it's friday, february 16th, 2024. >> if you think i'm sexy and you want my body. >> i don't and i don't. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew is off today. it is friday and we're burning into the friday ahead of the three-day weekend. you will see futures are mixed. dow futures off 32 points. the nasdaq is indicated up triple digits. you have the s&p 500 indicated up 12 points. let's look at the treasury yields. we are doing well for the week. if you look at the treasury yields, the ten-year yielding

4.26%. among the big movers today, coinbase shares are sharply higher. company posted a profit for the first time in two years. it was boosted by the surge in crypto prices in the fourth quarter after the etf news. revenue jumped 51% to $954 million beating the estimate of $826 million. earnings of $1.04 a share shattered expectations. the operating expenses fell by 45% during the quarter. almost back in a big way from what it was. i think later we may have ain af interview with the gentleman. shares of roku reporting 54 cents a loss. worse than what analysts

expected. revenue per user slipped for the quarter. guidance was better than expected. they plan to increase revenue and free cash flow. the stock took a hit earlier this week on the report that walmart could buy visio giving it access to advertise on its platforms. roku has a similar platform from advertising and licensing in the quarter. we will talk to anthony wood about the shakeup in the business. he will join us at 8:15 a.m. eastern in the interview. >> a lot of people don't realize walmart has its own advertising unit. it is a profitable unit which has been building over time. you think advertising. why walmart would matter? they have a big online advertising firm. >> they have -- i'm not the

right foreiperson to talk about. on one of the recent tvs i bought comes with roku. you have to sign in and do stuff. >> we have roku on some of them. we used to use roku. now on the recent ones, we have a different one. >> apple tv took the place of roku? >> in some places. i have a different one from that. >> i don't know what to do with this. what do we do with this? >> good question. >> does that help me out? that may not be the most probing question. >> we can call the i.t. desk. >> or andrew. >> if he picks up his phone. >> leave him alone this morning. shares of the trade desk soaring after the advertising technology company revenue beat estimates and guidance came in above expectations. the board approved additional $650 million in buybacks. the trade desk benefitted as the

company shifted ad budgets from traditional television to connected tvs and streaming. shares of yelp are falling. shares of 37 cents a share missed estimate. the revenue was in line. the guidance for the full year came in below estimates. 9%. the cfo told barrons there were several reasons with weather and respiratory illness and the holiday season hangover. he said restaurants pulled back on ads. right now, an interesting story about the american retailer that anybody with kids knows well. last week, the children's place warned it was running out of cash. the staple of american shopping malls has been on the edge of bankruptcy, but with the warning last week, the stock has been snapped up by the saudi's

largest bank. the family bought 46% of the retailer shares on friday and monday and another 8% on tuesday. it spend $80 million during the trading sessions. this is a hostile takeover without speaking to shareholders. it was able to execute because children's place missed estimates on friday and many shareholders were eager to sell out. the company plans to replace the board at this year's shareholder meeting. we should note the company is small with the market cap of $312 million. the only question is why not wait for bankruptcy, but if the price is that cheap, it is easier do it on the open market. >> that is tiny. >> very small. i was in a children's place on monday. any of the companies have suffered greatly. the ones that are stored in the malls because so much of this is

online. i was in the children's place on monday looking for a valentine's day shirt. there weren't any because it was too close to valentine's day. it's been a long time since i've been in the stores. >> it is a nice mall now. the way it is separated. the nice ones from the crappy ones are like ghost towns. where i'm going to walk -- it hasn't come to that. it has not come to that. >> good place for indoor walking. keeping your steps up in the winter time. >> nurses' shoes. i still run outside. commercial real estate giant cbre raising questions across the costs with earnings and revenue beats. it expects kbs growth above 10%. the ceo struck an optimistic

tone. he feels the commercial real estate has bottomed out and feels the worst is over. there is pressure to get people back to the office tand that lifted the stock 8% in yesterday's session. smaller peers of the company were up and regional bank stocks with exposure to commercial real estate were higher on the session. we are watching the shares of draftkings. a loss of 10 cents a share. the street was looking for 8 cents. revenue fell short of expectations. draftkings will acquire lottery app jackpocket for $750 million. slim pickings this week for things going on. >> you clearly weren't watching rutgers and northwestern. >> i can't bet on rutgers. it's in the state. >> spoiler alert. northwestern.

>> i would bet on northwestern. rutgers is competitive. tonight, villanova and georgetown. no nba games because of the all-star games. no football. can you bet on hockey? >> i don't know. the devils lost last night. >> someone has to score a goal in the first ten minutes. i think that is a sucker's bet. >> no. >> you think it can happen? >> no. >> first period, i might do it. first ten minutes? that's not it. it's like soccer. would you bet? soccer is different. you bet on a goal scored in the season. at some point. >> i love soccer. let's tell you about the college basketball on peacock. caitlin clark broke the division

i women's scoring record. she wasted no time. she broke the record in style. took a shot from over the half-court line that hit nothing but net. it took 2:12 to score the eight points she needed. clark broke the ncaa record, but finished with 49 points. this was a sellout crowd. $500 a ticket to get into the games. >> incredible shooter. i can't put my finger on what goes on. do you? >> no. >> what is that? >> excellence. that's what that is. >> how? how? all kinds of stuff. almost like a.i. >> there are some physics. >> some? you are moving forward and moving backwards and to the

side. >> bill bradley played at princeton. >> he was still really good. >> he played with the knicks. he was with princeton where he talked about shooting from anywhere. he knew if the rim was off by an inch or something because he would take the shots. that's the fall. you know because you are doing the math and physics in your head. >> there is a guy or girl in front of you. the arc. someone sent me steph curry with five in a row full court. >> i saw the shot yesterday where he hit from the tunnel. >> five in a row full court. >> he can shoot from anywhere. he has taken shots from the stands. >> i don't know. i would say we want to check out that brain to see how it works. maybe in 80 years. >> einstein's brain.

>> yeah. when we come back, doordash revenue and guidance is beating expect expectations, but the stock is pulling back. we will talk to the analyst about the big moves of gig economy stocks. and later, we will speak to general david petraeus about the nuclear threat from russia in space. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. ? a) her. (christina) being all over, all at once. (tina) all the time. (christina) but my old network wasn't cutting it. and that's not good for baking. or judging. or writing. so, we switched to verizon, the network businesses rely on. with verizon business unlimited, i get 5g, truly unlimited data, and unlimited hotspot data. so, no matter what, i'm running this kitchen. (vo) make the switch. it's your business. it's your verizon.

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welcome back. the gig economy stocks in focus this week after lyft and doordash with results and uber with the stock buyback plan several million dollars. joining us is michael morton. michael, is this the year of the gig economy stocks and people realizing or seeing there is a path to profitability? >> i think you hit the nail on the head. it has been an impressive 12 months for the industry. it is the case of investors cheating perception of businesses which were thought to be bad and turning out to be better than realized. rightfully so from 2015 to 2022,

consumed $125 billion of investor capital. they are tagging addressable markets with $4 trillion. there was an emphasis to grow market share at all costs and not focus on profitability. it gave them a generally bad reputation. uber was forced to get disciplined during covid and run a lean operation. in the last year, you have seen doordash tighten the belt with expenses and you have seen profitability explosion from doordash and uber. >> the amazing thing is we used to think consumers loved the businesses, but they loved the businesses because things were given away. even when they are not at this point and prices are raised to the point of making it a profitable endeavor and people are so used to using the services, maybe we changed consumer behavior so much that we will not live without them at this point. >> it is an interesting way to

view it. i heard people refer to uber as the undeleteable apps. people like to move around and experience different things and uber is the benefit of that. for decades, the u.s. consumer has spent more money year over year than they did in the prior year. no real guarantees in life other than death and taxes, but the interest to explore new places and desire to make more food for them in the prior year is really consistent and these companies are perfectly positioned for it. >> this is not a surprise to investors if you have been watching these the last 12 months. uber shares up 124% over that time period. dash shares up 82%. lyft shares up 67%. we have seen buy-in on wall street. the question is is there a risk factor here and how much has been built into this and how

much room is left to run? >> we have a buy rate on uber. we are neutral on doordash. the u.s. consumer enjoys spending money and growing right through the student loan impact. these are really promising businesses with secular tailwinds. people eat out more every year and gwith growing frequency. they attacking new addressable mar markets. grocery is $1 trillion category that is underpenetrated. there is risk in the next year where management teams like doordash and uber get more aggressive pursuing the opportunity. years ago, restaurant delivery was thought to be a bad business. they showed you the economics. we have a proof of concept for

grocery. instacart is profitable. you can put advertising dollars on that business. you see the first half of the year with doordash. they are investing aggressively. margins are not in line with what investors want to see with the first half. the stock is trading down. that is some of the risk. they see opportunities and pursue it a little more aggressively than wall street expected. >> is weather an issue? doordash stock down 7%. >> we joked about the report this morning. the track report of companies blaming weather for poor results in my career has not been great. if there is a company that i want to give credit to for when they say weather is bad, it would be a food delivery service. i'm sure you have been sitting at home and thought you would go out to dinner and it is pouring rain or snowing and you look at your spouse and say we will get

food delivery. at that same time, the supply side of the marketplace which is the drivers, you are less inclined. it is pouring or snowing and you are less interested in driving tonight. costs escalate for doordash because they have to cover to pay the dashers and uber eats to get in the car and get on the electric bike and drive in bad weather. >> that makes sense. i get it. michael, let's talk about the risks from regulatory oversight. you can look at this on the state-by-state basis or the department of labor suggests with turning the contract employees into actual employees and what it would mean from the profitability standpoint. what is the biggest risk? what happens? >> we always highlighted regulatory as one of the biggest unknowns for the companies. if you want to talk about state-by-state basis, 50 states

operate. uber operates in 70 countries. lyft just operates in the u.s. and canada. it is absolutely a risk and it is diverse around the world. the one aspect of this is the companies have shown an ability to operate in different regulatory environments globally and in the u.s. with different state rules. some impact economics. you are seeing in seattle the aspect of unintendsed consequences to the regulations. i think the politicians are realizing that as we. they pushed the fees through for consumers and it is hurting the affordability from the consumer side and it is also hurtsing demand which makes it hard for the gig economy employees to earn. doordash has interesting stats. they spoken to this in the past. 90% of the dashers work less than ten hours a week.

supplemental income for them. this is important that the regulatory buyers around the world work with the companies because it is an important service for the workers and consumers. they have shown an ability to operate in a variety of regulatory environments. >> michael, thank you for joining us today. >> thank you for having me, becky. coming up, bank lobbying groups are suing regulators this week over laws meant to prevent discriminatory lending. we will bring you that story next. later, dr. scott gottlieb will join us to talk about the new ftc probe of drug shortages. "squawk box" is coming right back. is a spa. an office. hi! hello! a cinema. so automated. yes, the definition of a car changes... but one thing stays the same.

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regulators last week over amendments to laws designed to preventhave leslie picker with . >> reporter: this is where the new rules are surrounding the community reinvestment act. this was passed in 1977 to reverse policies depriving lower income in inner city neighborhoods of credit. originally, the rules were tied to the physical branch encouraging to lend to the communities where they were taking deposits. the new iteration updated for the modern age takes into account declines branches and evaluating banks for the lending on the nationwide basis. last week, american bankers association and chambers of commerce filed a complaint in the north district of texas against the fed, fdic and occ.

the plaintiffs say the rules went too far and they are seeking to vacate them. the fed and fdic and occ declined to comment on the lawsuit. others say the modernization is necessary to bring access to credit to under served communities. phil bynum leads a group in the south and saying discriminating lending practices are still rampant and strong accountability rules are needed to close the gap. he said he found the lawsuit hard to reconcile. >> cra is designed to make sure the banks reinvest in communities where they extract profit. his tatorically where you have branch. if branches are no longer the way you access the system, you have to modernize with the cra. i think the regulators have done a reasonable job of doing that. >> reporter: the banking group

says to comply with the rules in the first 12 months could exceed $600 million in costs. guys. >> it's really interesting. i'm thinking how you should do that. it definitely is one of the effects of what we have seen with banks. >> they closed the branches i used to go to. >> you think of "it's a wonderful life." it used to be a place where you go and part of the community. it had that vested interest of what was going on. that is totally gone. i don't know. i don't know how you write the rules so you don't somehow see where it is ineffective or has adverse consequences somewhere. banks, obviously, don't want to lend in areas where they -- they

need help to make sure it is unprofitable or unable to do that. i don't know how you do that, leslie. >> it is complicated. that's what the law was for and it hadn't been updated in 25 years. these new rules, guys, are 650 pages long. there is a lot to digest there. you are right. banks have been shuttering branches. there are few branches in underprivileged areas anyway. what the regulators are belooki to accomplish is a okay because people are moving to digital banking, here is the solution to ensure not having a physical branch is not a deterrent to getting credit to areas that need it. >> what are the rules that make it so you give online bank training to customers? i don't understand. i get there are older people who

have a hard time making the adoption to going to online versus and that behavior changed in the pandemic. older people did not want to be out and at risk of covid. maybe there is some way to make sure you get out that information and educate people. >> i think that's part of it. under the rules, they have banks established retail lending assessment area. basically, this is to ensure credit gets to areas where they may not have fizzphysical depos in a physical branch. they have or it ensures areas have access to credit. for banks that operate nationwide, in theory, it defines the community which had been tied to a physical location. community for a nationwide bank is the entire nation. so, that requires them to comply in disfferent ways than the pas. they say and if they are not in

compliance, you get a cre score as a bank and if you are not in compliance, the regulators can block the ability to open branches and change offices and according to cowen, it is your ability to do m&a. we will not bless this merger which may be more relevant to regional banks, but still important in the land sscape. >> leslie, thank you. when we come back, general david petreaeus will join us to discuss the threats from russia in space. as we go to break, let's look at yesterday's winners and losers in the s&p 500.

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good morning. well come back to "squawk box." we are live from the nasdaq market site in times square. it sis a mixed picture this morning. you have the nasdaq up by triple

digits with the gain of 100 points. we have breaking news from russia. kremlin critic alexi navalny has died. he has been held in a facility 40 miles north of the arctic circle where he was sentenced to 90 years. he was just 47 years old. >> that's it? >> yeah. fbi director christopher wray says the u.s. and allies averted the russian spy operation targeting the u.s. and europe. for this and other threats, let's bring in retired four-star general david petreaus. he serves as kkr global institute as global chairman. general petreaus joins us from the munich sysummit. you must know vastly more than

we do, general. can you fill us in on what you have been able to find out about what was such a cryptic message? it was bizarre. >> look, i'm long since serving in government, joe. i certainly haven't talked to director wray. there are no end of threats coming from russia. we had the recent worry and concern and huge concern about the possibility of some kind of weapon in space, whether it is a nuclear weapon in space or nuclear powered satellite or more along the lines of what we have with an electric omagnetic pulse weapon. that would be alarming because we are hugely dependent on timing in space which controls so much of what we do in our daily lives and economy and, of

course, in military capabilities. you have this additional threat uncovered and announced by the fbi director, which is completely unsurprising. russia has been trying for decades to enflame passions in the united states to influence our elections and spy on us and so forth. again, no surprise there. tragic to hear that alexi navalny passed away. to be candid, i was surprised he lived as longs he did. he was the most important and courageous opponent to vladimir putin who, remember, he went back on his own from germany to russia to continue his crusade against putin. he has been in prison for a long time. very harsh treatment. often solitary confinement. still occasionally able to get word out. now, of course, he has passed

away. i would wonder whether this was natural circumstances or not. >> i guess we shouldn't be surprised with the way it is announced by russia. they don't have to explain. they don't preventend to try to explain? >> no, no. this is a country led by a brutal dictator who is animated by a grievance-filled view of history which led him to invade ukraine, a country he denies the existence of or the right to exist, if you will. here at the munich security conference, all of the issues are important, but the one that is center stage has to do with whether the u.s. is going to continue to support ukraine and the way that the bipartisan majority in congress believes and i'm sure vice president

harris who is due here in two hours will underscore the importance of and president zelenskyy here tomorrow morning. that is the real issue here as well as questions about u.s. commitment to nato and so on. >> yes, general. nato at large with some of the recent issues. >> general, what do you think of the pr campaign that putin has undertaken with tucker carlson going there and what social media has done with those things to this point? he certainly is making the point for why the u.s. should not continue supporting ukraine. >> i'm wholly unconvinced of his argument which is full of the manufactured grievances and his version of history. this is the individual who asked when the worst geopolitical event of the 21st century, two

world wars and the great depr depression, responded the demise of the soviet union, former ussr. he has been trying to rean see him assemble it ands has done so with brutal means. the invasion was unprovoked and brutal. it continues despite the extraordinary losses that russian forces are sustaining. you do wonder if there won't come a time, but russian mothers and fathers will say my son will not enlist and you will see what we saw earlier which was more russian men leaving the federation than showing up to the stations. he is figuring out without large enlistment bonuses to replenish forces, however poorly trained

or employed they are with the human wave of attacks. that is the issue that is front and center here. it is the continued russian threat. it has many forms, as we have seen in the past week. again, his long-winded explanation of all this and willingness to negotiate is pure fiction. he wants to crush ukraine. if he is able to do that, he won't stop there. moldova and lithuania and others will be on the list. >> it seems he is living in a strange world, general. if he has super power envy or misses the statue the ussr had, it is an economic problem. he has done nothing to address that. gaining territory, whether it is ukraine or the other countries you mentioned, what does that mean when you gain the territory and if you still have an economy

that's one-tenth of the size of most countries? >> well, in fact, his problem is that he could not abide on his border a former russian or s soviet republic that was a thriving democracy with the free market economy. that would show the russian people what they could be if they had adequate or decent governance. russia has been reduced at this point in time. it is a for midmidable country. in many respects, it is a gas station with guns. it has huge quantities of crude oil and natural gas and coal. it is still able to find markets for that. that is how its economy has survived despite our efforts with various sanctions and export controls which need to be tightened and invaders going

after it. that is ongoing. they managed to sustain. he has put the economy on a war-time footing so he can sustain the costly war and we need to be doing everything we can to help ukraine just as the europeans have. they recently, the eu, has approved $50 billion euro of assistance. they already provided two for every one u.s. dollar in aggregate. now this additional trench. they are stepping up to appear with the 18 of the 31 the will meet gdp goal that has been established for nato countries. we need to continue to do everything we can to help ukraine to preserve its independence. this is their war of independence. we need to help them in that.

however flawed democracy and free market economy. they share our values and ideals and more than does vladimir putin's russia. >> it is all interconnected. i was going to ask about biden and netanyahu and rafah. we didn't touch on china they are all connected as well. >> they are. if i could make one last point, in fact. >> yeah. >> if you don't support ukraine, you undermine deterrents in the indo pacific. the response in beijing is you cannot count on the americans as they he rresponded to the forcet was left in afghanistan and that country met its disastrous end. >> general, we appreciate your time coming to us all the way from germany. thank you. when we come back, music

legend rod stewart reportedly selling the rights to his music cat catalog. we have details after this break. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. 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.

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sold his song catalog to iconic artists group for nearly $100 million. the wall street journal report said the sale includes his interest in the publishing catalog and recorded music and name and likeness rights. maybe that hair style. at the same time, iconic said it raised more than $1 billion in new capital for future cat local investments led by private investment firm hbcs and the iconic roster rights include beach boys, cher and dean martin and linda ronstadt. i have affinity to comb my hair 1,000 different ways and it looks the same. you knew. he put it into his lyrics of the

song. ♪ if i listen long enough ♪ >> every picture tells a story. i like it. >> i like the old stuff. "maggie may." there's some good stuff. when we come back, we will dig into the new york city er suit into social media apps ov tianeen mental health. "squawk box" will be right back. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

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welcome back, everybody. new york city is suing meta, snap, tiktok and youtube, accusing the social media companies of fueling the youth mental health crisis. joining us right now is bradley tusk, the founder and ceo of tusk ventures. and, bradley what do you think?

you're somebody who worked in venture capital and in the government, and both sides of this and this has been a brewing battle for a long time. new york kind of taking the first step. do they have a case? >> yeah, i think that they do. simply because, look, even more so than being a venture capitalist or working in government and politics, i've got a 17-year-old and 15-year-old and no matter what your politics are, i don't know a single parent of at least teenagers, if not parents overall, that feel like they had any control over what their kids see on the internet and the ability to regulate it and the ability to protect their kids and that's why i think that whether it is eric adams of new york city or states flis like fa on the right or albany on the left, either way, we parents need something to help us here and i'm glad someone is doing something. >> is this an area where there really is some bipartisan support on both the right and the left because parents are so fed up? >> yeah, i mean, look at that. congress has been wildly ineffective at dealing all of

this. but if you look at the hearing they had a couple of weeks ago in washington where zuckerberg apologized, you clearly have bipartisan support on this issue. and you've seen state governments that are frustrated with washington's inability to get anything done tackle this. so i think this is one issue. by the way, i don't know why candidates for office aren't making a bigger deal about this. this is one issue where you can reach across the aisle, unite parents, socialist or maga or anything in between, if you have kids, and they're online, you're anxious about it. >> but let me point out maybe some of the political realities with this. we have spoken a lot with michael wu, the professor who used to be advising things in the white house on some of these issues. he said it was crazy to him, because you get the far left and the far right together, and they couldn't agree on the very basic issues because if you wanted to put into something to say you're not going to talk about

transgender if you're under the age of 10 or something, that the left would say no, you can't do that. if you went to the right to say something similar that offended them, they would shut it down. it is the details that would -- >> there is a provision in the 1996 communications decency act called section 230. what section 230 says you can't sue internet platforms for the content posted by users. the internet was first at its beginning, that made sense because the internet may not have grown to what it is today without it. but today, you can defame me on instagram, on twitter, i can sue you, but i can't sue mark zuckerberg, i can't sue elon musk, who most of the time there is no incentive for the platform to in any way try to moderate content and make it reasonable because what we know is human nature is that people for better or for worse tend to be more responsive to negative content than positive. and if you are a platform you make all of your money based on

advertising and all that is based on clicks, you're going to promote whatever content generates the most clicks and that's negative content. the only way they stop doing that is if they're held legally liable for what they're allowing to be posted on there. like, for example -- >> thank you. this is absolutely the common sense approach. this is the way that it works. if you're held responsible for it, you'll find a fix for it because the technology will allow you to do that if you choose to. and you're right this was done in 1996, a small fledgling industry. what concerns me now is you listen to some of the big a.i. players and it sounds like they want to be protected from copy right infringement and don't want to be held responsible. >> i think we should learn. we talk about regulating a.i. we haven't regulated internet 2.0. section 230 has been around and is still alive and well. we don't have framework for data protection or privacy or

antitrust laws are way too weak and so it is almost laughable to me when people talk about regulating a.i., like, let's first do the basics to protect kids online. there are groups on instagram, my daughter faced this, that teach young teenage girls how to cut themselves. in what world do we live in that we can't get our act together enough to regulate this, and to stop it from happening? >> thank you. this is a longer conversation, bradley. t i dn kbudi'tnow you were going to say that. i agree with you 100%. let's continue this at a later date. thank you. >> thank you. >> "squawk box" will be right back. trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab.

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good morning, everybody. more clues on the direction of the economy and the fed's rate path due today. futures are mixed ahead of the inflation data and housing starts. we're going to break down the move and what to expect in today's trading session. plus, a number of big movers on the earnings front this

morning including coinbase, roku and doordash. we'll run through the numbers. and the doj throwing a penalty flag at the proposed sports streaming platform deal between disney, fox and warner bros. discovery. now they head to the review booth for a look at pricing, negotiations and concerns for the consumer. the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc. live from the nasdaq market site in times square, i'm joe kernen with becky quick. andrew is off this morning. and here are the futures. kind of an interesting week after that big sell-off and pretty nice rebound when some stuff was a little bit cooler, like retail sales.

dow jones down 19 points, nothing to speak of really there. and you can see how strong the nasdaq is this morning, up 104 points. let's look at treasuries, they ran up a little bit, almost -- yeah, back up, 4.26, 4.30 on the ten-year at one point. oil has been, i guess you would say, locked in a trading range. hasn't -- but 77, probably getting close to the high end of that range. and then bitcoin had a good week and crypto up again this morning, just over $52,000, i think, as we'll see theoretically -- >> there it is. >> $52,260. fresh comments last night from atlanta fed president rafael bostic as we await the producer price index. senior economics reporter steve liesman joins us now. he's got a look at both. hi, steve. >> hey, good morning, becky. atlanta fed president rafael

bostic saying it is unlikely the upside surprise in the january cpi, a change in the trend of generally weak inflation. but bostic added the fed needs more time to be sure inflation is headed back to the 2% target. he said it is soon going to be time for the fed to start talking about cutting rates, but doesn't expect the rate cuts to come until the fall. something having an influence on that, after the cpi surprise this week, investors on edge over the release of the producer price index, comes at 8:30, the wholesale inflation report gives us some insight in the price changes that underlie the consumer inflation that the fed watches and also feeds into the fed's preferred consumer inflation indicator, the pce. headline, of course, cpi, seen rising .2% higher than last month. both are really low and modest, but there are some concerns.

the red sea shipping disruptions, say that ten times fast, could begin to show up in the index either this month or next, with higher shipping costs. declining retail margins are a volatile section of this report, could go either way but might push it slower this time around and jpmorgan thinking about the end of global goods deflation that kept wholesale consumer inflation at bay because it offsets higher service sector inflation. downside surprises in the past several months have led forecasters to reduce that outlook for the pce, but we have this problem now where there is a growing gap between the pci and the cpe which leads some to think the cpe could be heading higher. the wide gap between super core cpi and pce inflation likely point to a firming in the pce super core in the first half of this year. so there could be some upside movement there. as we learned tuesday with the cpi and might learn again with the ppi, the road to lower

inflation, it may be going downhill to downward slope, but as fed officials keep saying, becky, it could be a bumpy one. >> a bumpy and long road too, right, steve? >> i think it is ending up being a little longer than we hoped. i had some long conversations yesterday with some economists about seasonal adjustments and whether or not a lot of what we saw on the tuesday number was seasonal adjustments. fed officials are a little wary about talking about that because it seems like an excuse. but it does seem to be some tendency of businesses to raise prices in january, and not all of those price increases are caught by seasonal adjustments. so, there could be this upward trajectory or upward bias to prices in january, could spill into february, which means we got to wait until march, april, and may again, for those reports. so you're right on how long it is going to take. the fed doesn't want to mess this up ♪ a long and winding road ♪

>> nice, nice. good -- >> their catalog is probably worth a billion dollars. minimum. >> at least. at least. >> yeah. >> rod stewart's worth 100. what are your greatest hits worth? probably not -- >> somewhere between the two numbers. >> for more on -- thanks steve -- for more on inflation and what it could mean for the broader markets and the fed, let's bring in the former president of morgan stanley wealth management, major player at merrill lynch and everything that happened in the financial crisis, you're almost -- you're kind of a legend almost, greg. is that overstating things? >> if it is coming from you, it is not. i'll take it. >> yeah. what a week and what a period we're in right now with all the cross currents. i think you've got something that is pretty interesting that explains a lot. we can't understand how the

economy is still -- appears to be so strong after 500 basis point increase in interest rates. you think maybe 6% to 7% government spending as a percentage of gdp accounts for some of that. >> what is remarkable to me, joe, is that it doesn't get even more attention than it is. i mean, when you look at the magnitude of that relative to anything that has ever happened before, we're virtually a full employment, in the service sector, still has a shortage of workers which is part of the reason why i think inflation is stubborn from here. and then you're running deficits on top of that at 6% to 7% of gdp, which has never been seen before in a time as positive as this. really all the way back to post world war ii. that's a huge stimulus in the economy. and that's clearly a part of why it is hanging in there. and it is also a problem when you start looking at the

magnitude of the dip that we're putting on as a society. it is something that needs to be addressed by both parties. that's a major part in my eyes of why we are where we are, where the economy continues to have the strength that it does. but there are other positives we can talk about a.i. and productivity, but let's stay on fiscal for a second. >> yeah, because near term maybe it feels pretty good, but we had phil swagel on, who mentioned on the front page of the "journal" today, but talking about was it 2035, i think, might have been 2040, debt to gdp will still be 120% then. this only happened one other time where we were this high and that was after world war ii. and it is not going away. it is going to be for the next ten years, probably get even bigger. now, sooner or later, just if interest rates, especially if they go up, just interest payments, you've got nothing else you can spend any money on

and that -- it would seem to crowd out any growth in gdp, unless the productivity you're talking about is really special from a.i. >> even if it is special, though, 120%, you might sign up for now. when you look at some of the potential trends. >> 150. >> goes beyond that. >> what would that do to growth in the economy? >> let's come back to -- before i answer that, one thing that i think might make it more dramatic for the american people, the fact that interest payments on the debt in 2025 will exceed defense spending. that should get a reaction. that's just a spectacular statistic. eventually what happens in a society is that, first of all, from an economic standpoint, you're going to have to raise taxes or cut spending or both when it gets to that level. and that's obviously contraction from an economic standpoint and then if the rate of growth starts to slow, it compounds itself and there are clearly examples throughout history, countries that are still struggling today having gotten

into this. look at argentina. the united states is obviously a very different economy. the private sector here is vibrant, we continue to innovate, the positives a.i. and the technological innovation -- >> we have the reserve currency of the world. >> we still do. you put that at risk, the more you do this, there is just no question. >> without that, we're screwed. definitely. >> and what has happened in recent years is clearly people are around the world, they're looking for alternatives for the first time, right? now the reason we still have the world's reserve currency in part is there are no viable alternatives yet. if something emerges, if we're at 150 or 200% debt to gdp, and there are more viable alternatives, then -- >> it doesn't work unless you have the reserve currency. i don't know if it ever works. there are people still saying that this is fine because we got reserve currency, we can spend -- we can print money, so we can do whatever we want. >> look at the whole supply and demand part of it now with the fed.

the amount of debt we have to put out there and china pulled back, japan has pulled back as a buyer, there is a possibility on the supply and demand basis you get a more upwardly sloping yield curve because of the need to get this much paper out on a regular basis. this is a big topic. >> it puts a lot of pressure on the fed to want to cut rates too. >> it does. >> can't have the inflation problem roaring back. >> and i think they jumped the gun in december. >> jumped the gun? >> in terms of moving so quickly from raising rates to signaling that they might go to a very different posture and there may be rate cuts as early as march. the language in december was pretty dovish. and i think they did that because they clearly blew it the first time, coming out of the pandemic, where they waited too long to raise. and then had to really chase it, 5 75 basis points at a time, which helps create the situation for the banking crisis last march. they wanted to make sure they were ahead of the curve this time but jumped the gun.

>> they have a lot of things they're considering. but the data didn't -- i feel like they are data dependent. and the criticism that mohamed el-erian will suggest is they're too data dependent. they believe the data too much and they shouldn't. it is a much more difficult task than we're making it out. >> it is a much more difficult task. but they set on a path and should finish that. i think they were quick to -- they surprised everybody in december. and now they tried to talk it back. >> the market has been trying to push them. >> it has. i agree that data month over month is hard to internalize short-term movements in data and make decisions that are as fundamental as this. which is -- i think they're going to let it go. >> i think they will too. >> they're not going to do march and it may be the middle of the year before they make the first cut. >> that's a grim picture you point. and you do hold out the hope that maybe a.i. and technology could, you know, could increase productivity and maybe catch up with some of this stuff.

but do you think a.i. can be a net positive for employment? what if it is not? we're going to be a universal basic income country some day. may increase productivity, but no one is going to have a job. >> do you know, there never has been -- if you think about this, you'll agree, there never has been a major technological -- >> hasn't been? >> hasn't been employment positive. >> and it is the first one. >> i don't think so. i think if you look back at the internet, you have search optimization engineers now and specialists. in the mid-'90s, who would have thought of search optimization engineer. you have a whole set of jobs created out of the emerging technology. i think a.i. will certainly enhance productivity and probably create new jobs and industries that the three of us couldn't conceive, nobody could conceive of today. >> that's going to be a big enough positive to offset the horrific fiscal picture. >> i'm not sure. it is going to be a big positive. i would like to see that

horrific fiscal picture dealt with much better than it is right now. >> when do we need to start wore w worrying? >> near term, the united states is still the best game from an economic standpoint anywhere in the world in terms of the innovation and all the things that happen across the private sector. notice i'm leaving the public sector out. near term, still a major positive here. we're the ones who really push forward still, most of the innovations that are driving the world forward. >> just in general, are interest rates at what we would now consider a normal level? the fed, because of what we pay on our debt, it would be great to have it lower, but should it be? we go back long enough to -- we remember when it was never -- the long ball was never going under 8 or 7 or 6%. >> this was one of the things i give them credit for. they got rates -- this is

implicit in your question. they got rates back to the level where they needed to. >> money should cost something. >> it should cost something. where they are now is a better place than so many different ways across an economy in terms of allocating capital and having a price -- >> why cut now? >> that's why i think they jumped the gun in december. you have 3.7% unemployment, you still have a scarcity of workers in parts of the economy. things are going well, they seemed to have created a soft landing, i'll give them credit for that. the fiscal 6%, federal government gets credit for that as well. i think it was early -- >> it is really -- you're talking about the temper tantrum that some market players throw over these things. they weren't incredibly dovish. they said they would watch the data still. that was enough of a signal. it is like, don't give them anything that might let them think this. >> you're right, becky. they gave them a little and then -- >> the market took off. >> it took off. and since then they clearly have been pretty carefully trying to

walk it back. >> you understand why greenspan tried to say nothing ever. >> he was effective on that. that was effective. trying to -- >> i appreciate hearing from powell who will tell us things, but -- >> then he puts himself in an awkward position where he's starting to have to say something different two months later. >> be honest with me, scale of one to ten, how are you sleeping at night? >> i sleep pretty well right now. our clients are pretty comfortable. 5,000 on the s&p -- >> you may be up all night in five years from now. you may not be able to sleep at all. >> it compounds. you know the math on this. we can continue to do this, you know, a trillion and a half, 2 trillion a year but the scale of the steps necessary, you know, five and ten years, become bigger and bigger and that becomes harder and harder to -- >> i guess you're not thinking about the russian satellite that could knock out the grid with one little pulse of light. >> thinking about all those things. it is a very -- >> that is so daunting. >> dangerous world we're in. >> if i lose, just google maps,

i don't think i can live in a world without knowing where -- >> if you lose google maps for five seconds, you're, like, check the phone. everybody is immediately -- >> can you imagine if that goes down? it is going to be the walking ad. a post apocalypse -- >> where is my google maps. >> greg, thank you. good to see you. "squawk box" will be right back. it should be called wiffle tennis. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free.

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a new report from the consumer financial protection bureau out this morning finds that large banks are charging higher credit card rates than smaller banks and credit unions. according to an earlier report from the cfpb, credit card companies charge consumers $130 billion in interest and fees in 2022. joining us right now is the cfpb

director rohit chopra. thank you for coming in, rohit. what happened. what did you find? explain the numbers beneath it. >> sure, this is part of the story, i think, of the rate environment, but credit card debt now exceeds a trillion dollars. and people are paying much more and rates that are significantly higher than the fed hiked rates. and so what we're trying to do is figure out what is ways for consumers to switch, refinance, get those lower rates and we're finding many of them would be better off with newer trends or smaller players in the market. >> let me play devil's advocate on this. the idea of how big the fees are, they're coming from the big banks, i would argue that that's probably because they have a much higher portion of the population than the smaller regional banks or the credit unions. and the other thing, i don't know if this is true, are they big banks charging higher rates because they're being more careful about who they extend

money to at a point in making sure they get rates that are reflective of the risks they're taking? >> we don't see that story play out in the data when we look at losses and other key statistics. here is what's interesting. you're right, the credit card market is very, very concentrated. there is a few issuers that really control lots of it. and many consumers don't even know the ways that they can take their higher rate balance to a lower one. for the average household, let's say if they have $5,000, switching could actually save them hundreds and hundreds of dollars over the course of the year, and that adds up to billions. at the end of the day, we want to see a vigorously competitive market. >> that's what i with as going to say. it sounds like it is an education issue, convincing people they should move their funds. because you want fair and free competition. if another bank is going to give you a lower rate -- >> part of what you want to do is make sure there aren't

hurdles to refinancing. we have seen some things that give us some pause, like the way they are doing credit reporting might make it harder for consumers to get offers. >> what do you mean? >> the way it used to be in credit reporting, it would show whether you're carrying a balance or not. and often people would get offers based on that. we also see that there is new ways in which you can refinance but often there is some bureaucratic hurdles to that. >> bureaucratic hurdles from who? >> the process of moving your balance to another issuer often can lead to one big time fee up front, and sometimes credit checks and other hits. so, we are proposing better ways to accelerate using technology and data to do more open banking. allow people to switch -- >> credit checks are -- >> we want the credit reporting to be accurate so that people are getting credit for when they're paying on time. and able to translate that into

lower rates. >> what is the implication that there are airers errors that ar happening, that the big banks -- >> several years ago, it was found the credit card issuers changed the way they were credit reporting, and many people believed it was to mask who their most profitable customers were. you're right, though, we want consumers to know where else they can go. we're also trying to make it easier for banks who don't operate credit card programs to offer debit linked lines of credit, using those same debit cards, but be able to access credit and provide some competitive pressure on the big issuers. >> i'm just trying to think it through, we are more concerned about the regional and midsized banks right now than we have been a long time because of the loans that they are carrying that don't make sense in this new environment, where rates raised -- were raised very rapidly. you think commercial real estate and some of those things. is there really that much cash

available for consumers to refinance at a time when a lot of these banks have stopped lending because they're worried about being able to make the numbers that they need to do in terms of what they need? >> there is lots of different -- we say you're worried about the regional banks, those are still pretty big ones. but there is lots of smaller and medium sized ones that have not been impacted as much by some of the stress that you see in the headlines and we're looking for a lot of them to try and be able to get more customers and use technology in ways that haven't been done before. >> have those smaller banks complained about things? have the credit unions complained? >> we heard it can be tough for them to break in. there is all sorts of issues there, but really if we do a more open ecosystem for people's financial data to be able to permission it electronically, get better underwriting, people could save lots of money. >> what is the pushback you hear from the big banks when they talk about these things? >> i think they want to just simply say, look, we're offering

perks and other things. we want to make sure that if they are giving those rewards, they're actually giving them. there is not bait and switches about free airfares that don't come true. but ultimately i think they too will benefit from more players in the market. >> where do you think the consumer stands right now? because interest rates have come up and that certainly creates a bigger problem with loans and the interest rates that they're paying on their credit cards and their auto loans and their mortgages, but the consumer still looks to be pretty strong by all the data. >> still pretty strong. we're seeing, though, the number -- delinquencies have ticked up a little bit. we're seeing more consumers who are paying a lot more in interest and unable to keep up with those principle payments, they're in persistent debt. the strong labor market helps, but it is something we are very closely watching to see if things turn. and obviously how people are

faring on credit cards and what they're spending on reveals so much about where the economy is. >> rohit, thank you very much for coming in. rohit chopra. "squawk box" will be right back after a quick break. >> announcer: time now for today's aflac trivia question. what chewy candy originated in britain before being introduced in north america in 1979? here's a hint. taste the rainbow. the answer when "squawk box" returns. uh-huh... - hip-hop! - limping! mmhmm! medical bills! uh-huh! - pancakes! - cash! who pays you cash when you have medical bills? grrr! no idea. [tapping] gap! the gap left by health insurance? who pays cash to help close that gap? aflac! oh, aflac! get help with expenses health insurance doesn't cover at aflac.com pictionary?! ♪ (upbeat music) ♪ ( ♪♪ ) with the push of a button, constant contact's ai tools help you know what to say,

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>> announcer: now the answer to today's aflac trivia question. which chewy candy originated in britain before being introduced in north america in 1979? the answer, skittles. after three years of being imported to north america, skittles started being manufactured in the u.s. as well as britain. the famous slogan taste the rainbow came about in 1994. i had no idea those started out in britain. >> i knew about, like, shepherd's pie. >> that's pretty good. love skittles. >> i love them. >> culture, music, all kinds of things. >> royal family. >> yeah. let's look at some stocks to

watch. shares of coinbase are sharply higher. the company posted a profit for first time in two years, boosted by a surge in crypto prices during the fourth quarter. revenue jumped 51% to $954 million, beating estimates of $826 million. doordash shares dropping on mixed fourth quarter results. revenue rising by 27%, but they did have a loss of 39 cents and that was a bigger loss than had been expected. the company blamed weather because it cost them a lot more to pay for drivers when the weather is bad and people really want food brought to their door. and shares of roku under pressure after the company reported a larger than expected fourth quarter loss because of rising competition and lower customer spending. roku says it expects to maintain its platform growth rates for the quarter, that stock down by 16%. don't miss a cnbc exclusive interview with roku's ceo anthony wood. that's coming up at 8:15 a.m. eastern time. >> churchill.

>> wilfred frost. >> i say churchill, you say -- >> it is supposed to be post 1979 when skittles came. >> all right, margaret thatcher. >> okay. that's after. when we come back, disney, fox and warner bros. discovery could be facing an antitrust review by the department of justice. we'll talk about whether the proposed deal could hurt consumers. "squawk box" will be right back. 31% of russell 1,000 companies conduct race or ethnicity-based pay analysis, according to just capital. this type of analysis is done to manage equal pay for equal work. celebrating black heritage, i'm sharon epperson. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses

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the sports streaming alliance between disney's espn, fox and warner bros. discovery could face an antitrust review from the justice department. reports say that there are concerns that the deal could harm consumers, sports leagues

and rivals. joining us now to talk about what is at stake mosul thompson. we had -- we have been talking off camera about some of these things and people weren't listening. we got to go over all that again, do we not? >> that's all right. >> is this really going to happen? >> it is hard to tell because no one knows the details yet. the devil is in the details. we don't know what the pricing is. we don't know thestructure. we don't know what choices are going to be offered. >> we don't know the name. >> we don't know the name. >> got a good idea? did you like mine? wide world of sports? everybody laughs when i came up with that. >> it is not being used. >> not anymore. off camera, how can it not be bad for the leagues when you've got these major players, all banding together, and, you know, pulling their resources to not bid higher than they normally

would have in the past? >> well, there ray are a couple things happening here. i think the companies are betting, one, that they're going to grow the pie because they're going to be more people who are going to watch things that they wouldn't watch otherwise. now, i'm not sure the people who watch free tv are necessarily -- they haven't invested in cable now are going to be attracted by trading one bundle for another. >> snot sure if that's true. >> the second thing is are there going to be enhancements, something they would give you that they wouldn't give you otherwise? it is hard to figure out what that might be. the other way they can -- they can maintain their business is to drive their own costs down. if they have more leverage over the sports leagues, so that they can pay a lower price. >> why else would they be doing it? >> why wouldn't the sports leagues say forget it. we're going to nbc, cbs, amazon, apple, anybody else, because we don't like what you're doing?

>> what's interesting is everybody has been a little quiet. they haven't said that what they're going to do yet. i think they were caught by surprise, that -- i think they were not entirely expecting this. and they are also waiting to see well, what are the details going to look like. >> which is why they won't give the details because they don't want anybody to attack them on that front. >> that's exactly right. >> has this ever happened? >> well, it may -- it may happen in some form. one thing when you have antitrust scrutiny that it may look a lot different than how they originally pitched it. >> right. >> and the justice department hasn't even told them they're looking at it, right? we're just hearing -- they may be waiting for, as you say, for more specifics about prices and everything else, i still don't see how you do it. i told you what i said. i still don't see how you do it without the nfl games, with cbs

and nbc has. those are the ones that i want. a lot of that stuff that they're putting in there, i don't even want it, so why -- that's why it is hard for me to -- i already have major league baseball. i have all those games already. but i said to you, if they had all of march madness, and that's the only place you can see it, i would have to buy it, probably. >> you also don't know who -- you don't know who else they're talking to either. so, for example, is one of the negatives is the olympics are coming up, they're not going to provide the olympics because of nbc comcast. you don't know who is talking to comcast. you don't know if they are. i'm just saying to you that we have to see how this plays out a little. i'm sure what doj is -- they're doing, they're talking to all the potential competitors, they're talking to consumer interests, they're also talking to the leagues, to find out what are the pushes and pulls. what are the pressures that are

going to be on them. >> is there really an argument that an amazon or apple or a netflix can say, like, oh, they're beating up on us by teaming up. they have such deep pockets as it is. >> it depends on what you think your distribution model is. i think this is an attempt to distribute in a streaming platform and the entities you described already show that they have facility to reach an audience online. we don't know what that market is going to look like yet. but when you already have someone like this entity, this proposed entity, that people have already talked about controlling 60% to 80% of the sports content already, i am sure you're going to hear from amazon, you're going to hear from comcast, you're going to hear from a lot of people who don't want someone else to essentially populate the field before they even have a chance

to compete. >> and you would have thought that maybe someone would have called roger goodell before putting this together? wouldn't you think they would -- >> roger was busy last week. >> he was. trying to sign up taylor for next year. but, it just seems like it is such a sea change that you would have, i don't know, had, you know, instead of springing it on people. i'm not sure it happens. i don't -- we work for comcast, maybe i have a horse in the race or something, but do you think that this is the final three that we're talking about? it could expand at some point? >> it could. it could. we have to figure out what it is. and i don't think that we know enough about it. >> what it should be is i can watch whatever i want whenever i want. any nfl game, any -- and the content is still so valuable,

more valuable than ever, how come streaming is such a crappy business. you got -- someone wrote this is like if you strap three drunk individuals together, dhthey dot walk any straighter. >> when i heard the news, i guess my reaction might have been a little different than some. i originally thought i know the challenges each of these three entities are facing in streaming. is this real or is this the spin that they want to give to the marketplace to show that they're actually doing something? >> that's interesting. >> yeah. >> i don't know that yet until the details come out. >> that's interesting because disney is in the middle of a proxy battle too. >> right. so everybody is trying to figure out if -- they're trying to show they're exacting value from the contracts they have on sports. and if they have a better story to tell, maybe that's what they need right now. right now i don't know what it

is. but i would be interested to find out and i'm sure doj is too. >> that peacock -- i had to do premium peacock to get that one game. it works. if it is the only place i can seeing some, it is $5 a month or something, you're probably going to do it. i don't know. it is very strange. the landscape, all this has to shake out and it all has to do with how hard it is to make money in streaming. >> what you're describing is something that might be a little different. we have moved from typical cable bundles to a la carte pricing. what does that mean? does that mean you trade one bundle for another, which might be here or do you trade for a particular set of events. >> i said that for a while, that my a la carte. i'm above what my bundle was in pricing. >> i haven't thought of it from that perspective. they're weeks away from a proxy battle. >> you have to -- i grew up here

in new york, i spent a lot of time working with companies in new york, and i know what this time period looks like. and i've been watching earnings, and who has the right story and who doesn't have the right story, and so that's why i thought it was interesting timing of this, coming after the super bowl, where people are paying attention to sports and people are -- >> right after the peacock. >> that's right. >> and haven't even talked about gambling. everybody out to ght to include that's the most powerful force in sports right now. even intragame wagering is big too. >> that's so much more accessible more. that's where streaming is really important, real time information. >> i made a $3 betast lnight. $3, one bet. i didn't want to go below a certain -- very sad. thanks, mozelle. "squawk box" will be right back.

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the ftc is launching a probe of the generic drug supply chain following a shortage of medicines over the last year forcing hospital ts to ration drugs. we bring in jot gottlieb. a board member and cnbc contributor. doctor, let's dig into this a little bit. a lot of finger-pointing when it comes to why we've seen shortages of generic drugs. is the ftc on the mark here? >> look, i think the consolidated purchasing under the group pushing organization, under the goodo gopos is a fact. these drugs are produced as very low margin. medicare reimbursement driven down under medicare price krogs exasperated by the fda from taking price increases. low margin products you get consolidation and manufacturing

of these products in just a handful of manufacturers that can't invest back into the processes and you don't have first-rate processes generally in the markets. goes into shortage, sterile injectable aable drugs. the most vulnerable thing going wrong with the manufacturing process. look across the marketplace is small number of manufacturers making the drugs. the purchasing end, a very small number of gpos purchasing the drugs. that's a reaction to the fact you don't have a compo competit market on the production side. pitched as an exclusive to the "wall street journal" by the ftc. awkward. i'm not sure how serious to address the root causes. if the government really wants to address the root cause of this they need to look how they price the products and make these markets profitable so you get more manufacturers into these spaces. those manufacturers reinvest in the manufacturing processes to shore them up. 50% of all drugs going into

shortage had this country are sterile injectable drugdrugs. >> is that likely to happen? >> it's been talked about. ways to unbundle the codes in medicare to allow the codes to float so that manufacturers who come into the market can make claims around liability of their manufacturing of the quality of their products to the end purchasers, can charge more for those drugs and i think the marketplace would be willing to pay for that certainty. talked about trying to make modifications to fda allowing price increases to some markets, you have perpetual shortages and ways to create schemes where you can allow manufacturers to make limited claims around the quality of manufacturing allowing them to charge for that under medicare. might be able to put claims and labels around the manufacturing and they can get compensated for that, if they can guarantee they'll have reliable, stable supplies to people, people like gpos or hospitals's they'll be willing to pay for quality pip

o. what's happened, margins so low manufacturers couldn't invest back in manufacturing and you have outdated manufacturing facilities. doesn't work with with a sterile injectable drug. okay in a small molecule world, pill-based drugs. not a lot goes wrong. sterile injectable drugs a lot of things can go long. you want modern manufacturing facilities. increased regulation, fda, stepped in. chased more out of the market, though. >> thinking about that, baby formula. those are the type of things really do -- can you hear us now? scott? i think we just lost scott. give it three more seconds -- before we move on. aww. modern technological issues. that was dr. scott gottlieb. more to talk to him about but we'll have him back soon. still to come, roku ceo

anthony wood joins us. a loss, 50 cents a share. wider than the 52-cent, lot estimate that analysts were expecting. better than expected guidance for the current quarter, plus, inflation data and housing starts due out at 8:30 eastern time. "squawk box" will be right back. power e*trade's award-winning trading app makes trading easier.

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good morning. futures a little mixed ahead of the opening bell. five-week winning streak on the line for major averages. in focus for investors this hour at noon inflation data. bring you the producer price index right at 8:30 a.m. eastern time. and roku shares slumping on fourth quarter results. that's ahead of an exclusive interview we're going to have with cpo anthony wood as the

final hour of "squawk box" begins right now. good morning, and welcome back 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. andrew is off today. it's a friday. it's a friday ahead of a long three-day weekend. ahead of that you'll see the u.s. equity futures are mixed this morning. dow futures indicated off by about 28 points. nasdaq futures indicated up by 82 and gopt the s&p still indicateed up just over seven points. we'll see where the week shakes out. a volatile one especially looking at what's happens in treasury markets. treasury yields this morning after the cpi number came in hotter than expected earlier in the week, showed ten year at 2.75%. two years 4.6.

among top, top, today's top business stories, i should say. >> the top of the -- >> top-top. >> top-top business stories. the best ones at the top. >> and among that tippy-top list nike cutting about 2% global workforce according to published reports that are citing a company memo. nike had roughly 84,000 employees as of last may. in december unveiling plans to cut costs by $2 billion over the next three years. that stock looking like it's down by about 0.7%. shares of coinbase popping in the pre-market on fourth quarter results. the crypto exchange reporting the first profit in two years. renewed interest following ftc approval of etfs. stock up 16%. flip side, draftkings lower. loss of 10 cents a share. analysts expected a profit of 8 cents a share but draftkings

increased fiscal 2024 revenue and earnings guidance, stock off by 3.25%. over to mike santoli. you know what's happening at 8:30. >> yes. >> an important number that e were have going. five-week winning streaks on the averages, either way? >> yeah. five-week winning streak. this would be the sixth. also up this week, the 15th out of the last 16 weeks. nine-week win streak, one down and five. see what happens this week. this persistence in the rally is usually a sign of underlying strength. here's a chart of the s&p going back to middle of 2022. you can't see, tuesday's little air pocket. 1.4%. one of the reasons, again, keep pointing it out. everyone was looking for this area right above 50/50. just say, okay. what's the trend since the bear market low in october? this is at the upper edge of it. pressing, pressing, pressing on that. definitely a little bit of

speculative action going on, but we've proven the market can absorb a little lift in bond yields we've had recently. also the taking out of several projected rate cuts from what we thought a month ago. seems as if things working together pretty well. people complaining still about the unevenness in the markets. erratic action and speculative stuff. for now market's in a good spot. pullback down to 4,800 would be okay, even though decent distance down. 4%, 5%. industrial area. actually the industrial sector s&pa 500, headed in the right way. largest component of this etf is uber. not the smokestack companies you think of. eclipsed caterpillar because uber had such a strong one. in general decent macro message. final point here, cboe, the big,

of course, options exchange company. one of the strongest stocks in the general financial area, you can see here. 46%. one year. better than all the other types of exchanges. better than all the brokerage firms. the action in stock options has been frenzied once again and benefiting from a lot of the general turnover there. obviously, retail investors getting into the act. seems like it's a very high-energy market now. that can overshoot. see how it goes. >> all right, mike. thanks. talked about -- a little less than a half hour before we get that inflation data out. thanks. all right. for more on the markets now following the 11th record close of the year, the very short year at this point for the s&p 500 we bring in elizabeth burton strategist at goldman sachs asset management. thanks for coming in. >> thanks for having me. >> you see new records, keep seeing a trend mike pointed to.

if you were doing this as a portfolio manager what would you think? >> i think i would still be concerned about risk on the upside in rates. i think i would want to stay invested in equities but thinking more about diversifying my portfolio. one thing we've talked to client a lot about, last year saying think about your geographic diversification. this year you want to look across your entire portfolio and what sectors you're in. >> what sectors are most at risk? the ones risen the fastest with technology or something else? >> risk not the word going for. more concentration. if you look at the flows and hedge funds, flows in general, you see a lot of money moving into the exact same things. right? >> yes. >> right? >> most of them really high technology. i think 25%. >> yes. done well. makes sense, but when you talk about looking at other countries you think might be interested, like india. you might want to think how much of that is also exposed. in exacting sectors.

okay to take a lot of concentration in sectors, companies, managers and bets pre-covid when we had bull market in equities, hard to find additional sources of return. right now you need to be more aware diversifying your portfolio and less concentrated. >> into what? diversifying into what sectors look like they don't have enough money? >> i think looking beyond just tech as the long-term winner. one area that might be a security, right? cybersecurity. how many spam techs emails in a week? food security, water security. national security. >> all of these headlines on the geopolitical front weigh on you? is that kind of the message? >> they do. i think it's one of -- as an investors one of the hardest things to hedge against. how do you hedge against multiple countries and multiple issue world wide? it's very difficult. probably have to put on multiple hedges and something we talk a lot to clients about lately.

in the last two quarters topic of hedging has come up quite substantially. while it might about good idea and timing right innian to think about some of those things based on volatility levels, it's easier to think about diversifying across your entire portfolio. right? if you want to get in really good shape only one component of it is doing push-ups. right? got to think of other ways to get there. >> what has the conversation with clients been this week after that hotter than expected cpi number and what it means for what the fed might do next? >> actually pretty muted, surprisingly. i think they're more concerned the terminal rate than whether or not the fed is going to cut by 25 basis points in march versus may. we think -- they will start in may, although there's risk around that number. more concerned about the long term. where companies are thinking their costs will come in for long-term r & d projects, focused on this and we think by

end of the year. >> could be scary, if it was bad. not saying it's going to be. i think people wrote off that cpi sort of an outlier, or seasonal. people raise prices january 1st for the year. no one really thinks that that's going to be the first of a long list of higher inflation numbers, i don't think. they don't believe it. today, if it was really bad today that could -- back worrying about no cuts. >> i think people are going to tell whatever story they want to tell. right? cpi is made up of a lot of different numbers. you have to look at a lot different components and trajectory of each component over time. there were seasonal factors to be sure. just this one month i don't think is enough to decide what to do in march or may. we have to see trends wh. >> what would be really troubling today or not so troubling in ppi? look at services? what's do we look at in ppi to

determine whether it's another hot number, or that there was nothing to worry about with the cpi? >> again, back to -- i don't know this is one number no matter what comes out of it. worrying one way or the other. broader, where we're going. hearing from earnings, in those reports. what they signal to us and what ceos are saying, take it from there. we've seen in those, slowing down in labor practices. by the way, isn't, labor hiring isn't a bad thing. have to close a little of the job workers' cap. how to use a.i. and supply chains. supply chains story not as bad as one you thinks giving shipping issues. a relatively low percentage of the cost in terms of prices. >> consumer is very strong by most measures. you hear a few things here and there. travel companies this week warned that the revenge travel looks like it's slowing down. we just had the head of the consumer financial -- cfpb on

saying that looking at $1 trillion in credit card debt for consumers at this point. do any of those things concern you, or just back to normalization? >> investors are talking a lot about it. we have a lot of conversations with folks about the consumer. i would say if the investor i'm speaking with believes a recession coming, that's one of the things they're pointing to, but the situation isn't as bad as it may seem. a lot of data points you have to look at. for one, misery index worse 81% of the time since 1970s. right? >> okay. >> we'll see what michigan says. but also household net worth in the 96 percentile. pretty good. the company level, think of cost of capital, yes higher now than 2022, but not at high as in 2009 or 2012. might be sustainable levels. >> you're overall view for this year would be, what? just in terms of where the market's headed? >> i don't have euphoria for it but there are pockets -- i think we will see returns abav korb.

stay invested asset class. most return about cash. i would get invested. u.s. equity markets look relatively like a pretty good place to be. >> elizabeth, thank you. >> thanks for having me. coming up an interview on streaming, that you don't want to miss. not going to stream it, really. it's about streaming, i think. right? it's not on streaming? is streaming in it? streaming? c cnbc, watching. and joining us anthony wood. company stock dropping in the pre-market on new results and outlooks ay tuned. you're watching "squawk box" on cnbc.

welcome back to "squawk box." watching the shares of innvidia

and just passed amazon and today shares high again. loop capital giving stock a new street-high price target of $1,200. wow. oppenheimer also raising price target to $850 from $650. that's good. already $80 above price target and reiterating an outperform rating, but $1,200. another -- more than -- another 50%. right? $1,200 price target, at 739? street high. highest on the street. $1,200. >> pretty high. >> figure out the market cap. well above 2, right? >> yeah. >> $2 trillion. >> meantime, shares of company roku falling after the company post add larger than expected fourth quarter loss. julia boorstin joins us with a special guest. julia, good morning.

>> good morning, to you, becky. right. joined by anthony wood ceo of roku. anthony, thanks for joining us this morning. >> thanks. hi, julia. >> anthony, your stock sin declg by double-digit percentages not just on the earnings report showing a bigger loss than anticipated but warnings about the year ahead. warned about the macro environment. what are your biggest concerns? what are you seeing? >> first of all i'll say we had a really good quarter, a great quarter a great year. i'm super dconfident in our business. more confident than ever. passed 80 million new active accounts. added 10 million active accounts pat passed streaming ours, revenue quarter at double digits. had a great quarter, and well positioned for the future. >> but the stock down about 17% right now pre-market.

address the concerns of investors who are a part of this sell-off right now? we've seen a decline in average revenue per user. what's behind it that decline and what's it going to take to turn around and start accelerating your growth rate again? >> well, like i said, we had a good quarter. double-digit growth. the forecast, outlook, guidance for next quarter, similar growth. and i can -- if i unpack that a little bit. our business consists of -- our platform business, what our investors are primarily focused on. comes from advertising activities, streaming service distribution activities on the platform. look at them separately. advertising, seeing goodgrowth on the video side of our business, probably the most important part of our business. so seeing good growth there and that growth starting to continue to accelerate. then look at the streaming service distribution where we

distribute streaming services on our platform, scenario doing well for us, but last year it was very strong, because we saw the industry, for example, raising prices, and so that's the comparables year over year tricky. a part of our business called media and entertainment, a focus on helping media companies promote their services on our platform. something we're really good at. probably the industry leader in that. a strong business for us, but in challenge and pressure the last fo four quarters and will continue to be probably the rest of this year. that's the root causes of that, that there were a lot of streaming services that launched that spent a lot of money promoting services historically. at unsustainable levels. seeing that come back to more sustainable levels. overall, one of the core drivers of our business,ed video ad side of our business, we're seeing big growth in, and just -- we're

super well positioned in the industry with 80 million active accounts. the nuk one streaming o.s. is the united states the last five years and just a lot of opportunity to continue to drive, monetization growth on the platform and an area me and the team are spending a lot of time on and this year more focused on that than last year. last year operation, which we made great progress on. >> in terms of macro uncertainty you mentioned in the earnings release as well as on the call is that about the advertising market, and when do you see that turning around? >> well, yeah. i guess we're talking there about the ad, the overall video ad business, and the video ad business is, it's, it was in sort of -- some people call it ad recession or ad winter but starting to rebound and we see that. that's driving support driver growth for our business, but it's not even. there's categories that are still depressed. some are rebounding. that's what we're talking about. think about the video ad

business overall. look at streaming, like, over a $60 billion a year business. if you look at sort of the dollars versus hours, 60% of viewing hours is on streaming now for consumers. only 30% of ad dollars moved to streaming. it's a big opportunity for us as dollars continue to move over to streaming. >> you mention the role you play distributing these apps. a lot of conversation about this new sports streaming joint venture between three of the media giants. what does that kind of new entry into the space mean for your business? a good thing? perhaps a new advertiser? or more consolidation in this space maybe mean fewer streaming services for you to be selling on your platform? >> no. the launch of a new sports streamingselves is great for roku. i mean, we're the number one streaming platform in the united states and going to be a, will be a big partner. probably biggest for

distributing that service. we have a lot of tools to help do that. more consumers, consumer drives competition and good for consumers, it's good for us. also just think about where the industry's at now is starting to mature. seeing that with the abot tiers on major streams services. a sign they're focusing on mainstream consumers. seeing more sports services. one of the last areas, you know, in nutrition tv bundle sort of something they held. sports now moving all over to streaming. i think this is all a sign that the maturing of the streaming industry, which, again, it's good. one of the biggest factors to drive our growth those advertising dollars still on linear tv even though viewers moved to streaming, and this maturation will move faster with the ad dollars as well. >> you mentioned ad supported video on demand and ad

streaming. we saw amazon recently launched its ad supported version of its prime nvidia app and netflix pushing their growth and those platforms. is that more competition for your own ad business? >> like i said, what we're seeing is a maturation of the industry. these are the norm in television. ad video. consumers like it, lowers the cost of content, cost of services. so more, i think, again, more ad-supported tiers is a sign the business ask maturing and will accelerate lowering prices and accelerate in the years moving to streaming accelerating the overall ad streaming. also, i guess another thing worth mentioning is in terms, if you have an ad-supported tier you're very focused and en engagement. we're a leader in the tools to build engagement.

just very focused on, user innerspace. find something to watch and watch ad-supported consent. >> one quick question. your stock took a hit walmart would by video. w -of-vizio. what would that impact have on you? >> that's speculation. i can't talk about that specifically. with 80 million active accounts, number one streaming platform in the u.s. last five years and importantly, why do we have 80 million accounts? great product. viewers love it. a very strong brand. viewers love the simplicity of roku. often multiple devices in a household. put it all together, also strong retail distribution both inside the u.s. and outside the u.s. all of that along with our focus on streaming our innovation, you know, our scale, our loyalty of customers our brand, all give me

a lot of confidence we'll continue to go to distribution of our platform and 10 million new active accounts and add a lot more this year as well. >> certainly a lot of movement pnd news in your space. appreciate you joining us and hope you'll be back soon. anthony wood, ceo of roku. becky, back to you. >> thank you very much, julia. when we come back, breaking inflation and housing data. january's look at the producer price index, which is way more important after that hotter than expected consumer price data we got earlier in the week. also getting hsi soungtarts. "squawk box" will be right back. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

in prison russian opposition politician alexei navalny died

age 47 according to russian state news agency tass. citing the prison service of it's region were navalny had been serving a sentence, one of russian president vladimir putin's most vocal critics. serving a 19-year jail term, an arctic penal colony and accusations flying fast and furious what actually happened here. but -- unclear at this point, but just saying, it wasn't natural -- you know. as you'd expect, hearing it wasn't necessarily natural causes. up next, breaking inflation and housing data plus instant rkeaioctn. stay tuned. you're watching "squawk box" on cnbc. is a spa. an office. hi! hello! a cinema. so automated.

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welcome back 20 "squawk box." rick santelli breaking news of the day. start with housing starts. 1 million 331,000. a big miss. down nearly 15%. weakest rate since august of '23 last year and on permits 1 million 470. down about 1.5% also a miss. now, for the money numbers.

our january readout producer price index. inflation as the whole sale level. headline numbered expected up 0.1%, it's up 0.3%. the hottest going back to up 0.4%, september of last year. now, there was a revision, of course. we all know. ppi had benchmark revisions just like cpi. last month is down 0.2%. down 0.2%. look at x food and energy known at core expected up 0.1. buckle up! up half of 1%. up 0.5%, half of 1%. hottest. go back a bit. hottest since -- well, march of '22, although a couple other up 0.5s in april and may of '22. also we had revision down 0.1 last month that was already out. x food energy and trade, wow! up 0.6%.

0.6% up. equals jan of '23 to find a higher one. have to go to the high-water mark. the high-water mark for this series, march of '22. look at final demand year over year, up 0.9. also hotter than expected. in the rearview mirror is 1%. up 0.9. the warmest. obviously, well, since1%. finally, look at the core year over year up 2%. following 1.7. 2%. equals november last year. october of last year was 2.3, and finally, x food, energy and trade on the y, year over year, 2.6. equal to the revision last month's 2.6. obviously hotter than expected. interest rates moved up along the entire curve. two-year note yields 462now 467 and 467 is up almost 20 basis

points on the week. look at a ten year, currently trading 431. was trading 427. 431, would represent up 13 basis points on the week for a ten-year. we see there has been curve movement. obviously the pre-opening equities are not very happy about these numbers. joe, back to you. . all right. rick, stay with us. for more on the news data welcome joe lavorgna and nikko securities chief economist. and from the roosevelt institute, sara malic, chief investment officer and our own steve liesman. steve, i want to immediately go to you, because i have questions immediately for you, even though it was in the teleprompter i go to you first. i want you to know i was going to you first anyway. begged top of the 8:00. please, tell me, someone we had on, if this will confirm the cpi

in some of our worst years what numbers would you be talking about that make it seem like maybe that was more than just a one-off earlier this week? what are they, steve? what's in these numbers that are pretty scary or hot j.? is it labor? where is it coming from. >> joe, even if you didn't come to me first i was going to say it's a little unclear to me what the source is of this. i was just in the process of pegging a few locations which were kind of weird. capital equipment up 0.6. government equipment up 0.5. demand for services up 0.6. that looks like a potential perpetrator here of this higher than expected number. but there's also a lot of negative. negatives on the energy side. negatives in a lot of different places. things that are under control. it's not entirely clear to me where this came from, joe. we've had other times when the

culprit was this really weird trade services number. other things like to. throw it back to you. have a conversation. if i find the culprit i'm going to nail it. >> keep looking. does this just confirm maybe it's a seasonal one-off along with the cpi or is this an additional data point that things are hotter than we thought? >> it confirms, in my mind, that people ought to chill about the fed doing earlier than expected rate cuts. i think the fed's idea is, we need to watch this stuff. let it work through the system. perhaps it's a one-off beginning of the year coming through. i didn't see it in transportation, which i thought i might see it in there. down 0.4. energy down 1.7. got to find the culprit on this one. i think the story is going to be, though, that this is going to feed into the pce in two weeks and work it higher not lower. >> yeah. did you think the ppi was going to make us think twice about the

cpi or thought add to -- >> think twice about the cpi only because i believe there's a season many ial issue. last eight, nine years, a seasonality, whereby every january percentage increase is bigger and bigger every year. now we see seasonally adjusted number look high as we did last month. ppi is kind of confirming this. look at manufacturing. continues to weaken. commodity softens. importing deflation from china. the rents th, they were slow to come down but it's plunging. recordality of construction last year. yes. this, to me is a one-off. people have their hair on fire. inflation's moving down. it doesn't move in a straight line, and i think we're going to get to april, may and see inflation back moving to 2%. >> even if you do get back to april, may and think the fed will want to see more than a

couple months of that trend before they feel comfortable -- >> maybe. here's the thing. like, our forecast for the core pce, .26. change at 2%. six-month rate of change, 22. 12 month rate 27. if the economy starts to soften given where real rates are. i think the fed raised rates too much. that's going to cut. steve may disagree. i believe the election is an issue. last thing the fed wants to do cut rates sandwiched between two debates in july. rationale to cut go sooner and go where we think the puck is going. not necessarily -- the puck. >> oh, okay. sorry. i thought you said -- >> come on. he wouldn't do that. >> sound like that? >> no. i no where you were going. >> where the "puck" are we going? after that -- do you agree with joe, just confirms that the cpi

was hot, but now we just know it's a one-off hot? it's not an additional hot data point? >> there's no need to think that inflation is resurging in anyway. know this look at seasonal adjustment, cpi. in the adjusted data. inflation growth always highest first quarter relative to other quarters. this is while it came above target, shouldn't say that. this is really in line with what generally happens year after year and, in fact, look at the january figures, increases well in line with what actually happeneds pre-pandemic. in terms the source of this. we know quite well that housing inflation is lagging. so in terms of the recent declines we've actually seen in housing costs, that's not going to show up until, like, six months from now. there really is no need to

panic. we shouldn't believe inflation is esurusurping. we're only a post to reach a 2% target. >> and sara, not last, certainly not least, but what about stocks? what do you think investors, whatshould we take from this? at least got to think that rate cuts aren't going to be as soon as we thought or as many? >> i'm going to take the other side versus the other guests, joe. layer this number on to the hot cpi number and retail sales, came in at the worst january level in the past ten years. i think investors have something to worry about. within ppi focused on three areas that translate into pce. the fed's barometer, health care, airfares and financial services. health care 18% of pce. airfare volatile up strongly in pci strong in ppi when equities

rally which they have. also focus on micro. nvidia reports next week. they need to beat revenues by 1 to 2 billion and raise guidance. last quarter, higher hurdle. nvidia went down a few purse. rewind a year nvidia went up about 15%. what they do next week could be the next catalyst that takes the market higher or lower. >> rick and steve. rick, you've had a chance to think about all of these thing. will you tell me what's going on and maybe, i don't know, steve will probably disagree with you. >> first of all, nobody knows the future. all right? let's get that straight. all of these annualized three and six month, saying all along that's a treacherous path to follow. because every month it's going to change. here's the key. first of all, january is not the highest read. right? in 2021 high read was july. in 2022 it was march. in 2021 it was november.

by a significant margin over january. >> told you. >> and if you look at -- look at all of the seasonalities, we've revised, you know, i have big charts all over the room of all of the number. that's what i look at to give you. big boards. i had to re-do them there's been so many revisions. why? because they want to get the seasonalities better. so i understand that january might be a little freaky sometimes, but it certainly doesn't become a standout. if this number was half or much less than half of the current inflation rates, would all of the people talking about, it's one-off, would they say it's a one-off cooling of inflation? there's a huge bias here. okay? inflation is running hotter. growth is slowing. that is the definition of stagflation. whether it actually happens or not, nobody on this panel, nobody at the fed and nobody in d.c. knows for sure. three months ago they thought all of these number was going to be significantly smaller and they were wrong.

>> all right. steve, you didn't think that talking about some of the other months being hottest of the year that's not logical? in this content? >> just so people know, i think my mic was open. i was commenting to myself about that. >> no. i liked it. >> trouble when that happens. [ laughter ] >> i know. politicians do, too. i think using 21 and '22, a weird pandemic year. >> is it possible this is -- >> always an asasterisk, what about it, steve? >> pandemic. big asterisk. >> big at testerisk. ppi. you and becky had a lot of fun of that. >> i'm maturing. >> looking at some weird stuff. maybe you can help me out on this. finished consumer foods up 7.9%.

i don't know why that is. cap, trade of government purchase capital equipment up 3.7%. export trade. this is this weird thing the government introduced when it redid the ppi several years ago about the margin. how much companies were making as an input to wholesale costs. i do not walk away with this number at first glance to say we have an inflation problem and a reaccelerating inflation problem. i walk away from the number saying we got to think about this. i think rick is right about the bias. i have the bias, inflation was coming down. i look at expectation it will continue to come down. analyzing the number you must fight against the bias and open to the possibility there is something of a reacceleration however push back a little on rick. we know that january is a tough month. price increases come through. we know the seasonal adjustments

are not entirely capable of countering those price increases. back to you, joe. >> the point rick was making about, the trends. i was talking about the adjusted numbers. problem, when you do seasonal adjustment statisticians wait the last couple of years most prevalently or most importantly. >> right. >> we know with the pandemic that screwed up a lot of different things and normal patterns kind of went away. year over year trends in inflation continue to move lower. this is key. look at one inflation peaked, headline peaked june of '22. the corps peaked september '22. moved lower. monetary policy's gotten tighter. unless there's a food or oil shock from here, there's no reason to think that these trends won't generally continue. what's changed that hasn't eased yet? so i think these inflation trends especially look globally, what's happening our asia, china, with those economies in recession, we're opening up a lot of excess capacity.

>> and sorry. only got to you one time. something really quick? >> absolutely. quickly. one thing to keep in mind seal all of these inflation figures. reaching one year consecutive real wage growth. inflation, again, going above expectations this past month we know wages are starting to -- >> sara, feeling okay? a lot of hair burning? i hate the smell of hair on fire. >> i think -- fed's pretty clear they need to focus on broad disinflation. we're not seeing that yet. i take the under on rate cuts this year and maybe say even less than three. you see less rate than usual in an election year. >> okay. good. all right. thank you all. i know. it's hard to get enough information with just a six box. we prefer nine or even 12. done that in the past. >> i think we did a pretty good job with six. >> hard with six.

can't get real information unless it's seven or eight. thank you, thank you all. >> thank you. up next, digging deeper into late effort housing number with our very own diana olick and the chief economist from realtor.com. stay tuned. "squawk box" will be right back. ♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪

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numbers we just got. diana olick, what happened? >> start with the hot ppi number putting mortgage rates way over 7% saw a 30-year fix after the cpi was hotter than expected and staid over 7%. expect it to go much higher today. watching that. according to news daily. housing starts, total starts down 15% month to month. a massive miss. a lot of that was in multifamily. multifamily we know is pulling back, because we have a record number of new units coming on the market this year, but i want to break out single family. down 4.7% month to month. that's interesting, because these are numbers that would be coming off a huge new-home sales number in december. december when mortgage rates pulled back significantly. factor around 6.5%. saw a big bump in sales. expectations, might translate into starts. ship say weather-related issue. these numbers are seasonally adjusted. it's january. we know what happens in january

weatherwise. again a big disappoint pulling back says builders are concerned about mortgage rates moving higher. taylor morrison earnings this week and the ceo said face significant headwinds from rising interest rates. that was now even when rates pulled back in those rates are really pushing into the builder numbers. interesting, though, i would say on building permits, which are an indicator of future construction, we did see single family permits move up 1.4% month to month, and they're up significantly year over year. housing starts for single family, again, up significantly year over year, so we're doing better than we have been. we still have a huge lack of homes for sale on the existing side. builders should be profiting from that. they should be building more from that, but again, with higher interest rates, remember, builders can buy down those interest rates. that's how they have been doing pretty well. but again, they're going to be facing more costs themselves with higher inflation, with their costs of land, labor, materials, et cetera, so, again,

it's like taylor morrison said, a lot of headwinds on the interest rates, even though builders should be sitting in the sweet spot. becky? >> thank you very much. for more on the housing market, we want to bring in danielle hale, realtor.com chief economist. danielle, let's start with where diana just started. rates above 7% and no relief from the data we got today. what does that mean? >> we've seen -- we had seen rates come down from near 8% in october, and the -- that dropped to almost a percentage point below their peaks, had been a nice boost for buyers. in fact, on the $400,000 lone loan, that would have translated into a savings of $277 a month. that was a nice boost for the housing market and helped propel some stronger numbers for the end of the year. we'll see stronger numbers in the early months of 2024 as we see existing home sales pick up from that drop in interest rates, but as interest rates

tick back up over concerns about reigniting inflation, that is going to be a headwind for the housing market. i do think we'll see sales react, probably not in the early months, which are based on mortgage rates that were lower at the end of 2023, but it is something that both builders and realtors are going to pay attention to going forward. >> how big is the deficit, just in terms of how much demand there is for housing and how many houses there are available? >> we talked about single family starts coming down. when we look at the housing market right now, it is a very undersupplied housing market. it's been ten years in the making, and over those ten years, we've seen a cumulative deficit between 2 and 6 million homes. those are homes that should have been built relative to household formation that were not built. it's a massive problem, a multiyear problem to build out of, especially when you consider that we're building about 1 to 1.5 million homes every year. it's going to take several years to build out of that problem, and there is plenty more room for construction in today's housing market.

>> the biggest problem is higher interest rates at this point, not just because it makes it less profitable for the builders, but because they have their own costs they're dealing with as well, in terms of what it costs them to borrow the money to buy the land to build the house? >> higher interest rates create headwinds for buyers and financing and makes it more difficult for builders to bid that construction. it's going to be telling whether this is just a one-off increase in inflation or whether this is truly the beginning of a new trend. i think the fed's wait and see approach is going to be the right one. i do expect a lot of factors represent temporary aberrations. we looked at rental data. we've seen those rents, asking rents for the market, decline for several months in a row now. it hasn't yet been picked up in the shelter inflation index, but we do expect that manifest later this year. so -- and that's a big driver of the inflation numbers that we've seen, so i think there's improvement in the pipeline. we just have to wait to see it. >> danielle, thank you.

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joining us to talk markets as we get close to the opening bell, managing partner at d.c. l.a. and a cnbc contributor. we had retail sales, kind of weak. i'm not ready to say stagflation necessarily, like rick, but it certainly has the feelings more than last week that that might be something that we're looking

at, sirat, maybe a little bit of a slower economy, but persistent inflation, which is like the worst of both worlds. >> i mean, if that is the case, yes. i mean, we're definitely in for higher for longer for interest rates, and i think on the economy side, it will be interesting to see, because if things do slow down, what will be price takers, and what companies will be able to keep on raising prices and will wage increases still happen? i think there's going to be a little bit of a lag effect on that as well. but in terms of the stock market, i think it will make things very interesting because what you really want to do is say, what are the alternatives for investors? so, high yields means interest rates are higher, we can buy more bonds, so there's an alternative. secular growth stories are going to be really important, so i think that's where some of the capital is going to flow. so, i do think there will be opportunities, especially if rates stay at this level for a while longer. >> because for a while, when we

were -- fed was, mission accomplished, victory lap, everything else, it was like, wow, look at the gdp, and look at the labor market every first friday of every month. it's so good. and inflation's coming down. it looks like we have the best of both worlds. inflation's coming down, the economy's staying strong. all we need is a week, and suddenly, we're back to the flip side, which is, you know, one is like goldilocks. the other is stagflation. and it doesn't mean you need to change everything, but it feels a little bit different than it did when we were hitting all new highs and, you know, those were -- that was a good place to be. a strong economy and falling right? that was the exact scenario for soft landing. now we're in either no landing or hard landing, and the market needs to factor that in. so, i do think, again, we need to wait for more data if things are slowing down.

it doesn't mean they're coming to a halt, joe. it just means the growth that we had that had so much juice into it because of what we had done with interest rates before is now catching up. i do think -- and look, the fed has the lever. inflation, at some point, comes down, and demand stops increasing, and that was the whole idea. we wanted supply up, which is what's happened, and if demand slows down, you could see that inflation, but 2% is going to be a tough number, joe. i think that's -- given what's happened during covid -- >> well, we might be going up now. we might not just be going to 2% slower, we might be going up. we hear about mortgage rates. so, you could see some tough, you know, tough factors for the economy combined with precipitously high inflation, and that's not good. you know what, though? as bad as all that is, when you have a three-day weekend where monday's off, the next week is only a four-day week, but just as we like to pay it forward, don't we, becky?

it's the best way to have a holiday. the next week is -- >> is shorter than this week. >> right. because we put in the five days already. at the paid it forward, sirat. thank you. >> thank you, sir. >> all right, have a great weekend. and make sure -- oh my god. i've got six seconds. make sure you join us on tuesday. >> have a great weekend. >> good weekend. "squawk on the street" is next. ♪ good friday morning, welcome to "squawk on the street," i'm david faber with sara eisen and mike santoli. we're at post nine of the new york stock exchange. carl and jim have the morning off. let's give you a look at futures. of course, we get started with the final day of trading. you can see we are set up for, i don't know, usually i defer to somebody else to tell me even what that looks like. mike, you want to? >> it's flattish on the s&p. >> there grow. >> nasdaq has a beat. >> this morning begins with