spotify taking the axe to the work force for the first time this year. it is monday, december 4th, they tell me, 2023. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc.is morning. i'm becky quick along with joe kernen and andrew ross sorkin. the s&p is down by 14. if you are watching treasury yields, you see the ten-year yield is 4.24. the two-year yield is 4.6%. all of this probably based on

what we heard from chairman powell on friday. that has put pressure on lots of things. the treasury yields coming down significantly and inverse of that is happening in other asset classes. gold prices soaring past $2,100 to a new record high before pulling back slightly. you are still above $2,087 an ounce this morning. and bitcoin is surging to the highest level in 19 months. it blew through the $41,,000 level on hopes of the etf and also with the future of the rate cuts. some exciting moves in one direction or the other. we have other developments from the middle east this morning. i want to tell you about a u.s. destroyer along with three other commercial ships attacked in the red sea. the "uss kerney" attacked by the

houthi-backed forces. israeli forces to expand ground assault on hamas in gaza after negotiations and talks broke down. a lot more combat at play now. >> weird. you see stuff in the journal with the issues. they have some investments in defense contractors that are benefitting from what is happening. that doesn't go along with your statement. i could make the case that's truly a virtuous thing to help ukraine and israel. if you have to help them by making weapons, then that is a positive dei. >> most of the groups investing in dei --

>> they never worked it out. they have not thought it through at this point. a bit of merger news. alaska air agreeing to buy hawaiian airlines. it says $1.9 billion. i think if you talk about the equity, it might be debt involved. tiny deal. interesting that the two are -- the last two states to get in the union. >> not part of the lower 48. >> no. >> it helps to have an airline to get to your area. >> it closed at under $5 a share on friday. the deal now has to get the stamp of approval from regulators and justice department blocked jetblue and spirit airlines from merging earlier this year. we will have more on that from phil lebeau later in the show. the ceos of alaska air and hawaiian air will be on "squawk on the street" at 10:00 a.m.

>> the big part of the problem is you did not see the tourism from asia back to hawaii after the pandemic. that drove down prices. and roche getting into the obesity game. they are acquiring carmot for $2.7 billion. carmot has a promising drug in the class similar to novo nordisk and eli lily. after the phase one trial, the drug is ready to being tested on humans in the second and third trial segments. shares are up .2% in swiss trading. and spotify is now looking to cut around 1,500 jobs. and the college football

playoff picture. michigan, washington, texas and alabama will cop mpete for the championship. the big win over georgia in the s.e.c. championship game pushed florida state out of the final four. >> outrage over this. >> i watched all of it yesterday. it started at 9:00 until the selection at 12:00. i was sure. that these would be the teams. florida state's quarterback -- >> broke his leg. >> he's out. florida state totally got the shaft. one of the big five conferences. they are undefeated. they won their conference. alabama has a loss. texas has a loss. texas beat alabama. i agree with those four teams when it was all said and done. >> how do you explain that to florida state? the quarterback was so mad. >> the four best teams. >> the quarterback was saying i wish i broke my leg earlier to

see it is not just me. >> it's the whole team. >> they won the game after he broke his leg. >> they played louisville. it was a defensive win. 16-6 or 16 -10. you never know who will beat whom. if you ask most people if alabama played fsu, who would win? i don't know. alabama has the quarterback who has matured and gotten better. they beat georgia. georgia hadn't lost in a couple of years. they won two straight s.e.c. championships. i had alabama. saban. it is tough to bet against him. beyonce dominating the box office over the weekend. queen bey topped "hunger games ogames" which took in $21 million over the weekend. it is the second concert movie distributed by amc where taylor

swift's movie has taken in $250 billion worldwide. >> i still haven't seen any checks. i take credit for this. this would not happen. >> beyonce should send you a check? >> someone should. i didn't go to the premiere. amc. >> you got to go to the premiere of taylor swift. >> i did. we are getting you ready for the morning ahead and the trading day. check out investing themes to watch heading into the new year. plus, democrats are coming for billionaires. the supreme court could throw the entire system, tax system, that is, for a loom. we will have a debate you don't want to miss after this. "squawk box" is p coming right back. the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does.

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as 2023 comes to an end, investment themes are taking shape for the new year. joining us right now is elizabeth burton. eliz elizabeth, we h are looking at moves this morning with people expecting rates to come down. what do you tell people to do? >> our position is the rate cuts are unlikely to happen until the fourth quarter of next year. we think the fed has been on a good trajectory and will stay where they are. things always happen. i would not make markets moves on what's happening. >> do you think what we see in

gold and bitcoin is overdone as a result? we keep saying those things are on the more bve because we say cuts are coming sooner. >> i think we are range bound in the next 12 months. there is a case for further upside in equities mostly to have that happen at this point means we have to see margin expansion. i don't know we're in the position right now. >> what do you tell people to do? >> wait. >> wait for a dip? >> i focus on asset allocation as one of the big five themes for 2024. there are a couple of things that are important. one, allocators are under weight to commodities. if you think inflation is high and sticky for some time, that is helpful. there are tailwinds are the green energy transition fwith te

certain port art of the complex. the volatility is higher and that means it is hard to allocate the etf. it makes it easier to make the case with diversification. private markets are a good place to play when you're in the range-bound area with low equity risk. >> what private markets? >> we really likes real estate and credit. we like private credit. we like private equity as well. i know a lot of people are scared of real estate. there is unexciting things that happened in the last 24 months. that should reset the u.s. and europe for opportunities into next year. one thing that concerns me is the themes in real estate with self storage, everybody is talking about it. everybody is talking about one part of the market. european real estate can have

different characteristics. it is important to look not just in your home territory, particularly now with most institutions have overweight to the u.s. >> have prices come down in the office market so you think there are potential opportunities there? we had mario peebles on last week. >> don? >> don. >> don. >> european real estate he k conference and that means it is looking to fall. if you think something is good from theperspective, it is time to take a look. >> i have a different question. the base case you have and the rest of the market has is that interest rates are going to come down. the jamie dimon case is interest rates are not coming down. they may go higher. >> right. >> if that happens, to the

extent you want to hedge for that, how would you do that? >> for one, i don't think it is wrong to assume the upside risk remains in rates. if i managed a portfolio, i would be thinking what if it is higher and going higher? that is a major risk to u.s. pension portfolios. rates are high. they are not highest anyone at the table has seen. when i was working in mortgages in 2004, they he were higher th now. i grew up on a farm with 17% rates. this is not rocket science. look for floating rates and real assets and diversification. the same playbook the last three years probably won't work as you think it will. we are not going back to 2019. >> as it relates to private markets, how do you feel with the private equities and there will not be great deals out

there unless you think there are messy things out there? >> hard to say stay out of private equity. you need diversification. we will see consolidation in the private equity industry. >> meaning the firms, the gps? >> yeah. we will see larger deals. i don't think it is time to get out of private equity. maybe become more selective. especially since a lot of portfolios don't have a lot of liquidity. they can be selective. i remember when we had shocks in 2018 and people asked if people are trading. people don't stop trading because of a hiccup. you get to be selective in the type. >> what causes the consolidation? >> in the private equity markets? i think this is a hard time for small firms to raise capital. institutional investors are looking for the denominator effect. the back-to-work issue. if they are only in the office

two days a week, you better visit on those days they're in the office. >> you have a diverse background? >> i worked at a maryland pension fund as well. >> hawaii is better. >> i'm not going to make a comment which is better. both have interesting. >> i'm going out on a limb there. >> it led me to have a unique perspective on the $5 trillion of the pension assets in the u.s. move. it may not seem like a lot of money, but it can effect things. >> elizabeth burton. i can't help but think elizabeth taylor and richard burton. >> if she changed her name on one of the times she had been married to richard burton. she would have been elizabeth burton. >> elizabeth burton is my alias. elizabeth taylor is one of my

names when i was a kid. my middle name is not taylor. >> how many? thousands of millennials out there saying who? >> every analyst at goldman is googling elizabeth taylor. every time i go to the airport. they check my i.d. did you know elizabeth taylor was married to richard burton? never heard it. >> thanks for coming in. i remember that was a fiery marriage. things thrown back and forth. >> marriages. >> right. plural. >> she was cleopatra. coming up, the more you earn. results of the financial education in high schools and which states are getting an "a."

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welcome back to "squawk box." there has been a financial boom for high schools offering the course. a 70% increase in 20 p17. bravo. sharon epperson is joining us more on the top grade. this is important. >> this is important. >> this is a feel-good story. it is actually happening. we have been talking about financial literacy. >> it is happening. the new record card from the

center for financial literacy from the college this vermont gave an "a" grade to seven states. students required to graduate to take a stand alone course in personal finance. now by 2028, when new laws and policy changes are implemented, 28 states are expected to earn an "a." nearly four in ten will be enrolled in a stand lalone coure which is required before graduating. many districts may offer these classes, experts say the increase in states requiring students to take a financial literacy course to graduate is partly response to the pandemic which highlighted disparity with income and household finances. >> if you leave it up to local control, the districts most likely to unilaterally do this

locally, they're white and rich. you would either the folks that need it the most are the least likely to get its unless the state requires everyone gets it. >> studies show getting the education in high school makes a difference in financial behaviors of young adults from improving credit scores and low lowering dling kwen as i rates. the momentum for financial education in schools is strong and could soon see wisconsin being the 24th state to make an "a" grade. andrew. >> how much does the personal financial courses in high school right now have on young adults investing in their future? how much impact? >> they talk about the inn veflt vefve vesting much compound interest

ouchlt interest. there is not a significant increase of people taking the classes. that is not because these students are not thinking about retirement. >> will this work for a generation? >> we know it is working. the things young adults with credit and credit scores and managing credit in terms of making sure they are taking out the lower cost loans rather than the high cost private loans. federal loans. they are smarter about the decisions they have to make as young adults. >> bravo. i said this was a feel-good story. i feel there are failing states? >> five failing states. they have no financial literacy requirements. california is one of the states. many of the advocates are trying to work together to get it on the ballot to get something done. one state which has done so well

is tennessee. since 2013, it received an "a" grade because it had a requirement in the state for all high school students to take a personal finance course. one of the largest districts in it tennessee, is nashville. nashville is going to be the center of focus on many platforms for cnbc later this week. including a documentary of cities are success focusing on nashville. >> to the extent states are not doing this like california -- is there pushback? >> a lot of people don't want the state to make the decision. the local school districts should do it. the local advocates in california saying this state is huge. we need to educate the students are financial literacy and make this a state guarantee. >> thank you for bringing this great story. >> shoure. >> i appreciate it. when we come back, taxing states on the hill.

the supreme court could rule on the meaning of income which could mean big changes for the tax code. we will talk about what it means for the taxpayer. that debate is next. coming up at the top of the hour, jeremy siegel. he has a new worry for the new year. we have that at 7:00 a.m. eastern time. "squawk box" is comingig ck.rht (clo >> announcer: your money is sponsored by everbank. put your money into the high-yield savings account at everbank.com. but what if you. (tense music) stop! you work hard. it's time for a bank that'll work hard for you. everbank performance savings is built to put your money to work with some of the highest rates in the country. going, that's what got you where you want to be. we're the partners for your next move. everbank. advantage, you. ameritrade is now part of schwab.

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good morning. welcome back to "squawk box." live from the nasdaq market site in times square. we are in the red this morning. we had a good week and great month for november. we are down 65 points now. on the nasdaq. dow jones industrial average is off a little. real interesting action and it started in recent weeks in gold and bitcoin and a couple of asset classes that people think would do better if the fed were to go into an easing cycle or

stop tightening. you see that is an all-time high for gold. high efest it has ever been in guess, 4 billion years. >> yes. >> it's been valuable for 4,000. and what some people refer to digital gold. this is not an all-time high, but it is up $17,000 at one point when it came down to $65,000. >> you think of gold is useful in inflationary times. we get in real big trouble. >> they are spurring the next round of inflation. >> right. >> $34 trillion. that is what i was thinking. >> the federal debt. >> it is harder for the government to do everything it wants to do with the interest payments. the fed would like to --

everybody would like rates to come down a little bit. i don't know whether something breaks or whether we just see -- >> the debt spiral. >> the numbers with the unemployment rising or what it is. in the election year, we will not like it. we will have little appetite for it. >> it is weird. what elizabeth burton said is she doesn't expect the cuts until the end of next year. unless something goes wrong, i would agree with that. the jobs number coming down is not enough for them to cut rates. >> if it was negative. if we were at 5% unemployment, that would get it. >> gdp at 5.2%? >> that will be 2% this time at best. >> yeah. >> unemployment starts going up and people start losing jobs and

the election coming up. when we come back, google slowing down an a.i. rollout. we have that story next. plus, the biggest issues facing lawmakers on capitol hill this week. reminder, you can get the best of squawk pod on your favorite podcast app and listen any time. we'll be right back. honey, i think i heard something. ok. ♪ from christmas tree mats... to floorliners...

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welcome back to "squawk box." today's "executive edge." google the postponing the launch of a.i. gemini. the ceo is pushing back with the questions not posed in english. the launch is now set for some time next month. we will see how it compares to chatgpt version 4.0. and it's crunch time on capitol hill. we never say that, do we? time is running out for congress to tackle a host of issues on the agenda this year. for a look at the battle over the billionaires tax and israel.

let's bring in kevin brady who served as chair of the ways and means committee and former congress member donna edwards. she is now a cnbc political analyst. thank you for joining us. i was looking over and was trying to get through this, donna. it sounds like it makes sense. you point out anyone lucky enough to have income of $100 million a year should pay a minimum rate of 25%. the devil might be in the details. it would include realized and unrealized gains. it is just the wholenightmare. i think of so many reasons why it would be impossible. if you have $100 million in gains one year and the stock market goes down or the company's fortunes turn south the next year, you paid taxes on

something you never took a profit on. do you get it back? >> if you think about what ordinary taxpayers do and if you have one job and you have, you know, you get paid bonuses at the end of the year and you pay a lot in taxes that year and the next year you don't get the bonuses, you don't pay them. >> that's not the same thing, though, congresswoman. >> what i'm saying is i think that structurally it is the same. i think they can figure out how it is you calculate that and then, you know, the following year you don't realize those gains and you don't pay taxes on it. i think for americans who, you know, dutifully, the 99% of us pay our taxes which is probably at a rate of 24% for 25% and this is like a minimum tax. if you already do that and you makeov over $100 million, no pa,

no gain. you don't have to pay the taxes. for a lot of the billionaires, they are paying rates at 1% or not paying taxes at all. it is not fair. >> let's say you work for 20 or 30 or 40 years and really hit it big. you know, maybe some people pay 4%. people in high income, if you include state taxes pay 50%. let's say you work 20 or 30 years and pay 50% on all of the earned income you have and you finally have built up a certain amount of money, but paid taxes on building up that amount and it is a fortune. you worked hard and got lucky and made that much money. you paid taxes on it the first time. you essentially would be paying another 25% on top of what you already -- you would be double

taxed. that is not constitutional. how do you get beyond that, congresswoman? >> look, i think it is actually possible to calculate this so people are not double taxed. that would be unfair. the reality is, i think a couple of years ago where jeff bezos took the child tax credit. he said he had no income and no t taxes and he took the child tax credit. there is not a single american across the united states who agrees that would be fair. at the same time, the point is not to over tax people, but to tax them fairly. so, you know, at 20%, i think is the proposal over $100 million and 25% at over $200 million. we're talking about basically

9,630 americans. making them pay their fair share, i think, is an expectation for the american people. the accountant is figuring out how to do that is challenging. they could do it. >> they will do well. they might have 100 m$100 milli after all this is said and done. congress member brady, when someone says fair, i go like this. fair to one person is almost arm armed robbery to another person. it is thrown around a lot and a subjectivedonna, good to see yo. hope you are doing well. this is a premise which is flawed. it is likely unconstitutional and it is very damaging to the economy. here, the irs made it clear that the wealthy pay more, about

eight times higher than the average american would. the top 1% right now shoulder 42% of the entire federal government revenue coming in. i don't know what a fair share is, but clearly the wealthy are pacing a massive share of what our government needs in revenue each year. the so-called loopholes they hope to eliminate are some of the pro-growth of the tax code. rather than investing and saving, but reinvest in the economy to grow and expand to launch new businesses that usually lose a ton of money for a number of years. tesla, the years are 17. amazon was a dozen or more. these are often money losing propositions for a long time. it encourages them to invest in the communities and america. there is real damage to these

ideas. >> two quick questions. i like the idea of realized gains as a matter of course. how do you feel about real estate taxes? >> in what way, andrew? >> real estate taxes, in most communities in america, are not based on realized anything. right? you are basically taxed on the value of your real estate and every couple years the assessor says this is worth more than it used to be. you pay more. >> you pay a usage fee for the community to use the goods and cerservices in the community. >> i think property taxes are a challenge. texas doesn't have the income tax. we have a reasonable sales tax. that is an issue for a lot of americans. that is why we should do all we can to discourage local governments and state governments from brutally taxing

property. some states do, unfortunately. >> the reason i mention it is because property tax in some ways is akin to a wealth tax. that's the reason i raise the issue. >> it funds local government operations in a significant way. this is what communities depend on along with sales taxes for the most part. we never ought to give up to try to lower the property taxes on families. >> the last question i was going to ask which relates to the idea of the 1% or .1% versus the 1%. yes, the wealthy bear a huge portion of tax base in america, no question about that. when you get to the tippy top of the percentage basis, as you know, it is so much lower than

the average american that it's shocking. at least i would view it as shocking. >> i don't believe that's the case. i think the tax table is strongly. >> if you are a w-2er sitting around the table, you are paying the full freight. no question about that. the people at the tippy top paying most of the income in the context of capital gains and on top of that, 1031 on real estate transactions and s-corporations to take deductions and getting loans against their portfolios so they don't have to pay the taxes in a given year. that's where the issue becomes complicated and i'm putting that poi l politely. >> i would agree. >> the outcome is not a lower tax rate than people under on w-2. tax rates for wealthy are 26% or

more. >> not if you break that down of the top 100 taxpayers. it is nowhere near that. >> becky, you have to understand it. this is a smart group, as you know. when you earn $1, you can spend it, save it or invest it. that is risky. you can lose money. that is why we treat incentives for investors whether you are a working family buying a rental home or you are a corporation launching. these are pro-growth incentives. >> andrew has talked about the pass throughs which have been abused if you look at the set up. >> they are hiring half the workers in america. >> and pretending they are corporations. >> those incentives matter. >> congresswoman, we didn't get to talk about the other things

and obviously we want to keep the government open. i guess -- let me ask you one other loaded question we had last week. do you think there should be strings attached -- some democrats don't want to give israel money unless they dictate how they actually prosecute destroying hamas? are you in favor of that? should there be strings attached? >> i do have serious concerns about the way the war is being prosecuted. not israel's right to prosecute a war given the horrific things that happened on october 7th. this amount of death and destruction of the civilian population, i think, is unacceptable. i think it is, you know, we heard president biden last week suggest that it is a reasonable conversation to have about

conditioning aid to israel. look, we can condition aid all the time as we're giving out weapon systems and defense support and there is no reason it shouldn't be under consideration. i do think there is not a majority support for that in the congress just like i don't think there is a majority of support on the house side for ukraine funding. i'm not really seeing how these things play out in real time. i think it has the ability, frankly, to sabotage the aid packages if they don't get it figured out. there's nothing wrong with putting some conditions on israel in terms of the way it prosecutes the war and targets non-civilian populations. >> right. i'm not really sure -- okay. targeting non-civilian

populations. congress member brady. >> the answer is absolutely not. there shouldn't be conditions. this is a war whose goal is to eliminate the existence of israel. not just the first strikes, but as hamas made it clear this is what they he will continue to d. for america adding conditions sitting safely thousands of miles away from that battle is short sighted. we should fund them in a significant way. >> very good. thank you. congresswoman edwards and chairman brady. >> good to see you. coming up, tiktok avoiding a ban in montana, but the social media platform remaining under fire for the anti-semitic y veent. whha we not heard about advertisers fleeing tiktok? we'll talk about it after this. >> announcer: executive edge is sponsored by at&t business.

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welcome back to "squawk box." montana's statewide ban on tiktok slated to take effect on january 1st. the ban would have been the first in the nation as states and the federal government grapple with surveillance and privacy concerns on the platform. of course owned by china-based parent company bytedance. we want to bring in "new york times" business reporter. good morning to you. >> good morning. >> where is this all going? we always say this is a chinese-owned company and yet a majority of the company technically is owned by american investors or not really? >> that's kind of what the company says, but a lot of -- i think what people are looking at is where the company was founded and where its engineers are. >> economically there's a lot of american investors, general click's involved. >> that's very fair to say. >> so where do you think this

case impose atgoes at this poin? >> the montana attorney general says he's going to stick with this case. they want to see where it plays out. this ban was supposed to go into effect january 1st, and now it's not. and a lot of had wwhat the judgd really is great in tiktok's favor. he said this steps on first amendment rights of users. it's stepping into foreign affairs in a place where a state shouldn't have power, and all of that, you know, makes it seem very unlikely that tiktok is going to get banned in the state or even federally. >> explain this, there has been obviously a lot of pushback against x, elon musk's formerly twitter, advertisers leaving that platform around anti-s anti-semitism and the like. he's apologized for it, but there's a lot of debate about what's happening on that platform. you have not heard about advertisers necessarily stepping away at tiktok.

what's happening behind the scenes? >> we haven't seen the same advertiser exodus. part of it is what you saw in x's case, more from elon. what you're seeing happening at tiktok, you've seen shou chew, the ceo of tiktok taking meetings with jewish groups and creators. the executives are meeting with jewish celebrities and creators as well to hear their concerns, to make them feel listened to and to say, you know, we're doing everything we can. this platform's operating kind of out of our control. >> hold on. tiktok is saying the platform is operating out of their control. >> i don't want to misspeak. they're saying that the platform is a mirror of the users. >> basically if elon was quieter about it he might not get as much flak either? he's doing the same thing. >> potentially. you don't have disney or these big advertisers saying we're

boycotting tiktok. >> does shou chew -- maybe i need to follow him. does he have a big following himself, meaning the ceo of tiktok? >> he developed a big following after the march congressional hearings, including -- >> does he go on and make provocative comments about anything or no? >> no. he is really keind of the opposite of that. he went to hbs, he's sing singaporean. he's quite unflappable. >> this case was seen as a barometer potentially for other states and also for more federal rules. do you think that there's no chance as a result? i assume if you're tiktok, this is a great decision for you and you think this company is not getting regulated? >> i think this mechanism is pretty unlikely to work based whoon we saw. >> is there some other mechanism that people are talking about? >> there kind of is. so there's one -- there's a bill

that a few folks introduced earlier this year where you could potentially regulate through the president, say a chinese-owned social media company. then we still have this linger decision from biden and the biden administration and cfius, the group we all know about. and they have yet to bless tiktok's operating plan in the u.s. it's not a sure fire thing for tiktok. i think this sort of cudgel of your ban january 1st, that is going to be hard to stand up. >> sapna, thanks for coming in. you've owned the tiktok beat, we appreciate it. coming up, professor jeremy siegel has one worry in particular for the market. he's going to tell us what that is. "squawk box" is coming right back. i think i'm ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college.

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good morning, stocks pointing to a lower open on wall street. the major averages are riding five-week winning streaks. for the dow, that is its longest since 2021. bitcoin surge, the king of the cryptocurrencies reaching levels not seen in over a year. and merger in the skies, alaska airlines buying hawaiian airlines, we will get the latest from our own phil lebeau as the second hour of "squawk box" begins right now. ♪

good morning, and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square. we've got a lot going on for a monday morning. dow looking like it would open down about 63 points. nasdaq off about 85 points. the s&p 500 off about 18 points. treasuries right now, see where they're moving. right now the ten-year at 4.253. and then oil, wti crude, it will cost you by the barrel about 73.76. bitcoin, take a look at this, jumping above $45,000 for the f first time since may of last year. and talk about digital goals, real gold if you will hitting a record high earlier today above $2,100. and right now it's trading at 2,088. all of this on the back of an idea that the fed is basically going to lower eventually. >> that's the expectation. we're going to start this hour

with a merger in the airline industry. phil lebeau joins us with the latest. phil. >> becky, this is a deal between alaska airlines and hawaiian with alaskan buying hawaiian in a deal that many people would sit there and say, wait a second, isn't the biden administration against mergers? especially with airlines. they believe this will go through. here's how the deal is structured, $1.9 billion is how much it's worth with alaska taking on about 900 million of hawaiian debt. both brands continue flying. it's not like hawaiian will go away. it will continue flying under a corporate umbrella with alaska. approval maybe 12 to 18 months. $235 million in potential synergy savings is what alaska sees and they believe that this deal will be accretive to earnings within two years. why does this make sense for alaska? buying hawaiian would give them greater asia-pacific exposure. this is an airline that is already doing very well in its domestic routes primarily on the

western half of the united states. they want to continue expanding internationally. hawaiian allows them to do that. from the other aspect, from haw hawaiian's aspect, it was struggling to grow with more routes to the continental united states. you put these two together, this will triple the number of nonstop and one stop routes to the continental united states, canada, north america basically is what you're looking at. that's what would happen if the two airlines were to, in fact, merge. they're going to be paying $18 a share. that's the plan from alaska, once this deal goes through. where is hawaiian at right now. yesterday when they announced this deal, i think it was at 4.86. the arbitrage has already begun there for investors. lots to discuss with the man who put this together, the two men who put this together. ben minicucci along with peter ingram, the ben the ceo of alaska, peter the ceo of hawaiian airlines. for a long time people have sat there and said these two should

get together. it makes perfect sense. that's really where the bulk of the traffic from the continental united states to hawaii comes from. it's the western half of the ye united states. the eastern half of the yunited states, you can't really call it an untapped market. instead of going to hawaii because it's so far, they go down to the caribbean. >> i was over -- and you got to go, when you go from maui -- the islands are close, but there is some little island hopping and i think hawaiian -- >> there's a lot of inner island traffic. >> alaska, people -- i mean, it's a great airline. i've flown on it. i don't know why, i've never been to alaska, they're in a much more -- and the size is amazing. i mean, hawaiian airlines -- or hawaiian holdings was a quarter of a billion dollars. i think alaska air's at least 20 times larger, probably even more

than that, but together could be formidable, i guess. >> very mor formidable, if you look at it from hawaii's perspective, growth is going to be tough. southwest has added a lot more flights from california into the hawaiian islands. there's greater competition there. alaska was always strong competition there. and if you're hawaiian, where are you going to grow in the continental north america that you aren't already where you're not already. you could incrementally add more cities, but it's hard once you get beyond the hawaiian islands to the u.s., it's hard to say to people, hey, do you want to fly haw hawaiian? i don't know, i'm making something up here, los angeles to phoenix or somewhere else, once people got over here, then they were with one of the domestic carriers that were over here, primarily. this allows them into the alaska network and from alaska's perspective, you can use the hawaiian islands potentially to grow to asia-pacific routes that

they would like to add those in the future. they're doing a lot more international travel. that's the plan from alaska to grow internationally over time. >> phil, thank you. >> you bet. we promised jeremy siegel, let's get to him now and talk about the markets. the major averages riding five weeks of wins. joinings now is jeremy siegel, u penn wharton of business profession. your point, jeremy, is that the money supply hasn't grown for two years, and the one risk to -- what you think is a pretty good year in 2024, you think 15 to 20%'s possible as long as the fed cuts sooner rather than later, which i think at least implies to me that you think they've gone too far already? >> i'm worried they have. i mean, the money supply was, you know, had hit bottom in april, began to increase again, but later in the fall began

decreasing, a continued qt may force it to continue to decrease, and you can't really have a growing economy when the m 2 money supply is decreasing. this is the longest period of time of stagnant money supply since world war ii. yeah, that does give me concern. i can see a real booming year 2024, if the fed, you know, resumes that growth of money supply. we need 5% growth of money supply to hit decent real growth and the 2% inflation target. 0% growth of money supply means unemployment, recession, and deflation truthfully. >> we just can't make you happy on the money supply. there is a time where it was growing, so hey, phil, what's going on? >> well, the money supply -- at the pandemic, march 2020 we had the biggest explosion of the money supply that we'd ever

seen, you know, in 150 year history, and that's why i predicted we're going to just have a lot of inflation, but then two years later, powell stopped it and it stopped the inflation. >> you're never happy. >> but you cannot decrease it. >> yeah. >> we had too much money supply, now we don't have enough. we got to get it just right. >> right. >> it's already almost 2024. you're talking about first quarter. what month in the first quarter do you want the fed to actually cut? we just had a 5% print, 5% plus on gdp. that just doesn't -- people that aren't watching it that closely can't imagine that we already need to cut, you know, and what's unemployment? >> you know, as you said, joe, that's july, august, september. that's really history 5.2%, and as you said yourself, i mean, the atlanta -- the atlanta fed just lowered this quarter to

1.2%. that would be the lowest quarter of this year, and that's if we have a decent christmas, we'll see whether the sales hold up so we've already decreased by 75% the growth rate from that third quarter, and, you know, we'll -- we got a lot of important data this week. certainly the employment report on friday probably will show growth because we've got workers coming back from the uaw strike, but if that unemployment rate goes above 4%, we trigger rules that have said that unemployment rising half a percent from its low mean that the likelihood of reces recession increases dramatically. we're not totally out of the woods on that score yet. >> well, i just wonder what -- what do you -- there's what you want to happen, what you think is going to happen. you think the fed is going to have -- we saw it happen on the way into this in terms of

staying out of raising rates for too long. do you think they're going to stay too long? do you think they're going to be stubborn? >> that's the worry, i mean, you know, they were way too late raising. are they going to be -- you know, i hope at this meeting that chairman powell finally acknowledged we're talking about it. not that we're doing it, but we're talking about -- which you remember in the november meeting, we're not even talking about lower -- they should be talking about it, not that they're doing it, but that should be part of the conversation given the softness of the data that we've honestly seen over the last four weeks. again, i'm not saying, you know, recession is inevitable on the horizon. i'm saying they've got to be two sided. they've got to talk about it. they can't be anywhere near as stubborn as they will have to be on lowering rates i think in

2024. >> if they cut, will we have a soft landing? will they actually be able to land that point perfectly, three point landing? >> it's the biggest chance for that soft landing, which they desire in my opinion, if they cut rates, it's totally different than the 1970s where, you know, as i had mentioned money supply went up every single month during that decade. we don't have that situation. they don't have to worry about sparking another inflationary cycle. that's gone. they really do need to start thinking about getting money supply up to a reasonable level that sustains growth in 2024. >> let's say they don't cut, they don't cut until third quarter, fourth quarter. you figure that means a recession, and that means that the market does what? stays flat? >> nothing. i mean, outside -- very honestly, i think outside the

magnificent seven the market is almost priced for a mild recession. i mean, we take a look at small and mid cap stocks selling 11, 12, 13 times earnings. that's mild recession. levels are ready so i don't -- you know, yaeah, there will probably be a decline in the market, but it's not going to be a big decline if they make a fatal mistake. so on the downside, i think you would probably have 5, 6, 7%. on the upside, as they say, i think 15 or 20, they start lowering it. 2024 could really be an excellent year. >> you think -- you think the -- could beat the 49ers if they meet again? >> i was at that game. painful, joe. i mean, oh, you know, your luck runs out eventually. we had three unbelievable games, you know, that i never thought we were going to win and i said how long can this last.

and. >> that was a beatdown, though. >> not forever. >> when you're -- but you remember who else beat the eagles? can you explain that to me? >> yeah, the jets. yeah, that is a game we were winning it the whole time until the very end, and this is a game we were winning for one quarter and then totally fell apart. >> really, it was unbelievable. >> yeah, it's going to be -- i mean, dallas next week, let's face it, it's a game that's going to make or break the eagles, i think, you know, going into standings. they'll make the playoffs certainly, but whether they're going to have standing or not depends on next week, yeah. >> and your quarterback seems okay, that think god. that was -- >> yeah, i was worried -- >> you're not going all the way without him. that's for sure. >> that would give us no chance if he's out. so that's a silver lining from yesterday, last night. >> i agree. okay, thanks, professor.

>> thank you, joe. >> okay, when we come back, the very latest from the cop 28 climate summit in dubai. diana olick is live on the ground, and she's going to join us next. what do you have coming up for us? >> today is finance day, but we've already seen billions of new government dollars sent for the fight against climate change, and that could mean big opportunity for corporate icera. we'll talk to the president of microsoft coming up next on "squawk box." changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments? ice offers data and markets that can provide critical insight. manage your climate risk with ice. if your business needs a new application then developers will have to write code. a lot of code.

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welcome back to "squawk box." the united nations climate summit cop 28 continues in dubai with finance in focus today. governments indicating the u.s. made sizable commitments oaf the weekend. the private sector is ramping up with corporate leaders making the trip to make deals. our senior climate correspondent joins us now from dubai with more. >> good morning, andrew, and part of that news over the weekend, we saw the biden administration pledging $3 billion to a climate adaptation fund for under developed countries, but it is the private sector that will drive the trillions of dollars necessary to slow global warming and make no mistake, there is profit to be made. i spoke with microsoft president brad smith to get his take. >> those of us in the private sector, say in the corporate community, i think this is where we're harnessing our power of procurement, of investment, but we're going to need to do a lot

more, and at some point, i do think that this will have to become maybe even the single most important issue we all grapple with. >> what are the opportunities for companies as large as microsoft but as small as startups you're investing in? >> we have a billion dollars climate innovation fund. we've already invested 700 mlml million dollars. that is an opportunity to stimulate. second, we can use the demand signal we create when we say we're going to procure some of these services. we're not only going to invest in creating green concrete, we're going to use green concrete when we're building our data centers. >> what is the opportunity for microsoft in ai when it comes to climate? >> we really see the ai opportunity as multifaceted. a lot of what it's going to take to reduce carbon emissions is to understand complex systems, and ai is very good at that. it will help us, i think, drive

new breakthroughs in new technologies, but a big thing that i'm doing today, for example, is really coming together with u.n. secretary general. they have an early warning system for all, basically we're able to use data from satellites, harness the power of ai and better predict or respond to natural disaster, including many climate-related disasters. >> smith said hea's also focuse on new regulatory requirements in the pipeline for companies to measure and report their climate risk. microsoft is creating technology for them to do just that. andrew. >> diana olick. here's just a question, and i'm curious if it just comes up at all. a lot of these companies that have these big pledges, but a lot of the pledges, you know, almost go negative meaning they have to actually -- they have to actually pull carbon effectively out of the air to ever get to their mark.

is there anything on the horizon that gives them hope that they're going to be able to do that. >> well, if you're talking about carbon credits, you know, microsoft is heavy into investing in technologies that will pull carbon out of the air or other types of technologies to reduce carbon from the atmosphere, but specifically the carbon credit markets really need to be addressed so that it's overall internationally standard. that's one of the biggest issues here we're probably going to see a lot coming up on that in the next couple of days. it's big talk about and what these big companies can do when they invest in money when they pull carbon out of the atmosphere and how that makes them then net zero. >> isn't that eventually, trees and carbon credits are one thing. that's just shuffling the paper around. ultimately, it's going to have to come from technology i would imagine. are there technologies and other things being advanced. >> yeah, absolutely. >> where you are where they're describing them or explaining the status of where that is?

>> carbon capture is one of the biggest. that's direct air capture. you've seen the biden administration put a lot of money into dac hubs. there's pulling carbon out of the air and putting it into the ground. it's turning it into liquid carbon that can be used in other things like putting bubbles in soda. they're advancing new technologies in all these different ways of pulling carbon out of the air. but again, there's just so much opportunity here when you invest in these new companies that are doing that. and that's why microsoft is so heavy into the startups that we also have been looking at in our clean start series. every cday there's a new technology that's going to try to advance that. you have to see how much those can scale to get to a point where it's really making a difference. >> we appreciate it. we look forward to all your reporting from dubai this week. thanks. coming up, top stocks on the move in the premarket. dom chu will join us next, and later this hour, we are hearing a lot about how consumers may be reaching their limits when it comes to spending.

we'll speak with former walmart u.s. ceo bill simon and get his take. stayunyore ted, u' watching "squawk box," and this is cnbc. h to connect your data wherever it is, you need cdw and netapp. cdw experts will work with you to understand your needs, then customize a netapp cloud services solution to integrate data management for all your clouds, helping you reduce spend, improve security, control data 24/7 and automatically detect anomalies. in the cloud, at least. netapp makes efficient cloud management possible. cdw makes it powerful.

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oh, my god, i didn't even think about this. l l gloating at this morning's premarket. >> okay. you were right. you were right all along. >> let me just say this because i know that folks in the control room are not going to be happy if i dwell too long on this. but i will just say that i'm a die hard fan and the niners have always been very near and dear to my heart, but last night was a statement win. now you have statement wins against the eagles. >> i'm surprised you're here. >> you have statement wins against the cowboys. i don't know. i would say this, i'm biased. i will just say it right now. i'm a niners fan and last night i was very happy because -- >> not to pop your balloon, but the jets beat the eagles too. so big deal. >> so zach wilson and brock purdy are the only two quarterbacks to beat the eagles

this year. >> one of these is not like the other. >> i would say this. i hope that the trajectory for the niners keeps up in that front, but anyway, all right. so i'll start off with the morning movers here with a check on what we've talked about all morning long at this point, which is the surge and the new trading ranges. bitcoin prices up 5.5%. 3.5% for ethereum. 41,000 plus, almost 42,000 for bitcoin. the two largest cryptocurrencies making those notable moves higher, better risk appetite. optimism over lower interest rates. the possibility of exchange products backed by crypto in the u.s. kind of gaining steam. you've got stocks linked to crypto like coinbase and robinhood, which are each up about 7% for coinbase, 3.5% for robinhood, microstrategies up 7.5%. that company is the biggest publicly traded owner. they're catching that bid as

derivative plays. elsewhere on the stock side, lulu lululemon, which is down roughly 1.5 to 2%. just around 6,000 shares of volume. the move being driven in part by analysts at wells fargo. they've downgraded shares from an equal weight to an overweight. now they cited amongst other things, the solid run year-to-date as you've seen up 43%. given their previous upgrade thesis about overseas market growth, other factors, they're all playing out. we're going to end on shares of uner technologies, jabil and builders first source, each of those will be added to the large cap s&p 500 effective december 18th. uber of course the ride hailing giant, transportation logistics company, jabil, a contractor of tech products and builder first source is a products suppliers. they will replace sealed air, alaska airlines and solar

technologies, which are moving to the mid cap index. interesting moves there. i will just say again, i love the fact that the niners are doing so well, and i hope that you will come and join the niners fan club. >> and kc, who knows who they are. you never know who dallas is either. >> yes, and the kansas city thing is interesting. it's playing out like the buffalo bills did, right. we thought they were very, very strong going into the season. now they're kind of trying to find their way to the playoffs. it's very wide open right now. i love it. >> miami. >> it's going to be fun the next few weeks. >> miami's the 1 seed in the afc. >> that's not very profound for me to say that. all right, dom, thanks. coming up, wall street spending a lot of energy trying to figure out when the fed will start to cut interest rates. the fed chair jay powell saying not so fast. after a break, we'll talk the central bank's next set of decisions with former fed vice chair roger ferguson.

i bet you he sounds different than jeremy siegel. and as a reminder, as we head to break, you can get the best of "squawk box" in our daily podcast. it's hard to pick the best really for our people. >> it's difficult. >> follow squawk pod on your favori pca ateodstpp and listen anytime. we'll be right back. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative

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the fed's next interest rate meeting happens next week. on friday just before the fed went into its regular pre-meeting quiet period, fed chair jay powell said that the central bank's efforts are working to slow inflation. he also said officials are being cautious and that the full effects of rate increases have probably not been felt yet. joining us right now is former fed vice chairman and cnbc contributor, roger ferguson. roger, we have spent a lot of time trying to decode the fed's words, and i have to say, i think you're probably better than just about anybody at doing that. so why don't you tell us what jay powell is saying right now because we have some people who are thinking the fed's going to cut rates by march of next year. we've got other people who think it's not going to happen until the end of next year. where do you come down?

>> i come down in between. i want to be clear about what i think chair powell is saying. i think one he's saying something that everyone is observing, the economy is softening as they had hoped. inflation is coming down. the 12-month was 3.5, but the six-month core pc was much lower than that, so that's probably good news. i think what he's worried about is, you know, he's lost control of the narrative just a little bit with the expectation of a quick cut, and i think they want to avoid the old stop and start concern, which means they may hang on just a little longer than markets expect. now, they will have the other challenge for them, i think, is that financial conditions, which had been tightening supporting their narrative are now starting to ease, and so i think they're caught in a little bit of a dilemma. they see things coming out the right way. they see inflation dropping. that should give them some room

to ease, but i think they don't -- premature because they also know there's a risk of the economy restarting with the loosening financial conditions. it's a complicated story, becky. >> a complicated story. we've had people who say, look, this could have a really big impact. we could eventually fall off a cliff, that the fed is going to be overly cautious because they were slow to start on this antiinflation campaign, and as a result, they think they're going to be slow to take their foot off the brake because they don't want inflation resurging. is that your understanding that the fed is going to air on the side of caution? >> i think that's probably -- the two risks, that's probably where most of the risks lay right now for exactly that reason. you may recall, becky, i've been somewhat worried all along throughout this around the possibility of a bumpy kind of landing, maybe short recession back in the air again for exactly that reason. i think having started late, worrying about the history, seeing that there's some

surprisingly good forward momentum in the economy has been the big surprise of 2023. they don't want to be fooled again, and i think all of that means perhaps, you know, overstaying their welcome with their foot on the brake as you describe, and risking maybe a bumpier landing than many of us would hope for. >> as the former vice chairman, you understand very well the pressures that play out and what the considerations are in the room. we've had a lot of people talk about the political aspects as we head into an election year. obviously the fed's supposed to be apolitical and not bow to that pressure. we have some people saying, look, they are going to be pressured to cut rates if the economy starts to slow in an election year, or they are going to be pressured to not cut rates to look like they are helping the current administration. how does that play out? i know the standard operating line is we're an apolitical organization and we don't look at that, but there has to be something that kind of takes place at least in the minds of

people as they're making these decision. they're human. >> lots of things take place in people's minds. as you say, people are only human. i think they really are, particularly on this, you're going to -- as close as they can to the party line, and i think -- >> which party? >> to the fed neutral, straight down the middle line, thank you for allowing know clarify. i think the economy is going to be throwing curve balls, that whatever they do they're going to look like they're favoring one over the other. i think the reality is it is trying to go through this complex situation. they're going to have to be prepared for calls from one side of the other. whatever they do in the election year it's going to look like it's favoring one party over another. the reality is the underlying circumstances is what's creating the uncertainty and the tension as we just talked about. >> let me ask you this, what would it take for the fed to consider cutting rates in the near-term? is it that we are facing some sort of issue that breaks the markets in some way, shape, or

form? is it enough to say that the unemployment rate starts rising? would that make people say, hey, maybe we need to take -- not just take our foot off the gas, but actually drop rates a little bit to take some of that pressure off? what would it actually take for the fed to cut rates in the first half of the year? >> i think there are two or three things that would lean in that direction. one, i think you're probably going to talk about, which is a lot of talk about the consumer and consumer softening. if there's real evidence of that occurring, that i think would be very important to them because after all, two-thirds of our economy is very much driven by the consumers. there's certainly some concern about stress in the banking sector. we know mark-to-market losses, concerns about commercial real estate. look at financial stability concerns that might lead them to cut maybe more quickly than they currently expect. that might be a second place, you know, i would look. so those are two -- those are two areas.

obviously the possibility of some international occurrence, but that seems less likely. so i think the issues are more domestic. they're about consumers. they're about real estate and banking and perhaps the manufacturing sector has been soft for some period of time. if that starts to leak across to other sectors that might be a problem as well. >> the reason i ask that is because there's a lot of almost enthusiasm in the markets when you look at equity prices, when you look at a lot of other places. hey, the fed's going to cut rates and that's going to be great news. my understanding from how i read this, if the fed cuts rates in the first half of the year, it's going to be because the economy's in big trouble, maybe it's not something that's worth cheering. >> i agree with you completely. i'm not sure i would use the word in big trouble, but if they are cutting rates in the first half of the year it is because they are more concerned about a slowing than they are about a restart. and i think to your point that does not necessarily support the happy days are here again, you

know, everything rally that we're currently seeing in the market. look at what's happened at the ten-year, look at what's happening with small and mid cap equities, gold for people who watch that. you're talking about cryptocurrencies. almost every place you look, asset prices are rising very rapidly. and you know, that's a sign that the market expects, you know, a very easy move to a soft landing. i think the market may be overdoing their expectations just a little bit, and i think the caution is what's called for, and i think that's where the fed's head is. but as we said, that caution might, in fact, be overdone and could lead to the outcome that they're trying to avoid. so very, very choppy waters ahead, even though it seems very placid to many people right now. >> roger ferguson, roger, thanks. when we come back, does tech have more room to run before we close the books on 2023? we're going to talk about some of the biggest names and whether they belong in your portfolio. and a repiminder as we head to break, you can always watch or

listen to us using the cnbc app. you can do it literally right now. look at that beautiful shot of new york city's skyline right about now. you're watching "squawk box," and we are live omheasq fr t nda market site in times square.

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welcome back to "squawk box," tech led all sectors last month gaining just shy of 13% despite november's outperformance. our next guest still sees investor opportunity in a wide variety of stocks. joining us is dan flax, senior research analyst at new berger burrman. what do you do, the magnificent seven, how long are they magnificent for? what's the strategy at this point? >> good morning, andrew. i continue to like select names across the technology space. these companies are all facing cyclical headwinds. what we're seeing is they're able to innovate, adapt, change and grow, and i think as the market increasingly looks ahead to '24 and even '25, you're going to see better growth. so for example, amazon, the retail business is seeing consumer pressure, but they're reinventing it, more one-day delivery. amazon web services remains well-positioned for the next generation of workloads in areas like artificial intelligence.

microsoft too is innovating and capitalizing on ai, and so if you step back, sure, interest rates are still at higher levels than they were a few years ago. the economy is slowing, but these companies are adapting, and i think you're going to see better and better growth. >> do you care about what happens with the fed? and the reason i ask is because one of the reasons they've actually gone on a little bit of a tear here is a function of this new conventional wisdom that the fed is somehow going to lower interest rates next year, by the way, even though jamie dimon, i think, thinks they may still raise. >> i'm more focused on the innovation and the growth because if we look across a cycle and if we look back in history, and i think if we looked forward, it's going to be about situations or companies that can create and expand into new markets. you look at google as one example. they are reinventing search with generative ai. apple, as much as they face

pressure in the consumer and trying to -- you see a continued broadening of their growth driver, services remains healthy. so were interest rates to be a little bit higher or a little bit lower, i would still focus more on the innovation and growth. i think that will matter most to these companies' prospects and ultimately their share prices. >> of the tech companies out there, are there ones you just don't want to touch right now? >> there are a lot of names that we're looking at that are transitioning. and so, for example, if i look at a company like an hp or an ibm, good management teams, businesses where they're making a lot of investments, we're watching to see how names like that continue to pivot towards faster growth areas. there are other companies that we like, for example, qualcomm, a leader in mobile and low power solutions where we think they'll have better growth over the next year given what's going on there. so we're looking across a wide variety of names, but we're

trying to remain selective. >> of all of the companies, if you can only own one, actually, i'm going to make it more complicated, dan. you can only own one and you have to own it for five years, you cannot sell it for five years from today. >> it's alphabet, andrew. we like boogoogle. i think the search business is durable. i think it's continuing to reinvent itself. you have accelerating growth in youtube, and i think that business will double over the coming years. >> you're not worried about ai taking the search business, somebody else emerging? >> i always worry about competition. the competition is fierce, but what we're seeing with google is that they're infusing more generative ai capabilities. the search experience is changing, and it's creating value for advertisers on one side and users on the other, and i think that will create a larger market. and of that market, i think google will have an attractive share, which will drive strong

free cash flow growth, and that is why i like it. >> okay. we're going to leave it there, dan, nice to see you. appreciate it. >> thank you. >> thanks. coming up, former walmart u.s. ceo bill simons going to join us. we'll ask him about the potential signs that will tell us if and when consumers are reaching their litonims spending. stay tuned, you're watching "squawk box" on cnbc.

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we've talked this hour about how inflation is cooling down, but what about the consumer spending engine that powers most of the u.s. economy? joining us right now with his perspective is will simon, former walmart u.s. ceo, and bill, where does the consumer stand right now? >> yeah, i think the consumer's spend as resilient as they possibly could be. they tend to figure things out. they've been battling with really, really aggressive food inflation over a two-year bases. housing costs, rents, are really putting pressure on them, but they're figuring it out. they're shopping deals by all indications black friday was pretty good. now it's quieted down after that. but they're figuring it out. >> is this a situation where consumers are going to make it through the holiday shopping season but then really kind of gasp and sputter when it comes to spending in the early part of next year? >> yeah. by all indications i think that's what's going to happen. you know, christmas is going to

come. they're going to take care of their families. they're going to do it really judiciously, i think. it's going to be a game of chicken with the holidays. it comes up waiting for the deals to come at the last minute and i think that last weekend before christmas will be really good and the christmas season will be generally good, acceptable. then i think, you know, january, february is going to slow way down. there's no reason to spend money in january and february. and i think the consumer is going to take a wait and see attitude, maybe lick their wounds a little bit and watch and wait. >> i think of all of the commentary i have seen recently, what i've heard from walmart may be most concerning, just the idea that their consumer is feeling the pinch, too. because you would think that walmart actually is typically beneficiary when we head into tighter times for consumers. you have consumers who trade down, who make sure they are trying to get the best -- to stretch their dollar as far as they can go at walmart. what have you heard? and what you take out of it?

>> yeah. i think that's a concern. the real key piece is that, you know, the cost of living, the actual cost of living primarily food and housing are really taking a big bite out of the consumer. and that's a larger percentage of income for the middle and down segment of the economy rather than the middle and up. and that's walmart's customer base. and so the more they spend on food and rent, the less they have for discretionary things. i think to a certain extent that plays into walmart's strength because of the size of the their food business, but doesn't bode well for the real general merchants out there. >> so what could change things? again, we're trying to figure out if the consumer spend when it comes to things like travel dies out. we know they haven't been buying big ticket items for a while because they bought so much pandemic, maybe pulled forward a

lot of sales. what do you think the next iteration of post-covid consumer looks like? >> the trend has still been experience over items. your point is bang on. everybody bought everything they could and shipped it to their homes during covid. so, you know, they have eight pairs of shoes they haven't opened yet, kind of waiting for them to -- the other ones to wear out and that will take some time to cycle through that. that's freed up a little bit of discretionary income for things like dining out and travel. i would expect that to continue. the real key is what the fed does. i think we're past peak. it's still too high, but starting to moderate. if the fed starts to ease interest rates, i think then the consumer will respond back again. >> if they don't, and let's talk about this because the pinch on the consumer really hits over

time when you start talking about the higher interest rates they're paying on their credit cards. all of those things add up and that can see the consumer slow over time. in your experience, bill, how does a heightened interest rate cycle really impact on the store's level? >> yeah. i mean, it really just sucks away discretionary income. the amount of credit, credit card debt particularly that, you know, the consumer has, particularly the middle and lower ends of the consumer is really staggering. and 2 or $300 a month in interest on a credit card is a difference between buying something and not buying something. and so as interest rates remain high, it's very difficult for there to be any discretionary income that starts to move some of these categories that have slowed over the last year. >> so we spoke with roger ferguson.

he doesn't think that the fed will lower rates till the latter half of next year unless there's something really wrong, like the economy takes a bigger hit than anticipated or something breaks in the financial system. if that's the case f they don't lower rates until the second half, how do you see this playing out? >> yeah. i'm probably a little earlier than that. spring to summer for me. i think innation is the problem that has to be dealt with. and i feel like the fed is doing what they need to do. you know, we recovered from recessions pretty freakedly. y we know how to get out of recessions. we don't see this kind of inflation, 20 plus percent food inflation on a two-year stack. last time in the '70s. it's difficult to get through. it's prudent they focus on that. i think we're through most of it. we've still got to let some of the wage inflation cycle through and i think that's kind of what

we're waiting for. i would think that maybe by the spring or early summer we could move into that, which is why i think the first half of the year might be slow from the consumer's perspective. >> bill, where are you? because i'm left guessing from your backdrop. looks like driver's license photo. >> i'm -- the glorious life of a guy who travels. i'm at an embassy suites hotel. >> i understand completely. thank you for calling in even on the road. it's great to see you. thank you. >> you bet. talk soon. coming up in the next hour, another on the ground view of inflation and also worker wages. we speak with a restauranteur, cameron mitchell, about what he's seeing in his industry. plus, much more on the markets with allianz adviser mohammed. and spotify ceo. the stock moving on the news.

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good morning. stock futures in the red this morning, but a sea of green for crypto currencies. then mohammed el-erian. plus, wrangling over funding for an aid package to israel. republican senator, the latest from capitol hill. all that as the final hour of "squawk box" begins right now. ♪ ♪ good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin.

u.s. equity futures a little weak after what we saw in november. we bounced off those october lows from a year ago in october. and ran all the way up until all of a sudden in august kind of backed off. now we made back all the weakness we saw in the late summer and right the middle maybe of a nice santa claus rally. most of the averages are close to the highs for the year. treasury yields had a lot to do with that as the 10-year dropped quickly. risen above 5%. now down to 4.25. 4.257. and then gold and bitcoin, other perceived stores of value have done exceptionally well for the whole year but more recently i know you can see bitcoin just under 42,000. caught up on some of the stories that investors are likely to be talking about today.

alaska air agreeing to buy rival hawaiian airlines for $18 a share, or about $1 billion. is that represents a big hawaii airlines. gabe of 183%. ceos of alaska and hawaii will be on "squawk on the street" at 10:15 a.m. eastern time. spotify cutting more jobs. the music streamer said it will lay off around 1500 employees, 17% of its work force. by the way, this is the third round of cuts this year as the company tries to bring down costs. that stock this morning up by about 3%. and then richard branson is done funding virgin galactic. his business empire no longer has the deepest pockets following the pandemic. he also added that the company should have what he called sufficient funds to do its job on its own. that stock has been seen better days, though. the market capitalization now

below a billion dollars and that stock down another 13% today. that's a drop of just 31 cents. we are less than 90 minutes on the opening bell on wall street. mike santoli has a few charts to watch. here we go, mike. >> becky, the furious rally in the s&p 500 taken us right almost exactly to the late july highs. what happened after the july highs, we had a correction over the course of three months due to a lot of factors. not just because the market gotten ahead of itself. we have traveled as far, about 12% gain from here at the late october lows. as we did over two months. so about five weeks we did what we did in two months to the same level back then. earnings estimates are higher, valuations are a bit lower. what's going on now as we digest a little more rotation into the laggards, the russell 2000 futures are up today and some pressure on the megacaps. that was the case really into last friday for about six or seven trading sessions just going sideways and rotating

within. so we'll see even though we're due to probably have some kind of pause or pullback here, it's coming from a decent position with yields being pretty tame. take a look at the more aggressive parts of the s&p 500, the high beta sector, sphb is the etf. you see it's catching up to the quality factor etf, stable, very profitable companies, the kinds that have led all year. you see here at the short-term peaks in early february again in late july, you did see the high beta, more aggressive stocks really outpace and race ahead. you got overheated in the overall market. now we're just kind of catching up. so i would say we're not quite as overbought and overloved in terms of the market and investor positioning as we were in late july. now, a lot of excitement or at least chatter about youuber. i want to look back to when tesla was put into the s&p 500, december 21st of 2020. you see it's underperformed since then.

now obviously it's kind of swung wildly. i think this was the most overhyped anticipation of a company going into the s&p ever witnessed for no good reason. once you're in the s&p, it's no guarantee of anything. and i would also point out airbnb and blackstone went in september and underperformed since then. it's a good kind of matter of status and bragging rights and stable shareholder base for the company, but it doesn't mean it's going to perform necessarily very well going ahead. becky. >> mike, thank you. if there's one thing you think we should watch this week, one thing you're watching, what would it be? >> word of the day, mike. word of the day. >> got to be jobs on friday. suspense building into that. >> that's good. we can sell that all week. thanks, mike. we'll see you later. >> it's december 4th and we haven't had the jobs number yet. >> yes. we were talking about why hawaiian stock hasn't traded nearly as high as the premium.

barrons is supposing it could be because the justice department eagerness to tackle what it perceives as a lack of competition in the airline industries. >> it's got to be. no other way to explain it. >> billion dollars. >> they're going after amazon for buying roomba for lack of competition. >> right. and that vacuum cleaner won't work in my house. >> steak knives. >> attach them to it. kick off the week, let's talk about market technicals joining us is jp morgan head of technical strategy jason hunter. and, you look around and i wouldn't say you're particularly in love with what's happening right now, are you jason? >> that's right, yeah. >> it has to do with -- what i can't understand is you do think maybe we'll orchestrate a soft landing, but in doing so, we'll start perceiving the recession risk as much higher than we do right now? and that will hurt stock prices? >> yeah, that's correct, yes.

yes. yeah. when you look at the timing since curve inversion and go back into the 1960s and take yield curves that go back that far, as we move into next year, as that window continues to progress, you tend to find your way into a bear market that's eventually associated with the recession, way more often than not. you know, the odds are stacked in favor of a hard landing actually. our house view is that we actually land in soft landing. but when you look at how markets are priced right now, they're very much priced for a soft landing between here and there, we have the unfortunate experience that we're going to have to go to stall speed, that's what enables the fed to start easing in the second half of the year. and just that trajectory, the market will have a significant gut check of whether that will inertia will carry to a recession or not w pretty amazing because the market is so smart that you're forecasting maybe a slow down on recession fears but you're not forecasting recession? >> that's right. the uncertainty of whether that inertia carries as well. the premium is not in the market. >> good for global bonds.

>> that's exactly right. yes, the easy curve is yields lower, curve steeper. >> what's the fed going to do in that environment? i mean, you're technically on the fed. >> that's right, yeah. >> what would -- i mean, with that prediction, what do you think you would see end up -- give you that outcome, what would the fed be doing. >> the jp morgan view, the house team and the u.s. economics team, as we get into the back half of the year, even with a soft landing outcome, the inflation expectations and the softness in the data that takes you there allows the fed to start easing at an every meeting pace back half of the year. that's again with a soft landing outcome, not even a hard landing outcome. >> you don't check with jamie dimon, do you? >> we talk within the research. >> i'm not sure he would agree with that entirely. so, there were a lot of really esoteric things in your note, too about dm bonds. is that developing market? >> develop market bonds.

so the u.s., europe, yes. >> and those are expected more than stocks in your view? >> yeah. so stocks should pull back -- >> how much? >> i think the s&p will drop to 3,500, which is a retest -- >> wait a second. hold on a second. i guess we buried the lead. just say that again slowly. >> so a retest of the lows for 35 -- >> 35, 4500. >> yes, 20% down from current levels. >> oh my god. and so that starts -- finish with the santa claus rally. does this last longer? >> maybe a little longer, but it's starting to decelerate to the point where our algorithm is showing you should start to hedge at this point already. >> i'll say. running for the hills. 4,600. it begins. it's starting already, in

earnest start of next year. >> second quarter and into the third quarter, the markets given -- start to price that first quarter. >> right away. >> yeah. in january. >> so my base case view is 3,500 by mid year and yield curve steepening as we expect, the market makes its bottom and starts to price in the next -- >> next year, toward the end? >> mid year, yeah. >> down somewhere around 3,500. >> where it makes its low. >> 3,500 where no one is expecting that. that would play into the secular trading range. >> that's right. 3,500 to 4,800 range, that's right. >> yeah. when do we finally go to new highs? that's too far out for you probably. >> if the curve is going to steepen and the fed is going to be allowed to start easing the second half of the yeear, we think 2025 could be a positive year where you move into new highs. >> a positive year. i think you mentioned in

cyclicals you've seep them roll over. >> they've been under pressure since 2022 never really rebounded. it's a thin leadership. you look at cyclicals not only in u.s. equities, emerging markets those linked to chinese growth, been under enormous pressure this year and failed to lift. that really adds conviction to our view that this is a late cycle environment, only thin leadership that's what you tend to see in a late cycle environment. and until the cyclicals start to form, which we don't think will unfold until let's call the second quarter of 2024, that's when you start to get excited. >> so if i believed you, and if p i was wealthy, and if i was allowed to trade, i would sell -- if i believed you, i would sell all my equities right now. and what would you tell me to do? >> right now cash is paying about 5%. it gives you the option to -- >> don't go out -- but you like duration.

>> if you go long -- >> okay. so i put some in a 2-year. >> 2 to 5-year on the curve, yeah. >> 2 to 5 year, 100% into 2 to 5 year, governments. >> governments, yes. that gives you the optionalty picking up yields, wait for the equity market to pull back to attractive levels and rolled from your fixed income. >> all into bitcoin if i prefer. >> that's not a market i cover. i cover a lot of markets. crypto is not one of them. >> 2 to 5 year, 100% of my cash. >> yes, that's where i would be right now. >> got it. >> we will -- i won't forget. you might be right and then i'm going to think you're like god. >> if you're wrong, he'll never let you live it down. >> i'll laugh at you. >> i'm prepared for that outcome. >> thanks. >> thank you very much. >> okay. thank you again. when we come back, allianz adviser el-erian is going to

join us. next, funding for israel, ukraine and the u.s. border. we'll speak with senator roger marshall from kansas about all three. a live shot of the capitol this morning. you're watching "squawk box" on cnbc. that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy.

♪ let's turn to the latest developments out of the middle east. u.s. destroyer along with three other commercial ships were attacked by drones and missiles in the red sea. the uss carney shot down several drones while assisting the other ships. iran-backed houthi forces in yemen claimed responsibility for those attacks. in the meantime, in gaza, israeli forces announce that they will be expanding their ground assault against hamas. bombing resumed on friday after the cease-fire and talks broke down. meantime, pressure on the senate this week while they await the final text of a bill to fund israel, ukraine and the border. joining us with where republicans stand kansas

republican senator roger mar shell. good morning to you. where do things stand? >> well, andrew, they don't stand anywhere right now. we're no closer today on an agreement on the supplemental package than we were on october 7 th. look, this is a very complicated four-piece riddle. the biggest priority is the border. the border, the border, the border, that's what's important to us. everyday we're losing 300 americans. over 10 million people crossed the border illegally in the past three years. 1.7 million got aways. the rest of this riddle is not going to be solved until we have meaningful border security. if that riddle is not solved, then the republicans are going to vote down any type of cloture for the other three pieces of this riddle for, ukraine, taiwan and israel. it's the border. >> and just to put it all together, i appreciate the importance of the border. there's no question that figuring out the immigration piece of the puzzle is important, but the question is in the -- and not that it's not

an acute problem, boy is it an acute problem. but, given the acuity, if you will, if that's a word, of the problem in israel right now, i ukraine, potentially in taiwan in the future, is there no reason to try to separate these things? >> there's every reason to separate them. it is almost scientifically impossible to get people to agree on all four of these, even within the democrat caucus on the senate side you're not going to get unanimous agreement on how to solve any one of those right now. start doing something more for israel and lose somebody that maybe was going to support the ukraine package and vice versa. it's virtually impossible. and that's why we offered on the senate floor just a couple weeks ago stand alone funding for israel that, remember, every democrat voted against it. they went to the mall and chuck schumer said he wouldn't rest until there was funding for israel. three hours later we give him the opportunity and he votes it down. again, we're going to lose 300 americans today that are going

to die because of fentanyl poisoning. the border is a national security issue. it's not an immigration issue. it's a national security issue. it's the border. >> senator, what do you make of the house trying to tie the irs funding to all this? >> look, i don't care how we pay for it. i would like to pay for it. my priority is to support israel, that this is a war for the sake of humanity. that we need to stop all type of terrorists, stop the brutality, that they're coming after us next. that's not an issue on how we pay for it. i would gladly welcome my democrat friends to come to the floor today and say, here is another way to pay for it if you like. i would even consider stand alone legislation to support israel without a pay for. i think it's that big of a priority. again, to me it's all about priorities. the border, the border, the border. and then let's get our american hostages home safely and then let's support israel. >> so, given sort of where things stand, how do you imagine

this plays out? i mean, you just described a situation that is untenable in so many ways for the country. it's also untenable given the various factions and the various parties. nothing happen? >> you know, very well. look, that's a great question. i wish the press would ask joe biden, why don't you want border security? ask chuck schumer, why don't you support border security. those are questions people should be asking. if they will support meaningful border security, i think we could fix these other problems one at a time. they're not willing to take that on. >> talk about the specifics of a border security package -- >> fix the problem. >> senator, walk through the border package as you see it because it's not -- part of the issue is the specifics of how these things get, you know, put together. the actual package, what it actually entails because i think it's not just saying border security. i think there's a lot of people on all sides who would like

border security. it's then when you dig into the details that it gets more complicated. >> right. and you are right. even democrat colleagues across the aisle come to me saying, hey, look, we need to secure the border. border security starts with a policy change. i've been to the border three times. the last time every border patrol person said we need to change the policy. if we change the asylum policy alone, decrease 50%, maybe 75% 10 million crossing the border illegally. changing asylum rules alone would help and do something about the parole situation. president biden paroled over 1.5 million folks so far as well. so we need to fix parole. then look, we need some type of better physical security as well. more border patrol, more drug dogs, all those type of things. however to secure the border, do exactly what the dhs plan laid out several years ago.

look, probably 15, $20 billion secure the border. why would we send 60, $70 billion more to ukraine when we haven't secured our own border yet. it's about priorities. it's the border. >> senator, we have a presidential election, unbelievable how quickly it's coming. i don't know what your current relationship is with the presumptive nominee at this point. i know he endorsed some other individuals when you trying to become senator and have you endorsed anyone yet for 2022 on the republican side? >> you know, i have. look, at that point in time ut appears as donald trump versus joe biden. i'm going to say this. i have 10 million reasons why americans should vote for president trump. and that's the 10 million illegal border crossings, the 1.7 got aways as another reason, not to mention, gosh, i guess we're at 60,000, 70,000 aliens of interest as well, hundreds of known terrorists crossed our border illegally. i think that donald trump will

be the president of law and order, of security, of getting -- making our families safe again and turning the economy around as well. you know, i think this inflation and interest rates are killing people back home. this bidenomics has not worked out. i think donald trump is the person that will secure our borders and also give us a strong economy again. >> becky had about 100 adopted -- kansas is one of my adopted -- >> not on my list. i know you used to go on your way to colorado. >> lawrence. you went to medical school in lawrence. did you like the wheel or the hawk or what was your -- you didn't -- i guess you had no time to go. >> well, look, in medical school, sir, we didn't have time to go drinking. you have been known to have a coors light at the wheel, but my favorite bar is in manhattan, kansas, called kites. i was a bartender in college and absolutely the time of my life. >> k. state, yeah. so you're still a k. state fan then? you're not a total jayhawk fan? >> look, i bleed purple but i

have degrees from both alma maters. i root for both of them. ku has the most successful long-term basketball program in the entire nation. who can't root for the ku jayhawks when it comes to basketball? >> football teams are pretty good. both football teams are good. >> i got my own team i like. >> it's a great time to be a kan kansasen. we claim the chiefs as well. we had a loss last night, but great time to be a kansasan. >> thank you, senator. we appreciate it. >> senator, doctor. coming up, who has the upper hand right now when it comes to controlling the conversation about wages, workers or management? we'll speak with restauranteur cameron mitchell about the current state of the labor market. reminder, get the best of "squawk box" in our daily podcast. follow "squawkod p" and listen any time. we'll be right back ro . new iphone?

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walmart saying no to x, the retail giant is the latest company to stop advertising on the social media platform. walmart says it's not a boycott but an issue of how the ads on x have performed. walmart has not advertised on x since october any way.

apple and disney stopped advertising in november after elon musk appeared to support an anti-semitic post. he reposted whether he meant what it said or not. musk told those advertisers exactly what they could do in a very colorful fashion in andrew's deal book summit last wednesday. and once again, andrew, i was thinking that it's shocking to hear it on tv obviously in such a public. but then i think about a normal conversation, even my kid, normal conversation, that word is just way too common, is it not? i think we should all like only say it half as many times as we feel like saying it, like in private conversation. you don't say it that much in general. >> yeah, no. >> i say it quite a bit. >> get yourself a swear jar. >> there's no reason to. it's jarring and if i hear songs that say it, i change the channel for some reason.

>> you don't like other people saying it. right, right. >> good point. good point, joe kernen. >> curse jar. we'll get one right here. when we come back -- >> change it to something else. >> i don't like frick either. it doesn't sound good. mucking things up. can't say that. >> you just told me let's f'ing go, the producer. when we come back, economic data to watch in the week ahead. leading to this friday's big bsjo report. el-erian will join us next. this is "squawk box" on cnbc.

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♪ welcome back to "squawk box" right here on cnbc. take a look at the futures right now. we're off about 73 points on the dow. nasdaq looking to open down 70 -- 85 points i should say. s&p 500 off by 19 points. but take a look at this. let's put this on so you can see it. gold topping $2,100, this after coming back down.

2,081 bucks. bitcoin, surging to nearly $42,000, all this on the back of, i don't know if it's the new wisdom, new conventional wisdom that j. powell is ultimately going to be lowering rates in 2024. we'll see whether that's right or wrong however. >> for more on the state of the market, let's bring in mohamed el-erian, chief economic adviser at allianz. i'm just happy you finally got friendlier towards bitcoin, finally mohammed, right? and you in the mid 20s said it would catch a bid at that point, i think. >> yeah. what a bid? i mean -- >> right. mohamed, we just heard the atlanta fed is at 1% or something. so that 5.2% print, that's like ancient history, i guess already. or shall we view it that way? >> no.

i wouldn't call it ancient history. it's real. it has benefitted our economy but associated with a run down of savings. that's why when you extrapolate forward most people expect the economy to weaken from the 5%, which it will. but the question is how weak? there is a market romance right now with the softish of soft landing. i think that's probably too much of a romance. but it is one that led to the biggest monthly loosening of financial conditions on record. think about that. the biggest monthly loosening of financial conditions at a time when the fed is telling us that it's premature to talk about lower interest rates. >> yeah. but a fact that's what we're seeing. do you think the fed got too tight, mohammed? >> yeah. you've heard me say over and over again that i thought they should have stopped before the

last hike. i wouldn't go as far as the market to price in a 50% probability of a march cut and five cuts next year, unless, unless, you believe we're going into recession. if you believe we're going into recession then equities shouldn't be where they are. i think what you'll see is the fed will be very careful. also remember the best inflation move is behind us after this month. so we have one more month of good inflation data and then it gets tougher. my hope, as you know, joe, is that the fed targets 3% inflation, not 2% inflation and that would allow us to soft land the economy. >> you think 3% will become the new normal for inflation in the united states? >> look, i think if you look at the economic outlook, it is an outlook where supply is a problem, not demand. demand was the last decade. we had insufficient demand.

now we have insufficiently flexible supply. and lots of reasons people come on air and talk to you about the energy transition, they talk to you about geopolitics determining supply chains. they talk to you about companies being much more concerned with resilience and also talk to you about the labor market, not being as flexible as we would like it to be. so if you put that all together, we're looking at the supply chain being a con strabt. in such a word, i worry 2% inflation target means not only sacrifices in growth that we should make but also sacrifices in quality we shouldn't make. >> yeah. do you -- at this point, mohammed, think that we are still going to have -- what did you say, a soft, soft landing? >> softest of all soft landings. >> that's not -- softest means we're -- you might as well call it a recession? or is it really --

>> no, no, no. so in that -- so imagine you're in a plane and the plane lands without the wheels hitting the runway. we're going to land in complicated plane without even feeling that the wheels hit the runway. that's what's priced in right now if you look across markets. >> that's what's priced in. but it would be unbelievable to have that. do we miss it? which way do we miss it? >> i think it's a little bit bumpier. i think the risk for growth is on the downside and the risk for inflation is on the upside. it is very difficult to get back to 2% as quickly as the market this is we're going to get back to 2%. >> okay. seen people say we're going to see a dollar rally resume in 2024. do you see that? >> yeah, i'm in that camp simply because the rest of the world is

facing even greater head winds than we are. so it wouldn't surprise me if by the end of the year the european central bank has cut rates more than the fed. even though they started later, it would not surprise me if they end up cutting more than we do in the united states. >> so but in summary, no more hikes but you think cuts in the second half of next year? not as many as we're predicting? as are being predicted. >> that's absolutely right. >> that's the way you're seeing. okay. we'll end it there. i was distracted because i was thinking about you -- you know what we always talk about. i didn't know they had that last cut. if there's no chance to make the playoffs, would you say aaron rodgers should come back this year or should he just -- just sit it out? >> should sit it out and come back next year strong. joe, i mean, every week i get destroyed by my jets.

but i must say, yesterday between the 49ers, the day before alabama and the patriots being 2-10, i could at least sleep. >> that was going to be my next question, whether what happened -- again, yesterday. they didn't even score a point. >> yeah. they lost 6-0, fifth-straight loss. >> that might be better for you than you don't even care what's happening with the jets because they probably weren't going to win the super bowl any way. watching that happen to the patriots, this is the greatest thing that's ever happened to you. >> except we lost to them, joe. i think we're going to lose to them again. that's the problem. if only we could beat them, then, yeah that would be great. seeing the patriots below the jets is something i have to check two, three times a day. >> that's just weird. gino is killing it. sam darnold came in. all the old jets quarterbacks are -- who was that last guy yesterday? who was that guy?

>> his name -- trevor siemian, did you see that? >> yeah. and -- we had them all. and zach could only play if the other two got injured. think about that. >> right. crazy. all right. i'm trying to use loving in a sentence the way i use -- i'm going to try to do that instead of the f word and it doesn't work. >> sure it does. >> all right. all right. mohamed. >> i love you. okay, mohamed. >> love ya. when we come back, the front lines. cameron mitchell, founder of cameron mitchell restaurants on the impact of food and labor costs on the bottom line. and if consumers are pulling

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♪ welcome back, everybody. we check in with our next guest from time to time to get an on the ground view of consumer spending, inflation, wages and

the labor force. joining us right now is cameron mitchell, the founder and ceo of cameron mitchell restaurants. and cameron, for anybody who hasn't been following along, i think you have 62 restaurants in 14 states, plus washington, d.c. many of those restaurants are pretty high-end, expensive, luxury restaurants. the word we have been getting from people recently, at least in new york city and maybe l.a., too, is that consumers are spending more at restaurants, willing to spend more on alcohol than they had been in the past. what are you seeing? >> well, i think for us in particular we're seeing a little bit of movement from our fine dining restaurants down to our more polished, casual brands. we're down about 5% year to date to sales. now, we're we're up in our more casual brands. so, it's going to finish the year up about 1% in sales.

but, we're seeing some shift. and people are just spending a little bit less and not going out for that fine dining experience as often as we would have hoped. >> does that break down regionally? i know you have restaurants in places like ohio, florida, lots of other states, too. but is it different region by region? >> there is some fluidity to that, but fine dining in particular, you know, monday and friday lunches are still very soft because people aren't in the office, et cetera. we're also seeing a pullback in -- like this december, large party business, which is a lot of our bread and butter in december holiday months is down about 15%. so it's challenging out there. we had a challenging year. labor costs are still up. certainly the increased interest expense that's happened throughout the year with the rate hikes.

so, kind of got it from all angles. there are some silver linings, though. i'll tell you, becky, our guest counts are above 2019 pre-pandemic level. our cost of goods is now stabilized and dropped and now at a pre-pandemic level. our labor staffing levels are pre-pandemic levels, which has helped with execution, labor rates stabilization and lower overtime. and then we finally have gotten rid of all the fuel surcharges we experienced this year. so, there are some silver linings i think on the horizon. i'm still cautiously optimistic going into 2024. >> one issues with inflation we have been trying to figure out where things stand. that has the food aspect to it, but also has energy and wages. where do you stand in terms of what you are paying or what your expenses are based on inflation,

pre and post pandemic? >> wages, for instance, we normally increase our prices 2% in the spring and 2% in the fall, 4% per year, somewhere in that ballpark. we took more during the years of the pandemic. this year we passed on our spring price increase and only took about 1.5 points thisfall. so, we feel like we've kind of reached the top end of what our consumer will bear. with that said, labor rates have gone down. they're still up higher than we can raise prices and still our biggest impact to our p & l. but they are starting to stabilize. inflation itself in the food issues, or cost of goods, we're seeing not only just in cost of goods but everything that comes in the back door is starting to reduce a little bit. we're starting to see our prices easing on that side of the fence. >> cameron, one of the reasons i like talking to you is because you cover so many different

states, so many different regions and because we can really get a sense of what small to medium-sized business owners are dealing with. and one of those issues is the availability of capital so you can do things like open new restaurants. how does that stand? and what are the costs when you do try to build out a new restaurant? >> well, that's been one of the things that's impacted us this year, becky. we opened four restaurants this year. and we're on average -- those restaurants were about six months delayed in opening, which cost us lost revenue, lost profit, not to mention those restaurants were over budget, so we spent additional dollars to open those. so we still got supply chain issues on that side with development. we have full plate of development next year. we have five restaurants opening next year. and we hope our situation will be a little better and the costs will come down, we can get them open in a more timely fashion. so -- but when we opened up our

las vegas restaurant this year, by way of example, opened up almost six months late. however, we had about 5,400 applicants for 180 positions there. so that was really nice for us. we were able to hire just a first-rate staff there, which in years past has been very challenging. so, you know, again, optimistic for our development next year and hopefully a little smoother this year. as far as credit goes and the banks, we're fortunate we have a great relationship with our bank. we have been with them for many, many years and worked through the pandemic with them and so forth. so, we still got access to credit. it's just much more expensive. where i know some of my smaller restaurant friends -- i run a group of seven restauranteurs here in town and they're finding it pretty challenging to get access to credit on the smaller business side. so, i know it's out there. and it's a challenge i think for a lot of our fellow independent restauranteurs out in the country. >> but that's the difference between somebody who has more

than 60 restaurants and somebody who has five or ten restaurants. you've got a track record. >> i think so, yes. especially with the single operator. one or two independent operators. >> on the optimistic side, on the good news, it still makes sense for you to continue to open restaurants, and some of these restaurants we have been planning for over two years, too. so -- and we're still taking advantage of some opportunities that have fallen upon us from the pandemic. so, you know, it's a combination of those two, but, you know, we're still like i said, positive, and we are able to -- i think we'll be a little better than last year. profitability was down about 10% this year, and i think it will come back, especially what i'm saying now, especially with the cost of goods coming back in line. that was a good problem for us last year. so that's helping, and it's now coming back to normal.

so i'm optimistic about '24. even the election will stabilize and hopefully the interest rates will stabilize and if not, come down next year. >> cameron, thank you. good talking to you. >> okay. always good to see you. thank you. coming up, we'll take an inside look at where retail investors are putting their money. take a look at where we are. 100 points down from the nasdaq. 121. maybe if you own bitcoin, you're happy today. come right back. [ "i'll be seeing you" by the five satins ] the mercedes-benz holiday love celebration is here. come in now for the exceptional offers you're bound to love,

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welcome back to "squawk box." verizon is partnering with a streaming service. verizon customers will be able to subscribe to netflix and max with ads for $10 a month. there were rumors of this. verizon already offers a disney bundle which includes disney plus, hulu, and espn plus. in the meantime, i want to take a last look at the markets this morning. our next guests watching as we close out the year. joining us, it's charles schwab's director of trading and

education, and, you know, the last couple of weeks of the year always super, super active, and then you add in what we're seeing in crypto right now, and i'm curious what kind of numbers you're seeing. >> yeah, good morning. so i think this story of the imx, the investor movement index is really one of selling to strength and rotating into different sectors, and that's what we saw in november. we saw our clients moving out of the megacaps and take advantage of some of maybe that movement underneath the surface that you're seeing overall in the markets. we saw selling and communication services. we saw selling in i.t., and a lot of buying in health care, energy, and then consumer staples. so that rotation that's kind of underlying the surface right now, same thing we're seeing right here in schwab. >> what do you see about the crypto piece of this? how do you sort of make sense of

that? is that, do you think, totally dependent on what the fed is doing or at least partly on what the fed will do next year? >> i look at crypto as a trade, and it's a momentum trade and what we tend to see is we don't see a lot of buyers of crypto at the bottom. it's mostly at the top. when you start pushing into next levels, that's where the retail interest starts to pick up a bit. could it be a story in terms of what the fed's doing? it's hard to tell. when you look at the backdrop of what we're seeing in the market as a whole -- i mean, think about this. we saw a 50-basis point drop in the last month alone. there's a lot of -- a lot of buying and a lot of excitement in maybe some of these names that had underperformed and it's kind of what you are seeing. some of the interest rate sensitive names, you know, the biggest name in terms of the buying from our clients believe it or not was realty income, letter o, and so, you know, some of those stocks and, you know,

crypto to a certain extent, some of those interest rate-sensitive names have taken off in the last month, and a lot of that just has to do with the changing macro environment. it looks like based upon what the cme fed watch tool is telling us, that they're pulling forward rate cuts into pot potentially march and june with an 85% chance. that's what you are seeing. >> do you see a lot of trading individual names? is it more etfs? what's going on in the options market? where is the activity market right now in. >> the imx really measures more of the individual stock names, and that's -- that's what we're looking at here, but yeah. there's interest everywhere. i would say right now option buying is picking up to a level we really started to see, you know, last summer, and once again, the interest in trading activity might be a little counterintuitive. i think sometimes we think people are trying to pick bottoms. i think a lot of times what we know is interest picks up when the markets are moving in a favorable direction, and we're

starting to see a little bit of that right now. a couple of things that i have been looking at is, you know, the bullish/bearish indicators. they're starting to widen out a little bit and we're seeing more pickup in the cboe call ratio which signals you're starting to see the individual investors start to play a little bit more in some of that upside call-buying that we've seen recently, and that tends to maybe signal that there might be a little bit of exhaustion up here, and when i look at that and kind of see what, you know, what our retail clients did in november, maybe selling into some of that strength, i think they're being rather prudent in doing so. >> what about the options piece of it? >> yeah. well, like i said, the options, you know, what we're seeing now is we're starting to see more of that upside call buying. >> right. >> i think that's indicative of reaching for a little bit at this point. >> a little bit of reaching. joe, we want to thank you this morning on a day we got red on the screen, but i don't know. what are you laughing about? >> i'm cracking myself up

because i'm thinking of the justin bieber song. we were talking about swapping out the "f" word with love. bec ♪ because if you like the way you look that much, well, baby you should go and love yourself ♪ it keeps going. >> go love yourself. ♪ and if you think that i'm still holding on ♪ >> we have a minute left. >> i think it's amazing that you know that song. >> i forgot about it. i crack myself up. go love yourself. >> okay. >> i may have said that to someone on twitter before with the other thing. i think i might have. the final check. also, i have used love as the replacement for that. triple digits now. those are some of the worst levels we've seen, down 125 points on the dow. nasdaq, down 120. not to say anyone was listening to our technical analyst from jpmorgan, but i haven't heard

anyone say 3,500 on the s&p. >> that's true. >> in a long time. here's the ten-year which has been a friendly number for equity markets. 425 now at this point. oil and then gold, and bitcoin all features sort of interesting features of today's trading. make sure you join us tomorrow. please love yourself. "squawk on the street" is next. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. david faber has the morning off. coming off five straight weekly gains, and futures are backing off ahead of a busy week including a jobs number on friday. it begins with stocks on that tear. fed chair powell says any talk of rate cuts is premature. a 20-mon