Kayla is live at the 2017 ideas festival in san francisco, and joining us also at one market, brett taylor, a cocreator of google maps, and from palo alto, good morning to everyone. Jeff sessions in the hot seat on capitol hill facing the Senate Judiciary committee on day one. John harwood is in washington watching that. Were now past the Opening Statements and into the questioning of Jeff Sessions under a question from dianne feinstein, the veteran democratic from california. Jeff sessions just said that legalizing abortion four years ago was wrong. He says he respects the law of the land and that is the law of the land. The most prominent charge is the one that sunk his nomination in 1986 to be a federal judge under ronald reagan, and that is that he harbored racial animous. I was accused in 1996 of failing to protect the Voting Rights of africanamericans. And of condemning civil rights advocates and organizations and even harboring, amazingly, sympathies for the k. K. K. , these are false charges. That is how Jeff Sessions will address that issue. There is more questioning from other democrats. My assessment is that it is quite likely he will be confirmed as the attorney general, but this process is just getting under way, guys. We look forward to more q and a tomorrow. Brett and josh, civil rights for the moment, but this will turn to Cyber Security in the twoday confirmation hearing. What are you expecting on that front . What questions or answers will you be listening for . We want to understand what sessions policies will be around Cyber Security. Monitoring, what they require of companies built in the United States and foreign companies. We worry it changing from the policies under the obama administrati administration. Encryption has been a problem, how is his his Justice Department going to respect that. Were still in a wait and see attitude. Were optimistic that the administration will have the interest of the customers in mind as well. I think all of the customers today care about the integrity of their data, the privacy of their data, and being able to abide by all of the regulatory constraints around the world. Were waiting to see and im optimistic of the Incoming Administration will have the interest of the American Companies in mind. Certainly a lot to unpack in the next couple days. They will get to all of that in due course. Meanwhile, in corporate nice, the end is near for yahoo, at least in name. They will change their name to altaba. Yahoo will also scale down the board, marisa meyer stepping down. I know youre watching that and the jokes about the name aside, a lot of questions, john, you have been watching this as well. Meyers future might still be within verizon. Right, first we have to clear up the after math of what it has been. What might it get done, and marisa meyer, a mover and shaker, even though she wasnt able to turn around yahoo is a stain on that resume. Well see if she joins the board of a major retailer or something similar. With yahoo, she did a lot of interests work. I expect her to take a little time off to reflect on the journey, but she is one of the best product thinkers of our time. Legacy, brett, when we think about her tenure and what they have for the company now versus in 2008. Hindsight is 20 20. I think the most the craziest thing for me, when i started my career out of stap ford, two of the Fastest Growing companies were sun and yahoo. And it really shows the vulnerability of Technology Companies with significant shifts and the platforms we use. I think every Single Company in our nation is really under going these transformations with internet of things and mobile. And it is really, really changing. I worked for marissa for about five years. I think yahoo was maybe unfixable when she arrived, and maybe it should have been sold sooner, but i think there was no point in reflecting on what could have been, and i think while symbolic, the name change is sad. They are one of the first generations of Internet Companies and im sad to see it go. It doesnt make sense to obsess of a trend you just missed because the thesis was that koogle was the big competitor. Now micro soft is competing with amazon. He ran the Cloud Business and the stock is up on that. If they got yahoo and competed with google, they might have missed what they have now, right . I think that is entirely right. There has been leap frogs from search to mobile to social, and now were looking at the next waves. The frame of augmented reality, how the frames and glasses change how we see the world. How they power that, virtual reality, all of the things on the internet of things. What happens when all of our devices are emitting data and are connected. The companies that go in will not win in social, theyll when on new trends and provide the products that we start to use every day. Big companies are all fighting to use that as well, but i think there is still room for Legacy Companies and new ones to define the generation. Jp morgan making it a top pick for 2017, they point to strong engagement. They say the fears about fake news and metrics essentially being overdone. Can you take off your former facebook hat and should that be worrying . We were just talking about Companies Failing to make transitions. I think their strongest attribute is how capable they are of change. It went from a social network in colleges to one that operates globally. And now theyre investing heavily in ai, internet access, and other very significant initiatives. I think they continue to demonstrate a strong management team, and theyre capable of seeing and responding, im biassed, but i think it is a really strong company. How closely is the rest of the video and content eco system going to be watching with the mid role advertising. Then having the ability to toss and add in there. It is different from what we see on you tube, but it could change a lot of things. The sheer massive number of users on facebook, but it has not been a place for video owners to advertise at all. They prefer you tube where they can make a bunch of revenue. I think we will see them shift more of their efforts to facebook and start placing an emphasis on having people come to facebook to watch their videos. If they are a real destination for video viewing, then watch out. I think there will be a massive increase in what they can do and become as a business and destination. How do we know if that happens. We heard about the revisions and metrics that facebook is using to measure particularly video. How well is facebook really doing when it coming to engagement. A view for a second or three is one thing, are people really bearing down and engaging on multiple videos on facebook . I think the measure is that theyre customers. If the end users like the experience, if the advertisers are getting the value they want out of it. My perspective being that at sales force were partnering with Companies Using our marketing cloud. I look at my per sective and i see if theyre all getting the results they want from that platform. I think as long as that feed back is there, i think at the end, they will work themselves out just by the results that the advertisers and users are getting from the process. Certainly theyre used to complications and all sorts of distribution channels, television not excluded from that, thanks, brett and josh. In the meantime, we have new figures out on 2017, obama care enrollment, 11. 5 Million People signed up through the 24th of december. That is up almost 300,000. The Government Entity that overseas the program is encouraging people to sign up despite the uncertainty. As we go to break, take a look at where we stand this morning, the dow, 59 points from dow 20k. When we come back, kayla will sit down with governor tim pawlenty. Later we go live today two of the Jp Morgan Health care conference and talk to the ceo of renerjon. You do all this research on a perfect car, then smash it into a tree. Your Insurance Company raises your rates. Maybe you shouldve done more research on them. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you 24 7. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Welcome back to squawk alley. You have 200 ceos in the aud yenls, but yesterday it was all about Cyber Security. What grade would you give companies on attacking tieber security where it is rooted, and where would you give the government for working. You need it to be open, and theyre kpaching up t keeping with the original intent. The good news is that were on the precipice of breakthroughs that will help. When i look at the agenda, or the list of priorities, tax reform, Retirement Security planning, Housing Finance reform, trade, it reflects a lot of the priorities. The administration is in favor of recalibrating the deployment of it, but the economy is stagnant, and you need to employ more into the department and we need responsible actions by final services to help with lending and investment. Your reaction about border adjustability, territorial taxes, leaving forgiveness out of the question. There is a lot of those discussions yet to come, but foreign earnings, how you treat them, and i hate to say it, but it is low hanging fruit. Now theyre just arguing about what should the rate be. I think the harder part is tax reform. Banks are not necessarily the largest importers of goods, but they have call senators, investment bankers, do you think there will be finish for them to bring jobs back . It is something that will be part of two discussions, twhaun is a tax issue. And trump view of america first, it will effect us more than labor, and that is technology. How do we take care of people and make sure theyre employed and have chick kmuk when they take more and more blue color and white color jobs. One of the people that may be well tasked with that is steve. He has been called a foreclosure machine. What do you think are his chances of getting confirmed . His chances are good. The republicans can confirm without democratic votes anyone they want. So they have some republican defections, but he took over a very troubled organization, they had a lot of trouble. He was accused of bad things, he will get confirmed and i think he has all of the skills and background experience. I remember you telling me you hope that the president elect would release his tax returns, and he didnt. Are you satisfied with his disclosure . There is a threat hold they have to comply with, and i think they will, and it seems like that is taking place on Different Levels of speed. It breaks a modern tradition of people running for president , making their tax returns available. He broke from that. He is basically saying im not going to because i dont have to. Everyone is moving on, so i guess i will have to, too. Always appreciate your time, and your perspective on everything going on in washington. Thank you, back to you in the studio. When we come back, live today two of the Jp Morgan Health care conference with the ceo of regeneron. Then Mario Gabelli will join scott. The dow up almost 60. Welcome back to squawk alley. Lets go back to the Jp Morgan Health conference in san francisco. John, thank you so much. Were joined by dr. Schriffer. I want to start by talking to you about a pipeline drug that many people think is under valued. It is our drug that addresses allergic diseases. They are an epidemic that have been accuracying every year. Bad asthma, alert allergies to drugs and all sorts of things. They might impact the diseases, and we think they might be able to do that. We hope the first approval will come at the end of march. Monitor to severe top of dermetitus. We want to follow that with hopefully more data on asthma, working on nasal pallups. In your presentation, yesterday, you said the industry doesnt office put the patients first. We try to live that. Members of the National Academy of sciences. Were both ph. Ds. Prices go up so dramatically and make it hard for patients to get access to drugs. That is a difficult situation. And more personal note. They went after an injunction which is an unprecedented situation where they want to take a drug off of the market. Why not just wait. We ask you just wait until the Appellate Court can really view this. We think they can wait. In terms of pricing, we heard that the system incentivizes the drugs. The best example of all, of doing it right, is to come out with a fair price. When we priced our drug, if you use it on label versus the competitor, it would have been half as expensive. Our drug was priced lower than the best drug. Now we are the market leader. It is getting the first price right. How did k it be later the value goes up. That, to me, is the sort of stuff that we have to get rid of. He said he is not going to raise his druks higher than cpi. He says he doesnt like what happened with drug prices and he wants to bring it down. It is hard to predict how they will do it. The head of hhs, dr. Price, i think he gets the point that he wants patients and doctors to make the choices. I dont think he wants to improve i think the administration will look to see is the industry doing their part . If not, that is the big fear, that they will try to step in and impose prices. We need to get this right ourselves. I dont want them to come in and do this. I dont want incentives to be taken away. Drugs that can make people see when theyre blind, curing aids or hepatitis, we need all of those drugs. But we need a system that incentivizes us, rewards them, and responsibly incentivizes them. Coming up on the halftime report, the valiant ceo. Markets are pabt to close here in the u. K. And across europe, recovering from earlier lows, the ftse rising to a new record high, extending the win streak to 11. Data showing the chinese Producer Prices hitting fiveyear highs. U. K. Super market chains also leveling. Helped by the return of food inflation according to the Research Firm kentar. Nine records in a row from the ftse. Indeed, when we come back, the latest from the Jeff Sessions confirmation hearing on capitol hill. Later we go to icrs annual retail conference where they sit down with a round table of restaurant executives. More squawk alley after this. , ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Were attacking you to Jeff Sessions in front of the judiciary talking Cyber Security. The Defense Department and how we as a nation have to react to that, which would include developing some protocols when people breach the system and a price is paid even if we cant prove the exact person who did it. I have known you for 15 years now, we had a lot of contests on the floor, sometimes we agree, sometimes we dont. Im from south carolina, so i know what it is like to be accused of being a conservative from the south. It means something other than youre a conservative from the south. People try to label you as a racist or bigot. How does that make you feel . And this is your chance . That does not feel good. They need to be stopped. [ yelling ] if nothing else, im clearing the room for you. I would suggest that the freedom of speech also has some courtesy to listen. Senator gram, i appreciate that is ind si gram. The police have had their hands full this morning, they said that allegations of arable animosity are what they called an unfair character. He kept his demeanor calm through the repeated interruptions. I dont think it is an issue coming up, karl, that i wanted to flag, plengt trump said in the campaign that he is going to push for the prosecution. Over the email situation after the election if he won. I think it is unlikely that it is going to happen. The president elect signals that himself. The issues do arise in the department of justice. He said he will rescues himself from consideration of those because the comments that he, himself, sessions, made during the campaign would impair the appearance of objectivity. I think that this is something that is not likely to arise in practice. I dont think president elect trump intends to pursue, or that the department of justice would pursue a prosecution. But if it arises, he will rescues himself. Thank you, john harwood in washington. The down is up, lets go to sue herera. Iran and western powers meeting in vienna. They will review iranian complain complaints. Thousands attending the funeral ceremony for rafsanjani. It was followed by a procession through the streets of the capital. He died of a heart attack on sunday at the age of 82. It will cost more for customers to upgrade to a new phone. This is in addition to the activation fee when a new line of service is setting up. And fifa will expand the world cup to 48 teams adding 16 extra nations for the 2016 tournament. 16, three team groups, with the top two advancing to a round of 32. It was unanimously approved by the fifa council today. They are projecting an increased profit of 640 million. Back downtown to squawk alley. Thank you when we come back, what Microsofts Nadella says about working with the government. And what are you watching Rick Santelli . Lets go with that, the best day for transports, the s p is up, but they didnt look that way before the market open, it