They used to force companies to buy stock. Now its prohibited. Earlier in the week when we did 300 i messaged you and said, this is definitely it. We have to call the top here, definitely. This has got to be it. They keep going. Another 142. Hope springs eternal. 19756. What is interesting is that, you know, things havent even been done. So we dont know whether deregulation and cutting taxes and progrowth supplies, we dont know whether they are going to put them in. But there was a question recently about whether those things even work. So now were seeing this, we dont know if they are going to do it, but just the possibility we might do them is worth 2,000 points on the dow. And dont you think every single cabinet member he names leads you to the conclusion that it is going to happen. Its got to be the most probusiness cabinet since ronald reagan. I had a great talk with al gore. It was interesting, it was nice, we got along really well. And he picks the Oklahoma Attorney and its been happening one after another with things like that. How rick perry could be running the department of energy that he thinks shouldnt exist. Obamacare, we had a good talk about obamacare. I even like some of it. And he picks tom price to do it. Tillerson is the one that you guys might decide, this might be the one that i like it. Youre not going to draw the line here . He lives in Climate Change, my friend. Unlike you. He does, ive had conversations with him. Ive had conversations with him, too. Ive had conversations with him on a golf course. You know, you think he has no you dont think he has to actually do you think oh, so tell everybody. I have talked to him about it. So he lies when he goes in public . The same people are highly skeptical that co2 is the ultimate determinant are you suggesting what he said publicly hes lied about . No. I dont know. Hes telling you Something Different than he said publicly . When i pinned him down on it, he expressed skepticism about the afintive manmade elements of Climate Change. Can i parse this, he can believe that the temperature is rising but its not necessarily because of man . Ive heard him say publicly he thinks man is responsible for this. What do you expect the ceo of exxon to say publicly . You are making his it wasnt public. Im saying it wasnt public. His confirmation hearing could be a problem if hes a denier. Its going to make it a lot harder. Absolutely. Trump cant be president because hes a denier. Just because the president by the way, he has republicans in the party that have other views in the world. Heres the thing, Climate Change will be the least of Rex Tillersons issues during the confirmation process. Right. In fact, its the least of the normal person of the american publics concerns as well. Dead last every time they talk about it. And around the world, in fact, i have seen polls. Except for the whole liberal mindset, you have to get used to things starting to swing the other way, my friend. I recognize that things im not sure they are going to swing the way you think, but well see. Youre kidding, really . But youre sure lets do headlines. Let me just ask you one thing, does co2, does it cause the warming or is it causing any bad weather that we see anywhere . Is it causing more storms or more tornadoes or more droughts or more floods . Or is it just im no scientist, but my understanding is it is causing some degree of warming and that warming unto itself may be causing storms in other types of surges we havent seen. I have seen much colder winters are predicted now. Im serious, im going to send you the latest clearly other people have different views on this, there are. Interviewing Insurance Company executives about whether or not let me finish my sentence. No, because Warren Buffett will tell you on the annualized basis year to year hes not worried, but longterm there could be a problem. Thats all. You cant price it. You cant price it on the year to year. If you think theres absolutely a connection between rising temperature and more catastrophic events, then of course you can raise prices when it comes to insurance. The church of Climate Change the church of climatology at this point doesnt know if they are talking warming or whether it is adverse weather event. Its both, but it makes it so much more when it is justifiable. When did trump announce youre joining the administration. Trump wasnt even running given all the comments you have, im hoping theres an opportunity in the office for you. You got me. You got me. You were ready. You were armed and ready. Just saying. Here are the big stories. Roll the teleprompter, please. Oil prices are surging to their highest level in a year and a half. Thats after opec and nonopec producers reached a deal to reduce output to cuts of 1. 76 Million Barrels a day to 24 countries that currently supply more than half the worlds oil. Look at the screen, it went as high as 57. 89 this morning. Wti is at 53. 79. It looks like one of the highest points in the session with gains of more than 2. They are gains of more than 4 for both wti and brent. Natural gas, by the way, look at that. Lower by almost 20 cents. A decline of more than 5 . In corporate news, boeing reaching a 17 billion deal to sell 80 jet liners to iran. This is the first major transaction between an American Company and iran since donald trump was elected. The deal was first announced in june, officially sealed yesterday. The u. S. Companies including boeing began talking to iran earlier this year after a nuclear record removed sanctions on tehran. But there are questions on whether donald trump may look to slow or stop dealings with the islamic republic. Meantime, airbus is close to finalizing a deal to sell passenger jets to iran as well. Because of sanctions, they have some of the oldest fleets in the entire world. So the country is desperate to upgrade their planes. Fords ceo says president elect trumps threats will not change the plans to move small car production to mexico. Trump said hell impose tariffs on companies who move jobs abroad. But mark fields says the ford focus will be moved from michigan to mexico as plan because American Consumers demand low prices for small cars. And cnbc confirmed google is planning to expand services in cuba. That gives cuba an access to google servers that accelerate internet speeds for google products including goe ining goh and youtube. Eric schmidt is expected to sign the deal in havana. Tomorrow we get novel import prices and the fed begins a twoday policy meeting. The announcement on rates comes on wednesday at 2 00 p. M. Eastern. We are 2 50 now on the tenyear. When we did the futures, we should have done oil and the tenyear is what we should have put there, followed by Janet YellensNews Conference. We have not showed the tenyear yet. 2. 05 . 1. 05 on the euro. 1. 15 on the yen. The dollar is strong. What is weird, the dollar is strong as oil is up 5 . That usually doesnt happen. Which is weird. Those are the things that probably needed to be said. A quarter point Interest Rate hike is going to be announced. And well get november sales and ppi. On thursday, the november cpi and the latest philly fed survey. Finally on friday, november housing starts. President elect donald trump may be about to fill two cabinet positions with the coo of exxonmobil and onetime political rival john harwood is joining us now from washington with more on that story. Good morning to you, john. Good morning, andrew. For weeks we have been watching this roller coaster on secretary of state. And youve had moments where rudy giuliani, where mitt romney, where David Petraeus, where bob corker appear to be the frontrunners. It looks now, not final, not official, and donald trump even tweeted some mystery about it over the weekend, but it appears that Rex Tillerson, the ceo of exxonmobil, is his likely choice to become secretary of state. He defended that choice yesterday on Fox News Sunday with Chris Wallace. In his case, hes much more than a business executive. Hes a worldclass player. Hes in charge of, i guess, the Largest Company in the world. Its been a company thats been unbelievably managed. And to me, a great advantage is he knows many of the players. And he knows them well. He does massive deals in russia. He does massive deals for the company, not for himself. Massive deals in russia, thats going to become a point of controversy. You had some republican senators yesterday including marco rubio, put out a statement saying a closeness to Vladimir Putin is not a trait im looking for in the secretary of state. In light of the cias conclusion that the russian government was tied to interference in our election, you did have a bipartisan call for an investigation. Dont know where thats going to head. Now theres another cabinet post that donald trump is looking to fill, possibly this week. And interestingly enough, his choice may be former rival rick perry, former governor of texas, somebody who called donald trump a cancer on conservativism in his own campaign. And hes the likely choice for secretary of energy. That just happens to be the agency that he forgot about when he and i had an exchange at the cnbc debate in 2011. Take a listen. You cant name the third one . The third agency of government, i would do away with education, the commerce, and lets see i cant, the third one, i cant, sorry. Oops. Now, he was talking about the department of energy, wanted to get rid of it, now he may be heading it. There are other contenders as well. Well be watching for appointments all week, guys. Thank you, john. Appreciate that. In the meantime, billionaire bill gates announced a 1 billion fund thats focused on combatting Climate Change through Energy Innovation investments called the break through Energy Venture fund. Gates will serve as chairman of the fund and anticipates being actively involved. Jack mao will serve on the board among other investors will be saudi arabias prince. And jeff bazos will join. Bill gates will be sitting down with becky quick, an exclusive interview right here tomorrow at 8 00 a. M. Eastern time on squawk box. Well get back to the other markets, here are some of the other things to look at here. Well look at currencies. Number one, it gets dicy when actually, it was 105 earlier. Those are the lowest levels we have seen for it recently. Theres the tenyear, 2. 51. Ive had people say, are the fed going to raise . Its like it doesnt matter, the tenyear is already done. Its already done. And its kind of interesting, if you do worry about where Interest Rates are based on what we may see in the coming administration, it seems like we may be too low based on the kind of plans that the Incoming Administration has. Its like we may be playing a little bit of catchup. The next couple of years with tax cuts and theoretically a trillion dollars in infrastructure deregulation. And all the other things, deregulation, could be much faster Economic Growth. Even if it is temporary, it just seems like they might be behind. They havent you know what . Its one thing about the last eight years, they havent been behind the curve at zero based on the Economic Growth for the past its actually been okay. Its actually been okay to stay at zero. Stocks coming off five positive weeks in a row. Really, we forget, i think, we were at 1705. We were below 18,000 for the election. It is 2000, it is a really 2,000point. The dow and nasdaq all broke records. The fed will start a twoday meeting. Joining is ed campbell, managing director. Julian emmanuel is here from ubs security. And all the correlations we have seen that we took for granted for years and years, some of them were thrown out the window. Oil is up 5 . The bond market has been, like, imploding, or at least rates have been rising and the stock market goes up every day. So all these correlations or linkages are suspect at this point, maybe for a gooden are, maybe because well have faster growth. Ed . Yeah. And until the research we have done on pe ratios and Interest Rates, we may have talked about earlier, but our view is that higher Interest Rates are not really an obstacle for good stock returns. That p. E. Ratios are generally higher and stock returns are better in a normal Interest Rate environment than in a very low Interest Rate environment, because very low Interest Rates signal deflation risk and anemic growth. So i dont think higher Interest Rates are an obstacle for brighter stock market returns. And were generally bullish looking forward. And you saw oil today. Im sorry, gold, 1150. That makes sense with the stronger dollar. But if were blowing all these, you know, if were blowing the deficit out and ennation is coming back, when does gold move . At some point the dollar needs to take a rest. Along the way, i mean, we really have discounted if you look at it, the biggest thing for us is ceo confidence. You look at every measure of ceo confidence is basically soaring over the last 30 days. And thats really been, you know, the story. America first is trading the dollar higher. And ceo confidence is why oil and the Economic Expectations have increased as much as they have. So we get 20,000 before the end of the year do you think, ed . We could get that this week. Its only half a percent higher. The 21,000 is in sight before the end of next year. 2300 on the s p to 2400 next year. Thats like a 2 on the low end, i mean, really going out on a limb, what do you think 2017 . I think 2017 is going to be a good year, we certainly could see 8 to 10 returns on the s p 500. Thats going to compare favorably to what you get in fixed income. You get 2600 or 2700 then. Where you think youre going to get negative returns out of bonds. So i think the dominant theme that youre likely to see for 2017 is a continuation of the u. S. Reflation theme. This trade is going to wax and wane, but we do think its a new trend. Donald trump is not a vix 11 president by any stretch of the imagine nation. Hes made it very clear that part of his plan is unpredictability with the rest of the world. By that standard, the market is likely to trade higher because of this growth impotus. If you look at the last year and a half, you have the ups and downs, big volatility moments. We continue to expect that will be with us in 17. So in 2017, what is your prediction for the highest quarterly print on gdp next year . I think you will see a three handle at some point. We saw that last quarter. Anything above in terms of quarterly gdp, you could get high numbers. I think in terms of the overall year, were looking at Something Like 2. 75 or so. So were not going above 3. 00 next year . The speed limit in the economy is a lot lower given the productivity growth. But i think well see more growth than we saw this year and more inflation. The cruise liner around, eight years to turn it around, were not ready yet with 4. 5 unemployment at this point . Were not ready for liftoff . 2. 75 growth for a mature developed economy is pretty good growth. Its okay. Just relax. Let the consensus lay there. Well let the conventional wisdom stay there. Do you think we can achieve 3 to 4 growth on a trend basis . I think thats probably too much to ask. We could achieve that over a shorter period of time. In the 80s we were not a developed economy . Well, in the 80s we had faster Labor Force Growth and in the 80s we had faster productivity growth. In the 80s, maybe they start mentoring i do think we can get a rebound in productivity growth, but i think 3 to 4 growth is probably too much to ask for. You would think that larry kudlow thinks possibly 5 . I think we can get at least a 4 , but they will realize that theres more than just snapchatting. You can do tinder. And then you meet people does that help productivity growth . Yeah, at the end, if they get married. They have babies. Follow us here. You cant just hook up forever, right . Settle down. How many times are you going to you want to be with somebody you care about. What you want to see in the stock market, you hit upon this does this situation get the millenials interested in investing for the first time . That may happen. I think that is possible. Thats your up side right there. Do they start investing in individually equities or start being etf and mutual funds . But it leads to buying. Yes, but it changes the equation on how the whole thing works. We think its going to be a good year for active management next year. Okay. Thank you. Are you active management . We are. It might be a good year. Thats when you really need guys like you, julian. Thank you. I love when you guys say that. Coming up, much more on the trump transition, a closer look at the potential secretary of state pick in Rex Tillerson. What is next for exxonmobil if he takes that job. And later, new reaction from china over trumps comments on the one china policy. Squawk returns in a moment. 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