number we got, and we're 396. we've been over 4% at different points this week on the ten-year. take a look at oil. we've got some trouble, perhaps, brewing in that part of the world. and then, we have bitcoin, which is giving back a little. i think it's below $46,000. make sure you join us tuesday from davos. "squawk on the street" is next. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla at post nine of the new york stock exchange. cramer is in kansas city at geha field at arrowhead stadium ahead of saturday night's wild card, which will stream exclusively on peacock. faber has the morning off. what a week. taiwan elections, dow futures are being pinched a bit. our road map begins with the banks' noisy quarter.

we'll get to jpmorgan, bank of america, wells, citi and blackrock. we are watching oil as the u.s. and uk make these strikes in yemen. tesla shares down as it halts some production in berlin. as we said, unh, medical losses have shares down 4% premarket. but we begin with jim in kansas city where the weather is going to be a story for you, jim, and for steelers-bills. >> coldest game in history is what they're -- certainly going to happen. it's already pretty freezing here. i will tell you, carl, this is streamed on peacock. i did come out here in part because i think that in itself is big news. i don't want to lose what the narrative is of today with the banks, with the ppi, but i'm thrilled to be here, and i'm thrilled that we are presenting the game, and i'll be along saturday doing some pregame. so, yeah, i'm here, and on to the show. >> it's going to be fun to watch tomorrow, jim. so, let's dive right in. very noisey, as we said, even with some revenue misses.

is jpmorgan the clear standout? >> yes, because you know what? they set the tone. the first thing they did was come out to say net interest income is really terrific. that's what we decide is going to be important. it's like, jamie dimon picked a metric, and that was the metric. i could hit on a bunch of it, maybe earnings per share, which would make it so you like wells fargo. i could say head count reduction, which is why you would like citi. i could say that bank of america is doing fine other than the last month of trading, but jamie dimon really kind of set the scene, and that's why you're seeing good numbers. he was incredibly positive about how much money they're going to make on the net interest income, and carl, it's a tour de force call by jamie. he delivered. nobody else delivered anything near what he did. >> very true, and it is net interest income up 18, 19. ib, up as well, jim, although his commentary about the economy being supported by stimulus and

government debt, the concerns about russia, ukraine, israel, he calls them profound. >> look, he's got the dangerous thesis. he's got to stick by that. he's saying it's one of the most perilous times for the republic. i don't think he's going to lessen that with what's happening in the red sea right now. i know he's going to davos, which ukraine is going to be on everybody's mind. but you know what, carl? that's his, let's say, his world view's negative. but his view of the bank is incredibly positive, and look, as a stock person, i mean, i watch "squawk" and was amazed at the breadth of knowledge they were talking about. i'm constrained by the four walls of what i do. jpmorgan was a great quarter, bank of america, not so good. wells fargo, you have to take it with a grain of salt. charlie scharf, ceo, historically watched the company overperform -- i mean, overpromise and underdeliver. he is trying to underpromise and then overdeliver. citi is just a black box. tangible book value is at $86.

the stock is so below that. i don't get it. unh, yes, it costs a little bit more to take care of seniors. i get that. i wonder if pickleball is an issue. >> we're going to get to unh later in the show. jane fraser did call the citi quarter very disappointing. they do expect 20,000 rif in the medium term, jim. the revenue miss, even amidst -- you got to strip out so many things to get a good adjusted number. >> you see now -- they preannounce because of argentina and russia, there's a whole lot of other things wrong, but when you have an executive who just says, look, we're going to get our expenses right, we're firing 20,000 people. on wall street, we love that. i don't know how we became so rapacious. we're vicious capitalists, but what we say to ourselves is, boy, they are really about to do what we want. they are about to get the earnings right. jpmorgan doesn't have to do that. they're already right size. i think you'll find that wells fargo still feels like they have way too many people. >> what about chargeoffs, jim? a little bit elevated at bank of america, up about 100 million

year on year, a little bit more than expected at jopmorgan, $2.7 billion. we were going into today wondering what we would hear about credit quality. >> i'm so glad that you highlighted that, because i was surprised when i looked at bank of america. you do your background calls. i didn't get that. i don't know why the chargeoffs -- it could be a reversal of something they sold last year, but they're seeing spending fine. they're consistent with the fourth quarter. the number that wasn't consistent was their trading in the last month. their trading was, i'm going to qualify it as bad. and that's what i think is part of the drive down. but i think that whatever you thought was the way in the third quarter, it continued for all these guys, except for the fact that the chargeoff's a little higher, which does say, maybe, and particularly with bank of america, maybe the fed should be done tightening. maybe the fed should be cutting, because if you have charge-offs, we don't want that. if you want to soft land, you don't want a step-up in

charge-offs. if the fed is looking at these quarters, carl, they are saying, you know what? we don't want to be tighter, we want to be looser. i don't think march, but i do think june. >> we'll talk in a moment about ppi and what that says about underlying wholesale inflation as we say, and maybe corporate markets. finally, jim, blackrock, nice beat, and then this big deal, diving into global infrastructure. >> you know, i really like this deal, i'll tell you why. if you want a higher income, these infrastructure deals with funded by bonds that are somewhat backed by the government that you're choosing. and one or two of them is going to default. if you're the wrong one, you're going to get hammered. so, why not have a pastiche of them, and therefore, if there's one or two that are -- that do default, you won't really notice it. this is a piece of paper that i want. i want a global infrastructure partnership piece of paper, because i think a lot of governments are under pressure, they need to raise money, they will do infrastructure deals. i thought that larry fink was

terrific. he was upbeat once again. this is a great deal for people who want to have more income, even as rates come down. i applaud him. i thought andrew's interview with him was terrific. >> assets above $10 trillion for the first time in a few years. >> $10 trillion. >> fink was on "squawk box," talked about the motivation behind this deal. take a quick listen. >> our investors already have been notified. they are really excited about this transaction. they see the merit. combined blackrock's infrastructure team and the gip team, we will now have over $150 billion in infrastructure, and we see more and more opportunity. >> so, overall, jim, i mean, we always have this day where we talk about whether or not the bank shares went into the quarter hot, so to speak, and we'll get more next week, but

you feeling good about this overall? >> yes, i am. i mean, just go back to wells fargo. there were two downgrades that prefaced this. but charlie scharf has to deal with the legacy of this company saying everything's great. so, now, he's come in with a different rap, and the rap is, look, we're not going to overpromise here, and so that's why that stock is down. my trust owns it. i am inclined to buy more if it goes down another point or two. jpmorgan, sometimes you just -- you get a quarter that is -- where there are no line items that are bad. this was that quarter. >> yeah. jim, add to the broader markets, we're going to put together a pretty nice weekly gain. we got the two-year below 4.2%. that's going to take you back to may positive last year, and this ppi number with the one handle on the year on year core, 1.8%, is going to maybe accelerate the conversation that may be earnings estimates are too low. >> i think that what we're going to discover is that there was rent that was bad, and by the way, i mean, this is for cpi.

we're now looking at it through ppi. it might flow through. then you're looking at a stadium. you're looking at a stadium where the chiefs play, and one of the things that really has crushed us, price of service, of going out. that is not coming down. one of the things -- you know, we've got $10 trillion. that's a nation, blackrock. we have taylor swift. she's a nation. and what i -- of course, being a little facetious, but that's a principal part of what we can't get down. the stickiest part of inflation is travel and leisure. if that came down, i think we would see terrific cpi. i will say this, carl, yesterday's trading, it looked like the market was going to fall apart, and then bonds u-turn and interest rates went down. that saved the day. can it happen again today? you mentioned at the top, the third thing you mentioned is long weekend. long weekend usually means for traders, let's square up, let's do some selling, particularly with red sea, particularly with

taiwan elections, so get expect it to have a fantastic day. >> yeah, yeah, we do have the elections on sunday. the china military with some saber-rattling about those who want to bolster taiwan independence. blinken is going to meet with some senior chinese officials today in advance, jim, and then you got china deflation, three straight months of year-on-year deflation on cpi, down 0.3. that's the longest streak since '09 as people are looking to see how they respond those macro figures. >> deflation is more pernicious than inflation, as we saw in pre pre-nazi germany, because what happens is, if you know prices are going to come down, you have no desire to spend because you know three months from now, it's going to be worth less. that trigger hyperinflation in germany because they were trying so desperately to get prices up. right now, in china, people are sitting on their hands. this is going to hurt iphone. people are going to draw a

conclusion that this is going to hurt apple. but you can't have persistent deflation without people saying, you know what? i'm not buying anything. that's going to be the achilles heel of the chinese. >> your point about overall inflation is so important, because as you say, service have been sticky. we've been getting progress on goods. we have these joint air strikes in yemen. the houthis today say there will be a response. that's imminent. brent back above $80. how much can we rely on further goods disinflation if, in fact, this does escalate? >> great points. seasonally, this is the best time to go long oil. in other words, best time to go after something that could hurt us. i hope people realize that if there's just some extenuating events, but this period, december, january, historically, oil has shown a spike. i had carly garner, my best commodities analyst on, doing her work. people should be careful. oil could go up big here, and that's going to surprise people.

when i say big, $80, $85, all within reason, all within our scope. >> on west texas? >> i'm sorry, on brent. west texas could go too high. let's understand. it's a seasonal issue. it has happened overa and over again, so i think the calendar dictates that you could have a 10% move without a problem, and that was before we had what's going on with the red sea. >> right. we heard from tesco yesterday in europe talking about food, the possibility of food inflation because of the red sea. now we have tesla pause some production in their facility near berlin on the same issue, jim. the market is going to be highly attuned to further corporates that say, look, we have to take steps to mitigate this uncertainty. >> yes. and then i come back to what burberry said. they had a horrible quarter. they missed my 100 million pounds, and that means, to me,

that the rich people, they're just not there when it comes to buying things. this is a common theme. we don't know what the rich people are doing, but i think they're going to their money funds and getting that great return. >> yeah. second warning from burberry in three months in a time, jim, when inflows to cash, first two weeks of the year, strongest ever. $163 billion to your point about what the wealthy are doing with what they've got. >> yeah, look, one of the things that the fed should be cognizant of is those rates are so great that they're very competitive, the two, any sort of investment that might give you return down the road. people are fleeing to cash. it is maamazing, carl, that thi stock market is so good, given the flight to, let's call it, high-quality cash. and i think that we should be cognizant, there are some things that i think could roll over here, carl. i think bitcoin is going to roll over right here, right now. >> we're going to talk about

that. >> sell. >> we're going to talk about that and what gary gensler said on "squawk box" this morning. we'll talk some delta among the big laggards this morning. we'll dig through their numbers. tied to that as more news from the faa this morning about their probe of boeing. take a look at the futures. s&p is hanging in there despite some of the pressure, and the dow trying to shake off some of that weakness from unh. more "squawk on the street" straight ahead. when you think of investment risk, do you consider climate risk? changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments? ice offers data and markets that can provide critical insight. manage your climate risk with ice.

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we expect to see an inflection point in the first part of this new year in terms of our domestic unit revenues turning positive, and also corporate travel is up. again, finish the year strong, and it's picking up again. so we're now probably back almost 90% of where we were pre-pandemic levels and continue to ing to build. >> great interview with delta's ed bastian this morning from our phil lebeau. revenue up 11, and corporate up double digit in december. >> i think he tried to throw a little cold water, talking about a little bit of cut in estimates, because of some costs, but when i listen to ed, look, ed is a guy who, if there's no corporate travel, he just says it. in other words, he's a straight shooter. but i do know, in the end, they cut numbers. when you cut numbers, the stock goes down. >> yeah. >> not a lot to it. >> guiding full year, six to seven. street is at 650.

is it more about oil today? >> yes, just talk about high costs, and i think that what happens is people say, listen, if there's high costs coming down, and oil just jumped -- if there's high costs coming down and uncertainty, i just think that cost story is not a great one, and that is hurting the stock. i tell you, owning the airlines again has just become fraught, because there's just some line item every time that's negative. and look at southwest. remember when southwest was a blue chip? holy cow. >> as buffett famously said, long ago, jim, i mean, it's never going to be a wonderful business. you got trade issues. you got unions. you got safety. you've got consumer. it's easy for new entrants. given various business cycles. they did order a bunch of airbuss, and some of the airbus delivery data shows they're gaining on boeing, separate from this issue with the faa. >> look, i know how hard it is to shift. i mean, we know that southwest

came on our show, carl, and blasted boeing, and you thought for sure they were going to go move over to airbus, they were so negative. no, they ordered hundreds of boeing planes. so, it is a sticky business. boeing, no matter what, seems to be able to keep its book of business. not a lot of switching. by the way, warren buffett, u.s. air, was not a great investment. >> yes. >> i want to point -- i thought, by the way, i thought dave calhoun did a good job yesterday, and phil pressed him on everything. i was ready to jump on him if he didn't do a good job, particularly because dave faber got me out of the stock. much criticized by david. but you know what? in the end, you got to -- the facts -- he stuck with the facts, and the facts don't make for a good story. >> yeah. we're going to watch, obviously, the boeing story carefully as the faa now, even in this interview this morning, jim, with "squawk," raising the possibility of maybe a third party at some point supervising production. that's a longer term story.

we're going to get a midwest edition of cramer's "mad dash" as we count down to the opening bell. he is in kansas city for the wild card tomorrow. futures improving. now the dow is the only laggard. "squawk on the street" continues in a minute. coach saban, this goat done took over our office. and he's using it to send out medical bills. good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time! aflac! because aflac gets you money to help close that gap! now how do we get this goat outta here? (whistles) aflac! meet one of my new homies! gaaaaap! get help with expenses health insurance doesn't cover at aflac.com. elephant would've been scarier.

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. time for cramer's "mad dash" as we count down to the opening bell. >> high-quality problem, costco. tens of thousands of people, according to bloomberg, lined up this morning to get into a costco. they had to have crowd control. only a hundred every ten minutes. there were actual very much

issues about the government worried that they were just -- could they maintain control of what looked to be mayhem because the chinese love the store. carl, people say, is costco saturating the world? and the answer is, if you have tens of thousands of people lining up for a new store, i think you have room parfor more costcos. >> that's pretty interesting, jim. thinking back many years to where we did a long look at costco, they admitted at the time their achilles heel was probably e-commerce and how have they managed to make so much progress without doing the kinds of things that, say, walmart's done online? >> well, they've done a little bit of e-com, but yes, it's to go to the stores. the stores are the fun. right now, they have been doing gold bouillon in our country, and gold bouillon is in short supply for them. they're trying to constantly replenish. but the stores are a thing of greatness for people.

it's a fun place to go. and i think that obviously, e-com is not fun. e-com -- amazon is not fun. it's utilitarian, but costco is fun. it's a bargain. the chinese love a bargain, clearly. they may not be spending -- there may be deflation there, but it sure ain't at costco. remember, costco is a volume play, not a price pay. they're not trying to make money off you. you buy the card, that's where they make their money, and then you get the lowest prices. it's a fantastic model. it is a little bit like amazon prime. >> yeah. >> you pay more for amazon prime, you pay more for netflix, and you pay more for costco, and i don't think anybody would be unhappy. >> pretty good color on that last comp about discretionary nonfood doing pretty well here. >> they're buying tech again. and we know from gardner that the fourth quarter showed that tech was starting to bottom. i saw a dell interview on frank

hollande's excellent show this morning. pcs are where you want to be. >> your i.t. refresh story, jim, is definitely fleshing out quickly here. >> it's catching up. >> we'll talk about that after the bell. >> i was afraid that the facts would get in the way of a good story, but so far, the facts are bearing me out. opening bell coming up in five minutes. catch us any time, anywhere, just listen to and follow the "squawk on the street: opening bell" podcast. to duckduckgo on all your devie

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. bitcoin itself, we did not approve. we do not endorse. this is a product called an exchange traded product, a way that investors can invest in that underlying, nonsecurity commodity called bitcoin. but yes, investors, i think, should be aware that this -- the underlying asset is a highly speculative, volatile asset, and

amongst its use cases is really f for illicit activity. >> that's gary gensler talking about bitcoin a day after the bitcoin etfs did top $4.6 billion in volume in their first day of trading. jim, i got to know what larry williams is telling you about the bitcoin chart. >> he's been texting me, saying, listen, i'm going to give you a chart that shows youthis thing is absolutely -- larry has been so right. he called the bottom in october. he said they were going to have a great november and december. he said, let's be careful, market's up a lot this week. it could end up not being so great. but the main thing he said, i mean, this is -- i've never heard him be as adamant about a call that this is when you must sell bitcoin. listen to the worlds of what gensler said. it is not an etf. he made that point. it's not an etf. it's an etp, which means it's not covered by the 40 act and the people who issued these

things can do anything they want with it. the 40 act is basically saying, listen, we can investigate the people who issue something. this only has 33 and 34 act. it's not an etf. and those who call it an etf just heard from gensler that it's an etp, which is quite different and doesn't have the protections that people should get, and that's why he said he's not endorsing it. >> let's get the bell under way and the cnbc realtime exchange. at the big board, it is home builder smith douglas homes, celebrating its ipo yesterday. at the nasdaq, it's car-sharing platform zoomcar, celebrating its recent listing via spac. jim, are you surprised by the way breadth has filled in here pretty green? >> the bond market is so bullish for stocks. i mean, we get these numbers, interest rates look like they're going to go up, and then they go down, and it makes it so there's

a terrific background. carl, i do have to say, we have a war in the red sea. we have oil screaming. you would expect a sea of red to go with the red sea. no, sea of green. sky of blue. >> well, you wish. we'll see how blue it is tomorrow night. >> i know. five degrees. >> you're saying it does reinforce the point that it's all about rates. the market assumes that geopolitics or other wrinkles are going to get ironed out, but in the end, the cost of capital is going to drive trading. >> yes, and i do point out, i feel like brian moynihan, bank of america shouldn't be this. it's crazy. it wasn't a bad number. brian moynihan saying, rates are going to have to come down, and i think bank of america is starting to do the right thing. rates should come down. i think the overall theme from the bank -- from the bank ceos is, listen, the curve is the curve. we have to accept the fact that

people think there's going to be a lot of rate cuts. there probably won't be. everybody's inclient ned to say look, the fed is going to make a very positive move here, whether it's march or june. i like that. that's a great backdrop, along with interest rates not spiking yesterday, going down, and interest rates not spiking on oil. what does it take? it's benign. >> yeah. mester, of course, on the tape yesterday did say that march was probably too early, but next week, jim, we get waller, who now famously said there's a path to cut, even just to maintain the level of restriction on a real basis. that waller speech next week is going to be big. >> i don't think that's different from what the top bankers are saying. wells fargo, i think, would certainly agree with that. wells, remember, i know this is hard for people to understand, but wells had a history of really forecasting about it. previous regime. forecasting horribly and then every time they would dcome on,

on the 3:00 show, and say we missed. i have said that charlie is not a nice guy. i'm going to take that back. >> we're going to talk to mike santomassimo, the cfo, this afternoon. the leaders are bny, citi, jpmorgan, along with marathon and eog. >> this is incredible. i mean, to have both of those go up. i mean, we would have thought that something inflationary would hurt those, but jpmorgan's price to earnings multiple is so ridiculously low versus any enterprise software company. you're buying these companies cheaply. reme remember, the number one performer so far this year is health care. these numbers, if they continue, we would start liking them more than tech. i do think that it's great to have some broadening. i was hoping for it to happen across the board. it's not it was health care's turn after jpmorgan. health care conference, now it's

bank's turn but it's not a negative environment of. it's benign. >> unh was taking more than a hundred points off of dow futures. it's still the biggest laggard on the index, jim. the medical loss ratio got people's attention, which some found confusing, given their scale. what do you think? >> i think that they've got -- they talked about care for seniors, outpatient. they don't seem to have the outpo outpatient costs down. i don't know about that. it is very confusing. it's basically a miss of about $100 million. unh is a terrific company, and it is an election year. they're easy to beat up on, but i find that if you buy unh on these dips, you do well. and they're giving you another opportunity. there will be some number cuts on tuesday, and that would be when you buy. not today. >> as for sectors that are leading, we mentioned financials. we mentioned energy, jim.

semis are going to get some boost from in qualcomm call out of citi. they go to buy. they go from $110 to $160. they think that the inventory replenishment in handsets is ongoing. >> i found that call quizzical. i think qualcomm is a classic overpromiser. i don't really want anything to do with them. you can take it up all you want. i just don't see the value there. the stock has had a terrific move off the low hundreds levels, and i think you should just let that one lie. i would not touch that. i do like that marvell had some good things to say at ces. that mattered to me. not crazy about intel here. i think amd is very good. if you want to buy cell phone and general tech, it's broadcom. abgo. i think they're the one that's doing the best, and don't forget, they have a new software component that matters. i just think that broadcom is the one that is the way to play this. it is very inexpensive. >> how about this regeneron call? rbc goes to overweight or

outperform. 1076, jim, would be upside. >> this call is fantastic. and i say that because earlier this week, glen, who was on "mad money" at jpmorgan, people felt that his new -- let's just call it the more powerful drug, the one where you shoot it in your eye, macular degeneration, was disappointing. the numbers missed. what a buying opportunity. regeneron has a fantastic pipeline, and don't forget, they think that they have a holy grail obesity drug that would make it so you don't lose muscle. obviously, what happens with these obesity drugs is you lose everything across the board, and if you lose muscle and you're someone who's a senior citizen, you can't get the muscle back. i like this call. i think it's terrific. >> biggest laggard, jim, on the ndx, is tesla. we mentioned the production cuts in berlin. we talked to hertz yesterday about them cutting a third of their ev fleet. cutting prices in china.

a piece today looking -- from morgan stanley, looking at the oems in china. their backlogs are historically thin, so they're moving to book as many orders as they can. a lot of that's happening through price. >> i think tesla is a company that is valued in a way which just says, listen, remember, it's not an auto company. it's a technology company. these numbers are not good. we haven't heard much lately about their so-called pickup truck. the lamborghini of pickups. i don't know if i want to throw a bunch of trees and my plants into a lamborghini. i do think that tesla's not -- i thought that it was chilling to listen to steve schroeder yesterday talk about hertz and tesla. that was just -- wow. i mean, people who want to adopt a tesla, i guess, have done it. it doesn't sound like there's a lot of follow-through in this country. >> right. i've been thinking about you because of these downgrades or these calls on software, including snow, as barclay's

cuts to equal weight. their argument is that, whoever delivers on a.i., it's going to be the larger players, in their view. >> look, i think frank slootman, he's -- hey, he's not a nice guy. slootman's tough. he is -- we call him the flying dutchman. he is from holland, and he's a -- he went to erasmus, and he is a very exacting guy, and if you think that he is not going to pull this off, the rent the cloud at a time when everyone's gone crazy for trying to get nvidia chips for a fortune, i think you're gravely mistaken. if this stock goes down off this call, say, 5, 10, buy snowflake. slootman did miss a couple quarters. he was not great in the may quarter, but i don't like to bet against snowflake, and those who have, please, again, send me your invitation to that funeral. >> jim, really quick, while we're here, 4,800 and a 52-week high. that's going to take you above

the closing high from january of '22. i think dow, record high, jim, just a testament this morning to the power of some of these financial components. >> yes, it's really great to see companies that sell at 8, 9, 10, 11 times earnings getting a little appreciation. those stocks are cheap. anyone who wants to own a bank stock, you're not overpaying. let's put it that way. >> twilio, piper does upgrade to overweight. not completely out of the woods, but some revenue stabilization going on. >> that's a painful call. obviously, all of us like jeff lawson. one of the great guys in the business. taught me how to code, by the way, and this thing is just dripping with, it does better without lawson. it's painful. it's kind of like patriots do better without belichick. it's painful. but could be true. >> on that theme, some of the layoffs going on in tech, jim. we talked about it yesterday vis-a-vis google.

today, b of a comes out and says maybe there are more layoffs to come. you talked a minute ago about how much we applaud our corporates for being so nimble, but b of a's opinion is that the influence of a.i. on your head count is starting to get felt first by the companies who know that dynamic the best. >> i was surprised. those of us who pressured ruth, the unbelievable cfo, moving up in the ladder now, about how their costs are just out of line, she's listening. she's listening. and i think it's really terrific. by the way, amazon, in their layoffs, they were very targeted. they talked about how we figured out amazon prime. we don't need as many people. i have clark hunt on tonight, owner of the chiefs. i don't know if it's good to have a -- an nfl game on constantly, but i did think amazon was very smart to have one on black friday, because what happened is you decided to order online, and you didn't want to miss that game, i guess, if you were david faber, because i thought the game was quite

boring. but he's a jet fan. whatever team is doing badly. >> the ratings numbers don't lie. some of the numbers from that weekend were truly eye-popping. and to the broader point about how technology is influencing the innovation, the efficiency of the economy, that's one more thing that larry fink talked about this morning on "squawk." take a quick listen to this. >> the equity market is resilient because we have become the dominant country in new technology. i mean, the -- the transformation of medicine and drugs that, you know, that are weight-reducing, that slow down dramatically alzheimer's, i actually believe we are spending way too much time on the negatives and not enough time on the wonders of what technology and the good side of technology. >> way too much time on the negatives, jim. what do you think?

>> i love larry. i think he's absolutely true, and he was on our show, he -- i think he imbues terrific thoughts. he gets his point across. and just like what he said, the stock was down 7 in premarket trading. now it's up. we spent too much time selling blackrock. we then buy blackrock, $10 trillion under management, terrific new acquisition in naples, going to be able to invest inprivate, public infrastructure bonds, and he embodies what we want, carl. things are much better than you realize. and when i listen to him, i kind of feel better about everything, and the way you feel better about everything, go buy a stock. >> we're going to talk more about whether or not this feeds into the results we're going to get next week, but first, let's get to at least jpmorgan's call now wrapping up and for that, we'll turn to leslie picker. good morning, leslie. >> a while ago, cfo jeremy barnum gave some color on the call that ended about 15 minutes

ago about the state of the consumer, and the potential inflection point in spending. >> the way we see it, the consumer is fine. all of the relevant metrics are now effectively normalized, and the question really, in light of the fact that cash buffers are now also normal, but that that means that consumers have been spending more than they're taking in, is how that spending behavior adjusts as we go into the new year in a world where their cash buffers are less comfortable than they were. >> jpmorgan management reiterating that the economy remains resilient, jamie dimon saying in the release, though, that the economy is "being fueled by large amounts of government deficit spending and past stimulus." and he says that, "may lead to inflation being stickier and rates to be higher than markets kpp. "the firm remains a beneficiary of the rates regime. the profitability metric from

loan making, nii, and the firm issuing guidance that was a little bit higher than much of the street expected with management using the assumption that the fed will cut rates six times in 2024. the firm saw growth in nearly all of its businesses in the quarter, including higher investment banking revenue, that was up about 13%. barnum said on the analyst call that the firm is seeing a "pick-up in deal flow," noting that he expects the environment to be a bit more supportive, guys. >> leslie, busy morning for you. appreciate that very much. leslie picker. jim, to leslie's point, ib up 13 at jopmorgan, 15 at wells, 7 atb of a. what does that mean for goldman and morgan stanley? >> morgan stanley had a quarter that was light. it was light on wealth management. james gorman, last quarter, hate to see him go out on that note. i do think that my travel trust owns morgan. the stock did go from $70 to

$92, so let's not be too tough on them, but this is a clarion call to buy goldman. bank of america, by the way, did not see the same consumer spending pattern that jpmorgan saw. they saw less consumer spending. bank of america, this, a good example, stock was down $1.50 by morons who said, i'm just going to sell because the headline wasn't so good. if they had listened to brian moynihan, they would realize it wasn't a bad quarter. this is a bad group to shoot first, this is a conference call group where you should make your mind up after listening to the conference call, not after you read the press release. >> from what i'm hearing you say, the curve is the curve, and all the bhaanks are going to sa that and the worst fears about consumer credit degradation are at least not happening yet. >> totally right. and i do think that leslie made a great point, which is they were using the forward curve six. everyone's kind of constrained by the -- what the forward curve looks like and they're appendicumaking the projections based on that,

which is why i'm going to say charlie scharf and wells fargo, i would not sell on this. what he's going to do, he's going to surprise you. people want to take it down to $46, buy the stock. that's what we will do for the travel trust. >> the other interesting thing, jim, we talked about it maybe a year or two ago, but expense growth. i mean, b of a is a good example. expense is up one. i wonder if you think that points to the sort of discipline that we are seeing to some degree in tech as well. >> yeah, i mean, look, we've got head count coming down. a lot of the expenses that you see from these banks are one time. it's firing people. there are way too many branches. technology's really working. zelle from bank of america is now bigger than checking, for heaven's sake. i think that these banks had underspent. now, let me be careful. jpmorgan spent a lot of money on tech, and they've done a great job. wells fargo historically had

underspent on tech. charlie scharf has to bring that up. jamie dimon doesn't. no flaws in this jamie dimon quarter. there just weren't any. >> deposits in line. loans in line. everything except dimon's, you know, sort of macro color and commentary. >> you know, he's the opposite of larry, what can i say? larry fink tells you the good. jamie gives you all the bad you want and then he dollops a little more bad. i criticize his dangerous thesis. he wasn't happy with my criticism, but look, what can i say? it's not a halcyon time, obviously. but if you go back to, say, december 8th, that's a more perilous time. there have been -- how about when we had to move all the bombers down to florida in order to be able to counteract russian missiles? perilous time. there are some perilous times. the battle for the imperial city of wei, which we lost, and cronkite goes to vietnam and

says, we're losing the war. are there other moments where the republic was much more challenged? by the way, he's not really talking about a challenge that colorado brings up, which is, can you have a violator of the 14th amendment insurrection clause still being able to run for president? >> right. yeah. some interesting comments on the '24 election from bill ackman on "squawk" today as well. jim, we'll see how much of this holds. s&p, as we said, 4,801. dow up 45. ppi, we talked about at the top of the show with that year on year core print, pretty interesting, and the headline, month on month, down 0.1. with all of that, yields are lower. ten-year down to 3.9%, and the two-year, 4.12%, wow, sinking below 4.2% earlier this morning. .

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s&p still on track for an all-time closing high today. we'll see how much of that holds. juniper on the news regarding m&a earlier in the week, palo alto and nvidia up there as well. s&p shooting for 10 of 11 weekly gains as we finish out these five days. we'll get stop trading with jim in just a minute. only at vanguard, you're more than just an investor, you're an owner. our financial planning tools and advice can help you prepare for today's longer retirement. hi mom. that's the value of ownership. it starts with a grill. but it becomes so much more. an extension of your home. not just a weekend retreat, but an everyday getaway right in your backyard.

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>> god. schefter, youngest coach, very exciting. a new regime up there, and i think there is energy. we should get bob kraft on. he's a terrific guest. you're right. schefter, so jealous of him. his daughter looks really good on the nickelodeon football. really terrific. i like that. i'm into dylan schefter. >> tell us what's on tonight and then the next 24 hours is going to be like for you. >> well, first of all it's long underwear. i will make that point clear. clark hunt, chairman ceo. is there football saturation or do we not have enough football? it's the only thing people put on in real-time. sports gambling by the way. tony dungy and rodney harrison, unbelievable pre-game. rodney harrison played for the pats. find out what's going on there. maybe he has insight. he played, he knows this fellow who became the coach. i think it's a big deal. yeah, i'm going to do pregame

tomorrow. right now what i'm doing is trying to stay warm with our crew, who is unbelievable. this crew is amazing. they set this up, i don't know, in lick kitty split. thank you, crew. >> looks good. we're all going to be watching you and the game tomorrow night. >> peacock. >> have a good weekend, jim. >> you too, buddy. >> have fun. jim cramer. don't forget "mad money" 6:00 p.m. eastern time tonight. when we return a lot more on the banks, talk jpm, wells citi. a shade below 4800.

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. good friday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with mike santoli, live at post nine of the new york stock exchange. david faber has the morning off. we'll see sara eisen later on this morning. s&p does hit an all-time closing high and the dow hits the record high, but the situation is complex, of course, today given the banks, the oil, the joint air strikes in yemen last night and a long weekend which which include elections in taiwan.

>> we are 30 minutes into the trading session. here are movers we're watching this hour. big bank earnings front and center and it was a mixed bag. jpmorgan and citi are trading higher off the numbers while bank of america and wells fargo under pressure. we'll have much more on the financials in just a moment. united health the drag on the dow in the early going. the company topping profit system, but high demand for nonurgent medical procedures drove up costs more than anticipated. stock down 3% pulling about 100 points off the dow. shares of delta airlines. profit at the carrier doubled in the fourth quarter but the company trimmed its 2024 earnings forecast and we will have more on delta and the airlines coming up. tensions in the red sea rising and so are oil prices after the u.s. and britain carried out military strikes against targets in houthi-controlled areas of yemen. head live to tehran this hour for the latest. >> let's talk markets this morning. i'm curious to know what you're interested given the banks, and

then the -- i guess the opening gain and some selling off here. >> little bit of a fade. look, i think for two weeks we've kind of been going sideways. the majority of stocks pulling back. but the market continued to sort of color within the lines of a routine pullback or digestion phase. you had actually the s&p finish higher than its mid-point every day this week. there is an underlying bid. there was also a sense there was talk about this a couple days ago, enough accumulated evidence that inflation is going the right direction, that we might be able to look through a little bit of a blip higher in cpi. that's pretty much what happened. then ppi very encouraging today. the bond market is in this huge rally mode. they're essentially saying march fed rate cut seems more on than not, and actually, might be a substantial number if you believe what 2-year is trading. 4.12, like 120 basis points below where the fed funds is right now. that's the market's way of saying don't get too far behind

the curve, fed. that said, i do think you see small caps rolled over relative to the nasdaq 100 so far this year. a lot of broadening action in late 2023 is sort of given back some of that. it's still a little bit of a mixed bag. it wouldn't be surprising to have a little bit more of a pullback. that all-time high sitting up there, too close not to touch it. >> yeah. i mean, 4800 has been stubborn thing for the bulls to punch through. >> yes. >> i did notice funds strat technician mark saying maybe january is copy and give 60% back from the october rally before you can set all-time highs. >> that would bite if you get 60% of call it 17, 18% rally back. 4818 is the intraday high. i'm not sure how much money is kind of clustered waiting to either, you know, kind of sell it or buy the breakout, but it does show you that bar i think

on the average stock has been lowered enough on earnings that it seems like you have a little bit of insulation against adverse surprise. >> does ppi today say enough about input costs? can we translate that to margins and what that might mean for earnings season? >> i don't know if we -- if we can extrapolate fully on that. it's noisy to try to knit it together on a sector by sector basis. i think the way the market views it is, this has positive implication for pce, but that's what fed is going to fixate on and that's what happened last month as well. you saw the flow through and building confidence that inflation sooif the soft landing scenario is holding together. we would see about the growth resilience, which, of course, is also a necessary sneeze that month-on-month chart goose eggs >> the goods deflation on the wholesale level is dramatic. jpmorgan reporting a drop in

fourth quarter profit but posting its most profitable year ever. profit at bank of america also fell. credit loss provisions at wells fargo jumped and citi's ceo jane fraser called her company's performance disappointing in the past quarter. let's get the street's reaction. joining us is baird analyst david george and director of equity research ken leon. good morning to you both. david, what are we looking for here? we knew it was going to be messy stuff in there with the fdic charges and the rest of it, but on credit quality, on net interest, and i guess on capital markets activity what did we learn today? >> good morning. thanks for having me. so from my perspective, we talked about this on monday, when we downgraded wells fargo as well as a couple other stocks, the bar, mike, going into the earnings season was the highest since last january. a lot has happened in the banking industry since that point in time. numbers broadly were fine.

interest trends were in line, as were fees and expenses and the forward outlooks on net interest income were a little bit soft relative to expectations, but a little bit of profit taking isn't particularly surprising and i would characterize today's numbers as pretty solid across the board. >> ken, you know, we have the market in a familiar posture, which is buying jpmorgan and kind of fading the rest, at least the very immediate reaction. it seems like it's the one that is, obviously, distinguished it will across the board. is it still the right approach for an investor to essentially, you know, migrate just toward quality within the sector or do you think there are opportunities elsewhere? >> well, the bank stocks are pretty quiet, but that's after a really strong fourth quarter. jpmorgan chase, i think, is best in breed, quality, and there's a debate of the analysts whether to go with turnaround transformation stories like citi or stay with jpmorgan which we like and have a buy.

again, you know, today's message is really, we can take the "r" word for recession off the table, and if we do see moderate loan growth that will benefit not only fee service income, but also net interest income. overall, investment banking is really set up for a very good year after hitting the trough last year. there's enormous amount of activity that wants to come to the market, particularly for private equity firms, and overall, we also like to worry about credit risks a little bit of an uptake on credit cards, but commercial real estate seems more manageable for the larger banks, versus some of the rallies or smaller banks. >> to that point, next week, as we get further into financials, when does the conversation about investment banking move beyond green chutes? we've been leaning on that headline for a while. >> that's right. and i think what we're beginning

to see is corporates being conservative, you know, in the early part of the year as it relates to capital investment as they figure out where their rates and costs of capital is going to be, but we are beginning to see activity in debt underwriting and equity underwriting, and i would really underscore the private equity firms were not able to release or monetize sizable businesses that they want to see an exit, whether it be through ipos or m&a. so this is going to be i think the stronger part may in q2, but overall, it's not going to be v shaped, but we see and you'll hear from morgan stanley and goldman sachs next week, of more optimistic view about 2024. >> david, with bank of america in particular, it has traded off the, you know, highs after that fourth quarter rally and what are we getting out of the numbers here? it seems very steady as a story and there's a little bit of, you

know, expense that you can kind of look at, i guess, to help things along. otherwise, feels like it's not a whole lot in terms of new drivers there. >> no. that's right. mike, from b of a and wells to an extent as well, the treasury and cfos of both companies have incorporated the fed's forward curve in the outlook for net interest income and a more aggressive easing from the fed actually in the near term, has the potential to have a more negative or more muted impact on net interest income for bofa and wells fargo, maybe bofa more so than wells fargo. both companies are what we would characterize as asset sensitive. a little bit of a reprising dynamic. i think it's a function of that and again, to your point, these stocks have had 30% plus moves so a little bit of profit taking in the construct of what we thought was -- were relatively good quarters is not particularly surprising at all. >> ken, you mentioned there's a

debate about whether you might want to migrate toward the citi of the world where there is a company specific transformation program going on. they seem to kitchen sink a bunch of charges in the last quarter. they're reporting new business line detail. do you not think that that's a good entry? >> well, i think it's, you know, j jane fraser has a multiyear plan, but it's going to take time. we went through this with wells fargo, and i think for where citi comes out of this is a much streamlined, smaller bank, maybe even more akin to like a bank of new york, so for investors, when you think of this financial sector, jpmorgan, bank of america, are incredibly important. citi, perhaps, becomes a second-tier player just by the nature of selling many of its banks outside the u.s. and trying to communicate to investors that what's going to drive future growth is more durable businesses related to

treasury services and try to rebuild asset and wealth management. it's a tough game to play when you have 20,000 employees being laid off and you have writeoffs in average rgentina and russia. we have a hold rating on citi, bought lot of analysts like citi on this transformation story. >> finally, i'm curious to know your thoughts about what we've been through the past couple days with bitcoin, etfs, the flywheel some are trying to draw or spin out now regarding interest and adoption and education and infrastructure. i wonder if you think some of the critics like dynimon will he to reconsider in the quarters to come? >> i am not a bitcoin person. any time i don't understand something, i usually kind of step aside and leave it to smart guys like yourself to try to figure out bitcoin. i'm kind of in the -- in jamie's

camp as it relates to bitcoin. i'll kind of let those comments stand there. >> all right. fair enough, david, ken, appreciate it. thanks for the reaction this morning. speaking of the banks don't miss wells fargo's cfo next hour on "money movers". >> day two of trading for the spot bitcoin etfs. bob pisani watching volume yesterday. today tracking the action. hey, bob. >> it's -- it was a great day yesterday. a lot of skepticism, and overall, very impressive numbers in terms of volume and in terms of inflows. it's really the inflows, the assets under management that we care about. in terms of winners here, i saw a big dollar volume winners, grayscale, blackrock, fidelity and bitwise. $4.6 billion in volume on the first day of trading. that's pretty good. what we want to see is what the inflows are. this is essentially the assets under management. there were four big winners here, bit wise number one, $237 million in inflows.

fidelity, blackrock and ark 21 shares. the largest by asset under management is grayscale, an existing asset base here, they have 26, $27 billion in assets. these were the newbies on the street, and that's what we're sort of watching here. the way to look at this. see $237 million, bitwise went out and bought $237 million in bitcoin and turned around and they bought it from trading partners like james street out there and then deposited that bitcoin at the custodian, the custodian in the case of bitwise is coinbase and that's the custodian for a lot of these. bitwise should have an account at coinbase with $237 million with bitcoin in it. that's the way this works essentially. what we want to see next is what happens next, is we're going to be monitoring the tracking of these bitcoin etfs against bitcoin and bitcoin futures. everybody wants to know how good is the tracking going to be, and it should be good. it should get much better over

the next couple days, as things tighten up here. next broader institutional investment or wirehouses, broker dealers, asset managers going to be comfortable recommending this? gary gensler has fired shots about this. some will, some won't. options. usually you're going to get options on these, and that will probably follow in the next several months. the bitcoin etfs right now, because the tracking is a good question for these. yeah, you see, so bitcoin is down about 2% today. it's been fluctuating 1.7 to 2.2. the tracking is much better than yesterday. in the coming days, mike, we should start seeing this track much more closely and if they start deviating in a big way that will get some people's attention. back to you. >> probably also get the attention of arbiters who try to close the gaps. >> that's what they're supposed to do. >> exactly. >> thanks a lot. meantime oil prices are on the rise.

crude hitting the highest level since late december after the u.s. and britain carried out military strikes against targets in houthi-controlled areas of yemen. nbc's ali arouzi joins us from tehran with the latest at this hour. ali? >> reporter: hey, mike. so despite repeated warnings to the houthis to stop disrupting those vital waterways in the red s sea, they kept up their attacks, not only increasing them, but making them even more spectacular, including an attack against uk and u.s. warships just last week, so a strike against them felt imminent and in the earl hours, the uk and u.s., along with support from other members of the coalition, hit the houthis hard. strikes were reported in the capital sanaa, in the red sea port and the northwestern stronghold of sada. there were reports 60 strikes from the air and sea, including over 100 missiles and

precision-guided munitions, hitting 16 locations, including command centers, air defense radar systems, production facilities, ammunition depots and storage depots for drones, which is very critical because the houthis have used drones as one of their main forms of attack in the red sea. now president biden says the strikes are in response to attacks by the iranian backed houthis on ships in the red sea since november and it's hardly surprising. the attacks by the iran backed houthis have disrupted trade and the flow of fuel. it's given a rise to the cost of shipping, insurance, and forcing commercial vessels to take the long way around from europe to -- from asia to europe around the cape of good hope. the houthis are very angry. they said they're going to respond very strongly against the u.s. and uk, saying they're going to pay a heavy price for this aggression. unsurprisingly, iran has

strongly condemned attacks saying the u.s. and british military attacks in yemen are a clear violation of the country's sovereignty and will only result in fueling insecurity and instability and the houthis say they're going to carry on their attacks and, of course, as you mentioned, it's had a knock-on price on oil, which has jumped more than 2% after those attacks. brent has gone up over 2.5%, inching towards $80 a barrel, and that's exactly what iran wants. they want to make this very expensive for the west to navigate around there. they want to make insurance go up. they want to make inflation go up. they want to make the price of oil go up, which also helps iran because that's their major commodity to sell. now the strikes also came hours after iran seized a tanker heading to turkey off the coast of oman. that's making the region even more tense.

that's very close to the strait of hormuz, one of the most important shipping routes for oil supplies, more than 20 million barrels of oil move through that narrow passage daily, that accounts for like a fifth of global consumption. the region is now a very tense situation, bracing for the next steps, wondering what's going to happen. arab governments in the middle east, many of them western allies, are watching closely to see what happens, following these strikes. now it's important to note that most of them dislike the houthis, but the houthis are supporting hamas and so -- which is very popular on the arab streets so it makes an awkward situation for them. the big question is, are the iranians going to get involved? it seems unlikely at this stage, but there's a lot of room for miscalculation. back to you, carl. >> meantime ali, a lot of uk and american companies and shippers have taken note today.

thank you very much. ali arouzi watching the situation in the red sea. we'll watch that story. as we go to break, the race to the top, as microsoft and apple are battling to be the world's most valuable company. which is the better stock to own right now? we'll debate it. the dow and s&p hitting new 52 weeks highs and on track for the tenth positive week out of the last 11. should you believe this bounce? >> shares of delta down 8%, turbulence after cutting its guide. what's ahead for the company and the rest of the airlines, as "squawk on the street" continues after this. welcome.

welcome back. microsoft and apple trying to battle it out for the top company. which stock is the better buy? let's ask bernstein that has a market perform, alongside piper who has a buy rating of target 455 for microsoft. happy friday. good to have you both. >> thank you. >> thanks, carl. >> tony, let me begin with you, sounds like you don't mind paying a premium for apple because of the ecosystem and franchise, but you think there are other companies with better growth and margin profiles? >> absolutely. so apple is an incredible company, an incredible brand with a great ecosystem, and it deserves a premium multiple to the marketplace. that said, when you compare it

against, you know, other mega cap tech stocks, it has much more modest growth. last year it barely grew its top line. this year we expect revenue growth to be less than 1%, and you're paying about 28 or 29 times earnings. for that multiple, you can buy microsoft or amazon, which have double-digit, top line growth rates, and ultimately, i think as good a company as apple is, i'm not sure at this valuation it's particularly compelling. >> is there any -- is there any weight to the argument that,i don't know, let's just pick vision pro and first new category in almost a decade, that there might be a new -- a resurgence in growth just around the corner? >> i think in the near term, vision pro is not likely to be a needle mover for apple. it's a $3500 product, even if it's sold a million units, which is sort of what production

volumes look like, that's $3.5 billion, that's less than 1% of apple's revenues. certainly longer term, this could become a significant category. we'll have to see how much of it is incremental versus cannibalistic to consumer spending on things like iphones or ipads, but ultimately, in the near term, at this kind of price point, it isn't going to be a mast market product or a needle mover for apple. >> brent, i mean, microsoft certainly kind of the consensus favorite just being in the right place across many technology areas. obviously, with the ai kicker co-pilot comes around, what do you say to an investor about why now, after we know all this and we've had the good news embraced, does it still represent a good value? >> i like the parallel with apple. think about apple, it was a consensus long when iphone came out 15 years ago. over the last 15 years, there's been a massive amount of cash

flow that apple had accrued based than first mover advantage in the smartphone that they created. that's the point in time we are now with microsoft now. there are very few $200 billion businesses global double digits. microsoft is at the point now where you could probably make an argument growth could accelerate even at $10 billion, and we're thinking about an ai business that's well-known, consensus, but only 1% of revenue. about $2 billion ai business for microsoft today. we think this will be north of $10 billion within two years and we think it's the next hundred billion dollar opportunity for microsoft. yes, it's consensus, similar to apple back in 15 years ago, but we're at the beginning of the ai cycle. we're certainly not at the mid cycle of a device or of a tech cycle. we're very bullish around the long-term prospects for microsoft and bullish around the near term prospects given ai and

how quickly it's moving. >> i'm not sure if apple was quite the consensus long we think in retrospect it was when the iphone came out. people thought that thing might flop. although, i guess i would ask you, at this point when microsoft has already gotten to $2.8 trillion, i mean, where are they pulling the revenues from? are there net losers in the tech ecosystem that are not going to be -- they're going to have to forgo revenue because it's going to microsoft? >> sure. i think you have to think about the two drivers of ai that microsoft can capitalize on. one of those is going to be incremental revenue, and we talked about this being a billion business, the other is really driving down costs, right, and lowering costs for enterprises. if you think about the analyst that covers nvidia, they'll do about $15 billion of gpu sales this year in the next two years they're going to do over $100 billion is what his forecast is, that's a massive amount of data

that needs to be trained on these systems, massive amount of gpu capacity. that's the opportunity that microsoft sitting in front of capitalizing, both driving incremental revenue for the company, incremental cash flow for the company, but drive down costs for those enterprises to basically be more efficient. this is the beginning of a big productivity wave. that's the real incremental value. it's not just the incremental revenue, but also driving value to the end market, making those employees more efficient, making businesses more efficient. >> tony, i wonder, we're going to get taiwan elections on sunday, and i wonder whether or not you think either china exposure or the challenge of diversifying apple's supply chain is a liability that other giants at that scale don't have? >> it's certainly a liability, carl, and it always has been for apple. it has unusually high exposure to the chinese consumer, 20% of their revenues are sold and come

from china, and then it's supply chain and manufacturing chain is essentially 90% china-based today and they're trying to move away from that, but that's a multiyear process. so china and perhaps tesla, i think, are really the two mega cap companies that have unique exposure to china in the sense that they're both important markets and they're important manufacturing countries for those companies. certainly there is some existential risk to apple, more so to other companies, if we have an escalation in u.s.-china tensions, if something happened with with taiwan on a go forward basis and that is a consideration. now i would say that has been a potential overhang for the last five or ten years for apple, and the cycle of concern around china goes in ebbs and flows,

but that's always been an existential risk, you know, more broadly for the marketplace, given the codependence with china. uniquely so for apple. >> right. we'll see what happens over the weekend and the race between these two is fascinating to watch. have a great weekend. good to see you. tony and brent. as i keep pointing out in the s&p 500, microsoft has already substantially bigger because the index kind of takes away the berkshire hathaway stake in apple, only count the free floated shares. over 7% for microsoft, like 6.75 for apple. if you care. still to come, china seeing its worst deflation streak in 14 years, as questions continue to grow around the consumer there. we also, of course, have that big election in taiwan this 'lhe le ekd. wel adivto beijing next. stay with us. ywhere are asking: is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats?

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welcome back. i'm pippa stevens with your cnbc news update. the faa already taking action in its investigation into the door plug that flew out of a boeing 737 max 9 plane last week.

the agency announced an audit today of the boeing production line, and its suppliers and said it is exploring the use of an independent third-party to oversea boeing's inspections and quality control systems. israel adamantly rejected south africa's claims that it is committing genocide in gaza. it was israel's turn to make its case against the accusations at the international court of justice. the country argued it was defending itself and fighting hamas following the october 7th surprise attack in israel and called on the court to dismiss the case, calling it groundless. and an intense blast of cold described as a bomb cyclone is expected to hit the u.s. this weekend, putting millions under winter weather alerts. p chicago's o'hare airport orderd a ground stop this morning because of the freezing conditions. meteorologists expect to see up to a foot of snow around the city through tomorrow morning. mike, back to you. >> thank you. the latest read on china's

consumer price is stoking more deflation fears. let's get to eunice yoon with the latest and more on the region ahead of the big election in taiwan tomorrow. eunice? >> thanks, mike. well the december data showed persistent deflation for a third straight month on a year basis, consumer prices were the slowest since 2009. factory prices hit the steepest downturn since 2015. demand was weak domestically, but not a whole lot better overseas. the export figures in dollar terms puserked up in december, t for the year, this is their first annual drop since 2016. imports caught their first annual decline since 2020, when the coronavirus first emerged from china. the focus today was also on the elections that are taking place in taiwan over the weekend on saturday. taiwan is going to go to the polls to choose their next president, and the outcome of

that election is sure to shape the relationship between taiwan and china over the next couple of years. the frontrunner is william lai ching-te and beijing's least favorite candidate. beijing believes lai is in favor of declaring independence, the reddest of the red lines for the communist party leaders, which believe that taiwan is part of china. the other is hou yu-ih of the opposition kmt and beijing perceives him to be more in favor of the status quo. so beijing has already indicated that if lai wins, they're going to take a more hostile stance. for investors that means if we see what is expected, which is lai to win, then there's going to be likely much more insecurity within the region, also in supply chains more pifk specifically, and if there is an

upset, it could mean that beijing would be willing to engage in discussions more constructively with government under hou. guys? >> meantime eunice, what is it -- how do you expect it to affect the -- some of the military activity that we've seen in the waters between the two countries, military drills and their stance regarding the united states? we did take note today that secretary blinken is meeting with some senior chinese officials today in advance of the weekend. >> right. that is actually seen as one tactic by the chinese to try to stabilize the relationship between the u.s. and china, which they are very much in favor of doing at this point, at least optically, to try to move that relationship forward. but when it comes to the military intimidation, we've already seen a lot of that in the past several days. this is a very typical thing that the chinese do and that they have done ahead of

elections, and, in fact, the defense ministry today has also said that they would smash any movements of independence for taiwan. likely what we would see, if lai does indeed win, that there would be a ratcheting up of military intimidation. one other thing that we could see potentially is that if he wins, that the chinese government would freeze him out as they have, his predecessor the current predecessor tsai ing-wen. >> big weekend. we'll watch it closely when we return to trading on tuesday. some of the biggest laggards on the s&p for the week, see boeing at the top, down 12, as we've got not just the faa probe, but also some indications that air bus is gaining share. tesla not far down the list on the price cuts in china, the

hertz fleet, some of the production in berlin. dow is down 160. don't go away. to duckduckgo on all your devie

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s&p got to some fresh closing highs this morning but our next guest remains neutral in equities. newburgh asset eric newsom joins us on a day, where again, you have a flash of enthusiasm on the signs bonds would rally here. i guess the market is still very much pivoting around what the fed will do this year. >> yeah. i think this highlights even as the market is assuming that the fed is moving to a very accommodative posture, pricing in five or six cuts, you know, the fed is assuming less than that, and we think it's still very data dependent you're going to get a lot of contrasting data from a performance report last week to a hotter and more challenging cpi report yesterday and a decent ppi today.

i think that volatility is likely to continue. our take on this is that, you know, the timing is much less important than the path, and we do expect the fed funds rate to move towards 3%. it may take longer than the market thinks, but that direction and that path, is what is going to determine market outcomes over the next six to 12 months. >> help us understand how that gets you to what appears to be pretty solid interest in small and mid caps. >> yeah. so in this environment in addition to a more accommodative rate environment and okay kind of economic growth, declining inflation, perhaps stickier than expected, that's -- that leads us to to be broadly neutral in equities, but then we look at flows and our recently published fourth quarter allocation pieces, flows and fundamentals, this is an environment where liquidity and where liquidity is and where it's going, may be as

important as those fundamentals. we recognize that there's over $6 trillion of money market cash on the sidelines that's gone up by a trillion dollars. we think some of that is going to flow into equity markets, and there where we want to be is in areas of equity markets that have not fully priced the soft landing, that aren't priced for perfection in this kind of narrow path forward that can still do well from a valuation standpoint if we get a more stagflationary environment or it takes longer to get to the outcome. that leads us to smaller company stocks. >> given that you look across the different asset classes and you suggest maybe the bond market is in a short-term overshooting when we get cuts, how is the bond market valued right now after this huge rally? >> yeah. so we think there's attractive opportunity kind of in the two to seven-year maturity portion of the bond market that includes

treasuries, high quality credit, asset backed, mortgage backed securities. we think that as short-term rates are going to fall, that it's a good time for investors to move that ksh fcash from the timelines and lock into yields, in that two to seven year portion of the yield curve. ten years and beyond, not only are you not getting paid for taking duration risk, but with concerns around debt sustainability, continued deficit spending, we think there's going to be increased term premium and volatility beyond that ten-year point. our fair value view is around 4.25. we're a little below that, so, you know, that 10-year point is a little bit rich and we want to be kind of in the short to intermediate area in higher quality end of the fixed income market. >> good stuff. obviously, a lot to digest today as we get further into earnings season. have a good weekend. thanks. >> thank you. all right. wells fargo's conference call under way at this hour. we've got the highlights of what investors need to know right

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wells fargo shares under pressure after reporting results. the conference call under way at this hour. let's get to leslie picker with some of the headlines. >> hey, mike. kicking off on the wells fargo call only don't about 1.7%. they recovered a little bit of their initial slum. guidance in focus this morning with wells fargo saying it expects net interest income, the profitability metric from loan making, they expect that to be down 7 to 9% this year compared to 2023 levels in the quarter, nii declined 5% year over year. however c the cfo expects it to trough towards the end of the year and also added that there's, quote, more uncertainty than usual given the market's strong view of rate cuts and that's affecting their estimates

as well. ceo sharly scharf spoke about rates, strategy shifts and the health of the borrower. >> as we move forward our business performance remains sensitive to interest rates and the health of the u.s. economy, but we are confident that actions we are taking will drive stronger results over the cycle. we are closely monitoring credit and modest deterioration, it remains consistent with our expectations. >> reporter: charge offs were $1.3 billion in the quarter and higher year over year. so that deterioration will be closely watched, especially as we kind of set where we're at with regard to the soft landing, how it's impacting the health of the borrower and so forth. we've seen mixed reaction on that front across the four banks reporting today. guys? >> first of all it seems like rates never stay in the right spot for banks to maximize net

interest income for long. on the credit concerns, though, i mean, all the banks showing some pretty big year over year increases in credit provisions but low levels. when it comes to wells fargo, i saw some commentary, a lot of it is skewed towards commercial real estate but seems like the street has confidence the banks are relatively well reserved and doesn't seem like it's getting out of control. >> yeah. and when you listen to the bank commentary on the calls, a lot of people point to the fact they're still in terms of the health of the consumer, still looking at 2019 levels. bank of america in particular, they saw their credit loss rate move higher sequentially in the quarter, but still, again, at that prepandemic level, slightly worse than where they were at in 2019. overall, a relatively healthy consumer that they're still seeing. same thing with jpmorgan. we heard the cfo there talking about how consumers were spending down their buffers, so we may see changing behaviors

this year but they're not necessarily seeing a huge shift yet. >> kind of hard to envision it given unemployment and claims. busy morning for leslie picker. >> on money movers we will talk to the wells fargo ceo and break down the numbers. more these numbers. we'll get results that's sending delta shares lower. shares have really worked their way back to the 50-day where it was about a week ago. stay with us.

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can help you build the future♪ ♪u imagine. ♪ ♪ where you'll see a lot of the carriers, u.s. as well as international continuing. last year particularly europe was on fire. i don't think one busy season is going to quench the desire, particularly for americans to go over to europe. >> that was delta air lines ceo on "squawk box" earlier this morning about where he sees the strongest growth ahead. delta's profit more than doubled but shares are falling after the company trimmed its forecast. joining us is jeffrey's aerospace and defense analyst.

she has a buy on delta with a $55 price target. >> thank you for having me. >> was the guidance that much of a jarring surprise or would you expect something like that. >> it wasn't as much of a disappointment as we expected. i think their shares are down for two reasons. one, oil is up 3 bucks. second, their cost guidance came up 1% to 3%. think about each point of price -- each point of cost being $4, it's $4 to the share price which is why you're seeing half the move attributed to that. revenues came in guide. the eps guidance was modestly disappointing. wages for pilots are higher. maintenance expense is a lot higher. that's why we're seeing that cost pressure that we called out prior to this print. >> you favored delta. seems like you're selective or cautious on the overall industry dynamics this time of year. >> we favor delta given their other businesses.

they have this maintenance because that's $5 billion of revenues of which $1 billion is external. that's growing given the gtf issues. we value that at $10 billion. you're getting delta as -- for free as an airline. we did upgrade american airlines yesterday because we think they're going to be the best in terms of cost, keeping costs constant for 2024. so, it's a very anti-consensus call given the ratings there. similar to delta, they're not buying a lot of planes, although delta did have an announcement this morning. >> that was an interesting call on american. they have the best cost management, basically, relative to peers in recent quarters? >> we think so. it's under light because leverage is high. delta's leverage is around three times, american's four times. they did a fleet modernization in 2015 to 2020. they don't have to spend that like united and southwest does. so, that's where we thought the differentiation would be. as they de lever. they have analyst day coming up.

shockingly, they have a decent loyalty program, they just don't talk about the advantage as much as we hear about sky miles, which we're valuing at $40 billion. >> bastian of delta this morning took pains to say boeing will figure out these issues regarding the 9. i think they have some 10s coming event lip, ueventually, airbus delivering. i wonder if you think it's separate from the faa issue, airbus catching up to boeing? >> i think what ed was talking about was very interesting this morning. he basically said domestic is congested. we're not going to grow domestically. he needs to focus on growing international. domestic is about 65% of his revenues in asm. atlantic is 20%. that's really where he's going to put these airbus a-350s that he ordered into the wide body international market to grow that as well as into the pacific. domestic is pretty much congested. it's hard to grow. pricing is less favorable than it is internationally.

>> and so delta, american, is it a macro call, quickly, on why the airlines are having it so tough? >> airlines are tough. we're very pessimistic on the u.s. consumer. we're already embedding that into our estimates. >> sheila, good to see you. quick programming note. this weekend don't miss a very big nfl playoff wild card. the dolphins and chiefs, as you may know, streaming exclusively on peacock. cramer will be part of that coverage. that begins at 8:00 p.m. tomorrow night eastern time. meantime, the wells fargo cfo on "money movers" in a minute. (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. (ella) we now get more control of production, efficiencies, and greater agility. (marquis) with a custom private 5g network. our customers get what they want, when they want it. (jen) now we're even smarter

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good friday morning and welcome to "money movers." i'm sara eisen with carl quintanilla live on the floor of the new york stock exchange. today all eyes on the financials. big banks reporting. wells fargo cfo mike santomassimo is with us. chief market strategist will help us break down those moves. the u.s. and uk forces carrying out retaliatory strikes against the houthi rebel targets

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