artificial intelligence. it's tuesday, february 6th, 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 along with joe kernen and andrew ross sorkin. the futures this morning are a little bit mixed. the dow is down 75 points. you have the s&p relatively flat. nasdaq indicated up 40 points. you did see all three of the major averages pulling back yesterday for the first time in three sessions. treasury yields are around the same level we were looking at yesterday. you see right now that the t ten-year yield is 4.15%. the two-year yield above 4.1%.

joe mentioned stocks jumped in china after the report that regulators are planning to brief president xi jinping today. that fueled the speculation that the country could intervene further to support capital markets. earlier in the day, beijing's security regulator encouraged short selling. stocks up by 3% in shanghai and 4% for the shenzhen. and palantir shares jumping close to 20%. earnings coming in at 9 cents per share. full year guidance in line with the estimates. alex karp says this expansion has never been greater with the demand for large language models in the u.s. this is driven by a.i.

he hinted of this when we saw him in davos. >> the interesting thing with this, too, i think it was $200 million in revenue. i did not realize they posted a profit like that. that is a $34 billion market cap company built up on the hope and promise of what is to come. >> always the case. always the case. >> i love those kinds where it is not based on the bottom line. the top line multiple. >> $34 billion. the market cap. >> the multiple. even if it was earnings, the multiple could not be explained. for a long time, amazon. >> the same. potential investors in elon musk's a.i. startup x a.i. focusing on the network of companies. according to the bloomberg report said those selling points

were featured in a slide deck of potential investors. we will talk about the musk relationship with the board members and reincorporate in texas. we should note that elon musk has said he is not trying to raise money for x a.i. a number of reports that bloomberg has put forward and one by the ft and in all of the cases, he is saying he is not trying to raise outside money. unclear whose deck is the deck. >> right. finally, remember the door blew out? that means finally getting close to the end. the faa in the latest boeing crisis. the agency says it is 94% -- nearly 94% of inspections of the

planes have been completed. 135 of 144 grounded 737 max aircraft have returned to service now. the faa is responding to mike whitaker who will testify on capitol hill today. before he speaks to congress, he will speak to us in the exclusive interview at 7:30 a.m. eastern. you have a problem with one plane and you watch it ripple through an airline. they try to -- they don't have a lot of extra ones. we have one here. pull that over to the gate and let people get on. you can always check. where is the plane coming from when you have a flight? you know it is there and sometimes it is not there and it finally lands and they have to clean it. if you ground a lot of planes, it wreaks havoc.

>> there is no room for error. >> you have issues. the issues that were still occurring. oh, my gosh. the third plane was finally air worthy. >> by the way, our producer who flew before me, she had a six-hour delay and wound up on my flight. >> you know what happens. the lettuce is just sitting there or the chicken. rubber chicken. the palenta is festering there in the heat. problems. problems can occur. >> the bigger issue that boeing is facing is the labor problems cropping up, too. machinists are threatening to go on strike. they have a contract that expires in september. it will start negotiations in march. we will watch that closely. ten years ago, they had pensions taken away. they did not get big raises. they want 40% raises. they say they are threatening to

strike. this will be more issues that boeing will have to deal with before they can clear the air. >> you know who erresrres -- ern the side of the long tie? trump. the tie is always down. >> the segue for that, folks, i walked in and he said your tie seems a little long. because i'm sitting down. >> you have to re-tie it. the back of it is way up here. >> it's past -- once you get past the back. >> i will grant you one thing, andrew, long is better than short. i see people. you know who i see? actors on tv that don't know how to tie a tie because they never had a job. they are memorizing scripts.

>> short sleeve shirts. >> right. the guys on "the office." watch tv. watch some of those crime. they he ave no idea. that looks good. there is this much space. >> many of us have ocd. >> i told you i have ocd. >> i'm aware. >> i have tied a tie five times. i've been late here -- >> from re-tying a tie? >> yes. we are watching shares of bp. the company accelerated the pace of the buyback and raised dividend despite the drop in annual profit. bp's plan to buyback $14 billion through 2025 was not expected by the market. you can see the stock up 5.5%. meantime, ubs reporting a smaller net loss than expected

for the prior call citing the cost of integrating the rival credit suisse. the bank will resume buybacks up to $1 billion in the second half of the year. now plans to propose a 27% increase in its dividend. that stock off now about 4% on the back of the news. we are watching shares of snap. the social media company will layoff 10% of the work force worldwide or 500 employees. the move comes in part to promote in-person collaboration. snap's quarterly results are due today after the closing bell. media. a lot of layoffs in media. that stuff at cnn. a lot of people we probably have run into. i don't know how many staffers have been told to look for new places to go look for jobs. it's very difficult right now. >> "the washington post" and

"wall street journal." >> is it a disruption from all of the other stuff? >> strong numbers from advertisi advertising. >> have i got that right? >> other places with huge gains and not necessarily carrying through everywhere. a lot of places in particular that have to pay for streaming and figure out the cost. >> a lot of the streaming and debt. little bit too much debt by media companies. >> we feel bad. we do. you know, it is not -- we're happy today. coming up, get ready for the trading day ahead. futures right now as you see are down again. jay powell made it clear it is not happening any time soon. later, don't miss omega's leon cooperman. he will join us live at 8:00 a.m. eastern. we're coming right back. and ris, help make trading feel effortless. and its customizable scans with social sentiment

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just acknowledging it doesn't chai change what we have seen in the last six weeks. didn't we know the economy was stronger with the data points and near-term cuts weren't likely? >> good morning, joe. we knew the economy was looking strong. if you look at the economic data coming in for the last six weeks or so, it is hard to debate fed chair powell should cut rates. there is the belief he can overdo it and not do it soon enough and that can change the turn of things in the economy. you know, i think the market pricing in march cuts last year was, you know, not very accurate and unlikely to happen. i don't expect him to cut any time soon. i think we are looking at the second half of the year. i don't think it matters uch. we have 80% of companies reporting 8% year over year growth beats across the board. particularly the tech names.

the jobs are strong and the consumer is strong. loads of cash to come into the market. it seems to be okay for the economy. we have the soft landing. inflation is coming down. i expect positive momentum here. >> maybe the earnings part of the calculation stays solid or moves higher and maybe multiples don't go up because of rate cuts. if earnings are good, you know, you can pass the baton to better than expected earnings to keep valuations where they are now. sylvia, we have been talking about whether the phillips curve or whatever you want to look at with unemployment and related to interest rates. if inflation were continuing to moderate even if growth didn't slow, i don't know if the fed would cut then. there is a calculation you can do. core pce and figure out

short-term rates. you don't necessarily need a poor economy to bring rates down if inflation cools. >> yeah, that's right. i think what the fed is trying to do -- my sense is when you listen to fed chair powell, what seems to me is there is a lot of ptsd and transitory and what went wrong and not rising rates the first time. a lot of this is psychological. they are close to where they need to be. the fact they paused tells you it is time to go the other way. my sense he will hold on for a couple of months and make sure that nothing is heating up. once he gets a couple more steady reads, he'll start to cut. it is an election year and any policy decision misstep from the fed would be a disaster. he will err to the side of conservative here and get a couple more reads with stable inflation. it doesn't necessarily keep shooting down.

you can't keep bummping up. we're on that path. >> we have stayed in the low-interest rate environment. that was not normal. back-to-back with the financial crisis and pandemic. i don't know what normalizing rates is, but certainly you like to have a little leeway if there were a slowdown for you to cut. there's no reason to give that back or give back that dry powder if the economy is doing fine and doesn't need a stimulus, why not leave it where it is if you could be at neutral right now. why cut? >> well, i think there are a couple of things to consider there. the companies that are doing well right now are companies with heavy balance sheets. they don't need so much borrowing. you are talking about the magnificent seven. rates have not impacted them as hard as small cap companies which have to borrow at higher levels. you think about the general economy and ability to buy a

house and where mortgage rates lie. although they have been here before and the economy is just fine, there is a happy balance with zero and where we are now. if rates come down, you get a healthy economy in terms of being able to buy the first home. smaller growth companies are beginning to grow and thrive and expand the market per fornl an performance. we are close to where the smaller companies have not had a chance to grow. >> housing. sometimes higher rates can actually be inflationary instead of curing inflation. everything costs more. if you make things more affordable without engendering inflation, that is something the fed would like to do. is the leadership this year, sylvia, going to change at all? we have an election and we have

a different theinterest rate environment. do you change or stay the course? >> i'm not changing what i'm doing. i think a.i. is in its infancy. it was a buzz word last year and it is showing up in earnings and projections for the next couple years. earnings were not where we expected, but they are talking about $3 billion in growth in gdp. there is a lot of momentum in technology. who is a.i. and kwquantum computing? the six are thriving there. i think we will see expansion. it is an election year. two other sectors that are interesting that we don't talk about as much are travel, for exam example. 4.7 million people expected to

travel this year. you know, health care with ozempic weight loss is taking off and these companies are ones to watch. they have been dead bugs for a while. we see the performance. >> how many people are expected to the travel? >> 4.7 billion is the number i saw. >> i don't see how that's possible. travel how? a lot of people are not on planes plane s. >> planes, cruises. >> that is every person in the world. traveling across the street. i was going to say tongue-in-cheek, what is a bigger trend? a.i. or weight loss?

this company is buying other companies to make more of the weight loss drug. should i try that, you think, instead of -- >> what? >> which one? >> you tell me. >> i don't know. which has the least side effects? >> you have looked into this although you are rail thin. >> i haven't looked into it for me, but i'm fascinated by it. >> mounjaro. that's not a movie? >> no. >> he gave a great speech at the byron allen awards. sylvia, thank you. >> you are finally on board? >> listening to the rock. coming up, when we come back, a new ruling by the nlrb could clear the way for a college basketball team to join a union. we will bring you that story right after the break. "squawk box" returns right after this. there's notable names of

black ceos in the for tune 500. marvin ellison at lowe's and the latest addition of toni towns who joined the science corporation in october. they are among the eight ceos in the fortune 500 who are black. that is less than 2% of the list. still, it's a record number. celebrating black heritage. i'm sharon epperson. dad, we got this. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones

an official at the nlrb

ruled yesterday that dartmouth basketball players are employees of the school which could create the first labor union for athletes. all 15 members of the men's team signed a petition in september asking to join a union that already represents some other employees at the ivy league school. unionizing would lallow the players to negotiate salary and working conditions. they are able to appeal the decision from the national board. dartmouth in the news this morning. the other news is shock of all shocks, you have to have s.a.t. scores to get in. >> m.i.t. had done this a while ago. brought back the a.c.t. and s.a.t.s. when you look at that many students at one time, it is hard to narrow down who will do well in your clickurriculum. >> a great piece that makes the

case for s.a.t. exams and the ability to actually weed out or be able to see what is going on and makes the case that the test is better, not worse, arguably, for minority students. it gives everybody a more level playing field for those on the test. it is worth reading. >> if the ivy league still stands for excellence in the greatest institutions of learning, you would like to know the people you are admitting are exceptional. i'm sorry. the top ranked people. you want to do that if you want to maintain the excellence of ivy league. i don't know if it was an excuse during the pandemic or what it was. i think others will follow. is dartmouth green? big green? >> yes. green. >> you are big red? >> yes.

>> does everybody have a color? >> crimson for harvard. >> orange for princeton. blue and gray for yale. >> penn is blue. >> yeah. >> m.i.t. the beavers. >> does m.i.t. have a color? >> beaver brown, maybe. i don't know. the teams were called -- the class ring was a beaver or a groundhog. >> m.i.t. has sports? >> not really. clubs. honestly. i was surprised dartmouth. i was thinking employees of the school. they might need jobs. how about cornell? >> that makes sense. >> lacrosse. >> sometimes football. and lacrosse. >> never football. >> no.

>> there's been a couple of years with great teams. yeah. just saying. when we come back, we will talk geopolitical risk with china stocks and reports of market intervention. >> fencing. >> that is next. later, omega's leon cooperman will join us about the fed and much more. as we head to break, let's look at yesterday's s&p 500 winners and losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. he u.s. we see mis of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit,

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good morning. welcome back to "squawk box" here oncnbc live at the nasdaq market site in times square. the s&p is off 3.35 points. the stocks surged in china overnight after regulators were

prepared to brief president xi on the markets. that could mean beijing to prepare measures to boost stocks. and u.s. and china will hold economic talks in beijing this week. for this and other headlines, we welcome chief strategist marco popovich. welcome. let's start with the move we see in asian stocks overnight. moving up 3% or 4% overnight on the idea that xi jinping is briefed on the markets later today. the supposition is they can do more to prop up the markets. what have you seen with the chinese stock markets? >> it is a tactical opportunity to play a dead cat bounce. equities are not supported by an equity support plan. what china really needs is something to fix the fundamentals. they are in a middle of the

secular stagnation what we had in 2011 and 2012. they are struggling to cut interest rates. what they need is a bigger fiscal support package rather than focusing on equity performance. i also doubt that president xi really cares about equities. >> they changed their tune. an economic downturn is a really big deal. they have tried to woo more foreign investment. you have seen companies pull away and not invest there. they are changing their tune. i don't know if american businesses can trust that of american investors can trust that. they have changed their tune drastically. >> it took them so long to cut interest rates. if it takes that long to cut interest rates, when will you put in a fiscal support package? the good peril for this is not our experience in gfc or japan,

but it is europe. remember where we were waiting for the summit to end and merkel would come out and be supportive, use that as a support system to create a sustainable entry point. >> when you look at the middle east and the geopolitical turmoil there, what do you tell investors? not just from investing in europe and the middle east, but what about the oil outlook? >> we wrote a piece on october 8th. the day after the hamas terror attacks on october 7th. we told clients there would be limited implications of the israel-hamas war. one reason for the call at that time, iran and saudi arabia have a detente that is holding. they negotiated this in 2022.

we covered that in the u.s. from the perspective that china helped negotiate that. that wass irrelevant. what was irrelevant about the deal is saudi arabia conceded to iran on the number of geopolitical issues, but in return, iran has kept the proxies from attacking the saudi energy facilities. when you think about the houthis, everyone is focusing where the houthis are attacking. we should focus where they are not attacking. in 2022, adu dhabi. it is an important factor of stability although there is chaos. >> i can understand the stability in the oil market and instability, but what they have stopped doing is not just stop the israeli targets or u.s. allies and any ship that is going through the red sea right now. that potential escalation

because some of the things up to this point, including the u.s. service members killed a few weeks ago demands a response. we don't know what the response will be, but it is coming. >> we have had one. we are focusing on proxies. the statements on both sides is we don't want a wider conflict. there is a chance for something to go awry. my issue is the detente has kept oil prices in check. it is easier on the day of the attack. now with the oil at 75, i'm advising clients you have a nice entry point for a long oil position, not because of geopolitics, but sure, some risk premium makes sense. >> i'm amazed you were able to look at that on october 8th. that took a lot of people a lot of time to get our heads around it and it is a situation still

evolving. >> it is evolving. our framework is one of cons constraint. i focus on what policymakers and politicians can do and not do. a lot of people in the middle east want chaos. there are constraints to that happening at this point. >> you think that holds through 2024 just like a year ago where people were so concerned these things with the war between russia and ukraine and all these things would pop up. you think all of these, many boiling hot spots, don't create bigger problems for the year? >> for this year? no. it will be interesting for next year. i think president trump, if he were to win, he will use his negotiating tactic which has worked well in the past, will put pressure on it. i think now -- >> marko, do you think the saudis can continue to make

treaties with israel? that is what was part of the rationale to scuttle that deal. will that continue? will that allow the detente with iran to continue if they normalize relations with israel? >> that's a great question. i think for saudi arabia, the detente with israel is not as big as we make it to be. that say is a bigger factor for security. >> who do they like more? >> what is important for us to understand, joe, saudi arabia gave up a lot in the deal with iran. the issue is economic development. >> almost western. golf. western economic. >> closest thing to major restoration to japan in the last 100 years. i cannot emphasize how profound saudi transformation is here.

i would say they would continue to be realists and focus purely on the domestic and socio- economic. it is important to make a pitch to saudi arabia. >> marko, thank you for coming in today. >> thank you. when we come back, senators pushing back against a.i. regulation. we will take you there live next. a beautiful shot of the capitol. you can get of the latest on our podcast and listen any time. we're coming right back. hm? you! your business bank account with quickbooks money, now earns 5% apy. 5% apy? that's new! yup, that's how you business differently. 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

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welcome back to "squawk box." bill haggerty and ted cruz are introducing a new bill on finance. we have emily wilkins with more on that. good morning. >> reporter: good morning, andrew. federal regulators are only just

beginning to set down guardrails with a.i. they are already facing pushback from law makers. a new bill would kill a yet to be finished s.e.c. regulation on how financial advisers use a.i. the rule would require firms to ensure that any predictive technology they are using is free of conflict of interest and puts clients first. ted cruz and bill haggerty said the rule is too broad and s subsequently so costly prevented to be used by advisers. cruz said the new technologies over the last decade have allowed more americans to access the stock market than ever before by waging a war on technology that the s.e.c. claims to protect. the bill doesn't have democratic support at the moment, but republicans take it down the road if they hold the house and

win the senate this november. if so, they are overturn rules from the biden administration with a simple majority. andrew, we will keep a close eye on what is in the cross-hairs. clearly, the a.i. regulation from the s.e.c. is one of their targets. >> emily, thank you. we will keep our eyes on that and talk to senator hagerty at 8:30 a.m. up next on "squawk box," how tesla could reincorporate in texas. ann lipton will be here to talk about that and so much more after this.

they really need to get rid

of three or four board members and replace with independent board members that have no financial ties to elon. the problem with that is elon is not going to want to deal with those people. i learned this when i ran for the board a year ago. there's no desire from anybody at tesla or within elon's circle to have an independent board. >> welcome back to "squawk box." that was ross gerber. he tried to get on tesla's board. now the chaos continues with the delaware judge invalidating the $56 billion pay package. joining us now that it will move from delaware to texas is ann lipton. before we get to the delaware to texas move, weigh in, if you could, on the judge's decision. did you think it was the right decision or the wrong decision? >> i think it was a straight

forward application of settled principles and absolutely extraordinary situation. normally you don't have problems with the board awarding a ceo pay. a board has great deal of discretion to do that. because the tesla board is with the board awarding ceo pay, and because tesla's board is so unusually tied to elon, you can't trust the judgment of the board, and that left it to the court to have to decide whether the pay package was appropriate. >> can i ask a separate part. i want to break that down into two parts. i think you and i and reasonable people could both agree that this board doesn't appear to be as independent as you would like it to be? i think we could agree on that. what is less clear to me is whether you believe ultimately the entire shareholder base effectively are such sheep that

they all voted in favor of this transaction because they believed that the board was independent and it was their independence and blessing of the transaction that is what ultimately sold them on the deal? >> see, i think that's a really great question, because the fact is that on one hand we know this company, and this company is in the news all the time, and we know exactly what elon's relationship is with the board, so on the other hand, the proxy, she found it misleading. settled set set settled principles of law. >> now the court has to step in. she acknowledged he performed

amazingly for tesla shareholders, and that's absolutely true. the question is whether he needed the additional $56 billion in order to do that in order that he comped 21% of the company. he was going to make $10 billion for every milestone he hit regardless of the pay package. >> if the information was not there the first time around, couldn't they just take it to the shareholders again and get a vote? >> i think today you would say no because you already had the performance. >> that's exactly it. because they already had the performance, even if they voted yes, it would go into a legal different category, and that is waste and that requires a unanimous vote. >> let's talk about the prospect of elon moving the company to texas, and do you believe other ceos look at this situation and

say delaware is no longer friendly to business, or do they think it's wild and different and a unique case that we are happy to be in delaware and we like the legal system there? >> i think that's definitely what their lawyers should be counseling them, whether or not ceos follow elon musk because he's a role model is a different question. i don't know what those internal questions are, and i don't think ceos need to panic. that said, i think elon musk serves as their guiding light as to often what they think they should be doing, and they very well may be influenced by that. >> how do you look at the corporate legal landscape in texas as opposed to delaware? >> the thing is that it's very hard to tell. the advantage or one of the advantages delaware has is that it has had a system of corporate law that goes back over 100 years and that dominated the market, so we know what

procedures are required. other states have more trouble competing, in part, because we don't know. we do know a few things. obviously the state has been loudly encouraging elon musk to reincorporate there, and they are proposing new business courts that would be under tight legislature, and the judges would be up for appointment every two years, the governor and the legislature, and the court will sit with jurors, and there will be jury trials, unlike in delaware. and musk may find that is a more hospitable environment for him. >> and then the previous comp package, if it effectively gets terminated based on this judge's opinion, that creates -- and would somehow require a vote as we just discussed, i would imagine if you were a

shareholder today you might not vote for it because you have no idea. one of the things so fascinating about the deals they made is at the time it seemed completely wild and improbable, and the company was worth zero at the time and that's why the deal was made. then this happens and here we are. >> whether it was the right answer -- you know, i am really uncomfortable weighing in and i am glad i don't have to make the call. i think mccormick's opinions is important as she lays out the problems with the package and it's not clear something of this size was necessary to motivate elon musk -- >> this idea of necessary, there's a lot of things not necessary. i have complained bitterly about lots of different comp packages, and i think this comp package in a pay for performance way is more justifiable arguably enough

than a lot of other pay p packages, and this is somebody that has other options, and this is a guy that owned other businesses and was thinking about stepping back -- >> no, he absolutely was not going to leave tesla. >> it was not about leaving tesla, it was the role he was going to play at tesla was going to be. i remember this vividly because i remember reporting on it. >> one of her concerns is the board was concerned about that, too, and they enquired about being ceo and didn't do that, and he gave -- he's not the ceo of twitter, but he still runs it functionally. >> it's an interesting debate. ann lipton. thank you for your perspective. >> the shares of eli lilly, that

was a $500 stock at the end of the year, and now it's way above expectations, and revenue numbers are above and it has to do with what we were talking about earlier, meli lilly is almost a $700 billion drug company, and they also make jardiance, and everybody is dancing in that commercial because of jardiance, and jardiance almost $800 million drug, and the order delays for men jar yo. i was kidding, and what is the bigger trend, ai or weight loss advances, and it's staggering

what we are seeing. i am trying so hard, and i think i will get an injection. do you know? >> sorkin? >> i think you get it in your stomach. >> you get an injection -- >> never mind, i am dieting. >> needle in the stomach, nah. >> if i am not getting them in my forehead or vowels, i am not going to get it in my stomach. >> that's one way to think about it. >> the stock is up 40% in january and february, and it's a $700 billion -- it's going to be a trillion-dollar company because of fat people, or obese people. >> they are in the range of 40.4 billion -- >> huge. when we come back this morning, a cnbc exclusive

interview with the faa administrator, mike whitaker. that interview is straight ahead. "squawk box" will be right back. 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.

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good morning, everybody. the s&p 500 pulling back from its record high ahead of a fresh batch of fed speakers. we will tell you where we stand and what is ahead for your portfolio. plus an exclusive interview with the faa administrator mike whitaker ahead of a hearing on the hill about boeing and the alaska airline blowout. and then we will talk about

the musk onomy and the art of artificial intelligence. the second hour of "squawk box" begins right now. ♪ ♪ good morning and welcome back to "squawk box" right here on cnbc. we are live at the nasdaq market site in times square. i am andrew ross sorkin along with becky quick and joe kernen. the nasdaq is up -- we will call it marginally in the green. let's show you where the ten-year and two-year stand. people are still grappling with what jay powell said during the "60 minutes" interview earlier on sunday night. the ten-year is 4.456 -- the

idea of middle of the year, that was a voiceover in terms of what scott said about when it was all going to happen. >> i thought i heard jay powell say that? >> there was a voice over in one part that led you to believe -- go online and read the transcripts, it's worth it. >> i watched the interview. maybe there were two points or maybe the voice over convinced me -- >> it was like i said earlier, given what we have seen in the past six weeks, did you really need jay powell to say those pedestrian things on "60 minutes" to understand -- >> somebody did, and the markets moved yesterday which surprised me. >> i think the american public wants to see who jay powell is and what the federal reserve is and they want to hear from him? >> all he did was was confirm what we already knew. >> yeah, and that's making the

american public understand there's not a spooky thing behind the curtain is valuable. >> they still have to keep talking doubt the dot plots, which shocked me. i think it's good to occasionally talk to the public about these things, and explain your view on inflation, and the housing market, and -- >> i think people are making more out of it than what really happened, and as the dot plots became more and more irrelevant, the market continued to hit new highs. >> sure. >> so finally jay powell says it's down 270 points, and on a percentage basis that's zero -- it's nothing. >> but 30-year mortgages did trade again yesterday since december. >> i think people are paying attention. if you were surprised by any of

this, and clearly some people were not paying attention because it did move the markets. >> what is more surprising, as the economic data was stronger and stronger the stock market continued to hit new highs. >> that interview was taped before the friday jobs report that was stronger than expected, too. >> but the earnings were already better than people thought and the market hit a series of highs, and now it backed off. lisa erickson is the head of a markets group in wealth management, and why don't you weigh in on the debate given the economic backdrop? >> i think everybody's focused on the question of when will the fed move, and they are closer to it than a couple years ago. certainly powell has convinced a lot of desire to have the certainty around the path of

disinflation before moving, and timing remains to be seen. the fed is data dependent and we will continue to watch. in light of that, the position is to stay neutral and the economy is in a relatively good place with the up sizing surprises that have taken place, and the job is not done with disinflation. we think staying in the middle of the ground place makes a lot of sense. >> i will say the one thing that did give me a little pause in watching that interview was when he basically said we don't have to get inflation to 2% in order for us to cut rates. scott pelly made that assertion, oh, we need to get inflation back to 2%? powell said, no, no, no, that's not what we said. if anything maybe that gives you the idea that rate cuts are more likely to come even if we don't

hit 2%. >> again, certainly he said that he doesn't necessarily have to get to that magic number before moving and that he can continue to look with his fellow bankers at again potentially moving policy even if the labor market doesn't go into a big funk, but with that being said, again, i think they are looking for continued increase in certainty around where the inflation path is going. it's exactly hard to say what combination of data will do that, so we are all on alert just looking at what the path will continue to be. >> we are about halfway through earnings season. what is your takeaway? >> well, certainly earnings have really come in better than expected and though the rates are not quite to historical averages, what you have seen generally across the board is we are continuing to get the earnings surprises as well as top line that is better than what was expected coming into

the quarter. i think what that is showing you is, again, on the back of the resilience and the consumer companies are continuing to do as well with demand being able to be maintained as well as managing their internal costs. >> so you are neutral on the fixed income market at this point? do you like equities based on what we are hearing from the companies? >> we are really advocating neutral position in equities and fixed income with the balance of rewards and risks we currently see present in the economy, and when you are looking at various market factors. staying at whatever your inst strategic weight in stocks are. you had a lot of resilience last

year that was not necessarily expected. i think most investors going into the year, including ourselves, really were a little bit more skeptical about what the path might be on the economy, but, again, the consumer has stayed resilient on the back of a strong labor market. as we go into 2024 we see some of the same trends continuing where, again, many of the updated indicators we got last year -- sorry, last week on the jobs market continues to show that labor continues to support the consumer. again, we still have those headwinds, and that has not yet moved and we have in the past couple of years had tough rate increases and could have a legged impact on the consumer spending, and we are in the neutral zone of seeing the strengths and weaknesses. >> lisa, thank you. coming up, boeing's top

regulator in the hot seat on capitol hill today, and mike whitaker will join us exclusively here before today's hearing on the 737 max. "squawk box" will be right back. that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy.

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when you buy one unlimited line. plus, get the new samsung galaxy s24 on us. welcome back to "squawk." today capitol hill focusing on boeing this morning. and phil lebeau has a special guest. >> mike whitaker. we are going to talk about your testimony on capitol hill in a moment, but a lot of people want to know where does your investigation stand with the root causes we have seen? >> we don't know yet but we are in the middle of a six-week audit going on at boeing, and we

are trying to understand where there might be faults in the system and how to address those. >> beyond 38 per month for production, and when do you say we are confident they made the changes necessary? >> we are convinced this is a safe production system, and all we want is for boeing to make safe airplanes and they can produce as many as they want to produce. >> their previous guidance was to get to 50 per month by 2025 and 2026, and they are not reaffirming that target but they are not pulling it and it has some on wall street saying in the back of their mind the folks at boeing will put out 38 per month for a while but will get up to 50 by 2025-'26.

>> i have no timeline on when it will happen, and we are going to let safety drive this decision. >> part of that is adding more inspectors, and 20 at the plant in renton, and then adding six more. >> it's probably not enough but we will know that after the audit is finished. we need to have enough folks to monster the system and make sure the planes are being produced safely. >> are you getting feedback from the people there? we have not got the final results of the audit done yet but are you hearing feedback from the inspectors? >> we are getting feedback, and we are waiting until we get the data, but we are monitoring the system and collecting data. >> has there been a red flag,

anything that has come up where you are like, wait a second, this is not what we expected to find? >> not anything that caused us to have a further stand-down at this point, and if we find something that creates a risk, we will talk about that. >> are we moving from an era where you guys would do audits to an era where there needs to be supervision constant, and it's not something where you drop in and drop out, or you rely on delegate authority at boeing. >> what we are doing is introducing more direct inspection, putting boots on the ground in the factory rather than reviewing paperwork and making sure the control system is saying what it is supposed to say, we need to have people looking at that. we will do this assessment and decide if it needs to be a permanent state and how many people we need to put in and

where. >> how often do you talk to dave calhoun. >> at least once a week. >> and at pat shanahan at arrow systems. >> i have not spoke to pat. >> and a lot of people want to hear from mr. shanahan and what is going on in wichita. from your perspective what is happening at spirit, because there seems to be a steady drumbeat of things not being produced the way they should be produced? >> there's a history between spirit and boeing. we regulate boeing, and they need to impose standards on spirit to make sure they are making safe components. >> are you confident about that? >> well, we have inspecters at spirit, as well. >> one of the things that i think a lot of of people look at, the steady drumbeat of

issues, and you heard this over the weekend. this one is not a flight of safety issue with the 737 max that came out over the weekend, but it has more people saying should i be comfortable with the aircraft boeing is building? what should you say to the public? >> if the aircraft is certified and built to that speck spef. >> can you fix the culture? >> it's their job to fix the culture but we will make sure it's fixed and they are producing safe airplanes. >> we are heading into what is going to be a busy summer season, and there's more than a few people concerned about the

congestion in certain markets, whether or not there's enough air traffic controllers, the new york city is a good example of it. should we expect to see the same level of air traffic at these -- some of these congested markets, and are you starting to see the pipeline kick in a little bit when it comes to the air traffic controller situation? >> hiring airtraffic controllers is a tough priority, and even with the boeing incident, that remains our top priority. it takes a long time to make a controllera few years, and we want to open that pipeline as quickly as possible and ramp up controller hiring to prevent the kind of delays in the northeast corridor. >> i saw your letter yesterday in regard to the retirement age for pilots, and you don't believe it needs to be raised, correct? >> we need to have data. the retirement age is set by congress and if it is going to change we need to look at that

and approach it. >> you have boeing say they will make the changes necessary for certification on the 737 max 7 when it comes to the de-icing system, and that's only for the seven coming in that they will come up with an engineering solution, and they rely on the pilots for some of the other maxs to flip off the switch at the key moment. is it possible you go back and say let's have a permanent solution in terms of not just the 7 but for all the maxs? >> well, there needs to be a permanent solution for all of the maxs, and there are issues that come up and you have airworthiness directives, and it will happen dozens of times with a new aircraft. what you don't do is keep that open and not fix it before you make a new version of that airplane, and i think boeing did the right thing and pulled back

before the next request. >> mike whitaker joining us before he has a busy day on capitol hill with more than a few questions about boeing. >> that was really interesting, especially that answer saying boeing did the right thing to pull back on the request, basically saying it was a request but not really? >> yes, and i think everybody knows what an exemption means, and that's not going to happen with the max 7 once it goes through certification. >> thank you, phil, and our thanks to the administrator as well. when we come back, we will look at stocks to watch this morning, and bedrock's geoff lewis. and then looking at spotify. the company missed fourth quarter expectations, and did issue strong guidance and because of that you see that

stock up about 6%. "squawk box" will be right back. ♪♪ [storms sound] whatever weather comes your way [wind and snow sounds] weathertech has you covered. [bird chirping] [laughing] with our laser—measured cargoliners. no drill mud flaps and floorliners. to secure your phone don't forget the cupfone. order yours today at weathertech.com. you never know when it's gonna be a weathertech day. perfect weather today...

box." i am dominic chu with stocks to watch. we will start with big farmer, and the headlines this morning,

that's eli lilly, one of the biggest companies in the world are higher by just around 5%, and premarket, about 100 shares of volume. the popular weight loss drugs reported better than expected profits on better than expected revenues, and lilly closed yesterday, by the way, with a market cap of $670 billion, making it the eighth most valuable company. and then palantir is up. after last night's close it reported profits in line withest estimates that were 20% higher than the same period last year. and it was held by the continued strong demand for the ai products, and full year guidance were in line with expectations.

and then ending with oil and gas with british energy giant, bp, up about 5%. profits did come in better than analysts estimates, and it is committed to buying back $3.5 billion worth its own stock in the first half of the year. bp shares up 5.25%. >> who knew about eli lilly, and we had a good relationship with whoever running it, and more recently david ricks, and this is exactly how the work should be, do the research and do it right and then you find something like this and get patented protection, and look

what it can do. it was up $200 billion. it could be a trillion dollars in a couple years. it's already about 700. >> joe, what is interesting about this story is, and you obviously and the folks in the business know about health care and what not, and i would not have pegged the massive move by the biggest company in the world should be driven by weight loss or diabetes, and the products are way higher than those drugs out there treating cancer and it's part of the ecosystem health wise, and the demographic are the aging -- >> well, now david ricks, a young guy, and remember we asked him last time, been there three

or four years and the stock has been one of the best performers in the s&p. >> one of the hottest stocks out there, joe, no doubt. >> all about weight loss. coming up potential investors and elon musk artificial intelligence are focusing on his track record with other successful companies. we will talk about the muskonomy. >> bidenomics, muskonomy -- >> "squawk box" will be right back.

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box." investors in elon musk's new start up ai looks at his track record in other endeavors, including open ai. geoff lewis, founder and managing partner of bedrock, and he has been invested in open ai since 2021. good morning to you. >> good to see you, andrew. >> help us with this, because before we even get into it, there's a debate going on about whether in fact, and there's lot of reporting that suggests that elon musk is trying to raise

money for xai, and at the same time we heard from elon musk on twitter saying he's not doing that. what do you know? >> well, i'm not a private investigator so i don't know too much about what he is or isn't doing, but i think elon is one of the most talented people on the planet at raising money, so i manage he will get it done. >> when you think about the creation of open ai, and he has been very vocal about his upset and frustrations with what open ai has turned into. you are on the other side of that. what do you think? >> well, look, i mean, i think the reality is there was some sort of a power struggle there with sam altman and elon, and i don't know the specifics of it. i think what open ai is turn into is absolutely phenomenal. you are talking about a product with chatgpt that has something like half the active users that x has today, after a product

that was launched just over a year ago. you have a deep partnership with microsoft where there will be expanding aggressively, and and you have a company that is has a true technological break through with ai, and i understand why elon might be a little upset. i think he's, again, one of the most brilliant people on the planet. i think the big question with x.ai, is this going to be the original vision of ai, or is it going to be nonpreofit or for profit, and how will it compete -- >> i want to talk to you about the scale piece and the development piece. >> yeah. >> what do you think about the defensive mode, if you think there is one, around open ai or frankly barred or any of the long language models today,

which is to say if you throw enough money and computing power at the problem, can somebody else catch up? >> i mean, i think the reality today is these models are already running out or are pretty close to running out of actual training data. i think we're reaching a point where we will need the ai itself to come up with synthetic data to further find human models, and the gain now is about, one, expanding ai into the enterprise, and i think open ai is clearly the lead there through the partnership of microsoft. two, seeing who can it arate on the models. i think the idea of using the data for a training model, but if you double click on what is on x, there's a lot of news and

you are the best of the business in news, and beyond that the terrain on x is pretty deranged, i think we both agree. i would be worried about what that log line ends up spitting out if that's the training piece, personally. >> i remember speaking to elon about this back in november is the idea that there's a lot -- i don't know how you deal with this and maybe it's all fair use, but a lot of folks are putting copy righted material on x and they use quotes, and if the system could be smart enough to collect up all the quotes where it's replicating full-on articles, that's gets interesting quickly. and then how do you confirm the quotes were real to begin with, and that speaks to the issue you are raising. >> yeah, the copy right question

is fascinating, and, yeah, it's going to be a long road. >> what do you think about the legal liabilities as it relates to open ai. obviously there are lawsuits from getty images and "the new york times" is now suing as well. how does that stack or play itself out? what do you think the true cost is? >> you know, i -- i -- in the end i think these things get sorted out. different people have different perspectives on law suits. my personal point of view is it's bad to sue people and you should always try to avoid doing it, go to great lengths to avoid doing it, and i get why some of the publishers are suing, and i have not really read the claims in great detail, but definitely will cost money for folks like open ai and others, and these things will have to be sorted out over time, and ultimately i think when you have a mega trend like this, and you are already

as far along as we are, and the cat is kind of out of the bag. there are a lot of law suits on social media -- >> what do you think of different business models that will be generated on top of this? an example i did recently, i went on to open ai and went on to barred, and there's a list of 15 people where i was going to a meeting with these 15 people, and i said to open ai, i said, please pretend you are an executive assistant and do short bios on all 15 people with a thumbnail image of what they look like, assuming it could go scrape it off the internet. open ai tried to stop me from doing this. definitely did not want to do the picture part and did this small biots that frankly were nt good and said they had privacy concerns about getting this information, and they said they were only up-to-date to 2023,

and then i did it on barred, and then i said to turn it into the pdf, it refused because the pictures were copy righted. at some point i will want all the pictures in the pdf, and how do you think all this plays out? >> yeah, i mean, the business model question is a big one. i mean, i think it plays out in a few different ways. i think one is today most of the usage of these things, like you, andrew, is a consumer paying a prescription for these things, and the queries can cost on the back end, from a few cents and to a dollar -- >> that's a query. if i would have done it with linked in, it would have been a lot easier. >> yeah, business model is a big

question, and the question is will enterprises adopt ai, and will workers at the large companies use them in the work tph flows, and can they really monetize the enterprise. that's what i am watching out for in 2024. that's the core bet on the business model. >> next time you will be doing it with an avatar. >> i might have to sue if anybody tries to make an avatar of me. >> thanks. and then black representation on wall street. frank hollande wiljo ufol ins r that report. the nasdaq has turned south. we're coming right back.

this is "real time insights." i am hear with jonathan sears. ey conducted a survey about ai and anxiety in business. who is most anxious? >> 75% of employees fear ai will replace jobs, and when we dig into that the anxiety is coming from gen z and the junior levels of the workforce, and that's the level most in line to benefit from ai. >> how do they benefit from ai and assure workers they are not going to be released? >> ai is not in the technology

itself but it's with what people accomplish with it, so it's how we understand the unmet needs of an organization by listening to your employees, and there are plenty of opportunities to identify the use cases but we have to get them to the top of the corporate priority list. >> can you give us an example of this in action? >> we are working with an hr department in a large financial services company. we were able to take 80% of the manual of the process by employing ai assistance. >> thank you so much, jonathan. >> thanks, caroline.

welcome back to "squawk box." black representation on wall street has exceeded 20%, and the supreme court decision on affirmative action and the recent backlash has many concerns the gains could be lost. joining us on all of this is frank h frank holland. >> the so-called deis fuel the increase, and that includes nonprofit wall street bound. it's what is called a troubling changing commitment from partners and from would-be partners. >> as a nonprofit, it's not only a threat to us through funding but certainly our ability to get at these students with opportunities to get into seats in jobs. >> they are trying to figure out their legal risk.

the fearless fund lawsuit claims the startup is guilty of racial discrimination. >> we have already seen the financial impact of this lawsuit on us. we have had somewhere upwards of 8 figures of potential commitments being removed due to litigation. people dropped out left and right. >> the supreme court against affirmative action is another risk factor, and the black economic alliance released a tool kit so they could recalibrate and rebrand their dei programs. >> right now people feel like they need to step back and reassess, and not everybody. there are some ceos that say they are going to keep plowing ahead, and some wanted to

reassure us because they made commitments to us. i said as long as the work is getting done, call it what you want to call it. >> and then last year there was a 60% increase in student job placements at the top five wall street banks and tech companies like apple and consumer leading brands like nike. as of right now, the bottom line continues to be finding untapped talent, they are continuing their dei programs with a rebrand or recalibration. >> what does that mean, they talk bit differently but do the exact same thing, or do they change the way they are measuring things? >> depending on who you talk to, it's a bit of both. in some cases, just simply changing the title. instead of saying it's about this group, it's about finding

t t talent. >> and colleges are using zip code opposed to race or ethnicity. >> do you think -- who said it online recently that dei programs, andthere has been an industry and ecosystem built that has been dismantling those programs, or has there been more layoffs, and those are some of the programs they have taken from? >> if you talk to some of the people that run the pipeline programs, economics are a big part of it. when times get tighter, certain programs can go by the wayside. and efg is under fire as we see budgets change and priorities change, and bottom line is some companies are committed to dei, and a big global event happens and people come out and say

things at an emotional time and maybe they don't have full support for in their company, but according to a lot of other people, a lot of big companies, a lot of notable companies out in the forefront are still continuing their programs but they are concerned about legal risk and rebranding and recalibrating and changing the way they approach it. >> that was the palantir guy that said -- >> well, he was not using it in that way. he said people virtue signal and don't back it up. >> that's similar, yeah. >> he said he had great sympathy for those that say nothing, and if you are going to say something and start programs and support certain groups, then you basically got to do it across the board. i think his frustration is what he saw as hypocrisy, the moves that companies made actually in the wake of the murder of george floyd, and then when it came to what happened in israel and other things, went silent.

>> it's a big piece today -- don't look for a lot of cutting edge super bowl ads, and companies are like, i don't want to make -- they are totally worried -- >> you lost me, somewhere between here and there. >> companies are worried about taking a stand. >> okay. i got you. yeah, you have to worry, suing the fearless fund, and that concerns chief councils and they are trying to maximize profits and reduce risks, so it's only natural. >> thank you. still to come, wall street reaction to eli lilly earnings. co mi up at the top of the hour, leon cooperman will talk about the market and the fed and how he sees things shaking out, and much more. we'll be right back. only from nature's bounty. [busy hospital background sounds]

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because it's only live once. join xfinity rewards on the xfinity app or go to xfinity1stand10gs.com for your chance to win. news breaking this morning, this out of deal book this morning. ousted wework founder adam neumann has a new real estate

company, flow global, but ready for this? are you sitting down? he's now pushing for it to buy back wework. >> what?! >> it's a remarkable story. the company sent a letter yesterday to the advisers for wework, which has filed for chapter 11 bankruptcy protection, asking for more information from the company, saying that they've been trying to get information from the company to either buy the entire company, assets from the company, or to provide dip financing to the company. it appears that they are being stonewalled, perhaps even more interestingly, adam neumann has teamed up with dan woeg at third point to buy back wework. the company has about $4 billion in face value, in terms of debt, that's still outstanding. the company, of course, is a question, how much money the company would be really worth. i think stestimates say it coul be as low as $500 million. we're not talking about an extraordinary a lot of money, but considering at one point,

this was a company at least on paper, and we should say, only on paper, was valued at $47 basketball it is a long way down if you are a equity or debt shareholder or a stakeholder, i should say, in wework. it might be frustrating to try to sell it back to him. having said that, he does not -- >> frustrating is putting it lightly. >> having said that, it does not appear there are any other buyers for wework. and yesterday, if you looked through the transcripts of what's going on in the bankruptcy case, there are some real problems, a lot of the landlord deals need to get renegotiated, and this company needs money. and nobody, at least, thus far has emerged to try to buy the company. >> is he saddled with the debt then, too? zb >> absolutely, if you buy the company out of bankruptcy, you would saddled with that -- >> but not 100%. what would happen, it would be 10 cents on the dollar, 15 cents on the dollar. the question is, could the company try to reemerge from

bankruptcy without a buyer or with a buyer. and we'll see what ultimately happens. >> if you would own some of that, i would take a lot less than $1 on the $1. >> nobody is getting -- nobody is getting $4 billion. they might get $500 million. >> but it was only on paper. only on paper valued -- >> the $47 was never -- >> how many other companies -- what company is actually valued at what it's valued? you can say that almost about anything. that doesn't make it unique. >> worth noting the majority owner of the debt is still soft bank. >> it is. >> they must love that. >> yeah. >> all right, eli lilly, this company on paper, is it really worth $700 billion? is it right now. eli lilly jumping after quarterly results this morning. top analyst estimates on nearly all metrics. joining us now with more, jeff meacham, bank of america securities senior pharmaceuticals analyst. jeff, what's the real franchise here? eli lilly was going to be the

preeminent sort of mental health company for a while, remember? and suddenly, that's not what it is. what is it? a diabetes/weight loss company? >> that's a good one, joe. thanks for having me. you're right. alzheimer's was by far one of the more interesting pipeline assets for, i don't know, five years ago, but for sure, this story has changed to diabetes, obesity, just to give you some context. mounjaro plus zepbound was approved 18 months ago and here we stoand today at a $10 billio revenue run rate just now launching in obesity. so it shows you the growth has been aggressive by far in metabolic disease, less so relative to alzheimer's. what's the eventual market

opportunity for this? is it going to be -- is there anything that could derail these -- obviously, we're anticipating a lot of future growth in both of those areas. is that a given? >> you know, there's not a lot of risk to it. when you look at the demand in obesity, you know, for sure, we're not even assuming, in our model, 10%, 15% penetration. so, there is a huge market, but the one thing people aren't talking about are the other related indications. so looking at heart failure, nash had some data this morning, it's a liver disease, looking at other indications, kidney disease, et cetera. so the totality of indications is pretty dramatic. and really, i would say, in the case of obesity, it's kind of first inning, first out for lily, in terms of the zepbound trajectory. >> i mean, just in terms of

trends in society, this could be really, really good, could it not, in terms of our overall -- how much of our health care inflation and the total amount that we spend in this country is based on, you know, bad habits and junk food? you could take care of a lot of those things really quickly if this really becomes a trend. >> you could. and i think what was important was novo nordisk last fall had data for a trial called select, and it shows you that for a glp-1 drug, it's not just about weight loss. you have things like reduction in cardiovascular death, reduction in stroke, reduction in heart attacks, et cetera. so it really isn't, just weight loss. i think tbreadth of the benefit of these drugs is pretty dramatic. >> it would have been a great one to own for a couple of odomny jeff. go cpa to cover. lucky guy.

thank you. "squawk box" will be right back.

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as the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernan along with becky quick and andrew ross sorkin. and we're in the second day of the rest of your life, after j. powell was on "60 minutes." u.s. equity futures take a quick look. still dealing, i think, to some extent with the new world we find ourselves in, which may be means a little bit longer until we get a cut, if we get one at all, and maybe fewer cuts than the market had anticipated in 2024. and also, you can see, it's not a lot happening, but the dow is down about 2070.

was down a lot more than that mid-session, down almost 400. the nasdaq has turned positive. there are a lot of positive earnings offsetting, perhaps, some of the worry about not having any rates be cut. has anyone said rates could still go up? given what we've seen economically, is that -- it's not -- >> remember, jamie was probably the closest. roger ferguson. ferguson has said they go up? >> he's been pretty hawkish. not specifically that they'll go up, but he certainly was resistant to the notion that the work had been totally done by the fed. you think it's -- i would stay it's a non-zero chance. >> i would say it's less than 10%, but probably greater than zero. >> as strong as these -- those gdp numbers -- and i don't know, is it inventory, is it stimulus. but the gdp numbers, we would

kill for 3%. we got a 4% print. when we're supposed to be now in the long-awaited recession, caused by the inverted yield curve, which did not happen. so, do you think -- how many rate cuts? what do you think? how many this year? how many do you think we get this year? do we get any? >> a fool's errand. >> i think we get some, far fewer than six. >> inflation needs to definitely come down and wage gains are still so strong. >> when you look at boeing, machinists are looking for, they're expecting 40% wages, that's what they're seeking, too. 3 to 4% increases over the next three to four years. but we want to get to our first guest of the hour. joining us is billionaire hedge fund investor, lee cooperman. he's omega family chairman office and ceo, lee, weigh in on this. you're somebody who thought the markets were going troubled.

you've been concerned. not that you haven't been fully invested, but have been concerned about the futures for the markets. we are sitting just off all-time highs. what do you think this year brings? >> everybody came into 2023 with a very negative view in the market went up quite a bit, and everybody is now positive and so my guess is by the end of the year, maybe we'll go down. >> at the end of the year? >> yeah, by the end of the year. i think the fed will cut short rates maybe two or three times, forget the six times that the market was discounting, but i think the long end will go up. prior to 2008, the ten-year government bond was in line with gdp. inflation of 2 to 3% and real growth of a couple percent. the ten-year at 4 to 5% higher, wouldn't that be a big surprise. >> why? >> i think that situation is out of control. >> our borrowing situation -- you mean, our borrowing situation, whether or not we'll find borrowers for that debt?

>> we'll find buyers. when i grew up in this business, we have guns and better, and i think ultimately we'll have crowding out. the government will get their money regardless of the cost. i think the cost will be higher than people think. i know myself, given the amount of debt that we're creating in the system, i wouldn't be a buyer of government bonds at these levels. >> but you would be a buyer at a higher level? >> yeah, sure. the government -- you know, everything changes, the pricing determines. and so i'm not saying the government can't sell its debt, but i believe that, you know, we have $1 trillion of interest expense now for government. we have an economy that is reasonably fully employed and we're running a big deficit. when the economy is fully employed, you're supposed to have a balanced budget. when president trump was president, he was running a $1 trillion deficit and arguing for

negative interest rates. he knew his balance sheet, you could appreciate why he was arguing for negative interest rates. but i would say that bottom line, when you look at everything going on in the world and you see the market multiple at 21 times, it seems too rich to me. >> even given what we've heard from companies, earnings have been coming in stronger than anticipated. a lot of companies have kind of surprised to the upside and said that they see very strong demand. you can look across a number of industries for that. >> yeah, i think it's discounted in the market. you know, that's just my basic view. i'm not calling for recession, but i'm saying that i think that the market discounted the good ne news. >> go ahead. >> let's look at this, it's taken $1.50 of debt to generate $1 of economic growth. and, look, nobodies when the

stuff is going to hit the fan. i like to point out that 1972, two citizens by the name of henry faller, former secretary of the treasury, goldman sachs partner and they used to run full-page ads alerting people to the evils of the trade deficit. and what has happened 40 years later? we have the lowest interest rates in our lifetime. and either it doesn't matter, or one day it will matter. and i think it will matter one day. >> that's what steve iseman said yesterday. he kind of pointed out, he can get pretty concerned about things. yesterday, he seemed relatively laid pback. didn't seem overly concerned about anything. for 40 years, people who thought the debt and deficit were going to emploblow up and rates would skyrocket as a result, it just

hasn't happened. >> i can't. it a time, but, look, business cycles, every recession, the next recovery, and every recovery sews the seeds of the next recession. and we're far into an economic expansion and i was honored fairly recently by the new york yankees. i was given the opportunity to throe out a pre-game pitch. i had not been to a guam for many years. i was shocked by what i saw. a hot dog, ld. a bottle of water, $6. i put my grandson a baseball cap, $56. you know -- i grew up in the bronx, and used to be an old man that came around with a carriage and laundry bag of pretzels, two for a nickel, $13 for a pretzel. i looked to replace a car $104,000. guess hat, i didn't buy a new car. i could afford it, but i didn't

need it and i would rather do something else with my money. i think we'll have a shrinkflation. and we borrow prosecute future. and that's why the market has done so well. >> having said that -- go ahead, finish your thought. >> well, my thought is that basically, if you look at market cycles and you ask yourself, what's a bear market, a bear market is a period of time where more stocks are in decline than rising. when decline averages around 25%, and lasts for about a year. by that definition, 93% of the stocks have been through a bear market. you know, the magnificent 7 now looks more like the magnificent 6, as tesla falls from the crowd. but i think that a lot of value in certain sectors of the market, but i believe that one should have a cautious view. >> when you look at the magnificent 7 or 6 or however

you want to measure it up, you still have two of them that are among your top holdings. you've got alphabet and microsoft. but they are not among your best ideas right now. does that mean you think they've seen their runs? >> i think that they're -- i would like to buy things that are out of favor. and i'm holding on to alphabet and microsoft, great technology companies, and that's my window to technology. you know, i can't know nearly as much of these management companies know. yes, they're pricey, but it's a much lower cost basis than capital gain and i'm going to pay taxes in these good comp companies. but for new money, i'm not putting it into alphabet and microsoft. i'm putting new money in ore things. >> yeah, you talked about those -- in bonds is something you brought up with us before. that's your best idea. you also have cigna on that

list. why cigna? >> it's a ten multiple to buy back stock. they've done a very good job in running the business and i have a general view that if i buy something that's cheap, i want the company to buy back more eq equity. it's not a decent dividend, but they're buying back 5, 6, 7% of the company annually at a very low multiple. >> it was on the list yesterday, of the just 100 list. it was one of the top ten companies. does that matter to you? >> no. there's dei that's gotten crazy a little bit. you know, i'm basically, just do

the right thing. and we won't be in a world -- where we reward meritocracy. >> you've also suspended your donations to columbia university. that's a place that i think you've given more than $50 million to this point. what upset you? what changed your mind? >> well, the way they've handled the anti-semitism on the campus. i've said this on a competitive network, but i said, these college kids have shit for brains. and the truth of the matter is, i'm being very kind to them. when they talk about, from the river to the sea, free palestine, some of them think they're talking about the hudson river or the nile river. and they don't understand, the only democracy in the middle east is israel. the only reliable ally we have in the middle east is israel. the only country in the middle east that recognizes gays and lesbians, basically, and let them do what they want to do is

israel. and yet, you have gays in palestine, they have no idea what they're saying or what the they're doing. israel took the money they got from the west and did constructive things with it. the palestinians allowed hamas to get ahold of it and they built tunnels. i told the president of columbia, if you simply came out and said, you know, that the professor who praised hamas for what they did did not speak for the university, he has tenure, we would fire him if he doesn't have tenure, and there's no room for hate speech of any kind on the campus against any religion. they didn't say that. they eequivocated and it was unacceptable. i think they've done a wonderful job at harvard, and mark brolan has done a very good job at penn. it is what it is. you know, the world's all screwed up. >> what would it take to win back your support? >> just act rationally. the truth of the matter is, what

they say is, the professor did not reflect their thinking. the professor was operating on his own. and we can't terminate him because he has tenure. and also, i'm a big supporter of the business school where i have my mba and the business school has a different view than the university. >> so they could win back? what would they have to do to win you back as a donor? >> there's no room for uh anti-semitism on the campus, no room for hate of any kind. let's open up the campus for contrary views. and these kids can't shout down and eliminate anybody coming on campus that they don't particularly care for the message. we have a lot of crazy things

going on and there's a black conservative economist who i'm very fond of who says this area of social justice, what is your fair share, someone else's work for it. and has to do with marginal tax rates, where they criticize wealthy people. i don't know why they're criticizing wealth. you get to be wealthy, you develop a market the world needs and you reward it. and a lot of people that have large amounts of wealth are doing constructive things with it. i work very hard, but i give away all my money, 100%. >> lee, there's a push pac and a bit of a backlash to big donors everywhere, though. i think the sentiment that just because you pay for a lot, doesn't mean you should get to declare how everything goes. what do you say to that? that's part of what this backlash on the universities has been. >> i can only speak for myself.

i don't get involved. i support people, you know, my wife and i have determined to give back all -- 100% of the wealth we've accumulated over the years. those organizations and institutions have made a difference to us in our lifetime. we don't try to control anything. and we allow the people in charge to make the decisions. and we speak up and we're on track, we just go long. the thing i'm most proud of is the jewish religion. basically, we gave $50 million to send a thousand kids to college in newark. i gave them two tranches. the first tranche i gave six or seven years ago. when i gave the money, i said, 35% of new, 25% graduated. i gave money for a 5% graduation.

and we had a 73% dprgraduation rate. i'm trying to do my share. zps what it is. i can't worry about what i can't control. >> lee. here we are. we've got another election coming up. last time, you said, again and again and again, i'm voting my conscience, not my poektbook and i'm voting for biden. how'd that go for you? right now, i would say -- >> i mean, are you glad? are you glad -- did that work out well for you? the state of the country right now, where we are right now, in terms of joe biden? >> well, i'm not happy with either one. we have two candidates, where one's bad, the other one's worse. i don't know who's bad and who's worse. >> you got to pick! >> lee, do you honestly not know which is worse? and actually, do this for me.

if you could explicitly tell me why you think -- if you believe that biden is worse than trump, if you could explain that. >> well, trump has good economic ideas, his behavior is disgraceful. and i would not vote for him. i signed off on him when he became president, when he mimicked "the new york times" reporter who had cerebral palsy. you learn when you're 2 or 3 or 4 years old, you don't make fun of handicapped people. and when he dissed jmohn mccain a true war hero. he has to judgment, but understands the economy. biden says he's a union man. he should be for employment generally, so in 2016, i wr wrote-in moitt romney. in 2020, i voted for joe biden. i will not vote for biden again. he's missed a step, allowed himself to be in the pocket of progressives. >> does that mean you would vote for trump? go back -- >> no, i'll write in. i might write in you or joe

curtis. >> who's on the top of the ticket? >> i'm hoping, and it's just a hope -- >> no, between me and andrew -- i'll give it to andrew, because the vice presidency is more for me, where you don't really do anything. >> the naval observatory is a better place to live. >> you like to work hard, i'm -- vice president, i'm going to just mail it in. >> okay. that's not the first time that's been done. >> if you're running for president, number one, i'm the exact same age as biden. and -- >> i had to ask you that, lee. i had to ask you that, it's like, man oh man, how's that bed you made that you're sleeping in? >> one more for lee, because i'm just so curious. it's an elon mursk, you're not shareholder, i believe, in tesla, but you follow the markets and compensation programs. you critiqued and said all sorts of things over the years about different things we've talked about, do you have a view of the

dh shareholders and board made and what the judge in delaware said. >> i haven't followed too closely, but he's a genius, and he's overcompensated. i quote the great warren buffett, because he has all of these words of directors hire him, you know, pension consultants, conversation consultants, that should be go by the name of ratchet, ratchet, ratchet. the conversation is excessive. by most companies. managements paid when they fail. it's a big battle i have to fight. i rye to invest in companies i understand and that are reasonably valued, and i can find plenty of them, because most of the ones i get involved in have been through a bear market. you quickly talk about legatto, my favorite idea, somewhat complex, but it's an indictment to the u.s. government. the department of defense allegedly has lied under oath.

they're using the company without compensation. and it comes down to a question. can the government take an asset that's worth $20 or $30 billion and not pay for it? the answer to that is "no," but i have to be patient. you're having a big coupon at 17.5%. at the end of the day, i get par for the bonds. it may take three years or take a year, but it's disgraceful what's going on there. >> lee, i want to thank you, as always, for being with us and for covering such a wide range of topics. it's really good to see you, lee. >> nice to be seen and you guys do a good job, and stay safe, stay healthy. and just hoping the country gets on the right track. i think we're on the wrong track. >> lee, if i wind, do you want to be the treasury secretary -- >> we! >> if we win -- >> suddenly, it's you? >> i don't know, i was told that i was the top of the ticket.

>> you are -- but i don't want the responsibilities of the presidency, believe me. >> she's going to be the secretary of state. >> do you want to be state? >> i'm staying home. >> i think she's like me. that's way too much work. that's too much travel. >> do you want to be the commerce secretary -- >> i think davos every week. >> the country deserves better choices. and biden has done a lot of floosh things in husband support of the progressives and the lefts. i'm a centrist at heart. i believe rich people should pay more in taxes. the question is how much. bernie sanders is a communist, he says 90%. elizabeth warren says 70%. paul krugman says 54%. i'm willing to pay 50%. work six months for myself, six months for the government and that's it. and i think the idea that rich people don't pay taxes is bal baloney. >> lee, we always appreciate talking to you, your prospective

on all of it. coming up, ai the s.e.c. republican senator bill argumenty will join us on a fight on what he sees as new regulatory overreach. stay tuned. "squawk" returning after this. take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond. 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.

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ousted wework founder adam

neumann the now trying to buy back the company along with dan loeb's third point who might help to finance a transaction. here's what neuman's attorney sent in a letter to wework's advisers last night. in a hybrid work world where demand for wework's product should be greater than ever, my clients believe that the synergies and management sp expertise offered by an acquisition by my clients could exceed the debtors. this is a company worth on the order of something like $47 billion owned in large part by softbank at the time. today, has about $4 billion in terms of face value, secured and unsecured debt at the moment. some people say it could go for as littles a $500 million. remarkable to see adam neumann back at the table. of course, has the backing -- his firm, flow, has the backing of andreessen horowitz. and now it appears he's teaming up with dan loeb as well. so far, it appears that the advisers to wework are giving

him the heisman. we will see whether now that some of this is public, whether that changes. this has taken on a little bit of a grassroots thing happening here, sorkin. for us, the ars/kernan ticket -- >> said bring back balance, no labels -- >> no labels. >> do you think manchin would get behind us on this? >> i think it's all -- >> i think it's only going to work if becky takes on the secretary of state role. >> i'll stay here, you guys go. i'll stay here. >> becky, you can do a totally remote secretary of state. >> no, every week is davos, no thank you. >> you don't want any ambassador to france? >> no. >> italy. ambassador to italy. >> i like it here. >> ambassador to new jersey? coming up, meta makes a move towards more ai transparency ahead of this year' election. julia boorstin will have that story, next.

def reing to get rid othe feral agencies, too. i can only remember two of them. we'll be right back. light work! ♪♪ next victims. ♪♪ you ready for this? ♪pump up the jam pump it up♪

meta announcing expanded labeling of ai-generated content skbroil boorstin joins us now with more. hey julia. >> joe, this is big news when it comes to transparency around ai. meta is expanding its labels for ai-generated content, which were previously only for labeling content using its own ai tools. but now meta will be using metadata to detect and label ai imagines that are posted to its platforms from google, open ai, and shutterstock. saying it is the first company to label ai content that is not its own. meta's president of google affairs writing in a blog post this morning that they are

working on industry standards for identifying ai content. saying, we're working hard to identify classifiers that can help us to automatically detect ai-generated content, even if the content lacks invisible markers. at the same time, we're looking for ways to make it more difficult to remove or alter invisible watermarks. they're building this capability now and will start applying labels in all the languages they support through the next year, when there are a number of important elections happening. meta says it hopes to leave an industry-wide initiative, so nothing can fall through the cracks. especially when it comes to the risks of ai manipulation of elections, which can have such big implications. joe? >> all right, julia. we know if it's meta, it's the magnificent 7, we'll probably be talking to you and you'll get up early, which is nice. appreciate it. thanks. >> when we come back, we will speak with a boeing analyst

ahead of capitol hill testimony today by the head of the faa. and tennessee senator big hagerty will join us on ai regulation and finance and the fight over that multimillion-dollar border bill in congress. "squawk box" will be right pack. 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. ( ♪♪ ) feel the power of osteo bi-flex®. taken every day, it's clinically shown to improve joint comfort in 7 days, with significant improvement over time. ( ♪♪ )

. welcome back to "squawk box." our next guest has come out against a proposed s.e.c. rule that the agency believes would help prevent conflicts of interest between investment advisers using a certain type of ai and their clients. he says it's consumers who will bear the cost of a government attempt to overregulate financial markets. joining us right now is tennessee republican, senator bill hagerty. good morning to you, senator. for those who may not have been following all of this, explain what's going on here and why you are against it. >> well, this is another example of poor rule making coming out of washington. in particular, the s.e.c. in this case. you talk about ai and trying to deal with that, but this rule is far too broadly drafted. it would encompass anything from a small calculator on a website to a spreadsheet. it's not just focused on ai. and it will lessen the access retail investors to the

plaipla marketplace, because the companies will stop offering technological innovation. >> so to the extent that you believe that ai should be regulated in the financial markets, and maybe you don't think so at all, how would you do it? >> well, i would do it in a much more targeted and focused manner. the s.e.c. is going to have a very difficult time staying ahead of innovation. remember, we have broad-based a fiduciary laws right now on the books. you've done a great job earlier in this program talk about the innovations that are taking place and the speed of that innovation. and i think we run afoul of actually limiting access to marketplace, particularly when we talk about retail investors, cutting them out, because the s.e.c. can't get it right. i would like to see them step back, hands off for a while. >> let's play this out. let's say there's an app and i'm a retail customer. you're the retail customer. and you go on and say, give me

some advice about buying some equities or how i should think about my portfolio and whatever. it comes back with an answer. not a human, but the, a i is doing this, and it's suggesting that you buy a certain mutual fund. and maybe that mutual fund, by the way, could be owned by the same folks who own the app. so now we have a fiduciary duty issue or conflict, maybe. who should be responsible for that? >> that would be precisely the same type of duty were a human doing this. i would presume what they would have done was digested the manual for that company as they think about the rules and requirements that they have. the same fiduciary obligations would apply. the company has a conflict of interest and offering bad advice. i think the rules on the books right now deal with that. the s.e.c. overreaching, it's almost a nanny state type of perspective, where they're trying to reach in and control everything. the way this rule is drafted, it would stifle innovation, stifle

retail investors access to new technologies, and far too broad right now. >> i want to go broader with the conversation, if i could. this issue of regulates ai today is not just in the financial space that the s.e.c.'s focused on, but in so many other spaces, as we get closer to the election, folks are talking about how you regulate in that context. we've been having hearings across the board about ai. do you believe fundamentally that the government can ever keep up with the innovation of technology? you know, we had will hurd on yesterday who said he believes that ultimately, this stuff is as powerful, potentially, in the long-term as a nuclear bomb. and therefore needs to desperately be regulated. >> look, there are many approaches being discussed right now. i think the problem is that many of my colleagues, and i'll include myself in this, are still in the learning phase. what i don't want to see happen are bureaucrats that have no market experience come in and try to anticipate when the market is moving, when i have

people coming into my office literally every week, bringing us up to speed. in terms of coming up with a regulatory framework that's going to work in a positive manner rather than just stifle innovation and put the united states behind other nations, ore countries. you know, i want to see this innovation happen here in america, rather than stifle it, let's understand it and use a light touch, rather than come in and have all-encompassing regulation, that at this point, far overshoots the market. >> senator, while we have you here, are you a yes or no on the immigration bill? >> the bill that's been presented today, i think will fail on wednesday. i'm certainly a "no." what i want to see is a bill that actually provides border security. it's remarkable that 2021, the democrats said, there's no problem at our southern border. in 2022, there's no crisis. 2023, there's no crisis. suddenly in 2024, they put forward this bill saying there's a crisis and the republicans don't vote for this bill, it's the republicans' fault. this bill has a lot of problems in it that will actually

incentivize more illegal immigration. they're talking about more than $20 billion additional coming into this. we need to enforce the laws, need airtight legislation that will force president biden's hand to enforce the laws on the books. instead, what we've got is a lot of funding to incentivize, to facilitate more processing of people. and frankly, i think it will ties the hands of the next administration if we were to pass the legislation as it exists right now. i'm definitely a "no" on this. >> senator, do you believe that if a bill like this were to, in fact, get enacted and passed, that it actually would be a positive for president biden, and therefore a negative for former president trump in terms of the broader election? >> i don't think it's going to be a positive or a negative at this point. this is just a messaging bill right now. it depends on how they spin it. president biden's already taken a victory lap on this. i think what he would do, though, if this were implemented, it would make president trump's job much more difficult next year. if he's to win the election in november. president trump demonstrated

that the executive authority exists today. president biden came into office in 2021 and the executive order took down the remain in mexico policies, policies that will work to stop building a wall. all of that can be reinstated immediately. what i don't want to see is more capacity and more rapid processing of people. and frankly, more messaging going to the cartels that actually control the southern border and the northern border of mexico. more messaging going to them that there's just a new path to come to the united states and here's the way to do it. that's what this legislation that's drafted right now would actually accomplish. that's a loss to the american citizens, a loss to the united states. and ask the people in new york or chicago if there was a crisis versus what they're experiencing right now. >> it's a bit of a bigger debate. >> i don't think necessarily the administration would say it's a better or faster path more anybody. in fact, it makes it harder, but it's a longer conversation and hope we can have you back to discuss it. thank you. >> i look forward to it. coming up, a top boeing

analyst is going join us on a raft of issues facing the company to see who stepped down from heading the investment committee at morgan stanley? mike wilson. he's staying and he's still going to do a lot of stuff at morgan stanley. as we head to break, check out shares of some of the biggest companies that reported quarterly results this morning. "squawk box" will be right back. [busy hospital background sounds] this healthcare network uses crowdstrike to defend

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all right. news just out right now. docusign planning to cut 6% of its workforce. those layoffs will affect about 440 people. docusign says the majority of the job cuts are in its sales and marketing unit. the stock right now down by about 5.6%. let's talk more about boeing and the issues it's facing from last month's, we're calling it a door plug blowout. to some newly disclosed manufacturing issues, regarding drilling inside fuselages. the head of the faa joined us last hour, ahead of the congressional -- of his congressional testimony today. here's a little of what he had to say.

>> i think what we've seen here is, there are production problems. what we saw on january 5th, it identified two issues. there was an issue with the plug door, which we dealt with sort of with one work stream. and then it just raises issues about the production of boeing, what's going on. there have been a series of problems over the last few years, and we need to get our arms around. >> joining us now, peter arment. he rates boeing an outperform with a $300 price target. are you more positive on the stock now, peter? were you ever? did you ever have a sell or a neutral on the stock? >> i think going back many years ago, we probably had some different ratings on boeing, but currently, i mean, we look at this as a situation that will pass. we do think that most long-term investors are focused on, you know, the opportunity for the oem production sort of stream to

get back online in terms of syncing up where it should be, which is at much higher levels, and that's what we're talking about for mid-decade. we'll see production recover. we'll see boeing get pack to producing significant amounts of cash. and obviously, getting the company back on kind of a run rate status. yeah, for sure, i think this has created a lot of anxiety. it certainly has created a lot of incoming e-mails from around the world, focused on this situation. but we remain constructive. we are obviously even more constructive with the stock that has pulled in significantly this month with that incident. >> amazingly, safe to fly. we all know that, but when things like this happen and production is affected, it has a lot of are up ripple effects ace economy, across people's travel plans. you can see it happen again and again and again. it's not an inconsequential

thing. i understand what a one-off is. i don't know what you call something when there's this one-off, and the second one-off and a third -- we need a new word for what a one-off is. and i'm wondering if there's a deeper problem at boeing or whether it's a series of what really are one-offs. or is there a quality control issue just pervasive at the company or at its supplier? >> well, i think your open comment just kind of said it. normally, this is -- i mean, this is an industry that's built on safety. if you just think about the data, a boeing plane takes off or lands every two seconds, 24 hours a day, 365 days a year. and so, you know, this is an industry that is -- that prides itself on safety, whenever you tour one of these factories, the safety briefings are intense. i do not think this is a culture issue. the 31,000 employees at boeing commercial aircraft are passionate about the work.

they know they lost some share to airbus. clearly they want to get back to seeing boeing on the winning side. i think it's more of a struggle coming out of covid, frankly. you have a lot of new employees, different employees in different jobs. a lot of things that have just . spirit and boeing will continue to recover and a six-week audit will be resolved probably by the end of the month and think production will be allowed to move higher and i think, you know, boeing's leadership is in line with the regulators, with regulator whitaker said, you know, is that there was no real new showstoppers so we do think this is a time to be leaning in and buying boeing aggressively. >> at this point they haven't lost any major customers. i know there's some grumbling and some of the major carriers say we might look at boeing or

i'm sorry, airbus, someone like united, do you think that's tough love, that's not really going to han, or could they actually start losing market share, more market share than just, you know, on the edges? >> well, i think it's a real threat but then you have to kind of look at, you know, airbus' backlog is enormous just like boeing's and where are you going to be slotted in for getting new deliveries. >> why do you think airbus -- we haven't we seen, like i said, there's a one-off, two-off, three-off. we haven't seen similar things with airbus, have we, or is it about to happen? has it been glossed over? why haven't we seen the same issues? they're building very complex machines, as well. >> yeah, yeah, no, for sure. i think you're right but there are issues that come up at airbus all the time. i just don't think they're

getting the headlines and nothing as what we saw with alaska airlines so it is an industry enormously complex and i think a lot of this is just getting back to kind of a normalized status post-covid. >> all right, peter, thank you. >> you got it, joe. >> we'll get you ready for the trading day ahead. ♪♪ you ready for this? ♪pump up the jam pump it up♪ ♪♪ ♪♪ ♪♪ ♪♪

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welcome back. we got a little more than 30

minutes to go and want to talk markets. liz young is here, sofi's head of investment strategy. we've been batting around what we heard from jay powell sunday night trying to make sense of it, reading the transcripts versus what we heard. >> i think a lot haven't been listening to him and a lot hasn't changed. we are going to err on the side of staying too long or higher than maybe people think we should in order to solve the problem and i still think their threshold for pain is higher than the markets and have seen a couple days of a sell-off. even one or two days don't seem to last. there's clearly appetite to buy. >> when you think, though, about what the interest rate picture looks like in calendar 2024, what's the sofi view of the world? >> i honestly never believe they

would go in march or at least didn't believe they should. we didn't have any real evidence they should and they also -- they like to predict it. they like to foreshadow it for the market very clearly thinking about doing it. okay, now we're really thinking about doing it then we're going to do it. didn't have enough time to say that yet so pushing it back from march is a good thing, however, now we're pushing it back to the point if we still think we'll get 5 or 6, you might see some 50s in there, and they've proven they don't have to do it in a very smooth stepwise function on the way up. on the way up they felt late. >> you can see a 50 basis point drop. >> the more they way, the more likely. >> second half of the year walking into an election 15cycl and i know everybody doesn't like to think about the politics but a little birdie thinking -- >> i think it's in people's head

more than it's in jerome powell's head. he's not up for renomination in 2026. who even knows if he wants that seat again. what he would be thinking about is more, am i worried about my own integrity and reputation or the federal reserve? i assume he's more concerned with integrity and credibility of the federal reserve and restoring that. i don't think there's a lot of politics -- >> against that backdrop if you're an investor playing the equity markets, you do what? >> so, right now, we've returned to this theme of big stuff leading, the magnificent seven has become the magnificent three or four and have a new stock that entered the chat. that is still late -- >> when did that phrase come into play, by the way? >> after the chat. >> something's entered the chat. >> entered the chat or can you double click on that. >> no. >> double click on that. >> i missed that one. >> people say it now.

>> it's late cycle behavior, and i think this time in the cycle is when people get a lot of fomo, and that's okay. there's stuff to buy out there but would be careful about everything and a feverish rise. if the business cycle is longer than we're used to, it doesn't mean it still doesn't han. usually the hikes are not what you get you. it's the cuts. pushing them out saves us a little. >> if we're in the seventh, eighth, ninth inning? >> i don't know. could be extra innings. >> we're in extra innings. >> we could be. >> where does 2024 end? >> we spent all of 2023 looking around the corner for a recession that happened in 2024 we're glaring it's never coming. both will be incorrect, so in 2024, maybe we get more of a slowdown than people expected or at the very least, more of a slowdown than the market has the palate for.

>> what are you thinking about, joe? >> before we end the show you could give bullet points for what's in your -- >> for those not watching earlier joe and i are considering a no labors run, just so you know. >> liz turned you down. >> and becky turned me down -- she doesn't want to travel. >> she won't serve. you'll get rid of carried interest and you're going to do a stepped up stock basis on -- >> that's very important -- >> 10 million maximum you can borrow against appreciated stock. >> 10 million maximum before i'll tax it as income which is a huge amount, by the way. >> i've only not -- >> that's a lot money. >> i want to make taco tuesdays official as a federal, like, actual designation for but other than that -- >> you're relying on me.

>> one more thing? >> i'll send you down to the border to work on the border. >> i'd rather work on the underlying causes and stay where i am. can i do that? we've seen that -- oh, no, that's already been one. >> i'll send you to mexico. >> where i can get tacos. good idea. >> okay. thank you. >> are you sure you are not going to serve -- >> yes. >> join us tomorrow. "squawk on the street" begins right now. good tuesday morning, welcome to "squawk on the street" i'm carl finmi quintini. it begins with global markets and china's stocks come roaring back. increasing chaos and danger. >> plus the weight loss