And you can see we are up ever so slightly in france and generally across the board for the major european markets. The tenyear note yield yesterday crept above 2. 5. And this morning is hanging right in there at 2. 53. You can see crude oil also up a little less than 1 . Lets get to our roadmap this morning. And it starts with debating the dow 20,000. Is it behind us . And were going to drill down into the dow 30 stocks. Well have more on caterpillar, dupont, j. P. Morgan, goldman. Yeah, i know, dont look at me like that. Who knew . Man, ive been up since 3 30, im ready to go. Whats wrong with you . Youre slacking. Another busy day for earnings, ford, fiat, comcast and interview with Andrew Liveris on his recent meetings in the white house. Speaking of dow, Johnson Johnson makes a 30 billion cash acquisition this morning. Its actilion. A large cross border deal and we will take a closer look at it as we should. Could it be a faber . I think the whole show today is kind of my reporting and your repo reporting. Thats fair enough. You saw it happen here on squawk on the street, the dow surpassed 20,000 right at the open of trading yesterday before closing above that level as stocks aim for more record highs today. Dow component caterpillar posted Quarterly Earnings above estimates than analysts who follow the company had. Revenues a bit below consensus. Youve been talking a lot about cat, jim. I think we noted recent yearly highs, multiyear highs in the stock. I think they actually lowered the bar a little bit, which is perfect for new ceo coming in. O oebl leaving. This is interesting, construction in the u. S. Still not great. Why . Used equipment. Who sells a lot of used equipment . Who sells it . Look at a stock called United Rentals today, uri, thats going to be one of the biggest gainers in the market. Uri versus c. A. T. And whos going to win . Right now uri is winning and uri is also a tremendous play on trump because you need their equipment to build pipelines. What about building a wall . Would caterpillar benefit from that . No, uri would much more likely unless unless President Trump put through a ruling which said that you have to buy american to work on the wall rule which then the rule would favor cat over komatsu, which is their immortal enemy. They hate each other. Its not like yale and harvard, david. Its not . Why . Its not cleollegial at all between those two. More like Oakland Raiders in the old days sf. Speaking of hate, and i dont want to use that word here, but tensions between mexico and the u. S. Boiling. Are boiling. And it is worth noting at this point at the end of squawk box there, we got the president tweeting again. And things dont seem to be going particularly well in terms of that potential meeting next week. U. S. Has a 60 billion trade deficit with mexico. Been a onesided deal. If mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting. Hes speaking specifically about an upcoming meeting that was expected with president Enrique Pena Nieto that does not appear at this point likely to happen. I mention it because of the wall, because of caterpillar, because its an Important News story thats developing right now. Many of the American Business people i speak to say its far more complicated than this, that they make some stuff of materials in mexico. Basically that mexico and the United States have been the same since nafta, you make your car engine here, maybe carburetor there, body here, all interchangeable parts very hard to unwind. This would force an unwind because what would happen is this is the beginning of undoing nafta. Its not about the wall. I mean the walls a campaign promise. Right. And theres 400 miles the Border Control people tell me theres 400 miles of which you could put a 12 to 13 foot wall and it would be meaningful. Okay. Whats more important is the peso. Because, yes, labor is 2. 50 an hour versus 22. 50 for the auto worker. Remember they give you free health care. And its quite good health care, the mexican government. Thats a big positive, but david, what really matters is the peso differential which has gotten worse since trumps been bashing mexico. So theres a little bit of a vicious circle going down there, but yes, nafta has to be readjusted. It just has to. And youve been saying that for a long time. It made a lot of sense 41. I dont think either party would have approved nafta at 21. On the peso. And the peso by the way wiped out the gains against the dollar. Greg hayes did tell me it cost two cents not to move those jobs. Two cents a share to earnings. Right. But what you have to understand is it would have made a nice bump, you would have seen it if youd moved a lot of these that are very mechanical jobs that are going to be that we automated. But i have to point out people understand currency is the issue all over the globe. Its what we have not dealt with correctly as a country. All right. Before we get to j j, quickly, jim, back to the broader market. Yes. To the dow. Yeah. The s p is the broader market. The dow is only 30 stocks. And as ive pointed out so many times its historically means absolutely nothing. But people like to still focus on it. Journal today runs a big story about, well, its not clear theres so much supporting evidence that the market that things are that great. I mean, we have trade wars in the offing, we have tensions rising. But we have earnings. I think that one theres a lot of shorthand work thats done that i think thats actually lacking in rigor. You have to read the calls. Lets take a 3m. They had one division that wasnt so good and it was not clear whether it was at the retail level or consumer business that they have. They were making the wrong stuff. Retail level the channel was retail had to sell more scotch tape, lets use a real short here. 3m stock goes down. Stock is not expensive. J. P. Morgan, not expensive. Ibm, not expensive. Proctor gamble, not expensive. Many of these companies that were dealing with historically not expensive. Now, this is the dow. I have a whole list of companies that we could say are very expensive including service now, which is on tonight. Youll see that stock up very big. But the dow stocks almost uniquely have very low multiples. So i can pick on a lot of stocks in the s p. But i dont want to pick on the dow stocks because theyre just not expensive. Historically. And thats what matters. I mean, its very easy to naval gaze, but when you sit there and read the Conference Call you realize its not an expensive stock, j. P. Morgan perhaps being the cheapest stock in the dow. Whats the multiple on j. P. Morgan now . 13. 5. And historically compares to well, you could go back in time. I know. How far do you want to go back . I think you have to go back before the carnage. And before the carnage i think you could see pretty much near market multiple. Will probably never revisit in terms of bank assets. I disagree. Come on. I think its going to get a premium im talking more about the bubble ishs nature thats never going to happen. I think it deserves i mean, you had Financial Services contributing enormous part of overall s p earnings. David, the consolidation that was allowed that the Founding Fathers would have been very unhappy about during the period of the great grab of banks has made j. P. Morgan into a juggernaut that no one would have ever thought could be. That is true. When you raise rates david, the deposit base were talking about trillions of dollars in deposits. I know we are. I started 30 years ago covering banking. When i think about all the banks i covered that are now part of j. P. Morgan i hope theyve integrated. Jamie dimon can do nothing and they raise rates and he can look like a genius. Of course everyone thinks he looks like a genius anyway. I want to get to another dow component and thats j j, jim, because it did agree finally to acquire that Swiss Technology actelion, adds treatments for high Blood Pressure in the lungs to j js portfolio of drugs. Their portfolio at actelion growing quickly, a 20 plus grower. And this is a story that we have seen really . Charter. I know verizon needs to do something. Theres some news coming out from dow jones on verizon. I was just going to talk about j j. Let me finish j j i think it was good and quarter was good. How about verizon . Theyre exploring a conversation with charter. This is something ive been exploring as a possibility for some time. If you recall Lowell Mcadam a couple months ago in answer to a question sort of indicated there was some industrial logic to this possibility. I really want to see more on this because its very much unclear to me that there have been actual talks between these two companies. And sometimes we can see stories in which one company is thinking about doing something but hasnt necessarily moved to do something on it. I dont know. This is something ive been working on a bit but certainly was not verizon has had the worst quarter of any of the dow stocks. John legere was right, verizon was dumber. At ts call wasnt as bad. Verizon had a poor quarter. The question is do they have an overburden product, unfortunately . Can they go to unlimited data plan the way some of their competitors have. They were asked about and said we have one do they have enough spectrum to do it. Thats one reason why average user per revenue was down. That was a decline for the stock the other day. Well certainly be following this a bit today. As you might imagine, jim, i have been. Oftentimes flst not enough for me to feel like theres actually something worth reporting. So you think this may just be kind of ki mer kal. I dont know. I have talked about this, verizon potential in a position to do a large deal this year, charters name has come up. Some key terms in terms of delusion for verizon, it would be very large. Youre talking multiple disparity there. That would be large. How much cash could they use . Charter is a large shareholder in john malones liberty. And then the advent of 5g. Many say in fact charter would offer an opportunity for them because they have some of the plant that you need, the capillarity they call it, imagine capillaries but closer to the home, but at the same time those homes are on charter already. Right. Interesting components to this. One thing i will tell you is as opposed to at t which has been pursuing a strategy as we know, directv and now time warner of expanding in content and content offerings, verizon has been expected to focus much more on expanding its footprint in terms of infrastructure. Fios we see these very incremental little numbers for fios. This would change that. I see charter trading up dramatically. I dont want to short i feel like were short tripping the j j. You might want to spin charter i mean fios and the water line business and merge with charter. David, that would give me a higher multiple, but i dont know if id get that big dividend. I know. Jim, the one thing i will say as we enter this year and we see ajai theres potential for so many deals here in this area, whether it is sprint and tmobile, whether our Parent Company and comcast which reported earnings which looked to be pretty good. But now the stock is down. Now the stock is down. A good return in capital shareholders of comcast is involved. There are going to be some big potential things happening this year. This might be one of them. Its not clear to me. Right. Its been around for a little bit. But i wouldnt necessarily bank on it. Well see. Its going to be major focus because of how bad we thought verizon was. What is charter going to want . In terms of a price i mean, come on, man. I would say by the way just to go back for a second on j j, a lot of people felt j js quarter was weak. I completely dispute that. They tried to find a line, give me a break. Quarter was good problem is they couldnt give guidance because they hadnt announced this acquisition. The acquisition is additive. Lets hope that this drug that they have can expand for hypertension is an area where theyre all patent. 600,000 people have died needle needlessly, so maybe j j has Something Interesting to head off the plaque dispur pursbursa throughout your body so makes sure you have hypertension translates immediately into death or very big weakness. I like the acquisition. I dont like how much they paid. They paid a big number. But theres not that Many Companies out there to buy. And people also trying to figure out what is that stub, that r d company that will be left spun to shareholders that j j will own 16 of with an option to buy another 16 , whats that worth . Man, we got a lot this morning. That came at us really i was really bummed. I really thought look, i talk to john legere hes back and forth with me on twitter every day. Its very rare johns a tad outspoken. Yeah. This time he was a little too bullish on verizon coming in. I know. I will tell you based on the reporting ive done on this possibility, its got to be very, very early days. We got no comment from charter. Ill make some more phone calls. You want to get off the desk and ill handle the show . No, ill stay right here with you. Ive forgotten more than most of them know about this stuff. Holy cow, that is certain bragging statement. When we come back, ceo Andrew Liveris as his Company Looks to complete merger with dow component dupont. I wonder what he has to say. Dow chemical reporting better than expected earnings this very morning. A few moments ago david faber and i had a chance to speak exclusively with dow ceo Andrew Liveris who also met at the White House Monday with President Trump. Asked him a couple questions about his conversations about the dowdupont merger versus keeping American Manufacturing competitive. Heres what he told me. Whats good for dow and manufacturing in this country is good, i hope, for the country. Thats what President Trump feels and believes. And obviously this unique opportunity that dow has and i have as do the other companies to be around the table to tackle the topic of competitiveness across the pillars of competitiveness, tax, regulatory, trade, skilled workforce, this is a very unique opportunity for dow. You know, when you look at our results for the quarter and the year, records, we are portfolio for all seasons, weve worked hard for this moment, jim. We are at a point after 17 straight quarters of Earnings Growth 18 per year growth for the last four years, were entering 17 with momentum. And if the u. S. Economy keeps picking up momentum through the promise of Structural Reforms that the president is promising, and in fact already starting to enact with his executive orders, this has to be good for our company. And frankly with twothirds of our r d and manufacturing presence here in this country as a major exporter, i love the opportunity to sit elbowtoelbow with the president and my colleagues and say heres the things were worrying about, here are the things we have to do to be competitive, heres how to do fair trade. All the topics that weve had already. I think its an exciting moment for dow and for frankly the country. Okay. Now, andrew, youre in a very unique position. You are taking advantage of americas bountiful natural gas. Actually, youre probably the biggest advantage taker of the natural gas because youve been building factories, youve been making it so that you recognize how great it is to be a Natural Resource strong country. At the same time youre doing a deal with ed breen from dupont. If you look at his numbers for dupont, hes been able to grow revenues but also cut costs. Including people. What do you do in a situation where you are buying american, but because of the merger you may not be hiring american. You may have to layoff american. Well, look, the deal and were confident the deal will close in the first half like ed said on his call, were working with the regulatorregulators, t whole thesis around innovation that the european regulators are very, very much focused in on. Why are they focused in on that . Theyre focused in on that because they want to see growth. They dont want to see just the cost cutting of why a deal comes together in the first place. So for sure when you put two Big Companies like this together that have been around 300 years between them, the front end of this will result in back office and, you know, nonessential production, r d, marketing cost cutting. But the promise of it, and frankly the excitement of it is the ag company will grow ag and grow jobs, grow as an innovator. The Materials Company will grow jobs in the materials sector in packaging, infrastructure, transportation. This is a growth story. Finally, i know you for years. This has taken on a negative tone, but youre a globalist, somebody in favor of free trade. Do you worry were headed down a protectionist road . So as you know i wrote a book, david, called making it in america, one of those chapters was dedicated to the topic of fair trade. Not free trade. I dont believe in unbalanced trade. And we will always be for movement of goods on a large basis as exporter in this country but well invest in other countries as they grow their markets. I was in saudi arabia this week, were completing our 20 billion investment in saudi arabia to enable goods to flow from there into asia and parts nearby. So we Global Companies are of course for trade. But fair trade. And i believe we have an opportunity with President Trump to put in place the rules that level the playing field, not just on tariffs which is the obvious one and everyone hones in on that. But nontariff Tariff Barriers and Investment Policies. We have unlevel playing fields in our Investment Policies around the field where u. S. Co