hill or lack of it. it is friday, december 15th, 2023 and "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site. i'm becky quick along with andrew ross sorkin. joe is out today. we are ready for it. this has been a long week. >> it has been a great week. >> it has been six days in a row of gains at this point. not just this week, but back to friday of last week and thursday of last week. let's see where things stand. if you want to check out u.s. equities, you will see the continued bull run at this point in the futures. dow futures indicated up 128

points. s&p up 13. nasdaq up 45. this comes after the dow closed thursday at another all-time high. now up nearly 7% in a month. as for the s&p 500, the index is up 5% over of the last month. 2% from the all-time high. then you have the nasdaq which is also about 5% higher over the last month. now at a 52-week high. take a look at treasury yields. you see the ten-year yield is still below 4%. handily so. 3.91% is where it stands. the two-year note, i can't get used to the two-year note at 4.38%. we should check out crude oil prices as well. they are on track for the first weekly gain in two months after a bullish demand forecast from the international energy agency. wti is higher up to $72.70 a barrel for the month of january.

we are back where the later months you look at are higher. that is showing up here in the ice brent numbers. if you are looking out further months, the expectation is that global demand might pick up. that is what you see playing out here, andrew. >> i like you said we are back in contango. >> it just means later months out are higher. that's a good thing if you are looking at rprospects for the future. let's talk about the factory working overtime with the industrial output expanded at the fastest pace since february of 2022. growing 6% in february from a year ago in china. retail sales climbing 10.1% from a year ago in november. the fastest pace since may.

all of the questions over what is happening to china, we will see how that economy turns out. more layoffs on the the way at general motors. it plans to cut 1,300 factory workers as a number of vehicles are ending production like the chevy bolt. it will build other models including electric trucks. the plants will come back online in late 2025. the shares for the year are down 2.25%. take a look at this stock. i don't think we can put it up on the screen. shares of lennar under pressure after the 52-week high in yesterday's trading. the home builder reported full-year results that beat expectations. 19% more homes delivered this year than last year. the ceo saying home buying sentiment was impacted by higher interest rates.

buyers responded to incentives that made homes more affordable. that stock down this morning after what has been a rapid rise. let's look at costco shares after the retailer reported better than expected profits in the fiscal first quarter. same-store sales up 4%. the membership fee revenue was a big deal up 8%. the company also issued a special dividend of $15 a share which is payable in january. costco shares up 38% over the last year. up by $9.20 on the last tick. michelle ca ruso-cabrera is her this morning. she will join us later on this morning. she gave me this book. i'm finding some interesting facts. we may dig deeper into this later.

>> okay. >> it's a fun story. costco is a fun story. charlie munger's favorite retailer. one of his favorite companies. he was on the board for a long time. it is a different and unique story because of the membership fees. >> membership club. >> a different retailer. obviously, sam's club followed along with those things. it has been different and insulated than other companies. >> the biggest version of that now is amazon prime. people don't think about that as a copycat thing. in the meantime, the phenomenal camp, but in a different way, or fascinating camp. citigroup ceo jane fraser making a big move to raise eyebrows on wall street. the financial giant is shutting down its municipal business. this is according to the

internal memo. citi deciding the unit is no longer viable with the commitment to the increase the overall returns. the memo says the bank will unwind the unit in the first quarter. most of the employees will likely leave the bank. this is notable because citi dominated the municipal market for decades. a big shift. you are starting to see how it is playing out on wall street. citibank is a different bank than it was five years ago and before the financial crisis and what it was through the mergers that created it. you are seeing -- not the dismantling of citi, but the shape shifting. >> jane fraser has been outspoken and prone to action in terms of shutting down things that she doesn't think are profitable and changing and turning. i talked to investors. a lot of people think it needs severe shakeups. it still remains to be seen how

successful they will be at the end of all this. she is doing things that investors said were necessary. >> i wonder what this does to the municipal market. >> i was shocked it was only 100 people. >> me, too. maybe they were never participating or bidding or winning. if they were, they were doing it at a loss? i don't know. we have more to talk about this morning. when we come back, the bulls continue to push stockslevels, n continue into the new year? we dig into that next. later, we talk about the fed pivot in 2024. new york fed president john williams will join us at 8:30 a.m. eastern time. we want to know what john thinks after the fed decision earlier this week and the comments from chairman jay powell. "squawk box" will be right back.

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pretty tree. the equity markets are in a bull run as we approach the new year.

will the good times keep rolling? joining us is morningstar wealth's martha. what do you think? will this keep rolling on? >> it is optimistic for 2024 when we look at valuations and even in light of the rally. valuationsreasonable. when we see returns like this, the equity returns have been driven by a.i. with the market index closer to flat or modestly positive. 5% or 10% returns. i think there is a lot of room to run especially with the rate sensitive areas which have been punished. regional banks. utilities. small caps. these areas seem poised for better results in 2024. some of that is contingent on

the economic data supporting the soft landing narrative. >> regional banks have done well in the last six months given the fallout in the spring and concerns of something else breaking. you like what you see here. >> we like what we see. a lot of that is based on the price movement that occurred earlier in the year. there was that correction later in the summer. when we take a look at reagiona banks, the appeal is great. when we look at how they behave out of crises and the range going back decades, we find they do well. those are the periods in which they outpuert perform the marke. we look at concerns like customers real estate or higher for longer and we look at the price movement relative to the impairment, we think the price

movement has been more severe. >> i think what i hear is you don't expect the index to run higher from here, but the unloved areas of the market will catch up with the high flyers? >> i think within the equity market, it is a story of the unloved. there are the pockets of opportunity. regional banks one and utilities being another. i think it is a question of what don't you perspective, it is th a.i. stuff. >> not that you think a.i. is not going to pan out, but because they have already run so far? >> a lot of reasons to be enthusiastic about a.i. it is the question of what's in the price. i say that knowing that sentiment will continue to push prices higher. it is not necessarily a market timiing call. >> i like how you are hedging things. if the consumer continues to run ahead, you will be okay because you are still holding on to the

short side with the bond market? >> that's learned from last year is the economic projections is not the only input. it cannot be the driving focus. everything else is calling for recession. you really have to pair it with valuation and the base case economics scenario and the range of outcomoutcomes. we are looking at shorter dated space. a lot of value opportunity of short dated bonds. they tend to do well should the market see a scenario where inflation lingers for longer and things don't continue on the current course. >> you are not convinced the moves this week in the bond market are going to last? maybe this was a shock and everyone thinking the fed was changing course. if the economic data doesn't support that, you could see it

flip again? >> listen, i think valuations got to attractive levels at the long end of the curve. we saw the valuation for the ten-year bond beyond our fair value. the valuation story was strong. we have to remember that powell was focused on the economic data. we believe the economic data is going to continue its current trend, but there is room for volatility there, especially with the market that is so keen to follow each individual data point as it comes in. we're enthusiastic about the valuation. >> what happens if the economy takes a nose dive and things come in worse than anticipated? >> thatis the other side of the tightrope. inflation lingers and the consumer continues to push. the other side of the rate hikes which have been tremendous and at a tremendous pace has a

greater impact on the economy than we understand currently and we see signs of a deeper recession. now in that instance, i think you have to look good with longer-term bonds. those areas can be rowprotectivf the market. there are issues in the equity portfolio. if you look at healthcare and consumer staples, these provide balance to the market when we see economic distress. i think those are nice areas to have within the portfolio as well. >> marta, i can tell you my head has smpinning this week with th surp surpr surpr surpr surprisingly candid comments from jay powell and the market reaction to that. i still can't get over the two-year note at 4.3%. i can't get over what has

happened to the ten-year note and what it means for mortgages. for kwequities. have you had a similar reaction? >> yeah. the size of the moves have been astonishing. i don't know if i anticipated the bond market reacting with so much fervor. it gives you insight into how much that higher for longer narrative had been priced in. i remember if we roll back, it was higher for longer and concerns about the fundamental health of the u.s. government with higher interest rates and lots of debt payments we had to make. there were a lot of concerns bubbling up. the move in the bond market from august through october or something along that time period was a pretty tremendous move. it was a real painful period and now we're seeing a positive reaction on the other side. >> okay. we will see if it lasts. marta, thank you.

look at us. we look like the holidays. red and green. >> merry christmas. >> happy holidays. >> i didn't get the dress code this morning. >> that doesn't work in this theme. >> i know. i know. i'll work on it. the lights will remain on at the capitol as the senate delays the recess for the vote on the aid package for ukraine and israel. this is a beautiful shot of the capitol. next, senator markwayne mullin will give up an update on those talks. "squawk box" returns in just a moment.

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box." the eu failed to agree on the $54 billion funding package. the prime minister of hungary decided to come back to that decision next year. kyiv looked to increase support from its allies. let's talk about the funding debate in the united states. the senate will delay recess to help ukraine. joining us is republican senator markwayne mullin of oklahoma. senator, good morning to you. >> good morning, andrew. >> what is the state of play here? what is the chance anything gets done before christmas? >> it is slim. if the white house chose this week to start engaging with the republicans. we said all along that we have to have meaning ful border security with funding in the israel package. that hasn't changed. republicans in the house and senate are confident in our

stance. we want to stem the flow of illegal crossings. andrew, there are over 21,000 individuals every other day claiming asylum on the southern border. during the obama administration, when they he said it was a cris we averaged 21,000 a year. there is a huge problem. everybody knows that. the biden administration refuses to engage with us until recently. let's say we get a deal done today, but can. it will take two or three days before we can start reading it. reneed to look at the changes that need to be made and start the proceedings in the senate. now that doesn't mean the house will come back. the chances of us having this done before christmas is almost impossible. >> help educate the audience, if

you could. we hear about the border as an issue at large. we talk about the issues at the border. it appears the biden administration is moving on their side a little bit. i don't know where the fault line is at the moment. so much resides with the asylum seekers. what is the sticking point? >> the secure on the border. they want a cap number. they want to reduce the flow by 100 or 200. that is literally putting a pencil mark on a piece of paper. that doesn't change anything. we have over 10,000 a day seeking asylum. that is a huge issue. what they first proposed was $13 billion to put in processing centers in mexico to process individuals faster when they came to the united states.

we're saying let's go to the pact we have with canada and mexico and say that the pact we have between the two countries simply states you have to claim asylum in the first country you enter. if you enter mexico first, you have to claim asylum there first. if you hit the united states, you have to claim asylum there before canada. that would stem the flow, andrew. that would stem the flow by over 70%. over 70% of the people crossing our border are from other countries other than mexico. that could be a simple change that they both already practice. we are not talking about building a wall. we are talking about a change on the books and they won't begin to negotiate on that. they want to have unrealistic numbers so they can say they have done something when really you are talking about 100 or 200

a day they want to reduce by with over 10,000, it doesn't make any sense. >> senator mull in, i understan why we would be in favor of that and canada would be in favor of that. what does mexico say? they will have more refugees as a result. >> we had con vversations with them before. they are saying if you do this, we need help securing our southern border. you know what? if that's what they need, fine. we will help secure the border. it will be more cost effective for us to do that and for us to stop it on our side. they understand there's a problem. since people are crossing their country to get to the united states, they heare not interest to stop the flow. if we engage with this, they need help on the other side. let's talk. >> senator, let's say a deal doesn't happen. what do you think the true

implication is for ukraine or the true implication is for israel or the true implication is for our standing as an ally in the world? >> first of all, i believe we have an obligation to ukraine. according to the budapest pact, if you give up your weapons, the united states will get there if you get invaded by russia. i don't think any of us here think that russia and putin would have invaded ukraine. we have an obligation to them. i feel we will fulfill that. we also know that we're going to do this, but not going to do it until we have border security. the biden administration cannot argue why we shouldn't do this. this is a 70% issue of the population which says the border is a national security risk and we have to do something there. we are actually doing the biden administration a favor by saying

we want meaningful border security. i really do believe eventually we will get a deal struck. we made a mistake in the senate thinking that chuck schumer was the one we needed to negotiate with. all along, chuck schumer is not the person you need to negotiate with. he is not running the senate in an effective manner. my administration feels like we have a very good chance to get this accomplished, but not before christmas. >> if it is not before christmas, that gets us to the beginning of next year. we kick the can down the road again with the budget and trying to make sure we will get the appropriations bills done in it january. >> correct. >> i know you are concerned about our troops over in the middle east. i know you are concerned about what happens in ukraine if putin were to get his way and move in. how concerned are you on the timeline with the issues? the ability to get something

done and make sure the funding doesn't run out and make sure there is not a gap in the appropriations overseas? >> one thing congress works well on is dead license plates. t deadlines. this is not a hard deadline. there are a lot of levers to be pulled to keep funding in ukraine. a lot of funding in department of defense. there is a lot of funding through the white house and executive branch. we're not to that point. really, when we talk about funding to ukraine, we are talking about munitions and draw yawn drawdowns of our own. most of the money in the ukraine package is going to replace munitions and put it back in the stoc stockpile. we have a point we don't want to get below. we can adjust that point for another three weeks to have another bigger drawdown. we are not on a hard deadline like with the cr or other

funding issues. we have some flexibility. we think, becky, this is very important. we are not going to rush so hard just because chuck schumer now wants to make a serious nece negotiations deal. nor will we brush this because the biden administration is wanting to engage now. the last time we have done real reforms to immigration was in 1 1985. mitch mcconnell's first year in office. if it is that difficult, let's not rush. let's get it right. it may be another 30 or 40 years before we have an opportunity to do it. >> senator mullin, can i ask you something that has come up? a spat between you and representative matt gaetz over the last day or so. he was talking about your increase in wealth as a reason to ban members of congress.

>> for him to come out and say i gained wealth because of the ability to trade stocks, i laughed. he wasn't there when i was 19 and 20 and married to my wife of 26 years building our business working 24/7. what i simply said is if you are going to criticize me, maybe you should consider building a company that gains value because that's how you get real wealth. don't assume everybody is trailedi trading stocks. he gets his money from his dad, not building a business. there is a reality issue with matt gaetz and the rest of the people. >> it is interesting. it is a topic we talked about. the ability to trade stocks. it matters to our viewers. >> becky, if you look at what paul pelosi has done, there is an issue. we came in office and she did

not have much money and now she is worth millions of millions. to say i did the same is laughable. we had our business for 26 years. we built it from almost bankruptcy all the way up to where we employ hundreds of employees. there is a difference between that and what paul pelosi did. you cannot put every member in the same bucket. if you attach pelosi to that picture, sure. there are probably a lot of reforms that need to take place. >> are you in favor of the reforms? senator, would you vote in favor of eliminating or outlawing elected officials or members of the senate and congress from trading come completely? >> i don't know if you can do that. everybody has investment portfolios. how do you do that when you invest in the 401(k)? a lot of people with retirement

programs set aside to that. if you have open trading, yes, there is an open issue. you have ethics. any time my financial adviser is trading, i have to report it. we actually do just a standard two-week report withi ethics. we do it so we don't have co compliance issues. anything you are touching or dealing with, the members of the congress shouldn't touch that. you have to be careful. how do you keep someone from trading if it is put in a retirement package which every american with a 401(k) or money set aside with any pension has to do that. >> why is matt gattetz coming after you? >> i'm not a big fan of matt gaetz. i think he has huge ethical issues. he portrays himself as somebody he is not. i just have a tendency to point

out -- the bible says don't point out the speck in your neighbor's eye when you have a plank in yours. he has a big plank in his. >> my kids watched you on twitter or x with the almost fight. they said, dad, you have to ask him about that. does he have a different perspective on that a month later? >> you know, i'm not a big fan of bullies. i grew up with a speech impediment and i had an issue with my leg. i could not argue or run. i had to learn how to fight. i have a disdain for bully. sean bro'brien is a bully. i called him out on it. when the time you stand up to bullies, they back down. from t in this case, that's what

happened. i understand not everybody can do that to stand up for themselves. if you don't stand up to bullies at some point, they will continue to get more aggressive until they hurt somebody. i want to put him in his place. >> senator mullin, we appreciate your time this morning. thank you. >> thank you, guys. >> you bet. >> i like that guy. when we come back, the leaders of venezuela and guyana agreeing not to use force over the oil dispute between the two countries. we will look at what is at stake for stability in the region. as we head to break, here is a look at the s&p 500 winners and losers.

[ "i'll be seeing you" by the five satins ] ♪ ♪

welcome back. venezuela president maduro and the guyana president met in the caribbean to talk about the oil-rich region in guyana. they did not resolve the

dispute. joining us for more on the dispute implications for politics and the energy markets is our chief international correspondent michelle cabruso-cabrera. michelle, they met and agreed to the not use force. this land goes back 100 years. for 100 years, it has been guyana's. what is the deispute? i want it? >> venezuela wants to lay claim to this. the reason venezuela is interested right now is there is 11 billion barrels of reserves there. you have exxonmobil and hess in there and the chinese state oil company drilling like crazy. venezuela, although they are 3 billion barrels and they can't manage to drill on their own, they like to lay claim to this area. this is why this is a rising

tension and escalation. i would not believe anything maduro said yesterday. he promised he would not use force or escalate the situation. he has proven to be an unt untrustworthy negotiations partner. in the united states, he came to a deal and said if you promise to have free and fair elections, we will ease sanctions. that allowed chevron to get a license for six months to resume work. within two weeks of that agreement, he outlawed the opposition candidate and said the person could not run for office. he backtracked on that deal to the point where the financial times wrote the u.s. should reimpose the sanction rs right away. >> it is unusual situation. this is a country in dire

straits and on the verge of a failed nation for its people. >> the biden administration was incentivized to get more money in there and et cetera. to have more oil on the world market would be better to help lower prices. the other reason they were interested in a deal is venezuela also began allowing the repatriation tof migrants. that is disincentivized people coming to the border. maduro has a lot of leverage here. this all plays into that. you can up the ante. okay, he will not follow through on the promises of democracy, but now he has this i won't

invade if you dismiss the sanctions. >> even darren woods said this is something you have to pay attention to here and it may be more than bluster. >> i would say it is not a zero possibility they invade. it is a possibility. i won't call it a high one for a couple of reasons. this is likely a negotiating tactic to prevent the reimposition of sanctions. there is physical geography that makes it difficult. the border is extremely jungly and impossible to move tapgs thr tanks through. people familiar with the area feel they have to go through brazil. brazil doesn't want that. they dispatched the military to the area to try to prevent and show deterrence there. maduro doesn't have an ally in

the region. the leftist leaders. mexico and colombia and cuba leaders do not want him to do this. >> why? >> despite aligning with him, they do believe in the sovereignty of countries and sanctity of borders. although brazil has been a little separate to cuba. this is not something that he will necessarily have support from the rest of latin america. >> it is like taking us on? >> exactly. >> michelle, thank you very much. every time i get to talk to you, i learn something. >> thank you. always an honor. >> thank you. andrew. thanks, becky.

more coming up, a succession plan f t lge denorhearstefse contractors. we will explain when we come right back after this. >> announcer: this cnbc program is sponsored by truist securities. the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

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box." changes ahead for rtx. the ceo greg hayes will be replaced by another by may. we had mr. hayes on the broadcast many a time. coming up on the other side, a legend in the food business and best selling author is celebrating a big anniversary. we will see how she has consumers coming back for more while running her massive food empire. "squawk box" is coming back with her after this. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. re and m businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well.

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a an entrepreneur and in the kitchen and making stuff. you are hosting stuff. when you think about the business that is lidia, what is it? >> it is a wonderful life. lidia loves every minute of it. 50 years in the restaurant business. this is a crescendo of connecting with the american public and with the restaurants and they came into my restaurants and we saw each other there. i got the opportunity to go on pbs and julia cooking for them. in the steps, i teach as well. not only do i have my restaurants, but i have products. they can buyou?

whether it is in the restaurant, meaning how people order or how they spend? i assume you have seen a shift over this period of time in how people relate to food and how they consume food. >> absolutely. there is a consciousness and growth of consciousness to food and knowledge about food with the culture. i'm ethnic italian. italian is the number one ethnic food in america. i was privileged in that aspect. the people out there loved italian food. my first restaurants are where people perceived the home

setting. i always cooked the traditional italian food. they followed me and they become evermore informed and intelligent. when i opened lidia, i opened the first one in queens in 1971 and then in 1981. i opened for lidia. i said the first was italian american food. it was food of the italian immigrants. wonderful food. it is very popular. actually, i think it is growing back in popularity. i decided to do the regional food of italy. 20 regions. >> i want to ask two other questions. i want to talk about inflation and cost of food and i was on tiktok last night looking around and i was looking you up. there are people in the restaurants and everybody is instagraming the food. then i realize they are instagraming food at home from your cook book and how that

changed your business. >> i love it. impart of their lives. the business has changed, especially now. people are very conscious. they are conscious and right after the pandemic, they were wanting to go out and relive life. now they are watching the economic situation. they are going out more in numbers, but spending less. the big bottle of wine is no longer on the table. i think a quote i noticed is hand food is in. what does that mean? sandwiches like hamburgers rather than steak knife-and-fork food. >> trading down. cheaper stuff sdp. >> they are. they are not forfeiting quality and nourishment. if yourestaurateur, you need to be aware the public is ahead of you. they know what they want. >> the first item to go is the

wine, you are saying? that was the highest margin piece of the bill? >> it is. you know, the wine and the drinks are going down. instead of martinis and manhattans, the spritz are in. it costs less. yes, absolutely. value in food in america is perceived by the proteins. the larger the size of the protein. the larger the chop, the better value you get. compared to the italian, the proteins are one-third of the dish. in america, the protein is two-thirds of the dish for the america consumer to say i have a good value. thatthe dish.

make them tasty, make them wonderful. it costs less. if you diminish the protein and the customers may be even happier because they got nutrition today. >> thanks. i want to wish you a happy 25th again. and happy holidays. >> happy holidays everybody. coming right back with two big hours ahead. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security.

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good morning, the doubt tried to build on this week's record-setting rally. we are going to break down what's moving the markets and where rates could be added now. he will join us live to explain his decision.

the squawk box begins right now. >> good morning and welcome back to squawk box right here. we got a lot going on now. after what has been quite a week, frankly, quite a month. got some green on the screen. s&p looking 14 points higher. the nasdaq about 51 points. it's pretty interesting to see what has happened here now that we are on the final day of the

week here. we were just talking about what is happening in venezuela. it keeps edging higher at 71.88. you can look at bits going, what it's going to do, what it's not going to do. also talk jpmorgan asset management. as you are sitting there at 2:30 on wednesday afternoon hearing jay. powell. you are thinking, what? >> i was thinking that this is the time to be invested in the bond markets. i think what we have learned from chair powell is that they

are getting increasingly confident that rate hikes are behind them. the fed is done hiking rates, the last hike was in july. why is that? it's because inflation is coming down faster then really many people had expected. can this market rally continue? i think actually, it can. i think when you look at the upcoming data, we have the inflation data next friday. it's expected to come in fairly week. we could be looking. >> is there any risk that powell is going to regret being

so clear about his message? and the decreases that are on the way? >> i don't think he is going to regret it. they are very focused in bringing inflation down. they don't need to keep the level of policy restrictiveness that they once had. i don't think that he is going to be thinking about it in the context of easing policy but really just reducing the level of policy restrictiveness. ultimately, this is the soft landing goldilocks that everyone was hoping for. it's a soft landing until proven otherwise. don't really expect that he is

going to deviate. you think the fed has any concerns about what is happening? >> in terms of what i expect, there is a fair level of consensus within the committee right now. there was only two members of the committee that expected rates to stay unchanged this year. everyone else expected some amount of rates cuts. i think there is a fairly broad consensus that, yeah, it's not a given. they don't want to say that they prematurely declared victory. but at the same time, the amount of policy restrictions they had in the system was putting a lot of pressure on certain sectors. if we are seeing progress on inflation, they can dialect back so much next year. i think that explicitness, what we need to know is that it's not a promise.

based on the best information they had at the time. >> i have a different question. i see a lot of people were watching and they are looking at the market. they are saying to themselves, does this make sense, is it overvalued, what is happening here especially if you believe ultimately that one of the reasons the fed is going to lower interest rates is on the back of the idea that it might be a little bit of a tougher economy. probably a bad thing for earnings. what you think of that as he watched the equity market? >> we think the economy is going to run more slowly in 2024 than 2023. we do see that cyclical parts of the economy have been decelerating. one of the things that i've

noticed more recently was the labor market which was the key to this whole economy. we have seen a deceleration in hiring that has been masked by strength in three areas. government, healthcare and education which tend to be fairly not cyclical areas of the economy. when you look at that cyclical part of the economy, we actually are seeing things we can. that exactly what the fed is looking to see. when i'm thinking about the risk and reward within the fixed income market, again, it still looks like a very attractive plea even with the rally in yield. for example, yields are so positive. they are still some of the highest levels in 10 to 15 years. when you look at higher hiking cycles, ones where we didn't, and all of those cases, if you

had your money in cash, you collected some great yields in 2023. the fed is saying those yields are going to be going the other way. >> i want to thank you for your perspective this morning. what may take place next week and beyond. thank you. >> when we come back, you recently endorsed nikki haley for the republican nomination. that interview is next. can the magnificat and seven keep the train running in 2024? we'll talk technology, ai and more. squawk box will be right back. the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently.

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private equity financers will host a fundraiser for nikki haley in boston today. haley picked up a key political endorsement last week. welcome governor chris sununu. government, thanks for being here. we haven't seen you in a long time. it's good to see you. your endorsement this week caught a lot of attention. this is very important for the new hampshire primaries coming up. a lot of people have been vying for that including chris christie who was with us a week

or so ago. what led you to the point that you actually decided to endorse? >> more than anyone else in the country, i've been on the trail for all of these candidates. nikki connects. she was a governor. she understands customer service aspect. we want limited government, we want low taxes, individual responsibility. have someone really understand they can carry that to the white house. then you have the background. she is a governor, she knows how to balance budgets. she's an accountant. she understands creating jobs. what she did for south carolina creating thousands and thousands of jobs. and on top of that, you have the international experience which no other candidate has. unparalleled. now more than ever, the international issues are really come to bear on american >> what are the odds that nikki haley is going to catch up to

former president trump? >> in new hampshire, there's no question she can wind. our numbers start to move about now. people start to wait a long time before they take up their mind. you are looking at two or three at this point. it is really nikki haley versus donald trump for the republican nomination. it's going to be a one-on-one race. she is spending the time. this is what i love. everyone gives a speech. she spends a lot of time just taking questions. when you are super transparent, that how you earn trust. it's a little bit of trust because no one is carrying it. >> the latest polls show donald trump far and away outpacing nikki haley. >> that shouldn't be a surprise. the guy is a former president. the fact is, for someone in that position for a ceiling of 50%, he has a high floor. i'll give him that. he's never really going to go

below that. for someone with that background where half of the party is saying, give it to anyone else. nikki has the best chance of beating donald trump in the primary and the best chance of beating joe biden. the reason that is important is because she carries more seats with her. she carries government, school board seats. i remind everyone of 2022. i don't want a repeat of that where the trumpet candidates just never happened. we have such an opportunity to get it right. >> it's such a strange conundrum. i think donald trump and joe biden are the only two who could beat each other. >> that would be a disastrous ticket. because he polls so badly against anybody. he is literally losing against donald trump now. whichever party decides to move on from there, if republicans

move on first, they wind so we have the opportunity to solidify this thing and get america realizing we don't live in the past. >> the governor of iowa endorsed ron desantis. that matters because of the caucuses in iowa. she took a lot of flak from donald trump. have you taken flak from donald trump? >> some nudging here and there. i don't really pay attention to social media stuff. i'm sure as we get close, it'll get nuttier and in that year. this is the problem with trump nikki and i supported trump in 2016. we supported him in '20. if you can't live in the past. it's not the rallies of 2016, guys. it's 90 minutes of droning on. he doesn't have the energy. he was talking about jesus

christ as speaker of the house and comparing himself to nelson mandela. if he's not on the teleprompter, it's not the same guy. thank you for the service, thank you for the four years. republicans are going to galvanize against that next generation, next opportunity of leadership. it's kind of weird. >> could you support if it's trump versus biden? >> i'm going to support the republican. i think trump has a chance of beating biden. i don't think i'm an outlier when i say we are going to support the republican ticket. but we don't have to just settle for trump. these legal distractions are going to go on for years. we know that. inflation is real. inflation is question families. the border crisis is real. you need a president giving 120% of the time on those issues to get them done. he did get them done the first time. to have someone constantly worried about courtrooms and legal, whether you agree with that stuff or not, doesn't matter. that chaos is going to be following him for the next

three years. you can't have a president completely distracted when so much is x date. >> you have a front row seat. how is the economy from your perspective? >> i think the realities, there's going to be a significant foot on this. a lot of this money that is out there, states are still holding onto a lot of it. maybe a third of it. it was all designed to go out in 2026. the money from covid. the infrastructure money, the inflation reduction act, whatever that is. that trillions of dollars that is still sitting in bank accounts. that going to keep going into the economy keeping inflation quite high. allowing things to it propped up but only for the haves. you are going to e okay. if not, you're going to be in trouble. you're going to keep getting this bifurcated economy.

struggles with a low income family and a lack of the middle class. >> what do you think of what the market's racket has been? we've had analyst after analyst and investors who have come in and set, looks like everything is all clear for 2024 as far as the markets are concerned. >> i'm just a lowly governor. i do see a front row. i think that wrong. i think med too late '24, you're going to see some slowdown. i don't see how you don't. my guess is soft lending because it's going to stretch out through '25 and '26. all this government money is going to keep flowing at least for the next few years. again with that lower income family, they are going to be the ones hurting the most. housing prices are going to remain very high. it >> i was going to ask for tax receipts. >> i'm from new hampshire.

no, no income, no sales. what we do have is a mid-level business tax. businesses are making profits. post-covid businesses learn to do a lot more with less especially on the labor side. there are labeler shortages. they are being forced to invest in infrastructure and capital that allow them to keep their businesses going whether it's online sales without all the high labor costs. young people are having less kids later in life. that a big part of the labor shortage that out there. young people are going through more alternative forms of labor. they are doing two or three jobs out of their house. entrepreneurial, coding, whatever it might be. is this is are still successful, inflation is a hi, that means that profit margins are high. a state like new hampshire does well because all we look at our business taxes. >> under, thank you. great to see you. take care. coming up on the other side of this, a look at this morning's premarket members. the leader investors on the

market next year. cautious on the account. we are going to bring you the survey in just a little bit. we do have some rain on the screen on this friday morning as we get you set for the market open right now. things opening about 150 points higher rated nasdaq is up 54 points. we are coming right back after this. it's time now for today's aflac triv qstn. iaueio what cleveland-based company's slogan is, cover the earth? the answer would squawk box returns. good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time! aflac! because aflac gets you money to help close that gap! now how do we get this goat outta here? (whistles) aflac! meet one of my new homies! gaaaaap! get help with expenses health insurance doesn't cover at aflac.com.

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and now the answer to today's aflac trivia question. what cleveland-based company's slogan is, cover the earth? the answer, sherwin-williams. there you go. welcome back him everybody. let's get over to frank holland. he's got a look at this morning's premarket movers. >> good morning, happy friday, becky. you can see down 2% even after

reporting earnings that beat analyst estimates. despite higher mortgage rates, you can see the decline here. that fell to 24.2% down from 24.8%. shares down 2 1/4%. they are popping in the premarket this morning after topping earning expectations for the most recent quarter. the shares are up to 1/2%. also declared a special dividend of $15 per share. the company says moderating inflation helps boost demand for items. also the spring, we are looking for shares of ge. after wells fargo update and raising the price target from 1.15 a share. more than 50% upside. analysts of the aerospace business into a new company.

just about 1 1/2%. enter, back over to you. when we come back in just a moment, what a year it's been for the magnificent seven. we will find out if that momentum can continue. talk about some other names that could be performers. we will do that next. later on the program, you do not want to miss this. stop whatever you are doing. settle in because john williams is going to join us. so much more. squawk box returning after this.

welcome back to squawk box. the future indicated higher once again. now actually closed at another record yesterday. indicated up another hundred 20

points today. we've had a really strong point of gains. you have markets on track for many weeks of gains here. the nasdaq indicated by 53. andrew. meantime, time to talk attack. our next guest just named a few. a lot of these names have already been on quite a streak. good morning to you. paul, a number of the stocks have already been on the move. i think there's a lot of folks out there saying how much more can they move. >> the way i look at this, andrew, is coming yes. the nasdaq is up 41% year to date i expect tech to outperform the s&p next year but not by this magnitude but i'm very confident particularly with rates, 40% chance

according to futures contracts. a higher probability come about two thirds in the main timeframe. with that backdrop and the level of rates with evaluation and text docs, even more important than all of the buzz around ai. i think it is a fairly constructive setup. of course, you can't expect to have gains like we are going to have in 2023. >> you mentioned ai. i'm curious where you land here. clearly nvidia are the beneficiaries of an economic base today. there's always been a question of whether the software acres are going to benefit in the same way or whether ai unto itself becomes a commodity, a feature, of all of the software companies, if you will. and how much you could actually benefit on a margin asis from that as opposed to just maybe a share here and there for those who wind until the next one

catches up and overtakes him. >> in tacoma that an excellent question. the way i look at this rollout of ai and that is squarely in the favor of the hardware and semiconductor companies. nvidia has been the standard there. i actually think that we will have another predominantly focused year on ai, large language model training. i know it sounds not particularly creative but i expect the same old same old because we are not going to get to an interference of this model. probably until '25. and we don't really get the release of the ai applications until maybe even later. and so as of now, they are going to continue that need, a

ton of computer horsepower, to train these large language models. i think the ai are performers continue to be in '24, the same crew that dominated in '23. nvidia is one of my favorite names going into next year. >> tell me how you think about the software players though. partnered with open ai. amazon is now trying to get into the space. do you think that they are going to somehow collect shares in a different way, be able to capture a margin? actually, we are going to invest a lot more in software. we are willing to spend more because frankly the costs are going to be that were productive. would you think that he change, if there is a sea change, happens? >> the tell for the potential

success of ai driven software apps will be next year when we continue to see if microsoft has greater penetration of this office 365 subscriber base with the copilot tool. right? they are now charging about 15, $16 a month. they want to add a $30 per month add-on with ai. if people bite, of course, that will be very high. almost 100% roast margin incremental revenues. if the subscribers bite, we will have a tell that this is a real deal. if they don't, they are not really worried, just as you said, andrew, that these apps might become ubiquitous over time. they also may not be particularly profitable. we saw the same thing with the internet. a couple of major stars, huge companies came out of this.

a lot of them end up having broad and internet like anyone. it becomes ubiquitous, it becomes commoditized. i am worried about that. >> i think a lot of people look to you as someone who spent a lot of time figuring out what's going to work in tech. what's not going to work in tech? they are sitting there. are there names on that list or other names that you say, you know what, in this new world it might not work out. >> let's talk about the magnificent seven. out of the magnificent seven, i've been doing this a long time, i really only like three or four. i'm actually cautious on some. i'm a little bit worried these days. i think apple prospectively will not grow at the rates that people expect.

it's very expensive. the ones that i like arm meta, microsoft and nvidia. nvidia is in the position and my race. yes, you will see in the last week some actually poor quarters and disappointing guidance from some big companies allah adobe and oracle. i think we will have a little bit of differentiation between the grades and not so great in tech next year. particularly in the fall of 2023. i don't think that will be the same for next year. >> final questions. tesla. where do you stand? >> i'm not a fan. i think there are so many f's. i think the stock has really held up by the elon musk halo. the travesty which has become

the former twitter, now x. i think that company may not make it overtime. it's actually going to have people look differently and value tesla differently because obviously right now, it's a cult of one-man's stock. >> paul meeks giving opinions and views on all these things. we look forward to seeing you and talking to you in the new year. and seeing were all of these stocks lead as well. thank you. >> happy holidays. >> thank you. when we come back, error millionaires feeling about the economy. robert frank has the results of cnbc's millionaire survey. that up next. return to work impacts on the working moms. we will have that story and muchorwh me en squawk box continues. with the l'or barista system. enjoy richer, bolder flavors

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robert frank joins us now with the results of a new cnbc millionaire survey. what are millionaire saying? >> good morning. >> is there billionaire survey? >> not yet. we are going to work on that one. right now, just the mere millionaires are holding a lot of cash and they are worried about washington. the cnbc millionaire survey found that most investors say will be up at least 5% with over 20% expecting double-digit gains in 2024. they plan to keep about 40% of their portfolio in stocks next year. about 18% in fixed income still keeping a lot of cash with about 25% of their investments in short-term money markets.

their favorite sectors are tech and financials. when it comes to the overall economy, they are a bit more garish. 42% saying the economy is going to be weaker or much weaker next year. only 30% say it will be stronger. the biggest risk is government dysfunction. inflation, still a bit of a concern along with national debt. millennial millionaires, about half say economy will be stronger next year. up double digits next year. there is a reason we poll millionaires. millionaires hold 85% of individually held stocks. after this rally, they start putting that mountain of cash to work in the beginning of next year, that could help sustain this rally and stock. >> i asked to question. one was just the biggest surprise you saw in these numbers. but the other is, historically when you look at these kind of

surveys and you see the run-up in the market. does everybody jump on the bus? >> there hasn't been a consistent pattern. sometimes millionaires are ahead of the game. sometimes they don't. sometimes they are a bit late. in this case when you look at leaner investors that often are surveyed, they miss this rally. most of the wealthiest investors were heavily positioned in cash, bonds and private markets moving away from stock. the big question is whether they believe in this rally or whether they don't. we are just going to have to see at the beginning of the next year how that plays out. >> always great to see you. happy weekend. when we come back on the other side of this, we are going to talk about the return to office mandate.

they are a disaster for working moms. it's going to make the argument and explain right after the break. take a look at futures on wall street. green across the screen. nasdaq up 51 points. s&p at about 11/2 points higher. we will come right back in just a moment. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit,

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welcome back him everybody. the remote work trying to drive during the pandemic. as things recovered, so did mandates that require place to come back to the office. women's workforce participation has reached levels. she is a yale university lecturer. also cnbc contributor. her latest op-ed argues that the return to office mandates are a disaster for working moms. joanne, hi rated >> hi grade >> this is the first time you have been in the studio with us. i'm so happy to be here with you. >> it's great to have you here. women's participation in the workforce skyrocketed because when covid first hit, women had to stay at home. women with small children, i should say because kids weren't in school. all kinds of things that were happening. a lot of moms dropped out of the workforce. and what happened? >> a lot of women lost their jobs because they were hospitality or travel. and at that time, everybody

said 30 years of games like that were never coming back. johnny allen said it would be permanent. most three years later, april of this year, we have reached this record level. 75% every month. what's really interesting, women of young children under the age of 10, it's almost 80%. clearly what happened is you have remote and hybrid work. and then you pair that with the role of the covid restrictions on schools and day cares. suddenly women who have jobs, that you're able to do remotely, suddenly, they are able to participate in the workforce in a way that they never were able to do before. which is fantastic. the problem is now with the return to office mandate, we are sort of disconnecting. we're not acknowledging how

important this is for women. there is a potential that we could really rollback and reverse. >> we knew mandates would come in. is that a problem? >> it could be. when our kids were babies, you only have to show up three days a week. >> oh, my god. that would be the greatest gift ever. >> we are in this world where you have women who have two and three and four kids who were marginalized before. when my own kids were babies, you and i know how brutal it is. we know how brutal it is. most of my female friends who are super educated, most of them either went part-time, they got to mommy track. if they can afford it, they

quit. and we lost all of these really high potential women. >> let me push back a little bit. what happens to the people who are forced to come into the office when their coworkers aren't? how do you manage that situation? how do you manage that system

people phoo feel they get to do what they want. a lot of workers came through entire way of the pandemic, people who couldn't work from home. >> look, no purchase effect solution here. the point i'm making, though, is we now have -- we have now created a system where there's a lot of women who need to work and also want to work. >> right. >> who were not, were marginalized before. now they have an opportunity. what we need to do, think about

how to create a workplace where we do have the in-person time, but perhaps where we're not marginalizing people who maybe need a little more flexibility. by the way, we only need that little flexibility not for all time. right? it's basically when your kids are little, and that's what i'm saying. the big percentage increase. >> when they're sick or something. >> or sick. the big percentage increase is really for women with little kids. like preschoolers, kids und 10, they need the most flexibility and where we lose them. too rigid. and their career, derailed and even if they take off time and want to come back, they will never reach the professional heights, and so we want to make sure that we don't lose these really high-potential women. >> i guess a thoughtful process. >> yes. >> for managers to look at. and kind of find ways to do that flexibility. by the way, i think managers are more likely to be flexible when you have a tight labor market, like we've had, and you need head count.

right? >> absolutely. >> it's -- it's less easy to pull off at a time when you have higher unemployment levels. >> very true. very true. i do think, look, it's a positive we have more women in the workforce and we need them in a tight labor market. they contribute to the economy, plus these are women who truly, truly, truly want to be in the workforce. let's try and think about ways -- >> over the years find the most official people find working moms. efficient workers, find ways to get to things done very quickly. >> so true. >> joanne, thanks a lot. >> thanks. >> great to have you here. folk, check on the markets. futures indicated higher. this after a lot of days in a row of gains, a lot of weeks in a row of gains. dow futures closed at highest level ever once again yesterday. you can see almost triple-digit gains with futures this morning. dow futures indicated up. nasdaq indicated up by 41. also, the treasury market has

been the thing to watch, not just over the last several months but the last several days in particular. since we heard from the fed chief jay powell talking about how, yeah, maybe they will cut rates next year. that's the consensus estimate for the federal reserve board members as well. the fo mc members. ten year, crazy. 3.9%. two year all the way back to 4.3% and change. again, speaking with john williams. the federal reserve president of the bank of new york coming up a little later, in the next half hour or so on "squawk box." what he's seen. oil prices a little rebound on numbers that suggest you could see increase in demand around the globe later this morning. later this year. right now, it looks like wti is trading at 72.14. again, andrew, talked about contango, definitely the case.

contracts a few months out are showing even more gains. >> yep. absolutely. meantime, when we come back, still to come this morning, the bull is running wild, in upward momentum continuing on wall street. discuss that after the break and what investors can expect. 8:30 eastern time. don't miss it. mentioning all morning. a big, exclusive interview with new york fed president john williams on everything the fed is thinking, after this. don't go anywhere.

good morning. futures point to more gains at opening bell. all major averages on pace now for the seven straight week of gains. this hour, hearing from new york fed president john williams on interest rates and the state of the economy. and two continents, former borders and one sought-after toy. we're going to take you inside the postpandemic global supply chain. all with the help of an unassuming care bear. this as the final hour of "squawk box" begins right now.

xwo . good morning, everybody. welcome back to "squawk box" on cnbc. i'm becky quick along with andrew ross sorkin. joe is out today, but it is a friday and equity futures are feeling it this morning. if you check things out they've been off to the races once again. dow futures up by 85 points. believe it or not, down from where we were earlier this morning. this after the dow once again closed at an all-time high yesterday. s&p futures indicated up over eight points. nasdaq up by 40 and treasury yields as well. treasury yields still under quite a bit of pressure from what we've seen recently. ten year below 4% at 3.9. two year, way below the 4.7% we

were earlier this week at 4.38. andrew? >> thanks, becky. let's actually whip over and start the hour by getting right over to frank holland who joins us with some of today's top pre-market movers, going through the list. what's on it this morning? >> good morning, andrew. earning mover right now. darden restaurants. you see here. shares lower. down more than half a percent despite a beat officer revenue and eps. operator of olive garden and long horn brands raised gps guidance in line with estimates. appearing partly weighing on the stock. in june garden closed acquisition of ruth chris steakhouse. could not include $55 million related to the integration. fine dining segment concludes with chris saw a bigger decline than the street expected. shares of darden, down almost 2%. also a series of chip upgrades this morning. jpmorgan naming micron a top

pick for 2024. shares up over 1%. bofa nvidia top pick on general a.i. and enthusiasm. and amd up almost 1%. bernstein reiterating nvidia outperforming. under pressure this morning. shares down almost a half percent. last, not least, roku a downgrade from moffett mathsen lowering target to $66 per share. now trades about $100. analysts seeing a 35% deecline n the stock and bigger players, netflix, disney, amazon better positioned to gain streaming ad market share. shares of roku down more than 2%, again. becky, back to you. >> franks, thanks. back to the broader markets with the major averages tracking for yet another positive week. i want to bring in portfolio manager for international growth equities at invesco. everybody's trying to figure out

if these gains will continue and even push further ahead for next year. what are your thoughts? >> well, becky, i'm not really surprised by market reaction, considering that the biggest overhang for the past 18 months or longer has been fed pulling awas the punch bowl of easy money and withdrawal symptoms that's led to. so for the fed to come out and almost officially blow the all-clear siren is optimistic. continue from here? you have to look under index levels and look at individual stocks. definitely plenty of good fundamental stories out there at not egregious valuations and those i think will continue to have a constructive back draw. >> here is the weird thing. everybody was so wrong last year, as we were heading into this year. everybody was looking for some serious sort of recession. some serious slowdown. it didn't happen. why should i feel any better that everybody now seems to think that next year's going to be okay, because the fed has made this pivot? >> yeah.

no. right. came into this year, almost willing us into recession, the experts, so much issue from 2022, but the economy and data proved to be much more goldilocks-like, not too hot. not too cold. can that continue? here's what i'll say in terms of what we know. the market is a complex adaptive machine. that's the part people missed. a year ago people thought by this time europe would have run out of gas. didn't happen because we adapted. people thought banking crisis. didn't realize the fed, didn't take in the fact the fed learned from previous missteps so this was much more quickly contained. so i think the point people are missing, again, is, of course, unexpected surprises, but the market adapts very, very quickly. it's not really going to rhyme with whatever historical points they extrapolating from. >> fair point. how much is market is adaptive and how much is government stimulus and central banks here to cushion any potential

fallout, the whole way through? because you know, the fed may have been raising rates, but they also affected quickly to be accommodative when the we were banking issues back in the spring? >> we had constructive institutions. certainly helpful. the biggest driver of his resilience has been a strong consumer, very good balance sheets. right? i'm sure pockets of success overall we do not have structural misallocation of capital coming into this year. the labor market that's held up well. i would say that the economic data has trundled along pretty well and why people missed it? i think actually might have been because we came out of covid with a lot of times looking wonky and may have been confusion about where we are in the cycle. >> where do you see bargains or valuation deals? do you see any? >> yeah. excited about growth equities particularly international markets. themematically look for companies with durable deal wins where we think they can compound

for a while. things like apple, technology, durable evergreen forces pushing economic activity the next ten years, and within sectors, plenty of sectors beaten down through the rate cycles. i.t. services, life science tools, now that the backdrop is supportive we think fundamentals will reassert themselves. >> meaning you do what? allocating even more internationally for these growth areas? what happens? i'm an international portfolio manager. international is pretty much all i do, but i think there are lots of reasons to be excited about international even if the world is your oyster. right? parts of the economy that are simply not available to invest in u.s. public markets. luxury goods being one. the semiconductors supply chain. that's very ex west. a global portfolio best in class, international has to be a part of the allocation. >> do you look at a specific country or region or really is

more luxury-themed, or semiconductor chain-themed? >> i don't think anything where i think net present value of future cash flow is similar to today's price. right? the areas i find very interesting, we find interesting right now, fend to be developing western market. uk is cheaper than its almost ever been on a relative basis, whereas a number of assets there that are compounding really well. there are parts of france, germany, et cetera, that all have companies. >> look at europe in particular. how much of this do you have to figure out what's going on with the central banks? and does europe have to follow european central bank have to follow the lead of the federal reserve here or risk getting crushed with valuations for currency? >> if you are doing fundamental bottoms-up stock picking you want the backdrop to be constructive. but the real oomph comes from

the companies and compounding. that's what someone trying to create wealth through holding equities a long time should really focus on. as far as the backdrop goes, a lot of reasons to feel it's going to be constructive. seen the fed come out basically and pivot effectively. the european banks have been slower to follow. i think today's headlines are all about how they're a little more hawkish. to your point evidence suggests if the fed pivots in one direction it's hard for other central banks to hold out. so many things go along with it. >> thank you for coming in, and thank you for your time. >> thank you. >> good to see you. andrew? >> thanks, becky. meantime, profile phone hacking against "daily mirror." the judge finding hacking was widespread over many years saying executives were aware of 9 wrongdoing and covered it up. additional to $180,000 in damps seen as a major victory for

harry. the prince called on authorities to take action against those who had broken the law. this was the first of several lawsuits from harry against british tab bloids to go to trial. in june, first senior member of the royal family to testify in court over a century. a win for harry. not a huge economic basis, but -- maybe on a broader justice basis. implications for other cases in the future. when we come back, can't-miss interview. don't go anywhere for this one. new york fed president john williams will be with us talking about what we heard from jay powell earlier this week, and what's going on inside the room. the room where it happens. next, a follow-up to the story we first brought you a couple years ago. the global supply chain and how it's working. the care bear. heard that right. don't go anywhere. x"squawk box" will be right bac.

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welcome back to "squawk box" on this friday morning. futures, green only the screen amp a lot of green all week. dow up 94 points. nasdaq opened 46 points high perp also the s&pa 00 close to 10 points higher. also take a look at crude oil right now. on pace now to break a

seven-week losing streak up at 72.09. remember under 70 for quite a bit of time there. the same story for rbob. yesterday, best day since march. and ten days a way from christmas. how hottest holiday items get from factory to you retail. and seemingly cooling costs lower. eunice yoon and courtney reagan take us on a journey of a care bear. it all starts at a manufacturing site in china. >> reporter: well, the u.s. fights inflation, china struggles with deflation. that's translating to lower pricing at factories. during the global supply chain disruptions two years ago the cost of making a care bear was up 25%. today it's back to where it was before the pandemic.

slower growth here has reined in material prices as well as workers' wages. with u.s. borders harder to come back factories compete with cut prices. logistics costs also in check. no more tight covid controls and shipping containers are plentiful at the chinese ports. so products that have been held up for months on the factory floor in 2021 are now shipped out to america almost immediately. nowhere is a difference in the supply chain for difficult than the ports at long beach. 65 ships anchored before. now i don't see anything. global trade down 5% and shipping container costs down almost 90%. >> 50% of truck gates unused every day. we have capacity. >> reporter: up 19%. labor ships sent away from the west coast. >> reporter: similar story with

trucks and trains. two years ago there weren't enough at consumers loaded up. today too much supply and not nu enough demand. volumes down spot rates dropped 40% since 2021. it's cheaper to ship this care bear for port to the warehouse and on to the final destination. whether or not all of these savings are passed along to consumers, can depend on the retailer. journey for this care bear from a factory to a toy store on the east coast back to normal. now taking about a month. two years ago twice as long and transportation costs making up almost a quarter of the bear's cost now down to 5%. >> we're just seeing less pressure on the manufacturing costs and transportation costs. a little bit more pressure on other areas of the supply chain and also our customers are looking for more value. so we're being squeezed a little bit. >> reporter: toymaker basic fund adding a transportation fee two

years ago and now gone. look at toy deflation seasonal discounting and consumers desire for lower-priced toys, this bear retails about $15 in most stores. down from $17 to $20 two years ago. >> and owner of this factory told me that he passes on -- on almost all that he gets here in china to his american buy pebuyers. significant for him. makes almost 1 million care bears in this factory every single month. >> let me ask you this, live from china. we talked all the costs that came down. a mention you made about wages. you know, here in the united states wages, wage growth has gone up materially. and people thought that was going to be a sticky situation. wage situation. is it not that way in china? >> reporter: it's not that way

in china. i mean, wages have been going up every single year. he said, the factory owner said even for him, despite the economic situation, wages are marginally going up, but here it's much more marginal, because of the unemployment problem. so that's helping to restrain some of the wage growth. >> and then when you think of what the future holds here in terms of resilience, in terms of folks actually building on manufacturing facilities elsewhere, how much pressure -- i mean people often thought that was actually doing to put more pressure that would be inflationary. seems in this case it's not. >> reporter: well i think it depends on which industry that you're in. the factory here said that for himself, where he's looking, is to build up in china. so there's definitely some diversifying going on. but there are other industries that are looking towards other countries to try to diversify

outside of china. so he is seeing those trends, but for him specifically, he's casting an eye to the domestic market. >> all right. eunice yoon, i should thank you and thank all of our reporters who brought us on a remarkable journey. very infrequent you get to actually see the full sort of supply chain spectrum, beginning to end. you did it and done it a couple years. really an education. so thank you. appreciate it. >> pretty cool. >> it is pretty cool. >> all the way across -- yeah. i liked it. when we come back we'll hear from new york fed president john williams. but next, what could the fall of interest rates mean for deals in the biotech sector? we'll speak with an analyst when "squawk box" comes right back.

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welcome back, everybody. a big week for biotech. pfizer gave disappointing profit and revenue nor next year and merck and moderna announcing positive developments in treatment of melanoma. interest rates falling significantly and could spark more interest in deals. joining us now to weigh in on all of this, michael ye. senior bioanalyst. how does the interest rate

environment and huge changes seen from the fed this week impact what's likely to happen in 2024 for biotech? >> yeah. great to be here and good to see you. >> you, too. >> yeah. look at last few years, it's been extremely challenging for biotech sector. we've been down and out particularly through the covid situation, and with skyrocketing interest rates over the last few years, longer-ranging assets, viewers appreciate very difficult for cash-burning, high-risk sectors lie biotech. as we look forward to 2024 you probably have seen somewhat dovish comments. you've seen a path towards easing rates, and immediately my sector down and out the last few years and pretty cheap willrall. see it in 2024 and other big companies with a lot of cash going after smaller biotechs. >> the one question i have is, you've also got all of these changes coming to

pharmaceuticals, though, with, you know, new rules that are going to allow the government to start negotiating for drug prices. how do you layer that on top of the interest rate environment? >> yeah. i think it's a good point. i think that the bigger pharma sort of old-school companies and bigger biotechs which will continue to face pressures on drug pricing. as we look out towards the center of this decade, i think actually further under pressure to have to look at pipelines and kor continue to build. and affect smaller biotechs we see that particularly struggle, and lead caps. i think actually you see a crossroads of tailwinds where you see these companies have been cheap and you see the bigger companies having to do more deals. it's just going to be good for the biotech sector. >> do you have a list of targets? potential targets, i should say? >> yeah. look, i think if you were to look at magic list, which

everybody wants to think about, whether smaller, cancer companies like ticker imcr, or maybe srrk. obesity. a lot of small biotechs in the obesity, oncology space i think are particularly going to do well, where bigger companies have to build over the next decade. >> talk about what we heard from moderna and merck this week. moderna's ceo was on yesterday. the promise for what they are seeing and planning on doing with cancer is pretty exciting. he said some of it could happen as early as 2025, but it seems it's further off. 2028, '29, before you see this further applications. how do you play that out as an investors? as somebody who -- for patients i think it's very exciting. they are not going to be super patient in terms of waiting for these things, but as an investor, you have a different sort of series of metrics?

>> yeah. i think i look at it in two ways. one, as it relates to moderna specifically and the promising personalized cancer vaccine antigen therapy moderna talked about yesterday. it's exciting. i think there is clearly signs of potential of the mrna platform, which i think we can all agree was proven out through all the vaccine success they've had over the last couple years, and merck obviously took a look at that. super promising. paid a lot of money and pouring billions of dollars into obviously the lung cancer study as well, which started up. i think if you look at moderna i agree and think that you alluded to that. it's going to take a couple years for that to play out as the study is basically rolling and in lung cancer the going to take a couple years. optimistic the fda could act on the phase ii allowing early filing. it's going to take some timewhen

you look at moderna and powerful technology. not just that, other applications, it's promising. although reluctant, because covid and some pressures are still weighing on some stock. >> how much of all the craze around these obesity drugs is sucking up all the oxygen in the room and maybe all the money in the room, too? >> yeah. i think it's a little bit of the haves and have nots. you know, becky, obviously with lilly an extreme success, and i point out amgen, which is quietly becoming a potential second player with big data next year with a potential monthly or even quarterly obesity drug. amgen we like. it's taking up a lot of the air and everyone from every sector sort of gop wants. it's a good thing there's a huge success, and obviously runway powerful drug for americans. that is great to prove the power

of biotech and pharma and drug prices. out of sanders this week. i think it's -- because it's drawing money to the sector, proving stocks can work, you can have successful platforms. i think that's going to obviously drive a huge amount of cash, becky, towards other companies which are going to be targets, as beginning of this conversation. that's good for biotech. it's a good thing and we need more of that. >> we can do other things besides just obesity. so much promise in the medical world. michael, thank you for joining us. happy holidays if we don't see you sooner. >> thank you. meantime, costco shares. look at this. on the move this morning. the wholesale club real tailor retailor -- retame er same-store sales and special cap end of $15 a share payable in january, becky.

talking about membership clubs top of the show and here we are. >> here we are. yeah. $14 gain for that stock. up next, a can't-miss interview with new york fed president john williams. don't go anywhere. "squawk box" will be right back. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪)

welcome back to "squawk box" right here on cnbc. seconds away from the empire state manufacturing data. a look at futures ahead of that. 88 points on the dow looking up. nasdaq up about 50 points and s&p 500 up about 10 points. over to rick santelli who's standing by at the cnbc station. >> manufacturing in and around gotham, expecting the number to be slightly positive. notmeant to be. instead of up two, now down 14.5. down 14.5 and at this moment still following an unrevised positive 9.1. minus 14.5, weakest negative month over month since down 19, and as we watch the response in the markets it isn't huge, but

keep in mind as we hover at 440 in a two year up 1 on the session. down 32 basis points on the week. as a matter of fact, we went from mid-october, high yield close at 522. 17-year high, to where we are at now hovering basically around a 6 1/2 month low. 10s at current levels consider this. we'redown 37 basis points in the ten. down 37 basis points in the ten at 392. and, excuse me -- excuse me. down 31 basis points. 392 and more importantly basically 5% on the 19th of october. andrew, 16-year high. now nearly at a five-month low. so fortunes turned. for some a positive as interest rates, of course, moved down. and everybody continues to eye the big pool of money in money markets that may come in swamp even more some of green in

equities. andrew, back to you, and have a nice weekend. >> you have a nice weekend as well. see what else happens. meantime, straight over to steve liesman. we've been teasing it all morning. he's got a very special guest with us. steve? >> andrew, thanks very much. here from the new york federal reserve bank with new york fed president john williams. continuing to join us end of the year. tell us what's happened and what's going to happen. >> good to see you. >> always good to be here. >> start with the question i'm getting from a lot of people in the markets and the questions i have myself, which is -- what changed between, say, the end of november when it sounded like you and the chair were both saying, hey, it wasn't time to talk about rate cuts, and then what happened at the meeting where it sounded like the committee was talking about rate cuts. and now projecting more for next year. >> first of all, we aren't really talking about rate cuts right now. we're very focused on the question in front of us, which

as chair powell said. have we gotten monetary policy to restrictive stands to ensure inflation comes back down to 2%. that's the question in front of us and what we've been really thinking about for the past five moss and i think we'll continue to think about for some time. that's the topic of discussion for the committee. that's a decision we made, to hold the fed funds target where it is. clearly, we all put in projections for interest rates and inflation and growth and unemployment as well. those are individuals thinking about what may happen over the next three years on a baseline path. the discussion really from the fomc right now, do we have monetary policy today in the right place. not speculating on what will happen at some point in the future. >> the chair said you had a discussion about rate cuts? >> we have projections. we submit sum rhys of those

projections, they're shared with committee participants and some committee participants talk about their projections, but this is not the topic of discussion about what are we going to do, or plans around this. again, the committee doesn't have plans around that. this is really each committee participant thinking, okay. over the next three years, if the economy evolves in a certain way, what do you think of the appropriate path where interest are. >> so what was the answer to the question? are you sufficiently restrictive? >> i think in the -- this gets to the uncertainties we face. it's still a highly uncertain situation, both in terms of inflation and progress in the economy. right now i think the base case, speak from my own view. the base case sk whos looking p good. economy is strong, unemployment is low. when you think about how we have gotten policy to kind of the appropriate place? it's looking like we are at or near that in terms of sufficient

restrictive. things can change. one thing we've learned, even over the past year, is that the data can move and in surprising ways. we need to be ready to tighten policy further, if inflation, the progress of inflation were to stall or reverse, and, you know, the committee is clearly focused in making sure we bring inflation back down to 2% on a sustained basis. we need to be data-dependant and make the right policy decisions depending on what transpires. >> the market sure thought you were talking about rate cuts and projecting rate cuts. what do you make how the market reacted both in a huge downdraft in bond yields and updraft in stock prices? >> interesting over the past year. we track this obviously very closely here at the new york fed is the market reactions to all kinds of news, economic data, all types of events, and has been much bigger in magnitude,

much larger than historically is normal. that reflects in large part of uncertainty, unusual nature of the situation we face. so the fact that we're seeing big market reactions through pretty much everything has been a pattern that we've seen over the year. in terms of, you know, what we're seeing, market saying, well, the fomc is going to do this, or this, so many, you know, rate cuts this year. i would just point people back to the economic projections that we put out. you know, look at median projection, over the next three years, the median shows that, you know, basically gradually over the next three years the r restrain, policy restrain put in place gradually over three years is the view of the committee. i think it's consistent with our view how the economy's going to evolve. i think the market in a way is kind of reacting very strongly, maybe more strongly than what we

were showing in terms of our projections. >> do you believe the federal reserve can cut interest rates next year? >> well, again, we, of course, we can do whatever is appropriate for achieving our goals. you look at the way -- the way i think about this is -- >> sure. >> -- if we get the progress i'm hoping to see on inflation, on the economy, of course it will be kind of natural for us to move monetary policy over an extended period of time, over a few years, back to more normal levels. it has to be innen the context economy is moving, sustaining a lead towards our 2% goal. it's absolutely essential to see that, but under those conditions, my baseline forecast, of course we need to move policy back to normal levels over a period of time. we've got to be data-dependent and the able to adjust according to what we're seeing. >> when i look at the summary of

economic pro jekdsjections i se funds rate is projected to decline almost as muches you project the core cpe to decline. do you see rates coming down simply to match the decline of inflation next year? >> i don't think the monetary policy that simplistically. one of the principles of monetary policy, focus on interest rates. adjusted for inflation, m nominally. to my mind it's not as simple as that and really about all of the information that suggests over time, as the economy, hopefully, you know, moves in operation right back to our 2% goal, with the economy still being strong and labor market strong it will

over time, we'll want to get monetary policy back to more normal levels. >> i ahave to ask more openly. rates coming down by march. how do you respond? >> premapremature. fomc, the question we're thinking about, the level of rates, is it right? as jay powell said. have we got this, the substantive policy sufficiently restricted and, of course, watching the data to mikeake su we're getting that appropriate policy. to me the debate is -- it is premature to really think about, like, what we will be doing sometime well into the future. that's not the question that's in front of us. >> that's what markets do. right? try to forecast what's going to happen six months down the road. not necessarily three years. it's not crazy to be thinking, hey, we have, inflation under control, as you've suggested.

and that, as governor wallace said, and you've conceded sort of that inflation comes down the funds rate would come down to, what? remain restrictive, as restrictive as you've been or do you have to be as restrictive as you've been? >> what we need to do is focus on our job of achieving maximum employment priceability. what we're focused and. we've follow add followed a strategy get it to a restrictive stance and now miking sure the restrictive policy is getting the job done and as, you know, as we watch the data and see how the economy unfoldsanc and bala of risks unfold, we'll decide what to do then. >> another public soon, shows the primary dealers see

quantitative tightening ending third quarter of 2024. cnbc found 2024, $2.6 trillion. is next year a year that qt could iend? >> right now seeing everything working as planned and intended. balances overnight repo facility come down quickly in line with shrinking of our balance sheet. this is working as irntended. market forces deciding in terms of bank for federal reserves, in terms of overnight repope is evolving as intended. clearly down in the repo facility and watching developments in this market carefully. i don't know at what point, how things will transspire over of the next year.

we're watching what's happening in money markets, utilities rates and facilities and level of reserves. the level of reserves is around $3.5 trillion. clearly still in a very abundant level of reserves. and in markets, they're functioning very well. the funds rate constant within the range. we're watching it carefully and see how the market kind of, how the market evolves here. right now it's going according to plan. >> wouldn't be right if i didn't ask the question. asking this discussion six months ago, entirely different question. how tight financial conditions were with open policy. right now financial conditions are much looser. is that a problem for making policy? are you concerned about inflation coming down? >> look at ten year yields especially broader financial conditions they tightened a lot from july to october. so more than kind of was easy to understand given what was happening in the economy. they've loosened not because of

recent events but because of the data flow. again, back to the point that the markets are responding kind of much more to the data flow and events than is normal. we have to just read through that a bit. look for what are the per subjective components of maybe financial conditions and not get too caught up it goes up and down, because we are seeing volatility in markets around things. from my point of view financial conditions overall have tightened, as we've tightened monetary policy in the big picture. we're seeing slowing in the economy and definitely in inflation. monetary policy is working as intended and i think, again, monetary policy in a good place. just have to make sure that we get it in the place to make sure inflation comes back to 2%. we're confident inflation is coming back to 2% on the same basis. >> john, thanks for joining us. continuing this great tradition. happy holidays to you. >> happy holidays to you. >> andy, back to you. >> fabulous interview. thank you so, so much.

a lot to think about, and i'm sure we're going to talk a lot about some of the things he said in a moment. when we come back, we'll talk about the year-end box office. why it's critical for warner brothers discovery and the late effort on the walt disney board. all that and more when "squawk box" returns. welcome back

box," everybody. the futures this morning have come off of their highs. actually the dow and s&p in negative territory. it happened while john williams

was talking. not sure what else was happening in the markets or moving rates, but john williams, the new york federal reserve governor, bank of new york federal reserve governor talking a little not focused on rate cuts at the moment. hard to think anybody can say anything to move things in a different direction than jay powell already had. but he said the rate cuts are not the topic of discussions they're focused on. as a result, perhaps, you see dow futures down 11 points after being up 130 points earlier this morning. s&p futures down by 3. nasdaq indicated up by about 20 points. it's been a mixed year for the box office. on one hand you had the massive success of barbenheimer. the other hand, the industry hurt by writer and actor strikes. joinings now to talk what to expect the rest of this year and into next year we bring in our very own julia boorstin. good morning. >> good morning to you, becky. well, hopes are high for a

strong holiday box office led by warner brothers "wonka" opening today expected to gross ans $35 billion domestically opening weekend after bringing in over $43 million from its international debut but needs to hold up the rest of the holiday season to turn a profit on estimated $125 million budget. now, warner brothers has the most on the line this holiday season with two other big-budget and potentially really big releases including "aquaman" and "the color purple." and "boys on the boat" animated film "migration" and our own parent company boosts across the $9 billion milestone. year to date this year's box office is ahead of last year, but through last weekend still $2 billion below 2019 levels according to comscore. the question is, after

theatertain stocks had a mixed year what to expect next year? a range of big sequels and the franchise films set for release, including "dune" doead poo poola mean girls. some delays due to the strike. and predicting the box office will decline next year and forecast growth in 2025. in the likes the "mission: impossible" and comstore analyst tells us franchises are no longer safe havens for studios or guarantees as the box office. we may see more swings and more original ideas. >> novsel. when do you feel finally new content again, in abundance? >> look, we're going to have tons of new content next year, but interesting about these strikes, a lot of content like

"dune" or "mean girls" pushed to next year and both movies are expected to be really significant for the box office. then some movies like "mission: impossible" pushed to 2025. so there was this weird lag and delay. then studios also have to be careful about scheduling. they don't want to take all the movies pushed fromscheduling. they don't want to take all the movies from this fall and crunch them into a tight block because there's not enough room at the movie theaters for that. they tried to spread them out. it will be interesting to see how it plays out. also the question of whether the barbenheimer phenomenon will be replicated. people had a lot of fun going out to theaters for those two films. will we see a similar cultural moment about some of the more sophisticated movies like "boys in the boat" or "the color purple" out this winter or is it about big family affair. i think there's a fear we may never get back to the 2019 box office levels. we'll see how it plays out. >> julia, thank you.

joining us now for more on the box office, our b of a securities and entertainment analyst. i want to talk to her about the board battle at disney and trion nominating nelson peltz. are you a believer that the movie business will never be the same again? >> hard to say. there's a lot of big movies coming next year and it's a strike-impacted year. the second half of '24 should be more normal in terms of releases. "dune 2" looks to be amazing. another one that we hear a lot about is another warner brothers film which is "joker 2." there's a lot. people are talking about

"deadpool" as well. >> in terms of overall habits, how so many people have gotten used to streaming, going home and watching things. there's certain movies i will say i'll go to the theater for and other movies where i say i'll wait for that to come on streaming and figure out which service it's on and maybe even buy it in in between window. >> that's true. but there's a lot to be said for windows. the box office sets the tone for the value of a movie. if a movie does well at the box office, it will have an impact on streaming. you'll want to see it. >> let me ask you separately, as we think about warner brothers, discovery, max and the like, given that there's not going to be a plethora of new content on frankly any of these services, i imagine for the first quarter or two of 2024, what do you think that will mean for churn and the like? >> well, we're moving into a new era in streaming, which is

bundling. you are going to see a lot of this in, you know, the year ahead. verizon, for example, will be bundling netflix and max. that helps to decrease churn and sack. that's really critical. we'll see hulu on disney plus as well. we'll see more bundling. it's almost like going back to pay tv, where we have this one big bundle. we're definitely going to see that in streaming. >> separate question -- >> go ahead, becky. >> go ahead. >> go ahead. >> i was going to go -- i was going to go to the disney of it all and ask you about bob iger and the board and nelson peltz. if somebody called you up and said who should i vote for, who would you tell them to vote for? >> this is just a tough situation. disney just appointed two new board members who are obviously

very well qualified, james gorman and jeremy darick. nelson peltz is coming with jay rezzulo. ran the parks of disney, was a cfo. he's well qualified. hard to say how this shakes out. disney, obviously, is not going to just sit back and do nothing. they both have time to make their case to shareholders. >> i appreciate that, but if -- if somebody asked you the question directly, i assume there are investors or clients of yours and they say tell me, what should i do, if i had to vote tomorrow what would you tell them? >> you know, these -- the board battles are not something that, you know, we deal with on a daily basis. i think bob iger has done a lot to correct the ship. while jay rezzulo is correct

it's not the disney he was has the, the whole environment has changed. in 2023, every surprise was a negative surprise. everything. all of the companies are dealing with that. >> okay. sounds like you're team iger, i don't know. we'll see. thank you very much. "squawk box" coming back after this. helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim:

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welcome back to "squawk box." joining us to talk markets is

julie beal. let's go straight to the john williams of it all. that's appearing to have moved the markets substantially this morning. the dow could have been up close to 100 points, now it's down to unch on the back of john williams talking about we're not talking about lowering interest rates. i was looking back to the language jay powell said on wednesday, he said that's what we're talking about. who do you believe in this circumstance? maybe that's what the debate is here in terms of the market. >> i think that's been an ongoing dynamic, where the fed is always saying don't get too excited. it's like when my kid is on his bike and i say slow down, slow down, he doesn't, he's five years old. i have news for the fed, they can say whatever they want, markets will take the clear body language and move it in the direction it needs to go. where we are doesn't surprise me. i think markets understand the

pivot is clearly up ahead of us. the timing of it is not as important as the fact that it's happening. >> you think -- you think this is strictly a timing situation. you think jay powell says it will happen -- effectively he said it was an active discussion. you heard john williams say effectively it's not an active discussion. >> i think it's managing expectations. the fed has been trying to get the investors to focus on the here and now and data to be consistently where it needs to be. it's not like inflation is going to get to 2% and the fed will cut by 50 basis points. investors are saying you're finally starting to capitulate and recognize we're seeing clear deflation where we need to see it s, try to stay with us in th markets. >> julie, we want to thank you.

people will guess and speculate whether this is coordinated or not among all of the fed folks. meanwhile, look at the dow, it's in the red. becky quick, i don't know what you think. we have ten seconds. >> i think i'm glad it's friday. leave it up to somebody else to figure out from here on out. >> fair enough. fair enough. make sure you join us next week. have a great weekend, everybody. "squawk on the street" begins right now. ♪ we're getting ready here. it's friday morning. clearing our thoughts. welcome to "squawk on the street." i'm david faber with jim cramer. we're live at post 9. carl is off this morning. let's look at futures. things have changed since we heard from williams sitting down with steve liesman. we can see a higher open for the nasdaq? let's get to our