>> 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-month high, and gold at an

interim record today, and uber is up 5%. set to join the s&p 500 in a couple of weeks. let's begin with the markets, jim. what do you think the reticence is about today? >> well, i think there's -- let's say incredible speculation, whether bitcoin, gold, and i think that scares people. i think people say, you know what? maybe we're overdone. we have had such a huge rally, carl. so i think that anybody who thinks that we can just continue just because we have momentum has to take pause. when you have bitcoin hitting 40,000 -- 41,000, what happens is that people say, whoa. 42,000 overnight, too crazed. it's too crazed. >> it's the fear of speculation returning to the market, and then the possibility the fed would have to react to that. >> yes. now i think that the fed doesn't want to -- look. why tip your hand? but at the same time, carl, i'm -- it is -- it is so

worrisome to see gold so high and to see bitcoin so high, they are signaling that rates are going to drop to 1 or 2, and they're not going to drop at all. there's this disconnect and people are feeling, i don't know where stocks are. they're too high momentarily. i follow this s&p oscillator. it's plus 7. it's the most it's been in ages. so i just say, let it cool down. don't be aggressive here. we are selling for my travel. >> you are? >> yes. >> trimming everything or? >> no. we just feel like 9% cash, i like to be 10%, 11% cash. there's too much risk. i don't want year-end to lose some, you know, what turned out to be a pretty good year. december will be treacherous. >> he did use the term soft

landing first time. he had to parse his headline. >> yes. >> i just feel like there's going to be volatility, and i don't want to be part of it. i mean, look. everybody has gains. mark zuckerberg has gains. taking some profits. i just think that -- >> yeah. >> i am aghast that you could have sam bankman-fried. he looks like a successful prosecution. boom. that has caused this thing to be almost free of corruption, so to speak, and it's become -- it's become what the younger people involved. you saw robinhood stock up today, and i think in the crossfire of what was supposed to be a broaden rally, it's shrinking, and i just didn't expect this. >> yeah. that said, a lot of constructive comments about fundamentals over the weekend. wages and salaries, a record high, employment, record high. services beginning to crack. rent inflation beginning to

moderate. the backdrop hasn't changed for you, has it? >> i think those are all things to say the fed will eventually have to cut, but isn't gold saying the fed's going to cut now? i mean, you don't buy gold unless you think rates will be between 1% and 2%. i have no idea what crypto is saying other than, look. don't trust anything other than crypto. i want something which says, we're fine, of which the ones that do say that is gm. gm get upgraded. that's good. i don't mind that at all, but, you know, and i like what yardini said, but i can't believe i'm agreeing with wilson. >> the man you've tortured on tv for more than a year. >> i have. then he agrees with me. i think we're okay. i just see megacap -- i see the mag 7 all going done. i see positive notes about nvidia. nvidia, which is -- >> yes. >> -- that whole dump tray,

that's coming down. i want to wait here. i don't want -- i want to have more capital so that when stocks come down, i can buy. >> do you think -- are you worried about cpi being an unpleasant surprise or -- >> no. i think those are all going to go our way and the bull's way. everything's going to go the bull's way except for the fact that people are getting ahead of it so much that i just want to say, nyou know what? let's just see more good data, and then the fed might change its tune, but right now i don't think the fed's -- i know everybody thinks the fed's about to cut. i think that's so wrong. i think the fed wants to stay here for a long time. they want to be sure they're right. >> a big piece in the journal over the weekend basically arguing the fed is probably done, but they condon't want toy it and that was clearly reflected in what powell said on friday. i think we have some of that. take a listen to what the fed chair said on friday. >> it would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance or to speculate on when policy might

ease. >> some said, at least we got the well under restrictive. >> look at what we've got in the s&p. we are -- until i came in today and i saw rates go higher, and i see this speculation, i felt pretty good, but you know what? speculation is per se bad, and i don't want to see it because it says that people are getting ahead of what the fed is doing. we were doing fine, and i still think we can do fine. i respect your genius work, but i do think we've got to accept the fact that there is going to be volatility here. there just has to be. >> yeah. meanwhile, oil continues to confound a bunch of folks. we'll get into headlines today that they'll refill the spr as quickly as they can. >> i didn't do it last time. this would be brilliant because it's a great short and cover, but i also know he said last time he didn't do it, and there's nothing that says he has

to do it this time. >> more doubts about opec plus, and thoughts about whether brazil actually joins the cartel in january. >> all i can tell is when i look at these prices, the countries are -- i think, tertiary. i think the saudis don't want it below 70 because they can't make enough money. natural gas, it's warm again after being cold. natural gas at 260. that's, what? americans? that's the bigger bill, the heating bill. that's going the bull's way. rent's going the bull's way. food's going the bull's way. >> right. >> you have speculation going the bear's way. >> yeah. interesting piece over the weekend in "the journal" about goods deflation which argues we could get back to 2%. a reminder of what walmart said about food and groceries. >> look at where walmart's stock is versus everything else. walmart's stock is signaling

they won't make as much money because they have everyday low pricing. they are the barometer of what inflation is, but i don't think -- i think they're the outlier. i think that everybody else is not lowering prices yet, and let's say, look. footlocker is saying, full prices. no promotion. you have, i would say, most of the -- of the off-price guys not cutting prices. >> because inventories are so clean. >> yes. inventories are down so much, and i just think that what happens when you get that is you have walmart -- footlocker is incredible. they're saying, we'll take prices down and you have everyone else saying, we're not. there's no pressure, and i think it's a mixed picture. ecom, we have people saying ecom didn't do that well. it was very, very strong. you have amazon cutting prices and walmart cutting prices and no one else. no one followed them.

that's kind of suboptimal. >> maybe we'll get a little more information. shopify does have an investor event this week along with mcdonald's and j&j, and a bunch of conferences taking place this week as well. >> i think that j&j, they have been in the clear for the last couple of weeks. it's a good time for them to talk about how they've got new drugs, but i don't feel like -- i think that the next piece of information after that is then going to be talc. it's so hard. >> yeah. yeah. china's the other big story today. headlines about more pressures over there. borrowers defaulting at record numbers. goolsby was asked about cuts and one of his answers was a blowout in china and not in a good way. >> i was talking to you, and it was terrific because what she's saying is you've got to be aware. it's a big problem, and i was thinking, how about

$800 billion? no. bigger. i said, $800 billion because that's what the chinese have in treasuries here. not enough to save -- it's entirely possible it's a bigger problem than that. >> yeah. at this point, would you rather own india or china? have you thought about that? >> i like india, but -- i like india because they have a younger population and growing population. china, a older population and sh sh shrinking population, but china does better. every bank seems as big as jpmorgan. every bank. look. i am very -- i am very afraid of china, but then you'll get some, you know, shein or temu, and people get excited. i don't want anything do with china whatsoever. nothing. nothing. >> meanwhile, our own regional bank index, back above the

200-day. late last week's weekend in banks was interesting. >> any bank that has a 6% yield is a 5% yield because the stocks are going up. i watch -- just so you know, i watched "ffirst horizon. that stock was an 11 -- it just moved to 13. that's a good percentage gain. people want that kind of gain, and it's still -- think about it. it's still 12 bucks below where it was going to be. >> right. isn't this sort of what every -- wasn't this the playbook that you sort of was wishing would happen? broadening in the market. >> right. >> more names above the 200, and that's working, right? >> all that's working. against that is we're really overbought, and gold and bitcoin. bitcoin cannot be here without people thinking, whoa. what's happening? i just don't -- look. what can i say? i want it lower. it's a push right now.

>> yeah. it's remarkable. first time above 40,000 since may of last year and 41,000 as of a nine-month high. >> i don't like it. >> it's happened quickly. >> i want the mag 7 to come down, bring the money to other sectors, but i think that this is exactly where the market is just going to -- we have been saying flop and chop to club members. there's just, you know, we've kind of gone as far as we can go without a pullback. that's all i'm saying. just a bit of a pullback. >> with the november everything rally, jim, i mean, nothing didn't work. >> santa's coming to town. he's not coming to town tomorrow and boy is it warm out. he's melting. >> yeah. there's not a lot of snow for the sled. >> no. still to come this morning, the story today. roche jumping into the weight loss drug wars and alaska air

paid premium to get hawaiian. don't miss the ceos with our phil lebeau. we'll get to a lot more including the calendar head in our way in the next few days including that jobs number on friday. futures are red. we're back in mont a me. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. ♪ opportunity is using data to create a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward

to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. at ice, we connect people to opportunity.

alaska air to buy hawaiian air. it's about $1.9 billion once you roll in the debt. jim, what do you make of the reason for the purchase, whether it gets approved, some of the

synergies? >> you know what? this is a good deal for the consumer because there will be more flights. that has always been the problem. not enough flights to hawaii. however, the justice department has said over and over again, we don't like these mergers. the justice department right now still jetblue and spirit, and i just think they're so knee-jerk, when they see a deal, they presume what's going to happen is rates will go higher. that's what they worried about with jetblue and spirit, and they'll worry about this too. they're not concerned about the number. they're concerned about the price. this does not make -- i'm looking into, you know, research which is all very positive. >> sure. >> it doesn't change things. the price will go up according to the justice department, and i spent a lot of time looking into this. they feel they bless too many moves. they've created -- there's a piece in "the times" saying what's happened is every time they do a deal, it raises prices so forget about what they say and watch what they do.

>> tim wu with an op-ed. l lena khan last week. phil lebeau has the ceos of the two carriers on. approval will be a topic of discussion, right? >> absolutely, and they think it'll take 12 to 18 months. let's see how this plays out also with the election that will be coming up next year in terms of whether or not this deal ultimately goes through. look, from alaska's perspective and from hawaii's perspective, this makes total sense. partly by what you guys and jim was talking about there, also look at it from alaska's perspective in terms of, and i know they're not concerned -- the doj won't be concerned with this, but if alaska is concerned with its growth, the west coast is. >> reporter: st-- very strong, d a lot of people on the east coast don't really know alaska or fly alaska very often, if ever. people ask, how big is alaska on the west coast? it's very big and continuing to grow, and it's very strong and profitable.

hawaii has always been a big destination for them. now they would like to use honolulu as a point where they can expand asia-pacific routes from there. they believe there's some international growth that they haven't been able to do in the past, that now they can do, and they can take the fleet from hawaii which will continue flying, but as they feather in different aircraft, they can take the long haul aircraft, use them for some transcontinental routes here in the u.s., and use them as they continue to grow internationally. so from alaska's perspective, this makes 100% sense, and from hawaii's perspective, look. growing was always going to be a challenge. it's always been a challenge beyond the flights to whether it's seattle or california or portland. growing beyond that has always been a challenge. they have the he want with alaska in order to do it. >> you know, phil, there's a rather amazing thing going on here. those of us who have flown hawaii know that it's so

expensive because there's no competition. this would really help. >> right. >> however, the tim wu piece today in "the times" talks about how the justice department feels it created the big three, and they win a lot of competition and they're done doing that. they don't seem to even think that it isn't possible, that any ticket prices -- >> right. >> they go down. how do you deal with their knee-jerk nature versus the reality? >> well, and the other reality that is not getting enough attention, have you seen how many flights southwest has added to hawaii, jim, and what southwest is doing with inter-island traffic over there? if i was -- not that i'm giving them advice, but if i was alaska, i would go to the doj and say, excuse me. have you seen what's happening with southwest airlines and its expansion into hawaii? there's competition there. it used to be where it was really limited competition to hawaii. maybe it was hawaiian airlines, and then you had some others and then alaska started growing. alaska has made a real priority

to make the flights from seattle as well as california, portland, over to hawaii. that has grown, and that has been a big part of their business, and they believe that they can continue expanding, but they don't believe that they dominate this market to a point where nobody else can fly in there because you see the growth that southwest is enduring. >> they should just listen to phil. enough. enough. phil is neutral. he's not one way or the other. >> special adviser to the ftc. thanks, phil. we'll see new a few minutes, of course. we'll get cramer's mad dash, countdown to the opening bell. futures are red on this monday. don't go anywhere.

♪ ford's got u.s. auto numbers. let's get pack to phil lebeau. hi again, phil. >> the overall sales down 0.5% in november compared to november of last year, but you're really seeing at ford, the split in the overall market in terms of demand, ice versus hybrid. sales down 6.5% last month. obviously the uaw strike impacted some of the demand with things like the ranger as well as the bronco, but the hybrid sales, up 75% in november compared to last year. ev sales up 43%. lightning had its best month ever. we cannot say this enough, guys. we talked about it last week. hybrids are so hot right now. i've talked to a number of ford dealers here in the midwest who have said i have people come in right now. they don't ask about internal combustion engine first. they don't ask about lightning first. they ask about hybrid. that is the starting point for many buyers right now, not just at ford, but other brands that are pushing hybrids.

so again, ford 0.5%, but the hy. >> the hybrid, they make up a ton of money. ford should be spewing capital right now. any possibility that you can just see this go up and maybe ford is in better shape than the stock indicates? >> i think so. i think there's definitely that possibility. i think everyone's trying to digest exactly what the impact will be from the uaw strike. we know $900 per vehicle in labor cost increased over the life of the contract. i think that over the next several months, we start to see a little better digestion from investors in terms of the impact. look. it's not like gm, ford, and stellantis are out of moves and we've seen these stocks come back a bit over the last couple of weeks. it's going to be some -- it's going to be more challenging. obviously with that contract, but with what you see, that was

a smart move by jim carter. very smart, and they've got a sizable business in hybrids that they can expand on. >> to that point, guys, they up gm to buy. strikes in the rear-view mirror. cost reductions, jim. they're pausing the cruise investments. near ten-year trough evaluation. >> i don't want to say the tide has turned. history says we're going to go ev, but there is no doubt we're in the sweet spot for -- they have a reason to not do self-drive, and they have a reason to not do ev so they don't look so bad. t they don't have to do the big battery investment in ford. i think the story over the next few weeks is ford's cash. how much it really has. >> we'll find out. we'll talk more about the upgrade. there's some tesla news as well. we'll see you in the next hour. the opening bell is coming up in a few moments and you can catch us any time, anywhere.

just listen to and follow the "squawk on the street" opening bell podcast.

(sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ (♪♪) [coffee pouring] (♪♪) [van engine] [card reader chimes] (♪♪)

[garage door opening] (♪♪) [inaudible chatter] [card reader chimes] (♪♪) (♪♪)

time for cramer's mad dash. >> even though lulu reports on the 7th -- i mean, this week, thursday, wells fargo does the unthinkable, and downwards and it says what people want are laggers. they want victoria's secret. this is the whole thing that i'm saying that the half price or full price? so i don't know. i mean, to me, lulu is so strong, and it's going to have a good quarter, but this is what i'm so afraid of. people have said it's moved enough in advance of the quarter. let's take some profits because look what happened to nvidia. it started going down. look what happened with amazon. look what happened with apple. >> sure. >> those are all superior names. lulu is a superior name. i don't like it when the market rate takes to this.

you see the stock and they draft it. >> one of the big calls in the morning as wells goes to equal weight, lulu. let's get the opening bell here at the exchange. the big board, at the nasdaq. warren g., of japanese marketing and research company. jim, as 4,600 remains tough resistance. >> it is. look. i think that all in good time. i really like the market here. i just don't have the love today. i mean, i think that what we're seeing is the digestion. i want to see -- lulu actually a great test on thursday. if it actually starts going back up, but we say quality is still reigning supreme. right now quality is at a discount, and that's why you see so much red. >> does that mean -- do you think russell outperforms in the coming weeks?

>> it sure did last week, and the week before, but russell led things like affirm. it's on fire and almost double. that's an example of shorts that went awry because they're buy now, pay later. they had acute defaults. just beware that some of the russell are pretty good, and don't forget by the way this crazy rebalancing with the s&p. they put in an uber well before it would get in. how about that? how about that? >> he calls the shot with a nice tweet on friday saying it's going to be nice to come into the office on monday as they will join. >> it just blew up. how about that? you short jabil, and then shazam. that stock has been the weakest. suddenly it's in. this kind of thing is what con found the shorts. i think this is a moment where the shorts are really hung, and the longs don't know whether to press their bed.

>> right. >> and that's no man's land. >> it's not a bad-looking chart on uber year to date. >> i love doordash, uber, airbnb. that's been terrific even though nobody likes it. >> there have been some selling, and they have been unloading the shares. no? >> don't do it. they have had such a big run. >> bezos, yeah. a lot of selling. >> i come back and say, no one wants to see it ever. even if it's planning, we've diverted the giant house. no one wants to see it because it says, what am i still doing if they're getting out? >> i get that. there's a ton of news in tnt. you'll get intel, amd, microsoft presenting this week. meanwhile, this bundling between verizon, netflix, $10 a month as part of a monthly perk, a membership perk. >> i thought that was a good deal. i was just starting to do a lot

of good things and i'm mindful of the fact that they were written off, and as soon as they were written off when it went to 8% yield, it's just been a horse. now they're starting to do things. they're playing offense. i thought that was an offense deal. i was surprised at the same time. we're seeing so many negatives from disney plus except for when it gets together with hulu. it's not so bad, but right now there's just -- i say, buy roku. it's been the winner and it'll stay the winner. >> disney did not have good marvel numbers over the weekend for example. it'll be the first marvel cinematic movie not to cross $100 million domestically. and at&t nokia, there will be fissures of their 5g preferred carrier status, and i think nokia was under some pressure this morning as well. >> i really hate that stock. i hated it since '98. it's. -- it's just been one giant slog. don't care for at&t. not playing offense there. not at all. i do want -- there are product

announcements from amd. that shonuldn't matter, but they're also the winner going to hold pause. not bad. >> piper replaces amd with nvidia. >> nvidia has moved too much and now it has to rest. it just does. it has to rest. it's okay. there's no speeding tickets in this game, but if you watch nvidia, the stock has said, look. it's going to -- it's going to pause. now on the 2025 numbers, it's selling below the market, but that's 2025. that's a couple of years from now. >> right. not quite crossing below the 50-day, but if it were to, it would be the first time since say, the beginning of the month. the beginning of november, i should say. >> i know. people are saying, tell me what's new. i'll tell you what's new. they have a software division that should really soften any decline, but no one's thinking about that. they're thinking about hardware right now. i want to try -- look.

i know i'm trying to change the die nap you can when i talk about it,but the world has decided it's a hardware company and it decides a hardware. it deserves more than that. >> you mentioned j&j earlier, reminding me of 3m where barclays goes to equal weight. >> i love this one. >> you do? >> the litigation risk from combat arms which is atin tinni for veterans, and don't forget the forever chemicals deal. it looks like the preliminary court approval coming up. these are what drove it from 150 to 90. it makes sense. they didn't take it from sell to buy. watch this one because this is a dividend aristocrat that still raised its dividend by a penny and i think deserves a higher price. >> yeah.

that's going to be the first move toward the 200-day since july. >> it'll be fast, and if those are solved, like, j&j wants to solve it. it hasn't been able to figure it out. they should just go call and say how do you do it? >> you have been through the wringer. your mention of dividends reminds me of disney as well. >> nobody cares. there it is. jeff marks said to me, jim. everybody knows. no, it's, like, a really big deal. it's big. my stage director knew. brian, he knew. >> oh, yeah. >> jim, you told all of us. everybody knew. >> jim, the other outsiders moving today going to be spotify. up almost 10.5% as they lay off about 1,000 employees. it's almost a fifth of the work force. >> they meant business. they are sick of losing money, and business is great. so this is one of those where, you know, you really have --

this is what salesforce did. revenue's going up. >> it looks great. >> oh my god. this is the kind of thing. i like this because they've got a reason to buy. this isn't just one of those let's just keep buying. fine. this is solid, and this is what has to happen. we need to see catalysts, and this was a beautiful, beautiful decision. i mean, i hate people to lose their job. >> yeah. >> this was the best in the book. >> does it make you wonder whether or not we'll see a little rash of year-end efficiency maneuvers? >> it worked for zuckerberg. it worked for others. it wouldn't be bad at some of these other firms. amazon's been consistently, you know, kind of quietly laying people off. alphabet could use a layoff. apple doesn't layoff people. >> right. we'll see. took some by surprise given the equity it has done. >> i was shocked at this because the last quarter was really great, but a guy who just says, listen. we have to make more money.

we can't just have revenues grow, well, nice. hey, by the way, i think you've got broadcomm reports. that's not the plan. >> of the reports this week, broadcom, lulu, chewy -- >> chewy's gtot to lay off people, and they don't have the revenues. they just don't. look at that. that's amazon. they don't come it and say we're going to destroy anybody. that's the kiss of death. >> the other -- we mentioned j&j and shopify as big investor events this week, but mcdonald's will be another one. more commentary about them getting more aggressive in china and buying back a bigger stake of their operations there, and expanding into that country. >> i like everything i hear from mcdonald's. everything, but you know what i really like? qsr.

i've got to tell you. nope. the restaurant branch. ever since pat doyle got in there as the executive chairman, these guys have been crushing it. tim horton's is doing great. they're putting money towards popeye's. i like that more than mcdonald's. >> it's interesting. there's a share going on back and forth. the argument is that mcdonald's wants some back. >> burger king's not going to -- they spend a lot of money to compete, but it's the other divisions that are starting to really look good. and they don't compete. young international is very good. nobody cares. but they're going to start caring. they're going to start caring because it's too good. >> in autos, interesting piece on the wire a moment ago that sixth, the biggest rental car company in europe is going to phase out teslas because the residual value when they get rid of them is so low.

it's been a disaster because the value, and how to fix them. the journal's got a piece today. average price of. >> rental cars, people don't necessarily use them as well, and they don't know how to drive it and things go wrong. my biggest mistake was 100. on the jersey turnpike. it was incredible, and the person from tesla was with me.

you've got to take your foot a little bit off, and then i stopped, you know. >> exactly. it is a different experience. >> yeah. yeah. it's very different. >> are you surprised that out of the box at least equities are struggling despite yields with the ten-year for 4 1/4? >> it'll be these buyers that are coming in here. look. snowflakes coming higher, but salesforce coming in. that's tun even expectations i have here. uneven. not negative, just uneven. >> we have moved past a lot of ai-related presentations, right? a lot of that happened in late november.

that's an ai play because you have to keep it cool in the data center, and they sense to me. that's lengthened the discovery, but when we see these stocks that are -- that have had giant moves and are coming duown a little, i say, don't panic, but ride it. ride it. don't say, i got to get out. just say, all right. that's fine. let it come down. i'll buy some more when it stops. >> let these people who bought it last panic.

>> amazon is having a fantastic period right here. whether it be amazon web services, and i know it's doing well just from talking nvidia. whether it be amazon retail which i know from the adobe and shopify. shopify's got a time limit. doing well. if that's coming down, they're all going to come down, and just wait. 6. >> the only thing we have not yet mentioned, jim, is some of these attacks on the u.s. assets in the red sea. gaza hasn't gotten a ton of attention on the tape. do you think it's material? >> i'm always mindful that jamie dimon says it is, and not that we need the oracle of new york city to say it, but he's worried. i was very good because we did a piece for club members, and maybe i was too glib about what jamie's saying. a little too glib about the bear case, but i do feel that those

stocks, whether it be rtx, lockheed martin, they're okay. they're okay to buy. i think the bill's going to pass. i think there's going to be more money. >> that's the other headline today is that senate republicans, some talks are breaking down regarding some funding. >> yeah. i think that those can be bought because they've come down already. wait for -- look. anything that's come down already, you know, if meta goes to 300, and nvidia goes to 425, the these, these will be attractive to me. i want to wait. >> as you can see, some moderate weakness, jim. in terms of calls, carvana. >> i love that call. sometimes it'll just be viewed as an endorsement, but when i ernie garcia on, he told a tale of getting the price down for when they fix a car.

you give them their car, your car. they fix it and then they sell it. the key thing, the delta of carvana is how much it costs to fix a car, and they've got that down a lot, and that was brilliant by ernie. ernie's a winner, and i know the shorts hate saying that. 31% of this company's float is short. they're betting against a guy who turned out to be a lot better than we thought. i said, i think he's a winner, and when he was at 35, i think he's a winner. he's a winner at 39. he is. >> the other name that's appreciated is budd downgraded. they go to hold, and it almost retraced some of the summertime drama, jim. it didn't quite fill the entire gap, but -- >> really made a comeback, and yet the share take wasn't really that good. i would be worried about anything liquor when it comes to gop because even though beer is better than whiskey, better than bourbon, but there are gradations. when you read the data, it's

like it hurts vodka, it hurts gin, it hurts bourbon. it doesn't hurt beer that much. it doesn't hurt tequila that much. >> which is the hot category for the last couple of years. >> why? agave. it doesn't hurt agave as much. so beer, yeah. not great. not great, and the studies that are being done right now, i mean, they're not studying mezcal versus tequila, but clears versus browns, and it's such a powerful concept, and it's all up now. i think the stocks were overdone, but the fact is that there are people who don't drink liquor coming into january. dry january. >> that's true. >> and younger people, yorn. they like celsius, i guess. they like pot. >> that's taking some of it too, though good luck getting them to do much of anything, right? >> no. look. i would be concerned -- i do

think that beer is social more than bourbon, but i think when people see -- when they start doing this two-drink test which is for heavy drinking, i think they're going to say, wow. this is a way to prevent heart attack and obesity because alcohol, sugar. that's all it is. >> we'll keep our eye on this. not many sectors in the green today at least. financials is among them. energy, some industrials, health care, and staples, but tech definitely lagging today as you can see the nasdaq underperforming. you can get in on the cnbc investing club with jim. find out more at cnbc.com/jointheclub, or scan the code on your screen. isn services tomorrow, adp productivity wednesday, and claims thursday, and the jobs number on friday. right now, ten-year holding in just above 4.25%. don't go causeway. -- away.

some s&p laggards. alaska airlines at the top with the deal with hawaiian airlines. the dow joins transports up almost two-thirds of a percent, highest since labor day. >> rails. >> some of the other constituents out performed, meta, amd mnvidia, on a tough morning for tech. we'll get stop trading with jim in a minute. move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network.

[speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

the power goes out and we still have wifi

to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. let's get to jim and top trading. >> what's going on there's a broadening to a lesser quality. one of the higher qualities has been united rails. key bank downgrades it saying it's moved up a lot. a lot of good news in it. you'll have something like a lowe's moving up where the good news isn't in it yet. people moving from i know the great news, to oh, wow, here's

some good news. so be careful because when this happens, you know, you're selling the good, to buy the not so good. that's okay, not a great thing to do. let this plop and chop until it's over. >> you think it's a phenomenon that surpasses specialty retail and all the names you mentioned earlier? >> walmart is the highest quality and the worst stock. how long does that go on? do you really want to continue to buy companies that aren't that good and sell walmart? no. there's a level to buy walmart. it's not here yet. pretty close, though. >> all right. how about tonight? >> all right. marvel is not doing well. marvel had a bad quarter. matt murphy will tell a good story about ai but everything else not good. >> yeah. we'll see how long it lasts. >> i know. look, it's a hard moment because people want to be -- they don't want to sell microsoft because it's down 10. don't do that. that's high quality. don't sell microsoft. >> right. and i know you mentioned the transports during our cluster,

but you mentioned the rails specifically. >> csx telling me a few weeks ago, business isn't that good. that's what people want. union pacific, business isn't that good. they want that. they don't want the ones doing well. they want the ones that aren't doing well, betting if the fed isn't going to raise it will do well. there's a lot of hope there. hope should not be part of the equation. stick with quality. i like quality. >> not a strategy. we'll see you tonight. good hour. "mad money" 6:00 p.m. eastern time. dow down about 67. when we come back as we said the ceos of alaska air and hawaiian airlines on their merger. don't go anywhere.

good monday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with leslie picker, mike santoli, live at post nine of the new york stock exchange. david and sara have the morning off. stocks off five straight weekly wins. longest stretch for the dow in about two years and the s&p tantalizingly close to a 20% year to date gain. fed is in a blackout so we'll

get data this week. jobs number on friday. got conferences going on as well as some investor updates from companies like spotify, mcdonald's and j&j. >> while the markets are wait and see mode, companies are not holding back on headlines. 30 minutes into the trading session. three big movers. shares of spotify, the music streaming service planning to lay off 17% of its global workforce around 1500 workers in order to cut costs. it's the company's third round of layoffs this year, sending shares up about 10.4% currently on that news. alaska air agreeing to buy hawaiian airlines in a deal worth $1.9 billion. it works out to be about $18 per share for hawaiian plus debt, that's a huge, huge premium for hawaiian, which closed at just under $5 a share on friday. so you can see shares of hawaiian up about 189%. the ceos of both companies set to join us later this hour.

watch nokia under pressure on speculation at&t could be dropping the company from its list of 5g equipment suppliers. verizon dropped nokia as a 5g vendor in 2020. those shares down about 9%. factory orders data out moments ago. rick santelli has the numbers for us in chicago. hi, rick. factory orders are down 3.6%. that's the most negative month over month change since april of 2020. what's very interesting here is, in the rearview mirror, originally last month, it was reported at 2.8, which is less since january of 2021. that is now downgraded to up 2.3 to up 2.3, which becomes then only the best -- well, still say since january when it was up 3.8. transportation, figured in a negative way, which has been

rather unusual. so you strip out transportation, the number improves to minus 1.2%. durable good orders, these are final numbers, mike. these are replacing the mid-month read, so minus 5.4 remains at minus 5.4. and just to give you an idea, july of this year was minus 5.6. that was the weakest month over month change since april of 2020. very close. and if we look at ex-transportation, it remains unchanged. in this instance, including transportation, made the number significantly more negative. capital good orders, nondefense, ex-air, a proxy for capital spending down 0.3%. that is from 0, from 0 now down 0.3. excuse me. that was from down 0.1%. minus down 0.3 becomes the worst level in thametric since july.

shipments versus orders, remained 0, unchanged, the weakest level since minus 0.3 since july of this year. interest rates have moved lower on the weaker than expected data points and that is going against the grain of what had been earlier much higher yields versus some of friday's cycle intraday lows. carl, back to you. >> talk soon. rick santelli. meantime the dow and s&p coming off five straight weekly wins. yields on the 2-year note lowest since june. mike has written stuff over the weekend calling for a do over on the soft landing trade. >> we traveled the same path in the s&p 500 in the last five weeks, 4100 to 4600 as we did from may into july. that was the july peak before the correction that took hold late summer. and it's been accompanied by a broader embrace of the soft landing scenario which means

focus on economic resilience and confidence that inflation is going in the right direction. financial conditions easing and investor sentiment brightening from pretty pessimistic levels. the obvious question is, where does that leave us? are we sort of as vulnerable now at 4600 or almost there as we were in late july? i would say not quite. if you look at how overbought technically the market is, it's getting stretched without a doubt, but maybe not as extreme as we were in late july. investor sentiment and positioning also not quite as overheated as it had seemed back then, but moving definitely in that direction. seeing some of the frothy stuff, some of the speculation start up. some of the comfort with this idea that we've hit a soft landing which basically means it raises the market sensitivity level to any data points that stray from that goldilocks path. that's i think the spot we're in now. seasonals are better, valuations are lower because earnings estimates are higher. all of this fits together into a relatively comfortable spot, where the stakes are rising for the numbers to bear out what investors now expect out of the

economy. >> so history doesn't always repeat itself, but it may rhyme. i like how you point out the fact that while this isn't an acutely fragile market, a lot of it has to do with the fact that corporate estimates have going higher. >> yeah. >> and so it looks like the same level, but it's actually a little bit cheaper than maybe it was at 4600. >> yes. >> than it was in july. >> a little bit less expensive because estimates have moving in the right direction. also it's worth noting two years ago today, the first week of december 2021, we were at almost 4600. 4500 and change. you were more expensive then because estimates were low. we don't know if the system will come through. a lot is relying on 2024 because for the current quarter actually there's been softness in the forecast at this point. so all that together credit markets seem like they're okay. it's much more a matter of resetting expectations once you've had this run. what is fascinating is we're getting rotation rather than a broad retrenchment in the market. so today again, small cap index is up, the magnificent seven are

the source of funds for profit taking and reallocation elsewhere. we'll see if that choreography can stay intact. if so that definitely kind of gives life to this rally because it means it can kind of cool off the indexes and kind of go to some laggard parts of the market without getting us further stretched and set up. >> certainly being reflected in the sell side calls and to jim's point people selling quality in favor of names that have surprised already or may surprise given some of the valuations and work that they've done internally. >> the quality factor has been the strongest single investment characteristic to really rely on this year. every time the market sort of looks else where to see what hasn't participate ord maybe gets more comfortable with the macro outlook or the liquidity outlook thinking about rate cuts next year it does net benefit the other areas. there's been a gap between the laggards and leaders that you can just have this be mechanical mean reversion and not

necessarily be transitioning in longer term leadership in the market. >> let's stick with the broader market this morning. our next guest says economic pain is likely, but doesn't mean that stocks will struggle all year long. charles schwab chief investment strategist liz ann sonders joins us with a playbook for next year. great to see you. >> good morning, carl. nice to see you too. >> it sounds like one of the lessons you're trying to put fort sentiment swings both ways and you have to watch out for that chop? >> yeah. you know, investor sentiment has been such an odd duck over the past year or so. really mixed messages. one example is just recently in conjunction with the rally you saw aai bulls quite higher, bearishness moved lower, but aai also does a monthly allocation survey on what actual exposure is and that has come down. it's sort of this dichotomy between what investors are saying and often short term reacting to whatever the market

is doing and what they're actually doing. in contrast to individual lowering exposure, the average active manager has actually been increasing exposure. you're also seeing that divergence there. there are times where sentiment is clear. this is not one of them. >> yeah. it kind of reminds me of like umich is saying versus what retail sales are saying. >> exactly. >> active managers are consumers too. >> yeah. and i think, you know, for active managers to be a little bit more enthusiastic, it's not terribly surprising and very much in keeping with what mike was chabtstting about before, t rotation, you're seeing a broadening out without a sort of collective downturn in the market. the return of the risk-free rate more broadly means ostensibly a reconnection of fundamental prices. i think that's providing a more level playing field for active managers relative to passive indexes. that was on and off throughout 2023 and i think it's going to

be a big theme in 2024 where active managers see a sort of growing roster of opportunities, particularly outside of the magnificent 7. >> is that still true, liz ann, if the fed does embark on an easing campaign? one of the key reasons behind this dispersion that we're seeing is because higher interest rates have kind of created this renewed attention to fundamentals as you mentioned. if that reverses, does active management still kind of play that same role in 2024? >> well, i think there's a lot of question market short terp. if you lay out everything the market has been doing, the market has priced fed policy for 2024, it's hard to square the circle because an environment in which the fed actually does start cutting rates as early as maybe match of next year i don't think the backdrop to that looks like it does now. with inflation having come down, but still well above the fed's target, not a lot of weakness in

the labor market or the economy, how that provides a green light for the fed to cut, so i actually think more economic weakness near term probably a better scenario for the equity market than weakness [ inaudible ] pushed much further into the end of the year and comes because the fed has to stay at least in pause mode. again, i'm not sure of all of the various sort of implications and stories and narratives and what's being priced in all fit in some neat story. i think some things probably have to give a little bit. >> liz ann, given that context, where you might have to absorb some economic weakness before you get the benefits on the easing side from the fed, what does it suggest to you in terms of the characteristics of stocks that are working? you've been on that quality train that has outperformed this year. it would be -- it would seem to be people are kind of itchy for maybe a change in narrative here

or leadership change, it's unclear it's going to come? >> so i think you still want to stay up in quality. many of those factors at work last year you still want to focus on things like strength of balance sheet and return on equity and interest coverage, but especially in this environment, i think you've got to apply a little bit of a valuation filter too so that you avoid where stocks are extremely overvalued or over bought. it's sort of that added kicker. there are times where you want to go way down the quality spectrum. those times are good for traders. they don't tend to last very long. i'm not sure that's the kind of game you want to play right now. but adding in that valuation filter on top of quality is probably the nuance that's appropriate as we head into next year. >> that's appro po given some of the price action today. thank you. we'll talk soon. liz ann sonders. >> good to see you guys. thanks. as we go to break take a look at the road map for the rest of the hour. alternative assets are soaring. bitcoin fresh highs, gold prices

new record, how to play that space from here. >> look at one stock adding to big gains on the year as it gets membership to an exclusive club. we'll tell you what it is and why more than 90% of the street calls it a buy here. >> a merger taking off this morning, alaska and hawaiian airlines agreeing to a deal. both ceos join us to discuss the road or the skies ahead after this break. stay with us. a big show still ahead. the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

welcome back to "squawk on the street." relief in rates we were talking about earlier in the hour may come as welcome news for bank investors as piper sandler points out in a note over the weekend during the past eight declining rate cycles, bank stocks rose in all but one of those periods. surprisingly the exception 2007-2008. the cycles also tend to coincide with rising net chargeoffs as the fed cuts rates to bolster a slowing economy. piper pulled the names of the banks that saw their net interest margins compress during the recent hiking cycle which the firm says will help identify those that will benefit when rate deese cline. from there the firm screened for their favorites included connect one bank corp, hanover, and investor holding. morgan stanley similar note this morning about how stable rates lower the risk for the sector. moving both large cap and mid cap banks from a negative bias to a positive bias, because the

stocks are cheap in their words, and pressures are abating. it's also a big week ahead for the banking industry. tomorrow covering the goldman sachs financial conference with interviews including one with bank of america's ceo brian moynihan and wednesday the eighth largest bank ceos will appear in front of the straight committee on banking housing and urban affairs for their annual check-in. lots of bank news this week against this backdrop over constantly talking about, you know, the prospect of 2024, lower interest rates, what it means for various sectors and banks in the spotlight. >> huge beneficiaries of the recent relief in yields, obviously. and the credit story is once that i would be most eager to hear about because they've been -- the ceo have been pretty, you know, undisturbed about the fact that it's a normalization, yeah, we're seeing chargeoffs tick off, delinquencies going back to prepandemic levels, but are they going to stop there? >> reserves haven't been, you know, at least in recent quarters haven't been that monstrous in a way i think a lot

of analysts in the street were expecting given the uncertainty out there and perhaps some of that has to do with prospect of lower interest rates next year. >> the degree to which corporates and households locked in the rates. mark sandy had a chart, the percent of noncorporate cash flow going to interest payments is the lowest since the end of world war ii. >> despite what we're seeing, even if the fed does, you know, make some sort of pivot in a certain way. setting up against this backdrop, you know, you have to wonder kind of what that all does given the fact that financial conditions are tightening. there's no doubt about that. but i think a lot of people expect them by this point in the rate cycle to be tighter than they are, so i wonder what consideration the fed has as it looks to potentially, you know, reverse its current cycle it's in. >> meantime big news in the airline industry today. alaska airlines slumping after plans to acquire rival hawaiian

in a deal valued shy of $2 billion including debt. phil lebeau joins us with the ceos in a first on cnbc interview. hey, phil. >> hey, carl. let's say aloha to ben minicucci, ceo of alaska airlines and peter ingram, ceo of hawaiian airlines joining us from honolulu this morning. how long were you talking about a possible merger and how quickly did this deal come together? ben, we'll start with you. >> thanks, phil, and good morning. yeah, you know, we were talking about this early in 2023, the idea started, you know, we started working on it, and we went through several months of diligence with our board and advisors, and i approached peter a few months ago with the offer. that's kind of how it unfolded. >> and peter? >> yeah. as ben said he came to me a few months ago and we took the proposal. it was certainly a credible

proposal and i did what i should do, take it to my board. we analyzed and worked through it and spent some time over the last few months working with ben and his team, and it culminated in yesterday's announcement and signing the day before that. >> ben, you know what everybody is saying, who is looking at this deal today, the biden administration has made it clear it's not crazy about airline mergers. we know what's going on between jetblue and spirit playing out in court. how do you convince the biden administration, the doj, that this deal that alaska and hawaiian makes sense? >> you know, phil, i think, you know, on the merits of this deal, is simply it is pro consumer and pro competitive. when you combine both these networks, we'll about 1400 flights a day. only 12 out of those 1400 flights is where we have overlap. then the -- you have an expanded the domestic platform and

expanded international platform for our customers on the west coast and for our residents in hawaii. if you think at someone living in honolulu, they will have three times the options and destinations to fly out of honolulu than they do today. so this is definitely pro consumer. when you think about the expanded domestic footprint, the expanded international footprint, we will become a bigger, stronger carrier to compete against the big four that control 80% of the domestic market share. we feel that we check both those boxes and we're hopeful that it will be seen in a positive light. >> peter, you understand what the regulators are looking at these days. did you talk to the board, or did you and the board talk about, hey, is there a possibility, we put this off for a couple months, an election coming up, might be a better chance of this getting through after november of 2024? >> well, we certainly talked about the regulatory process

with our board that was part of our valuation, and, you know, we came to the same conclusion that ben just articulated, that this transaction needs to be looked on, on its own merits, not compared to any other, that it is pro consumer, that we're giving more options to travelers to hawaii. there's really not a lot of overlap and the route networks are complimentary here. we're relatively small players in the industry. i think when you take a look at it in the correct context, you'll see this is a deal the regulators should look at favorably. >> hey, ben, what is the plan for using honolulu, if this deal is approved, along with your hub in seattle, to further expand what alaska is doing in terms of international flights, especially asia-pacific runs? >> well, phil, we're really excited. honolulu becomes our second

largest base behind seattle, and, you know, hawaiian airlines, you know, i deeply respect and admire what they've done, you know, throughout the last decade. they've built a phenomenally strong base out of honolulu. their international is very strong. and so that existing network will continue, but as, you know, they acquirep 787s, the fleet comes into play, that will give us a lot of options on where to put the 787s. continue to grow honolulu or position them in our hubs of strength on the west coast. we're excited as we get into the international domain. >> ben minicucci, the ceo of alaska airlines, peter ingram, ceo of hawaiian, ben it's good to see you have the code of wearing the hawaiian shirt since you're in haw whyy. >> it looks really good. thanks phil. >> next you will be saying me

lee ke macha to me around the holidays. >> that's impressive. >> leslie, i will send it back to you. >> good stuff. consolidation of dress code at the very least. still to come, the bitcoin rally marches on hitting the highest levels of the year. what's fueling it? >> bitcoin not the only alternative asset making big gains today. gold hitting new all-time highs. how much higher could it go from here? stay with us. we're back in just two minutes.

bitcoin holding above 41,000 this morning. the first time since may of 2022 as investor appetites for an official bitcoin etf continues to grow. crypto reporter mackenzie segala is here. never a shortage of reasons or excuses why bitcoin does what it does. risk appetites, interest rates, regulation, possible etf, what do you see driving it right now? >> good morning, mike. so as you said, bitcoin had been testing that $40,000 level the last few days. finally breached $42,000 earlier this morning trading at more than 5% in the last 4 hours. meantime ether, the second

biggest crypto currency is back above $2200. a couple of things are happening here. for one, the market, as you mentioned, is expecting to finally see rate cut in the coming year after comments from fed chair powell last week. the big thing on everyone's mind are the spot bitcoin etfs. traders are increasingly bullish the s.e.c. will approve one of those applications by the first quarter of 2024, potentially as early as mid-january. this would allow investors to buy into digital currency drel through the same mechanism they already use to buy stocks and bond etfs. you've got top asset managers including black rock, wisdom tree and invesco that filed applications with the sec and part of why this is so significant, bernstein points out the spot bitcoin etfs are really the largest pipe ever built between traditional financial markets and crypto financial markets. they're expecting that 10% of

bitcoin and supply or around $300 billion will be managed by the etfs by 2028. crypto stocks moving higher this morning. digital asset exchange coinbase up 6%, micro strategy 7% and marathon digital up more than 9%. worth noting coinbase is the custody partner for a lot of spot bitcoin etf applications and their stock was up more than 60% in november, mike. back to you guys. >> yes. coming off a pretty significant downturn from the highs in 2021. it has had a very good run. i guess the question is, we have gold etfs, we have had oil exchange traded products. i guess there was some excitement around the ability for investors to own those in that form. i just wonder if once the reality is here, that the etfs are in place, if this is still going to be a catalyst? >> i think that that's the question, right. so at the moment it's building to a lot of enthusiasm among crypto traders. you saw $1 billion pulled off the crypto exchanges, which is

typically bullish sentiment showing people are looking to hold on it their coin. one has to wonder once you start to see a slew of approvals, will people look to sell to lock in the gains from the price run up that we've seen. it's a great question and something on a lot of people's minds. >> quite a move. we're keeping a close eye on it with your help. thank you. still ahead, a look at one mystery name about to get added to the s&p. is the stock a buy here? we'll discuss. and a quick programming note, as we go to break, this week, cnbc launching its new cross platform franchise called cities of success. a new series explores cities in america that have transformed into business power centers driving change all across the entire u.s. economy. cities of success will feature a different city each quarter and our first stop on wednesday night is going to be nashville. don't miss cnbc's one-hour prime time "cities of success" wednesday, december 6th, 10:00 p.m. eastern time. back after this.

there are some things that go better... together. burger and fries... soup and salad. like your workplace benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions. voya. well planned. well invested. well protected.

welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update at this hour, the israeli military says that its ground offensive into southern gaza is under way. troops are in areas where hundreds of people have sought shelters since the start of the war. the push into the south is raising new fears of civilian casualties as gazans say they have no safe place to go. the former police officer convicted in the murder of george floyd has returned to prison custody after he was stabbed 22 times by a fellow inmate. derek chauvin is currently serving a nearly 23-year sentence. the criminal complaint says the inmate who allegedly stabbed him used an improvised knife.

corrections officers claimed the inmate told them he was trying to kill chauv been. that inmate is charged with attempted murder. the supreme court is hearing arguments today on the legality of purdue pharma's bankruptcy settlement. the oxycontin maker deal would give billions to people harmed by the opioid epidemic. in exchange it would shield purdue's owners, the sackler family, from future opioid-related lawsuits. this is one that people are watching very closely. it has a lot of implications for a number of industries. >> yeah. especially in bankruptcy proceedings in particular. thank you very much. we're an hour into the trading day. let's get to bob pisani with more on what's moving today. hey, bob. >> we're at the lows of the day. as mike has been pointing out, we are way over bought on a lot of sectors and it's about time we got a little bit of a correction. the sectors that have had the best moves that are doing a little bit on the downside

today. tech is out there on the downside, communication services. you see what's going on with meta and alphabet down and energy has had a rough, rough quarter and it's still having a fairly weak time. the bank has been an enormous leadership group as interest rates move down and continuing to do so and consumer staples which had a disastrous first three quarters, is cdoing bette in the fourth quarter. i want to show you big cap. you see the correction going on. we've had an enormous move in the big cap stocks in the last month or so. salesforce has been a big help and microsoft to the dow. they're to the down side. meta and alphabet and you can go through the whole list here of big cap tech names all to the downside. overall, the overall market is generally overbought right now. goldilocks has been the story. lower inflation, lower interest rates, generally higher earnings for 2024, just take a look at some of these down names. am mentx up 25%. essentially has been straight up

as you can see. take a look at anything else, even tech, ibm, a surprising outperformer, not normally included among big tech names that have a lot of momentum behind them, has been strong up about 15%. bogey has been huge and industrial stocks have generally been big outperformers as well, up almost 30% in the last month. finally the banks have been fabulous. pnc has been up 20%, go down the list, fifth third, anything in the big bank sector has been doing really well. i was making fun of the strategists last week. they have their estimates for 2024 out. they're generally wrong. the analysts are coming out with their 2014 numbers. analysts are more important than strategists because they determine if they beat or don't beat on the earnings. these are the people we quote on the air here. the 2024 system are bullish, surprisingly, not surprising, he said facetiously. 246 is the estimate for the s&p 500 for 2024. that would be a record high up

11% if we hit that. 2023 is 221. you can see here we're up 11, 12% for the estimate here for 2024. as i pointed out with the strategists last week, analysts also are wrong. they over estimate because they're too bullish. the average over the last 20 of 25 years has been about a 7% over estimation and the analyst community resent this because they always complain to me, bob, how are we to know? big things happen in the middle of the year that throw the estimates off and all is true but the big things happen all the time. here are the years they've had big misses, 2001, 9/11, the estimate office by 36% remember the stolck market moves 6, 7,% year. 2009 and 2020 covid. all of this is true, they throw off the estimates. throw out the worst years the analyst estimates get better. that's the point here. guys, the point is, you can't

throw out analyst estimates. you can't exclude the best and the worst years. because we're all involved in the market all the time. so when i -- people -- the analysts say bob, you're being unfair us to signaling out the fact that we're usually wrong, listen, we can't exclude those years. we have to look at -- and there are plenty of other times they're off in the middle of the year because macro events occur. this is what the world is like and why it's difficult to make accurate predictions. it's not that we should make fun of the analysts or think they're dumb or stupid and they're not, we need to pay attention to them and recognize that the numbers don't have a lot of predicative power. you should not buy or sell the stock market based on what analyst community thinks in 2024. >> i was going to say, but that's also why people are fixated on are we going to have a recession or not. the years when the estimates were not in the ballpark were recession year one way or another. therefore, if you have a regular glide path of declining forecasts into next year, that's just kind of the routine

trimming because companies and analysts are always probably too optimist ig going into a new year. >> when they say bob, these years, look, we didn't know a recession is coming, but these one in 100 year events, floods, one in 100 year recessions, pandemics, if you add them all up, they actually happen a lot more frequently than you want to admit because there's a lot of different things that can go wrong once in 100 years it turns out. and that's why this game of predicting the future, any kind of future, is really, really difficult. there's a certain unnobility about events out there and you have to be comfortable with that. it doesn't mean we shouldn't pay attention. i listen to everything these people do. you do too. it informs the way i think. they may have something to say. i don't bet the stock market based on what they're saying for the for2024. >> if you -- >> if you take out the worst years, like four years the estimates get better down to like 3%. that's true, but it's sort of like excluding energy.

i'm sorry i don't live in a world without food and energy. that's the problem i have. i don't want to extract the worst years because i was still in the stock market on those worst years, so i don't get to do that. >> yeah. >> you never go wrong keeping expectations low. that's the way i think about it. >> there you go. >> thanks a lot. gold hitting new record highs topping $2100. briefly overnight, more gains ayituswe'll discuss that next st wh .

(carolers) ♪ iphone 15 pro, your husband deserves it! ♪ (mom) carolers? to tell me you want a new iphone? a better plan is verizon. (dad) no way they'd take this wreck. (carolers) ♪ yes, they will, in any condition. ♪ ♪ get iphone 15 pro and ipad and apple watch - all on them! ♪ (mom) please forgive him. (carolers) ♪ it's all good - just a little awkward. ♪ (soloist) think we'll wrap this up. (vo) for a limited time, turn any iphone in any condition into a new iphone 15 pro with titanium and ipad and apple watch se - all on us. that's up to $1700 in value. only on verizon. [ "i'll be seeing you" by the five satins ] ♪ ♪

gold soaring past 2100 dollars earlier to a record high. prices climbing for two straight months now. how high can gold go from here, though. joining us is ryan mcintyre, managing partner, $25 billion medals fund. thanks for being here. so gold now down about 2% after that recent surge earlier. where do you see gold going from

here? do you think that it reached a near term peak and it's over or do you see enough of a catalyst to propel it higher from the $2100 level? >> i guess the short answer over the long term i see it higher. one of the factors in terms of huge fiscal deficits, big debt in the united states, long term the picture is very positive. short term is going to be volatility. but i think when you've got a slowing economy, people already seeing and suggesting that lower rates will be coming down in the near term, and that should be supportive of gold for sure in the near term. >> what do you attribute this recent surge to? i've seen everything from geopolitical uncertainty, the dollar moves, lower interest rate. jim bianco saying in a tweet we have, quote, so financialized gold via future options, etfs and other derivatives it has turned into another fiat currency. his point gold goes up when the dollar goes down as opposed to

other factors, war, inflation, crises, pandemics. do you agree with that? >> i agree with some of that. i think the big things that can have come to pass are the heightened geopolitical risks for sure and the perceived slowing down of the economy in terms of flation. inflation, obviously, is a big driver of rates in the short term and i think that is definitely supportive of gold any time that is considering pausing or lowering rates. >> ryan, you mentioned a bunch of factors that tend to make people feel better or worse about owning gold, although over time it's hard to draw the tight correlations between federal deficits or inflation or things like that. one argument, aside from real rates, that might be a driver is, do people feel as if central banks have it in control or not? and it seems as if maybe right now if we're going to be orchestrating something close to a soft landing, we don't know if that's the case but the fed

seems like that's where it wants to be in policy wise and the markets responding okay to it, is that negative for gold? >> i think you hit the duality of it and why people are so uncertain about the environment. in the short-term people don't have a view of where things are going. gold his tethered to what the fd is thinking over the next couple months. over the long run, gold should be doing very well, given the huge deficit we're currently running and frankly will be increasing as rates go higher, as rates kind of come higher. and, you know, i think when people look at the trajectory of the fiscal picture of the united states people should be worried. we're going to get into worrying about more sovereign risk coming into the picture than there has been in the last several decades. >> what's happening to the cost of production right now and how do you think that's impacting the longer term playbook regarding gold? >> yeah. so i actually think cost is starting to stabilize.

in some instances you can see slight decreases. you had walmart talk recently about maybe some deflation coming in. what's great about that is, you know, i think for the gold perspective, you know, that, obviously, puts pressure on the fed to lower rates and the other interesting aspect we've had which has never happened since data recorded history in the united states is actually money supply shrinking year over year and so money supply year over year is down 3% and that's never gone below zero before and so people should be more concerned about that. i would not be surprised at all if the fed started amping up in terms of their dovishness going forward. >> yeah. you bring up a good point as well as the sovereign risk there. before we let you go, how your position and portfolio positioned with regard to this recent rally in gold? >> yeah. we believe people should have about 10% of the portfolio in physical gold and we focus a lot on that with our clients here and we've got a bunch of physical products. we do all kinds of fresh metal

things, energy transition stuff, so i think it is good to have in your portfolio a bit of insurance against other things in your portfolio. >> interesting. well, thank you, ryan mcintyre, managing partner, appreciate you joining us today. >> thank you. coming up, check out this mystery chart. it's been on a tear this year hitting a fresh 52-week high. this morning over 90% of analysts call it a buy here. we'll reveal the name and find out how much higher the stock might be able to go from here.

the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com - i got the cabin for three days. it's gonna be sweet! what? i'm 12 hours short. - have a fun weekend. - ♪ unnecessary action hero! unnecessary. ♪ - was that necessary? - no. neither is a blown weekend. with paycom, employees do their own payroll so you can fix problems before they become problems. - hmm! get paycom and make the unnecessary, unnecessary. - see you down the line.

welcome back to "squawk on the street." we showed you a mystery chart before the break. it is uber, hitting a new 52-week high today as it gets added to the s&p 500 index. over 90% of analysts have a buy rating on the stock right now, including our next guest, mark mahaney, calling it a top pick with a $75 price target. good morning. >> good morning. >> just in terms of the index

inclusion, i know this is a bit of a landmark in terms of the corporate timeline. it's profitable, shows it's an institutional holding, but it's probably worth mentioning that it's no magic for future stock performance in itself, right? tesla has underperformed the s&p since it got in. we've been talking all year how 493 stocks in the s&p 500 haven't done a whole lot. how do you think about either the index inclusion or where uber is right now now that it's gotten this distinction? >> well, it's a sign there's a real business here. it couldn't have gotten included in the s&p 500 if it wasn't -- if people in the committee weren't at least convinced they were sustainably profitable. they turned the corner a year and a half ago and they've been ramping up ebitda and showing you consistent gaap growth. at least it's a sign that this business model is actually working. now going forward, what's next?

i think there's two or three things to keep an eye on. one, i think they'll start repurchasing or buying back some of their own stock. secondly, i think that you continue to sustain this 20% growth in delivery and mobility sector. there's been concerns that it wouldn't hold up but it has. third, are there other new services and features they can roll in, particularly treated by the advertising opportunity. if you have a high frequency in basket service, you know, shopping basket, you know, restaurant food delivery basket like uber has, you can have material amounts of that revenue. we think this could get to a couple billion. that's super nice for their bottom line. >> in terms of the valuation now, i mean, the stock price has been up here only really once before in early 2021. clearly when cash flow was a good deal lower. where do you think it could get

to? looking at it comparing it to things like doordash and airbnb. they're all in this 20 times ebitda. so how much more can you expect out of that? >> i think we've had the rerating you'll get out of an asset like this. i look at growth stocks and i think, what's may rerating potential and what's my compounding potential? if it's a high-growth stock, you should have a lot of compounding. i think uber will give you that because you'll get 20%-ish, close to that, top line growth, and margin expansion. that will get you good, chunky, free cash flow ebitda and earnings growth in that 30% range. that's your compounding. you get a little more rerate. i think an asset can go for 20 times free cash flow, given the size of this business, well over 100 billion in bookings, the growth and now rising profit levels. i think it well warrants this 25 multiple. we're just a few turns away from that. you're at a point where you have

a lot of rerating to get a little more and you get the compounding. that allows you to outperform with uber. >> mark, i'm curious, with spotify news this morning announcing a trimming of about 17% of its workforce, obviously, the market is reacting positively to this news. do you think there's any headwinds under the surface we should be concerned about given this is the third such cut this year at this company? >> i don't think there's a demand surprise here. that's the first key question to ask. i think the comments the founder made in the letter to employees was kind of a long-term comment. like the economy has changed, it's different now than it was several years ago. all of the employees needed to hear that. i interpret this differently, which is this is kind of like the era of efficiency that was drummed into a lot of these major tech companies a year and a half ago. it's turning into years of

efficiency. that's cliche but these companies were rubbed for growth and they built for growth and they hired for growth. and i think they are more mature. nothing like a dramatic stock correction in 2022. nothing like that. i'm overstating the point but i think it's true. now you have assets that are fundamentally good businesses. they're generating good free cash flow. they can do more, they took these reduction in forces earlier in the year and became more innovative and more efficient. it's like doubling down on cost efficiencies. i think that's a wonderful thing for investors and the kind of cost savings you're talking about here, this is like a 50% increase in the company's profitability outlook next year. that's exactly why the stock should be up 10%, roughly. this is not one of our top picks. it's a small buy for us at current valuation. but these efficiency steps are great great. >> back on uber, i know it's not

the most pressing dynamic when trying to decide whether to buy now, have any complications about self-driving removed the long-term playbook, the event horizon analysis on what self-driving might bring to a company like that? >> i don't think anybody knows how this is going to play out. i just think the company with the network can be a great way to diffuse self-driving cars. i think the real play here, if you want to get mass adoption in self-driving cars is you kind of work them into the network. you work them into uber. my guess is we'll be opening up our uber apps in five, ten years and we'll see a series of options. some of those will be self-driving cars. there will be some customers who will be very comfortable doing that, some that won't. there will be some good use cases for it, some won't it. i think uber is a positive play with the self-driving car future. that's long but i think that's how it will play. i don't think it will be an overnight switch. i think it will be a steady migration. with the network -- of uber

owning the network, they can be the play that unlocks that potential. i think it's a bullish outlook. i think it's going to be a positive trend. >> mark, thanks very much. appreciate it. s&p 500 down about 1%. equal weight is around flat. it is a rotation day again with weakness in the nasdaq. "squawk on the stree cties ghafr is."onnu

good monday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with leslie picker at the new york stock exchange. narrow no more. nine of the 11 s&p sectors turned positive. will that trend continue? plus, two more deals announced today, adding to a busy few weeks. october was the best month for m&a globally since may 2022. we'll look at what could be ahead in 2024. checking all the right boxes. wells gets bullish on nike. says it's time to move to the sidelines on lulu. we'll talk to the analyst behind the big call. first a look at the markets. stocks are lower after posting five straight weeks of gandz with the s&p closing at a 2023 high. yields moving higher today as well. the nasdaq the biggest loser with