14th, 2023. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm bertha coom i'm becky quick along with andrew ross sorkin and mike santoli. joe is out today. let's look at what is happening with the u.s. equities at this hour. you will see the dow is indicated up by triple digits. a gain of 105 after all of the gains yesterday. s&p indicate up 13. nasdaq indicated up by 67. that comes after the dow jumped to the record in yesterday's session. up 512 points for a gain of 1.4%. s&p and nasdaq rising 1.4% as

well. the dow closing above 37,000. what happened? >> you know, my first take was the market had relatively high hopes that the fed would, in fact, back away from any real explicit plans to tighten further. those hopes were exceeded. the takeaway is the consensus view they will cut rates next year strictly because of inflation is not predicated on the economy he weakening more. it is the math. to me, it is about we got where we needed to be and inflation is lower than the fed thought. even in september, they said year-end, it will be higher than reported. the way they reacted is not just of what powell said, but the lead-up of data.

the burden of proof. >> i expected powell to be more rec reticent to say we will have more rate cuts next year. acknowledging what everybody has seen, but i got used to the fed stepping back. andrew? >> i'm with you, becky. i was in shock. i thought we would be in the tea-leaf reading process this morning thinking what is he trying to say? if he says it, will he be worried the market flies and is that going to create inflationary pressure to make it harder for him later? i was surprised. by the way, it may make it harder for him later. i was thinking of the jamie dimon commentsabout inflation being more persistent. we'll see. >> i was impressed that he spoke what everybody was thinking. it felt like he was speaking the

truth and honestly from what he was seeing. i don't expect that from fed officials. especially the fed chairman. i don't expect them to say exactly what they're thinking. go back to the greenspan keeping a wrap around things and having to figure out what they mean by how far they raise their eyebrows? >> they say we got policy right. we don't want to get tighter for the sake of getting tighter. the encouraging part is the outlook for the economy is embedded in the fed forecast. it is not wonderful. under 2% gdp growth. they pencil in unemployment rising to 4.1%. it is not about running the economy at stall speed or worse in order to get the job on inflation done. >> he did say very clearly inflation is still too high. andrew, you bring up what jamie

dimon worries about. we had ken on yesterday. he is worried about government spending pushing this up. it will be very interesting to watch how this plays out and see what the next numbers show. if you listen to the entirety of powell's speech, he acknowledged all of those things. we all hear what we want to hear. the market, the part of the market, itching heard plenty to feel like they were justified of what is happening. >> becky, you are right. there was something human about it. un-greenspan-ish. the market appreciates that. the question of whether in this rolewhere you are supposed to, you know, make it be very direct or supposed to sort of, you know, leave everybody to guess.

>> on the one hand, you have to keep in mind he is trying to somewhat accurately convey where the majority of the committee is. >> true. >> you had dovish people on the committee. i don't want to necessarily be obs obscure. the market, very well, could be overshoot in the short term on this. ten-year yield under 4%. the fed said long-term yields are higher. he declined the opportunity to actually make the reverse argument yesterday and say we can't ease any time soon because mortgage rates will crash from here. by the way, they will. >> i'm in the middle of it going up. i talked to the guy yesterday. it's at 4% and barely holding on. what is my rate today? when i listened to it, this leaves them open for a lot of criticism. if inflation comes back and they don't cut rates and if something happens on these levels. i thought listening through,

everybody will hear what they want if they want to criticize him. he was straight forward and speaking and acknowledged every one of the issues. it is that he spoke so clearly that anybody wants to hang thei. >> all that matters is the inflation path from here and what they do next or not do next. whether they were chasing inflation, he had to grab the data points. university of michigan he expectations and job openings. he had to send the message that we are not close. now, it is just about what the inflation numbers come through and the trend is encouraging. >> let's look at the treasury yields. the yield on the ten-year note at 3.951%. two-year note, below 4.7%. the two-year note at 4.332. yesterday, that was the number i

was watching. holy cow. you have to be kidding me. >> if they say by the end of next year, we don't know the forecast. the dot plot is a best guess. 4.6 for fed fund rate. two-year yield is on the downside. on today's "squawk planner," more central banks on the agenda today. we hear from the ecb and bank of england as well as the jobless claims and november retail sales at 8:30 a.m. here in the u.s. mike, look at adobe shares. they are lower. sharply lower. earning of $4.20 a share. missed estimates. guidance disappointed the street sparking worry it could take longer than analysts expected for artificial intelligence to boost its results.

with the decline, the stock is up today around 75% for the year. you see the chart. it is indicative to me, becky, of all the companies that could s succeed, nvidia is its own category. we keep waiting and asking about the big tech software makers and how much a.i. will change their business and boost earnings in a meaningful way. adobe is probably the one company where you can see the a.i. in the software today. it is remarkable if you played with it. it is shocking how good it is. you are having people using it and clearly it is not benefitting them the way they he were expecting. i think microsoft talked about the benefits for it. you know, does this become a feature that everybody or is

this a new world that benefits everybody? i think there is a question about that long term. >> what does it do a little bit? i haven't played with it. what are the cool things? i don't know how much of it is something we don't understand. >> you know when people talk about a photoshopped picture and take two pictures and put them in one and it doesn't look right because you can see they are overlapping. one reason we are worried about misinformation, if you had photoshop, you could take two pictures of us, becky, from ten years apart, in totally different scenarios and put next to each other and they would blend completely. someone standing on the beach and you don't have the full beach behind you. you highlight the beach and it makes the beach longer. the framing works properly. you want to add a cloud or tree? it doesn it and it is realistic.

it is being used today and it is not improving the outlook for the company because the technology may become an expected feature that everybody will have. >> guys, i don't know if you saw this. yesterday, dredge had a story about a.i. news anchors tested in some places. they looked pretty good. >> we're going to be out of work. >> it is writing the copy. might as well have them read it. >> no smart alec responses. you can control what the anchors say and when they shut up, which is a welcome feature around here. i saw that and thought the same thing. >> a quick note on adobe. the enterprise spending piece of business with the guidance shortfall. it echos what oracle told us. we have warning from pfizer and etsy. fourth quarter numbers in general are looking soft in

terms of earnings. markets will look through that if they think the economy will hold up well next year. it is interesting as we wait for the a.i. to become the driver of these businesses. coming up, former fed vice chair roger ferguson will join us next to weigh in on the fed rate path and expectations for the bank of england and ecb later today. as we head to break, check out shares of apple. hitting a record high surpassing the record set in july this year. stock is up 52%. "squawk box"ilbeig bk. wl rhtac >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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the fed holding rates steady for the third straight meeting is indicating three rate cuts in the new year. let's bring in former vice chair roger ferguson. roger, we knew yesterday's decision in the press conseconference that the fed felt the policy was restrictive and the inflation was below expectations for this point the year and they hewould look for a pivot. the comments were de-linking the economic path next year of easing. what stood out to you?

>> i think three things stood out to me. first was the market reaction. i think it was probably outside of what anyone was expecting with what powell said. second, i would say they, themselves, are feeling more comfortable. powell said it was too early to talk about rate cuts and three weeks later, he admitted the rate cut discussion was at the table. and third, the real expectation of three cuts being so clearly pointed out in the so-called dot plot. for me, it was a move that was a little more firm in the rate cut direction than i personally expected. >> so, where does that leave us? clearly, the market is going to test exactly how fast rate cuts might happen. goldman sachs is pulling forward the expectation of when they start and how deep they go.

largely, it is because each time chairman powell said if the economy holds up, we won't get easier. it is making it a higher threshold to easing. he seemed to decline that. do you think the markets have overshot this or is it in a place where the fed can live with here? >> first of all, we'll find out. once they come out of the so-called blackout period, we will start to hear from them and observe if they are attempting to aggressively push back which powell did not do yesterday. i think what is really interesting is now the entire dynamic is not whether or not there will be cuts, but how early. i think it makes it more challenging for the fed. you had some people talk about the fact we had fiscal stimulus running through the system. obviously, with the rapid decline in interest rates, that will create more forward momentum. while rate cuts are very much on the table, i don't think it should be a foregone conclusion yet it has to be in the first

part of the year. there are good signs of underlining strength. they want to try to execute a soft landing and get that inflation down to 2%. i think he, himself, said that the last mile may be tricky because there are the kinds of cross currents we're talking about now. >> roger, i don't know if you heard our earlier discussion. i was taken with how human he sounded and recognizing -- what he said did not surprise me, but because he is the fed chairman saying it, that surprised me a little bit. it was more than i anticipated. we expect fed chairs to be oblique and hidden. it sounded human to me. the market will take and run with whatever phrase he said. if he looked at the entirety of the comments, he said inflation is too high. he said all of the things. he also said things that anybody who wanted to think rate cuts are coming is able to laser

focus in on it. >> i think that's right. first thing, becky, those are central bank transparency for a while. long ago where the days of mumbling. chairman powell is very much in that camp. secondly, you know, the so-called dot plot, the sep as it is called, you cannot hide from that. once the committee puts out they are expecting three rate cuts, that is the central tendency and that is the median view. it is hard to nuance that when the conversation is already around, you know, how quickly rate cuts are here. final point here, you are correct. if you read everything that was said, there was still a tone that inflation is still too high. still tone in there that we are not sure the job is done yet. i think he said the phrase, if we have to raise, we will. you know, to your point of the weight of the human nature

seemed to be we are looking at cuts which is a move from three weeks ago when it was thought to be premature. i guess now it is perfectly okay. >> look, the market can acknowledge that we're not there on inflation. in fact, the dot plot, as you mentioned, had the cuts in there. it doesn't have inflation down to the target at the end of 2024. there is leeway in there. you mentioned the fed has tried to plan for a soft landing. i keep bringing up 1995 every time. not because it is a perfect mo model, but a takeaway from the the period when greenspan followed up the tightening cycle and eased a few months later with a decent economy and acknowledged the unemployment could go lower without stoking more information. i wonder if there is an analogy here to say we have a tight labor market and we don't

necessarily need a lot of people out of work to do the job on inflation. >> look, i think powell has been saying that all along. early on, he said that the challenge is going to be to try to get the number of job openings the down. the jolts data, which is new in this process, is front and send he a center. there are two ways to fix that. you know, he was hoping for and let's hope that it worked and the way they managed to fix it is they bring down openings gradually to be more in line with the the number of unemployed and bringing people in the work force. you can imagine and he has said all along that the path is narrow and there is a path toward getting inflation under control without crunching the labor market. the other thing to recognize is some of that goes back to the

old debate of permanent versus transitory. the team transitory thought it would be months. in hindsight, it may well be the healing of the supply side of the economy took not months, but years. so, you are getting, hopefully, a combination of the right amount of tightening and slowing of the economy and giving the chance for the supply side to heal itself and improve. what's very unusual here is we never had such a dramatic supply side shock. that takes history and rewrites it. this was a very unusual configuration. >> roger, we have to run. quickly, when we look at the dots plots and say they are cutting three times next year and everybody was looking before and they say they are idiots and the dots plot is wrong? >> the dots plot is the current

expectation. what is interesting is they are saying currently we expect -- and they do what the data calls for. in o in the marketplace, where it is talking about cuts, cuts, cuts, the dots plot is reinforcing what the market wants to go. they didn't use words to push back aggressively on that. we will see what happens when they he come out of blackout. >> roger, thank you. sometimes powell tries to downplay the dots plot. he did not push hard on that. roger ferguson, thank you. new york fed president john williams will join "squawk box" come at 8:30 a.m. eastern. >> yay. that's big. >> it will be a good one. coming up, citigroup offering early bonuses to staffers who agree to leave the compy. 'lte y autanwel lloubo that rig after this.

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welcome back to "squawk box." we have to talk about this. citigroup offering to pay staffers a portion of the bonus early if they leave the company. bloomberg reports they are making this to a number of staffers to keep the preferred stock wardss s staffers to keep the preferred stock wardss staffers to keep the preferred stock wardss s staffers to keep the preferred stock war awards. citi has cut more than 300 senior management roles and hasn't put a number out on how many more cuts are still to come. they are saying here is the door and here is the money. good through it.

>> the deferred compensation is a way to keep you around. if they think you are staying around waiting to get the payout of the restricted shares or whatever else kicks in. >> right. rather than saying here is the door and we give you nothing. >> it say better deal. fallout from the ghana territory dispute. ghana's president called venezuela's president an outlaw and accused him of taking the oil-richl land. questionable referendum. maduro plans to award operating licenses for oil and gas exploration immediately. the u.n. international court of justice ordered venezuela to

refrain from the status quo. gu guyana will the not give up an inch of land, but now there is oil-rich expectations forr the land, chevron and exxon will gain access. it is rich land and territory disputed. this is guyana's land for over 100 years. they are saying we want this because all of a sudden it is valuable. >> will they go to war over this? >> the problem is, guyana doesn't have the military. if venezuela wants to send forces there, it will be difficult for guyana to maintain the status quo for the last 100 years. this is their property. it is heavily jungled land.

difficult stuff. this is maduro saying we're going to do this. it is what you see in places like russia with putin saying he will take ukraine over things which have been disputed over 100 years ago. this is kind of a nasty move you are seeing around the globe. >> one of desperation. >> venezuela's economy and what they have going there. when we come back, the senate moving closer to a deal on ukrainian aid and border security ahead of the december re recess. we will talk to punch bowl's jake sherman. that's next. as we head to break, let's look at the s&p 500 winners and losers. >> announcer: executive edge is

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look at the futures after we went shooting up higher yesterday. dow jones industrial average would open higher at 107 points. nasdaq up 57. the s&p looking to open around down, but really 12 points. becky. andrew, news out from m moderna and merck. the mnra reduced the risk of spreading melanoma by 62%. both companies initiated phase three of melanoma and small non-cell lung cancer. moderna shares are up 3.7% on the news. we will speak with the ceo stephane bancel coming up in the

7:00 hour. this is big news showing how they are marching along with mrna trying to go after different and ccancer types. now to washington. senate negotiators are closer to striking a deal after the white house called for concessions for ukrainian aid. we have jake sherman from punch bowl news with the latest. jake, how much progress has been made? where could we see negotiations? >> becky, a few things to think about. you have to think about joe biden politics here. that is why the white house is negotiat negotiating. the border has huge issues. he wants to unlock ukraine aid. the big question is number one, will progressives go along? we wrote a lot of progressive angst on the deal on the bill

which in effect restores some of the immigration policies. that is number one. the house of representatives is locked in on two issues. number one, many conservatives and more than 100 of the house of relatioconference does not b they should get more aid. doing a deal to unlock aid is not something they want to do. number two, they are more conservative on the senate than the house. i am bearish for now. this is not a 2023 story. this is a 2024 story. this is not going to be happen in the next week. it is notable that the white house is finally engaging after months of sitting on the sidelines. >> you point to the need for the white house to do this based on polls. there was a bloomberg poll this morning and in the swing states, it shows joe biden is trailing donald trump in all of the battleground states.

things have gotten worse and in michigan, he is declining there. is this worrying the white house at this point? what are the implications of that? >> the white house doesn't want us to focus on polling, the general public, because they think it is early and polling stinks and there is probably something to that. the preponderance of public evidence shows a tight race in 2024. on a host of issues being the economy which people despite flashing good signs, is not up to par and inflation and border and things of that nature. biden's age is another issue. listen, i can tell you on capitol hill to a person, republicans never had a better political environment than now into 2024. some people wonder whether they should not do any border legislation. that means they will own part of the mess at the border. i'll add one more thing, becky,

2024 is an election year. election years are usually quiet. it will be busy in the first four months. the surveillance program and faa reauthorization comes up in march and you will have the border in ukraine issue which is not going away. it is ukraine, israel a and taiwan. three u.s. allies in need of aid. >> that deal will not get done before the holiday recess? >> the house will be out of town by 151:00 a.m. today. if something happens, they can come back. republicans spent years in the house saying we e don't like th christmas season deals. i can't imagine they will come back and do it. >> the pressure on them to do this quickly in january would be

what? >> well, it will be that ukraine needs money, number one. it is interesting. volodymyr zelenskyy when he was in town told fox news and told mike johnson privately, he does not need the money before the end of the year. that will change when it comes to january. there will be intense pressure for ukraine and israel, which is an ally and country that the republicans have aligned with over the last couple decades. i think benjamin netanyahu will come to congress and say $14 billion is something we can use. it is time for you to pony up. >> jake, before we let you go, it seems nobody in washington can make a deal ever except you, because there is a transaction that was just announced within the last half hour. punch bowl buying electo anal

analytics. i want to understand. >> it is a non-partisan transaction. we are digging deeper into the area of core compecompetency. we are digging into the politics of legislating. the deal came together over the last eight months to allow our readers a deeper insight into congress. we are excited about what that will bring in 2024. >> jake, thank you. >> thanks, becky. >> great to see you. talk to you soon. >> thanks. okay. when we come back, we will talk about rents. they are falling in manhattan. robert frank has that story after the break. reminder, you can get the best of "squawk pod" on your favorite podcast app and listen any time. we're coming right back.

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welcome back to "squawk b box." if you are apartment hunting in new york, good news. rents are falling. robert frank joins us with more on that. >> andrew, good morning. this is the news renters have

been waiting for. median rents declined 2%. it is the first time in 27 months that rents have fell in the largest rental market. median rents at $4,000 a month. average rents are still above $5,000 a month and apartments are 11% more expensive than pre-pandemic. rising supply and falling employment in the financial and tech industries and affordability is bringing the prices down. the brokers say landlords don't want to cut the list prices, so many are offering concessions like a month of free rent or free parking. better deals are leading to re rentals. prices could fall further next year with inventory rising 30% over last year. don't expect bargains especially at the high end. luxury apartment prices reached

$104 per square foot. the average price for th three-bedroom is $5,150. the prices started falling in july, but in new york city and manhattan, it kept rising through september and october. finally now, we had the turn. it also helps the overall inflation picture. >> that's what i was going to say it does help the inflation picture. what will happen as you play this out and you have been covering real estate for multiple decades, i don't want to age you, but do you look out and say rents will be cheaper and maybe home prices, too? >> i think so. the home prices is the big question. becky was talking earlier with the ten-year yield come down under 4%. you know, we are waiting for

that to really come down to reapp reflect the ten-year. logic tells you if rates come down, that frees upinventory. we could actually see a better balance where inventory grows and you get more supply. more people could move out of rentals and into the sales market and possibly buy again. that could be another source of weakness for the rental market. unclear how the sales side will play out next year. lower rates is better for supply and inventory has been the big constraint on the sale side in new york and nationally. >> robert frank, always telling us what is happening in manhattan. thank you, sir. i appreciate it. coming up next on the other side, we will talk to the great walter isaacson. media deals to drive artificial

intelligence models. the author of the biography that everybody is talking about is elon musk. we are coming back with walter and more. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. with gold bond... you can age on your own terms. retinol overnight means... the smoothing benefits of retinol. are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin.

welcome back to "squawk box." this morning, openai linked a deal with politico and business insider that is axle springer, the multiyear agreement compensating axle springer for the content openai will use to generate answers on chatgpt and train its models. the associated press with a similar deal. joining us is walter isaacson, adviser partner at pro

alignburg, professor at tulane. the list goes on and on, of course. we can use the whole segment to go through the bio at this point, walter. well, i could be flippant and say when is it all the books you're writing are going to be written by a.i. once they have consumed all of your previous books and everything else? and is this a good thing or a bad thing that the guys are doing all the deals? >> it is a really good question. one of the things you bring to the party, i bring to the party, is we go out there. i live in an air stream trailer for a year in texas watching musk watch the assembly line. at the moment, no robot can be doing that and taking notes and processing it. certainly the day my book comes out and a.i. bot could take the entire book and process it and repurpose it and repackage it and that's why i think what axle

springer did has a wonderful smart ceo matisse dovener and ap as well saying you can scrape all of my content and then have a much better bot, but you're going to scrape my content, we're going to have to make a deal. you're going to have to pay money. i would hope my publisher simon and shuster and your publisher, andrew, would say, yeah, if you want to take that entire book and ingest it and make it part of a training set, that is like if you want to make it into an audible book or something, we're going to have an arrangement for that. and that's where i think we're going to see the conflict. i'm really glad axle springer is jumping on the case. and so is the murdoch empire, by making this a copy right issue. >> do you think that there is a first mover advantage to making the deals? meaning, i have a view, i may be wrong about this, that those who make the deals early, the value proposition to an openai is that

the ap archive is very, very valuable. maybe doing it through politico could be very valuable. i don't know. but that once you actually capture one or two or three big archives, the other archives therefore become less valuable because you may not need them. you know, i know marc benioff owns "time" magazine. that archive unto itself, you know "time" better than anybody, they've been -- i say this with great respect, one thing they did over many, many years, they would pick great quotes on a fair use basis out of all the newspapers when they were writing a profile of someone sometimes. if you go back to the archives, they actually have some of the best stuff from everybody else's -- from everybody else's journalism. which is very interesting issue. so all of a sudden, if you were to license that archive, you more mine the value of the original archives where some of this material came from. >> this is where we get to the fair use law, and it has come up

to the supreme court, even with my friend len goldsmith does a picture of the musician prints and it is sampled by andy warhol, his piece of art, how much can you use without violating copyright? and the interesting thing is, printables of copyright apply to a.i. and to all new technologies. i think this could be a godsend for good journalism. we have gone through a decade, actually 20 years almost, in which good journalism has been decimated by the internet because the business model doesn't work anymore. that's why "time" is so thin. but, if you are creating good well reported exclusive journalism, if you decided you're sending a reporter that the rafah crossing in gaza and spend the money to do that, then you're going to be able to license your content and there will be competition, i use three or four a.i.s right now, grok

and openai and at a certain point, there will be a differentiator which is which of those has content that is trained to be the most reliable because one of the oldest rules in computer science is gigo, garbage in, garbage out. who puts in the best training data? >> so the next question, i was going to go to grok and elon musk. when i spoke to him two weeks ago, he said something fascinating, which was that -- >> he said many things fascinating when you spoke to him, but let's stick with whatever you want to pick. >> on the a.i. front, he said, look, all these models including openai have effectively been training on copy righted material the entire time. it is a lie they haven't, he said. he said it will get worked out in court, probably in, you know, in a long time from now, after, you know, everybody built their systems anyway. he also, you know, when we start talking about the value of the data that he has on twitter, he's now offering, you know, any

investor in x is getting 25% stake in his a.i. company. and so how do you see that data stream? is that gold? >> absolutely crucial. >> garbage in, garbage out. how do you know what is going to be the good stuff. i know it, but some of it is very factual, some of it is not. >> yeah. well, two points there. first of all, the data stream, the billion tweets today on twitter is the high mind of humanity. enormously valuable. when he was first closing the deal in october of last year, i was at one of the meetings and he got dark and angry and he said we're going to cut off the api, meaning, you know, the interface, that google and microsoft and other developers can use to get access to some of our data flow. and i remember people got really upset. why is musk cutting this off, it makes it harder to study things in twitter.

and the reason he said to me privately is because he was starting an a.i. company, and he didn't want microsoft to be able, every day to be scraping that data for openai. now comes the second part of your question, which is really fascinating, you want that data stream, let's say, a twitter, high mind of humanity data stream, you don't want it to be too polluted. otherwise it is not going to be good. you're going to get a grok a.i. that does really toxic things, and the fact that he's allowing the twitter feed to become more controversial, more toxic, more letting out fringe theories, in the long run, that's going to hurt the value of that stream. >> walter, we'll talk more about this. i have to catch up with you on 100 other things. hopefully we have an opportunity to talk to you again very, very soon. but thank you. >> always good to be with you. when we come back, the bank of england's rate decision is just moments away. plus, more reaction to the u.s.

central bank signal for rate cuts next year. the dow closing at a record high above 37,000 for first time ever. futures indicated up this morning. dow up triple digits. and we have a first on cnbc interview with the ceo of moderna on the company's new drug trial results to treat melanoma. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. inve, do you consider climate risk? changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments? ice offers data and markets that can provide critical insight. manage your climate risk with ice.

good morning, everybody. an early christmas for wall street with the dow topping 37,000 for the first time ever. we will have a breakdown of the fed's decision and market expectations. breaking news from moderna on its treatment for melanoma patients. the ceo stephane bencel will join us. the push for child safety online. we will talk to billionaire and former l.a. dodgers owner frank mccourt about his child safety initiative. the second hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" here on cnbc. i'm andrew ross sorkin with becky quick and mike santoli. you are watching the one and only "squawk box," show you the futures right now, this morning. you do have some green arrows after a lot of green yesterday. we're still on that high, dow jones looks like it opened u809 points higher. treasuries all based on, well, i don't want to say all based, a lot based on where jay powell things are going as we flip it around. ten-year note down to 3.962 and the two-year at 4.332. so, big moves in the equity market and bond market this morning. >> also a global move -- bank of england, the interest rate decision, holding steady.

the vote was 6-3. this was as expected, although there was some sense out there that maybe there is going to be pressure building for the bank of england to ease as well. so, did not do so, third straight meeting, just like the fed paused three straight meetings in a row. well, big news driving markets yesterday and this morning. the federal reserve signaling it would cut rates perhaps several times next year. steve liesman joins us now with more on the morning after. hey, steve. >> just looking at the gilt there which seems to still be down. talking about the fed, of course, surprising markets with a pivot to a more neutral stance sooner than expected by most fed observers and markets. also acknowledging it discussed interest rate cuts at the meeting this week. what changed here? okay, well, it backed off future rate hikes fairly definitively. the chair acknowledged the simple proposition that if inflation falls, the fed can cut rates, something that fed governor waller talked about earlier. the average fed forecast now

sees three rate cuts in 2024. that is equal, by the way, to the decline in forecasts in inflation next year. it is worth pointing out here as excited as everybody wants to go, money is not going to be free again. fed officials on average do not forecast loosening financial conditions on a real or inflation adjusted basis. in addition to strong bond and stock market rallies you all know about, the probability of a march rate cut rises now, call it 90% from 46%. and now pricing in seven rate cuts in 2024. sorry, that should be rate cuts, apologies for that. for 2024. with a year-end rate now of 3.72. fed chair powell did couch all of this in caveats, inflation has to keep coming down, and stay down. the job market has to keep loosening. and economic growth is expected to moderate. if not, powell said, hey, the fed could hike again. one of the big effects of the

fed pivot is the loosening of financial conditions, lower bond yields, higher stock prices. they could make the fed's inflation fight harder which is why many were surprised the committee went as far as it did yesterday. maybe just as important is whether the fed's pivot is global. my quick read of the rhetoric of the boe, they sound a little bit tougher. they say they are not convinced that services, inflation and wages are on a downward path and now we await the ecb, and whether la guard holds the line more so. however, it is difficult for those two banks to remain as tough as they have been, given what is happening at the federal reserve. all of their bond yields fell along with u.s. treasuries and now, of course, as you know, currencies are in play with the weakening of the dollar relative to the euro yesterday. >> exactly. steve, you know, with regard to this idea that financial conditions are rushing to loosen even more, and whether that

makes the fed's job harder, powell didn't really seem to want to seize upon that point, at least not too vociferously yesterday. what is underlying this decision to, you know, in a more transparent way, pivot toward seeing easing over the horizon, do you think? just a buildup of good inflation numbers? >> you know, i went back and tried to figure out, you know, was there some telltale sign we missed out there. i went back and read his remarks at the end of november. i -- it is not a straight line from his last remarks to today. i think a couple of things, yesterday's ppi, i don't think you can underestimate that because of the effect it has on the pce that is coming next week. it is going to really help that number and we saw a bunch of economists bring down their forecasts for the fed's preferred inflation indicator next week. i think that the market maybe had a more hawkish interpretation of the cpi this

week than maybe fed chair powell had. in addition, i think his committee was moving and powell always likes to be sort of in the center of his committee. i think they were feeling like, hey, we are high, we have been high, and then this notion that fed governor waller had laid out is just -- it is not really a surprise. it is just sort of saying the quiet part out loud. if inflation falls, then the fed can cut rates. >> yeah, this is kind of where the math is. the other piece of it is, and i think maybe this was what underlies this idea that maybe they would be a little more hesitant to go this way is the notion that the last stretch of ground before you get to a 2% inflation target is somehow more difficult than each percentage point before that. and, i mean, powell was noncommittal on that idea. that's one of those things that is said without necessarily having a firm basis in why that would be the case. >> right. so the theory behind that is that you got all of this improvement in inflation from really resolving the supply side

issues. and that the next bit was going to be the impact of fed rate cuts and that was going to be -- fed rate hikes and that was going to be more difficult and more challenging for the economy. there is no evidence behind that, there is just -- it is just an idea that the last that was going to be tougher and also significant, i think the market took a big signal from this, it has been said before, perhaps not by the chairman, i don't remember necessarily, but that the fed could be cutting rates before the fed hits the 2% inflation target. >> i believe he said that, in a very hypothetical way in a prior press conference, but that was when it was so far in the future that, you know, it didn't have a lot of bearing on that. you know, pointing out too, if you looked at the rest of the projections in terms of what the economy might do, where employment might go, it is not like this economy is reaccelerating and it is boon times. still talking about less than 2% gdp, real gdp, and 4.1% on the

unemployment rate, which is a bit higher from where we are. >> right. so it is .4% higher in the unemployment rate. they have the economy running below potential at 1.4% gdp next year. and i think that's a part of the forecast. they still want to see this economy moderate, they still want to see the job market loosen up, all of those are key. and i don't know, mike, what your thing is, i'll throw it back at you, did the market get ahead of itself here? and i think the market has trouble processing nuance, right? it is all zeros or ones as far as the market is concerned. but when i look at the real projected rate for next year, it is still 2.2%, which is the same real projected rate for this year. so, the fed in its own mind from a real basis, inflation basis is not loosening up the reins that much. >> it isn't. the market, i think, always has that impetus to say once we know

what the direction is going to be, and it is acknowledged that those are the next moves, you know, we're going to push on that and see what happens. i think we also have to keep in mind how much can change in four, six months. remember, right after the svb regional bank crisis, the market was pricing in rate cuts by the end of this year. it was sort of at this mode of saying, you know, it is just almost a reflex reaction. >> regional banks have done pretty well. >> they have done great. the rally in bonds has taken all the pressure off the balance sheets. >> a show of hands. i don't know if you have four of us on screen, steve, andrew, me, mike, put everybody on screen for a second if you can, if you can do a four-box, sorry, what i want you to think about is were you surprised yesterday by powell's language? raise your hand if you were at all surprised by his language? >> little bit. >> little bit. just a little bit. i thought he spoke the truth, but i was a little surprised to hear him say it out loud. raise your hand if you were surprised, even shocked by how

quickly yields and every other market moved too. that caught me off guard. >> only modestly. >> i couldn't believe -- like the way the yields in particular, how quickly they fell. that was, like, what? >> spring loaded all year and i think that's an issue, yeah. >> i think if you're going to say it out loud, what he said out loud, they would move, but go ahead, sorry. >> go ahead, steve. >> i thought this press conference was the one who was going to give in january. i thought he had an interest in holding the line one more meeting. i thought for sure this was coming. i'll also give you a reporter's notebook here. all my questions i had prepared ahead of time before seeing the statement, obviously, were more -- were more confrontational in the sense of why aren't you reacting to the change in inflation? why -- how would you insist the market is wrong here? and, of course, he didn't -- those questions were not necessary because of the steps that the fed took toward the

market here. >> maybe that explains. i thought it was very human response, mike made a very good point earlier. he had to deal with the reality of the dot plots. people seeing the fed was expecting these cuts to come. and he also had to project commentary that was reflective of the comments around the table that he had been hearing for the last two days too. >> that gets to the comment i made earlier he was sort of losing his committee or needed to -- wanted to be more in the middle of his committee when it came to policy here. and his committee clearly had moved to a place where if you look at the dots, it is interesting, five officials called maybe the dissenting dots, five officials have 100 basis points of cuts or more built in. we don't know who those are. but some are looking to be easing even more. now, all of this, of course, is conditional. i want to point out one other thing that is i think a topic for later today or tomorrow,

next week, is a lot of folks went into ride the treasuries and the ten-years, they were happy clipping coupons at the treasury, and where they were happy collecting 4% or 5% at their money market funds. are they feeling like they made a mistake, do they need to come rushing back into the market. what is going to be the effect. a lot changed in the last 24 hours. a lot changed about the investment thesis and we need to start thinking about well, what does all this mean now for where you had your money before, does it need to go back into stocks, is investing right now at the dow at a record, is that the right question? >> i love that jay powell speaks clearly and honestly and we're still going to spend hours trying to digest what he meant when he said that. steve, thank you. this was really, really interesting. we're going to still try to figure out what all the moves mean. when we come back, though, moderna's ceo stephane bancel on the treatment that the mrna treatment with merck's keytruda

reduced the risk of death by 49% in melanoma patients over just keytruda alone. we'll have that conversation next. and later, budget committee chair jodey arrington on where things stand with ukraine and israel funding as congress gets ready to head home for the winter recess. gets rea ihos. quk x"ill be right back. ( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative

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moderna and merck announcing new developments in the treatment of melanoma. the combination of mrna 4157 and keytruda reduced the risk of recurrence in death by nearly 50% over just keytruda alone. both companies initiated phase three trials of the treatment for both melanoma and nonsmall cell lung cancer. and joining us is the ceo stephane bancel. you had a lot of announcements on cancer, but this seems like a pretty big one. the idea it reduced death, reduced recurrence, and this was a study that was done on very high risk patients that were already at stage three and four of melanoma. following through with this, tell us about the results, what it means. >> good morning, becky. we're so excited. if you remember last year, on the same study, we described the two-year data and it was 44%

recurrence, survival, which is huge. it is one of the best drugs for patients. and now after three-year mark in the same study, we are almost 50%. the two curves are differentiating further as time goes by. that's exciting because not only we think it is a huge impact, one in two people, think about the number of lives that can be impacted and more people can be saved and live a normal life, with the diagnosis of cancer. and stage three and stage four. in a phase three study, stage two, we believe the earlier you go in the disease, the stronger it is for a patient. meaning individualized treatment should work even much better. >> and let's talk about that. the mrna shot, you know, we call it a cancer vaccine, i don't know if that's exactly what it is, but the mrna shot in combination with keytruda does

what? how does it -- how does it come up with the better results? >> so, basically what we do is we individualize what we make for every different human being. what we know today is that cancer is a disease of dna. so what we do is we start with a biopsy, take a little sample of the cancer and we look at all in the dna of a cancer cell. we compare that to the dna of the same patient of a healthy cell. we send both and compare base by base, letter by letter, where are we in term of mutation, where are they? and that finformation comes bac to moderna's factory and we make a product just for your cancer or just for my cancer, teaching the system what it missed, and that's why it is such a profound and lasting impact, which is why i cannot wait to see in the four-year or five-year data.

if you look at it, the curve is flattening. people aren't dying anymore. it is remarkable. >> that seems like the type of thing you want to get on market as quickly as possible, particularly if you're somebody who has just been diagnosed with melanoma. i know there were 325,000 cases that were diagnosed in 2020 around the world. how much longer will it take to get this to market. what time frame are we looking at? >> so if you look at the typical time frame of waiting for phase three, which is ongoing, you're talking about 28 time frame. what we are i think discussions in the coming months with regulators around the world to figure out together is there a potential path for approval? we believe that some countries could launch as early as '25. we show that to r&d and it would be depending on decision by every regulator. if you think of the profile of the benefits as we said, one in two people survival, this is a big deal. if you look at the safety, the

trade-off you have to look at, the safety is very similar to keytruda alone. it is a good safety profile. so the risk-reward is there. the phase three is already ongoing. it is going very quickly. the regulators are going to want to make sure we are regulating phase three as fast as we can to get the data from phase two. and then there is manufacturing. we built a new plant in massachusetts earlier this year. the team is working really hard, the same team that did the covid startup, and were very successful with this during the pandemic. and so we could be ready as early as '25. it would depend on the discussion with each regulator around the world. not in the u.s., but people in europe and people in asia as well. >> stephane, we're looking on screen at a chart of moderna shares since the pandemic began back in march of 2020. up 280% over that period of year, up over 10% today on the news. if you're looking at the stock year to date, it is down by

about 50 or 60%. i don't know if we can check this out based on where the stock is up today. you have the same issue, about 51%. you have the same issue that pfizer has, just in people thinking, okay, this is a covid vaccine company, and there is not nearly as much demand for covid vaccines now that we're not at the same panic point that we were. what do you say to investors, just in terms of what you have in the pipeline with the potential there is for this? >> i think the company is in a quite different situation. number one, we're gaining market share in covid. that's good for sales growth. we are watching rsv '24, that's great sales growth. we have seven phase three product in the pipeline. this is a big platform company. this is information-based, mrna, molecule platform company. the pace at which we're moving is remarkable. you look at rsv, between the start of phase one and phase

three data, it took us 24 months. this is three times faster than the typical vaccine development in the clinic by the rest of the industry using analog-like older technologies. and so the pipeline is there. there is going to be a lot of critical results in 2024 across many products. and we are very focused on the sales. we announced on tuesday, i'm going to be directly walking with the different regions of the world, including directly having the u.s. reporting to me and we're obsessed about execution of sales for covid, market share, increase the market, rsv, and other products are coming. it is going to be an exciting couple of years. >> stephane, i'm pretty excited about the potential for cancer drugs, cancer immunizations, whatever you want to call these things. but it seems like it is a longer way off. a lot of drugs in the pipeline now are things like a combination where you include flu, covid, and rsv together.

i always have been concerned about getting all those shots together because i'm worried i'll have a worse response, i'll get sicker. what do you say to people with that? particularly with after the last results on the flu, you did show that it had a higher immune response, but you discontinued the phase three that would have shown whether it was more effective than other flu shots out there. there were some analysts that raised some questions about that. >> sure. so the flu is basically we change with the design of the mrna. the phase three we stopped was the one strain, 90%. we had to revise the strain. the most recent study we showed had very, very strong data. thoseproducts could launch as early as '25. rsv launching in '24. there is a lot of product launches. so we talk about cancer, that will launch as early as '25.

if you look at the next 24 months, it is going to be a dense news flow, dense product launches, which is why i want to be really helping the team to maximize those launches. not only in the u.s., but around the world. there is a lot of regulators i want to get those products very quickly for that population. so some products might launch earlier, outside the u.s. and in the u.s. and we're having a global presence thanks to covid and good discussions we had and the relationship with governments and those regulators. >> stephane, thank you for coming on today. the stock is up 12% on this news, which is pretty exciting about what you're doing at least when it comes to melanoma today. thank you for coming on with us and sharing these results. we appreciate it. >> thank you. >> stephane bancel of moderna. andrew? coming up on the other side, the stocks on the move in the premarket. and later, ivy league presidents are under fire for their tepid response to heated rhetoric on

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than expected guidance for 2024. specifically annualized reoccurring revenue for its new digital media segment is forecasted to decline 1% year over year, that's a key metric for this company because of its subscription-based model. the ceo said pricing increases during the quarter were just perhaps a bit too much, but he did add that a.i. enthusiasm is the tailwind for the business. another bright spot, net income, increased by 26%, still you see shares are down more than 3.5% for adobe. andrew? >> thank you, frank. coming up on the other side of this budget committee chair jodey arrington will join us to talk funding for ukraine and israel and other big issues in washington. is there a deal to be had or not? "squawk box" comes back with that and more after this. what is cirkul? cirkul is

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welcome back to "squawk box." u.s. equity futures showing further gains after yesterday's rally. the dow did close at a record high, above 37,000. the s&p 500 just over 2%, from its own record high. that was set almost two years ago at the very start of 2022. nasdaq indicated higher by 70 points. meantime, congress getting ready to head home for the holidays with no supplemental funding deal and now a looming

government funding deadline next month. joining us now to talk about all of this, texas republican congressman jodey arrington, chairs the budget committee. good morning to you. let's first talk about -- we're going to get to what's going to happen in '24 about our own budget, but let's talk about the budget situation as it relates to providing funding to israel and to ukraine and to the extent you think there is any chance that any money is going to be sent that direction, given where you folks all are in those discussions. >> well, i think the question is more for chuck schumer in the senate because we have passed funding for israel. we offset that. that's the responsible thing to do. and andrew, you know all the data on where we are as a nation in terms of our indebtedness. i think the projections next year are a trillion dollars, just to service the debt. that's just the interest payment. so we're in a bad way in terms of our fiscal affairs and in

rapid decline. so i think that's the right thing to do. now, we can negotiate what the offset is, but i'm proud that speaker johnson is changing the course here in washington, and the culture, and restoring fiscal responsibility. in ukraine, i think the issues there are different. we need clear strategies, we need an endgame, we need to define success. and i sent a letter to director young well over 30 days ago, i think she is weeks overdue to respond, to give a full accounting of how much money we have spent. it is not just the $114 billion we appropriated. there have been reprogrammed and repurposed funds from other accounts and the constitution is clear. literally explicit in that we should have an accounting of all public monies. we haven't gotten a response yet. so i think the onus is on the president for the things i just mentioned with respect to ukraine. and then here's the final piece, we got to secure the border.

we got to do -- we got to address first and most important security threat to the american people. and that's the southern border. >> let me ask you think, no, the r risk of not providing funding to ukraine is what in your mind? meaning, let's say, let's say that the border doesn't get done the way you want it to get done. there is a debate about how the border should get done with the democrats. even take the funding piece off the table, we could debate the irs defunding, funding the irs. how critical or not is the ukraine of it all? >> i think we have a security interest to support ukraine. i maintained that this entire -- for almost over two years now. i think we should fight alongside, not with our soldiers and sailors, but in terms of targeted security support, supporting our allies against

our enemies. and i think we have gotten some return on investment there. i mean, 5%, which is what we have spent relative to our entire defense budget for 5%, we have wiped out 50% of vladimir putin's fleet of tanks, for example. 300,000 plus russian soldiers have died and the ukrainians are fighting with tremendous vigor. and so i don't have a problem with supporting our allies against our enemies. it is the way we're doing it. and, and i think the first imperative in national security, in the first priority, is the border, period. and we have gotten nothing. so, and we're losing tens of thousands of people to the drugs that are coming across, the crime, the terrorists, all of these are record numbers, and we just have -- we have zero interest in doing these other things until we secure the border and stop this nonsense.

>> that's what i want to ask, so there are these -- i hate to call them chess pieces, but these chess pieces, all of which have important priorities. and i think we both -- you and i will both gagree the border is critical issue. we can debate which component parts of how you deal with the border and that's clearly there is a nuance. the republicans, democrats want to deal with the border. they want to deal with it maybe in different ways and that's part of the problem. but when you hear the president and the administration say that not providing funding to ukraine or not providing funding to israel is an existential issue, not just for ukraine and for israel themselves, but for the role of america and its agreements and its arrangements with its allies, do you buy that, do you not buy that, does it change the dynamic forever? >> i think that -- i think context is important with that statement. and i think we should invest in supporting allies. israel, for sure, long-standing,

deep relationship. and we have been there for him and we'll be there for him through this war with hamas. i think you can argue that there is a national security interest there in ukraine. that's why we have spent over 100 billion to date. however, however, we have a bigger threat in my mind as the budget chairman, as i look at the $34 trillion in debt, the 125% debt to our economic output, which is higher than world war ii and we're in relative peace and prosperity. so, sovereign debt crisis and a border crisis, i think are bigger threats and we're not -- we're not responsibly addressing those. that has to come first. >> mr. chairman, final issue then, let's talk about the irs, i know that is the offset at the moment that is on the table as it relates to all this to the extent that any of this even has an opportunity to be put forth in a meaningful way anymore. but, i will tell you my own

view, it always seems that the irs at least from all the protections that people have made and not just projections, but real life experience, that when you put more money into the irs, you actually get more money on the other side. and so it is not -- this idea it is paid for, it is, like, it looks like it is paid for in a short-term basis, but in a long-term basis, it makes no sense. what do you think? >> well, i think that if we actually had progrowth, prowork, proenergy policies we would see record revenue to the treasury. look, we need to enforce the tax laws, no question about it. do we need $80 billion? do we need tens of thousands of irs agents to shake down 70% of our working families and lower and middle income? i think that we need to be

targeted, we need to utilize technology. there is a better, smarter, and lower cost way to address that tax gap. look, meanwhile, they're projecting, by the way, over ten years, $100 billion in more revenue as a part of this tens of thousands of new irs agents. we improperly pay waste, fraud and abuse $250 billion in one year. and $80 billion in medicaid alone. we could pay for israel, we could pay for the whole israel package, andrew, by just requiring a social security number for people who use the child tax credit. that is$22 billion in savings. if we had a work requirement, like we do in food, the food stamp program, for medicaid, just so we make sure that we have work capable adults, working in this country, which we definitely need, that's billions of dollars.

we have others beside the irs. that's one reasonable one, but we have many others. >> it is a longer conversation and probably longer debate. chairman arrington, we hope to see you again. if we don't see you before the holidays, happy holidays, talk to you in '24. >> god bless. >> my gosh, andrew, you're right. it is getting to that time of the year. we got to tell people happy holidays. this is it. so much to do before we get there. when we return, though, ivy league presidents under fire for their tepid response to heated rhetoric on campus. are dei and free speech on a collision course in education? jon fortt will break down both sides of this argument. right now, as we head to a break, let's look at this morning's premarket winners and losers in the s&p 500. moderna actually leading the way. that stock up by 9% right now. "squawk box" will be right back.

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♪ ♪ ♪ be ready for any market with a liquid etf. get in and out with dia. welcome back to "squawk box." higher education diversity policies are in the spotlight as college presidents from harvard and m.i.t. and penn facing a big backlash with their tepid

response to heated rhetoric on campus. so the question, are dei and free speech on a collision course in elite education? jon fortt is here to weigh in on all sides of the issue. jon, what do you think? >> yeah, andrew, diversity policy and free speech are on a collision course. because of hypocrisy. diversity policies started with great intentions back in the '70s and '80s. and it became clear that legal desegregation alone couldn't change the complexion of our social institutions, even schools. so, high schools tried busing and then magnet programs. colleges meanwhile with admissions. more minorities showed up on campus, went through massive culture shock and many times left before finishing. the hard truth was it wasn't enough for schools to simply admit these promising minorities to the pressure cooker socially alienating environments, but too many tried to game the system. they manufactured a diversity

and equity and inclusion industrial complex. today with emotions boiling over during the latest war in the middle east, the hypocrisy is exposed. the same schools that suppressed speech to try to protect one group of minority students is now waving a free speech banner to justify vile rhetoric. >> did some schools just do it wrong? >> well, andrew, on the other hand, sensible dei leadership is probably the only way free speech can thrive on college campuses today. healthy campuses had to be communicates not just lecture spaces and arenas for rhetorical gladiators. students have to live together before they can disagree and learn from each other. at its root, that's the promise of dei done right, helping a community understand differences, commit to fair treatment of good faith people

and ideas and pursue shared values that move society forward. it is essential that we have college campuses where students can openly argue against the constitutionality of affirmative action policies or the appropriateness of transgender athletes, competing in women's sports and argue about the impact of higher interest rates on poor communities and the ethics of -- the beauty of the elite american college experience, it equips students with academic rigor and confidence at such a high level that our desk workers and diplomats can perform on the global stage with no safe spaces. america needs students who can dismantle as what they see as bad ideas without threatening the people who happen to disagree. >> but people are pretty worked up about this, jon. and here is my question to you. i heard you walk through a lot of different things in that sort of second argument you made. and let's go very controversial, to me, and this is just me,

saying genocide to jews on one hand is abhorrent and free speech or not, to me, if you say that kind of stuff, you shouldn't be on a campus, you shouldn't be at one of these schools, period. just as if you said genocide to any group of minority or otherwise, frankly. on the other side, i think there is a completely valid, frankly even argument you may or may not agree with it, but you could argue policies of how israel is going about this war and those things could be distinct. but the question is, in a free speech -- in a completely free speech -- are we in -- anything goes speech or in some kind of -- is there some middle ground? >> andrew, i agree with you. i think that's where the community part comes in. when you're living in a family, in a community with people that is healthy, there is language

that you don't employ. i remember this when i was in college, preweb, there were message boards on the back system, when you're just dealing with people at arm's length in text, you say all kinds of vile things. and we experience this today in message boards and, you know, and text chats sometimes. part of what this digitally-driven a.i.-now society is doing is putting us more at arm's length from each other. even in a way when we're face to face, and i think part of what the campus experienced, the residential college experience should do, train us to be able to civilly and productively engage with each other face to face. i think that kind of has to be the strength of america versus other societies if we can train ourselves in the next generation to do that. >> where we want to get to. jon, thanks a lot. see you again soon. the push to improve online safety for kids is coming up.

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i don't know how to thank you. i'm here to thank you. welcome back, everybody. internet safety top of mind in recent months, but renewed push for congress to pass the kids online safety act. our next guest is working diligently to address internet safety and data protection. joining us, frank mccourt. founder and executive of "project liberty" and executive

chairman of mccourt global. fl frank, talk what this is. why is this such an important project to you? how did you get involved? >> over the last decade i've been watching what's happening to this country that i love, and seeing it just get ripped apart, and as we dug deeper into it we just came to the realization that, you know, the problem here is that this omnipresent ubiquitous technology you're all using is actually causing lots of bad things to happen, and we've ended up with a highly centralized autocratic surveillance-type of technology, which is really hurting us in so many ways. whether it's young kids doing the harm, it's well-documented, or just undermining our democracy. not a day goes by where we don't read some other story of the dysfunction and the inability to

even be governable here. you my ask the question, like, why are elected officials not doing something about it? well, they're in the same ecosystem. right? it's completely broken and dysfunctional. as an infrastructure person. by the way, my family's been building infrastructure for 130 years. so we look at this as an infrastructure design problem and if we can fix that, we have a shot now of actually using the tech to actually help us solve problems not create problems. >> get to that. i am with you asking the question, why is congress unable to pass something like the kids online safety act, which if you're saying you're opposed to that, what in the world is wrong with you? we're using our kids as lab rats with this grant experiment we know from studies done is causing them harm, makes them feel worse about themselves, leads to all kinds of online bullying and not to mention the

ex is wal assault that takes place on line with these kids. >> you're talking common sense as a mom, when you protect kids. that's in fact the number one responsibility that we have and the society has. protect children. >> we would never allow this behave to take place in a chuck e. cheese, in a mall, somewhere in the real world, online, suddenly it's okay to get it down to 1% or 2% or 5% of the transactions taking place? >> unfortunately what's happen wig the technology, design of the tech and how now in its centralized form dominated by a few apps, what ends up happening is, the information that they aggregate and apply algorithms, too. by the wear, algorithms another name for artificial intelligence. not a new thing. they're skied actually to divide us, and separate us, and trigger us. >> a response when mad you spend more time online? >> look, algorithms are working perfectly. right? designed to keep you online and

the way to keep people triggered and in defending themselves and the other person defends themselves and so forth, you in an endless loop of disagreement. right? 50/50. everything is, like, stalemate. that's what we're seeing. i would say algorithms are working great. we need to fix that. as far as your -- >> how do you do that? fix the algorithm? >> again, thinking of this as a, from an infrastructure level. the internet 40 years ago, cppip basically connected computers pap thing called that. suddenly a massive computer network. 30 years ago, the world wide web came into being. again, enabled by another protocol. http. this is when data as the name of the game. that data has been sucked up now by a few, four, five, major companies. you know they're names. they dominate our lives. right? they have the value and the control. we believe that another

protocol, call it dsmp, secretaries us as people. returns ownership and control of the data to us as individuals. we decide what to do with it. we decide what apps to use. not stuck in wall gardens and not manipulated. >> takes back control from the googles, from the apples, whoever they may be? apple has parental controls on thing. how is this different? >> because we're talking about the core infrastructure layer now. right? so what -- imagine you being in charge now when you log on to the internet. apple's not in charge. meta's not in charge. google or amazon are not in charge. >> i'll say as a parent i don't know i'm even good enough using parental controls to -- >> it's not a parental control issue. a matter of -- a whole new says of services provided in this new world but the point i'm fundamentally making, unless and until we return our data, our property, i would say our personhood in this world.

right? there's really no difference between your biological dna and digital dna in this life. until we realize that this has been stripped. our personhood has been stripped from us. >> over 40 doesn't care. think their privacy -- >> i disagree. i think they're caring a lot now. what we're seeing realtime now is a mass-awareness that we have a broken system, and it needs to be fixed. >> but if you've got some of the protocols. like let's say want to be on instagram or facebook in europe and have to paper $5.99 if you want it without ads and mining your data, a question how many people would actually pay for that. >> again, not an issue -- i argue we shouldn't think about this in the terms of the way things work now. we should be thinking about, first acknowledging that we have a broken system. right? i think we can acknowledge that. >> i'll agree with that. >> we need to think about how to fix it. i argue you fix it from the ground up and then when you fix it you have a new paradigm.

we shouldn't think of things in terms of the way they work now. think in the way they should work to support kids and protect them and support democracy. >> something congress has to sign on to go through? can't even pass kids safety online act, the idea saying, sure, there has to be an entirely new infrastructure, honestly sounds pretty complicated? >> we don't need congress do. we can innovate our way forward. >> none of the big bucks companies will want to do it themselves. >> you've hit the nail on the head. the question, do we sit here and say, hmm. big problems too difficult to solve and let this continue? with generative a.i. now. fancy name, by the way, for the same technology that basically surveils us, grabs our data, applies algorithms. continue with a broken system make more powerful or fix it before this new wonderful technology is unleashed? the tech is not the problem. how it's designed and used it

the problem. >> what is the answer? government regulation? to force this? or -- >> no, no. >> if it's not big money and not government regulation i don't know how it gets done. >> innovation. innovation. you actually -- remember, 30 years ago there wasn't, the system we have now. people were not -- there was, asking questions like what is the internet? what is the world wide web? imagine the future differently than the past. and that means a redesign of how this technology works. >> frank, intrigued. have to have you back. frank mccourt, appreciate it. >> appreciate your time. >> thank you. it is just after 8:00 a.m. east coast. you're watching the one and only "squawk box" on cnbc. take a look at u.s. equity futures this hour. green on the screen after a lot of green on the screen yesterday. right now dow opens up about 133 points higher. nasdaq up and s&p up 15 points now. all about a big move on the back

of comments by jay powell about plans to cut interest rates in 2024. take a look at treasury yields now. ten year note staying at 3.932. move down two year at 4.315. then a quick look at oil prices. think about wti crude, cost you now $70.84 a barrel. up just a bit in the past day and a half. 2% points right now, becky. >> thank you. shares of moderna shooting higher this morning. in fact, last we looked it was the top performer in the s&p 500 this morning. merck shares also higher after the companies announced new developments in treatment of melanoma. at the three-year mark of a high-profile study a moderna drug used alongside merck keytruda actually reduced recurrence of death nearly 50% melanoma patients. spoke with the ceo in the last hour. >> we make a product just for your cancer or just for my

cancer, teaching all system what it missed. that's why it's such a profound and lasting impact. why i cannot wait to see even the four or five-year data. the curve, if you lukook at it, it's flattening. people are not dieing anymore. >> think new treatment for melanoma and non-small cell lung cancer. look at that stock right now up by 8.5%. over to frank holland taking a look at some of today's top pre-market movers. >> good morning. starting again with adobe. left off last time. shares falling weaker than expected guidance for 2024. shares down 3%. specifically annualized recurring revenue for media digital sebz declined 1% year over year. a.i. enthusiasm is tailwind for the business. another bright spot in the report. that income increased by 26%. again, shares still down. also an upgrade this morning.

piper operating foot locker to overagt raising price target $33 a share. 11% upside where from its trading now. foot locker may be best positioned retailer for a turnaround and could benefit as investors rotate from other retail names in 2024. shares up 4% in the pre-market. citi naming apple top pick for 2024 maintaining its price target 230 a share. more than 15% upside where it's trading now. in the note title three reasons apple can outperform again in 2024, analysts tailwinds of services, growth and a reskellereration of ad extending. trading close to an all-time high. andrew back to you. >> frank, thank you. i want to get back to the broader markets. equities surging yesterday. bond yields dropping after the fed signaled done raising interest rates and would cut them next year. >> so we added the word any"

acknowledge we believe we are likely at or near the peak rate for the cycle. participants didn't write down additional hikes that we believe were likely. so that's what we wrote down, but participants also didn't want to take the possibility of further hikes off the table. really what we were thinking. >> joining us now to talk more about the fed, the markets, the economy. merchant capital founding partner and ceo. bob, great to see you. so curious just what your initial reaction was to hearing jay powell say what he said, and as explicitly as he said it. given that i think a lot of people thought that they would be trying to divine, read the tea leaves, in this case seems he didn't do that at all? >> listen, i think it reflects the fact that i think he's delighted. i think the fed is delighted. it was 18 months, 19 months ago

when inflation was raging above 9%. 550 basis points and increases unprecedented in 18 or 19 months. i think it was march '21 when they stopped buying 120 billion in treasuries and mortgages. so the progress over 18 or 19 months, and andrew, to me the fact that the economy is still growing. the markets, currency markets, debt markets, all in balance i was recent any the middle east and reaction around the world is can think really be a soft landing? so i do think -- excuse me -- i think jay powell is feeling pretty good about the situation. >> is there -- do you have any fear he is to regret his words? meaning get to a period in '24 and he's going to say, know what? actually, inflation has not come down fast as i thought. short of the jamie dimon

conundrum? >> a real possibility. i don't mean it in too aggressive a way, but if you said i'm kind of looking at next year, and economic growth and inflation, i'm kind of, economic growth a little stronger than the consensus. maybe inflation a little stronger than the consensus. so i do think the market's gotten ahead of itself, andrew. pricing in three, four, five rate cuts next year. i just don't see that right now. i think the economy is in reasonably good shape. so i do think the market's a bit ahead of itself. yeah. >> bob, let me add to that. ken langone here yesterday pointing out fiscal spending still taking place. hard to fight inflation when you have a government still spending that much. these are bills already passed, already put in place? >> absolutely. you know, the consumer is still in pretty good shape. i think corporate balance sheets, quite large. >> good news. we should say. >> exactly. talking about good things here. on balance, i think the commit

will probably be a little bit stronger next year than consensus. so you know i would not be surprised if we don't have rate cuts next year. >> i mean, i guess the issue from the fed's perspective is, by their own concession they were late in latching on to the inflation story. >> no question. >> and don't want to compound that staying too tight too long when in fact you'restarting to see slowing, and when the policy rate at this point so far is above even current inflation rates loet alone the target. >> i agree late. everyone acknowledges that and i think the fed acknowledges that. the conclusion in my mind is they're likely to stay a little too long rather than exit too quickly. i think if you go back in history, the bar for actually reversing course on rates is very, very high. so pausing is already in place. but if they move to start to cut rates, that's a pretty big move. i think having waited too long and having seen inflation get

above 9%, for choice, they're going to wait a little too long. why i'm not quite as positive on three, four rate cuts next year. i just don't see that. >> so, bob, quick. you know, for a very long time now you're now in the private banking, private equity space. people look to the value aces of equities almost across the board and said, look. we're on the high side here. we're already on the high side. now we're going to be on the even higher side. what does that do to how you think about buying businesses right now? value of businesses? and, you know, is there a crack in all of that? or if you think that interest rates are actually, keep coming down, will that continue to levitate the equity market? >> we look at the private markets as you know, andrew. so whether it's investing in middle market m & a platforms like cascadia we haven't seen kind of the valuation increases that you're talking about in the public equity markets. one of the things we're looking

at right now is regional banks, and those are down significantly in terms of valuationsrelative to before march of this year when we had the svb, you know, fundame fdic coming in. not seeing valuation lines only the private sector. >> bob, great to see you. happy holidays. see you very, very soon. >> happy holidays.

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it is that time of the morning. right over to steve liesman. he's got the latest european central bank rate decision. steve? >> hey, european central bank moving interest rates unchanged benchmark 4.5% but did bring down its inflation forecast. it now sees hitting 2% target by 2025. 5.4% this year going on a 2. 7 in 2024. a bit more optimistic than the fed. well,ed fed 21 for 2025.

in and around the target by 2025. i don't see anything here about a program, some discussion whether or not they would edit, here it is. reinvest in full principle under pandemic program during first half of 2024. intends to discontinue reinvestments end of 2024. i'm not seeing much. really this comes down to, becky, whether or not christine lagarde president, press conference at 8:45 this morning, pushing back against expectations of rate cuts. already in place, but certainly this morning they are going to be -- pushed higher, because of what the federal reserve did. in part, the ecb has its own independence in what's going on in the fed, but in part it doesn't. over time, if inflation is coming down and the fed is moving faster, it's going to put some pressure on the ecb to respond. one thing i'm going to do right

now. look what's happening in the bond market. the germy ten year benchmark had fallen quite a bit to 209 from 224 yesterday with the fed, and it's unchanged. the other thing i want to check, unchanged at 209. the euro around 109 and also unchanged. not a big change in the market. not a big surprise from this announcement so far. all of the action is going to come at guidance of lagarde at 8:45. pointing out important data in a few minutes. retail sales report for november from the government. you remember, retail monitor had earlier this week show add strong november from that standpoint see the extent to could the government reports. the key question, becky, did the fed see something in the the banking data, the economic data? that made it move more -- that

turned it more dovish in terms of its outlook for the economy and the need for it to support the economy. >> thank you. in the comments, watching the euro, may be slightly changed for the week. up by about 1%. looking over five days. >> sure, you see the pressure that she's going to be under. >> now that jay powell, rate cuts coming next week. doesn't come back with the same thing see maybe the dollar, the euro go higher against the dollar. andrew? talk about what's coming up right after this. more economic data including retail sales and jobless claim. the still far behind donald trump, nikki haley gaining ground and endorsements in the race to become the gop presidential nominee. we'll know what her economic platform and plans can mean for investors. eamon javers has that story in a few minutes. you don't want to miss it. stay tuned. you're watching "squawk box" and this is cnbc.

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. welcome back to "squawk box." talk about the race to be. republican nominee for president nikki haley. >> good morning, andrew. wall street in the middle of a swoon for nikki haley, you say. easy to understand why as gop

presidential candidate. the former south carolina governor offer as mix of republican tax and spending policies without the tendency of front-runner donald trump to attack the companies and without his extensive legal trucks. lavishing haley with praise on cnbc yesterday, and ceo jamie dimon saying democrats on wall street should send her money to ensure a republican alternative to trump. now, haley rolled out her economic plan in september pledging to eliminate the federal gas tax and offer permanent small business tax relief. causing angst to supporters in the northeast where taxpayers generally benefit most from it. also would cut income tax rates. haley criticized joe biden and donald trump for returning up the federal deficit saying she would link federal spending to a percentage of the u.s. economy. also eliminate biden's green energy subsidies saying withhold

congress' pay if it fails to pass the budget. hard to see how to get congress itself to go along with that last one. haley would cut regulations requiring congressional approval to are any federal rule with an economic impact of $100 million or more. haley's critics say although she denounces quote/unquote, corporate welfare now, as governor lavished subsidies and tax cuts on companies such as boeing, volvo and bmw in an effort to bring them to south carolina saying simply offering more goodies to lure jobs from, say, georgia, does nothing to move the needle on jobs nation wide and cause worker tax cuts taxing a burden on people. >> the reason wall street folks have been supporting her, you think for economic policies? do you think the a, just a not-trump, never-trump vote?

what is it? i think both. right? economic policies. traditional republican policies that wall street generally likes a lot. right? low taxes. low regulation. that is music to wall street's ears. then also you've got this electability piece. right? look at polls. nikki haley does well against j joe biden. problem for nikki haley in the republican party, doesn't do well against donald trump. donald trump is far and away the front-runner in these republican primary states. the question is, can she do something to change that narrative to get head-to-head against joe biden? where she stands a better chance according to the polls. >> can you speak to one other avenue, eamon. given the distance former president trump has between himself frankly and everybody. there's a number of big wall street historical donors to the republican party and republican candidates that seems to not be wanting to make a bet at all,

and i don't know if it's they don't want to make a bet or offend the former president, if, in case he becomes the president. a very unique sort of dance that's taking place that i think is different than in previous election periods like this. >> i think you saw even jamie dimon, very outspoken, say that to you, andrew at dealbook. i'm not sure i want to say anything negative about the former president because he could be the president again and i'm have to deal with that. very much that's on the minds of ceos across the economy. because they saw in the first term donald trump very willing to go out and tee off on individual companying, individual ceos for things he didn't like. that is not a traditional republican approach business. right? the traditional republican approach business is, let business be business and get government out of the way. donald trump says, sure. except when they're doing something i don't want them to do in which case i will get right in the way. that's the fear i think in a lot

of ceos. >> eamon javers, fascinating report on nikki haley and what her economy might look like if she were president. appreciate it. coming up, breaking economic data. a new read on jobless claims, retail sales and iormpt prices. stay tuned. you're watching "squawk box" on cnbc.

seconds away from new retail sales numbers initial jobless claims and import price data. rick santelli standing by has the numbers. rick? >> yes. mike, we're anxiously waiting. litany of numbers. retail sales, claims, import, export prices. start with retail sales, shall we? last month we had weakest reading down 0.1% going all the way back to march. jumped up to up 0.3. much better than expected comp us back to last -- well this past september. this past september up to 0.9. a nice pop. last month actually now moves from minus 0.1% to down 0.2%. strip out autos, shall we? still remains nicely positive. up 0.2. looking for down 0.1.

up 0.2, best read since september. strip out autos and gas, really doom 37d gas figured in. three times expectations at up 0.6. also comps to september. take the control group. double expectations. up 0.4. the best since july. now, let's flip gears here to initial jobless claims. 202,000. that's versus a slightly revised 221,000. 202,000's lightest going all the way back to october 13th. second week in october. unbelievable how well behaved this is, and, really, reminds me of how we've had a pillar change with the fed yesterday. we've gone from fighting inflation to potentially fighting recession. so these labor and jobs numbers and initial claims are going to be very important continuing claims stay under 1.9 million.

1 million 8786,000. 1 million 876,000, last month it was is million 856,000 on a subtle revision. now if you think we're done, we're not. import/export prices for november. import prices, down half of what was expected and down 0.4%. down 0.4% is the weakest number. well, just since last month when it was down 0.6, revised from down 0.8. back to september up 0.4. look at x petroleum number significantly improved. once again, good clues what petroleum prices did. number popped up 0.2%. mere image of minus 0.2% expecting and remains 8 out of 11 months now. 8 out of 11 months negative

sign. these instances negative signs considered good. year over year import prices minus 1.4, less than minus 2.1 expected. and if we look at month over month, down 0.9%. that's about in line with expectations. and finally, export prices year over year. down 5.2. exactly at expected. that means 10 out of 11 months are negative. that is, indeed, a good thing. if you summarize all of this, all of a sudden retail sales and claims really matter. we see yields jumping all the way up to 398. 398, the low-water mark for this move interday is today, tonight, 3.93%. we see that at 3.97. down about four basis points and underscoring how quickly we went from 5% to 4%. leave you with one thought, mike. the word "asymmetric."

i found something powell said yesterday very important. rer references, don't want to be seen as hanging on too long. meaning higher for longer. symmetric? i don't ever remember them hanging out too long when it was too low, too long. >> and stronger market. slightest edge on the bond rally. stay with us. steve liesman joining us now with more. steve? >> you know, this is a. >> number. i don't want to take a victory lap but our cnbc nrf retail monitor x autos and gas 07. this surprise is not a surprise to those paying attention our index reported on monday. this is a strong number. rick, remind me again. i can't find it. control group. i thought you said it was a surprise, and i think that's going to flatter the gdp outlook for -- >> yes. up 0.4%. double expectations.

>> yeah. that's a good number. and that's for the month of november. so the, the story that we've been telling, we also have bank of america honon earlier. holidays off to a good start. interesting to me electronic appliances down 1.1%. not to surprised building materials down. heard trouble from loewes and home depot. sporting goods up 1.3% and non-store retails, internet folks, 1%. food service, up 1.6%. consumers are still spending, and then we're not getting the weakness we thought we'd have in jobless claims numbers. mike, concerneding the last weeks somewhere bump up might have seen in jobless numbers could have been related to the strikes. not the striking workers. they don't get jobless, but

folks who lost jobbing because workers were striking. perhaps they've come back, off the rolls. in an elevated level on continuing claims. 202 is a very, very modest number here and this bump up we had to the 220, 230 level seems to have gone away at least for the moment. still a pretty good job market. >> yeah. >> and consumers are spending. that's going to flatter the gdp numbers. >> yeah. steve, stay with us. we're going to add another voice to this conversation. michael ahead of u.s. economics at bank of america and global research. so i mean, the market is now seemingly free to treat good, economic news and good news, seems. because inflation seems on a good path and the fed told us what the fed told us yesterday. what was your takeaway? >> i agree with that. much more comfortable with the idea that we don't need a tremendous amount of labor market pain or demand destruction to bring inflation down. on the margin, good news is, it's still good news. you would need to somehow see it

feed back into higher inflation prints and resurging inflation to change that view. i say the bulk of the data doesn't suggest that's very likely. >> how have you adjusted your view what rates will do next year? what the fed is likely to do to rates? >> so i would say yesterday brought kind of everything around to what we were thinking. looking for a very dovish pivot. expecting opening the door to an easing bias over time, and we got that. so i'd say that the fed kind of moved to where we were, and if anything i think what you heard yesterday is they may be willing to get started sooner than later. >> sooner is -- i mean, do you think first quarter makes sense? are they going to try and waiting a long as seems possible to do so? >> at the moment we think they start in june, but i think yesterday you heard, should the data support starting earlier, maybe inflation comes off more quickly or we get economic weakness they don't expect, then i think march could be on the table.

yes. >> and in what kind of economy will they do that at this point? are we really going to slow down the numbers? they don't seem close to any landing. >> they don't. steve mentioned. our retail cars, data supported a strong number. not a surprise to us. the tea leaves we've been reading suggest the consumer is on solid footing. the slowdown's likely to come in the non-consumer segments. business spending. maybe a bit of a fiscal policy drag. but all together, it's an outlook where growth should hang in there and soft landing seems more likely than it was just six to nine months ago. >> yeah. steve? >> mike and mike, a great question. not to take away the euphoria from around the fed cutting rates is maybe you had expected a decline in business spending, but now that you have rates coming down, what about the impact of financial conditions? two things are out there.

an interesting article, the fed is underwriting the recovery, such that maybe the slowdown predicted won't happen. did powell do too much in terms of going to the other side, and actually -- easing financial conditions too much for what he wants to happen to inflation? such, that too much good news could be bad news? >> it's possible. i would say right now it's -- financial conditions are probably still tight on net. they're just a lot less tighter than they were coming out of the november meeting. so they're tighter than they were, say, last march, april or may. i wouldn't go quite as far as to say they let too much of the cat out of the bag and maybe inflation could reaccelerate but you make a good point. it's not when the fed starts to ease. it's the market being forward-looking. financial conditioning responding in advance of what the fed validates later. therefore, maybe in the second half of 2024, what could be a weak business spending

environment now turns into a more favorable one. something to keep an eye out for. >> rick, you mentioned the sort of asymmetric reaction function of the fed laid out there. quicker to ease in the face of easing inflation than they were to do the opposite back when inflation was too low. now, the market now is going further still. you like to contextualize what exactly the fed funds futures are and are not implying. when we do get these big swings. >> you know, you can only really look towards the next meeting. maybe a little bit beyond that, but when you start trying to price in what's going to occur in may or what's going to occur in the june 12th meeting or the september 18th meeting next year even, end of july meeting, you're really moving out too far. what we should learn from fed fund futures is that the markets are sort of like children. give them one piece of candy, they want five pieces of candy. fed fund futures have now erred

taking unofficial stance that they're done and eases are coming and they're going to run with it and take it a little farther. that's the dynamic to pay attention to. believe me. if one month from now we get new inflation data that reheats, you're going to see the markets react very significantly in fed fund futures from the front and then it log jams all the way down. that is the nervousness about a market that's trying to price these meetings where every month has a contract that affects the next month. so one thing changes, everything changes. it's like a laser aimed at the moon, somebody sneezes or snuc nudges a lot, it moves. that's what happens tying this way down the road. >> i mentioned earlier.

b back, in the spring, sensitive to change. what concerns you in terms of next year in terms of economic outlook? oil prices cooperative. almost everything moved in the right direction, frank? >> literally, since, you know, late october, early november. everything's moved in a very favorable direction for the soft landing camp and the fed's outlook. maybe what's concerning is that rarely happens and rarely continues in a straight-line fashion. i do think we need to be worried about, about the first half of the year and maybe the labor market does soften too much, but from a policymaker perspective, what to do in that situation is clear. how the markets trade that would be quite clear. first half of the year, we are, kind of watching for lag effects of fiscal policy and slow duops in business spending and fiscal drag. where the negative could come in, but as you mentioned, virtually all data conducive to a soft landing. >> all right. steve, if it continues, thank

you so much. >> thank you. >> rick, steve, thanks to you all. okay. coming up, this year restaurant spending. talk about it. what you can expect in 2024. as implications for all sorts of parts of our conversation. fresh off new retail sales number speaking with ceo of reservation platform open table and how things changed from this pandemic. check out big automakers. a comment, all named top picks of 2024 by what we understand no doubt this morning is worried about the industry heading into next year. given more than during the global financial crisis. think about that. still sees great potential for value to unlock. stay tuned. you're watchg quk x"ndin"sawbo a this is cnbc.

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here we go. can we land? you're old enough to do it in the sky now. but it's gross. there is no way we're landing. are you sure no one is watching? gwen mallard! do it now, or we leave without you. ok. welcome back to "squawk box." strengthening last little while strong retail sales and unemployment claims data right at 8:30. s&p up almost half a percent. dow looking to build on its record close up 175 and nasdaq indicated for you 60-point gain. with its latest decision and commentary, the fed is lending more support to the idea we are coming in for a soft economic landing. right now we've got a chance to get an on the ground look at consumer spending and one of the most popular categories. that would be restaurants. joining us is debby soo, ceo of

cooking platform opentable, and debby, lay it out for us. first of all, what percentage of restaurant reservations go through opentable? >> depends on the restaurant, actually. but a large majority of the reserv reser reservations are coming through on platforms like opentable. we saw during the pandemic people really wanted to book online and secure that reservation. restaurants want nad, too. helps with their flow for capacity and how they run their restaurants, and that's a trend that we believe is going to stay. so online restaurant reservations are up year over year. 9%. we're seeing walk-ins and phone reservations down year over year. i don't know about you, but it's been real hard to get a restaurant reservation at a hot restaurant, getting reservations in a contact sport and we think that trend is here to stay for next year as well. >> noticed that, too, but certainly seems like it is with

hot restaurants in urban areas. what percentage -- >> correct. >> -- trying to get a feel how many restaurants are doing this? what percentage of those reservations are coming through opentable and the like, other online reservations platforms? >> 5,000 restaurants. we have 55,000 restaurants on our platforms. generalities. more than half, in some cases 70% or 80% of restaurant reservations are coming through online. >> for hot restaurants in urban areas? >> for hot restaurants, also seeing that in more suburban areas, and restaurants that have been around for a long time, and our local favorites. that's a stat that in a generality is what we see. >> okay. what are you seeing right now, just in terms of demand at restaurants, and what that might mean to ticket sales for these restaurants?

>> demand we're seeing this year is holding relatively flat. if you look at the dining a activity this year versus last, holding stead pip what's going on with the macro uncertainty and inflation concerns this year being flat is pretty good and pretty impressive. we're also seeing, we think it's going to be a really popular and good, strong holiday season. this year for valentine's day and mother's day we saw year over year up activity and expect to see much of the same the next two weeks. >> do you have any sense of ticket sales? because we've heard from wine th enthusiasts and other places that they are paying more in terms of drinks, and that is definitely driving up ticket sales. do you get any access to that? >> yes. we do. so for the restaurants that we're seeing holiday spend, for example. that would include the spend happening in the last two weeks

valentine's day, mother's day, spend about 15% versus normal. we do see that, you know, people are spending more, really prioritizing their discretionary dollars on special occasions while they dine out. >> how is that compared to last year? special occasions and holidays last year? >> year? >> yeah, it's roughly the same. actually, we are seeing a slight increase, even if you look at the increase in spend. this year, it's coming in even higher. >> what are you concerns, what are you thoughts when it comes to the economy? we have been talking all day about the fed is seeing a softer economic landing as a real possibility. what do you think? >> i think it's great, if there's a little more stability in the upcoming year. inflation and rising labor costs and supply costs is terribly disruptive for restaurants. it's an industry that historically runs on very razor thin margins so disruptions like this can be catastrophic to

their pnl. you know, but i don't know. i think this year, there was a lot of uncertainty on the economic front, and we saw diners continue to prioritize going out to eat, continue to prioritize the spearential. so i think even in a potential downturn, that demand is going to hold, and if things get better and that uncertainty subsides, hopefully we'll see more helping. >> one of the huge issues for restaurants since the pandemic is being able to find enough workers for the restaurants. where do things stand on the labor front just in terms of finding people, and what you have to pay those people to come in? >> it continues to be really hard. in october, the hospitality industry lost about 7500 jobs. and there's a lot of issues at play here. one of them is tipping, for example. it's been a very controversial topic and i'm sure you can understand why, from a

service -- i hope we can all agree that a service worker should be paid a livable wage. what's uncertainty -- what's uncertain in what there is controversy about is who shoulders the burden or cost of that. is it the restaurant or the diners. i imagine this is going to be a topic we continue to hear about next year as well. >> we want to thank you, debbie su. >> coming up in just a moment, we're going to talk markets and get you ready for the opening bell. now just a little more than 30 minutes away. take a quick look at the futures before we send you a quick commercial break. dow looks like it will open up 180 points higher an a big day yesterday. nasdaq looking to open up 65 points higher. a reminder, you can get the best of "squawk box" in our daily podcast called squawk pod on your favorite podcast app and listen anytime. squawk returns after this. of a n named dinosaur, colorado.

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welcome back to "squawk box." our next guest says the market rally is not about the economic data we have but more about the data we want. he also says we're in a bubble driven by emotion, greed, and

fomo. joining us is greg branch. cnbc contributor. people thought or people were saying that maybe valuations were stretched to begin with. now, are they too stretched? is that what you're saying? >> i think they are, and andrew, i would add to that probably some questionable policy and posture, adding to that bubble now as well. look, this is the pivot. this is the pivot that the market has been clamoring for since july of 2022. i find it curious that it came now, particularly since the fed in a coordinated effort for the last four weeks has been trying to disavow the market of the notion that rate cuts were anywhere near. neal catch kari said that would be not based in reality to have that expectation. so they did answer a very important question for us, andrew. the question was, we had 500 basis points of hiking. we saw credit respond in the way we expected but we did not see spending respond in the way that we would expect. and the question that had the

answer is that delayed is that imminent, or is that structural been eliminated. i think the answer they gave us is they expect it's imminent. they slipped in there, no one is going to pay attention to this, the expeg tase of 4.1% unemployment. the only way to get there is they expect the consumer and businesses will stop spending more dramatically than they have. >> therefore, you say -- what's doing to happen to equities then? >> the bulls will have the day. they'll have the day, for sure. that was very bullish this pivot. they are considering rate cuts is very bullish. and i don't see any near term catalyst that's going to change that around, much like i didn't see one necessarily in 2021. what will have to happen is it will have to be revealed and i think as we lack less favorable numbers for base effect, it will be revealed we aren't really making that much progress. particularly now that the fed has eased. so if you need to get from 3.7%

unemployment to 4.1%, yet you have just signaled to the business community that your incremental cost of capital will be cheaper next year, i'm not sure that that means they're going to continue to be very discriminating about their labor and hiring plans. that certainly is a curious message to send. so i think what will happen is we lap lower 2023 numbers and it will become clear we're not making progress. >> but that's the question. are you suggesting then -- are you in the jamie dimon camp that inflation is going to persist on a much longer basis? are you -- i'm trying to understand, you think that powell is going to regret what he just said? >> i do. i absolutely do. i think this is his volker 1980 moment. we'll pinpoint this as the action where the posture caused the reflation. so yes, i still have a terminal projection of 6% because i think

they're going to be forced to raise again. >> okay, so what would you be owning or not owning at this point? >> like many, i'm going to be forced to increase my exposure. i don't think there's a fundamental argument on making for that, so i'll look at things that haven't participated just as the mark has been doing, just as breadth has been widening. s&p staples are down year to date, so are utilities, so is health care, so is kbw, so i'll look at things that haven't participated as much because i do not believe this is a fundamental rally. >> greg branch, speaking -- we'll see whether it's truth or not, but we appreciate it. speaking directly, bluntly, we'll say. candid is the right word. a final check on the markets. a lot of green on the screen right now. dow jones up about 214 points.

s&p up about 26 1/2 points and nasdaq up about 75, 76 points. treasuries if you look at the ten-year and two-year, they look, jay powell talked it down, talked it down, ten-year now 3.960. a special thanks to the one and only mike santoli. >> always fun. >> thank you for hanging out. and we'll see you all, becky, tomorrow morning. make sure you join us. "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. futures are holding their gains after the dow's all-time high. the fed pivot in full display. retail sales, upside surprise. jobless claims lowiest since august. the dow crossing 37k for the first time, markets set for further gains at the open.