dow futures up. s&p futures have been flat all morning. the nasdaq, in the red, but only down by about 7 points, and six weeks in a row of gains. >> six weeks in a row, s&p up about 12%, at a new 20-month high. >> monday morning, got that going for us. that does it for us today. right now, it's time for "squawk on the street." and by the way, mike, thanks for coming in. bye. ♪ good monday morning, welcome to "squawk on the street," i'm david faber, sara eisen, post nine to the new york stock exchange. cramer has the morning off. bulls trying to extend this rally. futures choppy as yields are up to a one-week high ahead of cpi and the fed on wednesday. s&p coming off its highest close since march of '22. the stock set for a muted open. plus we got deals in focus

this monday morning. macy's getting a nearly $6 billion buyout offer. cigna abandons its pursuit of humana, and occi expands in the permian basin. and apple's bullish call. why one analyst expects it to be the first trillion dollar company next year. you might have noticed our screen looks a bit different today. it's all part of a new look for cnbc that we're pretty excited about. over time, we do hope it will make it easier for you to understand the market and the stories that we bring to you. we're going to run through a few examples, guys, of different looks, different charts, the way information is telegraphed differently. ticker's a little bit different as well. >> very clean and easy to understand. >> yeah. >> oh, whoa. >> that's some fun music. >> i like that. people oftentimes can be somewhat resistant to change. >> not us. we embrace it. >> give it a chance. i like it initially, and i'm sure it will grow on me. >> let's do dollar-yen? can we get a dollar-yen in the

new look? it's up today. the dollar is strong. the yen is weak. after some bank of japan rumors they might not get out of negative rates forever. >> i think that's a -- >> that's the first place i look in the morning. >> sure, dollar/yen. why not? >> they said, pick a chart, any chart, to see the new look, so i picked my favorite chart. >> i'll pick the faber report, then, because that's my favorite chart. i'll have one later today, so we can do it again, but i want to get a look at it. whoa. >> that's great. is that a new picture of you? >> i guess so. >> yes, it is. >> it's a new picture. it's updated. >> so serious. >> old. how about that? is that what you were thinking? >> no, i was thinking handsome. >> i don't know about that. >> serious journalist. >> thanks, guys. i like that. >> can't wait for that to happen in realtime. let's turn to the broader markets as the major indexes rides a six-week win streak. it's been amazing to see the strength in stocks overall. we had a new high for the year on friday or closed at a new

high for the year on the s&p. we're now 4.3% from an all-time high that was reached back in january 3, 2022, carl, and the question, i think, people are asking is, we've got a lot of macro events this week. can we continue to climb through year-end and into 2024? we've got central bank meetings galore. we have the fed, the ecb. we have the bank of england. we have norway. we have mexico. we have brazil, which has been cutting rates, and of course, we have some supply. we're still watching this treasury supply in the next day, today and tomorrow. we're going to auction off some ten-year and 30-year bonds, which people are watching. the last 30-year was not that great. we have cpi ahead of the fed meeting on tuesday, which has been a market mover and is key to some of the strength that inflation has come down >> that's what goldman said over the weekend. has come down even better than our optimistic expectations. they lower their forecast for core pce, move their expectation of the first cut from q4 to q3. goldman is looking for about 50

basis points next year, not quite as much as consensus. but yeah, we'll also get new york fed and see if we can back up the university of michigan expectations on friday with some additional data. >> that was good news. >> really good. >> good news to see it come down and confidence go up, although you could just argue it's because of the decline in gas prices, which is also good news, but it's why consumers expect less inflation and why they're feeling better about their spending power. one of the risks going into 2024, you wonder, what are the risks? everything feels good. soft landing. fed is done. one is that there's an inflationary flare-up, and it could come in the form of higher oil prices. geopolitical tensions remain quite high. so, that's one. i think another risk, carl, is that employment weakens further. it was a big surprise to get a 3.7% down unemployment rate, so that was good on friday, but if employment goes, say, negative, in terms of adding jobs, that could lead to some recessionary worries. i'm going through some of what

people are chattering about could be risks for next year, not necessarily base case, and not necessarily what's happening now, because the data has been good and supportive. >> we have said it many times, but just to remind people, we get ppi, cpi, and the fed meeting. those play out wednesday, thursday? what are the days? >> the cpi is on tuesday. and then wednesday will be the fed meeting, and it's not just the meeting. like, who cares? we know they're not going to raise rates. it's the sep, the summary of economic projections where we get the dots. that's where the fed is going to do the talking. in other words, is the fed cool with the market pricing in 100 basis points of cuts next year? we're going to find out this week. are they going to push back against some of these looser financial conditions? leading up to the quiet period, they seemed okay with it. powell maybe tried to talk it back a little bit, bit didn't work, and the market rallied off that. so, they will be able to express themselves in how many cuts they project for 2024, because they're going to give those forecasts. remember the last time we got the forecast in september?

they expected two cuts in 2024. so, will they catch up with the market? will they keep it at two cuts? that's going to be the key question. >> really a lot of interesting pivot points. one discussion over the weekend at renaissance macro was the idea that if you look at the jobs number and the additional jobs, the additional earnings, the additional workweek, and if cpi does come in with a goose egg, that's all real income growth for the consumer, which is great news unless you're hawkish and you worry that it's going to fuel, again, a bout of inflationary spending. >> some of the committee members -- i'm thinking of michelle bowman, for instance, fed governor -- will point to the fact that the economy is still strong. unemployment is still low, and inflation is still above target. what are we expecting this week? we're expecting core to still rise. we're looking at a -- it should be zero percent on the headline, month to month, but core could use 0.2%, and last time it was at 4%, which is double where the fed needs it to be, so the fed is in no place to say, okay,

mission accomplished, looking ahead to cuts. the market is sort of there. and so, the question will be, is the market too excited in pricing it in too early when it comes to may and whether that will knock things around a little bit in terms of the good vibes we have had in the market? >> we got a lot of m&a news to hit this morning. but some of it actually is about deals that are not going to happen. in fact, that's where we will start this morning. you can see the impact it's having on shares of cigna. why? well, cigna's essentially told us they're not going to pursue humana. they didn't say that specifically. they said, we're going to be buying back an awful lot of stock and obviously spending a lot of our cash flow on that, and so you get the message. of course, this follows what was reporting a number of weeks ago from the "wall street journal" about potential talks between cigna and humana. viewers may recall that i reported on as well what was pras significant opposition building among cigna's

shareholders. having spoken to a number of those significant shareholders indicating they did not want any deal in which cigna would have been the acquirer of humana. that would have been largely in stock, which they felt was undervalued. that goes back to the story we did here and on cnbc.com. they listened to the shareholders over the last few weeks. i think any number of shareholders made it clear they did not feel this was a strategy worth pursuing when it came clear that, in fact, it was going to be structured as a cigna purchase of humana, not as a merger of equals or not even as humana buying cigna and cigna paying a big dividend. those approaches might have got an bit more support, but not just cigna outright buying humana. that is what they were pursuing. that is what they are no longer pursuing, deciding instead to increase their share buyback, aggregate increase of $10 billion in incremental share repurchase, and $5 billion of

that is going to happen fairly quickly, by the end of the first half of 2024. executed some of it via an accelerated share repurchase program. that will be conducted in the first quarter of 2024. all of which is having a positive impact on shares of cigna, which were down some 15-plus percent since news of these talks first surfaced, and you can see right there, it is rebounding almost or taking back a lot of the losses that have taken place over these last trading sessions as at least the possibility of this deal was out there. as for humana, cigna seemed to be the only potential real buyer there. they're not midst of what will be a ceo transition at the insurer. they're focused on medicaid advantage. there had been a regulatory concern as well, not about that side of things where cryigna wa thought to be able to easily dispense of its m&a business but in terms of putting together the pharmacy benefit managers. none of that matters anymore, but the question is, what does

humana do? kind of having to battle it in 2024, which is already going to be a difficult year, and with the ceo transition looming as well. >> do you think it was the regulatory? that the ftc antitrust authorities cast a long shadow here? >> certainly, the -- i think it was more shareholders. it was simply shareholders saying, wait, you're going to buy something at 16 times using 10 times currency? and to your point, sara, you're also going to be taking on what might be a very long regulatory review and put us in limbo for what might be 18 months or two years? that's all sort of what was behind this. and again, that's why the shareholders were speaking quite vocally to management, saying, please do not do that. and ultimately, cigna listened. we got a couple other deals this morning. the macy's potential transaction. you heard andrew at the end of "squawk box" talking about it. 21 bucks a share is what we add cnbc.com are reporting as the

current offer. could go up, apparently. got to do due diligence. i don't have anything on this deal. i know, you know, as a -- as reporting on the fundamentals as you have of macy's for years, it hasn't always been a pretty picture. >> no, and it might seem like a nice valuation, well, a 32% premium to friday's close, but actually, valuation is quite low. i've been reading about enterprise value of macy's stood at $10.6 billion on friday, which is around five times ebitda. this offer is about 5.4 times ebitda, and retailers usually with strong franchises get a lot more than that, thanks to medley advisors for pointing that out. there's been a lot of consolidation and upheaval in the department store space, kohl's, and we've seen bankruptcies like jcpenney and macy's. i think when you talk about a macy's deal, david, you have to talk about the real estate, and that's potentially what they're after here on this deal, which has been valued by some estimates, i think, cowen has it

around 6 to $8 billion that they're sitting on in terms of real estate. >> most of it on 234th street. >> they own that. that's where the value has been considered here. i do wonder if it sets up for a bit of a bidding war, given that $5.8 billion price, sitting on so much real estate. there's been interest before. i think starboard was looking at this. >> starboard, many years ago, and it wasn't a great pick for them. jeff smith had talked specifically about the real estate value and specifically, of course, about 34th street, the giant flagship store there, and what it was worth on its own. but frankly, none of that came to pass in terms of doing some sort of transaction to try to realize that value at that point. >> they've tried to turn around the fundamental business. they have had some success. it's not like -- some analysts like this stock, but it's a shell of where it used to be, both in terms of the number of stores and the sales that it's had. i mean, it's a challenged industry for sure. >> well, department stores are tough because, as citi says this

morning, it's where companies sell other people's stuff, and in a world of e-commerce, that gets -- it's difficult to do that model. citi does point out they have done, as you says, some monetization of real estate, but there's probably more to be done, whether it's harold square or chicago. but it's hard to comment, given that we don't know where the financing's been lined up and certainly no comment from the company. >> yeah, i'm afraid i don't have anything to add to that as well, beyond our own reporting here that cnbc.com has done as well. listen, interest from parties in terms of the real estate value of retailers is not new. whether it's hudson bay or whether it goes back to steve roth, which started with the big purchase of alexander's. some of our viewers may remember that store. this is a theme that's gone on for many years. we'll see whether macy's has any interest in that potential deal, and to your point, very important whether they have all

the financing they need to get it done. >> and we'll get to oxy. >> that was, you know, big headline, but a lot of that is debt. over $9 billion in debt, oxy's deal to acquire crown rock. it's a permian deal, though. lot been going on there, obviously. hess and pdd being the largest of them. pioneer. >> vicky on "squawk" this morning. still to come, td cowen names delta one of its top picks for '24. we're going to talk to the analyst behind that call. take a look at the premarket. very busy week on tap, not just the central banks and eco-data but an s&p rebalance on friday. futures pretty plat. back in a minute.

looking ahead to 2024, our next guest picks delta as her best idea in the airline sector, saying it's set to differentiate itself from its peers. helen has a buy on delta. you lay out a bunch of optimistic reasons to like the stock, but it seems like international and corporate are where you say there's more room to run. >> exactly. so, hi, carl. hope all is well with you. so, that's what we're thinking, that delta has a really good opportunity to grow its international business.

they're going to grow in the atlantic by about 6%, and they have quite a lot of good opportunities to hook up with their alliance partners, their sky team alliance partners, their france, klm, and virgin atlantic. that gives them exposure, really, from france, amsterdam, and london, almost the rest of the world that they -- maybe people couldn't access from the u.s. and then, on the -- on corporate, so, here's how we think about corporate. air quotes around everybody talks about corporate not coming back, but pragmatically, the u.s. economy has grown quite a lot in the past four years, and so what managed travel will come back has come back. what really hasn't come back

that i think people are forgetting is that one-day trip. and eventually, when people can trust the industry again, it will come back. >> it sounds like that's where you think loyalty may fold in, yeah? >> exactly. delta has already a very good group of loyal customers, and as the american express card becomes accepted in more locations, we think they'll be able to pick up additional credit card holders and it's proven by really all the airlines that if you have a credit card, you're more loyal. >> so, what's with the stocks, helane? they're barely up year to date. they haven't been that great. i guess there are worries about demand continuing and whether we've seen the bulk of it, especially if we're heading into a slower period or even a recession. they've got high debt loads coming out of covid and high interest rates. i mean, these are just some of the bear reasons against your call, right? >> those are really good bear reasons too. thanks, sara, for pointing them

out. so, here's how we think about that. to your point, as it relates to delta specifically, our view is that delta's actually in a pretty good place with respect to its wlbalance sheet. its goal is to get net debt down, which would make it among the best of the big four airlines, maybe second to southwest, and then getting back investment grade credit, which would mean their borrowing costs would be more attractive. they're one notch below ig right now, so that's something that would be a catalyst for the shares next year. and then the other points that you make with respect to a potential recession, our view is that we've seen the decline in domestic. it's not growing as fast as it had been, and fares are already off their highs, which were

unsustainable anyway. and we think that in the atlantic, certainly, airfares next summer will be lower than they were this summer, not because the u.s. airlines are growing that much but because the european airlines, which undergrew in 2023, are now upping their capacity. so, it's better for delta to do that expansion. it's, what, mid-single digits at 6%, and allow their partners to grow with their own mettle. delta still gets the benefit of their joint venture. >> that's interesting. next time, helane, we'll talk some labor and maybe attempts by the rest of the industry to consolidate. it's great to see you. helane becker from td cowen. speaking of delta and the airlines, don't miss our exclusive with delta's ed bastian today, 10:00 a.m. eastern time. taking another look at futures here as we count you down to the opening bell. coming off of six straight weeks of gains, looks like we're open for -- set for an unchanged open

right now ahead of a lot of key events this week, including the federal reserve meeting on wednesday. more "squawk on the street" when we come back. (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? ♪ ( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪

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(♪♪) (♪♪) we've talked about what's on deck this week, but overall, the six-week rally has taken the s&p from roughly 4,100 to 4,600, which has proven to be somewhat sticky. we'll see where we get when we get opening bell in just about five and a half minutes.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. the acquisition of crown rock further strengthens us in terms of adding incredible inventory.

they actually have 1,700 well locations that we'll add to our inventory. 1,250 of those wells are less than $60 break even, so the inventory is important to us. >> that was occidental's ceo vicki hollub talking about their decision to buy crown rock. the overall price tag is $12 billion, but $9.1 billion of that is new debt. they're going to also issue $1.7 $1.7 billion of common equity, and then also assume $1.2 billion of crown rock's existing debt. you can see it's not having much of an impact on shares of warren buffett's favorite oil company, sara, as we know, of course, berkshire controls a lot of the stock here. but the permian has become a real focus, obviously, as well for exxon with its decision to buy pioneer recently. they talk about increased free cash flow on a diluted basis,

including $1 billion in the first year. that's at least based on if wti stays around 70 bucks a barrel. >> chevron buying hess, so a lot of industry consolidation and pressure to get bigger. just reading one research note here, mkm roth saying that it looks a little pricey, the deal, just on an initial take here. they're where measuring it on $83 million per undeveloped acre. so, just as an industry metric there. they also say that they thought that market reaction would be negative, given the poorly timed acquisition, according to analysts of the anadarko deal from oxy back in 2019. >> that's -- the stock came under a great deal of pressure after that deal. that's when buffett really became deeply involved, of course, helping to finance that transaction and get it over the finish line as well. >> do they expect this to close in q1? >> i believe that may be the

case. that said, we did get two second requests, but of course much larger deals for both chevron and exxon. >> it's been active today and over the weekend. deals either getting ready or unready. let's get the opening bell at the cnbc realtime exchange. at the big board, msg providing unforgetting experiences to children facing obstacles. at the nasdaq, steve madden celebrating its 30th listing anniversary. where do you want to start? >> it's a fun day, because it's the day when analysts put out their top picks for 2024, and they often pick stocks that are underperformed or the consensus isn't frequently on. they're not obvious. so, we can pick out a few of them and see if they're having an impact on the market. nike got a little bit of love this morning, both from barclay's and from citigroup. i think it was named a top pick

at barclay's. citigroup says that nike has a margin inflection here. so, margin shrank for nike this past year, but they think that will turn around in the coming year. nike is on an odd reporting schedule, so that's why it's getting some attention. i reports on december 21st, i believe. so, it's underperformed names like lulu, for instance, and there's been macroeconomic weakness in china, and even in north america here, but a lot of the analysts say it's been underappreciated, and even in places like china, nike is still taking share and doing quite well. >> yeah. barclay's best idea, as you say, and then citi goes to buy $135. paris olympics, they point out, leaner inventory, less promotional. >> they say history shows that nike actually does typically see a lift in sales around olympics, and obviously, they're already talking about it on the conference call. ceo john donahoe saying they're

ramping up the innovation into that. when they looked at the revenue performance during the summer olympics, they see a several hundred basis-point lift entering the summer games. another potential catalyst for nike there. stock is up 1.5% here at the open. >> some few -- a few constructive calls. rosenblatt on spotify. they double their target from 150 to $300. they go to buy. of course, last week brought the news of the layoffs. some 17% of spotify's workforce, despite the fact that the shares have done extraordinarily well this year. >> they say that could be read as scary or promising, what spotify sees. could foretell a surprising slowdown, for instance, in sales growth, but they take the other side and say that if sales are strong, then this is going to be very good for earnings and for margins and so they upgraded it to $300. that's still a big climb, about 50% up from where we are right now, even though, as you say, spotify has already had a 150%

up year. did want to hit harris, if i can. sometimes there's activism that we don't report on, in part because it happens behind the scenes, in in this case, that appears to be what happened. l3harris named two new directors though their board. the former chair and ceo of geldwin holding but also cooper industries, which was sold to eton under his watch. and as well, bill swanson, retired chair and ceo of raytheon, who's 74 years old. he was ceo of raytheon from 2003 to 2014. chairman from '04 until he retired as well in '14. so, you got two new directors there, and it appears as well they've entered into a cooperation agreement with de shaw, which they say is currently one of the company's largest investors, pursuant to the agreement, de shaw and l3harris will agree on one additional independent director

to be added to the board next year, and as a result of that, de shaw has entered into what they call customary voting and standstill projections, but they were involved in exxon the first go-round there. they were involved in fedex. they were involved in lowe's sometime back, and l3. so, wanted to note that. shares actually ticking up a bit on that news as well. they will now have 14 directors, 13 of whom will be independent on the l3harris board, sara. >> it's the second best performer in the s&p. the first is krocigna, which is soaring up 14.5%. we mentioned the abandoned deal for humana. investors appear pleased with that, at least on the cigna front. >> no doubt. it was one of those situations where, frankly, everybody was like, where did the leak come from? why? who knows?

it wasn't -- to me, i have no sense as to where or why, but "the journal" reported again a number of weeks ago that they were in talks. it did appear those talks were designed to have cigna acquire humana. given their credit rating and their debt capacity, a lot of it would have had to have been stock and as we reported, shareholders were very much opposed, at least some, the ones i spoke to, very much opposed to the idea of a stock-based deal under which cigna would have done that, and they're very happy now that the company has changed its tack and going to be devoting a lot of its cash flow to buying back stock, which, as you just said, sara, they're doing, and also a lot of it in accelerated repurchase that will take place as soon as the first quarter of 2024, carl. >> there's been a lot of succession news the last couple of sessions. on friday, you had chip bergh leaving levi. spotify's ceo. the crown castle ceo.

stephanie pope being called the front runner to be the next ceo of boeing. we got shake shack. randy retiring in '24. they do reiterate their guidance. we're going to talk to him this morning in the 11:00 a.m. hour, which is now called "money fooufrz." >> very exciting. new launch of a new name. and yeah, we're going to talk to ran randy and danny meyer together. shake shack has had a good year. it's not just about the consumer's health but about expansion plans. a brand that has very aggressive plans to expand in places beyond just jfk, where they have about a thousand of them. >> when you think of money and movers, i think of you two. immediately. >> i thought you were going to say shake shack. >> i think of carl and sara. >> and the guests that we interview. they move money. >> they do. they move money. they move factors. >> that's the whole thing. >> i wish they'd gone with my idea, "seven stocks."

>> that's what you want? >> i want an hour dwoevoted to seven stocks, yeah. >> how can we talk about dollar/yen. >> it's related to nvidia somehow. one of the seven stocks. can we talk about the seven stocks? >> they're not up today. they're down today. >> they're down rather sharply today. >> apple gets a lot of analyst love, but it is not helping right now. >> it's just fallen below a $3 trillion market value. but again, look at the move. well, that's the magnificent seven overall, not up quite 100% for the year. and apple as well. but you can see all down. they rallied, though, last week. >> yeah. and today, td cowen names nvidia one of their best ideas for '24. target of $700. they name snow, another best idea. interestingly, we are going to get switchouts in the nasdaq 100. look at names like ebay today. >> it's leading. >> lucid, zoom are all getting cut. and then names like dash and

mongodb getting added with positive gains this morning. >> the nasdaq 100 is up 48% year to date, which i think tells you the story. nasdaq composite, which is a little broader, but also encompasses a lot of these names, up 37% year to date. and there's the a.i. tailwind, which we do wonder how much will carry into 2024. if it's a lot of the good news is baked in. i think it's hard to tell, right? we're going to start to look to monetization of a.i. in names other than just nvidia and microsoft. >> we are. >> we've seen that. >> we are. and then, the larger question, sara, that i know you're going to be following and we'll talk about for years to come is the productivity gains potentially that will -- that are expected to come or how much will come from the implementation of various generative a.i. software within the enterprise. >> across industries. >> across industries. >> is it going to help energy companies? is it going to help financials?

if jim were here, he would note the move in financials which was higher this morning and has been flexing strength. financials, as a group, he says, obviously is good for them and good for overall economy. industrials are up today. little bit of a cyclical bid, despite the fact that tech is down and yields are up. i think as long as yields don't spike or get out of our range, then the market can continue to do okay and that's what we're seeing today. >> all right. time for a faber report. >> let's get that picture. >> roll that new animation, everybody. look a little befuddled in that picture, don't you think? like, hm, i don't know. >> you look like you're about to make a call. >> you know what? by the way, i've gotten a couple calls back that would have potentially helped me with this current faber report. it's on paramount. i'm also going to have something at the end on the endeavor sale process, so stay tuned for that. let's start on paramount. it was friday that sara and i were on air when i talked about finally having to make some phone calls because reporting had indicated at least there was

a good amount of action around the idea specific to david ellison and sky dance and red bird, the private equity firm, the potential purchase of national amusements, control position in paramount. what can i tell you at this point? the stock moved up a lot on friday. you can see it's adding a bit to its gains right now, and you know, again, i may have even more based on a couple of callbacks that i have gotten, but at this point, based on a number of conversations with people in -- close to the situation, it does appear that the level of conversation involving paramount in some way and its control shareholder national amusements, led by shari redstone, of course, has increased. it does seem to be more conversation. there have been no offers made of any kind at this point. and you know, for those of us who have been covering this company for so long, sometimes it's hard to gauge conversation leading to offer or how serious things are. but this does appear to be a bit

more serious than in the past, perhaps. whether or not we actually get some sort of an offer and/or potential deal, perhaps we'll have to wait and see if the next few months. i said a number of times, and i think there's a general view that 2024, when it comes to consolidation is viewed as an important year, and when i say that, i'm talking sort of old media consolidation, the amount of money being spent on streaming by the likes of paramount or warner bros. discovery or our parent company, comcast, with peacock. there are those who believe that's got to come to some sort of end here, and consolidation might be one way to make it more palatable. whether or not you see a deal remains unclear, and what the structure of said deal might be is also something that's yet to be fully determined. certainly, shari redstone could decide to sell her control stake at a significant premium, and if you're sky dance and david

ellison, backed by red bird, that might be a transaction you were focused on, partly because its relative size would be smaller than buying all of paramount. but it would also bring its own set of challenges, namely, you do that, then you want to merge sky dance into paramount but it's a third party transaction that's going to require a special committee. anything you did or at least anything of significance in terms of changes at paramount, in terms of assets, would probably be or require a special committee. it's burdensome. it could take a long time. it could be difficult. there are those who say, you might want to consider buying the whole thing. there's not that much interest in all of paramount. would you be able to pluck out the studio? that's kind of a key question. and it's unclear whether that's the case. otherwise, you got to buy the whole thing. would netflix be interested? they might be.

would our own company or warner bros. discovery? certainly, paramount on its own has value, but a lot of companies don't want to take on the linear cable networks. warner bros. discovery would appear to be the only true operating company right now that could make a whole-company offer without a huge amount of regulatory burden on it. the question there is zaslav has been taking down the leverage. would you want to reverse course there? you would be able to take on a streaming service, the losses of which are lessening, and you could cut those significantly, if in fact eliminate them entirely, make your own max offering more robust, but you would still be getting bigger and linear cable, which is the last thing your investor base wants. so, you know, i guess i say lack of clarity. it does appear that shari redstone after october 7th and that horrific attack from hamas and israel, where she's had a lot of focus in terms of her charitable work, has become even more involved, and some have described it as a turning point for her in terms of how she may want to spend her days from

here. and so, that does lend at least some, i think, sense that, you know, maybe there is more to this, this time around. do keep in mind there's all sorts of other things. double triggers on their debt, change in control. if they were to get downgraded, you'd need to refinance. that's not something that would be easily accomplished. we'll be following it and following it closely. certainly next year does appear to be a key year when it comes to potential consolidation as you take a look the a redstone. real quickly, guys, on endeavor, that's a deal that is out there that we know there's interest from its 70-plus percent voting shareholder, silver lake, but i got a quick update for you, because we came in today, some people were hoping we would see an announcement of who the winner was on u.s. steel and we might even see an endeavor deal. here's my quick update. they're not close.

they're not close yet. there's still due diligence going on from silver lake. they have not discussed price. they have not set up a special committee yet because, of course, no offer has yet been made. the business-by-business due diligence from silver lake continues. for those who had hoped this would wbe a year-end deal, that does not appear to be the case. perhaps a bid is made before the end of january. there's a quick update on paramount and on endeavor. >> all right, david. bit of a mixed bag this morning. dow has lost some opening gains. let's get to bob pisani. >> six-week win streak for the s&p. we'll see if we can continue that. 52-week highs here. lot of momentum across the board. just take a look at some of those sectors that have been strong. the bank stocks have been terrific. highest level since the banking crisis in march. cathie wood's ark fund is up.

reet stocks have been moving up. all interest rate sensitive sectors have been doing well. look at momentum leaders. bombo boeing. home builders are at new highs. simon property group was at a new high. we saw some of the regional banks like fifth third move up. fedex was a new high on friday. ingersoll rand. for the week, as i mentioned, new high on friday for the s&p, but when i talk to people about the biggest risks, some people think bad inflation print with the cpi might be a problem, but most people think that the biggest risk right now is overall the issue with where the federal reserve is going to be doing and what they're going to be saying. a lot of people think powell is going to push back against these expectations of a rate cut next year. very heavily. and that could be the biggest risk to the markets right now here. so we're going to be digesting all that cpi and ppi data. we have a ten-year treasury

auction today. finally, sara and david were talking about cigna adding $10 billion into their buyback after abandoning the humana deal. this has not been a great deal for for buybacks. we've seen $780 billion. normally, in the last few years, we have been doing 800 or $900 billion in buyback so that's a little bit below what the normal numbers that we see here. the important thing is cash flow, and cash flow has been decent, but we are seeing some issues, of course, with lower rates, and higher rates this year, the first part of the year, i think definitely affected where buybacks were doing overall. the important thing right now is whether or not we can continue to see buybacks low and cash flow high. if that happens, i think in 2024, we're definitely seeing a rebound in the buyback scenario. guys, back to you. >> thanks. see you in a bit, bob pisani. as we go to break, let's watch bonds. elevated today, ten-year back to

4.26%. last week, we got into the 4.15% range. not a lot of data headed our way today, but that's going to change tomorrow with cpi and the fed decision on wednesday. holding 4,600, though, on the s&p. 4,605. don't go anywhere.

watch meta today. we were talking about the magazine seven a few moments ago. bofa names it a 24 best idea in large cap and point out the ongoing monetization of reels, under appreciated ai capabilities and ramping monetization of their messaging assets. we'll keep a close eye on it thheow up 22. we'll be back in a minute.

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it restores a lot of faith in humanity. petroleum. microsoft announcing a new partnership with the afl-cio. eman javers has the latest. >> a big labor deal happening in the room off to my left here at afl-cio headquarters in washington, d.c. microsoft and the labor organization announcing a new partnership here that they say is designed to focus on worker

rights and responsibilities in this new era of ai. the fear of massive unemployment related to ai is what they're addressing here in the room. specifically the two organizations say there are three elements to this partnership. here's what they say they're going to do in the coming months and years. they're going to share ai information between labor leaders and workers, so that envisions a series of educational seminars by microsoft officials to labor organizers to help them understand the direction ai is going and going to incorporate worker perspectives and he can expertise in the development of ai technology at microsoft. that envisions feedback from workers using ai to the people developing the product as well. they're also going to talk about helping to shape public policy that supports the technology skills and needs of frontline workers. that is the overall policy environment in this country in terms of ai and workers. obviously, guys, we're coming off a very big year for big

labor. a couple labor leaders in the room here for this announcement. uaw's shawn fain here coming off a win for his workers and representatives of sag-aftra are in the room today as well in the wake of that hollywood writers strike, so there's a lot of mobility here behind big labor going into the end of 2023 in this era of low unemployment, they're determined now to make sure that that era of low unemployment stays in place in the era of ai. >> looking back to senator schumer where they invited randy wine gart been of the teachers union and i can't decide if this is theatrical or trying to help labor drive policy long term. >> well, i think it's both. liz schuler president of afl-cio says she was at the ai on capitol hill and elon musk and the other likes of ai. for microsoft this does help in terms of publicity around its ai

efforts to say we're not trying to kill jobs. we're trying to work with labor. you know, there is a theatrical element to all of these and we're seeing some of that in the other room right now. >> especially with questions about whether ai will replace labor. thank you very much, eamon javers. when we come back, wharton professor jeremy siegel on his outlook for stocks riding the six-week win streak as the markets hang in unchanged, the dow down 4 points, s&p little changed. that is masking some of the strength we're getting in certain sectors. for instance, consumer staples, health care, industrials and financials are all higher. we'll be right back.

. good monday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber, live from post nine of the new york stock exchange. you probably noticed our screen looks a little bit different today, part of our new look at cnbc. we're excited to bring it to you. information and data, might feel and look different, be in a

different place than the last time you joined us. over time we are hoping it makes it easier to understand the markets and the stories that we are bringing to you. let's turn now to the markets and show you what's happening. at the index level not a whole lot. the dow is kind of a little unchanged. united health, microsoft and apple are weighing on the dow, honeywell, am again and home depot helping the dow. a mixed sector performance right now. weakness in technology, strength and staples, health care, industrials and financials. treasuries take a step back after a pretty giant rally over the last six weeks or so. yields firm up, 10-year, 4.264. a bunch of issuance in the next few days. bonds over monday and tuesday we'll be watching the auctions. here are movers we're watching. a lot of m&a action. david's been busy. occidental petroleum announcing to buy permian pro to user

crownrock. raising the dividend. not particularly well in the market. the stock down 9.5%. cigna has abandoned its pursuit of humana -- sorry that was a year to date 9%. after a disappointing response from shareholders. the companies reportedly couldn't come to an agreement on price and other financial terms. cigna's stock down 10% since "the wall street journal" first reported that the companies were discussing a combination. and then watch shares of macy's today. surging double digits after news that company has received a $5.8 buyout offer valuing the retail at $21 a share. obviously, surging on that news. guys, it's a huge week when it comes to potential catalysts and events. we're going to get the -- i mentioned the bond auctions happening. haven't been as focused on it lately but last time there was a 30-year auction it was disappointing and caused trepidation and nervousness across the markets. we're going to be watching k

central banks. the fed is out on wednesday. bank of england and the ecb on thursday, some emerging markets central banks as well. bank of japan the following week. nobody is expecting to hike rates anymore. that marks a change. on the economic data front, cpi on tuesday won't get a fed reac reaction because they're in the quiet period in their two-day meeting. retail sales important as we try to figure out how strong the consumer is and whether we can get away with no recession. >> the general take lately it's pretty solid. we'll see the surveys indicating holiday spending activity continues to be strong. cheap gas is a big part of that. median price of gasoline is $2.99, first time since 2021. nat gas down 7% this morning, worst day since march. a deflationary effect when it comes to energy. china may be a part of that. cpi over the weekend down 0.5, looking for 0.2, the biggest

drop in three years. >> i'm glad you mentioned the deflationary read in china. ppi was lower and that half a percent lower on years on year number is a surprise and just fuels concerns about demand in china and what's happening there. it's also moving from goods to services in china in terms of the pricing pressure. stocks, though, turned around in china. they rallied on this idea maybe they're going to do something about it. we did get the meeting last week at the end of the week. no major headlines out of that, but i think comments suggest that they could be targeting 5% growth again next year, which means they might have to add more fiscal stimulus, although remember, we got the moody's warning on the outlook for chinese debt on this idea they are going to continue to fuel stimulus. china is going to be a question mark next year in terms of the economy and the markets. the chart i made for today was actually on u.s. inflation because we're going to get the cpi number, we're going to get the fed meeting. they've been targeting

inflation. no matter how you look at the inflationary numbers and this looks messy, but all you need to know is they're coming down. the disinflation is real. remember we were trying to figure out lightning has inflation peaked, is it really coming down? the trend is very clear. you look at everything from core cpi, which the fed looks at, to some of the regional indexes that track inflation, atlanta, cleveland, the sticky core, the super core, dallas median price, showing we're past the high point of inflation, but now could be the hard part where we get back down to target. some economists are saying we'll get there by next year. the fed in the last projections which came out in september don't see it happening until 2025 getting down to target. will they revise that because inflation has surprised in a good way coming in lower. that's going to be one of the questions this week. >> yeah. you know, earlier it said the big event is the fed meeting on your graphic but is it bigger

than getting the cpi number? which? >> it's a big event because we get the projections for rates for next year, which is going to be new and updated from their september thinking. we're going to get the tone from powell. he sets the tone. is he going to talk tough and try to reverse some of the financial conditions we've been seeing. so i think it's important because he will also be able to react to cpi. >> right. although if we get a hot cpi number the market will react to that. >> the fed might react to it too that's the thing. we have lower employment than expected. 3.7% was a surprisingly good number. wages going strong. and then a firmer cpi could lead the fed to talk tougher. that's one of the big risks for sure. >> fed meeting does come as the dow and s&p come off the fresh 52-week highs. nasdaq highest since april of 22. all three major averages with the six-week win streak. joining us wharton school of professor finance jeremy siegel with us. great to talk to you. that's not the professor.

we'll get to that in a second. the journal piece over the weekend saying the fed can't put off prepping for rate cuts because if you have productivity at 4 and wages are -- sorry productivity at 4 and wages at 4, that kind of puts you near target? >> yeah. you know, absolutely, and, you know, i heard roger ferguson, who i respect a lot, on the 6:00 hour, and he said oh, that could be a problem for some wages, but 4% wages is absolutely not a problem when you have 2 or 3% and you had over 5% productivity growth there in the third quarter. so, yeah, the unit labor costs have been going down, so that should not be a problem for the fed. i absolutely do advocate that they start thinking about lowering it. i don't think they're going to do it on january 31st, certainly, but they should think about uninverting the yield curve in their march meeting.

>> why do you think -- to what degree are the market's jitters about a warm cpi or pushback from powell r they justified to any degree this week? >> i think the dot plots are going to be hawkish. i don't think they're going to be right. i think they're going to be too hawkish, as developments do. but that could unsettle the market and we will have to see cpi and ppi. by the way, they've already submitted their dot plots so nothing that happens tomorrow, wednesday, going to change the dot plot. they are not going to move. that's not going to change either. you were right in talking a while back, it definitely would change the tone of the news conference on wednesday that powell does, depending on what two factors are. by the way, he has cover. the fact that unemployment rate moved away from the 4%, i think would have been politically not a good thing, down to 3.7, gives

them political cover in a way to be hawkish because unemployment is still under the 4% level which is called politically acceptable. >> speaking of politics, i've heard a lot of, you know, cocktail conversations, well, powell is going to cut rates more and going to do it faster next year because he doesn't want trump to get elected again. i notice that the fed is apolitical, they would never do anything like that, but there is an election and -- >> yeah. >> an election economy to be considerate of. >> that's right. >> fed policy or not, i wonder how that's going to impact the markets next year? >> you're absolutely -- the fed is a creature of congress. created by the federal reserve act. congress can take away any of the powers of the fed it wants to, and so, you know, they've got to be conscious. truth be known, don't forget, they still have dual mandates,

it's in inflation and employment. it's not like he's abdicating his responsibility. when we look at commodity prices, as you mentioned earlier, going down, yes, there's going to be some stubborn parts of inflation and core inflation, that are going to continue, but, you know, if you ask the american public what would you rather have, 1% left on the core over the next year or another half a million, million people unemployed i think the choice is clear. >> you think the market expecting 100 basis points of cuts, no matter what the fed forecasts in its dot plot this week, is more correct? >> well, take a look. you know, 12 weeks ago in september, a majority of the fomc said we're going to have another raise by december, by this week, and now that was wrong. that was just three months ago. so, you know, we're all going to take a look and shutter, oh, my

god, they're only predicting two cuts or one cut or three cut, but the truth of the matter is, do you think they're going to get it right over 12 months? when they got so wrong over the last three months? >> you know, want to talk to you about something away from the markets, but since you're at wharton the liz magill resignation, the penn president resignation, i'm curious what your reaction is to it as well as the chair of the board stepping down? >> yeah. i really -- i was very upset by the response. i think everyone was. it was more than tone deaf. she was given several chances to say genocide is unacceptable and not in context and when you say that, i see no way to survive. you have to go on. i'm not going to speak to harvard. i'm not at harvard or m.i.t., but it is a problem that has been encroaching the good elite universities for a long time,

and, you know, i think they've been called on it. >> you think something deeper is broken? it's a step to see her resigning, but i'm you ares you -- >> yeah. i think things have been broken -- >> yeah. >> i think the problem has got an lot worse over the last, you know, five, ten years. there are certain speech that is politically acceptable and other speech that is not, and they don't -- you know, you have to have a consistent policy on it. you know, maybe this will jolt the universities back into what they should have always been doing. i hope so. in any case. >> professor siegel, it's david. do you see a change in the classroom? do you think twice before you say certain things or no? >> i retired from active teaching two years ago, so i still do special programs at penn, but, you know, i have not seen any changes in the classroom.

particularly, wharton was not as affected as the other parts of the universe in terms of, you know, what you could say and what you could not say. i always felt it was a little bit freer than perhaps other divisions of the university. >> professor, appreciate you entertaining those questions with a thoughtful response. definitely -- >> thank you. >> a topic of discussion over the weekend. talk soon. jeremy siegel. >> thank you. as we head to break our road map for the hour, yields pushing back higher today. what the bond market is expecting from the fed and inflation and rates. plus, big pharma's fight against fraud. the big money involved and who is at risk. details this hour. and after the break, an exclusive you're not going to want to miss. delta's ceo ed bastion will join us live from the hope global forum in atlanta. we have a lot moresqwkn e re" "ua othstetfor you strai ahead. ♪

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welcome back to "squawk on the street." let's get to frank holland with a special guest this hour. good morning, frank. >> good morning to you, carl. we're here at the hope global forum, the event for operation hope a big event for financial literacy and wellness, and i'm joined by delta ceo ed bastian here to take part. you're going to be doing a panel in a short time with john hope bryant to talk about delta's programs. thank you so much for being here with us. >> great to be with you, frank. thank you for support to operation hope. it means a lot.

>> i want to talk about your support for operation hope and what you're doing to support your employees. you're launching a financial wellness program for your employees where employees can be given, earn $1,000, if they go through one financial wellness track. explain what you're doing and why you decided to do it? >> one of the things that we learned about the world during the pandemic is our focus on wellness was never more important. we want to make certain as we're coming out of the pandemic we're taking the very best care, not just of our employees' physical health, emotional well being, their social well being and their financial security, and the issues around financial insecurity kind of sit at the foundation of a lot of other issues as well. there are a couple stats that are prevalent out there in terms of the lack of americans who have the ability to handle a financial emergency. one in four americans do not have any capability to handle any kind of emergency on a financial standpoint, and over

57% of americans do not have a thousand dollars they can put their hands on in the time of an emergency at this point in time. when i saw those stats a couple years ago, i talked to jon and we said we need to do something about this. i want to make certain none of our 100,000 employees at delta are in that condition, and so we instituted this wellness -- financial wellness program we're going to be unveiling the first year results that we've seen. we launched at the beginning of the year. we've had over 30,000 of our people have signed up for it. if you sign up, you take the financial training for financial literacy, sign up and finish a track with a coach you get $1,000 put in your name, no strings attached, soto handle any financial emergency you want. 20,000 of our people have concluded that. >> delta a part of operation hope's financial literacy for all program and you're a proud member of that. i want to talk about your business now. we're in the holiday season right now. give us a sense, what are you seeing when it comes to holiday

travel and expect as we get closer to the end of the year, where we have christmas and a lot of new year's travel? >> as many people that were traveling during the thanksgiving break saw, people are continuing to travel and the demand for travel keeps going. we saw more travelers during this thanksgiving break than we've seen in our history, not just thanksgiving, but for any week of holiday peak travel. we broke the tsa precovid level, the operational performance of the airline was amazing. for the ten-day period around the holiday, we had 50,000 operations that we launched. we had less than 20 cancels. over 90% on time arrival. that demand has kind of now getting us set for a christmas break that's going to be equally as busy. >> you reaffirmed your full-year guidance. one part of reaffirming the guidance was talking about business travel. what are you seeing when it comes to business travel? we had the pandemic, ground nearly to a halt. we've had the rise of hybrid

work and zoom. what's the state of business travel? >> managed business travel, which is the traditional business travel, continues to improve and post the thanksgiving break we saw another step up, maybe another incremental 5%, so the volumes continue to work their way back. we're probably somewhere about 20% below where we were precovid levels on managed business, but the thing that people miss is that while people aren't traveling for managed business, they're traveling on their own at a higher level because mobility has been at a premium because of hybrid opportunities to travel and work and bring your office with you. in aggregate, my view is business is far above anything we ever saw precovid. we're just managing and looking at it differently today. >> let's talk about international travel, a higher margin gis best for you. we've seen a lot of geopolitical tension, the israel-hamas war or other issues around the world. how is that impacting your international travel business?

>> international had a great year, and i think coming off in '24 it's going to have a strong year. people had three years to plan their trips and when they got the green light to go internationally felt comfortable going and they went. we're watching what's going on with ukraine. we're watching what's going on in the middle east and the challenges that presents. people are relatively resilient in terms of travelers and we're watching with a questionry eye and don't see pullback. >> sky miles. you made changes and changed them back. what kind of response are you getting for your sky miles program and feedback from your customers? >> we made changes and then modified the changes and i think we're in a pretty good spot now. we have more premium customers than any airline in the world. we've seen such a continued demand for our product. it's out stripped our capability to serve effectively. if anyone is in line standing at

the sky club no one is effectively a premium. we needed to make changes. i hated making some of those changes -- >> are you done? >> we're done. >> this is it from now on? >> this is it as far as i can tell. i think what we wanted to do is we wanted to enable our premium customers to have a premium experience on delta and that's our goal. we're continuing to build more. more clubs coming, more premium seats coming, more premium lines for travelers to call into, but until we can get caught up on the supply side we had to do something on the demand side. >> i think a lot of people want their status. ed bastian, those changes very interesting. everybody back in the studio, tossing it back to you. >> i will take it, frank. thank you. thanks to ed bastian as well. let's go to a quick break here, but check out the biggest laggards thus far this morning. what do we have? almost an hour of trading. meta leading that. you can see paramount as well, giving up a bit of the gains that it saw on friday on those stories about conversations.

we talked about this morning as well. they are conversing. no offers have been made. next year certainly early in the year will seem to be crucial for the future of that company. we're back right after this.

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welcome back to "squawk on the street." i'm dominic chu. it's a relatively quiet start for the week for stockswith the s&p just wavering between positive and negative territory so far this morning. we are taking a closer look at the energy sector on the heels of another big m&a deal in that sector. the occidental petroleum is buying crownrock which operates in the west texas permian basin, worth roughly $12 billion and will be largely financed through debt and common stock and add 170,000 barrels of oil production a day to occidental. occidental is also hiking its quarterly dividend to 22 cents a share from 18 cents beginning next year. shares of occidental right now higher this morning.

elsewhere in energy, natural gas producers under pressure that includes names like williams company, also eqt, one oak, target resources, producers, pipeline operators. those moves come as natural gas hits their lowest levels since june. oil prices are slightly lower after being both wti and brent posted the seventh weekly decline. west texas intermediate trading below $71 a barrel and brent $76. keep an eye on the oil and gas prices and the stocks. i will send it downtown to you folks at the new york stock exchange. still to come, stocks are riding the six-week win, as investors turn their attention to cpi, the fed, in the week ahead. jpmorgan asset management head of fixed income strategy will talk about where he sees yields gog omerin meninfr he aomt.

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welcome back. i'm silvana henao with your cnbc news update. rudy giuliani will be on trial today in a georgia defamation case involving two former election workers. he was already find libel for defaming them when he said they committed fraud in the 2020 election. the jury will determine how much rudy giuliani will have to pay the workers in punitive damages. their attorneys say they are seeking anywhere from 15 to $43 million. the supreme court won't hear a challenge to washington state's ban on conversion therapy for people 18 and under. the law basically makes programs trying to change a minor's sexual orientation or gender identity illegal. a licensed family counselor in the state claimed it violated his speech and religious rights. "barbie" and "oppenheimer" are leading the nominations for the golden globe awards. "barbie" named 9 and "oppenheimer" brought in eight and "succession" led with nine.

the awards ceremony is set to take place in los angeles on january 7th. breaking news this morning from washington. let's get to emily with that. >> [ inaudible ] a panel has been served subpoenas to vanguard and capital for documents related to an investigation on whether efforts to collaborate on priority is is a violation of antitrust law. they're part of a wider investigation from the house judiciary committee headed up by republican jim jordan. in letters that vanguard -- sent to vanguard with the subpoena wrote that vanguard quote appears to have entered into collusive agreements to decarbonize assets under management and reduce emissions to net zero in ways that may violate u.s. antitrust law. a similar letter sent to arjuna capital as well. jordan said in the letter that he believes documents the

committee requested are still missing. in the past year jordan has subpoenaed several organizations including glasgow financial alliance and sustainability nonprofit. he's requested information from asset manager giants black rock and state street. it related to this investigation of antitrust at esg. neither companies have gotten a subpoena. we'll see where this investigation goes. it does seem headed into the next year where republicans will continue to control the house. back to you guys. >> emily, what -- can you explain what is at the heart of the antitrust allegation when it comes to the esg policy and/or focus of these asset managers? >> so part of it is that a lot of these asset managers have gotten together in various groups with goals to really be able to reduce carbon emissions and what jordan is making the case for is saying look, these groups get together and try to implement these policies but this is hurting sectors like oil and gas and how they're acting

might be in a way that violates some of the antitrust laws. so that's kind of where this investigation entirely circles around. there have been other cases made, certainly house republicans are not the only ones that have tried to equate esg pushes with antitrust. we'll see where this goes, carl, as far as whether they are really able to make that case. >> all right. certainly making -- taking a stand. thank you very much. emily wilkins in washington. make or break week when it comes to rates, yields an the fed with the dow and s&p at 52-week highs. jpmorgan asset management global head of fixed income strategy bob nichelle joins us here at post nine. is the fed going to mess this up, bob? >> i don't think so. i think they want to go out of this year fairly balanced. they don't want to be too dovish and create too loose financial conditions, but they also don't want to be too hawkish and

create too much downside here. they're going to try to thread the needle. >> that was the message we got from powell before the blackout period, right, that there are risks to doing, you know -- the riskses are more balanced to over tightening or under tightening, lags, and that we haven't felt the full effect of monetary policy tightening. you expect a similar message or benign? would that be a green light to keep buying everything, bonds and stocks? >> look, the long and variable lags are always questionable when they'll hit. what we do know is that we're in nirvana right now. this is as good a soft landing as the fed could have taken us into, so i, for one, am going to enjoy it. if bonds back up in yield i'm out buying. i think this could be a good week for this. you get cpi and auctions and the fed. maybe we'll be able to buy bonds a bit cheaper. >> you're not worried about those event risks as far as the disruption to the bond rally? auctions, cpi? >> i want a little bit disruption, maybe get the

10-year towards 4.5 to allow a lot of investors to get in. we talk to a lot of investors, institutional and retail, they're all trying to get into this bond market. everyone wants to buy at a higher yield. it came and went in october so quickly. now we've got a lot of clients that are trying to chase this. >> how long does nirvana keep up for and what in your opinion is going disturb that? most likely to disturb it, i should say? >> i do think that there is a rate shock that's been delivered to the system, right. we've had over 500 basis points of rate hikes. it's left things in a vulnerable position. we're seeing housing has cooled off pretty dramatically. we're looking at the consumer, which is the engine of the u.s. economy, and the bottom four earners have burned through their excess savings. unless the fed is able to find

an opportunity to bring down rates over the next six months, i think the high level of real yields is what could create more damage going forward. >> there was a lot of forensic work done on the jobs number from friday. basically arguing that we owe much of the this to government, private education, health care and leisure hospitality. do you think that ex those things, they're big pilars, that the job market has slowed to a crawl? >> it has slowed, and also you have the returning strike workers. what we like to do is loonkts a look at a six-month annualized rate, that's about 130,000 job creations, which is much different than close to 200,000. then we went back to 2017, 2019, tried to get out of the shadow of covid and we found job creations were about 164,000. in fact, the labor market is cooling off. you still got wages running at

about 4%. the fed would like to see 3.5%. but all of this are sort of the elements of a soft landing. >> well, there are two ways that that that narrative breaks on the risk side. inflation spikes back up or flares back up or the economy weakens worse than expected, negative payrolls or retail sales prints. which do you think is a bigger risk at this point? >> of those risks, i think to the downside. i think the -- >> on the economy? >> on the economy, for sure, and i think what's kind of slipped through the cracks here is quantitative tightening, and the fed continues to draw down its balance sheet. of course when they were expanding their balance sheet and creating money, it got into everything and inflated the price of everything. you would expect that you would see more disinflation and deflation coming as they draw down the balance sheet and a good starting point is asset prices.

>> yeah. i can't -- i hear two versions of this one, where one, the trend is going down, it should hurt more in terms of asset prices in the economy. on the other, we're still -- the balance sheet is still a few trillion dollars very historically high levels. >> yeah. we looked at the level of gdp and nominal dollars, and headed into covid, the u.s. was running at $22 trillion. today it's at $27 trillion. that $5 trillion is where we should have been four years from now, so that's how much was thrown into the system. of course, that's on a nominal basis in terms of dollars. all of that created higher price levels, and that's what the fed is trying to bring out of this system. >> yeah. >> it's till there. it's still sloshing around. >> thank you. bob nichelle, great to talk to you from jpmorgan asset management. inside the world of

counterfeit drugs and how pharmaceutical companies are fighting fraud across the nation a special cnbc investigation is coming up next. .

pharmaceuticals company fighting fraud across the nation perpetrated by criminals who tamper with life-saving drugs. who's in on it, pharmacies, wholesale distributors. in one scheme hundreds of millions of dollars were stolen to siphon off profits from big pharma and stick taxpayers with the bill. here's contessa brewer with a cnbc investigation "fraud in a bottle." >> reporter: at the casino cage wads of cash in hand the security camera captures a real player, a larger than life gambler. with posts from luxury boats and private planes, lazaro hernandez fashioned himself as a

high-flying, high roller. turns out, he was the mastermind of a $230 million drug counterfeiting operation. these thousands of bottles were all originally prescribed and filled for patients. now they fill an evidence room at gilead sciences in northern california. every single bottle was discovered in a complex criminal drug diversion scheme. >> we are playing a bit of a game of whack a mole. >> reporter: lori fights to find the counterfeits every day. she oversees global product security at gilead which monitors biktarvy. >> we know upwards of 80,000 bottles of counterfeits were enter today the supply chain. >> what would those be worth if someone was paying retail price. >> those bottles would be about $230 million. >> reporter: here's how drug diversion works.

a patient fills a precipitation for a medication worth several thousand dollars but turns around and sells it for a fraction of that in cash. the buyer, known as an aggregator, removes the patient information, alters the bottle, then sells it to a wholesale distributor who sells it back to the pharmacy at a discount, so the same bottle re-enters the supply chain. this bottle doesn't contain pills, just rocks. >> all they need to do is make the sale and that's what they care about. >> reporter: this man, let's call him julio, who agreed to an interview if we concealed his identity, said it was easy to persuade patients to sell their bottles. >> they had aids, cancer, and they don't have any money. so for $100, $200, they'll sell it every day. >> they will forgo the medication an won't take the medication. >> they won't take the

medication. >> reporter: licensed distributors buy from aggregators like julio, sell to the pharmacies an give the whole process the sheen of legitimacy. >> they're a critical cog in the scheme. >> reporter: the distributors have relationships with thousands of independent pharmacies across the nation. steven mackmoot is an agent if charge at health and human services office inspector general. >> the pharmacies are on the receiving end of the diverted prescriptions. do they know? >> some do, some don't. medicare pays out to pharmacies a lot of money for these drugs because they are expensive and life sustaining. >> reporter: this hidden camera video has never been seen in public. shot by an undercover informant it shows a woman, her husband and son, cleaning prescription pill bottles in an apartment. >> the video in the middle appears to be lighter fluid,

using that lighter fluid, a harsh chemical, to clean the bottle and remove the pharmacy prescription label. >> reporter: gilead sciences and johnson & johnson have sued distributors and pharmacies throughout the country and their investigations and litigation are still unfolding. these three were convicted in connection with the prescription drug counterfeiting operation. lazaro hernandez's jet-setting days ended abruptly this year. he was convicted in the $230 million drug counterfeiting operation. he pled guilty to conspiracy charges related to distributing adull ter rated and misbranded drugs and money laundering and serving a 15-year prison sentence. and you know who has largely escaped any kind of responsibility here? the wholesale distributors. none have been criminally charged, though the ceo of scripps wholesale based in brooklyn was indicted in june for buying more than 150 million

worth of prescription hiv medication which had been illegally diverted. prosecutors say he turned around and resold it to pharmacies. he's pled not guilty and his attorney declined to comment to cnbc. >> what are the sentencing guidelines and is there an effort to toughen them up? >> they're trying to go after the linchpin here because you can have all of -- like, for instance, hjulio, he was convicted in the scheme, he's gone clean, those days are lined him. he served time behind bars. he's the aggregator. he's offering people 100 or $200 on the street. if you have the big distributors who are licensed to sell these medications, lots of them, it muddies the water a little bit. you can't send a company to jail. you can send the boss, the ceo, to prison, but they really are the linchpin here and the investigation, so far, have not been able to thoroughly bust the

distribution process. >> can the drugmakers do a better job at, i don't know, tracking their own pills? like puttinging? t -- putting in them? >> i asked about rfid. they said the process which you could have one bottle be tracked thoroughly is in the process, but they have paperwork that's supposed to go with every shipment that you're supposed to see that it comes from gilead, it goes to a licensed distributor, and then to the pharmacy. but what's happening is, even the paperwork gets counterfeited and made up and the documentation isn't valid. >> to be clear, the original patients are covered by insurance so that's why they're incentived to potentially sell. >> or medicare. >> right. they're getting paid cash. but you had rocks in one bottle or oftentimes are the pills still in the bottle? >> sometimes it is actually the medication that has been prescribed, but the labels have

been messed with or the patient literature is fake or what they call counterfeit. anything that falls under this tampered with, gets called counterfeit. the interesting thing is, they even found -- this is what alerted gilead in the first place -- they got alerted by hospitals, hey, we have people who were supposed to be on hiv medication and they were on medication for bipolar disorder and had a bad reaction. why you would replace seroquel or biktarvy with seroquel doesn't make sense to me or why you would put rocks in the bottle. sometimes the aggregators are only buying the bottles. they will say i will take your empty bottle and pay you $30 and fill it with something to put it back in the system. >> now you're talking about something that can be dangerous and life threatening. >> absolutely. the one thing, my takeaway from this, for everybody, because even in a legitimate pharmacy with a legitimate drugs, mistakes happen. when you get a prescription, it's always smart to go through and double check online is the

pill that i'm about to take actually what's been prescribed. >> there is a stamp and they are numbered. >> that's right. >> how widespread is this really? >> well, hundreds of millions of dollars and that's just by gilead ad human services and the fda looking into other kinds of there's looking at, for instance, ozempic, which is so in demand right now and so easily counterfeited. people, what, i can get it at a discount? let's go for it. buyer beware. >> good investigation. good findings on your part. contessa, thank you very much for sharing. still to come, netflix betting big on live sports, but will it pay off? the shares up more than 50% since january. we'll discuss that next.

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take a look at shares of shake shack are soaring.

long-time ceo who oversaw the company's ipo is retiring next year. he will remain with the company in an advisory role next year. shake shack is saying korn ferry is leading the company for a successor and will be led by danny meyer. danny will join us on "money movers" to discuss this transition and change. danny has been with this company -- i think he was hired 24 years ago for one of his restaurants and really helped shake shack get borne and expand to what it is now. hundreds of stores. took it public back in 2016. it really is a changing of the guard. >> this is a nice gain, 9% for shake shack. back to early june as they reiterate -- actually, september, as they reiterate the guidance and what's been an interesting week for restaurants in general given some of the mcdonald's guidance last week and the willingness to step out

and try it get some share. especially in qsr. >> i think that takeaway from mcdonald's is they're thinking more aggressively about restaurant expansion. they had some aggressive growth targets for how many stores, how many loyalty members they want -- >> new concepts. >> yeah. market seemed to like that one as well. >> another story this morning as netflix is leaning into live sports, announcing its next event this morning. it's going to be called the netflix slam, a special one-night tennis exhibition headlined by rafael nadal and alcarez. they hinted at events like this earlier this month at a ubs media conference saying they'll be focused on boosting popularity of leagues by story telling and drama of sports. a lot of that started -- i don't know about the exhibition or what's at stake but a lot of that started with f1. >> they did this crossover event

in las vegas with f1 players and pga players in a golf tournament that was live on netflix. i think the results were okay. you can never tell because netflix doesn't share audience numbers. but there wasn't any big mishap like they've had in the past with some live tv. >> the bigger question for companies such as netflix and even more so apple and amazon when it comes to sports, carl, is the bigger leagues, the nba contract, for example, right now is a focus of many in terms of who can afford what and how big will the streamers come to play in terms of amazon, apple and/or netflix not so much, they've been more focused on events like this. >> it's so interesting. for all the things they swore they would never do, gaming, password sharing, advertising and live sports. >> they're capitulating. >> all four are in full display right now. >> in a kind of netflix way. i think the drama they want to do, drive to survive, full

swing. they do have shows behind -- >> you have to be willing to change, just like we do with our graphics package. >> we evolve. real quickly on an endeavor, significant decline. the last hour on endeavor, it's for sale, silver lake, the only buyer controlling the company, as it does, but they haven't talked price or haven't made an offer, there isn't a special committee formed. they are doing their due diligence and probably focused on equity for said deal. a deal, if it comes, would be towards mid to late january. we'll keep an eye on this. you can see that stock has reversed. that does it for us on "squawk on the street." we've got a lot more coming your way with carl and sara after is. if your business needs a new application then developers will have to write code. a lot of code. if an application needs to be modernized then you'll need time, resources... and caffeine. if this sounds daunting then use watsonx code assistant

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curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab. good upon morning. i'm carl quintanilla with sara eisen live on the floor of the new york stock exchange. you might notice our screen looks different. we do hope our new layout will make it easier to break down the news for your money. >> that's not the only change on your screen. this hour is now