Transcripts For CNBC Squawk On The Street 20161122

We begin on dow 19,000 watch. President elect donald trump lays out his first 100 days in the form of a video. Says hes going to abandon the tpp trade pact on day one in the white house. Amazon could be getting into the lucrative live sports business. Reports say they have held talks with the nba, mlb and the nfl for live game rights. But first up, stocks hitting those record highs, the dow is within 44 points of 19k, the s p just two points from 2200. Small caps making history as well. The russell at an alltime high and in the midst of its first 12session winning streak in 13 years, jim. Technicians love this setup over the next few weeks. More than 700 stocks hit an alltime high. Thats very positive. The groups that have been involved in this rally are broad based, they dont seem to just be all oil or all tech or all bank, its really a huge part of the s p. We saw yesterday the kind of a catchup trade with a lot of the oils. Weve got cold weather, a potential opec deal, a president who obviously a little more pro fossil fuel so its a broad panoply. Ive got to admit every time you think its done, it finds something else. Yesterday was oil going up. It was like a pretrump move. Oil going up, a lot of stocks go up with it. So its today would be a day that it could rest if oil comes back down. So what dont you trust going into the new year . Let me give you an example of what i dont trust of the last night im reading jack in the box and im on the palo alto call. The palo alto call fraj frankly was i dont want to just call it disappointing because they did a lot of things. They talk about a mixed environment and taking longer to get some deals done, which is unfortunate, not as robust as expected quarter. Now, one of the things thats happened, is no one is paying attention to these. Wait a second, its a new year, everything is great, its tech, theres servers. Weve got to protect servers, right . Email. Sometimes the facts dont get dont fit the story. But this is worrisome because its not what you want to hear on a call. You dont want to hear that jack in the box had not great a slowdown in samestore sales so weve got to deal with reality, deal with the fact that medtronic did not do the number, but dollar tree, signet, they were two a lot of people expected bad things from and the short squeeze is on. Yesterday was a fang day, both fang Diamond Energy and alphabet now google. So you had a lot of money coming in or else those couldnt be going up at the same time as all those others. Not to put too much stress on it, overnight the earnings we got were largely not good on monday. No, thats right. You mentioned palo alto and burger king. Also we got dicom, a small provider of Telecom Equipment and the like. Broadcom i think had some headline numbers that were pretty good. Yeah, look, dont get in the way of the Semi Conductor rally. The Semi Conductor rally is just incredible. Do not get in the way of that thing. I just have to tell you that the semis have been leaders here. Micron and particularly amd, as everyone keeps thinking that theres something going on in your world, david. Which world would that be . In m a, i mean . West world. I have yet to catch that. I think thats a fair assumption. Things are a bit quiet right now. Its unclear what well get in terms of before year end in m a but the pace continues and probably is quickening. Everybody ive been speaking to in t t, technology, media, semi com tends to be out. A lot of people talking about some of the Bigger Tech Companies getting together, but what you have to realize is that the balance of power went from the western digitals and the seagates to the companies that buy. The companies that buy exercise a little too much power so the companies that are suppliers got together, being a little bit more tough. That is how broadcom managed to get some strength. Qualcomm trying to do that but here theyre worried about china. Theyre worried about not the trade war, but the ongoing trade wars. Its not a trade war, theres already been a trade war. We just didnt know. We were on the losing end of it. Were kind of like, well, geez, there could be a trade war. Theyre like we have a vicious trade war going. And the video although qualcomm has come to a much better place in china over the last year and a half than they have been. If you caught the youtube channel, david, i dont know if youre busy watching broadcast or cable, but theres tpp is one of the first things that goes and that says although thats a benefit for china. Right. The tpp was sdiedesigned to exclude china. If it goes away, thats good for china. Right. But im saying that the tenor of the discussions with china are not theyre a little strained. Hence that china outlet, that newspaper thats communist party was talking about apple. Now, i happen to look the qualcomm nxpi deal very much but qualcomm has been going down ever since trump got in. Nike responding to that tpp vow to make it the first day one priority. Do you believe that as we withdraw from the deal that free trade finds a new Global Leader in china . I mean its not going to just stop. I was against tpp. I had stances on mad money that were prewhatever happened in the election. I always thought that we didnt get the bet of these deals and that this would be better but not better for nike. Nike was a champion of it. What can i say. Nike you can make nike a champion. That should be maybe a policy strategy. Or maybe you look at it differently. Im trying not to cast aspersions on nike, its a Great American company, and they want to be able to produce at a low cost and beat adidas, which i dont blame them. I want us to win on trade. I dont want us to lose on trade. You look at me like what . Im aware of that. Youve been talking about that for some time. You are i dont like the fact that the koreans and the mexicans and japanese ive watched the koreans, mexicans and japanese build plants within a few miles of where i have a place and i just think this is what america could look like. I mean the growth, the unemployment, 4 in the county, in the state that im in. Its just amazing. You would love that kind of growth and all the ancillary businesses that are formed because of it. But some argue we got that in the southern united states, south carolina. Yes, but the last few years we havent. And they have gone there. Bombardier just went there in a big way. Thats going to be a key test of trumps promises. You know, i think there are others who wonder whether the jobs will come back, how many will there really be. If you build a new plant, how much robotics will be in that plant as opposed to human labor. Its the ancillary. You need to put a ppg there, you need to put a Semi Conductor factory that makes those just in time chips. Its those guys. Its the need to have Grocery Stores and the need to have dry cleaners. When you see these executives get off these airplanes from japan and germany, theyre not staying at motel 6. No, understood. Ive stayed at motel 6. La quinta, i love la quinta. We understand the multiplier effect, yes. We get that. Oh. We do. Okay. Im defensive. Im defensive. No, you may be right and its going to be fascinating to watch. Im going to have a youtube show on it. Because i need its all the rage. The president elect releasing a statement on video outlining his priorities once he takes office. This was created and distributed by the transition team. This was not an event that was open to the press. Trump began by talking trade and said, as david pointed out, he plans to withdraw from tpp and then he moved on to energy. On energy, i will cancel jobkilling restrictions on the production of american energy, including shale energy and clean co creating many millions of highpaying jobs. Thats what we want. Thats what weve been waiting for. Clean coal and shale. There are not millions of jobs that can be created, theres just not. One of the reasons is because the epa has made a mandate that all of the utilities are following, which is the phaseout of the 40year plants that were built when jimmy carter called us the saudi arabia of coal. You know, those plants had a 40year life. You can try to augment them or scrap them and build natural gas. Coal is still the baseline fuel, but natural gas will be the baseline fuel in five years. But there are tremendous number of jobs involved with transporting natural gas from where it has to go and oil from where it has to go. But in terms of the drilling, look, if the gulf of mexico were economic, yes, you would have more drilling. But were stuck in a world where president elect trump does not control the price of oil. Natural gas is very cheap. Coal, can you bring coal back . Maybe to ship it away. But, look, our utilities thought that hillary was going to win too. They made judgments. Well, its easier theyre all moving natural gas is whats powering them. Its cheaper. Natural gas is plentiful. We have the most natural gas of anybody in the world, why not take advantage of it. There will be no new coal plants built in this country, period. Period. Thats just what the major utilities are committed to. Millions of jobs seems like it might be a stretch. Theres a couple of states where they are without a doubt whats coal right now, fo40,0 jobs . If you speak with Norfolk Southern and Union Pacific and csx, the coal loadings are down more than 20 and thats because natural gas is triumphant. Thats not bad. Natural gas i would argue is cleaner. I know there are people that think natural gas is dirty. Its certainly cleaner than coal unless you spend a fortune to make plants clean and the utilities have given up on that. Sure. It made sense. They were afraid that one day you would get a president that wouldnt do it and say, listen, were not going to have nicole plants. So they were phasing it out before what they thought would be a series of rules. I happen to be pro utilities. They have to have a balancing act. You cant just make it so that people who have no means get electric bills that are super high. You cant have it be a big part of disposable income. Icahn, if the small and merchant refineries start shutting down, it will jeopardize the economy and National Security alike. The Trump Administration with new leadership at the epa should move quickly next year to reform the biofuels mandate and forestall the crisis. Thats just a papered over trade that has gone wrong. It is an act that is wrong. 2005 when you read his editorial. Hes totally right. Regulation from 2005 that allows others to create them and ones who dont have them, buy them. The biofuels hes so right on that. That was such a good, well articulated argument. Everyone whos followed now, people have investments in these companies. But this is entirely like a cap and trade program gone completely wrong. I cannot believe that president obama didnt get involved in this, but its small potatoes in terms of the larger world. Yeah, this is a system that failed. And small refineries are paying way too much. Its a big subsidy for other refineries. Its ridiculous. I wish it didnt take icahn to get there. But hes dead right. That is just a factual set of arguments he puts out that are very cogent. Very good piece. A good read today. When we come back, we might see dow 19k and s p 2200 this morning. We need 43. 2 points to get 19,000 on the dow. Take a look at the premarket, looks like we might get there at the open. More squawk on the street in a moment. Alpha seems more elusive today. Is it because so many go after it the same way . Chasing after short term returns. 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I dealt with some of the people in sports two years ago around the super bowl time, happened to be on a panel with a lot of the guys who were in charge of sports for the major networks. All they said was weve got to do these tenyear deals. Why . Because google is going to come in. They were worried about google, alphabet. They said its only a matter of time before alphabet does this preemptive, look, youre paying x but we want all the Games International and will intrude. It turned out they were right about that idea but the wrong company. We talk so often about the crumbling of the socalled bundle, the bundle of programming that you buy as a consumer of cable news, including this very channel. And that sports is really what holds that bundle together. As you point out, these contracts are longterm in nature but we guys are in the midst now of significant and i would argue seminal change in the way people access tv. The internet is now tv. Tv is becoming the internet. And whoen you have directv now, which launches i think next week, 100 channels at 35. Some say you cant get the broadcast networks. Last time i looked you can still put up an antenna and get the broadcast networks. Hulu is coming out with their package before not too soon. Just put that up. Youre like al franken right now. My parents are like, did you who pulled the jimmy, did you move over the thing . Just think about if you have a netflix subscription, an amazon subscription, you get an over the top package, what more do you need if youre going to be able to get some sports or can get the broadcast networks in some fashion through your antenna, if its possible. Maybe thats somewhat naive and in an urban area it gets tougher. This change is happening and everybody is paying very close attention. The time warner at t deal of course also is a key and we are going to see real change, i think, in the next 18 months in terms of at least responses strategically from a lot of companies. Okay. Then what does it say about whos currently buying and whether they should now be prepared and will have to pay much more because of a deep pocketed player like amazon can go make a deal. Thats a great question. If you were time warner, you might want to sell out. You might want to sell at this point or will you see more integration. More integration of once again back to distribution and content the way weve seen with time warner of course and at t. If you were cbs maybe youd want to tie up with a movie theater. With a viacom and then something. But if youre a charter do you want to own content . If you are a comcast, which you already have a lot, do you want more . Its going to be fascinating. Amazon has got a lot of money and they play with wamp em. They have a lot of money. Why dont they just bid for the nfl . Would you really want all that . No, i dont like the cleveland browns. Right . The jags is all yours, small market. Keep the big market players. When we come back, ill get cramers mad dash, count down to the opening bell and take a look at the premarket on this tuesday. More squawk on the street in a minute. Weve gaot a mad dash. Tuesday, thats the day. Thanksgiving is in two days. Yes, it is. Its getting cold outside. And isnt that interesting . Because the old Burlington Coat factory which morphed into burlington once again more like tgx which had a great number. So this is a trifecta of companies that discount. Burlington, tjx and ross. And, david, i was looking for roughly 34 cents. It came in at 51 cents, Comparable Store sales well in excess of what the street was looking for. Just an extraordinary story because they were private equity turned. Not unlike Dollar General. Dollar tree reported great number this morning. So were seeing some this is not a surprise. Burlington has delivered. What did surprise was the stock had run so much, people thought it would sell off. No. And this is just a remarkably wellrun retailer. I dont know if youve been to yours lately, it looks much better than it used to. So retail still can win. Not only can it win but some of these Standalone Stores like burlington and best buy, very, very good. Its been a very good season for retail. Very good. And we are on the cusp of buying season. All right. Speaking of buying and selling, were going to have the opening bell in just a few minutes from now. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell in two and a half minutes. A day after all four indices have intra day and closing highs. The last time we got that, december 31st of 99. And a lot of the people i talk to who are market historians are continuing to compare this period to what was about lets say 38 days before we hit a high of record proportions. I come back and say its the makeup. Its the companies that are doing quite well. When you look at where alphabet was on a market multiple yesterday before it took off, it was below coal gate, equal to clorox. This is not the way it was in 1999. Cisco was not the most valuable company back then. Cisco was not a high dividendpaying company with slow growth, it was a Fast Growth Company with no prospect of dividend. So we can decide that amazon and tesla are out of bounds, but facebook announces a 6 billion buyback. Why . Because their stock goes down to a point where actually on 2018 numbers irz not expensive. So i dont want to compare those two other than the fact they happen to be calendar dates. Somebody pointed out the buyback from facebook is the same amount of capital they raised in the entire ipo. Its an extremely lucrative company. I really felt that this idea that the metrics remember, they have 200 metrics. Some of them were off. This is a company when you speak to ceos, when they try to figure out how to get to people, they just go right to facebook. Like how did you get those new customers . Its a monster. Financially too. Take a look at that last quarter. Their growth rate, their Free Cash Flow generation, its staggering. Youve made the argument and others agree that the multiple is still low given that growth rate. Do you know what invisiline is . The braces . I was thinking about getting them. No, no, on your show, didnt you have the guy on . Yes. They are direct wheres their advertisement . Facebook, instagram, snapchat. Thats where they advertise. Align technology. They want to go direct to the consumers, they go right to where our kids are. Its incredible how powerful that is to go to teenagers and say you need our braces. Both my kids went the traditional route. That was a shame. Not really. Youve got to take those things off and put them back on every day. So you like a mechanical screw of metal things that cut into your lips. My kids are tough, man. They dont mind. Well, thats just great. Toughening them up, you know. You better beat them until the morale improves. Who knew this guy was such a spokesman for invisiline. Im jim cramer, you might have seen me on shows like squawk on the street and mad money. Lets get the opening bell. Ishares by blackrock. At the nasdaq, ituran, provider of stolen vehicle recovery and tracking services. Dollars worth mentioning, jim. This thing is not coming in. Its amazing how people dont care. See, they dont care. They dont want to buy some of the packaged good stocks. Some of the Drug Companies. But when you see numbers like i just saw on Analog Devices, what a quarter. This is before they even finish the merger with linear technologies, adi. Take a look at that, thats a traditional analog Semi Conductor company putting up a fantastic number. These are incredible numbers. Did you see the giant bull coming at us there . No. You like that, the graphic . 19,000. Thats virtual reality. Thats a Machine Learning, figured out that theres a bull. I urge people to go over some of these quarters, and dont take your cue from palo alto, take your cue from some of these other companies that are reporting, yes, like cracker barrel. The last time i went cracker barrel, i had a piece of apple pie with a giant scoop of Vanilla Ice Cream when i was weighing in at 210. Nothing like it in order to make weight for ultimate fight club. I was in the senior division. Were you . Yeah, ultimate fight club. I see on social media the hats are at. Somewhere on the floor theyre wearing dow 19k hats. I had a 10,000 hat. Is sentiment going to be a liability or is the chase truly on . I saw analog going up and burlington going up and said these guys better blow away the numbers or else theyre going to get crushed. Palo alto had been acting palo alto did say some things i didnt want to hear. Jack in the box was a good quarter so they probably reverse at one point today. But were not getting enough negative earnings during a period of earnings. Did designer shoe warehouse blow away the number . No. But the retailers have been good. David mentioned the other day about possible banking, regional banking mergers. David, ive been working on one. Have you . Yeah. I think it could happen. You do . Yes, because its one that has a 1. 4 to book versus 1. 1 to book so therefore it would be very additive. The citigroup guys, why not keep buying up to 64. I mean you just get these stories and theyre all willing to talk about it as if im going to say a term and this is not politically loaded. The election is over and people feel good. In other words, i didnt say necessarily who won, im saying the election is over. I mean look at signet to deliver something that was quizzical. By the way, the leading gainer right now. But they delivered a darn good number. Look, comps minus 2 versus minus 4. 30 cents was the number. People were looking for 20. Theres a huge short condition in signet. People really felt signet was going to grow up, that it was a Lending Company that sells jewelry and then they put up this kind of number. It is incredible. Boeing names a new guy kevin mcallister. Did you know him . I never met him. People are making jokes about the same character the name as the character in home alone. But he ran gea aviation services. Thats a big job. Thats a big job. At boeing people have been concerned making the planes is a problem. You bring that guy in and its good. Yes, youll see the companies that do Cyber Security under pressure today. But youve got to live you have medtronic report a bad number and that was largely involved with diabetes. Right. But you just arent getting enough negative numbers to turn this company down. In terms of pieces that got people upset yesterday, that notion that apple wasnt courageous. Oh, yes. The oppenheimer note. That was not well received at apple. Do you know that . I would imagine it wasnt. Thats a long time. Ten years, how do you pick that out . A ten year rebuilding year . Even the 76ers didnt need ten years to turn around. They won last night. They have won three games so far this year . They have won three games. Hey, thats something to build off of. That is something to build off of. Jim, you did breeze past medtronic quickly with just that aside about diabetes, but the stock is down 7 . Were talking about a 115 billion market cap company. So the market cap is pretty significant in terms of dollar terms on medtronic. I see your medtronic and raise you a the deal has inverted. There was something i always find disconcerting in the release of medtronic. They said this is always a bummer when you see this. They say our revenue is disappointing. When they use that term disappointing, i feel disappointed. If theyre disappointed, im disappointed. They didnt use suboptimal. No, they didnt use suboptimal. They, of course, inverted to take advantage of a lower tax rate, also be able to capture their foreign cash. So much of that potentially goes off the table if you get changes in Corporate Tax if you can get Corporate Tax reform. Not just the repatriation we talk so often about but the lower rates themselves. Has that been discounted now in the marketplace in terms of have we seen what i guess you could argue youre going to have higher earnings so multiples conceivably have been coming down. Its case by case. Like j j has seen no Market Expansion and pfizer hasnt. But that group has been in the doldrums and i think part of that is because the currency is so bad for them that its making up you know, money that would go to them is going instead to bb t and pnc financial. And there are companies that never seem to pay the actual rate, right . You try to figure out the actual rate . Yeah. The effective. Its very difficult. It seems to usually be in the 20s, not 35 or whatever the top is. I think its worth point out that we have had a real decline in the Package Goods stores, the foods. Until today. Campbells soup reported a good number. I was just going to ask you about that. It was a good number. They beat the number. The last quarter was subpar. A number have been subpar. Youre talking 6 and 8 declines. I have a fondness for what campbell is trying to do, which is to become more natural and organic. They said were a quarter or two away and were going to do it. This was a very, very good quarter. The stock had been down a lot but its up almost 10 for the year so thats a nice win. Hormel doing well in everything but the specialties. Spam had a great quarter. I remember when we were looking for a home in the 1950s and my parents had to have a fallout shelter. That turned out to be a luxury like a home theater. But skippy was very strong and j Jennie O Turkey was good. So its great to see a reversal in a group that had been hammered. You dont think it implies a rotation back into names that were staples . I think its a rotation back into Companies Like dollar tree and Dollar General that had missed the quarter and then people had decided theyre done and it turns out they werent done. Go over that dollar tree. Dollar tree had been saying as well as Dollar General, look out, walmart is back and its bigger than ever. Well, dollar tree is able to do the number even with walmart, so theres a forgiveness trade going on today. Okay, we forgot that dollar tree screwed up. Yeah, lets give campbells the benefit of the doubt. And spam is not so bad if you put it on the right kind of crackers. Look, you put it on cheese and it doesnt do any good but you can spruce up spam on the right like maybe some old london melba toast. Thats a step up. When you serve spam, david, what do they put it on . I dont think ive ever had it. I used to live on spam juice when i lived in my car, which is by the way filled with protein. Very popular in hawaii. Im going to hawaii. Really . Yeah, really. More than pineapple . They make mai tais with it . Ill have a spam mai tai and hold some of the sugar. Cramer in hawaii. I never put jim and spam together. Lets get to i think dominic chu talking about where things are moving on the floor. Good morning, dom. Good morning, carl. Yes, when it comes to things moving down here, every trader ive spoken to this morning has said dow 19k is what theyre keeping an eye on. Otherwise well see if volumes can match up across those high levels. To start the day off, we are seeing a little weakness where we have seen it in the past, in places like utilities. Also this morning in health care as well. So on the sector side of things, we are seeing a little bit of movement on the weak side there, at least dragging things down. Telecom, Consumer Discretionary and real estate among some of the outperformers so a very mixed bag. You cant just say its the Interest Rate sensitives going down or the cyclicals that are going up. So far in trade early at least were seeing a bit of a mixed picture there. We are taking some at least positive efforts coming out of whats happening in europe for the time being. We are seeing some movements higher in all of the major forces there. The german dax up, france, ftse, italy, spain all showing real signs of strength in trading over there so at least were seeing a little carrythrough from our record highs yesterday. One other place to watch, the russell 2000 small cap index, we do know its been 12 days of small gains. Were working on number 13. It is not moving as highly as maybe some would want as a leading indicator for some of the overall markets, but that trump trade, the u. S. Focused companies not as affected by the strength of the u. S. Dollar certainly a focus there. One other thing id mention and this is something you guys were just chatting about, the idea theres been this rotation back into certain valueoriented names, one of the things were watching pretty closely is the outperformance this year of the russell 1000 Large Cap Value index versus the growth index, a theme thats been carrying on ever since the elections when many of these Tech Companies that are momentum names have been underperforming, some of the industrial counterparts in other indices. Something to watch there. Back over to you. Dom chu on the floor. Lets get to the bond pits as well and check in with Rick Santelli at the cme group in chicago. Good morning, rick. Good morning. Well, its a fascinating day. If you look at a one week of our tenyear, you can see were holding at the top of a range and the range basically goes back to july of last year. But bund deals are not looking anything like ours. Look at a one week of bunds and theyre moving lower. Lets look at november, a month. Why is this significant . Because relative value trade is now dead. U. S. Interest rates are firm, probably going to get firmer. If we look at tens minus bunds, you can see that this spread has widened dramatically, dramatically. Another interesting dynamic going on is if you look at tenyear minus twoyear, its been flattening recently. Now, forget what historically steepening and flattening means. All those rules dont apply anymore, whether its fed, whether its Central Banks globally, whether its how traders have treated ultra low Interest Rates. The long and short of it is the flattening of plalate is due to twoyear notes moving higher. Now, finally lets look at the dollar index. As i look up, its virtually unchanged. Its trading slightly over 1. 1. So1 101. The dynamic of higher Interest Rates is playing into the dollar and the dynamic of higher rates in the u. S. Is putting much pressure in various areas of europe, although the latest drop in yields in europe is collateral damage, so to speak. Short collateral, meaning everybody is scrambling to get the perceived best credit, which are of course the sovereigns and theyre in roughly short supply. Think of the quantitative easing going on in europe and japan. Carl and the gang action back to you. Well see you in a little bit. Meanwhile dow 19,000 is official. Meanwhile the russell is working on its 13th straight win. If it can do that, that would be the longest streak for the russell in 20 years. Ive got a lot to watch today. Well be back in a minute. Is it a force of nature . Or a sales event . The season of audi sales event is here. Audi will cover your first months lease payment on select models during the season of audi sales event. bing ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. 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But thats its a quizzical group. Well, youve got the big lawsuit obviously of the u. S. Government against anthem cigna deal which is ongoing, add hu hugh humana is going to join. Its not a much a full repeal of the aca as its going to be a redo. Some believe youll end up with medicaid just taking on a lot of it, jim. When you talk to the likes of the unh. And theyre not going to get rid of the preexisting. Right. But i just think that mcdonalds is a bounceback trade. Mcdonalds, by the way, this fast food business, people forget that that breakfast all day really, really hurt the industry and now the industry is starting to come back from it. Could you see wendys hit a 52week high yesterday. Theyre finally recovering from the all huff dday breakfast. Watch these Semi Conductors. Theyre really on fire, like no other group. Again, an ongoing supply chain story, right . Yes. Youre not seeing step functions and demand. No. Actually the companies that have seen actual Revenue Growth youre going to revert to f. A. N. G. And then invidia has. They make chips for Machine Learning and for Artificial Intelligence. Basically for simulations. Did you notice yesterday microsoft, the news about quantum computer, theyre trying to theyre moving heavily into making an investment in quantum computing . Which is a theoretical exercise until recently . Some of the people i know said theyre just throwing their money around with that. But theres a big schism with microsoft and whether they have returned to the ways of baumer. Why would they . Because it was a Deutsche Bank presentation by one of the people who works for nudella talking about how to use linkedin. Its being used against them in the european oh, in that way. I thought you meant making really stupid sgleedeals. Oh, no, no. That gives me a segue to making a major correction. The sixers have won four basketball games. How is baumer, has he brought in nokia yet . Has he brought in the surface . Belichick doesnt like the surface. Sometimes i wish i was from boston. I could like him so easy. But it wasnt for a long time with the red sox. No interceptions yet. Meanwhile markets of course close to that record high. Well get stop trading in a moment with jim. Squawk on the street will be right back. Oh caroline. So corporate put you up in a roadside motel. But with directv from at t, you can download then binge watch your dvrd shows from anywhere. That makes you more powerful than whatever it is you just stepped in. Or that friendly dumpster diver outside. I wouldnt sit there. Its your tv, take it with you. Now you can watch your dvr anywhere, at no extra cost, with directv from at t. Losing your hair is no fun and no one wants to be bald but there is hope. Getting my hair back was the best thing that ever happened to me. Im happy with the way i look now. Im very excited about my hair. I feel beautiful. 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Keep track of the strong dollar stocks, they are going down for health care and devise. Goldman really puts a stake into the fire eye take overstory here. If you go over the very disconcerting palo alto conference call, you see why you dont want to own fireeye. And then tyson went down the most. Jpmorgan removes it from the focus list and says too much commodity exposure. But thats probably the talk to watch because youve got hormel saying a little Better Things and campbell saying a little Better Things. Has tyson overreacted . I dont know. But if you get a move in the supermarket, buy general mills. Thats the one that has been determined to try to get things right. Its come down a great deal and its a fantastic company. On fireeye, part of trumps video talked about a cyber attack plan with dod. Fire eye is kind of known as someone you bring in after. If you bring in if you talk about cyber arc, which is a fabulous company, they wont confirm if its a department of defense contract, they believe that the bad guys are already inside, that its too late, and all youre trying to do is ferret out the bad guys. Palo alto is soup to nuts and going up against big Companies Like cisco. What you really want to do is you presume bad guys in, lets find the bad guys. That is proof point for email and cyber arc for whats known as the master key inside. So those are the two differentiated from palo alto, differentiated from fire eye in particular. So dont stop it with the buy fire eye. Thats a no go. Go after the high quality ones, dont speculate on the takeout ones. I cannot believe how good this Analog Device is before the linear tech deal closed. Wait until you see when they close the ab net section. As you pointed out, device makers, medtronic leading them. But james day down a little over a buck, concerned about device makers, given the medtronic quarter. Zimmer is ive got to tell you that that was the medtronic took my breath away, because i did not expect that they were going to have a slowdown there. They claimed it was some sort of fda approval misdirection time. But i say this is a reality for industrials, its a reality for aggressive technology, its a reality for the banks. Thats the keys to this market. Jim, how are you going to handle this tonight . I have one of my favorite people. I cannot believe we managed to book her, thank you to heather gaines. This is going to be one of the most exciting, carol tome. Ive got yuval, very controversial. But carol tome, im going to have her on for two segments because i think she is the best cfo in the world. She is the person they go to at home depot to decide what people want. She is a demographic specialist. She understands america better than anyone else in the world and i am so thrilled that shes coming on and shes a gardener like me. Were not power gardeners, were zen gardens. When i get in there, it is it is so large you can get lost in that thing. Thats why jefferson had a garden because i often felt with malice towards all wait a second. Jefferson brought us the tomato, right . He didnt bring us the german johnsons. I have the biggest german johnsons ever. Thats a form of tomato. Thanks for that. Jim, well see you tonight, 6 00 p. M. Eastern time. When we come back, more on this day of milestones for stocks with the dow just a shade below 19k, dont go away. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. Good tuesday morning, welcome to squawk on the street. Im Carl Quintanilla with sara eisen whos back, david faber. The dow cracks 19k, the s p cracks 2200 as the rally continues now following the election. Oil is really the only thing that was not participating in a large way but has managed to find its way back above 48, as hopes for that opec Production Cut remain intact. Amazing day. Amazing day for commodities, for equities, for the dollar. People are now comparing the dividend on the s p at 21 versus the tenyear at 23. The trump trade is back on. I cant believe i missed ten Straight Days of the dollar shooting up to a 13year high. Always seems to happen when im gone. We were thinking of you, sara, every time we saw a new high and the euro coming close to parity, backed off a little bit. About 106 or so. And you really see the move higher on the dollar along with yields higher, all predicated on this idea that were going to get inflation and were going to get growth. Theres a lot of optimism baked in. When you look at a package of Corporate Tax cuts, rolling back some regulation and big infrastructure spend, thats bullish for a lot of parts of this market. The question is do the risks like trade offset that. That is a key question as we move further into the transition. Well get a better sense when we see other appointments, but the market over these last few sessions has begun discounting those benefits youre talking about, sara. Now were going to get some fresh data, this one on existing hoemtz. Diana joins us. Existing home sales in october up 2 month to month to a seasonally adjusted of 5. 6 Million Units and that is from an upwardly revised september number of 5. 4 million. Now were up 5. 9 year over year. The realtors are calling it an autumn revival. This is the highest annualized pace in nearly a decade since february of 2007. Median home price 232,200. And that is due to very low supply and that supply is getting even lower. Inventory down 4. 3 year over year. 2. 02 million homes for sale. That is just a 4. 3 month supply. Firsttime buyers backing off the market a little bit at 33 , down from 34 in september. Remember, these are closings in october, so deals that were essentially done in august and september and all of this happened before Mortgage Rates shot up post election. The realtors saying that this may put a dampening on the rest of the market for the rest of the year because Mortgage Rates went from 3. 5 to just over 4 . They said some buyers may be forced to delay. Well see. Thats still a beat for accounto. Back to you guys. Everybody is already talking about the jump in Mortgage Rates. Diana, thank you. As we mentioned, stocks are stealing the show. The dow hitting 19,000. Record highs all around. The s p 500, the nasdaq and the russell 2000. This has president elect donald trump laid out his plan for the first 100 days in office. He backed off the Transpacific Trade Partnership, thats at the top of his agenda. Heres what he said in a video that was created and distributed by the president elects own transition team, not an event open to the press. Listen. On trade, i am going to issue our notification of intent to withdraw from the Transpacific Partnership, a potential disaster for our country. Instead, we will negotiate fair bilateral trade deals that bring jobs and industry back onto american shores. Lets weigh in on how all of this could affect the markets, the chief investment strategist from Oppenheimer Asset Management and john sylvia from wells fargo securities. Good to see you, john and john. The optimism in the markets, is it tempered at all by trumps policies and positions now on trade . No one expected tpp. Both parties were against it. But hes sending a signal here. Well, i think hes most certainly sending a signal that hes effectively at its core, hes sticking to his guns. But i think hes also tempering things as he moves forward just by the reality of what global trade is, technology and the effects on the workforce around the world and the need to keep trade flowing fairly evenly between mexico and canada. I think were not going to see anything as draconian as i think might have been implied from the talk during the campaign. I think the reality is treaties that will be fairer to both sides. I think in the past when we would do trade deals, we were always giving away more because we were looking for power and influence, thinking that the u. S. Economy was resilient enough. But in the last 10 to 20 years, what i think weve seen is the barriers of entry have been lowered for competitors around the world Via Technology and so the Playing Field, the competitive Playing Field you buy into this idea. You like this idea of renegotiating the deal . I think it will be a good deal. I think our trade deals, and i used to love them, but when i look at them now, i cant help but think they might be slightly anacronist anacronistic. So how do you factor all of that, john, into your Economic Outlook both in the u. S. And globally . John sylvia, sorry. Well, i think again, when youre looking at the overall framework of policy, the markets are betting that with the tax cuts, with the infrastructure spending, with the little bit of deregulation, that is the driving force expecting further growth and i think that is certainly the basis for the market rallying going forward. With respect to tpp and specifics, it seems as if the an institute released a study saying while tpp might be beneficial, overall if it wasnt done, it was not catastrophic. And it seems to me that donald trump is betting that his ability to do bilateral deals will get the u. S. Economy further than doing a multilateral broad deal overall for the global economy. John stoltzfus with the dow at 19,000 and the s p 500 breaking 2200, where does that leave us . How much of the optimism has been factored in . I think a considerable amount has given the fact that its going to take years to see the fruits of a lot of whats just on the drawing board. First you have to complete the design, then implement it. Youve got all kinds of execution risks. The world moves forward as youre doing this. But weve got to think that the market the stock market not anything near ahead of itself as the dollar we believe is ahead of itself. We also think that the bond market has been grossly oversold at this point. John silvia, how much of a runway does deficit spending have before those vigilantes whom were getting reacquainted with start to raise their voice . Yeah, i think, carl, this is a consideration looking at the bond market. I would say enough runway to give me maybe a year, year and a half, to see how theyre going to implement infrastructure spending, to what extent tax cuts do generate growth that may offset and apart some of the tax revenue cuts. So i think there is one way probably for a year, year and a half, to see how the markets are going to react and what kind of Economic Growth we actually get, carl. All right. We will see. Weve got to leave it there. Gentlemen, thank you. Thank you for joining us. When we come back this morning, the trump transition. A handful of positions on the president elects cabinet still up for grabs. Well talk to former deputy treasury secretary under former president george w. Bush, robert kimmitt. And then well be joined by one of the architects of obamacare. More squawk on the street in just a moment. Stay with us. 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 our mission at clover is to highest Quality Dairy products. Clover has relationships with 27 different family farms. The environment is who clover is. Without it, were nothing. Pg es been a great partner. Theyre the energy experts, were the milk guys. Pg e worked with clover on a number of Energy Efficiency projects to save energy every month. If youre part of the fabric of the community, youve got to ensure that you do things right, environment included. Learn how you can save at pge. Com save together, were building a better california. President elect donald trump laying out his agenda for the first 100 days in office. Our eamon javers is outside trump tower with more. Reporter it looks like that on again, off again request New York Times meeting is on again. Hope hicks emailed the press pool and said that that meeting will in fact take place. There had been some tweets earlier from donald trump saying that it was canceled. The New York Times said they were surprised to learn that based on those tweets. Now, though, it looks as though that meeting is going to be on again. One new thing that we are learning this morning comes from Kellyanne Conway who was on msnbc talking to Joe Scarborough this morning and she said one of Donald Trumps priorities in the first 100 days is not necessarily going to be going after Hillary Clinton, despite all those chants of lock her up that we heard out on the campaign trail. Heres what she had to say about that this morning. I think when the president elect, whos also the head of your party now, joe, tells you before hes even inaugurated he doesnt wish to pursue these charges, it sends a very strong message, tone and content to the members. And i think Hillary Clinton still has to face the fact that a majority of americans dont find her to be honest or trustworthy, but if donald trump can help her heal, then perhaps thats a good thing. Reporter and, carl, in terms of what to expect today, i talked to hope hicks inside trump tower just a little while ago. I asked her if we should expect any major names to be rolled out and she didnt think early this morning necessarily there would be any major news, so well be waiting to hear through the afternoon. We saw Rudy Giuliani going in earlier today, we saw Kellyanne Conway going in today. A number of the top Campaign Officials and surrogates are in there right now and well wait here to see if we get any developments through the afternoon, carl. Theres been nothing but news coming out of that building, thank you so much. We continue to await trumps key picks for top cabinet posts like defense, commerce, state and treasury. And what to expect from a Trump White House is former deputy u. S. Treasury secretary and former undersecretary of state ambassador bob kimmitt. Thoughts and reflexes so far as youve watched this transition take place . Well, this may be a little counter the narrative, but actually i think the transition is ahead of the game, certainly at the cabinet level. President obama rolled out his National Security team on the 1st of december, 2008. Jim baker and i went into the state department in 1988 on the 4th of december. So i think at the cabinet level, things are moving a pace. I think the goal is probably to get as many names out as possible. So that these people can begin their courtesy calls on the Senate Confirming committees during the december lame duck session. But i think right now theyre ahead of the game at the top of the cabinet departments. I think what well have to watch is once those cabinet departments heads are named, when will we start seeing those very important subcabinet names emerging. On the names that have been floated for treasury, which ones do you sound realistic, reasonable, likely, whats your preference . Well, first of all, the only preference that matters is that of the president elect. What i would say is there is a range of capability reflected in the people to whom the president elect has been talking. I think thats reflective of the breadth and depth of the treasury agenda today. Its different than when i was deputy secretary, its different when i was general counsel to the treasury under ronald reagan. It has a very strong domestic, a very strong international, National Security component. And i think the new treasury secretary is going to have to have both breadth and depth. I expect treasury to be the most consequential, the busiest of agencies both in the first 100 days and in the first year. Why is that . Well, lets start at the top. First of all, Bank Regulatory reform, whether it be doddfrank or the Consumer Finance protection bureau. Next down, major tax reform and, by the way, taking over the irs as the tax Filing Season begins. Third, treasury has become an active player now in the international agenda. They are the lead on the g7 and the g20, which will be Held Next Year in italy and germany respectively. The president elects first time on the world stage. Treasury also runs the terrorist finance program and that means theyre right in the middle of iran sanctions, north korea sanctions. They also chair the committee on Foreign Investment in the u. S. Reviewing crossborder investments with chinese investments being of particular concern these days. Leading to china, treasury also chairs the security economic dialogue with china. Will that continue. Within two months of taking office, the president elect with the Treasury Department in the lead will have to issue a new currency report on china. So again, it is an agenda with breadth, depth, its international, it is domestic and it is immediate. And based on what youve heard out of president elect trump on some of those issues, like labeling china a currency manipulator, like withdrawing from the Transpacific Trade Partnership on day one, how difficult is that treasury secretarys job going to be and how damaging or what do you think the repercussions will be of some of those policies . Well, the job is always a tough one to walk into, sara. Again, i was there with jim baker in the reagan years, john snow and hank paulson in the bush 43 years. It is a tough job. Good news is treasury has the best ratio of responsibility to bureaucracy. Its a relatively small agency, a highly capable Career Service and so its easier to hit the ground running at treasury than anywhere else. On trade, i think the president elect has put down an excellent marker. Lets judge trade agreements bilateral or Multi Lateral about whether they produce Good American jobs. I would say that on tpp, i dont know a lot of the details. But i know one of the reasons china is not part of tpp is that the Transpacific Partnership has restrictions on stateowned enterprises. The chinese dont want those restrictions. I think we need to look very carefully at the role of these behemoth state funded enterprises, if not in tpp then theyre forum. The Transatlantic Trade Investment Partnership has that key Word Investment in it and investment in the u. S. Produces Good American jobs. I think the president has the right measure for judging these trade agreements. Mr. Ambassador, i wonder, we talk a lot about those who will fill the jobs at the top of these departments. Do you have a good read on whether or not the rank and file at departments like treasury are either enthusiastic or ambivalent about serving under trump . Carl, i think it ranges from department to department. But again, having worked in the trade treasury multiple times, i think you will find it is a highly professional, nonpartisan group. The Civil Servants there i think are the best in government. Any one of them by picking up the phone could get a job in the private sector, they have just dedicated themselves to public service. So i think at treasury, they are going to be the professionals that they have always been. The treasury landing team has been in touch with the Treasury Department, as has been the case at state, defense, the National Security council. Again, i dont think theyll be more warmly received anywhere in government than at treasury. And by the way, that was the same welcome that we extended to the obama team when it came in in december of 2008. Finally, you know, the press is obsessed with these tweets about snl and the hamilton cast. Today its this madness about whether or not hes going to meet with the New York Times. How do you synthesize that when theres obviously important decisions to be made right now . I know theres a lot of focus on those tweets. By the way, National Security is my area of expertise. What i would say is what he has said in the National Security area, some of the appointments hes has made, particularly the very strong appointment of congressman mike pompeo to the cia to me are what we should be focusing on. I understand in todays world, particularly in the social media, that there is going to be a lot of focus on these other issues. I think the people in trump tower will respond to those. What i like, though, is that the transition is picking up pace, not just in the National Security area but more broadly. I think were going to see some Real Movement over the next seven to ten days and then again i hope that momentum continues as we go to the subcabinet. Mr. Ambassador, its great to have your insight. We look forward to having you back. Thanks again. All right, thanks. Happy thanksgiving to all of you. Same to you, ambassador bob kimmitt. As we head to break, take a look at where stocks are trading at this hour. Records all around. The dow is above 19,000, up about a third of a percent. S p 500 above that 2200 level, its up 0. 2 and the nasdaq also up. Retail Consumer Discretionary is one of the best performing sectors. Black friday and cyber monday right around the corner. We will discuss what is ahead for the retailers. Winners and losers this coming Holiday Season. Tures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. 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Heading into the busiest retail week as black friday and cyber monday are just a few days away. So what is the best retail trade . Jay sola and Aaron Kessler join us. Were going to attack this, both bricks and mortar and online, jay. What are your expectations as we got pretty rosy guidance from the likes of target, macys and some of the other big stores ahead of the holidays . Sara, i think black friday should be decent. Our data shows that the number of total shoppers out this weekend from thursday through sunday should increase about 1 from last year and thats a positive. Looking at cyber monday, we expect an increase of 8 in thames of total people shopping on cyber monday. So thats relatively positive for retail. What do you expect, aaron . I know you cover amazon which is such a huge part of how the online retailers will be doing. Yeah, were looking for roughly 15 ecommerce growth. That would be in line with what weve seen so far this year. Amazon has been growing around 28 , we think 28 to 30 Revenue Growth is what we would expect for amazon for the quarter, so another Strong Quarter for amazon. We expect that to continue during the holiday period here. How much does foot traffic actually get hurt by the fact that hes expecting 15 growth online. I know youre expecting only 8, but still thats where the growth is. Obviously foot traffic migrating online is a big issue. This year 48 of consumers will do at least part of their shopping online and thats almost double where we were ten years ago. So its a big theme. The key for brands is to make sure they can be online and present where consumers are shopping and that way they can manage the transition from brick and mortar to online. In terms of rationalizing the number of stores we need given the traffic we have for the retailers i cover very few are adding stores. Many are in store closure mode. The childrens place is converting from a pure north american retailer into a pure global brand. Theyre Closing Stores but starting a wholesale business and having online sales. Its been a very good stock this year. Aaron, i saw walmart is moving up its online sale instead of cyber monday to black friday. How does that change the equation and how close are they to getting some of the business back from amazon . Yeah, so other retailers get very competitive, Free Shipping offers, obviously low pricing. I think increasingly the ecommerce season has lengthened, its not about black friday or cyber monday, its through the whole quarter up until Christmas Day so its not just cyber monday focus. Increasingly amazon is focused on prime subscriptions creating this flywheel effect where they start their searches on amazon even more than google sometimes. As long as amazon has the prime customer, thats the key for us. Jay, you cover a lot of the stocks that we talk about, nike, under armour, some of the sporting stocks. They have had a tough year so far. A little bit of boost since the election, but is the athleisure trend over or is that a bright spot again this Holiday Season . I dont think the trend is over, i think its slowed. But i do think the big giftgiving idea this year, the big hot category is experiences. People want to be given a gift like concert tickets or a spa day or art classes. Particularly millenials want this type of gift and females so thats kind of the big trend. Athleisure is still good but its really about experiences this Holiday Season. So what does that benefit the most . Who are your holiday picks . We like a stock called hanes brands. Mens underwear, thats a stock thats a little underappreciated by wall street. We think theyll have a solid 4q. We think thats a good pick. Mens underwear in stockings for the holidays i guess . Socks, ill always take socks. Okay, good. Now we know what to get carl. Thats cheap and easy. Aaron, what about you, which are your biggest beneficiaries . Yeah, so we remain positive on large cap internet names. Al sean will benefit. Google is also doing very well. Both have sold off after the election. Facebook has also sold off recently. We think well positioned for 2017 as well. All right, guys, good to talk to you. Thanks for sharing some names. Thank you. Aaron kessler and jay sole. When we come back, repealing or replacing obamacare. Well break down the president elects plans and talk to one of the architects of obamacare as we know it, straight ahead. What i love most about tempurpedic mattresses. Is that they contour to your body. It keeps us comfortable and asleep at night. Shop our biggest event of the year, including all tempurpedic mattresses. Save up to 600, now thru november 29th. Get your tempurpedic. The most highly recommended bed in america. Good morning, everybody. Im sue herera. Here is your cnbc news update at this hour. The driver behind the wheel of a school bus which lost control, flipped over and wrapped around a tree has been charged with vehicular homicide and reckless driving. The accident which happened yesterday afternoon in chattanooga killed five children and injured at least 30 others. Spokes people for donald trump and the New York Times say their meeting is back on. In a tweet just now, the newspaper confirms the president elect will meet with its journalists. Earlier this morning trump had tweeted he cancelled the sitdown after the newspaper attempted to change the conditions, an allegation the times denies. A philadelphia man is in the hospital after opening a package that turned out to be an explosive device. City police say it was meant to injure, it was not an accident. Investigators are now trying to figure out who sent it and why. And its not even thanksgiving, but parts of the northeast are getting buried in nearly two feet of snow. These pictures are from lorraine, new york, and show those blizzardlike conditions. Its only good if youre santa. Okay, thats the news update this hour, carl, ill sending it back down to you. Sue, thank you so much. Lets get a check on crude oil at this our. Our Jackie Deangelis joins us this morning. Hey, jackie. Good morning to you, carl. Were bouncing around between positive and negative today but now back over 48 a barrel. The session high this morning, 49. 20. So make note of that. Getting closer and closer to 50. But as we cross 19,000 with the dow, Energy Stocks have certainly helped us get there. I just want to point out how well weve done in some of these names. As oil has climbed and also as weve seen this trump rally, remember the Energy Investors feel donald trump will be friendly to a lot of these stocks. So big oil doing very well. Companies like exxon, chevron, bp, shell in the last month seeing straight gains across the board. Oil services as well, halliburton, baker hughes, tosoro are names that have done well. These are all names you should continue to watch. Weve pointed out the pipeline names in the past as well. Now, i want to point out as i said its a twopronged rally here because you have the trump piece of it but you also have optimism about the opec meeting next week. Some traders are telling me that could certainly take us up to 50 and even past, but they do believe were in one of these scenarios where this is by the rumor and then sell the fact because they dont believe opec is going to actually give us what we are expecting. Meantime youve got a dollar index, assay sara eisen is so excited about, just around 101. At some point its going to have to take shape in this trade so thats something to be worried about in the coming days as well. Back over to you. Jackie, good stuff. Thanks so much. Meanwhile the dow hits 19,000 for the first time. Joining us is the director of floor operations from ubs, art cashen, has its thanksgiving tie. Its a good seasonal reminder, art. Well, were always trying to stay in tune with the seasons. Thats right. Speaking of seasonality and technicals, do you buy the setup here as being ideal for going into the year end . Well, historically the period from thanksgiving to year end has an upward bias. Oddly the tuesday of thanksgiving week has a mild downward bias, so well see if that comes through. Im wondering if we got to 19,000 and 2200 and going to play a little game of touch and go. I think a lot of it will depend on what crude does. If it pulls appreciably back below 48, youre going to hear from some of the technicians it has by count achieved a reversal to a level that our mutual fund, Dennis Gartman refers to as the box, the retracement level that you come back into. Quite often when stocks rerally into something or commodities rerally into Something Like that, you do get a pullback. So ill be watching crude here, ill look for a little fatigue. It was an exciting run to 19,000 and 2200 and i wouldnt be surprised now that theyre overbought a little pullback. So it was a run on stocks, also on the dollar. The euro just dropped below 106. Usually a strong dollar and higher yields stand in the way of rallies, or at least thats been over the last few years. Why do the equity bulls seem to be ignoring that this time and how much longer can that last . Well, ike they think theyr in speculation with whats going to happen with the new administration. Theyre hoping to see deregulation, tax relief, and maybe some better bilateral trade agreements. But we dont know the timing on that. What we do know is when the dollar strengthens, thats a big headache. Were just coming off of five straight quarters of earnings declines in part thanks to the fact that the dollar hasnt been as strong. No, no, but if youll notice the group that has done the very best in the rally recently has been the russell. And that is comprised of mostly nonmulti National Domestic mediumsized companies. They would benefit from all that and not suffer any difficulty if the dollar keeps moving. So well wait and see. I think i get the sense that the president elect wants to show a lot of accomplishments. I dont think he can get a full package done until probably the summer or even the fall. But i suspect what hell come in and do is undo many of the executive commitments that president obama did. He will either undo them or delay them. He will go back to everything that the Republican Congress had passed and obama vetoed by not signing and get them resigned so that at the end of a couple of weeks and couple of months, see, im an action president , thats what i do. I think the markets are reacting to some of that. Finally on opec, how do we know if this is Charlie Brown and lucy and the football all over again or not . Ive got to believe it is the football. They may even get to the meeting and Say Something kind, but in practice i think youll have a lot of people bootlegging and bringing stuff back out. But for now were probably going to have to wait for the meeting. Everybody is going to talk nice going into it. And theyll try and hold it up. Thats why i say lets see what they do in the pits. If wti begins to break back below 48, maybe hits the 47. 5 level, it might begin to weigh on stocks. Art, good to see you. My pleasure. Art cashin joining us here. As we go to break, take a look at shares of dollar tree. The Company Beats estimates, gives an upbeat earnings forecast. Thats good for almost 10 , up to 90. When we come back, one of the architects of obamacare will join us. Well get his take on the president elects plans for the Health Care Act in a moment. There is a change afoot in the market and it could be very good news for stock pickers. Find out why, what it is and why it matters at tradingnation. Cnbc. Com. More squawk on the street coming up. Welcome back to squawk on the street. Stocks hitting record highs but the s p 500 Health Care Sector bucking the trend, down nearly 1 . Weighing the most are shares of patterson companies, down 19 , and hitting a fresh 52week low. Shares of medtronic also tumbling on weak quarterly revenue for the year. Health care, the sector, is down 4 . Sara, back to you. Underperformer. Seema, thank you. President elect donald trump embracing the rally cry to repeal and replace obamas Signature Health care reform. So what would it like like if he actually did replace obamacare . Our Bertha Coombs has been taking a look at this question. Good morning, bertha. For all of the talk of repealing and replacing obamacare on day one, the new president and republicans will likely tread carefully. In fact the house has asked the court to pause its lawsuit to defund those subsidies. For one road map is paul ryans a better way plan which includes republican proposals endorsed by president elect trump like promoting Health Savings accounts and allowing insurance to be sold across state lines in order to increase competition. The ryan plan and other republican plans would repeal the unpopular individual mandate while keeping the popular prohibition on excluding people with preexisting conditions for those who remain insured. Theyd lift requirements to cover specific things like Birth Control and annual screenings while offering more flexible options, insurers could charge older, sicker patients more. They would get rid of the dreaded cadillac tax on very Expensive Health plans but would introduce a cap on what companies can deduct for their Employee Health care expenses. You needed 87 billion or thats what the cbo projected that you would have from the cadillac tax to pay for many of the provisions in the health care plan. Now with congressman ryans plan, it is essential low a way of reducing the tax level and getting more revenue. What about the subsidies . Well, the plan by representative tom price, who is said to be in the running for hhs secretary, would replace them with flat tax credits ranging from 1300 to 3,000, depending on your age. Sara, a lot of tradeoffs in what could be a whole overhaul of obamacare. Its a lot for the republicans to work out. Bertha, thank you. For more, we are joined by one of the obamacare architects, jay engoff is the former Affordable Care act implementation director. Hes currently based at a d. C. Law firm. Welcome, jay, good to see you. Thank you, sara. Just one minor correction. Im not an obamacare architect, im just one of many people who worked on implementing the law. Okay. Thats fair. But you understand it and you were there and you saw it take shape. So lets just start with a simple question. Is it possible for a Trump Administration to repeal it without replacing it . Well, its not impossible, but its very, very hard. Repeal and replace obamacare was a Great Campaign slogan, but actually repealing and replacing obamacare is much harder. And here is why. There are two fundamental problems that the Trump Administration is going to have. Number one, the Interest Groups, the doctors, the hospitals, and even the insurers, they want obamacare. Obamacare obamacare helps the hospitals get paid, helps the doctors get paid, and even the insurers who would like to make certain changes to obamacare, they still have a law which requires people to buy their product and subsidizes people for buying their product. So none of those three big Interest Groups involved in the Health Care System, insurers, hospitals and doctors, want to get rid of obamacare. A second big problem that the Trump Administration is going to have is this. There are people who under obamacare like their coverage and they want to keep their coverage. Is the Trump Administration going to say if you like your coverage, you can keep your coverage . Thats something that the Obama Administration had some trouble with and i think the Trump Administration is also going to have trouble with that. Well, okay, thats fair. What about this idea, you said the insurers are in favor of it, though over the last year or so weve seen a number of the big insurers pull out because its been unprofitable. Is there a way for the republicans to fix that issue in whatever they replace it with . Sure, theres a way to make the system even better for insurers, absolutely. Insurers can be permitted to sell skimpier coverage, to have more pricing freedom so they can charge people more. Those things would be better for the insurance company. Id argue that theyd be worse for consumers and particularly consumers with health conditions. But sure. Obamacare can be changed to make it more friendly to insurers. Now, a big question is what will happen to all these subsidies that the republicans have called bailouts with some justification under obamacare. The insurers want to keep those subsidies. Will the republicans keep those subsidies . And if they do, will they continue to call them bailouts . Jay, what about this idea that ive heard amongst some insurers that basically a lot of this is just going to move over to medicaid. Is that a an existing program that already works. Is that a reasonable idea . Well, medicaid is an existing program that already works, but, you know, the insurers and so is medicare. But private insurers have started to get into the medicare business. Theyd also like to get into the medicaid business. What theyd really like to do is to take the good risks for themselves and have the Taxpayers Fund the bad risks. Let me say one thing, though, just one ray of hope in the trump for the Trump Administration, i think, is this. One thing that donald trump has been very good at is negotiating, is dealing. And if mr. Trump on behalf of the American People can drive hard bargains with Drug Companies which congress now prohibits medicare from doing, and also negotiate stringently with doctors and with hospitals and with Durable Medical Equipment manufacturers and with insurers, he really might be able to drive the prices down. But what that would mean is that donald trump would have to act on behalf of the government the way that hes acted on behalf of business and thats just very difficult to do in the government. But what about this idea that paul ryan has laid out. Bertha mentioned some of it, that they can give tax breaks for people outside of the employersponsored Health Care System to help them pay and also get rid of the individual mandate to sort of satisfy them politically. Well, there are various ways to provide incentives to people to stay on to continue to have coverage. The individual mandate is one, but there are other ways to do it. I think those are you know, those are reasonable. If you penalize people for dropping coverage, if you make them pay more if they drop coverage and come back into the market. I think that thats those are things that are worth discussing. But its important to recognize that even the most optimistic projections of any republican proposal assume that there are going to be fewer people who are covered by insurance under that plan, under any republican plan, than the current plan. So you get back to the question, can people who like their coverage keep their coverage under the new republican plan. Well, it could be even worse if the story line goes that millions of americans lose their insurance and cant get it back. No question. And especially if these are people who are sick and who could have real, real problems if they lose their coverage. Obviously thats something that i dont think id like to think no one wants to see happen. Absolutely. Well, they voted so many times to repeal it. Well see if they can finally get their wish this time, republicans. Jay, thank you. Be careful what you wish for. Absolutely. All right, lets send it over for john who will give us a look at whats coming up on squawk alley. Weresquawk alley. John . Well dive into the Artificial Intelligence trade, amazon, google, facebook, apple. Who else is poised to be big in that area . Also continuing to track this trump transition, president elect selecting members of his cabinet and finally minted is going to join us. Its time for holiday cards. Theres a technology twist. All that and more coming up on squawk alley. 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 gle350 for 579 a month at your local mercedesbenz dealer. Welcome back. Lets get over to Rick Santelli who has the santelli exchange. I tell you, viewers and listeners, wish you could be with us off camera, this guy is a comedian. Let me look up at the board. 19,000, too high in the dow. Tenyear no yields hovering at the highest closing yields since fourth of july, 2015, right in that area. Why do you think the post election markets have done what theyve done and how much, actually, was afoot before the Election Results came out . So many people were wrong and therefore were wrongfooted. Brexit would be the biggest the day after the election. We put together different scenarios, whether hillary won, which was the high probability and the way congress would break down. We had trump scenarios, too. Everybody had trump so they were wrong. I think part of this reaction is, well, you know, theyre trying to figure it out. But my attitude was if hillary won, i was selling the reality that was going to take place. First of all, because a lot of people would have been selling, going at the end of the year to take the longterm Capital Gains that theyve attained. I think those people are gone from the market. Then all these people who are trying to chase this running to catch up . Absolutely. In term of Interest Rates im a Firm Believer we talked many times. Many santelli exchanges about the rise in rates before the Election Results. No doubt that growth is part of the reason were seeing these yields move higher, along with the fed. You said something i considered heresy regarding the fed. Fed has want ed inflation. This rally is telling them youre going to get inflation. The question nobody asks is why do they want inflation . It will eradicate a lot of heavy debt load i hear people say this is like reagan. Trump is a moderate democrat which might be considered a right conservative by. Probably as liberal as Richard Nixon was when it came to social things. People will find that out. Thats beside the point. There will be inflation. Fed should be relishing this. That will relieve a heavy debt load on the books. Ronald reagan came into office it was 5. 2 trillion, the total debt load, private and public. Were sitting at 62. 5. This rise in rates wont help that situation. If the fed starts aggressive, theyre going to compound the problem. They want inflation. Why . Its an interesting argument. Were out of time but main street would be unhappy that way. Big debt middle class top 1 . Wait, can we talk real quick, who for treasury secretary . Sheila bair. I think you guys could go all hour. Thank you, rick. When we return, Key Developments for food and beverage companies, offering clues about the u. S. Consumer. Thats next. Welcome back to squawk on the street. A deal to buy privately held brands for 1. 7 billion. If you havent heard of it, maker of antioxidant infused beverages, fastgrowing organic beverages. The stock of dr. Pepper is up 1. 50 . In the consumer space, cohormel. They issued a pretty upbeat forecast for 2017 fiscal year and announced the sale of its farmer john unit to cisco foods. Spam is going strong. That does it for squawk on the street. Dow is trading just below that key 19,000 level we hit earlier. Back to you, carl. Thank you so much. At Amazon Headquarters out west its 9 8 00 am out west an its 11 00 am on wall street. Squawk alley is live