. >> i think the big thing this year will be cap ex, the measure of how successful the fiscal system system you list is going to be, whether they use it to invest in companies. thank you for being here have a wonderful weekend, everybody. >> thank you, you can have fun and be safe and -- >> we'll see you back here monday it's time for squt squawk on the street." ♪ >> i'm carl quintanilla, shy of the 190 estimates but futures are firmly in the green. does this led the fed breathe a touch easier the tear continues

investment by companies cap ex i know for a fact that i did that because once you know there are the tax cuts came in at the end of december you know your write offs your deductibles like are way higher for a twenty seventeen if so if you could jam in as much cap ex and twenty seventeen years you're going to be able to write off far more of it than you are in twenty eighteen so i know i bought are a lot of equipment computers and stuff that we need for the kaiser report and our other productions so i think we're going to have a surprise. and how much further this market rally might be able to go oh well that's an interesting analysis you know it's a further look at the price of gold action and what am i doing twenty eighteen i've been saying for a while that the bitcoin is ation hyper because it is ation of the global economy will put a dent in the machinery on wall street to suppress the price of gold as we've seen them do for a number of years and that will free up a path for gold to move higher as well and no more their analysis shows that the japanese hold three point seven milli

it enables us to buy, spend more cap-ex on more equipment for our rental fleet.lissa: he said that you have had your best year in 35 years. what was behind that? what's changed? what feels different to you? >> i think the whole first year of this prison sy generated a lot of enthusiasm. there is a lot of businesses that, based on that enthusiasm they purchased more. so we had, there is a lot of growth in the industries that we deal with. melissa: that is really come to light. because the other thing that haters are going to hate. what they say is, the stock market is overinflated. it is a lot of hype and a lot of hope, that you have to see the actual money come down to the bottom line. >> yeah. the numbers, the numbers don't lie. you can calculate it by the sheer purchase order that you get from customers that were substantial increase over previous years. melissa: yep. absolutely true. george cook, would you like the president to come back? >> we would love him to come back. melissa: it sounds likes you're busy there. we'll let you get back to work. thank you fo

investment by companies cap ex i know for a fact that i did that because once you know they are the tax cuts came in at the end of december you know your write offs your deductibles like are way higher for a twenty seventeen if so if you could jam in as much cap ex and twenty seventeen years you're going to be able to write off far more of it than you are in twenty eighteen so i know i bought are a lot of equipment computers and stuff that we need for the kaiser report and our other productions so i think we're going to have a surprise. and that's how much further this market rally might be able to go oh well that's an interesting analysis you know to further look at the price of gold action and what am i doing twenty eighteen i've been saying for a while that the bitcoin is ation hyper because it is ation of the global economy will put a dent in the machinery on wall street to suppress the price of gold as we've seen them do for a number of years and that will free up a path for gold to move higher as well no more their analysis shows that the japanese hold three point seven million bi

investment by companies cap ex i know for a fact that i did that because once the you know they are the tax cuts came in at the end of december you know your write offs your deductibles like are way higher for a twenty seventeen if so if you could jam in as much cap ex and twenty seventeen years you're going to be able to write off far more of it than you are in twenty eighteen so i know i bought are a lot of equipment computers and stuff that we need for the kaiser report and our other productions so i think we're going to have a surprise. and how much further this market rally might be able to go oh well that's an interesting analysis you know to further look at the price of gold action and what am i doing twenty eighteen i've been saying for a while that the bitcoin is ation hyper because it is ation of the global economy will put a dent in the machinery on wall street to suppress the price of gold as we've seen them do for a number of years and that will free up a path for gold to move higher as well no more their analysis shows that the japanese hold three point seven million bitco

in a typical year, apple will spend about $5 billion to $7 billion in cap-ex.ilities, i have seen numbers in the $4 billion to $6 billion range is what they paid for that. these data centers are typically expensive, so the numbers we are talking about, this $30 billion over five years is more or less -- you could see that getting pulled -- that is 6 billion year -- $6 billion a year, which plays into what their typical cap-ex is. they are making a statement about their investment in the u.s., but the numbers sound big but fit nicely with an historical numbers they have been spending. gene munster, thank you so much for the quick take on apple and how it plans to use its cash. julia: up next, head of the -- international energy agency, who is becoming the in disputed national leader for oil and gas? he joins us in the studio to make his case. this is bloomberg. ♪ ♪ julia: this is bloomberg markets. i'm julia chatterley with scarlet fu. oil edged higher today as opec showed increased in termination -- determination to decrease production. but the biggest decrease

you are right, their cap ex is our revenue and we expect some level of investment to accelerate. >> it is raising the match for its employees and plans to bring most of its overseas cash back home of the it isn't alone, caterpillar, 3m and united technologies all posted strong results this week raising guidance and unveiling capital spending plans. some companies are prefunding pensions and others are on the prowl mergers. experts say growth is across the board as even hard hit companies like business yet is on the klein. >> real people are spending money in the industrial world and i think it's going to be a great year. >> reporter: there are exceptions, general electric perhaps being the biggest. the dow's oldest component missed expectation this is week and announced two s.e.c. investigations sending that stock to i don't have all degrees. big moves in 3m, deer, caterpillar and boeing. analysts say stocks are getting pricey but profits are catching up. >> we like the valuish names. stocks haven't gone up much at all. g, he. we like emerson, like itt, rex narcotic. >> earnings season

come all these companies have cash to deploy based on the repatriation, so not only through their cap exd put a good floor under things. that said, we've had a good run. the stocks make up 13% of the s&p 500, so this it could be a pivotal week to continue to rally her finally see one or two companies disappointed. cheryl: before letting go, asking about the news on intel with the report on technology that intel told the chinese that they were flawed and budding hackers potentially good information before they told the u.s. government. what do you make of that and that is a very unpatriotic is an insult to say the very least? >> always a difficult situation like we sing with data breaches whether it's credit cards or securities. you want to reach out for channel partners and contained what is going on and fix it before you make the information widely known. intel got a situation where the taliban january 9th the daily at january 3rd said they sort of got caught in between things. they were telling channel partners in china and the close relationship between chinese government is where the

we see increased discipline on r & d and cap ex and they should see some improvement in the south americanarket. >> how important when you value these companies, how important is it that they have a strong infrastructure in place for electric vehicles and billing that electric vehicle platform that's going to be a key driver of demand going forward. >> you're right. i think when we look ten years out, electrification will be a key and differentiating advantage for some of the oems in the near-term a lot of investors look at it as a cost it requires increased r & d which weighs on free cash flow one thing we like about volkswagen is the improvements they're making in working capital and other parts of the business means the free cash flow yield could be north of 10%, which amongst the space makes it a better performer. >> another interesting thing from your note, many automakers have taken big bets on china and the growth of the chinese market over the next couple of years, particularly in the electric vehicle space. you're skeptical why is that? >> we're skeptical on china for 2018 it's la

cap-ex and growing u.s. jobs. the real positive is it gives them the flexibility now and it's just clean. it takes this 250 billion plus sitting offshore they pay the tax bill. they can do whatever they want with it. i think that sort of flexibility is the key >> all right and if you had to guess, what do you think they're going to do with it? >> well, i think there's a chance that they do acquisitions, but apple historically has not been highly -- the biggest thing they ever bought was beats for a few billion dollars. that at least is on the table now maybe. >> although it doesn't appear to me -- i mean, their access to capital has never been in question it doesn't seem to me it matters. if they want to buy something, nobody's going to stop them from buying it. why would it change their appetite now >> yeah, it would just be easier but beyond that, they did call out the fact they'll be spending a couple billion a year on u.s. data center capacity they could certainly keep investing more and more in data center ca

we're seeing economic gains, cap-ex, productivity surging. there is belief out there, optimism. not just my opinion. the survey shows it. david: jonathan, i can't name the number of times you and i talked about during the obama administration, the air, the hot air that was being pumped into the economy by the federal reserve was just that. we have to remember a lot of people say well, the stock market went up during the obama administration. that is because obama came in when the stock market was down to practically its lowest point. its low point was 2009 when the dow was 6, 7,000, it had nowhere to go up but it could have gone up much higher if there was real economic progress, right? >> when its with at 7,000, it looked like it was going to 2 and 3,000. there was a lot of fear back then. to your point about the influence of the federal reserve kind of where we are, we're in uncharted territory. david, to quote the president himself a couple months before the election, there is a lot of bubble out there, a lot of people saying in a speculative bubble. we've never been here bef

some of that savings from the tax cuts and repatriation of foreign capital, that's going to go into cap exat will help the banks as they make loans for those companies. so i think the big picture as you rightly pointed out, the macro is the big driver of bhaes going to happ -- what's going to happen this year following what you've seen in the tax code. >> i wonder if all that takes place will we get an idea of how they are hiding in these companies and benefit when growth is strong where do you think that goes >> i 100% agree with you earnings season, some really goo results will come out but i think there will also be some misses i think misses are going to be severely punished. as you pointed out, in a lot of cases you've got stocks going up as estimates have gone down. amazon is a great example of that i know we all believe they are going to take over the world i get tons of amazons a day. earnings went down as the stock was up 56% so i'm not saying they are going to have a problem necessarily. but at 100 pe with estimates going down, with the stock up 50%, you know, you better have a g

america what we've seen from companies, too much financial engineering and rather than investing in cap-ex and people and technology. that is happening already. productivity surged in the third quarter. will continue to surge. why? because we have given companies confidence to do more than simply buy back shares. we have given them confidence that the regulatory environment, the tort environment, the tax environment are favorable enough that they can invest. i'm so excited, i'm excited about 2018 and prospects for growth in this country. >> jonathan, last word to you. >> that is another faulty element, melissa. they say they will not spend money, corporations and individuals, they will save it. faulty economics. they save it. where does the money go? it goes to banks where it is loaned out. does the money go to government where it is redistributed and wasted or go into people's pockets, where it creates new growth powering the country in 2018 and beyond. melissa: we solved it and every problem so we can be done. gentlemen, appreciate it. david: you're in business for your business. you wan

we need to see money not only going into bonuses and buy backs of stocks and cap-ex spending within this country and see some growth so we create some real jobs. but the real thing we need is a little bit of higher interest rates so we actually let the small business guy borrow money because they pay the best wages, and they are the true growth of america is small business which we really cut out. david: we hear from a lot of ceos saying they will increase capital expenditures a lot. we'll see if they follow through on that. todd, dan, thank you very much appreciate it. >> thank you. melissa: press secretary sarah sanders wrapping up briefing this afternoon with the bulk of the questions about michael wolff's tell-all book about the president. kevin corke at the white house to break it all down for us. kevin. reporter: hey there my friend. a blizzard all right but a blizzard of cease and desist letters from the president's lawyers. let me share what is once again a pretty interesting day at the white house, once again we're talking about the forthcoming book, "fire and fury." the first t

like after a -- and they spend 100 million over cap ex, so i like that ability. >> you think ge cut the dividend enough you're not at all worried we revisit that >> i am -- well, look, you're asking where is the stock in two years? and hue good is the and you have a new sheriff in town and as dylan said, the times are a-changin' i don't care about the dividend. >> kevin o'leary, you have a thought on that mario clearly saw what he thought what us a floor. >> i like it at $13. i think it's going to get there i don't think it's flushed out all the bad news there's no rush it's very expensive here 16 times the company has to go through a lot more heartache i like it at 13. that's the number i put on our table. it may even good to 12 it's a dog, but at the end of the day i agree on the engine and the health care. there's some advanced health care stuff, the rest is a dog. >> we're in complete agreement don't forget, i'm trying to hold things for two or three years. we are long-term holders the problem is with dr. pepper i lose a long embedded knowledge when i have to figure out what the guy

can grow earnings 25% or so but the pe could derate but industrials benefit from a boost in cap ex and energy materials are hugely sensitive to inflation the financials should do really well and cable and media and telecom do well with block chain. >> so it's entirely possible because there's an idea out there that a lot of people have which is that when we had a slow-growing economy, people overpaid and flocked to the relatively few companies that had secular growth and that's the f.a.n.g. names quite frankly. >> to your point -- but to your point, you could and i hope you do because that means fundamentals would start to take over and it would be a more fundamentally oriented market. but what josh talked about i understand is important is the structural nature with which people invest today. they invest using etfs and by renting beta you have this situation where it pumps up things that shouldn't get pumped up and the fundamentals don't matter as much when you get into a market that's a little more rocky there's a little more to worry about and fundamentals matter. >> i'd love to hea

record levels of cash flow cash flow generation, an for the first time we're getting potentially a cap exsyched on top that's at record highs. i guess these things seem to be important, and i won't if you thought about those kinds of things, to kind of get you around the valuation. >> number one, in my memo the other day called "latest thinking -- is it okay to say they're available at oaktree capital.com? >> it is >> i went through a long recitation of the lows and cons. you also -- it's also very hard to fick out what the pros an cons together mean will great pros is or economy is doing w. envy of the world, probably strengthening, capital cycle probably coming in this recovery is the third oldest in history, but also has been sluggish throughout in large part because we did not have strong capital investment i say in the memo that i think business did not invest strongly in capital goods, because it was not confident what would be coming out of washington in terms of tax and regulation, and now it is. so i think that's a factor that may create the capital cycle you're talking to and ex

happen, if the tax reforms do help companies have more capital to work with, they put in to some cap ex workers in the global economy that, could push out our recession or down turn forecast to maybe 3 to five years from now rather than the more little bit nervous two years that wear hearing more on the market these days. >> and just in terms of the risk profile market right now, one of the other big pieces of news is this idea of whether we're kicking off a trade war. we have nafta negotiations and the new tariffs slapped on solar and washing machines is this a risk to the market >> i think it's a flag run up the flagpole these are such narrow tariffs. this isn't steel this isn't aluminum. these aren't economically wide tariffs that hit a broad swath of the economy i think it is an attempt on the part of the white house to see the reaction of our trading partners and gauge future trade negotiations >> given the fact that it is sort of -- there is so much really positive data out there in the marketplace, i mean, what do you see as the potentially biggest risk to the market right now? >

customers of the companies producing much more in mandate to get better products and services, much more cap ex. very importantly there helping their employees. it's not just a one time bonuses we've heard about. it is wage increases, it is healthcare support, it is being able to help them and increase the retirement benefits. this being able to have them to continue to participate that, and then additionally companies are also taking that money and putting it back into her his on philanthropic effort in the communities that they serve and the job retraining. so if you can continue to see that across america, that is what capitalism is all about. >> i'm going to move on now, and unless someone wants to add on the shorter-term risks, to the longer-term opportunity. i think the imf was the first to say we should fix our roofs while the sun shines. they've been rather good on metaphors, very things of this kind in the last few years, so i like that. it's no longer the new mediocre which is nice. so the big issue people have focused on is the feeble state of productivity growth. some people seem to

do but obviously the tax bill means businesses like fedex, which is already a major investor, our cap-ex $5.9 billion. but it means that we can increase it in the future because of the new provisions of the tax bill. stuart: top guy at blackrock out this morning saying companies should be responsible, and they should contribute to society. i think he is talking about the bonuses and wage increases. so kind of prod you a bit more, if walmart can give bonuses to a million employees why can't fedex do something similar? >> my guess is we will be responsive to the tax bill. stuart: can i say that as a probably, fred smith, fedex -- >> you can say that is probably. i don't know it will be bonuses. might be increased wages which we do every year anywhere -- stuart: but will you increase more because of the tax bill. >> it could well be, stuart, because the tax bill corrects something that has been a real problem for american business for years and that is the punitive tax code that we used to have that dissuaded investment. and investment is the only way to make blue-collar workers, people tha

the upside of ,he business cycle in europe and one of the things we are witnessing is a recovery in cap exbusiness equipment spending is picking up in europe and elsewhere, and there are a lot of companies that stand to benefit from that. anastasia, you will be sticking with us. david: and we will be talking about the man who wrote the definitive book on steve bannon -- not that book -- "devil's ," the rise and fall of steve bannon. this is bloomberg. n. this is bloomberg. ♪ yesterday, the world in washington politics blew up over by michael wolff that has not been officially released yet. first of all, the garden in lengthy and published "fire and fewer he" quotes, and then president trump came out with a statement about 1:30 yesterday, saying president trump -- steve bannon has lost his mind, and then the first ladies says it is entirely untrue, she always wanted her husband to be president, and then tom barrick came out and said he never said the president was stupid and no one ever asked him, and then a trump for donald sent a letter to steve bannon, telling him to cease and desist and

thing gold >> i think people are really going to focus on that and what they are going spend for cap exing plans are it is an odd earning season for the fourth quarter it is a lot of digest. we were worried of whether tax reform is going to get passed and now it got pass ed and now how big of an impact >> they'll need to say not only are we buying back stocks, we are doing capital expenditures >> the bar is set very high. they are expecting awful a lot here >> when could you not have said that >> you could have send it every step along the way >> don't you smell a little of fire >> sure. >> it is going get much more >> what i think is everything is moving higher. things that have been working and things that have not been working. take a look at ibm this year, ge of more than 6%. >> those are the things. >> those are the things to sale. >> see you tonight on "fast money" at 5:00 back over to you guys. >> we'll be watching >> big money on wall street saying there is more room yet to run. apple tells cnbc, he does not think the market is expensive and he does not see over evaluations, he

have been rising, confidence has been rising, both consumers and business confidence rising look, cap ex is really important. >> capital expenditures. >> really important, whether you look at factory orders or industrial production and business equipment, they have really taken off in the last couple quarters and have been responsible for most of the increase in gdp from around 2% to 3%. also, profits have been increasing you know, we had a profit slump for almost two years, from about the middle of 2016 up to now, profits have rebounded and vastly out3r678d who everybody was looking for. what mr. trump has been doing with respect do lower business taxes and rollback, is to increase, to increase the outlook for profits, which increases the outlook for business strengths, which goes right down the line, employment, product activity, wages, so forth. i have never seen anything -- there must be 100 companies now that have declared wage increases one-time benefits, higher minimum wages, walmart, which refused to accede to the government's demand, these are signs of economic strength. >> you

jared, he argues it's working given sentiment here, stock market indicators and apparently bonuses in cap exand even the mood out of davos appears to agree with what he's saying do you agree >> i do. it certainly boosted the mood or the animal spirits of business folks and that's what happens when you give them a massive tax win fall so that's not a surprise to me i found the speech to be quite unique you really have two groups at davos, you have political leaders and their trade ministers, and you have business folks. typically when presidents speak to that group, to those groups, they talk about global integration. the theme of their talk may be to boost their own economy to some extent, but generally they're talking about ways in which you might integrate more globally donald trump with his america first kind of motif wasn't able to do that instead he became a salesman in chief and argued here's why you should invest in america we can have a good argument about whether his investment strategy is the one i'd endorse -- it isn't -- but that was a unique speech. that was a different kind of

. >> i looked at verizon, they spent 17 billion on cap ex last year, between 17.2 and 17.8 this yearpple, we went over those numbers and thought that's a big number then we looked at the actual spend and the trend and it's the same. >> yeah, same with jp morgan in terms of branches and all of that we'll talk more about that in a bit. futures are up after the dow posted a record close for the ninth time and dollar is hovering around three-year lows in the wake of the comments by the treasury secretary yesterday about trade. and earlier today at the panel in davos, nuchin clarified the remarks saying the administration is not concerned about the level of the dollar in the short term here's what he said. >> in the long term, i fundamentally believe in the strength of the dollar it is the resolve currency and will continue to be the resolve currency, given the strength and confidence in the u.s. markets >> journal has an op-ed making the dollar weak again. they kind of hammer mnuchin to a large degree for short termism here, turning your back on obviously strong dollar policy that former

. >> i think the big thing this year will be cap ex, the measure of how successful the fiscal system system you list is going to be, whether they use it to invest in companies. thank you for being here have a wonderful weekend, everybody. >> thank you, you can have fun and be safe and -- >> we'll see you back here monday it's time for squt squawk on the street." ♪ >> i'm carl quintanilla, shy of the 190 estimates but futures are firmly in the green. does this led the fed breathe a touch easier the tear continues in europe, 10-year at 2.44. our roadmap begins with unemployment holding steady at the 17-year low. futures point to new records of the open apple's chip response confirming its products are vulnerable to that security flaw and the corporate tax response, bonuses on the way at jetblue and billion plus q4 earnings hit over at morgan stanley december nonfarm payroll growth missed forecast, we still saw 2.1 million jobs added in '17. average hourly opens up 2.5 from a year ago labor force, unchanged, a lot of discussion of the amazon effect, what's happening to retail. >> i thin

i'm confident they will invest in capital expenditures, cap-ex, plants, people, software and equipment i think they will have confidence to do that now, the lessening of the regulatory burden from washington, d.c. i think that will be magnificent. a critical part of this tax reform, small businesses can immediately deduct, fully deduct expensing for expenditures for purchases. i think that will unleash an to much purchasing in this economy. i believe when you talk to businesses large and small, there is a new sheriff in town. there is a new confidence in town. ashley: talk about confidence, what about the stimulus plan that is the infrastructure effort to spend a lot of money to get the infrastructure in this country up to where it should be from the airports, highways, bridges all of that? that has to be a good, big, stimulus for the economy, right? >> i think so. by the way, badly-needed. ashley: yes. >> anybody who flies, for instance, i am flying tomorrow, coming in to see you folks coming into laguardia. i am dreading it. it looks like a third world bus terminal. it is embarrassin

and there's as much optimism, as much cap-ex spending since 2007, this market is truly roaring.ave you ever seen anything like this before? on the market, that is. >> no, i haven't. when we went through 24,000, i said we could go all the way through 30 by the end of the president's first term. now we have three years the go. so much of this is paid for by higher profitability, and we're going to get better profit reports yet again in the first and second is quarters, and then the tax cut impact and so forth. but also because american industry is using capital so much more effectively, the market will eventually support higher price earnings ratios. we haven't seen those yet, and that is yet to come. i think the good news here is not just the scope of the rally; but, rather, the underpinnings of the rally. i think they're very, very positive and strong. stuart: yeah. i've got news on that actually, peter. tomorrow morning we get the jobs report, a key economic indicator. this morning we found out that the private sector added 250,000 jobs just in the month of november. >> right.

coming up hear what the ex patriots have to say about playing ♪ >>> this eagles season is being cappedeally the om way it can be, with the ultimate david and goliath met for. eagles the team everyone counted out trying to dethrone the current kings of the nfl the patriots. when you play the patriots though there's more than just playing a tough team there. you have to handle that mystique that is new england. so how does doug pederson handle that with his players? by telling them to only focus on themselves. >> you know they've been there. they've done it. they've proven it time and time again, and you know, um, it's just -- my biggest focus with the team is let's just focus on today. let's just win today. let's get better today. and we'll worry about that when we get to the game. >> chris long and legarrette blount don't like talking about their former team the patriots. legarrette blount says he doesn't play for them any more. when they won't compar winning the lombardi trophy with the patriots last year they can appreciate how special this eagles team is. >> this team doesn't really

if you can found that with the tax reform in the u.s., and the ex,ire maybe to step up cap you have activitye united states that might be interesting from an overall banking contacts. the global growth story is a net positive for banks. i know you're focused on what is going on in japan. i have got this chart that shows japanese banks of late. interesting to see that the banks and japan have been rising on expectation that we might see a change in policy from the boj. we hear from the boj tomorrow. the expectation is that we will not get a change in policy. what are your expectations around the boj, and how does that affect you? richard: it is really all about corporate governance and japan recovering from its very long slump in a very long story of deflation. we are seeing recovery both in earnings and the real economy. that underpins our viewpoint that japanese stocks, although they have done very well, are not expensive. we are overweight overall, including in japan. where do you see the best value as far as things are concerned? if you look at stocks across the globe, the u.s. is trading

investment by companies cap ex i know for a fact that i did that because once the you know they are the tax cuts came in at the end of december you know your write offs your deductibles like are way higher for a twenty seventeen if so if you could jam in as much cap ex and twenty seventeen years you're going to be able to write off far more of it than you are in twenty eighteen so i know i bought are a lot of equipment computers and stuff that we need for the kaiser report and our other productions so i think we're going to have a surprise. and how much further this market rally might be able to go oh well that's an interesting analysis you know to further look at the price of gold action and what am i doing twenty eighteen i've been saying for a while that the bitcoin is ation hyper because it is ation of the global economy will put a dent in the machinery on wall street to suppress the price of gold as we've seen them do for a number of years and that will free up a path for gold to move higher as well and no more their analysis shows that the japanese hold three point seven million b