get to the airport wednesday, february 21st, apparently it's 2024 i'll put that in my brain. "squawk box" begins right now. good morning, welcome to "squawk box" here at market square andrew ross sorkin and joe kernen becky is out, so it's the boys alone once again opening up, we'll talk about how the dow may be changing soon but the dow off by 55 points nasdaq down 55 points as well. the s&p off by about 6 points. treasury yields, 4.260, the 2-year at 5.89 the crypto prices, pulling back below the 52,000 level

ee thers either dropping too. >> tom lecoming in i've seen the man. we talked about equities and bitcoin. >> he's very bullish that that's an under statement oh threw out a number and he said, oh, no, it could be much higher than that. >> what a tease you are. what a tease tom lee coming up. amazon joining the dow, going to replace walgreen, which was by far the most impactful. amazon is going to start on monday

it helps make up for system of the consumer exposure which was lost by walmart's three for one stock split effective monday as we pointed out wednesday, that will be from an all-time high walmart's split. amazon is $167 there are still some hard to defend dow components. >> cbc bcnbc.com profits you think about how few companies represent them. >> some of them are -- maybe we need if it was simple.

they would look at it. >> meantime we're watching shares of uber that stock will join the dow, transport replacing jetblue. the index committee saying the change will add exposure to the rideshare committee. it was prompted by the low weight of less than 1.5 -- i would should say one half of one percentage point now you have uber in there, a company that's, i think -- >> a lot more than it was. shares of palo alto, shares of revenues are plunging. the current quarter guidance also came in below expectations as the company shifted its strategy to focus on what piece known as platform migration and activating ai leadership the company ceo said on the call they're facing spending fatigue.

they said customers are refining that aidsing incremental products didn't necessarily drive a better security outcome for them we just had him on in davos and pressed him on it, and he said not to worry. >> not to worry. >> when we were talking about it, therer with two ways at looking at revenue, and his cfo had a way of saying, look, it looks like we're not getting as many orders, but it's because of this, this, and this, and actually it's going to pay off, and this would seem to indicate that maybe that was, you know, payin painting a little more positive picture. maybe they didn't know, maybe they did all of a sudden when you walk in with a market loss, we'll talk about this exact issue

i don't know, na kesh. you know companies have to put the best face onthings and there are nuances. you can't say, oh, orders are down there are certain times depending on -- >> -- when orders are down. >> and when their customers have certain concerns, whether they're post-pandemic or whatever they're looking at. they're the reason ordering patterns might shift a little. it double necessarily mean there's a problem. >> talk about ordering patterns, just to reference it, bloomberg, $ 1$160 billion plmarket cap. >> that guy doing all right. >> doing all right more than all right. >> you oar right we're watching the shares of toll brothers. they beat estimates, sending a strong start to the spring

selling season as a result, it's raising its full year guidance. >> and hsbc shares are falling take a look after the near profit mittsssed the target. it's taking a write-down on its communications with china. that's interesting the company's ceo described it as a technical adjustment. that write-down was among the items to plunge the bank's fourth quarter pretax profits by 80%. you're watching that stock falling this morning, up by 8%. >> you're your own man you're a thinker too especially about anti-trufts. >> okay. i don't know where this is going. >> you immediately came up with

the notion that competition between mastercard and visa could end up being a positive thing. >> yeah. >> one of your -- a person that you know well that we have on a lot, senator warren, boilerplate. i'm not worried about her. i know where she's going to to come down at when you see something like that, does it make you think maybe progressives are out of their mind and know nothing about it >> i don't know. i thought that my -- >> you see though. you see though you've seen other stuff she said. >> i knew my take from an antitrust world was a bit of a contrarian take. >> were you able to walk into another job? >> no murmurs, no. >> you're known as a

right-winger. >> capitalist. i read this -- >> i was just said it. andrew said it yesterday as plain as the nose on your face, how this works and right out of the box, oh, this is going to hurts, blah, blah, blah. same old crap. the stuff she says about buybacks and cooperman and elon musk elon musk paid more taxes than her entire friggin' state basically almost, and we hear that he's just this fat cat who doesn't pay his fair share what's she been paying what enshe flipped those houses >> i'm not here to defend elon musk or the other. the thing that she does -- we talked about it. what i don't like is the personalizing.

she uses these examples symbolically of people she says, yes, that the policy should change. and i think the last time we had her on, she was actually coming to some form of agreement about potentially with you. >> no, no, no, no, no. then i've got to revisit my -- i've gotto revisit my opinion. >> no, not on a welts tax, but to think about the way a lot of people are structuring their finances or such that they're basically borrowing against their assets. >> nobody likes that nobody likes that. that's working the system. it 's legal. >> it's legal and working the system. >> i totally defend nikki haley staying in the race. there is no -- it's like the lincoln project. but this is the most scathing i've ever read. >> do you want to put it up so

people know what you're talking about? >> that he had a chance. >> an argument for squandering the chance. >> worst ever. shares of -- do we digress a little when you -- >> when's the last time you heard that you know, intuitive machines jump for the third straits trading session after the company's first space mission completed further mile stoeps as it approached the moon the mission launched on a spacex rocket last week and has since completed seven of the 16 milestones the company had identified as key to the mission's success and they're expecting to enter lunar yore bot today. it's on track to make its landing at 5:49 p.m. eastern

time that's tomorrow. i'll tell you, one of the things that -- this is unmanned it's amazing we can do all these things what happened with neil armstrong, there was no place to put that thing down. there was no flat area, and he had like eight seconds or there wasn't going to be enough fuel to get back up, and he just slowly, you know, figured it out. i mean men like that, men and women like that, you know, and they say age is sage i'm not saying that about anyone but having seen that benefits me having seen that live inspires me you were a glimmer in your grandparents' eyes not even your father was born yet. >> yes, barely. >> thank you. coming up when we return --

>> age and sage. >> we get you ready for today's big minutes and sky-high expectations for nvidia results due out after the "closing bell." there are a lot of viewers and investors weighing the numbers and we're going to talk market strategy with tom lee right after this at the table. do not go anywhere >> announcer: this cnbc program sponsored by baird visit bairdifference.com rock? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

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welcome back to "squawk box. on today's squawk planner, app data is coming up at 7:00 a.m. eastern time we'll get the latest on the fed minutes at 2:00 p.m. 2:00 a.m. would be a little earl after today's "closing bell," we'll get quarterly results from nvidia, wall street setting the bar sky-high, setting a seven-fold increase to more than triple, to $20.6 billion. stock pulled back in yesterday's session. the worst day in four months people are worried. >> kind of cool, though, because the way the stock, you know -- the way it got to 1.7, you look

at the market. those are the kinds of numbers you would expect the revenue number. our next guest, who is tom lee, says he expects stocks to draw down at some point in the first half, but hasn't seen the signs of near term talks let's bring in tom lee, head of research, a cnbc contributor i referenced our o conversation. we weren't in makeup per se. sometimes we talk in makeup. this happened to be outside of the makeup room. >> yes. >> but we're still talking i like it better when we're sitting down i feel like it stimulates me you said immediately there's some grab power left it's not over yet, although, there are some signs of fatigue. >> yes we've rallied 16 weeks, up 23%

the last two sort of long rallies were 16 and 19 weeks and 21, 22%. so it's mature but we don't see the signs of the top normally like the margin that is only 700 billion it was 900 billion in 2021 and there's still 6 trillionion in cash on the sidelines. even with the earnings, i sigh the stock weak in the report, which makes me think stock could surprise to the upside that could help us get more juice on the upside from here. >> it's interesting. one of your calls which -- and i remember at the time, look, we stopped doing that it was like a weekly number. last week we did not get friendly inflation numbers do you think the trend is intact >> yes, i think there are some

difficult seasonal january looked like a hot cpi number next month will reverse some of that and it willput investors on the bond market thinking inflation is falling again. >> if you hadn't sworn off making a call on where the s&p would be in a week, that would be a good time to do it, but don't. >> yes i've promised myself not to do it. >> okay. can i ask one question >> i think there's going to be a moment where investors have to get cautious, but it's a maturing rally i don't think this is -- >> i guess the question is for those folks sitting around with cash right now, everyone is trying to figure out, i have little cash, if they have cash, what am i supposed to do are they supposed to wait for some kind of grand moment to put

in the market and, of course, timing is always sort of a challenging thing to do. are they supposed to put it in bitcoin and it will get there in a second or what will they be doing with money if you knew things would get worse, not better >> we know markets have a pretty good runway from here. i don't think investors should be sitting on cash if they had and missed a lot of this 24% move, i think they need to dollar cost average put a little bit on weakness this has been kind of a weak week and then be patient i think patient money is the money that's been working the last few years. >> you don't think that the fed needs to stay tighter longer because inflation is still a major problem. you think we will get some rate cuts this year. >> yes and, you know, i think again, i know the statistics didn't show up, but the job market has

weakened a lot one of the big drivers for the past eight months has been auto insurance. i'm not sure they get auto insurance rates down it just has to play out. housing is starting to come out the other side. >> are you looking at a soft landing or is it getting harder? >> i think the economy is actually stabilizing and if we get lower interest rates, it stabilizes. >> do you use bitcoin? i have no idea what it's trading on the etf, that was something. you said positive things about that maybe more printing. man, i was throwing out a number you said it might be strong for the remainder of the year. >> yeah. >> i said 75 what did you say to me >> i think it's -- it could be as high as 150,000 this year. >> so double what i thought. >> 150,000

so we're tripling at this point. >> yeah, because you've got demand improving with the etf. and if monetary policy eases, which we expect, that's supportish of risk assets. bitcoin is holding up. that's why i don't think it will draw down soon it's been rallying the last couple of weeks. >> wow. >> you think that's in the bank? >> those are big numbers i don't know. >> are you in the -- let's go back are you in the camp of this is -- >> yeah, it is sound money and it's proving to be useful. >> proving to be useful how? it's very useful if you're an investor right now. >> yes it's been a great store value, a good risk asset. it's also incredibly secure. there hasn't been been a single

fraudulent effort since inception. i don't think any bank can say that 60% are suspicious, 0 percent on the -- >> what did gel singer say the other day? >> it's one piece of software. i would trust the proof. >> here's the flip side of that. you've heard from the jamie die mons of the world. >> despite how good you said the blockchain is to find where things are, it is the medium of choice for ransomware. i mean you can go through the

list of sort of terrible illegal behavior people in that world seem to love bitcoin what does that say about this? >> well, pirates were the first people that liked goldening so we knew gold was a good store value. but equally important -- the dollar is used in more illicit activity. >> 99.9. >> joe's made that point before. you ascribe nothing to the idea that bitcoin is a beloved currency for people who love to do nefarious things. >> here's a way to think of it criminals don't trust anybody. they trust everything. >> it's like saying you follow the technology that starts with p-o-r-n, right

like videotapes and this and that. >> it's like blaming the object itself for the any nairous behavior when it's humans using it could you imagine the world of pain management without strong pain medicine? you take a truck or utility. >> this is the difference. i will take gentzler's side. a car has immense value to society, economic value to society. >> why does it resonate with you -- >> you could argue strong i le knoll has a value -- >> in the history of the world, if 99% of the nefarious activities were used in dollars, why don't you have the same negative viewpoint toward the

dollar >> because it has a great utility in the same way a car does. >> just because you don't appreciate the bitcoin doesn't mean others -- >> the only people who appreciate it is you. >> that's not true >> you appreciate the store value. store value, it would stay one price. >> no, no. gold was $300 not too long ago now $2,000 it's not the same. it goes up as you prinlt more money. >> it turned out to be a great investment for those investing in it. i'm saying long term if we're all -- >> tom, you're here. explain how it's sound money it's sound money. >> i understand -- it's not that i don't understand conceptually what's going on here. >> why do you say it has no use then other than nefarious use -- >> no, no.

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welcome back to "squawk box. ceo of citi jane glazer got a pay bump they cut 20,000 jobs in a bid to boost returns. i imagine some of those 20,000 people who were let go are looking at that payday thinking some of that should be theirs, right? >> that's what happens >> i'm just sayingthat's the sort of psyche. >> i don't know what we're paying juan soto i don't know what we're pay the good left-handers. it's far more than $20 million i don't know what skalsbcarboroi

making in her next marvel movie. i think she's doing something more important she's got the employees, the customers, right that's a lot of responsibility think if you screw up and you're working at account united or boeing. coming up, a new report says russia could launch a space age nuke as early as this year we'll talk with a security expert next. as we head to break, we look at yesterday's winners and losers . >> announcer: executive edge is sponsored by at&t business next-level moments need the next-level network

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good morning and welcome back to squc box live from the market in times square yesterday closed on the dow. most of the morning we were down in triple digits at one point we were positive. finally the dow closed a little bit lower, and similar to the reaction we've seen since that

cpi number and ppi number from tom lee. he expects the positive on momentum on inflation to continue at some point in in the year the u.s. has told allies that russia could deploy a nuclear weapon or mock head into space according to a bloomberg report it's been developing space-age capability to knock out satellites using such a warhead would violate the 1967 outer space treaty which russia did actually sign at the time i don't know i don't even think i would want to fly on a russian airliner, so i don't know how great i feel about deploying technology to deploy nuclear weapons in space? does that make you feel good >> not good. >> you're still worried about the oceans and stuff it's not just the nuclear stuff.

there's a lot of things to worry about. insurance rates in florida where they keep putting -- everybody has to live on the ocean. >> you one dur der why it would be an issue. a news alert of o washington the biden administration will invest $20 billion over the next five years to improve cargo ports. 80% of the cranes are made in china and use chinese software there's concern they could be used in chinese surveillance. russia causing disruptions in the red sea our next guest used as secretary of defense for russia and ukraine in the u.s >> you want to go extra it to space, evelyn? there's a lot of questions about what the russians are doing in

space. is there some kind of nuclear war head they're trying to put in space and what are they thinking and what should we be thinking >> like joe, i wouldn't get on an arrow flight airplane either, but when it comes to space, vladimir putin puts his best engineers to the task. what we're hearing causes me a lot of concerns. i worked the russian portfolio at the pentagon at the time. we were already worried about what they were doing, putting nuclear weapons into space they could blind us not just with the military but civilian life as well we have no way to counter this sort of attack and we don't know what the likely, pun intended, fallout would be >> why would it be nuclear

why not something else >> with anuclear explosion you could get a detonation that would down a larger amount of satellites than you could take out with a regular weapon. like a carpet bottom, in effect. that's probably a technology they became interested in as they saw the proliferation of smaller satellites that we in the u.s. have developed and deployed they're trying to have a countermilitary effect to the small satellites. >> dare i ask, there's nothing we can do on the other side of this >> i think we could stop that. >> what would our deterrence be? typically i we build knew cheer bombs and somebody else builds nuclear bombs, and the fact that both of us have them does something to prevent them from going off. >> the first thing you do is try

to prevent the administration from doing this. it would be alarming to the indians, the chinese they're trying to put diplomatic pressure on russia to stop because it seems they have not yet deployed this capability and maybe it's not fully tested. that's the first step. if that doesn't work, we know from historywe try to counter with technology. it would take the arms race and the dangerous nuclear standoff we have with russia, china, and others to space. >> it's going to sound almost callus because it's a business question who would be most at risk. if you were a business perp or investor thinking about this >> well, of course, any

satellite company working with the united states. so if you are host to the u.s. government covert or open u.s. government, you know, satellite, i think that would be the first target for the russians. but, again, these commercial satellites, you want me to say elon musk, don't you >> i don't want you to say anything i thought you might say starlink and other companies who have put things into space. >> i don't want to name names, but, you know, clearly any company that's hosting or deploying satellites for the u.s. government is at risk, and sta starlink, frankly, is at risk, because the rushes are deeply upset over giving aid to

ukrainians. let me just ask. in terms of of a response or a reaction or seeing what the reaction is from the white house, we've also seen some of what might be a reaction if the former president trump or the president -- how do you think that were to change the dynamics if it would? >> i can't understand score how danks it would be to have president trump back in the white house. leaving my politics aside, i run the mccain institute we have on the board mark esper. he was secretary of defense under president trump. he has warned the nation that this man is not worthy of -- i mean he's incapable of looking out for the u.s.'s interest. in fact, it's the contrary he would put the united states in a really dangerous position because he either doesn't understand the threats posed by russia or he doesn't care. >> evelyn, it's a pronger conversation come on back we'll see you very, ryve soon.

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a new report from the senate finance committee is blasting the special insurance for the wealthy. eamon javers joins us with that story. hey, amon. >> good morning, joe the finance committee is releasing its results on the private insurance policies in which the democratic leadership say they're being used by the very reach to avoid taxes more so than as insurance against neuter investors it found that the companies offered about 3,000 policies at the end of 2022 that had a face value of approximately $40 billion, and the committee says the so-called ppli policies are

a way to avoid disclosing their hedge fund they don't show up on a return the system is possible because the tax code generally offers favorable tax rules to life insurance products to help americans in their time of neechltd death benefits are exclusive and life insurance premiums can be invests on a tax-free basis but the committee argues that the insurance plan looks more like investment funds than practices. they offer other options now, joe, the committee says ppli policies can be used to purchase a business. all of that is currently legal under the current season, but current chair ron wyden says it's a tax dodge and he's

working to curb the use of these plans and strengthening the requirements around them back to you. >> that's been around for a long time a is private placement different than that? if you have kids, you want to figure out a way, if you're lucky enough to have a lot to leave your kids, you'd like to figure out a way to have them cover the estate taxes that's what a lot of these things are for >> the big difference is the large amounts of money you have to have in order to get into these programs you're talking people investing millions they're expensive. wham widen and the committee staff are saying is is it's an end run that's only available to the super rich, not to everyday americans. >> but totally legal.

>> totally legal, yes. >> and widen is in a position to write legislation and change things get cracking, ron. >> we'll see if he can get the votes for it. >> and actually doing something in the senate. i mean, that's not going to happen ea eamon, thanks. "squawk box" will be right back.

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welcome back to "squawk box. american airlines is raising checked bag fees for the first time since 2018. here's what it is going to cost you guys for domestic flights, the first bag is now $35 when booked in advance or $40 at the airport check-in, but that's not the only change. the airline also limiting some travel agency bookings from earning miles. joining us now, oscar munoz, former united airlines ceo andc.

good morning to you. everybody looks at the additional prices and the prices going up on bags and say, i'm being -- i'm being charged for every little thing is this a good thing is this a bad thing? does this mean that ticket prices are going to stay lower or just means that everything is going up >> well, ticket prices will stay with what the market demands it is a competitive world. but with the broader aspect of that, i think the other headline is probably a little bit more misleading than you might think. yes, the baggage fees are increasing, but it is really this move around distribution costs that airlines pay to these management companies, these tmcs, and i think whenat you really see underneath this is this drive to try to get people to book directly with american, rather than the third parties where distribution costs, commissions, fees are being paid you definitely see a broader cost play and a slight revenue

increase it feels a little consultancy to me and i think the headline is a bad one because, you know, there is people reading usa today that will say look what american is doing. and it gives the industry a bad reputation, just like where you went with regards to that. prices overall will stay what the market demands this is a bit of a low period, so it is a tough time for everyone to raise prices. >> you called it a lull period, is it a lull period for business travelers, which is where the real margin is for most airlines these days or a lull -- a lull period in the back of the bus if you will what are you seeing? >> the dynamic there has changed a lot since covid. business travel has not fully returned people are opting for these virtual ways of communicating much more. the lull is mostly in what we call the leader market, while there is some travel for spring break and such upcoming, just a little quiet period after the end of the year. it is seasonal in that regard.

business travel continues to increase slightly, but, again, a lot less than it used to be. the industry is facing this revenue issue and trying to figure out better and better ways to attract customers to travel and travel more frequently. >> in terms of costs, costs of airlines have gone up quite materially where do you see profits and which airlines, if you were to stack rank them at this point, as an investment case, how would you do it? >> the investment case is difficult. over the long run we have seen markets having run a company and probably we had a nice 50-plus percent run in our price when we were there, but it is so volatile with so many external factors. but with regard to profitability, i think we talked about it over time, this concept of cost convergence, the low cost carriers that had low costs are being pressured by these contracts with labor, so you see

this cost convergence and you're seeing a couple of airlines sort of come out of it in a more stable way and those would be biased united, but delta as well you see those two. you haven't seen them comment. i think american's move is a bold one, but a lot of people are going to wait and see whether or not people follow in that regard. this industry is not for the feint hearted. there is always issues surrounding it and profitability continues to be a journey. >> the last piece for you, we had sarah nelson on the broadcast the last week and she made the argument that her attendants were being paid too little and that the union has done remarkable things on behalf of the flight attendants. i made a point that interestingly at least when you look at all the rankings of all the airlines, the one that seems to come out on top, not just in terms of profits, but in terms of customer numbers, satisfaction and the like, happy

employees, is delta. which is not unionized and why do you think that is >> did she answer that question? because that's a tough one >> she had her own answer, but what would be yours. >> no, listen, the cards have been dealt the way they have for those of us that have unions, it is imperative that we negotiate in good faith. a fair day's work for a fair day's pay has been my motto and the union's motto. not just having to define what a fair day and fair amount of work is so for the ones that have unions, it is imperative that we work through this, to get the adequate amount of compensation for the work that they do. with regards to the difference between delta and the non-unionized nature, it has been a topic discussed greatly, and more power to them for being able to do that. but, again, it is -- it is an academic question in that regard

because there is no going back over the ones that have unions >> nice to see you, sir. we're coming right back with two big hours ahead. trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights. trade brilliantly with schwab.

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only from nature's bounty. futures slipping this morning after a down day yesterday. the fed will be a focus for investors today along with earnings from nvidia, which are due out after the bell the last of the magnificent seven to report. and a lot riding on the numbers, a preview is straight ahead. a trove of art, fashion and objects from sir elton john set to be auctioned off by christie's we have got a preview of what's being offered and what the rocket man's collection could fetch. all this as 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 along with andrew ross sorkin, becky is off today. futures kind of look very similar to what we saw at the close yesterday. we lost 50 or 60 points on the dow. down 15, nasdaq down 78. a little bit of a consolidation period since the hot inflation numbers last week. treasuries you saw the yield back up sharply last week. but stabilizing now, 4.26% now on the ten-year. >> okay. let's talk about the minutes for the last fomc meeting because they're going to be released today at 2:00 p.m. eastern time.

senior economics reporter steve liesman joining us right now, though, with a preview what are you thinking we're going to be seeing here? >> we're looking for clues at just how patient the fed is willing to be in cutting rates there is a debate out there about whether it has taken the wrong signal from that january bump up in inflation in fact, ian shepherdson writes we think the fed is making a mistake of wanting near certainty before acting but the inherent long lags in monetary policy makes that risky. since the numbers and the powell pushback at the last fed meeting, the expected number of quarter point rate cuts has fallen from nearly 7 to about 4 now. futures are pricing in fewer and also later rate cuts the probability of a may cut declined from what was a near certainty to just around 37% now. you need to get to july to get to that certainty. but a number of economists see

that january inflation is related to one off items, particularly price hikes that happened at the beginning of the year but aren't picked up by seasonal adjustment there is a call out there for fed chair powell to be a little less data dependent and maybe use a little more common sense here markets will also scrutinize the minutes for any hint about ending quantitative tightening, the reduction on the fed's balance sheet. it has come down by $1.4 trillion from the peak but it is now still $3.4 trillion above the prepandemic level. expectations in the cnbc fed survey, that's for the one from january, see the fed ending qt in november. so on both rates and the balance sheet, markets are going to have to wait until the summer or event fall for the fed to back off its restrictive policy and that comes after one bad month of numbers andrew >> well, you want to give us -- you don't want to tell us what your question is going to be for the man of the hour, do you? >> it is the minutes today

so we don't get a press conference, but if i had a question, you know, i would wonder how he's taking the january number why he's -- why it looks like all of the fed folks said, you know what, one bad month and we're ready to abandon ship here i think there is a good argument here that the fed should look through this number. now, it has time to do so, which means there could be a back end trade here i think tom lee was kind of suggesting it, maybe the fed comes back around to not early cuts, but maybe earlier cuts than it is currently priced in, maybe something, may could still be in play here and you can see that on the numbers, andrew. really you got to look through the february enflinflation numbt see if it backs off the spike in january. i think it was mohammad yesterday was talking about being less data dependent and using more common sense. >> steve liesman in washington this morning, that's why i thought maybe you would get a question in. but you're right, today is not

that day thank you. >> let's talk macro economics. joining us now, peter krause, chairman and ceo of aperture investors. this year you're fundamentally feeling okay about the market, which is different than probably the beginning of last year >> yeah, i was -- i think we changed our view i changed my view. i think the economy weathered significant increases in interest rates jobs, you know, kept on getting printed. we continued to have growth both in corporate earnings, and in individual compensation. and people kept on spending. and, you know, one of the things i think i missed a bit is the level of interest rates on mortgages in the economy i think 62% of homeowners have mortgage rates that are somewhere in the 3.4%, fixed, for 30 years so you think about that, that

leaves you with a very interesting transmission mechanism or lack thereof for the fed. when mortgages had variable rates, rates went up immediately. now rates are fixed and fixed at a very low level consumers have more discretionary income and they're working and they have jobs and, you know, things are actually pretty reasonable yes, inflation went up very quickly and caused a big change between their discretionary income and the cost of things so they don't feel as good. but look, that also creates increases in labor rates and that's why the fed is having a harder time bringing rates down because wages are not coming down. and they're unlikely to come down until there is a recession and i don't see a recession in the next 12 months. >> a longer process for the fed to get back to 2%. >> yeah. >> but not -- i think implicit in some of the stuff i'm reading in your comments is that having

normalized interest rates isn't necessarily a bad thing. >> no, that's the whole point. we live for many, many years with a 5% to 6% ten-year and the stock market went up 10% a year and there is nothing wrong with that. >> it is nice when you can -- when money costs something and then you set prices and no what things are worth instead of this weird -- >> we haven't had a particularly rational capital allocation process for probably ten years after the global financial crisis, the fed -- the central banks around the world really drove liquidity to unusually high levels, interest rates very low, and they did that to actually forestall a depression. and we could have had one. and we didn't, but the result of that was significantly different capital allocation than what we would normally have. and now we're trying to get back to a rational capital allocation there are going to be capital structures out there in real and companies where there is some

kind of restructuring. that doesn't mean the world is going to fall apart. but we have to get back to rational interest rate levels and rational capital allocation, which we haven't had >> along with your being a little bit more friendly toward the markets, you like small caps not everyone does. >> i do like small caps. >> most people are running from -- >> they are running from small caps i do like them we had an unusually high increase in interest rates that has had a negative effect on the smaller companies in the united states frankly around the world europe as well and when there is interest rates that moderate, small caps are going to fly and they're significantly undervalued and people should look at their portfolios and make sure they got some allocation to it. because they're very under allocated. >> you're moving your business somewhat more towards the big institutions and private investing. >> we are.

we have einvvolved a bit i thought for a while that it was possible to actually reach the retail markets with this very low base fee and charge for performance. but it was challenging distributors found it challenging, and so frankly we just decided that we built it for a institution to begin with. we were trying to give the broader marketplace an opportunity to buy those kinds of products, but institutions still have significant interest, but you had to have a track record of three years or longer to sell the institutions and now we do. >> get andrew as a client now if you're going for the bigger -- >> well, he's on my list. >> he's now probably selling index -- you know, bitcoin indexes as well. >> we're not doing that. >> not touching it >> no, we're not touching bitcoin. >> when your customers say, your clients say, hey, should we have any exposure to this stuff, what do you tell them

don't look at me when you answer the question, look at him. >> bitcoin, specifically, i look at bitcoin a little like gold. i don't understand it, i don't understand where the value is, there is a scarcity question, people invest in it because they think the scarcity will continue and it will grow i just am unconvinced by that. if i don't understand it, i just don't invest in it. >> you believe gold scarcity -- >> i don't invest in that either. >> you understand why it had value for 5,000 years or no? >> yeah, i agree, but you can't determine the manner in which that value goes up or down. >> from stock to flow, there is a way you can do it depending how much gold is produced every year and how much is -- >> i think there is not a lot of correlation between the supply of gold coming out of the ground and what happens to the price. >> an ounce of gold is worth what a good suit would cost. also relationship to oil so it would be worth about a third of what your suit would cost. >> when i got married, what i paid for gold on a per ounce

basis was -- is as much as i could buy a car for. that's not the case today. it is a lot cheaper today. >> the fancy glasses cost. >> the fancy glasses >> before, i could buy a whole car. >> okay, peter, thank you. well, this is me, nvidia set to report after the bell, the magnificent -- the last one of the magnificent seven to report this quarter occongfftsor day since october ahead of earnings. we'll preview the numbers, tell you what wall street is expecting. we're coming right back. a car is a car... >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. hi! hello! a cinema. so automated. yes, the definition of a car changes... but one thing stays the same. it's a mercedes-benz.

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nvidia shares up about 40% so far this year it is february i got that right >> we are in the month of february.

>> and ahead of its quarterly results after the bell today, it is a leap year, you know, i get an extra day the expectations are sky high for one of the world's most valuable public companies. stock fell nearly 4.5% yesterday, its worst day in several months, shedding $78 billion in market cap. the largest daily loss in its history. and joining us now, with what to expect, is joseph moore, morgan stanley semiconductor analyst. and we made the point earlier, joe, that the results we're expecting today are the kind of results that would explain the movement in the stock over the last couple of years i mean, it's phenomenal. >> yeah, i think that's right. we're wrestling with very high expectations we early in the year started to react to some of the supply chain data points showing very strong in demand and i think more recently the stock responded pretty well to a lot

of the hyperscale commentary pointing to the magnitude of investments in a.i. and things like that. it should be a very good quarter. and as you said, it has been selling off a little bit into it as there is anxiety about the expectations but certainly results are expected to be very strong >> we were -- actually i guess off camera talking about how to value anything and it is -- especially in the stock market, it is difficult, i don't envy anyone trying to value nvidia, regardless of what they say today. how much of the -- the price you're seeing right there are expectations for how a.i. progresses over the next two or three years? a lot of the $700 is -- has to do with that, doesn't it >> it does though i would say we have seen more multiple expansion in other names associated with a.i. in my coverage nvidia, the numbers have been very strong, when this surge in a.i. started we were earning less than a dollar a share

my expectation is we're guiding to north of $5 we're guiding to a $20 run rate. and it is still quite strong and we still have a product cycle ahead of us. so, you know, valuation to me is less of a challenge and the durability of this strength is more of a challenge. because we have seen this significant surge in investments, obviously stay strong throughout the near term here the question is do we see follow through where we see growth next year, and i think that's a little trickier to figure out. you see the breadth of applications, the surprising number of companies developing these models, venture capital interests in developing these a.i. models, all of that is difficult to predict in 2025 that's an element that nvidia will probably sound pretty good with this product cycle ahead of us, but can't give you a lot of visibility beyond the semiconductor normal visibility. we need to hear that from customers. that's why the stock moves more in between the quarters when we

hear from some of the hyperscalers how significant each these workloads are the quarter should be very good. it should make feel good about what they can see. the real question is what happens after that >> i want to know what you think the three-year compound growth rate is for both earnings and revenue. and would you even try to do that >> well, from here, it can be challenging. we're modeling 2025, calendar '25 as a plateau year. we have core data center about flat that's after a pretty steep ramp up this year we're getting upward revision from where we are now. i really have no idea if that's the right place to be. i think flat to me is a little bit more -- could be up, could be down. this is still semiconductors, still probably a plateau that is going to happen. but within that flat there is a lot of growth still. there is growth in the per workload spending on training.

there is growth in inference, there is growth in some of the networking businesses. so, you know there is an underlying growth rate that is pretty strong. i would like to model it conservatively that after a boom like this that we have a little bit of a flat spot next year it is hard to tell i think that's why the stock is keying off of commentary from hyperscalers that this seems durable maybe beyond 2024. i would say beyond 2025 we'll continue to grow this company is in a strong position within a.i. and there is a lot of desire to find alternatives and look at stocks that haven't had the same move, the reality is the vast majority of a.i. investment has been to benefit this company i think a three-year, we don't venture out that far, but we'll grow double digits beyond the plateau, i'm banking on a plateau in 2025. >> you don't see any competition at this point. you can't even name anyone >> there is a lot of competition for individual workloads

amd, intel, marvel, all have seats at the table we find that there is opportunity here and there for those alternatives, but the vast majority of the opportunity wants to be in multicloud, wants to have the ability to use the same ecosystem everywhere and that all comes back to nvidia. i wouldn't say there is no competition. there is a lot of desire to have alternatives, but they're in a strong position. and with this product cycle, it will be very difficult to continue to compete because they're moving the bar forward quite a bit in the second half >> i think about the -- what we call the world wide web, and then the internet and how the world looks versus prior to that, i find it hard to believe anything can have that type of -- to change things that fundamentally with how we do everything you tell me a.i. is going to be

as powerful, ten times as powerful, not as powerful? what could you say about that ten years from now >> i think it has the power to be transformative. morgan stanley, we're looking how this affects a broad range of businesses. and maybe less so than the internet or the mobile internet, but certainly very strong. what i would also say is when you looked at those prior big tectonic shifts, semiconductors tend to do very well early you tend to see those things and i think that's where right now nvidia is the primary company making money in all of this. over time you'll see that value transfer a little bit from semiconductors to systems to services that are being offered for a.i. but right now, it is very hard to ignore a.i., semiconductors and a.i. because a lot of the foundation that is being paid for the next decade is being built on data silicon.

it is a strong opportunity near term i think the semiconductor impact will be felt early and that's why we felt like you need to be in these names now >> okay. all right. it is hard to get really wrap your mind around things like this when we're at this point, joe. but we'll be watching. thank you. we'll have you back. thank you. >> thank you >> okay. coming up, a read on the housing market futures right now, take a look, we're in the red this morning. 53 points off on the dow now 55 nasdaq looking to open down about 75 points. the s&p 500 looking to open off about 80.5 points. we're coming back with more "squawk box" right after this. >> announcer: time now for today's aflac trivia question. who is the entrepreneur that created the spanx brand? 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?

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the weekly report on mortgage applications and rates is out let's get to diana olick with the numbers. good morning, diana. >> good morning, joe yeah, mortgage rates surged back over 7% last week. that's the highest level since early september, early december. and it hit mortgage demand hard. total application val plue plund 10.6%. the average rate on the 30-year fixed increased to 7.06% from 6.87% for loans with 20% down. applications to refinance dropped 11% last week, compared with the previous week and we're just 0.1% higher than the same week a year ago, one year ago the 30-year fixed was 6.62%. refi volume was higher than year ago levels, but the latest jump in rates clearly made a refinance just not worth it for most borrowers applications for a mortgage to buy a home fell 10% for the week

and were 13% lower than the same week a year ago. affordability is already pretty awful with home prices surging due to still tight supply and more demand coming into the spring market. and higher rates caused the adjustable rate mortgage, the arm share of activity, to rise to 7.4% of total applications. arms offered lower interest rates, but are considered a little more risky because they adjust higher or lower after a fixed period speaking of the spring market, presidents' day weekend is considered the unofficial start. this rate level is going to hurt strong quarterly earnings yesterday for toll brothers, but during the brief rate dip in december doug yearly said in the release they saw strong demand in january, but, again, january didn't see a seven handle on that rate. joe? >> we were talking about it earlier, that -- do you know peter krause said talking about how many people are not affected by this because they were smart enough to get long-term fixed rates, so it makes the fed's job

harder, maybe one of the best ways to slow the economy is from the housing market but it hasn't affected as many people as you would have thought maybe. >> yeah, but i mean, you have to have a housing trade some people have to move, they have to move for jobs, they want to upsize for family, downsize because maybe they're baby boomers. you can't stop the housing market because 90% have a 30-year fixed. the market needs to keep churning that's how the economy grows when we buy and sell new homes and existing homes >> pretty amazing moves since one or two inflation reports can psychologically get people worried again i think. but we'll see. >> look, 7% is hard to take, especially when you have something like 3%. it keeps not only buyers off the market, but keeps sellers off the market and you have to remember there are some people who might be able to afford that 7% rate, but they might not qualify it because banks are pretty tight now in lending.

>> okay. all right, thanks, diana we'll see you later. coming up, super communicators unite. in this era of political polarization, aided by technology, that reshapes what it means to connect, we're going to get practical advice this morning that can help people communicate with each other and there is some really interesting tidbits in this that you need to know best-selling author charles duhigg will be with us and christie's holding an auction for items from rocket man himself, sir elton john, we're intogog head down the yellow brick road with the ceo of christie's. all of that in a bit do not go anywhere

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welcome back to "squawk box. look at the futures now, we're off this morning about 52 points as we opened up right about now. down on the dow. nasdaq down 75 points. looking at s&p 500 looking to open off 8 points. our next guest is the author of the new book out this week "super communicators: how to unlock the secret language of connection." charles duhigg is also the author of "power of habits."

>> i would like for you to stop some of the habits i've seen that you -- you have a book about how you can do that? he's got quite a few. >> you know what charles has, though, this book, which is fascinating and teaches you how to communicate, how people can learn from each other, how to make people feel -- >> do i have to listen to them >> well, i'm going to give you a copy of this book. >> i have a copy at home i thought about it for my son, yes, i think -- >> young people, this is critical, right? being able to communicate is a leader's job that's what you do as a ceo. >> you have found these little, dare i say -- i don't want to say tricks, but things that you can practically do to communicate more effectively what is the single biggest one >> the single biggest thing you can do, you're right, supercommunication is a set of skills that anyone can learn the single biggest thing is to ask more questions in particular to ask a special kind of a question, a deep question if i bump into you and you say,

i'm a journalist, i can say, oh, how did you decide to become a journalist what is your favorite part of your job now i'm asking you to talk about something real about yourself and that's when we start to connect with each other. >> a lot of it i also think, and reading your book, is not just -- we ask questions professionally all three of us. >> but i notknow the answers to most of the questions i'm asking >> it is actually about listening. >> absolutely. >> talk about that it is not just listening to yourself, it is showing the other person you're listening. >> that's right. >> pretending. >> when we're having really hard conversations, there is always -- really any kind of big conversation, there is something in the back of our head that -- a product of evolution that says is this person actually listening to me or waiting their turn to speak. so if we prove that we're listening and there is a technique known as looping for understanding, they teach you harvard and stanford -- >> yeah, yeah, yeah, let me ask you -- >> looping for understanding >> you repeat back what you heard in your own words and ask

them if you got it right studies have shown is when you do this, it transforms conversations because that other person believes you're listening to them, you've proved it and that makes them want to listen to you in return >> okay, what about challenging confrontational conversations. >> yeah, those are tough, right? and in the book we tell the story of netflix where there was an internal civil war over race. and it would have been very normal for the company to say, look, this doesn't belong at the office, leave politics at home they said the opposite they said, look, let's acknowledge our differences, but also acknowledge all of our similarities, we're all people who are members of our community, we care about this company, and it is only by bringing everyone to the table and giving them a voice and showing that we listen to each other that you resolve issues like that. that's exactly right, in conflicts we have to do the same thing. >> here is a harder one. we're doing this face to face. the whole world has moved to this >> yes. >> and it is not just facetime, it is on text, it is on slack,

it is on email, and so often it feels to me like people read things into your messages. right? >> absolutely. absolutely this happens all the time. and it is oftentimes when we make a mistake, it is because we forget that different forms of communication have different rules. so, when telephones first became popular, there was a theory that nobody would be able to have real conversations on them because they couldn't see each other. but we had conversations for seven hours a night. and our kids, i'm sure this is true of your kids, when they're on the phones, they understand that a text is different from an emoji is different from an email is different from a phone call for those of us who are a little bit old, we forget there are differences and we have to remind ourselves of those rules. >> what are the rules? because also people try to read in -- i wouldn't say the best of intentions, they often read in the worst of intentions. >> i think that's right. i think that's right you migh sarcastic and you can hear the

sarcasm in your head but they don't get it when they receive it there is a bunch of studies looking at particular online discussions and found if just one person started saying please and thank you, the entire conversation got better, no matter how big it was. and so a rule for being online, is you say please and thank you. you overemphasize the pliolitens and underemphasize the sarcasm. >> unfortunately, when i'm sarcastic, it doesn't have to be electronically people still don't get it half the time >> well, so, i have a question for you, because my guess is what is happening there, take laughter 80% of the time when people laugh in a conversation, it is not in response to anything funny, it is because they're showing they want to connect with you. >> so you're asking me -- >> so my question -- >> i'm giving it back to me like you told me do. >> you're doing a great job. >> i understand how you feel, my clients have felt that way the in the past, but they have found

that -- how does that sound? i got a lot of -- >> i would keep my cash with you. >> is 10,000 a good start or 20,000, would that be better for you? >> let me take a check and write it right now. >> i did think about how to win friends and influence people as -- you've read that. >> of course, of course. >> and communicating and -- but a lot of that, i'll tell you what -- i don't want to lessen what you're doing, but it kind of seems like sometimes you're steering people where you want them to go for your own purposes. >> so, what's happened in the last ten years is we're living through this golden age of understanding communication. because of advances in neural imaging and data collection, we understand how communication happens in a way that back during that time of -- they didn't know. and one thing we learned is that their authenticity is incredibly important. if i try to manipulate you in a conversation, maybe it will work for a couple of minutes, but

you're going to see through it, right? we need to engage in this reciprocal authenticity. when i say something real to you, something honest, your instinct is to say something honest back. without that, we probably won't connect. >> who is the best communicator you know >> the best communicator i know is a guy named greg nelson let me ask you this, friends of mine when you had a bad day and want to call someone who you know will make you feel better, does that person pop into your mind do you know who you would call yeah probably most of the people watching do too. that person for you is a super communicator and you're probably a super communicator back to them some people can do this consistently some people can connect with almost anyone. >> do you think that's an authentic thing? the people who you say are the true super communicators, is it something -- is it this talent, this skill, a -- when i started even introducing you, i said there are tricks, because i read the book, i'm, like, okay, little -- i'm going to try some of these tricks on you, but to call them tricks may be unfair. >> i think it is i think it is. it is like saying that, you

know, recognizing the alphabet is a trick to learn to read. you actually know how to read, right? and when you do these skills, when you just practiced this, our brains are designed to make them into habits, and they become real. because when i prove to you i'm listening, it doesn't mean i'm not listening, actually have to listen to you to prove to you that i got -- >> i'm not going to sell the book for charles, but i'll say this, i don't know if you ever have -- you don't have this, but if you have an insecurity about going up to somebody and talking to somebody, i thought that there were lessons in this book about that, that would make you feel better and more secure in actually approaching other people. >> absolutely. there was a great study done by harvard business school where they told students they were going to have conversations with strangers which is anxiety producing, they said take five seconds and write down three topics you're going to talk about, last night's movie, this weekend's game, and they found that people stuck with the topics in their pocket and they never came up but they reported

being less anxious because they were prepared and had something to fall back on. >> to fall back on, yeah i get that >> is there any way to deliver bad news better? >> absolutely. absolutely the first thing you can do is you can tell someonei'm going to give you bad news and i want you to know we can have a conversation about it, or you don't have to have a conversation you can just take this and carry it with you and come back some other time. >> i got the good news and the bad news is a good way to do it. >> and which one do you want first? >> always depends. >> if you're laying someone off, saying look, i have good news about the company and the bad news is you're fired, i don't think they're going to listen to the -- >> charles duhigg, thank you the book is called upcounats"ndt is fascinating. i learned a lot of lessons i'm going to be trying out some on you. >> you do that >> we're coming right back thank you, charles billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses

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anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. welcome back to "squawk box. i'm dominic chu. we have a mix of catalysts at play for stocks to watch this morning. we'll start with a big drop in shares of palo alto networks, down 23.5%, roughly 300,000 shares of trading volume this is after the cybersecurity company reported quarterly

results after last night's closing bell that actually beat estimates for both profits and revenues but the current forecast for both measures came in below expectations as did its full year forecast for revenue and billings growth. shares of palo alto networks were up 24% year to date and 116% over the last 12 months going into this print. so the expectations maybe were very high. also on the earnings front, shares of toll brothers up roughly 2% or so right now just around 2,000 shares of volume this is the high end home builder reporting profits and revenues that also beat after last night's close in toll's case, it raised its full year guidance for how many homes it expects to deliver and said a combination of a strong jobs market and improving consumer sentiment and still low levels of housing inventory will contribute to stronger demand in new homes throughout the course of this year and we'll cap things off with a check on amazon shares of the e-commerce giant up a percent or so on a quarter million shares of volume

amazon's going to be included in the blue chip dow jones industrial average effective february 26th. it is going to replace pharmacy benefits manager and drugstore chain walgreens, boots alliance, that move will generate incremental investor exposure to amazon for those who use index tracking instruments like mutual funds and etfs to keep those in play so, amazon shares up about 1% right now, andrew. stocks to watch, back over to you. >> thank you, sir. coming up next, a big auction taking e ing place in nr with items from sir elton john cnbc's robert frank is there and has a preview of what's coming up robert >> good morning, andrew. rocket man mania starts tonight at christie's, auctioning over 950 items from the former atlanta home of sir elton john everything from jewelry to watches to furniture to his car and, andrew, i got something special for you, these are the man himself, the rocket man's

boots, selling for up to $10,000. we'll talk to the ceo of christie's about one of the greatest celebrity auctions to come around in a decade and the state of the art market when "squawk box" returns >> announcer: stocks ss to watch sponsored by cla we'll get you there. a car is a car... is a spa. an office. hi! hello! a cinema. so automated.

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we're back to "squawk box. christie's holding an auction for the rocket man himself, sir elton john features photo, stage outfits and a cameo from his former state we have a special guest. >> great to see you, andy. here with christie's ceo great to see you thanks for joining us. >> good to be on. >> this sale is just, it's gotten so much publicity this whole christie's

headquarters to look and feel like sir elton's previous flns atlanta. what's the interest so far in demand >> very strong the type of sale, meeting of the year when people want to enjoy what attracts so much attention. we have had many visitors coming here at rockefeller center. we have a registration online, on the phone we expect to have a lot of people in the room tonight for the first sale so it's very exciting. >> and it's interesting. when you look at estimates there are some items here estimated at $100, $200, sunglasses, smaller suitcases things like that, but estimates seemed very low. his car. bentley, gorgeous, let alone owned by elton john estimated around $30,000 do you have to put a low estimate and that does not include potential elton john premiums so these items could sell for

multiples of the estimate? >> that's the main thing of this type of sale very different categories of object, but all estimated real value if for sale in normal sale and then the name, the history is set up. of course, the name and the emotion he has, putting in this sale setting, the intent of his estate we do the rest. so, yes. we expect prices will be multiple of the estimate, but the estimate of share, if the object were in a regular sale. >> and what about the overall art market we saw a pretty big correction last year. the auction houses were down somewhere around 25% to 27%. your sales down about that as well what does this year feel like going into what's at least from the stock market point of view starting out better than 2023? >> i'm, you know, relatively optimistic for this year, because, as you said

the correction to ylast year an the market has proven resilient. the market changed much over the last decade. much more global. especially in areas like luxury. the online bidding has transformed our industry, much more bidders than ten years ago. i think once the market corrected itself, as was the case last year, i think now time to start with good days and we said two weeks ago what we have already selling in london two weeks' time makes me meal optimistic. >> you mentioned online bidding which has totally changed the auction business sinced pandemic what percentage of your winning bids now for last year were online and what do you think that's going to be in the future >> it's 80%. >> 80% >> 80% come from online bidding.

it's fair to say we have a lot of online sales. online bidding is the only way to bid in these online sales but even in live auction almost 50% of the winning bids come from online so there are more people bidding online than people bidding in the room and on the phone. >> has that also brought in a younger generation collectors that may be just, didn't know how to navigate christie's when live, intimidating auctions? >> absolutely. online attracted new customers they are savvy they like to bid online. they like the fact it's so easy. sometimes, and you're right, they are intimidated by the, the aspect of the -- we tried to change thing look what we've done with the set here to attract as many visitors as possible but then online is the easiest way. >> and broadly, does the stock market have much of an impact? i mean, is it correlated to the art market and at least the mood of very high-end customers

had a pretty good stock market end of last year, stasrt of this year does that help >> the overall context, macro environment, but, as i said, we are resilient, because people especially at the top end, they know that they don't take, important tobt buy, whatever the market does, often we see our sale especially for high-valued items are strong. >> great thank you so much for being with us. >> thank you. >> didn't see high listed items that elton john collected but great photographs. i mean, the amount of art in this space is just, amazing one person did this, plus while he was touring and being sir elton john so it's really amazing to see how much stuff is here. >> and i go way back to -- you know, not everyone remembers

"your song." i remember when it came out. he is raw talent incredible what a life he's led i've seen his place from -- you can see it from saint marque's x square over in venice. >> and 14,000 feet absolutely filled you come here to christie's, the amount of stuff he collected obviously an incredibly talented musician but also a talented collector. it's staggering. 14,000 square feet of stuff calling it his ultimate elton john man cave. great to see. >> very cool. coming up, mike novogratz joins us made a significant move in ethereum, as we head to break. crypto prices this morning weakness there but not too bad

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meeting and nvidia's quarterly results coming after today's bell we'll run down all the action. meantime, wide world of sports streaming, may be about to get nasty. fubo suing warner brothers disney and discovery to block think alliance we'll see. they've got a case and crypto on quite a run. what are the next levels to watch? we'll wash mike novogratz who joins us straight ahead. all this as the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box. here on cnbc live from the nasdaq market site in times square. i can tell you that definitely we are right now -- it's not a

screen not a green screen not a lot going on >> i've said hello to that fellow in the truck. >> see him every day yeah he is quiet out there. too quiet. i'm joe kernen also with andrew ross sorkin. becky is off today and as we said, futures are a little bit of pressure. interesting things coming on the docket today the minutes from the fed and we have nvidia has -- of any stock maybe more to do with this incredible rally that we've seen check out the shares right now the company's quarterly report after the bell today, and big numbers. like revenue rising like 8 00% r something. seven times, amazing performance as a.i. has taken the world nome

by storm but by surprise over the past eye, think. i told you when was i a stock broker? many years ago might not have been born bought something called symbolices. >> was i early >> u remember. >>. >> it doesn't exist anymore. >> you were too early. >> too early for my clients. >> and changes ahead for the dow jones industrial average walgreens is out, amazon going in going to happen on monday. >> okay. meantime check out the price of bitcoin. just about to cross the 53,000 dollar level now trading lower today at $51,318 also ethereum crossed over the $3,000 level giving back some gains. all of this amonth after the s.e.c.'s spot bitcoin etf decision joining us now, an exclusive interview, galaxy ceo mike novogratz. mike, great to see you talk whether consolidation at that $52 level

also just about, what's about to happen now between having and everything else and what kind of interest we're really seeing from the institutional space given where you sit and actually the institutions that you're talking to, where are we in that process? >> listen, we have come a long way fast, but in u.s. stocks and in crypto. crypto, almost felt too easy right? you know, we've gone up almost every day. so what surprised me, it wouldn't surprised phoo there's some consolidation trees don't grow to the skies, but i think the big story is we've now opened up the institutional -- really, the rai community. right? $42 trillion worth of wealth are managed by brokers baby boomers own most of the wealth in america and getting their first easy access to bitcoin and you're seeing it through etfs, massive growth in

a very short period of time in this whole etf complex. i don't think that's going to stop right? last night we had $135 million of bit flows after slowing down from 400, 4350 taught early in my career prices get set on the margin. right? got more buyers and sellers, prices go up i see it, kind of a -- these are hot alerts as well guys putting in their portfolio to hold. not traders. the etf buyers in general coming through these rai channels i think are taking supply off the market i still see bitcoin ending the year a lot higher. that said, consolidate around here for a while of course we have. >> talk through this sort of dynamics of his rai situation. which is a number of institutions still need approve toll do this how do you see that playing out in terms of just, you know -- how many advisers can actually

recommend bitcoin has a product today versus how many will be able to do that in six months from now >> i don't have a perfect answer but would tell you at least double in six months right? there are big channels that still aren't turned on we know they're getting turned on right? we're in conversations with them the big platforms, and, like, there's an inevitability to it why? because their customer, calling and pibitching at them saying we want to buy bitcoin with you and others are screaming at their bosses i'm certain it's going to happen not it might happen. it is going to happen. it takes time. these organizations are very conservative in general, and crypto scared the heck out of people 18 months ago so there's still scar tissue it's surprising that we have a -- a, you know, approved, you know, u.s. sanctioned bitcoin

etf and it's still very difficult for a lot of crypto companies just to get banking services in the u.s. >> so so many of these folks are holders you like to call them. ed industry likes to call them when do you think we get to a point people are actually buying and selling this product >> listen, there is a trading community. right? like, what people forget is, if you're young it's not difficult to buy bitcoin right? get it on your square app, on almost any app robinhood. there's a whole universe of people that have bought and sold that will continue to. hedge funds broadly. they don't buy itself daily, unless they're quant funds macro gets in, gets out like any other asset. think about every macro trade is bullish gold bet you every macro trader you can talk to has bought and sold gold four times in the last six months >> if i asked you to makes the

down side case for bitcoin what would it be, in your mind? >> you know, 45,000. 42,000 >> what would get you there? >> could be -- some regulatory, you know, kerfuffle. could just be the market got a little long and you get people scared i don't see that as a high probability, but, you know we broke out. look at the chart. kind of broke out from 45 and so pushing through where you broke out from happens often in markets. you know, it's not supposed to be easy to make money. you got to get scared a few times, and that's what's so impressed about the corbett coin community. they just -- they just take the pain and buy more. i mean, such a belief system around this asset. wouldn't surprise me if something happened that we're not paying attention to. >> so tom lee was on the

broadcast earlier this morning saying that he thinks this could be an $150,000 of bitcoin by end of the year. what do you think? >> you know, when markets get new buyers and start breaking out, it's hard to have price prediction i do think we would test the old highs in a relatively short period of time take out $69,000 -- usually don't go right through the first time touch them and come august the wthe -- all the bay back and mad you didn't sell something. could get $ 50,000, $125,000 what would have to happen, the fed timfinally pivots cuts rates -- >> go back a second. how correlated -- funny you said that, because a lot of folks think it's coordinated to what fed is doing and times it seems

completely unrelated. >> listen, two stories with bitcoin that always happens. one, it's a macro asset. the second, early on in the life cycle. there's an adoption cycle. right? right now this is all adoption new buyers coming in, and being told the big picture or story. that you need to have this in your portfolio because we have fiscal responsibility not going away and this is a hard asset and more and more people are believing. despite jamie dimon and warren buffetts that this is a hard asset. driving it now it's still a macro asset same way gold hasn't had a great fund, bitcoin substitution harder to call the u.s. government -- i mean the u.s. economy. the fed really gave us the sense they were going to be cutting in march and now they're not cutting in march >> you mow, the other thing i wanted to talk to you about. more macro did the fed give the wrong signal or the market, if you

will, just read wrong signals? >> go back and read powell's comments from two fomc's ago, it's surprising. they got surprised by the strength of the economy and how inflation hasn't rolled over as fast he expected it to be in march. i've been reading these things for 25 years that was a bullish fed governor. a dovish fed governor. they're smart. data changes they change. and so now we're -- i still think end up getting, you know, rate cuts. market's now pricing in kithd of w kind whatted feds are and probably see cuts a little bit later, giving bitcoin i think some juice. >> what do you take away from the earnings report? not much you focus on a walmart for example, but when you listen to doug mcmillon's comments yesterday about possibility of deflation over the next several months of the sense that there

are customers that effectively are buying less each time they walk into the store, and would you think that really means to the larger economy >> listen, i think it means that this election is going to be tough if you're a democrat right? that while the -- guys in new york city have lots of assets, feel pretty good about the world now. stock market's on the highs, crypt crypto's on the highs. bottom half of country is running out money a little built. right? upi from covid lasted longer than we thought it would talking to a guy who run as huge hotel chain and he said they're -- their business -- their business travel is still fine, but consumer travel is way down. so i do think the economy is slowing. i do think powell will cut rates. i think it will -- it will also impact this election harder for biden to say i have a

great economy if bottom half of the voter base doesn't feel that you've been a biden guy. what do you think about this sort of shift in sentiment over the past several weeks >> listen, i have been very vocal i think the last 18 months that anyone over 76 years old is too old to run for the highest office in the land so -- it's been frustrating to see this deterioration of support. in a guy that really had an okay presidency he's too old to be running the american people's telling him that, and -- you know, there's a stubbornness i always think we should give extra statues to george washington at the only president who really left power willingly, one of the few leaders of the world's history that gave up power willingly. people get pow around get drunk with it. it's frustrating he could have gracefully left. told people that a year ago. there would have been a nice slate of candidates from the

democratic side. right now we've got this bizarre election no one aunts wants eit the candidates for the number one country in the world it's sad. >> what is someone like you going to do? >> i publicly said wasn't going to vote for anyone over 72 so i'm not easy to be a new yorker because your vote doesn't count. whether biden win thin trump, period i think donald trump is a damaged soul and having him run our country i think you get really ugly. so -- but it's frustrating i am literally going to a lunch today with people who are trying to figure out, is there any way to convince biden to step down and -- >> hold on tell us about it who's going to lunch >> i don't want -- i just got invited and don't want to throw them all under the bus somebody invited me. pretty senior guy in the democratic establishment and i thought i'd go. >> who would you like to see in

that spot, if that spot were somehow available? >> listen, i think any -- any of the credible candidates would beat trump amy klobuchar. gavin newsom, everyone thinks is so liberal he's far less liberal than he portrays him as a california governor i think any of those guys would beat trump wes moore from maryland. you know, charismatic young man. people don't want donald trump as the president in general and they don't want joe biden. >> a thought who would be better for bitcoin? >> listen, the republicans right now -- >> is that what this is? >> republicans -- lucky enough and wealthy enough that i can vote for my soul and not my pocket. the -- the republicans would

certainly at this point be better for bitcoin interesting, this is a bipartisan issue and a ton of democrats on the hill are frustrated this has been elizabeth warren holding this up. she made a deal with biden to get elected. for biden to get elected she put gary gensler in the s.e.c. there's a small -- brown has a tough race didn't understand it could have been neutral and bitcoin instead the whole bitcoin army going for his opponent. you know, it was a strange hill to die on, but there's a small group of democrats that have been blocking progress, and so -- you know, it would be disingenuous to say republicans wouldn't be in the space right now. any any other democrat and if gets reelexed gensler there be will and guys in congress will feel priessure to do something

i see the kind of regulatory logjam ending postelection no matter who wins. >> and thank you, sir. good to see you. >> thanks, guys. >> good luck at lunch. come back with a report, if you can. coming up, fubo tv throwing a red flag on espn, fox sports and warner brothers discovery in that new proposed sports streaming alliance that platform arguing the joint venture would result in extreme suppression of competition. fubo tv. do they have a case? that's coming up when "squawk box" returns. stanley, (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities

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welcome back to "squawk box. futures right now look where things stand 61 points down on the dow. nasdaq opening up about 100 points off of the s&p 500 opening up about 12.5 points.

and resigning from the company's board. in a filing saying his refg in addition is believed to be because of various disagreements since he stepped down from the ceo role back in september and that included the decision to lay off 9% of the company's workers at the company's headquarters he served at the company since 2013 but ousted last year and in a letter sent to the board he said that the company was making large decisions that could change the brand or the model without a formal meeting of the board, and without moving any closer in the ceo search process. scheduled to report fourth quarter results tomorrow. and shares of solar edge ar tumbling losses not as bad as expected but revenue below what the street was looking for, and the guidance for the current quarter was much weaker than expected.

the company makes inverters. converting solar power into usable electricity ceo said saw an abrupt slowdown in demand second half of last year due to high interest rates and lower prices, that sat on the company's inventory. solar edge cuts 16% of its workforce, closing manufacturing sites and exiting certain businesses to reduce costs, and you can see it is having an effect spreading a little bit, but not toot bad, to some of the other solar stocks first solar actually down 2%. coming up, talk 401(k) retirement plans and taxes that go along with them a reminder heading to the break. get best of "squawk" on squawk d poand listen anytime we're coming right back. h approh to pet food.

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our next guest has a bold prediction saying that 401(k)s will be gorn within a decade as the government looks for additional sources of revenue to keep up with entitlement programs ending taxed advantaged retirement plans joining us now, a manhattan institute senior fellow. explain your rationale, but, i just -- looking at the retirement situation we have in this country, and i understand we have a $34 trillion problem in terms of total debt, but i don't see how, you know, trying to deal with one makes sense to pull the rug out from what is not a great situation in the first place, on the retirement picture. it's already troubling enough.

so why do you think this is going to happen? >> well, i want to be clear. i don't think retirement accounts are going away, but the tax deduction i think we can sort of see that gaining less favor. seeing the last ten years certainly among academics growing evidence that the tax deduction hasn't induced people to save more it's really the automatic enrollment that gets people to save more, and generally what happens is when people do save more in their retirement accounts they save less elsewhere. overall savings don't change seeing on the left as well a lot of discomfort with the 401(k) plans because the benefits largely accrue to the wealthy. now we see as well more right-leaning economists being questionable about the growing case, saying it doesn't get people to save more anyway it is tax advantage. not -- a lot of people seem to think it's tax-free. it's not you put the money in, you pay

taxes when you take it out although you save on capital gains taxes. even that estimated 1% of gdp. look more to revenue particularly in the next ten years start having to pay more for entitle minutes seems an obvious place to start i think for a lot of people. i'm more skeptical honestly thinks i like the 401(k) the penalty for withdrawing, for instance, but certainly i'm seeing a movement on left and right to say what are we doing this for we need revenue. this is a good place to start. >> you don't want people depending on the government as they get older and -- you know, so don't touch entitlements -- and -- make it harder for people to have a bigger nest egg -- i don't -- i don't understand that i would think that you would -- i mean, because the compounding of money is so much quicker, that's why people buy annuities.

anything tax deferred. the nest egg a person has finally approaching retirement will be high if it wasn't taxed if accruing each year. seems putting more strain on entitlements when that's what you should be looking at you really want to fix the problem why would you touch 401(k) touch entitlements. >> accounts be a bigger piece of the retirement system if we wanted to do it. big as we can see it's incredibly popular and people won't tolerate cuts to it at all. that's putting a lot of strain or sort of the fiscal situation. so i think it isn't that people don't want people saving for retirement it's just that i think the growing evidence that the tax deduction doesn't induce people to save more so maybe we could get, use this as another source of revenue a lot more politically palatable than just like a bigger tax on

income. >> even if you -- were to do entitlement reform -- i don't know many people that think that we can get around it, eventually why not do it when it starts politically popular for people retiring in two to three or five years? change it for people 20 30, 30 years from now >> like, all pension scholars would love that. sort of shouting that for years. it's just -- you can even see this political campaign. even discussions be increasing retirement age for people my age is sort of become just sort of politically toxic. so i mean, a lot of things we could do that would be better, but they've just proven it impossible over the years. so i think this is why ultimately, you know, the 401(k) doesn't steam have the same fan base sort of, that the social security system does, or even sort of corporate tax rates do i think this is why this is

looking like a likely target. >> it's not goin obvious lit won't solve the problem. what will? how do we pay for all the non-discretionary things we're going to pay for where should -- if basically the tax rate is above 50% in total in many places for many people around the country, what's -- what would advocates for higher taxes think is a fair -- is 70% okay >> i don't think anyone says 70% is fair. is, you know -- advocating that thinking it's fair being more punitive. i was emailing with one of the people who wrote the paper who as i said was a conservative economist andy biggs he was like, it's not that i want higher taxes. he's like, i just think that getting rid of the 401(k) tax deduction will just be less distortionary than other things we could do. rather see this than a 70%

income tax. >> yeah, but how much money are we talking about >> well, honestly, not enough. it's, as i said, like 1% of gdp but it's a start you know, at least, i think thinking it as well, at least tied to the retirement sometime then goes back into entitlements that's it. if i were in charge and could completely report on entitlements this not how i would do it. it's just that, as i said, with the tax system we have, with an entitlement system seems intractable and unable to reform this seens like the best option. >> interesting see whether that does come to pass i don't like change. of any kind basically. so i guess that's why i'm resistant, but where would we be we'd be, you know -- >> i get what's the alternative? >> you'll see some day changes, you know -- makes me

anxious. thank you. i know you get anxious with change. >> at times. i'm not -- not that changing. >> you like -- >> because you like progress >> progress. >> yes i know, i have other ideas coming up, fubu some playing around when it comes to sports and now launching a lawsuit block alliance of fox, warner brothers and disney discovery see if they have a strong enough case to take on these titans. and apple making a big splash in the u.s. now showing up in one place it shouldn't. find out where, when we come back.

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and fubu aiming to block launch of a joint sports streaming platform from the media giant. for more a divd abalto former trial attorney managers division of the doj now at his own firm.

good morning to you. what do you make of the lawsuit and what are the chances they will prevail >> well, yeah. joe just talked about how anxious he can become. well if he's anxious over what he talked about early he's going to need a giant anxiety pill if this deal were to go through a clear record here that -- that espn bundling tactics has significantly raised costs to consumers, and allowing them to merge with these other, effectively merge with these other firms is going to force consumers to pay through the nose for the programming that they desire. >> i was already anxious about this no i work for -- i didn't like this already. you've nailed it very, very anxious about it. i don't like -- it's like collusion. put all of these big companies together there's a reason they didn't tell any of the leagues what they were talking about either,

david. >> right and look, current antitrust enforcers have take an really careful and critical look at bundling now, bundling raises costs to consumers. we need espn it's essential, but once you take their market pow around bu power and bundle it it raises costs of other products. ftc has take an tough stance on this the pharmaceutical industry and come out with a policy statement against that kind of bundling. i think this is a case with real legs to it and a court should block this deal in order to protect consumers. >> avid, let me ask you a question, though look at the media landscape today, it is -- very large it has lots of incumbents, but also lots of challengers well healed challengers in the form of technology companies like amazon, apple and so many other comes into this space. you could argue some of the

legacy companies are actually in trouble. i mean, genuinely troubled as a result of what's happening how much of that should be part of the calculus here >> that's not a big part of the calculus the calculus under antitrust laws are protecting consumers so they don't have to pay more for services they need and desire. the record here is crystal clear. espn's bundling tactics in the past significantly raised costs to consumers this merger is more of the samelike tallinn an 800-pound gorilla ease tons of bananas no one's better from a gorilla goes from 800 to 1,000 pounds. i think this deal will be challenged by the justice department, but the lawsuit is there, too, to make sure a court is engaged immediately, and, you

know, takes the right actions to protect consumers. >> let me pivot a moment curious about your thoughts on the big deal of this week, which was capital one and discover financial. how do you think regulators will look at that talking about the op-ed in the "wall street journal" this morning about it. >> yeah. they're going to be extraordinarily skeptical about it or two two important reasons capital one and discover are important head-to-head editors in the consumer end, in the high-consume ernd of the market consumers who came for cash back direct competitors, no way to avoid that more important, discover is an important maverick in the cost to merchants the merchants discount, and by being acquired by capital one, that discipline on the merchant discount part of the market would be eliminated. this is a lose-lose situation for consumers, and will get intense scrutiny by the justice department. >> you don't think there's an

argument to be made that visa and mastercard effectively have been a duopoly, with american express out there as well and could use competition? >> they do have competition. the question swhashgs will happen if its parent is capital one? it's incentive and ability -- >> you think discover is a viable competitor to visa and 34 mastercard >> lots and should be more visa and mastercard, justice department should go after them, but they are an important rival in the market. there is important head-to-head competition between capital one and discover and lost if this merger went through. >> david, nice to see you this morning. it's always fascinating to get your insights. appreciate it. >> thanks. take care. coming up, apple's vision

pro making a big splash when it debuted a couple weeks ago the device only available in the u.s., but the product has found its way into one black listed country. that story when "squawk box" returns.

it's been just over two weeks since apple's vision pro headset hit store shelves officially despite the tech giant saying it would only be available in the u.s., the buzz-worthy product is finding its way on to the streets of a country in which apple says it's no longer doing

business eamon javers did digging into how that's possible as part of a cnbc new series "the javers spot." >> you're right. february 2nd apple launched a new apple vision pro at the company's flagship store in new york the company said the product would only be for sale in the united states, and because apple paused its sales in russia to protest the invasion of ukraine nearly two years ago, you wouldn't expect the vision pro to be for sale at all in russia. a cnbc survey of russian tellogs and channels in moscow reveals the vision pro was readily available for sale at retail outlets in moscow within days of its launch in the united states. the fact that the hottest new american tech product was available with almost no delay in moscow before it is officially on sale in london, paris or munich is a high-profile demonstration of the difficulty of unraveling the

global economy even in an era of war and conflict asked about apple vision pro sales in moscow, an apple spokesperson emailed cnbc, as you are aware apple vision pro is only available at apple retail stores in the u.s in the russian capital, that statement may reflect apple's intent dut doesn't square with reality. able outlet store there before the invasion is offering the devices for sale now, but prices are high, as much as 50% more than in the u.s. prominent russian tech bloggers sergey recently democrat oes the device walking through moscow saying it sells for thousands of dollars more at stores there he says he actually bought his device by pre-order in the new york and had someone fly to moscow to demonstrate is immediately after release to more than 1 million followers on youtube predicting high prices in russia will keep demand down

for vision pro in that country apple sales continue, because the russian government wants them to. in 2022, the russian ministry of industry and trade issued a document permitting apple products to be imported to russia even when official supplies are banned or suspended by the manufacturer. in russia that re-routing of supply chains is known at parallel import and part of reason nearly two years after the invasion an apple pullout of russia, apple products in a wide range of other luxury goods as well are still available in stores there back to you guys. >> i'm just excited about the javers files how often are we going to see something like that, eamon >> you know, a new brand we're using, joe going to be featuring sort of exclusive reporting. stuff you'll see on cnbc not anywhere else and that's hard to predict how often you're going to get that stuff. so we're going to use it as we can to spotlight things we have exclusive to us and to cnbc.

>> i'm swelling with pride is your mom watching did you look behind you? did you see branding and stuff that you got >> i did see it. the team worked hard on that yesterday, actually. running around making sure all the screens were set up. kind of cool. >> i think it's very cool! the kernen -- >> that could work. >> that's taken. no that's taken. >> is it >> chronicles, somebody just said chronicles. >> yeah. or the "kernen report. also that would work. >> dealbook a taken. >> dealbook is taken >> somebody got center of the square on that brand. >> damn. all the good stuff's gone. all right, eamon interesting. >> how about "kernen listens," that brand >> a tough -- >> have to -- >> nobody would believe it. >> and charles saying i didn't

want to say anything but going to say, "homey don't play that." nah. i'd like to, like to, you know, like to be a better person like to be -- >> like to be a better person. >> i would also like you to be better person. >> it's getting late in the game no, i have time. i have time. >> fair enough >> thanks. >> thank you congratulations. when we come back, some of this morning's top stocks to watch. the not-so-secret to our success? earn and keep trust. build and maintain financial strength and stability. deliver solutions that meet complex needs. do right by customers, clients, and policyholders, always. repeat daily for over one hundred and seventy years. massmutual. partnering with financial professionals, benefits brokers, and institutions. ♪

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welcome back to "squawk. i want to get to dom chu, who's got today's big morning movers what's going on, dom >> andrew, we're goirng to star with the mover getting a lot of attention in housing, toll brothers is up roughly 3.5%. it reported quarterly profits and revenues that both topped consensus estimates alongside an expansion in profit margins over the same period last year. now, toll brothers ceo doug yearley says demand for new homes will remain strong in 2024, given a stronger jobs market, better consumer sentiment, and continued low levels of housing inventory, so

those shares up 3% elsewhere, stocks are fractionally lower in the housing market quick check on uber technologies the ride-sharing and transportation logistics company is just about trading on 70,000 shares of volume uber is going to be added to the dow jones transportation average. it's going to replace jetblue. that news was released alongside amazon's addition to the dow jones industrial average, which will replace walgreens boots alliance on that date. nvidia is down about 2%, a million shares of volume after a 4.5% drop yesterday. earnings are slated to be released after today's close and expectations are high after a blistering run over the last year up about 229%, driven by optimism over artificial intelligence, chip demand. options prices are indicating what could be a move of 11% up or down in that stock post-results we'll also get a quick check on

some of the other chip stocks in the market now ahead of those results. names like nvidia, advanced microdevices, broadcom, and the semiconductor etfs are all in focus today. whatever nvidia does could reset the entire narrative on semiconductors we'll see what happens with that one. back to you. >> dom, do you say walgreens was booted from the dow? did i hear you say that? >> i didn't say that i don't believe i said that, but that would have been interesting. it would have been -- >> you didn't think of it. i didn't either. someone tweeted it >> here's what i would say i was very proud of it >> now i'm embarrassed to say it >> i was very punny earlier in my career. i think my editors have tried to get me away from doing puns. kathryn rooney vera, chief market strategist at stonex and the notes i read, they spoke to me today

that is that we got -- everybody got a little ahead of themselves, and the perfect scenario that we were envisioning at the end of last year, we sort of thought that was going to happen this year until last week, and now anything that sort of takes away from that makes risk assets -- makes it a little bit questionable we're not in the same place we were a month ago >> kernan listens. yes. that's my -- that was my thesis coming into 2024, and i think it's panned out pretty nicely that the trajectory -- the disinflationary trajectory combined with strong economic growth, the market was assuming, almost as a certainty, joe, that that would be the trend for the entirety of 2024, and my take was, look, complacency euphoria is really high let's hedge our bets with defensive positioning, with put options. you can protect your tech position, your s&p position for

12 months at the money for less than 4.5%. made sense to me >> yeah, and you're -- couple of things you said. what if disinflation is transitory that's a thought >> what if yeah >> and it's -- we quickly said, oh, the fed orchestrated the perfect soft landing, the economy can stay strong, and inflation can come down to 2%. that's never happened in the history of the world, and we're all saying, yeah, wow, these guys are geniuses, and everything's great i mean, what were the likelihood of that scenario i mean, we need to look back >> soft landing is historically improbable, that's for sure, but things can change. i think the -- the zeitgeist, the market idea was of this ideal landing that's a historical improbability, considering the pandemic to have launched us, joe, into some new economic reality, when, in fact,

from my perspective, it's an operation. so, we're leading with the repercussions of that aberration from reality, and what we saw in the last inflation data was that goods prices are coming back up again so we can have broadening out of inflation look, i think that the risks coming into this year were underpriced. i still think they're underpriced. there's a good chance of a soft landing occurring. what we're seeing right now is not that what we're seeing right now is a reflationary scenario where the economy is growing way above potential. reflationary scenario means inflation creeps back up again because economic growth remains strong, risking the multiple, while the other risk is on the other side, joe, and that's hard landing. that's recession and that risk's earning. so, there's underappreciated risks in the market. >> we could have right now because the reflation could cause the fed to orchestrate a harder landing you also point out the possibility, china cut rates significantly, what if china

rebounds no one thinks it's going to. suddenly, we believe -- we've accepted china doing like 11% every year forever now we think they're never coming back. that country could come back, and that would be inflationary >> well, that's a risk that people should have top of mind because no one's talking about it and then the other risk is we have an election coming up if we do get trump two, that could be inflationary. i think there are things that the mainstream, we analysts are not talking about that i think are underappreciated risks, and we mentioned several of them >> it might be inflationary, but we also might have a southern border again i mean -- i'm kidding. i'm not going to enter into any political commentary today >> i'm an economist. but just looking at the numbers, i think we have to be cautious on the inflation trajectory and this anchor bias, joe, that the market has fully discounted. >> great very good, katherine thank you. >> thank you, sir. >> good to have you on i didn't say anything all day. you had all these guys on with

the -- krause -- i didn't say anything all day long, the entire time. >> you felt like you needed to -- >> maybe a border. if you're a country, how about a border >> nobody's disagreeing with you. who's disagreeing with you >> someone who's sitting in the white house. >> make sure you join us tomorrow "squawk on the street" begins right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and almost said david faber here at post nine of the new york stock exchange. david has the morning off. nvidia tonight is key. meanwhile, palo alto, teledoc, cutting guidance our road map begins with nvidia out after the bell, a day after the stock saw its biggest drop in four months. palo alto is plunging more than 20% premarket as they lower their full-year guidance later this hour, a cnbc exclusive with b of a chairman and