>> 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

quarterly earnings results did miss expectations, but the company is seeing subscriber gains. we continue to monitor the ongoing fallout at boeing. the faa saying it may further expand its probe and the ceo of alaska airlines saying he's "angry. let's begin with netflix, up sharply in the premarket company reports 13.1 million new subs in q4 that is the second best quarter of additions in its history. revenue also exceeding forecasts, jim lot of price target raises on the street i counted 18 several with a six handle. >> it was just a really tour de force quarter, and as usual, a conference call that i found to be just very special it is a special company. it's a company -- there's a lot of people who are going to talk about how what really happened is they cut down on password sharing. i'm not buying that at all they knew how to do that they have what i call, david, and i'm going to be really specific about this, they have, as opposed to almost anyone else, exactly what people want we can talk about tko and do

that later, but the fact is they said one line in here that really just was very telling they said, we're not going to buy linear you know what linear is? linear is cop shows. linear is fire department shows. and it's hospital shows. and what they're saying is, we're not interested in that crap we're not interested in that stuff that procter & gamble wants to advertise against and mcdonald's wants to advertise against. we want real advertisers who don't mind that we talk about real life, and that stuff was our parents' stuff that's what this whole quarter was about. >> it was worth noting i'm glad you did, jim, in terms of saying, no interest in linear networks like us not that we necessarily thought -- >> chicago whatever, detroit this, nci that >> would they ever want to buy paramount? obviously, the studio might be of interest, but nobody's buying linear cable anymore no, thank you. no way you know, one person said to me this morning, as so many have before, the streaming wars are

over, and amazon has won they've reinvented themselves if you think about from "house of cards" to where we are now now they're making forays into gaming and live sports even the ad-supported tier, which early on, people said it's not really amounting to much, they've got 23 million subs, up 70% quarter to quarter, and the fact is that there's also a question as to whether they're going to start to take ad dollars from these very linear cable networks you just discussed, warner bros. discovery and the like >> that was the thing. what they're really saying is that right now, linear is dictated by different companies, advertisers, that want certain kind of programming that don't want to be boycotted or cause a problem. you do what they did in the '80s and '90s we got to have someone shot, someone go to the hospital, someone arrested, someone prosecuted, and we're home free, except for when we're in ncis world. they're saying, that's over.

those shows cost a fortune, and nobody's interested this them. we'll residurrect "suits," but people don't want cop shows or hospital shows they want serious drama, no matter where it's from, even if it's translated. the young people don't even mind subtitles. >> they did license, for example, "sex and the city," and one of the bull cases is the more you license, the less you have to take big swings that are expensive. >> they find one or two things that people like, and they run them, but for the most part, and maybe they run them and people like them in korea or something, but when you look at where they're signing people up, they're signing people up all over the world because if you like subtitles, then you're suddenly willing to watch a br brazilian drama. there's this thing that's been going on for years i had a screen play that was

going to be written about me, and they had me as a cocaine addict that got arrested, and i said, i haven't done any of those things one of the guys, big-time producer, said, are you kidding? you think procter wants that suddenly i realized that my story was about procter. i'm not about procter, i'm not about tide so when we see the advertisers, they're going to want to be about serious drama that uses k curse words and people really die. what's happening is netflix wants what people want >> they apparently know what people want, and this was during a quarter when there was not that much new content, in part because of the strike. to carl's point, they're only spending $17 billion on content spend, but that is less than many had anticipated when you looked out a couple years ago to what they spent in 2024. >> who thought that we'd want to watch stuff from denmark and poland and iceland

iceland. how much does it cost to make a series in iceland? >> my point is spending at that number does allow them to continue to lean into increasing the margin 200 basis points in margin expansion is what we're talking about. they bought back $2.5 billion worth of stock during the quarter, which is more than had been anticipated, so yes, we're piling on here in terms of positives right now on netflix and as you might expect, other than that downgrade from deutsche bank this morning, the street is quite positive >> the other thing, here's the bernstein desk some feedback -- some consternation around just how long the tailwind from password will go on they did say net ads will be down sequencetially. that's seasonal. but is that a hint that maybe this has a shelf life? >> obviously, what are you going to do if you're them you crack down and the story, why i disagree with this whole point is, the story the not this

is one time only the story is, holy cow, do you mean to tell me my kids were stealing, they don't have two cents, but they're willing to buy a password a guy from p&g said, your rates are going to go up i'd rather cut off my electric bill than my netflix bill, except it would cut off my netflix. no one even seems to care that you can't steal anymore. oh, i can't steal? all right, i'll pay. people were stealing from home depot. they don't suddenly come in and say, i'm going to pay for that leaf blower. this stuff, people want so badly, they're afraid not to have it. >> it is the default for tv. it's replaced cable tv as the default. and it's global. >> did you see the top shows i mean, they're just -- like i happen to like this world war ii thing. people like it people like -- whatever they put

out, there's five million people that want to watch it. they do all these things that i think, again, i want to go back to the kill people in the chicago fire while they're being sent to ncis in australia. they're saying, you know, whatever -- who's spending all the money on that -- >> i'm green lighting that right now. if that isn't taken it >> procter loves it, mcdonald's loves it and the people love it. oh, the people don't love it they want josh allen versus mahomes. it costs them more than they need >> what about the halo today warner is up roku is up paramount. our parent all up 2% this morning it's not zero sum, is it >> i think it might be when it comes to advertising the pie is not necessarily growing on ad spend, and so even though this is still a small percentage of where they're all subs, the fact that it is growing 70% quarter to quarter,

i wonder whether that's going to start to hurt some of these other companies. >> they never do that. the conference call is just a well orchestrated arc where they say, there's still a lot of people >> biggest competition is sleep? >> more the merrier. the competition is time. the competition is the clock people who are trying to understand and want to get into stock should read the conference call it's accessible. i like to think the procter call is sqaccessible, but this is a really super accessible call for someone who's thinking about buying their first stock >> there's also a possibility they roll out further price hikes. >> absolutely. they have a product that people want it's interesting, because if you go to costco, they won't do it i mean, they're the -- what are the cards that you're willing to pay more for apple. netflix. costco costco doesn't want to do that costco just says, listen, we don't want to alienate the customers. netflix is willing to do it.

those other companies that you put up, i don't think they have anywhere near the content that netflix has. it's a content story it's the ability to be able to find something -- right now, there's something doing something creative in uruguay. i don't know what the hell it is, but 17 million people are going to watch it because uruguay develops serious programming, not just, i got caught in a fire, and sure enough, someone from ncis rescued me and took me right to the courtroom. >> in sydney that's where they prosecute things in australia. >> cost fortunes the uruguay program, which doesn't exist, costs nothing >> as for the stock you've seen, it's going to be up as much as 10%. and market value of netflix now, because we like to play these games, is equal to disney, paramount, and warner bros. discovery if you put them all together >> desantis is not going to attack anything netflix does >> if you go back to april of 2022, this was around $160

bill ackman lost $400 million, threw it in, said, i'm done with it that was the ackman bottom on netflix. that takes you back to april of 2022 and it's been straight up since then if you're smart enough not just to own that but to short many of the other streamers, you'd be in good shape >> this is not a call about password sharing >> there you see that bottom i'm talking about. >> even though they're older people, they understood that subtitles are the preferred way to watch things. so now, they can go all over the world and find very interesting drama about a person who's getting divorced in northern iceland, which no one's ever been to, and yet there's a murder, and it's that interesting because it's over 12 shows. >> and you amortize it around the globe and your cost of production is low. >> not to mention you're going to get a lot of wrestling now. ari emanuel, who runs tko, which

signed that deal with netflix for "raw," made the point that it was really only a market increase, but the fact that it was netflix made all the difference take a listen. >> it's netflix. they're the global leader. they're the best person -- best company with regard to sports entertainment, whether they've done it with formula one, whether they've done it with tour de france, and this is kind of the next iteration as they go to live and moving into live >> when it comes to netflix, i'm excited about it too 52 weeks, live that's a lot of rock raising the eyebrow every week for netflix >> "ft" this morning, jumping into pro wrestling signals tipping point for sports media >> it's not sports it's entertainment it's great entertainment it happens to do with the concept of sports because people are beating up people. they beat up people very well in the nfl.

i think if you beat up people, it still sells, but they have to be really beaten up or at least look like it >> this is -- it is entertainment. >> yeah, but this is -- >> it's every week it's a storyline netflix likes a satisfactory l story line >> football season ends. >> you seem to be a believer in the xfl, couldn't say anything bad about that it's never succeeded >> those people play for dinner >> you're going to succeed where nobody's succeeded before with spring football? >> my friend, brian westbrook, told me it's going to work darn good businessperson i'm a believer i'm a believer that anything that is real, in other words, there are people out there who are killing themselves in order to play for the nfl. the nfl, like you said, 92 people start the season in the nfl. when you go to training camp, when you say, hey, listen, who are all those people wearing the red pinnys

they always say the same thing nobody you'll ever have to worry about. >> yeah. the challenge is spinning out their biographies, which is what the olympics does well and what the nfl does well. >> and oh, by the way, going against the rock, not been a great thing for people's career. short the rock, and you know what you invite me to what? >> you don't want to do that to your funeral. >> to your funeral when we come back, a look at what to expect from tesla tonight, due out after the close of trading today take a look at the premarket it's a mixed bag of guidance today. we'll talk about t and dupont. (clock ringing) go. and go and go and go. (tense music) but what if you. (tense music) stop! you work hard. it's time for a bank that'll work hard for you. everbank performance savings is built to put your money

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♪ ♪ ♪ ♪ ♪ ♪ let's take a look at shares of at&t this morning we talked a bit about verizon yesterday, which had a very strong day in the market after posting numbers that did seem to be ahead of expectations of those who follow the company not the case, at least, in the early going for at&t perhaps the free cash flow

number, because overall, 526,000 postpaid phone net ads, by the way, better in the quarter than verizon. now, remember, they're following a different strategy when it comes to broadband and i spoke yesterday about verizon adding that 375,000 fixed wireless customers in the quarter, getting to over 3 million of those customers. at&t is spending a lot more money to bring fiber right to you in the old-fashioned way, and they did have net adds in fiber. it's a big effort for them, consuming a decent amount of their capex, which continues to be at a fairly high level. and their outlook, adjusted eps, $2.15 to $2.25 that's giving people pause and maybe one reason why the stock does look to open low, another 2% lower overall >> so, you didn't think postpaid at $5.26 was below expectations? >> was it? you may have something there

that was also below. free cash flow is a bit milxed n terms of expectations. at&t will tell you, hey, we hit beyond the higher end of our guidance, but that doesn't appear to be the case. free cash flow in the fourth quarter, $6.4 billion. full year, $16.8 billion they say exceeded their previously increased guidance and up $2.6 billion versus the prior year >> what did you make of the fact that their churn was lower and verizon's churn was higher, but verizon charged more they raised more and they got a lot of people to pay. i thought verizon was a good quarter. >> i know you did. i haven't dug deeply into enough to answer the question with any level of insight >> got an upgrade of verizon today. some looked at the eps guide and argued there's some depreciation in there it's a little muddier than just a straight guide lower >> it is muddier, but the numbers were good, and i think that verizon raised prices multiple times and did not seem to lose any substantial

customers. so, i like a company that raises price and doesn't lose a lot >> if they're raising price in one area, are they discounting in another i like to look at 20 years of all of them just to make the point. >> why do you hurt me? >> sometimes you don't want to be a long-term holder of these things not everything goes up i wanted verizon versus at&t because it makes verizon look good you see? >> put t-mobile in there >> t-mobile, you don't have 20 years, but it has been the place to be, as you well know, without a doubt. t-mobile has rewarded you for being a shareholder over the last five years or more. the sprint deal, obviously, being a key there as well, ask then the leadership of john legere and followed on by mike seifert. whereas you didn't want to own either one of these things >> no. >> and obviously, i know you get dividends, and we don't include that there, and it's important, but it's still not great >> att stock has got a good dividend because it did what

it went down a lot >> made the yield better, but they cut the dividend. you'll never forgive them. >> if you don't have anything good to say, don't say it, so at&t >> just silence? that's the silent treatment? >> that's all you got? they say they're winning on the local level. >> johnson & johnson is like the eagles >> what does that mean >> can't figure out what went wrong. we're going to get to some other guidance dupont, not having a good premarket. we'll get cramer's "mad dash" and downtown unowtohepeng belln t oni trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content

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we're going to get jim's view on semi camp today. bookings at 9 billion euros. street was looking for three and change that's helping out some of the nasdaq winner's list this morning, we'll get that opening bell in about five minutes you can catch us any time, anywhere, just listen to and follow the "squawk on the street: opening bell" podcast. to duckduckgo on all your devie

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to help you see untapped possibilities and relentlessly work with you to make them real. >> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible invest let's do it. time for a "mad dash" as we get

ready for an opening bell two and a half minutes from now on what we like to call hump day. >> there are three standouts today. there's s.a.p. they fired 8,000 people. there's obviously netflix, and then there's asml. now, they make semiconductor capital equipment. typical machines are as big as a city bus you need them to make really complex machines the united states has not favored this dutch company being able to sell to china, but there's an export control that the chinese beat they ordered a huge amount this is really important, david. asml is the hot level, so the read-through is to nvidia. taiwan semi is using it and the reason i bring it up is because texas instruments reported a weaker number. that's lower end, that would not be this kind of thing. asml is the highest and finest, and you can take that as a read-through that the chinese don't want to be totally left behind, or you can take it as a read-through that a.i. chips are

the strongest part and everything educatilse is just pedestrian >> everything else is moving on its own trajectory but nothing like that. >> texas instruments was their usual curt selves on the call. texas instruments and the industrial iot part. not good and then asml is the nvidia, amd part, excellent. >> right we should point out, it is a dutch company, but it's -- if you look at the history of it, it's u.s. technology >> exactly right >> that's why we do have an important role in saying no. >> gina raimondo, the commerce secretary, recognizes this is really important to people there are some chips that we can't let the chinese have i think that china eventually is going to have to come around and do something to make it so that they get these chips because it's going to -- it's going to -- i will point out at a later point in the show that china did pull out all the stops. they did they did a 50 basis point

reserve hike this is not manipulation stock this is for real, carl and you can buy chinese stocks on what they did last night. this is real >> we'll talk about that more in a moment let's get the opening bell here on the realtime exchange at the big board, morgan stanley investment management celebrating the listing of the morgan stanley direct lending club at the nasdaq, it's a financial services conference exchange taking place in miami in february there were some jokes that on the call, they tried to get texan to say, is march the bottom, and they could not get them to say what sanjay said the other day. >> i've always liked him, but they don't play by the rules they're not -- i mean, they're like one of those companies, limit yourself to one question if you have two questions, they say, we're only answering one of those. they're tough. they do their own thing. they are a public company, but no, they're not going to call it

for you. they're not going to play that game i do enjoy them. they are a very good company they make a lot of money but they are independent of the street, and they are, as they would say, as good as their clients want them. if there's too much inventory in the system, then no good by the way, on this bell-ringing, morgan stanley and this direct, i hope it's direct to making money, because most -- last quarter was direct to not making money morgan stanley is -- this is their time to show that they are still interested in growing margins, and in leverage and not the leverage where you take down debt but leverage where you have a machine working. maybe this will help them, which is good, because my travel trust owns them, and it's been extremely disappointing. >> well, b of a, cevitas got a note today that bank positioning is only three points off the svb lows, and that it is a good chance that maybe if you're -- i think a coiled spring, the potential coiled spring. >> i agree it's a coiled spring,

but i also come back and say, if you listen to david and he talks about, say, private equity or private credit, those guys are the wild west. they can do whatever they want and banks are so heavily regulated, they're still trying to figure out what they can do they ever. >> although direct lending, that's kind of what we're talking about there. giving access to the -- >> i was being very positive about morgan stanley >> -- the average investor, so to speak, to what is a very quickly growing market that we have talked about so many times. to your point, that has disintermediated the banks to a certain extent there is a question as to whether they're going to come fighting back, some of the banks, and start to fitness lbos in a way they used to, to try to take some market share back. they say, we benefit anyway because we have these relationships with the private equity firms and the private credit aspect of it as well that we benefit from. but they used to finance all these deals, and now they don't. >> that was the margin >> except if you were financing

twitter, which was led by morgan stanley. i'm not sure where they mark that $13 billion >> not a halcyon period for morgan stanley look, the stock is actually up only down four points from their miserable -- i mean, from the quarter that was received. >> we did have, yesterday, citi took meta to $440 yesterday. reels, revenue accretive, they think. ad loads up 20 basis points quarter on quarter >> the advertising -- the advertisers are software people. zuckerberg is a great businessperson, and he's giving them the content that they want to advertise against i still believe, by the way, that tiktok is the way that you can explain to people -- i think older people, and i mean anyone older than, say, 40, does not realize where people get their news, what people congregate and talk about if it's not netflix, it's tiktok we're all still thinking maybe they read the paper and stuff.

"new york times. "new york times. good numbers >> "new york times." >> older people read the paper >> it's about digital when it comes to "the new york times." >> puzzles, cooking. leisure silos. >> all those other areas wire cutter. they've come up with all sorts of different -- >> i think "the new york times" is one of the most compelling things in the world. i think younger people actually read those stories, and it's beautiful. >> far from failing. >> they completely pivoted in a way that we don't talk about enough they pivoted quality and it works, and the stock just goes up. we never talk about it >> jim, we're basically 2% from 5,000, s&p, at a time where the ten-year does not have a three handle we're back to 4.10%. are you starting to watch this melt-up conversation >> i jusk that i have a conference call that i'm giving for the club today at noon, and i'm just going to talk about,

why do we really have to own anything other than tech the moment we move away from tech, we get blown up. diversification and the only free lunch i know gary gensler used to talk about that, that you need that diversification. diversification is killing you >> is dupont a good example of that today >> we sold some dupont last week, because i said, what's it doing up here? the answer was, nothing. when you think about ed breen being a very seasoned hand, he got beat by china, by destocking there was too much inventory there's too much inventory in a lot of different places when it comes to industrial. look at 3m they had a quarter where there was too much inventory, and it meant that next quarter would be bad. what he's saying is the next quarter will be bad at dupont, but that was terrible. >> prelim guide here on q1 is below on sales, below on adjusted eps by quite a bit. they're looking for low 60s. street is at 88. they mentioned china specifically >> this is dupont we're talking about? >> yeah, look, i searched for

what degree of negative word that i could come up with, because i don't have a new one other than the fact that when i spoke to them, i said, guys, you're looking at $65, and at the time, the stock was, you know, i spoke to these guys. candidly, i'm going to tell people today on my call, look, we sold some stock at $74 and we're not buying this one back >> you're not? >> no, because that i told you it won't be any good until may >> if they can even predict china, which nobody can predict china. >> no. nobody seems to have a handle on china at all >> no. >> they cut some reserve retirement ratios. >> that was big. >> yardeni today says they're in recession, which sounds weird given their official data, but he does think the wealth effect there is having a real -- is biting >> i put a china file together when i saw they did 50 basis points, they're in panic mode. so, what they did was they bought a lot of stock. >> we don't really know what they actually did with the stock

thing. there was reports that they haven't confirmed in terms of what they were putting into the stock market potentially, but what's in your china file there? >> i have four of a kind, david, which is a darn good hand. >> okay. >> i got baidu, pin tduoduo, whc is temu. and i've got alibaba this is four of a kind >> that is four big chinese companies, very important companies. >> or in light of new hampshire, this is a handful of trump >> that, it could be as well >> this is all trump this is it right here. this is what's going to work, because they've decided with this 50 basis point cut, that's not manipulation of the market it's like, okay, we'll play, you buy every single one of these. they're panicking. i've been waiting for the big panic. they're panicking. they're going to actually do

keynsian >> i don't know what they're going to do, you know why? it's china, jim. >> forget it, jake, it's china >> the prc is a giant hedge fund and they're going long this is a hedge fund has ackman talked about this giant hedge fund what >> when you say things like that -- >> they're like the carolina panthers >> is this just a statement or do you in some way believe that? >> david, it's not entertainment, it's sports entertainment. >> you know what's entertaining for me reading the background in a proxy for a big m&a battle u.s. steel kind of interesting. actually, also goes back to at least geopolitics to some extent but what did we learn from the background of the transaction on u.s. steel cleveland-cliffs was a bit closer than some had anticipated in terms of the cover bit. 54 versus, of course, the bid

that was taken at 55 from nippon >> is he done? i love that guy. >> it was half cash, half stock, and a lot of the proxy, or this background, is devoted to explaining why the board looks askance, perhaps, at cleveland-cliffs it was both the need for shareholder vote, the fact that it was half cash, half stock, and most importantly the antitrust risk they felt that deal represented, cleveland-cliffs proposing as much as $2 billion in diversetures but the board coming back and saying, we think it could be you need as much as $7 billion in revenue being divested to make this thing work it was a risk they were not willing to take, not to mention, of course, you had an all-cash offer that was higher from nippon but jim, there was still concern here on the part of some that, you know, who knows? even though japan is our long-time ally, even though there's no jobs that are going to be migrating in any way -- in fact, they've committed to corporate jobs even though there seems to be

something they have to resolved with unions that isn't that significant, perhaps, that, you know, brings some risk so, you do see stock that's trading at a decent spread to the 55 cash deal as a result of that but you know, it's hard to think that cleveland-cliffs, even though they're trying still to create some concern, will be successful >> it is interesting that of the industrials that i follow -- we'll get to rails -- but steel is doing well. nucore broke out yesterday >> stelco with a consortium. but the main bidding started at $35, then to $44, they did a great job in getting value there at u.s. steel. >> there's a great scarcity of assets because our industry was wiped out by the chinese a long time ago some of the survivors were nucore, and cleveland-cliffs, because they're ruthless, but

cleveland-cliffs is a -- you know what they are >> tell me >> that's the broadcom of steel. >> oh. broadcom of steel. >> they come in with a, like, chainsaw, but honest, and they make sure that they're very productive >> broadcom's stock price is 1234 right now $1234.56 that can't be right. >> how did you get in the entertainment business >> $1234.56 was on there >> you are amazing >> that was an amazing moment right there. >> david just made historic news that's about -- >> we don't even have the quote on the screen. >> $12.6 million something or other. >> there it is again it went away it was $1234.56. it went away >> i have to tell you -- >> avgo, guys, back in the booth, is the symbol we're

talking about. >> i have to tell you -- >> you like this stock >> are you kidding it's hock tan. he always gets his man you just had the fastest tightening cycle in the history of whatever, and the steel companies are -- nucore is coming back to an all-time high. truck company. what a weird tightening. >> less than a hundred billion now separates broadcom market cap from tesla's, jim, and a lot of discussion about what we're going to get tonight looking for clarity on the ev deceleration, delivery data for the year and auto gmx credit >> yes, and you know, maybe some mention of the pick-up don't know it's time to pull a rabbit out of a hat if you're -- >> you think that's what this redwood crossover is, according to reuters looking to start production of a new ev in '25? >> really need that. you got to get -- i kicked him out of the seven last night, made it the super six, pending the idea that he may have a

rabbit there's got to be -- is it blayne david blaine they got to do something >> what? >> it's musk what do i know >> it's musk >> it's musk forget it, musk? >> forget it, it's musk. >> it's china, it's musk >> like, i got no answers. >> well, no, you got that broadcom number. >> i do. i'm still watching >> that was like david blaine. >> i'm fascinated by it. >> tesla is going to be really important because you have this netflix, beautiful call, and then you've got this back-to-back nex really great to say, although tesla is -- the last call, by the way, tesla sounded like they were a tool and die company, it was so straight. how about ibm too? a lot of companies that are interesting in terms of, like -- like ibm could have a great quarter. >> after the bell as well. >> they could have a great quarter. they could >> they could.

guys, shares of ebay are up 2.5% on news that they're going to cut as many as a thousand roles. >> maybe they fire everybody, it goes up 10%. >> most significant and toughest of these decisions, ceo wrote in a memo, is to reduce our current workforce by about a thousand roles, estimated 9% of full-time employees. also scaling back the number of contracts we have within our alternate workforce over the coming months. take a look. stock, as is often the case, responding positively to efficiency that we have often seen amongst companies that announce these kinds of things >> not the only one today, jim s.a.p. see this chart on restructuring 8,000 jobs on an a.i. push and then their net guide goes higher >> that was incredible s.a.p. i expected a decent quarter. i didn't expect them to just kind of fire as many people as possible and go all in a.i. and that was a wonderful quarter david, i got to do a little

karnack the magnificent, "jeopardy!" thing. >> what is a blowout >> how do you describe service now's quarter that's going to be reported tonight >> thank you >> yep what is a blowout? >> really? >> yes >> you're making a call right now on a quarter that hasn't yet come to light? service now is going to be a emp blowout? you're all in with bill? >> yes, i am here's one >> the digital transformation is taking place all over. >> yes >> blowout trotsky? what is trotsky? >> russian prune juice an actual carson >> i think we're waiting on p pmis we can do a little bit of boeing what do you think, guys? >> well, who made the doors and where and when i mean, i don't know

i don't have answers other than the fact that this is a little -- time to go to the hill this is the time where david calhoun -- this is the time that tries men's souls. >> they are going to meet with senators, and you had the ceo of alaska talk to tom costello on the "today" show about the number of loose bolts that they found. take a quick listen. >> i'm more than frustrated and did disappointed i'm angry. this happened to alaska airlines it happened to our guests. it happened to our people. my demand on boeing is, what are they going to do to improve their quality programs in-house? we are sending our audit people to audit their quality control systems and processes to make sure that every aircraft that comes off that production line that comes to alaska has the highest levels of excellence and quality. >> meantime, the faa chief, jim, says this probe might extend beyond the max >> yeah. look, the news isn't good. all i can say is, david, thank you. >> you're welcome. >> thank you for getting me out

of boeing. >> you're welcome. >> this is such a problematic situation. we hear, like, oh, it's malaysian doors, oh, it's plug-in. and i think that there's obviously people who are just saying, look, calhoun is not the man. calhoun did throw himself on his sword in that amazing interview with phil. but when -- and remember, alaska is angry southwest was angry last time. >> united. >> everyone gets angry, but the one thing they don't do? pull their orders. you see, better than being angry is you pull your order for instance, yesterday, rtx, they had the problem with the turbo fan. people were upset, but no one canceled orders. that's when you know when they cancel orders, that's speak softly and carry a large stick. >> it's a duopoly with the planes it's hard to cancel an order >> we should get in that business, david. >> i'll make a note of that. let's get to rick santelli with pmi

>> hi, carl. indeed, these are january preliminary reads on the s&p global pmis. we all know manufacturing in recession and the last 12 of 14 months on manufacturing have been under 50, but not today 50.3 it pops. that's the best level since october of '22 you see yields moving up on these data points. we know services have been doing better 52.9, a big beat, best since june of last year, and finally, the composite leaning on the services, strength side, another solid number 52.3 52.3 and that is the best since june of last year, and both services and composite now 12 above 50 in a row, and that is exactly the opposite of what's going on in manufacturing. rates have moved a bit higher after coming in lower, and, of course, we have $61 billion of

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we had talked about proctor yesterday. today kimberly is in the news, down 4% premarket as we get an open here, 151 misses 153. margin miss, jim. >> i know. >> a lot of 4x impact. >> i know. i didn't like the revenue. i was hoping this could be a quarter they could put it together because it's a great american company but not this one. >> coming off the opening highs but fresh record highs for s&p

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because they're doing the all stop panic which i think they are, it's big. and energy is going to come back halliburton reported a number last year, in terms of you need more oil because china is going to make a come back. i want to look at halliburton, tonight i'm going to devote time on the show to halliburton china could be really not manipulating the market. so let's look at a transfer for residential. the chinese are real this time they're real. >> i noticed at jpm yesterday, oil intensity, oil versus gdp growth down 70%. >> he knows energy really well did a great energy conference i was hoping to get invited to, didn't i have to talk to jamie, maybe this time i'll get invited jamie wouldn't speak to me at the health care conference i think he only speaks to me when he goes to philadelphia.

>> then you have to bleep it out a little bit. >> he's got to -- he started his presentation in philadelphia with a bob and i'm like i got to cut that i can't use that you know how you do that stuff that's called a side, or something. >> sound on tape >> but i couldn't use it welcome to -- but he did get the feel of what happens in philadelphia in sports when you bring a big box of bpopcorn on your coach. >> see you tonight. when we return, more reaction tnelianths&o tfx d e p at fresh all time highs. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought

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that always puts you first. (we did it) start today at godaddy.com good wednesday morning welcome to another hour of "squawk on the street" i'm sara eisen with carl quintanilla and david faber. take a look at stocks this morning. a boost on the dow up about 69 points or so s&p 500 up .5% and the nasdaq up about half a percent.

yields are lower today if you look at what's working, communication services, thank you netflix, technology, financials, energy, discretionary, real estate and utilities all higher 30 minutes into the trading session. we're watching, keep an eye on the semis texas instruments weaker, and amd higher following a buy. shares of at&t under pressure, the company posting mixed results and guidance, stocks down 2%. and boeing, a number of headlines on the plane maker including reports the faa may expand the investigation the ceo dave calhoun is headed to capitol hill today to meet lawmakers. >> we've got more breaking news on boeing and for that we get to phil lebeau. >> looking at shares of boeing, let's look at them, we have a statement from boeing regarding a report that came out this morning from dominic gates at the seattle time, long-time

aviation reporter there. citing an anonymous whistle-blower who says that the door plug in question on alaska airlines, it was installed improperly by boeing and as a result, the blame when they ultimately figure out exactly what happened here will go on boeing the article goes on to talk about the culture, lacking the safe safeguards that should be in place. and from boeing, as the air safety responsible for investigating the accident only the u.s. national transportation safety board can release information about the investigation as a party to this investigation, boeing is not able to comment and will refer you to the ntsb for any information. pretty standard language what you would expect the company to say, essentially we're not commenting until the ntsb reaches an ultimate conclusion about the root cause for this accident we've heard from ntsb's chair,

where she said look it's going to take time for us to figure out were the bolts installed improperly, not completely installed. what went wrong with the door plug again, that's why we're seeing a reaction on shares of boeing not a ton of reaction but a lot of cross currents here in terms of boeing news with dave calhoun on capitol hill today meeting with senators, no doubt these questions will all swirl around what went wrong on that alaska airlines plane with that door plug >> phil, the meeting with the senators, the quality stand down, the comments from the alaska ceo to the today show how much pressure does this take off of spirit, to your point, shares are up in this case but not by much. >> takes some of the pressure off of spirit but it's the entire process here. if the root cause is boeing's manufacturing, then ultimately they're going to bear the brunt of the fallout here.

but spirit has its own issues and it's part of the manufacturing problems that have been front and center for boeing for some time. and so, while this specific report is more about boeing than it is about spirit, i'm not sure that, you know, spirit can say, okay, we're clear. everything is fine >> fphil, thank you. phil lebeau, keep us posted on the boeing news with the ceo on capitol hill today i want to talk about what's moving the markets today we are getting centralb banks out. bank of canada came out, held rates as expected. they're still worried about inflation, the core measures of cpi are not showing sustained declines and the odds of a cut for the bank of canada go down to 40% in april from 65% where they were before the policy announcement sometimes we look at other central banks as a preview of

what the fed could do. expect the president of the ecb to continue to push back on the market on aggressive pricing of cuts that's what bank of canada is doing too. is the fed going to do that? we'll see. we heal hear from fed chair jay powell whether he's confident inflation is coming back down to 2% and willing to give the market the okay on pricing of the cuts the chances of april have come down and yields have risen the other central bank story is china. expected to now cut 50 basis points their reserve ratio requirements continuing to juice their markets and economy. but the problems run deep. the question is can the relief across chinese stocks, commodities continue with some of the big problems still out there? >> there's so many it's hard to enumerate them all. >> yeah. >> do we really have any transparency into actually how much they are spending in terms of trying to prop up the stock

market >> no. >> and/or whether that's moves forward or being executed? >> the bloomberg report said 278 billion, they have the so-called national team, banning hedge funds from short selling, they're trying to get control of capital flight i go back to crammer's skepticism on this, they're trying to stem the bleeding a little bit but not address the underlying problems. and so, for a long-term investor it might be good for trade might be a big rebound story if they're not going to let this market fall, and prop up the economy. but i think investors are gun shy because we were hoping last year they'd do more to stimulate the economy and that didn't ha happen. >> still an export led economy and there's a concern they'll rev up the engine more and try to rev up whatever they can

because they are oftentimes the cheapest producer. >> they are. although the world has moved to friend shoring and near shoring. >> without a doubt. >> it creates tension but also economic pain for china when a lot of the factories we talked to u.s. companies and european companies moving to vietnam and india and mexico because they're trying to hedge some of the risk there of china so that's a sort of bigger structural question about china and what it's going to mean for their economy. as far as the u.s., so politics is on everybody's mind i thought the chart from michael from j.p. morgan was good. it doesn't say much about the market he charted the percentage of moderate members in both chambers over time what's happened both in the house and senate there's a company called vote view that determines something like this, i guess i thought it was interesting that it's gone way down and

we're pretty much at the lows. >> he goes back to 1789. >> apparently a lot more moderates then >> a lot fewer members of both bodies but i guess there were more moderates at the beginning of the country, yeah. >> i think the only point of it, he was saying it too, nothing everything is black and white, even though we have this less sort of moderate position. speaking of congress, here's dave calhoun, ceo of boeing, walking. let's listen. >> that we don't have 100% confidence in. i'm here today in the spirit of transparency to number one recognize the seriously of what you just asked, number two to share everything i can with our capitol hill interests and answer all their questions because they have a lot of them. >> what is your comment today on the news that was boeing not spirit -- >> he needs to -- >> no comment. ntsb thank you. >> thank you

thank you very much. >> did the senators ask for the meeting? >> took one question ceo of boeing there saying why he's there today, to answer questions full transparency, address the safety concerns although the news not moving in boeing's favor we'll monitor that from you, let you know if we learn anything from the boeing ceo as he faces lawmakers. i wanted to leave you with two quotes on the state of the consumer puma is one, after that nike warning, puma echoed the charge and had a big miss overnight and sounded i think pretty cautious when it comes to the consumer. if we have that puma quote to pull up. there we go. for 2024, geopolitical, macro economic challenges as well as highly volatile currencies to persist. this continues to weigh on coop summer sentiment and demand, especially in the first half of 2024 and the other was kimberly clark, which sounded more

friendly in the vain of the proctor and gamble message yesterday, talking about a healthier consumer did see organic growth most driven by pricing. the market is disappointed in the quarter overall, it was a miss and guidance comes in light. as far as the consumer, constructive commentary on what they're saying listen >> the consumer right now still remains, despite what you might argue is a fairly mixed kind of consumer picture, the consumer remains pretty healthy the categories are pretty robust in north america just to give you a reference point, category value was up 6 in the quarter and 8 for the year so that's a pretty solid number. >> michael hsu there i think it depends on what category in you're, what income

level you cater to to understand what the consumer is consumers are expected to drive the gdp up to 2% or higher that's on thursday. >> tomorrow. we'll see. a lot of takes about what real income growth, real disposable income growth is doing for the consumer. netflix is the stock story of the day two year high for the morning. 13 million subs in q4 well above estimates. the company describes the entrance to '24 with good momentum and a focus on continued growth in the ad business let's bring in allen gould, he has a buy, raises the target to 585, great to have you welcome. >> thank you >> i think pivotal at 700. to what degree is valuation a concern, if any right now? >> the stock has got a high multiple now but i think it deserves it. the fundamentals are changing and i think the upside, the bias on the earnings estimates will

be to the upside, the competitive environment has changed. the streaming wars are over, netflix has won. when you're in a war you don't sell ammo to the competition and everyone is selling licensing content, that's the ammo with the streaming business it's hard to be an arm's dealer and a competitor if you look, this is almost the mirror image of what we had in 2022 in 2022, netflix subgrowth was restrained because of password sharing. the traditional studios were launching and marketing their new streaming services they were reduced -- they cut prices, spending a ton on content and they stopped licensing to netflix, the opposite has all occurred. >> with this subgrowth and the possibility of further price hikes, content budget is that worth worrying about anymore >> not at all. the kmcompany generated almost 3 billion of free cash flow. they bought back 6 billion of

stock. generate another 6 billion this year, buy back another 6 billion of stock they have the best balance sheet in the industry. debt is one time levered, it's going to go down everything seems to be moving well for them. >> bought $2.5 million of stock back in the last quarter let's talk about the ad business, it was up 70% quarter to quarter, that is subgrowth in terms of ad sporupported do you think it's a rel business for them >> it's absolutely a real business for them. one disappointment over the last year maybe the ad growth didn't scale as much as they had anticipated. it's 23 million monthly average users. if you figure two to three users per account it's probably like 10 or 11 million subs on the ad tier that's a global number not u.s i believe when they launched it

a year ago they said to advertisers we should be at about 40 million maus by the end of the year. they're at 23 million, taken a bit locker but it's not a concern at all we see eyeballs in viewing is moving from linear to streaming. advertising will as well ctv is going to continue to grow netflix has the viewers. >> to the extent they won the war, what does it mean for those participating in it previously >> it's going to get a lot tougher. one would think that, you know, the speculation on paramount, that sky dance is going to buy them or someone else is going to buy them, or even if they stay independent they may have to close the streaming business and go back to becoming a content seller they can't afford those losses comcast, your parent company is losing over $2 billion a year at peacock. brian is not going to stand for that for very long does it make sense that maybe a peacock and a max merge?

there will be fewer streamers. netflix said there will be consolidation. we'll see it, fewer streamers, less competition for advertising, for content and a little bit easier to raise prices. >> i love the shareholder letter they address the competition head on in a way companies don't do and laid it out and said we're not interested in that m&a when it comes to lin ear television how will the competition affect netflix and is that a long-term issue for the stock? >> i think it's not a long-term issue. there will be a few competitors. disney is not going away universal is not going away. these are strong companies but there will be less competition than we've had the last few years netflix 260 million subs i think they'll grow the subs 20 million subs a year. they grew almost 30 million last year some benefits of the password crackdown.

but there's 500 million total available market so they can continue to grow 20 million subs a year, raise price, ad revenue comes in their competition, also tiktok, short form video there's still plenty of competition out there. >> even jokes today about why the calls on youtube as opposed to netflix fascinating and amazing not long ago people wondered what do they know about the ad business, they showed a lot of people the answer thank you wfor coming in. >> thank you. stocks are pushing higher. we'll get a read on the rally. >> and an interview with the ceo of williams sew know ma. her take on the consumer and economy. tesla is gearing up for earnings that's after the bell we have a big show today "squawk on the street" is back right after this that your customers need to know about. constant contact makes it easy. with everything from managing your social posts,

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we fly safe planes we don't put airplanes in the air that we don't have 100% confidence in. i'm here today in the spirit of transparency to number one recognize the seriousness of what you just asked. number two to share everything i can with our capitol hill interests and answer all their questions because they have a lot of them. >> that's boeing's chief, dave calhoun moments ago arriving on capitol hill to meet with lawmakers. let's get to emily wilkins with more on the agenda

>> reporter: calhoun just walked into senator mark warner's office, one of two senators in virginia where boeing is headquartered but also set to meet with the head of the panel that oversees aviation, including commerce and tomorrow expected to meet with the top republican on the panel ted cruz this is to pre-emptively deliver a message that boeing has confidence in the planes, they don't put unsafe planes in the sky. but remember the senate has an oversight function here. we heard from senator moran who's part of the panel who said there could be potentially investigations, potentially be legislation. so it seems like part of calhoun's reason for being here is to talk with senators get a sense of the lay of the land, deliver his message and get a sense of what is coming next in terms of of an investigation i did ask him about reports today, that it was boeing rather than their supplier who put that panel on the plane incorrectly

and his response immediately was just to say there's already an agency looking into that and left it at that. so for all his talk of transparency, certainly not something he wanted to discuss with the press today back to you guys. >> we did hear that off camera while you were asking that question thank you. let's get back to the market we're rallying, s&p and nasdaq at record highs and on pace at least if they were to end higher today for what would be five straight days of gains what's caught your eye today, bob pisani >> it's getting more narrow, it's goldilocks. inflation is falling, growth is holding up, and sentiment is improving a bit. that's as goldilocks as it gets. a small group of companies doing well you know about nvidia, you know about microsoft. but insurance companies have been strong since that traveller report was knock them off the socks report here. some of the pharmaceuticals have

been doing better. the card companies, visa, mastercard have been strong. but still the rally is getting narrower, it's not broadening out like we were hoping it was look at the sector leaders, it's semiconductors and mostly nvidia, broad com. communication services, this is netflix, meta, alphabet. put up the sector leaders in health care, some of the pharma doing better banks are flat consumer staples aren't doing much industrials, consumer discretionary, energy to the down side. we want it to broaden out and it's not elsewhere, speaking of broadening out how about the ipo market when is it going to happening? we keep waiting. there's a few deals. friday at nasdaq we have a home and community based health care group out, bright spring, maybe

raise $900 million, not a bad deal, a bright spot. the big one is next week we have amor sports here, these are the people who own wilson sporting brand this is going to be a fairly big deal trying to race $1.78 billion. otherwise, so many out there, a whole story if you want to know about it last week on trader talk we'll see what happens going on. finally a topic deerar to yr heart, spac. the commissioners are voting on tightening the rules on spacs, three years late but they're doing something. they're going to tighten the loophole companies were able to target companies for these spacs were able to make outrageous forward statements because there was a loophole in the law that didn't specifically bring them in

so here they'll close the loophole the target company is going to be liable for the statements on the future results that wasn't clear before that's how they got away with the outrageous statements and also a safe harbor provision when companies make comments about earning, you can't sue them if they make reasonable efforts. under ipos they're exempt from the safe harbor. that's why you see them being very careful in future statements that was not clear in spacs. >> we spent a lot of time in the height of the spac craziness looking at the numbers and the prospectus in the presentations that would be made and i had fun with them because they were absurd completely and totally absurd in terms of what they saw in '26 and '27 and where they thought their rvalue would be in some crazy ebitda number that would never happen. >> now the aweuditors are goingo

have to sign onto the legal registration, and that makes it legal. so it's basically a green light gensler is giving to them. go ahead if these people are making outrageous statements they're not protected by it. >> we're past the height -- >> close the barn door after but in fairness, it does take time to get it out. bitcoin is higher today, trading just below 40k, the cryptocurrency has fallen about 15% since the launch of the etfs and one of the big funds is seeing the money leaving kate rooney is following that. >> crypto has seen more than a million in inflow but one firm with the most money is headed out the door that is gray scale seeing 640 million of outflows. and there's an estimate since the etf launched, gray scale has seen 3.5 billion in outflows

compare that to the other names, black rock saw 1.6 billion come in the door and fidelity not far behind that. gray scale still the largest there are a few reasons for the exit one is the successful trade that grayscale had. it converted into an etf before it was an etf, gbtc traded at a discount now they're taking some profits. and there are bankruptcies so companies like ftx held gbtc and they're selling as they restructure. ftx had about 22 million shares of grayscale and then the fees, grayscale charges 1.5% compared to zero or .2% for some of the other etfs

bitcoin's price driven by the macro news watching strength in the dollar, repricing of fed fund futures to get an idea where interest rates are headed so the things that are driving tech is what matters in crypto markets. back to you guys and sara. >> since the etf was a driver for so long. what is it ow, an inflation hedge, safe haven, unprofitable tech stock >> it's still a high beta play still people that see it as a flight to safety see it as digital gold and the events, like the halving coming up it's still the tech play, high beta, high risk play we'll see if it evolves joover time up next a conversation with the ceo of williams sonoma how a.i. is aypling into that

business and why she's optimistic "squawk on the street" is back in two you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations.

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welcome back let's talk retail, state of the consumer, key focus at the world economic forum in davos last week i sat down with the ceo of william williams-sonoma. the business boomed during the pandemic when everyone was home but the give back for categories like furniture and home goods has been rough across the board. here's what she's seeing right now. >> hasn't been that touch we had a little give back after the surge with covid people still love their homes, they're entertaining at home, cooking at home, and the home is the most important part of their life as we go into 2024, everyone is talking about health and wellness and i think what's exciting is that when you think about home, that's the place where you develop those healthy habits and so, there's a lot that we have in the pipeline to really capitalize on those trends. >> sort of to drive the secular

growth at a time where -- i mean, there are questions about americans prioritizing spending for instance, on their homes mortgage rates have been very high they've stabilized and come down a little bit do you see a bottoming? >> i don't know about a bottoming. i think that, you know, plateau is how i think about planning this year because i'm not relying on the macro improving to drive our business. and i'm also not expecting a disaster so if it stays where it is, we have plenty of great growth opportunities to drive it. that's what i'm looking forward to. >> with the top line declines you've seen profitability. >> that's a separate subject but yes. it was an interesting year we talked about it last year, and i don't think people believed how much upside we had on the bottom line. >> what's driving that >> a lot of things external and internal obviously the supply chain headwinds that we had during

covid have abated. there's new challenges upon us but those were driving costs of the product up whether it was the shipping or even just the absolute product price so that was, you know, we saw that coming but at the same time we also knew that focussing on service and returning to world class service was going to really drive a ton of savings. even i didn't realize how much that could be. when you think about shipping furniture. if you ship it and there's a damage and you have to ship it again or you're bringing separate products together and instead of doing one delivery, i have to do three to your house, you can imagine the costs grow and grow and grow, so now that our supply chain is not only where it was, but is improved, we're seeing a lot more return on the bottom line. >> you're also, i know, experimenting and using generative a.i., right, to make things more productive where are you in the process >> it's really not just an idea for us

it's the obvious things whether it's copyrighting and some co-pilot customer service. where i didn't expect it is in this supply chain. we have to make the decisions analyzing those things now we have more productive analysis to make better decisions to save us money. >> that continues to be a growth driver. >> yes. >> for growth margins. >> and the other thing that's great and we talked about a lot is the relevancy of marketing and using a.i. to send the most relevant margaretinketing to yoh is i think the epitome of customer service. >> what about dealing with the consumer and trying to figure out what we want to buy. >> it's best to be a co-pilot in the background we're not comfortable yet letting it overtake the customer interaction, it's important.

i want that to be authentic so it'll still be human interaction. >> are you affected at all by what's happening in the red sea. >> yes. >> and the delay of shipments. >> yes we're rerouting we have great partners the minute the announcement came out that was happening we started working on our contingency plans. >> you have a global footprint, you have stores in the middle east, manufacturing abroad just given some of the geopolitical tensions and issues right now, beyond the red sea, how is your business impacted by all that >> it's hard to know so many different things as you said whether it's housing picking up slightly. when we sat here last year, people were fearful of mass layoffs. while there are still layoffs it's not as acute as it was last year that's a benefit, right? and at the same time there's some costs coming down, some going up i take it all together, there's a lot of opportunities there's risks. but i'm optimistic.

>> you sound very optimistic. >> i am. >> laura alber ceo of williams-sonoma. that stock has been an outformer even though they're seeing double digit declines on revenues because they're in the strong brands and the market has confidence in her leadership as they have for a very long time it's outperformed not just the s&p but even competitor. maybe not so direct because of the price points but restoration har hardware, rh, for instance, a huge performer and the use cases that these companies are going there with a.i. but also the margin improvement in areas like supply chain making a difference. >> you asked her about supply chain overall, and how quickly they had to start to make moves to avoid the red sea. >> reroute ships

but these companies are all -- they're battle tested from covid on supply chain. so they're able to make these decisions and these moves much faster than they probably would have otherwise so now this is sort of okay we can deal with it we know where everything is going and how to reroute check out that one year chart, williams-sonoma. impressive overall market hitting another intraday record high for the third time in less than a week our next guys finds cyclicals attractive scott crohner, s&p target of 5, 5,100. welcome back good to see you. >> good to see you as well. >> we continue to see the highs on the s&p even though bond yields are creeping up it used to be we needed bond yields to fall for the s&p to rally. what's happening >> a few things are going on we had the big rally in q4 that

i think was premisesed on the ten year nominal fall we think that's part of the 2024 narrative, right it's taken a backseat to start the year as you described the backup in rates again. we have to keep an eye on that we think the ten year nominal is more important for the s&p for the fed fund discussion. so that's consistent with the way we're seeing the playbook play out for 2024. >> so the current thinking is the federal reserve will start cutting second half of the year maybe towards the end of the first half of the year does it matter when and how many cuts we get? if the market is off on that, couldn't we see a correction >> i think we've been arguing that the start of the year we were going to go to q4 reporting period get positive surprises akin to q3 but you ought to see full year '24 expectations in general

come down as c suites express concerns about macro conditions. but what we've been expecting is a weaker start to the year followed by a stronger mid year as you get to the fed pivot point whether it's march, may, june, it's a june 1st cut. it's coming. i think the inflation data tells you that i think you have a high conviction this is a fait accompli as to when and how much ultimately what i want to see is the fed talk aboutlessening their restrictive approach to the company and getting to something approaching neutral. which is a tough position point on fed funds to really target at this point. >> waller kind of started down that road and then put walls around his commentary in the last couple of weeks 5,100 is 4% away do you feel any pressure to raise your target? >> not yet look we're ahead of consensus on earnings expectations for 2024,

using a 245 estimate, 5,100 is 21 times that. we can talk about valuations if you want but we're comfortable where we are our point is we want to be in u.s. equities. it's a question of where, how and when looking for pullbacks to be more aggressively buying into holders of growth. we think the latest nasdaq rally is predicated more on continued euphoria on the fundamental front more so than valuations. got that we think the next leg is a broadening down -- >> we're not getting the broadening yet i'm looking we're talking about not including tesla anymore but nvidia is up 25% this year, that is up 1 11% this is a max 7 market now. >> i think it is now we had the broadening in november, december -- to sara's point we're table bounding bullish on the industrial economy.

part of what we're focussing on is we think that part of the market is much less than historic and the a.i. influence is part of the discussion here the ability to manage supply chains more real time. >> buy industrials for a.i. not the economy? >> buy industrials for lesser cyclicality than what is perceived. i think that's a multiple enhancer for that part of the market you know, you talked about retail we recently upgraded retail to overweight it's premisesed on the same thing. the productivity enhancements coming across the market are going to be a big deal you'll measure tech, a lot of the big seven, on the fundamental dynamic implications of a.i. but you'll see it more broadly overtime across the broader economy and see it in margins and profitability. >> all right. >> that's bullish for the overall market then. >> yeah. >> you think investors don't appreciate it?

>> i think investors don't appreciate it. the push back i get is still stiff. >> okay, thank you. after the break we'll return to netflix ithtoits e p gainer on the s&p, as you see we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash,

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got a bunch of new street calls on netflix following the blow out quarter dom chu is tracking those. >> netflix remains the most valuable, currently worth 240 some odd billion dollars and looking at whether they could go higher than that. looking at the analyst state of play as they stand as the upgrades and price target revisions come in, 59% of analysts have a buy rating, 35% hold, and 6% sell. the average price of $539 that begs the question whether or not

there will be revisions because we're at there if not above there at this point right now. if you look at the way things are panning out, a bull/bear case this morning on the analysts coming out on netflix first of all the upgrades from the likes, to outperform, netflix delivered excellent q4 results waiting for confirmations that the moves are paying off, they got it. the upgrade. the downgrade side of things be analysts at deutsch have downgraded from a hold to a buy. they say everything good has happened, it's already been priced in the stock. we think that netflix's leadership position is fully priced into the stock at these levels still think it's the best story in media we'll keep an eye on it, david back to you. >> that's kind of brave for them in a market cap wise at that 243 level it equals disney, fox, warner brothers discovery and

paramount combined so as we said earlier, netflix seems to have won the streaming war. also said it's not interested in acquiring linear cable assets or linear assets of any kind and further does believe that m&a was continue amongst traditional companies. certainly that could change the competitive environment that was all on the call yesterday. yesterday we spoke with tko ari manual that on the streaming deal netflix has with the wwe and seeing what the deal says about the media landscape. >> think linear is going away, don't think cable is going away. but there's a push to streaming. on this deal we did that early on with the ufc on espn and plus from our perspective, this is the next iteration of where this goes we have a linear play with

smackdown and nxt. this is the streaming play and so, for us, you know, it was the next step. it's a great deal for netflix in our opinion. they get 150 hours of programming. right. over $5 billion. it's like two, two and a half movies for 150 and for us it's the global player in streaming >> and the dominant player in streaming, of course, as well. it was a quarter just to reiterate again the things we've been talking about in terms of the subscription numbers alone, carl, coming in so far above estimates and not just cracking down on password sharing >> remember when i mentioned a moment ago when they did a u-turn on ads. how are you going to start this business from scratch even with microsoft's help and the u-turns on gaming and live events and live sports. if you go way back on original content, who knows if they

really did change their minds. >> i know. to think house of cards, right when it goes back to that. they've been amazing at executing, reinvented the company numerous times now to focus on gaming and live sports being added as well. it's the category killer. >> yep and still not back to all-time highs. we'll watch that trend line. still to come, the firstf othe mag seven names, tesla to report tonight. what the street is expecting when we're back in two

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lots of movement this morning when it comes to ai. s.a.p. announcing plans to carry out a restructuring plan covering 8,000 employees not clear exactly what that means, but it's all in a push towards ai and ai-driven business areas the company shares hitting a record high. meantime, alphabet is cutting ties with the australian ai firm that helped train its bard and google search products the decision impacting roughly 2,000 subcontracted alphabet workers, according to the company's union. everyone still clearly trying to pivot toward ai. in davos, i asked ceo marc benioff whether he feels that he is getting enough credit from the market when it comes to ai compared to companies like

alphabet, microsoft, skand nvida here's what benioff says >> our ai is very different. our ai is working inside your company. we're not just a general language model operating on the side, we're really working to ground the ai, which is kind of a technical term it's called grounding, where you're grounding the ai into your data, so that it can learn about your company and we've been doing that for a decade and that's why we're going to do, as i mentioned, $1 trillion, you know, predictive and generative transactions this week that's pretty awesome. by the way, that's far more than any other enterprise vendor. and you know, i don't know who's giving us what credit. i'm not looking for credit i just know what that my customers love this. >> and he went through a number of customers and how he interacts with them as well. everyone from laura piana to gucci to ford to talk about how

they're incorporating this ai, the data that they've been able to collect in the ai intercustomer experiences. that was from our leader special last night tonight, we've got a new one, cnbc leaders, world bank president, aja banga, 8:00 p.m. eastern. he has not really spoken since he's been on the job a little more than six months it's very different from the way we know him. he led mastercard, of course, for many, many years, very successfully, i would say, according to shareholders, and now, he's in charge of fighting global poverty and climate change >> a little bit of a different -- >> yeah. but it was interesting to hear how he's bringing his private sector chops to try to fix and improve a bureaucratic organization like the world bank >> meantime, as we mentioned, tesla is going to report tonight after the bell, off to a rough start for the year so far. our phil lebeau is here to talk about what we might expect some key areas that the street's looking for some clarity on, phil >> the one number that everybody is going to be focused on, carl,

we talk about it every quarter, gross auto margins, exlewding zero emission vehicle credits. that number has been coming down at a pretty steady clip over the last couple of years look at the estimate for the fourth quarter 15.7%, back in the first quarter, it was up at 19%. a couple of years ago, i remember when it was well north of 20% and the reason is because of what's happening in china. it is the world's largest ev market it's a huge market for tesla, understandably they've got the gig factory in shanghai the pricing pressure there has been immense and it has not let up. we saw price cuts from tesla in the fourth quarter that would have a direct impact on those gross auto margins. in terms of deliveries, the street wants to know if they're going to give us guidance for 2024 tesla delivered just over 1.8 million vehicles last year the consensus right now going into the call today is 2.1 million is what they're expecting tesla to give for a guidance we'll see if they give us actual guidance or if we get something a little more vague, like, well, we're going to be up 15 to 20%

we'll see during the call, after the numbers, when they come out. as you take a look at shares of tesla, remember, the conference call with elon musk is at 5:30 this afternoon and that's really when you start to see shares of tesla move, depending on what he says during that call. and again, gross auto margins, excluding zero emission vehicle credits, that's the number people will be focused on. >> meanwhile, there's some discussion about delivery guidance for the year. and some asymmetry between sell-side and buy-side expectations >> yeah, absolutely. and i think, you know, you've heard more than a few people who have said, originally, we think that they're going to be delivering maybe 2.2, 2.3 million vehicles this year that's gone. you rarely hear anybody talking about that and you don't hear anybody saying, well, maybe they'll just do a little over 2 million that 2.1 is really where everybody is coming together and we've already seen that in terms of the expectations for

production coming down a little bit, especially we know what's happening with the gig factory in berlin. and we know that in china, while it is the largest tesla factory, that's a market that's under a lot of pressure right now. not just for tesla -- >> -- going to be an investigation or -- >> sorry, phil we wanted to go to dave calhoun on capitol hill. another, obviously, situation we've been covering closely with boeing, but i believe he just ran away from the cameras -- or walked away. we'll be following, of course, that hearing with calhoun and give you any updates along the way. our live market coverage continues right after this

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good wednesday morning welcome to money movers. i'm carl quintanilla with sara eisen live at post nine of the new york stock exchange. today investors add to some netflix gains as the company continues to add subs, crack down on password sharing talk about the readthrough for what those results tell us about the rest of big tech, including microsoft and adobe. and while netflix doesn't want you to share, etsy is hoping you're feeling generous, launching a new