Were back at post nine to start the new year. Between the markets and donald trump, a busy morning ahead. Dow 20,000 is back within striking distance after a rough end to 2016. Oil and the dollar also moving higher after bullish factory data. Joining me now is a market strategist, and brian jacobson. The chief portfolio strategist. Good morning, guys. Brian, i want to start with you. Youre looking at emerging markets as a potential bright spot going into the year. You think the president elects tough trade talk is likely mostly just talk. Anywhere in particular in emerging markets that is a particularly strong bet, and where do you see the potential for downside . Something that might happen that might change your view there . Sure, lets start with the downside that is president elect trump making good on some of his campaign pledges to get tough on mexico and china, perhaps running the risk to get us into a trade war. Yeah, i just put that as a very low probability event that that could happen. Any policies would have to make their way through congress, and i dont think he has enough support to really get tough on trade. Maybe clean up some of the trade arrangements, things like that that could be beneficial. I just think he will not be as tough on trade. Where are some of the bright spots . I think there are two specific areas. One is in the emerging area economies. They have favorable demographics, countries like india that i this will rebound from some of the areas, and then we have to go over to the other side of the global and go to emerging europe. I think that is a high beta plaf on faster growth coming out of europe. Lending data coming out of the bank, you see surprising upsides for places in europe. And you say that Government Policies will have a big impact here, you know, certain investments likely to be a beneficiary of expansionist policy, but at the same time youre hedging thinking the whole model falls apart if the government doesnt act fast enough. What is the time table youre looking at for the strategy to playout . At least in the u. S. Right now the markets are going on on what is fairly robust economic global basis. I think the hope alone can carry the markets through the middle of the year. As we approach the end of the year, you need a fair bit of evidence and the risks rise significantly. Were going to be facing a combination of rising rates and wages and stagnating profits. Outside of the u. S. , particularly in the developed markets, i think opportunities are better given their earlier in the Business Cycle and have more run room for the improvement. All right, i believe we have some breaking news out of detroit on ford, lets get over to phil. They are cancelling plans for a new 1. 6 billion plant that was to be fwhilt mexico. Remember that was the small vehicle plant that it planned to build all along and to move production from michigan down there. Ford says theyre cancelling their plans. The focus, they will be expanding at an existing plant in mexico. Theyre also investing 700 million in their current plant in flat rock, michigan, expanding that plant. As part of the expansion, theyre adding 700 direct new jobs creating a factory capable of producing a hightech electrified autonomous vehicles. It includes a hybrid f150, and a hybrid mustang. Ford, for months, back to when donald trump started campaigning for pttoday, ford is saying the are cancelling plans to build that 1. 6 billion plant in mexico. You can bet president elect trump will be claiming a victory here in getting ford to cancel production, or building of that plant. Guys, back to you. Ford obviously already has infrastructure in this country. Will people look at the headline numbers and say they were going to spend 1. 6 billion on the mexico plant, but theyre only plugging 700 million of that back into the u. S. , what do you make of that. There are two kinds of people that will look at that, some will cheer him stopping the building of another plant in mexico. Investors will say that makes sense financially because you were exporting to the u. S. And around the world from that small vehicle plant in mexico. Now that its not being build, you will do the production at a different plant in mexico, but youre not going to be as productive as you would have been. The stock is not doing a whole lot since the announcement came out. Thats the two reactions that youre going to hear there. You will definitely have people in the u. S. That say fantastic, theyre not building that plan doubt there. Were building more in the mexico plant. There is the trade story, the hybrid, electrifying vehicles. Yes, mark fields is not slowing down on the plan to move forward toward elect trin and autonomous drive vehicles. This ends, potentially, this whole mexico plant thing ends a long drawn out battle that hi has been leading between ford and the trump administration. Were going to talk with mark fields first on cnbc on the Halftime Report at noon. From the plant in michigan, well get his thoughts on finally deciding to throw in the towel. We will not mess with mexico and build a new plant any more, whether or not this finally gets ford gets him completely off of Donald Trumps radar. Thank you very much, dont go too far. Lets bring in an analyst on the phone with us. How does this, how do you plug this new development into your model, if at all. There is aulsz a cost related when you manufacture it, it is small in the scheme of things, it is not something that we necessarily plug in as a game changer, but we review and analyze it. The headline is that president elect trump will be a factor in yrgs vehicles will be produced. Do we want to investigate domestically or internationally. The line that investors and workers have been sold over the years is that to be competitive, we have to move production of these vehicles to countries where labor costs less. If this doesnt effect your model at all, what are we to make of that whole explanation from Big Companies about why they move manufacturing outside of the country. Could it be the start of a new wave, or is there an expectation of tax breaks or Something Else to counter balance the lack of cost savings here . It doesnt not effect it at all, but it may have to be factored in differently. If youre being penalized by the president , if you can do that, for moving plants over, you may save on the cost of production and labor, you will pay out on the tax thing that changing the equation. That has to be factored in. There is a risk when the president intervenes in this manner that there is a dos it. Quick question, you talk about kcompetitiveness. We saw fiat crystler say theyre throwing in the towel for production in the u. S. Is it only a matter of time before they follow their route and say were not going to build them, were not going to make money on them, were not going to build them. They have to factor in the long run. Right now everything is great with the trucks and theyre making a ton of money with the high Profit Margins of the vehicles, but we have seen the cyclicals shift back and forth. I dont see it shifting to be dominant or resir resurgent. Do you expect consumers to see higher price tags on those vehicles when they try to buy them here . If the costs are higher, then there will be pressure on the margins for the manufacturers. There has to be a change, one way or the other, someone pays that price. Either way, 2016 was so strong for auto sales and were going to get more figures for this week. Are we in a pattern now where north american sounds flatten out, and in will be the year we have to start watching for greater incentives. Were expecting that when we fish 2016 numbers, probably a slight increase, but next year i expect the market volume to go down by 1. 5 to 2 . So you have to take it from incentives. Phil, im wondering how this will play out through detroit and the car industry in general. Is it signaling something about what will be politically possible or not possible in a trump administration. Maybe your question on if small cars are viable Going Forward leading to this. I think there is a lot of concern in the auto industry, look at the part suppliers, so many of them have plants in mexico. At the end of the day, if there is a tax put in so vehicles build in mexico, sold in the united states, throw out an extra 3,000, someone will pay for that. Fewer vehicles will be sold, consumers will say instead of paying 19,000 for the base model of the chevy cruz i have to pay 22,000 . No, im not going to do that. For so many years we were building and planning for mexico because we could sit there and say this is what we will be able to sell based on the demand and the fact that there was nafta in plasz. You put that border tax in, and you will hear experts expect fewer sales, and that also ultimately brings up the question how do you altar your Global Production plans. Watch the parts makers and the rails today. Kansas city southern, phil, in a hurry. Down 3 on an intraday low here. Thank you so much. Dont miss mark fields coming up at 12noon eastern time. Dish network unveiling a new device to take on apple, roku, and amazon. And why bob igar and others are celebrating, more squawk l alla alley back in a moment. Alicri ye were opening more Xfinity Stores closer to you. Visit us today and learn how to get the most out of all your services, like xfinity x1. Well put the power in your hands, so you can see how x1 is changing the way you experience tv with features like voice remote, making it easier and more fun than ever. Theres more in store than you imagine. Visit an xfinity store today and see for yourself. Xfinity, the future of awesome. It is the first trading day of 2017. Julia borstein has more on what to expect from the media sector. With the rise of cord cutting, streaming video, and entertainment alternatives, throwing the Media Industry into upheavel expect major shakeups. First, media mergers. Now that viacom and cbs are no longer looking to merge, they could be involved in mergers. Were seeing more vertical integration. To disting witch themselves from rivals. China will double down on hollywood. From alibaba to wanda, to ten cent will pay out for a piece of studios and looking to capitalize on American Intellectual property. First, cracks in the tv bundle, lower cost digital alternatives will go down. Expect goog toll jump into tv and well see if apple can finally ink their content deals. A perfect example of the third one, dish unleashing air tv. It has local tv through an antenna, also netflix. Disney is starting off the year on top. It was up graded to buy from hold, sending disney shares up about 2 . Now this also coming on the heels of rogue one continuing to be number one in the box office. It is the second biggest film of 2016 and gives disney six of the top ten movies of last year. Julia, it is quite a showing for disney, but the stock price direction has not always correlated with how well the films have done. There was a sell the news effect on the last starwars movie. I wonder what analysts think is likely to happen as go into a blockbuster year. I think what is interesting, john, is that disney is a company able to use the studio to drive success on other platforms. They can use success to drive more people to the theme parks. They have a star wars themed land in the california and florida parks. I think one reason we have seen the stock move up since the last Earnings Report is that during that last earnings call, bob is very clear they have issues with espn but they believe they will overcome them. They are seeing growth ahead. Theyre talking about how theyre going through a transition year and this year bhiegt a transition year because there is intellectual property. Well see how they mine it, and on which platforms. I think that is where a lot of optimism about disney is coming from. The target 120 does not dismiss a spin of espn outright. Yeah, there is a lot of speck la speculation about what could happen. Part of the investment is it gave them the opportunity to buy the whole streaming tech company outright. They can own this Technology Company that is really key for putting espn into consumers homes, into consumers hands an in overthe top ways. Should disney decide to take espn over the top direct to consumers, it will be key to that, and if they decide to spin espn off, well see where that technology plays into that. But i think that it will be really interesting to see how espn plays into the future of disney whether it is part of it or a separate entity. Thank you, julia. Still to come, the brain drain at twitter continues. And counting down to the close across the pond in europe. More squawk alley in just a moment. M therwhatsto m were counting down to just a few minutes left before the close of the u. K. Two Straight Days of gains for major markets there that were open on monday unlike hours, london kicking off their market today with the ftse hitting a high. We also have data showing u. K. Manufacturering expanding in december at the fastest pace in 2 1 2 years. This coming after the release of a upbeat euro report. Also chinese factory activity gives a list to some of the miners today. Glenncore up 2 1 2 . Take a look where the stox 600 bank index is trading, usually up close to 3 , carl. Possible red flags over the pick for the next trade chief. And deutsches global head of Equity Capital markets is up with more details. E,e,ecog hi, everybody, im sue herara. South koreas president is refusing to testify in a case that will decide her future if forces the Constitutional Court to delay the start of oral arguments. The court asked her to testify on thursday even though it cannot force her to appear. Five suicide bombers attacked two police stations north of baghdad on monday night. Two Police Officers and the five attackers died. A fiery crash on the 110 freeway caught on camera there. An suv was stalled in a northbound lane early sunday morning when a passing vehicle flamed into it. The photographer was able to pull the unconcious driver to safety. The cardinals say they were not consulted. There is more to that story, well keep you posted, thats the news update this hour. The trade Representatives Office but questions remain about what policies and positions he has backed in the past. If you look at his bio you will see traditional republican positions there. He was the national treasurerer in dole in 1996, he is now a partner at skadden, arps, and now he is chairman of opec in washington. If you look at his oped. He is not necessarily or not at all a traditional republican free trader. Take a look at two opeds, one in 2008, he said under a headline grand old protectionists, he said free trade has long been popular with liberals and it remains to with liberal elites today from Alexander Hamilton to Ronald Reagan understood that was just a tool for building a strong prosperous middle class. And then go back a decade ear earlier to 1999, he cited a strikingly similar theme here understood the headline conceding free trade flaws. He said if it is to intend its purpose, we have to make sure it does not result in a race to the bottom or lead to global government or threaten our sovereignty. There has been question of whether or not he would be in charge of trade policy, or if it would will wilbur ross, but im to the that donald trump will be in charge of trade. So they will be implementing trumps vision here. Were seeing that here this morning. Trade a major story of the day, thank you for that. Speaking of trade, ford announcing today they are cancelling a 1. 6 billion mexico plant and will invest 700 million into a facility in michigan. Part of an announcement where they spoke about new electricfied gelectricfi electricfied vehicles coming. It has been a rough year for the ipo market. Global volume down 31 . Many hoping for a rebound this year. Companies like spotify and snap expected to hit the public markets. Hear is Idina Friedman sharing her opinion. Everyone said it was a different environment, and it was, but the companies that went public on nasdaq had 24 increase on their market valuation in general. That is generally a prediction. In the u. S. It was 20 . If companies do well, that is usually a prediction of a healthy ipo environment for the next year. We have seen Companies Really pick up the pace and we expect the first quart tore be a strange quarter assuming the backdrop stays this inviting. Mark, you have been joining us here for the last couple years and telling us dont hold your breath, this will not be the holdout year. I wont take credit for that, but i will say that it really is something that regardless of the new administration coming in, we expect to have a great deal of activity, across the board. I shared with you some data that suggests there will be a thousand ipos in the next few years. You have been on the bandwagon today of optimism and were on that bandwagon also. Strength from the u. S. , or coming from the global economy. It is the global economy, but i think it will be the largest benefactor of that. We think that two thirds of that activity will be here in the u. S. Thats by deals by volume the asian market needs a lot of capital, and no doubt that volume will be very large in asia as in europe, but by deal flow, the u. S. Will be very busy and youre all going to be extremely busy. Even though there has not been as many ipos, the market was on a tear, the dow closing up 13. 5 . How does that valuation complicate your job when youre advising companies where to price their ipos. You want people buying the stock, but you want the investors to make money, too. There is a very positive momentum coming into 2016. The class of 2017, there was stock thats didnt do so well, but on balance, a great year. The volumes were down considerably. The Second Lowest we ever had in volumes. That sets us up nicely for the class of 2017 and 2018, a class that is very mature in their businesses. They have been private a long time, not taking Business Plans a long time, but taking Companies Public that have real tr tax records, so having the sustainability of the ipo market, it will be a time we look back and say wow, what great period of time. They have been private for awhile, but why the surge in the next couple years . Are they cash burn an issue for them . Somethin