mar markets wednesday, now it's january 24th i have to watch every morning to know what day it is. 2024 "squawk box" begins right now. ♪ good morning, everybody, and welcome to "squawk box" at times square i'm becky quick along with joe kernen and andrew ross sorkin. let's take a look at where the futures are. yesterday you saw a pullback and the s&p closing at all-time highs. this morning green arrows across the board. i'm guessing netflix has something to do with some of that we'll look at that stock in just a little bit the dow futures up by 71 and the

s&p 500 up 21. the 2-year yielding above 4.3%ing. >> meanwhile let's talk about what's happening former president donald trump winning the new hampshire primary with 91% of the expected votes in now trump holding a lead of about 55% to 43% over rival nikki haley. his victory speech last night, trump was joined on stage by former rivals vivek ramaswamy and senator tim scott. meantime nikki haley vowing to press on with her campaign here's what they had to say. >> new hampshire is first in the nation it is not the last in the nation this race is far from over there are dozens of states left to go.

and the next one is my sweet state of south carolina. >> on the democratic side biden choosing not to file for the ballot following the request that south carolina be the first state to count in his parts's nominating process he won in new hampshire after a successful write-in campaign we're going to talk a lot more about the presidential candidates in the race later this hour. we've got pollster frank luntz to talk about. >> larry hogan will be on later today. i don't know what it leads, what the options are. at this point, a very small -- >> no, no. i think she spent more than $31 million and new hampshire was there from the get-go. if you can't win in that state, it's pretty complicated. >> there's one wild card conviction of a felony i don't know if that would do it i think if they did it in the

exit polls, would that change your mind -- i think it was a majority of people said not even that would change my mind. this morning ceo dave calhoun is heading to capitol hill to meet with senators about the grounding of the 737 max-9 planes calhoun has meetings scheduled with senators ted cruz, mark warner, and jerry moran who's going to join us in the 8:00 hour ahead of the meeting. senator moran is the ranking member on the aviation subcommittee boeing is holding a quality stand-down tomorrow at the seattle area location where it makes the 737 aircraft, pausing production and delivery operations for a day employees will attend quality workshops and pause to evaluate and make recommendations about the processes. boeing shares are down

that stands out to me. 24 hours you're going to have some classes and stuff about quality. >> like we do. >> like we do. >> h.r. stuff. >> is there a calm between orange and red the green is okay. that's like -- that's like you, green. you would never say anything then there's yellow. like whoa. >> i would never get near the yellow you're in yellow. >> i live in yellow, travel to orange and sometimes get the dark red, blood red almost i tell you, you've got to live you've got to live, andrew you've got to live you can't have the man telling you what's okay because it's changing. >> andrew, let me mirandize you, anything you say will and can beheld against you. >> do you want a lawyer? johnson & johnson has

reached a tentative settlement after an investigation of its baby powder. the probe was whether the company misled people -- i don't know if you call them patients or consumers about the safety of its talc-based products. it's going to pay $7 billion the lawsuits allege that the products caused cancer j&j contends that it now discontinued talc powder products and say they are safe for consumers. >> meantime ebay is announcing they're laying off 1,000 of its employees. they're telling their employees to work from home today, that's the to provide space and privacy for laid off employees to become notified this is becoming a new trend

where they tell you don't come on days people are being laid off, which i think creates a tone, a sense of -- >> fear? >> not just fear, but it's -- you're doing it alone. there's something to be said about not having to walk out of a building holding a box with your colleagues watching you some people think it's more dignified to do it that way. >> i kind of take that line. >> that's interesting. some people want to be able to see their colleagues. >> when i'm getting fired, i don't think i want an audience. >> do you want to be able to get your desk? a big thing is people want to know that everything they're taking with them is theirs >> if i have an audience, the only thing i'm thinking is what finger you're sticking up. it's -- i don't know >> i'm ready i can leave -- >> right now you don't have a desk. >> i've got some straws and stuff, but those aren't really mine a couple of bananas.

>> did you see the "l.a. times" with the layoffs they had? there was somebody who was complaining, posting it on twitter how they were on a business trip. they're worried about their credit card being shut off, but they were fired in the middle of a business trip. >> i would be shongecked if -- you have a thousand people at ebay, some are probably on business too. wayfair has recently announced a round of layoffs they're cutting 13% of their work force they say employees who work remotely were more likely to be laid off this is an interesting new phenomenon in the work from home trend. wayfair's co-chair says a sale of the company isn't being considered he said at the meeting if a bankruptcy is inevitable, then

shame on all of them tiktok has cut 60 jobs in advertising. they say any of the workers could apply for the 120 open internal roles that are posted. meantime fintech brex cuts 20% of its staff. and we're watching shares of texas instruments this morning as well. they're underpressure after the chipmaker's first quarter forecasts came in lower than the street expected. the company's ceo cited a weakness in automotive sectors revenue was down 13% year over year that matched the street's expectations you can see texas instrument shares off by 4.2% by the way, that's similar to what we heard from 3m yesterday when they talked about weakness they'd seen in consumer electronics. jim bullard, friend of the show, says he expects the fed to

begin lowering its inflation rates before inflation hit 2/% he told "the wall street journal" cuts could come as soon as march he says the fed doesn't want to get into a bind by hitting the 2% p inflation without having moved policy we'll get the latest read on inflation on friday when the december pce index stayed up is due. is there anything even better than green >> white. >> you, my friend, are very comfortable in the yellow. i see you over there judging my orangeness. >> yeah. trump is orange. have you ever thought about that >> orange man. >> he's pretty comfortable you're bordering on orange at times, are you not

people have seen it. viewers have noticed it. >> i've sat next to you for a long time. >> seeping osmosis. like watercolors seep in. coming up, netflix stocks surge. bank stocks are higher after the country's central bank announced the biggest cut to the reserve ratio since december of 2021 we'll talk about whether now's the time to add china's exposure we'll talk about that at the bottom of the hour "squawk box" will be right back. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. i'm so glad we did this.

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mayor brandon johnson is planning to face out gas stoves in chicago it would require electric power instead. mayor johnson's plan was inspired by recommendations from outside advisers as part of a plan to fight climate change and improve health it follows similar moves in san francisco and new york state that plan is opposed by several powerful unions including an engineers' union says a ban would restrict options and with power outages, gas is still needed could you imagine a blackout where it used to be you could still heat water. >> can you imagine paying top dollar for someone trying to cook on an electric stove.

it doesn't work. come on, brandon oh, no, that's not the expression. >> there's something likely to happen where people who pay top dollar at top fancy restaurants still find a way to get grandfather claused -- >> this is -- i'm not going to get into it, but it's just so ridiculous it's such a progressive ridiculous -- it's cliche it makes me laugh. >> i don't think you have anybody at the table to argue with. >> mr. green. a big test ahead for the high end real estate market for property that at one time was one of the most expensive listings ever in the hamptons. robert frank is here to join us about this very property what's happened? >> good morning, andrew. this was listed for $150 million offed rent for $1.8 million a month. now the famous hamptons estate known as la dune is headed to the auction block.

four acres, two houses, ocean front. the owner was louise blewen. she bought the property in the 1990s for $13.5 million. as her business faltered she put it up for sale in 2016 it came on and off the market. no buyers emerged. one of the loans defaulted last year she put it into bankruptcy so it has 23 bedrooms in the two homes combined there are two pools, a sunken tennis court, theater, spa, two gyms, everything you could ever want the action will be at 4:00 p.m concierge sold the most expensive home, an estate in l.a., that was listed for $295 million. it sold at auction for 141. >> she couldn't get anyone to bid on this? she couldn't get a buyer in the past >> it was unclear what she was willing to take. it was listed at 150

the starting bid on this tonight -- today is $66 million. it's going to go for more than that, but it's clearly not going to go for 150. >> she bought it how many years ago? >> in the 1990s. there are two houses one was built in the 1890s it's an older bugger house that might need renovations the other was built in the early 2000s. it's a fairly new house with all the implenties. >> why in the world would she put it in bankruptcy rather than get a cut? >> she had two loans, one in default against morgan stanley the loan against morgan stanley was $50 million. she had another one where the debts wither piling up and they couldn't find a buyer. could she have accepted 80 and pay off the debt, i don't know. >> i want to do a bed and breakfast right there. i want to do a bed and

breakfast. 22 pedrooms, we could make money. >> i would like to see you cleaning the rooms. >> there's three lots tonight. one is if you want to buy them combined the other two are if you want to buy them separately. >> i don't think you could make money -- depending on how much it is, you're not going to make money no matter what however, out in the hamptons, if you try to rent, you have to go four places to rent a nice place. >> yeah. although the rental market was oversupplied the past two summers in the hampton so as a rental property, it probably doesn't make sense. they were vbl trouble renting the last couple of summers they were asking over a million dollars a month for it. >> that shows you the danger of leverage the amount of money she would have made had she not borrowed against the property. >> absolutely. we think the rich are rich and sometimes we think it's a masquerade it's also proof that just

because someone asks for a certain price for property, we'll see what it's worth. it could be half that. >> i could be happy with much less space. >> well, you're a modest person. >> i need a table for my feet up, big screen tv. >> eventually nobody's going to travel. >> you say you need a couch and a remote. >> i want to be there. i want to be here. >> without the hamptons traffic. >> you went to the swiss alps and sat in your room. >> i went there. ♪ the hills are alive ♪ >> that was awesome. >> that was still the alps. >> yes. >> they're crossing over this way. coming up, netflix shares up over 9% after a much bigger jump in subscribers

more than 4.25 expected. we're going to have much more on netflix after the break. then we're going to talk more about the new hampshire primary results with pollster frank luntz. "squawk box" will be right back.

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finding the next epic place isn't the point. in a nissan pathfinder, the search is the adventure. (♪♪) with the earnings, netflix might have missed estimates. they smashed the estimates netflix says it will in ids words occasionally ask its members to pay a little extra to reflect its investments and improvements in the service.

joining us on the report is an entertainment and business analyst. that was above a whisper of it, would you say, jessica >> it's well above anybody's numbers. we don't usually hear the whisper numbers. they were north of $9 million. so $13 million blew past basicallier's nu-- basically everybody's numbers. >> i know business is tough and cord cutting, but people still love sitting in front of a big screen tv and that's how we sp spend a lot of our leisure time. what else -- do you think wwe, that's part of the answer to netflix's -- it doesn't do it for me, jessica. >> okay. but that's not until 025, so w

still have other a year for that what drives netflix is engagement it's like the old cable tv bundle there's something for everyone you turn on your screen, whether it's a television or mobile device, and the first place most of us go is to netflix there's 260 million subs, but they believe the town is north of $500 million. in the case of raw, they're passion at fans. they're a sport entertainment. it's not necessarily a sport but it's a global entertainment sport or global programming, and they can grow this internationally in many countries. again, it's like year-round programming. but there's so much more to it if you think about the growth drivers for netflix, it's not

just subs. as you mentioned, price is one lever that they can pull but in our view, the most important thing is the advertising tier they're just starting and this is a three- to five-year if not 10-year runway when you think about where his efforts haven't gone in the last few years, it's moved away from linear television to digital, and, you knnknow, brands go whe eyeballs go and they're just starting advertising doesn't matter for netflix in terms of its numbers, but as they scale, grow, and learn the business, this is going to be a giant driver, and i'm sure that most of us have not modeled this historically as they scale up. >> what they're going to be able to do in terms of monetizing things, they can just sort of lay in wait and keep adding subscribers. and there will be a time when

they can do things with advertising where people are going to say, okay, i'll pay up. >> it's actually very interesting. the one thing it puts new consumers onto the advertising tier would you rather pay $7 or $17 to get four to five minutes of advertising? it's not a lot. >> but it's more valuableto them, right, if you're an advertising subscriber i heard they can make maybe $20 for the advertising subs. >> exactly basically the revenue with a small subscription plus advertising is even more, but what's interesting, we're so used to watching 15 minutes of advertising, it will be targeted so it's more interesting to you, to becky, to joe.

>> they have the little circle i think, wait a minute, i've only got a minute and a half yet. there are certain times on regular tv it's like -- they even come back for a second and go away again. that's bad a minute and a half, i can do standing on my head. >> hey, jessica, a question for you, though, about sports. i know they say this is not really sports and all that, but at some point given their size and scale, i would think leagues would actually want to be in business with them iffer a very long time leagues didn't want to be on streamers because they didn't have the lynch. if you were with the nhl, you had to be there with responders. i think netflix is the only one that truly has that scale and could they ever add either additional sports tiers or other things do you ever see that or don't

you think this is application they one day might be going in that direction >> netflix, never say never. they said no sports. they're in sports. this is a 10-year deal with raw. they can back out after five years and it's a fixed price the major leagues, whether it's nfl or nba, it's not at that netflix doesn't have the platform -- of course, they do, and they're doing more with live -- it's at what cost they're looking at pro-profits that's the bottom line yes, they might get into sports, but at this point, media rights are way too expensive. at this point they're probably peaking anyway nba is the last one. if sports rates come down and there's a more interesting model, wu could imagine the day when netflix is involved

just as an example when we were talking about advertising a second ago, they're approaching this in a very significant way they're offering advertisers a chance to go into the top ten shows. you know there will be massive reach. but to follow a viewer, consumer from "bridgerton" to "stranger things," you can follow them with ads >> we had tom rogers on. he has said netflix because it doesn't have any distractions, doesn't have anything else going on like the major media companies, that that gives it an advantage. i don't know it still seems like there are some advantages to having -- i think about, you know, if you're a company that owns a broadcast network that's involved with sports or other synergies, is it always -- it's never an

additive, it always takes away from a company's focus is this a better model for our modern-day media, jessica? >> having sports is really important because the other things are all in it whether it's google or apple, amazon it is a way to attract sports. they're very important you attract a large audience and live audience in a demographic that's hard to reach. >> news and other things >> there's tons of other things. netflix is doing more of that. >> like wwe. he's rolling his eyes at that. there's a significant audience for that. >> i liked it when i was 7. >> there's a passionate audience whether it's you or i or somebody else, it's a passionate audience that follows this content, and it's way for them

to reach a definite audience. >> who did you vote for in new hampshire? >> i'm not touched that one. >> come on bernie bros are at we, aren't they jessica, thank you good to have you on this morning. all right. at&t just reporting coming in with adjusted earnings at 54 cents a share. that was 2 cents below what the street was looking for, 56 increments a irshachlt revenue looks like it was higher than expected it's the guidance for 2024 that may have a lit billion it of an impact here on the stock, which is now trading off by about 3.1%. 2024 guidance, they're saying free cash flo, they're looking for $17 billion to $18 billion. $2.15 to $2.25

that includes headwinds of about 24 cents that are all noncash items. if you put the 24 increments back in, that would get to the high end of that range, 222. but, again, there are noncash items. speaking with the company about this, they say it's arison deal. they'll had nokia equipment and that's going to move up the charges they'll have to take they're also looking at pension noncash charges because of lower interest rates again, that's accounting like we heard yesterday from 3ming but it's lower than the street's expect stocks by off by more than 2%. i spoke with pascal, the cfo he says he expects the headwinds to dissipate he said they expect to be in a position to grow earnings per

share in 2025 as those headwinds dissipate. again, the company is hanging its hat on its free cash flow performance for the fourth quarter. $16.8 billion, that's up from the guidance they gave they talk about their customers up $1.7 million for the year they say it's the best full year operating income it's down 2.25%. when we come back, former president trump winning the new hampshire primary. nikki haley is vowing to continue her campaign. we'll talk to pollster frank luntz next

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welcome back to "squawk box. former president donald trump winning over nikki haley she says the battle is far from over joining us now is pollster and political strategist frank luntz. frank, is it far from over or was it done last night >> it's somewhere in between

it's -- you can see the finish line, and the reason why is two-fold donald trump's support is incredibly intense in fact, i've never seen anything like this in my 35 years of doing politics. his voters are not looking for anyone else. they're not trying to tee side between trump and haley. they are completely and passionately pro trump second, haley proved last night that she's a tremendous thought among independents, moderates who take you from 45% of the votes to over 50%. if you're looking at the primary, donald trump is this close to getting nomination, but if you're looking at the general election, then you have to give a second look to nikki haley simply because she attracts voters that trump doesn't. this is a t-shirts i was given yesterday. >> does it say enough or tough put it up? >> you can't see it. >> we can't see it well enough.

>> hold it above enough okay, is that a nikki haley haley shirts >> no. it's enough about politics, enough about negativity, extremism. it's simply enough >> who's putting o it the shirt? is it nikki haley or is it broadly? >> broadly most important, 77% of americans don't want trump versus biden. they want somebody new and different. >> they keep saying that and then it seems to be they're voting very differently, so i don't understand -- >> enough -- you've been saying that -- you know, we even gone back and forth you made that t-shirts yourself, luntsz. >> no, i did not. >> how many did you make no, i know how do you say -- it is -- i hate to say it is what it is

but with donald trump, you're not going to stop the divisiveness that's the current union we're going to be in until november. there's no way around it unless -- i don't know. i don't know what possibly could happen, frank. it's going to be nasty he can't pick nikki haley, can he that would be a great vp for him. that could happen. >> i'm city betting on the governor of south dakota, kristi noem or the person who stood next to him yesterday, tim scott. here's what's important. it's not just winning the primary because that -- you can't win the general election without winning the primary, but if you win the primary and you kill yourself for the general election, what good is that? tr trump, if he is the nominee -- and i think he will be -- he still has to go from that 45% to 46% and put him over the top, so

he needs something broader, someone who brings in voters that he doesn't bring in the problem is i don't know if he's humble enough to accept that fact. >> so just play this out how is this going to go, and how much more money is nikki hay will i going to be able to raise given these numbers. if she's got to go the distance at this point in the ball game, she has this big fund-raiser coming up in a couple of days, but after that, folks only like to vote on people they think are absolutely going to win. >> well, look, south carolina, the polling numbers for her are horrible her home state, she's losing more than 2: 1 i don't know if that's going to change i've been told by her people that the super tuesday werhere many than ten states are allowed to vote, she has a greater chance of winning. however, trump is going to kill her for that and i believe he's going to go more negative, and,

frankly, andrew, ore the next 24 hours, her statement was made when she was losing by about 6%, 7% we don't know what's going to happen later today it's absolutely possible she'll say enough with the campaign in the end she's going to have to draw among traditional voters, and, frankly, donald trump's support is so intense, i don't see it happening. >> it's probably as good as it's going to get for her new hampshire is as good -- and super tuesday, obviously -- i mean if she did 12 in any of those states, only losing by 12, that would be shocking, wouldn't it do you think she can do single digits in any of those states? >> the hoss stilts for trump is as strong as the support for trump. >> i know. it's crazy. >> let me ask you, frank get to a general and let's

assume there's no conviction, although, i would love to hear what you think if there is some kind of conviction. >> i would love it. >> no, no. if it is head-to-head trump versus biden, i'm imagining that that's also going to galvanize democrats to come out in force as well. the question is do you think there's enough of them given the polls that you've also alluded to democrats say they wish there were an alternative. >> not all, but some. >> i hope we can bring to air the biden voters who will not be voting for him in 2024 yes, it's about affordability and leadership, but in the end, the one thing that joe biden cannot impact is his age, and that age issue is going to become greater and greater donald trump has his weaknesses, and they are this wide, but so

does we're going to have the lesser of two evils, and joe biden's support is getting weaker as time goes on. >> you mean it's getting harder. people have looked at some of the polls that nikki haley beatses biden and she actually beats him more easily. >> it was a grand shot for the democrats to get donald trump. >> do you think that's the case? that's what i'm trying to understand. >> first off electability does not matter in the republican party. they want someone to fight for you. a fighter's more important than electability houf, when push comes to shove that age issue makes biden so weak i'm surprised organized democrats, congressional democrat, the democratic party for the governors has not said enough to joe biden. he's the weakest democrat against donald trump. >> frank luntz, always good to

see you. we'll be talking a lotore min the next couple of weeks and months as this continues to play out all year "squawk box" is coming right back s 5% apy. 5% apy? that's new! yup, that's how you business differently.

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the move comes after ackman sharply criticized harvard university and top ivy league schools for failing to root out anti-semitism on their campuses. when we come back, stocks in china reboundinging after beijing made several moves aimed at injecting capital into the market so is now the time to add exposure to china? we'll try and answer that esonex quti nt. i think i'm ready for this. heck, yeah! with e*trade you're ready for anything. marriage. kids. college. kids moving back in after college. (applause) here's to getting financially ready for anything. and here's to being single and ready to mingle. who's ready to cha-cha?

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news out of china overnight. the central bank announcing plans to reduce the amount of cash banks need to have on hand by 50 basis points effective february 5th the bank governor said the move would inject the equivalent of $440 billion into the market part of the evaluation will focus on how executives manage stock performance.

officials encourage those executives to control the performance, using market oriented methods like buybacks and dividends. and eunice yoon tells us there have been reports of hedge fund managers to refrain from short selling, so propping things up at all costs joining us to talk investing in china is patrick chavanik, former chief strategist at silver crest asset management. all of the stuff that they have been talking about the last couple of weeks, does that boost your confidence in investing in china? >> the things you just described, they don't sound like market oriented measures especially telling people not to sell china has demonstrated in the past it can put a floor under share prices if it wants to. if that's what you're betting on, then fine.

but if what you want to see is the doom and gloom aura that is over chinese markets somehow go away, i don't think it is going to go away anytime soon. because the problems are deep and they're not going away >> and i mean these moves are really kind of phenomenal to think of a government telling people to do all of these things after, by the way, that same government was responsible for talking down a lot of these companies and these stocks before because of the moves they were making in the past. >> and they have done it before. they put a floor under the market, but they haven't addressed the underlying issues. which one of them is u.s./china tensions a lot of investors, both outside of china and inside of china are worried about chinese companies as well as other companies doing business in china being in the cross hairs of tit for tat sanctions. and i don't see those tensions going away the other thing is it is not just people outside of china

worried about external issues, but there is a real sense of gloom over the chinese market domestically people don't feel like the country is going in the right direction under xi that doesn't translate into open opposition or criticism, but it does translate into a kind of despondency about the future of the country and the kind of moves that would really change things >> that money goes away pretty quick. it is, like, dumping a bucket in the ocean, you know. you keep trying and trying, but it is not -- are you sure it is totally different than qe or when the fed just buys bonds and, remember, people said that it wasn't completely out of the realm of possibility that maybe the fed would buy s&ps it never happened, i don't think, but is it that different than buying -- >> it is not totally different but it is a whole different order when you have the government telling -- >> telling and buying stocks,

okay. >> so the kind of heavy-handed intervention is quite different, which some people say is good if they want to see share prices stop falling, but in the end, it really reinforces the problem, which is that people feel that the business climate in china is very heavy-handed and state controlled if you're worried more about them rounding up on -- the next time they round up entrepreneurs, and get them in trouble, it's not moving toward the more market oriented outcome that is really the cure to what ails china. >> can i ask, joe ma -- joe tsai and jack ma bought shares of alibaba yesterday we were reporting on they're doubling down on this. if they seem to have more confidence, should we read anything into that >> i wouldn't say yes. there are good companies in china. the problem is what is the

catalyst for people taking a completely new look at them? and that's not just foreign investors. that's chinese investors there is an article in the "wall street journal" the other day about chinese investors pulling out of china and putting their money into the japanese market >> yeah. >> because they're so despondent about the outlook. i actually as an investor, i'm more interested in who is the beneficiary of this, and the beneficiary has been mexico. mexico, with the fringe shoring and -- one of the reasons why the mexicans wanted to make a deal quickly with trump over nafta was that they knew that if they did, the ire would shift to china and they would be the primary beneficiaries of that. and i was in mexico last summer, and for all its other problems, trade with the united states is booming because companies are locating in mexico as an alternative to being in china because of -- >> like onshoring or close-shoring. >> fringe shoring. >> patrick, thank you very much.

patrick is a man of many talents. he also has a book about learning to fly, which he learned how to do over covid. >> you got to keep your boarding pats pass exactly where you know it is can you help us get in the front of the plane >> no, but i can tell you that learning to fly -- >> you're talking about learning to pilot. >> pilot a plane. >> i need help learning to fly. >> makes you feel better about being a passenger because you know what's going on you don't feel as out of control. that's one of the reasons i wrote the book, not just for people who want to learn to fly, but people who want to understand what's going on >> have you ever been in a plane now as a passenger and go, i do know what's going on and i don't like it? >> no. the safety standards are very high i know we're all talking about 737 max and everything, but there is a big pilot shortage out there right now because the -- >> you have a second job if this whole thg esindon't work out "squawk box" coming back right after this

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good morning, everybody. futures in the green af after netflix posted a big subscriber jump. former president trump winning the new hampshire primary. nikki haley vows to keep fighting we'll get reaction to last night's results and find out what is next for the gop from former maryland governor larry hogan. and the road ahead for tesla. we will preview tonight's big earnings report and find out where the stock may be headed. the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square i'm andrew ross sorkin with becky quick and joe kernen futures, two and a half hours before the market is set to open

this morning, here is where things stand we have green on the screen. we'll talk about the elections and what just happened in new hampshire last night but, dow would open 92 points higher nasdaq up 122 points s&p 500 up about 21 points treasuries right now, ten-year and two-year, looking at the ten-year at 4.109. two-year at 4.328. crypto, let's talk about bitcoin, i don't know if you want to talk about bitcoin, but we're back at $40,000. $40,218. not sure what has been moving that around exactly right now. meantime, markets focused not only on what the fed does with interest rates this year, but also what happens to the fed's $7.6 trillion balance sheet. it is amazing to talk in numbers that start with a t, but steve liesman does that every single day. steve liesman, what are you thinking >> yeah, there is an extra zero there, and it is really hard i got to put it into the spreadsheet to figure out if it is trillions or billions i'm not quite there yet.

i'm getting there. here is the deal, fed officials have been debating outloud, publicly for the first time when to end the reduction of the balance sheet known as quantitative tightening and, guess what, it could happen this year the fed as you remember ramped up the balance sheet by about 4.8 trillion during the pandemic, buying treasuries and mortgages. it started reducing the balance sheet, which is known as qt in mid-2022 and brought it down by 1.3 trillion so, is that enough should it go back to where it was before the pandemic or some amount higher than that? the fed admits it doesn't know for sure >> there is no economic theory that tells you how big a central bank's balance sheet should be i know of no theory that tells you. you have switzerland where, you know, it is basically 100% of gdp or some number like that so there is no real theory >> so, what are the consequences of getting this wrong? the consequences of too big a

balance sheet, they don't look to be huge some asset prices could end up being more highly valued than they otherwise would be and there could be less room for future quantitative easing if they need to go back to it but it could also help taxpayers and that treasury has to replace fewer treasuries rolling off the fed's balance sheet. too small a balance sheet is not that big a deal either it was in 2019 b but now the fed has a standing repo facility where the banks can get reserves in a crunch, if they need them luke randall tells me if the fed shrinks the balance sheet too much, it won't be pretty, but it won't be disruptive like in 2019 because of the standing facility the fed is going to have this very big complicated debate about ending qt. some want to go longer, some will want to end it sooner, some want to hold on to a few and they'll debate different ways to make that decision 6789s it is likely going to move markets if they say they're going to ease back on qt, some

think as soon as march the most important story, andrew, for the economy is going to remain interest rate policy andrew >> don't want to give us a hint of what you think is going to happen at this point and can you layer in, steve, i want you to hit this, if you could, we talked about new hampshire just now and we keep talking about what the fed is going to do and when the fed is going to do it and what the market thinks and everyone has a conspiracy theory that somehow jay powell is thinking about the election and he can lower rates later in the year or earlier in the year? do you think that factors at all? >> maybe a little bit. there was this idea that i think the only thing jay powell wants to do is stay as far away from the election as he possibly can. and that's why, andrew, i have a plan for the fed to avoid the election, which is may, july, november, if they want to -- first of all, i like the idea of that powell has in the past done this every other meeting thing

cut, see how it plays out, wait a meeting, cut again if you do that, you start in may, which is a little bit later than the market wants, which is a good message to this very hyperactive market and then you wait a meeting and then go in july, which is before the silly season, aka, the election season, and then you can cut right after the election, if you look at how the meeting comes, it comes the day after the election, two days after the election, you cut in november, you're apart from the election and you have an option to do december you dial in three essentially and you have an option on a fourth this year for 100 basis points and that's, of course, if the inflation data cooperates. but i think if powell -- if the election matters at all, it is that the fed wants to do what it is going to do apart and away from being seen as having any impact. >> steve liesman, thank you, sir. >> sure. our next guest says that he

sees more room for the markets to rally from here joining us right now is steven parker, the head of special strategies at jpmorgan private bank and, i think you're getting at the issue that people are wondering everywhere right now, if you haven't been invested, the market is at new highs after this kind of crazy start to 2024 people are wondering if they missed out you're saying it is not too late. >> i don't think it is too late. markets were climbing the wall, nobody wanted to believe and one of the strongest rallies we have seen in a long time. and you get headlines about new all time highs and that gives people a reason to think maybe it is time to sell the reality is if you look back historically, buying at all time highs has been a very good strategy a year later you're typically up 70% of the time. close to 10% returns so, i think the focus should be less around the headlines and all time highs and more around the fundamentals and we think that the earnings story is compelling, we think that the policy story is going to offer tailwinds and we think the corporate sector is in good

shape. >> what is the count case for this i think a lot of people want to believe this, a ton of money on the sidelines and there is probably a pretty good argument for it, but if you had to make the counterokacase, what would u say in. >> i think the countercase is, one, markets seem to be coalescing around this view that inflation is softening, which allows the fed to ease and ease because of that inflation story, not because the growth story is really bad if we were to have some sort of shock and see a downside surprise to economic growth that forced the fed's hand because of a slowdown rather than inflation cooling, that's potentially a big risk to the market, but that's not our base case, not showing up in the data we're seeing. >> let's say the fed decides not to cut rates but they do what steve was just discussing and they stopped quantitative tightening is that in itself enough liquidity or extra boost to the market to keep things going? >> i think that probably causes a sell-off in the short-term i think markets are coalescing around this idea that the fed is

going to be cutting rates this year and while the end of qt would be an easing method for financial markets, i don't think it would be enough the good news is the expectation around what the fed is going do have come down a little bit. >> if it is not enough, if the economy is chugging along, things are good and the stock -- the fed takes its foot off of the great -- the break that is quantitative tightening. >> the reason why markets would take that negatively is because they would view that as a sign that the fed is a lot more worried about inflation being sticky or turning up again if they weren't willing to cut rates, particularly given what markets have priced in at this point, i think that would be the big fear that would be expressed and cause a pullback. >> that may not be your base case, but that doesn't seem like a crazy scenario. >> i think what you would hear from the fed, the fed learned their lesson over the last decade or so they're going to communicate, overcommunicate, they're not looking to surprise the market so, going to where we are today, which is markets pricing in 100

to 125 basis points worth of cuts this year, to not cutting at all, i would view that as a big shock. >> is the market listening it seemed when the market made the assumptions, the fed sent everybody out to talk back those expectations. >> but, if you look at what is being priced in, there is a little bit of a balancing act. i think maybe the 125 basis points in cuts, you know, markets may be a little more sanguine in terms of how much. we'll see. i think the direction of cuts is being priced in and that would be a shock particularly in terms of the communication side of things i think would rile markets a little bit. >> where do you like best? >> there is a couple of areas we like we think this price, the strength last year, there is a l lot of opportunities in tech, the magnificent seven. but those companies look expensive relative to their history but not so much to the relative growth rates they're delivering tech also has little to no debt. there is not an issue around what has happened with higher rates. tech went through an earnings recession last year.

so we think the growth outlook for the tech sector looks really good early reports are positive on that end we also think that the rally widens out, small and midcap names, particularly more quality parts of the small and midcap area, which actually started to outperform in the back half of the last year. we think there is a catch-up trade there. >> steven, thank you coming up, trends in health wearable category eating up. this is an andrew story. samsung jumping into the ring business 85 yesterday, right? speaking to the ceo of aura. >> down to 77 today. >> no! i can tell i can tell couldn't you >> making me sick. i know you think i have a cough. >> we'll talk about the new competition. when you come back from domino's, you have something and then larry hogan joins us with reaction to former

president trump -- we'll talk about trump's win in new hampshire. hogan. >> too low you're sick too. next hour, senator jerry moran plans on meeting with boeing's dave calhoun today to discuss the company's response to the latest inflight incident. is that what it was? on an alaska air flight, and the grounding of the 737 max 9 he'll join us in the next hour "squawk box" begins right now.

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the shape of future health like only samsung can meet the galaxy ring >> we talked about this briefly in davos, the day it was announced. this now putting samsung in direct competition with smart ring maker aura and raising the stakes in the tech wearables market joining us is tom hail the reason i mentioned it in davos is as you walk around davos, among the sort of mobile cr mogul crowds and the wanna-be moguls, so many people have their aura ring and they come up to each other and say, what is your score today, how did you do there is a lot of people in davos, like, i don't want to look at my score now because they're all screwed up this is something, you know, whether it is marc benioff or you name the person, they all wear the ring. thus far, you have not had what i would describe as meaningful competition. this seems to change that

dynamic. >> yeah. look, we're an innovator in the space. we have been working on this for ten years. and it is a hard problem it is not easy announcing that you have a smart ring is pretty easy, though it doesn't take much to imagine that you could do it it turns out it is very difficult. our innovation, our investment, hundreds of millions of dollars, countless hours of effort, it is a product that people love we welcome the competition it is validation for the category. >> here is the thing, by the way, joe would want me to disclose my score this morning is a 77. i did get an 85 on my sleep last night. so my readiness is worse >> is it digestion >> higher heart rate i ate some sushi which was salty, my hrv was low. we don't need to discuss this on the air. >> you're sick >> they all seem to think i have a cough. i'm okay, tom. >> both of you are. >> she thinks we're both sick, tom. the question is this, one of the

things we have been following over the last several months now has been this battle over a patent dispute on apple's watch around a blood oxygen levels you have, i think, 120 patents on this little ring, i'm holding the one i wear up on the screen. can somebody else even make a ring and should they be able to make a ring? i think it is a public policy question about this, without infringing on your patents i imagine you're going to be combing and breaking apart the samsung ring to go sue them. >> look, we have been investing in ip for ten years. that 150 patents, those are the ones you can see there are ones that have been filed that haven't even landed yet. i think it is very important for us to protect the innovations that we brought to the market. and to make sure that we do that the apple and massimo story is a david and goliath story for the ages who would have thought that

massimo, this company that i think very few people have actually heard of, but is incredibly innovative and has invented the category of pulse ox symmetry has been able to get apple to take a product off the shelf. having an ip strategy is critical we're focused on delivering for our customers and creating value for people like you so you can understand your health journey and figure out whether or not you're getting sick after davos. >> we're going to make a ring like only samsung can make it. explain to me. what if i want a ring like only aura can make it what are we talking about? what kind of ring would that be, with a wide screen tv ring, what kind of ring would samsung make that only samsung can make it? what was that? >> i think, you know, it wouldn't be the first time that marketing has been exaggerating what's possible. i think the reality is that we'll see what gets delivered in the market, we'll see whether or

not it infringes on us and we'll take the action that is appropriate. honestly, we welcome the validation, we welcome the idea that smart rings are something that people should have. >> can you explain this to us, it is an interesting public policy question. given what you know about the massimo back and forth with apple, is it possible that anybody could ever create a way to monitor blood oxygen that wouldn't infringe on their patent, meaning are there certain things, this could be true of your ring too, that's why there is an interesting public policy question, whether there could be a competition if certain patents are so expansive or i don't know expansive, but expansive enough, can somebody invent something that does the same thing in a different way? >> look, anything is possible. but there are certainly things like the laws of physics or the approach you might take to pack a small number of sensors into a small space or the algorithms

you use to create biosignals and turn them into meaningful data i think those are things that we'll see when the product is in the market and the evidence is in quite frankly, you know, we're just excited that the whole category is getting a huge vote of -- >> there is no blood oxygen sensor on the ring, right? >> actually, blood oxygen is one of the things we sense and we do it in a -- >> how in a pulse ox >> it is the same mechanism, but it is actually a different approach for example, the number of sensors and the way you sense it is -- >> that's where i feel like there is a -- that's where i feel like there is an in potentially, though. people could say you just changed the way pulse ox already did it so why couldn't people change the way you do it? they -- you did it this way, laying out the ones and they're going do it this way laying out the ones. >> i turned my blood oxygen off, tom, because people say once you know your blood oxygen is okay, if you don't have blood oxygen issues that it drains the battery.

true >> it is classic blood oxygen, once you know you don't have something like sleep apnea or you're not sick, that you don't need to see that it is not a metric that changes -- >> i'll turn my off. i think it takes battery. >> you can measure sleep apnea with and oura ring >> yes, you can. >> the test for it is such a pain in the ass, on your back, on your side, i'm avoiding it. >> it is something that affects a large population. >> i'll buy you and oura ring as a present. >> will you hook it up >> i'm not sponsoring. >> what if i want a ring that only samsung can make it >> maybe we'll have to wait. >> will you hook it up to my iphone how do you do that bluetooth or something. >> bluetooth, can you help joe >> we'll make sure you get connected. the reality is that we're not trying to get you into a closed ecosystem. we're across ecosystems, we work across ios and android we're there for you.

>> i said i would buy him one. i think it is 299 bucks. tom, is that right >> you got it. >> that will never happen. >> why >> you can say it has been for the last five christmases. >> he sent you -- >> i sent you ice cream. >> i send him my good wishes. >> ice cream is not good for your oura score. tom, good to see you appreciate it. >> thank you, andrew great to be here cheers >> next year, i'm sending you cigarettes coming up, dom chu with the list of stocks to watch. let's check out the futures now. you'll see that we're in the green across the board dow futures up by 100 points nasdaq up by 132 the s&p up by 21 "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. what year did netflix launch its streaming service? the answer when "squawk box" returns. oh, charades! - okay! - love it! umm... first word. - tonsillitis! - nostril! uh-uh... bill! uh-huh... - hip-hop! - limping!

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>> and welcome back to "squawk box. i'm dominic chu. here is a list of stocks you need to watch ahead of the opening bell this morning. we'll start with late breaking earnings news out of telecom giant at&t shares are down roughly almost 4% right now nearly 700,000 shares of premarket trading volume the report was mixed profits per share came in better -- below analyst forecasts while revenues were a beat much like competitor at&t with verizon yesterday, at&t did report better than expected growth in wireless subscribers that pay a bill versus prepaying for service. it is at&t's full year profit forecast that did fall shy of expectations full cash flow forecast came in better so overall at&t shares down roughly 4% also late breaking, earnings on dupont the specialty materials company behind everything from housing construction wrap to kevlar used in body armor is down right now 11.5%. 50,000 shares of volume.

it reported preliminary quarterly results. prereported results, that largely came in below analysts were expecting both on earnings and in revenues. it also battled continued weakness in china during the quarter. dupont is also saying it is seeing similar trends developing in the current quarter also expects quarter over quarter declines in sales and profits as well. that's the reason why those dupont shares are down 11.5% the big earpearnings headliner last night is netflix. up 10% at this stage now, over 250,000 shares of volume it reported mixed results. profits came in below estimates. revenues were better but a lot of the positive stock price movement is being attributed to a big beat in subscriber growth. netflix added 13.1 million net subs last quarter versus expectations around 8.9 million. the revenue forecast fell shy. we'll cap things off with amazon up nearly a percent or so.

roughly 125,000 shares of volume analysts at morgan stanley attacked amazon as a top pick heading into its earnings report, slated to happen on february 1st they cited things like positive catalysts like the rollout of advertising on prime video and more bullish expectations around key profitability measures more than what the street is pricing in becky, a whole slate of these movers out there i'll send things back over to you. >> we're getting ready for after the bell stuff tesla, that's a biggie to watch too. >> that's one of the things i'm continuing to track what is going on with the options market now. things could get a little volatile around tesla. it has been one of those stocks, i don't know it could be fireworks by the time this thing comes up this afternoon. >> could be. you're tracking it we'll check in with you later. thank you, dom whether n we come back, forr president trump winning in new hampshire, nikki haley vowing to keep fighting. larry hogan will join us next with his reaction.

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we have won almost every single poll. >> we still have a ways to go. but we keep moving up. former president trump winning in new hampshire primary over former south carolina governor nikki haley, getting nearly 55% of the vote governor haley vows to fight on as the battle heads to her home state next month joining us now, former republican governor of maryland larry hogan. sometimes i defer to my son on this he tells me south carolina has a solid plus ten r and she may have been the governor there,

but it is just hard core trump country and not going to happen for her there, i don't think. >> i think she's definitely behind in south carolina trump is very strong there but she's got basically a little more than 30 days to make up those points and i think she got a little bit of a boost last night. i realize she didn't win but there were trump people talking about, you know, i heard eric trump saying it was going to be like iowa, blow her out 20, 30 points. >> looked like seven or eight and turned into 12 >> so, it wasn't a great night, but she -- the whole for a year and a half people have been saying we want to get into second place in case trump stumbles she cleared out ten other guys she said, you know, cleared out the fellas she's the last person standing i get it she's down she gave a good speech last night. i like the fire in the belly and still taking it to him what do you got to lose? we had a lot of people come out and vote, huge turnout among republicans and democrats. >> that's the bigger issue that's unique to new hampshire you don't have that in south

carolina and many of the other states where you don't have the moderates or independents who wind up voting you got to be registered as a republican and donald trump definitely carries more weight there. >> he's very strong right now. look, she was a very popular governor and got elected there twice. i get t pit people are all in for trump. any number of things can happen. >> she appointed tim scott and he's standing next to trump. >> the governor, henry mcmaster and, you know, they're all standing next to trump. >> any number of things could happen >> conviction. >> the idea of the conviction, is that what people who are still supporting her are kind of hanging their hat on >> there is so much turmoil out there. and 90 some counts and all these different cases and she continus to say crazy things. i saw one poll that said he would drop 18 points if he was convicted among republican voters so that gets --

>> you got, you know, georgia, i don't know she's got more problems down there than almost trump -- we'll see. and alvin bragg, that almost emboldens people to back -- washington could be significant. and there is -- i don'tsingle rn that even lives in d.c. >> one or two, i think sounds like you're giving up i'm the eternal optimist i like the fight i like to see the competition. i wouldn't bet all the money on it but -- >> i don't need to -- like you ask at the very beginning of this most of the time, will you support the nominee? and they ask all the republicans, so, you know, if it is a binary choice, that's an easy choice for a lot of republicans. not for you. >> it is very likely not to be -- >> you would never vote for trump no matter what >> no, i can't support for trump. i wouldn't vote for biden either, but i think there is a high likelihood there will be

another choice. >> like who? >> no labels, about a 95% chance of getting access to the ballot in all 50 states and i don't know who that ticket might be, but -- >> would it be you >> talking about a unity ticket. >> or manchin. >> between the republican and the democrat running together, put the country first. i don't know who that's going to be but i think latest poll -- >> has to be enormous amount -- donors have to come out of the wood work like crazy the amount of money -- >> that's why we're here >> okay. >> but there are a lot of donors that don't want that binary choice and 40 some percent nationally, looks like new hampshire, 40% independent, far more than republican and democrats and democrats, half don't want biden, half the runs don't want trump. there is a lot of frustration out there. we don't know what is going to happen between now and november. >> you need not only donors, you need to get on the ballots >> it is a struggle. democrats are suing and trying to stop -- basic tenet of democracy that citizens can petition to get on the ballot so

they can have choice they're going to get, i think, access to the ballot, which hasn't been done before by a -- >> is they you >> it is not me. i haven't made any commitment at all. but i've been involved in that group. >> you stepped down from the leadership position. >> i was an honorary chairman of the group. i believe in what they're doing, trying to bring about, you know, common sense and common ground and finding bipartisan -- solving problems instead of just making noise it is the angriest and loudest voices get too much attention. i'm not sure where that goes but i think it is probably healthy rather than unhealthy for them to have the ability to do it. >> we thought initially a year ago that the democrats were geniuses, because they were going to make sure trump was the nominee. and he's the person that biden thinks is the -- suddenly, i think in recent months, that narrative has started worrying democrats because they're starting to think, you know, he might win.

we were in davos where most business leaders thought trump was going to be the next president. >> the change in the narrative and the biden people were overconfident, pushing for trump. you hear -- >> he's been -- >> it is all over, trump is the guy, but biden continues to weaken biden is the least popular president in american history, down in the 30s. kamala harris is in the 20s and they're starting to message against her. it is the two least popular presidents in modern history but biden has dropped. that hurt nikki haley. her main issue she's beaten biden by 17, trump can't win, and now everybody is, like, looks like trump can win >> michelle obama, gavin newsom, he steps down after -- right before the convention or something. >> rumors. >> it is not a crazy -- >> it is possible. they have the ability to do that no one would get in now because of the filing deadlines, but the convention in july or august, republicans in july, democrats in august, he could say, look, for the good of the country, i'm

turning it over to the next generation of leaders. he said he would be a transitional president nobody thought he would stay there for eight years at his age. >> they both would be lame ducks, the choices that we have. >> they are both lame ducks. they koecan only do four years whatever happens, it won't happen for that long. >> you've seen what happened in the last two >> is there a vice president that donald trump could pick where you would say, i'll support that ticket? >> you know, i think -- i think the smart move for donald trump -- >> you >> no, i'm not interested. i don't think he's going to call >> he might not. >> i think the smart move, which i didn't think he would do, but if i were trump, he should have picked nikki haley who has tremendous support and brings in the kind of -- >> is that possible? >> no. he's going to -- trump demands ultimate loyalty he'll find somebody like elise stefanik or sarah huckabee sanders or kristi noem

>> i thought he liked henry mcmaster. >> he does like henry mcmaster he's a pretty good guy too i'm not sure he's really -- they are friends. he was the first state wide elected official to endorse him. >> i just watched an interview with trump where he made this sort of comment about henry mcmaster in a way that made you think -- >> he's been running around with doug burgum, a buddy of mine, ran and he's the north dakota governor he'll end up in the cabinet, but -- he's been working on it. >> so, trump/haley you vote for trump >> trump/haley i don't think donald trump should be anywhere near the white house. i'm a life long republican i was a -- this is not my republican party. >> you don't think democracy is over don't you think we have a pretty strong system of checks and balances >> i understand the frustrations and concerns i think there could be some real -- it is going to be a wild ride between now and november. but, no, i don't think it is the end of democracy, but i think we're going to have a bumpy

road. >> if he were to get back in, dictator -- you read about, you know -- >> i would hope -- >> see what's on some other networks. >> sometimes with -- a lot of bluster and he says outrageous things on purpose. but he really didn't get anything done the first time so, cooler minds there is still reasonable people that are left in washington that are going to provide guardrails for any crazy stuff from happening. >> we were in davos, and much -- i was in shock just watching it, still am, watching jamie dimon, he was making a case to democrats to not just write off every person who is a trump voter in this country. don't just -- don't make a basket of deplorables or guns and bibles and all the stuff that the left elitists say about trump voters i said something today, i said wwe and trump voters, the same people >> they're the same people yeah i agree with that. there are certain people that are just -- how do people think

the election was stolen, january 6th never happened, that is a smaller group. there are a lot of people who say, look, i don't like all the things trump says and does, but the economy is good. he was pretty good, and so his -- he's got 50% of republican vote, half of them are, you know, running through a wall diehard the other one is biden >> exactly do people do hogan's heroes? >> i wish they would play that theme? >> see see? it was 40 years ago, but i still -- >> these guys are like what's "hogan's heroes? >> colonel cling we were trying to find it. >> love all those people bob crane had -- larry, governor, yuou call, we want you here. >> it is fun to come see you guys >> i saw a competitor last

night. >> i did three last night. i'm doing another one after you. but you're my favorite. >> which one do you think i saw? >> he says that to all the girls. >> you probably saw the fox one. >> what else >> where else were you >> i was at news nation and nbc. i'm doing cnn after you guys >> we could call this a promiscuous guest. >> that seems a little bit pejorative >> just saying you're on all the networks. >> i got you i'm not in new york that much. we say hey we're going to be there in new york if you're interested and everybody said i'm interested. >> there you go, see >> i'll go home and you won't see me for a while. >> you're coming along he stepped out of the green again. you did. >> yeah. >> proud of you. >> governor, thank you >> thank you >> when we come back, the earnings parade continues as we await results from tesla those are due out after the bell toy. got a preview straight ahead. "squawk box" will be right back. rude. who are you? i'm an investor in a fund that helps advance innovative

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coming up next, it has been a bumpy ride for tesla stocks so far this year. price cuts in china having an impact we're going to preview what the company will say after reporting re results this evening jamie morgan has them on the

list of companies they like. "squawk box" coming right back

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a tesla expected to roll out quarterly results today. we have a preview of what to expect. >> these are big numbers. it is really the guidance what people will be focused on. in addition to some of the key metrics we will get from the fourth quarter. here are numbers we will be watching for in terms of expectations. earnings-per-share the estimate is $.73 per share. and gross on the market excluding zero emission vehicle credits. it has been coming down at a regular clip, 50.7% is the expectation. average transaction price just over 43,000. three things within either a conference call with the company says in terms of guidance, deliveries for 2024. they delivered just over 1.8

million vehicles in all of 2023. most believe it will be about 2.1 million the estimate. about 16 or 17% increase relative to 2023. then the cyber truck, deliveries started last month. we have not heard much in terms of how much you actually delivered in december, what are you noticing in terms of demand, what kind of commentary does elon musk deliver aside from the usual it is the greatest vehicle in the world. it is the key metrics people want to hear. and finally, china pricing, price cuts within -- -- the conference call is at five the eastern when we hear from elon

musk. some of the conference calls, sometimes you get elon musk where he will say something that will make news the following day or days. that is what to expect after the ball with tesla. for more on what to expect, i want to talk to the senior analyst at -- give me the big expectation for you and maybe if there is a surprise on your mind, what you are worried about. >> thank you for having me. we agree with the preview, we think the focus will be on gross margins and any guidance related to 2024. on the guidance we think they might not actually provide volume guidance for the full year. we will see, we know tesla is coming off of, q4 was a record

quarter in terms of vehicle production and sales. the company has a solid earnings track record. they've only missed one -- in the past 11 quarters. we are bullish on tesla heading into the released. the stocks had a nice -- after the more than doubled this year which we look at as healthy price action given the massive up it had in 2023. >> do you think we will hear anything about the idea of whether he wants to stay as the ceo of the company and how important will that be, obviously -- if they're going to be building out a i. if he does not get that control he may try to build that outside of the company. >> we would be surprised if he addressed that on the conference call. we look at those recent comments as mostly posturing. but he is in a bit of a

standoff against the board. they are waiting a ruling in a delaware court case regarding his prior compensation package. we look at that as posturing before the ruling from the court which could come soon. >> what is your take, we sort of ready let me of headlines recently including the hertz news. part of you i hear is saying this is an opportunity for a price fall but, do you think there is a larger macro headwind challenge to tesla or is it -- how do you think about that? >> there is no question the u.s. ev market is in the state of oversaturation that the good news if you look at the price premium, the premium at with -- which they sell to an average

of all vehicles. in december, the premium was only 4% down from over 30% a year ago. tran03s are coming down in price much closer to parity with gas power vehicles. the oversaturation, the issue is more with non-tesla electric vehicles. in december, inventory was at 114 day supply for electric vehicles overall. that is extremely high. the historic average in terms of day supply in the u.s. is about 60 days. we look at that more is a problem for non-tesla electric vehicles. we know demand is strong for the cyber truck and they fixed a problem which is how quickly can they produce the vehicles and get them in the hands of reservation holders. >> i times, people do not jones for an ev they jones for a tesla.

they do not say i want an ev, they say i want a tesla. has that ever changed? what would that take? what good gm make, maybe those things you cannot park near your house, a fault or something? what is the most popular big three ed? has anyone purchased one? >> tesla is still the dominant player. >> what is the most popular big three ev? >> it would be the chevy volt. the chevy volt. >> i am not thinking i want one. >> we have to run, we will talk to you soon as we see these numbers later today from tesla. thank you.

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good morning, earnings in focus. we have results from at&t and we are watching shares of netflix spike. meantime, former president

donald trump taking a victory in the new hampshire gop primary but former sacramento the governor nikki haley putting up big numbers on her own. are turning our attention to next month's vote in her home state. earning perks by paying your rent. that is the business of belt rewards. we will speak to the company ceo and delay appointed board chairman in a special interview in just a little bit. the final hour of squawk box begins now good morning welcome back to cnbc here on cnbc live from the nasdaq market site in times square. we are back, and -- above 38,000 for one day. we are up 100 five points, the

s&p higher and nasdaq big gains netflix nasdaq outperforming some of the other indices. the treasury this morning, a 10 year 4.11. >> among today's top business stories, at&t shares falling in the premarket. fourth-quarter earnings missing expectations although sales did beat estimates. the company protecting 2024 adjusted earnings per share below what the street was expecting. you can see the stock now off by about 2.8%. in the meantime, netflix adding more than 13 million subscribers in the fourth quarter, well above the 8 to 9 million that were expected. netflix projecting first quarter earnings also about what the street was forecasting. we will hear more from netflix later this hour. and ebay says it plans to eliminate 1000 jobs for about 9% of its workforce.

the ceo told employees the company headcount and expenses have outpaced the growth. is comes alongside other recent tech job news including the announcement yesterday that -- is looking to do voluntary buyouts or enable job changes for 8000 employees as part of a restructuring burger. >> we want to get over and talk about the broader markets. what are we catching up on this morning? >> the persistence of the rally, this breakout we have gotten, three state days for the s&p 500 looking to add to a new high. we just went sideways for 4 to five weeks as we digested the fourth quarter game. now that we have broken out hire it looks like one of these platforms you might consider you are in for a while and then you have to break up. looking back to the spring, a two month 10% gain offered that

will. that would mean you had a little more to go here. nothing that says you have to be in parallel but one thing we are watching, the trend off of the september october low kind of takes you, if you just want to extend it higher, looking at the connecting where the rally has reached and stole that. a little over 5000 that would be roughly 10% up from the breakout point of 4600. what i think would happen if we managed to get to live thousand, that is a big, round number. 20 times a forward aggressive earnings estimate for s&p 500. i think it may be a stop and reassess type of moment. that is something to keep in mind, if you get to by thousand, you are 20 times the best estimates for this year is profits for the s&p 500. homebuilders and -- amazing how much they have moved in common over the last year or so. a downside gut check in

homebuilders yesterday. dr horton, good numbers but hesitation about orders. you do have a sense out there that maybe homebuilders are priced out a lot with this move off of the decline in yields. maybe if the housing market frees up, the scarcity value the builders have been enjoying maybe goes away. -- still working although it is very narrow. -- finally, a lot of focus on the shipping costs going up again. it seems like it creates echoes from the pandemic. but the broad commodity exchange traded basically the broad commodity index. two years full round-trip, really nothing coming out of commodity related inflation. that is something i guess we can take comfort in. >> thank you. looking outside for a closer look at -- their he is, private advisor at

rockefeller global family office. how many pets this year? >> that is tough to say but does it matter? i do not think it matters, i think inflation is under control. i think a lot of people have subsided the discussion about inflation. what i think was the problem is they raised rates too fast and too far. >> they did. >> i think it was a knee-jerk reaction and hindsight is 2020. i think inflation is under control right now. rates will start to come down. when, that is to be determined. i think that whether they can 25 were 50, i think of something dramatic happens people will start to look at it. >> i guess someone could say we had horrible inflation, the fed brought it down by doing this. the market still at new highs and maybe we will get a soft landing and it looks like they did everything vertically.

and yet, do you think by going too far there is reckoning in front of us that has not happened? something bad is coming? >> i think it is the opposite. earnings are coming in strong right now. technology is not going away, it is only getting stronger. is only dominating the world more and more. we are seeing as rates come down obviously where is the place to turn, it will be the equity markets. >> you said that they went way too far way too fast. why? it looks like they successfully did what they had to do. what is not to like is my question. >> just right but this, anytime the markets get something happening too fast it becomes a panic. >> so the markets would be even higher if they had not done that? >> the volatility that came with that is normal. i think that it does not matter in the short-term, we are looking in the long term. i think, with that, we will see

the markets go higher. >> you all think i am sick -- >> it is fine. can i asked him, we are in an election year. you heard about the? and, historically election years if you just -- marginally good, just marginally good and oftentimes if you look at it, the first half of the year is very choppy and oddly it gets better. the question is do you think that this election year is somehow different than others? >> that is a great question. a lot of people are asking this. we have had how many election years? we have had times when it becomes volatile but i do not think this year is any different than any other year. the first tuesday of november we will see someone the presidency there will be a lot of talk leading up to it. from a market perspective --

>> do you think there is a distinction on how markets would perceive one versus the other. when trump won everyone was talking about the trump bump and how taxes would come down and also that things would happen and everybody thought biden would come in and make it impossible. by the way the markets actually performed. a very weird situation. >> with all due respect to our president, a very difficult job, i think when it comes to markets, asset allocation, everything we do during the day it is only a very small percentage of what matters in the markets and what you do with client assets. >> we do have a pretty good system here for the private sector to flourish in. around the edges it could make a difference i think but, it is so difficult to see so much focus go into these elections when, from a financial perspective, it really all works itself out. >> to think ai is more

important than the lection? >> i do not know if it is more important, but there will be a lot of changes. if you think how far we've come from the mid-90s to now from technology, 25, 30 years, can you imagine what it will be like in another 30 years? that is why you are seeing technology earnings continue to grow. and the broad markets, frankly, have not moved that much. >> i do not think we can really understand fully how the iphone changed the world. things that were made just a couple of years ago, they did not even have flip phones, they had to use a pager to get in touch with someone. we have a spare univac that used to be on four four in our pockets. >> dollars 18 and 16 and they have no concept of what this world was. >> i cannot imagine a i could be more powerful than what we have already seen in my lifetime. >> it is trending that way, it is going in that direction. >> we need to find out how to understand it and who the real

any fisheries are and i guess -- >> something people have stopped talking about but it still will change the world dramatically too is the block jane technology. i think, there is so many different avenues of technology that are changing the world right now that in 30 to 50 years -- >> can you give me visual names? >> i cannot, i am sorry. >> one of the top three sectors? >> top three favorite movies if you were a tree, what kind of tree would you be? >> i would be a pine tree. >> we decided you would be a sequoia. >> i grew up in the mountains so a pine tree would be good. >> which mountains? >> utah, celtic city. >> what is your favorite ski mountain? >> -- >> best skiing mountain in the

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welcome back to cnbc. the future is right now, we are 164 points higher on the dow jones, moving but s&p 500 hire as well about 27 points. nasdaq up about 160. -- now

says it will pause work at it's prediction plant tomorrow so employees can intent workshops on quality. separately, the boeing ceo will meet with senators today in washington, one of the lawmakers joining us right now. senator jerry more and of kansas, the lead republican on the commerce aviation committee. this is an issue important in so many levels from the safety of flights and consumers thinking about those things. boeing is so important to our national economy, what do you want to hear today from david calhoun? >> i am anxious for that conversation, i would say the

goal is to have him reassure me and others that they understand the challenges they face that i want to know what they learned from their meetings with their employees both in washington state and kansas. i want to make sure they listen to those employees. often that is a place that -- i want him to know how seriously i take, we take this issue. my grandkids are on airplanes, my wife and i are on airplanes, our kids are on airplanes. we want safety and i would reiterate while this is an important economic issue, none of this works in the aviation sector if the american public, the people who fly do not have an appreciation, an understanding that air travel is safe. while i do care about the economy and employees and workers at home in kansas, their jobs are important to me,

those jobs are only long-term if boeing and their supply chain get their act together and also americans know it is safe to fly because it is safe to fly. >> it was not just the door plug. we saw video of a boeing airplane i guess in the miami area with what look like flames coming out of the engines. yesterday we heard about a tire popping off a boeing plane in the united states at another airport. is this enough for you to question the safety aspect of that? >> i assume there certainly heightened attention to these kind of stories but i would highlight there are two investigations and i would point out a third investigation going on right now. one is ntsb, there is -- the alaska airline where the door came off and the plane decompressed. there is a second investigation and they are separate, different. that is the faa. the ntsb looking at the

incident, the faa, rightfully so is looking at boeing's manufacturing process in light of safety, its supply chain, what the problems are and they are doing that because this is not just one incident with a boeing airplane. the faa is taking this broad view of what needs to be done at boeing and the supply chain and what we need to do for aviation safety. the third one and this was evidenced to me at a hearing we had with the chair of ntsb as well as the administrator of faa last week. and congress has a role to make sure ntsb and faa are doing their jobs. and is there something legislatively that needs to be done. and we have pending in front of the senate right now, the faa reauthorization bill so there is a perfect opportunity for us to do whatever might be short- term if it to the safety of air travel and in the long-term, i would expect the subcommittee i am the ranking paul milliken on

to take a look at safety in particular and is there a bill addressing that as well? the ntsb, the faa and united states senate. >> is there anything dave calhoun can say to you today to make things better? talk is cheap, let's look at these other things you will be doing. >> that is the answer, what you just said is yes, there is reassurance that can be said with words but the reality is -- and a stamp of approval. outside of what boeing has told us to correct any problems is making a difference. that would be the faa and perhaps congress. an opportunity for us to make sure he knows the importance of this issue. i cannot imagine he does not. and the status to our economy

and certainly to me in kansas where we are the air capitol of the world in wichita and we supply lots of parts to boeing. >> we have seen this movie before. when would you say it is time to say okay, we need a change. okay you are going to this, you are going to do that we take this very seriously but, we seriously have heard that how many times would you say. we have heard it over and over. we have heard reassurances and the question is, is there something about boeing securely, culture, process, oversight that needs to be addressed and again, you always want to be reassured but you never have that until you actually see the results and know the difference and know it as a matter of fact, not a matter of promise or opinion. >> it is always well, the guy there will be able to fix it.

we do not want to bring in a new guy ministry but then something else happens and it is still the guy and then still the guy. >> i mean, we have seen a lot of changes at boeing in management. we have lived this. there was a tremendously damaging issue to the safety of americans, our national economy and the manufacturing process. when we face tremendous challenges around the world, we need a manufacturing base that works and aviation is at the forefront. we have lots of jobs and export lots of product. this is a huge export and it comes home to kansas to roost pretty quick. and i am a cottonwood, the state three, roots are deep and provides lots of shade. >> where did you grow up, senator? what town? >> what town? i was born in great bend, rew up in plainville and lived with my family most of our married and family life in hays,

kansas. and i do not live in washington dc, i am on an airplane every monday and every friday. >> you are talking my linguist, i-70. i have been in hays, kansas many times. beautiful. >> appreciate that. >> bob dole, russell, i know the whole place. >> this bennett, the former boeing unit was responsible for putting the door plugs in on this unit, they are based in kansas and there has been a lot of questions circulating about whether spirit aerosystems has enough oversight. it is not boeing. are you calling about -- thinking about calling them in as well? >> absolutely i have had a television -- telephone conversation with the new ceo of spirit. this is not just a boeing issue. it is the supply chain issue. we learned last week if this originate in a subsidiary of

spirit aerosystems in malaysia. a lot of answers yet to be determined but mostly, i am anxious to see what ntsb says about whether this occurred in manufacturing, application maintenance by the airline, by boeing or by the subcontractor, spirit or their subsidiary, malaysia. that point us in the direction where the problem right be. we do not yet know that. the difficult things, when we want to know answers today and there are a number of investigations going on we keep waiting to hear what the results are. >> senator, thank you. >> you are welcome, this is an important issue and i look forward to my conversation with the ceo of boeing today.

president trump winning the new hampshire gop primary last night. about 91% of the ballots are in and trump is at about 55, nikki haley, 43%. a lot of independent voters in new hampshire obviously. in fact, that is where a lot of

governor nikki haley's votes came from. not necessarily republicans. this may be one of the best nights she has, she does not really have this type of chance or prospect in her own state of south carolina. but, we will see. he was what she said instead of sounding dejected, she said she will fight on just like usc. >> new hampshire is first in the nation, it is not the last in the nation. this race is far from over. there are dozens of states left to go. and, the next one is my sweet state of south carolina.

>> in trump's victory speech, he said nikki haley's numbers added up to in his words, a very bad night. republicans in nikki haley's home state of south carolina are said to vote in their primary in february.

welcome back to squawk box. -- words announcing it has raised $200 million in funding. it is a platform that partners with real estate owners and allows users to earn points when paying their rent. the company now valued at more than $3 billion. here is their founder and ceo and the chairman and managing director -- of american

express. he has just been appointed chairman of the board. good morning. this is super exciting for us because i remember when you came and sat at this table when you first launched the company. >> we were talking about in 2017, were saying how is it that silicon valley keeps pouring money into electric scooters at the time, crypto at the time we have the biggest housing crisis, the biggest healthcare crisis, the biggest student loan crisis, how do we solve real problems. >> what is interesting, back then you were running american express at the time, you are probably trying to sell him on -- back then. >> getting a meeting with him is a difficult meeting to get. it is surreal. as an entrepreneur to go from that type of an idea to getting to be here today talking about having someone like ken as our partner and chairman of the company is a real. >> for those of you who may not remember what we are talking about, explain what you do.

>> rent is the single biggest expense for most people in this country and you do not get anything back. we said why can you not earn points on rent just like you do on everything else? earn airline miles, earn hotel points, and why does paying rent not build your credit and get you closer to home ownership. today you can earn points and miles, build your credit and the coolest part is, we have expanded it beyond just went and said you not only get rewarded on rent but in your neighborhood, all of these local restaurants and grocery stores, coffee shops can tap into the loyalty model. >> explained the business model. who is paying for these rewards? >> the amazing thing is you first look at rent, we are at almost $20 billion per year spent. we are a payment processor for the rental buildings just like stripe is for e-commerce. we make money off payment

processing there. as we go to the expanded merchant side, this is what can invented. if you can bring high-value, local residents to build loyalty in their neighborhood rather than local restaurants running into an apartment building, putting up flyers offering a discount. >> like immature awards. >> it has similarities to membership rewards. an important point i think can be transformational is, if you think about commerce in the neighborhood, there has been no platform that in fact, has put that all together to drive local commerce. small business too. small business benefit tremendously. one of the reasons why i am excited, this is the first neighborhood loyalty platform. >> let's go back to the math, i want to understand the economics of it. you are collecting a fee.

a processing transaction fee every time. which is what percentage? >> it depends on the type of payment methods? >> we are talking -- american express was 3%, mastercard was lower. >> it depends how you pay. >> if you pay with your bank, what is lewis? what is the rate for the lowest if you pay by your bank? >> it depends on the landlord and property owner but just like -- >> go back. hold on. >> when you go to a local merchant, instead of giving like a 10% local discount to bring in local customers on the off days, they can say, like with american express, we want to focus on the neighborhood and if you come in, we can fund 2% or 5% in rewards and introduce our business to all of those people moving into the neighborhood. half of renters move every year. you have all of these people

living out of the neighborhood every year and the small business owners have no way to get in front of them. now, you can be in front of everybody when they moved into the neighborhood. you have a plug and play loyalty from. instead of giving the local discount, you spent a quarter of that and actually attract local people for recurring rewards for coming in and of the points they have earned on rent can be spent at that local business. >> here is the part i'm trying to understand on the math. i have a platinum american express card, i pay something in the order of $700 per year for that card. so american express is getting my $700. thing, they are getting 3% i think on every transaction. >> i am not going to comment.

>> that is the math of how that works and why that makes sense. then to go to an uber and they say give us $200 worth of uber rides because then i will do more. and there is a discount on those they -- giving uber some money for that privilege. same thing with the airlines. now i am renting in a related building. related will pay you? >> your payment processing, either the landlord pays for some of the fees or sometimes the consumer pays or sometimes the bank pays. >> explained that, the bank will pay the fees? >> we have an amazon credit card and use it for in 5% cash back, chase bank pays for that. if you have a -- card and using an apartment building, the banks can fund the action rewards. if you're using an american express card, either the landlord might pay for the fee

or the consumer. >> my original conception of this was something that would help with affordable housing and build their credit score. what you are describing is something different. i think it has evolved. probably a better business proposition than before but maybe less useful -- >> affordable housing all the way through ultra luxury. >> not so housing though. >> no, small housing too. you can use it to pay their rent through this platform in you can either take that payment as a check we mailed to you or, if you have an on my -- >> but it costs more. >> i am going to can on this. you decided this company is worth $3 billion based on some kind of mathematical formula about how much they are earning. i will ask you to explain it because unfortunately, we still do not understand. let's pretend i am related and

you come to me and say, we want to process for you. and i say to you, i am happy for you to process for me, how much are you charging me? >> related pays for the payment processing today, ach fees, check-cashing fees, cart fees. and you pay rent. instead of that being our core business we are trying to generate a huge margin on, you can turn it into words for the customer continues for airline miles -- >> i understand, somebody has to pay for those. >> that is already happening today but everybody else's business is just to keep that. we are already paying for payment processing using -- >> which is at the end of the day, the building. everyone converts to the [ bells ] payment platform. >> and they are paying a service fee for that. >> the same way these to pay for their legacy platform that gave none of that back --

>> if someone wrote me a personal check, there would be no fee on that? >> correct, so then you would get less we worked on that check. you pay electronically, where there is a fee -- >> itself but there are two businesses here. the platform fee, the software fee i'm going to pay you to use, right? >> payment processing fee. >> a fee per transaction. i not paying you some kind of other fee on top of that? >>?. >> what am i paying you as a building? i am a landlord, we have a lot of landlords watching the show. >> it would be the same accurately pay for any other payment processing platform to use. just like every enterprise deal -- >> most of them do not usually allow you to pay with credit cards. >> all the online payment centers do. sometimes they pass the fee on to the customers and sometimes they take it themselves. >> the key is, we have more than 50% of the top 50 real estate companies. >> exclusive to you?

>> yes, the short answer. all the properties that use us -- >> i cannot pay with a check and not get charged? >> it goes to the -- >> do i get charged a fee for writing a personal check? >> you do not, no. >> if i wanted to compete with you and create my own version and called up -- said hey, i am going to provide the same service for cheaper, when i say is it exclusive to them, do you have some kind of deal with them? >> yes and by the way -- this is a great question. the entire ecosystem, these properties generate revenue also. when you think about the ecosystem it is about -- the merchants who are the uildings in this case, the rental apartments, the neighborhood merchants, a broader ecosystem, the restaurants, coffee shops

etc. when a customer who lives in a related building today goes to the neighborhood venues, we do not monetize that. now that person, going to the local store and choosing to spend at that local restaurant, the local discount being paid by the restaurant to attract the local customer goes partly to rewards, partly to -- and partly to related. when you think about the ecosystem, you would have to have a network of properties which by the way, -- customers have their loyalty accounts and elite status and points that they want to transfer. they have -- so they can use that on most of the major airlines and hotels. an entire ecosystem that really like us and groups like american express have built. then you have the erchant ecosystem. that is the beauty, you can give up margin on payments and buildup that ecosystem value is your accessing customers in their homes. >> you also have a separate

credit card itself. >> all payment processors for rent accept debit or credit cards online. >> right but you have your own card too. >> we have a cobranded card as well like delta does with american express. >> you can use any payment product. you can sign up with american express, with chase, with any card issuer and can use built. and there is a cobranded card. >> if i was a landlord, why would i prefer to use this in terms of total margin? >> a great question. you make more revenue per resident, it is very simple. payment fees are the same, residents now earn rewards and build credit for free which by the way, we were the first to bring free credit reporting to renters across the country. it is crazy people charge for that. now the property has the ability to generate new revenue from spend in the neighborhood that otherwise was not part of

that. with this system you just put in the payment solution, they are giving a better experience to their residence and generating ancillary revenue. >> the key point at the end of the day with the calls i made to property owners what they said to me is one that they are being able to do is dislodge competitors that have been in there for 25 or 30 years. the inertia that was there. and then they have said i have this incremental revenue opportunity. what was exciting to me is people said here is a situation where i can win, the consumer can win, everybody who touches this platform can win. that is a type of platform i love. >> from an economic -- higher- margin or lower margin. >> higher-margin overall.

lower margin on rent. >> lower margin on rent. two other things of note, roger goodell joined your board? are very excited, nfl is the biggest hometown loyalty company in the world. it is about cities and the loyalty to sports team, a lot of how we are thinking about building that community is similar to what sports teams have done. >> i would go back to the concept of a neighborhood realty program that neighborhood commerce is totally fragmented. this is a platform that can unite. >> you have to have a lot of salespeople to get all the merchants to -- >> so exciting, you would think so. we have a sales team today of three people. our apartment buildings already have these ad hoc relationships. all of these restaurants and coffee shops and local retailers and dry cleaners are already going to apartment tilting saying can i put up a

flyer in your elevator? can i offer a local discount. there has been the way to institutionalize that. >> one of the key things i see is a big opportunity is to dramatically increase the neighborhood coverage and real estate average. >> we have to go, this is fascinating and exciting's we feel like we have been here since the beginning. there >> can you tell us how you are feeling now and how it's happening? >> here is what i would say. the problems of anti-semitism, is on the phobia have been with us for a while. i think harvard is committed to eradicating anti-semitism and islam a phobia. what is important is the

institution is strong. i am not minimizing what has happened. what i am saying is harvard is focused on research, academic excellence, you go on the harvard campus and you will see students focused on learning. >> we will have to have a longer conversation on that one as well. thank you very much. appreciate it. >>wee intoe ckn > 'rgog bba i just a moment. ow powered by ameritrade, unlocking the power of thinkorswim, 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. i could use a little help.

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♪ coming up, inside netflix earnings and that huge subscriber beat. julia boorstin will break it all down for us.

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netflix shares soaring on new subscriber and revenue numbers. julia boorstin joins us right now. she's got more on that julia, big move for the stock today. >> a big move for the stock, up 10% premarket and a lot of that is because of what the company

talked about on its earnings call, which was its $5 billion deal with tko for wwe's raw. the company say it sees an opportunity not just around live content but also creating more scripted programming and also internationally where they say wwe has been historically underdistributed but co-ceo ted sarandos stressed this does not signal a change to netflix's sports strategy. >> we are thrilled to bring this wwe live programming to our members around the world wwe raw is sports entertainment, which is right in the sweet spot of our sports business, which is the drama of sport think of this as 52 weeks of live programming every year. it feeds our desire to expand our live event programming >> the company also saying it is not interested in acquiring

linear assets, which are effectively the traditional tv companies or media giants that may be up for grabs, and they said they don't believe that further m&a among the traditional entertainment companies will change the competitive environment. now, this all comes as netflix reported faster-than-expected 12% revenue growth on a big subscriber beat. more than 13 million new subscribers added, more than anticipated. that number clearly bolstered by the growth of netflix's ad-supported lower cost option they say 40% of all netflix sign-ups in its ads markets are choosing that option, and its ads membership is up 70% sequentially the company talking about the potential to build out the ad business and also to raise prices after the paid sharing, which is sort of effectively a price increase, has been absorbed they also talked eventually about tapping into the huge

engagement they're seeing around video games on the platform. that could be an area which netflix uses as a growth driver down the line. >> i was thinking it may not be a coincidence that the subscriber numbers were so strong in the quarter when all the college students went back to college and suddenly, couldn't use their parents' passwords anymore, right you got kids in college, you see it all over the place, right >> the fourth quarter is traditionally a very strong quarter. netflix is often given as a holiday present or associated with people sort of getting a new gadget and adding netflix to that i think what we're seeing here and what is so interesting is they have had these two levers to pull. one is the paid sharing cracking down on free loaders that is working, and they're saying it's working so well that we're going to be able to raise prices, and the other piece of this is the ad-supported lower price subscription, and these two things really work together. if you're kicked off your parents' account and you want to start paying for netflix, the

fact that you could pay less, watch some ads, that really is a helpful option but i think one thing that was really clear here about this wwe news is it is 100% about netflix becoming an ad-supported business or building out that revenue stream and using that live programming to get people to tune in and watch those ads in realtime and that's really going to be a huge piece of this company's future >> julia, thank you. it is exciting we'll have to see here all right, let's get a final check on the markets got about less than a minute to go we have been postured for a higher opening all session long. 143 points now -- i'm sorry -- on the dow, 150. 144 on the nasdaq. that will put the dow solidly back above 38,000. in the old days, we would have had a dow 38,000 hat i think we'll have a dow 40,000. >> i don't think i've seen one since 20,000 >> i remember those guys -- what was his name

>> that would look good on you >> the guy that said dow 40,000? remember, we laughed at him. dow 40,000 we are not far from there. the ten-year right now is, i don't know, about 4.11%, and bitcoin is back above $40,000 just barely. that's the ten-year. actually 4.09% make sure that you join us tomorrow it's thursday, i'm told. "squawk on the street" is next >> tomorrow is thursday. >> yes >> not today ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. strong results from netflix, overshadowing light guidance at industrials. netflix does provide a big boost ahead of the open after delivering that subs beat. plus at&t shares under a bit of pressure this morning