so if things do slow down, joe, these companies have kind of high earnings resilience which is kind of gdp into sensitive. that's important as the year progresses. we're seeing negative economic prints, ism services almost down -- >> we're out of time. i'm sorry. i hate to cut you off, eric. >> no problem, joe. >> make sure you join us tomorrow. "squawk on the street" is next. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla. cramer is in the jpmorgan health care conference in san francisco. david faber at hq. s&p now once again within 1% of all-time highs. ten-year yield just north of 4. light day for david. s&p within striking distance of

a new record, coming off the best trading day since november. >> nvidia shares hitting a new all-time high. it is the outlier of the magnificent seven stocks this morning, pointing to further gains in the open. boeing shares, they continue to slide a bit as more loose parts were found on max 9 jets. >> let's begin with the markets. after yesterday's rebound, jim, specifically the rebound in tech. a lot of discussion today about the renewed enthusiasm for ai, ces, semis, crypto and the like. >> it looks like it was kind of a pincher move. they came in with health care and talked about all the work they're doing for discovering new drugs and also for making a better colonoscopy. not something we want, but, yes, have to have. ces has the next generation ready for pcs.

david, the democratization of tech that nvidia is offering now, it's not just the enterprise. it's individuals. very exciting for people. >> jim, when it comes to nvidia as well, there's no shortage of other questions and/or rumors or things of that nature. let me throw things your way. would they ever consider setting up their own cloud to compete with the likes of amazon or microsoft. obviously incredibly important customers for them. but given they make all the chips that everybody wants, is that something that's been discussed? >> no, because jensen huang in some personal discussions i've had with him has fantastic relationships with mark zuckerberg, with amazon. what he speaks of when he talks about them is, look, they're trying to make their own chips, but they're fantastic partners. that would surprise me because jensen huang is someone who comes in peace, as he says, and is not about to upset the apple

cart. >> interesting. again, something out in the marketplace, and in no way, shape or form am i indicating that i think it's true, jim. those are the kind of things that are discussed. how many of these businesses get into each other's business in some way becomes sort of a question. >> when he's spoken -- really there was an amazing discussion he had when he went to snowflake. he discussed about how even though snowflake thought perhaps there's another way to be able to get nvidia's chips down in price, one of the things that jensen said, we've spent years doing this. we're not about to just give in. what it was like, he defended his turf but also said everybody else is pretty happy with what they can get except for the chinese. the chinese are obviously upset they can't get the latest and greatest. meantime, jim, oppenheimer nvidia topic. they say it suggests the group

should be up 11% this year followed the inflection last year. edward denning looking at the forward pe which has come down from the mid '80s to the mid 20s alzheimer's he argues the street has come down to what has been his longstanding productivity thesis. >> when i first met the people at nvidia, i thought the stock was turning at 80 times earnings, it turns out it was 1 times earnings because there was so much in the pipe. all people can talk about is they were never able to come up with genetic computations that would be quick enough. it might take months and months to figure out what might be good. now it's just seconds. everybody is so excited. the nvidia presentation jammed as people realized it's a health care company. we also realized it's a gaming company. nvidia is everywhere.

why can't nvidia be a more powerful company? i would say general seng wong would say the reason we're at a trillion johns is -- nvidia is so exciting, david. people just don't understand, this is all the brain child of jensen who said if you move things fast enough and you're going to be bigger than the iphone, bigger than the internet, bigger than when the pc was first invented, a lot of people here think he's right, david, thinking he's creating a whole new way to do computations. >> at the beginning of what's going to be an immensely big year in terms of language models and artificial intelligence overall, and potentially applications in health care. jim, i had a chance to listen to your interview last night with the roche ceo. you were trying to lead her there, how are you leading

artificial intelligence to create -- i think it was vaccines. is that right? >> what everyone is trying to do with artificial intelligence is speed up the process. i didn't see it coming. i didn't know what a power roche is in tech. they are ooh dominant cancer franchise. you have to compute quickly to take the data and make something with it. i didn't know it's blink of the eye. data would be taking months with their hundred smartest people and get nowhere because they can't do it fast enough versus nvidia doing it in seconds. that's the way you're going develop drugs. i was so impressed. carl, nvidia is revolutionizing everyone. i'm sure gaming which is what jensen was most excited about, they were ready for this. they did not understand why people -- i remember when nvidia, when i named my dog nvidia, and he was like, please,

that's great. tell the story. no one seems to be interested. well, they're interested now. >> yes indeed, as the goldman desk said this morning about yesterday, more than a million call options traded nvidia on the day, one of the largest options volume days of the last year. we'll talk more about it through the course of the hour. let's get to the grounding of those 171 boeing jets following the alaska air blowout incident. united and alaska says they have found loose parts of 737 max aircraft. phil lebeau watched the story into the wee hours of last night. >> yeah. we got ntsb about 10:00 central time from portland. by the way, that's the last one that the ntsb will do out there. they'll shift the investigations back to their labs as they try to analyze exactly what happened on friday night. as you mentioned, both united and alaska reported during their

initial inspections of the grounded 737 max 9s they have in their feet, they found lose parts when they started looking at the door plugs on the planes. it raises the question, when will these planes be approved go back into service after into specifications? or will the faa hold off a little bit and say, okay, maybe we'll wait a little bit longer until we're a little bit more sure this is the right approach. the boeing safety meeting, that happens this afternoon in renton, washington, where they build the max. as i mentioned, the ntsb investigation which has been focused in portland, which is where the alaska airlines max-9 returned after the door plug was ripped from the plane, they found that plug. the initial take last night is the attachments on the plug. i know this is sounding very generic. they clearly did not function the way they were supposed to. was it because there was loose

bolts? was it because they were attached incorrectly? they don't know and won't know for weeks if not months. explaining exactly why that plug came off is going to take some time for the ntsb to figure out. meanwhile, there's going to be a lot of attention in renton, washington. that's where boeing builds the 737 max. and at the facility in renton today, ceo dave calhoun will be holding an all-employee town hall safety meeting. he'll be there with the head of boeing commercial airplanes, chief operating officer stephanie pope who just moved into that job. essentially this is calhoun and the leadership of boeing saying we have to do better. what can we do in order to do better, that this is going to be a primary focus. we've heard thisbefore from calhoun and his team, that safety and quality is job one, as you take a look at shares of boeing as well as shares of spirit aerospace. the bottom line is this, jim, the question now becomes

separate from the ntsb investigation -- and it may takes weeks or months until we know the cause of what happened friday night -- how does boeing -- how do airlines reassure passengers that the aircraft they are building are as safe as possible. >> phil, let's talk about the timeline here. where was boeing in saying, listen, we've got to take your planes out of service versus the faa saying you guys have to take these planes out of service? >> well, that's not boeing's job to say take it out of service. >> but maybe this is when they should have. >> jim, you're asking me, should boeing have called up united, alaska and the six other airplanes and said, hey, something went wrong, shut thing down right away. they were in the mode of gathering facts. i'm not defending them. what i'm saying is that's the job of the f afrjta. they do work in consultation with boeing as well as the airlines.

>> the only reason i said this is because all morning on "squawk," there are people calling for the head of david calhoun. i'm trying to figure out what they could have done better in this particular case. i find that, you know what, maybe anybody who ran boeing would have the same problems. or is calhoun's leadership in real question? >> well, that brings up the question, is this a systemic issue in terms of quality control at boeing. when you look at the max -- jim, it's not just this incident. holes were drilled incorrectly. they need to shut down the deliveries until they analyze it. that's an example of i think a couple months ago. i'm not going to go through whole lists of all the issues. you and i, jim, have talked, many times when something has come up with regard to the max, and there have been some issues with the dreamliner, but not to the extent there have been with the max, which always raises the question, can boeing fix the

culture there? there seems to be this perception that the quality and the quality controls have just not been in place. some of that many people say extends back to spirit arrow systems. at the end of the day, boeing is the company that assembles these aircraft. boeing is responsible for the aircraft. >> phil, one last thing that was interesting in that briefing was the bit about the pilot of the alaska flight and just how cool she remained three miles in the air. >> oh, yeah. carl, we see this all the time. i go back to the southwest airlines where the passenger was partially sucked out the window when there was an uncon tand engine failure. they brought the passenger in. the passenger ultimately passed away. if you listen to those tapes, just like if you listen to the alaska airlines tapes, these pilots are calm, cool and

collected. that's why you have a crew in the front. people say some day we'll have autonomous vehicles. not going to happen in our life times, carl. not going to happen in our life times. i don't think people would want to get on a plane unless they knew there's a crew in the front and that's what they're there for. >> phil, we'll rely on you once again today as we aye wait further details. when we come back, you'll hear what ceos of the jpmorgan health conference told jim. we'll have an interview with eli's david ricks in the next hour. we'll get to samsung, match. some calls on paramount, netflix, paypal and more when we return. (ella) fashion moves fast. setting trends is our business. we need to scale with customer demand... in real time. (jen) so we partner with verizon. their solution for us? a private 5g network.

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♪ ♪ 4 billion people are likely to be obese by 2025. that's a massive market opportunity. for sure there will be many opportunities for many players to be in this market. >> that's roche ceo theresa graham talking about the burgeoning weight loss drug market. jim, what do you think you learned about it yesterday? >> if you don't have one of these drugs, people think you're clueless about the next big move because obesity is epidemic.

diabetes, epidemic. the rush to get one out is to compete against eli lilly and novo nor tis. what i thought was entering about roche is they feel they have the best formulation. you might be able to see something that is less invasive, something that lasts longer, something that doesn't reduce muscle mass. david, people are saying as big as eli lilly is, there can be a giant market for all sorts of different weight loss drugs. you know what, david, it's not going to be easy. novo nor tis doesn't have the capacity. we have david ricks right when he speaks in realtime. >> we obviously spent a lot of time talking about lilly last week and these drugs, given the impact they were having in so

many other companies in terms of whether or not they would restrict sales in certain areas. that still continues to be a que question. could it redefine the category for others. mon jury row was the most effective, reduces weight as much as 22.5%, something along those lines. can you go higher than that if you're a competing drug? is that possible. >> probably only with bariatric which is invasive. david, amgen is trying with a longer acting one-month shot amgen and others working on a pill. we'll speak to pfizer later today. what matters is jpmorgan put out a piece which makes it clear

that people will eat far fewer snacks. carl, it is a wholesale change in what we do and what we use in this country. it's very threatening to a lot of different industries. >> important to note, the ivb, 52-week high yesterday. amgen also gave a look at the market as well. take a listen. >> you also have your obesity franchise. >> we rapidly enrolled in a phase two trial for our lead product, glue mayor tied. it looks like it may be differentiated versus the molecules ahead of us, differentiated in terms of dosing schedule. we're looking at a monthly therapy as opposed to a therapy that las to be used more often.

>> jim, if that weren't a full enough picture, then you have walgreens telling you about the reimbursement model. >> one of the things that's important and jim wentworth from walgreens pointed this out, you don't want it to be expensive. you'd like to have it paid for by medicare. right now they can't do it. i think, carl, everyone is worried about how people might drop out. people don't like to have a shot once a week. there are people who think they've lost too much muscle mass. i'm going to speak to regeneron today where they think they have something that only affects fat, not muscle mass. right now you could lose -- let's say you lose 22% of your weight a. huge percent of that is muscle. if you're older, that is not good news. >> that continues to be a real question i think, jim. one reason why you may not see

it used is not quite as often in the elderly population, given their need for muscle mass. >> not vanity. >> no. thinking of genentech and amgen. remember 30-plus years ago, these were biotechnology. that was it, amgen and genentech. i would point out, amgen's market cap, the same as pfizer's. identical. >> right, but one is going up and one is going down. the latter, dr. bourlo would have to admit, is going down. >> a lot more from you on your second day from the conference. when we return, we'll count down to the opening bell, take a look at the premarket. we'll get to news in the airlines, the semis, soft wear for sure and put into ntcoext the fed commentary we got yesterday when we return. let's check it out. says here it gets plenty of light.

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a cross-country "mad dash," want to talk a little netflix. there was that downgrade over at citi, jim. >> david, total heresy. you're not supposed to downgrade netflix. this is out of line with jason. he's talking about costs being

too high. hef newest mates a tad too high. he's saying there might be potential m&a. you're not allowed to downgrade. where does he get off doing this. >> he indicates there were a lot of lofty expectations in terms of both revenue growth, free cash flow. he thinks costs will be higher than others estimate which seems to be around $18 billion for 2025. he's coming in at roughly $20 billion in costs for '25. >> david, the reason i regard it as heresy is this was in the original faang. this was the end. one of the reasons is this thing went from 100 billion to 200 billion versus, say, disney which is burdened by other things. disney is often compared to these guys. i don't know. how do you feel about that? there are aspects of disney that simply are not as xieth as

netflix. maybe that's because disney plus is very difficult to try to figure out how much it can make, whereas netflix makes a lot of money. >> to get back to the overall, netflix is number one. netflix is unchallenged. the question now is who is going to be number two when it comes to direct to consumer, jim. the fight is on between disney and warner brothers discovery and a number of other players out there as well. that really continues to be the key question. whoever is number two at least would have the hopes of making money in this business. warner brothers discovery is making ever so slightly some money. paramount is not. disney is not yet. our parent company is not. so that's the question, whether or not there are perhaps too lofty expectations for what is clearly the number one player remains a quirks i think, jim. you're seeing a little bit of response in the marketplace. >> netflix is the one you're going to keep.

that's the one that is the water cooler one. it is the one that people talk about their newest program. i still don't have that happening with the other guys. although david zaslav at warper brothers is doing a tiktok, and let's say cutting floor extravaganza for sopranos. who knew they had it. >> guys, let's get the opening bell at that time cnbc realtime exchange. at the big board it is pfizer celebrating the launch of the pfizer small business index. we'll speak with the ceo in about an hour. speaking of small business, jim, nfib, we don't always get to it every month, but five-month high on decreased estimates on sales, earnings, economic trends. >> it is the backbone of the u.s. economy. there seems to be no end to it. by the way, what a fantastic

interview. he is the pulse of small business, the pulse of america. what he touches is gold. i like his stock because he is the head of it. >> jim, obviously m&a has been a huge story where you are. i think $6.5 billion in deals announced yesterday. there's still a lot of lingering reports about further m&a, whether that's in software or some other areas of the economy. >> site toe kinetics, novartis. the ceo is here. i think he may think he doesn't have to talk about it. i'm not going to let him get away with that. obviously he just heard that. there is no preparation other than truth. david, you know you can't have a $9 billion company potential acquisition and not talk about it. that's not fair to the people who are buying it.

>> that's true. in fact, the stock was down at this time yesterday in part because they presented as well, i believe, with jpmorgan. there was no mention made. and/or no announcement, because we came in yesterday perhaps expecting there would be a deal given previous reporting on such possibility. later in the day, as you referenced, the journal reported they were still very close to that deal with novartis. so we'll see. >> should i ask -- >> of course you should ask him. he's probably going to "no comment" you, unless there's a press release between now and then. you've got to ask him. >> i should accept no comment. i should say, sorry about the biggest story out there. if he gives you no comment, talk more broadly. does it fit into your product profile? does it make sense to you?

you know your away. >> i covered homicide. >> hard streets of homicide back when you lived in your car. >> no homeowners insurance. >> by the way, you can't get it now either apparently. so you were on to something even back then. >> you can't get car insurance that easily. you might have been out of luck there. carl, listen, we are certainly seeing plenty of reports of potential m&a. we did come in with the expectation that things would be more robust. it's not hard for them to be more robust than they were last year given things were fairly quiet last year when it came to mergers and acquisitions. we're waiting. we're waiting on this juniper deal. we'll see whether we get these announcements. i certainly did expect coming into the year, given the conversations i was having with many bankers and lawyers, that there would be a more robust

announcement cycle. we do seem to be there. many sayingas well, jim, it wasn't anti-trust any longer number one on the list. it was back to the old issues, social issues, price, things of that nature and antitrust had fallen a little bit in terms of concern perhaps reflecting the fact that many companies are determined to get done what they feel is a strategic imperative if, in fact, the deal is bad for them. >> i'm zoo glad you mentioned it. i had amgen on yesterday. fdc tried to fight the therapeutics deal. there was no overlap. i think maybe the ftc is coming around to what we talk about on our show, that perhaps some deals should be allowed. i think lina kahn has gotten more realistic. i think part of that is because we pound it, pound it, pound it every day. >> listen, they obviously would

say we have such a small percentage of all the deals out there. don't forget, the vast majority go through without so much as a review. that said, jim, i don't expect them to back off as much as, to your point, they have been burned in court. they have yet to win an important victory. they lost to microsoft. they lost in horizon, amgen, so to speak. they did accept some or the of settlement there. you go on from there. what i'm hearing now is more reflective of an m&a environment in the past which is, listen, i've got to be concerned and it may take me longer, but i don't think it's an impediment to me getting my deal done. can i get al lodge if i'm taking the new ceo on, social issueswise. obviously price. these are always the issues. we may return to an environment

like that which would mean, jim, we're going to see more activity. >> remember the ruling in microsoft/activision. a judge basically said, ftc, it's time that maybe you thought about how to do your job. obviously you don't really have a clue. i'm really shocked you brought this case. a lot of times, david, that's a suboptimal way to look at the ftc's work. >> yes, without a doubt. that could be considered a blow. we don't know what the administration is going to run antitrust -- what's called a little more than a year from now. so that comes into consideration as well for a number of companies. carl, back to your question overall, we're waiting to see some of these big deals that have been reported on, but it certainly does feel like we're going to see things in a more

prevalent manner. >> it will be fun to watch when it hams. by the way, broad-based selling this morning. health care the only s&p sector that's eking out a gain. we did have samsung, jim -- down 35. that's six straight quarters of declines, worst in 15 years, along with microchip guidance. what do you think is going on there? >> i think there's two worlds going on. let's not look at the near term. carl, yesterday was a big look at the future and what nvidia is doing. today things aren't so great. david, it always comes back to people saying don't be so excited about apple. samsung is regarded as a proxy for cell phones. yesterday we didn't care. today seems to be a focus. >> apple shares down about 1% after a gain yesterday, an

overall gain for the magnificent seven. although apple is still down 4.6% for the year, similar. where do you come out in terms of all this different noise we did on both sides, about iphone demand, particularly in china, increased competition from the lieshgs of huawei and on and on from there. >> i think the iphone demand in china, we hear it could be down as much as 30%. we do have the very exciting launch of vision probe february 2nd. david, if you're buying apple, you're not buying apple for the quarter. it won't make any sense to buy it for the quarter. you're buying it because you think the franchise is a great one and it can reinvent itself and that tim cook is doing a great job. when it comes to the mefrn, it's the sevenths of seven. it think nvidia jumped ahead because the near term is so great. >> jim, do you think apple will

ever try to -- i asked the question earlier in terms of individual. what about apple and the expectations in terms of them getting involved in their own generative ai effort. obviously into grapting it with the likes of siri? >> well, they do have a relationship. it's not talked about much, with nvidia. they've not been the big buyer of nvidia cards. i think they're trying to make it so everything can talk -- when you use your cell phone, the thing that has not been as great as they'd like is siri. i think they can make that much more involved with artificial intelligence. they have in our lives. they are the -- look, if anyone is going to do anything with the individual, it is still going to be apple. most of nvidia is enterprise, although they did announce a very good relationship with pc companies, with microsoft. right now, david, if you want the individual, it's still going to be apple.

amazon -- of the stefrn, amazon is the one that has the best relationship with nvidia and doing the most. i don't know. i do think people think apple is behind. they just do. >> because i do know that there's an expectation again that they are going to launch their own proprietary large language model at some point that will power siri that conceivably will be more a competitor yet again with alphabet, for example, when it comes to search. you'll be able to ask siri, especially in light of -- back to antitrust, if alphabet loses that big case, they can no longer pay the 18, 19 billion a year they do to be the preferred search on the phone. >> david, i think people have to understand there are two antitrust departments. there's the ftc which has been regarded as amateur hour even though their staff is very professional. then there's kantor who runs antitrust, total heavyweight,

used to be at paulw weiss. if anyone is going to win the case, it's going to be the justice department. you can't lose everything. one of these will go the justice department's way. you think you can? you're not saying anything. >> i thought carl maybe wanted to give in. i was giving him a minute. >> that's all right, guys. happy to listen as well. jim, i wanted to get you on wells fargo. yesterday it was baird, today it's deutsche. they talk about credit remaining volatile. higher level of cre loans on the books than at jpmorgan and bank of america. what do you think is coming friday? >> well, look, i do think that wells fargo run by charlie scharf is fantastic. yesterday's downgrade did

nothing. today's downgrade -- remember, wells fargo has been the best of the big banks. charlie has said over and over again commercial real estate not really an issue. i think they're still waiting for consent decrees. this is the one, by the way. that was at 62 on february 5th of 2018. it is not expensive. david, what happened with wells fargo is the regulators never for gave them, even though charlie has gotten rid of everybody. at what point do the regulators say it's the new wells fargo run by charlie and not the old one run by john stump. >> jim, i assume it's a rhetorical question. it hasn't haptd yet? >> i think it has. i think these downgraders are underest et making what charlie has done. by the way, charlie scharf is kind of a rigorous guy. a lot of people regard him as frankly not that nice. i mean that in the terms of what

niceness is. >> it took me seven years, david. seven years to make it so i even thought he kind of liked me. >> no, he doesn't like you. >> i even like his dogs. >> no, he doesn't like you. he's told me. >> he's got one dog named wells and another named fargo. like nvidia. >> yes got a read on the financials from jefferies, which we always do. stock is up ever so slightly. rick handler, long time ceo made no secret of the fact that it was a tough year in '23. transition year in the economy, in capital markets, in our industry. challenges as well he said. we performed reasonably well. he eked out a modest return on equity, 3.7% is what that was. you can see the stock, though, has hung in there and actually -- has had a pretty good performance over the last year as well.

always take a look at jefferies because it gives a bit of a snapshot. remember, we are looking back with these quarters. the question is is it going to be what we hear on the conference calls in terms of not just the current moment, but the expectations as well. >> david, first of all, rich handler, i know you're close to him. he's a miracle worker. jefferies stock is up. if m&a is back, how can you decide all they're going to do is look at net interest margin. the money made in m&a, david, the fees are huge. >> yes, the fees can tend to be very large, particularly when things get going. it can become a very profitable business for these companies very quickly. yeah, they're a beneficiary, certainly in the financing side as well. if you're calling on the high yield markets and/or the financing markets to help with these deals. you're right, robust m&a market helps not just to them, but

obviously the goldman sachs's, morgan stanley, jpmorgan. not to mention, carl, all the smaller boutiques, the evercore and the like. >> david, while i've got you. i wonder if you found the elliott match story interesting in "the journal?" >> it's a big position. in terms of percentagewise, a large position. don't have a lot of insight to share that on the match thing. i know sometimes we do when it comes to elliott. on this one, carl, i'm afraid i come um a little empty right now. >> jim, we got some fed commentary yesterday from bostik. more enteringly bowman who rolled back herhawkish stance, trying to surpppress back below four here. >> i think the cpi, carl, maybe that's going to make it. look, i don't want to be a dooms

sayer here. if the cpi is too hot, carl, you know a lot of the excitement is going to come out -- >> citi with a nice chart today, looking at baltic, the shipping which has risen, still 50% below the peek. it's clear the red sea has has an impact. the ground transportation index has remained pretty stable in the face of all of that. >> david, morgan stanley -- boy, this is going to be a tough story. trying to figure out how to do this and the a diplomat, kind of like gandhi. mike wilson is turning positive. that's what it seems like. david, if he turns positive, what does that say? >> i'm not sure. is he really turning positive? i haven't seen the language, jim. >> i don't think he's as

negative. he's talking about equity prices possibly going higher, could accelerate. i think if you've been wrong, david, and get a little more positive, what can i say? sometimes you could argue that that's, let's just say -- man, how about ill-advised. >> could be, could be. that said, he had a very good call not that long ago. as we said many times, jim -- >> you mean before the big rally? >> yes, i mean before the big rally. we've said many times it's really hard to follow a really good call where another one. >> that's true. >> these strategists, they get one thing right -- that can carry you. you get one thing right and you're good. >> mike wilson has it. >> marketing is everything. >> you never know. he might be right again. it worries you. you don't like it. it worries you.

>> david, there are nfl coaches -- we haven't talked about the nfl today -- who were really good and they're fired immediately. by the way, did you see the founder of fedex's son was fired -- >> i did, at the falcons. i did, i saw. >> unceremoniously. >> that's a tough job, man. that's a tough job. >> oh, yeah. >> that's why they call it black monday. >> people worry. >> jim, we'll talk more about it after the break. a quick reminder, by the way, you can always get in on the cnbc investing club with jim. find out more at cnbc.com/jointheclub or use the qr code on your screen. as we go to break, we mentioned a light day for data. we'll keep our eye on bonds and jim's point about jitters leading into cpi on thursday. hovering just a shade above 4 with most of the curve in the green this morning. we'll be right back. .

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. s&p laggards led by hpe this morning. the core story in the journal yesterday and reuters this morning, that the company is in advanced talks to acquire juniper for about $13 billion. the gold man desk points out a 35% premium implied and 15% of hpe's market. we'll get stop trading with jim in a minute. dow down 280 to start this tuesday. n'gonyere. it takes years of dedication to get to this milestone. the new york stock exchange is a symbol of what america is all about the potential of an american dream. it is day one. a lot of work has happened to lead to this historic moment. the only way you can move a society forward

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. let's get to jim and stop trading. >> carl, the most quiet of the magnificent seven has been alphabet. today cowen comes out and says business than could be better than expected, youtube taking slight share and it is up and bucking the trend. they have to recognize david is a chartist, i am less a chartist. that is one of the greatest charts i've seen in a long time. alphabet hemay be ready for the

next move. >> microsoft may be facing an eu merger probe after their ties to openai came out and that mess. >> yeah. just write a check to europe. that's what you do. if you're microsoft, how much do you want? a lot of people feel it's a shakedown. i'm more in the former camp they want to say listen, it's a -- it's a monopoly, what are you going to do? just send them a check and move on. >> meanwhile, what's coming up tonight? >> well, i'm doing a health care index. i've got pfizer, i've got lilly. you know, look, i've got cvs. i've got abbott. i have regeneron. i think i'm going to try to put some together right here right now. why shouldn't i? why can't cnbc make some of the money. >> a new revenue silo for us? >> well, i mean, people say campbell doesn't make enough

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good tuesday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla live from post nine of the new york stock exchange. david faber live from cnbc hq this hour. take a look at stocks. down day on wall street. the nasdaq giving back 0.6. some of yesterday's rally. still up nicely for the week. what's lagging, pretty much everything. only health care is higher as the jpmorgan health care conference rolls on with presentations and interviews from cramer.

health care up 0.6. everybody else lower. energy among the hardest hit groups right now along with materials, real estate real estate and industrials. take a look at treasuries. such a focus. we get a three-year note auction a little bit later this afternoon and then 10-year tomorrow which is going to be key. 10-year yield sits above 4%. higher yields across the curve. 30 minutes into the trading session. here are movers we are watching. shares of hewlett-packard enterprise plunging on reports the company is in talks to buy juniper networks for $13 billion deal. juniper shares soaring on the "wall street journal" report. watch unity software, the company cutting 25% of its workforce as it tries to reset its business. that amounts to about 1800 jobs. and we are keeping our eye on shares of boeing, of course, after coming off their worse day in more than a year. another airline now discovering loose plugs in their 737 max 9 planes, we have the latest on boeing a little bit later this hour. guys, we have a lot of fed speak to dig through that's been

moving the markets and catching investors' attention. i think most notable in the last 1 24 hours comes from michelle bowman, was at the hawkish end of the spectrum throughout this inflationary period, she was out front on inflation, one of the first to warn about it because she has close contacts at community banks. guess what? she's pivoted and the markets are taking it as good news. my view has evolved to consider the possibility that the rate of inflation could decline further with the policy rate held at the current level for some time. should inflation continue to fall closer to our 2% goal over that time, it will eventually become, here's the kick e appropriate to begin the process of lowering our policy rate to prevent frols becoming overly restrictive. he she goes on to say we're not there yet, however, i think investors are cheered by the fact that she has completely changed her tune and evolved into a place where she feels good about the decline in the inflation rate and that she's

talking about cuts. carl, you know, these fed speakers are out and they have a chance to push back on the market pricing of the aggressive pricing of cuts this year and they're not doing it that strongly. they might not be at six cuts or march next year. they say we're not there yet, but they're not pushing back. which they have in the past. >> yeah. it's interesting. a couple interesting charts. one is goldman yesterday total household net worth as a share of disposable income near all-time highs. a nice note out of jpmorgan this morning saying this is the first tightening cycle where you had corporate profits rise and interest expense fall, which they argue will keep corporate profitability strong and even as we get maybe a rise in unemployment, maybe it's more gradual than in prior cycles. >> why the cycle was hard to predict and so unusual in that it feels like the companies, corporates, are coming out of it with the consumer in okay shape. the jobs market is in okay

shape. the chart that i made today was on consumer credit, you know, which continues to expand. there was a jump in consumer credit last month from the fed ahead of the holiday spending season and we surpassed $5 trillion in outstanding credit. it goes up and up. is that a worrisome sign? it's a sign that they're taking on more debt, consumers are taking on more debt, david, but coming from a better place because we have jobs and a tight labor market and they're getting wages. so it doesn't necessarily mean that, you know, we have this debt overload and things are falling apart, but it's something we're watching. >> yeah. with a corporate balance sheet it's only a matter of their ability to pay it back, and or meet the interest costs and you would expect that's been enhanced as well. >> otherwise they have to pay 23% to borrow right now, which is what the credit card rate has gone up to. so, yeah, they're in better shape from a better place. although i would flag a few

cautionary notes i saw this morning. to balance, i'm not saying it's all negative, because it's mostly positive. i flagged abercrombie and lulu, american eagle had a strong guidance report out of the same conference, but let's talk about albertson's which had a decent report, one of the biggest grocery companies in the u.s. a quote from the ceo about the current environment for the consumer. we are mindful of a more challenging economic backdrop, including declining federal and state government assistance and higher interest rates and their affect on consumer spending an our business we also expect slower food inflation, ongoing labor investment and significant declines in covid-19 vaccination and test kit revenue. not say that everyone is seeing this broad strength. there are pockets of weakness. the contain store, they preannounced, they warned on guidance that it was going to be lower and they had comments about general merchandise being weak. it's not all good news, but

mostly the consumer is in a better place. it's idiosyncratic where we're getting the warning and sector specific, right. we know that people aren't spending as much money in their homes and organizing as we've seen in years. >> classic action in retail. urban outfitters on their guidance. stock up almost 10%. >> the retailers, i think the holiday season so far has been coming in better than expected. they were all kind of cautious and gloomy. it feels like we're in this confusing time to predict what's going to happen in the next few months. when i talk to companies, i don't know, you're talking to bankers and investors, it's cloudy the outlook from here. on one hand things should be going well, the balance sheets are in good shape, the jobs market is doing well, but there are the lags of monetary policy and it's hard to predict where this goes. >> yeah, it is. i also talked to ceos, you know that too, sara, not just bankers.

>> you know. >> do i know? >> well, okay. so what are -- are the ceos telling you anything about the outlook? >> actually, to your point, there is sort of a positive tone to things and not as much concern perhaps as you might have seen reflected not that long ago in terms of the market or market participants. i do think, sara, there is more positive tone generally, but it's always difficult to sort of foresee what exactly is coming. by the way, albertsons, since you mentioned it, your hometown hero, kroger, they're still in a deal to acquire albertsons but we're waiting whether to see if that divestiture package gets challenged. >> is that this month? >> it should be soon. timeline, we're waiting. it could be very soon but i did want to point that out. you would think otherwise, given they had a strong quarter, that stock might reflect that. really it's deal dynamics in play. >> market has been skeptical about the deal since the beginning, even though rodney mcmullen has been confident and

said they're prepared to litigate. the unions are a challenge when it comes to getting this done. it will be, and i heard your conversation with jim and carl, about how companies are feeling about the antitrust environment. it will be a tell for sure. >> it will. they look uncomfortably to a certain extent at certain divestiture packages given history. we will have to see. you have some strong capital sources in there like softbank and they would say that play they're creating will be competitive. i don't know. i'll leave it to you, given you cover kroger closely. >> you talk to the bankers and the ceos. well, let's hit the overall markets. down almost 300 on the dow. joining us is jeffries chief market strategist david zervos. how are you feeling about the outlook for the market and the economy and the ability to maintain this strength that we have seen? >> well, happy new year, sara,

happy new year to everyone. >> happy new year. >> i think the story is less about, you know, sorting through the difficult data and understanding exactly where this economy is headed after almost two years of fed accommodation removal, and really understanding that what we all like to call the fed put is back, and i think that's what jay has been trying to tell us for the last couple meetings, and he really pushed it in the last one. i think that's what michelle bowman effectively is saying and a few others that were holdouts. i think the committee is telling you they're able now to backstop the economy much better than at any time in the last couple years, if things get messy. that's actually really, really good news for risk assets and for taking additional risk in your portfolio. we haven't been there, sara, for a while, as i said. >> but they're not -- >> to put out this -- >> they're not -- sorry to cut

you off -- they're not saying if things get messy. that's the thing. they're prepared to be less restrictive going forward if inflation comes down, and i think that's the key question for the markets, will they do that without it getting messy? >> i think that's less the key question, sara. i think they will cut 25 in, you know, may or june, highly doubt march [ inaudible ] -- >> oh. too bad. david zervos. we lost you. we'll work on getting the connection fixed and try to bring him back. just as he was about to argue with me, which i like. david? >> well, let's get to the latest on boeing and get david back as well. that stock is under pressure again after posting what was its biggest one-day loss in over a year. united and alaska air finding loose hardware on some of the planes in question following those planes being grounded. let's goat phil lebeau to fill us in on what's going on. phil? >> david, i think both united

and alaska, when they initially started doing these inspections, preparing for what ultimately would be the checklist from the faa in terms of do these inspections, if they're clear, you're good to go. they haven't received the final word from the faa but they did start preparing their aircraft, the max 9s they have that are grounded for those inspections, and what happened when they started looking at them? alaska yesterday saying that they found loose parts in some of the door plugs on max 9s as they were beginning their inspections. alaska has 65 max 9 planes. not as many as united. united earlier yesterday reported that it found loose bolts in some of the max 9 planes that it was inspecting. united has 9 max 9 planes in its fleet. again, they are both awaiting final approval from the faa to do those inspections and then once those inspections, if they meet all of the requirements, that will clear the planes to go back into service.

meanwhile, for boeing, the focus is on rent in washington where they build the 737 max that will be the location later today, boeing ceo dave calhoun holding a safety town hall with all of the employees there and out there with the head of boeing commercial airplanes and boeing's coo stephanie polk who moved into that job, and some of the board members from boeing, they're all there. calhoun's message, i think we know what his message is going to be, we can do better, we have to do better. having said that, we've heard this before from dave calhoun and the leadership at boeing and we'll see if there's anything different as you take a look at shares of boeing, as you mentioned huge hit yesterday and again under more pressure today as we wait to see exactly how it deals with this question of -- or sara, of quality control. >> thank you very much. phil lebeau. let's bring back jeffries chief market strategist david zervos. microphone fixed. >> i hope so. >> what were you telling us as far as a key question for the

market as it relates to the fed and economic outlook? >> i just wanted to point out i don't think the market is focussing in on just are they going to cut a 25 here and 25 there and is it going to be two, three, four or five over the year depending on how inflation goes. i think the market is focused on the fact that the fed's battle with inflation has largely come to an end and we don't have a debate about returning to tt the '70s. he did his job and acted strongly and effectively and the supply disruptions that drove most of this inflation have worked their way through the system and i think the fed managed to anchor inflation expectations the way we had all hoped they would. although there were a bunch of folks who didn't want that to happen, i don't know, for a variety of reasons where they could make more money. i think the important part is that that fed backstop is back, sara, and i think that's what the market is going to be all

over in 2024 and that's a valuable structure to have as a backstop to the market that we did not have in 2022 and 2023. >> are we going to get a bonus backstop in the tapering or end of qt? all of a sudden this debate has really heated up. >> yeah. that's a great question, and i really -- i noticed it in the minutes you did as well. i think they want to stop that. first of all, i think they would like to be reinvesting some of these proceeds back at higher coupon securities. they have a lot of low coupon securities and the fed has a lot of losses realized and unrealized. something we talked about a lot over the course of the year on this program. those are not very pleasant, so i think the more they keep rates high and they don't replenish the balance sheet with higher coupons that they could buy as they mature, is probably something they don't want to do and i think at the end of the day, they're not really sure

where this, you know, qt wall hits and they don't want to hit it. as long as they're not getting inflation and as long as they're done here and maybe cutting soon, why should they still be doing qt? i think it makes no sense in the world. i think you're going to get that bonus and i think the market is going to key off that in a positive way as well. i'm pretty positive coming into this year. we were positive on the high yield markets and we didn't want to make it to equities last year because we felt the fed still had work to do. the equities did great anyway and that's because inflation came down faster than most expected, but now you can really move into the riskier parts of the capital structure of the u.s. economy and feel like you've got a friend in jay powell. he doesn't have to beat you up on this inflation stuff anymore and that's great news. >> david zervos, thank you very much. good to get your views as always from jeffries. as we head to break here's our road map for the hour. back to jim cramer live at jpmorgan's health care

conference with an exclusive interview with eli lilly ceo. >> tech is down again today following that big rally yesterday. is the group close to a bottom or is there more pain to come? >> a seismic shift taking place in the global auto industry. we're going to discuss the fallout. we've got a big show ahead. "squawk on the street" right ckft ts. - "best thing i've ever" that's what freddie told me. - it was the best thing i've ever done, and- - really? - yes, without a doubt! - i don't have any anxiety about money anymore. - great people. different people, that's for sure, and all of them had different reasons for getting a reverse mortgage, but you know what, they all felt the same about two things: they all loved their home, and they all wanted to stay in that home. and they all wanted to stay in that home. - [announcer] if you're 62 or older and own your home, you could access your equity to improve your lifestyle. a reverse mortgage loan eliminates your monthly mortgage payments and puts tax-free cash in your pocket. call the number on your screen. - why don't you call aag...

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hey, jim. >> yeah, carl, thank you. we're with the man of the hour with david ricks, who is ceo of eli lilly. david, first of all, thank you for spend something time with us. >> great to be with you again, jim. >> i cannot believe, everyone says they have to get into weight loss. you are so far ahead. talk to me about how big these -- the both obesity and weight loss could be for eli lilly? >> well, obviously, it's an enormous, addressable market and a huge global health aid. w.h.o. says a billion people by 2050. we know in america today, 110 million adults with overweight or obesity, but the problem really isn't reducing obesity. it's reducing the downstream health consequences of obesity and that's our mission. we're undertaking a 30 base studies to demonstration a reduction in diabetes and

cardiovascular risk. two important studies coming up. one sleep ap nina and the other congestive heart failure, overweight seniors can developed and cost to medicare, so the, citing thing is not just we can help people feel better, but we can make their health better for the long term. >> let's go back to that number one cause of death in medicare. i know if you were just doing weight loss, that would not be covered, but if you're doing heart, david, it must be covered, because the costs so big to the system, when it comes to cardiovascular. >> currently we're left with a legacy rule in medicare which is they can't cover weight loss medications. that was defined when the part d benefit was written into law. now, it's a little bit of a misstatement because already these drugs are fully reimbursed for diabetes, same drug, which we know is highly related to obesity. so i think both lilly and our

competitor will pursue indications that can then be listed, but had he we're not listing the -- here we're not listing the precursor disease, obesity, we're going to list congestive heart failure. i think seniors will have access to the medications but require them to have a diagnosis for one of these complications of obesity. is that smart? i don't think so. we should try to prevent the diseases to begin with, by treating obesity. there's a bill on the hill to propose to change the law, but who knows what congress is going to do. so we're working at that problem both ways. >> now a lot of people feel you can't get the drug. you announced lilly direct. lilly direct great for the consumer, but you said this is not vanity drug. >> correct. very important point. first of all we know there's supply constraints. so many people with real overweight obesity and where we want our medicines to go.

that's where they're studied and we focus our marketing and communication efforts with doctors. want to be clear about that. the other thing we said in that communication, is there are a lot of fake and compounded versions. we cannot guarantee their safety or quality, and people need to know that. now some of that is driven by the scarcity. we understand that. we're working hard to make more medicine. that's a key part of this year for lilly is executing and manufacturing. but we said that as well. we launched the lilly direct side and, you know, people ask, why would you do that? our normal path is to distribute to wholesalers and sell through pharmacies, but a lot of people n particular people with obesity, reported to us how difficult it was to get a doctor who would be willing to prescribe one of these, an obesity specialist, and that's what our website lists the doctors you can see in your neighborhood that have raised their hand and said i have certification in this area, or a telehealth platform that does a great job that only has obesity specialists.

we can ship it directly to your door. pharmacy in the u.s. has changed a lot in the last ten years. a lot of neighborhoods don't have one, rural areas don't have one, and people prefer that option in many cases. we're creating choice so people can get the medicine easily. >> i've had amgen on, speaking to againer in ron and roach. they all say they have something better, as if you're not working on something better, that you're static and wedded to a once a-week shot. you're thinking about these combination, longer acting pill, not just something lilly says i don't want that. >> of course. we've been -- first of all, we've been working in this area and launched the first glp-1 in 2005 in the united states. it was a twice a day injection. and, you know, through the years we've improved this type of product dramatically. we launched trulicity a big seller for us, the first weekly and then zer zep tied.

there's three phase three in the industry, two from lilly, one from nova. the leaders are the leaders in the latest phase. one is triple acting, if, it will harness three and promises weight loss potentially 25 to 30% so higher than zir tep tied. then we have the oral which is a glp-1 oral that's in phase three now. that has the potential to perhaps scale in a different way. it's a different production system, but also a more convenient once daily tablet. >> if you didn't have that we would spend our time talking about what you're doing in terms of trying to slow down or prevent or at least hold off dementia. you've got possibility of being improved soon on this. >> we're under review at the fda. we expect approval in q1 for treatment of mild to moderate

dementia. very important. and, of course, there's another product out there that just launched a lot of work to do with hospitals and health systems and doctors to move from a world where we just delayed telling someone they had alzheimer's because there was nothing to do about it but now test and treat. that's a change in health care system. the thing at lilly we're most excited about what we call a trailblazer three study, that will read out in a few years seeks to take people before they have alzheimer's, have amyloid in their head, so the risk factor, and delay that diagnosis or prevent it. that's the goal of the study. we have to prove that but that's a few years out. talk about an enormous development that could be for one of the biggest problems in healthcare, neurodegenerative disease. >> one last question. you're not about the stock price, but there are people who are, including one of my absolute favorites in our network, ken langon. you're $585 billion. he thinks you can be the first

trillion dollar drug company. cross your mind? >> we're here to lower expectations at these conferences not raise them sometimes, jim. that would be an outcome that would mean we've created more useful medicine, so we look at that as what happens at the end of the equation. myself, my team, we're focused on the inputs that could cause such an event which means building the best pipeline in the industry, focusing our research dollars, which are approaching $9 billion this year on important diseases that affect a lot of people. we're not interested in niche orphan conditions. we want to solve big problems. that's what a lilly is for. we want to do it faster than anyone else because everyone is waiting for cures. if we do those well, maybe ken could be right. he's a friend and, you know, i respect him tremendously, but i think it's dangerous to get into a stock price prediction business as a ceo. we're focused on operating the huge opportunity we have in front of us. >> that's my job, i'm going for

the trillion. ceo david ricks, chairman and president of eli lilly, thank you so much. great to talk to you. >> great to be with you. >> absolutely. sara, back to you. >> jim, incredible stock move for this company up another 8.5% year to date. one of the best performers already in the s&p. jim cramer a lot more coverage from jim and the jpmorgan health care conference today including the ceo of novartis who will join us in the next hour on "money movers." we'll take a break as stocks are under pressure, down 238 on the dow. they've kind of come back a little bit. s&p was down poik 5%. down 0.4 now. we'll be right back.

the sector under pressure again today and is the worst performer. pippa stevens tracking the action. let's get to her now. >> david, well oil is really struggling for direction and more or less stuck in a trading range. saudi arabia cutting its oil prices to a 27-month low spooked

the market while also begging the question of whether they'll take more steps for market share and even possibly unwind some of their cuts. but the tensions in the red sea are never far from traders' minds and output from libya is also down after protesters blocked a major oil field. meantime nat gas is on the move, jumping above $3 and hitting a seven-week high as a cold blast brings cooler temperatures. not only does that boost heating demand, but it can also lead to production freeze offs. however, for the time being, this is very much focused on spot prices with the next three contracts still trading around the 265 level. now the u.s. is now the top lng exporter overtaking australia and qatar and one thing to watch going forward how that impacts prices. exports jumped 13% year over year in 2023 and that number is forecast to keep growing, especially with europe shunning russian gas. carl? >> milestone, pippa.

thank you. interesting action today. still to come a rough start to the year for most stocks but last year's top gainer on the s&p, of course, nvidia continuing to hit record highs. what the seetrt is saying about the tech giant when we come back.

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and duckduckgo lets you browse like chrome, but it blocks cooi and creepy ads that follow youa from google and other companie. and there's no catch. it's fre. we make money from ads, but they don't follow you aroud join the millions of people taking back their privacy by downloading duckduckgo on all your devices today. welcome back. i'm silvana henao with your cnbc news update. the question of donald trump's immunity from his federal election interference case is front and center today. a three-judge panel in d.c. is hearing arguments from trump's legal team this morning that his efforts to overturn the 2020 election were within his official presidential duties and are protected by the immunity claim. trump, who is in attendance for today's hearing, has pleaded not guilty to the four charges against him. secretary of state antony

blinken continued his tour of the middle east today by meeting with israeli prime minister benjamin netanyahu. it comes after two days of talks with jordan, qatar, the uae and saudi arabia. this marks his fourth trip to the region since the war between israel and hamas began in october. the earth just experienced its hottest year on record according to the european climate agency. the agency's data found 2023 was about 2.6 degrees farenheit warmer than it was during preindustrial times. sara? >> thank you, silvana henao. the major averages down half a percent this hour but a number of the mag seven names are moving higher. dominic chu back at hq tracking the movers. >> we'll start with alphabet leading that so-called magnificent seven group of mega cap tech stocks this morning with most other names now trading in negative territory, but alphabet right now and amazon up roughly 0.5%.

we're keeping a close eye on nvidia shares, the only mag seven name to notch a record high in 2024 after yesterday's all-time closing high. today the chipmaker is named the top pick over at oppenheimer, flat on the session but the analysts say ai related growth will remain a big theme for chip makers this year but ongoing inventory and demand recovery could mean that momentum doesn't pick up until closer to the second half of the year. nvidia shares hovering near record highs. turning back to that broader group of mega cap tech, we've got a call out from vee mo capital markets initiating coverage of amazon, alphabet and meta platforms with out perform ratings on amazon and alphabet with their respective intelligence offerings and market position, but meta platforms is being initiated and the market performed by vee mo with citing concerns about unperceived growth headwinds and potential hurdles from the digital ad market, competition from tiktok and a need for

social media platforms to evolve their revenue sharing models with major content creators. overall the mega cap tech trade holding steady but nvidia the only one near record highs right now. i'll send things back over. >> 5.6% so far. thank you. let's stay with tech overall and bring in rosenblat security analyst barton crockett. i look at your coverage list and you cover a lot of media names but many of the mag seven names, whether meta or apple or amazon. i'm curious, early part of the year here, what have been getting the most questions about? what name and/or theme, perhaps, is most often brought up to you by clients? >> well, i think what we're hearing is a real kind of digestion of what can happen this year after a terrific performance last year? how reasonable is it to continue to ride many of these horses, which have just run so well? and, you know, i think our stance coming into this is that

this is a year that you need to be careful about what you pick, but i do think that in the large cap consumer internet, where our coverage is focused, our mag seven exposure is focused, there are opportunities for companies that have an ability to really explode margin and we've seen a precedent with meta, explosive margin expansion, and i think what we're seeing are some companies following on that will be able to put up some great margin expansion in 2024, couple days with really terrific revenue growth. i think you see that at amazon, i think you see th outside of the mag seven companies, including pinterest and spotify. you know where i think you have a little bit of concern are some of the ad stories where the comparison get more difficult in the back half of the year. meta has been a great performer. we continue to recommend it, but that's where i have a little bit of question about, you know, how strong can they continue to be

in 2024 with the tough comparison that will be coming against >> so let's go to pinterest and spotify, amazon. what gives you faith there, the fact that they seem to really be focused on costs? i know a couple names i just mentioned have had some head count reduction as well, i think. >> yeah. look, i do think that what we have was a cleat change in mentality coming out of the pandemic, so in the pandemic, you know, ahead of the pandemic into it, these companies were spending and they were spending on a blue sky kind of view of growth that turned out to be, you know, ahead of their skis. so what we've seen is, you know, a real mind shift that i think some people got to it earlier, some people are getting to it later, but these guys are growing up. they're behaving like real businesses that are focused on maximizing every -- the return on every dollar that they invest, and i think that that has still to fully manifest at

amazon, at spotify, at pinterest, but when it does, i think it's going to be hard for the market to ignore the cash flow growth we're going to see there. >> finally, i noticed you don't mention alphabet. has that company not yet grown up, so to speak? >> well, that company is, you know, is a grown up and then some. i think that, you know, for alphabet, you've got a lot of customers that continue to like. they've got a tailwind from artificial intelligence. i think potentially in cloud, if they can approve, you know, the feature set they have to microsoft right now, i think they have a great opportunity in youtube where the usage has been growing, gaininging share of consumer view time. the ad revenue there has been lagging the kind of audience growth and i would love to see that turn around. then when you think about the core kind of search platform there, you know, i worry a little bit about the tougher comparisons to come and their ability to maintain the growth and the share lost to other, you

know, kind of things like e-commerce search and amazon. cross currents. but on balance i think a decent price for many growth opportunities at alphabet. >> all right. barton, going to leave it there for now. appreciate it. thank you. >> thank you. still to come this morning, the health of the consumer and the state of small business. the ceo of pfizer will join us at post nine from off ringing lle opening be. we're back after this short break.

welcome back to "squawk on the street." new clues about the state of small business in america. cate roger here to break it down. good morning, kate. >> good morning. the national federation of independent business is out with its monthly read on optimism for december, increasing slightly 1.3 points to 91.9, among the highest reading of the year but below the group's year average of 98 for about two years now. the top issues remain inflation, quality of labor and taxes.

inflation moving back into the top spot for december, ahead of labor, but those two issues really have remained sticky for operators. the nfib reporting that overall views on the economy are pessimistic at the moment. the group's chief economist bill dunkleburg writing that 2024 will be a slower year, quote, overall the growth rate will most likely be lower than last year, the economy will slow down, possibly delivering the long predicted recession by year end. high interest rates are also of concern. in a separate survey on credit the nfib found those rates were impacting decisions for businesses around financing and about 80% said rates were their biggest issue with access to capital. that's up from under 60% over the summer. the average rate paid on short-term loans was 9.8% in december, up from 7.6% one year ago in january 2023. quite a jump there, carl, back over to you. >> appreciate that important number. want to get an even closer read on the state of small business in the economy today after

ringing the opening bell here at the exchange, the chairman and see ceo joins us at post nine with an even newer benchmark that's going to start ruling out today. great to have you, frank. >> great to be here. >> what is the index? >> the index takes spending across every category in small business. as you know, we're a leader in payments and small business, and, in fact, takes everything from category to geography. we have data in 100% of the zip codes where retail occurs for small business spending. obviously, not, you know, farm related, but other than those, 100% of them, and we've spent a long time building the index. we'll publish it the second day of every month, right. no latency in the data. we went back to 2019 to benchmark it. so we posted an index of 138.

we break it categorically against every sector and every category, and we think it will be very, very helpful. it's all geographies that will help people understand. yesterday we went out to our client base, financial institutions and our businesses, to publish, to help them understand spending at a different level. >> as you say, it's based on activity. it's not a sentiment survey. it's not looking for -- >> everything from cash to mobile to online to in store, so every category of spending possible by every small business and, you know, we have data on all sides. >> so just reported according to the ifb index sentiment is down beat and pessimistic. what does your data show in terms of demand and how small business is doing? >> data shows, let's say we publish december, just now, it will be as i said on the second

day, it showed that in some categories, you know, spending was down in december. the categories you would expect it up, it was fairly strong. >> [ inaudible ]. >> clothing, apparel, so it's granular at that level, experienceal. it was up so you could go right now and see the index and see the granularity of the index also. >> you also look at lending environment for small business, credit worthiness and whether they're able to access loans. how does that look? we're worried about it after the regional bank crisis that happened last year >> i think it's performed fine. >> yeah. >> you know, the regional bank crisis maybe wasn't a regional bank crisis by my definition. it was a coastal issue for a few, and i think the regional banks have performed, you know. community banks and regional banks are the heart blood of our

company and they're great providers of capital to small business and that's where this company interacts. financial institutions and businesses, and we got visibility on commerce across all of them. >> i wonder if you think the stock is a proxy for how healthy small business is right now? it's not far from some highs. >> our stock? >> your stock. >> oh, yeah. i don't -- i mean -- that's a longer story. >> yes. >> i think, you know, as the economy goes, our stock is affected by it. so maybe yes. >> are you counting on a multi-year boom in productivity because of ai. >> 100%. >> you are? >> 100%. but i have a countdown to multiyear boom in productivity my whole-year. >> it's been hard to pin down in some years, right, productivity has? >> yeah. well you know, i think productivity hit an all-time low

during the pandemic, and part of that was we have employees back to work, employees in the office. we believe better together, and you get more productivity. i think, you know, there are jobs that are designed that are fine not in the office, but many jobs it's way better being here with you guys like this than on zoom. >> believe me, we're in five days. we wouldn't have it any other w way, right? the street is so hungry for radars. i'm sure it's going to appreciate this index on the second day of every month. thanks for coming in. >> happy new year. big milestone for china when it comes to the global auto market. we'll head live bji nt.toeingex

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welcome back to "squawk on the street." china is set toover take japan as the world's largest exporter of automobiles. eunice yoon joins us live from beijing with more on that store. eunice. >> thanks, david. you know china likes superlatives. a chinese car association has estimated that china as the largest car market is now set to become the largest car exporter. the car group had said total

auto exports up till november came in at 8.38 million and estimated to hit 5.26 million units for the whole of last year. this is bigger than the estimate out of japan. one of the contributors, of course, is also tesla which exported 344,000 chinese-made evs. now, this is all part of a result of a structural issues within china, a part of that -- a huge part is the excess capacity. by one estimate, 25 million unused cars. this is for both combustion engine as well as evs. compounding that the economy is slowing down. there's a big car slump. now, the export drive is part of a government strategy we've seen, especially on the ev and with the idea to subsidize the market, create a local market

and then dominate the global market. this is something we've seen both with evs as well as a lot of other industries. this is policy of the 2025 initiative. most of the cars that we're seeing this time around going to emerging markets, russia, southeast asia and africa. and, in fact, ubs estimates in 2024, 30% of chinese car exports will be evs. one auto analyst, michael dunn, had said something quite interesting, saying chinese ev makers are sitting on enough capacity to supply 75% of global ev demand. that should keep western automakers awake at night. guys? >> eunice, i do recall, of course, tesla had that someone unique situation in which it was able to own 100% of its chinese subsidiary but it seems the chinese may have benefitted from that as well, given access to

tesla, watching what they did there. is that a fair assumption? >> absolutely. oh, absolutely. in fact, there are a lot of analysts that credit tesla for really creating the market because before tesla came in and started manufacturing here, people were really luke warm about using evs. so, tesla and its brand image and the whole cool factor seemed to rev up all of the excitement here about using evs and getting people to switch. >> and the quality of the automobiles has gone up dramatically, from what i understand from people on the ground. true? >> yes. not only do people see tesla as the one that's been able to create sort of a standard for a lot of these chinese evs, also it's helped to rebuild -- build out an entire supply chain. because of tesla's presence here, it's really been, again,

seen as a game-changer. >> eunice, thank you. eunice yoon in beijing. should note for the overall chinese market, it continues to struggle as well, hitting new lows. many of the china related etfs this morning. our own market, though, got the s&p down about 0.50% and the nasdaq not far behind it. a lot more market coverage for you straight ahead. the ceo of novartis on the other side of this break. don't go anywhere.

welcome to "money movers." i'm sara eisen along with carl quintanilla, post 9 of the new york stock exchange. ahead for us, a health care doubleheader. first the ceo on novartis on the weight loss drug case and the future of a.i. inthe industry. brent saunders, calling 2024 an investment year. does that mean acquisitions are amaed? what the grounding of boeing airplanes means for the entire industry. right now in the markets