>> me? >> yes, you. yes, you. >> i wasn't sure if i was back. you know, i think the -- bitcoin etf is bgreat part of your speculative basket. everybody has that 5% that's lottery ticket money, but that's a great place to put it. >> make sure you join us tomorrow. thank you, mona. "squawk on the street" begins right now. >> lottery? ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with sara eisen at post nine of the new york stock exchange. faber is at hq. cramer is on assignment. futures a bit soggy as investors await tomorrow. oil is elevated on a new round of houthi attacks in the red sea. ten-year is below 4%. our road map begins with watching tech. rbc downgrading the sector, and one apple analyst sees little room for upside. nvidia notching its best

two-day gain since march. the s.e.c. is investigating a fake post as investors await the fate of bitcoin etfs. and hpe acquiring juniper networks for $14 billion. ceo antonio joins us later this hour. let's begin with the markets this morning. we're sort of in a bit of a lull where the elements from conference season are beginning to fade. jpmorgan health care, of course, ces, icr, awaiting cpi tomorrow and the banks on friday. this chatter, sara, is largely about whether or not cpi nudges up a bit, takes us back to 3.3% year on year as far as consensus season. >> we know it's very important when you get the scenario analysis from the trading notes on wall street, and that's out right now. as long as cpi stays in line, which is 0.2 to 0.3%, say, on the headline of an increase, and i think the details matter as well, because we know the fed is watching core cpi, and that strips out food and energy, which is more volatile. and we want to see that year

over year number below 4%. 4% is the sort of sticky, double the fed's inflation target 2%, david. look, there are some reasons to be optimistic, used vehicles continue to decline. hotel and airfare, some of those services sector components, communication services, should continue to decline, but there are parts that are sticky like shelter and rent, which have been slower to moderate in terms of prieces. we've seen medical care costs, insurance costs, continue to rise, and that affects the core of the cpi as well. that's the big market mover, comes out on thursday. otherwise, we'll hear this afternoon, 3:15, from new york fed president williams, and there will be a lot of positioning ahead of this inflation report. >> yeah. you know, and listening to double line capital's jeffrey gundlach, i felt like he was channeling you, sara. i mean, kbyesterday, you were talking about that, you know, the curve d inverting, highly suggestive of a recession.

he even wanted to talk about the dollar. i don't know if we have it or the quote from him, but we can take a listen as he sort of, again -- he's always worth a listen. doesn't mean he's always right. but it was, you know, him saying, basically, it's highly suggestive of a recession. i think dollar is going to have big problems in the next recession as a consequence of the policies that we run to try to deal with what could be a very painful recession. there's that word again, sara. recession. >> so, the question is, is he -- is he late? he's been calling for a recession since early last year. or is he wrong? the consensus now does not expect a recession. expects the economy to get away with a soft landing, but he's looking at the signals that the recession camp is looking at, the inversion of the yield curve, which has been inverted now for a really long time and has been steepening, which could signal recession. the leading economic indicate ka chart -- indicators at this level predict recession.

there's a case for that, and i think when you're focused on the bond market, look, he manages $100 billion in assets and is a fixed income investor. you've got to pay attention to things like that. it would be a correction for the equity markets, which have been resilient, mostly on this idea that the economy is looking good. atlanta fed took it down a bit but still printing above 2% growth at this level. >> tying in with cpi is geopolitics and this latest attack from the houthis. this is the 26th attack since november 19th, and jpmorgan took a crack at this yesterday, sara, sort of arguing that the additional time it takes to go around africa, another ten days, and the way in which suez traffic is down 30% since mid-december, sort of reinforces their view that global core cpi easing is going to stall out.

>> because of shipping costs. yeah. shipping rates are elevated. they jumped as a result of these attacks. they're nowhere near levels that we saw during covid, and i think the prevailing view that they won't be sustained and that the fed can't do anything about this. the government -- and the u.s. and the uk responded yesterday to these attacks. it's certainly a factor we're watching along with other geopolitical issues. i keep repeating this stat. countries with 60% of the world's population are going to be voting this year. we're going to get a taiwan election in a few days. of course, we have the u.s. election coming this year. i mean, investors are paying attention. it's never easy to game out how it's going to necessarily impact the markets, but we are watching it, and i think there's some heightened alert about volatility. >> it seems a little early, though, doesn't it, sara, in some ways? >> for the u.s. >> certainly for the u.s. i know we got india. we got a few others. whose note was that, that pointed that out as a key thing in this coming year? i forget. >> a bunch of them.

i read it in a few notes. we're going to talk to ann bremmer in money movers about some of it, including taiwan. >> elections on sunday. china stocks hovering near a five-year low this morning. let's talk about this wild ride surrounding bitcoin. last night, the s.e.c., as you may know, denying it has approved spot bitcoin etf saying yesterday afternoon's post on x stated otherwise is false and that its account on the site had been compromised. eamon javers was all over this last night and will watch it today as well. >> good morning, guys. we got a little new information about the hack of the s.e.c.'s twitter, now x account. last night from a posting by x's security team. now, remember, that, as you say, carl, in the 4:00 p.m. hour yesterday t s.e.c.'s official account published a statement suggesting that a bitcoin etf had been approved. that triggered bitcoin prices, but within moments, the s.e.c. said it was not true and their account had been compromised.

overnight, x posted a statement saying, "the compromisefuls not due to any breach at x's systems but rather due to an unidentified individual obtaining control over a phone number associated with the @secgov account through a third party." x also said that the s.e.c. account did not have two-factor authentication enabled at the time of the hack. that's a standard extra layer of protection and it's going to raise questions about why the s.e.c. did not take that obvious security step on such a high-profile account. i reached out to the s.e.c. this morning for their side of all this, have not heard back from them yet. we'll update you as soon as we do. and of course, there is some rich subtext to all of this, guys. as you know, x is owned by elon musk, who has been a bitter critic of the s.e.c. for years, so the blame game here could be particularly pointed, and we'll follow it throughout the day as we try to figure out exactly what happened and who made and lost money and of course the manhunt now for whoever did

this, guys. >> eamon, it's david. i find it shocking that they did not have two-factor authentication on that account. it's a -- it should be standard for every single person who's watching us, for any of their financial accounts or, frankly, for virtually anything at this point. i don't even know how they explain tit. you can do it from home. i know they still may be working from home, maybe, but you can even do two-factor authentication from home. you don't have to be in the office. >> one of the things -- lot to unpack there. one of the questions is going to be the x statement said they did not have two-factor enabled at the time of the hack. so, one question that raises in my mind is, did the s.e.c. ever in the past have two-factor authentication and perhaps it somehow was undone in some way? remember, x has had a big push on to get people to pay for two-factor authentication, removing it, in some cases, from non-premium account holders, people who don't pay for the x account. so, i've got some questions

around when did the s.e.c. have two-factor authentication in the past, if they did? and under what circumstances was that removed, if it was? so, we're going to have to really dig in here and get some answers from both x and s.e.c. on this, because there's some -- there's some possibilities here that are really intriguing, and there's a blame game going on between x and s.e.c. neither one wants to be holding the blame. >> it's particularly rich when you go back to cyber awareness month. there's a gary gensler tweet that says, remember to set up multifactor authentication and use strong passwords. also, you know, eamon and david, the s.e.c. has been really on top of this issue of cybersecurity. they put in place new rules that just went into effect that forced, you know, public companies to disclose more when they are attacked. i know the s.e.c. is not a public company, but they're going to have to disclose a lot

of information here. it raises a lot of questions. >> those rules just went into effect in december, sara. you're exactly right. and a lot of public companies are now feeling under the gun to disclose a whole lot more than they did in the past as a result of the s.e.c. pushing them on cyber disclosures. we're going to have to see now whether is s.e.c. follows its own rules here. they don't necessarily apply to the s.e.c., but in good faith, will they follow their own rules and disclose exactly what -- or as much as they can what they know about what happened here. how did this exactly happen? was it social engineering? was somebody bribed inside the s.e.c.? was somebody hacked, most likely, it's simply a phishing attack that tricked somebody into clicking and filling out their credential information and some bad ak cctor got that information. someone made a lot of money, i would guess. you saw the price of bitcoin spike. about 4:11 p.m.

knowing when that spike was coming was worth a lot of money to somebody. >> yeah. well, eamon, thank you, and of course, speaking of bitcoin, you can see it's going to be down, although we're still waiting for the actual approval of the bitcoin etf. let's move on to the grounding of 171 boeing 737 max 9 aircraft. the company's ceo, david cal ch saying the company needs to acknowledge the incident. phil lebeau has the latest. >> we are in the 737 max plant in renton, washington, where we'll be talking with dave calhoun later today. you mentioned that safety town hall meeting yesterday. if you listen to the audio or if you watch some of the clips that boeing put out, it is clear what a change in tone there is from dave calhoun compared to previous ceo dennis muilenburg during the max crashes and the grounding that happened in 2018.

during the town hall, calhoun was very frank in saying, look, we need to acknowledge our mistakes. every detail matters. and there wasn't any talking. this was an audience of workers who clearly are impacted by what they saw on the alaska airlines airplane on friday night. let me bring you up to speed in terms of the max nine investigation and where things stand. the ntsb is analyzing data. we will not hear from the ntsd probably for many weeks, if not months. this is going to be meticulous work in order to analyze not only the door plug but also any spare parts that are ultimately found. they're still looking for the "bolts" that were part of holding that door in place. the faa inspection rules for the grounded max nine, they have not been finalized yet, and so the length of the grounding is unclear. there was some thought that maybe by the end of this week,

we might see some of those back into service. unclear at this point when that will happen. boeing, by the way, has a safety team. this is an organization -- basically an ad hoc committee, if you will, a group that they were put in place after the max crashes. they're going to be focused on what happened on friday night with the door plug on that alaska airlines plane. don't forget, we're going to be talking with boeing ceo dave calhoun coming up this afternoon on the exchange. this is a cnbc exclusive. you do not want to miss what dave has to say, not only about where they are in terms of trying to figure out what happened on friday night but more importantly, addressing questions about the culture and quality control here at boeing. guys, back to you. >> yeah, i mean, that's where i was going to go, phil. i'm really looking forward to your conversation, and i do wonder -- i'm sure the details matter on this incident, of course, but because it's been a string of problems in recent years, how boeing and how he

specifically combats this idea that they put profits before safety. >> that's it in a nutshell. now, dave calhoun will tell you, we are not putting profits before safety. having said that, sara, you cannot deny that there have been a string of incidents over the last several months, some of them involving their primary supplier, spirit aerosystems, some of them are self-inflicted wounds, and so the question becomes, you are the preeminent manufacturer, one of the preeminent manufacturers in the united states with a long and very detailed history in terms of tackling huge challenges. you've got to figure out how to make an airplane where there's no issues. and that's front and center for dave calhoun and his team right now. >> very complex, phil. look forward to that interview this afternoon. that's our phil lebeau on the boeing story today. when we come back, former s.e.c. chair jay clayton is here as we await some official

decision from the regulator on spot bitcoin etfs. we'll get williams this afternoon. ten-year note options on deck. nasdaq futures going positive. got some calls on home depot, toast, the third apple downgrade of the year so far when we come back. only at vanguard you're more than just an investor you're an owner. that means your priorities are ours too. our retirement tools and advice can help you leave a legacy for the ones you love. that's the value of ownership. you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence.

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official decision from the s.e.c. on the approval of a bitcoin etf. our next guest says it's inevitable and the time is here. jay, it's great to see you. thanks for coming in. >> nice to see you. >> yesterday's news is what everybody's chatting about. i don't even know if it's fair to ask you what you think happened. >> look, there was a compromise, obviously, and the question when something like this happens, and this isn't the only place or the only time it's happened, but immediate, what happened? you deal with it. you get operationally back where you were. it's clear the s.e.c. is operationally back on board, right? and let me just address your question. i don't think that this should in any way affect whatever their time frame was for dealing with these etf applications. >> well, there is some concern that it would push back any approval if, in fact, approval was in the offing. >> whatever the path is, i don't think it should actually because they're clearly operationally back where they were. they've addressed this for the

moment, and any good business, that's what you do. you address it, and you get operations back in order. that's the first thing you do. >> which hasn't been done yet, necessarily. right? >> i don't think there's a -- i don't think there's a continuing compromise of the s.e.c.'s twitter -- now, what you're going tois, remediation. and what do you do after you've got a handle on this? you get the facts, how did it happen? you communicate with your constituencies. and then you harden your processes so that it doesn't happen again. and that's now the phase that we're in from an s.e.c. operational -- >> don't you think there are some ironies here with this happening, the fight with elon musk, for instance, about tweeting material information, the fact that gary gensler has been hard on cybersecurity risk, that he's tweeted about multifactor authentication? i mean, how much of a black eye is this for the s.e.c.? >> well, let's put it this way. i think it demonstrates that everybody needs better cyber

hygiene and constant cyber hygiene. yes, is there -- look, let's not -- is there irony here? are control systems part of the s.e.c.'s purview? sure. is market manipulation something that the s.e.c. enforces and deals with, and are both of those at issue here? yes. which is why i go back to what do you do? you communicate with your swi constituencies and tell them what you're doing to address those things. we're talking about what's going on at boeing. i expect the ceo of boeing will do a very good job communicating with shareholders and stakeholders. that's the ceo's job, what they're doing to address the situation. i expect the s.e.c. is going to do that in the coming hours and days. >> why do you think it's time for this etf? >> i've said it is inevitable, and the reason it's inevitable is all of the legal questions and what i would say is the oversight questions that you have to deal with in a new product and an application like this have been addressed.

people understand the -- what i would say is the bitcoin product or if we call it a product. how many bitcoins there are going to be, how it's mined, what it's cost, how it's trading. those were issues that weren't fully understood. the trading in bitcoin, globally, really unregulated, has become what i would say is much more efficacious, much more trusted. you have financial institutions that are in the business of surveillance coming in and saying, look, we think we can surveil this market, and we think this market is deep enough and robust enough that manipulation is at a minimum. >> when the post happened yesterday, our bob pisani was, like, where's the press release? i don't see a press release yet. i wonder, do you think news flow from agencies on social media will change? >> well, i think -- let's be clear. there were some -- i didn't see the post. i've now gone back and looked at it. there was inditia that there was something there.

it's not usually the first means of communication for an agency. usually, official agency documents are attached to distributions like this. you know, am i surprised that some people said -- and ran with it in light of the context in the timing? of course not. that's what happens. but were there -- you may have wanted to take a breath and say, really? is this really the -- this is really the way the s.e.c. is going to roll out something like this? >> i don't know. gensler's pretty active on twitter. you say that bitcoin essentially should be trusted more, right? and i just -- i keep thinking of jamie dimon not too long ago saying that if he were the government, he would ban it. >> let me say this. i didn't say bitcoin should be trusted more, and i'm not saying that bitcoin is going to be worth a lot or a little. what i'm saying is the dynamics of bitcoin trading and people owning it are better understood and disclosed, and to go -- >> are they? last year was a disastrous year as far as sbf and cz and

criminal charges and the fines. it doesn't feel more trustworthy. >> well, i don't think the off-shore crypto ecosystem is any more trustworthy, but if you look at those frauds, they weren't involved in bitcoin per se. the bitcoin-distributed ledger, as far as i can tell, is operating as it had been intended to from the beginning. so, have people taken advantage of that and the euphoria, particularly offshore and unregulated places to do really terrible stuff in? yes, they have. one of the things that's happening here is you're bringing bitcoin but also digital assets into the regulated ecosystem. >> finally, you don't think -- if the s.e.c. is about investor protection, and this one happened to hit at home, but you don't think the communication to the investor community about relying on social media information will change? >> carl, it should. okay? we're all -- people want to slow down communications.

they want to regulate platforms. history tells us, speed wins. okay? so, you got to accept speed and do what you can with it to make sure that it's more reliable. make sure that it's more trustworthy. we're not -- look, we trade here in microseconds, right? i was actually -- i was just listening to lynn martin speak to all those interns, wonderful to see. you know what she said? learn from your mistakes. >> well said. jay, appreciate you helping us tt ts rng. it a little bit beerhimoin "squawk on the street" is back after this. have heart failure with unresolved symptoms? it may be time to see the bigger picture. heart failure and seemingly unrelated symptoms like carpal tunnel syndrome,

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get the opening bell at the cnbc realtime exchange. at the big board, it is a reit celebrating its 50th anniversary. at the nasdaq there. january, first five days, was red. full year january barometer with some 15 or so sessions left in the month. russell with quite a nice gain over 50 days as well, bespoke saying that best 50-day rally in the r.u.t. >> there have been some bullish calls lately. goldman says, good set-up for

russell 2000 outperformance because you have better than expected growth and really cheap valuations, and that combination should be powerful. they expect -- goldman-sachs expects russell to outperform s&p, the bigger caps, so far this year. the other group i waslooking at, at the open, there's a lot of anticipation for cpi tomorrow but we're also getting bank earnings this week and that kicks off the quarterly earnings period, and banks have been more in favor ahead of this earnings release. in fact, some of the -- jpmorgan looked at the positioning data on the banks and it's much more bullish heading into the report. banks have had some nice outperformance, and that goes along with the fact that small caps have done well, and cyclically sensitive stocks have done well. david, as far as the banks, we're going to be looking for lone loss provisions, those provisions for credit losses should continue to normalize. that would be a good sign. maybe resumption in loan activity because it's been a weak spot for all of 2023. that would be a signal that the

economy looks better, always important to monitor the comments from the ceos as far as the consumer and the economy, consumer balance sheets, consumer checking accounts, and whether those continue to remain strong. but with the stabilization of interest rates, the group has been big. david? >> for the -- what are we, in the seventh trading day of the year? citi is the outperformer. i remember that upgrade from mike mayo, right? that was sort of day one of the new year in terms of trading. saying he's a believer in terms of some of the changes jane fraser is trying to make at citi actually coming through in terms of execution and benefitting that institution, as you see, it's up a little less than -- well, it's up 25% over the last two months. guys, i did notice, as i said, this is our seventh trading day of the year, i believe. but we've already got some distinctive moves in terms of groups. pharma, by far, the

outperformer. the likes of merck is up over 8% so far this year. you've got j&j up over 3%. gilead, 9%. amgen, 6% plus. of course, pfizer sort of trails, as it often does, and bristol myers is actually not positive for the year. but generally, quite a positive tone there. did note laurie in her most recent note where she downgraded tech to a market platform, points out our overweights are f financials and health care. also energy amongst them. interesting move there, and then nvidia, you can't stop it, carl. that stock is now up over 9%. a $1.33 trillion market value. not that far away from challenging amazon's $1.57 trillion value, but it has outperformed the mag seven for sure, and chips overall.

many of the stocks of which are actually not performing particularly well so far this year. >> yeah, nice little -- even with the incredible chart from last year, david, look at a one-year, you can see an even stronger tick at the very far right side of that chart, up almost 2% today. as we said earlier, best two days for nvidia since that earnings blowout last may. and a bunch of other chip news today to watch. intel talking about automotive. qualcomm, i think, is presenting this evening. tsm came in with earnings as well. >> yeah. halted a sales decline in the fourth quarter and just good news overall that we learned that global chip sales rose for the first time in more than a year as demand started to rebound and it's fueled by a.i. revenue hitting $4 billion in november, which was a 5.3% increase from a year earlier. there was also an interesting "ft" article, did you see, nvidia, in particular, and chinese companies repurposing some of the gaming chips as they're trying to work around

the export controls. this has been kind of a swing factor for sentiment around nvidia, certainly coming out of last quarter, which is, nvidia, we know, has been building new chips. i think three of them to try to circumvent the export controls and there have been mixed reports about china's demand for those chips. this would suggest, "the ft" article, and i think there was a quote in there from an analyst, that china is a little more desperate for them. a factor to watch as we head into earnings, which are not until february for nvidia. >> they do report a little bit late. david, a ton of media news, which i think would be fun to bundle. a lot of it's relatively small, but warner with this new production deal with tom cruise, the disney espn drama along with mandalorian being made into a future directed by jon favreau. comcast, sunday night football averaged 24 million viewers this regular season. there's a lot today.

>> way to go, comcast. and we got the big playoff game on peacock. don't forget. i don't know what they're charging for peacock these days, but it's a bargain at any price. >> and even imax. global box office last year, almost 1.1 billion. that's close to a record. >> yeah. >> as movies like "oppenheimer" sort of bolster their -- >> as you say, carl, amc, near or at new lows. and down some 18-plus percent, below a billion dollars in market value. saw imax there, which was a big beneficiary of "oppenheimer," but there's a look at amc. >> not even taylor swift can get this one going. i saw "mean girls" this week. highly recommend. >> i saw you at the premier photo. >> that's the one that was a movie, then it was a musical on broadway, and now it's the musical movie. >> it's the musical version of the movie, and guess what?

>> what? >> it is so good. even though it's repurposed a million times. it's wittier and fresher and funnier than ever. i loved it. but of course, the original for me was iconic. side note. >> yes. my household as well. >> one stock that maybe we should be watching because i thought there were interesting announcements for it. walmart. did you see doug mcmillon giving a keynote speech at ces and announcing all sorts of new a.i. -- generative a.i. improvements? this is something he teased in his interview with me a few weeks ago about how it's going to be surveying the customer. they announced some new search, for instance, search upgrades, i would say, based on a.i., so now, just as an example, you can search hosting a football party instead of having to search individually for chips or for tvs or for guacamole, and it will bring you a list of what you need. they're also expanding the drone program on delivery in the dallas-fort worth area and they say no retailer is doing it at

scale as they're doing it. as sort of why there's the drone footage. we wanted to show that. they've done 20,000 drone deliveries over the next two years. they're expanding to 1.8 million additional households. they say drone deliverly to this many households has never been done in a single market. they're trying to compete, obviously, against amazon and beef up the consumer experience with generative a.i. it's a good, carl, example of how it relates to people's ordinary lives if it can make shopping experiences better online. >> not to mention the in-home replenishment product. you mentioned amazon. up more than 1% this morning, david. some interesting reports, not just about layoffs at the twitch division, 35% would be about 500 jobs, but also the information this morning talking about some reductions in workforce over at prime. so, we'll keep an eye on operating leverage as it

pertains not so much to amazon's retail business but more the media side. >> yeah, i mean, overall, i think there is a belief that many of these companies are so-called getting fit in the same way that a year ago meta did. of course, much to the happiness of many of its shareholders, enhancing margins in a significant way. remember, barton crockett talking about amazon being one of his favorites as a result of what he does believe is going to be significant margin improvement. and that may be the case across the board for some of these companies. still, alphabet, you know, i do hear they also are going to be much more focused in terms of that. shareholders, obviously, would applaud any efforts being made towards, once again, sort of cutting costs overall, and as you see with amazon, that is being well received this morning. guys, wanted to move over to tesla, because that stock has not had a good start to the year. it's down about 6%. they have introduced that latest version of the 3. the y is the biggest selling automobile in the world, but continued, carl, decline in ev

used car prices, perhaps pressuring the lack of that $7,500 tax credit on many models as a result of the composition of the battery. hard to always say here. the stock has done well over the last year, but still, not a great start and should point out, by the way, rivian and lucid, also down, actually, much more sharply so far in these -- in this brief period so far for the year. >> yeah. a few other things in evs this morning. one is the report about hertz unloading some of their tesla cars from their fleet at some discounts. we've heard -- they've talked broadly about the challenges and incorporating them into their model. air test systems with some downward guidance on revenue, again, pointing to the slowdown in ev growth. and then at ces, there's some chatter about hydrogen getting a bigger part of the conversation as the world sort of wrestles with that adoption curve. >> yeah.

again, all of which sort of adds up to at least some questions there. that being said, i think there is a, perhaps, some hope for the refresh cycle. you know, and again, we talked about this yesterday. but the increased level of competitiveness from the chinese ev makers around the world, other than here in the united states, is also, carl, got to be an issue to a certain extent. you know, they have become better automobiles, basically, is what many would say. >> yeah. i mean, also, the tesla stock more than doubled last year, so always could be profit taking at the beginning of the year. guys, just want to hit the deal of the day. we're going to talk to antonio neri, the ceo of hpe, officially now buying juniper networks for about $14 billion. world was out of this yesterday, and we saw a big slide in hpe shares yesterday. juniper's shot up. what we're seeing today is they're kind of flattish to higher. the company holding a conference call about it this morning. it's going to be an all-cash

deal, david. they're going to take on some debt to do the deal, and they're framing it as a play on a.i. and this puts hpe in a bigger position on networking, which they say is a higher growth category, and ultimately, should help prepare them for a future in which there's increasing demand for generative a.i. i think there was a lot of speculation, david, that hpe would do a deal. not necessarily as much on juniper networks. the street seems a little bit mixed on it. there are bigger questions on the strategy, which is why i'm looking forward to our conversation with neri. >> as am i. the stock was down yesterday on reports of the deal. of course, it did follow after the close the announcement itself, but hpe stock rebounding ever so slightly this morning. you see juniper there. of course, beneficiary of huawei not being a part of the upgrade cycle, so to speak, for so many telecom providers, given the u.s. says no way can you use huawei, so that's juniper.

they have that missed unit, of course. we're talking local wireless access, so to speak. looking forward to that conversation. speaking of, by the way, huawei, china, i would note, alibaba also just not been a good performer as well, following on from last year's decline, well below its ipo price at this point. again, it is still used, perhaps, as a reflection not just of the chinese consumer and consumer demand there but also broadly speaking sort of the sentiment around technology. that stock market has also declined so far, but you can take a look. man, we have seen -- many have seen much better days for alibaba. not the case for meta. those shares, up very nicely this morning. 2.7% gain for meta. guys, i don't know if you saw this, and i don't think it's connected, but mark zuckerberg -- it's always interesting what he chooses to share and not share on instagram. he's getting into raising cattle. angus and wagyu are where he's very much focused and feeding

them an awful lot of macadamia nuts. just an enormous amount, pound-wise. you know, following perhaps in the footsteps of ted turner many years ago with his bison. are remember, my conversation with john malone, he said rupert murdoch called him about raising cattle, wanted to know how much to feed them at elevation. going to have a lot of cows, potentially, along with his $230 million compound, including that 10,000-square-foot underground shelter. >> there are a lot of cows in hawaii if you didn't know that. and i imagine some of them are mark's, absolutely. you mentioned "mean girls," and i kept thinking, on wednesdays, we wear pink. >> that's not why i did it, but i love that you picked up on that. >> ten-year was hovering below 4%. now 4.000%.

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dow is up. depot is in the middle of that last. wedbush goes to outperform. that's up 50 bucks from the prior. although retail demand did weaken last year, they say those key drivers are now bottoming or reversing. they forecast hd to comp plus 1% this year, slightly better than the industry and better than the minus 0.5% they forecast for lows. we'll watch that closely as the s&p's holding 764,5. "squawk on the street's" back in a moment. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some research and called coventry direct. they explained life insurance is a valuable asset

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deal news in the tech space. hughlett packard and hb shares fell while juniper shares up double digits. here to break down the move is antonio neri joining us first on cnbc. great to have you on deal day. thanks for joining us. >> thank you, sara. good morning. >> it's been exciting for a lot of investors to see deal making come back in 2024. how did this one come together? how long? >> well, sara, thank you for having me on the show. i will say this is a continuum of our strategy to super charge

the h to cloud momentum. it will make hpe capture the market inflection possible particularly with ai. this combination will double the networking business size of hpe. it will present 31% of the company revenues which is equal to compute. >> is it diversification, scale, growth? >> it's all above. first of all, it gives us scale. we have built an amazing business with hpe.

that was in the campus of branch. now with the proposed acquisition of juniper network, we'll expand be it in the next of the total market in the working space. second from a deal perspective, this is an earnings per share and free cash flow post year one close immediately. after that there is significant growth ahead of us because we are addressing all aspects of the networking stack as we call it. >> your stock is flat this morning but it took a big hit yesterday. i'm curious what kind of conversations you're having with investors about that. obviously it's a big lift. you're taking on debt to do this deal but are you having trouble explaining the strategic value to investors? what kind of concerns are you hearing? >> obviously investors are digesting the news and understand obviously the large action, $13.6 billion is the largest transaction hughlett

packard enterprises has done. the thesis is understood. we're creating a new company, sara, where the core foundation is the network in business. network in business has growth trends all in favor and ultimately where they are, you need more connectivity than ever before. then obviously they want to understand all the math associated with this but, remember, the value of this deal from a signature perspective is higher than the value of the cost of debt they were taking. we are committed to investment credit rating, which is core to us. we will continue be to do share buy backs and pay dividends. on top of that, we will continue to see growth as the transaction closes. when you think about ong-term opportunity here, they all will understand it but it takes time for them to understand the ins and outs. that's my job with the ceo of juniper that's here with me today. we are having multiple calls

with investors, employees and customers and partners. >> again, to sara's point, you're going to need to have those calls given the stock did decline markedly. you mentioned market inflection points. i'll give you a chance to explain to investors. what does that mean? >> yeah. so, first of all, obviously everybody's talking about ai today and hpe is the market leader in super computer. we have an ai native solution for these large language models and all their foundational models now that are being deployed. but then when you think about the cloud and the ability with juniper networks, to bridge the two together. that's a massive opportunity because the connectivity is the foundation to that. so ai is major inflection point. then think about the ongoing

perspective. digitizing your enter prize is the connectivity. that's where they play a massive role as well. it's one integrative solution. we can address all aspects of what customers need into one integrated experience which will be delivered to our global platform called hpe which has 29,000 customers. we manage more than 4,000 devices and ultimately we can create more value for our shareholder services through software services. >> always a question in terms of timing when you close, that gets to antitrust not that there's a great concern for it. do you guys need or are you going to try to get china approval? you've sold your jv there. it's not clear whether you have business there. is china something you need to get approval for? >> it depends. we are in the process of selling the joint venture and we are on track to complete that in the first half of 2024.

so that's happening. from a regulatory approval we believe there is an issue. we file for a regulatory approval since juniper doesn't have a very large business there. in all our business has gone through the jv which obviously htc is a local entity so that's a plus. close the transaction by the end of the calendar year or beginning of calendar 2025. >> but i do wonder if there's going to be any antitrust scrutiny, for instance, on the fact, antonio, juniper mentions hpe as one of its principle competitors. they think there will be overlap between the aruba and mist assets. any concerns on that front? >> i don't, but obviously we have to work through the process. we're going to collaborate with the regulatregulators. the combination of hpe and

juniper is still significantly smaller than the larger ones. we don't believe that's a challenge. in many ways, actually a good thing because it gives customers choice and flexibility. and so from that standpoint, i don't see an issue. from an overlap perspective, we don't see -- rama and i see it exactly the same way. we don't believe there's an overlap here. remember, juniper networks through the ai driven mist approach. they have addressed different verticals with different type of use cases where aruba has addressed other verticals with a different type of use cases. so the combination of the two give us the best ofboth worlds. by integrating the ai driven approach that mist has established in the market in the last few years with the scale that hp aruba has built. >> all right. well, antonio, turn the stock around. it's positive on the session. thank you very much for joining us today to talk through the big deal. >> thank you, sara. when we come back, we'll

watch the s.e.c. s&p brieflwey nt positive for the year a moment ago. we're back in a minute.

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good wednesday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber, live for us from cnbc hq. take a look at stocks up a little bit this morning being powered by microsoft, meta and nvidia. those are three heavy weights, of course, rising to the top of the market. we're adding to the gains on the week up almost 1.5% on the s&p. higher than that for the nasdaq which is little changed. dow rebounding as well. up about 60 points. it's lagged in part because of boeing and its issues. >> let's get some wholesale trade data with rick santelli. >> sales, these are for november. it's a november final on inventories that remain down .2 of a percent. what is very notable here, carl, is we have not had a positive number on wholesale inventories month over month since november of 2022.

we've had a few unle changed but nothing positive. on the trade side, the sales. well, this is november, not a final, this is a new november, and it is unchanged. we are expecting up .4 so it's a disappointment. last month minus 1.3. it's downgraded to minus 1.5. the second worst number in wholesale trade sales of all of 2023. do remember that we have an option of 10-year notes today. it's going to be important and we are now looking at all maturities of treasuries have traded under yesterday's lows although they have reversed a bit higher than the last few minutes and german i.p. month over month and year over year, sixth consecutive negative read in a row. the juggernaut of manufacturing in europe doesn't seem to be a juggernaut anymore. david, sarah, carl, back to you. >> more recessionary type readings out of germany and

europe. thank you, rick santelli. as far as other data, i wanted to mention the s&p data. home improvement stocks are at the top of the market right now. they were 30% higher from the same week a year ago. obviously new applications where we were last year. they did rise 6% down 16% from where we were. we watch it because mortgage rates have fallen from their highs as treasury yields have fallen. they're still in the high 6s right now for 30-year fixed. that's substantially higher than where most people have their mortgage, but guess it's an opportunity to refinance from where we were a few months ago when we were around 8% on that mortgage rate. look, i'm watching housing, guys. housing prices have been

stubbornly high and that's been a problem for the fed. we're going to get cpi tomorrow. within that services number incorporates the high rent prices, for instance, that we've been seeing. >> it's been more stubborn to come down in terms of prices than the rest of cpi. certainly for goods and for other components in the index. >> asking rents down five months in a row. red fin, monthly payments for homeowners has fallen year on year.

obviously the super core is important because its services ex-shelter. moderating growth things like hotel prices coming down and communication services prices coming down. we'll see if that trend continues. it's psychologically important because we'll get pce next week, that's the fed's preferred gable of -- gauge of inflation. the expectation is for another hold but how will they frame the number of cuts? the fed officials we've heard from, we'll hear from williams today at the new york fed who always gets a vote, is that they haven't really pushed back on cuts. the more hawkish spin on it has been we're not ready yet. not talking about it yet. maybe second half of the year. pushing the cuts. we're at, what, 60% or so chance that the fed cuts according to the markets in march.

after tomorrow's number, that's going to be -- that's going to be the part of the market that you want to watch because it's come down as we've had strong data, including jobs and other pieces of data. >> yeah. march will be here soon. i always like to remind people of the calendar. what about the key things you like to watch, sara, and/or what the fed really wants most closely in terms of where their head is at? >> well, i think they're paying pretty close attention to inflation and jobs. that's simple. that's their dual mandate. in jobs, while we did get a strong headline number, and i know, carl, you've been all over the fact some of the internals were weaker, yes, we saw high wage growth, shortened work week, there was another chart that i pulled out just because i thought it was interesting from david rosenberg who we know has been bearish, doesn't always look on the bright side of these economic reports. had some good data on how many people have multiple jobs. so multiple job holders in the

u.s. and what you can see at the end of the chart is that it's climbed. and there are things like that happening. he said that level where we are right now, which is, what, 1 in 20 workers hold multiple jobs. 5% of employed workers are holding multiple jobs. that's a sign of stress in the system. again, headline numbers are okay in the labor market. we're looking for those little signs of stress. you put that with yesterday i was talking about more than $20 billion in debt that consumers took on that was three times the estimate. there are clearly signs that things are cooling down. i'm moderating this panel later, guys, on brookings. the it's virtual. feel free to tune in. the topic is, david, one that's hot. why all of this economic dissatisfaction? why do we feel gloomy when jobs have been strong, the economy is strong and the white house is

trying to figure out and it will have political implications. you look at these, the consumer debt, that they're taking on a lot of debt. perhaps there's clues in some of these indicators. >> perhaps. a lot of people come back to overall inflation. even though of course as we had pointed out numerous times it has slowed considerably and we continue to focus on it for obvious reasons, sarah. the when people look back at their grocery bill from two or three years ago to what they're spending now, i guess it just gets them depressed. >> yeah, because it's still higher even though we've seen the pace moderate importantly, still higher than we were. it's still seeing small increases. >> deposit flows, ba at that for that. big banks kick off the day after tomorrow. our next guest does remain bullish. yardeni research president.

it sounded like you were a little more cautious about the first half. can you go into that a bit? >> it was almost a melt up at the end of the last year. the santa claus rally started way ahead of schedule and started on october 27th. as a result of that, valuations got a bit stretched and i think there's a sentiment that is extremely bullish. we're due with a bit of correction. the technology and every now and then i get a little deja vu. nvidia's a great company with a little bit of cisco.

>> for nvidia, it really has. i think not only are we seeing exuberance by investors but certainly we're seeing exuberance by analysts. they dramatically increase their earnings expectations for nvidia. look, it's a hot stock. it's probably going to remain a hot stock as long as ai delivers. i think it's going to take somewhat longer for ai to deliver as much as the market seems to expect. the other thing, carl, i think the market has expected too many rate cuts this year. i'm going to be candid, not going into a recession. third year in a row i'm saying that. i'm of the camp we'll get two to three rate cuts later in the year. i think the market needs to redigest the fundamentals. >> you know, ed, you mentioned some of the parallels or perhaps

parallels with this period versus the late '90s. >> right. >> rational exuberance of greenspan was '96. we went parabolic for three plus years. >> yes. >> you know, how much similarity do you see with the current period? obviously the internet and the excitement that it engendered investors then versus ai now? >> i think there's a lot of similarities. i think the important thing to recognize is the internet was a legitimate technology. i think ai is a legitimate technology that's here to stay. the problem is, the market can get irrationally exuberant about how much can be achieved in a very short period of time. i am concerned about a parabolic melt up. it's nothing to be concerned about as long as i tell everybody to get out at the top. >> speaking of other things you've been concerned about in history that you've warned recently the bond vigilantes. i remember talking to you saying

they're back and there are concerns. >> yes. >> we so far this year hasn't been a problem. >> yes. >> the fed has been a powerful force on the bond market. we had well received auctions and a 10-year later this afternoon. do you think this issue comes to the fore again? >> we'll see. clearly one of the concerns is washington is so partisan we can't get a deal done at all on anything and we will see. we're getting kind of close to the edge here of whether a deal is going to be struck or not. but i think that, you know, back in the good old days when janet yellen was fed chair, i often observed that whenever she gave a speech on the economy, stock market went up. she's very astute. what she's come up with for the bond vigilantes, she's cut back on the supply of bonds and notes and that's what happened on november 1st. that's what kicked the bond market to the down side in terms

of yields. that's what got the bond vigilantes calmed down. there were simply fewer notes and bonds and more bills. >> on that note, goldman's out with a note basically putting into context the comments we got from dallas fed chairman logan over the weekend. they think as a result they expect the fmoc to begin tapering the pace of the arruno. >> that does make sense. it will taper before it lowers interest rates. that will be greeted as a sign that the next thing they're going to do is lower interest rates. that can be the second half of the year. let's not get too excited. >> the fed is not going to get into a situation where they ease too rapidly here and suddenly inflation makes a comeback. they really got burned in -- at the beginning of all of this when inflation came out of the blue and they were late in responding to it. this time around they want to be slow to respond to disinflation.

>> ed, appreciate it. wish we could have gotten to housing and some of the rolling recovery you've been talking about. le we'll save it for next time. >> thank you. a roadmap for the rest of the hour. bracing for a decision on bitcoin. what happens next if the sec approves the crypto. >> plus, interesting results and why disinflation is becoming perhaps a bigger deal for consumers and businesses. and a big exclusive ahead on cnbc you do not want to miss. our phil lebeau is speaking with boeing ceo dave calhoun. we'll head to boeing 737 max factory in roenton, washington. don't go anywhere. when you think of investment risk,

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the sec has determined that there was unauthorized access.

>> they're going to be side tracked. >> will institutions start getting in. we've got roughly a dozen applicants. fees are very, very competitive. several including cathie wood's arc invest, bitwise charging 0% for the first six months. blackrock's 0.2% for the first 12 months. fidelity is 0.39. grayscale at 1.50. one of the main questions is whether a spot bitcoin etf will track bitcoin into coin futures.

there are some concerns. the spot bitcoin etf could trade at a premium which could create long term, a backlash. they have tracked bitcoin fairly well. there's some debate about how mature the spot market is for bitcoin. most think it has to mature and the futures market has already regulated and matured. another is whether a bitcoin etf will trade at a premium or discount. most believe it will be tight and any premiums will get small. how much money will the bitcoin etfs attract? it's not clear. we have a precedent. the opening of the bitcoin futures brought in significant assets. the main bitcoin futures etfs, bito, the pro shares, now is over $2 billion in it. reggie brown at gts estimates all the funds could have 2 to 3 billion in a month and 10 to 20

billion in a year. that's significant but still small compared to bitcoin's roughly $900 billion market value. what's next? where do we go from here? what happens friday, monday, et cetera? the big issue is whether big wall street firms like jpmorgan, ups, large wealth firms will allow them to trade it on their platforms using bitcoin etfs. after that, the bitcoin housing, that's in april. a lot of anticipation followed by any interest rate cuts. remember, generally higher interest rates are bad for nonyielding assets like bitcoin. a 4% yield or 5% yield is not great for the competition that's out there. it's an exciting moment. we'll have people on the floor tomorrow, assuming we get approval tomorrow, people on the floor who are floating these etfs. we'll be talking to them throughout the day. >> the competition you mentioned the fees coming down because the competition is going to be pretty big. how many people -- how many firms are lining up?

>> a dozen. depends, 11, 12 around there. not all of them have put their fee structure out there. there's 10, 11 for sure out there. that's tremendous news for investors because already you can see -- cathie wood lowered the fees to zero i think taking a look at the competition. she had a different fee structure. the people are out there saying how do we get the biggest capture? the first in is going to be really big. that's why you saw what was going on, 1.5% over there with some of the other ones. gray scale, you think, my gosh, that's that. they're there already. they have a huge base. $26 billion already in that fund so they can afford maybe to stay a little bit higher. i think this is great news for investors. the etf structure, lower cost, competition, keep the fees down, let investors keep their money. >> blackrock's in there, too? >> yeah. they have it at the ishares. they're floating the first 12 months 0.2%.

that's really quite a good deal considering there's a lot involved in this. they're moving around bitcoin, trading cash. there's friction here. there's market makers involved in the creation redemption process. i'm very excited about this. i've had differences of people about the use case of bitcoin, but there's no doubt owning bitcoin in an etf structure is far safer than the current system. those that want to, this is the safe way of owning it. just like owning a gold etf, all of a sudden all these old guys with -- i lost the lock to the key and people losing their passwords to bitcoin. >> there's an etf. >> now there's an etf. nobody worries about holding gold in the basement. you can if you want. go ahead, knock yourself out. nobody worries about it anymore. >> bob, thank you. we're all on pins and needles. bob pisani. let's get more from the industry insiders about what it could mean. william quigley, co-founder of

tether and worldwide asset exchange. it's one to one digital currency tied to the blockchain. a stable coin, william. how does this decision impact you, if at all? >> well, simply opening up bitcoin to a far greater pool of inches city sti inchescity tuesdayal capitol. it only takes a small percentage of those funds to be allocated to bitcoin to cause a huge increase in the price of bitcoin. of course, that's what most people want. they're investing or buying bitcoin because they want to see it go up. and bitcoin has already increased in value from its lows of call it 16,000 in november 2022 to 45,000 today so it's recovered very well from a tough

2022. >> yeah. >> so i think the etfs open up huge base of potential new institutional capitol. personally i have a lot of questions about how this is going to be done, the mechanics, but one thing seems for sure, they're going to be bitcoin etfs very soon. >> what do you mean? what sort of questions do you have about the mechanics that investors should consider? >> so many things. bitcoin will -- how will the institutions think about the suitability of this for their clients? there is a massive amount of discretionary capitol that these institutions control. will the suitability tests -- how will they be conducted? what about margin? you know, you can get 60% margin on a lot of stocks. is this a marginable asset in

exchanges and places where people currently acquire bitcoin? they're able to access loans using the bitcoin that they own. they can borrow against it. i don't know what a lot of these institutions are going to say. many of them may just say we're not going to open this up to anybody but institutionals initially, but people like schwab, robinhood, those types of self-directed investment platforms they may say, buy and sell as you wish. then you even have the issue of how are these institutions going to acquire the bit coin? because they do need to hold it one to one. there are only 9 the 00 bitcoin made a day, minted a day. 450 a day after april when the bitcoin halvening takes place. that's a little less than $100

billion worth of bitcoin. sure the price goes up, maybe you'll have more people wanting to sell, but there's a massive amount of bitcoin that doesn't really move. 80% or so of bitcoin is held long term. so these are the questions i have about how it's going to behave with etfs. >> yeah. micro strategy's balance sheet which is i think one of the biggest holders. >> 150,000 of the 20 million bitcoin are held just by micro strategy. that's right. >> so, i mean, can't they just say this is -- it's a speculative investment just like buying bitcoins futures etf is a speculative investment and buyer beware? >> i expect the risk committees will be thinking long and hard about this. after the financial crisis there were deciding inverse etfs, three x weren't appropriate for the customer base.

i think each institution will decide what they want to do. it's designed to be an alternative to that. there aren't exactly standard metrics you can look at.

>> seeing things like stable coins. central bank digital currencies become available. i think etfs will be a positive. they'll be a positive for crypto in general. how they behave is not clear because of so many factors that we just talked about. the. >> well, this is one that has to be continued, william. we opened a lot of cans of worms. >> then eventually of course things like ethereum etfs and other cryptocurrencies. >> thank you very much for joining us with your initial take from tether. >> thank you. still to come, we have a downgrade of the big banks ahead of earnings. we're going to tell you what names and why and as we head to

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welcome back. i'm courtney ragan with your cnbc news update. hunter biden is making a surprise appearance on capitol hill. he attended a house oversight committee meeting. they're holding a committee vote to recommend he be held in contempt of congress for denying a subpoena to appear foreclosed door testimony related to an impeachment inquiry into the president. hunter biden has said he's willing to testify publicly. u.s. and british naval forces say they shot down 21 drones and missiles in the red sea and what is thought to be the militant's largest attack yet. the u.n. security council will vote on a resolution that will condemn and demand an immediate end to the attacks. the northeast. s. washit by heavy rain and powerful winds leaving more than half a million people without power. new jersey's governor declared a state of emergency before the storm hit and he warned this morning flooding is only

expected to get worse as rivers crest today. if you're in the northeast, be careful. back over to you, carl. >> court, thanks very much. a little over an hour into trading. markets here, s&p just a couple of points shy of break even for the young year so far. let's get to dom chu watching bank stocks ahead of earnings. >>ing carl, we are tracking some of the increased rankings. citigroup is the first to report. downgrading it to a market perform. they are concerned the credit cycle return. bmo is downgrading goldman sachs to market perform citing the bank's exposure to potentially volatile capital markets revenues. goldman set to report next tuesday. those shares down 3/4 of 1%. turning to the brokerages. citi downgrading charles schwab. they see potential risk from

s.e.c. market rules and other headwinds. keep a look as the busy earnings kicks off on friday. now i'll send it back to you, sara, at the stock exchange. >> want to get to kate rooney with a news alert on amazon. >> amazon is laying off hundreds of workers across prime video and mgm studios and twitch. memos were sent to staffers and obtained by cnbc.com. an amazon spokesperson did say in that video they're making the cuts to prioritize investments for the long term and the success of the business memo says they are looking to reduce investments in certain areas and focus on more high impact areas, not just prime video. also 500 twitch employees, another memo obtained by cnbc this morning. executives saying we have to work to right size our company. they regret to share it. they're reducing head count by

just over 500 people across twitch as well. this adds to years of layoffs for amazon starting at the end of 2022. amazon had the biggest round of layoffs, 27,000 people across almost every part of that business. shares slightly higher this morning you can see. layoffs seen as a way to increase some of that operating leverage and efficiency. back to you. >> that speaks, kate, to just how much they expanded during the demand for services like twitch during covid. >> there's a little bit of right sizing. a lot of tech companies overhired in the pandemic and you're seeing this focus on high impact areas of the business and a little bit more efficiency here. >> amazon up 1%. thank you. kate rooney. still to come, the latest around boeing and the alaska panel air blowout. we'll take you to the boeing 737 max factory and eaahd a big

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join the millions of people taking back their privacy by downloading duckduckgo on all your devices today. we continue to follow the latest at boeing. ceo dave calhoun said they need to acknowledge their mistake. this is after a part blew off an alaska airlines flight. phil lebeau is in washington state and of course, phil, you have a big interview later today. >> reporter: yeah. it will be interesting to hear what dave calhoun has to say. i think his messaging will be similar to what we heard in the employee town hall yesterday. far different tone we're hearing from dave calhoun than what we heard from boeing executives after the max crashes and grounding initially. at that time, they were way too slow and too tone deaf. not the case today for dave calhoun. let me bring you up to speed in

terms of the grounding of the 737 max-9s. 171 of the 218 that have been delivered, 171 are grounded. those are those that have a door plug on them. and of those, they are in the process of figuring out what the protocol is. the faa was emphatic yesterday in saying, look, the inspection rules to make sure that those planes are safe to fly again, that has not been finalized. they're in discussions with boeing. again, 171 of those planes are impacted. alaska and united, the two biggest operators of dash 9s around the world. we mentioned dave calhoun employee town hall meeting. if you have watched some of the clips that have been put out by the company or you listen to the audio, you can tell that dave calhoun and his team realize the significance of this moment in terms of what it means for boeing and its future. in fact, he said we want to be as transparent as possible.

every detail matters as they work on trying to figure out exactly what happened on that alaska airlines plane and why that door plug flew out. don't miss it on "the exchange" and we're talking about dave calhoun and not just what happened on friday, but ensuring quality control and it has been a theme we have hit in the past. he has said it is one of his top priorities and yet you have an incident like last week which then raises the question, how do you change something that clearly is not working in terms of the manufacturing process or the inspection process, whatever it might be when they ultimately figure out why that door plug came out of that alaska airlines plane. guys, back to you. >> as you said, phil, the key question now is around culture, right, of safety. >> yeah. >> not making these kinds of mistakes.

i'm reading a lot of analysts about this and experts, it does feel like there is a key distinction between manufacturing and production flaws and design flaws, especially as it relates to this problem -- >> right. >> -- versus the crashes a few years ago where many people were killed. can you explain that? >> reporter: well, it remains to be seen what happened friday night on that alaska airlines plane. almost everybody i've talked with who is an aviation safety network, who has worked with the ntsb, when we've said, what do you think? just looking at what evidence we have right now from the public. almost all of them say the same thing. it's not a design flaw. they do not believe it's a design flaw. there are hundreds, thousands of planes around the world that are flying with door plugs and this is the first time that you've seen one come off like this which then brings up the question, was it a manufacturing issue? those door plugs are managed at spirit arir o aerosystems.

and then there's the question did anyone else have access to that door from alaska air systems. >> a lot of questions. we look forward to it. phil lebeau covering the boeing story again today. coming up next, the latest results in the cnbc nrf index and what it's signaling about deflation in a minute. meets bold new thinking. ( ♪♪ ) partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley.

got some new consumer data steve liesman has that this morning. good morning, steve. >> good morning, carl. the cnbc retail monitor using actual credit card data from affinity solutions shows retailers chalking up decent gains but the true state of spending may be clouded by a new factor, guys, which is deflation. retail sales taking on auto and gas. that's our top line monitor. up 0.4%. down from that really strong

november 0.8% gain. core retail taking out restaurants struggling a bit more. 0.2% compared to 0.7 in november. for the year, monitor was up 3.1 and core up 2.4%. economists have been expecting a cooldown after the outsized growth in the third quarter. too soon to say if it's the beginning of the broader consumer slow down people have been looking for. what we know, retail has been hampered by a slowdown in housing. all three of the biggest negatives are housing related, electronics and appliances down 3.2. gardening and home furnishings down 1% or more. traditional holiday retail, did better. people were out in force at the restaurants and bars and non-store retailers, that includes your internet, up 2.6%. deflation is another factor. goods prices take out food and

energy. they have fallen for six straight months. some categories where we saw the biggest spending declines have had the sharpest price declines. all that in mind, here's the result from 2023 holiday season, november and december. together up 3.7%. a good, not an outstanding, but a good christmas. core retail up 3.3%. so after months of subtracting inflation, you getthis to the consumer. now we get to add back in deflation at least in some sectors. the question is how are retailers managing margins, whether they can be still profitable with the prices on the way up versus it being down. >> steve liesman. up next, tesla unveiling its redesigned model iii as the ev market grapples with waning demand. are concerns about evs overdone? on "money movers" we will speak

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tesla recently announcing a revamp of its model 1 vehicle with production expected to start mid-2004. this comes as headlines do signal a slowdown in ev sales and perhaps waning interest in consumers. our next guest says that that's all overblown. gm board member john mcneil joins us now. john, good to have you. we've all seen the headlines. we've talked about them. it's not that it isn't still growing, but perhaps growth is slowing. why do you say that's not the case? >> hi, david, it's good to see you. i think the headlines are disconnected from the data. we sold roughly 700,000 evs in the u.s. in 2022. and that number jumped to $1.4 million in 2023. so the market doubled. and citi just released a study last week that said that 59% of consumers who are considering a car purchase are considering an ev. so i think the demand is clearly there and it shows in the sales

numbers. >> eah, so you don't buy this idea that, you know, the first adapters have already been addressed. that those who look at it now have range anxiety, concern about whether the charging network's up to speed, used car prices for evs have declined a lot. perhaps that after-market also worrying people. you're not a buyer of that? >> i think there are two things that are true in 2024, that weren't true in 2023. the first is charging, as you just mentioned. so this year, in fact, this month, tesla's super charger network opens up to gm, ford, and other manufacturers. so that means that there's really charging parody. and you've got ubiquitous charging that's available to ev buyers. so that didn't exist in '23. and i think that adds tail winds to demand in '24. i think the second thing that is unique to 2024 that wasn't true in 2023 is lower priced evs. you've got now a number of

models like the chevy equinox coming on. the equinox is a $34,000, $35,000 compact suv with 310 miles of range. those kinds of cars coming on are going to move the market. for people who like the bolt, they'll really like the equinox. >> and of course, our board member of gm. i wonder on that front, is it not the case that gm has slowed its transition to evs? we all know what the goal is and where it stands, but it does appear that things have slowed a bit in terms of ice to ev. >> i think all manufacturers and gm included, and gm has talked about this, are transitioning through a production challenge, which is battery-packed, battery modules, and battery cells. as they work their way through those challenges, you'll see the production volumes go up. and that's really what's affected volume in '23 and those

constraints should be relaxed in '24, and we should see a lot more production volume out of the domestic manufacturers. >> john, we just got some numbers of ev sales growth in the united states, at least, from cox. last q2, up '15. q4 goes to 5. q4 goes to 1. what do you think gets that back into double digits, if anything? >> i think what gets that back into double digits is more models at a lower price for sure. there's a sorting, carl, that's going to happen in q1, with the $7,500 federal tax credit. and a number of evs went off that list for q1 and the manufacturers are really working hard to get them back on the list. and i think that's what's good -- those two things combined, lower prices are going to drive more consumer demand, for sure. >> john, what kind of progress do you think will be made this year, in terms of the charging network? you mentioned it earlier, but when you do think about

impediments to people's buying decision, the idea that you might find a charger that doesn't work, or simply the time it takes, certainly could be one reason they don't go ev. what are your expectations for the advancement of that network? >> i think it's, you know, first, the tesla charging network being opened up to other manufacturers is an important step. i think number two is, we're adding 900 ev chargers a week now in the u.s. so we're finally starting to get to pace and the i.r.a. money is being -- is being now released to help increase that number even further. so we've got roughly 200,000 chargers in the u.s. we're adding roughly a thousand a week. and that's going to -- that's going to really help with, i think, answering people's range anxiety issues. but we've got a long ways to go. because china's got 1.4 million chargers, so almost ten times the number of chargers we've got here. we've got a long ways to go, but we are definitely getting on the right track and picking up our pace. >> yeah, and more and more

competitive evs outside of their domestic market as well. john, always great to get your temperature on these thing. appreciate you taking the time. as we watch the s&p and the nasdaq all in positive territory so far this morning, we will continue to monitor the markets. we'll have former fed vice chair richard clarida on tomorrow's big cpi in that's coming up. don't go anywhere. trade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab.

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good morning and welcome to "money movers." i'm sara eisen with carl quintanilla live on the floor of the new york stock exchange. coming up this hour, former federal reserve vice chair richard clarida on why he says the market is kbgetting it wron. >> eurasia president ian bremmer is with us. we'll get his top risks for the year and the top geopolitical issues that most to your motor. and later, williams ceo and the surge we're seeing in prices as winter weather hits the northeast. >> tech has been leading sloong with some consumer names in