and then there was one rafaphael warnock projected to n one seat and the perdue/ossoff race coming down to the wire markets reacting to the news financials helping push the dow higher but tech stocks are set to take a significant tumble nothing out of the ordinary really a couple percent plus a flood of china news from president trump's new ban to a crackdown and arrests of pro democracy activists. we'll take you live to beijing it is wednesday, january 6, the epiphany, 2021 "squawk box" begins right now.

good morning, welcome to squawk bron "squawk box. we're watching the u.s. equity futures very closely as we get the results coming in from georgia, we'll talk about that in a moment. but if it is looking closer to the idea that the democrats actually take control of the sflat as well senate and the presidency and the house, here is what take looks like for the markets dow futures are indicated up by about 94 points. the important part here are the components that are moving hire. banks leading the way. caterpillar also sharply higher i guess on the idea that if the democrats do if a control s doe senate, they meant what they said about that initial almost trillion dollars they just passed in aid. if that is just the beginning of things if you will see more, you would anticipate a stock like cat pillar and the banks would

do well because it means fewer bad debts out there. potentially save some businesses so that is where you are seeing some of the big gains. the s&p 500 is down by about 25 -- a quarter of a percentage point. if you are looking at the nasdaq, that is where the real pain is. it is down by 2% and there is all kinds of things that we could talk about with this andrew will tell you more about which ones are moving lower and why. tech stocks are under pressure but let's take a look at the treasury yields too. if you are checking out to see what investors are thinking about, you will see the ten year note has finally pushed above the 1% yield that we've been waiting on and again, somp so ma rkso manys andrew, i know you have a look at some of the other issues that are moving beneath the scenes here >> thank you, becky. let's tell everybody about the stocks on the move as we speak

big banks, let's show you the gains there. because there are some across the board. jpmorgan the leader there up about 2.75%. bank of america, citigroup, wells fargo, morgan stanley, all potentially benefitting from what is looking like -- well, we'll see what happens in georgia, but that is where things are the faang stocks are all set to decline. let's show you what that looks like right now facebook off about 2.5%, amazon off over 2%. netflix close to 2.5%. and you got alphabet off a little bit more than 2% as well. some decliners in the nasdaq 100, you are looking at a number of companies including zoom by the way down about 3% this morning. paypal also down 3%. though we should probably at some point we'll show you bitcoin because that turned the

opt s opposite way because maybe a view that there will be more spending russell 2000 futures pointing to a gain of more than 2.5% at the open so a lot going on literally overnight in large part based on what becky is about to talk broke, which is the news of the morning out of georgia >> i would just say a little bit more on this, guys if you are looking at those technology stocks, i know there is a move to think that the democrats taking control means additional regulation for the tech companies but i think that that is a little puzzling. section 230 is something that the republicans have really taken up in a big way and there are some democratic senators that are in favor of that. but the big movements come from that investigation of the big five technology companies, the biggest five technology companies, that was started under a republican department of justice and republican ftc if you start thinking through some of those issues, it is a little weird to me the one thing that i will say though, if you are likely to see

capital gains taxes increase, you would anticipate that the biggest cuts would come to the biggest gainers from last year nasdaq was up 43% last year. that might be why people are selling some of those stocks this morning thinking that they have to sell some of their biggest winners. but remember if the democrats do take control, if they increase capital gains under budget reckon silg yaonciliatio reconciliation, they are likely to make it retroactive to january 1st. so if you didn't sell your stocks last thursday, it is too late >> it is already too late. trump was not a classic conservative look at his rhetoric and his stance on drug prices. for once tech regulation was bipartisan maybe for different reasons, republicans thought that conservatives were being censored and then the left had its own reasons for wanting it but it was a bipartisan issue. so i don't know if it becomes more likely. it was pretty likely that the trump administration was -- you

know, trurmp didn't like amazon because of the "washington post." >> and the relationship with china which is so important to apple and other companies that do manufacturing over there, i mean, again, that was a relationship that soured under the trump administration so watching technology done wn sharply, only thing that makes sense is people are concerned about the capital gains going up but you missed your opportunity. >> we need to say the absolute level of where the nasdaq is you are talking 2% >> and it was up 43% last year >> yeah, of course you know me, but i thought that there would be a heck of a lot angst in general.

but you got the stimulus, process prospects for more so we'll see what the end result is i'll tell you my surprise for the year with byron wean yesterday, might have to revise up single digits both sides are always wrong, right? the side that thought trump would kill the markets, that didn't happen. and the side that thinks that biden and united democratic front will kill the market, that could be dead wrong too. the market just likes when companies do okay. and if we reopen and get global trade and travel going again, maybe we'll be fine. >> we'll see and in fact it all does still hang in the balance. so let's get right to the top investor story of the morning. nbc news is projecting that raphael warnock has defeated kelly loeffler and the other race still too close to call. joining us to walk us through

all of this is frank luntz, he is the political strategist and pollster who we spoke to yesterday as well. and frank, a lot of the pre-decisions that you ma-- predictions are coming true. you said you thought we'd know maybe by today and as you predicted, the democrats having a bit of an edge here. how do you think the rest of this will play >> i think the way we talked about yesterday, that the democrats are going to take advantage of the disappointments of the republican party that donald trump lost the election, that the frustration that moderates and centrists have with trump not accepting his defeat and the feeling that it is time it move on time to move forward this is very costly loss for the gop. i think in the end that other senate seat will go democratic and what plays out today is that republicans yell and scream on the floor of the house with the

senate just beside them and they yell and scream about the election results and the pin says you guys are sore losers. i don't understand -- now, there are some times when you put the constitution first in factual the time the constitution comes first but let's me be clear. the american people didn't like this republicans are still licking their wounds they gained seats in the house, so it was a rejection of donald trump. and the public has been very clear about this and they voted once again yesterday. georgia has not had two democratic senators in decades but they look like they have chosen it because of their frustration with what is going on in washington and this is the lesson for the republican party of what is likely to come if they continue to behave this way >> we talked about it yesterday, that was a bold call you made

which is being borne out but 4.4 billion votes in the about perdue/ossoff race and it is 16,000 i think, something like that, right now so that is 0.2%. you are good, but there is no way that you had input that where your limit of resolution gets down to 0 aboutment0.2% that was a gut call. standard deviation, there is nobody that is that good so that is crazy you stuck your neck out and it will work. but you can't call -- you don't have the resolution to that -- no pollster -- i don't give pollsters 3% much less 0.22% >> you know what happened, i went to georgia if tfor two days >> i've been there three times during the pandemic and this is pretty amazing

i wasn't in atlanta obviously, but this is -- it is turning into virginia i think. used to be the deep south and it is just not anymore, right, in terms of demos and everything else >> the state has changed the african-american vote is significant. turnout is significant and this is a prelude of things to come. and that is what we're supposed to learn we read the data, we read the results, we talk to voters, that is what gave me this prognosis yesterday. i know you kept saying that it was foolish to do it -- >> well, bold. but what have you got to lose at this point pollsters are, you know -- >> i've been saying that on your show, i said that pollsters have a lot to be held accountable for. and if you don't fix your methodology, you will get it wrong. i'm glad we got it right >> it was more of a gut feeling. >> i realize that you are unable

to give -- i guess it is in-able to give a domp pli himself >> i'm just saying you can't call to 0.22%. itched it was a bold call and you are right. but to get it to 0.22%, i mean, that was the only point i was making you're great you're always right. sorry, beck, go ahead. >> frank, let me ask you, i was watching some of the polls come in county by county. and in many instances, the where that senators underperformed what president trump had done just a few months ago, but also underperformed what they had taken in themselves a few months ago. is that reflection of a stronger turnout suchtsing tpporting the or weaker supporting the republicans? >> you have to give stacey abrams credit that the organization of the democratic party was very impressive. and you have to hold donald trump accountable. look, he showed up at that final rally and spent half the time talking about his own race from two months ago

i get texts from him three or four times a day asking for $10. i mean what the hell donald trump asking for money, for what it is not going to georgia, it is not going to fund his challenge which will be defeated today and finally this election will be over at some point you have to looks american people straight in the eye and acknowledge reality. and at some point particularly on a show like your, particularly on a network like cnbc, you have to tell the truth. whether you like it or not and the idea that donald trump has raised somewhere in the neighborhood of $60 million and he spent less than a million of it on challenging these results, where is the other $59 million going? and there are people who are giving money that simply can't afford it because they like him that much. where is the money going i think that we need to call an end to twoo2020, we need it loo forward and this is a wake-up call for those senators and

congressmen today who are going to -- and ifi sounda agage tait, i am i don't know what the damage will do to the brand and if joe biden and the democrats use this as an excuse to raise taxes, to hurt business, they will be punished in two years the public has spoken. work together. get things done. stop being so political and start putting people ahead of politics. this obviously gives power to the moderates you would think, but it raises a lot of questions about both parties going forward. the democrats have had their own issues nancy pelosi barely holding on to the speaker ship. and the in-fighting that has taken place there. of course it pales in comparison to what you are seeing in the

republican party and i guess that is the question this one of these parties suffers and this one holds together if either do. mcconnell has already signaled that he will be making a speech today over the electoral college and i don't think that it will be a speech that will go lightly. but it will highlight the fwrak dhur that you are talking about in the republican party. >> nancy pelosi does not represent america. she does not represent the mainstream of the democratic party, but she is in charge. and on the republican side, donald trump made it very clear monday night what he is going to do challenge -- imagine the sitting president of the united states challenging a sitting governor two weeks before he is ushered out of office. that the level of in-fighting within the gop thanks to donald trump will be, if i can give you historic analogy, almost exactly

100 years ago, 1912, this is teddy roosevelt versus william howard taft, the republicans lost, it gave the democrats presidency for the -- in consecutive year for the first time in more than 50 years this is significant. this split between the gop in 1912 foretell the victory of the democrats for the next eight years. the split now within the republican party foretells democratic successes unless they listen to and respond to the opinions of the american people. you had me on this show to give me an accurate read of what is going on so imstate this clearly. the american people do not want the electoral college thrown out. the american people believe that joe biden won the election the american people want to move on the american people are struggling, they are nervous about covid-19, they want the vaccines delivered in a timely fashion which is not happening right now. they want progress to be done

now. listen, republicans, and listen democrats, cut the crap. and start doing the business of the american people. >> frank, there is a very vocal part of the republican party of the voters there who think that donald trump was robbed of this election and it may be because they are listening to the things that donald trump and some republican senators continue to repeat so that aren't founded in fact but if you have these republican senators who are now going to contest the electoral college today, clearly they would like to hold on to some of those trump voters donald trump doesn't seem like he is going away he has already indicated he may run again in four years. so how does this kind of break out? there are definitely donald trump voters out there, republicans who will show up, donald trump voters who will show up for him and not other people what happens >> make no mistake, half of trump e's vote think he was robe

and half want to challenge this election if you vote against challenging the election, you will have a primary. trump has already made that very clear through tlehreats even if you consider the phone call that he made to the secretary of state's office, highly improper. i don't know if it was illegal i hear democrats talking about impeachment again. well, they hurt themselves the first time the public is basically saying -- and the whole public because you represent americans. and they are saying to these politicians, stop it and i think that you are right, i think your observation that the republican party will be in chaos, i think i think two days in a row is enough, i think tomorrow the goop will be in a much worse position nationwide than they are today. >> what do you think happens in

terms of where we're left the next two years because there is another election in good years and that could shift the balance again. what do you think happens ifs m moderates have this additional policy you have budget reconciliation that could go with a simple majority vote. so there could be some pretty significant changes that take place. >> you're asking exactly what the markets are asking and you are correct to ask it. joe manchin is notice tw the mot important senator. the problem solver caucus is now the most important caucus. and in fact this is great news for those who are in the center because with a 50/50 senate and with the house where republicans gained so many seats, and i want to remind viewers that at the time that donald trump was losing by 4%, republicans were gaining seats after seat after seat in the house.

and have come closer to taking a majority than at any point in 20 years. the minority within the house, the republican minority, is greater and it will be a tremendous challenge for nancy pelosi on the senate side, a 50/50 vote gives the democrats control, but joe manchin is the single most important vote this means that if theyactuall listen to what we hear from the public, it will be great news for the markets, great news for investors, because they might actually get something done for a change >> always a question as to whether people want things done or whether gridlock is the best. frank, thanks for joining us this morning we'll continue to see as we keep watching the vote coming in. thank you. >> thank you coming up, we have so much more this morning. president trump banning transactions with eight chinese apps including the popular ally

pay. plus we'll take you live to beijing for the latest on the crackdown on pro democracy activists. and check out shares of bitcoin hitting a new high early this morning. topping 35,000 so maybe this has something to do with the election and potential for stimulus and brintsing mo ing printing more money. this is andy, my schwab financial consultant. here's andy listening to my goals and making plans. this is us talking tax-smart investing, managing risk, and all the ways schwab can help me invest. this is andy reminding me how i can keep my investing costs low and that there's no fee to work with him. here's me learning about schwab's satisfaction guarantee. accountability, i like it. so, yeah. andy and i made a good plan.

president trump signing an executive order that bans transactions with eight chinese connected apps including the popular alipay platform of course owned by ant group. the orderle including three apps owned by tencent they say that it could be used by the chinese government to track locations of federal employees and contractors. also build dossiers. a spokesman for biden e's transition team doesn't comment, so we'll see if it ultimately holds up and also regulators are pressuring jack ma to share the data that his firms have collected. they accuse his companies of having a monopoly.

so another salvo in the back and forth between u.s. and china, but also, joe, the questions about jack ma and his place in china and everything else. >> he's around he's around. he is laying low there was some question. but i want to stay on t vchlv. china, biwe were talking about where is jack. but he's around. laying low that's what we know. may police arrested ablgctivisted f participating in an unofficial primary

eunice yoon, have you seen him around >> i have not. but i have spoken with people in the tech industry who say that he did recently come to beijing. so he should be around, but we didn't know absolutely for sure. >> laying low. >> supposed to be laying low >> i'd lay low too if you were him. anyway, new story almost every day. >> yeah, so hong kong authorities targeted people who had organized an unofficial primary last year that ultimately was meant to help pro democracy lawmakers to get more influence in the legislature, which is normally stacked with beijing loyalists. so security officials said today that the action, that primary, was considered subversive and an attempt to overthrow the government under the new national security law. so activists argue that this is

just a normal part of a voting process, but even so, over 1,000 police descended upon and rounded up the opposition lawmakers and activists in the early morning hours in order to try to -- and what was seen really as the biggest crackdown since this new national security law came into place. so an american lawyer position who worked closely with some of the activists was among those arrested and that raised a lot concerns in the international business community about the safety for ex-patriots also the incomes secretary of state blinken had tweeted his position calling it an assault on those bravely advocating for universal rights he said that the biden/harris administration will stand with the people of hong kong and against the crackdown on d democracy. beijing though had a totally different takts aview they said that they backed the

hong kong government for fulfilling its duties and said instead that hong kong's peoples rights and freedoms according to the law are not going to be affected so obviously things are setting themselves up for more tension between china and the u.s. once president trump leaves office. >> we live in interesting times, right? it is global is 2021 different? >> by the way, you failed. >> what? how? >> you failed because you weare off the air right now. >> that's not me no, no, no, that wasn't me i think it is what you -- that is what you just said, i didn't do anything. did i? i just said that if you were jack ma, i might lay low too i'm allowed to say -- we're probably back on now i think that it was what you were saying, eunice.

maybe it's your fault. anyway, thanks, we'll see you soon i don't know if we have nielsen boxes over there anyway. not that we use them anyway, thanks when we come back, much more on the big story of the morning, democrats flipping one seat in georgia with the race too too close it call if the other seat. balance of power is hanging here and check out shares of the largest producer of eggs shares rising sharply after they reported a surprise profit for its most recent quarter. egg sales by the dozen grew by 4.6% year over year. that stock this moinuprng by about 5.25%. team to help you plan dessert? ♪ french vanilla! rocky road! ♪ ♪ chocolate, peanut butter, cookie dough! ♪ ♪ scoop! there it is! ♪ scoop! there it is! ♪ scoop! there it is!

♪ scoop! there it is! scoop! ♪ ♪ shaka-laka! shaka-laka! ♪ shaka-laka! shaka! scoop!. ♪ ♪ choco-laka! choco-laka!... geico. switch today and see all the ways you could save. ♪ sprinkles!

welcome back right now time for the executive edge and a look at what is moving right now starting with the stock market futures. you will see that the dow futures are indicated up by about 60 points. part of that is because of the strength we're seeing in the financials jpmorgan and citigroup, goldman sachs have been stronger we'll talk more about that and interest rates in a moment s&p futures down by about 13 and nasdaq down by about 265 points. big declines there, but you are talking about an index that was up by over 43% last year so some questions about what will happen next when it comes to tax law, whether there will be an increase in capital gains

as well. if that is the case, it would probably be retroactive to january 1. but if you have a united government, if you did see more regulation coming for technology, you can look at that in a bunch of different ways but we want to check out commodities as well. crude oil hitting $50 a barrel for the first time since february of 2020 as the saudis come out and surprisingly say that they are going to cut production, taking over opec again. you can see wti up this morning by another half a percent. trading at $50.21. we'll talk more about the big oil stocks coming up but you should also check out what has been happening with some of the other commodities. gold is trading near its highest level since november 9 take a look this morning, you will see that it has given back about 20 cents but trading at $1954. and wheat prices hitting their

highest level since 2014 and check out soybeans, their highest level since june of 2014 they rose 37% in 2020, best yearly performance since 2007. and we mention these financials being higher probably in large part because of this, take a look again at the treasury market, we're waiting for the ten year to put back above 1%, hasn't happened since march. but if you check it out this morning, you will see that right now it is yielding 1.024%. >> yeah, headed to what 2%, i think byron said but we soared. so coming up, market reaction to the georgia runoff election, financials and small caps set to jump

tech pulling back. more straight ahead. i made a business out of my passion. i mean, who doesn't love obsessing over network security? all our techs are pros. they know exactly which parking lots have the strongest signal. i just don't have the bandwidth for more business. seriously, i don't have the bandwidth. glitchy video calls with regional offices? yeah, that's my thing. with at&t business, you do the things you love. our people and network will help do the things you don't. let's take care of business. at&t. but there's only one way to become one... by going all in.

the new lexus is. with a lower center of gravity, a more responsive suspension, and an aggressive wider stance. this is what we call going all in on the sport sedan. lease the 2021 is 300 for $359 a month for 39 months. experience amazing at your lexus dealer.

welcome back to "squawk box. if you are just waking up, the big story is the georgia runoff election nbc news is projecting that raphael warnock has defeated kelly loeffler and the other race between perdue and ossoff still too close to call. that remaining race will decide the balance of power in the senate of course take a look at u.s. equity futures at this hour based on where things stand, dow looks like it would open up higher about 48 points. nasdaq off about 259 points. we've all been trying to make sense of some of the tech stocks which have taken a real tumble this morning off of thenews. s&p 500 off about 15 points. meantime solar stocks soaring on the prospect of democrat control of congress.

for example sunpower up over 5.5% the markets will also be watching daiother big event, congress meeting to certify the electoral college victory for joe biden. for more on all of this, we are joined by the ceo and co-founder of blueprint capital advisors. good morning given the results or what appears to be the results as of this moment, are you surprised at how the market seems to be reacting >> i'm not surprised at all. i think in a many vethat many tt if we experienced a blue wave and the democrats controlled the white house in both chambers of congress, that that could mean real issues for big tech

companies. and so the movement that you are seeing in the nasdaq this morning is clearly reflecting the prospect of a blue wave coming likewise i think when you think about policies like the "green new deal" and some of the other poll is is coicies coming out o progressive wing, one would expect that alternative energy would rally in this type of a market environment >> let's go back for a second because we were having a bit of a he debate at the top of the hour broke what is moving the tech stocks in particular. you look at an apple, a facebook, an alphabet, becky had talked about the prospects that this is tax related. of course the other major issue is whether this means that there is more regulation, more opportunities to break them up what are you -- what do you think this really signals? >> i think that there is a couple things going on here. one is let me just say that tech is still from a fundamental

perspective the place to be. now, having said that, it has been the place to be returns in the tech sector relative to other sectors have been very, very what i'll say disparate in terms of leadership so i think that what we'll experience over the course of 2021 is the potential for tech to still go up, but for tech perhaps to not be in a leadership position takes has been for the last 12 months and everyo even longer time period behind that from the perspective of what is going on in washington, you know, we'll finally get some clarity in terms of leadership my sources tell me that the democrats have won both of those races and that effectively gives them control of the senate when you bring into the process that

vice president-elect and her ability to cast a tie-breaking vote and i think what that means is democrats will have an easier time moving some of their policies through i think what we're hoping from an investment point of view is that they don't roll back the tax cuts, they don't roll back the jobs act, they don't roll back deregulation. and they allow business to continue to conduct itself in a -- >> you may be hoping those things don't happen, but do you think that they won't happen now? >> i think there is more of possibility that they happen, but i don't think that the democratic victory is convincing enough that you can take bold moves to sort of rollback some of the positive things that occurred over the course of the last four years. i mean, look, the senate situation clearly very tight

democrats lost i think as many as 14 seats in congress. and i think when you look out over the course of the next two years, you are going to have, you know, president trump continuing to campaign to try to find a way to continue to have an influence on national politics >> if we have this conversation 18 months from today, will there be higher taxes on individuals, on corporations for example? >> i don't think that there will be higher taxes on individuals or corporations. because i think that we'll still be digging our way out of the pandemic and i think higher taxes on individuals and corporations sort of argue with our ability to dig out will there be hire taxes gher t some individuals i believe so i think the progressive wing of the party will be successful in targeting income levels that are very high, perhaps somewhere in

the top 10% of wage earners. i think that is greater than 50% possibility that that happens. and so if you are a millionaire or billionaire, you are probably looking to book some gains in the current environment rather than waiting to see potentially higher tax rate in the future. >> i don't know if you play bitcoin or you watch it, it has crossed 35,000 this morning. and that seems to be on the expectation that the government will be forced to continue to print more and more money perhaps if there is a blue wave, perhaps more stimulus measures put in place of course therefore the argument would go devaluing the dollar. does that make sense to you? >> that does make sense to me. and look, from a policy perspective, i think more stimulus is needed and i think with the president out of the picture, we will see more stimulus, which is going to

devalue the dollar but i'm not sure the decision makers in washington have much of a choice. i think that it is absolutely necessary given the unique circumstances we're facing >> so just real quick, if you were to make some moves this morning before the market opens, or try to think about your portfolio, anything different that you would do this morning that you didn't do can yesterday? >> no, you know, i'm sticking to the big tech names i like them from a fundamental -- >> are you buying more >> absolutely. i think that given that we now have multiple vaccines in place, the big surprise for 2021 is that the u.s. economy and the global economy rebound much faster in the second half than most people expect and when that happens, i think that you see a broad based rally that we might not be able to top

anytime in this current decade and we are at the beginning of this decade. so we are very, very bullish on equities and let's be real, it doesn't matter at the end of the day whether there is a split or whether the white house and both chambers of congress are in the hands of one party there has been roughly, you know, 45 years since 1933 where the party held the white house and both chambers of congress and equities had double digit returns somewhere around 10.4% if you look at it when it has been submit, equity returns have been 10% so regardless of the circumstances and outcome that he occurs in the state of georgia, i think in a history tells us that equities are still the place to be. and where you look at where interest rates are, that also tells us that equities are the place to be. >> jake, appreciate your perspective. thank you. i'm sure we'll be talking to you

a lot more between now and the next 18 months and we should have that conversation to see what actually ends you up happening thanks and when we talk tech, i mean, you mentioned solar. we probably shouldn't leave out ev, right? have you checked this company that is now going to be $700 billion in market cap today? that is now at an all-time high? that is tech sort of look at that tell me that doesn't have something to do with what we're seeing and i can't help but go back to december 21 when every better than person in the word talkiwo talking about why do we add to the s&p when we're at the top. so nice call on it being the top. coming up, krcrude prices risin and big oil players are seeing a boost too. we'll get the best plays in the

sector next. and as we head to break, general electric is ending a three year probe into allegations of executive misconduct the company don't claw back compensation from jeff immelt or other executives over accounting issues or his use of a backup corporate jet. that is cool, isn't it just in case you get a little problem with your global express, you got one following you around that is awesome. the company says there is no evidence to support share holders' claims of fraud and abuse.

oil prices breaking through

$50 a barrel for the first time since february wow. big oil stocks big oil has seen a big bounce. exxon up 24% chevron up 69% connick could he phillips meanwhile has doubled. joining us now for a look at the energy sector is rob thumb mel managing director and portfolio manager at tortoise. we talked quite a bit about this yesterday in one of our annual things that we go through. he's saying $65 oil. energy stocks will be one of the best performers for the year as the economy opens up globally, travel starts coming back and the transition to renewable doesn't happen immediately.

>> i would agree 100% on that. energy demand in the second half of the year is expected to increase pretty substantially. if you think about it, 2020 was only the second year in the last 38 years where energy demand actually declined. expect a big rebound in global energy demand in 2021. that big mac crow factor will drive energy stocks higher >> you have parts of the industry that you prefer more than others or parts that you would not emphasize as much if you were an investor >> yeah. so at tortoise we really like pipeline infrastructure for a couple of reasons. investors are looking for dividend yields. pipeline infrastructure offers significantly higher dividend yields than the rest of the market in companies like kinder morgan and inbridge, you can get 7, 7.5% dividend yields you can't find that across the market anywhere.

the other thing we like is the models change. they don't need to change. what that means is there will be a lot of cash. that will be returned to shareholders, not just in the terms of dividends, share buy back, debt reduction all of these factors investors will reward because the sector's been beaten up over the last several years and it's got a lot of room to run from here. >> rob, how do we power the grid for the next five or six years how quickly do we get to hydro, wind, nuclear, whatever we're trying to do because even the evs need to be charged, don't they? then there's normal power we need what's going to power the grid >> joe, that's a great question. the energy transition. that's very significant and i think investors are recognizing that and in that energy transition what that means is we're shifting away from coal to power the grid and to more

natural gas and renewables, solar and wind there are some emerging technologies coming in the energy sector in the case of carbon capture, hydrogen development. those are even more in the future all of this basically will result in lower carbon emissions. so the big mantra for the energy sector is how do you generate more energy and less carbon emission and so we're in the process of that transition. we like stocks that are participating in that transition and we think that's a significant opportunity for the entire energy sector. >> hybrid carbons will still be part of it, natural gas, oil, jet fuel oil, things like that rob, we'll keep an eye on things hasn't been since february that we've been up here remember that spike when we went to negative prices for oil never forget that, in march or april, whenever it was that was a buy should have bought some of those futures if we could, which we can't. anyway, thanks remember that, andrew?

is that not weird? what did it go to, minus 40? where were we? that's when we should have put the tank in the backyard cows are too expensive too hard to clean up >> remember that >> after believe me, i have a german shepherd we should have done that >> we should have -- we've got a lot coming up on the show in the next two hours a lot more of course on the big story of the morning, the democrats flimg one seat in georgia with one race still too close to call. we'll show youhas vi wt'mong on all of that ahead. two hours of "squawk box" coming up

breaking news overnight. democrat raphael warnock projected to flip one senate seat the other race still too close to call. the balance of power for the senate hanging on that remaining vote outcome. in the meantime, big tech tumbling as investors await the outcome. some believe democratic control could mean more regulation we'll hear from joe lons dale. troubling new developments in hong kong as dozens are arrested under the new national security law there. plus, the trump administration taking some final actions against china targeting tech

firms. former federal reserve governor kevin warsh will join us for news making interview on those topics and more. the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures at this hour so much going on given the news out of georgia overnight the dow looks like it would open up higher at 87, close to 90 points higher. perhaps the real story is that tech stocks are under pressure you're seeing that in the nasdaq which looks like it's going to open up 207 points down because of a rise in interest rates and in large part because of the

race in georgia and what it may mean for tech regulation meantime, you're looking at some stocks, facebook down 2.5% meantime, look at solar stocks for a moment because this morning democratic senate would be more inclined to pass, at least the view is would be more inclined to pass alternative energy friendly policies stocks like invesco solar up 6%. solar etf up more than 5% this morning. joe. >> tesla at new highs easily >> tesla new highs as well talking about 2% this morning. >> $700 billion market cap now i mean, that's not far from a trillion tesla. get right to the top a little ways, i guess, 30, 40%. for real 700 billion. let's get to the top investor stories. democrat raphael warnock has defeated republican kelly loeffler

the other race still too close to call. ylan mui joins us with more. ylan, good morning >> reporter: good morning, joe georgia election officials are planning to meet mid morning to assess the status of the vote count. many of the outstanding ballots are in democratic strongholds, especially around atlanta. that is good news for jon ossoff nbc news currently shows that he is leading the gop incumbent senator david perdue 50.2 to 49.8% though that race is still too close to call. georgia does allow for a recount to happen if the final margin is in .5% in a statement, perdue said we will mobilize every available resource and exhaust every legal recourse to ensure all legally cast ballots are properly counted. in the other senate rate pastor raphael warnock declared victory in this video posted overnight >> we were told that we couldn't win this election, but tonight

we proved that with hope, hard work, and the people by our side, anything is possible. >> reporter: now, guys, senator loeffler has not conceded her race and she told her supporters that she plans to make sure all legal votes are counted as well. back to you. >> hear that a lot, don't we, ylan want to make sure all legal votes are counted. we're not going to count any of the illegal votes if we find any at some point. you don't have a time line, do you, at this point, ylan, for -- let's talk about -- i mean, the warnock race, i don't know if we need to talk about that, loeffler race, but the perdue race, when do you do a recount .2% or so? i don't know if it's changed i was on the way in. i think it was 16,000 on 4.4

million but when would you -- >> yeah, so -- >> go ahead. >> so the losing candidate has within two days of the state certifying the results to request that recount the deadline for the state to certify the result is january 22nd, so two business days after that perdue would have to file if he is seeking a recount of the results. certainly the state could certify the results earlier if they finish the vote count in time so that could happen any time before january 22nd if the state finishes up. the deadline for the state to finish and certify the results, january 22nd perdue has two business days after that this could potentially drag out through the month of january, guys. >> that -- those numbers i just saw there were bigger than i saw at 5:45. it was .22% and it looked like 50.2 to 49.8 what's left, ylan? do you know what and where

>> reporter: i know a little bit. i'm not steve kornacki but i can tell you in dekalb county there were 19,000 votes left to be counted. fulton county 4,000 absentee ballots. yesterday georgia officials said they hoped to have a better status and sense of whether or not they'd be able to have a final result by about 1p.m. today. they're meeting in the mid morning in order to just sort of see where things stand so it's possible we could find out today. again, it all depends on how fast the ballots could get counted and whether or not senator perdue does find out if he loses the race in order to seerk seek a recount. >> we'll check back or call max if you get something something important, we'll make room for more on what the georgia senate runoff and what a possible shift in the balance of power could mean for the markets and the economy, we're joined by

jason tren ne jason trennert the market is down the s&p and dow taking everything in stride we pointed out and tried to analyze leading up to the election why there wasn't more angst and we decided maybe stimulus if it's not a divided government, you'd have more stimulus from democrats? maybe not the political will to go way left because of the realization that it's such a narrow margin. i mean, it's so -- it's 50-50. if it turns out that way, 50-50 in the senate with the vice president-elect breaking things and only four or five seats in the house. is that what's happening >> joe, i don't think it's the latter, to be quite honest and i think just some of the early moves in the house, i don't think give you -- don't give me as a conservative a lot

of hope that there's going to be a lot of restraint if the democrats pick up two seats in the senate in 2001 george bush 43 had almost precisely the same setup, let's say the democrats picked up two seats we had 50-50 in the senate a narrow majority in the house and he still got a $1.3 trillion tax cut through, no child left behind, higher ed, defense spending even if it's 50-50, i think it's going to be a strong tendency to go for it. it's going to be an element of time which is you have two years to get your agenda through, thinking about how able they are. argue about interest rates and the dollar in terms of what's happening this morning. >> well, if you -- you manage

money so would you worry about ending the filibuster? that could usher in a lot of legislation if that were to happen do you think that's going to happen >> i think -- i don't know, but i do think, again, i think some of the early moves and some of the rhetoric and hopefully it dies down. hopefully it calms down a bit if the democrats were to pick up two seats in the senate, i think a lot of things would be on the table, at least from a headline risk point of view which would be statehood for puerto rico and d.c., filibuster, packing the court. a lot of those things which might make people feel somewhat uneasy, but i'm not a political analyst. i'm a market guy. >> the dow -- that sounds like the end of the world for you and conservatives, jason the dow is up 94 points. why? >> well, i think, again, it goes back to -- joe, going back to what you were saying i think there's an expectation which is correct, that there's going to be a lot more spending.

you have to remember the house, the initial offer on the table after we passed three fiscal stimulus measures was $3 trillion we've had it down to 900 billion but if the democrats were to pick up two seats, there's no question in my mind that later this year there would be a sense that more spending is needed that may be true if republicans pick up one of the seats as well i don't think there's a lot of fiscal sobriety on either side, but i think that's the fear. and i think tech stocks generally speaking are being priced as if long-term interest rates are going to stay negative in real terms in perpetuity. i think there's a re-evaluation of that now. i think what's happening this morning, joe, my own opinion is that this rotation out of growth and into cyclicals or into more value oriented stocks, that's

what's happening we don't know until we know, but i think people are starting to inch that way. >> so you're not telling any of your clients to get one foot out the door, head to the exits, taxes are going up, capital gains are going up, there's going to be, you know, money -- there's going to be regulations in the oil industry all over the place, you're not telling any of them to do that? >> i don't think so. and it's not because i like what may happen, it's because if the fed is keeping interest rates close to zero until 2023 and growth is 25% and you're going to drop $900 billion into the economy in the first four months of this year, i don't want to be short and so that's the -- you know, the problems, the concerns i think are more long-term concerns and, again, it has a lot to do with viability of the

dollar as reserve currency it has a lot to do with long-term interest rates but in the short term i'm not sure it makes more of a difference, i think, the internals of market as opposed to the overall level of the major indices. >> you put your entire cash balance in bitcoin or are you waiting on that? that's a joke. >> i'm more interested in gold i got a haircut on sunday. my barber spent the entire time, all 15 minutes, talking about bitcoin so, you know, and i think bitcoin is starting to challenge gold, but i like gold better. >> if you don't have any and your barber does, perhaps you should give some to your barber to manage. anyway -- >> he's a lot smarter than i am right now. >> that's what it sounds like. all right. thank you. >> thank you. >> we'll see you later thanks becky. >> thank you

>> okay. when we come back, the oprah-backed vegan food company oatly planning to go public. we have the details after this break. kevin warsh is going to join us to talk about his op ed on china's bid for financial supremacy and news that hong kong has arrested hundreds the interest rate pushing above 1% for the 10-year for the first time since march what the implications are, what it means for financials. lots of things to talk about "squawk box" will be right back. and #1 for eczema symptom relief* gold bond champion your skin

gold bond save without even leaving your house. just keep your phone and switch to xfinity mobile. you can get it by ordering a free sim card online. once you activate, you'll only have to pay for the data you need starting at just $15 a month. there are no term contracts, no activation fees, and no credit check on the first two lines. get a $50 prepaid card when you switch. nationwide 5g is now included. switch and save hundreds. xfinity mobile.

welcome back to "squawk box" this morning want to show you shares right now -- shares. we're going to show you the markets but let's show you the 10-year notoriety now. right now over 1%. 1.019. also wanted to tell you making some other headlines this hour besides what's taking place in georgia, dow component unitedhealth buying a health care company called change health care. going to be combined with the optimum health care unit paying 25.75 per share in cash $7.8 billion in total. another dow component to talk about, walgreens also involved with a big deal this morning it's selling its alliance health care unit to drug distributor

amerisourcebergen for of poin $ billion. general electric not seeking to claw back any compensation from former ceo jeff immelt they have had a three-year probe into the accounting issues and immelt's use of the backup jet in the famous article in the wall street journal reporting on what that second plane was that would travel with. becky? >> andrew, thanks. vegan milk brand oatly is planning an ipo that could reportedly raise $1 billion. it's one of many new offerings in the pipeline. leslie picker joins us she has more. >> reporter: good morning, becky. that's right i'm hearing from three sources that owe tatly is looking for

multiples. backed by oprah and blackstone it's a trendy esg investing thesis which has helped propel the likes of businesses such as beyond meat and tesla. billions for oat milk might sound like a lot, they are banking on investors paying up the ipo will be several months away, but other deals are more imminent the q1 calendar is jam packed with listings for ceos planning on moving them up earlier out of fear that that window might close. a firm set turns for a billion dollar ipo that is set to debut petco, poshmark and playtika also they are funding an acquisition including that from softbank is set to debut within a week guys. >> hey, leslie, oat milk has

made its way into our house in the last two weeks what's the bull case. >> mine, too. >> what's the bull case and bear case. >> you hit the bull case karen finer man also said that her kids had stocked their fridge with oat milk, that it plays into the younger demographic. a lot of people are kind of getting on to this trend and have been drinking it more so the bull case fits into, you know, a younger demographic, younger purchasing power for oat milk the esg thesis, the fact that people have been putting money into things they view asus stainable for the environment, oatly fits into that thesis. the bear case is the moat for this company it's not that difficult to make oat milk oatly has other products, yogurt, ice cream, but i think that the power here for them is really going to be the brand and what they can establish. and going public is something

that a lot of people pursue in order to differentiate themselves from their competitors. >> they keep telling me what cow's milk is to turn me off but it's probably a little late for me thank you. we'll see you soon >> thank you thanks, becky. are we convinced, by the way, that oat milk is really milk like almond milk, is that really milk >> almonds stuffed with water. >> we need to do a segment >> enough people argue back and say -- >> yes >> well, the same thing with beef the beef industry is up in arms about them calling it meat if it's not meat. there are some trademark issues. >> kind of cool. we'll get better and better, too. think of it, what if you could chemically synthesize something that's identical to -- that's what we're trying to do obviously or milk. if you really want to -- for a lot of reasons -- >> not quite there yet >> no, we're not

it is like modern day alchemy. it's for coffee. >> in my coffee. >> that's about it. >> younger kids, i've got them drinking it. they need the vitamin d. you want to be good for the calcium for the things that go on that does concern me are the older kids getting enough calcium we're trying to figure it out. >> the dude loves his white russians you have to use -- >> ka lihalua and milk. >> if i let myself go like seinfeld, i'd have cereal fleels a day. >> that's true >> that you use milk you can't do that. you can't. empty calories we have to stick with the kale chips. >> remember when kids used to drink lots of orange juice the whole world is changing. >> too many calories. >> oat milk, almond milk, before

we do that, we have former federal reserve gov more kevin warsh. he may have a view on milk as well check out some of the big tech names. down sharply some believe that a full democratic control of congress to lead to more regulation for big tech facebook off over 2% alphabet off over 2% back in a moment time now for today's aflac at cpa question. whomny developed the first smartphone in the world? the answer when cnbc's "squawk box" continues for twelve-hundre. i had no idea i'd have to pay that. that's right. it's hard to know exactly what your health insurance is going to cover, so you gotta protect your blind side. aflac! aflac pays you money directly to help with expenses health insurance doesn't cover. really? aflac. get help with expenses health insurance doesn't cover. get to know us at aflac.com.

what company developed the first smartphone in the world? ibm. simon personal computer launched in 1992 and was manufactured by mitsubishi the device had a touchscreen, calculator and email capability. neil young has sold half of his entire song catalog to hypnosis songs fund.

the deal gives the investment vehicle the rights to copyright and all the income interest on more than 1,000 songs from neil young, the canadian for a reported $150 million and, yeah, becky, he's got -- the beatles could be -- could represent two or 300 one-hit wonders, neil young could be the same. amazing songwriter. >> you know, this comes after bob dylan sold his catalog, 300 to $400 million. stevie knicks sold half of her song catalog and dolly parton is talking about selling hers it's coming because they're worth a lot more money the going rate is 10 to 18 times the annual earnings they would get on these things, the annualized royalties you have spotify, streaming music so the songs that we know

and love are worth a lot more money than they were a few years ago. >> we both like -- i mean, he's -- after the gold rush is just a quintessential. >> i'm partial to "harvest moon". >> which was later because he has an album called "harvest." ♪ ♪ >> very romantic very romantic. all right. but we digress up next, kevin warsh on his op ed about china's bid for financial supremacy. his thoughts on hong kong. the president's move to bar u.s. transactions of eight chinese apps "squawk box" will be right back.

competition beat us, again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. got to do something. workday! i think i got something. work... hey, rob, you're on mute. hello. [all] hey... there he is. workday, the finance, hr, and planning system for a changing world. ♪ch-ch-changes

president trump signed an executive order late yesterday banning transactions with eight chinese software companies including giants we chat pay and

ali pay from alibaba troubling news out of hong kong. police have arrested dozens of pro democracy activists. authorities claiming they violated the national security law that was passed less than a year ago kevin warsh joins us now he was a former fed governor and distinguished fellow at the hoover institution he had an op ed titled beijing's bid for financial supremacy in the wall street jourm. it was timely yesterday, maybe more timely today as we continue to get the headlines that are coming in. you've been concerned about our competition with beijing and maybe how it's heated up and changed with what's happened with covid their economy is doing pretty well right now what do you think is happening >> becky, thanks for having me on unfortunately, this is a subject that's timely likely every day over the last couple of years and likely every day over the next generation. china's new geopolitical adventurism, speed, force,

economic, geopolitics around the world has really marked this period, and i think it has a couple of reasons for having accelerated in the last year the pandemic that you rightly make note of so the chinese economy in 2020 was the strongest economy in the world among the big countries and in addition they see the u.s. as being vulnerable they see our treasury market as being vulnerable they see, frankly, our economy and system as being vulnerable they think we're riding a tiger and i'm afraid they also might be under the mistaken view they're riding a thoroughbred. this is the great geopolitical fight, the great power competition of the 21st century. it's timely this morning like most mornings. >> this morning we're actually watching the 10-year note pushing back to a 1% yield for the first time since march that has people sitting up and paying attention they may want to hurt us with

the treasury market but they've been big, big owners of treasury for a long time number one and number two traditionally >> that's true, becky. historically they have been the most important buyer of treasury securities and dollar denominated assets, both through official channels, through their foreign reserves and unofficial. i would say that trend seems to be changing. the big buyer of course of treasury securities is the federal reserve and the federal reserve in march of this year in the deepest, darkest, scariest moment in markets from the pandemic, the chinese looked like they effectively moved out of those securities like a lot of foreign buyers. the fed had to show up and buy a trillion dollars of assets in just three weeks' time so there seems to be some material shift below the aggregates and it looks to me as though two things are happening, becky. chinese purchases of u.s. treasuries are dissipating, not in a way that would be probably

too alarming because the chinese don't want to suffer big losses on that, but secondly and maybe most important, chinese are going to the big sovereign wealth funds, big asset managers and they're saying, come take your low risk capital and invest in chinese sovereign debt instead of u.s. treasuries because i think what the chinese have figured out is they do not want to be reliant on the u.s. economic system, financial system markets because of announcements like you've made in the last couple of mornings like chinese telecoms being delisted and the rest. they feel uncomfortable being stuck with a u.s. dominated global economy so they see what's happening in the u.s., including for better or worse the biggest shift in regime and fiscal and monetary policy, at least since paul wovolker they're trying to build out a separate market in the u.s

it didn't start with president trump the bifurcation of the u.s. economy at the same time i don't expect it to end with president biden >> you know, kevin, that's kind of a lot to dig through. part of it sounds like their motivation is they want to be diversified. they're worried about the type of spending that we've done here deficit spending part of it sounds like it's retaliation for some of the actions of the trump administration and you can watch it play out again with the nyse saying yesterday, never mind, we're not going to delist the three chinese telecon companies. today they're saying, wait a second, we may have to do that because treasury secretary mnuchin called them reportedly and kind of put the pressure to them how does this all play out how much of this is they just want to diversify like anyone would if you're looking at your portfolio and how much of this is a real kind of economic war >> so secretary kissinger is the

diplomat, not a has-been government bureaucrat like me, and i think he says we're in the foothills of a cold war. i'll say it a little less diplomatically it's true they want to diversify, but i think they recognize that the 21st century has two great economic powers and the relationship between china and the u.s. does not need to be zero sum but it doesn't have to be positive sum either and i think that what we should do is separate the tactics -- there's a little tit-for-tat going on across the last couple of months of the end of the trump administration beginning of the biden administration to be sure so that happens a couple levels down inside the bureaucracies in china there's also a grand strategy and the grand strategy for the chinese i think is to be both diversified but also to try to take allies and would-be allies of the united states and of the dollar and of the treasury market and try to win them over to their side so i don't think

we should be too naive about what's happening this is a rivalry that will define our economy, theirs, and frankly war and peace over the course of the next generation. so when i see things in the treasury market happening, which is really a new front in this great power rivalry, i think we have to take it very, very seriously. you noted this morning, becky, that treasury yields are now creeping above 1%. in any normal time with a kind of different fiscal or monetary policy with an economy in 2021 in the u.s. that could grow high single digits, 5, 6, 7% or more, boy, those treasury yields still look very low so the chinese pitch to the world's investors is do you really want a negative real return by investing in the u.s. assets or do you want a positive return and start to cozy up to china by investing in assets that are paying 200 basis points higher in china

for the world's asset managers it's an open mindedness to move capital into beijing in the last six months that i frankly found a bit surprising, even alarming and it's something that's quite alarming that we would in a couple of years ago never mind in the crisis of 2008 or nine, when that crisis happened, u.s. treasury yields fell dramatically when this pandemic struck treasury yields in march as you reported went up about 75 basis points that tells me there's a bit of vulnerability in our markets so policy makers need to think about that as a first order consequence of their policy, not something they can push aside. >> hey, kevin, i don't know if you can see yourself on tv, but right under you on the right-hand corner is a little bug that we call in the business we're showing bitcoin's price which had crossed 35,000 in large part i think based on what's happening in georgia and

the idea we're going to print a lot of money, stimulus measures and the like where do you land on bitcoin today? does all of this make sense to you? >> so the only thing i can see on my home zoom is my ugly mug looking back so i'm going to have to take your word for it, andrew, what you're seeing i just note something, every asset price that the u.s. government doesn't control, that the federal reserve doesn't control, like the commodities which becky referenced earlier, like bitcoin which is in some sense the anti-government price, like gold, the barborous relic the things the federal government purports to control and has controlled for the better part of the decade, those look repressed it's that distinction that the chinese are pitching to the world's investors, saying, look, something's happening and the

treasury market's not reacting that's part of my narrative. on bitcoin it does make some sense to me, andrew, in the following sense. the dollar is weakening, and after the elections overnight i'd look for the dollar to continue to weaken against a large basket of currencies and that's because of an incredibly aggressive federal reserve which rightly or wrongly i think will be more aggressive than the world's other central banks and new fiscal policy which we wount have countenanced where we have the idea as long as you can cover your interest expense, the u.s. government has nothing to worry about. to be candid, it's a bipartisan shift. i hear plenty of democrats and republicans saying the same tune, the fed can just monetize this debt and they can go away it's in that environment, andrew, that i think we see commodities move higher and bitcoin doing exactly what you describe.

>> concern, are you on board with bitcoin i know stand druken mi druckenmo board. you had a lesser view. i don't know if you have a different view today >> so stan calls me his partner. i call him my boss one of us is lying but i'll let you figure out who's who in that, andrew i would say i think that bitcoin does make sense as part of a portfolio in this environment where you have the most fundamental shift, for example, in monetary policy since paul volker this is a big shift we're seeing under the power fed rightly or wrongly, so i'm not surprised in a period of dollar weakness where bitcoin is doing what it's doing. i'd also suggest that part of the move in bitcoin is taking some of the bit away from gold if bitcoin never existed, gold would be rallying even more right now. if you're under 40, bitcoin is

your new gold. so i think of bitcoin as a lot of things, but it's certainly with every passing day getting new -- new life as an alternative currency when you see the strength of the euro, the strength of the pound, the strength of the r&b and the peso, i guess we shouldn't be surprised about the strength of bitcoin as well. >> kevin, just in terms of spending that we've done to this point, the spending you might anticipate if the democrats take control of the senate, look, we've watched the market kind of play out with some of these things today you look at the russell 2000, it's up by 3% or at least it was earlier this morning on the idea there will be more spending, more stimulus that's coming. the banks are responding well today because you have the ten-year back above 1% when is there a point where it's a concern to you when is there a point where, okay, this is spending that can be done in an emergency

situation? you've had jay powell say if we're going to overshoot, that's okay how do you come down on any and all of that? >> there's a lot there let me start on the fiscal side, becky, which is the biggest, most important stimulus, far more consequential than anything that congress has passed going back to the c.a.r.e.s. act is this vaccine which you and your team have been reporting on. that vaccine is 10 or $20 trillion stimulus in itself. nothing can get this economy back faster and more efficiently than a vaccine that's out there that makes the virus non-existent or at least something we can live with so that's the most powerful. and if what you're reporting is right, which is this vaccine is going to be in the broad u.s. population by end of the second quarter, beginning of the first quarter, i would say that the government distribution of stimulus isn't quite as effective as the power vaccine to take the animal spirits which

have been all but dead and have come back to life. that's where the energy of focus should be, thank goodness to the private sector with acceleration of that. that's incredibly powerful in the old days, becky, you would have a central bank look through tough periods and say, well, if a couple of quarters out this economy is going to be growing according to their measure 4 or 5%, according to my measure even more than that, thein sein tral banks would say well monetary policy acts with a long and variable lag. there's not a ton we can do for the next few months. that's not the muse sings i hear from the federal reserve and from congress. i guess as a final point, becky, i'd say this i think the level of debt to gdp in the u.s. should have us all concerned. broadly speaking, debt to gdp in the u.s. today is what it was in italy 12 or 14 mons ago. none of us thought italy was in

great fiscal shape there is a bill to pay there are no free lunches. i must soind like the oldest, has-been central banker to be on your air in a very long time when i hear the broad sloth say there is a new regime in fiscal policy and so long as you can cover interest payments there's no problem and when they say debt monetization is what we do, i would say this is an experiment we've never run before and i think it's go plenty of risk i'd put the emphasis on congress on we're a rich and powerful nation we care about the least well off among us and we want to help them in tough times but that does not involve this spending that we're on the verge of a vaccine that will take an economy that had been shut down and locked down and come to live with incredible animal spirits going forward. >> kevin, you can join the rest of us, the other three of us

have been old as well, waxing poetic about the good old days great to see you thank you for your time today. >> good to be with you all thank you. >> we'll talk to you soon. andrew >> okay. thanks, becky. coming up when we return, tech stocks are under a lot of pressure we'll hear from joe lonsedale. j&j upgraded from buy to neutral. they believe the entry into multi-year earnings site could see 80 to 100% eps growth. the price target is $165 a share. "squawk box" returns right after this

welcome back to "squawk box. i'm diana olick. the stunning surge of the home buying may be easing up. mortgage applications to purchase a home fell .8% in the

last two weeks according to the mortgage banker's association. more telling was that volume was just 3% higher than the same period a year ago. for the last several months that annual comparison has been more like in the 20 to 25% range higher it is likely that buyers are finally getting sticker shock. we saw that in the latest drop in pending home sales. all of this as the average rate dropped to 2.86%, right around a record low that's for loans with 20% down that rate was just under 4% a year ago don't worry about lenders, they're still getting serious refinance business those applications fell 6% in the last two weeks but were still 100% higher than the end of 2019. most experts had expected mortgage rates to stay low throughout this year the potential for a democratic sweep in the senate has bond yields moving higher and mortgage rates follow the yield on the ten-year treasury

becky. >> one of many stories we'll be following. thank you very much. great to see you. when we come back, tech investor joe lonsedale will join us to talk tech. sharts of moderna was cleared for use in europe. we'll be right back. save hundreds on your wireless bill

without even leaving your house. just keep your phone and switch to xfinity mobile. you can get it by ordering a free sim card online. once you activate, you'll only have to pay for the data you need starting at just $15 a month. there are no term contracts, no activation fees,

and no credit check on the first two lines. get a $50 prepaid card when you switch. nationwide 5g is now included. switch and save hundreds. xfinity mobile. welcome back to "squawk

box. tech stocks taking a stumble this morning investors eyeing the georgia election and the possibility of more tech regulation interest rates moving higher as the 10-year tops 1% for the first time in more than a year joining us to discuss this and so much more, investing, where he sees opportunity is co-founder of pallantir, joe lonsedale. >> good morning. >> wish is a big investment for you, but when you are looking at some of the big tech stocks that seem to be moving lower this morning, what do you ascribe it to >> well, this morning is probably time for the election last night people tend to like to buy the government a little better when one side is in charge especially when that side was pretty unhappy with the tech world. >> are you convinced that if it

really isn't a democratic blue wave, there's going to be a significant regulation coming? >> it's clearly not a full blue wave, right? 50 votes, tie break vote in the senate with a couple of moderate senators, one has to presume they can't do anything particularly crazy there's a populus movement on the right and left after the big tech companies as well as to print a lot of money and as well as to -- the vision right now in our country is there's the optimistic side of it and the cynical side of it the market kind of sums up bottom up these two visions. i think what we maybe saw in the last six months, people see there's an opposite side there's the possibility of roaring '20s but there's going to be in the meantime some regulation. >> which version of it do you see? is it going to be the roaring '20s how are you setting yourself up in terms of making investments, therefore? >> the big question at the end

of the day in markets and innovation is really total productivity how much productivity of growth are we going to have for the next 10 or 20 years and this filters into everything else it's been interesting. productivity growth has been really slow. a lot of us think that's because consumer tech stocks does not capture entertainment content, doesn't get caught in productivity they're the renaissance in blog. new types of logistics, health care, finance, energy. there's all of this cool stuff happening. we're starting to see an infrastructure with the boring company. they do get captured in productivity it's very clear as a lot of this is working as we see our society shifting if we don't break the markets, i'm very optimistic we'll get great returns in the next ten years. >> a lot of the tech stocks in the public markets have done quite well palantir you know so very well

as a co -- when you look at the valuation of the big faang stocks, pallintir do you see it higher >> everything i do is over a three to five-year period. if i could tell you what was going to happen over 12 months, i would be a lot richer. the thing the market notices about pallintir is it has great people rather than only selling full big solutions to come in and replace everything for a cio, we're able to break up their technology and sell it as enterprise software. you have the best information infrastructure in the world. you have big companies for the first time buying pieces as enterprise technology for a lot of money that's a really bullish sign. >> i won't ask about 12 months how about 3 to 5 years out for

wish that stock has had a bit of a more challenging ride since it's gone public. >> i'm extremely bullish on wish over that time period. wish was never really very well understood there's now 100 million people using it the big question is how are you getting something that's new and possible that was not possible before wish figured out very best way to mobilize commerce they're the third biggest ecommerce company. all sorts of cool things people are doing. people don't understand the mom and pop strategy they're empowering tens of thousands of mom and pops. they're clearly much, much better date at that team than everybody else how they deal with the merchants all over the world the market does not understand the wish platform at all that's one of the things that's mispriced in my view

>> fascinating joe, it's a longer conversation. we hope to talk to you again very, very soon. >> thanks, andrew. take care. >> over to the other joe. the other joe. coming up, the latest out of washington with a senator. democratic senator chris coons as we head to break, quick check onhe t future. the dow is up. the nasdaq is down we'll be right back. 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, and bring all their partners and customers together in one place. that's why businesses from retail to banking are going with a smarter hybrid cloud using the tools, platform and expertise of ibm.

good morning democrats projected to flip one senate seat in georgia with the other race too close to call this has huge implications for the markets. tech getting slammed this morning while small caps surge we're going to talk about why. we're minutes away from edp payroll data for december. economists expecting a dramatic slowdown in job creation the final hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick and andrew ross sorkin and, becky, i kind of stole your shot you haven't really noticed, i don't think. i've got your flag back there. >> i noticed. >> i noticed looks great. you're gone as soon as we're back you can have it temporarily. >> i don't think so. cat's away. >> that's what i'm told. no, no, that's what i'm told. >> i'm never moving back. >> max promised. >> possess it -- promised me, too. possession is nine tenths of the law. >> he promised me and said he would quit otherwise >> really? that would be -- we can do that. no futures this hour -- >> no. >> -- are up 44 points or so the 10-year yield -- you can see the nasdaq is down

10-year yield rising at this point above 1% it's been quite a while. if you snooze you lose, bek. you're welcome here any time i've been back here since april. >> i'm not coming to your germs. only if you wear a mask. >> cooties. congress holds a joint session. a group of republicans is planning to challenge some of the state's results setting the stage for a potentially chaotic day. eamon javers joins us with the latest eamon, we've never seen anything like this, at least not in our lifetimes. >> reporter: yeah, that's right, becky. this is going to be a fore ordained outcome the path could be a little bit rocky. the senate and house are going to convene in a joint session today. that happens around 1:00 the vice president, mike pence, is going to preside in his role as president of the senate the states are going to be counted in alphabetical order. they will be brought up to mike

pence to open and then the tellers who are appointed members of congress are going to read out the results and count the results. the joint session then dissolves if there are any objections and we do expect a number of objections here from republicans who are frustrated with the election results if that happens, what you get is the house and the senate then reverting to their chambers. they meet on their own to debate the objection up to two hours is what they'll have then they'll vote majority vote wins that's why this is not expected to succeed on the republican's part in order for an objection to succeed, you have to have both the house and senate vote to sustain the objection. the house is not going to do that it's controlled by nancy pelosi and her colleagues will not overturn joe biden's win we're not expecting any republican senators. a dozen of them expected to object to be successful. none theness, they can drag this

out for hours and hours. so it's not clear when this process will be finished up. we know it starts at 1 p.m we just don't know when it's going to finish. of course, you have the added complexity here of mike pence sitting in the chair presiding over all of this at a time when the president has been tweeting out that the president believes that pence has the authority to simply discard some of the electoral college votes based on allegations of fraud that's not true under the constitution or under the law, but the president has been badgering pence to do that that puts mike pence in an extraordinarily awkward position if he wants to have a political future after being defeated for the vice presidency, he is going to have to hold on to that trump base how do you do that when you're the guy who certifies trump's loss and attracts trump's ire for doing so even though pence doesn't have any constitutional

cards to play here it will be a fascinating and dramatic day here in washington, d.c., guys back over to you. >> we know the conclusion, eamon. more kabuki. thanks, eamon. for more on the electoral vote confirmation and a still developing vote count in the georgia senate runoff elections, let's welcome senator chris coons from delaware. supposed to be a new year. does it feel like a new year seems like more of 2020, doesn't it wildness wildness, chaos everywhere so i think about how to approach you. you can talk about this, what's going to happen today with the electoral drama if you want. i want to talk about georgia to start with and what this means i'm not going to say that you're exactly like a dog chasing the bus, the democrats let's say you are like a dog chasing a bus. what if you do catch the bus what are you going to do with

the bus? tell me the top three things that you're going to do if you get the senate >> winning either or both of the senate seats in georgia doesn't change joe biden's agenda and my priorities for the coming senate that's to respond to the pandemic that is now raging out of control we are at the worst point in the history of this pandemic in the united states and that's got to be job one for president-elect biden and his incoming team. dealing with economic recovery from the challenges of this past year comes right alongside that and then addressing some of the bigger structural challenges we face around racial inequality, climate change, those are also going to be on the agenda for this year. but right in front of us is getting pandemic relief and getting pandemic response done that's going to take bipartisanship that's going to take a seasoned and capable cap net and i think, frankly, if both of these two seats go to the democrats in georgia, that will make a

transition towards delivering on those bold and important objectives easier for the incoming administration. >> we all want the pandemic obviously to be history soon and the vaccine hopefully will get us there if it's deployed. i think in the back of your mind you knew what i was asking you, didn't you >> yes. >> catching the bus. you really didn't answer me. so, okay i'll spell it out for you. how about ending the filibuster? are you going to do that how about packing the court? going to do that puerto rico becoming a state, are you going to do that how about taxes? are you going to rescind the trump tax cuts are you going to do that how about those four things, are you going to do that >> i'm a close friend and supporter of president-elect biden and he ran on an agenda that included bringing it up sustain ab

sustainable that makes it very hard to do i think the message that was just sent to the people of georgia. and to the senate and the people of the united states by these elections last night was folks wanted to stop the division, chasing trump's conspiracy theories, trying to overturn the election and work together and deliver real relief. the house passed a big and bold pandemic response package nine months ago and it didn't see the light of day in the senate for eight months i think there was a lot of frustration over the fact that right at the end of the year we finally passed a bipartisan bill in the senate to deliver small business relief, to deliver an extension of unemployment, to deliver support for schools and hospitals and then at the last moment president trump inexmilk bring threatened to veto the bill that last minute instability, unpredictability, that's what

joe biden is going to lead us past he hasn't spent the last two months focusing on relitigating the election joe biden has focused on moving us forward and that means working across the aisle >> trump will be gone soon i think a lot of people on the left are going to miss trump he'll be gone soon, anyway, we won't need to relit i fwat aigaf those things what about taxes what do you expect to happen this year with taxes if you do have vice president-elect kamala harris there to swing things your way >> joe, i do expect that one of the early items we'll take up will be in the budget committee trying to pass a budget. if we succeed in passing a budget then move towards reconciliation that is an obscure procedure that made possible passing the republican led tax bill we may well through reconciliation pass a big infrastructure package and a

revenue raising package that will fund some of the investments in american manufacturing and in restoring our infrastructure that is likely to be on the agenda this coming year. >> we're going to do 2,000 to every individually, quickly, senator? >> well, whether we can do it quickly or not depends on whether we can get republican support. there were republicans lining up to support it when president trump supported it very late last year. i expect that will also be early on the agenda for this congress. >> do you know, senator perdue, and i think you have a good relationship what do you expect to happen what are you hearing from your sources in the senate about how close it is and whether it's a lead that would be possible to chip away at or the counties that are left could bring him

down would he go a month and ask for a recount? what do you want -- think he will do? >> i expect that both reverend warnock and jon ossoff will win by greater the margin that triggers an automatic recount. i wouldn't be surprised if senator perdue requests a recount. i'll remind you after the november elections there were two recounts and then a hand recount, three recounts, a long and complex and expensive process. ultimately the republican governor of georgia certified the results from the november 3rd election that joe biden won. i, frankly, expect that senator perdue will call for a recount my hope is that there will only be one, if any, and that it will certify that both democrats are elected to the senate.

>> senator, thank you. you're an eagles fan, right? down there -- >> yes, i am. >> did you like what happened? do you think that -- >> that was a very tough -- >> have you heard from schumer have you heard from anyone >> yes, he's a big giants fan. >> you think that's okay you thought that was okay. >> no. >> i'm going to have cramer on and ask him. we've got to go. senator, thank you i appreciate you coming on i do breaking december jobs numbers from adp don't go anywhere. we'll be right back. save hundreds on your wireless bill

without even leaving your house. just keep your phone and switch to xfinity mobile. you can get it by ordering a free sim card online. once you activate, you'll only have to pay for the data you need starting at just $15 a month. there are no term contracts, no activation fees, and no credit check on the first two lines. get a $50 prepaid card when you switch. nationwide 5g is now included. switch and save hundreds. xfinity mobile.

time for the adp let's get over to steve liesman. he has the number. steve. >> reporter: becky, down 123,000. private sector employment and nationally fell by 123,000 revising up the november number by 3,000 -- down 3,000 from 304,000. taking a look at the breakdown here goods sector down 18,000 big decline in the service sector down 105,000. we'll show you more detail nonpha nonfarm payroll down we'll see if that gets revised

interesting developments here. small business down by 13,000. medium size business gaining up 37,000 and the big decline happening in large businesses and i'm wondering where that came from. we did have a bunch of mass layoffs in the fall and i didn't see that necessarily adp picked that up. this may be some catchup with what happened there. it could be a new wave of layoffs at large companies greater than 500 employees if we had it by industry, professional business services and education services, they both did well up 12,000, 8,000 respectively the manufacturing fell that's curious to me because the ism manufacturing was up and higher above 50. trade transport utilities down 50,000 leisure/hospitality the big decliner down 58,000 that could come from renewed lockdowns across the country as well as unwillingness of

consumers to go to some of these places becky, we had talked about this almost beginning with the weaker november jobs report and then as the high frequency data came in we saw more and more economists and forecasters pointing towards a possibility of a negative number for friday. that is not the consensus but there are a handful of negative forecasts out there when it comes to the friday jobs report. >> steve, the leisure on hospitality number is particularly concerning one. you're right to kind of wonder is this because of the renewed lockdowns or is this because businesses that have maybe been holding out for a long time finally said, okay, we can't continue to wait, keep these people employed while we wait for people to start traveling again. we did see travel pick up over the holidays you saw i think for several days in a row more than a million people going through tsa that was the first time that happened for a very long time. then you think about companies like disney where the situation in california made them say they were going to go ahead and layoff a lot of people who had

been working in the parks up to that point i guess that's the question you wonder because you figure they had already seen such severe drops in these industries. how much is left to cut? >> yeah. it is worth pointing out, becky, they had come back pretty strongly i don't have the figures in front of me, but you had a pretty large -- when we had some of those big gains in employment, some of that was the leisure/hospitality sector coming back. it is worth asking, when people traveled i think they traveled very differently i think there were probably fewer stays at hotels, fewer uses of the amenities that a town might have going to theme parks and that sort of thing i think people may be traveling and to the extent that they did travel over the holidays went right to the family's house or something like that where they were staying rather than using all of those sectors i think what happened is you had a big bounce back. you might have had some bounce back, becky, in anticipation i was wondering if the

announcement of the vaccine had the potential to pull forward some employment. in other words, people are saying, hang on. everything is going to get back to normal pretty fast so i might as well hire some people now then either the business department show up or the employers got cold feet about that employment. so that could be something i'm surprised we haven't seen more of that that gets to a broader question that we're looking into, becky, which is the extent to which the expectation out there which we talked about on monday, which was these big gdp growth numbers expected in the second and third quarter, how much they're contingent upon the ability to distribute the vaccine and get down the infection rate and form some sort of herd immunity to get the economy back so we're on track. >> steve, thank you. we'll talk more to you about all of this obviously. big jobs number coming up on friday, too. >> yeah. >> okay. >> thanks. andrew and we got a little news of

our own right here breaking news. want to wish joe kernen a very happy birthday this morning. joe, you know, we have -- i've got a little present as the show has been going on it's not even a present, it's something apparently i think i owe you. we made a couple of bets throughout the year, usually over tacos so i thought i'd make good on the tacos. matt has the tacos i ordered it through postmates just acquired by uber. >> taco bell >> i couldn't get taco bell because they're not open >> doesn't matter. >> thank you, andrew thank you. >> so i had to do nachos nachos and guac and burritos in there. the good folks at jose's burritos on first avenue that's where we had to get it. nobody else is open at this hour i wanted to wish you a very happy birthday turning 35 is a big milestone for you. >> it is the new 35. you know what i was going to

do -- >> you're doing great. >> given the news backdrop, i was going to kid around a little bit with you and say, you know, andrew, i don't really think i asked for my birthday for chuck schumer as majority leader i don't remember actually saying that to you, but it really -- you shouldn't have really you shouldn't have >> this is your birthday there's going to be no gloating on your birthday. >> god works in some funny ways. happy birthday, joe. thank you. thank you, god >> enjoy the burritos. enjoy the burritos >> i had that all worked out for you. really, you shouldn't have you really shouldn't have, andrew anyway, thank you, andrew. that's fun you know what -- >> happy birthday, joe i didn't get you anything but i did wish you happy birthday. >> you give me things every day, working with both of you you know what, counting a lot of blessings today. you see real priorities.

>> as we all are. >> very, very happy with everything thank you, guys. thank you, matt. >> thank you >> happy birthday to you we have a lot more coming up from this morning. president trump making a move in his final days in office against chinese tech we're going to talk about that plus we're going to take you live to beijing for the very latest on hong kong's crackdown on dozens of democracy activists. as we head to break, check out shares of tesla. adam jones now the street's biggest bull with an $810 share price up from $540 fossil fuel, wti crude oil hitting the $50 level though it is slipping below that surprise pledge by saudi arabia. stay tuned you're watching "squawk" on cnbc mirror? mirror? [ding] power e*trade gives you an award-winning mobile app

with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most and $0 commissions for online u.s. listed stocks. don't get mad. get e*trade and start trading today.

welcome back to "squawk box. the futures right now up 53 points on the dow. the nasdaq, which every time we mention it we used to say tech heavy. it is. you can see it's actually down on some concerns that big tech could come under assault let's put it in perspective. 150 points 200 points on the nasdaq that's moved so far in the last ten months since the lows. probably -- the jury is still

out on exactly what we should expect the russell 2000 actually is now indicated up 2.2% and then take a look at bitcoin which crosses on $35,000 for the first time and, you know, we're talking a lot about it yeah, it's gone through, you know, 31, 32,000 over the past week or so but somehow went from 5,000 to 30,000 prior to any of this happening so i don't know what you necessarily attribute it to. joe, thanks. there are a lot of headlines out of china today as well president trump signing an executive order banning transactions with eight chinese apps including ant group's ali pay. the order says the u.s. is taking action against developer to safeguard american citizens' private data and to protect national security. china will protect the rights of its companies. it's getting it from the chinese government and the u.s. government, alibaba.

they want jack ma's ant group to share consumer credit information with them. they're concerned ant has an unfair advantage over small and even big banks. the new york stock exchange may execute its second u-turn this week and delist several chinese companies thought by u.s. officials to have connections to the chinese military the new thinking comes after according to multiple sources, multiple reports that what's been going on here is that treasury secretary steven mnuchin called stacy cunningham and told him he disagreed with the exchange's decision not to delist the firms that itself was a reversal from an earlier decision. the nyse said it would not delist them. they were up by double digit percentages on this news in shanghai we'll see what's happening finally, we are seeing a major crackdown on democracy activists in hong kong for all of the details on that

story, let's get over to eunice yoon standing by in beijing. eunice >> reporter: thanks so much, becky. the police cast a wide net in the raids rounding up outspoken beijing backers to moderates and that suggests that the tolerance level of any criticism of the government is very, very low 1,000 police took part in the raids and they were targeting the opposition lawmakers and other activists who had organized an informal primary last year. ultimately that was meant to help pro democracy lawmakers gain more influence in their legislature which is normally stacked with beijing loyalists security officials today had said the opposition's move could be considered, quote, subversive and an attempt to overthrow the government in a new security law. american lawyer was among those arrested and that raised concerns about the safety forex patriots and blink ken, the

nominee by president-elect joe biden for secretary of state weighed in tweeting that the crackdown is, quote, an assault on those bravely advocating for universal rights beijing reacted saying that hong kong people's rights are not being affected what i think is affected is the widen range of the crackdown because it really conflicts with the original message from beijing that the national security law is meant be to close loopholes for their security defenses in the city as opposed to silencing the entire city >> eunice, what comes next i mean, we've been watching this and it feels almost like a replay of the story we've done hatch a dozen times, probably more over the course of this year keep saying, okay, we're waiting. we're watching what should we be waiting and watching for at this point >> reporter: well, i think if you talk to activists or people within the international

business community, they're expecting beijing to continuously tighten the -- one activist i was talking to said the veneer that hong kong has any real freedoms away from beijing has been completely ripped off with this crackdown because it was just seen as so massive and also, like i said, rounding up several different voices who are -- of people who are critical of beijing. so i think that's going to happen, but, you know, beijing continues to march forward with its economic perks for the city. i think economically at this point beijing wants to make sure that hong kong is not seen as a loser in all of this and so, you know, there's still probably going to be a lot of money pumped into the city from beijing and a lot of policies to try to make it successful. >> yeah. freedom on one hand and then on

the other side the financial side of things, too. eunice, thank you very much. >> yeah. when we come back we are joined by former fda commissioner dr. scott gottleib. he's going to talk about kicking america's covid vaccine program into high gear this is as several alternate strains of the virus are here. you're watching "squawk box" and this is cnbc alm plus saffron, to naturally boost your mood. stress comfort from nature's bounty.

welcome to "squawk box" right here take a look at the futures this morning after some big news out of georgia we will talk about what that big news means right now looks like the dow would open up 44 points higher the nasdaq down and down big tech stocks tumbling we'll finish those in a second s&p 500 off about 9 right now. let's show you some of those tech stocks. you're looking at the likes of facebook, looking at the likes of apple, alphabet all down. not as much as they were before. facebook off the most at about 2.5% meanwhile, we should tell you the bank stocks are rising show you some of those

jpm, bank of america, citigroup all up 2%. up over 3% tesla up -- some of the big environmental plays also up. meantime, bitcoin up this morning as maybe there's a sense there's going to be some more money printing joe. >> here are some of the other stories investors already talking about. two takeover deals in the health care industry both involving dow components walgreens selling alliance health care the european unit. amerisourcebergen. they will pay in cash and stock. unitedhealth is buying change healthcare it will pay 25.75 a share in cash for 7.8 billion it will combine change healthcare with the optum software and services. nbc universal parent comcast has

announced executive changes at its sky group unit current ceo jeremy derek will become executive chairman and dana strong will become the new ceo. she was most recent ly with the services frustration growing with the sluggish pace of america's coronavirus vaccine rollout. dr. anthony fauci says some of the glitches have been ironed out. this comes as the highly contagious u.k. covid strain pops up around the country now we're getting a warning on a south african strain as well joining us right now is former fda commissioner dr. scott gottleib he currently serves on the boards of illumina and pfizer and he's a cnbc contributor. dr. gottleib, let's start with the other variants that we know are circulating in the united states we've been hearing reports in four or five different states with a u.k. variant popping up is probably much broader than that

now this new south african variant. the good news is we believe the vaccinations will be effective on these variants too. i did hear this morning that there is some concern that remdesiv remdesivir's product might not be as effective with the u.k. strain what do you know about that? >> one of the concerns about -- the south african strain is the more concerning one. the u.k. strain is more concerning in that it appears to be more contagious and more prevalent in the united states than we first suspected. the south african strain must be here as well the issue with the south african strain is it mutated the receptive binding and that's where the drug binds to. it's part of the areas where the ain't at th antigen tests might bind to. there was a study out yesterday showing that it escaped

convalescent plasma, meaning that people who were infected with coronavirus if you took their plasma and experimented with it against this strain, this strain seemed to escape plasma or the plasma had reduced effectiveness against it that's a suggestion that even prior exposure, prior immunity may not be totally protective against this strain. now the vaccines won't be fully defeated it's going to be hard to envision a single mutation that would fully defeat the vaccines because we used the complete spike protein in those vaccines. you're getting what's called a poly clonal effect which means if it changes one region of the surface, the vaccines are inducing antibodies. so it's possible that you could see reduced effectiveness against the vaccines but you probably wouldn't see the vaccines get defeated the way we see vaccines get defeated in the case of flu in the span of one season. >> the vaccines that you're talking about that use the complete spike protein, i know that's moderna and pfizer.

what about the other vaccines that aren't mrna, that aren't rna induced? >> it's all of them. they all use the spike protein there was some early oaks perfect iment tags with using just the receptive binding domain and that's the region that's mutated in the south african variant. there was a decision not to do that seems to be a good decision in retrospect one of the concerning things is the south african variant seems to be prevalent in south africa and brazil they're having raging epidemics. both also in their summer times when they shouldn't have had high prevalence. there is some concern that one of the things driving the infections in those countries is this new variant perhaps reinfecting people or infecting people more easily i think this changes the game with respect to our vaccination strategy two months ago we had a very methodical plan to roll it out to specific groups in a is he againstal fashion. i think we should pursue trying to reach them but speed matters

now. this is a game changer speed matters. we need to get this vaccine into arms of people it's a race against time to get protective immune night at this into the population before they get a foothold in the united states two ways to get protective immunity, the hard way and painful way is to infect people. we don't want to do that the more elegant way is to vaccinate people that's what we should be trying to do. >> if the game has changed and speed is more important, how do we need to change our delivery systems for this how do we need to react? >> well, we need to be pushing out the vaccine. i think we need to have an all of the above approach when it comes to making the vaccine available. i've been advocating pushing it out to the retail pharmacy channel. we can have the health department deal with the high impact group the demand is among senior citizens they'll line up to get the vaccine. we ought to give it to them. make it available to people over the age of 65.

>> hey, scott, one of the things we've talked about for a long time is that we don't know in terms of this vaccine, we know it's effective in preventing the person who gets the shot from coming down with covid we don't know how effective it is in terms of meaning that that person can no longer transmit covid to somebody else and this becomes a question that's a much more practical issue at this point. if you have grandparents starting to get vaccinated, can they come visit everybody else at that point or are they putting those people at risk if they do? >> this is a critical question the vaccine demonstrated that it's protected and prevented people from getting the signs and symptom of covid disease but it doesn't protect against transmission the believe is that it does. the magnitude of that is unclear. we'll have more experimental evidence soon. it will take time to fully answer that question because we're going to be dependent on real world evidence. the conventional evidence when you talk to people close to this

is the vaccine is probably preventing some people from getting infected and reducing the likelihood of people transmitting it. what we don't know is the magnitude of that effect in terms of older individuals, i don't think once you get vaccinated it's back to 2018 i don't think you can go back to previous behaviors we still need to be careful, but i think it is going to protect people who are at high risk of having a bad outcome from having that bad outcome so hopefully they can regain more freedoms, especially once prevalence declines right now everyone needs to be careful. hopefully once we get into the spring and summer these strains don't become prevalent, we get through this and we have a relatively quiet spring and summer with this virus >> if you're vaccinated, why can't you go back to 2018, 2019 behavior >> look, i think for two reasons. one, i think if you're high risk you still need to be somewhat careful. i think hand washing, people probably are stillgoing to wea masks in public spaces when they

travel. >> i'm all in favor of hand washing. don't get me wrong >> but it's only fair -- >> couldn't you go back to your life and travel and go see people >> i think -- i think people will look, hopefully these new variants don't become prevalent here we do get through this wave of infection. there's some indication it's already peaking. hopefully it will pak and decline and get people vaccinated the spring will be relatively quiet. the summer will be very quiet. people will be very quiet. that's the hopeful scenario. i think what puts a wrinkle in that is this new variant it will take time for the variant to get a foothold. it became months to become the most prevalent strain in the u.k. hopefully the combination of the vaccine and 30% of the american public have been infected by the end of this month and the fact that we'll hopefully be ending spring and see prevalence

decline because of that, we'll catch a break because of the calendar the one thing we can control in that scenario, we can control our behavior, wearing masks, things like that, but we can also control the vaccine it can be used as a backstop against it. >> scott, the idea that now we're trying to talk about catch a break this summer and you're talking about another wave potentially next fall, i think most people, the conventional wisdom especially in the business community and even more broad, you get to the summer, hopefully with a vaccination and 24 is i don't want to say gone from our lives but for those who are vaccinated the view was that it would be gone, it would be something you wouldn't worry about. you would get on the plane and sure people would wash their hands but the idea of not necessarily going into indoor restaurants or going to see your friends indoors, is that off the table? i'm just trying to understand once you get the vaccine is the view that you are still going to

be contagious to some degree and therefore you can give it to somebody else? what are we talking about here >> well, look, i've said that i think next fall and winter will look like -- if we do things right will look like a very bad flu season we'll still see people get sick and people will die of covid next winter but it won't be epidemic there will be outbreaks. people vaccinated will have substantially less risk of getting a bad outcome. life will be getting back to normal but it won't be life like 2018 we'll need to be more careful about respiratory pathogens, especially in the fall and winter i think you'll see things different. people won't jam thousands of people into a room again i don't think we're going to be putting people in a conference room that holds 10 we'll be mindful of those public exposures going forward. that doesn't mean we can't get back to doing a lot of things we want to do it won't seem some semblance of normalcy, but it will be different for a period of time

getting to there -- >> what about concerts scott, what about concerts what about people getting -- will people get on airplanes -- would you have to wear a mask, do you think, on airplanes going forward even if everybody on the plane were vaccinated? >> look, it's hard to predict on what it's going to look like it's dependent on making sure we get the vaccine rolled out demand beyond 90 million americans isn't that great and we'll struggle to vaccinate people above 100 million americans. only 90 million americans get the flu vaccine. it will be harder to get it across the public venue of a fever. we'll see people cued up differently. we're not going to cram people in to small spaces as they line up i just think things are going to be different just like they're different when you go through an airport after 9/11, i think things will be different in terms of how people move around. i don't think the masks will be

mandatory but i do think a lot of people will want to wear masks and that's okay. i think things are going to be a little different it's not going to be like it was in 2017 to 2018 where we didn't worry at all about catching a respiratory pathogen we're going to worry about it, even if we're vaccinated i think we'll worry less than we are worrying about it now, hopefully. >> dr. gottleib, thank you very much we'll talk soon. >> thanks a lot. >> wow i must say that was an eye opener for me. we can talk more about that later. jim cramer coming up in a minute his first take on what could be a wild day for the markets. first, some other headlines. betting companies including draft kings, penn gaming, flutter enter tapement are getting a boost on the fact that governor cuomo will back betting in his address tonight that means joe won't have to cross the bridge to bet. back in just a moment.

mom! at&t has the deal for new and existing customers! i will. so what'd she say? wrong person. guy named carl. but he's very excited and on his way. word-of-mouth advertising. it's what they did before commercials. it's not complicated. everyone gets our best deal, like the amazing iphone 12 mini on us. betting companies including

they were able to give me a personal loan so i could pay off all of my credit cards. i got my mortgage through sofi and the whole process was so easy. ♪ express yourself ♪ ♪ express yourself ♪

let's get over to jim cramer jim, i actually before andrew went to break with the cuomo news, i was going to ask you about that i was going to look at draft kings and pen gaming but he finally -- the governor finally is supposedly going to talk next week that one of the ways to plug the budget hole is finally going to go in on maybe some online gaming

so i won't -- we won't have to go across the bridge to put in a small bet occasionally when i'm here it goes around and around and around and says no, you can't do that, right there is some -- >> isn't it crazy? you're so right. you go -- i have a relationship with draft kings, i do a program with them. >> i know. >> i've got to tell you, when you're in new york, all right, you start thinking, do i really have to go over the gw to make a bet? you and i both like $5 things. they're just fun some people -- we're not talking about the real gambling. we're talking about fun. like the battery and the fact that that is illegal in new york is kind of ridiculous why they just decided, we're going to have new jersey have all the revenue, we like governor phil. so this was a natural. and the biggest winners are the ones -- i think draft kings and penn nat, penn nat being the barstool book, and draft kings being the juggernaut on the

weekends, it made no sense i think the stocks have a lot of upside every state is going to fall in line it is too easy you can't let a couple of states have all the money >> yeah. all right, jim, thank you. we don't have much time. got to thank -- >> no, no, no! happy birthday happy birthday >> we share that together, don't we we go through these periods together you go 11 months earlier than me and i catch up with you seems like every year. >> well, yeah, right now you're there. but you'll be older again february 10th, i think, right? >> true. exactly right. exactly. >> thank you we'll see you in a couple of minutes with what to watch when the opening bell rings just over half an hour wish you were here did you hear what i have here now? bacon omelets, bloody mary on a day like this, i'm having a little i am i'm sorry. anyway, lots on the docket i think -- did you drink all

yours? i want yours too the electoral vote count in congress, ballot counting in georgia, stay tuned. you're watching "squawk box" on cnbc competition beat us, again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. got to do something. workday!

i think i got something. work... hey, rob, you're on mute. hello. [all] hey... there he is. workday, the finance, hr, and planning system for a changing world. ♪ch-ch-changes

welcome back to "squawk

box. all morning we have been showing you the divergence in the futures, but the nasdaq taking it on the chin after democrats swept one georgia senate seat so far with the other still too close to call. joining us to talk about what we're seeing in the markets is david rainy, portfolio manager at the hennessey focus fund. good morning we're looking at the dow up 33 points the nasdaq and big tech companies falling this morning, nasdaq off 192 points now. what do you make of what is happening here and what are you doing about it >> well, clearly what is going on is the market is concerned about two democratic wind iic n yorn georgia. one is confirmed i think with two wins you'll see increased volatility in the market and several sectors come under very heavy legislative and regulatory scrutiny. if things were to hold and just one victory, i think that would

be a calming effect on the market, particularly the vaccine rollout under way gdp this year surging and on the horizon >> so when you see tech stocks down as much as they are today, do you look at this and say buying opportunity, they're going lower, do you say we're in the beginning of a correction? i'll note, in the last minute and a half, the dow was positive has turned negative. >> we don't own a lot of tech stocks in the hennessey focus fund i would suggest that it is one of the industries, particularly social media, that would be in the cross hairs of a democrat-dominated congress and white house. so, no, you'll probably see more volatility in that sector for the next several months, as committee chairman getting into place and legislation begins to make the rounds. >> in terms of where you see

opportunity, where do you want to be and where don't you want to be? >> well, this is the kind of market where you need to pick your spots carefully because a lot can happen over the next two years before the next election legislatively. from our stand point, energy, traditional energy is going to be in the cross hairs. as well as healthcare. and if you add another sector or two in there, you're already at 25% of the economy so we think it is just very careful to -- you need to be very careful, you need to pick your spots, and you need to be in more businesses that are out of the regulatory tumult >> so give me some ideas, if you could. >> sure. you know, we're very interested in the reawakening of leisure travel we continue to have important investments in specialty finance companies, which we think are

way out of favor and are poised to do very well as the yield curve steepens, as bank health improve improves and several other sectors that are currently in development like specialized software and infrastructure >> right and, david, real quick, do you expect taxes to go up? individual taxes to go up the next year? >> yes i don't think the democrats will dither away a year, the way the republicans did four years ago, and wait to raise taxes and debate the finer points of tax increases. i think you'll see one, if not two rounds of tax increases over the coming year. >> okay. interesting. we had different guests with different views on that very -- we appreciate it great to see you this morning. a quick final check on the markets, as we wish joe kernen a happy birthday, again, this morning. dow looks like it would open

down about five points, with points it is moving around. i'm curious, actually, something happened in the last minute while we were just having that conversation, guys >> yeah. not a huge -- not huge moves cramer is next february 10th as we talked about. everyone was nice on twitter want to thank you, guys, too >> happy birthday. >> thanks. marilyn, thank you join us tomorrow good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber futures are red as democrats take at least one georgia senate seat we'll see about the other. big implications for stimulus and rates. ten-year yield above 1 adp with the first decline since april. road map begins with georgia