Welcome to squawk alley for a tuesday morning. With john forte and Kayla Tausche this morning, dow, s p and nasdaq all trading in record territory, dow inching closer to 20,000. Starting to ask questions about whether it will bring about some selling. Looking for about a twoweek pull back in the wake of a fed meeting. Well see. The rest of the week will be interesting. For sure. Best s p factor today, dragging behind the rest of the postelection rally. Interesting to see it join the bunch today. Nasdaq hitting a new record early this morning. Nfib Small Business confidence soaring after the election, which a lot of investors are parsing through today. Bill gates seems to think that stocks are a little expensive. He knows a thing or two about finance. Going to get more from him in this show. He spoke to our becky quick earlier this morning. Nike, of course, the dows biggest laggard of the year is today the Top Performing dow component. Well see how long that dynamic lasts. Meanwhile, new cabinet appointment for team trump, giving the nod to exxonmobils Rex Tillerson for secretary of state. John harwood is downtown with details. Reporter you mentioned bill gates. He not only sat down with becky quick but will be sitting down with president elect donald trump later this afternoon in advance of the summit, a group of executives who did not support donald trump by and large during the campaign. That will be something to watch tomorrow. As of today, continued motion toward filling out that cabinet for donald trump. We havent gotten an official announcement on rick perry, former governor of texas, as the secretary of energy, department that he proposed abolishing in his own president ial campaign. We expect that very soon. We have gotten official word on Rex Tillerson, chief executive of exxonmobil, one of the most powerful corporations in the world, donald trump hailing him as world class deal maker, with global experience. This will be a tough confirmation fight. Significant number of republicans have expressed some concerns about his ties to russia along with Donald Trumps ties to russia and policy statements. But we do have a statement that was just put out a few minutes ago from Mitch Mcconnell, saying he thought Rex Tillerson would put the nations interests first and looks forward to supporting him. Statements of support from former Vice President cheney, former secretary of state condi rice former george w. Bush National Security adviser steve hadley. Well see how those two sides line up. When you step back for a minute and look at the overall cabinet thats filling out, you can see two distinct things. Donald trump likes generals, general mattis and he likes corporate executive. No surprise there. Rex tillerson, andy puzder. Gary cohn will be head of his National Economic council. The question is how do trump voters react to those kinds of choices . In the end, guys, theyll be judged by the results they deliver and well be watching. Certainly generals and Business Leaders reflect both trumps youth and working experience as an adult. John, thanks a lot. With key cabinet posts filling, the focus now shifts to the economic and policy agenda. President elect set to meet with tim cook, sheryl sandberg, jeff bezos and others. Bill gates joining squawk this morning. Listen to what he told our becky quick about expectations from the trump team. I think theres a lot of fascination to see what the new directions will be. Donald trump was elected not so much for specific policies, but because the kind of leadership those voters wanted. So, he has a lot of flexibility on which issues he really goes after. And so thats why i think a dialogue now, you know, what are the positive things for america that hes thinking and who can help out with that . For more on the trump economic and business agenda, were joined from washington by the president and former bane capital Founding Partner and author of the New York Times best seller the upside of inequality. Good to talk to you both. We talked several times about whether or not a 4 number on our economy is doable. Do these appointments feed your faith that it is . I do believe theres a way you can do it. Im not sure these im satisfied with these appointments in the sense that theyre very pragmatic and not driven by wishful thinking. Highskill workers, 100 million fulltime workers, the top 5 , 5 million, issuing green cards a year. In a very short time a year, you could double the number of ultra highskill workers. On the issue of lowskilled imgray i hate seeing them throw out the baby with the bath water instead of shifting toward highskilled immigration, which is growing the economy today. Tax reform is a priority for the administration, piecemeal or comprehensive. We heard from trumps advisers that maybe a longer term refinancing of the u. S. Debt would be attractive. You know more about the debt than almost anybody. Does that work . For starters i certainly share the objective that we would like to see the economy grow as much as possible. I also want to caution without changes to the labor market, because so many people are moving toward retirement, that becomes more challenging. Think about things like highskilled immigration. Does have a real upside. But i still want us to be reasonable about our growth assumptions and tax reform, one of the critical ways to get there, if we reform our tax code that leaves us not competitive in so many ways. However if we go forth and do it in the ways that some of the Campaign Proposals would have done, which is to add 5 trillion or more to the national debt, already at nearrecord levels, that would be problematic. Do i think refinancing the debt is a good idea . If it were, treasury probably would have already been doing it. Rates will be coming up again soon. I bet thats not as big a topic. We should be focusing on fiscal controls and growing the economy. What is your reasonable growth assumption for the next few years . Right. Projections are that the economy is going to be growing around 2 . Obviously we want it to be higher than that. We are con strained by the real demographic shifts happening in this krichlt just to get to 3. 5 growth would take productivity gains that are unprecedented. We want to look at tax reform, regulatory reform, more public investments instead of consumption. We want to look at getting our debt under control. We want to shoot for increasing growth by half a percentage point is probably more likely than a full percentage point. Right. If theres more on the outside, thats great but lets not count on t we have to be cautious on what we build into our estimates and reasonable. And highskilled immigration, i know thats something thats going to be top of mind for the tech executives meeting with president elect tomorrow. Though they probably wont get that deep into it. How do you, if youre in Donald Trumps position, actually deliver on increasing highskilled immigration when you were railing against h1b policy . Do you have to fold in around Something Like manufacturing where the rust belts mind is these days . You can satisfy the rust belt by reducing lowskilled immigration. Workers feel that lowskilled immigration puts pressure on their wages. We are issuing about a million green cards a year in president obamas administration. We issued about 10 million green cards to lowskilled workers. If we were simply shifting that to ultra highskilled workers, 5 is 350 million. Half of them, we dont know who they are. Half of that is too young, too old. Half of those will never move. You get down to a pool of about 50 million people. If we could go out and get 5 million of those 50 million, it could have a big impact on growth. Cutting marginal tax rates will affect growth slowly over time through increased risk taking. Thats a long, slow, gradual road. I think this is our only real opportunity. I think it would be a shame that if in our fight we took our eye off the ball. Squandered opportunity. Maya, the market, obviously, stocks want to focus on deregulation, tax reform and repar repatriation. Do you see those as potential headwinds that could offset what is going right or what we think will go right . Sure. So much uncertainty right now both economically and politically. Markets are optimistic, as youre watching the market approach 20,000. Im watching the debt approaching 20 trillion. Theres lots of things that are out there, making us all nervous. But theres more uncertainty, really, in terms of what policies are going to be pursued and how they are going to interact with the overall growth strategy. We felt in the long time. Many of president elect trumps policies, and many like tariffs, could be antigrowth. We dont know which priorities will win out. Im looking for a comprehensive growth strategy. Something thats not like a sugar high with lots of shortterm stimulus, which i dont think were at the right moment in the Business Cycle to be focusing on but a longerterm plan that looks to these structure changes, taxes, regulation, how we spend our money and how we boro, how we could borrow less. Those have sustainability. Thats a good reminder. Pay attention to dow 20k, we should probably watch the debt at 20t as well. Thank you very much. Thank you. The dow inching closer to 20,000. Hey, bob. Weve fallen back a little bit, carl, at 19,9. Marching toward 20,000. The kiwi keep marching toward is rotation. See this in the dow today, stocks that are pushing the dow up. Remember, apple was a laggard in november. Many of the big tech names didnt contribute to the rally. Nike and consumer staples, discretionary stocks were not contributing nearly as much. Were seeing these kind of sectors come forward today. If you look at the sectors themselves that were leadership groups, its the same story. We didnt have Consumer Discretionary as strong in november. We didnt have utilities at all moving. Utilities went in the other direction. They were negative. Consumer staples generally were down in november. Every day you get these consumer staple names. Leadership this month, again, telecom, real estate, consumer staples. Thats the rotation were talking about. Thank you very much, bob. When we come back, red flags for rex. Why trumps pick for secretary of state is expected to face some resistance on capitol hill. Just in time for the holidays, Stocking Stuffer consumers have been waiting for. The dow gets closer to 20k, the day before the fed is expected to pull the trigger on another hike. What bill gates has to say about equity markets when squawk comes back. Want in industrial strengthgs t like cologne. Morning but theres one thing you do. gags its called predix from ge. The cloudbased Development Platform thats industrialstrength strength the wait is ending for some apple users around the world, leasing their air pods. Josh lipton has the details. With air pods you remember apple saying it is reinventing the wireless ear phone. Air pods are an important accessory for that new iphone 7, which does not have a traditional headphone jack. Reviews were strong with the tech press saying these are the simplest bluetooth headphones out there. Thats why they were surprise and some disappointment when apple delayed the original october launch for these ear buds, unusual misstep for tim cooks company, which never did explain the reasons for that delay exactly. September the air pods were introduced. Apples Phil Schiller did talk about the hardware. It is a break through design. Air pods deliver truly an apple magical experience. When you try it, youre just going to be blown away. So how do they work . Open up the charging case on your iphone with a tap. Air pods are immediately set up. They deliver up to five hours of listening time on one charge. Apple said it needed more time to get that product ready for consumers. They are going to be available to order now. Theyre going to cost you 159. Apple is not saying how many units are going to be available on the companys website right now it says air pods will ship in four weeks. Back to you. It doesnt sound like the problem is completely solved because apple talks about these shipping in limited quantities. Also were still waiting on the beats x ear buds that are supposed to work with their w1 chip as well, make it pair more easily through bluetooth. The beats solos and power beats 3s are already out. Some have problems, some dont . Yeah. Its not clear, john. Remember, air pods, as you know, we are not clear as to what exactly caused that initial delay. There was a lot of speculation about different reasons. Apple in a statement to cnbc at the time only said the product wasnt where it need to be for consumers. They are available now. To your point exactly how many are available, we dont know. Apple is only saying limited quantities. I read about some estimates that are out there. I know financial analysts are trying to gauge it. I read some estimates being 15 Million Units at launch at least initially. Still some questions about how much are going to be out there. Ships in four weeks so no air pods for you under that christmas tree. Already having missed black friday and cyber monday. Josh, im wondering if there has been any conclusion from the Analyst Community about whether this has impacted iphone 7 sales or not. Yeah, that was a big question, kayla. Obviously, that this device is so key and critical to the iphone 7 after you did remove that headphone jack. I know that was a question investors had. Was that going to impact somehow sales of the new phones . I, at least, havent seen any research indicating thats the case. Stock had a rough few days following the election bounced right off the 2 hyundaun 200 da they are expected to show up in stores next week. You cant order them online but those who want to go into the stores may be able to snag them. Bated breath. Up next ambassador Nicholas Burns will give his thoughts on president elect trumps pick for secretary of state and more. Dow earlier crossing 19,900 for the first time in history, inching closer to that 20,000 mark. The trump rally still in full swing. More squawk alley coming up next. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley dow up 81 off the highs, but still on track for its best quarter since and best quarter ever. Were back after a short break. There are many things you dont want in industrial strength smash like an administrative assistant. Your 3 oclock is here. But theres one thing you do. Its called predix from ge. The cloudbased Development Platform thats industrialstrength strength hello, everybody. I am sue herera. Syrian Television Broadcasting footage, which showed the vast destruction of aleppo as Government Forces are expected to take the last rebel holdout. It would be president assads biggest victory in the civil war. Bill cosby back in the courtroom for his Sexual Assault case. He smiled, nodded, wave aid little bit as he arrived at the courthouse. His attorneys are trying to limit the number of other accusers that can testify at his trial. Cuisnart is recalling food processors, blades can crack over time, causing small metal pieces to break off into food. There have been 69 reports of those types of incidents. 30 mouth lacerations or tooth injuries are included in those. According to bankrate. Com, iowa is the best state for drivers while california is the worst. Its study evaluated all the states based on commuting time, insurance premiums, gas costs, car repairs, car thefts and auto fatalities. Thats the news update this hour. Back downtown to squawk alley. Carl, having spent a lot of time in l. A. Traffic, i would agree with that survey. Take the surface streets, sue. Thats it. Thanks a lot, sue herera. Well get the european close in a few minutes. Seema mody is here. Seema . 11month highs really led by italy. It is the bestperforming europe crayon stock market. Shares up almost 12 . Reassuring news from its new Prime Minister today saying his government would be ready to take action to support the troubled italian banking sector. Speaking of the italian banks, unicredit surprises with a drastic overhaul, largest bank of italy announcing raising 13 billion euros to shore up its Balance Sheet and unload 18 billion euros of bad loans. The share issue was planned for the launch in the First Quarter of 2017. Shares are up 30 so far this month but still have lost half of its value year to date. Now a different story for the miners, which are falling. Production data out of china. Anglo american, down 2. 6 , reporting a slow down in diamond sales at debeers. Its blaming indias cash crackdown, a move unveiled by the Prime Minister is now hurting Global Companies like debeers, the largest producer of diamonds by value. Guys, back to you. Seema thank you very much for that. Seema mody. Well take a short break here. When we come back well talk to ambassador Nicholas Burns about tillerson going to state. Trumps Foreign Policy outlook. Meanwhile, were watching the dow. There are many things you dont want in industrial strength like coffee. But theres one thing you do. You guys okay . its called predix from ge. The cloudbased Development Platform thats industrialstrength strength straight ahead on the half time report, investor John Fichthorn will join us. And why one Analyst Thinks the rally has a lot more room to run. Well see you at the top of the hour, in about 30