the clock is owned by nbc universal slash comcast. >> that explains why jim is going there and not the eagles game. of course, he is one of the biggest eagles fans. courtney, great to have you with us. >> thanks for having me. >> we appreciate you bringing in this all broke addition our with us. >> have a great weekend. welcome to closing bell. i am mike santoli infer scott walker. this make-or-break our begins with stocks -- ten when week at the last 11 as the big cap index published just below record highs. encouraging news on wholesale inflation, sparking a strong treasury rally today as the market grows more shower of fed rate cuts coming months. the two -- that's the most dramatic. it's actually below the 30 year yield for the first time in about eight months. we had mixed reactions to bank results. city announcing it will be cutting roughly 10% of its workforce. that's in the next two years. it reported 1.8 billion dollars

in losses for the quarter. the cfo joins us exclusively this hour. plus, concerns over airline fundamentals crop up in a kickoff to earnings season. united health care ways italy on the dow after its own report. it all brings us to our top of the tape. so our investors right to declare virtual victory over inflation? and is the stock markets to beat pause a routine refresher? maybe a warning that the late 2023 rally rent a bit too far? let's ask dan greenhaus. and cristina hooper. both joining me here. thank you for coming by. dan, you take care. we are covering as i said. we actually crossed over into record high territory, 4800, we are slicing it pretty thin here. most -- not pulling back coming into this year. how are you reading the action so far? >> you have to take the ball back in some context as you know. the rally in november and december for the stock market was a strong and of the year that we have seen in the last

40 years. as strong a rally as we have seen over that two month period. some suggestions here, it will not be how to be ordinary, or should not be completely surprising, and that is what you are getting. at the same time, the stock market is wet today, but under the hood there is big movements. oil stocks getting a big benefit from the price of oil. you mentioned the airlines that are leading on the downside here. even though the index as a whole is flat today, there's stuff going on underneath. >> some of the big growth stocks still kind of protecting the index. christina, i wonder, i think the market has it correct in terms of taking part in the inflation data this week. the bond market yesterday, pretty looked slightly higher than anticipated cpi headline. then today ppi of course, it's sort of confirmed what we were looking for. so do you think that we are okay here in anticipating what the fed is going to do? or do you think we have a bit of a check on that? >> well, i think markets are right in assuming that the fed is going to start cutting soon. but i do think that we should be prepared for some volatility because we are going to hear

from fed officials that article went to continue to spew hawkish speak. so we will be rattled, and let's face, it the inflation data is not going to point to perfect disinflation. there's going to be some imperfect data points. some that might be concerning enough to cause some turbulence and caused downturns in the market. >> do you think that is strictly a matter of the fed wanting to keep the rainfall little bit tighter on the market and financial conditions? for you think there is genuine disagreement about the ultimate path of inflation here? it feels as though the market almost wants to call the fed bluff here. saying the two-year treasury yield is now 120 basis points below the fed funds rate. it seems like it's kind of dialing ahead to that moment when the fed needs to get moving. >> the market wants to call the feds bluff because i do believe it's all about tamping down and easing of financial conditions. let's face it, the fed has been

wrong before, terribly wrong. if we go back to december of 21, the plot indicated an expectation of 90 places points for the fed rate and of 22. it was about 430 basis points. so the market has experience with the fed, and it's calling the bluff and rightly so. >> i want to disagree with both of you. the market is calling the feds bluff. i mean credit spreads are extremely tight levels. i spread, invaded -- investment grade spreads, are sub 100. which is a very tight level. high yield spreads not exactly spread, pretty tight as well. and the stock market is, as you mentioned, basically at a high. so clearly the market, both the equity and credit market, is telling you something here about the economy and earnings and about the federal reserve. it's not a theoretical think. that's actually happening. >> i don't know if we have to characterize strength and risk assets as believing that the fed as it wrong. if the fed is saying we think there's room for a few victory or peacetime rate cuts.

>> sure. >> so they are saying we are going to allow a soft landing to happen. >> of course, i just meet in the context of fed members giving hawkish -- that's clearly not working. >> oh, it's not working. i see. >> they can still try for goodness sakes. >> they are trying, it's just not working. >> but right once up to say the right things at the right time. >> also true. again, with the stock market at high-end spurts tight, it's not fully priced in. we can argue about how you want to do that. clearly, the soft landing is what investors are betting on. >> so the line that i have been returning to is that just because you have the s&p 500 around 4800, and you have the feds funds futures market anticipated 100 plus basis points cut this year, does not mean we are at 4800 strictly because we expect that many cuts. do you think that is the case, christina, parted we actually, are we that depended on an aggressive easing cycle? >> the stock market has been incredibly depended upon monetary policy since the global financial crisis really. so i am of the opinion that this is a lot about, not

entirely, but largely about monetary policy and expectation for rate cuts. >> dan? >> i disagree with that also. it's friday so let's have some fun. the idea that the stock market is where it is, and i don't want to fully characterize what you just said, but largely because of monetary policy i totally disagree with. you can look at trailing 12 months earnings, the growth since 2008 2009 let's call it, it explains a huge chunk of the market moves. you could argue that the fed has taken what would've been a bigger problem in 2010, what would've been a bigger problem and silicon valley, had improved those problems. thus laying the groundwork for the higher earnings, but at the end of the day let's not pretend that earnings have not done exceedingly well over the last 15 years, thus justifying a huge portion -- to be clear, we are trading at 20 times -- >> yet, we went from like 12 to 20 times. >> that is what bull markets to. >> i understand. >> they go from low single digits, or high single digits, low double digits, to the teens or in this case 20% earnings.

that is not totally unusual. >> where does that leave you in terms of trying to set up an investment strategy for this year, kristina? we had this price move from the futile either's into a broader list of stocks last year. some of that has back slid so far this year. i guess if you expect the economy to hang in there, but what does it mean on whether we can believe the earnings estimates on paper right now? >> my expectation is that we will see a deceleration in the first half. it's not going to be dramatic. i will call it a bumpy landing because of tighter credit conditions. but it will be brief. then i think we will see a acceleration in the back half of this year. stocks typically discount 6 to 9 months out, so what we are seeing now i think, what we will continue to see, is a discounting of that reaccelerate. that mid-cycle recalibration. so i would anticipate a broadening where we will see small caps provide -- perform better, cyclicals perform better. and because long rates are coming down, tech is likely to hold up quite well in addition. >> so it seems like not exactly

an either or type of market. i guess, dan, i also keep coming back to the idea that pretty much everybody wants to see the market broaden out. i mean there's sort of a sense -- of >> course. there is a discomfort with seven stocks kind of being the whole story, even if it wasn't really the case last year. how much does it matter? you actually -- >> your view on that trend? >> if you are a money manager, and again, for the 100th time we are a hedge fund. we think single stock risk. if you are an index or or a money manager, and majority of the gains are being generated by seven stocks, you cannot keep up. the sequential turnover -- you cannot be seven or 8% weighted towards apple or nvidia or whatever it is. so a broadening out means it's easier for you as a manager to perform. again, that is not what we do, but that being said, does the market over the rely on those seven names? does that mean something necessarily bad? i don't think so. i've made this point. again, these are not just seven

stocks. microsoft owns ten stocks that used to be public. twitch, amazon obviously owns and gm and whole foods, and a whole bunch of really large companies. so it's not just seven, but listen, you want to see the market broaden out because it is better as an investor to have a broader market. but i don't think it necessarily means something negative on its own. >> i defy you to locate the portion of the 1.6 trillion dollars market capital amazon that is attributable to mgm at this point, but i know what you are saying. >> [laughter] >> that these are kind of corporate nation states essentially, that run on their own rules. unh -- kristina, what about the rest of the world in terms of opportunity, where you would look? then incredible move on the japanese stock market, feeding off of some of its own dynamics. china is the complete opposite. then i mean a kind of muddled period in europe at this point. >> so i think this is a perfect time to be looking outside the united states, and looking for opportunity. i anticipate the u.s. dollar will weaken this year. that should provide a tailwind.

and i think where we are likely to find the greatest opportunities is going to be in asia, emerging market equities. china i will separate out. i think there's certainly potential there, but asia, including india, there is a lot of growth there. the valuations look attractive with the exception of antibodies. in general, going outside the u.s. is a good call right now i think. european equities, valuations are attractive, typically valuations are not predictive in the short term. however, i think the cyclical exposure that european equities have, emerging market equities have, will bode well in this environment. >> dan? >> can i disagree again? this, by eminent might mid 40s and i have been told since i came into wall street that you need to diversify sector wise geographically. and the u.s. stock market has repeatedly at routinely and consistently outperformed. maybe this year is the

difference. >> right, well there was a period from like 2000 to the financial crisis where it was the case. >> sure. >> it was a value driven market. >> it was a value driven market, but that includes 2000, 2003, and a lot of this depends on your starting point as always. look, i think if you believe that protect names are going to do what they are expected to do, and in this case we are talking the largest names, but including things like salesforce, photo, be et cetera. the reason why we trade at a premium valuation to europe's we have a larger concentration of technology stocks. they have a larger concentration of more value oriented financial stocks. if you think tech is still the place to be, a majority of investors think so, then you -- you can achieve all those things with diversification. so you can just increase on the margins, even just a simple rebalancing of your portfolio after a strong game in the past year, would bring you a little more exposure to europe.

a little more exposure to em. and that cyclical component, that overexposure their, should bode well if you anticipate, like i do, that there is going to be a reaccelerate and on the back half of this year. and it's not just the u.s.. it will be a global we acceleration. >> it's also kind of easy, at this point, to forget that the nasdaq 100 has lost a third of its value in about ten months. so it's not as if it's a one-way train that we will always be able to ride. >> that's the point a lot of people make about facebook. how many stocks fall 77% and shoot right back up? it's not been without paying. >> no, but then you also come back to the idea that we just basically had a two year round-trip and the big indexes. and maybe things are ahead of themselves. >> to that point, when you look historically, it's not very often, outside of a recession, that the s&p 500 is unchanged on a two year basis. that's exactly where we stand more or less right now. and if you are not going into a recession, and i think the consensus once again is that you are not, this is a

tremendous buying opportunity, even at elevated valuations, at what is effectively a cyclical and -- high. >> as long as the music keeps playing. all right, dan and christina, good to see you. thank you. >> thank you. >> let's head over to cristina -- for a look at the biggest names heading into the close. >> thank, you might. defensive stocks are higher as tensions in the middle east. police officials are pledging retaliation after the united states and the uk launched strikes against yemen following a wave of attacks that have destabilized trade routes in the red sea. lockheed market and northrop grumman are a manga gainers there. you can see boeing's down right now. scrutiny after the door plug blow continues. several passengers from the alaska airlines flight are suing boeing, citing physical injuries and emotional trauma. the federal aviation administration says it will audit the playmakers production line, and could bring in a independent third party to

oversee inspections. boeing says it will cooperate fully and supports the actions to improve safety. you can see shares are adding to their worst week since may 2022 the. >> thank, you christina. we are just getting started. shares of city are volatile today. they are now in the green, about six tenths of 1%. on the heels of its earnings report at big announcements. the cfo joins us exclusively after the break. we are live from the new york stock exchange. you are watching cnbc. ♪ opportunity is using data to create a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection.

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bell. city shares up slightly after reporting earnings this morning.

the company also announced it will lay off 20,000 employees over the next two years. let's send it to our senior banking finance reporter leslie picker who's sitting down with citigroup cfo, mark mason. leslie? >> hey, mike. thank you. mark, thank you very much for being here, for hosting us here at the citigroup headquarters. let's get right into it. you said in today's call, quote, we are not satisfied with the performance and returns in our business is. therefore we are laser focused on executing against our strategy, simplifying the organization, and right sizing expense base. how confident are you like you will be able to achieve that all? >> first of all, leslie, thank you for joining us here at headquarters today. today was a very important day. we announced earnings. to answer your question, i am very confident about achieving it all. i am confident about it because we set a new strategy and invest today to be the preeminent partner for institutional clients to be a leader in wealth. to be a valued player for u.s. personal banking and our customers here in the west. and we are making great progress on that. i was disappointed in the

quarter, but i really want to talk about, we think about, the quarter in the context of a 12 year. we have made significant progress throughout 2023 and we are well positioned to continue that into 2024. and it really is about being a simpler bank. >> the stock price reaction indicates the market is looking past the quarter as well. in terms of executing on the strategy, you have a situation right now where you are cutting expenses while also trying to grow the top line and really we focused and we prioritize the growth of the business. how do you do that without sacrificing growth in the area you are targeting as you are doing this all kind of simultaneously? >> look, it's about balance. we have these five court businesses that we are focused on. they are all businesses that, over the cycle, will produce top line growth. and over the cycle, will produce strong returns. so it's about ensuring that we allocate enough resources to those businesses like our treasury and trade solutions business, like our security services business, while at the

same time investing in our infrastructure. our transformation. our risk and controls. making the appropriate we calibrations as the cycle evolves. so you have seen us make investments in services. you have seen us make investments in our investment banking business. you have seen as make investments in wealth. in instances where that hasn't produced a revenue, our above performance was less than we would've liked. we have dialed back that spending. what we have not compromised and what is the investment in our operations and our infrastructure, in our risk and controls. but it is about striking that balance. these five businesses through the cycle produced very strong returns. our services business produced a 20% return on home and equity in 2023. right? and our wealth business, through the cycle, produce high teens low twenties returns as well, as andy seed has joined us and starts to turn it around. starts to drive toppling investment revenue growth and really starts to streamline that expense base.

so it is about that balance. >> in terms of resources where you are extracting from different areas, of course, you announced today 20,000 in terms of a reduction in head count at city. can you share some color in terms of where those will come from? where you see the most reductions taking place in terms of how you are thinking about allocating those resources? >> sure. and i think it's important to put that into context, because that 20,000 reduction, which is intended to happen over the medium term, is directly linked to the strategy that we talked about at investor day, and we have been executing against. what i mean by that is we talked about exiting 14 countries. we talked about a simpler organizational structure. just a few months ago, we eliminated two segments, and we eliminated the regional construct. those two things in particular, along with the benefits from the transformation overtime, for what will allow us to be a simpler bank, and allow us to take those head count and

resources in the organization. it took time, but we have made significant progress on that. the significant restructuring charge that we put it this quarter. and there will be more of that and the first quarter here in order to drive those things up. >> i know jean said on the call that two billion dollars was the cost savings that she anticipates from those head count reductions. in terms of additional expenses, we can see tied to severance. kenny ballpark there? >> in 2023, we talked about 1.5 billion of severance and restructuring politicos. we are estimating somewhere between 700 million and a billion dollars in 2024, of severance and organizational related costs. >> reporter: let's talk about the consumer. net credit losses were just shy of two billion, that's up 22% sequentially, 69% annually. although the losses are still relatively low by historical standards, do you think we are starting to see a deterioration

in the quality of the borrower at this point of the cycle? >> look, we have not compromised our underwriting through the cycle at all as it relates to our customers. what we are seeing is if you think about what happened during covid, spending levels were down, lost rates were down, and as we have come out of that, the spending has picked up. we have seen good purchase sale activity. we have seen payment rates that were high started to come down a bit. we have seen loan growth started to materialize. this is what drove the 12% of planned growth in our u.s. personal banking the -- business. which is also 16% for the full year. so we have seen the top line growth, we have also seen the loss rates mature and materialize. through 2023, and we expect that to continue through 2024, and peak in 2024 before starting to normalize. so in some ways, this is a maturation of a portfolio that has come out of covid, combined with new acquisitions that we have done since then, maturing at a more normal pace. that is what is driving the

increase that we have seen. >> interesting. >> reporter: thank you for that clarity also on the 2024 peeking. last, i want to ask you about geopolitics. we are entering an increasingly complex world as it relates to geopolitics. there are dozens of elections this year. city is the quintessential global bag as it has been built up the past few decades. this quarter we saw a significant loss as it pertains to exposure in russia and argentina specifically. how do you navigate through this and how do you handle and deal with the risks associated with being and all these markets? i know you are streamlining to a certain extent, but and this increasingly complex world, how do you grapple with that? >> yeah. i think what is important here is to recognize that our strategy is about being a global provider of services to our institutional clients. so we are in overnight or countries because that's what our clients are. that is where they do business. and that is where they needed to be to help facilitate that

activity. when you mentioned argentina, you mentioned the reserves that we put their, those were not credit reserves. that was not about loans that we've had in the country, or in russia for that matter. those were reserves around transferability of capital risk and that is very different. that is not an exposure that is tied to credit. >> the devaluation of the currency. >> that's two things. you have the devaluation of the currency that hit our top line, and then the reserve that is tied to transferability of capital, which in a way is linked to the devaluation. so it's important to point out. we are well reserved in both of those countries, in argentina and in russia, against that risk. importantly, when i look back over the 100 plus years that we have been in argentina, serving over 1300 multinational, or clients i should say, at 700 multinational clients. we've lost $5 million in the last ten. $5 million. so we are very careful about how we manage the risk. a lot of these clients are

multinational clients. a lot of the loan exposure we do have is backed by the parent company. and this is again part of our strategy. when i look at the returns that we generate, if you think about our tsv, our security services business, 20% returns in tsv. it compensates, if you will, for the risk that we take in many of these markets. so we are in these countries because that's where our clients are. we have been in them for a while. we know how to manage that risk. and the returns makes good sense when you think about the business we do. >> reporter: certain markets you will stick global. >> yes. >> reporter: mark mason, cfo of. big day for you. fourth quarter earnings. the transformation strategy. we appreciate you coming on cbc to help us make some sense at all. >> happy to be here. thanks for having me. >> thank you. mike, i will send it back to. >> thank, you leslie. and thank you of course to mark as well. up next, glass half full? henry mcvey is back and he's breaking out his playbook for 2024, and telling us where he sees big opportunities ahead. he will join me here right

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here as we end this week. earning season is getting underway. joining me now post nine is kkr as henry mcvay. >> great to be here. >> coming into this year, the markets have almost got to a point of trying to sound some all-clear, whether on the policy, front the soft landing front. what's your assessment of whether that's correct or not? >> our view is that the market actually bottomed in october of 22. where long term investors are typically on a one, three, five-year basis stick with it, i think we are above consensus this year on growth and actually calling for a mild recession. that should tell you where sentiment is. >> the idea being, yeah, growth is universally considered to be 1% or something like that.

you think it would be better than that but with a little bit of a dip? >> where kkr would differentiate is around the labor market. we're seeing a different behavior pattern from employers with their employees. citigroup aside, generally people are keeping their employees on the payroll and there's some real demographic issues where we do business. in areas like japan, germany, even the u.s.. or when you find quality, labor you stick with it. >> one of the elements of, if you look back to that famous soft landing i keep talking about in the mid 90s, was the fed sort of allowed the labor market to be stronger than they thought it could be. with inflation staying tanked. have we stuck that landing here? banks around the world seem to be making the turn. >> if you think about in 2022, almost 90% of the top 25 central banks were raising rates. today, that zero. an incredible statistic. do you want to be rolling but rock up the hill in terms of headwinds or rolling it down? our view is it will be a better

environment. we are less bullish on average is going up in the way they did in 23. the messages that the cost to capital, the difference between the bid into the -- wool narrow. that's going to lead to more activity in the deal front and the issuance front. that's what's different this year. we saw that today with black rock, you saw more deals in chesapeake ester de. we think there will be more activity. we are both a deployer and monetize are of capital around that and things are getting busier on that front. >> obviously, been a completely absentr even though it looked otherwise in many ways likable mark it. interested on the thoughts around the world, paying a lot of attention to this breakout in japan, the stock index there anyway. seemed to be feeding off of some specific dynamics in that country. but how do you approach it now? >> i'm going to come back and say the same thing we said the last couple times, by japan. we are still very active around the private equity side. the new tool in our tool kit

has been real estate, we made a big acquisition there. so, we've been active on that front to. even an infrastructure. we have a dominant presence, there continue to want to be active. i think you really see this in government policy, that they want corporates to do more and become more efficient. that's a big deal. second, india continues to be an active market for us in asia. i would, say switch to europe. what's interesting europe is a periphery is actually growing faster than the core. kind of the uk and germany. that, to me, it's an opportunity. i don't think long term the crease is going to outpace germany and spain has not done as well. to me, you go find the good companies in those markets that are maybe having a cyclical downturn. come back to the u.s., u.s. continues to defy people. look, innovation is a major differentiator here. we were most active on our private equity front last year in the u.s. in private equity around corporate carveouts, public to privates and other

acquisitions with existing companies. >> didn't mention china. does it remain just kind of a problem at this point? >> what is interesting to me doing the study plus years, china is having -- japan is having inflation, china's having deflation. we are still active in china. i do think this housing market story is going to continue. there is more to do their. that's the cautionary tale. the offset is those two areas of focus people are underestimating. one is around digitalization of the economy on the industrial side. those people talk about china and technology on the consumer side. we are much more focused on the industrial side. second is, they are decarbonizing very aggressively and, given the size of their economy, that has ripple implications, implications that ripple throughout the world. you have to know what's going on in china, whether it's there in china or the rest of the world around this decarbonization thesis. >> you certainly seem ahead on that front. henry, great to see you. >> thanks as always, great to

see you. >> we're tracking the big movers as we head into the clothes, christina which i was. >> thanks, mike. more margin pressure for tesla and a possible smartphone revival helping one chip name. i'll explain all the details after this short break.

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bell. s&p just about the flat line. let's get back to kristina for a look at the key stocks to watch at the close. kristina? >> shares of ev maker tesla are under continued pressure after a slew of negative news. today specifically, the company announcing price cut sunshine again for the model three and y. reporters late yesterday that tesla will suspend production in berlin caused by delays in the red sea. customer inventories are -- i was going to switch gears but i would like to say tesla is down about three and a half percent. talking about qualcomm, customer inventory levels are going to be replenished on the smartphone market. that is according to city analysts and bodes well for mobile chip maker qualcomm. they raise their estimates for 2024 revenue as well as earnings per share, also citing improve share gained with samsung as another bullish thesis. the stock up three fourths of a percent right now. but up 25% of the last three months, which is outpacing the s and h semiconductor etf.

mike? >> christina, thank you. let's send it to pit a stevens for a look at why uranium stocks are climbing. >> uranium stocks are jumping after his adam prom, the world's largest minor, warned of a shortfall. they have -- if their production does fall, short they'll have to turn to the spot market where supply is already really tight. uranium prices surged above a -- having a 16-year high. amid this global resurgence of nuclear power. there is also calls to sanctioned russian uranium with the house passing a bill to ban imports back in december, which could add to pricing pressures. mike? >> all right, that is quite a move in the last little while, thank you very much. up next, bitcoin atf slipping on their second day of trade along with the coin. phil miller, the fourth, of miller value partners, joins us

with how he's playing that's based on what he thinks could be next for crypto. and don't miss that if first ever exclusively livestreamed playoff game, tomorrow night on peacock at eight pm eastern, win the super bowl champion kansas city chiefs hosted the miami dolphins. closing bell will be right back. you know what's interesting these days? bitcoin. look for bitwise, my friends. [disconcerting stomach gurgle] not again.

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meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real. bitcoin etfs tumbling today on their second day of trading. the top fund saw more than four billion dollars in trading volume yesterday. that was the day after the fcc gave approval for their launch. the move is seen as a crucial step and competencies bread acceptance. let's bring in a ceo and chairman bill miller iv. great to have you on, certainly we will get your take on legacy financial assets and your portfolio. as an owner and believer in

bitcoin, what is the advent of the etfs meaning if anything for the fortunes of the asset class? >> i think it represents an enormous step forward for institutional capital accessing the asset class. but i think there is actually something out there that is already exposed to bitcoin, which we've known for quite awhile. which is actually better than a bitcoin etf. that is micro strategy. micro strategy is better than, in my assessment at least, a bitcoin etf for a couple reasons. number, one it's more liquid. as the largest owner of decline in the world. not only, that there's no fees attached to it. think about the optionality of owning a new technological asset and being the largest owner of that asset. it provides enormous optionality over the long term. not only, that you've got a ceo who owns a billion dollars worth of stock, who owns 700 and $50 million worth of bitcoin personally. he's a technologist, has 31 patents to his name. he gets it. we can talk about the etfs but

there is already something that's more liquid out there already, and it's really interesting to consider that. >> micro strategy, it's perhaps more liquid at this point, for sure. but its value is also going to deviate from the value underlying bitcoin. of, course there is also a software business and the public company as well. >> absolutely. that's one of the things that makes it super interesting to me. if the value deviates from the intrinsic value, so if the price goes above intrinsic value, michael can sell more shares under the open market and use that cash to buy bitcoin. that's an enormously valued creative thing to do if you think about the history of fiat currency's. always to basing themselves, right? then you have something who's supply, bitcoin, it's completely independent of the demand for it. that's a very value creative thing to do, buy something in dollars of value in bitcoin. >> that's good if you already own the stock but maybe don't be one of those buyers of a new equity offering at a big

premium to intrinsic value if it is just essentially an arbitrage. >> selling shares at a premium to intrinsic value benefits ongoing shareholders. we don't mind that at all. on the other hand, if the value dips well below the intrinsic value of the software business plus the bitcoin, you can always buy back shares. having somebody at the helm of what is effectively a closed end fund, allocating that capital is enormously valued long term. >> got you. as someone who looks at individual equity and bond opportunities out there with a value orientation, how are you finding the markets right now in terms of whether there is a rich set of opportunities or it is picked over after this big rally last year? >> no, i think the backdrop right now it's enormously positive for equities if you look at what is going on. i laughed, quarter one of the things that was really interesting to me is that long dated government bonds were up double digits. not only where they have double digits, the stock market was

also up double digits. that's a really interesting combination. historically speaking at least, when bonds are up double digits, equities are tanking because people are buying safety. in this, case when you see both of those things move up at the same time, it probably suggest the market believes inflation is rained in and very much under control, which is supported by today's ppi numbers coming in a little light. so, now, the bond market, the fed funds futures market is predicting roughly an 8% chance of a cut from the fed by the end of the first quarter. that's really interesting if you think about gdp annualizing at four and a half percent for the past two quarters. with the fed looking to cut rates. that hasn't happened in 40 years. so, that's an enormouslyr equit, we're really bullish on the environment right now. >> i guess i would suggest that you mention to the trailing gdp growth rate is pretty high for the fed cutting rates. you think the economy has still got some momentum and is going to be able to withstand the lag

affects of what is happening with rates? >> i think cutting rates right now would be a good thing to do. the bond market doesn't expect them to cut it at this next upcoming meeting. but i think it would not be a bad idea to cut rates 25 tips just to let everyone know they are not asleep at the wheel. as you point out, there are lag affects, but things are still strong. unemployment is low, commodities are at three years low measured by the c r b. things that they're broadly are pretty good, actually. >> certainly what we can observe at the moment. phil, great to talk to, you appreciate the time today. >> thanks, mike, appreciate being on. >> up next, shares of united health are falling seeing the stocks biggest drop in seven months. we'll break down what is weighing on that name just ahead. it mh reheucmo wn we take you inside the market zone. ♪♪ ♪♪

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bell: market zone. united health, the greatest track on the tower. bertha cohen's here to break down what is behind that move and airline selling off. elaine becker reacts. bertha, let start with you in this move and united health. >> you know, mike, they beat on the top and bottom line as far as earnings with the big number that gave investors pause, the 85% of medical loss ratio. that is the percentage of insurance premiums that were spent on medical cost. it was a full point higher than expected. united health said some of this was the surge in covid late last month, which is a higher medicare inpatient costs and seniors were hospitalized at your end, a lot sicker than

what they had seen most of the year. the other driver, which is something that all the medicare advantage insurers have been calling out all, year is a continued rebound inpatient getting outpatient orthopedic surgery. united health and its peers say they have priced for this in their 2024 medicare advantage plans. the news today, sending the orthopedic players to fresh highs after a nice run that they've seen over the last three months. mike? >> bertha, i thank you very much. meantime, airlines sharply lower today after the faa said it would audit boeing's production line. delta is more cautious for your forecast also weighing on the group. the airline trimmed profit estimates on geopolitical headwinds, energy prices and ongoing supply chain issues. that is overshadowing it better than expected quarter for delta, which benefited from strong international demand. ceo ed bastian telling cnbc earlier he expects domestic travel to also pick up in the first quarter. >> we expect to see an

inflection point in the first part of this new year in terms of our domestic revenues turning positive. also, corporate travel is up. again, finished the year strong and is picking up again. we are now back probably almost 90% of where we were pre-pandemic levels and continuing to build. >> let's bring in cowan's top analyst helane becker for reaction. helen, i know you actually are recommending delta, it seemed like the guidance was what perhaps offended the stock today. what was your take on the quarter? >> yes, exactly so. we are above consensus on delta's fourth quarter. actually, they're the only ones who were above consensus on. for everything else, we are at or below. for the guidance for the first quarter, i don't even think it was the quarter as much as the full year. prior to today, they were talking about $7 in earnings for 2024. all of a sudden, today we heard

a 6 to 7 and seven is aspirational and still achievable. i think that up and did the market, to your point. i also think the concerns that you mentioned of in your opening remarks on geopolitical, higher fuel, supply chain, they're also weighing on the share prices today. not only with delta but you saw the whole group is down a lot. >> for sure. it has absolutely sort of spread elsewhere. it is interesting, though if you go to the mid point of the new guidance for the four, year 6 to 7 gives you 6:50. it is at six times that number. clearly the market in general is not necessarily willing to extrapolate that the recent and current earnings levels are going to continue. do you disagree with that? >> so, i'm going to give you the typical analyst yes and no answer. on the one hand, i can't disagree too much because we

ourselves wrote a report on december 1st where we talked about north atlantic traffic being under pressure the summer. not so much because of delta or united, where they are just restoring seasonal capacity, but because the industry is adding more than eight and a half percent capacity to the north atlantic. and we are expecting pricing to come down from last year's very elevated levels. that is sort of the bad news for north atlantic. they also have very tough comps. the good news for delta in our view, and why we can still have it outperform and have it be our best idea for 2024, is that region where they are adding a lot of capacity, traffic in china is improving. really, traffic in the whole pacific region is improving, where we have relatively easy calms. the fourth, quarter with a capacity of 44% for them. we saw revenue up 45%.

we think that will carry into 24. >> how are we to view what is going on with but, weighing with these reviews? with the potential prolonged grounding? i know it's not a lot of aircraft at all the rest of it. but is that part of the story of why investors are taking a half step back? >> probably, yes. for delta, it's not as big an issue, because they're not as big a boeing operator as they are an air bus operator. they did mention on the call this morning that they are not really seeing a benefit in seattle from alaska errors issues. primarily because alaska is canceling flights days in advance and is able to re-accommodate passengers. if this happens last month, it would be a disaster. but happening in january is not the end of the world. this is after the first, i would say, week, it is a seasonally weak period. w e a k versus w e e k.

business doesn't pick up again until february and that continues. of, course we have the benefit of one extra day, which adds 1% in the quarter. and then east, or march 31st, you have, yes, the return traffic going home april 1st or second but you have all the march traveling for easter holiday or spring break in march. that should benefit. i think we are getting a bye opportunity, frankly, and the shares today. i think the reaction in the market is really overdone. >> all, right we'll see if that plays out. have to be mindful of those calendar shifts always when it comes to the airlines. helane, crate to see, thanks so much. have a great weekend. as we head to the close, the s&p 500 has popped into the green for the day just barely one tenth of a percent. for the week, it is up 1.9%, it will be a winning week. just that one week in between this 11 weeks been where they've almost always been up. you also see 100 new highs on the new york stock exchange compared to only 26 new lows,

there has been a bit underneath this market. we traded about 4800 early today on the s&p for the first time in two years. obviously, could not hold that rally undergoing on the stronger side. be accepting of the dow jones -- nasdaq, just about fine. that doesn't for closing bell, we send it to overtime with jon fortt. >> the dow lagging a bit. that is on wall street. but we will be closing in overtime. stocks are closing in the red today. in between the major averages now higher for ten of the last 11 weeks. we will get the outlook for stocks from longtime bull, tom lee, and his first take on bitcoin etfs which he began trading yesterday. earnings season kicking off today with a big bang, they are mostly lower starting with noisy results. comi