johnson & johnson by next week >> that's what i'm waiting to hear about can't wait to hear they'll be able to ramp up a lot of production really quickly we need that third dose, and i think there's some other good news about additional vaccine ramping up from other companies too. all good news. wait and hear. anyway, thanks for joining us today, folks mike, it's good to have you here too. tomorrow we're right here. in the meantime, it's time for "squawk on the street. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber q 4 earnings heat up plenty of optimistic vaccine news road map begins with a focus on fundamentals dow components 3m, verizon, j&j

among companies reporting this morning. stay tuned for interviews with mike roman and optimism president biden ups the daily jabs target. and j&j expects trial results as soon as next week. and, of course, we're still watching short squeezes. yeah, short-sellers are down $91 billion in january of course, sqgame stop is one o many soaring on the engineered short squeezes we spent a lot amount of time discussing yesterday. >> yep, and we'll discuss again today. jim, you said it best before the top of the hour. this is a nice opportunity to maybe set aside the game stop information and stop on companies that have broader implications for stocks. >> it's fun to focus on game stop it's a great diversion

it's like a wwa, but here's the deal when i look at the numbers at j&j and raytheon and 3m, i say how can they pull it off when i look at ge, i'm thinking houdini, miraculous. this is incredible can i just say that when you look at raytheon and you look at general electric, has it occurred to you that nobody is flying and yet, they're crushing it when it comes to aviation >> well, crushing it yeah give us more, jim. when you talk about aviation, are you speaking about which company or both? >> both. >> ge obviously succeeded in part by cutting costs in other areas and by real actual growth in renewables in that area >> and raytheon cut a tremendous amount of costs. i'm saying that if you adjust the baseline it's surprising they didn't have a dramatic falloff versus last year which was an amazing quarter larry culp, you correctly point out the wind business, the

hydrogen turbine business, these are growing businesses now health care growing business the free cash flow of both these companies, raytheon and ge, rather surprising. carl, the tone is being set once again by companies that are doing much better than we thought. and it makes you feel like wait a second the market went up a lot maybe it should have i'm not talking about gme, game stop, not talking about bed bath and beyond or blackberry these are big companies, and carl, these ray sounding numbers. >> it's true, and it takes us back to the narrative we've been talking about for months nature is a big corporate cost setting reset. and then to your point about industrials and health care, look at 3m's individual silo, safety, industrial up 11 consumer up almost 10. health care up better than 6 that's a good example. >> when i look at those, we kind

of looked at the same numbers from 3m and seeing negative. seeing minuses mike roman is beginning to work his magic. i say magic. it's just because david is right. it's cost takeout. by the way, i don't know how much -- how it's even possible that gregg haze is taking out more cost, but you look at these businesses and you're seeing organic sales grew and medical solutions for 3m organic sales in aero space. let's say there's a pause in 2021 2022, there could be some amazing, reasonable expectation about why the multiple expanded for the s&p 500. >> there could be without a doubt. and this is just -- these are just a handful we have so many more companies

this morning whether it's verizon or j&j or american express. i want to come back to this. let's not forget raytheon has a lot of jobs ge has a lot of jobs so when you talk about a recovery in the economy, 16,500 head count reduction roughly 20% of commercial aero space reduction at raytheon. head count and structural. >> they had to they had 45 -- >> they all took pay cuts. >> more than 55% reduction hiring freezes all of which they needed to do to be able to complete their $2 billion of cost initiatives they undertook last year. obviously this is things we'll discuss with gregg hayes we always appreciate him being forthright with these issues, but let's not forget, there's a lot of jobs that are no longer there. that's why some of the numbers are looking better and being aflawed by investors >> they also cut r &d

and they had actual cost takeout. >> and there's synergies as well >> but david, you're right are they growing their way out of this situation? no, they're cost cutting their way out of the situation is ge growing out of it? i could say they're cost cutting. 3m is growing out of it. j&j is doing its thing but i think these companies are remarkable carl, i'm not saying celebrate the earnings at a time that a lot of people are losing their jobs i am saying i can't believe how much money these companies can make when you look at j&j, it was only up a dollar originally. has anyone read through the line items? look at this company it was down in that dip. the dip was caused by talc it was the last buying opportunity. now they're teasing us on the -- well, that's not fair. they're going to have some information, but 100 million of vials? i'm coming back to my glut in q2

of inoculation, a glut of vaccines >> yes i want to give you credit, jim the cfo this morning talked about data that he says should be coming next week. here's what he said on squawk. >> with the trial itself, right? we plan to report out by early next week in terms of our results. as you know, it's a very robust 45,000 person study across eight countries and three continents we do have some of these new strains potentially captured in the data as we had sites in south africa as well as brazil so we'll let the scientists do their work there >> wow >> there's been a lot of hand ringing about j&j and certainly merck didn't help, but you were confident they'd come through, and the most important thing on j&j, one shot. >> yeah. i've spoken to their scientists who really didn't have time to speak to me so i don't want to say that i got the expansive,

but it is pretty clear, their level of confidence was high obviously the question is can they do the 95%? i mean, i took the moderna, and i listened to once again to the unbelievable work that meg is doing. felt quite confident the k you imagine if j&j has even 90% in one shot we save lives and do real things particularly if we expand testing and make it so if we find out we're sick, we get the regeneron. i'm starting to feel like you know what? that wall that i'm looking at should have more green, not less because there's a lot of things that would go right in the forth quarter if j&j delivers. david, there is some -- do you remember, david, a year ago when people said it's got to take at least four years because the mumps vaccine took four years and what could have been easier to conquer than mumps? this thing is a growing virus that is far worse than it was. and yet, these people come on

with a degree of confidence that why bother why don't you say yeah, look at that david, science is triumphing i was made fun of for saying that in the new york times they said i was like otter at faber college in "animal house". i don't feel like that, but i feel like a person who bet on these companies. and it's been proven to be right. >> you have been correct, and you know that drunk fat and stupid is no way to go through life and you've made it a point not to >> i'm on the couch. i'm one of those three move over. they were the smart guys. >> there's no doubt. and listen, we talked a lot about this has been a dark, dark period coming up on soon it will be a year. but one of the bright shining lights has been science's ability to get a vaccine to the market far more quickly than anybody might have anticipated a year ago >> yeah. >> and by the way, no refrigeration on j&j another plus for -- remember,

moderna needs a fairly low temperature. pfizer needs a really low temperature. j&j, i believe room temperature? right? >> there was a refrigerator next door i got the moderna. to me it looked like hey, one of those refrigerators you have in a college dorm but what is incredible is that the j&j means you go to cvs and wall greens and get a shot cvs has done the nursing homes there's capacity to get this thing done don't forget the david tenners of the world who team up and take over stadiums and do 10,000 a day as opposed to the 100 day. this is an opportunity for people to say you know what? president biden has gotten a better hand, because he's going to have a lot of vaccines and they can start thinking about a bridge that's not too far. >> they have to get it out as soon as possible right now as you well know, they're not able to stage those large venues the way they hoped to because they don't have

enough vaccine on hand and people are still having a very difficult time getting appointments and everything else wow. we're -- ending a little bit early. ge's performance is very strong. i want to come back to it. you can't blame the companies were trying to survive in the face of what happened to aviation >> that's my point thank you. >> i don't want to say that oh, they're horrible actors. they had to do that. >> and we haven't even talked about elon musk and etsy heavens to etsy. carl, it's brilliant >> etsy, we'll talk some beyond meat we'll talk to gregg hayes of raytheon and we'll talk about the rise, the amazing impact on short-sellers. packed hour. don't go anywhere. back in a minute turn on my tv and boom, it's got all my favorite shows right there. i wish my trading platform worked like that. well have you tried thinkorswim?

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game stop's wild ride. up again short sellers are down $91 billion this month and game stop is obviously leading the squeeze. bob joins us this morning to talk about it. some staggering figures here, bob. >> yeah. you know, short sellers have obviously picked the wrong stocks in january. i think this is an important teaching moment about short sellers? general. the real enemy of short sellers

is not robin hood. the real enemy of short selling has been the federal reserve and the oceans of liquidity they've been providing and to a lesser extent the stimulus in the last year it's resulted in big losses. they have been losing money for many years most short sellers never lose money despite the fact that we have some super stars on last year they lost $243 billion. in january as you noted, $91 billion. is this a little or a lot? shorts at any one time are about 2% of the market value about 2% of the market value is short. we have maybe a $40 trillion stock market that's about a trillion dollars short. you lose 240 billion of one trillion, that's a 25% loss. that's a pretty bad year for most short sellers and yet, we know that they have a lot of value. they provide a lot of value overall. they provide hedges to long portfolios and provide liquidity for equities and the derivative

traders out there who take the other side of the options trade. a lot of value here for the shorts >> bob, it's david we always need to remind people who don't fully understand it. the unlimited downside of shorting stock you own a stock, particularly not on leverage, it can only go to zero. but you could short it $50 million for the game stop and be down $150 million, and that's what mr. plotkin at melvin is facing in terms of their decision and then go and get more amazing story, really, more capital from sac and citadel to continue to be in there and make sure they don't have to cover. it's fascinating >> yeah. and it makes it interesting. because what happens here when you get those kind of blowouts is actually, it becomes harder to borrow the stock. in a way it puts pressure on the different parts of the market. if you can't borrow out, you'll maybe try to put pressure on the

market, and then one of the interesting questions here is what's going to happen with, for example, this one, two punch, they have seen the short sellers have seen. the ocean of liquidity that's made it difficult to make money. at the same time, you have an aggressive buying of out of the money calls that's been occurring. that's a one-to punch for the short sellers. i think most traders i talk to say what's going to happen, they say call option prices have to rise a lot more to sort of deal with this entire issue and it's even as the shorts cover, there are new shorts coming in. it's not the death of shorts nobody said to me yesterday when i was calling around and said this is it the shorts are toast there were new shorts coming in in places like the financial area in the last few days. >> it seems to be a new strategy i wouldn't say new strategy. i feel like we've seen this even from the late 90s with the yahoo chat boards but there seems to be a new focus on it i saw a stat this morning i think has been vetted. stocks with short interest of

more than 5% and this is from the retail sort of heavy option trades of those stocks are up 40%. if you have 5% or less in terms of short interest, your stock is barely up this year. >> yep so yes this is the one, two strategy. in a lot of ways the 90s chat rooms that you and i covered are very much the same in that it's the same behavioral psychology and dope mean they force off in the brain, the same herd following you have the same trend reinforcement all these behavioral economics terms is the same. but at the same time it's very different. remember, when people used to have the old dlj accounts back then, it was very cumbersome and took awhile for people to get confirmations. 20 minutes the next day. this is very different the technology is very different. it's a lot easier. you're sitting alone or sitting with your friends, trading stocks on your phone now instantaneous confirmation, and it's the same thing doing

fanduel at the same time there's something that's different compared to the 1990s even though the behavioral economics, the herd mentality is still the same >> you know, bob, i was watching the action yesterday, and friday another difference between these people and the 90s is they're more sophisticated let's give them credit the strategy of basically buying these calls and not allowing people really can't be able to hedge is a brand new tactic. and they knew exactly what would happen if they did it. although yesterday a lot of people lost money because they bought calls for $50 for the 150. so can you talk about the new strategy of breaking the shorts and the market makers and how much money was lost by people who believed this thing was going to go 200, $300 yesterday? >> yeah. well, the first problem, of course, is yes, it's the strategy of buying out of the money calls has been working but remember something, jim. this worked in 1999 until large

tent, 2000 remember that day. >> true. >> never confuse an up market with being a genius was a favorite phrase around that time so i think that's the most important thing to recognize right now. that we're dealing in an up market, guys and this is going to quickly change strategy as soon as we see any kind of significant down market >> yeah. more dollar valium in the last two years than the last two years for ge thank you, bob we'll take a break here. a lot to get to included upgraded draft kings we'll dig into more. don't go anywhere.

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a mad dash before we get to the opening bell, about seven minutes from now hort snn. >> yeah. a lot of people want to focus on a raytheon or j&j or 3 m they're all good ideas but dr horton is america's largest home builder, and homes are probably the greatest generator of earnings this quarter as people leave the city and go to the suburbs. david, 56% increase in net orders that is staggering there are only two months of inventory in this country. the earnings here increased 84 %. the gross margins are good, too. david, this is one of the most -- really, just not told stories which is the impact of

co-vid on the exodus of major cities to homes like dr horton, and toll brothers. that told me it's the best it's ever been. >> listen, you know, everybody weighs in on this as to whether this is a seminal change or people are going to sort of slowly but surely kind of come back to urban area over time once things get back to normal i don't know the answer or whether this will just continue. >> well -- >> give has been ability to work from home has been greatly enhanced >> yeah. remember, nakesha, recommended by evercourt in a spectacular recommendation bullish. but he has convinced me we're all going to be in the hybrid model. i think zoom said the same thing. hybrid meaning we're not working in the central office today. we listen to what larry fink is saying you want to cut back on the way the amount of pollution? david, what you do is you have a

hybrid model if you want to have a better life, you have a hybrid model. dr horton gives you the chance to have a hybrid model, spend time with your kids, have a better life. and not hurt the environment >> well, that's not -- living in the city is much better for the environment in many ways than living in a larger area. without a doubt. cities are much more efficient >> well -- yes >> speechless. an opening bell in a few minutes. >> i'm glad it's time to go because your promotional city stuff leaves me cold >> i'm just giving you a fact. >> greg hayes knows so much. we'll ask him about the efficiency of urban versus non we have that coming up

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watch bed bath today jim, i know you love to kick it down ubs cuts to sell our call is to take profits. the recent move has tilted the risk/reward to the downside. they say the problems will take time to fix.

>> look, this is one of those situations where this stock would not be where it was if it weren't for the fact that there was 67% short position, and there's been kind of a big dispute right now about whether the people on red it, the wall street bets whether they're targeting the shorts or targeting just companies they genuinely like, and we know that there's a short position again with the same company. a put position, same company that has game stop it is yobd me to think why people would short it. but the spike yesterday, at one point it went to 40. that's not right the company is going well. they have a long-term plan, but david, when you see this kind of thing, you know that management is not going to endorse where it is or say wow, our stock is too high the earnings can't get you to where this is. that does matter >> the question is when.

the question is what is that certain point? none of us know. >> the companies are all -- >> there's no argument for game stop being up $7 billion >> how many times have you called game stop >> what do you mean? >> i call them almost every day to give me insight, but the bed bath guys are doing a great job. is the stock up over time? yes. should it go to 38 or 40 no be careful betting the short is going to get you where you have to go. this is not beyond meat. holy cow, talk about shorts. >> yeah. beyond meat was up 20% premarket. then 30% as they got the new partnership with pepsi to develop a platform and innovate on plant-based products over time that's a lot of marketing know-how and manufacturing know-how by pepsi. >> i was going back and forth with ethan he's a genius. what he believes, and this is

the ceo and founder. what he believes is that this may be the most important deal, and the reason is because pepsico is everywhere, and it's going to be for food, for snacks all right? that is what we want and also for drinks. should it be up this much? once again, you know, beyond meat, it has a 30% short position everyone thought it was losing a lot to impossible. and of course, it did have a problem with the office space being closed in cafeterias not our cafeteria, which, by the way, has excellent stuff, but i do think this is something the shorts weren't ready for it's been many years in the making it's the most substantial partnership you could have it's the number two company to necessarilies. they did it. they dead it, and they did it because they have a vision a vision >> which is? >> that everybody in the end is going to eat plant based because it's better for the environment and tastes good.

it is better for the environment, you know, than other stuff. >> yes i do >> why are you -- so -- about this deal. >> which deal? >> the meet deal >> yeah. >> laconic >> i am? i don't have that much to say. >> no, you don't care. >> that's not true >> this is an innovative snack and beverage product i have the pepsico and beyond meat release this is what people have been waiting for. a demonstrable endorsement from a large nonrestaurant company with broad distribution, pepsico. i have to -- ethan brown is terrific now i know he's dealt directly with la g-- beyond meat is a visionary. those who believe in ethan brown are being rewarded today don't be too greedy, but

congratulations. >> laconic go google it >> i'm trying to get a quote here >> what's not laconic is etty's share price as well. up 6%. it was up more than that in the premarket, but early today i think it was, elon musk, maybe it was last night said i just love etsy. said he had ordered a marvin the martian product. >> yes, we used to have president trump tweeting and now we have elon musk tweeting positive etsy is -- etsy paypal and square and shopify represent the new economy. american express is actually getting in there, because they're partners with paypal those are the three companies that i regard as unstoppable i got to do a piece about that, david, on mad money.

etsy okay square and paypal are defying gravity, but not because they're short squeezes it's because they are the way that the millennials and gen-xers like to buy they don't like to buy from the man. you stick it to the man if you buy from etsy. >> is that part of the appeal? >> yeah. very much so, sticking it to the man. >> they also like it because of their growth prospects, i guess. apparently they want to stick it to the man >> they want to stick it to the man, and don't forget. i wear this thing. this is hideous. >> that is hideous >> it's hideous. have you seen the beautiful, beautiful unbelievable masks that you can get on etsy of which they've done hundreds of millions of dollars? >> i have seen some of them, yes. not all of them. >> and josh silverman, another person who has thought about the environment, why am i bringing up the environment because we just had four years where we wrecked the environment

and i'm thinking maybe we can come, you know, mother nature is saying hey, look at me >> that would be nice. by the way, larry fink interview with andrew sorkin on "squawk box" earlier >> our own andrew sorkin >> nobody els. he's ours. fink taking it to yet another level in terms of esg and the importance of so much that is happening in asset allocation. and where the focus is going to be for those who are receiving funds and he talked about it i don't know i think we may have it, guys we, of course -- we haven't mentioned spaces yet today 9:35 i'm mentioning it now in part because so much of the capital has gone into companies that are development companies that are developing things like batteries, for example some of it is speculative, but take a listen to mr. fink when he's talking about this part of

the market >> a lot of money that we are seeing that's moving into this space is going to continue so for those who think we may have a bubble, there may be one or two stocks that we may have bubbles, but what i see is more and more companies and management team are trying to move toward this space faster and not slower and so we'll know in the next five years, you know, there will be some failures i'm not here to suggest that everything is going to be rising perfectly. like in everything else when there's a new trend, we have huge winners and then we have some losers. and we will have that in this space, too >> tesla, by the way, almost near an all-time high. $883 a share so $845 billion market value roughly. >> david, the charging station space is for real, and i know you love the name of one of these which i think is a great one. climate change crisis real

impact one acquisition corp. >> that's the one that did -- the other day. it moved up a great deal on the announcement of that deal. >> all of these have ev box that's tpg you're familiar with tpg they're not a fly by night, not dreamers >> nope. >> and then ev go >> we've talked about quantum scape. these are on the battery side. how much is a chemistry experiment and how much is it really going to be able to be brought to bear at scale >> the three i mentioned had real revenues. you've got ev box. ten-year-old dutch company 190,000 charge ports across 70 countries. that is anything, anything but pie in the sky >> no doubt. it's here to stay. at least for now >> there you were refusive, not laconic >> thank you coming up after the break, raytheon technologies, get ready to start the interview with ceo

greg hayes he's live and first on cnbc. and a quick bond report. look at how treasuries are fairing this morning yield on the ten-year is stabilizing a bit. we're just a bit over 1% the imf raising the u.s. growth forecast for 2021 up two full points it sees 5.1% growth. the global outlook revised higher the funds chief economist says much depends on the race between a mutating virus and vaccines to end the pandemic over in europe, political uphooefl in italy. the country's prime minister submitted his resignation to the president who will start consultations that could lead to a new government or snap elections. we're right back hi, i'm a new customer and i want your best new smartphone deal. well i'm an existing customer and i'd like your best new smartphone deal.

oh do ya? actually it's for both new and existing customers. i feel silly. but i do want the fastest 5g network. oh i want the fastest 5g network. are we actually doing this again? it's not complicated. only at&t gives everyone the same great deal. like the samsung galaxy s21 5g for free when you trade in.

raytheon technology has an earnings beat this morning that's actually too skefbtive with a great earnings beat up 6 % joining us is the ceo of raytheon technology, greg hayes. it's always great to see you on

"squawk on the street. >> good morning, jim how are you? >> i got to tell you, greg, free cash flow generation is extraordinary. much better than people thought. how are you doing it >> so it's a focus we started out in april and we awe it unfolding and said we have to do something dramatic. we said we're going to take 4 billion of cost per cash actions on top of 2 billion of cash actions. the guys overdelivered we tau about $4.7 of cash reduction actions. reduced people costs, reduced e and d and reduced collection from our customers end of the year in the fourth quarter, after making $800 million pension contributions, we were scheduled to do in 2021. a really solid year. as we think about '21, at least

$4.5 billion i think the focus on cash was important. the guys got it done >> when i listen to that and i know you didn't need to make the pension, but that was smart to do, i figured there was enough leftover that you could do a substantial buyback for shareholders >> we've had great liquidity i think as we ended the year with about $9 billion of cash on the balance sheet, we got another billion plus when we closed on a divestiture. we're sitting on about $10 billion of cash. we're going to start out soon with share buyback i would expect we'd do that if not later this week, then next week we have a place holder for a billion and a half of share buyback this year, but again, we'll try to be opportunistic. we have flexibility. we don't need all the cash on the balance sheet. i think we have a $5 million debt reredemption. we're going to try to load up on

share buyback. we see it as a great value and great opportunity as we see the markets start to recover in commercial aerospace >> a lot of people felt that after what happened with the pandemic that maybe the hand you gave shareholders with raytheon, obviously, you spun off elevators, otis, and carrier that maybe it would have been bet tore keep them together because then you wouldn't have been hurt to badly by aero space. that was not the case, was it? >> look, the decision to spin off otis and carrier was to unlock the potential of the business we wanted to create an aerospace and defense company 100% focussed on that marketplace at the same time letting otis and carrier focus on their businesses and they're done a tremendous job. i think we've unlocked a lot of value. if you look at the businesses

today, they're both valued around $35 billion that's a lot of value creation by doing the stints. and frankly, the conglomerate, i think it's something that's the time has come and gone, and focus is more important. diversification, you can buy the s&p 500. if you want focus, you can get individual stocks. that's what the strategy was all about. >> yeah. you're going to live and die based on that strategy commercial aviation. where are you in terms of your thoughts about a true recovery there? how many years are we looking at until we get back to sort of normal >> well, i guess the question is what is the new normal with the office of the future and people working remotely but our view is you're going to see a gradual recovery it will come first on the domestic markets and then lastly on the international if you think about it, domestic travel is down about 50% with international down about 75%

and so the first recovery as the vaccines become available, you'll see that in the u.s. and see a gradual recovery in the second, third, and fourth quarter of this year probably not back to normal levels of domestic travel we think until late next year, late 2023 when the vaccine is fully available. international, probably 2024 and again, you have to kind of unpack that international piece and think about that 70% of all air traffic is for leisure. that will come back more quickly. the business piece, that 30%, probably half of that is essential travel where people have to go out to meet with customers. the other half is more subject to what's going to happen in the marketplace with some of the companies. but again, we think that's probably at 2024 before we see a full recovery of the international traffic. it's got a ways to go. >> yeah. and many of us have those questions about bids -- business travel, how much of what was the case will fully return

one area that seems to be potentially poised for growth is space. and i'm curious. i read a long article yesterday in the new york time about our space race with the chinese who are coming up with lasers to disable our satellites and lots of other things. how significant is that? and what is it going to mean for your various product offerings, i guess, that are classified but are still potentially going to be bought by the u.s. government >> yeah. space is one of those unique areas where we're going to continue to see growth for the next five to ten years we're uniquely positioned. this is a legacy raytheon space business in terms of our communications and our sensing capabilities nature is the ability of satellites to monitor what's going on on the ground. it is it's processing all the data coming off the satellites we do that within our raytheon information and space business but we see a lot of growth we closed on an acquisition tha

gives us complete service for low earth orbit satellites the other part of space you have to keep in mind is there is a lot of threat in terms of talking about lasers, way to disable our satellites what you need is redundancy. that's why we think there's going to be such good growth prospects in space you have to have redundant system and replenishable systems you can put up at a moment's notice if you lose a satellite we have a great position with our sensing and coms ability >> greg, there are a lot of people who believe when military takes over spending. i always felt when democrats take over, they do a little more -- and software, let's call it that and less on hardware, particularly trying to make it so we're not penetrated by let's say the chinese. i know that they can jam us. if they jam us, then we're not going to be able to defend taiwan what can you do to prevent

jamming? >> so we have some unique capabilities in our collins business as well as in our legacy raytheon coms business that allows us to do frequency hopping and avoid that jamming capability that the adversary has. these are pretty unique capabilities can't really go into a lot of the details other than to say in a denied environment, a place where there is jamming going on, we the ability to have active communications across all the services it's taking all the com systems and making sure you can get the war fighter, the information he needs be it from a satellite or airplane or be it from a ground station. >> my question of one of the things that i'm trying to get a lot of people to ask about, we talked about it in the previous show there's been a lot of cost cutting which does mean, unfortunately, layoffs i know you took a pay cut. one of the things that your company is famous for is putting

people through school. you've always been one that i think by after the u.s. government, i don't know anyone who has put more people through school is that something you cut back in all the other cutbackss >> we had some very tough cost actions. we had to reduce or work force by roughly 21,000 positions las year as the volume disappeared we lost $13 billion of revenue really, really tough story what we didn't cut were two things one is the technology investment in the future and the investment in our people in the future. we kept the employee scholar program. we have had 40,000 people go through that program to earn their degree, whether that's their bachelors, masters, phd investing in people is one of the areas we continue to make sure we differentiate ourselves in it is the way of the future. you have to continue to be learning every single day. and we value that employee

scholar program. >> do you think it's right to say that there is two halves this career? there is the pre-vaccine and post-vaccine these airlines were kept alive we get post-vaccine, i think we get post-spend if we get post-spend, we got a lot of money for roller skate raytheon is that a correct way to look at the company? >> as you think about 2021, what y you are going to have is the first quarter, which is going to be a very, very tough compare. you have hundreds of thousands of new cases of covid-19 every day in the country, across the globe, and you are going to see, i think, a very, especially since last year's first quarter was not im palktded by covid, a very, very tough compare once that vaccine is out there, once it's widely available, what we expect is a recovery in our after market of about 10% per quarter compounded second quarter, third quarter, fourth quarter so i think you will have a very strong back half of the year, but that's only after a very tough first quarter.

and that's really the way we are planning this. nothing has indicated that the vaccine rollout is going to slow down in fact w he see it accelerating across the country, over 1 million a day getting vaccinated the number of vaccines is growing. we think the j&j vaccine should be here shortly. those are positive signs towards herd immunity. >> back to this talent question. i mentioned the chinese in my earlier question to you. i mean, they are a formidable foe in some areas. obviously, i know we still sell things to them you run a business that sold a lot of elevators to them do you have access to the talent you need can you get a hold of the scientists you need, particularly in light of this sort of global competition we are talking about with the likes of the chinese who are advancing very quickly >> so if you think about our work force, 190,000 folks working for raytheon across the globe. about 60,000 of those are engineers. we continue to hire. and we have been very fortunate in the past year, we hired about

5,000 people into the engineering work force and program support. we have not had an issue raytheon, we view ourselves as very attractive employer not just from the educational advancements, but the technology and mission of protecting the war fighter, defending democracy, connecting the world. those are powerful motivators for our people and i have not seen an issue whatsoever of trying to attract or retain talent that will continue to be an important component as we think about the next couple of years. >> greg, it's great to see you obviously, you are coming from remote i am going say, you look great, my friend. you lost some weight you are not supposed to say that stuff, but what the heck why not? >> appreciate it. >> congratulations on a great quarter. good to talk to you. greg hayes ceo of raytheon technologies >> raytheon the second biggest s&p gainer behind ge big morning for industrials.

we will talk to 3m's mike roman in the next hour about the quarter and the pandemic stay with us

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there he is, runs the public investment found of saudi arabia some 400 billion and they are talking about doubling it in the next five years. he will be our guest in the next hour on "squawk on the street. sofi made it so easy to pay off my student loan debt. they were able to give me a personal loan so i could pay off all of my credit cards. i got my mortgage through sofi and the whole process was so easy. ♪ express yourself ♪ ♪ ♪ express yourself ♪ ♪

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>> maybe it's an opportunity, rockwell automation. >> busy day. we will packed a lot into 60 minutes. see you tonight. "mad money" 6:00 p.m. eastern time good tuesday morning welcome to "squawk on the street." i am carl quintanilla with morgan brennan and david faber s&p record high. earnings season kicks into a higher gear. some of the big names that ahave reported, 3m, ge the biggest s&p gainer, j&j and verizon. we will take a look with mike roman and an exclusive with voters' hans vestberg, that's next hour on"squawk alley. we watch those, in addition to all of the defense companies, morgan. >> yeah, defense which is what i'm watching today. i know you said that raytheon technologies interview a few moments ago. it is a big day for the industrials, including some of those largest defense contractors. lockheed martin which is the largest u.s. weapons

manufacturer reporting this morning as well. 20% increase in profit, but still a miss versus street expectations a rare miss, as rare as a black swan sales 7 perseverance driven by aeronautics, including the f-35 fighter jet. rotary missions, sikorsky, missile defense, things like that, and space which is something we heard about from raytheon technologies as well. guidance for lockheed in line. cash guidance was hiked. a backlog of $147 billion, but that stock is under pressure right now, and it's adding to the weakness in lmt and defense primes the past 12 months with those names down the stocks down double-digit percentages over the past 12 months raytheon i should add is really i think bouncing because of the outlook and expectation around

recovery and commercial side of the business with the defense companies, these stocks held up relatively better than other industries in the midst of this covid-19 pandemic we have seen earnings growth, strong free cash flow, dividend hikes or dividends maintained. we have seep big backlogs continued. the question is, why the prolonged weakness i think it's because these stocks and analysts on wall street just across the board certainly have been writing about this for a number of weeks now. these stocks are trading on the expectation that a defense spending peak is already in at least here in the u.s. as you have the biden administration really getting to work on the wish list for the next few years. you have a new defense secretary in place as of last friday really juggling that progressive political pull to see some pretty steep decreases in that top line defense number versus what, of course, we ne is that burgeoning national deficit. that being said, i think that's the overhang on these stocks

with that being said, shifting priorities when you go below the top line and it will be those areas, key areas of growth that i would expect we will hear some comments from some of the defense contractors this week on regardless of policies in the case of raytheon and lockheed, hyper sonics and space. i am speaking to, david, the ceo, the new ceo of lockheed martin, a little bit later today. i will be reporting those headlines likely in the 1:00 eastern hour other names on top, general dynamics, northrop grumman and boeing has a commercial business and also a heavy defense and space portfolio. >> it was interesting listening to greg hayes talk about when he really fully expects commercial aviation to come back. obviously, i am referring to boeing and its future, what he said i guess late '23 and '24 in terms of fully back. so you can imagine how they are

thinking about things. and then space is fascinating. i leave it to you, but, man, i mean, the stuff going on up there in terms of competition between satellites and potentially warfare which seems somewhat unfortunate but possible is also kind of scary. >> yeah. and commercial space, i mean, virgin galactic a key example has certainly captured the minds and interests of investors in this market, but many of these defense contractors also have commercial arms and you can't not, you know, you can't not overlook the fact that lockheed is buying aerojet rocket dine because of that space portfolio, carl >> meanwhile, guys, the etf embracing spacs with open arms morgan creek capital management and excess financial launching a spac etf it this morning the etf includes pre-and post-merger companies. joining us ceo former credit suisse ceo welcome back congratulations. >> thank you very much great to join you guys

thank you. >> spxz. talk about the instrument and sort of give us a thermometer of where we are in this amazing new narrative that is taking the markets by storm >> well, as you say, our view isis the spac markets have taken a dramatic transformation in the last sort of 12 to 18 months i think morgan mentioned virgin galactic our view is that the spac market is becoming the market of choice for high growth transformative companies. so think virgin galactic, think draftkings, and as cusuch it's really interesting markets to vest in. if you want to participate, it's hard to do directly, particularly as a retail investor many hundreds of companies, some preannouncement, some post-announcement. very hard to do unless you are a sophisticated investor give investors a liquid,

transparent, diversified, professionally managed vehicle to invest and sort these issues out for investors on a continuous basis being along these kinds of companies makes a lot of sense obviously, these kinds of transformative companies have changed the landscape of the world and the investing landscape as well, and we think the spxzetf will be a good place to invest. the spac markets are on quite a run, the volume of issuance, the performance of many of the deals has been quite good. and that, obviously, unlikely to continue forever there are cycles and this will be one as well but we think it's a sector that's here to stay. i mean, there are real reasons, it's not a fad, there are real reasons why this is an important market for issuers, for investors and it comes around to the fact that it's just a different format in which companies, particularly

high-growth companies, have a better opportunity to tell their story during the period where they are going public. that's something that's going to be, you know, it's going to be a very important sector. i mean, as an example, 80% of the spacs in the past year have been industries shaping the future like electric power vehicles and space. >> of course i mean, you mentioned that there will be losers of course, we are bracing for that but because it's so new, i wonder how you think those lose lerks pland and whether or not you will feel the spac space be on the defensive in the early days of things that go wrong >> well, i think, you know, in many respects it's not going to be any different from the traditional ipo market there are companies there that have done extremely well, gone on to be huge companies, companies have not done as well. you will have the same thing in the sfak envpac environment. that's one of the reasons, in our etf, you know, the concept

of active management and professional management is important because as you do have -- we think actually the growth in the market is something very positive because you have more spacs means you have more opportunities for companies to go public so it will actually be a virtuous circle there. there will definitely be winners and losers so it's important that you basically position yourselves to have a higher share of the winners and losers, obviously. >> i want to dig into that a little bit in terms of the winners and losers what is, i think, different be than the more traditional ipo market at this point in time is that you have a lot of much younger, less mature companies that are coming to market. i mean, i am going to use virgin galactic again as an example here this is a company that has a really interesting story and a very long-term story but it's not yet generating revenue you can make similar arguments in terms of revenue flows for the clean energy tech or ev names coming to market as well when you talk about the sophistication that comes with

an actively managed fund, what does that look like? how do you determine which of these names is really going to make the most sense from a longer-term perspective? >> a good question and as you is a i, i think just like the ipo markets as you know well, they cycle as well between sort of earlier stage companies and later stage companies. for instance, in health care you will see very hot ipo markets, you tend to get earlier stage companies. so there is a cycling that happens on the ipo side. but i do think it's important, as you mentioned, you know, first of all, we have a portion of the portfolio is going to be preacquisition companies there you have to have sponsors, you have to look at the verticals that they are focused on those are very important components there and then separately after the acquisitions are announced, and clearly looking at those companies that have the positions that will allow them to really transform the markets and take major positions in that is something that's important. so picking those winners is clearly something that will be

important. >> brady, it's david i was going to ask, and i get, picking between sponsors and making decisions pace based on their track records preannouncement makes sense, but eventually when it's post, they are just public companies. i mean, you know, whether they derive from a spac or not, conveniently over time it doesn't really matter that much, does it? you are just sort of choosing and making basic investment decisions from what will be a fairly broad slate of companies. >> our view is that [ inaudible ]. sorry. i think our view is that, actually, you know, the process of being able to take positions in those companies from the preannouncement selection of companies is something that actually is quite helpful b because that gives you the lead in to those companies. we think the sector is one you are seeing a lot more growth company [ inaudible ]. actually focusing on that, focusing on the spac drive

companies is something that we think is going to actually lead to really interesting growth portfolios going forward so following those through the acquisition, even though as you say, they are now public companies, but we actually think that this whole spac ecosystem is going to actually generate a lot of big winners in terms of those transformative companies that will go on to be huge and, you know, look back over the past 20, 30 years those are the companies that make the big difference with amazon, grooug and we think the spac market is going to be rich with those opportunities. >> brady, something our audience needs to understand and hopefully will better with your help it's good to see you again please come back. >> great to see you. thanks a lot. after the break, we are going to have a rare interview with the governor of saudi arabia's public investment fund yasir al-rumayyan. announcing plans, by the way, to grow that fund's assets under

management to a $1 trillion over the next five years. stay with us ♪♪ ♪♪ ♪♪

. the public investment fund of saudi arabia announced a new five-year strategy this week that aims to grow the fund's asset under management to a $1 trillion by the end of 2025. joining us now to discuss its investments, its outlook for the world economy as well, and of course saudi arabia is the

governor of the pif, yasir al-rumayyan, great to have you with us, your excellency the basic plan lear. how do you get from 400 billion to a tlil orillion over the nexe years through growing assets or do you need significant contributions from the saudi arabia government? >> you mentioned two things that we are planning to get to the $1,070,000,000,000 to be exact we have grown our assets that's the first thing the second thing is whatever we receive from the government in form of cash and other assets, and we have been getting some of these assets and cash from the government the third thing is the dividends that we are getting from our investments, and the fourth thing, of course, is the

financing that we are getting. and we have been very much active in financing. having said that -- pif has three of the major projects like the red sea project, and which is practically nothing so we think in a few years, once parts of these projects get operational, all of this value will go higher. >> yasir, obviously, the focus of the fund is to spur domestic growth in your economy and a lot of your investments are directed domestically, but that doesn't mean you aren't investing around the world, including here in the

u.s. even though it may become a smaller percentage, the dollars are actually going to grow how do you view those investments and where are you looking when it comes to the world right now in terms of any particular asset class or geography? >> that's absolutely right i mean, maybe the percentages are going lower from 30 to a range between 21 to 25% asset allocation from our asset center management, but the absolute number definitely will be increasing we deployed like $130 billion in the last three years internationally. i think this number will be doubling up, although we are lowering our allocation to the international. most of the spending will be in the local economy and it's going to be in new projects. it's not going to be, like, investments and the secondary market so we will be spending in the

projects, money on the sector development. we have spent in the past three years or so and established in 30 different companies from ten different sectors and this number will be really increasing we are committed to spend about 150 billion reals, which is equivalent of $140 billion, annual basis from 2021 annually until we reach 2025. so that means we like more than triple our investments in the saudi arabia economy now, looking at the international investments, definitely will be continuing and deploying more funds, and these funds would be pressure money coming in and it's going to be recycling of our current investments internationally.

we don't have any bias towards a certain geography. we always look for the best investment from the long-term perspective, and we have been doing it quite well in the past, and i am certain that we will continue on doing the same thing, too. >> yeah. you know, i wonder, i mean, i know you came into our market near the lows in the march/april time period and did some opportunistic buying are you surprised at the strength of world markets and the market here in the united states over this last year given, as we entered into a worldwide pandemic, there were many who anticipated things might have gone quite differently? >> absolutely. i totally agree. there is a big disconnect between the real economy and the capital markets and the equity markets. now, you can classify them in two different categories, which is the conventional companies and the new economy companies.

so the first one, which is all the economy companies, they are still at, in my mind, i think it's still at a big value. and you see the value is definitely going to be entering into these kind of categories of companies. >> $45 billion into the vision fund is something that many people took note of, of course the single largest investor in that effort by masa. are you happen with your participation in the fund and would you consider allocating more assets to another fund where mr. masason were undertake one? >> that's a good partner of ours we have created in a partnership with him the largest fundraising in the history of fundraising, $100 billion we committed for 45 billion, and

we deployed so far, i mean, the fund deployed so far over 85 billion and returned about 12 billion with almost 10 billion profits as of, i think, september or december of last year so the performance, of course, prethe pandemic, a lot of the tech companies, which is, you know, heavily -- there is a heavy allocation towards it in the original front, get a really big beating. after that, the markets, the vision fund treated us, most of the investors in the markets pretty well. so the performance was really good, and with all of the ipos that have introduced to the market, it's doing amazingly well >> you mentioned ipos, of course they now include the ability to go public through a spac, and i mention that because you are a significant holder of a company

that's gotten a lot of people's attention. lucid motors i think you own as much as 67%, significant equity in that are you in talk with michael cline's spac churchill capital to take lucid public >> lucid is really a great investment we invested in the company in 2018, and we've deployed $1.3 $1.3 billion of new cash we built the factory in arizona. the head office in san francisco. we helped in, you know, the turnaround story what was a really good thing. the company will come into commercial production sometime in the second quarter or the beginning of the second half of this year, which is something we are really produd of. of course, the next level of

such company is to go either for private placement or to go to the market through an ipo or a spac so the company now, through its vote, they are evaluating different alternatives and, hopefully, we will hear from them soon on the best alternative that they feel like. >> is there one, as the large shareholder, that you favor over others >> i will have to hear the board. and we have some representatives on the board i will have to hear from them. i don't think they have come to a conclusion yet so hopefully we will hear from them soon. and it will be announced. >> yeah. $185,000 car seems like a high price. i know people speak very highly of the product i guess you agree? >> it is i mean, that's not the only product that they are producing. i think this is a signature product. the first thing, which is the

lucid air. actually, if you look at lucid, i am not the expert, but from what i understand from my meetings with the ceo and other board members and the chairman, the target market they are looking for in ev is the luxury segment, which is, you know, the mercedes, the bmw and the others so it's in the same price range, only if you look at the luxury inside the car and the -- that's one. the efficiency that they have, that's the second thing. in addition to that, the car is an ev and has the longest range in the industry over 500, i think, 17 or 20 miles per charge and it has like the super charge, which is, you know, on top of its category in addition to the autonomous features so the car is not the, you know, have the -- it's a different

luxury i think in 2023 they will start with their suvs and after that with the more compact cars at the lower price range. >> it may seem strange for some to have a conversation with a man who is also the chair of saudi aramco about ev, but that is going to continue to be a focus of yours from the fund, is it not, yasir, in terms of where you will make investments? >> i mean, aramco is one of the most efficient companies when it comes to intensity in the world by far we have no competitors we have 12 million maximum sustained capacity of reduction, and our carbon intensity is less than 2 milligrams per carbon dioxide. the next next country or company is doing like, you know, 2 million barrels of productions

and be their carbon intensity is 2 million. so we are the best in our breed by far, and i think we should be compensated for that because we are producing less emission and one, two, and three. i mean, three for everyone else. but, i mean, if you use our oil barrel, you will be with a less emission atmosphere. that's one the second thing, our strategy as a company, we are looking into the future until the year 2050 and we look at different alternatives you know, working on the carbon intensity out to the lower to emit carbon zero by doing carbon capture technologies, not only

in saudi, but all the markets we are in so we are looking into this seriously, and we don't think oil and gas is only to be a product for transportation and emission the application of oil and gas is in everybody's everyday life. >> right right. but it all said, you are going to be using some of the assets at your disposal to invest in companies like lucid and many others i mean, we are seeing a good deal of money moving into these companies. some would argue perhaps it has some speculative excess in it. where do you come down on that, yasir? >> i mean, for us, we have to diversify our economy. if you look at the vision 2030 of saudi arabia, one of our key targets is how to diversify our economy. and that's why the pif started to play a major role in the economy and to be the main engine of growth in the economy.

so, i mean, if you look at us before pre to 2015, our reliance on the oil gdp and return, the reaso revenues from oil more than nine fi%, now it's coming down to almost a little above 50%. so that's very much like evident that we are diversifying our economy and will continue on doing. we are a big investor not only in evs, but in renewable energy. we are the largest by far when it comes to solar installation now we will follow through in the wind turbines. and neon, one of our projects. they are the first green hydrogen complex in cooperation as a co-investment with other

projects and aqua power. a project of about $5 billion. now, if you look at the line, which is a part of neon, it's 174 kilometers long and it will have 1 million people and it will have one of the largest number of visitors for the cities around the world, and we want to launch this city all on renewable injury with zero carbon so we want to invest in our environment to make it liveable for not only us, but many, many generations to come. >> yeah, i look forward to visit there one day when you guys are done finally, yasir, to those who claim that you are so big that you almost dominate the domestic economy in saudi arabia, and by doing that you actually do crowd out the private sector, how do you answer that criticism?

>> that's a part of our new pr division realization program that we released two days ago. part of what we want to achieve is basically support the private sector we are paving the way for the private sector in many, many ways we are paving the way for that foreign investments in many, many ways because we are getting new laws, rules, regulations to be more business friendly. and we are bringing -- i mean, any sector that we are open or developing, we are not doing it ourselves. we are doing it in cooperation with the private sector. i will give an example once we started the cinemas in saudi arabia, we were the driving force behind it. we had one license and i think we still have like eight or seven additional licenses. we are not the only company there. we didn't take the whole thing in fact, now the private sector is doing it, and that's why i think it's good for all of us. it's good for us we are

investing and making new opportunities. it's good for the economy, good for the job, good for the growth so we will definitely support the private sector domestic and international. we would love to work with them. and we have done it, you know, in different aspects in tourism, which is a big part of our economy the saudis spend more than $20 billion internationally on tourism. and we want to bring it back to saudi. the only way we can do it, we will do it with the private sector we cannot do it ourselves. >> we will be focused on the progress of the pif under your leadership yasir thank you for joining us his excellence yasir al-rumayyan, governor of the public investment fund of saudi arabia morgan. >> thank you >> well, it's time for covid news update. sue herera has that for us. >> i do, indeed. thank you very much. public health officials remain worried about new covid variants

for now, the holiday surge in cases continues to ease. 151,000 new cases were reported on monday. that's the tenth straight day that they have been under 200,000. european commission president ursula vander laan is warning astrazeneca today that the eu, quote, means business as it presses the company to fulfill its promised vaccine deliveries. astrazeneca says initial shipments will be smaller than anticipated due to manufacturing problems and with anger mounting, some officials are threatening to block the export of doses that are produced in europe anger in the netherlands over a covid curfew fueled violent protests in several areas of that country dozens of people have been arrested and taiwan has reported fewer than 1,000 cases during the entire pandemic. and it wants to keep that number low. it is quarantining 5,000 people as it looks for the source of two infections linked to a hospital you are up to date i will s yeeou again in an hour.

"squawk on the street" will be right back

it is now time for "etf

spotlight. look at the first trust dow jones index, ticker fdn. it's up 50% from a year ago. one of the names in the group etsy rising. it's up about, i think, 1% right now. it was up something like 9% at the highs of the morning the initial jump in reaction to elon musk tweeting hours ago, i kind of love etsy. i kind of do, too. shares up more than 300% over the past 1 months. as a skooum i should note. that said major virgin islands are higher, up fractionally after the s&p hit a record intraday high. we'll be right back.

g.e. is not only the top s&p gainer, an 11 month high on cash flow news.

>> hey, that's right i got off the phone with the ceo and started about i addressing the company's industrial free cash flow. $4.4 billion in the quarter. 500 million higher than last year he says this was really helped by cost cutting, debt reduction and continued growth in health care but culp made clear g.e.'s continued focus on growing renewables where it saw a 34% jump in orders, yet not enough to break even, but with president biden's focus on clean energy, culp sees prospects for growth rising not just about wind energy. remember g.e. created the largest wind turbine, but other areas of investment, too, including the power grid and gas. culp did say you can't meet the paris climate targets without gas playing a major role going into this year with a stronger cash position, i asked when g.e. would plan to rehire some of the folks that were let go last year he said much of the layoffs in 2020 were structural and

per permanent in nature. he said commercial aviation services where you will see planes get back in the air that's where you could start to see more activity in repair shops and that they will be bringing some of those people back he can't quantify how many right now, but that is an area to watch. but right here with the stock up 6% investors are trying to discern what the future holds for g.e.'s large and vast portfolio, whether that includes nor acquisitions, it did make one late last year, and divesting certain assets that all seems to be on the table here, morgan. >> of course, that commercial aviation recovery that is expected this year is a big focus today with raytheon as well they also have a sizable military portfolio seem a mdy thank you. still to come, theim's ceo mike roman with that stock up 3% right now. "squawk on the street" will be right back don't go anywhere.

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where earnings continue to lead the markets in terms of news flow really going into another gear of earnings season. a lot of industrials, verizon, g.e., j&j of course, just a few much highlights. that said, sect otherwise mixed and the dow's off of the session highs at the open up 161, currently up 63, morgan. looking for leaders. not much, but consumer discretionary and energy will be places to start. >> record high earlier as you mentioned, off those highs of the morning of course, we got tech on tap after the bell today and through the rest of the week as well and

we have seen that recent rotation in the last couple of days, back into those big and megacap tech names that being said, to your point, industrials certainly in the spotlight this morning with g.e. leading the s&p right now. it's really that recovery story in 2021 and what the guidance is telling us about what the economy and what is under these hardest hit in the pandemic industry, aviation and aerospace, how they will uncover as the year unfolds, david. >> yes, look at shares of g.e. we heard from seema mody, an unexpectedly strong trucks production of free cash flow helping largely due not to significant increases in top line as we know, but cost cutting and savings. renewables a key area for them. >> isn't it incredible, a couple years ago, we followed what

happened in terms of the hard hit -- what happened to g.e. as the company went through several ceos, as all these financial implications were brought to light and as power was exposed at the time as an area of weakness now to see it powering earnings today. >> market cap above 100 billion for the first time in quite some time speaking of large companies, market caps above 100 billion, 3m up 3% the company reported an increase in demand for health care products they make the n95 masks. joining us is 3m's chairman and ceo mike roman looked like a strong quarter, but i'll start off asking about things that investors will always be concerned about, which is softness. you talked about consumer electronics, oil and gas, highway infrastructure let's talk a bit about at a least some of your concerns.

are you concerned about those areas? >> well, david, hey, great to be on with you today. thank you. it was a strong finish to an extraordinary year and i would say i'm proud of the way we led of course, in the middle of a pandemic where we stepped up to deliver respirators, 2 billion proud and distributed in 2020 but we also invested in growth at the same time and really in some of the positive trends that we are seeing as we came into the fourth quarter and what we see as improving outlook in some of these end markets as with ego into 2021. so that's a big part of the story, where we are investing if those growth areas, in areas like continuing personal protective equipment, but also home improvement, home care, electronics or segments that are strong today and we're seeing improvements in automotive build rates as we go into the new year i did highlight on the call some of the end market segments that continue to be weak.

we see as people are working remotely we see our stationaries office supply impacted. we are seeing our commercial solutions businesses impacted as people are again not maintaining or upgrading their officer and commercial rating. so there is those kind of end markets. we highlighted there is uncertainty in the middle of the pandemic on some of the trend, how will they continue to play out? it will depend on the covid-19 how it progresses, how the economy continues to move forward. even how it impacts some of those end markets that were strong for us. so there are segments that we see that are still challenged. we talked about elective procedures and healthcare still being down year over year and that's projected to continue as we go through 2021 we're seeing hospitals working to preserve those and move those up so we'll see, hopefully, some improvements there

but that's the height of the pandemic. >> although, not enough uncertainty for to you offer 2021 guidance? what did you see that at least gave you the confidence that you could go out there with guidance this year? >> i think end markets strong and improving. you start to look through those, you can see the underlying dynamics stabilizing the caveat is how the pandemic progresses can impact that so we have guidance ranges around some of our businesses. we talked about the call on electronics. it's a little wider than normal because of that ensurgeonty. we are confident the underlying stable trends look to be improving. we are looking on the whole year on expectations. we are building it off a view of each of these markets. so you look at the projections, build rates for automobiles expected to be up mid-teens as we go through the year so that's a basis that we look at we talk to our customers they're seeing the same things and absent change due to the

pandemic, we would expect that kind of growth so those are the things that fundamentally are giving us a little better view through the markets in 2021 and built into that range of three-to-six >> mike. it's morgan. it's good to speak to you this morning. i'm curious, we saw that letter from black rock this morning basically playing to pressure companies to do more to cut carbon emissions it's interesting even when you talk about manufacturing solar panel, in many case, something like coal is involved just in that manufacturing process. as the ceo of a company involved in advanced manufacturing, which historically has relied at least to a certain extent on fossil fuels and some of those chemicals that are affiliated with fossil fuels, how are you thinking about this topic right now? i guess, how does it speak to your r&d efforts, which i know is such a focus? >> yeah, it does start to bring our innovation to bear on these

big challenges this is a commitment i talked about on the earnings call this morning. it's a long-held value to drive a leadership in sustainability in our emissions from our operations we think in terms of stepping into air, water and waste. all of those areas and we have science, using science to improve climate we've since 2000, we've reduced our greenhouse gas emissions by over 60% so we've taken a step forward and we are laying out plans to go even further as we move ahead. so it's a top priority for us in our operations in 2019, we took our headquarters to renewable electricity. 100% of our electricity is renewable sources. we committed to long term taking it around the world. that's a part of that sustainability commitment. but we'll do more. we are focusing on what can we do plant by plant, factories around the world to really step forward in the area of carbon and in the area of air, water and waste.

i talked about priority and the investment we are making to reduce our water usage and improve water quality around our factories. this is near and dear. we do bring our science to bear on this. we will step forward we have set some very strong goals for ourselves as we move through into 2021. >> hey, mike, we have been talking about mask supply and mask demand for almost a year now. some of these new variants have various governments around the world very suspicious and there is an argument that the par is going to be higher to loosen restrictions and advise people to stop wearing masks. i wonder, i imagine you are not gaming out some sudden dropoff in demand more masks even once the vaccine is widely distributed? >> no we do expect demand. our n-95 respirator masks to be strong as we go through the year we see the demand, from the need

from front line healthcare workers and first responders that's still our first priority. we are focused on delivering to their demand and also to critical industries that require that n-95 protection so we expect the demand to remain strong in near term and governments continue to build stockpiles as they go through the years. so looking ahead, our priority is still on those front line healthcare workers, 1st responders, critical industries. you know, we would look more broadly. we still encourage our employees and everybody to follow the influence out there from agencies like hhs and cdc. wash your hands, safe distancing and wear face coverings. that's a very important focus and we'll continue to do everything we can do to deliver and protect the workers that are on the front lean. >> good to hear. meek, i did want to get your thoughts there was chatter ahead of your earnings about the biden administration on the chemicals linked to health conditions and

to which some americans have been exposed to drink water. obviously, this is an issue for 3m i am curious what this could mean, what you are expecting in terms of clean-up costs and increased regulation >> to start with, we share common goals with president biden and his administration to improve water quality and put in place strong regulatory standards for that we have been a strong supporter of the epa's management plan since they announced it over a year ago and this continues to be something we proactively do as part of managing. we are using 3m expertise to work with governments. to work with communities, to really move this forward, to deliver on our commitments to build on our success we look forward to and have engaged with president biden's administration on these kinds of topics we look forward to working together as we move forward.

we will follow through on the commitments we are making, including stepping up investments proactively a part of that definition is doing things before you have to. that's what we are doing in the area of sustainability stepping forward to help provide leadership and really step forward on reducing water use and improving water quality as an important part of that. >> mike, you are not concerned about the "and the epa given an acceleration will accelerate around it? >> well, it's people ciao you are to comment on what they might do we have been supportive on having federal regulations the establishment of federal regulations is important here. so we see that as a common approach and using science as a basis for that those are i think are very strong pillars for us to work together on. >> finally, mike, back to covid. i feel we have talked to you in the past a couple of times at least about this test your team has been working on with mit researchers, low cost, hayak race, rapid.

we could really use that but do you seem to be hitting some challenges. i'm just curious, are you going to get there >> well, we have a great partner in mit they have technology and we have been working together to advance that technology. we bring strong capability information manufacturing and being able to scale and provide the accuracy product-to-product that's needed and we are in development with mit it's that part of the work we are working to get consistency in the design to drive the sensitivity, to really move forward and prove that we can deliver the kind of performance, that low-cost rapid accurate test it's a big challenge and we recognize a need where we got a great partner, we're excited about our partner here we think this is going to have an impact going forward on viral testing, in general. the call this morning, the question is always the time line we have to work through some of

those developments those development steps before we can gen to talk about a time line for scaling up >> all right well, we look forward to progress on it and many other people do as well, make. thank you for joining us appreciate it. >> thank you, david. have a great day >> you too micro man, 3m. carl all right, good morning, everybody. it's 11:00 a.m. at verizon headquarters in new york city and 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ . >> happy tuesday, welcome to