justify got an just got an email saying con ed and the electrician are at the building to assess it and the outage is continuing, it has not been fixed at my building. i won't have power today if i wore my mask, could i come over >> we don't have the normal director i moved out of the shot and i wanted them to take an empty chair, but that's -- okay, we got to go. come over. you are welcome. >> okay, thank you i need internet. >> we got to go. >> i'll see you later. join us on monday. have a great weekend, everybody. "squawk on the street" begins right now. no way no way he's letting him come over good amorning and welcome to "squawk on the street. i'm david faber with jim cramer. we're going to have a good morning, aren't we, jim? carl has the morning off look at futures as we get ready for the open a half hour from now. mixed picture, not doing too much road map this morning starts

with another day of records. unfortunately, covid infections and deaths that are hitting new highs this as moderna's vaccine candidate nears emergency use approval shares of fedex are sinking this morning ahead of the open. we'll keep an eye on that after the open the shipping giant warning about continued unsr. ed uncertaintya result of the pandemic that suspected russian hack, well, every day we learn more and it is certainly doesn't get any better, does it, the news? much worse than first feared hundreds of fortune 500 companies potentially exposed, the ceo of cybersecurity firm palo alto networks is going to join us in a few minutes we'll discuss that and, jim, it is stunning, actually i've been trying to keep track of it this week, and it just keeps getting worse in terms of what we learn and obviously we're focused in part on the government agencies that have been penetrated to the extent of which we're not still completely

aware by the russians, but it could go far beyond that, to many companies that were using the solar winds management software, which as we know is also compromised >> look, david, i got to tell you, i spend and have all of the cybersecurity companies on including palo alto. i just kind of marvel that no matter what seems to happen, there are breaches and i think that maybe it is time to say this company didn't do its job i think the american people are almost used to everyone just punting and saying, hey, it is the russians were bad. we pay companies to stop this stuff. and i'm tired of hearing, well the russians are bad i want to stop this. honestly, what are we paying these companies to do? >> it is very difficult. first of all, you're talking about an extraordinarily sophisticated actor in the russians or in the chinese for that matter when they are are doing it,

which they are all the time. you know, the adversaries demonstrated and the ability has shown significant knowledge of windows networks, according to one of the alerts out there. very hard when they're using a vendor to companies. they're not trying to get into the company itself, and then they actually are able to use software patches that are distributed by said company, in this case, solar winds, that then get them into the network of those companies it is hard to defend >> i want to know who can't stop an actor nobody knows? for instance, i have okta on this week, todd mckinnon, he said legacy systems are not able to identify and have zero trust. not zero trust meaning that no one trusts them, but literally that you know everyone who is in i know these people can take your identity, they can make it so that you're part of a patch, but i would like to know who -- which people, which people did

not have the right software? because i have to believe that as terrible as the russians are, the reason why you have good cybersecurity is because you know the russians are terrible you know the north koreans are terrible you know the chinese are terrible do we not have smart enough people >> we got plenty of smart people but we're talking about a very sophisticated adversary that never stops. >> are we sophisticated? >> of course we are. of course we are do you think the russians could shut down our power grid >> i don't know. doesn't your house have no power? >> it does >> your apartment has no power. >> i don't think they're targeting you. >> me and sorkin maybe the chinese. they kind of get a little more upset about things on the corporate level, but not the russians the department of energy, the national nuclear security administration manage the weapons stockpile, listen, now many of the key things are air gapped in other words, they're not

connected to the internet, they're on their own network, these are public networks to a certain extent, perhaps and hopefully not containing a great deal of classified information, but gets pretty scary, jim. >> it is very scary. i would like to think that we have people all over the place, in the army, who come in and help these companies i have a company that comes on -- look, we all have -- i have cyber what is cyber? it has people from the israeli army who are good at detecting covert operations. but i think what we -- one thing that offline people tell me is, listen, we're not as nasty and dirty and it is hard for us to think in a criminal way, it is almost as if, david, we need some guy who knows how to -- who is just a criminal >> yeah. >> who can be and say, listen, i'm a criminal and i hacked in and you are -- let's get the guy who hacked target and home

depot. >> we have the nsa, they have the capability, the question is what do you use and how do you use it >> it is right to ask the questions. we can sit here and say, well, you know, the russians are really bad >> yeah, they are. >> cash aurora knows. >> we're going to ask. not having any impact on the stock market, nor -- >> nothing impacts the stock market. >> the continued unfortunate -- the vaccine is out there, watching the vice president get it at the same time we have got cases at all time highs, 235,000, california setting records every day and unfortunately, jim, deaths setting records every day as well nothing stops this stock market. >> no. and you neglected to say nothing stops bitcoin and -- >> right. >> nothing stops evs from china, nothing stops the 300 spacs that have come public henry blodgett, good point today. >> we sat and talked about it being crazy in ' 97 and'98,

thinking, this is going to end and it didn't, it went on for quite some time and then it did. >> how few people actually stopped playing the game who was the -- who are the bernards who said this thing is crazy? i think we both know there are very few people who said i'm going to take profit and change my lifestyle they didn't realize it ends in a nanosecond they gave it all up. >> they did. but i feel like we mentioned this many times it bears repeating, the quality of companies then, the quality of companies -- it is very different than that. we can have arguments about valuation when it comes to doordash or airbnb, but you're not going to question the fundamentals of their business and their ability to actually compete and even dominate in their particular market and/or grow significantly that's not the conversation we're at we're talking about this seems ridiculous palantir got downgraded today by credit suisse. to underperform, price target there, 17. we talked about palantir a lot,

direct listing, and then just went -- you see it there, just went crazy but they don't question the underlying business. they just say, hey, you know what, at this point, the stock is trading at 46 times enterprise value over calendar year 21 revenue and that, in this analyst's opinion, is too much >> i'm trying to work on a thesis and the thesis is that unlike palantir, you look at doordash, you said great company, airbnb, great company. i don't know if it is -- snowflake, i don't know if it is worth 300 -- it is worth whatever people want to pay. maybe it is worth 300 billion. i struggle over a company like doordash, which i think before the pandemic was -- and before the consolidation was a little hand to mouth. >> yes >> and now they got plenty of money and they're doing well and i don't know how to value it it is whatever people want it to be. >> it is whatever. then you get to tesla, heard dan ives talking with joe and andrew

about it, 621 or so billion dollars as we begin the market cap. he said it and i think there is many who agree, it is not a car company. you can't -- on the numbers, i can remember going back to the days we talk about amazon, jim, too, during that period we're discussing and we say they sell books. that was not the point and perhaps it will be one day we'll look back and say, they didn't really sell cars. they sold cars, but that wasn't the point. >> no, it is a spac. elon musk spac >> right >> you're betting on elon musk so far pretty good imagine people who bet on steve jobs >> yeah. >> smart guy going to come up with something. he comes up with the iphone. just think about it. how amazing that is, but this is all instant. i don't know, i was speaking with some of the people at he? flake, david, they have -- >> that's stunning by the way, looking at that chart. look at that look at that performance over ten years. so much of it occurred over the last few. >> yeah, since november. >> 10,000%.

>> i'm looking at snowflake, 92 billion. their software is amazing. i don't know -- no one really knows how to value these things. i think that's part of what we're struggling with. we know that cisco traded 40, 50 times earnings at the top. that's very inexpensive versus what many companies are doing because they're priced to sales. >> slootman, your boy. your man >> slootman. >> options to purchase 240 shares of class b common at $8.88 a share. that began in april of 2019. >> slootman. >> 8.88 a month. >> slootman did not want to work they brought him back. do you think they can bring him back for just garden variety salary slootman is a miracle worker he is. >> every month he gets another, what is that 300 -- >> he's very exacting.

how much is belichick worth? >> priceless >> boom. >> bingo. >> there you go. >> you're on your game today. >> thank you all right. they want me to talk about the vaccines. >> who is they >> they, yeah. >> rip it out. show some moxie. >> i'm taking my lead from our great producers. >> put it back in. >> i'll go to you. any thoughts on the vaccines >> look, i -- meg is unbelievable meg is -- did she get to rest on saturday i don't know when i listened to meg, i do get optimistic that it is all going to happen. but i do think that the patchwork nature of what we're doing is kind of beyond belief it is a bit of a free for all. i keep hearing, you never hear the federal government is pushing them the federal government wants to have a stock hold of everything. so i don't know. between gottlieb and terrell, i

feel we're not that bad. >> you go back and forth each day. you're worried, then you're not. >> they go back and forth every day. i listen, it is not me it is them >> we have to see. every day we get a new update to your point in terms of the distribution plan or the lack thereof. >> would you like to be after pence? >> i'm ready, sure, i'll take it make it available to me, i'll take it. >> maybe it is like the third man. maybe there is a black market in penicillin >> what a wonder drug that was >> penicillin? >> yeah. >> so was the polio. polio was administered by the federal government >> yes, it was. >> they wanted to end polio. >> yes, and they did. >> no one made a dime. that's not the american way, david. no one made a penny on polio. >> we really got to go coming up, we're going to tell you cyberattacks against the u.s. we're going to discuss that with palo alto networks ceo nikesh

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microsoft calling it a moment of reckoning, which requires a strong coordinated global cybersecurity response i like that. joining us now is someone who i rely on very much for these kinds of issues. i rely on palo alto networks chairman and ceo nikesh arora.

nikesh, i won't do the good to have you on, how are you doing, let's get right to it how big, how bad, why do we care? >> well, jim, this is a very, very sophisticated, almost look a dream attack for a cyberhacker, right the ability to get into the software development life cycle of a piece of software, which is used by 300,000 customers, effectively you have to back door keys to 18,000 customers if they have not been able to protect themselves against this patch. so this is going to be a big one. this is going to be one of the top five attacks in the history of cybersecurity >> if i'm a person at home and worried about my bank account, worried about my electricity, what am i worried about? is this enterprise and you better be darn worried about it? >> it is enterprise. it is government it is everything you can imagine. because it is hard to get 300,000 customers out there.

hard to get them to download the patch. there are organizes around the world which are government i think literally the people who have coordinated the sophisticated attack have the keys to various organizations, and selectively gone after the biggest targets. still not clear what the extent and the expanse of this impact is, but i think we're going it keep learning more and more over time and this will continue to have repercussions, depending on how far, how deep this attack has infiltrated. >> it is david that was my question tom bossert, homeland security a adviser to trump, the svr, the russians, will have used it to further exploit and gain administrative control over the networks considered priority targets. are we going to keep learning more and more with each day and each week? at what point do we feel like, okay, we really actually any what they know >> well, if you see every

organization, which is in our industry, cybersecurity, alarger organizations are putting out statements we have to work together to figure out the extent of this damage. as well as go to larger extent to protect ourselves i think it is incumbent upon every organization, who deploys, to make sure, a, are they safe, were they impacted, and, b, are they prepared in the future if something like this happens? enterprise is being run because of the digital economy, you've seen that with the pandemic. it is imperative we all protect ourselves and make sure this doesn't happen i think the effects of this are far reaching >> what does it mean i'm always curious, you got to try to figure out how far they have gotten within the network, try to fix whatever has been done and get rid of the areas that have been breached. is that man hours? is that enormous number of people sitting at computers dealing with all of these issues

and trying to understand them? >> look, let's go back to the basics of what happened. lots of organizations use a certain piece of software to manage the networks. that software has privileged access to go and reconfigure things, move things around if you can get in the software, that piece of software, which happened here, you effectively, if you can communicate, you can make it do things you want it to do imagine if i have access to somebody's network and can make it do what i want it to do, i can make it behave in such a way that lets me into various parts of their servers i can get in one way, traverse the organization, find out where the julys aewels are. i can figure out where the social security numbers are, i can figure out where the codes are. once i figure it out, i can ex-filtrate that data and take it away and do what i want with it each of these can be done on an individual organization enterprise agency basis because

you the got keys to the back door that's what we're talking about. every organization has to go and check to make sure, a, did they get impacted if they did, they got to go scrub their entire network we spent 2500 hours in the last few weeks making sure nothing went to any of our infrastructure, because we highlighted that we saw recently an attempt with one of our servers trying to communicate to malware. we blocked it, put out the indicator for all of our customers to try to protect them, but we went ahead and -- >> nikesh, this is a form of war. it is a russian war to be able to hack something that is -- many people are not being killed by it, at the same time, it could happen i don't know you're a person who is willing to name names if it happens. there is an effort called solar winds. i read them.

i read them and say to myself, if nikesh was running that, because i know you and i know the things you bought, maybe it wouldn't have happened maybe you could say, jim, you know, there by the grace of god, but, nikesh, come on, come on. some people are doing it better than others. this solar winds, how many people did -- how did they get all these accounts was it, like, hey, man, we're better than everybody. this is not right, nikesh. you know, you know that some people screwed up here is it okay to name them or do we say the russians are so good we're, like, losers? >> well, i think, look, jim, i'm not going to give anyone a free pass but i think solar winds is an important piece of software, used by network managers around the world. i think all this highlights is we all have to be extremely vigilant and making sure that our systems and our processes are secure if you're not, you are going to get attacked one day, you get hacked, you will have somebody take control of that

it is unfortunate that the control that was taken is a server used by 18,000 customers. so they should be more vigilant and diligent this is a very sophisticated, very complex attack. the fact it got in there, not only to do sophisticated thing, also got lucky, piece of software that went unnoticed for six to nine months now embedded in the infrastructure of thousands of customers out there. >> yeah. many thousands finally, nikesh, what -- listen, as our corporations can try to do whatever it is they can, it would seem like we're reliant on the federal government to take the lead or at least organize. are we and should we retaliate in some way to try to perhaps prevent our adversaries from continuing to do these kinds of attacks? >> i think first and foremost, we have to make sure we're secure before we go ahead and try to do anything else, the

first thing we got to make sure every organization, we have to make sure that they are not impacted and they have an iota of doubt on the fact that they may be impacted, they got to make sure they secure their infrastructure and they also have to prepare for this if it happens again i don't think the last ones we are going to see i think in the future, the best way to create -- is to digital media. the borders have gone away i can get to infrastructure of any part of the world. i don't have to show up there. we have to make sure our infrastructure is up to speed and secure enough this doesn't happen to us once you got there, we can talk about what to do next. we're a long ways away from getting there. we say, look, we'll give you a free assessment if you're any agency, any customer out there, who wants to understand the impact, if you already haven't done this. and put resources on notice who are ready to help customers do an assessment engagement

that's what we need to do right now. >> well, nikesh, it is great to have you on. everyone has to be more vigilant and redouble anyone in your business has to say get me someone whose -- let me find someone who didn't let them in. that's my take nikesh arora, chairman and ceo of palo alto networks, looking forward to seeing you on "d ma money" soon. thank you. m. and that's why we created rapunzl. the rapunzl app was designed for high school and college students to simulate stock portfolios. they're able to buy and sell stocks in real time. thanks to nasdaq's cloud data solution. if somebody tells you just download this app and you could potentially win a scholarship, and you're learning, it's like, yeah. information is key. having access to information at your fingertips on your mobile phone, on your desktop, or here on the screens, it really allows us to showcase what's happening out there. and so we pitched the idea of:

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all right, friday. we get started with trading in about four and a half minutes. three and a half minutes from now. and you can see dupont going to have a good morning. some stuff going on with that. we'll explain it to you when we come back.

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and there you hear the applause the old new york stock exchange and at the nasdaq, the s&p heat map right back here. i can actually lock at it, go over and touch it if i want to now. not like the old days where we refer to it on the floor of the new york stock exchange at hq. there is the opening bell for this friday as we get started with trading mixed open, we see it reflected there in the composition of green and red. what a week it has been, what a year for the markets it has been we talk so often about the juxtaposition of new highs for the s&p and for the nasdaq and so many stocks so much wealth created, juxtaposed with the suffering in this country that is simply unacceptable i think for many. people going hand to mouth who are waiting online for food, who are unemployed, and who are facing the prospect of no government aid by the way, still

bottled up another problem it seems in terms of trying to get a package out of there >> look, the people who have made money had money and i think that's what's most discouraging, if you're someone who wants to have quality in the country. people who had a lot of savings, able to take the savings and make a lot more. i'm not just talking about bitcoin. >> bitcoin has been incredible 23,000 yesterday, haven't looked at it this morning. >> the wealthy people, there is no bitcoin fraction. there will be some outfit that will do it they're trying to do it now. my point is that, david, people who got the money and did well, they made a lot more money with the money than people thought. robinhood, $1200, you don't know they're taking your order flow, but maybe we should have but i just think this that is one of those wealth transfers, from the people who don't have much to transfer, to the people who had enough

and that's because congress has been so inept. >> right, widening the continued gulf in terms of income inequality. >> only way to look at it, i think. >> on that note, we have a mixed bag. but the s&p is up and the nasdaq continues to power ahead it is funny, apple and facebook have been going at each other pretty hard. even personal -- even zuckerberg to cook. let me get your thoughts i would note that facebook shares are up and apple is down a bit. both have been very strong performers apr apple in particular, up 75% this year, the introduction of the iphone 12 and some production potential news from nikkei earlier this week about an increase in production, that helped the stock as it -- earlier in the week at least. >> well, look. what is tim cook's job to put out best product possible he said that over and over and over again and he will not stop, he will not stop if he thinks that someone is in the way of the person who bought an iphone, he

will not let that happen and there is facebook, who wants to be partners with 2 million customers. and wants to do -- wants to be known as someone who helps these small and medium size businesses, which we know, david, are what they love in washington and they're taking the side of their customers and it is a big clash. i do think, by the way, maybe there is -- you want the best user experience if you own apple. >> choice over the data that is being collected about them and how it is used. >> yeah. made it pretty simple. >> i know. this is real. >> is it a real threat to facebook or, you know, is it yet another one of those that we'll spend time talking about it, only to watch the profitability of the company continue to soar >> to me, facebook makes a lot of money for small and medium size businesses. really good value proposition. if it became a bad value proposition, i think it is news. i'm looking at google. >> to the extent that people start opting out in a way

because they're much more aware of their ability to do so and far easier doesn't that diminish the potential size of -- that you can reach through advertising on facebook or you're not a believer? >> i'm not a believer. i believe there are incredible businesses that have been started in the last 12 months and a lot of them are on instagram, shopify, etsy i celebrate that and this internet faang issue, i'm not taking any more -- look, nothing can be taken lightly with big full page ads trashing each other but at the same time, i'm saying i'm looking at -- same thing with alphabet. if we had 57 states, like we have 57 varieties of ketchup, they would be all over alphabet. and, yet there is alphabet, we use alphabet, we use google every day. what do we want? do we want a bad google? is that what we want give me a bad google that makes it so somebody else does well? send me to bing.

>> always worth reminding people the federal trade commission is suing facebook and the department of justice is suing alphabet those are going to be ongoing potentially for years to come. i can see, you like most investors, could care less. >> i'm trying to make money for people spac me, david >> believe me. we're going to be spaccing you left and right spac, spac, spac, spac >> every day a new spac. i have to tell you, i spoke with a young kid. >> young kid >> who is in my daughter's class yesterday. got a spac. >> he has his own spac >> yeah, i think he was thinking i better have a spac. >> everybody needs to have a spac >> how much is a promoter, someone starting a spac, how much do they make from the get-go >> the typical structure is 20%, if it is a $300 million spac,

$60 million of the company you're merging with. >> what are we doing clowning around with stocks >> i don't know. >> why is apple down apple is down probably because you said those bad things. >> i didn't say anything bad and it was prior to my beginning to speak. apple can occasionally go down next week, i think we're going get more spac deals. at this point, speculation in terms of some names. i'm not going to share them right now. we'll follow our spac. $63 billion is out there >> how about toyota saying things that were not -- that ev is not a wonderland. what is with toyota? >> what is with toyota >> good stock recently. >> speaking of ev, tesla is up another 3.5% and just so you -- it is up 712% this year. what is it now sixth largest market cap, right?

i think so it is still a ways from facebook it is getting there. 642 -- >> got to work on apple. apple should be up today katie uber ty saying the chinese sales are much better than expected >> does tesla come down when it enters the s&p has all the buying been done >> okay. david, this is apropos what i said about snowflake, people will pay for tesla whatever they want if you come in and monday and it is down, let's buy some tesla. i don't think people think like you and i, this is an event, it moved the stock up and now it will sell off. they say, good, tesla is down, i'll buy some tesla. it is different. >> it is different >> it is different here, citi says five reasons apple stock can trade higher in 2021 i read the piece this morning about jim, i like jim very much, but they don't have crypto they don't have crypto they don't have ev stay away.

>> you're kidding. >> no. look at the stock. >> which stock am i looking at >> apple. >> that's what i thought it is down 53 cents. >> it shouldn't be down. we have two -- top analysts saying good things i'm saying, david, the new investor does not care about what the traditional firms say though i've been looking at reddit, they're not giving me a lot of ideas yolo how are you doing? yolo saying buy tesla. they love palantir >> i mentioned that downgrade of palantir to 17 from credit suisse just talking about it trading at 46 times next year's sales, enterprise value >> that's almost bigger than snowflake. >> enterprise value is in the just equity, you add in the debt, it does figure prominently into the metrics we like it use in terms of multiple to ebitda. >> snowflake is 100. >> yeah. >> it is 110 now

and, again, eye of the beholder. the real businesses, i think that i have to think that -- i'll say it, i think snowflake is undervalued. >> undervalued undervalued? >> undervalued >> why >> because i think that the estimates are so low versus what they're going to do, it is shocking they are just -- it is ridiculous it is much like when i saw nvidia, i first saw nvidia and the guy who runs ali north america, he said, this nvidia is the -- the semiconductor of the future i looked at it, selling at 80 times earnings it turned out to be selling at 12 times earnings when we got there. >> good point. that's a good point. earnings go up a lot, the multiple comes down. for all the new investors we have out there to keep in mind >> those who are shorting -- betting against slootman -- >> yeah. >> -- he has a particular set of skills there, a nightmare. >> he's relentless, that guy they always are. they always are.

jim -- >> does slootman ever smile? >> i don't know. i don't know slootman. he only communicates with me through you by sending emails and saying, will you educate faber about what i'm talking about? >> yeah. >> fedex -- >> that's the key to the market. how did you know >> i hit it. like the daily double. >> you hit it. i don't know i was never on "jeopardy". >> yeah, well, all right, why is it the key to the market they reported they're not giving us guidance. jim at fedex, they're telling us capex, 5.1 -- capital spending forecast 5.1 billion for fiscal 2021 but, again, not providing an earnings forecast. >> margin issues, added costs, first look -- here is deutsche bank, encouraging yield trends but cost creep credit suisse ground margins fall short of expectations, uncertainty ahead. this stock is up 85%

did people just think it is going to grow to the sky conventional company it delivers things i thought the quarter was spectacular. and just spectacular they were able to do when they do is just extraordinary but people don't care. they say what have you done for me lately. >> again to your point, it is up 91% over the last 12 months, this is fedex, a company we were, you know, not sparing in our criticism for some period of time when the stock wasn't doing much, they have seen quarter after quarter to have a tougher time of it always something. >> china. >> yeah. >> at 150, the analysts were jackals, made you feel like fedex didn't know what it was doing. i think fedex's clients were just completely gone smabsmacked because of covid they're delivering vaccines. they're delivering on sundays. they're getting the job done and the stock is justifiably up, but there were people who said, how can they not give a forecast how could they give a forecast hey, yeah, we think covid will

be beaten on february 12th, so what we're going to do is have a pretty good second quarter who can give a forecast? we're looking at j&j thinking it might be good. this can be a march 28th event who holds the people to this kind of thing? >> right it is -- >> you can't figure out when the electricity will go. >> no. con ed hasn't been in touch yet. i'll tell you, not a great day, it is the dark -- it is like the -- one of the darkest days of the year, you know he >> days get shorter. >> i know. soon they start getting longer very soon. >> yeah. >> how is your kid doing >> which one >> the one at tufts. >> he's doing great. doing great. >> the covid thing up there? >> not good. they don't have anybody there now. school is off. school is out. bob pisani. >> $80,000, they watch tv. >> he's not going to stop, bob just trying to get under my skin there. yeah >> no. you know, what is great about jim is school is never out

it is a mixed open, folks. happy friday, by the way happy tesla day. we see a big move here later in the afternoon here new highs on everything. small caps, you know, new highs on the nasdaq and we got a global rally going on as well, pointed out big moves up in europe this year asia is doing really well. but right now tech has been leading this week, it is flat. this is a flattish open. banks are okay this week kind of in line with the s&p s&p is up 1.5% to the new highs for the week industrials and energy have been laggards so it is essentially growth over value this week if you want to follow the market in that particular kind of way you want an idea of how tough it is to beat the markets these days, let me put an exclamation mark on what jims wi was saying about fedex. the company beat by 20%. and the stock is still down essentially. we don't know what happened this year the prior quarter, the beat was 65%. fedex beat by 65%, the prior quarter. the quarter prior to that, i

think the beat was 80% these numbers have been spectacular all year and as david pointed out, stock is up 90%. now it has another great beat, but only 20%, and market goes, yeah, so what? so that's the problem you got when the stock is up 90% on the year it really gets hard to impress the markets after a while. nobody should feel sorry for fedex, an amazing year but it is going to be tesla's day today. we have been talking all week about the fact that this is the day tesla goes into the s&p 500 and let me make sure everybody understands this, the reinstituted index trades on monday all the action happens at the close today. that's what everybody cares about. not about monday it is about today here so tesla is a really strange beast because we never had anything like this before. it is going to be the seventh largest stock going into this thing and it is going to cause big movements in the way the s&p is weighted. 1.5% of the s&p by weight. it is going to increase the pe ratio, which is already pretty rich 22 times, now 22.6 times forward

earnings here. i think the issue is the concern is there is a strange confluence of events going on today that is going to lead to maybe historic trading volume on a dollar basis. you got the tesla addition, it is a huge stock, the s&p re balancing that normally occurs on today and quadruple witching rebalance today which also normally occurs you put the three things together, the concern is there is an enormous amount of money that will be sloshing around in the last hour that could result in price imbalances. market close imbalance it is fine for the volumes to move around. nobody wants to see prices moving around. this is a good teaching moment to remind everybody about what is going on. that passive indexers rule the world. index committee at the s&p have enormous influences on the stock market the s&p market cap is about $31 trillion that's more than 80% of the market value of the entire u.s. stock market

indexers or passive investors tied to the s&p own anywhere from 5 to $10 trillion that's a lot of money. we don't know how big it is, there are a lot of passive investors that passively tie themselves, that don't pay the s&p to do that could be as high as 10 trillion. we're talking a third of the market that is passively tied to the indexes. you see tesla and, david, the whole point here is these indexes don't buy low and sell high they buy high and sell low tesla is up 600% this year s&p is buying tesla stew pendously high this is part of the problem with passive indexes now, they buy this stuff literally at the very top of the market. david, back to you. >> great point the price discovery is left it a handful of firms out there >> and they have to sell out the stock in order -- because of tesla, right >> yeah, yeah. >> have to sell apple, got the money, buy tesla. >> bob, thank you. bob pisani

let's get to rick santelli now, check on the fixed income markets. good morning, rick >> good morning, david you know, it has been an up week, not an aggressive fashion, but as we sit at 92 basis points in a ten-year note, we're down one on the day, up one on the week, as you see on the intraday chart, opening it up to a two-day chart. you see the issue. we keep running into resistance right in the mid-90s at 167, 30-year bond up 4 on the week, there is some curve steepening going on long dated of course leading the selling pushing rates higher and the short end of course rather quiet. if you look at bunds open top of 10s for one woke, the bunds are riding on top as you see they have been a bit firmer. bund yields, you know, went from the minus 64 area into the minus 55 to 57 area. that is actually something to pay very close attention to. you want to monitor that spread. this week saw about foreign exchange and the weaker dollar look at one week of the dollar

index, we're down more than a penny this week and it has been a very, very quick ride down for the dollar index what is very fascinating, we know the pound has been gaining on the dollar. we know brexit is coming the last day thei year. let's look at last time the pound was this high versus the dollar you can see around april of 2018 what is really fascinating is the vote for brexit was june 23rd to 2016 if you zoom back there, at that point, the pound was just under 149. as strong as it appears, it is still much lower than it was when the brexit passed david, jim, back to you. >> rick, thank you rick santelli with the bond report later this morning, the attorney general of colorado, which is among the states that is suing alphabet, stay with us.

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for the part of the economy that can't get it open. now that we have the vaccine, you can see the light at the end of the tunnel. meanwhile, we have seen the fourth quarter setting out we feel it will be plus 4% gdp and in terms of our economy, that was mad money with you, jim. >> putting up as many money as expected as an example of the tale of two cities bank of america committed more than a billion to help institutions minority institutions.

there is a need for someone to play this role we want the federal government to solve the illness and the private sector will take care. i challenge that i think the private sector is not doing enough very positive on the economy itself >> more than 4% gdp number he shared in terms of out look for next year. we'll take a quick commercial break. don't go anywhere. it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya.

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>> what were the best performing sectors of the week in the s&p you ask? real estate teals mariand utilities having a decent week so far we'll be right back.

i was going to do macy's upgraded by jeffries and kohls they missed the numbers. olive garden did not deliver and their stock is up. people are looking right through this valley. there ain't no mountain high enough >> what do we have on mad tonight? >> i have cloudflare and dr. mina

government can spend $200 billion. the government could end this pandemic in months >> testing strips. >> yes but there is no money in testing strips >> have a great weekend. >> you too i hope your electricity comes back on. you can stay at my place and we can be very social distancing. >> good morning. welco welcome to "sqwawk on the street." >> david, we are awaiting the november read on lei skbekting a number up half of 1% we see that number flashing

across wire servers. this is a positive number since may. getting much smaller it is hitting the wires up .6. up .7 now moves to .8. the pattern continues. it is a positive it is a smaller positive the highest level since this number was out in 1959 to give you some historical perspective. treasury rates are higher on the week, the curve is steeper and the dollar a lot lower >> the fda advisory panel a prufring the coronavirus vaccine for many everything -- emergency use. >> the vote was 20-0 in favor

with one abstention. last night, it put out a statement informing moderna. the finalization and issuance and notified the cdc and operation warp speed so they could execute their plans. that could come any time today or tomorrow. the group will meet to discuss the vaccine and recommend it that would trigger about 6 million doses going out next week across the u.s. that would join 2.9 million doses of pfizer and biontech there has been a lot of back and forth about the pfizer supply of vaccine. states seem confused and think their shipments have been cut. dr. gottlieb on the board of pfizer and here is what he said.

>> if i was asked to speculate, i would say they want to leave room for moderna to deliver their 5 million, so they are trotling it. that's the only thing i can come up with. they want to test the system i think they should be taking some risk and leaning forward getting more doses in people's arms >> pfizer put out a statement they have millions of doses sitting in a warehouse where they haven't gotten directions where to ship. >> definitely some interesting comments from dr. gottlieb you've also got to wonder what this snowstorm did to the actual ability to carry the vaccines around as well i'm curious about this panel

a vote of 20 in favor and one abstent abstention it seems there might be a little more excitement or optimism? >> there was a specific reason why there were four no votes on pfizer last week that is because it included 16 and 17 that was because pfizer included those in the trial moderna only applied for that 18 plus, so there wasn't that debate the chair took pains to say that doesn't mean this gets a more e resounding yes and it was really that age issue >> when it comes to the mixed messages on doses of states will

get, does it change anything in terms of the next couple of weeks. the allocation of how many people will likely receive either one of these vaccines >> hhs yesterday was confirming they still see 20 million people getting immunized with their first shot the image, if you get 5.9 million moderna. about 3 million, so 11 this week and next you've got a week to get 9 million more out that doesn't sound more reasonable that would be more than the 7 million dr. gottlieb suggested >> thank you we'll bring in a guest to talk about this more states now saying they are scheduled to receive less doses than originally told the ceo of university of iowa

hospitals and clinics and joins us now with what he's seeing on the ground in that state thank you for being with us today. when i see headlines how are you planning, what are you hearing and what is the reason for the potential change in dosages? >> it is really concerning use what we know is at the university of iowa hospital, we received the patch double or triple the amount, so

really the vaccine was a rate limiting step. the organization to think about the remaining. so 975 will only represent under a 10th of the nearly 10,000 health care workers we have at ui health care we are very with the impending, hopeful emergency use authorization with moderna, the whole question you were discussing is what does this really mean if there is a 30% reduction in pfizer distribution if that same number is replaced by moderna certain hospitals are able to administer and store the pfizer vaccine. moderna will be applied to a

much broader group because it doesn't require cold temperatures for storage >> in light, how is your system preparing to handle two different vaccines with storage capabilities >> i feel confident it would be manageable the moderna vaccine will be easier the pfizer one just in terms of the process not just storing but reconstituting has been a little more challenge but nothing we can't handle to get 1,000 people done in a few days or even 3,000 people, we feel confident we could do it >> we had a hospital administrator on who surprised me saying when they surveyed their workers, only 60% are ready. are you finding any resist tense among the front-line personnel

>> compared to our peers, we are doing a little better. because here, we have a researcher pat win ker who led the clinical trials for pfizer at our organization and had hundreds of patients enrolled. i think our staff has been a lot more open to taking the vaccine and able to review more of the data and the experience. we have resist tense, we started a campaign and did a recent survey it covered about 80% of our staff responded. of that, 90% were definitely interested in getting the vaccine right now. out of the 10%, we think even the number could have been potentially higher for the fact that some of those folks said they weren't interested because

they had contracted covid in the last 90 days >> we have seen numbers you put up previously that case counts andhospitalizations seem to be coming down. what are you seeing? >> exactly what your data is showing. significant spike about a month ago, we have had a consistent trend of decrease. both general and icu the rate is beginning to fall. still, the rate remains really high regardless of the fact where we'll have two vaccine widely available next week, now going into this second holiday season

where we take every precaution seriously. social distancing and avoiding gatherings. >> seems like doses can get across the country only less than a tenth of your work force that has received it so far what are you hearing in terms of side effects and reactions and those employees that have gotten that shot being able to come to work the next day? >> what we have heard is very heartening in science, you don't base your data off three days of service we'll caution that we would say the vast majority

of our staff have had mild or minor side effects that have lasted the first 24 hours after the shot virtually everyone like 95 plus percent of employees came in the next day being able to work there have been reports of arm pain, body aches, low-grade fever, all consistent with what pfizer presented we have not seen any significant reactions across the people we vaccinated up to this point. >> thank you for bringing us the latest after the break, a group of state trooeees yourer and

investors.

a group of institutional investors are calling on facebook and ceo board chair roles. aims for an independent board chair to reduce investor risks michael's office actively manages $35 million worth of facebook this is a repeated effort. you made such a proposal before.

what do you think would have been different to date if, in fact, it had been successful if mark zuckerberg had given up the chairman's role if he had given up any elements? >> first i'll say true independent investors received 68% support. the problem is the structure of facebook shares. if they had been separated, you would have greater oversite, it would reduce the strain on mr. zuk zuckerbergs this is something other companies do >> what would be the functional affect

they would be in the hands of the founder. it would be a lot of scandals happening, a truly independent board would be helpful with that this is not a silver bullet, it would be a silver buck shot. it has performed very well we've seen a decrease in the value of their brand they've fallen out of the top best places to work. we think a lot has to do with the fact that the company has not evolved from being a startup. we need to separate the board from the ceo >> but you've got a controlling share holder who will vote against you. i don't understand coming on tv and talking about it, what the battle is about? >> there are a lot of battles going on you see it right now and about 48 attorneys general facebook is facing seefrious

problems i think there is going to be changes made the question is, do they lead with these reforms >> do they change their governance or let the federal government come in to make those changes for them we as investors would like to see leadership from facebook in making those changes >> i want to shift gears a little bit state aid seems to be siefenned off to the side. we've had a number of state treasurers come on and talk about how badly they need it the flip side has been that it has been states like illinois with short falls and then there is this serns that they don't

want to bail out in the crisis your response to that. >> there has been a hole in because of this pandemic the federal government of congress under estimates the magnitude of the tidal wave coming, we'll see all kinds of jobs swept away. we should have learned the lesson from the last great recession. the problem with the red states or blue states around the country. >> using the money to shore up

pension plans, they'd have nothing to do. what is the response from states like yours >> we are not asking for the bailout. we are asking for help filling the hole caused by this pandemic states can't print money states can't take on the debt the federal government can that's what we are calling on congress to do >> we've been awaiting on congress to see if they will follow through thank you for your time this morning. >> thank you let's get to our etf

spotlight. ticker there is xme, up better than 10% this year top holding is u.s. steel under pressure today adjusted the fourth quarter loss wider than anticipating. we can see that has been a very strong performer going forward with the options for the rest of the minias well. they have benefitted frothm at so far this quarter. we are back after this

we just touched on it a moment ago congress discussing covid release. close on a $900 billion deal amics.irect checks to eran stocks slipping from record highs. stay with us, we are back after this break

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>> time now for a covid news update >> vice president pence rolled up his sleeve and received the vaccine this morning on live television part of the government's effort to demonstrate it is safe and effective. >> history will record that this week was the beginning of the end of the coronavirus pandemic, with cases rising across the country and hospitalizations rising across the country, we have a ways to go. >> also this morning, virginia governor rolled up his sleeve but not to get the vaccine today he gave plasma, he urged

other people who have had covid to donate their plasma the global count of confirmed cases has surpassed 75 million experts say the actual number is even higher. i'll send it back to you thank you. we are continuing to track the latest in that targeted cyber attack of u.s. agencies and corporations implications remain to be seen microsoft's president is calling this a moment of reckoning joining us now, security officer and former nsa executive and member of the cnbc technology executive council. given your long history given issues of this type given your work at the nsa, give us a sense of how serious this is and how

we should be thinking about it >> thank you for having me here today. this is a serious event and involves commercial and government sectors and gets to the root of how we do it and security and attacking it is indeed a big deal. >> a lot has been discussed so far. we don't know how far the russians who are blamed for this, even though they've said otherwise, how deep they are into certain networks. do you know how long it will take to determine the extent of the breeches >> the government will pursue and try and pin the star there is plenty even before we get to the a industry bugs

before they find and evict those sourzs and others with additional examples of these types of things. we recently acquired something that is into network management and helps you to create alerts for these things even if you don't know the presence there. we call that looking for the unknown, unknowns. >> morgan here we see the energy department and labs potentially compromised among so many other government agencies and governments as well it takes me back to a conversation we had where josh wolf mentioned we have b 2 bombers running with windows nt still in there all of the discussion about modernizing the government,

there is still so much still outdated right now >> i wonder what this does to accelerate the shift >> meaning the deturerrence. that means a lot of responsibility that the government and private organizations do doing techniques like break and inspect and looking for the evidence of the demanding control. you use automated techniques for the unusual behavior it starts with being more resilient. the role to determine whether this was an intelligent operation or an attack

there is a big distinction between intelligence and attack. >> similar to what i was going to ask, when you have one of these breeches, the breach and what information might have been acquired and what processes might be compromised how does that get sorted out trying to assess what the damage is >> the government and incoming biden administration will have to do some assessments to figure out the government's role. if this is considered an attack on companies, intended to cause denial of service or changing data, they'll have a lot of options to pursue including diplomatic, law enforcement. if it's merely -- i don't mean to trivialize that, if it is considered an intelligence operations, their response might be more muted.

it will likely be a threshold issue. if this is an intelligence operation conducted by another nation state the government does tend to take action keeping intelligence ob ra tiffs out of the country whether intelligence first there is a lot of self-help using fast, automated tools to begin with >> in terms of trying to measure the damage, phil will we ever know what the russians actually know >> he usually don't know that until a long time after. the assessment will come from the upwards of 18,000 organizations or more who have been subjected to this

exploitation they'll need to do some deep analysis of their systems looking for weather they simply had a tool placed on target. were they exploited or did they have data taken and used at a later time. >> that will come a lot sooner likely than a government assessment than who is definitive and what they took. >> when it comes to this type of attack or do we have similar capabilities are we losing the war when it comes to cyber security right now? >> i hate to say this in a positive way, the russians are considered as the best in the world as these type of things. they've moved that into the cyber arena.

i don't say that in an admirable way but in a respectful way. they are very good the u.s. has its own capabilities and has a resilient private sector if we use the tools at end, we can make ourselves a much less target >> you mentioned the 18,000 customers. how do you go about make being sure every vendor of every company is corned. it sounds like a very difficult process and one that we've been unable to be good at >> you are right we need a scaleable solution you can do things like hot patching put out a siganture card as

they've been exploited >> appreciate your joining us and to help understand it. >> thank you for putting a light on this very important issue >> as we head to break, stocks leading to power supply 0 are on the move leading to solar, all these names up 15% this week adding to those gains. wilder pt tarofhe previous sector we'll be back in a moment. stay with us

new year, new presidency

one former obama official says what a biden administration could mean for trade, relations with china and the markets, on trading nation more "sqwawk on the street" coming up.

oneweb launches 36 satellites formerly filed for chapter 11 bankruptcy in march. i asked the billionaire founder why he teamed up with the uk government to buy oneweb >> this has been the holy gral, which has meant to finally resolve the problem of the billion people on earth that are not connected to be connected to the satellite.

even cloud providers are trying to look at end level of back up and when everything else fails satellite saves the world in 0 order to keep it connected the new satellites are too slow to take care of the new digital world we live in so it is a critical asset now. the uk did not want this asset to go to other states or in those cases the states having hostile relations around the world. we were invited to take the lead in this joint venture. i gladly accepted. i was an original share holder i sold out and i was glad to come back and then take charge >> manufacturing comes back on line in florida, expecting to

have roughly 645 satellites in or bit the next 18 months. almost a launch per month with service first rolling out in the polar regions and uk next fall and worldwide by mid-2022. >> we are taking a different view from spacex, they want to go straight and compete with mobil operations on the ground we are going to be at least in the first phase more enterprise and government-led we are going to connect enterprises, mobil operators, aviation, maritime, defense. that will be our focus treat us as b2b provider than a b2c provider our products will be more for

those who need the bandwidth in those areas around the globe >> that expert he's there, how does this speak to the longer term >> the better competitor service you've gone complete with the satellite signal that will be cheaper orbetter with a signal it will constitute an area and for a longer period of time, nothing will be available. take the case of the u.s., one of the most advanced cases in the world. just launched the rural development to cover the entire

u.s. and connect those last million, two million people. the u.s. is in that state today. talking india, africa, bangladesh, even uk has northern uk, scotland and wales that's the focus >> it sounds like there is room for this competition whether spacex, which is the elephant in the room getting so much attention right now as it starts to launch some beta services or earlier this week, wid ast and science announce they were going public with a merger come 2023, are there room for all these different constellations we've been talking about this since the late 1990s but has yet to really be pulled off. >> you never take elon musk

lightly. he's got the charisma, the funding. you have to hand it to him i hope he doesn't feel he'll be the only competition in town how many constellations are too much two at least three >> lastly asked about the trajectory for 5g roll out as the u.s. and china does continue to escalate.

they had more stress points frmt india was really warming up to china. in my humble opinion, china has taken serious miss steps this does, this project does top that in the space race, china is moving forward russia is moving forward america is moving fast uk are now joining hands i would say india, uk and u.s. will build the access around the space industry. >> this does put 110 satellites in or bit with this morning's launch we talk about this billionaire space race but the list of billionaires making these

investments continue to grow i did ask him about that as well he said he prefers entrepreneur who sees opportunities in space. he said billionaire is a byproduct. nonetheless. we've been talking about this type of service since the late 1990s now. it does seem to be becoming a reality since launch costs have come down. still very high risk we've seen pretty much every company in the bankruptcy process. >> reminds me of the race to put fiber in the ground in the 90s people who were going b to b instead of b to c.

so it is kind of a rerun >> the argument is that this is going to compliment broadband and become more accessible and faster that next generation of internet infrastructure >> i remember global star and irrid ium. >> the moderna vaccine could roll out soon but what does the distribution process look like we'll tell you next. change is all around us.

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welcome ack. fedex revenue jumping on a surge of holiday demand. the ground unit jumped 70% in the quarter. coming in 80 cents above forecast the stock is still trading down about 5% this morning. it's up year to date 83% right now, i think the focus of the street here has been the pressure or i guess less than expected strength that we've seen in terms of those ground margins as the company had to spend more to keep pace of the growth and demand we've seen for the e-commerce shipments and the strength we've seen in fedex

express. how sustainable that will be as we get into the new year as well but in general, mike, i think really when you see the run on the stock year to date, probably some profit taking happening as well. >> very tough setup. tremendous, tremendous rebound off the spring time lows for sure speaking of shipping, oderna's vaccine could be distributed soon after an fda advisory panel approved the drug. frank holland has more on how that's going to get around, frank. >> the shipping of about six million doses of the covid-19 vaccine, 3200 u.s. sites ramps up 24 hours after that fda approval the biggest difference between the moderna and pfizer vaccines is no need for dry ice it is shipped at four below zero as opposed to 94 below zero for pfizer it is viable at room temperature for 12 hours production is split between moderna and boston and new hampshire. large quantities are taken to indiana where a drug maker fills

vials and packages and then transported to a facility and prepared for shipping for mckesson they fly from memphis and louisville all around the u.s. ups told us earlier this week the moderna vaccine requires much more planning >> it has its on unique challenges because that vaccine is in smaller order quantities, there is more packages than we have for this one so the volume differences is dramatic we have to keep working through that on how to priority yuz the deliveries >> and for this first time, the they're all going to be sent together and this will be profitable for the companies involved they added 15 to 20 cents to the 2021 profit guidance of 16 to $16.50 a share they raise guidance citing vaccines as a factor u.s. vaccine shipments will generate 300 million for ups and

fedex. david, back to you. >> thank you, frank. >> they're considering tax hikes for the wealthy. robert frank covers everything related to taxes and wealth and in new york and california they're going to go together, aren't they? >> absolutely, as they usually do right now new york state lawmakers pushing for a special emergency session to raise taxes before january 1st now the reason is because the state is right now looking at an $8 billion short fall this fiscal year. without the aid from the stimulus program, they may have to cut services. now a coalition of ten labor unions writing to albany that impact of the pandemic has fallen most heavily on the poor. leaders must ask the richest new yorkers to step up to the plate. now there are three tax hikes being considered right now the first is just a trait straight increase in rates

they're looking at a financial transaction tax. this would be a tax of about five cents a share that, of course woshgs have a huge impact on the financial exchanges in new york. and they're also looking at a tax that would punish those or tax those who own more than one home in new york city. governor cuomo, of course, had been opposed to any tax hikes for years saying too many new yorkers have already left but now he says it's a question of when and how much and not if david, wejust got numbers from the state comptroller that showed november tax receipts were actually above last year's by $50 million so that could add to the case against a tax increase and just shows you how sort of k shaped this recovery has been >> this story is surprising. but also, you can argue alarming just given the fact we have seen

so many companies and so many people leave the state because of the tax burden already. i'm just curious, what happens i realize it's a long shot here. what happens if the federal government actually does dole outstimulus to states like new york >> well, i think they're going to get stimulus, may not be labelled as state and local aid. but they'll get a lot of help for education and health care and things they have to pay for. the question is, as you mentioned, is how many people have left new york during covid-19 and may not come back i argue that zoom may be a more powerful driver of wealth flight than even the salt tax changes and we just don't know how many people have left and won't come back because the data is lagging by at least a year so that's going to be the big question these tax receipts in november being higher than last year suggest that there may not be a pressing need for a tax increase at least right now or at least by january

>> it could be a false positive. it is increase in investments and markets. we could see tough fiscal times come next year robert, thank you. >> the attorney general leading that anti-trust lawsuit against google on the other side of this le srtand that is when "squa wk wk aly"tas. wk aly"tas. labradoodles, cronuts, skorts. (it's a skirt... and shorts) the world loves a hybrid. so do businesses. so, today they're going hybrid with ibm. a hybrid cloud approach lets them use watson ai to modernize without rebuilding,

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good friday morning. it is 8:00 a.m. at google headquarters and 11:00 a.m. on wall street. "squawk alley" is live ♪ >> happy friday, welcome to "squawk alley. i'm jon fortt. carl has the day off data we've been talking a lot about the value of data in