Good morning, guys. This postelection rally goes from strength to strength. The dow and s p are in record territory inching higher. Are we setting up for an all in, all go rally like the summer of 2016 . Our guests joining us now. A cnbc exclusive outlook for 17. John, waugh us throulk us throu think 17 is going to look like and specifically if all this enthusiasm about equities is transferring to a macro view. Certainly it does. Always good to start off a morning with a little eric clapton, but the market is a leading indicator. What the market and the yield curve are saying is were walking through a door of opportunity and certainly the equity market makes it easier to finance deals and make a lot more financial activity. I think peoples expectations for tax reform certainly have made an opportunity for greater Economic Growth. As far as our outlook goes, business equipment, Infrastructure Spending is improving in the year ahead and Consumer Spending really solid. So, yes, Financial Markets are a leading Economic Indicator but they also make the financing of Economic Activity that much easier. Ed munld, i wonder what your assessment is of the condition of this rally right now in terms of how investors are positioned, what the sentiment picture looks like. There has not been as far as i can tell a lot of demand for downside protection, hedging after this move. Where do things look to you . I think really if we look at today, what we see to some extent is what i would call a classic short squeeze rally. In many ways investors have been caught out a little bit by the remarkable strength of the rally. Remember, before the u. S. Election, a lot of investors were saying if donald trump was elected the market would be off 10 . We want to protect to the downside. And so really were not positioned for this rally and have been trying to catch up ever since he won the election. Now, going forwards, i think that probably works for the rest of the year because remember, most of the flows, exchangetraded funds, have been into bonds most of this year and out of equities and its only really since the election weve seen somewhat of a turnaround in this story. But theres still more to come. However, going into next year, we might see the end of the phony war, President Trump being inaugurated 25th of january, then well start so tee cie his real color, real policies hes going to unvail. John, along those lines, whats going to matter more in the start of 2017 . Is it the policy agenda that President Trump and the Republican Congress roll out . Is it perhaps the movements over in europe with so many important votes coming up that could send shock waves not only through europe but overseas as well . For us it really is followthrough. Does the Trump Administration follow through in terms of slight easing in regulation . Some element of tax cuts, some element of beginning the process on Infrastructure Spending. For us as the market is moved is the Trump Administration now going to follow on the markets action and actually confirm what the market has already told the economy. John, goldman has a note out sort of on the same note that theyre talking and their point is their preliminary expectation on growth effects from looser fiscal policy will be a q 4 story of 17 and the first half of 18. Do we have to wait that long . Well, i think its going to be definitely the second half of 2017 and really 2018. Remember, we talk about the kennedy tax cuts, but they were actually passed by lyndon johnson. The Ronald Reagan tax cuts were actually phased in. And i think Larry Summers has it right when he writes about the anderson bridge between boston and cambridge. Off lot of permitting, a lot of issues that go into putting in infrastructure. So for us the second half of 2017 is a little better but we really think the opportunity, the big window is 2018. Edmund, you suggested maybe between now and the end of this year this kind of reallocation process could still favor equities. Now, the past two, three years weve kind of entered the new year offsides and had pretty rough januaries. Do you think were in for Something Like that again . I think the risz sk certainly there given the strength of the current rally. The more we go up now, clearly the more Downside Risk were exposed to going into in 2017. Aside from Donald Trumps inauguration on the 20th of january, another key date will be of course the new round of elections in europe. The first key one will be actually in the netherlands, in holland, where in the middle of march youll get elections there, and there is the possibility that the far right pvv party could actually be the Biggest Party there and form part of a coalition government. Soy think that could also introduce more volatility as we see the politics in europe swing a bit more to the extreme right. Edmund, we talked this morning about inflation that is u. S. Based and the positive effects that could have on the european continent, whether its trying to recapitalize banks or help exporters over there get some pricing power. How significant is that . Well, actually, i think its quite significant. If you look at certain countries. For me, the two Key Countries in europe that i would be looking very much to within the equity space are firstly sweden. Why sweden . Because the sweden equity market has been the most correlated to Economic Growth in the u. S. Over the last decade. Really . So, yeah. So if you think the u. S. Economy does well next year, then actually sweden should benefit from it very high exposure to industrials that sell manufacturing goods into the u. S. The second country of course is germany. You know, were thinking about cars, bmws or mercedes, clearly germany and the industrial goods in the automobile space could also be very important area of growth at a time when the euro particularly weak against the dollar. We dont get a lot of swedish i think edmunds got it right. Go ahead, john. I would say, yeah, i agree with germany. Remember, germany, major exporter of machine tools, one of the major export markets in the United States so, i certainly see germany as a benefactor of stronger u. S. Growth. Sorry, carl. Thats okay. No, we like getting a sweden comment onin the a block whenever we can. Edmund and john, good stuff. It will be fascinating to watch the new year. Thanks, guys. When we come back, first it was carrier, then boeing, now the president elect has a new target. Well get some details on that coming up. A rare exclusive with the founder of jd. Com and later why the trump rally may be a stock pickers market. Well talk to tom lee. Eas come into this world ugly and messy. Enemof the way things are. They n yes, ideas are sca, and messy and fragile. But under the proper care, th become something beautil. Im stressedrying to figure out this complex trade ats with the dosized horse . So i brought in my comfort pony. Wellyou could get support from thinkorswims inapphat. So you dont neea comfort pony. So wt about my motivational meeat inapphat on thinkor. More breaking news on the trump cabinet. Lets get to john harwood at trump tower. Good morning, john. Carl, a source familiar with the transition tells me that the president elect donald trump is expected to name Andrew Putzer, chief executive of Cke Restaurants, Parent Company of hardys, as his labor secretary. Its not finally done. We dont have confirmation that the offer has been extended and accepted but we just heard on the transition call with top trump aides that he is expected to announce other cabinet appointments later today and the source familiar says it appears that one of those picks will be Andrew Putzer of Cke Restaurants as labor secretary. Longtime cnbc guest. Talked to him about all things job related and campaign related for the last year as well. John harwood. And a conservative executive who advised mitt romney as well in 2012. Thats right. Thanks. Forget boeing and china. In a new series of overnight tweets the president elect is calling out unions. Phil lebeau is in chicago with the latest on that. Good morning, phil. Good morning, carl. This has to do with the Steelworkers Union that is with the carrier plant in indianapolis, also with the rexnard plant down the road. Set this up. Lets go back about a couple weeks when you had donald trump talking about how many jobs would be saved by carrier stay in indianapolis. Heres what he had to say. United technology ts and carrier stepped it up, and now theyre keeping actually the number is over 1,100 people, which is so great. The head of the Steelworkers Union said not exactly sure 1,100 jobs are being kept or its not being por trade accurately. He said in an interview with the washington post, trump lied his you know what off. He said it was actually closer to 800. Chuck jones is the president of the union and he was a target of trumps tweets last night. He wrote chuck jones has done a terrible job representing workers. No wonder companies flee country. And that wasnt enough. He followed up a short time later by saying if united steelworkers 1999 was a any good they would have kept those jobs in indiana, spend nor time working, less time talking, reduce dues. Heres chuck jones talking with us last hour about what he would like to see donald trump do. Try to do something to stave jobs at the carrier facility or one of our other plants a mile away, rexnard, 350 jobs scheduled to leave this country after the first of year. Id be glad to sit down side by side to do something to keep these jobs in the krcountry. We have talked about the rexnord facility in indianapolis. It is one of the plants owned by a Company Based in milwaukee. We have reached out to these guys several times to see if their plans are changing at all, if they plan to engage with either donald trump or with the united steelworkers any more than they already have. We have not heard back from the company. Back to you. Phil, thank you for that. Phil lebeau. Despite the president elects attacks on the Steelworkers Union and the criticism of Companies Moving jobs in production overseas, u. S. Steel ceo mario longy thinks trumps proposed economic policies are bullish for u. S. Growth. This is what he said yesterday. I think what you will see is an acceleration of the investments that we are going to make. We already started to do some things but when you see in the near future improvement to the tax laws, improvements to regulation, those two things by themselves may be a significant driver to what were going to do. And you add to that, you just heard joan secretaries elect ross and the secretary of the treasury, they are validating that sustainably we can grow at at least 3. 5 . And in that environment were going to be able to do significantly more. On the phone to respond, United Steelworkers International president leo gerard. Thanks for your time. Good to be on with you. It seems like you have a president elect working toward the same mission as unions have been for a long time in this country. Does it make sense to quibble with him publicly about specific numbers . Well, look, that question is the wrong question. You have to realize what goes on when someone loses their job. In fact, when president elect said 1,100 people would have their jobs saved out of the 1,400 in the facility, a lot of people went home that day thinking they had a job and some security, only to find out when chuck jones, the president , went to investigate more, it was actually 730 jobs that were going to be saved. It was incumbent upon chuck to clear the record because these families went from being obviously very excited and enthusiastic to being slammed back down to the ground and wanted some real answers. In that regard, i consider what chuck did as qualified and experienced local union leader is the right thing. When the president says that they should have done their job, the reality is carrier said it to peoples face. They called them into a warehouse and said to their face, were moving these jobs to mexico nothing personal, you make a high quality, good product, but we can go to mexico for a total of six bucks an hour. The local union went to the Carrier Company and said what could we do that would make you stay . And they said work for 5 an hour. Now, thats how ridiculous that is. Were thankful and ive said it. I said it publicly in a letter to the president. Were pleased that the president intervened and through whatever means saved some of the jobs. What are you hearing at this point from the workers . Im also a bit disappointed that the person whos going to have the most important job on the planet would choose to criticize a local union leader who was only doing his job of clarifying the message to his members. Sorry. Go ahead. That certainly is an approach we havent seen from president s and president elects in the past. What if anything at this stage are you hearing from the workers on the ground in terms of their feelings whether theyve changed toward the president elect, toward this effort that he made with carrier, and how it has played out on twitter and beyond since . I think apparently on twitter im like chuck jones. Ive got a flip phone, so i dont get the trail of that stuff, but what i understand is that theres literally tens of thousands of tweeters and facebook stuff theyre saying theyre with chuck and being very positive and constructive because they know chuck was just doing his job. Let me come back to something that the president said that i want to work with him and support. He said he wanted to get rid of the trade deals. Our union has been fighting these rotten trade deals for more than 35 years. Were willing to work with the president to replace and repair trade deals with nafta, cafta, bntr, korea. We want to work for with him. He says he wants to repair and replace or replace and repair those trade deals. We want to work with him. Any company, and this is important to rexnord, boeing, and others, any companies that wants to take jobs out of america to another country to export the low exploit the lowwage environment is going to export those jobs back to america, he wants to slap a 35 duty on them. I think that thats something that he ought to do. Were prepared to work with him on that. But one other point that your squawk box host might relate to. One of the reasons so many publicly traded Companies Like to go offshore is it drives up the price of their stock, and when their stock is going up, the ceos get to have a bigger bonus. And youll find way too often and theres records now that somewhere about 80 of all profits in the last five years have been in stock buybacks. I think we have to go back to the issue that will certainly cut back on rotten trade deals and arrangements. We have to go back to the laws prior to to 1982 and make the purchase of stock buybacks illegal again. That money should be used to put back into the plants and research and Development Expenses and in so you mean putting strict limits on buybacks as opposed to thats right. Is that something you expect the steelworkers to pursue seriously from a policy standpoint . Its one of the things we think should be considered can. That money going back into stock buybacks would be better used in Capital Formation and modernizing plants and putting money into infrastructure and doing those things. I put that as one of the points that should be part of the discussion. If that ever came to pass that would have impacts on stockholders and employees at manufacturing plants. We hope the fact of the matter is that was the law prior to 1982 and it worked quite fine. And im not sure that it would be bad for the economy. The fact of the matter is a lot of that money would go back into plant and equipment and modernization and development instead of just finding a way to juice the stock price for a bonus. It certainly is last time it happened a big part of that money did, in fact, go to buybacks. Your point is well taken. Mr. Gerard, we hope youll come back. Thanks so much. Good to be with you. And when we come back, a rare exclusive with the founder of chinese ecommerce giant jd. Com. His thoughts on donald trump and a possible trade war with china next. And later in the march to dow 20,000. Why stock picking might be the best strategy after all. Tom lee breaks it down. Wildcaught alaskan salmon. From icy ocean waters. To your kitchen counter. Pure. Pristine. Each one its own delicious artic prize. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbystepreciepes. Delivered to your door, for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. Ngine revving] 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. President elect donald trump has made his thoughts on chinas trade policies very clear, but its not just the Chinese Government taking notice. Retailers are too. We sat down with the founder of one of the Biggest Online retailers in china and joins us now. Deird deirdra . Thats right, jon. Much of jd. Coms success relies on billions of dollars of imported goods up to luxury items. A trade war could complicate that business model. But in an interview, the founder and ceo richard leo told us he isnt worried. I dont think mr. Trump would be a big issue for jd. Com because we mainly focus on bringing American Goods into china, and i believe through cooperation both sides can benefit. While liu shrugged off potential trade changes he did say china is w