it's happening tomorrow on "squawk," becky. >> you cannot set up a tease like that and not deliver. do your dance. >> oh, the dance. >> well, in 75 days we may do the dance. >> 2340, give us a preview, you and bill both, i want you and b. >> we'll start practicing the dance. >> practice up. our thanks to bill. it has been a lot of fun. we'll do this again tomorrow. andrew will be right back there. i'll be back in new york. "squawk on the street" begins right now. we will stand bravely, we will live proudly, we will dream boldly, and nothing will stand in our way because we are americans. the future is ours. and our golden age has just begun. thank you. >> president trump back in the white house for a second presidential term as the street

absorbs the flurry of eos, executive orders on day one. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. futures pretty solid. yields backing off. ten-year at nearly a three-week low as the attention turns to corporate earnings. netflix tonight. road map begins with the trump trade, investors weighing the impact of the new administration, that flurry of executive orders and a seemingly softer tariff stance than feared. >> keeping an eye on shares of apple, under pressure this morning, jeffries warning revenues may disappoint, new data points to a continuing decline in apple sales in china. and of course the fed and tiktok, you know, there is a possibility, would there be a new joint venture, so many different things here. we're going to be joined by the former treasury secretary steven mnuchin this hour. you may recall he had -- was trying to put together an investor group at one point to

buy the app. let's begin with the new trump administration getting off to a quick start. yesterday, the president did sign dozens of executive orders setting the tone for his second term. the street cares about tariffs and taxes. >> right, i was surprised that interest rates point down pretty heavily. listen to some of the guests on this morning, people just say, well, supply, supply is going to hurt, supply is going to hurt. i think that it is regarded as a very pro business regime because of actually the story that the ft just ran about donald trump threatens tax war over u.s. multinationals. i think that's the only thing i heard so far that tells me you can one day raise numbers. i think it is important, david, because we live in a raised numbers, declining numbers world, not in a world where we sit and talk about the panama canal. unless you want to go there. >> so many cross currents right now and so many things coming out of so quickly. what are you -- what is top of list for you in terms of what it

will do for what our viewers typically care about, the movement of the markets? >> look, i think that the only substance in the market is that prices are going to go down because he's going to get us to pump more. and i think that the discipline of the oil companies versus what he said could be -- that's front and center. the oil companies are not into drilling all over the place. they realize their stocks had a halsian moment and now they're being told drill and i don't think they will respond to that. i don't think they will. >> tomorrow, referencing what $50 oil will do to the inflation and the economy. >> peter was very aggressive and he can be very aggressive, talking about how the tariffs are going to be antiinflationary basically and oil coming down. david, when you listen to a guy like peter who is very much a house man, for the president, you do feel that interest rates

should go down. and you feel like all the other guests don't know what they're talking about. >> well, at least in the last few days they have gone down a little bit, right? we have the ten-year at 4.57, along those lines, we were pushing 4.8% not too many sessions ago. >> right. >> when it comes back to oil and gas, the gas side of things, we talk about this often in terms of the need for natural gas here to power so many of the electric plants that are going to be needed because of the a.i. boom and how much power that consumes. there is that part of it as well, isn't there, new permitting, new things that could occur as a result and therefore increased production of natural gas. >> we need more pipe, we're out of pipe to send in natural gas from the permian. the president basically undid that january pause about building new facilities for natural gas. i think that's necessary. because a lot of projects, longer term projects got halted. they will come back. we don't have a lot of what is known as trains. we have -- we don't have enough car loads too be able to ship as

much natural , thank you, rusty brazil for going over this. it just looks like you can't ship more as long as you don't have a lot of facilities. we don't have enough facilities to ship. >> so what happens between now and february 1st? where the president at least envisions a decision on canada, mexico tariffs? >> i think it is going to be kicked down the road. it sounds like there could be some leeway to april. i think that we have to see -- it is very hard to say for instance, the autos, what happens. gm had an upgrade. i found that quizzical given the fact we had no idea what the earnings were going to be. i think the main focus was where's china? it seems like i know when bill ford was talking about andrew, that so far china kind of got off the hook and i think that's another reason why people are pretty -- >> the china market showed a little resilience.

>> right? >> it is kind of early. >> really? >> i think so. day one. >> but it is so hard, i mean, you get up in the morning, you go to -- there is, like, there is just so many of these and every one of them is important. so we aren't even talking about, david wants to go into the fact that the pardons. >> the pardons. the january 6th, yeah, that's news that was obviously very important. not necessarily something that -- elon musk and what he did. >> is he going to be in the west wing or is he going to be across the street? west wing being we know from the tv show and otherwise. if he's going to get it done -- right now doge sounds like we're going to put some guys in, they're going to make a difference, it doesn't work like that. >> no. >> well, the deep swamp, you know, can't clean up -- >> the deep swamp? >> the deep state. but what i'm saying is that the swamp is hard to clear with just

four guys. >> to your point, there was a great deal of coverage and very notable by the -- just the enormous number of -- the richest men in the world. not even billionaires. the richest. and the most powerful as well. i mean, alphabet, amazon, obviously elon musk. >> going mag 7? >> apple. almost all of them were there. when you get invited to the inauguration, you say yes. you don't say no. >> yeah, i think that's true. though -- >> zuckerberg -- >> i was invited once and got caught in a traffic jam. barely got there. >> who invited you, might i ask? >> am i allowed to say it was clinton? >> quincy. >> clinton. i was a speechwriter for al gore. what am i going to do? >> roosevelt, teddy? >> shut up. >> so, what -- >> great new yorker. >> what do you think the lesson is from what people called

oligarch row yesterday, jim? >> look, biden correctly told a story. it is hard to not feel that the billionaires are going to be incredibly powerful. they're all there. they all paid to tribute. it doesn't remind you that they feel they have to. i don't think a lot of these people would have normally been there. and when you talk with them before this, they were guarded about how much they really didn't care for the man. and now they're willing to pay $1 million to go to a ball. it is very different. there are a lot of true believers and then suddenly a whole new group of people who, are they onlookers, are they going to play a role? i don't know. >> it is the classic image of the government is that it is an innovation in technological back water, right? the last to adopt, the last to innovate, it led to lots of inefficiencies, it could be a turn. >> it could be. look at all that happened. when you see the cybersecurity people, they say, look, the technology is many years old.

they didn't keep up. and. >> sometimes that benefits you when you're literally not even using computers. when you're still writing -- the chinese can't hack you when you're writing things on -- >> i never thought about that. >> we had moved beyond that but barely at some of our agencies. >> what do you think about what is the tone of all the executive decisions in terms of business? >> it is positive. of course. >> there you go. >> but it also -- i mean, as we know from president trump's first term, he likes to be in a position where he can potentially have leverage to do a deal. which we'll get to tiktok in a moment as well, which is what he seems to be trying to carve out there. that is often the case. >> when the previous president got in, you wouldn't have known any of the people. >> wouldn't have known what? >> there is no billionaires for biden. he was not into that. >> no, there were no -- >> he wasn't into 100 millionaires. he didn't like them. he didn't like them. he felt they represented the

wrong strain of thought in america. >> right. >> that's just what he did. he was also very proud of how poor he was, which is a -- which is anomalous. we do not have a lot of people who are proud of being poor. >> well, his final words from the oval to americans were, i'm quoting, the dangerous concentration of power in the hands of a very few ultra wealthy people. >> look, eisenhower very famously said that was the military industrial complex, biden waited to the end to state something that i think we're all cognizant of, but he put it very well in terms of just saying, look, people you're going to see are billionaires. >> was there arnault there too? bernard arnault? he was trying to just -- >> top ten. >> bezos, zuckerberg, musk, that gets you. >> who is he missing? some private company people? >> buffett. gates. >> well -- >> that's the top, right?

not sure if i'm forgetting someone. >> that's an interesting list of people who didn't go. >> really? you didn't have glowing things to say about apple this morning, for example. >> apple is going to miss big. i can't believe that anyone is still around who thinks that they haven't got it down enough. the new one, the quarter is going to be bad, but wait until you see the guidance. a.i. is not working. and everyone is missing the fact that china orders have plummeted. everyone, i mean, you could go in the subway, like david does, and ask the average person how is apple doing? and they're going to miss. if everybody thinks something is a surprise, it is not a surprise. okay? >> it is baked in? >> they're acting like it is the commanders. >> you know, that was a surprise. >> yes. but that's not real. real -- i think it is more like the chiefs. where the refs have to be in favor, she's in the box, everybody has to have -- caitlin

is even there. that's a gimme. okay? that's the apple quarter. we all know. is it really a contest? >> aren't the chiefs undefeated in the post season under that ref? >> the chiefs are going to have some records. >> yes, they are. >> the surprise factor is it is surprising they beat the texans. okay, we're done. >> more on apple later. let's move on to tiktok. despite a law that went into effect on sunday, president trump has issued an executive order that would delay a ban of the app for about 75 days to, quote, allow my administration an opportunity to determine the appropriate course forward in an orderly way that protects national security while avoiding an abrupt shutdown of a communications platform used by millions of americans. >> okay. >> interesting, of course, listening to andrew speak to bill ford at the end of "squawk box" there. general atlantic, one of the key owners of bytedance. i talked about bytedance any number of times, the owner of

tiktok. and it is $50 billion in cash, $300 billion market value. tiktok is part of that. tiktok u.s. important, but it doesn't generate nearly in much in terms of profits as you might anticipate. you throw your hands up on this one in terms of what will actually happen. you had a law that was upheld by the supreme court that was passed by -- >> honestly. >> honestly what? >> they ended down, the only time i've seen, 100%. >> agreement, 358 in congress. >> oliver wendell holmes. >> it becomes unclear what exactly it is trump administration can do. they will not enforce the law, i guess, for 75 days. >> can we listen to bill -- >> i think we have a little bit -- >> do we have bill on the national security issue? >> you know, we have -- take a listen to bill ford again, in terms of what this moment represents as an owner of

bytedance for him. >> the problem is we haven't had a negotiating partner in the u.s. government. we now do with president trump and hopefully secretary bessent. we haven't been able to do that for a while. so that's a significant change. and so as i said, the board and management is ready to engage with the u.s. government as soon as they're ready with their confirmed leaders. and the chinese, i think, are ready to engage. >> that's the key. whether or not the chinese really are ready to engage. previously they have been of the -- at least reported, my understanding, i think mr. ford's understanding has been, they're not lowing somebody to buy tiktok. >> no more of that designate nonsense. >> right. he's confirmed. >> just that he -- bill knows him well and i think that this

idea that there is someone to negotiate with is new. there is always been this kind of -- >> i just don't understand exactly what the negotiation could be. ford pointed out that bytedance itself is majority owned by investors outside of china. okay. but the law itself states that tiktok needs to be controlled by u.s. based. >> do we have what bill said, the clip about what bill said about how there is no national security risk. >> from his opinion. i don't believe we have that his opinion that the upreme court handed down, there is a huge national security risk. >> they agreed with congress. >> bill would be contrary to one of the few times that the court was unanimous about national security risks. if you looked at the what they get from you, when you sign up, now, i'm not close to joe rogan. listen to mark zuckerberg talk about hunting with joe, but joe

did reach -- he did read down what you give them when you sign up. and you give them everything. everything. they have access to everything. >> their answer would be yeah, but data is held -- it is project texas, held at oracle servers in texas. doesn't leave the u.s. but the congress believed and why they voted in favor of the law was there was a back door that china could -- >> there is. that's what the supreme court says, it is not even a back door. supreme court says it is the front door. >> supreme court was not doing its own work on the national security. they were simply affirming the law itself, jim. >> i think they went a step further. i think that chief justice roberts just said this is a manchurian candidate. he doesn't use that term. but he meant it. >> queen of hearts. >> you bet. didn't mention angela lansbury. >> great actor. >> we'll get more into tiktok later on this morning. we'll get to news on schwab and costco, horton, 3m, get ready

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a lot of chatter about policy this morning. the s&p gainers list largely an earnings story. look at 3m, opening up almost 5. we'll get to those earnings. schwab on the list, moderna, we'll get to the bird flu vaccine contract. cramer's mad dash coming up, the opening bell. follow the "squawk on the street" podcast.

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7 minutes until we get started with trading on the first trading day of the new trump administration. >> yes, indeed. >> we'll see how stocks react. but let's get to a mad dash now and deal with earnings from 3m, fourth quarter. >> kind of takes no prisoners,

gets it right. the the thing i was shocked, the adjusted gross margin up. 1.2, but the guidance is for 2 to 3%, lots of free cash flow, 760 to 790, so suddenly the stock is back to being a growth stock. when you read what he's saying -- >> a growth stock. >> growth stock, yes. used to be a great growth stock. >> it was, but it has been a long time. >> could be back. one thing that is not important anymore, david, ground water. >> essentially peak contamination from pfas. >> pfas is not a factor in what we're looking at. the restructuring is almost completely completed. i don't know. free cash flow $4.9 billion. this is a buy. even here it is a buy. >> even with that move over the last year? >> this is a new company. very much like the old great both company. i think analysts are going to clamor to upgrade because

they're no longer worried about ground water and they see a path that is faster than it was. >> and also resolved the other litigation? >> yes, it looks like. and they also -- remember, they sold ventum, i wish they hadn't. i like the healthcare business. some of the guys spin off these things and, like, well, no. i liked ken view. >> spin-offs are great. >> just, period, end of story? >> that's all we say at the network now. spin-offs are great. >> what do you think about dupont in. >> and spin-offs are us. >> right. >> that's right, jim. you forgot. >> i completely forgot about it. >> yes. >> i'm still going to root for philadelphia, even if we're spun off. >> okay. >> are we the jersey, what -- >> i don't know. we don't have a name yet. >> we don't. >> we got to come up with a name. >> we have an opening bell though coming up four and a half minutes from now. former treasury secretary steven

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income alternatives and responsible investing. been a wild ride for bitcoin, surging past 109k to a new all time high in anticipation of a possibly friendlier regulatory environment during the new trump administration. since the inauguration, the cryptocurrency pulled back from record highs, though, jim, some discussion yesterday about no mention in the early addresses from the new president. >> yeah, i thought that was curious because i know that you once talked about the reserve, strategic petroleum, like, reserve for bitcoin. i thought it would come up. we heard other coins come up, but not -- >> trump's own coin and the first lady's. >> what do you make of that, jim, the issuance of these memecoins by the president and the first lady? i mean, potentially worth many billions. tens of billions. >> right. i don't know where it really

fits in. staggering. i thought it was staggering. of the things that occurred, of the many things that occurred, that was the one i found very curious. there was a lot of money involved and you don't want to mess with it. why mess with it? everything else was very above board. i thought what was most interesting was, like, it was very pro tariff agenda, pro corporate agenda. steve mnuchin, he understands exactly where trump is coming from and that coin threw me. i would have just preferred to say, look, we're pro crypto. that would have been -- leave it at that. >> let's get the opening bell here and the cnbc real time exchange big board, venue, entertainment venue operator celebrating the recent listing at the nasdaq, holding company for global real estate company. nice breadth at the open, above 6025. >> look, there was a fear

factor. there was a sense of -- another speech where we would basically just take it to mexico, take it to canada. but most importantly take it to china. it was just -- david, china, they must be in china they must be thinking, you know what, maybe we can deal with this man. which is unbelievable. >> yeah. they very well may be. that has been one of the lines of thought in the last few months. almost viewed more favorably, trump administration, than a biden administration, in terms of at least the ability to try to get some deals done. >> right. >> but to which you say, okay, we got to wait and see. >> well, look, we didn't have to wait and see last time. i think he knew immediately where he stood. i do think that claudia sheinbaum, president of mexico, came out this morning and said, let's be level headed about it. she continues to impress me as someone who is saying, look, we

understand a lot of our trade is with you, let's be realistic. let's get in a room, let's figure this out. i think she may surprise. i think that -- i personally believe that president trump likes it when people stand up. i think he doesn't like it when people cave. and i think that president sheinbaum could surprise. >> she did say this morning it is important to keep a quote, cool head. she said that the changing of the name gulf of mexico, only applies to the continental united states. >> she's got her own map talking about what will happen. she has a great sense of humor. she's a business person. she is more of a scientist, but call me impressed. what can i say? stand your ground. >> not unimportant for mexico or canada, we had the trade minister on from canada. >> more fentanyl comes from mexico than canada.

>> it is not clear how much that really is an issue. but the president does seem determined to impose tariffs on canada as well. >> i think that canada is a bit of a surprise. look, because they fought with us in wars, but historically, i think nothing seems to play a big role with president trump, he's trying to rewrite everything. i, for one, think these countries are so fabulous that i just hope that nothing real happens that punishes them. we spent years negotiating a deal and including president trump. he doesn't like his own deal. the panama canal, hegemony, we did that deal. he wants to rewrite a lot that we have done. i think a lot of congress has to get involved. but maybe he -- maybe he has total mind share in congress. i don't know. we were talking about the sec def approval. that's indicative of how -- that's the most controversial

one. >> tulsi gabbard may become and rfk is still controversial as well. waiting to see those. >> i don't think -- i have to tell you -- >> it would appear he's going to be confirmed. >> i think the people around rfk jr. were more hard-line than he is. there is a fabulous piece in "the new yorker," which i usually don't quote, january 6 piece, about processed food and how it hurt our country to the point of being deadly. >> i read that piece. good piece. >> i think that's where he is. >> also a lot of fear about vaccines. >> i know. i'm not trying to minimize that. >> mitch mcconnell who survived polio and will he lead the resistance. >> if i was one of the food companies, i would be very concerned. >> packaged food, nice report today out of td, already losing share. >> oh, my. >> alcohol, packaged food, alcohol, the numbers are -- the

browns, brown liquors, 25% declines. these are -- we never see anything like this. almost like a self-proclaimed prohibition is taking over and the browns were -- bourbon, during covid, it was like give me cannabis, give me glp and i'm just aghast at how quickly this has occurred. a lot of it is the people between the ages of 24 who aren't the least bit interested in drinking as a class. pretty amazing. the two things they don't want, they don't want apple and they don't want liquor. >> apple is down 3, a little over 3%. a couple of downgrades as we mentioned. >> just go by gold. >> any number of other things. >> everything. people like intel, they don't like apple. >> you made the point that's already incorporated in the stock price, but clearly at least there is more to go here. there is the jeffries downgrade. >> by the way, that's to

underperform. >> which is -- >> in jeffrey's terms. >> that gives them a chance, if this goes to 200, wanting to upgrade. he's got the flexibility, a lot of people do. i'm adamant that this is not a good quarter. i'm adamant that the next quarter is going to be guided down. i'm also adamant if you bought it or held it through many of these cycles, you made a lot of money. and i don't want people at home to get out and get back in because that's failed as a strategy for apple endlessly. >> are you a believer? jeffries points to the third party surveys that shows consumers are not that interested in apple's a.i. innovations. >> all i can tell you is is that apple doesn't have to pay for its a.i. and that's what people should be thinking about. the gross margins could be fabulous on a.i. it isn't like apple comes out with anything that is absolutely perfect when it starts, vision

pro. they lower the price, they get better, lower the price. they're not supposed to issue anything that isn't perfect. but a.i. is controlled by another company and they're using their a.i. >> yeah. it is funny, because as we should, we're focused on so many changes that will take place in the trump administration, not just in the next days, but over the ext four years. at the same time, we haven't talked about the transformative power of a.i. and what that's going to mean for society. >> are you shutting me down about that? i was talking about it all the time and you said, jim, i'm really sick of -- >> that's not true at all. i stopped myself from talking about all the bad things that could happen once we -- >> you're talking about tesla. >> no, i'm talking about -- >> carl sagan, did you read the carl sagan piece? >> we're going to get to artificial general intelligence within the next couple of years. >> how about how andrew baited him. aren't we peaking?

isn't it over? he was like a steam engine. >> next two or three years. >> jensen huang, there i go, said over and over again, anything we can do, they can do better. you just got to get into that. and by the way, blackwell, just an air pocket. >> the implications could be fairly significant, jim. >> i think that there are a lot of people who realize that they can do things better that we don't want to do anyway. take a look at the -- do you look at the saturation by salesforce? >> saturation what? >> saturation bombing ads by salesforce. >> what about it? >> they would not place you in a table with shrimp outside where it is raining. >> i've seen that ad. it is a good ad. >> oh, okay.

then what do you think of the other ad about the -- the next ten ads that are coming? how about the next ten ads? >> when we get to art official intelligence exceeding human intelligence, it will be interesting. >> the banks are replacing people in a way that do things that are not that remunerative and costs a lot of money. the banks are probably the furthest along. >> largest buyer of financial technology. >> i think that, yes, i don't know. i'm very pro a.i. okay. and i think it is going to help humans, not hurt them. >> guys, real quick, one mover i want to hit. and then we'll get to steven mnuchin. this company that services and sells -- reconfigures airplane engines, they were the subject of a muddy waters piece back on

the 15th i believe it was. maybe one of the key points was they said that muddy waters, that they questioned sort of how they account for things in terms of their financials indicating whole engine sales for material contributor to the segment, but in fact when they spoke to a former senior fti executive, he thinks 80% of the reported module swaps are whole engine sales. has to go to basically the profitability. they put an ak out this morning. they came back in a number of areas talking -- combatting the short report. take a look at what the stock is doing. they did say they're going to potentially delay their 10k, some board moves as well. don't have time to get into it right now. a very long report. they did not respond in the way at least there had been some hope among the investor base they would. and you can see what it is doing to the stock price. >> their cash flow is not too great there. >> say again. >> cash flow. not great.

>> not. okay. >> not great. >> let's move on to the topic du jour, president trump, he's back in the white house, second term. signed a flurry of executive orders on day one, involving trade, immigration, energy, and, of course, that tiktok ban which has now been halted. the enforcement of it has been halted for the next 75 days. let's bring in a man who has been inside the trump cabinet, certainly serving at one of the highest levels previously, tried to put together an investor group to buy tiktok. he's former u.s. treasury secretary steven mnuchin, joins us now. great to have you. want to get your take on so many things but starting with tiktok, because it is one of the last conversations we had on air, what do you see? is there an opportunity here for you to re-engage, for example? we heard from bill ford, an owner of bytedance earlier, with andrew. i want to get your take on the current moment and how you see it in terms of a potential opportunity for you or somebody else to try and do a deal?

>> first, let me just say it was an exciting day to see president trump back in action and all the executive orders that he signed. as it relates to tiktok, i think it was good that he said that he would delay enforcing the law for 75 days to give him time to review it. i always thought the solution is pretty simple. it involves a group, u.s.-led group investing more money into the company. i think the existing u.s. investors would want to stay in. and u.s. tiktok is a great business. but the more important part is to cut off the technology from bytedance and have the technology all transferred and being separate with the u.s. business. >> and do you, you know, one of the key questions has been whether the chinese government and you know this, obviously, would be willing to allow for any sort of a sale. is there -- do you get any sense or do you know perhaps whether they have changed their posture,

which previously had been that they would not allow for that transaction? >> i was encouraged to see some of the signs coming out of china, they were open minded now that president trump is in office. i think, again, the opportunity here is just to make sure that the technology is transferred. bill talked a little bit about the cloud, but the idea would be to transfer all the technology, so it no longer engages with bytedance going forward. >> right. which you and i have discussed in the past though is not an insignificant undertaking in terms of the lines of code that would have to be redone, the source code. that is not something you think is an impediment to any sort of a transaction? >> i think it is something that can get done. it will take time. and the unfortunate part was that bytedance didn't engage in this while there was time under the law. it clearly will take time to rebuild the technology. the technology can be rebuilt.

the algorithms can stay in china and i'm hopeful president trump, who is the dealmaker can get a deal done. >> it is jim. great to have you on the show. great to talk to you. >> good to see you as well. >> okay. so, let's talk about interest rates and spending. i keep hearing from so many guests because of how much debt we have, because of how much spending we have, interest rates have to shoot up, i know you know rate, i know you know rates from new york community bank. i trust your judgment on this. do rates have to soar under president trump? >> well, first, let me say, i think on top of the agenda has to be government spending. whether that's done by doge or whether that's done more importantly within the administration. we have to spend a lot of money in covid, but since then, the government spending has just gotten out of control and the size of the deficits, we have to get this back in line to a reasonable level relative to gdp. i'm hopeful that president trump

can pass the tax cuts, which will continue to grow the economy. i think ten-year treasury is 4.5%, about right, i think you'll see the fed overtime bring short-term rates down to 3.5%. it may take some time, i'm less concerned about inflation. i think given the size of the treasury borrowings, i think the long-term rates are right about where they are. >> let's talk about the size. every time these days we have an issuance, it feels like the '90s when rates really shot up. we didn't have buyers, we couldn't find them. is there a possibility we could see, let's say, 6% on a 30-year without a problem? >> unless we have much higher inflation, which i don't expect, i expect that inflation is under control, and will come down over time. i think with the positive yield curve, if the fed can lower short-term rates, which is the

expectation over the next year, then i think the market can observe long-term treasuries. they want to see a positive yield curve and that's something we need to see more in the market. i don't expect ten-year treasuries to go over 5%. it would have to change a -- it would have to be a big change on the fed and it would be a big concern. >> well, steven, everything i just heard tells me you just got to buy stocks anytime they come down. that's a fabulously bullish scenario you just outlined. >> well, i think it is. i think clearly you see a completely different economic agenda with the trump administration. i think 2.0 is going to continue on in a very strong way. we should touch on tariffs a little bit. i know it is the president's favorite topic. but i see u.s. earnings being very bullish over time. having said that, some of this

a.i. stuff has gotten ahead of itself and some of those valuations we may see adjustments. >> you do. you think so. what do you think about when you say something like that, steven? >> well, i just think there has been massive spending on a.i. i think a.i. is going to be transformational. no question it is going to impact everything we do. but i think the economic model for a.i. to spend -- to support this massive capex spending that we're seeing is something that is concerning to me. it is going to be very big use of energy, you see massive construction of u.s. data centers. there is going to be tremendous demand for additional a.i. but i think we're going have to wait and see what the economic impact is and how people make money on it. >> right. although there is an opportunity, isn't there, still in data centers and potentially financing them and clipping a coupon so to speak as an investor like yourself? i don't know if you're looking at it, i can't imagine you aren't.

>> we are, we are. we're very interested in particularly u.s. data centers, the markets that have access to energy, whether it is because of a.i., because of the cloud business, that's definitely something that is very interesting. >> let's talk tariffs, since you mentioned it. are you surprised that canada seems to be one of the focuses of the trump administration? >> well, first, let me comment, i was pleased to see the president's eo on trade basically instruct the commerce department, treasury and the ustr to analyze the trade issues and come back to him with recommendations. i think the china deal has to be on the top of the list where china has not been following the commitments they made. i think he's going to have to look at whether he wants to put on across the board tariffs as he's talked about, which is a form of a consumption tax on foreign imports. if that money was used to pay

down debt, that's one thing. it may be a source of funding for the tax bill. i think as it relates to mexico and canada on february 1, i hope that mexico and canada come to the negotiating table and do whatever he wants them to do on the immigration issue so that those don't get implemented. i think that would have a very negative impact on many of our economic issues and supply chains, particularly with mexico. >> there are some who seem to be optimistic somehow that nothing has happened in the first 24 hours with regard to china that indicates there is a deal to be done. where are you on that? do you think that there is a deal to be done with china or are your expectations more toward there will be significant tariffs? >> i think president trump has been very strong on saying that he wants to implement tariffs. he wants to use them to raise revenues. he's talked about the external

revenue service and in essence we have an external revenue service. customs and borders collects the tariffs. they could break the group out of that and name it the external revenue service. it is not the irs that does that. he said in his inauguration speech yesterday again, it can be a great sense of wealth. i think the sooner that he can give clarity to the market as to what we expect and the plan, the better off we'll be. >> steve, i know you always have been concerned about social issues and the idea of equality in the country. it has been one of your hallmarks when i've spoken with you. what do you think about what former president biden talked about in terms of the oligarch society and whether that is something we should be concerned about as a nation? >> look, i think that president trump in the first term was very pro business. and you can see this in the second material.term.

i think it is great that the technology companies are coming to the table and looking to work with the administration in a constructive way. these are some of our greatest assets and some of our most important businesses. and i think it is very good that there is a working relationship with business. >> and finally, steven, to come back and stand on tiktok if we can, you pursued it some extent and i assume that effort went on hold. have you resumed sort of putting together potentially having the money available should the opportunity arise? >> we only put it on hold because it was clear that china was not willing to negotiate. and now that president trump is willing to look at a deal, obviously we're going to follow this very closely over the next 75 days. and we would be very interested in investing in the business. it is a terrific business. and we would have a technology plan to rebuild the technology. >> right. i mean, you're not alone, obviously. yet the -- the price tag could

be enormous, couldn't it? based on the opportunity there for tiktok u.s. and others around the world. >> i think tiktok u.s. is worth a lot of money. it is a great business. if it is managed correctly, and it can grow into other areas such as e-commerce and expand in the u.s., it is a terrific business. on the other hand, i think that it does have national security issues. there is no way that china would let any of the u.s. companies operate in this way. elon commented, can't operate in china. i think this is part of -- there has got to be a level playing field between the u.s. and china, economic relationship. >> yeah. all right. to be continued. and always appreciate you taking time. thank you. steve mnuchin, former treasury secretary of the united states. >> excellent. so bullish.

incredible. market guy. knows markets well. >> thinks a.i. that was interesting. >> i thought that was interesting. >> that's a key question this year we entertain many times, hundreds of billions of dollars being spent in capex by our biggest companies, hyperscalers and will we see a return on that and whether investors will start to push back. >> do you want to be part of the industrial revolution or let it go right in front of your face? >> as we were talking, trudeau on the tape saying the golden age of america is going to require canadian resources and he's not against dollar for dollar tariffs. >> dollar for dollar tariffs. okay. we'll take your -- we like their water. their oil. >> their lumber. when we come back, ceos of the world economic forum in davos, sara eisen is there. good morning, sara. >> good morning, carl. good to see you guys. world leaders, ceos, it is a different vibe here in davos with president trump back in the white house. i'll share some takeaways and

conversations from the ground. we will also do a deep dive on the u.s. consumer, powering the u.s. economy with two top ceos in the space, the ceo of pepsico, and the ceo of gap, about what they're seeing right now and whether the optimism that is shared by a lot of business leaders here around the new presidency will translate into higher consumer confidence and spending. that's all when "squawk on the street" comes right back. stay with us.

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i think that the number one way that musk can affect the budget is medicare. that is the big one. you can't do interest. you certainly -- i don't think you can do social security. but medicare, there is a lot of

fat. i thought that way after i came back from san francisco. that is where i think he's going to make his most -- >> we're going to start looking for the rubber meeting the road. >> oh, yeah. some stocks you dot wan'nt to own. i'm going to talk about them tonight. >> look forward to that. see you tonight. "mad money" 6:00 p.m. eastern time. don't go away. ♪♪ you'll get better when you're not blamed for a condition you can't control. ♪♪ you'll get better when your pain isn't minimized, dismissed, forgotten. we will never stop trying to get better. because when medicine gets better, all of us can get better. ♪♪

good tuesday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with david faber post nine of the new york stock exchange. sarah eisen from the world economic forum in davos. she'll bring us the latest. markets adding to gains after a good week last week. treasuries coming back to about a three-week low. three big movers we're watching this morning -- 3m a top gainer after beating top and bottom line estimates. two firms downgrade apple, both firms get bearish on iphone demand. then there's bitcoin hitting some record highs before trump's inauguration, holding 100k. we'll get more on crypto coming up. meantime the president taking office with the most expensive stock market in history. american stocks 83% more

expensive than when bill clinton first took the oath 145% more than when obama began his term, and four times reagan's starting point. there's even a third price with the start of trump's own first term. let's talk about how to position. lizzie ann saunders, charles schwab, chief investment strategist. good to have you. >> nice to be here. how are you, carl? >> interesting morning for us because there's so much policy discussion even as we're in the middle of getting some corporate commentary about the quarter. i wonder how much uncertainty you think that feeds into at least the rest of january. >> well, we may have alleviated some of the tariff-related uncertainty in terms of what got announced on day one. but it was even later in the day on day one that the administration came out and said they're still planning going ahead with tariffs on imports from canada and mexico. so i think that's the one page from the 2018 playbook that is relevant this time is the

uncertainty with how and when these policy announcements get made. but you know, it helped a turnaround in the equity market. you've generally been seeing the dollar trending lower, at least over the past eight days since the recent peak. and on a day like today with deals down sub . % on the ten year is giving a lift to the russell. the uncertainty has not passed us. >> are you surprised at the way the bond market has taken tariff headlines or the lack of headlines and processed them into lower yields? >> well, that's just a day's action. i think we have to remember what although volatility has been subdued in the equity market, at least as measured by an index like the vix, it has not been subdued in the fixed income side of things if you look at an index like move. so i continue to think that we're going to see volatility in treasury yields tied to policy

as well as the actual incoming data both on the inflation front and on the employment front. and i think that is a feeder into equity market behavior. we've got different thresholds that tend to cause problems for the overall market versus, say, just small caps which have that heightened sensitivity to move the needles because the smaller companies tend to have more variable rate debt. so i think the day-to-day gyrations are going to be with us for a while. >> i assume you think that pain threshold on the ten is around five, it was interesting to hear the former treasury secretary with us a in a moment ago knowledging maybe the administration -- thinking maybe the administration can work that down to 3.5. >> how? you know, that's -- i think that's the obvious question is how one can go about doing that. all else equal, the combination of proposed policies on immigration and tariffs, all else equal, puts downward pressure on growth and upward pressure on inflation.

if we look at the immigration side of things, the constraint on work force growth, that also is all else equal, puts upward pressure on inflation. it's hard to envision a scenario like that if it comes to fruition, allowing for yields to move down from call it 4.5% to 3.5%. that may be the stated goal, but i think there would have to be a change in some of those policies. >> finally, liz ann, do you think the tax issue in the scope of the whole year will be the most important question for equities? >> possibly, but not to the same degree as we saw the benefit of the 2017 tax cuts accrued to the equity market to the economy because we're now just talking about the extension of the 2017 act, not a whole new round of tax cuts. and i think that's why you may be seeing a little bit more muted action on part of a lot of the survey data with regard to

tax policy. i think there's less optimism because we're dealing with an extension, not a rash of brand new tax cuts. >> liz ann, it's going to be interesting in the coming weeks. look forward to talking again soon. thanks for coming on. >> my pleasure. president trump did hit the ground running. he signed dozens of executive orders yesterday. this was just shortly after he was inaugurated. megan cassle has a closer look at the orders that may become very important for investors. what do we know here? >> reporter: hey, david. good morning. almost four dozen of these executive orders signed yesterday. but the meatiest ones fall into three themes. the first being the economy. there's some deregulation on the energy front, things like ending the l&g pause, cutting ev mandates that president biden had put in place. there was an order to delay enforcement of the tiktok ban by 75 days while trump is looking for china to sell at least 50%. and there was the somewhat surprising move on trade policy ordering a review of trade deals

and relationships. that's due out april 1st. but stopping short of imposing any tariffs. trump later did say that he is look at february 1st next week to potentially phase tariffs on canada and mexico. so no action on that front for now. that does not mean that it's not coming. there was still a lot of talk on an external revenue service and tariffs making the country rich. so the objectives remaining in place. we also then saw a slate of moves targeting the federal bureaucracy. trump formally established doge at the department of government efficiency, ended telework policies for federal employees and stripped job protections for career officials. as well and he put in place a freeze on both hiring and regulation. and then the third becomet is what i would call -- bucket is what i would call global withdrawal, almost isolationist in moves. trump pulled the u.s. out of the paris climate accords, the world health organization, and the oecd global tax deal. he's ending asylum trying to end birth right citizenship. and he issued a 90-day pause in any foreign development

assistance. sort of a striking split screen here with davos going on this week, america first was threaded throughout every piece of these actions signed yesterday. and then finally, one last thing to flag, the white house has told us to expect what they're calling as a big infrastructure announcement later this afternoon. so more to come -- on that fron. guys? >> big infrastructure, remind me of the first trump administration. every week was infrastructure week. i notice the shares of electric vehicle makers, tesla but lucid and rivian are down. is that because -- the paris climate pulling out of that, or the rollback of ira? >> reporter: it could be any of those things. also ending tax credits that were incentivizing people to go with electric vehicles, all of that being off the table. i think it could be any one of those. but what we know is there's going to be much more to come on this front. there could be further regulation ending ev mandates is what they're calling it for now. but how much more does he want to get back in to boost the

american automakers that might lean more heavily away from electric vehicles. so much more to watch. i think it's a combination of all of that. >> look forward to some more headlines after the close. thanks. busy morning in d.c. busy morning in davos, as well. sarah talking with the world's top business leaders at davos. and i know one of the main topics, at least in this early part of the week, is a.i. >> reporter: hey, i got to say there's a lot of optimism here in davos from the world leaders and the ceos around the trump administration and some of the policies, pro growth, bringing business back to the table to have a seat, deregulation. the things we hear about from ceos daily. i think that has spread. and interestingly, i came in thinking that some of the global ceos would be more worried about tariffs and the impact on global growth, and in fact i haven't heard that much discussion around tariffs. it's more on will those pro-growth policies and those sort of wave that trump is

ushering into the u.s. rub off on places like europe and the uk. i know deregulation isn't necessarily what you think of when you think of europe, but looking at the excitement that is building around these trump policies and how that could really change the way governments look at their own policies around the world. another major source of optimism here in davos this year is a.i. now in previous years it's all about hopes and dreams and perils of a.i. this year it's not. we're there. it's not experimentation phase anymore, it's companies utilizing generative a.i. and how they're actually saving money, productivity savings, and using it for growth. that was the subject of a panel that i moderated this morning. and it had the ceos of aramco and pepsico and santa fe and accenture and aws and gave us a peek into the way that companies are using a.i. and how they're going at different speeds. one of the moments that stood out to me the most was aramco's

ceo. talking about how the energy company, how much he has spent, billions of dollars, and re-skilling thousands of workers to get costs out of the process and increase efficiency around drilling. here's what he said about how they use gen a.i. -- >> productivity of -- used to run logs and things, in areas where we cannot run all of these logs, to see the service in terms of -- now you can use a.i. to predict machine learning in terms of predicting failures and all of it. we can predict in our win because there is a lot of data that comes. a.i. is helping us to transform the way we are managing all of these equipment and reducing the downtime, increasing our efficiency, reducing our carbon footprint. and this is transformative, as i said, for our industry.

>> reporter: industries are obviously moving at different speeds on this fact. sanofe said the drug discovery holds promise when it comes to a.i., but it's going to take years yield results. he's positioning his company to be first when it comes to that. and i also had a chance to speak with the head of aws, matt garman, about where we are in the technology. there have been a lot of questions about whether after really rapid growth gen a.i. development has hit a wall. here's what he says about that -- >> the technology is moving at an incredible rate. i don't know that we've seen a technology progress as fast as it has. i think one of the challenges of that is it's hard for everyone to keep up. you know, i think everybody externally loves to point that -- maybe a.i. is hitting a wall. no. it's not. and it's just because -- if you look at any of how these technologies evolve over time, oftentimes you'll make a lot of progress on one path. and then that path will run out

of steam. then you just find a different path, and you continue from there. >> reporter: as you can see, ceo of pepsico also on that panel talking about what a game changer this has been for the supply chain and productivity. after the break here on "squawk on the street," pepsi ceo will join me here at davos to talk about that, the consumer, and a lot more. we're back in two minutes. stay with us. [sfx: wind, rain and rolling thunder] with the vision to see what's possible and the grit to make it happen, morgan stanley can help create the future only you can see. [crowd cheers] [music out]

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welcome back to "squawk on the street." i'm sarah eisen live from davos, switzerland. nice to see you again. >> nice to see you. >> i was talking about the optimism that i think is palpable here on the ground around a new trump administration. for you, did you expect it to yield higher kump er consumer confidence? >> i think the trump administration is going to be pro growth. it's going to help consumers feel better. i think consumer confidence is a factor. and also for us as companies, deregulation will help us, hopefully, you know, there's a reduction of taxes, as well, that would help us operate more efficiently in the u.s. the u.s. a critical market for us. everything that happens in the u.s. impacts pepsico on a grand scale. >> where do you think deregulation will help?

>> i think deregulation in general is good for business. we're having too many bottlenecks for expanding our business in some particular areas, from permitting to others. i think reporting is also an opportunity as we simplify our company. so we believe that deregulation will help us be a more efficient company. with that we can realize that money into other parts of the business. >> how is the consumer doing? you mentioned that you're hopeful that will boost confidence. growth has been pretty solid. how do you characterize state of the consumer right now? >> we're optimistic about the consumer in general around the world. we're see could inflation decelerating in most of the markets. so okay, it's 2% to 3%, that's much lower than it was in the past. we've seen wages continue to grow. unemployment very low across the board. so that makes us feel confident about the consumer. however, we're seeing in the u.s. particularly -- and some other markets globally -- bifuration. we're seeing part of the consumer base that is doing very

well and they're obviously spending in services, spending in entertainment, spending in experiences. but we're seeing other parts of the consumer that is not doing so well. i mean, and this may be in the u.s. 3 0%, 40% of families struggling to get to the end of the month. clearly for companies in the consumer space like us, we have to have multiple strategies, we have to continue to give value to consumers in terms of portion sizes or entry points or value packs. at the same time, we need to continue to innovate because the consumer is ready to pay for more when you offer functionality, when you offer convenience, when you offer health and wellness opportunities. so we're playing them both. and we're optimistic. we think that as a company we've always been good at evolving our portfolio, evolving our marketing practices, and that will do well for us. >> you mention that food inflation is back. are we back to normal levels? you and all your competitors were at this place where prices were rising double digits,

packages were shrinking. is that over? >> i think it's over. it's over actually -- '24 we had much lower inflation, raw materials. still labor was higher. i would say we're in a place where we can manage this as we were in the past through productivity. we can reduce inflation in our cost structures. and therefore, we don't need to increase prices in this -- in those, and i think that will help consumers. obviously consumers will get used -- they are getting used to new price levels, and we can see in some segments that consumption is picking up, well. >> i noted your optimism around the trump administration. however, rfk jr. will oversee the fda. it seems like he's out for big food. what do you expect? >> i think -- listen, the way we think about it is we've been living transformation for many years, sodium reduction, we've been leading sugar reduction, we've been leading fat transformation.

we've been leading artificial color removal. we don't have dye number three in the united states -- >> you don't -- you don't have red dye? >> in any of our products. now what i would like to have and we do this with any administration, how do we work together with the administration in a -- i would say science-based fool policy, and also pragmatic in the execution, or we can move the american food industry to officials, i would say a very -- set a very high started. can we do this in three years, can we do this in maximum four years? >> can you do that? >> we can as pepsico, but i would love the whole industry to move to that level otherwise it would be an unfair situation. can we work with the government, and we will put our best efforts in having pragmatic science-based food policy that moves the whole industry i would say out of home consumption and in-home consumption to zero -- i think it's -- >> what about processed food?

he's also complained about processed food and could make changes when it comes to food aid or school lunch programs. wouldn't that be painful? >> i think along with the artificial removals, we think we should work on transparency and communication. i think there has been very not science-based communication about what is ultra processed food. i think we cannot misinform the consumer and lead to kind of negative perceptions on anything that is not fresh. i think the world need packaged food. the world needs high standards, safe and quality, high-quality food. and we need to look at consumers. i think we need to tell consumers what is in the products, educate consumers on how we use it to cook our foods. and make sure that they understand that products that are packaged don't need to be ultraprocessed. i think that is a complex communication that i think we need the government, we need the whole industry, and we need give

the consumer fair information. >> is your -- to be clear, how much of your portfolio would you consider processed versus ultraprocessed? >> i think most of our portfolio is processed. and we have also fresh products. we have gazpacho brothers, we have -- we have hummus. like we have such a broad array of products that gives consumers options for all the occasions around the day and approach available throughout multiple reach points. our ambition is to be always everywhere, and we want to give consumers choices across the day. nutritious, tasty, convenient, and that's the essence of our -- >> is it possible to ban processed foods from school lunch -- >> it's possible. we have to have high standards for school lunches. and we have k-12, a lot of products that participate. products that have very low sodium, products that have whole grains could products that are very nutritious. so we are in schools, and i

think we will continue to be in schools. >> food stamps? >> food stamps, as well. i think consumers should be given the choice to consume any products. and i think any product fits in any diet. we're emphasizing portion control as a key element of consumption. i give you data about five, ten years ago, most of our portfolio in the u.s. was in large snacks. today 70% of our ortfolio is in small bags, multipacks or single serve. consumers are moving in their choices, moving to smaller portion. i think our products belong in any product in any day of -- along with continue to change the portfolio to healthior products to products provide convenience, products that combine nutrition and convenience. so again, it's a -- something we do organically, something we've

been doing inorganically. like saabra has a chain in many meals or brands that give us the opportunity to expand beyond snacking into meals, which is one of the strategies that we're following in the last few years. >> before we let you go, just on the news that recently broke, the parting gift from the biden administration to you is the ftc sued you for what they call giving unfair pricing to one big box retailer versus others. you have come out strongly against it, said that's not what you do. i just wonder if this is something you expect to be reversed in the trump administration? and how you're preparing for the fight. >> obviously we feel that we haven't broke any law. we are very strict with our commercial practices and legal practice. what makes us -- what's encouraging is the two commissioners in the ftc, the two republican commissioners, said it was the worst cases they have seen in many years.

>> i saw that. >> had really no substance. we believe in the legal system, and we'll obviously defend ourselves. and you know, i think common sense will prevail. >> ramon, thank you so much for the time in davos. good to see you always. we're not done, don't miss the ceo of gap, richard dixon, he's going to join me later to talk about the turn around that he has engineered in all four of their brands. >> and what a turnaround that's been. fascinating. see you in a bit. as we go to break, watch horton today. the homebuilder beats estimates, reaffirms the full-year guidance. not exactly helping the stock this morning in a fairly constructive take. dow's up 250. just off a session high. stay with us.

welcome back to "squawk on the street." i'm seema mody with your update. the dismissals of january 6th-related cases are under way as incarcerated rioters are set to be released from jail and prison following sweeping pardons from president trump. more than a dozen have been filed so far, signed by edward martin, a january 6th defendant

advocate, who is acting u.s. attorney for washington, d.c. at least two new wildfires have broken out in southern california as meteorologists warn winds could hit up to 100 miles per hour today in the mountains and 70 miles per hour on the coast. the palisades and eaton fires are burning in los angeles county and are now 63% and 89% contained. vice president j.d. vance swearing in marco rubio as secretary of state. he is the first of president trump's cabinet picks to take the oath of office. rubio said the president's primary priority will be furthering the national interests of the u.s. and making the country stronger, safer, and more prosperous. carl, back to you. >> all right. thank you so much. checking on stocks about an hour into trading here. dow up almost 300. s&p at 6,23, a bit above the highest level so far of the year. let's get to dominic which you with more. -- chu with more. >> we've raised the ceiling ever

so slightly on record levels for bitcoin specifically on the cryptocurrency. on an interdate basis. we hit over 109,000 over the course of the last day, day and a half or so, on the inauguration day. if you look at bitcoin prices, currently at 03,647. we hit a new ceiling level. still in the same band. bitcoin prices pulling back after the intera day level. that's creating buzz for the stocks in the ecosystem. if you look at the names we closely relate to the move in bitcoin prices like, say, microstrategy, down 6% now. coin base global, narrow holdings, riot platforms, moved here higher and backed off with the pullback in cryptocurrencies generally from the last couple of days. then just one thing to point out, some of the smaller coins besides bitcoin also see a move higher to some record levels. solano was one, 239.50.

the reason i want to highlight is it solano is the home system for that trump meme coin that came out over the last few days. hit a fever pitch going there. that coin's value has dropped a little from the highs, markedly so actually. but solana hit a record because it's the network that that trump meme coin was on. we'll keep it on that and other alt coins. back to you. >> all right. still to come, the outlook for energy under trump 2.0. what it means for the sector as you got west texas at about a two-week low. don't forget you can catch "squawk on the street" any time. just listen to and follow the "squawk on the street" podcast available now on spotify, apple music, and more. we're back in a moment.

big morning the hill for the president's treasury secretary pick, scott bessent. emily wings has the latest.

good morning. >> reporter: good morning. yeah, the key house committee has gone -- sorry, key senate committee has gone ahead and approved scott bessent's nomination for treasury secretary. you saw all republicans and joined by mark warner and maggie hassan go ahead and support scott bessent's nomination. he has cleared one hurdle. he will be going to the senate floor. the senate trying to get through as many of trump's nominees as quickly as they can. certainly there's some controversial ones within the bunch where we're wondering what's going to happen. that's not the case with bessent. he's expected to go through easily. i think at this point we're just keeping our eye out for news on exactly when that's going to be, exactly how many more democrats might support him. and then after that, it seems like he's going to be easily falling into the new treasury secretary job. guys? >> all right. thank you. emily wilkins. president trump declared an energy emergency aimed at unlocking powers to jumpstart

production. he issued a slew of executive orders in the energy industry after he was inaugurated. for example, resuming processing export permit applications for new lng products, pulled the u.s. out of the paris classmate deal. suspended offshore wind power leasing and revoked president biden's 50% ev target, 50% of sales be ev. here to talk more about energy regulation in the new administration, again, capital founding partner. john, let's start with an emergency emergency. is there one? >> there's no acute shortages at the moment, so it's curious descriptor of it. i do think that there is a lot of -- lot in the industry who felt hemmed in by the biden administration. there is their liberation to move forward if they so choose. in terms of acute supply situation, no, we don't have that thankfully. >> you know, you -- you put it interestingly, the if they so choose. what are they going to choose?

because we've had many conversations here at the desk that it's not clear that even if you can produce more you want to. what do you think? >> it is not entirely clear to me either, david, in that i mean i've seen estimates out there for a potential growth of three million barrels a day here for u.s. crude oil production. it is just hard to see that. i can tell you that some of the permian production, some of the fracking production giving off increasing amounts of water and byproducts. that's an issue. also, too, with the consolidation of the industry, i don't see exxon leading the charge necessarily rushing in to poke more holes in the ground. particularly with the precarious oil price where we're at. we are holding about 70 pretty consistently now for a number of months. but the ability for that price to head rapidly lower is there. and now all of a sudden you are impacting your rate of return if any in the fracking space.

so i think we need to be, you know, don't necessarily pop the champagne corks here that we're going to get a rush of new production into the system. >> yeah. interestingly the three million additional barrels was part of incoming treasury secretary bessent's plan. so let me -- i hate to say it -- drill down on this with you for a minute. the permian, you made this point. chevron, exxon, ten years ago was kind of different in terms of all the smaller independents. what's changed there, and how is that then going to change the equation given that's our saudi arabia for lack of a better term? >> no, it is. they're awesome operators, what they've done with the whole region is just incredible. you know, the late president carter was actually made fun of to a degree talking about getting oil from shale rocks. everybody thought he was out of his mind at the time. i can tell you that 2020, the price collapsed, the negative oil price set the industry back several years.

avoidance by banking industry and supporting and financing drilling. but also, too, just the rate of returns just weren't there. it was sort of a return of capital, if you were lucky, as opposed to rates on capital, the new emphasis. with the consolidation and everything else, we sort of like to say have the adults in the room and it's not just the wild-eyed speculators out there saying to go get more barrels out. there's definitely some accountants in the room now who are saying let's hold off, wait to make sure that we can get our money back and then some as a result of all the policies that are out there. these are a big overhang from opec, too. if they were to open the taps a little bit as we saw. we would see prices as well that would hurt the economics of the permian region and other fracking industries. >> yeah. finally, let me end with natural gas. we've talked about it powers a lot of electricity in this country. there's an enormous need for

electricity given all the data centers that are going to be running large language models and the like for a.i. is there a significant growth opportunity there perhaps under the trump administration? >> there is. i think for both pipelines and obviously export facilities. what i will say is this -- while the industry at president biden's pause, i'm concerned if the exports ramp up to material degree, u.s. consumers will find themselves competing for those molecules and those molecules could become quite pricey. so this is another case of there will be winners and there will be sers, but we should definitely see more natural gas coming to the market as a result of the trump administration, particularly as more and more pipelines get green lighted, permitted, if not encouraged. so yes, that is going to be a boom industry for sure under the trump administration. >> all right. well, we look forward to revisiting it with you over

time, john. always appreciate it. thank you. >> thanks so much. still to come this hour, china's reaction as trump takes office. we'll head live to beijing after this. don't go away. oh, it's cold outside. time to protect your vehicle from winter's wrath. of course, the hot sun can be tough on vehicles too. you need weathertech. laser measured floorliners and cargo liner will shield the carpeting from sand and snow. for your interior, there's seat protector and sunshade.

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hey, eunice. >> reporter: chinese exporters are implementing various strategies to adjust to president trump's tariff threat. as i found out in the manufacturing belt of guangdong. hoping to beat trump's tariffs, furniture seller harry lee is doubling the number of products he ships to the u.s. and storing them in warehouses there. four out of five of his tables and other furnishings are sold to american consumers. lee expects the stockpiling will force him to raise prices, as much as 10%, even before the tariffs. "i have to ship them in advance and take on more rusk," he says. this water purifier maker is scouring the globe to supply the u.s. by creating a new production base outside of china. his company, tesran, is considering malaysia, vietnam, and mexico, but is leaning toward dubai even though it will increase his costs by 30%

compared to china. "the domestic market is too competitive. we've been waiting to upout of it for some time," he says. trump's tariffs gave us the final push. this man who makes skin care products is worried he might have to stop exporting to the u.s. completely. his goods got hit with tariffs north of 20% during president trump's first term. with his thin margins, he's hoping he can pass on the cost of any tariff to his customers. "in the past we all felt the u.s. market was the greatest market that everyone wanted to sell to. but with all the uncertainties and unfriendly decisions, the u.s. is less attractive now," he says. "it's a real pity." and all of those factories are in discussions to try to figure out how to break up the burden of trump's tariffs. so they're thinking how much they can absorb, how much their u.s. partners would be able to take on, and ultimately how much

the american consumer could bear. guys? >> i know something that would help a lot of those domestic chinese manufacturers would be if consumers in china started to buy more stuff. where do things stand on something we've talked about so often which is ways to try to stimulate consumption in the country you've in right now? -- you're in right now? >> reporter: it's funny that you mentions that. we were just discussing that in the office today because the lunar new year is coming up. and this is a traditional time when chinese people tend to travel a lot, they spend a lot. so people are looking at this time as a gauge of just how well the consumer spending is. and already we've been hearing a lot about discounts being offered including here in beijing where we're getting offers for -- to be able to buy more iphones, as well as cars. so there's definitely an effort here to try to get people feeling good about spending, though not sure yet exactly how effective it is. carl? >> all right, eunice,

eye-opening package. definitely some candid comments from some internal manufacturing sources there. coming up after the break, we'll go back to davos for a fresh read on the consumer when the ceo of gap will join us next. and that's not all. do not miss the ceo of service now, also from davos, next hour "nemors." (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

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shop a sleep number store near you. (♪♪) welcome back to "squawk on the street." let's get to the state of retail and the consumer. joining me is gap ceo richard dickson, first on cnbc, and first timer at davos. welcome. >> thank you so much. >> why are you here at davos? >> well, first of all, it's an incredible day to be here. but ultimately, you know, as gap becomes part of the cultural conversation and we focus our brands on cultural relevance, this is a place to really be part of the cultural conversation. speaking with of course world leaders and business leaders and philanthropic endeavors, to really understand the topics and considerations that are moving the world. so it's an important place for us to be, learn, listen, and as a student of culture, this is an incredible arena to learn. >> agree with that.

as someone who's been many times. cultural relevance has been the thing for you. gap lost it, you come in in august, 2023 -- >> that's right. >> we've seen a recovery in all four of the brand -- brand. is gap culturally relevant again? >> we've made a lot of progress. our people are working hard every day to maintain the disciplines that we've set up around our strategic priorities. you're right, this was a storied company with legacy brand that arguably was telling great brand stories, and at some point we moved from a brand story doing terlg to a retailer that sold stuff. so we've been really concentrating with each brand on the brand's purpose. you know, why does each one of our brands exist? and driving insights through better product, better market, better culturally relevant storytelling. last but not least executing with excellence. retail is detail, we all know that. we have a huge footprint.

it's opinion important part of any turns around. >> you brought in zac posen. i'm a fan. i give him credit for re-- relevance and the design. you had to shift the culture. >> culture is an important part. financial and operational disciplines that we've instituted. with that we go reenvision rat our brand, strengthening our platform and culture. as far as zach goes, we are so happy to have zach be part of our company. and it is symbolic of the creative energy that we're infusing into the company all around our -- >> where are on you on the george journey? >> had is a journeyed company, 55 years young. we started as a small store in san francisco in 1969, and we've progressed ever since there with a powerful portfolio. it's a company that has had pits and peaks, and ultimately i think as you see the last couple of years, we've really put our strategic priorities into action. stabilized the top line and

starting to see growth in some of our core assets, expanded our gross margin significant over the last couple of years. operating with financial rigor that has resulted in better ebit and operating margin. our goals at this point is to continuously perform, do what we say we're going to do, and ultimately become a more confident place for investors and most importantly our consumers. >> what happens to those financials if we do see widespread tariffs? china and elsewhere. where's your product made? >> yeah. we've diversified our footprint from a manufacturing perspective nicely over the last few years. only 10% of our product is coming out of china. so we really feel confident about the footprint that we have and the diversity that we've created in context of our global supply chain. and i think as far as tariffs go, we're not isolated ourselves. everybody's going to experience the same -- the same decrees, and we will manage our p & l accordingly, and most importantly to give the value and quality we've always been

known for to our consumer. >> do the tariffs get passed on to the consumer? will we pay higher prices for clothing? >> our goal is obviously as always to deliver the best quality and style to our consumer on a daily base. we've always had various different issues, whether they be inflation or tariffs or natural disasters that we're dealing with that impact product development and cost, but we always pay incredible attention to running a disciplined business that gives our consumer the best quality and best style that we can. >> what else do you expect from a trump administration as far as how it relates to the consumer potentially interest rates and everything else that matters to your business? >> i think we're optimistic. we're consummate optimists at gap, for sure. i'm particularly optimistic that the future looks good. it's not without a lot of interesting and arguably courageous conversations. and as far as that goes, we believe our consumer sentiment is looking strong, we are seeing more and more traffic coming to our stores. i believe as we look at an omnichannel world and experience

that we're all running, i think stores are going to become more and more exciting for consumers. we're all trying to create that human experience that we need and love. and i do believe that as more and more stores and retailers get more interested in making those experiences really special to consumers, it's going to be a very i think confident chapter in the retail industry. >> it helps if your brands are cool again. i'm admiring your banana republic coat. >> thank you. the davos look. >> richard, thank you ovechkin for taking the time. good to see you. richard dickson, ceo of gap. david, also coming up in the next, how we'll hear from the ceo of crowdstrike on the cyber conversation around a.i. here at davos. and we'll talk to coates of barclay's on what he expects in a trump administration. half the bank in the u.s., half in the uk. we talk about uk growth and the special relationship. a lot more to come from here. >> all right. looking forward to it, sara. thank you. sara eisen over there.

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good tuesday morning. welcome to "money movers." i'm carl quintanilla. sarah is on assignment. president trump signing executive orders on everything from free trade to immigration and energy. >> speaking of energy, president trump lifting the on lng, the