and the various permutations that could be happening, you saw a great

debate against vivek and anthony scar nuchy on the immigration front. i want to get to the tax front and see where you think that moves beyond creating a permanent state in our tax structure u and whether tips and a lot of the things that were promised during the campaign whether you think that actually happens, especially because i do think there's some anxiety in the bond market about just what our debt and deficits are going to look like so how that all works itself out. >> we all know tax right side on the table because the current tax program expires, so we're going to have to deal with that particularly for earned income. let me take a step back on this. tax policy is part of economic policy and i think something that we should recognize that's going on here is a shift in the type of personnel that are going to come into government. that debate that i saw, which was a very good debate, you have to remember that virtually everyone that was appointed by the biden/harris administration

had no business experience. had no understanding practically of how the economy actually works. so when we look at the tax code and the adjustments that are going to be made to the tax code, i do hope that there is a lot of input from the business community as well as the political community. what is the most effective rate for getting revenue? those are the things we should be looking at. >> those are real questions. >> those are the real questions. >> so then, therefore, the question is you heard a lot of promises during the campaign, there's some talk about peeling some of those things back, maybe if you get businesspeople in they are going to say that one is a good one, that one is not and will create a problem. >> let's start on the easy one, the corporation tax. i don't think you can find anyone who thinks that raising that tax is going to increase revenue meaningfully. in fact, i'm in the camp that any raise may be, you know -- hurt revenue. >> we talked to steve mnuchin

yesterday, he said he'd love to get down to that 15% number he wished he had gotten down to the first time around. does that make sense? will that drive more revenue ultimately in all sorts of other ways to make up for whatever that -- >> i think a good case can be made that the 15% number would increase revenue across receipts. whether it's 15 or 20, what i know it shouldn't be is 28 or 30. >> right. >> because it really hurts u.s. competitiveness. >> i don't think that's on the table at all, do you? >> it was on the table. the american people spoke. >> that's what i'm saying, but i think that's not on the table, right? one of the questions i was going to ask you was a personnel question. you know, i think there was questions about the role that rfk might have in this new administration, does he go through a confirmation process, is he an outside adviser, lots of questions about the elon musks of the world who i think would be part of this efficiency group, if not run it.

is there going to be a realignment of how businesspeople are involved or not involved in this administration and the various conflicts of interest and other things that people are going to invariably raise flags about? >> sure. that is going to come up and, look, we need to have people who understand our markets in the positions of regulating our markets. the idea that you can have somebody who has had an academic-only career come in and be an effective regulator is fanciful. now, should we have academics in the mix? of course we should. >> right. >> but we need to have people like that. and two things on this, our ethics rules are very important, but they shouldn't be pre exclusive of people who have experience. they have been used to preclude people who have experience. we need to take a pause on that. >> so what does that mean, though? people are going to say -- there is a chance that, you know, the president could waive a

conflicts issue, for example, for elon musk and it may be great in many ways for elon musk to be part of an administration and do many of the things that we talked about doing, but at the same time if there are questions in the public sphere about whether he's going to also be a beneficiary economically himself as a result of those things, that also, therefore, undermines, again -- this goes to the trust in democracy issue which actually i think is a big -- not just trust in democracy but trust in the system. by the way, i believe that once of the reasons that the next president of the united states is winning and won the election is because there is a large group of people in this country who don't believe that they could trust the system on the other side. >> i think tuesday night showed that people want elon musk's voice in policy discussions. >> i'm not suggesting it shouldn't be. >> let me make a point. and the ethics rules, you know,

transparency and the like, we should have them, but they should not preclude us from having a person like elon musk who has demonstrated incredible competence, including across media and transparency. >> when barry was here they were talking about i'm sure elon -- when kamala wins i'm sure elon would want to work for her, too. i finally said when we went off air, i said, barry, you don't need to beg for elon to work for kamala, you could just vote for trump and get elon. i said you don't have to twist yourself in a pretzel to get where elon -- it was weird, because they were -- i think the other side was jealous that elon threw his lot in obviously. i think it had a lot to do with trump winning. >> that's a political issue. i'm talking about the credibility of the, quote, unquote, system and trying to have the country feel really good about all aspects of t here

is where i will go with it, swefd lots of conversations and i've been, i hope, outspoken about the fact that you look at various congress people and senators, we have talked about pelosi and others, where they're trading stocks, for example, at the same time that they're engaged or involved in these things and some of them will say that, do you know what, they are in blind trusts or they had nothing to do with it or this or that, but invariably the country, people in the country, conspiratorial or not say i don't believe in this system. i think this is crazy to have people allowed to do that at the same time because it undermines the trust in the system and a part of what we're all trying to do is bring back the trust. my question is how can we have -- and i think there's ways to do it -- somebody who is as great as elon may be at, you know, length the government figure out some of these things but also doing it in a way where parts of the country are not seeing themselves -- that other people are enriching themselves. >> everything you are saying is right. this is a challenge that we should take on and face head-on.

we should say if elon musk wants to spend, you know, 20% of his bandwidth making the country better, we should figure out how to do it. >> do you remember elon when he answered those questions from you or from faber, so totally honestly with no thought about how it was going to affect his pocketbook. do you remember when we asked -- was it barry about jeff bezos? you could immediately say what he did was totally about protecting his investment in the "washington post.." >> i didn't say that. >> i didn't say you did. but with elon i don't think -- he is the richest guy in the world. i don't think it has anything to do with lining his pockets. i think he's sincere. >> there is no doubt that he did not make an economic decision when he bought at which timer. >> right. and when he said advertisers don't want to go to twitter they can eff themselves. >> i don't know what the perception is now, but, look, in the last administration when trump was in charge in 2016 to

2020, there were, i think, fair questions to be asked. i think anybody -- even you i would think -- fair questions to be asked about whether people -- by the way, fair questions about biden, about whether these families were enriching themselves in ways that they shouldn't. by the way, fair questions about the clintons back in the day. so all of these things undermine the trust that the country has and so the question is how can you get -- it's how can you have your take and eat it, too? how can you have like an elon musk or rfk or whomever they are doing the work and also do it without people feeling that somehow something else is happening on the side. >> let's solve the live case. elon musk is a case that everybody is watching. >> right. >> let's figure this out. >> okay. >> and on stock trading, we've talked about this before, i believe that for members of congress there should be a window between december 15th and january 15th that they can trade and adjust their portfolios and then allow them to have hardship and other exemptions during the course of the year. i think that that would address

that issue. >> totally. >> i missed the first part of this because i'm dealing with anthony. if the country can do what we're doing we are going to be fine. it is an airing of the grievances. >> let's get people who know how it to get the engine of this country going into government. >> i'm trying to figure out how to do it so we get the benefit of it and the benefit that people trust it. that's been half the battle on both sides. jay clayton, thank you. >> we're good. it's all good. we can all come together again. we're fine. maybe we will have him back on in the next half hour. coming up, what to watch in big tech from now to the end of vebaru r and once donald tmp mos ck into the white house. investor dan niles is going to join us. stay tuned.

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let's talk about what could be in store for the big tech

stocks once president-elect trump takes office. joining us now is dan niles, niles investment management. founder and portfolio manager. i don't know whether we can get any more definitive clarity or make definitive decisions on tech than on a lot of the things we discuss that we've been discussing in earnest since we found out the results of tuesday's election, dan. do you think you have a clear picture of how it's going to play out with tech? >> i mean, the great news, joe, is that we've already had this before. we had trump for four years, we know what he was focused on, it's not any different this time around. and i think the big thing is that i still feel like an equal-weighted basket of stocks is the better way to go than this focus on tech. if you go back to 2016 after the election, the s&p was up 5% from there through year-end, but the sectors that lagged were energy,

financials, industrials that were up 11% while the s&p was up 5. the information technology sector was just up 2%. so i think -- by the way, the information technology sector had been up about 10% coming into the election. so we know where president trump's focus is going to be and i think an equal-weighted basket of stocks makes the most sense. within tech obviously you have to think about some of the companies differently. i think with elon involved going forward, things like crypto or ai are going to get a lot more focus, so names like nvidia and less regulation, which will help things like google potentially not getting broken up obviously should benefit tesla as they get treated more fairly relative to the big three detroit auto makers. those are names that you think could be a lot more interesting going forward than it was in the past. >> what about the -- lack of a

better term -- the mercurial nature of some of the decisions that it seemed like even the best time around that president trump would make. some of it at times seemed personal against ceos and owners of certain companies. do you need to take that into account? do you think he will -- i don't know, some of the criticism that he may have received do you think that will be different this time around? do you think he has learned from his first stint as well? >> well, i mean, i think trump is trump, he's going to do what he's going to do. i think the great thing about this administration which we didn't have the last time is you have one of the brightest minds of our era, space, president and ev and efficient at running these companies. i think having businesspeople being much more involved in the actual way to make the u.s. better in areas like technology

and competitiveness against other countries where other countries are trying to support their biggest companies. in the u.s. over the -- you know, the prior administration unfortunately big was bad and there was more regulations or attempts to break them up like in the case of google. and that puts the u.s. at a competitive disadvantage against other countries. so for me i feel like trump learning that, hey, we want more businesspeople potentially involved with this to help figure out how to solve some of these problems is a good thing. so i think maybe that's one of the things that was picked up. >> there are -- there are both sides to this as well, i guess, dan, and time will tell. and that's just tech and then we could talk about, you know, retail and, you know, companies that do business all around the world. there's all kinds of ramifications to what a trump

presidency means. we're going to be probably talking about it for the next four years. dan, thanks. >> thanks, joe. coming up, what exactly does trumpenomics look like in the second term? we will break it all down after this.

from extending his first cuts to slapping -- that's the only word he used with tariffs -- to slapping more tariffs on chinese imports president-elect trump is hoping to reshape the u.s. economy. joining to us talk about what could be ahead, this is going to be ugly, this debate, i'm telling you -- not -- allison shrager, a senior fellow at the manhattan institute. you have pictures of adam smith, everywhere, don't you, and frederick hiyak. on the other side natasha from the yale school of management and former treasury department

official and believe it or not you guys agree on most things about tariffs, do you not? you had a meeting in the green room and you were doing a lot more nodding than arguing. >> when i try to be positive about it, i tell myself i always wanted a world where we had lower income tax rates and more consumption taxes. and maybe -- i mean, we shouldn't single out imported goods, but maybe it's a step towards that. >> allison, it's hard to view where we are today like three days removed from the election as anything other than like a pretty significant referendum on inflation. it's a referendum not just in the u.s., it's a referendum kind of around the world and we economists can talk about the rate of change of prices, but like real people are feeling that the price of eggs is four times higher today than it was four years ago and in that environment it strikes me as like pretty wrong-headed and i

hope that this is -- trump has been saying promises made, promises kept. like i hope this is a place where he's like promises not really kept because in that environment, 20% across the board tariffs, that's like the most inflationary policy of my lifetime. >> i mean, 20% across the board, absolutely. of course, i said, like -- i don't know if this is going to happen because he's also singling out certain kinds of income and it should be across the board -- in theory if we did have much lower income taxes that would compensate. of course, i think people hate inflation even if they do have income increases because people hate seeing prices go up. on the other hand, i'm an ardent free trader, always have been, but even china in some ways does challenge me sometimes. i mean, it was bad that we were getting all of our antibiotics from china and the fact is that so much trade from coming just from one country is troubling. as a free trader appeal like the beauty of it is diversification.

i'm not sure a trade war with china is the best way to solve that problem but i think it does deserve some thought and reflection. >> yeah. i think a strategic -- i think there is a difference between a strategic use of tariffs, in particular industries, in particular situations, and across the board tariffs on every country and every industry. >> let me ask you this, though, because we could talk about antibiotics coming from china, we could talk about -- we could talk about all sorts of other industries including chips and what we should be doing here. the question is what is the -- if we're going to do industrial policy, how do we do it and how do we do it better than we've done it plus far? even thecan chips act, it is not clear we are going to get to the other side the way it is structured today. >> i don't think we should do industrial policy. >> but by default we're talking about -- that's what it is. >> yeah. >> if we're going to put tariffs on and not do it across the board we're actually talking

about industrial policy. i'm not saying that's a bad thing necessarily. >> it's a bad thing. >> i don't think we have the code on how to do it properly. maybe it is a bad thing, but then we're left -- >> it's either neutral or bad. >> but we're left exposed. think about -- by the way, putting aside tariffs, think about the consolidation that's happened among doctors by private equity firms in the u.s. is that free market? yes, that's free market. is that good ultimately for the country? i don't think so. >> well, i mean, you could also argue there is a lot of distortions in the market that sort of create that. i sort of -- i think what gets less attention and got a lot less attention in the biden administration is i see subsidies and industrial policies just the other side of the coin of tariffs and, i mean, ideally, again, you know, certainly with a medical profession we have all sorts of distortions that are making private equity -- pushing is towards -- i mean, if we just had more deregulation or allowed people to be doctors maybe that would be a better solution.

>> i am actually quite pro deregulation in particular contexts. >> oh, right? this is cats and dogs sleeping together. this is like the bizarre row world. >> we need to make it easier to build stuff. we need to make it easier for small businesses to start up. i like hear a lot -- and i'm very sympathetic to those views. i think this idea that we shouldn't care that -- sort of your point, allison, that antibiotics are in china, that we shouldn't chair that the u.s. doesn't really have any real capacity or didn't have any real capacity prior to chips to think seriously about chips production in the united states. like that's a matter -- that's not a tariff policy, that's not a sort of particularly -- that's an economic policy, but it's also like a national security priority and it has to be first order. i think chips did a lot of good and i think going in this direction, what i've been nervous about over the past few days is the concern that what is going to happen in a new trump

administration is a lot of the good that's been done on some of these dimensions is going to be rolled back. and i hope ultimately that's not going to be the case, but i think you should be worried about it. >> one of the things that's happened, and maybe you can look at me and i'm trying to be introspective, joe and i have had lots of debates about evs in the united states and the industrial policy that's come across in the last call it four years around trying to create charging stations and the like. one of the things that's been pointed out to me repeatedly -- >> a pretty nice one that they got. >> he said there's just one of them. >> i said there's more than one but there's not many is the point. the question is why is that? and can you make industrial policy actually work, right? >> no. >> the answer is no. well, if the answer is no then i don't know what the answer is. >> i want to know what the manhattan institute calls trumponomics. what the hell is it? >> trumponomics? >> what is it? >> sort of the oprah wintry of

taxes. a tax cut for you, a tax cut for you. >> it challenges us -- >> i like oprah. >> i hear you. but, you know, andrew, one thing you said in the last segment i wanted to kind of bring back, which is the idea of the importance ever like democracy and fairness as kind of a governing principle of how we approach tax policy seems like super important. >> such a nebulous curve. >> no tax on tips is a good example of something i hope trump walks back. no tax on tips -- >> how about if i work until july 1st. >> exactly. >> for the government, is that fair? >> so my view is if we take these sorts of policies where we preference certain types of income in the tax code, carried interest i know another -- of yours is another example -- >> just on the edges. it doesn't help. >> it does help. there is a perception and that's part of what's happening here.

>> but working until july 1st, is that fair in that i should -- it's not fair because i should be paying more or is it fair because i'm actually being taxed too much? >> i think we are in a situation -- honestly you can make the argument both ways. >> then what good is talking -- >> but the good is talk ngt following way. americans overwhelmingly, the people sending trump to the white house, they think that the tax system in our country is unfair and rigged against them. they are correct. and so as trump looks to this tax policy debate that's on the horizon, i hope he does so with an eye towards making the system more fair not less fair. >> lowering -- >> we found a disagreement. let's explore this. >> i think we are largely undertaxed. no one wants to hear that. >> largely undertaxed? >> of course we are. >> this is a bizarre row world. >> tax rates are going down for everyone but high earners. >> how high?

>> among high earners? >> yeah. if i'm a w-2 earner i might be a high earner, 60% is not enough. >> just top 1% of the country. >> top .1 probably. >> for everyone else they've been going down. we can have a discussion about what the right tax level is versus the right spending limit. those numbers just don't add up. >> why 18%. we've always been around 18%, we're spending 23%. >> we've gone down over time. we're 31 out of 38 oecd countries in terms of how much tax revenue -- >> and you can look at -- it's almost inversely proportional to gdp. >> what trump has actually proposed is $10 trillion of unfinanced tax cuts if you take the tcj extensions and no tax on tips. >> we don't need tax gses when have tariffs. >> mathematically you cannot

replace the income tax with tariffs. >> i've argued for a two-year trial period of getting rid of the income tax. jets just see. >> we are replace it with the -- >> there is one way to think about it, joe. you may work the first six months for the government. >> six and a half. >> but the last six months -- >> i would make a hell of a lot. >> you're living so much larger than almost every other american in the country. >> i know. >> and that's the cost of having those five and a half months to yourself. >> i'm not sure that's -- i think a philosopher would have trouble with that logic, but i see what you're saying. did you come up with a name for it. >> for what? trump n trumponomics? i'd say our word is benevolent. >> can't miss interview coming up.

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big win at the white house this week and his economic plans in his second term. i want to bring in joe lansdale, the co-founder of palantir. good morning to you. we've been having a bunch of hot debates here, joe, this morning, we had vivek ramaswamy on with anthony scaramucci, we talked immigration. we just had a debate about taxes. i'm curious from your perspective in terms of sort of number one, two, three on the economic piece of this what you think is going to happen. what you would prioritize but what what you think is going to become the priority and what we're actually going to see. >> good morning, andrew. it was an exciting week. you know, i think number one i think -- i think elon said it best this week, he said america's a team is usually busy building companies in the private sector but every once in awhile reforming government becomes important enough that they get engaged there. i think we're seeing a lot of top talent going in to reform government. what that means is there is a huge amount of cut, a huge

amount of fix, pretty much every regulatory agency has nonsense going on, tons of grift, tons of waste, tongs of things that need to be taken care of. last administration, they weren't ready, they didn't know all they got stopped by what some people call the deep state. this time, i think the a-team is ready and they're going hard. i think that's number one and that's going to be huge for the economy if we can get that right and get this nonsense and waste out of the way. in terms of other areas, i mean, that is every area, right? that's health care. you have the a-team with people like brad smith and others. there's so much we can do to deregulate things in health care and allow more competition, allow this a.i. wave to raise productivity there. but i think this is everything in finance with the s.e.c. and fixing that and allowing new competition there for the first time, because right now, you have to pay lawyers $100 million to compete with the big guys. i think that's there. and anyway, you can go on. there's every area there. for me, i'm really passionate about defense and procurement

there. i think defense is generally a nonpartisan thing in our country, but everyone kind of agrees, you need to be bold to fix it and to allow more competition. >> that's what i was going to askyou. on the defense piece, which is something you're heavily involved in, how you see that getting fixed, given all of the pork projects and other things -- i mean, there's certain things i imagine that can be done around the edges without help from congress, but i would imagine most of the sort of critical component features of what the defense spending and policy looks like is something that you got to get everybody on board with. >> yeah, you know, i think we have a lot of really good nonpartisan democrats on the house and senate arms service committee. i think you have some real talent in this administration and you have -- i think people are ready to be bold and say, listen, we're going to tie things to competitions and to goals and to transparent ways that you're going to involve people from the outside, people from the innovation world. so, i think you're seeing some really good stuff there. i agree. it's not all trump. it has to be both sides, but i think the country is shifting in

that direction, and i think one of the number one things is we're going to get rid of a lot of ideological nonsense. i think you yourself have been a fan of some of ways we spend billions of dollars of government to build infrastructure. a lot of that's not working because it's rife with all sorlts of dei stuff and crt stuff and weird stuff. we're going to be really bold. last time, there were great people in charge who were scared of being demonized. the bureaucracy will demonize you. >> so, here's a question, and i don't know if you heard the conversation we had with jay clayton. i think there's a lot of excitement in this country to see people like elon musk and other business leaders involved in this administration and involved in trying to find a way forward in a way that we haven't in this last administration, which obviously had very few business people in it, but the other piece of it is, given all of the distrust in this country and i think that this election was a sort of microcosm of all

of that, how we can do it in a way where we get the benefits of great business leaders participating in this and really being able to create great outcomes and at the same time get the country and those who don't trust it or think that people are going to enrich themselves in the process or whatnot, from doing that so that everybody believes in it. >> you know, we have to do this in a way where, first of all, i mean, i know a lot of the people who are excited about this, i think it's very important to everyone i've talked to that this is not a crony thing. i think that's -- that's just not the energy. the energy is that this is obviously broken. listen, i have had a bunch of friends on the left who voted differently than me who have texted me how excited they are because they agree the stuff is really broken, so i hope for them the silver lining is we are going to go in and fix a plot of this. we are going to go in and bring that confidence. i think it is a nonpartisan thing that this stuff needs to be fixed, that the government really is broken.

like really is not performing anywhere close to what's possible and we have to make things transparent. we have to tie things to competitions. but andrew, because it just -- because it is so broken, i think it's going to be pretty easy to see that, yeah, you guys were able to cut this huge amount, and everyone kind of agrees it works better. it's not one of those things that's on the margin. i agree with you. it has to be done transparently. that's going to be a challenge to hopefully show off that this is not about making money for any particular business. it's about making money for all of america and making this stuff work better. >> do you paints having a role in this administration? >> i'm not going to go in full-time. i have a lot of friends going in full-time who i'm helping do that, and i'm really excited to be helping out in a bunch of ways, but i'm still building my companies. >> that was what i was going to ask. this happened, by the way, post-world war ii where there were a whole bunch of business people who were involved sort of on the side, some with advisor titles and some without.

is that the way we should think this is going to happen? i mean, you know, do you see elon musk having an official title in this government? is that going to be a confirmable -- a post that requires confirmation, for example? or do you see it as something different? how should we think about these roles? >> i think world war ii is a really great example. i think we should aspire to that. if you look back on our country in the middle of the 20th century, our government was more competent than it ever had been before and a lot of the best talent did go in around that time and american government the next 20 years did extraordinary things. that's when we hired some of the best innovators in the world and did things like going to the moon. i think having that kind of talent brought in, if we could make things accountable, tie things to merit. you had to take pretty hard tests in order to run things in government. the left decided these tests were racist, so maybe we can do things like bring those back and whether or not elon gets

confirmed in exact position or not, i think that's up to him. but he's going to be involved, and a lot of my other friends are going to be involved. >> we have literally 30 seconds but i have one question. do you imagine, given how swiftly some of this may a move elon did say there could be temporary hardship in an effort to get to the other side, if you will, and how do you think americans are going to feel about that if, in fact, that's the case? >> i agree with him. i really hope there is temporary hardship because that means we'll have cut enough. i think we need to be generous with people because we're transitioning out, but there are a couple trillion dollars that we need to cut and that means there should be, you know, 1919, 1920, i think it would be great if there's a small recession but then book, there's a crazy ten years of growth. that's probably the right way to go about it. >> joe, great to see you this morning, sir. have a great weekend. we're coming back after this.

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want to take a final check on the markets. dow with nvidia and sherwin williams in starting this morning up 32 points, the nasdaq off 57 points, the s&p 500, off about five points, and joe, i have some news for you. >> tell me. >> i know you don't always agree with my politics. >> no. >> but apparently, in the great county of burgen county, new

jersey, there's a list of folks who have been written in for the presidential election, and yours truly, andrew ross sorkin, was one of the write-ins in bergen county. i don't know who that person was. i want to thank them for your vote, and i appreciate it very, very much. >> you know, lee cooperman said mitt romney. i'd much rather have you. >> thank you. have a great weekend, everybody. "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david david at post nine of the new york stock exchange. futures wrapping up an historic week and a prior day session that almost got us to records. china stimulus underwhelms again. our road map begins with a big week for investors. dow s&p eyeing their best week in a