vimarsana.com

As for european markets, you ask, lets take a look at how we fared on the big three or are faring. All up with the ftse in the uk the biggest gainer so far. The tenyear note yield, certainly a focus since the election. Wow, still cant quite get over it. 2. 228. Where were we before the election, 1. 7 . I checked in for refinancing and its already changed dramatically. You had to make your move. They adjusted that one so fast your head will spin. Oil up this morning, which is a bit of a change and brent crude at the bottom there. Our road map starts with another record close for the dow. Thats six Straight Days of gains, but the s p and nasdaq were down. Plus a beat in a race for home depot as retail earnings kick into high gear. And the white house transition continues. Mary jo whiteout at the s. E. C. As the Trump Administration begins to take shape. The dow aiming for a seventh straight day of gains after hitting a record high yesterday. Warren Buffetts Berkshire hathway buying airline shares and home depot posting better than expected Third Quarter results. Lets just start there, jim. You just mentioned mortgage rates, housing, home depot, and yet theres another part of the story that says, well, taxes may come down, Infrastructure Spending, and it was a good quarter for them. Well, we have to listen to the Conference Call because those guys have always given you guidance much better. Their actual lease, i fault them rarely, but their actual release tells you less than some other company. Unless you hear what they say and the stock jumps on just the numbers, you wont know. Bill miller was saying earlier, maybe they have a high tax rate. When i look at home depot and i think this was part of a trade that went on right before the election, that spend has stopped on your home. You know, retail Sales Numbers were really pretty good, and i didnt get spend stop on your home from anything other than whirlpool. We had whirlpool and we had masco and sherwinwilliams. Thats the paint aisle, the appliance aisle and the cabinet aisle. Ive got to hear from home depot pause those companies arent doing how home depot did. No more than how foot locker did if nike and adidas are in a price war. They have been very, very constructive. Their fantastic cfo has urged people to stop looking at the quarter to quarter and look at the longer term, the big demographic shift in the country, people moving out of their house. Household birth rate. And it really just comes down to her saying theres a lot of money still pent up to spend on homes so i like her longterm forecast. Shes been more accurate than anybody else, any economist i follow. All right, but your point being a good one which is lets wait and listen because as you say they dont provide that much in terms of granularity. The stock up today is advanced auto parts. If you read the release its downbeat but the analysts are saying, hey, this is the beginning of the term. I dont want to caution people too much to not react but this is a quarter if you react off the headlines, you have been so wrong that it just doesnt pay to be able to say, you know what, darn the Conference Calls, full speed ahead. Its been the opposite. Conference calls are everything. As you pointed out, were going to get more retail earnings. Overall environment right now, were almost a week removed from the election, the unexpected market moves, certainly the unexpected result and then the market moving in a direction that people did not expect. And the biggest part of the story i think has been rates. I think bill miller earlier on squawk box saying the long bull market in bonds is over. Right. I can get that. Remember, if the government is going to start spending again and you have the united view the government is going to spend again and taxes are going to go down, we know that is bears for bonds because you have to borrow. Ive been saying if mr. Trump wanted to drill home the infrastructure, time to do a 500 billion bond because to make America Great again because thats what you need. I urged this to tim geithner and he said, no, youve got to borrow short. I said no, if you lock in long, even though it cost more money in the shortened, what a great opportunity. But a restaurant chain, zoes, they were trying to say why business is going to be better. Kevin miles, whos a terrific ceo, said one good thing is we have the election behind us. I continue to think thats what terry was saying with macys, mr. Ellison when he was talking about j. C. Penney which missed the quarter badly and the stock is up dramatically. Lets not lose sight of the fact when you listen to these ceos in retail, they think its a sea change. They actually think the election is a sea change and they definitely think now that its behind us, people are going out again. Popeyes, expect people to come back. Theres a look at jcp. I did reference those words from bill miller but lets take a listen to his thoughts about that 35year bull run in bonds. In my opinion the 35year bond bull market is over and so people are going to start losing money in bonds. The overinvestment in bonds is going to switch somewhere and i think a large part will go to equities like it did in 2013. Wishful thinking, jim . Its funny. It comes on the same day Warren Buffett loads up on airlines. Thats been bill millers segment. We have a lot of rep taj about different Fund Managers and their filings come out. I was going over where Warren Buffett may have been buying the airlines. He was buying them at six times earnings. United airlines, these are well off their highs. 73 for the high in 2014. American was at 56, delta 42, southwest at 49 last year. Look at, guys, youre buying them back where they were. Youre not buying them where they were july 7th or june 30th. Plus we dont really know. I guess it does bear mentioning, hes not making all the Investment Decisions at berkshire. No. Hes got other people doing that and i think hes been empowering them more to do so. I know he spoke to becky. Becky row lelayed to us southwe airlines also a name. By the way, he was burned way back by u. S. Air. Investors have poured their money in airlines with terrible results. Its been a death trap for investors. In 96 he said u. S. Airlines revenues would increasingly feel the effect of an unregulated and fierce competitive market. My favorite one is he said that theres little competitive advantage ever since the days of the wright prorbrothers. If a farcited capitalist was present at kitty hawk, he would have been shooting them down. He has not been particularly positive. Its been a long time since he owned an airline. He did end up making money on u. S. Air. Most people dont remember that. I like ever since oscar came into United Airlines. He came in in september of 2015. The stock is not back. You can still make a case for that one. But its now selling at eight times earnings. Jet fuel is a big variable. Theres new engines coming out. But when you take a look at where these stocks have traveled, david, just this quarter, i think that people who get excited, they must realize that youre talking about stocks that have had remarkable runs. American has traveled from 25 to 43, its now up 5 . During the period when buffett was buying. How about this one. United continental is up 9 for the year, it was 39 on july 6th. Its going to open around 64. So people who think theyre getting the buffett bargain, no, thats when buffett was getting the bargain. And it always bears worth repeating 13 fs are dated and we also tend to make a lot of some of these hedge Fund Managers, those that have not had particularly strong track records, though i would not take away from their smarts, but its interesting how we can celebrate some of their stock picks when they have not been able to perform at all or deliver any alpha. Maybe it really did peak when we started paying attention to these filings. Yes. The filings, when i was a Hedge Fund Manager we had to make the filings. There was 50 of my fund that i never traded. Those are the Cape Cod Bank and trust names. 50 of them are like are you kidding me . I cant believe that i filed that i owned x. Im short x. But people just presume that i loved x. And x, by the way, was not no, not letter x, i understand. I remember, i used to talk to you back in those days. You owned something and lets get more from carl at ges mines and machines event in San Francisco. Carl. Good morning, david. Yeah, fascinating your discussion about aviation, certainly thats going to be part of the discussion here. This is the minds and machines conference, 2600 vendors and partners of ge. Its been going on for about five years where they talk about digital and innovation. Of course a big part of ges strategy Going Forward. We talked to immelt a couple of weeks ago about that baker hughes partnership but have not spoken to him yet about the election. If you believe the election was a rebuke of globalization and free trade, you do have to ask what is ges playbook. It was designed almost entirely in the 70s and 80s to compete dploebl globally, to take on the japanese and the germans. They compete in every country in the world. Twice as many workers abroad as there are in the u. S. So well talk about the results of the election, what it means for production, manufacturing production in this country along with an update on bhi and alstem and the q4 guide and media. There arent a lot of large cap ceos who dealt directly with trump in his private life. Immelt did some of that when ge owned nbc and nbc ran the apprentice. So thats coming up in the 11 00 a. M. Hour east coast time. We cant wait. We are looking forward to it also, carl, thank you. The stock looks like its breaking out. Ge. Yeah. It would be curious to hear his thoughts. Its funny, in the few conversations ive been able to have with chief executives, embracing, as you might expect, tax reform, Infrastructure Spending. Very concerned about immigration and believe that if in fact the Trump Administration follows through on the promises made during the campaign that will be a negative for the economy and for business overall. Obviously in that newspaper, Chinese Communist party, they talked about we could switch from boeing to airbus. Ge is agnostic and can have their emergenci engines everywh. You notice that their bids in tech are furiously again because Interest Rates it turned out they were so tied in with Interest Rates. Youll sell the banks with rates coming down. Even down a little bit, and youll buy the financials. One i want you to keep track of. Please tell me. Is the features that twitter added last night. Control features expanding the mute feature, giving the ability to mute words and phrases. Hateful conduct option with reporting flow, i like. Improve the ability to process these reports. A lot of this enforcement overall in training our support teams, all of the things are something so that salesforce backed away even as mark benioff reiterated they may have elected the president. I just point that out because a lot of our viewers focus on tweeting and some of us got so turned off because our wives look at it or our kids and say, geez, thats a horrible thing. It can be very deflating if people are attacking you. Even if its 1 out of 50. Mine is closer to 25 out of 60. Obviously you know the company well. Is this an important seminal moment for them or just another oh, carl has stepped away. You know what, lets take a break and talk a bit more about twitter when we come back on squawk on the street. Also be focusing on the markets for you as well. Weve got a lot more. Stay with us. How else do you think he gets around so fast . Take the reins this holiday and get the mercedesbenz youve always wanted during the winter event. Now lease the 2017 gla250 for 329 a month at your local mercedesbenz dealer. Mary jo white will step down as the s. E. C. Chairman in january after more than three years on the job. This comes as donald trump prepares to assume the presidency. Whites departure paves the way for trump who has vowed to dismantle doddfrank to pick a new chair and potentially reshape the s. E. C. Youve had some issues with Mary Jo White. No, i had issues with Elizabeth Warren attacking Mary Jo White. I think shes a dedicated public servant. She recruited me coming out of harvard law school. So all i can say is she directly tried to interpret as an agency, tried to interpret the law. And i think that people like Mary Jo White, who are they come from a background of enforcement but also private practice recognize you cant free lance. You cant just say im not going to enforce that law. But i think that the phase of that, if you dont believe in the law and you think the law is going to change would put her in a very untenable position. She would not be serving really the overall ethos. Do you have any expectations in terms of what an s. E. C. Will look like under a Trump Administration . I think that the s. E. C. Has tried to be enforced with both spirit and letter. Maybe it will be more letter and less spirit. I didnt think, by the way, that Mary Jo White was a particularly heavy hand. I also think that the u. S. Attorneys have been very straightforward in prosecuting Insider Trading. I dont know. I totally understand that she did some very good things about money funds. Her hands were tied. I mean obviously like a lot of other people in government, they were split in the s. E. C. But i wish her well. She didnt need to take this job. Shes had a very, very successful career doing a lot of things and i thought she did her best in an acrimonious environment. And tasked in part to modernize the s. E. C. Yes, without a lot of money. Its not like in britain where theyre the highest paid the head of their s. E. C. Is one of the highest paid people in government and they have a lot of latitude. But, look, in the end, david, the s. E. C. Is not going to be able to say heres what Insider Trading is. Thats up to congress. Yeah. And that actually could even end up being up to the supreme court. Yes. So i just i feel like that she was under attack from both sides. I thought Elizabeth Warren did a a i wish i could call her and say, listen, i just want to apologize on behalf of people, that was wrong. On the other side it looks like that she is being whipsawed by the prospect of lays a fair. The s. E. C. Tends to be reactive rather than proactive. And to your point, the real veterans tend to move on to be heads of compliance where theyre paid multiples of what they were earning in the s. E. C. Shes had a chance to be in private practice and done quite well. Look, im really out here saying this is who you want in government, Public Servants who have worked on both sides, understand prosecution. She did a great job and i salute her and i hope that she goes on to a less acrimonious world because that would be deserving. I think she did her best and she did a darn good job in a world where things change rapidly. Are you thinking about your mad dash . I hope so. Sure. Because weve got it coming up. We didnt get to that many stocks in the open there. That will change. Well also give you a look at futures so you can see where we stand on the markets. Perhaps a bit of a higher open, especially for the nasdaq. Tech has been beaten up pretty badly. Yeah, maybe its done for the day. And that seems like it may have run its course, at least for today. A lot more squawk on the street right after this. Alpha seems more elusive today. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential hthis bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade message in a bottle. Yes. Youve got a mad dash. Where do you want to go . Yesterday i had a cyber call which is they do email security and we know theres also email security. Most of Cyber Security has come down. This morning morgan stan be upgrades fort net. Why is this important . Because they announced bad numbers. They actually had a shortfall. People are circling back to these stocks, i think theyre circling back because i think in some ways people feel like the Trump Administration will take Cyber Security far more seriously. I think that you have to because of emails, the emails. I would like to think that the previous administration, the Outgoing Administration was taking it pretty seriously too. I think everyone takes it seriously, but youre beginning to get agencies, like theres a new york state regulator who says, listen, you guys have got to do this. So what the ceo said last night was very interesting. He said, you know what, a lot of people did lip service bent. Now its going to have to be you are at fault if you dont spend a lot of money. No one wants to spend a lot of money because its very expensive. And its ongoing. Its not as if you can stop. No, its state sponsored. Its like taking lipitor, youve got to take it the rest of your life. Its maintenance. A chronic illness. And thats one of the things that was episodic and now its chronic. And one of the things that cyber arc says is you presume theyre in. Thats a big change. He used to say youve got to keep them out. Now you have to presume theyre in and we have to find them. Right. Theyre amazing. The election was really in many ways about an email server. It did end up being. And not to mention of course all the hacking that was already taking place to the clinton group. When you get behind the one that preannounced bad numbers, that says the group is back. Well talk defense stocks too because they have had quite a run when we watched some of them open this morning. It looked like tech is going to get a bid for the first time in a while. Well keep an eye on the rest of the markets, not to mention that bond market, when we come back with the opening bell after this. As a supervisor at pg e, its my job to protect public safety, keeping the power lines clear, while also protecting the environment. The Natural World is a beautiful thing, the work that we do helps us protect it. Public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. We want to keep the power on for our customers. We want to keep our community safe. This is our community, this is where we live. We need to make sure that we have a beautiful place for our children to live. Together, were building a better california. Youre watching cnbc squawk on the street. Were live from the Financial Capital of the world. The opening bell will ring a little less than two minutes from now, jim. When carl is well, hes here, but not physically here. Hes in San Francisco. Hell have an interview with jeff immelt a little later in the program. Which will be great. I turn to you and ask what is the key to this market. What is so many but what is front and center for you . I am going to say one that i think has had a remarkable run and its bank of america. Bank of america, we have a lot of fed speak. Bank of america is the Number One Company that is levered to higher rates. And its had a remarkable move. Its now well above book value. That is your stock to follow. I thought Brian Moynihan and company had an excellent quarter. It wasnt going to get its due unless there was a fed rate hike. Now the chances are built in much, much higher. This is the stock that people are keying on. It had its move after a long, long time. It had its move over where it was. You know, this was the last to move. I want you to follow this stock because if bank of america keeps rolling, then you really are going to have a rate hike thats good. I think its four trading days over which the etf that tracks the Banking Sector is up 14 . Yeah, it was a remarkable move. Wells fargo, as we were talking yesterday they did one of the best. Well above back to where it was. But thats what you want to watch because thats like a proxy but its also for all the fed speak and in fact, david, moynihan has done a good job in the last year and no one gave him any credit. Now theyre giving him credit. Now theyre giving him credit . It has nothing to do with him. It has to do with less regulation and higher rates. He has a great mobile app. Nothing has changed. Listen, hes done a good hes cut back costs. Hes ready. And if he decide to move well, if they dismantle doddfrank, wow. By the way, this is a fabulous thing for conagra. They are celebrating that spin off from coning aremaragrc. Five 9 is a provider of cloud software. You can see the realtime exchange. Doesnt that it does look like well have a bit more green on that board. Does that sound like salesforce. Com . Its up a buck and a half and only 95,000 shares. They do report 11. 17 which has come up rapidly. I want to just go back to twitter for a second. I know that i want to give this its due. Theyre not done trying to clean it up. When mark benioff looked at this company, i think they were very concerned there were two things they wanted. They wanted the data but also didnt want to upset their large shareholders. I think a group of large shareholders really and truly were fed up with the anger and dont feel that its fitting with a lot of the people who like to advertise. So if they can cloean this up ad block certain things in people and not have a decline in the number of Monthly Average users and make it a little more easy to onboard, i think twitter will become a target again. You do . Or they can get it up themselves. This thing has become i dont know if you saw the article that said now were done with the election, were done with twitter. I think mark benioff thinks different. What was the route trump took . It didnt rely on the media. It was intervention directly to the person and thats what a lot of these companies are talking about, direct to consumer in the software. By the way, home depot, home depot has credited salesforce with doing remarkable work in terms of knowing what the consumer wants. Why is the stock down . A lot of people were saying there was a oneoff gain from the hurricane, the storm. But you know what, i think youve got to think a little longer term. I dont think home depot is anything other than a fabulous longterm story. Not unlike disney, which we never talked about, another one that was long term. We can talk disney in a minute but lets turn our attention to technology for a second. Shares of apple, for example, have gotten beaten up. Theyre up today for the first time ive seen for a while and i dont track these things quite as closely as some of our colleagues. But facebook is up, google is up, or i should say alphabet. Amazon is up. Some names up for the first time in a while that since the election have been down while the Broader Market of course has been very strong and the banks, our conversation a moment ago, were very strong. Drug stocks, pharmaceutical companies very strong. Technology, though, has really been getting hammered. Theres not been new money coming to the market for a long time so you have to sell something for something. People Want Companies that have super great growth. Whats super great growth . Perhaps united technology, companies that you didnt think could move. David, ive got to tell you, i dont know if the bounce can last because people still need more money. What you really need to see is a resurgence in equities as an asset class. A lot of people feel as Interest Rates go higher, bonds will become even more attractive. I disagree. I think that equities can become more attractive but just not the same equities. Well, how much further can rates really go and is justified . Were looking at what everybody believes will be with a stronger dollar, december raise. But what are we talking . 2. 50 . Were not going to get to 3. What happens if the president elect does say we have to do a trillion dollar bond offering in order to make the airports great. Do an eisenhower situation. Eisenhower was so afraid of a recession in the mid50s, he said weve got to build an interstate highway system. Would that be so crazy . I dont know. My take is that you have some supply coming obviously, if were going to cut taxes, david, youve got to pay for it. Weve had this huge run on the infrastructure. Martin marietta has had a 50point run in five days. But youve got to issue debt right now or within six months in order to be able to justify all of this building thats supposed to come. The prospect for lower taxes coupled with what is supposed to be large Infrastructure Spending is certainly going to mean potential inflation. But havent we already i mean have we discounted that to a certain extent over the last four days in the bond market. Your 30year fixed you can get at 3. 78 if you have good credit. I think its perfectly realistic to think that could go to 4. 5, 5, if we really start seeing demand for money and you start getting a lot of extra cash because your taxes go low. Because then i think the fico scores will be a little bit more banks have great loans. I dont want people to call their bank i happen to have good credit, okay . Im just fortunate enough. I remember getting my sixth credit card when i got out of school. But i do think that its been very hard to get that rate. Maybe they make it easier, but the rate will go higher if you make it easier. The rate will go higher, right, right, but open up to more people. Im frantically trying to get some things fixed that i have had floating because i am concerned that the tenyear doesnt stop. But at least if it would go up more gradually. The velocity of the move, david, caused all these banks to move at a pace that was absurd. And the banks today are all down a little over 1 . Morgan stanley closer to a 2 decline. Bank of america, which you mentioned, down almost 2 this morning. Did you see goldman where you had a combination of so many things. The volatility is great for gold p ma, the m m is great for goldman. The volume is never big because these are etf buyers. Youre so right to bring up etf. I did some shopping this weekend, david. I went to west elm. West elm. A brand new williams sonoma. My wife wanted to take a chair home, see if it worked for our dining room table. They wouldnt let us borrow it and return it. They should be a little bit more thats not right. They get downgraded not pauf that but im doing some shopping and the stores were packed this weekend. Even west elm which i felt was not that great to my wife frankly. She didnt look like someone who would steal a chair. I dont see her running down the street with a chair. What is that . Lower 50s. I was way out of line with that. But she doesnt watch so we dont have to worry. Bug and everest watch more than she does, our two rescue dogs. Lets talk briefly about pharma. The last few days have not everything is down in that area. Look at this. Home depot, can we really just i said you had to wait for the Conference Call. I didnt mean that you had to sell when you listen to the Conference Call. But i do think there was an excitement. Like maybe the fda would start approving a lot of things. The repatriation meant there was going to be a lot of bids in the group. But they have to follow up with bids. You cant say theres a lot of bids and come in and the bid be for a shopping center, equity one. Thats not the one people are looking for. I think its fair to say we are going to see more m a. In fact it was a fairly robust pipeline prior to the election. Yes. One would expect given a less stringent antitrust department under a Trump Administration that would be the thinking. Because that has been the key thing as weve discussed so many times. If you are thinking about a fair low large deal that involves any horizontal integration as opposed to just vertical, youve got to think long and hard about it given the landscape this year of failed deals that were challenged. That changes your thinking, i think, under a Trump Administration. Yes. Unless youre time warner and at t, which most likely i dont believe who knows. Who knows if hell really follow thank you and have his Justice Department say no to that deal. You have to believe that a lot of people feel that he will not put on antibusiness people and the combinations tend to be pro business. David, just getting a little more color of home depot, obviously thats coloring a lot of things. The implied number after i back out that 100 million is more of a 3 rather than 4 consensus so people are freaking out. I urge people not to buy on that headline. Thats just not a headline oh, whatever. I come out here and say stuff. I believe in myself. Yeah, you do your work, i know you do. People can do their own. Apple, can we talk apple for a second. I wanted to talk apple earlier but you moved right past me. I got sidetracked by french fries. Boy the way, i had them last week and theyre quite good. Apple is between a rock and a hard place. The Chinese Government saying we can throw the ball to other companies. And last night i had harmon on and obviously harmon was bought by samsung. Hard wmon is the brains of a ca. They have been critical of car saying its basically just an app. So youve got samsung coming into the next great mobility market. At the same time, we know that trump wants apple to build more things here where its more expensive, but at the same time if they cut the taxes, its the single biggest beneficiary. So apple apple is in the crosshairs of a lot of different things, both positive and negative. It reminds me of the william tell orchestra. You raised china u. S. Relations. Were talking about the benefits certainly that market participate see butt uncertainty that will arise on trade will not be insignificant and in particular china u. S. Which is an important relationship and how thats approached by maybe a Rudy Giuliani which could be secretary of state. I think its very much unclear at this point how we go with the chinese. That is going to be vital, vital. I think the wrap, if you want to wrap things up with trump from when i spoke to him and dan demico, they take our jobs, they send their products cheaper than we can make them because they subsidize and they export their pollution. So thats kind of like an unholy trinity. And a lot of their stuff ends up in our land fills. If you buy it at walmart and then you throw it away in a couple of years. Now, the biggest threat to china, mexico. Because mexico can produce things for half the price of china. But mexico is also number one on the list in terms of trump trade negotiations. I was telling a big trump supporter, i now feel like i have to watch twitter more than ever. Why . What happens if he tweets, you know, china is really unfair and youre buying apple . Look, its not like hes that could happen. That could absolutely happen. It could shift the world. My guess would be that will happen at some point, dont you think . So i have to follow twitter all that like i used to follow the tape . Whats twitter saying here about china, david . But youre getting that reversion. By the way, the home depot moon is going to cause more money in the fang. Hey, you got a little ahead of yourself. I like home depot, im not backing away from it. You got a little ahead of yourself, maybe things we have to go through this gulf before the economy gets better so buy facebook, amazon, netflix, alphabet. I wish they had never changed the name because that means now its fa and i had to get rid of the n. Maybe inflation is not that bad. Lets get to bob pisani for a little more of whats moving the Broader Markets this morning. Ba bob. Weve got a mixed market. The rally is running out of steam. Lets take a look at the sectors. Remember what was happening on the trump rally essentially here. So financials, industrials, transports, health care all did well. Thats now stopping. This is the latest problem, banks. Big Leadership Group down 1. 8 today. Look at the kbe, the bank etf up almost 15 since the trump election happened, the election of donald trump. There you see the move up. Now its down a little bit here today. Whats been rallying the banks, we know Regulatory Reform, Corporate Income tax reform, thats all been rallying things. The important thing is right now none of that is imminent other than the move up in the yields that weve been seeing. So were starting to see analysts make some comments. Last night we believe valuations are now discounting stronger growth, higher rates, steeper curve and a less challenging Regulatory Environment and causing the stocks to approach the top end of our fair value range. If you look at banks today, they did Downgrade Bank of america. This is guggenheim. Went from 16 to 20 on the election. There you go at 19. Wells fargo also downgraded on valuation issues. Bb t and sun trust were downgraded yesterday. We still dont have a lot of clarity on things. Also if you look at some other things that are moving, weve seen infrastructure stocks. We talked about this yesterday like mastec and aecom and quanta services. We dont have any real indication of whats going on. Aecom just came out with their earnings at that. They were shy of consensus. Aecom was. The guidance for 2017 was a wit short overall. So i guess my point here and you see aecom down a little bit after the huge move up, there may be Infrastructure Projects but its going to take a long time to get clarity on that and this may be a 2018 event. Aecom did not even mention the elections in their Earnings Report or give commentary on the implications of what might be going on for them. So just be careful about all these huge moves up in the infrastructure stocks. Home depots earnings were just terrific. Comps were just excellent, up 5. 5 . U. S. Comps up 5. 9 , much better than expected overall. Why is it down . Well, the guidance was it seems like a slight raise for the full year, but just a penny or so. I think that might have been a little disappointing overall. Look at tjx. They meet and their ceo came out and said our Comp Store Sales is primarily driven by customer traffic. And you dont usually get exclamation points, but there you go, across all of our divisions. They insist theyre getting market share. Right now the dow down 51 points. David, back to you. Thank you, bob. Now to a man who knows his way around a few exclamation points himself, Rick Santelli at the cme in chicago. Rick. I lot of exclamation points if youre a market enthusiast. Some of these markets are truly breath taking in a number of areas. If we look at year to date at tens, yes, we traded up yesterday, every price important, but the close is key and we are now hovering right under unchanged on the year. Of course yesterdays close a few basis points away from that 227. If we look at year to date of bunds. What a completely different version. We were almost one to one after the big drop in rates in january brought us down on what was kee deemed the relative value trade. On the way up, things arent behaving the same. Look at the spread, thats a 20year chart. Find me a spread lower than the one were at. This is significant. And we look at e. R. Issues like the yield curve. Lets look at 10s minus 2s. The fact of this big reversal and major steepening fed funds, obviously selling off raising percentages, we could quibble about what the pencrcentages me, but the closer we get to the december meeting, the more sizeable the message of the fed fund futures will be to many traders. Its already baked in the cake. The stage coach is pulling the fed here in my opinion. If we look at gilts. They have gotten back to their prebrexit levels, but like the bunds they arent participating to the extent of the leading sovereign and that is the u. S. Rate. But without a doubt the chart you need to really study, the dollar index, you look at the chart from early 20 fit15, you those tops there, were pushing through, lcalmost breaking through. How important is that . We could be looking at a new high close to the dollar index going all the way back to the spring of 2003. David, back to you. Thank you, mr. Santelli. You know, he raises a good point, jim. That dollar, i can remember having a lot of conversations about it previously when its been moving up to new highs or recent highs. The ones that it has hit very badly are the Consumer Products companies that have big translations overseas. But i think people are very confused. If those Consumer Products have big overseas, they can repatriate so you kind of feel like maybe what they lose in the dollar they may be making in repatriation. The companies that i think that have worked under the more poorly under the dollar if you speak to terry lundgren, macys, tiffany has done poorly, the airlines, travel, but people are completely ignoring that. Well be through a period where we ignore things in a couple of days, i think. You just mentioned the airlines. Well have the former continental ceo Gordon Bethune with his take on the Airline Industry. This as warren Buffetts Berkshire makes a bet on the sector. Not that big a bet in terms of dollars. Carl has that exclusive with ge chairman and ceo Jeffrey Immelt on everything from the Trump Presidency to the global trade picture. Youre going to want to hear it. Were back after this. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. Approaching medicare eligibility . You may think you can put off checking out your Medicare Options until youre sixtyfive, but now is a good time to get the ball rolling. Keep in mind, medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement insurance plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement insurance plans, they could help pay some of what medicare doesnt, saving you in outofpocket medical costs. Youve learned that taking informed steps along the way really makes a difference later. Thats what it means to go long™. Call now and request this free decision guide. Its full of information on medicare and the range of aarp Medicare Supplement plans to choose from based on your needs and budget. All plans like these let you choose any doctor or hospital that accepts medicare patients, and there are no network restrictions. Unitedhealthcare Insurance Company has over thirty Years Experience and the commitment to roll along with you, keeping you on course. So call now and discover how an aarp Medicare Supplement plan could go long™ for you. These are the only Medicare Supplement insurance plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. Remember, medicare doesnt cover everything. The rest is up to you. Call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. Go long™. Take a look there, Delta Airlines having turned lower. This after we got the news yesterday, as jim pointed out, dated news, but Berkshire Hathaway an owner of these airlines which it wasnt previously. Up next well get stop trading with jim. There it is, time for stop trading with jim. I tell people youve got to wait. Dicks Sporting Goods gave you a very negative read on the future. It made me feel like the reason dicks had done so well is Sports Authority not doing closing its doors. This is an investment year for dicks. I think people ought to give them a break, this guidance is not nearly as negative. Samestore sales were good. But today is the day we throw away the retail we bid up off the trump rally. Why . Because these companies themselves are saying, listen, dont get too excited. Theyre lowering their outlook so they can underpromise. They can still overdeliver but theyre conscious of the fact their stocks have taken off and theyre not in a situation where they want to make expectations so high. Will dicks be a buy . Maybe soon. Whats on mad tonight . I have been you know i am very much interested in Machine Learning and im very much interested in artificial intelligence. As you should be, as am i. Its fascinating and will change our world. Harmon yesterday, a lot of what he was doing they figure out how you drive and then calculate how quickly youll get somewhere. I mean thats Machine Learning. Thats what it is. Everybody needs data, as much as you can get your hands on. Ive been tweeting that, you dont understand the radical changes that twitter is making. Now if they can clean it up, this company will be a lot more valuable to people. Well, twitter is actually up. It was down earlier. Technology has a real bit to it this morning. The overall market, though, up a bit. You know, i think its time for consolidation. You shouldnt have a straightup market. I dont want to throw away home depot. Those throwing away home depot, youre throwing away a Great American retailer. Coming up, were going to talk with former Continental Airlines ceo Gordon Bethune. Mil. 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. So what else is new . Humm. Shes doing good. She needs more care though. She wants to stay in her house. I dont know even where to start with that. First, lets take a look at your Financial Plan and see what we can do. Ok, so weve got. Well listen. Well talk. Well plan. Baird. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by Unitedhealthcare Insurance Company. Like all standardized Medicare Supplement insurance plans, it could save you in outofpocket medical costs. Call now to request your free decision guide. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. [ male announcer ] youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. See why millions of people have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. Dont wait. Call now. 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. Good morning and welcome back to squawk on the street. Were live from the new york stock exchange. Carl is in San Francisco. He is at general electrics annual minds and machines event and hell be joining us shortly. Later carl will sit down for an exclusive interview with the chairman and ceo of general electric, of course, Jeffrey Immelt. Lets give you a quick check of the markets. We are up on all the excuse me, were do you on the dow, up on the nasdaq for the first time in a bit. Financials down, though. The s p 500 is still stronger on the day. We also have data crossing the tape right now. Lets get over to Rick Santelli who can fill us in on those numbers. Rick. Yeah, its a bit old. This is the end of the Third Quarter numbers. Its the september business inventories up 110. Really no great shakes. We were looking for 210s higher. Just for some quick context. We start out with two negatives min minus 0. 1. We like inventory staying on the positive side. Build the widgets and those boom and bust in inventories may be coming to an end. That could be good for gdp. Seema, back to you. Thank you so much. The global bond selloff a bit of a pause here. What does it mean for markets and are investors questioning trumps probusiness agenda . Lets bring in our market panel, david lebovits, erin gibbs, also joining us around the table is mike santolli. David, what do you make of todays market reaction. The dow is down 44 points, but outperformance and the nasdaq with that rebound in tech. Things have moved very far very fast. Financials have led the charge. Industrials and materials have led the charge. I think what youre seeing is a little retrenchment where everybody starts to take stock of what we do and dont know about what president elect trump is going to bring to the table. Hes proposed a plan, we dont really have a scoring on the plan. We dont really know what any fiscal package will look like so youre just seeing investors say, hey, lets settle down for a minute and figure out what the facts are before we make any more Investment Decisions. Erin, earnings models dont easily account for political under certainty. How are you pricing in trumps agenda and the lack of detail that we have right now . So one of the things were looking at is just overall gdp growth. Were still very focused on Interest Rates versus trying to guess about the trump agenda, because obviously this can change from day to day and were really looking at a longterm picture. It does take a while for any policies to be implemented so were still looking at where we expect earnings forecast for at least the next two quarters before we could really see impacted changes. And for the end of the year, were looking at like a nice finish towards the end of the year, particularly with these nice retail sales. Mike, industrials still in the drivers seat. They are. And to davids point, i think in the short term we basically got stretched on a bunch of different measures. If you look at some of the round numbers, we had a new record on the dow. Russell 2000 hit 1300 to a new record. You had the dollar index hit 100, also kind of a new 52week high. You know, so basically all these relationships seem to have exhausted themselves. Tenyear treasury yield also clicked to a new yeartodate high. Maybe this isnt any magic in this relationship, but the tenyear treasury went above the yield in the s p 500 for the first time. The russell 2000 is up 8 in the week. The emerging markets index is down 7 . Youre a global strategist. We just talked globally there thanks to mike, not to mention bonds, which really has been the biggest move of all. What do i do . Not to deflect, but i think you have to wait and see what these trade policies actually look like once President Trump is in office. The biggest were not talking about weeks, were talking about many months. Exactly. So the question is do we get a sense that things are going in a more protectionist fashion or is this Infrastructure Spending, is this fiscal stimulus going to stimulate demand in the u. S. Economy enough that it actually helps lift some of these more manufacturing emerging markets out of their current dole drums. I tend to be in the latter camp. I think this could be good for the global economy. The u. S. Could definitely lead the charge here in 2017, but there is a risk, as there is in any unknown, that trade gets in the way. What about rates to michaels point, up so dramatically in such a short amount of time. Is the bond done . Weve spent eight years trying to figure out how to stimulate Inflation Expectations and special rates and the president ial election did it over the course of a few sessions. I think the tenyear has moved a little too far too fast. I wouldnt be surprised to see some retrenchment but the key variable here is inflation. As long as Inflation Expectations are rising, its our view that Interest Rates will keep moving higher. We havent really seen the Growth Outlook change that much. If real yield starts to move higher, thats optimistic for risk assets. Perhaps highlighting just how the president ial election is impacting global assets. I think whats maybe more interesting and maybe erin can speak to what the trends look like here, the areas outside of the Core Infrastructure plays, outside of financials, we had a better than expected retail sales number today. The Retail Stocks have gone perking up as well. Maybe because of the consumer is in decent shape, we have some inflation. What do the trends look like there, erin . Again, were seeing a positive expectation of inflation. Investors are feeling better about the markets and were also just seeing better sales come in. I think going into the end of the year, our typical santa claus rally, this is where we could really get some decent movement, particularly on some of the Consumer Discretionary stocks. Weve seen them starting to be more the leaders along with the financials in the past couple of weeks. Moving away from all those dividend plays. And i think this could be one of the plays for the end of the year. The intersection of politics, Central Bank Policy and stocks. Erin, thank you for joining us. David, a pleasure having you on. Thanks for having me. Mike, thank you. Well, the shaping of the Trump Administration certainly under way. Our john harwood joins us now with more on that developing story and developing every moment, john. Its developing rapidly, david. First of all, lets just talk about a couple of the big jobs. Treasury secretary, we dont know whether a decision has been made, but a former Goldman Sachs exec executive, head of fundraising for the Campaign Just arrived at trump tower and sounded very much like a treasury secretary in waiting, even though he said he wasnt going to comment. He said he was working with the Transition Team on getting the biggest tax cut since ronald reagan. Didnt rule himself in or out, but theres a lot of speculation that that is in process. In terms of the secretary of state job, a lot of talk about Rudy Giuliani. This is someone who does not have diplomatic experience. Of course he has Law Enforcement experience and he was the mayor of new york city. He was u. S. Attorney and worked in the Justice Department during the reagan administration. But that is one that would be someone new to the realm of diplomacy. Now, theres also a tremendous amount of turmoil within the trump Transition Team, especially on National Security, which is very concerning to republican veterans of National Security policy. Mike rogers, who formerly chaired the house intelligence committee, abruptly resigned from the Transition Team this morning, saying that he was turning over that process to mike pence and the trump family and others. This is believed privately by those close to the transition to be a reflection of a what is described as a purge of those people close to Chris Christie who formerly headed the transition, but was demoted in favor of mike pence, who is now leading it over the weekend. Now, in addition to that, you had Elliott Cohen of Johns Hopkins who was a neoconservative, National Security advisor to the Bush Administration and a prominent republican voice, conservative voice in National Security, putting out a tweet this morning saying that my previous advice is reversed. He said he had told people to cooperate with the trump transition. Now he says stay away, theyre angry, theyre screaming you lost, we won. And the suggestion overall of this turmoil is theres a very small group of people who are very close to donald trump, both in terms of surrogates like christie, giuliani and others, not a big policy breadth to his advisers and it is looking like its a difficult process of staffing up the government, guys. Yeah, john, interesting. You may not get a lot of those typical people who would join a Republican Administration on foreign affairs. Some, i think, are saying if youre asked, its your patriotic duty, but it does appear given that tweet we just saw that others are going to have a very different view of it, arent they . Exactly right. And when i talk to people both in the outgoing obama administration, people who used to be in the Bush Administration, people are looking for some measure of continuity in Foreign Policy and National Security. You know, youre looking for people who have experience and are familiar with these issues and the players involved. The number of people close to donald trump who fit that category is not large. He needs to expand it. We dont know how that process is going to proceed from here. We certainly know theres a lot of turbulence at the moment. Yeah. All right, john, i know youll be watching it closely. John harwood from washington. As we mentioned earlier, carl is at general electrics annual minds and machines event in San Francisco and he joins us now with a look at what is coming up. Carl. Hey, david, yeah. Just listening to johns report, it strikes me that the election was a week ago and in that time weve worked hard to gather the thoughts of ceos and Business Leaders about all the uncertainties that john was just talking about. Ge is certainly smack in the middle of a National Debate about manufacturing production and free trade. They are highly leveraged to any changes in the dollar and Inflation Expectations and tax policy and m a policy, so we do look forward to talking to jeff immelt in the next hour here on cnbc about the responses to the election, preferences for cabinet choices, predictions about just what kind of policy changes are likely, would be effective, all of that coming up in the next hour. Very excited about that. The other half of this conference, david, is about ges digital efforts. They call it outcome as a service, trying to help someone with a very expensive tool, like a jet engine, get another percentage point of efficiency by leveraging things like augmented reality and the amazon echo. This is where they show all of that off. Its been a big part of their marketing campaign. Youve probably seen their commercials over the past couple of years. But this is the fifth year they have held this conference. A lot of vendors and partners, 2600 of them. This is how theyre starting to explain to people how changes in the internet are going to change the industrial economy. We look forward to talking with jeff about a. I. , for instance. How in the world does that change the life span of an engine on a 757. So a lot to get to with jeff immelt. Well talk about media and an update on al stem and ge, baker hughes, all of that coming up soon. Carl, of course we want to hear his thoughts about a Trump Presidency. Im interested in so many of the different issues. But you bring up an interest of mine, which is certainly the growth in artificial intelligence. People may wonder, how does a jet engine figure into that. But as im sure as you know and will tell us more, the chips that are implanted in these jet engines that are sending off data constantly, this is the internet of things, isnt it, that we talk so often about . Im just looking at two deals they did today, terms were not disclosed. But one is a Data Intelligence company. The other is a leading Machine Learning and Intelligence Systems company. I mean this is no longer pie in the sky. I remember when we would talk about it with jim and it sort of felt like it was, but no longer. Were seeing real concrete applications in the enterprise, things we talk about on squawk alley a lot on a consumer basis more often, but this is turning into an enterprise story and where ge will help walk us through some of that. Yes, the melding of minds and machines says it all. Carl, looking forward to the interview. Well see you a little bit later in the show. Thank you. When we return, a departure shaking up the future of banking regulation. And buffetts big bet on airlines. Why he thinks now is the time to be bullish. Well speak to the former ceo of Continental Airlines. Stay with us. Ous moment . Cialis for daily use treats ed and the urinary symptoms of bph. Tell your doctor about your medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis. Sometino big deal. Shing my gums bleed. But my hygienist said, it is a big deal. Go pro with Crest Pro Health gum protection. It helps prevent gum bleeding by targeting harmful bacteria on your gums. Left untreated, these symptoms could lead to more Serious Problems including tooth loss. Gum crisis averted. Senator Elizabeth Warren bringing minutes ago at the wall street journal ceo council. Theres an old joke here in washington that if you dont know what to write on any given day, always use the headline democrats in disarray because its almost always true and that was never more true than this week as democrats try to figure out where theyre going in a postobama democratic party. Elizabeth warren signaling where she would like to go in a postobama air ar for democrats on capitol hill. She also took aim on steve bannon, the guy coming in as senior strategist for the Trump Presidency in the white house, a very controversial figure of the heres what Elizabeth Warren had to say about him. This is a man who says by his very presence that this is a white house that will embrace bigotry. Here i am with the Business Leaders of america, and i just want to underline something that every one of you know. Bigotry is bad for business. Now, democrats will have an opportunity to vote on their leadership on the house side on thursday. Were starting to hear some of the first rumblings that nancy pelosi might be facing some sort of challenge. Not clear yet whether that will materialize or not, but clearly democrats are shellshocked by the scale of their defeat, trying to figure out where they go from here and trying to figure out if the leaders that have been in place are the right leaders for the future, david. Eamon, thank you. Mary jo white announced she will be stepping down in january. This as donald trump prepares to assume the presidency. Bank stocks of course have been rallying in recent sessions, until this morning, on the assumption that his administration will pursue policies of deregulation, certainly involving doddfrank. For more lets bring in camden fine, the ceo of independent Community Bankers of america. Cam, trump going to be good for your industry . I think so. I think particularly for main Street Community banks and regional banks, his administration is signaling that they will be very good for our industry. Why . Because he has in his public statements and some of his surrogates have talked about rolling back doddfrank, which i think was some overreach there. Theres been a plethora of other regulations enacted over the last six years that are just crushing smaller Community Banks and regional banks, and that needs to be rolled back. And he has signalled that hes going to roll them back. Right. What would be give me some examples of what your expectations would be then in terms of what might be rolled back and how it will benefit your bankers. I think some of the small lending and mortgage regulations need to be pared back for Community Banks and regional banks. I believe there will be some serious modifications at the Consumer Financial protection bureau, some of which are badly needed. I think that the banking agencies will receive new Banking Agency heads, and i think theyll be more receptive to taking a slower pace on just the sheer amount of regulations that they issue and overload these Smaller Banks with. Camden, some people say that tearing up doddfrank will help the larger banks, the larger Financial Institutions like jpmorgan more so then the regional Smaller Banks. What are your thoughts on that . No, i dont think so. I dont see a tearing up of doddfrank. I see maybe more like a repeal and replace of doddfrank or large portions of it. Chairman hinterling has introduced the financial choice act, which is his replacement for doddfrank, and its anything but easy on the wall street banks. It doubles the penalties for wrongdoing, it requires higher capital accounts, leverage capital accounts, so i wouldnt say that the choice act goes easy on wall street. Youve said in the past, cam, that trying to imagine what a Trump Administration would do depends on the people he surrounds himself with. We dont fully know that. In fact we really dont know that to a large extent yet. What are you watching for to sort of try and divine where things are going to go . Well, he has not assembled his economic or Financial Team yet, so i think Everybody Needs to take a breath and wait for those individuals to be put in place. But certainly, for example, in the s. E. C. , paul atkins might be a candidate. Hes heavily involved in the trump transition. He could be a possibility. Were looking for people at the federal reserve, people at the occ, at the fdic, that actually have banking experience, regulators that have proven that they have common sense when it comes to enacting regulations. Those are the kind of signals well be looking for as he names his Financial Team. Camden, i just want to point our viewers attention to the move that were seeing in banks. Jpmorgan, Morgan Stanley among others posting losses, this after financials have been one of the best performing sectors since the election on this bet of deregulation. But how long does deregulation will it take, the actual process, the timetable . Oh, i think if the Trump Administration hits the ground running in january, and i know that the house and senate will hit the ground running because they have already introduced many of the bills that they would like the president to sign, i think by this Time Next Year we could have substantial regulatory relief, particularly on main street and at the regional banks. Cam, appreciate your insight. Sure. Of course well catch up with you as this process moves along. Thank you. Thank you so much. Youre very welcome. Camden fine from the independent Community Bankers of america. When we return, Warren Buffetts big bet. Why hes changing his tune on Airline Stocks. Well speak with the former ceo of Continental Airlines, Gordon Bethune, up next. Welcome back. Warren buffett disclosing new investments in american airlines, delta and continental. Joining us is Gordon Bethune, a cnbc contributor. A pleasure to have you on the show. What are your thoughts on this new investment from Warren Buffett . It certainly comes as a surprise, given that warren in the past has openly criticized the airlines industry. Well, i think its a sign of confidence the Airline Industry isnt what he invested in in 1989. Its certainly transformed itself. I think it kind of endorses the four top management teams on this 80 of the marketplace. And i think the oil getting stabilized and maybe some new Growth Opportunities in america says it might be a smart play. I would never bet against warren, thats for sure. Gordon, the plunge in fuel prices, yes, helped the Airline Industry last year. I think it was record profitability for the airlines in 2015, but now this speculation that opec will cut back on production later this month at the opec summit. That could result in Oil Prices Rising and, therefore, fuel charges also rising. Is this investment too late, i guess . I dont think so, seema. One of the things opec pulled back the last time they tried it because they dont have the heft they had. Theres a lot of alternative sources out in the world today that werent available 20 years ago, so you may be correct and they may be able to enforce a higher price, but im not sure they will be. What other ways can airlines improve pricing power, though, if fuel charges do rise . Well, you price about 90 days out. You rarely sell tickets more than 90 days out, so you have the chance to recover a growing oil price by starting raising prices on tigckets. Thats been the conventional wisdom to protect yourself. So the hedges arent a really good way to protect yourself. Its that Everybody Needs to raise prices when oil goes up. Gordon, i mean its been an interesting year for the airlines. Of course after last year. Do you when you look at the group from your perspective think that its worth buying . Well, ive never seen it this good, david. I mean this is as good a management teams that are out there. They have got really stable fleets. The economy is doing well. They have learned or are learning, as you can see with the initiative united took this morning, to compete with the allegiants and spirits of the world. So i wouldnt underestimate these guys. You know, weve had this conversation so many times but it always seems something comes along to bite them in the posterior. What would it be, if theres anything coming along in that front . And its been a while, i should point out. I think, you know, national or International Unrest is always the big killer, the world trade center, big problems in the middle east. Those tend to dampen markets and dampen travel and dampen enthusiasm for investment. So theyre subject to the same thing the rest of the economy. If the economy goes into a slump, the airlines are definitely going with them. Gordon, we have seen more than one terrorrelated event or act this year. Theres also this concern that with donald trump in the white house, well see elevated geopolitical tensions. How does this all sum up, i guess, for the passenger and flights Going Forward for the Airline Industry . Im not sure, seema, i would agree that trump offers any more exposure to terrorrelated incidents on airplanes. The world has come a long, long way since 9 11 in implementing security. We know its not perfect, we can see that, but theres in our country, the best, most secure Transportation System in the world. So i dont see that as being a detriment to Airline Stock price and airline growth. I just dont. In terms of flight activity, what are you expecting this Holiday Season . Well, you know, obviously thats great wish it was christmas every day, the airlines love it. But at the same time they know that january is coming and that dropoff will slump. They priced that and theyll be there and get their share of the revenue. Im positive. Even though united says they may restrict carryons. Women can bring on a purse, men can bring on a briefcase, but no carryon, gordon. One of the things its rubber meets the road at the gate. The guy who doesnt check his bag and he gets there and has to check it but he knows that hes escaped the charge because he got beyond security. My idea would be if youre going to sell a ticket that wont allow a carryon, put that on the boarding pass and the tsa wont let them through the tsa with it. So you can prevent those kinds of things. Some people dont want to carry a bag and they shouldnt have to pay for the baggage costs. Well leave the conversation there. Gordon, a pleasure to have you on the show. Appreciate it. Thanks, seema. A quick programming note, the United Airlines Ceo Oscar Munoz will join closing bell today at 4 30 p. M. Eastern time. You dont want to miss it. Coming up right here, the trump transition. Well discuss how the president elect is shaping his administration. Plus tackling hate speech. How one tech company is updating its platform. Ill let you guess which one were talking about. Thats next. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle. And it keeps my investments fully mobile. Even when im on the move. Sign up at etrade. Com and get up to six hundred dollars. Good morning, everybody. Welcome back to squawk on the street. Im sue herera with your cnbc news update this hour. President obama arriving in greece where he was welcomed by the greek president. It is mr. Obamas final foreign trip as president and he will also meet with the greek Prime Minister later in the day and hold a joint news conference. Hundreds of German Police officers searching more than 200 offices, mosques and apartments of members and supporters of the islamic group, the true religion. Germanys Intelligence Service has warned that the organization glorifies jihad and allegedly helps recruit people for isis. Back here at home, aaa projecting nearly 49 million americans will journey 50 miles or more from home this thanksgiving. Thats a 2 increase over last year, and it would be the most thanksgiving travelers since 2007. Aaa credits an improving economy and lower gas prices for the increase. And a california ceo has been put on leave after comments he made about assassinating donald trump. Matt hair began of Cyber Security startup packet sled posted on social media that he planned to kill trump. He said it contacted the secret service. Ill send it back downtown to you guys. David, back to you. Thank you very much, sue. President elect donald trump and Vice President elect mike pence meeting at trump tower this morning. The Transition Team nearing its picks for major cabinet level posts such as secretary of state and treasury along with attorney general. Senator Elizabeth Warren sounding off on the trump transition moments ago. Take a listen. It doesnt start by hiring a bunch of lobbyists to run the transition. It doesnt start by floating names of people who have run giant hedge funds to be able or been part of that to be able to run the treasury or people who come from industry to be able to run the regulatory agencies. You know, the American People understand about the revolving door, and i think theyre really sick of it. Joining us now, veteran strategist, christey setser who serves add Senior Advisor to the al gore and howard dean president ial campaigns and harold hogley from the defeat crooked hillary pac. Harold, ill start with you. Your own sense in terms of how the transition is going. Well, its no surprise that someone like Elizabeth Warren would be upset. However, she didnt have a problem when she backed Hillary Clinton who was probably the largest backed candidate in history from wall street who used wall street hedge Fund Managers to write the Regulatory Reform so that was just ridiculous on its face. Look, i think donald trump is trying to do what so many politicians have failed to do over the course of my lifetime which is bring in outsiders to try and help shake up washington. The hiring of steve bannon, someone like that who for a long time has had his finger on the pulse of the common american man who has been left behind, and woman, who have seen their jobs shipped overseas, someone like reince priebus, the chairman of the rnc, who is an establishment person, to bring in warring factions within his own party is pretty gutsy and it shows that donald trump is every bit of the manager we thought he would be by bringing in folks of differing opinions and views to try to get this country on the right track again. Christey, i would assume you take issue with that . I take issue with very much of that, yes. First, i think its awfully rich to say that donald trump is bringing in outsiders. He seems to know about six people, including his own family and the several people who are in the public eye who supported his campaign. So yes, Rudy Giuliani for secretary of state . Hardly an outsider. Names like jeff sessions, john bolton, these are names that have been floating out there for republicans since, what, the 80s i guess . The thing that is most concerning i think to the majority of the country who did not vote for trump and the millions of us who were frankly terrified of what a Trump Presidency could bring is that he hasnt given us a lot of the Southern Poverty Law Center says there has been 300 hate crimes committed in the last week. Trump had to be proactively asked about that, if he had anything to say to people who are committing hate crimes in his name. Finally he just said stop it. Look, the whole thing is, is quite disconcerting for many millions of people right now. Hogan, this morning we get word that mike rogers is no longer part of the transition. National security certainly an important component of the Trump Administration given their ambitio ambitions. Any concern on your part in terms of how that transition is going, particularly when it deals on the National Security front . Not really. I mean, look, National Security is one of the top four issues for republicans. Its one of the top 14 issues for democrats. Its something that donald trump ran his campaign on about securing the borders and also defeating isis instead of this slow roll thats been going on under the obama administration, calling them the jv team, completely ignoring them, pulling out of the region, creating the vacuum that allows isis to tloif ahrive and surviv. I think donald trump will pick someone who is strong, who knows the region. Quite frankly hes going to listen to his generals, the ones that will tell him exactly what he needs to do over there to defeat this threat that not only has thrived over in the middle east but is now starting to thrive in this country, coming in through the porous borders around mexico. Weve seen more terrorist attacks on our home soil than ever in history before and one of the Biggest Issues people voted on other than the economy was security. I heard more moms and dads say security was the Biggest Issue for them. And donald trump was the only one speaking to that. Whereas Hillary Clinton clamored for open borders and a 550 increase in Syrian Refugees that she said would be unvetted. Hogan, i hear you prosecuting the campaign as opposed to dealing with the reality. Trump won. Really, more terrorist attacks on u. S. Soil now than ever before . Coming across the Mexican Border . These sound like the campaign points. But were talking now about the National Security team and what thats actually going to do to make sure that, i guess, isis doesnt actually continue to have any gains. You cant fix the problems unless you diagnose them first. Donald trump was the only one diagnosing the real problems and not sticking his head in the sand like the other side. Those are the points from the campaign because those are the points that got him elected to this office and quite frankly if he reneges and backs off on those particular promises, hes going to have a serious problem. Christey, last word to you. If change to donald trump means appointing a bunch of 70yearold white guys to positions that they have no background or qualifications to hold, if thats the change his supporters voted for, i guess thats what were seeing right now. To the security issue, again, i believe that many millions of americans right now actually feel significantly less secure given the policies that hes espoused throughout his campaign. Whether that means youre a black man and terrified of the stop and frisk policies, whether youre a latino man that believes youre going to be more open to hate crimes because trump has called latinos rapists and murderers. Whether youre a woman that believes that the serial sexual assaulter that is our president elect wont take women very seriously when they report crimes like this. Theres a lot of reasons to think that you should be scared and hes not doing a lot to change that. Listen, we thank you both for sharing your thoughts at this point and well be watching that transition very closely. Were getting a ton of fed speak today. Steve leishman is joining us with that. Two fed officials are watching closely for what fiscal policy comes from the new Trump Administration and that it could affect Monetary Policy. If we end up with a much more acalm dafb fiscal policy, if that were to occur then we shouldnt have as much accommodation in Monetary Policy. So an implication would be that wed be tightening more quickly if we have a stimulative fiscal policy. He added Monetary Policy has been carrying too much of the load to stimulate the economy. Hes a voter this year on the fed. He also supported a december rate spike. Fed governor dan tarulo speaking earlier this morning generally agreed the time is right for a rate hike. Hes the leading fed bank reg later. He was asked about the chance that doddfrank under the new administration could be weakened or scrapped, including whats happening in congress. He urged the audience to remember why the new rules were passed in the first place. It was because of a financial crisis which followed an extended period of buildup of unsustainable lending and other Business Practices and which elicited a widespread, bipartisan call to do something. He added a cornerstone of doddfrank is bipartisan agreement that taxpayers should not bail out the banks ever again. He did support easing regulations on Smaller Banks. Seema, the chance of a fed rate in december now topping 80 . Well see what happens. Steve, thank you so much. Lets talk more about markets. Art cashman is joining us on the panel. There seems to be a little reluctance with the dow down about 40 points as to what a Trump Presidency will really mean for markets and the economy. Is this just a brief pause or is this skepticism out there . Well, i think this is a good week for consolidation. We had a very big run last week and i think you want to maybe put things in order. The other thing thats happened is oil, which had a nice spike overnight, is backing off its highs and that always gives the market some second thoughts. I think thats where we are now. Youve got the s p is up, but the dow is backing off. Home depot and Goldman Sachs probably pulling it down a little bit. If you missed out on the 5 rally that we saw in the dow last week, is this the time to jump in and to be a part of that trump rally . Well, i think you probably want to wait until a little bit later in the week. Wed like to see some of these cabinet appointments solidified, find out really whos going to be there. I think Rudy Giuliani at secretary of state was a bit of a surprise to everybody. You know, they saw him perhaps as attorney general or a different role. So well have to have these things begin to solidify. So i think this will be kind of a range bound week and you can probably wait until later in the week to make a move. The nasdaq now up 1 as tech rebounds. Art, thank you for your perspective. Internet giants making changes. Julia boorstin joins us with more. Twitter, google and facebook all announcing changes. Twitter tackling cyberbullying on its platform, upgrading its mute feature to unable yorsz to mute words, phrases and notifications they dont want to see. Twitter is upgrading tools to allow users to directly report conduct that violates its policies. This as twitter looks to improve its experience to grow its relative low stagnant user base. In the wake of growing concern about how the spread of fake news influenced the election, google and facebook are also making moves, cracking down on which sites and apps yoz their adselling software. Google issuing a statement saying we will restrict ad serving on pages that misrepresent, misstate or conceal information about the publisher, the publishers content, or the primary purpose of the web property. Now, facebook quickly followed suit, clarifying its policy about its audience network, which puts ads on thirdparty apps and sites, saying we do not integrate or display ads in apps or sites containing content that is illegal, misloading or deceptive, which includes fake news. While implied, we have updated the policy to explicitly clarify that this applies to fake news. Now this follows a buzzfeed report saying that renegade facebook employees formed a task force questioning the role facebook played in promoting fake news during the Election Campaign cycle. Guys, back over to you. Julia, thank you. Coming up at 11 00 a. M. Eastern time, carl will sit down for an exclusive interview with ges ceo, jeff immelt. A lot more ahead. Stay with us. A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley since the election, no sector has been hotter than the financials and the banks. But is the bank run already done . Find out at tradingnation. Cnbc. Com. Whether its connecting one of the worlds most innovative campuses. Or bringing wifi to 65,000 fans. Businesses count on communication, and communication counts on centurylink. Whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. Welcome back to squawk on the street. Stocks here mostly higher but Energy Leading all s p 500 sector. This as west texas crude surges to 45 a barrel on hopes for a possible Production Cut from opec. Energy leaders today include chesapeake energy, murphy oil, apache and marathon all up 49 , guys. Back over to you. I want to direct our viewers attention to paul ryan who has just taken the podium at to jus podium. Lets listen n. The president will be judged on the results of this administration. Thats why were very eager to get up and running to help him with his transition, to get up and running and to make progress on the mandate that has been given to us by the American People. Were confident about moving forward. Were confident about the transition and were very, very excited about getting to work for the American People. [ inaudible question ] those are decisions that are being made with the Transition Team. None of those decisions have been made yet. Were sitting down with the Trump Administration and waiting along with our colleagues to come up with our plan for lame duck and also for 2017. Its very exciting. Were having constant conversations and havent made any of those specific decisions yet. Mr. Speaker, the president elect has signaled that he will use his Adult Children as his advisers in his administration. Do you have any concerns about them potentially getting security clearance, number one . Two, should trump take any steps to ensure conflict of interests between running his business ill let the Transition Team comment about those things. Were focused on our job in congress. Donald trump is a multibillionaire, successful businessman who has been so successful because he has surrounded himself with good people. He is a man who has made great successes, created tens of thousands of jobs because he gets good advice from good people around him in his life. Whats wrong with that . Thats a good thing. Well focus on doing our job in congress. Is he going to focus on populating his administration. We will help him be as successful as he is going to be i think he will be a very successful president. We have an exciting agenda, Transition Team were working with and excited about getting to work for the American People. Has steve banon personally come after you, your primary, written about your children, or his publication has written about your children, questioned your school decisions. He has mocked your catholicism. Do you think, at any point im not worried about im not looking backwards. Im looking forward. Im looking forward to the future, how we make this work for the American People, how we help president elect trump be our most successful president in our lifetime. Youve heard me say this so many times. 70 of the people in this thags think america is going down a wrong path. They just said get on a better way. Get on a better path. Thats our job. Look forward, make president elect trump to help the American People fix this countrys major problems. You built your career on forming entitlements, lot of conservative ideas. Donald trump just won on a platform that, in many ways, is not terribly conservative. Are you prepared to lead a charge were on the same page with our president elect. I speak to donald trump nearly every day, i spoke to mike pence this morning. Were going to make sure its a successful administration. More importantly, the voices we heard from this election from the American People are acted upon, that we actually fix this countrys problems. To get to your specific point if you take a look at what obamacare did to our entitlement programs, it made them worse. Were going to fix that. Were going to help fix these problems plaguing this country whether its sky rocketing health care costs, lack of jobs, regulatory red tape thats strangling jobs and businesses, fixing our National Security, securing our border. These are all things were excited about, rolling up our sleeves and getting to work with our incoming president to make good on his promises. [ inaudible question ] roads, bridges, structure, are House Republicans ready to support were going to work on all these things in the transition. Budget reconciliation and processes. These are things were working on with the transition. Its going to take time to figure out exactly what bill comes where, how it all adds up. Thats what the congressional process is all about. The point is, donald trump wants job. I talked to donald so many time this is week. Lets make sure we get people back to work, lets make sure we get this economy growing, take all this uncertainty out of the economy thats plaguing it and get people back to work. This is something we share. Were excited about working on this with donald trump. Thats why i am very confident that we are going to have a unified government that working hand in glove with this administration to make good on the commitments and to get people back to work and fix this countrys problems. Thank you very much. Appreciate it. There you heard House Speaker paul ryan, of course, talking about the plans for his congress. One that he will be leading in the house of representatives as he works with the Trump Administration as it puts its transition in place its team in place, i should say, during the transition that we have, seema, talking about many of the issues that trump raised. Foremost, of course, putting people back to work. Strike a positive but strong tone, prioritizing health care perhaps here. The question there, full repeal of obamacare or a vision . Well have to see. Going to be interviewing the ceo of ge shortly. Many of those same issues will be front and center in your conversation, carl. You got that right, david. Well talk to jeff emmelt about the election, this Ongoing National and global debate about globalization, taxes and trade and perhaps m a, the way digital is changing the industri industrial. Google banning fake news sites from their ad software and facebook remains under pressure as well. Well talk about all of that when squawk alley continues at the top of the hour. Carl, we will be, of course, watching very closely. Shares of ge, by the way, are actually down a bit this morning, seema, about 75 cents. But it is believed to be potential beneficiary of the Trump Administration. Speaking of the market as well, a bit of a selloff there. Lets get to Rick Santelli with the call. Hey, rick. Thank you very much. I would like to welcome peter bookfar. Peter, ever since we double bottomed in july, many bond afficianados have been bearish. Not keeping up with the bredth of this move. Your thought on those relationships . The bond has doubled. Germany and japan are doing qe, and throughout europe. The trajectory is all still the same, a rise in Interest Rates, rise in the cost of capital. Its also happening throughout asia as well. Now do you think the fact that weve added about 25 bases points to that spread, now in the 190s versus hanging out in the 160s or 70s, does that have implications and tell us that investors that want to go into europe might be disappointed by the returns . Could you take it that far . Yes, possibly. But i think the initial knee jerk is the inflationary implications that were going to experience in the u. S. , particularly in the wage front. So, we want to have stimulus. We want to liberate the economy, both from taxes. Where are those jobs going to come from . Well put somebody on to build a bridge. If we take them from a construction job building a home were not necessarily better off in an economic standpoint. You need higher wages to encourage people to come off the couch. Maybe thats why that spread has widened. Very interesting. Dollar index. Peter, where the traders are, they cant print enough charts. Were not that far away on a closing basis for jumping the levels we havent seen since 03. Theres no way the fed will normalize and not add to this dynamic. Your thoughts on what it means both from an average american standpoint in the country and multinationalist trade outside the country. One thing trump wants to do is bring jobs back home. Stronger dollar is naturally going to help that. Inflation direction will be key to the dollar over the next year. If inflation starts to rear up more than people think, thats actually going to be dollar negative. A lot of pushes and pulls with the dollar. And i think that we have to be careful what we wish for if the dollar strengthens much further from here. Real quickly, in 20 seconds, are the emerging markets going to feel more over this dynamic that seems unstoppable in some ways . I get the strong bear, but emerging markets have been through their fiveyear bear market and that bear market has ended, coincident with the end of the bear market in commodities. Peter, as a technician, do you think well get a pause here or do you think this dollar index will keep going like a hot knife through butter . I expect a big pause here. This is major, major resistance. All right. I tell you, peter, we dont agree on everything. We agree on most. Im going with the hot butter analogy. Thanks for being my guest. Carl quintanilla, back to you. Rick, thank you very much. Good morning. It is 8 00 am at ges conference here in San Francisco. 11 00 am on wall street and squawk alley is live. Good morning. Welcome to squawk alley. Im carl quintanilla, coming to you live from ges mind and machines conference in San Francisco. John fort, Kayla Tausche and nick milken joins us. Were a few minutes away from our interview with ceo jeff

© 2025 Vimarsana

vimarsana.com © 2020. All Rights Reserved.