Skip to main content

tv   Squawk Box  CNBC  November 30, 2016 6:00am-9:01am EST

6:00 am
the adp this morning, wednesday, november 30th, a very busy wednesday morning, andrew "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box." >> we have a busy wednesday morning. good morning. welcome to "squawk box." i'm andrew ross sorkin along with joe kernen, michelle caruso-cabrera is hanging out with us today. check out the returns so far. the trump rally. the dow up 5.4%. the s&p higher by 3.7%. the nasdaq gaining 3.7%. the russell 2000 up 11.5%. >> it will be more pronounced if you go from election day. >> absolutely. >> go from election night.
6:01 am
the lows. >> if you could have left the party like carl icahn did. where is he this morning? >> we have to compound those things. i was going to multiply by 12. >> the russell, 12 times 11 -- >> you're saying we'll do that over 12 months? >> if we compound it, it's probably like 200, isn't it? that's five? 5% a month compounded for 12 months. >> you think that's realistic? >> no. probably -- you will make this point again and again, these gains may moderate. >> they may. we will see. >> he would say they would reverse themselves. >> i'm not suggesting that. >> i hope they stay. >> go back and read that column of yours. >> i want great things to has. >> read that column. >> that column said things will go haywire initially and come back. they came back quicker.
6:02 am
>> i'm going to go back and read that victory lap new york magazine thing about obama's economy. how he was -- how great it was. >> you can do that. that -- that, i -- i stand by both. u.s. equity futures at this hour. the dow looks like it would open up 30 points higher. the s&p 500 up 4 points. the nasdaq up 4 points as well. we have a lot on tap today. we will talk about it. michelle has the headlines. >> opec ministers are meeting in vienna debating a deal to curtail oil production in an effort to prop up the price of crude. the saudi oil minister making optimistic comments at the meeting sending oil higher, nearly a $3 move, bringing it back to 48.14. we'll get a live report from vienna in a few minutes. also financial news from the united kingdom. the royal bank of scotland
6:03 am
failed the bank of england's stress test and is required to raise more capital. rbs already submitted plans to do so. barkleys and standard charter also failed to meet some of the requirements, but they already announced capital raising plans, overall mark carney said the system is in strong shape. trump's incoming administration and united technologies agreed in agreement -- come to an agreement that would keep close to 1,000 jobs of carrier corporation in indiana. carrier is owned by utx, united technologies. it was first reported by david faber and confirmed by carrier in a tweet. originally they planned to move the facility to mexico until the deal was negotiated by mike pence and the ceo of utx. sources indicate new incentives
6:04 am
were made to the firm. >> i think this is great news. >> no kidding. >> how many were they going to move? >> 1400. >> the question i had was how both of you feel about this -- what's happened with carrier because, for example, i would suggest that some of this is not a liberal approach to the world, but i always thought if we have a defense contract with a company, we should negotiate. you can do this for drugs, do this for all sorts of things. >> i already read from the left, huftington post -- that thing at this point. arianna will be on, she's not affiliated anymore, but i've already seen if obama tried to influence a company to stay, free market republicans would have been saying what are you doing, let the markets work, this is government intervention. the same crap. instead of looking at this in a half empty way, can't we just be
6:05 am
happy there's people in indiana were worried about losing these great manufacturing jobs. now they're going to stay. trump is not even president yet. you already got 1,000 jobs staying there. ford, maybe it wasn't all the jobs. maybe they still move some production to mexico, but it's a start in the right direction. >> i think this sets a positive tone. >> i don't think any republican will say that the government -- we know that -- we don't want crony capitalism, but we want the government to work in concert at times. >> i would want to see what deal is. if there's tax incentives, et cetera, there was an acknowledgment that you have to reduce the cost of staying here in some way to make it competitive. acknowledge a competitive issue, because of labor costs. it's different than screaming oh, my god, you're moving jobs, you're greedy. what would be a far better approach is to do things within
6:06 am
the economy that make our companies inherently more competitive if they stay here. >> we will continue this conversation. we want to get back to the top story. president-elect trump filling two crucial cabinet positions, treasury and commerce. john harwood has more on that story. we'll see both of these gentlemen in just a bit. john? >> good morning. first, i have breaking news on the question that joe was posing at the top of the show. 12 times 11 is 132. >> compounded. compounded. compounded. compounded what is? you need -- you need one of those ti -- the new ti calculators are -- they used to take four floors of building with a spare univac, i can do 12
6:07 am
times 11. i want it compounded. compounded. compounded. is it 200? >> i need to -- i need to consult some nerds. >> huh? >> i will need to consult some nerds to get the compounded answer. but we do have -- we do have two big pieces of news this morning on top of the positive news that you guys just discussed with carrier keeping those jobs in the state of indiana. that is two big picks for donald trump's economic team. the president-elect will announce this morning that steve mnuchin who has been the front-runner all along, former goldman sachs partner will be his treasury secretary. following goldman colleagues bob rubin, hank paulson in that job. now this is not exactly the kind of drain the swamp pick that donald trump talked about on the campaign trail. nevertheless, it's something that will be reassuring to wall
6:08 am
street. the same with wilbur ross, billionaire investor, familiar to viewers of our show. he will be commerce secretary. both men have had prior dealings with donald trump. wilbur ross is his neighbor in florida, did work with donald trump. and on top of that, that nick news. as michelle indicated in a free market economy you can't go one by one and use taxpayer resources to bribe companies into staying. that's what people denounce as crony capitalism. nevertheless, it's a powerful, symbolic statement and a powerful step in the right direction for those 1,000 workers in indiana and something that donald trump, on top of the good nick news we had yesterday about gdp, can claim he has the
6:09 am
wind against his back going to the inauguration. one position he has not named is who will be secretary of state. he met in the last few days with rudy giuliani, bob corker, david petraeus, and last night he had dinner with mitt romney who criticized him during the campaign but was more positive after they had frog leg soup, steak, scallops and lamb chop last night. take a listen. >> what i've seen through these discussions that i've had with president-elect trump as well as what we've seen in his speech at the night of his victory, as well as the people he selected as part of this transition, all of those things combined give me increasing hope that fle president-elect trump is the better man who can lead us to that future. >> those are words that donald trump wanted to hear. don't know if he'll go with mitt romney.
6:10 am
clearly he's intrigued by the possibility of swoomeone who waa previous nominee, kept a distance from the campaign, but don't expect a decision today. we'll be watching. >> pretty interesting. >> remarkable to watch it play out like this in publicment. >> i have increasing hope -- i was going to say that he will be the right man to actually lead -- that is getting closer probably to -- i don't know if you get an apology from mitt romney. >> we had somebody on the other day who said if you are donald trump, you want real loyalists who want to stick with you through thick and thin. if there's thin, wouldn't you worry that mitt romney would walk away, i can't abide by what
6:11 am
he says, i don't know, you have many doubts about whether he'll stick around through the tough moments. >> you still around, john? >> i'm here. >> i love bob alison and hensarling. i think he backed hillary and backed obama. that's a bit weird, to me. >> are you talking about mnuchin? >> yeah. he gave more money to democrats. >> i believe he backed democrats in the past. i'm not aware he backed obama. >> the first time. the first time. maybe it was just the first time. >> i think he gave money to hillary. >> gave money to hillary, when obama came in, he supported -- >> i'm not sure. >> we'll ask him. >> $7,400 to clinton according to reuters. they quote the federal election
6:12 am
commission. >> i don't know if he gave money to obama. >> in an earlier this year, mnuchin was asked about dodd-frank. he said, well, there's some good things and bad things about the law. obviously as donald trump confronts the reality as president of trying to fulfill some of his campaign promises, he will have to deal with the good and the bad. we've already seen it with respect to his statements about obama care. dodd-frank will be the same. >> mr. mnuchin gave the maximum 2300 to mrs. clinton presidential primary bid in 2007, when the campaign failed, he gave the maximum to the president obama run. i read this stuff, then i know. steve liesman hopefully is reading stuff. he has more on president-elect -- how do you
6:13 am
say poetus. >> i wouldn't even though. at 6:00 in the morning that kind of word could lead to -- >> you know what's worse? scotus. >> scotus. >> after 7:00, there's a whole bunch of words you can say. >> i thought you were saying peot peoti. >> stay away from that. >> you can get in trouble, you can get fined if you mess that up. >> we were having a conversation earlier. >> steve, you know -- go ahead. >> you were troubled by the idea that he gave to democrats. >> i'm troubled he will come in to reverse the economic legacy of the guy he gave money to in 2008. >> i'm here to interview view. they needed somebody to do that. >> we'll talk to him about that.
6:14 am
>> i know. i'll pick up on the loyalty thing. i've seen treasury secretaries play different roles. the first question they'll ask is where is economic policy going to be made? sometimes it's made at the treasury. sometimes it's made at the white house. when it's made in the white house, the treasury is just filling the building over there and doesn't have much to do. if it's made at the white house, it's not a powerful treasury. when you go to paulson or geithner where they made actual policy over there, then it is an important job. >> that's the question, which kind of treasury secretary he will be. >> remember when we had pence on, we asked him who makes the decisions here? are you telling trump was to do? >> they say it's all pence. >> they all say it's up to him, the peotus. >> i think you make an interesting point about picking
6:15 am
mnuchin, who is more like there are some good things about dodd-frank and bad things rather than hensarling. he may want hensarling to right the bills and other stuff, but it may mean there's more of a compromise position. >> also more practical experience here. he oversaw mortgage-backed securities trading. >> be careful where you go with that. i want to say a couple interesting things, he comes out of yale, goes to work at goldman at 22. partner at 31. leaves at 39. he had already been there for 17 years. he went in and bought a bank, indy mac, the failing indy mac, later there were accusations that he had very, very tough foreclosure cases against some
6:16 am
people. a bunch of issues out there that the democrats are already criticizing him forever. that's part of the confirmation stuff. this will be a tough confer makes, and that goldman is bracing for this but is this their -- is goldman back? i think a lot of these guys have done good. ruben, paulson -- >> all of these headlines that say goldman is back. >> are there headlines like that. >> a couple. that's a bit of a misnomer because he has not been -- >> 17 years. >> they consider him part of that world, but he's gone on -- >> this indy mac deal will get scrutiny and he sold it for double. this was a program created by the fdic in order to bring in private capital to rescue some of these banks. he came in apparently one of the
6:17 am
few or only bidder on that deal. >> doesn't matter how much money he has given to democrats. the huffington post, does anyone care anymore? they hated every nominee. this is what i got to ask him about. i was watching tar saen tzan th day. >> he produced that. >> and mad max. and batman verse superman. >> he has movies to answer for. >> storks. >> i'm talking about this particular -- >> the whole issue having overseen the mortgage trading back securities this is interesting because we had tons of securities about rising interest rates, deficit spending. there's a guy who can turn to donald trump, the president, and say if you do this, this is how the bond market will react. >> that's a brilliant point. it can easily check some things said in the campaign about
6:18 am
potentially defaulting. these guys, i remember like the old savings and loan crisis who did they bring in to save it? the former savings and loan -- >> they know business. >> it would be interesting to see if the new treasury secretary was the font of new economic policy. >> i don't know. >> you talked to him. >> i did his interest in public policy, he doesn't have a record of great interest in public policy. he's not hamilton in that respect. don't know if you read the newspaper today, joe. i wanted to give you a coat from an article in the times -- >> i didn't read the times. >> you didn't. an interview with hank paulson in the paper last night. >> about global warming? >> he says this about steve mnuchin. i think steve mnuchin would be an excellent choice for treasury secretary. >> he's back and forth.
6:19 am
he supported and voted for him. >> hold on. >> you're angry about this. >> he worked with mnuchin. he said he's talented, has a deep understanding of finance and markets, knows how to bring people together and has a working relationship with and the confidence of the president-elect. when i said you know the guy who wrote this story, i wrote it. >> duh. all right. in addition to being in the times, you wrote it. >> so you talked to hank last night. >> hank likes mnuchin. >> y i talked to hank last time. >> hank came in here and said i'm voting for hillary because she likes to reach across the i'll. >> joe, you can't be mad at everybody all the time. >> i can be mad at paulson. >> you're mad at trump now? >> but he picked a democrat -- >> not mad, just pointing things out. he will reverse the last eight years --
6:20 am
>> thanks, steve. >> you're welcome. 8:15. >> steve mnuchin and wilburs a joining us on set at 7:00 a.m. coming up, a busy morning for the markets. live report from the opec meeting, plus an adp jobs data at 8:15. liesman will be back for that. and we'll hear from three fed officials before the close of the bell. i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit to see what adding futures can do for you. why pause a spontaneous moment?
6:21 am
cialis for daily use treats ed and the urinary symptoms of bph. tell your doctor about your medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis.
6:22 am
generosity is its oyou can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1.
6:23 am
opec leaders gathering in s vienna to discuss opec levels. prices increasing 6% this morning. >> post algiers in december, the oil price got up to $56 a barrel. when there were expectations, the prices go up. i've spoken to the key guys at this meeting, i thought the degree of optimism i heard today compared with the pessimism of the previous three days, the previous 72 hours was outstanding. everyone seemed to be going to great measures to say they can get something done, whatever can be done remains to be seen. what were the big barriers? i asked the saudi oil minister. >> the sticking point has been and continues to be that each and every country will have to agree to the principles that a
6:24 am
production constraint agreement bringing us close or at the 32.5 that was adopted in algiers, it will have to be distributed transparently, ek qequatably, a mechanism to monitor to insure full compliance, and then to ensure that non-opec will join in with substantial amount of cut that will add to what opec is offering, the 32.5, it's going to be above 1.2 million. >> he said it has to be transparent, two, they have to contribute 600,000 barrels a day extra. three, talking about 32.5 million barrels a day, bottom of
6:25 am
the range, that's 2 million barrels coming off the table. the other thing i think that was key, he said production constraints, not cuts necessarily, that could have been a big olive branch to iran that doesn't want to cut production. then i spoke to iran, bijan zangeneh, i asked him about what he thought he could do and couldn't do. let's listen in. >> sir, would iran take a timeline for participation in a deal? would it be six months, a year just to rebalance the market? >> yes, we are going to discuss and finalize something for six months and to be extended for one year. we think during these six months and one year it's very important time for iran to reach to the pre-sanction level of production.
6:26 am
>> do you still believe other members need to make significant cuts in order to rebalance the market? there was a suggestion -- >> it seems so. >> now, i'm not going to be the stick in the mud on this one. i see brent is up over 7% and people are excited. but there is a sticking point on what is the pre-sanctions level, is it 3.8, 4 million barrels a day or will they try to find more room to the upside. with iraq as iran, there's contention about whether there's government sources for the production, is there contention there as well. the point i was asking about the timeline, a six-month deal or a year deal, that's important for the market and the long jefrity for the c longevity. there are a lot of questions still. the point about transparency from saudi, i think, is absolutely key for these price gains in the market today.
6:27 am
back to you. >> steve sedgwick, thank you. turning now back to the broader markets, joined by phil orlando from federated which has more than $364 billion a sets under management and steve michu michuto. what do you think about wilbur ross and steve mnuchin being the latest cabinet picks. >> i think both of them have reasonably good credentials to be doing the job they're doing. it shows trump is looking to get the people he feels are the best people in these position rather than picking somebody who is a substantial supporter, you have somebody like mnuchin who goes beth ways, supporting democrats and republicans. i think he's trying to get good people in the jobs. all of that shows a good possibility going forward. >> you look at someone like a ruben or paulson, good goldman guys coming in and doing a good
6:28 am
job. i thought he would have gone from hensarling from the house to get some of that legislation through. maybe the idea is let the goldman guy sort of set the broad objectives, and let hensarling figure out a way to get it through congress. >> i see in the notes, steve, you were talking about whether or not there is -- all this spending will be deficit financed and what it would do to interest rates. mnuchin being there can help with that, can't he? >> we hope he can. once you start the legislative initiative to get things done, often they take on life of their own and people tag on things to a bill, and they become christmas trees. that's something to be concerned about with this bill. they are already laying out a substantial amount of tax cuts and spending. there has to be horse trading on both sides. things have to be given up on both sides. >> you said maybe we get a couple quarters. >> yes. >> a couple quarters of good
6:29 am
growth. then interest rates will be so high they choke -- so where -- >> it's more the currency than it is necessarily the interest rate environment. the other thing you have to keep in mind -- >> the dollar will be stronger -- >> keep in mind the federal reserve is the fly in the ointment. typically when you have a program like this being advanced, you have excess slack in the system. federal reserve members are saying we're at full employment. so they may look and say we cannot delay until the execution of the program to worry about monetary policy, maybe we have to be more preemptive. a short rise in interest rates will support that. >> so you say it's not the -- it's not interest rates. >> it is, it's short-term interest rates more than long-term interest rates. >> where will they be? if we get two quarters of good growth, they could be back to 2.5%, 3%, and that will choke
6:30 am
off the economy? >> you will end up with a couple quarters of growth in 2017 and 2018. does the federal vef drireserve up the -- >> are so many who think -- you go back to reagan. the worst year -- this is not reagan's economy, joe. >> doesn't have to choke up -- >> this is a world of excess supply. >> so it can't happen. >> no, you can get positive growth for a time. >> couple quarters. we'll remember you said that. >> good. nothing he is doing will correct the excess supply situation. >> then the market has gotten ahead of itself. >> the markets often do get ahead of themselves. >> we've been limping along for years. if we get a 3% gdp run rated next year, with any luck that
6:31 am
goes to 4%. >> we will have a couple quarters at 3%, then back to 2%. >> that's where we think it will be. >> okay. we'll see. >> i think that's what the market is trying to price in that. >> does that mean i chase this rally? it's okay, if you just woke up and saw these tremendous gains since election day, you can still get more? >> the answer is yes, but we're concerned about the opec meeting, the italian election on sunday. could there could be a consolidation. s&p is up 6% the last three weeks. the russell 16%. so we think we will end the year higher. we think the s&p could be at 2250 by the end of the year. next year perhaps a 2400 s&p. we think stocks will work higher based on stronger economic froth and stronger corporate earnings growth. >> that's bullish. >> we are.
6:32 am
coming up, closer look at president-elect trump picks, wilbur ross and steve mnuchin. not quite a billionaire, andrew. do you have a feel for that? . i don . >> i don't know. >> we'll look at the policy changes they could oversee. and both men will join us on set at the top of the hour on a first on cn bshgcnbc interview a.m. the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
6:33 am
6:34 am
6:35 am
mapping the oceans. where we explore. protecting biodiversity. everywhere we work. defeating malaria. improving energy efficiency. developing more clean burning natural gas. my job? my job at exxonmobil? turning algae into biofuels. reducing energy poverty in the developing world. making cars go further with less. fueling the global economy. and you thought we just made the gas. ♪ energy lives here.
6:36 am
welcome back to "squawk box" on cnbc. u.s. equity futures at this hour are a bit higher. up -- that's not bad. up 41 after a session yesterday that saw some interesting moves, andrew. i don't follow comcast very closely. >> it started with a seven handle. >> it did. >> yep. >> did it close with a seven handle? >> you really don't know? >> no. >> by $70.14. >> no? >> 7 70.14. >> why do you focus on that stock? >> it's up almost $2, new all-time high. that's the way the markets were cross currents. the dow ended up higher. it tried to accelerate, but
6:37 am
never did george w. bush. >> a gain of more than 2.5%. >> it's on my list. >> what's that compounded over 12. >> liesman never did give us that. 12 months of 11% compounded what is that, nan, do you know? >> per year? per month? >> per month. >> he's getting greedy. >> that's going to be -- it's going to end plus 11 times -- >> she's good. >> our top story, president-elect trump is set to make his picks for two key cabinet positions. billionaire investor wilbur ross getting the nomination for commerce secretary, and hedge fund manager, steven mnuchin, he's got a lot of different hats, movie producer, former goldman sachs, that's good to make partner at 31. his dad was at goldman his entire career. >> 30 plus years, and became a great art dealer. >> really? >> yeah.
6:38 am
then his brother alan, big media banker. >> people on other networks are still calling the other guy mnuchin. the head guy at fox, mnuchin, mnuchin with the plastic hair. i should talk. both men will join us here on the squawk set, first at cnbc at 7:00 a.m. >> talking more politics, we are joined by nan hayworth, who served as new york's co-chair for carly fiorina's team. and buzz schmicael. what do you make of these -- both wilbur and steven mnuchin, wilbur probably better known to this particular audience. what do you make of steve mnuchin? do you know steve? >> i don't. i met mr. ross a couple times. i don't flow mr. mnuchin.
6:39 am
here's what we know about donald trump. he is intensely results oriented. so the picks he makes are obviously going to be people whom he can trust, but also people who can be held accountable for what they do and what they accomplish in these important positions. mr. mnuchin has incredible knowledge of the financial services industry, inside and out. he's detail oriented. he's very successful. he also clearly knows the kind of behavior that folks in government have to watch out for. within the financial services industry in order to protect the public. that's a wise choice. mr. ross has a record of success in reviving businesses that we desperately need in this country that mr. trump emphasized in the rust bell. >> i imagine both of these folks
6:40 am
will be put through the wringer in the confirmation hearings, lots ofquestions around draining the swamp. mr. mnuchin is more on the fence in terms of insider/outsider. he had his inside experience but spent the last kek dade doideca other things. >> these are accomplished people who with respect to engaging americans on the anxiety, thdond trump may be results oriented, we'll see. the truth of the matter s i imagine they'll have some freedom to navigate here where trump may not be -- president-elect trump may not be micro managing on a day-to-day basis. but will want to take credit for
6:41 am
the work they'll do. we'll look to that. >> that's interesting, i'll ask you the same question, do you think trump will manage his presidency, if you will, in a delegation way? he'll delegate the responsibility to mnuchin and wilbur and go off and be their own big brands? i'm not so sure. >> understood. that's not what i'm saying. i don't think they're going to -- maybe we'll talk about mitt romney, i don't know if it's about pledging to donald trump -- i think they have the skill sets to do a lot of the work independently. i don't know if he'll be that focused on governance, that's why it's important to have a certain type of person around. that's what i think mike pence brings to the table and reince priebus. >> i agree. >> you put him in the jack lew
6:42 am
category or the paulson category? both of whom the president trusted. one who was former chief of staff, jack lou, didn't have the same experience in the business world, someone he trusted to do the job. bush gave hank paulson tremendous latitude to the point where some would suggest there were periods during the financial crisis that paulson became the de facto president of the country. >> i think the difference is donald trump made his career in business. yes, does he seek to delegate? absolutely. that's what every great executive does. >> they have a lot of delegating -- >> delegate to people who you can rely on. >> the country is in a very different place. i talked about that economic anxiety. that's going to be a discussion day in and day out. as people are watching the trump
6:43 am
presidency unfold. but also just general -- real concerns. not just to the midwest. also upstate where trump did well. >> what do you think elizabeth warren is saying? >> he's already out and about. she thinks this is hypocritical. she is on the drain the swamp -- >> well, it's not -- >> she's talking about -- >> he's an expert in hypocrisy. >> talking about indy mac. >> as a centrist democrat got routed in the most recent election. you look at state legislatures, governors, all the senators, guys, if she got routed as a centrist democrat, who cares what elizabeth warren has to say, andrew? why do you know what she said? >> because i read it? >> why? >> because it was on your favorite website. >> a lot of people do care.
6:44 am
and they care about draining the swamp. >> we have to go. >> if she wants to invest a board -- >> mika called her shrill yesterday. >> and she is. >> mika. >> don't look at me. >> i'm looking right at you. come on back, nan, thank you, basil, thank you. when we come back, donald trump just tweeted i will be holding a major news conference in new york city with my children on december 15th to discuss the fact that i will be leaving my -- and that's it. not sure if another tweet is coming. >> that is a tease. >> wow. >> i would make a bet i will be leaving my company. that's what we all think. >> that -- he's a tv guy. that was a tease. that was a tease.
6:45 am
>> could be leaving i'm leaving my trump tower apartment for the white house. >> it may be what you said, but whatever it is it won't be enough for you. >> we will talk to steven mnuchin and wilbur ross who have to do a lot. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business.
6:46 am
6:47 am
6:48 am
right before the break we showed you this tweet from donald trump, and now we have part two. he says i will be holding a major news conference in new york city with my children on december 15th to discuss the fact that i will be leaving my -- and the new tweet, great business in total in order to fully focus on running the country in order to make america great again. while aim not mandated to -- we'll bring you the next tweet when we get it. that conversation about the conflicts of being the president and the business still linger. but this may change the game. >> you and the "washington post" want him to stop tweeting. how will we do this if he stops tweeting? we do the first one, we got a half tweet. the second one, we got the other
6:49 am
half, no we know it's only a third. >> it could be fourth, fifth, sixth. >> this guy knows how to program. efrnlgt doe >> he does. >> did you see yesterday on the flag. he tweeted a couple things about that, you people go bonkers. >> he controls the conversation every day. >> you know hillary introduced a ban to -- >> yes. >> nobody likes flag burning. >> i know. >> there's certain hate speech -- correct? >> i -- >> your ambivalent on this. >> high five. >> i know your tricks. coming up, forbes -- have you tried that? >> no, you know my son says -- he says -- >> are you 10? >> too slow. >> we have to go. forbes out with the new list of the highest paid musicians on the planet. katy perry topped the list with 135 million dollars. this year she's not even in the top 20. we will tell you who unseated
6:50 am
her. >> she was on the road for hillary. that's why. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.
6:51 am
6:52 am
6:53 am
forbes out with its annual list of the world's highest paid musicians. this does not surprise me. taylor swift taking the number one spot. the pop star bringing in $170
6:54 am
million. going to take us through the list, zach o'malley senior editor at forbes. she works hard. i mean, she's talented and huge and -- but she was on tour. how much did she make on tour and how many tour dates did she have? >> she made the bulk of that $270 million on tour. she smashed the rolling stones rofrd. >> she likes to tour. >> i would, too, if i were making about $5 million a night. skbl she likes it for more than that. she's got that closeup camera. she mugs the entire time. i thought it was a little weird. but the people that are there love it. even in giant stadiums, you feel like you're right there. >> i saw the show. one thing she thrives on with her fans is that idea that she's right there with them one-on-one. she does the runway thing. >> she does the one-on-one talk
6:55 am
like i'm so glad you're here. i was talking about you last night. some of the little girls and boys there are like, wow, she was. >> that's charming. >> it's almost like a political speech. she'll say i was talking to joey from ohio and he told me about such and such. but i think that republican allows her to nurture this fan base. >> can i ask about katy perry. she was number one last year. but she's been on the road for hillary clinton. is that part of it? she was at the dnc. >> yeah. the funny thing about this list is that every year the number one act is usually somebody who has just toured like crazy. the way the music business works, there's an album cycle and touring cycle. then the next year you take a break, you record your album so you're lower down. >> i want to see the next five too. >> sure. so following taylor swift. garth brooks is number six. >> one direction. >> who else six through ten? >> number two, one direction.
6:56 am
$110 million. >> i saw them. we saw them. who's six through ten? >> we've got garth brooks at sixth. >> ac/dc. >> exactly. some of the aging rockers. >> rolling stones, calvin harris, and p. diddy. >> calvin harris is the highest paid deejay in the world. >> a lot of country people there still in the top 20, aren't there? >> kenny chesney. >> yeah. i mean, country is one of those genres where you can keep tours and touring and touring and the fans gobble it up. >> thank you. >> it's interesting. thank you. >> love the velvet blazer. coming up when we return, donald trump's picks for treasury and commerce secretary, they're going to be here. steven mnuchin and wilbur ross join us here. "squawk box" returns in just a moment. r business be ready when growth presents itself? american express open cards can help you take on a new job,
6:57 am
or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at find out how american express cards and services may not always be clear. but at t. rowe price, we can help guide your retirement savings. so wherever your retirement journey takes you, we can help you reach your goals. call us or your advisor t. rowe price. invest with confidence.
6:58 am
they are the natural borns enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful.
6:59 am
7:00 am
trump's cabinet filling up. breaking this morning, steven mnuchin picked for treasury secretary while wilbur ross has been tapped as commerce secretary. we will speak to both nominees and a first on cnbc interview in just a few minutes. crude in focus as opec meets in vienna. oil prices spiking on buzz of a possible deal for a cut. an update from the meeting straight ahead. plus two retail kings talk holiday expectations. the dollar and what the sector will look like under president donald trump. the second hour of "squawk box" begins right now.
7:01 am
. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin with joe kernen and michelle caruso-cabrera. take a look at the futures at this hour. dow looks it would open up higher 45 moints. and the nasdaq looking to open up 7.5 points. opec ministers meet in vienna right now. oil right now, wti crude at $48.68. in the meantime, we have some very important people with the call. the trump rally. >> every time you say it, i just like to get you to say it. would you say it again? >> the trump rally. >> coming from you -- isn't it good, wilbur? coming from him. so good. president-elect donald trump announcing more cabinet picks
7:02 am
for treasury secretary. steven mnuchin and for secretary of commerce our old friend wilbur ross. he's snot old. he's our friend for a long time i meant. they join us now. i don't think the appointments are actually official yet, but can you gentlemen confirm this has happened? >> we can, indeed. we're thrilled to be here and we're thrilled to work for the president-elect and honored to have these positions. >> congratulations. >> let's start with this. it's a two prong question. number one, because we talk about it all the time. what is the potential gdp growth for this u.s. economy, number one? what do you guys see it as that we can average?
7:03 am
>> it's seasonally adjusted this quarter but i believe we can have sustained growth at that level. and to get there our number one priority is tax reform. this will be the largest tax change since reagan. we've talked about this during the campaign. wilbur and i have worked very closely together on the campaign. we're going to cut corporate taxes which will bring huge amounts of jobs back to the united states. >> where do you think you can get to on that? >> 15% and bring a lot of cash back into the u.s. >> is it possible, andrew, to get to 15%? >> it may be. we had a couple of different guests on -- >> you think 25%. >> we had a guest on earlier in the morning, a washington analyst who was suggesting they thought that the conversation would start at 15% and potentially could creep up. >> i would first just say that corporate taxes are one component of revenues to the government. okay? and the main component is obviously personal income and personal taxes.
7:04 am
so we think by cutting corporate taxes will create huge economic growth. and we'll have huge personal income. so the revenues will be offset on the other side. we'll have a big middle income tax cut. that's another big part of this in simplifying taxes. taxes are way too complicated and people spend way too much time worrying about ways to get them lower. >> is dynamic scoring going to come back into people believing it? because people -- we have people on that just flatout on the left say there's no proof that it ever works. i don't see how they can come up with that. you get more taxes. do you not? >> of course it works and of course you have to have dynamic scoring. it would make no sense otherwise. and we're going to work with congress. i think they understand that. >> dynamic scoring means that when you cut taxes, some people believe that that changes behavior which leads to more revenue. left has argued that there's no proof of that, supposedly. >> well, this administration will prove it. >> the last administration kind
7:05 am
of proved it in the converse i would say. the wrap is going to be the lions share of the tax cuts go to the wealthy. not just the amount but also the percentage cuts. >> it's not the case at all. any reductions we have in upper income taxes will be offset by less deductions to there will be no absolute tax cut for the upper class. but any tax cuts we have for the upper class will be offset by less deductions that pay for it. should i donate to charity then this year? >> there'll be other deductions that are -- >> how about mortgage debt? >> again, we'll allow -- we'll cap mortgage interest but allow some deductibility. >> some of the analysis that suggested the middle class -- that certain people, especially i think single family -- single household -- single parents,
7:06 am
they may ultimately pay more. have you seen those? >> we don't believe in that analysis. when we work with congress and go through this, it will be very clear. this is a middle income tax cut. and the child care credit is a big aspect of this. this is something we've worked on in the campaign. and one of the benefits of this is wilbur and i have worked throughout the campaign with the president-elect and the policy team. so this will be an integrated approach across commerce and treasury. so another big area is going to be trade reform where again it cuts across both commerce and treasury. and we believe in fair trade and we believe that's going to be a big booth to the economy. >> can you tell us about the situation with carrier which we'll learn about later. >> here we have a trade victory before we've even come into office. >> what kind of negotiate -- do you think a large part of your roles is going to be negotiating with american companies to keep them in the united states and how are they going to be one off deals? what is the carrier deal
7:07 am
actually look like? i think there's still questions about what -- >> what were they offered to stay? >> first thing i would say is it started with an attitude. of this administration, this president, this vice president-elect is going to have open communications with business leaders. you can see this started because the president-elect called up united technologies and said it's important to keep jobs here. and wilbur and i will continue that. and again as he said, this is a great first win without us even having to take the job. >> but the reason those jobs were going to go to mexico is because they were cheaper. it would help the company stay more competitive. how do you address the underlying issues of why companies want to leave the united states? >> well, first of all, it's more complicated than that. mexico has 44 treaties with other countries that make it very advantageous to do international shipping from
7:08 am
mexico rather than from the united states. believe it or not, mexico has better treaties with the rest of the world than the united states does. we're going to fix that. >> so that would help address -- the initial problem is why do they want to go anyways? >> on a typical car, they save twice as much on tariffs going into europe out of mexico as they do going into mexico to save labor. >> we say where are you in the world a lot of times and you might be in e the uk or you might be -- you're all over. if anyone has benefitted from tree trade, it might be wilbur ross and the company. you saw the rhetoric during the campaign app lot of people said it's going to pull off a surprise win because we're going to be a protectionist company not sbresed in free trade. how do you square that up with your whole career? >> first of all, protectionism is a pejorative term. it's not really something that's meaningful. there's trade, sensible trade,
7:09 am
and dumb trade. we've been doing a lot of dumb trade. that's the part that's going to get fixed. >> what if we put tariffs on chinese goods? if we put tariffs on chinese -- >> everybody talks about tariffs as the first thing. tariffs are the last thing. tariffs are part of the negotiation. the real trick is going to be increase american exports. get rid of some of the tariff and non-tariff barriers to american exports. >> isn't some of tpp -- isn't that what it did? got rid of a lot of tariffs? >> no. not at all. for one thing, tpp had terrible rules of origin. rules of origin means can stuff come in from outside the boundaries of the treaty countries? in automotive, the majority of a car could come from outside tpp. namely could come from china and still get all the benefits of tpp. and if it came in from mexico, all --
7:10 am
>> is that a bad deal? >> absolutely. absolutely. and we believe in bilateral negotiations. have very good deals with lots of countries. >> interesting. so this huge regional approach to trade you think is a bad idea. country to country to country. >> absolutely. >> the problem with regional trade agreements is you get picked apart by the first country. then you negotiate we the second country. you get picked apart. and you go with the third one. you get picked apart again. what has to be put into perspective, we are the big market. we are the world's biggest importer. we need to treat the other countries as good suppliers. not as determining the whole show. >> we'll get -- we've got so much to do, so little time. can you guys stay until 9:00? i'm kidding. but keep you as long as we can. i just want to get to dodd/frank quickly. a lot of people were hoping for
7:11 am
hensarling. both those gentlemen probably have stride views about dodd/frank about what we keep and don't keep there. does your nomination make it less likely that that entire bill is gone or will you go softer on reform of dodd/frank than those other guys? >> we look forward to working with hensarling and the other people in congress on this. one of the good things about wilbur and i, we have actually been bankers. we were the only two people during the financial crisis that were issued licenses -- >> you're supposed to whisper that for the last eight years, aren't you? >> badge of honor, you think it is. >> we've been in the business of regional banking and we understand what it is to make loans. that's the engine of growth to small and nemedium sized businesses. the number one problem with dodd/frank is it's way too complicated and cuts back lending. so we want to strip back parts of dodd/frank that will be the number one priority on the regulatory side.
7:12 am
>> what about the volcker rule? >> many of the smaller banks have had to get to the point where they now have more compliance people than they have lending offices. that's crazy. >> what about the volcker rule and the consumer protection bureau? >> we're going to look at all these things, but the number one problem with the volcker rule is it's too complicated and people don't know how to interpret it. so we're going to look at what to do with it as we are with all of dodd/frank. the number one priority is going to be make sure that banks lend. >> steven, this is one of the first opportunities people are going get to know you publicly. you have not been as much of a public face as wilbur has historically. i talked to hank paulsen who you work frd last night on the phone. he said he is very talented, has a deep understanding of finance and markets, he knows how to bring people together to get things done. importantly he has a working relationship with and the confidence of the president-elect.
7:13 am
this was a big gamble for you. a lot of your colleagues and peers raised questions about doing it. did you think of this as a true idea of getting into the administration early on? >> let me first say and i've heard a lot of people say this was a gamble. this was never a gamble from my perspective. i've known the president-elect for over 15 years. i believed in his policies. and i thought he would win. but i did this because i believed in it. despite the fact there were a lot of people in california and new york that wanted to stop being friends. they've all come back. >> so joe has brought up that you've donated money to barack obama and to hillary clinton in the past. why? >> like the president-elect, i lived in new york and gave money to certain democrats. the most substantial gift was to mitt romney last time, okay? and i have been a republican. >> so transactional, not convictional. >> i feel be rt.
7:14 am
my question was going to be you gave money to the current president, obviously, and you're going to try to reverse, i would hope, a lot of the economic -- people argue about whether there has been a great economy or bad economy. i argue we are well below our potential for eight solid years. tepid at best. you backed him over the republican candidate. you were with hillary before that. >> let me just say i didn't back them. i said i gave money to them. but i agree with you completely. the problem has been for the last eight years, there's been no economic growth. what we saw from traveling with the president-elect all these rallies is for the average american worker they've gone nowhere. our job is to make sure the average american worker has wage increases and have good jobs. that's the priority of this administration. >> it's nice at 4.9%, though, to start there because you may not
7:15 am
need minimum wage work. this should happen. you guys could be coming in at a vl opportune time. >> it should happen and we cut corporate taxes. that's going to create a huge opportunity for more jobs. >> how will you do that and satisfy everyone involved? that says no jobs are creating, just goes to shareholders or dividends. >> just not true. and it's also not true that all jobs are created equal. a guy who used to work in a steel mill now flipping hamburgers, he knows it's not the same. so the quality of jobs as well as the quantity. and one of the problems with the recovery is when the newly created jobs are not nearly as the jobs that were lost. that's a structural problem. >> democrats are already out in force. let me ask you two of the questions i know you're going to be asked about. this is heed theline from west.
7:16 am
this is going to be a question that i know is going to get asked over and over again. >> let me tell you one of the most proud aspects of my career was buying during the financial crisis. we brought it from the government in a six-month auction. and we saved a lot of jobs and created a lot of opportunities for corporate loans. one aspect to that is we bought the worst mortgage portfolio is many in the history of time. all the loans we had to fore close on, we didn't originate those. and it was the first bank deal to be approved over $50 billion. we went through a one-year comment period with the occ and the fed. the same community groups protested against the deal. the regulators looked at the deal and thought it made sense. >> there's one other that's the sort of at the top of that list, if you will.
7:17 am
new york department of financial services found the top ten banks identified for paying out insurance claims to hurricane sandy victims that held most of their insurance funds. >> again, you're talking about certain specific things where let me just show you the facts. we bought $150 billion servicing mortgage portfolio from the government that we took as part of the deal. mostly all third party loans. for the entire period under our ownership and we're proud of that. >> both of you guys understand interest rates and the bond market. very well. i mean, you were in charge of trading mortgage backed securities, et cetera, right? >> everything. >> what do you think happened to interest rates since the election and where are they going to go? >> i think interest rates are going to stay relatively low for the next couple of years. we're in a period of low
7:18 am
interest rates. i think we'll stay there. they've come up a little bit which i think makes sense. i think we're going to be looking at the treasury all different types of opportunities. we'll look at potentially extending the maturity of the debt. because eventually we are going to have higher interest rates. >> how long 50 years? >> i think we'll look at everything see what makes sense. >> what do you think, wilbur? >> i think the fed's going raise this year. that will have nothing to do with us. >> that's not why the 10-year's rising since the election? >> everything affects everything. >> no government experience. it's like music -- i'm not going to say it. and i look at jack lew. all he had was bureaucratic experience. you know this stuff inside out. it might work. let me ask you this. every treasury secretary in history has said strong dollar is in the interest of the united states. but then i see that sometimes i see that the federal reserve or
7:19 am
even sometimes treasury -- everybody likes a cheaper currency for exports. what do we really want in this country? what will you press for? strong dollar or capital comes in? or every time we do that corporations squawk about currency headwinds. >> first of all, i think the united states is the greatest country in the world to invest in. and we see that. and we see that money is pouring into the united states for those reasons. so i think we're really going to be focused on economic growth and creating jobs. and that's really going to be the priority. >> china. currency. trump's wanted to call a manipulator. is that something you want to do? >> one of the things, wilbur and i are going to work closely together. as you look at both of us in the u.s. trade representative, this will be a coordinated aspect. there are aspects that are in commerce and acts in treasury. so if we determine that we need to label them as a currency manipulator, that's something the treasury would do.
7:20 am
and -- >> are you a fan of janet yellen, steven? >> you know, look. i think she's done a good job at the fed. >> she should continue and serve out her term? >> i'm not going to comment if she should or shouldn't. >> you a fan? >> i think that she dealt with a very difficult situation and did a reasonably good job. >> will she be renominate snd. >> that's a question for her and the president. not a question for us. >> but i will say we do have two governor spots to fill and that will be high on the list. >> are you both going to get active twitter accounts? >> the answer is i do now have an active twitter account only because there was a fake twitter account so i had to have a real one. i used to have a pseudonym for twitter and i'm trying to get my check to verify me. hopefully now they will give it to me. >> congrats on the appointments and good luck. >> good luck. >> i don't think it's going to be -- >> did you ever think, wilbur ross, that you were going to work for the government? >> i didn't think i would ever
7:21 am
have a boss again. >> you're going to get through this easily. just with your breadth of knowledge on this. >> thank you. >> thank you very much. look forward to seeing you many more times. >> welcome any time. >> of course they announced it here on cnbc. >> here on "squawk box." >> on "squawk box," right. >> that's hard for her to say. she's on "power lunch." >> still to come, oil on the move as opec discusses output cut. plus we talk retail, the consumer, the dollar, and more with william lauder of estee lauder companies. "squawk box" will be right back.
7:22 am
♪ okay, so you launched your bank's app. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. we're creating new platforms across channels so customers can effortlessly invest, borrow, lend, transact-wherever-whenever they choose. and we're digitizing the way banks run, driving efficiencies and delivering new value
7:23 am
for their customers in return. digital works for banking and financial services. lets talk about how digital works for your business. ♪
7:24 am
welcome back to "squawk box." the futures right now in the green. let's show you what's going on. dow looks it would open up about 48 points higher. nasdaq up seven points. s&p up six points higher. joseph? turning now to the broader markets. the 10-year, take a quick look. it's at 2.35%. that's pretty close to the highest yield that we've seen. take a quick look at the dollar which we were just talking about. strong dollar in the best
7:25 am
interest of the united states. that's what every treasury secretary says. it's better now. jim paulsen sent me something -- he said he thinks the dollar could weaken next year. andrew, you remember my experience with gold? i missed it. >> it's come back. >> it's back below where it was. i'm not doing it though. not doing it yet. not going to do it. i want people to come knots apart, i want them to come together. because i'm a decider. >> you know what today is? >> you get your shot. >> no. i'm looking for a nine handle. today is the last trading day of november. check out this month's return so far. the dow is up 5.4%. the s&p higher by 3.7%. the nasdaq has gained 3.7%. but the big winner post election, the russell 2000. up 11% month to date.
7:26 am
did leisman ever get back to us on what the compounded rate is? >> can you google that? calculator? >> i'll work on that. you've got stocks to watch. >> what if you just ask google? >> what about alexa? >> she knows everything. >> stocks to watch today. splunk? i didn't know you could say that. posting a third quarter lost. adjusted results beat forecasts on strong revenue growth. the company also raising its outlook for the year. nutanix a loss. adjusted profit and revenue forecasts. however, shares fell in after-hours trading. and autodesk is reporting a
7:27 am
third quarter loss as revenue continued to decline amid the shift to a subscription based model. still to come, ariana huffington on her new business venture. up next, though, oil on the move this morning as opec meets in e vienna. live report coming up next. generosity is its own form of power.
7:28 am
7:29 am
you can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix
7:30 am
in the same place as all your other entertainment. on xfinity x1. here's what's making headlines at this hour. royal bank of scotland cutting costs and boosting capital levels. that comes because the bank of england -- the bank failed this year's bank of england stress test. rbs has a capital shortfall of about 2 billion pounds. the equivalent of about $2.5 billion. consolidation continues in the supermarket business. albertsons is buying privately held price chopper for about $1 billion. regional grocers have had troubles competing against likes of walmart and amazon.
7:31 am
i feel like that's been decades. philip morris international may eventually stop selling cigarettes. wow. the company's ceo made that comment as philip morris was introducing a new smokeless cigarette product. he said such products could replace cigarettes altogether. opec leaders meeting today to discuss reductions in levels. steve? >> reporter: thanks very much. what a momentum couple of days yesterday in the market. 4% lower because they thought the saudis couldn't drag everything through to a deal. today a lot of optimism. about $50 a barrel on the benchmark, brent as well. i want you to listen to the comments the saudi oil minister said to me earlier. there are points to dissect afterwards. listen in. >> the sticking point has been and continues to be that each and every country will have to
7:32 am
agree to the principles that production constraint agreement bringing us close or at 32.5 that was adopt ed and tran mitted. there will be a mechanism to ensure full compliance. then to ensure that opec will also join with a substantial amount of cut. >> reporter: going to be distributed throughout the group as well. they have to have compliance throughout the group. compliance has been a sticking point for many people over the years. so a lot of positivity around at the moment. let's see what the proof of the pudding is.
7:33 am
>> all right, steve. you're where we need you today. all right. news making interview happened right here on "squawk box" just a couple of minutes ago. treasury secretary nominee steven mnuchin and commerce secretary nominee wilbur ross joined us on set. we talked about many of president-elect trump's plans including but not limited to tax reform. >> not the case at all. so any reductions we have in upper income taxes will be offset by less deductions so that there will be no tax -- absolute tax cut for the upper class. there will be a tax cut for the middle class but any tax cuts for the upper class will be offset by less deductions that pay for it. >> people that have watched
7:34 am
though show know of things we agree and disagree on. a lot of my fears were laid with him. he said he gives to democrats. you've got to give to democrats in new york. >> it was transactional, not conviction. >> when he talked about policy, when he talked about ways of approaching a private sector economy, he seemed like a true believer in doing it one way versus people that have other ways. i'm not worried anymore. >> you're on board. >> i'm on board. what about you? >> new secretary of state right here. >> i was thrilled that they were so willing to say we can get to 4% and not set in this stagnant -- >> 3% to 4% he said. >> he didn't say 3% to 3.5%. he said 3% to 4%. >> that's true. >> i think the left might save some of their ammo. i don't know.
7:35 am
sessions, they're not going to go after these two guys. >> elizabeth warren already out in force. >> i told you about her. she's left of where hillary was and hillary got routed. >> that may well be the case but that doesn't mean she's not going to ask horrific questions. >> are you going to enjoy watching her do that? she's be ineffectual. it'll be all for nothing. enjoy it when she does it. >> don't say that. you think it's for better. but go ahead. >> no, no. this is still a divided country. there are people on both sides of this. there are people who are still frustrated and anxious and worried. i think that he will get a difficult time. i think he'll get through, but i think people are going to ask a lot of questions and talk about it. >> there's a bit of an echo chamber in the new york media, that's all i'll tell you. nothing was really learned on election night by a lot of people that are still there.
7:36 am
you talk to one another about the protests in the tweet and that was the worst thing. now it's the flag in a tweet. to the media works on that for 24 hours. >> but if half the country -- >> what do you mean? >> i'm just suggesting that there -- >> how do you think that half the country felt under barack obama for eight years? >> yes. and i think there were people very frustrated and upset and you read and heard about their commentary. >> pennsylvania, michigan, wisconsin. these are states that -- i mean, there was something happening here. like the song, dude. >> let's chat more about this with our guest host for this half hour. william lauder and erik nordstrom. we're going to talk retail in a bit, but we just had a long conversation with wilbur ross and steven mnuchin who are going to be part of the president-elect's cabinet. the focus on tax cuts both for
7:37 am
individuals and also for corporations. going to be helpful to your business? >> well, i certainly hope over the time for corporate tax cuts it's very important for companies like such as ourselves at estee lauder and other global united states companies where we are not in a competitive tax regime compared to those not based in the united states. you're not talking about a small spread, you're talking about a dramatic spread which over time does start to tie your hands behind your back if your competitors are literally working with 10 percentage points difference. >> how are you seeing that impact your business? in what way? >> number one, combined with the strong dollar, our non-u.s. based competitors are using the strong dollar as a weapon against us. combined with the fact that there's a 10% to 15% average tax rate spread. they can literally live on the same margins that they're being rewarded for by their shareholders and still have room to compete with us.
7:38 am
>> in terms of their pricing. >> yeah. >> mr. nordstrom? >> being a domestic -- almost totally domestic company, this doesn't affect us as much. our focus are our customers. and whatever it is customers confidence to go out and buy something less important like shoes and clothes b we're all for. one of the things i was surprised steve mnuchin said, he said there would be in terms of on an absolute basis, at the top. >> they would eliminate deductions. >> right. >> my opinion would be i hope -- to benefit the economy. to the extent of the consumer understands what their actual take home is and what they can spend their money on, the more confident they're going to be in what they spend. right now it's so complicated that many people, they get their
7:39 am
paycheck and look at the deductions and go, oh well. the government's taken a lot out of it. granted, many of them get refunds later. but the more money that's in the hands of the consumer what they've earned on a weekly basis, the more politicly they are to go to nordstrom to spend. >> are we misunderstanding that? that is news if that's the case. given the commentary from trump earlier and the tax plan they've put out publicly, you thought the rate would come down across the board. >> but people said it all accrues to the wealthy were not taking in deductions at all. >> right. there's been a debate, but he uses the word in absolute terms. that to me is news if that's the case. >> would have to be through deductions. >> i think you're right. that hasn't been said yet. >> i'm not convinced. but there will be cuts in nominal rates and are even larger i think for the high end than for the middle, right?
7:40 am
>> how's the holiday season going to be? >> well, it's been okay. certainly been better online than it's been in stores. that's been for a couple years. but i think what you're seeing -- and holiday tends to magnify whatever is going on. and what's been going the last couple years, it's about the customer. the customer is more in control than ever before, less willing to compromise how to shop because they don't have to. i think in the industry we talk a lot about channels and i talk to customers every day. i never had a customer use the word channel with me. there's not online customers, not store customers. there's just customers. and increasingly how they shop involves digital elements and physical elements. and so our focus needs to be where it's been which is --
7:41 am
>> too many stores? physical stores? >> we've closed a few in the last handful of years. we're fortunate. we don't have hundreds of stores. we have 120 full stores that are in very, very good malls. so i wouldn't anticipate. there'd be a handful here or there. >> i used to be a trunk club user when they were independent. how's that acquisition worked out? >> we're thrilled to have it. it's a business we bought a little over two years ago. i would use it as an example of a point of customers wanting to shop on their terms. we believe in that way of shopping that a good chunk of customers like fashion, like newness, like great service. but don't want to come in a store. but they want more service than a typical web experience gives them. so trunk club model is terrific for that way.
7:42 am
we really believe in how it serves customers. so it's a start-up and we need to keep working with it to make the model successful. >> it was a weak spot. the recent earnings report, you crushed it. stock did great. but you did take a writedown on trunk club. what went wrong when you're thinking about in terms of what you paid? do you not get the scale? >> i asked the question much more politely. >> our sales results were less than when we bought it. you know, it's a start-up. it's a model that our team there has been working on it and changing it quickly as any start-up goes through. we believe in the model and we need to tweak it to make it better and better for customers. make it a successful part of our company which we believe it will be.
7:43 am
>> okay. william, off camera you said there are now things that used to take surgery -- and i was asking for a friend for a person's face that used to take surgery. and now there are things that you can use that you've done research and paid off. and there's creams -- >> you know, joe, i always come with props from your favorite brand lamair. the science that goes into so many of the products we offer our consumers today give the consumers the feel that they want and need without having to make the appointment with a dermatologist and go in and ask for shots and do other things. when you realize there are millions of consumers shopping in stores every day, they're walking into nordstrom and we're offering the product that helps them to feel really good about themselves. and they don't necessarily have to walk into an md's office. >> if you bring that home for your wife -- >> that wasn't the friend i was talking about. the friend i was talking about was -- she's fine.
7:44 am
she's fine. but anything -- needles in the forehead, that doesn't sound good to me. >> certainly not something i want to do. >> creams sound much better. >> absolutely. you can do that every day. >> or the surgery you don't need to have. that doesn't sound great. gentlemen, thank you. appreciate it. and if you were able to get your stock up 11% a month for 12 months, it would be 250%. >> wow! >> so we've got the answer to the compound. anyway, thanks. >> great to have you on. you can leave that behind. actually, we're probably not allowed to accept it. it's pricey. coming up, more reaction to news. steve leisman joins us. here's wilbur ross on "squawk box" this morning. >> tpp had terrible rules of origin. rules of origin means can stuff come in from outside the boundaries of the treaty countries. in automotive, a majority of a
7:45 am
car could come from outside tpp, namely could come from china and still get all the benefits in tpp and if it came in through mexico -- >> is that a bad deal? >> horrible deal. this is where i trade andrs. manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed-
7:46 am
and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit to see what adding futures can do for you. they are the natural borns enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful.
7:47 am
it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?
7:48 am
steve leisman joins us on the set to talk about our news making interswu with wilbur ross and steven mnuchin. >> capital "n" on news. let me go through it. no tax cut for the upper class. because in the second bullet item of course i have that answer. tax deductions will be absolutely limited. he mentioned mortgages. i don't remember what he said to charities? will charitable be deducted as well? eliminate parts of dodd/frank that reduce lending. at least from a point of view here, not scrap dodd/frank but go in and try to do things that reduce lending. he called the volcker rule too complicated. going on a few screen out of this. can sustain 3% to 4% economic growth. he believes interest rates will stay low for the next couple of
7:49 am
years. >> that's not consensus now. >> he said they're higher now. but depends what he means by low. >> that affects what happens to the dollar. >> all kinds of stuff. absolutely. >> that'd be totally different if we are in a low rate environment. >> and then this other comment, yellen has done a good job at the fed. >> just being nice. >> that's what you think. >> yeah. >> you saw that in the body language, the facial muscles, everything. >> he rolled it up with saying there are two open spots. >> yeah. they're goirng to fill them. and will increase the average maturity of the debt that has been going up slowly. the treasury likes to not play too many games with this. but the fact that interest rates have been low and they should have increased the maturity faster. >> you're a fan of treasury secretary lew, i know. >> i cover lew. >> i know. and i saw more sort of deep knowledge, acumen -- >> okay. may i suggest, joe, an apples to
7:50 am
apples comparison would be steve mnuchin is in office. >> apples to apples would be someone being a bureaucrat their entire life. >> i think jack lew knew a lot of things. he was brought in for a specific reason. >> what's that? >> to make deals with a republican congress. he got none. >> so it didn't work. ineffective even in that role. >> he was dealt a tough hand given what was going on. >> i thought he was brought in for that reason. my point is that it takes two to tango. but it takes only one not to tango. so i just would point that out. if you don't want to dance -- >> you don't want to dance when someone wants to do a ridiculous dance. >> look, let's talk about the ridiculous dance. >> raise taxes again. >> no. obama administration wanted to bring the corporate tax rate down. proposed 25%. they could not make a deal
7:51 am
insanely at -- now we have donald trump come forward and propose 15%. the number i've heard andrew by the way with 22%. >> right. >> did you hear that 22% number? but it's out afloat. >> a couple of people talked about it yesterday creeping up from 15% to 20% to 25%. somewhere in there. >> here's another way to think about this. donald trump has about a $6 trillion tax plan. the ryan plan i think is $3 trillion? and so paul ryan has a very detailed plan. the question is whether or not the ryan plan becomes the blueprint for the trump plan. >> again and again after the expiration of the bush tax cuts and they were able to come to a bit of an increase on high end, every single program that obama put forward was infrastructure plus tax hikes. infrastructure plus tax hikes. it was a nonstarter the entire time. you wonder why there was obstruction. it was never going to happen. and he tried to take it to the american public. the american public never backed
7:52 am
him on it either. so he did nothing for four years. it's the way it works. >> i'm told we have to go so i can't respond. joe's very good at that. coming up, ariana huffington and reaction to the interview from george mitchell. he'll join us too. checking on oil at this hour which is higher by nearly 7%. a gain of three bucks due to the talk in vienna. "squawk box" will be right back. . that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet?
7:53 am
7:54 am
7:55 am
welcome back to "squawk box" this morning. president-elect donald trump is nominating steven mnuchin as his treasury secretary. wilbur ross as commerce secretary. both joined us right here on "squawk box" earlier this hour. >> did you ever think, wilbur ross, that you'd work for the government? >> i didn't think i'd ever have a boss again. >> joining us right now is ariana huffington and now announcing it today, cofounder and ceo of thrive global. i want to get really quick your reaction. i don't know if you know steven mnuchin or have a reaction politically to where we are right now. >> i don't know him. it's interesting he's both wall street and hollywood. he helped finance which feeds the trump profile. he was the finance chair.
7:56 am
so far what he said to you today on the set does not match the trump populism. >> i want you to come back at some point to just talk politics and former "huffington post." but i want to talk thrive global this morning. today you're launching. explain to those who are uninitiated. >> so thrive global is a company i'm launching in response to the global epidemic of escalating stress and burnout. >> this year caused a lot of stress and burnout in people's lives, this election. >> it did. but it's been escalating for a long time. our relationship with technology has made it harder because it's made it very hard for us to be able to take time off, to be able to recharge. and the unintended consequences are horrific. health care costs now are reaching the point where 75% are stress related and preventable.
7:57 am
that doesn't just lead to health problems, but bad decisions. and this whole collective anxiety we're seeing everywhere is exacerbated by stress and burnout. so our company goes into corporations and deals with the culture through trainings and courses. we launch a media platform today. >> we are a little stressed out on time today but you're going to come back and help destress us and we'll have a longer conversation about all this. thank you, arianna. >> thank you. >> does that mean you'll get a massage? coming up, george 34i67 el. check out futures. they suggest a positive open. we'll be right back. a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create,
7:58 am
not just wealth, but things that matter. morgan stanley
7:59 am
8:00 am
breaking news right here on "squawk box." >> with the number one priority is going to be make sure that banks lend. >> we are the big market. we are the world's biggest importer. we need to treat the other countries as good suppliers. >> president-elect trump picks steven mnuchin to run treasury and wilbur ross to run commerce. minister gather in vienna. plus jobs in america.
8:01 am
we're minutes away from the adp employment report. we'll bring you the numbers and market reaction as the final hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc. i'm joe kernen along with andrew ross sorkin and michelle caruso-cabrera. is it that important? it's like pretentious. >> first last name. >> all right. okay. look at oil. wow. now we're on maybe there will be a deal. who knows. stay tuned. futures right now have been going up after three straight weeks. and then up yesterday. here we are again. up 50 points. people who worried about the
8:02 am
train leaving the station two or three weeks ago, the train did leave the station. but you should have run after it and jumped on it. >> question is should you jump on now? >> that's what you say every single day. it's always the same question. >> yes. that's what everybody wonders. am i too late. this is the question. >> i wonder. >> you're not. no. it's going to be great again. relax. >> all right. there. dallas fed president robert kaplan speaking this morning at the economic club of new york. he's saying the fed should take steps to normalize policy and adding there are costs to excessive accommodation. he said he supports structural and fiscal policies like regulatory reform to promote economic growth. kaplan is not a voting member of the fed this year but he will vote in 2017. and by the way, steve leisman will speak with kaplan later on this morning at 11:00 a.m. eastern time on "squawk alley." you want to tune into that. we've had an historic
8:03 am
morning here on "squawk box" thus far. steven mnuchin and wilbur ross joining us on set to confirm that president-elect donald trump has chosen them to serve in his cabinet. mnuchin running treasury and ross commerce. covered a wide range of topics this morning including trade and taxes. >> i think that interest rates are going to stay relatively low for the next couple of years. we're in a period of time of low interest rates. interest rates have come up a little bit which i think makes sense and i think we're going to be looking at the treasury, all different types of opportunities. we'll look at potentially extending maturity of the debt because eventually we are going to have higher interest rates and that's something to deal with. >> protectionism is a pejorative term. it's not really something that's meaningful. there's trade, sensible trade, and dumb trade. we've been doing a lot of dumb trade. >> a lot of news gets made during that conference. and joining us to discuss it
8:04 am
george mitchell. senator mitchell served as u.s. special envoy for northern ireland and the middle east. he's now coauthor of a new book. "a path to peace." we're going to talk about the way forward and advice you might offer the president-elect. also mr. leisman is here trying to break down some of the news we learned from mnuchin and ross. good morning to both of you. do you know either of these men? >> i know wilbur ross. i don't know mr. mnuchin. >> do you have a view? >> i like wilbur. he's a smart guy. >> and do you think -- given the side of the aisle you're on and the other side of the aisle that they're going tok able to get things done. >> they're going to be able to get some things done. obama has proposed infrastructure for several years. been blocked by the republicans in congress. now favors it i think they'll come around and support an
8:05 am
infrastructure program. >> and what about on taxes? >> well, on taxes it's complicated but you can pass a tax cut under reconciliation in the senate. that's how the bush tax cuts were passed. that's how the affordable care act was passed. you can do it with a simple majority opposed to 60 votes. i think that's likely to happen on individual tax rates on corporate tax which i think is probably more important. it's somewhat more complicated and would take a combined effort. but both are committed to reducing the corporate tax rate. >> right. donald trump has talked about a 15% rate. yesterday we heard people talk about 25% rate. where do you think it ultimately lands? >> those are starting positions i think. i think it will be somewhere in the 20s. >> they said 15%. >> every negotiation, that's the same thing people have said.
8:06 am
>> took away from it that we're still trying to understand is the donald trump public position on taxes and what we heard today at least on the higher end, the idea that there will not be a bigger tax cut. what is it? >> i'm trying to remember back to the original documents that were put out. i seem to remember something about limiting deductions. but the notions that steve mnuchin just said, there will be no tax cut for the upper class. and the result of this will be that the deductions will be limited -- the deduction in rate means no change in what they pay. it's an easier tax system. there's a lot to be said for this, but here's the problem. i've long talked about this. it's not a democratic or republican problem. it's a lobbying problem in that
8:07 am
you have these lobbies like -- and the senator can talk about this. the real estate lobby, the doctors lobby. these are lobbies that cut across party influence here. and if the deductions are going to be limited, it's going to be matter of parties coming together to withstand the onslaug onslaught. >> had a detailed plan on taxes which was a mnuchin plan to begin with. i think the high end was capped at 33. that implied there was not going to be any deductions left. it was going to be 33 and that's what it was going to be. that's sort of where a lot of people end up right now on the high end after all your deductio deductions. you're paying about -- some people don't pay that much. but most people if you don't have some kind of offshore something or other, you're at about 33%. >> joe, if i can make a comment. president-elect trump made initially a tax proposal.
8:08 am
and then speaker ryan issued a plan in june. subsequently the trump plan was modified several times in the course of the campaign. most of it movement toward the ryan plan. >> right. >> and i assume that now in negotiations to have an agreement which i think is likely to be fairly close to what speaker ryan -- >> it's interesting you say corporate is more important. it's such a small number. but i think you figure there's not going to be that much change personally. although, at least capital gains aren't going up. if hillary clinton were elected there were going to be quite a few changes. >> but i think there will be changes in the corporate tax rate. i do think it is important beyond the question that you just raised about the total amount of revenue. because it has an effect on business, growth, and jobs. >> as i understand it, they're going to do this repatriation thing but then go to a territorial tax system which is
8:09 am
a massive negotiation. now, it's also a massively good rationalization of the american tax code so you don't have to keep coming back and doing repatriation taxes which is a very inefficient and dumb way to do it. but getting from that system to the new system -- >> then the question is the ultimate revenue you can capture through a territorial system is going to be significantly lower over time. and that's -- >> not necessarily. >> you don't know that. because they've kept the money overseas. >> that's a question. we'll have a debate about this. >> and there's going to be debate about this. >> if i could make one additional comment. a difficulty in resolving all of this is the question of how you tax pass through corporations. and, skroe, that's the issue with respect to the 15% corporate rate. you have a dramatic increase in the use of pass through organizations. now many people with very high incomes take them in that way. if you reduce the corporate rate to 15%, you effectively cut
8:10 am
taxes. how that's resolved will be a major issue. >> when we teed up this conversation, one of the things we talked about is the least. here's what i wanted to ask you. you watched these almost public i call apprentice for this role of secretary of state. who do you think would make a good secretary of state? in terms of negotiating so many of these and elsewhere. >> i supported secretary clinton. so persons i believe are not under consideration. >> given the choices that are out there. >> i leave it up to the president-elect. he's got plenty of choices. >> if given the choice of romney or giuliani. you can pick. >> i've always held the view that a president ought to have a deep deference in terms of he or
8:11 am
she chooses to support in the cabinet otherwise. >> jared kushner's name has been in the press a lot lately as someone who may play an important role in israel. do you know jared? >> i do not. >> do you have any faith there will be movement? >> i'm hopeful because president-elect trump has said he regards this as an important issue that he would like to do a deal there. he said some say it's impossible. but he would like to get it done. i think it will take direct presidential participation to get it done. and i hope he will succeed where previous presidents and sec tars of state have not. >> senator, don't move. we want to bring another voice into the conversation. joining us on the set is mark zandi. we've been talking about our news making conversation this morning with -- >> i've been watching. >> -- steve mnuchin and wilbur
8:12 am
ross. we want to get you to respond to this, what wilbur ross said about janet yellen. >> i think that she dealt with a very difficult situation and did a reasonably good job. i do. >> she may serve out her term, be renominated? >> that's a question for her and the president. it's not a question for us. >> steven mnuchin, though, also volunteered there are two vacancies and they look forward to filling them. what'd you think about that? >> i think she's done a great job. i don't think you could have asked much better from her. there there are two better positions. those are two key positions they will try to fill before 2018 when the term is over. i think she stays. i'd be very surprised if she decided to leave. between now and then. but i think she'd do a great job between now and then.
8:13 am
>> did you hear the discussion on taxes? >> parts of the discussion. >> okay. with wilbur ross and -- >> yeah, we can ask mark. because mark scored the plan. was the capping of deductions part of the original plan was one of the questions we had. >> yeah, it was. >> yeah. >> but even with that, it was $9 trillion cost static. $9 trillion over ten years. >> but mnuchin said at least for the high end that the rate would not -- you'd be paying the same amount of taxes. >> he said there'd be no tax deduction for the upper class. >> well, i mean, that's a different plan. so trump had his original plan and then he changed it in the summer and reduced the cost of the plan, the static cost of the plan. but still the benefits largely to a household. >> say that, okay, their rate will go down, yes, we will still write the dollar amount because the deductions will be so limited. >> is that new? >> that's new. that's new. that is not in the plan --
8:14 am
>> so you have to go back and look at the score sheets. >> based on that comment, that's tough to do. although i can give it a shot. >> make sure you put it on moody's analytics so all like the ratings agencies. >> you know how sensitive we are to that. >> everybody on the street that hated the plan acted like moody's or s&p was calling this like they were going to get down -- >> we are so careful about that. >> moody's moody's moody's. >> like everybody else blames the media. it's the media's fault. >> it's moody's analytics. big difference. >> you got an issue of brand confusion. >> they love saying it's moody's. the adp unemployment report for november just is going to cross the tape. we're going to look at the --
8:15 am
>> in 21 seconds. you got to vamp, dude. dance. >> we'll look at the futures first. >> okay. >> you're obnoxious. anyway, there they are. up 51 points now on the dow. the s&p up 6.5 and the nasdaq up 5.5. this is -- i mean, if we were to do this early i'm not sure what might happen. >> we'd get a nasty letter from adp. >> steve, the numbers, please. >> okay. the number is 216,000 which is well above the estimate of 170,000. but i will tell you they've revised down the prior month. pretty big revision. we haven't seen these before. so not a big change i think in the average of the two months. and goods production fell by 11,000. services surging 228,000. and there's the non-farm payroll estimate which you can imagine might see a bit of upside revision the next couple of days if this number is north of 200,000. then we get a new and better breakdown from adp. i believe this is the second month that we do of where it was
8:16 am
by sectors. down 10,000 in manufacturing. there's leisure and hospitality that has been surging ahead. i think we want to -- have r you speciesed to bring in mark zandi? >> did you put up the retail trade number? i can't see. it was very large. it was a very big increase. >> and that's a seasonally adjusted number. do you think this is a positive sign for the -- >> i think retailers think it's going to be a good christmas and they're hiring. what the data says. and the report underlying looking at the internals of the data, they're very strong. labor market feels very good. mr. trump is inheriting a very strong economy. >> but not one that has felt strong as steve mnuchin said to a lot of people. and the idea -- and i think it was wilbur ross who said the jobs that have been created have not been jobs -- he used the
8:17 am
word ra munertive. >> we just got the full -- we're just now at full employment. we dug ourselves a very deep hole. the unemployment rate peaked at 10% in early 2010. you don't get back to 5% in a year. >> we have to push back against you. okay? the concept of the incoming trump administration is this. we can loosen regulation. we can do away with parts of dodd/frank that reduced lending. we can cut taxes. and we can raise essentially potential growth. now, joe asked, you mean a quarter of 3% or 4%? he said no, we could get up to 3% to 4% on a sustained basis. can you put the numbers into your model there? >> corporate tax reform is an absolute must. this is a perfect window to go
8:18 am
through it. get corporate tax reform. get the marginal rates down. go to a territorial system. deregulation, i can see it. you know, i think there's good things in dodd frank but there's a lot of bad things. >> how many points can you get out of that? >> long run -- by the way, this isn't going to happen in four years. this happens over decades. so if you told me the next -- when cbo scores this and i'm -- my models are cbo, over a ten-year period. because -- now, depends on what kind of corporate tax reform. but say we go from 35% marginal rates to 25%. we're never getting to 15%. you can't do it. and you go territorial and get a repatriation. now, that's real money. >> a percentage point is -- >> it's doable. >> so here's the other point.
8:19 am
giveth with one hand and taketh with the other. to increase the economy quickly. you can do that overnight. let more stick. all you do is stamp a visa on the head of college graduates from overseas. that is me most obvious way to raise potential growth. >> george mitchell, i have a question for you just about the democratic party. is there a lesson in what's happening here in terms of how the democrats approached the economy? >> yes. i think the campaign did not stress enough the importance of jobs, economy, and they didn't rebut the case on trade. the republican party for 75 years has been the party of free trade. all of the free trade agreements were pushed by, supported by, and enacted by republicans. >> what are the conversations you're having with your peers about how to rethink the approach then? >> to i think pause what you see
8:20 am
wilbur ross moving to now. trade's not bad. we just have to have the right kind of trade. you're going to see more trade agreements. they'll have to be in a way that mitigates the damage to individuals who lose jobs as a result. >> trade agreements don't happen quickly. tpp took many, many years. of course those multinational and therefore more complicated. >> they want no regional trade agreements. they start with one after another. >> that's going to take a long, long time to execute on. >> they're going to find that's very inefficient. i think donald trump is going to get two briefings. one is going to be about the ufos and the aliens. then the briefing about trade. >> i'm so lost. >> i think what he's going to learn is that america runs the world and it runs the world in part through its trade agreements. and i think those trade agreements are done not because of the absolute dollars and
8:21 am
cents balance sheet of a trade deficit here, trade deficit there. it's done because there are geopolitical concerns, all sorts of things being balanced out. that is beyond just the dollar deficit nurnl. one of the reasons we've done trade agreements is so we don't shoot and kill each other. there's a value to that that doesn't come out in the trade deficit. >> that is a key point. the european union they say peace project. nato. >> not a dollar cents project. >> it's a peace project. economic growth through international trade is part of a peace project. >> you know there's a growing voice over there that says that the reason the european union exists is because of peace and that peace doesn't exist because of the european union. i mean, that's been totally turned around over there. >> but i agree to disagree with that. in 1870, 1914, and 1939 europe was devastated by major land wars. 68 million people died at a time
8:22 am
when the world's population was less than half of what it is now. those who say that the effort after the war led by the united states to establish peace in europe and around the world failed are incorrect. >> the reason the euro and the eu can exist is because of those efforts. >> because it runs both directions. come on. >> that's the way they're talking about it in europe. all the way around. >> it's a fact of why they put it together. >> and it's all going to be in the -- >> but they were specifically motivated, michelle. by the notion of if we have economic integration, we're less likely to have blood. >> because in throughout history trade wars in establishing a mechanism to regulate and encourage trade in a manner that would benefit both countries the exporter and the importer is a part of the peace effort inaugurated by the united states
8:23 am
and the united kingdom during and after the second world war. >> gentlemen, it's been so great having you on. we really appreciate it. senator, always an honor to have you. and mark zandi, always an honor too. >> thank you. coming up steven mnuchin and wilbur ross tapped by donald trump for cabinet nominations. they confirmed here on "squawk box" at 7:00 a.m. we'll tell you what was aid about dodd/frank and banking regulation. first as we head to break, check out oil prices as we await word from opec. stay tuned. you're watching "squawk box."
8:24 am
they are the natural borns enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful.
8:25 am
8:26 am
all right. oil prices look at them now. up almost 7%. opec sources say that opec has agreed on algiers' plan to cut oil output. oil output. now it is a 7% gain in wti as well as brent. which is up even more. wow. back to $48, closing in on $50. we were just at $44. it's been an historic morning here on "squawk box." steven mnuchin and wilbur ross confirming right here that they are president-elect donald trump's picks to head treasury and commerce. we covered a lot of topics including changes that could
8:27 am
impact the banks. wilfred frost -- almost called you wilbur. sorry. wilfred frost joins us with more. >> he's wilfred frost. >> reporter: no worries. let's get into this. said that one of his top agenda items regarding banks is to make sure that they lend again. this and other comments will be welcomed by the banks even celebrated, in fact. here's what he had to say about the potential for deregulation specifically dodd/frank. >> the number one problem with dodd/frank is it's way too complicated and it cuts back lending. so we want to strip back parts of dodd/frank that prevent banks from lending. and that'll be the number one priority on the regulatory side. >> reporter: he also said the volcker rule itself was too comp plex. all of this adding a bit of meat to the bones around the rumors of deregulation we've had in recent weeks.
8:28 am
he also made it clear they intend to cut corporate tax. this has been somewhat overlooked for the banks. it's a big positive because most of the banks are paying close to full rates at the moment. slightly less so for citigroup because of their deferred tax assets. then finally, think of where we could have been under secretary clinton if she'd been elected. this is why banks will be so relaxed because as mnuchin said, wilbur and i have been bankers. we've been in the region of banking and we understand what it is to make loans. banks therefore feeling confident that there's going to be someone there that understands what they've faced over the last eight years. bank share prices fairing in the premarket. guys? >> all right. all right wilfred ross. wilfred frost. >> i'm sorry. i'm sorry. >> you were making sure you didn't call him wilbur. >> i blew it the other way. joining us now on the squawk
8:29 am
newsline with investment ideas, ian katz, director of capital alpha partners. ian, hopefully you were able to hear some of wilfred's report there and are up to speed on all the features that came out of our interview with these two new cabinet nominees. >> yeah, i was listening. yep. >> what'd you make of some of that? >> well, i thought mnuchin in particular came off as measured, right? he's not -- this is quite different as you have pointed out. this is quite different from the campaign talk that trump was putting out during the summer and fall. it was much more measured. he isn't -- he did not come off at all as a flame thrower like we're going to burn everything up. it's much more stripped back, parts of dodd/frank i think were his precise words. so they're going to look for particular things they can do to boost lending. he mentioned the volcker rule.
8:30 am
they're going to take a look at that. but it was an approach that was not as extreme as some of the rhetoric we've heard from other quarters. >> although he was there through thick and thin. so i don't know. it's like we've pointed out many times campaigning and then post campaigning. president-elect at dinner had frog leg soup with romney last night. that would have been a little unexpected as well. you think we can do -- go ahead. >> no, that's fair. i mean, and you're seeing -- it's a bit of reality. i was also going to mention that his words about janet yellen were fairly complimentary. and that might be because within a couple of months assuming he gets the job, he's going to be talking with her on a regular basis. >> yeah. is your view that we get a
8:31 am
couple of quarters of 3%-plus then are hit with reality in this world of today that 2.5% is all we're entitled to? or do we get to 3%, 3.5% and continue to accelerate or sustain that? >> well, it's going to be tough to sustain it, but of course it all depends on what we get out of legislation and what happens in the next several months on the hill. i think you're going to see -- i think you guys were on the mark that you're going to see this beginning on corporate tax at 15%. it'll edge up something like 20 is probably more realistic. and then you'll have to crunch the numbers there and see what does that give companies. but even 20% will be a big boost from where they are. so there's a lot of potential for very solid growth. >> just -- i keep hearing that the only way to -- there is a viewpoint and it's mainly from the left, i think, that the only
8:32 am
way to get growth is to sort of do the infrastructure. democrats only idea is only ever infrastructure. it's dig a hole, fill it up. then we get the short-term burst, you know, of stimulus. then it always falls back. isn't there anything to the notion that you can unharness the private sector and actually not just with infrastructure? but actually leave more money in the private sector, make risk taking, you know, less, you know not as hard to do? and then you see that happen or is that not -- >> i don't think anybody's debating that. >> i'm talking about you in general. if your idea is infrastructure the only thing -- >> no, no, no. if you want to get to 3%, 4%, 5%, 6%, that has to be on steroids. that's an infrastructure world. life is relative.
8:33 am
you have -- >> all right. this is the counterfactual we're going to test again. we tested the brexit counterfactual, ian. we tested the trump counterfactual. now we'll see if it's impossible to get above 2% on a sustained basis. i don't know why it wouldn't be. >> no. you could definitely get -- you'll definitely get over that. and you mentioned infrastructure but of course the big issues coming up will be that one and the tax cuts and how deep they go will be essential. and of course deregulation, freeing up lending as they want to do will make a difference as well. you pile one on top of the other and you can get a real big burst for sure. >> i put infrastructure last. whether it happens one way or the other. you can get the bump just from that. maybe you get the short-term bump from some infrastructure. we appreciate your time today. thank you. coming up, a former cabinet member under former president bill clinton will weigh in on the cabinet members we learned about this morning. william cohen will be here right
8:34 am
after the break. first, though, check out the price of oil which is surging on expectations of a deal out of opec meeting in vienna. higher by more than 7%. $48.42 for wti if you want it delivered in january. "squawk box" will be right back. . this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit to see what adding futures can do for you.
8:35 am
8:36 am
generosity is its oyou can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1.
8:37 am
if you look at both of us, this will be a coordinated aspect. there are enforcement aspects in commerce and enforcement aspects in treasury. so if we determine that we need to label them as a currency manipulator, that's something the treasury would do. >> that was president-elect donald trump's pick for the treasury secretary steven mnuchin joining us first on cnbc this morning. joining us now with more on the presidential transition former defense secretary william cohen. sir, good to have you here. >> good to be with you. >> you're the former defense secretary. you want to say anything about the possibility for corporate tax reform and individual tax reform in this country? >> i think i'll leave that to the experts, but i was interested in hearing feel comfortable president-elect trump is now picking people from the banking industry that have banking experience. i'd say that's a good thing.
8:38 am
the same analysis would apply to state or defense. you want to have people have world experience and have the ability to see things through a much larger lens than you yourself might be able to have. so i think expertise in the fields of foreign policy, security policy very important for the next two picks he's going to have. >> who do you think he should pick for secretary of defense? >> i think he should -- well, he's got an array of people he can pick. i've heard lots of rumors about jim mattis. i know him and admire him. i think he's a warrior but a scholar as well. he would be one of the first i'd look to. but there are others on the list. i would say someone who does see the world in a way in which -- in all of its complications and subtleties and has wartime experience to call pon to make recommendations. the secretary of defense is
8:39 am
number two in the line of command -- chain of command. you go from the commander in the field directly secretary of defense directly to the president. so there's no chairman of the joint chief, no vice president there. it's the secretary of defense. so you want someone who is very knowledgeable about defense and security issues. the big issue for jim mattis and perhaps others would be whether he's been out of the military long enough to qualify to serve in that capacity. i think he can. it'll be an issue for congress to decide and obviously the president of the united states first. >> what do you make of what's going on with the position of secretary of state? do you have an opinion on whether or not it should be mitt romney or giuliani? or general petraeus? >> it really is up to president-elect trump. here's the issue. the president is entitled to his cabinet. unless you can find a compelling reason to vote against, then you
8:40 am
should be supporting the president's pick of key cabinet members. if president-elect trump thinks it should be giuliani, that's the choice. it has to be somebody that the president feels confident can carry out his policy. the secretary of state doesn't make policy. he simply carries out the policy established by the president of the united states. so if i were making a choice, i would look at the qualifications of the individuals, their world experience, how they carry themselves, what sort of diplomatic skills they have. and look at that at the image that would create for the united states in terms of whether or not somebody who is seen as worldly or knowledgeable. basically the president of the united states has to feel this man or this woman is the one i want and i have confidence in him or her. >> quick word on general michael
8:41 am
flynn? there's been questions about him on the left. >> general flynn served this country admirably as a war hero. having been secretary of defense, i can tell you i have nothing but admiration for anybody who wears our uniform and has committed their lives and that of their family to this nation's security. so general flynn and others who wear -- have worn the uniform deserve our respect. >> does that mean he deserves the job? >> well, the issue for the national security adviser is one not simply of taking military experience. he has that. the national security adviser basically is in the position to try to manage the interagency process. in other words, you have conflicts that arise between state department, defense department, cia, treasury department. the national security adviser has to manage all of those intraagency difficulties and
8:42 am
issues so that you present to the president the least number of numbers for him to decide. and that's the job of the national security adviser. building consensus on issues that need to be implemented without having to go to the president. so if he has those skills, then we'll see. but he's been chosen by the president-elect, so it's up to him to carry out the mission. >> secretary cohen, thanks so much for joining us this morning. we appreciate it. >> my pleasure. coming up when we return, it is the last trading day of the month. check out the november returns so far. the big winner of the trump rally the russell 2000. up 11.5% in one month. as we head to break, quick check on the futures. we have green arrows this morning with dow looking 50 points higher. we will be right back in a just a moment.
8:43 am
will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at
8:44 am
8:45 am
welcome back to "squawk box" this morning. steven mnuchin telling us this morning the trump tax cut will contain no tax reductions for the wealthy due to a cap on deductions. robert frank joins us with a little bit more of a look at the math on that. >> there was a lot of discussion this morning about whether this was new and it's not. looked at the trump plan which was the revised plan announced this summer contained a cap on deductions for single filers at $100,000. at families for $200,000. the tax center scored on those being included. and they said once again that
8:46 am
the top 1% would get a 14% reduction in taxes, the middle and bottom would get less than 2%. now, this also assumes that congress is going to allow limits or reductions in the charitable contribution deduction as well as the mortgage interest deduction. those are big ifs. i want to clarify because there's been a lot of discussion on maybe the deductions are new. not only aren't they new, but they're not going to offset the reduction in the top rate from 39% to 33%. the capital gains from 38.3% to 20%. and all these other tax cuts for the top. it's hard mathematically to see how possibly they could be offset with a cap on deductions. even if congress allows those deductions, guys. >> okay. good math. thank you for that. when we return, jim cramer is going to join us live from the new york stock exchange.
8:47 am
get his take on the top stories and the words mnuchin and ross spoke about. we're back in a moment. they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business.
8:48 am
8:49 am
let's get down to the new york stock exchange. jim cramer joins us now. i believe opec.
8:50 am
my money's on opec. they're going to do it. no? jim, what should we take away from it? >> it's quite different from where we thought it would be. we thought initially it would be a freeze of production, then maybe a cutback. now we're getting the statements are of a cutback that is the largest i've heard the whole is heard of all time. so in 72 hours we went from a freeze to the highest level to a level if we did cut back would actually produce prices that are susta sustainablely at 50. >> you are familiar with a lot of the stuff he's done. i think he's impressive as a turnaround guy, obviously. didn't know mnuchin as well, maybe you did. what did you think? >> in passing i've met him. his dad was running the trading desk when i was at goldman sachs. his dad is brilliant. no doubt in my mind this is one of the most sophisticated guys you can have at treasury.
8:51 am
i would say that they are people if they said, look, you know, i think you should like the u.s. and sell emerging markets, we would do it. in other words, there are tv networks ilk. >> yeah. is that what we need, jim? let's try it, right? let's try some private sector stuff. >> did president obama know any of these people? did president obama know cnbc? did he know? i think we all know wilfred frost, we know his view. i feel comfortable with what he says, but at least he speaks the language. >> right. all right. you don't have to start off with the idea that the private sector is someone that you need -- or something that you need to harness and sort of be confrontation with. >> exactly right. that's the real takeaway for your whole morning. unbelievable interview, guys.
8:52 am
congratulations. >> thank you, jim. see you in a couple minutes. the race for the cure of -- bob wright joining us to talk about not autism but something else we'll tell you when we return. ♪ is it a force of nature? or a sales event? the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event. (bing) we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments
8:53 am
and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
8:54 am
but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet?
8:55 am
pancreatic cancer kills a staggering 92% of those diagnosed with the disease. it's the third leading cause of cancer related deaths, that's why our next guest who lost his wife, susan, that we all knew and loved for me 25 years, but you were married for 49 years, lost suzanne to the disease and you're fighting now to raise awareness and help other patients avoid the same fate. former chairman bob wright joins us this morning, founder of the suzanne wright. you have the logo on autism speaks on as well. you're busy. >> autism speaks taught me a lot about dealing with congress and dealing with the nih in particular and health and human services. and i can say, joe, by the way, the website is and you can get all of this from
8:56 am
it. but what i'm advocating is something very different from what other people have done. i'm not trying to get research money. there's research available. what i'm trying to argue is that we need at the nih and the nci, we need leadership, we need prior toization and we need urgency. and these things are in every business i've ever been associated with, not for profit, for profit, the boy scouts would do this, general motors would do this, they do it here, when you have a problem, a serious problem, you call in a group whether it's you calling in or somebody else calling you up saying, listen, we have to do something in ten days or 15 days or 25 days, how are we going to do this? how are we going to cover the greek crisis? it's costing a fortune, how many times is michelle going to go back, all of that stuff, it has to get ironed out quickly. they do not do that. they have insulated themselves from that process at the nih. $35 billion worth of spending.
8:57 am
and it particularly hurts pancreatic cancer, which is the highest mortality rate of any of the cancers and yet it's not on any priority list. it has no sense of urgency to it and there's no leadership driving it. so that leadership's going to have to come in this particular case dr. tom price. but he's probably got obamacare for his umbrella. but somehow or another it's got to get in here. there's a 21st century cures act, which i believe the president just signed off on the amendments from congress. it's really republican program heavily supported by democrats, and it's a $6 billion package. it's going to be signed i think into law within the next three or four days. and my point is that that's where congress manages its own funds through the appropriations committee and through the omb. once it goes to the nih, it's
8:58 am
internal to the nih. >> and they make the choice. >> and they make the choices. they did make the distinction what's going to get done first or second or third. it's not open to the public. it's not a discussion you can have. we raise $3.2 billion for autism through congress. it all went to the nih. and i wish i could tell you that 50% of that money was well spent. i wish i could tell you that. so this is one of these things where i'm focused on pancreatic cancer, which is in desperate need. 40 years with no improvement in mortality. 93% deaths. it's a death disease. and there's no reason that should be the case. >> well, we need -- i guess we need a marker for early detection, don't we? >> there is work out there. early detection is a perfect example. if you took five or ten of the better people in the united states, they call them into the nih and said we're going to give you $10 million, you're going to spend this within the next year and a half or year, but you're going to start working together,
8:59 am
you from stanford, you from harva harvard, it's open, exchanging information on a daily or weekly basis, we're going to monitor. if you don't do it, you're going to get cut off on the money. we want written results every week. you could get this thing moved up so fast. that's what you do in business. that's what we all do. but they don't do that. and that's my argument. and i think it's probably effective now when you see $6 billion coming that way and that's the same kind of a thing. >> yeah. bureaucratic nightmare in a lot of -- i didn't realize the nih was quite -- >> as bureaucratic. >> well, see, it's an insulation. it gets them insulated from lobbying, gets them the ability to say it's all science, you don't understand. science moves slowly. well, when you're giving single grants out and not packaging those grants, you know it's going to go slowly. think about that. >> thank you. >> great next endeavor. let's take a quick check on the markets before we go after
9:00 am
what was a historic morning this morning. speaking both to newly appointed treasury secretary and commerce secretary in wilbur ross and steve mnuchin. crude 48.79 and markets pretty much across the board up in the green. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla, jim cramer and david faber at the new york stock exchange. final day of november looks to be the second best month of the year. futures positive. tons of news including two big cabinet picks, steven mnuchin to treasury, wilbur ross to commerce, both on cnbc this morning. personal income fastest rise in six months and oil is soaring on these headlines of an opec cut. road map begins with treasury


info Stream Only

Uploaded by TV Archive on