good morning. welcome to "squawk box" here on cnbc. we are livefrom the nasdaq market site in times square. i u.s. equities showing green around here. that's a good start to the week here. 11 points on the s&p and 35 on the nasdaq. looking at treasury yields. where are the treasury yields? we're 4% on the 30-year yield. five-year yield at 3.88. leslie. steve, tension rise between

the u.s. and iran. the u.s. navy says two more vessels had been attacked overed weekend by houthi forces in yemen. this comes as maersk is preparing to resume in the red sea operations citing the stepped up military operations in the u.s. and other regions. the company paused ships in the channel earlier this month due to the attacks on the chships. the channel accounts for 20% of the global shipping traffic. and egypt is floating a plan to bring an end to the war in gaza. both are resisting the plans, but stopped short of rejecting the proposal which caused for a pause to release hostages in exchange for the release of 140 palestinian prisoners. this would be followed by the

transitional government for the gaza strip and west bank made up of factions. israeli prime minister benjamin netanyahu has not commented on the plan, but vowed to keep fighting. netanyahu wrote peace will come when hamas is destroyed, gaza dem demilitarized. we will keep watching for updates. turning to corporate news. openai is in talks to raise a fresh round of funding with valuation of $100 billion. that would make it the most valuable private companies in the world. according to bloomberg, terms and timing have not been finalized. the report adds openai has had talks to raise funding for a new cheap venture with g42 between

$8 billion and $10 billion. unclear if the funding talks are related. that would be quick to go back to the market and raise more funding at $100 billion valu valuation. >> what was it worth? was it higher or lower? nobody had a valuation? >> we don't know the financials. we don't know how it compares with the discounted cash flows for the future. in your wheel hohouse, steve, s altman said when capitalists have run out of ideas, valuation will go to zero. interesting valuation. now i'm interested in the inverse. we have better ideas and what will happen to rates? it is an interesting thing. >> i did this story before, which is the story talking to the leading investors.

mark cuban and glen hutchins. i got three answers. interest rates would go up because of the demand for capital to invest in a.i. over time, it would come down with the productivity. the third answer was the mix of the two. then i asked an a.i. chatbot what happens to interest rates because of a.i. the chatbot said they could go up because of the demand for capital or they could go down with rowproductivity or the mix three. i spent 12 days on the story and i got the answer from a.i. in 12 seconds. i'm leaving now. you can plug in anything sdplchanything. >> they started to do this. there are news anchors they have

invented with a.i. who give you a facial expression and they can be really serious and use hand gestures and all this. you think it's pretty good. they know how to hit the right inflection and how to punch the certain words. what do they need us? if you can do 12 days of reporting -- >> yeah. here's the thing, i'm thinking nobody will invent this face for a.i. >> it is beyond the powers of technology. >> right? my belief has long been that people who are scanning cable would stop on me to say this guy is on tv because he must know something he's talking about as opposed to you two. the midnight deadline came for president biden to overturn the trade commission report over the apple watch ultra 2 because

they have patented registered to another company. apple has taken the watch models off the apple store locations. stores are expected to open today without the latest top of the line watches in stock. the cheaper watch se which is not part of the ruling is on sale. this would impact series 6 and all models and models of apple watch ultra. >> we have to look at e-bay. now there is scarcity. overnight from japan, the japanese law proposed to prevent apple and google to present domi dominance. apple shares on the nikkei are up .10% in the pre-trade. >> is this a year, 2024, where

the dominance of the tech companies is going to be attacked? >> they are under fire. they are certainly under fire from all comers. if you look at what happens in europe and if europe is leading the way then you will see it globe globally. >> there was the times story over the weekend with the android phones and apple phones on messaging. i had a hard time getting excited about the difficulty or the pain suffered by the android users whose message appears in green compared to blue. >> it is not just that. if you try to text a loved one who is using android, it will get returned and say we can't deliver this. >> if you don't have an international plan and it won't go through because you need wifi for it to happen.

>> these guys are so successful and evngrained themselves in ou lives and now there is a nexus for the government to step pin and limit their power and make them open to everybody. >> victims of their own success. >> the u.s. may not be far behind europe on this. we have football news. it is not the pitiful giants. it is the other football. manchester united has a buyer. jim ratcliffe has a stake in the club. he owns petrol chemicals and has acquired a stake of 25% stake in the company and will invest $300 million in old trafford stadium. the deal is subjective to

approval. ratcliffe survived the entire majority share by the glasers. >> you follow football closely, i see. >> not this football. i like it. >> you wanted to start with the eagles. >> i wanted to talk about the new york giants and they looked less pathetic because the eagles played down to the giants pathetic level. >> that's the sports news this morning. did you hit the movies? "aqua man" topped the charts, but the sequel opened below estimates with $27.7 million over the traditional weekend and $40 million through the four-day holiday timeframe. the movie is shaping up to be the latest under performing movie for warner bros. and dc

following this year's strike and misfires like "the flash" and "shazam" and "blue beetle." we will talk more about the media landscape later in the show. there's deal news in the making. >> your kids are younger. they are not interested? >> not "aquaman." we saw "migration" this weekend. it was cute. >> which, of course, is by our company. >> comcast. >> my kids went to see he"wonka without me. >> it gave you a break. >> a little champagne and dinner. coming up, will bitcoin inn investors get what they need in the new year? that's next. and we will breakdown wh'sat eff next for the markets when "squawk box" returns.

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home of the xfinity 10g network. welcome back to "squawk box." the s.e.c. is moving one step closer to the futures on the spot etfs for bitcoin. s.e.c. met with representatives from blackrock and grayscale and

others and telling two of them to submit final changes by the year end. the s.e.c. is due to decide whether to approve or reject the proposal from ark and 21 shares by january 10th. bitcoin is lower down 1.9% this morning. more than 150% for the year which is tied to the overall anticipation after that august ruling where the judge said s.e.c. is overreaching here. we don't have a basis for the case to reject. >> do they have to approve the etfs? >> they don't have to. i see a 90% chance. there is no nexus to reject them. it seems likely. january 10th. >> we will talk about it? the closure of the government is january 19th. let's focus on today. markets set to begin the last

trading week of the year and let's focus on the futures which are in the green this morning. let's talk now about this with kevin with walsh asset management. >> good morning, sir. >> let's talk about how far we've come and how fast. is it too far, too fat? is the market ahead of itself in overestimates how much relief is coming from the fed or does it have it right? >> the markets rallied significantly in november as the investors come to the belief we reached the end of the rate hike cycle. that was validated in december when powell all but confirmed we are at the end of the rate hike cycle. we continue to see the markets move higher. i believe a large part of that is fomo. fear of missing out on the next leg of the market rally. i believe the markets have

rallied too high and too fast. some of the gains we were expecting in 2024 have likely pulled forward from 2023 which leads to market volatility in the early stages of 2024 when the long-awaited economic slowdown finally materializes and investors start to realize the potential pains of the economic slowdown which will lead to the fed cutting rates in the second half of next year. >> how important is it for this level of the market that the fed deliver the rate cuts on time as the market antici anticipates i? if march comes and goes and the fed says you have it wrong? >> i am in the contrarian camp. i believe they will cut likely at the end of the second quarter. they are expecting cuts between 1% and 1.25%.

the fed dot plateau is around 75 basis points next year. if the forecast for economic slowdown comes to fruition and as it stands, the fed is forecasting gdp growth slow to 1.4% next year and stay below 2% in 2025, you know as well as i do, the fed doesn't cut rates when the economy is doing well. they cut rates when the economy is not doing well. i believe the rate cuts need to take place toward the second half of the year. if they don't, that will watch the market by surprise and lead to a pullback. >> is that a buying opportunity? >> i do believe that would be a buying opportunity. the fed is going to have to cut rates. their hand is going to be forced by the extent of the economic slowdown. remember, of course, if they keep rates too high for too long, that puts more pressure on the u.s. consumer. it accounts for 70% of the

economic growth and has over $1 trillion on credit card and facing interest rates above 24% which is the highest on record according to lending tree. they have to ease which creates the buying opportunities in stocks and bonds. i argue creates a rally beyond the magnificent seven stocks which rallied in 2023. >> let's talk about that, kevin. how would you position yourself for the broadening of the market? one idea i heard is going into a balanced s&p rather than the cap-weighted s&p. what are your thoughts? >> you can look at the nasdaq 100 index as a guide for what worked in 2023 which did not work in 2022 and is likely to work in 2024. that is actually equally weighting the magnificent seven stocks within the nasdaq 100 and likely to provide growth to the u.s. economy, but trading at too

excessive valuation. we like other technology beyond generative a.i. i certainly believe in the transformative capabilities of a.i., but what is lost in the a.i. race is the importance of cybersecurity. you can make a valid argument that the growth of artificial intelligence will only increase the likelihood and success rates of the cyber attacks. cybersecurity is going to become of paramount importance. cloudstrike will provide that for individuals and corporations. >> kevin, i want to follow-up on one thing you said of the potential rate cut following a slowdown as opposed to the rate cut the fed might do to prevent a slowdown. it seems the market is trading more on the latter. it is trading on the expectation that we will hit some soft landing and there won't be catastrophic slowdown and the

fed will preemptively cut rates and we are back to doing business. you don't believe that is the case? >> these are not my forecasts. if i look at the gdp estimate from the atlanta fed, it stands at 2.3% from the fourth quarter down from 5.3% in the third quarter. that's a slowdown. if i look at the economic release, that shows slowing. once we see the two or three consecutive slower economic growth, i believe the fed will step in. not until the end of the second quarter with the continuation of the slowdown. that is when the fed steps in to cut interest rates. if interest rates and yields lower, that creates the stocks and bonds to consider. we like fixed income and preferred securities and

municipal bonds and if equities lean into the areas such as the defense or cybersecurity stocks. >> all right. kevin, thank you. it is an interesting pirouette. >> not trying to time the market. >> thank you, kevin. >> i see your pirouette and raise you, coming up, retailers are retaliating against returns. the banking sector did something it hasn't done since the financial crisis. a massive amount of job cuts. more on that when "squawk box" returns.

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welcome back to "squawk box." in "executive edge," if you are looking to return after the holidays, some are adding fees or shortened the window for returning items online. 40% of retailers charge for online returns. that is up from 31% a year ago. you really need to read the return policies in order to avoid fees. nothing would disrupt customer loyalty, i would think, like facing big return fees. >> how much? i have never seen one.

>> you don't probably return that much stuff, right? >> no. >> if you do, do you go to the store? >> no. i don't really buy stuff. >> i love it. i'm just saying, it happened to me once this year. a big-ticket item from the company that we follow. >> you don't want to name it? >> i don't like doing those shoutouts. i don't want to punish anybody. there was a huge fee associated with the product that did not get delivered as promised. i had to spend an hour on hold in order toavoid the fee of returning the item -- >> was the fee disclosed? >> i don't think. i did not read the fine print. >> what does? especially when you purchase from a place -- this means that places you purchased from last year that did not have fees to return -- now have fees. you will not read it every time.

>> shipping -- amazon can be dropped off at a drop-off point and save fees. for amazon, there is real cost to accepting returns and managing returns. there are for all of the retailers. you can understand why -- >> that's the business they're in. they came forward and said we're better than going to the store because you can return it free. free. without a fee. now, they are saying it. i think all this ends up with us going back to the stores. >> i didn't go to malls this weekend. >> you'll pay the fee? >> i would not pay. >> i would not pay. i would order from some place without a fee. >> if you want to lose my business permanently, and i buy stuff. you want my business. if you want tolose my business permanently, charge me for returning something. >> that's a good way to do it. >> i buy lower-ticket items

online. there was an article about amazon offering cars online. i don't know if i'm there yet. >> do you ask about the return policy for the car? can i bring it back to the dealership? >> you must be able to return it if you can't test drive it. if you can't test drive it, you have to be able to return. 2023 is going down as the worst year for bank job cuts since the financial crisis. global banks slashed 60,000 jobs this year reversing the hires in the pandemic. deal making and public listing is dopplerrmant this year. the ubs merger has had major cuts and more expected in the year ahead.

61,905 jobs have been cut from bank jobs this year. that compares to 140,000 jobs slashed by the same during the financial crisis of 2007 and 2008. >> less than half of the financial crisis period, but that takeover of credit suisse leading to jobs cuts and then not that much activity. banks are right-sizing work forces. by the way, bankers are demanding more pay. they have been more expensive. >> how much of that was in the mortgage business? >> wells fargo was the second largest firm. they were right sizing their mortgage business. that certainly was a component. >> that is a terrible business for job security. i had a friend of mine with a boat in the public marina. he is working at home depot or as a mortgage banker.

he has done it since i have known him 20 years. he has done it three times. these guys go in and they're out. we will see what happens next year with mortgage rates go down. >> if they hire people back. a lot of banks are pulling back and not intending to get back into it. >> you have a tease? coming up, all is quiet on capitol hill as congress is on recess. there will be plenty on the agenda when 2024 gets here, including averting a government shutdown. more on that next. and a sector is moving forward with the nuclear and clean energy. we will have that and more when "squawk box" returns. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. k it out says here it gets plenty of light. and this must be the ocean view? of aruba? huh.

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good morning. welcome back to "squawk box" live from the nasdaq market site in times square. we are kicking off the short week. green across the board with the dow jones industrial average implied to open up 70 points. nasdaq higher by 30. the s&p 500 higher -- i have to

look over here. these are so far away that i need my glasses. >> you see it is green. >> it is green. i can see the color. >> that's a good sign. congress is on recess while we're a few weeks away from another threat of the government shutdown. joining us now with what's on deck for congress in 2024 is axios capitol hill reporters. julie, congress has a few days to get the funding bill done and members are away. how likely will they get it done in the few days in january? >> it is not looking great. the house has not completed the work on the individual spending bills and reconciling that is not a strong possibility. i talked to a lot of members with the one-year cr is the likely outcome. the stopgap with the spending cuts in april is giving

lawmakers heart bburn. it is interesting to see what they do moving forward. >> emily, what is at stake if they don't pass something? >> as julie said it is the 1% cut across the board. 1% doesn't sound like a lot, but it is. i was speaking with folks last week from the defense industry. that is really looking to get cut. it could be $36 billion if they just decide to continue spending for the rest of the year and don't come up with the renegotiated spending bills and levels. that could impact the defense in general and i agree with julie here. when it comes to the ability for congress to get this done, they have nine days left where they are in d.c. working and they don't have the top line number yet. they don't know what they are trying to gauge their amounts to and they are behind without a

lot of time before january 19th. >> it seems difficult without knowing what you will be negotiating against. juliegrace, axios put out a piece that called the 118th congress the most unproductive in modern history. citing stats from corum. 20 bills in passed. four more awaiting president biden's signature. next year is more productive or do we wait until the election to get more done? >> we will see that shift soon. they are down kevin mccarthy and george santos. the factions are at odds. i don't think it will be easy to get a lot of the easy pieces of legislation they like to get with government funding over the finish line. >> emily, i spent the weekend

reading "the economist" outlook for 2024. you can imagine that made for interesting reading for me. the fiscal problems and issues did not come up as a major risk when it came to the economy and markets. are we missing something here? is there some reason why markets should be focused on what's happening in congress or, as you say, the impact an of the 1% cuts or the broader macro economy on the markets that are red flags here? >> steve, at least we don't have to worry about the fiscal cliff debt ceiling in 2024. that is a 2025 issue. we have some breathing room. we absolutely have to be concerned about a shutdown especially now they have the split funding where we have the one date in january and the next

date is the shutdown for the government agencies. you have the two shutdowns you have to get done and national security passed and faa reauthorized. those were extended last year, but for a couple of months. the election does takeover, but the bills were introduced in 2023 and they have momentum. we may see more than 20 bills passed in 2024. we are not looking at a productive congress especially with the margins in the house and senate are only getting slimmer. >> it is so frustrating to hear you say that when there are such big issues and congress continues to kick the can down the road. this is the pastime now. can we push it down to somebody

else? here is "the new york post." they are predicting 15,000 migrants joining the caravan ready to hit the border. juliegrace, mike johnson urging the president to take action. it is rare to hear the president to say you should use the power of the white house and do our job. >> we have seen with the israeli and the ukraine border package looking to get something negotiated and passed. if they are able to get anything at all, it is weeks into january before they pass something. speaker johnson was calling for executive actions to put the trump policies back in place. that is unlikely the biden administration will take those steps there. those negotiations on border security and ukraine funding are supposed to resume on wednesday. talks will continue and we will

see what happens moving forward. >> this time with the white house at the table as part of that as well. >> yes. the secretary should be involved in the talks going forwards and speaking with senators before christmas. that being said, whatever the senate comes up with and if they are able to pass something, it is likely to be met with pushback from house conservatives with the pushback on ukraine funding to begin with. it will be interesting to see how it all pans out in the end there. >> a lot in store for 2024. thank you, emilygrace and emily. big gains in stocks surrounding the number 92. we'll keep you guessing. and you can follow the "squawk pod" on our daily podcast. we're coming right back.

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we gotta get ready for our family migration! be ready for any market with ayeah!id etf. uncle dan, you coming too. umm, no. pleeee-eeee-eeease... whoa. that did it. here we go. migration is... we have a "number two" situation. can we land? there is no way we're landing. are you sure no one's watching? gwen mallard! do it now or we leave without you. ok, ok. nuclear power having a comeback and has put a charge in one sector in particular. element 92 stocks. does it give it away? >> it was a very good tease. >> element 92. pippa is here. what's the element 92 this. >> uranium. nuclear power is pushing up the

industry which is pushing up uranium prices. spot prices have gained 80% this year and trading at a nearly 16-year high. it could be heading higher given the under supplied market. prices collapsed in 2011 after the fukushima disaster. now new reactors are being built and we have not seen a lot of production. next year, uranium is forecast at 175 million pounds. supply is 144 million pounds. up until this pound through sanctions against russia, the country's nuclear industry hasn't been targeted because they play a key role of 46% of enrichment. there are growing calls in washington to sanction the industry which could lead to a shortage. investors have taken note that ura and urnn, two spaces that

track the industry. a bit of the under the radar play. >> there are places in the states that are benefitting in terms of sources of u ruranium? >> the u.s. used to be a provider, but now there are places that are interested. we have seen some companies restart mining with energy fuels. prices have gone up with labor which is expensive here. that is the mining process. you look at conversion enrichment, that is a capital intense industry. there is usually state invol involvement. france has 60% of nuclear power and the u.s. is now realizing that we do have to do more to invest in the supply chain. nuclear was 18% of our power. the deadline is coming to create

our own conversion and enrichment facilities, but it is not easy. >> can they get the permits? >> permitting is a challenge across the u.s. >> for the facilities is another challenge? forget it? >> at the federal level, there is support for a lot of the infrastructure projects to come about, but the permitting timeline is another bottleneck for future energy projects. we have seen that with lithium mining. thank you, pippa. coming up, taylor swift's halo effect charging up the ad world. we look at the trends for the new year. "squawk box" is coming right back.

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2023 was a huge year, and a rise in women sports and the box office boom of "barben heimer." it was a big year in certain pockets, but in much of the broad advertising landscape, especially for the big media companies, it really stunk. >> yeah, this was a year of streaming and driving a huge amount of change in the marketplace for tv, and you had watershed moments for the nfl, and that drives a huge shift in advertising dollars, and that was up in the advertising market. >> it's interesting to watch the streaming platform, and amazon

has free v, which is ads everywhere, right? the apple tv, what is happening in the effectiveness of ads in the streaming platform? >> that's an important question. ties something all about supporting the consumption of great content. this was the year where the ad supporting years had a big comeback. it finally came to streaming in a real way. the thing about effectiveness on streaming where we saw it, and we are pleasuring the consumer response, and these are the predictive behaviors that marketers are trying to drive from consumers. we seep there's a higher response rate in streaming than

in traditional average ads. you have got higher targeting of the ads to the consumer, so those two affects come together for a higher response rate. we see that in thursday night football on amazon prime, and there was a higher rate when that football was on television. >> i see this week in particular could be more effective for advertising for retailers than even the week following black frid friday. >> this is the start of the most effective week of advertising for retailers of the entire holiday season, including before halloween, which is i think is too early to be starting. >> for certain products? >> in apparel, we see a 24%

higher response rate the week after christmas -- >> is that a matter of discounting and inventory and trying to clear things out the last couple days of the year? >> the consumer response has been hyou are getting good ads s well. >> you said there's a higher response rate in the thursday night football compared to television, so are you getting as many viewers in that space? >> we are using the viewers as the normalization of the denominator of the equation, of the ratio, and we are adjusting for that and what you are seeing

from nielsen is sports attract a larger and more engaged audience, and the audiences can be high or low, and a lot of that is about the match-up and the competitive of the games, but overall you are seeing strong audiences going to streaming when it's live -- sports, when it's live. >> are these advertisers leaving legacy media for good, then? are we going to see an ad environment turn around in 2024 depending on the economy, or has the model changes? >> they are following the consumers, and what you are seeing is a pricing change where advertisers are paying a big premium for streaming, and you are going to see the right equilibrium reached between the two media, and you are in a decent place already but it's

about where the audience is going. >> why sit we see so much struggle, and we talk about bulking up if they are able to target? >> it's about scale and costs. you have got some streamers who have the scale, and some who don't. you have got amazon, apple, who has yet to really enter the advertising supportive tier, yet -- i say yet when they have the major league soccer rights, and they are putting advertising into that live streaming, so apple is in that as well? >> kevin, good to see you. thank you. happy new year. >> we are going to have an economic forecast discussion and debate for 2024, and new york city is the holy grail of the

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good morning. it's the final week of the year, the day after christmas, and stocks futures pointing higher ahead of the opening bell. positive for eight straight weeks. a major shipping line getting ready to restart operations in the red sea, and we are going to bring you the latest details. it's the holy grail for casino operators, a chance to indicator to new yorkers. what will it take for wall street's biggest gaming countries to hit the jackpot in the big apple. we will talk about that as "squawk box," the second hour begins right now. ♪ ♪ good morning, and welcome back to "squawk box" here on cnbc live from the nasdaq market

line. joe, becky and andrew are off today. here are the futures at this hour. green on this boxing day holiday. you can see the dow open down about 24 points, and the nasdaq 26 points higher. treasuries more muted at this hour, and oil at this hour is currently somewhat mixed in the energy complex. crypto, we brought you the headlines earlier last hour about the potential of the approval of the long awaited bitcoin eft. despite strong growth this year and low unemployment rate, economists just won't put the recession debate to bed.

steve has been looking into it. why do they want to focus on the threat of looming recession? >> they can't let it go, co contessa. what happened to the recession they forecast with so much certainty? is it coming next year? the gdp average at about 3%, and it's weaker from the third quarter we had, but it was a year overall above potential growth and not a recession. i like the quote from scott anderson from bank of the west, and he said i can't recall a time in my long career when the u.s. economy surpassed expectations so much as it did over the past 12 months, but can it keep beating the odds? months of leading negative -- negative leading indicators have been streaming recession, and

now it looks like help is on the way, and yields began to fall sharply, and stocks, they are not giving it up, they have the probability of a downturn reduced by the unexpected stimulus from looser financial conditions, and a good friend of the show here thinks it comes too late. he said the recession we saw coming in 2023 has been delayed and not canceled. they see a 26% chance next year by declining profits. some are doubling down on the recession because they don't believe in what i am calling the

dias monetary policy. >> if we were sitting around a poker table, and these guys had a bad bet and were wrong, but they are saying we are all in on a recession. >> affirmation bias, right? >> well, it's an elevated probability. >> if you are saying it's not canceled, just delayed -- >> i was wondering if economists should be forecasting recessions at all. >> for who? >> i am wondering, like, on what basis? >> maybe the recession call itself creates the conditions for not having a recession in the sense of companies pulling

back. we talked about this procession idea. >> procession? >> which is companies scaling back ahead of a recession. >> right. >> creating a lower probability of a recession. >> we did talk about the 60,000 job cuts on wall street, and others markets have been strong. what is interesting, and you are a fantastic economic historian, so you can probably answer this, and when you look back -- first, there was a historic rate rise, and economists have been monitoring this the way they always have, and they said if you have the rates going up to this extent, of course you will have a recession because that's what has happened every time you have seen a rate go up at this capacity, and the economists are not putting into their model -- >> i think the mistake that has been made was not holding out the possibility of things being substantially different this time for reasons that were very

different. everybody tried to fit the model of what was happening in the '70s, and the fed even followed this model and said we can't give it up now because of the idea that back in the '70s inflation came back. after most of these efforts of the fed to fight inflation, recessions tend to happen and that's how you get recessions. the idea that this was a pandemic, and there was a ton of slack in the economy and labor market, the idea that the fed was very lose for a long time and allowed people to lock in rates, and i could spend a lot of time telling you why this time was different. the worst phrase in financial -- in finance is things are different this time. the second worst phrase? things are going to be exactly the same. it was the second phrase that got economists to forecast the recession that didn't happen.

i think there's a good chance we avoid it this time again next year because of the difference. >> there's the hope that inflation and rising prices and whatever are -- better jobs and better wages, we are -- we can see the affect on the economy, even when prices are higher at the grocery store and car lot. >> people were out spent, and even when the sentiment numbers were terrible, but spending numbers have been great. >> they are saying one thinging and doing something else. joining us is the cio at mineta. we were talking about what happened this year and how it

didn't fit the mold of economists were expecting in 2023, and what that means for 2024. that's why i want to start with you. the markets are truly rallying on the idea of a fed hit in 2024, and do you see that rally sustaining itself through the beginning of next year? >> i do see it sustaining itself but not with this speed or strength, and we had a good comeback, and even the wobble we had when it seemed like the fed was not necessarily going to pivot. the strength of the movement in the last week has surprised most commentators, and what we have not touched on was the treasury yield reaching the points that were at the outer end for the end of '24. when we got as far as they thought we would get in 2024 in a few mere weeks, you can tell

we borrowed from next year's strength. >> are you expecting, then, to see some sort of selloff on that? a lot of the technical indicators last week were signaling that we may be in overbought territory already? >> exactly. i see a rotation more than a selloff. we are looking at the sectors that have been overlooked all year, essentially, utility and health care, and most of health care lange wished for most of the year. >> remember, fixed income has yielded, and that will seek out the less well-loved sectors in the market, and it's more of a rotation than selloff. but it will feel like a selloff for somebody heavy in tech. >> why do you think a rotation -- why the specific

sectors, utilities and health care? >> those are the sectors that would traditionally be seen as defensive. they would have a field so they would stack up relative to bonds. bonds represent a yield we have not seen in the last number of years. as that yield starts to tick downwards, and remember, overseas, dividend stocks are higher, and those are stocks that have something more in them than shear momentum, and there's a lot of good fundamental value in those stocks, and the stocks of the growth of the value of rotation, and i expect that will play out. >> thank you. drugmaker, bristol-myers, is in deal-making mode. it announced a deal to buy

raysebio. the acquisition comes a few days after bristol-myers announced it would buy corona therapeutics as a $14 billion transaction. and bristol-myers down maybe 10.2%. >> and that was halted, and that's a double from the last close. we will see which gaming companies are focussed on new york city. stay tuned. you are watching "squawk box" on cnbc.

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welcome back to "squawk box." a fierce fight is erupting over three casino licenses up for grabs in and around the nation's biggest city. with 23 million people living in the area, new york city is a real jackpot and multiple companies are competing to win the ability to offer gambling around the big apple. at a party thrown by the world's biggest casino company, hopes that a new year brings a new reason to celebrate.

>> this is a destination resort in new york, and it's worth all the effort we put in. it's a market that cannot be replicated. >> new york is the holy grail for casino expansion. >> he spearheaded the efforts that legalized casino gambling nearly a year ago. >> this could be the greatest untapped market in the world. >> las vegas sands has spent years and tens of millions much dollars lobbying to build a casino resort on nassau. >> this year ballys brought trump links in the bronx, and mgm resorts already operates empire city in yonkers, but it's

proposing a world class resort with a concert venue, and there are slots offered in queens, and wynn resorts. in queens, mets' owner, steve cohen, partnered with hard rock casino for a destination casino retail development. planned project cost? $8 billion. can you get a return on the investment without a casino license? >> that's challenging. the scope of $8 billion cannot be justified unless you can maximize the population. >> it says it will build something even if it doesn't

land a gaming license? >> why does that make sense for sands? >> it doesn't. >> get this. the state is running a hunger games type of competition, the highest bidder may have the best shot of landing the casino license. for more on the story, howard glazer, a former senior policy adviser to then new york governor, andrew cuomo. i know you spearheaded a lot of efforts around legalizing these kau casinos in the first place. first, why are we seeing a pitched battle for three licenses? >> the numbers are eye popping in terms of the potential revenue. a new york state study itself

said $18 billion a year in casino revenues. you might say how is it possible three new york casinos equalled the entire las vegas strip? there's a significant opportunity. even though it's a tough competition, the costs will be high. casino executives want to be into the market. >> many of them -- i laid it out there. sands has been here for years trying to lay the groundwork because they have to do it in the crucial way. talk to me about the competition where they say how much are you willing to bid? how is that supposed to work? >> it's like price line for your taxes. what are you willing to pay in your taxes? the bidding work is three ways. first, how much will you pay for a license fee? the minimum is $500 million. it's expected they will go $1

billion or more for a license fee. >> my sources say a billion has already been floated, and the casino source says you know what they have done? they forced us to pay more than we were willing to pay to get a license. >> a billion sounds like it is a lot of money, because it is a lot of money, but $18 billion for the resorts and amenities, that's a lot to split three ways. they will do it. >> when is this literally going to happen? you know, around here, you have some businesses that really want to see a casino right out here, and then you have other businesses that are, like, no thank you, and broadway doesn't want to compete with a casino.

>> it's a complicated process. the empire state building took 13 months to construct. we have already been in 13 months of the competition and 13 months to go. it's a complicated process, especially with the local approval. as you say, some say they want to see a casino and others are concerned about it. this is new york, and you if want to put a street sign up, you will have a protest. >> i have so many questions. how do you avoid this -- i hate to say this the horror of atlantic city happening in new york city, and the idea that the casinos came in and provided nothing to the community in terms of what happened across the street and other local businesses, and how do you stop that? that's the last thing we want in new york? >> atlantic city set up lessons.

>> if you don't have the community support you don't get to that level. there's a veto process with the officials, and it will sort through whether or not there are benefits that will accrue to the community and connections we are talking about. >> i said whoever is willing to bid the highest tax rate might win, and the caveat to that -- >> might win. >> is that the local officials that can veto it, will not see the tax revenue come in, and it's about jobs and how many areas are you willing to bring in. >> you have a panel that will decide if you want a casino, and you might want a senior or daycare center associated with it, and that's what is happening is jockeying with your supporters to build support before you get to the economic part. >> howard said it was easier for

some of these companies to get a casino is communist china than in new york city. >> organized crime is one reason we got rid of -- i am old school about this. >> yeah, i know, but it's one of the highest regulated industries in the world. there are 1,000 casinos in the united states of america. you can play slots in south dakota and it's not the same as it was years ago, and new york is saying why not new york? let's make it work for the city and the state. >> thank you. >> i still have more questions. >> for the commercial break. which then we have new data when it comes to the popularity of apps. that's straight ahead.

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♪ ♪ let's get to frank holland

with a look at this morning's premarket movers. good morning. >> happy holidays to you. hope you all had a great holiday. we will start this morning with a deal mover, shares of astrazeneca. they are flat right now, and they have the $1.2 billion deal that will give them access to grayscale's portfolio, and no movement right now but we will continue to watch this stock all morning long. turning to the ev space. they are moving higher as the ev maker unveils the flagship model with a price tag of $112 u.s. nero shares are up more than 3%, and other ev makers moving higher in the premarket. and then shares of english

soccer powerhouse, manchester are up after announcing a deal for british billionaire investing $300 million to improve the historic stadium, and that's expected to create a new era for the soccer team. >> frank, thank you for that. coming up, carlos gutierrez, the former commerce secretary, talking about a crackdown on a video gaming industry. that and more when "squawk box" returns. changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments? ice offers data and markets

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♪ ♪ looking like a hazy day there in washington, d.c. welcome back to "squawk box" on this tuesday morning. futures right now green across the board. you see the dow jones industrials opening up 46 points, and the nasdaq heading higher by 18, and the s&p 500 by

6 points. leslie? shipping giant maersk, militants based in yemen attacked ships in the red sea rendering the suez canal hopeless. and it was their first face-to-face meeting in a year. joining us to talk about out standing businesses for the u.s. and china for the year ahead, we

have carlos gutierrez, and formerly the ceo of kellogg's. i know there's a lot of specific things to talk about, but i want to go back to when i used to interview you when you were commerce secretary and we talked about a relationship with china that was constructive on the one hand, and it was confrontational but less so on the other hand with the overall idea that the two biggest economies in the world should get along and it would be a better place on earth when they got along. i have a question for you. how did it go so wrong? how do we get back to that time? >> that's a great question, steve, and i appreciate your remembering that. i think today, and you mentioned at the beginning, the relationship between china and the u.s. is better today than it has been over the last several years. and then, of course, we got into the trade war, the tariffs, and the rhetoric, and the insults,

and it was china was the last thing you wanted to support, so we are coming out of that. it's not as if we are back where we used to be, but we now have the military exchanges and dialogue. that's huge. think about the fact that we didn't have those at a time when we were, you know, throwing insults across the taiwan straight and almost looked like we were going to war, but no dialogue across the two militaries, and now we have commercial dialogues happening. there's a new foundation. it's going to be tricky, you know. it's not as if though everything has been solved, but there's a foundation from which to build. >> which are the areas you think might show the most progress here? the u.s. looks like it has gone further when it comes to chip restrictions, and that's obviously wrangled the chinese in a way that they date the time

when we put the chip restrictions in place at the beginning of an era for them? >> yeah, technology, obviously is a big issue, and china will come out soon with the data regulations and laws. that's going to be an impact. i would expect that side of the relationship to not give in the short-term. there's a sense that it's a national security issue and we need to keep it to ourselves. we can't -- we just can't let it go into the open market and into the free market. i think eventually that will turn into a series of negotiations, a series of guidelines, a series of rules of engagement, but today i don't see that moving. that is the core of the friction from a commercial point of view, and that's chips and technology. >> i am curious, when you look

at china's approach to business, last week it caused one game maker to lose some $43 billion in market cap when it had widespread curves on video gaming, and then it came out yesterday and said we are going to approve 105 new online games. in response to the major losses, how much does the economic pressure force china to pivot? how much are we seeing -- for instance, we are seeing foreign investment pausing because investors don't know if it's a smart move to put their money in a place where the government can come in and cause $43 billion in losses? >> i think that is the question in terms of priorities for

china. pres president xi jinping has gained control of the communist party. the gaming video industry used to be cinema and now it's video games, and this is that part of the domestic control. however, there's no question that china realized it's time to pivot toward the economy. and foreign direct investment is down. their property market is in trouble. local debt -- there are a lot of issues, inflation, or lack of inflation, a lot of issues in china and they are pivoting to that without giving up the controls they gained during xi's first two terms. that's the positive part, and that goes back to president xi's meeting in san francisco with ceos. there's a sense they are trying

to lure back investors. having said that, i think 2024 is a year of sort of let's wait and see. i don't see a lot of increase in u.s. investment. about 50% of the companies say they are going to increase some, and some say they are going to hold or decrease. it's going to be kind of a standstill year while we both engage each other and see if the changes are real. >> carlos, there was somebody in one of our notes today that asked the question, china is cheap but is it cheap enough when it comes to stocks? i don't know how much you want to comment on that, and i am interested in what you are telling companies if they come to you, carlos, we have an opportunity in china, should we open up or not. what do you tell them? >> opening up is another story. usually it's we have a business in china and we want to increase investment. if a company is thinking about going international, and they start with china, i would say

rethink it, because china requires deep pockets and requires financial patience. the idea of wait and see is not a bad strategy today. there are some things happening in the environment that are going to be challenges for both sides, right? taiwan has elections in a couple of weeks, and that invaluably creates rhetoric and friction, and we have to be able to read what is tactical friction and politics and rhetoric and what is for real? on the other hand, they are going to be reading the u.s. election and they are going to hear a lot of rhetoric, and the status quo is very positive, but will not be easy. i think diplomacy will be at a

test in '24. >> carlos, real quickly, to what extent is china feeling the heat from india? india is the flavor of the month when it comes to foreign investors. is that motivating china? >> good question, steve. in china, i always felt the comparison is a little bit unfair. it's hard to compare where india is to where china is. they are two different countries and two different values and systems. china, yes, they are obviously worried about india, and they are also looking at japan making tremendous inroads in southeast asia. >> wow. >> japan normalizing relationships with south korea. there are things happening in the region that tells china they have to be involved and in that

game. no question, india is one. look at southeast asia and the influence japan has made as well as the normalization or coming together of south korea and japan given their history, and japan is the number one foreign investor in the u.s. yes, china should be looking around the region as well, and that's also creating a bit of a change. >> mr. secretary, really good to see you again. >> thank you. coming up, which tech company won the christmas holiday? our very own steve kovach will join us on that, next. "squawk box" will be right back.

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downloading as soon as they get their phone, the big winner yesterday, meta. the quest app was at the top of the app store on christmas day, and that points to a lot of people activating the new headsets, and that's the head set is that about 500 bucks that will start to compete with apple that will launch its vision pro coming up soon here. this will be a real battle starting next year. gaming was another theme, also playing to the vr thing. playstation was 11, and 12 is floating around there. playstation 5 and the latest xboxs are available after the supply chain problems plagued them for the last three years, and behind met yo, though, we have alexa that points to a lot of echo devices, and alexa tends to be a top device every year,

and now, the thing we have to talk about, guys, apple watch. that ban goes into effect today so people getting apple gift cards yesterday won't be able to buy an apple watch with them today. >> the cheaper price, less bells and whistles model not affected? >> of the apple watch? >> right. >> yes, that's called the apple watch se, and it's a pattent dispute. it's not the latest and greatest. if you want that blood oxygen sensor, you will have to go to canada or something to get it. >> was it already for sale? that particular watch already showed up -- >> yeah, the ban went into effect on christmas eve. apple was selling them in apple stores up until the end of day

on christmas eve. you could buy them in stores. the ban went into effect online of thursday of last week, and you can find them in third party stores, like best buy, they can sell theirs out but apple cannot. it depends on how long the ban lasts, and this all came about that it could impact up to 2% of revenue. and that doesn't sound like a lot and it's not an iphone ban, but when you are trying to grow top line revenue again, every bit counts and that's going to make it that much harder to return to top line growth. >> steve, thank you. coming up, we will speak with a crisis manager about what

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welcome back. our next guest has been monitoring the flare-up in anti-semitism on college campuses. joining us now is crisis management expert, chairman of

desenhall resources. are you currently working with any of the institutions behind the scenes? what do those conversations look like, exactly? >> i am not working with the he or i would have to be very careful doing commentary like this. but this is an issue i'm working on with businesses and institutions, more broadly. and the first thing that i would say is, there has to be a gut check. and by that i mean, there's a question about whether these institutions really see anti-semitism as a problem at all. i think that we cannot assume that that's the case. i mean, you look at the president's -- the university presidents that testified a few weeks ago, they had to be dragged by bulldozer to acknowledge that this was really a problem. i tend to take people at their initial word. i don't believe that they did or

do necessarily think anti-semitism on campus is a problem. and so i think, from a crisis management perspective, one of the things we always look at is, does a client really want to deal with the problem? and when they don't really want to deal with the problem, what you often have filibustering. there's always language like, we're deeply committed, or, we're looking into this, we're concerned. but nothing really changes. and you see this in the broader culture pip mean, you have a veteran's administration official who a few weeks ago openly mocked israeli hostages, and the last i checked, still has her job. you have someone who is employed by a prominent new york area botanical garden, who embraced, said that she was proud of what happened to the jewish victims of october 7th, and we'll see what they end up doing. but when you see people

emboldened to say things like this, this does not exactly suggest that there is a big crisis in terms of how people interpret it. >> so as a crisis management expert, how would you recommend remedying it? you mentioned that the client has to actually acknowledge the problem and want to change, what remedy do you have? and then, additionally, there's been some criticism out there, that kind of going back to the three university presidents, that they were overcoached and that they were given kind of too much legalese and pr spin, and how do you kind of thread that needle as well? >> well, i think that there's two separate issues there. i think that these -- the president's -- we see this all the time, attorneys take over the communications process. and attorneys are important in crisis management, but there is always a conflict between the legal discipline, which wants you to be very careful what you say, and the communications discipline that wants you to come out very simply and say, of

course threatening genocide is against our standards. communications processes is really quite a simple one. i don't dwell in the world of nuance, that according to henderson versus johnson in the supreme court, you can't say this or that. that's not my world. my world is, this is right and this is wrong. in terms of alaskas, i think that there has to be some sort of standard set, because what happened in that testimony was really not about free speech. what it was about was hypocrisy. you have people, professors and students, whose lives have been destroyed because of basically foot faults. they say something that is inincentive and not in tune with how you're supposed to talk about these issues, and you're ruined. yet, when someone says, we're proud of what hamas did or, yes,

genocide is free speech, these standards are all over the place. are you going to permit more centrist or conservative people to speak on campus? and not destroy their lives, not destroy lives of professors and students who may say something that is tone deaf, but if there are comments about genocide, well, that's technically free speech. and you know something -- >> eric -- >> yeah? >> i'm just curious, because we're talking about campus and what happens in congress, but these conversations are happening in companies all over -- and other organizations, all over the nation. because the issues they raise are so deeply meaningful to the people who work at these companies and these other organizations. and there are competing pressures on companies to take a stand, from the actual people who have a stake, at what's happening here. how are you advising the c-suite

on how to proceed, when it is such thin ice, and when the emotions are running so high? >> well, my job is not to take political stands. and it is not the job of a company to take a political stand. >> but they're getting pushback from their employees saying, but you took a stand during black lives matter. you took a stand then -- >> that's exactly right. that's exactly right. and so that's what i mean by looking at standards. if you are going to say, what happened to george floyd was an outrage, what about what happened to 1,400 jewish israelis when hamas came in? so this is exactly what has to be, what is being adjudicated right now. i have been advising a lot of companies to say as little as possible, because it is not in their self-interest to get too deeply into these wars. just because someone says, you need to weigh in, doesn't mean

that they should. and i can tell you on the black lives matter issue, where i was very active, for every company or individual who came out and said something very loudly, there were 30 that said very little and did just fine. and so you have to look that the issue of whether or not it is necessarily in your interest to weigh in on all of this. the reason why the issues you're raising are so big is because of that different standard. had a veterans administration employee mocked george floyd, they would not be, to use a quote they gave me, looking into it. that person would be gone. but when it's anti-semitism, well, we're looking into it. we're gathering our facts. that's what i mean by standards that have to be addressed in corporations and in businesses. >> all right. eric, we have to leave it there, but thank you very much for your perspective. appreciate it. >> thank you. coming up, much more on "squawk box," including a

conversation about the next steps for the federal reserve, with former dallas fed president, robert kaplan. we'll be right back.

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futures higher right now. we'll tackle what the fed will be bracing for in the new year, including pressure to cut rates. getting away for the holiday? we look at how airlines are handling the travel surge after last area's debacle. and a rough year for several media giants. will the industry consolidate some megadeals? don't touch that remote. the final hour of "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc, live from the nasdaq market site and times square. happy tuesday, happy boxing day. i'm contessa brewer along with leslie picker, steve liesman. joe, becky, and andrew have the day off. look at this, we're here and we're happy to be here. let's check the futures right now. dow jones industrials indicated

to open 50 points higher. you have the s&p higher by eight points, and you've got the s&p up 34 points. let's look at treasury yields right now. we're seeing the ten-year down 3.902% is the yield there, and looking at the two-year up 4.358. all right, taking look -- the real story this morning with energy is not with wti or brent, it's what natural gas, down 5.5%. >> i look at some temperature anomaly maps, which as a fisherman, i'm a bit of a weather geek, and they're showing warmer temperatures expected over the next several weeks, these temperature anomaly maps, and some of them are like red, which means they'll have warmer temperatures. and i'll wonder to the extent, i don't know if there's a longer term of gnat gas, but it has been something that has a big influence. there we go. and if we could zoom on that.

nice work, guys. terrific work. you can see, that's crude -- all right >> well -- >> that's what i'm talking about. and there's that november decline there. we have just not turned the heaters on in the northeast, and you can see that was the russia/ukraine war start right there. expectations that we would have huge problems, it didn't happen, in part because of the great work of u.s. refiners and natural gas producers here in the united states. >> the other interesting thing about the weather right now is that one, we have not seen a lot of natural catastrophes in this quarter. so who's going to benefit there? insurers, which of course, i cover. >> coming back to the insurers. >> there you go. >> the other thing is, we're going to talk a little bit about travel this weekend, as well. when you donate have travel also

making a snafu of the holidays, big deal. >> and if we could put that crude chart back up, i know we were just there, but you think about what's happening right now in the red sea and what a normal reaction might have been to the crude markets to what's going on there and how really little. i want to knock on wood, because i don't want to jinx it, but quite remarkable how well behaved crude markets have been given what's happening, and the reason for that is the huge production of u.s. producers again, but we're now the largest producer that has really, by the way, we talked in the 7:00 hour, about things that the economists got wrong. well, one of the things was the ukraine war was supposed to raise oil prices and gas prices and create more inflation. you saw what happened to nat gas. you can see right there, that spike in the middle of the chart is the ukraine war happening, and that has come off -- actually, go back even further to '21 and it's there as well. >> yeah, it's all interesting. obviously, the red sea, you bring up a good point, although

this morning, there were those headlines that maersk is one shipper that is proving the route -- >> and the next thing that will happen is the report of a polar vortex that will make everything i said wrong. >> this morning, drugmaker bristol myers is in deal-making mode. it announced a deal to buy rayzebio, including to a friday close of $30.57. this acquisition comes a few days after bristol myers announced it would buy neuroscience drug developer caruno therapeutics. that company and its bankers and lawyers are certainly in action. >> and look at the shares of rayzebio, up almost 100%. >> nice double with that premium. although still 250 below offer price there. let's get to frank holland with

some of this morning's morning movers. >> crypto-related stocks this morning, ahead of a deadline by the s.e.c. to submit filings. taking a look. you're seeing them, for the most part, in the red right now block. about to scowl it square. the exception. up very fractionally. theoretically will be launched in january. the s.e.c. met last week with some of the companies looking to launch etfs. that list includes black rock and etf. nio announces a new model that will compete with maybach. other ev makers are moving higher in the premarket. but nio up about 4% right now. we're also watching chinese internet stocks, following china approving more than 100 online video games and saying it fully supports the industry. games by tencent and netease

were also approved. you can see netease up 2%. just up fractionally. this move follows draft guidelines released last week that led to double-digit losses for tencent, netease and a number of other companies. it issued warnings for, quote/unquote, irrational behavior. steve, back over to you. >> thanks so much. the fed will have plenty to watch in the new year, tracking inflation, the nation's job market, but what will lead the central bank to cutting rates? joining us now, robert kaplan. >> good morning, robert. >> good morning, steve. how are you? >> let's do a little monday morning quarterbacking after the fed meeting here. the fed changed its statement with one word. that was the policy decision by the committee and then they committed 19 separate forecasts that led to the market to conclude that there would be not just rate cuts, but six rate cuts next year, quarter-point rate cuts, and happening as soon

as march. did the fed get the communications wrong in your opinion? >> well, i think there was a consumer price index report the day of the fed announcement. and i think that report gave the fed a pretty good idea that the pc report from last friday was going to be very positive. so they submitted a median number of cuts for next year, but i think it probably gave chair powell a little more confidence that we were going to get a good pc report. and so on the margin, he sounded more dovish than i think he would have liked to and they've tried to walk it back since, but i think he previewed that the pc report and future reports might be very strong, and if he wouldn't are done it, it might have been happened last friday.

i think it's on the margin that we're going to wind up in the same place either way. >> if you're sitting there, robert, as a fed official, which you were not too long ago. you've got a 3% year over year inflation rate. you want things to come down. and suddenly there is this massive relaxation in financial conditions. are you concerned that leads to re-igniting inflation? >> yeah, i would be concerned about it. i would also be concerned that government spending is at record levels, and that seems to be having an effect on the service sector. much more on the goods sector. it's causing services sector to be more sticky and inflation there and i'm also conscious of the fact that you just mentioned that the oil rally has been another tail wind and that tail wind may not continue. so i think that's why, if i were there, i would want to see at least a couple more months of

reports suggest the progress we've been seeing is sustained, but if i saw that, i would be ready to take some action. because i don't want the real fed funds rate to actually go up. and as inflation comes down, if you don't adjust the fed funds rate, you're actually increasing the restrictiveness of monetary policy. i would prepared to act in the spring. >> i asked you two questions about monetary policy from the negative point of view. let's entertain the positive idea here, which is, is it possible that the fed is reversing course just in time to prevent the recession that everybody saw coming and can have its cake and eat it too, which is to say, lower and lowering inflation without a recession, without unemployment going up too high, or am i just believing in santa claus here? >> no, you're not believing in santa claus. i think that there's a good

possibility that we won't have a recession in 2024. the fed can help with that if it believes inflation is to the ground. the big reason that i think the economy will surprise with its resilience is again, we are running deficits that are in excess of 7 percent of gdp, spending on the inflation reduction act, the infrastructure act, the unspent american rescue act money is all happening in 2024, and so while a number of sectors, the good sectors is weak, china is very weak, which helps contribute to that, you've got a strong bid for good services and workers from all of this project spending that's going to go on through '24. i think the fed's got an excellent chance to be able to cut rates and have a soft landing, but it's got to see more sustained improvement for a

number of more months before it acts, but i think that could happen again as early as this spring. >> robert, does it make sense with all of that stimulus out there for the custody to be cutting rates. couldn't that be quite inflationary, if they're still expected to have so much fiscal spending in 2024 as well? >> and i've said before, without the inflation reduction act, the unspent arpa money and the infrastructure act, i think the fed might have stopped raising rates around 4.5 or 4.75. i don't think it would have ever gotten to 4.25 to 4.5. so if i were there, i would be very sensitive to particularly what's going on in the service actor. you spend money in the city on a big project and it affects demand for workers, it affects people going out to dinner, they fly more, they use services more. and so i think the fed is going to be vigilant about that. and so, that will be an item worth -- to bear watching.

having said that, one of the reasons we got into this inflationary problem is the fed stayed way too accommodative for too long, even as economy was improving. and i don't think it wants to make the same mistake on the flip side, where it stays too restrictive, as the economy and inflation soften. it doesn't want to make the opposite mistake, either. >> orrobert, just a few short weeks ago, it was game over for the u.s.' ability to finance its deficit. we were at 5% on the ten-year. the world was coming to an end. the best investment was probably cans of tuna and in a basement bunker. and then you look at what's happened since then, and uall o a sudden, the market is happy to finance these massive $33 trillion deficits at 100 basis points lower, at 3.9%. are we out of the clear of that concern? is the market not taking seriously the amount of debt out there? was it overplayed when it came

to the ability or the difficulties that the u.s. might have in financing the deficit? >> yeah, and so the short answer on that is, i don't know. but probably the number one thing i'll be watching in 2024. we are now at debt-to-gdp of over 100%, the president funded entitlements of $75 trillion and growing. you may remember in march/april, the ten-year was around 340. it's now -- then it backed up to 5. now it's at 390. we've got $9 trillion of new issuances next year. and the truth is, nobody really knows how deep the bid is for a duration, for the ten-year tre treasury, but we're going to find out. and this is why the treasury has been shortening maturmaturities. it doesn't want to test that. it's been selling more bills. but you and i have talked about. there is $7 trillion of debt rolling off in 2024. it has to be refinanced.

it's rolling off at 2 and a fraction, refinanced in the best case at 4%. and that's another 130 to $140 billion of interest expense. we've got to really be watching that in '24 and the years ahead. >> robert, that's something you've been very consistent on and we would be glad to have you back and keep talking about it and watch it as theyear goes by. it's been a puzzle, but interesting to really follow it. robert kaplan, former dallas fed president, thanks for joining us. >> good to talk with you. coming up, over last iyear' travel debacle that left thousands stranded or delayed, we'll get an update on the holiday travel surge. "squawk box" will be right back. you know when you have those moments? that time to reflect. to be like wow! what did i do to get here? (tense music) right. work. you worked hard and it's time for a bank that'll work hard for you.

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welcome back to "squawk box." the futures solidly green, although some of the steam taken out of the rally we saw earlier. the dow indicated to open up about 38 points higher. the nasdaq indicated to open up about 27 points higher. well, it looks like santa may just have brought good weather and easy flying for

everyone who was getting onboard planes or trains or automobiles. aaa predicted that airports are busier than ever this holiday season. the aegs forecast 7.5 million airline travelers between christmas and new year, passing 2019's pre-pandemic record of 7.3 million passengers. for a look at how the airlines are handling the holiday travel surge, let's wrbring in sarah nelson, international president of the association of flight attendants. her union represents nearly 50,000 flight attendants at 20 airlines, many of whom i know were working over the long holiday weekend and we appreciate their hard work. nice to see you, sarah. >> nice to see you, too, and thank you so much. >> let's start with the news, first off, it looks like there were some hiccups for southwest on the heels of that 1$140 million fine that the d.o.t. handed down. in this case, southwest blamed

it on fog in chicago. what grade would you give southwest in particular and more broadly, the airlines over the weekend for handling the massive crowds? >> i think we're sitting here at a solid "b." and that is not just because of the airlines. i think it's really important to recognize that this has been a joint effort between airports, the government, and the airlines. the tsa workers have been attracted to the job because the administrator moved them to the general schedule like other federal workers. they've been working for so long to do. that was a 30% pay increase, which allowed them to staff up and have enough tsa workers to move people through those security lines, which was a big part of this. the airlines have accepted the concerns that we've raised over the last year, saying that you have not put the investments back into the airlines.

the ongoing issues are just that not all of the contracts are done. all of the flight attend contracts up right now and those flood to get resolved soon. but we have said, you have to invest in the airlines and get these contracts done before you give $1 in stock buybacks to wall street. so far, so good. >> okay, so pilots in large part have come away with really impressivalry gains. southwest raised pilot wages 50% over 5 years. we saw a similar trajectory at united and american. do you think this bodes well for flight attendants in pressing their concerns? >> i will tell you, this is on the heels of 20 years of austerity, the bankruptcies following 9/11, and then during all of the consolidation that was not really a major step forward for workers. we were just barely getting back to the level that we were prior to 9/11 if adjusted for

inflation. and this was always suspected. it was supposed to happen in 2020. the pandemic put that on hold, but these increases for pilots are exactly what other workers are expecting and they need it, because it's it has been a long time coming. the expectations are very high. and the airlines are going to need to understand that this is not a pilot-only problem this will have to get resolved throughout the workforce. >> i was surprised to read that flight attendants don't get paid for time when passengers are boarding, which can be long. i know as a passenger myself. >> does that matter if your pay gets made up in other areas? >> this is anoma antiquated pay standard from the 1930s, which

has meant that we've had to get that pay in other ways. what has happened is that our days have become much longer. our very first contract at united airlines had an eight-hour day. it's very common that flight attendants today are working 14, 16-hour days. that means more takeoffs and landing, that means more time you're working with the passengers and not get paid. in a situation like today with all the cost cutting that has happened, cutting back staffing to the very minimum, filling those planes as much as possible every single seat, of course our jobs are much harder, too. so this has been a more recent issue that we have not been able to get at, because contract bargaining has not been about moving forward for the last 20 years. we're going to get at it now. way too much time we're not getting paid. and there's no way to make that up. >> i would like to spend a second to thanks to all the

flight attendants and the pilots. i do a lot of flying on the holidays, and they're always so great on those days, especially even the tsa agents. i want to just confirm, you're under some contracts go back to 2012, 2014. is that right? some of these contracts have not been negotiated in more than a decade? >> that's exactly correct, yes. >> wow! >> the railway labor act, contracts become amendable, they don't expire. that means that these contract negotiations can just go on and on. we're really bringing that to a head. you're going to see protesting and flight attendants across the country protesting. >> the thing i wanted to ask you about was this. not that, i want to confirm that, are people nastier now? are the passengers meaner, angrier item >> whenever you bring a bunch of humanity together in a closed pace, you're going top of issues. and when you have fewer staff to be able to address those issues, temperatures can rise fast. this is what i will say, steve.

the people who come to our door for the most part are kind. and actually what i saw this week is i was traveling out to my mom's was every worker doing an amazing job in the airport, and every passenger saying "thank you," and expressing gratitude and there seems to be a real working class solidarity happening out there. everybody knows we're in this together, and we still have these major events, but most people want to be kind and express kindness. >> it's the taylor swift effect. >> what's that? >> everything else is taylor swift. the fact that passengers are kinder is the taylor swift effect, too. >> thank you for joining us. >> happy new year. >> happy new year to you. >> just my theory. >> well, i like it, and also some good news to close the segment. coming up, we'll take a look at what 2024 has in store for media and streaming. could we see more consolidation? put another way, just how many services will you be paying for

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check out shares of intel up about 2.3%. we're watching them on news that israel's government has agreed to grant the chip giant more than $3 billion to help build a $25 billion semiconductor factor in the country . the new plant is expected to create thousands of jobs. intel also committing to buying more than $16 billion worth of goods and services from israeli vendors over the next decade. all right, coming up, just a few days remain in 2023, but next year we'll come out of the gates quickly with a rush of economic data, including inflation and jobs. and we're going to talk about what to watch as the calendar flips to 243. stay tuned. you' wchg quk x"n reatin"sawbo o cnbc.

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welcome back to "squawk box" on cnbc. the dow jones industrial is applied to open up higher by 52 points, the s&p higher by seven points and the nasdaq higher by 30. >> joining us, emily gee, she is senior vice president of inclusive growth at the center for american progress.

past christmas, now we can officially debate 2024. let's have quick debate about 2023. was it a disaster? was it okay, what was your assessment of the economy in 2023? >> i suppose that depends largely on who you are. for upper income earners, it was not a failure, but for many, it was. one of the things we see in the data, as we break it down by income, by wealth status, what we find is that not all americans have made the same amount of progress in the last year. that's one of the reasons why, when you poll americans and you ask, how do people actually feel about this economy, you get such incredibly different results. and the majority of them are negative. let me go to emily. the gdp numbers are okay, but

the sentiment numbers are absolutely terrible. and maybe ej has a point, that what happened last year or this happened this year in 2023 did not filter down to average americans. >> you can look at the most recent sentiment numbers from the university of michigan. you actually see sentiment ticked up across all the indicators. and we know that when we have a spate of high inflation, consumer sentiment can still lag. and now that inflation is under control, consumer sentiment is up again. in fact, real wages are up in 2023. >> that is accurate. i did do that math. and the average weekly hours if you do it were -- take-home pay was up 19%, inflation was up 16% over the last several years. and that is a bit of an increase. amy, let me start the look ahead with you. are we out of the woods on a recession call for 2024? >> ichk things remain on track

for a stormy economy. i think in 2024 we'll continue to see strong economic security for americans. and a number of measures for the costs, including out-of-pocket maximum for seniors on medicare to go into effect. we're seeing real wage growth. that's wages rising faster than inflation and i think we'll see the overall economy continue to grow. the biden administration has made major investments of infrastructure, clean energy, in training workers, and that will help grow the economy and grow the middle class. and lastly, we're seeing sentiment tick up as well. >> e.j., the trends you saw in 2023, of the benefits of economic growth not filtering down to average americans, do you see that continuing? are you still on an outlook or watch for a recession in 2024? >> unfortunately, i don't think powell has the stomach to really

do what needs to be done. we need to give up on this naive idea that the fed is somehow apolitical. powell is the same guy who said the 75-basis point hike was off the table because he was still up for renomination and kept interest rates below 1%. and only then after he was confirmed by the senate for a second term did he give us four of those 75-basis point hikes in a row. they constant talk about how their data dependent at the fed, yet they do exactly the opposite of what the data says they should do. now that we go into an election year, i don't think that they have the stomach to actually keep rates high, high enough for long enough, to really kill inflation and we're putting ourselves in a position to repeat the mistakes of the 1970s. real quick, on the unemployment rate, the key reason why the unemployment rate looks so good is because you have so many people missing from the employment force. it's somewhere between 5 and 7

million, so you actually have an unemployment rate over 6% right now. one very good example of this, if you look at the state-level data. and you find you have many states like maryland for example with an unemployment rate below 2% and yet they have fewer jobs today than they did -- >> won't the infrastructure spending help that? if you have and we just heard from robert kaplan, that a lot of the spending that has already been approved will take place next year if you have big projects going to maryland and it puts a lot of people to work, doesn't it solve that problem? >> not necessarily. is it going to give you a boost temporarily in the short-term? absolutely. no doubt about that. we see that every time the government borrows, spends, and dumps a ton of money on to the economy. sure, that has a temporary positive effect. much like alcohol. but then what happens? you get a hang kroefr the next day, and that's what we had with

this runaway inflation and this anemic economic growth. that's what we're going to have again. >> there's a lot to go through there. some of what makes it look like powell may have been prescient in the way he approached this is the soft landing. is the fact that there was no much-lauded and predicted recession in 2023. >> that's right, and the fed has already said it was going to be looking at interest rate cuts in 2024. we're also now at inflation that's getting very close to the fed target, core pce for the last six months is down to 1.9%. so we're in a place where we have much tamer inflation. we still have strong employment. in fact, for women, and for african-americans, unemployment is at historic lows. and we can expect to see not just public sector, but private-sector jobs being created as a result of investments in infrastructure, clean energy, and also in making

things in america like semiconductors. >> e.j., i don't quite get you what you mean when you say there's 5 to 7 million missing jobs. i have the level of jobs above where it was in the pandemic, i'm a little lost as to how we're missing 5 to 7 million jobs. >> the bureau of labor statistics actually has a lot of data on this. they literally have a category called "not in the labor force." >> sure. >> and you can see that that was rising before the pandemic and then it levels off and begins trending down before the pandemic. we get a huge spike in 2020, and that stays evaluated and never comes down. you can look at trends -- you can look at the establishment survey -- >> but the participation rate is back to where it was, or close to where it was an a little bit below it. you have the prime age working cohort back above where they were before the pandemic, right?

>> yes, but we have to remember these things are ratios. you can adjust them by adjusting either the enumerate or denominator in that fraction. as an increasing percentage of americans exit the labor force, you can increase the labor force participation rate simply by removing people from that equation. it's not as if all of these people suddenly went back to work. >> i get it. you are above in terms of the trend you would have had in terms of people out of the labor force. e.j. and emily, thank you for joining us. we'll have you back and have this discussion for the next 12 months. thank you guys, appreciate it. coming up, which media properties could be in play when it comes to deals in 2024? we'll run you through that, as well as the challenges the biggest companies are facing and ayun.all means for investors. st ted you're watching "squawk box" on cnbc. go. and go and go and go. (tense music)

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it was a mixed year for media stocks, but 2024 could see a slew of deal making. julia boorstin joins us with a look at what to expect. hi, julia. >> good morning, contessa. next your could be busy for media m&a activity, as the media giants are under pressure right now from cord cutting, for a weak ad market and competition for content subscribers and sports rights from deep-pocketed tech giants. paramount and global ceo bob

baucus and dade zaslav met in new york last week according to sources, after this paramount's controlling shareholder held talks with david ellison's sky dance and red bird along with apollo according to sources familiar with the situation. now all of this comes after paramount suffered from 145% decline in linear tv ad revenue last quarter and as it faces upcoming debt payments. warner brothers' discovery would benefit from paramount's coveted nfl rights on cbs, but if it's not a buyer, it will be free to sell itself, as of april 8th when restrictions from its warner media deal expire. now, sources say that comcast might be interested in pairing its nbc universal, cnbc's parent company with warner brothers' discovery to create a more powerful streaming platform. now, access to the nfl could also be driving deals for the likes of amazon, apple, and google's youtube, and those platforms, those tech giants will be eyeing the nba's next rights deal.

the other sports wild card in play here, espn, which bob iger said he's bringing direct to consumer. we're also watching to see if he decides to sell disney's linear networks. and with last week's lionsgate finally spinning off starz, more linear assets could be the play. sources tell me that starz could roll up the likes of the history channel and b.e.t. to take them digital as it has with its starz streamers. the catalyst that could kick off a wave of change is what shari redstone decides to do with her properties. we have no comments from all the media giants on these talks, but they are definitely happening. >> they don't want the prices to go up by talking about it. i'm juris cst curious, though, you're looking at the regulatory environment and the biden administration's view of big mergers, certainly the tie-up of comcast and discovery seems like that would trigger red flags

everywhere. i mean what role does regulatory environment play in what we're like to see? >> that's a really good question, contessa. and i think there's thought that paramount, one reason why those assets could be in play first or easier to get a deal done is because of the regulatory environment. paramount is smaller and there is so much competition in that space. for instance, shari redstone could sell her controlling stake in national amusements, which owns 80% of the votes of paramount and global. they could sell that without much regulatory issue at all, or she could sell off paramount global in pieces. for instance, b.e.t., she could sell off the studio and its library. she could sell that off in pieces, which wouldn't have that type of regulatory scrutiny. you're right that a megamerger between the likes of an nbc universal and warner brothers discovery, that would draw scrutiny, but of course, you

have to see what happens with the regulatory landscape. and then there's also the argument that these companies face so much competition and are under so much pressure that eventually they think they would get this kind of deal through. but in the meantime, that's why there's so much focus on these smaller deals and the potential for bundling. we may see bundling between these streaming sfs even if they don't eventually merge. >> it's like watching a giant game of tetris happening in front of your eyes. >> so many moving pieces. now with more on the state of media is tom rogers, executive chairman of orbit gaming and entertainment, as well as the former nbc cable president and a cnbc cont contributor. thank you for being here. there was a note that last week described the need for media m&a, these desperate times are

leading them to explore desperate measures. you see that happening with the warner brothers paramount tie-up as falling into that category. why zma if these merger do ultimately take place, does scale achieve what they're hoping to kind of solve for in these desperate times? >> thanks for having me, happy holidays. i think the answer to that question is in the short-term, this is a very tough thing to have these companies engage in. they would be doubling down in decline, they have struggling core legacy businesses. the streaming businesses aren't doing well. and having said that, the status quo is not a good answer, so they need a better answer. and the question is, are these possible mergers a better answer? certainly, there's a ton of cost synergy between warner brothers, discovery, and paramount.

there would be a reason for warner brothers to want to strengthen its sports play, one getting a broad networks, two getting the nfl rights. there's certainly value in killing one of the streaming services, namely the paramount streaming service, and put it together into a single streaming sfts with hbo and stling that could reaccelerate some of the streaming subscriber needs that warner brothers has. there's some significant timing issues here. paramount's, major cable deals are up come this spring. over $100% is tied up with cable. it's also the nba rights for warner brothers discovery are

going to be up in the spring. so this is a deal because of the regulatory review, this wouldn't close into 2025, probably not integrated in 2026. getting football rights that late doesn't do much for a renegotiation for the nba, which is pivotal for warner brothers discovery happening this spring. >> much has been made about the bundle and that being a key driver of m&a as media companies look to make their streaming operations more profitable. what does that mean for the consumer, though? is bundling these streaming properties together, would that lead to higher prices or do you think that, you know, consumers would be subscribing to fewer options and therefore paying less on a monthly basis for some of these streaming opportunities? >> well, near-term, it looks like a way for consumers to get a lot of channels much cheaper. verizon already has put out a

netflix max bundle for $10. and there's an opportunity also from verizon to get the three disney services for $10. so five services there for 20 bucks. i think you look at prime from amazon, something most people feel as though they're getting for free. there's talk between paramount and apple about a bundle there. that was going to be similarly priced, you could see people having access to six or seven services for $30 which is a huge discount relative to the $100-plus per month people are paying for the cable bundle. i think the idea would be to get the kind of distribution, get reliance on those services by consumers. then as we saw with the cable bundle, those bundle prices increase over time. >> tom, it's great to see you.

i decided during this segment what i'm doing is going outside and buying one of those hot dog venders because i'll be sure next year what i'll be doing and who i'll be working for. i want to come at this from a completely different way. forget the properties. tell me about the people. i can't understand what pieces are going to go where. who do you put your money with? do you bank on iger? i'm asking you to insult some of your good friends on tv. is brian roberts the one you want to put your money with? is it soz love? who is capital allocator that understands money and the value of things? >> that's a really good question, particularly because of the piece that julia mentioned which is, there's a way to gain control of paramount through sherry red stone's

national amusement's interest which has 80% of the voting control of paramount. that piece has been valued publicly at about a billion dollars and paying a major premium to that is a whole lot cheaper than the $25 billion enterprise value of an acquisition of paramount. while i raise that in the context of capital allocation is while it may be a way for somebody to gain control with a lot less trgs there is, as puck has reported, a provision in the paramount debt which says if there's a change of control of national amusements, if the three rating services then re-rate the debt of paramount lower, the debt would essentially have to be refinanced. it's callable. that would raise a significant

issue about who could acquire paramount that way. that kind of says the financial buyers would have a tough time because when they acquire, usually there is a downgrade in debt. the question is would warner brothers discovery on the capital allocation front be able to say look at all the synergies we have, we're a stronger company. we wouldn't get a downgrade. certainly comcast has a stronger balance sheet and would be able to make an argument in terms of capital strength that would make people think of the buyer there. you're raising a very important question on how paramount control ultimately gets transacted. >> credit implications are a good thing to raise. tom, thank you. >> thank you. coming up, futures right now in the green across the board. "squawk box" wilbeig bk.l rhtac

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let's get straight to the markets now. our next guest says broader averages have run up too far, too fast, that investor optimism

is too high. for more let's bring in sam stovall from cfre research. what's not to like? you've got disinflation, growth, the prospect of rate cuts. what else do you want, sam, in order to fuel the optimism? >> good morning to you, contessa. i think basically the market is being drawn higher, like a tractor toward its all time high. once we do eclipse that prior high, thereby including the bear market that started in the beginning of 2022, we will probably advance by about 10% over the coming four-month period, but i do think we're likely to be digesting some of those gains before we actually start to move higher earlier in the year. just when you look to the percentage of stocks above their 50-day moving average, the

industries within the 500, et cetera, i think we have had a bit too much of the egg nog. so as a result we need to sleep some of that off. >> if it's a wonderful life, as investors seem to think it is, what sectors do you think prove there's some opportunity, sam? >> well, i think because we are expecting not to have a recession, that we do look for economic growth to continue in 2024. i'd be looking for the also rants, groups like financials, like industrials that are seeing an improvement in their technical underpinnings. our technical nan al sis on lowery research has identified industrials and financials, also looking specifically at some of the banks as well as the brokerage firms and the financial area, diversified machinery as well as building products in the industrial category. so some good companies that are

seeing both positives in terms of fundamentals and technicals behind it. >> so you are pointing out regional banks especially. what about those unanticipated events? >> they're hard to anticipate. certainly i think investors need to look to those. usually what you find are unanticipated events that are not monetarily related, not related to the overall health of the economy globally, end up being good opportunities. so i think we have to ascertain what those unanticipated events are likely to be. there certainly are an awful lot of them that are potential. right now i would tend to say you're going to take them in stride. >> sam stovall, good of you to join us on this boxing day, the day after christmas. thank you very much for that. futures right now, it looks like the dow jones opening up higher by 62, nas dax up by 4.

>> are we all back tomorrow? >> we're all three -- >> should i bring cupcakes or something? what should i bring? i'm not going to bake them. there's no way i'm baking them. >> make sure you join us tomorrow -- >> i'll bring the coffee. >> we have the coffee. we just need the cupcakes. good day everybody. "squawk on the street" is next. good tuesday morning and welcome to "squawk on the street." i'm sara eisen with. carl, jim and david have the morning off. up 62 points on the dow. nasdaq pointing to an up start as well. s&p up eight in the early action. our roadmap will begin with the market rally. major indices in the midst of an eight-week win streak. sh