Transcripts For CNBC Squawk On The Street 20170106

Thats the strongest of the expansion. Well get to all the numbers of the premarket relatively steady. Europe is mixed. Yields actually if you just heard ticked up on that wage data. Factory orders, rig count and fed speak today still on the way. Roadmap begins with 156,000 jobs added in december, below what the street was expecting. The last jobs number under president obama. First it was ford then it was gm. This time the president elect goes after toyota sending alarm bells across the nation of japan. One retailer reversing the trend, gap shares are surging after a better than expected december helped by old navy. Well get into that. Aside from the december payroll figures, the Unemployment Rate coming in at 4. 7, as expected. And we mentioned earlier average Hourly Earnings up 2. 9 from a year ago, thats the biggest increase since 2009. Participation relatively flat, jim, i know you looked at with the revisions over the past two months people are calling it a bit of a push. I think when you see those average hours going up in terms of how much people are making in wages, thats something people have been waiting to see. I think there are a lot of people wlo feel those kinds of people those job levels have been disenfranchised, its good to see theyre making more from a point of view of the worker finally getting a little more money. But i think it also confirms the need to be able to raise two to three more times. Makes it so the 3 billion number im looking for from j. P. Morgan because they report next week that the four rate hikes they make 3 billion more were consistent. And that means that i think what will happen is that youll get the banks to back rally. Remember the banks slid back yesterday. And i really think that, yes, i know the Labor Participation rate is too low, but im looking for a market which says we need rate hikes. Because we cant have that leadership sink back and the market just go to f. A. N. G. Again, facebook, amazon, netflix, google, alphabet. Which just happened. It was a total f. A. N. G. Day. Was it a oneoff . You talked about this yesterday a lot, perhaps tax reform will take a bit of a backseat to repeal, replace aca to other issues and therefore is not even a 17 but really an 18 event. I dont need to say a thing. On from there. Yes. But today it may be today, look, we got some new tweets. Its just theyre more relevant to a show i used to be a judge on the apprentice. Not as relevant to the Corporate Tax. Although they involve it in trade. Disparaged schwarzeneggers ratings on nbc on a day where today 12 30 well get that intelligence he will get that intelligence briefing and well see if anything comes of that. But when i did look the apprentice, theres a lot of work that has to be done. Maybe schwarzeneggers not doing the work. What am i focused on the wrong thing . Focused on what the president elects focused on. Is it a mistake . I didnt see all the exchange on the aprprenticeapprentice. I fired melissa rivers, i didnt mean to. You didnt refer to yourself as a ratings machine my episodes did have some very good theyre his episodes did have good numbers. Im only addressing that because theres a string of tweets about it. Im looking at this. I just, i mean is this going what, do you have a problem . A problem with the mandate . Yes, i do. The mandate. I got no problems with mandates. Got no problems with mandates, women dates, you can date anyone you want. Were going to get wells, jpm this is so important. Were in the earnings soup and those dont have strong dollar problems. Im looking for them to anchor this. Im even looking for my travel trust owns it, im looking for wells fargo to have a not disastrous number. Its not just financials that lagged though, right . Yeah. Yesterday we havent had a new high on the s p since december 13th. Yesterday was a contra day. Youre not in the sell the inauguration kind of mode. No, im in a belief that the money stayed in the market. You know, i write a show with my nephew cliff mason and we were stuck with this idea that it wasnt in the end the money didnt flow out, there was another time the money would have just gone out of stocks. Instead it rotated. What . Average Hourly Earnings, that was a big increase. I know we pointed it out. That is something that the feds going to key off of. The fed says, hey, listen, now thats going up its time to tighten. Right. Well speak to mr. Perez, secretary perezs last time. It is. One last time. One last time. One last time. Well see who replaces him on that job. Dont know yet. No, we dont know. Hey, we have that fellow from cke i use on the show on mad money a lot, hes a cost saver that fella. Thats true. Though im hoping well get gary cohen out to talk to us. Theyre all good. Hes a great gas man, i used to run those commercials. The arbys commercials. Used to run them where, on your house . I ran them when i had them on. They were killer. No ones replaced those ads. Said competing with a billion dollar Marketing Budget at mcdonalds youve got to make them memorable. Youve got to do. Kind of like the Cool Hand Luke when shes like clean iing the car. Remember that . Im shaking it, boss. Still a lot of buzz this morning surrounding the president elects tweets about toyota from yesterday. As you know he tweeted Toyota Motors said well build a new plant in baja, mexico, to build corolla cars for the u. S. , no way, build in u. S. Or pay big border tax. Japan today defending toyota. Prime minister abes chief cabinet secretary calling the company an important Corporate Citizen of the u. S. Trump also making the front pages in japanese newspapers. This headline says trump tries to smash toyota. The finance minister says its unclear whether the president has a grasp of how many vehicles toyota builds in the u. S. Well, i mean, i think that the president elect has been very tough on ford and on gm, but if you go to the state that i spend my time in mexico in, it is bmw, it is lexus, it is benz. Thats who makes them there. They put them on the ksu union pacific. They come up. Doesnt matter if theyre from the center of mexico or detroit. Where does all this end, jim . Youve made this point many times in terms of what youve seen during your residence in mexico of the growth there. Yes, very important. A lot of the components are manufactured in the u. S. , i believe. They go back and forth. And they go back and forth and back and forth. If you continue down this road with large potential tariff on goods manufactured elsewhere, where does it stop . What about a drugmaker that is a u. S. Drugmaker that makes all its drugs in ireland . I dont know. Do you put a tariff on that . What about a foreign based drugmaker that makes all its drugs in the United States . Because it actually inverted itself. I had the most problematic guest on of all time last night. I had rob sands from constellation beer. And i said what are you going to do about corona and modal. He said you cannot make mexican beer in the United States because its not mexican. I had to think through that. Its true. I said can you make mexican is there a way to make mexican beers you can make mexican style beer. You cant make corona, its not heche, texas. Did you hear what dillard said in this interview after headlines came out yesterday about trumps wouldbe opposition to time warner at t. Who cares what he thinks. This is dillards words, who cares what trump thinks about anything unless its obvious hes going to micromanage every element of things like antitrust. Thats a good point. Well see who he appoints to the antitrust division of the doj once sessions is confirmed, assuming that is the case. Well see who he appoints to run the fcc. Theres an expectation there that it will be very much hands off when it comes to the fcc. That you will immediately have a turnaround on Net Neutrality and a number of other things and that can happen quickly. But youre right, we dont know. And yesterdays report from bloomberg saying that a confidant continues to say trump opposes that deal, which did increase the spread in the deal. You know, its very hard to know what to make of these kinds of things. Hes granular about this. But president obama was granular about those trips to vegas. Remember, he said that . I do. That was like vegas, tourism took a huge header and no one if he said trips to different junket places, maybe it wouldnt have hurt so much, but i dont want to give anybody a free pass. President s can single out but its clear in terms of a theme that he is building this case for a border tax. Absolutely. If you dont make it here and you import ilt from there and bring it here, its going to be taxed. But paul ryans made that case for a long time. Without a doubt. And in fact the journal today has an interesting story about retailers after analysis by other parties in terms of what the cost is going to be on their tax bill. Its going to be enormous. Another reason to avoid this group, that group is really f m from look at old navy. Eventually going to make close as well so put hundreds of millions of people out of work in emerging markets and then they can move all the manufacturing back here but its not going to create jobs. The Tech Industry was the most by nafta. You can go over the Labor Department, ive looked at that Labor Department thats where we were decimated. Thread a needle and put on a button and then youre talking about massive unemployment. These ties are from florence. Thats very nice. Im sure it was hand made. You went to florence with vik ki we went to italy together, yes. I watch all his documentaries. Amazon, j. Crew, house of cards. Thanks, carl. They were good ones. He had a bunch of good ones too. Unfortunately we havent made them anymore. Theres a lot of shark tank to watch. Yeah, billion dollar faber. Billion dollar faber. Just a combination i like that. I like the way it sounded. When we come back, jim mentions gap and we want to talk about this rare bright spot for retail and what has been an ugly week. Also ahead, labor secretary tom perez on this mornings big jobs number. Two weeks left until the Trump Presidency. Take another look at the premarket after that big day for f. A. N. G. And amazon and the nasdaq yesterday. More squawk on the street from post nine in a minute. Jc penney latest Department Store chain to report disappointing sales, comps down 0. 8 hurt by weakness in womens apparel. Gap is a bright spot rising in the market after post ago surprise 4 increase in december comps, that includes a 12 jump at old navy. As a result gap now sees full year earnings at the high end of the previously announced guidance. Its been awhile since old navy has been able to do this for the company. Yeah. The company itself is calling itself slow moving train, not rolling to call an inflection point, as im reading the j. P. Morgan note. Supercash redemption days in december, year over year including tv new price point promotions there are some things going on that are good but this is maybe the most inconsistent of the majors. So i hesitate to say buy, buy, buy gap stores because then the next month could be different. I brought this up in our last conversation, but i mean, at what point do we start to have to include a discount for the fact that so much of their product is imported from indonesia, vietnam, turkey, mexico, china and all apparel selling companies . If this border tax you cant expense it if you cant expense your merchandise. Youre going to benefit from a lower tax rate, youre going to benefit from capital expenses being able to be immediately depreciated. Look, i think its not a push. I keep coming back to why i like the bank stocks. Goldman sachs see a price rise target today. They just dont have any of these issues. Theyre really in the sweet spot. Some are trying to read into this border tax, say theres a minimum, right . A 5 cost to goods thats exempted, is that positive for dollar stores, right . For walmart. People are trying to read way deep the level of granular tito this thing is rather extraordinary and i think its not been thought through and its going to take forever to get through. It is. Were going to do a lot of analysis of it. Were referring to a lot of what is in the ryan plan, which may or may not become what we end up with. Im not saying its inconceivable. Im saying its so complex that if this is what the Congress Gets bogged down with, youre not going to have repatriation, youre not going to have traditional Corporate Tax reform. Why are you saying that . Bogged down with what . Its not going to get done. Because this is really hard stuff. It is, but its part of the plan. Whos sitting there . Like whos this guy . Maybe it will be you. You were on the apprentice. That was a long time ago. And i was a rigorous judge. And i got to tell you, i would i didnt want gene simmons to go, i urged him not to quit. Youd be a good negotiator in there. You would. You know all the Different Things. Well, i like this job. Can i keep this job . Sure. But i think davids point is a good one. Youre great on twitter. Yeah. You know the impact, say thats going to hurt, thats going to hurt get it done in 20 minutes. You raise a good point. You raise a good point. I like when we render you speechless. I know. I mean carol alt was someone that i went i was all who . Carol alt. She rendered you speechless . Yes. I can see that. Very beautiful woman. When we come back well get cramers mad dash in a moment, count down to the opening bell. Later on interview with tom perez labor secretary and intels Brian Krzanich. More squawk on the street from the nyse is back after a break. Healpi caa ball cos14 eawhatursrgbuh an yd ic gs ricaesd ic owhat c well count you down to the opening bell, last trading day of course of the week. About nine minutes before we get there. Where are we headed on a mad dash . Clear up what i meant is i felt carol alt should have been carol alt, former supermodel, was a contestant on the apprentice that you judged. And i did not my analysis was not accepted. But thats okay. I thought i made a very good case for her to go to become the cleb celebrity apprentice. Clear that up. David, big court case, regeneron vers versus amgen. Amgen wins. Okay. This is over this pralien, very important high cholesterol drug a lot of doctors want to start giving to people once theyre absolutely sure because this is the one if you have really high cholesterol this could be a lifesaver. Was the court case about a patent. And amgen outright won. Now, i cant believe theres a lot of people are saying wait a second. Does this mean regenerons just blocked . Yes, for now. And goldman takes amgen from 202 to 218. Wow. David i know. Remember, sanofis been buying regeneron stock throughout. Yes. But i think this is a clear call to buy amgen. I think people should buy amgen if its only up five bucks. This could be some sort of settlement, but david, its stunning. Amgen could go higher. Interesting. Amgen, jim, also on a very different front has an enormous amount of overseas cash, maybe the single largest in the industry. Is that true . And certainly when you compare to their cash flow as a percentage versus a company like pfizer, it is by far the largest. So thats also they are a big beneficiary of potential repatriation at amgen. Just Something Else to throw in there. That stock should be higher. I did not know that. Yeah. And i just know this is a big win for them. Amgen has a lot of things theyre doing right right now. I like that stock very much. We have a lot of other stocks were going to be following this morning. Of course get back to that point we got on the employment number, 156. Keep an eye on the bond market too when squawk on the street comes right back. My name is jamir dixon and im a locate and Mark Fieldman for pg e. Most people in the community recognize the blue trucks as pg e. My truck is something new. Its an 811 truck. When you call 811, i come out to your house and i mark out our gas lines and our electric lines to make sure that you dont hit them when youre digging. 811 is a free service. Im passionate about it because every time i go on the street i think about my own kids. Theyre the reason that i want to protect our community and our environment, and if me driving a that truck means that somebody gets to go home safer, then ill drive it every day of the week. Together, were building a better california. E . Na c youre watching cnbc squawk on the street live from the Financial Capital of the world. Well get the opening bell in just about four minutes. Final one of this first trading week of the year on a jobs number of 156 below the 178 estimate, but november and october put them together with revisions they were upped by about 19. So pretty much in line. Yeah. All you would need to see in this market remember is very different from the preelection market is you need to see enough job growth, enough wage growth to be able to make it so the fed does raise normalized thing things, be able to get it so you really feel like were going to be able to come into this year a little bit stronger. No sooner do we have greater auto numbers and people said peak auto. No sooner we had higher rates and people said mortgage purchase numbers were down. You dont want to see a lull because the lull just drives you back to cloud stocks. And there are not enough. Nasdaq hit an alltime high yesterday. Thats contra trump. You want to see the industrials. What . No, i know. Contra trump. Not a trump stock. Not a trump stock. Not a trump stock. Not a trump stock. Workday, not a trump stock. Service now, not a trump stock. Not a trump stock. Box not a trump stock. Best day yesterday for amazon in more than seven weeks on a week where Everything Else is sort of retail misery. And it went up throughout the day. At 9 45 it was up 4. 5, looked like it was going to waver with the rth and then, boom, inflection point. By the way, costco, travel trust owns that, costco a good number but thats because youre going to see i believe a price increase in your membership. Remember that is the brick and mortar version of what do they charge for one of those right now . Like 55 or something . Okay. I dont know, my wife buys them. She has a black card . Its a great annuity and thethey have improved the website, which was horrendous. It was one of the worst out there. We did get some blue Chip Research today on disney, an upgrade, second upgrade this week this time out of rbc. They argue target 130, affiliate cycle fees and make this argument, jim, investors just love to love disney. Isnt that something . Talked about 65 billion in debt capacity, could sell or spin espn, its just a nonstop story. Its now part of the landscape when you talk about disney whether or not they would do something with espn. I think if he does something it will be by february 10. Whats feb 10, the super bowl . Its his birthday. Oh. Its igers birthday. Do you keep track of all ceos birthdays . Ceos with same as mine, yes. Hes a little older than you are. Yeah, but hes more aarp than i am, but good day to do things. We send birthday notes to each other. That is a good day. Lets remember that day by the way. February 10. Its funny, im a month late sgler that is hysterical. Isnt it just incredible . As for disney, yes, espn continues to be this conversation piece would they ever do it, will it continue to suffer declines. Is it only the beginning really as we see the proliferation of over the top services at cheaper price points without sports does that incline people to say i dont need it . What percent of households really care about the sports programming and willing to pay the 7. 50 a month or whatever . Who knows. I think youre right. If theres going to be something that people arent going to pay for, right . Youre going to start to see entertainment focus bundles that dont have sports. Its big. Its very big. Lets get to the opening bell here, s p at the bottom of your screen. At the big board today, stanley, black decker and professional bull riders kicking off Monster Energy tonight at Madison Square garden. Big week for stanley on that craftsman deal. At the nasdaq lululemon celebrating fit week of 2017. I do not think lululemon is done. A lot of people are concerned about apparel. Jc penney it was womens apparel. Lululemon its a mindset. Its about mindfulness. Its about and i know these things. You mentioned costco a minute ago, walmart is just now announcing john ferner, ceo of sams club replacing roslynn brewer retiring at the end of the month. Ferner is currently the chief merchandising officer at sams, has been working there since he joined as an hourly store assistant in 93. Wow. More turnover. I just dont want to see more turnover there. Stocks down. Doug mcmillan, hes got the mandate waiting for jet. Com. But walmart let me see that staff kind of its like target. You dont want to see a lot of movement in retail. You want to see theyve got the team. Like costco, you never see any changes at costco. Never. Right. Same people. You go to your costco, its always the same people. When you get the free samples, its always the same people. Thats very helpful. Right . I mean, i would assume that is very helpful. I know at home depot that was an issue for awhile and they dealt with it and improved a great deal. Weve talked a lot about walmart and lack of wages contributing to a turnover in the workforce whereas costco of course pays a lot more with higher all sorts of benefits. You know, the great jim sen gal always said to me the secret is keep training cost down, thats deadweight cost. Thats why mcmillan raised rates, costco has lowest turnover in the industry which is why they dont have to spend a lot of time having people who dont know anything behind the counter. Turnover in training is a big part of their big for retail. People underestimate how and i think macys, id love to see what the turnover is there. Theres obviously issues at macys. Theres issues at kohls. Theres always issues in all of retail these days. What about best buy when you walk in and really want help from somebody . Well, that person tends to be i wanted help at best buy to buy apple and person worked for hewlett. Those places are very hard to navigate. Navigate is a nice word. Yeah. Financial trade is back. Yes. For now. Regions, key, pnc, fifth third, suntrust, citizens all near the top. Zion, first horizon, key, bbt, those are the big four i look at. You can add comerica but its had such a run, but those all work. Those all work for me because zions by the way has the best leverage to higher rates of all the things. They are the ones that do best with changing compliance laws. Thats a good one to watch. Very good zions. First horizon moved eight points since i had the company on last. Beth moony is doing a great job at key that is incredible but no one gives her credit. No one. Except for we do. You do. Beth the stock was at 11, we said bye, bye, bye. She made great Acquisition First niagra, killer acquisition. Killer. Goldman once again leader on the dow, disney close behind. Mcdonalds is lagging. Oh. We did get a downgrade at ubs to neutral. They argue they got good things in moex, franchise model, some market share gains, jim. But they say its still early and comps are going to be tough. And they say catalysts are done there. They like qsr, they like burger king, i dont know. We have to get easterbrook back on when he reports maybe we get a sense things are not as stagnant. I think we need to see more technology there too. Need to see more of a you really need by the way got to get better affinity programs. Got to get the technology they have in australia in america. See ruby tuesday today down almost 20 . I dont know. Goodbye ruby tuesday. Hang a name on you. Thats good. Q4 comps down 4. 1. Restaurant margins down 400 basis points. They had the best salad bar in the world. I dont know how it happened. What . Their salad bar was unbelievable. Was it . It was the best. So what happened . I dont know. I dont know. I mean, it was great. Just pointing it out. You probably dont go to restaurants. Have you ever been to a cheesecake. A who . Cheesecake factory. Never. Its a store i understand that, has a very long big menu. We order in sometimes in englewood cliffs, weve ordered in from cheesecake factory, so ive eaten their food but never been to one. He doesnt go to restaurants, doesnt go to retail. It is so hard to deal with you. I dont know. I dont know what to say with you. Ever been to panera . Yes. Okay. I have. Line was too long though. I left. Ron shake is just going to have a heart attack he just heard that. It was years ago. That asian chicken is 435 calories, its a killer, david. Take apple, not the bread. Okay. I know youve been watching teva today. Did anyone see that . Yeah. That presentation, oh, my, they cut the forecast, 6650, goes 490, 6 to 4. 90. Interesting when you get to the granularity, its their ms drug that is going to go off patent. Big reduction, a billion dollar reduction. They thought by taking allergans generics, which they bought for a fortune, it would somehow make it so people liked it more. No like. But the stock for all of that not off that much. Now of course we are talking about a stock that was almost 70 a share in early 16. Ruby tuesday, its a big cut. Its a big cut, but stock down 3. 5 . Am i missing something . No, people who can look at a calendar could know was going to have that generic stuff. I think its still very daunting. When you hear generic drug, you hear sell, right . We just dont like that. That industry by the way another industry, the medical Device Industry that had been so hot. Just so bad. Oh, my, so, so bad. Like the knee, nobody getting knee replacements anymore. Apparently not selling well. All those companies that were involved remember mylan and perrigo and teva, theyve all been crushed. And endo is not anything to write home about. Endo was horrible. Just horrible. This group has killed a lot of hedge fund managers. Yes, it has. Lets get back to the jobs number this morning and the last Major Economic snapshot of the obama white house. The Labor Department says 156,000 jobs were added in december. Unemployment ticks up to 4. 7. Joining us one last time first on cnbc with reaction from the Obama Administration labor secretary tom perez. Mr. Secretary, its great to have you back for one last round. Thanks for joining us. Hey, its been a pleasure to be with you over these last three and a half years. Weve been asking you over all these years whether or not wages are close to a tipping point. Is this 2. 9 number the sign that one is truly here . Well, the wage growth is the best wage growth weve seen in the recovery. So thats the most important part of this report. I think its also important to take a step back and look at where we were, where we are. You know, eight years ago elaine chao was here telling the American People we lost almost 800,000 jobs, the Unemployment Rate was heading toward 10 , the economy was in the tank. Here we are now the Unemployment Rates 4. 7 . Weve had 75 months in a row of job growth to the tune of almost 15 million jobs. We had a Global Economic recession. And when you look at the recovery, you know, we have grown more jobs here in the United States than all of the g7 combined. The Unemployment Rate was 9. 9 when that job killing Affordable Care act was passed, now its 4. 7 . Weve seen the ranks of the uninsured decline to its lowest level in history. And were bending the cost curve. So, you know, we inherited a mess, this president. And were much better off now than we were eight years ago. Weve got more work to do, but im heartened by the wage growth we see not just in this report but in the recent trend data. And weve got to continue to sustain that progress. Mr. Secretary, jim cramer, i will miss you. You too. Continue onto great things. I want to ask your successor, mr. Trump has picked andrew pud zner. Do you think that role is going to change under mr. Pudzer. That will be up to the next president. What i can say is jason furman at the white house has looked at the minimum wage increases that have been put in place in states across the country. Skb if doomsayers are correct, we would have seen the et e evidence of that in all these statewide minimum wage increases that have been enacted with the strong support and encouragement of the Obama Administration. And guess what, once again the evidence shows that people have more money in their pockets and it hasnt been a job killer. How many times have we seen that evidenced . But its the same old talking point. And so this president s been fighting for higher wages, were going to continue january 21st to be fighting for higher wages because americans deserve a raise. And many states have given them that. And its put money in their pockets. And its been great for the economies there. By the way, more people buy hamburgers when they got money in their pocket. Secretary perez, love to get your take on sort of the bigger picture. Ive asked you about this various times along the way, but as you leave office, the rise of robotics, the rise of artificial intelligence, of autonomous vehicles, of so many Different Things that were really just at the cusp of but were starting to see in our everyday life, many people think theyre going to be job killers or if theyre not theyre going to displace an enormous amount of workers for a period of time before somehow new jobs are created. What do you think as you depart this job and look at the future of employment . Well, you know, innovation has always been the dna of this country, jim. When the Industrial Revolution hit in the late 19th century, people were saying, you know, that theres not going to be a need for humans. And it turned out that was overstated. What i learned growing up in buffalo, new york, is that i think a key to success for all the workers in this country is to make sure we equip them not only with the skills to do todays jobs but the Core Competencies to do tomorrows jobs. So if we have autonomous vehicles, five, ten years from now, then were going to need people who can repair autonomous vehicles. And i saw this, you know, today the cloud is the i. T. Infrastructure of choice. In a few years the cloud is going to be like the ab we have to whatever cloud 2. 0 is or weve been a resilient economy, and the key lesson i learned and learned the hard way growing up in buffalo, new york, watching parents of my friends who didnt have that opportunity to upscale when the economy evolved, they took a hit. And thats why i love the department of labor because were the department of opportunity. We invest not only in the skills of today but producing folks who may have been yesterdays steel worker but now theyre todays advanced manufacturer. And im confident that when we continue to invest and you have to invest in our human capital. A good company understands that investment in human capital. And, you know, in the Bush Administration what we saw here at the department of labor was the budget for employment and training investments went down. That was short sided. There is no better investment than that investment in our human capital. Thats why we spend so much time on apprenticeship. Because apprenticeships is the other college except without the debt. Now we have apprentices working in the i. T. Sector that were helping to seed in the Health Care Sector, in the Cyber Security sector, in all of these high growth industries. And im confident that if we continue to invest in our human capital, we can adjust. I applaud innovation. You cant swim upstream against innovation. But what you can do is equip people with the tools to handle innovation. Well, i have to ask, mr. Secretary, do you think that the bills can ever get in the super bowl as long as tom bradys playing . Well, im very much looking forward to tom brady and bill belichicks retirement party. I got to be honest with you. I didnt shed a tear when rex ryan was fired because the bills need a coach, not a carnival barker. And thats what they had for the last three years. As a jets fan, weve been there, done that. Yeah, you know, im a serial masochist. There you go. I will be a bills fan until the day i die. You guys made some strides on certain metrics. Time will tell. Maybe tyrods last day though. Mr. Secretary, thank you as always. A pleasure. Best of luck to you. Thank you. Lets get to bob pisani on the floor here see whats moving. Good morning, bob. Good morning, carl. Good to follow labor secretary because its the employment number. Most people down here feel that that kind of confirms three rate hikes at least for 2017. Thats the number everybody was looking for was above consensus. So bond yields up, dollar up, whats not up that much a little surprisingly is stocks. Only eight dow stocks up. Lets look at the sectors. Disney being helped by an upgrade, but banks are up. They havent generally been up this week. This is kind of a trendless week still here. Health care has been a modest market leader. Its not doing anything today. Real estate had been doing a little bit better recently. Its not doing too much. Goldmans been the big leader this week believe it or not. And it also not doing much. So if you look at the week here and you can see why i call it so trendless at this point. Golds been a big leader, im including the open this morning, and health cares been a big leader and real estates been a big leader. As you see theyre doing nothing today. So theres no trend here. Banks actually have been below par. S p up about 1. 3 . Theyre doing a little bit better today, but not generally on the week. And industrials they havent shown any leadership really for several weeks. Thats why im saying were just sort of grinding around here at the same range in the index as passing around sectors of modest gains on a weektoweek basis here. A lot was said about gap. I think the important thing about what went on there was that old navy number up 12 . The traffic definitely improved, but boy, we heard a lot of talk about tshirts below 5, jeans under 10. It was an impressive number, but it was an outlier. So gap was the last company that reported late last night. But if you actually look at the numbers for december same store sales, remember theres only 18, 19 of them that still report. Jc penney was down. L brands. Buckle was down 15 . Cato down 12 . Those numbers, those are about in line with the expectations. Thats whats so awful. Its not like these missed on dramatic numbers. Gap was surprise but everybody else was about in line with expectations. Thats how far we have come at this point. A lot of discussion about the growth in holiday Online Shopping, the numbers have started coming out late this week. Slice intelligence is widely discussed on the floor here. Their overall Online Shopping they had up 20 for the year. 20 for holiday. And amazon share of that 38 up slightly from the prior year. But thats an astonishing number. Think amazon 38 of all Online Shopping right now. Finally, just want to note theres only eight dow stocks to the upside. Disney is one of them, again another leader this week, we got another upgrade from rbc capital. Remember it was evercore that helped them earlier this week with an upgrade. Theres a lot of talk about new rounds of affiliate deals in 2017. Basically right now everything firing on all cylinders for walt disney. New high for them. Dows down 35 points. Carl, back to you. Thanks so much, bob pisani. Obviously a busy morning for Rick Santelli in the bond pits as well. Lets check in with him at the cme. Hey, rick. Good morning, carl. You know, you look at the vix, you dont need to go up and down with your head very much, you just kind of watch it mostly drift. But if you were to look at overnight borrowing rates in china, youd be like watching a tennis match except for going up and down. Some of these rates have been super volatile. Thats something to Pay Attention to. Todays data, look at intraday of ten. First move lower, dollar index, first move was lower. But they reverse. And they reverse rather quickly. One of the reasons is that wages on a month over month basis were up 0. 4, but the number i was imnamerred with is year over year up 2. 9. You have to go all the way back to may of 2009, thats a biggie and a big time reference that weve kind of leaped over. Now, when i talk about whats going on with china and talk about foreign exchange, they are really at the epicenter if you trying to figure out all the other markets. Just to prove it, lets pick the beginning of november. Why . Because tenyear note yields didnt get in the negative territory until november, meaning they settled at 2. 27 in 15. Everything was lower, until november. Now, november 1st you see it on the left there, thats when we started to zoom. Now look at the dollar yuan for the same period. Wow, looks kind of the same. Now look at the dollar index. You really want to know whats correlating and what isnt. And what used to isnt anymore. Lets look at the same chart of bunds. Completely different look. You know, right now bunds are actually up on the week in yield and tens are down about six, bunds up three or four. Now, thats not huge. But it is also correlation readjustment is key and you want to stay on top of it. Carl, back to you. Thanks so much, Rick Santelli in chicago. When we come back, intels Brian Krzanich life from ces in las vegas. Well talk about the future of tech as well as the future of his company and where a Trump Presidency fits into that mix. Dows down 51 points. Dragged down by verizon, walmart, 3m, a lot more with jim too in just a minute. Later today on closing bell, Steve Liesman with exclusive chicago fed president charlie evans. Well talk about that. Dows down 33. Stop trading with jim after a break. Time for cramer and stop trading. I envision throughout the country there are people right now at the ceo level being advised, please, you may get a tweet, how do you respond to the tweet . I take a company like nike the stock has been going up right after they reported that number that some people didnt think it was that good, it seemed to be putting in a bottom, think about under armour, but this is a company where mark parker has to be thinking what happens if we get a tweet on cross border . Because nike is the classic cake u case of the company that brings them in from outside. If i were nike right now, mark parker, very smart man, id be saying whats our plan . Whats our plan . Cnn had a report yesterday that some Tech Companies out west are making sure theres someone ready to respond or at least receive a tweet at 3 30 in the morning west coast time. Well, thats a new position. Yeah. Right . I mean, like cfo, c. O. O. , tweeter, tweet responder. It is absolute necessity. You have a Corporate Communications strategy to deal with that potential. Right . Without a doubt its been a conversation going on for the last few weeks. I think its important everybody has to have an instant and mark parker should be thinking about that and mark parker is a great executive. I think nikes a Terrific Company but they would be a cross Border Company you could hit very easily. Whats on mad tonight . We have a game plan tonight its going to be great because im going to call out all these different banks. Im committed to these bank stocks. I think they are when they move, like if anyone remembers the great 1991 199091 after the first gulf war, it was led by the banks. It could happen again. This bank rallys not done. These are still inexpensivnexpe. Jim, well see you tonight. Everyone have a great weekend. Good luck to everybodys teams. Thank you. Hope the dogs get some manners over the weekend, all right . Oh. I feel for you. Well see you tonight. Mad money 6 00 p. M. When we come back, the countdown to the president elects much anticipated meeting with intelligence officials. Dows down 34. Dont go away. Welcome back to squawk on the street. Im Carl Quintanilla with sara eisen, david faber at post nine of the new york stock exchange. Markets down 26 on this jobs friday trying to make some sense of just which trades are in favor right now. Whether or not this reflation trade continues or whether theres been some softening of the long financial long dollar trade thats been happening since election day. Well watch all of that with oil basically flat this morning. And weve got even more Economic Data now crossing the tape. Lets go to Rick Santelli in chicago with those numbers. Rick. We absolutely do. Thank you very much, sara. Lets look at our november read on factory orders. Down 2. 4, a little worse than expected. It follows an up 2. 8, which was a slight revision. You know, i could find a minus 2. 4 in december of 15, but to find a bigger negative number you have to go to august of 2014 when it was 9. 7. Remember august of 14 because maybe the big number is our final november read on durable goods orders. You know, the preliminary read was minus 4. 6. So you take that and throw it away, kind of like midmichigan reads and it now stands for november minus 4. 5, subtle difference. But whens the last time ive had a number that negative . Same time period which makes sense with factory orders being part of all the durable goods, all part of the same diagram. Thats august of 14. Lets go through some internals, shall we . Extransportation up 0. 6, capital orders, nondefense aircraft, everybodys favorite proxy for business spending, capital spending, it was up 0. 9. That isnt too bad. It was the same as our last look, so it remains the same from the mid read. We can do better, but at least its positive. That was the midpoint read as well. Finally we see as sara pointed out, the dollar zoom, zoom, zooming, rates recouping some of the early buying into selling and everybodys watching the dow. If those two pieces are right, the dow should be pushing positive territory at some point. Carl, back to you. Rick, thanks so much. Rick santelli in chicago. President elect preparing to meet with u. S. Intelligence officials today at trump tower. Our john harwood joins us this morning with what we might be expecting to hear later today. John. Carl, its a fascinating moment. The top representatives of the United States Intelligence Committee are going to walk into that building, meet with the president elect around 12 30. And theyre coming with the feeling that the president elect has shown disrespect for their work, their confidence, their integrity. Heres James Clapper at the Senate Armed Services Committee Hearing yesterday. I think there is an important distinction here between healthy skepticism, which policymakers to include policymaker number one should always have for intelligence. But i think theres a different now, will the president elect come out of that meeting with new respect for their conclusion that russia in fact deliberately hacked the United States election and also for the motive of helping donald trump win the presidency . Donald trump has not accepted that conclusion so far. The hope of the Intelligence Community is that he sings a different tune. There were some tweets this morning that suggests donald trump may have been preparing himself for that possibility. One of the things hes been concerned about is the idea that his victory was dele ygitimizedf he accepts that conclusion that russia helped him win the election. He tweeted this morning that hillary and her supporters were never going to beat him because they lacked the passion of his supporters. Went onto say that it was obvious in the two weeks before the election that he was coming on strong. They could see the handwriting on the wall. Does that indicate that donald trump is going to take solace and try to advance the view that he would have won anyway . Its important to note that in the Senate Hearing yesterday republicans and democrats alike were making a distinction between the conclusion that russia had the desire to impact the election, help donald trump from whether or not they in fact did affect the election. John mccain opened that hearing saying were not questioning the results of the election. If donald trump can get to that place, that would be in the eyes of the Intelligence Community a big step forward because these two sides, the president elect and the Intelligence Community, have got to Work Together once he takes office in a little more than two weeks, carl. John, thats just where i wanted to go. Can you talk a little more about the significance of the president elects statement on this as we await to hear from him after those meetings. What comes next . Im trying to figure out where all of this goes. Well, were going to wait and see if we see the president elect come before cameras this afternoon and patch things up with this community. But just remember, sara, the Intelligence Community of the United States is going to be a lynchpin of Donald Trumps efforts as president to take on isis and to pursue other americans security priorities. Theres no alternative for them working together. The individuals at the top of those agencies will be replaced. James clappers going to retire in a couple of weeks. Were going to have a new director of national intelligence, dan coach, respected former senator from indiana who was named yesterday. Mike pompeo is going to be the transportation director, thats true, but there are thousands of officials beneath that level who the president is going to have to rely on. They have to figure out a way to Work Together. Not to mention the ambitious agenda hes proposing. John, thank you. Well wait for word from trump tower. Thank you. Meantime back to the economy and markets. 156,000 jobs created in the month of december according to latest payrolls report this morning. The last one before the president elect takes office. Joining us now to discuss it is david kelly and diane swonk, u. S. Economics founder and ceo excuse me, d. S. , thank you both for being with us on jobs friday. David kelly, were looking at market reaction, the dow and s p 500 just going back positive. This was the initial gut reaction. Bonds selling off, the dollar stronger, is that the right upshot here do you think from what was a weaker headline number but much better wage growth . Yeah, i dont think this read should change the narrative a lot. I think we should see Interest Rates gradually rise. I think we should see the stock market gradually rise. I think the important thing here is we were a little weak in the payroll number, but we had bad weather. Weve got stronger wage gains, but the key thing is this is an old expansion. In three months its going to be the third longest expansion since 1900. Sort of expansion emeritus here. Think about a professor emeritus, they get some respect for their longevity, but you dont expect much vigor. I dont expect much vigor from this economy. I think it will continue to grow at a moderate pace that should allow the fed to normalize, but i dont think its going to be a boom in any sense later on this year and in 2018. Which perhaps, diane, is why the wage growth is so important. Thats been a missing component. The fact that we did see the biggest uptick in wages since back in 2009, the white house labor secretary thomas perez told the guys last hour that was the most important part of this report. Do you agree . It was. And i think it also was a rebound off of a very weak november number. We are expecting close to a 3 handle on a year over year basis. Remember in january we have another round of wage increases at the minimum wages at the state and local level which will boost wages then. We now have leisure and hospitality wages tied with information sector as the Fastest Growing wage category as minimum wages at the state and local level have hit a critical mass. I think thats very important because what we saw last year was the improvement in median incomes really come from the lowest income stratas. I think and thats something we had not seen in recent years. More broadly, id point out the increases being driven by the Health Care Sector are something we really have to watch given the push in the new congress to repeal obamacare. If they repeal it without a replacement, that could cause uncertainty in a sector which has been a major driver of employment gains in recent years. Diane, everybodys watching wages, but along with this Labor Participation rate, how much slack do you expect there will be in the labor market in six months, in 12 months . You know, thats the great question. Clearly chair yellen would still like to push the limits and reengage more workers. We did see surprisingly a little bit of a tick down as the Unemployment Rate ticked up, the u6 ticked down to 9. 2 , still nowhere near that sort of 7. 9 low that we hit prior to the crisis in 2006. But a move in the right direction. And i think youre going to start to see as we move into 2017 as long as policy doesnt get in the way of the economy continued gradual improvement that whittles away at the sort of those who are disengaged and reengages them a bit as we move forward. But clearly the fed has been disappointed on the ability to boost the Participation Rate by any significant amount. David, do you think that theres a risk of policy getting in the way of the recovery and the stock market climb . Were hearing more in the last 24, 48 hours about border walls and border taxes. Do you have to start factoring that in to your models here for the markets . Yeah, obviously we have to look carefully at this. I think the important thing for the economy is, you know, we need trade. We need trade to grow. And we also need more immigrants. One of the remarkable things about the labor market over the next ten years is about 85 of the new growth in the working age populations going to have to come from immigrants, not from the native born population. We actually need more immigration. And so that does concern me when i see signs of further restrictions on immigration in this country. We need these workers who are almost out of well qualified native born workers. Go ahead, diane. I just wanted to underscore what david said. Weve actually seen a major slowdown in immigration because of the everifications that weve seen it slow down to about 1 million a year. Thats well below what the census projected wed get and its one of the reasons why population growth has now slowed to depression era levels. And i think this is something we have to be very concerned about because we do need to reengage those workers who are disengaged, but we also need immigrant labor in many key sectors. I think that is something thats sort of gotten glossed over and may be in reversing. And i think thats something we have to watch very closely. All right, guys, we will leave it there with the tenyear note sitting just below 2. 40 right now. David kelly and diane swonk. When we come back this morning, the president elect taking on the Auto Industry as you know, a tweet about toyota yesterday. Got the latest on that and the response from some japanese officials. Plus, the former reserve bank of india governor with us live. Well get his take on the fed raising rates of course and this world of a trump era. A lot more squawk on the street ahead in just a minute. Ouyoout s e drblre do nte,®ar, dnk a. Term ryr aninmo tha. A lets get to dominic chu and get a market flash this morning. Good morning, carl. Were watching shares of Fiat Chrysler up about 6 now tracking for sixth straight up day eight out of the last night days its been up. Today 6 on the heels of two upgrades one by analysts at evercore going from sell to buy rating. Also Goldman Sachs putting Fiat Chrysler on conviction buy list as well. Both analysts teams citing the ability for Fiat Chrysler to attain their profitability goal. So those shares certainly tracking and ones to watch in the auto world on this morning here, carl, back to you. Dom, thank you for that. Donald trump yesterday target ing toyota yesterday. We were talking about the tweet yesterday and the reaction in the stock market to shares of toyota. Well, now you have japanese officials in japan overnight saying i wonder if the president elect realizes that toyota has ten factories here in the United States, employs tens of thousands i think 136,000 people here in the United States. When you take all of that together, you have to look at where the president elect trumps tweets, what theyre targeting right now. And theyre almost all explicitly targeting mexican auto production, whether its toyota and plans to build corolla in mexico starting in 2019, the gm cruze, hatchback is made there currently and imported to the u. S. And then you have the ford mexico plant which the Company Announced earlier this week that it is scrapping. All of this brings up the question how many imported vehicles are sold here in the United States, and really which countries send us the most vehicles . Mexico is the largest at 1. 98 million vehicles, close behind is canada at 1. 96 million, and there you have japan at 9 , germany, korea and then a bunch of other countries make up the remaining 5 . Basically youre looking at about 7 million vehicles that are imported. And its not just full vehicles. You got to look at the auto parts that are manufactured overseas. Thats a huge story in terms of auto import values both parts and vehicles, mexico by far is the leader. About half of that from mexico comes in the form of auto parts, and thats why people are focusing on a couple of areas in terms of an impact for stock investors. First of all, it is the parts makers or the parts retailers. Start with auto zone, oriley, advanced auto parts, still unclear how much of their profits might be impacted by foreign auto parts that could ultimately face some type of a tax. And would that make people say im not going to buy that because i have to pay a little bit more . Also remember borg warner, whether its eaton, honeywell, a slew of other parts makers, they have plants in mexico and overplaces overseas as well, but a lot of what is built in mexico, its not just the cars, guys, its the plants that supply the parts to those vehicles as well as to the auto parts retailers here in the United States. Phil, you mentioned the threat that president elect trump tweeted of a border tax if they dont start bringing that production to the u. S. What would that mean for some of the big automakers . Have you done any math . Are the analysts looking at that . There have been some preliminary studies that have been done. Now, one that was done by the center for automotive research, which is this study was funded in part by the Auto Industry, so you got to keep that in mind, their estimate depending on what that tax might be is a loss of about 450,000 vehicles in terms of annual sales. But again, we dont know what the tax might be. We dont know what that might do either to profitability for the automakers or to the prices paid on the lot. One thing is clear, sara, if youre asking people who might be looking at a 19,000 small car to suddenly pay 21,500 for that small car, there are a lot of people who are going to say not doing it. Not doing it. Ill hang onto my car a little bit longer instead of buying a new one. Theres a good tweet this morning, there are 145 million payroll jobs in the United States. 91. 5 of which are not in manufacturing at all. So we have to sort of keep some perspective of just very good point. Where the labor base is in this country, phil. Thanks a lot, our phil lebeau. That seems to be a target nonetheless for the president elect. When we come back, well be joined by the former reserve bank of india governor, his take on america under donald trump and the world as well. The fed raising Interest Rates and a whole lot more. Plus, taking a look at stocks after todays weaker than expected jobs report. But better wage figure. Looks like stocks have turned around from an early miniselloff and are now just positive. At least the dow and s p. Nasdaq leads up almost 0. 25 . Goldman, technology all strong today. Much more ahead on squawk on the street. Welcome back to squawk on the street. Lets send it over to our own Steve Liesman at the American Economic Association Conference in chicago. Sitting down with a very special guest. Take it away, steve. Yeah, david, thanks very much. Im here with raghuram rajan, former chief of bank of india. I want to start brexit, election of donald trump, all of this seems to signal a global, antielite, antiglobalization move on the part of different and separate publics. Right. Is it something that gives you concern for overall Global Growth . Well, it does create political risks around the world. And it creates the risk that there would be antitrade moves, thats problematic. But on the other hand the world is picking up once again at the beginning of the year we are optimistic about Global Growth for 2017. My hope is that better sense prevails. What do you see that makes you optimistic . What data are you looking at . Well, we just had the jobs number today. Yeah. U. S. Jobs looks pretty good. We are pretty close to full employment in the United States, even in the uk, which is interesting. The two areas where we had these events. Right. Are areas with pretty close to full employment now. But i think japan is picking up. The big question about china, whats going to happen there and how it plays out. Most people think that with the Party Congress in october growth is going to be sustained until then. So broadly it looks like the numbers will probably hold up. Europe is also doing reasonably well. Germany the Growth Numbers look good. So, you know, as good as it has been for the last so many years. Now, where we get a sudden burst of growth as you know that comes from the long awaited productive boost which seems to be missing so far. How would you forecast the economy if trade barriers began to be erected . If import tariffs and even with brexit which the uk will lose access to the Single Market union . Absolutely. This is a source of big worry because often the sentiment out there doesnt really understand how important these things are to economic activity. For example, if we focus on manufacturing in the United States and erect barriers to preserve jobs in manufacturing, the biggest exports for the United States are in services. So a lot of stuff could happen in services from other countries stopping the export of services. If we get into a titfortat trade war and given across the world we have elections, politicians need to stand strong during these elections, you may get reactions which are unintended. And well all become poorer as a result. I think my colleagues in new york are going to want to pick up on that macro sufficient in a second. But i want to ask you specifically about india. You just left there. They did this demonetization thing, which is a big long word for saying they took the big bills out of circulation. Was that a good idea . What is your comment on that . I was afraid you would ask this, unfortunately i cant speak about this for a year after leaving office. Is that a rule . Its more selfimposed to give myself a chance to speak. Indias off the table. Indias off the table unfortunately. Sara, are you oh, im going to keep going. Lets pick up on the notion about trade barriers. Is there a way that you can think of to address the concerns that the public has . Its not like people are wrong to have these fears and these concerns. And yet also keep the goods flowing across borders. No, no, absolutely. The point is in large countries we have been sort of a little slow in working with the consequences of trade on real people. So if somebody loses a job, how do you allow them to transition to a different area . Right. The problem of course its both a question of mindset and actual help. Mindset in services, we read in New York Times yesterday lots of jobs in nursing, but will a guy whos a steel worker want to move to nursing . Theres a mindset change that needs to happen. Thats difficult. Second, help. How do you transition . You can keep saying were going to provide you assistance, but the kind of assistance you need starts from counselling. You know, where are the areas you have strengths . How can you be trained . And then provide the actual help on training. Right. Countries like sweden for example have perfected this because over the years theyve been buffeted by trade shocks and theyve learned to adapt. In the u. S. Because its a continental economy, the need to adapt is much less. You sort of sustained it, the steel jobs have gone on, but now finally its caught up with us. Sara has a question back. Thank you, steve. Dr. Rajan, because of some of the factors you were talking about, trade, brexit, trump, the dollar has gotten super strong again. Now at the highest levels in more than a decade. Is it too strong for the world and for the u. S. Economy . Well, it certainly does reflect the fact that the u. S. Is the first out of the trench in some sense in monetary policy. It looks like the u. S. Will be raising rates before the other big Central Banks will. So thats one factor in Dollar Strength. The second is the u. S. Economy is strong. And if in fact we get a fiscal boost, it may run Even Stronger than many people anticipate. Thats another reason for Dollar Strength. But third possible reason for Dollar Strength and this is less understood is if you do impose tariffs, for example on imports, then that is also going to add to Dollar Strength in a certain sense. So its selfdefeating to some extent because you reduce the viability of the exports because of the adjustment of the Exchange Rate when in fact you impose high tariffs. So all these are reasons why i think the dollars stronger. I guess im just wondering at what point does it become destabilizing for Global Economic growth to have currencies going so wild at these levels. Well, eventually it does. I think for now its helpful for japan, helpful for the ecb because, you know, it doesnt put pressure on them to do still more extraordinary accommodation. And it allows them to slowly exit what theyre already doing. The bets many people have is that the ecb will start moving out in 2018. So having the strongest economy large economy in the industrial world start moving out i think is appropriate. It will imply some Dollar Strength. Takes pressure off other Central Banks. My sense is when they start matching the u. S. In their exit, you will see some reversal of this. Dr. Rajan, i noticed by the way sara treated you with more respect than i did. I call you ragu, which is short of your name. Absolutely. Short of your name, monetary versus stimulus. Is there a role here for the fiscal side to come in and does it actually replace the monetary side . Well, if it had come in a year or two ago, it probably would have been better. I think at this point were running close to full employment and its more of a substitution. If fiscal gets stronger take the monetary out. The monetary will have to move a little toward off inflation. We saw high wage growth this jobs number. A lot of people knew you were a smart guy before this happened, but what happened was in 06 and 07 you stood up in front of the elite of the economics world and said you guys have this wrong. That theres risk underneath that you are not seeing. And that turned out to be 100 correct. Right now are you seeing that kind of risk, are there concerns you have for the Global Economy more broadly for things were not looking at . I think youve already highlighted one of the risks, which is the political events. Surprised it took so long to come. The effects of technological change have been with us for 20 years. But the fact that it has now come together across a number of countries, i think its targeted at the wrong thing. Its targeted at globalization, at integration, which are important part of the answers to the other problems we have climate change, aging populations. The only solution we have is through globalization to those. But for technology we have to make the adjustments we talked about. The other big, i think, concern is a shift in growth models. Growth models for emerging markets. China has to change its growth model. From extorts to from exports to imports. But other emerging markets focused on export led growth also have to adjust. And thats a big risk. Dr. Rajan, ragu, thanks for joining us today. Sara, back to you. Thank you. Mr. Leisman, thank you for that interview. Coming up from the American Economic association, steve will have another great interview 3 00 p. M. Eastern time he will be joined by chicago fed president charlie evans. Lets get to sue herera get a news update at this hour. Good morning, sue. Good morning, carl. Good morning everybody. Heres whats happening at this hour. The head of the Senate Foreign Relations Committee says if the u. S. Abruptly rejected the iran nuclear deal, it could create a crisis. But senator bob corker says he didnt expect that approach under the trump administration. He spoke to reporters at a breakfast sponsored by the Christian Science monitor. Russia says its withdrawing its Aircraft Carrier and some other warships from the waters off of syria. This is the first step in drawing down military forces in that country. The admiral and accompanying ships will be the first to leave. Upstate new york is digging out from a major snowfall that brought more than two feet of snow. Burying a small town of co copenhagen and looks like the weather wont get much better for that region. Another one to three feet of snow is expected through the weekend. And the british automaker bentley announcing a new luxury car. Calls continental super sports model the worlds fastest and most powerful luxury fourseater car. Top speed 209 miles per hour. No word yet on its price. All right, thats the news update this hour. Carl, we couldnt get one because we both need five seats. If you have to ask, sue, better not continue with that. Exactly. Thanks, sue. When we come back, president elect trump preparing to get a briefing on the alleged russian hacking. Well talk to former Deputy National security advisor ambassador jim jeffrey about what we expect out of that meeting. Dow down two points. Back in a minute. Fbi director james comey set to head to trump tower this morning. Comey will join the nations top intelligence officials for a classified briefing about what their agencies have concluded about alleged russian hacking and the u. S. President ial election, an issue on which trump has been very consistent. Take a listen. I dont think anybody knows it was russia that broke into the dnc. Shes saying russia, russia, russia. But maybe it was. I mean, it could be russia, but it could also be china, could also be lots of other people, could be somebody sitting on their bed that weighs 400 pounds. She doesnt know if its the russians doing the hacking. Maybe there is no hacking. But they always blame russia. She has no idea you take a stand russia, china or anybody else. She has no idea. I am not quoting myself. I am quoting 17, 17 intelligence do you doubt 17 military and civilian our country has no idea. Joining us this morning former Deputy National security advisor ambassador jim jeffrey. Mr. Ambassador, good to have you. Good morning. Good morning. Thanks for having me on. The Washington Post says this meeting has a tenor of a showdown. How do you think its going to go . Its hard to say. The problem here is that if you accept as i do the Intelligence Communitys conclusions, then the russians tried with considerable skill to infiltrate our electoral process into tilt the election towards donald trump. Thats very hard understandably for him to accept because hes part of having one in the Electoral College and he doesnt want to be challenged, nor would any president. The problem is facts are facts. And to the extent you can have facts in the intelligence business, these facts seem to be beyond challenge at this point. If you were elected though and people were arguing it was due to some foreign intervention, you wouldnt want to hear this either, would you . Well, thats my point. I mean, i can understand up to a certain point why hes concerned. Many of the Intelligence Community Senior Leaders such as john brennan who i know very well worked very closely with president obama so he may feel that there is some bias. He cites the 2003 weapons of mass destruction in iraq case. Nonetheless we know long before any of this happened that russia was using similar strategies with similar what the Intelligence Community calls fingerprints on efforts to influence political outcomes throughout europe. Weve seen this again and again and again. And what the Intelligence Community does is it looks at the pattern, it looks at the intel and sees the same thing only this time directed at us. Thats very troubling from a diplomatic and political and National Security standpoint, not just for political or intelligence. On the other hand, to the point, ambassador, you know, john harwood has made the point that the president elect is going to have to oversee these agencies and the thousands of staff that work for them that he did not appoint. Hes going to have to fight isis and all sorts of geopolitical conflicts. So what does that look like if he continues to doubt these agencies findings . Let me be clear, there is no National Security without an effective intelligence service. And that presupposes a Good Relationship with the National Leadership beginning with the commander in chief, the president. This has to be fixed and it has to be fixed quickly or our entire National Security will be in danger. And our decisions will be placed in question. How can the president send american troops into combat based on intelligence, and it always is, if a president doesnt believe that these people really know what theyre doing or that they may be politically bias. This is really very, very worrisome. Yeah, on that point though the president elect does seem to be making the point, again its hard to know because we havent heard him speak fully on this matter, that there is political bias in the Intelligence Community. Im curious, has that been your experience in the past . Is that a legitimate concern on his part . There is not a political bias in the sense of im a democrat, im a republican. What there is is often because theres never 100 surety even when you get with high confidence, which is a term of art that the Intelligence Communitys now doing is now using on the russian hacks. And there is sometimes group think among these 17 agencies if one agency that is known to be good in an area like Cyber Intelligence takes a position, the rest often fall into line. But nonetheless there are tremendous checks and balances, particularly since 2003. I absolutely believe that the Intelligence Community is 100 sure that what theyre saying is what they really think is the truth. And im 99. 9 certain at this point that it is the truth. What happens a year or two down the road if trump continues to disparage the community, as he has, and then later wants to or has to sell the public on some Foreign Policy measures based on intelligence, what credibility will that have . Thats my point. Now, the good news is trump has surrounded himself with Extraordinary National figures. I know four of them including dan coates who was just named to be the head of national intelligence. These are extraordinary leaders and theyll understand the problem. The second thing is were not dealing with president trump, were dealing with president elect trump. And were dealing with obviously a very sensitive issue to what degree the russians tried to tilt the election towards mr. Trump. Youre going to get a special reaction to that. He will have time to fix this in terms of the overall relationship with the Intelligence Community, but hes got to get beyond this. And at some point hes got to accommodate himself to the Intelligence Communitys position or this problem will just fester. And just a final question, does the structure of management, does the office of the dni need to go away as some suggested this week . There are things that the dni does, such as coordinate intelligence on many subjects, serve as a balance to the 800pound gorilla, which is the cia, and serve as the mothership for very, very effective institutions like the National Counterterrorism center that we really need in one or another form. What form that takes that is a legitimate thing for a new president to decide. Mr. Ambassador, we appreciate your insight today. Important day. Well see what happens this afternoon. Thanks so much. Thank you. Ambassador jim jeffrey. When we come back, the former chief economist at the president s counsel of economic advisors doug holtzeken. And more theaters in the u. S. , ceo of imax going to join squawk alley at 11 00 a. M. A lot more ahead. Stay with us. Nenestinppen ta tsanng al . Nohaportrton aritr ta its been a tough week for the retailers, but should investors use the selloff as a buying opportunity . Find out on tradingnation. Cnbc. Com. More squawk on the street coming up. The dows down about 12 points here. S p is flat. Lets send it to Rick Santelli in chicago with the santelli exchange. Good morning, rick. Good morning, thank you, sara. Like to welcome my guest doug holtzeakin. Thanks for taking the time. Thank you. In terms of job i found revisions more interesting as you said when we talked before we came on, it was all about wages, month over month up 0. 4, year over year best since 09 up 2. 9. Why dont you go into those two issues for me, doug. This was a boring report except for the average Hourly Earnings, which if you look at the november to december change, thats up 4. 7 in an annualized rate. We havent seen anything like that in the recovery. And certainly thats been the missing component in the recovery. The vast majority of americans are at work. What they need is a raise. And this is the first glimmer that substantial wage increases might be on the horizon. But not everybody thinks its a glimmer. There was a lot of commentary today that i was a part of as this number was coming out with the notion, oh, my god, were going to run out of workers that have skills for the jobs. Well, my observation, a, is you get a bit of a wage bump, which isnt totally horrible. But the other issue, doug, i cant swol low is the people not in the labor force jumped by 685 today, 685,000, the number now stands at 95 million, youre going to fell me almost 96 Million People are idle, they can work but theyre off the system and none of them are qualified for jobs and were going to run out of people if we get growth . Do you believe that . I dont believe that. I dont think we need to worry about that. But heres another way to think about it, rick, which is lets do the tax reform, lets do the regulation reforms, lets get this economy growing at say 3 or even faster, that would be fantastic. If we run out of workers, then ill be wrong. But lets run the experiment try rather than saying we dont really want to try to grow more rapidly. I think thats a terrible way to frame the problem. The other thing we need to think about is over the past eight years we have fundamentally shifted the calculation of work versus not work. The Affordable Care act and other social safe nets give people access to resources without working. If you shift that those incentives, youre going to get the result weve got, which is a lot of people out of work. Now, lets be fair here, doug. Okay. Secretary perez on his last hurrah on our channel today mentioned an issue related to this. He said and obviously in the context of all the ire with the Affordable Care act obamacare being repealed, he said, yeah, and weve created a lot of jobs contrary to the notion that the Affordable Care act was going to hurt jobs. In the context of your comments and his, try to square that for me, will you . Two things in that. First, the question is how many more jobs or higher wages you would have gotten without the Affordable Care act. Thats the real question. And just saying we created jobs doesnt answer that. The second is, people forget that economies recover from recessions. And we were always going to get the jobs back. The question was how fast would they come back and at what wages would people be working. I think the real criticism is on the latter point which is weve had low productivity, weve had low wage growth, we have low top line growth as a result. We need to solve that problem. Creating jobs is no longer the issue. Its about having those jobs reward the American People and give them the increases in the standard of living that weve historically been able to produce. You know, real quick, were almost out of time. Ive always said its jobs, jobs, jobs. The president has said that as well. But i like your point because weve gotten jobs, but it mub the quality or whether full or part time because were not getting growth in productivity. Your final comment how quickly can productivity ramp up if new policies pass as the market has a feeling they may . Quickly. You could get a quick bump by doing tax reform. Getting a lot of capital invested, which has been missing in the recovery. And then over the long term there are skills issues, innovation issues and we can take care of those, but that will be slower. Excellent. Doug holtzeakin, thank you for your thoughts today on todays jobs report. Back to you. Thank you very much, Rick Santelli. We get news out of the trump transition team. Next trump transition team. Next weeks trump News Conference will be at 11 00 a. M. Eastern time on wednesday in midtown manhattan. We do expect it, guys, to cover potential conflicts of interest, perhaps russia intelligence, aca, tax policy, the wall and mexico. Who knows where it could go, but 11 00 a. M. Eastern time. An anticipated conference after the primary communication has been twitter. Now lets send it out to jon fortt at ces in las vegas to find out whats next on squawk alley. Good morning, jon. Well, good morning, sara. Well have intels ceo right here. Intel talking a lot about Virtual Reality and more. The pc markets a big topic, and of course, he was in that meeting with the president elect weeks ago. More than that to cover with him as well and a lot more from ces when squawk alley comes right back. Duy. Buiewhrothte ys duy. Buiewhrothte ys ines donald trump putting Border Security back in the headlines this morning, tweeting, the Dishonest Media does not report that any money spent on building the great wall will be paid back by mexico later. Our kay rogers is at the border in el paso, texas. Shes got a look at what will happen to jobs in the southwest under a trump administration. Kate . Reporter hey there, david. Thats right. Well, u. S. Customs and Border Protection reluctant to comment on what a Donald Trump Administration might mean for the agency overall. But wall or no wall, they are actively recruiting to fill around 1,700 agent positions. The job, though, is challenging and dangerous. I spent the day at the Border Patrol academy in new mexico to experience the rigorous training process that all new hires go through. Think youve got what it takes to become a Border Patrol agent . At the Border Patrol academy, trainees are showing theyre up for the challenge, focusing on the complexity and dangers of the job. When they have to make splitsecond decisions to save their lives, to save someone elses life, or to save their partners life, we want them to get it right. Reporter trainees learn law and how to process legal and undocumented border crossers. They practice arrest techniques and go through rigorous fitness training. They also learn spanish to be fluent by the time they graduate and train for driving off road to be ready for the southern borders harsh terrain. They also get combat training. Trap it. Trap it. Extend the right hand to the neck. Give it to him. Harder, harder. Now throw him. Now throw him. Reporter and have to be ready to fight in the dark. Good. Good. Good. Now throw to your right. Throw to your right. Step back. Excellent reporter water safety is also a must, including climbing jacobs ladder. You can do it youre right there reporter dangling 25 feet in the air and being ready to take the plunge. If you make it through that 117day training process, youll be stationed at one of the agencys 20 sectors nationwide, most likely along the southwest border. New agent pay begins at around 50,000, which they receive while going through the academy. And guys, offroading was a lot of fun, but i think ill stick with my day job. Back to you. I dont know. We continue to be impressed by you, kate. David just called you our action reporter. I dont think this is the first time reporter i love that i think shes got a job on the Border Patrol if she wants it. Yeah, and will like it. Reporter thanks, guys. It was a lot of fun. Tough lady. Kate rogers, thank you very much. As we head to break here, lets take a quick look at stocks at this hour. Its been sort of a mixed trading picture. Weve got positive action again on the dow and the s p. The nasdaq continues to outperform. Its up about 0. 4. Much more ahead. Stay with us. T t its time for the your business entrepreneurs of the week. 3d printing is changing how business is done. And the owners of hv 3d works in harmony, pennsylvania, are helping the car world get up to speed. Theyre revving up ways to apply this technology to the Auto Industry and leaving their competition in the dust. For more, watch your business sunday mornings at 7 30 on msnbc. Brought you by American Express open. Visit openforum. Com for ideas to grow your business. Weve got breaking news right now out of boeing. Phil lebeau has that for us. Phil . Sara, we have annual delivery and order numbers from being. Starting with orders, because there was speculation from traders that boeing would be light of expectations. Came in with 668 orders. That is down from 2015 but much higher than what many traders were expecting. Also on deliveries, 748 planes delivered last year by boeing, narrowbody 490, widebody 258. Guys, those are the delivery and order numbers for 2016 from boeing. And the stock reaction is flat. Phil lebeau, thank you. Much like the Broader Market right now, which is flat. Continued outperformance from tech in the nasdaq. Thats going to do it for us here on squawk on the street. Are have a great weekend. Carl, to you for squawk alley. Good morning. 8 00 a. M. At intels headquarters in santa clara, california, 11 00 a. M. On wall street, and squawk alley is live. Out here in the fields i fought for my meals