2024. first trading day of the year and "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we're live from the nasdaq stock market in times square. i'm becky quick along with mike santoli and robert frank. happy new year. we made it. on this first trading day, nothing too spectacular to report with the u.s. equities. dow futures are indicated up 4.5. s&p futures down 2. the nasdaq off 45. if you look at the major averages2023, it was a heck of a year. the dow up 27%. the nasdaq up 43.4%.

pres pretty amazing to see what happened. the russell small cap was up. the dow transports up 18%. the nasdaq 100 with the best year since 1999. >> the nasdaq 100 was up 55%. i do find remarkable is you have the amazing calendar year returns from the indexes. it is almost a perfect two-year round trip. i talked about this last week. january 3rd of 2022 with the all-time high above 4,800. we're at 4,700 right now. the story of last year was mostly stuff we were afraid of didn't happen. that was recession. that was the fed didn't have to jack rates to 6%. the fed didn't have to put the economy in a real downturn to get inflation down. inflation came down faster than the economy weakweakened.

we had the yield scare. at this point, i think everyone said we made it through. we dodged the bullets. the consensus is the same. soft landing and avoided recession. >> it is so different from what people were thinking last year. we thought it would be a tough year. >> two years ago when we went p b there, what were interest rates? >> the fed was at zero. the ten-year yield under 2%. it showed you over that span of time that you absorbed an earnings downturn which now ended and the 500-basis point fed tightening campaign. >> i was looking at the wealth of the wealthiest 500. >> you have the numbers in detail?

>> i do. that's all i do. wealth reporter. in 2022, they lost $1.4 trillion. last year, they gained back $1.5 trillion. that was the round trip. it made me realize that's what happened to markets as well. s treasury yields are inverted. the ten-year is at 4%. the two-year yield at 4.29%. 2023 was a big year for gold. it was up 13%. then bitcoin was up by 157% last year. check out the move this morning. it is up is up sharply. back above $45,000 for bitcoin. we are watching the price of crude after iran distpatched a

war ship to the red sea. wti up 2.5% on the morning. in the low $70 a barrel range. that follows word from the u.s. military that it destroyed three houthi backed rebels over a ship that was under attack. the oil markets have been acting like it is oversupplied. prices round trip all year. this is the element where you wonder how much of the geopolitical premium. >> it is not the first time they have taken out one of the houthi rebels. breaking news early this morning. japan airlines flight with passengers on board caught fire on the runway in tokyo. local media reports say the plane collided with the coast guard aircraft as it was landing. the plane was carrying 367 passengers and 12 crew members. all were evacuated. no word yet on the crew of the

coast guard aircraft. a lot of horrible pictures out of japan all weekend after the earthquake. and 48 people were killed in the series of powerful earthquakes in japan on new year's day. rescue teams are struggling to reach survivors in isolated areas where buildings cs collap. that disaster started with the 7.6 magnitude quake in the port city northwest of tokyo which is home to 23,000 people. the quake triggered a tsunami warning. toshiba said it halted semiconductor production to check for damage overnight. the japan weather agency downgraded tsunami warnings to advisories. we will continue to monitor the story as it develops. fidelity marked down the

value of the shares of x holdings. fidelity held musk with the values of 71% less than the time of musk's purchase which includes the cut for the month of november. in november, elon musk told advertisers to go f-themselves during andrew ross sorkin interview. that was the bear market low for stock. you had a 33% gain for the low that month. down 70% mark to market in twitter and x. i think meta is up 100 to 350 at that time. >> he agreed to the price at the earlier time. >> at the high. >> in april of that year and tried to get out of it. we remember the saga.

i don't think anybody thought he was getting a good deal with that purchase. >> would twitter have convinced the market it was an a.i. play and risen along with the other stocks or would it be in the situation it was before he bought it? >> that's a good question. something like snap, which is also in that group, the stock is up off the low, but it has not done what meta has done. >> the question this year is will he continue to fund it or let it go? hard to imagine with the bond holders and banks who have the loans. >> it is not justice advertiser. he is looking for subscribers to fund it for the users and paying for the blue check mark or whatever else. >> he is now worth 2$230 billio. he can fund losses for a long

time rather than taking the shame of shutting it down. >> the tesla shares doubled last year. >> even worth $230 billion, and if these losses are hundreds of millions of losses a year and keep getting worse, what does he do? >> jeff bezos with the washington post. he can fund it forever. berkshire-backed ev maker byd sold 526,000 last year. that puts the company on track to surpass tesla for the second straight year. tesla is expected to report today. analysts expect it to have sold 483,000 units for the fourth quarter. >> they took away the college story. we will see what happens. you have washington surviving. that battle over texas. it sets things up.

alabama game may have been the big one that people were watching. >> i think espn got that right. >> i think so, too. they gave it back. >> all right. now to college football championship game is set. michigan needed overtime to advance beating alabama 27-20. washington survived a final drive by texas to secure its spot in the title game. michael penix threw for 430 yards in the 37-31 victory. caught up on the most important story of the weekend. >> this is why a lot of people took today off. they were up watching this stuff. >> yeah. i don't think people needed a ton of reasons. michigan is the favorite. >> i was up at 3:30 because rafael nadal was back on the court for the first time in over a year. >> 3:30 this morning? >> in australia. >> you would have been up anyway. >> absolutely.

i am a rafa fan. the question if he would play this year and the fact he is back and looking good. i think he was playing dominic thiem. he might not make it. >> impressive. when we come back, we will get you ready for a new year of trading. we will get investment ideas from stephanie link next. and later, dr. scott gottlieb will talk about the health trends for 2024. "squawk box" will be right back. do you consider climate risk? changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments? ice offers data and markets that can provide critical insight. manage your climate risk with ice.

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investors pry eparing for t first trading day of the year and we bring in stephanie link from hightower. stephanie, we talked about how people are feeling about the op. you think this can continue with different leadership taking over? >> yeah. happy new year, becky. >> you, too. >> there's a lot of momentum in the economy headed into 2024. gdp is running at 2.5% to 3% right now. a lot of that is tied to the consumer. we have talked about the strong job market for over a year and a half. we created 2.3 million jobs last year. that is compared to a 2 million

average from 2016 to 2020. we know wages are strong. retail sales have been strong. surprisingly so. especially the controlled group from the gdp report. you add on the manufacturing renaissance from the infrastructure bills past sed lt year that will get into the system this year. we were talking about inflation. i think if you have a gdp of 2% to 3%, you can see su upper dig growth. the equal weight s&p oper out performed the equal weight. we have $6 trillion of money in money markets. $1 trillion last year alone came into money markets. i think you will start to see that money filter into the

markets. >> the dow transports, we were just talking about year to date, up 18.5%. actually saw week-to-date down a little bit. you like union pacific . i wonder this is not just a trend. this is union pacific and some things they have going on, too. >> exactly. the stock was up 17% last year. it is surprising. it is only up 3% since the new ceo was announced in august of last year. why that's surprising is because he has been in the industry for 40 years is because he was coo. he created $1 billion of efficiencies at the company at the time. i think he will do the exact same thing and it is under appreciated. fundamentals are starting to

improve in terms of car velocity and train velocity and dwellings. all of the things you like to see with growth. we have the infrastructure renaissance. >> you mentioned the consumer which is pushing this, too. you like home depot. that is an interesting call. people think consumers have moved on from the home renovation things. >> i really like housing. that's my favorite theme for 2024. that's all tied to interest rates. we went from a 30-year fixed at 8%. we are at 6.54%. we have seen a pickup in housing activity. mortgage olympic applications a. single family housing starts and permits were up 18% each. that's very interesting to me. permitsing indicator. home depot is a laggard.

that is what i look for, becky, especially in the gbeginning of the year. home depot has lagged and rightfully so. they benefitted from the covid levels and demand. i think we're getting through that. we had last four quarters of negative same-store sales. we are coming to the end of the that. maybe the next quarter or two. you have easy comparisons going forward. in the meantime, they focused on profitability. they have done a good job there with the $500 million cost savings program as a buffer this year. i like it as a lagging stock last year. i hope it will be a leader this year. >> lagging? it was up 10%. schwab was down 16% last year. ma what is the rationale? >> i think it will be a better year. the ceo was buying stock last march with the svb turmoil.

a couple of things. low interest rates should help the cash sorting situation. we'll see less of that. in the meantime, i think net new assets will see improvement. we saw last month where it did improve month over month of 3.7% versus 1.7%. that's good. it is encouraging. it is still below the target of 5% to 7% for the year. we can eventually get back to that. we know they have synergy from the ameritrade acquisition. they haven't seen a lot of synergy because of covid and all of the issues in the financial services industry. i think we see synergies there as a cushion. i think we have $5.25 in earnings power. if you think like i do, the stock is trading 13 times earnings. that is cheap for best in class financial services company. >> lam research was up almost

90% last year. this is the story that keeps on giving. >> yeah. i think a lot of it has to do with wafer fab equipment and the bottoming that we're seeing. we started seeing it two or three months ago. wafer fab equipment in the beginning of last year were $100 billion of spend. it got as low as $70 billion. that number has been trending higher. we know micron reported a couple of weeks ago and said exactly that. we are seeing a bottoming out. lam research raised the numbers twice last year for wafer equipment. you are in the $80 billion range. why is this important? ethan data deposition is the two largest categories within the spend. these are number one and two in

etch and spend. you can see $40 of share in the company. that puts it 14 times estimate. the numbers are probably troutr interest troughing here. >> stephanie, thank you. >> absolutely. take care. coming up, the mega deal with the pga tour and liv golf isn't done yet, but we have a progress update. that's next. later, tech investor dan niles will join us with the five picks for 2024. "squawk box" will be right back. you know what's interesting these days? bitcoin. look for bitwise, my friends.

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an update on the golf mega deal with liv golf and pga tour. tour commissioner sent of a letter to players saying they were working on the negotiations into the new year. they missed the deadline of december 31st. the goal is to reach agreement with the public investment fund and coalition of sports investors bringing them on as minority investors. and a simplified version of the federal student aid or fafsa requires congress to launch by january 1st. it did, technically, but it is not clear if anyone was able to submit the form. information from the forms won't be submitted until late january. if you are applying, you have

plenty of time to fill out the form. good luck. you don't need to rush. the form was simplified under the new system. more students will have access to federal grants. wealthy families will see lower eligibility. si simple. for now, the report relies on the consumer index data from 2020 which doesn't count for the run-up in inflation. many students could receive less financial aid than expected. perfect. coming up, the political themes to watch in the new year. including a looming deadline again to fund the government. punch bowl's jake sherman joins us next. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. let's check it out. says here it gets plenty of light.

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good morning. welcome back to "squawk box." we are live from the nasdaq market site in times square. wake up.

get back to work. markets have turned down in the last 25 minutes. you are now looking at the dow down 92 points. s&p off 21. nasdaq down 135. here is what is weighing on the dow futures. apple falling after barclays downgraded it. boeing shares under pressure. goldman sachs removed that stock from the conviction list. dom chu will have more at the top of the hour. first trading day of the year. you will see a lot of calls from wall street terms this movrning now to washington. the house and senate will be back in session next week with several major items on the agenda. from avoiding a shutdown and aid packages for ukraine and israel. joining us now is punch bowl founder jake sherman. jake, i can't believe we're

talking about another shutdown on january 19th. what is on the table currently with the top line spending number which, i guess, is the sticking point right now for the january 19th deadline? >> thanks, guys, for having me. happy new year. we have 17 days from the shutdown and there is zero progress in resolving this. this is a partial government shutdown. about 4 of the 12 spending bills that need to pass to fund the government. there are massive disagreements on not only top-line spending, but what is included in the bill's poison bill amendments. i would say, to be honest, i don't want to say a shutdown p is likely, but congress will be in session for a week to resolve. these are cascading shutdown deadlines. january 19th and beginning of february.

this threat is looming over the government two months in a row. >> one thing is exaccelerating e cut in the irs funding which is supposed to start in 2025. the irs is giving $80 billion. republicans convinced the biden presidency to cut that by $20 panh billion. now they heare saying that is starting next year? >> the republicans want to cut spending majorly. this is a washington that is controlled by democrats. republicans are trying to find some legislative victory to take home and they can campaign on. if that's the big ask from the biden administration, i can't imagine they won't accommodate that. i don't think that will be enough for all republicans.

remember, republicans going back to kevin mccarthy before he was ousted, wanted to deeply cut spending. that was in part what ended his career. we will see a lot of back and forth on this and other spending issues and incredibly compressed t timeframe. >> sqjake, in the past, you had speakers come to the table to say we want to keep the government open. what will mike johnson say? will he be likely to say we want to keep the government open or we won't unless we get the cuts? >> that is interesting, becky. johnson has only been in the job for a couple of months now. what you are saying is right. there is a contingent is right. they don't see the government shutdown as a big issue. mike johnson aligned with the house of the republican conference. he has, over of the last couple

months, taken a maximalist position on the host of issues with the border and israel funding, et cetera. i see him lining up with that. we don't have a great sense of that right now. becky, there is not a lot of time to take the maximalists position. there are a couple of days to get this resolved before the deadline. >> why? are they not back this week? >> they are not back this week. mike johnson is going to the border. i know. i know. i don't control the schedule. i agree. mike johnson is going to the border on wednesday. another massive issue that he is trying to wrangle concession from the biden administration over in eagle pass, texas on wednesday. they don't come back until next tuesday. it defies logic. >> is that part of the answer? this issue with the border where

you know have a lot of democratic cities and blue s cities with mayors upset being overrun by migrants coming in here, too, illegally. is that the place where maybe there is room for a deal to be struck and if they can find it there, they can somehow find a way to get through the funding issues? >> i don't think so. effectively congress has put the border in a different bucket with israel and ukraine and taiwan aid. i think there is a deal to be done that is good for everybody on the border politically. mike johnson and joe biden and chuck schumer. all of the major leaders. mike johnson has said it is our bill or nothing. nothing else will work. we'll have to see this week if he backs off that position at the border. >> if he does, does he get in trouble with his caucus?

>> yes. quite frankly, the house republican conference is not going to approve a border bill that chuck schumer negotiates. i find that very hard to believe. the white house has chosen to negotiate with senators instead of house republicans. >> jake, you mentioned funding for israel and ukraine and taiwan. where do you think we end up with funding for ukraine right now? >> it is very difficult to see. ukraine aid won't be unlocked unless there is a border deal. it is less likely ukraine will be approved in the short-term. something massive would have to change on the border negotiations. congressional leaders have accepted and the white house has accepted that border aid and ukraine are tied together. when you add two difficult things together, it doesn't make them easier. it makes them harder. included in the mix is the

israel aid. $14 billion in aid to israel and connected to domestic spending cuts. chuck schumer has not moved on that. three of the biggest priorities are tied up in the border fight. >> jake, you mentioned the house republicans in past rounds of negotiations here have wanted deep spending cuts. do they want specified spending cuts or gestures to say we're cut cutting? it is not clear where the money is spend and the parts of the budget to cut back. >> it is a terrific question. you hit the nail on the head. it is impossible to appreciate bring change the path of spending in the united states without doing something to tackle priorities. raise taxes. cut defense spending. republicans wouldn't do that. you cut entitlements. you need to touch one of them to

change the path of federal spending. republicans are not interested after a decade or more of paul ryan and everybody else says they need to change enti entitlements. they think that is politically unwise. they decided to not do that. that leaves token spending cuts to change spending a little bit, but doesn't change the long-term growth of the federal government and federal spending. >> jake, thank you for coming back to work. happy new year. i'm sure we will talk a lot about this until january 19th. thank you. >> sure. coming up, crude prices rising a bit this morning, but still down more than 17% over the last three months. we'll talk about the catalyst for oil next. get the best of "squawk box" in our daily podcast. follow "squawk pod" on your favorite pca aodstpp and listen any time. we'll be right back. hm?

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crude prices ticking higher this morning after iran sent a war ship into the red sea escalating tensions there. joining us now is kevin boock. kevin, good morning. this is an interesting market in crude. we have been through the russian and ukraine war and clearly the israel and hamas war as well.

no enduring geopolitical premium seems to have stayed in the price. not that we can discern. supplies over a lot of that. do you expect that to change? >> there is room for risk to the upside. if you look at where we are right now, we are seeing the small rise in response to iranian war ship in the red sea. the risks that are out there go further. they include adjacent waterways with the strait of hormuz. iran made the threat in the mediterranean last month. then the ongoing conflict with venezuela and guyana. that is the biggest source of the incremental supply muting the geopolitical response. >> if you are generally bullish on oil, not just you, anybody, if it you are bullish on oil and resorting to the world is a messy place and there could be conflicts, who knows what will happen with supply or transport,

then it seems you are starting in a hole because you are counting on the market to extrapolate the potential impact of something and we don't know if it will come through. >> looking ahead, my colleagues project we are slightly tight. 100,000 barrels a day first quarter demand ahead of supply. where there is a difference, the iaea has a modest demand proj projection. opec must be talking its book. it is selling oil. why not be bullish? if that is right, then the market is much, much tighter than right now coming into the year. i think that demand uncertainty probably is still worth considering with the faster recovery and we are seeing more demand in chemicals and jet fuel

with the transportation fuels on the roads. maybe not here in the developed world, but globally, people want to drive, fly and move. >> no doubt about that. maybe there could be a surprise to the upside on the demand side. this is a global market where you have, you know, spot rates mostly determined by the commodity now and who can supply it. you think the potential differences in the einventory ae accounting for the potential edge in trading it ? >> we are seeing the edge with the politics with the balanced market. one stoiry we saw in 2023 is th electric car story. we have the upper bound. how many millions do you need to rack up before the end of oil

demand? it is still too soon for that story. >> you cannot go that far and say miles driven is stagnant in the u.s. of course, we have u.s. production and other western hemisphere production which seems like it still continues to be relatively aggressive at this point. >> there's no question that if you look at the last week of the eia data from the end of the year, 1.3 million barrels a day per growth. almost all from the lower 48. you can't overlook the importance of the shale growth we have seen. we have to ask what is the rationalization of the merger wave mean? the long-term story is an issue with growth. when you have the merger, ten btus walk in and eight walk out. rationalization still to come. >> you mentioned the potential risk to the upside. where do you project prices will go? crude? >> we long put price predictions

on paper. one on war ships and three fast ships taken out by helicopters. if we get to attacks in the region, on yemen soil, from the u.s. and allied forces, up into the the 80s. there are issues based on the supply story you have been talking about. realistically, the question is disruption or just risks. if it is just risks, we see this over and over again. it was four years ago today, to the day, that the u.s. killed the head of the iran's islamic revolutionary guard force. we saw modest moves to the upside, too. first quarter is demand weakness relative to the year at large. if you think about the market

with regional risk with the memory of four years ago, it may be working on that memory. if you didn't see a disruption, these things do die out quickly. >> kevin, thank you very much. i appreciate the time. >> thanks for having me on. right now, an update on the plane crash story we told you about earlier today. japan airlines plane with passengers still on board caught fire on the runway in tokyo. that plane collided with the coast guard aircraft as it was landing. japan's transportation minister said five of six people aboard the coast guard aircraft died. the captain of the plane is injured, but no further information was available. the spokesperson for japan airlines said the plane was ca carrying 367 passengers and 12 crew. they were all evacuated. the cause of the crash is still unknown, but they hope to reopen haneda airport tonight or tomorrow if possible. when we come back, it is

jobs week in america. we get you ready for the jobs report and the workplace trends you can expect in 2024. that's next. and congress is not set to return to work until next tuesday with the looming deadline to fund the government a few weeks away. we talk outhpontl abt e teia sticking points straight ahead. "squawk box" will be right back. it's time for a fresh approach to pet food. they're quitting the kibble. and kicking the cans. and feeding their dogs dog food that's actually well, food. developed with vets. made from real meat and veggies. portioned for your dog. and delivered right to your door. it's smarter, healthier pet food. get 50% off your first box at thefarmersdog.com/realfood

welcome pwarbgs back, everybody. the first jobs report of the year is this friday. we want to look at workplace trends. joining us for that is a yale university lecturer and a cnbc contributor. good morning, joann.

>> good morning and happy new year. >> we were just saying that. let's look at what to expect in 2024. if i looked at 2023, i would have said it was an employees market, not an employers but employees. is that true in '24? >> yeah, 2023 was an interesting year because the market remained strong, and at the same time companies started demanding that people show up, that you get that return to office mandates and they were growing by leaps and bounds, by all the companies we know, disney, meta, amazon, and on and on and on, and what happened was employees didn't for the most part play ball. >> yeah, tell me to come back. good luck with that. >> if you look at the stanford

economists that follows all of this, nick bloom, and he said it was 40% of the people last year still worked at home one day or more a week, and that number has not changed. even though we hear about a lot of the companies demanding, it's not happening. >> maybe they are demanding you are there one or two or three days a week, and you have 40% who have one day at home. >> yeah. >> what i think is interesting is two-thirds of ceos in a massive global study said that by 2026 we are back to five days a week is what they expect, and that seems impossible and like it's wishful thinking, and so it seems like a five-day workweek is impossible, and we are four

years past the pandemic, and we have to accept that there's a new normal. >> well, when there's massive layoffs, employers can do whatever they want, and if you have massive layoffs you won't have too many people saying i am not coming in five days a week. >> i agree with that. and the reason we are in that position, is because there was -- what we are going towards now is hybrid, and what happens to the people that spend more time remote versus those on the premises? and it's too soon to tell, and i think we will start to see the fallout to see if there's a wage

differential for doing the same job, and a wage differential for folks that want to have the remote and hybrid opportunities, and is it going to hurt them because they are not on the premises as frequently, and we like and promote and give opportunities to those we see. those are big questions i am certainly looking for. we don't have the answers yet. >> go ahead, robert? >> do we have any clarity on what it has done to productivity? the cultural impacts of not being in the office, and a lot of us grew up like in edward jones where we sat next and learned from others.

>> that's an important issue, and one of them is the learning curve. i feel like you need to be with people some of the time. i don't know that you need five days a week, but -- we all started as reporters at the "wall street journal" and we learned our jobs by listening to the more experienced people around us, and you can not do that job walking in off a college campus, and that's true for every industry, right? you need some of the in-person mentoring and understanding culture, and at the same time you have the issue of the two tier kind of situation, and i think we are going to start to see the affects of that. the productivity piece, by the way, there has been a lot of research on productivity, and it does come out in different spots, and for most of what i have seen, and in particularly,

your productivity actually remains the same, and that your people are happier, and you are more likely to retain them. there's something to be said there. >> that makes sense. thank you for coming in. we appreciate it. great way to start off the new year. really great to see you. >> great to see you. great to see all of you. thanks for having me. >> thank you. coming up, several stock d d downgrades. and "squk x"ilbeig ck.wbo wl rht

you know what's interesting these days? bitcoin. look for bitwise, my friends.

stocks ending in 2023 with a bang, so can that momentum continue in 2024? we will talk recession risks and sectors to watch and much more. why states like new york and california are looking to tax the rich as revenues dry up. plus, tesla in focus this morning as we await new delivery numbers. tech investor and tesla watcher

talks about a bull market that could last for years. the second hour of "squawk box" starts right now. ♪ ♪ good morning. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. let's look at the s&p down. these futures are getting more in the red as the morning goes on. let's take a look at treasuries. the 10-year still just under 4%. two-year right above 4.3. take a look at crypto, which had an incredible year last year, and it was the everything rally. bitcoin up about 4%. ether up 2.

pretty much across the board, so again, some strength in the crypto market. >> crypto keeps looking for the eft launch, and it will be here at some point and until it does, it will go up every day. >> it was at 46. >> yeah. >> and we are looking at crude after iran launched a warship out to sea. you see crude oil ticking higher in part on that news. and then japan airlines had a plane with 367 passengers and 12 crew members and they were all evacuated. five of the six people aboard the coast guard aircraft has

died. no further information was available. the minister said they hope to reopen the airport by tomorrow or tonight if possible. and then the fourth quarter rally. let's look at what 2024 will bring to investors. let's get to the chief market strategists for the americas. good to see you. >> good to see you. >> as somebody that tries to come up with cute ways to talk about the market, i am going to give you credit for q4 in 2024, all right? 4% unemployment by the end of the year, a little bit up from here. is that your basic premise? >> that's right. i think we were quite early last year towards the middle of the year in really acknowledging that we are faced with an economy where you have growth,

but it's noninflationary. in terms of the 2% growth forecast, it still implies some normalization for the third quarter boom, and it implies a continuation of the normalization front, and that opens the door to having proactive rate cuts, and those rates don't get more restrictive from here. at the beginning of the year, we will continue with the plane metaphor, a hard or soft landing, and then we will go to where are we in the cycle and what does the cycle look like? what are the characteristics and, hence, what is the leadership and the kind of positioning? we think that's very different than what we had post gfc and prepandemic. >> in the last two months, since october 27th, which was the low for the market, the average stock, the equal weight is up

15%, and you had cyclical leadership which is also something people had been wanting to see. where does it take you in the way of what types of stocks should work, domestic international, small, large? >> i think the most important thing that changed from the previous cycle is the interest rate environment. we are ultimately speaking about rate cuts, but it's a normalization of interest rates and it's still positive real rates. really the most fundamental thing that changed is that move from the lower zero bound and those negative real rates. ultimately we think the ten-year settles in in a range between three and 4%, and that's a range where we historically we have seen equal performance between value and growth and international and the u.s. that's different than the environment we were in where interest rates were sub 3% for a

decade plus. i think that's one of the biggest things on my wish list for 2024 is that investors appreciate that change and reposition portfolios. >> 3 to 4% is -- it may not be sub 3%, but we are not talking about 5,6 or 7%. that's productive. >> yeah, and i think that's something that we should celebrate, actually, is the return of that environment. ultimately it goes back to inflation. we don't think it's something that has changed in this economy, it's not inflation prone, but it's an economy that exited that inflation malaise. it was so long ago that we used to complain about inflation being low, and now we have a productive level of inflation that can allow for normal interest rates and proper allocation of capital.

that's important, speaking of the rally late last year, everything that had lagged went up basically, and one of the things also on my wish list this year is more of a focus on valuations, quality, fundamentals, and things that are actually important when real rates are positive. >> the market is pricing in between six to 7% cuts, and do you think there will be a downdraft if they don't get that market, or could they say it's not going to be march but june when we get there? >> i think that's too much where we don't expect a basis of those cuts this year, and we do ultimately expect three cuts this year. we can start mid year, start gradually, once a quarter, and ultimately i think, of course, the market gets carried away and

things get over extended and then there's a pullback period where everybody readjusts, and we could use that to buy quality stocks here and internationally as well. >> last year, the market was pricing in cuts at the end of 2023 for a while. >> yeah, still got the rally. >> the idea that the market is banking on that alone would be bullish. it's the carrot held out in front of the horse. >> for the right reasons. that's important, too. >> the big question is a year ago there was such certainty we were getting a recession, and now it seems not many are out right expecting it, and we are still in that lag period, and employment starts to weaken eight plus months out, so are we still bracing for the possibility that we get a growth scare? >> we have a lot of debates internally about this.

one camp saying, you know, we are still yet to see the lagged affects of higher interest rates, and we will see it and get that growth slow tkoedown a even a recession, and then it's not about manufacturing, investment and equipment, and it's about software and intellectual property and services consumption, and so actually we think we have seen an impact of higher interest rates, and we will continue to see a little more, and hence that idea of growth normalizing to 2%, and ultimately if the fed cuts proactively, we don't think interest rates is what can kill this economy at the moment. >> thank you. >> thank you so much. coming up, taiwan is preparing to pick a new president. that's something we will discuss after the break. and then a new year and new

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with the largest fastest reliable network. give your business a head start in 2024 with this great offer. plus, ask how to get up to $1000 prepaid card with qualifying internet. welcome back, everybody. one of the biggest national security stories of the new year is around the corner. taiwan will hold presidential elections on january 13th, and china is warning they will use

military force to annex the island if its people vote for a president that supports the independence of the island. michael, great to have you here. unfortunately a new year will bring new problems, including this story we just mentioned about with taiwan. how big of a problem do you think this potentially could be? >> hi, becky. happy new year to you. i think it's certainly worth watching but i don't think china will invade or otherwise attack taiwan because the vice president there wins the election, and the two opposition candidates, the nonincumbent candidates will split the vote, and again, that's all the backdrop. dpp already is in power, and already tends to favor autonomy

and hint at a desire for long-term independence more than the kot party. so beijing doesn't like that and does threaten to invade, and president hraoeuz platform, and especially since the alternative is potentially world war iii. my hope is china will efprr on e side of caution, and unless there's a big bold move like a declaration of independence, i don't think there's likely to be war. >> why issue the threats, because if they don't follow-through it looks like they are stepping back and not willing to stand up to their own red lines?

>> well, they are pretty bad in influencing taiwan elections, as they have in the past. as you pointed out, when they threatened before, it tends to help the people in taiwan, and the more hawkish and dpp type of candidates, and china has been limited in how much it has done in this campaign for that reason, and they have some degree of deniable plausibility. what you are talking about, the stakes are high and if he thinks he can move towards independence, he better think twice. i don't think china experts him to lose the election, and i don't think china experts him to make such a stark and bold move they will need to use force.

there's the possibility of ramping up the cyberattacks and the occasional missile firing near taiwan, and maybe something more risky like landing a missile on a harbor but not hitting anybody, and these are not the things i would rule out, but i do not expect a use of force. >> while ukraine has been good fighting off and fending off some of the missile attacks coming in from the russians, at the end of the year there was 114 missiles and drones knocked down out of 158. we are two years in. what is going to happen next? >> that's a great question, becky. there cannot be much movement on the front lines, and i don't see a lot of basis to think otherwise. the ukrainians are nowhere near wanting to concede the amount of territory they lost to russia,

roughly 17% of the overall land mass, and the russians are nowhere near thinking they should compromise. they are still holding out hope the defense industry can out last ours and donald trump could come to office and cut a good deal for them. both sides are likely to keep pushing and battling away, and as you say, russia will keep attacking ukraine cities, and ukraine has pretty good air defenses, but 70 to 75% intercepting is a good rate, and as you point out, the success rate for the intercepts is not improving any longer, and i don't think it will given that russia has a wide array of weaponry to use and can attack different cities, so we will continue to see these numbers in terms of the attack results. >> we have been talking about

congress coming back and facing a government shutdown because we can't agree on spending levels. what about ukraine aid and israel aid and all of these things that seem like they are in a too-hard pile right now? >> well, on this one i don't want to sound optimistic about prognostication, but i still have a hard time believing that the united states will leave ukraine high and dry. it's one thing to have a debate about whether we could keep trying to liberate territory, and the idea of cutting off ukraine in the face of the russian aggression is something i hope neither party, and especially my republican friends would want to contemplate. at the end of the day, hopefully most of the $60 billion will be approved. we will have to see.

>> let's say we get that extra support from the united states, and is the biden administration looking at moving towards negotiations or is it going to be sort of dig in and hope things improve on the battlefield? >> an excellent question. i think the biden administration is reluctant to push ukraine to make decisions that ukrainians themselves have the right to make, like at what point they are willing to accept territory compromise. there's no good answer about how to secure ukraine's long-term security, and many don't want to bring them into nato and have to go to their defense, and i don't see movement on that debate. there are ways to gradually thicken our military trainers inside ukraine is that not necessarily nato membership, but

creates a trip wire, and that debate is not happening, and i think the biden administration is giving them the chance to make a decision about when they are ready to negotiate. and russia is not interested in negotiating itself. >> we have to run, but the red sea attacks on commerce ships. is that something that you worry has the potential to grow into something else, or do you think we will grow on that front? >> i think we are going to be mostly okay. i am not depending on a supply line that needs parts in three days and now it has to go around, and the houthis' ability is limited to escalate. they have to cover dozens of miles of airspace or water space

to carry out an attack, and we can do a good job of impeding that most of the time. >> thank you, sir. >> thank you, becky. coming up, a list of premarket movers on the first trading day of 2024. futures right now still in the red. the dow down 170. s&p wn8.do 2 "squawk box" will be right back.

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let's get to a look at this morning's premarket movers. dom, i have to ask you, we were talking about the liv golf talks continuing, and what do you think will end up happening there? >> it's tough. i think the speculation over whether a deal was going to happen or not going to happen was pessimistic, and folks that i talked to in the golf business were looking for a blockbuster deal, and they are looking at what options there are for financing. the real issue will be for players. if you can get the product involved to look the way they want it to work becomes the

sticking point. we hurt one of the star golfers on the pga tour that has been talked about being a possible candidate to move over to liv golf made a firm commitment to the pga tour and said he had been offered a spot going to liv, so it will be curious. at the end of the day, people will have to shift things around a little more. i am glad we got to talk about golf for my first segment of morning members in 2024. >> me, too. >> thank you, i appreciate that. and we will start with the bulk of this, and golf aside, and appearing isdown 1.75.

and it's weaker iphone sales in china, and not much better expectations for the upcoming iphone 16, so the shares are down. sticking with the mega cap tech trade, we are seeing nvidia down about a percent or so just around 150,000 shares of volume caught up in the downdraft right now. and they cited things like top position and key computer technology and coupled with software services. we will cap things off with a check of uber technologies which is lower around a percent or so and the logistic company is

being mentioned favorably by wells fargo, and maybe future stock buybacks, and wells is also graduating travel booking sites like expedia from equal weight to underweight. >> yeah, probably a little pent-up selling in a new tax year after a big buy in treasuries in the fourth quarter. coming up, as revenues dry up in states like new york and california, could a wealth tax be in the works for 2024? d enanth gene munster joins us. "squawk box" will be right back. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one.

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everybody. it's the first trading day of the year, and so far you will get a whole lot of red arrows. the down futures at 170. of course, that's nothing compared to the gains we saw last year. we will see how this shakes out. you were talking about the best year for the nasdaq composite

since 1999 for 2023. >> i think the was for the nasdaq 100. >> oh, you are right. and it was a bigger gain for the nasdaq 100 than the composite. >> yeah, it closed at a new high. >> red arrows this morning, but given the gains from last year, nothing to get worried about just yet, maybe just not the most auspicious of starts. and then tax revenue falling in 40 states in the latest fiscal year, and california, new york, seeing the biggest drops and the biggest deficits. california is now facing a budget deficit of $68 billion. is that its largest in history. new york projecting a $4 billion deficit this year. legislators in both states proposing wealth taxes and taxes on unrealized gains to fill the

gaps. governors in both states pushing back saying they cannot lose anymore high taxpayers, and more on this and whether or not to tax the wealthy, let's bring a form kwcongresswoman, and also congressman. you look at the budget gaps and they have to figure out how to close them. you can't -- california can't cut $68 billion in spending revenue, and why not tax some of the unrealized gains by the wealthy? >> well, one, as a fifth generation texan i hope they succeed in what they are trying to do, it will send gdp and more capital and a greater tax base to my state. that would be my first

observation. i mean, listen, it's like you hear tax beatings will continue until morale improves. what they are going to do is self defeating, they are going to send more people and entrepreneurs and businesses out of their states. charles schwab has come to texas, and elon musk and tesla has come to texas. they have to find a way to find a fair and flatter tax system. i would say, you know, they can do a lot of looking at the spending side. i just saw a press report where california has a new initiative in the offering to offer health insurance, not health care, but health insurance to illegal immigrants. is that a particularly wise policy initiative when you are running this type of deficit? ask the people in california, but there's a reason there's a

lot of one-way rentals of u hauls from california to texas. >> new york and california provide a lot of social services, and there's a huge safety net in both states which is why they are hugely successful, and california's budget is now over $300 million, and new york city' budget is larger than the entire state of florida, and that has a population larger than the entire state of new york. do you think there could be some movement on the cost side given how much spending has grown in both of these states? >> well, i mean, i think one of the things that we have to look at is coming out of the pandemic, one, there was a lot of federal infusion of revenue into many of these states that kind of accounts for some of

that growth. the question is, then, can you really cut back on spending that goes to basic human services? i think in the case of california, my home state of maryland, also, you know, one of the wealthiest states considering these proposals, and i think, you know, there has to be some fairness in the tax structure where individuals aren't allowed to just hide all of their income or put away all of their assets so that they are not taxed because they also take away from the revenue base in those states. there has to be some kind of compromise here. the question of whether states can alter their spending patterns and stuff, that's a fair question. the reality is these states are big contributors to the overall economy, and it begs the

question of whether congress should act on a wealth tax that would be to the benefit of all states in terms of contributing to their revenue. i am not sure it makes sense of having a hodgepodge of the wealth tax proposals in various states, but to the extent that congress is not going to act, the states have to find revenue someplace, and these high net worth individuals, and frankly there are only a couple thousand of them in the country are, you know, should be contributing to the income in these states. you are not going to move all of silicon valley, and you are not going to move all of the tech sector from washington. you know, the elon musks are the exceptions, and we have to figure out a way that states can balance their revenues coming in, and also bring fairness to the tax system.

>> congressman, the discussion of the fairness in the tax system, and the problem that new york and california have is they rely too much on the taxes of the wealthy and too much on capital gains which basically follow the stock market, which is highly volatile. by the same token, there should be a way to tax the wealth that is in capital gains that are held publicly or privately held stock, and when they pass away it's sheltered through a trust or given away to charity. do you think there should be a way to tax some of that at some point or do you think a wealth tax whether it's unrealized gains or total wealth should be off the table at the state and federal level? >> i think it's a uniquely bad i idea. there was a reason the 16th

amendment had to be the 16th amendment, to give us the tax in the first place. and if you have to find a way to tax the wealthy back to the 16th amendment, if you look at the original debate, it was designed to impact 1%, the top honors and the wealthiest people in america, and we know how that story turned out. if you initiate one of the wealth taxes to hit the super wealthy, watch out, it's just a matter of time before middle income and working people will be impacted by this particular tax. third of all, i would also point out that we have real world testing of this tax now. about 15 or 20 years ago, i believe, there were 20 different eecd nations that had a wealth income tax, and now we are down to three and we are down to three because they found it was

almost impossible to administer this tax and brought in very little revenue, and people voted with their feet globally, which, again, is what is going to happen if new york, california, or new jersey, any of the blue levels that have high regulation and taxation and crime, and they are sending those people to texas, and we welcome them with open arms. >> the only way to do it is if you have a national wealth tax, because if you do it on a state by state level they will continue moving to florida and texas. >> thank you so much. happy new year. we appreciate it. >> happy new year. >> happy new year. when we come back, deep water asset management, gene munster, will join us to talk about 2024. and then scott gottlieb on how 2024 could be a critical year for companies making weight loss

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big tech had a huge run in 2023, and investors are wondering if it will continue into the new year. joining us now, gene munster,

deep water asset manager. good to see you. we have to separate when we talk about tech, there was ai working and also there was insulation, and then you have speculative tech that peaked in 2021, so what looks interesting to you going into 2024? >> for starters, we are entering a three to five year tech bull market powered by ai, and it's about a fundamental shift in productivity, and we are going to be in the first year of a tech bubble that will build over the next three to five years. it's the only logical outcome when there's a seismic shift like ai, and that's our setup and framework going into this year. i think when it comes to performance, the consensus is

that the ma phag seven, it will come with the sub 20 billion market cap. and the smaller companies are going to have an impact on that, and a prediction we have at deep water is the russell 2000 growth will out perform the s&p 500 this year, and we have a product that addresses that with our innovator index, and we think it will be a great setup to the three to five-year tech bull run. >> if you think it's an ai animated bubble, or at least becoming that down the road, it seems like the market is creating different ways to gain leverage to that trek.

nvidia doing what it does, and earning estimates are going through the roof, and where else are you going to be able to latch on to whatever ai is going to bring the economy? >> i think this dumbbell approach is the right approach. you still need some exposure to the mega caps, and put it in the order of google and gemini, and i think it will get more respect from investors, and secondly i think apple will announce a foundation model in june. this is going to be the first time we will be talking about substance around generative ai, and that will be positive. that's the top of the bar bell. then at the bottom of the bar bell, i think a couple companies, one is unity, and it's a $20 billion market cap, and this company is building gains today and will be building spatial environments in the

future, using artificial intelligence, of course, and etsy, ultimately they can use ai to help creative -- build more creative products, and that's going to be a benefit, and appears $10 billion, and so we think of it as the bar bell approach. >> you know, one thing i always wonder when you talk about the estimates of all the incremental revenue streams, whether it's going to be, you know, alphabet or nvidia or microsoft, they are going to derive from this trend. where is it coming out of? are there whole companies or sub sectors that will be net losers in this environment? >> there will be some industries. i think all of us have potential risks on the informational workers side, and furif you a

embracing these tools, if you are not, there could be some losers. who are those specific companies? i don't have a list of who the obvious ones who are going to be net losers in this. i think one company when i think about big companies, massive market caps that are going to be under performing in the next couple of years, it's netflix. they don't have an opportunity. it's not as much about an ai opportunity there, and the content played itself out. i think that's obviously has been dropped, and one of the focus companies in 2023, we don't talk about that with netflix in it and that's one of the larger companies that we are staying clear of at this point. >> real quick. i know you are a long-term believer in tesla and what it will mean beyond cars, and the stock had a big year in 2023 but was sideways for a couple years, and what do you think about

that? >> it gets you to 1.8 million for the year, and i think it's above that normal. traditional autoists stepped back in investing in autonomy and ev, and that's a mistake. i think tesla will have accelerating growth in 2025. i think they will be massive automotive companies, and they will be a fraction of their size in five to ten years from now, and the market will begin to anticipate that this year. >> all right. those 100-year-old companies already a fraction of the market cap of tesla, and we will see how it goes in terms of the business. gene, thank you. >> thank you. up next, obesity drugs were a big investment gainer in 2023. dr. scott gottlieb will join us

to talk about what lies ahead for drug advancement. dow few tkhurz o"squawk box will be right back.

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♪ ♪ welcome back, everybody. 2024 is set to be a big year for weight loss drugs, as novo nordisk and eli lilly both prepared to release the latest developments for their products,

including using them for more than just obesity. that could give these drugs the potential to be covered more broadly, such as by medicare. joining us right now is dr. scott gottlieb. he is former fda commissioner and a cnbc contributor. he also serves on the boards of pfizer and alumna. and dr. gottlieb, first of all, good morning, and welcome. second of all, let's talk about what these drugs -- for 2023, it was huge for these drugs. what are these new developments? what do you expect to hear? >> a lot of data will come out this year that will be important to building the thesis around these drugs. analysts expect upwards of 14 million people to be on these medicines by 2030. that's about 5% of the proposition. right now you have about less than 2% of the population on these medicines. and i think you'll see continued growth and fast growth. it's really going to turn on two trends that will start to unfold in greater magnitude this year. first, success, demonstration of success in preventing other

comorbidities that are associated with weight gain like dementia, like obstructive sleep apnea, cardiovascular disease, which we saw data on last year, and continued innovation in the pipeline. follow-on products of novo and lily as well as other companies have in development, and different pathways in addition to glip-1, that so far in early stage trials have shown more substantial weight loss in the existing class of drugs. sometimes associated with fewer side effects. on the first point, novo was really the first company i think to put out substantial data showing large risk in the reduction of cardiovascular outcomes, adverse cardiovascular outcomes like stroke and heart attack in patients with known cardiovascular disease. european and american regulators are reviewing that data right now for a proposed label expansion for novo's drug wegovy. that should happen by june. that will be a major event in driving not just utilization of that drug, but also reimbursement. lily for its part has a number of trials underway, some of which will read out this year

for its drug, zepbound, looking at things such as obstructive sleep apnea, where you're expecting data probably in the first quarter of this year, and in heart failure, where they're expecting data in the second quarter of this year. if those studies come in positive, it will build the thesis for drugs and events that are associated with weight gain. >> are these really miracle drugs? that sounds amazing if it plays out. do you worry at all? >> well, look, i think a key question remains whether or not the mechanism of these drugs, which still isn't fully understood, is going to end up treating a broader range of conditions and chronic diseases, as you achieve the weight gain associated with these drugs. there's a lot of metabolic imprinting that happens in adapose tissue, fatty tissue, and there is some research that says that you're resetting the body's metabolic state. and that's driving the magnitude

of some of these secondary benefits you're seeing from the substantial weight loss that these drugs help induce. if that thesis continues to build, and there's going to be important data coming out this year, combined, both companies about 15 trials underway looking at secondary benefits of these drugs in diseases that are associated with weight gain. if that data continues to come in positive, which the celeptro, that will build an important thesis for the much broader use of these drugs in a lot of conditions. >> and a lot of these secondary benefits clearly coming from just losing weight and building a case for insurance to cover more of these patients and more of the spending. where are we at with how much insurance is covering? what are the qualifications and how could that affect the growth of these drugs going forward? >> yeah, right now, insurers are being difficult with coverage of these drugs. they requiring prior authorization. a lot of them accommodate use of other strategies to help reduce weight in association with these

drugs. i think that's to put some burden on patients, making choices about using these drugs. but the reality is that both companies are constrained right now by supply and the expectation is that whatever supply comes on to the market is going to get used and going get reimbursed, as coverage continues to build lthrough the decade. i think as you start to see trials come out showing the substantial risk of adverse cardiovascular outcomes in a largely well-treated population. that population was treated with statins and hypertension medications, as you start to see data like that come out, assuming these trials will be due out this year, continue to show that kind of positive trend, that will put pressure on insurers to cover this. you'll see cardiologists wants to prescribe this drug, because it opens up a whole new way to reduce risk in patients and medicare will end up covering these drugs as well, probably by 2027, 2028, it will require some intervention from congress, most likely. >> scott, we're almost out of time, but very quickly, anything else we can look forward to in

2024? honestly, i'm sick of hearing about all of these weight loss drugs. i hope there's something else exciting being developed. >> look, there's going to be a lot of things coming out that are in pipelines right now. i think you'll see continued advancements with cell and gene therapies this year. there are a number of cell therapies that are being studied right now, where the fda will make decisions. also, continued recognition of the benefits of cell therapy and some autoimmune diseases like lupus, that could be a very big outcome. >> that is something to look forward to. dr. gottlieb, thank you. still to come on "squawk box," a dozen reasons to remain bullish in 2024. markets and his outlook for the economy. and then tech investor dan niles will tell us while meta is still his favorite megacap for the new year. "squawk box" will be right back.

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good morning. welcome back. stock futures starting the year in the red. major averages pointing to a lower open across the board. some of the biggest names in technology weighing down the indexes in the pre-market. going to speak with top tech investor dan niles about his top 2024 picks and could we see an independent unity presidential ticket upend this year's

presidential race? we'll ask former senator joe lieberman about the goals of his no labels push. the final hour of "squawk box" begins right now. good morning, everybody. welcome to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with mike santoli and robert frank. joe and andrew are off today. and right now, it looks like the u.s. equity futures are in the red pretty firmly. take a look. you'll see that the dow futures are now off by more than 200 points. nasdaq is down by almost 200 points. s&p futures down by about 35. and this could put the santa claus rally gains at risk. that period ends at tomorrow's close. in the meantime, all three major averages on nine-week winning streaks for the s&p 500. that's its longest stretch in close to 20 years.

for 2023, the dow ended up by 13.7%. the s&p 500 was up by 24%, and the nasdaq composite was up by more than 43%. the nasdaq 100 was up by 50-something. >> i think 54. >> 54%. so pretty darned good year. treasury yields this morning are looking right at around, well, where they've been. the ten-year is yielding just under 4%. two-year is at 4.3%. the 30-year at 4.1%. mike? >> a bit of an unwind trade of what happened at the end of last year. you have people who are selling some of the winners and selling also some bonds, which really were up a lot. so 396 on the ten-year is up eight basis points. >> is january also typically sort of, slight correction month for the santa claus rally? not to make too much of seasonality. >> the santa claus rally thing is like this seven trading day period. but, yes, sometimes you get a

big kind of 180-degree effect, where it's just kind of, because of tax reasons, but the january effect is really the outperformance of small caps and laggard stocks, is usually what characterizes it. we got that. we got it in november and december. it's unclear. >> and we got the santa claus rally before santa came this year. >> pre-thanksgiving rally. >> yes, exactly. so we have some, you know, house money to maybe play with here in the beginning part of this year. >> speak for yourself. >> "we," defined broadly. among today's top stories, 379 passengers and crew escaping from a japan airlines plane after it collided with a coast guard aircraft at a tokyo airport. video shows the airbus a-350 moving down the runway engulfed in flames at around 6:00 p.m. local time. japanese media said most of the crew of the coast guard plane died in the crash. the coast guard said the collision involved one of its aircraft that was on the way to the country's west coast to deliver aid to victims of

yesterday's deadly earthquake. we are awaiting, also, new delivery numbers from tesla, but this morning we learned that elon musk's carmaker sold 20% of all evs in norway last year, up about 12% in 20 -- from 2022, i assume. i think less than 200,000 cars are sold in norway each year. >> but it's big in norway! >> a big ev market share. >> he's big everywhere. >> that's significant in a country where about five of every six new cars sold last year, powered by battery only. >> that's crazy, because it's so cold there, too. >> it's also crazy, because norway's wealth comes from oil. >> right. >> but that's always been the irony, exactly. so, yeah, very much early adopters on the ev thing. and meanwhile, computer chip machinery maker says it was barred by the dutch government from exporting some of its tools to china. asml systems are highly sought after for their critical role in

manufacturing some of the most advanced computer chips in the world. the u.s. has recently raised concerns over china obtaining advanced chip making technology. bloomberg reports asml canceled some machine shipments at the request of the biden administration. today, china urged the netherlands where asml is headquartered to be impartial and respect market principles. all right. right now, let's get over to dominic chu. he's got a look at some of today's top pre-market overs. dom, what'd you have fantastic over the holiday? because i saw your early holiday food that you posted on instagram, some of those delicious-looking pastries. what'd you get later? >> so last night, becky, was all about -- we stayed home, first of all, for the new year celebration -- >> we did, too. >> we actually did a party, i don't know if you've done this with your kids, but parties where they do the ball drop at 8:00 p.m., so the countdown -- >> 9:00 p.m., right. >> so we did that and i grilled yesterday. so it was rib eye steaks, some grilled asparagus and couscous was our new year's eve dinner

for the evening. >> so healthy! >> we tried! we always start off this way, right? we always start off this way. i've actually got green juice at my desk. we'll see how long that trend actually lasts. >> i'll bring doughnuts in for you next week. >> you are an enabler, becky, i'll always say that about you and i will gladly eat those doughnuts. shares of apple are lower by just around maybe 1.5% or so, now down by 2%. roughly 30 points of that dow loss that you're seeing on the bottom of your screen is just apple alone. it's just around 300,000. now about half a million shares of trading volume. the dow component iphone maker, biggest winning in the s&p and nasdaq is getting downgraded by analysts over at barclays to an underweight. it was an equal weight or neutral before. the target price gets lowered by about a buck to $160. they're citing amongst other things what to be weaker iphone sales in china. not much better expected for the upcoming iphone 16. that's one of the reasons why in this broader market downdraft, you're also seeing apple shares

lower by 2%. of the other megacap names that will be in focus this morning, you've got can kacorda, and ube and spot any in this mix as well. they're all lower. for meta and alphabet, it's very much about ai-related tailwinds. amazon, it's partly due to its recession-insulated business model and platform. uber's low valuation makes its attractive given its revenue base, and spot any could see some accelerating revenue trends given some of their price increases of products, those shares all lower given the real market downturn. and we'll cap it off with a check on financials, with which many analysts and investors have called a key area to watch in 2024. this morning, shares of citigroup are also lower. they like the risk/reward set-up with better possible return given ceo james frazier's strategy to optimize citi's efficiencies. overall, citi, a lot of the

other financials, a big focus here, robert. i'll send things back over to you guys. >> good luck with that green juice. >> it tastes relatively good, but not as good as a cheeseburger does. we've got that going. >> all right. thank you. it's the first trading day of the new year, and our next guest says he remains bullish on the markets for a dozen reasons. joining us now is ed yardenni, what are your reasons to be bullish in 2024, given the incredible rally we had last year in all the indexes. >> the past two years, i think could be described as years of living dangerously. and we got through them. the danger that was widely expected was a recession. and it under out to be the so-called goudeau recession. it just hasn't shown up. i don't think it's going to show up in 2024, and that's mostly because one of the most bullish things that's been happening is inflation has turned out to be

relatively transitory. i know it gets some backlash on the notion that inflation has been transitory, but the reality is, the year over year percent change in inflation has come down dramatically. and i think the fed's target of 2% could be achieved well ahead of schedule. and as a result of that, the stock market and the bond market have been anticipating that the fed not only is done raising rates, but it's going to be lowering interest rates this year. so, i think those are just some of the dozen things that may continue to work out relatively well. i also think that the market's broadening, which is a very healthy sign. >> yeah, on the point about mission accomplished on inflation, you know, there are still some out there who say, number one, the true lagging effects of interest rate increases haven't really been seen at their fullest yet. and number two, that it's really that last 1 to 1.5% getting down to 3.5 or 3 was the easier part.

it's that last percent that's going to be the toughest and the longest. how do you respond to those concerns? >> well, the reality is, interest rates have already come down. while we're waiting for the fed to lower interest rates this year, and i'm not in the camp that thinks it's going to be 4, 5, or more rate cuts, because i don't see a recession. i think the economy's resilient. the fed is going to be fairly pleased with the way things are going. and i don't think they're going to want to rush lowering interest rates. so i don't expect an immediate cut, which seems to be some of the thinking out there. but bond yields, mortgage rates have come down and housing had what i call a rolling recession over the past two years, and now it's going to have a rolling recovery. there's also evidence that we're bottoming in the goods recession, the retailing recession. meanwhile, the services economy remains very strong. so i think the notion that there's long and variable lags, we've been waiting a long time

for these long and variable lags to have an impact, and they have, in some sectors. but not across the board. with regards to inflation, i think it's turning out to be very spiky. it went straight up, it's come straight down. it does tend to be fairly symmetrical. the risk still is a 1970s-style scenario. and that's really more related to the geopolitical risks that are out there. we had two oil shocks, oil crises in the 1970s. i suppose we're going to have another one in the current situation, in which case we would once again have an inflation scary. but so far, as horrible as the situation is in the middle east, we're not seeing it affecting the price of oil at all. quite the opposite. the price of oil has been coming down since the start of the gaza war. and that's because there is just a lot of supply and demand, especially out of china has been very weak. my bottom line in all of this sb we didn't have to have a

recession in order to bring inflation down. the chinese did it for us. they have had a recession, and their prices have come down. and that's been good for us. >> they're definitely -- china has been one of those upside surprises, at least for us. they're exporting some of the deflation that they're seeing. >> yeah, you mentioned earlier that you perhaps aren't aligned with the market. the market is expecting six or seven cuts this year starting in march. do you think there could be a pullback in equities if they don't get a march cut or there's some language in the next couple of fed meetings that indicates that maybe they're not onboard with six or seven, the dot plots just don't show that. right now, they're showing i think two or three cuts and the market is ignoring that. >> well, i tend to focus on the fundamentals of the economy, but i also look at sentiment. a lot of us pay attention to sentiment and from a contrarian perspective, everybody's bullish. you know, everybody's too happy, coming into the new year. so would you know it, we're

starting off on a negative note here, at least on the pre-market open. before the open. but i'm thinking that yeah, the market may get disappointed. last year, the consensus was that the first half might be pretty bad and the second half might be better, turns out the entire year was pretty good. but if we're going to have to pick which halves of the years will be on the weak side, it might actually be the first ha half. >> thank you so much for joining us and happy new year. >> same to you. >> when we come back, the year ahead in media. matt belloni will join us to talk acquisition targets, rebounding and what to expect at the box office. and the state of the presidential race and the chances of a so-called unity ticket winning in november with former connecticut senator, joe

lieberman. right now, as we head to a break, check out chairs of block. deutsche bank flagging the company as one of its top payment picks for 2024. the shares are lower this morning with pre-market losses you can see right now off by about 1.3%. stay tuned. you're watching "squawk box" and this is cnbc. knock, knock. number one broker here for the number one hit maker. -thanks for swinging by, carl. -no problem. so what are all those for? uh, this lets me adjust the base, add more guitar, maybe some drums. -wow. so many choices. -yeah. like schwab. i can get full service wealth management, advice, invest on my own, and trade on thinkorswim. you know carl is the only front man you need. (phone rings) oh, i gotta take this, carl. it's schwab. schwab. (feedback rings) have a choice in how you invest with schwab.

welcome back to "squawk box", everybody. the futures this morning have been under pressure. it's gotten worse as the morning's gone on. dow futures are now down by about $215. nasdaq futures are actually down by about 200, too. and the s&p futures are off by 36. pretty unusual to see this, because we've gotten very used to gains just about every morning. but here you have it. first trading day of the year, and you have some red arrows. also, check out bitcoin this morning. it initially topped $45,000 last night. that's the first time it's done that since april of 2022. this morning, right now, $45,543. all right, 2023 was a big year for hollywood, with dual strikes slowing down production, streaming competition heating up, and the possibility of more media consolidation. joining us now to talk about

what he sees ahead this year is puck's matt belloni. matt, good morning. >> morning! >> you know, i'm a regular listener to your podcast. i know you've been chronicling in detail this reckoning that the media industry underwent last year. and the strikes in particular, along with the maturation, if you want to call it that, of the streaming economy, and all of the different economy's efforts, it's led to this period now where i guess there's a re-assessment of how much do we spend on new content, how much scale do we need to navigate these waters, possibly by way of consolidation. so what do you expect thematically and maybe even specifically in the way of deals this year? >> i mean, re-assessment. i would say a reckoning is going on in hollywood. and the assessment is if you're not netflix, which has reached profitability and scale in the streaming business, all the others are chasing it. and they're really trying to squeeze at least a little bit of profit out of these streaming services, and it's very difficult. so we're going to see some

consolidation in 2024. it's almost assured. the real target right now is what to do with paramount global, which has paramount plus, the paramount movie studio, a bunch of cable networks that nobody wants. that, i think,has to come to some resolution in 2024. whether it is sold for parts, whether it merges with comcast or with warner brothers discovery, which do a deal after its april tax deadline expires. something will probably happen with paramount global, because it's getting pretty dire there. >> yeah, i mean, warner brothers discovery can do a deal and not jeopardize its tax-free status as the spin-off. doesn't mean the market wants them to do this deal. when you saw the reports come out with some detail, warner brothers' stock goes down. a lot of investors thought this was a debt reduction story and a cost-cutting thing. it feels like nobody is really playing with a winning hand.

>> no, and that's if paramount global is sold as is, or as a whole. i think the realization on the part of shari redstone, who's the controlling shareholder at paramount global, is there likely needs to be deals to take assets off her hands. whether it is b.e.t. that asset is -- they're in talks to sell that now to a management-led group, or whether it's the paramount studio, which does have value to a streaming service like netflix or amazon or even a traditional legacy player. she has resisted that. and she wants to either sell the whole for a price she deems fair, or hold on to the asset. both of those options are looking increasingly unlikely. so we may see some pairing off, as she's done with simon and shuster, the book publisher, already. >> yeah, second time around, they managed to sell simon and

sho shuster. now, i guess the one way that's looking at it that's slightly less dire is some kind of new equilibrium is emerging here. you did see the charter deal kind of -- trying to find a new way of bundling things, with streaming, with linear, and it seems like that's where we're headed. the question is, you know, who's better positioned for that? arguably, setting netflix aside, disney has the ingredients to have a bit of a head start there. >> absolutely. and i think this year, we will finally see the resolution of the hulu question. because disney is in the process of buying all control of hulu pack from comcast, which still has 33%. now, they've written an $8 billion check and they're currently in mediation over how much more disney will have to pay, but if disney can figure out how to bundle hulu, disney plus, and espn plus into one service, they currently sell them as a bundle, but in one super service, perhaps that could be the answer there.

i think we're also going to see more of the streaming services bundling together in different packages. we're currently seeing verizon sell max, the warner streaming service, and netflix together for a $10 price. apple and amazon would very much like to bundle all of the services for one price, whether it's $100 for five or six of them or some kind of deal that can get all of the services sold through the apple or amazon interface. roku could be a player in that space. everyone seems to think that bundling is the answer here, because they have an example. the cable bundle, fantastic business. but it's unclear how that's going to shake out in streaming. >> yeah, for sure. and of course, you mentioned all of those different company names, they're also bidders for sports rights. a lot of them coming up this year, big part of that story as well, matt. appreciate the time this morning. happy new year. >> you too. coming up, what to expect from the retail sector and consumer spending this year, and

tech investor dan niles joins us withisop h t picks for 2024. we'll be right back. ice bath a. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

a market alert for you, folks. chevron announcing that it will record an impairment charge to a portion of its u.s. upstream assets, mostly in california. the company says that continuing regulatory challenges in the

state have resulted in lower anticipated future investment levels in its business plans. chevron is also recognizing losses related to the abandonment and decommissioning obligations from previously sold oil and gas assets in the gulf of mexico. the company says that it expects to take up to a $4 billion impairment hit in the fourth quarter. that stock for the one year off by about 16%. this morning, it's up by about half a percent. coming up, former connecticut senator and vice presidential candidate joe lieberman joins us to talk about the state of the 2024 race and his no-labels push for an independent presidential ticket. stay tuned. you're watching "squawk box" on cnbc. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

welcome back to "squawk box" on cnbc. opening the year with some weakness in the major equity indexes. s&p 500 set to be off almost two-thirds of 1%. dow down 200 and the nasdaq leading to the downside, as investors sell some of their 2023 winners, it seems. you don't have to pay taxes if you sell today for 15 months, if you don't want to, so. >> not a bad deal. less than two weeks to go until the iowa caucuses.

our next guest wants to create a unity ticket for 2024 presidentials race with potentially a democrat and a republican as running mates. he's been coming under fire for doing so. we want to welcome former u.s. senator joe lieberman. he is a former vice presidential nominee, founding co-chair of political group no labels, and senior counsel with kasowitz benson. and sir, thank you for being with us this morning. >> thank you. great to be with you. >> senator, let's talk a little bit about no labels and your plans for 2024. the idea of taking a republican and a democrat and putting them on the ticket together, how does that do when you poll people and ask them? >> well, right now it does pretty well. no labels was formed in 2010, to try to break the partisan gridlock in washington, get our elected representatives there working together to get something done for the country, instead of just fighting each

other. and we've done pretty well at electing centrist republicans and democrats to congress and have been responsible for some of the big accomplishments like some of the infrastructure bill and chips, et cetera. but this time, as we approach the national election, our members felt very strongly that both parties were headed towards nominating candidates, former president trump, president biden, who are not popular. and if you ask me, the american people, are you satisfied with the choice of trump and biden for president, 60 to 70% say no. and for us, beyond the unpopularity of the two potential unlikely presidential candidates is the fact that if either one of them is elected, politics in washington is unlikely to be less partisan and more productive and more problem solving. so, we as an organization are

working really hard right now to qualify a third line for third choice on the ballots across the country. and if we think that we can do it constructively next year, we'll offer a line to a bipartisan unity ticket, which is really unprecedented, at least since abraham lincoln. but our country is in such tough shake politically, it needs to be shaken up in that way and maybe this is the moment. right now, we're just creating an option and we'll see if we're able to use it next march or april -- >> this march -- >> the following year. >> that's right, we're in a new year! >> 2024. >> sorry. >> that's okay. i think you are on 12 state ballots at this point. i think your goal is to get to potentially 34. and that's great, but if you're

not on the blot in all 50 states, i don't know how you think you stand a chance of winning. i see how you could disrupt the election, but i don't see how you could have any shot at winning. >> good question. this gets us into the weeds a little bit. i'll do it quickly. as a nonprofit political organ organization, we can work to qualify for a third line on the ballot, but we can't do it in more than 34 states, based on the law of the states. after that, if we nominate a ticket, or offer a line, let's put it that way, more accurately to a ticket, they'll declare that ticket -- bipartisan will declare under the federal election commission and then it can qualify for the ballot in the remaining 16 states. but we're really focused -- you know, the way the electoral collection has sweepd up in

recent elections, it's the so-called swing states that really determine who's going to be our president. and so we're really working hard to make sure we qualify in every swing state. and we're doing really well at that. we're working now in 27 states. this is the part of what we're doing that keeps me up at night, as they say. but all of the people running the ballot say that we're right on schedule and they're confident by the time we decide whether to offer our lines to a bipartisan unity ticket, that we will have achieved ballot status in 34 states. and then the ticket can take it from there. >> senator, some of the skepticism about no labels comes from the fact that you mentioned it's a not for profit, therefore, it does not have to disclose who their donors are and there's no contribution

limit. you've raised something like 60 billion with the aim of raising more this year, but we have no ability on who those donors are, except to say, we do know that most of the donations have come from a small number of very large donors. why not just disclose them? >> well, really to respect the privacy at this point of the people who are contribute ing. that's the law. incidentally, some of the political organizations that are attacking us for what we're doing have exactly the same legal status we have and don't disclose their donors. but just let me assure everybody that all we can do at no labels is to qualify for the ballot. a third choice line. then we turn it over to a bipartisan unity ticket, and that ticket has to file under the federal election laws and

all its donors would be established, the way every other presidential candidate donors are. so there'll be a lot of time for full disclosure, when and if there's actually a bipartisan unity ticket running next year. i think the american people are yearning, almost demanding a third choice. they're fed up with the two major parts. almost half the people in our country today if you ask them say they're independents, more than twice as many who say they're democrats or republicans. and that is a market rejection of the two major parties. people are crying out for a third choice. they want their representatives right up to the white house in washington to stop fighting each other and start fixing some of

our major problems, like immigration, border security, national debt, and the quality of our education system. really what our future is all about. >> which gets to the question of who would be on the ticket. joe mentioned has been mentioned as a potential candidate, larry hogan. w who would be on the ticket? >> well, not clear yet. i mean, joe manchin and larry hogan are both bipartisan centrists with great records. and if they were interested, they certainly deserve consideration. i'll tell you right now, no labels is focused on getting that third line on those 34 state ballots that we can, but we've also begun to ask our members across the country for their suggestions, and individually, we're beginning to reach out to people who we think might be great candidates and ask them if they're interested.

and right now, nobody is saying "no," but nobody is saying, yes, i'm ready to declare. it's a big decision and we expect this month, we're beginning to formalize the process. we're going to have a committee that will consider the candidates, vet them, see which candidates are ready to go, and then that committee will make a recommendation to a convention, a no labels convention, which will meet probably in march, maybe april to nominate a ticket, if there is a ticket to run. we've said we'll only do this if it's constructive and we can make a real difference in our government and our politics. and secondly, if we can get top-tier candidates to be willing to right now a bipartisan unity ticket.

right now, i think we could do both. but we're going to have to make a tough judgment in a couple of mon months. >> so a couple of months is really the timetable we're talking? this has to be figured out? >> look, it could be -- we've said earlier that we would wait until after spruper tuesday, th big primary day in march. because recent history says that both major parties will know definitively who their candidate will be. right now, it honestly could be earlier. i mean, both president trump and president biden could pretty obviously be the candidates of their parties by some time in february, based on the results in the early caucus and primary states. and if that's the case, then we'll swing in and see if we're ready to offer the american people a very different from trump and biden third choice of a ticket that has a republican

and a democrat on it, and is committed to restoring national unity, really, and stopping the nonsense that goes on in our government in washington these days. >> senator lieberman, thank you for joining us. and we hope you'll come back and give us updates. we appreciate your time. >> i look forward to it. thanks. i appreciate the conversation. have a good day. >> you too. we're still waiting delivery numbers from tesla, but in the meantime, phil lebeau has just the numbers out from rivian. phil? >> robert, the numbers for rivian in the fourth quarter coming in in line and basically a little better than expected production wise. let's start first off with q4 deliveries, just under 14,000. the consensus was for 14,000 vehicles to be delivered in q4. production, 17,541 for the fourth quarter. but for the full year, coming in at 57,232. remember, the guidance from rivian was 54,000 vehicles

produced for the year. better than expected in terms of production. full-year deliveries topping 50,000 vehicles. there you see shares of rivian, down a little over 5% right now. but again, on the production side, robert, better than expected numbers from rivian for all of 2023. back to you. >> what do you think might be behind this pre-market drop given that delivery numbers came in 57 instead of the estimate of 54. are there margin concerns or? >> i think there are going to be margin concerns there and a few questions in terms of, well, you built more vehicles than expected. how come the deliveries didn't increase a little bit more? but that's really getting nitpicky in terms of what the investors might be looking at at this point, robert. >> stock also up 35% since late october, so could have sthomethg to do with a little bit of the pullback as well. >> coming up, all about the 2024 retail landscape from malls to ecommerce.

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holiday shopping finally at a close. so what have we learned between november 1st and december 24th? retail sales were up 3.1% year over year. that's according to mastercard spending polls. that number fell below an estimate of 3.7% spending growth. joining us now to talk about the softer than expected numbers and

what to expect from retail in 2024 is steve sadoff, thanks so much for joining us. happy new year. >> happy new year! >> so what was the big message? what was your big takeaway from holiday sales. >> you know, i think that it was a solid holiday season. and it was the first time that we're, what i would call back to the pre-pandemic normalized types of behavior. you saw online growing faster than stores, about 6.5 to 7%. stores growing about 2. 3% growth, 3.1% growth, more or less in line with inflation. and the supply chains weren't broken. it was an early -- it was a promotional season. and it was what i would call a normalized promotional period. it wasn't deep discounting. it was normal promotions. the next step, we'll be seeing what the margins look like, but i think is going to be probably a healthy margin season for the retailers. so this to me is the best

predictor of what next year is going to look like, which is, we're a bit back to normal in terms of done with the pandemic, types of dislocation supply chains, promotions, brands. we're back to what retail was all about, which is innovation, branding, and a consumer who is expecting value. >> one of the trends we saw leading up to holiday sales was that the more discretionary the items and the more expensive the items, the less consumers wanted them. what did we see this holiday season with regard to really the discretionary stuff, electronics, jewelry, some of the, you know, non-essentials or even non-gift friendly products? >> i think you're right. these were the categories that didn't fare as well. you saw jewelry down a couple a percent. electronics essentially flat. and those were the growth -- the growth was in restaurants, it was apparel performed pretty well at plus 2%. these were the categories that

were the self-gifting that weren't as big ticket. you continue to see travel performing extremely well. i think it's really an interesting period of time. we're back to the return of the brands. you look at some of the imagery of brands, the coaches of the world, the lululemons, those did extremely well, i think, during the season. value continues to play. the walmarts, the t.j.xs, i think target is coming back nicely. this is a period about branding and a period about not the gifting, the luxury sector, much weaker in stuff, but still doing very well in experiences. >> yeah, that would certainly be the trend both before and after the pandemic. steve, thanks so much for joining us and happy new year. appreciate it. >> take care. and the tesla delivery numbers are just out.

phil lebeau joins us for more on that. phil, you're back! >> reporter: i am, becky, these are better than expected numbers from tesla in terms of topping its own guidance, as well as better than what analysts were expecting. let's start first off with q4 deliveries of 484,507 vehicles. the street was expecting closer to 473,000. better than analyst expectations. and because of those deliveries topping 475,000, they topped their full-year delivery guidance of 1.8 million vehicles. officially, it's 1.808 in terms of 1,808,000 vehicles dloeliver in 2023, and the tesla's guidance was for delivering 1.8 million vehicles. fourth quarter production, just under 495,000 vehicles. we will get the fourth quarter and full-year financial results after the bell on the 24th of this month. so, what, three weeks away in terms of when we hear from elon

musk, in terms of the set-up. and that's also, by the way, guys, when we are likely to get the company's guidance for deliveries for 2024. that's when we will probably get them, again, three weeks from now. guys, back to you. >> phil, you got anything else up your sleeve? >> no. you never know, though. >> we'll wait. thank you, phil. we'll see you later. up next, tech investor dan niles joins us with his top picks for the year ahead. stay tuned, you're watching "squawk box." it's 202anth icn.4 d iss bc in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

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tech by far the top sector in 2023. it gained more than 56% with a lot of that concentrated -- connected to the performance of the magnificent seven stocks as we get ready for opening bell of 2024, a little more profit-taking in tech stocks. let's talk with dan niles, founder and portfolio manager at the sat tory fund. talk about the approach to this year. we have a lot of calls with the magnificent seven, probably overrepresented in terms of leadership last year. some of that started to change in the last two years.

how are you setting your game plan for 2024? >> the way we're approaching this next year is we've got a combination of offense and defense. on the offense side, we've got two of the magnificent seven as top picks for 2024. those two picks are amazon, which tends to gain share during a recession, but we also think it's got a lot of profit margin expansion potential going into 2024 based on all the capacity they've built during covid. the second one we think is meta. that was actually a topic of ours for this past year. it was the second performing name in the s&p 500. if you look at it, the revenue growth was 15%, but you can get it at just a 25 multiple. you compare it against a name like apple, for example, which got downgraded today by another firm, and apple had negative 1% growth this past year. you can buy that at 30 times. so i think meta is a good

defensive play in that example as well. and then we've got two etfs in the biotech etf, xbi, k-web which has been underperforming for three years just like the biotech etf. and then we have texas instruments where we think, the stock is only up 3% last year, yet the semiconductor index was up 65%. ti went into the downturn before most of them. we think they'll come out of the downturn faster than most of them. >> i'm interested in your defining meta as at least a relatively defensive bet fundamentally. if you went back a year ago when you did pick it, the story was, the stock has been beaten down. the street doesn't really believe in the company. they're doing this year of efficiency. they're going to be getting

margins way up. a lot of that has come to fruition. it feels more like a consensus pick today. people have been riding this rise in the stock this year. you still think there's more left in the multiple expansion story perhaps? >> not so much the multiples, but you bring up a good point. if you look at last year, it really was all about the multiple. you take apple, for example, up 45% or so, and you look at the eps. the eps is down almost 10% from where it was a year ago because the numbers have been coming down all year. what's really driven the stock to your point tore the magnificent seven in general is multiple expansion. if you look at meta, you've got a couple of things going on. number one, they're using ai really well to increase the monetization of their adds and also using it to increase recommendation of their videos. don't forget we've got an election coming up. this is going to be probably one

of the most hotly contested elections we've ever seen. it should help drive ad pricing up which should help meta. then from an outside chance, we've been talking about glasses and mixed reality and all of this stuff for a really long time. meta's collaboration gray band where they're introducing something you can wear on your face, you might actually wear, unlike the ski goggles that apple introduced at 3,000 bucks, you have something that might have an outside chance at the end of next year being the way that people choose to use ai and something they can just wear and say, hey, meta, and get it to work. that's why we thought long and hard about these set of names. i think meta had a nice combination of defense as well as offense in there. you're right. it did great last year. when we picked it, everybody hated it. now everybody loves it now that it's triples. i think it still has a good

chance of doing well because it has a good valuation at a reasonable growth rate. >> the k-web, is that purely a mean reversion thing? it's been down so long it's got to pick up. it's an obviously very, very destained area of the market. >> this is the one i had to think about the most, quite honestly. everyone you think the chinese government has stopped beating up on these companies, they come out and do something else. from my perspective, actions speak louder than words. the one thing i've noticed is that china has stepped in and started to buy the etfs around their stock market very recently. that started in august, picked up steam in december. if you look at k-web, it's down 2% to 3% below the lows set during covid, below the lows set during calendar '22. now, if you look at the fundamentals, though, you can

take the three most recognizable names in the k-web which is baidu, alibaba and ten current, you can buy them at 13 times pe. for comparison, the magnificent seven, you're paying 34 times. if you say that's all about growth, it really isn't. if you look at the last three years since china really started going after these companies, the revenues for those three i mentioned are up 33%. the stock prices for those names are down 53%. you compare that against the magnificent seven and you've got revenues that are up around 50% plus, but you've got stocks up 65%. so that's a very big valuation discrepancy between 13 times for b.a.t. versus the magnificent seven sitting at 34 times. i think the fact that china stepped in to start defending

stock prices at a certain level, that's kind of what pushed me over the edge on this versus some other names i've been considering. >> dan, appreciate it. we'll monitor these and be back to you throughout the year and see how you do. >> thanks a lot. let's get a final check on the markets. this is the first trading day of the year. so far things are not looking too great, at least not for the bulls. dow futures down by about 200 points. nasdaq off by 160, s&p off by 31. of course, anything goes. mike just pointed out this is a lot of people selling winners for the tax season. >> you would think on the margin, a lot of stocks with huge appreciation in and maybe you want to wait until today. countering that, you'll have mechanical new money getting into the market. we'll see how it shakes out. it was down in the first day of trading last year as well. >> an incredible run for the last nine weeks of the year. we did see 2023 with really

great records it made up. we'll see how things shake out. treasury board, ten-year is yielding 3.97, two-year is at 4.34. oil prices -- >> up a couple percent. >> up 2.5%. mike, robert, thank you for being here. we'll see you back here tomorrow. make sure you join us then. right now it's time for "squawk on the street." good tuesday morning, everybody. happy new year. welcome to another year of "squawk on the street." i'm david faber with jim cramer. we're live at the new york stock exchange. carl has the morning off. let's look at futures as we get started with trading on the year. about a half hour from now on the new york stock exchange, you can see it right here. we're looking for a down open. let's get to some news out as well. tesla production and deliveries ar