Watch bonds. Wholesale prices top on higher gasoline. Road map begins with the Market Making record highs. Fed chair yellen on the hill for public testimony. Plus, how will consolidation play out in the industry under a Trump Administration . Mnuchin is confirmed as the treasury secretary. National security adviser Michael Flynn resigns. Stocks are looking for more history. One day after the indexes hit highs, also, back up to a 7 billion valuation. In an hour, fed chair yellen will deliver her testimony on the economy. She goes before the Senate Banking community. Well bring you live coverage beginning at 10 00 a. M. Eastern time. In january, she said it would be unwise to wait too long before you excaccelerate the hike cycl. Is that what you expect to hear today . Look, i think she is to definitely wait to see how much of the tripod this repatriation, the lower Corporate Taxes, deregulation comes into play, but i am a believer, and have said since the beginning, a march rate hike has to be on the table because of so much global growth. I mean the United States is one of the many engines that is taking off here. To be able to just say, listen, we have to wait to hear what congress does would be a mistake on the fed. Im looking for better than 50 50 march but i dont think shell put it out that way. Theres been some discussion about these three vacancies were going to expect on the board of governors. Cray can vacancies filled by the president , of course. And whether or not it renders her comments from here on out, not mute, but they wont resonate the way they used to, because of the dynamics of the fed will change. How fair is that . Well, i dont think it is fair. I think in the end, the chair is going to be able to speak for everybody. I dont think there are going to be pop offs appointed to the fed. I do think what we know from multiple interviews with trump before he became president is he thinks rates are too low. I think he approaches it from a real estate perspective. Saying, i see a lot of lending to build and, therefore, rates are too low. In the end, this is ive not seen a lot of disrespect coming out of the trump people for any institution when it comes to the point of view of appointments. I dont see tillerson saying, the state department is a bunch of jokers. Mnuchin isnt saying, i dont like how treasury works. I think this is going to be business as usual, no matter who he appoints. You have that. Obviously, the conversation will eventually turn beyond march to stimulus, fed oversight, fin regs, the dollar, which according to a new survey today, jim, is the most crowded trade with u. S. Equities considered the most overvalued relative to the rest of the world. Third highest level in 15 years. U. S. Equities have not kept pace with the rest of the world. When i hear that, i say, wait a second, would you tell me which of the u. S. Equities are overvalued . Point to them. You want to look at the indexes . The russell caught up. Look at the largest cap stocks. Apple is selling 13 times earnings. Does that startle you . What are we going to do, decide we think exxon is too high versus oil . Were behind in the rest of the world. We should think about the rest of the world more. We should be thinking about things like brick. Brazil coming back, according to many executives i talk to. Russia is very strong. India making a comeback. China, just fine. We have europe good. I come back and say, please tell me where the overvaluation is versus the rest of the world, which is playing much stronger hand than we are. You think thats the case even after the earning season, which more or less is now concluded, jim . There are those who believe we are pulling forward to a certain extent market valuations. The benefits accruing from tax reform. If we dont get it, and im talking beyond just repatriation, that stocks were overvalued, you dont agree . No. I mean, i look at the industrials. Yes, i see some companies yesterday, we had an amazing number of new highs, both in the financials and the industrials. But i come back and say, yeah, could you say that honey well is overvalued . Yes. Ibm and apple, they havent really moved that much versus the historics. The financials, if we get the rate hike, the financials will look cheap. I am stuck with the idea that even fang doesnt seem expensi e expensive. Facebook and amazon can be expensive but not relative to ideas. Apple, not expensive, unless you believe the ad market is going to collapse or samsung is going to roar back. We need more evidence that stocks are expensive based on earnings. The earning season, with the exception of retail, and we still have more retailers to come, pretty strong. Yeah. Retail is going to be making the case on the border tax adjustme adjustment, i guess, carl, as well. The reports out of reuters that the retail ceos are going to go to the hill sometime this week. They wont give a lot of clarity on the time of the meeting. Reports theyll meet with target, best buy, a couple mentioned, as they try to coordinate their lobbying efforts. I think about the border tax and amazon. By the way, out here, what is the company that is talked about constantly thats not here is amazon . Do you know anyone at amazon . Amazon is this great black box that takes it out of everybody. You lump in the border tax and amazon, and you have the least investable group ive come across in years. Thats interesting point. Amazon is so powerful. They are so powerful, jim. The various things they have going on, whether its hundreds if not a thousand people working on artificial intelligence, which we dont talk about as much with well, we do have an extent. People are aware of alexa. The latest patent, carl, for dropping packages from the sky. To be fair, they file for a lot of patents. Right, they do. The one reported on today, they diagram this drone that will remain in flight and parachute goods to you. Jim . Look, drones, i think, are going to be more mainstream. What i hear out here, there really isnt a lot of recognition that amazon is so far above everybody else. I heard someone talking about an amazon air force. We should outsource defense to the guys. Amazon is tired of fedex and ups, not willing to spend enough to have excess capacity so theyll have excess capacity. If amazon does what it says itll do, theyll have the amazon economy and the rest of the economy. If you read the papers, you think the amazon economy is going to have to prevail. Moving on, guys, worth mentioning that aetna and humanity called off the merger, after a court sided with the Justice Department which objected to the combination. Aetna ceo saying, quote, the current environment makes it too challenging to pursue the transaction. Interesting use of the current economy. Some would have thought that means a Trump Administration. Humanity receives a breakup fee, 1 billion. 630 million after taxes. That amounts to about 4. 23 a share. Not a big surprise here, of course, that they would call off their attempts to appeal the decision in the court. Anthem and cigna, similarly, remember, were rejected by the court recently. Right now, theyre trying to get an expedited appeal of that decision to block the acquisition of cigna by anthem. Theyre not expected to get that. Many thing anthem is trying to extend it as long as it can to perhaps get cigna to accept a lower number than the 1. 85 billion it is owed before taxes when that deal breaks. But it will. Highly unlikely, many believe, are they going to get anywhere in terms of an appeal there. Interesting when you look at the overall landscape, with all the big insurers, aetna, humanity, cigna, anthem, all independent. U and h still the largest. They have been piling up cash, not to mention the break fees that humanity and cigna are going to get, but simply because they generate so much cash flow and havent been returning it to shareholders because theyve been in deals. They havent been buying back stock. There is over capitalization in the industry. Jim, there is an expectation once you figure out the repeal replace of the aca, at the very least, humanity, not right away, but at some point, lets call it in the next 18 months, could find itself on the end of another bid from either cigna or anthem. U and h pulled away from the companies, but theyre a lower multiple than humana. I dont know whatll happen but i agree the cash piled up. These are companies that, in the end, corporations have to play against each other. These are the bills that are wrecking a lot of the earnings per share. Particularly, for the small to midsized Business People who desperately need a United Health and need to pit a humana versus an anthem, whatever. It is not great for humana. It is not great for them. Youre right, they have a lot of cash and i think someone can take a run at them. I dont want to bet against any of the companies. I like u and h so much more. They have a good quarter. Carl, if you are a company and there is National Accounts at issue, and the department of justice comes after you, it is not a great track record so far. Anthem and cigna went down. They were dealing with this National Accounts issue and whether it would be anticompetitive. Remember, sysco and u. S. Foods, blocked. Speaking of the doj, what a morning in washington. The Senate ConfirmedSteven Mnuchin as treasury secretary. That vote took place in the early evening. He won 53 47 margin. That was the beginning of an eventful evening for the trump white house. National security adviser mike flynn resigned after conflicting statements about his contacts with russian officials. Obviously, jim, it is all over the morning shows. Today, Kellyanne Conway telling matt lauer this became an unsustainable situation. Wouldnt say who else in the white house knew this information from doj a few weeks ago. For our purposes, how much does it complicate twhat the market s betting on . There is a sense that people have one foot out the door. This is the last straw. The last straw just doesnt compute versus what i see going on out here with companies, which is, there is a huge disconnect. Yes, theres a lot of talk about visas. Everything else is, why are you so focused on that stuff . Who cares about flynn . I think you care about flynn if youre figuring out whether the disarray in the white house can translate to anything slowing with the legislation. David, we talk all the time about this. Flynn is part of the roadblock to getting it so we have Corporate Tax reform. Whatever makes it so that the discourse is makes it so the tax reform is pushed back, makes it so we have to expect that some people will sell stocks, betting were not going to get anything in 2017. Right. I mean, each week, listen, the fact the National Security adviser resigns, three weeks, right . Were not talking about a very long tenure, in terms of the Trump Administration, jim. Yeah, but that is the question investors have. Does this bleed over into the inability to direct sort of a real march toward tax reform thats needed, potentially from the white house, or can they just play along and watch as ryan and kevin brady sort of work it through the house and the senate . Well, i dont know. I was a judge for the apprentice for a bunch of years, david. Three weeks wasnt too long. There were people who exited in two weeks. Yeah. Although it is interesting, carl, that they knew about this for a month and it is not clear exactly what changed with regard to flynn. If they knew that hem misrepresented the contents of the nature other than the pressure from the Washington Post and other media sources. I mean the fake media. And the failing media won this thing. Phenomenal on taxes in a few weeks. If a few weeks come and go and there is nothing, do you begin to worry . I think that President Trump uniquely is able to have a conference right now where he is going to talk about the tremendous tax reform. Were going to forget about flynn. We seem to have a very short memory about everything that goes wrong, provided the president comes out with a group of Corporate Leaders and talks about a fabulous tax reform. Then we forget it and think, it is going to happen. Let me get in some disney. Disney is going to start making more money. I do point out that flynn will be todays discussion. Things are so rapid in washington, that there will be something tomorrow that will make it so we forget flynn. I dont know how that is possible. Any other administration, wed be talking about flynn for a month. It is true. That is a question we cannot answer. Whether this story will have legs or whether, as you say, well forget and move on in a few days or weeks. When we come back, what intel ceo told jim about meeting and working with the president. Take another look at the premarket. S p and nasdaq are going on five days higher. The nasdaq added more points so far this year than it added in all of 2016. Back in a minute. I love how usaa gives me the peace of mind and the security just like the marines did. At one point, i did change to a Different Company with car insurance, and i was not happy with the customer service. 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The tax plan that the administration is putting forward would drastically reduce that. Now, theres a lot of questions. So were betting on that tax plan coming into fruition. That was intel ceok krzanich talking to jim last night. Interesting, another defender of the white house, saying ibm leaders have been directed with every president since woodrow wilson. I have to tell you that krzanich said 80 of his employees responded positivity. Someone immediately said, how about 20 . 20 were against it. I have to tell you, 80 of people in favor of anything is amazing these days, considering the incredible, tense relationship we have between the two different camps. The old hillary camp and the new President Trump camp. Look, i think that the Business Leaders are coming around to the idea that if theyre at the table, they do better, except for in certain cases, where their employees hate the li guy much for whatever reason. They think it is wrong. Krzanich said it is worth speaking to the president to lobby him for tax reform. Did it hurt he is doing the chandler, arizona, plan . Absolutely not. Was it going to be done if it werent for the president . He made it clear that it was a chance that it wouldnt get done. I do not minimize what he is doing. I think he is actually in the top of his game and the story is better than the stock. Yeah, i think one thing to note here, not to correct mr. Rkzanr krzanich, but there is not a tax plan from the administration. The only one that exists is the blueprint from house ways and means. To say the administrations tax plan, we dont know where it is going to be or where theyll come down, other than what was on candidate Donald Trumps website about taxes, which obviously didnt have a lot to it. Beyond the different rates, particularly dealing with individual rates. Thats yet to be seen. Will it include a border tax adjustment . Will it include this writeoff immediately of all cap ex, which would figure prominently when building a new fa til cilitfaci. It is not the administrations tax plan, at least not yet. No. But i thought it was interesting that he said after he spoke with President Trump, spent an hour and a half with the group, increasingly i hear about the gary cohen meetings being a rigorous session about what we think could occur. The income is up as much as trumps when we talk about deregulation, repatriation, talk about lower Corporate Taxes. He is really not only is he in the mix, i think he is the mix. I think hes got the best handle on what could happen. Now we have a treasury secretary. Thatll be interesting to see how it plays out. When we come back, cramers mad dash and count down to the opening bell. More squawk on the street from the nyc straight ahead. To err is human. To anticipate is lexus. Experience the lexus rx with advanced safety standard. Experience amazing. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley on investment. Squawk on the street today, 10 00 eastern, cnbc. Its like thunder, thunder its like thunder we have about 6 30 before we get started with trading at the New York Stock Exchange on this tuesday. Time for a mad dash. Send it across the country. You want to talk gm, jim. Yeah. There is a valentines day present for gm. When i went over the gm quarter, it was 37, looked terrific on the surface. Then you started hearing about how bad opal is. These have been loss makers for ages. What if you could off load them . Thats the talk of what is driving gms stock today. It is like, lets do a do over if we didnt have the horrible european operation. There are confirmed talks. David, why would they want the two brands . I dont know. Tell me. Why . Because they are not that smart about their own business. I dont know. I mean, honestly, you cant really rationalize in europe the way you can i dont know if you can rationalize in this country anymore. The idea would be, obviously, you put 2 plus 2 together, and you get, i dont know, 5. I th