Transcripts For CNBC Squawk Box 20161118

1997, down 1. 75 . So the selloff in bond market has been real. The 30year yield back above 3 . 10year at 2. 30. The fiveyear, 1. 7, and twoyear at 1. 035 . The nikkei closed higher by a half percent. European equities at this hour, lower. Not by a whole lot. Except for italy and spain, off by more than 1 . Crude prices are mixed. Lower by 7 cents for wti. Look at the dollar, which is stronger once again against the euro and the yen. 14year high for the dollar index. 1. 06 is what the euro will cost you. You will get 110 yen for every dollar. Reuters is reporting this morning that chinese policymakers are ready to slow the decent of the yuan so it doesnt fall too quickly. Its 6. 88. That headline sergeauggests thay will let it fall through 7. People saying the important level that could the negative for multinationals to the point that where the everybody is looking for a reason for this rally to stop. Thats another one. I dont employee if that would stop it. The u. S. Dollar index, its been steep how far its gone. If you look 12 months ago, barely up. You had that spike in the dollar late last year. Thats why maybe its not that big a shock. In a world where we close the borders and become a domestic economy again and just take care of ourselves, do we worry about currency translations . Kicking butt, making everything here . Consuming everything here . You cant do that, i understand that, but is there something to be said if we start putting more money in the pockets of people . Get the small banks lending again . Isnt it possible we dont need everybody else . Corporate profit translation is what it is, but you wont go from 40 profit overseas to half of that. If youre a Consumer Products company, youre selling to them over there. When we were sweating the dollar six months ago, a year ago, when it was strong, what if this happened without trumps election, without the an maima spirits being conjured up, what would 1. 06 on the euro have been like . White as ghosts in fear of what it would do to revenue. Or said ecb is doing what they have to do and its working. I honestly think the strong dollar last year wasnt so much about the trade flows, it was about disrupting Capital Markets activity. About helping the oil crash and helping you had this global dollar shortage story out there. I dont know if that means well halt right here. The markets freaked out. Thats why you freaked out. I never believed parody. For the euro . Yeah. But its looking that close. That close. I remember when the dollar was below. And the pound. What the hell . Approximately the same populations. Yeah. The pound, that cant go up. No. Would hurt. Among the other top stories, new data on postelection investments. Investors poured 23. 6 billion into stock funds the last week alone. Etfs took in 27 billion. Financial sector funds brought in 6. 7 billion. Municipal bond funds posted 3 billion in outflows. Thats one sector where the outcome would be so asymmetric depending on who won the elections. Munies. Muny bonds, thats right. Go to munies, protect yourself from taxes. Now, bam, you see the exit from the doors. If the tax rate goes down, the meanings change. That happened in the early 2000s as well. Mario draghi speaking at a conference in frankfurt this morning. The ecb president says the central bank will pfocus on recovery in europe even if monetary stimulus is withdrawn at some point. We remain committed to monetary accommodation which is necessary to secure a sustained convergence of inflation towards a level below but close to 2 over the medium term. We cannot yet drop our guard. Draghi says he still sees a significant degree of uncertainty for the economy there. Volkswagen will cut 30,000 jobs at its vw brand as part of a plan to boost profitability and fund a shift to electric and selfdriving cars. 23,000 of those cut also come in germany. Volkswagen expects the move to save 4 billion annually starting 2020. Elon musk is one step closer to merging his two entertains. Share holders voted 85 in favor of merging tesla and solarcity. The 2. 1 billion stock offer could create or would create one firm that sells emissionsfree cars and rooftop solar panels to power them. Musk says the deal will be completed within the next couple of dales, critics say its essentially tesla bailing out solarcity. But musk said the solar panel firm would not way on the bottom line. Mcdonalds rolling out its restaurant of the future concept. The company will now offer Table Service in the u. S. As well as introduce mobile pay and orrering. And selforder kiosks. Cnbc caught up with Steve Easterbrook who described the big changes. To give you an example of how were changing our attitude, we asked customers to fit around our Business Model for 60 years and weve been successful at doing that, now customers and consumers in general are demanding more choice and control over their lives so we need to adapt and evolve our Business Model to fit around their needs. For those who want Table Service, thats a great option we can offer. Each time we convert a rauchbt, we see the results the next day. Shares of mcdonalds higher by 24 . Sales force im Third Quarter revenue rising 20 on higher sales of subscription and support services. The cloud competing company is forecasting Fourth Quarter revenue above analyst expectations. Heres Ceo Marc Benioff last night on mad money. Ive been a huge bull around growth in 2017, 2018, 2019. I feel when you look at the Global Economy and talk to global customers, whether its here in the United States, japan, or in europe, ive seen a lot of customers burn off the 2008 problem, and im optimistic for whats coming in the future. Marvell technologys Third Quarter results and guidance beating analyst forecasts after the close on double digit growth in its data storage and infrastructure business. The company launching a 1 billion stock buyback. Gaps Third Quarter profit fell 18 . The retailer posted its seventh straight quarter of declining sales. The company says it is still struggling to bring shoppers into stores. They plan to close 64 shops this year up from the previous 50. In political news, president elect donald trump has offered former military intelligence chief Michael Flynn the job of National Security adviser,s that according to an a. P. Report. Its not clear if flynn accepted the role. It involves coordinating information generated by americas defense and intelligence agencies. It serves as the president s top daytoday counselor on foreign and military affairs. The post does not require senate confirmation. And former republican president ial nominee, mitt romney, will meet with donald trump this weekend and reportedly discuss the secretary of state position. He looks like a secretary of state, i think. You know who looks like a secretary of state . I think it ends there, john kerry. Looks like he would be looks like he would be remember, they used to say he looks french. He speaks french. He speaks french. Tallest guy in the room. Looks like thats just my opinion. It ends there. Thats according to a report from nbc news. Romney was one of really . I dont remember that. One of trumps biggest gop critics during the president ial campaign. This is amazing. What do you think this is . Happy together. We played it at the beginning. Anyone can get along. Theres campaigning and governing. So sh, be donald trump, look magnanimous, romney, how can he say yes after all those things he said in that speech. Big league for republican unity. It would be huge. It doesnt always work out that way. Jeb bush wont be in the cabinet. I dont think john mccain. Theres certain things theres no going back on certain things said and done. Im surprised this one wasnt the point of no return. How can he say yes after all the things he said about him . I think the way he says yes, the country needs me. Its not about the grudge. Thats how he gets there. This could be ugly. That relationship. Trump would be his boss. I would give him the job just to whip him. Get in here what . What did you get i sent you over there. What did you get . Oh, nothing. I got nothing. Theres your answer. Wouldnt you just get the lash out . He has experience on the international stage, remember with the olympics. Romney is a talented wasnt he a missionary . Right. Hes a talent. I was ecstatic about him. I thought he would make a great secretary i like rudy. Not sure thats the position for him. The irony in 2012, mitt romney said biggest National Security challenge is russia. The democrats laughed at him at the time. Now theres a different reset going on here. Youre intimating that would help counter the criticisms of donald trump, about whether hes too close to putin, russia or messing things up. Former house speaker, Newt Gingrich told nbc news he wont be in the cabinet for the president elect. Instead choosing to focus on Strategic Planning through the emerging republican majority. Donald trump taking credit for keeping a manufacturing plant of ford in kentucky instead of relocating to mexico. Ford previously said they would move production out of the mkc out of louisville. But never specified that would be to mexico. The president elect saying i worked hard with bill ford to keep the lincoln plant in kentucky. I owed it to the great state of kentucky and their support of me. In the trumpinspired rally in stocks, janet yellen said a rate hike could happen soon. Joining us now to discuss is the chief Investment Officer at bmo private banks, and samantha rello is also here. Before the election, you had a lot of interviews, jack, saw a lot in print. What was your forecast for who would win the election and what was your forecast if trump did have a surprise victory . What was your prediction for what the markets would do. Yeah, i, along with everyone else, expected Hillary Clinton to win. Right. You were correlating positive Market Action to her prospects being positive, negative action in the market to trumps prospects. Right. So the thought was when comey issued the letter absolving hillary on monday, market moved up 370 points, assuming that hillary was going to win. The following tuesday, leak shun day tuesday, the market was up 170 points. So the thought was we have to undue that 500point i know how it hatched, but how did you come up with logically that a trump surprise victory would be so disastrous for the markets . I said it was like a v shape. I said an 8 to 10 decline would be a buying opportunity but an 8 to 10 decline, you didnt talk about a tenminute to 10 decline. How long did you think i dont know. I thought of an 8 to 10 decline because of his personality. Even though he was talking about Corporate Tax reform, not raising Capital Gains rates. Right. Deregulation. Keystone a litany of things now in hindsight that were all talking about how the animal spirits have been conjured up, how great it will be. As a strategist, none of that was apparent to you . Was apparent to me that he was talking about it. I think the notion of closing rank and sealing our borders and trade that really has evolved over democrats were antitrade, too. Democrats were antitrade. So lets cancel both of those out. Republicans were i dont think democrats werent as bad about trade as trump . I dont think the depositions wanted to cancel nafta. Depositions were sus perss pers suspicious of tpp. Everybody had the brexit play book, instead of 6 , 7 in three days, you got 6 , 7 in three hours. I said the Market Reaction of the Trump Victory was as surprising as the Trump Victory itself. That didnt help investors a lot. The people that listen to you. The good news is we moved from large cap to mid cap. That was because of because of just this whole populism trend. We knew that if anything happens globally, its going to impact the largest companies, particularly those that enjoy the left Corporate Tax rates. Samantha, are we ahead of our skis now . Or is this justified by the kind of economy well have for the next several years . I think some of the concern around yields rising too quickly is unwarranted. Theres a parallel if you go back to the taper tantrum. The tenyear yield doubled in five months and was pricing in a big policy shift on the monetary side. Now were getting that on the fiscal side. We expect higher yields, but we were saying that any way with healthy normalization. As long as it doesnt get too how the of hand, fixed incomes will be find. Are you surprised the decoupling of the bond market and stock market was almost instant. It shouldnt have happened that way. We were at levels on the tenyear we had not seen in rising yields are supposed to be bad for the stock market. Straight up. That is weird it decoupled so quickly. We were waiting for stall speed in the economy. Maybe we havent. It almost looks coincidental, that trump might be coming into something that already happening. Yesterday with the housing starts. You know, he may make America Great again, but he didnt do anything yet, did he . In a week . Were pricing in a lot of things. You can see it in the dollar, that tends to overshoot, price in too much. I would say the divergence between equities and bonds, thats been something thats happening. Weve been seeing that in correlation. I was surprised but not really that sbrurprised if you see tha split in the market. Its better to be lucky than good sometimes. The main point that helped trump get into office was this huge dissatisfaction between the split between profits and wages. Its the lowest its been in our histo history. While i think if if trump is going to have to make good on his promise to the people that brought him into office, that split between profits and wage also have to tilt back towards wages. Unless he can get productivity going or growth going a lot, its likely going to be at the expense of profits. As most people or many people have pointed to the wealth effect that the fed tried to orchestrate, helping people who had the assets and adding to income. The reason the fed was stuck as the only game in town, because for eight years we did all redistribution and no growth initiatives. If you do some growth initiatives, you get the fed out of the way and youre at 4. 9 already. This is stepping into this when wages they were trying to solve the problem you brought up but never did. Couldnt. Now well see the labor market may be tight enough. And lets see what happens in europe. Who did you vote for . I did not vote for trump. Yeah. I see i think people im a florida voter. I know. I think the forecast sometimes have too much to do with their own politics. The policies themselves were pro business, pro growth. Thank you, lady and gentlemen. Coming up, shares of gap are under pressure. The Third Quarter pressure fell nearly 18 . Slump in instore visits continues. More on what to expect from the Holiday Retail season next. I have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. Sing girl, come on. [ singing ] sorry, ariana you gotta go. Seriously . Verizon limits me and i gotta get home. Youre gonna choose navigation over me . Maps get up here. Umm. That way. Girl you better get on tmobile why pay more for data limits . Introducing tmobile one, unlimited data for everyone. Get four lines just 35 a month. Shares of retailer gap falling after hours following the companys Third Quarter results which beat in the top line and matched in the bottom line. Gap saw its seventh straight quarter of declining shares. Joining us with more is roxanne myer, softland retail analyst. Good morning. Good morning. So, as i see the reaction in gap in particular, stock ran up close to 20 or something in the prior two weeks, maybe not set up for a mild disappointment. Where is gap in the Overall Group arranged right now heading into the Holiday Shopping season . I think the perspective is old navy has been a stand out in the space, one of the few dw divisions or companies comping positive. The market was rewarding that. What we werent anticipating is the Fourth Quarter reduction and a ton of headwinds in terms of investments that are entering the picture. Management took a cautious tone as it relates to traffic in november. I think gap has its work cut out for it. Old navy will keep humming. Gap and Banana Republic are laggards. Theres no evidence that a turn is imminent in those divisions. Do they have to go deeper with the cuts to the nonold navy chains . Whats the solution here . On the surface it looks like relatively cheap looking stock. Maybe theyre okay preserving margins. A lot of retailers are in that category and it seems like retailers want to give them another chance. Theres a couple things to think about. On one hand, this company has been you could say winning the past few years in share buyba buybacks. This is the First Quarter that the company signaled they will be investing again. That puts pressure on the expense structure and the top line to deliver. What are they investing in . In people, in overhead, in marketing. So better training . You know, i think its also corporate. Its at the headquarters level. Trying to invest in customer awareness. Trying to bring new customers to the brand. Its an attempt to get more traffic into the stores. Does gap tell us anything about overall retail . Is this just about people dont wear the khakis anymore . The issues at gap are fairly gap specific. What do you think will happen for the Holiday Shopping season . Not just for gap but throughout. I think the top line will remain challenging. Theres no evidence theres really were set up for a rebound in top line other than the compares are just so easy. Inventory is tight. Exactly. The margin situation is very attractive. And ive been fairly bullish into the fifth quarter knowing how lean inventories are. Were now two quarters in. Virtually every company has been able to check the box on higher gross margin and leaner inventory and reiterating full year guidance. That means fewer sales. Well see. What kind of khakis . Any kind. I thought you said mini khakis. The strongest stretch between thanksgiving and christmas. Who sells those, Banana Republic . The gap institutionalized the khaki. All right. Thank you. Coming up, m a activity picked up. A new report says we could see more deals in the First Six Months of the trump presidency. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. 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Welcome back to squawk box on cnbc. U. S. Equity futures at this hour are a little bit weaker so far. Except for the nasdaq. Playing a bit of catch up perhaps. We have the s p down 3, the dow jones indicated down about 16. St. Louis fed president James Bullard says he is at this point hes leaning leaning towards supporting a december rate hike. In remarks in frankfurt this morning, bullard said the real question is about the path of rates in 2017. I just figured Something Else out that we should do. We should make this job, instead of a fulltime job for these guys and gals, it should be like parttime. They should meet once in a while parttime, and be a hobby. Because they think the entire world revolves around what theyre doing. It shouldnt. You know what i mean . It has recently. But the forest and the trees, theyre so every day, theyre in there talking. A quarter point. Should we . Should we . What about the latest the regional fed president s will tell you, theyre running a business there. Theyre owned by the private banks. Its a crazy structure that you have all these fed president s out there do you remember shakespeare . Hamlet, how heart it was for him to get off the snide. Yeah. Procrastinating, thinking of these different the sill lhe and on. We have 95 certainty as to what theyll do in december. Would you like bullard to say things are going great, i see no reason not to raise rates . Instead of im leaning towards supporting what the market says is 90 . Just say, yeah, were going to do it. Still four weeks out. Only good things. Yum brands is adding 2 billion to its stock Buyback Program. Which will run through the end of next year. Williamssonoma reporting lackluster sales in the Third Quarter and the retailer is giving a downbeat forecast for the Fourth Quarter. The chain continues to face weakness at pottery barn chains. Samestore sales falling 4 in the Fourth Quarter. Shares down 3 before trade opens. Ross stores Third Quarter profit rising 13 beating forecasts. The retailer benefitting from Strong Revenue and margin growth. The company raising its fullyear guidance. Merger announcements are picking up in the second half of 2016. According to intralinks, we are likely to see a 5 uptick in announced deals in the first few months of trumps presidency. Joining us is matt porzio, Vice President of intralinks. These are not closed deals, but announced deals. So when we talk about at t doing the deal, thats an announced deal, even though it has not closed, youre including it in the numbers for the year. Yeah. Yeah. As the leader in virtual data rooms, were seeing deals typically six months before theyre announced looking to leverage our technology in that Due Diligence phase and get that early insight into activity which relates to predicting. What i see is theres a pick up in this quarter, which you guys find surprising, because historically during a president ial election season that slows down due to Political Uncertainty about what will happen with any deals depending on who wins. Yeah. The uncertainty around the election, just general uncertainty in the market, Global Economic growth. A lot of things were weighing on the m a market. We see a shift where dealmakers, corporate dealmakers, boardrooms are realizing that m a is the clearest and best path now to growth, innovation, profitability. Any way to handicap what the regulatory set up will be heading into the new administration in terms of vigilance on antitrust, whether they want to block deals ass s what the longterm policy changes are going to be for the ftc, doj. Still only 5 of the market that goes through that strenuous review process. What are your predictions then for 2017 given all the input data, specifically for the United States . I know the numbers you talk about are global. You monitor asia, latin america, europe, but what do you think hooches . Theres regional differences. The good news is in north america and in the u. S. , weve seen the reversal of two quarters of down year over year declines. Were seeing 5 growth in an upswing there. The u. S. Is the bellwether driving the rest of the market. We are seeing strong growth in deal activity out of europe. Even post brexit the uk has grown in the last quarter. Matt, what do you think the probability of the at t deal is . The reason i ask, trump supposedly will is antinet he said stuff about size, the populous, the Big Companies are bad, they keep moving, taking jobs. If you had more of a Republican Justice Department just the whole tone changes there from the last eight years, if they went to him and said its vertical, this is what its going to do for consumers, do you think hes going to stick to that populous rhetoric . What do you think the chances are . I think the chances are better than 50 50 that it goes through, dont you. I would agree with that. A lot of it is already seen as rhetoric. The dealmakers im talking to believe that, you know the way the markets reacted, even the equity markets. Theres a pro business vibe of the republican government right now. I do think its a better than 50 chance the deal moves forward. The uncertainty principle, those are theres so many new entrants coming into this. I have no idea what media looks like in five years. I know most people will be behind unless they do things like this, it seeps like. Absolutely. M a is the new key Business Strategy for a lot of these companies. Thanks for getting up early, matt. Youre in San Francisco. Its 3 30 in the morning there. I know that. No problem. Nice place to be. Thanks. Awesome. Love San Francisco. Mostly. It has his drawbacks, too. Obviously. Now to sports, and thursday night football. The new Orleans Saints traveling to charlotte to take on the carolina panthers. In the Second Quarter cam newton hit his wide receiver in the back of the end zone for a 40yard touchdown. Catch was initially resulted out of bounds. Saw this . I didnt see any of it. Go to bed. You have to be ready. After review, the call was overturned. Carolina held off a Late Comeback by the saints to win the game 2320. That monday game and this both good. Sunday night game, too. They are on a good streak with the prime time. The election is over. We did a segment on power lunch yesterday about how many delays there are. 35 of the time the players are just standing around. Commercials. Theres not that much playing time. 11 minutes, but still all of a no. They could improve it. They change the rules every year. A year or two ago it was like look at the nfl, no way baseball can compete, nba. Things go in phases. Im worried about when brady brady is almost 40. He says hes going forever. You know him. Yeah. You know, russell, beat him. Yeah. Thats good. You know what im talking about . The guy married to gisele . Thats brady. You know what . Thats good. Youre coming along. You know that much. Thats good. Tom brady. You know who russell is married to . I dont know who russell is. Russell sherman . Know. Not jack russell, not a terrier, no Russell Russell wilson. My husband will be so mad at me right now. When we come back, busted. A 30 million counterfeit sting results in nearly 50 arrests. Details next. And preparing for the Trump Administration. Aeis kevin hasset joins us. And before we go to break a quick check at whats happening in the european markets right now. Is happening before our eyes. Shift in Human History sixty to seventy Million People are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. Partner with pgim the Global Investment management businesses of prudential. Amazon is offering exclusive deals for people who order through alexa. Amazon offering deals for those doing preblack friday shopping. Simply ask alexa, what are your deals. Apparently that wording is important. One of the featured items today is a 32 inch samsung tv. I cant do it. You have an echo . I have an echo. Its in the box. It was in the house, now im so nervous its in the garage. Because i dont like all the microphones on. I dont know about you, but you can you imagine a hot mike all the time with you . Can you imagine . I cant. What are you suggesting . Anybody anybody, its scary. Ive never turned it on or plugged it in. I still think its listening. Now its out in the garage. It makes me nervous. Those security cameras in the house, they make me nervous. Alexa, do this. Shes listening all the time. She can listen and hear that shes hearing everything. Right. Right. Potentially being recorded somewhere, but its on the cloud. Right. I know. If you dontdont those transcripts can be hacked. I hear what im making for dinner. Okay. Thats what i talk about. Police in peru seized almost 30 million in u. S. Counter fit bills. Its the biggest fake currency bust in perus history which is significant. Peru has been labeled the Worlds Largest manufacturer and distributor of counterfeit u. S. Currency. Who knew. The bust resulted in the arrest of 47 peruvians and two ecuadorians as well. Coming up, closer look at the tax changes we could see under President Trump. Kevin hassett joins us next. As we head to break a look at yesterdays s p 500 winners and losers. It was wonderful. Bravo. I love that. That was great. Pretty good. Wasnt bad. Parts werent very good. Could have been a lot better. I didnt like it. Was terrible. It was bad. Awful. Hey, boo this car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. They are the natural borns enemy of the way things are. Yes, ideas are scary, and messy and fragile. But under the proper care, they become something beautiful. President elect trumps Transition Team working to fill the cabinet while on capitol hill speaker ryan and team trump discuss how to pull off what might be the biggest u. S. Tax overhaul in years. Joining us now to talk about what the president elects tax plan would look like, American Enterprise Research Institute director of policy, kevin hassett. How are you doing . Early, but doing great. Youre not quite like the bill crystal what is his organization . What is that money losing thing hes got . Weekly is that the Weekly Standard . Thats a great magazine. You should read it. Its good. Yeah. Yeah. You werent exactly like that at the aei, but you had quite a few never trumpers at the doesne any position. Every scholar has their own position. I was never a never trumper, joe. The individuals there were not particularly enamored of the kudlow report. Were they seeing romney come around there. And the establishment being welcomed back into the fold. Are they you know, some of my colleagues said some nasty things about trump and probably feel like they have egg on their face. If i have egg on my face, it was because i was a sloppy eater this morning. Ive talked about the policy the whole way. From my own opinion, theyre building a solid team. Theyre hiring people you would think they would. And some of the naysayers are admitting that, you, this is not ryan all of a sudden, you know, hes solid. And the headwind that trump was going to present for all the down ballot races, they all won. Since 1920 it hasnt been this republican. But people since 1920. But people love a winner, i guess, right . And the thing is every darn election since ive been watching this, everybody says theyre going to move to canada but then they dont, right . So sometimes we wish some of them would. But people are now getting used to it. And you kind of wish theyd follow through, wouldnt you . Kind of . The people that said it this time, i think that put trump over the top. I think people who saw it were saying i was i was still undecided. But if they move, thats enough for me, im voting for trump. So what gets through . Are there, like, tea party guys that are going to be so worried about the deficit blowing out that theyre going to have trouble bringing a tax the detail. And we might be about to have the most consequential tax policy year since the Second World War that the plan paul ryan put together is a big Sweeping Change in the tax code that would be so much better that if i run the numbers i think the dollar is 20 stronger, i think you have a wave of inversions because Foreign Companies want to have their headquarters in the u. S. Its a really, really big change. I dont think that markets have really digested how close we might be to having something that big happen. Right now the odds are probably at least 50 50 that a bill based on the tax reform actually becomes law next year. You know, your president is like the greatest you know i i read what he says and i just of aei. Okay. I wish i could just memorize everything he says for when im arguing with people. I cant. I forget too many things. But lets think about what aei stands for. Free markets and, you know, private sector and everything else. Who do you want for treasury secretary . What initiatives do you think president elect trump needs to do to further, like, the aei mindset and do you believe trump is on board with as an aei guy or does he want to raise the minimum wage . Does he want to do some of these things that seem, you know, sort of on the other side of the aisle . If you look at what president elect trump is saying right now, hes pretty close to playing out of the aei playbook. Hes saying stuff that i think traditionally scholars at aei would support. Hes talking about tax reform being a high priority. Hes talking about repealing the Affordable Care act and replacing it with things that are smarter. Hes talking about immigration reform. And he himself has said we need to stop sending the talented people we train at our universities home. These are all things that our scholars have done research on over the years. So sure he said stuff about trade to see wra thats going. For the most part the stuff hes listing is this high priority legitimative agenda for next year is going to be drying on a lot of the stuff weve been doing for years. Frankly im intrigued by the possibilities of the next year and quite hopeful. Again, people in markets need to really start to look at this brady tax bill. I think one reason why the dollar is moving up is its got a 20 move to make if that bill becomes law. Theres a lot of positive stuff going on if that stuff is legislated next year. Has anything trump or just watching the mood of the country, have you got a footnote on any of the trade policy at aei . Is it still just whatever happens happens globalization and free trade . We cant worry about any of the near term problems lets just go for it . Is there any word maybe we dont get taken advantage of or maybe theres something to keeping America First if you can . Things that benefit us . Is there anything to that at aei yet . I talked about this just a little while ago on cnbc with austan goolsbee. Austan a long time ago said free trade deals, im all for that. But a free trade deal should be one page. It should be free trade and there you go. But these are thousands of pages. Why do they have a thousand page ifs its a free trade deal . Because its not that free, right . If trump thinks that way, it could be a positive for trade. Right now i dont know. As president he has authority to impose tariffs and things. If he were to go down to path, for sure a negative. When was this with austan . Just a few weeks ago we were an cnbc together. Before or after the election . Before the election. Yeah. I dont think he i think hes still in that room with a bunch of playdoh, like a bunch of coloring books staying inside the lines. No. Oh, yeah. Puppi puppies. Come on. Hes such a pleasant person. I know he is. But hes in a safe zone where hes dealing with what happened and i think puppies golden retriever puppies are the best. If anybody does see austan, id like to hear hes okay. We chat on twitter. Hes got a huge lego thing hes built. Hes very nice. Im not saying hes not nice. Im just saying hes dealing with this the best he can. See you later, kevin. Thank you. Coming up, Silicon Valley joining. Were joined to talk tech under President Trump. And later on, Michael Leavitt weighs in. Squawk box will be right back 37 i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. Its been over 100 years since the first stock index was created, as a benchmark for average. 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This is how car buying was always meant to be. This is truecar. The trump tradeoff in tech land. Mark mahaney out with a report for his top tech picks under a trump presidency. The names, the price targets, and what hes expecting straight ahead. The dollar powering its way to its highest levels since 2003. Closer look at how the trump rally is affecting global currencies and what investors should avoid. Plus celebrity chef wolfgang puk puck is here to give us tips before the holiday. You really want to stuff it in here. In other words, you really want to pack it. As the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Boys dont cry. Thats another welcome back to squawk box here on cnbc. Im joe kernen along with Michelle Carusocabrera and mike santoli. The futures at this hour are about where they were, improved maybe a little. Down 13 now on the dow indicated less than 3 on the s p and the nasdaq continues to diverge. First it was weaker than the rest, now its kind of been playing catchup and its up about 1. 5points. Heres whats happening at this hour. James bullard leaning towards supporting a rate hike. Bullard says the real question is where it will go next year. Hes one of six fed officials will public appearances today. Amazon is about to roll out its Amazon Prime Video service in 200 new countries according to the wall street journal. Right now its available only in the u. S. , the uk, germany, austria, and japan. Following netflix around the world, i guess. Meanwhile, gap shares under pressure in premarket trading. The apparel retailer did see after the close but saw its seventh straight quarter of sales. You see the stocks giving back. Switching gears to politics. President elect donald trump has offered Michael Flynn the job of National Security adviser. Its unclear if hes accepted. He serves as the president s top daytoday counselor on foreign and military affairs. Former republican president ial nominee mitt romney will meet with donald trump this weekend. One of the issues to discuss, the secretary of state position. Thats according to a report from nbc news. Romney was one of trumps biggest gop critics during the president ial campaign. Meantime Newt Gingrich said he will not be in trumps cabinet. Instead choosing to focus on Strategic Planning for the emerging republican majority. I want to know what really happened with him. I want to know what really happened with ben carson. And i want to know what really happened with chris christie. Newt and donald trump to me seem to be very similar people. I cant imagine the two of them spending that much time in the same room for a long time. Newt was on board but then would say things during the campaign, some of which were like wow. Did you really say that . So i dont know what happened to that. But there could have been something in the cabinet. But he probably wanted state or something. Running an agency, right . You dont always think of i dont know if you want to be hes in his 70s. I dont know if you want to be working 16hour days, either, when youre of course, trump is 70. Hes going to be working some serious hours too. But it looks like hes up to the task. Did you see the campaign . So you dont think the reagan 9 00 to 5 00 schedule will be there. I dont know. I know how he campaigned which was pretty i thought there was more than one of him. Seven or eight things a day. Yeah. Speaking of which, president elect donald trump taking to twitter to announce that he persuaded ford to keep an automaking plant in kentucky than moving it to mexico. It wasnt clear the company was going to move to mexico in the first place. Phil lebeau joins us. Theres more to this story, right . Theres some nuance. Happens whenever talking about Auto Companies and their production plants. But donald trump can claim a victory here after saying youll see lincoln mkc, that production will stay in louisville, kentucky. Heres the tweet sent out last night by the president elect. He said just got off the phone with my phone call with my friend bill ford who advised me he will be keeping the lincoln plant in kentucky. No mexico. Well, lets do some clarification here. First of all, this plant overall where they also build the ford escape was never going to shut down, was never planning to move to mexico. Nor did ford publicly say were moving production of the mkc to mexico. However, when they redid the contract, ford did say eventually the mkc and its production may leave kentucky, where it goes from there would have been determined at that time. Could have been another plant in the u. S. Could have been a plant in mexico. But there was never any determination. Ford released a Statement Last night saying we confirmed with the president elect that our small lincoln Utility Vehicle made at the Louisville Assembly plant will stay in kentucky. Bottom line is this as you look at shares of ford, president elect trump can claim a bit of victory here by saying look i have locked in that youre going to have production of this small suv at this plant in louisville. And if youre ford you can say, look, hopefully this ends a lot of the public commentary that weve heard from president elect trump about moving small car production to mexico. Which by the way, guys, thats still planned. That has not changed. We talked with mark fields, the ceo of ford, just a couple of days ago and said were not changing that plan. We already committed to build small cars in mexico at a new plant and replace the production of those vehicles up in michigan with an suv and a small pickup truck. So this is one of those story where is itll be interesting to see whether or not this is the end of donald trump tweeting about fords production plants. Well have to see. Thank you. Rbc out with a report on their top tech picks for the Fourth Quarter and beyond. Silicon valley and the giants of the internet get ready for a trump presidency. Joining us now, lead tech analyst mark mahaney. Techs done well, mark. So has energy. So has domestic oil and gas production. So im not sure whether its been a tail wind or a net neutral. Speaking of net neutrality, think about things like that that maybe a president elect trump and a republican congress, are there benefits to that and other things that you see coming that will differentiate who wins and who loses . Yeah. I like the setup, joe. And good morning. Tech particularly some of these fang names dramatically outperformed last year. However, since the trump election youve seen a 5 to 10 selloff with the bigger names. The amazons, the netflixs. We think whats behind this is a rotational pull that look much more favorable of the Trump Administration. Whether thats health care, financials, industrials. Its probably not materially impacted. Thats our call based on a new trump presidency. But its less incrementally benefitted by this administration. Most of the things that we expect to see and its, you know, were really kind of guessing at this point, lower tax rates, most of those things are probably beneficial for Tech Companies as a whole especially for the internet stocks. We lined up our stocks again. Despite the amazon news. Second for us is facebook and third is priceline in terms of our preference. Kind of interesting. Initially i thought you were implying its like a zero sum game. Which i think it is to some extent if its on a might go into cyclicals or i dont know. That seems to be what you were saying. But maybe for other sectors and therefore money comes out of tech and goes into those. Is that true . Theres not enough money to go around . Yeah, ill lean on our strategist for that call. But thats the call of the firm that, you know, there is going to be there clearly are going to be policy changes that would have been different with a clinton administration. There are certain sectors that are going to be benefitted and its kind of hard not to see health care industrials as two of those. And if youre looking as Portfolio Managers are looking to reallocate to those, look at the best performing sectors. Those are likely to have some money taken out of them. How long is that trend likely to occur . In the tech sector with a couple of the names we look at, weve had a pretty good run in most of these. Were not pounding the table on them. That said, i find netflix extremely interesting going into a variety of reasons. Yeah, its our top pick. I just think in terms of Rising Interest Rates if youre riskfree rate of return and a 10year treasury moves higher and higher and higher and some stocks get a huge multiple. Uncertain earnings way out, it sells off, right . A lot of times tech seems resistant to Interest Rates because its got so many other great things going for it. I mentioned net neutrality, too. Do you expect how hard would it be to reverse that . Do you expect it to be reversed . And we heard at the time how negative it was for certain companies. Why wouldnt we see the convert, whatever. Why wouldnt we see the opposite of that if its possible its going to come off . Who would benefit . So, joe, im sorry. You did raise that first. I didnt answer the question. Net neutrality, we think its highly unlikely to have a change in that neutrality. But were you to have that with having that removed and have the cable operators, isps to charge more for certain amounts of traffic from some vendors than others, yeah that could be a potentially negative event for the real traffic generators. We think thats highly unlikely to happen. And theyre the ones that are done. Its gone to a new high in like four days. I just wonder, are you sure its not going to happen . Im trying not to be 100 confident about anything these days. But look at that. Whats that . If the other thing to keep in mind is the infrastructure costs for these companies over time band width, for tech those costs have plummeted over the last decade. And so just give you an example of netflix. If you look at where theyre expense items are, theyre operating expenses, most of that money they spend goes on content and marketing. And the infrastructure cost, the band width cost, its their cost structure. Its pretty small. Even if they had a radical change, i think its highly unlikely. It probably wouldnt materially impact the netflix or google or facebook p ls. Okay. Mark mahaney, thank you. Appreciate that. Thank you, joe. You dump all that crappy dow jones stock. Youre a comcast guy. Not anymore. But it was. My god. It didnt move for 30 years. Yeah. Did they sell that Company Great or what . Oh, my god. So do you have no. I never really well, did you move it in youre here now. Yeah. Company people usually want to have a stake in the company theyre working it might be a good thing. It might be a good thing. Did you see it . Ban huge winner. Its driving holding up the media. Youre not doing us a favor. I know. Coming up, the dollar rallying to a 14year high in the past few days. Were going to tyke a look at currencies and fiscal policy changes. Later, wol gang puck is going to join us. Hes opening up a new eatery. Plus were going to talk jobs and the consumer and more. Squawk box will return. Welcome back. Mario draghi speaking in frankfurt this morning. Will focus on whether inflation can sustain itself even if its exceptional monetary stimulus is withdrawn. We remain committed to preserving the monetary accommodation which is necessary to secure inflation towards a level below but close to 2 over the medium term. We cannot yet drop our guard. Went on to say still sees a, quote, significant degree of uncertainty there. The dollar touching a 13. 5year high. Yellens testimony yesterday to add to it. Joining us now on where the dollar and other currencies are headed, chief market strategist. Good to have you here. Good morning. Thats just, oh my gosh. How has your world changed since Donald Trumps election . You have the fed guaranteeing practically a is his mike okay . Should be. Now its okay. Sorry. You have the fed guaranteeing a rate increase. It looks very much like theyll speed up after that. You have the ecb saying theyre going to keep accommodation going for a number of years. You have donald trump planning on reinflating the economy. All things lining up are lining up powerfully for the dollar. Whats the best metric you like to use if i ask you where is the dollar going, youre going to quote me the dollar index . What . Does this continue . I would probably quote the majors. I think it does continue. I mean, what mr. Draghi said this morning kind of surprised me. Because he said that theyre going the economies in europe need support for yet a number of years. Not now, not next week, not six months. For a number of years. Thats a longterm rate policy right there. They have to be as far as their economy goes fairly pleased with whats going on. So parity. It is looking as if its possible. I would not have thought so but with what weve seen, the markets have all lined up on the line here. So emerging market currencies. Boy. So poor mexico. Mexico raises Interest Rates yesterday by 50 basis points and the mexican peso falls anyway. Would you buy that though . To me i think that thing has gotten hammered so much. Do you buy the pay toe . Not yet. When . I would wait until the emerging market currencies see a turn. Emerging market currencies have a problem because youre looking at weak Economic Growth around the world. If, however, the u. S. Starts to pick up regardless of whether its sustainable from spending, that looks much better for the emerging markets. Youve done stories about how much dollar denominated debt there is in the world in asia. So all of those countries have all of this debt thats getting a lot harder to pay back. Are we getting into something dangerous here . We are, but unless the markets notice it, it doesnt matter. So this is what im asking you. The contrast with last december, january, february when a strong dollar was one of the things we were so concerned about, why is it not setting off those alarms now . The markets been totally focused on the election. It hasnt been paying attention to anything else. It got it wrong as far as the result. So it reversed and then decided it was a good idea. Think about what happened with the yuan this past year. Equities took a real punch. The yuan is now lower than it was and nobodys paying any attention. And today we got headlines that suggest theyre going to let it go. I dont think its what the market is focusing on. What if its that back when it was rising before it was in tepid Economic Growth. Oh, we have all these head winds and now the dollar too. And now its different. Now the dollars rising because of the believe the economy is getting better. And high yield was blowing out for that reason. What youre getting is a period of very rapid and uncertain adjustment about what is going to happen both with the u. S. Economy, with u. S. Policies theres always in the background trade policies. I dont think trade policies are going to change all that much. Nevertheless, everything is adjusting and is adjusting to the Dollar Strength right now. If you have to put the World Economy is not very strong. If you had to bet against a strong dollar or a strengthening u. S. Economy to drag the rest of the world along, i think markets will go with the strength in u. S. Economy and that will end up being a benefit. Why do you think its so obvious . What are you pointing to . The one day so the letter came out. You know how many people can move a market 300 points . Youre right about that. It wasnt a big adjustment. Then even on the night of where it had that threehour move, it almost looks like the dumb money figured it was going to go that way and the unbelievable amount to turn it around like that and have it still continuing now, thats where the big money is coming. Youre right about that. The adjustment that took place both from the 28th to the 4th is a reasonably small adjustment. Do remember that the futures overnight in japan. Then it reverts and went back the other way. I agree with you it wasnt a big now the big money is there. Its spoken. Thats right. Okay. All right. Thank you, joe. My pleasure. Coming up, stocks to watch including yum brands. Check out the futures at this hour. Were going to talk markets when we return. Theyve gotten less and less negative which means more and more positive i think. Has to do with whole numbers and stuff. Remember . Squawk box will be right back. Aflac isnt Major Medical enough . No whos gonna help cover the holes in their plans . 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Youre a spokesmetaphor. Yeah. Ok. See how voya can help you get organized at voya. Com. May not always be clear. But at t. Rowe price, we can help guide your retirement savings. So wherever your Retirement Journey takes you, we can help you reach your goals. Call us or your advisor t. Rowe price. Invest with confidence. Welcome back to squawk box. Here are some stocks to watch this morning. Yum brands is adding 2 billion to its Buyback Program which will run through the end of next year. This is whats left on top of the 4 billion Buyback Program. William sonoma reporting lackluster sales for the quarter. Continues to face weakness at pottery barn. Same store sales falling 4 . And ross stores beating forecasts. The retailer benefitting from revenue growth. Also raising full year guidance. You guys are going to see why they gave me this read. Coming up, Isabel Mateos y lago. Right after the break. Is it a force of nature . Or a sales event . The season of audi sales event is here. Audi will cover your first months lease payment on select models during the season of audi sales event. bing this is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. Did yon your prescriptions . To save up to 95 introducing blink health. Blink has negotiated some of the lowest prices so you can get your same medication, at your same pharmacy, for a lower price. Just go to blinkhealth. Com, pay for your prescription, and pick up at your regular pharmacy. Blink is accepted at nearly every pharmacy nationwide. Go to blinkhealth. Com and get 10 off your first purchase, promo code tv. A used car, truck, suv. Thats smart. Truecar can help. Its great for finding a new car, but you already knew that. Its also great for finding the perfect used car. Youll see what a fair price is, and you can connect with a truecar certified dealer. So, no matter what youre looking for. There it is. This is how buying a used car should be. This is truecar. Among the stories front and center after a flood of Economic Data this week, just one report on todays agenda with leading Economic Indicators out at 10 00 a. M. Eastern time. Predicting the index will rise just 0. 1 for october. Volkswagen will cut 30,000 jobs following the emissions scandal. So far vw has paid about 19 billion in settlements to consumers. Tesla and solar city shareholders have approved the proposed combination of the two elon muskcontrolled companies. Would see tesla buy the solar company. Lets get back to the markets. U. S. Stocks on track for positive week. The futures right now looking like theyre actually strengthening a bit from the prior hour. About flat exactly to the s p 500. Going to digest those games a little more the last couple days. Joining us now Isabelle Mateos y lago. What a time to be a multistrategist. Absolutely. Tremendous moves in bonds, currencies. Really a lot in for stock markets. Should investors chase these moves. Is this the new world. Should we assume that the market has it right here . Whats interesting is actually if you look a little bit further out, this rotation in the market really started around july. This rotation in steepening yield curves, rotation into financials, into more cyclicals out of momentum stocks. And what weve seen is with the election an ak sensuation of it rather than a dramatic turn. So in that sense, its probably fair to expect this to but it has further to run. At the same time in terms of your question has the market got it right here . There are there are things that are a little concerning in terms of almost schizophrenic interpretation of the developments. For example, theres sense that developed markets, stock markets seem to think this is all good news. Theres much higher growth ahead. Great, lets power ahead. On the other hand investors in emerging markets seem to have thought the news was entirely bad. Presumably because of fears of protectionist agenda. That agenda gets implemented, this is bad for developed market as well. Hold on. One thing. Emerging markets go down. Thats been true for a very, very long time. Right . Why is that not true now . Well, theres an element of truth to that. If the dollar goes up, this tends to hurt emerging markets. But emerging markets are much less vulnerable to these developments than they were in the past. They have lower denominated debt. They have scope to ease Monetary Policy if need be. And theyve been powered by very strong inflows. So, you know, okay. This is a head wind for them. And theres high Interest Rates, but nothing lethal. Nothing that would justify with the kind of pullback in valuation. So there has to be Something Else. In our view, this is the fear of protectionist policies that have been talked about during the campaign. And in our view, this fear should exist also in developed markets. It doesnt seem to be there right now. One of the more profound interpretations of what the markets have done the last couple of weeks is this reawakening of inflation expectation. Its not just growth might be faster, its reflation. If not inflation that we have to worry about. Is that something thats going to continue to roll on . Well, well have to see what policies actually get implemented, right . For now everybodys guessing. But i think youre right, markets have definitely decided that deflation is out of the way. No longer something to worry about. And how much inflation we do get, this is something we have to see. Obviously theres a lot of fiscal stimulus. This is an economy thats essentially at youre going get inflation. But how much were going to get, i dont know. So we cant operate for a little while in that comfortable zone or we just dont know . What were going to do in december which i think is nobodys guessing about what anymore. And youre right the question is how many rate hikes next year. And here again the fed will probably be guided by the data and again how much stimulus we end up getting. Will be very important to listen to out of the next fed meeting is how much comfort would they have letting inflation run a little hot. That we dont know. In the past theres been insinuations they would be comfortable but exactly how much. Can we export inflation where, like, we sort of spread it around and share it . I mean, it would be good some places. That would be very good. Absolutely. Im sure right now the folks at the ecb and the bank of japan are thrilled. Yes. Japan, i mean, maybe they were early to tell us what we were going into and havent had any for so long. If they ever do solve it, it wouldnt surprise me if we solved it for them. When i look at your Asset Allocation around the world, youre neutral on the United States, neutral on japan, overweight the emerging markets. Thats the Asset Allocation you want have right now. It runs contrary to everything weve seen since the election. Right. Well, this is a period where everybody sees what is coming out of this election 37 its hard to get really enthusiastic about any part of the world right now. Valuations are really stretched everywhere. Would agree with the recent Market Sentiment that the u. S. Probably the growth differential with the rest of the world is going to increase and that should be positive. But again, valuations are already very high. And if we end up in a world where inflation picks up faster than growth or the dollar shoots up faster than the corporate sector can digest, it will be very good. Its not all of a sudden theres huge scope for a boom in earnings. We have to be cautious. Emerging markets did have a very good comeback in the six or eight months since the winter as well. Absolutely. Very big in terms of flows. Maybe just about a quarter to a third recouping the outflows of the previous year. So we think theres still some room to go there. Now, obviously if theres a trade war, it will be bad for emerging markets. But if the u. S. Powers are ahead, this is going to lift everybody. What do you do with your fixfix ed income . Short duration. Were a bit cautious on that. We may have found the end of the 30year bond bund market. I think this is going to be from here on. Is there any part thats safe . Can you stay in corporates . I mean, if youre going to hold until maturity and you like the Interest Rate, i suppose its okay. But if youre worried about what the bond does, is there anything thats safe . Like i said short duration is the name of the game at this point, yeah. Isnt there some pace speen twe 30year bond bull market is over, the lows and yields are in and were not necessarily going to shoot up to historically normal or high Interest Rates. Absolutely. Thats the whole. There is a feel good story there. And thats why one has to hope you dont, you know, throw this economy into overdrive with massive overshoot in inflation, sense of everybody losing control in which Interest Rates i mean, what you dont want to have is a sense of a fiscal runaway. Then you have the longterm end of the curve that picks up. And then that would really be bad both for bond markets but also obviously for stocks. Sure. I keep saying we started the year with the 10year treasury at 2. 27 i think. It feels were up huge. It does. Its that last twoweek move which has been so dramatic. And of course at 3 in 2013. Right. Thank you very much this morning. Thank you. Okay. Looking at this, i havent seen it myself but im being told theres news from the trump Transition Team. President elect has extended an offer to senator Jeff Sessions to be attorney general. To be attorney general. And theres quite a bit written about senator sessions going back to some previous confirmations and judgeships from 35 years ago that people are talking about. So this is interesting. It was said that because of being the first sort of establishment figure and senator to back donald trump, that he had his choice of positions. I dont know whether that was necessarily true. Whether he could have got secretary of state if he wanted it or defense. But who knows. But at this point were talking about attorney general. When we return, its that time of year when people Start Talking about stuffing turkeys and making the perfect side dish. Wolfgang is here. Well tell you about that, my experience with Wolfgang Puck goes back 30 years. Were going to talk about his new restaurant. He joins us next. Top of the hour, former amr chairman don carty talks about the thanksgiving travel rush. Warren buffetts state in the airlines and much more. Squawk box will be right back. When whirlpool builds an appliance, they put everything they know into it. But once its sold, there usually isnt a way to keep improving that product. Today, whirlpool can analyze iot sensor data from connected appliances on the ibm cloud. So they can continuously learn how customers are using their products. And how the machines respond. Harnessing data to make great products better thats what the ibm cloud is built for. Harnessing data to make great products better whmade plastics that tmake them lighter . Rs the lubricants that improved fuel economy. Even technology to make engines more efficient. What company does all this . Exxonmobil, thats who. 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Find out how American Express cards and services can help prepare you for growth at open. Com. Mcdonalds rolling out its restaurant of the future nationwide. It will now offer Table Service in the u. S. As well as introduce mobile pay and selfordering kiosks. Steve easterbrook on cnbc. We asked our Business Model for the best part of 60 years and weve been successful at doing that. Now customers and consumers in general are demanding much more control over their lives. We need to adapt and evolve our Business Model to fit around our needs. So for those that want Table Service. Frankly each time we convert a restaurant in the u. S. , business picks up. Customers come back and enjoy the experience and come back more often. Heres how mcdonalds shares are doing. Marginally higher. Theyre up about 9 for the year. All right. And totally on the other side of cuisine and food and restaurants and everything. Go from mcdonalds to Wolfgang Puck, weve got to make a clean break. With less than one week until thanksgiving, food is on most peoples minds. Lets bring in Wolfgang Puck. Recently opened his first restaurant in new york city. Its a contemporary sleek steak house. And its not the first cut but its the first cut in new york city. Its the sixth one of the steak restaurant. Its in the four season hotel downtown. Really a new beautiful hotel. We have great artwork. My wife is an art curator. But the main thing is the food service. Unlike mcdonalds, look at that stock. We look at food and service. How long have you been married . Ten years now. I met the other wife. What . I met the other wife. 30 years ago youre talking about . 30 years ago you were on a dunn and bradstreet. I got in to see you and i did not i was not a closer. You didnt open an account with me but i was out in your office on horn. Sunset and horn. Exactly. We started in the 80s. I was trying to get there. But wed both be richer. Okay we eat well and we drink well and be healthy. Will there ever be another like that one . I met tony curtis. I met joe pesci. Every night it was unbelievable. You had it going. Well, i think you still do. We still have a lot of clients except some of them died off. I was here last night with Ryan Seacrest and some other people. So we know so many people. They all come to our restaurants. And you know what my favorite this is like really bad. Im like brian sullivan. The catfish on main. Still there after 33 years. You know in the Restaurant Business where upscale restaurant come and go like crazy, to be still good 35 years after you open, you know, and still be relevant is really important. So we go through all these changes and open new restaurants. Im excited to be here in new york. Many times people asked me to come to new york i said no. Finally i thought the timing was right. And i really love downtown. It is so different from midtown or anywhere else. Why is the timing better now . For me sometimes the real estate wasnt right. Sometimes i didnt have the people. Like now i have two chefs raymond and andrew who are with me for ten years and theyre really talented, young, and they are the future. The young people, you are the future, you do the changes. So im really happy to be here with the right people in the right place. How do you do steak better in new york . We do better than most of the steak houses. Why . Because we actually have a wood burning grill. And we grill them, we make up our own seasonings. And then we grill them over wood fire. So you get this smokey flavor which is so different than just under the broiler. And under the broiler, the meat dries out on top. So with the grill, it really seals it and gives it this smokeyness to it. How big is your empire now . We have 27 upscale restaurants. Wow. From bahrain to istanbul to london. And in the airports. Overall we have a hundred restaurants and we have a big Catering Company and were Licensing Company like i sell things on hsn. So i keep busy. Whats the harder part . The chef part or the business part . My love is the chef part. You know what . If i could do only one thing, it would be cooking all day and forget about lawyers, accountants, and things like that. But it is the Restaurant Business so i have to take care of business. We have to make money to stay in business. So we have to watch every penny. So its really important. So you got all the different cuts, right . You got obviously filets, new york, primes. And meat from different countries, different states here. We have a farm from idaho which i know well. And i go to visit wherever they produce beef for us. Whats your favorite steak down there in what kind of sauce . I like the snake river from new york. It is a cross in between the black angus steak. What kinds of side . Like au gratin potatoes . Sauteed spinach, chocolate souffles, modern banana cream pie. What makes us different from all the other steak houses is we have real talent in the kitchen. So we have great appetizers from different kind of sashimis to salad with dates and so forth. And then great desserts. I am from austria, i love desserts. I feel bad for so many europeans who are stuck in these economies where opening businesses is so hard. Could you have done what youve done here in europe . I think especially not in austria where i am from. Near where . I grew up in the southern part of austria on a farm. Now everybody talks about farm to table cooking. I grew up on a farm so thats all we had. My mother made vegetables. She went in the garden and picked and cooked. Tough to do that here, right . I think america, not for nothing called the land of opportunity. I think because we have so many different cultures here and so many different cuisines altogether, america is probably the most exciting place to eat out. You go to paris, have a lot of french restaurants. London is great too. They love french restaurants. Its weird. Espago in Beverly Hills still open . Actually, it is amazing. We opened in 82 on sunset and moved 19 years ago now. I must say, last year was our best year since we opened. So im really proud. The new when you make more money its big. But the old one was old or young. We had more fun. We go out. You were not married. You had girlfriends. You did know him. Yeah. I think the new one is so different, but for us in the kitchen its better because we have a bigger kitchen. We can do more things. Table near a waiter if i come down there . Okay. You can get a table. We could do squawk box from down there. Youre right. We should do it for breakfast. Its perfect. We open for breakfast, lunch, and dinner. You do . Yeah. Because we serve the hotel. We are the only restaurant at the four season hotel and on top of it you can get an apartment and call service and might sell you a condo. Are you affected by the minimum wage increases theyre talking about and all the forced remember all the restaurants have gone through no more tipping and it disrupted everything. The minimum wage is creeping up and i believe it should. In a big city like los angeles and San Francisco or especially new york, its impossible. So i think 15, it should be. At a National Level . Well, 15 in a small town is small than 15 in new york. I think it should be regionalized. But also i think when you look at the restaurant, if they have tipping not where everything includes. A waiter can make 300, 400 a night. But for the dishwasher go from 10 to 15 means a lot. You should write not a cooking book. You should write a book about is there anyone you didnt know in hollywood over the years . I think i met a lot of people. A lot of great people. Off lot of stories too. A lot of stories. Its not good thing to talk about. Pen nobodys going to show up in my restaurant. Discretion is key. I think when people come to a restaurant, we respect their privacy. I know most of the people so i talk to them. If its from all the president s or king of sweden that came. Then i saw him and said you remember me, he just looked at me. You remember in the first die hard the guy is trying to impress the girl. Wolfgang, hes a personal friend. Remember that . They were talking about you. Yes. Good to see you. Well see you there. You come down, yeah. Sure. Thanks. Great seeing you. Coming up, stocks to watch at the open on wall street. Check out the futures at this hour. Suggesting a positive open. Dont move. I had to leave my happy home in exile oh which way should i go . Home is where i want to be home we love being green. So the nest learning thermostat connects to your phone, and learns what you like, to help you save energy. And thats something everyone can appreciate. That is awesome. Got the musician transition to the orchestra. Lets taic a look at some stocks to watch. There we go. For me this never gets old. Theyre just so happy. Arent they . Carl hated it. I dont know. Foot locker above estimates. Revenue in line with forecasts. Same store sales was a little bit shy of consensus estimates. Wells fargo was downgraded to underperform from market perform following a 15 jump in the stock since the president ial election. Bemo says the stock price no longer reflects the ongoing uncertainty from the banks sales practices scandal. Another big hour of squawk box straight ahead. Top of the hour we talk airlines, the upcoming travel holiday season, what the airline wills look like under a trump presidency, and Warren Buffetts stake. Don carty is going to join us. At 8 30 ed lazear joins us to talk fed, the economy, and more. And about 8 40, its former governor Michael Leavitt on the trump transition. Squawk box will be right back. Attention are you eligible for medicare . The medicare enrollment deadline is just a few weeks away. 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A rundown of the potential picks straight ahead. New this morning, a made in America Iphone . Apple reportedly exploring to move production to the United States. Plus a Record Number of travelers will take to the skies this season. Well tell you what it means for the Airline Stocks as the final hour of squawk box begins flight u. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc. Im joe kernen along with Michelle Carusocabrera and mark santoli. The futures have turned positive in the dow and s p and being slightly negative most of the morning. And the nasdaq was up maybe 1. 5 or 1. 25. For me. Its not for you. Yes. Pointed at me. Anyway. It was up a little, the nasdaq was. 45 now on crude. It ran up to 50 and i thought that was weird, santoli, that it came down as we thought the economy is going to take off. Yeah. Which has to do with opec and it has to do with more production coming online. Exactly. Oils been the one that hasnt gone along with the script with copper soaring, steel, iron. All the things thats more levered to i think near term production is up there. Oil is a slippery message based on opec. But if you think donald trump is going to allow more drilling, youll get more supply. Zbluld think that. Making headlines this morning, 23. 6 billion in stock funds. Thats the largest weekly inflows on record. And we got data showing there were outflows when it comes to bond funds. Mario draghi speaking in frankfurt this morning. Focusing on whether a recovery can sustain itself even if its exceptional monetary stimulus is withdrawn. We remain committed to preserving the very substantial degree of monetary accommodation which is necessary to secure a sustained convergence of inflation to a level below over the medium term. We cannot yet drop our guard. Nothing better than a central bank sound bite, right . Draghi says he still sees a significant degree of uncertainty for the economy. Fed speakers also out in force today including st. Louis fed president James Bullard. He says hes leaning towards supporting a december rate hike. Bullard said the real question about the path of rates is about the path of rates next year 2017. Bullard is a Voting Member of the fomc this year which proves joes point once they raise in december, then bestart asking when is the next time. Its good for us. Think of how many quarter points we get to sweat until we get back to normalized. Maybe start going more than a quarter at a time. But whats normal . Not soon. Heres the things. The fed spent of this year redefining what normal is going to look like in terms of rates. Theyve been down playing how high rates can go in the short end. Now they had that rhetorical walkback for a few months before we start to readjust. I thought it was kind of funny, charming, ironic. Janet yellen suddenly worrying about inflation. They wanted it so bad. Now shes talking about these trump policies potentially being inflationary. Him theoretically being able to achieve what they havent been able to achieve for a decade. Im in the new normal. And the savings glut. And this supply glut or whatever you want to call this stuff. Maybe it wasnt the new normal. Maybe it was the new abnormal. Maybe if we do roll back some of this stuff, maybe it was the new abnormal. Because to think we cant do it better than 2 . Maybe. Im sure you can bend the line a little bit. I do think, though, ultimately it can be between with yellen and if we do get this stuff. It will give them a lot of head room to try to get rates up to where they think they should be trying whatever they consider normal. And some news from the trump Transition Team. So its been a week and a half. So this is early to actually i guess is it official though the president elect apparently has extended an offer to senator Jeff Sessions to be attorney general. And he has accepted. Thats according to nbc news. And that does mean i think reagan was the sixth week after he was elected. Sixth week after he was elected before the first cabinet member was named. Things moved slower back then. You sent letters to invite people to a job. Talk about disarray. Do you believe anything you read or hear . I take everything with a grain of salt. How many names got floated out of the reagan transition camp in the first couple of weeks though. But if i believed everything i heard in the year leading up to the election and then i saw what actually happened Election Night and thought of everything that i was sure was a fact, how much of it was a fact . Not very much. I think they go right back where they are. Did you care he went to 21 without the press . I think its an issue if he shakes the press pool on a regular basis. Definitely. Wouldnt you . I wouldnt run. Nbc is reporting Michael Flynn has accepted the job to be National Security adviser. Theres two supposed acceptances. News just breaking again president elect trump has offered the cia director position thinking about this last night watching. This guys well thought of. Congressman mike pompeo from the state of kansas. And nbc confirms that pompeo has accepted that offer. All right. So we got do you think cia and National Security, they are cabinet positions. Pretty senior. If not cabinet departments. Yeah. Former republican president ial candidate mitt romney will meet with donald trump this weekend to discuss the secretary of state position. That is according to another report. Romney was one of trumps biggest gop critics during the campaign. Meantime Newt Gingrich told nbc news he will not be in trumps cabinet. Instead choosing to focus on Strategic Planning for the emerging republican majority. Stocking to watch this morning, abercrombie and fitch falling short on the top and bottom lines. Same store sales falling more than expected. Poor performance in seasonal categories and the overall challenges of the companys rebranding effort. Foot locker earnings topping estimates. Increased store sales. That stock is off 2 in the extended hours trading. The buckles earnings and revenues missed the mark. The same store sales dropped more than expected. That stock is off by 5. 5 . Gaps Third Quarter profit falling 18 and posting seventh straight quarter of declining skaels. Its still struggling to draw shoppers into stores. They plan to close 65 stores. Originally thought they were only going to close 50 stores. Ross stores beating the street on the top and bottom line. Retailer also reporting same store sales increase by 7 . Well above estimates. But its giving cautious Current Quarter guidance amid what it calls promotional environment. That stock is higher by nearly 4 . Williamssonoma calling the sales environment less surgeon. That stock off almost 3 . Earlier this week we learned that Warren Buffetts Berkshire Hathaway is taking stake in four major airlines. Thats a change for buffett who soured on them 30 years ago. He didnt give me his number. The managers number. I called that one. When i used to get were talking about Wolfgang Puck who was on about 20 minutes ago. People youre at the bar, someone giving their number. It never worked. I never got one. Don carty the former chairman and ceo of amr corp. And american airlines. Id get six dij et phone numbers. And youd be like, wait a second. Don, good to see you. Can you believe that . Is the industry that changed that Warren Buffett now wants to invest in it . Can you go over the changes that you think make it much more attractive now to him . Well, its good to be with you this morning. Obviously Warren Buffett didnt consult with me but i think he has seen something change in the industry thats very substantial. That is restructuring that occurs as part of this consolidation has put the industry in a much better place with respect to the balance between supply and demand. And the airlines are benefitting from it. And generating the kind of cash flows that resulted from the kind of restructuring that occurred in the Railroad Industry years and years ago. Obviously mr. Buffett has done very well in the trail industry. I think he sees the change thats occurred in the Airline Industry and sees the same kind of opportunity for these companies to not only generate a considerable profitability, but considerable cash flow. They can screw this up, cant they, don . Isnt that usually what happens when pendulums swing even with copper. Wow, its worth a lot. Lets get a lot of new production online. Then no, weve got too many production on. Doesnt it happen that way . That they find a way to screw it up . I think potentially the business remains cyclical. The question will be what happens as the economy shifts and demand drops. Does supply still stay at the same level which inevitably would lead to an imbalance. I think with fewer competitors and the opportunity to be thoughtful about capacity, thats less likely to occur. Well see what happens. But its unlikely to happen i think in the short to medium term. If anything the economy still seems to have some legs to it. So i dont think well see that kind of slowdown. But the question you pose is a good one. What happens when the economy does slow down. These three or four major carriers that adjust capacity sufficiently to be able to remain profitable and continue to generate cash flow. Much as the Railroad Industry has. Slowed down tremendously from a year ago. But nonetheless, those Companies Continue to generate profitability and cash flow. Its very important to the public that we have a viable industry. And its not quite like power like a utility or something. But it does the public good depends on the airlines being in good shape, but also it depends on people being able to afford it. So i know that their Profit Margins arent, you know, out of sight and for 20 years they made no money. But is the if the shareholders gain of the airline do the consumers lose . Does it shift too much to where the corporation and shareholders are doing better and they should be making less money and the kumpl should be getting a better deal . Weve gone through a period of history where there were good deals. I think there will continue to be deals out there for consumers. Theres always an airplane with an empty seat. But i think there will be fewer airplanes with fewer empty seats. Therell be a little less opportunity to avail yourself of the heavily discounted fares. Yes, theres been a shift, i think, from the consumer to the shareholder. But i think its one that makes the industry more sustainable in the long run. Don, what did you think of the move for united saying if you bought the cheapest fair class, youre not going to be allowed to bring on any more carryon . I think i get it. When you sit in the back of the plane, almost all the overhead is full when youre on. So its an acknowledgment to check your bag. But does it inflame this have and have nots feeling in the world right now . I think to some degree it does. I grew up in e the industry kind of old school where everything was bundled and there was a price and you knew what to expect and you know what Service Level to expect. And i think we are seeing a pretty dramatic change. But it seems to be driven by the market. I think people that really get a bargain to get on that airplane are going to come to understand that maybe not overnight that the consequence of that tremendous bargain, being able to take the family to disney world at a very inexpensive price comes with some consequence. And that consequence is you dont get quite the level of service. And you dont get quite the same level of accommodation and somebody pays a substantially higher fare. So the other thing, don, is that the number of carriers on different routes isnt consistent. Some of them have a lot of competition. You know, the well traveled routes. You figure theres real free Market Competition going on there. Based on the way the government gives slots and route okays in different airports, theres some less well traveled routes where it seems Like Airlines can charge whatever they want. Is that just a cost to the consumer cost of doing business, cost of being able to go to sioux city or Something Like that or a smaller airport . Joe, i think that there are some routes where there isnt as much competition. For i think the reality of the business is they can shift assets quickly. Theyre going to have competition. The number of places where the industry is constrained tends to be limited and it tends to be focused on some very, very big metropolitan areas like new yorks and chicagos and los angeless. Those markets generally have pretty good competition. I dont think the infrastructure is dramatically constraining competition. It is making new zri at places like los angeles and chicago and newark and kennedy a little more difficult. But those are the only places where the infrastructure is substantially constraining competition. All right. So when you say about and house and stuff, is that dallas . Where did that come from . Im afraid that part of my history, joe. I grew up in canada. You dont say. Which part . Well, i grew up in montreal and toronto. I took on u. S. Citizenship in the 80s. Thats what i hear. You say you took it out. Im an immigrant. You joined the party downstairs. Thats right. Don, thanks. See you later. Thanks. Good to be with you. Coming up, why one investor is betting on a battered bank and chip maker. And well get top picks from a platinum portfolio member. Stay tuned. Youre watching squawk box on cnbc. A used car, truck, suv. Thats smart. Truecar can help. Its great for finding a new car, but you already knew that. Its also great for finding the perfect used car. Youll see what a fair price is, and you can connect with a truecar certified dealer. So, no matter what youre looking for. There it is. This is how buying a used car should be. This is truecar. Welcome back to squawk box. Several major appointments just out from the trump Transition Team. Senator Jeff Sessions has accepted trumps offer to be the next attorney general. Retired general Michael Flynn has accepted the offer to be trumps National Security adviser. And congressman mike pompeo has accepted the offer to be the next cia director. The director of the cia. I know we have a picture of him because we showed it once but youre looking at me. I wouldnt know where to start at the cia. You are no mike pompeo. No. I wouldnt want that responsibility either. So what happened to that picture . We had one. So some other possibly related well find out maybe, but a made in America Iphone could be on its way. According to reports from the nikkei asian review, apple asked two key assemblers to look into making the phones in the United States. Citing one source, a source, the newspaper said that foxcon was willing to comply but pegatron declined due to cost concerns. Both Companies Make iphones in china. President elect donald trump has been vocal about American Companies not manufacturing in america. Specifically calling out apple. Apple declined to comment on the report. Lets take a look at todays platinum portfolio picks. Saras portfolio is up over 18 this year. Coming in with a good head of steam looks like performancewise. Weve seen all these shifts. Maybe they were percolating before the election. But from big stocks to small stocks from Growth Stocks to value stocks. From supposedly safe stocks to cyclical ones. Does it make sense . Is it going to continue . Wyes, it will continue. The reason why value is back is because weve seen the whole Interest Rate curve shift upward. Its happening in the u. S. U. S. , uk, European Union Interest Rates are all correlated. So whats happening in the u. S. Is reflected abroad. This is great for banks. Industrials, those companies that are involved in the expansion in the emerging markets. Theyre all benefitting. And we own them at causeway. You own them because they were cheap . Yes. Not just but undervaluation, you learn this in your career is never enough. You have to have companies that are well managed, have excellent balance sheets. They were all sort of hiding, unpopular because investors until just the beginning of this year were preferring the low volatility, higher yield stocks. To the novice viewer, explain. Why is it when rates start to rise, value more attractive and go go momentum stocks are less atrackive . Value stocks may be becoming momentum stocks. But for that novice viewer id say the rate rise is anticipating a bit more in the way of economic vitality. Thats what you need with the value stocks of today. Value stocks since the Global Financial crisis since 2008 have largely been cyclical stocks. Sensitive to the Global Economic cycle. And those stocks have been left behind. They were risk averse. But now looks like the Economic Cycle and one of the big catalysts at least for the u. S. Is perhaps lower Corporate Tax rates. That would be an enormous boost. One of the reasons you bought alphabet was it could grow into any sort of economic environment opposed to cyclical stocks. Barclays seems like one of your picks that you dislike for lots of reasons. Right . Had. Despised. It was trading at crisis levels we thought unjustifiably. Then we had the brexit referendum vote in june. My colleagues who cover financials were convinced this stock had upside and we see with jess daly as the ceo, really excellent management. This is a company that is shedding unwanted businesses, improving their core bank has over 12 return on equity. Slowly but surely getting rerated. And now were seeing it again as yield curves turn up. Bank stocks like barclays are responding. And brexits not a problem. Well, well see. We will see. But we think the uk government will be rational. Will ultimately end up where we began which is in a cooperative environment with the eu. And uk banks having consolidated will be beneficiaries. All right. Sarah, thank you very much. Appreciate your time. Thank you. Coming up, jobs, taxes, and growing the economy. Were going to talk to former cea chairman ed lazear about what president elect trump should tackle. What he should tackle first once in office. Stay tuned. Youre watching squawk box on cnbc. Coming up, bill ackman with chipotle grill. The details next. Before the break, the futures. This is a flat open. Stay tuned. Youre watching cnbc. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. Welcome back to squawk box. Heres whats making head lines this morning. Investor bill ackman nearing an agreement with chipotle mexican grill. That would give him representation on the companys board. Thats according to the wall street journal. Paper says the agreement could come soon although such a deal could fall apart. Fiat chrysler recalling in the u. S. Trying to locate 30 that could be subject to fuel leaks. There are no injuries or accidents related to the problem. Cocacola selling its stake in its china bottling operations for about 1 billion. Coke had owned about a third of its bottling operations in that country. Wants to focus on making concentrate for its beverages which is a more profitable business. All right. Several major appointments just out from the Trump Administration. Or trump Transition Team. Its not quite an administration yet. Retired general Michael Flynn has accepted the offer to be National Security adviser. And mike pompeo accepts the offer to be the next cia director. And Jeff Sessions has accepted the offer to be the next attorney general. Joining us now former attorney general alberto gonzalez. It is good to be with you today, mr. Attorney general. Welcome. Good morning. Senator sessions has been actually has been a judge and i think has been on that side of things before he was a senator. Are you is this a good pick in your view . Well, ultimately thatll be up to the Senate Judiciary committee and then the entire senate of course as to whether or not senator sessions is qualified. What i can say and i know therell be some things in his background that have been cause for concern and those will be evaluated and im not going to speak to that, but i can say as attorney general i met with him as a member of the judiciary committee. He was fair. He was tough, but he was always fair. And i know that, you know, youre worried about the chances of confirmation. I happen to believe, though, that unlike judges which receive lifetime appointments, a president is entitled to his team by winning the election. I think donald trump should be given deference by the senate in terms of who he should have on his team. And so i would hope the senate takes that into consideration in evaluating all the issues surrounding senator sessions. Right. I think i saw some of your comments about candidate trump. You werent necessarily enthralled. What do you make of how things are going so far and the people he surrounded himself with and that are being considered for important jobs . Well, a lot of it of course is sort of speculation. Release trials and names of that sort of nature. I know theres been a lot of stories about disarray. Listen, this is a theres a lot going on right now. And i dont view this as unlike any other transition. Certainly its not an unlikely transition that existed in 2000 when president obama came in to the florida recount. Youre going to have a lot of people coming and going, names being floated, and names being knocked down. So i dont view this as anything unusual. I think its business as usual in terms of the transition. And just trying to get the Team Together. Its a difficult process. Its an exciting time. If you work in the transition, oh, my gosh. I mean, its so exciting to be part of an effort to shape the future of our country. All the people involved in this are rightly excited. Theres a lot of work to be done. I think everyone has done the best to try to help president elect trump put together his team. Yet we all have to remember he won the election and the people have said his ideas are the ones they believe in. He wants that team, theyll help him promote his agenda. What did you make of all the controversy surrounding the current attorney general Loretta Lynch with everything weve seen in the past three, four, five months . Its hard to really hard to comment on her performance because really i mean she was sort of missing in action. Actually in connection with the email investigation. Its one of the things that i have found most puzzling. You know, you would have expected when making his announcement initially about his recommendation, i think i would have expected i certainly would have wanted to be standing next to the fbi director with a unified front and have the fbi director present his recommendation. And then to say to the American People and the world, yes, we received a recommendation, we looked at the evidence as a prosecutor and we have concluded that were not going to move forward with the prosecution. That is the job of the prosecutor. What jim comey did, thats not the job of the fbi director. So the fact that the attorney general has sort of been missing in action with respect to the investigation to me has been puzzling and interesting and maybe she felt that after the tarmac incident with bill clinton earlier in the summer that she should recuse herself. But if thats the case, then she should have formally recused herself and then the Deputy Attorney general should have stepped in. I dont know. Its been puzzling. I dont know what i dont know because i dont know whats going on within the department of justice fop me its been unusual. Let me get right to it. If you are the chief Law Enforcement individual in the country, at this point do you think that Hillary Clinton that this needs to continue and that the attorney general, it would be his duty to take this as far as it goes from here on out . And do you think that president obama will pardon Hillary Clinton . I have no idea what president obama is going to do in terms of a pardon. And quite frankly, Hillary Clinton may say i dont want a pardon. Ive done nothing wrong. I dont want a pardon. She may take that position. I dont know. With respect to what should happen going forward, thatll be up to the attorney general. If Jeff Sessions is fortunate enough to be confirmed, im assuming its certainly within his prerogative to take the information gathered by the fbi and make his own assessment. I dont know whether an assessment was made by the attorney general Loretta Lynch. Maybe it was and she agreed. But i dont know that to be the case. There would be nothing that prevents the new administration from looking at the evidence and making their own determination to move forward. I am troubled by the notion that from the white house that would be a direction to do anything relating to an investigation that is up to the attorney general whether or not to do a further investigation. And then whether to prosecute or not. It makes it a little worried this notion that the white house is directing the department of justice to investigate direct in the department of justice to prosecute. Thats not the way this thing works. All right. Mr. Attorney general, we appreciate your doing this for us so quickly and giving us your comments. We appreciate it. Thank you. You bet. Byebye. Now to the coming Trump Administration and the economy. Joining us now hoover institutional senior fellow ed lazear. Hes the former counsel of economics at the white house. Good to have you here. Good to be here. I see you got up early so we appreciate that. So theres all this talk about whos going to be the treasury secretary. Youve been at the white house and seen treasury secretaries come and go. You have any idea of who he should pick or what the qualities of that person should be . Well, i certainly wouldnt suggest any specific names to the president elect. Thats obviously up to him to put his Team Together as you just talked about. But a good model i think that weve used in the past is someone from wall street. The person that was my colleague at the white house i thought did an excellent job was hank paulson. Before him steve reedman. Before him bob ruben. All those people were fine treasury secretaries that did come from wall street n. That does seem to be a pretty good model. I would say president elect ought to be looking pretty seriously in that direction. So Steven Mnucin worked at Goldman Sachs. Wall street can handle another treasury secretary. But considering the totality of this campaign, can that happen . I dont know about Goldman Sachs per se. But wall street is the place i would look to simply because the treasury secretary has to deal so closely with them. There are other obviously there are other candidates people that have been mentioned that are not Goldman Sachs affiliated. Youre right. When i say weve looked in the past and had a successful model, that doesnt mean youve got to get somebody from Goldman Sachs. But the point is you want someone who knows whats going on on the street. You want someone whos very closely connected to the Capital Markets. And i think thats better generally than using a political person, someone whos been in congress. There are some very fine candidates from congress as well that could do an adequate and even better than adequate job. But the problem is that they dont have the connections with the institutions that are actually doing the work out there. I tend to prefer someone whos coming from the private sector for that. Again, you know, thats the president elects decision. Obviously he can make it work in a number of different ways. You see janet yellen yesterday testifying on capitol hill . I actually just came in from tokyo, to be honest. So i missed that. Let me give you a highlight. She was asked if for any reason she may not serve out her full term. And she said not any that i could think of. What was implicit in there was the criticism from donald trump about her tenure. Is that throwing down the gauntlet . What should the president be doing thinking about the independence of the fed on the one hand and then what has been tremendous criticism of the fed for keeping interest rating too low for too long according to to some people . Right. Okay. Those are two separate points. In terms of independence of the fed, i think the president really needs to respect that. I know when i served at the white house, we were very cautious to make sure that we didnt step on the toes of the fed. And that was a time when interaction between the fed and the white house and treasury was much more important because we were in the middle of a financial crisis. Even then you need to give the fed its independence. And i think, you know, for the most part the Obama Administration has followed that rule as well. I hope President Trump will do that. So independence is extremely important. In terms of what the feds policy should be, i think were all in some sense regretting that were in this position right now where the fed is so far behind the curve that at the peak of a Business Cycle and close to zero Interest Rates. Thats completely backwards. Were out of sync right now. I think janet and all of the people looking at the fed probably wish that we werent there. But thats where wither. The question is what do we do going forward. I would be surprised if the fed doesnt aggressively move to get rates back to a more normal position and do it pretty soon. And almost catch up with the markets. Ed, glad to have you on. You got up early for us, thank you. Thank you. Up next, were learning more about whos in and whos out of Donald Trumps cabinet in waiting. Next well talk to governor mike leavitt about the president elects Transition Team. Squawk box will be right back. This is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. The trump Transition Team continues to assemble the president elects future cabinet. Joining us now former utah governor mike levitt. He advised both sides as the partnership for Public Service Transition Task force since spring. Governor, good to see you. Thank you. Nice to be with you. You also have seen all of the i guess the scuttlebutt about the disarray. I saw it presented on another network. They went over eight of the past president s. Maybe even more. And the first week after the election win, a cabinet member was named. And this is still early. A week and a half is earlier than just about every other administration. The Reagan Administration was six weeks before there was a cabinet member named. Does it look like its disarray to you at this point . As best i can tell, theyre very much on schedule. Theres a lot to do. And so you have to hit the ground quickly. But frankly, this transitioning from politics to governing, theres always just a little bit of gear grinding as you make that shift. And i think they seem to be making it. And theyre making progress swiftly. So where should we start . Weve got some news today. Michael flynn, congressman pompeo, and Jeff Sessions a senator as attorney general. Care to comment on any of those individually or we can then move on to the bigger ones like state and some of those other ones that we want to talk about. Well, i think the order in which this is done is significant and should be of interest. Typically the new president needs to choose a chief of staff and some key white house personnel very early because they need now to build out a team of about 110 people over the next 77 days. So that work will carry on somewhat independent of the president elect. The second task is typically to build the National Security team. Why . Because its the most important job of a transition nap is to prepare to resume responsibility for the security of the United States. And so the appointment of the National Security adviser, the head of the cia, very important appointment. I think will then begin to see other members of the cabinet as they roll forward. Probably wont be until early december if things stay as they are. Weve already seen the attorney general at least it appears that appointment will be made. But i think thats a good indication that theyre on track at least in the development of the cabinet. There are many other things that have to happen in the transition. But on that measure, they seem to be doing well. How about mitt romney coming into town . When you first do you remember where you were when you first saw that . Did you think, whoa . Or thats business as usual . You know, its washington and never be surprised by anything, i guess. No. I actually stepped off an international airplane and saw it on a tv monitor and had that exact response. Wow, that would be interesting. I mean, the truth is it would be a master stroke for donald trump. I dont know whether hell offer it or mitt romney will accept it, but it would reach out to an entire range of people in the Republican Party but more importantly i think it would signal the world that hes very serious about foreign policy. Thats been an area where people have worried. That he didnt have experience. I think one of the things that mitt romney has done is demonstrated that he is adept in understanding the cross currents of the world. So it would be a great political move. I think it would begin to heal an important divide in the Republican Party and give him a strong team. Whether it will be offered or whether it will be accepted, i know not. And its on both sides, governor. You know, for those people that were just furious with romney, its amazing how quickly they said, wow, hes suddenly he was a very talented guy and we know he was. He probably would have been a great president. And then theres the never trumpers that thought he was doing the right thing. And theyre also saying, wow, look at this. This is pretty amazing. So it would be a lot of i think it would heal a lot of rifts and certainly show a united Republican Party. Thats for sure. Indeed it would. May i say, i think that is actually a function of a transition. There are four or five things you need to accomplish. And one is its a period to heal and to reach out to people who may not have been part of your socalled coalition. And to begin to bring them in. And im pleased to see whether he offers that role to him or not. Im pleased to see them sit down and clear the air and begin to move forward. All right, governor. We appreciate it. Thank you. Good to see hhs, werent you, a one point . Yes, i did. I was in bush 43, it was a terrific experience. And i look with interest to see who has the pleasure of occupying that role. Okay. Great. See you later. Thanks, governor. Dealing with health care reform. When we return, jim cramer is going to join us live from the New York Stock Exchange. Well get he has take on todays top stories, take a look at dow futures right now. Theyve been up and down, around flat, mixed right now. Dont move. Hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Orange money represents the money you put away for retirement. Over time, your money could multiply. Hello, all of you. Get organized at voya. Com. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Lets get down to the New York Stock Exchange where jim cramer joins us now. All said and done yesterday, another up day even though the euros 1. 06, jim. Give me a number on the euro or for the dollar index where people just say, okay, this is just this is just going to be devastating. I dont know. Its kind of a vote we have for potential growth. My old partner from larry kudlow used to talk about king dollar, it was something we didnt like for a while when it came to earnings translations but i think we should start liking by the fact the rest of the world must be jealous about the kind of growth were going to have next year. Thats what its about. Its about a belief. Earlier, we cant return to a former time but i was thinking, wow, what if our domestic economy was really consumers making things, we were doing things and where it became less important, you know, whether the dollar was strong. Because it was strong because were doing stuff here, were consuming stuff here. Can we ever do that again . Or the genies out of the bottle. I dont know. My friend jim stewart had a piece this morning on the cover of New York Times, by the way New York Times not necessarily failing. Just put that on the record. About what could happen. About what we could build. About the next hoover dams, about the things that could happen in this country. You wouldnt be caring about the dollar. You would just be caring about how many people are being put to work in jobs that are not necessarily where you need to work in a Solar Panel Factory or a degree at stanford. Real jobs the u. S. Can do and i think the strong dollar has much more to do with an ethos than it does with people in pajamas trading currency. You know, jim, i got to like im not sure what i need. I have a whole new way of thinking then, because weve got some things that weve been sort of just drilled into us for a while. And maybe its not everything we think is true isnt necessarily true. Well, maybe its not as much of a zero sum game. Maybe its not that were just another pathetic, you know, fifth rate country that is being held hostage by other countries. Maybe thats not going to happen anymore. How do you know theyre wearing pajamas . Well, thats what they do because theyre trading overnight. Is that what you do . No, i actually get a couple hours sleep as i wait for bran don cooks to get a touchdown so i know im going to win in fantasy football. I felt bad for drew brees. He was so tired. I just had a vision of you with one of those caps on and a full on i dont know. I used to trade in feet pajamas in the old days, but thats the carters, carters trades well, childrens place trades well here, must sell to those guys. I have a onesie, i tuck in the shirt because i dont want it riding up on me. Would it be a shocker rather than come up with the usual nonsense . It would be. Pendulum swing and its hard for us to bring it back. Maybe we will. Yes, it is. See you in a couple minutes. Coming up on todays top stories, squawk box will be right back. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Ab com down this morning, weak traffic and poor performance in the overall challenges of the companys rebranding effort. A final check on the markets for today and for this show i plan on doing this again next week in checking on it. I hope its not my final check on the markets. And it really wasnt worth it, was it, for me to go into all of this . Anyway, s p up less than 0. 25 point. The dow indicated up a little over 1 point. Theres oil, which is also a little bit quiet today, not a lot going on. Mike russell 2000 small caps at a tenday win streak. Alltime high . Yeah. Ill see you next week, right . Youll see me at 11 00 if youre watching. Oh. Yeah, ill be here one day next week. Ill be reporting overseas next week. Our international correspondent. Yeah. Where . In paris. Nice. Thank you. Make sure you join us on monday. Squawk on the street is next. Good morning. Welcome to squawk on the street. Im david faber along with jim cramer. We are live from the New York Stock Exchange. Carl quintanilla has the day off. Lets give you a look at futures as we get started on the last trading day of the week. You can see joe just told you of course he went through it