positive, from the retailers early holiday shopping numbers show a big jump in spending. we'll dig through the report p it's monday, december 27th, 2021, and "squawk box" begins right now. good morning, everybody, welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen andrew is off today. good morning. >> good morning, joe becky, you're here. >> i am. surprise >> that's my christmas present i left on friday, i didn't know if you would be here. >> i wasn't planning on being here until saturday. we stayed home for the holidays, so figured i might as well hang out with you >> how good is that that we did stay home? >> it is >> nothing is worse. and it happened to me -- here i

go off topic a couple of times back in college trying to get home for christmas. when they cancelled a flight and you have people waiting for you and a big thing going on christmas eve or -- >> i know. and you're all alone. >> it's like wait a second you can stay in a hotel in denver there's people -- >> it's not christmas. >> there are people waiting! i have to be back there. and it's so heartbreaking. and thousands -- >> i feel awful for all of these people, thousands of flights, which means tens of thousands of people. >> you get to stay at one of those airport hotels. >> airport hotels, yeah. just reeks of christmas, right airport hotel. >> good to be home. >> did an outdoor fire, did some s'mores it was very nice. >> you did >> yeah. >> did you get that candy? did you get that marshmallow

candy, did he send it to you >> i didn't. i got jam from he and elaine. >> you got the jelly of the month club, the gift that keeps on giving all year round >> i did. >> if you use the ones, they're marshmallow -- >> did you use it to make s'mores? >> yeah. you don't need a fire. all you need is graham crackers. we better go. >> we should talk about the u.s. equity futures because they're higher this morning, everybody looks for the santa claus rally, a true definition would be if stocks went up between christmas and new year's so we have the week to check things out not that last week was bad it was pretty good all across the board. you saw the dow up by 1.65% last week, s&p up by 2.25%, nasdaq big winner up by 2.3%. the s&p, look at what happened on friday. it closed at a record level just

on friday. that was the 68th of this year and that is a pretty phenomenal pace you can look at all the times we hit new highs throughout the year 68 is the highest we've seen since 1995 and 1995 was the highest we've seen since 1928. so you're looking at pretty long records in terms of the constant returns we've seen month-to-date was pretty good, too. for the s&p up about 3.4%. nasdaq not so great for the month only up by .75%. but still talking about gains and it's a strong year for the markets. the treasury markets we can look at yields, the ten year below 1.5%, yes, 1.48% but joe it's been a good year for the markets. >> good year for markets and we're getting indications the consumer really is pretty flush. it's like if you're going to spend money on the holidays one

way or the other -- we'll talk to steve coming up >> sadove? >> yes he's a senior adviser at master card i don't know what that means mastercard seems like -- i don't know, what do you have to think about running mastercard >> how the consumer is doing making sure people are paying their bills on time. >> i guess you think about can we raise interest rates, we still can't. >> got to wait on the fed. >> but holiday sales, if you're wondering, rose at the fastest pace in 17 years there were some higher prices, the supply shortages probably helped people do it early, so they weren't worried about it later. and then online was really solid because of the recent surge in omicron and covid cases. mastercard's spending pulse reported an 8.5% rise in holiday

sales, that was versus last year the expectations were a 7.4% increase and 10.7 increase over the pre-pandemic 2019 period that's amazing the surge was fuelled by purchases of clothing and jewelry, don't i know it online sales were up 11% from last year. and up 61% from 2019 as i said we're going to talk to former ceo steve sadove a senior adviser for mastercard >> the only thing i would say on that is, we have to ask him how much was inflation, were people buying more things or just buying the same amounts but it cost a lot more because of all those supply chain issues? i think when we used to talk to the national retail federation, they were estimating half the increase would be because of inflation, that's the bad side of things but consumers are flush and they're able to keep up with it so far. >> the consumer, for the last

couple of years maybe didn't -- you know, obviously didn't go out as much. didn't go to as many restaurants -- >> right that's why we spent so much more on the things we were buying because the services sector is the one that collapsed if you can't go out, you can't -- when people weren't going out to eat, they weren't going to the movies, you can't get a message or do the things you might do normally, all that money went into spending >> i think that's right. but the smaller things are, the more they cost i've realized that did you know that? >> a couple of little boxes? >> yes. >> good things come in small packages. >> got a birthday -- >> that's right, it was blake's birthday yesterday right >> yes december 26th is tough, but i think we overcompensate. we have to really do something special -- >> you don't want things to get lost in the holiday.

so we overcompensate you're doing okay. that's what i decided. >> at least you're not saying here's your birthday/christmas present, that's the worst. >> we don't do the combo, no you get this, half and half. you get three times as much. >> that's a good dad for you we should give you an update right now on covid as the omicron variant surges in the united states, the average number of new cases is up to 180,000. at least five states, including new jersey and massachusetts reported the highest ever seven day average case counts. as of christmas eve more than 69,000 americans were hospitalized with covid, that is up 2% from the prior week. i think we all know people who have gotten covid. know a lot of people who have gotten it, hopefully this is a milder version at least that's what i've seen with the cases i've seen to this

point, but when you have so many more people getting it you are going to see hospitalizations rise, too. >> i hesitate to say everyone has got it, but everyone seems like they have it. it's unbelievable how many people are -- they might not have it but they know someone who has it. >>ing six degrees of separation have gone to one, at least in this area of the country >> have you heard anyone say i can't even move, but everybody is vaccinated too. >> everybody i know who's gotten it is vaccinated. >> it's minor, it's asymptomatic or i think i feel -- >> like a cold >> yeah. >> and again, everyone i know who has gotten it has been vaccinated, so i don't know what that tells you we have seen hospitalizations rise fauci has warned it's going to get worse from here probably but people i know who have gotten it have been mild versions. >> i had my card out yesterday

because we did go out, i had to show it. and my booster was october 26th. so it's -- it was december 26th, i'm like, yes. two months, man. i'm like bring it on the booster helps. in two months i'm like 70 times antibodies, aren't i >> i don't know about two months out. that's where the questions were. did you see the questions raised >> i'm good. i'm good >> we all are. we hope. >> hopefully. >> the outbreak, though, has taken a toll on air travel after three straight days of mass cancellations and delays over christmas weekend it's been adding up. just yesterday more than 1,500 u.s. flights were cancelled and more than 6,000 were delayed, according to flight aware. this morning flights within, into or out of the united states are topping 600 and it's 6:09 only on the east coast united, delta, american and

jetblue all citing the surge in covid cases among flight crews and operations staff t the airlines have asked for the cdc to cut quarantine time down from ten to five days. i don't have a problem if you have a negative test coming back >> this is the eventual shift we have to make. >> eventual but is it now? >> even when we had dr. fauci on, i said when do you go from where you're thinking this is like ebola to where you're thinking this, at worst, a bad flu. and some day if you're vaccinated and it's endemic and there's a strain every year, you can't do the -- when the nfl initially i said with the nfl, wow, that's kind of weird. but now i understand it. if you're asymptomatic and you're triple vaxxed, you're not

going to be fielding a team, you're not going to be fielding a team you have all these people with no symptoms but maybe they've got -- you know, you can find -- they were exposed to the virus, you can find something with the pcr, find some trace of the virus, do you do the ten day quarantine on omicron? >> here's where it gets complicated. not everybody is eligible for the vaccine you have kids under 5 who can't get the vaccine. you have hospitalization rates of children in new york has gone up. >> it would be interesting to know how many symptomatic triple vaxxed people are. if there are people that aren't vaccinated but around other people triple vaccinated and you may be asymptomatic. it's complicated to say, but -- >> it's complicated. >> it is you're right we're going to get to that point

but i don't know if this is it and i don't know if the science is keeping pace. >> i hope omicron gives everyone -- people who do get it have some increased immunity, and this displaces more serious strains and this is -- let's hope 2022, people are counting on it, are the full recovery year. >> i was counting on 2021 being that year, i was disappointed. >> remember we were hoping to open by easter of -- which easter was that? 2020 easter. >> two years ago >> in new york city subway service is going to be decreased. the emta said it's been affected by the covid surge the governor eased rules that allowed employees to return to work five days after a positive test if they're fully vaccinated and asymptomatic

there you go outbreaks are taking a toll on the college football season. helped rutgers, though >> yes, it did >> the military and fenway. >> winning ugly. >> you may not recognize any of these bowls but i don't know half of them there's a military bowl and fenway bowl. >> i guess i know where the fen way bowl is. >> cancelled yesterday due to a large number of positive tests on boston college's and virginia's team. and late yesterday the university of miami said it wouldn't be able to field a team against washington state in friday's sunbowl it is bowl season. >> wait? they blew out my story i was trying to do bring back cruise ships, please. i want to do it because i want joe's reaction on it you may have heard this there was a holland america line cruise ship that returned to san diego after mexican health officials barred it from docking because of a covid outbreak on

the ship the guests were not allowed to disembark after 21 crew members tested positive. holland said a small number of members, there are 875 in total, a small number tested positive and said they're experiencing mild symptoms. can you imagine that, cruise on the holiday, for christmas, you don't get to go anywhere, it's a cruise to nowhere and there's covid cases circling around. >> and you're not allowed to get off. >> you can't get off, yeah >> you're in one of those -- >> it's the hotel california version of a cruise. >> a lot of those rooms are not so roomy as they say. and you might have a window like -- that would be bad. that would be bad. >> see, i wanted your reaction for this just when you thought it was safe to go back on the water. >> no, not ready to do that. coming up, stocks relatively calm to kick off the final

trading week of the year we're going to talk strategy next this is "squawk box" live from the nasdaq market site in times square that's not true at all, because i'm not there. i'm in engelwood cliffs. nobody is down there, empty. we'll be right back. what does the future of strength look like? ♪ ♪ it's a personal trainer that assesses your strength and adds weight as you progress. it's dynamic weight that adjusts for you in real time for a more efficient workout. c'mom and it's a roster of coaches that motivate you to get stronger, faster. the future is strength you can feel and results you can see. and you can only experience it... (sigh) ...on tonal.

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smart kid, bill. oh oh so true. and now, the moon christmas special. gotta go! take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes switching fast and easy this holiday season. futures right now are showing some gains, supposed to be the santa claus rally this is the official start of it, it was pretty good last week

maybe that was a premonition for saging what's going to happen with marks let's talk with kevin simpson. he's dragging out the dogs of the dow. we got to talk about that. author of the upcoming book "walk towards wealth, the two investing strategies everyone should know" due out in january. and eugene welcome, gentlemen are you dragging out the dogs or is it something to think about valuations are pretty high it's kind of the opposite attack, buy high yielding stocks with the idea they haven't necessarily participated and maybe it's their turn to shine think it's going to happen >> i don't know about that, joe. i figured we'd kick it old school with dogs of the dow today. top ten movies, top ten tv shows, in this case we look at

the top ten yielding stocks within the dow jones industrial average. the problem is set it and forget it strategies don't always work the way we want them to. this will be the fifth year in a row that the dogs have underperformed the big board index. looks like they'll come in at 9% this year where the dow itself is up at 17.5. they're dogs for a reason. i like looking at the list to see if we can call some good ideas. >> i'll get to gene in a second. a few you like in the dow, not necessarily the biggest dogs but you got a top three or four for us if you want to maybe just diversify into this. five years it hasn't worked, maybe this is the year. >> i don't know about that i think active management prevails it's a great place to look for opportunities. not every dog has fleas. last year we owned three of the

dogs, chevron, sysco and verizon. verizon came in down 10% but still not a bad track record for those three. headed into 2022, we still like chevron, still on the list we still like verizon, still on the list, we're also picking dow chemical, which is the number one name on the list you don't want to be number one for too long all of these names are well valued, and good things tend to happen to cheap stocks don't believe in the strategy, joe but look for these names for opportunities. >> the first week of january can be important, and you expect the rest of the year, maybe you think the tax loss harvesting is maybe people are winding that down, so maybe we get the santa claus rally this week and the first week of january could be solid that would portend good things for next year you like the markets here? >> i do, at least for the start of next year

i think that we've already had enough of a santa claus rally to be above the average up 5% last week, even though we're flat this week we had a successful santa claus rally the reason january is higher, during the november, december, you had investors selling riskier names. i think they'll go back to the names in january so you have more demand for stocks that were high flyers most of last year. going to what you were talking about with dogs of dow strategy, i think that's going to be a good strategy the second part of next year because i think value is going to take over. as kevin said, it's under performed the last four years but unfortunately corrections are an inevitable part of market cycles and we're going to have a downturn in the market we'll have higher interest rates, we have high p.e.s and

certainly due to f.o.m.o. investors are moving around to successful names but i think 2022, the second half of the year we'll see correction here. i'm in the camp we might be positive next year but i think a single digit return. >> when we put the pandemic to rest, which i'm hoping second half -- that would make sense, when we put it to rest and the market takes a breather, the way things work, finally happens and then you have a lot of the -- a lot of the relief rally from it. >> i think that's correct. if you look at what we're doing with omicron, certainly milder symptoms is a great thing. investors focused on that. so we haven't had selloff in the market as a result but if you look at mobility this weekend, no one expects that all

these flight cancellations, and they're occurring because of labor shortages. that's happening across the board. whether real estate, anywhere, so employees are out so you get a slow down in productivity and there's going to be a reduction. so i think that net-net we've been a great market for a very long time but we certainly are overdue for bringing valuations from double standard historical. >> we're trying to figure out whether the -- our response as a society should be commensurate with what we did with delta and the other covid. and if it is, i mean, you -- you mention maybe the symptoms are less but if we have the same lockdown sort of mentality, or supply chains around the world could be affected the same as before, even though the symptoms aren't as bad but it's going to be hard to make that transmission

where you let people go back after five days instead of ten days you know, the supply chain issues can be just as bad as the original wave even though the virus itself is not as bad i don't know if we considered that, and we saw it over the weekend. >> let me give you one quick example. i took a trip over the holidays because i was not going to get on a plane, i drove nine hours so just me personally, instead of paying for a plane ticket i paid probably 70% less by driving. a lot more effort, i felt a lot safer. i think that's happening in a lot of cases, people making decisions that's going to affect revenue overall. even though we're not locking down, i think we're going to have a slow down impact from this variant. >> first half hour is pretty good it's like, this is okay. it's not bad then you got that eight and a half ahead of you, that's the only problem kevin, beside -- i like lists,

too, but other than dow dogs, et cetera, you like active management, what else do you like what else should you be loading up on, if anything >> i think gene was right we're probably not going to see trees grow to the sky, double digit returns next year. so i think it's having a little bit of caution heading into 2021 isn't a bad idea tempering your expectations but looking at quality, looking at profitability, we mentioned dividends as a huge part of it, it doesn't mean you need to abandon growth we own microsoft, apple and cisco, within the technology space. maybe not huge dividends on the first to, but solid growth the other thing we're going to take advantage of in the heightened volatility environment. we'll wry a lot of covered calls keep dry powder. and active management is important we talked about three stocks we own in this list for

2022, by no means does it mean those are names we own at the end of 2022. i looked at the list this year and at one point in the last decade we owned all of those names. so active management makes sense spe especially in an environment with fed tightening. >> i take offense, where did dogs get -- it should have been cat. >> we've always revered dogs. >> i do. i don't like calling things dogs i think dog is a compliment. now cat, becky, on the other hand -- >> the dow >> call them the people of the dow. cats are good. >> cats are okay they're aloof. did you see most of them are soci sociopaths >> yeah. >> you did see that? >> i did see that, it was on drudge i clicked through, of course, and checked out my cat. >> i knew it. >> yeah.

>> plotting. they do things i think they sit on your face when you're asleep i don't trust them i don't like them, i'm allergic to them. >> my cat is a good cat. cocoa is good. when we come back we talk about one big winner and one big loser at the box oicffe for the holiday weekend. "squawk box" will be right back. it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪

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well, "west side story" is officially a box office flop after three weeks in theatres

the movie generated just $36.6 million in global ticket sales. its production budget was around $100 million, and that doesn't including marketing cost it failed to gain traction outside the new york and l.a. markets and it didn't bring in younger viewers. in the meantime, "spider-man no way home" topped the billion dollar mark other the weekend. it's the highest grossing move since 2021 joe, i don't know what this says about us, about movie going, maybe our baser natures but i'd rather see spider-man, too >> i think it was from when i played video games and i really felt like i could do those things i don't like heights al lot. >> then you can't do those things you can't do those things. >> probably not. probably wouldn't be good. i thought "west side story" was

going to be good. >> i'll see both of them at home >> yeah. i heard it was like a woke mess. you can ruin something if it gets too woke, i think >> look, the thing is, if it's big in new york and l.a., those are the places where -- it's big with an older democrgraphic, that's the demographic less likely to go to movie theatres right now given the resurgence of omicron i didn't realize it had a big production budget, $100 million, that's a big budget. >> i guess it's evergreen, it doesn't matter, different actors, stories, different -- you know, it's never going -- >> it's always going to be rita -- >> i was thinking spider-man. >> yeah. you're right rita is awesome. there's like five things that she -- >> she's won an emmy, an oscar,

the tony award, what else -- there are a couple of -- >> sag things. >> one of two people who has won all of those things. >> yeah. speaking of woke, remember the go daddy ads, those are gone those are so gone, so cancelled. but check out the shares of go daddy. activist investor star board has taken a roughly 6.5% stake in the company, worth around $8 million the hedge fund plans to push go bad daddy. coming up, get ready for the trading week ahead we have a squawk planner coming up next. and later we'll talk about the impact of a holiday weekend flight cancellation on the airline stocks "squawk box" coming rieght back

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good morning, welcome back

to "squawk box." not a lot going on with the futures, but we are in the green. up about 24 or so on the dow the s&p 500 indicated up 8, nasdaq up 37 s&p 500 set a record high, good week last week time for this week's squawk planner and housing data is in focus. tomorrow we get the case home price data wednesday we get pending home sales and thursday weekly jobless claims the stock markets are open all week, including new year's eve on friday. but there's no observed holiday for new year's day this year, which was what was different about christmas, becky i struggled with it a little bit. >> yeah. >> i was glad -- we don't get christmas eve off normally because christmas is during the week >> right. >> and then same with new year's eve, you don't get new year's eve off, but then we did get christmas eve off. they gave us that because christmas was on saturday but they don't do the same with new

year's. >> right you get a floating holiday some other time. >> you do? >> yeah. you get a floating holiday. >> i'm going to take some time off starting on thursday, so i'm just telling people -- >> i'm here thursday. >> -- when i'm out, i'm fine don't be starting rumors about -- >> if that's the case i'm going to be out tuesday and wednesday. but i'll be back thursday and friday. >> you've chosen this. we have days to burn and we haven't burned a lot. >> at the end of the week. and the kids are off school so i want to be home and hang out with them, that's all. i want to play games and bake cookies. >> i'm clearing it with everyone right now. >> yes don't worry. when we come back, though, the covid surge taking a toll on airline's flight schedules over the holiday weekend. an update next. and later bitcoin climbing above 50,000 again we'll talk to anthony about the weekend's move a reminder you can watch or

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the big travel boom expected in 2022 could be volatile and full of wildcards, seema mody joins us with possible buying opportunities. >> travel in 2021 was mired by

travel disruptions and new variants experts say 2022 will likely be the same essentially overseas from vaccines and testing requirements, but they say it won't discourage booking trips next year. >> people become used to it and it becomes another rule. like it's just another part of travel that may not be the most convenient but i don't think it's going to prevent people from taking the trips they want. >> of all the travel related names, the big hotel operators performed the best up 25 to 40% this year as rising vaccination rates raised bookings and hotels are outcompeting airbnb this year for 2022, gordon haskin still favors airbnb forecasting longer

term bookings to accelerate in the face of omicron of the hotels, analysts, helping the hotel operator increase share of resorts and travel which continues to be the strongest part of the recovery coming off a strong week, the cruise lines are trading lower in premarket here. holland america was blocked from entering mexico due to covid cases on board it is the latest ship forced to change its itinerary due to covid on board and, of course, infections are happening despite a deep focus on prevention. >> that's what i was going to ask you about. just in terms of the potential setback for that i think people finally thought it was safe to go back on the water again. you hear something like that where even if you're not concerned about covid, even if you feel like you're safe,

vaccinated, maybe you had exposure so you feel like you're okay with it or think omicron is not that serious, you get trapped on your cruise line and get get off or you're stuck in your room, that may change the appeal of the cruise lines just the same. >> certainly in fact, the cruise lines have updated their protocols. there is a mask mandate you have to be fully vaccinated, also present a negative covid test. the question for wall street is with these cases rising and with more cases on board, will that prevent or discourage customers from booking a cruiseship. the latest commentary we got from carnival last week was that omicron so far has resulted in a small spike of cancellations that's one of the reasons we saw cruise stocks outperform last week with carnival gaining as much as 13 to 14%. we'll have to see if that story stays the same going into 2022 yes, the idea of being quarantined on one of these

ships doesn't sound like a great vacation, but the. >> happy holidays. >> but the cruisers are very loyal. those who like cruising love it, they stand by it say it's the way they like to travel. so they have a loyal customer base. >> good to see you in the meantime, the major airlines cancelled around 1,500 flights yesterday capping off a nightmare weekend for carriers they cited staff shortages as cases tick up across the country. and joining us with more is he len becker a senior research analyst at cowan. my question on this, obviously you can understand if staff gets covid, forced into these quarantine periods of ten days, you can understand why this happens. my biggest question is how come it didn't happen to everybody? this is a situation southwest said they didn't have problems is it because southwest got hit so hard a month or two ago and

as a result cancelled some flights and maybe they had extra staffing for situations like this >> thanks for having me on the show, good to see you, becky i agree with you i think it's a combination of two things one is obviously it's hitting the general population, and two, i know american and southwest offered their crew members extra pay to work through the holidays, and maybe that helped bring some of the reservists back on board that would not necessarily have worked pre-pandemic so maybe you saw some of that. but i guess it's -- the variant is going through the general population it's not so surprising it's going through the airlines as well. >> i guess the bigger question is will this have ripple effects. obviously people made their holiday plans if the you're planning on going somewhere you have to go home. will it change what happens in january, february, march, for

leisure travelers or business travelers? >> so on the leisure travel side, we think things will take a turn down anyway beginning next monday or tuesday i know we don't have off friday or monday for sure, but i think at lot of other people might so they will be trying to get home, to your point, and then we think a dip down to mid february is probably what will occur on the leisure side on the business side return to office has been postponed, and every time that's occurred we've seen a delay of return in business travel. so we're thinking business travel probably doesn't come back before martin luther, so i think that's the 17th of january. and then a big up tick in the middle of february where president's day weekend. and then we think that's going to be strong then travel will be strong through the summer months. because people have been home for so long. i think they're just tired of it they want to get out and about

>> amen to that. what do we do with these stocks they're down a little bit today. but they've been pretty buoyant. >> yeah they -- i think they're bouncing along the spot. i know the managements have always said they expected a choppy recovery. i think we expected something similar but we still think -- we think we're going to have a great summer on the north atlantic this year we really think that you've got two years worth of demand and probably not as much capacity that -- because delta and american specifically retire most of their wide body fleets and you just can't get american, for example, can't get the 787s because boeing isn't delivering them right now and they cancelled a lot of flights for the summer months proactively the. so you have a lot of demand and you're not going to have a lot of supply and so we think

pricing will go up we were thinking like right around now we would want to shift away from the domestic focused airlines into the international focused airlines and now we're thinking because of omicron we probably have a one to two month delay in the international recovery i to two month delay. my double interest in january just got postponed to may. sos that three or five months. >> our trip to switzerland got canceled too >> i saw that. sorry. >> thank you for joining us. >> take care >> early summer for davos, would they do it in early january next year >> a year until the next one

june, june, june, june >> no way. my mind could not take two davoss virtue signaling i couldn't take it

holiday sales rose at the fastest pace in 17 years master card's spending pulse reported an 8% rise from the holiday sales. let's bring in former sachceo

and master card. you new know everything about this people found a way to get what they wanted to get done their hand was forced by supply chain worries. they did the right thing and got shopping done early. >> they shopped early. they saw an 8.5% growth. the margins were pretty good because promotions were less everyone was concerned about supply chain this was the story about the stores coming back

you had a 50% increase and brick and mortar stores on the increase and growing at that 8 to 10% growth range. one of the stand outs was department stores. you saw them growing versus 2019 people were moving away from the at home categories where they were sitting at home fixing up houses now apparel is hot again you saw an overall increase of apparel close to 50%. >> so you are seeing fashion what youfound where doesn't

even sound like an either or i don't 24i onthink omicron pre that but they did more online. it is really weird not either or, just and. you saw an 8% growth in brick and mortar shopping. great rest in categories apparel, department stores all tracking really well i thought when we saw apparel come back, you'd see the

stay-at-home categories decline. that didn't happen the high end holding up well where the stock market is, you'd see a 90% correlation >> was it inflation or overall more units sold? >> i think it is a combination of both. half of the increase is driven by the cost. this is real consumer health >> thank you you did know everything. let's talk again soon, if you can. you've got your pulse on all of this

appreciate it. we'll be right back.

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2021 all the major averages are on multi-day winning streaks. holiday travel nightmare over 1,000 flights canceled. a mix of surging omicron and bad weather. spider-man, the big winner in the box office doing something no other pandemic film has done. >> good morning. welcome. equity futures adding to the positive momentum we saw last

week looking back, who would have thunk really we'd double from the pandemic lows. the stock market has done nothing but go up based on cheap money or a recovering economy or whatever you want to attribute it to. it has been amazing and is up for debate with the fed at this point, perhaps change course it will be slow and gradual. we've had some great years and we are right on a high we'll see whether the first week of january continues that. as weeks go the month's go that is a positive for the year. treasury yields, you would think in 2022, we'd see one and three quarters and 20% but we are still below 1.5% >> crazy let's get you caught up with the

latest in the spread of covid and omicron. nearing 200,000. that is the highest level we've seen in a year on christmas day, new jersey and several states set seven-day highs. cases are likely to keep surging. early indications that omicron is not as severe isn't a reason to be come placent >> you have such a high overwrite of new vass, you have many new people, that might neutralize the positive effect of having less severity. whether hospitals will be able to keep pace with these new numbers. let's get you caught up over the weekend, surpassing 52 million

new covid cases. more than 800,000 americans have died from the virus, joe >> from that weekend news, the fall out from the surge resulted in big headache for travelers. airlines canceled more than 2,000 flights since christmas eve. carriers beefed up scheduled omicron cases forcing workers off the job. three cruise ships had to change their schedule if you were infected, what can you do >> that guy, leaves notre dame in a lurch

the points guy that's a pretty common name. above expectations senior reporter steve leechman in theo out date. where are you? >> i'm in a udl. >> did you see the front page of the journal? did you hear about jerry an article, finding a jerry's voice. looking all over to find someone who sings like him

>> on the front page of the journal today? all i saw was omicron stuff. looking over the weekend i know a few people, you know, joe. it would be good >> really? you are talking about someone on camera right now not me you have the flight and can certificate and the outlook is changing faster to keep it up. forecasters send in their outlook with notes saying stay tuned for more to come fourth quarter growth continues

to hold up reasonably well it gave way to the rebound. you can see there, near 7% the first outlook there pushing growth into the second quarter joe didn't know i was going to talk about this. the band fish canceled their new year's eve show at the garden and moved them to the second quarter. ben writes in, we have trimmed innation on services a bit in december and in q 1, we also delayed what had been the beginning of declines in

inflation on goods by a quarter. seen them peaking near 6% but only by 2023 does it get down towards the fed target of 2% but only slightly above at 2.2 all of this, everything here subject to changes forecasters try to figure out how much delays, canceled and spending and overall activity. and how much many americans begin to treat this latest outbreak as more of a new but regular part of daily life, joe. >> retail stuff, we don't always think about things sometimes we are surprised at the way things work out. it is tough to make blanket statements about this.

people went back and didn't stop with brick and mortar and that prompted them to do online going up 11% online from last year when 2 was all online, it is staggering. >> that's pretty good. and it was on the front page down there on one of those general. >> it doesn't appear in my phone feed >> i'll send it to you you know the problem i had with donna. >> i know donna.

she's a good soul. >> i'm not saying she's not a good soul. >> remember when john put yoko in marriage doesn't mean you need to work together in the band >> linda with the little wings god bless her, she's gone sorry. go on. very hard to prepare for these i never know where you are going. it is one of the reasons i enjoy coming on. >> you've worked with your spouse i've worked with mine. >> my wife cannot sing i would not put her in my band i'm sorry. >> good luck going home today. >> thank you we'll see you later. when we come back, we'll have more on the surge of the omicron

covid cases and we'll cover the covid induced travel cases put some real snarls in plans. thousands of flights canceled. brian kelly up next. the points guy what you can do if your flight was canceled and how to book smartly for 2022 let's check the markets this morning. things are in the green so far nasdaq futures are up after closing 131 points on friday s&p indicated up about nine points and s&p hit its 68th record of the year on friday not on fdariy. on thursday. squawk will be right back.

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as we've mentioned, the omicron covid variant hit travelers as sick airline crews prommed a slew of late cancellations. 1.7 million travelers have been impacted joining us now on the historic travel and what you can do if your flight gets canceled is brian kelly, ceo of the points guy. what we heard is the stuff of nightmares for many. you finally planned that trip, get to see family or go away for the holidays and your flight

gets canceled. what would you be telling those people right now >> the first tip i have, check your credit card insurance if you booked on airline or travel hotel credit card, a lot of them have up to $500 per ticket for reimbursements for extra fees airlines are not legally ob obligated. in 2022, use credit cards with that built in coverage that can be a game changer >> what cards do provide that? >> chase sapphire, united explorer look up trip delay and trip cancellation amex platinum will cover for weather, which we saw this

weekend on the west coast. airlines are stingy. >> what about if you watched what happened and now you are trying to make your plans for coming up in 2022, are there things you can do for planning the trips, we don't know how we'll play out and go from here. a lot of this will play out from here >> look, these delays and mass cancellations are not over we've seen american airlines had a meltdown, southwest, spirit. it will keep happening if you really need to get somewhere, book on another carrier on a fully refundable ticket or use frequent flier miles. say you book one for a couple hours later just in case

>> what? wait a second? that sounds like a risky 12 strategy if i want to take my whole family somewhere, you are saying book all of us on one flight and the second flight? >> yes with flier miles, can you cancel up to the second of departure. if you've got a flight booked, that cancels, you've got a backup if it cancels, you've got another flight booked. not a common tip look into the rules. most flier mow grams let you book and cancel at the last minute if you've got a ton of miles sitting around and you really want to go on that trip. >> that sounds really sneaky and

i like it. let's talk beyond this people are looking to travel internationally. there are concerns whether you can travel internationally, what would you tell people about international travel right now >> a lot of countries are imposing strict lockdowns. netherlands, you won't be able to go out after 5:00 people. check the rules. nonstop is more expensive. the uk makes you have a negative covid test, even if you don't leave the airport. try to book nonstop. traveling internationally, you must leave home with a proctored covid test instead of spending your last

day trying to find one, there are tons now the u.s. allows the binax proctored test, you can take in your hotel room. >> what is a proctored test? >> there is a binax now and there is a proctored binax now that proctored test will allow you to come back into the u.s. you can't just do a self-test. >> i know what a proctor is, generally. do you download it on to the app? >> yes you basically facetime who watches you do the test. it is very convenient. there are several companies authorized to do this. you can pack them if your suitcase you now need one within a day of departure coming back into the

u.s. that's a tight time frame. >> i have never even heard of a binax now proctored test you can't even find a regular binax test where do you get them? >> you can buy them online on the points guy, we have a post on all the different at home tests eligible to come back into the u.s there are a bunch. if you are a little bit savvy, it will take a lot of stress out of your travel if you are trying to get that test to come back into the u.s >> brian, thank you. we appreciate your time and wisdom good to see you. coming up, a newlook at holiday data

spider-man, saving the box office for another weekend we head to break let's get a check on screaming stocks after a long weekend for some people and bingeing stay tuned to more on cnbc

talking about the morning holiday sale despite issues and omicron. >> supply chain, covid worries and all. the 2021 holiday season was strong with total retail up 8.5% online and all forms of payment from november 1 to christmas eve according to master card retail sales were slightly stronger shows that many shoppers did take advantage of early deals to make sure gifts were bought. shoppers did return to stores and kept online shopping too in-store up 8.1, e commerce up

11%. online sales made up almost 21%. up from 20.6 in 2020 and 14.6 in to 19. so a pretty big gain in years. growing at impressive 47%. jewelry up 32% department store sales up 21% and electronic sales up 16%. joe, remember the season isn't necessarily over this is a really big week to entice shoppers to make changes and returns and to cash in gift cards to take vachbtage of discounts. retailers can't recognize those until they are actually used >> now that we know what

happened. >> instead people got out early. that turned into a positive. we turned into a term either and. >> it would be both and. we did online, we did early. we did late, we did brick and mortar >> it is funny you look back at some of those projections. they were pretty strong. the supply chain worries put a

crimp in things that had happened particularly online, they knew they had toe give themselves time and actually have them delivered. so a positive holiday season we know there are so many job openings >> i think the bullish master card projection was pre-omicron. omicron, i don't know why people didn't go to the mall because of

that it is not the same there's no parking spaces. >> it is interesting you look at last year. last holiday season, we didn't have vaccines at all so in-store numbers were lower but people still did go to the stores this year, it makes sense the numbers are higher we have the vaccine. so many people feel more confident because the vaccines, they are hoping with whatever variant it was alpha, delta >> it wasn't the c variant we skipped that one. >> i don't have a question for you, i just want to say i like your hair. good girl. >> thank you >> we are all getting a little better at this as time goes on >> it is good. it is fun.

i like it. >> what am i chopped liver >> i like your hair too. >> you didn't use a curling iron on it, joe i had it out here. when i do it, i can do it in front of me. i can see exactly what i'm doing. >> then slap it on >> i like your hair too. it looks good. >> i wasn't really fishing >> you look great, joe >> still to come, the latest in the online surge of covid cases and what we should expect like we all wanted to do for so long. we'll look at what is in store for the ipo market after a banner year for new issues the odds of new regulations. you are watching "squawk box" and this is cnbc

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we are about to wrap up a huge year for ipos you may not remember them all but companies like bumble and

more went public. >> this year was one for the ipo record books companies and spac raising $318 billion, the largest number ever even after adjusting for inflation. top 22%. since then the market has shunned them negative 11% the market sold them off amid high moving shops and that could mean higher interest rates next year. a weighted bag basket produced returns negative 3.7% in a year where the nasdaq is up 21%

a year that doesn't bode well for 2022 saying next year's deals were all about a return to fundamentals you can expect to see more back in industrials and financials. usually a bit slower growing unlikely we match the record issuance more about spac, they are unlikely to push next year into record territory saying the nearly 500 spacs could raise additional capital and expecting clarification from the sec that could change rules a lot of question marks in the spac world

>> would things cool if markets crashed or come down we are still talking at or near record highs for now, this is wideopen the higher the valuation, likely to pull out. the fact that a lot of the ipos are under water. they put money into these things they say, well, a lot of these unfested new issues will be

ready to put that money to work in a new area. even temporarily if these things work themselves out. >> by the way, leslie, i like your curls too see you later. >> thank you >> coming up, harvard infectious disease dr. madad will join us on the latest read on omicron and what we foe and what we still don't know stay tuned to "squawk box" on cnbc

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the u.s. seeing a 48% increase omicron driving new infections to the highest level saying even though there are signs omicron is less severe, it is so infectious and so many cases it could cancel out any reduced disease severity joining us now, doctor from new

york city health and hospitals i certainly understand the rational, doctor, for keeping our guard up we still need everyone to get vaccinated i understand that. that does not pass the smell test for me, what fauci just said if it is less severe, so there will be more cases how can that possibly translate to something much more deadly, just having more cases of a less severe disease does not communicate it will be as bad. i understand where he's coming from but it sounds way too pessimistic for me does that sound good do these tactics work? >> to break it down a little bit, the new variant causing

less severe illness. we'll see high numbers and millions of americans remaining unvaccinated 20% of americans remain unvaccinated or only have one dose what we know about omicron, if you are unvaccinated, it will find you you will get sick and some of those will translate to hospitalization. with one dose, you don't have full protection. we have a record number of pediatric hospitalizations happening. we have a number of vulnerable people still at high risk. you see a variant spreading as fast as omicron, that is bad news for all of us we want to make sure that is spreading. that's why over the next couple of weeks or months, we'll see a

potential rise of hospitalization. looking at the data right now, seeing about a dozen states of reporting increase of hospitalization rates. slowly increasing. at the same time, given the early good news it is causing less severe illness, hopefully people will continue to be protected. >> that's the other thing, being fully vaccinated doesn't protect you against omicron either because the efficacy of the vaccine goes down. i assume you have benefits maybe we don't have all the data yesterday. it seems to be less virulent

so many people are vaccinated. can you say with certainty that an unvaccinated persons that never seen covid, that the only krn strain is less virulent than delta? >> i think no one can say anything with certainty. this virus is changing and evolving so fast sometimes an hour ago may not hold true today. the people that have had infections, the data coming up with the risk of increase and

reinfection. >> gately that omicron is not something to be messed with. protecting against the most severe outcome yes, you may have a breakthrough infection. we'll probably see much more infections and that will be more common that is not something we should be concerned about what i'm concerned about is who is coming to the hospital. >> we've always been concerned very difficult topic lives versus lively hood should we be changing the quarantine protocols based on the less severe virus just so that things -- so we don't lockdown and get into the same thing? look what happened to the airlines over the weekend are w

in constant possible lockdown? >> i think for human behavior plays a large role when they see cases go up, they'll dot same thing and put on a mask. one of the single best things besides getting vaccinated is make sure you have a good mask at home. as the weather changes, if the virus continues, you want to put that mask on continue doing the activities you enjoy doing, do it safely.

we've learned so much. we can continue to do the things we love. we are going to get through the other side of the pandemic the big question is what, when we look at the time line, that will be two months from now, three months from now, four months from now. we'll see much more immunity we'll see another variant down the line, we'll be better prepared with a lot of tools in our tool box. as we look at the virus, we can use those safely in pandemic years, that's not a very long time we have to all do our part and go on and live -- i won't say a

covid-free life but at least something we can live with and not see so much mortality. >> one of the problems has been testing. testing has crumbled we got our kids tested on the 14th we didn't get one of our kid's results until yesterday. that's completely useless. you go to the storz, they are sold out if you've got a family of five or six people and someone develops covid, the number of tests you need is phenomenal not like you need two tests per person you need six, seven, eight tests to continue on with their lives.

>> we have a better time of testing. >> i completely agree. the testing bubble continues to occur and we should have been ahead of the testing game and we are always two steps behind of the announcement saying those tests cannot come soon enough. we'll see much more transmission in health and be given holiday gatherings even for us, it is really hard to find rapid tests. those tests are hard to come by. if you think you are sick, if you've had high-risk exposure, isolate yourself the cdc has come out to say, seven days of isolation with a negative test or in the state of

new york they've gone to say five days if you are asymptomatic testing is something that is a factor here. if you are symptom magnetic, don't brush off these benign woe you want to doing everybody you can to curb transmission rates right now. >> doctor, thank you we'll see you again soon thanks. when we come back, what the new "spider-man" film dith mie in the pandemic has been able to accomplish. we'll have a rundown "squawk box" will be right bac (swords clashing) -had enough? -no... arthritis.

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. "spider-man no way home" hit a billion this weekend joining us to talk more about it is sarah fisher, axiom's reporter is that telling us about the movies in general or this movie in particular? >> i think it's more about this movie in particular. tons of movies have come out, but not to this huge momentum.

spider-man didn't even debut in china, typically where marvel films get huge audiences it says people are willing to go to theaters despite the omicron ride, if it's the right move we haven't seen this for any other films. >> joann, maybe the proof in the pud sergeant what we've seen with "west side story. it's taking in less than $37 million, when it had $100 million in terms of the budget for the film what happened? that film has gotten great reviews. >> it's gotten great reviews i had seen it as a screening -- this is before omicron popped up the theater was full, people

loved it we were going to take our own family as a christmas movie, which we do every year, and we looked at the variant and then looked at people buying tickets, and we never t. never mind of i think there's mill qulons of people like that my concern, becky, is that the movie theaters, the studios will be looking at this and saying, is there a market for grownup movies >> right. >> i think this is problematic look at what's on the schedule for next year? you've got -- it's great for disney, which has a bunch of additional marvel movies coming out, and then you look at the other films that are getting all the attention for next year.

again, it's these sort of remakes or sequels, indiana jones, top gun, avatar, jurassic park i think there's a realignment going on i would hope the studios don't look at what's happening right now and say there's no market for grownup films. if the studios figure, hey, maybe grownups have decided they adopt want to ever go back to the theaters, that could have ripple implications. i think it's more the type of content than the types of people willing to go to a theater we're finding action and adventure films, even leading up to the pandemic, have been well suited for the theatrical experience people want to dress up in their favors costumes, whereas dramatic films, they tend to

perform much better for streaming services some of best films have been mystery sort of type of thinking the other thing is what is unusual about "spider-man" doesn't have its own streaming service. that's part of the reason why they didn't get the same-day -- if it was just a disney production, you would imagine they may not have done the straight to theater release. that would be good for streaming. there's a few interesting things, but i agree, i think it will be really tough for other genres that are not action and adventure to continue to sell at the box office happy new year to both of

you. >> great to see you, bye-bye. >> you too. coming up next hour, why billions of dollars of worth of brand-new planes ar waiting in the boeing bone-yard we'll have more literation stay tuned here. you're watching "squawk box.

good morning travel night player. thousands of flights canceled over the weekend experts say more chaos to come good news on the retail front. we'll tell you what it means for some of the major symptoms in that sector. plus the s&p 500 closed at a record, which means it's set to open at a record high, if we maintain the gains bitcoin in and out back above 51,000 final hour of "squawk box" begins right now. good morning, everybody.

welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen we've been watching the u.s. equity futures this monday morning, so far things have been in the green the dow futures indicated by up to close to 65 points. the nasdaq was the big winner last week. this morning it's continues to build on those gains, up another 67 points. the s&p, which closed at a record level last week is now indicated up by about 14 points. that was the 68th record of the year, the most we've seen since 1985 still, the treasury market barely budging at 1.493%, almost there, joe. >> yep. >> new this morning, didi has barred current and former

employees and current employees to buys the stock. it's lost value since the offering in new york didi now plans to delist from the u.s. exchange and pursue a listing in hong kong that doesn't seem right. you can't just cancel the end of a lockup period. that's worse than the cruise ship stories, well, now -- >> down that much and, what, you can't even sell? after three straight days of mass cancellations, just more than 1500 flights canceled yesterday. multiply that about i a lot of people, and you have lot of

unhappy travelers. more than 6,000 were delayed, according to flightaware according to can lace are already topping 760. that number has jumped by 100 in the last two hours you know what? driving sounded pretty good. >> you can control your destiny when you drive. >> and you can stop at stuckey's. think about that [ laughter ] >> oh, the double bonus. let's get you ready for the final trading week mike, we've talked about the santa claus rally, potentially being here this week so far, so good. we do have agree arrows this week. >> we obvious mention how the path of least resistance -- today, this week, that's pretty much usually the story, there's

just not a lot of pent-up selling. yes, the santa claus really period, formally speaking, does start today and last through the first two days of the new years. i think it's most useful as a green or yellow indicator. it should be up three quartz of all years, especially when the overall market has been up for a full your. if it doesn't go up, that's sometimes a bit of a yellow light. i do think it's worth kind of stepping back and saying just how strong the market hark three years, on a three-year basis, s&p total return is almost 28% annualized, so its understandable people are saying, maybe we have to lower or expectations a bit. people congregate around a much more sober projection out there, as we see the fed starting to move one final point, microsoft and alphabet, phenomenal returns

you wouldn't actually say anything tee decisive happened microsoft up 50% this year, alphabet up 60%, and that's almost one fifth of the net market cap gain in the s&p 500 if you believe quality stocks will be the way to migrate towards, you have to wonder if those two quality stocks have already come a long way already. so a few things to think about >> mike, i forget the exact statistic, but something like five stocks maybe have made up x percentage of the gains? we were talking about how thin the breadth has gotten at this point. i know tesla and apple are two more when you have like that narrow breadth, what does that tell us? what does that usual ly po?

>> there's beened huge companies adding on passive amounts of market value, but it's not as if only a few stocks have been going up so it's sort of just the size effect of the megacaps make it seem narrower than possible, but to your point, it gets to this idea we've had an internal correction in this market. most stocks have suffered pretty significantly in the last few months so keep in mind, there's been a lot of push/pull underneath the surface, even though if you put up a three-year that is right, you have a crash in early 2020, belowed surface there's been more wear and tear as people try to figure out if the macro kind

of tailwinds are turning toward headwinds. mike, thank you. great to see you let's look at big tech, as we near the new year it's coming fast and furious gene muenster, founder and managing partner at loup, the s&p closed at a high there's not a day that goes by where we hear it's being led by smaller of the darling that you love things usually don't grow to the sky. >> i'm with you, joe don't thing we should expect that i think investors in big tech should enter 2022 with a healthy dose of caution.

on the consensus side, we noticed rates will go up the fed rate is expected between 2% and 2.5%. the math behind that is, as interest rates go up, it has a negative impact on discounted cash flow. the sensitivity to those increased rates is straightforward. every 1% increase in the fed fund rate have a negative rate of 10% to 20% of valuation, depending on the company usually there's a correction ahead of that. we have not seen that correction in big tech yet. part of the reason is investors in these big tech companies are expecting the 2022 will be a blockbuster year with up side of 10% to 20%, powered in part by inflation. the math would week upside to

earnings offsets the impact to the multiple i'm more in the camp of brace yourself in big tech for the first at least months of the year there's certain companies that will outperform, continue to do well that could be a $250 companies in the next few years, but i think other big tech will see atrophy in part because of the simple valuations are just high. to frame that in quickly, if you look at amazon, netflix, nvidia, tesla and rivian, they're trading at 140 times next 12 months revenue as compared to apple, facebook and google to put it all together, joe, i think there's a correction and i think the next fed meeting could be a catalyst for that correction >> i don't think you've been in that camp recently, gene. >> it is a change, yeah.

i want to anchor back to, i believe in these companies i believe these will ultimately go higher. what i am rooting this view in is just a simple belief that the increase in earnings will not offset what is a historical drawlback. if history repeats itself, i think many of the big-tech investors should brace themselves i think companies like apple are in a good place. i'm just fast-forwarding to the tend of january as we pants pate the next fund. the fed has tools at its hand. i think there would be some concern from tech investors arch what change could happen the 25th and 26th of january i've seen people can oil and recommend the suppliers, whether it's chips, equipment, whatever it takes to build these next

generation ideas that we're talking about, you can buy all of them. software, there's all these players, chip makers do we have to seem these major trends -- do i have to believe in the metaverse that my life will be dictated by the metaverse? i would almost real go for self-driving or, i don't know, what can you garcht tee some what will be there five years from now that unequivocally we're going to build out, gene >> the majority of this conversation has been about the next three months. it's important, as you said, what are the next five years >> two things. the metaverse will have fits and starts in terms of enthusiasm, but i think it will capture the majority of our time in the

future separate ly autonomy. humans shouldn't drive don't get me started so which areas can you sleep well at night owning in the long term? i think the picks and shovels, companies like apple that are doing the devices will do really well over the next five years. that's unstoppable what we need to do is have more sober thinking around what the impacts of rates are in the near term again, still a big believer in big tech, but i think just a better understanding of how the discounted cash flow fits in with interest rates. let's go back to financial 101 here >> you're right, gene, people can't drive. but we don't knee fully autonomous it's just get out of the left lane get out of the left lane

wouldn't that be easy? >> you would think it be easy. i'm sure regulators would find a way to stand in that. >> how do they bring that up so fast no one knew i was going to do that just move over why are you going just 50? it's not just optional right lane/left lane it's the high-speed lane, gene. >> i would just -- the good news is there's still drivers out there that -- >> i don't need a metaverse. okay thank you. >> thank you, joe. >> thank you, gene becky, liesman says he never knows what's going on happen gene has the same look on his face. >> the producers knew what was going to happen. >> they can follow me. >> they spend a lot of time with

you. how did you like that coming up behind you get out of my way! >> move! the years have mellowed you. the pandemic disrupted the u.s./china deal that was signed in early 2020. we'll tell but one major company ats paying the price "squawk box" will be right back.

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under the deal, china pledged to open up any markets across several industriesened buy hundreds of billions in new u.s. goods one company in particular stood to benefit for boeing, those deliverables have not panned out. this is a runway to nowhere. dozens of planes, tens of billions of dollars, all ordered by decline ease carriers, now in a holding pattern.

grant county international airport in moses lake, washington, is just one so-called bone-yard where boeing is keep these jets rely activity washington washington. china agreed its domestic carriers would buy aircraft and parts in 2020 and 2021 so far, it's done just $8.6 billion, according to economists one major reasons, its airline regulator has kept the 737-max grounded, the last holdout after a series of fatal crashes. >> 40% is being held back, because china hasn't certified the aircraft. >> reporter: annual lists say it gets paid in roughly three stages, on order, when it's being proud, and jersey upon delivery

the deal sets those purchase targets for two years. we asked president biden's top trade official whether they could close that gap is it possible that china could buy a -- >> we won't know it's possible until we start talking. >> analysts say there's just too much ground to make up i think you could height billions of dollars of aircraft and hundreds of units just sitting there. i don't think there's a creative way of reaching the baseline deal. >> china's aviation regulators earlier this month issued a directive that could pave the way to return to the skies there, and boeing has suggested sales could resume early next year a senior administration tells me china's conversations are still ong ongoing. becky? >> kayla, if you had to put your

finger on it, would you say this is a situation of bad blood between the two countries? or a situation where this is travel related and china's got hit hard, so they don't want to pay up in an area they're not really using right now, which is air travel >> i think there's a lot of external forces here the slowdown in travel is one of them the issue surrounding the safety of the 737-max are certainly another issue, but for the administration they're in between a rock and hard place. on one hand there are numbers like they that very clearly don't add up when you talk to officials behind of scenes they cease what is a better vehicle than this deal there's a sense this is the mechanism by which they should try to keep it intact if possible and perhaps early next

year we'll get signs whether the planes can be delivered. right, let's bring in a former obama administration defense department appointee, nowlongview global managing director ---or and cnbc contributor. would you call this a success or failure in terms of what we have seen to this point >> good morning, becky thanks for having me i think you have to look at this deal in two parts. from a political perspective, we have to remember this deal came into force at a time when the trade war was raging a tit for tat, and this deal did put a floor underneath that slide. that held for a while. on the political level, becky, i think it was a good deal it does what was it was designed

to do. economically not so much i mean the $200 billion in purchases was really never going to be achieved by china. this was even before the pandemic so the pandemic in some ways gave china as out here, but i think, as we heard in the previous report, the real question is, what happens next this deal was largely about purchase agreements primarily. it did not address any of the underlying structural issues in the economic relationship, becky. the need for greater intellectual protection, the need to ensure that companies get a fair shake, and that there's not so many subs decides going and the non- -- i suspect what the biden administration will do will tro to use this deal the fact that china has done so poorly in achieves it, to leverage the conversation in the next round in the hope to get

the things that was not in the phase one deal i'm note optimistic the chinese economy is even more state-led than it was before this deal i think it will be a tough road ahead, becky >> if the phase one was unrealistic, you want it at the beginning, phase one was unrealistic, what is the point of creating a second unrealistic goal are we just patching things over, presending we'll keep things nice and steady in the relation twos the countries? >> that's a good question. in fact, what we're likely to see is that the chinese won't really budge at all, but what the biden administration will do with that intransigence is say to like-minded countries, we've been talking, we've been trying, so we need to try to work

together to pressure china also to justify some of our turn towards policies as we compete against china. i think they will try, but i don't think we will get very far. >> you think relations will get worse from this point, that it's inevitable i think they will certain remain fairly consistent. i don't want to say worse. i hope it doesn't get worse, but i don't see it getting better. >> dewardrick, great to see you >> you as well. we're going to dig through the numbers, next. stay with us

holiday sales surging

despite supply-chain issues. courtney reagan has the official numbers on what we have seen so far. hey, court. >>ee, to 21 holiday season was really strong to retailers with total up 8.5% since last year so extending the holiday period extend earlier many shopper took advantage of the early deals to make sure gifts were bought in time shoppers returned to stores and kept online habits as well online sales made up almost 21% of total retail sales, up from

20.6%, appeared 14.6% in 2019. apparel sales growing an impressive 47-plus percent followed by jewelry up 32% department stores gains more than 21%, and the always popular electronics saw increase the season isn't necessarily over remember, this is a big week for retailers to entice shoppers to make exchanges instead of returns and for consumers to cash in the gift cards and take advantage of the discounts that always happen during this week and christmas. becky? >> which we hope will happen this year. what popped out to mountain the most there was the increase in e-commerce sales >> 11%. >> that's shocking when you consider so many of the stores were closed last year. the only way you were going to get it is if you bought online i heard numbers earlier in the

season that the e-commerce numbers were not up maybe double digit. not only do people shop online again, but they like it, maybe they're here to stay. >> absolutely, becky when you look at that number over two years, so 2021 online sales increased from 2019, according to mastercard, i think it was upwards of 61%. >> wow. >> so we're doing even thor than last year. it was pre-vaccine, a number of stores reopened, but a lot of us were not comfortable going out in public. those online numbers are shocking i'm interested, too, 21% of all sales are made online, at least during the holiday season. so a five percentage pointing in in gist two years is actually striking. >> court, thanks good to see you. >> thank you

when we come back, former senators judd gregg and heidi heitkamp will give us their playbook in 2022, what to expect in politics. right now, though, as we head to a break. here's the stay-at-home symptoms (swords clashing) "squawk box" will be right back. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

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the economic outlook is changing quickly st steve liesman join us. >> forecasters are changing their outlook almost as fast as the news is coming in. they sent us the estimates warning, hold on, there could be more changes to come here where we are now. it's been marked down somewhat to disappointing third quarter remember, it was depressed by the delta outbreak it great a outbreak, the first quarter is taken some hits they're pushing growth into the second quarter and beyond. adam murkowski writes -- spending is likely to slow further in december.

however, the weakness is likely to be temporary. here's an example. fish canceled four shows to new year's eve, but they moved it to the second quarter economic losses, however, from holiday flight cancellations, they're more likely to be perm ineptly lost here's a result also people could use the money they were going to spend on services to buy more goods. that could boost inflation already high in the goods sector seen peaking this quarter and only gradually coming down the next several quarters, by to 23 is where the fed nears the target all of this is subject to change, at forecasters try to figure out how much this outbreak delays, cancels, shift spending overall economic

activity, but another factor is how much some americans in certain regions treat this as a new, but regular modd el in the forecast. >> most economists see it as not having a huge impact other than moving it from one quarter to the next >> right, you move it into that quarter. by the way, take this concert example, which is complicated by the fact if the knicks make the playoffs, there's some problem with it, but in any event, that's a concert that couldn't take place. >> i think covid is more likely to screw things up than the knicks making the playoffs, right? >> that's true the point is those were dates

where economic activity would not happened you hoff it from third quarter to that quarter, you shave off some of the stuff like they flight cancellations, you are going to see grandma and grandpa, our your uncles and aunts for christmas, because it didn't happen for christmas, you're not going to do it again, so that's lost permanently meanwhile, what do you do with that money the stay at home and may order some stuff online, you might save it. there's another aspect of it it's all a big mess here trying to figure out the forecast, but you're right, only bringing it down a little bit no now still seeing above-trend growth over the next couple quarters. >> in other words, who the heck knows. thankses steve let's bring in guests for reaction joining us former u.s. senator heidi heitkamp

former senator judd grelg, also a former governor of new hampshire. senator heitkamp, what are you forecasting split dale and economically for the new year? will there be a -- are you optimistic and hopeful for a smaller verse of build back better >> i think they'll get something done on build back better. i think it will be paid for. i think it will take out some of the arguments that republicans have had what i think is interesting, and you look at the macro numbers, great retail sales donald trump had less than 1% growth over four years we're seeing what's on trend for two years to have higher than the last eight presidents' economic growth, yet the consumer does not feel confident.

what i would suggest to the biden administration is the one number they need to pay attention to is consumer sentiment. they need to get that number up. it's in the low 70s. if you look at michigan, so that's the number that tells what you the people feel about the economy, even though they're spending at a higher rate than the last three, four years >> senator gregg, i love heidi, do you -- how do you remember before the pandemic, how do you remember the trump economy did that feel like a 1% economy to you at that point, senator gregg, just having the narrative, just saying it like that does that make it factual? >> it would be nice if family would stoptalking about trump, and talking about where we're going, but if you're going to talk about trump, you ought to be accurate about it

the economy grew exponential as a part of policy i will agree with heidi on this. there would be another build back america bill. it will have to be less, but hopefully scored correctly you have to give senator martialing credit, he deed manded accurate scores it was a $4 to $5 trillion bill, and it wasn't paidfor. all of that goes on our kids' debt you just can't do that to an economy. you can't load it down with that type of spending, which you unpaid for, and expect to have economic growth. you will have just the opposite, in fact. listen, if they do another bill, let's store it correctly

i think the american people deserve integrity on some of these bills. so, senator, i don't know how to characterize it -- i think we lost senator heitkamp, we're trying to get her back -- but we had senator warren on, and jon tester, even -- they all knew, right? >> of course. >> is it is it skinned of see no evil -- they wanted these things for a long time. obviously we do want to help lift up as many people as we can. people have a different argument for how you accomplish that. republicans think one ways, democrats think another. i know some democrats, they are sincere, this may be a way of trying to share some of the great progress that one part of the people -- so maybe in their

minds they think this is the way to go about it, but they knew fell well tiffs gimmicks, and trickery, and only one guy did it what is that is that a -- what would you call that >> deception the simple fact is there were seven to eight new or expansive entitlement programs have you lived. they would sunset things, knowing full well what they wanted was the policy. it would become so attractive that they would have to redo the policy and renew it. so the bill was a $4 to $5 trillion bill. you have to admire senator

martialing for standing up and saying let's be honest and then bette midler calling him out as an illiterate. the left has gotten really out of control in its attempt to deceive america on where they're going. they're trying to take america down the road of france. >> it was his constituents that were illiterate and strung out so, senator heitkamp, when you were gone, you even alluded to it, maybe it will be without all the gimmicks and stuff why do you think so many peers were okay with that, were okay with selling it on the cbo score, which is gigo, garben in/garbage out why were you okay with that? >> i think it's interesting how

you rewrite history. when you look at trump's gdp growth, it didn't get to 2%, even if you took the pandemic out. he promised us 4%, it didn't happen he also promised a tax bill that would be paid for. i think there's an attitude what's sauce for the goose is sauce for the gander they played politics on tax cuts, and there's no one basically saying let's look at real numbers, let's be honest and take a look at the investments. i think that everybody is giving everybody permission to do this, because it's happened so often off the last, you know, ten years. fiscal discipline is not something that either party respects anymore i think the numbers -- you heard me say, i think you have to look at real numbers. you have to tell people what they're spending you have to look at whether this endangers the fiscal condition of the country, but you also

have to understand over the four years of donald trump, you heard a lot about monetary theory, an as long as we don't collapse the economy, we can run -- >> people won't disagree about the bag orange man, but you're impugning all policies there you had record low unemployment across the board for minorities. for other people you said wage gains we haven't seen in tense year what you're giving is a fake narrative based on ushering the pandemic in, and all the numbers for the four years are skewed. >> joe, we'll have to have a debate on -- if you look at the promises -- >> there's some good things happen policywise. right now, if you think the american people like the policy direction we're being taken by the biden administration, you're

not reading the poll numbers, heidi. >> what i'm saying is when you look at the make rho numbers, unemployment coming down at a record rate from the pandemic -- we're covering in the pandemic. >> the pandemic happened on his watch. now he's experiencing -- biden is experiencing the results of omicron. so, if we're going to take the pandemic out of the economic numbers, let's do it fairly on both sides, but we've got a recovery we have to figure out how to get people defend again about the economy. when you have retail sales at christmas at record rates, doesn't that tell you there's some confidence coming back? >> judd, we have to go do you have a final word >> i think your discussion has been fairly accurate, and i great with you, joe. >> all right

we agree to disagree thank you both, senator heitkamp, former senator judd gregg. beck bitcoin icpres climbing up we'll talk crypto right after the break.

the price of bitcoin topping 51,000 this morning. let's bring in anthony

pompiliano you're a hard-core -- stacker? potler on steroids, right? >> i think bitcoin has a very important part of the future of society. you could say that o okay you might be right it's pretty amazing, but there are big swings, intra-year during the year we can be up 70% do people that love it want it to keep being that volatile, because they make they huge gains last year? i don't know what people made, 60% or something would it be better if we got institutionsal-type stability

where it starts being mob transactional and we start using it -- to actually use as currency, for example? >> a couple things volatility is not good or bad. it's only bad when it goes against you. so that's point number one bitcoin in u.s. dollar terms has been very volatile in the last two years two separate 50%-plus drawdowns. but the key peep is that's measured in dollars. if you think the the dollar, it's hyper-volatile as well. we don't think of it 40% of dollars in circulation have been printed in the last 18 to 24 months >> i think that's a key

differentiator between the bitcoin community and people who still think in terms of dollars, what is the denomination i denominate my entire life. when i think of how much bitcoin am i spenting. >> dysthe article, at then that global chain is here to say, but that bit coin is sort of the beginning of the usage of blockchain and there will be a coin that uses much less energy that's very similar to bitcoin that will replace it down the road did you see that article >> i have. i think the energy argument is interesting. the first is that there's a linear relationship between energy consumption and the u.s. dollar system. in order to support more users and more transactions, we need

to consume more energy the layer doesn't have that sayers linear relatesships there is the same energy consumption whereas in a legacy system, as you scale, you need to consume more energy that's first of all. secondly, we shouldn't apologize for the use of energy. important things in the world use energy when you ultimately look at bitcoin specifically, a large percentage of the mix is renewable energy, it's driving all sorts of r&d in the renewable space. if you want to protect your purchasing power, that is the key to bit coin, in a world of undisciplined monetary policy, you have a decentralized network of computers around the world defending it for you that's why i sue people who have

choent to use that. we're appointed here a bit we don't have turkish lira or something. >> yeah. >> and over there you may think, wow, i have some bitcoin. crypto night in america, wednesday night. "squawk box" will be right back.

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futures are higher this morning, let's talk markets with serat seth ir. also a cnbc contributors, and earlier this hour, we are talking with mike santoli about the law of big numbers, and should you be concerned there are so few companies making up such a big portion of the indexes now. you forwarded along a "wall street journal" article that set, yeah, you should be concerned. what is your your thoughts >> becky, i think what we have seen the last few years is investors went to the high quality companies, whether it was stay-at-home or the large tech valuations come back to the

mean if you look at the largest ten stocks in the s&p, they're trading at a 40% to the market we believe there's other opportunities. just because you don't have good, you know, good stocks to own, i think you've gotten into the indexing also, that more money comes after these stocks not to say these are bad companies. we own a lot of these companies, just not in the size that the endix makes now, because there's more risk than we've had in a long time. >> i think that's what jumped out me, ten stocks in the s&p 500 make up more than 30% of the value of the overall index the reason you buy the ingex is you're not trapped into a few companies, you want to spread out the risks, so if any have a spectacular blowup, you don't

take a huge hit on that. that seems like an almost impossible things to get at. >> that's where the risk mitigation will be really important. if you fall in love with the index, you have a hand 68 of companies, and they keep on going up, and valuations will matter once interest rates go up it will matters once the capital markets, and it would matter when we see valuations of other companies, whether in health care, functions, others at 20%, 30%, growing just as fast, if not faster >> i've got 20 seconds tell me one stock you like outside of those biggies >> i like morgan stanley, double digits, they just bought back a whole bunch of shares, 60% wealth management. different yield 3% in an area with secular growth.

it is under-appreciated and unloved. >> serat, happy new year. >> you too. i'll see you he joe, in the not -too-distant future. >> happy new year. see you later. bye, everybody now it's time for "squawk on the street." good monday morning, welcome to "squawk on the street." oil jim cramer and david faber have the morning off we're coming off the s&p record close on thursday, the 68th record close the 2021. our road map begins with airline stocks flying lower, with the surge of covid cases leading to thousands of cancellations. >> plus another rough day with chinese tech stocks.