live. and n is projecting democrats' tom suozzi's back in the house. he's won the house seat that was vacated by expelled congressman george santos. it's wednesday, february 14th, 2024, and "squawk box" begins right now. ♪ good morning, everybody, and welcome to "squawk box" right here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin, and here we go. it's a wednesday. hump day. we're looking at the u.s. equity futures, and they're indicated slightly higher. you're looking at the dow futures up by triple digits, up 100 points. nasdaq up by almost 115. but this bounceback comes back

after a pretty massive selloff on wall street yesterday following the hotter than expected january inflation data. the dow and s&p were down. the dow had its worst day since march of last year. the nasdaq was down by 1.8%. it was, again, the dow's worst day since march of last year. russell 2000, the small stock, got hit even harder. it was their worst day since june of 2022. you're going back a long time over this. treasury yields were not spared from any of this either. they were yielded sharply as treasury prices got hit. the 2 yee this morning is yielding 4.6%, just above that. the 10-year is above 2.85%, and all of the numbers picked up drastically. it moved when we got the hotter than expected ci number. here's jeffrey gundlach yesterday with his reaction to the market move. >> i think the market has

tremendously overpriced the amount of cut this year. it was down to certainly six. it seems the fed sense they were going to move in march, per the words of the chairman, that means you're getting started in may. then there's this thing called the election. i don't know. they probably aren't primarily focused on that, but to have six rate cuts between may and the end of the year always seemed like a lot to me. >> a lot to him and a lot to a lot of other people too. >> we knew that last week. we knew exactly what he said. we knew. we talked about it every day. we were talking every day we were down three and much later. it with us that inflation number that did it. >> i don't know if they can cut in may. if you get another hotter than expected number in february, liesman was saying with seasonal adjustments we might see higher numbers in january and february. when you get that, it's harder

to say, okay, we're ready to start cutting. >> otherwise why would we have asked at least ten times why is the market not selling off because rate cuts are later and much fewer, and every person said earnings are so strong. so you don't need the rate cut for the multiples expand if the earnings part goes up, you don't need it. i still think we had this notion of the economy and gdp, and inflation seemed like it was headed in the right direction until that rug was pulled out. at 2%. from new highs. >> you're talking the dow and s&p. >> the 10-year really. >> highest yields in two months. >> we haven't seen it move in like 20 basis points. >> right. it looks like something. it feels like something. the question is does it

continue? >> probably broke through at a resistance level where 5% could be back. then all of a sudden, we just plunge from 5% on the 10-year. >> there's looking at two months if we look at a longer term. >> it came down quickly. i guess it could go up just as quickly. we never want to say anything. gundlach did make an interesting point about it. november's coming. winter's coming. >> that part we always knew. meantime shares of lyft soaring by more than 60%. this happened after hours in trading but it was only for like a hot minute. it pulled back after the cfo clarified that the earnings release put out by the company contains an error. the issue, one of lyft's profit margins was expected to grow by 500 basis point. it was only to expand by 50 basis points.

that inflation market caused a frenzy in trading. it was before people could digest the numbers. despite the error, lyft shares more than 15% of the premarket, earnings at 18 cents per share beat estimates be i a dime and the forecast came in high therapy expected, lyft saying it expects to generate positive free cash flow for a full year for the first time. we're going to talk to the company's ceo david risher at 8:30 this morning, first on cnbc. >> 7:40. >> 7:40, sorry. >> you would think most metric in an earnings report if you overstate it by a factor of ten, that's an exponential mistake, you would say -- people would know immediately that that's wrong. >> people would, emphasis on people, but not bots. >> if you're at 1.6 for gross margins and you're going up to 2.1, that's good. that's better. it's in the ride direction, but

it's not out of the question if you did something right. some other company could go from 1.6 to 6.6, right? >> this is why i was feeling bad about it. i think the key is -- i think it was al go rhythmic training that was doing it versus ai. >> everybody was hallucinating. this is the ai problem. >> right. that's what i think. >> that's all it is. that's all it is. >> it's better than expected by ten times. >> you not being a machine yet, you're still here, but you -- >> i wouldn't have pressed any buttons because it would have taken me a lot of time to try to figure it out. >> i would have said, wow, uber, this is a really thin margin business and it's tough. there's a lot of problems with trying to expand margins in the ridesharing business, but 6% is not a rich margin number. 30%, or 40%.

>> if you understand what the business is -- >> if you understand what the business is, there's no way the business is going up 500. >> robinhood reported earnings after 3 cents a share. tissue users rose to 10.9 million users in the quarter versus a falling number. vlad tenev will be on cnbc later today. >> that makes me wonder, how many metrics are included in these machines that are looking at every little thing that's in an earnings report. they would see cost of goods sold if that's a good number. >> there probably are 8 to 10 metric on any company you would want to know. >> this is the margin forecast. this is the ebitda gross margin. new overnight in tokyo, hence why it's news, sony cut its sales forecast for its

playstation 5 console. the lower guidance comes after sony recorded record revenue in the quarter and announced a partial spin-off of its financial services business via a public listing. it expects a listing will take place in october of 2025. are vizio tv sets any good? i guess they're all the same. it's not bad. >> walmart, they've got their own maker now. does that make sense? >> these are low margin products. >> they are. >> talk about low margin. >> they're in talks to possibly buy vizio for $2 million. they're not done yet. >> electronics is a big sales issue for walmart. >> you can buy all these things online, but, you know, the demise of best buy is greatly exaggerated. i need someone to tell me how to

turn the thing on. there's the power button, tv button, there's a lot of things that goes into today's smart tv. >> i can't do it myself either. >> you can't. he's pretending like he can. >> i can. i can. >> because your kids do it for your you? >> no. because i can set it up -- >> like my kid, you could do it for me, i think. >> i am technically supportive to my family. >> you could be, age-wise. no other way could you be, but age-wise it's possible. if i fell in love very young. >> well, yeah. >> it's physically possible. >> when i was like in my early 20s. >> sure. >> i would have raised you differently. airbnb shares revenue beat estimates and adjusted earnings

beat estimates. guidance came in above estimates. airbnb announced a buy back of $6 billion in its stock. in a letter to shareholders it said now is the time to expand beyond our core business and reinvent airbnb. this will be a gradual multi-year journey. the stock swung to a loss later. airbnb talked a little bit about how things are slowing down, getting back to our more normal rate of growth, no more revenge travel that we've seen. that's very similar to what we heard yesterday from peter who told us yesterday on this show you're not seeing the outsized gains and growth they'd seen up to this point. coming up, shares of akamai is slowing. ceo tom leighton will join us.

i was going to do a hang ten. i don't think you can do that. >> after all the stupid stuff on the bowl coverage. >> i'm not doing to do it. akamai is clesher in hawaiian. >> that's very clever. >> you know what they found? he got stabbed to death because it looked like he was trying to stop people from going into the tower. i have no idea why i do it now, 'lbeig bi . wel rhtack. ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

knock, knock. number one broker here for the number one hit maker. -thanks for swinging by, carl. -no problem. so what are all those for? uh, this lets me adjust the base, add more guitar, maybe some drums. -wow. so many choices. -yeah. like schwab. i can get full service wealth management, advice, invest on my own, and trade on thinkorswim. you know carl is the only front man you need. (phone rings) oh, i gotta take this, carl. it's schwab. schwab. (feedback rings) have a choice in how you invest with schwab. - i got the cabin for three days. it's gonna be sweet! have a choice in how you invest 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.

fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

profits of akamai down. first quarter guidance came in slower over it demand for cloud security services. joining us is tom leighton, akamai technologies ceo and co-founder. tom, it's always good to see you. you're involved in a little bit of a transformation. this isn't the same akamai we used to talk to you about five years ago, for example. more cloud, more security instead of what the content delivery business that you're so well known for. still a very important business. it's actually security that drives most of our revenue. strong growth there.

as we look forward, growth computing is a very large factor for us. last year we did half a billion dollars and forecast very strong growth for the future and just announced our new distributed program call. by the elkd of 2024 we're planning to have support in virtual machines in around 100 cities around the world. nothing else does close to that. >> as a layman, we're trying to figure it out. generalized edge computing. you explain it used to bring content right to users. now you're going to be able to bring computing directly to users as far as calling it on the edge. do i got that right? >> that's exactly right. if you move the application logic close to the user, it can be a lot faster, a lot more

scaleable, and also we can do it much less expensively than in a big corps data sensor. it's a great win for our customers. >> i'm trying to figure out how -- what does it entail rolling it out? you start in what? you start in 25 areas and then you get to 100 by the end of the year? what does it entail? >> the thing with akamai, because of our delivery and security, we're already in over 4,000 points of presence. that's for delivery and security. we're adding compute for machines and containers so the entire application can be run close to the end users, not just securing it there in the first line of defense, not just delivering it, but actually doing the computing there. so it's adding that capability into our existing platform. and you're right. today we're in 25 cities. by the end of the year for

compute, we'll be at 100 of the 750 cities. >> okay. so right now your revenue is 60%. it's moved away from content delivery. it's 60% cloud and security. what will this gecko be adding to it? is that adding -- classified under cloud computing now? >> classified under cloud computing, and that's our strongest growth area. you know, we're forecasting 20% growth in that category this year, and i think as you look to akamai in the future, say, five years from now, maybe it's not security that's the largest product line, but it's compute. tremendous growth potential there. >> i see in the world akamai, i see ai in there at least once. does that factor into your plans? it's in everybody's plans. what does it mean for you? >> yeah, of course. we've been using ai for a long time in our skurpt products.

it's how we decide if it's a human or a bot out there or if a human is accessing a bank account and has the right credentials, it's how we decide is it the right human or an imposter trying to steal the funds. so we've been using ai for a long time. and now with gen ai, it's helping attackers. we're seeing a lot more penetrations and it's increasing the need for our market solution, which identifies when the enterprise has been penetrated and proactively blocks the spread of the malware so it doesn't cause damage. the other big difference is it's increasing the need for computer cycles obviously, and we already have customers using ai engines on our compute platform to personalize content on the website, you know, a lkd to make better security solutions because now you can do that at scale in real time at the edge.

>> it has nothing to do with your results or anything. it got the hair on the back of my neck stood up. you're co-founder. what a genius and what a person. 37 years old, classified as a first person to die in the september 11th attacks. he was in the first one and stabbed. he must have been a genius. i was figuring out how old he would be. he would be just now 60 years old, i would think. >> danny, an incredible human being every way you look at it. you're right. a genius mathematician. a lot of people didn't know this, a captain in the elite units of the idf and a specialist in counterterrorism. and so when american flight 11 was being hijacked, he stood up and tried to defend the stewardesses and cockpit before he was killed before it crashed

into the world trade center, an incredible hero as well and a great loss for all of us on september 11th. >> so the highest award akamai gives out is named after him, the danny lewin award. >> that's right. we have a little over 10,000 employees around the world and every year we recognize just a very few of them, you know, three, four, five employees for embodying danny's spirit, and their ability to move mountains on behalf of our customers to do -- you know, to do the impossible, really. and that's named for danny. no cash is provided. it's just the honor of being named after danny as a titan award winner. >> i don't know why we never talked about it before. we should remember that guy as you do and now we do as well. good having you on this morning. thanks. thanks, tom. >> thank you. coming up, we're going to uc

ta about a new push for unionization at didnyland. we'll bring you that story next. later we'll talk about yesterday's rkmaet selloff with hoe mamd el erian, all that and more as "squawk box" rolls on. the award-winning trading platforms. 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. trade brilliantly with schwab.

that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy.

nature's bounty hair growth. clinically shown to help grow thicker, fuller hair with just one capsule a day of advanced hair complex. conquer hair thinning... ...and fall in love with your hair all over again. only from nature's bounty.

welcome back to squawk. costume performer at disney california park looking to unionize. the performers want better safety conditionsing also saying they want to change the way the scheduling policies work. most of the 35,000 workers at disneyland have unions. but character actors and support staff do not. they say they represent thee at

trick cal performers at disney's florida theme parks. we'll see how that goes. meantime neknnelson peltz o today's money movers. when we come back on "squawk box," we're going to talk about the selloff. much more with mohamed el erian. right now as we head to a break, let's take a look at s&p 500's winners and losers. >> announcer: executive edge sponsored by at&t business. next-level moments need the next-level network. - 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. encore energy, america's clean energy company, now in production in south texas. energizing america with reliable and affordable uranium for nuclear energy fuel from our environmentally friendly extraction process. encore energy.

you're watching "squawk box." nasdaq up about 103 points. the s&p 500 up.

check out bin coin. $51,404. yesterday's hotter than expected inflation data casting some doubt on the market's expectations for fed rate cuts. i want to bring in mohamed el erian president of queens college at cambridge university. mohammed, how much tougher is it going to be for the fed to cut rates at this point? >> i think it's going to be as tough as we indicated earlier. we're not going to get more than three cuts this year and we're probably not going to start this cutting cycle until june. the market had gotten carried away, and yesterday a relatively small miss in numbers that are very sensitive to seasonal adjustment creating this outside -- outsized reaction. and the market had gotten carried away. we've got much more critical thinking. soft landing, many cuts.

this was a wakeup call to people who got carried away. >> we did see markets kind of quake at least in the instant reaction to it. yields moved pretty significantly higher. you saw equities sell off. but you're still talking about the s&p 500 and the dow down by less than 2% from their all-time highs. as joe was pointing out earlier, that may be a reflection of how strong earnings have been relative to expectations too. so is there a way for the market to continue to climb even if the fed does not cut rates? >> yes, there is a way, and it has to do with the strong economy. it has to do with earnings. and it has to do with the extent to which the u.s. is exceptional relative to other parts of the world. this is more an issue for the fixed income market than it is for the equity market. and the fixed income market has to realize three things, becky. one one, the inflation is really

hard. we're not going to get it as quickly as we need to to get to 2% as fast as the fed wants to get to. two is that there are genuine and identical question about what is the neutral interest rates. what's the right inflation target. how fast should you getthere? these are serious analytical questions. the third element is different parts of the economy differ in how sensitive they are to interest rates and the market has to realize those three things. and i think they got it. they got the message yesterday, but they overreacted because they hasn't thought about it enough beforehand. >> this is a scary way that recessions come about, isn't it, mohamed? i'm not saying there's any similarity to the volcker era. to finally get it under control -- and it's not similar, i know that -- you had to cause a recession. it's almost like the rates didn't go up enough.

this is a stronger economy, as you say, relative to the rest of the world, but they may need to do more work in terms of slowing that. they may have to basically cause a slowdown to get inflation -- and that's -- any recession would never happen if it wasn't actually caused by the central bankers trying to cool inflation. >> i mean, that's the risk clearly. but to be fair, and i've been very critical of the fed, they started late, they mad some forecasting mistakes, but to be fair to them, they've done what they need to do. the marketplace embraced last november and december, a totally unrealistic path for fed cuts. >> they let the market believe that with their stupid dot plots, right? >> the dot plots -- >> the dot plots told us three cuts. the market for some reason embraced six to seven, but when

they failed -- and i agree with you -- was on communication. the communication has flip-flopped. it's been poor. but they -- this is not a fed issue. this is a marketplace that got carried away and is now adjusting. and the risk is, as you point out, that they make -- the marketplace adjustment may pull the rug from underneath what is an exceptionally strong economy and one we should be proud of. >> the thing i was trying to figure out is there were a lot of sectors and a lot of people that were counting on these rate cuts to refinance, whether that be in commercial real estate, whether that be in other projects that are totally sensitive to interest rate issues and things that need to be refinanced or you're going to lose. those are the people who were really praying and counting on these fed cuts coming sooner. if it doesn't come till june, is that the sort of thing that causes a recession when all of a sudden you have a lot of bad

loans that can't get redone to some extent, oer is that just going to be a situation where some people are losers and others step in and get good deals as a result? >> i think it's going to be the latter. i think we have a stock problem. undoubtedly we have a stock problem. we have a whole host of activities that were funded at artificially low interest rates and they're unrealistic at their valuation that the eveners think they should get. that's going to be the adjustment. you see it in commercial real estate. that's an example. that's the stock issue. the good news is there's lots of money on the sideline waiting to engage and lower valuations. so we can manage through this as long as it is not too disorderly. i don't think itself this is high recession risk. when you get to an uncomfortable recession risk is when you combine the stock problem with

the fact that the household buffers, the excess savings that had developed were drawn down last year, and on top of that, a global economy that is slowing down significantly. that is where the recession risk comes in. but i think it's less than 50%. >> if you hear of things like we've heard the last couple of days, airbnb and expedia saying they're slowing down, not into the revenge travel hike they used to be, growth rates are getting back to normal levels. will it be enough to continue to propel the market? >> it should be. i mean we were at remarkable growth levels. third quarter, almost 5%. fourth quarter, 3.3%. we went out there compared to the rest of the world. we've got throw. undoubtedly we've got to slow. i don't think we fall into recession unless we get some sort of disorderly financial adjustment or the fed makes

another policy mistake. there was inherent strength in this economy, and that inherent strength has carried us through some pretty geopolitical circumstances. >> what would your idea of a fed policy in the state be at this point. >> so for example if they remained too tight. that is now the policy mistake. they're so scared because they were late, their policy was strong, they end up staying too tight for too long. >> what's too long if you think a fed cut is not coming before jup? >> no, june is fine, but, for example, in having this conversation in september and they haven't cut yet, then i think that would cause it. i've been with you consistently for at least six months saying we're not going to get the

weight cuts the market priced in and we're not going to get it as early as march. june and three cuts is much more realistic. >> i don't think they're going to do it because they're afraid. i think they would do it because the data doesn't justify cutting earlier. let's say we get another hot cpi number in february. steve liesman was saying yesterday that's not unexpected to get a january and february number like that, how soon could they cut rates? how soon could they if you only have a couple more months of data behd data before june? is it three months? is it four? >> to be clear, i think the last is complicated. having said that. the major problem, you summed it up perfectly, becky, we have the fed that's excessively

data-dependent. remember, this is backward-looking data, and they're using an instrument that operates with a lag. so if they're excessively data-dependent, then they're going to end up making a mistake, and the mistake they'll make is exactly what you said. they're not going to look forward into what's ahead. they're going to be too influenced with what's behind, and then they're going to end up creating an unnecessary shortfall in growth. that is the thing that scares me. you heard me say over and over again, data dependence is fine. excessive dependence is not. you've got to have a vision of how this economy is functioning, and you've got to have the ability to reflect that vision in your decisions. previous feds did this. this fed has not. this fed has been excessively d data-dependent. >> i guess that's good as long as they have a good gut that they're following. if they're not following the

data and their gut's wrong, that's where you can get into some real trouble too. mohamed, thank you for talking this through with us. >> thank you, becky. coming up, democrats are flipping the house seat vacated by expelled congressman george santos, apparently heading back into that astronaut training program at nasa. >> santos? >> santos. that story next. is it too late? >> it's too late. >> too late. >> no, no. i think it's not too soon. so i think you're okay. >> not too soon, but not too late? have too many people said it? not nice. >> god forbid you tell the truth. a reminder, get the best of "squawk box." follow on your favorite podcast app and listen any time. we'll be right back. an office. hi! hello!

a cinema. so automated. yes, the definition of a car changes... but one thing stays the same. it's a mercedes-benz. after last month's massive solar flare added a 25th hour to the day, businesses are wondering "what should we do with it?" bacon and eggs 25/7. you're darn right. solar stocks are up 20% with the additional hour in the day. [ clocks ticking ] i'm ruined. with the extra hour i'm thinking companywide power nap. let's put it to a vote. [ all snoring ] this is going to wreak havoc on overtime approvals. anything can change the world of work. from hr to payroll, adp designs forward-thinking solutions to take on the next anything. ♪ you were always so dedicated... ♪ we worked hard to build up the shop, save for college and our retirement. but we got there, thanks to our advisor and vanguard.

now i see who all that hard work was for... it was always for you. seeing you carry on our legacy— i'm so proud. at vanguard, you're more than just an investor, you're an owner. setting up the future for the ones you love. that's the value of ownership. the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com to build the electric vehicle of the future, you need partners. mining partners. technology partners. education. supply chain. energy. what if one partner could do it all? that partner is ontario, canada.

with all the critical minerals to make electric vehicle batteries. 65,000 stem graduates per year. one of north america's largest i.t. clusters. a fully integrated supply chain. all powered by one of the cleanest grids in north america. ontario. your innovation partner. ( ♪♪ )

nbc news projecting that democrat tom suozzi has won the new york special election, replacing expelled former congressman george santos. the election result flips a red seat to blue, further narrowing the slimmajority of the house of representatives. it means in a full house republicans can now allow only two defectors to break ranks and still pass legislation along party lines. a lot of people can't tell what this means because of the storm. >> hit me with yours first. go ahead. >> the storm stopped by noon, so a lot of democrats don't get out of bed until after noon typically, and theyer were ready to go vote. what did you say to me? >> i said if we're going to play genera generalizations, republicans tend to be older and don't want to go out in the snow where they

might slip and fall. what you're dealing with is a known quantity. suozzi is a known quantity in the district. they got burned by george santos. the idea that they were going to go with another up known candidate, not great, suozzi, by the way, biden did not come in and endorse him or come in and campaign for him, and suozzi actually took some steps to distance himself from biden. he called him old. he was very strong on immigration, which is a big problem in new york city. >> the question is -- i mean, 2022 was a democrat, big surprise. >> surprise to who? >> it was. even a red trickle. everybody. there was supposed to be a red wave. and it wasn't a red trickle. >> in purple districts you're going to have those trying to distance themselves from the person at the top of the ticket. you know me, i'm a known quantity. >> she was nine points ahead on the immigration issue but still

beneath him in the polling. >> the other issue is democrats. it's early voting before and the days leading into it. >> democrats fall in their own driveways. same. >> probably none of these generalizations are a good idea. >> no, they're not. i think it was a very unique situation with someone who burned this district. suozzi's a known quantity, and he is moderate. >> they call him sanctuary city suozzi. >> now he's pretty tough saying he thinks any immigrants who have broken laws, he thinks should be deported. speaking of close votes, house republicans voted to impeach homeland security secretary mayor kas yesterday, just the second time. the vote passing 214, 2013.

two republicans voted with the democrats. they say he intentionally violated immigration laws and blocked the homeland skurt didn't. the senate will take up the issue and decide whether to send the trial to a special committee, hear evidence, or dismiss the impeachment articles. >> we know they're not going to do that. nothing's going to happen. that is the same three guys, same three people last time. mike gallagher who's now not running. >> not running. >> and kevin -- >> they had two democrats who did not show up for your the vote and two republicans. >> he could have come back. it was weird. one of the republicans, the last time it happened, changed his vote to a no so it could be -- because with a tie, you couldn't bring it up again. they said they would bripgs it up again, they did, and they passed it. it's the first time they passed it in over a hundred years. nothing happened from it. >> we're constantly now using impeachment in this sort of way that just is --

>> i think this is the first time it's been used by the republicans, isn't it? the democrats used it a couple of times. is that who you're blaming, really? >> coming up, the ceo to break down a record super bowl ratings. that's next. we're going to be back right ar this. 57% of black owners were denied loans. that's compared to 37% . celebrating black heritage, i'm sharon epperson. ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content curated to fit your unique goals,

you can spend less time searching and more time learning. trade brilliantly with schwab.

icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

welcome back to "squawk box." sunday's overtime thriller between the kansas city chiefs and the san francisco 49ers breaking super bowl records. viewership records averaging 123.4 million viewers according to nielsen, making it the most watched television broadcast since the apollo 11 moon landing in 1969. joining us in an exclusive interview is nielsen ceo. so this broke all the records, but we're all trying to understand if this is a one off what this says about television, what this says about advertising rates, cable, is there any big takeaway for you? >> yeah, i mean, content is king. if you have great programming. >> but is it just that the nfl is king? it could be. given when you look at what is it -- of the most 100 popular

things on tv, it is, like the top 93 are nfl games. >> yeah. so obviously sports is a big component of live viewing. but you got to get everything right to get numbers like this. you got to have a great game, great programming, great halftime show, the longest ever hug and kiss ever watched on the planet, you got to have everything come together. look, sports is obviously a big battleground for live viewing. but there is other events that have also performed very well. the grammys did very well this year. but it is all -- >> the grammys did well this year, but the last couple of years we have seen the oscars, for example, and the emmys not do as well. >> yeah, it comes down a lot to actual, like, it is the all tried and tested method, great programming, great promotion, makes a big difference to drive viewership and that gets to be proven out immediately. but you also see the largest ever streamed event was on peacock again, an nfl game, so

viewer behavior is shifting. >> and what is your sense of whether peacock is going to be able to hold on to those customers. because clearly by the way, amazon is going to try to do the same thing next year. >> they are, yeah. >> how many of those customers do you think come and stay and how many are there for the game and that's it? >> look this is an important and moving target a little bit. if you take the last two years, a lot of things have changed. we take streaming as a marketplace, the product has changed. quite dramatically. the pricing has changed, quite dramatically. the promotion has changed. you used to be as direct to consumer version, now you can get it with a cable bundle. consumer behavior is trending, but it hasn't -- it takes a while for the trends to -- >> streaming and what we thought -- remember where disney traded because disney plus was going to take over. has the potential changed? did you read this today, sorkin? the new sports app will not last long. i'm talking about the espn,

disney, discovery says but the gamut will pay off if it helps old hollywood stem some of the streaming losses. >> i think, look -- >> success is measured differently. >> yes. >> in a couple of years -- >> is streaming going to take over the world still? >> the big question is it a profitable business? that's what it all comes down to. >> it is not. >> that all changed in a matter of 18 months, right? you think about it, it used to be about sub growth and it suddenly pivoted in a very short period of time. i think -- >> as interest rates went up and money got more expensive. >> right. and ultimately profitability -- >> if 93 out of the top 100 were nfl games and they don't have cbs or sunday night football, how does that work? >> we have to -- >> i hear the antennas are good. >> you have to renegotiate the contracts, the sports rights will get more and more expensive. you got 2027. >> i don't know if they get more

expensive. everybody is grouped together, they're not bidding against each other anymore. >> i would worry there is more money coming from amazons and apples of the world. >> one thing that is fascinating, you see in the super bowl, in the nba all-star game this weekend, people are starting to spend even more and more and more on the actual production of the games. whether that's going to start to eat into everything. >> such a big deal, might as well just spend -- >> i think it is really going back to the basics is where i began at. it is really important that great production will ultimately drive -- content is king, that's the truth. it may be more sports today but you got to get great viewership by having -- >> how do you know how many people watched. i watched at a party with 26 people and we had six tvs turned on at the same time. >> the approach we use captures for people visiting your home, for instance and looking at the actual panel itself, you got to

log in folks that enter your home and there is a limit to how many. as a guest to someone's house if someone visited you, they would log in. we register who they are, call it visitor viewing. these events are viewed by a lot of people. and then the other is what actually happens out of home, which we measure -- radios measure through a device called a wearable, which captures signals from -- >> how much you to pay people to put all that info in? >> they're doing this because they get incentive, but -- >> i just do it for the power. >> a certain demo isn't going to say, yeah, bring in that stupid box. >> they're doing a really important thing for america. that's part of the whole reason why they do it, the big component. they're shaping the face of media and culture and the country. >> never measured cnbc effectively. so you're not -- >> we're still working on it. we're still working on it. i was talking about it, more coming out later this year.

>> thank you for coming in this morning. appreciate it. fascinating stuff. >> work hard. >> by the way, i know we have to go, halftime show, how did it do? >> really go.od this is one of the better halftime shows over the years too. it was awesome. overall. >> second time you've done it. wapner owes you. >> i know. coming right back.

your record label is taking off. but so is your sound engineer. you need to hire. i need indeed.

indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com. ♪ i wanna hold you forever ♪ hey little bear bear. ♪ ♪ ♪ i'm gonna love you forever ♪ ♪ ♪ c'mon, bear. ♪ ♪ ♪ you don't...you don't have to worry... ♪ ♪ be by your side... i'll be there... ♪ ♪ with my arms wrapped around... ♪ at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite,

backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today. good morning, everybody. futures trying to rebound after yesterday's broad sell-off. did that hotter than expected inflation data create the worst case scenario for the futures and interest rates? we'll get into that question straight ahead. delta airlines handing out $1.4 billion in profit sharing checks to its employees. the ceo ed bastion will join us with an update on that and on how he's seeing travel demand. and shares of lyft go on a wild ride after a typo. but it was still a strong quarter for the ride sharing company. we will talk to the ceo first on cnbc. the second hour of "squawk box" begins right now.

good morning, welcome back to "squawk box" right here on cnbc. live at the nasdaq market site in times square. i'm andrew ross sorkin with becky quick and joe kernen. futures to show you right now. 100 points higher on the dow if we opened up. still got 2 1/2 hours to go. nasdaq up 123 points. the s&p 500 up about 25 points after a big sell-off. treasuries, real quick, ten-year note standing just at about 4.289%. the two-year, 4.610%. a news alert on uber, the ride sharing giant, $7 billion buyback program, issuing a business update over the next three years saying it now expects gross bookings growth in the mid to high teens, adjusted ebitda growth in the high 30 to

40% range and free cash flow to reach at least 90% of adjusted ebitda annually, that comes as uber having its investor day and that stock, which has been on a tear this year, up again this morning now, looks like on the move already, 4%. >> the market's response to the inflation miss sparking fears of a worst case scenario that the fed will have to keep rates higher for longer. joining us now with more, senior economics reporter steve liesman. is it a 0% chance there is another hike some day, steve, that's just how long we stay where we are? >> so far. let me double-check that, joe. but i was just looking that up. and there was 0% chance, they had not gotten there yet. >> i meant you, in your -- in your big brain, the big brain on steve, and in your brain is there a 0% chance that we're not done hiking?

>> well, let's just be clear, it only looks big because it is not covered by anything. if i put a hat on -- >> the pulp fiction, the big brain on bread, when he gets the mcdonald's question right. i said steve instead. >> i wouldn't -- i wouldn't rule it out, but i think we're a long way from there, joe. >> less than 10%? >> that's really the story. yeah, less than 5% i would say right now. >> less than 5%, okay. >> the fed sees itself as being very restrictive and having a lot of still tightening in train. and that's part of the story this morning, joe, because the question is how much is coming and whether or not the fed would need to stay higher for longer here. but what we have is two opposing scenarios that are part of this whole debate about what was the story with yesterday's hotter than expected inflation report. and the one held by the most -- most of the folks i'm reading, hey, it was a blip and the inflation is going to resume its downward trend. here is the blip scenario.

one time january price increases, things like motor vehicle insurance, which, by the way, becky pointed out yesterday, housing pushed inflation, but eventually is going to decline. you've seen all that stuff about how even the rent calculation in the cpi was lower. and then the pce, the fed's preferred indicator, somewhat cooler in part because it has a lower waiting for housing inside the pc. there is a more worrisome scenario we need to talk about here, the easiest disinflation might be done already. a lot of that came from the supply chain shortages and the last mile from 3 to 2 will be tougher and it could require a harder landing or more economic weakness. get the last bit of inflation out of the system. markets reacted yesterday on later and fewer cuts. that's a spike up, it rose 30 basis points. the market looks for 93 basis points of cuts, still looking for cuts, not the 175 basis

points it did about a month ago. june is now first month where the market is priced for a cut. the folks at bank of america say they will be four more cpi prints, becky was asking about this in the 6:00 hour, four more cpi prints before the june decision, which leaves plenty of time to re-establish the disinflation narrative if as we expect a blip. the report supports fed chair jay powell's decision to be patient before going crazy and starting the process of cutting rates. the trouble is that it introduces risk to the coveted soft landing scenario, where the disinflation we had so far is not enough to get back to the 2% target, joe. i think you were expressing that shortly after the number came out yesterday. >> steve, if short rates stay where they are, for a while, the fed not doing anything, the only way to get out of this, the home way to steepen the curve is for long rates to go back up unless

we stay inverted, which is a signal that we have got more slowing in the economy to look forward to. where do you -- to not be inverted, we have to be back above 5%, well above. go back up there and we easily could. we made strides yesterday. how many basis points? you don't see that on the ten-year very often, do you? >> no. it was quite a day. but, joe, remember the fed sees itself as restrictive. we'll do the quick math on the fed here, which is that they have this long run neutral rate they think is 2.5%, they're at 538. you can do that math and come up with a real rate of 3 and change or take off the inflation rate right now which is, call it 3, i guess, and stay there at 2% real, which is above their real rate of, say, 0.5%. so, however you calculate the fed sees itself as restrictive. i believe the fed's reaction to

higher for longer inflation is going to be a higher for longer rate at the current rate. i also think they're going to look through this, but i also think that powell is not going to be upset that the market reacted this way, and the fed didn't have to say anything. so, the idea that the reaction function between the market and the fed is reasonably well aligned here and is a better place than it was, for example, after the december meeting, i think powell might welcome that. and then let the market adjust again if inflation, for example, in the ppi on friday or the pce on february 29th come in, in a better place. >> all right. if it is restrictive, we haven't seen it in the economic numbers yet. across the board anyway. we may have seen it in certain pockets. >> right. >> if they are restrictive, where is it? remember when we got that number, that jobs number, you got to be kidding me. it was, like, three times what

it was supposed to be. that's restrictive? >> joe, i know we want to get to the great roger ferguson is coming up with lots of wisdom, i will point out the current quarter growth is running in the 3% range. so we never got the slowdown in gdp in the fourth quarter. you're right we didn't get it in the jobs. >> we're not restrictive. >> that's the question we asked. that's the question we asked. whether or not it needs to go down from here and are you, joe, are you on the side of anything that needs to go up from here, the territory you're staking out? >> i am scared that we would never have a recession if we didn't bring one on ourselves. we're our own enemy. i'm worried that's the way they happen, where we don't -- >> is that what's needed? is that what's needed from a policy -- >> i thought we didn't need a -- i thought that didn't work anymore, that inflation could come down and economic growth could stay strong. i was hoping that we didn't need it -- >> you're proving my points, sir, which is that worse case

scenario now has to be part of the investment thesis. >> i remember what happened before. there is no similarity to 21.5% prime rates, but i remember when we had to go that high to get things under control. and then the guy is now a hero. let's bring in former fed vice chair roger ferguson, served as president and ceo of tiaa, now a vice chairman of the business council and cnbc contributor. roger, thanks for joining us. is your expectation for a recession gone up at all in the last couple of days from this, roger, from stubbornly high inflation? >> well, joe, you may recall that when all this started, i mentioned there was a risk of recession for just this reason, that the last little bit of getting inflation out of the way is going to be morecomplex than perhaps we first thought. the fed may well have to hold rates high, staying in restrictive territory longer and that by definition increases the risk of recession.

so, yes, my assessment is that the risk of recession has gone up moderately, not over 50%, so i wouldn't say most likely outcome, but with every time we see a bad print, i don't know if there will be more, that means, you know, the fed has got to stay in tighter territory and therefore risking a recession. >> yeah, you didn't like that number yesterday. that was -- maybe it is a seasonal thing. maybe people raise prices at the beginning of the year, but there is just no -- that was not a great number for someone like you who worries about the economy being stronger than we thought. >> i think that's a fair statement. i know analysis says it may have been a blip. i hope that's the case. but what we have seen is that, you know, goods, disinflation, it certainly is well advanced. unfortunately in the service sector, that's not the case. and, you know, we see from yesterday that most of the surprise was in the service sector, the service sector without housing, which is

so-called the super core. so that does plan to, you know, a concern that inflation dynamics are not going to be as easy on the service side as they were on the goods side. and so the immaculate disinflation we had may not be the story going forward. not yet saying making that call definitively, but you're right, i look at that less that is a blip and more as a validation that the last bit of disinflation is going to be hard to come by. >> yeah. who knows, the labor numbers, the unemployment -- the numbers that we have been getting on friday were so out of -- against the conventional wisdom of where we were in the economy that -- and just historically, roger, we're trying to normalize rates. we went up a lot and we went up fast. but on a historical basis, would you call this a high level of interest rates? >> you know on historical basis

this is not a high level of interest rate. having said all of that -- >> if you go back far enough, early 20th century and stuff, but given what we saw from the '60s to -- or the '70s to the current period, i think a 6, 7, 8% is not crazy for the long rates. >> well, i think that's absolutely correct. we have been through unusual period of very, very low rates. we're now normalizing. the other issue that certainly is very uncertain is this so-called neutral rate. so, the fed thinks it is probably in restrictive territory, but there is a debate that says, you know, the data thus far suggests maybe it is not as restrictive as they think. which explains why it is that we're seeing surprises, positive surprises in the labor market, positive surprises in gdp growth. we like all of those things obviously. but it may suggest to the fed that they may have to stay

higher than others have expected for a longer period. that's not the worst, if that's what it calls for. but it does increase that risk of assessment you and i were talking about. >> right. roger, so i asked steve, so, you would be absolutely shocked if there was another rate hike in the next year. you would be -- 0%chance or it is not 0, it might be 1%? >> the chance of another rate hike is not zero. i would be very surprised. i think the more likely move is down, but later than the market had expected. perhaps fewer cuts. that is now what i'm imagining as my baseline. but that does not exclude at all the possibility that the data will continue to be pretty hot and the fed may feel obliged to do one more tightening. seems unlikely. but i think you heard it at the last press conference, you know, chair powell musing at the

possibility that there might not be the kind of landing we hoped for. he put that as a risk out there. it would be in his mind as well to say, you know, rate hike not definitively off the table. less likely, but not impossible. >> roger ferguson, thanks. we'll see you soon, i have a feeling. good to have you on this morning. >> thank you, joe. take care. >> when we come back, delta airlines handing out $1.4 billion in profit sharing checks to its employees. the ceo ed bastian will join us with more on that. and an update on travel demand. and check out lyft shares this morning, the ride sharing company reported better than expected reports in guidance. you see that huge jump there in the stock when it was up by more than 60% for a brief moment. that was because of a typo. we'll talk more about that too. stock still, tug uhoh,p this morning. the ceo david risher will join us at 7:40 a.m. eastern time.

"squawk box" will be right back. 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. visit indeed.com/hire and get started today. to build the electric vehicle of the future, you need partners. mining partners. technology partners. education.

supply chain. energy. what if one partner could do it all? that partner is ontario, canada. with all the critical minerals to make electric vehicle batteries. 65,000 stem graduates per year. one of north america's largest i.t. clusters. a fully integrated supply chain. all powered by one of the cleanest grids in north america. ontario. your innovation partner. ( ♪♪ )

you can make money the hard way as a bullfighter ontario. your innovation partner. or a human cannonball... or save money the easy way, with xfinity mobile. existing customers can get a free line of our most popular unlimited plan for a year! not only will you save hundreds but you'll also be joining millions who have connected to america's most reliable 5g network. sure is a lot safer than becoming a stuntman for money. get a free line of unlimited intro for a year when you buy one unlimited line. plus, get the new samsung galaxy s24 on us.

welcome back to "squawk box." we want to get straight over to phil lebeau. he joins us with a special guest this morning. phil, good morning. >> good morning, becky. let's bring in ed bastian, the ceo of delta airlines, joining us from the company's headquarters in atlanta. good morning, ed. it is a sweet valentine's day for your employees as you announce profit sharing of 1.4 billion. that works out to 10% of each employee's annual salary, approximately? >> good morning, phil. great to be with you. and, yes, it is a great day to be a delta. we're celebrating our employees' hard work with their success and rewards with a $1.4 billion profit sharing payout. it is about five weeks of pay, a little over 10%. and i could not find a more deserving group of people.

all the work, not just this past year, but getting through the pandemic, it is really a wonderful day and a wonderful day to travel on delta. everyone is really happy today. >> is this one of those milestones, ed, where you can say, we have been making progress since the pandemic, knocking down goal post after goal post in terms of things that we want to do to accomplish, say, we're all the way back, do you feel like this is one more example of saying, second highest ever, best since the pandemic in terms of profit sharing, and we're almost all the way back from where we were in the depths of the pandemic? >> yeah, we're -- it is a great milestone for us. we're going to be hopefully surpassing this yet again on next year's valentine's day. but it is a really important marker for us because profit sharing is something that delta created within our industry. we have been doing it for close to 20 years. we have paid over $11 billion of profit sharing during that time. we think about all the challenges that the industry has faced during that 15-year,

20-year cycle. and it signals to our employees they're doing a wonderful job, that we appreciate, we love them, and we also thank our customers because our customers make it all possible for us. >> speaking of your customers, what is your outlook on travel right now, what you're seeing? >> travel is doing really well. we just finished the last five weeks or the slowest point of our travel calendar. and we saw the demand was solid through that period of time. tomorrow starts the long presidents' day weekend travel period and we see travel at this point in our business going right through labor day. it is a strong line, the bookings are solid, and every geography we look at we see really great interest in continuing to experience the premium travel that delta offers. >> and last time we got together in atlanta, you talked about the steady progression of corporate travel bookings. is that continuing or are you noticing as we have seen some of

the layoffs in different companies around the country and in different markets, are you noticing any pullback at all in terms of corporate travel? >> at the start of the year we took another step up and it stayed strong. it is up probably about 10% from fourth quarter to the first quarter of this new year. we're pretty much back to the overall volume that we had, prepandemic, of traditional corporate demand and i don't see any slowdown at all. i see companies continuing to return to office. a couple of sectors that were the biggest laggard such as tech, the consultancy, some financial service providers are getting back. people know they need to be out with their customers, out developing their business models and the best way to do it is in person. >> i have to ask you about your competitors who are going to be called to testify on capitol hill about their co-branded credit card agreements. i understand you're not part of the hearing that is going to be on capitol hill. i know your relationship with

amex is different than the relationship your competitors have with the credit cards that they offer. but are you concerned that washington will look at the success of co-branded credit cards that the airlines have had and may want to try to get a little bit more hands on in terms of regulation? >> the success that credit card programs have had in our loyalty program with amex is a direct reflection that consumers really want the rewards, points, the miles, that delta provides together with american express. and anytime you are providing great opportunity, great value to consumers, i don't see anything that should stand in the way. >> one last question, ed, i know you ordered the max 10s. and they're scheduled for delivery, at least when you ordered them, in 2025, has yet to be certified and as you know, there is -- their production at boeing is capped right now when it comes to the max. do you still expect to start

receiving those in '25 or more realistic that's going to have to be pushed out a bit? >> realistically it will be pushed out. i don't know quite when we will receive that plane. we don't have any of the max flying in our platform currently. we'll wait to make certain we understand everything that we need to know, that the regulators and others are inspecting on that program, but, no, realistically i'm sure it is going to be well beyond '25. >> very quick question for you, ed. we heard from the ceos of expedia and from airbnb in the last couple of days and both of them have suggested that travel is slowing down, getting back to more normal levels, the revenge travel isn't really out there. have you seen that in your bookings? >> we haven't seen that in the bookings, becky. what we see in our bookings is that premium travel demand is really high and continues to grow. it is hard to make a statement.

we had the last five weeks, the slowest period traditionally in our calendar for travel. i'm not sure i would use that period of time to make such an estimate. but, no, everything we have seen, particularly internationally, particularly business, corporate demand, all the premium experiences that we offered consumers is flying off the shelf. >> ed bastian, ceo of delta airlines joining us today from the company's headquarters. ed, happy valentine's day to you and your employees. becky, certainly a very happy one for delta employees who are getting those profit sharing checks. 1.4 b$1.4 billion is what they' rewarding. >> thank you, phil. appreciate it. coming up in a moment, stocks to watch at the open and here's today's trivia question. according to hallmark, how many valentine's day cards are exchanged on february 14th? have you bought yours already? well, we're going to have the answer, not to the second part, but the first part, right after

this, when "squawk box" returns. 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! ( ♪♪ ) you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. it's time. yes, the time has come for a fresh approach to dog food.

everyday, more dog people are deciding it's time to quit the kibble and feed their dogs fresh food from the farmer's dog. made by vets and delivered right to your door precisely portioned for your dog's needs. it's an idea whose time has come. ♪♪ the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

welcome back to "squawk box" this morning now to today's trivia question. according to hallmark, how many valentine's day cards are exchanged on february 14th? the answer, 145 million cards, making valentine's day the second biggest holiday for exchanging cards, after christmas. >> how many did you buy? >> three. >> i bought five.

>> um -- >> how many did you buy? >> one. one and -- >> you're a distance guy. >> we went together. >> you went in on it together. >> that works. >> to frank holland, let's see how many cards he bought. >> what about roses? >> i didn't buy any. >> i have some coming. but now i'm assuming my valentine watches, which she doesn't, she'll know. >> i try to do her age. >> wow. >> that's expensive. >> 30 something. >> 29. >> 29. >> frank holland, a look at this morning's stocks to watch. how many cards did you buy, sir? >> you know what, i'm just going to stick to the stocks, guys? i'm not buying roses, not doing anything by age. but i'm looking at stocks this morning. it is popping this morning on an expected q4 profit, stronger than expected revenue and lower costs helping to boost profits in eps as wealthier and more

seasoned traders moved to the platform. the brokerage highlighting strong momentum including the most monthly deposits since back in the pandemic, 2021. shares up almost 14% now. airbnb, shares are lower despite reporting better than expected earnings and guidance, revenue rising by 17% as the company hits what they call an inflection point for expansion beyond the core business. airbnb also youniannouncing app to buy back $6 billion of its classic common stock. shares falling over 5%. looking at shares of upstart holdings now. you see right here. they are deep in the red this morning. the platform posting better than expected quarterly results but first quarter outlook was much weaker than expected. the stock has more than doubled in the past year thanks to the excitement around a.i., but you can see here, the downward trend. today's move will put it deeper into negative territory for 2024, already down more than 30% year to date. upstart shares down more than 14% right now.

joe, back over to you. >> all right, frank, thanks. coming up, n jseewery congressman josh gottheimer, expanding the s.a.l.t. deductions. "squawk box" is coming right back. >> announ >> announcer: stocks to watch sponsored by cla. we'll get you there. as the head of hr, i help lead a successful home security firm. our teams work hard to secure our customers' most valuable assets. and while they do that, i work hard to secure ours... ...our people. that's why we chose principal to provide the benefits and retirement plan that show our people just how much we appreciate them.

benefits help us keep top talent. —hey mom. benefits help us grow. because we know how important security is to all. ♪♪ because we know how important - if i told you something extends your life span, improves your sleep, makes you more empathetic, and reduces stress and cognitive decline, you would think it was a miracle drug. but i'm talking about reading. reading every day does all those things and more, which is why i started my book club, read with jenna. so start a reading streak,

even if it's just a few minutes every day, on the way to work, your lunch break, before you go to bed. every little bit helps. the more you know. welcome back, everybody. legislation to double the state and local tax deduction cap, which is also known as sa.a.l.t,

is expected to get a procedural vote later today in the house. the next guest has been spearheading that battle to raise the cap to $20,000 for joint filers making under $500,000 a year. and joining us right now is democratic congressman representing new jersey josh gottheimer, who also co-chairs the s.a.l.t. caucus and the problem solvers caucus too. congressman, thank you very much for being with us this morning. from what i've heard, this -- >> happy valentine's day. >> thank you. happy valentine's day. from what i heard this vote is not expected to pass because there are congress people both on the republican side and the democratic side that oppose it. >> well, look, we're working around the clock right now to make sure the procedural motions get done, that we get to a vote on the actual bill. you're battling red staters, the moocher states who initially gutted the deduction in 2017 and

capped it, this would double it for married couples. a down payment to the ultimate goal which is in 22 months to get the full deduction back when the 2017 tax hike bill expires and we can get the full s.a.l.t. deduction back and brit bring t cuts to the people who need it. >> the tax foundation, nonpartisan organization, says this proposed increase in the cap is not great. they say it would increase the budget deficit, and point out it is regressive. your response to that? >> well, we know that the reason we had s.a.l.t. deduction in the first place is to avoid double taxation, getting taxed twice on the same income. i, of course, always mention that to them. i'm totally against double taxation and more importantly this helps middle class families and supports states like mine that pay far more into the federal kitty than others. we know the other states, moocher states, pay far less in and they have, of course, lower

property taxes, but they don't do as much for the people they represent. in new jersey, we have great schools and roads and bridges and take care of people. and the bottom line is i believe formiddle class families they deserve a tax break, they deserve to avoid double taxation and, of course, delivering this deduction will do that. >> the red states' argument or as you like to call them the moocher states has always been that, look, you all have the ability to lower your tax base, that you're doing it to provide benefits as you entioned, schools, bridges and other things, but just because new jersey is providing those things shouldn't mean that you get a payback from the federal government when it comes to it. >> no, my answer to my friends over there is to say, listen, if you are louisiana and you get half your state budget from the federal government, you're mississippi and get $4.38 back for every dollar you pay into the federal government, why don't you agree to not take more than a dollar for what you pay in, and in new jersey, we get 67

cents back for every dollar we pay in. so if we even everything out, that's one argument, but they don't want that. they want to keep taking from jersey taxpayers and take it to them. my argument is, fine, take no more than one to one and, you know, we'll have conversations. but until then, the least we can do is avoid double taxation, get some relief back given how much we pay to support their incomes in mississippi and alabama, and oklahoma, and other places like that. >> well, when you talk about double taxation, there are a lot of people here in the tristate area who are looking at the new york city congestion plan, which will charge $15 for people coming into midtown, in new york city. after they already paid $15 to $20 to come across one of the bridges, if you're coming from outside. looks like that -- >> i haven't been shy about that. it is more than $15. also in new york they want to charge a congestion tax of 15

plus 25% more for days they consider surge pricing and they want to be able to raise the rates 10% in the first year in this year. they're trying to move ahead. we have many lawsuits to try to stop them, bringing up the realities of more pollution, which the mta admits this will cause more pollution. it will cause more congestion and hurts hard working families, nurses, electricians, people who have to drive into the city every day. it is outrageous. in the end, if they do go ahead, it means for new jersey, more people will be encouraged to stay in new jersey, take new york's jobs, bring them to jersey, because people aren't going to be able to afford to do the commute. >> that's been new york's response, take it or leave it, go away if you don't want it. >> yeah, the new york business keep complainingabout it, some of the biggest detractors of it because they want people from jersey and other places to be able to afford to come into new york and shop there and bring their families in and support their economy. so, they're the ones who are actually complaining the most and saying, please don't do this. at a time we're trying to get

people back to new york, for their economy, they're jacking taxes up on people in an unaffordable way. you have a lot of people standing up to the mta, which is the mass transit system in new york, one of worst run mass transit systems in the country. they blew a billion dollars recently on a subway station they built that was too big. it is such a mess, they need our money to fix their problems, they should take care of their own problems instead of blaming everybody else for their woeful mismanagement. i know you've got problems, fix your own problems, instead of looking to other people to solve them for you. >> josh, back to the s.a.l.t., odds that you think it will get passed? and if it doesn't, what happens if it is set to expire but there will probably be some movement to bring some kind of tax plan around? >> we would hope the republican leadership wouldn't bring their own bill to the floor if they didn't think it could pass, right? so but then again, things are in

a bit -- a little difficult on their side these days in getting things done. so you would hope they wouldn't do that. if it doesn't work out and we can't double from 10,000 to $20,000, which is one grain of salt, i want the whole salt shaker back in 22 months, the bill expires, the full deduction comes back unless new legislation is passed given how difficult it would be to pass the legislation, i'm very optimistic we'll get the full deduction back. many of us have been fighting for this for years, we passed it four times out of the house, keeps running into the red state senators who refuse to pass it, but in 22 months, the full deduction will come back, i'm very optimistic about that, and we'll finally get some tax cuts for families that deserve it, not just in new jersey, the tristate area and around the country. >> congressman gottheimer, thank you for your time today. >> thanks, becky. good to see you. coming up, shares of lyft higher this morning after reporting strong results and guidance. a big turn in the stock on what

turned out to be a typo, an extra zero in the margin. we'll get to that and more with ceo david risher next. check out the move in bitcoin now, above 51,000 and it has been just over a month since the s.e.c., what would you call it, begrudgingly approved a move. we'll talk to gary gensler, see whether he's loaded up on any crypto. "squawk box" coming right back.

were you worried the wedding would be too much? nahhhh... (inner monologue) another destination wedding?? why can't they use my backyard!! with empower, we get all of our financial questions answered. so we don't have to worry. empower. what's next.

we really don't want people to think of feeding food like ours is spoiling their dogs. good, real food is simple. it looks like food, it smells like food, it's what dogs are supposed to be eating. no living being should ever eat processed food for every single meal of their life. it's amazing to me how many people write in about their dogs changing for the better. the farmer's dog is just our way to help people take care of them. ♪

welcome back to "squawk box." lyft reporting its first quarter results yesterday, and the stock jumped over 60% after hours. that was for a quick hot minute. uptick in the ride shares margin expansion, the release had that number at 500 basis points. on the earnings call, the company's cfo corrected that number, said it wasn't 500, it was actually 50 basis points. the stock pulled back its gains after the revision, but still up quite impressively. joining us to discuss the rest of the results, david risher, the ceo of the company. it is nice to see you. i want to get into the details of this last quarter, want to get into the taylor swift effect, into what is happening today here on valentine's day because i know there will be some driver issues we should discuss. i want to start with, i don't know if it is a fat finger or what happens in terms of editing the press release, if you will, but how that extra zero got on

there. >> yeah, i mean, look, it was a bad error and that's on me. that's on me. but i don't want to take an ounce of attention away from everyone at lyft who busted their butts to deliver the best financial quarter in the company's financial history. that's what i want to focus on. >> i'm sure a lot of people want to focus on it and i know this is more of a short-term issue, but we are going to have gary gensler on the program literally in about 15 minutes and one thing that the s.e.c. looks at is when these things happen, and whether they are going to fine companies, what they should be doing to try to keep all these things from happening, can you just sort of walk -- for those other ceos out there who watch the broadcast, who think to themselves, you know, through the grace of god go i, what is the lesson here for you? was there something in how this happened that you think is preventable in the future? >> absolutely. the last thing is, you know, measure twice, cut once. we had thousands of eyes, we

have a process on this that is nuts and it is just a terrible thing. it is an extra zero that slipped into a press release and, you know, thank goodness we caught it pretty fast and we issued an immediate correction. super frustrating for everyone on the team and people are really taking it seriously. >> how did you figure it out? did somebody call you, did you get a text? >> you know, as you're doing these earnings calls, you got things coming in at you from a thousand different directions. and someone on the team noticed pretty fast that we were getting a lot of interest in the margin and she looked at the number and you could just see her jaw drop and we -- we -- luckily the only place the problem was was one place, it just happened to be the press release. but as i say, we issued a correction in a second and moved on. we're focused on customers, and the great quarter, very frustrating and real error. >> let's talk about the quarter, barons has a headline that says

forget lyft's error typo, how taylor swift helped the ride hailing stock pop. do you owe her a commission this quarter? >> i mean, i'll tell you what, a lot of things went well, not just in the quarter, but in the year. we had our best financial year ever. 16 billion -- or -- now i'm thinking typo and taylor swift. 13.8 billion in bookings, and what i'm proud of is the focus on our customers, on our riders and drivers. and that does include customers going to taylor swift concerts who, by the way, we can talk about this later, tend to tip three times more than other customers. it was a great quarter, a great year across the board. >> there is a lot of ceos focused on taylor swift. do you think that's a repeatable situation over time? she's got her tour running i think through the end of -- she'll come back to the u.s. and run through the end of '24.

but, you know, people like to put a multiple on these things and, you know, is this a one-time event or not? >> you know what, taylor swift probably wasn't the reason for our great performance. that's all about the team and the focus on obsession, customer obsession. but in the end, when events happen, you get a lot of people going to the concert, a lot of people coming home for the concert. we have done a really good job making sure people get picked up quickly at the end of the concert and it has a real effect, it does. taylor swift will do her thing, but there are events, you know, just about every day of the year now and we're -- >> what is it exactly that you think you're doing now that is bringing customers aboard and when you think about it, is it a market share issue, which is you're taking customers who otherwise wanted to use uber and they're now using you instead, folks that were going to drive on their own or take a taxi or walk or bike? what is happening here? >> it is a little all of the above. here's what i can say.

we had more active customers, you know, than we had ever in our company's history. we have more driver hours than we had ever in our company's history. what that tells you is that our thesis, focusing on customers, obsessing on customers, can drive great financial results. and, you know, as we know, we had free cash flow for the quarter and predicting it for all of next year. it is really all about that customer focus and i know it is something that a lot of ceos say, but we're really obsessed over it and you can see it, 25% of our customers were new, but 75% were returning. that tells you right there that you got a pretty good balance of folks coming in, they like what they hear and folks coming back because they like what they experience. >> what is the status of the membership? i think you're giving away some of that through one of the jpmorgan chase cards is that -- are you seeing an uptick from that? >> we got a great partnership with chase. i will tell you, if you are a chase card owner, download the

lyft app, you get 10x points and that's a big deal. our loyalty kind of approach isn't so much on a single product, like pink, though that's a good product, it gives you free priority pickup, a great loyalty program, it is more about doing things great every single day. i'll by the way, more than ten minutes late we'll give you up to $100 back, no questions asked to take a different way to get to the parent. when we do that we are less than 2% making errors on that. basically 98% of people are picked up within that ten-minute window and cost 0.1% on book tto do remediation. we're confident. driving results. >> what's happening today. a bit of a rider -- rather a driver strike that's taking place. your drivers uber as well, over pay. what can you say about that? >> so it's a strike that's been

in the works for weeks. maybe longer. what i can tell you is the big issues that drivers tell me, and i hear from drivers all the time, around pay transparency, around understanding what the cut is between what they get and what we get. around deactivations. these are issues we've addressed really well. i'll be specific. last week release add driver release that guarantees drivers will make at least 70% -- at least 70%, after external fees of what a customer pays. they don't make it, we make it up, rebate of the money. by the way, average is 88%. this 70% is a floor. my point that drivers are very vocal with what it is they want and we want drivers to sek ucce. the strike in the works prior to this highlights the issues we've known about, but i feel really good how we've addressed them and interested to hear driver

feedback. so far incredibly positive with us. >> david, thank you for joining us on this day especially given a little of the hiccup last night and look forward to talking to you again very, very soon. >> andrew, have a great valentine's day. if you get out, take a lyft. i'll be driving tonight actually. >> are you? >> in san francisco. i won't get to pick you up -- >> hopefully get good tips. >> thanks. up next, meta's ceo mark zuckerberg give's apple's provision headset a try and gives his review. guess what? he says quest 3 is better. maybe not a shocker. details next. and pre-market winners and leaders take a look, on the nasdaq. we'll be right back.

that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy.

is it possible to count on my internet with a partner like my customers count on me? it is with comcast business. keeping you up and running with 99.9% network reliability. and security that helps outsmart threats to your data. moaire dida twoo? your data, too. there's even round-the- clock customer support. so you can be there for your customers. hey billy, how you doin? with comcast business, reliability isn't just possible. thanks. it's happening. get started for $49.99 a month. plus, ask how to get up to a $1000 prepaid card with a qualifying internet package. don't wait, call and switch today! welcome back to "squawk

box." mixed reviews for apple's new headset, vision pro. add to that, to be expected from mark zuckerberg. kind of usual to see so-- unusu see this. meta got a chance to try out the new twice. in his living room came away from this convinced meta's device is not only the better value it's the better product, he says, period. >> there are a lot of people who just assumed that vision pro would be higher quality, because it's apple and costs $3,000 more, but honestly, i'm pretty surprised that quest is so much better for vast majority of things that people use these h headsets for with that price. >> and zuckerberg says thinks display of his company's products are crisp, more comfortable. having tried both, actually, for

right now, he's right. >> there have been people -- t. is the better product. >> because they say it's too heavy. >> too heavy. always -- >> do things like search easily -- >> i thought meta would be, could be, a big winner from all the attention the vision pro brings to the game. maybe the technology is better -- >> costs -- seven times less expensive, what is that? >> $500. but it does a lot. not all the same things in some cases does actually a lot more. >> i think zuckerberg, needs a new haircut. >> bulked up. >> brave of him to come out and -- brave, you don't normally see that. >> right. i like "squawk box" much better than the other businesses every morning. don't you? >> we have a lot more coming up. gary gensler coming up right after this.

[farm animal sounds] ♪♪ meanwhile, at a vrbo... when other vacation rentals aren't what they're cracked up to be, try one where you know what you'll get.

you know doug, ever since switching to workday

you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! . good morning. futures pointing to gains but the dow suffered worse day in almost a year because of some of the hotter than expected inflation data. lyft shares shooting higher in the pre-market. up about 20%. after up about 60% after-hours yesterday. turns out, someone added an extra zero to the earnings. talk about that.

bitcoin gaining ground. one month since that crop of bitcoin etfs was approved. s.e.c. chair gary gensler. don't want to miss it, at the table. the final hour of "squawk box" begins right now. good morning and welcome back to xwb here on cnbc live from the snasdaq market site. i'm joe kernen along with becky quick and andrew ross sorkin. a snapback this morning, u.s. futures. dow up just under 100 points. nasdaq, scary for a second there yesterday. 300, back over 100 points this morning. and treasurys, haven't seen this on the ten year for a little

while. above 430 now. just 405, what? this week, wasn't it? last week? >> just a couple months. >> just over a month since the s.e.c. approved a slate of spot bitcoin etfs open trading in cryptocurrency markets. crypto itself jumped in recent days over $50,000. $51,601. on the set first time talk about bitcoin and a lot more s.e.c. chair gary gensler. good morning grnl. >> good to be with you. good morning. >> a month going, what you think in terms of the price and what's happening inside this market and whether you think it's quote/unquote, working. >> we focus.v on investor protection and the issue is raising money. this product, we've had similar products in gold and silver, et,

technicallyexchangetraded products, and we approved a group of about 11 at one time. this was not the first way you could buy, or express, a risk in bitcoin. but as we like to say, we're me merit neutral. this was not in anyway an approval of bitcoin. that existed. it's just how to trade it in these exchange traded products. >> we've had both futures based only aor and bitcoin etf before, and curious sort of how you think this will impact the price of these things, given that -- by the way, interestingly. just on, earlier this weekend saying so few bitcoins are actually moving, and what we should think about. >> and i think it's a little less than neutral, mr. chairman.

almost was, we called it grudgingly, when you finally got -- >> from the court case. >> wasn't there a little bit of a, we're not sure about this thing, and buyer beware? >> put it this way. we're merit neutral is somebody's complying with the laws giving full, fair and truthful disclosures to the american public who goats decide on their investments. okay? >> you're so smart. at m.i.t. and peel liople liste you what you think about bitcoin. it's troublesome. i see all the merits and someone that taught about it and understand it seems to have an opinion that maybe it's-i don't know. pet rock-ish or something? >> i get your words about pet rocks and so forth, but i think we also have an investor education responsibility at the s.e.c., particularly about those investments that are non-compliant with either the

securities laws or commodities laws and so forth. here we have an asset class, all of these 15, 20,000 crypto tokens. >> yeah. >> many of which, without prejudging any one, many of called investment contracts or securities, and the platforms upon which you trade. intermediaries. not like in this building, nasdaq, that's -- that has protections and, against fraud, manipulation and the like. >> seeing people lose their shirt with nasdaq stocks, too. >> you can lose because there's risk. risk in investments, we try do as a society take some of the fraud and manipulation risk out of the markets by regulation sthts . >> is that the problem? more the froth and the potential for fraudsters to use it that is -- >> this is a feel, becky, that's been rife with fraud and manipulation. look at all the bankruptcies. on the set people talking about

those various bankruptcies, and it's not just one ent fipity bu entity after entity after entity and lining up in the bankrupt court. >> underlying piece of this. you've heard jamie dimon say he would close it down. basically bitcoin -- seen the comments. >> heard him say that. >> not just close it down, used by drug dealers and used by folks doing all sorts of illicit and terrible things. there's very few things that trade today that people talk about like that. now, there are obviously frauds and things that happen, but maybe not like this. >> like the dollar, is like 100 times more. >> that's your perspective. curious how you think about that. >> that's true, though. >> this is how much has been money laundered with bitcoin. this is how much -- this is bitcoin. this is -- >> yes, but, look. >> here's the jamie dimon quote. the only truest case is for

criminals, drug traffickers, money launderers and -- >> that's his opinion. >> we have a guest, joe. i know. what is your opinion and your opinion we have something trading on, for the public that has this type of use case, at least as described by the president of one of the largest -- >> leading market share -- it's the leading market share in ransomware. publicly known. >> right. >> it's the -- the token of choice for ransomware. joe, if i can say, the u.s. dollar, the euro, the yen, you have the whole society using it as a medium of exchange. we buy our cups of coffee, as i see here. we get paid in dollars or yen or euro. and you have a whole central bank, and support for one currency generally per economic region. >> right. >> that we don't have here. so there is a very real economic difference. >> part of the -- since

centralized and you can't have -- can't have a central bank. >> it's not that decentralized. >> i know, because of the etfs. >> no. not decentralized because look how finance tends toward centralization since antiquity. we have a handful of three to six core so-called crypto -- >> i understand. the asset itself, the way that -- >> right. how the -- >> the ledger -- >> how many times are people on this show say, i don't want to invest in something because how the books and records are kept? i mean, joe, really? it's just an accounting ledger. >> it's a -- everyone has. everyone has and can't be double counted? almost immutable and why people think -- >> you trust it more than an oracle data ba base -- >> i trust it a lot more. and a lot more than the central

bank that enables the fiscal authority to spend money to the tune of $33 trillion. >> that's everybody's investment choice, but -- >> then i think about how many things can be used in a d dealitorious ay. nothing do with the way you're using it yourself. i can run a car into a parade and run over -- that doesn't mean we shouldn't have cars. does it? >> no. you should have cars. >> i didn't want to use guns and trigger, so to speak, anyone on the set, but -- >> when the use case of a particular thing that you're buying and selling is an investment, it's just speculative investment. >> how many of the 90% of the people that own bitcoin use it for ransomware? must be -- another use case that makes it so attractive, so many people are investing in it. >> right. >> that's what -- okay. let me ask a separate question, which is just to pivot this.

i think the next sort of order event question is what happens to ethereum? those in the crypto world all want to know how you're thinking about that. really, if ethereum is a security, how does that analysis differ from how you would think about bitcoin? >> what we did in january was -- one set of filings. you're absolutely right in front of us, but i'm not going to prejudge it for you or the audience. that's something a five-member commission discusses. >> right. >> ask you a different question which has to do with indexing. so much of our market is focused on indexes. and you focus his ttorically on individual securities, individual companies and the like. i'm curious whether you think that the system as it is today actually is working in the right way? meaning a lot of the valuations

today, you could ascribe to the fact that certain securities are in certain indexes? relates to what's happening to bitcoin, by the way. >> so it's a great innovation going back decades ago, jack vogel and -- as you know, probably interviewed him when he was still alive. >> yes, uh-huh. >> invented an idea you can democratize finance. rather than buying individual stocks buy the basket. why buy the needle when you can buy the haystack he would say. cost efficient and the way the american public can really participate in the stock market as very low cost. it's also led to some concentration, some centralization in finance, because when you look at the large index providers, if you're in the index or not in the index, it be can very costly. >> but the other piece of it is,

in these cases it's a handful of stocks which often represent the majority of the entire index. >> and so related to -- >> individual value. >> looking for needle in the haystack to find the needle. get rid of the hay. who wants the haystack? >> actually, an economist, joe, you know this and studied it. >> i thought about it. >> benefit of diversity. >> 500 guess. >> spvanguard -- >> not doing yet. >> only the biggies didn't do it. correct? >> yeah. i don't think vanguard has. >> they did not submit an application. >> right. >> do you expect, if we're all sitting here at this table together in a year from now, that this dozen or so approved etfs, there's only two or three even more concentrated or going to be dozens of these things? >> that's really up to the market to decide, but what you

saw when this happened is, fees came down dramatically. there was a bit of a, an investors' benefit because of a bit of a competition there. investors also benefited from better disclosure. they have to do things, registering with securities and exchange commission on those products, and investors got the benefit of any surveillance by the various stock exchanges. but, again, these are highly speculative, risky assets in which to invest. >> let me pivot again to a big h headline happened last night. cfo of lyft. that stock popped in a remarkable way in part in the press release an extra zero on their margin for the quarter. what is the s.e.c. thinking about something like that? something you fine a company for that kind of mistake?

is that something where you say, that's part of the business? obviously investors who bought on that might have been rhythmic trading? talk about the impact of that as well? >> it's the responsibility of companies to ensure that they put out information to the public that's accurate. and i don't -- i can't speak to that one matter. i don't even -- you're telling me something i learned about a half an hour ago. but in general, companies are supposed to put out accurate information to the public. >> but when they don't -- >> if it's an accident. >> say it's an accident. let's say correction happens immediately. take lyft out of this and say that the sorkin-quick-kernen and coe we accidentally put out a -- kernen especially, corrected it within ten minutes, clearly not

intentional on our behalf or part. is somebody from the s.e.c. calling us today saying, guys, a problem. have to send you a fine? how does the s.e.c. think about these things? >> let me see if i can generalize and pivot to artificial intelligence p. i gave a talk up at yale. what is the responsibility of somebody using an a.i. model and the a.i. model hallucinates. we really don't want our advisers hallucinating on mushrooms or with a.i. pp there's still a responsibility to ensure that you have accurate information that you're putting out, and with the use of a.i., that you have certain guardrails in place. especially if you knowingly know that it might hallucinate or know that it might front run in a market. >> that's an interesting idea. this morning i looked at it in the, algorithmic trading that bought into this. most humans didn't react quick,

wouldn't have reacted quickly enough if you had a human eye looking at it you might not have thought about a 500-point increase for projections for margins. >> becky, again,stepping aside from that one event last night. i really just learned about it, but whether it's a mistake or whether it's intentional, because also you could have people trying to defraud the market by putting out fake news releases. >> sure. >> right. >> and so bad actors have a new tool to try to defraud the market. >> right. >> and that is to present the public from that. >> how much empathy do you have or sympathy do you have for algorithmic trading then? >> it's a tool. it's existed -- it's existeded for decades. it's getting faster, less latency, and it's also getting more sophisticated. in math. getting more sophisticated. if you're deploying a model you

want to make sure that the model has certain guardrails. really to protect your bottom line and to protect the market. >> let me ask you about another big topic, the ruling in the tesla case around governance and the compensation elon musk was made. i'm curious about it, because part of the ruling goes at the idea that the board of tesla was quote/unquote not independent. even though these quote/unquote independent director were supposedly independent but weren't and therefore did not negotiate in good faith and when they then endorsed this compensation agreement, the shareholders effectively, i think the judge would say, should i use this word? effectively defraud and, therefore, voted with misinformation. what say you? because i -- well, i think part of it is, all of these companies are trying to comply with the rules around independent directors et cetera and where's the s.e.c. play in this?

>> so it's -- the matter you talked about i'm not going to speak about but generally, those matters are a matter of state law and state corporate governance. the s.e.c. has some role with regard to corporate governance about the disclosures around executive compensation, the disclosures about the controls of the company, and the like, but those matters that you're speaking about really are generally a matter of state law. >> but to a large degree that case was about defrauding investors shareholders. i assume come under the purview of the s.e.c. and whether they're provided with the right information, because underneath this entire case is the idea these directors are telling the public they're independent but in fact they're not. is the s.e.c. supposed to step in in those roles and say, you know, here's the problem here. >> again, i hope the viewing public understands that it's the chair of a law enforcement

agency. i won't speak of any one circumstance, one company, and certainly other people's cases and state courts, but, yes. you're right. a securities and exchange commission is a disclosure-based regulatory agency, and it's about ensuring that the information is accurate, material information. >> right. >> there's not omissions and then we protect the public against fraud, manipulation, whether it's in these securities or in, yes, joe, crypto securities. >> right. >> i got more complicated one for you, and -- i don't know the truth of the matter, but there have been lots of reports mostly in the "wall street journal" suggesting that elon musk is taking illicit drugs. i don't know if this is right, wrong or otherwise. the question i have, though, is the s.e.c. supposed to look at this? is somebody supposed to look at this? someone not supposed to look? the board supposed to look? how would you think about this?

>> i -- >> i'm serious. you run a governor body over investors and some investors trying to understand what they're supposed to think of these articles. >> look, again, i understand you have a role to play as a very talented on-air financial journalist. i've got a role to play, it's also chairing a law enforcement agency. so with respect i'm not going to be pulled into that but we are a disclosure base that companies discuss their material risks, that investors get to decide based on those material risks whether they want to invest in that company or sell the stock. >> companies that have ceos, that use illicit drugs, include this in a, some kind of warning? just asking the question. >> you see -- >> i don't know! >> do you know how many drunk ceos get up first thing in the morning? >> i'm not sure the stories are

even -- >> experimenting with hallucinogens. you probably should. get to know yourself a little bit. >> maybe so. >> you mentioned hallucination. come back to artificial intelligence makes it easier, but, like, if a company is using artificial intelligence in a material way, it's really about bottom line, prospects in the line. >> right. >> and in that, that program has a tendency to hallucinate they have to consider those rinksrisd it's if it's a material risk. >> focused last time we met on crypto. sounds you're issue as message. reason you're here to talk about this you want to issue a merge to any company that will engage with artificial intelligence they will be held responsible for problems with that a.i.? >> well, in two ways, becky. if you're an investment advisor giving advice to the public or a

broker dealer using it, to remember you still have a responsibility to put your investors ahead of the advisor, or the broker dealer. that's a conflict issue. but also, if you're using it, that you still have responsibilities not to defraud the public, and so that's about having guardrails to make sure you don't front run. meaning take an investor's choice to buy or sell a stock and try to get ahead of him, put your interest ahead of them and so forth. yes, i do think that that's important, because we, regardless of tool you use, whether the hammer, whether you use a little algebra or use artificial intelligence. >> it's not okay to blame a dumb a.i. program that did something we weren't anticipating? >> right. you don't blame a dumb hammer using it to defraud somebody. i'm saying a.i. is a tool, but when you use that tool to do bad things. >> oh, my god.

it's okay for a.i. but not bitcoin? >> well, how do you see them -- >> just saying, it's a tool but if you use it to do nefarious things, you just made the same case for bitcoin. >> with bitcoins a non-security but -- >> now you're splitting hairs again. >> no, no, i'm not, joe. >> for every jamie dimon i can raise you one. one lay frink, sam brunken millar. peter thiel. >> established that joe is not merit neutral. >> gary gensler, playing the music. one other question having to do with esg. remarkable backlash on it. eastern backlash around d disclosures and climate and other measures you've talked about. i'm curious how you think about that. seeing it from different states,

pension funds and the like and it's become political. >> andrew, look at top 1,000 companies sort of the russell 1000, about 90% of them are already talking about climate risks somewhere in their annual filings. a little over half of already disclosing something around their emissions, greenhouse gas emissions. i think therein lies a role for the s.e.c. to help bring consistency, comparability in that decision usefulness but we are not a climate regulatoro climate risk regulator. we're a securities regularity. >> some companies are scared to disclose pledges or other things because if they do, you say they should. >> no, no, no. i do not. >> then they're saying certain states, texas, florida and others, will say you can't do fwhis our state we won't invest in you. >> andrew, many companies are already makes disclosures pshgs they're material you have to make sure they're accurate and not misleading. same role as whether it's about

the executives and it's the same thing if, about these risks if they're material. >> fabulous. come back to the table again. great to see you in-person. >> thank you. >> chair gensler. thank you. "squawk box," coming right back. ♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall.

. this valentine's day if you're looking for love, you

might find help through the use of artificial intelligence. julia boorstin joining us with her latest installment of "a.i. impact" how the cutting-edge technology is driving change when it comes to dating. julia, happy valentine's day. >> to you, too, becky. so the global online dating market is expected to grow by more than 2.5 times to hit nearly 24 billion dollars by 2032, and new a.i. tools are a key part of that growth. the start-up calmed nino a chatbot offering dating advice with funding from sequoia. previously ran tinder, a new category of relationship tool helping users figure how to express feelings or set boundaries. >> nothing like the movie "her" or trying to be a therapist.

more like ratatouille. helping you make incredible soup teaching you how to have great relationships. >> another chatbot called blush from a back the a.i. company called replica looks like a fake girlfriend or boyfriend and invites you to interact with virtual characters used to teach people how to practice flirting and communication. now, this is not just about start-ups investing in a.i. the public dating giants are using a.i. to bolster businesses and protect users. match tells us using a.i. to upgrade ability to make matches, improve users' experience, setting up a profile, picking photos and for post-match prompts that suggest specific date ideas based on you and your match's interest. bumble uses a.i. in its deception detecter to identify spam, scam and fake profiles and say reduced reports of them by

45% with these a.i. tools. they offer users as well a.i.-powered ice breakers, customized based on their profiles. these a.i. dating tools aren't about curing loneliness with a virtual significant other but rather deploying learnings from data to get people to go meet up in-person a little faster. >> yeah. just trying to think. this is almost like the sarin know cyrano deboeershiac. >> right. you don't have to go to a friend, go to the chatbot. they get smarter. designed to get smarter understand who you are what you like and give customized advice based on that. they all say the goal is really to get people to do bet whir it comes to digital dating and then

can go be meet up in-person. meet up faster th er rather tha conversations on the apps for awira while. >> making us you a little better i suppose. thank you. and a dip amp yesterday's hot inflation data. dig into that move with gene munster. that's coming up next. with empower, we get all of our financial questions answered. so you don't have to worry. empower. what's next.

welcome back to x"squawk."

a strong drop in tech stocks yesterday. joining us, has calculation or valuation issue changed given what we're seeing in terms of cpi and what folks, they think that jay powell is actually no longer doing anytime soon? >> andrew, i think it does, pushes back with that inflection point. i believe we'll get to a three to five-year bull market powered by a.i., but investors need to get on the right side in 2er78s terms of when we'll see the rates go down. expectations i think are now for june. my sense is probably later than that. i think this is just the most sticky part, and i think it's a good reminder to inflation, it does matter in the near-term with tech stocks. andrew, to emphasize the point, may seem subtle to push back on window by two, three, four

months, but look back at 2021, different environment. rates going up at that time, but that mag seven was down 32% in the six months from october of '21 when the rates started to peak and then if you look at the emerging tech within the nasdaq, down 70%. so rates do matter. i think investors are still off sides when it comes to when to expect some of these cuts. it does dampen some of my enthusiasm, because, as i mentioned, i'm very bulled up where this will go but investors need to right size when these rate cuts are going to happen. >> given what you just suggested then, what do you do? want none of this? wait? when would you be in? >> so i think that it is wise to be mostly in now, because, again, i think we're going to this three tofive-year bull market. we talked about the negative lever related to inflation, but there is a massive positive lever related to a.i.

investors have struggled about what to, how to kind of capture and guess what the impact will be. in my sense, you need to put this on a spectrum of a.i. and its impact and other paradigm chips. put the pc at 20, mobile 25, internet 50, electricity 100, scale 1 to 100, electricity at 100. a.i. 99. when you have that perspective when i have that perspective and think what's going on with interest rates around flation and where investors are in the near term, you can get kind of misled into worrying about what's going to happen over the next three to six months. ultimately, if this is as big of a paradigm shift as i think it is, even if half as big, i think we could see nasdaq move up considerably. 2x next to do three years.

>> talking instagram, facebook posts zuck put out about the meta quest 3 versus vision pro. i said i actually think, for right now, i agree with him. i think for the use case, they may be the winner, and for most people who can't affords $3,50 it's a good product. >> a good product. i don't think main streamed. sold, call it 8 million units before the last six years leading up to quest 3. probably done another million units since that's come out. so i think it's good, but i still don't think -- it's such a big gap between what vision pro is and, of course, a big price gap. 7x price gap there, too. i would sum it up. i don't think it's mainstream yet. i don't think quest 3 is mainstream. it will be the alternative to

vision pro. know stake in the ground. the next five to ten year, spatial computing, metaverse will be something. meta has a lot of work to do to get even close where apple is and they'll will help close the gap and spatial computing metaverse device for 80% of the world and apple will own the 20%. >> wow. okay. that would be like being the winner? a lot of people are sort of writing off meta. i've said the whole time, you may think the vision pro division is better. many ways it is. add weight, cost, the other things. look at this other product. okay. maybe at least for now, could be like an android. >> i think that's the right analogy. exactly how i think about it. apple versus android in this case. meta will have control of the 80%. google, sam xuong, nowhere to the found here. it is just surprising to me how slow that they have been to move here.

i think this is advantage to meta as meta shareholders, wish they wouldn't spend $15 billion a year on reality labs. accomplish what they're doing for half that much but they are -- this is a force of zuckerberg. when he puts his mind to something. he'll have a device good enough to capture that 80%. after developers make progress i think you'll see more of this adaptation curve. take years to get there but apple and meta when it comes to spatial computing. >> did i hear you correctly? a.i. push the nasdaq to two to three times the level in the next two to three yes? did i mishere that? 35,000, 45,000 next two to three years? >> i believe we're going into a three to five-year bull market ending with a bubble that will burst but we're in the front end of that bull market. nasdaq trading by 28 times.

peaked 100 times back in 2000. because of the weightings of the mega caps we're not going to see 3x return. if i'm right this is in fact much bigger than the internet is, you can build a case there will be capital rushing in to enable this a.i. and you will see a bubble emerging. so whether it's a 2x, a 3x, i don't know what it is. i do know a.i. will are transformative and power the market higher. >> we will be able to track that. gene, thank you. always great to see you. >> thank you. when we come back, speaking with a key voice in real estate. you don't want to miss that interview. next when "squawk box" returns. richard lefrak.

you founded your kayak company because you love the ocean-

not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire fed chair jay powell says issues in commercial real estate are manageability. treasury secretary janet yellen recently said she doesn't expect

commercial real estate to cause systemic risk to the banking system. joining with husband take, richard lefrak ceo of real estate giant lefrak organization. i don't use that term loosely. not many have a city named after thek, richard, you know? like lefrak city. >> well, very kind, joe, to be so generous with your appraisal of my value. >> you've got, i mean, if i absolutely needed an apartment i think i could probably come to you and find one. >> yes. by the way, before we start i wanted to say one thing, if that's okay? that i was listening to your guests about the inflation stuff and maybe this is a headline before its paper. i noticed in the last three weeks apartment rents are starting to firm up again. >> really? >> yes. >> so that's -- we can talk

residential or we can talk commercial, but you know both, obviously. what do you -- how do you account for that? >> everybody's working. >> everybody's working. and -- why is everybody working when they've gone up 500 basis points? it's all a very hard thing to sort of figure out. isn't it? >> and we have a real estate crisis in the midst of an economical. doesn't make any sense. >> history only rhymes. tell us, what we want to talk about, though. tell me all about new york city commercial real estate, and where we are. >> well, you know, of course, everybody knows tried a sea change in terms of occupancy. you know, work from home, all of the pandemic derivative problems have come home to roost, and in addition, this abrupt increase in interest rates, which is really unprecedented, other than

1981-82 when vaalco was fighting inflation. turned the whole industry on its ear, and right now we're on an unvirtuous cycle because nobody knows what anything is worth. because they don't know what it's worth it's hard to get any kind of financing which is really the oxygen of the business. you know? commercial real estate lives on debt, and, you know if debt is unavailable, it's just a complete, you know -- what these buildings are worth and what they're value is. >> did a long-term sea change, postpandemic, richard? >> well, you have had many visitors come on the show and talk about, you know, work from home and how long it's going to take to kind of sort out who's coming to the office and in they're coming. this definitely has been

improvement in attendance in office -- you know, in office attendance by employees recently. but now a.i. is on the scene and the numbers, such as 20%, 30% of the white collar jobs will be eliminated. so when you get all finished with it, it's just a big, vague bunch of facts, and the only real fact that's hard today is that there's no money available, really. no liquidity in the business, and there's going to be severe losses suffered by ecquity ownes and some financial institutions. >> talk about seeing it firsthand that, you know, the last point to 2% for the fed might be difficult, given what you're describing right now. were there a lot of -- what's that expression? pretend and, you know, extend -- there's a lot of that that we know goes on, and if anybody was

waiting for rates, for rate relief near-term, they might have to put that off a little. kwai have we avoided even more trouble in commercial real estate, and are we going to be able to avoid it if rates start climbing again? >> joe, first of all, there was something called, i would call a crack in the real estate business, which was low interest rates. and, you know, a lot of those loans are starting to roll off now. and so people got by, because they were borrowing money at 3%, 4%. that same money is going to cost 7% or 8% today or even more. so the reality of the problem is going to kind of be more obvious, and i think that part of that is -- you know, sort of janet yellen, head of the federal reserve, both speak to commercial real estate problems in, in the last week or two. >> right.

so at this point, what's looming ahead? already looking at just tip of an iceberg? got a lot of metaphors here, richard, but is that how you see it? will time take care of things? >> i was going to actually start this whole discussion with the gofundme page that i need for my business. no. i mean, yes. we're going to see more and more problems emerge in the next 12 to 24 months. and if you look back at history at the financial crisis, which was the last big mess in real estate, it took three to five years to kind of work through all of the problems. so i don't think there's a magic bullet. i don't think that lowering interest rates 60 or 75 basis points will make that much of a difference. i think this has to work its way through the system and it's going to be -- >> one of the questions people have, is this like a

slow-rolling situation that hurts but doesn't kill? or is it the kind of thing that could be both slow rolling, but reach some kind of terrible inflection point where confidence, you know, completely and utterly >> i think it's both right now. i think you described perfectly two dynamics that happened. people have lost confidence, and that's why there's no liquidity and no transactions occurring. even the stress funds have not been that active yet because they don't know what anything is worth. but at the same time, this is not going to be a moment in time where everything blows off. it's just going to be kind of a dull pain that continues in the system until it sorts its way out. and you're going to be talking about this in a year or two years too. it's not going to change unless magic interest rates return to

3%, and everybody comes back to work five days a week. >> have you been surprised, richard, at, you know, there's a lot of narratives on why we got so much inflation and what happened, whether it's supply chain or $33 trillion in debt or the fiscal -- whatever you, you know, want to attribute it to, but -- and you know, i don't know where you stand on -- we got an upcoming election, and there are different policies. there's pro-growth policies, and then there's keynesian policies. what kind of economy do we have right now? is this real? >> we have a good economy. but we have some inflation embedded in the economy, and it's, you know, it's become, you know, the topic du jour for the last year and a half, and people sensitive to it because the average person is going to get hurt by it, so that's politically not viable. and i understand their thinking,

but there will be a lot of derivative problems in the banks. there's going to be a lot of losses in real estate. i mean, i've seen estimates as high as a trillion dollars. now, how people get to these numbers, i don't know, because they must have some system of evaluating things that i'm not aware of. because it is a local business, and every market is different. i'm sitting here in florida now. florida is kind of semi-booming, and there are other places, some of the blue cities in the northeast and the west, that are really suffering more. >> well, i don't think you're ever not prepared to act on something that's very compelling. will there come a time where you have the will and the financial wherewithal to really go into commercial real estate? >> i'm going have some fun. i mean, my entry in the florida

market, which was about 10 or 12 years ago, was all based on the financial crisis in trouble, and it was an opportunity for me to -- and my company to come down and start investing heavily down here, and yes, you know, the market will overreact. it will be great opportunities. i mean, there is allegedly hundreds of billions of dollars in these rescue funds or stress funds, and they'll start acting, and there will be some basis of value that is established. >> have you been over to mar-a-lago? >> i was -- only once. i was there for mrs. trump's mother's -- unfortunately, her funeral. >> yeah. okay. just figured i'd throw away a question. >> i live in miami, so it's -- palm beach is a long way from here. >> it's a long way. and getting all those commercial flights from these places, one

to another, it's very difficult. i know, richard. good to have you. >> it's great to be back, and i'm looking forward to seeing you all again soon. >> yeah, in studio when you come out. >> you pull me out of a cave when things are bad. >> exactly. find lefrak to talk about this. thanks. "squawk box" will be right back. t reaching a magic number... and more about discovering magic. rich is being able to keep your loved ones close. and also send them away. rich is living life your way. and having someone who can help you get there. the key to being rich is knowing what counts. with nurtec odt, i can treat a migraine when it strikes and prevent migraine attacks, all in one. don't take if allergic to nurtec. allergic reactions can occur, even days after using. most common side effects were

nausea, indigestion, and stomach pain. ask about nurtec odt.

little more than half an hour until the opening bell on wall street. joining us now on the markets is stephanie link, chief investment strategist, portfolio management at hightower advisors and a cnbc contributor. stephanie, i don't know whether your point of view on the market changes, but just looking at the reaction to the ten-year yesterday, it's something definitely the whole mindset did change with that number that we saw yesterday. did it change your view or your approach? >> no, not really, joe. we were kind of due for a little bit of a pullback, and we could probably just be more volatile and trade in a range for the next couple of weeks as we digest everything, but at the end of the day, we are making progress on inflation. we went from 9.1% at the peak to 3.1%. okay, so, it wasn't 2.9%, which

is what we wanted and what we were expecting, but we are making progress, and i think when you step back and you ask yourself, why are we seeing inflation and why is it so sticky, it's because growth is better than expected. gdp is running at 3.4%, and that's much higher than what people had expected, and that's good for earnings, and that's good for the bottom line, this better growth, so i think we just kind of have to step back. we have had a nice run the last 13 months. we have seen 26% -- 29% in terms of the s&p 500 growth, and so, okay, maybe we just trade around for a little bit. >> what if the fed decides that it has more work to do in terms of cooling off the economy? not just in -- that's the -- that's what it needs to do to make more progress on that last mile of inflation. >> well, i mean, i think that that's what the market was trying to figure out yesterday. i think the six cuts was absurd to think about.

is it three cuts? i've been out visiting with advisors. some people think there's no cuts this year. so, i think, at the end of the day, we have to wait and see. we got to be -- we're going to be data dependent, but i think earnings are still going to run the shop, if you will, and be important, and that's the most important thing for equities at this point. >> yeah, if the fed, in fact, and there are certain indicators that say they are restrictive, but i have had someone arguing with me today that they're not in restrictive territory yet, and it's clear from what's happening with a lot of risk assets and everything else that they're just not. they might think they were. maybe we don't get any cuts, steph. we got about 10, 15 seconds for you to respond. >> if we don't get cuts, i think we have more downside and more volatility, but i think it's a buying opportunity. >> okay. we will check back and get some individual names and sectors, because we'll get a chance to do that again. stephanie, thank you.

happy valentine's day. is that red? she's dressed in red. final check on the markets. you can see we're still in rebound mode, at least a little bit. 108 points now on the nasdaq. i don't know if we have a chance to look at the ten-year. that's something to keep an eye on again. there's the ten-year. bitcoin, above 50. happy valentine's day. >> thank you, sir. happy valentine's day to you. >> we already have some, but we can be junior valentines with each other. >> you got flowers coming? >> nothing coming. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. how much can the bulls get back after the worst day for the dow in almost a year? worst for the russell in almost two. ten-year still above 4.3%, though, and cisco earnings tonight. our road map begins with stocks se