interview with brian cornell. it's tuesday, march 5 ath, 2024 and "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen. andrew is off today. here we go. it's tuesday. yesterday was a rare down day for the markets. the first session of three that you saw declines. none of the declines hit .50% which is why you see red arrows this morning. however, you are still talking about all three of the major averages less than 1% from the all-time highs. dow down 50 points s&p down 15. the nasdaq is the biggest

decliner with points and percentages this morning. those futures are off 117 points. take a look at treasury yields. they were higher yesterday, but you are seeing a pullback this morning. the ten-year yield below 4.18%. the two-year yield at 4.58. joe mentioned that bitcoin continues to climb. it is down by 1%. 6 6 6 $66,834. we are watching the price of gold futures. gold hitting the record high close yesterday. that april contract jumped at $2,131. despite the high, it is still below the inflation adjusted high of $3,200 which hit back in 1980. >> all-time high. for gold.

>> yeah. >> you know, with inflation slowing, but money printing, less likely with no cuts maybe coming this year. >> potentially. >> or three later in the year. >> yeah. >> looming behind all that and we're adding $1 trillion to our debt every 100 days. i read that the other day. that's still climbing. there's no relief in sight for that. >> bitcoin as you keep talking about the halving in the next two months. i was reading something yesterday that suggested if you look at the increases at the halving which happens every four years, there is still a lot of room to run. >> crazy. we will have someone on later. i want to know the possible lows. when it goes down, it can go way down. it was 17. it was 66 and back down to 17.

a developing story on tesla. the gigafactory near berlin was evacuated over a fire at the pylon near the site. the fire knocked out electric as i in the area. the fire has not spread to the tesla plant itself. police are investigating arson as the cause of the fire in the area which has been a focus of environmental protests against the tesla plant's planned expansion. making green eco friendly evs, but they are mad they are expanding the planet. think that through. they don't think a lot of things through. they were writing another masterpiece. heroes. they don't want oil. they rode in cars to go there.

no oil. ever. >> or a bigger electric ev factory. >> right. they want it. in the meantime, the google co-founder making a rare appearance over the weekend at the agi house in hillsboro, california where they were testing the google gemini model. it started generating historically inaccurate images and including a female pope and racially diverse nazi soldier. here are comments released overnight by agi house. >> we definitely messed up on the image generation. i think it was mostly not thorough testing and for good reasons it upset a lot of people. >> brin said it was not sure why

gemini responses left a tilt. it wasn't the intention. the company made improvements by 80% of international tests. brin stepped down in 2019. he remains on the board, but recently returned to work at the company. it is all around the a.i. move that alphabet has been making. brin told those gathered that he came out of retirement because the extrajectory of a.i. is so exciting. >> when the story first hit, we probably need a female pope. that did not bother me. get with the program here. a lot of changes in 2000 years. we had joanne lipman. women are smarter and work harder and totally better people than men, as i found out yesterday. >> and?

>> tan is and it is possible fo woman to be pope. >> thank you. >> the priests and epis episcopalians. i think the catholic church and this pope -- >> @joe. >> yeah. i like the last one. my favorite is jpii. i don't know about this guy. that's heresay. >> you were raised catholic. >> we had latin mass. the guy facing the other way every morning in first and second grade. every day. >> post vatican ii. >> they changed that. it was english after that. today is -- like i said, it's tuesday. i like less than mondays. >> i always like tuesday more than monday. >> more than monday? >> yeah.

less than thursday. more than monday. >> all right. it's supposedly super somewhere. republicans in 15 states are voting for the preferred presidential candidate. former president trump is expected to deliver a strong blow to nikki haley's campaign hopes. that will just make her more defiant. she has no events scheduled for today or beyond. that may be it. reportedly has no tv or radio ads booked. the twisting herself into a pretzel to try and stay in the republican party after this. >> she has 30% of the vote, but she doesn't have the delegates. >> she be able to get back in. >> i did hear speculation this morning that if she were to endorse trump, that he might actually want that because it

would help with suburban voters. 30% of the vote. >> you just need a big never mind. both of them. trump or her. >> i see how these things play out. >> shouldn't we roll our eyes and feel like we were used? >> welcome to politics. democrats are holding primary and caucuses in 15 states. plus american samoa. the first polls close at 7:00 p.m. eastern. i dpeguess if you create a commission, it means it's really happening. nursews alert out of washington. biden administration creating a strike force to root out price gouging. there is price gouging, megan? we would not have a strike force if there wasn't. what are the details? >> reporter: that's what the white house says.

this is one of several actions from the council. the strike force led by the justice department and ftc. it will be a government effort to boost collaboration and shares data and resources and rooting out illegal attempts to keep prices high in areas like food and prescription drugs and transportation. if this sounds familiar, it may be because it is not unlike the executive order on competition that biden signed in 2021. this is a whole government approach. there are a couple of highlights. the cfpb finalizing rule to reduce credit card late fees. it will bring the average fee down from $32 to $8. the fcc is going to be taking steps to reduce internet costs for people living in apartment buildings. the agriculture department is

cracking down on meat and poultry processors to help farmers. they say they estimate the agenda is saving americans $20 billion a year. joe. >> it is. competition is good. they are right about that. megan, thank you. see you later. in the meantime, "sesame street" jumping in on the inflation. cookie monster says me hate sh shrinkflation. and sherrod brown says me, too, cookie monster. big corporations shrink the size to help their executive bonuses. >> i'm from ohio. this is going to be hard

between now and november. to walk the line t. i. it is really hard because we're in a position to be objective. like the rest of our colleagues in cable news on both sides. no one. everybody is in on the joke, are they not? how will you do it? are we going to be okay? >> we will see what happens. >> trump versus biden. >> i can't believe we're doing this again. >> now. >> it wasn't good enough the last time around. >> we didn't have enough fun. it wasn't as chaotic and nasty and divisive. we have to do it again. >> here we go. when we come back, here's how we will do it. we talk to barry knapp about the jobs report and what it could mean for the fed. that is coming up next. you see the futures down by 40.

later this morning, target is set to report and the ceo brian cornell will speak to wall street. he will speak to us first at 7:00 a.m. eastern time. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. nobody's born with grit. british announcer: rose is really struggling. it's something you build over time. american announcer: that's 21 missed cuts in a row. [car trunk slammed shut] for 88 years, morgan stanley has offered clients determination and forward thinking to create the future... crowd: stop it! ...only you can see. american announcer: rose, back in the winner's circle. [crowd cheers] [music out]

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now to the markets. joining us now on set is barry knapp. he is a manager partner at macro economics. barry, markets are down, but barely, yesterday. it seems the move and momentum is certainly up to the right. what do you feel about things? how do you think? are earnings enough to justify the places we're going? >> they are for about half the market. the tech sector is 30% of the s&p and consumer discretionary which is tech as well is another 10%. communications services is 10%. if you look at s&p earnings this quarter, they are on track to get to 10% this year. it is exclusively driven by those three sectors. it makes sense if you think about the dynamic. last year, it was described as

an unstable eekquequilibrium. household sector wasn't at risk or sensitive to the rate hikes. the same was true with the corporate sector. you have the whole other dynamic which is the banking system struggling with the deepest yield curve inversion since 1980. the banking system is the conduit to provide credit to small businesses and real estate sector and the federal government. in that environment, being long tech works well. this is a strong capital spending cycle the. you probably have above trend productivity growth in the cycle. you have the sector struggling mightily with what i have been describing as nothing like 2008 because that is the lens everyone looks at with micb has trouble and everyone says is this systemic or are there

credit problems? the problem is 1980 when volcker created the deep inversion of the yield curve that started the chain of events that wiped out the savings and loans. they were 80% of the mortgage create that time. that was an existential threat. they were hit by money market funds at the time. they could not raise their money and earn their way out of the losses they had on assets they purchased. it is similar to the regional bank situation now. >> you think the regional banks are in trouble and this will mean the end, essentially, of regional banking? >> for large parts of the market, they need to consolidate or find another way to operate unless we get an aggressive fed rate cut cycle.

the usuaissue is the friday employment report. it looked like the demand for labor was weakening last year and supply improved a lot in the first half of last year. participation rates were up. they found an extra 1 million workers, mostly male immigrants, no surprise. this year, it fell by 625,000 workers. if the supply of labor has dried up with demand coming down, that is why we are stuck at 3.7% unemployment rate. the idea that for the fed to cut to 4%, the level that would disinvert the yield curve and take all of the pressure off the banks and allow them to open the credit channel and lend will take an unemployment rate above 4% and wage growth below 4%. the ten-year note yield can stay

around 4% and not cause further damage. you are stuck and i'm saying i'm long tech. consumer discretionary and consumer and industrials with anything remote sensitive and the back end of the treasury market i want nothing to do with. >> do you think the fed thinks the banking system is in as much trouble as you do? >> i don't, but i would note we had the kansas city fed president give his first speech as president of the kansas city fed after six months last week. "guide post for a new central banker." one of the guide posts was shrinking the fed's footprint in the markets and trying to shorten the duration of the bond portfolio to try to allow unintended consequences of this

which is the inversion of the yield curve which hurts the banking system and move on government spending. waller said something similar to the situation last friday. he said let long-term treasuries tail off and replace with bills. that was the policy from 2008. you may not recall this, but i do when the process started. i was adamant that they should be more aggressive selling off longer-term securities and hike rates more slowly so they don't cause the curve inversion. i think they are looking at this from the 2008 lens and looking as i heard mary daly talk about it. she said we're looking for office real estate problems. that's not the issue. the issue is you own assets that

may perform. >> the issue is the lenders. >> new york community bank has rent controlled apartments. that may have been great with zero interest rates. now your rents will never keep up and the asset value will go down. you can pretend the assets are fine, but the mortgages at 3.25% are trading80 cents on the dollar. that creates a big issue on the balance sheet. lending to the federal government as well because the banking system is crucial for all the treasuries with two years and seven years. that problem needs to work its way out. >> barry, i really appreciate your deep thoughts and walking through it.

>> that's from "saturday night live." deep thoughts with barry knapp. can the market go up with apple stalls or goes down? >> it seems to me that story around productivity and a.i. is deeper than apple. >> we need a new mindset of what is exciting in the stockmarket. the baton is passed on from nvidia or microsoft. >> i'm not surprised after the dynamite earnings season that you have a pause. >> it's a demise of apple which has been exaggerated. >> i won't go so quick. i was thinking about that the other day. how would you get out of the ecosystem? >> i don't want out. >> i don't want out. >> they'll probably figure it out. he's pretty good whaat what he does. >> so are you, barry.

thank you. drop the "k" dude. >> i should add it in germany sdpgermany. >> add it. >> the "e" on the end of your name is superfolous. coming up, another rating downgrade for new york community bank. they could pay more to retain deposits. hue will be on. hue son. that story is next. you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars?

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now to today's "executive edge" and ongoing regional bank worries.

deposits at new york community bancorp may be at risk with the shares plunging 20% yesterday. not a lot of 20% left. i guess there is, hue son. if you keep going down 20%, you never get to zero. it is weird the way that works. >> reporter: yeah, joe. this is an under appreciated impact of those moody's and fitch rating downgrades that happened friday. one thing that flew under the radar is moody's cut the long-term credit rating on the deposits to three levels below investment grade. we found institutional clients who care about the rating. some with the mortgage service and the banking service with cr crypto. one is known as circle where they serve as the back office to

some of the deposits. when you are suddenly below investment grade, what does that do? talking to industry sources, they say it could trigger requirements for more collateral or trigger a requirement for them to move deposits to another bank. certainly when you think of the cost of money these days, any offering would cost them more money to hold on to their deposits. from what we can find, there are roughly $15 billion of deposits which could be at a flight risk. that is 25% of the deposit base adding pressure to nycb. >> we only say those four letters, hugh. there has been zero contagion from this. not to minimize it. new york community bank. would you leave much money?

why would you leave it there when there so many banks around? they need to pay more. >> reporter: there are concerns about that. to be clear, the last update that nycb gave was february 15th before the series of moody's downgrades. at the time, 72% of the deposits were insured or collateralized. most of the dehe poposits were flight risk because they were uninsured. if you look at nycb nobody else has the concentration that barry was talking about with the regulated new york city businesses which are all of a sudden worth less after the 2019 law changes the economics on the businesses. nobody else grew as much as nycb. they added signature last year in the banking crisis. they added flagstar and doubled

in size. they brought a lot of scrutiny they were not ready for, joe. >> janet yellen said everything is insured. hugh son, thank you. target just reporting earnings for the quarter. it came in at $2.98a share. that is much better than the street had expected at $2.42. revenue also beat expectations at $31.9 billion over the $31.8 billion the street had been looking for. store sales down 4.4%. the ex-estimate was down 4.5%. the fourth quarter gross margins were strong. 25.6%. the company is giving guidance for the full year coming on this and says for the full year, they are looking for comp store sales to be flat to be up 2%. that is in line for what the

street was expecting. they are looking for $8.60 to $9.10. the street is at $9.15. it will take a difficult current quarter to get them to that point. they are looking for first quarter earnings per share of $1.70 to $2.10. the street was at the high end of that at $2.09. comps down 3% to 5%. that is in line with the expectations of 3.6%. you see the stock is up sharply at 5.8%. probably because of the current quarter is better than expected, but also because the profit margins have gotten better. for 2023, that is the highlight they point out with operating income margin of 5.3%. two percentage points higher than the year before. operating income dollars up $2 billion compared with that. that stock is up 5.8%. the ceo brian cornell will be

speaking to the street today and laying out what they expect to see which is happening at 9:00 a.m. before that, brian will join us on set coming up in a half hour time at 7:00 a.m. >> huge rally. the chart doesn't look different than home depot or lowe's or a lot of retailers. this stock, i don't know if we will see it. you can a little bit. that in october or november is 102. 102. i can tell you it is up 50% or more in that time period. >> right. >> some people thought target had inventory issues or woke issues. it moves like all the others. they all move in sync. chances of the recession are diminishing for the retailers and suddenly a bid for all of

them. >> the last time we heard from brian cornell, he talked about it in november where he was talking how the consumer was looking for value. we will hear from him over what is happening in the stores and what the consumer is looking for here and how they improved their margins. i think that is an important part of the story over the last several months. >> the other important part, we don't need to bring this up, but the high while walmart traded in the all-time highs in recent weeks. we're still talking 260. we're at 160. it's come back a lot, but it's not ins recent years. >> the inventory issues and problems they ran into. >> the dot-com stuff in canada. a lot of things that target had. >> the big issue has been what

happened during the pandemic with the surge in sales. how do you make the sales profitable? we will hear from the ceo in a half hour's time. when we come back, we will talk crypto with bitcoin trading near a record high. right now it is trading at66,628. we'll have more on that story right after this. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪) the future is not just going to happen.

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good morning. welcome back to "squawk box." we're live from the nasdaq market site in times square. this morning, the futures are in the red again. the dow futures down close 50 points below fair value. s&p down 14. s that nasdaq down 106. bitcoin is basically back to those record highs from a couple of years ago. joining us now is anthony pampliano. founder of pamp investments. it is difficult to see where bitcoin is headed. in terms of things that are on the horizon with the halving coming up and the etf that was recently approved.

it is now becoming more mainstream. has it been two months? it started slow, but then it has been a rocket ship. >> if you look at the last 60 days and the next 60 days, the etf approvals were a huge deal. blackrock with $11 billion in the etf. they have added $1 billion in the last day. these are massive inflows for one fund. there are 11 of them. massive money coming in. 12 times more demand. also, as we near the record high, if we go back and look at past record high breaks or eclipse the old all-time high, bitcoin doubled in 18 days or less. once you breakthrough the all-time high, what is this worth? the world is figuring out that. in 18 days or less, it doubled in price. you add in the halving and we go from 900 per day to 450, then it

is hard to make an argument that it is moving faster than we expected. >> we need to say past results are not indicative of the future. you sound so -- it sounds that for anyone at home if they are totally new at this game, they may mortgage their house and put it all on bitcoin. there is still risk. >> i don't think they should do that. if you go and ask most people in the bitcoin world, they will say higher percentages than you expect in terms of what they put in. 1% to 5% for a traditional portfolio makes sense. >> you made a case for going from 70 to 140 in 18 days. that sounds like things you hear on tv where you want to stay away. >> bitcoin is up 20% in the last week. up 60% in the last month. up 200% in the last year. i'm not saying it is going to

$140,000, but it doubled in 18 days and there is a halving upon us. it is hard to not say this is likely to go much higher. what i think we pay attention to here is there are three main buyers in the market. the first is the pension funds. we had a fund in fairfax county. the cios there are up 12x on the exposure to bitcoin in that fund. there are four funds last year in all of state public pension funds fully funded. if they all put 1% in bitcoin, there is a strong possibility a number of the funds would get back to fully funded status in the next 15 to 20 years. you have sovereign wealth funds which have been quiet. there is etf opportunities. they don't have to buy bitcoin and take the risk. they can get the exposure without holding bitcoin. if a sovereign fund says we

bought bitcoin, there will be a global race with countries. >> do you think gold support with sympathy with bitcoin? inflation is coming down. is it the amount of debt and how quickly it is growing that has bitcoin and gold strong in recent months? >> if you go and look, one of the critiques was a zero interest rate phenomenphenomeno. rates are up. bitcoin is back to the all-time high and stocks as well. bitcoin is an index for global liquidity. the fed and ecb and japan are contracting, but china is giving the middle finger to the global economy. they are saying we are going to ease here and put liquidity in the market. bitcoin is a big, big winner. if you believe the dollar is debased, bitcoin is a winner. >> what's gold market cap?

>> 10 trillion. >> 10 trillion. some people are looking for bitcoin to be 10% or 50% of the market cap. you think it could be a multiple of the market cap of gold? >> today, bitcoin at $1.35 trillion is higher than the bond market. >> half of gold? >> now it is 10%. it will go past gold eventually. bitcoin is a 10x improvement on gold. if you are a 10x improvement, to be ten times the market cap makes sense. >> you are bullish? >> very bullish. >> i'm gathering that. no matter -- you know my feeling on this and i have not been quiet. i'm still going to get grief for questioning you at all from the whole base. that is the other thing. no one is selling. >> we could be wrong. >> if the network is not

producing it, where do they get the bitcoin? >> we could be wrong. >> anthony, thank you. when we come back, elon musk losing the title of the world's richest person at least for now. we have the details right after this. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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jeff bezos has takenover elon musk as the world's richest person according to the bloomberg business. it estimates the fnet worth as amazon shares risen. lvmh ceo was not far behind.

again, that has been amazon's fortunes rising with testsla's fortunes come back down. >> you get the island and the jet and you are just like the rest of us. are they really different? >> a little different. >> they have good cooks. how come all the best chefs are men? >> that's not true. coming up, apple's market dominance. we don't want to get into this. >> julia child. >> you have one. she's dead. aching a m ber... and more about discovering magic. rich is being able to keep your loved ones close. and also send them away. rich is living life your way. and having someone who can help you get there. the key to being rich is knowing what counts.

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. welcome back to "squawk box," everybody. apple news, sales of its iphone in khachina falling 24%, and amw

increased competition from domestic rivals like huawei, and its sales jumped 64% during that time. apple shares down by 2%, and as you can see, it has come down handily over the last six weeks or so. joining us, barton, we were talking about apple handing off the baton to everything related ai. how big of a setback is this for apple? >> apple is at a crossroads right now. they need to come up with a really kind of interesting ai innovation at their worldwide developer conferencein june. this is a stock where it's

legacy is built on disruptive innovation and it's really at a lull in that right now. the apple car shuttered after ten years, and vision pro, an uncomfortable device to wear. you own apple because you want to own the next leg of disruption, and the leaders, microsoft, open ai, they have more resource, and it will be a challenge to see if they can step up and do something that moves the needle here. >> what would it take? do you think that's likely to happen as an announcement this year? >> look, i think that they will clearly be talking about ai probably at the june developers conference. i think that the easiest thing

for apple to do is talk about the processing power in their devices, the mac book air, and they are promoting that as the world's best laptop for consumer ai. apple silicon, they are in processing. they can promote the capabilities there. what they might want to also do is come up with subscription services. the bar is going to be set by the leaders already. microsoft with their co-pilot, and google with their comparable add-ones. we moved to neutral apple in august, and any other stocks in

the magnificent 7 are doing better, and they need to shape up and ai is the best hope and there are clouds around that at this point. >> you have a buy rating on apple and amazon and meta, and your price targets are higher than where the stock is today. what moves it to that point? >> well, certainly the stock has pulled back. the 189 price target is still consistent with our hold rating. ai is what they need. if that moves the needle and stimulates more business, more demand for iphones and macs is where i think the real benefit could come. that could be a different story. that's contingent on them coming up with something interesting and needle moving in a sector where they are behind and other

players are bigger. it will be a challenge. >> the eu find that just came out, is that anything that concerns you or is that the same with the eu beating up all of the big stocks in the u.s.? >> well, meta has been beaten up by eu and others. what it speaks to, though, more generally is in regulators globally take a page from what the eu has done, and try and move apple more substantially from some of the choices they made to give them such a dominant position and such an economic benefit from the app store. at this point we don't expect a meaningful change versus what we have seen today. that's clearly a risk. china, which you just highlighted, there's risks that you need to overcome, and that's the challenge for the stock right now. >> thank you for joining us

today. >> thank you. when we come back, target just releasing quarterly results and guidance. the stock is moving higher. we'll take a look at that in just a moment. we have an exclusive interview with the ceo, brian cornell. that's next. "squawk box" will be right back. the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future. a future where you grew a dream into a reality. it's waiting for you. mere minutes away. the future is nothing but power and it's all yours.

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target reporting just a short time ago. the ceo, brian cornell, joins us live to talk about the quarter, the guidance for the year and the state of the consumer. fed jay powell will give a message to congress tomorrow. weight loss drugs can shed pounds but draining tax dollars. a guest will join us to explain. the second hour of "squawk box" starts right now.

good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market in times square. here with becky quick, i am joe kernen. andrew is off. tax dollars? >> yeah, and we will get that story. i still don't like needles in my lips, forehead or stomach. it will take time and convincing. we will be with you in a second, brian. do you have an opinion?

>> take your time, joe. >> you don't look like you need any of those -- well, you will see as time passes. you can see we are in the red. i still think apple, maybe somebody else can pick up the slack, but as long as apple is feeling the blues, i'm not sure we go much higher, but we will see. crypto was not listening to that. down over a percent today. i think i saw 68.6 at one point. >> i saw 67.99 something. target is out with better than expected fourth quarter results. it was much better than the 242 the street was expecting. also beating expectations. joining us is brian cornell, target's chairman and ceo. that stock, by the way, up by

7.6% so far this morning. thank you for joining us. >> good to be here. >> a lot of things to move through, on the quarter and year we just ended before we get to your guidance the next year. the thing that jumped out the most was the margins. >> i think it was a solid year. to see our profit grow by almost $2 billion, and really solid progress from a management standpoint. we are talking about efficiency work within the organization, and half half a billion came from operational efficiencies that we are continuing to focus in on. >> like what? >> inventory management played a big part, upstream in supply chain, instores, and the teams really focused on managing costs. we did see sequential improvement from the second quarter to the third quarter to the fourth quarter and a big

improvement in traffic. if you decide to join us later today, and we are down the street having our annual investor conference, you will hear me talk about we are not satisfied with where we are and the theme is a roadmap for growth, growing the top line and growing traffic and making sure that we make target a growth company again. >> how do you do that for a year? we are looking for the full year, comps to be flat, which is what the street was expecting. the street was around the midpoint, and for the first quarter you are looking for earnings per share to be below what the street was expecting. what is happening in the current quarter? how do you expect to change that through the rest of the year? >> becky, we have been working across the organization on great plans to stimulate traffic, and drive comp across the business.

we expect to see improvement in the overall company performance. we are putting a lot of time into ensuring we have the right balance of newness and that's whether you are stopping in the stores or online. we know consumers are shopping at the intersection between newness and value. >> the consumer is still looking at value propositions and you are looking at a consumer a little pinches come again? >> i think we have heard you talk about it for years now, and we have seen a very resilient consumer, despite inflationary headwinds, and the uncertainty over the market overall, and the consumer continues to shop. we generated $107 billion in sales on a yearly basis, and it's a consumer on a budget and are shopping carefully, and still looking for newness and

value and celebrating seasons, so we expect that to continue in 2024. >> the inventory issues were a couple years ago, and you have been dealing with them now for a couple years, but the stock bottom in october and november, like, 102. i am wondering what the last move from o150 to -- that was macro recession worries. a lot of your peers, the stock charts -- that doesn't show it. they have like a one-year start. was that what it was, we were all waiting last year for a recession? >> well, certainly, joe, there has been concerns about discretionary spending like apparel, in home and in toys. we have seen that over 2023. we expect improvement as we go

into 2024, and a big part of that is the work we will do, with our great partnerships and own brands to make sure we have the right balance of newness and value. >> when you talk about the inventory management, does that mean viewer skews, too, and does that translate into items not in stock or not? >> actually, one of the great outcomes, becky, we have more instock more often. we focus on retail fundamentals that that when you and joe come in, the product you are looking for is on the shelf at an added value and whether you are in a store or using our drive-up lane, and we are putting it in your trunk and bringing you now your favorite starbucks coffee.

reliability is important. when we have the inventory right, the entire system runs better. >> meaning what, though, merchandising means you picked the right stuff or cut back on the number of things you are putting out there? that's a tricky thing to do is the merchandise. >> yeah, it varies by category. we are looking at the number of items, and what is the blend of national brands versus local brands and how do we bring the newness in. when i think about newness and insta in inspiration, it has been beauty. we will take those lessons and bring it to the other assortment. >> you have been there for ten years? >> i have been there for ten years now, joe. >> do you think you do things

differently? are you better now? are there things you have learned -- what you have learned over the ten years maybe you would have done differently in the past? >> i think our entire team has learned how important is it to listen to the consumer, and i use that term, listening to our guests and we value the relationship we have with the guests that love shopping at target. we have to listen to the consumer and be on trend and understand how things are changing, and being in the retail business today, social is a big role on what people buy. if becky is wearing a white puffer at davos, and she tweets that, and the next day people will be in looking for that. we need to follow what is new and exciting and for us that's

foundational. >> should you be a great corporate citizen or walk a middle line and try to keep your head down and do what you do? you know what i mean? every ceo has to think about that now. there has been a little bit of a sea change in the last year or so where i read even for the super bowl, the ads this year, we want to make sure that we sell our product but don't want to make anybody mad here or make anybody mad here and we don't want to get into any of these things that some ceos were embracing a couple years ago. >> joe, we talk about target being a happy place and bringing joy to those that shop us every week. >> no drama, just be happy. >> great product, great newness, a great value, and great guest experience in store or online, and when we do that well, we get

rewarded. >> you can't make everybody happy all the time. >> we serve all of america. we have a stat we will talk about today, and i will try not steal the thunder from our conference, and we appeal to everybody, and we need to make sure we are the happy place in new york, los angeles, minneapolis, and we want to make sure the brand is for all americans. >> what are your goals for the year? >> becky, we will go beyond one year and talk about the next ten years, and the investments we're making in our stores, the number of new stores we are going to open up, and the number of stores we will remodel. the investment going to make the supply chain technology. i will tease this a little bit. we are talking about enhancements we are making to our loyal target program, and we

see enhancements to that program. >> a reuters story think you are going to refer to project trident. is that what you are talking about? >> i am. one of the things i will tell you is, we will put a big emphasis on target delivering the same day to your home, to make sure it's food and beverage, america knows -- >> i already pay a membership fee for that, and is this going to be something that includes that or beyond that? >> you will have to wait, but it's something beyond that. it's going to be something that drives growth for us go into next year and we are excited about talking about it later today. >> you have seen mazcy's and wht has happened. >> i sure have. >> do we not need macy's in

america? >> we have to say, all right -- >> you look at that as an opportunity? >> absolutely. almost 2,000 stores across the country. when we see that happen, we have to say how do we lean in and introduce the target brand and the apparel offering to those consumers. one of the things i am excited about is the work our apparel team has done. if you are walking in the stores right now and walk into a target store, what you see from our spring apparel collection is something you and your daughters would enjoy. we have done great work there. on trend, great color and great value. that's what is going to get us back on track with growth next year. >> reminds me of the opportunity when toys "r" us closed down, you stepped into toys in a bigger way. >> one out of every four toys is sold at target. when we see changes like that,

joe, we have to lean in. we are going to get back on offense is going to be our message today. >> jp penny, macy's -- for every crisis that can be an opportunity for target. >> we have opened up 200 new stores across the country and remodeled over 1,200 stores. we are putting capital to work. that drives more traffic. it makes our brand more prominent. we will continue to invest in new stores for the next decade and that's going to be part of the long-term growth. >> you are talking about investments over the next ten years that costs money, is that going to defer from any of the things your shareholders might be looking for, and i did realize you didn't buyback any shares in the fourth quarter. will you pick that back up? >> our improvement on the cash be position, we improved our cash from $4 billion to $8

billion. our pry orr tease have not changed. we will invest in our business first, and we have a long history of paying a dividend, and the dividend over the last ten years has doubled. potentially later this year we will start to buy back shares. >> but that's the order? >> yes, that's the order and it has not changed. >> and the biden administration will look into price gouging from beef to housing and all kinds of things, transportation, that they are looking at. where do you see the inflation battle right now? where are prices and what are you able to deliver to consumers? >> i think inflation has been the stickiest with food and beverage. if i go back to pricing prepandemic, for many food and beverage items, the center of store grocery items, they are up 20 to 30%. >> for your costs? >> for our cost and the

consumer. when i think about the challenge the american family is facing right now, yes, interest rates are up, and gas prices have been volatile, but if you are feeding your family, and those prices were core food staples are up, that's putting pressure on your wallet. >> thank you for coming in, and in less than two hours you will be speaking to the street right here. >> what time is that? >> 9:00 a.m. >> i have to juggle a few things. >> front row. >> i will have a seat for you. >> refreshments? >> i will make sure there are drinks and snacks. >> the stock right now looks like it's up by 7.3% based on the earnings from today and the guidance they have given for the full year.

coming up, we will look at other premarket movers. and also, thomas hoenig on the fed. "squawk box" will be right back.

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plus, ask how to get up to a $800 prepaid card with a qualifying internet package. don't wait, call and switch today! look at this morning's premarket movers. what is your schedule? where did i see you yesterday? i am trying to figure out my schedule today. what did you anchor yesterday? >> i anchored the exchange and power lunch -- >> i am going to write that down. so i will see you at 1:00? >> you will see me today at 1:00, and then at 2:00 again as well. me and courtney are doing it together. >> i am setting my whole planned schedule based on that.

>> these days we have so many people moving in and out of the office, on assignment and vacation, it's patchwork everywhere, so don't set your eternal clock by me whatsoever. our managing editor would say to check the planner. >> what is it called? >> it's called the planner. >> let me look at that. >> joe, let's take our tech theme this morning with morning movers. we will start with tesla down roughly 2% this morning, and half a million premarket trading volume. it's related to chinese sales data for tesla that reverb rated across most of the ev stocks and global market. the german facility halted operations due to a power

outage, and tesla did confirm the halt in production as well as an evacuation of the site. local authorities are looking into if it was a possible arson attack, but tesla down 2%. apple, down around 2% as well. it is following a 2.5% drop yesterday. part of the news is because of the news in the european union. this morning analysis counter point research estimate apple's iphone sales in china fell 24% last year. we will end with a check on another tech stock and china story as well, and that's advanced micro, and it's down half a million shares of

volumes. amd did not get permission from u.s. regulators to sell an artificial intelligence-related chip made specifically for chinese markets because the chips were still too advanced, which means it will have to apply for the export license. that's according to a report from bloomberg. the u.s. commerce department and amd did not respond to the request for comments. joe, i will try and remind you about setting the clocks -- >> i found something called the squawk planner! whoa. all we need to do is help china with ai? >> i think that's where those

rules are in place, so we can maintain the competitive advantage. >> they are never going to have fire a shot. >> the warfare will be over digital and computers anyway. >> there's a different planner you are talking about? >> yes. >> why not roll it. >> thanks, dom. still to come, china setting a target of around 5% for gdp in 2024. we will get the work details from beijing. that's next. the futures this morning still under a littlereur psse. looks like do you futures are up by 65, and the nasdaq down by 92. "squawk box" will be right back.

growth target of 5% for 2024. the announcement was part of the national peoples' congress annual meeting. i was fascinating by some of the coverage today of what is happening, but bring us up-to-date with more from beijing. >> reporter: joe, the targets are largely unchanged from last

year. but because they are coming off of a higher base, they are seen as quite ambitious, especially without stimulus. to support growth, china said it was going to set a fiscal deficit at 3% of gdp, and also fishing long-term bonds and other special bonds to try and help with the growth. it said that the money would be spent on what they described as major national strategies and strengthening security in key areas. now the premier, who announced those targets admitted it would be difficult for china to reach the goals. at the same time he said that the country was going to stick with its policy approach of proactive and prudent, so not really signaling any change. however, there was a hint of potential changes in the government work report for the first time since 2019. the report dropped the reference

that president xi jinping has had, house something for living in and not speculation, and that is raising hopes that the curb on real estate is going to be lifted further. there was a lot of discussion on tech self reliance, and the importance of promoting made in china brands overseas. interesting, joe, you would probably take special interest in this, they dropped the reference to peaceful unification with taiwan, just saying reunification, in their terms. also, what was interesting is there was a call for a reform of global governance system and opposing what they described as bullying acts and hegemonic bullying accounts without mentioning the united states,

and that's interesting, and dropped from last year any reference to upholding the international order, and that's suggesting we could see a more assertive china on the world stage. >> just reading that, and covering "the wall street journal" today, too, and some of the conclusions that the piece draws about kind of almost a shift in priorities away from the amazing growth that we have always seen in china to something called quality -- high-quality development, which emphasizes national security, political stability and social equality. that is truly a shift from what we think of in terms of the envy of the world. it sort of is embracing the hybrid capitalism, communism,

and if the rest of the world tries to bully china to open up the human rights and trying to give them the freedom much of the rest of the world enjoys, that's us bullying them, that's not the ccp bullying -- that's rich. you don't have to respond to that. i am way over here. i am way over here. but that's rich to me. but that's scary about taiwan, too. that seems pointed that they left that out. >> reporter: yeah, i think that what we are seeing is perhaps a move towards a codification of national security being more important than the economy. throughout the period and especially the run up to the national peoples' congress, there has been a projection of confidence in the economy, and a

lot of discussion about how economic issues will be on the agenda. what we have seen is what you described, a shift. the economy in the past, we always thought china would be more pragmatic and prioritize the economy and it's shifted towards a national security. >> seems like a strong economy solves all ills, but it does not solve -- it does cause people to have hopes and dreams and everything else, so maybe it makes sense for that system. thank you, as always. appreciate it. when we come back, will fed chair jay powell double down on the no rush to cut message when he testifies in front of congress thiwes ek. congress thiwes ek. we will speak to and 3 vitamins.

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thomas hoenig, so much has happened in terms of our perception of the economy, rate cuts, recessions, everything else. what do you think is at this point in time -- where are we and has your view changed at all about what we need to do if you were on the fed? >> well, things have certainly changed, and mostly by surprisingly good outcomes. i think that's very positive. i think the fed realized and most people do, that the economy is stronger than they thought it would be, certainly stronger than i thought it would be and going into this year it remains that way. we do have inflation above the 2% target, and they will focus on that, i suspect. i think powell in his testimony will be careful to say we're very pleased with the economy

going forward but we have not gotten to the 2% target yet, and as long as the economy remains reasonably strong we will continue to shoot for the 2% target, and he will say indirectly if not directly don't expect rate cuts in the immediate future. >> not in the first half of the year. your money is still on from rate cuts in the second half of the year? >> well, i think -- i think that's reasonable, whether it's three cuts, i don't know, because the economy is really strong. the other part of it, i think, people maybe need to take a look at is when you think about the economy right now and the amount of debt and the strength of the economy, there are a lot of economists talking about the eq equilibrium rate, and you have a 2% inflation target, your longer

run fed goal, they may take more time if the numbers stay in the 3% range, as they have been for over half a year at the cpi level. i am not convinced they will cut rates in june, but they may. there will be enormous amount of pressure, no question about that, and we will see how they handle that. >> you have been able to figure out why the economy has confounded so many people on being stronger, and is it leftover pandemic stimulus or leftover fiscal stimulus from the first few years of the biden administration? >> i think so yes. i did not realize how much liquidity and fiscal stimulus was being brought in. when you think about it, not

just the pandemic issues but the c.h.i.p.s act, and it has all added to the economy and boosted it, and the public and subsidies and so forth were stimulating the economy, and that's why the economy has remained as strong as it has. plus, the consumers have a lot of excess savings they have been bringing down, but because the economy has been stronger, real wages have out spent inflation for a while, and the spending abilities are quite strong even now, recognizing in january we saw slowdown in the consumers, but i think the duration of their ability to spend is in play and that will affect the economy going forward? >> that's a dangerous lesson if people take it as a new economic model where there's no, you know, day of reckoning, and it's

basically free lunch, because why didn't we spend twice as much and we would have 6% gdp, thomas? in the back of our minds, we know there's $34 trillion out there that will require debt service. when does that happen? >> i think that's a real legitimate concern. i saw an article yesterday being written by an economists, money is free. let's do that. it worked so well. and many are saying 3% inflation is just fine, let's settle for that. you do have that coming forward. the enormous amount of debt that is coming at us and the interest on that debt will eventually, i think, cause us to become a less settles economy as we go forward, because we are sa siphoning more and more off in the private sector, we have to, either through inflation going

forward, and the outcome of that is lower productivity rather than higher productivity that we are enjoying now and hope to enjoy in the future, and we may be accepting that more in the future as we spend more in the long run. i think that's unwise. >> maybe ai will help us, thomas. the panacea. i don't know when it comes home to roost, but you have to worry about that, it seems, although we have been worried about it as long as i have been doing this, and it still hasn't come. >> i will tell you something, though, we do see it, we have had a major crisis in the '80s, and we just dodged one a year ago, and they are out there and something could, i think, will break the dam and then we will

have real problems. i think it behooves the fed to say enough, we are going to focus on stable prices and also we are going to focus on maintaining a policy that repays that over a long period of time, and not dropping interest rates back to 2% anytime soon. >> former kc fed, thomas hoenig. thank you. >> bye. coming up, how the weight loss drug craze could hit americans in their pockets. former director of the council is here to explain. shares of target right now, that company reporting earlier in the program, reported numbers better thanexpected and gave guidance in line with what the street was expecting for the full year earnings. that stock is up 8%, a big part

of it is the margins that ov greatly. we will have much more on the numbers and the consumer coming up in the next hour. "squawk box" will be right back. this is "real time insights." i am here with john hallmark, legislative leader. the executive order on ai deals with safety and innovation, but what do business leaders need to focus on? >> most importantly that it applies to them and they should pay attention to it.

this is like the dodd/frank bill for ai. disclosures and mandates, regulations. >> talk to me about how companies will be impacted? >> companies will be impacted in a number of ways. the financial services, health care, food systems and supply chains, incredibly broad. these companies will have to deepen their understanding of ai and how they are employing ai in their firms. >> what actions should executives take right now? >> executives should be adapting and engaging. we are engaged with clients right now to develop risk management governance structures and working in washington, engaging with policymakers, and we are developing standards around the executive order. we will help equipped companies for the road ahead. >> important insights. john, thank you very much. >> thank you.

welcome back to "squawk box," everybody. a couple of corporate headlines, a group of banks including morgan stanley in talks with elon musk about refinancing what was used to purchase x. and then peltz calling for an overhaul of disney, and this comes as he prepares to face-off in a shareholder meeting next month.

it's super tuesday, super taco. they know i am the ultimate fan boy -- >> this being taco bell? >> this is from taco bell. it says love taco bell. it's not from anybody specifically, and they say, joe, last year taco bell freed the taco tuesday trademark to give everybody the chance to celebrate tacos. people are dissatisfied with the candidates, and i have talked about possibly getting -- my platform was just one thing and that was to make taco tuesday a national holiday. that's the only thing i am running on, and they mention that here so they were watching, and they dropped off about eight of these boxes -- >> boxes of tacos. >> i had to take a moment. i did. because i was -- i don't know if i was touched or happy, and -- what do you think?

i think it was a little bit both, right? i was touched and happy. >> i still am. let's go to break. >> these are good. i am the beneficiary. >> okay, coming up, we will talk about fat people and ozempic -- >> as i am eating a taco. >> the latest op-ed and the te costs. and eric cantor will be back to talk about the white house and what it could mean for your money. we will be right back.

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welcome back, everybody. the weight loss drug craze could hit american taxpayers' pockets, that's according to former economic council member, brian deese. he warns that making these drugs

available to all obese americans could cost taxpayers more than $1 trillion a year. brian deese joins us right now. he's got more on all of this. he is now an innovation fellow at m.i.t. and brian, the numbers here are pretty staggering. why don't you walk through the math that you got to this $1 trillion. how does it add up? >> they are. it's good to be here, and i'm really glad we can do this on taco tuesday with all those tacos laid out around the place. look, when i started looking into this, i, too, was really blown away by the numbers. we have a massive obesity crisis in the united states. and the scope and the scale is so large, that these drugs could touch tens of millions of americans. that's the good news. they have the potential to reduce obesity, address diabetes, and reduce the health care costs associated with that. the problem is that the scale and the cost of these drugs is so large, that it could add enormously to the federal budget. so on the numbers, if you look

in our median case, you're talking about $44 million people getting these drugs. at current prices, $15,000 a piece. that's more than $1 trillion gross of cost to the federal government balance sheet. now, there is a savings, because we are reducing health care costs, as well, but unfortunately, those savings only amount to about $200 billion a year. so you're left with about an $800 billion a year bill. and just to put that in context, that's about as much as we spend on the entire medicare program today. so if we don't do anything, and the status quo is what it is, and we do allow this drug to be available to americans, we could be building in a cost to the federal budget, spending on the order of another medicare assisted with our budget. we can't afford that as a nation, but i don't think we can afford not to have these drugs widely available, either. we're going to need to do something different here. and it would be better for policy makers to address this now, rather than to let those costs explode and try to catch

up on the back end. >> hey, brian. i appreciate the math, and understand the problem this poses, but your prescription is one that is basically -- you're saying, we should basically just take and cut the prices that we will pay for this, take it over, let medicare and medicaid say that they're going to negotiate with this brand-new drug class, which is a step further than even the ten drugs that are now being allowed to be negotiated for, drugs that have been on the market for a long time with a big base. i have a hard time understanding how that's not just basically ip theft, taking things over, and how it doesn't kill innovation for anybody who's trying to come out with some of these drugs that could be really miracle-like drugs. >> look, we want to find a balance between encouraging innovation and also not exploding the deficit. and as public payers, if you're going to be paying that much,

you do have leverage and you should be able to use that leverage in the marketplace. it's not good public policy, but it's not good for the private sector, either. because we will quickly run into a situation where the magnitude of the profits involved here, basically represent a direct transfer from u.s. taxpayers to shareholders of these companies. you know, the innovation point i take seriously, but also, let's be specific about that. the hurdle rate for drugs today 19 -- private drugs today is about 8 to 9%. 8% of capitol, 9% of revenue. last year, novo nordisk, for example, saw net profit margins in the 35 to 40%. so 4 to 5% the hurdle rate for investing in these drugs. so there is, there is an opportunity here to come to a more reasonable price for the u.s. taxpayer, without

discouraging innovation, and frankly, by using some of those proceeds to invest in public innovation, as well. so there's a balance to be struck here, but we also have to realize, the status quo. you guys were just talking about the deficit and the national debt. status quo here is we are moving towards place where we're going to blow a giant hole in the budget. better to act now, and to act prudently. yes, but this is an unprecedented situation. >> given so much credit or -- your -- it's a big leap to think that the government can be effective in walking a fine line of what you're trying to do, brian. and my example would be, let's say alzheimer's, we know what it costs, how much it costs long-term for families and everyone else. if i were a drug company and i knew that you were going to seize my drug because i was earning what you believe is

greater than my profit margin should be, i wouldn't develop that alzheimer's drug. and you say 8 or 9%. you know why novo nordisk is getting 35%? because companies like pfizer screwed up and didn't get into this business. so their stock is down 50%. so an innovative drug company that makes all the right choices for its shareholders, which risks their money to try to make -- yes, to try to make an outsized profit, suddenly, you're looking at that profit saying, oh, no, no, no, that's for the public good. we as the government are going to decide how much we can let you have, so that we don't blow out the deficit. that's not the way, you know, free markets work. that's the way central planning works, brian. >> no, look, let's -- i appreciate the over-the-top rhetoric, but let's be clear about how health systems work across the world. federal governments across the world are payers in these systems.

today, the cost of this drug in france is $1,500, in denmark, it's $3500. in the united states, it's $15,000. we're not talking about anybody seizing ip -- >> they don't develop any drugs anymore over there, because they've overdone it. and we're -- >> and we're not talking about seizing ip. we're talking about seizing ip or anything like that. we're talking about negotiating a fair price. >> there's that "fair" word. >> and if we don't, fiscal consequences are even worse. >> all right. i guess we've got to go. >> brian, thanks for laying this all out. it's a question i'm sure we'll be circling around andwe appreciate you coming on today. >> enjoy the tacos. >> thank you. >> now i'm not going to eat them, because i'm not going to get any ozempic. they took my ozempic. coming up, team getting squeezed by anti-the trust regulators as they try hold off competition in the phone space and build out its ai program. a closer look at what investors should do with the shares right

now. and later, transportation secretary pete buttieg igis going to join us. "squawk box" will be right back.

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sharply. shares of the retailer surging on strong results. and a super important super tuesday. voters heading to the primary polls in more than a dozen states, with former president donald trump looking to add to his lead over nikki haley. we're going to talk top issues for investors. and ahead of the president's state of the union speech this week, his administration is trying to highlight what it sees as its biggest accomplishments. transportation secretary pete buttigieg will join us on where the money is flowing from, from biden's -- flowing to from biden's infrastructure law. final hour of "squawk box" begins right now. good morning, everybody. and welcome back to "squawk box"

right here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernan. andrew is off today. and on this tuesday morning, a little rainy here in ngew york. you can see a little bit of rain falling on the equities futures, too. dow futures down by triple digits. a decline of 105 points below fair value. nasdaq futures also down by about 100 points below fair value. the s&p futures down by 17. this comes after a rare down day for all three of the major averages yesterday. let's take a look at what's been happening in the treasury market. yesterday, we saw higher yields. today, a little bit of giveback. the ten-year yielding 4.18%, just below 4.2, and the two-year at 4.58. bitcoin prices, by the way, we're giving a little bit earlier this morning, but you're still talking about bitcoin above $67,000. 67,453 right now. and target shares jumping on better-than-expected fourth quarter results. the company beat profit and revenue expectations for the

current -- for the last quarter, for the fourth quarter. same-store sales were down by 4.4% in the quarter, but that was a little better than had been expected. and target's operating income margin rate improved to 5.8%. that was up from just 3.7% a year ago. speaking with us in the last hour, the ceo brian cornell weighed in on the state of spending. >> the consumer continues to shop. you know, on a full-year basis, we generated $107 billion in sales. and a big part of that came from discretionary categories. so, it's a consumer who's on a budget, they're shopping carefully, they're still looking for newness, they're still looking for value, they're celebrating seasons. so we expect that to continue in 2024. >> in terms of guidance, target says that it is looking for full-year same-store sales to come in flat to up 2%. that's roughly in line with street expectations. and the midpoint of its full-year adjusted profit guidance is just a few cents below what the street had been

expecting. i think 9.10 was the midpoint of its guidance. 9.15 a share is where the street is. >> shares of apple's iphone in china plunged 24% in the first six weeks of the year, according to a report from counterpoint research. apple's facing stiff competition over there in the market, from firms like huawei, oppo, and vivo. and the news comes one day after apple was hit with a nearly $2 billion fine from european regulators over music streaming. joining us now is toni sacconaghi, bernstein senior research analyst. a lot is swirling around, toni, and i can't rank which concerns have hit the stock or i sort of hit the road, which we've seen really for decades, almost. but i'm worried that there was a

bit of a sea change. is there? or once again, demise is being greatly exaggerated. >> good morning, joe, there are a lot of factors swirling around apple today, but i think the core of the business. this is a company that has about 1.2 billion unique users, and they have a capability to develop flnew products that consumers want to go and try. the vision pro is expensive, and it's not going to be a mass market product for several years, but apple has the brand and cache that consumers will embrace new products and equally important embrace new services and that platform isn't going anywhere. and apple has the opportunity to leverage that going forward and so i think if i had to dimension

the next five years, the last ten years, they've grown about 6%. the next year will be more muted. that's still pretty good, particularly for a company apple' apple's-sized. >> in the past, legacy have started to miss out and the worry is that could happen with a ai. it seems like it could be in a more advantageous position than some of the other companies we think about in the past. >> so, joe, you raise a great

point. if you look at the leaders in technology every 20, 30 years, they change. and the risk of platform disruption is real. and i think that's why you see apple taking steps to try and be a leader in wearables with the watch and with the vision pro going forward. i think ai is certainly really important transition point in technology. i think it will be one of the most significant forces, both societal and technologically for the next 20 or 30 years, but i do agree with your assertion, that apple has this powerful install base, and the question is, can it use ai to add more value to that installed base? and i think it can. we're seeing ai phones launched in the marketplace. google has some, samsung has

some. we think that apple will have ai-eenabled capabilities in its next phone coming out in september. so i don't think this is -- and obviously, the iphone will allow access to chatgpt, co-pilot, other third party ai capabilities. so i don't, at this point, think that apple necessarily has to be, you know, the leader in generative ai. i thinkthal have a lot of ai on their device that will make the device easier to use, and there will be an access point to other generative ai applications. >> i think we -- i don't know what the market cap was in apple when we said, what's next? what about a car?

entertainment? all of those things. somehow it has gone almost 3 trillion, not quite, but it was close, just on building out services in the ecosystem. and i guess there's no reason to think that can't continue if you do that effectively. >> i think what apple has shown with services is, so this is a business that's a little over 20% of revenues. it's been growing double digit, so services alone is adding almost three points of growth to apple every year. and it's a function of a few things. apple is introducing new services every year, whether they're media services or financial services. they're deepening penetration. it feels like i need more storage for icloud, seemingly every few months. they're taking price on some of those services. and they're deepening penetration. there are many parts of the world where people still don't have services. that trifecta of being able to sell services in new parts of

the world, raise price skand introduce new services, likely means that business can grow double digits for several more years. >> all right. the demise greatly exaggerated, but you did sate, that's ratcheting down growth in revenue and earnings, i guess, toni, but that's still pretty good, nonetheless. and that would still compound on the stock price if the multiple stays the same and it's not that expensive, either. maybe it is -- too early to say until it's over. . last point on evaluation, if we look up apple's evaluation, obviously, it's come in. the most important metric is what is apple trading at relative to the market. the five-year average is about 1.3 times on a price-to-forward earnings basis. six months ago, it was 1.5 times. now it's 1.3 times.

it's at its average valuation in the last five years. >> thanks, toni. >> thanks, joe. when we come back, transportation secretary pete buttigieg will weigh in on jetblue and spirit airlines walking away from its merger deal. next, it's super tuesday. we'll talk top issues for investors as more than a dozen states head to the polls. stay tuned, you're watching "squawk box" andhiisnb ts cc. it's basically tennis for babies, but for adults. it should be called wiffle tennis. pickle! yeah, aw! whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey!

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it's super tuesday, perhaps soon to be super taco tuesday. we don't know for sure, eric. the biggest primary day, though, on the presidential nominating calendar. 16 states in one territory have a caucus or a primary today. and former president donald trump looking to further cement his lead against former south carolina governor, nikki haley. joining us now on the most important issues for investors and voters at large, eric cantor, former congressman from virginia, who served as house majority leader. he's now vice chairman and managing director at molis and company. have you got tips for becky, tips for -- becky and me to navigate the next how many months it is? how do you suggest we get through this, being on cable tv? >> 35 weeks. you know, it's really like, today, you know, it's almost

like a non-story, because you sort of know how it's going to end today. >> yeah, but when the battle really begins in earnest between these two candidates and their people on the respective sides, i don't know. i'm going to need some type of medication, i think. >> no, but i think, you know, what the job of an incumbent -- because when you're incumbent like president biden, you don't want this to be a rurm referren. it is about a contrast for him, versus the public like voting on whether they like this biden economy. and clearly, he's not done a great job. i just heard briandeese on the show, and you know, again, that's a perfect example of their economic agenda in the

biden administration. unfortunately, unfortunately, they've littered it with acolytes of elizabeth warren's, and especially it's blame business, business is making too much money, in fact, this week, they said, we're talking about how corporates rip off the public. blame business, tell business, i'mgoing to tell you how much you can make. and that's just not who we are in america. that's not our -- >> the crux of the matter is, we're going to have pete buttigieg on, and i know exactly what we're going to hear from him. and i don't even know if i'm going to have the -- i may not be able to -- i might just let them go. at this point, i know what a lot of it is -- >> what do you think he's going to say. >> don't believe your lying eyes, here's what's really happening. border's secure. there's no big-city crime. >> no inflation. >> president biden is as sharp as he's ever been. and people are -- the economy is great and people just don't appreciate it, because the media is making it seem like it's not

great. but the polls have been absolutely horrific in the last week. not from typical -- not from right-wing heritage or national review or fox news. it's been from "the new york times" and cbs, these polls. and you've seen 'em. >> right. >> you can cut it with a knife, how unhappy people are with -- they want donald trump's policies. where did that come from? how did that come from? >> and the reality is, is it is still a cost of living election. you know, you just had the ceo of target on earlier, brian cornell, who said that the actual cost of food and services is up 20 to 30%. that's a lot for people. >> you've been watching all morning. >> yeah, i have. and that's a lot for people. and it's reality. it's not just the polls. the polls are reflecting where voters are in earnest. again, i just think that this is a real point in which biden is going to have to step up and either contrast himself with -- >> how much do you think, though, is a problem with the

policies, a problem with how americans feel? how much do you think that this is a question on the age referendum? we have two very old candidates who are going to be running for this. and biden has not been out in front of the cameras very much. >> warren's 95. >> he's 93. >> i don't think 77 is old. and i don't think 81 is old. i think joe biden's old. >> people do age at different -- >> they do. >> he has declined, i think, pretty significantly over the last eight to ten years, for sure. and he does not present well, and this is the democrats' problem. >> eric, not the only -- "new york times" -- i don't even know how you could get a poll like this. only 18% of voters told "the new york times" that biden's policies have benefited them personally. 40% said trump's had benefited them. so what happened -- it's almost like a, like a nostalgia, rich

lowry, the national review, said that trump nostalgia is setting in. what, january 6th is settling in the rearview mirror? and what are they remembering? wage gains or -- >> listen, if you remember, before covid, you know, we had the impact of the tax cuts, you know, that will be a discussion, if you're talking about the next 35 weeks, that will be a discussion that we'll have, because the tax cuts will expire, and they'll be up for renewal. that's a $3.2 trillion issue. huge fiscal stress in the country given the interest costs to the debt. so it will be, you know, if you're thinking about how they deal with navigating, i think what business has done, is they've been able to sort of block out a lot of the noise. and i think if you look to where things are heading, number one, the border crisis is dominant. that's become the number one issue. which is pretty extraordinary. we're sitting here in new york city, how far away are we from a border, but it's now an issue here. >> i can tell you what i'm going

to hear if i brought up the border. the president put together a bipartisan border plan, and the republicans voted it down, because donald trump told them to vote it down. but we know full well what happened three years ago. we know full well. and i think the people know full well. and they're not buying it, but i guarantee we're going to hear it in ten minutes. >> they're going to say, listen to me, do as i say, not as i do. >> don't believe your lying eyes. >> don't believe your lying eyes, i like that. but on the border, the real question is, border has not done. you know, title xlii went away because of covid. they couldn't go and put that back into place. but the bottom line, he's not done his job in leaning on mexico to try to make sure that number one, that they can secure their southern border, and number two, that, you know, that they can -- he got rid of "remain in mexico", he has to talk to that government there the way that trump did. and people see through it, they know he's not leading. that's the real thing, joe.

and i know the hyperbole is just deafening sometimes, but we'll get through it. we've got a great country. the deal market is slowly coming back. the interest rates, there's a little bit more clarity around that. people are feeling a little bit more comfortable with the economic environment. >> i still think that, when push comes to shove, though, in a general election, it's going to be tough for trump, because i think abortion is still around, and everything -- and the polls can say one thing, but when it's all said and done, in spite of everything, biden could still end up getting a second term. >> get 35 weeks. >> and it's close. and we've talked before. there's a polarization that's set in this country, almost a parody. it's going to come down i think four to five states period, and probably given how parties perform, it will be in the big suburban counties, in those four, five states. and you're right, if you're thinking, who will decide who is that small portion, it's suburban professionals and especially women. abortion is an issue.

>> the only thing is a border might -- across all demographics, people are more, somehow more comfortable with some of trump's policies. across all demographics. in "the new york times" poll, all demographics. they're double what support was three years ago, four years ago. and the border and what people see day in and day out, i've even said women quoted, i'm worried about abortion, but the border is actually -- >> that's what's right in front of them. and i think trump's been actually pretty good at how he's no navigated the question of, you know, abortion. and so, we'll see how that plays out, but i do think, gain, the contrast, if biden even gets there, and is not a referendum, it's so easy for trump to sort of dominate in that discussion, because there is no contrast. there's just a blame game on the democrats' side. listen, becky, you're right. it's going to be close. abortion is a real question. foreign entanglements.

this is another thing you hear in the business community about sort of multi-nationals thinking about cross-border m&a, and how do we deal with the trade issue? i mean, how do we deal with our position in the world. trump is very, very opposed to where the biden administration is going on ukraine. we'll see how this issue in the middle east plays out. there's a lot that i think that we're going to have a discussion, in where the country -- >> we keep pulling you back in to this other stuff. like godfather iii. i'm sorry. we've got to go. >> it's 25 years of my life in that world, i get it. >> which is better. your new life. all right. when we come back, transportation secretary pete buttigieg will join us live as the biden administration preps for a critical sta oth iospeech. qu "squawk box" will be right back. at morgan stanley, old school hard work meets bold new thinking. (laughter) at 88 years old,

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you'll hear me talk about the fact that we're not satisfied with where we are. and our theme today is all about a road map for growth, getting back to growing the top line, growing traffic, and making sure that we make target a growth company again. >> that was target ceo, brian cornell, who joined us in the last hour, talking about what he plans to tell shareholders at today's investor day, following this morning's fourth quarter profit and revenue beats. that stock this morning, up by 8.3%, after those results, and michael lasser is ubs retail analyst. he joins us right now to talk a little bit more about it. the company pretty convincingly beat for the fourth quarter. its guidance for the full year was about in line with what the street's expecting, but the guidance for the current quarter is below. still, you're looking at that stock up more than 8%. why is that? what did you see that you liked? >> i think there are three reasons why the stock's up. number one, it's getting its traffic back. it was only down 2% this quarter after being down mid-single digits for the last few

quarters. number two, the profitability of this business is returning back to where it was historically. and number three, i think the market's looking at the outlook, and saying, it's set a conservative expectation that will afford them to have an upward earnings revision cycle that will continue to drive the stock. >> why was the traffic down, do you think? >> i think the traffic was down for a couple of reasons. one, target overindexes to categories that wereunder pressure. things like consumer electronics, which was about 10% of the sales in the fourth quarter. toys were under pressure. a home, that's a third of the -- that's a third of the company's total sales in the first quarter. >> those three items. >> those three items. so despite that, it still was only down 2%. that's an encouraging sign. so if you weighted sales by category, all things considered, it's doing not too bad. >> brian talked a little bit here about what they've been doing to try to raise their operating margins, raise their profit margins. and a lot of that has to do with

cutting the number of skus, with making sure that they really have inventory under control and they say are putting the right things out there. that's a tough game to continue to play. >> yeah. >> you have faith that they're on the right track with this? >> i do, i think they will be a little bit more aggressive in the categories where there's strength, areas like beauty, certain consumable items. they just launched a new more value-oriented line of food products. so i thinkthal make some very strategic bets on inventory, which is key. because they need to be able to maintain a positive sales momentum, as well as improving margins from here. >> you got your buy rating at $174. that stock is up more than $12. >> so what do you do with your price target? >> we're constantly arriving our price target, but one way to think about it is that this print put target in position to resume a 6% operating margin.

it guided 860 to 960 for this year. if it hits a 6% operating margin, its earnings will be close to 10.50 close to $11. and if it trades at the same multiple, that's close to a $100 stock. so there's still catalyst on the horizon. they'll be at the ubs consumer conference next week, where they'll be in front of investors to further reinforce this good story. >> thanks for stopping by. >> good to see you, becky. >> thanks, joe. coming up, pete buttigieg joins us live on jetblue's failed merger with spirit airlines. talk a little bit about boeing and the other spirit, spirit aerosystems. this week's state of the union speech and much more. "squawk box" will be right back. w about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers?

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welcome back to "squawk box" right here on cnbc. the futures have been under pressure this morning. right now, it looks like the dow futures are down by about 122 points. that's about the weakest we've seen all morning. nasdaq futures down by about 110. the s&p down by close to 20. president biden set to deliver his state of the union speech on thursday evening,

ahead of the event, his administration is highlighting what it sees as its biggest accomplishments. some of those are projects funded by the infrastructure law from 2021. joining us now to talk about that and some other key issues, transportation secretary, pete buttigieg. it's good to see you, mr. secretary. can we start with faa-type stuff. then we'll get to this politics stuff a little bit later. tomorrow's -- thursday is a big night, we understand that, and we'll get to that as quickly as possible. but number one, i guess, jetblue, you agree with that, that it's good for consumers, that that's not going to happen with spirit? >> yeah, we weighed in as a department to back up the department of justice, largely because of concerns about what has happened over the years in the airline industry. you know, back at the time of the deregulation, it was confidently predicted that there would be about 100 major competitive airlines in the united states, by the turn of the century. obviously, things worked out

differently. we have had fewer and fewer airlines, more and more concentration, more and more consolidation. and that has an affect on consumers. so just like across the administration, we're taking a tougher line on anti-trust, really concerned about what's happening to consumers in any sector, including travel and tourism. this is one where we had a lot of concerns, stood with doj, and i think right now, having more airlines rather than less airlines, more competition rather than less competition is good for passengers. >> the latest on that other issue we talked about, and it's not spirit airlines, spirit aerosystems, so it gets a little bit confusing, but there's some talk maybe boeing just finally buys spirit back in. but at this point, the faa, i think, has been visiting both companies, and it's going to continue on-site presence at both boeing and spirit. what needs to happen?

do they report back to you on what they're finding? how do you fix quality issues that seem like they might be more than just a one-off? >> there was an intense round of visits. we had faa boots on the ground a few days ago. the administrator met with the senior leadership of boeing, communicated some real concerns about what seems to be their inability to comply with the kind of quality control practices that faa expects of them. and gave them 90 days to present a comprehensive plan and show how they're going to move forward to cure these issues. look, this is something that is obviously of critical importance, and we're going to come at all of this from the perspective of safety. it is no accident, no pun intended, it's no accident that we have gone 15 years without a fatal crash of an airliner. that's the result of an extremely rigorous standard, when it comes to not just the way these planes are designed, not just the way they're flown, but also the way that they're

manufactured. anytime something's out of compliance, that puts that record at risk. we never take for granted that there's this incredible fact of flying through the air is actually the safest way to travel in the united states of america. keeping it that way is going to require boeing to step up, and faa to keep boeing under a microscope, including this, you know, tough step that was unprecedented of limiting how many aircraft they can produce in a month, until they can demonstrate, that if they want to do a higher number, they can do it safely. >> boeing got a big order yesterday, from american, and maybe they can get through all of this, but it's been a tough couple of years. the stock is down about 50% or so. it's an important company, maybe one of our greatest manufacturing companies in this country, mr. secretary. what do they need to do? do you think that it makes sense if they were to buy spirit aerosystems back? is that a better way to handle

these issues? >> you know, i haven't weighed in on their business structure. i think for them, that's a business decision. for us, any interest we have in that has to do with safety. you're right, the economic importance of this company is enormous. not long ago, i was in the pacific northwest. i was in vancouver, washington, meeting with high schoolers who were in a tech program, toget them ready for the trades, and one of the students says -- we were asking them what they were up to. one of the students' eyes lit up when he let us know that he was about to have his second round of competing for an internship to go work at boeing. we know how important that that is for the economy, but really, on our side of the house, and certainly faa's side of the house, it's 1 hu00% a conversat about safety. and doing the right thing on safety and having the right safety culture is one of the things that's going to be necessary for the long-term health of boeing as a business, too. >> we'll switch gears now. on thursday, we will hear the

state of the union from the president. and there have been some expectations built up, i think, among democrats and president biden's supporters, that it's an important state of the union. but we're in very, obviously, divisive times, very strange times. if you look at the gdp, i know you could bring that up, how well we've seen growth hold up, when we thought a recession was coming. we've seen unemployment well below historic levels, at historic lows. and frequently, it's been pointed out the disconnect between how the economy is doing, new highs in the stock market, and the perception of the job president biden has done on the economy. and i know you -- you had to have seen these polls this week. they were kind of staggering, kind of shocking from the likes of the "new york times" or cbs or ipsos, in terms of not only not giving the president credit,

but really, nasa. 18% say the president's policies have benefited them economically. even among women, 20% more say trump's policies benefited them than biden's. what do you attribute that? and how do you fix that? >> you're right. when you look at the numbers across our economy, all-time highs in the stock market, record job creation, unemployment that hasn't been this low for this long since before i was born, yousee so many good things happening that we want to tell the story for. and i'm one of those who definitely believes the president deserves more credit for those achievements. part of how you do that is, you've got to go out there and take credit for those achievements. i think you'll see the president in the state of the union talking about what's been achieved. you'll definitely see cabinet members like me continuing to go out across the country, pointing to the projects that are getting done, the bridge being redone in minnesota, wisconsin, is just one example, out of 40,000 that

we're highlighting right now. but look, people are also frustrated. and i get it. people are generally frustrated with the negativity they see, every time they see congress of washington. that's why congress has an approval rating right now last time i checked in the 20s. we need to make sure that we highlight the things that are going right and continue to pay attention to the things that are going wrong. and lay out the plan and make clear who's trying to get progress. and who's trying to actually solve those problems versus just use them to score political points. i mean, it was especially disappointing to see what happened with the border. you've got congressional gop, talking about the border, every chance they got. so you would think that they would be interested in addressing it. and yet when a bipartisan bill put together by one of the most conservative members of the senate and democrats working, negotiating, making tough, tough decisions that both of their respective bases were going to have trouble with came and hammered that out, it looked like there was going to be a chance to do something real,

with real resources at the border. only for donald trump, who's not even an elected official to come in and kill it with the chill that he put on congressional politics. so we can either solve problems or have them be political footballs. >> the whole move to try to come up with something, by the administration. and obviously, bipartisan -- that didn't come until it became clear that it was going to be a major campaign issue. and only then, did the biden administration get interested in it. and every time i hear -- >> well, hold on, let's be clear, here -- >> let me finish first. every time we hear those talking points, that suddenly it was republicans who ruined the border, that's why people get so frustrated. we know what president biden said about inviting people in. we know that he got rid of all the things that were keeping the border closed, that president trump had put in. we know that he got rid of all of those. so when you say it's not his fault -- >> that's not what -- that's literally not true. that's literally not true, he got rid -- it's true we got --

he got rid of family separation. >> did you siee 7.2 million people come in during the trump administration. it was a trickle. >> he got rid of the policy to tear children out of the arms of their parents, that's true, but it is not true, some of the other things that have been suggested. >> this is part of the problem with why there's a disconnect -- >> in 2015, in 2006, literally, since the reagan administration, right, there have been bipartisan efforts to get something done here. but i really believe we've gotten to the point where many congressional republicans find it so useful as a cudgel, that they would rather keep the problem going for political uses than solve the problem and risk the chance that the president could share in the credit for that. in the same way that, you know, we see some of them, even though we had great bipartisan cooperation on the infrastructure bill that i work on, a lot of them who were against that, only to turn around and try to get credit for it when we actually have a ribbon cutting or groun groundbreaking. >> i just -- the reason that some of these numbers stay where they are is because it just

seems like instead to have actually owning some of the issues that we have, instead of acknowledging that the president maybe has lost a step, the administration keeps saying, don't believe your lying eyes. >> but respectfully, joe -- >> that's why you're at 18% -- >> no, respectfully, i think congressional republicans are saying, don't believe your lying eyes, which is why they're polling at about 15%. >> congress is never -- >> right now, we have -- >> congress is never -- >> we have economic numbers -- is it my lying eyes that under joe biden we have had the most job creation in american history? is it my lying eyes telling us that unemployment and inflation are both below 4% and have been that way for the longest time in who knows when? is it reality or is it spin to point out the fact that manufacturing jobs are up under this president and were down under the last president. these are matters of simple fact. >> when we heard for three years that the border's closed and

it's secure -- >> we heard it -- >> and 7.2 million people have come in to where our big cities have no idea how to handle this. and you hear from the administration -- >> here's the thing, joe. this is really important. this is really important, okay? the common sense position, and the position that, by the way, a lot of moderates, democrats, and moderate republicans would always say, the kinds of things that you hear at the chamber of commerce in indiana, where i come from, is that there ought to be more legal immigration and less illegal immigration. and yet when there's a chance to actually do that, that's not what happens. the last administration cut legal immigration. and meanwhile, our economy is pulling people, just as much as terrible conditions in latin america are pushing people. and when there's finally a bipartisan compromise that would help address at least some of those issues, congressional republicans couldn't get it done, because donald trump who's not even in elected office, killed it. that is a fact.

>> that -- we'll see whether can this moves the needle. i just think, you know, the american public just wants something that benefits them. they just don't want to hear -- >> so do we. >> -- what they see is happening. mr. secretary, we appreciate your time and will be watching on thursday night. thank you. >> thank you. when we come back, columbia university's tim wu will join us tk toalkey anti-trust issues. "squawk box" will be right back. is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening.

welcome back to "squawk box." things have worsened a little bit. you can see the futures now are in the red, with triple-digit losses on both the dow and the nasdaq. and that's worse than earlier. >> the latest the news from the airline industry, jetblue and spirit walking away from their $3.8 billion merger after federal anti-trust concerns were raised. our next guest is known as the architect of the biden administration's anti-trust policies. joining us right now is columbia law school professor, tim wu. he served as an adviser to president biden on technology and competition policy, and his latest piece for "the new york times" is titled, texas is right. the tech giants need to be regulated. tim, thanks for coming in. >> pleasure. >> this was a case that was

argued before the supreme court last month. it's basically a texas law and a florida law that conservative politicians there put in place to say that the tech giants had to be careful with what they were doing. that they couldn't just edit anything, they couldn't just decide to not post anything they you are actually siding with the conservative politicians on this? >> yes, i am. the texas law to be precise has no censorship of anyone based on view point. i sided with texas. i think the problem here is not that i've so much embraced the texas law and its goals, but i do think we've turned the first amendment into too big a barrier to reasonable enforcement, reasonable regulation of the companies. >> what sort of reasonable regulation are you talking about? what do you think social media companies are doing that needs to be reigned in? >> something more not discriminate against parties that are involved in there. i think they need room to do prooif sigh, need room to

protect children. part of this is my -- less about the texas law politically and censorship and more about the problem -- we have problems with children become profiled online and we need power to do something about it. >> you say if the supreme court strikes down the texas law in particular, which is a narrower scope of law, that basically these companies with do whatever they want, no one can stop them. >> i think we're coming close to making the first amendment into general purpose immunity. the reason is everything these companies do is moving and displaying information. one court ruled collecting information from children is a form of speech. if you say that, you can't do anything about some of the serious concerns that people have. >> so where do yu think the court may come down on this, just having watched -- you said four hours? >> yeah, a four-hour argument. i think it's closer than people think. the tech companies tried to get

this something struck down very broadly. they may send it back. i think they've heard enough that in particular the conservatives in this area, i think maybe it's a very narrow holding or revamping. >> let's talk more about antitrust issues. jetblue and spirit ended their deal yesterday, agreed to walk away from that $3.8 billion deal, but it was happening at the same time that we've seen concerns about other anti-trust issues moving forward. maybe albertson's is the biggest one to point to. where do you think policy stands these days, and has it gotten too restrictive? if you ask anybody in the deal world, they will tell you they don't know there's any deal they can bring -- >> there are still -- >> -- against the regulatory scrutiny. >> i think the antitrust law is trying to set out new rules of the game. i think what the justice department and ftc are doing is the most obviously anticompetitive deals are not going to go through.

there are deals 12i8still going through all the time. the ones where they combine obvious competitors with the excuse they're trying to take on other companies is not going to go anywhere. the airline merger was a rig victory for doj. >> this was just a minor pairing versus the ones they've allowed to go through in the past. >> yeah. >> if you look at the albertson's deal, this is about grocery stores merging when they have giants like walmart, amazon, whole foods that are out there every day making life tougher for them. in some ways it feels like you're going after the little guys to not allow them to compete with the scale of the big guys that don't already exist. >> we're going after the big guys, too, i should point out. or my former employer is going after the big guys. we passed on far too many mergers and let the industries

consolidate. look at one area where we don't need higher prices, it's groceries and flights. that excuse worked ten years ago, but the results are in. those industries just saw the prices go up and not much good happening for consumers. i think that excuse no longer works. >> in certain industries you'll look at it and say there's nothing anyone can do to combine here, that we will think actually is helpful to compete against the bigger players? >> i wouldn't go that far. i would say the excuse of we're going to give a pass to an anti-competitive merger because they say, oh, we have to compete with the other big guy, so that's the reason we need three companies instead of five -- >> sometimes that makes sense, especially when it's the smallest two that are combining. >> it may make sense in theory. the results show once they're three or four they tend to agree to cooperate on prices. mobile is a great example. the airlines are another great example. we passed all these -- we allowed all these mergers to go through and the prices just went

up. they didn't compete. it's more profitable to cooperate. why wouldn't you cooperate? >> there are some questions being asked about what that means for spirit airlines, whether they'll be able to actually effectively complete at this point. what happens if some of these smaller players shut down because they can't compete? >> there is a failing company defense. spirit just expanded their routes post this. they added two more routes. they're slightly profitable, not hugely profitable. i don't know. i think they're always going about how we'll never survive, nothing with work. t-mobile said we can't survive. now they're the most successful company. >>imthfentents are difre. t, ank you for coming in. we'll check the markets and get you set for the trading day ahead. stay tuned. "squawk box" will be right back.

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nelson pelths published his plans for changes at disney as he prayers to face off against the company at its shareholder meeting next month. in the 133-page paper that's titled "restore the magic," pelths submitted demands for overhauling the board and businesses. this includes a succession plan for ceo bob iger, review of studio operations and digital strategy for espn. tryon owns roughly $3.5 billion

in disney stocks is seeking to add peltz to the board. >> you see who came to iger's defense? >> the disneys. >> abigail disney. >> she's been railing about his compensation and the board and how they're all in his pocket. >> something along the line of a wolf in sheep's clothing. >> enemy of my enemy. if bob iger is not woke enough for abigail -- maybe she's finally on the right side for him. final check on the markets. we are down and the market in the last week or so hasn't shown -- i think the same resilience we've seen since the beginning of the year. we'll see if anything is up here we had a great 2023. are rate cuts coming? that might be off the table at

least for now. we've seen bitcoin and gold go almost hyperbolic, although with gold, not quite the same thing. but it is a couple hundred dollars up to 2,136. >> highest level ever. >> highest level ever -- make sure you join us tomorrow. "squawk on the street" right now. ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. some worries in mega cap tech, whether that's amd, apple or tesla, we'll get to all of it. roadmap begins with apple shares down again this time with report of an iphone sales slump in ch china. a different story for target. that stock is up sharply despi