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tv   Power Lunch  CNBC  December 12, 2016 1:00pm-3:01pm EST

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>> still like that trade? >> i love that trade. absolutely. >> sorry to add to it but lockheed martin, 5% bit end of the week. >> the defense stocks in focus, northr northrop, lockheed, raytheon. that does it for us. "power" starts now. welcome to "power lunch." i'm michelle caruso-cabrera. lockheed martin, all those guys liked it. but still in the cross hairs of president-elect trump tweeting about the cost of the f-35 fighter. the latest on the plunging stock. new day, new record highs for the dow and the s&p. two reasons why the market is still going even higher. and three stocks you may want to own along the way. amazon getting delivered. jeff bezos set to meet at trump tower. "power lunch" starts right now.
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>> we're also live in washington, d.c. today. what do members of congress think about trump's tweets? we're going to find out. we have senators orrin hatch and mike warner and john delaney, he's the only serving house member who is also the publicly traded ceo of the company, so we have a lot of stuff coming from washington, d.c. about what is going to happen, melissa, and what may not happen. we're going to dive into the investing risk, not just defense contractors, with chris kruger. the whole market is acting like everything is going to get done. i can assure you that's not the case. we'll figure out what actually will and will not happen live from washington, d.c. the dow and the s&p 500, michelle mentioned, both hitting new record highs again. but the s&p 500 right now in negative territory. oil up 4% on saudi, russia production cut news, prices hitting a 1.5 year high. some of the energy names hitting 52 week highs in today's session. look at this, yields on the ten
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year above 2.5% for the first time in more than two years. results of a ten year note auction moments away. a developing story we're watching closely, a cbs viacom deal looks to be off the table. shares rebounding after being down earlier. we have much more on this developing story straight ahead. first to the stock of the day, lockheed martin, president-elect trump taking aim at the f-35 saying the fighter jet program costs are out of control. and that billions will be saved on the military after his inauguration in january. the stock is reacting and lockheed is fighting back. morgan brennan is here with more details. >> so shares of lockheed martin, look at those, those are down today. the broader defense sector is falling as well. ita down 2% today. all of this on the heem heels trump tweet.
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the contractor giving a lengthy response saying the company understands concerns about affordability. and -- but that lockheed has invested millions of dollars to reduce the airplane price by 60%, projecting that the price will be $85 million in the 2019 to 2020 time frame, which would make this the least expensive of the fourth generation fighter jets in the world. so those comments coming from israel, where two f-35 planes are just arriving now, making israel the first of a handful of u.s. allies that will have the american made fighter jets in operation. the f-35 is the most expensive weapons system in history. it has an estimated $400 billion price tag that is nearly double the original estimate, and that has drawn criticism for years. so perhaps not surprising that trump would focus on this. the second tweet, taking aim at a defense company, following that boeing air force one tweet last week. it draws into question wlplans r defense spending.
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a trump administration has three and potentially more and counting generals that have been tapped for adviser or cabinet positions. >> the company probably not surprised to get criticism, maybe at this level surprised. but they have an actual website set up where when you go to it, they have a map, where you can click on every state and say, how many jobs were created by the f-35. how much of an economic impact was created. they're used to receiving criticism based on the program. >> it has been coming under fire to some extent for years now. it is not just lockheed martin. there are a whole lot -- hundreds of suppliers that are involved in this f-35 program, including united technologies pratt and whitney division and northrop grumman. >> this doesn't necessarily preclude an increase in defense
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spending. >> that's going to be the big question, how is all of this going to actually look and play out in coming years. >> the trade-off. thanks, morgan. another one of donald trump's former rivals staying at trump tower, carly fiorina, considered for national intelligence director. this comes as the leading contender for secretary state raising eyebrows. john harwood has the latest from washington. >> carlie fee reapia met with the president-elect at trump tow, came out and gave a short set of remarks to reporters and said she was more concerned with china than russia. take a listen. >> we got down to more serious business. and spent a fair amount of time talking about china as probably our most important adversary in a rising adversary. we talked about hacking, whether it is chinese hacking or purported russian hacking. >> now, we're still waiting to hear the president-elect's choice for secretary of state,
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but by all indications, the front-runner is rex tiller so t he has zero diplomatic experience, but he does have top level global business experience and donald trump told chris wallace on fox news sunday yesterday that's plenty. >> in his case, he's much more than a business executive. he's a world class player. he's in charge of, i guess, the largest company in the world. it has been a company that has been unbelievably managed. and to me a great advantage is he knows many of the players and knowed them well. he does massive deals for russia and for the company, not for himself. >> donald trump mentioned massive deals with russia. the issue of russia is not going away. it is blowing up as a controversy, you had yesterday marco rubio, another former rival of donald trump during the primary saying a closeness to
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vladimir putin is not an attribute i'm looking for in the next secretary of state. you had a bipartisan call from chuck schumer, the incoming democratic leader, john mccain, the 2008 republican presidential nominee for a bipartisan investigation of russian interference in our elections and the senate majority leader, mitch mcconnell, just a little while ago, himself endorsed the idea of bipartisan probe. it could be significant. >> we'll find out. thank you very much, john. staying in washington, back to brian on capitol hill. >> let's get more of the investing side. we're joined by chris kruger, the washington strategist. chris, thank you very much for joining us. you know, it is interesting because if you look at the stock market, the market is acting as if everything is going to get done. dodd frank watered down. obama care will go away. infrastructure, trillions of dollars. with the exception of today, the market is acting a bit like it
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is going to be a spending free for all. based on my reporting here and reading your excellent work, that's not the case at all, is it? is the market overexuberant? >> it seems like the market is pricing in tax cuts and a repatriation and not really looking under the hood of what is really under discussion with tax reform, a border adjustment, a fancy term for a vat or talking about every single sacred cow in the tax code being gored, whether it is corporate interests, net interests, deductions or others. radical change, structural changes in tax reform to say nothing of repealing and replacing obamacare, though you have that three-year fuse on that. that's three yoears of uncertainty as well. focused on trump the tax cutter, not the reformer. >> look at dodd frank. there is an idea that dodd frank will be repealed or watered down
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that banks will benefit. having had a number of meetings this morning, with some key players, what i've realized is the democrats still have a say. and the republicans may not have the 6 0 votes to do anything about dodd frank. what happens with that? >> through obamacare and tax reform you have the reconciliation process where you don't need democrats. all the other stuff, infrastructu infrastructure, dodd frank, legislature requires 60 in the senate. you will need a lot of democratic buy in on a lot of key issues. >> i heard a direct line from a meeting was, the democrats still matter. the market is too focused on the republican side. would you agree with that? >> absolutely. who is the leader of the democratic party, elizabeth warren, bernie sanders, chuck schumer, nancy pelosi? that democratic national
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committee race will be key to watch and which way do the democrats doe? do they go reinstructionist or do you have the dozen senate democrats up for re-election who maybe want to play nicely with president -- >> your job is to take policy change and figure out how the clients can make money from it. do you think we'll get broad tax reform and who wins if we do? >> it is very hard to have a lot of conviction about next year with president-elect trump, for the first time really in decades. comprehensive tax reform has a pretty clear runway provided everyone can play, all the republicans can play well in the sand box together. if you're an exporter, great news. importer, not so much. >> exporter will be a winner. what about retail? >> the problem with tax reform right now that folks are starting to focusen is this border adjustment. if you're making thure product
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outside of the u.s., you're going to get hit with the 20% vat. the flip side of that, what the president-elect will start tweeting with about is you don't want to pay that 20%, bring your manufacturing home and you don't pay for it. combine it with expensing, massive rate reduction, you're talking about bigley reform. >> bigley. last question, do you believe that the defense contractors oversold today? do you think the market is overreacting? >> i think what you'll see for all of next year is the bully pulpit reinterpreted in 40 characters or less. >> we're trying to cut through some of the craziness. to josh for a news alert. josh? >> headlines dropping now on
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apple. dow jones reporting that apple held talks to invest in softbank's technology fund. we know that softbank is raising money for this $100 billion tech fund. we don't know where softbank will deploy that capital. masa said he would invest $50 billion in the u.s., coming from the fund. you can speculate that perhaps softbank might be interested in building cell towers given the interest in that sector. maybe apple sees benefits there. we tried to get more color and insight into thinking they're in cupertino they're in california, but the headline for now, dow jones can talk. nows alert in the bond
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market now, ten year notes up for auction. rick santelli standing by at the cme. how eager are people to lend money to the u.s. government? >> is anybody lending uncle sam their money for 2.47 or 8 for ten years and the volatility, wow. this one, back-to-back c minuses. three year and ten year. 2.485 was the yield at the dutch auction. i have never seen the one issued more volatile, clicking between 24 7 and did 49. 57.5 indirects base. and 6.on directs is light. primary dealers take a little -- listen, it wasn't spectacular.
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you think with the concession built in, it would be more interesting to more investors. it really does explain the gun shy interest by investors of the first two auctions this week. back to you. >> i know the general media is very obsessed about the issue of the one china policy. but china is having other issues, concerns about outthrows once depend. are the guys in the pits paying asecti attention or is it too early? >> they remember quite clearly last december we had a rate rise. january was about a slippery slope for the chinese market. in terms of trump and talking to
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taiwan, most traders are pleatly looking things to be different. >> all right, rick. the race to dow 20,000. we're getting closer. what will get us there and get you the biggest return for your money. he's been shown to sell companies lower. should you tweet proof your portfolio from president-elect donald trump.
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the dow and s&p 500 setting new record highs today. right now we're about 200 points away from hitting dow 20,000. what will get us there and where could you find the big gest return for your money? good to see you. jeremy siegel was on "squawk box" this morning and said the rally is 98% trump because of all of talk about deregulation, changes in improvements to the econo economy. do you agree with that and how much more can we get out of that? >> i absolutely agree with that. market psychology is one of the
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most underappreciated. i think seeing 25, 30% rises in names like jpmorgan in a few week, we got a little ahead of ourselves here. if i was an investor and owned some names, fortunate enough to participate in the rally, now is the time to start trimming on those names. look at areas like health care. se sellgene and biogen. a little too far, too fast. >> you trimmed your positions because of that massive 35% run since the election. it all depends on your perspective and whether or not j jpmorgan was undervalued to begin with. what is the reality and what sort of metrics are you using now for the financials now that
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they're on better footing after the election. >> a great question. we like jpmorgan. the stock is overvalued, the reason we own it. i think it is fair value here. there are names like citi and bank of america. with the etf of stocks it very hard to do individual stock picking and not miss out when the sector is going up or down. if you're looking for individual plays you get that pullback, look at the names like citi and bank of america that are still trading at less than book. you have more upside in those name names. >> are you as bullish as siegel? >> i think the market will move higher now. a lot of optimism that has come in. the market has a lot of momentum, trend is higher, the breadth is improving. we're in a strong seasonal
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period for the market and a lot of folks have gains this year simply are going to want to post pone selling those stocks and pay taxes in 2018 as opposed to paying taxes this april. and then there is always the prospect of capital gains taxes could be lowered this year. i think all of those things combined suggest to me there may be a pullback in the market, but i think shallow. and then i think the market will make another charge at 20,000. >> what about this call? would you ride it some more? >> no question a lot of the stocks are slightly ahead of themselves. but i would hesitate trimming here. first of all, we have just broken out of the two-year trading range in terms of the popular averages. and this transformation from an unfriendly business climate in washington to a friendly
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business climate in washington is 180 degree turn around. so with that said, i think valuations can be expanded giving a friendly administration. >> does that mean if you were not participating in the rally, you would put fresh money to work right now? >> yes, if you're underinvested in the market, i wouldn't hesitate to put money here. >> robert and bruce, thank you. next up, the good, the bad and the ugly.
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welcome back. time for the good, the bad and the ugly. we kick off with the good. chipotle shares on the rise. moran stepping down as co-ceo and giving up his board seat. the pad, shares of viacom down 8% at this point. sherry redstone withdrawing her support of a merger with viacom and cbs. it is an absolutely ugly day for shares of ophthotech. its eye drug failed a study, more on that and the impact on shares of regener ron in the next hour. "power lunch" from the nation's capital. we're just getting started. what do you have coming up?
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>> thank you very much. okay, two huge issues for investors, and the incoming administration. infrastructure and reform or privatization of fannie mae and freddie mac. coming up after the break, we'll speak with somebody deeply involved in both issues, congressman john delaney will join us live from the senate rotunda on "power lunch" right after this.
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i we worked with pg&eof to save energy because wenie. wanted to help the school. they would put these signs on the door to let the teacher know you didn't cut off the light. the teachers, they would call us the energy patrol. so they would be like, here they come, turn off your lights! those three young ladies were teaching the whole school about energy efficiency. we actually saved $50,000. and that's just one school, two semesters, three girls.
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together, we're building a better california. hello, everyone. i'm sue herera. mitch mcconnell says congress will investigate a cia assessment that russia interfeared in the november election to the benefit of donald trump. he said the inquiry would be conducted by the senate intelligence panel. >> any breach of our cybersecurity measures is disturbing and i strongly condemn any such efforts. i agree with senator schume, chairman mccain, burr and others, this cannot be a partisan issue. >> french police are looking for
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four thieves who stole gold from four trucks. the thieves operating in two cars surrounded the truck, forced it off a highway between paris and leon. a rare guitar is one of a number of items to be auctioned off this week. the guitar which hendrix purchased second hand is expected to sell for up to $150,000. there is also a custom made guitar made by prince that is expected to sell for up to 38,000. just in time for christmas. that's the news update this hour. back to you. >> imagining unwrapping that underneath the tree. back to brian on capitol hill. >> we're joined by john delaney. i know you're on recess. sorry we made you putin a t on
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but we appreciate it. while we all talk about infrastructure like it is a monolith, there are a bunch of competing plans. your plan would repatriate corporate tax dollars if they agreed to buy into an infrastructure bank. >> right. >> how much support do you have in. >> we have a lot of support for that specific plan. we have 50 democrats, 50 republicans, by far the biggest bipartisan infrastructure and tax policy bill in the congress. what we do is create an opportunity for companies who have cash overseas to repatriate that money back to the united states, provided that they bid in auction to capitalize a long-term infrastructure bank. it is taking advantage of the fact we have now about $2.5 trillion overseas, creating a pathway for the money to come back to the united states, good in general. and we also create an infrastructure bank. we have a more comprehensive proposal, also bipartisan, that
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fixes the entire international tax system. it ends dedeferral, it allows f the money to come back and forth, generates a fair amount of ref new for the government, which we allocate toward the infrastructure bank and putting more money in something called the highway trust fund, which funds most of the infrastructure. >> spend $64 billion a year. i want to make sure our audience understands what you and others are proposing. if i'm -- i'll use apple as an example. they can bring the money back, tax free, but only if they use some of that in an infrastructure -- >> the way it works, we have an auction to capitalize an infrastructure bank. auction off $50 billion of nongovernment guaranteed 50 year 1% bonds, which creates the equity in a bank and you can leverage that up 10 to 15 to 1.
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to get companies to buy those bonds, which they never would, no one will buy a 50-year, 1% subordinate bond that doesn't have the government guarantee, to get them to do that, we say how many dollars to you need to bring back from overseas tax free to justify that investment. we do something called reverse dutch auction, we auction off a ratio. so apple may bid 5 to 1. they'll say, we'll put a billion dollars in the bank, but need to bring back $5 billion tax free to do that. >> the key is the ratio then. >> the key is the ratio. >> if you're -- i understand your plan, if you go to companies that say you need to do this to get that, some people see that as heavy handed. >> the rate on the money that is over goes to 8.75%.
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all money overseas, there is a one time tax if you will. and they can bring the money back and forth. then new earnings are taxed -- a sliding scale depending upon how much tax they paid, call it 12%, 13%, up to as high as 15%. they can no longer defer. >> could they pay the 8.75% on money overseas or pay zero as long as they invest in the infrastructure bank or separate? >> two separate proposals. the bank is a stand alone proposal. let's do this. it creates the opportunity for the money to come back. if we get some courage here, and we tackle a problem that is big, which is international tax, causing all kinds of perverse incentives and want to build infrastructure, we can do a comprehensive tax to the tax system, and put another $120
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billion in the highway trust fund. >> you have the votes? >> we have bipartisan support on november -- >> on the votes. >> it -- i believe we have the votes if it gets taken up. my view is we should fix this on a stand alone basis. there is more support for doing that. we see it every day, we see companies keeping their cash overseas, which is terrible for the u.s. economy, we see inversions, which is terrible for the u.s. economy, all of this because of a bad international tax system, which has nothing to do with the rates that individuals pay in the united states. >> steve mnuchin, the likely treasury secretary, wants to privatize fannie and freddie. you have a plan to reform it or fix it. what do you think about privatizing it?
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>> i think that's hard to do. if you think about fannie and freddie, they had government support. everyone has known the government guarantees their debt, which is why the agency debt typically traded similar to u.s. treasuries. it is hard for me to imagine that we could just turn that over to the private market without any government support to provide liquidity to that market. i tried to keep the government in the business of providing liquidity to the market but off the business of pricing the risk. we have a bill that has a lot of risk sharing, but allows the government to provide liquidity. >> congressman john delaney, we'll let you get started on your holiday. next hour, we got senators mark warner and orrin hatch. more to do from here. >> look forward to. now to morgan brennan with
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breaking news. >> video that is just coming in, this is the first two f-35 stealth fighter jets arriving in israel after bad weather delayed their takeoff. this was much hyped. defense secretary ash carter is in attend ans. this as president-elect trump slams the f-35 program in a tweet calling cost out of control and washing that billions of dollars can and people be saved open other purchases after he takes office. for those deliveries, lockheed mar marten saying they accept question questions. if you look at shares, they're down just about 3%, but pairing losses from the lows we have seen in that stock earlier in the day.
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>> big sell-off when that tweet came out this morning. thank you very much, morgan. could have been a major media deal. breaking down today. viacom pulling its deal for cbs. however, there may be another suitor for cbs.
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what could have been a major media deal breaking down today. julia boorstin is live with the latest. there are a lot of dominos that fall because the deal falls apart. >> absolutely. that's right. national amusements announcing it asked the boards to discontinue their exploration of a potential combination.
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cbs recovered most of the early losses, vie cam shaacom shares trading down. sumner red stone's holding company is issuing a statement praising viacom's ceo saying we are confident that with this new strong management team the value of the assets can be unleashed. a source close to the situation tells me national amusements looked at what both would wouldn't and couldn't come up with a valuation that made sense for both cbs and viacom. analysts say they're looking for signs of a viacom turn around. this raises the question if cbs didn't want it, should an investor want it. we have low expectations working in his favor. the board including sherry redstone has growing confidence to turn things around. the board is expected to move
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interim from the ceo title at a meeting which variety reports is happening today. >> when this deal was just a rumor, skepticism about it because there was les moonves will never want to do this. is this just les moonves getting his way in. >> well, i think that recently les moonves has spoken about how they are looking into this as they were asked to buy national amusements but wouldn't do a deal if it made sense for the shareholders. since viacom and cbs split up so many years ago, cbs has done remarkably well. i think that moonves didn't see a situation where this made sense for shareholder. >> also a report that moonves wanted total control of the company which is -- they did not
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want that. this is according to a report out there. let's say a grain of that is true, does that make it more likely that perhaps cbs could be out for a deal on its own? >> i hear from sources close to cbs that this is a company that looks at everything. cbs looked at time warner, looking at all potential mergers. now that we know this viacom deal really is off the table, i think that will allow moonves to look at what makes sense for cbs moving forward. they have taken its own path in terms of digital distribution. not part of the hulu, or directv now service yet. i think he's trying to figure out what makes sense for the next phase of the company, about digital. zbl >> fascinating. defense stocks taking a hit here. president-elect trump tweeting, saying lockheed martin's fcht-35
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program costs are out of control. joining us is chris hagan, over at morning star. if you look at the market cap loss today what look heed martin could lose on f-35, does this make sense in your view, this decline? >> i think it is a bit of an overreaction. i think it recovered a bit. i think this is part of a broader theme that you've seen from trump. he made comments on the campaign trail, negative comments about f-35, then the boeing tweet last week about the presidential aircraft, air force one. and now this on f-35. so on one hand, a bit of an overreaction. on the other hand, there is some substance behind trump's
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comments. >> >> how do you view the impact good or bad? they could increase overall defense spending, but it could be at the cost of margins to the defense contractors. >> yeah, that's exactly right. here at morning star, we see defense spending potentially getting to about $650 billion annually. that's about where we were in 2012. so we do think defense spending will head higher in a trump administration. but i think investor are waking up to what trump's been saying, he's going to turn the screws on the defense contractors. and that could be squeezing margins. >> how should we look at the defense contractor value chain? is it going to be the ones that develop the large projects like this or the suppliers that feel more pain from trump turning the
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screws on these programs. >> i think you'll see it more with the larger integrators like look heed martin. you already have seen if with lockheed martin. the department of defense negotiated pricing on a recent f-35 contract. you're already seeing the department of defense before trump goes into office negotiate pretty hard with the larger contractors. they can absorb some cuts to pricing and some harsher contract terms, little tougher for some of the smaller suppliers to absorb those kinds of contract terms. >> does that mean they feel it worse? >> they will be impacted to a certain extent on these contracts. but i think there will be a desire to protect some of the
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smaller suppliers and some larger suppliers which are at all time high operating margins now and pretty strong cash flows and returning a lot of shareholders, they're in a position where they can absorb some of the tougher contracting requirements that he may impose. >> thank you for joining us. appreciate it. the donald trump -- set to meet with some of silicon val y valleyss. will they get past their differences.
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ways wins. especially in my business. with slow internet from the phone company, you can't keep up.
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you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. microsoft has been on a tear. our next guest says they may keep up the momentum. mark, great to see you. >> thank you. >> an engine of growth is cloud and we're just discussing in the break your expectations for the margins to improve. can you explain how they go from negative single digit margins now to what you're forecasting, greater than 50% margins.
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>> absolutely. so here's what you have to think about. microsoft built out this massive scale, massive investment in data centers and facilities worldwide. huge spend. microsoft's scale and efficiency will grow as they fill out what they built already today. if you think about it, microsoft today is about a $3 billion run rate, azure cloud business. and amazon, when they reached about a $6 billion business, was at that point a high teens adjusted operating margin business. so microsoft doubles in size, margins will increase because they're going to be filling out space they're not using today. >> why is there the assumption that it will have the same trajectory in terms of gross margin gains when it is one of several players. >> smaller number. there san assumption no discounting or competition.
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>> supply coming on, basically, right? >> more supply coming. more demand, more supply, but the fact is microsoft offers a differentiated offering. microsoft is 70% platform as a service. that's bulli gbuilding on the w server, unique assets that companies can go to microsoft for. amazon is 85% infrastructure, only about 15% platform. there is a mixed difference. microsoft has unique assets. data centers everywhere in the world. if you want someone, enterprise client and want to build out somebody who is going to deliver lots of capabilities, support all over the world, you have amazon and microsoft today. there may be more people coming out but can't compete. >> i hear you saying the difference between the two is that amazon is a commodity-like product, microsoft is less likely to be selling that kind of product because of their
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platform that maybes th sthat m much more user friendly. >> if you think about the average enterprises to, 70% run on microsoft technology. those servers will move to the cloud. where are they most likely to move? the guy with the expertise, that knowledge, new capabilities around it. that's microsoft. microsoft is leveraging the unique assets to be able to drive clients in their direction and that will protect them from the pricing wars. >> what about the tweets that donald trump has done with the defense stocks. do you look at those and think there but for the grace of god go i? he's been so anti-tech in some ways. no sacred cow is sacred. >> there is always the possibility some comment is going to be made that will hurt the stock, the reality is the
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engine of the u.s. is tech. u.s., software is a predominantly u.s.-based asset. the reality is in the software space, that's where u.s. companies use to build their technology, that's where overseas companies use to support their technologies, it is unlikely that trump will hurt what is a u.s. core asset. >> at the same time, when you hear renegotiation of tpp, there is the principle of open internet that could impact tech companies. you mentioned data centers around the world. if that were repealed, is that a benefit to microsoft, which could house that data in the local countries or is that not an impact? >> probably new impact. it does create an issue that if you're a company outside of the u.s. and want to have data protected, you probably want to have data center that is in your own country. hopefully run by -- the u.s.
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government coming in and gaining access to the data. as a demand, a need overseas to have this data and data centers outside of the world. >> headline risk on wednesday with the meeting with the tech companies? >> i think it is unlikely. i think that the -- i don't have a chrissrystal ball. but i think the president is looking to u.s. tech and wants to understand how he can make that unique asset, u.s.-based technology, be even better and be a core driver of fundamental growth, that will drive productivity and also differentiation of u.s. this white house wants to push what is great about america, and what is great about america is it has been the place in which so much of the fundamental tech that the world runs on was developed. >> mark, thank you. billionaire bill gates speaking to microsoft, announcing a $1 billion fund folk owed on combatting climate
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change through energy and innovation and investment, the breakthrough energy ventures fund. gates will serve as chairman and anticipates being actively involved. among the other investors, saudi arabia's belal, richard branson and ray dalio. >> we haven't seen becky in a long time. >> back from maternity leave. bill gates will sit down with becky quick. exclusive interview right here on "squawk box." we're just three minutes away from the 2:00 p.m. lift. stocks moving much higher about that time for the past three trading sessions. we'll make it a fourth today and find out. first, back to brian on capitol hill. i'm looking forward to that bill gates interview. coming up in the next hour, we have the views of two senators,
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mike warner and orrin hatch. what about trump's tweets, what about infrastructure or broad bayed tax reform or dodd frank. stick around. you're watching "power lunch" both in new york and in wall wall.
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welcome to the second hour of "power lunch." we have seen stocks turn higher in the 2:00 p.m. hour. stay tuned. oil moving higher, hitting the highest level since the middle of 2015. the yield on the ten year note hitting 2.5% for the first time since 2014. >> i'm michelle caruso-cabrera. looking at the stocks moving today, johnson & johnson is higher by 2%. it could rally 20%. alexion taking a big hit. the ceo and cfo resigning effective immediately. 14% decline. lockheed martin, the latest target of president-elect trump. in a tweet, the president-elect questioned the cost of the f-35 program, which is done by lo
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lockheed martin. boeing, it has a deal to sell 80 jets to iran for more than $16 billion. phil lebeau joins us now with more on that story. >> boeing has been negotiating for some time, not a surprise they signed the deal. the question now is whether or not president-elect trump or republican members of congress mount a vigorous effort to squash this sale. here is what it is. it is a big one. one of the biggest of the year for po i for boeing. 80 planes. sales price will be lower than that. a huge deal. first delivery, coming up quickly. scheduled for 2018, provided the deal doesn't get killed. how is iran financing buying these planes? not going to happen through the export/import, but around other options in terms of figuring out the planes. ge is supplying $3 billion worth of engines for these 80 aircraft. in a tweet, back in january,
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president-elect trump was asked about what the future is with iran. now, this tweet was in relationship to the nuclear deal. he wrote, iran will buy 114 jetliners with a small part of the $150 billion we're giving them. but they won't buy them from the u.s., rather airbus. we bring up this tweet because we have not heard directly from president-elect trump regarding this sale. it is interesting because this is being positioned by boeing and by others in the airline industry and the aviation industry as you killed this deal, you killed thousands of jobs that would be supported by boeing, building and selling these planes to iran now that the sanctions have been lifted with iran. and, oh, by the way, if you don't do it with boeing, if you kill that deal, it is likely that airbus will pick up the slack and have those orders. you look at shares of boeing today, not seeing much of an impact. that's largely because we knew
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this order was coming, at some point the question now, can president-elect trump and congress, republican members of congress, kill this deal or will they let it go through? >> all right, phil, thank you. aymeamon javers joins us from d >> republican leaders are trying today to manage an open dispute that erupted over the weekend between some in the cia and president-elect donald trump, erupted after news reports that said that some in the cia concluded the russians interv e intervened, directly with the intention of supporting donald trump. trump himself called those reports ridiculous, said he didn't believe that intelligence assessment. now leaders are scrambling to follow up own manage the relationship so important going forward. speaker of the house paul ryan out with a statement this morning. here's what he said.
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he said any intervention is problematic because under president putin, russia has been an aggressor that undermines american interests. we should not cast doubt on the clear and decisive outcome of this election. similarly, mitch mcconnell, the senate republican leader also talking this morning, he said that he's open to the idea of a senate intelligence committee investigation into this matter. but said it should be done by the senate and through proper procedures. what he called regular order. here is mitch mcconnell. >> it defies belief that republicans in the senate are reluctant to either review russian tactics or ignore them. let me say i have the highest confidence in the intelligence community and the agencies, the cia is filled with selfless patriots, many of whom risk their lives for the american people. >> speaking of the cia, a former spokesman for the cia took to
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facebook over the weekend, posting a criticism of donald trump. this reflects the feelings that a lot of people are still inside the agency. he said the next commander in chief dismisses the work of the agency and calls its findings ridiculous. his disrespect for the cia and wider intelligence community is nothing short of shameful. that's a facebook post by george little. so, guys, a dispute here, the republican leaders are going to have to manage. let's toss to over to brian across the street from me here in washington. >> we asked senator mark warner to come on and talk about dodd frank and tax reform and he's the ranchi iranking member of te intelligence committee. how does this play out? is the senate going to take any action on this. >> i'm glad to hear both leader mcconnell and speaker ryan
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saying that we need to follow this wherever it may lead. any investigation needs to be a bipartisan. i have great confidence in my colleague, richard burr, the chair of the intel committee. when we see as early as october 7th a whole intelligence community coming out with a uniform assessment that russia interfered, i've been pretty disappointed that the president-elect has been dismissive of that. that's not just the cia. that's the whole intel community. and michael hayden, the former head of the cia under president bush really called out the president-elect for those kind of comments. >> what power would the senate have in this investigation? what could be an outcome? >> the thing is, we have to be very protective of our sources and methods. i'm not going to comment on any of the stories at this point. you never comment on classified information. one thing very important is the
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current administration said they're going to get everything on this subject, try to see as much as can be declassified as possible. this statement was made on friday by lisa monaco with the president's national security advisers. it is important not to relitigate, but make sure americans going forward and we had elections that are worldwide elections in germany, france, the netherlands and voters need to be on guard when you see false news or leaked information. >> what if we find out that russia was deeply involved in -- let's say we found out they were deeply involved in the release of fake news or false news? what then? >> we clearly know that russia has been interfering in other countries elections for many, many years. and i agree, i saw that comment from speaker ryan a little bit earlier. russia is aggressive. a bully in the region.
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mr. peutin is somebody you can o reasonable business with. let's not jump ahead of ourse ourselv ourselves. we need to do this in an organized and bipartisan fashion. >> reading the stories over the weekend, everything is anonymous senior administration officials. this goes very frustrating over time. over and over again, even innocuous stuff cannot be attributed to any real human anywhere, whose name you can write down. something as sinister and important as this, there has to be more clarity here. >> what you saw from president obama's team was an effort to do an across the board review of the conclusions reached by the intelligence community. and my hope is that they will be able to bring forward at least top lines in a declassified way
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before the end of the -- >> why can we know who is talking to the press right now in. >> it is the most important job i have as a member of the intelligence committee is to protect the sources and methods of the literally thousands of americans who protect our country at grave danger to themselves and -- >> i'm not asking for the names of the cia officials. senior administration officials. >> ma'am, i do not know which senior administration officials are making those comments. i do know this, that when any information that i receive in a classified setting is going to be -- remain classified until it is declassified and that's not my job that is the job of the administration. >> a lot more to talk about. let's move on. one -- i had meetings all morning. the democrats still matter. the bank stocks are trading as if dodd frank will be watered down or repealed or replaced. what i heard from my reporting is that the republicans are nowhere near getting the
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democrat support they need to get to 60 votes. what can we expect for the democrats who are banking and financial -- >> i think that's the case. there were places in dodd frank around community banks that look -- need to have review. but higher capital standards, looking at liquidity ratios, trying to make sure the derivatives go through some level of clearing, having an fsoc. >> what is an fsoc? >> prior to the 2008 crisis, we didn't have people talking to each other between different agencies that were regulators. having the fed and the s.e.c. and the cftc and all of these -- the occ, they all come together, the treasury, on a regular basis they look systemically at what may be happening. something as we all know, the financial networks are all interconnected. a crisis starting in one can bleed into another. i find most banks think the improvements made the system
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safer. >> let me be a little more direct. you're known as a guy that gets along well with many republicans. what would it take for democrats or six or seven of you to get on board with dodd frank changes? what would you ask for in return? >> there were a series of areas that a group of us were looking at. particularly on community banks. i think there has been too much, you know, regulation and some of these community banks need more freedom to lend, particularly in terms of small business lending. i also think one of the targets of the objectors is the consumer bureau. without the consumer bureau, you would not have potentially seen some of the behavior that took place. there are areas where i'm hopeful my republican colleagues will not overreach.
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mike crapo, i have a great relationship with him, a real reasonable guy. >> final question. virginia senator, you've got some fairly sizable defense contractors, based in the commonwealth of virginia. what do you make of the president-elect's tweets about lockheed martin? >> you guys have a lot of prediction in terms of the market. the idea you have to start predicting the president's tweets and maybe a whole new realm of -- >> training strategy. >> strategy. on occasion, but my hope is when the president assumes the office that he will be a little more judicious on the use of that twitter account. >> senator mark warner, thank you for taking some time. we're not done. coming up, we got another high ranking senator orrin hatch, talking about broad-based tax reform and some of his comments about this russia stuff, which lit up washington, d.c. >> certainly.
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i've been on conference calls about the most mundane stuff. and you must quote senior administration officials. it is ridiculous. when something so serious, somebody has got to be on the record. anonymous sources is what got us into the war in iraq. remember this? i'm getting off my perch here. the dow getting within 175 points of 20,000. we'll see if the march continues. will we see a fullback first? a biotech disaster losing more than 80% of its value.
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call today. comcast business. built for business. the parade at trump tower continues. rick santorum arriving at trump tower. he too ran for president, more than once. wall street hitting another round of highs today with the dow marching even closer to 20,000. that's nearly 8% rise since donald trump elected president. with the dow clocking in 14, record closes in that time. goldman sachs alone responsible for 30% or 400 points of the 1400 point gain. can the trump bump continue? is anything going to derail this rally? details from jason. washington has me in a bad mood.
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>> who got you senator warner or -- >> how much more can we get out of this rally? >> i think quite a bit more over if you're looking at a long enough time horizon, maybe another year to 18 months. i think we seem like we're likely to have some sort of pullback at some point. markets don't usually go up in a straight line. i feel pretty strongly that the great rotation people have been talking about for a-long time, the rotation out of bonds into stocks. that, in my opinion, in the top of the first inning. at the very, very beginning. in some ways, strange bull market, largely been a joyless bull market as it relates to individual investors. >> we have seen the yelled go to where it is now, where can we
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see yields go? >> another good question. the rule of thumb is that ten year treasury yields should be about where nominal gdp growth is. that hasn't worked for a number of years during financial repression, during the central banks massive bond buying program. i would say that's probably the normal rate, which would be somewhere around 4.5. i don't see it happening, though, anytime soon because you have such enormous interest rate gaps and such disparities in terms of central banking with ecb and the bank of japan still largely having negative interest rates. it is going to be difficult for, i think, ten year treasuries to go up too quickly. inflation is rather mild. i'm not too worried about where it is going. 3% by the end of next year. >> you think financials are still cheap, even after the big run. can i buy any of them?
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>> i don't want to play the parlor game here. i don't know the people involved. i read some of what everyone else is reading. i would have more of a bias towards some of regional banks, the meat and potatoes, bank of america, doing lending. i might be more careful on the capital markets stocks because i do think, you know, this is a populist administration and there may be some things that people don't like about it h may not be as free market as some people were thinking. i have more of a bias towards focusing on lending, on pickup in the velocity of money. i like them all and they're still trading one times book value. hard to get hurt too badly over longer term. >> a little more than a dozen days ago, you wrote that 2150 to 2175 be with a good support range. that's 4.4% below current levels.
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it will be determined by the data? >> i would rather keep it just to give myself some wiggle room because things have gone up so far, so quickly, that i think you do want to have -- don't want to moderate your expectations in terms of what the downside could be. especially some of the news out of washington, makes me feel very uneasy. but i think i want to give myself some room. it looks like the breadth of the market is such that it is hard to fade this. with the transports making the all time high, people have been calling it a rally, even though it lasted seven years. this is the real thing. >> jason, thank you. >> thank you. >> what happens when the ceo and
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the cfo resign on the same day. the stock plummets. we'll have the story behind alexion's big move. and the news behind this 80% drop. the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle and it keeps my investments fully mobile... even when i'm on the move. sign up at etrade.com and get up to six hundred dollars.
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look at shares of alexion pharmaceuticals. you tweeted that out this morning, i had to read it twice. i couldn't believe it happened on the same day. >> you don't usually see a ceo and cfo resigning on the same day. the ceo is leaving for personal reasons, the cfo is leaving to pursue other opportunities. the company is in the middle of a delay in filing the third quarter securities filing as it investigates improper allegations around sales of its biggest drug. the company saying today that they haven't turned up anything that would require them to restate the results. they plan to file this filing by january or sooner. however, according to a source familiar with this thinking, the ceo and the cfo did lose the confidence of the board. that led to the steps today.
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folks are trying to figure out what is going on here. rbc out a note saying they expecting in to happen here. maybe they have to restate some of their previous results. a big question mark right now. >> i read ethe same nodete. where there is smoke there is fire essentially. he makes a point we're not going to get any sort of outlook on next year until february. just a gap right now, right, in terms of no information. >> a lot of uncertainty about what this means. a lot of analysts are coming out and defending. cowan coming out, jeff meacham coming out and defending. interesting to see how much defense there is here. they did bring in a former astrazeneca ceo to run the company. they have appointed a pefrmt o
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permanent cfo as they hunt for a new ceo. >> ophthotech, this is a company that had phase three trial going on of an eye drug. those failed today. they were testing this eye drug in macular degeneration, a very big indication, drugs on the market from regeneron and roche. this didn't show any benefit over the roche drug. that's why you see the stock falling. analysts say it will trade on cash. they have more pipeline programs. another stock, regeneron, they make a million billion dollar drug in the came indication. >> is this one of the less
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swhonz with biotech, a lot of them are one trick ponies. >> a lot of people put them in separate buckets, and you got to be really careful on these. nobody can predict how they will go. >> the earnings drivens compa companies haven't dobb done very well either. do they have a deal to cut output? we'll get the closing trades coming up. another big interview from washington. who is it in. >> orrin hatch, michelle. listen, donald trump talks about tax reform. the senate talks about tax reform. the house talks about house reform. can they come together and get something done and if so, what will it look like. what is your tax rate going to
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thank you very much for taking some time out. i know you're in recess so we appreciate it. the last time america had broad based tax reform was 1986. this has been a big platform for you. do you believe we will get tax reform, meaningful tax reform in the new yore? >> well, i do. but, remember, it took them three years in '86 and a lot less complex than it is now. so -- but i think we can do it in a year. depends on the president. and i think you'll have an active -- very active president as you can pends on republicans and democrats working together. i've proven we can work together. >> have you spoken with the president-elect or anybody in his top advisory team about where they stand with tax reform in. >> sure. but we have to wait and see where they are. i think it is a little early for them to say where they are on tax reform, but they're serious about it and should be because
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our tax situation in this country is stupid and ridiculous and it does not enhance collecting taxes, it makes it much more difficult pause people just know it is an unfair system. >> what are some marks of your plan mean. how would their life change under some thing you would like to do. >> we want to get tax rates down for almost everybody. that's hard to do if you want to maintain budget neutrality. we need to bring -- we got over $2 trillion overseas that is just sitting there because we're so stupid we have the highest corporate tax rate in the organized and these companies going to bring that money back. they will bring it back if we bring those corporate tax rates
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down. i think donald trump is very, very much in favor of getting those rates down. he wants them down to 15%. that may be a little. but if he brings them down to there, our company would zoom and attract people from all over the world. >> have you talked about if there say magic number for tax rates where they say it makes sense to bring back -- >> most people admit if we get them down to around 25, 20 and 25%, we would be in the game. right now, we're not, 35%, plus the states add on taxes. >> that's headline and some of the opponents say, well, once a factor in all the deductions, not many companies pay 35%. there are some who don't pay any taxes. ge is mentioned in that category. i'm not sure they don't pay any
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taxes. we have a lousy system, it isn't well put together, it is not well put together. and i think we can do a better job and i think under donald trump we're likely to do that. >> what do you expect from the incoming administration and the sort of the new york pipeline, coming down to these -- everybody i talked to last night and this morning was saying who are these guys and what are they going to do? they know that these are guests that are on cnbc frequently, what are you expecting, sir? >> we're lucky to have some top notch people from new york. i met with mr. mnuchin, ticketed for secretary of the treasury. a big sacrifice for him to come. he has to get rid of his -- sell off his securities and so forth. he's willing to do that. because he wants to serve the country. these are the kind of people i want here, not just washingtonian hangers on.
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i think that's what donald trump is bringing to the forefront. i'm impressed with what he's doing. >> final question, the incoming, likely incoming secretary of state is exxon ceo rex tillerson, already taking heat for being a ceo of an oil company and with ties to russia. do you believe he'll be confirmed as secretary of state? >> i don't no know if he'll be chosen, if he is, i hope he will be confirmed. he's a smart guy, a tough guy, but i'm in the sure he's going to be the one they're taking, but it does look like that right now. >> if he is, you would be -- >> yeah, i would be supportive of virtually anybody donald trump picks because he knows what he's doing. he's a very shrewd, very smart guy. he's tough as nails. tough as nails.
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he's not going to have anybody run who isn't as tough as nails as well. >> senator orrin hatch, thank you very much. we'll let you get back to enjoying your holidays. we appreciate you taking time for cnbc. thank you very much. >> wasn't tough to put on a tie. >> big move for the price of oil. prices hitting their highest levels in one and a half years. to jackie deangelis. >> i was a little surprised, we paired the gains that we saw in the session at the close. overnight, we got 54. the market was euphoric today about the deal on the table from opec and the nonproducers. 1.2 million barrels from opec. a little less than 600,000 from the nonopec group. take in consideration, that u.s. production has gone down about a
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million barrels. that's not to say there aren't some risks here. what are they? the fed and the dollar index climbing for one. but also there may be some opec cheaters, people concerned that the implementation won't happen come january. we're watching the shell producers, rig counts go up every week. will we see a reboom here that could depress prices? those are things to think about. next guest says the bullish outlo outlook on the oil market is a head fake. roberto, great to see you. what does this mean for the price of oil? does it mean we see prices where they were seven years ago? if you go from 2009 to 2010 -- >> i don't think we'll see that
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exactly. you have two things going for crude here. we reprtrace some of the gains from overnight. breaking above 52 is the june october trend. secondly, we had a great 80 some strategy report from our energy team on friday. what you see for the first time, an undersupplied market starting in january of 17. we'll be undersupplied from about 1.1 million barrels in 17. that will help to keep crude going up towards $60 and hold it there, caught in the range of 53 to 57 for most of 17. here is the head fake. come first quarter, an oversupply situation again by 600,000 barrels and that's when you see a retracement and don't want to get caught on -- >> why will we see that swing?
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what happens to cause that? >> one thing the saudis underestimated is the productivity and efficiency gains. that being said, the u.s. player will be producing crude about a million barrels and rig count up by 25% over the next 12 months or so. >> the cycle continues, higher prices, u.s. shale comes back online, more rigs put online, more production 2018. in terms of the short-term, you know, the undersupply situation, does that assume that everybody is going to be sticking to their production cuts? >> to the degree it does. i know there are certain individuals who are trying to handicap what the cheating percentage is and not -- and what not. it is hard to kind of gauge that. assuming there is 90% compliance in opec and certain growth
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rates, coming down to an average of 1.4 to 1.5 million barrels of undersupply for most of 17. >> what does this mean for the equity side of things if we're seeing such a great outlook for 2017. >> right. so it is going to be a rising tide the end of the year, lifting all kinds of energy boats here. a lot of guys were caught short overnight and paired gains and long holdings into this weekend. i think they have to add back, energy is the best acting subsector of the s&p 500 in the last three to six months. you have to have guys chase returns. >> today already, the xle that tracks energy on pace for the best day since november 30th. thank you. live picture from trump tower. cathy mcmorris rogers walking into trump tower, waiting for the elevator there. it is said he's considering her
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to be the interior secretary. want to wait until she goes in the elevator? >> she's been waiting ten min e minutes. >> slow elevator. the golden elevator takes its time. to sue herera with your cnbc headlines. here's what's happening. antonio gutierrez, former prime minister of portugal, sworn in today as the united nations new secretary-general. he assumes the role vacated by ban ki-moon. his term ends on december 31. the pulse nightclub had a personal moment of silence exactly six months after the shooting there that killed 49 people. the moment of silence took place at 2:02 a.m. a snow day for students in grand rapids, the southwestern region of michigan receiving close to
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20 inch inches of snow over the weekend. and the miami dolphins lost the their quarterback for a while. a sprain to his mcl and acl. this is no timetable for tannehill's return. he suffered it yesterday. at least the dolphins won. you're up to date. back to you. >> thank you, sue. two days before the rfit immediating. are yields to go higher? "trading nation" is next.
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she's about to get in the elevator, finally arrived. we'll show you cathy mcmorris rogers walking into trump tower. he's saiden en tto be consider as secretary. ten year yield topping 2.5% today. could rising rates become a big problem for stocks in let's ask
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the trading nation team, craig johnson, boris schlossberg. historically the relationship between rising rates and stocks is a positive one, isn't it? craig? >> yes, yes. it has been a positive relationship and when you go back and look back from the 1950s and going forward, we have a rising rate to 1951. saw rising rates. back then, you saw equities make five times their money. from our perspective, we don't think rising rates will be a problem for equity marks going forward. as we-li look at longer term charts. our forecast for 2017 is we're calling for 3 to 3.25 on the ten year bond yield and we think equities will go with it and also higher and looking for 24, 24 on the s&p 500. >> within the longer term perspective, i'm curious, have
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we seen the jump we have seen recently where we had 1% increase from july to today? >> you think about the taper tantrum in the past. went up 100 basis points. but back then, you also saw credit spreads begin to blow out. that is not happening today. it is a different environment today than what we had seen before. at this point in time, things look pretty orderly at this juncture. >> what is your take on this? the rising u.s. dollar. >> even though things look orderly, the fed is in pretty much a panic mode at this point. they don't want to see this meltup in rates so far, so fast and this massive move on the dollar as well. it will impact profits if the story continues unabated. i think they'll do everything this week to communicate they're going to try to pause. there is very little reason for them to go into normal monetary
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policy where they start hiking rates every quarter going forward. they can say there is very little inflation, which there is at this point in the spectrum, no wage push inflation, wages are still low. and can keep the dot spectrum at the same place or at the -- could lower the dot curve. >> one and done for now is your view? >> absolutely. i heard that the fed is in the business of hibking rates once year. >> thanks, guys. appreciate it. it is not just wagons anymore. we'll talk toys, trump and much more with the head of this iconic american company straight ahead. profits are great, but
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. it's official. president-elect donald trump has picked gary cohn for national economic council. he will be assistant for economic policy. if you have been watching cnbc you knew this because we have been reporting this for what feels like days but now it is official. hampton pearson standing by? we have a statement from lloyd blankfine. i know better than perhaps anyone that he has the intelligence, commitment and experience to be successful at any endeavor he undertakes. we will miss gary at goldman sachs. i believe the american people and president-elect are fortunate that he has chosen to serve his country y. am confident that gary will bring many talents and expertise to the white house and will do his part to make our economy stronger for all americans. that coming from lloyd blankfein.
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>> so begins the official horse race for heir apparent. now to fun stuff. since 1917 radio flyer has been a gift at the top of every christmas list. now, however, it's a new era, i-pads, how does a company keep up in a high-tech market place? we will ask ceo of radio flyer. do kids want one of these anymore? >> wagons are still a staple. this is the original. we have wagons that have seats, seat belts, cup holders. >> seat belts for the high speeds that the wagons achieve. >> it is more for keeping the toddlers in place so they don't stand up in the wagon. >> this is the hot new item, right? >> this is the model s for kids. we partnered with tesla.
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what we have done in the kids' car market is basically what tesla has done in big people's car market. we disrupted it by changing everything about the product, how people buy it. you go to radioflyer.com. you can customize it, put your kids name on the license plate. it has working head lights, mp 3 player. >> ludicrous mode? >> there are two speeds. we don't get to ludicrous mode but low speed and high speed. >> how much? >> starts at $499. and then if you add everything it can get up to $800 but that would include a car cover and even more. >> this is an ev car. it has lithium ion battery. what is the range on that? >> the range depends on the weight of the child and everything. we have one at home. my 8 year old can go a whole week without charging the battery. >> how much is this in comparison?
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>> this is about $100. >> how many of these do you sell in a year? >> we don't give that out but in the history we have sold over 100 million wagons. >> what odo you make of controversy over manufacturing in mexico? you have been manufacturing in china for a long time. >> evening longer than that. our products are manufactured in china or the u.s. we have focussed exclusively on product development and marketing. we partner with manufacturers anywhere in the world that it makes sense for the product. >> why does it make sense to manufacture in china? >> it depends on the product category. for example, in tricycles those are manufactured in china typically because there is more labor in the product. there is more welding. >> how much more would it cost to bring the production back here? >> it depends on the product. >> the tricycle. >> i'm not really sure. >> double? triple? >> it would be significantly
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higher y. would say at least 50% higher. >> how nervous are you when he talks about tariffs on products produced in china? >> we certainly hope that doesn't happen. i wouldn't say we are nervous about it yet but we hope it doesn't happen. >> i see you have the largest market share still in the world when it comes to these kinds of wagons. i'm surprised because i thought you would get under cut by cheap chinese imitations. >> the brand means a lot to people. when you say radio flyer they instantly smile and tell you a warm story of childhood. we haven't just rested on the brand. we stay close to consumers. we spend a lot of times with moms and are trying to figure out how to solve mom's problems. our newest wagon you can fold up so it is easy to put in the car. mom can fold it up with one hand while holding a baby. we do those kinds of things so that we are staying relevant. >> we hope you have a great
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christmas season sblmpt dethanks for being on the show. coming up, check please. don't move. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat?
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in-app chat on thinkorswim. only at td ameritrade. 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 and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
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gary cohn leaving goldman sachs to become economic adviser to donald trump. donald trump describing him as my top economic adviser. >> my check please is that just because republicans have a gop sweep the biggest since
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eisenhower don't expect everything to be easy. still need 60 votes to pass a lot of stuff. a lot of questions to me about the guys coming in because they know they have been on cnbc a bunch and questions about how much of that new york money is going to be coming to d.c. >> good stuff from there. thanks for watching power lunch. "closing bell" starts right now. hi everybody. welcome to "closing bell." i'm kelly evans at the new york stock exchange. >> i'm bill griffith. will this be the week? will we see dow 20,000? we haven't gotten hats back from the printer. industrial average does creep every higher getting closer to the historic level. we have money managers who say there are still opportunities in this market and we will name some names coming up a little

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