"squawk box" begins right now. ♪ good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. >> it's a we. >> it yoyou're a we. you can see right now that the dow is indicated up by 151 points. s&p is roaring back 20 points. the nasdaq is up triple digits. this all comes after the worst day for the markets since september. the dow was down 476 points. it snapped a nine-day winning

streak. nasdaq and s&p down 1.5%. it is the first losing streak after seven weeks. we had seven weeks in a row of gains. take a look at treasury yields. that was the interesting part of the story. the ten-year yield is 3.8886. if you are trying to figure out what was happens in the market yesterday, yields are a bigger story of slowdowns, but not fed cutting rates. that is why lower rates leads to lower stocks. andrew. thank you, becky. let's talk about the micron shares. company reported a loss of t95 cents per share. second quarter guidance topping estimates. we will dig through that with the analyst at the bottom of the hour.

the stock is popping on that news. the price of other chip stocks. intel and nvidia and marvel all up over 1%. look at shares of boeing. the trade publication reported that the company won a key clearance from china's aviation regulators as it moves a step closer to resuming delivery of the 737 max aircraft after the freeze of four years. boeing still needs approval from the china national development and reform commission to get it passed. it was grounded in 2019 and new deliveries have been on hold. boeing projected that china will account for 20% of the world aircraft demand through 2042. joe kernen. >> that tim rose piece, i don't think, was helpful yesterday for the markets.

we have him on today. >> nick from the wall street journal is the fed whisperer about whether the fed is confused. the piece laid out that the fed states it is a confusing time. >> i thought he has been critical for a while of the powell fed. he was critical yesterday. why do you have to tell us? why would you cut at this point if you don't know what the economy will do? >> i think the thing he said was the idea that he thinks the fed is signaling they will cut right rates if there is not a recession. monetary theory ideas are still around. >> right back in it. doesn't matter. >> get pback to really low interest rates. >> you can make the case if the

economy is still strong. we can talk with him today. who called him and what is the motivation? austan goolsbee was already out. >> john williams was as well. andrew? >> do you think it is all coordinated? >> yeah. >> unless some people really do -- austan wasn't totally on board at times. >> that may be. i always love listening to kevin, but if you listen to the chairman a week ago, but if you listen to all of the folks in the last couple days, it is almost cold water on that idea. >> logically, it doesn't make sense. we all decided great, back to cutting. it doesn't make sense. i don't know.

austan would say that's not what he said. i think he did say that. >> i don't know if it is coordinated. they say no, we don't coordinate. it wouldn't surprise me if people in the room were surprised by the market reaction and felt like they would say something about it. they all said they he were surprised by the market interp interpretation. let's get to the next one. if biden gets reelected, this can't happen. trump could be mad at zaslav. he could be mad at one of the news organizations said about him and block the merger. warner bros. and paramount are in early merger talks. very early, it sounds like. warner bros. discovery ceo and

the paramount ceo talked about the deal right over here. >> across the street. >> discussions are preliminary and a deal may not materialize. joining us now is puck's matt bellamy. it couldn't get through right now, it doesn't seem like, could it? >> you never know. the way these media companies are looking right now, perhaps they would argue, they need this scale to go up against big tech. john malone said it would be more likely to go through if the company was in bankruptcy. if paramount global continues on the track it is on, we could be talking about it. i don't know bankrupt, but close to a spiral where the shareholders will come up against sherri redstone.

this is something. bob is having a meeting to say make an offer. see what you got. >> netflix is great. zaslav is heavy. you think of two companies that are not drowning, but hanging on to each other when neither one can swim is fitting. >> this is more than $40 billion in debt on warner bros. discovery. more than $12 billion in debt on paramount global. that's a lot of debt together. they are the most exposed media companies to this downturn in television advertising. that may not come back. they are projecting it will come back. amazon is about ready to suck up a bunch of advertising. we know about the big tech

monoliths. this is one of the days that the company will look. tomorrow may be worse and worse and worse. >> they even talk about comcast/warner bros. if this doesn't happen. that seems difficult. that would just show you how powerful that tech is where you could put those two companies together to make it more likely they are viable competitors to netflix and others in tech and amazon. >> there is speculation that this leak to media might even be a lure to try to get brian roberts to come out and make a play for one or both of the companies here. we will see. they haven't said one way or the other. they have a lot of stuff on their plate as well. it could make sense. >> what would comcast want?

i think back to the baby has been posplit in the past. if you think about the news corp and disney deal, what would be attractive to each of the companies? what makes sense? >> the studio. the studio here at paramount in particular is the asset that people want. the streaming service would be shutdown or merged into which ever one of the companies bought paramount global. the cable networks are still pulling off billions of cash, but declining assets and will ultimately decline. you have to figure out what to do with those. if you combine warner's assets with paramount t, then, you hava declining scale in business. it doesn't change the fact that the business is declining. if you have david, you want to take on the dying cable networks and make it a bigger problem? that is the question.

maybe they can offload to someone. if comcast bought the owner of cbs, there is a problem owning two broadcast channels. you have to divest one or get the government to change the rules. >> what you describe for legacy and streaming, i don't see it as a zero sum game. nobody is winning. >> netflix is profitable. it has a real business. netflix is not dragged down by the transition away from the lineal businesses. they have been able to invest and invest. they have one business and that's a good thing and also a bad things. in the streaming wars, it is a good thing. netflix is pulling away 250 million subscribers worldwide. everybody thought there would be more subscribers out there. it is harder. >> it is worth it for the nfl.

almost worth it just for that which is crazy. >> maybe. if it you think about warner's getting cbs, that would be a much more attractive lure for the nba and nba television rights. >> all sports in general. exactly. you know, i don't know about streaming or cable. i know about live sports. some of the things are hundreds of millions of eyeballs. nothing else that comes close. >> it is very expensive. you are renting those rights. the nfl payment that paramount global has to make is $2 billion. it is coming up soon on the right to air football. it is a very expensive proposition. paramount is out of the streaming wars. they are out. they are looking for a deal. >> is news other than "squawk

box" worth anything? cbs news? can they do something with that? >> there is a synergy with cnn and cbs. >> they are not doing it because it is a great thing to put them together. they are hanging on. >> that comes after the nfl which gives it a boost. >> is that an hour long? >> no, it is "60 minutes." >> david says it is a great global asset and the influence. it has been traditionally a good business. this is an outlet which has been over $1 billion of profit. the ratings are way down at cnbc. we cnn. they could see at least keep them in the television advertising game here. >> cnn is praying the supreme court reverses the colorado

decision. please let this guy run. what is cnn without trump? >> they are seeing it right now. it's not pretty. >> no. crazy. so many things factor into so many things. matt, thank you. matt belloni. coming up on the other side, we have more this morning. earnings and economic data on the agenda. we have the "squawk planner" next. and later, former senator pat toom hey will pweigh in on sale of u.s. steel. that and more when "squawk box" continues. 5% apy? that's new! yup, that's how you business differently. fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics.

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welcome back to "squawk box." i want to bring you the planner. key economic data head. we get weekly jobless claims and third quarter gdp rescisvisions coming up. nike is releasing numbers after the close today. joining us now to talk about the markets and the fed is telling us or not telling us is the managing director at gentrust. mimi duff, you heard our debate at the top of the hour. it seems so clear last week.

we heard the fed and jay powell said what he said. we were shocked at how it seemed and now everybody is running around with their hands up in the air. what did he say? >> i do think there was a material shift in the tone at this fed meeting. if there is anything confusing looking back is early december where chair powell pushed back on the rate expectations. at the fed meeting, i think i heard him say ten times that we're likely at our near the peak in rates and that looking forward, they would be talking about when the next ease or when they would transition to an easing. i do think the market has gotten ahead of itself with close to 150 basis points of easing priced in for the next year or by the end of next december. that is punchy. we think somewhat unlikely in

the absence of recession. >> what is your prognosis in terms of what the fed will do in the next year given the austan goolsbee and bostic comments? you named everybody who has come out and said something about this which has confused the issue again. >> yeah. the march date is fully priced for an ease. i don't think that. i think we will look at eases in the second half of the year. if we were to move into recession situation, we could see that. since 1974, the fed only eased with core inflation above 2.5% and when the unemployment rate is above 5%. we are at 3.7% right now. we think there is too much

priced in and too early priced in. >> in the good news is bad news and bad an news is good news category, then there is a new view in the market in the last 48 hours that things are not so great and maybe that is weighing on stuff. >> well, if the market, you know, there's a disconnect here. if we are pricing in dpgreater odds of recession, the equity markets did not get that message. there is a disconnect. i would say since the fed, the surprising thing on the equity side which is good for our portfolio is we have seen more grit in the equity rally. we had tilts toward sectors that would have performed better in the rates stability environment. i wouldn't make too much of one day which is yesterday, by the way. december seasonals are strong in

equity markets. we have seen that play out and i think that we will have to watch the data. we have friday. >> do that's mean you are locking up closer to christmas? ride the rally because january gets tough? >> we haven't lightened up yet. we are underweight on the equity side. we are tilted toward the rates stability sectors. we the actually out performed the s&p in the latest run-up. we have not lightened up. it is something we are looking at here. we moved pretty fast quickly. >> in terms of turno over the f a portfolio, which way do you rotate? >> we are positioned the same way for the last couple months. overweight bonds and underweight in some of the real assets and

slightly underweight equities. for now, we are holding that. we would re-balance if we see further equity run-up which is 14% or 15% from the high which is significant. we are looking at re-balancing more than anything. we like the state of our portfolio here. >> okay. we will leave it there. mimi, thank you. becky. andrew, thanks. when we come back, apple losing the bid to delay the import ban on certain watch models. we'll tell you what comes next. later, nick timiraos will join us on the fed. we will hear what he thinkofs the fed's market reaction. "squawk box" will be right back. s with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders.

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apple lost its bid yesterday on the ban on import the watch. the regulatory committee decision means the white house is the last stop for the reversal. president biden hasn't given any indication if he would veto the ban, but the press secretary says they are tracking the case ahead of the december 25th deadline. apple shares up 45% for the year. andrew. thanks, becky. let's talk about this other bloomberg report saying apple has been ramping up the vision pro mixed reality headset to

launch by february which is earlier than anticipated. apple sent an email to developers yesterday to test the apple apps with the latest tools. the vision pro is the first new product category since it started selling smart watches in 2015. it will be a hefty price tag at $3,500. it will be fitted properly at the point of sale or may not display content properly. it may feel heavy to wear. we will see if this is the future. >> it means you can't share them. you can't get one pair and all wear in the household. >> i do believe you can share them, but you will have to learn how to do the different settltis on it.

when the watch came out, they sold it at the store like a watch store. it is not something you buy online. you were learning how to do all of the particular things. there is a lot to learn. bring your kids if you will let them use it. >> it sounds like a big pain to me. >> i think of the first adapter or picks it up later as people get used to it. andrew is right. the watch is an example. >> i saw the example. we have something that looks exactly like that which has never been on anyone's head which is upstairs? it looks like that. one of those things you put on your head. >> what was the one so hot a few years ago? everybody was buying them? >> oculus. >> it is still a hot thing.

it will be a big christmas item. >> it is hanging on the handle bar of the peloton. coming up, retailers are warning. >> next to the mirror? >> warning of inventory disruptions. what from? the red sea. attacks on ships in red sea. we will talk to admiral james stavridis. he tangled with pirates during his naval career. as we head to break, here is a look at the s&p 500 winners and losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. rate is increasin s

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good morning. welcome back to "squawk box." live from the nasdaq market site in times square. futures are bouncing after what was a rare 300-plus point

downdraft. 300? maybe more than that. after the eight or nine sessions and six or seven weeks we have seen, it has been positive action, for the bulls, anyway. let's talk a.i., joe. the artificial intelligence startup anthropic which could be valued as high as $18.4 billion. it is attracting investors in google and amazon. it needs this money to get that compute power to continue to train and create the inferences to make it work. the cloud a.i. models have been vying for openai and chatgpt value higher than it. amazon and google in there and all trying to go after what is

now the openai and microsoft behemoth, if you will. red sea attacks continue and some flagging concerns over supply disruption. our next guest knows the waterways well and was involved in assembling a task force over pirates off the horn of africa. joining us now is retired add mirror james stavridis. he is the global affairs vice chair. admiral, welcome. you know the waters well. you did several deployments as captain of the destroyer. you led a carrier strike group in the region and fighting off pirates. is this mission one that you think can be successful? >> it can be successful. ten years ago, you may remember,

becky, we had a series of attacks not by these houthi rebels, backed by iran, but at that time, ten years ago, it was somali pirates on the coast of africa. you might remember that. it was quite severe. it caused supply chain disruption. ulti ultimately, we beat them back with a combination of military force and activity ashore and as well as private/public coordination with nato and the big shipping companies. it can be done, but it is challenging. >> let's talk about that on a couple of fronts. these were somali pirates before. i remember the footage. they used to come up with speed boats and board the shipping container fleets that wiere goig through. these are rebels backed by iran. should we assume they are better

militarily equipped? >> indeed. look at the video you are showing. that could be a navy zs.e.a.l. team. by contrast, think of the movie "captain phillips." with the pirates seccurry up. this is a different level of threat. this will require a bigger response. by the way, the red sea, this enormous body of water, the size of the state of california. if you put 20 war ships in there or 20 destroyers, it is like trying to patrol california with 20 police cars. it is a challenge. >> with the somali pirates, that required going to land to take out some of the places where they were launching from. that risks a real issue just in terms of even nflaming the situn notice m

in the middle east. what happens if you touch down and areyou are landing in yemend working with the proxy for iran? how does this not spread the conflict? >> it would. that is the ultimate concern for all of us as investors. if this goes high order, becky, in the wake of the attack by hamas on october 7th, u.s. has two nuclear power aircraft carriers and 80 combat each and squadrons of air force and 2,000 marines, that's a lot of u.s. fire power. this is there to deter iran, which is the puppet-master of the houthi rebels. you put your finger on the danger. i'll give you my cut as i look at it. it is "only" a 10% chance or maybe 15% chance it goes high

order. that's uncomfortably high. that would bring strikes ashore and leading iran to respond. then you are in a dangerous situation. >> that doesn't scare me as an investor, but it scares me as a human. what scares me as an investor is trying to figure out what this is going to mean for commodities prices and what this will mean for the global supply chain. even if we're saying we're going to do this, the shipping companies like maersk and others are saying show me first. we will go around the cape of good horn and it takes longer to get things here. if they decide they want to go ahead with that, it will cost a lot more to insure those ships. that jumped up overnight 50 times whetat they were paying before. that will work inflation

through. >> you described it perfectly. we ought to for that reason alone, setting aside the geopolitical implications you stated correctly, set those aside be getting after this. we, nato, eu, we, our asian allies and regional powers. we need to get the saudis, who own a big chunk of the red sea coast into the game against these houthi rebels. they have been fighting them already in yemen. there is coalition there that could go after this, but it is a matter of orchestrating it and getting it in right places and building the intelligence picture and responding at sea hopefully so we don't go ashore. becky, i'll finish with this. ultimately in somalia, we had to go ashore to get to the camps.

i hope it doesn't get to this. i don't think we'll end up there. it is one to watch. >> this feels like a situation where it's everybody except the houthi rebels and iran. this is terrible for egypt. something like a huge amount of their tax revenue comes from the panama canal. it prevents their ships from getting there. i can't think of anybody outside of iran who wants this to happen. >> the only other actor i could name in that sense would be russia which would benefit from higher oil prices and venezuela, who wasould as well. shutting down the suez canal would choke international shipping. you showed that graphic. 15% to 20% of the world's shipping goes through there. >> admiral stavridis, thank you.

coming up on the other side of the break, we will talk about wells fargo. employees at a branch in new mexico voting in favor of unionizing. the first time we have seen this in the banking world. details after the break. we're coming right back. >> announcer: currency check is sponsored by interactive brokers. the best informed investors choose interactive brokers.

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welcome back to "squawk box." interesting story. wells fargo employees in new mexico voting to join a union yesterday. workers voted 5-3 in favor of joining the communication workers of america united. that makes wells fargo the first big bank with a union. the bank saying, we respect our employees rights to vote for union representation and we continue to believe our employees are best served working directly with the company and its leadership. let's see if this becomes a trend in the banking world. i don't know, becky. >> i don't know either. it will be interesting to watch. it is new places we're seeing union votes take place. in banking, especially.

let's get to jane fraser of citigroup. the company is shutting the global distress debt group. that group employs 40 people. she closed the municipal bond trading operations last week. citigroup did not comment on the cnbc report. we talked about that last week, andrew, with the municipal bonds. i was surprised it was 100 people in the municipal bond division. this is only 40 employees. businesses known for, but smaller businesses. >> it makes the hard decisions less hard, that's for sure. >> joe. toyota stock under pressure this morning. its tokyo listed shares fell by 4% overnight after the autoautomaker announced a recall of 1 million vehicles. it involves the toyota and lexus models made between 2020 and

2022, including the camry and the rav 4. at issue is the short circuit in the sensor in the air bag which would not cause them to deploy. we check out shares which are trading pre-market down 1.25%. the biden administration is discussing raising tariffs on chinese electric vehicles. this is a "wall street journal" report in the attempt to bolster the u.s. clean energy industry against exports from china. chinese evs are subject to a 25% tariff. they are considering raising tariffs on chinese solar products and battery packs. it could lower tariffs on other products that they don't see as important. coming up, chip semiconductor stocks rising ac across the board after micron

results eat estimates. we dig through those numbers coming up next.

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micron reported first quarter results yesterday, the company posted a loss of 95 cents a share. not as bad as the $1.01 loss that analysts expected revenue came in above expectations. second quarter guidance topped estimates. joining us now, we're going to talk about his picks in the sector, first stock overall, vivek aria, b of a securities senior semiconductor analyst,

five-star rated. that sounds good, but it is not out of like 100 stars, is it? >> good morning, joe. thanks for having me. >> let's make that clear. five out of five. overall, vivivek, you point up, stock is up 60% year to date. more to go, but it may not be quite as easy, but there is a lot of tailwinds that weren't tailwinds before, the inventory correction looks like it is over. and some of the things that weren't going -- semiconductor industry's way are starting to turn and go their way. >> yeah, indeed. as you mentioned, you know, let's start with the risk factors that we have gone through, very strong move up in the stock index. we are getting into turbulent period where there are elections in the u.s. and taiwan, there are still geopolitics, still the u.s. and china friction. so there are risk factors to be aware of. but the important thing is we are bullish on semiconductors on

a fundamental basis for two reasons. first is that -- the cycle, the start of a new upcycle. this is the time when semiconductor sales have just turned from negative to positive year on year growth. the last three times we went into this magical moment of flipping from negative to positive, we had two plus years of year on year growth in semiconductors. we're the start of a new up upcycle. the results show we are past the inventory corrections and the last cycle in semis drove a 60% further move up in the index. start of a new upcycle. the second thing i do feel some of the secular trends, whether in cloud commuting or generative a.i. or the adoption of semiconductors and just the benefit of some of the chip stock funding. i think there are a number of factors that can help us

overcome some of the broader market risks. so we are very bullish on semiconductors into 2024. >> and initially it was, like, well, micron, i don't know, it probably is true as micron goes. the whole industry goes. you don't think of micron as necessarily a cutting edge leader. because it has been a commodity producer for so long. i watched it over the years, the moves that we would see, the boom and bust periods, we would see in memory, really made it hard to be sometimes a long-term shareholder of micron. but you would say that what micron's results indicate right now, you can extrapolate to the whole industry, even things like nvidia, some of the sexy names that are involved in all the new stuff, this is a good omen, micron, doing better? >> yeah, and the reason for that, joe, if you look at over two-thirds of the semiconductor industry, it is exposed to the consumer in one way or another.

and the remaining part is where we have all the growth areas of data center and so forth. so, last year the data center actually did quite well or last year as in '23. the problems we had were on the consumer side, where during covid, a lot of growth was factored in, a lot of capacity was built in, that in hindsight credited a lot of inventory that had to be cleared. and memorymakers, they are heavily exposed to the pc market, to the consumer market, that's where a lot of that inventory correction we think is over. so now that foundation is secure, and at the same time, memorymakers are now finding new applications in data center, right? every new nvidia chip that ships with a lot of high bandwidth memory. memory companies are finding a very kind of secure cyclical base and they're finding new opportunities in the data center to grow. >> that's interesting. very complicated.

so you like nvidia best. you like avago. what are your top five if you have five? >> we are big fans of what we call the three cs of semis, cloud, cars, complexity. so cloud we really like, nvidia and broadcom. cars we like nxt semiconductor. and chips, what is common to the names, they're the most profitable companies in the individual end markets and they're exposed to the areas of enduring growth in the industry, whether that's in cloud computing, whether that's in chip design and complexity or whether that's in automotive. so, we think these are the three cs of semi, clouds, cars and complexity which will benefit in the year ahead. >> and stocks up 60%, but go ahead, you think there is plenty

room to run further in 2024 and those are the four, those four and maybe some others, i guess. >> yeah, i think that, you know, last three upcycles we have seen the stocks go up another 40 to 80%. so compares do start to get tougher in some time. but the important thing, joe, is that as we are going through the digitalization of the global economy, we are seeing the participation of not just the top u.s. companies, but we are seeing a trend where the global -- the regional powers want to invest more in semiconductors and generative a.i. is a place where we are starting to see investments. and there is only a handful of semiconductor companies that can participate in thisbecause it is a very consolidated sector. so i think those factors can combine to provide pretty strong returns of the semiconductor stocks. >> feeling deja vu. when i listen to you, i go who is this guy?

you got a ph.d. right? i remember, i looked you up last time and you're, like, i don't know, do you design any rockets? you don't have to design rockets to be a rocket scientist, but you got -- >> that's right. >> all right. rocket surgeon. vivek, thank you. >> my pleasure. thank you. >> see you. >> happy holidays. >> you too. >> when we come back, much more on the media merger deal talks. paramount and warner bros. considering a tie-up. we have got more reaction straight ahead. "squawk box" will be right back. >> announcer: squawk picks is sponsored by wisdom tree, the modern alpha pioneer.

good morning. is the santa claus rally back on? after the s&p's worst day since september yesterday, the futures this morning are in the green. we will break down the latest market moves. warner bros. discovery in talks to merge with paramount global. we'll find out if the media merger makes sense. and the real reason why advertisers are pulling back from advertising on x. here is a hint, it is not social or political. we have the data and the reaction from elon musk biographer walter isaacson.

the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin with becky quick and joe kernen. we got a lot going on in the next two hours. the futures right now, let's show you where things stand, two and a half hours before things are set to open. right now they would open up about 155 points higher on the dow, nasdaq up 110 points, s&p 500 up a little over 21 points. treasuries, this may be what is moving things, we're going to talk to somebody who is known as a fed whisperer in a little bit from "the wall street journal." ten-year note at 3.883. the two-year, 4.377. we have our own fed whisperer in steve liesman, the best fed

whisperer in the whole business. >> we do. he knows his stuff. >> who the true fed whisperers are. let's also talk about oil real quick. wti crude, you can buy it by the barrel, it will cost you more than it was going to cost you four weeks ago, i don't know if we can flip the board there, $73.90. that's in large part because of what we're now seeing in the red sea. and the cost of transporting goods around africa now to get around some of those issues. crypto right now, real quick, bitcoin trading just under, well, right there, $44,000, which is back up again. becky? >> andrew, thanks. let's talk markets right now. joining us with some insights as to what we can expect as we wind down the year and look to 2024 is paul zemsky, chief investment officer and founder of the multiasset strategies and solutions team at voya investment management. let's talk about this. yesterday, with the declines we saw in markets, worst day since

september and had people starting to ask have we run too far, too fast. you got a pretty resounding no when it comes to that. why is it? >> absolutely. so, look, the fundamentals are strong, markets are going to be up next year, on any week or day, sure, we can have a pullback as we saw yesterday. we're recovering some of that this morning. but when you look at the fundamentals, earnings, you look at what is going on in interest rates, you look at what is happening with inflation, people are way too pessimistic at the beginning of this year, still not fully invested and, yeah, you can try and time the market, get out now and maybe get in next week, but if you do that, you'll miss the big rally next year. >> the only thing that concerns me with that is, again, last year, people, every single person we put on the show was talking about how last year was the year for concern, a year for caution. markets took off. this year, it seems like everyone we're putting on thinks next year is going to be huge. what is the risk to that? what is the downside scenario?

>> yeah, well, 2023, never have so many people been so wrong by so much. but, you know, i really think that next year is setting up to be a positive year. we're not predicting 20% returns, but look at the fundamentals. we have a situation where interest rates are coming down, profits are going to be up, and, you know, i think what people miss in 2023 was that the consumer and the private sector were in great shape. we follow this wonkish indicator called the private sector financial balance. and when that's positive, that means corporations and individuals are a net positive saving mode. and it was almost impossible for that not to be the case given how big the federal budget deficits were, they have to balance. and there was never a time in the u.s. history when there was a recession when the private sector financial balance was positive. so, yes, i'm cautious, i'm a little bit nervous that, you know, we're now with the consensus, last year was we're not. that doesn't mean the market

still can't have a decent high single digit, you know, return in 2024. >> do you think the recession is coming this year? >> no. i think we'll have a slowdown, you know. i don't think -- look at -- if you look at gdp, if gdp is up half a percent, or minus half a percent, that's going to feel recession-y, but it is not that deep into the recession. the thing that gives us comfort is the fed can really decide how big a recession they want, if inflation continues to come down as we think it will, there is 500 basis points between the fed funds rate. the fed can start the economy up again pretty quickly if they want to. imagine what a 3% mortgage rate would do for this country, right? >> here is my concern with that, paul. why in the world would the fed cut rates like that if they're not in a recession? it is this expectation that the market is going to get rate cuts, and the -- at the same time, the expectation that the economy is not really going to be bad. i don't know that there is a

scenario where both of those things play out. why would the fed go back to these ridiculously low interest rates. we're trying to get to back to a more normal unless there is a big recession to deal with. >> the base case is that the federal cut rates, if you remember, as inflation comes down, real rates go up. the fed did nothing, they would be tightening as inflation came down. they don't want that. they need to cut rates 100 basis points or so next year, just to stay as tight as they are today. i'm saying if we did have a deeper recession, the fed could cut rates and turn that around very quickly because, remember, we're not in a situation where we're having a financial crisis, the banks are in great shape, so, if the feds saw a deep recession, and needed to cut, there would be plenty of ways of getting that money back into the system and we could turn things around really quickly. >> if you had a chance to ask fed chairman jay powell a question right now what would it be? because i think the entire market is kind of swirling around this right now. this idea that, yeah, we think

rate cuts are coming, we think the economy is going to do pretty well, and your question to jay powell would be what? >> i would want to know how worried he is about the commercial real estate sector. for us, that's the only thing that could really hurt the banking system, the banking system is attacked, when the fed eases, they hit the gas right away. we haven't thatsituation in a while. we had financial crises the last few sessions. the banking system is attacked. commercial real estate doesn't hurt it, the fed hits the gas and off we go again. that would be my question. does he worry about the commercial real estate market. >> that gets me back to the same thing, though, if he is not worried about the commercial real estate market, and he's not worried about the economy, because things are going pretty well, why is he going to cut rates now? it is just -- it is hard for me to imagine this perfect scenario that the market seems to have laid out, where we're getting rate cuts and the economy is not really going to suffer. >> well, not rate cuts today, but probably our best guess april or may so that as inflation comes down, right, the

fed funds rate is 5%, and inflation drops 100 basis points, we have seen 100 basis points rise in the real rates. the fed got tighter. so i think powell will cut, just to make sure that he follows inflation down. so he needs to follow inflation down so he doesn't make the fed actually tighten more in a real rate sense, and i don't think they want to get any tighter here. while they're not going to put the pedal to the medal, i don't think they want to get any tighter and technically to do that, they have to ease. so, they could -- the fed will follow inflation down, don't get tighter than they are today. >> okay. paul, thank you. paul zemsky. >> bye-bye. coming up, big bank and retailers face off over credit card swipe fees. details after the break. and then later, is a tie-up of warner bros. discovery and paramount a good idea? is it even possible? that's the topic of today on jon fortt's on the other hand

segment. he's here to weigh in on both sides of the argument. "squawk box" will be right back.

i'm a little anxious, i'm a little excited. i'm gonna be emotional, she's gonna be emotional, but it's gonna be so worth it. i love that i can give back to one of our customers. i hope you enjoy these amazing gifts. oh my goodness. oh, you guys. i know you like wrestling, so we got you some vip tickets. you have made an impact. so have you. for you guys to be out here doing something like this, it restores a lot of faith in humanity. welcome back to "squawk box." banks and retailers have been battling over that 2% to 3% swipe fee credit card companies charge customers every time that they make a purchase. want to get over to cnbc's emily wilkins, she joins us now with

more on that battle twin retailers and banks and it may be coming to a head. >> yeah, andrew. they're both using the holiday season really to try and make their point. the average family is going to be racking up about $20 in these fees this holiday season just from paying with their credit card and that's according to the merchant payment coalition. republican roger marshall is trying to change that. to have families pay less. legislation from him and democratic senator dick durbin would require banks to offer retile retailers more options. this would reduce those fees. now, the bill targets visa and mastercard, which make up about 70% of the market. >> it is not fair that these two credit card companies, four big banks are taking advantage of american consumers. and i think that this -- what affixing a price, what it does is increases competition. >> on the other hand, banks and credit card companies are

warning that this bill could lead to the end of credit card points, which nearly half of all travelers are using this holiday season according to a survey from ipx 1031. richard hunt said points help ease the cost of travel for many people, including one very notable name. >> traveling during this holiday season will be so expensive, santa claus will be using his points to lower his cost of travel. >> on a serious note, hunt said there is no guarantee that retailers will pass along savings from the fees to consumers, if they're even able to find alternatives to the dominant credit card systems. >> you have to invest billions of dollars as a credit card processing company to make sure that credit cards are safe and secure. you can't just give it to some johnny come lately company that is out there, has not proven that they can provide safety and security to your credit card, that you can have a peace of

mind when you make the transaction. >> he said he's hoping to get a vote on his legislation next year, possibly attaching the measure to one of the larger must pass spending bills. andrew? >> thanks, emily. we'll continue this conversation right now because it is quite a debate. some people call it a tax on everybody. i want to bring in rahit chopra. good morning to you. let's talk about this tax, if you will that does exist across our economy in many ways in the credit card universe. and really let me push back on this idea, and i appreciate that there is a 3% tax sort of hidden tax on everything in many ways, but if, in fact, that fee were to go down to 1%, 1.5%, whatever you think the number is, are you convinced that it actually goes back into americans' pockets, or in reality does it go back into

the pocket of the business owner? and maybe that's a good thing too in some kind of trickle down scheme. but i don't know. >> well, i think regulators always are a little skeptical when there is not full competition, when all the prices are the same set across the different competitors. so, look, we have americans owing a trillion dollars in credit card debt. they paid $130 billion in interest and fees last year. and, of course, we hear retailers also saying they don't even know how much they're going to pay when a card is swiped, depending on if it is a credit card, or a debit card or something else. so, you know, we're really focused on making sure that consumers can switch, find lower rates, but, of course, i think retailers are also asking for some of the same things.

>> well, but that's -- that's a meaningful question. is this being done on behalf of consumers or is this being done on behalf of retail owners? as you know -- by the way, there are small business owners as well, not all big boxes and massive companies, but nonetheless, i think there is a legitimate question to be asked about that. >> well, we regulate the consumer side, not the retail side, but, look, if you look across the globe, you want to make sure that consumers are getting lower rates, retailers are getting lower rates, that banks and credit card issuers are fairly advertising their rewards and others they offer. so, i really fall on the side of what can you do to create competition across the board. i have seen there has been ways the regulators have taken action on this, the ftc took action against mastercard, about blocking competition.

the federal reserve is looking to modernize some of its interchange rules because, andrew, the cost of processing a lot of these transactions has really fallen. and i think in some ways there has to be a way to -- >> if government is going to get in the business of setting prices, what is a fair price? >> well -- >> the other piece is, let's just say -- let's stipulate one thing for the audience, because i sometimes think it gets missed in all of this, there is one great benefit to a credit card beyond the extension of credit and the like, which is that, you know, if you have a purchase that -- where it is broken and needs to get returned, if your c card gets stolen, there is a whole bunkch of things where there is protection in the card that actually doesn't seem built into the price, but is. >> well, sure. and i think that's part of why i'm not sure price setting is the only thing, it is also about

network competition too. many years ago there was more requirements to allow multiple ways to process payments, we also now see new forms of payment entering the market, tapped to pay that doesn't necessarily use a card, qr codes, other innovative technologies, and i think we don't want the incumbents blocking those new payment mechanisms from entering. so, there are important ways we got to regulate, but we also want to make sure competition is there, both for the consumer, and for the whole marketplace. there is not necessarily specific -- >> let me ask you this, and i mean this completely seriously, if sorkin enterprises decided to introduce a new credit card, that had a much lower fee for consumers, but i offer no insurance product, meaning if your product is stolen, or broken, i'm not going to help

you return it. i'm also not going to -- if you lose your credit card, i'm not going to help you on fraud. but i label it and tell everybody this is what it is. it is only going to cost you 1% or less. i kind of think you're not going to like that either. i think you're going to tell me that's like the airlines telling me i have to pay extra to bring a bag on the plane. >> well, we want consumers to be able to choose. they can choose cash. they can choose other methods, but you don't want to create a system where you're basically trying to trick people into something or to arbitrage it. so, you know, again, we're really focused on how consumer fees, interest, and most of this business model is based on charging interest on that trillion dollars of debt, and honestly, we do have a system where there is fair profits being made, but, look, there is bipartisan interest in congress about how to deal with this, they're going to probably keep

debating it. but we and the regulators are going to look to make sure we're stopping abuses and anticompetitive conduct and where people are subject to bait and switch, we see half a billion dollars or more rewards getting forfeited or devalued. and it has got to be more honest than that. >> rohit, thank you for the conversation and the debate. i'm sure it will continue and i'm sure we'll talk a lot more about it. happy holidays. >> thanks so much. becky? >> thank you, andrew. when we comeback, your premarket movers. and then author and distinguished fellow of the aspen institute, walter isaacson will join us. we have a lot of things to talk about, media and much more. the futures this morning are bouncing back in a big way after yesterday's declines. dow futures indicated up by 162 points after a steep drop yesterday. s&p futures down by 23. the nasdaq indicated up by 121. "squawk box" will be right back.

>> announcer: time now for today's aflac trivia question. which baseball player had the largest contract before shohei ohtani's record-breaking $700 million deal with the dgdoers? the answer when "squawk box" returns. our office. and he's using it to send out medical bills. 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. elephant would've been scarier. trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content

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>> announcer: now the answer to today's aflac trivia question. which baseball player had the largest contract before shohei ohtani's record-breaking $700 million deal with the dodgers? the answer, mike trout. his contract with the los angeles angels was $426.5 million over 12 years. all right, let's get to dom chu with a look at this morning's premarket movers. good morning. >> good morning, becky. we're watching the media stocks for sure this morning because of that paramount global warner bros. discovery story. warner bros. discovery up about 1%. wdd brilliant, just about 40,000 shares of premarket volume. the two held very early stage merger talks acording to people familiar with the matter. competition heats up with media companies seeking size and skill to battle the rise of netflix

and tech focused companies like amazon, which have changed the media landscape over the last several years. so, we're keeping an eye on media for sure. also, shares of micron which are up north of 6% now, nearly 300,000 shares of volume. the computer memory chipmaker reporting a smaller than expected quarterly loss alongside better revenues. it also gave a stronger current quarter forecast than estimates were out there indicating that maybe the market dynamic for memory chips and flash storage products may be recovering faster than some anticipated. micron is also catching a tailwind from continued spending on what else, artificial intelligence related to applications these days. those shares up 6%. and we'll cap it off with an analyst call on financials. evercore isi is out with their top list of calls for 2024. in financials, names like morgan stanley, bank of america and kkr. they believe there is still more runway ahead for longer term growth stories tied to wealth management and private markets. that's good for names like morgan stanley and kkr.

they also see a bottoming out for net interest income trends over the next year. which favors a name like bank of america, which has the ability to more capitalize on the so-called nii trends, more conservative credit exposure, better valuation at current levels. so morgan stanley up fractionally, kkr thinly traded, not moving very much right now. bank of america up 1%, andrew. i'll send things back over to you. >> dom chu with the must watch list this morning. thank you. when we come back, the advertisers x factor for not marketing on elon musk's social media platform. the new data from our cnbc all america survey. reaction from musk biographer walter isaacson as we head to a break. check out shares of boeing. last night, trade publication the air current reported the company has won a key clearance from china, moving boeing a step closer there to resuming deliveries of the 737 max aircraft after a freeze of more than four years. we're back after this.

data from the cnbc all

america economic survey. it backs up the decision of adve advertisers, some of whom have pulled out of x, but not for social or political reasons, but because users don't find the ads relevant. steve liesman joins us now with more on the data. steve? >> joe, good morning. the cnbc all america economic survey suggesting the decision of the advertisers to pull out of x or twitter may not be very costly. here's the top media sites according to our survey. facebook, 39% of the public say they use it every day. broadcast cable is 34%. chuck one up for us here. youtube, instagram, and twitter, 9%.

for all the press it gets, just 9%. it is the clear bottom there in terms of daily usage. okay, who uses what? 18 to 34 group, they're into youtube and instagram. 35 to 49, that's facebook bastion for them right there. also, the 50 and over group as well. and then the 65 plus, they're really into the tv. i will say, we had 33% of the 18 to 34 group saying they used facebook. i thought that was relatively high. here is the key ad metric we're looking at and relevancy, 60% of the public finds the ads on instagram useful. 56% for facebook. you can see a lot of those numbers are relatively high, lower for broadcast cable. snapchat and, again, there is twitter on the bottom, just 24% of the public say the ads they see are relevant. who finds it most relevant?

age 18 to 34, instagram, 62% versus 50 to 64. tiktok, young folks, find those ads relatively relevant anyway. and for twitter, 18 to 34, 30% versus those who are older, just 20%. and you can see the broadcast cable there also relatively on the low side. even when you level the playing field, and you ask regular x users if the ads on x are effective, they give it low marks. there is some political biases there. republicans rate x ads more effective than democrats do. republicans still rate them well below instagram and facebook. i don't know, joe, i think musk may have some work to do beyond whatever the political reasons are there. and i don't know about you, but when i go through facebook, i find the ads a little too eerily relevant. >> i was -- i wasn't going to really out myself, but i was going to say, if they -- it would be like the worst person you could ask for this, because

it would be, you know -- >> what would you say? >> na. >> he doesn't buy anything online. >> no, not that. i don't go on facebook. i've never seen a facebook ad. i don't go on instagram. i've never seen an instagram. i don't like getting ads on twitter. >> you're useless. i don't need you, joe. >> i'm the person on, who do you want for president who is the vice president, i would be in the 20% that doesn't know. >> i buy a ton of stuff online. last year i bought a bunch of stuff on x ads, i was disappointed by it. >> tiktok? >> i don't use tiktok. instagram, i bought half of christmas this year and i'm happy with the stuff i got. it has a good algorithm. >> what about the ads? how do you answer my survey? >> instagram. only because it knows me. it has figured me out, the algorithm, it figures out what i like, what i buy and repeats stuff, some of my favorite stuff i now buy from instagram. >> do you repulse at all?

do you -- do you feel weird? >> yesterday i was on the phone with somebody talking about something and all of a sudden it is in the ad ten minutes later and i couldn't even believe it. and i thought to myself, i'm going to search for this, i didn't do anything, is it listening? i know it is not. says they're not, but sometimes it is so crazy, you don't even know how it is happening. >> yeah. >> i know. it is a little weird. and sometimes you feel like, okay, i would even like sort of get off the -- that's -- it was a pair of shoes i bought once and i only buy shoes like once every couple of years. and then i bought the shoes, and the shoes were on the facebook ad. i'm, like, wait a second, how did that happen? >> shoes and underwear. >> no -- >> i can weigh in on broadcast cable and x. that would be the only thing i can -- i don't like getting ads on x. i get rid of them. who are you? how did you get to me, and i didn't ask for this.

i don't like it. steve, we got to get to -- >> i want to throw -- >> go ahead. >> one other idea out, joe, which is i was talking to my son about this, he's 20 something, and i told him about the results and he goes, yeah, i don't use facebook. i said, but there is that 33% of the 18 to 34 that say they use facebook. are you sure you don't use it? i said what about facebook marketplace? he goes, oh, i look at that every day. so i'm wondering if somehow zuckerberg has found a way to capture this younger cohort on this facebook marketplace where he's looking for whatever he's looking for there, but that's a place they seem to engage, but maybe not -- don't think of it as facebook or the place where the old folks are hanging out. >> right. all right, we got walter here to talk about all this. >> oh, good. >> we're going to -- we got a lot to talk to you about obviously with this warner bros. and everything. but i want to look at this, want to read it? a.i. is making its way into the newsroom and as more companies begin to use the new technology,

old legislation is calling into question what is protected. joining us now to talk about this and, of course, the possible tie-up of warner bros. and paramount is cnbc contributor walter isaacson, he's, like, he's the author of "elon musk." we were talking about x and whether it is relevant or not, i don't know if you saw our billionaire -- another steve liesman report yesterday, the most fascinating thing to me was the most beloved billionaire only got plus 15. people hate billionbillionaires guess. warren buffett. what got me is that elon was zero, but zuckerberg and bezos were minus 35. after all this, after fracturing the entire feeling of the country, the tribalism and now people are either here with elon or here with elon at this point,

he still gets a zero. that shows you how fervent his supporters are. >> zero meaning balance, haters and lovers. >> zuckerberg is minus 35. >> musk has always been polarizing. >> not as polarizing as zuckerberg. he has 35. after andrew's interview and after the hamas stuff, i think he's too big to fail. that's what i've come up with. he's too big to cancel, isn't he? too big to cancel. >> john oliver did this piece on him that was sort of critical, but by the end, says the same thing. this guy is all over our lives. we got to understand him. that's kind of the point of my book, which is he's all over our lives and also it is a fascinating character who is going to enrage you, but he's also going to engage you. you got to figure him out. >> i'm trying to figure out why he would finally get a pass and i think it is because even the

worst case scenario for elon, i still understand him, just an individual who might have a few flaws, but i don't think he would really mean anything that would cause him to get canceled. >> well, he -- he's always shooting himself in the foot, always about to go -- but we have seen this since 2008, especially 2018, he's doing the pedophile tweets, and then when he buys twitter, amplifies -- >> this is not new. and i must say, after following him for two and a half years, i still say, oh, my god, twitter is about to go off the cliff. he's going to crash and burn. this is going to crash -- >> nobody is mad at twitter as they are at facebook. and the damage that facebook has done to kids and everything else, i guess. is that why zuckerberg -- >> i think the kids' problem is there with facebook. >> becky says it is just from hanging out on -- >> yeah. i think bezos would have rated higher a few years ago. i can't figure out why he has

such negatives when -- i'm trying to figure out why would he get such negative ratings? a few years ago, he would not have. >> i'm not sure i believe all the polls. >> okay. all right. >> people have instinctive reactions. the thing about -- i think twitter or x is now because partly because of gaza, the anti-semitism fights, the ivy league fights, in the past month or so, usage has gone up, not just daily users, but the amount of time they spend on it. advertising has gone down because its brand advertising like disney that doesn't want to be in a toxic stew, but that's not the main type of advertising you're going to get. you were talking about direct response ads, and once they figure out that you like giving jewelry to your family, or you like buying whatever -- >> you need higher quality stuff, the stuff i bought was all garbage. >> it was? >> yeah, i bought stuff last

holiday season and i was shocked at the lousy quality of it. they need higher quality stuff. >> that's it. i remember when, you know, cnn or "time," you fill some of the bad ads with 1-800 -- >> you mean cnn, cbs? >> they're merging now? >> we have to do like a rapid fire, because i was just thinking, we haven't asked you about plagiarism and harvard and what a bizarre set of circumstances that we're seeing there with the 700 faculty members, i can't figure that out. what do you think should happen there? you got any issues with plagiarism? is she too big to fail for -- >> at the moment she is. >> for what reasons? >> because you can't just run a president out. it is going to take -- >> they ran magill out. >> harvard has been around almost 400 years. going to be around another 400 years. even on the gaza thing, you think, okay, everybody should

catch a breath for a minute or two, assess things. i think this will play out. i don't think the plagiarism stuff is all that bad. but i do think it is part of the atmosphere. >> what if students did that? they would be out of harvard immediately. >> i've gone through it all. it is -- some of it is, you know, there are a few where -- >> what if you did it? >> no, i'm -- i put notes all over the place. >> i haven't seen what she was changing in these later papers. i saw the harvard statement that said we didn't find her guilty of plagiarism, but she's going to go back and add citations and quotations that she forgot -- >> she was never secretive. she cited -- she used the names of the people she was paraphrasing in the piece. but she didn't put it in quotes, didn't cite it fully enough. these are things you definitely shouldn't do. i don't think that's the biggest deal. the biggest deal is can you run

a very large complex institution? >> you're a teacher too, a professor at tulane. if a student did what she did, what would you do? >> i'm more worried about them using chatgpt. it is something i did at "time" magazine when people would -- i would say, just err on the side of being more generous. put the person's name, if you're going to use something that was their idea, put it in the paragraph, don't just bury it in the acknowledgements, so everybody on everything we're doing today should learn to be a little bit more generous and that's one of the problems we have with our hair being on fire with everything from college campuses is take a breath, these things are happening, really bad happening in the world, undercitation is not one of them. >> they don't get fired for saying, you know, genocide is --

i don't want to minimize it and just say take a breath, that's not a big deal. >> no, no. i was talking about the miscitation -- >> but just in general, they have screwed up our colleges beyond belief. >> -- which is we have a system for 400 years, starting in germany, where the faculties of each department get to hire faculties in that department. tenure them, which means they can drift as they have to the left and then to being woke. >> you know what kind of people are finally -- >> you keep perpetuating -- >> what about cbs and cnn? >> we didn't -- we got to, dwdon't have enough time. >> david zaslav understands you

have to survive. they want to get out of paramount, he's got to make a bid for it. it is hard to assess antitrust at the moment. i was somewhat surprised at random house simon and shuster got knocked down and we'll see even in the airline industry. consolidation in the media content industry is more complicated because it is hard to know what you're talking about when it is the market. what does netflix feel, is it part of it? so, i think there is a good chance -- >> i do think quickly. and it is, like, what all americans are facing right now. the media, to try to merge, would trump be any better than biden if we're trying to merge? trump might be mad at one of the -- he's going to pull the license. >> that's more dangerous. >> it is more dangerous, but you don't know either way.

you wouldn't know which horse to bet on. >> well, it is more dangerous to america's values -- >> well, we can -- >> to have a president who is going to say, i don't like the merger because i don't like what cnn is saying. >> he says it out loud. other people might -- it is very dangerous to have 14,000 people coming across the border every day and saying, what -- >> if you're worried about democracy. >> this is a bet for more time. >> we got democracy problems on both sides. >> i like that introduction, you saide' gng wreoi to talk about a.i.

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media ma could heat up again with warner brothers discovery considering a purchase of paramount. is this combination a good idea? jon fortt is here to weigh in. hi, jon. >> hi. a great idea if reg greaters allow it, which she should. cable carriage fees evaporate and streaming profits losing. against that backdrop warner brothers and paramount are looking to combine strength, cut costs and avoid extension. talking about combining, news side, cnn and cbs. hbo and showtime. folksy side, hg-tv and country music television, to name a few, yes if they can bet on massive job losses. sad truth a job loss authorized, anyway. locking in higher costs in union deals as consumers are willing

to pay subscription fees, that's waning and advertising slows. trust concerns 20 years ago would have sounded insane to let owners of hbo and showtime combine. in a world of netflix, hulu, apple-tv, and others, it's a shrine. thinking about a $10 million market cap paramount to have a fighting chance generals $178 billion comcast and $167 billion disney. let them try. >> but is combining these companies going to make it a better company or just make ceos richer? >> well, on the other hand, even if combining those isn't illegal, doesn't make it smart given the amount of debt each has and unstable economic development. warner buying paramount, kind of a classic leverage buyout. private equity lards on debt and cuts down within an inch of its life for profits. what's wrong?

simp simplistic. this turns to scale as a solution. 2006 in the teeth of a rise of the web and online ads second largest newspaper chain in the country "night river" forced to sell out to mcclatchy. distracted leadership how to change the model and turn the business around. another riesen it's a bad idea, wall street starting to get discipline around m & a. destroying so much value investors howling about it for decades. >> keep looking at it. if paramount, the studio is the great prize that everybody's looking for, whyaren't the deep pockets of the netflix or amazon interested in going after that and taking it on? >> yeah. really seems like theoriginal content from those versus just purchasing something that's already achieved whatever level

of value they're trying to extract. a strategy. >> feel lthey're going to kill the competitor rather than buy it. >> or beat it up so badly you get assets in the fire sale. >> jon, thank you. if scale isn't the answer what is? >> i don't know. just talk and something i think is probably the answer, the answer is -- you know what? here's the answer. think more deeply about these issues. on the other hand, don't know if we have the qr code in redesign. probably not. type in "old school." cnbc, and both arguments you can share. taylor swift, best person of the year, 39% said, yes. 61% said, no. it was the most participated in poll on linkedin so far. >> something right there. >> right. >> okay. >> and we've run out,

apparently. >> of codes? >> none left that haven't been used. those qr codes. >> no more prints. >> the flow. >> couldn't happen. >> in this one already. just have to get it all, get it in yellow. >> thank you, jon. >> andrew? >> get it in yellow. i'm just going to -- yeah. still to come this morning, pushback from senators from pennsylvania, ohio, now, against the sale of u.s. steel and hance nippon steel and want to block the deal. we'll debate that in a moment. pennsylvania senate pat toomey thinks the idea is ridiculous. he'll explain why. later, logistics expert from more than a decade in the shipping business is going to talk to us to discuss the business impact of the houthi attacks in the red sea and divergence of cargo ships and what it will mean to the supply chain, oil, and mh soucmore. coming right back.

all-cash. the streak has snapped. dow and nasdaq can't make it ten in a row as stocks suffer their worst day in moss, but futures

this morning pointing to a bit of a turnaround. meantime, media deal in the making. warner brothers, discovery and paramount global said to be in very early merger talks. details straight ahead. and is the fed calling interest rate in the making? ahead of inflation data tomorrow we'll discuss that all as the final hour of "squawk box" begins right now. good morning and welcome back to"squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. best day of the week. it's even better, because -- >> closer to holidays. >> holidays. u.s. equity -- i thought it's been friday a couple of times. not really sure why. >> this week, or today?

>> today. i was like -- comes on thursdays and then it all -- >> because you're so happy? >> became clear. thursday's are the best days. >> hilarious. this is you at your happy yet. >> yes. >> yes! >> no. i'm always happy. i am. i am always happy. never doubted that, and i feel bad for people that aren't, because i really think that it's, some of it, is chemically mediated. i really think that. if you have a depleted neurotransmitter. >> going deep. okay. >> u.s. equity futures. i'm happy. i don't have that problem. u.s. equity -- >> wait. put that back up. triple boxes again. >> what about them? >> holidays. red and green on either side of me. >> oh, yeah. >> well-coordinated, fellas. >> that's nice. great minds. >> a memo. >> u.s. equity futures -- it's all green today on the futures boards. isn't it? can't really -- aww, except for

there. i think -- hard to see it. treasury yields. a quick look at those as well, which are important. talk to nick -- wow -- different colors. ten year now 386. >> top corporate story this morning, warner brothers discovery and paramount global in early merger talks according to sources who spoke with cnbc saying warner's ceo david zaslav and bob bakish met tuesday to talk about a possible deal. no guarantee one will come together but speculation whether warner brothers wants to buy more media assets. the company closing in on two years since its creation. important milestone in warner's ability to do additional deal. declining to comment on that. earnings front, shares of micron jumping in the pre-market.

memory chipmaker, a loss in the quarter. and a forecast akov expectations. up 6.5% helping lots of other stocks in a similar vein. furniture jigiant ikea, militan starting container ships. delays. looking at other options to secure availability of products. talk more later with a shipping logistics expert. andrew? >> thanks. meantime, straight to dom chu, who's taking a look at, a special look, i should say, what can drive markets to even greater heights. if you think that's possible in the next, what? week, week and a half? christmas and then the new year. what do you think? >> the santa claus rally period beginning of the new year. andrew to that point, with the dow, s&p, nasdaq all hitting at or near their all-time highs, potential catalysts that could take the market to the next leg.

of course, no guarantee. we saw that yesterday. stocks can go up, can go down in a big way like we saw. here are three years that could take already high stock markets even higher in the new year. the first one is improving data in some categories from china, which could help stocks give that additional boost. there are still question marks about the chinese economy. november data, though, from the national bureau of statistics in china showed that manufacturing was up 6.7% and high tech manufacturing was up 6.2% over the same period last year. on the second point -- earnings could be another catalyst for a continued stock market run higher. earnings season starts just about two weeks after the new year. analysis by tracking from lseg shows earns for s&p 500 companies fourth quarter up 4.7% from last year. that's expected after a stronger third quarter for corporate reports than many thought. lots of wall street firms weighed in with varying opinions the last few days including

barclays believes big tech will be the main driver for growth in 2024. the third one is the month of january itself. dow up in january, 62% of the time according to the stock traders almanac. january is traditionally the best month of the year for the nasdaq which is up 2.7% on average. s&p 500 just up a little north of 1% in january. that's over the last 74 years on average. now, the start of a new year also brings a big month for mutual fund inflows as some americans front-load individual retirement accounts getting most out of tax-free accounts. individuals up to contributes 23ds,000 to 401ks and $7,000 to ira accounts in the new year. other side of the coin as well. check out recent signs thing koss go the other way. general mills trimming annual sales forecast on slowing demand. fedex seeing significant demand production due to sales and

rallies run could be set to take a break. so, andrew, yes, it's a buyer and sellers' market. deals come together like that. predominantly speaking, seems to be a general sense of bullish optimism about the fundamentals that at least could push the market higher in the first part of the year. >> ask you a volume question. because we're going to hit next week. drop off precipitously. but i don't know. i don't know if we've moved into a 24/7 world people go on vacation and trade ago way on their phone. >> could be. here's the thing, though. we've had that volume argument for some time now, and no matter what on a relative basis always those people who tend to take time off and then just don't trade or close their books for the year. in the last week of the year, we could see some volatility, because of that ability to push things around on slower and lower than expected volumes. but the people who are still involved in kind of realize it's all been incorporated into

models, their operating products, their way of thinking. maybe there's a chance you could see moves like that tied to volume. these days i'm not sure that volume story, everything is bigger. volumes have grown. people who participate are part of that volume story. i'm not sure that's going to be a huge part of the story, andrew. >> dom chu, thank you, sir. becky? >> thanks. investors are playing the fed guessing game right now. the central bank signaling that cuts could be coming next year. that messaging isn't sitting well with former fed governor kevin warsh who joined us on-set yesterday. >> sympathetic about their humility where the economy should be, but to promise, effectively what they're doing, they're going to cut rates next year when they don't know the state of the economy is forcing them to tie their own hands behind their back. recent experience suggests that's a very bad idea. >> here to talk more about the

fed and path of rates in 2024 is nick timmeros. latest piece titled "powell's pivot seo confusion over when te fed will cut." heard variations from people's interpretations of what he said, jay powell said last week. to me he was clearer than ever, but there does seem to be some market confusion about what happened. what was the message that he was trying to send out? >> well, i think the disconnect that you had the policy statement maintaining a weak tiding bias. right? trying to hold on to the option to hike again in their policy statement. what they all vote on, but in the press conference don't sit around and strategize on this and divestiture speaking for the committee sounded mosh dovish.

that's i think where you had the surprise to the extent you had one. almost like what chair powell didn't say than what he did say. i mean by that, since july of '22 in the opening statement to every press conference he's come in there and said, we're probably going to have to have a period of below trend growth and later market softening to get inflation back to the target. he did not say that in his opening scripted remarks at the press conference last week. he was asked about the last mile being the hardest part, and he said that's what we expect, but so far it hasn't worked out. there was a little change both in what he said and in what he did not say. >> i think where i hear it most from market watchers, and their expectations for next year now, that seems a little difficult for me to try and put together, is this idea that we are not going to see a downturn. not a downturn. not going to see recession but the fed will still cut rates. is that likely?

is the fed cutting rates if we still have a strong labor market and gdp doesn't show you recessionary impacts? >> yeah. i think that was another surprise. if you go back and look at the projections that they produced since september. the sep in september was more hawkish. that was saying, remember, still projecting one more cut this year, which they did not deliver. then -- sorry. one more hike and two cuts next year. basically they were saying if you don't get the slowdown, you don't get the cuts. that was sort of the takeaway from the september sep. december did not have that takeway. talking about so-called normalization cuts. you simply conclude if hitting your target or core inflation is below 2.5% is close enough, you do not need a 5 3/8 feds fund rate. the other big thing. inflation. corporal core p c inflation rating, 3.1% probably over 12

months. what the chair said last week and the six-month measure, 1. %. if high, 2%. at their target over the last six months in june. previous six months you were at 4%. so how can you not ignore this serious flag they're making on inflation? i think that's, with the markets taking a lot from that right now, too. it's maybe making this game of tug-of-war with the markets different from the past few where the fed has said, no, not going to do that and the fed was right and the market was wrong. >> we've had a parade of beneficials inclouding austan goolsbee and john williams who have come through and basically made it sound like they think the market is interpreting things wrong. do you get the sense fed chairman powell is unhappy with how the market has interpreted his conversations? >> well, yeah. i mean, i would point to the interview you all had steve liesman had with john williams. powell said they had a

preliminary talk about rate cuts in the context of people describes seps and john williams, who is the vice chair of the fomc, comes out two days later, really didn't talk about rate cuts. the takeaway there is that they were not trying to send a signal that, you know, their teeing up a march cut. that's now, quote/unquote, the plan, but it's harder, again, for them to push back a consumer march cut, because even though that's two meetings away, a lot can happen over through months. i think the surprise was that the market saw three cuts. it wasn't a promise. it was a projection. they see three cuts and the s&p and say, oh, boy. let's price in six. starting in march. so it's, i think it's just going to be a more difficult game of tug-of-war for the fed right now, because, again, tomorrow we're going to see they are getting, if they are getting the upper hand, at least over the last six months on inflation. in ways a first class problem to have. talking about a decent growth

and lower inflation than the fed expected. >> nick, quickly. if you see higher inflation, and that could come from a lot of different places. let's just say commodities. whether oil prices or grains, anything else trying to get through the suez canal and can't make it there, if that ticks up quickly, could you see this fed turn around and say, okay. we may have to raise rates again? >> i think the first thing you'd see is they would just push back their projection of the cuts. go back to the high for longer. higher for longer. whatever you want to call it. that's probably the next phase of this. makes me wonder what it would take for them to start making again -- you'd have to see something probably in inflation expectations that would alarm you. >> nick, thank you. nick timmeros. >> thank you, becky. coming up, pennsylvania's democratic senators want the treasury department to block nippon steel's acquisition of u.s. steel. former gop senator pat toomey

says the deal, this deal is a no-brainer. he joins us next. "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. (♪♪) the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

breaking news. you can tell from what we just showed you. that the news is just breaking. the office of the president of angola announcing that the country is leaving opec because of disagreements over production quotas. the decision was made in a cabinet meeting and approved by the president, not much effect yet. a little, actually. i think, where we up earlier? thought we might have been up earlier. we're now down -- >> this means they're not going to stand by any production quotas. unless they get what they want. >> and who else? >> nigeria and angola, the two holding out. what the big kind of pushback was over and expectation, we

heard, nigeria was likely to get some of those things handed over to it. angola never a very good opec member according to the cartel and pushback with the cartel from time to time and questions what they would do. >> it was up earlier. >> any quotas that would have been put on them by opec, of course, the saudis have taken the brunt of any of those cuts themselves. saudis saying they wanted others to share it. this show as break with that and said, forget it. we're out. >> that's a plus. >> yeah. andrew? meantime, talk about a different debate happens in realtime. backlash to the bid for u.s. steel by japanese steel giant. several members of congress now, bipartisan in some ways, speaking out in opposition to that deal. puts both the pennsylvania senators, democrats bob casey and john fetterman. our next guess, the opposite view. it would be good for american steel.

former pennsylvania republican pat toomey. great to see you. you're not majority at this point. it's surprising this sort of bipartisan support against this. i don't know if it's -- protectionism? i don't know what sort of category you put this view in? >> well, first of all, we don't know where the majority is. we haven't counted all the votes yet. started with some outspoken individuals. look, some combination of protectionism, nativism, xenophobia gone wild. together with an element of doing the bidding of organized labor. i think the labor union probably calculates it's more likely to get a better renewal of its contract with an independent u.s. steel than one owned by nippon steel. i'm not sure they have a good basis for that view but it appears might be of that opinion. none of that is reason to stepthis deal.

first of all, shareholders of u.s. steel are offered something like twice the next highest bid, and let's remember. shareholders consist of americans of all scribes. teachers, firemen, truck drivers who have 401(k)s and pension plans invested in companies including u.s. steel. what is the basis for denying them the full value of their asset and to invoke national security is laughable. right? what -- nippon steel is from a very close ally of the united states. one that depends on the united states for its security. one that we depend on in this competition with china, and the fact that they would own a u.s. production company, a company that produces steel, frankly, probably, strengthening that company, with a combined venture would be probably the second biggest steel company in the world. this is good for the steel workers. this is good for steel production. the good for the united states.

i don't get the argument against it. >> let me ask you this. if there was any less in the pandemic, something you hear being talked about in the context of this deal even. this idea of resilience. this idea there are certain companies and businesses and enterprises and industries that are critical to our future. steel, perhaps. or maybe not. being one of them. you want those businesses to be owned in their entirety, i imagine, this would be the argument made by some of your former colleagues. that this is not a business that should be sold to a foreign company. even if they are your ally. >> well, so let's make a distinction here. if you depend entirely on importing an essential national security sensitive product from a foreign country, well, there's some vulnerability there. u.s. steel is here. what do they think? that nippon steel is going to

dismantle the plants and put them on a barge to tokyo? of course not. they're spendings $14 billion, if this goes through, to develop and grow, letson honest, a company struggling for a decade for a variety of reasons. steel's not going anywhere's it's here. if you thought somehow production of this american steel is going to be diverted at a time we need it. it's extremely unprobable and secondly, military consumption of american steel production is around the order of 3%. most importantly, the president that existing authorities under multiple statutes to prevent the exports of any goods that are sensitive to our -- >> i'm playing devil's advocate. let me try again. goes to the union issue you talk about, which is that clearly there are politicians and employees and others who be deeply fearful about labor in this context. that, you know, the japanese

will come in and it's, they're going to clean house. it's not going to be good for employees. how should we, policy wise, consider employees in this context? >> yeah. so the fact of the matter is that nippon steel would be obligated to follow all of the labor laws that anyone else is obligated to. including the negotiations over new contracts, which is very heavily regulated by the federal government, as you know. so, look. i think the union workers ought to be glad that a larger parent company with greater resources is going to be there to increase the likelihood that they stay viable. this has been a struggling company for a long time. i think it's a big mistake. a big mistake for unions to conclude somehow they're worse often. it's not at all clear that that's the case. >> wish you happy holidays if we don't talk to you before they

begin in earnest. thank you. >> happy holidays. >> you bet. thanks, andrew. when we come back, the latest contingence in the red sea and impact on the world's biggest shipping companies. we'll speak with a logistics expert who spent more than a decade on the arbod at maersk. stay tuned. you're watching "squawk box" and this is cnbc.

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welcome back to "squawk box," everybody. futures this morning are indicated higher. this after a big down day yesterday for the markets, but the first down day we've seen in a significant manner in quite a while. since end of september. this morning we see a bounceback with the dow futures up by about 150 points. s&p futures up by 22. nasdaq up by over 110. treasury yields under more pressure too. ten year yielding 3.86%. two year at 4.3%. continue to watch that. energy prices have been interesting to watch with news just breaking that angola is leaving opec. you're going to see now crude oil prices are down by about 2%. an gom la leaving opec. majority of pumping in angola has come from western oil companies that are there. and with this move angola will no longer have to live within opec limits.

7271 last tick. >> definitely reversal. not huge but above 74. coming up, breaking jobless claims data. also, the final revisions to third quarter gdp. also, more analysis about that with rick santelli. stay with us. "squawk box" is coming right back.

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welcome back. to "squawk box." oh, boy. ten seconds. rick santelli standing by. with breaking news. you know, i hope that the revision, if there is one, is higher. rick, numbers, please. >> yeah. healthy revisions some of these old numbers. today is no exception. and as the numbers hurl by, they're actually a bit surprising. 5.2 is our last look. a second look at third quarter gdp, joe, drops 0.3 to where it was at 4.9%, which is unusual to see these, this size revision on the third. look, consumption remains 3.6. 3.6 is pretty darn healthy on the consumption side. look at price index.

also remained at 3.6. i do remember one of the few metrics that really popped out. you know, the second quarter was 1.7. so we basically doubled it back to 3.6. going to be interesting to see how the fourth quarter dabbles through. personal consumption on the core side price index quarter over quarter remained 2.3, which, by the way, is the lowest core pce quarter over quarter rate of change going back to the last quarter of 2020, when it was 1.8%. initial claims. shall we? they are down. excuse me. they are down from -- what we expected. but up from a 203 revised last look. it now becomes 205,000. theoretically up 2,000 on initial claims but 10,000 lower than most economists anticipated. looking at 215 to 217,000 range. continuing claims a little light on expectations. and very close to our last look.

1 million 865 -- 1 million 8 865,000. last time above 1.5 million, second week of november, and we haven't been anywhere really near it since. that particular number was the highest going back to november of '21. you can see 1.9 remains illusive. a very important psychological area to pay attention to. now, let's look at philly fed. sho shall we? joe, 14 to the last 16 months negative. this year in particular 10 of 11 negative. positive month august. still negative. minus 10.5, which means 11 of 12 1 10.5. not a very good number. last time anywhere near that number, minus 13 in september. interesting here is that if you look at the 12 we had in august.

the only positive number. you had to go all the way back to april of last year to find another number that was higher. so philly fed remains under significant pressure. it in december the most forward-looking number we have. interest rates? volatile. ticked down to 384 and back up to 386. all yields are slightly higher on the session, and consider this -- here we are at 386 at the ten year. we're going to close, where was it on the last trading day of '22. 388. darn close. i heard from some sources discussing boon yields. far and away made the most progress calling a rally down. ten year boon in europe 257. c clocking now around 196. a big move. joe, back to you. >> rick, i haven't spoken to you about some of this recent stuff.

i don't know if you saw warsh yesterday. a panel, but i want to get back to you at some point, rick. because i was a little confounded as to -- as to if the economy doesn't slow, why are we talking about cutting rates if all we doing was trying to normalize them anyway? sounds weird. >> walks and quacks like a duck. okay? '24, an election year, a. many b., how many congressmen do you think are making phone calls to mr. powell and various members of the committee and -- >> they can do that? >> look what's going on with the economy. high interest rates. housing. everyone wants interest rates low around a lot of pressure. i do think at this point that the debt situation. you know, look at one, we started seeing more happy talk from fed officials regarding the possibility of eases. look at when the market really started price-in eases

aggressive. know when it was? around the time the big conversation $1 trillion to service the debt that the structure of our interest rates and the portfolio is going to really start to move higher in about the next 8 to 12 months. then all of a sudden, all we hear is wishispers about loweri rates. powell comes out last press conference saying, yeah, yeah, yeah. the ream stol story. talking easy. good cop/bad cop. that's my take on it. people can ththeir heads explode but there is a certain reality in life. look how things are shaping up and try to fit logic to it, that makes some sense. >> yeah. even what warsh said yesterday, in a nutshell was, so you do believe it works, jay powell. back to that. no problem. 33 trillion. me worry? alfred e. neuman.

get to chief economist smbc securities america former crhie economist at the white house. and former treasuryofficial and current acting director, executive director of a company and senior economics reporter steve liesman. i'll bet you i could tear off any of these and get a really good argument started between any of these people. i'm pretty sure. pretty sure i can do that, but i'm not going to do that necessarily. steve, let's start with you. did rick say anything that just gulled you, just now? >> yeah. just about everything, actually. >> i knew that! i think -- meanwhile -- warned you. cheering and clapping! >> what i thought was most interesting was while rick talked about, was talking about political conspiracy, the pce core for the gdp x, food and

energy came in at 2%. let me finish. the bond market itself, without political commentary at all from the fed or anybody, yields actually fell. okay? that's the market reacting to the data. the idea that somehow the federal reserve began to talk about lower rates in the absence of data coming in much better when it came to inflation, and not reacting to that, i mean, i think it's -- the problem with it is that it ignores the facts and makes up facts. leave that there. >> oh, my god. >> wait. one minute i want to say something, folks. >> you're kidding? >> core pce those numbers went across my screen unchanged. two minutes later, 30 second ago, came back down. my apologies. i can only pick off the wires what's on the wires. 2.3 now 2%.

okay? and the 3. -- >> yeah, suddenly. >> became 3.3. i i apologize. it's true. that's what happens. i don't get this stuff before released like many reporters do. >> okay. where should i start? you tell me. >> okay. here's what i'm tell you. come right after this. i do have a lot of sympathies whey rick is saying in the sense that it's not -- you know, december 1st didn't say talking about cutting. then two weeks later had a massive -- by the way i've argued for low rates for a while but the times was very curious. fed's own forecast showed the outlook hadn't changed much in '24. headline number came down 0.10. forecast. core came down 0.2, yet had 30 basis points of extra easing. something looks a little

circumspect here. it is, i do think the election is a factor and politics i think was involved here. i can tell you that at least since 1984 the fed has never begun an easing campaign during an election year. started before the election year but not during. i wouldn't be surprised part has to do with the fact further they start to talk about cutting and sooner they start cutting in '24, maybe at the margin a little more political cover. >> wait. you think it's political, trying to not be politic? >> part of it, yes. i think that is part of it. not all of it. that answers the calculation. >> you've been out there saying a while you think the fed was too tight and needed to cut rates. you think political? >> not at all. no. >> makes sense. >> i'm sure my old boss will be screaming when the fed cuts next year. i think the fed should cut. forward-looking measures like index leading indicators we'll

get today, down. significant downside risks. however, the fed changed on a dime with no data to support what they had been saying all along. >> do you want to tell us what really happened? >> yeah. i want to focus here on actually what was said, that i think many of us on the screen agree that the fed has been really slow to adjust to the data coming in the last 18 months, and largely that's -- i'm actually concerned that all of this talk about politics and concern about politics is going to lead the fed in the wrong direction. i also think that the fed should be cutting aggressively, and we need to talk about why. so earlier i heard rick talk about normalization. it's not just normalizing prices on the economy. the fed has a responsibility to normalize interest rates over the long run, and it's actually

part of their statute other mandate, rick. they have a triple andate. >> i never said anything about normalizing. never used the word today. never said normalizing. didn't say it. >> the fed has a sense what the long-term normal appropriated interest rate is for nickeconom growth and stability. >> and for 12 years. >> rick, i'd really like to finish. they absolutely deviated from that. really, really dramatically over the past couple of years. true, they're very, very aggressive rate hiking campaign. if they are going to treat inflation and data symmetrically, they need to think about having a similarly aggressive campaign of rate cuts in order to bring us back down to a normal and appropriate level of interest rates that don't have all of these knock-on bad effects, like stopping housing construction at a time when house prices are driven by a supply shortage. like cutting off investment in the kind of things that will -- >> how does the fed know where rates are supposed to be?

can you tell me that? how does the fed know where rates are supposed to be? just curious. i thought something the markets did. like, how do they know? >> the markets aremarkets -- de rates should be here. >> incredibly, rick, the markets want the fed to cut much more than the fed is indicating. so what are you saying? that the market's political, rick? the market's want six rate cuts. fed three as an average. >> market's handicapped. gee, balance sheets down to $8 trillion. where would it be if we put it back or parking lot reversed repos? all gains central bankers have played, all the games. >> handicaps -- how can -- how can the market handicap, rick, when every fed official has come on -- >> they can't. put half the things they're supposed to price in the past -- >> just going to finish here, rick, for a second. >> okay. >> how does the market's

handicaps, that the fed is going to do more? when every fed official we've had on from the goolsbee to john williams in the center saying the market went too far. i'm confused what you think the -- the market's making its own decisions in part. not saying divorced from the fed. >> i'm going to get yelled at for not moderating and i can't secretly let everybody know i love this. >> i disagree with steve. i'm not sure they fully reflect the situation in the board mip k. this decision, to me, about the pivot was really a board decision. >> joe, how many of these guys -- are -- >> steve -- steve -- take a break. take a break. take a break. stop. stop. please, let me finish. i'm not on every day, like you are. the thing is, the fed -- >> me neither.

>> the board, the board, i think, made a decision to pivot. i do believe politics are part of it. we do have four biden appointees that are there. if it wasn't politics then the forecast should have shown more, a bigger reduction in inflation. and it wasn't there. >> so the fact that the presidents aren't onboard with the board doesn't mean a kim by yau moment and everybody's in i agreement. i don't think that's the case. >> i believe, all of you, roger ferguson on so many times. this is a quick pivot. i was on, on every two week. he has not had a chance to change his very hawkish stance. we're already factors in -- kitty, one question for you. are you an mmplt-er? you talk like you can't believe that raised rates. didn't talk how long at zero and

a horrible rate-rising cycle they've been in. that was barely scratching the surface in easing done for the past 12 years. >> a really good point. thinking about the idea there is a long-term, stable, normal rate of interest doesn't include being at zero forever. but the fed's rate hiking campaign was really aggressively fast, and there's a big difference between zero and 2.5. and there's a big difference between 2.5 and 5.5. and if you look at the fed's own projections for quite some time, they have had interest rates falling eventually back to around a 2.5% rate. the question is, how quickly you move there. and, know, on why i've been calling for rate cuts and, know urgs the you know the question of inflation. we've seen data is clear at this point that we have supply shock driven inflation. isn't at all surprising given we just had an unprecedented global pandemic event and took time to

work through and as it did we saw price increases start to fall. right? and that's what many of us expected to see. that was not primarily driven by the fed's rate increasings and i think the fed's starting to think harder of real problems rates are causing. >> got to go, steve. i'm afraid -- >> just think we need to make one point, which is that three of the federal reserve governors all of them voted with the current policy were appointed by trump, including the chair. so the idea that there's some biden or democratic majority out there is just not accurate. >> although the only thing i would say, steve. >> joe was there when they were appointed. >> joe wasn't saying it was democrats trying to do this. almost the fed trying to not look political, which, just saying, we don't want to start a campaign in an election season because it looks like we're political. maybe feel like this is what they have to have happen. it's not the same as, like, some

democrat conspiracy that -- >> know what? it's hard to make jobless claims interesting, and even our old producer max meyers saying, this was the best jobless claims ever. bar none. and if we show the five again. i mean, look at the outfit. you're donald trump. you just are. the red tie on. >> missing the pants. he's got christmas pants on. >> kitty, you represent that side well, and then we got rick and steve. this was -- really liked that. >> thank you, joe, kitty and rick, and steve. "squawk box" will be right back.

xwoshgs welcome back to "squawk box." tebs of billions worth of cargo re-routed billions of cargo has been averted away from the red sea since houthi backed rebels started attacking the ships. they are putting the value of the re-routed trade at about $80 billion. joining to us talk about the global impact of the disruptions is laorne jansen who has been i this business a long time. help us understand the true implications and how long will this go on, what the re-routeing looks like and how we're going to see it or not in terms of the supply chain and costs of everything. >> this is likely to go on for weeks, if not a few months. the actions we've seen by the

major container lines the last few days shows very clearly they have no confidence that this will be solved within the next two to three weeks so they have already rerouted most of their vessels and are taking actions to deal with this longer term. we've seen them in the last few days announce massive freight rate increases and surcharges, the likely the way we see it now, probably going to lead to a doubling of the freight rates, and for the economy is also means that all importers around the world, especially in europe but to some degree also u.s. importers located on the eastern seaboard need to plan for a relatively semi-permanent situation where the supply chain is going to take one to two weeks longer than we're used to. >> just when it seemed like jay powell had inflation under control, it sounds like what you're saying is inflation is going to come roaring back. the question is how much. >> that i would not be overly concerned about. to put things in context, a

freight rate is $1,500 might go up to $3,000, $4,000, $5,000 but that should be compared to the $20,000 freight rates we see with inflation and the supply chain bottlenecks at their worst. this is a bad situation but not the calamity we had two years ago. >> what do you think the total cost will be towards dealing with the houthis, and what kind of security, to the extent that there's already security on these ships that's going to get stepped up and what that is going to cost? >> the cost of it is going to be extremely difficult to assess in terms of security. the problem is you are dealing with people on land firing missiles and drones at merchant ships. even when you do get this coalition together that the u.s. is spearheading, you might have more warships in the area, but that's not an iron-clad guarantee for a merchant vessel. you might not be hit by a missile so as long as you see missiles being launched it's unlikely that you'll see the major ships go back to use the

routeing so the solution needs likely more than a naval presence in the reg op. something needs to be done to prevent the launching of missiles in the first place. >> i have a personnel question which is to say i imagine folks who are captaining these ships, working on the ships, never thought that they were getting into business where they would have missiles being shot at them. how hard is it actually to keep these ships staffed? >> that is more of a gray area. for some of them, clearly you would not want people to go into harm's way and that's why many soft major container lines sail around, but when you look at vessel tracking devices that you have today, you can see where ships are. there is still a steady stream of typically smaller vessels, tanker vessels that still to this very day are going through. this is an industry where no matter the level of conflict you tend to always see some smaller shipping lines being willing to run the risk and they seem to

always be able to find staff that are also willing to run the risk, but that goes for a relatively small segment of the mark. for the large container shipping lines and the large vessels the answer is clearly, no, they are not willing to run that risk. >> want to thank you for joining us and helping us through this very complicated and vexing issue. appreciate it. >> my pleasure. >> "squawk box" coming back right after this.

joining us right now to talk markets ahead of the opening bell on wall street is the managing partner and portfolio manager at dcla. also a cnbc contributor, and -- and sirat, what did you think of the jobs number? just kidding. wanted to get to you weigh in on this big debate that everybody else is having and at fed's moves and what it means for the markets? >> i think the fed is a little too early. everything that we see is the dangers that show we're not going back to 2%. when you look at wages and input costs, xhodcommodities. it's surprising to see energy at $80 so all that could change in it a nanosecond. the market loves the idea that markets are coming down and maybe a little less certainty about that, but going forward, i mean, we're not positioning our

portfolios to say, hey, rates are going down to 2%. you want to be in areas that will do well with high inflation and where you'll have pricing power. >> maybe you think maybe stocks have gotten a little ahead of themselves so you're going to be more careful in what you're picking? >> absolutely. yeah, i think buying stocks out of favor but also now taking some profits. some of the stocks have run up so much, and we like them. i mean, it's not that i don't like meta or uni, but take some profits off them when you bought them cheaper and then, you know, put it into areas like commodities, health care, energy that are cheaper that haven't done as well and actually have secular growth behind them so some of those areas it doesn't really matter what interest rates do. it's really individual company specific. >> it does matter in commodities if you think inflation is going to come down or go up. if you think inflation is going up, maybe commodities is the right place to be? >> yeah. in that case, you know, buying

in alcoa, buying freeport-mcmoran, those will have pricing powers especially if you get pricing powers in supply and demand. >> your favorite place for 2024, an you've only got about a minute. >> i would say probably health care. i think there's a lot of opportunity in health care, whether it's in life science companies, medical products and even big pharma. all out of favor at very reasonable valuations. >> happy holidays. always enjoy having you on. >> thank you. we'll see you soon. >> we'll take a final check on the markets after the numbers from half an hour ago. right now the futures are still running strong. in fact, they have picked up even more ground. dow futures up by 240 points almost at this point. s&p futures up by 40 or 35. nasdaq indicated up by 178. we're up just about out of time.

treasury yields have come down, oil prices have come down a little bit, too. we'll be right back with you tomorrow, yeah. oil is down 1.6%. it's not friday. >> not next week? >> it's thursday, but that's thursday eve on friday right ahead of the holidays. we will be back here tomorrow with us. make shower you do the same and check in with us, and right now we'll hand it over to "squawk on the street." ♪ >> good thursday morning. welcome to "squawk on the street." i'm carl quintanilla and david faber and morgan hq and having an exclusive with ceo james gorman in the next hour. futures bounce from wednesday's spill. worst day for the s&p since september. final q3 gdp, philly fed both mess, seven-year is a new low and futures do point to