2024 and this is "squawk box" from times square begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. we were just saying nothing can make you miss times square like being really far away and really cold. we are glad to be back. i'm becky quick along with joe kernen and andrew ross sorkin. here we are, fellows. >> not quite like hitting your head against the wall because it feels good when you stop. we like davos. it's a grind. >> we like coming home. >> that six hours -- >> six-hour difference. >> you don't know if you are

coming or going half the time. >> why davos and why people go there is an out of body experience. you are all jet lagged and running around like crazy. >> you are in a haze. you are going to bed and saying what time is it? 5:00 p.m. at home. you get back and i am couldn't sleep when i got back in the morning. that was good because i knew what was coming on monday. >> things are no fun for us. let's look at the u.s. equity futures. you are seeing fun in the green arrows after all three of the major averages closed at record highs on friday. dow futures indicated up 50 points. s&p futures up 13. nasdaq up close to 100 points. treasury yields. treasury yields have been driving things. ten-year yield at 4.11%. two-year yield at 4.4%.

andrew. an update on the 2024 presidential race. something changed over the weekend. ron desantis dropping out and endorsing donald trump. the announcement two days before the new hampshire primary. desantis says he cannot ask for your support if he doesn't have a clear path to victory. >> we can't go back to the old republican guard of yesterday. repackaged form of corporatism and caving to woke ideology are over. >> bloomberg are reporting the wall street billionaire druckenmiller and kravis are co-hosting a fund-raiser for nikki haley in new york city.

we will see if she can build up a war chest to build momentum to take on trump. >> that's funny. they asked former president trump about the nickname. he said that has been retired. >> snl went to ron destupid if you saw that on saturday night. >> we tried early on to get him on again and again and again. will you talk about it? really, ron? how did that work? you want to be president, but you don't want to talk to the public? >> bizarre. >> with the way things are moving now endorsing donald trump. you were on "the simpsons." ann and al were screaming on the talk show. the minute the cameras go off, they say, where are we going to

dinner. y they head out of the studio and head out for cocktails. that is how it works. >> you don't think one or two of those want to be vp? >> or cabinet member. >> that is all this is. >> you go from pure vile and vitriol and hatred. >> that is how sick it is. the person public thinks it is cynical. thisgoes to the alex karp thing. people say stuff they don't believe and everybody knows it. >> you know how many times i said virtue signaling? >> i believe it. >> you believe? >> i believe whether i'm saying. that's the difference. >> you are different than everybody else. i do. i do say things i believe. i get in trouble. now to the $5.8 billion bid

by the investor group to buy macy's. arkhouse management said it could bring the matter to shareholders if the deal talks don't pick up. the group issued the offer on december 1st. after the wall street journal reported the threat and a statement released said the board determined the proposal is not actionable and fails to provide value to the shareholders. arkhouse said it could make a meaningful increase to the bid if it could proceed with due diligence. the company is expected to provide more details on its strategy under incoming ceo in the coming weeks. >> they said it is a $21 a share in cash offer. arkhouse is saying they want to go to the shareholders if they don't get more of an opening from the company. if you look at the absence of

further updates, macy's shares have fallen since including after the company's announcement last thursday of the broad base the restuck restructuring. it is a cash offer. >> the journal is not going to get the vp position or cabinet. this is the past paragraph of the op-ed page on the 2024 republican choice. if they nominate mr. trump again, it is democracy. the worst system except for all the others. our unhappy guess is sooner or later, the choice of nominating mr. trump will end in tears for his voters. they are not going to jump on the bandwagon. we will see between now and november. it doesn't sound like they will. druckenmiller and who else? langone. >> kravis.

i don't think they're jumping on the bandwagon. the question is if she doesn't perform well in new hampshire. >> you heard what trump has said about her recently. if she drops out and endorses trump, will they be hugging? >> now she is going after the age. his age. >> after some confusion over the weekend. >> yeah. yeah. yeah. >> confusing her with nancy pelosi. >> you never would. that was unbelievable. it was bad enough when he congratulated the state of kansas on the chiefs win. now he's confusing nancy pelosi with nikki haley. it is a symbol of someone i'm mad about and i got the mad feeling. >> mad? >> mad feeling about this woman and that woman. >> brown hair? in the meantime, exxonmobil

is suing two investment firms. it is trying to block them from putting forward a shareholder proposal to commit the energy giant to curb the greenhouse emissions. exxon says the two investors became shareholders only to advanced proposals to dpiminish the business. they call these activists disguising as investors. they ask people to donate money to buy the shares and they move along with them. exxon's point is they should not ever get a chance to air the things, but brought the propo proposals again and again and lost t80% of the vote. it takes a lot of time and energy from the company -- by the way, i don't know if you remember last year at davos when we talked to ceos and they were

worried about the new proposal from the s.e.c. which would make it easier for my majority investors to get proxy proposals. it takes up a lot of time and energy from the companies. i don't think they are saying you can't ever do this, but corporates have risen to all kinds of prominence and including activists who really don't want to see the company succeed. that is their point here. >> exxon produced fossil fuels. i would not want esg activists lobbying the big three to make only evs. we know how that would go. >> their concern is it is not healthy for shareholders at large or employees at large. >> what happens if it is really cold? did you read that? parking lots of stalled evs. what temperature? does it happen to every single car or a fluke?

do you know? if it is 10 degrees and you are trying to charge, can you charge? >> there are differences. i have seen a lot of activity and things showing you how to better charge it. you need to make sure you have the right charging. it has to be a 120 instead of a 220 in terms of the voltage. that helps. >> anecdotally, i was here yesterday for three hours and i had to get a ride home. >> charge doesn't hold. >> my head would be exploding if that happened. in the meantime, reuters is reporting that citigroup ceo jane fraser had lunch with warren buffett where she outlined the efforts. in the conference call last week, buffett told her to keep going about the next round of reorganizations which would be shared this week. the lunch took place, but cannot

give details about the conversation. berkshire made a $3 billion bet on citi in 2022 and remained a top five shareholder as of the most recent data from september. citigroup shares are up 16 cents. elon musk is now denying the report that x a.i. is committing a $1 billion goal funding. musk called the report not accurate. musk lawunched xa.i. last year. he was criticized for safety measures and taking shots at openai. a firm he funded which has now partnered with microsoft. >> you can congratulate kansas. kansas city. it is really the kansas city chiefs. it is confusing.

>> no segue there. >> you think people just tuned in? >> yes. >> you think they tuned in the last minute? >> i do. that's how it works. >> that's their problem. >> they need to get up earlier. i'm worried about you. not them. all right. when we come back, we have the squawk planner ready for you and two key data points to determine the direction of fed policy. that's next. as you see the futures, they are higher this morning. dow up 61. nasdaq up 100. the s&p is indicated up 15 points. later this hour, we will talk china with kyle bass from hayman capital. "squawk box" will be right back. the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute

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on this week's "squawk planner sq planner," key economic data and durable gdp in the fourth quarter. on the earnings front, we hear from united airlines after the closing bell. tomorrow, we have johnson & johnson and 3m and ge and p&g and netflix. on wednesday, at&t and tesla. on thursday, intel, visa and comcast. joining us now to talk about everything we can expect is stephanie link from hightower.

stephanie, how much of the market is going to be driven by earnings? it may be the time it takes over for the fed again. >> i hope so. i hope we can focus on fundamentals and put the fed on pause for a little bit. i do think that the economy continues to do well, becky. that will propel earnings to be a little bit better than expected. i think the market can continue to be a little sloppy as we figure out what the fed will do six times in terms of cuts or three times or two times, whatever. i think fundamentals will win out. 9% of the companies are beating expectations. >> what do you think the markets are at with record highs? >> i think that we had this pause in the broadening out of the market. we had such a nice rally into

the end of last year at 9%. you had many sectors participate. the beginning of the year, we have seen tech takeover again. i think the expectations are quite high for technology. i think there are other values elsewhere. i hope that earnings will kind of just be more of a tailwind for those other sectors that haven't participated so far this year. >> for anybody looking for a slowdown, you have a good point. that is the amount of federal spending that's been passed and still hasn't hit the economy yet. >> so back in 2020, the fed had monetary and fiscal policy equal to 60% gdp because we closed the economy. we needed to do the big bang. we did. for perspective in 2008 with the

financial crisis, fiscal monetary policy put in place was 5% of u.s. gdp. we had enormous liquidity into the system. on top of all of the things we have seen over the last couple years, you had $2 trillion of infrastructure spend. that has really led to the manufacturing renaissance. especially onshoring and re reshoring and batteries and clean. we have seen companies talk about backlogs starting to build. we haven't seen that stimulus put in place. i do think that's been a nice tailwind for the economy as a whole. that is why we are seeing 2.5% gdp growth currently. >> are you talking about a barbell approach. you like energy and industrials. you like the tech names, too. why don't we run through the names you like the most. slumberge at the top of the list? >> we talk about earnings seeasn

being silly season. it was up 2.5% on friday. i think stock should absolutely re-rate. it is very cheap for the number one oilfield service company in the industry and trading at 14 times forward estimates. they had double free cash flow and they are starting to see the inflection in international and offshore activity. this company beat across the board. i don't think it gets the respect it should. >> how about ibm? >> ibm reports this week. we will have to see. they transition as well, becky. the company under the ceo has done a great job in terms of finding growth. it is not this mainframe company any more. it is focusing on the hot buttons and growth areas like a.i. and cloud and data center and quantum.

i think that 70% of the revenue is software and consulting. that is recurring revenue to help growth, but help margins as well. the stock did well up 27% last year. >> it did well, but not as well as some of the hottest technology names. is that your thesis? there is more room to run. >> exactly right. it was the best performing tech stock two years ago because it did not get hit like everything else two years ago. you will see a reversion this year. >> i'm not familiar with the animal health stock that you like here. elanco. the strong spending from consumers? >> i have four pets. i'm a big fan of animal health. you and i talked about it before. the industry leader. it trades at 37 times forward estimates as it should as the

industry leader. elanco is the number two player and i think there's a turn around story. a bunch of new products about to get approval which will help spur better demand in the second half of the year. you have internal fixes at the company in terms of inventory changes and really cutting costs and price increases as well. this stock trades at 15 times. you can buy and own both of them. one is a turn around and one is an industry leader. i do like the $62 billion addressable market these companies have to capitalize on. >> this is the spinoff from eli lily for pets and livestock? >> that's right. as they get the products moving toward approval and it helping

on the revenue side, you can expect ebita later this year. as they introduce the products and get more free cash flow, they can pay down that debt. >> stephanie, thank you for joining us. >> thank you. coming up, a legal challenge for apple. steve kovack will join us to talk about the regulatory hurdles. and later on, governor chris sununu will join us to talk about the new hampshire state primary which is happening tomorrow. "squawk box" will be right back. . kind. second, they have to be honest. and third, they have to be hard-working. it's very simple. wherever you are in the world, when you come to a different culture,

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apple under attack on several fronts. regulatory and anti-trust. it is an important stock, steve. >> this keeps happening for apple. they are putting restrictions on the ecosystem. more telling is how apple responds to the regulations and cases and tries to water them down. let me give you a couple of examples. you have the supreme court which declined to hear the epic games lawsuit. apple won that case except for one count. it is legally required to apps offer discounts by going to a separate web site for payments. that would give a 30% fee to apple. apple found a way around it offering 27% fees.

apple offered in the eu to have access to the wallet. other payment services can get in there as well. another concession is they will sell the apple watch without the blood oxygen sensor to comply with the import ban. they are still waiting to see how apple responds to the apple store and other core services. that is the big one to skirt around it the same way they have skirted around the smaller cases. it is a lot piling on here. >> in general, the s&p is at a new high. i thought my machine might be broken. you know what apple's market cap is right now? >> 2.7? >> 2.961. you know what microsoft's is

this morning? >> what? 3? >> 2.961. >> literally the same? >> literally. this is a point where you can't say exactly the same. one is 2. -- maybe i can't see. 2.963. it is changing. >> it would. >> they are right next to each other. >> i'm asking of joe because joe has his finger on the pulse of everything. >> he pre-ordered a vision pro. >> the what? >> pre-ordered it. >> if you could buy tapple or microsoft, i'm telling you now you cannot alllowed to sell the stock for 20 years. >> yeah. >> which one are you buying? >> microsoft. >> you would buy microsoft? >> most people think that way. >> it should be apple. >> the interesting thing with the regulatory stuff, apple is about to get hit where microsoft

was 20 years ago and they will have to go through the slog. it is interesting to see microsoft back at the top again and leading the innovation wave and apple is heading into it. >> there is a $1 trillion valuation in microsoft that is a.i. >> waiting to be unlocked. >> yes. it has to be unlocked to get to that value. i think there is almost no a.i. valuation built into apple at all. >> fair point. >> what is the issue for apple? a gag gadget maker? >> so much more than a gadget maker. the services and ecosystem. >> at the core of it. >> my son thinks so. >> it will get more dynamic with the a.i. tools they are selling. they are selling it to

consumers. they opened it up. they are the only ones doing it. >> i can't sell it for 20 years. what will i buy with it? there's not a lot i'm going to be doing. >> where will you be in 20 years? >> i will be right here. >> still here? >> right here. just for andrew to keep him honest. >> aboveground. >> he is never retiring. >> no. slab. coming up, kyle bass will join us next from hayman capital to talk about china and the new hampshire primary. we will also speak with jared bernsteiin. we have a lot to talk to him about this mniorng. do not go anywhere. "squawk box" rolls on. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. let's check it out.

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good morning. welcome back to "squawk box" live from the nasdaq market site in times square. checking the futures this morning. we have new highs after what happened on friday.

the best day since early december. looking at 62 points. big earnings week. we will have a lot of different data points and whenever a company reports the previous quarter, most of what you are listening for is how things look for the next quarter because you're already in it. a lot of people are watching for guidance. nasdaq is looking strong up 108. meantime, the hong kong hang seng index is down 8% as people are concerned about the economic front and the real estate secretary t sector. we have kyle bass from hayman capital. kyle, china was there in force with a big delegation in davos trying to say we are open for business. people are suggesting they are now open for business, if you believe them, is they

desperately need to jump start the economy. >> andrew, you mentioned the hang seng index down 8% in the last few days. it is january 22nd. if you look back to hong kong, the day the chinese communist party implemented the national security law in hong kong, calling the end of the protests and beginning of 2020 and end of 2019, the hong kong stock market is down 50%. over 50% lower. it has dropped every year in the last five years running. this is the beginning of the fifth year. call it four years straight. now down a whopping 12% in the first 22 days. the chinese stock market, andrew, is down over 15 years when the chinese economy has grown 500% in the last decade and and a half. you have lost one-third of your money.

at some point in time, western investors realized they are paying in to a losing bet and the communist party and investing in communism never works. >> so, let me ask you this, given one of the big clouds in the geopolitical conversation which impacts every business is whether you think that china is going to try to takeover taiwan? we talked about that multiple times and we talked about the efforts in ukraine being a dress rehearsal for how people think about this stuff. at the moment, if their economy is as challenged as you are suggesting, does it make it more or less likely they try to make a move on taiwan? the wisdom is they don't right now, but if your economy is not working and you are losing power or influence within your own people, there are politicians, they we have known, which have gone to war in those times. >> i'm in that camp, andrew. when you look at the composition

of the chinese economy, they are facing a real state collapse and a banking crisis and youth unemployment crisis that some academics in china say as high as 46% and north of 20% youth unemployment. they are experiencing a local government debt crisis. that local government debt in china is equal to a $13 trillion market. when xi jinping is looking at the epic regulatory failure and financial speculation failure, my guess is he wants to stay in power. as you know, when you look at the standing economy and the rest of the communist party, he has purged any member which had any allegiance to the prior leadership of china. everyone exists there because they owe their life to xi jinping in one way or another. you have a scenario where if he wants to hold on to power back

to your assertion, i believe that he ends up moving. geopolitically, you think about which u.s. administration would a chinese communist party want to challenge or think they could challenge successfully? the one we have now is probably the most passivie organization right now. >> it is so interesting. i was at a dinner last week where somebody stood up at the dinner and said here's the good news. in the next year, for now, china will do nothing because there's too many crises going on. they have their own crisis at hand. the new taiwan president is probably not going to try to poke the bear. china doesn't want to create a bigger mess given what is happening in ukraine or in israel or what is happening everywhere else. you think the next 12 months are even more at risk then?

the conventional wisdom in davos is the contrarian take on what really is going to happen. >> i stopped going to davos when they gave xi jinping the keynote and he explained he is the global good guy and we should all endeavor to be coping and emulating communism and communism with capitalistic characteristics. we have seen how well that's gone. davos is not crowd. it is not the north star of capitalism, for sure. >> do you want to weigh in on ron desantis and trump and nikki haley and how you think about all of them? some are clearly more hawkish than others? desantis is out of the race. it doesn't matter. >> i'm an amateur political analyst. >> a lot of your analysis very much has to do with geopolitics

and therefore politics. >> i think trump's going to have a rough go in d.c. i think he'll win the new york case. i think he will get a hung jury in the georgia case. he will get a hung jury in the florida case. there are never trumpers and democrats in d.c. will the gop get behind haley with the money and influence and try to unseat him as the gop rep? i think that is likely to happen. i think that's still a minority bet. i think it is a trump/haley race. i think haley can beat him. >> who says you are not a political analyst. kyle bass, we appreciate it. i have one comment, kyle.

when we see you, you are coming from your office. you have a beautiful american flag in a triangle behind you. today, you are coming to us from what looks like a bedroom with a flag or a bed spread behind you. where are you? >> my wife now works for the economist in paris. i'm visiting between dallas and paris. i did pack a proper bed spread that has an american flag on it. nbc and cnbc doesn't have a studio in paris, although the olympics are coming. you told me to stay in the guest bedroom today. >> we'll have to work on that. kyle bass, we appreciate it. have fun in paris. see you soon. >> thank you. take care. when we come back, we will tell you about the accounting probe at archer-daniels midland. that is next. you can get the best of llquawk box" in our podcast.

foow squawk pod and listen any time. we'll be right back.

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archer-daniels faced cfo on administerrative leave followin the nutrition business and the document request from the s.e.c. the company expects to delay the fourth quarter reports scheduled for late january. adm's nutrition business sells products for protein drinks and meat alternatives and animal feed. the products have been lagging behind the expectations because the decline in the plant based products. the stock down 14% on the news.

>> on administrative leave for something and they were still missing by a mile? if you are going to be creative in the accounting, give you numbers. >> beef up the industry. coming up, four teams remain in the hunt for the super bowl. we'll talk about the weekend's big games and take aways for the big sports betting companies. that's coming up right after this. gim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

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now for a look at in weekend's nfl playoff games and the betting landscape, let's

bring in patrick reece, director of the sports business program at washington u in st. louis. he is also the ceo of sports impacts in a market scale sports business contributor. patrick, it's good to see you. i think the most interesting -- not the most interesting thing, but the super bowl is x amount of betting dollars. that's coming up, and then the playoffs are -- there's a rule of thumb four times the amount? and what does that come out to? $64 billion. >> yeah, if you base it on last year's numbers, joe, talking to some of my sources in the industry. last year's super bowl the betting is 16 billion. the betting on the rest of the nfl playoffs is 4x. so i think this year we're going to see obviously a larger volume of betting because you have now more states that have legalized betting. >> that's what i was going to ask you, it's are probably -- can you just -- >> i would say this. i would say i base everything on

the super bowl. if last year's super bowl was 16 billion, i think this year's super bowl is going to be somewhere between 20 to $25 billion gambled. roughly this year we're talking about 80 billion on all the other playoff games combined. this past weekend, those four games estimate around 20 billion spent on wagering for those games. let me tell you, joe, right now the bookmakers are worried because detroit keeping winning, and everybody that's a casual fan is betting the lions. >> they looked -- i didn't bet on them. you know what i do, patrick? i do a lot of money line bets which aren't even money. a lot of -- with point spreads you don't even double your money, so you got to put a parlay on, it's harder. on any given sunday, as they used to say, if it's a 2.5 point spread just take the money line and at least get plus 180 or something like that. i had tampa bay.

tampa bay did not really -- that wasn't going to happen, but the other two games it could have been either/or, buffalo could have won. >> another heartbreaker for buffalo fan when is a kicker misses a kick. going back to the lions, right now based on the numbers you've got ten times more dollars bet on the lions right now, the four teams left, ten times the amount bet on them to win the super bowl. so there is a huge, huge exposure for the books. but part of this is it's funny how the casual sports fan is going to bet with their hearts rather than their heads, and a lot of casual sports fans love this dan campbell, jared goff redemption story, and that's why a lot of money is going down on the lions. >> he is a great coach. i mean, he was not -- there wasn't the slightest bit of -- he just said, look, do your job and we're having a lot of fun,

and this is not going to be a problem for us. it's all gravy for them, and govv hg goff has never played this well. what about streaming? the rights got to be more. the peacock stream game had the lowest numbers. it was streaming to do 23 million in streaming is the highest streaming numbers of anything ever, wasn't it? >> it was. and look, streaming is certainly not going anywhere because all of these leagues know that they covet the younger fan, and this is where younger fans are going. when i talked to my students later on this morning at class in wash u, these kids, some of them have never had cable. their parents may be cord cutters. this is where people are going. you still have to have linear because there are obviously plenty of people who still want to consume it that way, but you

have to go where people are, where the consumer is. we've seen soccer do this with apple. we're now seeing amazon try to throw a life raft at diamond sports group, and that bankruptcy ruling, absolutely you're going to see more of this in the future, in the nfl, and in most sports. >> the future looks really bright for the nfl. you combine the streaming revenue with, what, 25%, 30% increase in gambling revenue. those people that put money down, they're going to watch, so i don't think you can do a 25% increase in viewership, but certainly makes a lot more people want to watch. and now people are betting intragame on things happening too, patrick, right? >> yeah, that speaks to the technology. technology has infiltrated every aspect of life, every industry, including gambling. when you have these in-game bets, this is something where people bet on the fly. there are going to be lines not just before the game but during the game.

every quarter there's a point spread on who's going to score -- who's going to win that quarter, who's going to win that half, and these are exotic bets that increases engagement and boosts the business both for the league, the teams, and obviously the gambling companies. >> earlier i thought you said all my students that watch you and i was thinking that's nice, but you were saying all my students at wash u. >> none of them are watching at this hour, joe. >> i'm requestigoing to take it other way. >> one other financial nugget, secondary ticket prices, right now the lowest buy-in for the san francisco game is 800, the lowest buy-in for baltimore is 650. the highest priced ticket in san francisco 12,000, and baltimore 8,000. very affluent, not surprising that those prices are higher than what we're seeing in baltimore. >> taylor swift is not hurting the chiefs, either.

travis kelce hadn't had a touchdown in eight games and he had two. and he goes like this. i do that, andrew, i've done that to you. >> you do that in most broadcasts, don't you, joe? >> i saw that, super cute. it was. >> i know. >> it was nice. thank you, patrick. >> taylor. >> thanks. >> you're welcome. >> just click like, you can see my face. coming up, futures pointing to gains ahead of a big week for economic data and earnings. we're going to get you ready after the break, and wree' going to hit the heart button, back after this. rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants.

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good morning, everybody.

wall street looking to build on the s&p 500's road to all-time highs. fu futures in the green ahead of the open. we'll take a look at technicals. on the campaign trail, florida governor ron desantis ending his bid for the republican presidential nomination setting up a head-to-head between nikki haley and donald trump in new hampshire. governor chris sununu joins us ahead of the showdown in his state. and the iranian-backed houthis looking to ramp up attacks on shippers in the red sea and threatening a wider conflict. we've got the latest on what the u.s. response should be. that's straight ahead as the second hour of "squawk box" begins right now. ♪ good morning, and welcome back to "squawk box" right here on cnbc. we're back in new york and we're live from the nasdaq market site

in times square. i'm andrew ross sorkin along with becky quick and joe kernen. we've got the dow up about 63 points. nasdaq up about 100, and the s&p 500 looking to open 15.5 points higher. treasuries, when you look at the ten-year and the two-year note, zitting just at 4.096 on the ten-year and the two-year there at 4.387. let's also talk about energy, we spent some time with dan yurgen in davos, he was right, oil has not actually moved as much as you might think. given all the geopolitical head headwinds, and then crypto, bitcoin back down at $40,766. so it seems like buy the rumor, sell the news, at least on the short-term was the move in the past week or two. >> talked about it that day. if everybody can buy a little bit of the etf, they really all going to quadruple their money in a year and a half if it goes

to -- >> i mean, so the question is -- >> now it's acting like what you want, it's acting like a currency. >> at 40,000, is there more upside potential or downside potential at this point? >> i'm not excited about it, right? i wasn't excited 47. i don't know how long it takes. i figure it will go under 40, don't you think? >> i imagine it could at the rate it's going. but the question is it going down to 35,000, 38,000? >> it's probably not going to to 17. >> do you think it's retracing? >> no. but i don't think it's going to 500,000 tomorrow. someday maybe. florida governor ron desantis ending his bid for the 2024 republican nomination. desantis announced his decision in a video statement posted to x just before the new hampshire primary, which is tomorrow. quoting winston churchill and immediately endorsing former president donald trump. this is after desantis place add distant second behind trump in iowa in the caucuses and then

took his campaign to south carolina before quietly returning to fell. if you knew how to catch fire -- we've seen enough over our lives, right? we just never understand how -- or jeb bush, never really could figure that out. >> things can change pretty rapidly. >> i remember when they settled on kerry. where'd bill clinton come from? how did that happen? >> gary harp, if he hadn't taken that trip on the yacht or whatever -- >> monkey business. >> if you get on a yacht, that should be your first clue. the yacht's name is monkey business. that should have been his first clue. >> bad optics. >> i don't know, how do you catch fire? ron desantis, hey, i was a good governor. vote for me. that was it, right? in his view, that was -- and then he didn't -- you do no media, you don't do -- it was never going to happen, was it? >> well, for a while people

thought that it was going to happen. >> he never -- he didn't go out. he didn't go on tv -- >> there was a moment, this actually maybe speaks to media. i remember having a conversation with the irceo of a major media company that has a news organization in it, not our own, and i said do you think it's possible in the future a candidate could make it through the entire election without actually going on what might be described as msm or whatever, right? at the time they were going -- desantis was going on twitter, fox fox, and doing podcasts, and i thought is it possible but you'd see his ratings in the polls and you'd think is it possible? >> i think it's possible in the future, sure. >> maybe, but maybe ultimately what you do need is real reach. he seemed to miss that reach zb there was some arrogance there that you don't need to do certain things. we tried and tried and tried and tried. you know, sometimes you have people that are telling the candidate what to do, and they

have no idea, their staff. >> the new year looks to have brought a new wave of optimism to the economy. senior economics reporter steve liesman, who covers the dismal science has more on this upbeat story. good morning, steve. >> hey, becky. yeah, in contrast to the inflation funk that's been all around the country, looks to be a rash of optimism breaking out over the economy among boath businesses and consumers. the latest nabe survey finds the three-month outlook for sales outlooks surges, that's the highest percentage since the second quarter of 2021. a net 30% see improved profit margins, which is above the pre-pandemic level and the best since 2015. fewer businesses are expecting to charge higher prices, though a larger percentage see higher costs ahead.

the level is below the long-run average for the series. nabe president, morgan stanley chief economist writing the january 2024 business conditions survey results suggest broad improvement with responsibilities reporting rising sales, profit margins, and capital spending while supply chains are improving as well. while it's not entirely clear what's driving renewed business sentiment, it could be the same thing that's driving consumer sentiment, higher lower inflation. the prospect that recession may have been avoided while the fed could be cutting interest rates. a maybe on friday the university of michigan reported the biggest one-month surge in consumer sentiment since 2005. sentiment remains well below the 2019 level, but it has rocketed up two months in a row. there were some areas of concern in the nabe survey. 72% of businesses say they're passing along price increases to consumer. that'sup from 65% on the prior

survey. hiring was muted and wage growth is still expected to be strong. there are challenges. they come with businesses and consumers more upbeat about the outlook than they have been. >> what else should we be watching on this front? what are we going to get the feeling over the next couple of weeks, steve? >> well, i think a couple of things. oil prices seem to be very important for consumer sentiment. if you care about consumers being happy, keeping oil prices down, i think is very important, and i think businesses are very attuned to inflation. i think as inflation comes down -- and i'll just say one more thing, becky. i've been covering these sentiment numbers for a lot of years. i don't care so much about the consumer sentiment numbers. i think people still spend when they're depressed. >> yeah. >> i think business sentiment matters more. i think if you're sitting there deciding whether or not to make an investment that has consequences for the economy, how you feel about the outlook is very consequential, and so i'm happy to see these nabe

business numbers be higher and i'll be watching the cfo surveys as well. the idea that people are more upbeat, i think it matters here. >> you've got 9% inflation, it's tough to raise your prices and get them to stick when you're doing that, but i can -- they can do 3 in their sleep. they're not going to -- they can do -- i think as inflation moderates-- and they love raising prices. we've even seen the president say that's responsible for a lot of the inflation, it's companies knowing they can raise prices, and they're doing it. if all they've got to do is match 3% on the input costs, that's like three doritos they take out of a bag or something. they can definitely do that. >> i'm going to push back just a little bit on that. i understand exactly what you're saying, and i agree with you. i think that after you go through a time when you did well because you could raise prices, it becomes a more challenging

environment to do well when praises a prices aren't going up as much. i think there's going to be some revelations about who's good and who's bad, the story about when the tide goes out, who's wearing swimming trunks. if you get back down to a normal inflationary level we're going to see who the good businesses are ask who the bad ones are. >> or who's wearing one of those euro speedos. >> is that what you were doing over in switzerland? >> i'm thinking faber again, because he's like a championship -- he doesn't need any drag, so i think he wears those things. i'm not kidding. >> joe, i was picturing you with knee high socks and those baggy pants going cross country skiing. >> you won't do it? >> what's the guy's name with the yellow one piece? what's his name? >> oh, borat. >> i got the borat thing going. can't unsee that. >> thank you. >> you're welcome. futures climbing as wall street looks for the s&p 500 to

build on all-time highs. look, some technical indicators, katie stockton, fair lead strategy founder, managing partner. we had that good end of year run, and then some consolidation. are we back on track, do you think, for the s&p and what is near-term, intermediate term, how does it look? >> well, i mean, as of friday we have new all-time highs. as a technician, that's the kind of stuff we get excited about, right? we have an unconfirmed breakout, so that would be confirmed this friday. we always wait for those two weekly closes above for confirmation. assuming that happens, we can then kind of set our sights on the next measured move price objectives. we've talked about it here in the past. 6100 from the breakout to new highs is a long-term measured trajectory. which assumes the trajectory off the trend of the covid corrected

low will maintain itself. it does steeem a bit aggressive with that in mind. it does dictate a bullish bias, and by the definition of new highs it means there's no resistance left on the charts. it does tend to generate additional momentum. also, sentiment tends to shift. maybe we're seeing that on the economic front as well as a way to justify the new highs. we're excited about it. >> apple is looking better. we need the magic seven, whatever they are. we need to lead us higher, don't we? >> well, you know, microsoft is bigger than apple and it looks great. i just posted a chart. yeah, so it has this long-term cup and handle formation. it's a bullish setup, and then it also broke out from a consolidation phase. ap apple is reacting to short-term oversold conditions near support. it is certainly disadvantaged as chart relative to something like

microsoft or nvidia. i think we've seen breadth expand enough and participation among the maga caps strong enough to sustain the market even if apple isn't really participating. so you know, financials to a lesser degree, industrials, maybe health care may be kicking in here. i think that could pick up the slack if we see weakness from technology. technology has exhibited upside leadership on up days. you saw that big time last week in the semiconductor sector, and nvidia of course is the kind of poster child there with a big breakout of its own. the semis tend to exhibit upside leadership and stronger takes. >> can we figure out whether we get the rate cuts that we're expecting from the ten-year, not necessarily because we could get -- we could just steepen the yield curve. short-term rates could come down from the cuts, but the ten-year could stay where it is. maybe that's not what we kwuse. what does the ten-year look like

at this point? are we headed to 5% or headed to 3%? >> i would say low 3 seems pretty realistic on the chart. i say that because the momentum shift is pretty evident on a long-term basis. if you pull down a bar chart, it took sort of a three-year shift in momentums and it is meaningful, and it does suggest that this oversold bounce or relief rally in yields we've seen up to the 50 day moving average should be viewed right now counter trend. we're looking for the downdraft to resume. perhaps at not such an explosive pace as we saw in q4 but something that should drift sideways to lower and also take out initial support, which is about 3.75. >> do you think bitcoin goes below 40,000? >> i do but not for long. you know, i want to respect the uptrend behind bitcoin and the series of breakouts that

preceded this pullback. it is a sell the news event that we've seen in the spot bitcoin etf announcement, but what's been really interesting is to see the relative strength shift in favor of ether since that happened. i'm a little bit more excited about ether right now in terms of its trend and momentum. but bitcoin's pullback will ultimately give us an opportunity for those that want to trade it to add exposure to the weakness. there is support around 39,000. >> 36 is kind of a key level tr me. it's a fibonacci retracement. we'll see if that holds. that would be the key level. >> you just, you know, we just finished it. so the fibonacci number, is that what you were saying? both of you guys. >> you both mentioned that to me earlier. the fibonacci 36. >> i was looking at some of the trend lines. >> katie, thank you, that's why you're on. >> smarter than we are. >> a chartist, i guess. >> i'm going to look him up. and i'm going to start -- when

you come on, i'm going to know exactly what you're talking about from now on. what a switch. thank you, katie, see you later. coming up on the other side of this, former president trump facing off against nikki haley in the new hampshire primary, after ron desantis dropping out. new hampshire governor chris sununu is going to join us next. fodeand later, palantir counr and investor joe lonsdale is going to be our guest. squ "squawk box" coming right back. and relentlessly work with you to make them real. a force to be reckon with. no, not you saquon. hm? you! your business bank account with quickbooks money, now earns 5% apy. 5% apy? that's new! yup, that's how you business differently.

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with a partner that always ♪ ♪s you first. ♪ ♪ welcome back, everything. we are one day away from the first gop primary and second nominating contest in the 2024 presidential race. our next guest is host and campaigner in his home state of new hampshire. i want to welcome governor chris sununu of new hampshire. he endorsed nikki haley's candidacy last month and he's hit the campaign trail with her ahead of tomorrow's vote and, governor, thank you for being here with us. >> you bet, you bet.

it's been exciting. >> let's talk a little bit about this. first of all, what do you think haley's prospects are in your state? >> she's already exceeded expectations, right? there were a whole bunch of candidates in the race, every single one she's knocked out. we were hoping to build on the momentum. she had a strong finish in iowa. the real goal is to keep building on that so she can take more momentum into her home state of south carolina where there will be three or four weeks or something like that between new hampshire and south carolina, a state where as a former governor she's won. she knows the people, she's had a lot of success there delivering results. so that's really the goal. so we've achieved those goals. she's now the only candidate left other than donald trump giving folks a very clear decision, in some ways a very easy decision, and now it's about getting out the vote. that's really what this is. we want as many folks to come out as possible. a high voter turnout will help nikki. >> if she loses in your state and loses in her state, what are the odds that she can stay in this? >> well, new hampshire's never been a must win state for nikki

haley. no one's ever said that, she just needs to show a lot of success and momentum. and then build on that into south carolina. now, that's a month away. i mean, we'll see where that goes. she has all the potential in the world to challenge trump and beat trump in her home state given all the previous success she's had there. right now we're focused on the next 48 hours getting the vote out. she's the only one on the ground connecting with voters. she's doing the retail politics. she's making meaningful connections. she's going to businesses and craft breweries and town halls. we were at the hockey game yesterday meeting hundreds and hundreds of voters. those things matter. trump flies in, does a rally and flies out. he's not doing the retail politics, the retail connection. that's why she's had such success here to date. over the next 48 hours, this is about kind of putting her over the top. >> why did you choose haley over not just desantis but over former president trump to begin with? >> so look, there's a couple reasons. you look at her background as a governor, governors get stuff done. they don't make excuses for not

building the wall. they don't make excuses for not draining the swamp. trump does that all day long. haley as a governor knows you don't make excuses, you just get stuff done. as governor she was incredibly successful. you have the international piece. i don't remember a time when international issues were so at the forefront, probably since the early '90s of america's importance in terms of being strong and bringing world peace, making sure we don't get ourselves into wars. she brings that expertise better than anyone. at the end of the day, she's just genuine. she makes a genuine connection with folks. she's a strong conservative. because she's such a connected person, she has a broad spectrum of appeal to everybody. that's what you want in a candidate, strong conservative values that then bring the younger -- the young republicans that left the party, we want them back in. those republicans, suburban moms who in '20 and '22 left the party, she brings them back in. she makes this party bigger and being a good retail politician, she has that connection.

a little bit of live free or die thing in her if you think of it that way. >> governor, you can make sense forever. i'm not sure if anything really changes. in other words, i'm nodding with everything you're saying. there's an op-ed piece in the journal today. there is one scenario and we just said kyle bass on it saying in washington, d.c., it's possible you could get a felony conviction. that could change the landscape for president trump. didn't think florida, didn't think new york, but maybe d.c. so that might change things because 31% maybe don't -- maybe it does, maybe it doesn't. maybe it em boldens the base even more. tim scott was going to never -- even ron desantis when it was all said and done turned around and finally endorsed the president. if it doesn't work out for governor haley, ambassador haley, whatever you want to call her, three months from now will

you be working for donald trump to get him elected if he's the nominee? >> i've always said -- i've always said -- >> what would you do? who would you -- >> not even thinking there. joe, i'm not -- for me that's a crazy hypothetical right now because my only focus is -- >> it will never happen? >> i'm saying i'm not thinking about that. >> you will never say i'm supporting the republican nominee, those words will never come out of your mouth? >> joe, let's be clear, i've always said we're going to vote republican in this thing. we're supporting the republican nominee, let's not be silly. the only focus is showing that momentum nikki's built. that's the mission. >> it's tough for everybody to figure out what to do and everybody ends up looking like, you know, you used to be saying this, now here you are, and it's weird the way the inevitability of it no matter how high minded someone tries to be, you might end up with former president trump as your nominee, chris. >> this is new hampshire

politics. nothing is inevitable, we always buck the trend. watch what happens. >> okay, all right. >> governor sununu, thank you for joining us. >> live free or die. >> coming up on the other side of this, ai was a hot topic in davos last week. we're going to hear from tech investor and palantir, joe lonsdale. the future is right now in the green. 75 points on the dow, looking at the nasdaq up about 120 points. the p 0 oks&50loing to open about 18 points higher. we're coming right back. more efficiency. more benefits. more growth. when you realize you can give your people everything, and more. thank you very much. [applause] ask, "now what?" here's what. you go with prudential to protect, empower and grow. with everything you need to deliver, you guessed it... more. one more thing... who's your rock? learn more at prudential.com

coming up, tech investor joe lonsdale will join us. and in the next hour, council of economic adviser's chairman jared bernstein will be our guest. "squawk box" will be right back. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

welcome back to "squawk box," ai taking center stage last week at davos, alongside discussions of the russian ukraine war and the israel-hamas war. joining us, joe lonsdale is here founding partner with hbc, he's also cofounder of palantir and cofounder of a self-described free speech university in austin, which i want to talk to you about. but i want to ask you, i want to start with an ai question. everybody was going, you know, ai crazy in davos, and the thing

that i can't figure out is whether ai is going to be so pervasive that it becomes sort of a commoditized feature of basically every piece of software that everybody has, or whether it's actually going to be -- going to ultimately create new stand-alone products that create new value. meaning, you look at some of these -- if it's just going to be a feature of everything, then the question is how much more value is it creating in these -- in the companies that already exist or the new companies, do you see what i'm saying? >> ai, andrew, is going to be something that impacts productivity. what are we all doing with these markets, these businesses. you want to create more with less. when you have something like electricity, it takes decades to work its way through everything. i think 30 years and you finally have factories designed to use electricity. even in the first decade it did a lot of other things. we're seeing already how it could raise the margins, how it could address things. i'll give you one example,

health care billings, a 280 billion revenue area, and we're already seeing how ai is probably going to be able to double the margins in that area, which means you pull $100 billion of spend out of the economy. that's new wealth it creates. >> you think in the next five years that that happens? >> i think you actually see by the mid to late 2020s economic numbers showing up where productivity has gone up. >> do you think, though, i was thinking con ed, it's not a great high flyer stock because at some point it does become commoditized. is there a period that's like a renaissance and then it gets commoditized? the other thing i worry about or think about is whether we're in 1996 or 1999 where there's going to be too much of an almost over investment this this area, and there's going to be a complete -- a lot of collateral damage when it's over. >> the way markets work, there's always over investment. there's a few big platforms that emerge that are going to be extraordinarily valuable. you have amazon born, google

born. you have a lot of other things that there's too much hype. you have infrastructure for ai that makes a lot of money. is and then the whole economy benefits. the productivity goes up as much as it's going to do, that makes money for every one of us. that's a good thing for the whole society. >> do you think there's more value in the software piece or the hardware piece. one of the things that i think has been fascinating to hear, people were talking about it in davos, sam altman was there from ai, looking around to raise money to actually start manufacturing chips. in the old world chips were never considered a valuable thing to do. maybe in ten years there will be an over abundance of chips and nobody will care about chips anymore. for the next five or ten years. >> the infrastructure of chips, if you can make chips commoditized, the rest of us are going to be well off. the most money is going to be made for the s&p 500, for the big companies that are more

productive overall. we need the chips to do that. sam's thinking how can i apply this technology, how do i scale it, there's a scarcity of chips. it's really smart to do. >> in the defense world, how do you think it fundamentally changes things? we were talking to your cofounder alex carp about sort of how ai is going to impact his business. he's leveraging chatgpt and some of these other large language models as well. do you have to create your own model? is it about taking someone else's model and applying it to what you do. >> in the defense world, software is becoming more important. ai makes software determinative in defense. we have these new companies needed in defense. the big defense contractors, they're good at hardware, bad sat software. >> what does that mean deter determinate? determining what lines you kind of follow? >> it means determining what technologies are dominant in warfare? if you have ai being as good as

it is now, suddenly it really, really matters to have the best software. if you're going to be doing like -- you want to get a certain amount of money for a certain amount of jutcome, you' going to be building a thousand awe autonomous drones. >> i know that -- i think you think bitcoin is real, right? my question now, it's become mainstream to the point of etfs, i think it will be harder to go higher quickly now, unlike -- it was supposed to be that everyone can get in now and that all the etf companies are going to need to buy bitcoin to put it in the etfs. to me it's like if you bought it at $800 or $8,000, you were smart, you went to a lot of trouble to buy it. now everyone can buy it. i think it's going to be here for a while. >> there's not going to be a whole new financial story driving it from the side of buyers necessarily.

although there's one type of buyer that could be very important. ai agents are going to start doing a lot of things in our economy. for ai agents to coordinate with incentive systems, probably going to use crypto. if this ai story works out in consumer areas -- >> everything to ai, yeah. >> do you, you know, cathie wood 500,000, a million, that's -- for -- >> they're not going to be trading bitcoin. they might be using ethereum, other things. >> those are the three they might use and they're probably all correlated at the end of the day. the 500,000 story for me, joe, is more about the macro question are we going to be in a massive deficit in '25 and '26 and spending money willy nilly. if so, what asset is safe. bonds sell off with the crazy government spending. that's a story i'm hearing from a lot of my friends who know macro better than me. >> they were not going from 100% debt to gdp back then just by waving a magic wand, are we?

how are we going to do that? >> got to fire a lot of people. >> i want to talk about this new university you're starting. you have 100 new students that are going to start in the fall. it really is about free speech is and free thinking. i ran into neil ferguson in davos, he's one of your cofounders, you're doing it with barry weiss. of these 100 students, what is their world view for the most part? >> we want to have one of our top universities actually bringing people together who want to be part of the solution, who want to be thinking about a future that's more optimistic. our culture has gotten too negative, too censored. it's very easy to criticize the man in the arena. let's try to be the man in the arena. they're all going to be be going for free. we're looking for the best and brightest. we want to have america's elite be part of something that's functional. >> did you see larry somers going after harvard over the weekend saying how unhappy he is

about one of the cochairs that's been pointed to this anti-semitism group has a bizarre history really as sort of an anti-israel, i don't know how you'd describe it, and so larry was out there saying how is it possible that harvard is appointing this professor. he's saying the professor could be on the committee maybe, or a professor at harvard, but to the point this particular individual would be the cochair of this group was bizarre. >> i thought he was a star there, you have anti-semitism, collectivism, these things tend to go together. it's a canary in the coal mine, when society is attacking the jews that shows something is very wrong for that area. >> joe, it's great to see you. thanks for coming in. >> thanks. >> we'll get you up to speed on this morning's biggest stock moves. the latest in the ongoing situation in the red sea. we will talk to admiral james staph ree din e ob sothglal impact. stay tuned, you're watching "squawk box" and this is cnbc.

let's get to dom chu with a look at this morning's premarket movers, probably in a good mood. you're lucky.

you're lucky. it wasn't a given, hey, dom. >> no, there was not a lot. i will fire through those movers and then we'll get to what you're talking about right now. so let's start here, joe, with a check on macy's. the department store chain behind its name sake brands bloomingdales, blue mercury stores. it's up roughly 4.5% right now just around over 30,000 shares of trading volume premarket. it said it has rejected a $5.8 billion proposal from arkhouse management and brigade capital to take it private. arkhouse is and brigade partnered to pay 21 bucks a share for macy's and macy's rebuffed the bid over the valuation of the price being paid. macy's shares up 4% on that bit of news. shares of archer daniels midland, they've shed nearly 12% of their value, close to 170,000 shares of volume. the food processor, farm supply company is the subject of a probe by the securities and

exchange commission with regard to some of its accounting practices related to its nutrition business. they have placed their chief financial officer on administrative leave effective immediate skpli lowered its profit forecast adds well. analysts teams have downgraded the stock this morning, watch adm down about 12.5%. we'll end with an analyst call on rails. shares of norfolk southern and union pacific catching a bid up roughly 1% in the premarket. bernstein analysts have upgraded both railroad stocks to outperform and raised both price targets. they cited better macro trends and freight cycles. keep an eye on those rails and now i'm happy to talk about some of those moves that you saw this weekend across all sports. >> funny, though, the best teams seemed to get there, though, doesn't it seem that way? >> the 1 and 3s for both sides. i think this is the interesting part about this. you know, everybody -- the afc side seems way more compelling

right now, right? with regard to the story lines there. it comes back down to lamar jackson, josh allen and patrick mahomes, and patrick mahomes is of course the defending super bowl champion in quarterbacks and whatnot. this idea that you could have this many topnotch teams, topnotch players, all of these great quarterbacks that are playing right now i think is an amazing thing. by the way, you've got to feel good for the city of detroit right now. some of the best playoff success they've seen since the 1950s and '60s. this is a huge thing for the city as well. >> i was talking about green bay too. >> well, yes. >> got to feel good for green bay and that quarterback. i think he might be it. >> here's what i would say, there's a lot of i guess conflicting feelsiings i have here, right? on the one hand i was sitting there with some friends watching the game. obviously watched it all the way through. it was excruciating to kind of sit there and go through it. at the same time, the packers team looks really good, and this

is a packers team that, remember, smoked the dallas cowboys the week prior to that, and jordan love is going to have a huge bright future in this league, but it makes me also feel good that the niners could beat a team like the packers that really trounced the cowboys the week prior. so i think, you know, i don't want to feel so confident about it, but i feel like the niners, they're pretty good right now. they just got to get deebo samuels sorted out. >> that's what i mean, this was without him. i don't know, that running back is like a freak of nature. >> christian mccaffrey i think is the offensive player of the year. i don't vote on this stuff. >> is he 6 feet tall? or is that generous? >> no, i'm not sure he is. i can tell you he's probably -- >> he's got those legs, i guess. >> that big 30 -- a 39 yard run, breaking so many tackles. >> i think it might be called talent and speed. >> i think it's some god-given talent, yes. >> you have that -- you're not

fast. your golf swing is so slow, that's your whole stick -- >> i hear the music playing so i'm going to stop, but nick dunlap being the first amateur to win a pga event since phil mickelson in 1991, we could go through a whole other dissertation. >> i'motoi t n gngo go where i was thinking with what's going on in golf. thanks, dom, "squawk box" will be right back.

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the u.s. military calling off the search for two navy s.e.a.l.s lost at sea during a mission to intercept iranian-made weapons before reaching houthi rebels in yemen. the raid in the arrayian sea conducted on january 11th, and the navy seized an array of weaponry including cruise and ballistic missile components. joining us with more is retired u.s. navy admiral james stavridis, a former nato supreme allied commander, now carlisle

groups global affairs vice chair and nbc news chief international analyst, and admiral, thanks for joining us. i mean, you add up all the things, all the trouble that iran has been fomenting or causing and the list is long. they say we haven't lost anyone yet. you can almost directly tie the loss of these two great men, these navy s.e.a.l.s. iran is to blame for all of this stuff but the biden administration has a tough task, because members of the democratic party say you have to declare war to launch another strike against the houthis. >> let's start with the three hs. houthis, hezbollah, hamas. i get it. it's confusing. one more wrinkle in this endless frustration called the middle east, but you're right. you can forget all of those names and simply substitute the

word "iran." iran is the proxy, the puppet master, the leader of these proxies, and as we saw in the tragic death of these two navy s.e.a.l.s -- by the way, fulfilling their mission, their job. to go and find that kind of materiel, and i argue they are contributing to our security with their very lives. but you're right, joe. the administration's choices are unenviable, particularly in an election year. no one wants to get dragged back into the middle east. that's why there are speed breaks both from the left, in terms you point out, do they need a war resolution? and on the right, funding. a tough basket for the administration, but on the houthis, to conclude, they have to be addressed. otherwise, to the point of "squawk box" and business and the global supply chain, we're just going to see oil prices and

prices of goods in ex-erably continue to rise. that's not acceptable either. >> frustrating, and annoying, that iran knows exactly how far to take things. they don't want the big conflict either. but they know exactly what they're doing, just a thorn in the west's side, and down the road, might not always be like that. if they ever really did get enough materiel and know-how to make a bomb, they're capable of doing the unthinkable. >> unfortunately, they are. someone asked me at a speech i was giving last night, what do you worry about the most? and's frankly, the answer is, iran. because of precisely that point. make sure iran in the current circumstance, fw it was nuclear armed, it's completely unacceptable, because they don't have boundaries in what they're doing at the far end of this.

particularly when it comes to israel. so in addition to the tactical responses all along the way, we have to be mindful of that strategic imperative. iran simply cannot be put in a position where they can obtain a nuclear weapon. >> admiral, we've been talking about this as a means for making sure commerce can continue, and that's even the name of this mission as it started. you've now seen american lives lost defending the commerce aspect of this. first of all, how many american lives are at risk? second of all, is it fair to say this is commerce or is this a much bigger issue and should we stop saying that this is commerce? >> i think it is a bigger issue, and asyou correctly point out, becky, the name of the mission is "operation prosperity guardian." probably not the best choice. i think this is much bigger than that. it gets to the issuing, joe and i just discussed a moment ago, of facing these challenges in a

way that doesn't drag us into a massive war, but at the same time, addresses not just the prosperity piece, but the strategic encroachment of iran throughout the middle east directed against our allies, partners and friends. by the way, it's not just israel here. iran would love to topple regimes in iraq, for example. certainly they have their eye on saudi arabia and the gulf arab states with whom they have historical confrontations. yes, it's bigger. good news. i don't see a scenario at this point we'll put big numbers of boots on the ground. i think we're going to continue to do this from the air, strategically, with cybersecurity, wok through our own allies, partners and friends. partner with israel, partner with the gulf arabs. this is not going to turn into iraq ii but got to make sure it

doesn't. >> we need to do them, but can't do them, because you need to be ready to do something -- work back in the obama administration, a terrible precedent, but would you advice we put a red line in what the houthis are doing? cross it, we have to do something then? >> i am not one to believe in red lines exactly the reason you prescribe. we've got to keep our tactical flexibility. i think what the administration should be doing and probably will is amp-up the level of strikes against the maritime side of what the houthis are bringing to the table. >> admiral, thank you. as always, appreciate it. >> you bet. meantime breaking news to bring you. sunoco awe'ving a terminal and pipeline new star, all-stock transaction valued $7.3 billion includes a student debt combined companies say see at least

$150,000 of runway synergies they say by the third year of the deal. transactions unanimously approved by board of directors. both companies are expected to close second quarter of 2024 they say. looking right now at newstar up big obviously. by 17, 18% there. sunoco, knocked down. in terms it thinking how that arbitrage might work. still to come on "squawk box," on the markets, and council of economic advisers jared bernstein will join us. "squawbo wl rhtack x"ilbeig bk.

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♪ you don't... ♪ ♪ you don't have to worry... ♪ good morning. stock futures in the green to start the week after the dow and s&p hit all-time highs friday. new focus this week. full slate of earnings in new gdp and inflation data. boeing in the red again. airlines should check door plugs in another 737 nodal different than the one that suffered the blowout earlier in the month. we're going to talk about it. and gop fields for the presidential nomination is shrinking again. florida governor ron desantis is out leaving former south

carolina governor nikki haley the sole challenger to president trump. the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site. excuse me. in times square. i'm joe kernen along with becky quick and andrew ross sorkin, and we're seeing some continuation of that big gain we saw on friday. another 96 points tacked on on the dow jones before the open here, and the s&p indicated up about 20 and a strong nasdaq. big earnings week. a lot of results from varied insundried company, and as i said, record closes friday for the dow and s&p 500, and

treasury yields this morning about 4.1 on the ten year or so, 4.088. among today's top stories fear following, boeing shares lower. faa recommending airlines flying a different jet. its 737 900er model. check the plug plugs. not calling it a door. allowed to call it a door? you going to hit me? the door plug, make sure they're properly secured. important to note these are not the 737 max models. like the one that suffered the blowout, the door plug blowout january 5th and faa hasn't issued a grounding yet for these it planes. those in question primarily operated by a couple of lesser-known airlines like delta and united. alaska also airlines. >> i mean, this is, it's because the manufacturing process, they

make them all with the holes. then later go back and plug the holes, if you don't have that configuration internally. >> saves money. >> it saves money. cheaper form of production and can do it faster. >> right. if you're making a fuselage, nice to have, like, the steel really -- not have a part where you've plugged. not for nothing. i mean, any wall you have, it's nice ifs -- >> an actual -- >> solid. >> having said that, though, there's doors. >> yeah. >> there are doors on fuse rauchs. the question issish did- >> tighter and a latch. the issue. >> right. >> you would think, though, you should be able to permanently plug it pretty well from an engineering perspective. >> yes. >> even if the door does open tech lick any. >> tightening the bolts the guy wouldn't get to the point, yeah, seems tight. you'd want it tight as you could -- we don't know. have no idea. macy's rejected a nearly $6 billion proposal to take the

department store operator private. citing concerns over deal valuation and financing. archouse management and brigade management made the offer. "wall street journal report"ed before the macy's rejection archouse threatened to bring the matter directly to other macy's shareholders. shares of agra business, placing cfo on administrative leave. says it's undergoing an investigation guarding some of its accounting practices. adm is cooperating with the s.e.c. back to the broader markets and new all-time highs. mike santoli joins us looking into whether the rally can keep its legs. this is a question we've asked for a while, mike. >> for sure, becky. a long wait for a between all-time highs for s&p 500. you see the full span here. first trading day of 2022 was the last one. you can look at history maybe

get a clue whether we can continue to the upside. when s.e.c. spent more than a year below performance high and breaks to a new one. two years, this time. overwhelmingly, 6, 12 months forward positive gains. hot every time. better than average returns. better frequency of gains. what, of course, you had happen in here was 500 basis points of fed tightening, a massive generational inflation shock. ten year treasury yields went from 1 poun 5 back to 5 and now closer to 4. a lot going on there. this breakout here, s&p 500 definitely has been flattened by bigger tech stocks. look at equal-weighted s&p 500, a great run to finish 2023. a one-year chart. just the past year. at these levels basically early february then july. still doesn't seem like you've

completely given back a lot of that fourth quarter rally. ho hang in there. capitalizing on general economic news, better than expected retail sales, jobless claims, things like that and not hinge everything whether there's a march rate cut. odd came down substantially the last few weeks pcht in terms of the big winners driving things. look at nvidia compared to the nasdaq 100. only a six-month chart. up -- wasn't able to pull it up. trust me on this one. having trouble with the multiline charts here, but nvidia added 250 billion dollars, a quarter trillion dollars onto its market cap year can-to-date. three weeks. about half the net market cap gain of total s&p 500. obviously, able to complain it's not been a broad rally this latest stretch, but i don't think that undermines the bull case completely. >> equal rate s&p chart really interesting. peaks and valleys, i guess.

especially between august peak down to november and then back up so quickly. was that all fed and economy driven? >> it was largely, i would say rate driven one way or another. there's greater sensitivity below the surface of the s&p 500, it seems,s to what yields are doing and whether people feel they're gaining momentum to the upside. going on there. people deciding too much treasury supply. non-fundamental gain in treasury yields. so a lot of it is that, but it does lax and wane with general confidence in the soft landing scenario one way or another. it's a cleaner view of what the typical stock is up to. >> all right. mike, thank you. >> yep. joining us to talk on-set about the markets and the new all-time highs, gabriel is here for the americas at jpmorgan asset margaret. >> good morning. >> new highs, or do the chais beget reconsideration where to go next? >> over time we do see all-time

highs beget new all-time highs. the next decade expect annualized returns 7%. should spend a lot of time all-time highs. >> great. okay. >> no. but truthfully, in themes of very short term, right, as mike was just pointing out, a lot of this driven, again, by the magnificent seven. very much depends what we get out of earnings that start next week. not just in terms of fourth quarter earnings from big tech companies. most importantly the guidance for this year. expectations are already high. look at multiple, concentration in index, all-time highs. can earnings catch up to weight in the index? the overall level. most excited about, actually the equal weight index all the other sectors, and there it will depend on right-sizing some expectations around growth added inflation and rates coming down.

>> the extent telling people to rotate, how do you tell them to do so? >> first off, fine tuning, talk about investing in stocks. right? specifically, we spent all of last year talking about the mag seven. seven individual company. we like some more than others. the second thing is think more broadly about this a.i. theme. last year about pricing in the first winners to monetize, this transformative technology and can sprinkle through to other winners. not just hyper, large and mid-cap and saw it late last year. doing consolidation here. also excited about other sectors. sectors like health care, whether it's cyclicly, parts of medical services picking back up, suffered during the pandemic, huge transformative effect of drugs. like industrials. seeing huge industrial policy and spending on defense. lastly, utilities. kind of a boring defensive

stock, but discount it and actually pretty exciting long sturm trends there. >> given just the volume, number of folks watching who own the magnificent seven. what are you telling them to do? >> telling them to look at them very carefully, i know, but -- what does that mean? >> risk management. do i want 33% of my u.s. equity exposure on just these companies? and do i actually prefer some of them more than others? so actually think about it act actively -- rather than receiving that passively. >> all seven stocks on the board. >> we like some of them very much. i'm not allowed to talk about specific ones. >> specific ones? >> no. i'm not an analyst, actual corporate company analyst. >> she's an analyst, just not an aanalys aanalyst -- >> we would want to overweight those we like versus others we

would want and prefer to underrate. exciting this year. seeing more differential between them than you were last year. >> you like -- can't tell us which four? a real problem. >> i don't have the licence that allows me to tell you. >> would it be -- >> as jpmorgan -- >> do the best six months from now? those are the ones you like? >> no. or portfolio managers do -- >> tell us or have to kill us if you told us? >> i'd have to -- >> can one of your colleagues come on and tell us which four? >> yes. we can organize that. my people talk to your people. >> they can't message you right now and tell you? okay. >> i do know which ones, though. >> i can give you dispensation right now. separately, though, in terms of your expectation what the fed really does and how that's going to impact everything? >> i think we're just -- the market gets excited. you kind of overprice rate cuts. really the fed is going to start

gradually. just talking about fine tuning. cutting nominal rates to keep real rates stable and then down the line we don't think this year but next year maybe the year after, as we start to see the economy softening then they start to pick up the pace of rate cuts, but every investors we talk to, whether marx, may, june, fine tuning in the short term. ultimately being on the other side here a, rate cuts, much more of a favorable environment for bonds and stocks and increases the opportunity -- >> when does this happen? >> more midyear. probably especially inflation data giving them enough ammunition. this friday we get pce for december. six-month annualized. >> and talking about -- what is that -- >> on thursday. wednesday or thursday. >> thursday, right. >> and really the data this week is set to confirm what we got everybody excited late last year, which you can have growth, gdp we expect 2.4%. at the same time actually could not seeing disinflation.

so we're right to be excited about rate cuts. just in the short term can it drive noise short end of the curve when it begins. >> do not fear rate cuts come only if things are worse? >> no. the most important thing chair powell acknowledged at the december meeting. it's okay. we can have growth and continue to see disinflation. structurally nothing changed in this economy that makes inflation sticky at 3%. we don't have a wage price spiral. we don't have inflation indexation in this economy. why wouldn't it normalize? with growth at trend at 2%. we think we'll be there middle of the year. >> thank you for coming in and thank you for calling your people, having call our people, so kewe can find out the four wonders of the world. >> what we call them. now i know there are four. >> there are! >> four we just -- it's up to us to pick the right ones. >> four, actually should be

seven wonders of the world or -- >> what do you think it is, andrew? >> which four, if you had to pick? which would be your four favo favorites? >> assuming saying microsoft, apple. >> uh-huh. >> she might actually say netscape and meta. not necessarily -- netflix and meta. sorry. >> shocker for me. set netscape. know why? you shouldn't be doing it either. she said netscape -- >> i'm young. youin either pulling a trump or a biden right now. >> can happen with the best of us. i do things occasionally makes me feel bad for -- >> more coffee. >> jet-lagged. i'm jet-lagged, folks. >> sometimes distracted.

>> not on camera all the time. >> you're distracted. >> netflix. how did i do? by the way? >> you did great. >> three of the four? >> no. >> one or two, 50. >> two out of two. >> coming up, state of the economy with white house counsel of economic advisers chair jared bernstein. comes back on, you know, he knows we're going to ask him some of the polls and things like that. see what the story is today. first as we head to break, check out the shares of jetblue and spirit airlines. appealing a federal judge's ruling that blocked a proposed merger. saying this would mean higher prices for consumers that are sensitive to higher costs. stay tuned. you're watching "squawk box" on cnbc.

a couple big economic data points on the way this week the fed will watch closely contemplating its next break move thursday. the first look at fourth quarter gdp and friday the fed's preferred inflation gauge. joining us now on the economy, white house council of economic

advisers chair jared bernstein. comes on good or bad, thick or thin, no matter what and put a good light what the biden administration has been trying to do, jared. good to have you on. thank you. we go back years. >> yes, we do. >> and i wanted to bring up, talk about some of the things jamie dimon said last week. almost sounded like he was normalizing former president trump. a lot of, what a lot of people, democrats said. mad at him for this, but what he was really doing, i think, giving tough love to democrats. i was going to start with that, too. i know you're going to say everything's great with bidenomics and retail sales because of bidenomics. then i'm going to say, then, why do so many people not feel financially healthy? in the latest of poll, jared,

13%. an abc ep ipsos poll. benefited financially. own it, address it instead of saying they don't know what -- don't know what -- they're wrong about that they're feeling? >> no, no. we definitely, i guarantee you, we believe that people, consumers themselves, are the best arbor tors of their financial condition. last friday, "consumer sentiment surges while inflation outlook dips" from the university of michigan survey on a two-month basis sentiment. a closely watched gauge, you know. showed its largest increase since 1991. your article went on to say consumer sentiment has improved amid a drop in gasoline prices, solid stock market gains, price at the pump of gas down 30 cents

from a year ago. s&p 500 near a record high. listening to your discussion this morning, and hearing more optimism about that. we've maintained the strong job market, easing prices, rising real wages and now got this stock market result, which i argue is no accident. it's based on an economy continuing to divide expectations and probably good expectations about future growth including productivity. yes, we have a lot more work to do and your warning and j.d.'s warning we take to heart. the question, on the right path? indicators clearly are reflecting that, beginning to. >> i guess the market -- took a couple of years to hit the highs that we had hit. we are talking about that. tell you what the other side, or what critics would say. sure. if you use a lot of fiscal stimulus and a lot of monetary stimulus, you're going to get a

pretty solid economy. it's going to -- have the look of a solid economy, because you're obviously, it's caged in. probably not have a recession, but it results in are, at least, maybe it's a temporary inflation spurt, but it was a really nasty one, jared, and it was so nasty that now it's come down. as you say, gas prices have come down, inflation has come down, but people are still spending 30% more at the grocery store. even though now it's only going up 3%, still in there. and wage gains -- real 0 wage gains didn't start until mid last year. people are still, their buying power is less than when president biden came in. you just have to acknowledge that and not say everything's great and that bidenomics did all this. >> i said in my first set of commentsened a the president says every time he talks about this, prices are still too high. we very much agree with that part of your wrap.

where you're a bit stale there, my friend. when it comes to two issues both fiscal policy and inflation. so on fiscal policy, absolutely the american rescue plan was essential to get shots in arms and checks in pockets to get us to the other side of the crisis induced by the pandemic. remember, when we came into office a zero percent vaccination rate across the country. getting that program going relative to our predecessor essential for reopening the econom economy, but at this point zero negative impulse. important term in this context. it means the change between fiscal activity last year and this year. istic iffal impulse really isn't contributing much to the economy's growth at all. why that's it important is because we kind of have this virtuous cycle going. we have a 70% consumer spending economy. when you maintain an unemployment rate below 4% almost two years and inflation is easing as much as it has,

that's the other part i want to push back on, those real wage gains, year over year growing for ten months in a row. we need more of that, not just a blip. they're supporting consumer spending on the private side. look at investment. private investment up massively in terms of investing in manufacturing facilities, and, again, the president's fingerprints very much on the inflow of private capital investment. on inflation, a lot of what we saw very much was associated with the supply side of the economy. not all of it. demand is in the mix, but global inflation caused by global supply chain snarlups and we worked hard to help unsnarl those snarlups and that's showing's in easing price pressures. >> do you think, jared, i don't know what's going to happen between now and november, but the other number in that abc ipsos poll in terms of the president's handling of the economy. 31% approve. this was just three days ago.

so there's still that disconnect and i see a lot of foot sollers? in main stream media on different networks again and again bring up, almost sound like you. ten reasons why americans really aren't feeling the right -- they need to be told what they're actually feeling about their economic situation? do you think it's going to improve by, come around? not have to try to convince people that they're wrong about how they're feeling by november? do you think that consumer -- >> we don't ever, ever try to convince anybody. how you're feeling is how you're feeling. i've tried to report to you today, people's own statements on how they're feeling in terms of the sentiment poll from university of michigan. just saw the biggest two-month increase in that poll about how people are feeling about the economy since 1991. that's over a 30-year span. i think you have to incorporate that into your discussion. now, is that index or any other

index where we need it to be? probably not. therefore, we have to keep working. but the question is, are we on the right path? are the sentiments in the indices moving in the right direction and, yes, both that and a the conference board index also moved up. now, on these polls, i do think it's important it ask people, the actual components of bidenomics. 82% support's kaing insulin costs at $35 a month. that is in the economy. not an aspiration. legislated by this president. over 80% -- 81% support giving 3 medicare power to negotiate lower prescription drug prices. in the economy. creating manufacturing jobs setting up domestic production in this country in electric cars in evs and ev batteries in clean production technology. those factories are being built. that's the inflow. $600 billion private capital, private capital, coming in to

the market based on subsubsidie president implemented. sentiment inkatd ert are ticking up inflation easing, actual prices coming down on things i just mentioned, but we need to keep on that path. we have more work to do, but we're headed in the right direction and consumers are starting to feel it based on pretty important metrics. >> seeing the actual definition of -- stale, jared. that is -- that's not -- that's a bad, mono longer fresh or plercht. the word "stale". >> bothering you? >> yes. that's what he did. >> not you by a million years. this argument -- >> my ideas are -- fresh, fresh you want -- >> fresh and new. >> you didn't mean me? >> no. >> i think there's -- you know what i mean? it's actually a good question.

what i mean, for months -- >> some data giving you you think is stale. you're right, from three days ago. >> it's like three days ago. for months -- hold on a second. for months there's been this, you know, very hard -- there was this absolutely uncloseable, gaping hole between economic indicators and how people feel. that hole still exists. not saying it's not. the question is -- >> there's a -- now they tell me we got to go. >> the question is, are we -- >> and cnbc.com, too, jared. >> that's right. >> kind of a time -- >> mean you're it citing your own -- >> cnbc.com. with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring

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still to come this morning, former council of economic advisers chair kevin hassett joins us with his argument the

markets think the fed is lost. we're going to talk about what he sees here. get him to explain that idea. stay tuned. you're watching "squawbo" d iss bc. x, you always got your mind on the green. not you. you!

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in a new piece in the "national review" our next guest warns of the possibility of federal reserve staffers pushes a recession narrative in an election year that leads the central bank to cut interest rates when that's not the appropriate move. joining us now former council of economics chair kevin hassett. a distinguished fellow in economics at stanford's hoover institution. kevin, thank you for being here, first of all. this is kind of a complicated thought. so let's try and walk through the process on this. you think basically the market is looking for rate cuts that shouldn't be coming this year? heard that from a lot of economists, but you're kind of playing through the ways that the market could be right. what do you think? >> right. i think that there are really two parts, and part one is that inflation really isn't under control. if you look at core cpi. it's hovering about four. a long track record that wage

growth, which the atlanta wage tracker at 5%. 4 for inflation. inflation's not under control. you wouldn't normally expect to d.c see the fed cutting rates. gdp growth surprised me and a lot of others saying fourth quarter gdp 2.5%. had a blockbuster retail el is as number. michigan survey consumers getting confident again. all strong signals about economic data especially initial claims below 200,000. against that backdrop the idea the fed would cut rates at all seems preposterous. look at futures now expecting rate cuts at every meeting from may on. what the markets are saying, geez, the fed's going to do something inconsistent with the economic data. the only explanation i vhave

wor worried up the economy before the election. >> and buying into rate cuts say the economy will get weaker. others mmt, monetary theory folks saying, well, proven that there's no bad that comes from this. we should go ahead and cut rates as far as we can to get the economy juiced far as we can. i haven't heard many come up with the theory democratic staffers at the fed pushing a narrative that doesn't exist in terms of a recession? >> right. the bottom line, though, is that inflation is not under control. the fed's job is to get inflation under control. and if they don't, if they cut rates with the kind of strong economy and high inflation, then we have to come up with a theory, what the heck are they thinking? now, becky, you know, i'm sure data can turn. we've woo been talking 20 years. time tas really shocked by the jobs number that came out when i

was up in new york. odds of a big economic surprise between now and may of not 90%. 90% is what fed funds future say odds of a cut in may are. i don't know where numbers that high, with that much certainty of rate cuts could come from because the economy is uncertain. maybe 50/50 gets worse. not that high, i don't think. >> the other number thrown out this idea problems that come up were the banking sector at some point, because commercial real estate or some other big kind of bugaboo comes out running into real trouble causing financial system concerns? i guess the other reason would be, got a huge federal budget deficits that needs financed and high rates hurt that and have that impact, too. those theories out there. democratic staffers one is new. especially looking at somebody like jared bernstein, cea chair now, basically in every regard trying to say the economy is great because they want to convince voters things are great

to re-elect their candidate? >> right. the fact is that i mentioned it in the article you cited that 95% of political contributions by staffers of the fed go to democrats. i can say, though, as you know, no my article i say i don't think this is going to happen. i think futures markets will be surprised that the rate cuts aren't going to come. but -- i trust jay powell, had lunch with him once a month the whole time in the white house. a very good, honorable person, wants to do the right thing. all staff guys given forecasts are contributing to democrat. i wonder, what it's my theory if they cut rates? what's my theory what's going on? anxiously saying it looks like they've lost their independence. where the word "lost" comes from. title of my piece. if the fed cuts rate with data where they are now, the fed lost the, the political independence of the fed is lost. >> throw one theory. brought up on the show.

cutting rates now rather than later, because they don't want to look political later if they were to cut rates closer to the election? when the economic conditions might warrant it more? >> you know, i think that what the fed needs to do, what did they say at every meeting? data driven. they need to be data driven. that's not when election day was set when george washington was president. look at data. inflation is below 2 and gdp growth slowing. >> if they looked at data in, say, october, and potential for an idea of a cut based on the data, and went ahead with it, people would say they were political then too. seems like a catch 22 for the fed no matter what they do. >> right. the fed usually closer to elections just doesn't move. history is on your side with that argument. but the point is, again, what are the odds data really goes south? odds have to be very high. like 80%, 90% to start moving in

may given where everything else is. >> ask you this. if conditions are -- remain where they are now the next several months and fed does nothing. stands pat. all of a sudden you get into some sort of an economic downturn or even a fiscal -- or a financial system conditions warranting it, concern around that, would you defend the fed for cutting rates then? >> yeah. i'll make a commitment with you right now. right on "squawk box" saying, hey, looking at data. doing exactly what they said. that's what central bank independence is all be. look at data, do the right thing. be an umpire at a ball game checked by computers. what we want out of the fed. >> okay. fair enough. kevin, thank you very much. kevin hassett. >> thank you. coming up, cyberscuti in focus including top concerns of ceos at the world economic forum in a newly reported intrusion that microsoft will get former

facebook chief security officer alex stamos to weigh in on. first reminder heading to break. always watch or listen to us using the cnbc app. stay tuned. "squawk box" is congig ck. mi rht (♪♪) but there's nothing like being there. at national, you can skip the counter... and choose any car in the aisle... even manage your rental right from the app. so you can give some quality time to a quality cause. swing by to see one more customer... [audience cheering] and really get down to business. go national. go like a pro. ♪ voya ♪ there are some things that work better together. like your workplace benefits and retirement savings. presentation looks great. thanks. voya provides tools that help you make the right investment and benefit choices. so you can reach today's financial goals.

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welcome back to "squawk box." futures continue to be -- in some, positive, in the green this morning. 86 points now. dow actually matched. nasdaq, boeing adversely affecting the dow earlier and nasdaq emerging. just see if boeing -- turned around. still down a little bit. >> and tech giant microsoft hacked by a russian state-backed

cyber group. broke into corporate email systems gaining access to accounts belonging to members of its leadership team as well as cybersecurity and leadership teams. microsoft saying the same one behind that huge 2020 solarwinds attack. weighing in on this. 701 chief trusts officer, formerly led the efforts at both facebook and yahoo. and you can go through the whole list you think, talking about leadership. what does this say to you, and how dangerous is it really? >> this is pretty dangerous. so this is the second kind of major announcement of an email hack by a state-sponsored intelligence agency. last one was september, in that case the chinese broke in to microsoft. that was a much bigger hack in that we know for sure that the chinese government got access to thousands of accounts including

the secretary of commerce, including members of the state department. in this case it does like these were contained. fright ening of the three major intelligence agencies of the russians, sdr pshgs hardest to deal with and most subtle. others ones, gru, famous for smash-and-grab operations causing lots of damage not caring, if you know it's them. they are responsible for the solarwinds attack, took years to plan and pull together, and looks like this could have been the start of a pretty significant campaign, because one of the things they looked at emails of the security team and security leaders. so they could see what microsoft knew about their activities. >> alex, does this suggest microsoft is more vulnerable than others? we have not heard about such attacks, for example, at apple? i just raise that as a question, or necessarily a google?

because hacks are happening at these companies not disclosed? less interesting to the hackers? security better or worse at these companies? how do you baseline what's really happening? >> microsoft has a very good security team and highly targeted. really, the people we should compare them to is google. the only company with as much data and important data is google lesser extent amazon. neither have had these intrusions announced in the last year. does that mean it never happens? no. google, in particular, famous for really turning up security and equivalent attack happened in 2009. chinese government broke into google changing the tech industry. not a great look for microsoft. it looks like from a small amount of information they gave us a several attack called a

password spray, can be prevented by two-word authentication and microsoft wasn't enforcing their own systems and promised to do be better. hard to say without were more information. microsoft dumped this out a small press release 8k friday evening after the markets closed. clearly wanted to bury the news don't want to talk about it. nats a real problem. one, because microsoft is possibly the most important tech company on the planet. up there with google and amazon of the same kind of importance of the data they hold, and second, the sbr is going after hundreds and hundreds of american companies. microsoft not transaround and open what's going on it does not rebuild the trust people have in them allowing the rest of us to protect ourselves. >> can i ask you question, you talk to security professionals, peers, colleagues of yours, seem to have a completely different

reaction to this. some people will have the reaction you're having, and then others say, well, actually, if they came out and disclosed with great transparency, even greater transparency, argue they disclosed something here, but if they disclosed even more, may not have patched it properly an that -- or done the additional work and that it creates -- it makes them and their clients and everybody who has microsoft an even bigger target. do you buy that? >> in this case, i don't. so that is inequity. when you're in a breach and knife fighting with an attacker to get them out of a network, this is something i do all the time for dozens of clients, it is difficult to decide when to announce because you don't want to say before you know what the attacker is doing and you have what's called containment, that you know that you've mostly kicked them out of the network. the microsoft statement makes it clear that they have figured out what the root cause was and they have containment. in this case, i don't think

there's a good argument that microsoft should not be fully and completely transparent about exactly what happened. which they still have a chance to do, but they never were about the chinese attack. that was in september. we've never gotten all the details of what happened there which is a real problem because the bad guys work together. the svr, the mystery state security of china, they're getting better because their teams share tools, techniques and tips, but microsoft will not share with the rest of us exactly what happened which makes it difficult for us to protect ourselves. >> why do you think that is? let me ask you a more provocative question about microsoft. historically, microsoft -- especially after the antitrust case, has been seen as a friend of -- or tried to be a friend of the government, the public, has tried to sort of -- there's a perception that they're, you know, out there trying to be more transparent and the like. perhaps than even other companies. do you think that's true or not? >> microsoft has an extremely government affairs strategy. they are one of the largest tech

companies represented on capitol hill. you see their executives, brad smith testifying all the time in congress and you're right, part of that is antitrust. part of it is the u.s. government is a huge customer of microsofts. when the chinese broke in, their target were u.s. government accounts. they want to maintain the trust and maintain, you know, congress's interest in microsoft continuing to be a multibillion dollar vendor to the government. i think in this case they're very good at making themselves look like the good guys. they're very good at covering up over their mistakes and blaming others. we saw this during the solar winds attack. we call it the solar winds attack. but microsoft had a significant component of mistakes that were made during that big complicated campaign against over 100 organizations and they very successfully sent their people to hill to frame the whole thing as the responsibility of this much smaller company solar winds. and so, yes, i do think that's

happened multiple times in the past. this is consistent with their strategy of making it look like they never have secured issues. >> alex, that is a longer and important conversation and i hope we have an opportunity to talk to you more about that the next time we see you. thank you again. >> thank you. when we come back, a lot more on squawk. we can talk markets and get you ready for the ndmoay morning opening bell. this is cnbc.

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♪ welcome back to "squawk." we got a news alert for you. gilead is saying their new drug is failing in the second trial. it plans to discuss the results at an upcoming meeting. you're looking at the stock down 8% on the back of that news. just over a half an hour to go until the opening bell on wall street. for more on the market's week ahead, we want to bring in the ceo and chief investment officer at defiance efts. we are talking about the markets closing at new highs. how do you feel about those things? what do you expect stocks to do this year? >> good morning, becky. great to be here today.

well, i think if you look at where we are right now, it actually took us, you know, close to two years to get back to where we were on the previous s&p 500 highs, that 4800 number. i'm very kind of happy that we're here and i think that the market is poised to continue to rally and do well this year. i think a.i. and i think rate cuts are the big story. we got that soft landing. the economy is fairly stable and employment is pretty good. those things often define a bull market. on top of that, you have this great innovation that can push the market forward with the a.i. theme and rates coming down towards the latter half of the year will help companies to improve on profits and growth. i'm optimistic. >> optimistic to the rate of maybe 8 to 10% returns when it comes to equities? >> optimistic to that. to about 8 to 10%. i think we'll do a little bit better than the analyzed return of the s&p 500 and, again, i think that's just because a.i., you know, last year was very much just an ad word and i think

this year is when it starts to be applied to different sectors when it starts to broaden out to things like semicomputing, semiconductors, amd and the tech stocks. the whole shift in technology is going to be quantum computing and a.i. for the next couple of years and that has power and fuel for growth. >> obvioften we look at the monn the sidelines. this time you've got money on the sidelines not just in cash but in treasuries too. >> yeah, that's su superinteresting. i think that's another argument for why the market can rally. you have 6 million sitting in savings and if you think about that, a lot of investors that we talked to are like, i'm fine parking there. 5% is pretty good. when you start getting the s&p and nasdaq, getting these high double digit 20, 30, 40% returns if you can get another 8 to 10% out of that this year, that 5% sounds less interesting.

i think if that money comes off of the sidelines, then a lot of investors will start shifting sentiment when rates get cut into the market. you also get a rally and you get a broadening of the rally. >> how much of that is reliant on earning season. we're getting into the thick of it now. we have 30 seconds left. >> yeah, absolutely. you just raised the most important point. if earning season isn't as good, although the last couple times it's surprised us to the upside and we've gone into it negative, i think that pulls us back here. that could pull us back as a risk. >> thanks for joining us today. >> thank you. let's take a final check on the markets before we hand things over. the futures this morning continuing to build on those gains from yesterday. again, markets closed at record highs and now you've got the dow futures indicated up more than 120 points. and the nasdaq up byabout 90. again, treasury board, that's the treasury price, the ten year

below 4.1%, the two year, just before 4.4% and oil prices this morning, around $73 last i looked. $73.59 for wti. that does it for us today. we're happy to be back in times square. joining us tomorrow. right now it's time for "squawk on the street." good morning. welcome to "squawk on the street." stocks look to add to friday's all-time highs as q-4 earnings kick into high gear. we get key data later in the week. ten year, 4.08. s&p is poised to build on its all-time high as investors await the latest print this week. >> we have tech on a tear. the mag 7, they continue to outperform and nvidia is leading