below 30,000 still pretty high, isn't it. it's friday, january 22nd, 2021, "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc happy friday, i'm becky quick along with joe kernen and andrew ross sorkin, and we're watching u.s. equity futures, a little bit of a different picture this morning. you are going to see some pressure at this point dow futures indicated down by about 233 points the nasdaq is off by about 75 and the s&p down by 26 we haven't seen red arrows in a while at this hour yesterday, you did see both the s&p 500 and the nasdaq set new highs once again with new records. the dow was down, but just barely it was only down by about 12 points again, there is considerably

more damage this morning we'll continue to talk a little bit about that, including ibm numbers. before we do, take a quick look at what's happening in the treasury market. we have been watching the movement here pretty closely the last several weeks the ten-year note is yielding 1.096% the yield is slightly lower, below 1.1%, which is the high water mark we have seen recently andrew, obviously some corporate news that's in the headlines right now, though. >> you just mentioned the top one, becky, ibm shares, and they are slumping this morning. let's show you what is happening to those shares. the company's 4th quarter sales, missing analyst estimates. the stock off a little over 7%, the 4th consecutive quarter of declines didn't issue formal guidance, but expects revenue growth in 2021, but all of this, you know, raising questions, of course, about the future of ibm, and the trajectory they have been on

they have been trying very much so to make the pivot towards the cloud. the former ceo used to come on our show, and talk about empty calories don't worry about it, those are empty calories, we're trying to get rid of those empty calories. now that the company has made meaningful progress trying to get rid of empty calories, the question is whether the numbers we're seeing today reflect the idea of calories that are real calories lost. we will see. >> we heard the same thing -- >> not thrilled about the situation. >> remember ge, no, no, the revenue is supposed to go down we're shrinking ge capital, the business is too volatile, so as we're shrinking, it's all good unfortunately the stock price was shrinking faster than the revenue price. ibm, you wonder, they briefly broke that string of revenue declines i guess now it was a year ago

because now four straight quarters. >> it was fourth quarter. >> briefly broke that, and that was the outlier. the revenue decline itself is not the outlier. when they stem that briefly, that's the out liar. this is sad just in terms of, i don't know if you have any nostalgia for big tech, and you know, companies, 117 billion now. think how many ipos in the last year that companies that, you know, you only heard of them the first time in the last six months. >> versus over a trillion for microsoft. >> yeah. >> i think we're going to talk intel also it's funny we put these. dow components go in just to come out eventually, i think. >> they come in together, and we'll see if they go out together meantime, take a look at this. shares of intel. there's some news as well. they plan to make the bulk of their new chips, they're saying, in house they're going to begin out

sourcing more production here's incoming ceo on the call, pat gelsinger. >> i'm pleased with the progress made on the health and recovery of the 7 nanometer program, and the majority of our 2023 products will be manufactured internally at the same time, given the breadth of portfolio, it's likely we will expand our use of certain foundries for certain technologies and products. >> the move to outsource is effectively an acknowledgment, a bit of a white flag that intel has fallen behind its rivals, posted record annual sales of nearly $78 billion fueled by pandemic demand for pcs. much of that demand came from lower cost laptops that aren't as profitable. it rushed out results ahead of yesterday's close because potentially unauthorized access to some of its earnings related information. the company beat expectations on the top and bottom line. you think it's good, and raised

its dividend we're going to talk a lot more about ibm and intel later this hour interestingly as we have talked about companies like apple no longer using those intel chips, and i have an apple laptop right here this has an intel chip in it, but the new ones don't this new m 1 chip that apple has from the mac book pro is amazing. blows the intel chip out of the water. and, you know, you say to yourself, look, intel has been in the business for a long time, they should be able to build faster chips, for all sorts of reasons haven't been able to make it work. >> yep chips, i thought, you know, software, i understand remember computer aided design remember all of those companies? digital equipment. i'm used to watching all of that happen, and novel, and all of these companies get displaced by, you know, the silicon valley you saw it, you know, the social network, these young bucks come out there, and kids come out, they're so smart

the fat and happy older companies just get displayed aual the time i wasn't sure what happened with intel. it has, with chip makers. >> we'll see >> the landscape is littered with huge names, and ibm, just the latest, but intel. >> you know, just historical note, joe and becky. it's so interesting, you know, we talk about big tech, and whether big tech should get broken up, whether they can ever get taken over, and you look at big companies like acresibm and intel, we're at the top of the list not just in terms of size but in terms of what their market cap was compared to everything else, and you look 20, 30 years later, and invariably, this is the argument against regulation, right, that people do -- even businesses that seem to have a defensive mote, there's innovation. >> right they deregulate. >> it's not just tech.

doug mcmillan, the ceo of walmart carries around on his phone a list of the top ten retailers over the decades, and it's a reminder to him that there is constant change and it is really hard to stay at the top. you think about sears, jcpenney, this is every industry if you are not constantly innovating and trying to get to the top again, there's somebody else who's going to come along and take the mantle from you. >> jeff bezos can see his own future, and he said it, it's eventually going to zero keep working hard. i think that's firing people up. anyway, they want us to move on right now. let's get to the news out of washington that broke in the last hour. the biden administration announcing two new executive orders, focused on the economy eamon javers joins us now with the details. purely coincidence, the dow today, it's intel, and ibm, eamon, anyway, what's up >> well, we're going to see these two new executive orders from the president today signed at about 2:45 in the state

dining room. what the biden team is saying here is that they need to take this emergency action right away, just to focus on feeding children and adults in this time of pandemic when so many people are experiencing food insecurity take a look at the details here as i walk you through. the first one, this is a covid relief executive order designed to feed people they're going to ask the usda to boost the pandemic electronic transfer amounts, which now is a current amount of $5.70 per child per school day the biden team doesn't think that's enough money to get each kid a nutritious meal each day, and allow to ask states to increase s.n.a.p. emergency allotments, the supplemental nutrition assistance program to feed people. they are asking treasury to expand and improve the delivery of the stimulus checks to those who didn't get them. they say there's about 8 million households who didn't get

stimulus checks last year when they were sent out to everybody. that's because they fell through the cracks in a variety of ways. they want to fill some of those cracks, and make sure those people get the assistance they need, and they want to allow workers to refuse unsafe work and still receive unemployment, so the idea being in the pandemic era, if your boss is asking you to do something that's going to get you covid, you can quit the job and be eligible for unemployment insurance. that's something to watch, and the second executive order is more focused on the federal work force, and this feels a lot more like the kinds of things the biden administration would be doing anyway they're talking about restoring collective bargaining, and revoking a number of trump era executive orders affecting the federal work force they're also promoting a $15um workers and for federal contractors. that can't start right away. there's a long bureaucratic process to that, but they're kicking the ball off and trying to push in that direction. so an important element for the biden team of getting that $15

an hour minimum wage across the board nationally brian deese is going to be in the briefing room at 12:45 today. watch for that he'll explain these executive orders and also what's going on with that $1.9 trillion package which the biden team says is so important to the u.s. economy and to the rescue of the u.s. economy. of course there's some republicans up on capitol hill who are skeptical of that, so the negotiations are in full swing right now, guys. back over to you. >> those were the days, eamon, we used to talk about collective bargaining for public employees, et cetera, and we used to make the point that, you know, they unionize, they get a bunch of money. i remember they used to, you know, they support certain candidates and we always mentioned governor corzine in new jersey, they contributed a lot of money, the unions did, and a huge union package came out, and they was, you know, bragging to a crowd of union people that we won, and it's like, wait a minute, you're the governor of the state that has its finances, you know, you're

trying to do as well as you can in terms of running an efficient state, so you get lobbied for these big increases by the same people that are getting them, and then you're calling it a great victory that we had. i don't know collective bargaining. but the other one, the $15.01. >> it's unclear who would lobby for them other than the people who would get them, right. >> that's true i think for the markets, i don't think keystone was taken very positively by a lot of people. the obama administration five times looked at the environmental impact of what's going to happen with keystone, and those are going to be high paying jobs. so you got there, you got this we'll see whether there's any inflection point that we reach when a lot of what we knew was coming actually becomes front and center for us. so i don't know. this is ibm and intel today, not to worry i understand that, but we'll see. we'll see.

>> okay. >> we will see >> we're going to reregulate and do some other things, but hey, we've had a great run anyway >> elections have consequences, right? >> yeah, they do >> some of the things that they would have done. >> yeah. >> all right thanks, eamon. >> joe, i think it's probably worth pointing out that the dow is up pretty significantly i think the s&p, too maybe 12%, since election day. i think you're right, that people are focusing on the money that's going to be spent now and not some of the consequences or the taxes or how to pay it down the road. >> a big sigh of relief. >> that's common for the first hundred days of a democratic presidency often sees this because of the money that's going to be spent and what goes into it. we'll see what happens over a hundred days and what happens later. >> you're hitting your head against the wall, you stop, it feels good too, usually, right >> that's true that is true. >> we have had a lot happening the news cycle --

>> a little peace would be good. >> a little boredom would be good. >> we'd all like that. yeah anyway, when we come back, the biden administration signaling that it will not drastically depart from president trump's china policy we're going to get reaction from beijing next. and we're watching the price of bitcoin, the cryptocurrency dropped by as much as 17% yesterday, falling below $30,000. at the end of the day, down by 11.3%. this morning, it's down a little bit. i have watched it bounce around, down 2 1/2% a little bit ago now down less than 1%. this isn't boring, if you're bored with everything else, you can watch this, it's all over the place. bitcoin is still trading more than 130% higher than it was just in the last three months. we'll be right back.

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welcome back, everybody. president biden's administration signaling that it may not drastically change from president trump's approach to china. let's get to eunice yoon in beijing for a look at how china is viewing this new administration, and eunice, obviously very early days, barely even days at this point, but what are these signals kind of meaning there on the ground >> reporter: well, i thought it

was interesting because china, just in the past couple of days, has really been taking on one of the buzz words from biden's inauguration, and that is unity, so china said that unity is needed for a reset in u.s./china ties the foreign ministry has also said that china welcomes the u.s. rejoining the w.h.o. and the paris climate accords under the biden administration, and then today the headlines in the state press have all been mimicking this call for a reset. for example, xinhua, the news agency, said it's time to heal and recover u.s./china ties, the china daily said we have unity of purpose to set ties back on purpose, and the global times, which is a communist party paper, very hawkish normally said china can partner on the virus fight, climate, as well as growth now, despite the official call for a reset, suspicions run very

very deep, skand it's been note not only by officials but also in social media that biden's cabinet choices have been very aggressive in their comments about china. for example, the dni or the director of national intelligence avril haines has said that she favors an aggressive stance on china the incoming treasury secretary janet yellen said she would use all tools against china's alleged abuse of trade practices, and secretary of state choice anthony blinken also said he agreed with the assessment of his predecessor that china was committing genocide on its muslim minority, the uyghurs, so secretary of state mike pompeo or former secretary of state, was sanctioned by china along with 27 other u.s. officials from the trump administration for what china saw as an abuse of undermining china's sovereignty.

what was interesting was that not only are the officials but their families can no longer travel to mainland china, hong kong, and any businesses and institutions affiliated with them cannot do business with china, so that's interesting because that would potentially make it much more difficult for them as well as other u.s. officials to get jobs, if they decide to leave government, and what was also interesting, becky, is that it really seemed like it was a veiled threat to team biden as well because of the state media here has been quoting experts as saying this puts a bottom line and a red floor underneath the relationship >> doesn't sound like there's a lot of patience, at least at this point, that they're looking for changes quickly. >> reporter: no, i think that the expectation here is that the biden administration is going to be very much focused on domestic

issues and so we won't really see a whole lot of movement on china for the next several months, and then once they do, the expectation is that the biden administration would potentially lift some tariffs on a case by case basis, that the biden administration is going to be working very closely with allies in order to try to pressure beijing, and that first things come first, some of the low hanging fruit, which it could be visa's journalist issues, as well as consulate issues are going to be the ones that are tackled in order to try to at least engage again and get the two sides communicating. >> eunice, thank you it's good to see you for a closer look at all of this right now, let's welcome carlos gutierrez, the former commerce secretary in the george w. bush administration, the former kellogg ceo, and

cofounder and executive chairman of impath. secretary, what do you think of this, what's your read on the situation? >> well, look, i think that china feels very emboldened right now. they feel strong these messages of unity are very nice, but they're very coordinated. the way they see it is they took an onslaught of triariffs, on onslaught of sanctions, the inf grow 8%, a little less than 3% in 2020. they feel like you threw everything you could at us, and we're still standing, so they're in a position of strength. they know it they're emboldened a lot of these tactics of holding back travel from people are just simply, you know throwing back at us a little bit of our own medicine. i think the problem that we have, and the opportunity is

that we need a china strategy, and it needs to be comprehensive and it seems like up until now, our strategy has been to prevent them from achieving their strategy so, you know, we're running around the world trying to convince countries not to join the initiative, and not to let huawei in, but what are we trying to do and you know, we need to make innovation a national priority we need some soft power. we need some alliances but we need to have our own sense of how we're going to view the world in the future. right now, we're just reacting to china the other thing that i would do, and i would recommend that president biden look at is get back into tpp. you know, that would give us strength it would give us leverage. >> i don't know that that's even a possibility at this point. and carlos, if you look at the

makeup of congress, there are a lot of china hawks, not just among the republicans, but among biden's own party, too, with the democrats. >> that's true >> i think he's going to have a very difficult time undoing even the steps most recently put in play in the last several weeks by the trump administration because he still has to answer to congress on that. >> you're right, becky, and before it used to be democrats who tended to be, you know, harder on trade, and now you have a republican party who is equally hard on trade, and both parties are very hard on china, so there are no political points to be made in having a pro china or at least a conciliatory stance or an approach that would suggest that let's find some way to coexist so everything is turned against this and you know, the ones who are suffering are u.s. companies right now, china is beginning to step up efforts to punish u.s.

companies who abide by u.s. sanctions. so who's caught in the middle? u.s. corporations. and that will continue, but i agree with you i've heard very little from president biden about china. everything they say -- i've heard them say about tpp is this is not the time. we need to wait. in the meantime, as you know, china is moving ahead with rcep, which is their version of a regional trade agreement, and they will regionalize the area, they will lead, and they will set the rules. tpp would give us a tremendous amount of leverage at the table, but we do need a strategy. we need innovation we need to focus on entrepreneurship we need to focus on soft power let's not make our strategy trying to stop them. what is our. so po-- soft party strategy

>> so many times during the trump administration. >> what's that >> i heard so much talk in the trump administration about how he was doing it wrong because he was fighting them unilaterally without building up a coalition of our allies, and kind of coming at them that way. it seemed like it was going to be such an easy thing to do, but now that you're looking at it, how complicated is that, and how likely is a strategy like that >> you know, it's interesting that president biden asked the european union to put their comprehensive agreement with china on hold for a while so the u.s. and the eu can get together and establish some common front with china the european union moved ahead and this just proves what one european leader used to say, countries don't have friends they have interests, and the european union just went ahead, and they pursued their commercial interests

so it sounds great, let's get an alliance, and have a common front with china, but i think the only thing we could aspire to now is that common front being a regional trade agreement like tpp, but the european union is going off on their own. >> we're almost out of time, but very quickly, canada is not happy with the first step the biden administration took with cancelling the keystone pipeline they're worried about the jobs that it will cost canadians. trudeau even kind of pushing back and saying that that was not welcome. others in the government there are saying they had been trying to reach out to the biden administration, who wouldn't talk to them ahead of the transition, and for that to be done on day one, you know, china has been one of our big allies when it comes to dealing with china. >> yeah, that's very true. it's a little bit disappointing. it's very early days, but we're just going back, you know, and we kind of go back and forth, and now we're back, and the keystone pipeline, we're going to join the paris agreement, and

that's all good, but i think we need some new ideas. i think we need a new approach to the world i think we need to step back and think about what kind of a world we want. but there's nothing new. there's no political innovation. at a time when we need some new thinking, so yes, it's -- canada is not happy the e.u. is going off on their own. japan is leading tpp and where are our friends? >> yeah. >> we're in a bit of a bind, and there is no easy out i think we've got to get back to the table with china we have to innovate faster than they do. if they need our innovation, if they need our companies, then they need us and they will have an environment for our companies. if they don't need us, then there's no reason for u.s. companies to be there. so, you know, we need to have our own aggressive push and not just try to stop them. >> carlos, keystone repeal, all

of these are a good things why is that a good thing it's going to come out of the ground and be transported with probably a less environmentally friendly way than already. it's totally just a feel good move that's going to cost thousands of jobs. and you just said, as a former republican commerce secretary, yeah, that's all fine and good why? >> sorry, joe, i said all fine and good in jest i never agreed with getting rid of the keystone pipeline why would we do that. >> we're back together >> we're just going to make the supply of oil harder it's just in jest. we're going back to the past that's great that's very nice, but what is new. >> okay. i got you. all right. i'm glad i took the time to talk to you because here we are again. thank you. coming up, amazon and

washington state trying a pop up approach to the vaccinationis. we'll tell you about the plans for a clinic in seattle. as we head to break, the shares of seagate technology, despite it beat guidance and wall street estimates, the current guidance was slightly higher than wall street fectsoras i don't know down 4 1/2%. we'll be right back. it's either the assurance of a 165-point certification process. or it isn't. it's either testing an array of advanced safety systems. or it isn't. it's either the peace of mind of a standard unlimited mileage warranty. or it isn't.

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. amazon is opening a pop up clinic in seattle to administer covid vaccines the clinic at amazon seattle hq plans to administer 2,000 vaccines to eligible members of the public amazon has appealed to president biden for it front line workers to get priority access to the vaccine. the company said it's ready to administer doses to its workers

as soon as they are made available. andrew. joe, we've got so much more coming up this morning stocks to watch ahead of the opening bell let's show you where the futures are pointing on this friday morning because it looks like a pull back. the dow off about 254 points right now. s&p 500 looking to open down 27 points the thak nasdaq looking to off abou 75 points. the heads of the kbipartisan caucus ahead, a look at today's winners and losers ♪ want to look through my shade and see you there with me ♪

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blank check companies continue to be red hot in the new year check out our cnbc spac 50 index. this tracks the top 50 u.s. spacs by market cap. including spacs that have declared a target investment up until the deal closes. up sharply compared to the s&p

500, and we have some new spac news right now phil lebeau joins us now with a special guest. i was trying to figure out how you're tied into this, phil. spacs don't move around, they don't fly. you can't make -- >> they're big in the ev world, joe, you know that, and that's what we have today let me bring in kathy zoy, the ceo of ev go, which today is announcing that it is going to be going public through a spac ipo. the proceeds, $575 million, equity value of 2 p.6 billion kathy, how much will this money help you as you try to expand your electric vehicle charging network? >> well, phil, the ev market is going so so quickly. i i think that's why you're seeing all of this activity we're an essential part, we provide fast charging infrastructure across the united states, one of the fast charging

stations in the country right now. to meet the growing ev market, we need to have more charging fr infrastructures. it will help us accelerate our growth plan. it's phenomenal. >> by 10%, 15%, 20% per year how much quicker can you add these ev charging stations >> look, this plan, we're currently at 1,500 stations. this plan will have us puts about 16,000 stations into the ground by 2027 >> cathy, you are a veteran of previous democratic administrations, so you are well aware of the plans, at least the hopes, of the biden administration for adding at least a half million ev charging stations here in the u.s how optimistic are you that you can get that kind of a push, not just your company, but the entire ev space can get that kind of a push from the biden administration when it comes to expanding our ev infrastructure? >> well, look, what we know is that the automobile sector is very important to the u.s.

economy. we also know that globally, who the whole world is transitioning to evs, and that charging infrastructure is a key part of that i was privileged to work with president biden during the previous emergency on recovery act issue that i know how important the automobile sector is to him. when the administration has talked about 500,000, that, again, i'll get techie for a second that's a combination of level two duration centers, you charge at homeover night, charge at work all day long, and fast chargers, you get a charge in 10 minutes, 30 minutes, while you're doing your shopping, so that 500,000 i expect will be a combination of level 2 chargers, and fast chargers. what i think the objective is to have charging reliable and convenient for everybody in america as the number of evs on the road grows >> you're working with general motors, you guys struck a deal last year to put in a number of ev fast charging stations, particularly in suburban markets that are going to be targeted

for expansion. how is that work going, and is it your sense that that's going to be one of the lynch pins to the adoption of electric vehicles, more people saying, yeah, i see that fast charging station, i'm more comfortable with range anxiety i might have about buying an electric vehicle. >> i think it's a really important insight that gm had as it was planning its build out. they expect to have 20 models of evs on the market by 2023, and the research suggested that people need to see that. it matches perfectly what we like to say is it takes one minute to plug in and then you do what else you're going to do anyway. some of our very sites are in grocery store parking lottings we partner with albertsons, kroger, whole foods, so we like to have our chargers just so convenient, simpile, plug-in, d your shopping.

>> barry sternlicht, notable investor was on our air, and he said, look, i have done some spacs and, he's got more coming but he said a lot of the spacs that have been put out in the last year, they have no business, essentially being in the market and they're not going to be around in a few years. when you heard that, or when you're hearing that now, what's your reaction? i mean, people are going to look at you and say are you the latest johnny come lately or a legit business that's going to be here five years from now? >> phil, we have been around for ten years. we have over 220,000 chargers on our network. we have 98% up time. we have about 80% of californians live within 10 miles of an ev go charger today, and 41% of americans already do. we're a real business that provides a great customer experience, and we're infrastructure those chargers that are on the screen behind me, they're in sacramento you can see them everywhere in the united states. >> cathy zoi, the ceo of evgo, as the company announces its

plans to go public through a spac ipo thank you, cathy, for joining us i'm sure we'll be checking in with you many times in the future as the network expands. the bottom line is this, not only are you seeing spacs in the ev space, pivoting just a little bit towards the infrastructure side but keep an eye on what the biden administration wants to do in terms of providing incentives for that ev nfrastructure. that's going to be the space to watch at least within the next year >> phil, i'm glad you asked what barry sternlicht told us yesterday. that was kind of running through my head the whole time you were doing that interview and i guess the biden administration and what they choose to do is going to have a big impact on how profitable any of these businesses will be. >> sure. >> because government subsidies certainly help things for companies early on like tesla, too. anyway, we will continue to watch this space, and we appreciate your time >> you bet when we come back, another setback for hollywood, and struggling cinemas mgm and sony delaying the release dates for some big

movies that we all have been anticipating we have the details next s. and energy stocks falling yesterday after the biden administration announced a halt on new oil and gas leases on federal land for the next 60 days "squawk box" will be right back. ♪ who youot g to call ghostbusters ♪ ♪ there's something weird and i don't look good ♪

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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♪ futures at some of the worst levels we have seen this morning. down 256 points in charge part obviously because of intel and ibm both reporting results that aren't being taken very well by traders this morning the nasdaq indicated down 84 s&p down about 30. hollywood is moving back delaying more film releases because of the pandemic. mgm said it would delay the release of "no time to die." james bond films get confusing because they all almost have the word die in them there's "to die another day,"

there's, i don't know, have i not seen this? and then they made "thunder ball" twice, and so it's confusing. anyway, what a ride, if you own the rights to those novels they never get old, do they? the latest installment, though, is now delayed won't be released until october. it won't be released until october, had been april. i love that daniel craig says i'm not doing anymore, and then they go, how much does he got now, 15 million, sorkin, do you keep track of that i'm not doing it more than that, i think. >> i think it's 20 i'm going to get you the numbnumber it's at least 20. >> he's a good one they're not all created equal. he's a good one. >> i'll tell you, i'll go see any of them. just about any of them, maybe not roger moore, but i would go see these movies, and you would too, joe, even though you're complaining it's the same movie.

>> i wasn't a big pierce brosnan guy. >> i loved pierce. sean connery is the best love pierce. >> the question, though, is would you sign up for a streaming service if they have this on the network? and i think you would. >> if that's the only thing. >> even if it was more expensive. >> maybe to see the first 15 minutes. >> if they had all the jason bourn movies, jason bourn, matt damon, all the time. >> that's true you think sean connery could kick bourn's ass. >> digging in the two tech stocks, ibm and intel falling in a big way. we're going to tell you why and if it could be a buying opportunity, next. flexshares are carefully constructed. to go beyond ordinary etfs.

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welcome back to "squawk box. a couple of old guard tech stocks getting punished. intel and ibm off sharply. ibm off at 7.5%, intel off at 4% dan ives joining us. ibm a fourth straight quarter of revenue declines biggest revenue decline. big blue saying it does expect revenue growth in 2021 we've had this conversation before about this idea of empty calories or real calories that are being lost here and when you look across some of these numbers, there are some real calories in there that are being lost, not just the empty ones. >> yeah. it's another black eye for ibm especially in the cloud. when you think about what's going on, look at microsoft, aws, ibm has continued one step forward, two steps back. even though new ceo, new

strategy, this is just continued share loss situation i think it's troubling for the street especially in terms of what you're seeing with the trillion dollar cloud market under their nose it's an ever slight uphill battle with cloud and i think you saw that last night. >> you look at the red hat business, that business was down, not up what does that say in this environment? >> did they bet on the wrong horse? and i think that's always been the issue. were they late to the game on acquisitions did they make the right acquisition in red hat now they have to prove it. a great ceo, that's the opportunity but also the challenge. i think if you look what's happening in cloud, we'll see what happens next week, i think you're going to have a tech blowout across the board on cloud and that continues to be their sweet spot losing more and more share it talks about innovation, did they miss it here or did they bet on the wrong horse that's what they have to prove

going forward. >> okay. but for the investor out there looking at ibm, do you, therefore, say this company is over valued at this point, $121 a share? do you say it's under valued do you want to bet on arvin and his ability to pivot this company in the future? >> yeah. of course, a spinout coming later this year. >> yup >> right now it's a prove me story. in cloud you look at a microsoft, that continues to be the best bet dell with the golden touch i think what we're seeing next week that's why stocks are cheap but cheap is not necessarily what's moving the needle. i think that's going to be the focus going forward as they sort of prove out the cloud strategy, but you've got stalwarts, g google, gcp coming from behind oracle it's a crowded market. >> what's a fair value for this company? >> i think right now this continues to sort of being, you know, i think a stock that to me is pretty fairly valued relative

to the overall market and i think unless they show that they can grow, the market's not going to pay up. market is paying out for growth not enks and they're on the outside looking in >> okay. let's shift real quick to intel because the company posted record annual sales i should say but one of the big issues here is that the incoming ceo said intel is going to start outsourgsing some of its prod production what does that say to you? >> we know pat well. i think it's new blood if you look at what's happened similar to ibm, old tech you're seeing a tale of two cities they need change the strategy and to me it's really all about ai ai is going to be the future going forward. can they make more of a bet there, but clearly losing more and more market share to amd and everything that lisa has done over there >> so are you buying this stock? are you going to bet on this new ceo or do you think this is over

valued, too? >> i think it's similar as ibm they have to prove it out in terms of being successful. right now you cannot make that bet given the growth and given where the cloud market is going across the board then you look at semis it's a golden age, but intel even though they continue to be the star, missing out on the market investors will continue to be skeptical until they can prove it out that's pat's opportunity but also the challenge. >> you're not buying that, that opportunity? >> to me and semis, there's other plays across the space when you look at amd, nvidia i think right now in terms of the stocks you want to bet on the growth stocks, the ones that are performing. >> okay. dan, great to see you as always. thanks for sharing your insight. >> thank you. >> appreciate it talk to you soon joe? thanks, andrew pimco head of public policy will

weigh in on the next round of covid stimulus and what it could mean plus, the problem solvers co-chairs join us a little later in the show on the biden administration's legislative priorities those two guys you are watching "squawk box" on cnbc

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futures trading lower as they are a record setting week for stocks president biden preparing to issue two more executive orders today with a focus on the economy. we'll bring you the details. under pressure shares of tech giants intel and ibm both trading lower this morning after quarterly results and commentary we'll get a look at the names moving in the premarket. that's straight ahead as 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. u.s. equity futures at this hour we are in the red this friday morning. looks like the dow would open off 246 points down. nasdaq looking to open 72 points down and the s&p 500 looking to open off about 27 points got a couple headlines to talk about this hour. ford recalling 3 million vehicles 2.7 million in the united states for a potential airbag issue the problem is the airbag inflator, that's what the issue is, could potentially rupture. this could call ford $6.4 million. a judge has refused to have amazon restore parler's web hosting. the judge said parler could not prove that amazon breached its contract with parler or violated antitrust laws. the pandemic continuing to

way lay big budget releases for major movie studios. joe and becky and i are all looking forward to this movie. the newest james bond film "no time to die" is pushed back for the third time we haven't talked. this creates real questions and problems for mgm in terms of how they're bumming getting. that was a company people thought might get sold, perhaps to a streamer or another big company. there's some view that maybe an apple or somebody would try to take out mgm to put a movie on its service again to create a whole new subscription revenue we're going to see definitely putting pressure on mgm as a result of all of this >> yeah. saw that that's our friend ulrich, kevin. >> yeah. yeah >> who we've known for a while i don't know i don't know what -- it's been -- how many times has mgm been sold for the film library

>> traded back and forth. >> all over the place. let's get back to the markets. mike santoli has been studying the charts we had guys say we go higher for the year but maybe at some point the play it forward or pay it forward trade comes home to roost and the frost comes out before we go back up is this the start of anything today, mike? >> it's too early to say that. down 2/3 of a percent in the s&p future what's been going on instead of an across the board declines is just the sort of rotation. some groups cool off and pull back you can see here since the end of october your pull backs have been limited to 2 to 3% for the high you want to take a look at how steep and aggressive those short-term peaks were in june and august not quite the same situation although right here if you looked at how technically over bought the market was on september 2nd relative to its longer term trend, you're pretty close right here the makings are there. what's interesting is what's

going on inside the market take a look at this chart. over the last couple of days what you might call the leading frontier of risk appetite. obviously we're looking at bitcoin having a steep decline small caps have been recent leaders. tesla hasn't done much despite a lot of price targets kce, brokers and asset managers. the wall street trade concentrated they have softened up over the last few trading days. you have the old defensive dominant growth stocks in the nasdaq 100 that have reasserted themselves whether in fact you can keep the choreography going and you have the quality defensive stuff pick up the slack from the riskier or more cyclical areas, that's been the question there's no doubt we look a little bit like it did in the beginning of 2018 where people were very, very bullish tax credit in the books and coming into the year and you did get a pretty sharp pull back and elevated sentiment and that had a little bit of gut check back in january of 2018, joe.

>> trying to figure out how it happens, mike. what would be the -- we'd come up with something. >> that's it. >> the nominal reasons for it. i would think a rebounding economy and a rise in interest rates could be the reason if that happens, but i don't know what happened to the ten year. it's supposed to b 140. it kind of moderated again. >> it's paused ithigher. >> huge. >> then had a little bit of a rest right now. >> 30 basis points but that is -- that's a big percentage boost. we will -- keep us updated >> yeah. >> when you are not on tv are you just staring at charts is that what you're doing? >> pretty much. >> that's sad. really kind of sad >> little bit. >> see ya, mike. thank you. andrew okay coming up when we return, joe, president biden announcing he's going to sign two new executive

orders today both focused on the economic front detail and reaction from the head of public policy trade. watching the price of bitcoin. dropping by as much as 17% yesterday falling below $30,000. right now you're looking at $31,853. "squawk" returns right after this ♪ ♪ ♪ ♪

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president biden moving ahead with his $1.9 trillion american rescue plan as promised, but it faces republican opposition and will likely be smaller new this morning, the biden administration saying the president will sign two executive orders today, both focused on the economy a few details from national economic council chairman brian deis the first executive order will deal with food assistance, in part increasing the emergency s.n.a.p. allotment for families. include items on worker safety specifically saying workers have a federally guaranteed right to refuse employment that could jeopardize their own health, obviously covid, and the second e.o. includes a plan to promote the push for a $15 minimum wage.

for more on biden's fiscal agenda we're joined by libby cantrell, head of the u.s. public policy at pimco we need to divide it up, i think, in time frames, i think, libby. we'll do some of these things, but the pandemic is still front and center the economy still front and center in terms of, you know, not -- definitely not, i would say, above stall speed necessarily until we get out from under this pandemic when do some of the bigger, boulder initiatives actually start coming to fruition where we actually -- where biden tries to do it, president biden? >> good morning, joe i think that's exactly right that's what the biden administration has intimated, too. they are thinking of these as two different stages the first is going to be focused on covid relief and in that respect it's going to be a very familiar mix of policies, extension of unemployment

insurance, more aide to states and cities they have been sort of missing out in the previous c.a.r.e.s. act packages again, nothing really revolutionary on that front. really, you know, targeted to address the covid pandemic then i think that ambitiously president biden will then try to move on to recovery and that will include more infrastructure spending, potentially some spending on health care but that is really where those sort of big, bold, visionary plans come into play but of course as you sort of intimated, the rhetoric is different from reality on capitol hill trying to find the votes is not necessarily straightforward. this is how we should think about it as investors really are a relief focus for the first six months and then really sort of a transition to the more kind of recovery focuses, recovered efforts. >> libby, everybody needs

someone like you with their finger on the pulse of washington you are at pimco is there ever wall do you ever sit in on the meetings about a bond market if we're going to do all of this stuff before we raise any taxes or generate the revenue that supposedly is going to come down the line, is anyone worried at your shop about where we are and where we're headed if we just keep piling on stuff which is what you just said we're going to do before we raise taxes. >> yeah, no, joe, that's been an active discussion within our investment committee certainly a lot of our clients are asking us about it i think the way we're thinking about it, how does this impact inflation potentially? and to your earlier point about where we are in terms of the economy, the initial condition, so to speak, we've taken the elevator down and we are slowly climbing the stairs back up but

we are not near where the baseline economic growth is. we do believe that this fiscal stimulus, especially the one more sort of focused on relief, does not look like it will be inflationary we don't see that in the data and we don't expect it to materialize in the data for at least this year. now it will be a different story if the u.s. government continues to spend at this rate, you know, once we do get to more firm footing in the economy, but that is where i always talk to our investment committee, that's where politics does come into play and will likely be the moderating force there are certainly still some deficit hawks on capitol hill so i think, again, we do expect pretty meaningful fiscal stimulus in 2021 but we don't think this is a big paradigm shift. we don't expect it to run away

spending for years to come. >> my own perception of inflapgs is totally changed i was there in the '80s. at this point i'm like, bring it on if we could do it, then we don't end up like japan or some of these other places i bet you i can quickly go back to worrying about the south american style of currency so you've got the $15 minimum wage we've had people say that people that are already there would then want -- if they're at 15 now, then they're going to want 20 do you believe that if you do it with the small percentage of minimum wage earners, would that sort of work its way through pricing and would that generate inflation? then you've got i don't know what happens in the oil patch, i don't know how much the climate change stuff is going to raise prices there there could be inflation, right?

>> yeah. there are more risks to inflation certainly than there were last year just given, again, this onslaught of government spending and, you know, the fed has made it pretty explicit that they are much more focused now on full employment and that they will let the economy run hot for the foreseeable future, right? vice chairman rich clarida is pretty specific saying he will let it run hot, inflation at target, if not a little bit higher, for a year or so there are risks to the inflation. we don't see it now. we're not expecting to see it with sort of the spending. to your question about minimum wage not to be the debby downer here, this is where the votes matter democrats can't pass a $15 minimum wage increase by 50 votes alone. they can't use that arcane budget tool called budget

reconciliation they need 60 votes i doubt the 60 votes are there i don't think we should worry about inflation being led by the federal minimum wage, i doubt we will get to that $15 range. >> pimco is not mostly a bond house, if it was a stock house would any of these initiatives be troubling >> i don't -- seems like the equity market has responded pretty well from a macro perspective, up pretty significantly since the election with the anticipation of more fiscal spending and certainly that is positive for risk assets we do -- you know, we do manage great risk assets as well, obviously the credit market. yeah, i think of course you're worried about bubbles. you're worried about the fact that valuations are stretched from an active manager perspective. >> inauguration was wednesday. we don't know -- it's been okay up to this point, but we'll see.

we don't know. >> and, again -- yeah. i can't reiterate this enough, you know this just from watching washington for so many years, campaign rhetoric is one thing policy reality is another. you are seeing the biden administration predictably pushing through their policies by executive action. executive actions only mean so much you really do it need legislative action with fullsome policy >> there's an interesting story in the journal in the op ed pages, mcconnell, schumer, they want a working relationship, they're going to try and work together and not kill the filibuster until they don't get something they want and then they're going to say, you're not playing ball then the pressure comes on joe

manchin and maybe some other. >> that is a possibility with any party in the majority. when the republicans were in the majority i have a pretty strong view on this that i've expressed both internally and to our clients. i just don't think the 50 votes are there to change the filibuster everyone is focused on manchin from west virginia, but there are lots of modern democrats and institutionalists. the only distinction between the house and senate is that filibuster that's what creates it for them. i doubt if that happens. >> two young senators up in two years, warnock and the astronaut. >> mark kelly from arizona yeah, exactly. >> exactly i don't know i don't know whether that would mean they don't get re-elected i don't know i don't know how people of

georgia or arizona would feel about that libby, thank you >> thanks to you. >> we'll need your expertise people write in, why do you talk politics on the show instead of business it's like, really? really, you don't really think that -- okay it makes a difference what happens in washington, d.c joe, i have to show you a video i saw of mark kelly, i posted it on twitter in three or four weeks when he was in space in the international space station he snuck up a gorilla costume without anybody knowing it he snuck it up, didn't tell anybody and there's video of him dressing up in it and hopping out and scaring the heck out of some of the other astronauts or cosmonauts up there. i can't imagine, every movie you've ever seen must pop into

your head coming at you. >> it could have been a stowaway or someone who got into the air lock out there like chewbacca. >> it's one of the funniest things i've ever seen. >> it could look like that from chewbacca so we know that it is possible that he could fly a ship >> yeah. right. exactly. when we come back, we have much more on the markets this morning. the futures this morning have been under a little pressure this is different from the trend we've seen in not only recent days but recent weeks. r. part of that is the pressure we've seen on dow components, intel and ibm after disappointing results from the street you can see the s&p indicated down by 27 nasdaq off by 73 also, check out shares of paint and coatings maker ppg industries it beat earnings but says the

pandemic induced drop. it's of not just that. now they're under so much demand for everybody buying computers and phones for the pandemic. you can see that stock down by 3.9% "squawk box" will be right back. time now for today's aflac trivia question. which dating app recently filed to go public the answer when cnbc's "sqwk x"onnuesua go aflac!!! what the heck, troy - that's not your kid! the aflac duck is just covering for sophie. same way he got me money to help cover her hospital bill when my health insurance didn't pay for all of it. but this isn't fair! that's exactly what i said! but then i learned health insurance isn't even supposed to cover everything. wait...for real? for real real. luckily i had aflac. aflac!!! get help with expenses health insurance doesn't cover. go aflac! !mm-hm! get to know us at aflac.com.

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for a prospectus containing this information. read it carefully. now the answer to today's aflac trivia question. which dating app recently filed to go public the answer, bumble at 31, ceo whitney wolff herd will be the youngest female ceo to take her company public katrina lake of stitch fix was the youngest to do so in 2017 when she was 34.

>> of course, whitney's been on squawk with us, too. in the meantime, grocery delivery service insta cart is planning to cut 1900 in store shopping jobs. some instacart grocery chains plan to continue to use the technology but use their own workers to make deliveries joe? >> thanks, beck. friday did you notice bumble, fly, "i'm in love. >> it's not for bumble, it's designed to annoy you on fridays. >> it was could incident with the bumble question, i'm certain of it. it's been tough for dating, i think. i'm being told that through covid. >> i guess. >> how do you do it? what's on the questionnaire? it's one of the questionnaires when you try to go to a dentist. they need to know everything you've ever -- it's tough. i feel bad i've always liked being married. stop dating. stop exercising.

still to come on squawk -- still to come on "squawk box," the biden tax plan and your money. investors have shrugged off the idea of higher taxes so far sending markets to new highs could it come back to haunt them we'll discuss that after the break. intuitive surgical falling it placed fewer of its systems in hospitals due to the pandemic it's down. "squawk bo wl rhtacx"ilbeig bk.

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welcome back, everybody. the futures this morning are a little bit weaker. dow futures down by 250 points you have to remember, it was down just a few points from an all-time high yesterday and both the nasdaq and s&p set new highs once again yesterday markets have been hitting all of the new records even though president biden is expected to raise taxes at some point begging the questions why aren't the markets more jittery about potential taxes? joining us on that front is jim keenan chief investment officer and global co-head of credit at

blackrock. jim, it's a good question. are the markets whistling past graveyard or is there a reason they should hit the new highs and not worry about what's to come later >> i certainly believe the tax policy will increase i think the market has gotten comfortable with that. that being said, the timing of that is important. i don't think there are fiscal policies, even with the new administration, that is going to focus on tightening the market i think you're still seeing this with the most recent increase in the plan to go to $1.9 trillion. they're looking to stimulate the market unemployment still high. still moving through the pandemic and the rollout of the vaccines right that taxes are moving up, but i think the market is focused on this pro cyclical tailwind that we have based on the amount of liquidity put-back in the system. the combination of that.

the vaccine is a significant tailwind from an earnings recovery stage when you think about relative assets, the equity market looks really attractive relative to other fixed income securities. >> i think part of it, we've just been talking, having this conversation about washington and it does matter what washington does. the market's figuring at this point you're going to see a much bigger stimulus package coming down the pipe once again, right? >> yeah. not just washington, right it's the fed, other central banks around the world you have this environment right now i think from an earnings perspective, right, you have the con consumer's in a really good shape, right you've seen this recovery in global asset prices so net worth at the household level is strong income with regards to all of the subsidies and stimulus has been strong. savings rates have shot up into the high teens as you start to reopen the economy, that will be lumpy and

volatile, that being said the gearing for recovery of heequits or earnings is going to be pretty substantial as you start to see the pull through of reinvestment in inventory, economy and consumption can really kind of handle that i think when you look at earnings or where equities are being priced right now versus what you're seeing cash rates at zero or the ten year back to 1.10, the equity environment is still pretty attractive relative to earnings growth not necessarily multiple expansion like we've seen in the last six months. when you try to figure out how to invest in this regime, that will be the equity outcome and support for credit ads they've tightened up on the runway at this point. >> we had lee cooperman on earlier this week and he said he'd be very reluctant to get anywhere in the credit market.

he doesn't like bonds. treasury bonds but was not a huge fan of corporate credit either. why are you constructive on that area >> it's where in the corporate credit market you are. we do like to leverage loan market, high yield market. there are other places to get income parts of the private credit market we find attractive to get yield. some areas of em we can pick up some spread relative to the u.s. market, things in asia that earnings backdrop, the recovery in earnings is very supportive for levered credit. where you're not taking your risk from interest rate sensitivity or duration but really just earnings recovery. and so the framework is it's still supported by that earnings recovery and liquidity backdrop but you're limited on what you can get. most of the leveraged loan market and high yield are trading attheir call prices so

there's less up side i think you'll still see a 4 to 5% return. when you think about cash or other fixed income, that's still an attractive excess return. still not anywhere near the returns we got a year ago. still supported and we like that front end. >> what about technology i know that's an area that you continue to like, but can you be more specific about that do you like the areas that have already seen some of the big run ups? do you think that continues? do you like the places that have gone a little less noticed >> from a credit perspective, we certainly like parts of the technology, more of the software oriented, more continuous cash flow i think from the standpoint, we all know the economy is evolving dramatically you've seen the resiliency with the technology and software companies over the course of the last year. there's an enormous amount of investment and the trends are shifting you have things like the rollout

of 5g and technology and infrastructure you talked about. i think you mentioned earlier on the show with regards to the shortage we've seen on semiconductors based on the utilization in everything you've seen in autos as well as in computer and chip. the environment and economy is changing dramatically. those growth trends are secular. we do like from a standpoint in the credit markets and equity markets some of the opportunities you can get for stable, long-term secular growth you can see in the technology market. >> jim, we've watched the gains in the market really pick up and accelerate over the last couple of months. if you're looking through election day and inauguration, the gains are the biggest in recent history for any president coming into this why do you think that is and having seen a big pickup, 14% gain just for the s&p 500, does that tell you we've stretched things, maybe pulled gains forward or do you think

this is justified based on what you're hearing in terms of the spending, in terms of the picture from the fed >> i think it's justified. let's go back. before the election there was a trend, right all these tailwinds you were seeing, that was a reality before the election. right before the election there was a period of uncertainty with the actual re-election itself. i think positioning came down. then you had certainty around the election and then you had the vaccine, positive news broadly speaking when the vaccines am broadly speaking there's an increased level of confidence in regards to the economy recovering there will be volatility we've seen the new strands of viruses pick up and new lockdowns. without a doubt the first half of the year will have volatility around the economic numbers. the market reopening and the

tailwinds, since the election you've seen that shift even in the numbers you've seen that value trade and some of those pro cyclical or the sectors most affected by the covid helped drive that. and that new leadership that's driven by the vaccine and the stimulus and it's affected the markets you get at the back half of the year. >> so you'd be telling investors at this point to remain fully invested or if they have money on the sidelines, dgo ahead and put it to work and don't wait for a pull back or because of the volatility, hold off and wait until there's 5%, % pull back and put it in >> yeah, i think if you look at the markets and the credit markets are prettystable less volatility from where they're trading. we're talking mid single digits

and the high yield market. there are opportunities in the private credit space to get more in the high single digits type yield. that's very attractive when you think about the range of outcomes this year we do think equity markets are attractive we would say you should not only be fully invested, you should be fully invested in it in the pro cyclical environment because i think you are in a multi-year environment supported by liquidity and you have the backdrop between the consumer, the banks being in good position as well as investmentthat i think you'll see at the corporate side that backdrop is something that is certainly pro cyclical and warrants being invested. there will be volatility and have you put it in some more risk bounds with being more pro

cyclical and equity oriented and you can trade it but i wouldn't position for a short-term pull back. >> jim, thanks for joining us this morning have a good weekend. >> thanks, becky okay when we come back, we're going to talk about the spac craze is it hurting m&a activity deal making in 2021 with morgan stanley's vice chair disney getting an -- well, i'm not going to tell you what the details are. maybe you can guess. we've said an upgrade. we'll explain right after this no one likes to choose between safe or sporty.

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welcome back to "squawk box. the futures right now are pulling back a little after some recent new highs the dow is down 263 points s&p down almost 30 nasdaq down about 85

intel, ibm problematic this morning after results. meanwhile, ubs upgrading disney to buy from neutral with a price target of $200 the analysts saying the company's disney+ service is positioned to scale similar to netflix with 340 plus million global subscriptions by 2024 and the park will be a beneficiary of vaccine availability and pent-up demand for leisure travel normally you would see leisure, i before e except after c except in that case, andrew >> it's interesting how we could see the crossover from digital back to the real world we'll see. meanwhile, amazon opening up a pop-up clinic in seattle

planning to administer 2,000 vaccines to members of the public amazon has appealed to president biden for its front line workers to get priority to that vaccine. the company is ready to administer doses to its workers as soon as they are made available. joe? >> thanks, andrew. coming up, the man who worked on last year's acquisition, nvidia's 40 billion purchase from arm. robert kindler joins us after the break. check out this morning's winners and losers

welcome back to "squawk box. morgan creek capital and xos are going to invest in spacs that's going to be spxz. it will merge with a spac and shell companies that are seeking startups to take public. blank check company spacs continue to be the red hot story of the new year. check out our cnbc spac 50 index. top 50 u.s. spacs by market cap, including spacs that have declared a targeted investment it's up sharply to the

renaissance etf and tracks ipos. joining us is robert kindler, morgan stanley vice chairman and global head of m&a good morning to you, rob we talk spacs every morning. i heard a phrase i never heard it used to be you have a beauty pageant or auction which you'd run an auction for a company now they have spacoffs you have a target company. everybody shows up as a spac what's happening here? >> they fulfill a unique space i don't think they're going away what's happening overtime is the technology around them has gotten better. most notably around doing the pipes at the spac. what's happened with spacs is they've become just a unique vehicle for certain companies. right now because of the public equity markets are so high, you

can get more from the sale of a spac than you can the private market there's a disconnect between the public market and the private market if the overall capital markets weren't as high as they were, spacs would not be as active the other thing too is that -- yeah >> i think you're pointing out a question i often get email that i'm a spac hater i'm not a spac hater, i'm a questioner of the valuations of the spac universe in large part because spacs have been driven up by retail investors you just pointed to the issue, which is in spac land, in public land the valuations are much higher the private markets don't want to pay those kind of rates what does that say about the valuations of where we are >> well, i think you have to look at how these spacs come about and why the technology has gotten better. it has a lot to do with these

pipes coming in, which is where you basically have sophisticated institutional investors doing the dual diligence on the acquisitions and coming in and buying common. this is not preferred that -- >> common stocks so we're clear, right? >> that's right. the so-called pipe investors are buying common. one way to look at this, you know, andrew is to look at it almost as if these are -- this is public venture capital because what you can do with spacs which you can't do with ipos is you can go to the sophisticated investors and you can show them projections of the company that otherwise might not be ready to go public, and i think the retail investors and spacs are relying on the very sophisticated investors to buy the pipes. i'm not suggesting that spacs are going to be a huge percentage of the m&a market, but i think for the m&a business

it's another way of monetizing you either sell to a strategic where you can get synergies but there could be regulatory issues or you sell to a sponsor, that's certainly possible, but here this is just another -- for us it's great it's another venture buy. >> and a sponsor being a private equity firm. let me ask you this. there's been lots of company that other companies that want to spin out a unit will start to look at spacs as a potential buyer, if you will there's a lot of complications with that. you have to not only spin out the unit or break out the information, the way spacs work is investors that are investing in the spac are brought over the wall, if you will, and they get temporarily blocked from doing anything and it makes it complicated given the amount of time it may take to do the diligence. do you see that as an opportunity in the future or no? >> i think it's unlikely because

most of these particularly larger corporations, the entities they're going to spin off are large enough, mature enough that you could spin them off and the public market will accept them. these are unique circumstances, spacs, where it's a complicated story that you need to tell. so it's possible but i think the number of deals that are done -- spinoffs done through spacs are going to be minimal if any >> we just mentioned this new etf. when you look back at the quote vintage of spacs it will be a great success? great failure? what will it look like if you own the etfs of a broad index of the spacs? >> well, you know, say the obvious, a lot depends on the capital markets are because i think the reason the spacs are out there is because we have

such a bland capital market. i'm certainly not within my expertise to know whether or not that market is going to hold up. i think when we look back several years from now we'll see that there were a lot more spacs that were raised and that should be good deals and the deals that get done, those that are successful versus not successful i actually think are going to be more like the success and failure of venture capital, which does have a lower hit rate but when it does succeed it's much higher. i think that comparison to public venture money is actually the right comparison so depends on the market, andrew. >> rob, final question you've been involved in some of the largest transactions over the last, frankly several decades. you look out this year can big deals still get done

given the world of the regulatory environment and what does the biden administration mean in terms of how you're thinking of massive transactions >> overall i do think 2021 for a lot of different reasons is going to see fewer large deae de up but they'll be in smaller deals. th change in administration just remember, the last administration was somewhat populus on the regulatory side in any event and i think actually the last, ironically maybe, the last administration was viewed as more focusing on challenging large pac. we have things in reverse than they were historically same thing with deals coming from china and other overseas deals. having said all of that, for years, andrew, it's been very difficult in the regulatory

environment, not just in the u.s. but globally. so i don't expect we're going to see a lot of very large deals really in the industry, but you noted correctly tech and pharma. >> thank you very much happy new year to you. we hope to see you in person later this year. thanks >> that would be great, andrew thank you. >> boy, would it, for all of us. joe? >> yeah. it will happen coming up, we're going to talk to the co-chairs of the bipartisan problem solvers caucus congress, problem solving? tackling covid, the economy and much, much more as we head to break. a check on the futures trading in red this morning. "squawk box" will be right back.

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good morning futures in the red as we make our way towards the opening bell this friday morning, but major averages are still tracking a positive returns this week more executive orders on the way for president-elect --

president biden. this hour we'll speak with the founders of the bipartisan house problem solvers caucus before we can think of treating new strains of covid-19, we have to find them in a few minutes we'll hear from the ceo of i wllumina. the final hour of "squawk box" begins right now i thought it was you, andrew i'll go. >> i wanted to hear from you i wanted to hear good morning. i'm joe. good morning. >> good morning and welcome to "squawk box," joe. >> all right altogether now ready, 1, 2, 3 good morning, good morning. >> good morning, class. >> we can't do it because of the

delay. good morning and welcome to "squawk box. that's another problem with these remote locations anyway, good morning that was my mistake. i'm joe kernen becky quick, andrew ross sorkin. u.s. equity futures. i'm going to have to catch up. dow jones 231, let's check out the treasuries i'm interested in these, they're going back down. yields, 1.08 could be temporary fourth quarter earnings. ibm's earnings per share beat street but revenues missed pandemic related uncertainty kept customers from striking long-term deals. ibm, similar things before the pandemic ibm's fourth consecutive quarter

of revenue decline they did say they expect some revenue growth this year you're going to have to trust me pandemic era demand for computers help intel beat the street they raised the quarterly dividend by 5% the company's troubled 7 nanometer chip, the manufacturing is on track for chips that will sell in 2023 they said the majority of intel's products that year will be made in house rather than via outsourcing. investors didn't like that the comment is helping drive the shares lower, down 5%. premarket and after ours. thanks, joe. president biden is expected to sign two executive orders. one for food aid and one for $15 minimum wage these moves followed actions combatting covid-19 and

wednesday's orders on issues from energy leasing, evictions, student loan relief. joining us to talk about everything we've seen and what we expect to come is new jersey representative josh gottheimer and new york representative tom r reid what we've heard have been messages of unity coming from president biden. i'm sure that's music to both of your ears. let's talk a little bit about what we've seen. congressman reid, i'll start with you since you're the republican at the table. what do you think of the early executive orders we've seen, early requests for covid-19 funding? >> well, you know, obviously i'm concerned about some of these executive orders and actions they're taking and i disagree with them, like the energy leasing proposal i think we should be developing our energy resources and not cutting them off i've always said, executive

orders can be done but they can be undone by executive orders. the best policy is to have policy that's supported. that's the long-term legacy. people like us in the problem solvers caucus can come together, find common ground one of the areas of common ground should be covid that helps all-americans and that's what we should be focusing on right now in my opinion. >> let's talk about that covid first, congressman gottheimer $1.9 trillion, can you get both sides of your caucus lined up and say, okay, this is a bill we need to pass or are there sticking points that you don't think the problem solvers will be behind? >> good morning. we're still getting all the details of that package. what is clear is the work we did at the end of the year and the package tom and i and the problem solvers did was to get

emergency relief out as quick a as possible, which we did. and to get us through the first quarter. march will come fast we have to keep getting out resources, fight covid, beat covid and help our families through a tough time food relief. the president is working on today and more resources for unemployment which will roll off in march and of course state and local resources which is something we didn't get in our last package the bottom line is, some done in executive action, we have to get help to beat the vaccine we're not going fast enough. the virus continues to ravage the country. we've lost 400,000 people and unfortunately it's speeding up, not slowing down that's going to be key whatever package we put out to make sure we have the resources and help us and the small

businesses and families get through the rough months ahead. >> congressman reid, let's focus on the covid-19 package. we know where the initial markers have been laid down. you can easily tell where the third rails are in that. one would have to be the $350 billion for state and municipalities another will be $350 million what do the republicans have to say about those issues is that something you can find bipartisan support on? >> i think we have to first take a deep breath on the $900 billion that we did on the stimulus package that josh and i did that got delivered to the american people. we got to see where that money goes at that point in time we can have a healthy conversation about some of the remaining issues state and local aid is obviously going to be part of that liability reform is going to be part of that conversation.

lawsuits are now starting to pile up. anybody who thinks that lawsuit and liability reform is going to go away and needs to be addressed is living in a fairy land because those liability concerns are real. people are losing the defense coverage we have to deal with state and local and liability coverage i think there's an opportunity to do a package there. when you're talking about 1.9 trillion on top of $900 billion that hasn't gone out of the treasury's offices yet, literally just been approved and is being distributed as we speak, i think it's premature to talk about $1.9 trillion in totes tall until we see how this money of $900 billion impacts it and where we stand as the vaccine to come together on today gets rolled out and solves this issue of covid-19 herd immunity that we all need to get to as soon as possible. >> i'm sensing there's already

some divisions that are popping up even between the two of you who have worked so closely and pulled so much of the caucus together josh, could you agree that there's time that we can wait and see before we need to decide about the state and local municipalities aid i would think that's something you work on pretty hard. >> tom and i always disagree before we agree. that's what's good about working together there's definitely -- as you probably know, there's a desire first and i feel the same way to see what resources have gone out the door, where we need extra resources. we've heard clearly when it comes to covid vaccination and testing, that's an area that needs help how much more direct assistance do we need to get to folks another additional checks have been talked about. all of those things need to be assessed and we need to get the

facts. people have talked about a targeted package in the short term and checks to families. that might be one path we go down we have to get it out of the house and senate we've talked about here, it's a narrow majority in both houses we have to sit down and giant that agreement tom, i, others will sit down and work together to find a way forward. as tom said, got to do something and that's really what this is about. >> becky, how we do it -- >> josh, did i just hear from you? go ahead, tom? >> what i was going to say, how we do it in the problem solvers caucus, finding common ground means you're a proud democrat or proud republican, you stay in the room and find out where the common ground initiatives are and that's what we do. out of the $1.9 trillion, at some point we will get there with members like josh and working with president biden,

just because they wear a democrat on their lapel, that is how the american people win. that's the new era of governance that's come to washington, d.c., led by the problem solvers caucus. >> you're saying the $1400 direct checks aren't such a great idea if you give it to everybody. you'd like to see more targeted dollars? i'd like to see where the framework is did i hear that correctly? >> one of the things that's been proposed is to go more targeted resources, that's an idea ticking around in terms of finding a compromise what we'll see is building the 60 to get to the senate. as tom said, we have to work very closely with the biden administration to find out how

we can get to what they need to help the country through the pandemic and help our families and small businesses and local communities. we'll see in the next week this will continue to move around until we can build the support we need to pass the legislation. that's what's good about this process. we're talking, not screaming at each other and working together. as the president said this week, unity is the answer. we have to turn the page on division and it starts here. >> tom, let's end this conversation where we started it you pointed out that you're not thrilled about all of the executive orders you'd rather see issues like that legislated. what other big topic issues can you get legislation passed i think about issues that have kicked around congress for more than a decade, things like immigration and infrastructure are those areas or other areas you're targeting >> i think there's wide support

and something on infrastructure. $20 trillion deal on infrastructure we could come together i'll raise expectations. if that truly got leaned into by democrats and republicans and putting american people first, infrastructure, trillion dollar package, we could get there. let's get it done together >> congressman reed, congressman g gotheimer, thank you for your time we'll see how that unity is going. thank you very much. >> thanks, becky. >> appreciate it. >> andrew? >> thanks, becky when we come back, an interview you don't want to miss ceo of illumina. as we head to the break, let's get you caught up on this morning's headlines right now. the cost of more than $600 million, ford recalling 3 million cars because of an

airbag inflator that could rupture. most cars in the united states. a u.s. judge rejecting a demand from the social media network parler that amazon restore web hosting services those were cut off in the wake of the january 6th riot. the judge said parler was unable to prove amazon breached the contract the senate set to vote on yellen ninioomatn. stay tuned, you're watching "squawk box" on cnbc we made usaa insurance for members like martin. an air force veteran made of doing what's right, not what's easy. so when a hailstorm hit, usaa reached out before he could even inspect the damage. that's how you do it right. usaa insurance is made just the way martin's family needs it

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box," everybody. we've been watching the futures on this last trading day of the week you'll see there is a little bit of pressure. dow futures down by 230. down by as much as 250 points. s&p down by 27, nasdaq off by 84 worth bearing in mind that the s&p 500 and nasdaq coming off of record closes and the dow was down just 12 points from its record close yesterday joe? >> coming up, dr. anthony fauci headlining a white house briefing last night saying it doesn't look like the south african strain of the coronavirus has made it to the u.s. but he also said this --

>> we must be honest and say that the level of comprehensive sequence surveillance thus far is not at the level that we would have liked >> we're going to talk about that critical question of virus surveillance that's coming up next with the ceo of i willllumina. and strengthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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welcome back to "squawk box" this morning now to the fight against covid and fears of new trains. meg tirrell joins us with a very special guest. meg. >> reporter: andrew, thanks. francis desouza, the ceo of illumina thanks for being with us this morning. we have to talk with you about the sequencing surveillance being done in the u.s. to try to track the new variants first start us off by telling what you're already doing. you've talked about a partnership with the cdc >> we have been involved with the pandemic since the very beginning. december 19, 2019, our teams were in wuhan working with the chinese cdc to first identify what was the origin of this pneumonia of unknown origin and then in january 2020 we were working with a team in shanghai who published the first viral

genome since then we've been working around the world with cdcs, private labs, public health systems to track the outbreak of this pandemic. right now we are working with a number of governments around the world, the u.k. government as they sequence their outbreak and in the u.s. we're working with the cdc and labs like helix to do sequencing of the virus here in the u.s >> reporter: we know that through that partnership already with helix and cdc you've identified some of the first cases of that b 117 variant known as the u.k. variant. dr. fau dhi was talking about the south african variant and how it could be concerning because it could evade some of the protection from our vaccines and monoclonal antibodies. what are the chances that the south african variant is here in the u.s. and we have not picked it up yet? >> i think the chances are high, meg. the reality is in the u.s. we

are doing very little genomic sequence you want be to see agquence 5% o get a good view. we're getting not a great picture. we identified the u.k. strain, the b 117 strain up to 130 cases now that we've identified and we have seen it across eight states, it could be much larger number now we haven't seen the south african variant. that's more of a function that we're not looking enough more than it's not here >> why don't we sequence more? this is a question i've had since we first looked at the u.k. variant we learned how much u.k., denmark was doing. we've been talking about the

technological prowess of the united states. you guys are based here. we have to many gene sequencers. why have we not been sequencing more >> that's a great question it was really a wake-up call for us in the u.s. we have the technology we power a lot of the sequencing happening around the world there's a very clear case for why you need sequencing. the surveillance is what tells you in the first place if you have an outbreak one of the aha moments was when we realized in the spring of last year that the virus had been spreading for weeks and months before we realized it was here you need the genomic outbreak. it could be emerging antimicrobial resistance today without the comprehensive

surveillance we don't even know if those things are happening. this is a clear case to do the surveillance some countries because they have national health systems, they have a coordinated strategy, they can get ahead of it the u.k. is a great example of a country that's moved quickly and put together this genomic space surveillance network they have a good idea of how it's spreading australia has done it. germany and france are standing up theirs. in fact, on monday the e.u. commission has said member states should stand up their own genomic surveillance networks and sequence about 5% of the positive samples we don't have or we haven't had that central coordinating effort here in the u.s. what's happening is you're seeing regional cdcs, seeing

some health systems all do their own sequencing there hasn't been a central effort to coordinate and push a mandate for sequencing that's what we need. it's encouraging to see the early work coming out of the biden administration there is a recognition we need something like this. in terms of the plans put out, there is pandemic preparedness and we are starting to see the recognition. >> that's exactly what i wanted to ask you we've been digging through these executive orders, presidential directives, memorandums coming out from the biden administration they're voluminous there's nothing specific about genome sequencing and preparedness better preparedness, better use of data. what outreach have you heard if any from the biden team about standing up these systems to make sure we're adequately

tracking what's happening? >> as you look at the national strategy, it talks about a number of things and it touches on the need for better pandemic preparedness, awareness. similarly, there's a callout for a national center for epidemic tracking, forecasting and analysis both of those will need surveillance in addition to that, if you look at the team, there is a high level understanding of the science of the pandemic and more specifically the genomics in fees like eric and frances arnold there is a high level of understanding of what's necessary to put that in place we have to see the specifics that's still to come feels like it's moving in that direction. >> francis desouza, we are happy

to have you here we hope we can get a better handle on what's happening >> thank you. >> meg, thank you. meg, thank you for bringing us that important interview we should also tell you an important note, on february 9th cnbc's healthy returns spotlight will bring attendees up tote minute information on the vaccine and geared towards investors, policy makers and business leaders it will feature walgreens and howard university hospital and so much more register and do it right now at cnbc events.com/healthyreturns. >> that is something i would be interested in hearing. when we come back, president biden wants to boost the federal minimum wage to $15 an hour.

just ahead we'll see what that could mean for workers, employers and the markets. stay tuned, you're watching "squawk box" and this is cnbc. ♪ my retirement plan with voya keeps me moving forward...

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coming up, tech's old guard versus the new guard and what does the new class of high flyers have that some long established players are lacking? next though, a minimum wage debate you don't want to miss. is now the right time for shesident biden to make his pu stay tuned, you're watching "squawk box" on cnbc

welcome back to "squawk

box," everybody. the futures are under a little bit of pressure. dow futures down by 233. that's where we've been most of the morning. s&p off by 27. nasdaq down by 88. andrew >> thanks, becks we just got some news a short time ago president biden asking his administration to prepare a potential executive order having contractors offer their employees a $15 minimum wage steve liesman. >> long running, since the first minimum wage was put into place in the 1890s it's been lit at this gated, studied by academics and now debated fiercely by politicians. janet yellen was originally a labor economist, they've ceased showing a rise in minimum wage

does not cause employers to get work. >> in terms of potential job loss, there's a large economics literature on this and the findings are that the job loss is very minimal if anything so i think the likely impact on jobs is minimal >> they argue that higher minimum wage will boost spending adding to growth and reduce assistance doesn't end there. opponents point to a congressional budget office report that found raising the minimum wage to $15 would give 17 million a raise and could result in 1.3 million job loss low skilled workers, teenagers could be hardest hit opponents say a strong economy and tight labor market is the

best way to raise wages. doesn't always work. couple of facts on the minimum wage it has not kept pace and wages have not kept pace with worker productivity more employees have fewer places to work so they can't go down the road to get a wage there's lack of competition of labor. still, little doubt that for some businesses, especially a small one, $15 minimum could be a breaking point for not hiring. the question is whether overall they are there and better off for a higher minimum wage. >> that's the question, steve. where do you land? you think of the minimum wage, you think of the late economist, alan kruger. how did his work change the impact on higher minimum wage, for example? >> so before kruger came along in the early 90s cea, chairman r

president obama, before he came along and did this ground breaking study in the early '90s, they believed a rise in the minimum wage was bad two counties, he found it didn't affect employment. that study has been duplicated around the country to show only a minimal effect it depends a lot about the speed with which the minimum wage is raised and also the amount that it's raised. so it was changing people's views. not definitively there's a lot of work that promotes both sides of the issue. >> steve, the comments from janet yellen, you saw the scuttlebutt. i don't know if it was 180 degrees from where she was but a

lot of people viewed it that now that she's in this administration she had to get more in line with the thinking of the president this was not her viewpoint three, four, five years ago. i know you saw some of those articles >> i did. >> the one other thing that you mentioned, obviously it mentions how far you go let's go to 500 now. and really get some growth at that point really have it filtered through the economy >> joe, i want to make a point about that which is both arguments suffer from what i call a fallacy if the minimum wage is so great, why not raise it to 100? if it's so bad, why not make it zero. >> you will make it zero. >> it should be zero -- >> for the 1.3 million people who lose their jobs, it will be zero that was the median estimate it was as high as 3.5 according

to the cbo. >> 3.7, joe, 3.7 >> when you try to manage wage or prices, either or, you're managing the marketplace by definition usually unintended consequences result. >> right. >> and it's just inevitable. >> agreed. but what if the marketplace is not open, free, and competitive, right? what if you have this issue of monoposyy. more and more people around the world, rural manufacturing, joe, that's been a big issue. if you work at a small factory in a rural area, you cannot get another job. >> we're moving towards automation either way. you could blame all of the mcdonald's kiosks on minimum wage going up too much. >> you could. >> we're headed there. >> but, joe -- >> we set up a debate. >> all right >> that we're going to talk about here >> have a great weekend.

>> you too talk about a $15 minimum wage, whether it's politically possible we're joined by mike novogratz and kevin o'leary, chairman at o shares, etfs, shark tank, cnbc contributor. how many businesses do you have investments in, o'leary? >> almost every sector and almost every job this is the worst idea i have ever heard at this time. this is a crazy idea. >> but give us -- what would it do -- what would you do with the businesses that you're running that you have employees? would you not hire people that you were going to hire would you fire people that are currently employed based on the business not making sense with wage prices that high? >> first of all, joe, let's all

admit small businesses are on their knees. we have never gone through a period like this to brace for 20% increase in our costs, it's just insane. so, yes, we would start to look at cutting employees, not hiring new people this is not the time for this idea it makes no sense. is doesn't take into account the different regional costs of living we're pouring another ppp program on the top and taking it away the minute they get it. that is beyond insane. doing the same thing over and over again expecting a different outcome. this is not a different idea let me suggest another it's not fair to criticize policy maybe i can get my esteemed colleague to agree for the next 24 months, just the next 24 months any business under $100 million in sales or

one that wants to be started by a entrepreneur pays no federal tax and is not bound any any minimum wage do that for 24 months and watch what happens and in addition, cancel the ppp. i've seen what happens since the last march and april ppp 50% of that money was completely wasted if they ever decide to shine the light on those loans, it's going to be ugly. >> mike, your idea is to pay employees in bitcoin and have that quadruple then they're making 50 bucks an hour. >> i'll say a couple of things to start we should focus on living wage living in alabama and living in new york city are different economies. that would be my first thought the bulk of people making less than the minimum wage don't work for small mom and pop, they work

for big box retail they make less than a living wage in the county they live in. that's crazy that's the home depots of the world, lowe's of the world used to be walmart until they got so much pressure quick service restaurants. these are big, big chains where people are making money. it's unethical for someone to work a 40 hour week and make $8 an hour. >> their meals are going up. target, walmart, all those places without any government intervention or marketplace if a nagling, they're paying $15 already. that's organic in a strong economy you're trying to get a bunch of workers and they can demand that pay. >> joe, amazon moved the wages, walmart's moved the wages because of political pressure because aoc screaming at them saying how can you not pay any

tax and pay your workers so little how can the government be subsidizing your employees with food stamps, right like 3 pld of food stamps. that doesn't make sense. walmart is one of the most profitable companies in the world. it just doesn't. >> you know, the market is an amazing thing. the american entrepreneur is a force of nature and by putting any kind of constraint on their decisions in terms of battling back from basically an economy that was shut down on them through no fault of their own. my whole point is now is not the time. >> the market hasn't worked for 50% of our economy for a long time the medicine that, you know, the central bank governors and treasury chiefs -- >> hold on 50% of the jobs in america come from small businesses. half the economy is driven by the ones that you just

poo-pooed. it's all about walmart no, it isn't it's all about my businesses that hire 28 people, start, grind it out, oklahoma, tallahassee, chicago suburbs they're the ones they can't afford $15 minimum wages. they're the one. >> we had our capitol attacked two weeks ago. we have this tension in america because we have -- >> what does that have to do with the minimum wage? >> it has a lot to do with it because we have a gap between rich and poor which gets wider every year and it's fraying the social fabric of our country, period that's why we have people on the right and left. >> why wouldn't you support starting businesses and giving them a tax break for 24 months. >> i would support that. >> why wouldn't you do that? >> i would support tax breaks for new businesses and i would give them a break on the minimum wage for a small period of time.

>> now you're talking. >> but that's small businesses the bulk of what i think we need to shift is how we think about employees in our bigger businesses 20 years ago and you'd get health care, you'd get the college program if there was one. today that's all outsourced. so this drive to have only shareholder value as the only beat just doesn't work anymore that's why people are moving to multi-stakeholder capitalism. >> any time the system goes under stress, any time it goes under stress, any time there's a financial question, people point to say capitol level doesn't work it has an element of volatility to it. >> you've always put rules around capitalism. we don't let children under 12

tie knots anymore. having some rule saying there's some limited amount of money, it's -- >> kevin, in the past i've looked at how well, for example, walmart shareholders have done over the years and some would say that maybe workers and labor deserve more of that share of the pie than we've had over the past 20 years. i don't know what the unintended consequences of that would be if you started trying to tip the scales to sharing more of the fruits of the success of walmart around the world with workers rather than have it all accrue to the shareholders. would there be any way to make that more equitable and lift up from the bottom without doing it through a government mandated

minimum wage >> i love that argument and i point out that a stock like walmart, which is so heavily indexed all through america, is owned by millions and millions of people and they're not all billionaires if you have a 401k, you probably own walmart. so at the end of the day if you let the system balance itself between the cost and the change of the economy and automation which you mentioned and all of those things that are market based, market driven, instead of having the governor or anybody else decide what a price should be, what a cost should be, it will work. >> for the last 40 years it hasn't be worked. >> there is no better economy on earth than the american economy. that's why cam tall comes here so you can't criticize it and say it's an experiment that hasn't worked. >> you can criticize it. it's not working for half the people in america.

>> just to point out, there was a statistic this morning that i heard on "worldwide exchange" just saying 87% of stocks are owned by the top 20% of earners in this country. i guess that gets to the inequality certainly there are a lot of people who own walmart in their 401ks, teacher, firemen who rel on that. it's the system of equality. happy to be here, so glad to have been born here and feel so fortunate. there are things we can do to try and address the inequality >> elon musk situation, he came up with a better idea, phenomenal entrepreneur, built a whole industry, enriched himself

because he owned the company should we punish that >> i don't know what that -- >> you have to get back your money. he's already facing all kinds of taxes including an estate tax. >> learned he's moving to texas. >> of course he is i think the states should compete for great ideas and businesses california is poorly managed new york is poorly managed >> california's got the biggest and fastest growing economy in america so i can say it's poorly managed. >> they don't have to worry. i guess elon will move back there. my whole point is let the best states have the best policy and the best environment that's what america is all about. competition. that's why it is the number one economy. maybe you should go to the capitol and see people attack it. >> i've lived in 20 countries in

my life. i get it that's why i live here >> i said the capitol. the capitol felt like the congo. >> we have to leave it at this point. we didn't exactly solve it, but maybe next time you're both back on mike, kevin, want to thank you guys we'll talk again soon. we'll tau again soon. when we come back, we'll dig into what's working and what's not for legacy tech companies like intel and ibm should they be takg ina lesson from much younger competitors? stay tuned "squawk box" will be right back. r satisfaction... or insanely great value. now, with t-mobile for business, there's no compromise. network. support. value. choose. all. three. t-mobile for business. ready when you are.

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let's get to cnbc headquarters and check in with jim cramer jim, what do you think you want to weigh in on this minimum wage debate? or would you rather talk about intel and ibm and what we are heard from those companies last night? >> look, as an owner of multiple businesses, i agree with mr. wonderful that people who employ people and grow are these small and medium sized businesses, the large ones tend to fire. last night was a really difficult night. because ibm did not deliver on its cash flow and did not deliver on its fourth quarter. but there are hopes that the spinoff of the businesses that are martin schroeder that look like accenture might make it more focused intel was just bad intel, pat gelsinger introduced on the call but they missed the whole psyche toll amd and the cycle is incredibly strong there is a possibility that in

2023, they will be able to catch up and even pass if you look at taiwan semi, but it will be outsourced it was disappointing because even though the numbers looked like a blowout, you could hear in the conference call that they just fell behind, and it's very sobering to just hear a management team say we fell behind >> and to be looking two years out before you can catch up. >> they need the draft and a new coach and it is a rebuilding period for intel >> so even with the stocks down this much, you who not be dipping your toe in? >> ibm, because of the dividend, it is safe, the cash flow covers it, this isn't a bad idea, just because i think that when they split off the companies, it's going to be good intel just says buy amd. they beat them they beat them. >> thank you jim see you in a couple of minutes.

meantime, intel and ibm down both sharply, we were just talking about it right now with jim, after investors were not pleased with those fourth quarter results, and take a look at the past few years, they trailed far behind companies like amazon. the question is it too late for the old tech stalwarts to find their footing? joining us is the co-founder and ceo of alternative ad free search engine. and neva is an investor of graylock and a former svp at google it is a look at how much innovation there is out there in the world but i'm curious if you think some of the older tech names can become new tech names again. a history d was counted out for many -- amt was counted out for many, many years, for example. >> the fact of the matter is, they're far behind i mean if you look at the market cap of companies like intel, 250 billion and ibm at 100, they're part of the $2 trillion caps that microsoft googles have, far

away from that, and that is massive investments of everything they're involved with, i think it is a little bit of an uphill battle for these companies. >> do you look at the current crop that's at the top, the apples, the googles of the world, and do you say ten years from now, we're going to be seeing competition from companies we haven't even heard of, or do you think the world has shifted in ways, whether, is it the innovation, or the competitive environment is such, that it is almost impossible to compete with some of these folks that are now a $2 trillion market cap >> well, i started with, you know, the company neva, a pretty private search engine, because i think you need innovation. similarly, i invest with graylock, a vulnerable group of people, and we invest in new startups, so we definitely hope and think that there's going to be innovation. it does, you know, make it hard for a new company to come be in the same space that these companies are in but we need the innovation

it's not a question of whether there will be but i think we need it. >> i'm curious, on the screen right now, we have facebook, amazon, apple, netflix, alphabet do you know of a company that you think is either capable or hot on the heels or could be the next version of any of those companies right now? >> well, you know, part of this is it's hard to make predictions like that, right but the environment changes. i think where we are today in our country is in a very different place than even three weeks ago. there are things like privacy, it matters a lot more. we are talking a lot more about responsibility we are talking a lot more about whether these companies are monopolies and whether they're preserving their moan pomonopols in ways that are not good for all of us. so i definitely think the next ten years will be very different than the past ten years, for things that are accepted, in

exchange for free services, it's fine to not have any privacy it's fine to have a lot of that taken. but more and more, we realize that comes at a big cost >> sridhar, if you're right, would you short facebook right now? would you short even an amazon or a google right now, based on that assessment? well, i think i look at it from the viewpoint of you need innovation, so both in investing, and in my company neva, i focus on creating real alternator, and it is a short term thing, we are building our companies for the long term which includes my company neeva and by having a different set of principles we can create a superior product i believe in the future with creating new and great things with the same technologies that these companies used to get so big and so good. >> let me ask you a question

as someone who is trying to innovate themselves out of this, how much do you think will depend on regulation and how much will regulation impact, this and if the department of justice called you up right now and say we're looking into google, do you think they make your job too hard? >> i mean research is one of the most important functions in all of our lives we turn to it every single day and the fact of the matter is google is a monopoly, but folks will say, there's nothing wrong in being a monopoly. the d.o.j. is focused on how google uses agreements to preserve its monopoly and to that extent, if it makes it easier for a company like neeva to get in front of you, with the option when you open up a browser for the first time, we think that is progress, and we think that will definitely help. >> sridhar i want to thank you for your perspective this morning. appreciate it so very much and hope to continue this conversation with you in the future no doubt. >> thank you. let's take a quick final check on the markets on this

friday morning we are in the red across the board with the dow looking like it will open down about 216 points nasdaq off about 73 points and the s&p 500 looking to open down about 25 points. have a great weekend, everybody. and make sure you join us next week, on monday, "squawk on the street" begins right now good friday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer our futures are under some pressure thanks in part to ibm and intel. even beyond that this bearish macro call out of b of a is making waves along with more republican resistance to the president's stimulus pitch the road map begins with the intel and ibm drag on stocks, tech, a pandemic favorite for investors but the two tech giants failing to impress with their quarterly results. plus, the biden economic agenda, turned to nominee janet yellen, leaving the door open to a tax hike, and bi