"squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. live from the nasdaq market site in times square. i'm maike santoli along with brian sullivan. futures at this hour are up six points for the s&p. a handful of points away from the record closing high. the dow did hit that record. nasdaq 100 in record territory. the dow's record was the seven account close in all-time high territory this month. we are looking at gains under 14% for the year for the dow. no record for the s&p yet. the index is within 13 points of

the all-time high which was set at the start of january of 2022. it is also working on a rare nine-week winning streak. treasury yields have lifted from the recent lows. we hit 3.79 a couple days ago on the ten-year yield. nothing too dramatic. we are seeing the buying binge in treasuries in last two months. let's turn to the middle east. u.s. military is reportedly trying to convince shippers to sail through the red sea despite ongoing attacks by houthi rebels. the pentagon is speaking with companies on a near daily basis to get a sense of needs and reassure the international community is there to help with safe passage. half of the container ship fleet that travels the red sea and

suez canal is avoiding the area due to attack threats. the oil market is up .60%. wti crude. it is a topic we will get into with rbc's helima croft later this hour. let's get to the corporate stories to round out the year. google, a big deal, settling a $5 billion privacy lawsuit. that lawsuit alleged that google tracked the internet use of millions of you that thought were browsing privately. it is expected to be presented on february 24th to the court for approval. this lawsuit sought $5,000 of damaging per users for violating wire tapping laws. the parent company, alphabet, is up 67%. if you are part of the suit, mike, we are getting a check. >> $5,000? >> you are getting an email join

this class action. you ignore it. i started paying attention. randomly, you get a $38 check in the mail. feels like the residual paycheck when you were on "seinfeld." $5,000 a person. >> they knew what you were doing? >> i think google knows what we're doing before we know it. they know where we are going and where we have been and where we are thinking about going. >> i don't know where i'm going. google does. >> we are going another 2:58. fellow magnificent seven member nvidia launching a modified version of the gaming chip designed to target china export controls. it is available to chinese customers in january. this is the first china chip nvidia launched since the export rules revealed in october. nvidia is one of the biggest

stock stories of 2023 up nearly 240%. yet, somehow, earnings estimates have gone up, and the stock has a lower valuation. >> multiple. >> exactly. >> that had been delayed a couple times. getting it down before the end of the year is positive. boeing urging airlines to inspect 737 max planes to look for a quote possible loose bolt in the rudder control system. the latest quality issue to impact the best selling jetliner. the faa says the company recommended the inspections after the international operator discovered a bolt with a missing nut after routine maintenance. the company discovered an additional delivered aircraft with the nut not properly tightened. boeing said the inspections would take two hours per plane. all new 737 max planes will go

through the check before being handed over to customers. boeing says all 737 max jets operated by chinese carriers are back in service, which is a year after the global grounding in 2019. the model was grounded after the fatal crashes in indonesia and ethiopia. it started back in production in late 2020 after pilot training. chinese airlines started flying them in january of this year. boeing shares up more than 36% this year. it's a matter of tightening those bolts. >> when i fly, i like my bolts tight. i want my -- i remember being in japan and we were delayed for five hours. they said it was a wing problem. we need those. it turns out it was a missing light. a burned out light bulb on the end of a wing.

i like my planes with wings. >> that happened to me on my honeymoon. we were flying to johannesburg. it was a 17-hour flight from atlanta. everybody boarded the plane. a luggage cart crashed into the wing of the plane. >> they have to check it out. >> we had to get off. i spent the first night of my honeymoon in atlanta. it is better than not having wings on an afirplane. >> that's it. santoli knows he has a long morning. >> i have no dramatic aircraft malfunction stories. >> that's a good thing. >> some of those can be binary. >> you know. speaking of things that fly. the u.s. space force and spacex launched their x-37b spacecraft in florida. the launch was the seventh mission for the spaceplane which is shaped like a shouttle, but

uncrewed. the first time it was launched by spacex falcon heavy rocket. very cool. coming up, it is finally here. the last trading day of the year. the bulls are very much in control. the fed could start cutting rates next year. what should investors watch in 2024? we will get into that with peter bookvmar next. (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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investors are curious about what the federal reserve will do in 2024. joining us now is peter b boockvar. peter, we can sum up 2023 as bad things we thought might happen didn't happen. inflation and recession and also the fed feeling is it will have to force the economy really into a stall in order to get inflation lower. where do you think that leaves us looking into next year? >> i see a lot of potential big-time tradeoffs next year. fed will cut interest rates next year. what if long-term interest rates

resume rising again because the market views that as the fed pulling back from their inflation flight? the worry about excessive treasury borrowing is not going away. what if the fed cuts three times as the dot plots imply, but the market is expecting six? there's a tradeoff there. if the fed does cut six, maybe that is because the unemployment read is going from 4.5 to 5. there are a lot of pushes and pulls here that investors need to be careful of that. what i find amazing is one of the big lessons of the 1970s was the fed that got complacent after inflation fell and initial spike and inflation resumed rising again. everyone assumes the battle against inflation is won because we're going to go back to the 2%. no, what wins the war on inflation is the sustainable period of time of inflation

around 2%. not a few months on the downside of the inflation spike. >> that is certainly true. i think it is hard pressed to suggest powell, who has been talking about the hazards of the '70s experience, is aware of that. you mention that is one of the dangers out there. i agree that things could go astray from what the market is now expecting and pricing in. if inflation does continue going in the right direction, it is the escape hatch for all of it? >> for sure. that's the big pain reliever, call it, to get inflation around that 2% and to keep it there. that, obviously, gives the fed a lot of flexibility. it was low inflation for the 15 years leading into 2022 that gave license to all of the central banks to experiment with negative interest rates and zero

qe. if you go back with the level of inflation, that gives them more flexibility. i don't think it will be that easy to have a spike to 9% inflation and magically come back to 2 and stay there. it will be more of a bumpy landing. i'm a believer that the sustainable rate of inflation over the next three-to-five years is 3% to 4%, not the 1% to 2% pre-2022. >> historically, stocks are okay with 3% to 4%. it depends on monetary policy and market yields to your point. i would love to zero in on this idea that the market quote expects up to six rate cuts next year. just because the fed funds futures dangles that out in the latter part of next year means it is unclear that humans are

saying we are not having a recession and the fed will cut that much next year. it seems like a what if scenario in the absence of any other way of quantifying. once you know the next move is lower, you extrapolate. >> absolutely. to be clear with the fed funds futures market, it is only telling you what they think today. their opinion can change tomorrow. their opinion can change next week. it is not a predictor. it is as of today's information how it is priced in. that gets to my point of tradeoffs. if they cut three times, that is a powell looking at the modest tweak to the reduction in inflation with growth staying resilient. if they cut six or more, that's because the economy is still going to run into trouble. with the economy, we still have to understand that the big rise in interest rates in a condensed

period of time still is working its way through the economy. there are about $700 billion of investment grade debt that needs to be re-financed in 2024. there is $500 million of commercial real estate that needs re-financed in 2024. there is a re-financing wall we have to deal with in 2024. the rate cuts will not magically fix that. >> peter, you mentioned the prospect of the fed winning the war on inflation. i'm curious how you think about them winning the war on the lag effects we talked about with regard to the historic rise in interest rates and overall financial tightening? it appears on what the market is doing according to the goldman s sachs index, it is easing based on the market. you know, have they won the war

against the lag feffects as wel? >> that will still play out. i mentioned the 2024 maturity wall. there is a bigger one in 2025. it goals es up again in 2026. if mike is right at 3% or 4%, for a period of time, the difference this time is it comes after 15 years of zero rates and 1% to 2% finflation. to your point, that is where the adjustment has years to play out. it is premature to assume we landed smoothly because the economy still needs time to acclimate to the higher rate environment. those balance sheets are going to feel the impact. that is why we have the passes with the sharp rise in interest rates. not everyone had to re-finance.

as the days and weeks and years play out, if rates stay high for a while, although lower than where they are currently today, there is a large amount of debt that needs to be re-financed. >> no escape of that, peter. i appreciate the time this morning. happy new year. on deck, college football bulls in full swing and so is all of the betting. up next, how much money will be spent or won on gambling? congrats to becky's rutgers scarlet knights. we're back after this. our future will demand

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welcome back. time for the "executive edge." the buy now and pay later deal for an nba team. alex rodriguez and form are business partner are reportedly said to exercise an option to buy another 40% of the minnesota timberwolves and wnba lynx. they began the $1.5 billion deal back in 2021 with the first investment of 20% with another $290 million payment back in

march. the current owner of the team, minnesota businessmen glen taylor paid $88 million in 1994. >> amazing investments. if you look at the investment returns and you buy a team and never wins a game, like the pistons, the value will go up. this is the ultimate trophy for those like mark laurie. >> they opened the supply of investors to come in and buy these things. depending on the sports team, but it is a lucrative area with the spac world. there is money to compete for a stake in these teams. >> you look at my dear late friend scott minerd which paid

$2 billion for the dodgers at the time. they made acquisition for players for over $1 billion. you can say the dodgers are valued at $6 billion. >> for sure. >> people don't realize there is a lot of oil under dodger stadium. they probably will never tap it. the l.a. oilers. new year's eve weekend is packed with pro and college football action. for a look at what is ahead for sports and sports betting, let's bring in patrick risch. he is the director at the washington university in st. louis. he is ceo of sports impact and "forbes" contributor as well as cnbc contributor. patrick, with so many states approving sports gaming or about to do so, i acknoimagine there billions or tens of billions of dollars wagered in the next couple weeks. >> no question about that.

thanks for having me on. they just reached $100 billion spent this year on sports wagering in the united states. as you mentioned, we never had most states legalize spartans g sports gambling. 38 states and the district of columbia. you have espn bet now. what you are anticipating and betting on pro and college football between now and the end of the year and super bowl, is somewhere between $30 billion and $50 billion in sports wagering. it is mind blowing. >> it really is. we do stuff on "last call" all the time and i'll give three picks. why are you doing sports gambling on cnbc? a lot of us, patrick, and you write for "forbes" because there is an overlap. a lot of people who are betting on sports, also like to trade

stocks and trade crypto. it is probably a very similar mindset. if you disagree, tell us. >> no, you are absolutely right. the other thing and reason this has blown up is because of the tax implications. over $50 billion in tax revenue generated last year according to the american gaming association. the other issue is that teams and legals want this because of the fan engagement. we have been fighting the tv and hdtv and home experience and teams and leagues fighting that. it is easier to stay home and watch these things and how do you bring people in to the venues? a lot of the venues are building sports books to bring people out of the house off the sofa. it has boosted the level of fan engagement across leagues and teams. >> i'm watching. mike, i don't know if you are watching this, but patrick, i'm

watching because i picked them or part of the parlay. the cost of a pint of beer, whatever it may be. jets/browns last night. i'm sure a lot of people watched it outside of cleveland because they don't care about either team, but they bet on one of them. >> that's the point. i was in the same boat. i watched that game. i had no reason to watch the game. >> joe flacco, mvp. >> absolutely. would you have loved to have been in a bar in cleveland last night? all these leagues want to lean into it with the engagement and corporate partnership revenue generated. this is a new product category. for teams and leagues to engage with fans and corporate partners now seeing the benefits and revenue generated from sports wag wagering. >> patrick, i love to get an

economic footprint or size of that. what is the net take? we talk about the aggregate betting numbers. is 90% paid out to the winner so you have a 10% skim? you otherwise start to ask what's really the net loser in all this with the consumer spending category? where is the money coming from? >> there's no question the books are typically speaking able to generate 10% to 20% take at the end of the day of that revenue being spent by fans. you know, the one thing that concerns me about this is from the business side and what's great for fan engagement and generating more tax dollars. i always worry about the consumer responsibility and all of these states and teams which promote hotlines so people do not get out of their skis with the spending. that is my concern, the human element, of people overindulging

and getting into trouble. >> patrick rishe. >> green and red. >> green and red. i knew it. patrick, good luck this weekend. >> thanks. >> i appreciate that. coming up, will the energy markets have a demand problem in the new year or will global turmoil prop up prices? big questions for rbc capital's head of commodity strategy helima croft who joins us on set next. and as we go to break, here is a look at the s&p 500 owinnes and losers.

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good morning. welcome back to "squawk box" live from nasdaq site in times square. call it casual friday. santoli is not in a tie. >> one day a year, if that. >> i feel honored you are spending your casual friday with us. >> i didn't want to be the square who wore a tie. >> i don't know about you, but you are on air all day? >> all day. >> i'll do this show and my show at 7:00 p.m. i want to be comfortable. >> you are making me look like a slacker here. >> absolutely not. you got two beats. you got this and banking. >> private equity. >> i'll try to spark a banking crisis to get you back on air. >> thank you. >> you're welcome. let's check the futures. record highs in the dow and nasdaq and s&p are 13 points away? >> yeah.

>> we gained 13 points or more. we will close out or hit intraday a new all-time high on the s&p 500. the implied open is up five points. flip a coin. watch cnbc all day. let's check out oil prices. crude oil is on pace to finish the year about 10% lower. that would be the first drop in about two years. you have oil up right now a little bit. the graphic is year to date. it shows a slight drop. right now, oil is up .40% at $72. a lot going on. joining us with the issues in the energy markets for the new year is our friend helima croft from global heads of strategy from rbc. someone that makes me smarter on a daily basis. >> thank you. >> i just read your stuff and pretend to know what i'm doing. thank you.

>> thank you for having me. >> i learned from helima croft and others that things are calm-ish from the energy family. the energy side in the middle east. if israel were to go into lebanon or take action against hezbollah or things were to increase between the u.s. and some of the hezbollah agents in northern iraq or syria, what is the risk factor? >> there are three fronts to pay attention to in the israel-hamas war. a lot of attention on what is happening in the red sea with ships struck and deployments of u.s. forces there. the issue that i think everyone needs to watch is what is happening on the northern border. you had a number of senior israeli officials and someone like benjamin netanyahu saying if hezbollah does not pullback from southern lebanon, they will take military action and open up a second front. this is something the united

states has been working incredibly hard to prevent. great job. >> no question. he is the one that is on the plane doing all the work. >> he was the one who negotiated the israel-lebanon maritime boundary. he has been doing triple duty dealing with the energy markets to prevent another front in this war. we arewatching closely what happens. hezbollah is showing no indications they will pull out of southern lebanon. if there is one story to pay attention to as we head into the new year, i would pay attention to lebanon. >> i don't want to say the red sea is a red herring, but they are firing missiles and protecting the ships, god bless the troops, but i know two people army reservists called up to iraq and syria and in their mid-40s and they're going to syria. these are reservists. they will go as they are doing

their tour of duty. i wonder what is going on. >> people thought we were done with iraq wars. now we have a situation where we had multiple attacks on u.s. servicemen in iraq on bases. we have not had any casualties yet in terms of people injured, but no american service members have been killed. we are watching that closely. remember donald trump? that was his red line. we have to pay very close attention to what is happening and the u.s. has responded by attacking iranian-backed militants in iraq and syria. if you want to look at the escalation threat, that's another place to watch. ag again, it is not the red sea is a red herring, but any confrontation with the united states and iran is something to watch. >> what can you say about the markets looking through or attempts to look through the geopolitical issues not just right now, but look back at the

net impact after ukraine and the then, of course, the attacks by hamas in october? >> remember when the war started with russia with the run-up in oil prices? and we see significant russian reductions because we sanctioned russia. we disconnected them from banks. we made sure to keep the russian oil on the market. i'm not going to get burned banking on the disruption. i'll believe it when i see it. if you look at this situation in the middle east, i think it is far too soon to write off the risks there. we have a very well supplied market. u.s. production has had a fantastic year. brazilian production has grown. guyana. i think a lot of people are saying the markets are well supplied. i don't have to worry about this. >> do you think when you look at the 10% decline and this is the last show before the year end,

it is a time of reflection. do you think this is a story of the efficiency of the producers? you mentioned the u.s. and south america or is this a demand story with china and the slowdown there and inability to rebound from their experience with covid lookdowns? >> i think in the case of china, it is not that we didn't see chinese demand growth, but it did not meet expectations. the start of the year is the china reopening. we will have blockbuster demand. we didn't hit the expectation numbers. i think that is weighing on prices. i think high rates have been weighing on prices. we got surprised by the u.s. remember when ceos would say we're never going to see $13 million again. look where we are. the same are saying maybe we will see 15 million. that caught market participants by surprise. >> and brazil. >> and the americas. >> 84 million barrels a day. just joining opec plus.

>> right. >> guyana. it is not huge now. chevron buys hess for the guyana assets. is there a chance that venezuela -- the people voted that part of guyana is 85% of the guyana land mass. if you can't get the boats to the platforms, how big of a risk is that? is this just venezuela doing venezuela things? >> i think market participants given the acres are concerned. you talk to the administration officials in washington and they will say we have basically pulled back sanctions on venezuela. we are giving venezuela an economic lifeline. if venezuela were to do this, they would face enormous economic consequences and the u.s. is very committed to protecting the sovereignty of

guyana. not that we should be complacent, but in washington, they seem to be comfortable that this is not going to escalate. >> helima, thank you. happy new year. thanks for coming in. >> of course. this is a great show. thank you. >> thank you. coming up, when congress returns to work, lawmakers will face an agenda with very contentious issues with implications here and abroad. we breakdown the issues that matter most to your money next. remember, get the best of "squawk box" with your favorite "squawk pod" and listen any time. we'll be right back. rinary bout. i was 5...6 years of age and i knew i was going to be a vet. once alexandra called me to let me know that bank of america had approved my loan... it was important to me. we not only just provide the financing piece, we do everything that we can to surround them with the right people.

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welcome back. when lawmakers return from the holiday recess, they face a packed agenda including a potential government shutdown. jo joining us now is olivia. house appropriators don't have a top line to start with and looking at a january 19th deadline. what do you think they come up with by then? >> it will be tough. right now, you are seeing a pileup of items they were dealing with before january. they punted it until after the holidays. now they have about ten

legislative days to get the government funding done before they face a partial shutdown on january 19th and a full shutdown on february 2nd. time is crunching and appropriators have been upset they don't have a top line funding numbers. mike simpson was telling me before the holiday break that these bills take a long time to legislate. without the numbers, their staff is really put through the wringer in terms of the time crunch. that is not all. there is also a push to get supplemental aid to israel and ukraine which is jumbled with a push for border reform. >> you bring up a good point. two wars they are dealing w with in terms of funding and an election and issues that are polarized by the day. do they just kick the can down the road or does that create

more havoc with more stopgap spending bill for a year? >> mike johnson, the speaker, has floated year-long cr. it would have cuts built into it. you already have senate appropriators voicing concerns about the domestic spending cuts that could be around $70 billion. republicans would not be too upset about that, but there is also an element that relates to why speaker mccarthy was ousted. they wanted the 12 appropriation bills to be passed separately. if johnson goes with the short-term cr, he may risk even fl enflaming the right flank. they will not get the policy items which held up multiple appropriations bills which seven only have passed out of the 12. >> olivia, thanks for coming on.

it's brian sullivan. go back to the funding with the border at ukraine. go back to help us understand why this is not a border issue. we had 7 million encounters. the mayor of new york city and other mayors saying this is an overwhelming issue. the president said two or three weeks ago that we need to secure the border which implies it is not secure. why is this not a bipartisan issue? >> there's growing efforts in the senate and right now negotiators are working on a plan which we don't know a ton about because they have been tight-lipped. when the plan comes on capitol hill, various parties might start tearing it apart. there are concerns raised by progressives and the congressional caucus in the senate is not having a seat at the table and they are scared about the change made to asylum

processes and other sort of border issues. the biden administration has been facing heat in the polls how it is hais handling the bor. they know especially coming into the election year, they need to take steps to address it. they are more willing to engage republicans on the border policy. the question is will the senate republicans come out with a bill, although they say that is their red line with the start of the negotiations. you are having two very different interests saying we have a problem and they just can't reconcile the differences in between. >> keep kewe'll keep an eye on . thank you. the most important story of the day. the quest to dominate the chicken finger market. raising canes which may come to a neighborhood near you.

one right across the street from here. the ceo is coming up. let's hope he brings chicken. we're back right after this.

chicken chain raising cane's has big new year's resolutions for next year, 100 new stores across america, it comes as 2023 saw the creation of 15,000 jobs at the company and the opening of its flagship times square location, right about there. joining us now is a.j. cumerati, the co-ceo of raising cane's.

where areyou right now? we were hoping you would be here. where is a.j. standing right now? >> i'm right now in dallas, texas, where our main offices are. i'm going to be there tonight, i can bring some chicken fingers over tomorrow. >> listen, you guys do a great job. leslie picker was just talking during the commercial break, trying to explain the difference of the competition. i kind of think of you guys, i mean this as a compliment, a southern college football type thing. but you're also in times square, you want to expand, how do you expand and sort of giet out of that -- i think of let's have an adult beverage and some raising cane's? >> i think our roots are in college campuses. that's where we first opened our first location. honestly, though, we are everywhere. we are a global business right now, in 37 states, opened in 15 new markets last year. also in the middle east and

forf four other countries as well. the difference is not just the beverage or one meal location, we are indulgent chicken finger meal, that's the only thing we do. we stay focused on doing just that. in this business, honestly, balancing quality and speed is a very hard thing to do and many chains suffer with that. we don't. we're all company owned restaurants, so we can really take our time to coach, execution and do it really well, so we have become a good fan across everywhere. you talked about times square, that location is in fact going to be the largest grossing restaurant globally in the business. it is incredible the kind of attention and excitement we have seen there. >> you're obviously in this sort of fast growth phase of your expansion. 100 new stores, 12%, increase in the store base in just one year. but how through that are you navigating things like what's gone on with inflation costs? and then you mentioned hiring

15,000, 16,000 new employees this year, how are you finding the ability to attract and retain here with low unemployment? >> we have not been immune to what is going on in the world in general. however, when it comes to -- we took that head on, right out of the gates, 2022 time frame, we balanced that, we took pricing into account for it. what we saw in 2023 was largely a stabilization of wage pressures stabilized, our applicant rates, the number we're seeing has been up significantly. all time highs. and our retention, turnover numbers are the best they have ever been. we're seeing nice labor metrics and when it comes to -- 2022, we saw massive inflation in poultry costs. that settled down nicely. it turned the other way in 2023. as i look to 2024 and forward, i do see continued normalized inflation pressure you see

historically, but nothing abnormal i can see now. >> i'm looking at you here, you're at times square, a.j., downtown, and you're in brooklyn. when i do a search near cnbc's headquarters in beautiful englewood cliffs, new jersey, nothing comes up. when can we expect some raising cane's in the great state of new jersey? the garden state deserves it. >> we're in new jersey in three more months and ten locations in new jersey. we're actively searching. we want to be everywhere. we want to be a global brand serving the best chicken finger meals the money can buy anywhere. we're coming. close to cnbc and everywhere else. >> we love it. a.j. getting up early for us too out there in dallas. you got a long day, my man. thank you very much. best of luck to you in the raising cane's team. >> thank you. happy new year. >> thank you, happy new year. coming up, how a.i. is revolutionizing higher education. and did you forget about the

metaverse? well, it is apparently still out there. apple is about to enter the frontier already dominated by meta. we look at the likely battle coming up between the chte giants. "squawk box" coming right back.

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good morning. we made it! we did it! it is the final trading day of 2023. averages poised to lock in solid year end gains and the s&p, it is sitting on the precipice of an all time high. this hour we'll look ahead to 2024 including a comeback for the metaverse, tech giants poised for battle and for thieves, iphones have become the gift that keeps on giving. apple wants to change that. but will users actually step up and do their part? we'll speak with a reporter who spent a year looking into this story. the second hour of "squawk box" begins right now. hi, everybody. good morning. welcome to "squawk box" here on cnbc. as always, we're live at the nasdaq market site in times square.

exactly 7:00 a.m. i'm alongside leslie picker and michael santoli. joe, becky and andrew, you know them, they're off today. we're going to see if we can end the year on a high note. futures indicating we just m might. the dow and the nasdaq coming in at record highs. the s&p 500 is just 13 points from that all time high. so we can move up just 13 points today, intraday or close, whatever, we'll also hit a new record on the s&p 500. >> closing high. >> the closing high. >> intraday, 48.18. >> where are we now? >> 47.83. about, what -- >> making me do math? 48.18 -- >> 35 points. >> we care about the closing. intr intraday -- >> the closing is, yeah. bob pisani was saying, rare to have an all time high on the final trading day of the year,

only happened eight times. >> i think i read on stock traders almanac that, like, we usually -- it is in the script. i like to -- >> you're preempting. >> i do the teleprompter as a suggestion. there is words there, but they may get said, they may not get said. we may fall today. >> yeah. >> today is usually not historically -- >> before the end of the year. the santa rally, people tend to sometimes make fun of, but so far poised to actually fall into that category of a rally for the eighth straight year, which only happened since 1976. >> wow. >> so, eight years in a row of santa rallies, if, in fact, this trend continues an we don't reverse the last four days of gains and continue to -- >> thank you. apparently we have hard core end of the year market stats for you. all the major averages on pace for their ninth straight

positive week. that's cool. if the s&p 500 can stay, not collapse today, it will be the longest weekly winning streak in 19 years. >> wow. my whole lifetime. >> exactly. >> almost. >> almost. >> almost. >> 19 years. adult lifetime. how about that? >> yeah. >> there we go. >> looking at the -- it is like, one third of mine. looking at the entire year, the dow is up close to 14%. the s&p, 24%. the nasdaq is, like, listen, hold my beer, i'm up 44%. the nasdaq, the nasdaq 100, we got into this -- >> up more like 54%. >> yes. best year since 1999, but the nasdaq composite best year since -- >> 2003. >> is that it? >> yes, good cocktail party fodder tonight. >> superlatives. >> you can trick people. the best year for the nasdaq since when? >> i says nasdaq 100. >> nasdaq 100, brian.

>> 1999, the ndx ultimate party. best year in 20 years. one fing thingal thing, the dowg a closing high yesterday, the seventh time this month it has done that. when you're on a high and go up and you close at another high, you're at a record high. the s&p 500 is sitting just shy of its own all time high. anotherinteresting stat. according to cnbc's own bob pisani, since 1926, the s&p 500 has closed at a record high on the final trading day of the year eight times. could this year be the ninth? stay tuned to find out. after all that, here's where we stand. and i think everything is being driven by treasury yields now. the bond people tell you they run the show really over the stock people. either way, the ten-year yield, 3.88%. that's the number that has been moving the equity market. >> absolutely. higher today, but still, much

lower than where it was in october. among today's top stories, google agreeing to settle a lawsuit based on accusations it secretly tracked the internet usage of millions of people who thought they were browsing privately. it is unclear how much google will pay in damages, but plaintiffs had been seeking at least $5 billion from google. boeing is urging airlines to inspect 737 max planes to look for a possible loose bolt in the aircraft's rudder control system. boeing said all new 737 maxes will undergo a check before handed over to customers. several major customers said they don't expect any operational impact due to the checks. spacex lifting off with a secretive u.s. spy plane. the launch was the first for the robotic aircraft aboard one of spacex's falcon heavy rockets. this comes less than two weeks after china launched its space robot plane of its own for the

third time. now to frank holland with a look at this morning's premarket movers. frank, good morning. what's moving this morning? >> good morning. i love the casual look, by the way. the tie is just too much. you broke free. we're looking at a couple of things this morning including the vegas casinos following the release of november gaming numbers. take a look. this is the action for the casinos for the month. november, strong upside move for all three. las vegas sands, caesars and wynn. not a lot of movement this morning. we're watching these after the data was released. vegas casinos having the second best month ever, raking in over 1.3 billion. the formula one race one of the factors given the entire sector boost out there in vegas. all three outperforming the s&p month to date. we have a mover this morning, arm, the chipmaker moving higher in the premarket after closing above 4% yesterday. the chipmaker will be a supplier for microsoft's new a.i. powered

surface device. shares up 1.5% in the premarket. and we have to look at bitcoin. year to date, now trading just under 43,000. remember, today is the deadline from the s.e.c. for any filings or amendments to applications for a spot bitcoin etf. leslie, back to you. >> frank, thank you. joining us now for more on the markets ahead of the last trading day of the year, vince, happy new year, thank you for being here. we made a lot of the s&p potentially notching another record, about .3% from that all time high. but we got to give credit where credit is due, the magnificent seven contributing to something like 65% of the gains this year. so the rules of diversification not giving way to much upside. what do you recommend for investors as they're thinking about portfolio allocation for

2024? >> we do think it is time to see some broadening strength in the equity markets. the magnificent seven has carried the s&p to high levels here as we talk about highs at the close today. we think of the recent rally in small caps, if you look at the move on the back of lower interest rates, we think that sets the stage for a much longer rally than the couple of months we have seen and it is time for investors to be looking for active management and more broadening strength of the equity market and we're looking at smaller and midcap area. >> active management in the sense you think it will be more of a stock picker's year or we'll see a broadening out, rising tide lifting some of the stocks that hadn't necessarily done as well in the first part of the year? >> yes, so we begin to see the dispersions that we're seeing in returns. when we see the broadening of the market into areas beyond the magnificent seven and tech, that tends to be an area where active

managers can perform better. fundamental research, looking for earnings expansion, multiple expansion and we think for such an extended period of time here, passive strategies have done exceedingly well. allocating capital almost purely on the basis of market cap has been a very rewarding endeavor. as we transition to a new level of interest rates and we think about dispersions of returns and the different areas of innovation that management teams deliver to the capital markets now, we think the equities less broadly followed and that's not a very bold statement given the strength of the magnificent seven, so much of the market is not broadly followed right now. but looking through the equity universe, we're seeing interesting opportunities and they're juxtaposed with compelling evaluations. if you can do the fundamental research, find individual securities, we think equity investors will be rewarded for that effort. >> vince, maybe the standard

pushback against that idea might be, first of all, microsoft itself is basically worth all of the russel 2000 give or take. it is a lot of work to find the needles in the haystack in small caps, predictable story in the megacaps. if you were an ir officer at one of these smaller companies, the first question i might ask is why haven't private equity already bought you? if you're an attractive business, why are you still public and being neglected on the market? i wonder how you think about that. >> that's a great point. the strength of the magnificent seven is deserved on some level. we think they it continue to do very well. but when you look at market capitalizations of those businesses and think about return on equity or invested capital, it is not as compelling. it may be a lull of large

numbers dynamic, but when you get into market caps that are apple or think about the companies as a percentage of gdp and they're enormous. somewhat unprecedented. the smaller companies have had to earn their way through a difficult period. the covid gyrations and the inflationary environment that we have just been through and potentially under somewhat under control at this point in time. that sets up a really good framework for small caps. whether the self-help things like expanding margins by controlling costs or moving into adjacent markets and geographies or business units, i think private equity will play a role here. share buybacks may play a role. you don't see that as often in the small cap arena. management teams are downing a good job of getting out there. it has been a tree falling in the woods. i think this recent rally that we're seeing in the iwm and some dispersions of returns, it tends to set up a longer period of

outperformance than a couple of months. >> private equity has the dry powder. a matter of narrowing that spread in terms of the valuation of some of the companies are willing to accept for a buyout. vince, thank you. coming up, a.i. in the classroom. the pros and cons for students and teachers and the conversation over balancing fears of student cheating with the next generation of being well versed in new technology. we'll speak with the ceo of instruction. the story of how iphone thiefs are upending people's lives in minutes. stay tuned. you're watching "squawk box" on cnbc. ♪ when better money habits® content first started coming out, it expanded what i could do for special olympics athletes with developmental needs. thousands of bank of america employees like scott

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i'm a little anxious, i'm a little excited. i'm gonna be emotional, she's gonna be emotional, but it's gonna be so worth it. i love that i can give back to one of our customers. i hope you enjoy these amazing gifts. oh my goodness. oh, you guys. i know you like wrestling, so we got you some vip tickets. you have made an impact. so have you. for you guys to be out here doing something like this, it restores a lot of faith in humanity.

maine's top election official ruling that former president donald trump won't be able to appear on that state's primary ballot next year. in a 34-page decision, they wrote trump's actions around the january 6th riot and invasion of the capitol in washington compelled her to rule that trump was ineligible. her office said the decision wouldn't be enforced until courts weigh in. this follows last week's ruling from the colorado supreme court that concluded the constitution's 14th amendment prohibits trump from serving in office again because of the 2021 attack on the capitol. the u.s. supreme court is

expected to take up this issue shortly. while the fed was busy battling inflation, the price of several key commodities fell significantly in 2023. corn prices have fallen about 30% this year. wheat has seen a 20% decline. that decline for corn is the biggest in a decade. analysts point to easing supply bottlenecks and higher production. soybean prices have taken a hit, registering the biggest annual drop since 2015 with record supplies from brazil the number one exporter of soybeans. all this could change in the new year amid tighter supplies, export restrictions and increased biofuel mandates. corn traded above today's level at one point in 1996. this is what commodities do. the agricultural commodities don't trend higher over time. >> the farm land is growing. you have lower prices and deflation for the commodities, that can strain fathfarmers as as they're paying higher interest for their equipment and

land. >> here comes the kansas. >> corn, my ears perked up. i know corn. >> knee high by july, whatever they say. >> i went to the university of illinois, i know corn. >> in a corn field. literally in a corn field. when you mention corn, leslie is like this -- >> finally. >> put your ears to the ground, the story's in the soil. the big business story of the year, what else, the rise of a.i. artificial intelligence. it is not just a business story. it is also making big waves at education. and it is changing not only how students learn, but how they work. maybe how they cheat. tal talking about it a little bit more, the ceo of instructure. if you have kids, you probably know the canvas software for schools, many of us got acclimated to it during covid. thanks to you and your team for helping educate our kids during some tough times there.

how is a.i. changing, literally, everything because i can see great uses for it in learning and i can see some not so great uses. >> yeah, you know, it is a great question. it is one that educators have been asking since -- for the last year. and really initially started out with, you know, approach of fear, everybody is going to be cheating, i can't ask a student to write an essay question now because they're just going to use a.i. to generate it. i think the tide has shifted a little bit. and what we're seeing with educators is that they're really starting to understand that, look, when a student gets out into the workplace, they're going to be using this technology, they're going to -- we ought to be teaching them how to use it effectively, how to use it responsibly. and so we're seeing a lot of changes in how teachers are trying to assess learning and so there is a couple of areas where we were investing in, that we're

investing with partners. one is student helps. we announced a partnership with khan academy. rather than writing the essay for student, it walks them through the learning process. asks them questions. what key points do you want to make, what references do you want to use and it will help them write their essays. on the teacher side, this will open up a ton of productivity within the teacher area t. we're helping teachers write quizes. i want to ask a question about ernest hemingway's third wife, create a multiple choice question and have three answers within that. really take some of the work that has really been kind of mundane for teachers, and let the technology do that. student feedback is another area when they're grading papers, give them ideas as a teacher's assistant on feedback they can give, point students to places

within the course that they can find the right answer to a question maybe they got wrong. >> i believe if you're talking about hemingway's third wife, i think that's martha gillhorn. >> well done. >> i would imagine that a.i. can be used, let's be clear, to cheat. it can also i think be used to help catch students who are cheating, correct? if any students are watching out there, you got to know this software can probably also be used to find out that you are doing some things that are not so great. >> yeah. it is true. ultimately there is technology available that can detect whether somebody's using a.i. though, there are a lot of false positives that come up with that technology and it can be a little bit traumatic for a student that gets accused of plagiarism when they didn't use generative a.i. i think that's probably the wrong approach to how we look at this technology.

and educators were starting to look at it differently. it is a little bit like security, you know, if we just had virus protection out there trying to detect when bad software was in our environment, that's probably not the right way to do it. we should be looking at behaviors, employing the technology to look at how students are learning rather than just if they use this technology in an untoward way. >> steve, how does the utilization or potential utilization of a.i. change the cost complex for the education system? does it make it more costly or you think it helpsdrive more productivity in the teaching environment? >> i think ultimately it is going to drive productivity within teaching. i think some of the models are rather expensive today, but the costs are coming down pretty quickly. the -- i think it also provides an opportunity to provide much more equitable access for students. for instance, you know, in the past, that virtual tutor that we

can now provide with technology, that was available to certain socioeconomic bands, right, that could afford to send their students to a learning center or to pay for tutors. where as there is a whole part of the economic class that couldn't afford that. so i think it is going to really democratize education it , it i going to provide much more equitable access to education. >> steve daly, thank you. happy new year to you and your team. appreciate it. coming up, the metaverse is back. meta and apple ready to duke it out next year. we'll tell you what investors need to know. we're coming right back. >> announcer: time now for today's aflac trivia question. how many glasses of champagne and sparkling wine are consumed in the u.s. each new year's eve, according to wallet hub? the answer when "squawk box" returns.

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>> announcer: now the answer to today's aflac trivia question. how many glasses of champagne and sparkling wine are consumed in the u.s. each new year's eve,

according to wallet hub? the answer, more than 360 million. >> wine, not just champagne. we were guessing. way off. >> champagne and sparkling wine. >> wine, sparkling wine and champagne? >> 360 million. >> that will get you drunk. >> the population, think about what the population is over 21. >> that's only over 21s drinking. >> yes. >> that doesn't include beer, booze or regular wine. that's just champagne and sparkling wine, 360 million. that might be all at applebee's. >> i say 6 million. >> we had their owner on my show last night, we were talking about that deal they had here, he said he was sold out. >> amc up the street too. >> everything? >> yeah. >> we think about the soft landing thing. all right. we're talking about the real

world. let's talk about the fake world, the metaverse. remember that? supposed to be so big that i company called facebook changed their name. like the knight in monty python, it may not be dead yet. steve kovach joining us now. what can you tell us about apple's big meta plan. >> remember a.i., the metaverse. now we're talking about the metaverse again. apple is expected to launch the vision pro early in the new year, start of a new platform war like back in the old days of pc versus mac or iphone versus and android. you remember all the commercials. meta has a head start, selling headsets for the last several years including the new quest 3 which launched this fall and it appears to have been a really hot holiday gift. the best apple analyst out there, good at predicting what apple is going to release, he says in a most recent note,

500,000 vision pro units are expected to ship in 2024. that points to an extremely limited debut. only going tostart for sales in the u.s. only at apple stores, not third party retailers or online or anything like that. the price is going to be a huge factor as these two duke it out. meta's quest 3, $500, vision pro, just $3,000 more, $3500 bucks a pop. i used both headsets. meta improved a lot over the last few years, especially that visual quality, doesn't look as blurry anymore. the vision pro, it is next level, super clear visuals, hand tracking, can track your eyes, it is basically perfect compared to what a lot of meta is trying to do. and it has an app ecosystem. the vision pro can run all the ipad apps built up in a library over the last decade or so. and meta has the smaller app library, but still doing partnerships with big names including microsoft and mixed reality headsets still haven't

taken off. hasn't replaced our smartphone or watches or computers yet. that's the hope one day and especially apple entering this space could change it and spur others to give it another shot. but it is shaping up to be a battle at least in 2024 in this platform war apple versus meta. >> what are we doing with it? how far are we from ready player one? >> it looks similar. if you've seen the movie -- >> i read the book and the movie was not as good as the book, but, yeah. >> it is that concept. and it is are we going to be living in these gadgets forever? that's the hope. >> is there a functional reason why i'm going to pay -- aside from being an early adopter, i think it is cool, what am i getting for $3500? >> the visuals are cool. i used this thing. it is really cool. there was one demo they did that blew me away. court side seats at an nba game. it felt like i was there, sitting behind first base at a baseball game. it felt like i was there. that is cool. you can see this glimmer of

potential with things like that. but -- >> so now, okay, that's amazing. so theoretically then, i pay $3500 for these things, they make some deal with the nba. >> right. >> i can sit court side in -- i can buy virtual ticket, but it is the real game, live nba game, like watching the pistons -- >> they talk about doing this, by the way. >> there is a functional use and way to make -- and the football game. >> yeah. is it worth 3500 bucks? probably not. lots of functionality, it is ipad apps on your face. i don't know if that's going to be a hot seller. but that's what they're doing. >> fascinating. >> don't use that as your tag line, ipad apps on your face. >> i'm not an apple marketing consultant, but i would advise them -- >> they have a good marketing guy over there. >> don't use ipad apps on your face. >> that's going to be the sell. that's the challenge. how can apple prove they can do

it when so many others have failed? >> you just said, the other one was fuzzy. >> yeah. >> it is like lego world, right? we're living in roblox. >> like looking through a screen door. >> interesting. well, thank you. >> also, don't use that as your tag line. >> i'm not selling it. apple is. >> he's just the journalist reporting the news. >> like looking through a screen door. >> thank you. coming up, the biggest geopolitical stories investors need to watch as 2023 becomes 2024. we'll talk about the shipping disruptions in the red sea, russia and ukraine, tensions with china, and more. stay tuned. you're watching "squawk box" on cnbc.

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there are a number of global hot spots investors will want to watch in the new year. those include the middle east, where militants are using israel-hamas war as a pretext to ha harass global shippers in the red shea. joining us now is fred kemp,

atlantic council president ceo and cnbc contributor. good morning. i guess at any moment in history there are multiple crises and stress points in geopolitics. it does seem as if right now several things have piled up, biden administration heading into an election year. how does the administration, how should investors think about these things as a hierarchy of risks? >> so, first of all, i think you have to look at 2024 as a uniquely consequential year from a geopolitical perspective and from a perspective of major power competition. or in europe, war in the middle east, tensions around china and taiwan. and then fourth part to the biden administration is looking at incredibly closely which is the competition for the commanding heights of technology. not just artificial intelligence where we think we lead and continue to lead, but also in terms of electric vehicles,

batteries, solar, the supply chains where it seems like china has the lead. and then finally, very consequential election year that is going to have our allies hedging and our adversaries hedging, it is not just our election, which is fraught enough, but it is going to be one of the biggest election years of any of our lifetimes with 50% of humanity voting, 65% global gdp and the eight most populous democratic countries going to the polls. so, i don't think we have ever had this perfect storm of things coming together and the biden administration officials don't feel that they can drop the ball on any of these things. and even working on connecting the dots and figuring out what their strategy is for 2024. so we end the year in a better position than we're going into it. >> from an investor's perspective, you can argue, some might argue that, well, the russian ukraine war has settled into, you know, this kind of

stalemate mode and it is not something that is front and center anymore in terms of the economic or supply impacts, the israel-hamas, seemed like a flare-up we had to be concerned with, we put it aside. and then the in person meeting between biden and xi, china and taiwan stuff, so make the case that we shouldn'tfeel comfortable about those things. >> well, first of all, investors have to remember that we haven't predicted covid in 2020, we didn't predict the afghan withdrawal as being such a mess in 2021. without that, you don't have putin's invasion. i don't think you have putin's invasion ukraine 2022, also not predicted. nobody predicted hamas in 2023. so, first of all, you have to assume that you're not going to be able to predict what happens in 2024-25. this could be a period of volatility. how does this affect -- let's go to ceos before investors. ceos have to factor in geopolitical risk in a way they

never had to before. no one thought they were going to have to pull out their operations from russia entirely before 2022, but many have. if you're a ceo, for starbucks, looking at china, where you have 9,000 stores, your risk looks quite different than if you're apple where most of your iphones are being produced there and that looks unlikely to be a safe situation going forward. then for investors, you have to play themes. the u.s. is going to keep investing in artificial intelligence, investing in green technologies, clean technologies. one has to pick where you go there. in terms of china, yes, you're right, things have calmed down between the u.s. and china, but you also have it look at the slowing chinese economy. so, the multiples would say there is some great investment opportunities there, but there is a lot of risk there from economic -- that would be mied avira advice to play these things

separately. >> what do we do about iran, a key metric level, they hit the number i think basically yesterday or the day before. oil exports are -- they tripled, so just printing money, even though they're, quote, under sanction. they're using all that oil money to, of course, send money to hamas, and hezbollah, not just in the middle east, but syria and iraq as well. what do we do about iran? >> that's such a great question. without iran, you don't have what hamas is doing right now in israel. now, did iran order it? nobody seems to think so. but could hamas have done what it is doing, could the houthis in yemen be doing, could hezbollah in yemen, all of iran's proxies, none of this could happen without iran. what iran needs is a chaotic and

unpeaceful region. what you can do to tehrake iran is what the biden administration hopes to do, get the middle east normalization back on track. if you have saudi arabia normalizing with israel, if you have the moderate modernizing countries of the middle east showing themselves as a more attractive place to live, from terms of prosperity, in terms of freedom than iran, over time you win against iran in the same way we won against the soviet union. that's the view of people in the administration, view of saudi arabia, view of the people in the emirates. how you get from war in the middle east to that point is one of the most difficult tasks of 2024. >> yeah. as ever, i guess. plenty to think about. half of humanity voting in the coming year. fred kempe, thank you. >> thank you. coming up, the threat to your money and your digital life if your iphone gets stolen. after the break, we'll speak with a reporter who spent a year

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during 2023, journalists at "the wall street journal" reported on thiefs across the country using iphone pass codes to steal thousands of dollars from their victims. the year long investigation culminated in an interview with one convicted thief in a high security prison. here to talk about her reporting on the loopholes of apple security and what you can do to protect your own assets, joanna sterns, senior personal tech columnist at "the wall street journal." joanna, thank you for being here. congratulations on a fantastic series, the investigative series here. so, in your latest piece you interviewed aaron johnson from the minnesota correctional facility who was serving a 94-month sentence after pleading guilty to racketeering for breaking into and stealing iphones and the money there. were you surprised how easy it was for him to do this? >> i wasn't because i had been following this story for the year. as you said, this was the

culmination of that reporting. but i was very surprised when i first found out about this about a year ago. and i found out about this because i had heard from victims who said, i was at a bar late at night, very common story among the victims, somebody approached me, next thing i know my phone is stolen and the next thing i know after that over next 24 hours thousands of dollars are taken from my bank account, and i'm locked out of my apple account and i have no idea how this happened. and as we looked into this, we realized that these thiefs are not only stealing the iphones, they're stealing pass codes. somehow figuring out or asking even in some cases these victims pass codes. and that code, that four to six digit code you put in on the phone to unlock it when the face i.d. doesn't work, that can unlock your entire digital and financial life. >> it is amazing how simple it sounds with just four numbers or six numbers depending on what you have, apple recently announced a stolen device

protection program. doesn't it remedy the loopholes that you have been investigating? do you think it does enough to protect consumers? >> it certainly remedies a lot of the loopholes. the biggest thing that is happening. as i heard from mr. johnson when i interviewed him in prison, he is quickly stealing those pass codes, stealing that phone, and changing pree ing credentials i settings and locking people out of their apple accounts. then that he beats the mice to the cheese. he's quickly getting them out of their apple accounts before they can get back to their computers and use find my iphone to see where their phone is and lock it down. with this new stolen device protection, the idea is that a thief couldn't do that very quickly. they would need your biometrics, doesn't let you use pass codes anymore, you would need face, fingerprint recognition, to do that. on top of that, it would, in some cases, it asks for an hour

delay, so if the thief got your face and maybe holding you hostage or whatever is happening, they would need to wait an hour to get into that apple account. >> it seems like, it is interesting because aaron johnson, who you recently interviewed, kind of started out doing more traditional pickpocketing, but in today's day and age, it feels like the phone has more value to it than even a traditional wallet. >> absolutely. i've heard so many -- we compared this to the idea of somebody sort of looking over your shoulder at an atm and used to hear about the crimes far more often, ten years ago, even earlier than that. this is the modern day equivalent. our banks and our entire lives are on these devices in our pockets. i think that's my biggest learning from this reporting, sure there was some vulnerabilities in the operating system that was allowing them to happen there are similar ones in android. but these thiefs are really

going after the iphones because of the higher resale value of the phone. they take all the money out of the accounts, try to drain the money and wipe the phones and sell the phones. those iphones are worth more than android phones. back to my biggest learning here, our entire lives are on the devices and we need to protect them in a way we would really protect our accounts and not think about it is just the phone and the if the phone got stolen, everything would be okay, i would wipe it and i would have my security in the cloud. >> i would imagine just basic things, number one, use different passwords for key applications, correct? if you have the same password for everything, particularly your icloud password, because once you got the icloud password, then you can wipe the phone. you can turn off find my iphone. that would be, i think, to me the one password you better make unbreakable. >> yes. and you're hitting on the exact key to this crime. they were using that pass code

to change the apple i.d. password. and that was the vulnerability you were talking about here, because with just that pass code, you can change the apple i.d. password. apple doesn't ask for a previous type of password, and so that password and that account, you're right, brian, many people could be, some of us, store our passwords with apple's key chain, icloud key chain. so if you're able to get into that apple account and change the password to that apple account, it is a free for all. you got access to all the bank accounts, all those types of venmo, whatever you kept in there, email, et cetera. so, you got control of all of that. one of the things we have suggested throughout the year is using a third party password manager. and absolutely using strong passwords in those accounts. >> yeah, because the other side of that is just forgetting all the different passwords that you're using for all the different things, speaking from experience here. thank you, joanna, really important reporting and we

appreciate you coming on to talk about it. happy new year. >> happy new year, guys. thanks for having me. coming up, who won holiday season retailing in 2023? and where should investors look for leadership come 2024? oliver chen joins us next with a year year-end retail wrap. stay tuned. yoreatin"sawbo ou' wchg quk x"n cnbc.

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for a check on the retail sector including who did best this year and what we should expect next year, let's welcome oliver chen. td cowen senior retail analyst and a professor. oliver great to have you here. numbers are settles out positive but a modest year in aggregate spending. interested what you think the key themes are out of this season and what value hacking is especially. >> happy new year as well. great to be here. what we see is a customer focused and value and getting dealing and value hacking. what we mean a customer trying to trade up and trade down. for example, buying private label in certain commodities getting great prices and trading up on our do-it-yourself methodology. the consumer is looking for value. that's what's really worked. retailers like walmart, grocery outlet and costco, those are big winners. we expect the trend to continue.

our top idea for 2024 is walmart, in addition, thinking about artificial intelligence, marketplace models and digital advertising. that will be a key theme, too. walmart in both buckets. value-centric retailer as well as a tech company. >> sounds like from an investment management perspective saying customers are doing a barbell. right? optimizing performance of a portfolio things you buy by getting value where you can to fund more expensive things that are higher value in there. walmart you say is still a top idea, even though, i mean, it sort of did build up a pretty good premium valuation-wise at certain points in the past year? >> we're excited about the next chapter and living in a world of consolidation where big is getting bigger and walmart funded lots of artificial intelligence, and fulfillments in supply chain. that's important in terms of the infrastructure for what's

happening going forward. also, we think about walmart, plus curbside pick-up. that membership program is important, and we look forward to what can happen. the consumer has more money and capability to spend on consumer discretionary items. that will be a margin bent for walmart as well. also we like beauty and wellness. top idea there is ulta. beauty should have another great year as many consumers consider beauty an essential good as well. >> you focus also on store traffic, on physical store traffic. feeling as if, i guess, it's a key differentiator or tell in terms who's got what. who are the beneficiaries of those trends? >> yeah. we're going to have a tough-to-find. traffic flat to up next year at a very low rate. however, as we think about next year, units, units and units will be the key driver. again, we like walmart and we like costco.

costco's been another great idea focused on value. the membership renewal rates have been tremendous. also, they have a very good private label as many of us know. kirkland, and legendary supply chain in terms of their merchandizing ability across food and others. so costco and walmart will be traffic winners as we look ahead. it will be something to monitor. we expect it to be fairly volatile. whether a factor unfortunately geopolitical issues have been a factor with traffic and people going back to stores. we'll have to watch for that growth. the consume sir at a crosswinds. on one hand unemployment's very low and they're spending power. also the wealth from s&p 500 performance, but consumer confidence and inflation, those are negative factors that we continue to watch as well, michael. >> yeah. so some signs of fatigue here and there, but basic inputs look like they should be supportive, i guess, a while longer. oliver appreciate the time this morning. thank you. >> happy new year. >> you, too. coming up, the ipo market

creeped a little bit into gear this year. what should you expect next year? we're going to talk about that and much more as the final hour of "squawk box" rolls on right after this short break at 7:56. we'll be right back. ( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo.

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good morning. the bulls stampeding into the new year. major averages at or near record levels. but will all be smooth sailing in 2024. global risks to the market. malt hol hot spots in the tear. we'll talk with commander james stavridis. >> and will the sun rise again for this sector? "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm leslie picker along with mike santoli and brian sullivan.

joe, becky and andrew are off today. the final hour of "squawk box," the final "squawk box" of 2023. and u.s. equity futures this hour not much movement. s&p and dow still hanging in there in the green. nasdaq implied to open in the red. about five points lower there. treasuries, selling off as well. yields higher across the board. ten year currently at about 3 point 9%. energy prices, crude in the green again today after having sold off about 10% year-to-date. natural gas, leaving little pressure there. down about 0.08% currently. check out on bitcoin as well. up about 0 p.9% but year-to-dat gains 160%. much of that baking in potential approval for bitcoin etf, which

generated a lot of hype in the segment this year. >> for sure. nvidia, one of the biggest stocks stories of the year creating hype and excitement. frank holland with a look at chipmaker as part of today's "morning movers" good morning. >> happy new year. nvidia moving higher on a game chip in china with export controls. rts 4090d slower to follow regulations. and placed on a list of u.s.-made chips that could not be sent to china. leverages a.i. to improve performance. it's up. year-to-date up 240%. moving on. another chipmaker, moving higher in pre-market closing above 4% yesterday. upside move partly on the news the chipmaker is a supplier for microsoft's a.i. powered service device. shares up 1% now. a.i. enthusiasm. see a theme here. powered the crip etf to more

than 70% higher this year. the best year since inceptionnv for smh chip index. back to you. >> and responsible pfor close t one-third of the -- >> you don't want to not have this portfolio. >> didn't have it a year ago. >> exactly. >> you did not want, to not, not have it? >> right. triple negative? >> follow it around in circles there. >> didn't want to not, not have it. as we wind down the invests year what were highlights, lowlights, more importantly expectations for next year? welcome in the president and cio of advisers asset management, cliff, if you had to say what may be the biggest surprise, it was -- to you, for this year, what would it be in terms of the

market? >> i would say where we had it wrong midyear was expectation that the economy would slow down a lot more than it actually did. obviously we saw reacceleration end of the years. quite a surprise leading 500 points leading index and under estimated what the consumer had, excess savings and locked in mortgages at 3%. increasing borrowing but we see it on the rise for '24. >> the federal reserve obviously, that had to be one of the biggest stories of the year, just this last month, whatever you want to call it, pivot, flip-flop, whatever it may be. you note, history also notes that sometimes when you think you've got inflation beat, it rears its ugly head again. do you think inflation is beat, and if so, or if not, how does that play into your interest rate predictions? because interest rates do appear

to be driving the equity market. >> yeah. this will be the third year in a row where the market's set up for expectation of a pretty aggressive pivot to lower rates, and i don't know that this third time will be a charm. you know, i think here inflation, depends how you depend beat. if getting to 2% means beat, the answer is no. under almost 2x that level and a lot of dynamics going on in our view making inflation stay sticky, and that so-called less difficult, a difficult challenge for the fed. so a little surprised that the fed was so dovish in the tilt. allowed the market to run the way it did. we're sitting here in the fed looking at optionality and game theory. why would we want this stealth easing going on when, again, history proves inflation can come in waves. a lot of dynamics that make it sticky. perhaps we're set up again for a third time, for the market to be

disappointed in the expectation that the fed might not move so quickly and so forcefully. >> i guess countering that, cliff, would be that history says that inflation can come in waves based on effectively one period of history which is the 1970s, and they're confident that the down side momentum in inflation seems like it can be trusted for now. i guess also, you know, the fed itself is not projecting we get to target until more than a year from now. so it seems like there's leeway with short-term rates at five and three-eighting to allow rates maybe to ease back if you get incremental progress towards target? >> yeah. i just think, mike, that powell, being a student of history, you know, looking at the stop and start of the '70s. yes, not a lot of data points there. i just think the risk of allowing -- the risk in this last time they were, they were, talked about transitory. too late.

to be too soon would about double error here. i think what's the rush? you know, they have the ability to drop rates when they need to. again, a lot of dynamics here. onshoring, reshoring. we have housing, saw numbers this week. housing prices are heading back up because mortgage rates are about where we started the year actually. rates plummeted. ten year is where it was when we sat here a year ago. where it was when we sat here two years ago. i think it's a little too early to drop the rate on inflation. we're not talking '70s inflation. 3%. you know? by the way, if it was stable and we were comfortable it was stable, that's okay, too. so we'll see how the fed plays this. they really want to get it to 2%. you know, again, i think that pivot that's priced in is seemingly a little too aggressive for us. >> cliff, what do you think be the key culprits for the stickiness in inflation? is it wages? is it what's going on geopolitically? i look at something like housing

and mortgage rates are down quite significantly obviously as the market rates have followed potential for a fed pivot. there is good news on that front, but obviously there are areas that, you know, you have concern? >> yes. it's really, the fed can destroy demand. at the same time some of the unintended consequences really they destroyed supply. particularly in housing. it's been talked about all year. after sitting on the 275 mortgage, likely to not sell. and reload into a 6% 7% mortgage. still have a shortage of housing in the market. you'll note as rates came down most recently, housing activity is picking up. yet again there's a supply demand imbalance. same true in labor. supply demand and balance. two-thirds of inflation, those two categories. add other the other things mentioned. reshoring, deglobalization or so-called slowgoinflation.

hyped up for inflation and we're not saying it's going back to 5% but could hang out at 3% for quite a while, and if you look at inflation regimes that are around this you know, moderate above trend inflation, you'll see that creates a headwind for pe ratios, alteration stocks and certainly bonds. what's normal on a ten year? look back in history, it's typically somewhere around, you know, real rates, 200 basis points plus inflation. so if you're 2% inflation camp person, or a 3% inflation camp person, that's going to cut the range on the ten year between 4% and 5%. by the way, that's normal. what we had in the last ten year was the abnormal with the fed's heavy fall on the market. >> s&p 500 up 14% this year. pretty good. by the way, one 6of my predictions -- >> it's down. >> thank you. it's early. two, three-hour shifts. appreciate that.

up 25%. that's not normal. that's a darn good year, cliff. are you anticipating another year like this year? expecting an upmarket next year? maybe a down market? >> i think a little roller coaster if we're right and the economy slows. we think there is still a probability, a recession is higher than not. certainly slowing coming. notwithstanding what we just talked about. easing conditions. creating a little headwind. we see a trend broadening out in the market continuing, because what you guys talked about. a.i. craze and nvidia in prl are ripped. mike, maybe you're not wrong. just went up 15% today. moving so quickly. but it's ripped. the rest of it's beginning to come up. you can see as the market felt stabilization, where the fed's done and maybe lowering rates, you see different sectors now catching up and performing. we think that will continue. a little bit and probably continued rally.

what history tells us. again, if we're right, slowdown puts head wwind on the market. wep we soo posee a possibility of pivot. and focus on sectors now to catch up. where we think opportunity is for 2024. >> cliff corso. advisors asset management. appreciate you joining us on this final trading day. great advice, insight and thoughts. watching the fed and everything else next year. happy new year. >> happy new year. coming up. escalation risk in the middle east. the war in gaza attacks on ships in the red sea. airstrikes in iraq. will there be a need for even more military action? admiral jame stavridis gives us scenarios when "squawk box" returns. enges.

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welcome back to "squawk box." the u.s. military is reportedly trying to convince shippers to

sail through the red sea despite ongoing attacks by iranian-backed houthi rebels. the pentagon is speaking with companies on a nearly daily basis to get a sense of their needs and reassure the international community is there to help with the safe passage. joining us now with more on the rising tensions in the middle east, retired u.s. navy admiral jamesstavridis, global affairs advice chair now and nbc news chief and national analyst. thank you very much for being here, james. so what have you made of the current situation in the red sea? why don't we start there as we kind of assess the overall safety concerns as well as the potential for more commerce to be diverted around the longer route? >> yeah. start with a little context. the red sea is the size of the state of california. it's huge. at the very top of it, of course, the suez canal. you probably remember, leslie, a couple years ago a tanker got

itself wedged sideways in the suez canal. reverberations through global supply chains were immediate and very dangerous. so if the houthi rebels actually cut off the red sea and shipping refuses to go through it, you've got a big global supply chain problem. drive prices higher. particularly oil prices. so the business context is very significant here. in terms of what's going on, the good news is you've got a coalition of ships that are patrolling it. shooting down drones. et cetera. but it's a huge area. so even if you had, say, a dozen warships, again it would be like patrolling california with 12 police cars. very tough military problem. final thought here, leslie -- ultimately, playing defense, just having those warships out

there as there is probably not going to solve this. going to take action, go ashore go after the pirate camps, the houthis, it's what we did ten years ago off the coast of east africa with somali pirates. these houthis funded, trained, organized by iran, even more dangerous. >> yeah. what does that mean going on the offense there? especially as there's growing concern about direct conflict between the u.s. and iran? how long can we see these just overall proxy attacks, proxy militants, continue without their being more of a contingent effect? >> yeah. you've identified the exact conversations that are happening right now in the white house. they want to, on the one hand, avoid widening this into a war with iran. distinct possibility. if you go on the offense and start blowing up these camps established and funded and trained by the iranians.

that's one end of the spectrum. on the other hand, my view. you simply can't allow this to go on, if global shipping is going to stop using this critical path. so i think ultimately the administration is going to have to make offensive moves, striking against those camps in the southern part of the arabian pa nieninsula to the right of w you're showing the graphic on the map. >> admiral, brian here. say something probably sound gross but i think true based on conversations i've had with people in d.c. all of these things people might agree with you on but also the administration has an election in november. they can't have oil and gasoline prices spike. i know it sounds a little gross but you must agree, that will go into their thinking on how to react? if oil goes to a buck ten because year going back to iraq again or directly hitting iran that is a non-starter out of an election. >> indeed it is.

let me add another thought to that, brian. it could be strikes coming from hezbollah to the north of israel against israel. that would tend to draw the united states into this crisis. so it's not just what's happening at sea. and, third potential scenario to worry about, if iran ups the game against our troops, and little known to americans, we still have several thousand troops in iraq, hundreds of troops in syria. iran has been launching strikes at them as well. so it's a very difficult political calculus for the administration, and i think you're correct, brian. they're going to stay on the side of being pretty conservative, doing all they can to contain the crisis. i'll close with this -- >> admiral, on that note, you brought it up. i mentioned it earlier in the show and tweeted about it as well. i have two people i know in new jersey that are being, they're

army reservists. one's in mid-30s, called up in january. i understand a location they're going but going to syria and iraq. these are 40-year-old army reservists, professionals, who, what are they doing there? that's something we need to be concerned about? is that a regular rotation, do you think? or to your point. when i heard my friends are going to syria and iraq i'm thinking what the hell's going on here? >> yeah. yeah. we, again, thousands in iraq. hundreds in syria. it is a regular rotation. a lot of it has to do with special forces that are doing three things. training the iraqis so that they can defend iraq against syria and against particularly islamic. number two, going after remnants of the islamic state and number three working with some coalition partners in the civil war in syria.

it's little known. it's dangerous work. to the conversation we're having here, it could be a place that could ramp up. so i know they're going very bravely to do their duty and we should all appreciate that. >> yeah. absolutely. brave indeed. admiral, because this is our final show of2023, i want to end this segment on some positive news. you recently wrote an opinion piece for bloomberg touting the china/u.s. military hot line restored after about a year. why are these communication talks between militaries important? >> they're so critical. and three quick reasons. number one, tactically, when ships or aircraft are maneuvering together in the south china sea far better that the militaries can talk to each other and diffuse any incident. secondly, big u.s. carrier strike groups through the south

china sea can be the subject of a phone call between leaders. third and finally, strategically, it is a good thing when our chairman of the joint chiefs general brown gets to know his opposite number in beijing. when i was nato commander i often spoke with the leader of the russian armed forces. we were able to diffuse a lot of crises before they really got started. this is an important, positive development, and i agree with you, leslie. it's a good one to end on as we head into '24. let's hope it's a good year in geopolitics. >> oh, yeah. an election. taiwan. we have other training issues. >> haven't even mentioned ukraine. continuing to be a real challenge. >> absolutely. keeping an eye on it. admiral thank you very much for helping bring sense into the very complex and concerning world we're living in. >> you bet. thanks. >> thank you. coming up, will the sun

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lovely scenes there. people ice skating. at least trying to here. happy friday, everybody. welcome back to "squawk box." as you know most renewable energy stocks and investors had a dismal year this year. high rates and environmental opposition lower natural gas prices. you name it. it largely hit the industry, but there is some hope for investors. by the way, not least of my core predictions for the year, solar stockless outperform the s&p 500 next year. pippa here to tell me why i'm right. >> well, brian -- >> he hates solar. >> i hated it when it didn't make sense. now it's cheap. >> get to that in a minute. start, the last month solar stocks rebounded on expectations the fed hit it, and closing out a third year of losses hit by higher rates. ishares global clean energy fund down more than 20%. seeing their largest outflows since launching 15 years ago. 2023 also saw record solar

installations. how can both of those be true? residential consumers are more price sensitive. higher rates have put a damper on demand, but utilities are still building out the green grid and investing in solar. looking ahead, analysts say to stick with the larger players. goldman and cowen like first solar and shoals technologies. jpmorgan pointing to tracker companies array and nexttracker. think about renewables solar typically comes to mind. there's a lot of other ways to gain exposure including electrical equipment companies that bernstein calls picks and shovels of the energy transition. that means quanta services and acom hovering around record levels and jacob solutions and eaton. not only do you build solar wind themselves but you have to connect them to the grid. >> what? >> that's where a lot of these other names electrical equipmentmakers come into play. >> if only you could get a power line built in america. right?

just, you build this giant solar farm, but then actually have to get the power to the people. trying to do this in texas and new mexico and get it to arizona. nobody wants it. >> well, the permitting process, you know better than anyone, is incredibly challenging. now another headwind. interconnection cue. before one of these projects is then hooked up to the grid you first have to submit a study showing what its impact will be. that backlog in more than four years. it's doubled. >> doesn't that almost weaponize it like the environmental movement? they're the ones that will often submit these blockages on renewable energy projects. because the power line goes through the home of the grouse or whatever it might be. >> a low barrier in order to but put one of these connects into the interconnection cue and they want to hold their place in line and it bogs down the process. movement on that.

your point, permitting a transition line every jurisdiction it passes through has to get approval. different for a pipeline. if you have industry stakeholders, nobody wants it in their backyard. moved from nimby to banana, don't build anything near anything. prevailing ethos across the country in cases. >> and cowen likes -- a reason i predicted -- not naming stocks. not mine. you mentioned a counter report talking about utility scale solar versus residential. that's the difference, right, pippa? if the picker family wants to power their tesla, model s, whatever they're driving different than solar farm in a neighborhood. cowen likes utility scale which can get funded? >> exactly. there is that end to that and the burden isn't on the picker household alone. >> why are we picking on the

pickers, by the way? >> a bigger household, light bulb out. only takes an incandescent bulb. >> and here to note -- utilities, they also have consumers that are companies. think about the tech companies building these datacenters? the lowest hanging fruit for companies that want to cut emissions is green power. there is steady demand there. for utilities they still have that customer, can pass along the higher costs. for a consumer, might be more price sensitive say, i'm going to wait for rates to come down before i decide to put panels on my rooftop. >> that utilities gets tax credits and the picker family wants to do the right thing. >> right. >> if you lived in california, you would get less because now you can't sell a bunch of energy back into the grid? >> look what'seds with e.d. sales. sputters, have grown but actual growth levels are --

>> threw it under the bus. tried to put in the wrong light bulk and blew a fuse in the house. >> very confusing. >> change of life in the picker house, see you in the 11, the 1, the 2, probably last call. coming up, venture capitalists sitting on a lot of dry powder heading into 2024. which sectors are right for investment? we'll have that story when "squawk box" returns. what was my ambition starting out? survival. >> i love the word ambition. >> ambition is passion. >> it's a key ingredient of graceness. >> to me ambition is being undaunted by the impossible. >> i'm ambitious for the nation. i'm ambitious for its people. i'm ambitious for my people. >> my ambition has always been to seek the truth tornlgts learn as much as i possibly could. >> to make an impact. >> i believe in dreaming big. i always have. >> ambition, show radical cuts. >> ambitious --

it's got america written all over it. >> ambition is the foundation of capitalism. >> i wanted to do great things in this country. >> my ambition, do very well in business and take those profits recycle back into society to try to make the world a better place. >> everything can be a reality. >> i see am addition -- isn bionny ways humaamti what drives the world.

welcome back to "squawk box" on cnbc. the futures little change. s&p 500 indicated up a couple points. 13 points from a new closing high. that was set back in january. early january, 2022. the dow is already at a record, records this month. up 22 points. nasdaq still below its november 2021 record high. the composite is about 5 now. check out this chart showing s&p 500 equal weighted version of it. most of the year big divergence into november getting attention. seven stocks versus the average stock. look at the comeback in the last month and a half or so. now have about a 12% price turn for the equal-weighted s&p 5 hp.

decent year turning in the same direction even in s&p is high, a much bigger appreciation this year. and 2023 a tough year for start-ups and vcs. remember the implosion of silicon valley bank? what's next? julia boorstin joins us with a look. you would think done better given what we talked about with publicly traded magnificent seven comparables in the stock market? >> well, a lot of challenges in 2023. in 2024, vcs and start-ups hope for a rebound both in terms of investments and in terms of ipos after this year's tight ipo market and major decline in vc investments. in addition thog that closure's silicon valley bank, thousands went out of business. crunch based forecast vc investments slowing in the fourth quarter ending what they project will be the lowest year for vc funding since 2018.

a 39% decline through december 21st. declining to 462 billion dollars invested worldwide with cutbacks across all funding stages. no surprise. a.i. bucked the trend with a 9% increase in investment bolstered by big checks written to openai anthropic, and others. battery tech companies also marked gains while web 3 fintech and ecommerce saw big declines in investment. next year v c fund-raising is expected to increase to a level comparable with 2020 according to pitchbook. investors have plenty of dry powder. more than 4,000 funds raised since beginning of 2020. lower valuations seeing now may look to investors like a good opportunity. this according to pitchbook, also predicting the number of vc firms will likely wane over the next few years. pitchbook and crunch base return

are some ipos bun but investors focus on growth. close to 1,500 companies with valuations of $1 billion or more a big backlog of companies ready to go public. >> leslie? >> julia, that rigid focus on profitability over topline growth that's existed much of the last two years and also psychology component. executives didn't want to be that company that went public right before there was kind of a recession. in the minds of a lot of start-ups, advisers, at least the beginning part of the year, but now that the recession kind of seems further and further on the horizon, not as eminent, perhaps. does that kind of change the equation psychologically for a lot of executives in making their vc decisions, ipo decisions? kind of given what's going on in the macro backdrop? >> i think it does on all of these factors. everything makes sense you're

saying. the ipo market we'll see really ma sure, very large companies. like stripeage. those will go public in 2024. but there was a phase where companies were going public before they had reached consistent profitability. i think those years are really gone. i think now the companies that are maybe not fully profitable or don't have such a clear path to sort of sustainable profitability, those are the ones that will hold off. an interesting year this past year in terms of access to capital. a lot of start-ups were very highly involved at silicon valley bank. a lot had a hard time raising rounds and a lot raised at lower value aces. i think we'll see sort of a shakeout and investors both in the public and private markets are really going to be focused on quality now. >> yeah. absolutely. other banks trying to pick up that business that silicon valley bank lost, but that, of course, takes time to ramp up as well. julia, thank you.

joining us now to talk more about the ipo landscape in 2024, nigel morris managing partner of venture capital from qed investors, co-founder of capital one. nigel, great to have you here. just to pick up right there. i mean, even though the ipo market has been largely closed for the past year-plus and as a matter of fact really peaked almost three years ago in early 2021, private companies continue to grow and develop. so presumably there's a bit of a pileup of companies that are relatively prepared to go. what do you expect for the coming year? >> i think that julia summarized that incredibly well. we are going to see the backlog start to be worked on as we go into '24. imy a micro and macro to think about. does the fed move dropping rates? do ipos that went public last year and this year and coming

into '24, how well do they do? that's the macro environment. the micro is you know, how many companies are there that have got sustainable earnings, do have markets that are big enough? are going to be able to show profitability? have real governance in place? and how many of them are going to be around as we start to tee up '24? there's a huge backlog in the fintech space. julia mentioned stride, and a number of others in the pipeline. >> i know you do focus on fintech. good to have you here, because i say in a tongue and cheek way that fintech is not really an industry. it exists and almost everything is fintech. naz dek is fin tach, and you talk about fast-growing applications in financial services, digital financial services, what seems most right? that was a really classic, you know, ipo boom time, area of the

market where it was totalable addressable market that's huge. everybody moving to digital. that's all you needed to know. what arethe standards and thresholds now for successful 23 fintech? >> those things hold. entities that could be in that pipe but very much beneficiaries of that massive shift to digital from an lalog that occurred durg the first periods of covid. you're talking about embedded finance incredibly powerful. the next three to five years we're going to see so many businesses clunky and analog filled with friction with lack of transparency. those will become digitalized and moving online. as they do, there will be opportunities for fintechs to offer insurance products on a defendant very vote basis offering payments and lending. that is incredibly powerful as our economy digitalizes across the board. in that digitization

opportunities for a.i., of course, and massive productivity gains. i think the opportunities are right. we're looking at fintech across the board representing 245 billion in revenue. on a base of financial services that's insurance and banking of $12.5 trillion. fintech at this point is only 2% penetrated into the overall market of financial services. >> all right. plenty of things coming together in that area. nigel, thanks sayfor the time. appreciate it. >> appreciate it. thanks, bye. coming up, congress not giving itself a lot of time to reach a spending deal when it returns in the new year after the break talking about prospects for a deal or -- kicking that can down the road. speaking of kicking things, don't kick that. a very expensive, very wonderful, what is that? crystal? that is the ball that will drop to welcome in the new year. mike i know you're close to

that. that still was a -- >> waterford? >> i'm not that close to know who made this one. >> different every year? >> typically it has been -- >> that's it. 2024. not ere yetht. short break and then back to talk more about it. "squawk box" will be right back. n to get to this milestone. the new york stock exchange is a symbol of what america is all about the potential of an american dream. it is day one. a lot of work has happened to lead to this historic moment. the only way you can move a society forward is a true expression of freedom. ♪♪

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beautiful shot of the capitol. the white house. washington monument in the background. that's where all the money is. all right. congress is under pressure with a looming government shutdown. our next two guests, or guest, we'll see, experience on the stakes of capitol hill. welcome in kay bailey hutchinson. former governor of texas and hoping to get heidi hieitkamp a well assuming we can get technology to work. and the stage is all yours. do you think this congress will be able to get some kind of a spending deal done when they return in january? >> brian, i do think so. there are a lot of concerns. there are a lot of disagreements. that's for sure, but i do think

they will. they understand the importance of trying to have continuity, certain until end of the fiscal year and i think the disagreements are real and hopefully there is compromise in the wind. >> i think the amazing thing, and leave us with a little optimism, senator, that, you know, there's a few people in each party and in each chamber, who get all of the attention. right? and i won't name them, the left and right. tend to get them in all the soundbites. but there's 535 men and women in congress. about 525 of them just sit and do their jobs quietly. they're the ones that are able to generally get these kinds of deals done. so even in this hot-tempered sound bite-driven environment, do you think cooler heads will prevail? >> yes, i think so. and i think you saw that beginning to happen at the end. especially at the negotiating

group on the u.s. security at our border. they worked really in intense negotiation both trying very hard to come to terms, because we do need to fund ukraine as well as our own border security, and then, of course, israel, with what it's going through and iran popping up. i saw general, i mean, admiral stavridis a few minutes ago on your show talking about all the hot spots, and we need to get a budget. we need to have a firm, all the way through the fiscal year funding our defense, and funding our technology innovation, which is a concern to many in the tech community. so there are a lot of issues that all come together to fund our government, have stability, secure our border, help ukraine, and the whole middle east quagmire, and i think our -- our

members of congress are up to it, and i think it's time for everyone to come together and say, we can't get everything we want, but we do need a new direction here. >> the border issue obviously. the crisis, is a humanitarian issue. there's smugglers, there's human trafficking. by the way, the by the way, the smugglers in mexico, a lot of these people are paying. they're paying smugglers to bring them from west africa or wednesday. they're probably making billions of dollars. drug gangs and human smugglers are getting rich off human misery. the mayor of new york has said, we have a major crisis. we can't feed -- we're running out of housing. it's getting cold. why isn't this more of a bipartisan issue? i'm truly vexed, senator. i don't mean this in a weird tv way. i'm truly vexed to understand why this is not more of a bipartisan issue when we're talking about women and children and single men being smuggled across the border in numbers that would make it larger than

26 u.s. states in just two and a half to three years. >> it should be bipartisan issue, you're absolutely right. it is a bipartisan issue that america has sovereign borders, that we know who is coming in. we are a country of immigrants, but we need to know who's coming in, and we need to be able to absorb all of the needs of people coming in. and we need to have, especially, we've always talked about the h1b visas. we need the working class and the educated class to come in and work with us. that's why we've done so well in technology innovation and in keeping our economy strong, even in the headwinds that we have seen with covid and now the uprising of war in europe as well as in the middle east.

we have had an economy that has really been strong and survived, but we need to make sure that we are doing everything to keep our borders secure as well as help the allies who are fighting for their own border security and the security of europe. >> yeah, and we need to make sure that the people that are coming across have food, shelter, a place to sleep, they've got ways to educate their children. the city of new york and chicago are begging for federal government help because of this crisis. we do have senator heidi hide camp from north dakota. the internet signals in williston, senator, dial-up. >> this was not my fault. we have great internet. hey, kay, how are you? great to see you. >> you know i say that with love because i love williston and all the people in north dakota. you're getting two and a half hours of sunlight a day after all. should be working well.

i don't know if you were able to hear any of what we were talking about, heidi, but we said, will we get a spending bill with all the sound bytes? will we get a spending bill in the new year? >> you're going to have to get a spending bill. the question is, will you get a spending bill that is bipartisan that shows that congress can actually function, and that's a different story. without the crisis of shutdown. and right now, i have to tell you, i watched, over the weekend, and over the holiday, to see who was working and who was talking. doesn't seem like there's a lot of talking or working, and so they're once again going to be crunched up on time, so i don't have a lot of hope that this is going to happen without a shutdown. >> well, and by the way, i understand the problem was our end, so maybe our dial-up modem went down. our aol account, maybe it went down. senator heitkamp, we talked about the spending bill and the

border crisis and ukraine. we all want to defeat putin. we all want to make sure that people who are crossing the border are taken care of and that we also protect our borders. why are these two issues tied? they have nothing to do with each other, other than politics, and maybe that is the answer. >> yeah, it's -- brian, it's about leverage. they think that they can leverage israel spending against ukrainian spending, depending upon what side you're on. it's also about leverage on, it's time to address the border, and you know, if you think that that's something that democrats want, and i think a lot of republicans want ukraine to get funding, if there's something that you can lever or get as a result of agreeing to funding, you're going to try for it, and the rest of the world and this country steps back and says, do what you can and argue about what you're going to argue about later, and so i think it's just about power. it's about power positions. >> senator heidi heitkamp,

senator kay bailey hutchison, thank you so much for your generosity and intellect and time on this network all year long.

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welcome back. let's take a final look at the markets before the last open of 2023. here now is julie biel, kayne anderson rudnick analyst and

cnbc contributor. you say that the soft landing is going to depend as much on the rate of saving as it is on interest rates. what do you mean by that? >> well, what we've seen with consumers is it's now been two years that consumers have been saving less than the historical norm. they have been dipping into their savings that they accrued during the pandemic, and eventually, that has to normalize, right? and that has a pretty meaningful impact on consumer discretionary spending. we think about how consumers have been in 2023. they've been helped by stimulus and lower oil costs. it's a little bit like when my kid is learning how to ride his bike and i'm pushing him from behind. 2024 is when we start to figure out how strong really is the consumer. >> you take the training wheels off and see what actually happens. >> exactly. >> in terms of small caps, you know, we've seen kind of a catch-up trade a little bit in the small cap universe. do challenges abroad we've been talking about geopolitics today on today's show, whether it be china, whether it be europe, do

they make small caps more attractive? >> i think so. if you think about most of large cap, 40% of their earnings is tied to earnings abroad, and so if i think about the weakness and the challenges that are happening geopolitically, i'd rather be with small caps who have a monogamous relationship, typically, with the rest of the u.s. i think it's a stronger and healthier market. >> real quickly, i wanted to get to one of your picks, which is that you believe there's going to be a ramp-up in deal activity so you like firms like mullis. >> investment banking firms that are exclusively focused on this segment, it's a clean way to play an improvement and a lot of pe firms have to sell these companies. there have to be transactions and it's easier with lower interest rates. >> moelis up 48% this year on a year where the bigger banks have been plagued by minimal activity. that's an interesting one. julie, thank you so much. happy new year to you. really appreciate it. >> happy new year. thank you.

all right, set for a quiet open. the s&p 500, the numbers we're looking for, 4,797 would be a new closing high. 4,818 would be a new intraday high set almost exactly two years ago. of course, markets closed on monday. >> last call, 7:00 p.m. >> we could do that. >> see how things went. why not? first, stay here for "squawk on the street." ♪ good friday morning, and welcome to "squawk on the street," i'm sara eisen with bob pisani. today live from post nine of the new york stock exchange. carl, jim, and david have the morning off. last trading day of the year, taking a look at futures. will we get a record close for the s&p? i don't know. looks like another quiet day, futures pointing up, dow futures up 12 points. dow, by the way, at a record high. nasdaq 100 at a record