cnbc. i'm melissa lee with steve liesman along with mike santoli. u.s. equities at this hour look to continue the gains made in the technology. nasdaq is opening higher by 131 points. s&p is adding 119. we are talking about key levels. strong day for semiconductors which many see as the economic indicator. >> apple and semiconductors were a large story yesterday. the largest highest quality mega cap stocks. a divergence again. it does seem as if you had enough of a push there. 4,800 is the intraday high. 4,818 is the all-time high.

we are flirting with the same levels. if you open here, you are in the zone of the closing high. >> nasdaq 100 in particular. already at the high. treasury yields is creeping higher. the ten-year yield at 4.14%. it is amazing the yield and how much it moved in the week. it has the chance of the fed rate cut go down a little the bit and you see the old bplaybok resume in the play to safety. >> i'm interested in the fed rhetoric has clawed back a bit of the optimism out there about rate cuts. i have a chart on that if we can take a quick look at it. how much things changed after the fed meeting. the ten-year cut 38 and now it

is only down by two. the two-year rate has fallen. the disinversion of the yield curve were off the best levels there. the total expectation for rate cuts had been 176 basis points at the top. now it is back down to 147. reflecting what melissa said. then there is the s&p which had a good run, but less than it was before. now mike is saying we have a chance at going back. one more chart that melissa was looking at which is the fed probability which was high as 75% for a march cut and now back down to 55%. the fed has been semi successful in walking back. we have austan goolsbee coming up. >> it helps with the data coming in hotter. >> there is the chart, melissa. 78% probability. it is back down to near where it was before the fed meeting.

that is a concerted effort by the fed to say cuts are probably coming. not as quickly as you think or as deeply as you think. let's check on hong kong. the hang seng index down 6%. following disappointing growth figures from the economic giant. we did see the nikkei rally overnight in asia kicked off by the tech rally in the united states. semis overseas. the nikkei which closed below the 34-year high yesterday and continuing that gain. more developments in the middle east. the fifth coordinated trying against the houthi rebels in yemen following the attack in the red sea yesterday. total ships attacked in the red sea since the israel-hamas war is 35. president biden will continue to strike houthi targets as long as

they are a threat to global trade. right now the price of crude is $74. we were down below $70 and this whole thing has been worth $5 a barrel plus or minus? >> so much slack in the oil markets and inventories. all of these issues off the p pandemic has a lot of stuff around and that is helping the issue. it is not tight any more. >> i am focused on the twin peaks which is the surge in inflation in the 1970s, the fed cuts rates, inflation comes down and it surges back. we have the single peak. what was one of the things that happened in the '70s was the oil embargo. we are at a place with massive disruption in the middle east, but we are not getting it. it is amazing to me.

i don't know and one thing our coal here has been following is l lori ann says it is not just the price of oil. there will be a reversal, but it won't be dramatic or sustained. >> that shipping cost increase is a big percentage move off the lows. if you look at it going back to the pandemic, it is nowhere near where it was. >> is the shipping industry really oversupplied capacity? certainly in the trucking business. new this morning, the biden administration announcing it approved debt cancellation for 174,000 borrowers. the total amount is less than $5 k billion. the biden administration has now canceled $136 billion in student

debt for more than 3.7 million americans. the senate and house approving a stopgap bill to prevent the government from shutting down. it will fund the government through early march. they voted early because of the snowstorm in the area. amtrak cancelling some trains along the northeast corridor were canceled yesterday leaving travelers with limited options. >> are our three favorite anchor fans in the air right now? do you think joe took a day off to go cross country skiing in. >> the socks up to the knees and baggy pants? do you think he is in the air? >> he is in the air or in a spa. >> sitting by the fire. in other corporate news,

shares of irobot malfunctioning this morning down 30%. the european union competition regulateor intends to block the amazon acquisition of the company. amazon agreed to buy the company. how is that -- it's a vacuum. >> a lock on the robotic market? >> it's a vacuum. it was going to buy the company for $1.7 billion in 2022. that price was brought down to $1.2 billion. i don't know if you read this in the paper. this will drive the company out. >> business. >> the whole anti-competitive thing has gone too far. we know we have some concentration in the industry which allows prices to go higher. a vacuum maker? >> it is 1/1,000 of the amazon

market cap. if you dominate one market. >> they will have the lock. the monopoly on the auto vacuum market. >> irobot. we will take over the world with robots. the company is a vacuum company all these years later. >> they have robots with a nuclear spill and they look for people or other things and clean up. >> wait until vacuums take over the world. this may be the poster child or anti-competitiveregulation. >> they got the mgm deal through. it was a challenge. meta going big with nvidia's ch chip. mark zuckerberg says it will

build a massive infrastructure. that will include 350,000 graphics cards from nvidia. that means billions for nvidia. analysts suggest nvidia selling for $21,000 each if meta werie paying at the low end. nvidia shares at the all-time high and up again this morning. shares of amd could a very good run. they are dominating the action in semis lately. check out shares of apple. stock rebounding following the upgrade by bank of america and pre-orders for the vision pro headset. the new device won't have a few popular apps. youtube and spotify will not offer apps for the headset. they are instructing customers to use their web sites instead.

>> is this one of the situations where people bet against apple and cook and end up being wrong? it doesn't seem it is exciting. >> it is expensive. >> it is a low-production run. >> the big thing i heard from somebody and we had this on air is the idea when you are traveling and it is a really good screen to have when you are working in your hotel room or whatever. i guess the kids -- is that something you are excited about, mike? >> i won't say i am. i'm a late adopter. i heard people who tried it. it is reremarkable. macy's will cut 3.5% of the work force which is 2,400 jobs. it will close five m mall locations. the last day of work for

impacted staff will be january 26th. the stores it is planning to close are in virginia, california, hawaii and florida. macy's shares down 1% today. this seems to happen every january? almost. >> it may be a little more than the regular seasonal. citigroup reducing its head count. managers in the bank's market risk and investment firms were told they were being let go. the ceo jane fraser had a conference call yesterday talking about cutting 20,000 jobs over the next two years. it seems like further rounds of what we have known is a long-term trimming down. >> the bull case for citi. >> a shrink to grow. >> i don't know if this is the right way to do it, but it seems

if it is every week we have a new citi story of them laying off. is it better to get all of it off at once? >> it is an ongoing programm. the traders and bankers seem to talk to people and saying we got the memo. it is a new story each time although it is part of the staff reduction campaign. >> did we know about that? >> i don't know we knew it was coming now. >> the aggregate number. here is the big plan. i have to think, by the way, it is undermining in terms of morale in the company. >> who's next? >> what's next? >> we have too many people. >> i feel like we keep coming to this thing. coming up, bitcoin one week after the s.e.c. approval of the spot bitcoin etfs and tech stocks leading the charge on wall street. we will have the market discussion next. "squawk box" is coming right back.

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i think he's having a midlife crisis i'm not. (we did it) you got us t-mobile home internet lite. after a week of streaming they knocked us down... ...to dial up speeds. like from the 90s. great times. all i can do say is that my life is pre-- i like watching the puddles gather rain. -hey, your mom and i procreated to that song. oh, ew! i think you've said enough. why don't we just switch to xfinity like everyone else? then you would know what year it was. i know what year it is. now for a look at the fed, rates and more. let's bring in matt miskin at john hancock and matt disock at merrill. good morning to you both. i'll use last names as well, of course. matt disock, we were talking

about the market expectation for the fed and what it might do and the back up in yields and the prospect of the rate cut in march. where do you stand on what the fed is planning? >> obviously, it has been interesting. we are seeing a powell pivot 3.0. that's great news. his flexibility and fmoc flexibility is a good thing. you feel like you are getting whiplash. to change what you are doing when the economy and market demands it makes sense. it is clear they shifted on the rate cuts and they weren't talking about it four months ago. importantly now on the quantitative tightening side, they are making sure liquidity is not a problem. they told you that in the minutes. they followed up with fed president logan who had managed the program before talking about

it. now it is getting more in the mainstream press. at the end of the day, the fed will not be a scapegoat for recession. they want to play for the soft landing. they believe disinflation trend is in tact. the employment market is not too hot. 170 million people in the labor market. 1% move in unemployment. that is 1.7 million people out of work. they will play for that soft landing. they have a chance. they will try to stick that landing. that is a possible move and likely base case in the scenario. that pivot on the liquidity and rates is here. that should hopefully provide a soft floor for risk assets. >> just quickly, when you say base case, is it that it gbegin in march or is it beginning to ease? >> the team on the bank of america research side sees they start to taper qt in march and

finish it off finally in june. it seems like they feel risk an versus. they do not want to be blamed this year for a recession. it seems like they will err on the side of caution. an earlier taper and earlier end to the forecast. >> matt miskin, how does this filter in the view for the asset markets? the economy is still continuing to out perform expectations when you look at retail sales and the weekly jobless claims. if that is the economy we have, maybe you don't need the fed to go easier. on the other hand, they are aware of some of the late cycle dynamics and they don't want to be too restrictive. >> steve mentioned it this morning. you backed off some of the pivot party momentum that happened at the end of the year. we do think the fed is unlikely

to cut in march. it is just the data looks too strong. the q, it is where they start w the balance sheet. earnings season for q4 is not strong. the estimate is 8% for the beginning of the quarter. we are coming in negative 2%. negative 30% is what has been reported. 2% is what the analyst community is looking for here. there has been a huge push looking for the earnings prgrow. it is kicking the can. q4 of 2024, expect to see 20% earnings growth which sounds great, but that will be hard to do. there is more optimism. you have to lean into the quality factor and looking for high roe and good balance sheet companies. earnings growth slowing and the pivot from the fed helped cause markets to recover and rally in

q4. you want to be more defensively positioned. >> matt diczok, what is going on with corporate spreads? in general, it seems as if financial conditions have tightened with the fed rhetoric. one part of the market where things have not tightened is corporate spend. what is happening in part is the corporate market is kind of baking off the default concerns that were linked to recession, but also a bit of a reach for yields right now. what is happening in that space? >> that's a great question. investment grade credit spreads. clearly the market is noticing and has seen the fed pivot. any concerns about the default cycle changing are falling to the wayside. the fed is concerned about not

being scapegoated for recession. very interesting that you picked up on that. i want to come back to matt miskin's excellent point. i was fortunate to have howard marks on the wacall. one insight is the second level thinking. the fed is pivoting with a soft floor, but at the end. day, the market hasn't turned on t that. >> that probably explains the sluggish start to the markets so far this year. guys, we have to leave it there. matt and matt, thank you. we have the interview with the chicago fed president austan goolsbee that is at 8:30 a.m. eastern time. first, the white house awarding millions of dollars in grants and funding to improve ev charging infrastructure. this story breaking just in the last hour. phil lebeau has the details

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the white house wants to give the ev industry a charge in the form of millions of dollars to improve infrastructure. phil lebeau has more on the story. phil. >> reporter: melissa, this is part of the white house ongoing push to expand ev adoption. a big part of that is you have a lot of people when it comes to buying an ev, i can't do anything if i want to drive it long distance with charging anxiety. the charging network in the countr country stinks. the public charging structure.

aside from the tesla network, there is a lot to be desired with the public chargers. the white house today is saying it is taking a number of steps between today and yesterday. here are the steps. first of all, it will come out with new charger tax credit rules if you want a charger in your home. they are putting $46 million into ev worker training. not just in work on ev batteries and electric vehicles, but chargers and networks.chargers,e white house will put 14mi$149 million into the network of public chargers. the public chargers in the country with wildly inefficient in terms you sometimes stop and you get one that works and a lot of times you get one broken or slow to charge. people generally are not happy with the system overall. 170,000 public chargers in the country and you look at shares of ev go and charge point.

keep in mind the biden administration is pushing to have 500,000 chargers in the country. 500,000 chargers is great, but 500,000 chargers is not great if they are not working well. they have to be up to speed. that is a big hill to climb by the end of 2026. look at tesla and rivian. the market share for electric vehicles in this country last year was 7.2%. that is expected to get closer to 9% or 10% by the end of this year. we will hear from tesla with the q4 results and guidance for 2024 next week. guys, back to you. >> the public perception, phil, with the performance in the cold. we saw pictures from chicago with the tesla graveyard. >> reporter: that is not a surprise, melissa. that should not be a surprise.

that is not just electric vehicles. any battery-operated equipment will perform leaver if struggling to perform in super cold weather. that should not come as a surprise. i saw the stories and i thought who told you a battery would work well when it is minus 5 outside? that is the nature of the electric vehicles. >> sure. when weakening demand is there, it doesn't help. phil, i want to get to the headlines of spirit. reuters is reporting that spirit is pushing jetblue over the block the merger urging jetblue to exhaust its legal options to complete the deal. it under sscores the heads line with the spirit options. >> reporter: you said limited options. melissa, they don't have a lot of good choices. drop it all together and look at the finances? we have dock uumented this and

will talk more next hour how quickly they can run out of cash and file bankruptcy. there is the possibility they could face liquidation. spirit is not planning on liquidating. the best option at this point is to say to jetblue appeal. if you appeal, we have a shot at this coming together. if you are jetblue, you are looking at this saying okay, this spirit is worth far less than originally. we got shot down with the northeast alliance and shot down the first time on merging with spirit. do we think it will succeed on appeal? >> all right. phil, we look forward to the next report next hour. coming up, lawmakers agreed on a deal to avoid a shutdown, but still big clouds hanging over capitol hill like taxes and massive debt and the race for the white house. we will have a panel to tackle those issues next. as we head to break, here is

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a bill to avoid a government shutdown heading to president biden's desk for final approval. emily wilkins joins us now with how lawmakers agreed on the deal. apparently it was snow, emily, right? >> steve, there is nothing that lawmakers love more than making sure recess is protected. the weekend is protected and friday is protected. that definitely did contribute to getting over the line. you know, now we avoided a shutdown, the big question here is whether congress is actually going to finally pass the government funding for 2024 rather than continuing under last year's funding as they have again done. the new deadlines are march 1st and 8th. they could just continue last year's funding at current

levels, but if they do, it will trigger the 1% cut across the government. it is a scenario created by lawmakers least year to incentivize them to get the 2024 spending bills passed. the 1% would khurt defense contractors. they still have a way to go before the spending bills. house and senate agreed on the $1.62 trillion, but they need to agree on each agency and the thousands of federal programs are going to receive. remember, these spending bills that congress has been fighting over now for months only make up about one-third of all federal spending. yesterday, the committee took the first steps to address the two-thirds. the house budget committee formed a commission to find ways to reduce the $34 trillion debt. that includes looking at the mandatory programs. they are hoping this debt

commission and financial commission can be added to the funding bills, but at this point, there is still a huge question for whether the government is going to be fully funded after march 1st and 8th or if we see congress kick the can down the road again. guys. >> emily, you may remember 1983 when a guy who would later become the chairman of the federal reserve, aloan greenspa trying to fix social security. actually it was successful. it put the programs on the course for several decades. is this new commission serious like that or is this just one of those we're going to study that and ignore the results. >> i think that is a great question, steve. this is not the first commission to look at the federal debt and mandatory spending programs. i think to the certain extent,

there is more rj urgency. i was chatting with jodi arrington. he said if you look at the payments on the federal debt, that doubled in the last three years. that has put pressure on the lawmakers. they want this to be a bipartisan evident. the huge thing we are facing right now is if you start talking about the mandatory programs and we have to look at social security and another thing you hear from your political opponents and this is the same for republicans and democrats, is they suddenly come up with political tactics and people want to end social security. it has become a third rail in politics right now. of course, that makes any serious work on reforms more difficult. >> emily, thank you so much. >> joining us now is former congresswoman donna edwards and also republican jed hensling.

is this the new way of business or is this impossible to get away from the hijinks that goes on with the brinksmanship in congress right now? >> i hope they will be able to come up with, you know, they have agreement on the top line number and i think they should be able to come to agreement on that. the challenge, of course, is in the house of representatives. this is why i believe that the measure will start in the senate and move over to the house where it leaves little for negotiation. just like the stopgap bill, it depends on the group of republicans and all of the democrats in order to pass it. i think that will be a real challenge for the republican leadership, but just like this

stopgap measure going to march 1st and march 8th, it has to get done. frankly, they are running out of days to get it done. even for march 1st and 8th, you throw in the presidents holiday and you are running out of legislative days. >> jed, i like to watch a lot of animal documentaries. this congressional thing reminds me of when the two bucks or bears are fighting and each going for each other's weak point here. handicap it. the weak point on the republican side is they don't want a shutdown because they feel it is bad politics. the weak point on the democratic side is what? the ukraine funding and the funding for israel that president biden wants. who has the weaker weak point that is more vulnerable? >> first, i was wondering where you were going with the nature

documentary. now i know. first, if i could, i would say that when you say is this the new way to do business, you know, steve, i push back. this is the old way of doing business because it is the exception. you get all of the individual appropriations bills done. i do think it is smart of congress, it doesn't guarantee success, to have this, if you will, sort of damacles hanging over their head of the 1% cut. what really matters is the fact you have the appropriators in both bodies and what you have what i term as are national defense hawks. you will find those. those who want to defend president biden and what he is trying to do for ukraine and you also have strong contingent in the house of representatives. those two forces combined really

put a lot of pressure to get a number of these bills done. i don't know if you get each individual done, but to use the vocabulary of congress, ultimately you can see a number of mini buses where they group two or three or four of the usual appropriations bills together. when you ask me, you know, who is in the stronger position, that's a tough question. i can tell you this much, speaker johnson wants to avoid this shutdown scenario. histo historically, it does not work out well for republicans. i think president biden knows as he is looking at an incredibly low approval rating and part of that obviously is connected to his conduct with foreign affairs. they both have their pressure points. who has the better side? i'm not sure i know. >> jeb, i should have asked this

more ysuccinctly. if you want the deal from the carmaker, you have to walk away. are the republicans willing to walk away from ukraine? >> i think the republicans are saying security starts at home. they are not willing to walk away from ukraine if they get agreement on border security. that appears to be working through the senate. the question is will it be good enough for certain members of the house. i would say this much within the republican party, particularly within the house, these are two inner connected issues. you can't do one without the other. assuming border security is there, there could be ukrainian security as long as there is border security for the u.s. >> don donna, the approval ratis connected to the border and

border security. is there a way that the president can turn that around or is that just going to be the reality going into the election? >> the way to turn it around is for the house republicans to accept what senate republicans have accepted which is a really strong border bill. it is like house republicans don't want to take yes for an answer. they have been screaming about the border and you have a bipartisan negotiated approach to the bore demeder and funding ukraine and israel and funding for taiwan which will pass the senate. the question is are there enough republicans, and i think there are to get on that bill, to move it through. i think republicans in the house are in a bind on this one because they asked for it and they got it and now they just have to say yes. >> we have to leave it there. >> if i could, there's not a bill yet. you know, if in doubt --

>> there will be. there is adonna, the devil is in the details. we have will see what happens from the senate before that determination. i would say democrats had an opportunity to say yes under president obama when they had the presidency and senate and the house. they could have moved that legislation during that time period as well. t unfortunate unfortunately, it is a political football. >> they are playing us out. thank you, donna edwards and jeb henserling. we never have enough time. >> thank you. coming up, what could turn the tide for the energy sector in 2024? we have a few names to watch. nelson peltz makes his case to be on the disney board. what can reanimate disney

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the energy sector remains under pressure several weeks into the new year. pippa stevens has more. >> it was the second worst sector last year. allocation hovering around the lowest in three years according to bank of america. the energy etfs and mutual funds have seen 11 weeks of outflows. they are on track to post the year over year earnings and revenue declines from the 11 s&p groups. across all sectors, analysts are bullish on energy. to look for names that could be set for turn around, we used the cnbc pro screener tool to filter for stocks that trade below the average multiple of 11 times forward earnings and more than

10% upside based on price targets and 5% below the 200-day moving average. marathon oil making the list alongside halliburton and chevron. energy is an attractive multiyear allocation and the use of cash flow and stock buybacks and dividend hikes will bring investors back to the space. in the near term, there is a lack of up sside catalyst. nat gas is tumbling. why enter the space? >> we were talking about the red sea impact on the market with the slack in the system. china is on the downswing and so much oil in the united states to offset any disruption. >> the u.s. is at record production levels and we have spare capacity from saudi arabia and uae. it is important to look back to what happened when russia invaded ukraine. oil spiked above $130.

it did not stay there. this time around, some traders learned and will wait to jump in until we see meaningful supply disruption. >> pippa, is this why you own verticals? don't refining margins increase with the the price going down? are you better off playing the integrated rather than the singl single names? >> that is one way to look at it. there is certainly sensitivities. you can look at the mid stream players. refiners are tricky. right now, it is doing pretty well with diesel above the his t historical average. >> lee said to me, the head of exxon said i've been in refining 30 years and every one is a lousy one.

>> pippa, thank you. coming up, corporate report cards from netflix to tesla and p&g and 3m. what investors should expect when it numbers pour in next week. "squawk box" is coming right back. ♪ you were always so dedicated... ♪ we worked hard to build up the shop, save for college and our retirement. but we got there, thanks to our advisor and vanguard. now i see who all that hard work was for... it was always for you. seeing you carry on our legacy—

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welcome back to "squawk box." a big week of earnings ahead. united airlines, netflix, tesla, ibm, and dozens more scheduled to report results. joining us for a look at what to expect is nick raich. nick, great to have you with us. >> good morning. thank you for having me. >> we had some earnings come in from banks and financials, but what are you expecting from the next batch out next week in terms of revisions and just, you know, whether or not they're going to be. >> we looked at it, we have just under 75 companies reporting in the s&p 500 next week. what we looked at is their revisions last earnings season, about half of those companies had their estimates cut after

reporting by about 1.5%. our bogey for next week is we want to see less than half of them cut estimates that would be an improving trend by less than 1.5%. if they can do that, that's going to put us on the path for imp improving earnings expectations. that's what the market has been anticipating since october of last year. that's what we're hoping for, that we measure next week. >> do you think that this will be an earnings season where we're going to see full year outlooks raised in the end or do you think companies are going to toe the line and play cautious? already, as you mentioned, earnings estimates have been revised lower in general by analysts. so the expectations are lower. do companies take that and say, you know what, let's keep it there or are they going to raise, do you think? >> we don't think they're going to raise. the market has been pricing that they're going to raise. we don't think to stay on improving path of earnings expectations since we saw estimates being cut at increasing rates last earnings season falling by 2%, if they

only fall 1% this earnings season, that's positive to us. that's an improving pattern. that's what we need to see consistently to have a sustainable market. we don't think we need to see raised estimates for stock prices to still go higher here. they have to be cut at a lesser rate than last earnings season. that's what we're trying to hope and measure this earnings season. >> nick, a lot of focus on exactly where the earnings growth is coming from. the largest stocks that were, you know, accounted for most of the upside in the market last year, their valuations were lifted, but they also seem like they're going to be driving the majority of the absolute dollar value of profits this year. where do you see the distribution shaking out? >> yeah, a lot of people think they're in a bubble, but they literally last year had some of the best possible revision momentum there was. they like nvidia, which was phenomenal. the growth is still coming from artificial intelligence. one of the earlier reporters last month was micron technology

and they raised their estimates by 50% last month. so one of the earlier reporters. so we're definitely seeing growth still with anything with regards to artificial intelligence and that's still a business that we think is, you know, in its infancy, early innings. there is a lot of room to run up with a.i.-related names. >> in terms of sectors with the lowest expected growth, nick? >> you know, the lowest expected growth where you would think that's going to be in the defensive areas of staples, healthcare, utilities. the healthcare was beaten up stock-wise last year. but that was where the lowest growth is. if we see any kind of trend where estimates get at inc increasing rates, those will be cut at lesser rates. that's a good thing if we go that path. with the markets anticipating is not that. the market is anticipating earnings expectations and the fed will have a hat trick.

>> nick, thanks. >> thank you for having me. coming up, spirit airlines left scrambling to avoid bankruptcy after its deal with jetblue is blocked. we'll look at some of the options for the low cost carrier. later, will the fed cut sooner rather than later? an exclusive interview with austan goolsbee at 8:30 a.m. eastern time. don't miss that. s&p futures indicated up aut bo half a percent. "squawk box" coming right back. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis, help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley. (ella) fashion moves fast. help you find and unlock setting trends is our business.

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good morning. stock futures rise as wall street tries to build on the tech-led rally. a breakdown of what to watch is straight ahead. kicking the can down the road again. a short-term funding extension. we'll look at what comes next. up side versus risk in the internet space. mark mahaney talks about his forecast as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm mike santoli with melissa lee and steve liesman. joe, becky and andrew are making their way back from the world economic forum in davos. take a look at the futures this morning. looking to build on yesterday's rally, which was led by the nasdaq, is at a new record. you see the nasdaq 100 futures

up another 139 points. s&p 500 half a percent higher at the moment. that would basically put it in the zone of an all time closing high if we did finish there. the dow indicated higher by 150 points. treasuries, firming up in yield, i would say. 417 the overnight high in the ten-year. you see it down to 4.13 or o, kind of checking back to roughly the levels seen close to the wake of the fed meeting in mid-december. two-year note yield jumping, 4.36, revising outlook on fed rate cut pace this year as well as some pretty good economic data on retail sales and weekly claims. >> i think we're maybe feeling out a new range here, right? maybe this is the top of it. i forget how low we went on the ten-year. 3.80. that's what the bond market does, right? kind of, like, tests out a low, tests out a high and settles out. maybe somewhere in the -- >> people are really watching

4.25 thereabouts. seems like the upper end of the range, yeah. a quick look at crypto this morning. that's been on a slide for about a week. it is bouncing this morning, see bitcoin up about 1.2%. and new this morning, the biden administration announcing it has approved debt cancellation for another 74,000 student loan borrowers. total will be less than $5 billion. the announcement did not specify when eligible borrowers may expect to see that relief. the biden administration has now canceled more than $136 billion in student debt for more than 3.7 million americans. the senate and house both approving a stopgap bill to keep the government from shutting down. the bill will now head to president biden's desk for final approval. the deal will fund the government through early march, both chambers accelerated votes because of a forecast for snowstorm on friday that could leave lawmakers' departure for the weekend snarled, delayed.

the head of public policy will join us later. let's get to dom chu with a look at this morning's premarket movers. you're going to golf in the snow or did you put the clubs away for a little bit? >> i've been known to golf in the wintertime, but not when there is a tundra on the golf course. so you just can't basically hit anything and it will damage my golf clubs. steve, melissa, mike, thank you very much. we'll kick off our friday morning movers with a check on the plunge. plunge in shares of irobot now, down 38%. nearly half a million shares of premarket trading volume. this is the maker of home vacuum robots and other consumer connected devices. it seems less and less likely to be able to complete its deal to be bought by e-commerce and cloud computing giant amazon. according to a report from "the wall street journal," european regulators have informed amazon its pending deal would likely be rejected. so, if there is no bid there, what's the price going do? it is going to drop 38%, $14.55

the last trade there. on our side of the atlantic, analysts at deutsche bank have come out with a slate of their top picks in food and beverage, quick service restaurants, that sort of thing. they named chipotle mexican grill, domino's pizza and starbucks as part of the slate. they like chipotle's initiative to drive traffic and strong relative pricing power for consumers. for starbucks, they like trends in same store sales. weakness reversing and sentiment will be shifting more positively as a result of that. for domino's, they like the discount valuation relative to historical averages and its steps to improve same store sales growth domestically as well. chipotle, domino's and starbucks in focus later on today. we'll end with shares of draft kings, which are higher by 1.5% right now, just about 25,000 shares of volume. analysts at stifel are upgrading the online betting and sports book operator to a buy rating from a hold. they upped the target price to 45 bucks from 40. they cited recent pullbacks offering a bet eter entry point

so mike santoli, gains there, it is already up pretty big, 182% over the last year. of course, playoffs and football and everything right now. >> exactly. a busy weekend there. doesn't look like a whole lot of pullback on that chart. but it was much higher in 2021. dom, thank you. let's talk markets. joining us, scott crohner, head of u.s. equity strategy at citi research. good morning. wondering about your headline read on the market action so far this year. it seemed like we finished 2023 pretty much everybody on the soft landing side of the boat. things were going right, we're going to have a friendlier fed with peace time rate cuts and economy still good. we have a pretty resilient market here, mostly the big growth leaders that have been doing the job for the indexes. how are you approaching? >> well, so, mike, the way we have been approaching this is on the heels of the q4 rally, we have been expecting a pullback

nifr in the first part of this year. we thought around the q4 earnings period which we're just now getting into. essentially we still think that your lead indicator here is ten-year nominals and that's a focus of what the backup in rates that you alluded to earlier, i think that will be part of the narrative for why you pullback. you're seeing that in equal weight s&p, but to your point, the nasdaq and megacap growth names have reasserted here, we remind that in that case, you know, while we do get focused on interest rates in the bigger macro picture, you have fundamentals and the fundamental growth story for these companies looks like it is beginning a little bit of a tailwind here recently. that's keeping that part of the market, you know, up and running. so, from a bigger picture perspective, we're still of the view that the main theme this year is a broadening beyond that megacap growth leadership. we think it unfolds as we move closer to that fed pivot point, which is, you know, still somewhat of a discussion point. we still think it is, you know, early summertime frame.

>> there has been some backsliding, obviously in that broadening out trade. you mentioned the equal weight s&p has struggled a little bit, but only down 2.5% or something from its highs. i wonder if you feel like the mark et is going to have enough conviction about the path of the economy and andinearnings for t average company for the more comprehensive, inclusive rally to happen. >> think about the playbook, we want to get detailed on it. we're using a higher estimate for the s&p next year, somewhere around 245. i should say for '24. now, within that we have been saying that if we go through the q4 reporting period, we ought to expect bottom up consensus to come down. and historically it is not a surprise to see in this time of the year full year consensus come down by as much as 5%. right now bottom up consensus is just below our 245 estimate. again, if you marry the forces at work here, bond yield backup on the heels of the strong q4

rally, some softening in earnings expectations as managements continue to express caution regarding the macro outlook, on the heels ofthe soft landing euphoria that kicked in, that's all giving us room for pause. but, again, we're very clear here, we want to be a buyer of any pullbacks, particularly on the more economic sensitive side of the ledger, so there we want to continue to hold growth, we're overweight tech and have been for some time now, but we want to marry that with positions in more economic sensitive sectors, we have been overweight industrials for a while, we recently lifted financials to an overweight. so we're playing this barbell here between growth and cyclicals as a way to position particularly on pullbacks. >> scott, i don't know if you've been thinking about this, but this is a period of declining inflation. and you had revenue growing up with inflation the last several years, and now maybe revenue is not the top line is not growing

quite as much. how should investors evaluate companies? is this a time when we might see either a, declining margins because prices are not going up as much, or could you have disappointments on the top line, but companies still doing well when it comes to earnings? >> it is a good question. and we have been suggesting be careful what you wish for as you get this declining inflation scenario. essentially to your point, margins is an ongoing discussion point, but if you look at '23 results, we saw and navigated a fair amount of margin decline. but you can get stronger top lines and so forth. so, what we have been suggesting here is it is going to get more idiosyncratic in terms of this accelerating inflation impact. we remind on a couple of factors, if you look at nominal gdp, it is more closely tied to sales growth, real gdp has a

mixed connotation or connection to underlying s&p 500 earnings. so your point is spot on, the way we're suggesting, there is going to be volatility. in fact, you see more volatility in the markets when the fed is in an easing mode than when it is in a hiking mode. we have to be prepared for a lot of the more -- what we call idiosyncratic behavior as we navigate what has been -- in our view a fundamental headwind from the stronger inflation reads of the past year. >> yeah. could stay interesting in that case, scott. appreciate the time this morning. >> you bet. coming up, the rise of what's called new collar workers. highly skilled employees searching for jobs in the top half of the wage scale, but you don't need a college degree for the job. we're going to talk about the trend after the break. and late, pimco's head of public policy, say that ten times fast, libry cantrill will ins tjo utoalk about the short-term extension and what

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yale university lecturer, cnbc contributor. i'm skeptical of new phrases. but i kind of read the notes on this and maybe i can be convinced. new collar. what is it? why do we care? >> new collar, it is not quite that new. >> 2016. >> 2016, ginny romney coined the phrase to say there are a whole lot of jobs out there for which we have been sort of automatically saying you need a college degree, but you really don't need a college degree. you do need some sort of training, but not necessarily college degree. she coined this idea of new collar and a lot of other companies now are going into the same direction, and what they're doing very often is they create these things that ibm started again with this, with apprenticeships, you don't have to have the college degree, you do need to get the experience, we're going to bring you in and we're going to give you the training. it actually, by the way, steve, goes even further back than apprenticeships because if you go back even another almost

decade to 2008, we have what were called return ships and goldman sachs was the first to create returnships. >> what's that? >> a slight difference. returnships is for people who had a gap in their work resume. so it was mostly for moms who had been at home who wanted to go back, military veterans who had a gap on their resume. and whole bunch of companies have come in to bring these people back into the workforce. there is a lot of these organizations like path forward and they're bringing these women back and it has been hugely successful. and i think that that paved the way for this new collar, which is the idea that we don't necessarily need to have that college degree, particularly when you guys think about the level of student debt that we have got out there, the fact that we have got students who are coming out of college who aren't trained for the particular jobs that they might be going into, and there is research that shows that people are coming out of trade schools

and are actually doing better in terms of finding work in the fields. >> let me give you the other side of this story. >> sure. >> i'm not sure i'm right about this. i'll give you what i think is the other side. you see companies recruiting people without college degrees into jobs. and all the companies want to do with these jobs ever is automate the jobs and get rid of them, which leaves the employee spectacularly unprepared to move on. what we know is that the college education for whatever reason we're not quite sure of prepares you for a life with a lower unemployment rate, in part because you're perhaps you have a better network, so you get rid of the college thing, yeah, you go get a job, maybe you milwaukee amake a good number getting out of school, but for the rest of your life, you're spectacularly unprepared. >> i think you're 100% right as of this moment in time. think about where artificial intelligence is going. and it is not just coming for those jobs. it is coming for everybody's

job. it is going to come for the college educated jobs as well. you know, another point, though, that you're raising there about this artificial intelligence and outsourcing the jobs is you actually need the people who are going to understand how to do that. and one of the things i find curious is technology is moving so quickly, and, you know, now we have all these new job categories like job category of being a prompter to prompt, you know, chatgpt. >> that's a good job, right? >> it sounds like a cool job, yeah. there are jobs you're not learning in college anyway that you are going to need to learn on the job. i think that the world is changing and we'll see. i think you're raising a very good point, certainly historically you're absolutely correct. >> the other side of that argument is that there could be more velocity in terms of how you switch jobs if you need online training as opposed to an expensive four-year degree. if it is an online course that

keeps you from taking a more technical job, it is easier to retrain yourself in get to the next step. >> i'm going to disclose myself as very old school in my thinking about education. i'm really in favor of a broad liberal arts education. >> i agree. >> science and literature and math and all that stuff, because you don't know what the future brings, and it is adaptability, ability to change, and the other thing that really kind of makes me kind of pisses me off is companies want to shove down in terms of the public the training of their workers. they ought to own it rather than shove it down on to the public -- >> isn't that some of what has changed here, the employers wanting to have somebody who is prepared for that particular job, and then you are going to grow into it. >> they are doing the training. can i make one other point, which i think is really important, which is when you look at who doesn't have a college degree, and, by the way, i love my liberal arts degree. it is awesome. i recommend it.

not everybody has access to that kind of education. and if you look at the people without a college degree, disproportionately black and hispanic, and these are people who have been cut out of all sorts of job opportunities simply because they don't have that bachelor's degree and now the whole world opens. there is 70 million people, adults, without a college degree. and how amazing is it that we can open up all of these opportunities, we have a tight labor market. >> i'm sold on that. >> and all these other people. >> you wonder, is this a functioning part of a tight labor market where, you know, you don't have to ask for as many credentials? you can't. you can't fill the position. >> i think there is going to be -- it will open up opportunity for all sorts of people who have been blocked out until now. so as much as i love my liberal arts education, i think that in the real world this is really a really interesting and positive -- >> i'm going to counter here, which is this, i think -- i said

this already, to get that low unemployment experience over the course of your lifetime, you got to have the degree. some college doesn't do it. it is having the degree that gets you to that place where you experience that lowest unemployment rate. some college looks a lot more like high school than no college. >> that has been the case. >> maybe that's what joanne is here to tell us. you can get and have a better experience out there through this new collar type worker, where if they're going to train you, they're going to train you. >> this can be generational change. if one generation can get that good job, because of online focused training, the next generation may be able to have access to that college. >> there was a halcyon period in the '50s where people got out and did union jobs and those sorts of -- it was a ticket to the middle class. >> you also have chief executives who didn't go to college back in the '50s. not everybody went to college back then. >> i think we solved most of the

problems of the u.s. labor market right here with joanne in six minutes. >> amazing. >> thank you so much. >> that's what i'm here for. >> good work. coming up, what's next for spirit airlines after its blocked merger with jetblue. phil lebeau joins us after the break with the latest. and earnings out from slb reporting earnings of 86 cents a share on $8.99 billion. that's better than analysts had expected. also raising its dividend by 10%. we'll be right back. >> announcer: time now for today's aflac trivia question. what is the only state to have its east and west border defined by two rivers? the answer when "squawk box" return s. coach saban, this goat done took over our office. and he's using it to send out medical bills. good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time! aflac! because aflac gets you money to help close that gap!

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today's aflac trivia question. what is the only state to have its east and west borders defined by two rivers? the answer, iowa, the missouri river defines the west, while the mississippi river defines the east. travelers earnings are out. the insurance giant smashing

adjusted profit of 701 a share. they expected 509 per share. premiums came in as expected, $10 billion. the company seeing big increases in homeowner and auto premiums. that stock is up by almost 7% here premarket. reuters reporting spirit airlines is seeking to convince jetblue airways to repeal a decision by a federal judge to block the tie-up between the sixth and seventh largest u.s. airlines. phil lebeau joins us with a look at what could be next. phil? >> melissa, what's next is what just came from spirit, within the last minute. the company doing a prerelease, if you will, on its q4 results. we don't have the earnings per share or loss per share that is expected. we can tell you the company says that the q4 revenues, because of strong demand at thanksgiving and christmas, came in at the high end of its guidance. as you look at shares of spirit, which have basically been cut in half in the last week, keep in mind that they are exploring their financial options, that was reported by the journal yesterday. others have confirmed that since

then. here's the headwinds that spirit is facing. in this release that came out this morning, they talk about the fact that, look, we have $1.1 billion in debt, coming due next year. we're looking at options for refinancing net. its flat demand and falling fares. first quarter, generally the slowest time of the year for the airlines, fares are not increasing, that's the juice that spirit needs. asset sale options are limited. they did a sale lease back with some planes in the fourth quarter, that brought in about 419, $415 million. great. helped them pay down some debt. they don't have a lot of unencumbered assets of 200 aircraft, approximately in their fleet. they don't have a lot that are just sitting around, wholly owned they can sell. they have 5.1% of the u.s. market. so, there is some value within spirit. the question is, how do you access that value because as you take a look at shares of spirit over the last two years, look, they lost $149 million in the

third quarter. they're going to probably post a loss for the fourth quarter. we haven't gotten final results right now. that's the expectation on wall street. and so when you look at them, you say, well, if you can't merge with jetblue, and we know that they're pushing for that merger for an appeal of it, where are their options, where do they go from here? because frontier, it was offering before jetblue a lot more for spirit, $2.8 billion, than it would likely offer now because spirit is a much less valuable entity than it was then. so, we'll see what happens. this is one of those stories we could have updates throughout the day. >> phil, you mentioned $1.1 billion in debt coming due next year, they're seeking to restructure. they have $1.3 billion in liquidity right alysts saying i terms of its ability to continue operating? >> well, nobody is saying that they immediately have to file for bankruptcy. but, helene becker raised that possibility as soon as the judge

said we're going to block the jetblue merger. once that happened, helene becker came out and said i wouldn't be surprised if they quickly moved toward chapter 11 and then she raised the possibility thatchapter11 could turn into chapter 7 liquidation. the issue here is they have got to move fast, and what options do they have? you can appeal. they can certainly do that. and they make note in their release this morning, melissa, that the agreement with jetblue remains in effect. they haven't made a decision in terms of an appeal. so, if you're not going to appeal it, let's say you don't appeal, what do you do if you're jetblue. what options are out there? you can't strike another, you can't say you can't strike, but it is difficult to convince another airline like frontier to come to the table. and in terms of assets, it is limited. so you're going to have to restructure in some fashion probably. >> phil, thank you. phil lebeau. there is a lot of doubt going into this ruling. coming up, congress kicking

the can down the road yet again, passing a short-term funding extension averting a government shutdown for now. pimco's head of public policy joins us next to discuss this. later, a.i. powering chip stocks and the company that used them higher. mark mahaney will be here to talk big tech and more. "squawk box" will be right back.

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from avoiding a government shutdown to a bipartisan tax deal, it has been a busy week on capitol hill. joining us now with the impact on the markets, pimco head of public policy, libby cantrill. good to see you. >> good to see you. >> short-term budget deal, i don't think the markets were too wound up in anticipation of this. but where does it ultimately lead us in terms of getting something a little more secure, not to even get yet to this idea of a bipartisan tax? >> so we have seen this movie before. i think you're right, the markets have become rather impervious to all of the drama on capitol hill. what we just saw both the senate and the house pass is yet another short-term stopgap funding bill. basically just kicks the can down the road. congress has gotten quite good at that. the new deadlines now are march 1st and march 8th. i think the concern is is the fundamental issues that have

plagued former speaker mccarthy and now speaker johnson, have they changed and they haven't. as a result, we could come to early march and be facing yet another government shutdown. now, does the market care about this? probably not unless there is a prolonged shutdown when it could feed into economic data, and then also potentially you know deprive the market and the fed of getting some key economic data from the department of labor and department of commerce. we'll cross that bridge when we come to it. the upshot is for another six weeks, the market can ignore what is going on capitol hill. >> you mentioned the speaker in the same spot as mccarthy was. what is the leverage point right here, what is the fulcrum where it is going to matter in march? is it still the same issues that we're not going to agree to this, you know, this immigration proposal, because it has biden backing? >> i mean, the house and the senate have been trying to buy more time to do two things. one is to pass these underlying 12 appropriations bills, all of

our clients. something we haven't done since 1996, passed all the appropriations bills so they usually package them together something called omnibus. republicans don't want to see that. that's one thing. they want to pass all the underlying appropriations bills. can they do that by early march? very unlikely. the house has passed seven of them of the 12, the senate passed three, they need to conference them and what have you. a lot of mumbo jumbo, but the upshot is they won't be able to reach that deadline. so, again, probably faced with another short-term stopgap. the other issue is you brought up, though, the issues of border security and also ukraine funding. the white house really wants ukraine funding, lots of folks on both sides of the aisle want that as well. but, you know, the house republicans are holding firm that they want some of these border provisions. i think the big question is do they really have the political incentive to compromise with the democrats before the election? this is a liability for president biden for sure.

and is it giving president biden a win before the election? so, we'll see how that plays out, but, again, we have been saying, glibly to our clients, you know, same menu, different waiter and the same dynamics in the congress are facing speaker johnson as they were facing -- >> isn't that a win for president biden only if he doesn't compromise too much with republicans on border? >> it could go either way depending how the comprise. >> he needs to get democratic votes. he can't go too far to the right, if you will. but, again, in terms of the electorate, how he's polling on this particular issue, this is a real liability going into november. so if he did have a legislative win that could point to do secure the border, that could help him. he does need to get the votes first. >> so far this thing, i think the word works is overstating it. but they keep funding the government. and they keep not having the shutdown. and we keep having people, not you, but you got to take this

seriously, they're going to have a shutdown. is there a point where the fundamental dysfunctionality of our political system comes up from the surface, and erupts into a real government shutdown, or do you think the end of the day, the system is kind of working underneath the surface? >> that's a good point. now, just as a reminder, this is like the base responsibility for congress, right, to keep the lights on, to fund the government. this is -- this is the bottom of the pyramid here. but you're right. i think that at the end of the day, neither party really has an incentive to shut down the government. they have sort of, again, they have put -- they toyed with this before, neither party has won politically when they shut down the government over certain things. so i think at the end of the day, there will be a resolution. i think there is a risk, though, that if speaker johnson passes yet another short-term funding bill or what have you or omnibus bill, packaging these things together that his speakership is in jeopardy. so, from his perspective it wouldn't be working, but in

terms of the markets and however, it is -- i think that the bigger question, however, is this congress sort of adept at tackling bigger issues versus the more foundational things. maybe the market likes that. >> the party can look like italy in terms of turning the prime minister over every week, but the government can't, right? the spending can't. it is okay if they're going to turn over and the speaker loses his job because that's something we might get used to. the thing that people care about is the government shutting down and doesn't seem to happen. >> we did allude to this idea that there are tax provisions. we have the outlines of some agreement. >> i think, like, expectations should be low here in terms of this is what you're referring to is there was a bipartisan tax -- marked up in ways and means today that would expand the child tax credit, that's a democratic priority. and reinstate some of these expiring business provisions like the immediate expensing of r&d and what have you.

the business community likes that. some republicans like that. democrats like the expansion of the child tax credit. with that said there are issues with how the bill has emerged. we'll see today in terms of when the vote happens and the ways and means committee, are democratssupporting this, are republicans supporting it. just talking to folks on the hill, the expectations are low that this will actually -- but, you know, we don't know. this could -- congress could surprise us. they can't pass a government funding bill, but can pass an ambitious tax bill. >> if now, the issues will be out there through the election. >> that's the broader point. a lot of republicans want republicans to hold their fire in terms of negotiating when we go into the trump -- that is set to expire in 2025 on the personal side. >> you better get home before the snow. nelson peltz is again pushing disney for a proxy fight. what could he bring to the board and will it shake up the magic kingdom? wayfair is cutting 13% of its

workforce, around 1,615 jobs as it aims to cut costs. they say the cuts are focused on management and leadership positions and expected to save the company about $280 million. those shares firmly in positive territory this morning. we'll rhtac beig bk. (grunting) at morgan stanley, old school hard work meets bold new thinking. ( ♪♪ ) partnering to unlock new ideas, to create new legacies,

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activist investor nelson peltz is making his case to join the disney board and outlining the investments he wants the company to make. >> this company is just not being run properly. the board oversight is awful. it really is the park, certain rides are great, but you can see it is getting a bit long in the tooth. they need more capital invested. they need more capital invested now because the competition is getting keener. >> joining us now is michael nathanson, senior research analyst. great to see you. you got a buy rating on disney. part of peltz's argument is disney should achieve net netflix-like margins.

is that achievable in your view? >> that is the crux of the debate. we don't have enough information on disney's streaming business to get there, but in theory, disney has advantages netflix does not have. library content, kids content that works globally, franchises, they own abc, the networks. they should be able to get into that range. and the investment community is really not believing that's possible. and therefore the disney company needs more emphasis on how it gets there. when i listen to his arguments, that's the crux of the debate in my view of what people need to hear more of in streaming. streaming profitability. >> and you say that disney needs to have a better streaming narrative in order for the stock to get basically out of its own way. it is amazing to think that we're at levels seen during the heart of the pandemic when parks were actually shut down. what in your view, you talked to investors every day, what has

gotten investors so skeptical of this story? >> it is a great question. it is just lack -- if you think about the pandemic, the stock actually was at 90. went to 180, and the difference between 90 and 180 is belief that streaming is going to be a good global business. they would be a number two to netflix. the community has no faith in streaming. they don't know what to think of it. there is no guide post on profitability, the strategy is a work in progress because they aren't all hulu. hugulu integrated with disney plus. there is no faith about where the business is going and no bel belief this business could be near netflix's value. until they have more information, they're not putting a multiple on it. >> we don't know how long iger is going to be around either. what does iger need to do?

does he need to have a clear road map because he had ample opportunity to do that and it doesn't seem like we're getting one for the streaming business, which is the most promising part of the disney story as far as getting the stock price higher. >> yeah, there is a lot of fires that have to be put out in the past year, right? we have been saying for a long time that their pivot to streaming under chapek didn't make sense. they started to make more and more regional content, never raised prices, slow to raise price. they have to undo a lot of that damage. there are fires on the content side, linear, all the other analysts is falling apart. to me, it is really getting control of hulu, and then laying out how does hulu and disney plus fit together? is there one app, integrated, what do you do about international? there is a story that they're going to divest india or create a jb. so to me '24 has been the laying of the foundation of how streaming could move into that band of profitability of 15 and

20%. that's the major argument, i would be keep pushing that, and i think that's where you get reception from investors. they need a view of how to get there. and that, to me, is what gets stock, the stock into the 120s, 130s. >> what is interesting about it is as you frame it, it is not as if -- here are the two obvious answers, three obvious answers the company and the board are ignoring right now. nelson peltz can say put more money into the parks. it is a tough thing to say they have to prove that streaming scales or you can get the costs right it is fascinating that -- i thought during the strike shutdowns, maybe everyone has a chance to step back and say what is the right amount to spend on new content here? can we possibly just navigate toward spending less and now you see that maybe subgrowth doesn't happen without a constant flow of new stuff. so that's a tough fix. >> interesting. >> it is very -- we had

ourselves, our clients, disney plus needs a stand alone service or they integrate with hulu? because netflix has this constant vibrancy of content, refresh cycle every week. that's something we want to hear more about, right? how do they integrate the two? how does that change their content spend? their global footprint, their scale internationally. these are all questions that really need to be answered in 2024. >> michael, one thing that needs to be answered, nelson peltz complaining about iger's pay package. $31.5 million was the number used. is iger overpaid? is the pay package misaligned when it comes to incentives? >> look, if you look at his comp group, his competitive set, that's what executives get paid. i would say, i'm a fan of bob iger, we upgraded the stock when he came back a year ago.

media executives i'm come to learn have different abilities to drive value. it is content. it is m&a decision-making, it is leadership of a diverse set of people. i look at a comp group of people who get paid in the same range, you know, it is in the range of what people get paid. is it too much? >> the stock went down, everything went down, you get $31.5 million, i don't know, seems like an argument to me. >> the argument clearly, look, this has been an underperformer for multiple years, that the company needs to articulate a vision that resonates with the street and that we have not heard yet. >> michael, thank you. >> thank you. up next, a rise of a.i. and what it means for internet stocks. mark mahaney joins us to talk about the possible upside for names like amazon, meta, and more. and at the top of the hour,

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welcome back. our next guest covers internet stocks and has a new report out with a preview of the fourth quarter. he sees the most upside to estimates like spotify, netflix and meta and the most risk

google and m.e. tet. is that right? and joining us, mark mahaney, evercore research. to start, saying "no" to the big seven, sort of pick your way inside of them? >> i only cover large cap internet stocks. i like meta, amazon and google, but in terms of prempss, prefer amazon number one pick. still more re-rating, multiple could go higher. meta our number three pick and expedia actually a surprise. a majority call. that's for the year. >> you're not selling amazon this morning, because you couldn't buy irobot? just a joke. talking about that earlier. >> too small in the needle. a lot of things going for it. you need three catalysts. growth has to accelerate. one. secondly, hit record-high retail operating margins this year.

high confidence they'll do that. third, actually hit record-high cash-free nasmarket for the comy and as they rise that gives confidence to investors to up the multiple a little. depressed where it was several years ago because of slowdown in aws, lack of free cash flow and follow-through. get both of those, outperformed last year, but i think it outperforms this year again. >> why do you like spotify? >> globalmusic in streaming finally starting grouping out the business model. the big knock against spotify since its direct listing or ipo several years ago was great. can they generate real profits? you have concentrated supplyer base. three, three and a half major labels in the world. not much economics for the biggest music streaming platform. but that has started to change. in part because the company

looks like it's successfully executed on the price end of last year. also more dollars coming in from the labels and the artists, and then finally, like a lot of other tech companies, really catching cost religion's these rifts, job cuts announced, painful for all people involved. totally get that. some companies absolutely necessary. i think spotify was one of them. showing the street safer to invest in. >> mark, terms of spectrum of risk in coverage universe for this ownings season. google riskiest. why is that? >> it's a cost issue with google. also really something funky with practically, the street estimates fourth quarter. looks normally -- margins, operating margins come down from september quarter to december quarter for a variety of reasons. need more hardware devices they sell. more in marketing.

a little bit of shift to youtube. a thing calmed nfl sunday ticket, almost anything's die looted to search. nfl sunday ticket, i don't think street numbers can catch that. the company can address this on the earnings call talking about managing expenses better going forward but never really done that. i'm -- a bit -- love to see google come out, say, we're really taking a much harder look at cost, but until they do that, i've just been waiting for too long for them to do that and going to be a little cautious for them on the cost side. i think revenue is fine. youtube looks particularly strong now. actually beneficiary of the hollywood strike last year, but on the cost side, investors want to see cost discipline. i don't think theil say enough of what they want out of google. >> mark, do you have a spread sheet this morning, access to it, zuckerberg talking spending $9 billion on a.i. how do you process that? is that an expenditure?

a profit thing? how do you process that? >> it's an operating expense r & d. i think people have been looking for all of these a.i. plays. buy the chips look for infrastructure and see where the big a.i., gen a.i. deployments are. where can i find a great gen a.i. app? >> used a.i. bringing more content across internet not just from friends' circle into the news screen and used a.i. to rebuild ad text app an google blew it up with privacy changes. now a next level of a.i. deployment. both in google and at meta. using it to allow companies to create their own grade on the fly. >> mark, thanks very much. >> thanks. still to come, millions of clients and over a trillion in assets. franklin templeton ceo jenny

johnson joins us talking the firm's business etf and later austan goolsbee talks inflation. "squawk box" will be right back.

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good morning. stock futures pointing to a solid open after a tough few

days to start this week. all three major averages now have a good chance to end the week higher. spirit airlines shares soaring. a change from the sharp drop we saw in it blocked jetblue the takeover of the company. spirit raising fourth quarter forecast. the fed about to go into a quiet period before its next meeting. chick fed president austan goolsbee. the final hour of "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. live from the nasdaq market site in times square i'm steve liesman along with melissa lee and mike santoli. scott walkman joining us from the american express pga tour in southern california. joe, becky and andrew, i believe in the air, on the way back home

from davos. we got the judge in the box here. u.s. equity futures this hour. actually strengthening a bit. up 200 on the dow. 134 on the nasdaq. 25 points on the s&p. and treasury yields look like they're better behaved this morning. we were 413, mike telling us, 417 overnight. come down a bit, and up earlier, that range, what's the two year? 435, 436? shares of spirit airlines jumping in the pre-market. the company raising its financial forecast for the fourth quarter expects revenue to come in at the high end of earlier forecasts thanks to strong end of year bookings. the company estimated adjusted margins of 12 to 13% and proven from an earlier margin forecast negative 1 p19% for the fourth quarter. this after a judge blocked the

takeover spirit stock lost half its value. reporting this morning spirit now trying to convince jetblue to appeal that decision. meanwhile, shares of roomba vacuummaker irobot plunging. i laugh at this story. antitrust walkdog trying to block an acquisition by amazon of a vacuummaker. saying the european commission met with amazon representatives yesterday. incredible concentration over-pricing and just over-charging of vacuum purchasers in the eu, i guess. amazon declined to comment and in washington, congress passing a stopgap spending bill avoiding a government shutdown keeping fund flowing into early march. president biden expected to sign that bill today before funding expires tonight. melissa? >> look at markets recent struggle to challenge its former

record high. mike's digging into that. mike? >> barely below the record high. set almost two years ago. look at the chart from the very end of 2021, you see that we've sort of been hovering just below that high for a little while now. in fact, one of the longest stretches within 1% of a new all-time high after a bear market and not cracked through. a good chance today we do it. yesterday's rally in the s&p positive for the year less than half a percent from a new closing high. but it has mostly been much larger stocks dominating. nasdaq 100 carrying a lot of the weight again. you see xlg. top 50 stocks in the market. by size, they've been vastly outperforming the very smallest stocks. microcap stock. all you need to know, the chart, seb struggling last march, financial conditions tightened. numbers count on s&p shows where it's coming from. finally steve talked about the

ten-year treasury yield. where we sit relative to the range we're at. 4.25 comfort zone perhaps for now for stocks. last summer, early fall, 5%. got nervous. i point out this number changes, right, in terms what the threshold is for being worried. go back to late 2022, anything close to 4 was a problem. so the market can make its peace under the right circumstances with a ten-year yield. happen to happen for the right reasons. >> interesting the market narrative, not the soft landing, changed beginning of the year. beginning of the year balled up on broadening our markets, fed rates to come and fed rates look less likely in terms of magnitude and the number. and timing of them. we went back to the playbook of big cap tech and we're hovering still within record highs? >> seems a two-month period average stock outperform big ones and broadening of market.

everyone wanted it and needed it too badly in a way. now what we a mean? a consensus trade. a gut check, correlates with confidence about the economic cycle and what the fed's going to do in response to it. >> stick with markets here. a special guest this morning. jenny johnson president and ceo of franklin templeton, $1.5 trillion assets under management. the 76-year-old firm one of roughly dozens to launch a spot etf last week after the fcc gave the go ahead. great to have you here on-set. >> thanks for having me. >> massive inflow expected in early days. what do you expect as time moves on, and who are the incremental investors in this etf, in your view? >> funny. i'm known for saying bitcoin is the greatest distraction from one of the greatest disruptions in financial services, blockchain. people took that as i'm not a believer in bitcoin.

yet launching this etf you can see obviously demand out there for bitcoin. i think a lot of reasons why that is. i think that, one, from a blockchain standpoint, the ability to pay. bitcoin is going to be a key component of that, and the technology is going to open up a lot of really interesting tech investment opportunities. we actually launched and tokenized money market fund. the first mutual fund d-- first to launch a 40-act fund on a public on a stellar blockcheyne. bitcoin is one of opportunities here and one thing that made me a believer. as i went around the world talking to people who would tell you, somebody said, i keep 50% of my savings in bitcoin, because if i save the wrong thing in my country, i could have my assets confiscated. i remember talking to somebody in israel who said, my parents

and their parents had all of their assets confiscated and they keep a portion in bitcoin. a fear component to it. that's considered almost an insurance or safety component. i also think it's really important to fueling what is a next real opportunity in this blockchain world. >> right. this narrative you outlined, that's the case holding bitcoin, the actual, you have the keys to the security as opposed to investing in an etf? right. there's a use case for both. >> for sure. still keeps a floor on the price. right? floor on the price. if you've actually tried to acquire anddeal with the keys it's complicated. right? i did it at one point and was trying to actually figure hue to get back in. it's hard. being able to open it up, have access through etf and simply through your account is a much better way to access it. >> what's your take, pivoting back to the markets here. what's your take what we've seen so far in 2024, and if i told you that the fed was only going to, you know, cut two times as

opposed to six or whatever the market has priced in right now, does that make a difference to your outlook for the year? >> sure. actually i think, my view, been saying this for a while. i think the market's a little overly exuberant what they think cuts will be. you just saw the atlanta fed say wages are 5.2%. retail sales higher than expected. i think there's something like 1.4 jobs available for every 1. that becomes available a floor to inflation. so i think that the market's excited. i don't think we'll get cuts until second half of the year and they're it cut 50 to 75 basis points total. >> of the trillion and a half on management, sorry to put you on the spot. how much in money markets, how much are they earning and how long stay in money markets? where's it go next? >> i'm going to ballpark -- >> i know i put you on the spot.

>> probably $60 billion western asset management and franklin. money market funds in two places. earning 5.1%. >> not much in money markets right now? >> well -- >> more than it was, but -- >> still decent, you know, $60 billion. i guess it's all in perspective. >> right. where does it go? do you see that, something like, what's the number, mike? $8 trillion, out in the economy? >> more like -- in terms of savings, deposits, yeah. >> is that fuel for the market -- >> 100%. well, is it fuel for the stock market or fuel for also longer duration fixed income? and so -- yes, cash on the side is always an opportunity. you know, the market obviously, if rates come down, that's a good thing for stocks. but i also think because we've seen this great concentration. i mean, the magnificent seven are now 31% of, you know, the

market cap, and have been 70% of return at the peak of the dotcom boom, 26.5%. actually a greater concentration now. i actually think, where's the opportunity? the opportunity's going to be in other areas, it's broadening. sure, hasn't happened yet. we're all a little surpriseed but i think it's inevitable for it it to happen. >> in terms of your business, the way you address clients, their preferences? i mean obviously all the flows on a net basis have been towards etfs. more than traditional fund structures. even in i guess, the retirement area that's been a difference. but how do you compete in that world? >> so, look, our view what is our expertise? it's making active investment decisions. we will deliver them in any vehicle which our client would like to receive them. so you'll get the same strategy or similar strategy in a mutual fund an etf, separately managed account, co-investment or

collective investment trust. we're agnostic to how that strategy is delivered. and so etfs are obviously you see it, a variety reasons why a part of that, as the world william's moved fee-based, what used to be services feeing in mutual funds now charged a the account level changed to a big push into etfs. people often talk about ifs synonymous with passive inve investing. pattive mutual funds. you no you see etfs moving, seeing a lot more actively managed etfs. a space we're very focused on. >> i guess the question is, is it a tough sell to say that we will be an active investors in there? talk about concentration of the market i was basically saying, there's no active manager that would have allowed you to have 7% each in apple and microsoft last year. not selling a share of nvidia when it triples.

all things that caused the s&p 500 to perform so el were, nobody with risk management and with, trying to kind of be, you know, apply alpha to the portfolio would although do it. >> exactly right. because when you provide risk adjusted returns you have to deal with concentration risk. in the end, the average person cares about downside protection. so when you follow a -- i always say, like, the day tesla was added to the index, the index became a lot riskier, but nobody talked about the market data being riskier. an active manager has to consider that. i think there's a lot of fundamental things going on sort of changing some of how we have to approach investing. one,ing companies aren't going public as quickly. you have to figure out ways to have access to private markets. banks aren't lending like they used to lend. the leverage buyout market in 2023, 90% of it was funded by private markets.

whereas up from 35% in 2021. so the question is not only, do you -- you fundamentally have to have a diversified portfolio, but how do you get access to these other asset classes that are much more difficult to, for the average investor to get access to? >> jenny, great to see you. thank you so much. >> thank you. all right. coming up, we'll speak exclusively with chicago fed president austan goolsbee. next a special interview with scott wapner on the west coast. what's coming up? >> steve, have an interthe view with ryan smith. he is the executive chairman of a company and owner of the yew utah jazz. a tech entrepreneur and visionary for his home state of utah. get into all of that when "squawk box" comes back to la quinta, in the desert. destinat! we just got back from her sister's in napa. who gets married in napa? my daughter.

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welcome back to "squawk box." futures right now improving more over the course of this morning.

dow up 246 nearly 250. s&p up 28. nasdaq 139. seen a gradual strengthening all morning, melissa. >> now get to the west coast where scott wapner isened staing staing -- standing by with a special guest. >> ryan smith, qualtrics founder, executive chairman and owner of the nba's utah jazz. welcome. good to see you this morning. >> go to be here. thanks for having me. >> when people ask you what qualtrics does, what do you say, because your company evolved so much over the years. i read a harvard business review story where they say re-inventing an already successful business. most people would think if it ain't broke, don't fix it, yet you did. kwai? why? >> my 22nd year in tech. surviving in tech 22 years and fortunate enough to work on an idea in our basement 22 years ago, and it's never been more important today. so with qualtrics it's truly helping organizations manage their experiences.

so whether you look at amx, delta, them on, we're helping them understand how people really think and feel. most data they're gathering, saying, this is what someone did and trying to analyze it, saying where are they going in the future? another experience. experience data. largest database in the world to say this is how we feel what i'm going to go do next and a relationship i have with you. so we're helping organizations be able to put that into action both on the customer experience side, the employee experience side and really brand in product. we're the only platform in the world that puts it together. if you told me 22 years ago where we would have ended up i would have said, let's go. >> you've. noticed. a former member of the cnbc disrupter 50. our eye on what you've been doing. you mentioned all of these experiences. i wonder how the pandemic changed all of that? the way we look at what an

experience truly is? whether a customer experience, employee experience, it's changed the way people live, the way they work. they way they experience the world. >> yeah. we've actually become very intuned to experiences, if you think about it. like i think during the pandemic the first thing everyone said is, okay. what's the work experience like? and we really became acclimated at this new work experience. i think it was there. just sped up. probably sped us up five years. i think from a customer experience side, we also got to see, hey, you know, it's not a bad idea to have the groceries come to the door. and different services that all of a sudden accelerated as well. and i think that what we also found is there's not a company in the world or a ceo in the world that isn't focused on at least the first, second or third priority to be the customer and the employee. and that wasn't the case in 2010, '11, '12.

we walked in and, what are you doing here? and now it's like, hey, i have to have an experience management platform. we have to have this going forward. it's actually started to get really, really enjoyable and fun when you're starting to see that work pay off. >> the company is, has been a winding road, i would say. >> es. >> so you go public in january of '21. you go private in march of '23. you hated the public markets that much? >> actually even starts before that. 2017 on the road. sold the company three days before the ipo. >> uh-huh. >> then went private, then took it out and went public and then actually took it private again. and in my mind, we're pre-ipo. here we are. >> look for you again once again sometime in public markets? >> you know, look, with silver lake coming in. incredible track record. i'm fortunate to still be a part

of something i founded 22 years ago and the company is at size and scale, and really well-positioned. >> talk about that size and scale, because the size u is smaller. you've had two rounds of fairly significant layoffs. right? 5% of the workforce in january of last year and then 15% in october. why and what is that, right-sizing of your business, if you want to put it that way, do for you? >> exactly right. look at the trajectory of qualtrics. ramping up for '16, '17, to go public and go private. it's a big adjustment. then getting ready to go public again through the pandemic, which is interesting, and then now going private. i think it was really a chance to look and say, okay. what were the bets making in '17? the bets making in '18? what does the company go forward? where are we geographically

located? reality, how do we bet on the future and where we're going and get more efficient? a shift. in 2017 all about growth, growth, growth, at all costs. the good news the business is doing great. we've, it's been phenomenal so far. but right-sizing and going forward i could really see, and am seeing, the growth engine really peak. >> you talk about the future, which you are looking at in terms of how you see your home state of utah. the silicon slopes. >> yeah. >> as they call it there. you want utah to be a tech incubator, and you are building literally that from the ground up. 26 acres, 200 residential units. 300 square feet, 00,000 square feet of office space. to do what? >> yeah. think you take a step back look at utah. it's always had this innovation. a time in 2018 we had more ipos than new york city. right? you look at how we're operating,

we've got the youngest demographic in the country. within a 90-mile radius, 250,000 college kids. the number one, we're number one in unemployment with the number one economy. the fastest growing state. put all that together you say, hey, how do we harness that innovation here and how does success bring success? that's truly what we're trying to do and with our incubator it's an opportunity, what if you could, you had phenomenal housing next to that innovation, next to the university ecosystem and just keep doing what we're doing. >> talk to you about sports. owner, i said at the outset, of the utah jazz. won an nhl team as well. ever think where valuations have gone? look at mark cuban cashed out for huge valuations. too good to pass up, sell? >> not really, no. i don't focus on if. this is a lesson learned in tech. you kind of keep your head down,

evaluations take care of themselves. >> are you amazed where valuations have gone? >> no. scarcity of the assets. what you read is very different than what's out there, because there's only a few of these. but i am much more focused on just building amazing businesses. i think our live events are, almost doubled coming out of the pandemic. i mean, we've not only had, you know, straight sellouts in the nba, but also one of the largest ufc fights this summer. i think led the country in disney on ice. people want to get out, and they want to experience live events. and so i think -- i think none of it surprises me. but i also am not a seller. and i'm not focused on it. i -- i mean, we've learned this in tech over the years.

valuation takes care of itself. growing a good business, the best is yet to come. focused and expanding the p footprint isn't sports and we can handle that. olympics, all-star just there. incredible. olympics in '34 coming back to utah and salt lake city. >> appreciate you stpending tim with us. >> no problem. >> catch live coverage of the american express pga tour today, tomorrow and sunday on the golf channel and peacock. coverage starting at 4:00 p.m. eastern time. coming up, ed bastian. minutes away. mike, send it back to you in the studio. >> scott, see you again soon. coming up, a can't-miss interview with chicago fed esenauan goolsbee. we'll be right back.

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about an hour to opening bell on wall street. dom chu joins us with the pre-market movers. good morning. >> melissa, start with a check on a big move higher and big insurance company. dow component travelers up roughly about 5%. around 15,000 shares of pre-market trading volume after it easily topped earnings estimates on better than expected total revenues, powered by net written premiums in-line with estimates.

travelers powered by growth in each of its three business segments able to increase premiums charged to policyholders, driving up profits. contributing roughly 70 points to the pre-market gain. keeping an eye on regents financial, huntington bank chairs, allied financials a bit more of a mixed picture. comerica kaw down. fifth third huntingdon generally higher in pre-market trade. allied in the green not just earnings but headlines involving allied selling to synchrony. end with a surge. shares of wayfair. online home goods and furnishing retailer up 15%. thereabouts on half a million shares of pre-market volume. as often is the case, surge happening because of unfortunate news specifically on the job

front. wayfair will cut 13% of its workforce, roughly 6,050 jobs. those cuts focused mostly and primarily on management and leadership positions, not necessarily on the front line melissa. wayfair shares up about 15% on that news. back over to you. >> thanks, dom chu. one more stock on the move we'rewatching, super micro. the data specialist raising sales and guidance calling strong end demand, customer demand. shares up on the news. guidance raise is actually significant. sales for the quarter ended in december. they're saying will be 3.6 to 3.65 compared to prior estimates. almost as much as a billion dollars higher on the sales front. >> and a.i. play. >> yes. >> coming up next, speaking exclusively with chicago fed president austan goolsbee. stay tuned. you don't want to miss this one.

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talk about the fed interest rates overall economy joining us chicago fed president austan

goolsbee. good morning, austan. >> great to see you, steve. >> are you feeling your influence start to spread in that now your colleagues are quoting you? you had bostic yesterday talk about the golden path and even use the turkey frying analogy i think was yours initially, austan? >> yeah. take what you can get. if they won't listen to your monetary ideas, at least they'll take your graphic examples. >> stealing your metaphors, austan. tell me something. are we on the golden path? are you more confident we're headed to that place you end up with lower inflation without a recession? >> yeah, look, what i said, the golden path. definitely not off the golden path. i mean, we haven't come to the end of it, but 2023 we're going to look back. you have to say, as far as the fed's dual mandate of maximizing employment and restabilizing

prices, we've made a lot of progress on the golden path in 2023. we'll see what happens with pce inflation. i believe it's next friday, but inflation has come down a lot and i've been highlighting for months with you, steve, and elsewhere, that's the thing that everybody should be watching to determine what, what will the fed's rate path end up being. it's not about secret meetings or decisions. it's fundamentally about the data, and what will enable us to become less restrictive, if we have clear evidence that we're on the path to get to the 2% -- >> a little unfair, austan. i can look at the dreirection o inflation, see it got down and project the feds fund rate will come down. i don't think that's any high-level math. what i can't predict, though, is how soon you're going to do it, and how much you're going to do

it. so i wonder, since you're the last word before we go into blackout period, can you enlighten us what your thinking is, how quickly you'll feel confident to start cutting rates? >> well, as i always say, steve. i don't like tying my hands. we still have weeks of data and the way the fed open market committee operates is we go meeting by meeting. so let's not pre-commit ourselves on hypotheticals what we would do in three meetings, if we saw x, y, z, in the data. let's take the long view. if we continue to make surprising progress, faster than was forecast, on inflation, then we have to take that into account, in determining the level of restrictiveness. we've had a restrictive policy with rates relatively high, because we wanted to get inflation back to target, and that's where we've been missing on our dual mandate.

we're making a lot of progress in that front. the inflation rate coming down, and as it does so, then we would clearly be evaluating this, but we don't want to commit ourselves before the job is done. it's yet to be done. >> instead of talking hypothetical. let's talk theoretically, which is -- >> okay. >> i don't even know if there's quite a distinction but i'm making it anyway. you're at 538 now. you have a long run, the federal reserve has a long run funds rate forecast of 2.5. let's call that 300 basis points of restraint being placed on the economy right now. that was the number in 2023. can you say that there's a need for the same amount of restraint to be placed on the economy given that inflation is coming down? >> i like that. that you're taking a theoretical and trying to back us into the

hypothetical, but i see where you're going. the only thing i will say is, what matters, in my mind, is the real restrictiveness. so the, what's the rate minus what's happening with inflation. so i think i agree with the premise that as inflation comes down, that opens the door for reduction in restrictiveness, and we've seen inflation coming down. i continue to highlight, is it a however? maybe it's a "however"? i continue to highlight that goods priced inflation has returned basically to the mild deflation that it was before covid. we've actually seen surprising progress on the services component of inflation, and that the main thing in this short to medium-term that we need to see more progress on is housing inflation. and we've seen some, and we have indicators from market --

>> but you knew it was coming? >> that's where we focus. >> you know that's coming. it has to come. all of the private sector data shows -- i mean, i've been surprised like you every time i read the cpi number that housing number hasn't come down, but it has to come down. doesn't it? >> it should. look, i don't want to jinx it. i'm not a superstitious person, but that's where we must see progress, but that is why, steve, i've had some confidence and saying for a while this golden path is possible. now, historically unusually because we're seeing supply chain improvements. we are seeing the labor supply negative shock of covid undoing. you're seeing labor force participation coming back pretty robustly. we're coming into better balance in terms of growth, and in terms of our labor market indicators, and if we can do that, whilst continuing to get towards the 2% target, we can reduce the level

of restrictiveness. the thing that will determine that, of course, is what happens in the data? so when the market is hinging on the words of fed officials, i really think that's a mistaken direction. what they should be hinging on are these inflation numbers. and the jobs numbers and the growth numbers. >> data so far, though, has been better than expected. retail sales are better. all indications's job market is still tight. austan, is there any hike left to the worked through the economy? on the long invariable effects over or should we expect more? >> of heights or of growth, you're saying? >> of the fed rate hikes. the last hike was in july. are we still working our way through that, or is that over? long variable lag effects, are they over? >> you can't answer that

question unless you have a f firmly held opinion what's going to happen in the data. if inflation was not tamed, if we started to get evidence we clearly were not on path to get to 2%, of course, rate increasings would be back on the tail. it's a data-dependency that we have to go from. now, i have been pleased, as you highlight, at the faster-than-expected improvement in the inflation rate, without a deterioration of the job market. the job market has gradually gotten into better balance. it hasn't shown anything like the -- the norm of, when the unemployment rate goes up, it tends to go up rapidly, and things deteriorate and go into recession. we had that. the biggest, better than forecast component has actually been economic growth. if you say we're coming into

were '24 in a much better, much more comfortable place than we came into '23. remember in '23 we had a large group of people's saying that recession was inevitable, and another large group saying, inflation could not get below 3%. that we were going to stall out at 3%, and a lot of them saying, the fed should just give up and even declare that its inflation was 3% because they simply couldn't get inflation down to 2%. both proved wrong. i do have, some more, is it confidence? some more comfort we're moving into a different part of the cycle than we were the last 18 months. >> austan, you're talking like a guy who has time. time to make these decisions. time to see the data. are you worried at all that there is a, a place in time where the fed needs to pivot, to really secure the soft landing, or do you feel like you can just

keep that restraint in place to a point where, you know what? we are going to be really confident, but you end up risking the recession you've tried to avoid, if you don't pivot quickly enough? >> that could happen. i mean, the job -- you could worry about everything. worried about -- so i worry about that scenario. that's just a judgment. you know? it's a committee, and we come from a lot of perspectives, and that, i think, helps us to try to get a handle on making a forecast that's not as -- you certainly don't want to just say last month's number was x, therefore monetary policy should react to last month the number. you do have to look forward. thus far, without being external shocks, change it to the external environment, i don't feel in this immediate term that we're facing that kind of a

cliff, but we definitely need to worry about both sides of the mandate, if we start getting threats on the employment side, too. >> austan, you didn't catch it. i teed you up to give the turkey fry metaphor. you didn't do it, though. thanks for joining us this morning. austan goolsbee, chicago fed president. mike? coming up, heading back to southern california and scott wapner for another big interview. scott, what's on tap? >> well, mike, delta ceo ed bastian coming up. his company has had longstanding relation. with american express. discuss next. hen you what did i do to get here? (tense music) right. work. you worked hard and it's time for a bank that'll work hard for you. everbank performance savings is built to put your money to work with some of the highest rates in the country .

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fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. let's get back out to the american express in southern california where scott wapner is standing by with another special guest. scott? >> melissa, thanks so much. here with delta ceo ed bastian. nice to see you. i mentioneding going into the bk you had a longstanding

relationship with -- >> heavy duty fall out of the snow and come to the desert. i don't know better partnership, candidly. forget the airline industry or transportation, almost in corporate america, we will generate over $7 billion of revenue off the card this year, amx playing delta and in tern de turn continuing to grow the franchise. it's a synergistic relationship, it's complementary. the best card provider, we think, premium cord provider in the industry, period. we know we're the best airline, premium airline in the industry. put those two things together. incredible magic occurs. >> amx pays you for sky miles customer get when they use their credit card?

essentially how the card works? >> exactly right. internalliry provide the miles consumers want value of the travel benefits that card provides and we're the source of that. >> they also want to use their miles. able to use points easier. >> yes. >> why is it getting harder? >> demand is really strong. it's really strong. we've never seen a stronger demand set in our history. we closed last week, we had our earnings, and we had record revenues. 20% above our pre-covid, pre-pandemic levels. this year in '24 another strong year. >> i heard you tell phil lebeau that on the day earnings came out. also business travel it roughly 90% of pre-pandemic levels. has it crested? >> a misleading stat, scott, because that's traditional forms of business travel measured back during the pre-covid era. the world has changed. hybrid and opportunities to work

in alternative means. incorporating corporate in their travel. it's back 90%. but individuals are way over 100%. so collectively, business travel is much higher than pre-covid levels. that's why, you know, total demand in aggregate is over 20%, month are than it was pre-pandemic. >> interesting. you said growth would come internationally. are we going to have another summer of revenge travel to france and italy and all of these other places? >> we are. it's going to take several years. everything that we say, before people feel like they're fully back and able to get back their life experiences that they wanted previously. there's no way one summer of heavytravel to europe will quench that desire. i think that's going to be a phenomena we'll see for several years coming. not just to europe. this year asia's a much bigger part of the picture as well as south america. >> weevg heard storied about

airfare starting to come down a little bit. how would you assess where they are and where they may go? the person who's going to buy that ticket internationally this summer what will they find? >> i think they're stabilizing's i wouldn't say down. they're flat the demand was sog and the supply was limited. we now have the right supply back into the market. we're flying more to europe today than we were pre-covid, so with that extra supply that's in the market, that's caused a stabilization in the fares. >> from a customer standpoint, you see the strong customer that everybody else does? do you feel like you have -- i talk to people who say, well, look, the consumer is incredibly strong, just look at the tsa run-through numbers, they're incredible. i say, well, is that a real accurate thing? of course people want to go and travel. but do you feel like the customer is -- the consumer is as strong as you've seen in many years? >> absolutely. we live in the experience world.

experience economy. whether it's the premium product that we offer, which is going, you know, it's up double digits. the american express relationship, that revenue is growing. our consumers tell us -- at delta, we're in the higher premium category, so that category still has a tremendous amount of net wealth they want to invest in themselves. >> looks like jetblue and spirit is done. it's hard to get a deal done. how do you look at that and the landscape as you think about growth in the future? >> well, it's interesting. i don't know what's going to happen there, whether they're going to appeal or not. that's not our market segment, largely. our segment, again, is the premium sector. down at the lower cost level, there's a lot of disruption that's occurring, and there will have to be some type of -- whether it's supply that's going to have to be changed in the

marketplace, becauseboth those carriers are not doing well. >> sure, but the big guys have done deals, obviously, in the past. do you feel like those days are over? >> we're big enough, yeah. we have no m&a desire in the u.s. you've got four big major airlines. that's a pretty strong base. we're highly competitive. you know that every day while fares have increased, they're still as competitive as ever. >> you told phil last week that you have not lost confidence in boeing. you have an order for max-10s. will we see that order go through? how does that process work? you don't necessarily have to take delivery on those. you could cancel the order. what's your thought process? >> i expect we'll take them. we're not taking them for another couple years and we certainly will not take them until we have a thousand percent confidence that that plane is fully secure, fully safe, and everyone has signed off to that.

boeing is such a vital part of our industry, our history, and we need them to succeed. and they're going through a tough time, there's no question about it. we fly over 500 boeing jets every single day, flawlessly. they certainly have had some problems in the last decade with both the max as well as the 787. fortunately, we don't fly either of those product lines, but we're not right in the guts of the challenges they're seeing, but we need them to succeed, and i'm confident they will. >> i appreciate you spending time with us, ed. ed bastian, the ceo of delta airlines. you can catch live coverage of the american express pga tour event. that's today, tomorrow, and sunday on golf channel and peacock. that coverage, starting at 4:00 eastern. coming up later today on "the halftime report," i'll have an exclusive interview with american express ceo steve squeri. plus danny ainge at noon

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nasdaq on pace for its 11th positive week in 12. joining us now, greg branch, managing partner at veritas financial group and a cnbc contributor. greg, good to have you this morning. wondering your thoughts about what we just heard from austin

goolsbee. i know you're in the camp that you think the market's got ahead of itself. market still thinks we get a few rate cuts here before too long. >> good morning, mike. yes, data dependency is the avenue i like to travel down. if you look at the data, we're trading at almost 20 times forward. the rally has expanded as the buy everything green light was triggered by a core cpi dropping back down to 20 basis points, and a jobs number that was in the 150 range. we thought that a new paradigm that gave the rally legs, but the data is pointing us in a different direction now. we are seeing continuing plays drop to historical levels and come under consensus. we are seeing initial claims do that. and you can simplify the argument that i'm making into one simple data point. we aren't seeing the unemployment scenario support a

future where we have 2% inflation. we are seeing an employment scenario where we can expect continued wage growth, which is going to continue to drive services inflation, and i'm looking for that to change, for that data to support a scenario that would support these market lows. >> clearly, the fed and goolsbee alluded to this, they're focused on what the inflation numbers actually tell us as opposed to trying to target the conditions under which they think inflation will ease, but i certainly get your point that we don't know for sure if we're there yet. i guess the bigger question from an investor perspective is, if your base case is this economy is a little bit stronger than anticipated, maybe we have to wait to have some easing from the fed, that doesn't sound like a terrible scenario for risk assets. >> well, it's not terrible. i've been calling this the anti-goldilocks, mike, because on the one hand, if the data was much worse and the economy was deteriorating, then i think we

could all buy into that narrative that we would see five to seven cuts this year because the fed would have to, to reinvigorate the economy, but the point is that the economy is growing too strongly for me to see a reasonable scenario of how we get down to an inflation number that the fed is targeting without it further putting its thumb on the scale. absent generational inflation for the last three years, this would all be very good, that the economy's more resilient than we anticipated it to be, particularly post-the fed hiking 500 basis points. >> obviously. got to see it unfold. we got a couple of months even before that first potential anticipated rate cut. greg, we're going to have to leave it there. we're getting close here to the top of the hour. good to talk to you. let's get a quick check on the markets before we wrap up here. you see the s&p 500. it has eased back just a little bit from the highs of the morning. the futures indicating 20 points. that's a little bit less t than 0.5% to the upside.

the all-time high, 4,818. closing high on the s&p 500, the nasdaq continues to lead the way. you see bond yields, ten-year near 4.15% at this point. two-year note yield also ticked up. make sure you watch "squawk box" next week. "squawk on the street" coming up right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. u.s. tech does reassert its leadership. nasdaq 100 coming off fresh all-time highs. ten-year, 4.15%. our road map begins with stocks trying to build on yesterday's gains. ndx will aim for another intraday high. plus, mark zuckerberg