let's take a very quick final check on the markets before we hand things over. the futures have been mixed today. the down is off by 20 oints. the nasdaq, indicated up by about ten points right now. we do have a lot of earnings that are coming this week. make sure you're back here with us to join us tomorrow. see you then. right now, it's time for "squawk on the street." ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber has the morning off. futures mixed for now, but what a week we have in store between mega cap earnings, jobs number, ongoing political tensions. our road map begins with records on a roll. big tech on a rally. amazon, alphabet, microsoft, amd, all on tap this week. china's real estate concern.

and fanduel's owner set for an nyse debut. four-time super bowl champion rob gronkowski will join us right here at post nine after what a weekend of football, jim. >> yeah, i mean, look, we're not espn, but i think that these games are like what we do. you see these teams, and they are companies, and you see the kansas city chiefs, and look, they're -- you can call them alphabet or amazon, and then you see companies that fold in the second half, and that's, you know, maybe the lions are tesla. goff -- i was waiting for something to happen, except for their forecast, which was expect the second half that's not that strong. these teams are all great, and they are -- i find it just a universal thing. >> well, the overlap is obvious. gronk here, you're on sunday night football. there's so much that they have in common, and congrats, jim, by the way, for calling another

perfect weekend. >> yeah. i got that right. you had to -- you know, admittedly, i do bet against the spread. i wish all the people on tv did, because we're all watching fanduel and draftkings, so what good does it do to say, i think that i will take the niners? that's bad. what you do is you take detroit versus the spread. the spread is just the multiple. it's price earning multiple. take pepsi right now, coca-cola has a higher multiple. that's the niners. if you don't talk about the spread, then you are not doing what 20 million people are doing. >> it's going to be an active hour on the floor as they ring the bell. let's begin with the markets. big week on the earnings front, jim, in terms of market cap. >> this is it. >> this is the week. >> and i think that we've got so much going on. we have got the -- by the way, the refunding schedule on wednesday from josh frost at treasury, and then the employment number is going to

verify or not the wisdom of the fed, but there are days where, i mean, apple and meta, no, we don't want -- i was bemoaning on friday, there are so many good companies, they will not get the attention they want. it takes an hour to do an apple call, a meta cal. these are not calls like texas instruments where, req"you aske two questions, i said one question." >> your thesis is there are too many companies to keep track of. equal weight has given back all the gains it had. >> we had three notes today that say soft landing, and i understand that, but we reverted to pre-november pivot. it's the same guys again. it's the same thing that happened in march when we had the banking crisis. i think a lot of people come on our air, and they don't want to admit it. they say, it's going to broaden out.

it hasn't broadened. it's back to the significant six, whatever you want to call them, and i find that what's happened is if you're not in those stocks, then you missed it again, and you're trying to justify. there's really a raison d'etre. you either went with the big guys or you continue to believe the thesis that there are a lot of eli lillys out there. i think we should own it, i think we should attack the money managers who come on and say it's a broadening. attack is a strong word. >> we're beating consensus by five. financials are beating by ten. industrials, by seven, even with all the dupont and the 3m guidance. ba b of a's point this morning is no one aggressively guides higher in january. >> when you talk to the ceos, i talk to most of these ceos, the big guys, offline, and they

always say, why should i? why should i take my numbers up at the beginning of the year and then cut, cut, cut? so, those who are still, you know -- these are underperformance -- underpromise, overdeliver numbers, but look, i look at the industrials, and i think that the industrials are a question of, are the inventories down enough? they weren't for dupont. they were for dow. dow didn't get enough credit. i thought dow was good. you can go back and forth. the reason why the semiconductors have worked is because finally a destocking and these parabolic move, that's a destocking, but they also have something besides what intel has. amd crushed intel this quarter. just crushed them. but other than tech, i look, and i say, you're not -- take the banks. i thought the banks did really, really well. but people are willing to downgrade them and not willing to give -- usb has been downgraded, comerica, they have been downgraded and there's nothing wrong with them. jpmorgan had a good quarter.

wells had a good quarter. but it didn't give them the pop that you get from tech. >> so, does that leave you, then, if you're -- if the picture is cloudy on the cycle, the industrial cycle, leaves you with the rate cut thesis and the a.i. thesis? >> that's it. >> and are you willing to chase both? where are you on that? >> i'm in it. both. nick timmerage from the "wall street journal" has a piece that talked about, look, inflation has come down fast, they may have no choice. i think it's a june cut. he talked about a june cut. but they have to be worried that it could come back. all the companies i'm dealing with, we have mccormick. this is the best one to talk about. spice company, so everybody knows what we're talking about. they're predicting plus one, minus one growth. it's a growth company, why? because they got to put through price, maybe it doesn't take. they may -- i said, maybe you guys should do a marlboro friday, which is a reference to something that happened 30 years

ago where marlboro side, we're cutting everything 30s because consumer can't take it. a lot of companies are trying to get away with murder here, financial murder. obviously, they're just trying, as my mom would say, go to the supermarket and what do they do, shrink the ice cream from 14 to 16 ounces and charge more? costco is rebelling against that. i think walmart will too. the fight is about, can you still raise price? the answer is, no. there were a bunch of people who said that colgate can. don't bet on it. there's too many companies who can come in and do generic. >> we got an upgrade of colgate today. >> i know. >> they go to $91. i thought the jmm note on dollar tree was interesting because he says gas prices, cola, maybe the tax credit, the expansion of the tax credit, is going to be a $70 billion tailwind to consumer spending. >> i thought it was a great piece. i don't know whether the

conclusion was right, but he doesn't have some of the other companies. i thought that meant for walmart. now, people that don't go -- one of the things that bothers me immensely, i go to walmart. i got three walmarts i go to. one of my walmarts in neptune is fantastic. walmart is not what you think. walmart has so many great things, and they offer them at great prices and the stuff is first rate. it happens to be made in a lot of different countries, a lot in china, but they -- when they do price rollback, my kids go nuts. dad, look at this. this was much lower than it was three months ago. they do rollbacks, and costco is saying to these guys, you're not raising prices or we're going to do kirkland signature. mccorps minimum. kirkland signature pepper and salt and flakes, all much cheaper. so, there are forces of deflation, not disinflation, but deflation in this country that are winning versus these branded companies and that's not glp-1. that's just actual fact. and a lot of analysts don't want to go to these supermarkets.

they don't want to go to walmart because if they did, they would have their head blown off. they would see the prices. the prices are fantastic at walmart. i got a really great coat for 28 bucks. my kids thought it was 50. i haven't worn it, but who cares? >> goldman over the weekend looks at the 19% rip over the last three months. tony p. calls it in the 99th percentile of market history. these normally are moves you see coming out of a recession. you did say last week, we're due for a bruising, but i want to put that into context. >> january seems to be okay, but can we really get through this thicket of next week? look, i think apple -- everyone's resigned themselves to a number cut for the second quarter. but when i look at the significant ones, microsoft, blow away. meta, fantastic. amazon, really good. alphabet, best in show. nvidia, not in this reporting cycle, but will be terrific. >> amd? >> amd is a little -- went a little parabolic, and lisa su

might be in the camp of not going crazy with the numbers, the ceo. she's fantastic. but those companies are all going to do well. >> you're not brace for any land mines like we got out of tesla? >> no, i think tesla was unique in that you had a ceo who was -- it was a hamlet ceo. don't give me the "to be or not to be." that's not the question. take that off the table. i was with rivian. rivian did not -- the car company -- they didn't do a musk. musk just basically said, hey, listen, well, in the notice, expect really bad year. >> right. >> how am i supposed to get behind that? >> we're going to talk tesla capex guidance as well. we'll get to china worries, court orders evergrande too liquidate, most indebted property company in the world. rob gronkowski will join us as the parent of fanduel, flutter, gets ready to make its big board debut. you always got your mind on the green.

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embattled chinese real estate giant evergrande has been ordered to liquiddate by a cour in hong kong. eunice yoon joins us with the latest. >> a hong kong judge literally said, enough is enough. the judge agreed with the creditors that the struggling property giant has had ample opportunity to come up with a debt restructuring plan. shares of evergrande-related stocks were halted, but even before that, the share prices had plunged on a report that the company had conversations with foreign creditors but that goes 11th hour conversations had broken down. now, investors have been carefully watching this saga involving the struggling property giant with its $300 billion in liabilities, and wondering what's going to happen after two years. it's still very unclear what this ruling is going to mean. the company itself, especially the ceo, had issued a statement

saying that he was sorry about the winding up order and that the company would ensure home deliveries and promote normal operations. now, separately, the ceo told a local paper that the hong kong order only affects the specific listed companies. i managed to speak to one of the creditors just a couple of minutes ago who said that that comment is not justified, saying that the liquidator should be able to legally have entitlement to the on-shore assets. also, they are saying, though, that at this point, they're not sure exactly how things are going to play out, and a big reason for that is what bankers and creditors have been telling me is that the recognition by the government-backed chinese courts of the hong kong liquidator is going to be key, because only then the liquidators from hong kong would be able to get their hands on the assets here on the mainland, guys.

>> yeah, eunice, that's what i was concerned about. what is the jurisdiction here? does hong kong have jurisdiction over the courts in the prc's mainland? >> well, they have a cooperation, so they have an agreement from 2021 that does allow some cross-border cooperation. so, the creditor who i spoke to said there has been precedent for this. we have seen some cooperation, but usually with smaller developers and nothing on this large of scale. and in fact, when you look -- even though hong kong is part of china, the way it could be viewed in beijing is meddling by foreign creditors in what the chinese would see as an internal issue, which is that the issues with evergrande could potentially spill over, and it's already affecting sentiment of home buyers, so they want to make sure that they keep things stable over here. >> but eunice, we know that if you're going to have, say, a

1990-like restructuring as we did in this country, you've got to get rid of these zombie companies. why would the prc not use this as a way to get to the developers? as long as you have zombie developers, you have no ability to clear the decks here. >> that's a big question. there have been plenty of theories. one is jobs, for example, getting worried that people would be laid off, but one of the things -- issues that the creditor had brought up as well, that could be a problem, and bankers told me this as well, even if the foreign creditors were able to get their hands on these assets, let's say the chinese court said they will cooperate with the hong kong courts, that these creditors will be way back in line in china, that you would have, of course, like, local governments. you would have the banks. there would be other people who would be ahead of you. one thing that's special in china is that you would have also the suppliers and the home buyers, because the way that home buyers purchase their

apartments is they usually put a prepayment down. so there's just a lot of other people in front of you, which really begs the question as to how much movement forward these creditors have really made, and you know, it's a really big question mark there. >> it's remarkable, eunice, between the property, the unemployment issues, and certainly losses in the capital markets there where consumers are finding relief. very, very slim pickings. eunice yoon in beijing today covering china for us. when we come back, we'll get cramer's "mad dash," count down to the opening bell. it's a busy session at the exchange. gronk has entered the building, jim, with a big fanfare a moment ago. >> indeed. >> we'll pay some attention to flutter as they do this dual listing here. (ella) fashion moves fast. setting trends is our business. we need to scale with customer demand...

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time for cramer's m"mad dash." >> talk about media, sports. this morning, one of the companies that happens to have a lot of sports on but may be questionable is warner bros.

discovery. there had been a lot of talk that comcast might be interested. taking that off the table. content licensing, double-edged sword. target goes from $16 to $12, and david zaslav is obviously behind this, saying, they're not going to make their numbers. consensus estimates, which they had been above, they're now below. i look at this and i think, what's going to happen when they have -- they've got some great basketball? are they going to miss that? we know there's a lot of companies that want -- that feel very good about having sports. apple might want more sports. we don't know. alphabet has sports. maybe they did well. amazon. so, i think this is a meaningful downgrade, especially because i think a lot of us are rooting for david to make it, in part because it's cnn, and we want a competitor. they do suggest, by the way, in an election year, you couldn't get away with it, which i was listening to lina khan today on --

>> "squawk"? >> i lose my tongue. she said, we're making a study of it. i did -- second year law school, i did a lot of studying. i studied. i mean, one of the things i did was study. i thought that when you're the head of the ftc, you would do more than study. but you know what? she's a studier. she's a student. >> your point about these guys, though, they do say management is caught between scaling dtc and deleveraging through the licensing deals that we saw just the other week. >> right. and it's just -- suddenly becomes a really complicated story. we work for comcast. comcast is a pretty clean story. people want broadband. they obviously are pure content, and i don't know. i don't know if they can hold. this is going to be a very rough story if the wells fargo scenario plays out. >> yeah. >> steven cahill really put the kibosh. >> lower ebitda and static multiple. >> this goes from being one of the possible great performers

for the year, springboard, to making it sound like it's going to $8.70 and you got to be really careful. it was a brutal downgrade. it was the first thing i saw this morning, and i said, ouch, this is bad. i don't know if i want to go to the knicks and sit courtside. >> yeah. they're not alone in that boat. >> no, they're not. >> it's in sharp contrast. >> the media has been terrible, carl. >> sharp contrast to the netflix print the other day. opening bell in a few minutes. as we said, rob gronkowski is going to join us at post nine. don't go anywhere.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. some of the news this morning, amazon and irobot terminating their merger agreement and as a result, irobot is going to cut a third of their workforce. founder stepping down as ceo. >> this was a major botch. irobot, looking back, probably wishes this never happened. good for amazon. they got lucky here. it's like dupont got lucky when they were trying to buy this company out. it was like, wow, i hope they

don't get to do it, and the authorities blocked it. it's not consequential to amazon. if you've been in irobot, i think you haven't followed any of the discussions of what's going on. this was a doomed deal. europe can be much more harsh than we can. it seems strange. >> you don't think it alters the conversation about regulatory approval here on other deals? >> no, i think it depends on whether justice has it. justice is a little more savvy than the ftc, which is a little more naive. look, the guy who runs justice is a heavy hitter, paul weiss. the person who runs the ftc is a great student. even professed to be a studying, a student. >> yes. lina khan was on "squawk" this morning, sort of outlining or framing their look into a.i.-related -- >> look, i don't think there's anything wrong with making sure there's guardrails. i think jensen huang from nvidia would say that.

i do think that the difference -- when you have someone like lina khan at the ftc, you should be thinking about the way the president decided, you know what, we're going to -- debra granholm -- we're going to pause. i think a lot of america is like, wow, okay. >> do you not have questions about microsoft openai and what the relationship is is there? >> i think that they are all going to try to bring down price for us just like they did with amazon web services. i care about price. azure, amazon web services, they have cut the price. i think the average citizen is going to be able to get a.i. because of the competition. where she's wrong is she doesn't understand business. she understands textbooks. get andy jassy here. all he will tell you is, our goal is to make it so the consumer does better. copilot is killer.

they're going to keep the price down if someone else comes in. price is what america wants. >> let's get the opening bell here. at the big board, it is sports betting company flutter entertainment celebrating its dual listing. rob gronkowski is going to join us in a few minutes. at the nasdaq, it's bottomless closets, a women's job empowerment nonprofit. jim, to your point about a.i., and microsoft, our copilot sign-up is going to be one of the most important numbers we learn this week. >> yes. i think amy hood, the cfo, will give you a copilot figure, i hope talk positively about what the consumer might want too, and that's part of the thesis of why you got to stay long microsoft. you have to stay long microsoft. you have to. amy is fantastic cfo. i've known amy for i don't know how many years. she's the best of this lot of cfos, and i think she'll tell a

very good story. i think she's very bullish about the prospects. sometimes she's very circumspect, but i think this a.i. is so -- copilot is such a strong product. they have a lot to talk about. >> as we watch flutter ring the bell, what are your thoughts about -- you're still bullish on the business in general with shares available here now. no new capital raised. >> i will say, they had 51% of the sportsbook, so, yeah, you got to be enthusiastic about it, and i think one of the things that's so exciting about this period is you're seeing a lot of intragame, a lot of people are following this morning ever, and i think gambling is one of the reasons why the ratings are so good. you got to stick with it. i do daily fantasy. i like that, but if you have 51% o. sportsbook, that's monumental, and these guys, you know, hardly see them as promotional as the others, but they do a very, very good job. >> so, you don't think these ratings that we're getting out of these postseason games, for

example, it's not an accident? it's about engagement that is stickier for a reason? >> oh, yeah. i just wish the players would not be as excited about it. i think they can't resist. i think these sites are remarkable. i think if you had every state doing this, look, it's public. it's taxed. it's really a very big positive, and i think this outfit, yeah, i like this outfit. their numbers are terrific. their numbers are really terrific. they have tremendous growth, and i think people should recognize that their growth is organic. it's really -- they're bigger than draftkings. that matters. >> yeah. ticker flut. we'll keep an eye on it. >> i think the gambling -- i have jason robins at draftkings is doing a remarkable job. if you don't go to the sites, you don't know how exciting they make the contests. maybe just, i don't know, there's pretty much you can bet on anything, and i do think that, by the way, just to be clear, if you're in a legal state, it's legal.

i know that my wife says, you're not allowed to do this or that. i say, it's legal. but she doesn't understand -- i'm rooting for deebo samuels. i need him to score. people out there have to understand that this is so much fun, but these guys, number one position in the u.s., q4 2023, sportsbook, took 51% share. to date, fourth quarter revenue up 50%. this is a powerhouse company. quarterly revenues increased 26%. i like this deal. >> we can't wait to talk to ro in a minute. dow is being led by ibm again and salesforce right behind. >> ibm's quarter was really monster, and ibm really does have a great role that they can play in a.i. you know, look, if you're connected with a.i. in any way, it's moving things up. salesforce has terrific a.i. that's their -- you know, they've got this einstein product, being asked trillions of questions.

i know a.i. seems hype, hype, hype, but there are a few companies. we had servicenow on last week. >> we're moving beyond the picks and shovels, are we not, jim? >> i think you're now in a world -- i get super micro tonight, tremendous a.i. you're seeing real benefits if you use it. i think that there's so many use cases where it just makes a lot of sense, and i think that we're still not -- i know that jensen will say, look, it makes -- jensen huang, ceo of nvidia -- it makes a lot of sense, and you'll make people more productive. he is not of the belief that there's going to be a lot of layoffs. so far, there hasn't. it's made people more productive. i wish the banks would talk more about a.i. the consumer products did not talk about it. but other than tech companies really do talk about it. >> yeah, as for layoffs, they're anecdotally, again, lockheed is a good example today, 1%. we try to track them as closely as we can, jim. over the weekend, goldman, jan,

sticking by their call for a march cut, and one of the lines in the report was that the labor market may start to issue clues as to why you would want to cut sooner rather than later. >> the untold story, i was trying to figure out through all the different websites how many immigrants there are and whether people are going to look the other way on the green card issue. this is a very tricky issue for employers, to be sure, but i think they're going to put in living wages. i think the immigrants are going to put a lid on wages. we can ask the labor secretary. this is way too third rail, but we have had a lot of immigrants come in, and unfortunately -- i hope they get the minimum wage, but unfortunately, there's a lot of companies that pay less than you think and jobs are full. >> how about this piece about banking pay bonuses? down again, and it stings this time says "the journal." flat is the new up. >> you got to be careful when you say "stings" because they make so much more than everybody else. i understand. rents have been down for six

straight months. there's a lot of things going the fed's way but not enough yet. we have disinflation. no genuine deinflation other than at costco. >> three troops in jordan, jim, worries about the red sea. >> everybody asks about what it's doing in terms of traffic. norfolk southern had bad numbers last week, and some people felt they're not getting the business they used to. i don't know. >> got three downgrades of norfolk today. >> geez. the long knives are out for norfolk. i thought that was way too negative. i don't think they're nearly -- it's really as dangerous as people think. i like the transports too. lockheed martin is incredible. northrop grumman price cut. there's a lot of people betting it's going to come in and that's the end of the ukraine spend. if you're political, and i don't offer political advice on this. >> it's hard to read. another policy question, jim, is the border. the president's comments on

friday night that if he had emergency authority that he doesn't have, he would use it on the day he signed the bill. are you watching the rails through that lens? >> i'm looking at everything through that lens. i think you have to. i think it's an untold story. you -- we were paying above minimum wage in new york. forget that. forget that. i mean, you have to hope that there are people who are not -- who are willing to play by the rules and not offer $12 instead of $18. it's around the country. minimum wage is back and means a lot, because the immigrants want jobs, and i think that's an untold story too. every time you mention immigrants, i wish it weren't hot button, because something has to be done, but right now, we have 1.3 million people that i believe came in last year and 1.3 before that. more people came in last year than in four years of trump, and they're going to work. and that's what i think is going to keep wages down. >> jim, lot of news on boeing. we got some max-9s back in service. this report that united's chief

went to toulouse to talk to airbus about, maybe if we don't get the tens, could we work something out? >> there's no planes. that's a nice thought. maybe they want a discount. if airbus had planes, believe me, you wouldn't have a war between these two. they don't need planes. i know united wants -- forget it. it's a nice thought. boeing is still in the driver's seat. why is that stock not at $170? because they have the planes. >> and you got ryanair saying, hey, anybody doesn't want their tens, we'll take them. >> that was a great interview, by the way. come in early enough, you get some really cool stuff. >> i know you were tweeting early this morning about phillips and sleep apnea. fda. >> you have to understand. this is sleep apnea, it's a duopoly between phillips and resmen and mick ferrell had great numbers to begin with. the stock was down, because even though people taking glp-1 are

using it in conjunction to resmed. go buy resmed. >> this philadelphia court. that's the biggest penalty yet. >> byer bought a company that could sink them. monsanto is the gift that never stops giving you downsides. terrible. terrible. terrible buy. >> as for some sell-side research, jim, got an upgrade of american over at citi. they go to buy. >> they have the best upside, and the stock had been down basically where it was during the pandemic. i think that deal makes sense. my favorite -- how much is american express up? that was the one that was just so much better than expected. oh, opportunity. stock was down. they had -- their multiple is going higher. american express had the best quarter so far this year. best guide. i'm sorry. best guide. >> yes. >> steve squeri -- i'm listening to that call, like, are you kidding me?

really? >> capital one's comments got overshadowed because they had positive things to say about real wage growth. >> capital one is such a great lender. i know people say they charge too much, but obviously, they make it so a lot of people can get credit, and then people say, listen, people default on it, but if you take a look at that chart from 2000 to now, other than a big dip in 2008-'9, then they came right back, and they got overuse right during covid, but a 20-year chart on this thing shows you that fairbank has been able to figure this out. really smart guy. don't mess with him. he'll find your phone number and tell you what an idiot you are, but he won't use that word. >> big piece about lilly. they quote an analyst saying that the sane among analysts is jbl. just buy lilly. >> i'm not going to disagree. huge position in my travel trust. one day, there will be enough mounjaro in new york city, but right now, it's so in short supply.

it's short supply everywhere. and north carolina plants, they can't get them open fast enough. i know that, look, there's an issue here. there's always going to be an issue. are there problems? who will pay for it? all i can tell you is that when you have a product that you can't make enough of, you're going to be able to make a lot of money >> they say zep bound is likely tb the best-selling drug of all time. >> it will be. make you put them all to be the, but it's going to be the number one drug of all time. blood pressure is unbelievable. too much drinking, take that, they'll never get that passed. they'll never do a study on that. but this thing is just -- it's not a fountain of youth, but it's a fountain of hypertension and heart. and that's why everyone's going to pay for it. hypertension goes down dramatically and your heart risk goes down dramatically and that's what medicare wants, and that's what the system wants. they'll pay for it. >> tesla holding $185. we got capex guidance above $10 billion. street is slightly below that. >> it's at a level where people

are saying, let's take a stab at it. i drove a rivian on friday. holy cow, the rivian is cool. it's cool. >> it's really cool. >> you know it's cool. >> super cool. >> yeah, it is super cool, but you're not endorsing it. i found something you're not endorsing. >> that's a first. >> you're the best. >> rob, welcome. it's great to have you. it's been a while. good to have you back. >> it's been a while. thank you guys for having me on. it's a pleasure to be here once again. the atmosphere here is just fantastic. it feels like gameday right now. >> have you slept since i saw you yesterday? >> yes, i was actually -- last night, i was at the game in san francisco doing the preshow, post show. >> you were great. >> it was great, and we just ended, you know -- that was the last one of the year, because we don't have the super bowl this year, and that was my rookie year, so i completed a rookie year, and it went very well, and i'm just proud to be on that panel with those guys doing the pregame show, and then i took a plane right after the game, landed and came right here, so i'm on about three hours of

sleep. i got about two more hours left in the tank of fuel, and then i'm going right back to bed. >> by the way, congratulations. it's going amazing. talk about this. we have had you on many times to talk about the phenomenon, but this is sort of a moment, isn't it? >> this is definitely one of the coolest moments of my life. i'm actually an ambassador, and i represent fanduel, which is flutter's -- one of their big biggest brands here in the united states of america, and today, it's flutter's big day, the new york stock exchange is finally welcoming flutter from london here to the u.s. and today is the first day it's opening here on the stock exchange. so, i'm just glad to be a part of it. i'm glad to be their number one ambassador. we do a lot of cool campaigns. i'm sure you've seen our commercials. i'm doing the kick of destiny before the super bowl this year. last year, i missed, but i missed on purpose so i could have redemption kick. so, everyone pick that i'm going to make it because if you pick that i'm going to make the kick

this year for kick of destiny two, you get a piece of the pie, and the pie is $10 million in bonus bets, baby. >> wow. all right. >> you see him on the motorcycle in the desert? >> i've watched his career ever since he came on my show when we went to san francisco and you were so kind to come on. which one do you take? the line is very tight, san francisco-kc. >> what is the line? >> kc's getting one. >> i think that's appropriate. i mean, it's going to be a great game. it's a super bowl rematch. they played four years ago, four, five years ago. >> 2020. >> yeah, 2020, and san francisco was supposed to win the game but kansas city came through, so it's a super bowl rematch. it's one for the ages once again because san francisco, they have been to the championship, nfc championships, plenty of times. also to a super bowl. but they haven't won it all et, and kansas city, there's a lot of talk about them, that they couldn't do it again. you can't repeat two times in a row. it's really tough.

they almost have a dynasty going if they win. i'm sure they're going to start claiming they have a dynasty. there's big implications on both teams. it's going to be a great game once again >> you've got someone coming to the booth next year that we can't wait for. how successful will tom brady be? >> tom brady will be just as successful in the booth as he was on the field. the guy knows the game of football like no other. he can break down a defense at any given time at any given moment, even during his sleep, and then on the offensive side of the ball, he knows what player is going to do what, what guy is going to be open at what given time, where to throw the ball. he knows all the good stuff about the game of football and it's going to be great that he's going to get that insight on tv for fox and he's joining his, you know, his exteammates, myself and julian edelman as well, once in a while, as analysts. it's going to be so much fun. it's great to get the band back together. >> and the tv stuff is just practice, right? the mechanics, the timing, that kind of stuff?

>> yes, you know, you got to get used to it, and the tv stuff is live. we strive when it's live. fourth and goal, you only get one opportunity. we love to be under pressure as athletes. that's when it brings the best out of us. so you got to also practice as well. practice is key. you got to prep in order to be ready for those situations >> talk about how active are you when you bet? how do you tell newcomers how to do it? >> what i love about fanduel and flutter as well is that they're all about gaming. they're the number one online sports betting company in the whole entire world and they love to do it responsibly as well. so, you want to bet responsibly. no doubt about that. you don't want to be putting your whole check on the line, even though some people do and it gets really intense but that's not the way you're supposed to do it. do it responsibly, and it intensifies the game that much more. i remember i bet on an nba game last year, and i'm literally yelling at the screen every second for everyone to shoot a three and make it, so it just

intensifies that game, and you're just so much more into it. that's what i love about the aspect of it as well. and fanduel, they're just number one, so if you're going to make a bet, do it at fanduel. >> i happen to love daily fantasy. i think it's one of the most exciting things in the world. i got to ask you, do i take kittle or kelce? >> man, so, how does it work? what do you mean? the draft already happened in fantasy. are you talking about next year? >> daily fantasy on sports, it's so much fun. >> daily fantasy. >> it's so much fun. >> i'm going with travis kelce in that situation. george kittle is an unbelievable tight end. he pancaked aaron hutchison and that's beastly to do as a tight end. to pancake a defensive end. that's why that team is in the super bowl, and tight ends are transitioning, transcending the position. i mean, you got to have a good tight end now to reach the super bowl. george kittle, myself over the years, travis kelce, it's just

known that you have to pay these tight ends if you want to get to the super bowl. but travis kelce, on the other hand, he's the best receiving tight end of all time. he showed up the last two weeks. he's putting up numbers, and he's going to be ready to go. he's already proved -- he's already shown that he can play in big moments. he's going to probably be the best guy to take fantasy-wise. >> do you ever think that mahomes could challenge brady's g.o.a.t. status? >> if anybody can challenge brady's g.o.a.t. status, it would be mahomes. he's been to four super bowls and he's the youngest to do it that quickly. so, mahomes has a long way to go, no doubt about it. he's an unbelievable player, but to reach tom's status, i mean, a lot of things have to go right. i'm not going to say he's going to reach it, but if it's going to be anyone, it's patrick mahomes. >> finally, a question about you

and your brand ambassadorships, aarp -- i'm sorry, usaa. >> yes. >> flutter. how do you choose what to be associated with? >> you know, i love to choose things that i truly believe in, and what's fun as well, and being here with fanduel, they're fun. we're doing the kick of destiny number two. i love training. i love, you know, activities, and they got me kicking. that's fun. usaa, it's fun doing the commercials, shooting them and me trying to get in so i can get the insurance, even though i never served or my parents didn't serve either. i love the fun aspect to it. i love the troops as well. usaa all has to do about, you know, with our troops and our military. i'm always giving back to the military. without them -- they're true heroes of our world, you know? of the united states, and without them, we wouldn't have the freedom to be here right now. i wouldn't have had the freedom to go out there and play the game of football. those two just align with my brand so much, and i love being a part of them. >> belichick not coaching, huh?

>> belichick, you know, not coaching, which you know something? i think that's happening for a reason. i think coach belichick needs a year off. he can go back into it next year. the guy has been coaching for 50 years straight, and coaching is stressful. 15 hours a day. it's great to see him take a break, you know? if he's going to take a break. . take a year off and enjoy your time go find some things that you love to do and then come back next year, coach. everyone wants to see him coach again, but some time off is probably good for him. >> rob, good to see you again. congrats. get some rest. >> thank you. i have about an hour and a half left in my tank and that's -- i have to fill it back up with a little power nap. yes. you guys are the best, man. thank you for having me on again. >> come back soon. >> the kick going right through the uprights. >> rob gronkowski, take care. >> check out bonds. the data today is going to be light compared to the rest of the week. we'll get some numbers, mostly shaping up on wednesday with adp, some productivity, jobs

number on friday, 10-year 4.11. be right back.

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market definitely on the hunt for more examples to add to the ai trade, jim. adobe is going it lead the s&p or the nasdaq at least this morning. >> their fire fly product. my daughter says i cannot believe the ai. how great it is. that's another example. it's incredibly powerful. >> meantime dow is up 41 to start a busy week. don't go anywhere.

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jim, what's on "mad" tonight? >> gronk. >> no sorry. super micro and nascar. nascar will be good. you know, america loves gronk. >> they do. >> you see why. >> exactly >> we'll see you tonight. "mad money" at 6:00 p.m. eastern time. sofi one of the big gainers of the morning. we'll talk to anthony knowdo. don't go anywhere.

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welcome to another hour of "squawk on the street." i'm carl quintanilla with leslie picker and mike santoli live at post nine. sara and david have the morning off. busy week taking shape that will involve macro prints, fed decision, lot of earnings, mega cap tech will follow and geopolitical tensions with oil touching 79 overnight. >> markets in wait and see mode. 30 minutes into the trading session. there are still some big movers we are watching starting with amazon terminating its planned acquisition of irobot sending shares of the roomba plunging down 10% right now. irobot saying it will lay off 31% of its staff and that its founder and ceo would step down. keep an eye on tesla out with its 10k report filing saying it

expects capex to top $10 billion and see 8 to $10 billion in the following two fiscal years. the shares up a little bit as well. shares of sofi rallying after swinging to a profit in the fourth quarter, revenue jumped by more than a third as the company added to over half a million new members. sofi's ceo anthony noto joins us to break down the numbers and give us the outlook of the company and macro environment and state of the consumer as well. >> investors getting ready for the big week. santoli has been looking at the dominance of quality names and the rally, the premium placed on them. >> it explains why we're here, why the s&p 500 is at 4900, why we're at 20 times forward earnings. it gets one layer below the clustering of attention on the mag seven. it's part of that. it's adjacent to that. quality stocks, this will be defined as strong balance sheets, high returns on equity, wide profit margins, predictable earnings growth, the stuff you think you want out of blue

chips, vastly outprepared and beyo just tech. berkshire hathaway qualifies. it's also at the upper end of its price to book value range over the last 15 years. it shows you people are paying a premium for the perception of not just quality, but predictability. the question i think now is, are we -- is that a defensive tactic or is it something that says, you know, we actually think this can persist in a good economy. i think it reflects mistrust of the macro to some degree. it's also fascinating because you see here the premium of the quality etf relative to the s&p 500 at a high is that it's something that the bulls and bears are on board with. i get a little bit nervous when everybody agrees this is the way out. >> at this point how much of the s&p 500 is considered quality, given just the recent out performance of some of the those movers. >> you've seen estimates it's almost like 70% of the market cap is essentially. that's why some say we can have

a higher valuation on the index and why it's less cyclical. we'll see. anything can be taken too far, but it's related to this do we broaden out or not trend if we get more comfort with how the economy is going persist in here. >> we're going to wrap up january in a few days. >> yeah. >> and there's been thoughts about the january effect over the weekend. >> yes. so that whole january indicator, i saw work that says we didn't get the santa claus rally the first five days weren't positive but if january is okay maybe you kind of offset some of that not too caught up in that, but i think the market is pretty well situated in terms of reacting well on good news. it's taken credit for a lot, i think for a soft landing, easier fed and we'll see if we get it all. >> all right. as wei said it's shaping up to e the busiest earnings season. results about a third of the s&p is in. almost 20% is reported so far, including five mega caps this week. microsoft, apple, meta, amazon, alphabet.

let's get you set up with piper sandler's chief strategist who has an s&p rating of 4950 and joins us this morning. how do you gauge -- >> good morning. >> the results we've gotten so far? >> from earnings or the market year to date? >> from earnings? >> from earnings? there's a comcouple ways to look at. we look at earnings and guidance. i think guidance is typically where you want to focus. at the beginning of every quarter we put out an earnings risk screener and the companies that we believe that were most likely to miss thus far, i think we've seen 75% miss with a median earnings miss of about 20%, so, you know, i think it's bifurcated. some companies with great reports have beaten, some of that coming from pricing, which is still a lagging story, so i think it's been mixed. expectations of the s&p 500 as we sit here today, are for 2024 at about $242, which is the lowest they've been over the last year and a half.

>> do you believe that any hopes for a bond rally have started to flatten out? >> you know, i think that's going to be data dependent. i think the market is in a show me mode. two and a half months ago when everyone was tripping over themselves talking about how high yields were going to go, we got some soft macro data in november and then again in december in payrolls and pmis and then good inflation data and then we had the powell presumably pivot, so we had all of the stars aligning for a bond rally at a time when people were worried about yields. i don't think we have that same sentiment today, and i think it's going to be a show me with the data that's going to drive yields higher. we think yields will end lower than where they are now, but it's going to be on the back of softer data from inflation and macro. >> michael, we were just talking in the prior segment with morgan stanley here about kind of the interplay between quality and

uncertainty and the fact there was so much uncertainty in 2023 and drove up some of the high quality names. i'm curious your thoughts in terms of 2024. do you feel like we're in a more uncertain environment currently given what's going on abroad in china, middle east, geopolitical tensions and the like or because it seems to be now common the market is pricing in we essentially gotten to the soft landing place that there is more certainty and, therefore, quality won't be as big of a part of people's portfolio in 2024. >> yeah. when i speak to clients, there's certainly a lot of things to be uncertain about, but none of those issues are really front and center and currently creating a lot of fear in the equity market and the two variables that did do that over the last two years, inflation and the fed, the market has largely priced out that risk or that uncertainty. so that's what gave us that big

rally in november and december last year, that the fed is done and they're going to cut rates several times this year. but, you know, what has not changed going back to earnings is the earnings estimates and the earnings outlook. we've not seen a sharp improvement in earnings estimates from the bottom in the equity market in october of last year and that's going to continue i think to weigh on some of the more riskier lower quality names in the equity market, particularly if you don't have bond yields falling lower at your back. >> i guess the question is, michael, can the market live with somewhat of a downward revision to forward earnings estimates, let's say with the second half of this year into next year, because that's the normal course of things. typically they start high and then go lower. or do you actually think that it's going to manifest in, you know, weaker prices across the board? how is the market going to be able to try and metabolize all that? >> sure. on an average year estimates

fall by about 6% from where they start the year. can the market hold in there? that's exactly what it's been doing. tech is the only sector, you know, that's surged to an all-time high, and that's true with respect to earnings as well. given how big the weight is in the mag seven or in the growthier areas of the s&p 500, specifically, yeah, the market can hang in there. where we're focused more with clients is okay, that's fine for the market call, but you all have to buy stocks and position and try to beat the market. where do you want to be and where do you not want to be. that's why we still like quality coming into 2024 after it being our top pick for positioning in '23. >> finally, michael, within the mag seven, is it fair to characterize the ladder with tesla at the bottom and google and meta at the top? >> yeah. in our -- we did a report a couple or a week ago and last year, when we came into 2023,

there was, you know, the market was trading very -- in a very macro way, so, you know, we saw all of these stocks take off after getting punished in 2022. i think we're going to continue to see much more differentiation within the mag seven. i.e., fundamentals will start to matter more than the macro backdrop for these stocks. we like google and meta. those rank most attractively on our londs fundamentally driven -- long on our fundamentally driven models. don't show up as concerns in our short models. tesla has ranked both poorly in our long model, which looks for quality, profitability, lower risk, and high free cash flow yields and ranks poorly in our sell model which looks for accounting irregularities. >> yeah. it's been on some lists of earnings quality toward the bottom in recent months. appreciate that. michael at piper. the fed also front and

center this week with a rate decision and powell's news conference on wednesday. policymakers expected to hold on rates, but open the door to cuts by removing the tightening bias in its statement. let's bring in asset management chief economist dean maki joins us on the cnbc news line. dean, if you lay it out there, it feels like the eat whatever you want and never gain weight economy, right, growth better than anticipated, inflation coming down, faster than the fed had projected, and now the market position for the fed to essentially formalize an easing bias, can we have all that come wednesday? >> yeah. i think it's sort of the best the fed could really have hoped for at this point. they've wanted inflation to come down and thought it might take a lot of pain to do so, but growth had sped up, rather than slowing down, accompanying that to that lower inflation. i do think the fed is in a very nice place right now. >> and so how do you think in

practical terms on wednesday the fed will try to convey the message of its current stance? i mean, you know, a lot of fed officials, of course, don't want to be too proactive saying we did it, inflation is taken care of, yet they still have a tightening bias and the markets are somewhere around 50-50 for rate cuts beginning in march, so what's powell's job on wednesday? >> so really i think powell's job is to keep the market roughly where it is. he doesn't want to -- the market to fully price in a march cut or price it out either. what the fed will do is take away the tightening bias, they won't have a particular bias at this meeting. i think he will just be cautious and talk about how they're going to respond to the totality of the data. they're going to be data dependent going forward. he really wants to keep their options open. >> i suppose in this instance, the data that matter really is just inflation at this point? i mean it seems as if we're past

the time when they were targeting other secondary influential factors that would get inflation, they thought, where it needed to go, correct? can we have, you know, 3.1% real gdp economy in the fourth quarter if that's what we really had, and still have inflation two the right way and the fed say we might back off? >> i think it's an open question at this point. you know, the fed's models tell it that policy is quite restrictive right now and that's why they're thinking about cutting rates this year. on the other hand, the economy is not acting like the fed is restrictive right now. economic growth has been speeding up, not slowing down, and, in fact, if you look at the past, when inflation comes down, that tends to be accompanied by strong economic growth, not weak growth. and so the risk for the fed is if they do what the market is saying and cuts multiple times this year, five or six times like the market priced in and the economy is speeding up, that

could tighten the labor market, cause wage growth to pick up and inflation problem down the line. i think they're going to be a little bit cautious about cutting aggressively this year. they want to see some evidence that policy is actually slowing the economy down, and we haven't really seen that in any significant way so far. >> no. certainly not. dean, thanks so much. appreciate the time this morning. >> great. thank you. as we head to break, here's a road map for the rest of the hour. the big bet on america's gambling boom. fanduel owner flutter makes its debut. tesla kicking off its cybertruck tour in china. we'll head live to beijing. >> shares of sofi soaring on the back of its earnings. anthony noto will join us. "squawk on the street" is back after this short bak re.

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what i love about fanduel and flutter as well, they're all about gaming and they love to do it responsibly as well. bet responsibly. there's no doubt about that. you don't want to be putting your whole check on the line, even though some people do, and it gets intense, that's not the way you're supposed to do it. do it responsibly. it sbesintensifies the game tha much more. >> rob gronkowski talking about

his partnership with fanduel and the growth of sports betting. flutter listing on the nyse today calling it a, quote, pivotal moment. our contessa brewer is here at post nine. >> thank you for being here. peter jackson, ceo of flutter, you were standing there at the top ringing the bell. what an exciting morning. here's my question, if you're number one in market share, if your revenues are growing so substantially and you came out with a trading thaupts showed that, why does it matter? >> we're very excited to be launching on the new york stock exchange. i mean, u.s. business, the fanduel business, has been growing enormously in the last few years. to be able to bring the opportunity for u.s. ambassadors to buy fanduel and also buy international business, is something we wanted to do. we're delighted, i was delighted to ring the bell this morning. >> before i came up on set, i checked where the stock under the ticker symbol flut is trading, looked like it was about 208.

what are your expectations for the way that this excites u.s. investors, institutional investors, but also, i know you've been missing out on a big share of earned media that draftkings gets because it's publicly traded. >> that's exactly why we wanted our stock listed here, to take advantage of some of that media coverage. from our perspective, you know, i met a lot of domestic u.s. investors who have been wanting to invest in flutter. the high levels of liquidity on the new york stock exchange in comparison to the european exchanges is something very attractive and we want to benefit from that. >> right now this is your most important market, the u.s., for revenue, for growth. when does it also overtake the rest of flutter's international business, european business, elsewhere, in profits? >> international businesses have grown revenue between 5 and 10% historically. it's been a solid performance.

we've added to that with m&a that we've made in time. here in the states it's all about growth. clearly we were the first business to become profitable last year and we're the number one operator here in fanduel. i think from our perspective, where there's opportunities to keep growing fanduel and international businesses. >> i'm curious about seasonality. i assume football is far and away the biggest revenue generator, but there's more frequency in basketball and baseball. i wonder if that smooths out over time? >> q4 and q1 are the most important for us. everyone knows the fanduel business is synonymous with the parlay product, particularly relevant for the football and basketball, so when people can play those same game parlays, that means that our q4 and q1 quarters are much bigger for us than the other quarters in the year. outside of the state, this is where you get the benefits of our diversification, of course, you see horse racing, soccer,

all the other sports in the rest of our markets. >> peter, i'm wondering what you think the ultimate size of this market is, domestic sports betting, and whether, in fact, the largest first movers have an ongoing advantage? i try to think of other network effects type businesses. this doesn't necessarily mean you need more users to have a better experience as you would for social media, for example? >> i think from our business, you know, data does help us, right. when i think about the amount of bets we've seen flowing through our systems in the lions game last night, it means we can get sharper with our pricing which means we can offer even better value to our customers. it allows us to offer a broader range of markets swell that we can be more accurate with our pricing on. the data helps us there. we're like other digital businesses. the economics flow disproportionately to the scale player because of the operating level we get into our business. we are a long way in front in comparison with other operators in the market.

our technology, you know, we get a lot of advantages because we leverage our european teams and their expertise to help us here in the states, and i'm sure that we can stay ahead of the competition. >> when flutter came out with a trading update, it was clear luck went in the way of the customers in the fourth quarter to the tune of $300 million i think. draftkings also reported a similar hit. i'm just wondering about the super bowl, now that the chiefs go back in it, the taylor swift effect, what are you expecting in terms of the game itself and what that means for the overall performance of the sports book? >> we gave $343 million to our customers in q4, so we have the u.s. economy. we know that the super bowl is going to be a big event. it was our biggest event, you know, last year, but actually, the game last night was the second biggest game we've seen. so we know that super bowl will be the biggest this year, we have no doubt about that. it's a fantastic opportunity for people, you know, to try and beat the book.

they can figure out, you know, who is going to score the touchdowns, think about all the different markets we've available and try to beat us. >> what's next? >> there's always things that are happening in flutter. the business never stands still. we just closed the acquisition of a business in max bets and then there's lots more growth opportunities in international markets. but look, the team here are very excited about march madness and, you know, fanduel is going from strength to strength. >> i can't get to march madness because i'm heading to vegas for the super bowl. everything in my head is about the super bowl and whether i will run into taylor swift. >> two taylor mentions. >> is gronk going to make or miss, right. that's the other question. >> well, i'm -- my bet is on make. you can't miss two years in a row. that would be too much. leslie i know is betting on the chiefs because that's her hometown team. >> my dad was like i put $100 on the chiefs last night and made 90. he is fantastic. that's the way to do it. >> we were just talking about

that. >> with fanduel. >> he didn't tell me where he made the bet. just said he made the bet. >> thank you for being here today. it was a lot of fun. >> thank you. >> the band and everything. >> oh, yeah. >> oh, yeah. not a taylor swift band but whatever. >> it's fine. >> up next, tesla kicking off its cybertruck tour in china. what's at stake for tesla as it tries to grow its footprint there. we'll head live to beijing after this quick break. stay with us. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly.

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tesla begins its cybertruck tour in china and getting a lot of social media buzz there ahead of this trip. eunice yoon joins us live from beijing with more on what's at stake for tesla. hi, eunice. >> hey, mike. the cybertruck is on display at the tesla store behind me. this weekend the company started showcasing the futuristic new vehicle in eight chinese cities including here in beijing. now, tesla continues to be a fan favorite among ev drivers here, despite the fierce competition by local brands. one of the criticisms, though, of tesla is that it doesn't refresh its models quickly

enough, especially when compared to some of its chinese rivals. for this cybertruck, tesla had not announced the cybertruck would come to china. elon musk said that would be difficult. one of the issues the regulatory environment, especially around trucks, but one point that was really interesting and picked up on by a lot of the fans is that name of the cybertruck in chinese avoids the word truck, so that's seen as a way for tesla, perhaps, to eventually launch the cybertruck here. guys? >> eunice, i wonder, aside from just sort of the names and what implications are, i mean, in the u.s., of course, pick-up trucks are the most popular types of vehicles. what's the case in china in terms of that ready kind of appetite for something that, you know, even vaguely looks like a pickup truck? >> right. it's interesting because here

you can't really get a pickup truck or if you do, you're not able to drive into the city, into the more packed areas, so there are a lot of regulations around it and that's why it's interesting that in the name, people, you know, people love to see these big cars, they love driving them, that's what they were talking about, everyone is impressed by the size, loved the look, talking about how it looks like an armored vehicle, but the regulations are such they don't allow what would be considered a pickup truck into the kind of more packed parts of thecity. the fact that it was called an urban traveling wagon, maybe not so catchy, but maybe could get you around some of the regulations. >> urban traveling wagon. we've got some country singers that may want to alter their songs out here. i wanted to pivot if we could to another story that's big news in china. that's, of course, the liquidation order from the hong

kong court of evergrande. what is the sentiment currently right now on the ground in beijing as it relates to this and how is it kind of the seminole moment for the property sect there? >> in terms of home buyers it's another big weight put on the property sector. people are wondering what does all this mean? i don't know. whether or not i should continue to go ahead with a purchase of evergrande. there are a lot of questions about what this means for its ability to finance its projects. the company's ceo has been trying to calm people down by saying that for sure they're going to deliver on these homes, they're going to be business as normal, as much as they can, but from an investor perspective from some of these creditors, i

was talking to one earlier today, they said one of the main issues at this point is whether or not the court decision in hong kong is going to be recognized by the chinese courts and will they cooperate with the hong kong decision because there's so many political reasons why the chinese government, which controls the courts, would not want to have what would be perceived as an outside decision being kind of forced upon the chinese system, especially when it could potentially create so much instability in the property sector, at a time when there's so much instability among investors and what's going on in this economy. >> finally, eunice, we had tesla earnings last week and as pafr the call elon musk said ev makers would demolish american ev companies without trade barriers. i wonder how that resonated or whether or not his calculus in china -- >> it was championed.

i was reading that a lot in state meadia. people quoting elo demolish the u.s. carmakers and one of the ways china feels proud they are pushing out a lot of this cars, but at the same time, several car analysts i speak to say this is something that u.s. automakers should be concerned about, as well as european automakers should be concerned about because there is so much over capacity over here when it comes to evs as well as other types of cars, and a lot of that is getting pushed out overseas. >> fascinating. appreciate it as always, covering a lot of ground for us today. eunice yoon in beijing. shares of sofi soaring. the company blows past estimates thanks to surging loan volumes. anthony noto will join us first on cnbc with his outlook for the fin tech giant when "squawk on the street" continues in two. ice works fast.

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welcome back. i'm silvana henao with your cnbc news update. political pressure is mounting this morning for president biden to respond to the killing of three u.s. troops in jordan. dozens more were injured sunday in drone strikes by iran-backed militants. white house officials say the president is now working through his options, but stress the administration does not want a wider war with iran. meanwhile, negotiators from israel, the u.s., egypt, and qatar agreed on a framework for a new hostage deal in gaza, a source familiar with the talks tells nbc news, the deal would see the release of the remaining american and israeli hostages in phases, beginning with women and children. that would be accompanied by a pause in fighting in gaza along with an exchange of palestinian prisoners. the deal will be presented to hamas today. kate middleton is out of the hospital nearly two weeks after

undergoing planned abdominal surgery. kensington palace says she will now take a prolonged period of rest, putting her normally busy schedule on hold. back to you. >> thanks. meantime elections around the world will be front and center this year. more than 45% of the global voting population will lead to the polls. our next guest has a new op-ed in the ft discussing why political leaders are so unpopular right now. rockefeller chairman rusheer sharma joins us this morning. fascinating piece. you look at 20 democracies all around the world and try to explain why their overall approval ratings are so low. >> yeah. given joe biden's approval ratings get so much attention here and rightly so because they're close to record lows, but if you look at the approval ratings of leaders across the developed world they're lower than even joe biden's approval ratings. there's not a single leader

across the developed world where the approval rating is more than 50%, and most of the approval ratings are trending down. there's something deep going on here as to why leaders are so popular -- unpopular around the world, and why so many of them are probably bound to lose their re-election bid. as i point out in the piece, normally being the incumbent gave you the advantage. 70% would typically end up winning elections as the head of government. in the last few years, only 20% of people standing for re-election have been coming back to office, so that's what's really going on out here, which is very unpopular leaders and most voters are deeply unsatisfied with what their choices are. >> it's easy to look at social media and the yelp effect where being negative sells and engages, but are you on the

lookout as a result of policy volatility around the world? >> yeah, i think that the big market implication of what's going on, given this, is that the temptation on the part of leaders is just to spend more, to spend their way out of trouble. typically in an election year, leaders tend to spend anyway, and i think in a year like this they are going to be even more inclined to spend because that's the easiest way they think of buying votes. the problem as you know, in many countries the budget deficit levels are very high today, much higher than they've ever been. we're setting up here where the politicians need to spend more, and yet you have the bond markets, you know, i think we start worrying about the budget deficits again. they faded as the rate cut euphoria set in. i suspect some time this year,

concerns about the wide budget deficits and what unpopular politicians will try to do to win their way back will be an important clash that's going to happen. >> so there's a direct correlation then, you believe, between incumbents with low approval ratings and the deficit spending that they tend to run up in their final year in office. so given kind of the overall mantra around the world, what do you think that means, and just to follow up on carl's question, particularly as it pertains to volatility as we get closer and closer to some of these key elections? >> yeah. i think the bond markets will demand a higher term premium for sure, in terms of the fact that once the disinflation trade fades and people factor in the 2% rate that they have, you know, as the fed's target, i think that rates just don't go back down like they did in the past in disinflation cycles.

it's possible that even in a recession this time the 10-year in the u.s. doesn't fall much below 3% or something. i think a much higher term premium what is the bond market is going to demand, and politicians i think are going to learn the hard way if they're going to try to spend too much, the bond market is going to revolt against it because the levels are so high. the deficit levels everywhere are so much higher. the u.s. is, obviously, exhibit a in that. >> if that's the cost, though, of this level of deficit spending around the world that in a recession, maybe we don't have inflation and yields go as low as they did in the past, is that an acceptable one, do you think, to the markets? it seems even as we've tried to find a new equilibrium with u.s. 10-year around 4 and around the world a little lower than that. >> yeah. but as i say that, we are finding a new equilibrium. given where inflation is headed now, in terms of, you know, back at 2% for now, i would say that,

you know, people are getting really excite the about how much more yields can fall from here. i'm not sure that yields can fall that much more, that the sensitivity has changed. much higher term premium is what i expect, but, of course, you know, there are many factors which determine what's happening in the bond market, but the u.s., i think, is really -- you know, this is where i think even the fiscal policy which has been helping growth in the u.s. is possibly under appreciated, but i think that really problematic cases for biden and other political leaders that the connection between good economic data and their political support has broken down. given where inflation currently is, given where unemployment currently is, you would expect that approval ratings to get a huge lift. it's not happening and it's not just the u.s., anywhere in the world, in the developed world, it's not happening. interestingly a nice side story here is that in emerging markets, leaders in many

countries are still relatively popular. there's still faith in the system, but i think that problem here is that given the problems of lack of social and economic mobility, a feeling of an unfairness in the system, this connection that you had between economic data and political support has broken down. >> yeah. several indicators are broken in many ways. it's a fascinating piece in the "ft." thanks for the time. >> thanks, carl. coming up sofi shares surging after reporting its first ever quarterly profit for q2 up 22%. ayitusthony noto joins us next. st wh .

sofi reporting its first profitable quarter surpassing analyst expectations that the company would break even. shares popping double digits on those strong results up almost

23% right now. anthony noto joins us. thanks for being here. big quarter for you all. profitable one. record revenue across the three businesses. solid profitable outlook as well. what are some of the key drivers that you think led to these results? >> leslie, thank you for having me on. you know, i would say the strategy overall has really come into play and delivered exceptional results for the quarter. six years ago we embarked on this ambitious strategy to be a one-stop shop for all your financial services needs. when i joined the company in february of 2018 we were primarily a lending in two products. today we offer not just four types of loans, including home loans, but we offer sofi money a modern checking and savings kgs, invest, credit card, insurance products and power 140,000 accounts through our technology platform we outsource to our partners. this quarter reflects the fact that financial services segment is now profitable and growing

quite meaningfully, the tech platform business is profitable with accelerating growth, and that's really the drivers of growth going into 2024 and less of the lending pieces. it was a combination of best strategy over the last six years being invested in and then coming to fruition in 2023 with record revenue of over $2 billion and record ebitda and actually hitting our long-term ebitda margins at 30%. as you mentioned gap profitability for the first time which we'll sustain in 2024. >> of course, this all comes against a macro economic backdrop that for a lot of lenders remains uncertain and you have a pretty conservative outlook for 2024, baking in a 5% unemployment rate, four rate cuts, fewer than the market is pricing in. what are you seeing in terms of customer spending trends, portfolio quality, that is helping to form your outlook for 2024? >> yeah. as you mentioned we did take a very conservative view on the lending part of the business for '24.

we are expecting 75% year over year revenue growth in our financial services segment and 20% year over year growth in the tech platform and no growth in lending because of that conservative view we're taking. we expect credit to normalize and seeing those trends across the industry as well at sofi, and so we're taking a cautious view there. in terms of underlying spending trends within sofi money, we had $1.6 billion of point of sale debit spending in the quarter, animalized at about $6 billion. it's up 3 x from a year ago an seeing strength within existing accounts but also adding new accounts so it could be misleading. in addition to that, we have been observers of the broader market dynamics. we've seen some levels of liquidity dry up in certain markets, in addition to that, the largest banks have seen an increase relative to 7 and 10-year highs in writeoffs, delinquencies and the provisions for losses among the largest banks were up 50% sequentially. we're bullish about our

financial services segment, growing quite well, 75% for next year and tech platform but conservative on the lending side. >> some of the macro stuff last week was about real wage growth rising again after two years of shrinking. is that starting to make make i felt within the metrics? >> we're not actually seeing an impact on spending. we are, obviously, seeing a normalization of credit back to pre-covid levels. that's where it's showing up on the spending side. that is still strong. the credit side across the industry as well as at sofi is normalizing. the unique thing for sofi in '24, 50% of our revenue will be from tech platform and financial services and 50% from lending. in previous years it was as high as 80%. we've game scale and profitability in those two segments just in the right time as we enter 2024 and concerns on the credit side. >> with the technology business in particular, we're nearly a

year out from the select regional bank failures we saw last spring. what's been the impact on your business as we think about the overall impact from those failures and the reshaping of the way the banking system operates? >> our technology platform services enable not just fintech companies to provide services through payment processing, core technology, but we're also enabling large brands that want to be in the financial services sector. the biggest surge is from traditional banks, the largest banks in our company 37 it's clearly a trend of them having to upgrade their core technology and processing technology so they have better real-time asset and liability management. having the real-time asset and management likt, we have through our technology platform is an advantage. i think some liquidity issues we saw in the spring of our largest banks were a direct result of not having that technology capability. so, we're seeing robust demand in our piece from the top banks

in the country, in addition to the other pockets of strength that i mentioned. these things take quarters, not months to get through. we're in the rfp process with a number of large banks. we were fortunate early in the year to win one small regional bank deal, but it's going to be answereded growth vehicle for the tech platform. >> definitely a space to watch. anthony, thank you for being here, ceo sofi on today's earning results. coming up next hour, phillips falling after halting sleep apnea devices in the u.s. after a settlement with the fda. we will hear from the ceo next hour on "money movers." dow down red, down 18. stay with us.

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let's get over to dom chu tracking the biggest analyst calls. >> let's focus on mega cap technology. starting with meta platforms, getting help from the team at jeffries. they raised the target price to 455 bucks. they keep the buy rating. they cited things like revenue

to highlight previous guidance from last quarter and the previous one. jeffries is reiterating buy rating on microsoft. the business software solutions cloud computing a.i. giant is also getting its target price raised to 465 bucks. it was 450. they cited like being the beneficiary of improving cloud computing trends and artificial intelligence. that's one million of the $1 trillion market cap club. the other one is apple. this morning analysts at barclays have reiterated their underweight or sell rating on the iphone and app. they cited things like what they view as lackluster iphone 15 sales with expectations it won't change with the iphone 16. along side overhangs from regulatory risks and elevated valuation compared to the s&p 500. those shares down fractionally three-quarters of 1%. leslie, back over to you. >> thank you. a quick programming note. don't miss my sitdown with citadel's ken griffin live from

miami tomorrow morning at 10:00 a.m. eastern. meantime, "money movers" begins after a quick break with former richmond fed president jeffrey lacquer. don't go anywhere. at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

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good monday morning. welcome to "money movers." i'm carl quintanilla with leslie picker on the floor of the new york stock exchange. former richmond fed president jeff lacker why the fed is pricing in too many rate cuts this are year. the number one retail analyst on the street, appropriately named matt boss, joins us after a year on the sidelines. he's turning bullish on dollar tree. he'll make his case ahead. philips getting hit as the new fda deal means it can no longer sell its sleep apnea machine. the ceo will join us to break down what's next. take a look at the markets. a bit of a tight range as we brace ourselves for everything that's headed our way. the macro data, the earnings onslaught, the jobs number, the fed decision on wednesday. >> it could be the busiest week