good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin. joe is out today. let's look at what is happening in the u.s. equities at this moment. you will see in a moment we he bring the charts up, the dow futures are indicated up 50 points. s&p up a point and nasdaq up 28. you see the green arrows, a andrew, after the gains yesterday. the dow closed highest since january of 2022. the s&p at its highest level since march of 2022. we have seen what is going with treasury yields. it looks like the ten-year note

is yielding at 4.2 8. and bitcoin dropping below $41,000 yesterday. let's talk about the federal jury. what a case. google's app store protected by anti-competitive barriers that damaged smartphone users. the jury siding with epic games. the lawsuit filed three years ago alleging the powerhouse has been abusing its power. shielding from competition. apple prevailed in a similar case which is under appeal at the u.s. supreme court. we will talk to steve kovach. he has been covering the story for us. we will talk to him in 20 minutes. >> this is a big deal.

>> this could have ramifications for apple. we debate the app stores for a long time. >> they were able to point at something, i forget the name of it. google hug or something along those lines where they were giving special deals to some apps. whether it is netflix or spotify to keep them on the app to go through the issues. that may be the difference. it is one thing to say you are a store and everybody gets the same treatment, but another to say we are doing those things which is the anti-competitive behavior. we give advantages to x, y and z. >> it doesn't make sense. this is my opinion. there are certain products you want in your store that you will discount or you will take a lower margin on than other products. certain products get people in the store. is it razor blades and handle

theory which is the case? i don't know. i don't know. >> that was my point. >> if you are treating one product or category different than another category unto itself is anti-competitive. it goes back to the idea if you believe these are utilities -- there is an argument to be made. at some point in life, two brands. maybe they are you t utilities. these are the only stores in the entire universe and they are so successful and from the public utility, it should be thought about like that. if you get there, it is a different world. >> that's been my view as a former retail reporter. are you actually that big? there are two stores in town and that's something to look at differently. the jury only deliberated four hours before they came back with the ruling. i dpes on appeal and you wonder what happens if there is a

higher place to take this to, but this caught a lot of people off guard because epic was not successful. >> what is interesting about that is a judge made that determination. >> the judge versus jury. >> legalistic view of the universe and anti-trust laws. when you get to the jury, it is as much as emotional view of the company or how you think of it. >> the jury settlements are much higher than judge settlements. in this case, they are not looking for a payout, but the structure to be changed. this does really raise a lot of questions. you notice that apple -- google did not sell off very much on this. it could be a couple of things. people think it will be overturned or this is not such a major business line for google. >> it is a funny situation. you can side load anything on to a google android phone.

it actually is an open phone. also it is what makes the app store argument against them stronger. if i was on the jury, it is different. apple, different story. i've gone to the idea when i buy this product, i'm buying the whole product. i want the app store and ecosystem. i'm happy with that. >> i want them to control music and photos. we'll see. ford is cutting plant production of the all-electric f-150 pickup truck in half next year. it is a major reversal after the automaker ramped up plant examine capacity this year. it plans to produce 1,600 trucks a week which is different from the 3,200 trucks planned. it will match customer demands. that tells you demand is thnot

what it anticipated. phil lebeau will join us later to discuss this decision. and hasbro's ceo expects challenges to continue into next year and as a result, the company will cut 1,100 jobs after the 800 jobs already cut this year. hasbro and mattel shares falling after hours on the announcement. barbie is all that needs to be said. paramount considering cost cuts. the company is discussing laying off 1,000 workers next year with weak ad sales. sherri redstone met with sky

dance's david ellison about a potential share. we will be following that. shares of oracle under pressure as well. earnings came in at $1.34 a share. revenue was a slight miss and guidance disappointed the street. the cloud computing business grew 25% after the gain of 30% in the prior quarter. the second consecutive quarter of slowing cloud growth. you can see that stock is off by 8.5%. $105.30 is the last tick. warren buffett reduced berkshire stake in hp. berkshire reduced the stake in hp previously in september and october. it bought the stake in april of 2022 with the average prices estimated in the low 30s and that's where you find the stock

today. $30.37. teenagers in the u.s. are glued to youtube and tiktok, in case you didn't know. according to the pew research survey, 93% of teens say they regularly use youtube. 16% say they use it almost constantly. they might have been polling the sorkin children. not to be proud. i'm proud of my children. not to be proud of that element. tiktok was the second most popular app with 63% of teens saying they use it regularly. 17% of those saying they use it almost constantly. 33% of teens use facebook. 59% use instagram. down from a peak of 62% last year. >> instagram and facebook. facebook is kind of where they saw the dropoff from 70% when

they did this five years ago. that's the type of thing when you realize why facebook jumped and bought instagram and always looking for the next thing. meta after that. if your parents are on the app, it is not cool. >> it makes it tougher. by the way, youtube is owned by google. >> youtube, i would not have put them in the same category. youtube is like watching tv. >> it is youtube shorts. >> you flip through them. it is not like you are connecting with anybody. my son is using youtube. he is not talking to anybody. it is not like snap. those social media networks. >> it is endless flipping. >> youtube stuff. i was surprised to hear that. i think of that as another television channel. you know, it's not the same.

it's not like snapchat where they are communicating or facebook. our kids on snapchat are older girls. they were messaging their friends on it. i don't see the same similarities. i just think of them differently. >> i take the other side of that. that's where i sit. when we come back, a key read on inflation is due this morning at 8:30 a.m. eastern time. this comes as the fed kicks off the two-day policy meeting. there's a lot riding on what this number has to say. we will get you ready for it next. later, we will talk regulation with the chair of the cftc rostin benham. "squawk box" will be right back.

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welcome back. on today's "squawk planner," the fed is watching the policy numbers with the latest consumer price data and read on inflation which is important. we will wonder what they see here. expectations from economists that it will be 3.1%. last time around, it was holding steady on the month-to-month basis. on the annual percentage, they are looking for a 3.2%.

joining us to talk about this and what it will mean is constance hunter at macro policy. on equities had morning, we have john mowry at nfj investment group. welcome to both of you. >> thank you. >> constance, let's talk about the cpi number. this is a big deal. we are thinking the fed is on pause. the market is taking it a step further and thinking they will cut rates sooner rather than later. what are the implications for what we are seeing today? >> there is a step between pause and cut. it is a step called hold. this number is going to be important, but i want to preface that by saying it is going to be

a bumpy road down to 2%. we are expecting a softer number, but there is room for surprise here on both the upside and downside. we shouldn'tshouldn't-over inde number. >> that's very sound and the right way of looking at things. the problem is the market is telling us they think they will cut sooner. the market is reading into more than the fed is saying. >> that makes sense. the market is forward looking. the fed cannot be that forward looking. they will come closer together. our view is they start cutting in may and they cut six times next year. we will get to a point where they need to engineer a positive sloping yield curve. that is going to allow more bank lending to be done.

it will open up some engines of growth in the economy which are slowing down if you look at the last jobs report which was narrow. three sectors accounted for 98% of the jobs growth for the last six months. >> the risk in the markets, john, markets are bidding this up. you have yields that have come down. you have equities that moved up as a result. if there is a hotter than anticipated number, that could put everybody on pause? >> it could. one thing we are pressing is if you look at the spread with the fed funds rate and two-year yield, that is wide. what is fascinating is the two-year yield over the last year is up 20 basis points. the fed funds rate is up 225 basis points. that spread is very wide. you can grab this going back to the '80s. every time the fed fund rate is elevated above the two-year

yield, the fed cuts. you would say 100 basis points needs to come out. t two-year yield was ahead of the fed on the way up. >> when you look at this historically, what is the time going issue? >> 6-to-12 months? >> every time? >> every time. every time they do this within 6-to-12 months, the fed cuts. i'm give you an example. in 2000, the fed raised three times, 100 pace 00 basis points in january, they pulled 100 basis points out. there are not a ton of obser observations, but they were forced to act quickly. if they were going to cut, why raise three times in january? >> it gets back to the question of how quickly the economy is

slow slo slowing? do you like what you see? >> we started the year in the soft landing camp. we are growing concerned because the tailwinds are mounting. we have a slow growth global situation. we have the inverted yield curve. we have a lot of headwinds. jobs growth is narrowing. that is a big concern. if you come off holiday spending which is weaker and the consumer is weakening, we are concerned. there will be slower growth next year in the first half, but the fed will begin cutting. if you go back to 2018, they he w were on a hiking path. when the data reveals the weaker situation which it is starting to dorks, you will see them mov

>> john, financials are the most interesting part. >> those interest rate areas are attractive. one stat i will share, regional banks got hit hard in march with four bank failures. all those banks failed. what is fascinating is the regional bank industry is tied with the s&p 500. no one would guess that has occurred. that is happening relatively recently the last few months. looking down the cap scale, you are seeing a lot of opportunities. i'll share one stat. if you look at the number of companies in the russell 2000 value that are down consecutively in it back-to-back years. it is 40%. 40% of the index is down back-to-back years . it is on track to be down this year. the russell 2000 with financials. those are very attractive.optim

>> john, thank you very much. cons constance, thank you. coming up on the other side of the break, we dig into the go go google app store verdict. the jury ruling in favor of epic games. y lly you don't want to miss meodhobson and john rogers both coming up in the 8:00 hour.

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welcome back could "squawk box." google losing a major anti-trust battle with epic games. steve kovach is here to break it down and see if the jury was right. >> let me set the stage and we will chat it out. the jury ruled that google has monopoly power over the app store. it caps a three-year leg battle with epic games which sued apple and google claiming they held monopoly power which squeezed companies 30% of their sales. tim sweeney called it victory over google on x last night. it is the first major win in the fight against yaapple and googl. it took the jury a few hours to

come back with a unanimous verdict against google. the judge will decide what the punishment for google will be. it takes money spent within apps through the google play store. the judge will make the decision after the new year. it will be a long time before google feels pain. google executive telling us in a statement it will appeal the decision. a process that could take years and could go to the supreme court. speaking of the supreme court, we are expecting to hear whether or not it will take up the case epic mostly lost against apple which it filed in 2021. no matter how it shakes out, it will have big implications for the app ecosystems at apple and go google. >> let's break this down. besides the jury. >> the big difference with the cases. >> was there anything distinctively different about the case? >> a little bit.

you mentioned this earlier. android is open which allows other app stores unlike iphone. it allows you to go to the internet and download straight to your phone. google claims they are open. they found different ways to close it down. cutting deals with phone manufacturers to make sure that play store is the default and google services with maps and gmail is the default app. there is financial incentive for samsung making a google phone. they have their own app store. they would love to continue that. it is more lucrative to play along with google and use the services. >> what are the chances it will have a craosscrossover on apple other companies? >> these are two separate cases over a similar thing. let's say the supreme court takes it up in january and argue in and next summer we get a

verdict. the question is does that impact google because the cases are similar or goes google go through the process? this is going in effect in march in the eu next year. apple will allow other apple stores on the phone. it will be interesting to see. >> just in europe? >> that's what it sounds like they're doing. they may have a separate version of ios. we will see how they get around this. a separate version to allow it. microsoft is giddy. they want to open an xbox store on ios. epic's tim sweeney is saying they are happy about it as well. >> this would be a new how do you figure this out where are you slepteping when the downloa

comes through? >> if apple does go that route instead of a global change, you can understand why. the app store margins are so good. it is profitable for them. especially on gaming like "f "fortnite" which makes them fight this country by country. >> now we will have the real in-the-wild test of what apple has been saying all along. >> security and privacy. >> we will find out. natural experiment. if the phone is in the u.s. and doesn't have the problems the phones in europe has. apple will lose that argument. if they have problems, people are happy about it. >> the apple stance is these payment systems we use within apps is secure and protects you and manages your subscriptions. going on the internet is

dangerous. we do that all the time. they don't say that with amazon to buy toilet paper. they say it when you buy robucks on the app. you can be skeptical about that. >> steve breaking it down. thank you. >> thank you. when we come back, we will talk about the move in bitcoin and the possibility of the spot bitcoin etf with jeremy helaire. as we head to break, let's check out the s&p 500 winners and losers. >> announcer: winners and losers is sponsored by state street global advisors.

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good morning. welcome back to "squawk box." we're live at the nasdaq market site on times square. the s&p futures are up by 2 and the nasdaq indicated up 30

points. this comes after gains yesterday. if that feels like a broken record, you are right. the dow closed at the highest level since january of 2022. let's talk crypto. after topping $44,000 last week, bitcoin dipping below the $41,000. sliding 7% since sunday. cryptocurrency at $41,000. joining me is jeremy helaire. >> good morning. >> now we have crypto summer and crypto winter. what is happening? how much is driven by the fed and etf possibility for bitcoin and the like or something else? i know your business, which is stablecoin, is different from all of the other things. it is all inter related. >> it is all interrelated and getting the seasons right is the

biggest challenge we have. in argue seriousness, i think as i've talked about it here on the show as well, in the depths of challenges last year with high-profile exchange collapses and regulatory enforcement action and a lot of people freaking out. importantly, a lot of stuff is being built. you had major financial institutions building at trying to create institutional investment platforms like blackrock and fidelity and others. you had significant investments continuing in the infrastructure side of this. it is like after the dot-com bust with 2002 where no one wanted to invest in internet companies. broadband is getting lit up. all of the infrastructure was there. actually, the technology became highly useable and useful. i think a number of things are

happening right now. we are seeing rapid technology m maturation. you are seeing this with solana. it makes using blockchains fast and easy. you have the institutionalization and the clarity which comes from that. all of that combined. >> the clarity piece. the clarity piece doesn't seem so clear. where are we are the regulatory clarity piece? we have reached escape velocity. they have to deal with us now. what is your take? >> a couple of things. the first is global versus u.s. in every financial market center around the world, they are putting in clear regulations on digital assets and stablecoins. hong kong, japan, uk, uae. you go to the places and they are doing it. the u.s. is behind.

that's one. in the u.s., you've got three big bodies of policy issues. you have markets and how to regulate markets. you have a turf war going on and some political posturing. then stablecoins. it is a matter of when, not if. you have illicit finance stuff. that is what elizabeth warren's issue is here. with respect to markets, which is the thing that attracts the most attention, you know, there is a fundamental disagreement between one particular agency and some of the other agencies and congress. >> the s.e.c. and ftc. i ask because we have ros benham coming on. >> the beauty of the system is we have all three branches and

they are trying to work that out. >> when you see -- >> the beauty. >> one way of looking at it. the extent of bitcoin is a barometer of risk on and risk off -- i don't know what you think of its any more. we show it every day because of the interest around the world. what do you think this is an indicator of? >> a couple of things. the first is digital commodities are here to stay. we have this new thing. digital commodities. they are here to stay. they are valued differently. gold is valued differently than oil and copper. bitcoin, specifically, is the largest commodity asset digitally. in the minds of many of the people investing in it, this is a risk hedge asset. it can be correlated to, you

know, availability of money p supply or unrelated to money supply. it doesn't hit every box. you are hearing from others that they believe in a complex geopolitical environment, a complex macroeconomics environment, this is an asset that one should have some -- >> we should think of it as a currency? >> i do not. >> you are more in the currency camp in what you do? >> correct. digital dollars that can be a strong store value medium with the strength of the internet. i expect it to be explosive in terms of the growth in the number of years. huge appetite for dollars on the internet is a big thing. that is distinct for a currency hedge or store value hedge against the world going to hell.

>> can i ask a crazy question? if you are successful, does that mean visa and mastercard and all of the other financial players are a massive short? >> the way i think about it is, when the internet took off, the marginal cost of moving a piece of information or communication went to zero. if your business model was charging a fee for making a voice call or charging a fee for moving information around or publishing information, you had to really rethink your economics. what is happening with blockchain networks and stablecoins and digital currency is the marginal cost of storing money is going to zero. what does that mean for people who take large amounts of spread or significant transaction fees? i think that will be very challenged. very challenged over the next, let's call it five-to-ten years.

>> jeremy allaire, thank you. good conversation. >> thank you. >> i appreciate it. we have breaking news here. choice is taking the hostile bid for wyndham directly to the shareholders. choice says it currently holds 1.5 million sharesof common stock that are valued at more than $110 million in wiyndham. it is offering to buy for a combination of stock and cash. it is $49.50 in cash and 0.32 shares of common stock for wyndham share. that represents $40.50 based on the trading price of october 16th. the day prior to the choice's first public offer. the stock has changed over time as people have wondered what would happen with this thing.

choice says it is preparing to nominate candidates to the wyndham board and prepared to offer wyndham shareholders two board seats of the combined company. it is offering wyndham h shareholders a reverse termination fee. wyndham shares up to $81. when we come back, activists on the attack. we have new numbers on just how many companies have an activist invested in their company. that is next. plus, don't miss our interview with mellody hobson and john rogers at 8:00 a.m. you can get the best of "sid "squawk pod" on your favorite "squawk pod" on your favorite podcasexperience, "squawk box" will be right back. pgim investments. shaping tomorrow today.

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the current market conditions have activist investors in overdrive. the trend is expected to continue into the new year. leslie picker has more on potential boardroom battles in 2024. this could be fun or interesting. >> it's fun for us. i don't know about the boardrooms across corporate america. here is a wild stat provided to us from goldman sachs. one of every six companies in the s&p 500 has an activist

invested. some are active and some are lurking. campaign levels are 13% higher over the last four years. things could start to ramp up between december and february with .75% of public companies opened the domination windows. the environment appears to be conducive with a more optimistic macro outlook and high corporate cash boards and reasonable leverage levels. goldman sachs tells me these conditions provide fertile ground. activist feel emboldened after returning 8% in november lalone. that is the best among the 28 published. as for what to expect in 2024, i'm told there will be more big

cap fights and attention gl globally in japan. guys. >> leslie, you mentioned this may be interesting for us watching, but it is not fun for boards. is there anything the boards can do to try to protect themselves from these things? do you bring them in under the tent? do you stiff-arm them? do you appeal to the largest shareholders? >> each situation differs, obviously. it depends on the activist and what they are asking for. in preparation, you have a lot of discussions taking place with boards and their advisers saying we have a sizable cash amount. how should we deploy this to prevent an activist from coming in and saying you should use this for buybacks or use this to acquire companies. how should we look at strategic

difficu divestitures? should we be optimistic about different businesses that may fetch a higher amount than they would be in-house? all of those conversations can take place ahead of time. they do frequently take place ahead of time to prevent an activist from coming in and telling a board they should be doing things. of course, the reason activists exist is because boards and activists don't see eye-to-eye. that is why we can potentially expect to see an uptick in activity in the first quarter. >> leslie, thank you very much. leslie picker. coming up on the other side of this, the ceo of auto desk say there are lessons from regulating social media which should be applied to artificial intelligence. that story and more when "squawk box" returns after this.

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welcome back to "squawk box." in a recent op-ed, lessons are to be learned from social media and can be applied towards regulating ai. joining us to talk about it is andrew -- i would encourage everybody to take a look at what you wrote. the distinctions and similarities in your mind between social media and ai and to the extent you would regulate it in a similar way, and they have not been able to regulate any of it. >> andrew, at a high-level, the

u.s. under regulates and the truth is somewhere in the middle of the atlantic, and the analogies are clear. there's a lot of things people did not understand when it came to social media, and they leaned on section 230 of the indecency act, and at the same time you want to be able to align -- align the interests of what ai is doing with the interest of humanity or the end users. that's where we failed the social media. in social media's case, the players were aligned with the advertisers and not with the end users. what did we get? addictive behaviors for children, and amplification of fake news, and all sorts of issues with echo chambers, and those are the kinds of things we want to move forward without the

stifling regulation. >> you are king of the day, and you do what to ai? >> let me give you examples of what could be done, and i will use social media again, and i am not a regulatory expert, but there are people who is at the mit initiative for the economy, and in social media's case, if you want to regulate to tap down the dangers of social media, you would make social graphs portable, and that clearly aligns incentives of the social media players of pleasing the customers and the end user and not just the advertisers. what are the parallels in that for ai?

i am not smart enough for that, but one of the things i am liking about is hearing about the risk-based approached, and trying to target things that get in the way of people getting jobs or people being sent to prison or being released from prison, and people with bad ai do bad things, and if we stay focused on that instead of the world where good things can be done, then i think we have the right balance. >> we should potentially think about creating a global regulatory body even. would you endorse that idea? do you think that's a plausible idea? who would you put on such a body if it were to exist? >> i think it's a plausible

idea, and ai is going to take all the jobs away and pcure cancer. if we had a body that set terms and controls around what is acceptable for an agi to do, because we are going to have an artificial general intelligence that can be deployed to do bad things, and this is going to happen. what we want to do is make sure agis are not employed to attack a subset of a population or a state, and there needs to be a combination of leaders from the eu and u.s. we have nothing strong in the u.s. yet but something strong in europe. >> thank you for your piece.

the king for the day thing is over now, so good luck. >> i proudly give up the crown. >> thanks. >> how do you set global standards and not include china. >> that's why it was just king for the day. and then consumer spending for bank of america, and then don't miss our interview with mellody hobson and john rogers. "squawk box" will be right back. 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.

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good morning. stocks looking to open at two-year highs as wall street bulls get energized for 2024. we will show you what is moving in the market. and then the consumer focus as the holiday shopping season rolls on, what bank of america is seeing from credit card users, and a preview of cpi data. that's coming up. president biden getting ready to meet with ukraine's president. we will hear from the spokesman of the national security council. the second hour of "squawk box" starts right now.

♪ good morning and welcome back to "squawk box" right here on cnbc. i am andrew ross sorkin along with becky quick. joe is off today. you take a look at futures today. we have a lot going on. let's see what the fed does later today -- i shouldn't say later today, but -- >> it's tomorrow. >> it feels like tomorrow already. and s&p 500 looking to open a point higher. just about now, the ten-year at 4.19. crude, if you want to buy it by the barrel, 71.06. you are now living in the

41,000, 42,000 range. the fed kicking off a two-day policy meeting that starts this morning. policymakers will watch closely at 8:30 a.m. eastern time. we will bring you the pricing index data. and holding steady on a month to month basis. the economy is up 3.1%, after last month's gain of 3.2%. and the goldman naming target saying it expect the retailer to turn things around next year. the target shares year to date is down 4%. >> if you are looking at consumer spending, it remains resilient. all of the data showed that

overall card spending per household up by 0.5% after dropping in october. retail and services also improved. they were helped by strong black friday and cyber monday sales. joining us to break down this is the head of pbank of america institute. >> i hope everybody is spending in the holiday season, but if you want to understand what is going on here, the most important thing to take a step back and look at is what is happening in the labor marketed. we look across everything about the consumer, including what is going on including their after taxes income. what we are seeing in terms of income is that it's moderating but it is still positive. the other thing -- >> we are still seeing growth? >> we are still seeing growth across all income groups.

the highest income consumer is struggling through the year, and you are seeing that moderation move over to the lower and middle household incomes, but that's still going up. not the double digit gains we were seeing two years ago, but still higher. >> when you say struggling -- >> they are struggling, and earlier in the year we saw those people in the tech and finance sectors. that's back up to positive tkpw growth. >> if you are in the middle or lo lower stratosphere, you needed more income. >> and we look at it by generation, and we are seeing gen z and millennials are driving the income growth, which

makes sense, right? the gen z up 9%, and the millennials up 4%, and boomers and gen x are stable, up 1%, and the younger consumers are starting to see the growth moderate whereas the gen x and boomers are stable. spending patterns, what we are seeing there, interestingly, is that the millennial spending patterns are actually not aligning with the fact that they are moderating. in general, what we have seen really all year is the boomers are driving the spending. you talked about holiday spending, and in particular the boomers are driving that growth in the overall -- >> isn't that just a reversion of what was normal precovid? >> boomers, beginning of the year, they but the cola.

psychologically you are seeing -- you are not seeing the same growth, but you also have childcare, and of the 10% of households paying for childcare, it's up 30% since before the pandemic. that's impacting the millennials and younger whereas student loans, the predominant amount of student loans are held by the younger customer base. when we look at the spending for households who started to make student loan payments again in september and october, we are not seeing any evidence they are pulling back on their spending. some of this may be their perception, but in terms of what they are doing, again, you said it before. the consumer is resilient, and the consumer is still spending, and it's across services and

goods. >> can you dig down into areas, only because we had a story this morning about how hasbro will be laying people off because the toy sales have not returned or come back. >> when we look at what is really driving holiday spending, it's clothing, cosmetics and experiences. >> electronics are out? >> they're not in. >> remember when fashion was out? >> it's back now. >> now we are all peacocking again? >> that and airfare is what is driving the holiday spend. and what else is interesting in the holiday spend is the bulk of it happened between the black friday and cyber monday, and those holiday sales was up 5%, and the whole month was up only 1%, and that leads me to believe

consumers are looking for promotion. december is a bigger holiday spending month. >> you have not seen a slow down on experience spending whether that is getting on planes -- >> no, that's beginning to be a growth area. >> it doesn't sound like your data shows the economy has slowed substantially? >> it has not slowed substantially. what is important to look at is the moderation in spending and wages, you are seeing a pullback in that spending and the wages are catching up, and the wages are still more healthy than the spending growth, right? the other thing we look at and talk about is what is going on with deposit balances. deposit balances continue to come down, but are still 40% higher than in the pandemic. >> that's crazy. people were convinced a year ago

people would have spent down all the savings. when does it happen? >> at the beginning of the year you asked me, will we run out by the end of 2023? the answer is no. we think it's well past 2024. >> wow. this is just all the excess savings from during the pandemic? >> part of is that and also part is the wage growth, right? the wages are continuing to be positive and grow, and they are growing faster than goods and services are. >> liz, thank you for coming in. >> great to be here. >> great to see you. more coming up on "squawk box," we will have the cftc chairman here, and he will talk crypto and carbon markets. we are in the green this morning, and we are coming right back. you are watcng "hisquawk box" on

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♪ ♪ welcome back, everybody. he's pushing for more power to

police digital assets and said nothing changed since the collapse of ftx. thank you for being here today. >> thank you for having me. >> we had a guest earlier, and he said one of the big problems they are still facing is the turf war to figure out how digital assets are going to be policed. it doesn't feel like much progress has taken on that front. it's crazy how long this is taking to figure out. >> yeah, i think members in congress are trying to figure out the landscape. we have a lot of regulators in the u.s., both on the market side and banking side. there's a gap in regulation and congress is going to have to step in and overcome this feeling of not wanting to legitimize the technology or

that it's something sustainable -- >> it's here. >> it's here to stay. there are terms around regulation around customer fraud, and then the terrorists and crime organization use, it's something that should be concerning for congress and america, quite frankly. >> knowing how politics works, you are probably not likely to get a clean bipartisan issue without weighing into the issues where there's not a bunch of argument back and forth. >> you have the ae hterror financing, and then you have the market structure issues, which is important to me as a market regulator. i think a lot of momentum has been around the aml kyc -- >> what? >> knowing the customer and --

>> sure. >> a lot of members are focused on that, and i am focused on markets, and there's a lot of focus on stabilization. >> what do you think about the crypto and the difference from what gary thinks about crypto? >> it's what is the investor and buyer of the tokens getting with the purchase of a token or ether or anything else. we have the legal precedent and what we are seeing on the markets. under existing law many of the tokens constitute commodities, and under the aoub rick, we still don't have a regulated environment or entity.

>> when you get in the room together, is it like a brawl or is it -- >> no, no, look, i will use this stage to dispel any of that rumor or myth. we get along quite well. we have shared values and shared interests in protecting markets and protecting the u.s. financial ecosystem and protecting customers. it's figuring out how existing decades-old law fits with the new technology that seems to be changing and ultimately needs a new way of thinking. >> but you are not going out to lunch or dinner, are you? >> we have a great relationship, and if we could, we would, and things are just fine. >> it's shocking the stuff that you found t, and -- i know

bankman-fried was not stealing customer funds, but flouting u.s. law intentionally, it was pretty extreme. >> we have over $4 billion in fines on the criminal and civil side, the cdfc, justice and treasury, and there's the criminal side, and he will be going to jail. i think law enforcement, both criminal and civil, we work together and we feel like we got the bad actor here. >> you think he's going to jail? >> those are the charges -- >> but he has to be in the right jury sticktion -- >> is that the problem, he was a cou country that we didn't have an agreement -- >> look, i look at the civil

side. >> unrelated question, and bankman-fried is going to be sentenced in february, i believe. there's a big question mark about how long he should be sentenced to, from a cosmic justice system, and all the victims, and many say from a deterrence perspective, a long time, and a tax dollar perspective, not a long time and make him a productive member of society. what do you think, somebody that cares about the markets? >> it's important that we follow guidelines and stay consistent with what we have done in the past, obviously speaking of the criminal side, and we don't want to just pick on one individual or a group of individuals, and that's the hallmark way of doing it on the criminal side, but on

the criminal side and civil side, there could be a penalty or jail time. we think of the sentencing guidelines, and i think in march of 2024 it becomes a balance of sending a clear signal that if you, you know, violate the law in this egregious way, you are going to jail and for a long time, and balancing what we have done in the past in terms of precedent and sentencing guidelines, and there's a way to do that that meets goals and sends a clear signal and doesn't do it in a way that is an anomaly in the way we have done in the past. >> you don't want to throw out a number? >> probably won't throw out a number right now. >> but deterrence is important? >> it's a large part of what we do on the civil side. >> do you think there's a big difference between ten years and 50 years for somebody that is 32 years old. >> every year matters if it's 10

to 50 or 10 to 15, every year matters. we see it on the civil side when we levy penalties, we send messages to banks and brokers, and -- >> this guy can come back as a ceo, basically. >> we have to see what the sentencing is, and at that point there will be a lot of structure around the markets. i think regulators across the globe are going to react to him or bynance coming back into the states. >> the idea of carbon trading, how does this work? how would this market set up? this is a market a lot of people have talked for a long time. >> yeah, there's a cap and trade program, and i have been focused on the volunteer markets that

emerged over the last couple of years, and it's going to be a powerful tool in the climate carbon discussion, and we have an interest in the health of the underlying market. >> how corrupt is that market now? >> i wouldn't use the word corrupt. there has been a positive effort by the private sector to elevate the integrity of the markets, but there are a lot of issues -- >> people are resaling forest five times over, that, by the way, were preserved to begin with. >> this is exactly why i stepped into the space. i don't know i would use the word corrupt across the board. there are a lot of good actors in the space, and what we are trying to do is elevate the market and lay out principles for what we expect the marchet to do, and hopefully elevate the market and the principles so the

corruption and bad actors can get squeezed out. >> where is there more corruption in the crypto space or the climate trade -- >> a harder interview than you thought this morning. >> that'swhat i expect and why i like to come back. >> we like you here. >> we're looking into the climate side, and hopefully the guidelines and principles will elevate the market and support transition. there's a huge opportunity to develop, and it's our way of stepping into a market that we have a responsibility to participate in because we have listed futures and also support the transition. >> chairman, thank you very much. we always like seeing you in the studio. >> you held in the whole time. we appreciate it. rate hikes may be over, and now the speculation about when

rate cuts may actually start is rising. you should see the markets where they are pricing that this morning. we will talk about what it means for the markets next year in 2024. "squawk box" will be right back.

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welcome back to "squawk box." i am dominic chu. let's start with the big earnings after last night's close, and that's oracle. the shares around 270,000 shares of volume. the business software commuting giant reporting better than expected profits, but estimates fell shy because of the oracle cloud infrastructure. the revenue guidance narrowly missed expectations, so a 9% drop in oracle. let's check on shares of google, parent company alphabet half a

percent on the down side, and a federal jury sided with epic games, the maker of quartfortni they are accused of charging app fees up 30%, and it could developers more power or apps are districted and how they profit from them. and hasbro shares, just 13,000 shares of volume. the toy maker has a 20% slash of the workforce. it's a critical period for hasbro. as a result shares down nearly

5.5%. back to you. >> thank you for that. when we come back, we will talk about when the fed will start or whether it will start cutting rates, and the latest results of the cnbc fed survey coming up, next. and then president zelenskyy set to meet with president biden and lawmakers, and john rby ki will join us to talk funding and so much more.

new this morning, apple has offered to let rivals access its tap and go mobile system used for global wallets, and the move could settle eu trust charges and stave off a hefty fine. the enforcer charged apple with curbing rival's access to that, making it difficult to access services, and would that give only access to european rivals on some of the things, too, like steve kovach was just saying. >> i don't know if it will be hardware just sold there, or software, or geo --

>> i think if they let a rival have access to the technology, can you develop -- i am just reading through the reuters report. >> i am not sure. we will have to find that out. let's talk about the fed. today kicking off a two-day meeting, and let's see how steve we liesman is thinking about this. >> cuts could be in the cards, and they are decidedly in the forecast of our survey response. 100% say the fed leaves rate unchanged this week, and then it moves up to 69% for july.

4.53% is the year-end '24 fed funds rate. 2024, 583. so december 2025 goes down more, and our chief investment officer says i still believe powell has the memories of the 1970s in his mind and will be more stubborn in keeping monetary policy tight for longer than markets want him to be. next year could be the year when the fed ends quantitative tightening. we asked people when it will happen and by how much.

the balance sheet goes down to 6.2, and fed reserves decline, and so eight or nine, ten months, depends on how you count it, additional quantitative tightening built in. 37% say it will happen in 2025, and 28% say it will happen after 2025 or never, andrew. that's a big part of the discussion. we will get some cpi data coming up at 8:30. >> steve, i know you probably don't want to say this aloud, but are you already thinking about your questions to jay powell? >> well, we talked about this yesterday, powell wouldn't even entertain the question. it was not something he said we are thinking about, and he may

still be there, we will see if he gives it the back of his hand, so to speak. it's somewhere along those lines, and that's the question of how he's thinking about it. if you read my story today, we have john quoted in the story on the fed's survey, and the fed has to create a framework for the market to think about this, and you had his fed governor talk about the idea that if inflation falls the fed has to come down with it or it will be a little -- >> yeah, and it's a jaw boning question. it almost behooves him to suggest that he's not going to cut because that will continue to do some of the work for him on the other side. no? or you think that there's like -- >> no, no, no, that's an issue,

andrew, but the cost of that issue is his credibility, right? how long can he talk about the idea of keeping rates high and not changing rates when, indeed, inflation is falling, if, indeed, it continues to fall. it's worth pointing out one difference between this group and the market pricing is this group understands well how data behaves, and it doesn't behave in a straight line, and powell and the fed could think we could go down and then come up, and we think the trajectory is this way but not in a straight line. at some point the fed needs to be able to talk about this, and talk about this in a way that doesn't unleash essentially the horses of the market to start galloping down the stretch towards unattainable or

unsustainable rate cuts. >> we will watch you for the next 24 to 48 hours. in the meantime, let's talk markets, the director of research and double black diamond expert on everything, good morning to you. >> good morning. >> do you think powell will show his hand? what does that look like? >> i was one of steve's respondents. >> i don't know if i ever met one. >> well -- >> yeah, he keeps them secret. >> what you were getting at with steve, and for steve to ask about, and in september the fed was on the call on the idea that inflation was coming down that allowed them to stop the hiking process and even to talk about reversing it later on. in september they put out a forecast that said they were not

going to reduce the policy rate to below 5% for something, like, 15 months. he added a variable inasmuch as he decided or the committee decided that they needed weaker growth and higher unemployment in order to actually start reversing come of the rate hikes. that's a key issue, because waller indicated that was not the case, and even if the unemployment rate stayed below their estimate of the long-term equilibrium rate of 4%, they could still cut. that's a real change in the way the framework steve was talking about that he put in place in september. at that point i was expecting the market to rally, and finish the year at 4,800. when they addedthat framework in september, to me that was a big negative change. i changed my forecast and said i think we are going to 4200

first, and then we went to 4100. >> right. >> then the fed partially pivoted again, and now here we are, we are going to get the forecast, are they going to change the framework from slower growth, high unemployment and lower inflation to just lower inflation, and then you ask about credibility. how do you -- >> if you entertain the idea that you will lower the rates, wouldn't that work against him? >> 100% it will. 100% it will, yes. what i was saying with respect to the bond market that any rally was suspect if it was not led by two-year notes. the idea that only two-year notes could rally significantly is if the fed is ready to cut.

>> they have done it on their own, assumed the fed would cut. >> that's right. i was in the camp that believed they would cut four times next year, and i thought they would start in march, and then we got the unemployment decline, and now i am convinced they have to cut because of the inversion of the yield curve, and this is -- what secretary yellen did by issuing a ton of bills, that's getting funded out of government money funds, and the rest of it is in the belly of the treasury curb, and the banking system buys those securities, and small banks are shredding government securities at a 20% annualized rate. >> how much do you think powell is thinking about the issues as

it relates -- well, the banks i think he thinks a lot about, and i don't know how much he thinks about the government debt. >> that's a fascinating question, because when you go back to the 1960s, martin, who was the fed chair, and he s said -- well, i don't know. i got to believe that this is super important. >> he doesn't talk about it in that way. he might talk about banks. >> but it's highly political if he does. >> this year is more complicated given that it's election year. >> correct. and there are those, myself included, that the treasuries in the last two years have been more impactful on the markets, even more than the action of the fed. they injected more liquidity

than the fed, and withdrew more in 2022, and tweaking the issuance had a profound affect on the treasury market and caused a rally. treasury may decide at the beginning of next year to drawdown their account at the fed, and just stop issuing again. the whole stan argument was interesting. she drew the account down from 1.7 trillion to zero in seven months. it was not a question of issuing -- it was just not issuing, so the treasury can smooth things in the beginning of the year, but the yield curve really does need to be disinverted. the only way to disinvert without causing damage -- >> in the financial markets? >> in the banking.

small banks just take in deposits and lend money long, and so for that system there's no alternative to an upwardly sloping yield curve. the last time we had it like this was in 1980, and that's when volker started the chain of events that ran the savings and loan industry out of business. >> we have to leave it there, barry. we will see you on the slopes. i don't know if it's the inverted slope or not. >> thank you. and plus the push for more ukrainian aid. president zelenskyy will be in washington today to do just that and push for that, and he will be speaking with the john kirby about that and more. "squawk box" will be right back after a quick break.

this is real time insights. i am here with sean smith. we are talking ai and it's transforming all areas of business. how specifically is it impacting tax and finance? >> generative ai opens up tax professionals to kwaquery the d and ask about different insights. >> is that going to replace jobs? >> we don't see it like that. if you think back to 30 years ago, those spread sheets, most tax planning was done with a pen and pencil and calculator, and the reality is they learned how

to code spread sheets and years and years later there are more tax jobs than ever. we see ai as having the same impact. >> all that said, how are you advising your clients? >> well, as we talked about, there will be a need to upscale that cost, and technology budgets are strained everywhere, and our clients have to decide will they go it alone or lean on a third company. >> thank you for sharing your insights. ♪ ♪

ford is cutting its production plans for the f-150 lightning struck. phil joins us for more on this. i guess there is not as much demand, right? >> it's not there, becky. when you don't have the demand there, they won't over build if you are ford. if the market they originally thought was there, if it's not there they scale back production. this is a major reversal for ford. originally they planned to build 160,000 f-150 lightnings next year, and now according to current production plans through suppliers, about 80,000. best month they had, and for

2023 sales were gradually increasing topping 20,000 for the entire year, but the company said in a statement last night to us, we will continue to match lightning production to customer demand, sort of boilerplate language. we heard this from ford before, we are not over building but matching production to demand, and they are deferring $12 billion of ev investments that were planned over the next year or two, and they are pushing those further out. doesn't mean they are giving up on it completely but they are not going as aggressively in the ev production as originally planned and that's what we are seeing in the new production plan for 2024. look at shares of rivian. it's interesting to see the demand not growing as quickly as expected for ford, but what is rivian seeing? we have not heard anything, and we will get their production totals at the start of next year, and then we will see what they plan for 2024.

guys, this all calls into question, general motors and ram. they have electric pickup trucks that will be coming next year, and do they scale back how many they plan to build initially, because the market is not there when it comes to ev pickup trucks. >> it's not just the companies' plans, but it's the government's plans, when they say you need to have x amount of your fleet meeting the fuel efficiencies, and the things that americans want are the heavy things that tend to be gas guzzlers. how do you meet the standards required of fleets by the government and what if americans just don't want it? >> hybrids. fo ford's f-150 hybrids are out selling those 2 to 1. you are lsz getalso getting to

point, we heard the mandates from states and governments around the world, you are going all electric by 2035 or 2040, and slowly those are starting to fallaway. there's not a lot of coverage on those, because they don't get as much coverage as saying it's all electric by 2035. the market is just not there. you cannot force people to buy electric if they don't want to go electric, and that's what ford is realizing there. >> no, but you can force companies to sell products and make it far more expensive for them to not go that way. it's an interesting thing trying to control markets and lead markets around until that hits reality. >> are the cafe standards too aggressive. >> yeah, california is talking about when they are going to be all electric, and can the grid handle that stuff?

as the dates get closer, we see all the problems that crop up. thank you. >> you bet. coming up next, in just a moment, national security council spokesman, john kirby, will join us on his thoughts on ukraine funding, and will congress approve right now. we're going to bring numbers at 8:30 that will move things around, and of course we'll hear from the fed tomorrow. right now, dow epup 82 points. we're coming right back.

ukraine president zelenskyy is in washington this morning making one final plea for military funding to maintain the flow of weapons from the united states. joining us right now is john kirby. he is the national security council's coordinator for strategic communications, and john, where do things stand on capitol hill right now? >> well, it's difficult to know for sure whether they're going to be able to get something done here by the end of the week. some senators are showing pessimism about that. we are confident there's enough bipartisan support to get something done. the timing is going to be up to members of congress. we know there's bicameral support for ukraine. that's what we're focused on, making sure we continue to assist and participate in as good faith and negotiations as possible here to try to get something done. it is critical that ukraine get additional support, particularly as the winter months are now upon us. we've got about two or three

weeks left of this month. and then that's it. we won't have additional funding going into the new year without support from congress, and in the new year, when the ground freezes and when it's easier for the russians to go on the offense, which they already have started to do, it will be much more difficult for ukraine to beat back those offensive moves without additional support from the united states and from our allies and partners. >> is there any chance that there would be some sort of an agreement reached for funding for the u.s. border as well. that's where they say, sure we'll support it but only if there's funding to secure the u.s. border at the same time? >> the president already included additional money in the supplemental request for border security, some $6 billion to add the cvp officers, additional asylum court officers, additional infrastructure to go after the fentanyl trade, so he believes

good morning, 30 minutes and counting to the number of the morning, november cpi inflation, it is a big data point for investors, and the fed to kick off its latest meeting today. we're going to get a new rate

decision tomorrow. and a special interview you do not want to miss. mellody hobson and john rogers are going to join us on the wild 2023 and what is next for the markets ahead. the final hour of "squawk box" begins right now. good morning, and welcome to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin. joe is out today. we have been watching what's been happening this morning, and once again, you're going to see some green arrows on the screen. dow futures are up by 81 points, s&p futures up by 6. but this comes after this continuation of the gains for the markets. dow yesterday actually closed at its highest level since january

of 2022, and s&p closed at its highest level since march of 2022. yields have been the big story. the fed is meeting today and tomorrow, we'll get the decision if there is a decision on something. ten-year is sitting below 4.2% at 4.19. the two-year is at 4.68%. you've got bitcoin which had given back some of the gains, but this morning, back up to 41 41,856. >> let's get to the new op-ed from our next guest in the "wall street journal," entitled "what the stock market taught us this year," joining us now, mellody hobson is here, and john rogers, chief investment officer at aerial. i don't think we have ever had you both together. >> ever. >> over all of these years. never together. it's nice to see you, john. it's nice to see you, too.

you're sitting across from me. i'm just going to ask you, the lesson, if there's any lesson in '23 to take away from '24, it's what? >> if there's any lesson from '23 to take to '24, what worked in '23 is not likely to work in '24 because the pendulum swung so far one way specifically as it relates to the magnificent seven. those returns are stunning. the waiting in the s&p 500 stunning. it makes the nifty fifty look like child play, and the negative returns of some names, the idea that the seven stocks are three times the market cap of the russell 2000, which is where we fish, as you know, at ariel. so those seven stocks are 6,000 small cap stocks. that to us means things have to start moving the other way, and yesterday was interesting.

first time all the benchmarks were up in the magnificent seven were down since 2012. maybe the beginning of this change that we see. >> so, john, the question is, if that's the case, are you supposed to short the big caps? >> i'm not a big believer in sorting. that's really really difficult to do, and so i'll let my friend jim be the expert in shorgting. we do things in smaller stocks and value stocks. it's an unprecedented time. it reminds us aof the internal bubble. when that bursts it was a great time for value. >> when you say bursts, it's actually been on a nice little run here, but you think the market is coming down further. >> you could underperform. the magnificent seven could under perform, and the other stocks that have been overlooked

could do much better. >> the averages may not necessarily move around as well. just different pockets of strength. >> exactly. we feel like those stocks have so overwhelmed the index in terms o. return, you have all of this under performance, which people aren't quite understanding, which creates so much opportunity for the future. we're not saying these are bad companies that are going to fall over. you could be a great companies and not a great investment. that's where we are right now. >> i'm going to john for a second. in the sort of warren buffett camp of buy the s&p and close your eyes for as long as humanly possible, does that make sense in this environment, given the overweighting, frankly of the seven. >> it's interesting, you know, warren is my hero, and someone who's the most extraordinary investor of all time. but i think every once in a while things get out of kilter, and because the index is so populated or being influenced so heavily by the large seven

dp companies, it's not a time to buy the index and go to sleep. over the next several years, it's going to be a greater time for the stocks that are misunderstood, neglected, not well followed. not well researched on wall street. everyone has forgotten about them. hidden gems out there that are extraordinary cheap. i think that's where the opportunity will be. >> are you a believer that '24 is going to be better than '23 or worse, in terms of broad markets? >> broad markets, i think, in terms of the s&p. >> let's use the s&p as our barometer. >> i think the s&p will have a harder time, versus the smaller indices. it's just the mean reversion at some point catches up. large stocks have dominated for a decade. small stocks, when you look back to 1926, they have out performed in a major way. we don't think the world has changed this time, it's not different. we would say -- we would think there would be better returns in the smaller cap benchmarks,

which would make the larger cap benchmarks less successful. >> this is what i think happened this past year, given where inflation was and given the cost of credit, some of the smaller cap companies might not make it or do better things to get into a better position. >> it's interesting, they survived. the balance sheets are not bad. when you look at the fact that inflation is coming down, and the fact that rates are coming down. that should create a better environment for them. they should do better in an economic recovery. this is weird because we didn't have a recession, but we would say we had rolling recessions, we wrote about that in our editorial, underneath the market in certain sectors that got hit really hard. those stocks have been through the worst of things, and they have been priced for bad outcomes. >> mellody, let me ask you this, i realize you can't talk specifics about jpmorgan or starbucks, the boards you serve on but it gives good ini

thoughts i-- insight eninto wha happening with the economy and the consumer. >> we said, when you're out and about now, things are booming. i mean, there are areas that we're invested in, and john can speak to this, like cruise ships, they're over sold. when you go out to, you know, restaurants and things like that, we've seen so much economic vitality, and so it will be interesting to see how things continue to play out. >> yeah, john, i will say, we did have bank of america on, the bank of america institute early this morning, and what they have seen with the 69 million consumer accounts that they follow is that consumers are still spending, especially on experiences, and especially on things like travel and getting back out there, that that's where even this month, consumers are spending their holiday allocations for these types of things. do you think that continues next year? >> i really do. you know, a couple of weeks ago, my daughter and i went to the

christmas spectacular, radio city music hall. saw the rockettes, it was packed. when i got back, madison garden entertainment talked about extending the run in january because of the unprecedented demand. we love our stocks in las vegas. it's doing extremely well. of course the new sphere, that jim dolan invented is rocking and rolling on all cylinders. we believe in these experiences. then finally, royal caribbean is a favorite in the cruise lines, and that whole cruise line space is a place where it's sold out everywhere. people are clamoring to get on and spend money. we're still optimistic for 2024. >> one of the things she said from bank of america. there's still so much cash in the system. she seemed to indicate it could roll off in 2024. >> it's just, the money, the excess savings that people have built up from the pandemic have lasted a lot longer than anybody

anticipated. it's still there. trying to get at how long that will continue to last. >> absolutely. >> without putting on your full on jpmorgan hat, which i know you can't do, but how concerned are you about banks right now? >> i absolutely think that, again we wrote about this, i think the scare in the middle of the year, the june scare that we had with regional banks, yet another sign that we went through the worst of it, and the banking system did recover, i think more strongly than most people expected. i think the other thing is that the u.s. government was very smart in terms of dealing with that situation and making sure it wasn't contagion that would get out of control. i think if anything, we have seen a lot of stability there and a lot of strength, and i'm very confident. >> okay. we're going to leave it there. mellody and john, i want to thank you both. fabulous op-ed. read it if you haven't, wsy.j.c.

>> thank you for having us. when we come back, we've got november cpi, we're going to bring you that data and talk with former dallas fed president richard shfier. stay tuned, much more "squawk box" right ahead. 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.

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♪ welcome back to "squawk box." take a look at futures right now. this may all move around a little bit at 8:30. dow jones set to open about 90 points higher. nasdaq looking to open 52 points higher. the s&p 500 up about 6 1/2 points right about now. among today's top business stories, we are watching shares of oracle, after fiscal second quarter earnings came out. overall revenue missed expectations with three of four categories below what the street was expecting. sales guidance was also light, and that stock is off by 9.7%. epic games convincing a federal court jury that google's android app store has been protected by anticompetitive behaviors.

harming harming smartphone consumers. the jury deliberated for just three hours. a u.s. district judge will determine what steps google will have to take to fix that situation. and pfizer says that it has secured all the necessary regulatory approvals to close its $34 billion deal for seagen on thursday, in order to satisfy u.s. antitrust officials, they agreed to donate the rights of royalties from one of the cancer drugs. that stock up by about $.07. this is an interesting transaction, we have liberty media reaching a deal with siriusxm to simplify the trading structure. here's what's happening. liberty holds an 81% stake in the company that trades via a tracking stock. it's going to spin off and combine with siriusxm. it will continue to operate under the siriusxm name and brand with the tickers siri.

chairman of the board o. f the w company, it shouldn't impact the price of the stock. and teenagers in the united states are glued to you tube and tiktok, according to a new survey by the pew research center, 93% of teens said they regularly use you tube, and 16% of them said they use it almost constantly. tiktok was the second most popular app with 63% of teens saying they use it regularly, and 17% saying almost constantly. 33% of teens said they use facebook. 59% said they use instagram, down from a peak of 62% last year, and facebook numbers are down from north of 70% from five years ago. you can see the popularity in apps moving through the generations. breaking economic data, a new look at the consumer price index. we'll bring it to you, congress expecting a flat month-over-month headline reading and november growth,

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welcome back to "squawk box," the dow futures are up triple digits, a gain of 105. the nasdaq up by about 57. treasury yields have been lower than they were yesterday at this time. if you look right now, you'll see that the ten-year looks like it is yielding, yeah, 4.18 now, and the two-year below 4.7% to 4.67. >> i want to repeat and maybe correct something that you saw on your screen just moments before we went to commercial, we were explaining that liberty media has reached a deal with siriusxm to simplify the trading structure. liberty holding an 81% in the company. we didn't show you the tracking stock. we showed you liberty global rather than that tracking stock, which is lsxm, so i think we've now got it right on the screen, i'm hoping. it's going to be spinning off that tracking stock and

combining with siriusxm to create a new public company torks to continue to operate under the brand. liberty ceo expected to be named chairman of the board of the new company. hopefully we've landed the plane okay there. >> it is the final scheduled day of the united nations climate summit in dubai. and negotiations are breaking down over arguably the most important goal of the event. d diana olick joins us from dubai on that. and what seems to be the sticking point, diana? >> the latest draft of the climate deal totally dropped language to phase down or phase out the use of fossil fuels. it said companies should take action to reduce production and consumption of fossil fuels. this is a major blow to those who expected ambitious action to slow global warming. al gore posted on x, it is

deeply offensive to all who have taken this process seriously. this cop is on the verge of complete failure and that the deal reads as if opec dictated it word for word. the cop presidency led by the ceo of the oil company called it, quote a huge step forward. one analyst responded saying i'm not sure which direction that step would be in. outside of the formal deal, among nations still under negotiation, there was progress here made by countries and companies on issues like regenerative agriculture. >> what i have been encouraged by at this cop is there's been some pretty big announcements and some real money put at it. is it enough? it's never enough because we're really talking about transforming a food system. >> and i will say the show of force here by corporate america was unprecedented from big banks, investment firms, airlines, amazon, big tech, like microsoft and google, they all want a piece of what is now a

trillion dollar climate economy, and you can probably hear the protesters out here now saying no more fossil fuels. we have not seen a lot of protests. they are taking the final day to do it. becky. >> diana, this was a huge kind of back and forth where i don't think anybody was necessarily anticipating it would be taken out entirely. what happened? what happened behind the scenes? what's the best guess? >> well, really, it's the opec, the pressure that we were told that the letter was sent by opec to its nations saying don't sign anything, don't agree to anything that has phase out or phase down even, and that's why the language changed. over the weekend, both of those options were still in there. but that pressure over the weekend was just too much. and, you know, now people are saying that they've not done the action, the ambition that they were promised and what's really remarkable, becky is there was so much optimism here, more than i ever expected because of this talk of action, but it just hasn't panned out. >> a lot of these, though, would

have been aspirational goals anyway. i have heard people like bill gates talk about how we're not going to meet those aspirational goals that have been set out in the past. is this more of a realistic view of things? >> it is more realistic. look, if you have the language in there, at least then you could start the process. were we going to phase out or phase down immediately? of course not. we wanted to see more renewables, more commitments to more renewables. this cop was specifically important because it's part of this checkup, this global stock take, it's called, which was a report card on how the world is doing toward the paris agreement, and the report card that came out a couple of months ago was basically a fail. this cop was supposed to address that and have more action, and it seems now, some people are already calling the cop here a fail. >> okay. diana, thank you. when we come back, breaking economic data. november cpi inflation is next. that's when "squawk box"

returns, november consumer price index inflation. okay. we'll be right back. over the eqm that works for you. at national, you're in control. skip the counter, choose any car in the aisle... and manage your rental right from the app. so you can mix work... with leisure. or leisure... with work. giving you the control to find the perfect balance. go national. go like a pro.

welcome back to "squawk box" right here on cnbc. we're a few minutes away from november's cpi inflation data. we have been watching the fut futures this morning, they're continue to go pick up speed. the s&p 500 up by 10, all of these gains continuing to build. you have a fed meeting taking place today and tomorrow, with the decision expected tomorrow. november cpi coming out in two minutes time, and we have been watching treasury yields as well which has been such a huge part of what's taking place over this entire course of the year. yields have been driving every other market, and the ten-year is yielding lower than it was yesterday at 4 .17. the two-year at 4.67. rick santelli is standing by at the cme in chicago ahead of that data. that is pretty important number because of the fed meeting, because we're at this inflection point, where we don't know when they're going to start cutting

rates. >> yes, and there's good evidence of that. if you look at yesterday's options, for example, the 87 billion in three's and ten's, the three-year option was very poor. the ten-year option was definitely below average, it's not as horrible as the three-year. even though each of those auctions established a high yield for a week on the tens and for the month on three-year, right after the auctions, yields were moving down, and they were moving down before the auctions. there is a bias here that the fed is done, that we're going to start getting rate cuts in early 2024, and that inflation is just something not to worry about. if any of those aren't true, and this number furthers the cause in one direction or another, it could have outsized consequences in the market. 4.10 is the big area in the ten-year, that's the support area. it's been holding for the last several days. it was tested several times last

week. look for headlines to be unchanged again because gas prices, of course, have been pushing down. on the other hand, look for core prices to be buoyant to the up side. one of the traps is that everyone is annualizing rates of inflation, based on better than expected currently monthly numbers. that could be a mugs game in the end because of the volatility and the notion that it's come down, but it's coming down too slowly, and we're not near 2%, and the numbers are out. it is 8:30 eastern. headline number is up 1/10 of a percent, which is a bit hotter than expected. we are looking for a second month reading of zero. last month's reading of zero was the best since may of 2020. food and energy up 3/10 as we discussed. that makes sense because the gasoline prices, of course, being down on the headline, obviously not done enough. up 3/10.

in the rear view mirror, it was up 2/10. we had 3/10 in august and september. so the annualized rate is not going to move lower. the three-month was 3.14. the six-month was 3.2. they're not going to breach the 3% on these numbers. let's look at year over year. 3.1, exactly as expected. 1/10 lighter than 3.2. the best we had was june of this year at 3.0. that was the best since march of 2021. and if you strip out food and energy, it's up 4%. exactly the same as our last read, and the last read and this read, well, they're the best since may of 2021, but that is a blessing. i'm sorry, 3.8. but it's a blessing in disguise, becky, because we haven't been below 4 r%, that means, since m of 2021. and that is significant. now, i'm going to throw something else out there that i normally don't throw out there, and that is, if you look at the

cpi indexes, the raw indexes, in september, at 307.78, that is the all time high going back over 100 years. it's 307.05 right now. the core, which is seasonally adjusted raw data is at an all time high at 312,.25. never ever been higher. the point here is that we annualize and look at numbers at this point forward. if you go back in the rear view mirror, inflation compounds and it's that dynamic that the public is not very happy with. back to you. >> that is a lot. rick, stay with us. we're going to bring in more voices to this too. for more on this data, i want to bring in our senior economics reporter, steve liesman, and betsy stevenson, at the university of michigan, and joe, snbc nico securities, chief

economist. steve, we're going to go to you first for a little more context on the numbers we're looking at. up .3%. rick pointed out things that are very concerning. >> first of all, some things that i think that might concern the fed is we're still not getting the sheltered disinflation we thought we might got. i think that's going to be a bit of talk about that today. 04 on the shelter after 03. i don't have the owner's equivalent. that went right in front of me. that's another table i can call up in a little bit. food at home is down. talk about people are concerned. there's been so, i've noticed this, that in the circulars you get, theres is a little more price competition at the grocery store. that's up. food at home, 0.1%. as rick pointed out, gasoline flattering this index down. 6% on the month, down 8.9% year over year, and then a big

surprise here is an increase in used car prices, up 1.6. there was general belief this was going to fall. it did not fall. it was down 0.8 in the prior month. the reporting by phil lebeau suggested it might fall because of his reporting from the auctions. another interesting thing is we talked about all of this holiday spending that's been out there. two points, one is that apparel is down 1.3%. but also real earnings, inflation-adjusted earnings up 0.5% after being negative. so as you'll note, the cnbc mrf retail monitor noted a healthy gain in november, as did the bank of america gain earlier on the show. all of that powered by consumers, and consumers being helped by inflation rising less than in this past month their wages rose. becky. >> steve, let's talk a little bit more about this with joe,

obviously this has huge implications from what the fed may be looking at. what would you take away from this? >> steve makes a very good point about what the fed will look at. the thing is on the energy side, what's really important, energy is down 5% year on year, and as energy moderates, you're going to see all of the secondary, and tertiary effects which bled into the rest of the cpi. those will come out. transportation obviously is a huge cost, and of course petroleums in a lot of different products. as energy moves lower, you're going to see your core rate drift down, and i think the trend is lower. with housing, we're going to have a record amount of family units built this year, and that bodes well for much lower rental prices going forward. we are seeing the rental vacancy rate rise. these data will keep the fed from being too dovish. we're on course for fed easing

and lower inflation. >> fed when? >> i know the market is under 50/50 on a march cut. we've got three employment reports between now and then. a march cut very much comes into focus, and that would be consistent with history, when the fed basically waits about eight months from the last height to the first ease. >> are you in line with that thinking? you think the fed could cut as early as march? >>. >> i think anything is possible. that wouldn't be where i would put the balance of my probability, and that's not because i see anything bad in this report. i think inflation is moderating. i think that we're seeing what we want to see. but we know that getting all the way to the fed's target is going -- you know, is a long process. and i think the way they succeeded that long process is they hold.

i had wanted them to get to the high rate and hold, hold, hold, for a long time. they have been doing that. and now i'm going to say on the other end they're going to be careful and should be careful when they start to cut. and we do still see some -- it's not concerning trends. it's that we need to get inflation to their target and so it's going to take some patience to get us all the way there. >> rick, you pointed this out before the number came out, the expectation the market has at this point, the cuts are coming and coming soon, and anything that pushes the markets off of that belief could lead to some real volatility. where do you come down, rick, just in terms of what it would actually take the fed to come to the idea that they have to do this. especially when they have been so vocal about being higher for longer and wanting to make sure that inflation doesn't come back into the picture. ? >> you know, they have been vocal about higher for longer.

it seems like a bit of a game to me because it certainly seems as though most fed officials, if you lump it all together, you have some sticky voices, and even paul gets a little sticky on inflation, but for all practical purposes, it seems as though the fed wants inflation in the rear view mirror, and that's the signal many investors are getting. and the tail is wagging the dog a bit. we see numbers, and we have smart experts on, and i think there's a component here. i don't look at any of these data points and see that we have made any significant progress since november 14th when we had our last look. as a matter of fact, i think there's been a little bit more heat turned on many of these metrics. the fact that equities have a built in rally, and treasuries have a built in rally pushing yields down is kind of the rorschach of it all. i don't suspect we'll get cuts early in 2024, and i'm sure, you know, many of the fomc members'

heads are going to explode but many of us think there's a bias in an election year, so that also tips the needle in favor of potentially being investor looking to be aggressive on holding in both the treasuries and the epidemquities and rally everything. i'm not in the camp, and i don't see the rorschach progress. i see inflation coming down, and maybe inflation is peaked. but to think we're going to get to 2% after the fed and all the fed officials and the chairman made such a big deal. you can't change 2% in the middle of the game. it seems as though they haven't but people think they have. >> let me go back to that issue, typically they would cut after 8% hike. there were a lot of people that said it would take something significant, a massive downturn in the economy or something breaking in the system. do you anticipate either of

those two things happening? >> they could, but i'm assuming that over the next few months you're going to see a much weaker labor market, that that unemployment rate will go back up to 3.9 and above 4%, and that's what i believe they are going to focus on. it's going to take a while to get to 2%. once the labor market deteriorates and the fed is worried about downward momentum, that's when they reverse. the election is an issue next year. i think that makes it more likely they go sooner rather than later. can you imagine if the fed was to cut seven weeks before next week's election, or wait until after the election is over? if the labor market is soft. that will get them to move. >> betsy, any concerns you have because a lot of the people we have spoken with today, including people who have real data like bank of america, the bank of america institute, say that the economy is really chugging along from the perspective of the consumer.

the consumer may not be spending quite as much as before. but their wages are still increasing and their spending is still increasing. not at the same levels of increase you have seen before, but on both fronts, that does not sound like an economy that's slowing down. >> i'm going to take a moment to celebrate the idea that a 3.9% unemployment rate is too high. i'm all on board with that. i didn't expect to hear that from someone on this show. and so, you know, i do think we might see the unemployment rate tick up. i don't think that the fed's going to cut for an unemployment rate below 4%, unless they feel inflation is under control, and i just -- it does feel like the economy is strong enough that it's not going to happen that quickly. i don't think we're going to see a real softening, significant softening of the labor market in the next couple of months. there's just too much momentum from consumer spending. with, as you pointed out, wages going up. and prices of some goods are coming down.

like we look at the overall inflation rate, savvy consumers out there are, you know, buying more of the stuff where the prices are coming down, and going to try to avoid things where prices are coming up, and they may not even be experiencing as high of an inflation rate as what we're putting out there as the overall number because they are making smart purchasing decisions. you put all of that together, and that's why we get consumers who are able to continue spending. there's a bunch of stuff that slowed consumer spending. i expect it to continue to slow. i think this slowing, you know, it does feel like the fed has just put us in for a soft landing and, if the landing is real soft, and the slow down is real slow, i think that they're going to think hard about what to cut rates, i don't think that we have the data there yet. >> steve, last comment on things that you've seen with all of this? >> well, you know, contrary to what people may think, it does not pain me to say this, rick nailed it. i believe that powell is going to look at in number, and i

think one of his responses is going to be, well, show me the progress. i don't think he's going to see as much progress as rick is right. i think it's a wor sharorschach. i think he's going to look at the owner's equivalent rent number, 0.5% ticked up. he's going to see we're stuck in the above 3% range. i looked at this, becky, as somewhat of a tennis serve, and whether or not it aced the serve would have been a low number, a number that came in below expectations, would have put powell back on his heels in terms of trying to serve back the idea of sticking in place here. i don't think he's back on his heels on this number. you know what, there's been progress, we were 3.7 a few months ago. we have -- it's higher for

longer than what. >> it's higher for longer until it's not. >> it's higher for longer than you think it ought to be, even when you see inflation coming down. i think you need to finish the sentence in your mind until you get a better idea of where the fed is. even if inflation comes down, stays down below its peak level, it's higher for longer until they're sure it's extinguished and that's going to be the message of powell. >> i'm sticking with my higher for longer until it's not, folks, thank you, betsy, joe, rick, steve, we appreciate it. when we come back, a lot more on "squawk," we're going to talk about the new inflation number, and how it could play into fed official decision rates tomorrow. steve will be in d.c. with the fed chairman. we'll see what's said tomorrow, but former dallas fed president in the meantime is going to join

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new in the last half hour. we've got news for you, the

board of harvard corporation which oversees harvard university is standing by embattled president, claudine gay. that news just crossing the wires. president gay is the right leader to help our community heal and to address very serious societal issues we are facing. the statement saying the corporation's decision was unanimous. >> okay. i was looking in a little deeper into this because the statement that they put out also says they looked into her academic writings, there were questions raised. >> about plagiarism and the like. >> by bill ackman and i hope they know something about this because those are some pretty harsh accusations to make. they say with regard to her academic writings, the university became aware in late october of those allegations regarding three articles at president gay's request, they initiated an independent review. on december 9th, the fellows reviewed the results which they say revealed a few instances of

inadequate citations. they say there was no viation of harvard's standards of research misconduct, but president gay proactively requesting four corrections in two articles to insert citations and quotation marks that were omitted. when you omit quotation marks, isn't that plagiarism? i guess it depends on how extensive. >> not great. it's not great. >> i mean, this is kind of baffling to read it. >> as i said myself, four score and seven years ago. >> richard fisher is here with us. we're going to talk about the cpi number. i didn't realize you were an overseeing at harvard too. >> there are two governing bodies, the overseers have been around since 1636, the oldest corporate board in america. the senior board is the corporation, and that's what you're referring to here. >> you've got to be glad you're not there as an overseers at the moment? >> claudine gay, i chaired the social sciences committee for the college, and she was the

dean at that point, and she's a very good scholar. she's a very decent person. i think the real issue for the corporation is she strong enough, not just to deal with this issue, but the disorientation that harvard's had toward woke issues, the left wing viewpoint and and so long. even mike bloomberg when he spoke at graduation as a commencement speaker said there's something wrong with this university because 90% of the faculty supported hillary clinton. i remember him saying that. i thought the then president of the university would fall out of her chair, but the fact is i think this is an opportunity for president gay to tackle these broader issues here. there's an idealogical imbalance at harvard now. it's getting to be extreme. some faculty are terribly disappointed and worried about it. it needs leadership to affect a whole panoply of change. for me, the pressure she's been under, on this particular issue, this is an opportunity if she's

a good strong leader which i hope she is, i hope she becomes, then it's a chance to change the whole tone at the leading university in the united states. >> how do you do that, because the faculty picks the faculty? >> there are a lot of faculty members are worried about true freedom of speech. so it takes leadership. you're the president of the university. you have a great provost at harvard as well who leads the faculty. there's an opportunity for change. if they don't change, it's amazing how many prominent people confront me and say you're from dallas, how do i get my son or daughter into smu or tcu, somewhere other than the ivies? that's not a good thing. we're seeing it at stanford as well. a lot of turmoil at stanford where i went to business school. wherever i went, since i left has turned left. >> what would you do? would you have kept her in this position? there's a vuriew, i think, amon

some that they're pushing back as what they think of as the donor class pressuring them, the political class pressuring them, and they don't want to be seen as almost buckling under this pressure. there's an element of that in the discussions i have had. >> you know as well as i do, i'm sure that's part of the deal, plus, she's a new president. she was just installed. i think the fact they broke the mold, a woman, african american. they're going to be very, contrary careful here. but i think the bottom line is give her a chance. give her a chance to lead. right now, she just had a big pratfall. let's see if she can recover. >> in this statement harvard put out, harvard university tweeted out 31 minutes ago, in it, they shut off the reply section. so you can only like this post or retweet it. >> that's interesting. >> how is that for embracing

free speech? >> well, we all have our opinions, becky. >> if i was a business, actually, using those services, most of these -- >> then you have toreply. >> it just means we can see what people think about the statement you put out. >> we'll see. let's get to economics. >> bill ackman will have retweeted it and the replies will be on. >> i guess you can check out the al alternative. >> not just bill ackman. ia mentioned the donor class. it has a huge endowment. very important. they named this medical school after the chan family, $185 million, et cetera. there is going to be pressure from donors. and again, the question is how do you receive that pressure, how do you manage it, deal with it, and change? this is the big challenge for president gay now. >> you think they need to change? >> she has to. >> let's talk about why we

actually brought you here, to talk about cpi, what it means for the fed. let's focus in on what this means for the fed as a former federal dallas fed president. >> i don't think it changes the attitude of the fomc, led by jay powell, chairmal powell. they're not going to get rid of the 2% target. we talked about this many times here. they're not making much progress toward it right now. this is a 4% year over year on the core. and i listened to the previous discussion on unemployment, the election year, et cetera. 3.7% unemployment is historically low. when i was there, if we pushed it lower than 6%, we felt it would have great inflationary pressure. this business, they go to 3.9 and then they'll suddenly be worried, i don't see it. it's got to be in the high 4s. and as far as inflation is concerned, it's got to -- you have to be confident it's not going to rear its ugly head

again. consumer spending as you pointed out is good. why? people have jobs. real wages are going up. the emphasis on goods, foods, et cetera, walmart's recent discussion, how they were seeing price changes and deflation, those are goods. we're a service driven economy, and we're still seeing consumption on the service side. so i basically am of the school they're going to hold for quite some time, longer than the market is discounting. here's the good thing, we have gotten back to almost normal financing costs and we distorted it. while i was there, we took rates to zero. we destroyed price discovery, and now we're back to normality. the problem, becky, is the amount of debt that has to be refinanced. the previous decade at the low end of the range at 4%. the ten year is at the very low end. >> what do you say to market watchers and there are a lot who think the fed is going to cut rates by march. >> i don't believe they will.

there are two issues there. in terms of the trading community, it's short term bills and fed funds and short term money. in terms of the real economy, meaning businesses, et cetera, the real issue here is the treasury debt borrowing schedule and the fact that $700 billion or $800 billion in private debt will roll over next year, and the following year in 2025, over a trillion, on top of the treasury's borrowing aids. we'll watch how the auctions go that took place recently. they weren't great, but it wasn't that bad. i think they're going to get worse. so there's going to be a lot of pressure from notes out to bonds, and on the bill side, that's where the fed isplaying and treasury is issuing more and more. >> richard, thank you for being here. and wearing several hats, as you eatoee do. grt s you. >> "squawk box" will be right back. unlocking th e power of thinkorswim, the award-winning trading platforms.

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let's take a final check on the market. you saw that cpi number. we have seen a little bit of a pullback in the futures. before that number, the dow was indicated up 130 points. now you have it up by 30 points.

s&p had been up ten points, now it's indicated down 3.5. they're indicated up, the nasdaq futures, only by ten points. let's look at the treasury market too because that's the really interesting point. the yield on the two-year is back above 4.7%. that's the big mover, 4.74%. ten-year is above 4.2%. that does it for us today. we'll be right back here tomorrow. right now, time for "squawk on the street." good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber. big morning, futures slid from the highs but they hold gains as november cpi comes in mostly in line. headline runs a tenth hot. year on year falls to 3.1 ahead of the fed decision tomorrow. stocks holding at highs of the year after that key inflation read. what does it mean for fed rate cut expectations?