companies with the highest pay discrepancy with the ceo and the average worker. what? he just keeps on going. bernie? it is tuesday. it must be bernie? it is january 23rd. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. u.s. equity futures are flat this morning. i'm not going to call the couple points here or there. flat at this point.

that comes after the dow closed 138 points higher and topped 38,000 for the first time. s&p also hitting a new high yesterday. we have that going for us. >> that is nice. >> it is nice. let's look at treasury yields. we were looking at the same levels yesterday. higher had morning with the ten-year yield at 4.1%. the two-year is 4.4%. you have the price of bitcoin dipping below $40,000 for the first time this year. that happened yesterday. this morning, actually down 3% below $39,000. let's talk about the presidential race and new hampshire primary today. overnight, six registered voters in dixville notch. four republicans and two independents casting ballots for nikki haley. haley has been trying to make the state competitive. most polls close at 7:00 p.m.

and the final poll closing at 8:00. a voice likely to impersonate president biden is asking people to not vote for president biden. this does not rule out voters from casting ballots in the november general election. this is the beginning of a lot of misinformation and a.i. campaigns. generative a.i. and what it can do. >> the first election where we talk about that all the time. it just sounded like his voice. he wasn't whispering like he does? >> that's bad news. >> it's working. 38,000. >> when you can manipulate. >> it is not good. >> does dixville notch? i immediately think of gobbler's knob. >> groundhog's day.

nikki haley is running 18% behind in the polls in new hampshire against donald trump. dixville notch. she took 6-0. >> she should do well in south carolina. of all of the place with the most independents, you think she would benefit. >> desantis pulling out did not help haley. it helped trump. >> right. we'll get to corporate news. united airlines are higher with earnings between $9 and $11 a share between fiscal 2024. the range topped estimates. they believe the grounding of the 737 max 9 to take a hole in the first quarter. it is also known as the first

quarter, the first three months. united won't be able to fly the 737 max 9 for the run of the month. scott kirby will join us in the 7:00 hour in the exclusive interview. we all fly united? >> i flew swiss air, which is a united partner. >> pretty penny. pretty penny. they did okay. expensive flight. >> i think that is the davos effect. you have all of these idiots. >> pulse pricing. idiots. >> captive audience. >> i thought you meant in general who attends. >> yeah. >> if the shoe fits. i almost said it. the bank of japan held interest rates at 0.1% as expected.

the pros expects that the econo can sustain the target which is heigh heightening. the boj sticking to the yield curve control policy to keep the upper limit for the ten-year government bond yeed yield at 1%. now they are thinking in the spring. bloomberg is reporting that china is considering a stabilization fund for the tstok market. it would happen $278 million funds to buy through the hong kong exchange link. that fund would shore up stocks that have been hit hard. chinese benchmark 300 index hit a three h-year low week. chinese gaming stocks are hitting drafting rules which

were removed from regulators web sites. that is a move that is not typical and other chinese m ministries. gaming authorities have not explained what the move meant, but this it is a sign that china could ease the curbs with the cap on in-game spending. earlier this month, the official who designed the rules was fired. we are learning about a hack in s.e.c. staffers phone which led to fake social media posts earlier this month prematurely claiming a spot bitcoin etf was approved. the hacker changed the password to the x account to gain control of the phone number. the employee was targeted a sim swap. this is an attack through the carrier. the s.e.c. saying the multifactor authentication was

hacked in july. the investigation into the hack is ongoing. if you are not multifactor authenticating, you need to do so. they will send you a text message with a code every time or every 30 days. that is the only news you can use in the entire three hours. >> for my twitter account? >> we know. still do it. >> i'm not doing it. elon did not give me a blue check mark. >> you should still do it. >> every single time and you have to wait and press it and it goes? >> no, no. not every time. >> sometimes draftkings does that. i have to get it. it doesn't work right away. i have to go and remember the seven digits and type them in.

no, andrew. for twitter? what difference does it make? >> you want somebody to pretend you are you? >> that's not what i'm saying. >> i need the symbol. to a high profile departure from netflix. this could be significant. he will still get the movies. scott stuber is leaving in march to start a new company. he joined netflix in 2017 and expanded the company output to dozens of films in multiple languages. netflix produces more movies or has than several of the major hollywood studios combined. stuber secured financing for projects to produce media companies and including netflix. i assume that's him. do you know him? have you met him? >> i don't believe i have met him. >> that could have been an a.i. generated picture of the guy

that could have been the netflix guy. have you seen those are twitter? girl standing next to an ocean with a gladiator outfit. have you seen that? >> yeah. have you been playing journey? >> what? >> you don't know. >> that's how you make those pictures. >> have you made pictures? >> on journey. absolutely. >> why? >> we have a bull's-eye thing and we put in joe kernen and something. we put it on the wall. we throw the darts. >> i can do that and train animals. yeah. why do you do it? >> we made fun stuff with it. it's fun. >> who is we? >> my kids. i've done it. it's interesting. >> it sounds like the reason every technology advance is

beginning. your dream to create whoever you want. >> it's great. >> in front of you. >> it is. >> okay. you know what i would try first? facebookstagraminstagram. and sony scrapping plans for a merger with zee. sony wants to combine with the business at zee in 2021. those negotiations were terminated because they were not satisfied with the initial offer. coming up, busy morning for earnings. ge and 3m and johnson & johnson and p&g and verizon all reporting in the next two hours. we have the first on cnbc interview including johnson &

johnson's cfo joe wolk and p&g ceo. it is that time of quarter. jon moeller will join us. it is interesting to see how p&g is maneuvering and depending on the economic back drop. "squawk box" will be right back. 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. ♪ voya ♪ there are some things that work better together. like your workplace benefits and retirement savings. voya helps you choose the right amounts without over or under investing across all your benefits and savings options. so you can feel confident in your financial choices. ♪♪ they really know how to put two and two together. voya, well planned, well invested, well protected.

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biggest morning so far for

earnings, including results from johnson & johnson, 3m, general electric and p&g and verizon all this morning and netflix after the closing bell. let's bring in kari firestone. co-founder of aureas asset management. you have the view on the p com companies individually. i was surprised for the earnings we are expecting. without the magnificent seven, we would be down for the s&p? >> yeah. with the magnificent seven, estimates for the this quarter are down 1%. their earnings are up 8. without them, it is minus 7.5%. it is a big drop for the market. >> i thought people were looking

for, you know, single digits, year over year for the quarter. when did that change or is that just you? >> i think they have been changing over the last month and a half. the last six weeks estimates have been coming down. i think most people would say above flat. i'm surprised it is up a few percent. numbers are not very big. if the big companies are reporting today, the top ten, six of them will have down earnings for the quarter. it doesn't mean next year they have bad earnings. the market trades for next 12 months or 18 months type of earnings. this is not a great quarter. there's been a lot of softness in the economy. we're just not expecting a lot. i don't think the market is expecting a lot. the market has held well. it has been resilient this year. we will see the big numbers.

>> you are talking full year down 1%. not just this quarter? >> sorry. for this quarter, joe. >> just this quarter. so full year is what? >> i think it's sort of flat to up a pfew percent. we're on the same page. >> good. let's do some of the individual names. cfo of johnson & johnson coming on. what do you expect there? >> johnson & johnson has been a strong stock this quarter because people didn't like healthcare last year. they are hoping to hear something positive about the mega cap business coming back. i think johnson & johnson numbers are not going to be great. i think they will be flat. they will talk about better numbers through the whole year as they see hospital visits and

discretionary surgeries back with the pipeline showing for fruit. there hasn't been much from the big pharma. they split the companies. kenvue has been split off. i think it will be a fairly -- as long as he is positive about the whole year, the stock will continue to out perform. >> what about p&g? what cross currents are hitting that company? >> p&g over the last two years has been a poor stock. down 8%. it is under performing because it had such a big spurt during covid. everybody was home and they bought a lot of consumer st staples. they have taken so much price. it is hard for them to maintain volumes at those prices. that is what the market wants to hear. stocks have been good this year. numbers will be up and earnings will be up on small 3% sales growth.

7% earnings growth. we have to hear about them managing the process of price increases. >> we will talk netflix after the close. do you own lockheed martin? should everybody buy a basket of defense stocks? we're depleting all of our military equipment. we have two wars we're trying to supply. there's other problems on the horizon, i would think. >> correct. there's a lot of global tension. geopolitical risk. lockheed martin, we don't own it. we own hamilton, the other military stock. it is expected to have down earnings. it is about the future. if orders start to come in better than expected, which we think is likely for the defense industry, they will have a better year. the year is not supposed to be that good, but that can all changes with bookings. it is one of the premier defense

contractors and suppliers and producers in the world. that, to me, makes sense for owning something in the defense sector. >> how about netflix at this point? >> netflix is going to have a very strong quarter. you know, they won the streaming wars. they can start to look around for assets they like to acquire from the struggle thing companies. earnings are supposed to be 222. that is up 2,500% compared to last year. that is really about them projecting confidence that they can continue to build their revenue and cutting costs and improving their margins and maintaining the trajectory they're on which is strong. the stock has been strong also. >> it has been strong. 700. under 200. we can't do anything here.

it was 700 to 174. back to almost 500. >> johnson & johnson is out with the earnings. let's bring you the numbers. fourth quarter adjusted earnings per share. $2.29. that is one cent better than the street. they have sales of $21.4 billion. that is also a little better than the 21.01 billion that the street had been looking for. u.s. sales $21.1 billion. international sales 9.93billion. you have worldwide tech sales at $7.766 billion. orthopedic sales. this company had reported back or given us dguidance in early december of what they were expecting for the year of 2024. the stock had seen a pop at that point t. point. it is trading down.

kari, i don't know if you heard those numbers and if it changes your opinion or if there is something else you want us to dig through in the numbers. is k aari still there? >> i thought we lost her. >> we got rid of her? >> maybe we did. we just had her talking about johnson & johnson. let's get to phil lebeau with the general electric. phil, you will be there for us. >> reporter: this is a beat on the top and bottom line by ge. we are talking about ge arrow spice. ge will be together for another quarter. they beat on the top and bottom line. $1.03 a share. revenue above expectations at $19.4 billion. a couple of numbers within the numbers.

free cash flow of $3 billion in the fourth quarter. full year free cash flow at $5.2 billion. that tops ge guidance of $5.1 billion in free cash flow for the year with the 9.6% for the fourth quarter. the q1 guidance and this may explain why the stock is under pressure for the first quarter where they are expecting to earn 60 and 65 cents a share. the estimate is 72 cents a share. high revenue growth in the single digits for 2024. ge aerospace, remember the spinoff completed in the second quarter, an operating profit guide of $6.5 billion for ge aerospace and free cash flow for all of 2024 for ge aerospace of greater than $5 billion. ge beating on top and bottom line in the fourth quarter. guys, back to you.

>> phil, thank you. back to johnson & johnson quickly. the guidance and looking through this. they have given some updates from what we have seen last month. generational sales will be up 5% to 6%. that is in line with the operational sales numbers in december. they are affirming that now. the estimated reported sales between 87.8. the range is 4.5% to 5%. adjusted earnings per share. $10.55 to $10.75 as a range. let me get back to where the expected. that stock is still indicated off by 132. we are going to be speaking with the cfo joe wolk in a little bit and get more details from him. >> the same number. i don't know if it is moving. >> we will talk to joe in a moment.

in the meantime, when we come back, stop me if you heard this before. bernie sanders wants to raise taxes on corporations. we will talk about the plan next. as we head to break, check out the stock of archer-daniels dropping after it is cutting the earnings outlook after the pending investigation into the accounting practices. the stock this morning is sitting at $52.44. "squawk box" coming right back.

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to raise taxes on the ceos over worker pay. the union backed proposal generated $150 billion of revenue over ten years from companies like walmart and alphabet and nike and mcdonald's. sanders say they could avoid the tax hike by raising wages. they would need the help of nine r republicans to pass it. they could have offered this brief commentary for a moment. i want to go back to find the text when this was first introduced. the idea was to shame ceos. at the time, democrats said it would not be used in any other way. it wasn't used to then go tax or this goes to you, joe and becky, i'll give you credit of the

slippery slope. but putting the data out there, the original goal is shareholders see the information and they will have a better sense of compensation and it forces boards to rethink. now what is happening? it is not just the boards have not thought about it, and then on the other side of it, you now have them using this data to try to raise taxes on it. i get it. >> the only thing you might get get every democrat and you need nine republicans? >> it will not happen. >> it will not happen. it is a populous thought. >> when these guys on both sides when all they do are -- it is almost a kabuki dance. it is just posturing. then it has to pass the house. that's not a chance.

>> you can point to how many things in washington that are just that? we'll vote this bill so you go back and say you supported this. we know it will not pass over there. don't worry. we will have 12 votes on this. the amount of cynicism because. way they behave. >> there are not problems at the border that bernie could figure out and some way of coming together to build apring a consensus? this is more important? we're screwed. when we come back, we have 3m results expected to hit afrt break. we hhave reaction from johnson johnson with the ceo speak from joe wolk. as we head to break, here is a look at the s&p winners and losers.

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welcome back. the earnings reports continue. this time is 3m. there is a lot to go through. instant reaction from the stock is to sell off more than 6% down 6.25%. this is coming as the company is reported adjusted $2.42 a share. if you look at that, that is better than expected. the street was looking for $2.32. part of that is the tax benefit of 6 cents. another charge of 3 cents that the analyst did not know about. you are talking about a beat of 3 cents. revenue came in line at 7$7.69 billion. the issue is the guidance. the company is looking for adjusted earning per share at 9.35 $9.35 and $9.37. i did speak with the company. they are saying the analysts

don't know about pension charges of 15 cents a share that are incorporated into the guidance. they say that is because of the accounting changes with the interest rates ending at the end of 2023. the pension funds are fully funded to 96%. it is an accounting change, but that is not the high end of the expectations of what they spoke about before. the company is looking for flat toward up 2% of organic growth. they do say they will make a lot of changes and continuing the portfolio restructuring is going to impact the revenue by 100 basis points. they will talk about those on the conference call coming up at 9:00 a.m. i would expect that is why you are seeing the selloff in the shares. >> organic sales fell. >> for the quarter. that was 9%.

>> jaadjusted. >> that is better than the street was looking for the current quarter. total sales down 8.2%. the question is the losses with the pfas issues. they made a lot of ground with that, but people on the street will want to hear where things stand from that perspective. they have a spinoff for the healthcare unit. they will give an additional meeting with the street talking about what they see post that spinoff. again, you can see the questions that the street is asking about and they will have a lot of explaining to do about what they're expected and the headwinds. they say they see continued expansion of adjusted operating margins in 2024, but i'm not sure the street will give them credit until they show they can continue to do that. >> that's not a dow component, is it? 59. $59 billion?

that's the market cap. these guys got to get on the stick. you know what? sa salesforce? >> yes. >> amgen? >> yes. >> walgreens? >> yes. 3m. >> yes. >> come on, man. >> i know who that is. >> who is that? >> the president. coming up, netflix is set to report after the closing bell. we will tell you what to expect next. you don't want to miss our exclusive interview with united airlines ceo scott kirby. we are coming right back with that and so much more ever this. [waterfall roars] want to go somewhere amazing? [engine revs]

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in the meantime, netflix will report after the closing bell today. the stock is up 20% in the last three months. we have tom rogers with us now. now a cnbc contributor. tom, great to see you. what are you expecting this afternoon? what are the broad eer implications for the industry? is netflix in a category of one? a category of its own or something we can take away from this? >> i think netflix is in a category of its own. i have been saying that for some

time. i remember you asking me a couple of years ago what would be the most valuable media company out there. i said netflix and clearly it has become that. you take the parts business with disney and media and comparison. netflix is three times as valuable as disney right now. the thing that distinguishes it with the rest of the media industry is the ability of management at netflix to really focus. they have no m&a intrigue or no activists or no lineal decline. they don't have to focus on sports rights. they don't have the depressed stock. they have no drama, which is why obama is working with them. just being able to focus on execution of the business relative to the rest of the media industry is a huge advantage. >> do you think there is any drawback to mr. suber going to

start his own studio? that news we reported last night and this morning? >> he is obviously having a lot of success. that happens when people have a lot of success. they find new opportunities and move on. i think netflix has gotten more oscar nominations for the last three years than any other studio coming out of nowhere in the last six years. the advantages of netflix has continued. they are the one place that isn't looking to cut their programming budget. they have plenty of resource to put into film. even a mediocre film on netflix gets more audience than things that open in theaters these days given the size of their household reach. they will not have any problem attracting major talent to work with them. the films have not kind of hit the culture zeitgeist level.

there is an opportunity to upgrade the overall culture impact of the films. they won't have any problem continuing. >> how concerned are you or not about churn? especially given that strike over the summer and lack of new content? you might say some of the super elevated stuff that they were probably hoping to have out now and come the next six months may be a little temporarily released on hold? >> they had to cut back on production this year with the strike, but with that, they introduced 99 original seasons over the course of tv seasons over the course of 2023. max is down to 13. hulu down to 12. an enormous advantage with original production. they have a number of other things with wind at their backs.

they are still able to drive subscribers off the password sharing crackdown. the lower price on the ad tier is an advantage for them. they are packaging now with the ad tear and verizon offering max package at $10. >> tom, how advantaged are they with some of the other media companies which did not want to sell to them because that would make netflix stronger. now they are struggling to stay alive and they are now selling on to netflix? >> absolutely. just as the strike hurt everybody's programming slate, here is netflix getting key programming. think "suits" and "young sheldon" as new programming to the netflix audience. netflix has had great success. if it is new to their audience, they can promote it and it does

very well with them. they are using where the strike has hit everybody. >> tom, it sounds to me and we had this conversation before that of the media companies, you like netflix the best. i don't know if you like netflix the best at the valuation at $485, but after netflix, who do you like? is there a value play in here? is there somebody -- i don't know what you think of disney these days. paramount is in the middle of a takeover talks and we have talked about that before on air. i don't know where you sit on wa warner bros. if you stack ranked them as an inve investment? >> that is a tough one. netflix, if it meets or beats consensus, as i expect it to do, it will be on a path to the end of next year of 300 million subs

worldwide. close to 1 billion in audience. no others will be close to that with the streaming services and decline of the lineal will hit them all. i guess leverage on top of that and the guys with the biggest leverage i put toward the bottom. guys with less leverage, i put toward the top. they all have issues and they have not begun to deal within terms of the lineal decline will hurt them. we will see a lot of action in terms of all trying to figure out new structures going forward because their streaming services are not growing fast enough to make up for the decline in lineal. >> tom, i want to thank you. we have to leave it there. we have other news. this is news you can use. tko group holdings which owns

world wrestling entertainment announcing dwayne "the rock" johnson will join the board of directors. tko is entering a merchandising agreement with the rock. this is amazing. the rock showed up three weeks ago at the wwe raw event. huge comeback for him. got a lot of attention. this is the move. he will join the board. you can hear more about this at 9:45 a.m. on the street. the rock will be on the program along with the company's ceoari emanuel. that is cool. remember when he was here and i ran across the street to see him? >> i do. i was laughing about that. >> it's okay. you're welcome. he is maui from "moana." you didn't know this. >> news you can use. when we come back, johnson & johnson cfo joe wolk will joins

us next. the ocstk now is down 38 cents. we'll be right back.

all right, welcome back, everybody. johnson & johnson shares are little changed after the fourth quarter earnings beat estimates by a penny. joining us now to talk about it is joe wolk, johnson & johnson's cfo and also a cnbc cfo council member. thanks for being here. let's talk about the numbers. numbers were getter than expected. a lot came from strength in the med tech segment. what are you seeing? >> good morning, becky. pleasure to be here with you. fourth quarter really capped off what was a really strong year for johnson & johnson. the financial numbers, i think, speak for themselves. if you look at 7% top line sales

growth, 11% eps growth with cash flow generation of over $18 billion. those are very satisfactory for a cfo, but what i'm really pleased about is our ability to exceed financial expectations that we had at the beginning of the year significantly while also investing for the long term, so the near term as well as the long term looks very strong at johnson & johnson. this time last year when we spoke with investors, they had questions about our ability to power through. yet, in december we had a chance to explain to them just how robust our innovative medicine and pharmaceutical pipeline is with ten products having the potential for $5 billion in revenue and peak year sales. in med tech they were asking about the sustainability of the growth improvement that we had in prior years and the fourth quarter was a great indicator of just how strong that business is growing at 9%. we ambition to be within the top

performers within that segment. i think the fourth quarter will be illustrative of us being at the tippy top of that. >> what people really want to hear, do you anticipate you'll continue to see somewhat better numbers through the year as people come back for surgeries and procedures? is that your expectation? >> we've seen, i'd say, elevated procedures that continue after the pandemic. we see nthose following through in 2024 as well. this new level of growth we've attained in addition to moving into faster, higher growth markets such as the acquisition we did 13 months ago beating the deal model and expectations the street had when we arequired that business are very much in line and within our expectations for 2024. >> you did give some additional guidance saying for adjusted earnings per share you're looking at 10.55 to 10.75.

the street was slightly above that midpoint at $10.68. i guess maybe that explains the stock is not doing much down by 47 cents and you had given guidance in december and people were alt a lot of these points. what can you tell them about anything else you've seen? >> it continues to be very strong and ended the year strong. the first few weeks in january look like we are operating in that world of higher procedures, good prescription growth across our very important medicines and oncology immunology and neuroscience so i would say everything is as we outlined in december, which not only again spoke about the near term but also the long term, second half of this decade, how well positioned they are for success. >> since the last time we talked to you eli lilly said it will do direct to consumer sales, totally new model. any idea of potentially following that? >> we're looking at all opportunities, as well.

a lot of discussion and probably be continued discussion in a presidential election year about drug pricing. i can tell you that the noise is somewhat not based on a conversation of facts so 58 cents of every list price dollar is going to the middleman and those discounts and rebates are not getting through to the patients so need to have a good discussion and look at different operating models and we would certainly look across a multifactorial set of solutions that benefit patients and really give them the opportunity to have these great medicines and innovations we develop. >> joe, thank you for joining us. joe wolk, always good to see you. >> thank you, becky. coming up, procter & gamble ceo john moeller will join us to break down the earnings and united airlines' ceo scott kirby, come on right back. n moe break down the earnings and united airlines' ceo scott

kirby, come on right back.

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reports continuing to roll in. in this hour procter & gamble, verizon and lockheed martin. a breakdown of the results and ceo of procter & gamble will join us. the ceo of united airlines on the company's outlook and impact of the boeing 737 max 9 grounding. showdown in new hampshire. votes are being cast in the nation's first presidential primary. what it could mean for the gop party straight ahead as the second hour of "squawk box" begins right now. good morning, and welcome back to "squawk box" on cnbc from the marketsite in times square. let's show you the futures where things stand right about now while you're looking at the dow jones off 38 point, the nasdaq up 25. the s&p 500, up about 2 points.

treasuries right now, let's show you the two-year and ten-year. ten-year 4.134 moved up a bit. the two-year at 4.410 and the energy complex, you're looking at wti crude at 73.90. down this morning but obviously has gradually moved up the past couple of days and then looking at crypto, bitcoin sitting now just under -- i don't want to say crushed, 38, $811 crushing the dreams of those who might have bought it at 40 plus. >> 49. >> thinking this etf would give it a new wind in its sail. the question is, is it -- kramer was on -- >> he's still talking about. >> saying it's unselfable. >> he said, you know, i don't know, he can say what he wants but remember the day it went -- i asked katie stockton.

>> she thinks it could go down to 35. >> 36. >> 36 and at 36 is the breaking point for what? >> support. >> support at 36. >> went through there, but my only point was at 49 after it was -- the etf is coming, now, anyone with ten grand can buy the etf. has it gone from 49 to 200,000 next week? >> not any time soon. >> you could position it but maybe get it -- >> right. >> procter & gamble out with the second quarter. just moments ago earnings of $1.84 a share, well above estimates of $1.70, revenue of 21.44 billion with basically in line with estimates. the company also affirming full year sales guidance, joining us to break down the numbers which are always a lot to talk about but sometimes it's the same things we look at, jon moeller. we always talk organic sales

growth. you give us guidance and in recent quarters you seem to be exceeding it,4% this time. was it 3 to 5? where were you? >> our fiscal year guidance for the top line is 4 to 5. we don't provide a quarterly estimate but this quarter, as you said, was very strong overall starting with the bottom line per share up 16% for the second quarter in a row. while and this is important increase in investments and marketing and commercialization of innovation by about 15% together driving the 22nd consecutive quarter of 4% or better. organic sales growth, one of the questions has been what will happen to volumes as we come out of this pricing cycle? good news there, as well. if we look at the u.s., past five quarters, minus 3, flat, plus 2, now plus 4. europe, plus 3.

aggregate market shares up about 40 basis points if we look at the u.s., value share up 20 basis point, volume share up 50 basis points so on a first half basis, that's about 5.5% top line growth, 16% core earnings per share growth, which, as you said, enables us to maintain our organic sales growth guidance for the year and increase our core earnings per share guidance from 6 to 9 to a range of 8 to 9. >> some of the yearly guidance, jon, you're doing some gillette accounting changes about intangible assets so it's kind of muddled, but did you raise guidance for the year for the bottom line and if you beat it by 14 cents in the current quarter, did you raise it by more than 14 cents for the year or just raise it by 14 cents for the year? >> raised it by a little less than that.

we have a number of headwinds in the second half from a cost standpoint and the pricing that we've been taking annualizes right about now, so there's less benefit from that, but still overall, very healthy per share growth. will continue to be a strong dividend pair and announce our plans for that in april, but really everything is in pretty good shape. if you look at the breadth of the growth on the top line, eight out of ten categories held or grew sales in the quarter we just completed. 21 of our top 25 brands held or grew sales. if you look at the top 12 brands, 9 of them were high single digit plus growth rates so things are going very well from a consumer standpoint as i mentioned, volume is strengthening. there are, of course, challenges in the world we live in but the team has done a great job executing our integrated growth

strategy to overcome those challenges and i expect the same will continue. >> a little bit of talk about china, beauty products in china. is it tough operating over there? >> i just spent a week in china, two weeks ago. i spent time with consumers in their homes. i spent time in stores, i spent time with our retail partner ceos, and, of course, with our team, also with a number of government officials. my view on the attractiveness of the long-term story there remains intact, short term, it's rough. the confidence of consumers has not fully recovered since the re-opening from covid. markets in our categories are down modestly year to year, but, again, we're doing well from a share standpoint and the rest of

the business is more than overcoming that and several of the other global challenges. >> jon, i thought your margins were good, your gross margins, and you got it from a couple of -- tell us exactly how much it went up and it was productivity was the lion's share of it but also price increases but at the same time, you're able to increase prices, commodity prices were actually moderating, so you're still able to raise prices. you're not passing along commodity increases. you're just able to raise prices even though your input costs are lower? >> so, first margin, gross margin up about 550 basis points, operating margin up about 400 basis points, very strong progress. the pricing that you're seeing there is really a carryover from pricing that wastaken previously that has not yet annualized. and then there's a modest amount of pricing occurring in some of the emerging markets as we need

to overcome the impact of currency to valuation. but in general, what you're seeing there from a price standpoint is pricing that was taken previously and that's why it's so important to keep our eyes on what's happening to volume, which is going to have to be a bigger component. the top line going forward and as i said we're very encouraged by what we see there, particularly in our largest market, the u.s. again past five quarters minus three, plus two, plus three, and now plus four. >> the consumer in the united states, you would character actually we're supposed to say she, i think, consumer, but the consumer in the united states -- >> what happened? >> generally strong. >> very interested in our categories and performance, that helps address the problems they're trying to address. we've spent a lot of effort on innovation to ensure that our

margin of performance is, indeed, superior and the consumer has been very responsive to those moves. as i mentioned earlier in the u.s., we're building market share, both value and volume and that's pretty much true across the range of categories that we compete in. >> why is gillette not valued -- and this is, i think, pretty interesting, these people at home aren't shaving? the hybrid post pandemic work culture is -- makes gillette worth less because they're like slobs at home and not shaving or something, jon? >> no, actually our grooming business has never been healthier. we expect -- >> well, thank god. we need good groomed people. why am i reading that. the volume growth has slowed due to the hybriding post pandemic work culture. >> people are still spending

more time at home. >> they're not shaving? >> -- their peers and sometimes they don't shave but, again, in general we expect to add about a billion dollars in market cap -- excuse me, in market growth this year in which we'll contribute to that disproportionately, the writedown is very simple, it's math. it reflects higher interest rates and, therefore, a higher discount rate which means that asset is worth less -- worth less than a balance sheet and reflects the strong dollar so that money that we're making on the grooming business in markets outside of the u.s. translates to a lower dollar value, so that's all that's happening with that. it's a one-time noncash acknowledgement of that reality and the business goes on. >> great, and buybacks this year, is that a surprise or what you've been doing each year? >> it's about what we've been doing each year. we've been returning -- our

belief and this is very simple. >> 5 to 6? what is it? >> yeah, and the cash we have on hand after we make important strategic investments is not ours. it's our shareholders and so we bring it back to them in the form of both dividends and share repurchase. >> think you're going to hit 350 billion market cap. i don't know whether -- horschel you've been there. i guess you've been there before but i guess that's a pretty big number. i've been following it for years obviously. i like all the products, pampers, olay, procter & gamble. you'd need a big wall to put everything up there, wouldn't you? i don't know who you decide gets to make the cut and who doesn't but great to have you on as usual, jon. i'm not going to say anything about cincinnati or sports. it's not the time. >> it's kind of quiet. >> kind of quiet. kind of quiet. some other teams are -- you know what you need?

you need taylor swift to, like, date someone on the bengals or something. >> she's happy where she is. >> joe burrow is babe-alicious, i think. i'm actually not available. let's talk about verizon. shares are rising after results. adjusted earnings of $1.08, a penny better than estimates. topped estimates of 34.6 billion. take a look. fixed wireless net additions for the full year growing 31%. total wireless post paid additions up 26% compared to a year ago and you're looking at that stock up 4% on the back of that news. >> you know why i went -- i went ah, you know why i did that? he followed me on x. >> he did? >> he did. i'm super excited. >> -- checkmark --

>> not yet. >> no, does he? >> 17.1 million followers. that's him. whoo. okay, i can go home now. when we come back united airlines forecasting a first quarter loss of the max 9 grounding but the stock is soaring on full year guidance. the ceo, scott kirby, will be joining us exclusively right after this break. check out shares of home builder d.r. horton falling off reporting a mixed quarter. $2.82 a share, 6 cents below what the street was expecting. it came on revenue, though, of 7.73 billion and that was better than expected. the company said that despite elevated mortgage rates, net sales orders actually increased 35% from the prior year. as the supply of affordable new and existing homes remains limited you can see the stock down by 5.2%. "squawk box" will be right back. ♪♪ heat makes it last.

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welcome back to "squawk box." united airlines stocks moving higher. phil lebeau joins us with a very special guest. phil. >> good morning, andrew. scott kirby, let's talk first off on why the stock is moving higher when you take a look at better than expected in the fourth quarter and, yes, there's going to be a hit to your costs in the first quarter because of the max 9. when you look at 2024 and expectations, what do you see? >> it's more of the same. 2023 was the year the plan came together at united. a year ago when we talked about what would happen. improvement in customer and

premium revenue and higher cost inflation than we were expecting but there's now a link because those are industrywide cost pressures between costs and revenue and they wind up like fuel as a pass through and led to great results in 2023 and the same playbook is running again in 2024. >> let's talk about guidance for the first quarter and in january, you're not expecting to get the max 9 which is grounded right now back, in fact, it's going to be a three-point headwind in terms of cost per seat mile. are you frustrated? >> well, i'm disappointed. first, on the max, when it's flying i'm 100% sure it will be safe. we have a pretty good handle on what happened and our tech ones team has been working 24/7 on this. the faa to their credit has been in there with us on the weeds, weekends, late nights so i think we're near the end game on that and the airplane will be safe but difficult the manufacturing challenges keep happening. not new but i'm disappointed in that. >> you're biting your tongue a

little bit here. when you talk with dave calhoun, how frank have you been about your frustrations trying to run an airline and having orders and not being able to get the aircraft or have confidence? >> yeah, look, you know, we're boeing's biggest customer in the world. we need them to succeed and i have a lot of confidence in the people. great history but they've been having consistent manufacturing challenges and need to take action. it needs to be real action -- >> when you tell dave calhoun this what does he say? >> he says yes, but he doesn't disagree, of course, but i am a lot more interested in seeing the actions -- we need to get through the max, we're doing that but on the back side what are the real actions to get the manufacturing process back to the high levels of quality, consistency that historically existed. >> i want to show everybody what your order book is in terms of deliveries of max aircraft and

150 of the max that you expect to take delivery of at some point are the max-10 hasn't even been certified at this point. do you still believe you're going to get those planes and when do you think you get them? >> so we're now best case five years behind on the original delivery of the max 10. and as we've gone through the last year internally at united, we've grown increasingly to believe that best case the max 10 just gets pushed further and further to the right and already started working on alternative plans and the max 9 groundings are the straw that broke the camel's back for us and we'll build a plan that doesn't have the max 10 in it. >> you'll take the max 10 out of your plan. how do you get the aircraft in that you were planning to get? do you go to the leasing companies? where do you get those aircraft? you know you can't turn around and find them on the street. >> we're early in the planning process so we'll see.

probably means we change the order book some. there's alternative airplanes instead of max 10s and probably means we don't grow quite as fast as we were hopings. we're still going to be in absolute the fastest growing airline in the history of world aviation but not quite as fast as we would because the reality is boeing won't be deliver all the airplanes in the time frame. we were 24 short last year and they won't be able to deliver them all. i've been boeing's biggest supporter and we're going to try to do anything we can to help, but we are not going to get all the airplanes delivered we had on the time frame we had and we'll rework that. >> becky, go ahead. >> scott, i don't think i've ever heard you this frustrated. you're pretty calm, cool, and collected and not foaming at the mouth but these are declarative statements. it sounds like you just said this is the straw that broke the camel's back. you're frustrated with this. when you're looking at other options, do those include

airbus? >> well, i'll wait and see. obviously there's only one other manufacturer that's an option but we'll wait and see and more the frustration i'm disappointed and especially because boeing is -- they're not only our most important partner, they're one of the most important companies in the country. they're important in the united states. they're a technology company, engineering company, our biggest exporter and they are taking action. i just wanted to do it faster and more definitive. >> is part of the problem that they, you know, separate company that they're working with for some of these things, spun off a long time ago but do you think that ultimately over time created a big problem? >> well, i'm not close enough on the inside to really know that to give a definitive statement about that. you know, to me and by the way when i -- today i talked to him as recently as yesterday, he

says, you know, the kinds of things that i wanted to say but they need to take real action. this is about blocking and tackling. they need to take blocking and tackling action because boeing -- they're not only one of the most important companies but have great people. hook at the storied history of boeing. they have wonderful people who want nothing more than to be the best, and they can't get there. they will get there. i wish it was happening faster but i do think they'll get there. >> would there be a point, scott, where you say, look, not you, but the boeing board, would there be a point -- i mean, how far back do you date these -- this is just the latest. is it five years? it's like five -- every time it happens you're like -- is there a time where you say every single time it happens, all right, this is it? this is the last time that -- i just wonder what could have been done differently? do you think someone else at the helm would have done something

differently over the past five years and is the board asleep? how do you explain it? >> i wouldn't say any of those. look, i think my own assessment, this goes all the way back to the mcdonenell douglas -- there have been positive changes because of that but this is a longtime building and i think this goes back to the -- >> what if something happens again? what if there's something after this totally unrelated then you say, okay -- >> look, i have a lot of confidence in the safety of the airplanes and particularly because we know what happened with this max 9, i think we're near the end game on getting that back flying. that's really not the question for me. the question is much more about boeing's ability to deliver the airplanes that they've committed to and to get the max 7 and 10

actually certified. that's a bigger question mark. >> hopefully god forbid it's a safety issue. if another, okay, another cut in, you know, how many planes you'll deliver or some other bottleneck that causes things to be pushed out. i have no illusions that this is an easy company to run but it is the premier manufacturing company in the united states. it brings a lot of pride and, you know, your chest swells when you think of watching those things take off and what they're able to do at 40,000 feet. it's just incredible. >> it does, and that's also why i'm certain that boeing, you know, at some point in the future we won't be talking like this. boeing is going to get back to the great storied history that -- one of the best engineering technology companies in the world and they're going to get there. i want them to get there fast. >> quickly touch base on the

737-900er. remember the faa a couple of days said, hey, check these and do visual inspectioned. you're almost done? >> we're almost done. millions of flights on this airplane, but as we always do in aviation, we double, triple, quadruple check anything. those inspections, we were almost done last night, they'll be done sometime today. >> business travel, it continues to creep back, doesn't it? >> yeah, back to united. you know, it is actually -- no, only two weeks into the year but we have seen a step-up in business travel. we're back now in terms of revenue, at least, above where we were in 2019. still well behind leisure travel and growth of gdp but we have seen a step upand we'll see if that continues for the balance. >> scott kirby, we talk about the business of united but part of that, guys, is getting the max 10 and as you heard, they're going to no longer plan on

getting the max 10. if it come, great but they're not putting it in their plans. guys, we'll send it back to you. >> phil, very good. thank you, scott. a roundup of this morning's earnings. the futures right now, little changed. been that way most of the w ning down ten points on the doand the nasdaq sup. we'll be right back. ♪concerns of getting screened faded away♪ ♪to my astonishment.♪ ♪my doc gave me a script i got it done without a delay.♪ ♪i screened with cologuard and did it my way.♪ cologuard is a one-of-a-kind way to screen for colon cancer that's effective and non-invasive. it's for people 45 plus at average risk, not high risk. false positive and negative results may occur. ask your provider for cologuard. ♪i did it my way!♪ that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place.

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let's get to dom chu. what are you watching? >> a lot of earnings headliners. a slate of do you components. let's see how many we can get through. we'll start with general electric, shares are down right now just about 3.5%. the restructured industrial conglomerate specializes in air row -- aerospace. first quarter forecast did fall shy of the expectations. now on to the dow components, shares of procter & gamble up about a percent or so right now. the consumer product giant behind products like tide and pampers reported adjusted earnings $1.84.

some are still parsing through it. revenues slightly below forecast and reaffirmed full year sales forecast. shares up 1.5%. on the telecom front, verizon is up. it forecast full year profits ahead of estimates. verizon was helped by much stronger than expected growth in new post paid wireless phone subscribers, people who pay a bill as opposed to prepaying up 4.5%. on the health care front, johnson & johnson shares are down fractionally in premarket. after the pharmaceutical giant reported better than expected proveds in revenues. full year estimates were slightly below with better than expected full year forecast driven by growth in its medical devices business and let's cap things off, excuse me, with a check on 3m. those now down 5.5%. the diversified industrial company behind everything from scotch tape and post-it notes to medical supplies and auto parts

reporting better than expected profits on slightly weaker than expected revenues but full year forecast fell shy of some expectations so, andrew, those are down 5.5%. i'll catch my breath and send things back over to you guys. >> thank you, thank you. lockheed martin reporting results and morgan has more. >> they reported 758 per share gap earnings. revenue of 18.9 billion, a beat as well. backlog record $160.6 billion. global conflict is spurring, quote, a strong demand signal for missiles and fighter jets and the other weapons that lockheed makes. their cfo noted over the past year the sales flywheel started earlier than originally anticipated and showing up in guidance as well. profit and margins stay under pressure with malave blaming a classified program in the missiles and fire control unit.

profit recovery should start next year. the u.s. government's continuing resolution is baked into guidance. if lawmakers don't pass a 2024 budget by march, though, that could impact new awards. that could, quote, haircut the sales outlook at lockheed. on the stall the $100 billion supplemental for ukraine, other, not a lot of visibility but the funding of some weapons production could happen through that package. on the f-35 strike fighter, quarter of sales, regarding the tech refresh 3, aircraft deliver, quote, we continue to make progress according to malave on. lockheed boeing jv, no comment on the perspective sale of the rocketmaker but malave saying, we do like this business. shares are up about 0.7% and i'd note with all the strife in washington, sales internationally are growing faster than domestically for the top weaponsmaker. >> morgan, i want to thank you.

we'll keep our eyes on their stock, close to up 5%. thanks. still coto come, we'll talk more about earnings and a lot riding on today's primary in new hampshire. we'll break down what it could mean for the gop as we head toward the presidential election. quk x"ilbeig back. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly.

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welcome back. we are learning more about the hack of a s.e.c. staffer's phone. prema thurely it claimed that spot bitcoin was approved but the s.e.c. saying the hacker changed the password to the agency's x account after gaining control of an employee's phone number and said the employee was targeted in what's called a sim swap attacking through the telecom carrier, the s.e.c. saying that multifactor awe meant indication was disabled and not reenabled until after the incident. the investigation is ongoing but as we mentioned the news you can use if there is an opportunity to do two-factor authentication on your phone, not just having a password but some kind of separate authenticator sending

you a text message with a code, some cases having an app on your phone that has a number that changes randomly every, you know, 30 seconds and using that number, go off and do it. do it immediately, a good thing. when we come back a pivotal day for the republican party. we'll find out if nikki haley can cut into former president trump's lead for the party's nomination. then the co-ceo of public.com will join us. the robinhood rival. we'll talk about the state of the tareil investor. "squawk box" will be right back.

>> you say it's time to rethink investments. >> not all about cost take-out but creating new revenue streams working with clients to build businesses powered by digital. >> what advice do you have for companies do that? >> there's disruption in every industry and sector and so they need to understand how can we actually use this disruption to ourbenefit? are we using all available technology such as block change, nai, immersive experiences and most importantly are we sitting on any unique sense of data that we can monetize and actually create new revenue streams. >> how do companies know if their digital businesses are actually having the right impact? >> so it's all about kpis. digital businesses provide realtime information so you should be using realtime kpis.

we can triangulate inventory levels with weather and traffic patterns so you may have accepted as an appropriate level of inventory shortage in the past is probably no longer acceptable because you have so much more information at your fingertips to manage that properly. >> mitch, thanks so much for sharing. welcome back. there's a lot riding on today's new hampshire primary for presidential hopeful nikki haley. joining us right now from new hampshire to talk about what a trump win in new hampshire means for the haley campaign is axios national political correspondent alex thompson. alex, some of the polls i've seen recently show her losing by

18 to 19 points to donald trump. if that's the case, what is the potential for her campaign beyond this? >> yeah, the latest poll, the morning tracker from "boston globe" shows her down 22 points in the state. now if the margin is that big it's going to be hard to see how that she can survive through the south carolina primary. now, because of the quirk of the schedule, the south carolina primary is not for a full other month and campaigns usually don't end, they run out of money and unclear if she loses by a 20-point margin, how she can go on financially and be competitive in her home state. now, nikki haley's campaign has signaled that they are going to continue on regardless of the result tonight. they already have scheduled a charleston rally tomorrow night and sent out invitations to a number of fund-raisers in new york city and on the west coast, but the truth is that, you know, ron desantis was in his campaign was insisting he was staying in until he wasn't.

so it's possible this is just a show of confidence in order to keep people motivated but also if she gets within ten points because of these polls, the expectations are pretty good for her. if she gets within single digits of donald trump i expect it to go on for another month. >> ron desantis dropping out, you mentioned that, and most of his voters probably are going to former president trump. he took a shot at nikki haley where he said, because we can't go back to the old republican guard of yesteryear, a repackaged form of warmed over corporatism that nikki haley represents and that may be key to our business audience, this idea that the republican party may not be the friend that it has been historically. >> absolutely, and it was so striking that, you know, most candidates when they make concession speeches don't go out of their way to, you know, insult one of the last rivals in

the race but that's because things between nikki haley and ron desantis had gotten very tense at the point and ron desantis has been arguing forever that nikki haley cannot win a one-on-one race against donald trump, and he's working to make sure that that takes place. now, what is interesting is that the whole last year we've been hearing the field has to consolidate. the field has to consolidate and the way that the field did not consolidate in 2016. that happened. we have a one-on-one race right now ahead of the new hampshire primary, but unlike 2016, the field did con saldate but then a lot of the voters and a lot of the candidates consolidated behind trump instead of the alternative. >> alex, i'm watching the sort of like a phoenix from the ashes watching donald trump, now, he always had the base, obviously, but such a low number and there have been op-ed writers and a lot of other people that said that donald trump is the only

person joe biden thinks he can beat. so, when alvin bragg first did that there were a certain number of people that say it's a grand strategy by the democrats to make sure trump wins the primary and is the nominee so he can lose again in the general election. has anything changed with suburban women voters, with -- i mean, not every party is fractured between a rock solid base and a rock solid percentage of never trumpers. i mean, it's fractured. the republican party is totally fractured. you saw the guys we just put up. if i were a democrat, i would take that as a real positive that the republican party is fractured. there's some people that will never vote for him that are republican. >> well, what you just said is half true in that some of us have covered democrats for awhile. i'm skeptical of any grand

strategy -- >> that they're that smart. >> this is why it is half true. talking to joe biden's people and people close to him, that they do believe that donald trump is the strong -- is the weakest candidate in this field and in fact there are some people, democrats close to the biden world and some people inside the biden world that see a great advantage to donald trump winning big tonight. donald trump has been the greatest mobilizer of democrats in history, better than barack obama, better than bill clinton, the best grassroots fund-raiser in democratic politics has been donald trump, but to your other point which is i think really key, now, we see these polls that show, you know, 66% of republicans say they would still vote for trump even if he was convicted, for example, or even though he's been prosecuted. now, that seems like a shocking number but the more important

number is that 30% of republicans would not vote for him and the thing is, if you're in a close race and can't bet 20% of the republican party, that 20% is really trying to vote for nikki haley, there's indication some of those voters will vote for joe biden and so, you know, while it's one of those things where trump actually may be an incredibly strong and basically unbeatable primary candidate, that he is a weak general election candidate in some significant ways. >> alex, thank you for joining us today. coming up, a lot more on "squawk" and talk about public.com's ceo will join us. he has an interesting announcement. as we head to a break, the winners on the s&p 500 and nasdaq, we'll be right back after this.

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news alert. we told you earlier that dwayne "the rock" johnson is going to be on -- well, we'll tell you that in a second. is joining the board of tko group which owns ultimate which wresting entertainment and ultimate fighting championship. and now the company announcing that netflix will be the new home of wwe raw beginning in 2025. and netflix shares up about ten points. the rock, who, in fact, does follow now rebecca quick, will be on squawk on the street at 9:45 a.m. today, along with that gentlemen on the left there, who, you know, most people aren't as good looking as they age, he actually, i think he gets better and better looking, ari manuel. the tko ceo. and he didn't pay me to say -- you paid him. >> it's a warped, strange --

>> meanwhile, trading platform public.com now offering options trading, retail investors used the platform to trade etfs, bonds, stocks, cryptos and other assets, but it hasn't used payment for order flow in its revenue model since 2021, until today. and we'll talk about it right now. joining us right now with more on the state of the retail traders in the new year, januaryick malen, he's the ceo of public.com. for those uninitiated who may not remember the debate that really took over the public discourse for a while, about this flow situation, why don't you explain what you decided to do then and what you're deciding to do now. >> so in our equities business, we're just trading single stocks. but after the events of gamestop, we decided to abandon the payment for order flow concept. the maga structure and today we're launching -- >> and payment for order flow, for those that don't know, meant that the citadels of the world and other folks who were effectively paying you, were

paying robinhood for every transaction. >> correct. >> so there was always a question of who was the real customer? was the customer the one that made the trade or was the customer the market maker who was paying you a fee for you to trade on their platform. >> that's been the discourse. and i think at the real heart of that discourse is, what are your incentives as a broker dealer and are they aligned with those of your customers. >> so you stopped doing it. >> yes. >> did that work for you, first of all? >> i think it worked incredibly well. we proved on many occasions that we saw at many times, more often than not, at least better execution, because we passed a lot of those savings back into the hands of our customers, because they got better execution by us going to regulatory exchanges. there continues to be a lot of discourse. the s.e.c. comes out with a proposal, as you probably know, also denoting that there's some conflict of interest here with regards to this model. >> not a lot in europe, for example. >> not allowed in europe, not in australia or canada as well. >> but we'll also say that ken

griffin has also said that he believes that he's actually offering better pricing and that customers that are trading through them, where they're paying for order order flow actually get a better deal. >> so why is he paying for it? >> there are a couple of different nuances to be mindful of. number one, the market structure on the equity side is quite different than the market structure on the options side. let me explain. so if you buy an apple single stock, you know, some market makeup pays for almost like the exclusivity to that flow, meaning that they will fill that order. no other market maker will see it. so we'll never really know whether another market maker could have given you a better price. now, the options trading market is quite different in that everything gets executed on exchange. so the market maker in the options payment world is paying for right of first refusal, a first pass, but it goes through the exchange, and if another market maker comes in and offers a better fill, the customer will see the benefit of that. what's interesting, the s.e.c.

proposal sort of had, you know, some more lingo around this open option model -- >> you can't buy exclusivity. >> so now let's pivot to what you're doing today, because that is a new announcement that actually relates to taking money for payment for order flow. >> absolutely. so, options trading has been one of our most requested features in a long time, but due to all the skepticism to what the incentives are, how it all works, we fought long and hard about how do we bring this to market in a way that's transparent, and there's no doubt that our incentives are aligned with those of our customers. and at the end of the day, what we decided is to pass half of our options trading order flow revenue directly back to our customers. >> so you are taking payment for order flow. >> we will take payment for order flow on the options model, but pass half of it back directly to the customers. so it's not just a mechanism that benefits broker dealers and market makers anymore, but end user customers get to see the benefit as well. >> this is a stupid question, maybe, but that sounds like, okay, we're going to sell the

order flow exclusively to one broker. we're going to get paid for that, but we'll give you some of the savings. >> we won't go exclusive. so in the options market, we will not go exclusive. everyone will work with various market makers, it will go to various exchanges. it's a lot more of an open model. it's not like this restricted competition model. there's actually competition for each order. >> i still don't know why these guys will pay for this. what's to suggest they're not front running? why would they pay for the order flow? >> that's been a big question for the order flow? >> at the end of the day, we're not a market maker, so we can't go directly with this flow. there's no really getting around these market makers, like the model we have for equities. we can't do it. >> so this is just a sort of philosophical question. those who are advocates for paying for order flow in the equities business would say that in a way, some part of the payment for order flow is being shared, similarly in this case, like you're doing, with the customer. maybe not 50%, maybe it's not very specific about how it's

working, but the argument would be, instead of a robinhood paying up-front or forcing you to pay up-front, that there's some shared cost and that the benefit of payment for order flow is allowing people to make trades at effectively a cheaper price. you buy it? you don't? >> some people position that as a trade-off. we don't necessarily see it that way. we think there's a best of both worlds scenario here. and that's what we're trying to do with our options model. no commission or contract fees, and you actually earn an order flow rebate for every trade you make. >> question for you, some people are now trading with you, i think, because they like the brand, they like what you're trying to establish and what you mean. the other question is, how many people you think trade with you or trade withwhomever because of the feature set, because they like the app better, because they -- what's -- how does this all work? >> that's an excellent question. i think really, this entire space breaks down to two things. technology and trust. and trust is something that in financial services, has been a key term for a long time, but i

would argue, after ftx, after silicon valley bank, even after '08, it's more important than ever. and then there's the technology side, which has much more to do with which products do you offer, how do you research those products. so we focused a lot on building a multi-asset platform, where you can buy bonds and options, crypto equities all in one place. >> we're going to run out of time. 30 seconds, do you have a take on bitcoin? >> you know, we've seen crypto trading search, in q4, with all of these etf news. we're still seeing in the retail community after those etfs came online that there's a lot more trading happening in the sort of traditional crypto. >> if you call it that. it's kind of weird to call it that. the etfs are among the more bought etfs, but there are still multiples higher happening. >> you've got to come on back so we can talk more about it. >> still to come, rundown of this morning's big earnings, lots of them. and we'll have former s.e.c. chair, jay clayton on esg and exxon's move to stew two

activist investors over trying orce the company to cut emissions. "squawk box" coming right back.

good morning. so far the biggest earnings from

corporate earnings, procter gamble, verizon, and more. and it's the gop's decision day in new hampshire. voting underway in the granite state, where nikki haley looking to stop former president trump's momentum. and exxonmobil trying to stop a vote pushed by activist investors on a key climate proposal. we're going to get reaction from former s.e.c. chair, jay clayton. the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square, where becky couldn't wait to get back here -- >> i take it back! i take it back! >> because -- >> you can't hear it. >> it's like my teeth are chattering. >> you can't hear it on tv. but i'm going to leave here --

i'm joe kernan along with becky quick and andrew ross sorkin. >> make it stop! >> i know. you're going crazy. >> u.s. equities -- >> it's been an hour and a half. >> and i know, i can feel it. i'm kind of getting car sick. i shouldn't say that to you. >> watch out, i'll throw up on you. >> spew right on the set. u.s. equity futures, some of that is 3m. 3m is a dow component, $60 million market cap dow component, they're asleep at the switch over at s&p or whatever it is. dow jones, s&p, let's see, down 18 now. treasury yields, take a quick look. i think we're backed up a little in rates. 413, 412 right now if you round it up to 4.13. and in china, shares of some chinese stocks in the pre-market. in the last half hour, china's securities regulator said that they're going to step up injection of medium and long-term capital into the market. all of this sounds like a plunge protection program that was rumored to be in effect over

here years ago. never really was, i don't think. he said that they're going to put the stable operation of the capital market in a more prominent position. it's like gobbledygook and focus on stabilizing the market and confidence -- >> just do that by stop with the regulatory interference they've been having to this point, whipsawing people. >> earlier we had one of the chinese stocks, billy, billy, billy, that sounds like ted knight, with his putter. >> dow component procter & gamble slightly missing revenue estimates for the second quarter. the company arounded $1.84 a share. some investors still parsing whether that's fully comparable to analyst estimates. procter & gamble also affirming its full-year sales forecast. the ceo john mueller joined us in the last hour. >> things are going very well from a consumer standpoint, as i mentioned, volumes strengthening. there are, of course, challenges

in the world that we live in. but the team has done a great job executing our integrated growth strategy to overcome those challenges, and i expect the same will continue. >> 3m also reporting earnings as joe mentioned for the fourth quarter. the company beating street's profit expectations for the quarter, but revenue came in right about in line, maybe a little bit weaker. it's really the full-year guidance in the current quarter that fell shy of some expectations. and that's why you see that stock off by more than 7%. and verizon beating fourth quarter profit and revenue estimates. the street also forecasting full-year profits ahead of expectations. verizon was helped this past quarter by much stronger than expected growth and new post-paid wireless phone subscribers. that stock up by better than 4.5%. >> meantime, the first look at fourth quarter gdp, it's happening on thursday, ahead of that, steve liesman taking the pulse of some top wall street economists on what to expect. steve, what are they telling you? >> it's just really interesting,

andrew, good morning. economists surveyed, they've upgraded their outlook for the fourth quarter and the first, another upgrade in a string of upgrades, but they continue on average to forecast a growth slump. a growth slump that never seems to come. the 18 economists we surveyed see gdp at 1.9% in the fourth quarter, up 1.2% from the october look that we did, and rising 1.4% in this quarter, up almost a full percentage point from the prior outlook. and economists continue to forecast that the slump that never comes, beginning in the second quarter, begins this time in the second quarter, where growth drops below 1%, you can see in that blue line, for two straight quarters. the coming slump has been a feature of the forecast for a couple of years now, where economists see growth slipping below potential or even into recession, but then they have to raise their outlook as the data come in better than expected. of course, the averages hide some differences. you can see here, goldman no longer sees the slump. they forecast trend growth throughout the year, 1.9%.

that's the blue line, whereas economists at city, they look for darn near a recession, seeing the next two quarters sharply negative. economists also lowered their outlook for inflation. core pce for the fourth quarter, 0.7 percentage points lower than they had previously forecast. a sign of how inflation surprised both the fed and the street to the downside in 2023. and you can see there, that gradual decline over this year, as it nears the fed's 2% target next year. hard to say why economists keep forecasting that two-quarter slump in the quarters ahead and getting it wrong, suffice it to say, the economy and specifically the consumer continue to prove really resilient and resilient from those fed rate hikes so far. most importantly thing, andrew, i think is, i think you've gotten richer being an optimist out there, though, of course, you can't guarantee that will always be the case. andrew? >> the question is, have people gotten richer, but some people haven't gotten richer when it

comes -- and then you get outpaced inflation at the same time. that's sort of the conundrum of all of this, no? >> i think that's a part of it. but as inflation has come down and you have returns, things like fixed income, returns in equities that have outpaced inflation, you have done, i think, just a better, in general, not betting in the first case on the end of the world, but just on better outcomes, i think. and i think that's where you've done -- you've done better investment. i don't think once they're in play either the economy or the market remain regular in terms of their investments. i just think that if you get scared and you pull everything back, i think you've lost money along the way. >> steve, thank you, sir, we'll see how this impacts confidence and polls and votes and all of that as the year progresses. >> let's get specifically back to the markets, earnings thus far joining us is lori, head of u.s. equities strategy at rbc capital markets. you see a pretty good year, i

think, lori. maybe not near-term, but 8% total on the s&p by the end of the year. >> yeah, so we're at 51.50, and we're trying to guess where the an ex will end up on december 31st. assist year-end number. what's interesting, back in november, we had a 5,000 target we set for this year, about a 10% return, so the anticipated return we're looking for is a little bit lower than we were a few months ago, primarily because of that big move we had in the fourth quarter. but, you know, our number's higher. and we have to mark our models to the market. but i think it's going to be a good year. i think we're going to make progress. with an 8% return, i'm still one of the more bullish strategists out there, which is an interesting factoid in and of itself. >> even though you would characterize sentiment as somewhat overdone, frothy right now, which explains your reason why we might see some near-term weakness? >> and i think it's important to distinguish how frothy sentiment is. if you look at the aai survey that comes out every week, this is an oldie but a goody, we've been about one standard

deviation above the long-term average in terms of net bullishness. if you look at where we were starting in early december through a week or so ago. if you look at a back test on what that means for performance, you're typically flat in the s&p. but you're still up about 6.5%. so i think that does a very good job of articulating sort of the short-term risk, but longer term, you can still get back on track. it's a different story if you're at two standard deviations. then you're typically down over the next 12 months. >> looking under the hood, you point that that the drop in rates started the long-awaited bottoming of the market for the small caps. seeing a backup in rates. >> it's really remarkable. >> and that stopped and we're back to the big caps again, right? >> we did. i mean, you know, investors were complaining about whiplash and narrative to me last year, and we're really kind of hoping things would settle down and sort of stick with the trend. and we've gotten whiplashed once again, as the new year has gotten underway. and everything that was sort of

working that got people frankly really excited in the fourth quarter has just gone back to the same old, you know, sort of large cap concentrated top seven names. >> it's always fun to try to -- you need a calculator, but we take an s&p total earnings for the year, and you were higher. you were at 244 -- oh, no, i'm sorry! bottoms up consensus is 244 to 245. you're not there. you're at 234. so if you put a multiple on that, it's interesting that you're still at 8% for the year. >> yeah, and that's where, you know, we're below consensus on earnings, we're not baking in profit margin expansion the way bottom-up consensus numbers are. that's a whole other conversation. but on the multiple, we're above consensus. we've built a model going back to 1962. we bake in inflation, use pce, ten-year yields, fed funds, and gdp. and we use that to basically forecast where the p\e and trailing terms should be at the

end of the year. that model last year was consistently pointing to 4,700, 4,800 on the s&p and a much higher multiple than a lot of people assumed. >> no one saw that. >> you're just analyzing the numbers and the trends and sentiment and putting it in -- >> yeah. >> you're not getting carried away with anything. you're looking at real -- >> people who like me, and not everybody likes me, by the way, but people when like me say, lori, what we love about you, you're just all about the data. we let the data drive the narrative. and this valuation study was fascinating. i'm a big believer that we're at the beginning of the post-covid era of investing. and if you're just using post-gfc pre-covid rules to do your analysis, you're missing the boat. so what i really learned doing that work, is that in the '70s, inflation did a better job of explaining p\es than interest rates. and i think that's exactly what happened last year. gdp doesn't always do a great job of driving p\es, but we actually found when we were building the model, i didn't have gdp in there to begin with, but people kept asking me, plug in this number, that number. they want to know if we stress

it for certain gdp ranges, what would the multiple be? i threw it in and it actually helped the model a little bit, and we realized that last year, you were actually seeing the fact that gdp, kind of going to steve's conversation, the fact that it was recovering and coming in ahead of expectations, that was really helping support the multiple, as well. if you go back and look at history, you learn a lot of stuff that people missed last year. >> that's interesting. >> and it's an election year. you don't give a gcrap. >> i care, i care -- >> not yet, you haven't decided yet. i just read the notes, you don't -- we have five different pieces of analysis that go into the 5150 target. and that's how the stock market behaves, based on how we run the data, about 7.5% return. stocks tend to be able to adapt to any political environment. but there is uncertainty that happens when the guard is changing. and if you look at the historical return, it's

positive, but a little bit below trend. so this uncertainty always weighs on the market. we think that uncertainty is still in place right now. i have european and canadian investors wanting to talk about almost nothing else but the election in my meetings. we try to save it for dessert if it's a dinner meeting, just so it doesn't derail the whole thing. u.s. investors haven't wanted to talk about it as much. but i will tell you that the iowa caucuses, the day after, that is all that my incoming was about. so i think people are starting to look and think about sector trades, and it's really too early. we don't have a lot of policy yet to analyze, but people are starting to go there, not just overseas, but in the u.s. >> see, you gave me some data on what happened during election years, but what i meant, you're not really saying one way or another. but you are thinking about sectors based on who the eventual winner is, is that -- >> clients are asking me about it. i think it's too early to make big calls, but those calls are starting to come in. >> i don't know about other people, but i like you. you're really straightforward. >> i appreciate it. i like you guys, too.

>> you seem fine, lori. thank you. i'll take your record for likability. when we come back, more of today's earnings movers, but next, what do the questions about those door plugs on the boeing airplanes mean for the company's image and financial position. we're going to ask an aviation expert and we'll talk to them about the things that scott kirby of united said earlier, too. stay tuned, your watching "squawk box,anth icn." d iss bc

the faa recommending airlines check door plugs in the fuselages of boeing 737 900-er planes they are flying. this is part of the expanded scope and increased scrutiny following a door plug blowout on a different model earlier this month. more than 170 of those variants have been grounded. united airlines now forecasting a first quarter loss because of that fact. the ceo scott kirby joined us in the last hour. >> we're boeing's biggest

customer in the world. they're our biggest partner in the world. we need boeing to succeed. and i have -- i have a lot of confidence in the people of boeing. there's great mechanics, great engineers, great sturdy history. but they've been having these consistent manufacturing challenges, and they need to take action. haas the point today, and to anyone, it needs to be real action. >> joining us right now on the new wave of issues boeing is facing is mike boyd. he's president and ceo of aviation consulting firm boyd group international. and mike, i was taken with what scott kirby was saying, because we just played a small snippet. he was talking a lot about how disappointed he is, how they are now looking at other options and he wouldn't rule out airbus as another one of those options. what happened here? how serious is this for boeing? >> look, i can sum it up in two words. mr. calhoun said it was a quality escape. what's that, like a wardrobe malfunction?

you don't want to hear that from a ceo of a company that's putting out airplanes that aren't glued together properly. so the problem we have at united, which is a great airline, and i've got to give it to scott, he's making that airline move, but the point is, they're wedded. we can go to airbus. airbus' dance card for airplanes is booked until 2030. there's not a lot of room there. so they're wedded to boeing, and boeing has to get its act together, because now we're starting to talk about consumer confidence in the airplanes. and that has to be dealt with pretty quickly. >> kirby said the best-case scenario, they are at least, boeing, he said, five years behind on the max-10 schedule. that's the best-case scenario. airbus' dance card may be filled until 2030, but these airlines have to think long-term, and i can't help but think that there aren't going to be repercussions where some of them want to say, okay, we need to be a little bit more vader. it reminds me a little of the supply chain problems you saw during covid, where everybody

said, hey, maybe we shouldn't be so reliant on china, even though it's the cheapest way to do it. >> but there is, you know, there is no other option out there. let's not mention chinese airlines. >> no, no, no. >> yesterday's technology, available today. that's really the issue. but you know, production capacity, they're just trying to make it work. boeing has to turn this around, because we are stuck with two major manufacturers. airbus and boeing. and boeing with now the 900-er. keep in mind, united has 8% of its fleet grounded, 11% of its narrow-bodied fleet is grounded now. another 163 900-ers. if they start qato monkey with them, now we have even bigger problems. if that's the case, what is wrong with boeing? what's inherently wrong with boeing? it's got to get fixed and it's more than an escape from quality. >> what happened with boeing? because you're right, i mean,

not only is so much of the airline infrastructure reliant on this, this is a huge point of pride for american manufacturing, very important for our exports. what happened? >> well, they got caught behind the curve. this is the second time it happened. i mean, years ago, when united ordered the a-320 for the first time back in the '90s, that scared the heck out of boeing, because they had fallen behind in their airlines. they had to redesign the airplane. they did the same thing with the max. our friends had to respond with what bombardier were doing, they bought the airline, and boeing sat on its rear end, basically, and said, we'll fix the 737. that has not worked out. boeing really has not moved into the future. that's the problem. >> should consumers be concerned or is this higher-level profit ideas that are really at risk here? if you're flying, should you feel safe? >> look, we work with labor unions. trust me, if a member of the

allied pilot's association at american or alpa gets in the front of the airplane, i'll sit in the back and go, they're not going to fly anything that isn't safe. that's our bottom line. >> that's excellent. that is excellent to hear. when we talk to scott kirby about it and just asked him if part of the problems were the idea that boeing spun off spirit, that does a lot of the work, aeronautics or whatever -- you know, that that was a long time ago coming. they have a harder time controlling quality from a company that no longer reports directly to them. is that a problem in the structure? scott kirby said he didn't know closely enough. >> i would say that it certainly is. if you don't own the company, keep in mind, spirit aerosystems is now doing work for a whole range of other people. we've worked with them. but the fact is, they're not boeing, and boeing does not have direct control over them. but they should have direct control in terms of quality. apparently, they don't with lawsuits being filed and several

other issues with what's gone on at spirit. spirit is maybe falling behind the curve, too. but the bottom line is, scott kirby is writing a check to boeing for 100-10s and now they're going to be relate. i suspect, you know, you never know. he has a red pen on his desk, too. he can put lines through things. and maybe he can do a deal with airbus. they do fly airbuses and they might be able to do a deal. maybe by spirit and get 170 airplanes right now. >> mike, thank you for joining us. especially for making us feel safe about getting in the a airways, you're right. nobody would do this, nobody would fly these planes from those unions if they didn't feel safe in them. >> yes, ma'am. all right, coming up -- >> i believe it. >> someone got on that alaska airlines. >> that was before you knew. now they're checking. >> all right. >> well, what else don't we know? top stocks -- >> you should just never leave

your house. >> i know, i've thought about that. later, we'll speak with former s.e.c. chair, jay clayton on exxonmobil going to court to stop one of its own shareholders from voting on a climate-related proposal. "squawk box" will be right back.

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welcome back to "squawk box." as we mentioned, it is a big morning for earnings. i want to get over to dom chu who's here to get us caught up on some of the big names. dom? >> we'll start things off with a check on pharmaceutical and medical technology giant, johnson a& johnson. the dow component down marginally, over 15% shares of

volume. it expected better than expected profit and revenues driven in part by stronger growth in its medical devices business. the outlook, a little bit more mixed. it was a slightly worse than expected full-year profit forecast on a slightly better than expected full-year revenue forecast. j&j ceo joseph wolf joined "squawk box" earlier this morning to add more color and context to that outlook. >> the near-term and long-term outlook is very strong at johnson & johnson. this time last year when we spoke to investors, they had questions about our ability to power through the stelara lost of activity, but we had a chance to explain how robust our pipeline is with ten products having the potential for $5 billion in revenue on peak year sales. >> we'll see if those shares can move beyond that 3% drop they've seen over the last year. turning now to industrials, general liquor shares are moving lower by roughly 3 ap #, now only about 1.5%, over 300,000

shares of volume, the now restructured industrial conglomerate is focused on aerospace, power systems, it reported better than expected profits and revenues, helped by strong demand for aircraft engines, parts and services. but its first quarter profit forecast fell shy of estimates, hence some of the downside. but it's well off the pre-market lows, now only down about 1.75%. and shares of dr horton are down about 5% right now. over 50,000 shares of volume. this is america's biggest publicly traded home builder by market value. it reported profits that missed estimates on better-than-expected revenue. dr horton saw unit orders up 35% during that quarter, but pricing was lower year over year, as were profit margins. dr horton did say that housing demand remains fas favorable. this is a stock that's up about 54% in just the last three months alone, up and roughly, you can see here, 56% or so over the last year. so keep an eye on those shares. andrew, back over to you.

>> dom, thank you for that. meantime, take a look at shares of alibaba this morning. i want to tell you about a story that broke actually in deal book just a little while ago, reporting that jack ma has been buying up shares of the company he founded, alibaba. he's bought about $50 million in hong kong listed shares in recent months, and alibaba chairman has bought about $151 million in u.s.-listed baba shares. chinese stocks up across the board today in large part, maybe on the back of that, and also perhaps word that regulators will inject more capital into the markets. jack ma has been appeared to be somewhat separated from the company. he remains on this alibaba partnership member of it, given his role founding the company. and for those that watch jack ma or trying to keep a watch out for him, he was seen, for the first time in a very long time, at an nba game in paris, where joe sigh's nets were playing

against the cavs just this month, wearing a brooklyn nets jersey and a hat, and he was sitting next to joe psi and his wife. >> you wonder if this ties back into the idea that chinese regulators are letting up to some extent on tech companies and maybe relaxing some of the rules that they started grinding in. >> i think that's what maybe some of the news today about the regulators is suggestive of. i imagine that -- and i don't want to speak for him, because i don't know the answer, but i imagine jack ma and joe psi are looking at a company that's down something on the order of 39, 40% year over year. and are saying, there's a lot more value here, and somehow, it's not being recognized by the market. we'll see, of course, how that all works. >> joe -- >> i saw the clips, but i did not see the actual game live. >> no, i did not last night. >> 70 points. >> he's changing the nba. >> i had the under. no, i didn't. >> coming up, inside today's gop

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voting underway in the new hampshire primary. nikki haley looking to hopefully, at least as far as she's concerned, blunt some of the momentum that former president trump gained in iowa last week. joining us now to talk about the candidates' economic agendas and their chances today, hoover institution fellow, lonhi chen. brookings institution policy director ben harris. i'll just start with you, lonhi. i saw in some of your notes that there is a lag effect for the economy and perhaps in your view, biden's numbers on his handling of the economy between now and the election, you think that there's a chance that those start to improve, because they should be better? >> yeah, i mean, certainly how people reflect how they feel about the economy should be better. we're still seeing a lot of measures of economic anxiety.

i think people don't feel great about the economy, even though the measures objectively demonstrate an economy in a pretty good place. it's possible that voters will revise their assessments as we move toward the summer and fall, but there are some other measures that the biden campaign are worried about. you're worried about the fact that you have more americans than ever working multiple jobs. there are measures that you look at, that you kind of understand why people don't feel so great about this economy. so their hope has to be that there is some impact on how people actually feel, because you can't tell people how to feel about the economy. >> that's not stopping them from trying, ben. i hear it every day with the guests that we have on, that say, you don't know how you feel. i always say, ben, correct me if i'm wrong, if real wage gains didn't start growing until may of last year, you know, at least two years into the presidency, and if you're buying power is

still below where it was when president biden took office, can't you feel that when you go to the grocery store, that prices are up 30%, my wages are not? >> yeah, so i'm glad you brought up inflation. inflation over 2023, outside of housing, is below 2%. and lanhee is right. i think you start to see consumer confidence go up with a lag, you saw a big boost over the past two months in terms of consumer confidence. it feels like perceptions are changing. the labor market is red hot and looks like it's in great shape. while i agree that there are certain aspects of the economy that people should be concerned about, overall between the labor market and calming inflation and continued economic growth, this is really a good news story and you're starting to see that in the consumer sentiment. >> lanhee, you know, when it goes up in 2023, disinflation, it drops to plus 3%. it doesn't erase the 2022 and 2021 increases, and i think that's part of the problem.

if you look at total, you know, total inflation in a lot of things you buy in the grocery, it's 30%. and people remember, 2 1/2, 3 years ago wasn't that long ago. if you go and your grocery bill is 30% more than it was, that's why people are feeling the way they feel. >> yeah, no, i think you're absolutely right. and you know, i was in new hampshire over the weekend, and had a chance to talk to some people up there, and look, the point they make is, sure, we're being told inflation is getting better, but it's not like that loaf of bread i'm paying $5 for now is going to be $4 tomorrow. the fact that it's $5.05 opposed to $5.25 doesn't make me feel better as a voter. i think that's the concern for the biden team, is that even though the numbers do reflect that some of this is softening, you know, people feel how they feel. and they remember not that long ago, to your point, that things are not at specify, and they naturally blame the incumbent for that. >> ben, prior to the pandemic,

people point out, surprisingly, we were in davos, we were in jamie dimon on, who made the point that prior to the pandemic, trump was growing the economy pretty well. and that certain things had -- were successful. i think he viewed that the tax cuts as successful. but you had real wage gains, big, historic wage gains with very low inflation, stock market went up quite a bit since election day, which a lot of people didn't think. and the unemployment rate was at a similar, not quite as low as it is now, but historic gains in employment, as well. all without inflation. do you think that's part of the reason that this election might be close? >> yeah, that's a great question. so it's unclear whether or not voters are going to compare the state of the economy in 2024 to the state of the economy in 2020 and make a decision based on that, or whether or not they're going to make a decision based on the policy agenda of the candidates or potentially something else.

i mean, you brought up the trump tax cuts. for my view, the tcja was a signature legislation passed by the trump administration. it's interesting, if you go to the trump website, there's no mention of the corporate tax cut. he brings up opportunity zones, which were 1/1000th of the overall cost of the bill, but doesn't talk about that signature tax cut. i think you're right to bring up that question. will voters compare the trump economy to the biden economy, which is pretty similar, or compare their policy agendas, which could not be more different. >> that's a mistake, lanhee, but it doesn't surprise me with a populist -- i would take -- i would cut corporate tax rates to zero. i would say it allow and say it proud. you know, you can tax the individuals that work at the corporations, you can -- i mean, this is -- we're competing globally, our corporations. are they not? why don't we want them to succeed, lanhee? >> well, joe, look, this gets back to the challenge in the republican party, which is, it's a different republican party now

than even it was four years ago. and the agenda of the trump team is decidedly more populist. you see much more of that language. you know, for many, many years, republicans were making the point about fiscal responsibility, entitlement reform. you hear nikki haley talking about that. you don't hear donald trump talking about it, because it's not a populist theme. a lot of people are not interested in entitlement reform in the electorate right now. so it reflects a shift in the republican party, it reflects a shift in sentiment among republicans, but generally if you look at a general election electorate looking towards november, i think the thought is, to take the most populist line you can, that doesn't put you in a bad place. and i think that's what the trump team's been trying to do. >> gentlemen, thank you. very good, lanhee and ben. we'll be talking again! between now and november. still to come this morning, former s.e.c. chair jay clayton will join us right here on set. we've got a lot to talk about, including exxon fighting back against investors, pushing a

vote oclatpros. and we'll get his take on today's vote in new hampshire. "squawk box" will be right back.

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welcome back to "squawk box." we have a lot to talk about with the former head of the s.e.c., jay clayton in just a moment. oil giant exxonmobil going to court in an attempt to stop a shareholder vote later this year in a proposal that would see the company adopt tighter climate targets. exxon is the only major western oil that doesn't set scope 3 goals. meantime, bernie sanders now taking that ceo comp pay ratio and proposing a way to tax big companies that have a big gap between those two. joining us right now to talk about all of it and more, former s.e.c. chair, jay clayton. he is now apollo global management's non-executive chair and a cnbc contributor. and i want to go to the bernie sanders of it all before we talk about the exxon piece. it is something that was just in

the news literally overnight. there was some -- and by the way, there was a big debate back when he first proposed this back in 2011 and '12. it was passed in 2013. and there was a whole complaint for a long time that the s.e.c. dragged its feet in implementing the rule, which was to create some transparency and disclosure around this ratio. some people at the time had said, you know, it's not just about transparency, at some point, someone like a bernie sanders will come in and say, either tax him on it or use it in some other way. what do you think is going to happen? >> what do i think is going to happen? or what do i think about all of that? >> both. >> the critics are right. the commission during my tenure implemented the pay ratio rule. but let's not look at it in isolation. look at it against the entire, what i would say as compensation disclosure package, which is really about -- it's 30 pages, 40 pages, about how effective our compensation decisions. and somebody decided, let's reduce this to one metric relative to employee base.

that's a silly metric. it was never a metric that a serious return-orient shareholder would use in order to allocate capital. >> and mind you -- >> so we tried to do our best with it, but it was a political metric. >> one of the things i've been reading about, just in terms of studies, since the ratio has been implemented in terms of public disclosure, it has done nothing to actually reduce the ratio between the highest-paid person in the company and the bottom-paid person. in fact, that's only gotten wider. what do you make of that? >> because for any serious shareholder, serious institutional shareholders who dig into pay packages, alignment and the like, it's just not a relevant metric. >> okay, and then i want to go to the climate piece of this. do you think that pay, at the top level, for the ceo and the like, is market-based? >> do i think that pay is market-based? >> so i'll tell you why i'm asking the question. if i'm going to go hire somebody tomorrow to work for me, typically, i want to pay them

enough to incentivize them to come work for me, for them to do a good job in the job, but not more than i would otherwise have to in any other capacity. but that's how a normal person thinks about how to hire somebody to pay them. in the context of ceos, and ceos in particular, is it not clear to me -- if we were to go down the list of the ceo pay of the top 50 people in america today, it is not clear to me that there is some other job available to them that would pay them more, like, even close. >> you know elon musk makes too much? >> let me respond to that. >> so there's a real question there's no market for these people and it's all some kind of club. that's the argument. >> okay, that's a very -- that's a like interesting argument. but it's like having a center on a basketball team. you have a great center on the

basketball team, you're paying them to get them there. what if -- what if they leave? how much are you going to have to pay joel embiid? how much will have you to pay -- >> in basketball -- hold on, that's a true market. joel, there's a market for him and there are other teams that would pay more for him. >> there's a market for ceos. >> what about for like elon musk, because he doesn't fit into that paradigm. >> totally. it's a very interesting question. >> i think that company entirely reliant on him. i don't know the answer. >> you're asking a lot of questions, but you're missing one, which is if you have somebody who's functioning really well -- >> yeah? >> -- what is it going to take to find somebody? >> there's a risk premium, of course. >> gigantic. i mean, you have people on the -- >> i'm saying that most people in america, the reason why they look at ceos and their pay packages, unlike a basketball player or a baseball player where you can see that there's a market. i can tell you michael jordan, i would argue, deserves every cent he's ever been paid and probably deserves more.

you can see every shoe that's sold, i mean, it's -- it's very easy. >> can you do it with jennifer lawrence? >> absolutely, the movies -- >> i think you know the answer. >> i think the answer, is there are some old boy boy networks still around where guys are overpaid and they stinks and other ceos are underpaid. >> you're looking at this as if it's a spot market. there are phases of being a ceo. when you come into the job of one of these large multinational companies, it takes a year or two to get your sea legs. then you're performing, directing the company, understanding all the -- to think of that as a spot market -- >> not a spot market. i won't name names. there have been people who have gone from coo to cfo to the ceo in their respective roles where

they're getting paid 2, 3 $4 million a year in the coo or cfo role. they get to ceo number two years later, and the number is $12 million. it's not clear to me there's some other company inamerica that wants to pay said person $25 million. >> we can debate the gross amount. let me talk about the step up. let's say you're looking for an internal candidate at the company. you want that carrot to be there to keep those people at that job. >> agree. assuming that they're not going to work at apollo and make $25 million. the question is can you make that much money? >> as an investor, i want to see the very best compete to become the leader of the company, and then i want to see them long-term aligned with the shareholders. >> do you think a really good ceo can be just as good -- i

don't think you think any of them are that great. as good as a really good left-hander where you need to start in the starting rotation. those guys make $80 million a year. don't you think it's possible a ceo, makes thousands of decisions every day, employees counting on him, customers counting on him. >> -- >> founders are a different story, by the way. >> the bigger issue is, it's going to be tied to performance, right? that's where i think the questions lie. if you are doing well while your shareholders are doing well and your employees seem happy, then that's paid for performance. a lot of this is stock compensation plans. it depends. >> i love people that are locked in for the long term to the stock of the company; even after they retire, long-term performance. you can do really well and you

ride at long with your shareholders. >> elizabeth warren says buybacks and spend all the money they spend -- they make it that simple. >> do we really have -- >> thank god warren buffett came out and said those things are really dim. >> what about, how are we going to get to net zero everywhere? how is a fossil fuel producer going to get to zero -- >> the exxon proposal, it's instructive on a number of levels. first of all, we have shareholders making the proposal who don't have returns as their interest -- >> talk about out of alignment. i agree with you. >> totally out of alignment. >> we have an sec that has decided ordinary business operations are something for the shareholders to weigh in on at least in the area of environmental. i think exxon is doing the right thing by coming to court.

>> i know you came to talk about that and we threw a curveball at you. you're such a big-time ball player, he can hit any ball and gets paid for it. ftanr.ld never hit the le-hde >> we've got to go. we'll have you back soon. squawk coming right back after this. 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 news and insights. trade brilliantly with schwab.

joining us right now on the markets ahead of the opening bell is managing partner at dcla, also a cnbc contributed tore. sir rat, here we go. markets are at new highs again. saw the dow close above 38,000 for the first time yesterday. when you start looking through what we've been hearing, what you anticipate from the economy, does this make sense? do you think there's more room to run? >> i think there is actually if you look at it in the last few earnings. when you look at procter & gamble, united and even a delta, i do think we're into what i would think of as a soft landing, and stocks are reflecting that. the thing, becky, we need to see are earnings. you're seeing that so far. the question is how much does the market believe those earnings are sustainable. on one side, we have the fed -- the market saying we're going to have five or six cuts.

the other side we just don't see inflation going back to 2%. i think that push-pull between, hey, earnings have to go up, cash flows have to go up, but what do we do with interest rates. >> meaning you're paying a lot more attention to earnings prior to this than any thoughts of a rate cut or what comes down the road from the economy because you're thinking take the fed out of the equation? >> exactly. think of health care, energy, utilities that have all kind of come down because now the markets say, hey, maybe rates don't come down. if they have strong earnings or just keep up with earnings expectations, you could see multiples expand in those areas where you've actually seen multiple compression. you've seen expansion in tech and communication services, but i think that's where the leg -- next leg of the market could be up. it doesn't actually mean the s&p will go up. it means equal weighted s&p can go up or the selected other

indexes could go up as well. >> what are you buying as a result? >> i like some of the utilities like aes. today you have j&j, glaxo. and then select industrials and financials. i think valuations can be really important. not to say i don't own the mag seven. you have to be in there. it's a question of how much do you want to own of those especially with the expectations built in, they have to have really good earnings and increase their expectations. >> sarat, thank you. always great to see you. >> thank you. let's take a quick final check on the markets this morning. you'll see right now the futures, about a half hour to go from the opening bell. futures are looking for slightly lower open when i comes to the doushgs off by about 30 points. s&p off by 7.5, the nasdaq up by about 50. we did get a flood of earnings that came in. you've got the ten-year yielding well above 4.1%.

the two-year sitting right at 4.44%. bitcoin back to 30,000 and change. not sure where it is now. w tfrmentsi is coming off its highest level since we've seen since december 26th. that does it for us today. we'll beright back here tomorrow. right now, stick around for "squawk on the street." they've got the rock. we'll see you later. dude tuesday morning. welcome to "squawk on the street." pre markets trying to get some traction as this earlier round of industrial q4 earnings have either revenue or guidance on the light side. problem tor, ge, netflix reports to nye. the dow's first close above 38k. >> speaking of the blue chips, 3m, j&j, verizon, procter & gamble are leading today's earningsar