bipartisan aid deal for ukraine and israel. and boeing shares are falling after the company revealed a quality issue on some 737 max planes that could delay additional deliveries. it is monday, february 5th, 2024. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick with joe kernen and andrew ross sorkin. happy monday morning. let's look at what is happening with the equities at this hour. you will see red arrows. dow futures indicated down 76.

s&p futures off 8. the nasdaq down 16. of course, this is coming after the s&p 500 and dow and nasdaq 100 all closed at record highs on friday. if you look at the treasury market, this is interesting. jay powell speaking yesterday on "60 minutes" talking about how he does not see rate cuts in march. one more message to the markets about this and the markets are paying attention. you are looking at higher yields this morning. ten-year yield at 4.08. again, the idea that the rate cuts are not coming in seven weeks. that's the message from jay powell. new over the weekend, u.s. and uk launching air strikes on iraq, syria and yemen. keir simmons has more on what is happening. he is on location. keir, what can you tell us?

>> reporter: becky, good morning to you. the headline for cnbc viewers this morning has to be just no sign of a deescalation in the red sea and the gulf of aden. houthi rebel he s declaring the have the ability to interrupt the shipping lane there. that comes after the strikes you mentioned by the u.s. overnight and over the weekend, the biggest strikes against the houthis so far, 36 strikes against 13 targets the u.s. says. here in iraq, the night before that, here in iraq and syria, we saw an onslaught from the u.s. against the iraqi and syrian border targeting the iranian-backed militias. the border running along jordan

where tower 22 is located where the three u.s. servicemen and women were killed. b-1 bombers taking off from the united states to take part in the operation just as the bodies of those servicemen and women were arriving home. meanwhile, over the weekend, jake sullivan, the national security advisor, saying on "meet the press" there will be more strikes and not answering if the u.s. or the biden administration would actually target inside iran. that, of course, would be a major escalation. no u.s. president has chosen to do that. there are other ways in which this could still seriously escalate. the iranians, becky, putting out a stunning video effectively warning the u.s. not to target a ship in the red sea and the gulf of aden that is widely by experts considered to be a spy ship helping the houthis to

target international shipping. they put out the video saying don't target this ship. effectively, no u.s. president has targeted the iranian navy since president reagan. that would be a major escalation. secretary blinken will fly in that the region. he is arriving in saudi arabia to push for a cease-fire in gaza and trying to get some kind of a peace deal while the u.s. tries to push back iran on both fronts. >> keir, the idea of a cease-fire in gaza, is that the situation it would take to deescalate the houthis as well? they are all inter related? >> reporter: many people think that. the problem, becky, there is no sign of that happening. the reality is and folks reading over the weekend state you have members of the netanyahu government declaring they all

plan to continue with that offensive. the reality is that israel hasn't come anywhere close to managing to reach its self declared war. on the other side, hamas clearly wants a large number of prisoners released and it wants a cease-fire if it agrees to release hostages. that appears to be deadlock. the talks have made some progress, but i think administration officials would openly admit they are nowhere close to coming to a deal. one question with the houthis you mentioned in yemen is would they stop if there was a cease-fire? i do think, though, the deescalation around gaza would take the heat out a lot of the situations around this region despite the fact that, of course, ultimately what is happening with these strikes by the u.s. is we are getting a spotlight on just how extensive and deep the iranian influence

is in the region here. for example, in iraq and syria. iranian militias here vowing they are going to keep going. we hear of the attack on the base in syria where kurds have been injured. no word of u.s. injuries orr deaths there. >> keir simmons, thank you. senate leaders released the details of the $118 billion bipartisan aid proposal for ukraine, israel and the southern u.s. border. $60 billion for ukraine. $14 billion for israel. $20 billion to improve security at the border. it includes smaller pockets of funding for humanitarian assistance and war-torn regions and operations in the red sea and then taiwan. that demonstrates how much we are dealing with here. the senate proposal is similar

to funding the biden proposal from october. it adds $13 billion more for border security funding. the vote is expected on sunday. the bill will face a chilly reception in the house. speaker mike johnson said it was dead on arrival. the attempt to preempt the senator's broader foreign aid bill. speaker johnson denied yesterday that former president trump is pressuring lawmakers to torpedo the deal so he can continue to use the border as a line of attack in his campaign. >> that's on wednesday, right? >> wednesday. >> wednesday, not sunday. meantime, president biden won a landslide victory in the south carolina democratic primary. he will be awarded all of the 55 delegates. no other candidates will come close to the threshold that was

awarded to delegates. republicans will vote in south carolina on february 24th. that primary is expected to bring more attention than the saturday vote. early voting starts a week from now. nikki haley will make her last stand, if you will. the gop candidate nikki haley made an appearance on "snl." she appeared on the skit over the presidential town hall. take a look. we were going to take a look. this is our version of comedy. we don't have it. in the meantime, haley taking a shot at trump in tweeting out the clip. saying it was on after donald's bed bedtime. we will get you that clip in a little bit. nobody's laughing. >> i didn't see it. in the meantime, jay powell

speaking last night on "60 minutes." he addressed inflation risk and the time line for cutting interest rates. >> we want to see more evidence that inflation is moving down to 2%. we have confidence in that. our confidence is rising. we want more confidence before we take that important step of beginning to cut interest rates. >> he also addressed turmoil in regional banks and said there is not much risk of the repeat of the financial crisis of 2008. he said smaller banks could have to be closed or merged out of existence. boeing said yesterday this is -- not -- i don't know what this is for boeing. more work to do on about 50 undelivered and in this case, 737 max airplanes, potentially delaying near-term deliveries. its supplier, the same one,

spirit aerosystemaerosystems, d two misdrilled holes on fuselages. there are no immediate flight safety issues, but it believes it will perform re-work on the potentially incorrect positioning of holes on a window frame assembly. the spokesperson said the team member at spirit identified the problem and alerted his manager. there are challenges for the airlines because of grounded fleets. it causes a lot of maintenance issues. i'm not connecting maintenance to safety issues because these guys really do -- guys and gals, the airlines. it doesn't change it if your

plane has something hanging off it, i'm talking about experience that this can happen. something hanging off the nose and you see guys deplane and you watch what they're trying to do and they're like, you know, we'll get you a new plane. you don't just bring one over from next door. it has to fly in from somewhere. you are talking two or three or four or five-hour delays. that plane might come and that plane might have an issue. that's what is happening. >> 70% of the fleet? you try to replace it and there is no back up. >> i'm waiting to see if united buys airbus planes. has he made that decision? >> he has been talking about. if they do, they will not get the planes tomorrow. >> five years from now. >> they have never done it before. it is not good. >> it is a big issue with their

pilots because their pilots are trained on the boeing planes. retraining your pilots on a different plane is a different universe. >> it would be good -- didn't calhoun do some stuff at boeing? >> spun off spirit the airlines 15 or 20 years ago because they don't have control over the main they main maintenance usuaissues. how do you repair holes in the fuselage? >> spackle. duct tape. >> it's not that. >> when you join ed cnbc, were e still ge? >> yeah. >> for a time, we had the whole regiment here. can you imagine? you were supposed to make one

mistake out of six million attempts. you probably aren't hitting those numbers exactly. boeing is not either at this point. that was a difficult -- there were managers and they come around -- do you remember that? you don't remember it as well. it was during the welch days. there were officers. officers came in. that was -- if you didn't perform and in the bottom of the 10%, you got fired by general electric. i don't know if any of that happens anywhere. it is not happening at boeing, that's for sure. you stay forever. coming up, a busy week for earnings. caterpillar and mcdonald's in the next hour. the news just out from the white house. biden administration sending a high level delegation of treasury department officials to

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on this week's "squawk planner" we get december international trade numbers and weekly jobless claims on thursday. a busy week for earnings. we hear from caterpillar and mcdonald's and eli lily and ford. on wednesday, disney, puuber an

paypal. on thursday, conoco phillips. pepsi reports on friday. joining us to talk about the friday hot jobs numbers is grg branch from veritas and lorie ra range. lorie, i'm worried about the cuts. we have been saying it all along. it is hitting us over the head that we got ahead of ourselves there. how many will there be and when is the first one? how important is that? the market has shrugged it off and continued to hit new highs. why? >> you bring up a good point. can we make new highs if we're not going to get these immediate and satisfying rate cuts?

the answer is yes with the data being so strong and productivity growth which is so above expectations, but a leader in the developed world. i am still in the ramp we will get surgical rate cuts only in the second half of the year. given where the data are is no urgency to cut rates. this discussion will keep markets volatile. the other thing we have this week is a lot of fed speakers. this topic will dominate market activity this week and beyond. >> greg, we've had people on in the past and i said what do you tell your clients if they listened to you and all these new highs. they keep missing these. we had one guy on who actually said i tell them about the strength of my arguments that were totally wrong, but well founded. i say i had a good reason for

guiding you in the complete wrong direction. more new highs, greg. do you shake your fist at the markets because it is stupid for not doing what greg branch said it should do? >> no, absolutely not. that argument offers no solace to clients. you mentioned the names reporting this week. you compare that to the names reported last week, you will see a bifurcated ratings. the magnificent seven will have earnings up 25% this year. there will be little else that grows above single digits. that distinction was reported before last week's report. we were coming in with 70% of the s&p reported at 1.6% negative earnings growth. now we're at 2% earnings growth.

the key is finding those things where you can have your equity exposu exposure. i expect it to narrow around tech and cloud and secular tailwinds. magnificent seven is part of that. the semi worlds is part of that. i believe the multiples will not matter with the earnings growth and the sectors that are more exposed to the slowdown that is coming. i believe the distinction will be clear. that's a safe place to hide. that is what you have to do for your clients when you are as bearish as i am. >> your clients are saying, greg, i'm with you. i understand. this is a tough business. do they say -- what do they say you have done or advice you have given them that is great? if you have to hold your nose

and buy, this is what you should buy? we're almost at 5,000 on the s&p. i think you were talking about the three handle is where you thought the s&p should be. you are 1,000 points off. >> make sure we have the whole argument here. in 2021, the fed should come out of jackson hole and raise rates. in january of 2022, when the s&p was up 4,700, the s&p should be a at, 3,800. my clients were fresh appreciate y inging that. those pockets have been strong.

it has not been a cataclysmic event for clients. >> lara, i hear the jobs numbers that we're seeing -- i've almost given up on recessionary signals. when people throw in the towel and say there is never going to be a recession, i guess that is what people are waiting for over the last year and it never comes when you are looking for one. are there any signs of weakness that you see that are being masked for whatever reason these strong numbers and gdp numbers you are expecting? >> you are not alone. myself and others are expecting a slow economy. last year after you see the fed being the most aggressive that they have been since the 1980s were worried about recession.

i put myself in that camp. looking ahead, you have to squint to see weakness in the economy. a theme for the coming year is going to be the margin squeeze on banks and concern about the banking system. when i look at what could trigger the fed to cut rates, the data, as it is today, is not the trigger. the trigger could be some news about banks. at the end of the day, my forecast is a slower economy. as far as recession, i think the good news is today with the fed funds rate where it is and if the economy does start to slow, it means there is room to bring rates down. it is hard to be pessimistic, but growth where it is today is unsustainable. we have to navigate with the high valuations. >> do you know the date when the

yield curve inverted? how long? >> past. >> way past? it didn't happen. if the yield curve averts, you have supposed to have a recession. >> 18 months or something. >> 18 months. it depends where you look. we are coming up on 18 months on the three-year ten-year. >> doesn't work. it departmidn't work. it's not working. throw it out. it is nac, nfc. do the opposite of what people say. that's the only thing that works. lara, thank you. greg, thank you. we will touch base again. who knows where we'll be by then? no one thinks there is no recession. maybe it's time. >> now we'll have it. >> it sneaks up on you. >> bad timing for the election. when we come back, we will

have today's big watercooler stories. we talk super bowl week and taylor swift's big night at the grammys next. and senator mark warner will weigh in on the aid package and air strikes and much more. "squawk box" will be right back. black history month is not about excluding the contributions of any, but it is about lifting up the contributions of the people and also about the celebration of the long work and long struggle the by black americans who were even slaved in this country and the role they played in the making of modern america. black americans are america.

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no way. it's super bowl week? >> already. >> both teams -- >> have you not been on your draftking app? >> 49ers and chiefs arrived in las vegas yesterday. for the fans concerned that taylor swift might not maybe it make it to the game -- >> it's easy. she will get there saturday night. >> if her plane takes off on time and doesn't need maintenance. you think she is private? >> the japanese embassy is releasing a statement. >> no problem to make it before the kickoff. if she departs tokyo right after

her concert. she can make it. >> no problem. >> it is kind of cool because none of us want to disappoint our wives or husbands or partners, right? they're not married or anything, but people really -- the haters really want to blame any chiefs loss on the jinx like a taylor jinx. travis kelce knows that. he is a stud of all studs from the university of cincinnati. he wants to make sure he doesn't let that happen to this person he cares about. he is playing better than he ever did. >> if you bought tickets for the concert in tokyo, is there any part of you feeling -- >> you will not get an encore? >> the entire time, is she --

you are thinking, i have to get out of here. i have to get out of here. >> don't let me be late. >> i will say, i watched the grammys. guess who was not there? >> travis. >> yeah. >> you know who -- in l.a., they had rain. she did a concert. >> i know she goes all out. >> she tells everybody else you will remember this for the rest of your lives. the piano is water logged. >> i know. this is going to be on the minds of the concert goers. they will say is she going to make the plane? >> i don't think she understands the concept of mailing something in. >> i think you're right with that. >> i have my own problems with certain things about that whole situation. in terms of that, heshe is the ultimate professional of all time.

she takes so much pride. she does love the add adulat oi ion. >> she is the first artist to win best album of the year four times. in the acceptance speech, she announced the next studio album which will be released on april 19th. didn't waste the opportunity to get word to the fans. i was surprised travis kelce is not there. he's at the super bowl. he has to prepare for that. >> i don't think he was allowed. >> he is part of the team. she made it to a lot of games this year. >> i know. >> support your wife? >> the grammys, to me, honestly, everybody's going to win one. it's an industry. everybody is a grammy. everybody is in cahoots.

>> do you think the oscars are different? >> a lot of political things that go into the oscars. my son is an expert. i would give it to kilian murphy. it will be a lifetime award. do you really see -- did you see "holdovers." there is no way this is better than "oppenheimer." >> you have been told? >> my son gets them all right. coming up, the political stories to watch in the week ahead. we talk to john hope bryant and mick mulvaney. look at the clip earlier of nikki haley stopping by "snl" on saturday. >> nikki, don't do this nikki.

nikki tiki tavi. nikki haley joel osmet. i see dead people. >> that's what voters will s ay if they see you and joe on the ballot. >> that's not very nice, nikki. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

welcome back. caterpillar just reporting. they came in with earnings on adjusted basis of $5.23. that was higher than the $4.75 the street anticipated. it came in on revenue of $17.07 billion. that was in line with expectations. the company the company returned $7 billion in buybacks. the ceo was just talking about how they are committed to

executing the strategy. they are proud of the team's achievements for this. let's dig into the u.s. economy. the hot jobs numbers from friday. john hope bryant is here and mick mulvaney. they are both joining us. i'm curious how you look at the numbers and if there is any light between you. i think there may be if we agree on the facts. john? >> mick is a reasonable guy. my conservative friend has admitted the bones of the economy are pretty strong. some of the numbers you have not seen in 50 years. the sustained unemployment rate. it beat the estimate of many people that jobs report coming out by the economic yard.

we are still leaving many people in america without the rungs on the ladder to climb up. there is a frustration in the hope report with 4,000 people we surveyed which has a frustration. it is a difference with the reality of the bones of the economy solid and the perception that i can't grab a ladder or buy my home or start my business or my personal debt is going up. people are hopeful, but they need hope with a business plan. this is one of the unlocks we have here at hope. i want to hear mick's take on this. my conservative friend agrees. >> mick, you agree with john this morning? >> yeah, i think he and i are on the same page economically and politic politically. the numbers are fantastic. i don't pay attention closely to the unemployment rate with the labor participation.

i look at the raw number of jobs. anything over 225 is a good number. that's a solid growing american economy. they blew that number out of the water. there are revisions looking back that took numbers up where people thought were softer. the numbers are better than we expected. john's right. for some reason, it is not getting to everybody and that's the switch over to the politics. that is why the president's numbers still struggle. folks don't eat gdp. disinflation versus inflation. what they know is it is more expensive to live. they can't afford to buy a house or save money. that is having a political impact. >> john, how do you explain it? >> folks have too much at the end of the month and more people feel that way. 70% of the people in the country are living paycheck to paycheck. you are making 2$250,000 a year

and you are living paycheck to paycheck. if you don't feel you know what the programs are that allow you to become a homeowner where interest rates crept up and there are programs to allow you to get in, arethen you are frustrated. the lowest credit score in this country is upon black americans. everybody knows when the rules are published and the playing field is level, arts and politics and entertainment, we kill it. we succeed. in capitalism free enterprise, we don't have the memo. andrew, we get up in the morning and we lock in on the free- enterprise system. folks are riding it out.

everybody is in the unlock. andrew, you raise credit scores and you change america. >> john, i want to get to mick. i don't think i have an opportunity to talk to out the air in a long time specifically about what's happened to dei as part of esg recently in the aftermath of the firing of claudine gay. if you live on x or follow people on twitter, there is a raging debate of the dei programs and other programs have gone too far. given what you said, i'm curious where you land today. >> talk about a conversation that is part of silly season. this is absolutely ridiculous. this is where mick and i are the same race. we are not black or white or red or blue. we're green. this is stupid. the most diverse -- sorry, the most profitable companies in

america are diverse and inclusive. the most profitable reasons in america are diverse and inclusive. california and new york. atlanta, where i am, in the south coast. just blowing the doors off the economy because we are arguing over who gets a contract and not what race you are. these are stupid questions, of course, diversity is good for america. without iimmigrants, you would not have this country. the immigrant debate and dei debate -- forget the super bowl this sunday, very important, but how do we get the best team on the court or field which includes all of us, to give us more green. so we are not speaking mandarin in ten years. 92% of america was white in 1952. half of america is black and brown today. we have to get black and brown

and poor whites suited up in the game. i'll put it another way. my friends stay better. this is a ridiculous conversation. no one is losing. >> mick? >> goodness, where do you start with that? i love john hope bryant in the morning. it make me feel better than being an american. we can have a long discussion about dei, andrew. john mentioned diversity and incl inclusive. i know what equality is and the law and what it means to be equal. the thing that worries me is as long as dei treats white conservative men and black women the same as they do if they're liberal, i'm good with it. i always see dei bent to the liberal leanings. that is another discussion for another day. >> mick, this is longer discuss

for another day. if a deal is reached on the border with ukraine and israel this week, is that bad for former president trump? is there a view he doesn't want this to happen? is it good for president biden? >> listen, the whole idea of one party in washington not wanting to give the other party a win in an election year is not new. we did it to obama and donald trump. that is not news. what factors in is not the politics of the next election, but the politics of this particular bill. the dollars keep going up. $100 billion to $118 billion. a threshold of 4,000 people. that is more than 1 million americans every year coming over illegally. that will be the problem with the bill as much as the politics of the 2024 election. i don't think it has a chance to pass. >> a longer conversation. john and mick, thank you.

i appreciate it. "squawk box" is coming right back after this. take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond.

welcome back. just capital released the just 100 companies in america. we have the media partner and exclusive launch with the list. brandon gomez is here to discuss the issues on the list.

>> andrew, we combed through the data. recognizing companies doing right by five stake holder groups. workers, communities and shareholders and customers and the environment. we collected over 230 raw data points with 20 issues identified as priorities and conducting what they call just business behavior. this is key across every demographic across every affiliation and race or gender, americans were united to prioritize workers the most. paying a pfair and living 937 russell 1,000, micron, amd, el vance health and cigna. ecolab, this is the first time a company from the chemicals industry has been included in the top ten. leading the pack heavy in tech and financials, citigroup,

intel, censure, most just companies bank of america which ranked number one last year, number two this year, and for the first time after six years being in the top 100, america's most just company is hpe. that's because it's leading on environmental impact issues, providing apprenticeship programs for people with resume gaps, and ensuring women and people of color earn 100% of what similarly ranked peers learn. for the full list you can go to cnbc.com/just/100. >> i have a bunch of questions, and we're going to be able to talk to others a little bit later about this. what sectors led the list? before we even get there, just a metric question, given the political shifts in the conversation we talked about, dei and esg and all these things which really do factor into this, did that change the list, do you think, this year? >> yes. i heard you talking to john

hope. the core issue remains the same, it's about green. when you see the stock performance of these companies leading on these dei issues they're outpacing the broader russell 1,000 equal weight. companies are trying to figure out how to have this conversation and how to shift the way they're having the conversation but you're seeing in terms of market performance, the companies that are leading on these dei issues -- >> what sectors performed the best? >> banks a little bit of pullback this year. it's because other sectors are catching up. semis leading now again just because of more disclosure. >> in terms of how folks on a market based approach peer to peer, how did everybody line up? >> when you're looking at companies that are rising, that keyword, disclosure. ai also a big issue this year in terms of disclosure. companies most of them having their privacy policies within

three clicks of their home page, things like that. these issues remain the same. for another consecutive year paying a fair and living wage remains the number one issue. >> what about the idea of your business practices at all? how do they measure that, i'm looking at cigna and claims denial charges with this new tool they have where doctors look at claims for 1.2 seconds and deny them using this tool. >> take microsoft, for example, right? you have a company where -- that used to rank very highly and now because of a ftc fine in the last year, the company drops. so annually the rankings are shifting based on business practices, but then also you have to look at when companies acquire another company, microsoft a perfect example of that there. activision blizzard, when that conversation was happening, it dragged back the company because activision didn't rank as highly

on the just 100 list. those are adjustments that can be made throughout the year. >> appreciate it. coming up later in the show, do were going to talk to paul tur jones, "squawk box" coming right back after this.

♪♪ whoo! ♪♪ light work! ♪♪ next victims. ♪♪ you ready for this? ♪pump up the jam pump it up♪

en mcdonald's set to report, we will bring you those numrs abend the instant market reaction straight ahead. "squawk box" will be right back.

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is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening. good morning, everybody. fed chair jay powell telling "60 minutes" the fed is wary of cutting rates. >> we want to see more evidence that inflation is moving sustainably down to 2%. we have some confidence in that. our confidence is rising. we just want some more confidence before we take that very important step of beginning to cut interest rates. >> we'll get reaction it those comments and talk markets with

new neuberger berman's stevizeman. tensions rises in the east, the latest from the region and what's next is straight ahead. the second hour of "squawk box" begins right now. good morning, and welcome back to "squawk box" right here on cnbc, we're live at the nasdaq market site in times square. i'm andrew ross sorkin along with becky quick and joe kernen on this monday morning. we'll show you where the futures stand after jay powell might have talked things down a little bit on 60 minutes. the dow off about 12 points. the nasdaq off about 27 points. the s&p 500 right now if we open now down about 10 points. of course we've got still about 2.5 hours to go.

a couple of dow components reporting. mcdonald's just crossing the wires and cnbc's kate rogers joins us with those numbers. >> good morning. this is a mixed quarter for the fast food giant for q4, eps a beat at 2.90 adjusted. revenues coming in at a slight miss, 6.41 billion versus estimates of 6.45 billion. comps coming in below estimates this all segments, globally up 3.4% versus estimates of 4.7 pr %. u.s. market comps were up 4.3%. the company said strong average check growth driven by strategic menu price increases. mcdonald's pointed to effective menu and marketing campaigns like kerwin frost mcnugget buddies. international markets saw sales increase by 0.7%. the segment did have positive

comps in all geographic locations with the exception of the middle east, which was impacted by the war the ceo had warnld of last month. its international operating market sales increased 4.4%, lower than the 5.1% increase projected. the performance had strong comps in most markets led by the uk but negative comps in france. mcdonald's reported its full-year results with global concept 9% for 2023 and up over 30% since 2019. the stock is up just fractionally year-to-date. saying in the release, by evolving the way we work across the system, we remain confident in the resilience of our business amid macro challenges that will persist in 2024. back over to you guys. >> okay, kate, thank you very, very much. we'll keep our eyes on that. that stock down about 1%. >> yeah, it is down. fed chair jay powell says investors are going to have to wait until march for an interest rate cut. joining us to talk about the markets, steve eisman, senior

portfolio manager at neuberger berman. it's good to see you. we have seen surprising strength across the board it seems like, and i wonder whether you can just give us your view just flying at 30,000 feet what exacex exactly is happening in the economy. is it organic? is it illusory? >> i think the answer to your question is no one fricken knows, and everybody who comes on this show doesn't know. >> right. >> and everybody who -- and every economist, many whom i respect, are saying there's about to be a recession because the fed raises rate but then they'll admit there's not a single data point pointing to that happening. i don't know. all i can say is 70% of the u.s. economy is consumer driven. the consumer seems to be pretty strong. they still have savings. why everybody is getting so hysterical, i don't get it. everybody should wait. until then,s the economy is ju

fine. >> i've seen -- and just looking for all the people that we're expecting this not to happen, there's a lot of excuses for why it's happening. i've heard a lot of the jobs created are temporary jobs or second jobs i've heard. i've heard that there's a lot of government jobs. >> listen, in my business when you're wrong, you're wrong. you see it on a screen, you know, economists can pretend until they're dead that eventually they'll be right like the people who say that for 40 years the deficit's going to crush us. they've been arguing it for 40 years. 40 years is a long time. all i know is the data is fine, credit quality -- capital one, the ceo of capital one got on and says he thinks delinquencies are going to start to go down in the second half of this year. until somebody can give an actual data point that says things are bad, it's fine. >> is it possible any of it is

kanz yan largess. >> it certainly is. it's certainly possible. you can't see the government stop spending. >> that all makes me think we're going back to mmt works, so why not do it? >> you know, that's way above my pay grade, i know what you're saying. i don't have an answer for that. >> is there anything organic, anything good happening? productivity seems to be better. a lot of good things happening, but is it organically good because of productivity rising for something that economists miss? everybody misses it. >> honestly, i don't know. i just know the data is fine and i don't try and go too much beyond that. >> where would the first signs show up? you do hear areas where they think it's a recession, whether that being in commercial real estate. >> commercial real estate's been bad for a couple of years now. >> but where would you look -- but the problem is that commercial real estate is not

big enough -- let me rephrase, office real estate is not big enough to have a real big negative effect on the economy. >> consumer goods sales have been weaker in some areas too. where would you look for things? >> i look at credit. you know, if consumer credit quality would start to really deteriorate, like it started in late 2006, okay. but you know, until then, as long as the consumer is healthy, i don't think there's much to really talk about. >> does it scare you that you're not more skeptical at this particular moment given your history? >> well,i i said this last week i don't really short stocks anymore. i'm long only. the line i use is i was born jewish but i converted to long only. i thought that was a pretty good line. i'm very data driven. if you were to tell me there was a real pocket of credit quality that was starting to

deteriorate, i would pay attention. as long as credit equalquality fine. look at nycb last week, that was pretty bad but that was nycb because they passed the 100 billion threshold and the regulators were all over them and forced them to increase their liquidity and increase their reserves. is that a harbinger of future bad things happening in office real estate? maybe but it's confined to office real estate. >> for micb, it wasn't just the regulators. it was the regulators but also -- >> and they had charge offs. >> office real estate is confined to certain community banks and regional banks. it's not a big bank problem. it's a cmbs problem. investors will have losses. i just don't see a systemic or big problem at this point that's going to hurt the economy. >> we were talking earlier about the inverted yield kufcurve andw long it takes for a recession, and it's super bowl week, and i don't even know which team i'm

supposed to -- because i know it doesn't work, i don't even remember whether it was the nfc or afc team. >> it was the original afc team if they win, the market goes up. >> we stop following it because it doesn't work. can we throw the inverted yield curves happen here? >> i don't think you can throw the inverted yield curve on the heap of history. how far, this is such a strange period post-pandemic, all the stuff that's happened, i don't think necessary you can pull out your old rules this time. can you explain why the market has handled it so well that we're not getting zseven rate cutting starting next month. we were counting that. we were set up for, that it's obviously not going to happen now and we're still trading higher. >> earnings are coming through pretty good. at the end of the day, it's the

earnings thatmatter. if we were in a situation where the fed said it was not going to cut rates and this was a bad earnings season, then you'd have a problem. >> do you think the fed's still going to cut? >> you know, i think the fed has quite an amusing communication problem, which is that by very nature, they are unbelievably dovish. they know they can't be dovish, but they just can't help themselves. last year when they had the dots, the dots were pointing to six rate cuts, i don't know how serious they were about those dots, but they're very insensitive to how badly the market wants free money. so then the market took off, and then powell comes out and basically says, well, we really didn't mean it. >> it's not a communications problem as much as a fed dots plot. it's a stupid prediction tool. >> yeah, but they know how seriously people take it. if you know how seriously people take it, don't be so liberal in your dots. >> it's just that every time we

hear communication from jay powell or anybody else, they basically say cuts aren't coming. the cuts aren't coming. >> and then they do dots. >> so stop with the dot plots. >> stop with the dots. >> yeah. >> do you ascribe anything to the fed maybe would they err on the side of ease because of an election year? they keep -- you know, everybody wants to stay in power. >> i don't put much stock in that. i actually think deep down powell is petrified of redoing vulcar again. they've engineered what looks to be a soft landing. inflation is coming down. the economy is still strong. why would you waste rate cuts now and risk a resurgence of inflation when really all you need to do is declare victory and say we engineered something really pretty fantastic and

we'll wait to see some data. if the economy starts to weaken we'll hold that in reserve. we'll leave things the way they are. they seem to be pretty good. what's the matter with that? >> we had wage gains that are pretty strong that can could be worrisome if the inflation bugaboo is not gone completely, could come wback. >> if i was the fed, wages are very strong, that's a risk. that's what we're afraid of. we're not in any rush to cut rates. the general direction eventually will be rates will go down. >> you think inflation is under control? >> that's what the data says. who am i to argue with it? >> okay. all right. if i had to summarize what you just said, it would be -- >> optimism. >> no, it would be nobody knows d diddley. >> i'd go stronger than that. >> in what way? >> i'm saying can. >> because he was negative one time when something really bad

happened and now he's not so -- >> everybody always expects me to come on a show like and this basically predict the end of the world. the end of the world wasn't much fun. i'm not in a rush to predict the end of the world again. >> i appreciate that you're calm, cool, and collected and really just looking at the data. >> but you don't think anyone can predict anything? >> i wouldn't go that far. >> economists aren't great at -- >> i would just say this time around there's so many different things that have happened that are so unique, it's very difficult to put something into your model andmake a prediction. >> all right, steve. >> thank you. when we come back, a look at the oil market amid rising tensions in the middle east. former open ai board member and texas congressman will hurd will join us to tk oualabt the potential risks of artificial intelligence. "squawk box" will be right back. e flight. cirkul is the e energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your

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♪ despite the prospects of an escalation in the middle east conflict, oil prices actually ended last week down by 7%. joining us right now with more on the energy sector is goldman sachs head of oil research. don, what's happening? the reason that we've seen prices not only do well but actually come down in the midst of this middle east crisis. >> yeah, great, thanks for having me. so really two factors. the geopolitical prices is pretty modest, despite all the uncertainty. and second, i think there are some other factors that have been weighing on oil prices over the last couple of weeks including higher u.s. rates and a stronger dollar. the question is why is the geopolitical pricing improved so

modest at the moment and i think it has to do with the fact that the level of supply disruptions in the crude upstream market remains quite modest, a big difference with shipping markets, for instance, and second, there is quite a lot of spare capacity that could be deployed if we were to see more meaningful crude supply disruptions. >> a big part of it is the supply situation. the united states has produced much more and stepped things up. so have a few other areas like diana. >> we think that's a story of oil market last year, and this year demand is firm, coming in higher than expected, but supply is quite stlrong and exceeding expectations. we think that will also be the story this year, although to a lesser extent. we expect demand growth to moderate and we think u.s. supply growth and supply growth from some of the sanctioned producers like iran will moderate in 2024. >> people look at the situation in the middle east and wonder if we can get back to a 1970s oil

embargo sort of a setup where you see massive inflation shortages that come through. is that even possible in today's world? >> so it's obviously hard to predict geopolitical outcomes. our base case is that brands will remain in the 70 to 90 range because high spare capacity liptmits the upside an solid demand. that said, because the geopolitical risk stream so so modest, the cost of ensuring against big spikes is small, and because we still have wars in the middle east and russia, we still see value in oil as sort of a hedge against this unlikely but still very meaningful scenario where prices could strike. prices could rise 0% i20% in th first month, and perhaps double, not likely but we think it's worth ensuring against these tail risks. >> part of it is that

politicians may have learned something from those embargoes last time around too. the american administration, the biden administration has said that they're sanctioning russian oil, but they turn a blind eye when that oil is shipped elsewhere because they don't want gas prices to go up at home and face that political pressure. >> yeah, so i think that the energy crisis of 2022 has indeed triggered a political supply response where, for instance, the u.s. administration introduced the price gap, which aims to keep russian barrels in the market while lowering revenues for russia. we have also seen increases in supply from places such as iran and venezuela over that period, and so i do think that policymakers have been very focused on bringing down headline and core inflation, and have been pretty successful so far. that said the uncertainty remains elevate sd it.

>> in that 70 to $90 range you're forecasting, it still is profitable enough to make it worth the while of either nation states or big oil companies to continue to produce? >> yes, that's right. >> if you were to see a collapse in prices, it'd be a different story. >> that's why we think that in most macroeconomic scenarios, we will be -- and this is what we called the 70 to 90 range. which sort of works for opec countries, which works for u.s. shale producers, and you know, therefore we think it's an -- >> anything that would throw you off? it's always the thing we don't know that sneaks up and catches us. where are you looking for those unknowns? >> i think to the upside shocks, geopolitical shocks that prevent opec from deploying its spare capacity. it's all concentrated in a few countries. if you were to see a

geopolitical shock that prevents them from deploying that spare capacity for physical reasons that creates a lot of upside. in terms of the downside, you have to see a combination of much weaker demand and a shift in the saudi strategy for prices to drop below 70 on a sustained basis. >> big picture, is there such a thing as peak oil and when would you say we hit it? if we need 15% more than what we have now in 2050, is that left in the ground? >> you know, there's definitely a lot of oil left in the ground. it all depends on where prices go, right? if you need more production, prices just -- >> i'm just talking in a scientific way, how much is --

will we ever run out? would you run out? could we deplete it to where there's zero left? >> we think that's unlikely if you look at the reserve life right now, basically you have 16 years of oil left, under current technologies and current prices. the technology is likely to improve and prices could rise if the market needs it. >> daan, thank you very much. >> thanks a lot. >> coming up right after this, we're going to look at some of the premarket moves this monday morning. take a look at futures. still got about 2, call it a little over two hours to go before we open. right now we would open down on the dow off about 16 points. nasdaq margelinally up about a point there. "squawk box" is coming back right after this. powered analyts to help improve player performance. t-mobile's network helps aaa stay connected nationwide...

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caterpillar shares, which are currently you can see here just up about 4.5% premarket. the heavy equipment maker is just up around 45,000 shares of volume. earnings per share here look like they beat consensus estimates. there's still some analysis about whether there's comp rablt to those estimates. cat was helped in large part by strength in the north american market where things like infrastructure and construction spending remain robust. that helped offset weakness in other parts of the world. that gave current quarter and full-year guidance for certain metrics that imply similar growth year-over-year. caterpillar helping the dow up about 4% off the premarket highs. news on another dow component, that's boeing. those shares are lower by just about 2% on 50,000 shares of volume. we're also going to show you spirit aerosystems, which is down 3% on 5,000 shares of volume. boeing said it found more

possible manufacturing mistakes with drilled holes in fuselages for roughly 50 yet undelivered 737 max model jets. those fuselages were made by boeing contractor spirit aerosystems. they said they are aware of the issue, are in touch with boeing about it. boeing and spirit down on that bit of news. we'll cam things off with shares of meta platforms, which are relatively stable. following friday's massive 20% run on the heels of a better earnings report. the announcement of a dividend payment alongside a new buyback program, that move, by the way, on friday added roughly over $200 billion to the facebook, instagram, and whatsapp parent company pushing it further higher into that $1 trillion market cap club. joe, meta platforms down fractionally. you can't blame them after you're up 20% in one day, joe. >> you're right. almost, dom.

tournament's going to end today. that's the way when you talk pebble beach, that's a given as you know. we know that, that's one of the charms of the tournament. >> charms. >> one of the charms of the -- try to make it through spyglass where you can barely walk because it's water logged. can i say one thing in case you were wondering? >> yes. >> it's going to complete today, and it's 48 out of the top 50, only 80 total chr, which is hal what it used to be. it's head and shoulders in terms of being a true premier event, at&t and the pga have done unbelievable things. and they've even weeded out the crappy amateurs except for me. >> i also saw when you were playing with, by the way. that was a headline in and of itself. >> the pressure on a 20-year-old kid i can't even -- and not -- >> in your first ever pro tournament, yes. >> right. and after you play those courses down in the desert, and they're

great. i love them but he hasn't been on pebble before. the wind and just the intimidation factor. i don't know how like wyndham clark to shoot 60 at pebble beach, i have no concept of that, but to have that hit you in the face in your first pro tournament, he performed pretty well believe it or not. everybody's great, wasn't it, becky? everything's great. great, great, great. the weather was iffy. >> a little bit of sun and you're happy. >> so joe, can you clarify something for me? because you know i'm a sports fan. you are as well. you were involved, so you're going to know better than me. mi my understanding was that they cut it off, shortened, so it's only three days and that the tournament is over. >> i didn't even see that. >> that must have happened -- >> 5:00 a.m. they were still saying it was going to be potential -- >> is it raining again out there? >> i heard a different story.

>> i didn't see that. >> i don't know what the final call was. >> i'm pretty sure they declared wyndham clark the winner of. >> i heard that at 5:45 or something, but literally 15 minutes earlier they were still saying it was going to be played out. maybe they called it on the weather. >> seeing the weather out there and seeing what the atmospheric river or whatever it is is doing to southern california right now, i don't blame them. >> state of emergency. >> exactly. >> news you can use. i should watch "squawk box" to get some of this information. thanks. >> you got it, guys wh. when we come back, will hurd, former open ai board member and congressman from texas, will join us to talk about the potential risks of ai, also, the opportunity that the technology provides. in the next hour, an exclusive interview with paul tudor jones and the ceo of hewlett-ckd paarenterprise, antonio neri, they'll be joining us together. "squawk box" will be right back.

♪ welcome back to squawk, in a

recent op-ed, will hurd recalls the first time he felt, quote, freaked out by a board briefing and realized the real power of artificial intelligence and the oversight it would need. he writes, quote, just like a company needs a permit to build a nuclear power plant or a parking lot, powerful ai models should need to obtain a permit too. joining us is former u.s. congressman will hurt. good morning to you. been talking about wanting to regulate tech for a long time, big tech, social media, and now ai. virtually none of it has actually happened in practice. some people say it's because we don't have the technical know how to do it. some people say it's too complicated. some say the technology is moving too fast. what do you say? >> i think i agree with all the above. however, it's something that we should do. i equate artificial intelligence, specifically artificial general intelligence with nuclear fission. nuclear fission control gives

you limitless clean energy, uncontrolled, nuclear fission gives you nuclear weapons, and i think that's an equivalent analogy whenit comes to artificial intelligence, and we should learn from the past. we have a $10 trillion cybersecurity industry, one that i was involved in because we didn't have product liability applied to software. we've seen and we know what social media is doing leading young teenage girls to increase self-harm. we shouldn't allow that. part of the reason is because we kafb carved it out. let's not do that with ai. some of the legislation we should do is very simple. make sure ai follows the law. we have a lot of great laws about civil liberties and civil rights and protecting people. let's make sure that these tools continue to do that. >> will, what are the laws, though, that you're worried right now that ai is not complying with? are we talking about privacy

laws? are we talking about copyright laws and that's a huge component part of this? what is the piece that you're looking at specifically? >> i'm more concerned about the implementation of these tools to impact individuals. let's say a bank starts using ai to make decisions on how to get out loans. i want to make sure that if the bank uses the tool incorrectly and they discriminate against somebody because of their color of their skin, then that bank is liable. however, if the algorithm itself creates that bias, then developers of that algorithm should be held accountable. so for me -- >> and you don't believe that the law would allow for that now if we were to bring a lawsuit against a bank that did that and then turn around anded also br a separate lawsuit against open ai, if that was the underlying al galgorithm? >> it's unclear. that's why you're seeing a

patchwork set of laws happening at cities and at state in order to ensure that type of thing happens, right? and so i also want to make sure that we see really powerful ai, and that term needs to be defined that it goes through some kind of review. t if you and i want to create a parking lot, we'll need to get a permit. we need to make sure that an entity like nis, the national institute of standards and technology, is ensuring that the machine learning models have been tested to ensure the outcomes that they say they're exposed to, that some of these algorithms have been red teamed, that we're looking at the data that is being trained, the audibility of the program. that kind of review should be done quickly, right, and we should establish a standard of what that is. if you're going to say, hey, will, you like these shoes and i'm going to give you an

algorithm to put -- increase my sales, i'm not concerned about that, but anything that is about delivering services to individuals, you know, banking loans and such. >> let me ask you a different question, which is the ai industry really led by sam altman with somebody you worked with obviously, it's very unique in that it's one of the few industries and sam's been very outspoken to say please come regulate us. we need regulation. very rare where sort of out of the gate a startup says we've got a problem. this could be terrible for the world, come regulate us. my question to you is is that genuine? is this a sop to washington and to the public with the expectation knowing that washington will never regulate and, therefore, the company looks good for raising these issues. so if in fact, there's a problem later, they can say, look, i

asked for this? what do you think is really happening here? >> it is absolutely true. that is something sam believes. that is one of the reasons people view sam altman as the albert einstein of our generation, our time. i can tell you on my time on the board was that safety and making sure that these tools were going to better humanity was a significant concern and was the company and the board's, a lot of the attention when it comes to that. so this is -- you know, i think people always want to ascribe certain things to sam, but he says what he believes, and so this is -- it's not just him, it's the great company, and every person i interacted with in the company believes in developing these tools the right way, and it's something that is baked sinto the daily activitie of the company. >> will, we want to thank you. it is a very worthwhile read so go check out your op-ed.

it really does sort of walk through and explain perhaps how all of this can be regulated and thought about in a meaningful way. thank you again, will. nice to see you. ch coming up, we're going to talk mcdonald's results in the fast food industry, and shares of estee lauder up sharply after the company said it's going to expand job cuts to include 3 to 5% of its work force. the restructuring program will boost praofits. at the same time, the company is cutting its full-year earnings forecast, citing a slow recovery of its business in china. up 15% on the job cuts. lo, 'sokit been a long, nasty decline in the shares. "squawk box" will be right back. . 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.

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we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones welcome back, everything. mcdonald's reporting ruls a short time ago. earnings per share was a beat, a revenue a very slight miss at $6.41 billion versus estimates of 6.45 billion. the stock is up by about $0.45. joining us now is andy bearish. an andy, what did you see in this report that you liked, that you count didn't like? >> good morning, it's kind of steady as she goes. there was a little bit of revenue softness from some of the challenges around the world,

particularly in the middle east, but otherwise a pretty straightforward quarter with a little better operatiing margin to drive the upside here. >> price increases one of the things helping out mcdonald's bottom line, some of the menu promotions they have too. that does show that the mcdonald's customer is pretty resilient? >> yeah, i would say promotions have certainly picked up. you know, pricing is normalizing, but you have to be pretty sharp right now in terms of promotional activity. a lot of that, though, is done through digital formats in the app these days, which i think at least allows the company to get more data and continue to expand its loyalty program, but yeah, it's tough -- it's tough driving traffic overall in the category, but mcdonald's is usually the one in qsr that tends to take fair in good times and also when things get a little bit more challenging out there. >> the situation in the middle

east, this is pretty similar to what we heard from starbucks last week. mcdonald's saying that the war in the middle east and what they called a misunderstanding of their position surrounding the war there putting some pressure on sales. how big of a problem is that? do you expect that to continue? >> yeah, i don't have the numbers off the top of my head. it is a relatively small part of their business. it is in the international developed license markets, which is the smallest category for mcdonald's, but it is an impact of some franchise and license revenues that are probably a little bit softer. i imagine, you know, it could continue there for the next few quarters. >> in terms of mcdonald's business in the united states, how are things going? >> yeah, very solid. a 4% same-store sales number in the fourth quarter. finished up a good year. i think their positioning

continues to be very strong as i noted earlier, that's, you know, in particular in a competitive u.s. market, they do, you know, tend to continue to gain fare, and i think we'll see a little bit more unit growth as they highlighted last december at an investor analyst day to continue to help that share growth both in the u.s. as well as some of their larger european markets. >> stock's up sharply in the last four months. do you like it here? >> we do. i mean, it's run into some resistance, as you can see, at the 300 level, but it's just such a steady eddie with a nice dividend, double-digit total shareholder return. we do have a buy, we think it will continue to grind its way higher towards the 330 mark. >> andy, thank you for your time. >> have a good morning. okay, coming up next, the u.s. and allies launching a barrage of strikes over the weekend against houthi positions in the middle east.

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last night the u.s. and uk struck 36 houthi targets in yemen. this is an attempt to disrupt and degrade the capabilities of the militants used to attack ships in the red sea. joining us to discuss the strikes what comes next, retired u.s. navy admiral and former nato supreme allied commander james stavridis, and all of this has happened, admiral, since the last time you were on, and we're trying to decide what the right amount of force should be used back then. do you think that this has been how you would have recommended it to the biden administration, and to our allies? has it been about right?

is it effective? >> i think it's been about right, and it's too soon to tell if its effective. so about right in the sense that we've increased the strike levels quite significantly over the last five days or so. we've hit probably 150 targets. 100 up and iraq and syria. about 50 down off the coast of the red sea. so increase in volume. number two, and important, the strikes have hit not only the proxy groups, but also iranian revolutionary guard. they're on site doing the training, equipping and organizing. so i think it's about the right level at this stage. whether it's effective or not, we don't know yet whether it's going to be effective in the minds of the mullah in tehran to kind of reduce their commitment. we do know, joe, it's effective in terms of degrading,

destroying capability. taking out missiles, radar, c2 and all that. mixed picture so far, and let's see what happens next in terms of response from tehran. >> do we have to have definitive prove that iran was involved through proxies that resulted in the death of americans to actually strike within iran? admi admiral, is that a possibility? i mine, i mean, there are things in iran that hold dear by imolas. if -- killing our people should never be on the table because that's a line that just can't be crossed? it's just stated, oh, no, no, no. that would accelerate too much.

i mean, iran doesn't seem to give a crap about crossing lines? >> without question, it's on the table. and i can assure you, u.s. central command has very detailed plans, and you're right. there are some extremely juicy targets inside iran. initially probably go after iranian warships. you'd go after their oil and gas platforms at sea. you'd go internally after their munitions, construction facilities. don't forget, they're supplying drones to ukraine. there's a very rich set of targets inside iran. we have the capability to go after those. i know for a fact those targets have been developed, processed. they're available for the f president. in terms of specific support

iranian duplicity, everything i see the answer is, "yes." the only reason we have not begun those strikes into iran is to kind of give the iranians one more exit before the tunnel, if you will, and avoid a truly widening war. i think that's smart, but if the mullahs continue to push their proxies, you're going to have to go into iran. >> because you know at this point, it just looks like the iranians expected what we're doing now, and that it really hasn't necessarily gotten to the point where they think it's necessary. i understand one more chance. they've had a lot of chances. do you think it's inevitable? >> i don't think it's inevitable because at the very highest level the mullahs know if they don't cease and desist, we will go in to iran, and that will

unlock a serious conflict that could end up destroying a significant part of their military capability. you and i are old enough to remember particularly me the late 1980s. we went through this almost exact process. the iranians sought to close the strait of hormuz itself. u.s. navy destroyed about a fourth of their fleet. they don't want a repetition of that. i hope we don't get there, but if we have to, we should go there. >> i think we remember the same things. just looked at your age. so you definitely don't -- may have -- we remember the same things, admiral. maybe you got, missed a couple of months. i don't know. what makes me think that at this point that the iranians would really only understand one

thing, and i think our left flank in this country would have a heart attack if we did anything like that. i don't know if the president can do that in his own party, but that's probably, at this point -- do you have to be a wild-eyed neocon with blood in your mind to do that or just finally say, look -- enough is enough. we just can't keep playing this dance? >> i think the latter, and frankly, my sense is the administration wants to avoid a wider war in the middle east, of course. during an election year, of course. on the other hand, if there are continued attacks that threaten our warships, for example, what if one of those cruise missiles got through and hit an american destroyer? you could have 30, 50, 100 sailors killed. i can foresee a scenario, joe where there is, in fact, a

requirement to respond directly against iran. i think in that scenario we would do it. let's hope the mullahs cease and desist. it really is last exit before the tunnel for them. >> all right, admiral. thank you. let's hope so. >> thanks. still to come, senator mark warner joins us at the nasdaq to talk geopolitics and mup much more. later we talk to paul tudor jones and antonio neri. "squawk box" will be right back. life is for living. let's partner for all of it. i'm so glad we did this. edward jones it's time. yes, the time has come for a fresh approach to dog food. everyday more dog people are deciding it's time to quit the kibble and feed their dogs fresh food from the farmer's dog.

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good morning. stocks start the week at record highs with futures pointing lower. corporate earnings in focus today. new results out from dow components caterpillar and mcdonald's. meantime, the senate unveiling a border security and international aid bill. details from virginia democrat mark warner. and stay tuned for a special interview with leader of america's most just company -- hewlett-packard enter surprise and founder of just capital himself, legendary investor paul tudor jones. this hour, as we begin the final hour of "squawk box." good morning and welcome

back to "squawk box" here on cnbc livefrom the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin. u.s. equity futures closed last week at record highs. said they'll start at record highs today. at this point they wouldn't be starting at record highs. would they? they'd be below. nasdaq? no. nasdaq wouldn't either. so -- disregard what we've just -- told you. never mind! treasury yields at this hour a quick look. ten year back about 4.11%. you can forget about your rate cuts. okay? just -- no. i don't know, but i think, for now. >> yeah. >> i wish he'd come on, like a financial network and talk about it, instead of a little, like, starter, primmer interview for the masses. is it easy are for him to do that? >> not on "60 minutes" since 2021. it is a way to reach out to the

broader audience when you're talking -- >> no hard, real, actual questions from somebody who knows? >> really an explanatory -- it was an explanatory -- >> good. what we need. >> i think it's good to have people, the general public understand more about inflation. i do. >> get them all up to speed eventually. >> earnings movers. caterpillar slightly missing sales estimates fourth quarter. adjusted earning beating consensus although some discussion going on as to whether the $5.23 a share price is comparable to estimates. either way, talking about a big beat on what was expected. caterpillar saw strength in the north american market helping offset weakness elsewhere. the company is operating profit margin jumped fourth quarter up from 10% in 2022 stock up by 4.1%. also watching shares of mc mcdonald's.

beating the street's fourth quarter profit forecast. sales slightly below. comp store sales below estimates in all seg monies and the company's ceo remains confident in resilience of the business, despite macro challenges that persist this year. able to raise prices and that helped with things, too. stock right now down by 0.7%. then there is parent company of novo nordisk saying buy contract drugmaker catalent about $11 billion in cash. the company chiefly responsible for filling and packages syringes and injeshgz pins for nouveavo nordisks weight loss d wegovy. shares up by 1 m.8%. bringing in our own mike santoli the recent record run for stocks and whether, of course that can continue. mike santoli at the new york

stock exchange. good morning. >> good morning. yeah. this run to a record last week by s&p 500 happened through a gauntlet. market continues to be tested on some of the major premises that got us here. which is one, can good economic news be treated good news by markets? have a bit of rethink on the initiation of potential fed rate cuts by powell and by the data. then, of course, you had some of the choppier big cap tech earnings causing a gut check. uneven. get to a new record. gotten the market to a bit of the upper end of this trend line. kind of pointing this out for a while. you want to take that as a trend since the fall, always projected a little over 5,000. a bit of a maybe culmination moment or stock re-assess it. be mindful. one year ago february 2nd right after a flukey seeming very strong january jobs report, sound familiar? you did have rates go higher and you had the market have a

pullback. like 3% to 5% then svb. a correction, doesn't look like a lot on this one-year chart. what it was in february and it can be choppy. throw that in the mix. ten year treasury. another factor. especially determining breadth of the rally. breadth weakens when rates go up. been in this range, though. 4-2 to 3-8 or so. we've sat since the fall, really since december, since the fed pi pivot. make our peace below 4. absolute number might not matter. back here over 4% was a problem. first quarter last year. dial it back a year and a half ago, 3.5, 3% maybe couldn't handle that. happening for the right reasons. economy remains strong, somewhat deal with that, remains to be seen. look at volatility index. another thing says concern is sort of rising from low levels

but certainly not at a panic. at 12 in mid-december. still in this range but now up around 14. even though the stock market, s&p higher 5%, 6% since then. clenching up. cpi this week and the rest of earnings season to determine if this trek can be sustained. >> mike santoli, new york stock exchange. thank you for helping us through it. federal reserve chair jay powell says that the fed is getting closer to cutting interest rates but not there yet. >> we want to see more evidence that inflation is moving sustainably down to 2%. we have some confident in that. confidence in rising. we want more confidence to take that important step beginning to cut interest rates. >> powell made the comments last night on "60 minutes" in an interview taped before friday's much hotter than expected jobs report. joining us now with his insights

roger ferguson. former fed vice chairman and a cnbc contributor. roger, listening to the interview last night, i didn't hear anything that greatly surprised or shocked me, but we've seen treasury yields moving higher this morning on the idea the fed will not cut rates in march? i don't think that comes as surprise to you, but why do you think the markets need to hear this again and again? >> look, i think the markets have built in a certain kind of expectation. making bets on the march cut. it's hard for people to recognize and unwind those bets. in part hard for people more psychological than economically in the market. i think the repetition gets through one person the next and the next margaret participant. i think that's what's happening. nothing surprising there. just individville participants up saying i guess they are serious here.

>> and steve liesman made the point, the fed's own fault. a communication problem. clear if you're living. he said, yes, but the dot plots fete dod plots anticipating six cuts. why does the fed continue to put out the dot plots if it just creates confusion in the market? >> that's a good question. i don't think they necessarily think it creates confusion. it gives them a chance every other meeting to really talk about something they really talk about. which is what is our expectation? the challenge is to understand those dot plots you've got to understand a lot of technicality and what assumptions people are making. also understand that it's not a formal forecast. there are a lot of caveats around it. i think it is well-intentioned, a desire to say this is what might happen. but on the other hand, markets don't take the conditional -- they expect it to actually be a forecast and a promise. it's not that. so i think the challenge is just

being clear about what these dot plots are and what they're not. and that's always a little tricky. >> roger, in all the times on. it's been -- we've been on this road and on the travels we've been together. we've had you along with us and said again and again and -- just got the feeling you always are pretty hawkish, and i didn't always think you should have been. for a long time you were right and then i thought you were wrong. i was wondering -- now i think you're right again. did you ever think i've been too hawkish and now i see all the seven rate cuts coming and things are definitely slowing down? do you ever think -- were you still holding on to that position, and was it really the fed that was wrong? >> hard to say who was right or wrong here. what was driving me was the general sense that, two things. one is the fed really doesn't

want to lose credibility. history suggests, you and i talked about stop/start is not considers good central banking. i've had the expectation always hang on rates a little higher for longer than the market expected. the reasons chair powell articulated and clearly they want a strong sense of confidence that the inflation rate's coming back down to 2%. also they have the luxury now of seeing an economy itself that looks like it's in good shape. and that gives them, i think, again, the ability to wait and see, because tight rates, do not appear at this stage doing significant damage to the economy. put those two things together. to be clear inflation is coming down to 2%. high degree of confidence, and the fact that the economy looks like it's holding out well, and in the face of rapid increase in rates. both give the sense they can be

a little more patient moving rates down, as chair powell has been saying. >> when you look around the economy does seem like it's doing fairly well. why the pressure to cut rates at all? is it -- what is normalized at this point? >> well, i think the issue, becky, is this thing that's sort of illusive. so-called neutral rate, which no one observes. but there's an expectation that as inflation comes down itself, the level rates the fed should set should be coming down as well. because the real rate, which you understand, nominal rate minus inflation. you don't want that to increase and find you're tightening more than they feel they need. so it's a natural expectation as inflation comes down that interest rates should be coming down. the question is the pace, in which they're doing that and importantly i said when they start. i'm in the mode that they're probably going to start in june. maybe three rate cuts consistent the way i've read the dot plots.

market more optimistic. i think they're now moving in my direction. >> it seems that it's a much more complicated thing to try and figure out when you have the balance sheet as large as it is, and this quantitative tightening going on same time. i don't think we truly understand how quantitative tightening works where tightens the screws, when it presents a problem. would you shrink the balance sheet more or rather use the old tool of cutting interest rates? which do you stump first? >> i prefer to focus on the tool that we understand best, which is the interest rate, the federal funds rate. as you observe, we've never really used quantitative tightening this way. so i think caution should prevail there. consistency knowing what you'll

do so the market can get ready for it and executing cautiously i think is the best thing do with quantitative tightening. i try to use that as the major lever. we really don't know how it works exactly, as you point out. in those cases being as transparent consistent with executing a strategy the better approach and perhaps use more judgment is in the area of the federal funds rate. >> but if you're in a crisis, the break you're going to pump first. right? we saw last march running into troubles in the banks situation. fed wasn't sure quantitative tightening went out the window? >> absolutely. because we don't quite know how it works. but we're not in a crisis now. they do need to get their balance sheet down for lots of obvious reasons. and i think the way you do it is what they do, which is try to be as methodical and transparent and positive letting everything roll off exactly as they say

it's going to so the market itself can get ready. you're right. in a crisis moment, you stop all that. you don't want to go into areas that are uncertain and focus on the tools you know will work. >> roger, we always appreciate talking this stuff through with you. thank you for joining us today. >> thank you. coming up an interview with legendary investor paul tudor jones, and hewlett-packard enterprise ceo antonio neri. his company topping this year's just list. just 100 list out this morning. next, the senate rolling out a 12-figure border security and international aid package. talk about what's at stake with senator, virginia senator mark warner. stay tuned. you're wch"sawboating quk x." this is cnbc. i'm not an actor. i'm just a regular person. some people say, "why should i take prevagen? i don't have a problem with my memory." memory loss is, is not something that occurs overnight. i started noticing subtle lapses in memory.

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welcome back to "squawk box," everybody. watching futures on this monday morning. you do see some red arrows ahead of the opening bell. this comes after the highest closes seen. record closes for s&p 500, the dow and nasdaq 100 friday. this morning dow off more than 80. s&p by 7, nasdaq by 7 as well. and out with a $118 billion

aid package including money for ukraine, israel, taiwan and bolsters security at the southern u.s. border. president biden says he supports the proposal including new emergency authority to shut down the border. when it gets overwhelmed. house speaker mike johnson responded by tweeting that if the bill makes it to the house dead on arrival. he had indicated saturday the house would vote on a separate $17 billion israel aid package. joining us, democratic senator mark warner of virginia. is it -- senator, welcome. good to see you. >> good to see you. >> as always. a forgone conclusion once again sounds good, not going to happen? >> first of all, let's look at the pieces to this. in this is what i've been fighting for literally for months on end and that is aid to ukraine. is this country going to go ahead and honor its commitment or should no other country in the world ever trust us again if

we turn down the ukraine's especially with the european union stepping up just a week ago. the border took a long time but the most significant change in border policy in decades. ends the whole program, catch-and-release, puts about 4,000 more cbp and i.c.e. agents on border, increases checking for fentanyl coming into the country and changes to the policy that donald trump asked for in 2018. all the things my republican friends asked for earlier in the year. >> i guess the conservative trope is that the increased border agents are to process more people to let them in? >> actually, now that it's out, you can actual ly read the bile. it makes sure more processing so folks can get sent back. remarkably, 95% of people coming through on the asylum program,

called in, a few years here and then sent back. that's ended. more folks and feds at the border to send people back. >> you've seen the numbers. unacceptable, obviously. and other numbers. >> the bodrder's a mess. >> and the other numbers. president 30 points under versus donald trump how to handle immigration. so every time the president looks into the camera and says i've done all i could, no one believes that. no one believes that. we know when he did come in a couple years ago he said, come on in. and sort of got rid of a lot of the things that trump instituted. why not cop to that? just seems like, you can keep saying it's not my fault. not my fault done all i could. one guy, john fetterman, who seems to acknowledge this. you break ranks saying the president -- >> look, the border's a mess. we all acknowledge that.

so we can either harp about it or make the policy changing. >> executive decisions -- >> every republican senator who's complaining about this deal has said repeatedly, you've got to change the law. donald trump said, you've got to change the law. we now are giving what is needed, a significant change of the law. took a long time to get it negotiated. >> yep. >> combined with stepping up for ukraine, combined with stepping up for israel and humanitarian aid in the region. the question is going to be, folks have had for this. take the deal or say no? >> i think they're not going to take it and might be -- >> might want to punt for political reasons? >> it an election year. >> this is rich. >> every day we talk about it. hypocrisy cut it with a knife, both sides. i know. >> b.o.t., chamber, business groups. you talk about it every day are all for it.

let's do it. >> is think -- are there parts of your party where the actual the inclination is to open the border, because we are missing -- we are a million short on people that could, we could give jobs to. there's -- i -- >> parts of our party, frankly the business community as well, says we need more high-skilled worker. >> do they want to enable illegal immigration, whether these people become democratic voters eventually? do you ever really believe that that's part of the rationale for the far left of your party? the squad, for example? >> what i acknowledge straight up, the border's a mess. either complain about it or we can pass a law that would give completely new policies and the ability to shut it down. the president said he would. >> senator, either shut down or not, this question, because -- look. the question that joe's asking.

this idea somehow democrats are -- >> said that, yeah. >> to all sorts of people effectively crowd out the republicans. that is a perspective. i think you should -- not telling what you to do. either say, yes, that's a strategy or no, it isn't. >> i have not heard a single elected democratic figure ever say let's just open the borders and come take all. it is not the policy. >> there's jobs waiting for a lot of people, though. >> premise of the democratic party. there are business group nas said that but that's not the premise of the democratic party. >> is the president, does he have a cart blanche to deal with iran the way he sees fit or is he going to hear from -- >> i think -- look. the admiral said it. >> you were watching? >> absolutely. i watch you all the time! >> that's nice. who's your favorite? >> who's the most provocative?

what he's done is trying to thread this needle. you have got about 100 strikes in syria and iraq. you've got 50-plus -- >> spread it around? >> even donald trump, when he brought us all together back in i think 2018, 2019, he told the senior leadership, chairman of the intelligence committee, he thought he'd strike iran. changed his mind saying that was not the right thing, put us into war. ended up saying, as a president should, pick tis time and place and six months later took out general soleimani. head of the iranian quds force. not in iran. took him out in iraq. that was the prudent thing to do, the right thing do. just in the region. inside arabia in jordan in israel. i didn't hear anybody say best thing to do go in direct war winner. >> senator, how does cyber and

cybersecurity attacks change the geopolitical strengths and weaknesses? because militarily there aren't a lot of places that can compete with us when it comes to cyber attacks, though, a nation state coming of a our companies, that puts things on a different level. >> cyber is asymmetric. one of the reasons why a couple years ago a bipartisan bill a major cyber attack tell the government. not to regulate. to tell other folks in the private sector. one of the things i'm most worried about now, ten months away from an election. i think we are less prepared in terms of disinformation, misinformation, cyber attack in 2024 than we were in 2020. that's because you've got almost a perfect storm. countries like russia who would very much like to interfere in our election so they can make sure we don't support ukraine. a number of election deniers that increased in our country

and a court ruling basically restricted the ability to talk on a voluntary basis to social media companies, on top of that add ard official intelligence which can bring at scale and speed, misinformation, disinformation, messing with our elections and you've got a perfect storm, any chance of a, a, someone besides these two candidates, in any scenario? >> you know, i would have -- thought that might have been the case a year ago. not sure about now. >> manchin, heard that floating? >> heard many. i don't know of any democrat or republican, say that of my republican friends thinking about that, that want to do anything that can actually help elect donald trump. any third-party candidate to date add votes to donald trump. >> you'd be a good state for professional sports team? >> i think we got a good option

with the caps and wizards going in. >> and that you did -- people not mad at you in the district? >> go to tell you. somebody lives in alexandria, got to make sure neighbors don't get mad at me for increased traffic. want to see that first. >> i think it's exciting. all right. not sure -- people want -- the government, it's not -- hasn't worked out. >> let's -- a few more chapters to be written before it comes about. worked with the governor. >> the real governor, mccullough or -- >> i work pretty well, known each other decades. >> someone said that. that's all. senator, thanks. >> thank you. my favorites, all my favorites. >> all your children? >> all of my favorites. >> four dogs, all my favorites. coming up, paul tudor jones joining us with a wide-ranging

conversation. and antonio neri as well. coming back with all that and more, after this. oooohhh, it is cold outside time to protect your vehichle from winters wrath of course the hot sun can be tough on vehicles too you need weathertech all year round! come on, protect your investment laser measured floorliners and cargoliner will shield the carpeting from sand and snow for your interior, there's seat protector and sunshade plus, mudflaps and bumpstep for the exterior order american made products at weathertech.com

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welcome back to "squawk box." just capital out with a just 100 list, the just companies. media partner joining us exclusive interview with paul tudor jones chief investment officer and paul founder and chairman of just capital and here at the table is hewlett-packard enterprises ceo antonio neri. ranked number one tippy top of the list of the just 100 this year. good morning to both of you. paul, rime going to go to you first to sort of walk through, if you could, how the just capital list is different to the extent you think it is in 2024 relative to the prior years, and shifting sort of winds of what is important to folks?

>> well, first of all, congratulations to antonio for him being number one. his company being number one in the rankings, and it's -- i would say that this year it's not a huge shift in terms of how the rankings played out. it's more of a glacial move. clearly the number one issue for americans and doubled since 2010. the number one issues, according to americans, is all work-related issues. right at the top is, with 18% of our whole rankings, pays a fare and living wage. they just do well in every single category. one that strikes me particularly is they have, in the entire russell 1000, they have the most generous maternal and paternity

leaves that there are, and i say that for me personally, because this year as a newly knitted grandfather, three of all three of my daughters, all flee had grandchildren. so watching them hover over those babies for the better part of the first three to six months of their lives and watching their husbands have the ability to interact with those babies, it was not just a touching and heartwarming moment, but i realized what a huge edge it is for those kids in life. we know, i know, we all know how important early childhood is. i think most of the brain synapses are formed by the time they're age 5. so, yes. that, to me, at least as far as hpe went particularly struck a beautiful spot, because i just see it realtime with my daughters and their husbands. >> right. antonio, let me ask you this --

we are at a moment where there's been a lot of layoffs in the tech industry. a lot of folks look what meta did in terms of really sort of culling things and actually, by the way, maybe getting into mojo as a result of what elon musk did with twitter, and there is a real sort of sense, maybe being ruthless is being good? >> yeah. >> you are not that. sto so i'm curious how you juxtapose the two ideas? >> first of all, focus driving operation efficiency and operating leverage for our shareholders. in the end i think about our people, our greatest assets and literally the ones that deliver the butter to shareholders. first i thank paul for the amazing recognition. i know 60,000 employees all over the world will celebrate this today but ultimately doubling down on workloads as a ceo and engineer, we compete with the best people, the best talent, very stiff out there to attract

talent and the best technology. for us doubling down with skill and giving people opportunity to growth in their career, to learn. and also implement new programs. in fact, i grew up as an apprentice in my life. we believe in those programs to instill growth there. >> question. if things got tight, right? how would you think about getting tighter? meaning, do you think that the benefits come off first? or do you think keep all the benefits and we're just going to have to remove people, if, in fact, that's the case? i wanted to get into a.i. and how that affects things. >> you brought it up. first of all, we live in an amazing time with this type of technology will actually help us be better at what we do. so we can lean best on benefits packages for the workforce and the ultimately for shareholders. generally speaking we tend to

think about the staff to do the job bet around continue to prove benefits and capabilities by skilling people with the new reality. >> and paul, governance. as you look at somebody overseeing this just list. one of the governance questions in the headlines is that of elon musk and whether that board is independent, whether he's controllable. "wall street journal report"ing he's on drugs, taking drug wis t drugs with the board members. what do you think, if this is true? >> well, i would say, if my facts are right, i think two or three weeks ago elon said he'd like to have 25% control in the interests of the company. i think he's at 13% right now having sold down a bunch of his holdings over the past couple years. and i think it's a really, really interesting and important, watching how this actually unfolds is going to be,

i think, very telling and informative for future of the country. and really from two levels. the macro level and micro level. take the macro level first. one of the reasons he wants 25% of the company is because he's thinking i can bring my a.i. robotics, do i use tesla as the delivery mechanism for that? that's hugely important for the future of humanity. clearly it's going to be unbelievably productive in a fashion. we know right now that, i guess from a macro level, probably, i think the productivity gains projected to come from a.i. will probably double the typical 1.5% annual increase in productivity to maybe 3%, and the big social question is, how do we take those productivity gains and distribute them through society in a way that allows society to

be stable and to grow? and in musk's case it's particularly intriguing, because here's the richest guy in the world who's saying, the way that i see a.i. robotics and the productivity gain we can garner within tesla is going to be possibly -- again, we don't know. all it was, was from a tweet -- possibly by him increasing his own financial stake, and i don't think that this is like a hot dog-eating contest where the rich necessarily win by getting that much richer. i don't know. i know 74% of americans, or i think it's actually 83% of americans think that ceos already get paid too much. i don't know how well that's going to play on main street, but more importantly, the big issues facing america going

forward are going to be, one, again, productivity. the job displacement estimated to be tens of millions of jobs between now and 2030, as well as how we deal with the big debt bomb we've got coming towards us. so just with, again, going back to this particular case, wouldn't it be interesting. he wants 25% of the company. again, it was a cryptic tweet. but let's assume he wants more of the company for doing a.i. robotics. as a hedge firm manager owns 25%, far be it from me to throw stones at him for that. think of this. here's a guy who sees 1,000 years into the future. right? maybe one of the greatest geniuses of our time. and yet the governance that he's proposing at least initially is kind of from 1,000 years ago.

right? it's a futilistic almost vaslistic proposal in terms of sharing that wealth creation that's going to come from executing on productivity growth. so an alternative, again -- an alternative for him would be what about this idea? what about taking -- because i do think with the incredible genius he's got, with that team of 140,000 employees, imagine what they can do for the rest of humanity, but instead of taking that extra,something around $80 billion, something like that, rather than taking it just for himself, what if, and you start employee stock ownership for those 140,000 employees? what if he took -- >> i think he has that already. doesn't he? >> an employee stock purchase program. very different. i mean, employee stock purchase

program you get to buy the stock and 15% discount is radically different than employee stock ownership plan. imagine if you thook that $80 billion, can do it anywhere. say with tesla and distributed that, say two-thirds or 75% of it among 140,000 employees, what you do then is you create 140,000 people who will wake up, eat, breathe and think tesla every morning. not distributing -- >> i think he wants to do it for a control factor because he wouldn't feel comfortable creating artificial intelligence if he didn't have a voting control over it. >> again -- >> distributes, then doesn't have control again? >> yeah. i'm fine with that. i think it's the economic aspects of it that are important, because we know, we know that worker pay is the most

important thing. imagine the life-changing event that would be? i think work out tos 3ds 00,000 per employee. >> in this capitalistic society, first of all, go back. if you were the judge in the comp case you would let him have the money or wouldn't let him have the money? >> are you talking about the delaware case? >> the delaware case. >> i think the delaware case is more an process than comp. what my point to you is, it's that we have, we are on the verge of massive social change, because of a.i. >> right. >> we have to think about a way to distribute it -- excuse me -- to grow it as well as to share in it, in a way that is going to be for the best and betterment of society. in the u.s. we already have the greatest wealth and equality and puts us right flex to south africa in the world. how is wealth and equality

historically solved? it's revolution, it's war or it's taxes. so if -- in this particular case, we have a massive -- we're going have to find $1 trillion in either government cuts and/or taxes and one of the ways you will find those, one of the ways, certainly on the revenue-enhancing side somewhere down the road. right now the market's aren't focused on it, but it's going to happen. one of the ways you'll do that is going to be through an increase and a possible implementation of a wealth tax. counter counter tuitetively, if musk gets that bort of directors to talk him into an extra $80 billion compensation, exhibit one at some point in the next four to eight years, whatever,

the progressives take over after some great recession at some point. exhibit number one for wealth -- counter intuitively you end up losing more money than making more money. >> hopefully elon's watching this and take your suggestion. i should say he took to twitter and said he's never been tested positive for drugs. just for whatever that's worth. >> can i go back. i do think -- just capital's all about markets. if you think about our two political parties right now. they do not have a vision for the future. that is why americans are so disaffected buy both of them at this point in time. one thing americans do agree and you see it in polling at just capitalists, there's 100% agreement on a variety of corporate issues. on issues such as worker pay. pays a fair living wage.

this is an opportunity, i think, for mr. musk, to be truly, at least from where i sit, remembered for most, a pathfinder in showing that the markets who sell can sort out the best way to keep society stable by making sure that all stakeholders, employees, customers, communities, benefit from what these companies do and produce. >> get everybody to mars before he gets that done. let me ask you this, antonio. just now also get paul's takes on the economy and the markets and we heard from jay powell last night but i wanted to ask you what you're seeing in terms of in the enterprise space. >> yeah. >> businesses spending capital right now, or not. what's the confidence factor? >> i think, you know, enterprises continue to focus on what is important to them from a technology perspective to advance productivity? obviously top of that list improve cybersecurity. continue to digitize the

enterprise and use data in a way -- >> sees people doubling down? >> no. more steady markets in transition. priorities continuing to shift. obviously a period of large digestion in the last 18 months because of the raging challenges. biggest opportunities in the market today definitely a.i., cybersecurity, conductivity, top of the list. >> if you saw "60 minutes" with jay powell. do you have a take on what the fed's doing right now? whether we're going to have a soft landing or whether something else will happen as the year progresses? >> well, you know, look, to me there are two huge huge things forward. i don't know where they'll manifest themselves this year. i kind of think one of them will. the two big macro themes going forward are going to be the debt bomb that we have in the united states, the fiscal recklessness and how we ultimately reconcile

that versus the productivity gains that we're going to get from a.i., which should be stunning and stupendous over the next few years. so, those are the two -- that's kind of -- those are the two forces clashing with each other and i look at fed policy right now as being cyclical rather than secular, cyclical in the sense that we're looking at the current economic metrics, versus growth and inflation, where i think there's -- there are larger issues that we're going to be focusing on somewhere down the road, and it's going to be around, how do we stop and close the fiscal deficits that we have as well as, again, how do we use a.i. to benefit all americans, not just the 5 or 10,000

extraordinarily brilliant people who are going to change our lives with it. >> final question for you, paul. grade the economy. >> economy's just great. i think. i mean, i think it's -- i think it's strong. but again, i think if you -- why shouldn't it be? we've got a 6%, 7% bud budget deficit. we've got an economy on steroids. it's unsustainable. as jay powell said in his very smooth interview, we're on an unsustainable path, and we're going to have to stop it, and the only question is, does that manifest itself in the markets? or when does that manifest itself in the markets? it could be this year. it could be next year. productivity may mask, and it might be three or four years from now, but clearly, we're on an unsustainable path. >> okay. paul, we need to thank you.

antonio, want to thank you. congratulations on the top of the list. >> thank you. >> congratulations, antonio. >> thank you, paul. >> my daughters all want to work for you. we're coming right back on "squawk box" after this. elling , i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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♪ in right after a quick break, we're going to look at the top earnings movers to watch ahead of the opening bell and a reminder as we head to break, you can get the best of "squawk box" in our daily podcast. follow squawk pod on your favoteodst ari pcapp and listen any time. stay tuned. we're coming right back. 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 curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab. (grunting) at morgan stanley, old school hard work

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we've got just a little over a half an hour to go until the opening bell on wall street. dom chu is here. good morning again >> becky, let's get you caught up. a couple of dow components. we'll start with caterpillar, up just about 4.75%, 150,000 shares of volume so far. the construction equipment heavy machinery maker, global economic bellwether if you want to look at it that way, had earnings per share come in at what some were calling better than expected, even though there are questions about the comparability of those estimates to analyst consensus estimates, but if you take a look overall at the revenue picture, it was a miss. cat offered some financial guidance for the current quarter and full year that will be similar to what it saw in 2023. it was helped along by better sales in north america, which continues to see strength in infrastructure, construction spending helped offset weakness in other parts of the world, so cat shares are up. next up, shares of mcdonald's,

which is down 1.5%, around 170,000 shares of volume. the quick service restaurant giant reporting better than expected profits, slight miss for topline revenues. mcdonald's said the ongoing conflicts in the middle east took its toll on those sales in affected areas. domestic sales, sales at restaurant locations grew in line with estimates. the global same-store sales fell shy of the market. personal care giant estee lauder, aveda, clinique and others, it's going to cut 3 to 5% of its workforce, so becky, keep an eye on those. back over to you. >> dom, thank you very much. folks, that does it for us today. we'll see you right back here tomorrow. right now, though, it's time for "squawk on the street." ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at pos