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tv   Squawk on the Street  CNBC  January 6, 2017 9:00am-11:01am EST

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we'll see 1.05 here, 1.03 a couple days ago. ten-year looks like onwards and upwards, back in the 2.3 area. >> does it worry you? >> i don't know what it means. we're so interconnected with all the other stuff. >> okay. a final thank you to michelle for hanging out with us. >> see you on monday. >> see you on monday. and a final happy birthday to you. >> congratulations to sydney queen, what a family, two twin boys and little girl. are you done? >> this is it. the finale. and it's our finale. join us on monday. "squawk on the street" begins right now. ♪ happy birthday, joe. congratulations, andrew. good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. final jobs number of 2016 comes in 156, that's below expectations. wages up 2.9 year on year.
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that's the strongest of the expansion. we'll get to all the numbers of the premarket relatively steady. europe is mixed. yields actually if you just heard ticked up on that wage data. factory orders, rig count and fed speak today still on the way. roadmap begins with 156,000 jobs added in december, below what the street was expecting. the last jobs number under president obama. >> first it was ford then it was gm. this time the president-elect goes after toyota sending alarm bells across the nation of japan. >> one retailer reversing the trend, gap shares are surging after a better than expected december helped by old navy. we'll get into that. aside from the december payroll figures, the unemployment rate coming in at 4.7, as expected. and we mentioned earlier average hourly earnings up 2.9 from a year ago, that's the biggest increase since 2009. participation relatively flat, jim, i know you looked at with the revisions over the past two months people are calling it a bit of a push. >> i think when you see those average hours going up in terms
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of how much people are making in wages, that's something people have been waiting to see. i think there are a lot of people wlo feel those kinds of people -- those job levels have been disenfranchised, it's good to see they're making more from a point of view of the worker finally getting a little more money. but i think it also confirms the need to be able to raise two to three more times. makes it so the $3 billion number i'm looking for from j.p. morgan because they report next week that the four rate hikes they make 3 billion more were consistent. and that means that i think what will happen is that you'll get the banks to back rally. remember the banks slid back yesterday. and i really think that, yes, i know the labor participation rate is too low, but i'm looking for a market which says we need rate hikes. because we can't have that leadership sink back and the market just go to f.a.n.g. again, facebook, amazon, netflix, google, alphabet. >> which just happened. >> it was a total f.a.n.g. day. >> was it a one-off?
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you talked about this yesterday a lot, perhaps tax reform will take a bit of a backseat to repeal, replace aca to other issues and therefore is not even a '17 but really an '18 event. >> i don't need to say a thing. >> on from there. >> yes. >> but today it may be -- >> today, look, we got some new tweets. it's just they're more relevant to a show i used to be a judge on "the apprentice." not as relevant to the corporate tax. >> although they involve it in trade. >> disparaged schwarzenegger's ratings on nbc on a day where today 12:30 we'll get that intelligence -- he will get that intelligence briefing and we'll see if anything comes of that. >> but when i did look "the apprentice," there's a lot of work that has to be done. maybe schwarzenegger's not doing the work. what am i focused on the wrong thing? focused on what the president-elect's focused on. is it a mistake? >> i didn't see all the exchange
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on "the aprprenticeapprentice". >> i fired melissa rivers, i didn't mean to. >> you didn't refer to yourself as a ratings machine -- >> my episodes did have some very good -- they're his episodes did have good numbers. i'm only addressing that because there's a string of tweets about it. >> i'm looking at this. i just, i mean -- is this going -- >> what, do you have a problem? a problem with the mandate? >> yes, i do. >> the mandate. >> i got no problems with mandates. got no problems with mandates, women dates, you can date anyone you want. >> we're going to get wells, jpm -- >> this is so important. we're in the earnings soup and those don't have strong dollar problems. i'm looking for them to anchor this. i'm even looking for my travel trust owns it, i'm looking for wells fargo to have a not disastrous number.
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>> it's not just financials that lagged though, right? >> yeah. >> yesterday we haven't had a new high on the s&p since december 13th. >> yesterday was a contra day. >> you're not in the sell the inauguration kind of mode. >> no, i'm in a belief that the money stayed in the market. you know, i write a show with my nephew cliff mason and we were stuck with this idea that it wasn't in the end the money didn't flow out, there was another time the money would have just gone out of stocks. instead it rotated. what? >> average hourly earnings, that was a big increase. i know we pointed it out. that is something that the fed's going to key off of. >> the fed says, hey, listen, now that's going up it's time to tighten. >> right. >> we'll speak to mr. perez, secretary perez's last time. >> it is. one last time. >> one last time. >> one last time. >> we'll see who replaces him on that job. don't know yet. >> no, we don't know. hey, we have that fellow from
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cke i use on the show on "mad money" a lot, he's a cost saver that fella. >> that's true. though i'm hoping we'll get gary cohen out to talk to us. >> they're all good. he's a great gas man, i used to run those commercials. >> the arby's commercials. >> used to run them where, on your house? >> i ran them when i had them on. they were killer. no one's replaced those ads. >> said competing with a billion dollar marketing budget at mcdonald's you've got to make them memorable. >> you've got to do. >> kind of like the cool hand luke when she's like clean iing the car. remember that? i'm shaking it, boss. >> still a lot of buzz this morning surrounding the president-elect's tweets about toyota from yesterday. as you know he tweeted toyota motors said we'll build a new plant in baja, mexico, to build corolla cars for the u.s., no way, build in u.s. or pay big border tax. japan today defending toyota. prime minister abe's chief
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cabinet secretary calling the company an important corporate citizen of the u.s. trump also making the front pages in japanese newspapers. this headline says trump tries to smash toyota. the finance minister says it's unclear whether the president has a grasp of how many vehicles toyota builds in the u.s. >> well, i mean, i think that the president-elect has been very tough on ford and on gm, but if you go to the state that i spend my time in mexico in, it is bmw, it is lexus, it is benz. that's who makes them there. they put them on the ksu union pacific. they come up. doesn't matter if they're from the center of mexico or detroit. >> where does all this end, jim? you've made this point many times in terms of what you've seen during your residence in mexico of the growth there. >> yes, very important. >> a lot of the components are manufactured in the u.s., i believe. >> they go back and forth. >> and they go back and forth and back and forth. if you continue down this road
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with large potential tariff on goods manufactured elsewhere, where does it stop? what about a drugmaker that is a u.s. drugmaker that makes all its drugs in ireland? >> i don't know. >> do you put a tariff on that? what about a foreign based drugmaker that makes all its drugs in the united states? because it actually inverted itself. >> i had the most problematic guest on of all time last night. i had rob sands from constellation beer. and i said what are you going to do about corona and modal. he said you cannot make mexican beer in the united states because it's not mexican. i had to think through that. >> it's true. >> i said can you make mexican -- is there a way to make mexican beers -- >> you can make mexican style beer. >> you can't make corona, it's not heche, texas. >> did you hear what dillard said in this interview after headlines came out yesterday about trump's would-be opposition to time warner/at&t. who cares what he thinks. this is dillard's words, who cares what trump thinks about anything unless it's obvious
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he's going to micromanage every element of things like antitrust. >> that's a good point. we'll see who he appoints to the antitrust division of the doj once sessions is confirmed, assuming that is the case. we'll see who he appoints to run the fcc. there's an expectation there that it will be very much hands off when it comes to the fcc. that you will immediately have a turnaround on net neutrality and a number of other things and that can happen quickly. but you're right, we don't know. and yesterday's report from bloomberg saying that a confidant continues to say trump opposes that deal, which did increase the spread in the deal. you know, it's very hard to know what to make of these kinds of things. >> he's granular about this. but president obama was granular about those trips to vegas. remember, he said that? >> i do. >> that was like vegas, tourism took a huge header and no one -- if he said trips to different junket places, maybe it wouldn't
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have hurt so much, but i don't want to give anybody a free pass. presidents can single out -- >> but it's clear in terms of a theme that he is building this case for a border tax. >> absolutely. >> if you don't make it here and you import ilt from there and bring it here, it's going to be taxed. >> but paul ryan's made that case for a long time. >> without a doubt. and in fact the journal today has an interesting story about retailers after analysis by other parties in terms of what the cost is going to be on their tax bill. it's going to be enormous. >> another reason to avoid this group, that group is really f m from -- look at old navy. >> eventually going to make close as well so put hundreds of millions of people out of work in emerging markets and then they can move all the manufacturing back here but it's not going to create jobs. >> the tech industry was the most -- by nafta. you can go over the labor department, i've looked at that labor department -- that's where
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we were decimated. >> thread a needle and put on a button and then you're talking about massive unemployment. >> these ties are from florence. >> that's very nice. i'm sure it was hand made. >> you went to florence with vik ki -- >> we went to italy together, yes. >> i watch all his documentaries. >> amazon, j. crew, house of cards. >> thanks, carl. they were good ones. he had a bunch of good ones too. unfortunately we haven't made them anymore. >> there's a lot of "shark tank" to watch. >> yeah, billion dollar faber. >> billion dollar faber. >> just a combination -- >> i like that. i like the way it sounded. >> when we come back, jim mentions gap and we want to talk about this rare bright spot for retail and what has been an ugly week. also ahead, labor secretary tom perez on this morning's big jobs number. two weeks left until the trump presidency. take another look at the premarket after that big day for f.a.n.g. and amazon and the nasdaq yesterday. more "squawk on the street" from post nine in a minute.
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♪ jc penney latest department store chain to report disappointing sales, comps down 0.8 hurt by weakness in women's apparel. gap is a bright spot rising in the market after post ago surprise 4% increase in december
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comps, that includes a 12% jump at old navy. as a result gap now sees full year earnings at the high end of the previously announced guidance. it's been awhile since old navy has been able to do this for the company. >> yeah. the company itself is calling itself slow moving train, not rolling to call an inflection point, as i'm reading the j.p. morgan note. supercash redemption days in december, year over year including tv new price point promotions there are some things going on that are good but this is maybe the most inconsistent of the majors. so i hesitate to say buy, buy, buy gap stores because then the next month could be different. >> i brought this up in our last conversation, but i mean, at what point do we start to have to include a discount for the fact that so much of their product is imported from indonesia, vietnam, turkey, mexico, china and all apparel selling companies? if this border tax -- you can't
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expense it -- >> if you can't expense your merchandise. >> you're going to benefit from a lower tax rate, you're going to benefit from capital expenses being able to be immediately depreciated. >> look, i think it's not a push. i keep coming back to why i like the bank stocks. goldman sachs see a price rise target today. they just don't have any of these issues. they're really in the sweet spot. >> some are trying to read into this border tax, say there's a minimum, right? a $5 cost to goods that's exempted, is that positive for dollar stores, right? for walmart. people are trying to read way deep -- >> the level of granular tito this thing is rather extraordinary and i think it's not been thought through and it's going to take forever to get through. >> it is. we're going to do a lot of analysis of it. we're referring to a lot of what is in the ryan plan, which may or may not become what we end up with. >> i'm not saying it's
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inconceivable. i'm saying it's so complex that if this is what the congress gets bogged down with, you're not going to have repatriation, you're not going to have traditional corporate tax reform. >> why are you saying that? bogged down with what? >> it's not going to get done. because this is really hard stuff. >> it is, but it's part of the plan. >> who's sitting there? like who's this guy? >> maybe it will be you. you were on "the apprentice". >> that was a long time ago. and i was a rigorous judge. and i got to tell you, i would -- i didn't want gene simmons to go, i urged him not to quit. >> you'd be a good negotiator in there. you would. you know all the different things. >> well, i like this job. can i keep this job? >> sure. but i think david's point is a good one. you're great on twitter. >> yeah. you know the impact, say that's going to hurt, that's going to hurt -- get it done in 20 minutes. >> you raise a good point. you raise a good point. >> i like when we render you
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speechless. >> i know. >> i mean -- carol alt was someone that i went -- i was all -- >> who? >> carol alt. >> she rendered you speechless? >> yes. >> i can see that. very beautiful woman. >> when we come back we'll get cramer's mad dash in a moment, count down to the opening bell. later on interview with tom perez labor secretary and intel's brian krzanich. more "squawk on the street" from the nyse is back after a break.
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♪ we'll count you down to the opening bell, last trading day of course of the week. about nine minutes before we get there. where are we headed on a mad dash? >> clear up what i meant is i felt carol alt should have been -- >> carol alt, former supermodel, was a contestant on "the apprentice" that you judged. >> and i did not -- my analysis was not accepted. but that's okay. i thought i made a very good case for her to go to become the cleb celebrity apprentice. clear that up. david, big court case, regeneron vers versus amgen. amgen wins. >> okay. >> this is over this pralien, very important high cholesterol drug a lot of doctors want to start giving to people once
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they're absolutely sure because this is the one if you have really high cholesterol this could be a lifesaver. >> was the court case about a patent. >> and amgen outright won. now, i can't believe -- there's a lot of people are saying wait a second. does this mean regeneron's just blocked? yes, for now. and goldman takes amgen from 202 to 218. >> wow. >> david -- i know. remember, sanofi's been buying regeneron stock throughout. >> yes. >> but i think this is a clear call to buy amgen. i think people should buy amgen if it's only up five bucks. this could be some sort of settlement, but david, it's stunning. amgen could go higher. >> interesting. amgen, jim, also on a very different front has an enormous amount of overseas cash, maybe the single largest in the industry. >> is that true? >> and certainly when you compare to their cash flow as a percentage versus a company like pfizer, it is by far the largest. so that's also -- they are a big beneficiary of potential
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repatriation at amgen. just something else to throw in there. >> that stock should be higher. i did not know that. >> yeah. >> and i just know this is a big win for them. amgen has a lot of things they're doing right right now. i like that stock very much. >> we have a lot of other stocks we're going to be following this morning. of course get back to that point we got on the employment number, 156. keep an eye on the bond market too when "squawk on the street" comes right back.
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c you're watching cnbc "squawk on the street" live from the financial capital of the world. we'll get the opening bell in just about four minutes. final one of this first trading week of the year on a jobs number of 156 below the 178 estimate, but november and october put them together with revisions they were upped by about 19. so pretty much in line. >> yeah. all you would need to see in this market remember is very different from the pre-election market is you need to see enough job growth, enough wage growth to be able to make it so the fed does raise normalized thing things, be able to get it so you really feel like we're going to be able to come into this year a little bit stronger. no sooner do we have greater auto numbers and people said peak auto.
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no sooner we had higher rates and people said mortgage purchase numbers were down. you don't want to see a lull because the lull just drives you back to cloud stocks. and there are not enough. nasdaq hit an all-time high yesterday. that's contra trump. you want to see the industrials. what? >> no, i know. contra trump. not a trump stock. not a trump stock. >> not a trump stock. >> not a trump stock. workday, not a trump stock. service now, not a trump stock. >> not a trump stock. >> box not a trump stock. >> best day yesterday for amazon in more than seven weeks on a week where everything else is sort of retail misery. >> and it went up throughout the day. at 9:45 it was up 4.5, looked like it was going to waver with the rth and then, boom, inflection point. by the way, costco, travel trust owns that, costco a good number but that's because you're going to see i believe a price increase in your membership. remember that is the brick and mortar version of --
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>> what do they charge for one of those right now? >> like 55 or something? >> okay. >> i don't know, my wife buys them. >> she has a black card? >> it's a great annuity and thethey have improved the website, which was horrendous. it was one of the worst out there. >> we did get some blue chip research today on disney, an upgrade, second upgrade this week this time out of rbc. they argue target 130, affiliate cycle fees and make this argument, jim, investors just love to love disney. >> isn't that something? talked about 65 billion in debt capacity, could sell or spin espn, it's just a nonstop story. >> it's now part of the landscape when you talk about disney whether or not they would do something with espn. >> i think if he does something it will be by february 10. >> what's feb 10, the super bowl? >> it's his birthday. >> oh. >> it's iger's birthday.
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>> do you keep track of all ceos birthdays? >> ceos with same as mine, yes. >> he's a little older than you are. >> yeah, but he's more aarp than i am, but good day to do things. we send birthday notes to each other. >> that is a good day. let's remember that day by the way. february 10. >> it's funny, i'm a month late sgler that is hysterical. >> isn't it just incredible? as for disney, yes, espn continues to be this conversation piece would they ever do it, will it continue to suffer declines. is it only the beginning really as we see the proliferation of over the top services at cheaper price points without sports does that incline people to say i don't need it? what percent of households really care about the sports programming and willing to pay the $7.50 a month or whatever? who knows. >> i think you're right. if there's going to be something that people aren't going to pay for, right? >> you're going to start to see entertainment focus bundles that
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don't have sports. >> it's big. it's very big. >> let's get to the opening bell here, s&p at the bottom of your screen. at the big board today, stanley, black & decker and professional bull riders kicking off monster energy tonight at madison square garden. big week for stanley on that craftsman deal. at the nasdaq lululemon celebrating fit week of 2017. >> i do not think lululemon is done. a lot of people are concerned about apparel. jc penney it was womens apparel. lululemon it's a mindset. it's about mindfulness. it's about -- and i know these things. >> you mentioned costco a minute ago, walmart is just now announcing john ferner, ceo of sam's club replacing roslynn brewer retiring at the end of the month. ferner is currently the chief
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merchandising officer at sam's, has been working there since he joined as an hourly store assistant in '93. >> wow. more turnover. i just don't want to see more turnover there. stock's down. doug mcmillan, he's got the mandate waiting for but walmart -- let me see that staff kind of -- it's like target. you don't want to see a lot of movement in retail. you want to see they've got the team. like costco, you never see any changes at costco. never. >> right. >> same people. you go to your costco, it's always the same people. when you get the free samples, it's always the same people. >> that's very helpful. right? i mean, i would assume that is very helpful. i know at home depot that was an issue for awhile and they dealt with it and improved a great deal. we've talked a lot about walmart and lack of wages contributing to a turnover in the workforce whereas costco of course pays a lot more with higher -- >> all sorts of benefits. you know, the great jim sen gal
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always said to me the secret is keep training cost down, that's deadweight cost. that's why mcmillan raised rates, costco has lowest turnover in the industry which is why they don't have to spend a lot of time having people who don't know anything behind the counter. >> turnover in training is a big part of their -- >> big for retail. people underestimate how -- and i think macy's, i'd love to see what the turnover is there. there's obviously issues at macy's. there's issues at kohl's. >> there's always issues in all of retail these days. what about best buy when you walk in and really want help from somebody? >> well, that person tends to be i wanted help at best buy to buy apple and person worked for hewlett. those places are very hard to navigate. navigate is a nice word. >> yeah. financial trade is back. >> yes. >> for now. regions, key, pnc, fifth third, suntrust, citizens all near the
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top. >> zion, first horizon, key, bbt, those are the big four i look at. you can add comerica but it's had such a run, but those all work. those all work for me because zions by the way has the best leverage to higher rates of all the things. they are the ones that do best with changing compliance laws. that's a good one to watch. very good zions. first horizon moved eight points since i had the company on last. beth moony is doing a great job at key that is incredible but no one gives her credit. no one. except for we do. >> you do. >> beth -- the stock was at 11, we said bye, bye, bye. she made great acquisition first niagra, killer acquisition. killer. >> goldman once again leader on the dow, disney close behind. mcdonald's is lagging. >> oh. >> we did get a downgrade at ubs to neutral. they argue they got good things in moex, franchise model, some market share gains, jim. but they say it's still early and comps are going to be tough. >> and they say catalysts are
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done there. they like qsr, they like burger king, i don't know. we have to get easterbrook back on when he reports maybe we get a sense things are not as stagnant. i think we need to see more technology there too. need to see more of a -- you really need by the way -- got to get better affinity programs. got to get the technology they have in australia in america. >> see ruby tuesday today down almost 20%. >> i don't know. good-bye ruby tuesday. >> hang a name on you. >> that's good. >> q-4 comps down 4.1. restaurant margins down 400 basis points. >> they had the best salad bar in the world. i don't know how it happened. what? their salad bar was unbelievable. >> was it? >> it was the best. >> so what happened? >> i don't know. i don't know. i mean, it was great. just pointing it out. you probably don't go to restaurants. have you ever been to a cheesecake. >> a who? >> cheesecake factory. >> never. >> it's a store --
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>> i understand that, has a very long big menu. we order in sometimes in englewood cliffs, we've ordered in from cheesecake factory, so i've eaten their food but never been to one. >> he doesn't go to restaurants, doesn't go to retail. it is so hard to deal with you. i don't know. i don't know what to say with you. ever been to panera? >> yes. >> okay. >> i have. line was too long though. i left. >> ron shake is just going to have a heart attack he just heard that. >> it was years ago. >> that asian chicken is 435 calories, it's a killer, david. take apple, not the bread. >> okay. >> i know you've been watching teva today. >> did anyone see that? >> yeah. >> that presentation, oh, my, they cut the forecast, 6650, goes -- 490, 6 to 4.90. interesting when you get to the granularity, it's their ms drug that is going to go off patent. big reduction, a billion dollar
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reduction. they thought by taking allergan's generics, which they bought for a fortune, it would somehow make it so people liked it more. no like. >> but the stock for all of that not off that much. now of course we are talking about a stock that was almost $70 a share in early' 16. >> ruby tuesday, it's a big cut. >> it's a big cut, but stock down 3.5%. am i missing something? >> no, people who can look at a calendar could know was going to have that generic stuff. i think it's still very daunting. when you hear generic drug, you hear sell, right? we just don't like that. that industry by the way another industry, the medical device industry that had been so hot. just so bad. oh, my, so, so bad. like the knee, nobody getting knee replacements anymore. apparently not selling well. >> all those companies that were involved -- remember mylan and
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perrigo and teva, they've all been crushed. >> and endo is not anything to write home about. >> endo was horrible. just horrible. >> this group has killed a lot of hedge fund managers. >> yes, it has. >> let's get back to the jobs number this morning and the last major economic snapshot of the obama white house. the labor department says 156,000 jobs were added in december. unemployment ticks up to 4.7. joining us one last time first on cnbc with reaction from the obama administration labor secretary tom perez. mr. secretary, it's great to have you back for one last round. thanks for joining us. >> hey, it's been a pleasure to be with you over these last three and a half years. >> we've been asking you over all these years whether or not wages are close to a tipping point. is this 2.9 number the sign that one is truly here? >> well, the wage growth is the best wage growth we've seen in the recovery. so that's the most important part of this report. i think it's also important to take a step back and look at where we were, where we are.
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you know, eight years ago elaine chao was here telling the american people we lost almost 800,000 jobs, the unemployment rate was heading toward 10%, the economy was in the tank. here we are now the unemployment rate's 4.7%. we've had 75 months in a row of job growth to the tune of almost 15 million jobs. we had a global economic recession. and when you look at the recovery, you know, we have grown more jobs here in the united states than all of the g7 combined. the unemployment rate was 9.9% when that job killing affordable care act was passed, now it's 4.7%. we've seen the ranks of the uninsured decline to its lowest level in history. and we're bending the cost curve. so, you know, we inherited a mess, this president. and we're much better off now than we were eight years ago. we've got more work to do, but i'm heartened by the wage growth we see not just in this report but in the recent trend data.
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and we've got to continue to sustain that progress. >> mr. secretary, jim cramer, i will miss you. >> you too. >> continue onto great things. i want to ask your successor, mr. trump has picked andrew pud zner. do you think that role is going to change under mr. pudzer. >> that will be up to the next president. what i can say is jason furman at the white house has looked at the minimum wage increases that have been put in place in states across the country. skb if doomsayers are correct, we would have seen the et e evidence of that in all these statewide minimum wage increases that have been enacted with the strong support and encouragement of the obama administration.
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and guess what, once again the evidence shows that people have more money in their pockets and it hasn't been a job killer. how many times have we seen that evidenced? but it's the same old talking point. and so this president's been fighting for higher wages, we're going to continue january 21st to be fighting for higher wages because americans deserve a raise. and many states have given them that. and it's put money in their pockets. and it's been great for the economies there. by the way, more people buy hamburgers when they got money in their pocket. >> secretary perez, love to get your take on sort of the bigger picture. i've asked you about this various times along the way, but as you leave office, the rise of robotics, the rise of artificial intelligence, of autonomous vehicles, of so many different things that we're really just at the cusp of but we're starting to see in our everyday life, many people think they're going
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to be job killers or if they're not they're going to displace an enormous amount of workers for a period of time before somehow new jobs are created. what do you think as you depart this job and look at the future of employment? >> well, you know, innovation has always been the dna of this country, jim. when the industrial revolution hit in the late 19th century, people were saying, you know, that there's not going to be a need for humans. and it turned out that was overstated. what i learned growing up in buffalo, new york, is that i think a key to success for all the workers in this country is to make sure we equip them not only with the skills to do today's jobs but the core competencies to do tomorrow's jobs. so if we have autonomous vehicles, five, ten years from now, then we're going to need people who can repair autonomous vehicles. and i saw this, you know, today the cloud is the i.t.
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infrastructure of choice. in a few years the cloud is going to be like the ab -- we have to whatever cloud 2.0 is or -- we've been a resilient economy, and the key lesson i learned and learned the hard way growing up in buffalo, new york, watching parents of my friends who didn't have that opportunity to upscale when the economy evolved, they took a hit. and that's why i love the department of labor because we're the department of opportunity. we invest not only in the skills of today but producing folks who may have been yesterday's steel worker but now they're today's advanced manufacturer. and i'm confident that when we continue to invest -- and you have to invest in our human capital. a good company understands that investment in human capital. and, you know, in the bush
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administration what we saw here at the department of labor was the budget for employment and training investments went down. that was short sided. there is no better investment than that investment in our human capital. that's why we spend so much time on apprenticeship. because apprenticeships is the other college except without the debt. now we have apprentices working in the i.t. sector that we're helping to seed in the health care sector, in the cyber security sector, in all of these high growth industries. and i'm confident that if we continue to invest in our human capital, we can adjust. i applaud innovation. you can't swim upstream against innovation. but what you can do is equip people with the tools to handle innovation. >> well, i have to ask, mr. secretary, do you think that the bills can ever get in the super bowl as long as tom brady's playing? >> well, i'm very much looking forward to tom brady and bill
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belichick's retirement party. i got to be honest with you. i didn't shed a tear when rex ryan was fired because the bills need a coach, not a carnival barker. and that's what they had for the last three years. >> as a jets fan, we've been there, done that. >> yeah, you know, i'm a serial masochist. >> there you go. >> i will be a bills fan until the day i die. >> you guys made some strides on certain metrics. time will tell. >> maybe tyrod's last day though. >> mr. secretary, thank you as always. >> a pleasure. best of luck to you. >> thank you. let's get to bob pisani on the floor here see what's moving. good morning, bob. >> good morning, carl. good to follow labor secretary because it's the employment number. most people down here feel that that kind of confirms three rate hikes at least for 2017. that's the number everybody was looking for was above consensus.
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so bond yields up, dollar up, what's not up that much a little surprisingly is stocks. only eight dow stocks up. let's look at the sectors. disney being helped by an upgrade, but banks are up. they haven't generally been up this week. this is kind of a trendless week still here. health care has been a modest market leader. it's not doing anything today. real estate had been doing a little bit better recently. it's not doing too much. goldman's been the big leader this week believe it or not. and it also not doing much. so if you look at the week here and you can see why i call it so trendless at this point. gold's been a big leader, i'm including the open this morning, and health care's been a big leader and real estate's been a big leader. as you see they're doing nothing today. so there's no trend here. banks actually have been below par. s&p up about 1.3%. they're doing a little bit better today, but not generally on the week. and industrials they haven't shown any leadership really for several weeks. that's why i'm saying we're just sort of grinding around here at the same range in the index as passing around sectors of modest
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gains on a week-to-week basis here. a lot was said about gap. i think the important thing about what went on there was that old navy number up 12%. the traffic definitely improved, but boy, we heard a lot of talk about t-shirts below $5, jeans under $10. it was an impressive number, but it was an outlier. so gap was the last company that reported late last night. but if you actually look at the numbers for december same store sales, remember there's only 18, 19 of them that still report. jc penney was down. l brands. buckle was down 15%. cato down 12%. those numbers, those are about in line with the expectations. that's what's so awful. it's not like these missed on dramatic numbers. gap was surprise but everybody else was about in line with expectations. that's how far we have come at this point. a lot of discussion about the growth in holiday online shopping, the numbers have started coming out late this week. slice intelligence is widely discussed on the floor here.
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their overall online shopping they had up 20% for the year. 20% for holiday. and amazon share of that 38% up slightly from the prior year. but that's an astonishing number. think amazon 38% of all online shopping right now. finally, just want to note there's only eight dow stocks to the upside. disney is one of them, again another leader this week, we got another upgrade from rbc capital. remember it was evercore that helped them earlier this week with an upgrade. there's a lot of talk about new rounds of affiliate deals in 2017. basically right now everything firing on all cylinders for walt disney. new high for them. dow's down 35 points. carl, back to you. >> thanks so much, bob pisani. obviously a busy morning for rick santelli in the bond pits as well. let's check in with him at the cme. hey, rick. >> good morning, carl. you know, you look at the vix, you don't need to go up and down with your head very much, you just kind of watch it mostly drift. but if you were to look at overnight borrowing rates in china, you'd be like watching a
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tennis match except for going up and down. some of these rates have been super volatile. that's something to pay attention to. today's data, look at intraday of ten. first move lower, dollar index, first move was lower. but they reverse. and they reverse rather quickly. one of the reasons is that wages on a month over month basis were up 0.4, but the number i was imnamerred with is year over year up 2.9. you have to go all the way back to may of 2009, that's a biggie and a big time reference that we've kind of leaped over. now, when i talk about what's going on with china and talk about foreign exchange, they are really at the epicenter if you trying to figure out all the other markets. just to prove it, let's pick the beginning of november. why? because ten-year note yields didn't get in the negative territory until november, meaning they settled at 2.27 in '15. everything was lower, until november. now, november 1st you see it on the left there, that's when we
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started to zoom. now look at the dollar/yuan for the same period. wow, looks kind of the same. now look at the dollar index. you really want to know what's correlating and what isn't. and what used to isn't anymore. let's look at the same chart of bunds. completely different look. you know, right now bunds are actually up on the week in yield and tens are down about six, bunds up three or four. now, that's not huge. but it is also correlation readjustment is key and you want to stay on top of it. carl, back to you. >> thanks so much, rick santelli in chicago. when we come back, intel's brian krzanich life from ces in las vegas. we'll talk about the future of tech as well as the future of his company and where a trump presidency fits into that mix. dow's down 51 points. dragged down by verizon, walmart, 3m, a lot more with jim too in just a minute.
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later today on "closing bell," steve liesman with exclusive chicago fed president
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charlie evans. we'll talk about that. dow's down 33. stop trading with jim after a break.
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time for cramer and stop trading. >> i envision throughout the country there are people right now at the ceo level being
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advised, please, you may get a tweet, how do you respond to the tweet? i take a company like nike the stock has been going up right after they reported that number that some people didn't think it was that good, it seemed to be putting in a bottom, think about under armour, but this is a company where mark parker has to be thinking what happens if we get a tweet on cross border? because nike is the classic cake u case of the company that brings them in from outside. if i were nike right now, mark parker, very smart man, i'd be saying what's our plan? what's our plan? >> cnn had a report yesterday that some tech companies out west are making sure there's someone ready to respond or at least receive a tweet at 3:30 in the morning west coast time. >> well, that's a new position. >> yeah. >> right? i mean, like cfo, c.o.o., tweeter, tweet responder. >> it is absolute necessity. you have a corporate communications strategy to deal with that potential. >> right? >> without a doubt it's been a conversation going on for the last few weeks. >> i think it's important everybody has to have an instant and mark parker should be thinking about that and mark parker is a great executive.
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i think nike's a terrific company but they would be a cross border company you could hit very easily. >> what's on mad tonight? >> we have a game plan tonight it's going to be great because i'm going to call out all these different banks. i'm committed to these bank stocks. i think they are -- when they move, like if anyone remembers the great 1991 -- 1990-'91 after the first gulf war, it was led by the banks. it could happen again. this bank rally's not done. these are still inexpensivnexpe. >> jim, we'll see you tonight. >> everyone have a great weekend. good luck to everybody's teams. >> thank you. >> hope the dogs get some manners over the weekend, all right? >> oh. >> i feel for you. >> we'll see you tonight. "mad money" 6:00 p.m. when we come back, the countdown to the president-elect's much anticipated meeting with intelligence officials. dow's down 34. don't go away.
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♪ welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at post nine of the new york stock exchange. market's down 26 on this jobs
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friday trying to make some sense of just which trades are in favor right now. whether or not this reflation trade continues or whether there's been some softening of the long financial long dollar trade that's been happening since election day. we'll watch all of that with oil basically flat this morning. and we've got even more economic data now crossing the tape. let's go to rick santelli in chicago with those numbers. rick. >> we absolutely do. thank you very much, sara. let's look at our november read on factory orders. down 2.4, a little worse than expected. it follows an up 2.8, which was a slight revision. you know, i could find a minus 2.4 in december of '15, but to find a bigger negative number you have to go to august of 2014 when it was 9.7. remember august of '14 because maybe the big number is our final november read on durable goods orders. you know, the preliminary read was minus 4.6. so you take that and throw it away, kind of like mid-michigan reads and it now stands for november minus 4.5, subtle
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difference. but when's the last time i've had a number that negative? same time period which makes sense with factory orders being part of all the durable goods, all part of the same diagram. that's august of '14. let's go through some internals, shall we? extransportation up 0.6, capital orders, non-defense aircraft, everybody's favorite proxy for business spending, capital spending, it was up 0.9. that isn't too bad. it was the same as our last look, so it remains the same from the mid read. we can do better, but at least it's positive. that was the midpoint read as well. finally we see as sara pointed out, the dollar zoom, zoom, zooming, rates recouping some of the early buying into selling and everybody's watching the dow. if those two pieces are right, the dow should be pushing positive territory at some point. carl, back to you. >> rick, thanks so much. rick santelli in chicago.
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president-elect preparing to meet with u.s. intelligence officials today at trump tower. our john harwood joins us this morning with what we might be expecting to hear later today. john. >> carl, it's a fascinating moment. the top representatives of the united states intelligence committee are going to walk into that building, meet with the president-elect around 12:30. and they're coming with the feeling that the president-elect has shown disrespect for their work, their confidence, their integrity. here's james clapper at the senate armed services committee hearing yesterday. >> i think there is an important distinction here between healthy skepticism, which policymakers to include policymaker number one should always have for intelligence. but i think there's a different -- >> now, will the president-elect come out of that meeting with new respect for their conclusion
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that russia in fact deliberately hacked the united states election and also for the motive of helping donald trump win the presidency? donald trump has not accepted that conclusion so far. the hope of the intelligence community is that he sings a different tune. there were some tweets this morning that suggests donald trump may have been preparing himself for that possibility. one of the things he's been concerned about is the idea that his victory was dele ygitimizedf he accepts that conclusion that russia helped him win the election. he tweeted this morning that hillary and her supporters were never going to beat him because they lacked the passion of his supporters. went onto say that it was obvious in the two weeks before the election that he was coming on strong. they could see the handwriting on the wall. does that indicate that donald trump is going to take solace and try to advance the view that he would have won anyway? it's important to note that in the senate hearing yesterday
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republicans and democrats alike were making a distinction between the conclusion that russia had the desire to impact the election, help donald trump from whether or not they in fact did affect the election. john mccain opened that hearing saying we're not questioning the results of the election. if donald trump can get to that place, that would be in the eyes of the intelligence community a big step forward because these two sides, the president-elect and the intelligence community, have got to work together once he takes office in a little more than two weeks, carl. >> john, that's just where i wanted to go. can you talk a little more about the significance of the president-elect's statement on this as we await to hear from him after those meetings. what comes next? i'm trying to figure out where all of this goes. >> well, we're going to wait and see if we see the president-elect come before cameras this afternoon and patch things up with this community. but just remember, sara, the intelligence community of the united states is going to be a
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lynchpin of donald trump's efforts as president to take on isis and to pursue other americans' security priorities. there's no alternative for them working together. the individuals at the top of those agencies will be replaced. james clapper's going to retire in a couple of weeks. we're going to have a new director of national intelligence, dan coach, respected former senator from indiana who was named yesterday. mike pompeo is going to be the transportation director, that's true, but there are thousands of officials beneath that level who the president is going to have to rely on. they have to figure out a way to work together. >> not to mention the ambitious agenda he's proposing. john, thank you. we'll wait for word from trump tower. >> thank you. >> meantime back to the economy and markets. 156,000 jobs created in the month of december according to latest payrolls report this morning. the last one before the president-elect takes office. joining us now to discuss it is
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david kelly and diane swonk, u.s. economics founder and ceo -- excuse me, d.s., thank you both for being with us on jobs friday. david kelly, we're looking at market reaction, the dow and s&p 500 just going back positive. this was the initial gut reaction. bonds selling off, the dollar stronger, is that the right upshot here do you think from what was a weaker headline number but much better wage growth? >> yeah, i don't think this read should change the narrative a lot. i think we should see interest rates gradually rise. i think we should see the stock market gradually rise. i think the important thing here is we were a little weak in the payroll number, but we had bad weather. we've got stronger wage gains, but the key thing is this is an old expansion. in three months it's going to be the third longest expansion since 1900. sort of expansion emeritus here. think about a professor emeritus, they get some respect for their longevity, but you
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don't expect much vigor. i don't expect much vigor from this economy. i think it will continue to grow at a moderate pace that should allow the fed to normalize, but i don't think it's going to be a boom in any sense later on this year and in 2018. >> which perhaps, diane, is why the wage growth is so important. that's been a missing component. the fact that we did see the biggest uptick in wages since back in 2009, the white house labor secretary thomas perez told the guys last hour that was the most important part of this report. do you agree? >> it was. and i think it also was a rebound off of a very weak november number. we are expecting close to a 3% handle on a year over year basis. remember in january we have another round of wage increases at the minimum wages at the state and local level which will boost wages then. we now have leisure and hospitality wages tied with information sector as the fastest growing wage category as minimum wages at the state and local level have hit a critical mass. i think that's very important because what we saw last year was the improvement in median
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incomes really come from the lowest income stratas. i think and that's something we had not seen in recent years. more broadly, i'd point out the increases being driven by the health care sector are something we really have to watch given the push in the new congress to repeal obamacare. if they repeal it without a replacement, that could cause uncertainty in a sector which has been a major driver of employment gains in recent years. >> diane, everybody's watching wages, but along with this labor participation rate, how much slack do you expect there will be in the labor market in six months, in 12 months? >> you know, that's the great question. clearly chair yellen would still like to push the limits and reengage more workers. we did see surprisingly a little bit of a tick down as the unemployment rate ticked up, the u-6 ticked down to 9.2%, still nowhere near that sort of 7.9% low that we hit prior to the crisis in 2006. but a move in the right
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direction. and i think you're going to start to see as we move into 2017 as long as policy doesn't get in the way of the economy continued gradual improvement that whittles away at the sort of those who are disengaged and reengages them a bit as we move forward. but clearly the fed has been disappointed on the ability to boost the participation rate by any significant amount. >> david, do you think that there's a risk of policy getting in the way of the recovery and the stock market climb? we're hearing more in the last 24, 48 hours about border walls and border taxes. do you have to start factoring that in to your models here for the markets? >> yeah, obviously we have to look carefully at this. i think the important thing for the economy is, you know, we need trade. we need trade to grow. and we also need more immigrants. one of the remarkable things about the labor market over the next ten years is about 85% of the new growth in the working age population's going to have to come from immigrants, not from the native born population. we actually need more immigration.
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and so that does concern me when i see signs of further restrictions on immigration in this country. we need these workers who are almost out of well qualified native born workers. >> go ahead, diane. >> i just wanted to underscore what david said. we've actually seen a major slowdown in immigration because of the e-verifications that we've seen it slow down to about 1 million a year. that's well below what the census projected we'd get and it's one of the reasons why population growth has now slowed to depression era levels. and i think this is something we have to be very concerned about because we do need to reengage those workers who are disengaged, but we also need immigrant labor in many key sectors. i think that is something that's sort of gotten glossed over and may be in reversing. and i think that's something we have to watch very closely. >> all right, guys, we will leave it there with the ten-year note sitting just below 2.40 right now. david kelly and diane swonk. when we come back this morning, the president-elect taking on the auto industry as you know, a tweet about toyota yesterday. got the latest on that and the
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response from some japanese officials. plus, the former reserve bank of india governor with us live. we'll get his take on the fed raising rates of course and this world of a trump era. a lot more "squawk on the street" ahead in just a minute. ouyoout s e drblre do nte,®ar, dnk a.term ryr aninmo tha.
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let's get to dominic chu and get a market flash this morning. >> good morning, carl. we're watching shares of fiat chrysler up about 6% now tracking for sixth straight up
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day eight out of the last night days it's been up. today 6% on the heels of two upgrades one by analysts at evercore going from sell to buy rating. also goldman sachs putting fiat chrysler on conviction buy list as well. both analysts' teams citing the ability for fiat chrysler to attain their profitability goal. so those shares certainly tracking and ones to watch in the auto world on this morning here, carl, back to you. >> dom, thank you for that. donald trump yesterday target ing toyota yesterday. >> we were talking about the tweet yesterday and the reaction in the stock market to shares of toyota. well, now you have japanese officials in japan overnight saying i wonder if the president-elect realizes that toyota has ten factories here in the united states, employs tens of thousands -- i think 136,000 people here in the united states. when you take all of that together, you have to look at where the president-elect trump's tweets, what they're targeting right now.
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and they're almost all explicitly targeting mexican auto production, whether it's toyota and plans to build corolla in mexico starting in 2019, the gm cruze, hatchback is made there currently and imported to the u.s. and then you have the ford mexico plant which the company announced earlier this week that it is scrapping. all of this brings up the question how many imported vehicles are sold here in the united states, and really which countries send us the most vehicles? mexico is the largest at 1.98 million vehicles, close behind is canada at 1.96 million, and there you have japan at 9%, germany, korea and then a bunch of other countries make up the remaining 5%. basically you're looking at about 7 million vehicles that are imported. and it's not just full vehicles. you got to look at the auto parts that are manufactured overseas. that's a huge story in terms of auto import values both parts and vehicles, mexico by far is the leader. about half of that from mexico comes in the form of auto parts,
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and that's why people are focusing on a couple of areas in terms of an impact for stock investors. first of all, it is the parts makers or the parts retailers. start with auto zone, o'riley, advanced auto parts, still unclear how much of their profits might be impacted by foreign auto parts that could ultimately face some type of a tax. and would that make people say i'm not going to buy that because i have to pay a little bit more? also remember borg warner, whether it's eaton, honeywell, a slew of other parts makers, they have plants in mexico and overplaces overseas as well, but a lot of what is built in mexico, it's not just the cars, guys, it's the plants that supply the parts to those vehicles as well as to the auto parts retailers here in the united states. >> phil, you mentioned the threat that president-elect trump tweeted of a border tax if they don't start bringing that production to the u.s. what would that mean for some of the big automakers? have you done any math? are the analysts looking at that? >> there have been some preliminary studies that have
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been done. now, one that was done by the center for automotive research, which is this study was funded in part by the auto industry, so you got to keep that in mind, their estimate depending on what that tax might be is a loss of about 450,000 vehicles in terms of annual sales. but again, we don't know what the tax might be. we don't know what that might do either to profitability for the automakers or to the prices paid on the lot. one thing is clear, sara, if you're asking people who might be looking at a $19,000 small car to suddenly pay $21,500 for that small car, there are a lot of people who are going to say not doing it. not doing it. i'll hang onto my car a little bit longer instead of buying a new one. >> there's a good tweet this morning, there are 145 million payroll jobs in the united states. 91.5% of which are not in manufacturing at all. so we have to sort of keep some perspective of just -- >> very good point. >> where the labor base is in this country, phil. thanks a lot, our phil lebeau.
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>> that seems to be a target nonetheless for the president-elect. when we come back, we'll be joined by the former reserve bank of india governor, his take on america under donald trump and the world as well. the fed raising interest rates and a whole lot more. plus, taking a look at stocks after today's weaker than expected jobs report. but better wage figure. looks like stocks have turned around from an early miniselloff and are now just positive. at least the dow and s&p. nasdaq leads up almost 0.25%. goldman, technology all strong today. much more ahead on "squawk on the street."
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♪ welcome back to "squawk on the street." let's send it over to our own steve liesman at the american economic association conference in chicago. sitting down with a very special guest. take it away, steve. >> yeah, david, thanks very much. i'm here with raghuram rajan, former chief of bank of india.
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i want to start brexit, election of donald trump, all of this seems to signal a global, anti-elite, anti-globalization move on the part of different and separate publics. >> right. >> is it something that gives you concern for overall global growth? >> well, it does create political risks around the world. and it creates the risk that there would be anti-trade moves, that's problematic. but on the other hand the world is picking up once again at the beginning of the year we are optimistic about global growth for 2017. my hope is that better sense prevails. >> what do you see that makes you optimistic? what data are you looking at? >> well, we just had the jobs number today. >> yeah. >> u.s. jobs looks pretty good. we are pretty close to full employment in the united states, even in the uk, which is interesting. the two areas where we had these events. >> right. >> are areas with pretty close to full employment now. but i think japan is picking up. the big question about china,
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what's going to happen there and how it plays out. most people think that with the party congress in october growth is going to be sustained until then. so broadly it looks like the numbers will probably hold up. europe is also doing reasonably well. germany the growth numbers look good. so, you know, as good as it has been for the last so many years. now, where we get a sudden burst of growth as you know that comes from the long awaited productive boost which seems to be missing so far. >> how would you forecast the economy if trade barriers began to be erected? if import tariffs and even with brexit which the uk will lose access to the single market union? >> absolutely. this is a source of big worry because often the sentiment out there doesn't really understand how important these things are to economic activity. for example, if we focus on
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manufacturing in the united states and erect barriers to preserve jobs in manufacturing, the biggest exports for the united states are in services. so a lot of stuff could happen in services from other countries stopping the export of services. if we get into a tit-for-tat trade war and given across the world we have elections, politicians need to stand strong during these elections, you may get reactions which are unintended. and we'll all become poorer as a result. >> i think my colleagues in new york are going to want to pick up on that macro sufficient in a second. but i want to ask you specifically about india. you just left there. they did this demonetization thing, which is a big long word for saying they took the big bills out of circulation. was that a good idea? what is your comment on that? >> i was afraid you would ask this, unfortunately i can't speak about this for a year after leaving office. >> is that a rule? >> it's more self-imposed to give myself a chance to speak. >> india's off the table. >> india's off the table
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unfortunately. >> sara, are you -- oh, i'm going to keep going. let's pick up on the notion about trade barriers. is there a way that you can think of to address the concerns that the public has? it's not like people are wrong to have these fears and these concerns. and yet also keep the goods flowing across borders. >> no, no, absolutely. the point is in large countries we have been sort of a little slow in working with the consequences of trade on real people. so if somebody loses a job, how do you allow them to transition to a different area? >> right. >> the problem of course it's both a question of mindset and actual help. mindset in services, we read in "new york times" yesterday lots of jobs in nursing, but will a guy who's a steel worker want to move to nursing? there's a mindset change that needs to happen. that's difficult. second, help. how do you transition? you can keep saying we're going
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to provide you assistance, but the kind of assistance you need starts from counselling. you know, where are the areas you have strengths? how can you be trained? and then provide the actual help on training. >> right. >> countries like sweden for example have perfected this because over the years they've been buffeted by trade shocks and they've learned to adapt. in the u.s. because it's a continental economy, the need to adapt is much less. you sort of sustained it, the steel jobs have gone on, but now finally it's caught up with us. >> sara has a question back. >> thank you, steve. dr. rajan, because of some of the factors you were talking about, trade, brexit, trump, the dollar has gotten super strong again. now at the highest levels in more than a decade. is it too strong for the world and for the u.s. economy? >> well, it certainly does reflect the fact that the u.s. is the first out of the trench in some sense in monetary policy. it looks like the u.s. will be raising rates before the other
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big central banks will. so that's one factor in dollar strength. the second is the u.s. economy is strong. and if in fact we get a fiscal boost, it may run even stronger than many people anticipate. that's another reason for dollar strength. but third possible reason for dollar strength and this is less understood is if you do impose tariffs, for example on imports, then that is also going to add to dollar strength in a certain sense. so it's self-defeating to some extent because you reduce the viability of the exports because of the adjustment of the exchange rate when in fact you impose high tariffs. so all these are reasons why i think the dollar's stronger. >> i guess i'm just wondering at what point does it become destabilizing for global economic growth to have currencies going so wild at these levels. >> well, eventually it does. i think for now it's helpful for japan, helpful for the ecb
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because, you know, it doesn't put pressure on them to do still more extraordinary accommodation. and it allows them to slowly exit what they're already doing. the bets many people have is that the ecb will start moving out in 2018. so having the strongest economy -- large economy in the industrial world start moving out i think is appropriate. it will imply some dollar strength. takes pressure off other central banks. my sense is when they start matching the u.s. in their exit, you will see some reversal of this. >> dr. rajan, i noticed by the way sara treated you with more respect than i did. i call you ragu, which is short of your name. >> absolutely. >> short of your name, monetary versus stimulus. is there a role here for the fiscal side to come in and does it actually replace the monetary side? >> well, if it had come in a year or two ago, it probably
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would have been better. i think at this point we're running close to full employment and it's more of a substitution. if fiscal gets stronger -- >> take the monetary out. >> the monetary will have to move a little toward off inflation. we saw high wage growth this jobs number. >> a lot of people knew you were a smart guy before this happened, but what happened was in '06 and '07 you stood up in front of the elite of the economics world and said you guys have this wrong. that there's risk underneath that you are not seeing. and that turned out to be 100% correct. right now are you seeing that kind of risk, are there concerns you have for the global economy more broadly for things we're not looking at? >> i think you've already highlighted one of the risks, which is the political events. surprised it took so long to come. the effects of technological change have been with us for 20 years. but the fact that it has now come together across a number of countries, i think it's targeted at the wrong thing. it's targeted at globalization, at integration, which are
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important part of the answers to the other problems we have climate change, aging populations. the only solution we have is through globalization to those. but for technology we have to make the adjustments we talked about. the other big, i think, concern is a shift in growth models. growth models for emerging markets. china has to change its growth model. >> from extorts to -- >> from exports to imports. but other emerging markets focused on export led growth also have to adjust. and that's a big risk. >> dr. rajan, ragu, thanks for joining us today. sara, back to you. >> thank you. >> mr. leisman, thank you for that interview. coming up from the american economic association, steve will have another great interview 3:00 p.m. eastern time he will be joined by chicago fed president charlie evans. let's get to sue herera get a news update at this hour. good morning, sue. >> good morning, carl. good morning everybody. here's what's happening at this hour. the head of the senate foreign
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relations committee says if the u.s. abruptly rejected the iran nuclear deal, it could create a crisis. but senator bob corker says he didn't expect that approach under the trump administration. he spoke to reporters at a breakfast sponsored by the christian science monitor. russia says it's withdrawing its aircraft carrier and some other warships from the waters off of syria. this is the first step in drawing down military forces in that country. the admiral and accompanying ships will be the first to leave. upstate new york is digging out from a major snowfall that brought more than two feet of snow. burying a small town of co copenhagen and looks like the weather won't get much better for that region. another one to three feet of snow is expected through the weekend. and the british automaker bentley announcing a new luxury car. calls continental super sports model the world's fastest and most powerful luxury four-seater car. top speed 209 miles per hour. no word yet on its price.
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all right, that's the news update this hour. carl, we couldn't get one because we both need five seats. >> if you have to ask, sue, better not continue with that. >> exactly. >> thanks, sue. when we come back, president-elect trump preparing to get a briefing on the alleged russian hacking. we'll talk to former deputy national security advisor ambassador jim jeffrey about what we expect out of that meeting. dow down two points. back in a minute.
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fbi director james comey set to head to trump tower this morning. comey will join the nation's top intelligence officials for a classified briefing about what their agencies have concluded about alleged russian hacking and the u.s. presidential election, an issue on which trump has been very consistent. take a listen. >> i don't think anybody knows it was russia that broke into the dnc. she's saying russia, russia, russia. but maybe it was. i mean, it could be russia, but it could also be china, could also be lots of other people,
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could be somebody sitting on their bed that weighs 400 pounds. she doesn't know if it's the russians doing the hacking. maybe there is no hacking. but they always blame russia. she has no idea -- >> you take a stand -- >> russia, china or anybody else. she has no idea. >> i am not quoting myself. i am quoting 17, 17 intelligence -- do you doubt 17 military and civilian -- >> our country has no idea. >> joining us this morning former deputy national security advisor ambassador jim jeffrey. mr. ambassador, good to have you. good morning. >> good morning. thanks for having me on. >> "the washington post" says this meeting has a tenor of a showdown. how do you think it's going to go? >> it's hard to say. the problem here is that if you accept as i do the intelligence community's conclusions, then the russians tried with considerable skill to infiltrate our electoral process into tilt the election towards donald trump. that's very hard understandably for him to accept because he's
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part of having one in the electoral college and he doesn't want to be challenged, nor would any president. the problem is facts are facts. and to the extent you can have facts in the intelligence business, these facts seem to be beyond challenge at this point. >> if you were elected though and people were arguing it was due to some foreign intervention, you wouldn't want to hear this either, would you? >> well, that's my point. i mean, i can understand up to a certain point why he's concerned. many of the intelligence community senior leaders such as john brennan who i know very well worked very closely with president obama so he may feel that there is some bias. he cites the 2003 weapons of mass destruction in iraq case. nonetheless we know long before any of this happened that russia was using similar strategies with similar what the intelligence community calls fingerprints on efforts to influence political outcomes
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throughout europe. we've seen this again and again and again. and what the intelligence community does is it looks at the pattern, it looks at the intel and sees the same thing only this time directed at us. that's very troubling from a diplomatic and political and national security standpoint, not just for political or intelligence. >> on the other hand, to the point, ambassador, you know, john harwood has made the point that the president-elect is going to have to oversee these agencies and the thousands of staff that work for them that he did not appoint. he's going to have to fight isis and all sorts of geopolitical conflicts. so what does that look like if he continues to doubt these agencies' findings? >> let me be clear, there is no national security without an effective intelligence service. and that presupposes a good relationship with the national leadership beginning with the commander in chief, the president. this has to be fixed and it has to be fixed quickly or our entire national security will be in danger. and our decisions will be placed
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in question. how can the president send american troops into combat based on intelligence, and it always is, if a president doesn't believe that these people really know what they're doing or that they may be politically bias. this is really very, very worrisome. >> yeah, on that point though the president-elect does seem to be making the point, again it's hard to know because we haven't heard him speak fully on this matter, that there is political bias in the intelligence community. i'm curious, has that been your experience in the past? is that a legitimate concern on his part? >> there is not a political bias in the sense of i'm a democrat, i'm a republican. what there is is often because there's never 100% surety even when you get with high confidence, which is a term of art that the intelligence community's now doing is now using on the russian hacks. and there is sometimes group think among these 17 agencies if one agency that is known to be
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good in an area like cyber intelligence takes a position, the rest often fall into line. but nonetheless there are tremendous checks and balances, particularly since 2003. i absolutely believe that the intelligence community is 100% sure that what they're saying is what they really think is the truth. and i'm 99.9% certain at this point that it is the truth. >> what happens a year or two down the road if trump continues to disparage the community, as he has, and then later wants to or has to sell the public on some foreign policy measures based on intelligence, what credibility will that have? >> that's my point. now, the good news is trump has surrounded himself with extraordinary national figures. i know four of them including dan coates who was just named to be the head of national intelligence. these are extraordinary leaders and they'll understand the problem. the second thing is we're not dealing with president trump, we're dealing with
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president-elect trump. and we're dealing with obviously a very sensitive issue to what degree the russians tried to tilt the election towards mr. trump. you're going to get a special reaction to that. he will have time to fix this in terms of the overall relationship with the intelligence community, but he's got to get beyond this. and at some point he's got to accommodate himself to the intelligence community's position or this problem will just fester. >> and just a final question, does the structure of management, does the office of the dni need to go away as some suggested this week? >> there are things that the dni does, such as coordinate intelligence on many subjects, serve as a balance to the 800-pound gorilla, which is the cia, and serve as the mothership for very, very effective institutions like the national counterterrorism center that we really need in one or another form. what form that takes that is a
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legitimate thing for a new president to decide. >> mr. ambassador, we appreciate your insight today. important day. we'll see what happens this afternoon. thanks so much. >> thank you. >> ambassador jim jeffrey. when we come back, the former chief economist at the president's counsel of economic advisors doug holtz-eken. and more theaters in the u.s., ceo of imax going to join "squawk alley" at 11:00 a.m. a lot more ahead. stay with us. nenestinppen ta tsanng al? nohaportrton aritr♪
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it's been a tough week for the retailers, but should investors use the selloff as a buying opportunity? find out on more "squawk on the street" coming up.
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the dow's down about 12 points here. s&p is flat. let's send it to rick santelli in chicago with "the santelli exchange." good morning, rick.
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>> good morning, thank you, sara. like to welcome my guest doug holtz-eakin. thanks for taking the time. >> thank you. >> in terms of job i found revisions more interesting as you said when we talked before we came on, it was all about wages, month over month up 0.4, year over year best since '09 up 2.9. why don't you go into those two issues for me, doug. >> this was a boring report except for the average hourly earnings, which if you look at the november to december change, that's up 4.7% in an annualized rate. we haven't seen anything like that in the recovery. and certainly that's been the missing component in the recovery. the vast majority of americans are at work. what they need is a raise. and this is the first glimmer that substantial wage increases might be on the horizon. >> but not everybody thinks it's a glimmer. there was a lot of commentary today that i was a part of as this number was coming out with the notion, oh, my god, we're
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going to run out of workers that have skills for the jobs. well, my observation, a, is you get a bit of a wage bump, which isn't totally horrible. but the other issue, doug, i can't swol low is the people not in the labor force jumped by 685 today, 685,000, the number now stands at 95 million, you're going to fell me almost 96 million people are idle, they can work but they're off the system and none of them are qualified for jobs and we're going to run out of people if we get growth? do you believe that? >> i don't believe that. i don't think we need to worry about that. but here's another way to think about it, rick, which is let's do the tax reform, let's do the regulation reforms, let's get this economy growing at say 3% or even faster, that would be fantastic. if we run out of workers, then i'll be wrong. but let's run the experiment try rather than saying we don't really want to try to grow more rapidly. i think that's a terrible way to frame the problem. the other thing we need to think
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about is over the past eight years we have fundamentally shifted the calculation of work versus not work. the affordable care act and other social safe nets give people access to resources without working. if you shift that -- those incentives, you're going to get the result we've got, which is a lot of people out of work. >> now, let's be fair here, doug. >> okay. >> secretary perez on his last hurrah on our channel today mentioned an issue related to this. he said -- and obviously in the context of all the ire with the affordable care act/obamacare being repealed, he said, yeah, and we've created a lot of jobs contrary to the notion that the affordable care act was going to hurt jobs. in the context of your comments and his, try to square that for me, will you? >> two things in that. first, the question is how many more jobs or higher wages you would have gotten without the affordable care act. that's the real question. and just saying we created jobs doesn't answer that. the second is, people forget that economies recover from
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recessions. and we were always going to get the jobs back. the question was how fast would they come back and at what wages would people be working. i think the real criticism is on the latter point which is we've had low productivity, we've had low wage growth, we have low top line growth as a result. we need to solve that problem. creating jobs is no longer the issue. it's about having those jobs reward the american people and give them the increases in the standard of living that we've historically been able to produce. >> you know, real quick, we're almost out of time. i've always said it's jobs, jobs, jobs. the president has said that as well. but i like your point because we've gotten jobs, but it mub the quality or whether full or part time because we're not getting growth in productivity. your final comment how quickly can productivity ramp up if new policies pass as the market has a feeling they may? quickly. >> you could get a quick bump by doing tax reform. getting a lot of capital invested, which has been missing in the recovery. and then over the long term there are skills issues,
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innovation issues and we can take care of those, but that will be slower. >> excellent. doug holtz-eakin, thank you for your thoughts today on today's jobs report. back to you. >> thank you very much, rick santelli. we get news out of the trump transition team. next trump transition team. next week's trump news conference will be at 11:00 a.m. eastern time on wednesday in midtown manhattan. we do expect it, guys, to cover potential conflicts of interest, perhaps russia intelligence, aca, tax policy, the wall and mexico. who knows where it could go, but 11:00 a.m. eastern time. >> an anticipated conference after the primary communication has been twitter. now let's send it out to jon fortt at ces in las vegas to find out what's next on "squawk alley." good morning, jon. >> well, good morning, sara. we'll have intel's ceo right here. intel talking a lot about virtual reality and more. the pc market's a big topic, and of course, he was in that
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meeting with the president-elect weeks ago. more than that to cover with him as well and a lot more from ces when "squawk alley" comes right back. du'y. buiewhrothte ys du'y.
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buiewhrothte ys ines
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donald trump putting border security back in the headlines
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this morning, tweeting, "the dishonest media does not report that any money spent on building the great wall will be paid back by mexico later." our kay rogers is at the border in el paso, texas. she's got a look at what will happen to jobs in the southwest under a trump administration. kate? >> reporter: hey there, david. that's right. well, u.s. customs and border protection reluctant to comment on what a donald trump administration might mean for the agency overall. but wall or no wall, they are actively recruiting to fill around 1,700 agent positions. the job, though, is challenging and dangerous. i spent the day at the border patrol academy in new mexico to experience the rigorous training process that all new hires go through. think you've got what it takes to become a border patrol agent? at the border patrol academy, trainees are showing they're up for the challenge, focusing on the complexity and dangers of the job. >> when they have to make split-second decisions to save their lives, to save someone
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else's life, or to save their partner's life, we want them to get it right. >> reporter: trainees learn law and how to process legal and undocumented border crossers. they practice arrest techniques and go through rigorous fitness training. they also learn spanish to be fluent by the time they graduate and train for driving off road to be ready for the southern border's harsh terrain. they also get combat training. >> trap it. trap it. extend the right hand to the neck. give it to him. harder, harder. now throw him. now throw him. >> reporter: and have to be ready to fight in the dark. >> good. good. good. now throw to your right. throw to your right. >> step back. >> excellent! >> reporter: water safety is also a must, including climbing jacob's ladder. >> you can do it! you're right there! >> reporter: dangling 25 feet in the air and being ready to take the plunge. if you make it through that 117-day training process, you'll be stationed at one of the agency's 20 sectors nationwide, most likely along the southwest
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border. new agent pay begins at around $50,000, which they receive while going through the academy. and guys, off-roading was a lot of fun, but i think i'll stick with my day job. back to you. >> i don't know. we continue to be impressed by you, kate. david just called you our action reporter. i don't think this is the first time -- >> reporter: i love that! >> i think she's got a job on the border patrol if she wants it. >> yeah, and will like it. >> reporter: thanks, guys. it was a lot of fun. >> tough lady. kate rogers, thank you very much. as we head to break here, let's take a quick look at stocks at this hour. it's been sort of a mixed trading picture. we've got positive action again on the dow and the s&p. the nasdaq continues to outperform. it's up about 0.4. much more ahead. stay with us. t&t&
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it's time for the "your business entrepreneurs of the week." 3d printing is changing how business is done. and the owners of hv 3d works in harmony, pennsylvania, are helping the car world get up to speed. they're revving up ways to apply this technology to the auto industry and leaving their competition in the dust. for more, watch "your business" sunday mornings at 7:30 on msnbc. >> brought you by american express open. visit for ideas to grow your business.
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we've got breaking news right now out of boeing. phil lebeau has that for us. phil? >> sara, we have annual delivery and order numbers from being. starting with orders, because there was speculation from traders that boeing would be light of expectations. came in with 668 orders. that is down from 2015 but much higher than what many traders were expecting. also on deliveries, 748 planes delivered last year by boeing,
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narrow-body 490, wide-body 258. guys, those are the delivery and order numbers for 2016 from boeing. >> and the stock reaction is flat. phil lebeau, thank you. much like the broader market right now, which is flat. continued outperformance from tech in the nasdaq. that's going to do it for us here on "squawk on the street." are have a great weekend. carl, to you for "squawk alley." good morning. 8:00 a.m. at intel's headquarters in santa clara, california, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ out here in the fields ♪ i fought for my meals ♪


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