yesterday. and the nasdaq indicated up by 304 points that's skaignificant too. all of this coming as there ar early indications, early indications, that maybe omicron is a weaker variant. that would be very good news yesterday the dow, the best performer of the dow was unh, united healthcare, maybe on the idea that things aren't as bad, not as big of a deal, we'll see the experts are saying we need a couple of weeks on this, but a lot of optimism and wall street feeling that looking at treasury yields you'll see right now the ten year is yielding 1.44% picking up a little bit. 30 year right now yielding 1.775% and this morning if you look at what's moving. cruise stocks are up as again if you think it's reopening play, there you go you have all those cruise stocks

up by 3.3% or better airlines up too. american airlines up by 2.5%, leading the way. energy stocks are up as well marathon up by 2.8%. that's because crude yesterday was up significantly, a gain of 5% or more yesterday best day since august 23rd. all of this as the idea if the reopening stands you'll see more demand for crude oil right now wti at $71.59. a major management shakeup this morning, shakeup taking place overnight at samsung the south korean company replacing the heads of its three major business units and merged the consumer and electronics business into a single unit. the shift reflects a change in the source of profits from the company from tvs, to smart phones in the 2010s and now to

semiconductors so a big change in what that company is going to look like, what their makeup is going to be and how they're prioritizing the business joe? >> we are a global network, that's for sure. the individual business units at samsung and we're -- i couldn't name who ran any of them, i'll tell you that but the changes are significant, i guess. in terms of background, guys, are we ripping we asked if omicron is not as bad do we start ripping? if so we're ripping, but the question remains, do we rip past the highs? >> this isn't a real rip yet >> not yet we're not we're still 3% off or more than that for the dow and s&p. >> this is still front and center, as recently as june they were going to end the taper, that was last week they said june, now it's march what does that mean? did suddenly it -- it really is all happening after he got reappointed. now inflation is not transitory,

we may raise rates in the spring of next year at this point >> it's an accelerated pace. >> is that more important than omicron? >> if you think that omicron is not actually going to impact supply chains, is going to be very mild, then it would have a lower impact on inflation and therefore the whole thing may be in reverse. >> i'm going to stick with omicron, you guys can do omicron. but my whole speech yesterday is right here my whole speech about what we call it, omicron, o-micron, in classic creek it's omicron >> i prefer to say omicron but i had people telling me you're supposed to say omicron. >> people in fraternities that would know better than i would. >> how would plato say it, it says nobody knows.

>> i prefer omicron. >> people in fraternities that know better? >> people in fraternities have been lecturing me. >> i like au better -- >> i do to o is weird >> andrew's eyes are going to glaze over that saying oomm to you can get you back into it, can't it it's like one of those words the hypnotist gives you. >> boom. >> you go like that. we'll move on. i thought that was the question. this is ripping. this is 1,000 points in two days. >> except the nasdaq is 6% off its all-time highs that's the one if you see rates higher you expect it to have more pressure on it. >> it's up a lot the russell i think was bad too. bitcoin is back, we didn't mention that not back 42 it's back to 52 or so. around there, i guess. >> it is >> uk drug maker glak xo said

their vaccine retained against the omicron. the company says the difference wasn't significant the results confirm earlier lab data that showed the treatment maintained activity against several of the -- i'm going to call it the variant because meg says omicron, i've heard meg say omicron. >> stick with me stick with me. >> in the dictionary there's two equal -- >> meditate on it. >> you like the oomm i don't want to lose you. >> i think that's what the pros say. i'm an amateur but i think the pros say oomm. >> did you read the article today? >> i did >> i read it days ago that classic greek would be au. i felt like i've been sort of out of -- whenever i say it, i

feel like i'm going against the grain. >> isn't that your comfort zone. >> i'm ready to go ahead and comply i'm nafraid to not comply with anything anymore. >> i feel going against the grain is your comfort zone. >> it is in the meantime, shares of mongodb are soaring after the company posted a loss of 11 cents a share, beating the 38 cents the street was expecting the company raised guidance for 2022 and is now expecting a smaller loss than analysts had been expecting you see the stock up by about 21%. >> meantime, intel planning to pu publicly list shares in its mobilized self-driving car unit. the move could value mobile eye at $50 million

the israeli company acquired it in 2017, it has a chip based system for self-driving cars the ceo is going to join the gang on squawk later this morning. there was a comment by the ceo of mobileeye going after elon musk in terms of how tesla is using cameras. so interesting stuff meantime, coming up, i'm going to take a quick trip this morning to goldman sachs and i'm going to rejoin everybody at the top of the hour. in an exclusive interview with the chairman and ceo david solomon. stay tuned for that. you're watching "squawk box. take a look there live at the nasdaq market in times square. we're back after this.

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tesla is replacing cameras in the front fenders of some of the models s, x, and three vehicles internal communications said the cameras have faulty circuit boards and could fail before they need an upgrade or replacement. the cameras enable auto pilot and smart summit they also provide drivers with visibility into what's happening around the car's blind spots when the cameras aren't working,

drivers see a black box or choppy video feed. tesla is replacing the cameras at its own expense but it has not issued a voluntary recall. i never thought about it really until reading this all of those auto pilot things at some point, electronics break down, you know you're going to get a slightly different set up for something like that. i guess the good news is, the car is able to recognize when that technology is not working because that would be really bad if it didn't. >> i was reading about, you know, intel, i mean, all these companies. i guess it's coming and then i was just thinking so you're just going to be sitting back and then i was thinking, this stupid thing isn't actually not going to go on the shoulder to get around this traffic. and you're going to be sitting there -- >> and it's going to be going the speed limit. >> and it's going to sit there, i won't do anything, i'm going to wait in traffic.

>> sheep sheep. >> go over the median strip -- >> you do that >> i -- if -- i -- it all depends. if there's no cars -- if you definitely can get into the -- let's say you were in the express lane and it's just stopped -- >> that is so dangerous. >> and there's this tiny little median and everybody is fine can't you -- >> that is so dangerous. you go into the fast traffic lanes and what if somebody comes along whoosh that is so dangerous. >> i don't know if i want to sit there at the mercy -- >> you need auto drive i'm convinced, auto pilot. >> meantime, i don't want you to see me cry, but if elon musk gets any more -- if i love him anymore -- i'm okay. i'm okay the last -- the stuff he's been saying recently i love this guy so much. elon musk is criticizing a key piece of president biden's build

back better plan he says can it can it can it in an interview with "the wall street journal" musk said the bill -- if anyone would want it, it would be him. it includes federal funding -- i know he's done well to this point. finish reading federal funding for electric vehicle -- the free market does do things pretty well. that should be scrapped. >> easy to say once you made all of your money off of it. >> right but he didn't write the laws may have lobbied for them. but it would add to the country's deficit. under the plan consumers would be given a tax credit if they buy an e.v. built by union workers -- >> which tesla is not. >> he loves china, that part is problematic. nonunion factories like tesla would get smaller credits. elon musk said he's in favor of dropping all subsidies

joining us is tim higgins, tesla, elon musk and the bet of the century. did i overdo it with my tears? he talked about bernie, talked about the woke progressive left, and he's definitely -- he's moving to texas to get away from taxes. you like him now or do you not like him now you're not with the opinion part of "the wall street journal. you're with the other part, i guess. >> he's absolutely become a libertarian, right and it's revisionist history because tesla and elon musk have definitely benefitted from those government interventions over the years. in fact, in 2018 when the company was near bankruptcy, if not for those tax credits that people were getting for the model 3, it would have been that much more expensive and tesla would have been that much more in trouble as it tried to generate the money it needed to stay afloat with the sale of those cars so tesla and investors have benefitted from

the government's help of the e.v. sector. >> so it's -- you figure it's like, okay, i've got mine, so now i don't want anyone else to get theirs you look at it with a sort of raised eyebrow >> he definitely is sounding like a big auto maker now. toyota is also unhappy with the proposed e.v. credits because they too would not benefit from them in the same way that a general motors would it goes back to years ago when traditional auto makers were pushing back against the benefits that tesla was going to benefit from you want to protect your own, it's natural >> tim, i'm worried, that plant is attacking you, it's your shoulder, are you okay that thing is coming after you >> i'm in the woods, man >> you think he's okay, becky? i was saying, what is becky laughing about

oh my god it's like that -- what's that great broadway play -- >> "little shop of whorrors" >> yeah. >> that one. >> he does what -- he's fearless, and he's -- you know, he's the richest man in the world. isn't there any way that he could believe that as a libertarian that the private sector is so innovative and all the government does whenever it tries to do something for the private sector usually all it does is screw it up, because usually no accountability. people would say they bailed out the financial system, that they're socialism and corporatism for big companies, but in general, don't you see most innovation coming from the private sector and he could really believe that this is, you know, just philosophically what his viewpoint is >> sure. you look at spacex, that was born out of the idea that the government wasn't getting to space in a way that was

efficient and practical and the energy needed. he went into spacex hoping to ignite interest in the space race and ultimately they've become this giant. you look at him in the last decade as he kind of pushes back against government agencies he feels are in the way of his companies. so yes, elon musk clearly has a long track record of kind of -- of pushing back against the rules that government have out there because he feels like they're in the way of innovation >> he also said something about the -- i guess this is an aside, but what political offices should be restricted to those in their -- you can't run once you're past your late 60s. they went over the list of -- a lot of people would have to leave office, including the current president and the last president, and the majority leader -- all over the place it reminded me of zeke emmanuel,

you have to refuse medical treatment at 70 but then he got to 65 let's push that back do you think he'll change as he gets older >> sure. probably some of this is borne out of the fact that he's in a fight with the likes of bernie sanders, who are pushing for more billionaire taxes, elon feels he's paying enough in taxes and is unhappy with this political conversation in d.c. that seems to be against him. remember, you know, years ago the democrats were excited about the tesla and the vision of the future elon was putting out with green technology and now clearly they're at odds here and he's finding comfort in places like texas. >> you have aoc on the other side, maybe saying somewhere between 40 and 60 is -- maybe she's -- hey, becky. over the weekend when you had that one tweet where you had

someone posit that they didn't like elon musk's big tax avoidance scheme by paying billions in taxes. i really like that he's so clever for that tax to send 5 -- i don't know, to send billions to the federal government to avoid taxes. did that make any sense to you >> no. no that was somebody just looking for -- >> that was someone who doesn't understand the tax system. i get it all the time. how rich people got after the tax cuts in 2017 they have no idea. they have no idea, obviously, how those taxes affected at least people in new york and new jersey i don't know where to go from here with this tim i just wait for the next tweet you know what's coming next? the s.e.c. is going to be in his sights again because the s.e.c. is looking at -- into tesla again. don't you think we may hear something.

what did he say s.e.c. stood for last time, becky >> the whistle -- i forget it was something i'm probably not allowed to repeat anyway remember we talked about the whistle last week? >> yeah. >> that was because of this whistle-blower they are now saying tim, what's the back story on this, the whistle being sold because of the whistle-blower, is that real >> that's the suggestion and there's been several supposed whistle-blowers that have come out. the most recent one concerned about disclosures related to solar panels, that's come out in the last few days but elon has been aggressive against pushing back against employees who have blown the whistle in the last few years. you're also going to see regulatory push back from nhtsa, the regulator that oversees safety of cars elon has a lot of challenges with the u.s. government in the near future that he's having to

navigate. >> one thing he has not had problems with is the chinese government to this point however, tensions are ramping up rapidly between the united states and china it's a problem not only for tesla but companies like apple and others too how big of a problem could that be for some of of these companies that rely pretty heavily on their goods being manufactured in china? >> it's a huge risk. especially for a company like tesla where a huge part of its sales are now being jen rated, a large part of its future growth is there it has a very sweet heart deal to get into china. the first u.s. auto maker to get in without a local partner it's benefitted greatly from china and the challenges there with the u.s. could, of course, create headaches for elon. you saw him last night trying to navigate that in the interview with my colleague, joanna stern talking about the benefits of china but he doesn't agree with

everything they do. >> i feel bad for a lot of people, tim, in that regard. we've talked about it a lot here do you have a primer on corporate morality in dealer with china do you have any idea how you walk that line what do you do your business suffers or you go along as an enabler for some horrible stuff >> right that's the debate. you've seen that debate around the things that apple has been doing, trying to navigate its business in china, its business in the u.s., around the world, you've seen it with tesla, you've seen it with the likes of general motors, a huge part of their business has grown out of china. this is one of those things that's part of the modern age of doing business in china. >> if you're a realist, musk is right. china is here to stay. there's no way to not engage with china i think we just have to hope that things start changing

internally over there. i don't know whether -- i think milton freedman said that was going to happen. it was going to happen 20 years ago and it hasn't. tim, thank you are you all right? that didn't bite or anything, right? you know what else it reminded me of? body snatchers that's the way that -- >> tim you can't see this, but there is now a plant directly behind joe as well. >> that's the way it starts, did you see either of the -- that's the way it starts -- >> you got to watch out, man. >> because the pot actually grows out of you >> the threat is real. >> tim, thanks for playing along. >> thank you, tim. >> good job, mack. >> that was speedy when we come back, instagram announces several new measures that it says will keep teens safer on its platforms

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welcome back, everybody. meta's instagram has unveiled new features that it says will make the program safer for teenagers, it includes tools to keep teenagers safe. this does sound useful, instagram is going to be blocking users from tagging or mentioning teams who don't follow them. it will give parents more control over how long their children use the app

starting in january, users will have the option to bulk delete their own content, including photos, videos, likes and comments, but the one thing saying you can't comment on somebody. >> great idea. >> that's a very good idea if you're a follower, okay but if you can't say that stuff that seems like a protective bubble. >> i heard that and thought that makes -- can you imagine getting ganged up on -- >> by idiots you don't know or who don't follow you. >> i can. >> yeah. >> i know it's called twitter. >> i can imagine being ganged up by twitters i don't know it's happening now. >> here in studio or online? >> i know everyone in studio ganging up on me the ones i don't know. >> that would be a useful thing. that's a good tool, i think. >> it is coming up, a new study says work from home is here to stay. we'll talk about the future of offices next as we head to break, a look at

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good morning, and welcome back to "squawk box" live from the nasdaq market site in times kwar square. checking the futures this morning, 360 points added to 650 or so yesterday comes to almost 1,000 points or a little bit over that after the rebound from last week's selloff as maybe what we were hoping for in terms of the half full view of this new variant maybe that was justified that as it evolves and if it does become more

contagious, and historically with some viruses we've seen, they become much less virulent and that would be good also be good if both the antibody drugs and the vaccines and the immunity from people who have already had it if all of those would work against the variant. there's some indication that the worse case -- >> some indication that the vaccines are probably still working. i think there are questions about the natural immunity that may be why -- because in south africa. >> might be a weak case. >> right that would be great news. >> not a single death yet as of yesterday. >> they're saying it's still too early. but this is cross both fingers, super hopeful. >> for this variant. >> for this variant. >> you'd think that after -- these greek letters have been around how long, becky >> a long time. >> yeah. i think thousands of years is accurate it's the 15th greek letter

isn't there a frat somewhere, tap a keg of brew, isn't there someone who knows how to say the 15th letter of the greek alphabet properly? >> someone says omicron is british and o-micron is the united states version. >> we know it's twitter. >> that's correct. we're going to talk about what's been happening in the work place working from home is here to stay according to a recent study. the study says that the pandemic, in our view, has pushed through a desired increase in workforce and employer flexibility that was already slowly developing pre-covid. i don't know about the employer wants on this, but i know it's what workers want. joining us right now is la salle network's founder and ceo tom

ghimly and tsedal nimbly. let's talk about this, it must be music to your years >> it's music to my years because it's consistent with the data coming out over the last year and a half. and that, in fact, what covid did, march 2020 is accelerated the virtualization of work, which is what the study from ber berkeley's is showing. so all the numbers along the lines of over 58% of employees needing and wanting flexibility is consistent with what employees have been saying across sectors, across industries and it's also consistent with what we know of when you give people flexibility with work and nonwork. >> tom, i think that barclay's was looking at this and it was seeming that it was suggesting that this was something that

workers and employers have wanted i know workers have wanted it, i'm more dubious about the idea that employers have wanted this along the way. it seems they're giving in because they have to acknowledge it worked over the pandemic and it's a tight labor market so maybe they have to be willing to concede to what workers want right now. what do you hear from employers? >> that's right, becky, the latter point is the most important. unemployment is at record lows and we are in a supply and demand not only with the products we want to get, but we are in supply and demand with people and as long as we are in record low unemployment for white collar workers, we are going to be in a situation where there is going to be more of a hybrid workforce. one thing we know for certain is that nothing lasts forever so we will see where things sit, a year, two years, three years down the road with a hybrid or remote work situation.

now, what employers will agree with employees on, is that for really specialized people, unique talents, they'll hire people who work anywhere, technology has allowed that. what's happening now because of low unemployment is that the average worker is being allowed that remote capability and in a different employment market that wouldn't happen. >> you think this is going to get unwound at some point? >> as i said before on the show, i believe that remote work friday is the new casual friday. and it will be that way for the foreseeable future and what i see is a hybrid of at least tuesday, wednesday, thursdays of companies going to bring people back in the office. i talk to ceos, hr, department leaders every day about what they want. and the continuity of the team is important we're seeing higher turnover and quit rates not because companies can pay more but because people

are easier to poach when there's no in the office community anymore and employers and ceos and hr leaders realize this. they want people to come together to create that sense of community. when you wanted community at work -- >> you make it sound like jail we want everybody together so we can lock you all up here and nobody else can poach you. >> no. see, i've said this before on the show, becky. what we have is why do we want kids in schools? in. >> back to your cells. >> why do we want kids in school >> so they can learn and be together and learn how to socially develop by the time you're 45 or 50 years old, maybe you're done with people, done with the social side of things and you have other things you need to do like take care of your family. >> well, there -- >> there's an assumption here that you can't clap rcollaborat, innovate, have culture if you're

not co-located that's not true. think about global organizations. they've had distributed workforces forever, for decades and very effectively so what i see is that companies and organizations, and i'm talking to the ceos and vps as well, they need to level up so that they understand how do you build and retain culture when not everyone is -- when we're not all co-located to say that in-person is a panacea, not true. >> tom >> let me draw a parallel. i'm not preaching that i'm -- i'm a very non-faith based, i'm a logical thinker. if we draw the parallel to religion, we'll have people criticizing the megachurch all the time, because there's a lack of community what people want in their faith is they want to go to a place where they pray together, they're with each other, to be with each other, not virtually,

they want that sense of community. you have that with your family, with your faith and in work of where you actually get the income that drives everything else is your life, people want that whether they want to have the commute to get there every day, that's the question. >> that's a big question, that's a huge part of work. it can be two hours of somebody's day, which is a long extension. let me ask you this, too, rather than comparing it to jail like i did or church like you did in the sense of community let's look at it from the perspective that sometimes employers are not going to trust employees. shepard smith had a story about a guy who fired 900 people on a zoom call because he found out they were doing two hours of work for eight hours of pay. how much is this i don't trust you? >> very minimal. i think it's a minimal part. i don't believe that trust has a lot to do with it. there are employees who come to

work and don't work, right every ceo knows that every ceo has fired people. >> jim is here. >> you brought up jail there's white collar jail, too, becky. people cheat in everything this is about a sense of a ceo's job is to have vision of where things are, two, four, five years down the road. not today. today is what's going on in the operational to keep the wheels on the bus going what ceos view is, where are things going to be down the road in two or four or six years and what do we need to do as a company to be able to compete at both a national, local, and global level and that's what ceos are saying. >> they are playing us out we have to go. that was fun come back both of you, we'll do this again soon. >> we're off for number ten or 12 coming up soon together, becky. >> see you later take care. coming up, andrew is on his

way to goldman sachs you're not going to -- he's going to interview someone there. bring us an exclusive interview.

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breaking news from american airlines, let's go right to phil lebeau hey, phil. >> reporter: joe, we've got a leadership transition taking place at american airlines, the company announcing long-time ceo doug parker will be stepping down from that position starting

march 31st of next year. he will retain the title of chairman of american airlines. his replacement, his long-time lieutenant and the president of american airlines, robert isom, he will become ceo effective march 31st so you will have robert isom as ceo march 31st, doug parker remain as chairman these two go back a long ways, talking about american west together in the mid to late '90s robert isom prior to being president of american airlines was the coo when american came out of bankruptcy and who orchestrated american coming out of bankruptcy as a merger with u.s. airlines was doug parker. he's been here eight years as ceo. but he will be stepping down not a surprise, guys many people knew that doug parker would want to make this transition take place. i'm told this is something

parker and the board have been discussing for a while not surprisingly, doug parker announced he will be stepping down march 31st. you don't want to miss the interview we have at 7:30. we'll talk with doug parker and robert isom here at the american airlines operations center on a big day for the airline as they announce a transition to a new leader starting in late march next year. guys, back to you. >> phil, question for you. doug's only 59 why walk away now? >> reporter: he's 60 >> oh, 06. >> reporter: he's been doing this for 20 years, becky he's made it clear for some time there's a natural point you say, okay, i have done what i wanted to do. think about his career when he was at america west, he became ceo ten days before the 9/11 attacks he guided them through 9/11 --

post-9/11, even though america west were not involved the industry was rocked. there was the recession, he got them through that. america west then merged with a bankrupt us airways and who was the person who put that together, doug parker. they became the fifth largest airline and us airways was successful, they never went into bankruptcy but when american airlines went into bankruptcy doug parker saw an opportunity to get the size and scale he was not going to get at us airways and in 2013 he put together the deal he would combine us airways with american airlines coming out of bankruptcy and been the ceo of american ever since, since 2013. it started trading again december 9th of 2013 we're coming up on almost exactly eight years. >> that's a heck of a run when you think of it that way, ten days before 9/11, through the great recession, and then having to deal with everything that

happened with covid to the airline industry that's enough to make anybody tired. >> it's a huge run name another industry you had one ceo who's been a part of two huge mergers like that and has been continuously the ceo of an airline for the last 20 years. i can't think of any period in the airline industry like this. >> when's the last time he had a -- like a calm night's sleep where i don't -- nothing is on my -- just i don't have a care -- >> yeah. >> i don't have a care in the world. i'm just -- i mean, every night you go to bed. it's like you get the phone what that business is -- that business -- and especially in recent years i love him i've spent time with him, he's a good golfer, he's just an awesome guy. >> reporter: joe, think about the last three years, going back to when they lost the use of the 737 max.

i mean, they lost the use of their aircraft because it was grounded by the faa. >> go back two weeks. >> reporter: that was a series of issues outside of their control. the pandemic is not something that american airlines could control. >> what happened a month ago when they can sell like a lot of the airlines specifically. a couple weekends, you couldn't tell what went wrong it was blue flu combined with weather, combined with air traffic. you try dealing with people when you cancel thousands of flights? haven't you been there when the front line people have to deal with the public at the airports. even me, i have been the public. nobody needs that. no when do you think the last time he had that blissful. think about it. >> out i i'm sure it's been a while. look, he's been planning this

for some time. this is not a surprise within the industry people have known for some time that at some point doug parker will step aside, robert isom will take overas ceo we will be talking to both of these gentlemen at 7:30. you do not want to miss this exclusive interview. >> you got it. now you caught the bus coming up, president biden will have a video conference with putin later today. he is expected to issue a warning. details next details next >> ♪♪ move your money to sofi. download the app and get your money right.

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president biden is expected to warn russia's president putin of heavy sanctions if he escalates action in ukraine.

kayla, this is one we have been watching pretty closely. >> becky, good morning, it's a high stakes moment with putin seen on the brink of war president biden with the backing of key european allies is expected to warn russia's vladimir putin against invading ukraine and threatening collective action with nato allies among some of the options discussed, if putin foregoes and ramping up defense capabilities if nato countries, imposing financial sanctions the biden administration describes as severe >> it's about conveying that the right path forward here is through diplomacy. in the meantime, on financial sanctions, we have consulted significantly with our allies and believes we have imposed snfk and severe harm on the russian economy. you can call that a threat, a fact preparation, whatever you want

to call it >> a senior administration official said monday similar to 2014, the u.s. has intelligence for possible escalation. washington doesn't know whether putin issued a directive to innovate he wants to avoid using american boots on the ground in ukraine certainly putin has issued his own threats, suggesting last week, his red line is the expansion of nato forces into ukraine. he wants legal sources to assure that is the case they said any top of sanction should be tabled for later. >> kayla, this is all happening while we have tensions building with china as well i guess another question that comes up is what are the odds that russian energy producers are actually targeted in. >> well, certainly, that would be the avenue that would create some of the most democratic devastation for russia

energy supply is low going into the winter price have been skyrocket even more than here in the u.s. a senior state department official says that to alliances are valued they will do whatever they need to do, even if it is painful from a cost perspective a. senior administration to me yesterday seemingly taking a different tone, suggesting they want trans-atlantic unity. they don't want anything too costly in europe they're working with congress on a package that would potentially pass here while also deter russia and not disunifying europe. >> kayla, thank you. okay coming up, i am here at goldman sachs this morning for an exclusive interview with the ceo david solomon. that is straight ahead right after this after this zplmplts

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zplmplts. futures surge yet again this morning after yesterday's gains. time lines and rates in focus. we have an exclusive interview with goldman sachs ceo david solomon and crypto and outlook for 2022 breaking news in the last few minutes, american airlines

ceo departs. he will join us along with his replacement president robert isom the second hour of "squawk box" begins right now ♪♪ >> good morning, welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin and becky quick and joe kernon we will be brigg you an interview with goldman sachs ceo david solomon. we will talk tax, inflation, the impact of covid on the economy and crypto currencies and so much more. take a quick look at u.s. equity futures right now. the dow looks like it will open 250 points higher. the nasdaq is up 280 points higher >> let's go to dom chu for

what's moving in the pre-market. >> so a lot of that move andrew referred to, joe, is because of that reopening trade coming right back the out performance in the nasdaq comes from plays beaten off in the sell-off. let's call attention to the economically sensitive value cyclical trades. royal caribbean is up. los vegas sands up 3% as well. american airlines, more news on that front you guys will be talking about. up 3%. free port, up 2-and-a-half%. 2-and-a-half for diamondback energy a couple of interesting calls out this morning are going to get some trader attention. first of all, let's call your attention to the nearly 2% gain in apple shares. in and of itself not a huge deal it's about $168. 27% year-to-date

over the course of the last couple of weeks here, you see during the market volatility, things have gone well for apple. one of the things may have to do with analysts at morgan stanley, led by that team, who were basically saying they were maintaining their outperform rating, now are putting the target price up to $200. the reason why that's important is $200 is the street high with regard to target price for apple. why they did it. >> they think you have to price in new hardware. specifically vr and ar technology this is from the note. while vr technology has captured greater investor attention in repeat weeks following facebook's rebranding, we would note that apple has been meth oughtically developing ar and vr for years. also watch what's happening with tesla, shares working on a four-day losing streak down roughly you see 19/20% from

the record highs we saw over the last couple months it's catching a bit today thanks to analysts at ubs who maintained their neutral rating, a catch-up call if you will. i they say there is no competitor electric vehicle wise that will come close to tesla in the year 2022. they cite their market leading position and better battery technology they're up 3.5%. maybe looking to snap the four-day losing streak back over to you when we come back, goldman sachs ceo david solomon joins to us talk markets, vaccine mandates, inflation and so much more andrew is sitting down with him right now. we'll get that interview next. you see this morning, dow futures indicated up by 333 points yesterday the dow was up by 646 points it was its best day since march 1st. s&p indicated up by 57

the nasdaq building on its gains, it's up 278 points. "squawk box" will be right back. >>

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investors have been looking past so far the potential impact from the covid variant that we have been dealing with. also on the minds of many, when they will begin to remove the easing policies, sooner than expected joining us to talk about all of this vaccine mandates david solomon is here, chairman and ceo of goldman sachs thank you for having us. we are here right now, the 12th floor. you guys just did this place >> thank you for coming down i'm delighted to be here we did do this we started before covid. we paused a little while but we've moved our executive team down here into the sky lobby on the 12th floor to be more present. more invisible we have been here six months we are enjoying it it keeps us connected. >> i got an early tour, early

morning tour let's talk markets, though, understand where we are, what is in your brain as we are dealing with both the fed on one side and the variant in the other the markets and the variation as you see them >> there is a lot of uncertainty. we need more answers we need more time to see how this plays out i am encouraged by what i am hearing around the variant and the trajectory of that i think it's uncertain the market's certainly and this morning is another indication looking past the variant slowing down economic activity we're still not out of the pandemic there is an uncertainty that comes from that. that will affect economic activity we have to deal with that in some way against that, we clearly have real inflation in the economy. we have a variety of problems, head winds issues that occurred because we

went into a pandemic we shut the economy down it's really unprecedented. on top of that we have ships going on in monetary policy to try to balance that. so there is no question this is an unprecedented period, it's hard to predict how we will come out of this. >> one of the singular things that came out given the emergence, if it is mild and it's not something we need to be as concerned about as the worst case outcomes would have been. does that mean the market rips, if you will, or is the fed on the other side going to keep that from happening? what's more important right now? >> my base case, andrew is, we will continue past the pandemic. we will have to live with it we will find a way to live with it effectively. economic activity will flourish. i don't think we will do a

paradigm it will take some time to move forward. in the context of that i think monetary and fiscal will have an impact than the pandemic will for this time forward. it doesn't mean there won't be periods of time. variants can flare up. the biggest issue is we've had unprecedented policy for a meaningful period of time. we will emerge from that, the unwind that that has had a big impact on asset prices, market activity and a variety of things it will have an impact on those things the things i don't have the answer to, none of us, is can that be done in a smooth way, where we take the air out without bumps and volatility or will we have buffers and volatility along the way >> you spend time talking to ceos around the world, when you talk to them about this. talk to them about the issue of

valuation. about their own stocks, they're pursuing their own transactions, what are you telling them at this point in is this a fairly valued market. are you valued very highly take advantage of the currency now. what's the thought in. >> there is no question that looking at the market broadly valuations are full in any historic am context. so if you are talking to companies that have a very, very strong currency, you are encountering them if they have aspirations to deploy capital and put it to work also for most companies, borrowing rates, the ability to access debt finance has never been cheaper it's an important time i think it depends on the company that you are talking to. i think the market has very enom ordered with growth at all costs. we are seeing a little momentum come out of that over the course of the last couple weeks a. lot of these businesses that have

strong top line growth haven't proven whether or not the business model generates earnings over the long term, those will be a tougher sloc i'd encourage those companies to make sure they have the capitals in place who ill the capital is valuable. i think some of that can rebalance in the coming months over time. it's not one size fits all you can look through the spectrum of the market and see different valuations >> if you look at the spac market or the ipo market is that something that persists? do you feel it's slowing down, speeding back up again we sort of have this undid you it aing roller coaster >> there has been some undulation to use your word. but there is no question spac activity has come way off its peak they're not perfect. there has been an evolution in the process around spacs i think spacs are here to stay i don't think we will see the

volume and surplus we saw in the early part of this year. >> when you talk about the category cash is trash you will make it not worthless but work less or are you in the category you might want to keep a little bit >> once again, not black and white. i do think we have lived for a long time with inflation below trend. i think one of the things i am concerned about or think about a lot is people have kind of lost the historical perspective on what markets look like and what is normal. from a monetary policy perspective, what we've had is truly unusual and i remember and i know historic. i have been around doing this since the 1980s i remember when we had a very different environment. we can have a different environment again. i do think while we've had inflation below trend, there is

a reasonable chance we will have inflation above trend. it doesn't have to be like the 1970s. doesn't have to be when you think about weird where there is inflation inflation hurts asset prices and slows down your ability from any asset from 1970 to 1980, there was almost nothing you could have made money. basically in that ten-year period oil and gold if you had u.s. equities, you lost 50% of the value of your holdings it wasn't too long ago in 2004 to 2006. june 2004 to june 2006, that is the fed normalized rates, they had 17 times in that two-year period i'm not saying that's going to happen i think we are living in a world where people are forgetting the history. we could go back to a different period that might be different from this. you need to be cautious and manage your risk for the distribution or the chance that

might happen >> what about bank valuations? >> like any other ceo, i think my company and stock is under appreciated and under valued there is no question there has been a mark-up in bank valuations i think the earnings power of the traditional financial services sector is quite powerful and we get a very low multiple on those earnings i think there is a perception because of the last 10-to-15 years there is greater volatility in that earnings stream i think that a a group there is much more fee-based revenue. we increase that i think at some point in time there is upside because the earnings power, the franchises that they hold is really quite well. >> what do you think of fintech valuations >> i think they at the moment

project a view of the future there are very few that actually make money at this point in time to the degree that some of these platforms are sustainable platforms. some will look to be cheap over a period of time to the degree they can't convert to a business model that can make money they'll be absorbed or go away i think it's a mixed back. what is clear to me is some of them will be a huge success. some of them won't i alsoty the incumbent players there is a big disruption going on in the digitization of financial services, whether it's institutions or individuals and i think the incumbents will play a big role in that and uptick people not everyone will be a winner. the market secretary probably ahead on some, not on others >> i want to talk crypto in just a moment becky has a question >> david thanks for joining us we had a big debate in the last

hour just about back-to-work and whether getting back to work or working from home is going to be the future there's differing opinions out there. i know you have been somebody that finds it's important to be in the office. i'd like to ask, where you think the majority of office places will be say when the job market shifts and it's not quite as competitive. and will those office be in place like new york city >> first, becky, it's great to see you. i appreciate you having me on. this is a complex question i talked to andrew about this a couple months ago, we were together at an event i have been focused on goldman sax. what goldman sax needs to do to continue to serve its clients and be super competitive in science. in our organization 50% work at goldman sachs are in their 20s we fwhaed to come together we're an apprenticeship culture. that doesn't mean there can't be

flexibility. that flexibility, generally speaking for our organization we need to come together. i think for most businesses, collaboration is important every business has to determine to serve their clients or commerce they compete to retain their talent i'm talking to a lot of our employees in their 20s they don't want to be sitting at home in a small apartment. they want to be with other people their age they want to be collaborating, learning, in touch so every company will choose its journey along the path i'm not that good. i don't have a crystal ball to say where everyone comes out generally speaking, we're social creatures. i'd be cautious about interpreting forward you know a permanent state based on what we see at the moment. >> what about new york city? >> well, i think in new york city, one of the reasons i'm an advocate in new york city and get people back into the city

and get people back working. if you go through mid-town in the day, it's getting a little better think of the organizations that are still under enormous president obama so i think for bigger incentives. they have to be attractive you have to bring people in. there has to be a balance. technology allows more flexibility. generally speaking, i think it's important for new york to continue to bring people together one of the strengths is young people object to be here i don't think they want to be locked in their apartments they want to participate the city is very busy. i think we're in a transition getting people back engaged. i think it's very important for economic vitality in the city. >> by the way, what do you think of eric adams? 1234r i'm excited about eric adams and very hopeful. >> you were worried about the city, though. >> i'm concerned and i said this publicly you know recently, you know, history

will tell you no city's place in the world is permanent it's important that all cities are attractive for business and for people to live and cost of living, vitality of the city what the city offers, taxes, all those things go into an equation that either attracts and retains or sustains people or at times puts pressure on that. >> what is your bet on new york? >> my bet on new york. i said this clearly, new york is not going away but there is no question, safety, security, cleanliness, these things matter. i am hopeful i heard from the mayor elect i think these things matter in any center i said i'd get crypto. have they changed crypto do you own bitcoin >> i don't personally own bit copy or etherium i don't have a strong view you said change my view. i don't know what you think my

view s. my view on bitcoin, for example, is i really don't know, but it's really not something individually that's important to me >> right. >> i am a big believer in the digitizization that is occurring and the disruption that's occurring in the way financial services are delivered as i say for institution and individuals. i think it's a massive chicago we are trying to participate nit based on what we are doing and our digital banking platform >> do you want your clients in it >> i want our clients to to what they think they want to do as a speculative asset s. it interesting? are some of our clients participating? absolutely but whether it goes up or down, my guess is look at the last week it will go up, go down i don't know what the permanent key thing. it's how can blockchain or other technologies accelerate the pace of the way financial services are delivered.

i talked to you about our digital bank we made an announcement about the platform for financial cloud we are building war institutional clients. all of that is the changing of the digital processes that have to lubricate the way until services are delayed it's a big opportunity we're excited about it >> it's into the data sets joe has a question for you. >> andrew, i know you have a places to go david we can do this for probably longer than an hour real quickly, rates are probably after years of what we've seen probably headed the other way some day is goldman sachs factoring in a lower average return for equities over the next three of four years than we've seen for the past three or four a simple question do you think it has to be that way? are we back to mid-single

digits, maybe? >> so, joe, i would never say it has to be because has to be is certainly we would expect that we're not going to see the same rate of returns over the next three years we seen over the context of that, you seen skewed results. so i'm not a believer that double digty in perpetuity is something you should expect. i have been involved in a number of charitable foundations, college boards, et cetera. my mindset is the returns we've received over the course of the last three-to-five years are different than we should expect as we forward from here. >> i also wanted to ask you a little about china it's a controversial topic goldman sachs spent time to building a business.

yet we're at this moment a lot of people look at the human rights issues taking place in that country and thinking about what is the roam of an american business oftentimes, it's here when it comes to esg or voting rights or all sorts of other issues. you have been outspoken about gender equality, for example yet, doing business in china at the same time? >> well, the geopolitical relationship between the u.s. and china is very complex. that's going to continue for sure we have been investing in our business in china for a long time china is a very important vitality we have clients we serve around the world that are clearly exposed to economic activity we want to continue to serve them i think when you think about policy actions, it's not our job to set, we will respond to policy actions, i obviously don't like the human rights

violations that i see in that part of the world. but i think from a policy perspective. we have to strike a begins e balance because we're economically inclined. it's not simple. there are places we have to cooperate. i would point to crime as a great example. i can highlight for example a green finance working group we are involved in establishing, that's got both public and private sector leaders coming together with a particular focus on china's transition. there are places like human rights violations where we have to confront and try to get a different result f. people are looking for a black and white answer, i think that will be a very hard execution. we got to continue to focus on this we're very economically inclined >> what do you think the role is can a business leader speak out, for example, in china. for example, adam silver at the nba has tried to thread this needle ray dowdy was on air trying to

thread a need him. it didn't work elon musk was speaking last night. very pro china i think a lot of people were critiquing him does he feel he can't say something critical of china. because he has so much business in china >> so i can't speak for everybody else i generally try to stick to% and leave policy makers to set poise i comment i said i don't approve of the human rights violations that are going on. and so that's a point of view. but it's not my job to set policy we need government to set policy we need them to legislate. we need them to interact in a geopolitical relationship. it's our job to balance and run business based on the parameters set up i think joe said this or somebody said this earlier this week, if we got into a debate of everything that goes wrong and business is responsible for that, we got ourselves to a complex place. i don't think any of you are advocating that's where we want to go. >> we need to let you go

you have a conference today? >> we do, we have our financial conference companies here with investors. so that should be an interesting day. we had a lot of discussion of some of the things you and i were talking about, digitization, crypto, the changes in disruptions in the way those are delivered. >> you are a better dj barry manilow. i did a podcast. >> my dad loved barry manilow. i think about my dad it's a great memory. >> thank you for joining us. >> thanks a lot. good to be with you all. coming up, a lot more on "squawk. news in the last hour. american airlines doug parker is planning to retire president robert izzie will be taking the reigns. we will speak to both gentleman on "squawk box." we are back after this we are bopportunities... are all about timing.

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to a stronger open the dow indicated up 350 points after gaining 650 points yesterday. stay tuned you are watching "squawk box" and this is cnbc

. we brought you in the last hour, less than an hour ago breaking news, american airlines ceo doug parker will step down in march president robert isom will take over phil le beau joins us now with an exclusive interview hey, phil. >> hey, joe. let's turn immediately to the two gentleman who are in the news right now for a transition that i know people have been talking about eventually will be happening. now it is happening end of march next year. doug i want to start first off with you why not? this is the right time to turn over the reigns to rob >> i have been ceo 20 years now, this is something we have been looking at you are right, this is something we have been working on for quite some time. frankly, the pandemic delayed it a bit. >> you probably would have retired maybe a year or two? >> most likely the last thing to do was a labor contract in early 2020 then the pandemic came

we had to get through that, of course we r. obviously, we always have work to do we have a lot of work to do. we're on solid financial footing. recovery under way demand is coming back. >> covid impact aside, why do you believe if you go back and look at shares of american right now, down 25% compared to the ipo price. if you went back and invested in doug parker back when you took over america west, you'd have less money now than if you had invested in something else, your investment would have gone down i don't know 30%, something like that whor covid impact aside, why is it so hard to convince investors airlines are a solid long-term bet? this is a place where you can make money >> we'll get there september 1st. >> ten days before 9/11. >> we were on the same analysis. i think you will see the stock has done really well for

investors. but it was 9/11. now there are events like this our industry has hurt one another. what i'm happy is how we have done through the entire period, particularly how we've done since the pandemic, our stocks are up more and airlines so far year-to-date by a wide margin. i am certain as we move forward, you will continue to see more of that >> let's talk about moving forward, robert, you started on 31st this is the old who song meet the old boss, same as the new boss you have been working hand in land for a number of years you have been a big part of setting the pattern in terms of where you are going. what do you see next year in terms of where the business is right now? covid-19 obviously i know is a huge welfare but what do you see? >> this is a fantastic opportunity. i couldn't be more excited to get started. as we move forward, we've done a great job, not just to survive

the pandemic but to thrive once business returns. so our long-term goal is to make american the best airline in the business as we look to 2022, it's about having the most airline reliable for customers as they come back and returning americans to profitability as soon as possible >> at this point you can predict profitability? >> i can't do that it will depend on demand coming back, america will do very well. >> let's talk corporate trend. you have been out talking with corporate customers. i know you are doug as well. what are you hearing from companies about the 80 idea of getting more people back on the road is there a correlation between companies delaying people coming back into the office as well as saying, as long as we don't have people coming back into the office maybe we're not quite ready to go out on the road as much >> any time there is restrictions, the travel, dampens demand what i have seen and i talked to

a number of corporate ceos and their buyers is that there is pevent- pent-up demand we anticipate strong demand. >> the corporate end of this, that's one of the big ones does that happen by the end of '22, '23 what do you see? >> i see it in 2022. i see it in underlying small and medium-size business demand that has continued on through the pandemic when corporates return and international comes back, i think we will be -- >> on the international side, docuwhat is your sense in terms of we saw what happened once we opened up the europeans coming here now there are some restrictions, obviously, but there -- it's still opened what are you noticing in terms of that demand is it still as strong as it was in. >> it's not. it was coming back very nicely as you know, but any time these restrictions are put in place, it's very suppressive impact on

demand some we see again, it will change over time but once these countries like the uk put in place a different sort of testing regimens and quarantining restricts, it drop off. nothing we're concerned over time right now when you get those things, international demand falls off right away. >> i ask about transpacific. is this there anybody's guess? >> it lab bit longer. >> the word out there obviously is going to be china and at this point there is very little travel going over to china. nobody is quite sure when that changes, right >> that is correct at this point. it will all come back eventually certain ones are slower than others asia seems like it will be less. >> you have taken on a lot of debt in the last couple years, as you have gone through surviving the covid-19 impact on the% there are some investor who's look at that debt and they say, i feel like this is a hamstrung company. i feel like this is going to

limit their ability to grow profits in the future. what do you say to those investors? >> well, as demand returns and america returns to profitability, we're intent on making sure we do d-leverage we have a great plan that will produce much more solid, better results over the long term american is going to be strong. >> so the debt aspect of this, you believe that's an overhang that will eventually, it will ease away and people will not be as concerned about it? >> we don't have any near-term large amortizations we have to pay off. with reconfident when we return, it will be fine. >> we talked when you were running america west back then you said, look, if i look into the future, i'd see work consolidation within the industry look five years into the future, what do you see happening with

the airline industry do you see any consolidation or do you look at this and say we've seen about as much consolidation we will see with the exception of small deals on the side >> look, in the united states, i think we've done what was need to be done to make the industry incredibly competitive but much more rational. i don't expect major consolidation, maybe smaller airlines get together, certainly the large three network airlines are going to be competing intensity with each other, with small airlines always competing with us as well. internationally, i think there is shakeup coming. i know there is. so we'll see more and more internationally. maybe or maybe not it's an ownership law of things. but the united states i think is once we, again, get the in.coming back, i feel like the industry is actually pretty in play. >> well, it's transition time. you get one more quarter and joe says you will be sleeping in every day. >> i wish that were true i wish that were true.

oh, no, i love you very much. >> you can tell joe right now. >> all right joe, i'll be there. >> every single day. >> isn't that perfect? >> wait, go ahead. >> i don't know if you were watching, i just said when is the last time doug got a decent night's sleep, he didn't go to bed, oh my god or get woken up with, who knows what what a tough business just to navigate i mean everything, the labor issues, you know, weather, cancellations, and then, you know, safety issues, everything, doug, if i were you, aid take like three months off, say, if you need me, robert, here's where i'll be. but it better be important >> yeah. thanks look i love it. i loved all that and again as we go forward, i am sure that whatever i end up doing, i actually like -- >> what's your handicap right now? where is it headed we've played together. you're good. durnlgs oh, man, what was that

-- what a great birdie on the hard, 14, the hardest hole at pebble birdie do you remember that >> don't forget 8. >> i don't need a rundown of every dam shot i'm trying to help get to break. awe awesome. >> new york look thanks, joe, appreciate it >> all right that was something >> gentleman, thank you very much robert, march 31st becomes ceo doug, i know you are staying the around as chairman. >> i am. >> we'll be talking more to you. joe, i should tell you when he came in, the well, your handicap is going to improve. how is it right now? it's better than joe's it will always be better than joe's w. that note, i'll send it to you. >> now i wish i didn't say that. >> it's not true >> there you go. >> i said this before, you spent

three days in front of dowreys you get to know someone pretty good we hug and cry on someone's shoulders. it's not easy, cameras, gallery. good luck. when we come back, we will get a check on the markets plus, we'll be hearing from morgan stanley's ruchir sharma he sees tough times in the next year we'll talk about what it means for china and the u.s. economy as well. right now, though, as we head to break, let's take a look at quick stock to watch meta's instagram unveiling new tools to keep safe mansion times spent on the app and limits unwanted interaction and insensitive content. the it comes a day before instagram's head talks about potential risk to children and teens. "squawk box" will be right back.

welcome back to "squawk box. futures right now where they have been most of the morning on top of 650 yesterday nangs almost up 300 earlier. it's up 283 right now, s&p up almost 60. ten-year, we have seen a little backup in yields in the last

couple of sessions at least we're back above 1.439. check out oil after that big move that we saw yesterday oil up $2. back at 71 and change. when we return, morgan stanley's ruchir sharma as we head to break. here's goldman sachs david solomon who spoke to us earlier where he sees the markets and they're headed "squawk box" will be right back. >> we are going to continue to find a path past the pandemic probably this will be endemic in sight. we have to live with it. we will find a way to live with it effectively and economic activity will flourish i don't believe we're in a new paradigm where the world will be fundamentally different. but it will take time to move forward. in the context, monetary and fiscal policy on a go forward bas llavsiwi he a big ev impact than the pandemic will from this point forward. >>

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the dow erased last week's losses yesterday, jumping nearly 650 points if you look at futures, they're indicated at 350 more. let's bring in ruchir sharma with morgan stanley. his latest piece for the "financial times" is "china is faltering, but the world isn't feeling its effects. welcome. it looks like the futures are

looking past this new variant and is kind of taking an optimistic turn on things. how do you feel and would you jump in here. >> yes the real story in the market, which has been for years, is the price of money it's extremely cheap, and it's hard to keep the stocks down where the price of money is. twos demonstrated by many people is we are going to see a change in price over the next few months unless something serious happens, and the second biggest concern is the incredible amount of retail mania gripping not just the united states but around the world. if you look at the markets in the past century, the one thing that has been common in them is toward the end you have a whole amount of retail mania that tends to grip the market so i think the concerns that i have is the combination of the

price of money changing and that the retail mania seems so unsustainable given the speculation we have around the world. it's something that makes us cautious or makes me cautious, at least, over the coming year but, yeah, i would say as for as the market's concerned, as long as the price of money is still so cheap, it's hard to keep it down. >> david solomon from goldman sachs was with us earlier this hour and he said basically the same thing he said it's the fed that's going to focus on the market from this point, he thinks while the fed may be tapering more quickly than they had earlier telegraphed, you're still talking about them expanding the balance sheet for at least a few more months the brace of the price of money may get a little more expensive, but not at a breakneck pace. which will win out >> in the previous piece i had written in my column at the "financial times" i said the

world is stuck in a big trap if you look at the world economy, the level of debt is just so high, it's four times the size of the underlying economy on a global basis, and when the level of datay debt iso high, it doesn't take much for the entire system to shake that's why interest rates are having a hard time going up. long-term interest rates fail to go up. it's very limited just because we are stuck in a global debt trap around the world in many countries it exceeds 300%. in more than 25 countries in the world, the debt to gdp ratio is 25%. earlier when i started, it was only a japan story now the u.s. and china are in

the same camp. it's rather limited. tlvg the long-term interest rates are stuck and it won't take much for a change in price of money to get rapid. >> what does an investor do in that environment, ruchir, bus keeping money in cash seems like a loser's game too. >> yes, it duoes, but i feel its time to keep it. we also have to think more internationally. the other thing i spoke a lot about is what works in one area doesn't work in another. the fact of the matter today is if you look at the average portfolio, the waging of the united states in it is nearly 60%. that's the weight of the global index. the share of the u.s. and global economy is 60%

so i think that we need to diversify even though that's been such a losing strategy over the last decade. a lot of people have suggested that today and similarly, i think we need to be mindful when you have such fervent retail speculation, it's usually not sustainable, so those pockets of the market definitely need to be avoided in the coming year. >> they're all good points i'm sorry we accident have a chance to talk more. we'll have a chance in the future. >> thanks. coming up, the ceo of pioneer natural resources will be here to talk with us. plus the head of the port of los angeles gives us an upteda on supply chain issues stay tuned you're watching "squawk box," and this is cnbc. >> announcer: "squawk box" is sponsored by wisdomtree.

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good morning futures surging in the premarket. that follow as big bounceback yesterday and the dow's best day since march 1st. breaking news. america airlines ceo doug parker announces he is stepping down

from the job we'll bring you details on his replacement. and how badly were new york's businesses caught off guard by a new vaccine mandate brought on by mayor bill de blasio we'll get you caught up. a final hour of "squawk box" begins right now ♪ good morning and welcome back to "squawk box" here on cnbc live here at times square i'm joe kernen along with becky quick. andrew in transit on his way back from goldman sachs. u.s. equity futures at this hour right where they've been we'll get through these quickly so we can move on to all the stories. 350. almost 300, nasdaq, and the nasdaq indicated up around 61. treasuries that own kenya, that was pretty interesting what ruchir said just now, becky.

it's a global phenomenon it's tough to move these yields, but i bet once of these days, once it gets gone, yields will start moving -- well, we've been saying it for a long time. >> a very long time. maybe it happens when we least expect it. maybe that's the answer. we do have breaking new this morning. america airlines ceo doug parker announcing he's going to be stepping down from his job in march of next year he'll remain on as chairman. he'll be replaced by current america airlines president isom. here's the timing on his decision. >> the last thing we did was a labor contract we got done in early 2020, and then the pandemic came. we had to get through that, of course, and we are we always have work to do, and there's still a lot of work to do, but we're on solid financial footing, recovery is under way, demand is coming back, so this

feels like exactly the right time. >> shares of america airlines this morning is up the two have been working together for years in fact. robert isom has been the president for five years, and hearing back everything that doug parker's navigated from 911 to the financial crisis, pan pandemic, a couple of mergers thrown in along the way, that's a long 20 years. >> yeah. if you want to -- you know, if you want a job you can sink your teeth into, that's one of them where you're going to make a difference every single day, hopefully in a positive way. plenty of opportunities to screw things up in the airlines business. >> a lot of stuff out of their control too. >> yep, a lot of things out of their control, as doug pointed out. so you sleep well when you're doug parker. that's pretty amazing. there always seems to be a lot

to worry about in the airlines business. this one we talked about elon musk, say what you must say, coming out against subsidies and efforts to pass a $2 trillion spending bill in wachlt can the whole thing was his quote. and speaking to t"the wall stret journal" ceo, musk hasn't been eligible for tax credits for years, doesn't need them here he is on president biden's build back better plan and government e.v. support that was included in the recently passed other bill, the infrastructure bill >> i would say honestly, don't pass it, can it. >> what about the parts -- >> unnecessary >> no? >> no. do we need support for gas stations we don't

so there's no -- there's no need for this -- for support for a charging network. >> and musk added that he's against all subsidies and decent haircuts including those for the oil and gas industry. >> the only thing i would say is my mic was closed. i was kind of narrating as you were reading some of the stuff you've got to remember if this bill passes is going to help his competitors far more than it will help him because it will give subsidies to union-based e.v. factories in the u.s., and obviously tesla and toyota are not, so they've been opposed to this from the get-go. >> i go back to the asperger's comment. he can do no wrong in my eyes. >> "saturday night live," it was a pretty great performance. >> he's awesome. god, now he's probably further right than someone near and dear to me. >> you. >> myself. yes, exactly. >> all right.

another story that we are following closely this morning is a vaccine for a new mandate, the private sector in new york city we're going to get to robert frank on that in a moment. first we're going to get to domny chu on premarket moves, and, don, it's not just today but the last week. >> it's always one of the positive tickers here. let's go through the movers to get an idea where tesla stands in that popularity contest where people are looking for ticker searches first we'll look at the more traditional side of things it's autozone, auto retailer, shares up 2.5% both profits and sales and sales growth at exists store locations came in much better than analysts' expectations it also got help from commercial mech mechanics. up 2 president 5%. certainly an earnings mover.

we're still in that part of the season to watch here. also keep in mind what's happening with the chep sector overall. yes, we got the intel news looking at maybe ipo, its mobile i unit nvidia and others, all up about 2%to 3%. keep an eye on what's happening because chips have been weak never that possible rotation we've seen out of big technology i mentioned nvidia because it was one of the most popular ticker searches on our website, cnbc.com, yesterday. let's take a look at some others in the top ten list. tesla was the most watched ticker remember the comments we made in the last hour may be playing into that conversation today apple getting a lot more traction this well as well because of the morgan stanley price target upgrade moderna, lucid group, and alibaba also in the top ten.

as always, the top ten on my twitter feed at the domino i'll send things back to you. >> let's get over to robert frank. he talks about the reaction to new york city mayor bill de bl blasio's new vaccine mandate they've got a picture of him dressed up as santa claus. no, that might be fidel castro santanista claus what do you call it? >> he's required all companies in new york city to be vaccinated starting december 27th it would affect 184,000 companies. it would be the most sweeping local mandate in the country katherine wild said companies

were, quote, blind-sided by the announcement she said those who plan to bring workers back to the office in january may have to delay their return once again due to the uncertainty around this mandate. according to a partnership survey, fewer than half of new york employers right now require all in-person employees to be vaccinated 39% allow employees to get vaccinated or get tested and 11% have no policy whatsoever jpmorgan, they're the biggest employer in new york, they encourage but don't require vaccination. it does require mandatory testing and travel restrictions for those not vaccinated citigroup requires mandatory convenience at headquarters, mandatory testing if not vaccinated google, mandatory with

exceptions. >> how many people vote in manhattan? >> i've been look foing forwardo it clearly businesses were not consulted. 90% of new york is vaccinated right now. the most important thing for new york city's economy right now is to get people back into the office, get space occupied again because that is the commercial heartbeat of new york city, and for this to come out of nowhere, the companies told me yesterday, this is purely political that it doerr this it's not practical it will get litigated. and it throws more uncertainty into returning to work there wasn't a practical reason for this. >> there's like a million reasons to hope things change. do you read every day people get stabbed walking around columbia? people getting stabbed sleeping on the subway. it's a jungle out there. there's not going to be a

governor de-blah, blah, blah, right. >> we'll see. >> what are they going to do in terms of enforcing it? if businesses say, forget it, we're not going to do it, how would you enforce, what would it be, over 100,000 businesses and say, okay, have you done it? >> well, they i've already given fines to restaurants and other businesses that aren't currently adhering to the current indoor mask rule or indoor vaccination rule, so presumably they would, i guess, give fines to those who are in violation, but how do you hire tons of auditors to go out and do that and find companies that are already thinking of giving up their space and leaving new york city, probably not a smart thing to do right now. but that's how they would enforce it. >> all right thanks, robert. when we come back, a special interview on the oil price volatility that we've seen lately also trying to square america goals to green our economy with the fact that this country still

use as lot of fossil fuels we're going to hear from the ceo of pioneer natural resources next. speaking of energy as we head to a break, check out the price of natural gas it fell by 11.5% yesterday wow. ecit out stay tuned you're watching "squawk box" on cnbc today, your customers want it all. you have to deal with higher expectations and you have to lower wait times.

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click, call, or visit a store to learn more. welcome back to "squawk box," everybody. we've been watching the futures all morning and they've been on fire dow up by 62 points. s&p up by 61 the rally continues. if you check out some of the stocks we like to watch including the faangs, all of them higher. big banks also this morning if you take a look through that all of those trading higher as well we have seen yields push a little higher this morning too 1.444% is the last i saw on the ten-year, joe. >> yep right around there anyway, that was a big surprise obviously, turning around from -- that was all initially omicron-related. we'll see whether that reverses because of a lot of other things

that got affect vd reversed. the center of the energy universe is taking place in houston this week. brian solstice joins us now. >> think about the oil market. it was 84.5 bucks a couple of weeks ago. it fell down and now has come back up. very volatile. how do you manage and lead through this kind of volatility? let's talk to a man that many would consider to be maybe not the smartest guy -- i'm not trying to insult anybody else -- but certainly somebody who's a straight shooter, scott sheffield. good to see you again. >> good to see you. >> one thing that's good in person, you get to chitchat ahead of the interviews. you learn something new every day. you're the highest dividend stock based on yield in the s&p

500, ex8%, expected 11.5% next year three times the cash flow? investors really don't seem to care how come >> if you go back in time, we added about 10.5 billion barrel as day over the last eight years. that's what's kept energy prices very low but you look back at the track record, the reason we're down 2% ahead of the s&p 500 is we had terrible returns we'll drilled too much, had two price collapses in 2014 and also in early 2020, and we filed a new contract with our investors. our investors want money back. so we're distributing 80% of our free cash flow next year back to the investors. to give you an idea, we have about $10 billion in cash flow we're going spend about 3.3, $3.4 billion to drill wells. we're going to produce

production about 5% and give about $5 billion back to investors. >> this is causing a conflict, though, with certain parts of the presidential administration. yesterday the u.s. deputy sec for energy spoke here and gave an opening address and basically said -- i'll summarize -- the oil industry is making all this money. you have an obligation to pump more oil we've heard they talk now about your profits that means there is an obligation do you have -- does the industry have an obligation to the public to pump more oil >> no, obviously not you saw where opec wanted to increase production. i never received a call from administration about adding more rigs or adding more. we can't because we have an investor contract. we can't go back on our word people have asked me at $100 oil, $150 oil, are you going to grow more than 5% t answer is

no we're just going to return more cash back to the investors so i don't think we have an obligation to grow production because we've done it twice. we've added too much oil several different times over the last ten years, and we've had a price collapse u.s. shale led to the price collapses i talked about in 2014 and early 2020 it wasn't covid-19 it accelerated the price collapse in 2020 we were going to have a price collapse anyway because u.s. shale added too much, and we compete with opec and opec-plus market share over the last ten years. >> everybody here seems pretty bullish on demand. you heard ramco yesterday say they think 2022 will be above 2019 international air travel, the omicron fears seem to be subsiding at least for now, knock on wood. if that's the case and u.s. demand goes back to pre2019 levels because everybody is driving now, as you know

mass transit is down and everybody's got a car, and u.s. is pumping more. i'm not a math whiz, but we're going to have to import more oil on supertankers. is that the strategy. >> most people know we're exporting six. we're exporting three. a lot of it is coming from canada, our neighbor to the north. but going forward, we're going to have variable demand coming back most people estimate 4 billion barrels a day increasing demand next year. we'll get back by the end of 2022 to 100, 101 million barrels. you heard yesterday, opec and others will be out of supply they'll be out of extra capacity so things are going to get very tight into 2022 going into 2023. >> you had mentioned earlier investors asking you 120, $150 a

barrel of oil. i ran a twitter poll yechltd people thought it will be cheap, expensive, about the same -- 90% said about the same or more expensive than now because there's a narrative oil is dead. ten years later, it's dinosaur juice lchl oil go back to 120, 150 bucks? >> i been saying 80 to 100 it will probably exceed 100. i've been concerned about it we see what the l & g prices are in japan it's 200 dollars as we see in europe and asia. right now the oil is cheap i was surprised at the release it was a band aid approach it's moving back up. probably will be back up to 80, 85 in the next few weeks as the demand comes back. and the omicron variant, looks

like vaccines or t cells are going to work with that variant. >> let's hope. that's the big unknown there's a lot of unknowns. we don't know what's going to happen. >> no, i know. >> the early data looks good, but as a ceo, you've got to plan for everything, right? >> that's right. that's why you have to deal with a zero ambulance sheet for the first time in pioneer's history, by the end of 2022, we'll have zero debt that allows us to have the future variants that come about, the future downturns, we've had three downturns in my last 11 years. >> for oil, that's a lot. >> we had three in my first 30 years. i'm hoping opec and opec plus and u.s. shale can create stability, which is what we need in the oil market. >> is this the first time we've ever used the release for a price mechanism? it's always been used for storms there have been a couple of

barge accidents. for more than a million used, it's never been used outside of a war. this is a pricing move is there a risk that we release the 50, that has to be returned? we need those levels prices go up in the spring as demand -- you know, the world -- u.s. sort of comes out hopefully from this. is it possible we have to refill it at a higher price. >> yes, exactly. >> could that happen >> that could easily happen, yes. they've talked about dumping more out of sbr over the next several quarters toochl i think the world could do all kinds of things in terms of adding more oil to the market. it's going to add to the market with demand coming back. >> scott sheffield of pioneer natural resources, a straight shooter who always lays it out we appreciate you coming nice and early. we know you're an early riser anyway. >> thanks, scott.

>> there you go, joe a lot of people saying, well, if we have to fill the sbr next year, will we have to pay more it will send prices higher in the spring than they are now. >> sell low, buy high. oh, no you're right that's wrong probably not great band-aid. but you saw they put out that graph, gasoline prices were down a penny and a half in the last week things are going great coming up, how the biggest u.s. ports managed through black friday and what's ahead as consumers keep buying for the holidays the executive director for the port of los angeles will join us live, and as we head to break, we have this special note. jim cramer is hosting a special cnbc investing club. he'll answer members questions become one and join the club go to cnbc.com/investingclub

and the link to attend will be sent to you in jim's newsletter. stay tuned you're watching "squawk box" at the cnbc financial site in times square

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welcome back to "squawk box. ring santelli here live at cmhq

with breaking news our third quarterfinal read on nonfound productivity and union labor costs, 9.52 on productivity not a good number. this adds to the previous number it now becomes 5.2, the worse in about a dozen years. if you look at unit labor cost here's the reason why it plummeted. because it jumped up to 9.6. from 8.3 to 9.6. this is the highest unit labor cost going all the way back to -- well, it was 13.3, 13.3 at the end of last year so fourth quarter of 2020. to give you an idea. that number was a 20-year worst. as far as trade balance for the month of october, minus 67.1 minus 67.1 that is good news. in the rearview mirror, our last look was revised from minus 80.9

to minus 89.4. we see interest rate at 1.45% in ten years, unchanged at 177 in 30-year bonds, but that is a big jump from yesterday, the curve actually starting to steepen a bit. we're now looking at the longer end interest rates the short end was the star of the program for about the last month and a half, pushing, pulling forward rate hikes, and it certainly seems as though the taper is going to be quicker maybe we'll be done in march and start raising rates. no matter how you slice it, maybe it will be cpi at the end of the week that will give long data treasuries an eyeful of propelling it higher due to higher inflationary pressures. andrew, back to you. >> thank you, rick i want to jump right over to

steve liesman who's looking at the numbers and get his reaction as well. steve? >> if you don't mind, awant to pick up where rick left off. the short end of the market seems to really be incorporating the news we reported yesterday and that's beens out there, the accelerated taper and faster fed. take a look at fed fund's probabilities which are now at a mere 60% for may, and then they ratchet on up as the summer and the fall come around and then there's that second hike, which is now in november and i need to do more research on this, but it looks like a third hike is starting to creep in to the equation there for december it's around 50%, but i'm not happy with the numbers right now. certainly these are good numbers here we're increasing the market. take a look at two-year note, which isreally on the move up 67 basis points the idea that, again, the

two-year note has to be much more aggressive. this is all about a flattening or compression where the two-year is moving now back to where it was before the pandemic really in march of 2020. so this is increasingly going on i think the big story here, andrew, is that the stockmarket doesn't seem to care yeah, the fed's going to go faster the fed's going to have a faster taper, maybe quicker rate hikes next year. it's pretty remarkable the way the stockmarket so focused on omicron and those outlooks for the economy has really incorporated this news and really a on. i don't know, andy maybe he wakes up and says, oh, my god, the fed's going to taper faster but the focus right now is clearly on the virus and seems to be taking pretty well this idea of a faster fed. >> but, steve, and we were talking about this earlier, if omicron is, in fact, milder, and we don't know that yet, to some

degree you might say it might make the possibility of supply chain problems in the future less severe, which would mean less inflation, which would almost reverse a little bit of the idea of what jay powell may have to be thinking about. >> i was with you until the very last part of your sentence, andrew all of that is true. a less virulent variant of the virus is good news for the economy, good news for inflation. i still think the fed's going to be a little bit like the post office here on this faster taper. i think the message that powell gets from the market here is that it doesn't seem to matter that much if the fed does a little bit more tightening, and i think they're going to be more comfortable with a little bit more tightening. i think neither rain nor sleet or whatever, all the terrible elements that the delivery guys come through, i think the fed's

still going to do its appointed rounds of a faster taper the bigger story with what you're talking about comes next summer into next year with how far the fed goes, how steep is that curve as well as how far does it have to go i think we'll get a really good feel december 15th we'll look at the fed's long-run rate that will tell us more about what this critical question of the terminal rate is but right now, you look at the ten-year or the five-year. you do not see a market that expects a very aggressive fed over the long haul here. >> right okay steve liesman, thank you as always for breaking it down for us pleasure. we have more data from you this comes from the latest cnbc m momentum hi, kate. >> those two issues are top of mind according to our survey

75% of small businesses say they're experiencing higher supply costs, 74%, up from last quarter. nearly four in ten say they're raising prices to offset their costs. 58% say they're being hit by supply chain disruptions that's up from 55% we saw in q3. when asked what the biggest risk to business s more owners say inflation is riskier than supply chain disruptions. covid coming in third. it was taken pre-omicron labor shortages are interesting. overall small business confidence did tip down to 44 due to policy expectations under the biden administration this is one point from the all-time low of the index hit in q1 of 2021 there is a silver lining 69% say their business can survive for more than a year

under the current conditions that's the highest since the pandemic in this array back over to you. >> okay, kate. it's a question i don't know if we'll ever know. transitory, not transitory anyway, business owners, they're doing both this season they've got to worry about supply chain and inflation i don't envy small business owners >> yeah, certainly a lot of them are really stocking up on a ton of extra supply hoping they're able to sell it, and those who can focus on selling more local items hope they can beat out some of the big box competitors who rely on overseas supply. perhaps they'll lure customers who are looking to buy local this year. we'll see in january. >> kate rogers, thanks. california ports will once again post delays on shipping

carriers left too long on the docks. they're trying to get out from a huge pandemic-driven backlog joining us is gene seroka. why don't you give us an understanding how many ships there are and how many are waiting forring to take shipment containers off port? >> we're happy to see an improvement at our california southern port complex. right now we see 50% of the aging containers we've talke about on previous shows, and this is all through just the threat of a penalty flee we have not collected one dollar, but we've gotten folks motivated. the number of ships anchored now is 35, which is 60% less than the past weeks

and they've implemented a new system they're not all bunching at the port complex at one time safety and security of the assets and the crews along with the reduction in emissions were both driving factors for the new cueing system. >> gene, there are alternate ways of looking at this, not just having ships off the port of los angeles and the long beach areas. it makes a lot of sense, but it doesn't necessarily mean things are getting delivered any faster in fact, there's a company flex port research that has a indicator out there that's called the ocean timeliness indicator. it says if you measure things the moment a factory says it's good as ready to the moment the factory good gets picked up from the port on the other end, that time is actually increased and gotten worse, that we're seeing peak indications of that you can be shoving things out and say they're going to be slower coming across, a little further than just off the

horizon, but it's not meaning anything is getting delivered faster what do you say to that? >> there are a lot of observations in our industry today. not a day goes by that someone doesn't have an opinion. we've known for a long time the vessel integrity has been way off-kilter, whether it's in southern california. we have global maps showing the number of vessels that anchor across the globe but what we're trying to do is unstuff those bottlenecks as best we can. rail dwell time, the amount of time a container sits to get on rail and move to the interior of the united states is down to two days, and that's a prepandemic low from the 13 1/2 days that rail containers were waiting just this summertime dwell time for containers moving out by truck is down to about six days, and that's off a high of nearly ten just weeks ago so, again, we're starting to see some improvement the domestic supply chain is becoming a little more fluid no one is claiming victory, but it is good to see these kpis and

subsets really start to go in the right direction. >> gene, you say there are opinions and non-opinions. my information came from a logistics guy, ceo in the business krielting something called flex port research, which has this data. are you saying that flex port research is just this -- it's not accurate data that they're reporting on the number -- on how long it's taking the number of ships beyond horizon? it's up 20% since october, and just below an all-time high. are those just opinions, or are those actual facts for the actual state of what's happening out there? california >> well, that's a good question, joe, because my understanding is stated directly by that ceo. he controls 1% of the cargo that moves through the united states. and using our port community system, the port optimizer, we have 95% of all cargo flow captured in this data system and we've used it for data mining to understand exactly

what's happening, where bottlenecks are, and how we can best improve them. again, this largely private sector supply chain has many, many participants across the board, so it's not just one angle or lever we can pull watching this data very closely is important toward seeing some improvement today, but a much longer road ahead of us because the america consumers' demand is still off the charts. >> is it true you move ships off from being at anchor because of environmental concerns and beyond the horizon are there still just as many ships bottlenecked out there as at the peak >> joe, we didn't move any ships away from anchor you may remember we had 84 ships sitting outside the breakwater at the twin ports sick weeks ago. that number is now 35. that balanced shift has been worked and continues through the domestic supply chain. there are about 90 ships on their way across the pacific over the next seven days

that's as strong as we've been throughout the surge here, again, trying to get the ships to come in in a more normalized fashion so they can hit our ports system for birthing rights. having a bunch of ships race, sit outside the breakwater and waiting for for these appointments has not shown to progress the supply chain. >> i don't think he said they're moving the ships out there i said they're being held out there, and there's now as many total ships either waiting at anchor or over the side. >> again, over the next three days, we have 14 ships you may remember during the peak season we were seeing an average of 24 to 25 ships in that three-day-specific window. >> gene, it's hard to look

through all this information and try toget a feel for -- while the bottlenecks may be getting relief, is it really simplifying things and making process faster, or are we getting back to the level of delivery times we saw prepandemic or is it so difficult because there's so much demand out there? >> becky, it's so complex. the continued trail of ships coming across is the highest it's ever been the holiday season shopping will our best all-time as will the full-year retail sales of 2021 this caravan of cargo continues. we'll hit a peak with the early lunar mid-february and they'll be working on a replenishment during the quarter it means america human strength will continue. >> does that mean retailers will still do things like some have told us?

they're sending ships all the way around to the east coast to take advantage of opening ports there. they're finding other ways of getting things through is that going to continue for the foreseeable future too >> there's a possibility we'll continue to do that. we call it a four corner strategy for the smaller ships coming across the pacific, there is capacity elsewhere, but it's the ability to get the cargo to the interior of the country that many retailers continue to focus on, and it's still coming through california much more work ahead of us. >> gene, thanks for your time. when we come back, we'll get jim cramer's first take on the day ahead. stay tuned, you're watching "squawk box" here on cnbc. good to see all of you, yeah! why is jerry so... popular? it's been like this ever since we started using workday. what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry. they sure do.

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welcome back even when seeing stock surges, participants have to be ready for the pandemic to keep throwing curveballs. >> the market certainly is another indication it's kind of looking past the variant to something that's going to be slowing down economic activity, but we're still not completely out of the pandemic there's uncertainty that comes from that, and it's going to affect economic activity, and we're going to have to deal with that in some way. i want to get straight down to the new york stock exchange right now. jim cramer joins us. where are you with that? >> first, i thought that was an

absolutely great interview solomon is a commonsense person other than his love for barry manilow, which is kind of strange. i felt he represented what wall street feels, and they're really reluctant to say -- to criticize anybody because you don't know the next variant we all figured out that these variants are incubating somewhere. think about where we were two weeks ago, when we furs started realizing that we were supposed to be panicking and panicking wasn't a strategy. but i thought it was a great interview about the zeitgeist right now. he was good on everything. >> i thought he was great on everything the question, though, we're looking at the markets this morning, dow up close to 350 points does that make sense to you, then >> i justthink that what happened was that, like you suggested, maybe omicron is actually a good force against a

bad force and delta being more malicious and not as strong when it comes to being caught i don't know, andrew i feel like any time we get very complacent about any of these, we get something new and the panic starts again i don't know who these panicers are. who sold all of these stores on monday between 4:00 and 5:00 a.m., andrew who are these people >> the other thing i want to ask you about, we had a little bit ko coverage this morning on some of the comments that elon musk made last night what do you think of tesla right now? >> the north korean hairdo stunned me but, look, i think that tesla has been in a bear market. he comes back with guns blazing, antiunion comments there's a lot of -- i got to tell you we often forget our president is so prounion that you even insert

something that helps ford. this is music versus farley. anyone who thinks it's not musk versus farley, doesn't get it. really doesn't get the temper of the times, andrew. you didn't think it was kind of north korean i don't think i can pull it off. >> you have to be superficial and judge a book by its cover. david always insists that the facts get in the way of the story! >> i just -- i don't think i could do it. could you do it, jim i can't do it. i can't pull it off. >> no, it would be hard for me to do, frankly it would change my whole -- stop it, david. >> quick reminder, look at -- david could pull it off.

david could do it. david could make that haircut work the cnbc investing club, you can find out more about it at cnbc.com/investi cnglub or point your phone at the screen right now. you're an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner.

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a little more than a half an hour until the opening bell on wall street. joining us now, chief strategist at principal global investors. it looks like the taper might be faster, but the variant might be milder which takes precedence in your view, near term? >> the markets are being rocked by omicron it's been a good reminder of the importance of diversification. but the more fundamental impact that the market is looking at is the fed tapering what does it mean? what does that mean about interest rates hikes and i think really that's actually what's been underlying some of the market moves in the last week or so. >> do you think that since we -- we're going to cross the rubicon in terms of interest rates some day, i would think

at least think the second derivative has us in a less favorable place for equities in terms of interest rates. for a while they can go up and equities can do well but do you think we'll get similar returns to the -- i asked david solomon this earlier. do you think returns in the next five years will be as good as we've seen in the last five. i didn't get a follow-up with david. we never have enough time. technology is amazing. and maybe it is -- i hate to say it's different this time can we validate some of these multiples just because we're discovering things so quickly so that we don't revert to the mean in terms of returns in the stock market >> so i agree. look, this is moving into far more challenging environment than we've been used to over the last ten years we're looking at financial conditions because of interest rates hikes, higher inflation,

higher volatility. when you take that into consideration, investors are looking at a slightly different paradigm you need to get a little bit more selective and clever about the way you're investing when we think about equity markets, they still can do well, but it's absolutely dependent on a strong growth backdrop you need to have the fundamentals we do like big tech still. we look at evaluations, of course, they are worrying. valuations don't necessarily mean that a correction is imminent but you have to have growth. when we look at the big tech firms, we look at the long-term trajectory that they're facing, and we do feel some confidence about those companies. >> we're going to -- we're going to leave it there, seema mid-single digit s&p growth is what we're going to get in the next five years. in a word, yes or no

>> yes, absolutely >> very good thank you, seema i wanted to save a little time for you becky. i understand that the body snatchers delivered your pod: they did, finally. i've been waiting and waiting and it's here. and i'm embracing it >> i see it. >> mine is here. it moves, as you can see it's kind of got a mind of its own. >> as all pods do. let's get a final -- we're going take a look at the futures right now. this was a late add, andrew. you need a plant grab one while we're looking at the futures. >> i got nothing >> i don't think andrew has a basement let's take a look at the futures, dow futures in the green. s&p futures up by 57 the nasdaq up by 278 the ten-year has been picking up

to 1.458% it continues to climb. in the meantime, that does it for us today we are being invaded by the pods and the pod people it's been happening all through the show if you don't get this, you need to tune in earlier make sure you join us tomorrow right now it's time for "squawk on the street. bye-bye. good morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber. bitcoin is back above 51k. oil near 71. markets looking past expectations for a faster taper next week. the dow coming off its best day in nine months. >> plus, intel shares, you're going to see they're surging this after the plan is taking their self-driving car public next