back and i hope we can do it for more time. >> absolutely. thank you very much. >> appreciate it see you, ken thanks. that does it for us this morning. make sure you join us next week, "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street," i'm carl quintanilla, with david faber and leslie, cramer has the morning off, we are coming off the first three day losing streak for the s&p of the year dow though is on track for weekly gain. 10 year yield still elevated above 1.31 oil back below 60 as the texas grid operator says emergency conditions may end today. our road map begins with yellen's push for stimulus as the treasury secretary warns of risks ahead without significant relief >> then call it a short squeeze as the extreme weather adds to the production issue of semiconductor chips. >> and later, a regretful robinhood.

we'll break down what actually came out of yesterday's gamestop hearing. carl >> guys, we're going to unpack all of that but first we will start with what yellen told our sara eisen on closing bell yesterday, about the stimulus, about the risk of doing too much versus too little, here is what she said yesterday on closing bell >> we're hoping to see progress over the next couple of weeks, and enacting that package, into law. president biden has had discussions with members of congress, on both sides of the aisle, would ideally like to see a bipartisan support for a package that we think is really what we need to deal with the pandemic and to get beyond it, get our economy back on its feet, and help all of the people who have been so badly harmed by the pandemic, and the economic havoc it's caused.

>> a great interview with sara, david. >> yes. >> and we talked about the implications of that kind of stimulus, both intended and unintended consequences, and i don't know if you've seen some of the q1 estimates to gdp, but atlanta fed is now at 9.5, goldman went to 6, and morgan stanley went from 3.6 to 7.5 so i mean whether you believe it's going to cool off into that back half of the year, the first half of year looks hot. >> it does and then, you know, even some of those '22 numbers are quite strong and that continues to be kind of the question will there be a real follow through. but you know, carl, i've been mentioning this during the course of our broadcast recently and probably continue to the conversations i have with asset allocators, many of them hedge fund managers, usually include two topics, one, spacs, do you have one, why don't you have one, i got to get one, i got to start one, i haven't started one, oh, you have heard about mine, can i book my guest on, we're de-spaccing next wee and then the other subject of course are we going to run

really hot and what is going to happen to the market are we going to put a lot more money and a lot of people's checking accounts that will end up in the market, is there going to be simply be more purchases leslie of goods and services, services in particular, of course, because that has been a lagging part of the economy, given people in certain places had continued to be locked down, or not locked down but not doing what they typically would. and that's the question. and what will it look like in terms of the reflection both for economic growth, and back here, for what it means for the overall stock market, and these pockets of steck lation that we've already seen -- speculation that we've already seen and drawn attention to. >> yellen addressed the inflation question and said she wasn't too worried about it and believes the fed has the tools to handle rampant inflation if it does rear its ugly head, especially given it has run so low for so many years now and of course she would be in a position to know what tools the fed has at its disposal considering she was the chair there for quite some time.

interesting that she is also tying potential tax increases to an infrastructure bill that's something that people were concerned about especially as they look at stimulus and what it does for the budget deficit, the potential for tax increases, which she said would be gradual in nature, carl. so you know, no real details on what form those tax increases could come in, but that's another thing to be looking for, and potentially could have implications on some of this overheating that we're seeing as well, with regard to the economy. >> also, touched on crypto, as andrew was just talking about, with ken griffin a moment ago, and called today highly speculative asset, at least on the bitcoin front, david but that always brings us back to what she said in 2014, about small caps, and small cap biotech, it's always hard when you try to pigeon either a treasury secretary, or a fed chair, on individual asset classes. >> i think we pinned that on

somebody in her staff, maybe lost some money in some small cap biotechs we never really, i don't know that we were certain as to whether yellen signed off fully on that commentary but i do remember that, carl, quite well what's interesting, listening to griffin just saying, no thanks, on bitcoin when andrew asked him to engage on, it he gave a three-word answer, essentially saying i just don't pay it, maybe more than three words but wasn't many more, and doesn't pay attention to it and obviously the market continues to and a continuing story for us as we watch across the 50,000 mark a few days back. >> and nearing that $1 trillion market cap level i mean it seems like only yesterday we were talking about, you know, apple hitting a trillion market cap, amazon, microsoft, and bitcoin now, and also, you know, we are starting to see certain hesitancies, obviously griffin, the most recent one, but there was a note from jpmorgan this morning, addressing bitcoin, calling it

the economic side show, saying that it really wasn't a good uncorrelated hedge to equities that said, there was this etf that debuted in toronto yesterday, 10 million shares that had exposure to cryptocurrency, skyrocketed on its debut, and certainly seems to be very few hurdles from this investor skepticism, albeit kind of sparse as it may be at this time, carl >> all right, guys, of course, the street still digesting everything that we got out of the financialservices hearing yesterday, the degree to which we learned anything new but interesting exchanges especially with vlad tenev at robinhood listen to this. >> at that exact moment did you have the liquidity for 3 billion. 5:11 a.m >> at that moment, we would not have been able to post the 3 billion in collateral. >> leslie, i've been dying to

know what lessons you drew from even the q&a >> yeah, i think that exchange right there was the most revealing, because we have seen a little bit of this back and forth from tenev over the past few weeks about what his company was really going through, during january 28th, that led them to the decision to restrict trading in certain securities. so was there a liquid ty problem? was there not a liquidity problem? he had kind of gone back and forth over exactly what was going on of course they were ultimately able to raise $3.4 billion in venture capital. they were able to restrict buying of certain securities, which limited their volatility profile requiring them to post less collateral to their clearinghouses, but he admitted in that exchange right there, that yes, at that point in time, we had a big problem, and what's important about that, is not just that it is a robinhood story, and this will go away as some kind of blip but it exposes potential vulnerables in the

system, it exposes potential risks in the system. i remember that morning, i was talking to hedge fund managers across the street and they were saying, if robinhood has a liquidity problem, that's a big issue for the broader market as well so this is something that would affect everybody and i'm really looking forward to speaking with representative gonzalez next hour, about this very exchange, and you know, what it means to him, and the rest of the lawmakers with regard to, you know, potential regulation needed. because unlike fdic insured deposits, these are not, they don't have the same kind of protection right now so if robinhood were liquidated, that would be a big problem for 13 million customers, david. >> yes, i don't think they fully understood the risks inherent in their business, leslie and the first lesson of course, when you have a liquidity problem, is never admit you have a liquidity problem. and that's, you know, that's one, two, and three on the list. don't ever admit it. because when you do, then you do then you got an even bigger problem.

and so you could expect that mr. tenev would have danced, whatever dance he needed to avoid that question at the time, in question, but there is no doubt they did there is no doubt they did they had not anticipated, of course, as few could have, what went on during the course of those few days and they clearly needed a lot of money and they needed it fast thankfully, they were able to get it >> yes he called it at one point 1.135 event. a five sigma event, something that was rare, unexpected. i don't know, david. i don't know how statistically rare something like this is, how likely it is to happen again you know, nothing has structurally changed to prevent a group of traders from causing volatility in some illiquid names. >> listen, i feel like i've had a fairly long career at this point, carl, but i feel like i've lived through a lot of those 1 and 1.5 million events long-term capital. those geniuses, remember them, with all of their nobel prizes

that also was like, whatever, i don't know how to express it but never could happen and of course, it did. i mean we can go down the list these things happen a lot more often than you think, given the odds >> yes, no, we are living in the age of black swan, david, that's well said. to the degree that there is going to be follow-up hearings of course, on policy, and regulatory follow-ups, we'll keep an eye out. by the way, griffin's interview, although full of very truncated answers with andrew, was pretty good, he did talk about this notion, and this allegation that hedge funds somehow had influence over the restrictions of trades, on robinhood. here's what griffin said >> the big picture is, is the conspiracy theory that we somehow or another are like some of the big tech giants, that have access to personal identifying information is just flat out false we have a price, quantity, a limit, that's what comes to us, in an order, from a retail broker >> so leslie, how much

skepticism is that going to be met with >> i think it will be met with skepticism but i think this idea of data collection is what broughtthe whole payment for order flow controversy to the floor in the first place people realize that, oh, if we're trading for free, someone must be paying for it, they later learned that it was citadel securities, and other market makers who have this whole process called payment for order flow, and people started analogizing that to the big tech giants and saying what do they do with our data, what do they do with our information, i don't want these big wall street firms having my information and doing something nefarious with it. you know, it's obviously a different business than what, you know, big tech companies do with regard to targeted advertising and other things of that nature. the information, the data that they are collecting is just based on trading and they made money on the spread. they're not selling your data elsewhere. they're not, you know, using it in other ways. the money making occurs based on executing that trade, at a

certain price. so that's interesting point number one another thing that came out yesterday, in the hearing, was this idea that melvin capital, which of course has become targeted on these wall street bets forums, it is kind the poster child of the hedge fund industry, being on the other side of that gamestop trade, they suffered 53% losses as a result, gabe plotkin noted at this time that they have data scientists inhouse who are now combing through data on reddit forums so we've had it full circle. they clearly do not want to make that mistake again so they are very closely monitoring what is said. not just about the firm, which there still is quite a bit said about melvin capital but also about various stocks and what kinds of vulnerabilities they might have to the next gamestop perhaps. >> and i thought it was interesting, carl, in -- >> and the interview, griffin did question how long that trend will continue, how long will

this reddit play, so to speak, actually be in play. and he didn't, as none of us do, he didn't really know but he certainly indicated it's a significant one right now. >> yes, i tweeted, a job posting yesterday, from a quant fund that has an opening for what they're calling a sentiment trader, pays 200 k, where yield quotes spend most of your time on reddit and discord chats and twitter to feel the pulse of tens of millions of retail traders. i don't know if that is going to be a thing, david, it seems a little bit of an outlier, but clearly they will have to recalculate their exposure, and i guess their reaction to whatever retail may hand them. >> very interesting. i know and again, the question is, how long will this trend continue? will it only be frankly exacerbated by the fact that, again, back to the potential $1.9 trillion bill working its way out of the house and the senate, will it be, you know, when people have $1400 checks, now many of them need the money

to pay for food, but there is this idea that some of it will end up, as goldman sachs indicated earlier this week, carl, in savings and/or in the market, and so you know, how long will this be with us is one question at some point one would imagine they will come up with an ai that will take the place of the person who is trying to figure out sentiment. >> as well as tv anchors and everybody else >> oh, yeah. >> guys, we'll take a break here we're going to dive into what what is happening in texas today and what may happen over the weekend. the implications for not just chip shortages, but auto production, food supply, and a lot more, we'll get into that ene meack. back in a minute 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.

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the semiconductor industry now facing another challenge related to that shortage and that's the weather josh has more on that. good morning, josh. >> so carl, just when they are needed the most, chip plants are now getting shut down. that's due to these severe winter storms we're seeing in texas, which have left so many suffering, and they are impacting business, too. now, forcing chip makers around austin to suspend operations for example, nxp, which makes chips for cars, said it halted manufacturing at its two austin facilities the company says once utility services are restored, its team can evaluate when full production resumes

samsung, one of the biggest chip makers is feeling the bite as well they had to gradually halt operations in austin, and ordered to do so by local authority, and analysts estimate that the plants represent about 30% of sam sung's overall production capacity. infineon also impacting. idling its austin plant. the company spokesperson saying the company is evaluating the impact and following local guidelines on reopening. remember, all of this is happening during the most serious chip shortage in years it's impacting production on everything from computers, to cars, and chris queso at raymond james says these shutdowns could capas bait the problem that is not good news for the chip customers like the automakers but it could be good, he argues for the chip makers themselves shortages push out demand. they don't destroy it. in other words these chip makers will still ship everything they can make and maybe even see their margins expand because they will have to allocate squars supply to their highest

margin -- scarce supply to their highest margin customers and the hot pick, nxp, and micro chip kpip, and micron in memory and qualcomm in hand sets, carl, back to you. >> a great setup s, josh josh lipton. and wells takes western, from 65 to $85 target. but it feeds the overall narrative and that is that we are going to be talking about scarcity in general on a host of products all year long. >> absolutely. i mean when we look at just what four days worth of a situation like this, where so much of the supply chain has been disrupted, look at what's going on with the vaccine distribution in texas right now, it's not just limited to chips, but the whole economy in the state is basically turned to a halt. and there was a really interesting article, in the texas tribune, i think it came out yesterday afternoon, where they said that the system was within seconds or even minutes of having a complete failure for months on end.

can you imagine what that mean for the state's economy, especially in a pandemic, where people are so reliant on not just power to stay warm, and do their basic jobs, and lives, but their jobs, they're taking place, so much more online, their ability to connect with, you know, family and friends, it is so much more online, and so the thought of, you know, the state of texas not having power, for months on end, in the middle of a pandemic, it's pretty scary when you think about it. >> yeah, and of course, we're going to keep an eye on, it this story, that josh was outlining so well, for us, about chips, it's not going anywhere. we talked yesterday, vincent roche, the ceo of analog devices, they're going to meet their guidance and perhaps they can exceed it, but in part, they are reliant on other wafers, coming in, that do things with, and it's going to be a story, as he said, that we're going to be dealing with these shortages throughout the rest of the year, and obviously we see it carl, perhaps, manifest most in the

auto industry, we've talked about ford and gm, for example, but it will be sort of throughout, and then we come back to this idea of a national champion and a look at intel there and what it will mean as the u.s. government tries to sort of figure out a policy there to make sure that we have adequate supplies domestically, as well. of chip making ability >> do you think that m&a solves the problem at all >> unclear you know, unclear at this point whether that would be the case when it comes to m&a, we obviously are looking at nvidia, in a deal to acquire arm, that certainly has some potential issue, qualcomm has tried, broadcom, it's possible but then the u.s. government weighing in, in a significant way from an anti-trust perspective and on the other side, carl, being a national defense perspective as well, given the two are tightly linked when it comes to chip making. >> yes, that sort of folds into the president of course, speaking to the g-7 actually right about now, and his comments are expected to

emphasize less of a quote america first policy, like his predecessors and more of a multi-national cooperation policy we'll see what readout we'll get from that. we'll take a break, guys plenty of vaccine news to get to pfizer news israel, j&j, and interesting and double upgrade on kb home out of goldman to buy. back in a minute e i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪

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companies exposed to semi, and amat, opening up 6%. 129 beats 128. key bank, 144. cowen to 145

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deere is going to open close to 318 this morning, it was $100 stock in march of last year, on earnings, 387 crushes 214, revenue ahead, they do raise their guide. and david, we've talked about deere over the years mostly as an ag play and kind of moved sideways during the trade war with china but if infrastructure happens we'll talk a lot more about its smaller but still sizable construction business. >> i'm sure we will. and cat has moved along with it as well. i'll send it back to you, carl, because i think, if i recall, there was a time when you covered this company, wasn't there? and perhaps you can give me a better sense as to what we're, the economy we're in right now and it seems to be playing to its strength, obviously farmers have been quite strong as well >> yeah, i mean i don't want to tell you when i covered them, because there are people alive now who weren't alive then, but yeah, i mean we moved past a period, david, where we're

talking about farm income being supported by government, outlays, and basically socialism for the farm belt, to a period where you got grains and soybeans all with strong pricing power, and farmers trying, to you know, having paid off some debt, they are now saying maybe it's time to upgrade the tractor. >> carl, i think what you meant to say is there were people who were adults now, who weren't alive when you were covering them >> exactly >> and he's young, by the way. >> and that's going to be an interesting inventory. >> it will be. >> but that move, many stocks that we can put up with similar charts that this time last year or let's talk a month from now, a year, 11 months ago, you would never have anticipated the moves that they've had. >> no, i mean deere has certainly been a beneficiary of some stockpiling that's been going on, that has helped boost the prices of a lot of commodities that helped their downstream customers, and therefore, as carl mentioned, they were able to use that

additional revenue and come from a position of strength so they can pay off some debt, and they can upgrade their machinery, and that of course helps deere >> we'll see how that feeds into the overall tape this morning, as we get the opening bell and the s&p 500 here at the bottom of your screen [ bell ringing ]. >> three straight losses for the s&p which we've not done since december, but the dow, largely because of their exposure perhaps to more financials, is still on track for a weekly gain david, we haven't yet mentioned some of the vaccine news, but this israeli study on the pfizer vaccine, that basically argues 85% efficacy after one dose, but after about 15 to 28 days, it is pretty encouraging, and by the way, pfizer also now submitting some new data to the fda, on temperatures that would be more like standard refrigeration, at least for a couple of weeks, which would definitely help logistics. >> all of that would, being able to move it more easily,

obviously, not require quite as much refrigeration, and that 85% number is something worth noting, as you already have, carl, because it may mean that we change the protocols to some extent, or not as concerned with people getting their second dose, immediately, and therefore, being able to inoculate more people, more quickly, and bring it to an end, leslie, or at least get to that so-called level of herd immunity i'll leave it to all of the epidemiologists out there, to take it from there but it certainly potentially positive news. >> especially if you need a booster shot to potentially take on variants, anyway, and not an epidemiologist, certainly not an expert here but it sounds lion like encouraging news on that front. and i don't know if you noted this bloomberg study that looked like there is a vaccine surge coming, and they looked through the government documents and the supplies and they found the u.s. government is currently constrain stod 10 to 15 million

doses per week right now and that figure could go up to 20 million in march, more than 25 million in april, and may, and 30 million a week, in june so by summer, that would be almost, or more than four times the amount of shots going into arms per day that we're seeing today. so also encouraging news, at least on the supply front, you know, potentially a light at the end of the tunnel, i don't know what that means for the three of us, and others who are still waiting for their vaccine. but you know, a slew of relatively encouraging news on the vaccine front today, carl. >> yes, i know, yesterday, jpm had a note out, guy, just on israel, not looking at any global picture, but given 40% of israelis have been vaccinated at this point, their baseline scenario, at jpm, for israel, is that new infections and deaths go to zero by the middle of the year, which kind of sounds too good to be true, and there's lots of caveats about why the

u.s. may not be quite a perfect analog, but that would be obviously amazing, if they could essentially wipe this out, by, for all intents and purposes, by the middle of summer speaking of all of the reopening stuff, david, i don't know if you noticed, ual, announcing new service from boston, to london six flags today with a note out saying they're going to hire to have all of their parks and water parks open by the summer time so that reopening play is definitely evidence today. >> no doubt. and i think there are many investors right now wondering how much demand there will be for airlines, for seats on airplanes, carl, when we do get to full reopening, and perhaps, you know, by the summer, that will be the case one would imagine there is a great deal of pent-up demand to go places. and so we could see a real spike and perhaps an ability of the carriers to raise prices significantly, given the demand that they may see. at least that is one thesis that's out there, again, we'll see how it place out but you can

see the stocks are responding quite positively this morning at least, as you said, to various news, and at least ual increasing flights and/or destinations where are we 9:33 i think i only mentioned spacs once when the ringing of the bell, butterfly, that was jonathan roethlisberger who has joined us a couple of time, and it has been very good to him spacs and butterfly is good overall. i did want to get to the weekly spac roundup if we can and leslie i'm glad you're here because you've been following this story, this trend, very closely. i wasn't kidding earlier when i said there's two things hedge fund managers want to talk about, it is basically the economy and what it means for the overall market and the spacs or lack of a spac or the plan to have a spac, and many of them frankly making more money from their spacs and/or investing in them than they have from running their hedge funds. one hedge fund manager says nobody wants to put in a long/short hedge fund but they

will give me plenty of m.i.a. money for my spac. >> that's true >> and this week, the numbers 16 down from last week. and these are from our friends at speck analytics 16, here is the real interesting number, 160 spacs have gone public this year, six weeks into the new year, something like that and 143 have filed, so with the s.e.c., two go public, and have yet to do so, so you can see, we are quickly approaching over 300, and then the question will become, leslie, what do they all look for what do they all go after? are they chasing after similar names? do we get in terms of quality, lower and lower on that? we've already seen so many of these companies that are really development stage still, they're taking what would, otherwise be, kind of late, mid to late stage venture capital money, and instead they're taking it from the spac, and going public and we talk about them, we've had them on tv, and many of them look very promising, but the question becomes, how many will

actually follow through to real profitability when they're talking about multiples on numbers that are five or six years out, and there's just, to put it in perspective where we are this year versus last year already. >> oh, my gosh yes, we are definitely on pace to surpass last year, just monstrous year, in spacs but you bring up the point of, you know, how it impacts the hedge fund and private equity industry, this idea that people really do see an easier path to making a lot of money by going the spac route, versus by going the traditional private equity venture capital hedge fund route. the question i have is how does the spac, at david, you might know the answer to this, how does a spac impact their lp. the lps, i know it differs largely based on the spac and the way it's set up but do lps, in said hedge fund or in said equity firm also see the upside or is it just the manager of the spac that is seeing the huge

dollar signs by doing this and i'm trying to wrap my head around obviously the manager of the spac benefits but is there -- >> i don't believe so. i don't believe so but it's a good question but i think it is a separate entity, run by the hedge fund manager, based on their expertise, and picking stocks and therefore their ability to potentially pick targs for said spac that they are sponsoring. >> yes >> and let's not forget, hedge funds obviously are benefitting as are many investors on buying on the initial public offering of the spacs sometimes they get redeemed but they still own the warrants, they arbitrage that and the spacs are going up as we see the spac post deal i'm glad we go the that. so that's after the deal announcement, right, on the way to despaccing, as butter fly did and now a regular public company, can't say they're a spac anymore, they fall out of this and then we have the index, we went public as a spac, butterfly, an incredible

performer, we went public as a spac, but we have yet to do our deal, and that's even more significant in a way, as you take a look at it, because look where that's trading just showing, carl, the overall enthusiasm for these, and it's not going to stop. and in fact, it's going to keep growing. i talked to bankers now. m&a bankers who are quite busy with deals, but frankly also spend an awful lot of time talking about spacs and the possibility that we will start to see corporations as the main sponsor. simon property did something, but this is something that has become a lots more commonplace as well. not to mention companies using spacs to dispose of divisions that they no longer want, instead of spinning them directly or something else, going the spac route, carl we'll keep talking about it, because it is an important trend that is going to i think be with us for quite some time >> yes, i'll take advantage of where sentiment is right now, david and it reminds me of a similar vein, we mentioned

zillow yesterday, taking the opportunity at these market levels to issue new shares trillo took advantage of the new shares and 425, i think, and a $6 a billion market cap i -- $65 billion market cap on trulio, and it all feeds to what you're saying is that people are looking for opportunities in an era where yield is a little bit tougher to find. i did want to get, i wish jim were here, david, because this goldman call on kbh, you know, the idea that a home builder at this point is worthy of an upgrade, it feels like it's a little bit long in the tooth, given what rates have done, and some of the home builders have come in a bit, kb cluincluded bt they go from sell to buy and covid secular shifts and demographic secular shifts and demand they go from 32 to 51. >> they were on the wrong side of this stock i guess for a while, carl and now, yes, that's interesting, now they're on the

right side, i guess, although the one-year performance as you see there is not particular strong about a $4 billion market cap on kbh. interesting call i did want to also move quickly on to a name that we have talked a great deal about lately, that's pallantir, down sharply after earnings, the lockup, expiration just passed and you saw the weakness in the shares yesterday, but today, reversing. and reversing significantly. did note, as we all take a look at kathy wood's nightly run down of what they bought and sold at arc investments and they did add what was it 5.2 million shares so a fairly significant dollar-wise of pallantir and maybe that is helping but that stock is rebounding again. there were a bunch of sellers yesterday, getting ready for, or taking advantage of the expiration of the lockup, and you know, they're still going to be questions in this market as well just about multiples and i

come back to the report, 30% top line grower is deserving of a 44 multiple, to sales, on 21 sales. they were speaking specifically of pallantir when they upgraded the stock earlier this week. i don't know and meanwhile, take a look at the likes of a viacom, which just kept going up and up and up i keep pointing it out because it is extraordinary. and the fact is that it's now trading at a higher multiple on '23 numbers than facebook. than facebook. i'm talking not pallantir anymore. it is viacom and facebook. to give you a sense of what is going on in the market. >> and a look at the orders by fidelity customers, it gives you a sense of that pocket of the retail community and how they're trading today,.. a. llantir -- pallantir, most active, followed by the pellet, block chain, tesla, which is among the top five in church hill capital, and cciv, and everybody is looking at a potential merger there

so definitely caught the interest of the wall street bets community. really during the hearing yesterday, people were talking about that, carl >> yes, pops intraday, based on what was being said on the virtual hearing. guys, we do have caterpillar leading the dow, and that is an all time high on cat, probably off of the deere news. let's get to bob pisani. >> and janet yellen talked about stimulus and that helps th market a little and semis have turned around, a rough week and a half on semiconductors but i think applied materials is helping, take a look at the sectors, and you haven't seen semis as a leader in a while and that's a good sign, we need technology to lead and it has been very flattish in the last week and a half, apple is down again today and again this week and tech has to step up. banks doing a little bit better. industrials hit the reopening trade, energy on the flat side, weaker, and oil is down, u.s. is reopening talks with iran there,

and just want to mention applied materials because it is moving in the semiconductor space, we're at an historic high, 118 was the old historic high, for applied materials but the important thing here is just an incredible earnings report, beat, raised the quarter, strong outlook, the semiconductors are on fire, because demand is exploding, across the three areas that really matter to them and gary dickerson the ceo of applied materials was talking about it this morning, cloud services, data center. they expect demand to grow 15% this year. automotive, because chips are all over cars these days, demand up 15% and 5g hand sets, they're expecting double digit gains so demand is exploding right across the board. the other great earnings report today was deere. i know carl mentioned it huge beat. the beat was 80% above the street estimate. that's amazing and they had big boost in the full-year guidance and look at the struction business, it's going to be, it was up 21% small agriculture, the farm

equipment stuff, up 27% and another division, precision, was up 20. everything is up 20% overall and this is before covid this is the quarter that was already over so deere also is at an historic high 3.17 was the, 317 was the old historic high and well above that now and looking at the robinhood thing and the key take-away. here is what really matters. the most important thing was that payment for order flow generally works if you get best execution. that word is going to get a lot of attention in the next few weeks. it's generally involving best price but also can involve price improvement. you heard ken griffin talking about this a lot of the price improvement. what does it involve it's competitive brokers like schwab, they have routing wheels that send the orders to the market makers with the best price improvement so citadel, susquehanna, they all compete to provide that best execution, best pricing, price improvement, and if they don't, they get less orders from the brokerage, so it is th brokerages that are actually out there making sure they do it, because they want to show their

customers and their regulators that they are indeed providing best execution watch that word. people will hold them to that. and i think, guy, the key here is that market makers like citadel are able to provide price improvement for a couple of reasons number one, they internalize they pay, they fill these orders from their own stock, they don't go out to exchanges where they have to pay rebates. that helps them. and number two, ken griffin emphasized this, they are able to bid a sub-penny increments. the stock exchange can only bid in one penny intervals, between the bid and the ask. the nonexchanges,they can do sub-penny, and that enables them to quote provide very, very modest price improvement, below a penny, that actually gets them that order flow. that's an advantage that they really have right now, and even ken griffin admitted that he'd like to see a more level playing field to a certain extent with the rest of the exchanges. carl, back to you. >> bob, we'll see you in a

little while bob pisani. a lot to watch on the rate front and the currency front as well, today. let's get to rick. >> before we get to the charts, let's look at what is going on with the february preliminary read on the market, markit, manufacturing pmi, hitting the wires, 58.5 is on the manufacturing pmi, and that is interesting, because it backs away a bit from the cycle high, the recent cycle high from 59.2. and if we look at the composite, 58.8, and usurped the covid cycle high from one-tenth, and finally finish up with the service composite, pmi, this is the largest swath in the u.s. economy and at 58.9, it usurps the 58.4 that was the final read, the high, post covid and that was in november, so definitely saw improvement there but remember these are

preliminary. now let's get to the charts. you know, week to date tells you a lot of information on 10 year note yields. of course, we are now up 10 basis points on tens 10 basis points on 30s for the week these are substantial moves but if you thinkthey're only in th u.s., you're wrong, it is all high quality sovereign debt and if you look at what is going on with regard to 10-year, or excuse me, a one year chart of our 10s, you can see the moves and look at this, for one year perspective, definitely testing some key level, and in this case, the minus 27, we want to pay attention to that, and finally a one year of the u.k. guild, their sovereign l-sovereign. 68 basis points, you can clearly see the run-up and it will continue in my opinion, as we continue to make progress of course, against covid, and you see these large stimulus plans being floated not only in the u.s. but other large economies as well.

back to you. >> thanks, rick. keep your eye on drop box today. shares are down a touch despite a beat on the top and bottom line more paid users. better than expected revenue per user they did guide a little light on full-year revenue. we do have some price target increases though jpm goes from 29 to 34 the stock is down. we're back in a moment it's not “pretty good or nothing.” it's not “acceptable or nothing.” and it's definitely not “close enough or nothing.” mercedes-benz suvs were engineered with only one mission in mind. to be the best. in the category, in the industry... in the world. lease the gla 250 suv for just $399 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

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welcome back your grandma isn't the only one having trouble getting the vaccine. bertha coombs explains as we close out the hour, what's going on with corporations >> you know, leslie, large employers of essential workers feel an urgency to get their employees vaccinated, but like the rest of us, they are struggling to get their shots. tyson started vaccinations for workers in illinois, virginia and missouri yesterday, but they got a total of just 1,000 doses for the three plants

up to now they have gotten 25 to 50 tdoses for nurses and staff over 65. with 120,000 workers across 24 states, they are taking every dose they can get. >> we are not turning down any opportunity to obtain havaccine for our team members >> yeah, opportunities are few and far between though tyson and other meat packing firms have come under fire for widespread outbreaks early in the pandemic managers at its iowa plant fired after betting on how many workers would get sick it prompted a congressional probe. in the last year they have instituted testing and other safety measures with their occupational health provider, and they have been using the time to educate workers about the vaccine, but the missing piece is supply. >> we're coming to these jurisdictions asking for 1,000 or 1,500 doses they don't know going in sometimes how much they will

have to actually allocate to us. and so that's part of the challenge, is really not having that line of sight >> tough for local officials when they've got walmart, amazon and other employers asking for big allotments as well in the meantime, tyson is giving workers four hours of paid time off if they can get appointments to get their shots off site. carl >> you know, it raises an interesting question there are certain livestock where you process by automation, but when it comes to pchicken it's hard to process by machine the smaller animals and that's why you have to have workers end up being close together at the facility >> yeah, they do and they've done some partitions with plastic sheeting and, obviously, they have masking and testing, but, ultimately, the best thing is going to be for people to be vaccinated. the one thing that helps with this time, they have really been

able to get more people convinced that they schget the vaccine, but the more people who get it, that is really the best evidence that it's safe and they are just waiting, like everybody else, for more supply to come online >> right thanks we will talk to you in a little bit. dow is up pnton50ois this friday more "squawk on the street" continues in a minute. i'm a verizon engineer. we built our 5g nationwide so millions of people could do what they love in verizon 5g quality. and in parts of many cities, we have ultra wideband, the fastest 5g in the world. this is 5g built right. only from verizon.

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. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and leslie picker. morgan has the morning off gains this morning as we watch continued signs of relief in texas. yellen's push for stimulus and we are getting existing home sales. for that diana . >> existing home sales in january rose 0.6% to a seasonally adjusted annualized rate of 6.69 million units, up 23.7% year over year and the second highest sales pace since 2006 the supply continues to be the problem. 1.04 million homes for sale.

that is a 1.9-month supply down 26% year over year, and that's pushing prices higher. median price of an existing home sold $303900, up 14.1% to an all-time high for january. things are selling differently depending on price points. home priced below $100,000 down 28%. million dollars homes sales up 77%. finally, the daes on market very fast, just 21 days to sell a home down from over 40 days one year ago carl, back to you. >> unbelievable picture in the middle of winter thank you. markets trying to get takeaways from yesterday's house financial services hearing about gamestop. joining us to talk more about that is fred, former ceo of td ameritrade and a current boe global markets board member. great to have you back good morning. >> good morning.

thanks for having me, carl. >> i am dying to know what takeaways you had. in general, you are anxious to get this out of the political sphere and move it into the hands of regulators where, hopefully, they re will be a judicious take what did you learn yesterday >> when you look at, listen to the hearings yesterday, so much of it was rhetoric and sort of i'll call it conspiracy theories of the people espousing, were talking about. and we seam to have lost the root cause of what's caused the issue here today, which is when robinhood restricted trading on certain stocks and at the root of that you have to go back to the settlement system the two-day credit. two days of credit that causes that risk, which causes the increased collateral and meanwhile, we have gone off on to tangents around pay for order flow shorting and conflicts of interest, which are things that have been around for

decades, are regulated and we seem to have drifted back to as opposed to getting to the fact-based analysis of what actually happened. >> if we zero in on the settlement period, are you optimistic for changes on that front, and do you feel like the infrastructure is there to handle it? >> well, keep in mind that four years ago we went from t plus 3 to t plus 2. when i was at ameritrade, we would have preferred t plus 1 but the industry agreed to go to t plus 2 instead i think all these things, why i want to get it out of the political sphere and into the rowi regulatory sphere, people understand how the ability to implement new regulations that actually can move this forward if we move this to t plus 1 or 0, that will take time because you have to get all the players to move along with it. i think with technology today, it's the right move.

>> speaking of technology, the ability to conduct a trade now immediately on your phone, this so-called gamification in trading, what are your thoughts? is it here to stay and what risk does it present? >> i do think it's here to stay. i think for as long as i have been involved with this industry, we have always tried to level the playing field between retail and institutional and make it easier for people to trade whenever they want however they want. and so the gamification is another sort of part of that evolution, as is social media, which is giving people information and ideas about what to trade and what to invest in so they are definitely here to stay y there should be a review of gamification and social media in terms of what, if anything, rel later should do in that sphere but the reality is, it is here to stay and we are going to have to get used to it. >> fred, i think one of the key concerns about the potential

gamification and addiction, which was another topic that lawmakers brought up yesterday, is this idea that it's so easy to trade options, easy meaning no friction with commission-free options trading, easy not meaning that it's possible to have significant losses there. how do you kind of distinguish the ease in which people can, retail investors can trade stocks and other types of kind of more traditional securities with those of derivatives? >> well, it is easy to trade a stock. to trade a der i have i have is not as easy as everyone is making it out. i won't fob robinhood because fon i don't know what they do. when i was at td ameritrade, you had to qualified to trade options and then there was different levels of types much option trades you could do you had to demonstrate that you knew what hurp doing and you had some education and training to move up that ladder. so there was friction at least from my perspective at least at td ameritrade in terms of option trading, particularly when you

have a trade where there is, you know, there is unlimited downside you really got to be careful with that and restrict people to make sure they know what they are doing before they place those trades. >> fred, it's not clear that's the case any longer, is it option volume, it doesn't take long to look and realize something has changed pretty significantly. >> well, there is no question, david. i can remember at td ameritrade 2% of our trading volume whereas, you know, when i left td ameritrade four years ago it was about a about a third of our trading volume what we saw was the root of options is in risk and premium as opposed to extreme betting where people are buying call options, yes, betting, a stock goes up, but a lot of the most common option trades are selling cover calls or buying covered puts where you are collecting premiums saying i will buy that stock at that price or sell that

stock at that price and those were the most common types of option trades. >> finally, fred, last month or two all we've heard about are risks to the retail investor and painful lessons and broken trades i think in general your point is that the retail investors never had it better. is that true >> i think that that's very true if you go back in any fact-based analysis through history the last 10 or 20 years, think about what the retail investor has today, they have free trading, free research, free investor education and they have faster and better trade execution than ever the playing field between the retail and the institutional investor is more level than i have ever seen it. when you -- the ironic part, when you stand back and look at all this, the party that seems to have lost the most in this whole gamestop trading wasn't

actually a hedge fund. it wasn't a retail investor and many retail investors did very well so in my mind they have done very well and they have never had it better based on smart regulation and the use of technology today >> fred, that's a great way to button up what we heard yesterday. obviously, we are not done talking about it by a long shot. thank you. have a great weekend. >> you, too, carl. thank you. we are continuing to monitor the crisis in texas. the grid failure leaving millions without power in freezing conditions in what is the state's worst blackout in decades. while power has now been restored for many, clean drinking water is an issue government officials are asking residents to boil any water before drinking it governor abbott speaking yesterday about how to avoid similar events from happening again. >> i am asking the legislature to mandate the winterization of generators and the power system.

second, i am calling for the funding needed to ensure that this winterization and modernization occurs. >> this morning crude oil and natural gas prices are somewhat mixed. of course, we will continue to focus on those commodities and bring you ubs on the situation in texas as it comes in. leslie. >> a harrowing story down there. after the break, treasury secretary janet yellen making a major push for stimulus. what it could mean for the job recovery next. plus, congressional leaders grilling the ceo of robinhood on the hill >> there were a series of steps that the robinhood securities team took to - >> at that exact moment did you have the liquidity for 3 billion? 5:11 a.m.? >> at that moment we would not have been able to post the 3 billion in collateral. >> representative anthony gonzalez will join us. "squawk on the street" will be right back

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the details haven't been diseased we have discussing events like the ones that i mentioned, and certainly part of the package, the parts that are permanent, will be paid for in order to not raise long-term deficits but we're still working on the details of the package >> that was the treasury secretary janet yellen on closing bell yesterday talking about the latest on

infrastructure spending and potentially as well dealing with climate change let's bring in pulitzer prize winning columnist for "the new york times" jim stewart. good to see you. i want to start with you on the 1.9 trillion relief package before we get to infrastructure. what is your sense there in terms of the impact it's going to have both on economic growth and perhaps even more importantly on the stock market? >> well, i think the question is, is there greater risk and overspending than in underspending, it's pretty clear. what's the risk of too big a stimulus maybe higher interest rates down the road maybe a little inflation but as yellen pointed out, we have the tools to deal with of this the risk of underspending is further and greater unemployment, downward spiral in the economy, possibly a recession. that is much harder to get out of it. so i think her point about the risk is pretty indisputable. the point more -- and, of

course, this is very good for the stock market, and i mean just look at current levels which i think largely are anticipating a significant stimulus that is very bullish and ironically, the people who own stocks and are benefiting from this, tend to be the ones that have not been hurt so much by the pandemic. specific elements that are aimed at helping people hurt by the pandemic i think it's a very blunt instrument it's not very closely taylor lettered to help those particular people, and i think that is something that troubled some of the critics. nevertheless, if what you are trying to do is keep the economy thriving, it's not going to be perfect. >> yeah. and to be followed as we heard from the treasury secretary by a lot of spinning on infrastructure now, that's something we talked a lot about through the years. many agree that that's needed. throwing that much money after 1.9 trillion, do we run the risk of overheating this economy?

>> well, i am a fan of infrastructure spending because i see that as an investment in the future of this country when you improve the transportation infrastructure, you are helping every single person and business that takes advantage of that over time. and it will repay itself in economic growth, higher unemployment, and eventually stock prices it is another form of stimulus i mean, i'd much prefer that to just handing out $1,400 willy-nilly to people because that is not really an investment ex st except to the extent it props up the economy. will it overheat i tend to agree with yellen. let's see what happens i mean, we have been in a very unusual and long period of extremely low interest rates the borrowing cost for the u.s. government are as low as they have ever been or probably ever going to be. if we are going to tackle this

problem, now seems like a really good time to do it and if we start to see inflation creeping back, and i am not saying it's going away, i mean, there are conditions in which it will return, we have better tools and i think better understanding of that and the fed can jump on that when we see evidence of that and that, of course, would many pushing up interest rates. that will eventually be a threat to very high stock prices. >> you know, jim, it sounds like the playbook out of treasury and the fed is that there will be signs of rising inflation, we are starting to sea it now, and things like texas don't help but it will be transitory and that back half of the year maybe you realize that it was more of a head fake. does that seem like a reasonable playbook to you? >> i think it is reasonable. i mean, much of the current spending in the 1.9 trillion bill is a one-time shot. and it will be like a boa constrictor swallowing a mouse it will work its way through the

system the infrastructure spending is permanent, but it is going to be spread over a fairly long period of time. it's not like whatever the number on there, say it's a trillion, is not just going to drop into the economy at once. some of these are not shovel-ready it will take years for this to work its way through so that will be something to keep an eye on longer term i think the immediate inflationary impact of the 1.9 trillion bill will, in fact, be short lived. >> speaking of one of the longer term goals, is an increase in the minimum wage to $15 an hour. what do you make of including that as part of the stimulus plan >> i don't think it should be part of the stimulus plan, frankly, because it's not a stimulus it has nothing to do with the pandemic whether there should be a higher minimum wage or not is a question that predated the pandemic and it's going to post-date the pandemic and i think everyone who studied the issue knows that there is a

simple trade-off yes, isn't it nice that you can raise wages for a segment much the population that isn't earning a high hourly rate, but the downside is the government own economic organizations have pointed out is they are going to lose millions of jobs and you are going to lose them right now in the very small businesses, like restaurants and bars, that have been hardist hit by the pandemic so i personally just don't understand why the minimum wage has to be tethered to a pandemic relief program why not save this for another day? why not have a spirited debate about this why not delve into the underlying economics of it, hear from the people that will be most affected, including the population that earns the minimum wage, many of whom are students, live at home it's a complicated issue and i think it deserves its own separate measure i heard biden say more or less the same thing. >> jim, as you are talking, some

of these reports are coming in from jpmorgan. it's an echo of what we have heard for weeks, that the consumer balance sheet is flush, their debt service ratios are low, their housing values are going to the moon and then this one line stands out. we expect consumers to blow out expectations based on the pandemic effectively ending in 40 to 70 days. i know, i mean, that's incredibly a hard call to make, but do you blanch when you see it >> i am a little weary of that i mean, you talk about risk to the markets, one of the things i am keeping an eye on is the vaccine rollout and the spread of these variants. and i don't see any cause for panic or concern, but those are very important issues for the future of the economy. let's face it, things could go wrong. the rollout has been rocky the variants are spreading in this country and i just got the vaccine, which i am really happy about,

but i was given a lecture that you can't really change your behavior because there are still risks out there. well, iv i know is changing their behave you're. they are throwing caution to the winds. they have had it with the quarantining and the distancing. so so i am keeping an eye every day at the infection rate to see how it's looking it's still pretty high but getting better i think something for investors to keep an eye on because it is a downside risk to the markets, i wouldn't want to say this is going to be over in 70 days. >> i can't wait to eat inside a restaurant. >> you and me both. >> i know. finally, jim, it's a topic we talk about all the time. we don't have a lot of time right now, but you heard yellen talking about infrastructure and climate. how are we going to pay for it higher taxes what would you want to see if you could at least advise in terms of what should be done for tax policy in terms of trying to pay for many of? >> i am an advocate of tax

reform you could raise some marginal revenue. over all, i have been pleased that the biden administration has not made raising taxes a high priority at the moment because if what they are trying to do to stimulate, they are putting all this money out in a stimulus, you don't want to raise taxes at the same time i mean, let's see how the stimulus works let's see what the economy is doing. if it really is going to be growing and doing really well and the pab is ndemic is behind, that's abthe time to talk about tax reform and raising additional revenues if that's needed. >> it will be a conversation for another day no doubt jim, thank you. >> sure. good to be here. >> take a look at the "etf spotlight" this morning. agribusiness up about 30% for the year, getting a boost from the top holding, deere, the equipment maker crushing estimates for eps and revenue, increasing the full-yore

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when we return, we bring you the latest on the robinhood saga representative anthony gonzalez joins us following his questioning of ceo vlad tenev in stdas arg. we are back in a moment. - [narrator] grubhub perks give you deals on all the food that makes you boogie. (upbeat music) get the food you love with perks from- - [crowd] grubhub. good morning! - grub what you love. this is where everything started. the four way is engulfed in history.

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♪ welcome back here is your cnbc covid update at this hour the decision to delay second vaccine shots to speed up delivery of initial coasts is getting spors from a peer reviewed study out of israel that finds the first shot of the pfizer/biontech vaccine is 85% effective as preventing systematic covid although one dose is 52% effective.

it involved young people and another israeli study says that pfizer's vaccine substantially reduces transmission protecting people who come in contact with the recipient. this comes after data suggesting that pfizer's vaccine may not be as potent against the south african variant. >> i think the thing that worries me most is that people are going to lose confidence in the vaccine at this point. we haven't seen any evidence that the variants effect protecting you from the vaccine. it's important that people get immunized. >> and as snow in memphis hampers operations at federal ex's main hub, they are routing vaccine shipments through indianapolis that's it's second largest hub along with regional sites in new jersey and california. carl, back to you. >> rahel, thank you very much. of course, yesterday you saw lawmakers trying to get to the bottom of the robinhood reddit

gamestop part of the market. talking about the overall gamefication of investing. take a listen. >> citadel is one of the winners. they make a lot of money they are the casino in this story in the casino tends to win over time. is retail, individual retail participation in the marketplace gambling casino gambling or using funny money? >> no, i believe that investing is investing. >> the vast majority of retail participation are people saving to meet their dreams. >> an opportunity for investors to participate in the market as institutionals participate >> contessa brewer covers gaming for us and joins us with more. >> hi there, carl. look, for starters, you have lawmakers who are asking people who have a vested interest in avoiding the kind of bad rap and onerous regulation of gambling i asked experts in gaming for sta starters-an expert in behavioral

addiction, asked about the bells and whistles and the notifications. >> whether it's on the stock market, you know, hedge funds, derivatives or whatever, this is actually a form of gambling. what you described is something like gambling where it's on your smartphone and you could be rewarded every minute seeing your stock go up or down >> now, look, investment platforms could snatch a page from the playbook of highly regulated gaming companies first, put all that data they are collecting on customers to good use develop predictive analytics to identify markers of harm that is, you know, if someone who has invested hundreds of dollars is suddenly investing thousands or someone who is new suddenly is engaming in high-risk options activity, identify that as marker of harm. informed user choice this is not just the warnings of about high risk activity but specific feedback about the investments being made and for instance how it might compare to

other users. it means using information that's already being collected to push users to decision-making that is advantageous for them. what the casino industry has found is that eliminating the addictive destructive aspects creates long-term sustainable customers, not those who flameout in fact, one more note here, the company that partners with mgm resorts on bet mgm is launching a similar initiative for video gaming and esports for much the same reason. in the long reason it boost us the bottom line, helps forestall costly regulation from the government guys. >> that's so fascinating thank you for bringing that to us you know, with robinhood in particular, one of the things that it pioneered was this idea, and you touched upon this, of, you know, bringing these kind of animated emojis and different icons into various trading aspects. by doing away with those, would that solve some of the concerns that it's creating addictive

behavior, or does it simply need more friction in the system to be able to trade >> the behavioral are addiction psychologist i talked to said there has never been an addictive lottery. why? because you have to wait for days to get the answer to whether you win or lose. he goes, but i could create an addictive lottery. they have, in keno, where if you are looking for that automatic input. so he says it's -- look, if you don't award free stock for signing up, surely that would help but he says that's not the problem. the real problem, whether it's gambling, video gaming, or investing, it's when it starts interfering with your life, starts interfering with your finances, if it interferes with your relationships like all azingss. this is when it's considered a problem and investment community, if they want to forestall this really onerous costly regulation, that you can see now the lawmakers are considering, that they might

want to go ahead and try to forestall it by using what these gambling companies have done to create services that really can predict those who might be harmed >> interesting a lot of the witnesses testified yesterday that they already have to abide by some pretty significant regulation contessa, thank you so much. speaking of that hearing, in the house financial services meeting yesterday on gamestop ohio congressman anthony gonzalez asked robinhood's ceo vlad tenev could the company have covered its deposit deficit of $3 billion when clearing house requirements came that the early morning hours of january 28th. >> at that exact moment did you have the liquidity for 3 billion? 5:11 a.m.? >> at that moment, we would not have been able to post the 3 billion in collateral. >> joining us now is congressman anthony gonzalez thank you so much for being

here your line of questioning really pinned down ten ef on this yordano ventura of what happened on january 28th, whether the company faced a liquidity crisis at the end of the exchange where you talked also about the fact that if they did face a liquidity crisis they would basically be forced to liquidate as a result of missing that capital call and you said, and i quote, we can't live in a world that my constituents could have dhar accounts liquidated so given what you heard yesterday, are you concerned about the risk in the brokerage industry right now >> first off, thank you for having me. and i think that was the crux of the question you are trying to build up, what is the so-what from my constituents and the everyday every. the so what is if robinhood would not have been able to make the capital call ultimately which they had to do by throttling their users we could have had a catastrophe at the

robinhood level. it could have had ripple effects throughout the economy we are on a fact finding mission and i think we need to keep it there. but we really need to understand what all could have transpired for not just the robinhood customers, but for the broader financial system in a world where there was a forced liquidation event. >> now, tenev says if there were short are settlement periods for various securities, right now it takes two days to settle a trade, if that were reduced to one day or instantaneously he wouldn't have had that problem because he wouldn't have had to post collateral in order to make sure that he could effectuate those trades do you buy that argument and could you do you think it's possible to recuse the amount of time to settle trades given what technology we have available right now. >> if you speak to those in the industry they will tell you that we could go from a t plus 2 to t plus 1 world, where instead of it taking two days to settle it

would take one that would reduce the amount of capital that would be required as clarm it wouldn't have taken care of the full 3 billion i don't think that's correct there is a lot of hesitancy around going down from t plus 2 to instantaneous for a variety of reasons and concerns that that would actually harm liquidity in the long run. so i think we need to look at shortening the window for sure, absolutely, and set t plus 0 and the destination, but we may have to make an interim stop at t plus 1 in the meantime. >> congressman, is it possible this was just specific though to robinhood and its business model? it's a fairly young company to say the least. not perhaps as experienced with r mana risk manage. is it possible it's a one-off that will not occur again as a result of them learning their lesson >> i think you have to ask yourself, what was the mechanism that led to this and the mechanism appears to be the gamestops agetting pumped

through social media and a lot of activity taking place there is nothing about what has transpired since then that would prevent another run on a stock like that. and so i don't know that the risk has been eliminated i hope that robinhood has learned their lesson certainly, but, you know, again it wasn't just robinhood who had to ceas e*trading. we saw this across multiple brokerages let's understand this better before we rush in and put any sort of regulations or anything like that. what we need to understand is what happened. >> sure. another reason i would assume you had the hearings as well is to sort of get a sense of whether there is a more level playing field in terms retail investor. many of your constituents. we have had plenty of guests, including the former ceo of ameritrade saying earlier, this is the best time to be a retail vefrp. you have access of information you could have dreamed about a

few years ago. you have the ability to trade freely, execute well would you agree with that? >> in the public markets it's better than ten years ago, certainly. i think what the robinhood situation showed is that there is still ways to go on that. but also i think we need to be honest about the fact that a ton of the value creation happening right now in our economy is happening in the private markets, which are completely frozen out to the vast majority of retail investors because of the credit and investor definition and things like that. not only do i want to expand access to great investment opportunities in the public markets, which is very important, but level the playing field for retail investors across this country in the private markets as well to provide vehicles for them to get in and participate on that side of the value creation engine which right now is completely shut out for most people unless you are, one, very, very wealthy, or, two, went to the right set of business schools and worked at goldman or something like that.

so not to attack any one firm, but that's sort of the situation that we have today and we agreed to find ways to expand that access while still protecting the stability of the system and making sure that the investment universe is suitable for everybody. >> congressman, i know that you said this you are currently in a fact-finding stage right now of the whole situation, but unlike a bank, if it's liquidated, its deposits are usually fdic insured. that's not really the case for brokerage firms and the accounts they are in. do you think there should be additional regulation that would protect the assets that are held within these firms at the risk of potential liquidation is that something you would be considering? >> again, i'll lean on what i said earlier we have to make sure this never happens to my constituents or anybody across the country, right. to think that you could go to bed one night, you spent your whole life building your nest egg, protecting your assets and

you wake up and because your broker-dealer can't make a deposit which is out of your head, all of a sudden your portfolio is liquidated. that would be a disaster it's horribly unfair and there would be very little recourse for the individual investor. we need to open up the hood and take a look at it. again, i think that the two places to look, the settlement period would help. if we shortened that settlement period the strae seems to mallorrally around that concept, i think that would be a good idea. beyond that i think we need to be very thoughtful about how we move forward in that space. >> yeah. thanks to your questioning, in hindsight, we know it could have been a heck of a lot worse thank you, congressman, for joining us today. >> thank you >> as we head to break, take a look at shares of novavax. it's up sharply this morning after the drugmakerk struck a deal with gavi to supply over a bill doses of covid drugs for international vaccinations we'll be rightac bk.

bitcoin towards another record today 3.5% gains 53554 currently, approaching that $1 trillion market cap level. "squawk on the street" will be right back

how many of you wiant to bay for your neighbor's mortgage who can't pay their bills. raise your hand. president obama, are you listening? >> how about we all stop paying our mortgage it's a moral hazard. >> this is mob raul here i am getting scared. >> a chicago tea party in july all you capitalists that want to show up in lake michigan, i am going to start organizing. >> that was our rick santelli 12 years ago today speaking of which, let's get over to the cme. hey, rick. >> hi, carl.

wow, 12 years has flown by i need to weigh in on that a little bit thank you for showing that i don't think i would have mentioned it i am very proud. i never had anything to do with the tea party after i lit the match. and i didn't light the match intentionally. i lost it for a day. you know, americans like to follow rules and if they don't like rules, you really need to follow the rules to change the rules. and no matter what you think of the tea party movement, as you think back it was very peaceful, very orderly, and what they did actually had a plan and oresultd in progress from a political standpoint, which was their goal they had a turnover in the house, the biggest at the time, in 2010, in 64 years, going back to 1946, giving them the biggest majority in 64 years so there are ways to change things you don't like in america, and i think sometimes we lose sight of that. we don't want to cancel people we want to raise people. anyway, enough said. let's get back on getting real

on interest rates. now, let's show some charts because right now in real time things are happening so let's look at an intraday of tens and 30s they are hot they are both trading as you see on this week to date chart above the intraday high levels whether 133 in 10s or 211 to 213 in 30s. if you really want to look at what's going on, let's move to some bigger areas regarding 10s and 30s, and what you can see there on the bigger charts that we are certainly making a type of progress on rates that we need to pay attention to so let's get to it safety versus return okay when we get real on rates, that's what it's about safety versus return in the old days you say risk versus reward. here's the problem that safety issue became not necessarily an argument, avoid the bigger moves on longer ma

maturities put my money in the sovereign debt complex because i want back my principal there is a lot of risk here. this money is for being safe get back the principal morphed into getting back most of the principal because interest rates around the globe started to go negative and now we are in an inflation cycle where people are worried about it if you believe inflation is 1.5, 1.75%, things are close and things will pop dwhwhen they moe into real territory. it paints an inflation loop. you think temporary, but even bigger jumps in inflation that causes more nervousness and really does bring up that duration argument where you only want to hold paper that's shorter before it matures. now, finally, the treasury is giving a huge gift to the fed and hardly anybody has been talking about it it's hundreds and hundreds of billions of dollars and it's going to start real soon it was announced arp february funding. treasury is going to empty out

the balance sheet, which really ballooned trying to deal with covid. remember mnuchin's policies. those hundreds of billions are going to start moving off the general account into the fed's balance sheet and most likely into the markets and that is something you'll want to pay attention to carl, back to you. >> rick, thank you rick santelli. a lot of earnings movers this morning. keep your eye on amat, tripadvisor, some pent-up demand signs. then the other side as well. dropbox down on a soft guide rackspace is down on a full-year forecast that fell short go to cnbc.com for more on today's movers we are back in aomt. men your daily dashboard from fidelity -- a visual snapshot of your investments, key portfolio events, all in one place.

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in honor of black history month cnbc is highlighting voices that are making an impact, and that includes a spotlight on goldman sachs 10,000 small businesses initiative we're joined this morning by the partner and global head of corporate engagement and president of the goldman sachs foundation and the co-owner of the crabby shack and an alum of goldman's 10,000 small businesses program welcome to both of you it's great to have you >> great to see you. >> we all know goldman has been

pretty aggressive in helping to address inequality in business the initiative is not new, but can you talk about what it does and the progress you've seen >> absolutely. we launched almost a decade ago. our commitment to helping small businesses across the country over the last decade we've reached 10,000 small businesses and, as you know, our ceo in december announced another 250 million. our hope is these small businesses not only survive but drive and become large businesses they're facing any number of challenges whether it's related to capital, to their network or keeping their businesses strong and going. >> are you having -- before we get to fifi, are you being overwhelmed with candidates or if it's a bit of a dig, and what's more important the access

to hard dollars or the softer like rolodexes and people that you might meet the demand for the program is significant and only growing in terms of what's needed it's both our business owners tell us what they need most is that network to be annal to grow and expand their business but they need the capital. you and i know it takes money to make money to be able to launch that new product, hire that influencer they need that capital in order to grow their business >> what is the status of your business right now amid the pandemic and everything else going on and is there anything you learned or were able to take away from that goldman sachs initiative that helped you better weather some of these harder times >> our small businesses right now have been extraordinarily resilient. business owners like fifi have

become creative to meet the times. we're seeing trends of them being more tech enabled, more digital. one of our business owners was doing large catered corporate events that dried up. and now he's doing micro weddings we're seeing businesses shift and also planning for a post-pandemic world in terms of diversifying their business stream and platform across the board. in terms of surprises that we found in terms of looking at our data one relates to black business owners. in particular we looked at the longitudinal and found black female business owners were the most educated subgroup in the entire population. a whopping 86% of them having at least a bachelor's degree. but as they entered our program they also had the lowest median revenue earning 47 cents on the dollar compared to their white male peers while we're facing the same storms we're not all in the same

boat >> fifi, i would love to get your take on that. >> we struggled in the beginning. we had a lot of -- we quickly realized we needed to pivot, but we quickly implemented a growth plan i created with the goldman sachs 10,000 small businesses. now we're shipping our food nationwide which is just what we needed some of our other challenges, you know, with the ever-changing regulations and the cost that it entails to keep our restaurants and bars afloat, for example, with the outdoor seating structures they're expensive. right now i have three ables i'm allowed in my store. that's certainly not sustainable for us >> what does the next -- i'm trying to think about how much runway visibility we have right now given all the uncertainties but for crabby shack and your business, do you have a plan for the next year? does it seem optimistic?

>> absolutely. we absolutely plan on continuing to ship nationally we are headed in the direction of retail. we would like to put our goods inside big name supermarkets we also want to continue to sort of segue into licensing smaller business models such as -- smaller business models we can sell our food on a smaller scale. >> food service has been a challenge but also has unleashed this whole period, as you know, so much creativity and thinking of business models differently than we have in the past our thoughts are with you and our best wishes for crabby shack and your business. our thanks to you for all that you do great to see you >> thank you great to see you, too. >> thank you so much on this friday we will wrap up "squawk on the street" after a short break.

here's aj! when are you going back into the office? i don't know dad... ♪ well we have a safety net. we'll be ok right? ♪

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texas. 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ ♪ ♪ happy friday welcome to "squawk alley." i'm jon fortt with carl quintanilla and julia boorstin this hour consumer apps have dron tons of attention the past year whether it's investing in social media or audio. now there are shake-ups across the board. vlad the apologizer, more on the robinhood's regretful tone in the gamestop hearing, we'll look at what to make of australia's strong stance on