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 post nine of

the new york stock exchange. coming off friday's all-time closing high, futures lower, as powell reiterates the fed wants more confidence before cutting rates. busy week with a lot of consumer earnings and fed speak. another big week for investors, now halfway through the earnings season. dow comes off the best week of the year. s&p, another fresh record close. plus more issues for boeing. it is reporting another problem with its 737 jets. it may delay the delivery ofs of about 50 aircraft. shares of caterpillar seem to be on track for what would be a record high at the opening following its latest earnings, which seem to have been a beat. we're going to break it down with the ceo later this hour. let's begin with the markets after that record-setting week for stocks, jim. some work being done. sam stovall is a good example of what happens when you notch all-time highs in january and february. >> yeah, i mean, we had an

astounding week last week and it looks to continue and i think that people have to recognize that there have been very few shortfalls and some monster, by big companies, increases. and it's kind of surprising, because when you look at the sum total of the research today, almost every single thing is price target bumped, price target bumped, and yet, of course, the averages are down, david, because the futures are loath to be able to recognize what's under ♪ underneath which is a rather extraordinary set of earnings, considering we have had 11 -- considering what we heard last night from powell. >> when you say, rather extraordinary set of earnings, what set are you thinking of? >> if you want to know what the strongest, i think, stocks are the industrials and then the technology. and then, so far, not a lot of retail yet. these would have been the three that i would have been shorted, looking at what the fed's done.

it would have made the most sense. they would have been the most crushed, and it's the opposite, so that leaves us all trying to think of, well, what happened to this soft landing/hard landing? the answer is, there's no landing. it's just a good economy. we're back to reality, david. >> right. i mean, we didn't learn anything new from that interview last night. they taped it, by the way, before we got the employment numbers. >> no, but i'm just -- okay. i agree with that. did i need to watch it? i was watching masters of the era. i had to switch, but that's because i didn't have my vision pro yet. what i'm just saying is that you get a situation where maybe there's no -- it's a new suit. >> it's a beautiful tie. >> stay focused. >> it's a second-rate tie. it's half the price of my normal ties. just looks the same. >> i like it. >> i went to costco. they have great ties.

>> i noticed, and you also said you can see the prices falling in realtime. >> yes, you can. it's extraordinary. we went in with guns blazing at costco. >> really? realtime, like, you're walking through the store and you come back to an aisle and the price is lower? >> i'm talking about an m&m package. >> yeah? >> back to reality. full circle here. let's go back to powell for a second before we go to costco. by the way, the gold is not available at the store. that's what i wanted to get. you can only buy that online. >> right. >> but the shark vacuum cleaners, the prices to sell through irobot, the long knives are out for irobot. >> they're having difficult times, no longer being acquired by amazon. >> but back to powell. >> yes. >> i think we're in an era where what he is saying, everywhere, not just with scott pelt, is, look, we don't need to cut. we got a great economy.

we're not supposed to have a great economy. that's why i started with the industrials. eaton, illinois toolworks, maybe caterpillar. the shorts have to take caterpillar down. they cannot let this thing be up. they have been crushed. the shorts. >> i know. >> anybody heard of those, other than nate, which goes after companies that don't exist? i think, david, more important than anything, is that we have the mandate, which says, look, we don't need to cut unless we have job slowdown, and instead, we can come in at 3.5 next time. >> we got wage increases on friday that were significant. >> nobody cares. it's just that we're fine. it was fine. it's not supposed to be fine. but it is fine. now, interest rates went up. >> yes. >> but i'm just saying that if you're looking -- this soft landing/hard landing dichotomy is something i want to take out of our conversation. >> you're in theno-landing camp. >> exactly. >> we just keep going. >> why should we have landing? why should we have landing?

this is not masters of the air where we're trying to land in greenland or the british air base. you're not watching? >> no, i haven't been watching that. "masters of the air," carl? apple plus? >> yes, of course. >> apple plus combined with the vision pro, along with someone who's riding on the subway and doing work, i think we discovered this. here's what happened this weekend. i think the vision pro went into -- went from boutique to upside surprise this weekend. >> we're starting to get some street people put numbers on at least the hardware revenue contribution, b of a, 46 cents over the next five years. >> i think tony, if we have him on today, the best numbers for vision pro are behind us. >> well, i mean, not to say that it is not going to usher in an -- >> usher? look at this, he's got the whole thing. >> already thinking super bowl. >> me and usher go way back. >> are you texting him right

now? >> he and i used to be texting buddies. we sat next to each other at a dinner. we were friends for a brief period. >> show me. >> i'll show you later. >> i'm sure he's busy this week, but go on. >> the price point of that is still too high. it's -- >> tim has said to me over and over again -- >> how many people have that much money to drop on something? >> have you ever heard of buy now, pay later? >> buy now, pay forever? >> people just buy it like everything else they buy. they'll buy it with -- and pay interest. they'll buy it in installments. >> i'm sure it will do quite well. i'm sure it will get cheaper and smaller over time. >> do you think it changes the discourse? >> it may usher in an era where we're all wearing goggles of some kind. >> did you see my post? the cybertruck? >> i saw that.

>> there you go. you don't need to hallucinate -- there's no hallucinations right now. there's hallucination on a.i., the lies that they put, including dark video, but there's also the hallucination that was the 30-person "wall street journal" story. >> four bylines. >> that's to get elon musk off the board. >> off the board? >> we're going to talk about that in a little bit, i think. >> it's a get musk. the long knives are out for musk like i haven't seen in a long time. was that the plaintiff's information in the delaware case? >> there are people somewhere who have decided they can start to turn on him in some fashion. it's true. >> how do you feel about that? >> how do i feel, personally, about it? >> never mind. i don't care how you feel, personally, because you'll never give it to me anyway. >> i'm not going to share my personal opinion. >> i'll share my personal. i think that that piece makes it sound like it's very hard for the s.e.c. not to come back and look at whether he's an

independent board, which he was never. who thought this was independent? there's just a web of wealth. but more importantly, i think they're going to say, well, wait a second, is this man impaired? >> he's not impaired. >> okay. i don't think he is at all. >> "the journal" is obviously -- they are committed to this story. >> right. >> coming back to the same story, keep finding more evidence from two years ago, this one, or three years ago, that one. >> if it were written about any other ceo, we'd -- everybody would be talking about it. >> thank you. if it was written about a tool and dye company -- >> you think so? >> yeah. >> first of all, we wouldn't know and we wouldn't care. >> i don't know. i know and i don't care. he's the greatest industrialist of our time. >> he's the greatest single businessperson of our time. >> if he had a substance problem, which i don't think he had -- >> that's the question. does he have one or not? >> he passed all the tests. >> he's not a drug addict. >> he passed all the tests for

the nasa contract. why should we think that he's a drug addict? >> i don't think we should, and i think he mostly likely is not. it's two separate stories, although they are related by this idea that some of the board members party with him, so to speak. it's the inner relationships within the board and whether that is, in fact, a form of governance that is not a good one for shareholders. it goes back to the mccormick's ruling, throwing out his pay package a couple weeks ago. >> i think that is integral to what happened. >> who has he ticked off at this point who wasn't willing to turn on him in the past and now is? that's really what's going on. >> linda johnson rice who left the board in 2019? >> meantime, stories over the weekend about the ev slowdown making its way to europe where german sales of evs may fall as much as 14% this year because of fewer credits. jim, piper cuts deliveries and margins today. >> i thought that was

devastating. >> they say you should probably take this year to get educated on other non-automotive parts of the business. >> you have to. you need to achieve sustainable valuation. no longer upside from the vehicles, and by the way, they cut the numbers of the vehicles. i thought that was really significant. i thought that this piece just said, you're buying something that is radically overvalued unless they come up with something else. it's -- but you know what? i'm going to take musk's side for a second. this is like what happened with apple where the analysts decided to bury it if they didn't have a good guide for the cell phone, and then somehow, the stock goes to $179 and then bounces back to $186. i think if you look at this and say, this is what -- this is my tesla file -- what should control tesla, cathie wood will take it right up. she'll buy every single share, take it and bid it until it's up at the end of the day, because that's what the buyers do. they control the flow.

that's been the case since this thing came public. >> and you think that happens somewhere here in the 180s? >> absolutely. that's what they do. the buyers -- the fan person buyers, taking bids. >> these street lows of $150, you don't think we get there? >> good luck. there's too much enthusiasm. and yes, i mean, "the journal" may try best as it can to get gensler involved and take a hard look at this because of the web of independence. they related it to what in the article? >> i don't think anybody was under the illusion that you were getting a typical board or company to begin with. my god, remember solar city? yeah. you know. it's different. >> whenif you read the piece, d you really feel differently about musk? >> no. >> i didn't either. >> it was nothing i didn't know. >> he's a genius, and there are times when he has a party. >> so, your view is just caveat

emptor on governance? >> this is in the "griselda," which is really good. parties on yachts. >> tesla now worth about half of meta after that record-setting market cap surge on friday. biggest by any company ever. we'll talk about what that means for the business and the future of social media. take a look at the premarket. there's going to be a lot to get to this week between the likes of disney and paypal and uber. back in a minute. oh, charades! - okay! - love it! umm... first word. - tonsillitis! - nostril! uh-uh... bill! uh-huh... - hip-hop! - limping! mmhmm! medical bills! uh-huh! - pancakes! - cash! who pays you cash when you have medical bills? grrr! no idea. [tapping] gap! the gap left by health insurance? who pays cash to help close that gap? aflac! oh, aflac! get help with expenses health insurance doesn't cover at aflac.com

pictionary?! were you worried the wedding would be too much? nahhhh... (inner monologue) another destination wedding?? we just got back from her sister's in napa. who gets married in napa? my daughter. who gets married someplace more expensive? my other daughter. cancun! jamaica!! why can't they use my backyard!! with empower, we get all of our financial questions answered. so we don't have to worry. can we get out of here? i thought you'd never ask. join 18 million americans and take control of your financial future with a real time dashboard and real life conversations. empower. what's next. [disconcerting stomach gurgle] not again. maybe i should get this looked at? [suggestive stomach gurgle] zocdoc? [talkative stomach gurgle] you're right, i bet they deal with this all the time. dr. finley really puts you at ease. let's do it! you've got more options than you know. book now.

you can make money the hard way as a bullfighter you've got mo or a human cannonball... or save money the easy way, with xfinity mobile. existing customers can get a free line of our most popular unlimited plan for a year! not only will you save hundreds but you'll also be joining millions who have connected to america's most reliable 5g network. sure is a lot safer than becoming a stuntman for money. get a free line of unlimited intro for a year when you buy one unlimited line. plus, get the new samsung galaxy s24 on us. running list of companies announcing job reductions continues. snap today, jim, is going to be cutting its global head count by about 10%. got some news out of socgen today. >> you go back over what musk talked about. i'm sorry. musk is on my mind.

mark. mark zuckerberg talked about. there was this moment in the middle of it which just said, hey, we don't need as many people to do this. we're not creating the content, you are, and we just -- just turns out that we can make a lot more money than we thought. david, if i were snap, i would do exactly what they're doing and just make more money on the ads because i thought that, by the way, the zuckerberg thing was -- made me tremble as someone who's in the media, on tv. where are the ads going to come from, for linear? >> i don't know. the numbers are staggering when you look at meta and amazon and alphabet, add that up compared to old media. it's not even -- >> david, what happened to cop shows, hospital shows? what happened to those? i mean, murder, homicide, ncis, what is that? do people not watch those? >> there will be some advertising for them. >> how about comedies? >> a good comedy is still a good comedy. come on.

>> i'm just saying -- yeah, that's larry david. >> your point is well taken, jim. we ran out of superlatives to describe meta's quarter on friday. it added, what, $200 billion to its market value. >> amazing. >> this is the point i made on friday, worth making again to your point, which is they reduced their head count from a high of 87,000 to 67,000. >> wasn't that incredible? >> and yet, productivity went the other way. what did they, triple their number per employee? so, that's what you want as a shareholder, certainly. >> look at what's happening with e.l. today. that's 3% to 5%. >> estee lauder, my travel trust owns it. it's been terrible. there's a lot of misclassification they went over. i wonder if the s.e.c. is going to take a hard look at that. to go to what they're doing is basically saying, look, there's an inflection point. actually, fabrizio called it an inflection point. when you use that term, you're

home free if you have enough credibility to make it work, and i think that estee lauder did. there's so much in there. jeffries thought it was okay. if you look at the stifel note, they're positive on it. and i think that in the end -- what's the matter? >> it's like -- >> this is my crib note. >> it's like a crazy man's -- look at this. this is what he's working off of. you knew this is what it looked lik like, didn't you? i know. >> that's called rigor, david. >> help me, i've been taken prisoner. >> no, no, it says, "didn't cut the margin outlook." and that's what did it. didn't cut the margin outlook. and then, i combined that with, "we are currently at an inflection point." i use brown for when it's really important and blue when it's somewhat important, and you probably think this is arts and crafts. >> are we finally a believer in this e.l. story, jim? >> got to listen to this call. i think there was a heavy short

position that once again china was going to take it down. it is a job-like quarter once again. higher-end products doing just okay. china to korea travel, bad. obviously, when you have -- you have duty-free, bad. i don't know what's left to be bad. even u.s. department store isn't sounding good. however, given all of that, they still are using minus 1, plus 1 -- consensus was too negative, and that's what did it. consensus was too negative. and david, just so you know, that's the -- that's the yellow line. consensus, too negative. that was worse. that was really important. and the consensus was from minus two, they're coming in -- it says it was for earnings per share of $208 to $223 and they're going to do it and the ebit margin is the same. that's called beating consensus, david. >> we'll talk more about e.l. we're going to dive into

caterpillar. jim umpleby is with us. we'll talk some mcdonald's and boeing and tyson. some pharma m&a, a cmendrar's "mad dash" as we count down to the opening bell. ♪♪ light work! ♪♪ next victims. ♪♪ you ready for this? ♪pump up the jam pump it up♪ this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. they're waiting for you. hey, do you have a second? they're all expecting more. more efficiency.

more benefits. more growth. when you realize you can give your people everything, and more. thank you very much. [applause] ask, "now what?" here's what. you go with prudential to protect, empower and grow. with everything you need to deliver, you guessed it... more. one more thing... who's your rock? learn more at prudential.com the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado.

we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

all right, let's get to a "mad dash," about seven minutes before we get started with trading for the week. on friday, i talked about the decline in charter communication shares, which impacted the shares of our parent company, comcast, as well. had a very bad day also after better-than-expected earnings in many ways. >> yes, yes. >> there's now the follow-on from analysts, not unexpected, many downgrading the stock. >> wells fargo. they had a buy on it. jpmorgan, surprisingly, had a buy on it. david, remember -- >> no longer. neither have a buy any longer. >> right. donald rumsfeld, unknown unknown. acp is a known unknown. what do they mean by that? >> that program is coming to an end, which subsidizes people broadband and/or wireless connections in rural areas and charter is relying on it perhaps more than the other companies

are, and so there's a -- you know it's coming, but i guess you still don't know the impact. maybe that's what they're referring to. >> david, you remember charter in the 2000-2003 period where it was down every day? >> yeah, well, it went bankrupt. that's not happening here. >> i rest -- the prosecution rests. >> not at all. >> okay, that's not -- i want to be sure about that, because -- >> listen. broadband subs declined more than had been anticipated, and average revenue peru user was lower than anticipated. i've been talking, you have as well, about fixed wireless and/or simply about people substituting their 5g phone and just watching, i don't know, maybe kids don't even have tvs anymore. but you do have to wonder whether t-mobile's fixed wireless product, verizon moving so strongly into it as well, is starting to have an impact. >> mike sievert from t-mobile

would say, starting, jim? and then we would talk about dave matthews. >> you come up against the capacity issue that they're much better off selling a wireless subscription in an area where they have the capacity to offer broadband and eventually they're going to be able to do that, and so it's a limited service offering. it's the belief, but we'll see. maybe not. >> maybe the younger people just say -- >> just use my phone. and then my vision pro. >> my kids have netflix. they watch me on youtube. >> we got to go. we got an opening bell. we got a lot more things to cover, including that novo nordisk deal. you can find us anywhere by listening and following the podcast.

you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. got some more aircraft problems for boeing. the company says it has to rework 50 of its 737 max jets slated for delivery due to some misdrilled holes on spirit aerosystem fuselages, jim.

meantime, you got "the ft" with these comments from the head of emirates saying, this is last chance saloon. we trusted these people. >> it's incredible. emirates has a real substantial a airbus position. maybe this is finally a customer of some size that the previous ceo spent a lot of time with me telling me that emirates was boeing's, that emirates was going towards boeing, and i thought that this showed me that perhaps the previous ceo, muilenburg, his -- his opportunity may be -- >> we'll pick up on that point in a moment. let's get the opening bell and the cnbc realtime exchange. at the big board, specialty chemicals company element solutions, nvidia anniversary and at the nasdaq, cognyte with

its 30th anniversary. your point on boeing is that it might not mean you switch to airbus, but maybe you double down on airbus a little bit. >> yeah. i do. look, when i look at what's going on with boeing, it's spirit. they indicate -- they have been very cagey. we went full bore, i think, on calhoun about whether this is something, maybe, they should rethink the relationship with spi spirit, which the relationship -- they're killing every supplier to boeing. the relationship is so questionable to me, and you can continue to argue that it doesn't matter and it's really owned by boeing, it's boeing's fault, and that's great. that's great. that's great. they fall on their sword. how about just dealing with the problems at spirit, point-blank? maybe this was a questionable relationship and they ought to buy spirit if they had the balance sheet so they can get it under control? >> you certainly brought that up with calhoun last week. >> they don't want to go there. they don't want to go anywhere. they're just hoping to ride it

out, figure the media will get exhausted eventually. won't comment on it. i think these are airplanes. i think the media's never going to give up. >> certainly dinging the dow here, boeing, on top of the additional weakness that we're going get, jim, from the powell comments. although interestingly, the head of the boston fed said this was a confusing interview in which pelly's voiceover sort of references -- does it increase more uncertainty? >> i almost felt that it was a general mass audience view. >> i'm a little afraid that "60 minutes" may not have a deep understanding of fed policy. >> happy birthday, jay powell. >> sorry about that. i'll stick with tim rose at the "journal" or steve liesman, please. not -- or sara eisen. not scott pelly. no offense, scott. great journalist. not his area of expertise. it's our area of expertise. >> i think at the end, you turn

to each other if you're watching with someone and you say, that was nothing new, let's do back to what we were watching. anyone who's selling on this is, like, reacting to news that came out before the employment number. the employment number was significant. >> it was. >> but interest rates, you know, look, we've got the -- >> quite significant. >> we have everything going back to 4%, but one of the things -- it doesn't hurt any -- housing has not been hurt at all. >> well -- >> no. c kashkari has a piece out today suggesting the neutral rate is higher than we think. >> that's the end of the soft-hard. the neutral rate is high. it's working, and we have an economy that's growing with a little bit of inflation. now that we saw the number on friday. you go back and do the interview, you would have to say, well, wait a second, we have wage growth. is that sustainable? is that going to cause inflation? >> right. guys, we did have a deal this morning. we actually had -- we had a few

deals, but catalan is the one i want to sort of focus on this morning, given both its size and also our viewers may recall this is a company that had just a series of issues, whether it was manufacturing issues, because they manufacture -- their key business is manufacturing drugs for other companies. they're the manufacturing sites for many of the drugs that we know well. series of issues there. then, with -- in terms of their financials. elliott came in, activists, there was a deal or at least there was a thought that it might get sold at one point, but it didn't, and now it is, and that a nice premium. not an all-time high. $63.50 is the price. and the buyer here is novo holdings, and i have to say, jim, i was not -- i'm sure you were because you always know these things -- but i was not aware that novo holdings, which is a part of the novo nordisk

foundation, basically manages the assets of this foundation, which has over $100 billion in assets, is the controlling shareholder of the company that we also talk about so often, novo nordisk itself. why do we talk about it? because of glp-1s. its big drugs, ozempic and wegovy. >> wasn't it quite weird that that one entity bought the three plants? >> yes, the deal is, as such, premium deal for catalent, which has been a problematic company. and then immediately, they're selling three large manufacturing facilities. they own many more than that. selling for $11 billion to novo nordisk, which would seem to put them in a position to meet the ever-growing demand for their products. they're paying quite a price for those three facilities. >> elliott partners, mark steinberg, the person has wide-ranging interests.

>> apparently he's a renaissance man. >> yes, he's a renaissance man, but i'll tell you one thing about this deal, carl. let's cut to the chase. the demand for these products are insane. some of them might have said, wait a second, this is going to hurt eli lilly because they have the capacity to meet demand. no, no, and eli lilly is up because this is just one more sign that you can't make enough of this stuff. there's new trials coming out. we'll be spooeeaking to eli lil but i think this is once again a referendum that there's so much demand and they cannot -- there's no way they can meet anywhere near the supply for this. david, maybe you can stop me on this, but i don't think it really created a lot more ability to make it. >> no. but you know, in terms of timing, expected to have low single-digit negative impact on profit growth in '24 and '25. and it's an upfront payment of

$11 billion. that's enterprise value for the sites. plus additional value for corporate assets and liabilities. first, you got the get the deal closed. sorry. >> someone might think that's glp-1, but it's international. >> right. it's actually also off earnings, right? why don't we talk about it? >> the international miss, interesting. the comments, jim, about the misinformation, disheartening, ill-founded about the international. comments about the low end, losing some traction about the low end as it's now cheaper to go to the grocery store than it is to eat away from home. >> this is the costco issue. costco's put through major price cuts. the meat section, the -- we were -- it was radical, prices i saw this weekend. this conference was not unlike laxman narasimhan's conference for starbucks. starbucks hurt more

domestically, no ties with israel, but it was -- look, i think he's being very prudent in talking about how the lower end is hurt. i mean, same thing with dollar tree. they should be -- there are consequences to having locked into lower wages with higher -- as powell said -- higher food prices. but one way to conquer it is to go to the supermarket, but go to the right supermarket. go to walmart grocer or costco grocer, and you're going to see prices that will make it so you wouldn't -- you don't have to worry about going out. you can stay in. by the way, remember, don't forget what american express said. younger people are going out like crazy. low-end, no. high-end, spending their darn fool heads off. including chili's. >> you're all about chili's now. >> i put up the hamburgers, i had the most tiktok -- the most

tiktok i ever had was when i asked mr. hunt about taylor swift, and that was all it took. suddenly, i was in the top 100 tiktoks. >> jim, you tastarted the show talking about earnings and the takeaway we've gotten. i would say the one takeaway that investors seem to have is that a.i. is ascendant, it will never stop. >> the goldman nvidia piece? >> i didn't see that piece. i'm just looking at the stock price, up another 3.25% this morning. that is nvidia. >> i said, own it, don't trade it. >> very close, carl, to a $1.7 trillion market value. >> all aboard. >> it's not that long ago, of course, we can all remember when it just crossed the trillion dollar mark and here it is, 70% higher. >> did -- zuckerberg, i wanted to know whether zuckerberg bought so many of the graphics cards that he blocked other companies, butthere's a goldman piece this morning which talks about all the large -- the, you

know, nvidia, now beleaguered alphabet, i'll call them that. obviously, amazon, meta -- i mean, microsoft. they're just buying so many of these that zuckerberg, i felt maybe he's buying for stuff he doesn't know about yet. he's betting. >> goldman goes to $800. i was looking at the street, jim. average target now, $680, but of the majors, goldman is the high -- luke still has $1,000. there are some outliers. >> they're now saying that '24 is not an inflection. next year is going to be huge. there's really no limit. i mean, the 200's going shift. people were confused by the amd head-to-head nvidia because nvidia did not have the software stack included in their -- the contest there, but i think that nvidia is enabling you to be able to do a lot more things with chat and a lot more things with a.i. than you could before, david. including footnotes started.

that's the way you get rid of hallucination. you can footnote things. it started in november with rag. it's a form of -- rag is a form of artificial intelligence that allows you to reference things. >> you can -- where do you find these footnotes? >> the nvidia blog from november. it's finally come true. it's really excellent. >> meantime, last night, b of a had a desk note basically just musing about which company is going to make a.i. click for the consumer. >> interesting. >> and this desk's view was that it would be apple, whenever that is. it would be apple. do you think that's right? >> i think that samsung right now has some pretty cool stuff where you can draw a circle on something and then, like, let's say you did mezcal. immediately, you would see everything because out pops the google entry. that's what -- that could be edge. the idea with edge, just so we know, is that this was, david, that this machine itself will

not require you to go to the cloud. it will be right on there. >> and eventually right in there. >> yeah. >> yes. but it matters because if this is more powerful -- we're down to apple's benefit, and apple's obviously a.i., but apple, its best days are ahead of it. >> wow. nvidia. wow. >> let's go to break. >> i told you about nvidia. you said we would be safe shorting nvidia. you were wrong. >> i never said that. i never said that. that's a lie. >> that is. that was a bold-faced lie, but i saw it on tiktok. >> take a look at the bond market. we're going to get services data, pmi in a minute, and then ism at the top of the hour along with the senior loan officer survey and bostic this afternoon. ten-year, 1.12%, back moment.

(fisher investments) it's easy to think that all money managers are pretty much the same, but at fisher investments we're clearly different. (other money manager) different how? you sell high commission investment products, right? (fisher investments) nope. fisher avoids them. (other money manager) well, you must earn commissions on trades. (fisher investments) never at fisher investments. (other money manager) ok, then you probably sneak in some hidden and layered fees. (fisher investments) no. we structure our fees so we do better when clients do better. that might be why most of our clients come from other money managers. at fisher investments, we're clearly different.

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

welcome back to "squawk on the street." rick santelli here live at

cme hq with the first of the breaking news events of the week, starting out with s&p global, the services pmi. these are january finals that will replace mid-month read. mid-month, 52.9. take 0.4 away and you arrive at the final read of 52.5, best since july. and even though it was downgraded a bit. now, if we look at the composite, 52.3 was mid-month read. it also gets downgraded by 0.3% to 52.0. 52.0 equals august and july of last year to find a higher number, you have to go to june of last year. we still have ism services pmis to come out, and that will be top of the hour. do keep in mind we're seeing a bear steepening, less inverted on the yield curve, rates across the curve are higher, but they're higher in long maturities, and the dollar index is on pace for its best close

since mid-november. "squawk on the street" will return after a short break.

you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? did we peak your interest? you can get two unlimited lines for just $30 each a month. there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable 5g mobile network nationwide. wireless that works for you. it's not just possible, it's happening. caterpillar hitting a fresh record high after posting an

earnings beat and many other things that drive this stock. we've got caterpillar chairman and ceo jim umpleby joining us on exclusively now. i'm going to outright congratulate you because i know last time you reported, the stock goes down, people didn't understand what went on. you were very clear on "mad money" that this was the beginning of a major breakout. what does the breakout conclude? it's obviously up 120 points since that interview. >> great to be with you, carl, and david this morning. let's just start by thanking our global team for another strong quarter and an outstanding 2023. record financial performance. and to answer your question, what's really driving it was sales and revenues, all-time record, up 13%, adjusted profit per share, again, all-time alld up 53%, we're very proud of our team's ability to generate cash. our free cash flow was up 74%, all-time record of $10 billion. and we returned last year $7.5 billion to shareholders through share repurchases and dividends.

again, couldn't be more proud of our global team and how they've performed in the last year. >> i think one of the things that i think people have to understand is that this is a new cat. when i read demand may be healthy for nonresidential and residential construction, nonresidential includes infra, spent also this year, but data whe when the. >> we serve a variety of diverse end markets and excited about the opportunities. we believe our total addressable market is expanding due to the secular growth trend and data centers and the growth there due to cloud computing and generative ai. we're excited about the opportunity. we announced in our investor call we're making a large multiyear investment to increase our manufacturing capacity around large engines. those will help us serve that growing demand in power generation around data centers. also we believe there's an opportunity over time through the energy transition, as more

renewables are added to the grid, our large reciprocating engines and gas turbans can provide grid stability and those t tur turbins burn a variety of fuels and we're excited about what we see as growth opportunities moving forward. >> one of the things that has dogged your concerns i think incorrect ply, there had been a belief there was too much inventory. that's no longer the issue. i think you have an equipment shortage. you did note there could be a dip in some businesses, which i think is one of the reasons why the stock is coming down. can we clarify that? i think that was -- that the dip so to speak was in one bit of business and should not color 2024 earnings. >> yeah. as we think about dealer inventory it's important to keep in mind our dealers are independent businesses and make their own decisions about their

inventory and the decisions they make are based on a variety of things, one availability of equipment and other what they see happening in the marketplace. so as the supply chain constraints have started to ease, our availability has improved and that's allowed deal, again, to make different decisions and our customers as to when they place orders for machines. the bottom line on dealer inventory we're in what we consider the appropriate typical range for dealer inventory, so we're not concerned about that at all. >> now i did want to talk about the fact that supply chain is now good. we spoke to newcorp last week and one of the things nucore said was the business you're in machinery was weaker. it wasn't you. i think when i see supply chain ease, what that tells me is gross margin going to get better this year which matters tremendously, and also i think you can meet the demand of the hottest units. >> well, we have been working very hard to increase the resiliency of our supply chain and we're continuing to work on that.

as i mentioned, we had seen supply chain conditions ease, but we also talked about the fact that we are still facing some constraints around large engines and that has an impact on power generation, oil and gas and a bit in our larger machines. again, we feel comfortable where we are. we're making the right kinds of investments to continue to profitably grow our business. >> let's talk about infrastructure. i was surprised actually you didn't need to emphasize frankly because you have core business, but i have to believe when we talk about chips and ira this is not something that necessarily ends in 2024, if anything, seems like it's just starting. >> well, we had a strong 2023 in construction industries and we told the investor -- our investors today we expect another strong year particularly in north america in 2024. of course, a lot of that is under pinned by the infrastructure investments that are government supported. we feel good about what we see in 2024, and it does take time for permitting to come through on many large prompjects, as yo

know, so the infrastructure investments will play out over time as the permitting processes conclude. >> in the old ays, you would a relationship with a business that may be in construction. we announced the collaboration with microsoft and power systems demonstrating the viability of using high format hydrogen. a new customer set and drill down because you did mention the sustainability, because this is -- again, a market that's 2026 and 2030 as far as i'm concerned? >> so we're investing in a variety of sustainability initiatives. one is making our traditional equipment more efficient and we're doing that and we talked about a new product that we introduced recently that is improving fuel efficiency, which improves emissions. as you mentioned we're also working with our customers to really work on some cutting-edge kinds of advancements in sustainability with microsoft and we were the systems

integrator and able to demonstrate hydrogen fuel cell backup for data centers. at the same time we are supporting them with our traditional machines as well. we're supporting the customers today, we're also investing for the future to support them as they strive to meet their sustainability objectives. >> finally, jim, i know you had a comment on the call about china demand specifically on heavy excavators. can you talk about what that trajectory looks like? >> china typically if you look over a long period of time repre represents 5 to 10% of our total sales. we had a couple strong years in 2020, 2021, further decline in 2023, and we told investors that we last year were below the 5 to 10% range. we expect that market to be relatively weak again this year. that market for us is primarily hydraulic excavators above 10 ton. again, regardless of the fact

that chinese market was relatively weak last year as i mentioned we produced record results. >> thank you for coming on. it's special to have you on right after the call. really appreciate you. the ceo of caterpillar. >> thank you, jim, carl, david. we have this guy jason gourd, he's really fabulous, puts out a memo citing something we did for the travel trust involving data and how we held on and we got the gain. we're going to tell that story tonight. i would not have -- i would not be self-reverential, i am of jason, who is a guy that doesn't get enough credit because we don't talk about behind-the-scenes people that make us smarter. >> all our behind-the-scenes people don't get enough credit. >> all of them. period. >> the nvidia short never was you. it turned out it was dark web on tiktok. >> if anything, it looked positive on it. listening to you, jim. shares of which are now up 4.7% and it is a $1.7 trillion market value. >> i have to rename this dog.

we have ragged and tony. we have to go back. >> jensen. >> jensen. >> here, jensen. >> doesn't anyone to anything other than a piece of steak. who cares. >> 6:00 p.m. eastern time. holding 4950. ism services on the way.

how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now.

welcome back to "squawk on the street." rick santelli with live breaking news at cme hg and the ism services pmis are hitting the wires for january. 53.4 on headline that is much better than anticipated and sequentially higher than 50.5 in the rearview mirror. highest level since august when it was 54.1. on the prices paid side unfortunately it's moving up as well. we don't really want prices moving higher. 64.0. sequentially following 56.7.

that would be the highest level going back to february as i said. unfortunately the lowest level we've had region is in the rearview mirror 56.7 from last month december, that was the lowest level since mid-year june last year. on the employment front, 50.5. it's much better than anticipated because it's over 50. in the rearview mirror 43.8. 50.5, best level since november when it was 50.6. on the new orders front, 55.0. sequentially. much better than 52.8. 55.0 best level since october of last year. and these better isms, especially the prices paid being higher, is pushing yields up. we're now hovering around 414, up a dozen basis points in 10-year note yield. back to you. >> what level are you watching, rick? we're starting to get lifts in

yields here, post jobs, powell, and now this. >> in my opinion anything above 409 to 410 that's what i would use to pivot. we're going to be guns hot here, especially on the longer maturities. i'm looking for higher yields to test around 4.25 over the next several seconds. >> we will watch. thank you, rick. rick santelli. good morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber, live for you as always from post nine of the new york stock exchange. take a look at stocks. we're starting a little bit weaker here. down about 0.3% on the s&p. the nasdaq down 0.3%. two sectors higher, health care and information technology, the semiconductors are up, nvidia is up another 4.6%. as far as big cap tech the others are taking a breather minus alphabet. treasuries strong data equals

higher yields. 10 year at 4.14, two-year at 4.46. 30 minutes into the trading session. movers we're watching. shares of caterpillar hitting all-time highs after reporting record full-year sales and revenues. strength in the company's energy and transportation business fueling the results. speaking of fresh highs, a number of firms hitting highs, eli lilly, cigna, uber among them. another day in the red for boeing and spirit aerosystems, boeing found more issues with the 737 max jets. much more ahead and details later in the show. let's start with some of the market moves right now. i mentioned yields. if you look at just widen out a little bit on the six-month 10-year yield chart, so we got to super low yields, at least for the current cycle, below 4%, and then since powell came out last week after the news conference we got strong jobs data, better services number,

with higher prices paid, little bit firmer university of michigan expectations on 10-year inflation rates, 10-year yield is moving up. that takes the dollar with it. the dollar is now at multimonth highs. some other major currencies, dxy tracks higher and pushes out the march cut, right. powell firmly did that. he doubled down on that on his interview on "60 minutes." may from 100% to basically a coin flip. people are eyeing the second half of the year for the first cut. chair powell did speak on "60 minutes" and reiterated his message in the news conference last week he needs to see a little bit more evidence of falling inflation. he did say the danger of moving too soon is that the job is not done and that really good readings we've had for the last six months turn out not to be a true indicator of where inflation is heading. we don't think that's the base okay, but he says the prudent thing to do is give it time and see the data, continue to confirm that inflation is moving

down toward a 2% level in a sustainable way. so now the market is moving, david, back toward that view. toward powell, more evidence and maybe, you know, maybe he's right when we see these high inflation, 5 services number, prices paid numbers, blowout jobs report that no economists expected or maybe he's being gun shy considering we were at 9% inflation in the summer of 2022. we're a long way from there. >> yeah, well, i mean, jim pos sited the theory, hard landing, soft landing, no landing, keep going. >> that's what people after the jobs report are wondering. is no landing really a good thing? no landing -- >> implies rates stay where there are. >> and restrictive and tightening in the economy and maybe increases the chances of a hard landing later. >> how long do you consider them restrictive if we have an economic growth and job growth like we've been saying in at

some point do we say maybe they're not restrictive? >> they are because now that we have inflation coming down, real rates are continuing to rise. >> yeah. >> that could hurt the economy. ask someone in the real estate sector if they're restrictive, private equity if they're restrictive. ask someone late on their credit card -- >> restrictive compared to what we grew accustomed to. >> are they restricting the economy? >> us older people can remember a time when the economy was growing very quickly with rates similar. >> sure. i think -- >> isn't it possible that could be the case? >> it's possible that could be the case. although i would say, if you follow the company commentary and the outlooks, they're a little less bullish than the macro data and, you know, it's not the cleanest picture. there's other evidence in the economy of cooling and there was in the jobs market really up until the last two jobs reports, which went above 300,000 in

additional jobs. >> and we get headlines every day of job cuts. seem to. >> and that could be more of a cost -- >> in the january numbers. >> that could be a belt tightening cost move from companies at a time where because inflation is coming down, margins are getting squeezed. i don't know. listen to mcdonald's the cfo talking about a challenging environment. >> we continue to operate in the challenging environment with varying levels of headwinds across our markets. looking ahead to this yore, we anticipate these headwinds will continue as the current macro dynamics continue to weigh on our consumers and our business results along with the war in the middle east. >> of course a big part of the weakness they're talking about is nothing to do with the united states. >> it's geopolitical issues. brand perception. international. that's where the miss was. but generally, you know, people are still looking at geopliolits as a risk. powell said that was the biggest risk for the economy. we're still watching the houthi

attacks ant tand the potential impact on shipping rates. downside risks ahead, but the economy is in a good place if you look at some of the data. the major averages are lower but we're coming off our fourth positive week in a row and our next guest helps manage $325 billion. joining us is chris alman, chief investment officer at calley ster. good to see you. >> good to see you. thank you. >> are you guys positioning or expecting weakness to come in the economy or for this kind of environments to continue? >> sara, where we're david said. we are neutral, on the market, at our target in the market, and we think that the powell pulled off the soft landing. the market got ahead of itself in november and december expecting rates to come down so quickly. david hit on point. we could do okay at a 5% rate. i would like to see it ease off.

it's a little bit tight because real estate and some sectors are having a tough time, but these earnings are amazing. it's not uncommon we have good employment but see job cuts in some sectors. these companies got to generate earnings and they have to tighten their belt. >> you guys have real estate exposure, right? i'm curious what's happening there and how much you're exposed to office in particular and whether you're having write downs? >> it has been coming down, sara. we have about a 15% allocation to real estate in total with all four foodgroups. the office component is doing okay, but we have seen that decline about 5% per quarter for the last year. about 20% we think verall is the typical decline. i warned about a year ago on your show that, you know, real estate and especially commercial real estate, needed to come down as cap rates changed with that

change in interest rates. we don't know. so many people like myself are working remote that office occupancy is barely at 50% outside of manhattan. so it's just a lot of uncertainty of what you do. then the other parts of the real estate market, as you heard data centers are doing very well, industrial at capacity, and in demand and apartments are still doing quite well, so mixed basket when you look at all real estate, but in office market especially, it's weak and you've got to look at the banks exposed to that. >> chris, do you think it could become systemic or is it simply something that's going to, you know, require significant reserves which are already in place and just play out over a longer period of time so that it doesn't represent a huge risk to the financial system? >> here i am just agreeing with david faber over and over again. maybe that's the place to be. >> it's not a requirement. >> exactly, david. it is not systemic, but it is a big risk to the regional banks

and people have to do their homework. powell even said that in his press conference that he was watching those closely. but it is not across the board. the money center banks, the mega banks are in good shape as far as commercial real estate. that market has to go through a transition. good grief, our life in the office changed dramatically after the pandemic. it's the new way of doing work. so office home occupancy is up 50% while office occupancy is down 50%. >> yeah. chris, in risk of not having us agree or perhaps we will, you know, hopefully we're going talkto talk a number of times before you step down as cio in june, but we've talked in the past and you've been at the forefront of esg investing to a certain extent, having been involved in the board changes at exxon with engine one, what are your thoughts about esg right now in terms of how it morphed, how it was used as a marketing

campaign by certain firms to raise assets but not really applied in a particularly constructive way, and where are you, given, you know, your position of significant power right now, how you think about it? >> david, i am way out of the front edge of this area and trying to push. it it's saddened that es and g, those letters, became so political. i didn't think they had a lot of residence with the average person. if i talk about pollution, i talk about labor rights and worker rights. if i talk about governance of corporate boards those things matter and still matter, even if people want to talk about them in other arenas. you're right, a lot of companies jumped on that as a new theme, changed a product, charged a rate and aren't living up to it. of those letters, es and g the one most dominant and going to change everything is the "e." we've got to change the way we use power, the way we get power.

the world needs more power. so that is a theme that i think is going to dominate for the next 20 years and certainly in the next seven years. i'm going to contribute the rest of my time not just in my career to focus in on climate and our energy transition. this is a mega trend, bigger than demographics. it's going to be a powerful investment theme. >> it's funny, just a follow-up here on something in the news right now, though, more in the "g" than the "e," tesla. i'm curious if you have any reflections in terms of the governance there, as a large shareholder in many companies what your thoughts are, particularly given it is an important company when it comes to the "e" in esg. >> it is amazing. i feel like saying i did not inhale. i did not attend a board meeting at tesla. i want to go on the record. i've never been on that board. good lord. it's interesting, david, i have

used tesla as an example, when interviewing people for our esg position, i would ask them, is tesla a sustainable company? because you're right there's a lot of people that are big fans on the "e" side, but good grief, governance has been horrible. the "s" side, their issues with labor and employees has been a huge challenge, so i don't know. obviously, elon musk is brilliant. he is a genius of our time, like steve jobs and some of the other amazing people, but very eccentric and different, and the governance of that company, i have been worried about the governance of many of our big tech companies because they've been empowered management to be kings of their company and they need to be held accountable. >> thank you for joining us. we appreciate it. >> thank you, sara, good to see you again. >> you too. as we head to break our road map for the rest of the hour. boeing shares down after

discovering more issues with some 737 max planes. we'll have the latest. plus we've talked about mcdonald's. it did miss revenue targets but what is ahead for the company? we're going to speak with one analyst who calls the stock a buy. and meta's massive move, friday's rally, the biggest one day market cap gain for any company ever. a closer look at the health of the tech trade when "squawk on the street" continues. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term

policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

mcdonald's with mixed results missing on revenue after a drop in international sales, although ceo chris kempczinski is confident amid macro challenges. asking about the war in the middle east and impact of boycotts. david palmer joins us this morning and has a buy rating, target of 330. good to see you again. seems like the biggest chatter is surrounding this normalization of comps back to the 3 to 4 range. >> yes. the -- there is a little bit of a back to the boring, but still very good comps this company was doing precovid. typically that long term average is 4%. the company is talking about getting to 3 to 4% next year. that's going to require share gains to do that. the industry is starting off slowly, but should have some growth. mcdonald's should be in a good position. they're talking about doing some more value in the u.s. having to get sharper in value in places

like france and overseas absorbing some significant boycott head winds. >> i wonder does that get worse? how long -- i know it's impossible to guess how long it will last. characterize the bite it is having. >> you know, you can see middle east is down. there are other markets, countries, malaysia, indonesia down. even france being down. they cited pockets of that country being muslim based, being part of the reason why, also they think they could be better in their marketing in that country, so there's definitely a bit of an impact there. then being near flat on the idl, their licensed markets, which primarily is emerging markets, includes all of that headwind, hard to know how many percentage points of a head wind that was to that market. that's not as important as the operating markets internationally and the u.s. over 80% of the profitability of

the company. that's where they make their money in those markets. they are stable in a multiyear basis. the company is hoping for that multiyear to improve into '24 and they have the tools to do so. part of that is going to be doing more value in '24. >> david, what's happening with food inflation and labor inflationwhich have been such swing factors for the whole restaurant industry? are they a headwind or tailwind at this point to mcdonald's? >> they're still a headwind. they cited mid to high single digits, labor inflation, in '24 in the u.s. and that number surprised us a little bit. of course, they're including that california wage increase in that number outside of that market feels like it's more mid single digits, and that with the type of pricing we're expecting is a little bit of a headwind. food is going to remain moderate

as inflation so that should be a partial offset. these guys are good at value engineering and find a way to get you to order the stuff that's high margin for them, chicken, for example, or beverage, while also portraying value, so i would imagine this is going to be a year where they get back to doing some more of that stuff where they can try to mix their margin back to flat to up. >> yeah. bringing back lessons from yesteryear and see how that works. good to have your take on the call and your updated guidance on it. thanks. david palmer on mcdonald's today. >> want to show you what's happening. the dow is ticking a leg lower. mcdonald's the biggest weight at this point, 66 points off the dow. most other dow stocks are lower as well. we're heading down 400. goldman sachs, home depot, boeing, microsoft at the bottom of the pack. four higher, caterpillar, apple, merck. boeing shares under pressure again. new issues discovered about the

737 jet. the latest on the fallout after a quick break. stay with us. ♪ upbeat music ♪ upbeat music were you worried the wedding would be too much? nahhhh... (inner monologue) another destination wedding?? why can't they use my backyard!! with empower, we get all of our financial questions answered. so we don't have to worry. empower. what's next.

- [narrator] this house is a generac house and you're just the person to keep it running because a proud homeowner has a protective instinct and frankly, the brains to know the grid is gonna let you down sometimes. that's why when the rest of the block is lighting candles and looking for flashlights, you're ready to rock and roll. it's not just a generator. it's a power move. request a free quote today.

you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! shares of boeing under

pressure this morning on news of more production troubles at the company. let's get over to phil lebeau who can fill us in on the latest. >> this is an issue that came up because of a worker at spirit aerosystems the primary supplier for boeing that builds the fuselages for the 737 max. a worker at spirit aerosystems as they are going back through their production systems saying what works, what doesn't work, where there may have been problems the worker flagged there may have been incorrectly drilled holes. as a result the latest issue, it was flagged by spirit aerosystems and the fuselage in question, only a couple, and may impact 50 undelivered aircraft. they need to reinspect and see if they needed to do rework on the holes in question. as a result, near term deliveries may be delayed. it's not for sure. it depends on what they find when they do these inspections. last year boeing delivered just under 400 737 max 9 maxes and the expectation is that even

though they're not giving guidance in terms of deliveries this year, they expect or i shouldn't say, the street expects them to deliver anywhere between 450 and 500 maxes in part because they are -- they are producing at a rate of 38 per month right now and you do the math, along with those models that are already in inventory, then you get over 450. maybe as many as 500 maxes. that may be delivered. boeing is not giving guidance at this point. take a look at shares of boeing. remember, the company's production rate is currently at 38 per month and provided they do not have more issues that come up, they can hit that mark of 38 per month and take a look at shares of spirit. why are we showing you spirit? not only because this issue was flagged by a worker there, we get the q4 results from spirit. we'll hear from ceo pat shanahan tomorrow about where that company is, as it assesses its safety culture as well as its production systems and then tomorrow morning, you don't want to miss our exclusive interview with the faa administrator

michael whitaker and we'll be talking with him on "squawk box" about where things stand with the faa audit slash investigation of boeing. remember, they have more inspectors on the ground in washington. we'll get an update from mike really things stand at this point coming up tomorrow morning on "squawk box." guys, back to you. >> phil, holes that were improperly drilled on an airplane. how does that happen? how -- is that very uncommon? it sounds like a bad mistake? >> well, let's be clear here, they may not have been drilled to the specifications that boeing needs in order for the holes in question to be 100% in conformance. so it's not supposed to happen, obviously, but this is something that a -- what we have seen in the past problems with spirit in terms of the fuselages delivered to boeing have involved improperly drilled holes and again, we're talking about very,

very minute differences relative to what is in conformance, but boeing is saying and rightfully should, you can't have any variances. that's why when this was brought up by spirit, they said okay, let's do a reinspection and if necessary, let's do rework. >> gotit. it made it into trevor noah's comedy last night at the grammys, took a shot at boeing. anything could happen, he said, just like on a boeing plane. meta shares down following friday's enormous rally which added $200 billion in market value to the company and adding billions to mark zuckerberg's wealth. a closer look at the state of the tech trade and the stats on billionaire tech founders and ceos. e ck after a quick break with thdow in a little bit of recovery, down 353. rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror.

i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. why choose a sleep number smart bed? ibecause no two people riskssleep the same.nses only sleep number smart beds let you each choose your individual firmness and comfort. your sleep number settings. it's so smart, it actively cools and warms up to 13 degrees on either side for your ideal sleep temperature, and effortlessly responds to both of you. for your best sleep, night after night. now, save 50% on the sleep number limited edition smart bed. plus 0% interest for 36 months on select smart beds. ends monday. shop for a limited time and sleep next level. only at sleep number.

welcome back to "squawk on the street." i'm bertha coombs with your cnbc

news update. senate majority leader chuck schumer says the senate will vote this week on the bipartisan agreement released last night with tougher immigration and asylum laws. if it passes the $118 billion package would be the most aggressive border security and immigration overhaul in decades. however, it's still unclear whether there are the votes in the house or the 60 vote needed to overcome a filibuster in the senate. southern california being battered by heavy rains for a second straight day as a so-called atmospheric river parks itself over the region. governor gavin newsom has declared a state of emergency. l.a. had its wettest day in more than 20 years sunday. forecasters are warning of catastrophic local flooding in some areas. and beginning next year, dartmouth will require applicants to submit an s.a.t. or a.c.t. score. it's the first ivy league school

to reverse itself after the pandemic era policy that made the tests optional. i suspect a lot of kids were submitting them anyway. back over to you. >> thanks. bertha coombs. let's check in on the markets. weakness, almost every sector is lower. health care the only above. pronounced weakness in consumer discretionary and materials as we brace for another week of busy earnings and fed speak. mike santoli is here to break down the action and talk about this battle tested bull that we're in. >> the tests are ongoing. i would say you can look at a 20% gain over 3 months, not even a 3% pullback and say it's been smooth sailing, and it hasn't. it's been through an obstacle course exactly on the fronts that we're encountering today, which is, can the market embrace good economic news as it comes? the second year in a row the first friday in february, we got a huge strong employment report.

last year, february 2nd, over half a million jobs, and it caused a rethink in terms of how the economy was moving. and did we have to raise our expectations for where rates would go. 6% terminal rate. that was the talk back then. i don't think we're there. we're going to have to see more data. it is something that tells us how much did the market depend on and so and deep fed rate cuts. we're not going to get the soon part at least not in march. all that together with the market that is uneven. we have to acknowledge the earnings growth is coming from a relatively contained group of stocks and the rest are suffering. the russell 2000 down another 2% today. we've been able to kind of get through that and i would argue it's a nuanced picture than that because you have industrials still acting really well, you have i don't know three or four times as many new highs an lows in the new york stock exchange even on friday and you have i think one out of seven s&p stocks made a new 52-week high last week. not just four or six stocks, but

i think we have to be on at least pullback alert because we're in february, positioning got aggressive, and soft, soft landing became the consensus. >> the -- i know you've talked a bit this morning about the market started to differentiate within the magnificent seven. >> yeah. >> tesla, for example, very weak today. >> coming into last week i thought that was almost a key thing to see. you don't want it to kind of trade as one thematic thing or just pure crowding. it hasn't been. i think, you know, arguably alphabet's numbers were fine. we talked about this last week too. the response was met. and apple has been a shrug. that's probably better than not. the problem it reduces the number of stocks that can carry us, and i do think the only way the good economic news is a real negative for the market in a sustained way, if, again, a head fake that causes a mistake. bull markets don't end because the economy is too good unless it leads to we have to shut it

down. >> you mentioned the russell 2000 weakness. russell is down 5% this year. s&p and nasdaq is higher. the everybody came in said the small caps are going to get involved and we're having better economic data and that's not happening. >> that's where the yield sensitivity of this market is. so if you've noticed it's the breadth of the market that gets impacted by 10-year treasury yield towards the top. it's not, hasn't been yet, the s&p 500 as a whole. this is a delicate choreography that's going to sustain itself if we have to deal with higher yields and nominal growth and only the smaller market cap parts of the market that get hurt, but for now, it's been working. >> david and i were talking about soft landing versus no landing. feels like soft landing is more bullish for the stock market than a no landing scenario because in a no landing scenario the fed doesn't have to cut

rates. >> the issue is eventually you land. when we say no landing, none in sight or it's going to be a brisker growth until we get to that point, and it's what you were saying earlier. basically leads us to a point where higher for longer, you know, either breaks the economy or something. it's not because growth itself is bad. >> right. >> finally, i love sam today, when you get new highs in january and february, hasn't -- historically pretty good for the year? it has. all of the kinds of stats that say when this has happened, what happens next, are pretty positive for eventual multimonth performance in the market. that includes the big broad rally at the end of last year. rare momentum signals and it was like that's going to work on a 6 to 12-month basis. it doesn't tell you in the short-term also these are broad tendencies. all those things say 80 or 90% of the time we're up a year later, 10 to 20%. >> thanks, mike.

see you next hour. meta is giving a little bit back today. the stock surge last week was the biggest one-day market cap gain for any company in u.s. history. let's get to dom chu who is here to put it in context. >> $200 billion in one day of market value gains, sara. that's what we're talking about and to kind of put that in context, it eclipses the one-day gains that we saw in 2022 from the likes of apple and amazon tied to news catalysts. it's a huge move nonetheless. take a look at the charts that one-day gap was worth like we said around $200 billion. and if you want to look at that $200 billion in context of just how big it is, it's massive, no doubt about it. but look at some of the biggest companies in america. check these out, for instance. cisco systems right now is currently worth just around $203 billion. intel worth about $180 billion. abbott labs around $194 billion. that's how much it was.

adding like one of these to its market cap overall. if you want to look at further just look at some of the big brand names that american consumers know about, travelers on the insurance side, occidental, ford motor and hilton, $200 billion is the sum of all of these combined together. that's what $200 buys you. if you take a look, david, at just how big of a move it was, all of that translates into a massive gain, the biggest one-day gain in market history in the u.s. we'll see whether or not that sticks. for right now meta platforms back above that $1 trillion market, total market cap. i'll send things back. >> almost right around $1.2 trillion as you say. yeah. it's amazing. one reason why, again, given that accretion of value that we spend so much time focusing on these mega cap companies, because they do represent four of the well-known companies that you're talking about when they have an incredible day like meta

did. thank you. let's continue to focus on this rally. it did bump up mark zuckerberg's wealth as well not the only mega cap tech ceo seeing their net worth go up. robert frank has some of what i'm sure will be staggering statistics. >> big numbers, david. mark zuckerberg added $28 billion to his wealth just on friday. he's up $42 billion for the year. that brings his total net worth to about $170 billion. he's now in fourth place when it comes to the rankings of the richest people in the world. and that new meta dividend they announced is going to pay in $700 million a year in cash. big dramatic turnaround from 15 months ago. if you look at nvidia's jensen huang he continues his rise, up $14 billion this year. his net worth close to $60 billion. another one with a good day on friday that was jeff bezos. he added $12 billion to his wealth from the amazon stock

rise and disclosed plans to sell as many as 50 million shares over the next 12 months. at today's price that would net him about $8.6 billion if he sells all those shares and since he moved to miami he won't have to pay state taxes on that gain. he saved over $600 million in taxes by leaving seattle. bezos within striking distance of becoming the richest man again. he's only $8 billion behind musk so if amazon shares increase another 4.5% he will top musk for the first time in four years. speaking of elon musk, he is still the world's richest man, but he's also the biggest loser this year in dollar terms. he's down $24 billion not to mention what will happen with that big pay package. elon generating a bit more drama than generating wealth, guys? >> robert, you know, i know you're right up to the minute,

but i don't know if you've accounted for the 6.4% decline in tesla shares this morning? so it may be if you haven't, that musk, in fact, is no longer ahead of bezos because that's a significant decline and to your point, tesla shares down 29% this year. taking mr. musk's net worth along with it. >> you're right. i'm reluctant to mention sort of preclosing numbers. i tend to tally it up at the end of the day to make it official that bezos is now number one again. you're right, if we continue to see this trading pattern today, bezos will be back on top and musk number two and maybe even number three if bernard arnaout and lvmh shares rise. another one to watch gates and balmer with microsoft shares. bill gates wins again, the richest person in the world 30 years off the list. that could happen given what's happened with microsoft. >> i did he so a statistic saying if gates had chosen never

to sell shares to fund the foundation he would be worth about $1.3 trillion. >> wow. >> yeah. steve ballmer, when you look at the portfolios, balmer owns more microsoft shares and bill gates has other exposures. >> thank you. robert frank. dow is down 15 here. after the break, a rare interview with the ceo of occidental. she'll share her outlook for energy, when it comes to demand, pric a aho l me.esnd wleotor bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly.

the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

coming off its worst week since october as energy continues to face a murky outlook on the geopolitical and demand front. tyler mathisen is live from the investor oasis conference with a special guest to discuss. >> how are you, carl? good to see you and good to be here in phoenix at the smooeeds

investor oasis. i'm joined by vicki hollub. >> great to be here. >> let's talk about the oil markets. i don't want to linger too much and what's going on in the middle east in the red sea. you, occidental, are not a big foot flint that part of the world. you're domestic oriented. you have a perspective on what's going on there. what is happening? how is it affecting the oil market and what are the risks? >> we do have operations in abdu dhabi and oman and algeria. we're conscious of what's going on everywhere around the world. right now, what we're seeing at this point and i say at this point, who knows, it could escalate at some time in the future, right now, the red sea interruptions are really just that. they're causing rerouting of ships, shipping rates to go up, and more of a disruption in

terms of delivery than it is in terms of price. price right now in the near term is driven down by oversupply, so that's more pressure on oil and it's overcoming the threat of what's happening in the middle east because the reality is that in real time, we have -- we can see the data now, everybody is talking about oil prices, you know, 20 years ago would have been above 100. 20 years ago we couldn't see where all the ships were and what was happening and so we didn't have this real-time data that tells us that yeah, ships are managing -- >> now i can get it on my app and phone and see where the ships are. >> exactly. it's the oversupply is having more of an influence on price than the geopolitical -- >> is the market out of balance? >> the market is out of balance right now. again, this is a short-term demand issue, but it's going to be a long-term supply issue

because if you look at resources that have been discovered in the world, 97% of the resources that we're producing today were discovered in the 20th century, and in the last ten years, we've really replaced less than 50% of the oil we're producing. all the big fields have been found, so if you take the 20 largest fields in the world, 97% of the volume from those was discovered before 2000. so we're in a situation now where in a couple years time, we're going to be very short on supply, so the situation is going to flip. opec has tried to do is balance. opec plus, they're trying to balance the market in the near term so we don't have all this volatility. but it's going to become a problem bit end of 2025. >> let me move on, if i might, to some of the acquisition you did last -- well, last december of crown rock. $12 billion.

on the one hand you've been paying down debt. from the anadarko, at the time it was a wobbly one, but it has been vindicated, obviously. you've been paying down debt. here you're taking on more debt. talk to me about the debt posture of the company. what you are divesting and on the one hand you're paying down debt, on the other hand you're borrowing $9 billion or something like that to take on crown rock in the big permian producer. >> we didn't want to the dilute our shareholders by diluting shares. it wouldn't be the right time to make any acquisition with our shares. what we're doing with the debt is we have onshore u.s. a significant volume of inventory. and some of that inventory, though, is better in the hands of others because it's -- it depends on where it is within the basin.

so, we have some inventory that for us is 15 years out in terms of development. so, the reason we can do this and raise debt is we can sell that longer term inventory and actually convert that value, which is almost zero that far out, to real value today by purchasing the crown rock assets. >> and that's obviously in a very active part of the world in the permian basin. you have described -- balance sheet is strong, you're raising the dividend, financial position is right where it needs to be, in your view. let's talk a little bit about something i've heard you say is occi will become a carbon management company more than just an oil company. what does that mean? what will occidental look like because of that in 5, 10, 15 years? >> the way we see the world if there's 50% more co2 in the atmosphere more than pre-industrial times so it's not

just enough to shut down emissions. it's not enough to stop emissions from going in the atmosphere. we have to reduce co2 out of the atmosphere. we're leveraging 50 years for using co2 for enhanced oil recovery that will help us produce net zero oil from our oil reservoirs by using co2 in those reservoirs -- >> this is carbon capture. let me ask a quick question before we are wrap. carbon capture will proos net zero oil and will allow buyers of carbon credits to describe themselves as net zero emitters. that's one way to approach sustainability and environment. another way would be to invest in so-called green energy or renewable energy. that's not the choice you've made. >> because that's not our core competence. what we promised our shareholders, whatever we do is within our core competence because we know we can do it best. we're not wind manufacturers, we're not solar manufacturers,

but we do use solar and we think it's important for the world to use wind and solar renewables, but we invest in things we know how to make better. one of those technologies that should be in that renewable category in terms of zero emissions is a thing called net power, which we own 40% of. it will generate electricity by hydrocarbon gases. it too is emission free. instead of wind and solar, we use technologies that use co2 and generate electricity or generate net zero oil. the things that others can't do as well as we can here. >> i know you're a huge alabama football fan. pu like the new coach? >> i love the new coach. coach saban was amazing, coach bryant was amazing, and coach deboer is going to the next in a long line of successful football -- >> roll tide. >> roll tide.

>> vthank you, tyler mathisen from the smeed investment conference. 100 most just companies this morning. cnbc is just capital's media partner and brandon gomez is here to break down the results. tell us what's different this year. >> despite rising political division on esg and woke business behavior, americans are consistent on the core issues they want companies to prioritize. that's workers, communities, shareholder and governance, customers and the environment. across every demographic, americans were united in wanting americans to prioritize those workers first. providing a fair and living wage, creating jobs, and hbe the most just. meeting those needs. you see semiconductor names in the top ten as well.

thousand are they approaching dei with pushback? disclosure. they are more than likely to kublgt a pay gap analysis and disclose those results. are they sacrificing market returns like some suggest because of a split focus? breakout stock performance for these companies and data shows they're outperforming the broader russell 1000 equal weight. >> do you think anything has changed with dei inside of k companies? >> in the last few years we've seen an increase in disclosures. more companies are disclosing they're conducting that wage gap analysis, they're looking to have a more diverse board. take six months from now, come back and see if the language has

changed. >> i feel like what became clear this year is quotas don't necessarily lead to a more inclusive environment for cohorts at companies. >> we saw with bud light, the marketing backlash that happened there. again, company with nike, companies that are leaning into that direction. it comes down to the product base, but across the board you're seeing diversity good for business. >> brandon, good to have you here. >> good to be on set with you guys. >> all right. taking a look at the markets as we wrap up this hour, we have the s&p down 0.7%. tesla notable for the downside of 6.5%. we still have winners, including eli lilly up another 5.8% on continued enthusiasm around glp-1s. we talked about that notr voe

another tis deal. we have a lot more market coverage. the ceo of hogolic will join us and break down quarterly results.