very quickly, we'll take a look at where the market stands. we have been looking at the futures in the red all morning long, continue to be the case. dow futures down by close to 200 points s&p futures down by 31 the nasdaq futures, off by 142, and this is coming after a couple sessions in a row where we have seen weakness in the market, so we'll see how things continue as we get closer to the opening bell that does it for us today. make sure you join us tomorrow where we will still be right here in davos. right now, it's time for "squawk on the street. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber our road map begins with jamie dimon's economic warning, saying he is cautious for 2024

plus, shares of boeing, they continue to drop they're down more than 20% that's just since the beginning of the year. ceo dave calhoun heads to spirit aerosystems plant today. he's going to try to address quality control issues for that company. plus one name that's continuing to rally? there it is. amd. it's hittingclose to its highest level since -- highest closesince 2021. optimism related to its efforts in a.i let's begin with the markets. yields have been elevated today. central bankers around the world continue to push back on market pricing, but this retail sales print control group, best in about a year >> it's funny, because we had a new york number yesterday that was too weak, and when i saw this number, i said, maybe this is what we need to appease those who think we're about to go into a recession. so, we care tremendously about whether we're going to lose the soft landing, but we also,

david, as you know, care that the ten-year not go too far above 4% so, you've got this kind of push me-pull you. i like the retail sales because it's against the narrative that we're going have a recession >> right i like it. sure that works for me. i think we can end the show now. thank you, carl. >> we'll see you tomorrow, have a good week. >> private credit likes my view. >> right private credit is very large we don't talk about it as often as we should >> runaway train >> private markets have grown dramatically, enormously over the last ten years, certainly, even the last three years, and you're right it's important people do wonder whether there's something coming there that will -- >> the b of a fund manager yesterday, private credit, number one risk. >> when you meet a number one person now, it's not plastics. >> it's private credit >> i was with someone the other day, when i was in kansas city, and i said, what are you up to

private credit >> they will tell you, as we brought any number of the people who run these firms on, that they take -- they underwrite extremely well they're getting paid very well they do not distribute these loans broadly, so there's not broader risk and they feel very comfortable with the risks that they are taking and the ownership they have and the funds just keep coming in, jim that's to the alternative asset managers, i mean, blackstone's over a trillion now. apollo is enormous with its insurer, of course, funding so much of that and it goes on from there. brookfield the size of these alternative asset managers is truly stunning >> i know that's a pivot from retail sales, but i wanted to make it the point because when i listened to goldman, i look at the morgan stanley quarter or the schwab quarter, i realize, look, if you're in trading, high-frequency trading wrecks your margins if you're in investments, even -- if you're in private

equity, private credit has supplanted how you make your money. you're listening to the ceo of goldman, and you're thinking, where's the niche? well, it's in bagging elephants, wealth management. they've just been carved up. all the great things that you wanted out of the banks, that's why their multiples are so low >> that's true listen, blackstone, $143 billion market value steve schwartzman was a guest on "squawk box" as well it's an argument to be made, much more important in many ways than some of these other firms >> here's the key question, carl when you're with a brilliant young person, man, woman, doesn't matter, you say, goldman or blackstone? most of them say blackstone. really interesting >> it is interesting having just spoken to -- heard from solomon on "squawk box" this morning we've got breaking news. let's get to phil lebeau good morning, carl the faa announcing that it has completed inspections of 47 737

max-9 planes that were grounded. remember on friday, the agency said, look, we're going to take 40 of these 171 aircraft that are grounded, we're going to do an inspection of the fuselage door plug on those aircraft, and then, we'll take the results and analyze them well, the inspections are now done the faa says it will now analyze those results. no timeline for when it will announce what kcame out of thes inspections and when we might see those grounded max-9s return to service remember, today, you will see mike whitaker, the faa administrator, he's going to be along with the chair of the ntsb briefing the senate commerce committee behind closed doors, so we won't get a readout in terms of what he tells them. meanwhile, you've got boeing ceo dave calhoun in waichita, kansas he will be addressing employees

at spirit aerosystems, along with the ceo of spirit, pat shanahan this the going to be similar to what we heard when dave calhoun was talking with boeing employees in washington last week i would not expect a decision in terms of, here are the inspection -- here's the process, fix them, get them back in the air -- i would be surprised if we get that before next week. i think we're looking at next week or the week after, depending on what these results show if these results are really, really bad, then it's a whole different ball game. >> these 40 planes were fixed, so to speak already, or they tightened the bolts and now the faa takes a look at that >> they inspected them, david. that doesn't mean that they fixed them what the faa will do is say, okay, we wanted to see, what's the state of the 171 max-9s that are grounded they picked these 40 planes, 25 from united, 15 from alaska, randomly picked them they wanted a statistical sample that they could say, we're

pretty confident this tells us what kind of work was done on the max-9 fuselage door plug now, they will analyze the results. then, they will put out a protocol process for -- or protocol, i should say, to the airlines for, this is what needs to be done in order to ensure that they are safe to fly. >> phil, let me ask you. this is instantly being viewed as positive. do people expect that the inspections would take much longer is that why someone might say, well, this is the good news here >> jim, i think the market is taking this as positive news that, a, it's a step forward in terms of, okay, we have something that's been finished here, even though we don't know the outcome here, and b, i've heard from more than a few investors who have said, look, i think ultimately, they're going to realize that this is a manufacturing quality escape that is not widespread, and i'm making a bet on boeing that's just conjecture at this point. we don't know if that's the case we don't know. they might have opened up all 40

planes and said, wow, this is a bigger problem than we thought it was at this point, this is investors, i think, perhaps, saying, we think this is going to be the near-term bottom for boeing whether or not they're right or wrong, your guess is as good as mine >> interesting, phil thank you. by the way, b of a today does cut boeing from the u.s. one list these comments from the ryanair ceo. "we have been loud about the lack of quality. it's not acceptable that aircraft get delivered at less than 100%. >> that gentleman has been outspoken in part because they are a huge client. they have that ability to say it when you see some sort of a stock bounce like this, that's just people, i think, who are saying, oh, maybe the short isn't as good as i thought, and in the end, there's only two of these, and airbus doesn't have any planes it's time to start rebuilding a position >> right >> it's a lesser of situations >> but you -- listening to what phil said, there is a -- there's

certainly -- >> there's a path. there's now a path yeah but david, i'm going to reach a conclusion i think david may actually like this, carl if your company's named spirit, don't own it >> don't get involved with anything named spirit. >> bad month for companies named spirit >> it's got spirit in it -- spirit in the sky, i'm long that one. >> spirit, obviously, the stock of which the discount carrier came down sharply when a judge said no -- that was a big surprise >> i can't believe we went out here over and over and said jonathan kanter is going to win that case. remember, this is a serious guy. he is in charge of antitrust for the justice department, which still is, i'm told, very significant, the justice department >> yeah. >> and he is adamant and that office let everybody know, we are tired of airline mergers, and the country is tired of airline mergers, but the arbitragers were not tired of airline mergers >> i think there were plenty who

were short spirit as well, who were believers in the fact that this deal would not be acceptable, both to the antitrust regulate and he recognize to the courts, which has been the case. we'll see what they choose to do obviously, jetblue did go up on this, but spirit plummeted because there's -- it hasn't made money in quite some time. the price was far above certainly what it would command in the market, so there was a large spread there, jim, and there were not too many risk arbs that were truly involved here, from my understanding. in fact, many may have been the other way, betting that it would get turned down, as we had said numerous times when they finally pried them away from frontier, remember, jim, with the promise of a $400 million reverse break fee. >> you got that dead right so, the stock shouldn't have been -- anyone who was in that just was defying common sense. or never flown to west palm from newark >> i assume you don't have high hopes for alaska hawaiian? >> i think that that's -- it

will concede the situation because that's about making it so that prices go higher, and the justice department -- i mean, jonathan kanter is a serious paul weiss attorney who is used to winning cases and only brings cases, i think, that he knows he's got a pretty good chance to win, and i don't think that the judiciary has -- is any different from anybody else. they've seen the mergers took airfares up in this country. that's what happened take a look at one of the things that's intractable for the fed airfares >> that said, is it beneficial if spirit goes bankrupt? >> no, and that's the rite aid problem. if rite aid goes bankrupt, doesn't walgreens do even better >> that certainly seems to be a possibility. >> absolutely. and you're right >> it's not like we haven't seen airlines go bankrupt plenty of times. >> you're absolutely right >> branif. four times remember that? >> little price fix there. but i do think that it's common

sense when you say, listen, we're not going to prove any of these deals, and then you go ahead and do a deal. why would you, in the face of jonathan kanter say, i'm not taking you at your word? i'm going to do the deal anyway. >> if all that's true, why is solomon, for example, so gung-ho on the m&a environment right now. >> i think there's a lot of deals that could be like what we have with synopsis >> airlines is challenged in terms of antitrust right from the get-go timat this point becs there's so much regret that they allowed the american deal years ago. i think the risks, carl, to your point is still there, both ftc and doj for many deals that would not have been considered high risk, but as i've said a number of times, that seems to be fading as the key consideration for those who are considering a deal we're back to sort of the basics of, can we agree on social issues and price and get this thing to the finish line

i don't want to say in any way that regulatory risk is not significant, but ceos seem much more determined now. >> yeah, well, bob, who i spoke to last week, the ceo of amgen, and they're merging with horizon. horizon had great drugs but not a lot of distribution. amgen has terrific distribution, a lot of money to make more, and they went in front of the ftc, and the ftc was against the deal, and they listened to bradway, and they decided, hey, he's right, we're going to go with the deal. that was the beginning of the floodgate. if you approach them with a reasonable proposition -- >> that said, we've got a couple out there still. amazon and irobot. the eu doesn't like it i don't think amazon likes it either >> they're going to dominate the robot vacuum cleaner, and that is one thing that is unforgivable i want competition in that market >> given what's happened to that company, amazon, they already cut the price. and the albertson's deal that

we've talked about a lot, which is unclear when that's going to come up, but there's still a belief -- >> washington state yesterday on that news. jim, really quick. this waller speech yesterday and his line that we don't need to cut as rapidly as we have in the past, is that what sort of hurt the afternoon? >> he crushed the market it was interesting both the dow, which david will acknowledge is atavistic, and the nasdaq went down but the mag seven went up. waller couldn't hurt the mag seven. he couldn't. >> no. >> he took a shot, and he failed >> everybody fails >> everyone fails. >> it's like the van wick. you can't beat the van wick. it's an old "seinfeld" -- have you ever gone to kennedy airport? has there ever not been traffic on the van wick? >> you can't get past the van wick but i will say that people are talking about the mag eight, but there are only seven people.

amd. >> b of a made note yesterday of broadcom catching up to tesla's market cap >> we're stuck with they kept the avgo symbol because hock liked that >> for half a trill. but it's still a ways away from tesla. >> $170 billion. >> tesla's doing its best to come down and meet in between there. >> thanks for that visual. >> yeah. >> meanwhile, we got retail sales under our belt and we're not done today let's get to rick santelli >> yes, we are waiting the utilization numbers. these are for december, of course, and they are hitting the wires as i speak up 0.1% on headline industrial production the mirror image of the down 0.1% we were expecting and just to put that in perspective, the number that we had in october was the weakest number going back to december last year at minus 0.9%, so we have come up a bit. now, on utilization rates,

expecting 78.7 very close to expectations 78.6 the problem with that is, 78.6 is a nice jump from where we were not that many months ago, but 78.6 is still pretty light when you consider we started out last year at 79.6. these numbers have been soft manufacturing has been on the soft side. what hasn't been soft is some of the inflation readings we're getting from europe. we watched uk sovereign debt jump in yield. they've seen real pops in some of their inflation numbers, which really demonstrates that it isn't necessarily a linear path, which may make many here nervous. last month's, up 0.2% on industrial production, now becomes unchanged. "squawk on the street" will return after a short bak re

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we got eight minutes before be we get started on what jim and i used to call hump day. >> it's a synthetic thursday, because we didn't have monday. >> let's get your "mad dash. >> one of the things that's happened so far this year is when a stock starts going up, the analysts immediately say, i've got a winner, so it's like, let's boil that one down both key and bank of america are saying that netflix is going to have better than expected numbers. key is really key on membership growth bank of america is talking about international scale, that people want to deal -- they have it, the other guys don't so, that's just another reason why people want to just follow the crowd here and buy what has

now become the favorite of the old f.a.n.g. >> you hear this a lot now they won netflix won. >> they can't win. i didn't see them in kansas city >> it's them and everybody else fighting for number two. obviously, global scale is one of the key benefits they have. >> it is right. >> and the ability to roll things out >> and younger people like -- >> not to mention produce things in other countries and bring them back over here. >> sometimes, when i can't hear the subtitles, it's very difficult for me >> got to have the subtitles a lot, even with accents these days >> i tell you one thing, people, when they get together, they're still talking about some show that was on netflix. number one in the country. i don't hear people talk about hulu, but maybe they do. >> i think what really tested the power of netflix is the fact that you can run old shows on netflix that didn't do particularly well, "suits," for example, and it will suddenly become a hit as a result of it -- the reruns being watched >> meanwhile, no one's talking

about "reacher" on amazon. i think it's fantastic >> i love that guy have you ever seen a larger individual on a tv screen? >> no, and he doesn't have a six-pack he has like a nine-pack. and it's not bush. >> the body count in "reacher" is very high >> not in the actual books in the books, people are beaten to a pulp, but they don't die. >> he's just snuffing people out. >> he's hands-on >> on your neck. all right, we got an opening bell a few minutes from now. don't forget, you can catch us any time and anywhere by listening to and following the "squawk on the street: opening bell" podcast. to duckduckgo on all your devie duckduckgo comes with a built-n engine like google, but it's pi

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. i think it's a mistake to assume that everything's hunky-dory and when stock markets are up, it's like a drug we feel. but remember, we have had so much fiscal and monetary stimulation, so i'm a little more on the cautious side, that we are facing things in '24 or '25. >> that's jamie dimon on "squawk" this morning, offering

his outlook on the economy, jim, said don't assume everything is "hunky-dory" with the u.s. economy. >> and i think he did present a little less perilous view. there was something i think was misinterpreted by people he did not say, look, i think trump has a lot of good points he said, please don't dismiss the people who vote for trump's -- >> he said, trump voters deserve respect. that was his line. >> how they're aggrieved, he thought, made a lot of sense, and people think he endorsed trump. i think what he's saying is, the democrats should be a little more wary that there are people out there who have a very legitimate gripe, and i thought it was very profound, and it was an interesting moment, because i think the media has missed the fact that these people are angry about things, and i know there's really good piece in "the atlantic" yesterday by ronald brownstein saying, look, the

media cared and listened and decided they didn't care what the people had to say. he said, immigration, how can you not be worried about it? china. nato and i thought that was a very considered view of, why would you write these people's views off? >> the only thing missing from the conversation was any discussion of january 6th and any kind of peaceful transfer of power. the terrific to -- risk the that >> we do have a 14th amendment problem, but are they going to be able to say, what matters, professor snider at yale is saying, we have to let the people decide, and he says that's contrary to the way that the -- what was written initially about insurrection so, i think it's got to come down to, david, what's going to happen is i think that the supreme court is going to rule that trump has to be on the ballot you have to let the people decide but to dismiss the voters of trump, again, is a mistake that's what he said. he did not say -- >> there's still a lot of time

between now and the election, but it is starting to figure into, without a doubt, asset managers' playbook for the remainder of the year. >> that's where i wanted togo. why should we talk about it? well, i think we talk about it because the wealthy class does better in a trumpworld and that matters >> let's get the opening bell at the cnbc realtime exchange at the big board, innova at the nasdaq, cryoport, cold chain logistics services for life sciences as brett rolls in pretty negative, jim some of the desk commentary today points to the election as it pertains to the dollar's price action yesterday best day in about a year if you believe iowa means something, then it's going to have impact on the peso, and tariffs will play into it. >> peso is pretty good

you'll have these companies say, look, basically, we're forecasting the dollar to stay weak, but now we have to change our numbers. i keep thinking about how procter & gamble said the raw cost gain that they had was offset by the strong dollar, and then the dollar got weaker and people started buying procter. we don't want this thesis. we truly, truly want that dollar to stay weak against mexico, largest trading partner, obviously. >> a strong dollar having its impact, perhaps, phil, in energy jim is trying to defend 70 again as opec rushes out their demand forecast for next year >> this is the level my oil expert, whom i use for "mad money," says this does hold but i think it's been pretty shocking to people, and they immediately want to relate it to, oh, well, china's gdp is not 5.4. it's 5.2 no i think that what's happening again is the u.s. is flooding the world. can people please understand

that we have that ability? why can't they understand that we just produce so much? now canada is going to have a new pipe, which is going to produce even more of oil that they can make so it's not so heavy. and i just don't think people realize that this continent's insanely rich with oil and stop thinking about who's the consumption side and start thinking about the supply side but they won't they just won't. >> what's amazing is that the retail sales number would have been even better had we not had some of the declines in gasoline that we have had within that number >> look, i see a lot of retailers, this is obviously not an important month in retail burlington is doing pretty well. but you never repeal the gap or macy's, you know, some of those big gains that we had. i'm seeing a wlot of the gains that we had from november to the end of the year are slowly being repealed look at schwab this morning. >> let's talk about schwab this

morning. the company did report earnings. the stock is down about 6%, jim. i'd obviously love to get your take it's not a secret that the rising rate hasn't been particularly good. the commentary from the ceo is that their financial performance during the course of last year reflected the challenges of navigating a market environment shaped by the federal reserve's pronounced interest rate tightening policy and the follow-on effects stemming from the regional banking crisis that took place in march. >> total net revenues were down 9% >> versus prior levels to $18.8 billion. but what else about this quarter, jim, is catching people unaware? >> i saw this with morgan stanley, when had a number that i thought people knew would be bad, but you've got -- people, when they have the money, they don't really keep it there they journal it over to the high fees so, when money comes in, you just make nothing on it. there's no leverage to this

model. that's what happened that's what mr. pick is going to have to deal with at morgan stanley. there's no leverage to getting these assets in. goldman-sachs is different because the assets came in, they had the billionaire class. the billionaire class banks at goldman, except for when they try to buy private credit. you know, carl, this brookfield, apollo, blackstone, they're capable of doing whatever they want they're not regulated the way that -- >> glad you finally got the memo on this. i've been chattering about it in your left ear for quite some time >> that's the ear that's partially deaf >> it's the ifb over the ear, that happens to people in tv that said, jim, citizen's managing a gain here this morning despite lower net interest income affecting q4 profit >> that was one that was expected to miss people thought that that one was just a sitting duck, and god for them good for them that they proved the naysayers wrong.

that is, i think, a very responsible bank at one point, it had like a 7% yield. i like the regionals more than i like the nationals it just -- i mean, the other day, pnc reported everybody on, and six guys raised their numbers at pnc today i think pnc is a very good bet here >> we continue to see weakness in the ev market overall tesla, obviously, by far, the leader and it is -- the stock is down another 3.3% right now it moves quickly during sessions,so we'll see how it performs but it's down over 14%. >> it's bad. >> for this year, the one-year performance, that's 12 months, 62%. year to date, there it is, down 14.3%. >> it's been the weakest of the -- of our mags >> reports that they slashed prices of their model y in germany after reducing the model 3 and model y prices in china recently

model y, top-selling automobile in the world, period >> and the united states, remember, we had steve from hertz, number one seller, so therefore he felt he had to have a lot, and david, is it too early to buy fisker? >> yes, i wouldn't advise that too early to buy rivian and too early to buy lucid, both of which are down over 5% they are not beneficiaries of this >> there was a day when lucid came public, and david doesn't make these calls, but he was askance -- his arms were akimbo when we saw that lucid at 50 >> rivian does get cut at deutsche they take their target down to 19 on "squawk" this morning, in davos, they did talk about the slowdown in evs. >> we continue to lean forward, but we see the pullback, and i think that the key is that, for us, we view electrification as good business.

when you look at our riders, about 40% of our riders now, for example, in the u.s., have been in an ev and they love the product. their average tips are higher for the driver, so the drivers who got to an ev, our take rate is lower, so they're making more money from us. they're making more money because the tipsare higher, so both riders and drivers love what we're seeing, but then, per cease, we've got to go out to oems and get them to lower produces and make it more affordable for drivers to make that switch. >> meanwhile, there's the drizzly news, which we didn't get to yesterday and then this wolf note that thinks uber and cart might get together. >> this note about, everyone wants to be in the food business i'm surprised they didn't just throw in amazon wants to buy them too but instacart has not been all that well received suddenly, you get a little m&a juice going, and people will certainly go for that. people are looking for something new and different at the

beginning of the year. what do you think about playing m&a? >> i'm trying to remember where cart went public >> i would have thrown in amazon just to really get it going. >> close the first -- well, $42.95 was the day number one high >> yeah, on cart you can see, 25 bucks. >> they do mention, competitive risks are rising as dash, uber, and amazon are rapidly closing the product gap. when you do this stuff that just says somebody's going to merge with somebody else, there's no problem. you can just say it. it doesn't happen. nothing happens. if you get it right, then suddenly, you've got zack morris being a brilliant man. i didn't know zack until he put this out >> properly predicted the merger of uber and cart of course, we're kidding here. we don't have any -- that's not something i've heard >> the drizzly was interesting because i went to them on drizzly. drizzly was a very good acquisition, i thought those of us, you know, my wife's

in the liquor business, and drizzly was the way that people would order phosphoro, but so much for that. and i thought that 1.1 -- i couldn't believe they closed it so fast, but apparently they never integrated it that well anyway >> again, it just seems unlikely that uber is going to buy cart >> but then why did this person do this? so that we could mention his name >> it worked >> we got -- he used the actual maple bear name. i always love that >> the old maple bear. >> well, there you go. we just did that guy a total solid. >> maple bear is up 4% guys, shares of disney are up. >> oh. >> it's worth reminding people that there is a proxy fight under way at that company. of course, they put out their 12 directors yesterday at disney, and they did not include, as we knew, both nelson peltz and jay, who are trying to get seated on that board through said proxy fight.

you know, we may know as soon as late march, early april, you may get a meeting here at which we're going to see what the vote is some strong language in the proxy from disney as to why they are not willing to consider either peltz or rissoulo they say, we are open to having chats with him any time he wants to talk, and they say the board has an open door and an open mind if he were willing to present his ideas to the board, not as a board member but assen a important shareholder. he hasn't taken them up on that. they kind of go after rissoulo here he had run the parks some time back but they point out that after leaving disney earlier, the impact of technology and the competitive universe has radically changed, rendering his perspective on disney stale and not relevant to the challenges of today they also mention his close relationship with ike

perlmutter remember, much of the stake that trian is working with here is actually perlmutter's ownership. and they go on to point out that his close relationship with perlmutter, coupled with him having been passed over in 2015 to become ceo successor would likely inhibit mr. rasulo's ability to work constructively with bob iger. >> i wonder if nelson peltz is happy with that salary package of bob iger. >> he got a raise. mostly stock >> that's true he gets the stock up, he would be very happy. >> you have to account for it now, but it's on the come. but it was twice what he had last year. $31.5 million is what it's valued at. >> probably working harder >> he's working hard maybe harder than he thought he would have to. >> yeah. >> he's got a couple of years to go we'll see. >> remember, this is -- a pprops

of the maple bear merging with doordash and uber, this nfl story, keep it alive, david, that disney may be doing some deal with the nfl? or is that just fatuous? >> there are those who try to understand it from the perspective of why the nfl as a league would want to own part of one of its distributors, does that impact its ability to negotiate with other distributors for its product that said, if you can contribute the nfl network instead of cash and get some sort of value in it and then own something there, maybe it makes some sense. these talks overall for a strategic investor in espn do continue i think i've shared that verizon's another name that's come up. >> if you're just talking to the board, i know that someone like nelson peltz is not going to be really happy, carl, by saying,

on the speakerphone to the board. if you're in the room, you can make change. i think if you're just talking, well, that's the heisman getting the heisman. >> there's a lot of issues around that. box office and studio resurgence is one amc, new all-time low for 13 as we had the other day goldman trimmed their domestic box office forecast for the year >> i think that ship really sailed now remember, adam aron, who went to abington high school, galloping ghost, with schwartzman and jeff sonnenfeld, did make it very clear when he sold stock that he sold it for -- you know how ubz you say it >> diversification purposes. >> but it was a good time to sell >> always a good time. the meme stock craze, though, saved the company. without that -- >> oh, the meme stock -- >> the ability to sell stock at market, just continue to sell

stock. obviously, they took on a lot of debt >> we're getting near the anniversary of that farce, remember >> say again >> we're getting near the anniversary of the farce of gamestop and amc we're almost there maybe we do a little -- maybe you do a little jig or something, a little difference >> i don't yobt i don't. that was '21 >> three years now >> nfts. >> kind of ramping up. >> ryan cohen. he's huh doing these days? >> ryan cohen has not done as well he was able to do that really clever -- >> he bagged bed bath. >> no, he didn't bag anyone. what he did was made a move that was really good for him. >> not that it's all part of the same silo, but dimon did talk about bitcoin today as well on "squawk box. he said it was the last time he's ever going to address it. take a listen. >> what do you think of the -- there's about a dozen big

financial companies, fidelity included -- >> number one, i don't care. please stop talking about this [ bleep ]. i don't know what he would say about blockchain versus currencies that do something versus bitcoin that does nothing, and maybe that's not different than me, but this is what makes a market. people have opinions this is the last time ever going to state my opinion. >> it's a free country you can do what you want he also said, though, that if these nefarious use cases are not addressed or fixed, he thinks the government, potentially, one day, would have to shut it down. >> no. that's not going to happen what's interesting is i remember when i tried to get my bitcoin moved to jpmorgan, and nerp cert they were certainly unwilling to take it. now it's in some form that i guess it's okay. the way he was adamant about not talking about it, he better be a man of his word, and every time he's asked, hernan should say, i

addressed that on january 17 on "squawk box. >> capping a well? that's it? >> he can't resist he likes to talk >> he loves to talk, and he's fun to listen to >> he really is fun. >> maybe he will stick to that, no more discussion of bitcoin. we do know where he stands at this point i don't think the question needs to be asked any longer, right? >> i agree with that i like the fact that he is willing to speak his mind. he doesn't -- he's not worried about the lawyers. he said whatever he wants. did he need to curse >> it added a little spice to it he's a good interview because he's one of the few chief executives who's not the founder, so to speak, who feels free, i think, to speak his mind >> or in the lineage >> oftentimes, my experience has been it's those types who don't worry -- don't have corp. com on general counsel in their ear or anyone else. he's one of them >> were you upset that he didn't quote "princess bride" >> sure, even if it's misquoted. >> we're referring to interview of a lifetime, which is david's

interview with elon musk, where "princess bride" came up fabulous movie >> mr. musk does not worry about what anybody thinks about what he has to say. he's just going to say it. >> and the other bankers, how do they feel, if you ask them a question that's a little off-message? how do the other bankers react >> they stay on message. >> it's very interesting jim, not a lot working today. >> no. >> all sectors, red. you got 1% declines in communication services, jim. consumer discretionary is in there as well. >> this is the downturn. we have been saying there's going to be a downturn for the investing club and we have not looked right we raised a lot of cash, and today, this is the first day that's broaden out yesterday, the nasdaq did rally at the end i don't think they can do it this time. i think the market went up so much at the end of the year, and people acted like, okay, now it's just going to continue, because it's an election year, so therefore you own -- i mean, that -- look, i like the

election year thought, but not this early we're too early. you can have a down move and then go up as we get close to the election, but you can't defend, right now, buying, by saying, we have an election. >> we'll keep an eye on it we're not done by any stretch today. we'll get beige book, fed speak this afternoon you can get in on the cnbc investing club sign up and find out more at cnbc.com/jointheclub or uses the qr code on your screen, and it takes you right there. as we watch bonds, we'll see if the ten-year can stay in this range that it's been in for about a month, but about 4.10% kind of gets to the higher end of that range. williams at 3:00 today we'll be right back.

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on the nasdaq this morning not a lot working in tech as well on the ndx. only about seven components are green with the nasdaq under performing this morning down to 1% plus. got the vix ove 15ab we'll get stop trading with jim in just a moment let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪)

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let's get to jim and stop trading. >> one of the great untold stories of this year and last year is the fact that marijuana, cannabis is the way to get high for people that are younger. it's starting to impact these stocks i think people have to recognize it's not just dry january but it's damp january and that extends to february and march. and not even extending the fact that dog makes you feel awful after a few drinks there's way too much bourbon that is collapsing there's 50,000 brands only 500 make money and diageo is front and center with inventory. i don't want to own that stock.

>> you have been constructive on the beer business. >> beer is different it's social. gop not as effective in terms of dampening the beer file. i know people feel that bud is not doing well but it's bourbon that's been getting killed whiskey, scotch, scotch not doing well used to be phenomenal not anymore. >> how about tonight, jim? >> i'm looking at bitcoin. this bitcoin exchange product, not etf. we'll analyze the protection you really get on this fund and whether it's as safe as you think. i'm going to ask jamie dimon about it >> yes he's interested in talking about it >> if he curses my numbers go up. >> i guess we beep him out.

>> the late george carlin was great i'm going to try to get him to say all seven. >> it's cable, you can curse. >> really? >> when we come back, david has an exclusive with papypalpaypalw chief alex chris when we return.

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good tuesday morning -- tuesday? wednesday morning. welcome -- i'm all off i'm carl quintanilla with david faber, leslie picker sara eisen is on assignment. markets still proving they're susceptible to rising yields about a one month high on better than expected retail sales res results. stocks down. let's get to economic data crossing the tape with rick santelli >> reporter: these are a november read.

we're expecting down one tenth of a percent and that's exactly what we ended up with, down .1%. i guess what's notable here is these are fourth quarter numbers and this is back-to-back drop in business inventories so we're not building so that has gdp ramifications. we saw that december retail sales was strong and we know supply chains were an issue and all of a sudden tensions in the middle east are making it an issue once again we want to monitor business inventories quite closely moving ahead and national association of home builders, housing market index hitting the wires for january and to cover that we'll head east and move towards diana olick. >> reporter: a big beet on homeowner sentiment in january, jumping 7 points the street was looking for a 2 point gain anything below 50 is still considered negative but it's moved ten points higher in the last two months and is at the

highest level since september. that coincides with a drop in mortgage interest rates from the high 7% range to the 6% range and builders in the report point to that and the growing affo affordable they note headwinds in available labor and costs. and sales expectations in the next six months jump 12 points to 57. and buyer traffic jumped five points it increased the most in the northeast into positive territory. it was flat in the midwest we'll get a read on how the confidence is playing into housing starts and building permits. leslie >> a significant beat there. we're 30 minutes into the trading session. here are stock movers. boeing is one of them. the faa it announced it co compcom

completed the inspections of max 739 planes as dave gets set to week at a town hall at a spirit plant. a few bullish calls on netflix, key bank raising the target to 545 a share while bank of america and wells reiterate out perform ratings ahead of next week. fresh results from the financials, charles schwab, u.s. bank and citizens. schwab down about 4.5% citizens up about 2.5%. we'll break down the numbers with citizens' ceo later this hour everybody hit with the fdic special assessment charges pressure on net interest income. interesting dynamics as a result of the pivot we saw in the fourth quarter and how that's shaping up at various banks obviously that was difficult for

morgan stanley they saw two downgrades today of that stock because their wealth management division not bringing in the net new assets figure that analysts are used to, the street is used to, for a steady growth property for them it was a disappointment in the quarter because investors are doing this cash equivalent trade still. they're not putting their money with areas that they could be generating higher yields because they see safety in frtreasuries money market funds >> when you're getting four, four and a half whatever the number is in a money market fund. let's talk about schwab as well we mentioned in the last hour, the stock was down as much as 6% after reporting earnings and they cite the pressure they've been under for the same reasons as rates rose in 2023 and revenues declined some 8% or so year over year. >> the movement caused schwab's

balance sheet to shrink by $59 billion or 11% from the year end 2022 level and that's because as they say clients took advantage of the highest yields in nearly two decades increasing allocations to investment cashes it's known as cash sorting we're seeing the impact play out across wealth management goldman did see a nice jump in the division but that's largely due to the types of clients they serve and they 'not seeing the same trend that's why it's important to be idiosyncratic there. >> with rates have been declined already to a certain extent look at the ten year or expected to decline as the year goes on, what is that going to mean for the companies? >> that is the key question. they've been such beneficiaries in a lower interest rate environment as clients sought new ways for alpha, pursuing asset management and wealth management and that had been a boone to their business.

whether six interest rate cuts is enough to really kind of swing that pendulum back in their favor in a meaningful way is the key question but there's also more competition that's arisen over the last year they're contending with as well. so there are a host of factors playing a role here. but the growth numbers that the street is used to, really are difficult in the current environment. and so, you know, we heard from some bank ceos we heard from solomon this morning he seemed upbeat, especially as it pertains to the m&a environment, reintroduction of private equity into m&as and so forth, saying if there isn't a major cataclysmic event we should be fine. >> it's an uncertain time, a lot going on in the world we've gone

through transitions in the last couple of years so there's been a lot of shift in view and i think that shift can continue. it doesn't have to create a reckoning. i'm not looking for a reckoning in markets in 2024 you have to see a real event to have something like that >> jamie dimon didn't -- that was not the most positive of his comments that we just used there from solomon because he was constructive and was yesterday on the goldman's earnings call. >> a similar tone. we think things are fine barring a major event we're monitoring what's going on geopolitically, monitoring what's going on with monetary policy but broadly speaking they believe it's going to be a better year, especially as it pertains to investment banking and that backlog dimon, though, he's still cautious. >> he may knowno longer be hurre

jamie but he's still tropical storm jamie. he also had some comments i thought that were interesting about commercial real estate that's a key question. we talk about it the question is how large a portion is it, what are the write downs going to look like, over what period of time can you take them? listen to what he had to say >> if we have a soft landing, which is possible, and rates don't go higher, which is possible it'll be a small problem, a hard landing it'll be a bigger problem, and a hard landing with higher rates which i think is possible it'll be a bigger problem. interest rates are like constant anything that has cash flow is worth less and obviously a recession, less need for space and all the things that happen in a recession and stuff like that >> it's interesting because, you know, we hear his list of risks

that he sees out there there's geopolitics, there's quantitative tightening, monetary policy and the latest fed move we don't always hear about cre from jamie i think those comments are preshouldn't as we assess what truly is the potential canary in the coal mine as we look ahead to 2024, if there is any at all. >> stocks are under pressure this morning because of the strong retail sales number averages on track to snap a two-month win streak joining us is sam stovall. great to see you again i've seen notes bringing up the numbers because of retail sales. that carry over from the holiday season may come to q1 is a march cut looking less and less likely >> morning, carl i think so we've been projecting the fed

it'll be later and fewer essentially they would start to cut interest rates in may of this year and actual by 25 basis points in each of the final three quarters of this year. so certainly a later start to the fed rate cutting program, and fewer cuts than what the street is expecting right now, which in my opinion is a good sign because it means we are headed for a soft landing if we did, indeed, get rate cuts to start sooner and have more aggressive rate cutting schedule, that would imply there are real problems with the economy. >> sort of also adds to the retrospective looks at waller's speech yesterday. >> yes i thought it was interesting today with the retail sales numbers it's damned if you do, damned if you don't, had the sales come in weaker, people

would have been worried we're headed for a harder landing and now they're stronger than expected people are worried that inflation will remain a concern and that the fed will be cutting rates a little later but that's pretty much what we have been embracing for a while. >> speaking of inflation, sam. we continue to see tensions ratchet higher in the middle east how concerned are you that that could kind of bring back inflation in a meaningful way? >> well, that certainly is a wild card leslie, when we look at oil price forecast for 2024, our expectations is we're moving back towards the mid $80 per barrel area. so certainly a lot of weakness that we have seen so far with oil prices and we're scratching our heads wondering if the oil price decline is really a forecast of what global economic trends are likely to be. but our feeling again is that while germany has missed a recession, that we could end up

seeing a little stronger and better gdp growth forecasts globally for the entire year >> so sam, given your target for year end, what parts of the market do you want to emphasize? >> well, history tells us that we -- that following an up year you want to let your winners ride so we have maintained our outlook for communication services, consumer discretionary, and tech. we have added to this group the financials because our belief is that this sector is trading at a 15% discount to its average relative pe over the last 20 years, looking for sequential earnings growth over the coming year and believe with the fed starting to cut rates that will be beneficial to the sector. i think that the market will have a hard time, however, breaking through the 4900 and then 5000 level without a lot of attempts at that

and that's why my forecast is a little below that 5000 threshold. >> certainly the same dynamics happening with 4800 lately sam we'll see where we get as we move farther into the year as we head to break here's our road map for the rest of the hour nvidia pushing to new all-time highs, other chip makers following suit we'll speak with the number one semis analyst on the street about where the names go from here. an exclusive with paypal's new ceo, alex chriss, joining me at post nine laying out the plan for innovation at that company. and shares of citizens dropping on the earnings the ceo is here for his outlook. big show still ahead "squawk on the street" is back after this

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welcome back to "squawk on the street," shares of nvidia trading at all time high levels trading back to january of '99 the next guest is the number one chips analyst on the street believing chips are the safest way to play a.i. he joins us this morning, stacy, it's great to see you. >> good to be here >> quick, can we do amd? looking at a six month versus nvidia and the gains are almost -- well, 30% versus 19. what do you think is happening

with amd right now >> people are looking for other ways to play a.i. besides nvidia part of the worry that people have had and the reason is stock is cheap given where the earnings have gone is the numbers have gotten so big so quickly people worry about sustainability and amd to their credit has a road map that seems reasonably credible with products on it, and they did something very smart. they put out some tarts for their a.i. revenues and they said they did more than 2 billion. 2 billion is a low number, they left room to take the expectations up through the year so i think people are getting more bullish p as they get more bullish on the opportunities side itself and amd is prospect within that and people are buying the stock on that, especially as we get into the year and people are waiting to actually see it show up in the

numbers. they'll report earnings in a couple of weeks and we'll see it. >> is that to say others are closing the gap with nvidia itself >> i don't think so. look, to take the amd point of view, remember it's -- if they do 2 billion or 3 billion or 5 billion, whatever the number is, it's actually a rounding error relative to the size of the opportunity. if nvidia does 60 billion this year, that will be viewed as enormously disappointing, right. so it -- there's always room potentially for a second source, right. and i think this is where the amd story has gotten some legs is they don't need to get 60 billion. you figure if the opportunity like this was 100 billion and they got 10% or 5% for amd maybe that's enough. we could have a longer conversation on the rest of amd's business i do worry a little bit that the rest of the business that expectations may be too high

that was true all last year as well, and the a.i. narrative papered all over that, people continue to get excited about that opportunity for them, and if they can take those expectations on the a.i., maybe people look past it in the rest of the business. that's clearly what's happening for them anyways. >> in terms of your price target of $700 for nvidia, you know, that stock tripled last year, your price target implies about a 24% upside, 23% based on today's levels what supports that on a fundamental basis in terms of your forecast of their exposure into the a.i. space? >> well, remember, a.i. is almost all of their revenues, right. data center for nvidia, ballpark 80% of their revenues now. like nothing else at nvidia gaming or auto, it almost doesn't matter for the mo

fundamentals it's all about data center look how much the earning went up, they went up six or seven times, whatever the number is, because of the size of the opportunity and their competitive positioning with the opportunity and everything else. as we look into this year, i think not only is a.i. and everything going main stream but their product road map is also evolving they just launched grace hopper, their gpu, cpu version they've got the h 200, which is the next version of the current architecture in q2 they have black welcoming out in the second half. my guess is as pricing goes up again, i think the numbers have room to go up and as i said earlier the stock itself has gone up a lot. the multiples come down. it is, if you can believe it, the cheapest or one of the cheapest ways to play the a.i. space in the theme marvel is much more expensive

than nvidia, even intel, thiey'r not that different from each other. looking to play a.i. that's the way to go. >> we've discussed that on the air, the multiple contracting with the incredible period of growth when you talk about nvidia's competitive position within the opportunity, you mentioned a number of products but explain what you mean and whether they're unassailable in your view for let's call it the next 24 months. >> nothing is unassailable i think they are still in the driver's seat, they're the vast majority of the sales going into the space. i don't know how deep you want me to go in the different products but they have a current architecture, hopper, the main product is the h100. the pricing for that is probably two to three x the prior generation so a lot of the revenue hasn't even been them shipping tons of units it's been pricing and mix. they have a follow on version to

this product, called the h 200 with more memory and everything incorporated on it that comes out in q2, should get benefits from there and the next generation architecture is black well, that comes out probably in the second half of the calendar year not only does performance go up, they get pricing they used to introduce new products every two or three years. they're going to an annual cadence now. so they have their pedal to the metal going out. they're actually shaping the market, defining the market. every other player in the market is playing catch up right now. they are out there like defining it and creating the market and they're reaping the rewards at this point >> fascinating stacy we'll save maybe some china discussion for next time. >> you bet. >> great to see stacy ragston. >> thanks. boeing shares popping higher on news the faa has completed

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boeing shares back in the green turning positive up 2% on news the faa has completed inspections of select 737 max 9 planes let's get to phil lebeau with the layest. >> reporter: these max nines inspected are part of the 171 that have been grounded until the faa can determine that these planes are safe to return to service. here's what was announced this morning by the faa they picked 40 of the planes said it on friday they would do the inspections. they finished those inspections, now the data is being analyzed all this on a day when the faa administrator will be part of senate committee briefing in private. we don't get a read out in terms of what he tells the senators about the current faa investigation. this comes on a day when dave cal hhoun is going to wichita,

kansas visiting the spirit arrow systems facility remember this facility in wichita used to be owned by boeing, it was spun off in 2005. then it became its own publically traded company. there have been a raft of issues in terms of the work coming out of the this plant over the last several years. it's part of what's addressed by dave calhoun in an employee town hall, swept pat shanahan, the knew ceo of spirit aerosystems look at shares of spirit, they've been under pressure since the alaska airlines incident on january 5th and continue to be under pressure. look at shares of boeing we've talked about this before, guys they deliver 379 max airplanes in 2023. their goal is to get up to production of 50 a month by

2025, 2026, they're currently at 38 that's the game for investors. is there a path to 50? or is it pushed out even further? because ultimately that will drive free cash flow and the guidance for free cash flow in '25 and '26, which the company has given in the past. will they reiterate it the next time they give guidance. >> phil, thank you phil lebeau. still to come here we'll have an exclusive with paypal's new ceo, alex chriss he'll give us the outlook for that business. it's been a rough couple of years. you can see that right there we're back with that how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know.

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diplomatic break through since the collapse of a temporary cease-fire in november it's expected to provide medicine to 45 hostages. donald trump accuser e. jean carroll is testifying today in the second damages trial against the former president he was found to have sexually abused and defamed her last year carroll is expected to take the stand today for two hours before facing cross-examination from trump's lawyers who said in opening statements that she's trying to further her career with her lawsuits against trump. >> the biden administration unveiled new rules today to limit the fees big banks can charge customers who spend more money than they have in their accounts the proposed rule could cap overdraft charges at as low as $3 the current fee averages are about $26 per charge according to bank rate banking trade groups are expected to fight those new rules. david, back to you. >> bertha, thank you

let's move on now. take a look at shares of paypal, that stock we showed you two years ago, it's been under pressure over concerns of revenue growth and marvgins hav given investors pause. joining me since stepping in the role of ceo of paypal is alex kris thank you. >> thank you, it's good to be here. >> analysts don't seem to love the stock right now. looking at a reports, facing competitive pressure a to z, downgrade. oppenheimer, persistent profitability pressure downgrading it, morgan stanley, slower than expected movement. what do you get the -- what do you say to get the companies to

change their mind? >> to be honest, there hasn't been a lot to celebrate the last few years. innovation has been slow the company has been growing but hasn't been putting out real customer backed innovation, i love being an underdog i will take all of that and we'll shock the world. >> you think we'll shock the world. >> we have an innovation day coming out on the 25th >> from the first week i got there, this was not about trying to figure out what to go do, it is clear what we need to do. 24 will be a transition year for us, but it'll be all about execution and starts with innovation so on the 25th we'll come out and have customer backed innovation we'll be rolling out for consumers, merchants, venmo. a good start for this year. >> anything you can tell us at this point >> i don't want you to ruin the

rollout so to speak but when you say you have a clear idea what to do and innovation, any specifics to provide >> paypal hasn't delivered the value proposition to its consumers or merchants over the last few years we have more data. we see exactly what people are purchasing around the world. so we need to make a better value proposition for consumers put more money in their pockets, their mer pants, the ability to leverage a.i. in their conversion rates and then we have to let our small businesses and consumers connect, leverage a.i. driven personalization. >> you believe using the data more effectively for the merchant side can bring, what, higher profit margins? how does this translate? >> we have over 35 million merchants using paypal when we improve the conversion rate it improves their business, our bot time line we're kicking things off. >> you have a lot of data, do

you ever consider selling it in some sort of effective way >> the data is our customers data it's our consumers and small businesses data. we need to leverage a.i. to make it better for them to be able to grow their businesses. small businesses are under a ton of pressure right now. it is hard for good times it's not good times right now we can give them advantage, advertising costs have gone up 2x over the last two years we need to give them the opportunity to leverage the data they have and improve their business. >> when you speak to investors now and it's encapsulated to a certain extent some of the analysts reports as well competition comes to mind, lack of profit margin expansion and/or lack of profit margin, apple pay, buy now, pay later. do you have an answer to these you talk about what's a relatively dominant position but at the same time it seems you've taken on a lot of business without a margin associated with it >> i think we have done too many

acquisitions over the last few years and we've been defocused >> it was one of the things i noticed coming in a few days ago. we have a lot of priorities, we narrowed them down, five key priorities focused on profitable growth you may see us move away from some businesses and really build our energies on profitable growth going forward. >> you used the phrase transition year for 2025 what does that mean? what are you transitioning from and to >> company has been focused on gross revenue and growing our business that's been a good start we need to transition after profitable growth we've organized our customers we're having conversations with our partners and customers around ensuring that we are working towards profitable growth that's going to take time, it's not going to happen overnight.

this is a year we're focused on execution. i think by the time we get towards the end of the year you'll see a different paypal. >> totally different. >> yes. >> those are big words. >> yes the reason i'm here, you look at the size of the network effect we have, over 35 million merchants around the world a quarter of the world's ecommerce we have not taken advantage of the network effect there's. it's about innovation about creating a value proposition it's all about execution this year we are not trying to figure out what to do we are executing on what we know we need to do. >> you have brand loyalty and everybody knows paypal venmo seemed to ascend for some time but that's a perfect example for what happened. you had the zelle competitor above the growth rate of venmo. >> i would say venmo is still the leader of the pack you talk to any gen z or gen x

out there, they are using venmo. we have not focused on profitable growth there. that's the opportunity for us going forward. how do we innovate give our mer min merchants and small businesses the opportunity to grow. >> i was talking to one investor, he cited a statistic, i don't know if it's true, but he said over the pandemic your head count had about 18% growth rate that's a lot of people you added. did paypal add too many people you have about 25,000 employees rights now. >> we did a lot of acquisitions during the pandemic. i said the size was slowing us down something we're looking at right now. but really it's about automation our ability to take a lot of manual process when you grow fast like we did over the pandemic you just throw bodies at things we need to look at the data we have, automate create a single platform for paypal and i think we'll right side the business.

>> does that involve a.i. in a more significant way than you're using it right now >> we have been using a.i. for a decade to ensure that our risk and privacy works well for our customers. we're not using it to enable our customers to grow their business, that's a huge opportunity for us something you'll see on the 25th when we roll out -- >> it's going to be a big day on the 25th. >> it is going to be a big day >> it's the energy from the team i'm so proud from the first week i came in, it's only 100 days ago, the team is focused on the innovations, they're excited to get it out >> are there new tools for you to increase efficiency >> a.i. is a huge lever for us >> the data at the scale that we have allows us to leverage a.i. in a unique way and think about adding value propositions for them. >> finally as a payments company you mentioned all those merchants have a decent bead on

retail and what's going on so how is christmas. >> we had a very good holiday season >> it's continuing frankly to january. i feel good about, you know -- there's two sides, one consumer sentiment is down but they're still spending. >> any winners ands losers >> we saw pretty consistent across, and again, consumers seem to be healthy even though they're skeptical about the future >> speaking of the future we hope to continued to monitor how you're doing on the promises we appreciate you taking time. thank you. >> thank you alex chriss ceo of paypal. shares of citizens financial went into positive territory you can see it there the ceo isoi gng to join us to break down those numbers that's next.

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>> good morning, carl. the release this morning by the december retail sales report allows the national retail federation to calculate what kind of christmas it was, and it was a good christmas not a great christmas. but most of all, it was a normal christmas. i will say the dollar value was up to 964 billion that's a new record but it was up 3.82% year over year in the range of the nrf forecast it was back towards the 2019 prepandemic era after the craziness of the last couple of years. with goods deflation or flat prices, that number is a good number it's just above the prepandemic average so back to normal there, the economist for the nrf said consumer spending was remarkably resilient throughout 2023, finished the year with a solid pace for the holiday season. >> as you know, this number

today is upsetting markets when it comes to the outlook for the fed. it's strong and it's going to cause economists to upgrade their fourth quarter forecast. as well as by the way, the first quarter. so this number put the fed in flux and the outlook for the economy influx but in a good way towards the upside. >> bad news is still good news, it is reflective of what we heard from the banking ceos throughout earnings season that the consumer still remains healthy and is spending at least back to prepandemic levels but, you know, still pretty strong all things considered steve, thanks for bringing that to us. as i mentioned, another big day for the banks with results it of schwabs, citizens financial, the latter reporting a decline from a year earlier to 189 million for the quarter. a lot was due to special items in the quarter here to break

down those numbers in a cnbc exclusive, chairman and ceo bruce van son. thanks for being here. as i mentioned there's a lot of noise this quarter in terms of profits. i want to focus first on net interest income, the profitability metric from loan making you gave some guidance, expecting declines 9% for the full year 2024 do you see it troughing this year if we get six rate cuts as the market is predicting >> i would say one thing that's very positive in the fourth quarter we are seeing less pressure on our funding costs. so as the fed raised rates aggr aggressively, funding costs went up, bank failures didn't help that but net income was down 4% in q3, only down 2% in the fourth quarter and next year we have the full year effect of some of the things that have

happened in '23. but we see an inflection point actually halfway through the year that we should start to see net interest income tick up. we expect economic activity to pick up and therefore loan growth will tick up. so i think a couple of more quarters of hanging in there and things brighten in the second half of the year. >> can you help explain that to our audience for much of 2023 rising interest rates was a tailwind for net interest income it was supportive because wangs were banks were able to lend out at higher rates and weren't responsible for paying out on the deposit costs, deposit betas. when i look to next year, if you look at what the swaps market is indicating, by the middle of the year it indicates we start to reverse that and see lower interest rates how does that provide a tail wind to nii and its ability to

trough in the middle of the year >> when rates are going up in the beginning, banks are asset sensitive because their loans are repricing instantaneously and banks can lag their deposit repricing. farther into the cycle, once the fed stopped in july, your loans aren't repricing anymore but there's still increasing pressure on your deposit costs so that will continue to impact the first half of the year kind of once rates go down, we have certain swap positions on the -- that are costing us money today cost us less as rates go down and volume kicking in, having loan growth going up, that's the other factor in terms of your net interest income. so a little bit will benefit from the swap drag going down but then the volume kicks in this in the second half of the year >> that makes sense. speaking of the asset side of your business, credit quality.

you set aside more in provisions during the quarter you said on the call this morning that cre general office is being carefully managed, losses being absorbed and net charge offs with few surprises this year. but with real estate due, given we're in a higher interest rate environment what are your expectations for defaults across the sector and specifically for citizens >> so i would say, if you look broadly across all of our lending portfolios, feel really good about the consumer portfolios we tend to the lend to the more affluent customers and they're still in really good shape. feel really good about commercial lending, most companies navigated the pandemic well they had good years. they're positioned -- i think they're cautious for next year but they're positioned to be successfully and we won't have a lot of chargeoffs there. it's really, as you say,

commercial real estate that's been the main focal point in terms of potential losses. and it's a subset of commercial real estate. because, broadly, other areas, multifamily and industrial distribution space, that's doing fine it's the office and these and t return-to-office trends that have really turned that market upside down in terms of not having the best dynamics the good news is, we can see what's happening in those portfolios we can see when maturities are coming due we have a lot of great workout people in the bank who are working with those borrowers to try to figure out how to come up with solutions when we might take a charge-off, the borrower might put in some additional money. they'll live to see another day. so that's been a process that we basically manage through in '23. we're going to continue to manage through in '24. i actually think it will extend into '25 rates coming down will help that

a little bit, but my plea to people watching is get back to the office, that would really help the real estate sector. >> well, that is a good message. we're here in the office, so we're helping the cause a little bit here today bruce, thanks so much for your perspective. appreciate it. >> my pleasure, take care. >> coming up after the break, a look at what some are calling a shake up for new york llcs that story is coming up next done go anywhere

welcome back to "squawk on the street". starting this month, secret real estate purchases in new york, they got a whole lot harder to keep secret. robert frank joins us. he explains. >> good to see you new york's governor just signing a law that would shine more light on those secret llcs that are often used in real estate. the new law requires llcs in new york to report to the state their true owners, their dates of birth, and their business address. laws aimed at curbing the use of anonymous llcs to hide the true ownership of real estate for

money laundering and tax evasion. an estimated 37% of all the apartments in manhattan are now owned by llcs. they will now have to disclose their true owners. now, the real estate lobby fought hard against this law, saying it jeopardized safety and identity of wealthy property owners so, governor hochul granted a major concession rather than making these names public, they will only be available to law enforcement now, this change mirrors a new federal law that took effect on january 1st, known as the corporate transparency act, it requires every llc, limited partnership, and other private entities in the u.s. to disclose their true ownership to the treasury department. more than 30 million businesses and partnerships will now have to file, including family offices. now, the fine for not complying could be up to $10,000 or two years of jail time so, guys, a lot of work here for lawyers and accountants. we'll see whether either of these laws on the state or federal level actually are

ef effective. >> i'm curious, though, robert, you've done your share of digging on who really owns things when an luxlc is used for $60, $70 million apartment do you think you'll actually be able to figure out who the owners are if it's only available to law enforcement >> i don't i think they'll be able to connect dots when someone is convicted or they have a lead on someone from the secret file that's disclosed as part of the panama papers or something like that, where law enforcement can trace it but big disappointment to the new york legislator who is said the whole point of this was to shine a light, so that publicly we could know these things so i don't know that much will come of it, unless there's already a legal case against a certain owner. >> so, when i'm reading that big-ticket column in the times or whatever it may be, or your stuff, i'll still be left wondering -- >> it's some lawyer's address that's sometimes affiliated with so-and-so, but we don't know that's probably how it will remain >> that's too bad. i wanted to know >> we all did.

>> robert, thank you robert frank we have the s&p 500 down about 0.64%. the nasdaq the worst performer so far this morning at over a 1% loss you can see it right there kind of a lot of red across the board. not too many outliers, rather than pharma continues to have some strong performance, the likes of merck shares up almost 9% for this year we've got a lot more mket ar coverage for you straight ahead. don't go anywhere. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly.

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good wednesday morning welcome to money movers. i'm carl quintanilla with leslie picker at post nine of the new york stock exchange. today, are the markets pricing in too many rate cuts? we'll talk to one jpmorgan portfolio manager who says "yes," but says to stay bullish either way >> plus, ten months after panic struck the regional banking sector, what do the quarterly numbers tell us about the strength of their balance sheets the ceo of pinnacle financial joins us after posting results >> mortgage demand jumping more than 10% this week, 30-year fix falls to a three-week low. home builder sentiment, a four-month high. we'll break down what that's all telling us about housing market. righ