counsel report for saying he exhibited poor memory during the investigation of the classified materials at his delaware home. it is february 9th, 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 andrew ross sorkin along with joe kernen. melissa lee is with us today. hanging out. all three big hours. becky is off. >> melissa is here. >> let's show you the u.s. equities. dow is looking to open higher right now. the dow would be up 20 points. nasdaq up 45 points. the s&p is looking to open six points higher.

look at what is happening oversea overseas. green on the screen with the exception of france. china's markets are closed for the lunar new year. let's look at the ten-year note and the two-year note. ten-year note is 4.16%. melissa. shares of expedia are lower after peter kern is resigning from the company. ariane gorin will take over as the incoming ceo. the company also reported earnings and revenue that beat estimates, but warned that revenue growth would moderate this year's air fare drops with the grounding of the 737 max 9

fleet. >> can you help me, sorkin, with the a.i. future and what it means for companies like expedia? can they use a.i.? >> they're trying to use a.i. they built it into the app. >> they don't go away with a.i. >> no. >> give me a good vacation to iceland and they can come back with something. they use expedia? >> whatever you use chatgpt or the gemini advance or whatever it is, you will use api into -- it will say we need to get a plane and dependingon the price is through expedia. the issue is if you use a third party system, it may start to look for the better price and may look for how you use your

miles. it does -- i still think you need some service where you are buying the actual product. that's where they have an advantage. they also have data and that data may feed the a.i. in a way that an a.i. on its own might not. >> you think a.i. will replace everything. >> that is the pro argument. >> i'm worried about it. yeah. >> replacing you? >> yeah. no. we'll talk about the chips later. i'm fascinated by that. when you talk about the investments, you don't talk about $7 trillion. that is deep. that is what sam altman thinks you need to build out a.i. that's a lot of power. that's human level that is

coming soon. then i'm worried again. not just for me, for all of us. >> mankind. >> hunter killers to make sure the hydro base and carbon life forms are gone. you have to feed them and they are costly and they have waste. all of our frailties. >> that's what you worry about? >> i do. not for me so much, but your children. >> i worry about -- right now -- >> worry about trump winning the election with deep fakes. >> right now, there are bad people in the world who -- let's say it this way. there are super smart people in the world. most of the super smart people in the world are not super, super bad for the most part because they can take their smarts and use them for good

things. >> are you trying to give me a life lesson? >> you need one super smart person to be bought my money. >> of course. a lot of people who feel left behind and prepared to do bad things, but may not be able to do those bad things at scale because they may not be as super, super smart. otherwise they are not in the circumstance they're in. if you add a.i. to that and then lots of people who can do super, super bad things with the help of being super, super smart, you have a super, super problem. >> that is the reason the clock is at 30 seconds until midnight until the end of humanity. one degree celsius warmer in 00 years. shares of l'oreal falling in paris. the company reported lower than expected sales and reported to a slowdown in demanded in asia. sales were higher in europe and

north america, but fell 6.2% in asia. shares of pinterest. that's fun. that's why you love your show. >> all about trading. >> trading. you don't have to worry about these big things. >> we talk about these issues as well. >> the state of the country for the next four years? >> in different formats, yes. how it impacts healthcare, et cetera. >> pinterest shares are lower. earnings of 53 cents a share. revenue fell short. active users fell to 498 million. average revenue per user was $2. that was 5 cents below estimates. the current quarter came in weaker than expected. stock fell 28% after hours, but rebounded after the third party app integration with google

announcement. it pairpared the losses to some extent. pepsi with $1.78 with the earnings. revenue is below the $28.4 billion consensus. north america beverages fell 2%. pepsi sees 8.15 a share. we will dig into the numbers in a few minutes. cloudflare shares at 15 cents per share which beat estimates of 12 cents. guidance coming in higher than the street expected. the ceo saying cloudflare signed the largest customer deal in the quarter and biggest renewal to date. look at shares of inter interactive. shares of that game publisher are falling this morning 9%. earnings coming in short of

estimates. the forecast for the current quarter also disappointing. the stock is up for the year. yesterday, president biden responding to a report from special counsel robert hur and taking questions from the media about his memory, including this one from fox's peter duecey. >> how is your memory and can you continue president? >> my memory is so bad, i let you speak. >> your memory has gotten worse? >> my memory's fine. my memory -- take a look at what i have done since president. none of you thought i could pass the things i passed. i guess i forgot what was going on. >> a few moments later, president biden referred to the egypt president as the president of mexico. we will talk about that news conference with axios reporter

alex thompson at 6:30 a.m. eastern. we have an existential problem here. we have two bad -- one option and the other is worse. i do think i'm unhappy with the people you associate with that thought kamala harris was the right move. there's no fall back, andrew. i don't think you can get rid of her. you can't go around here. what should democrats do? help me. we're in desperate times. >> the problem is the bizarre stalemate and it is a game of chicken with the republicans and democrats. i think that's the fundamental problem the whole time which is to say you have the two candidates which are flawed. i will say if i think there is a view if one dulcandidate wasn't

there, the other candidate would not be there. >> i don't think the democratic party -- she paid her dues. she was vice president. she is next in line. she's the heir. >> of course, she is. >> i think something might -- it is bending. it may break watching president biden at this point. we're talking about the election which is not for another year and four years after that. he is dealing with the hardest job and hardest problems any individual can deal with and it is sad. you know what i'm saying. >> that's a problem. >> who? who? who are you bringing in? >> i don't know who you bring in. >> we have marc warner on. i would bring in anyone normal. >> who would you vote for here? >> i was trying to think of democrats. there are a couple i can think of. >> as top of the ticket or vp? >> top of the ticket. plenty.

i'm pining for the days of h.w. read my lips. no new taxes. bill clinton. >> you would vote for bill? >> anyone that seems kind of like, won't you? i don't know. >> what if obama were to come back? >> don't put me there. >> that's impossible. >> someone you can pick rather than these two. which obama? >> we'll continue this conversation. coming up, the white house announcing plans to allocate $5 billion from the chips act. we'll take you live to washington next. that's so far from what sam altman says he needs. raising trillions, or hoping to raise trillions to overall the chip mafrnufacturing capabiliti. that story after a quick break.

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welcome back to the "squawk box." openai's chief sam altman not looking to raise billions of dollars, but trillions of dollars to transform the global semiconductor space. he is in talks to raise funds to boost the chip building capacity and expand the ability to power a.i. the project could require raising as much as $5 trillion to $7 trillion. we don't often talk in "t" about that. >> i would much rather -- i'm

ready to go full force. raise my taxes or whatever. >> for a.i.? >> yes. for the $5 trillion or $7 trillion that sam needs. wouldn't you? i'm not willing. >> are you joking? you said a.i. is a threat to mankind. >> you think we are smart enough to harness it? >> unless it's evil. >> the first three. you can never harm a human. you can never do anything to harm a human. three is repeat one and two or something like that. >> that's nice. >> you think it will work? >> no. the white house announcing plans to allocate $5 billion to create the national semi conc conductor. we have megan casella with more

on this. how important is this? >> reporter: it's true, andrew. it is not trillions, buff the white house says they are allocating $5 billion of the chips act money allocated earlier in the administration. they are saying this is the next step in the chips act implem implementation. to set up a public-private partnership for the semi con di ductor center. this is building the work force that u.s. companies and others have said we really need to set up a domestic semiconductor industry. this is the next step, but we are waiting on the big awards expected for intel and tsmc. the commerce says this is coming in the next six-to-eight weeks. >> megan, the capitalist in me is saying should we use the $5

billion to subsidize with fabs and chip making? this sounds like it is creating training and other programs that i'm not saying won't work, but raising the question. >> it is a good question. it is the right question. the commerce department was asked about this. what secretary raimondo has said it is implementing the larger portion of the money. if they did just that, they would not get the domestic industry off the ground and make it sustainable. we heard the criticisms from the manufacturing stage on that in the u.s. we don't have the labor to build the fabs and keep them running. that's what the administration says this is largely meant to do which is get the workers they need. >> final question. you have a take on sam altman?

does $7 trillion make sense to you as you have been reporting on this world? >> it's a huge sum of money. i'm curious where they came up with the figure. we will ask the administration about this and how much are they aware of this and where is that money coming from and do they want restrictions on it? they do need a lot of money from the public and private side. you know, you may as well get it going. >> megan, thank you. i appreciate it. >> thank you. coming up, we dig into pepsi's results with the analyst next. the stock right now is lower on the back of the revenue miss. later, the big business of super bowl advertising. we will talk about the trends for the year and who is paying the $7 million price tag for a 30-second spot. "squawk box" will be right back. i'm proud of black heritage because of the resilience and ada

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pepsi reporting quarterly results a few moments ago. we have brian spillane with us. thanks for coming in. >> thank you. >> it was a miss on revenue for the north american business. was that why revenue missed overall? >> organic sales miss was north america with the slowdown in

beverage business. quaker recall will run into next year. they saw softness in the middle east which is a common theme across earnings season. for pepsi, which has a meaningful market share with beverage, it had to hit on revenue. >> for the quaker foods recall. i didn't know about it until i got the email. you think this seems bigger and longer? >> it will take them a while to get product back on shelf. my impression from lowering the revenue guidance is the quaker recall which will go on for the next six months. >> how is pricing these days? you think they benefit a little bit from the decline in input costs? >> organic sales in the quarter, although it missed, is all price driven. we are seeing a lapping of the anniversary of price increases last year which has an effect on volume.

in terms of commodity costs, they he aare moderating. these companies have had to raise prices to protect margins. there is a lack of interest in lowering prices. it is trying to get consumers to acclimate to what they heare paying now. >> the headline is increased prices has hurt demand for the frito lay products. input costs have been coming down. they didn't come back down. they stayed where they were. >> there's another dynamic happening there. we were all eating at home for the last couple years and we're buying larger packs. a lot of volume running through the dpgrocery store to the pant. as we mobilize and get go to convenience. we may be buying the same amount, but not the big bag.

that has a negative effect on volume. there is a consumer which is re-acclimating to value. 1.99 for a bag of lay's or 2.99. >> i was looking at applebee's with $14.99 for all-you-can-eat. it uis now $19.99. >> i saw something the other day is 1.99. i was happy. pasta. >> i was quoting that article with the 18.99 big mac. i got people sending me notes saying why are you saying that on tv? it is not real. >> it is in the mind set. >> scrambled eggs on toast in

london. >> you are having the caviar and truffle. >> no, no, no. 54 for the british pound. >> smallest violin for those people. >> a trendy place in london that i never heard of. >> called the four seasons? >> no. it was a trendy place. i was thinking it might be something i heard of, it wasn't. >> a place you haven't been? >> trendy. >> brian, in terms of what you expect with pricing power going forward, what are you modelling with the economy? >> we have very little incremental pricing priced in across the consumer staples. it gets back to the companies which are priced to inflation. consumers are re-acclimating. volumes are down. ac pepsi volumes down.

we're not expecting much at all especially in north america. >> how does coke versus pepsi? has coke done better? >> they both have priced. i think for coke, it has been a little less of an issue volume wise because they are less north america exposed. i think when you compare them in the u.s., i would say the difference between the two is more portfolio. pepsi still has holes in the beverage portfolio. >> across from buckingham palace. hyde. h-y-d-e is the restaurant. it has truffles with eggs. >> news you can use. brian, thank you. >> thank you. coming up, president biden

disputed some of the new claims by the doj special counsel that he exhibited poor memory during an interview about classified material. we will show you what he said. as we head to break, here is a look at the s&p 500 winners and losers. ♪♪ whoo! ♪♪ light work! ♪♪ next victims.

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good morning. welcome back to "squawk box." live from the nasdaq market site in times square. the nasdaq is looking to open 52 points higher. s s&p is looking to open 8 points higher. president biden responding to a report by special counsel robert hur and defending his memory. >> i know what the hell i'm doing. i'm president and i put the country back on its feet. >> later in the news conference, the president referred to egypt's president as the president of mexico. joining us is alex thompson. the national political correspondent for axios.

uncomfortable day for everyone yesterday, alex. i felt uncomfortable. the initial report came out and the president responded to it and they trotted him back out. they had to later in the night. they loathe doing that. they had to because it was so bad. >> you got the sense that joe biden wanted to do it. we saw joe biden who has a pretty large temper behind closed doors. that's what you saw on disdispl. that was angry biden. that is what his staff refers to with that mode. to your point, they rarely have biden go out there. he rarely does press conferences. he rarely does them televised late at night. that is partly because aides have noted he can get tired. he makes more mental flubs. his stutter will occur when he

he is tired. you saw that last night. as he went out, no democrat i talked to, felt he did himself favors. he did a forceful defense. he called out the special counsel saying he did not remember his son beau had died. he told democratic members of congress that how the "f" do you think i don't remember the day my son died. this is really white, hot rage. he ended up making another flub when he confused the president of mexico and egypt. that comes with the context where this comes in the same week where joe biden has made a number of errors when talking about world leaders that have died many years before some of the events he has described.

he mixed up french president macron. he did the same thing with the chancellor of germany. this was uncomfortable. also, i think, a very infu infuriating day for the white house that felt this report should have never happened. the investigation should never have gone to a special counsel which would have meant it would have been closed quietly with thoughno charges. >> there was some gratuities nastiness in the report. i agree the individual was trying to make the actual treatment of the documents was careless. all of the photos we saw. there's no doubt whether or not you would have brought the case or whether you had enough to bring the case or say you are not bringing it because the jury

won't convict? >> i think it is problematic what we saw in the report. it might have been gratuities nastiness. i say this as someone on the air and critical of former president trump. what we saw president biden do was clearly, according to the report, not something that was something that was mindless, but purposeful in the same way. i know president biden would say it was not in the same way, but to some degree, in the same way. that should be troublesome to anybody. no matter what your politics, this should be considered a problem. >> alex, there is not an obstruction element. maybe the initial acts were similar. those cancel. >> that's a major distinction. >> you are right.

the human condition, alex, we're in denial. everybody and people age differently. some guys in their 90s are amazing in what you see and some people in their 70s lost a step. it is a human condition and i don't know whether denial leads democrats or what their options are. you see something which is clear as the nose on your face and keep saying no. >> i think you are both right. i can tell you that behind closed doors, there is a bit of joe biden age denialism. to the point people roll their eyes at it. he feels so much younger than his age. he feels vigorous. some aides think he does not quite realize how he can come across to other people. now, you know, to your point

about the problems of this specific case, yes, the circumstances of president trump's classified documents is different. robert hur goes into it in the report. trump's behavior was of a different kind. andrew is right. he was having classified documents strewn about in his garage. pictures in that report, especially when he is now saying he is the most qualified person to be president and the most experienced person to ever be president, which is true, then why were you careless with the documents? that is something on the trail. to part of the point of the gratuitousness, robert hur will testify in front of congress. that is another example of this in the headlines and he has to explain to house republicans why he did not charge and he has to

explain to house democrats why he included all of the details. you will get a clip of him talking about his interview with joe biden and why he describe him as an old man who is forgetful. >> we mention a different obstruction component, but andrew said the initial act was the issue. one charged and one not. they are picking on donald trump. >> absolutely. this is the worst of both worlds if you are joe biden. they are saying two-tiered justice system. you saw this from house republican leadership last night. they are saying if you are too feeble to be charged, how can you run for the oval office? how can you be president for five more years? that is what he is running to do. >> it is tough watching right now. i can't imagine. even a year ago. you can see a bit of change or

two years ago with joe biden. what does that leave or the options being talked about behind closed doors, alex? >> democrats don't really have options. let's say some people talk about this scenario where joe biden decides for his sake to stop donald trump that he withdraws and biden is the only one to make that decision. he is going to be the nominee as long as he stays in the race. the party could tear itself apart if he were to do that because the primaries are already over. enough primaries to get the nomination. you are heading to a convention fight. democrats have scheduled convention for mid-august which means you have a nominee just four weeks before some early voting starts. they only have four weeks to introduce themselves to the

country. on the convention floor in chicago with the migrant crisis and palestine and gaza, the party could tear itself apart trying to find a nominee. that's the other option here. obviously, biden could say i really think vice president kamala harris is the person and that would make a big difference. both scenarios, a lot of democrats think are much worse. others say all tsteam ahead. this is our guy. >> it sounds like "weekend at bernie's." you have to fall back on it. if there was every a no labels possibility, it can never happen, i don't think. it's just a fool's errand. there are normal people out there. i don't know if they are totally

normal -- who is? nothing like that could happen, could it? kamala harris, they would rather run biden than kamala harris, i think. >> it is really striking. i remember "the new york times" poll that started this polling anxiety with joe biden. if you look at the polling which showed biden down in the swing states, kamala harris, because of the concerns with his age and his poor polling with younger voters, kamala harris was polling better in the swing states than biden. that is the level of concern for biden doing the job four more years. to your point with labels. there is no successful third party since the republican party started in 1860. teddy roosevelt could not do it in 1912. i think centrism, i think there

is how much share that voter can get. >> it is really possible. former president trump could be in for four more years. i don't know what country this will be in with that happening and the level of vitriol and everything else, alex. none of it makes me happy. it's friday. pepsi sent me a bunch of doritos for the super bowl. >> are you happy? >> did you just say that? don't that. >> i gave it away. >> you are the giving pledge. you are like warren buffett. >> i gave it away. >> every bag. >> i tried every single thing they sent me. my problem was i don't have enough of the things to keep things fresh. >> clips? you have so many bags. >> i won't try.

i like them all. i did. anything ending in "toes" i like. coming up, the pepsi analyst mentioned higher cocoa prices. we will tell you how much they have risen since the beginning of the year. reminder, get "squawk pod" on your favorite podcast app and listen to us any sz time. meets bold new thinking. ( ♪♪ ) partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria.

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just in time for valentine's day with love on the set. >> love is in the air. >> cocoa prices surged to all-time highs as bad weather damaged crops in africa. cocoa futures are up $1,000 per metric ton since the start of the year. hershey's ceo says it will be up with the cocoa prices.

coming up, we talk who is paying the $7 million price tag for the 30-second super bowl spot this weekend and who are the potential winners and losers t ad ofhegame this weekend. all that and more right after this. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. ach 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, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. ♪♪ ♪♪

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welcome back to "squawk box." the super bowl is not just a championship football game, it is also one of the biggest if not the biggest day for advertising. top brands paying about $7 million for a 30-second

commercial that could be seen by more than 100 million viewers and the ads prerelease, our next guest's favorites are uber eats, booking.com and dove. joining us now is marcus collins, university of michigan marketing professor for the culture author as well. good morning to you. let's talk about the ads and let's talk about whether in the end it is worth it, marcus. >> sure. well, first of all, good morning. thanks for having me. of course. it is worth it, depending how you define worth it. if you think of the super bowl as a moment that i'm going to present my ad and it is immediately going to turn into consumption, i think those chances are quite unlikely. if you see the super bowl as a media moment where everyone is watching shoulder to shoulder and i can create a catalyst that gets people talking, that gets my brand and its context in the cultural zeitgeist that govern how people behave, that's a win.

because we understand the value and the influence and culture and how those things drive consumption. >> talk about culture, i want to talk about a couple of these ads. one thing that is fascinating, this particular year, is just the onslaught of celebrities that have been hired by these companies to market their wares. it seems like we have squeezed in, packed in more celebrities than ever before. in truth, celebrities of a particular generation, what do you make of that? >> well, celebrities provide additional media, and they allow us to invest ourselves into a spot, into an ad, because we have some relationship with the celebrity. not only that, but the celebrity provides context. if i'm setting up a joke, if i'm setting up a premise, the celebrity puts that premise in a context where the audience can get involved very quickly. i think the idea of having celebrities that are from yesteryear, in some ways kind of nostalgic allows for a bigger door to invite more people to be a part of it, to see themselves

in it. i think we use people who are much more recent, they help provide a sense of recency for people who are more used to understanding the celebrity as an influencer, to see their favorite influencer on screen, they go, i get it, you're one of us. >> one of the ads we have been running while you've been speaking is the uber eats ad with jennifer schwimmer, beckham in there, you like that a lot. why? >> i thought it did a really good job of playing on this notion of forgetting. like, if you forget a thing, uber eats' got you. it plays on david beckham and his wife, it is a bit more nostalgic, like, "friends," something contextual to the game like usher. and having people we don't know

to just provide a round sense of what this ad is trying to communicate and the value proposition that uber eats provides. it is funny, i think. it is contextual and i think it is quite relevant. >> you like dove. why do you like dove? >> this is dove doing what it has always done, preaching the gospel. dove has been a brand that is inconspicuous, but very forthright and very consistent about how it sees the world. dove believes in providing self-esteem, and providing a sense of confidence, especially for -- here is dove using this big media moment, contextually relative to the game, saying girl needs to feel more confident so they stay in sports. this is dove being consistent in their brand, but also ensuring that their message is aligned with the contextual moment that we're observing, sports. >> marcus, is there any commercial that you haven't seen yet that we don't know about?

is there going to be a surprise ad that might show up this weekend? >> oh, definitely. a lot of brands are keeping it close to the vest, so they have a bit of drama, a bit of theater, when the big game shows up. some other brands we see now are using early stage presenting of their ads so they get more media wattage, we're talking about the brands today. but some brands want to wait until the massive moment they can splash and get the more bang for their buck, at least with regards to getting our attention. >> marcus, is it going to be a little bit surreal seeing, like, travis kelce in ten different ads and then cut back to the ad and he's catching a pass? that's never -- and patrick as well. >> it is going to be like the tide ad. like the super bowl is a massive tide ad. >> both. they're both in the super bowl, the ads and the super bowl. >> but there is no ad with taylor in it, i don't think. >> is she going to make it? have you done the math? i don't know if we can even talk

about her being bad. she's going to make it. >> she's going to be there. >> marcus, want to thank you. by the way, talking about good looks, he's got a -- i don't know if you have good lighting or a good camera setup, what kind of rig you got going on over there? >> you know what, i want to make sure i show up, man. this is a big deal being with you guys this morning. bringing my sunday best. >> for those directors out there, what do you do in that's not on a laptop, is it? >> this is on my laptop. i'm using a dslr camera, i'm in my office at the university of michigan, this is just how i show up in the morning. >> shout out. nice to see you, sir. enjoy the game. thank you. >> thank you so much. >> coming up later in the show, we'll talk super bowl betting with fanduel ceo amy howe in the 8:00 hour. "squawk box" coming right back.

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good morning. futures in the green on this presuper bowl friday. and the s&p 500 crossing over the 5,000 point level for first time ever. we're going to read the charts coming up with the one and only katie stockton straight ahead. plus, investors traveling away from expedia this morning. the stock tumbling after its earnings and guidance. and its ceo is stepping down. an update on today's big move. and president biden defending his mental fitness. what this could mean for the race for a second term. all this as the second hour of "squawk box" begins right now.

welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen with andrew ross sorkin and melissa lee. becky is off today. here are the futures and some notable things happening. you see at this point the s&p caught up about 9, i think it closed at 97, something like 49.97. that will put us, we did cross above 5,000 yesterday. but we will be there. looks like. unless something changes between now and theopen. as i said, the s&p managed to do that yesterday. not for very long. 5,000 milestone briefly before the closing bell, but fell back slightly to close just a couple of points shy. other things happening, maybe treasuries we have seen a little backup in the ten-year yield, 4.16 this morning. we can check out oil, which no one can really explain why oil is still at $70 or wherever it is.

$76. so, in trading range, i guess. a lot of -- in a very dangerous world, kind of interesting we're just in -- still down in the mid-70s. and then we wanted to mention bitcoin, which is 43,000 a couple of days ago. remember the etf came out, about 49, traded as high as 49. the excitement, i don't know whether it waned, but it went down below 43,000 for a little while. today, it is up another $1700. that's another almost 4% move, up yesterday, so back to the low 47,000. check out pepsico, reporting results in the last hour. revenue came in below the street's expectation. frito lay north america was also a miss. the revenues there slipped 3%. beverages also slipped, quaker oats was a huge decline versus what was expected, up 3%. so we're watching pepsico shares down by 1.6% in the premarket session.

>> yes. i don't know whether -- it is not a zero sum gain. doesn't mean coke is doing better. different companies really. i think pepsi on the super bowl -- i can't help it. >> as you say, you like everything with -- >> is there anything -- something ending in tos you don't like it? >> i'm a tostitos guy. >> doritos, fritos, it goes on and on andon. >> tostitos for the win. >> plain tostitos? >> yes, with good salsa and guac. >> i know you like innovation and a.i. >> innovation and fritos has been proceeetty staggering for last couple of years. chili cheese, twisty, honey barbecue, some really good stuff. good stuff, good for you too. take a look at -- >> i'm a classic kind of guy. >> you like the tostitos. you put salsa on them, right? >> from a jar? >> yes, but --

>> hot, mild -- >> hot, but talking about innovation -- >> restaurant style. >> i love the chip that became a -- the scoop. >> i don't like those. >> i like the regular chip, classic. >> the scoops can avoid double dipping, though. you get enough on the first one. >> maybe scoops for a party setting. flat ones for personal use. >> that's a good -- we solve a lot of problems here. right here. take a look at the technicals. joining us katie stockton, managing partner and cnbc contributor and she admits that, that she contributes here. 5,000, is that a resistance level now? what is the resistance level? >> i looked back at past sort of round numbers like this, and very nonscientific study and found that it did not act as resistance in the past. 4,000 kind of blew right through that, 3,000 did the same. so i don't think it is a really big threshold except psychologically. i have to say, remember when treasury yields inched up around 5%, that did become a resistance

level, of course, for yields. so, there are times at which those round numbers matter a whole lot, but in this case, i don't think so. we still have such strong momentum behind the market across time frames and i think that's what we want to respect. >> it has been confounding a little bit. i wonder about sentiment. is it positive now? all last year it was negative. we love walls and worry and things like that. sentiment gets too positive, you have to worry. but lately there has been -- like, negative news in the market, just seems to melt up by the end of the session. like 150 points on the dow is, like, the dow seems to be good for that almost every day for the last six weeks. >> i think you can see that the sentiment isn't overwhelmingly bullish in the small caps, right? or surrounding the small caps. you all have been showing a lot of guests that talk about breadth being so negative. quite frankly it is not so bad. we have seen digestion in those

breadth metrics, which is natural after a very, very strong breadth surge in q4. that bearishness, that bearish camp is gravitating toward the area of the market that is not working, which is small caps. really only for a couple few weeks. i think that within the next week or so, we will see treasury yields probably top out in this oversold relief rally that they have had, and that could occur to the benefit of the small caps and all of a sudden we'll look back and say, that's a pretty good entry. >> and magnificent seven went to the sexy six, to the fantastic five, or was it -- what is the -- >> i have no idea what you're talking about. >> the magnificent -- >> biggest market cap companies in the market. >> some thought -- you weren't here, we had the discussion earlier this week, it is no longer seven stocks. there is four or five now, andrew, in the magnificent seven? >> fancy four. >> the fancy four. does that matter? we dropped out -- the leadership has narrowed.

>> we still have very good leadership, but what we have seen is expansion in leadership from the sector especially. if you look at the top sectors year to date, it includes healthcare. and that's a new sort of arrival on that front, so, as long as we have that breadth expansion on the sector front, i think it is an up trend that can sustain itself. the bearish camp is gravitating toward the regional banks and the pullback there. but if you look at the broader financial benchmarks, they're still very strong. >> market has continued to trade higher as the -- that really dovish scenario that six weeks ago people were -- seven cuts, starting in march, that's off the table. and saw jay powell on "60 minutes," what does it say about the ten-year, what is the -- 4 1/2 in the cards or 3 1/2? >> i would say low 3s is very -- from a technical perspective.

i don't know why. that's the hard part. >> the jobs market is so strong, the gdp is so strong, i don't know why yields go down. >> for me, from my perspective, there is a very meaningful loss of upside momentum that we have seen there. i don't think this is a secular downshift. i think we have seen a secular upshift. >> in yields? >> in yields. this is something that could be impactful this year, maybe some -- into next year to some degree, based on our indicators. that loss of long-term upside momentum is such that it could be maybe 9, 12 months before we get sort of a low in yields. so we're seeing this as corrective, but something that should persist. and it is support, which is roughly 3.8 to 3.9 is broken and the lows 3s -- >> we're going to have to have the cuts that are off the table, so they could be back on the table again in your view? >> i don't know, but -- >> it is good to be a technician. the recession is off the table

now unless it is -- now one can happen since no one is expecting it. >> i look at it from a technical perspective, trend falling perspective and it has been really helpful over time to judge these momentum shifts. and it is a pretty meaningful one at that. 5% psychologically significant, that makes sense as well. so, we want to, you know, sort of view this relief rally that we have seen in the yields as something that will be tem temporary, somewhat fleeting. the resistance for the ten-year is 4.45 to 4.40, below that level we're looking for them to roll. >> 25,000 on bitcoin, you said, well, looks like we do 30 and if we get to 30, 36 is next, and through 36, and then it all happened leading up to the etf, which happened at 47,000. what was that for the last month after the etfs? >> well, there was definitely a sell the news event there and we got a proper pullback out of the cryptocurrencies more broadly. and we saw that shift into ether

and relative terms. i thought that was interesting. both ether and bitcoin have avoided what could have been reversals of their intermediate term up trends, not the long-term improvement, that's reserved. but they were testing some support over the past few days so this rebound that we have seen preserves that support and tells us that risk on sentiment is still very alive and well in that space. >> is copper interesting now? what is happening? >> i want it to be interesting. i'm watching a long-term triangle formation that looks like it is trying to resolve to the upside. the long-term metrics have improved to some degree, but it is really not a confirmed breakout or anything descisive yet that we have seen. we're watching and waiting to see how that triangle resolves. >> katie, i'm curious, you know, we have been through much of earnings season and it is not uncommon now to see huge spikes on the back of news. i'm wondering what your take is on this, and if there is any sort of significance that seems to happen across -- you had meta, gm, expedia, it seems like

every single night there is massive moves. >> cloudflare i think today. it is wild. so the uptrends have given away to gaps up. and usually when you see a gap up in a strong trend, up trend, it can be exhaustive. but what we have seen from this market is that the gaps are being preserved, so meta is a great example of that. it hasn't fallen back into the earnings driven gap up. and that suggests that momentum is strong and that prices can go higher. we like to look at that gap after an earnings report of something of that nature. >> what about tesla or apple? >> tesla is a breakdown, so if any would get knocked out of that -- >> sexy six? is it five? are there two that are out? >> fancy four, fancy five? >> i think we're at six though. i like sexy six. >> sexy six? >> what about apple? apple going to lead us higher? >> apple is of all of them sort

of disadvantage from an intermediate term momentum perspective. we're bullish short-term apple. if it can get through the final resistance, which is about 198 on the chart, that would be a major breakout. but if we can take a moment and look outside of the u.s., look at japan right now. look at europe on the verge of new all time highs. the breadth has been such that not only has it expanded from the megacaps to other sectors and stocks in the market but also overseas which is a good thing. >> kind of nice to be able to just talk technicals. i thought you were going to say something about, like, the economies of europe and -- >> no. >> you didn't. >> you can rely on me not to do that. >> just going to be -- that's safer. you don't have to, you know, fundamentals are -- >> noncontroversial. >> i was thinking sexy y six m not be family friendly. i consulted my friends at chatgpt, which you know i like to do.

they like the sassy six. >> sassy six is good. >> the swanky six. >> swanky six. >> sensational six? >> do you think sexy is -- does sexy have a bad connotation? >>sizzling six. >> if you keep -- >> i like sensational. if they all break down, what do you call them? they're not magnificent, they're not sexy, they're not sassy. they're stocks and they perform as they do. when they stop performing, then what -- >> what a party pooper. >> on a friday of the super bowl, come on! >> i think, yeah, she's nfl, no fun league. >> come on. i think sexy is okay in that. >> i think sensational is the word. >> sensational six? >> sensational six. >> sensational, but if you sensationalize something you're going to -- melissa just said -- >> you're attaching judgment on -- >> sassy six, got a little sass. >> never heard you laugh like

that, ever in the history of "squawk box." >> a little sass! >> that's on tape. that's on the highlight reel. >> friday morning, people. >> 12 years. i like to take credit for this. 12 years, out of the shell, after 12 years. maybe it's you. i don't know. >> that was good. >> thrilled. >> can you handle the tease? >> i don't know if i can. >> when we come back, the white house putting more money to work for the chips act, we're going to talk to the former white house chips coordinator about the latest investment and what it means for future production a s.s. soil. thatndo much more. beautiful shot of the white house, live this morning. a lot going on in that building this morning and last night. we'll talk about it when we come back. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading.

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welcome back to "squawk box." the white house announcing its

plan for $5 billion to get the semiconductor technology center off the ground. joining us now former white house chips coordinator ronnie chatterley, professor at duke university. good morning to you. ronnie, it is funny because i don't know if another headline is effectively overtaken this one. we're talking about $5 billion and "the wall street journal" this morning reporting that sam altman is looking for 5 to $7 trillion. and it all sort of in a relative basis, you say to yourself, what is really happening here. how important is what is happening this morning from the white house? >> both 5s are important, the $5 billion and the $5 trillion. let's start with the $5 billion. the national semiconductor technology center is going to be a big effort around research and development, other public sector organizations like national labs to get together and make sure that we're not just leading in the current generation of chips, but leading in the next generation as well. so what you're seeing today is the construction of public private partnership, you got the

department of energy, the department of commerce, the department of defense, all at the table with private industry to make sure we're leading in the next generation of chips. we have to design new chips, we have to prototype them, pilot them to make sure we're not just leading with the fabs being built today, we're leading tomorrow. >> how much money, of the $5 billion, do we know how it is being spent? a lot of people say $5 billion, a lot of money, and the private sector, i don't know if you think thaey're doing a good or bad job, but this will be separate from that. >> the private sector has invested about $200 billion in private investment in building fabs and r&d all around the united states. we're seeing that. private capital is going to drive the success of the chips act, and i think in first year you've seen evidence of that. you also need a government commitment to figure out what is the path to research and development what are the new chips we're going to develop, how are we going to package

them, and getting us on the same page with a center like this is really important, even though the actual dollar amount is much less than the private sector investment would be, or with the openai initiative that you mentioned earlier. >> the news of sam altman pursuing this much money means money is flowing to where there is an innovation. the fact he can have and try and raise that order of magnitude to build fabs that will make a.i. chips shows there is that demand. on the other side, he had intel delaying the completion of its $20 billion ohio plant because of the downturn in the industry, so, is there a danger here that we're subsidizing the wrong things instead of paying attention to what market forces are telling us? >> what i see is the market telling us that there is a massive opportunity in the united states. that's where you've seen $200 billion in investment in the u.s., when it comes to a.i. chips, we need new fabs and in designs and i think altman's announcement today reflects that. and i think a lot of that is going to be designed and manufactured in the united

states. of course, other countries around the world are going to play a role and you'll see the new chip ventures. to me it shows there is a promising bet on the industry in the united states and what has always been a global industry and will continue to be a global industry. >> ronnie, i got a question for you. if sam altman is successful in raising, don't know if he'll raise $5 trillion on moment one, but let's say he raises even half a trillion dollars, which would be a remarkable amount of money or more, is that something that would concern you? as a policymaker, given you talk about concentration, i know there is lots of folks who try to compete in this space, but, you know, if scale is becoming about capital even more than anything else, what does that mean to the larger sort of state of play here? >> so artificial intelligence high level is based on three things. you need the people, you need the data and the chips. i see the announcement today to be firmly about the chips piece of it. i think this is one why we passed thechips act to put

america on solid footing. we have to see where the chips are going to be designed. i think more competition in the industry at the end of the day and more production of these kinds of chips is going to benefit consumers and benefit people across all industries. i'm watching to see like everyone else but from a policy perspective, this is what the chips act is all about. we're trying to make sure the united states has a stronghold in the industries of the future to make sure inouenovation and s are here. >> where the department of justice and lina khan are worried about power, if you look at somebody who would control compute power of this magnitude that we're talking about, plus control one of the most powerful large language model and probably be able to generate an even larger and more successful large language model on top of the chips, both of those things together, does that change anybody' s equation about how they're thinking about things. the chip guy is over here, the

software guys are separated, there hasn't been enough chips to begin with, if somebody corners the market on the chips and has the model, what does that mean? >> i think you have to look at the details of how vthe venture comes out. the chips are made by tsmc, which is investing in the united states and arizona. i think it will be interesting to see how the configuration comes together. even if openai is successful in this raise, where they create a new chip venture, a lot of firms will be involved in that ecosystem, including a lot of firms in the united states of america. >> ronnie, great to see you this morning. thank you for your perspective and insight on all of it. appreciate it. >> thanks for having me. coming up, expedia taand fanduel amy rowe joins us from sin city with the rundown sports gambling fever that is gripping the nation. "squawk box" is coming right back. time now for today's aflac trivia question.

like father, like son. christian mccaffrey and ed mccaffrey can make super bowl history as the second duo to hoist the lombardi tphy rofor the same team. who was first father-son duo to achieve this goal? the answer when "squawk box" returns. good thing i had aflac. hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent. it really helped close that gap. go, go, go! yay! go aflac! go duck! get help with expenses health insurance doesn't cover at aflac.com wish we had aflac on our team. you can! ( ♪♪ )

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>> announcer: and now the answer to today's aflac trivia question. like father, like son, christian mccaffrey and ed mccaffrey can make super bowl history as the second duo to hoist the lombardi trophy for the same team. who was the first father-son duo to achieve this goal? the answer, steve and z zak deossie. both won the super bowl as members of the new york giants. and welcome back to "squawk box." i'm dominic chu. here are today's morning movers for this get you caught up. shares of expedia, they're down roughly 15% around 60,000 shares of extended hours volume after the online travel booking company behind its namesake platform also other brands like hotels.com, vrbo and orbitz expected better than expected profits and revenues, but bookings came in below forecast

last quarter. expedia said that ceo peter kern, who has been at the helm since 2020, will step down and be replaced by its current head of enterprise, arianne goran. next up, shares of take-two interactive, 7,000 shares of volume. this is the video game publisher behind titles like grand theft auto, red dead redemption, it reported earnings just shy of estimates with some debate about comparability. but revenues measured by bookings in line with estimates. its current quarter bookings forecast fell shy of expectations. we will get more on that story when the ceo joins "money movers" this morning in the 11:00 a.m. eastern time hour to talk about those results. and we'll end on shares of pinterest, down 9%. this is the image driven social media company, reporting better than expected profits on less than expected revenues. growth in monthly active users better than forecast, but its

current quarter revenue forecast was viewed as disappointing. shares by the way were down nearly 30% at one point late yesterday, but paired those losses after pinterest announced a partnership agreement with google related to third party ads, so those shares now down 9%, pairing a lot of losses, joe. back over to you. >> dom, are you comfortable being the favorite? and it is weird because two-point favorite, but 71% of those bets are on kansas city. 65% on the money line bets on kansas city. and sort of evenly split on the over and the under. i would think it would be high scoring, maybe it won't be high scoring. >> i will -- so the interesting part is the line hasn't moved that much between the 2.5 to 1 to 1.5 over the last couple of weeks. i just have bad memories because the last time that we were favored against the staunch afc opponent was on christmas weekend, right, we played against the ravens and we kind of know what happened there.

but i think that there is going to be some symmetry, i'm hoping. if the script writers do it right, they would make lamar jackson the nfl mvp, which he got last night, and somehow brock purdy would become the super bowl mvp after the niners beat the chiefs. i'm thinking if the script writers have it their way, i'm hoping that's the outcome. >> kelce is such an -- and mahomes, so outsized in terms of their possible influence. i think he really has promised her that he's going to win. and i would not discount, you know -- >> want to say her name? i'll say her name. taylor swift. >> would not discount how much he's going to want to win so that he doesn't disappoint her and he definitely doesn't want her to be branded as, like, you know, be blamed if kansas city doesn't win. i don't know. i don't know. i'm not going to tell you who

i'm picking. i wanted to pick the 49ers. but i -- i don't know if i can get better odds on the chiefs. >> i'll tell you what, at two points, it is like a pick them game. i'll make a prediction, i'll say 27-24, niners. that's my prediction. >> mccaffrey is so amazing and deebo and purdy, when push comes to shove. >> two comeback wins in the playoffs, that's good. >> the defense, you watch -- detroit lions looked like the greatest offensive team in the world running in the first half. how crappy is your defense? >> they tightened up when they should have in the second half and i'm hoping that it doesn't go that way this time around. but, you know, they'll rise to the challenge no matter what. jed york built a good team out there. i'm confident, how about that? >> are you? >> i'm cautiously optimistic to

use a cnbc term. >> optimistically cautious. thank you, dom. china facing economic challenges, in its relationship with the u.s. that has been strained. are the two largest economies heading for a decoupling? greg ip will dig into that next. and president biden defending his memory. we'll talk to pollsters from both sides of the aisle about what this could an fmeor his pursuit for a second term. frank luntz on one side? "squawk box" will be right back.

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mexico outpace d china for the first time. our next guest's new piece is focused on the u.s./china trade relationship and if steeper tariff hikes would decouple the world's two largest economies. let's bring in greg ip. great to see you. >> thank you for having me. >> the u.s. deficit, the trade deficit with china fell to its lowest in a decade or so. so haven't we decoupled to a great degree or you're saying not so much, the numbers don't really tell the story? >> they really don't. a couple of things happen. once trump put on the tariffs and biden kept the tariffs, there was a lot of pressure on manufacturers, chinese and western manufacturers to move their supply chains to avoid the tariffs.

so what you saw is a lot of assembly moving to places like vietnam and mexico, and so what you saw as the deficit with china decreased, the deficit with vietnam and mexico went up. and so a lot of the value that has come in we classify those as imports from vietnam and mexico. a lot of that val withue is add china. solar panels we might be getting from another country, a lot of solar cells are made in china. laptops, mackenzie has a report for every dollar increase in imports of u.s. imports of laptops from vietnam, there is a $1 increase in vietnamese imports of laptop parts from china. so, in some sense there is a little bit of like a shell game going on here. the other thing going on, you have talked about in the past, there is this de minimis loophole. the number of such packages from china has just exploded since the tariffs came in.

>> i'm sure everybody knows about the examples of those companies using the exception. in your piece you talk about what president trump is proposing and that is to actually decouple and to use a 60% tariff. does that work? does the u.s. have the appetite for that? fortunately inflation is coming down. but 60% tariff could mean inflationary impact on prices. >> yes, so we saw what happened, a 25% tariff did, you can predict what a 60% tariff would do. a lot of american importers ended up paying the tariff because china is the only supplier. that will be passed through to american customers that will have an inflationary impact. there may be minor substitution. mostly what you'll see is more diversion to other countries, whether southeast asia, north africa, latin america. you'll probably see even more aggressive use of the de minimis exception. now, i don't want to say that

nothing will happen. over time, yes, more and more production will be outsourcing to other countries. in india, apple is steadily building up their supply chain there. even if only a tiny portion of the iphone value comes from india now, that proportion will grow. it is kind of like floodwaters. china is flooding the world with chief exports and it is difficult, those -- like floodwaters, they will find a way in to our market and other markets. it is very hard to keep it up. >> from the china side of things, given where the economy is right now, that is struggling, with the government doing everything they can to sort of prop it up, what would this mean to that side of the equation, because that could then have ripple effects on other places, especially europe. >> right. well, the first thing is beijing is not going to take this sitting down. lying down. they didn't last time, they won't this time. they'll hit the u.s. with higher tariffs. that will extract the cost on the u.s. economy. the other thing they'll do, because they did this in 2018, is they'll depreciate their

currency. so if we hit them with a higher tariff, chinese products will be cheaper as a currency goes down and that neutralizes the tariff to some extent. even if it doesn't keep -- even if it keeps some chinese products out of the united states, it means more chinese products would go into third markets. and you can imagine a scenario where the u.s. ends up being this island where americans pay high prices to keep chinese stuff out, but chinese brands and chinese products become even increasingly dominate everybody else's market. >> greg, a lot of things to think about. thank you so much. fascinating piece. >> thank you for having me. coming up, a canadian company shorted by muddy waters. a response to allegations, accounting manipulation, earlier this week on the show. that's coming up next. and the senate passed around one of a bill, just round one, to fund ukraine and israel. senator michael bennet of colorado will join us at 8:30

eastern time. "squawk box" is coming right back.

welcome back to "squawk box." yesterday, carson block of muddy waters research announced a short position in fairfax

financial holdings alleging accounting manipulation. fairfax, a canadian company, primarily in the property and casualty insurance business. well, fairfax issued a statement, here is part of it. fairfax disagrees with the allegations and insinuations contained in the report, and would like to assure all shareholders that fairfax has prepared its financial statements and reporting in accordance with all applicable accounting principles. that stock fell nearly 11% on the toronto stock exchange. the company is expected to release fourth quarter and full year results next thursday. going to hold a news conference on friday, february 16th. coming up next, president biden responding to a report questioning his mental fillnfit. what this means for his campaign for a second term. "squawk box" coming right back. billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory.

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>> that's president biden responding to questions about his mental fitness following special counsel robert hur's report that portrayed the president as having diminished facilities, faculties, maybe i'm having my own diminished faculties,ed eat an advancing a. joining us is jeff horowitz of hart research, a democratic bolb pollster. let's get your initial reactions, to what the special counsel said itself, and then this sort of impromptu press conference we saw after. >> we have been through this before. i'm old enough to remember ronald reagan and the end of his administration, and he was significantly younger than joe biden at this point and he wasn't asking for re-election at this point. but the special prosecutor said, was to say that no charges should be filed. it was devoid of politics, of

partisanship, he simply made an observation about the president and his capabilities and the irony is that the president, joe biden, proved it in that press conference by how he responded to reporter questions. even if you like the guy, even if you support joe biden, you can see it in everything that he does and, andrew, your focus group last week said the same thing, it is not just about age, it is also about where things will go in the years to follow. so, it is pretty indicting. >> jeff, indicting or not indicting? >> look, the big story from yesterday as frank rightfully pointed out here is that a trump appointed attorney made a determination that president biden shouldn't be charged with the documents. that was his charge. the investigation is over. that's very different from what we're seeing as the attorney mentioned with donald trump's case, which is ongoing and

includes obstruction of justice, which is not something that joe biden was accused of, so that's a fundamental difference and that was really what the attorney was tasked with. the unfortunate reality here is that then the attorney took a political hit on joe biden. the unfortunate part where some of focused. be very mindful why he did that. unfortunate reality is today's republican party for president trump it's not good enough to tell the truth. you have to please donald trump. >> what i can't figure out. walk me through the democrat positioning here. because even if you think it's a hit job. let's just say it is a hit job. at the same time, you know, there are moments where you see the president, where he does seem to be honest with you frailer than you'd want him to be, and it appears that the democrats, and the republicans, by the way, playing chicken with each other. with two candidates that maybe either side aren't particularly

thrilled about, though it appears there is a base on the republican side that does seem to be, you know, a super supporter of trump and that the democrats are unwilling to run anybody else, in large part because the president is the president and here we are. but there is a question mark, and when you see people, democrats, go online, or come on television and say, that they think that this president isn't up to the job. what should other democrats be saying? >> well, look, there are concerns. we've had our nbc poll democrats aren't concerned about joe biden's age. also true even among major concerns about joe biden'sage he's get a proportionate of voters voting for him. unlike those voting trump in criminal cases. far fewer of those voters are going for him. yes, there are concerns.

yes joe biden has to address them. he is going to have to show he's engaged, vigorous in defending his record and making a contrast between the future of america he wants and donald trump wants. all true. and he's going to have to do that. i think, kre, last night was a start and he needs to be better. it's a start to that. >> by the way -- >> hold on. i don't envy your position. i really don't. i know what you've got to do. remember baghdad bob? it doesn't help anyone when you say that -- he's not a medical doctor? i'm not a medical doctor. i don't -- do you think any of us need to be medical doctors to see what's happening with the president? i mean, you're stuck with him. i understand that, but that doesn't mean you need to look into the camera and just say, the bottom line, the only story yesterday is that the special counsel is different than trump and he didn't get to do that. people just roll their eyes.

it doesn't get you anywhere. you've got to -- is it me, or i mean, is that what pollsters do? lipstick and pigs and everything else? >> look, if i may, since you brought this up. look, voters i just mentioned, voters are concerned about joe biden's age and he needs to demonstrate he's up to the job. just ages ronald reagan -- >> it's possible. president three, four, five years from now. in a world -- >> yes. >> -- with vladimir putin and president xi and go ahead frank. >> people make decisions watching this show about future of their money and the future of politics. last night he got the leader of mexico and the leader of egypt wrong. every time he speaks he gets something wrong. we have nothing against him. but it's our job as pollster ss to reflect exactly what's going

on. the questions thismorning are not about donald trump. sorry my democrat partisan colleague instantly turned it into politics. the question is, is joe biden capable of running this country for the next five years? he makes so many mistakes. so many more than ronald reagan did. and i remember the charge against reagan in 1984. just put them up side-by-side, and you see the difference between joe biden and you're asking to give him five more years? there was an excellent nbc poll demonstrating just how many are concerned. >> part of the problem, life is relative. the choice is -- this is it! i think, you could say you don't think he's up for it for the next five years but others look at former president trump and say that that's an existential threat to the democracy and the world. >> still rather have biden. >> by the way, that's why americans are so angry. why americans are so frustrated with the future. why there's a possibility of a

third-party candidate. s public saying i don't want this guy. i'm afraid of this guy. i need something else. >> yeah. look, joe biden is not the first president to mix up names of foreign leaders. not going to be the last. i would say also, talk about -- there is a contrast here, and joe biden also knows the difference between nikki haley and nancy pelosi. there's a difference here and voters are going to be making -- a decision here on the candidates who are on the ballot, and that is a choice between joe biden, where he's taking the country and where donald trump wants to take the country back to. >> it's taken a -- your poll. i read your poll. it is a great poll. >> thank you. >> people are concerned about joe biden and his age and donald trump and his age, it's like this. come on. you're supposed to be -- >> still -- >> and it was proven last night.

am i accurate? >> frank, yes, that is true. more people are concerned about biden's age than trump's age. i would love to finish my thought. it's also true that those who have major concerns about joe biden are still voting for him in a way that those who have major concerns about trump's both age and his trials are not. the other truth in the poll that we conducted is -- that if trump is found guilty, that there's a significant shift to biden. so those things also matter in the poll and all that context matters. >> joe's right. i don't envy your position. you're trying to fall into a democratic position on a show that is non-partisan. the fact is, there's a reason why trump is winning in almost every survey right now, and that difference is three to four points. >> gentlemen -- we got to go. we're going to continue this conversation. have to have goethe of you back.

appreciate it. a lot more context and other things to talk about and we'll try do that hopefully very, very soon. thank you, guys. have a great weekend. coming up,ng ready for kickoff of the trading day plus the big game. plenty of time to get your bets in. fanduel ceo a pregame on this weekend's sports betngti surge. "squawk box" returns in just moments.

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good morning. s&p 500, 5k. index briefs out first time yesterday almost three years after it first crossed 4000. futures now pointing to more gains where it would be above 5000. if it were to close out the friday session there. consumer spending in focus. new results out from pepsico. bring you details. and betty og the big game. sports and media worlds turn attention to las vegas and the super bowl, talking about the explosion of sports gambling with ceo of fanduel. final hour of "squawk box" begins right now.

good morning and welcome to "squawk box" right here on cnbc live at the nasdaq market site in sometimes conveyor along with joe kernen, becky is on vacation, melissa lee is with us. i'm andrew ross sorkin. and s&p 500 opening, call it nine poits. topping 5,000 happening briefly before the close yesterday. fell back and officially ended the day at 4,997 and change. show you treasury yields as well this morning as we try to make sense of what jay powell is up to. ten year note, 179. two year 1486. melissa? >> shares of snack and pepsico giant lowered earnings posting mixed fourth quarter adjustments

revenues a bit light. resevenue fell first time in the years. on guidance side pepsi expects fiscal 2024 earnings per share 815 a penny above expectations raising annual dividend and stock down 1.4% now. other top business stories, the white house announcing allocating $5 billion more in funding from the chip and science act helping set up public private partnership leading to creation of a national semiconductor technology center. awards for big tech still on the way. commerce department saying those should arrive in six to eight weeks. speaking of chips, a headline for you. openai ceo sam altman purchase importan -- purportedly wants to shake up that industry in a big way. global chip building capacity.

cost, price tag, how much to raise? potentially $7 trillion with a t, trillion dollars. a boom for the company, and its appetite for top of the line computing technology. spoken with investors in the i'd arab emirates and others. another chip watching. shares of armed holdings jumping 48% yesterday. came on better than expected earnings and strong profit forecast for the current border since it went public in september arms shares more than doubled in price. >> i mean, we know some of those middle eastern companies, they're oil-rich, but i need $5 trillion to $7 trillion, talking to the uae. we don't pay a -- 5 to 7? do we? >> no. >> nothing close. >> nope. >> i just think it's funny. he wants to raise 5 to 7

trillion? talking to united arab emirates. what would they be good for out of the $5 to $7 trillion? are we talking about a -- 1 gazillion plus 7 trillion? 7,000 billion, if -- >> you know. >> 7,000 billion, andrew? >> supposedly. i mean, you know -- >> you need scientific -- >> your point. >> funny to say well sam's serious about this. talking to the uae. got a lot of oil money, but $5 trillion to $7 trillion, talking a global initiative. it would need a consortium of the richest countries in the world to get anywhere close to that. what's our debt now? $33 trillion? right? $33 trillion, $34 trillion. a quarter of an entire built-up debt. 90 minutes to go before opening bell on wall street.

over to our senior market commentator mike santoli. i've been underestimating the uae i think mike. i had no idea. you know? if you need $5 to $7 t go to the uae. >> my guess not all up front. hey, $6 trillion in money market assets now. maybe cover the majority, if we get agreement on that. we'll see. look, in terms of the s&p 500 talking about big numbers. yeah 5,000 interesting. maybe not technically, fundamentally significant. the number is. up 22% from intraday low late october. it's just a bit over three months ago. it has gotten just a little stretched relative to 200-day average. in july a similar percentage above trend. the thing is, when you get overbought, this is just a statistical reading of it being a little overbought, it means the underlying trend is strong eve n if you cool off.

doesn't mean an absolute top. that cooloff flatten out a little. see if that does happen at some point. looks like open above 5,000 today. look, though, at equal weighted version of the s&p. complaining top-heavy move. narrow leadership. just a trillion dollar plus market cap companies. not really the case. equal weight s&p not as impressive a surge. a one year. unlike the previous times when you've got to these levels upper end of this range and reverse quickly. churning around going sideways doing okay here. it's about a little over flat year-to-date. still up 19% from the low. average stock hanging in there even as you see treasury yields shift higher a little bit over the last few weeks. industrials is another pocket of strength that is somewhat getting obscured by focus on the things like the magnificent seven. again, it's a one year, it's industrials. nothing magnificent in leadership here. shows this is, market able to

embrace a decent economy, a stronger than expected economy with a capex boom alongside it. bullish signs, although at some point you would imagine latter half of february sometimes is choppy. might have a little give back. probably not the big one if we get a pullback. >> mike, you know, barons used to have the super bowl indicator all the time. what happened? got it wrong, just too many times? do we want the 49ers as an nfc team if we're bullish? rooting for them? >> changed so many times. initially, an original nfl franchise. not even just nfc. >> okay. >> most of the time what overlaps. i think the problem is somebody came up with the super bowl indicator when you only had 12 or 14 super bowls. so, therefore, it wasn't exactly the biggest sample size. had a pretty good record, and then it just sort of, you know, larger sample size came in -- >> a way of getting to ask you,

my way what is your prediction and the final score? >> i have no prediction. i like the fact that the spread's tightening up a bit. just means it's a pick 'em. and you know, you can go from there. i know the stats, models seem to prefer san francisco, but maybe not in the second half if it's a close game. >> and if taylor makes it? >> right. how do you even quantify it? >> i don't know. have to talk to that kid that's tracking her jets. leaving in thyme. think one less encore? >> saying, if you bought tickets to that concert. >> her mind elsewhere. >> whole time -- going to make this -- am i going to make the plane? amazing. she's amazing. >> sitting here do you think about your mind pre-occupied. >> all the tile. things listen to -- what he says. >> fast delivery. >> even if your day is empty.

>> that's deliberate. thanks, mike. >> that is insane. >> thanks, mike. get tolt broader economy. joining us on set president at a global strategies company. >> good to be here. >> you actually think the first cut could happen in the april-may meeting. not because of inflation but commercial real estate? >> exactly. i have been talking on the show, melissa, about the credit shock coming. three, four different factors, but now increasingly seems to be coming from the financial sector, the banking sector. and even janet yellen is pressuring secretary for reasons repeatedly claimed that the banking system is sound. has given way to talking about a concern about commercial real estate. yesterday she told the senate banking committee she is really worried about non-bank market lenders. so you had, i think, what i call

a tsunami coming. the timing, you may disagree. say no two months. say four months, but somewhere first half of the year. that's why i picked the may-june meetings for when rates will be cut. >> not necessarily highlighting what's going on with new york community bank? which was a surprise and generally perceived acid yo sin creak and specific to that particular bank? you're saying there's something beyond that? it's not going to be in the public markets? it's these private lenders that are the source of the problem? >> exactly. i do not think in just idiosyncratic and yet janet yellen made a point saying she did not think it was systemic and i've been saying the past year it's systemic, building up and i think reaching crescendo right now. >> is there a trigger that you see? because we've seen or sort of forecasted that there will be

issues with commercial real estate for quite some time but there hasn't been that trigger. i'm wondering, an article in bloomberg this morning, maybe last night, actually saying there could be ripples from china's need to sell some of these assets they hold around the world? >> right. and again, yes. that is quite possible, but i wouldn't venture to guess where it's going to come from, but the china impact could be significant. we saw what happened in china with evergrande and the liquidation. the property sector that is in deep dive, and to the extent that there are sales which are going elsewhere in the world and the commercial real estate problem is also now in europe, it is in japan. that's why i think it is systemic and i don't know where the treasury secretary can say she doesn't think it is systemic. >> saw a couple banks in new york having to mark down their portfolios. surprisingly didn't have much impact here in the united

states. sort of happened and we all here moved on opinion wondering, then, if this is a tsunami, is this insulated within the economy or does this have spillover effect across the economy? >> depends on how they handle it. my guess if they do it earlier rather than later which means cut creates faster and quantitative easing. nerd, don't act like you did in 2008 allowing this to go bankrupt. supposing you can acted in july-august of 2008 and you had taken the essential steps the drop would not have been as severe as it turned out to be. so perhaps they learned a lesson. cut the rates faster. they will switch over to providing liquidity faster. one more experience with september 2019, because of quantitative tightening.

they have a lot of experience. so i'm hopeful they'll act fast, in which case you can limit the fallout and the rest of the economy. >> so cutting path foryou starts earlier than what some others are expecting, i'm wondering if you think the end point -- is the end point the same? what's your forecast end of the year for where rates end up? >> once the rate cuts take place and if it is taking place due to a -- two things happen. the cuts are substantial, and, two, they happen very fast. if that was happening, i would look for six to eight cuts on the basis point cut, if you call it two cuts, one cut equals two -- some of that happening, if the credit even, in fact, does take out to be very significant. >> if that happens and they do it swiftly, does that also shelter the economy from feeling what would have otherwise been a

sharper tickup in, say, unemployment? >> in other words, we had a severe problem in 2008, and i think they keep repeatedly, jay powell and yellen have said this is not 2008. this is a much smaller problem. they can make it a much smaller problem and react faster and in which case increase in unemployment rate would not be as much. there is a cost. you're going to give up your fight against inflation, and that typically is what happens with the fed. they keep fighting and they find that they cannot in some states continue with that, inflation shoots up and they quit. >> by end of year, rates lower. >> lower. >> and inflation will be higher? >> higher. than where it is today, right. sri, good to see you. >> thank you. great to be back. thank you very much for having me. coming up other side of this with the super bowl just two days away the sports betting industry has never been bigger. contessa brewer is live this

morning in las vegas ahead of the game, and inngbrgi a special interview, right after this. - i got the cabin for three days. it's gonna be sweet! what? i'm 12 hours short. - have a fun weekend. - ♪ unnecessary action hero! unnecessary. ♪ - was that necessary? - no. neither is a blown weekend. with paycom, employees do their own payroll so you can fix problems before they become problems. - hmm! get paycom and make the unnecessary, unnecessary. - see you down the line.

welcome back to "squawk." futures now, still got -- a little over an hour to go before markets set to open, but higher. 60 points higher right about now. nasdaq opened 47 points higher. s&p 500 looking to open about 10 points higher. if you're betting, there you go. >> mm. let's talk about -- >> talk about betting. >> contessa, she's in this city a lot, is teams like. got a pretty good gig. two days to go before the super bowl. bettors all over the country scanning available wagers. contessa brewer joins us now with it's special, a special guest. a good beat. >> my second home, las vegas. keep getting them to open a bureau. so far no luck on that. with me today they say 23.1 billion dollars will be bet by

americans on the super bowl in all kinds of ways. that includes casual wagers with friends. how much of that goes to the commercial sports books? with me now, amy howe, ceo of fan fanduel, the nation's market leader. give me a sense how much you're seeing with the super bowl in las vegas with these teams compared to past super bowls? >> listen, coming off phenomenal events of last year. listed on the new york stock exchange last week. exciting. every year new records are set in the super bowl and this year will be no exception. there's so much excitement this year around the player props in particular. lots of activity around travis kelce and mahomes as mvp and christian mccaffrey but there's something for everyone. fanduel this here has 600 pre-live markets. we have a really fun twist on the classic super bowl squares and new markets. fastest ball carrier. literally something for

everybody to bet on this year, and don't forget to go in and place your prediction on whether rob gronkowski will make the kick of destiny, redemption kick, as you know. >> i understand about the super bowl ad that fanduel bought, there had to be adjusted because of the death of carl weathers featured in your ad? >> a really emotional week for the entire team. carl weathers was beloved by the entire entertainment sports industry and we worked with his family and rob is going to do the kick. do it right before the kickoff of the super bowl, and carl weathers' family agreed to have him featured in the ad. a great moment to really honor the life of carl weathers. >> you mentioned all bets coming in for travis kelce and patrick mahomes and christian. i'm wondering how much taylor swift is driving women into

spor sportsbet? engagement of viewership with the nfl. >> no doubt the swift effect is real. since she's been on the scene the number of, the volume of bets on travis kelce has literally doubled. we're heading into the super bowl. he is the most popular for first touchdown of the game. most popular for mvp. what we're seeing is a lot of women coming down to the platform. right? the great thing about the super bowl is we have millions of new recreational users and a lot of those are women. almost 35% of our activations are women, and there's no doubt this effect helped. >> the crazy thing. the american gaming association is predicting that one in four americans will bet on the super bowl. a lot of that is going to legal sports books across the nation. and yet the two super bowl teams are from states where gambling is not legal. not only that, here's the super bowl, in las vegas, a big industry research agency says 13% of the total amount wagered

in the united states comes from nevada, where you can't bet on fanduel? when will you be in nevada? >> we're cautiously optimistic one day we can. wep have a partner fremont casino. listen, a great reminder. we still in five years have come a long way opening up the u.s. market and regulating and appropriating for legal betting. we have a long way to go. hope to be in nevada some day but also florida and texas. a lot of hard work to do but so far five years in, we're protecting consumers and doing exactly what is intended. to also help create revenue back to states. >> florida offers sports gambling, of course, but only through hard rock, which has pretty much monopoly on the whole state nap provides additional competition. speaking of which, there's a lot of elbowing for market share

right now. fanduel in the lead, draftkings has gained some ground, but you've got newcomers. espn bets relaunched from penn entertainment. how much does market share matter in this race towards total addressable market? >> listen, we're coming off a key four. we were the first operator in the u.s. to be profitable first year. for the full year. listen, that's a huge inflection point for the company. demonstrating we can build a profitable model. in the end we know scale matters. we focus on profit share but it's a combination of both of those things and we're going to stay focused on what we know works. >> the two weeks, almost two weeks, since flutter has launched on the new york stock exchange, have you seen a difference in the kinds of questions people want to talk to you about? i mean, is two weeks enough to see, oh, it does make a difference, for fanduel? >> there's been unbelievable

recessitivity from investors. flutter is the largest gaming company in the world and u.s. investors in particular have opportunity to get access to the largest andmost profitable u.s. company, but also getting access to global leading brands, right, growing, cash creative. a great opportunity for investors to buy in and for us, elevates or profile giving us an opportunity to make sure that we can get access to the best capital markets in the world. so we can keep innovating and giving consumers a great proposition. >> we know nfl put special rules on the players for the super bowl team. no gambling at all. no slots. blackjack. nothing until after the game is over on sunday. i know integrity has been a really strong mission of yours. you have teenage sons, but the

kshon booty case in louisiana brought new questions and concerns about integrity for the sport. give me a case where fanduel stands going into super bowl now about making sure the game and the betting are all above board? >> it's a really important topic, and, you know, as one of the three official sportsbook partners for the nfl we work closely with them to shape and enforce policies. these are a great example of the regulated marketplace working exactly as it was intended. right? we're working with law enforcement, state regulators and the nfl to make sure that we see any problematic behavior we can identify and correct it. what we're doing is not easy. bringing illicit market in to the light. there's going to be growing pains, but make no mistake. in the end the transparency and enforcement is absolutely going to protect the integrity of the game. >> i appreciate you getting up very early in las vegas and by the way, it is so cold. >> a little chilly. >> even though in the desert,

it's desert cold. shivering going on here, melissa. >> no need to make up an excuse to wear leather, contessa. thank you! coming up, senate moving forward on a nearly $100 billion international aid package. in just a few minutes we head to washington to speak with colorado senator michael bennet. unof ukraine's biggest backers in congress. first as we head to break check out shares of, key cr crypto cryptocurrencies, coinbase, and microstrategy. an 8% gain after regular session. bitcoin topped $47,000. stay tuned. you're watching "squawk box" on cnbc. rms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights.

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shares of pinterest sharply lower. earnings 53 cents a share beat estimates. revenue fell short. rose to $498 million beating

estimates but average revenue per user $2. 5 cents below estimates. current quarter forecast weaker than expected. stock initially sank as much as 28% in after-hours trading but rebounded after ceo announcing third-party app integration with google during the analyst call stock down 8.4%. coming up, takeaways from high-profile senate hearing on cost of drugs in america. former fta commissioner dr. scott gottlieb is back here to join us with thoughts on all of it. next, we speak with colorado democratic senator michael bennet on the big ukraine 5aid bill passed his chamber. reminder, heading to break, get the best of "squawk," uasqwk pod, listen anytime. we're coming right back. secon . when you realize you can give your people everything, and more. thank you very much.

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welcome back to "squawk box" on cnbc. futures higher this morning. an hour to go right now dow up 162 points. nasdaq up 105. s&p 500 up 25 points. senate advancing a $95 billion aid package for ukraine, israel and taiwan. the vote to begin debate was 67

in favor, 32 against. final passage isn't guaranteed especially if the senate leaves washington for its next recess without approving the measure. also not clear which way the house would vote or if border negotiations would again become mixed up in all this. joining us now, colorado democratic senator michael bennet. one of ukraine's key supporters in congress. is there still the oppor opportunity -- it's very arcane. a lot of ways things work, senator. are there opportunities for amendments for this to include border provisions at this stage? >> arcane is a polite word for a total mess but there is opportunity for amendments. we have to negotiate those out at this stage, and that's what's going on during the course of the day. this is always a little bit of a fight between people that want to go home, people that want to get amendments.

my view, we can't leave until we fulfilled our responsibilities to ukraine, to nato and to democracies all over the world, and i think we're off to a very good start finally with a big bipartisan procedural vote. as you said, that's not a guarantee of sucticess. we should stay evehere over the weekend until wet get it done. >> do you get the impress ukraine is barely holding on? i've read articles that the stockpile of usable ammunition and the like, that it's really dangerously low? how bad is it right now? >> they're out of bullets. that's the way to think about it. they're rationing ammunition. two years ago when putin invaded them, nobody thought they would succeed the way they have and they have astonished the world. they've taken back half of the territory that putin took from

them. they've won battle after battle after battle. they have pushed putin's navy out of the, basically out of the black sea without even having a navy of their own, which has been critical for grain shipments from ukraine to the rest of the world. this really is a nation full of to a draw at this point. if we don't supply these weapons they're going to lose this war, and that's going to entangle us, i think, into putin's ambition for eastern europe and xi's imbastion for taiwan. we should be supporting the ukrainians because they've been courageous in the face of tyranny and they're fighting not just for ukraine but for democracy. >> senator, were you able to watch the tucker carlson interview of vladimir putin and did that inform your opinion in

anyway about -- what were you -- i don't know if you've seen it or not, but it's -- i know we had a president that looked into a soul once and i don't know, totally misread what was there, but, did you get -- what were your thoughts after seeing that? >> i haven't. i have not watched that interview. i think i'm more informed by the years and years that i've spent on the intelligence committee looking at the intelligence, both ourself, europeans asian's intelligence about putin than watching a tucker carlson interview. putin's invasion of ukraine is the first time since the new world order, since the postworld war order was established after world war ii. we can't let it stand. the ukrainian people have shown that there are still people in this world that will fight, fight, give their lives for democracy, and i think at this

point putin knows he's having real trouble on the battlefield. his army has, in many ways, collapsed under the pressure of ukraine. the battlefield he's counting on winning on is the battlefield of division in our political system. the battlefield on capitol hill, and we just cannot allow that to happen. i am amazed and really deeply pleased that after months and months and months of people drawing lines in the sand here we got 67 votes to move this bill forward. that's more than two-thirds of the senate. i hope we can hang in there with a vote that's that big. not just for ukraine but for israel, for taiwan as well. for the humanitarian aid for gaza. and then we can send a very strong bipartisan message to the house that this country is not going to cut and run on democracy. we're not going to cut and run on the obligations that we have to nato and to the rest of the free world, and that the united

states even if we have some political dysfunction can over come that in the interests of our kids and our grandkids. >> there are -- you know, we had iran -- i'm sorry. afghanistan and iraq and this taste in certain american's mouths about what exactly we want to be in the world right now, but it's very -- it's almost a catch 22 in what we're seeing. so you know, we don't want to spend a bunch of money or other countries if we don't secure our own border. once that's included we don't want to do anything because we want to let president trump deal with that. the almost a catch 22. i don't know what the path forward is, senator? >> well, there is a path forward, and first of all let me just say months of working on this, you're the first person to raise afghanistan and iraq in this context. i think it is so important, because it is on the minds of the american people.

we sort of somehow skipped over that step. the reality is, we spent, we've spent 20 years fighting two wars in the middle east that -- that didn't make any sense to the american people. look at that and they say, man, that doesn't feel like a great use of the resources of this country, and i think the evidence is very clear that they're right about that conclusion. that's why we better be sure about what we're doing in this case. you know what we have with the ukrainian people that are not asking us to supply soldiers. not asking the american people to lose our lives. they are asking us to supply them with weapons. they are asking us to supply them with intelligence, and, by the way, we're doing it for less than, you know, 0.4% of our gdp. a very small part of our defense budget, and if we had set out to try to weaken putin's army in

the way that ukraine has done or re-establish our position vis-a-vis xi jinping, i would argue we could not have done it more cheaply than ukraine has done it and ukraine has the receipts, because they've won battle after battle after battle, as i've said. so i do think the question that you pose is an excellent one, and we should be asking it every time we're in a situation like this. i also believe, i happen to believe, that we have to address the border in this country. the american people don't want chaos on our southern border. i think it turned out to be too complicated for us to do it at the same time we were trying to pass this bill, but we've got to get to that. the american people want, as i said, they don't want chaos at the border and also, equally as important, they want a functioning immigration system, because they know a third of the

economic growth of this country over the last century has come from immigration. and it's a huge advantage that we have, that beijing doesn't have. there is nobody crawling on their hands and knees across the gobi desert to get to beijing. people still want to come to this country because we have the rule of law, because we have civil liberties, and we have to preserve that. we have to enhance that, and it's not only about securing the border. it's making sure we're driving economic growth in this country. >> right. and we got the only democracy in the middle east that needs it, too. it all kind of makes sense. senator, thank you. and i don't know. you may never go home, if you're going to wait to the do something before you go on recess. i don't know. good luck. anyway, settle in for at least the super bowl this weekend, because you're not going anywhere. >> we should settle in for at least the super bowl and whatever it takes after that.

thanks for having me. >> all right. thank you. you're welcome. we want to check out futures. saw a leg higher after cpi revisions released. widely anticipated release reflecting seasonal adjustments and came in unrevised for december 0.3%. sigh of relee. concern revisions would be higher throw a wrench into the disinflation story that has been unfolding here. we have the s&p 500 up by 16 right now. gains as much as 22. right now firmly above that 5,000 mark at the open. coming up, u.s. senate digging into the high and frequently unaffordable cost of drugs in america. after a break, talk potential mmsidies with former fda coisoner dr. scott gottlieb. stay tuned. be right back. help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley.

welcome back to "squawk box." drug bricing in focus on capitol hill plus senators criticizing ceos's johnson & johnson,

bristol myers squibb during a hearing. high cost's prescription drugs in america means many can't afford medications they need. our next guest says there are easy reforms congress can enact if they get beyond price controls. former fda commissioner and cnbc commissioner serving on boards of pfizer and illuminea. talking it your book or against your book, scott, how would you do it? >> well, look. clearly the high price pressure on consumers. no question about that. we need to recognize also in the marketplace that many consumer are underinsured for drugs. we've seen the last decade advent of closed drug form formularies. single-source branding drugs are uncovered. providing nocoveraged by the

drug insureser. started with the affordable care act and steeped into commercial insurance plans. a large reason why consumers increasingly feel the bite from drug costs. last year actually 2023 first year prices came down in modern times. drug price inflation has moderated. trying to lower prices -- >> don't you think -- scott, don't you think there's an argument to be made actually because prices are high and the customer's feeling it, prices have come down because when you have insurance, oftentimes this become as runaway in terms of pricing the actual drugs. no? >> well, look. there is rebating in the marketplace. so the companies do disk counts to try to get on to for mu l formularies. cost um premiums not necessarily

flowing back to consumers out of pocket for the drug costs. a lot of things in the marketplace consumers are disadvantaged. uncovered for a large cost of drugs, in part because of higher prices exclusions on formularies distracting discounts and avoid high-priced drugs. when the drug companies do discounts rather benefiting consumers, they're picking up drug at a pharmacy counter paid in a form of rebates health plans use to try to buy down cost of premiums across the entire plan. the patients who need the drugs and who need high-cost drugs really are disadvantaged in this scheme. there are things to get back to pointed out at the top. things to do to make the market much more competitive. you can allow biosimilars a true generic market, focus on places hard to get generics into the market. barriers to the entry and those exist. introduce competitive inside the

medicare part b plan so it's not a price taker on injectable drugs but free formularies and compete like in the part d plan. ways to make the market more competitive, try to push down the price of drugs, and increase competition to branded and increase competition. i think we also, finally, need to look at second to market innovation. with a lot of these branded categories now, once a drug comes on to the market, many times, these markets are too small to sustain second to market innovation so other drug companies will pull out of these categories because of the high cost of getting that second to market drug on to the market. we need to make that process more efficient so we instigate competition within some of these small drug categories. >> we often talk about competition being part of the problem, but we often talk about the elasticity and the sort of agents that are sort of taking a piece of everything and also the sort of lack of transparency

around pricing that allows this sort of remarkable elasticity. what do you think is the underlying problem? >> the fully loaded cost of getting a single patient into a clinical trial for a complex drug like a cell therapy could literally be a million dollars. that's an actual figure. the cost of drug development has gone up exorbitantly at the same time drug makers are forced to provide discounts, and at the same time that their patent windows very narrowed. the i.r.a. does that. it's effectively a loss of exclusivity on drugs, so what drug makers have to do to recoup the high cost of development and pay for the risk they're taking is spread out the revenue that they're kwoingoing to achieve o smaller number of patients and those end up being commercially insured patients. thinking that forced and man mandated discounts and price controls in one aspect of the market don't affect pricing elsewhere, we can't think that

way anymore. it is having that effect. so, there's a lot of distortions in this market that are pushing up these high prices. the final point i'll make. the drug makers aren't just facing headwinds in the u.s. they're facing headwinds in europe right now. there's new legislation that would reduce patent windows from 10 to 8 years and force lawmakers to launch in every eu country, even those they get very bad pricing, and europe's increasingly an unattractive market for u.s. drug makers, so there are a lot of revenue pressures on the drug makers now. they need to get the drugs on to the market and ramp sales much more quickly because their patent windows winare going to expire sooner, and that means investing more money, taking fewer shots on goal. that's going to be a problem in the future. >> scott, always want to thank you for your insights on all of this. it's fascinating stuff, and hopefully we'll get prices down one of these days, but i'm not as hopeful. enjoy the game on sunday.

coming up, we'll talk markets and get you ready for the opening bell on wall seetrt, now just over half an hour away. stay tuned. er together. like your workplace benefits and retirement savings. presentation looks great. thanks. voya provides tools that help you make the right investment and benefit choices. so you can reach today's financial goals. that one. and look forward to a more confident future. that is one dynamic duo. voya, well planned, well invested, well protected. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. life is for living. let's partner for all of it. i'm so glad we did this. edward jones

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investors getting ready for the last trading day of the week

after the s&p did reach 5,000 for the first time. looks like it's going to be there this morning on the open. joining us now, dcla portfolio manager and a cnbc contributor. you don't think the market is necessarily severely overvalued or undervalued, kind of like -- sort of meh right where it is? >> yeah, and i think, joe, you definitely have the pockets of overvaluation, and then you've got the other areas, small caps and some of the value stocks that haven't come back, but i definitely think there are opportunities in the market. you just have to be fairly diversified at this point, and credit is not bad either. spreads are really tight, so they're indicating to the market that they don't really see anything that's going to make this market too shaky. we have commercial real estate, but that seems to be pretty fairly discounted at this point. >> so, what are the pockets of where you're seeing some value remaining, undervalued?

>> i would go to commodities, basic materials. look at companies like copper, steel, aluminum, and it's not a question of inflation. it's just a question of supply and demand. so, a freeport or tech resources or cleveland-cliffs. and i would look at the staples area. look at the beer companies or just some of the food companies that have pricing that actually are trading at below market multiples, and then i look at utilities, and utilities have just been hurt because rates are where they are, but the earnings growth, especially companies like aes or edison, are 8% to 10%, trading at 12 times earnings. so, you can put capital to work. it's just the market has favored growth so much that i think it's okay to be in other areas and not to say you don't have to be in growth. you can be. but look at the other areas as well. >> why do you think the market shrugged off the -- sort of the pivot on the other pivot that we saw from the fed, that rate cuts could be fewer and they could be

later in the year than before? you're looking at that chart right there. if someone told you that, you certainly can't see it from what we're looking at in the s&p. >> yeah. i think the market basically said, hey, listen, if the fed is not going to cut rates now, it means that they're seeing a couple things, which is that growth is still good, so if growth is still good the longer we go -- we know most recessions are caused when the fed acts too early or too aggressively, so if earnings can be strong, that's really good. and they're watching inflation, and i think that's going to be important. we saw the number today getting better for december, and i think you have that, and it's kind of that classic fed put now, because if they see something, and it's -- they do it in time, i think that's going to help the market. but if they went too early, then most investors would say, wait, there's something that we're really missing. so, you're kind of in that sweet spot. i think that's where valuations really matter at this point. and chasing kind of the leg that

we have the last 18 months, i think most of that party is over, so now you really have to say, how are we going to make money down the road? and i think earnings growth, cash flow is really important. >> you think that there's anything that can happen between now and november that would really scare the markets? i don't know why the market's not scared already. as americans, we're kind of scared at what's happening. does the market ever sit up and take notice or really doesn't matter what washington does? >> i think at this point, you know, something out of left field would have to come, and you already look at what's going on geopolitically and with what's going on in d.c., so it would have to be something really out of left field. oil's at $70. input price is coming down. but you could. i mean, look, in 2022, market dropped and then came back last year. so, i think staying in the market but understanding where you're invested, joe, is going to be one of the most important things for the next probably 6 to 12 months. >> all right.

sarat, you going to have -- what are you going to have on super bowl sunday? drinks, chips, chicken wings? what do you think? what are you plans? >> i don't know. i think it will be an interesting day just to see how many people will be watching, and i think probably one of the most watched super bowls out there. >> i think it's going to be good too. thanks, sarat. enjoy. join us next week. >> enjoy sunday. >> happy chinese new year. >> it's lunar new year. >> how many people are not going to work on monday? >> bad productivity. >> "squawk on the street" is next. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at post nine of the new york stock exchange. futures, pretty solid here. s&p looks to reclaim 5,000 after yesterday's pop. those cpi revisions, relatively painless, two-year yield drops to 4.43%. russell futures up a percent. our road map begins with a