time she faces it is tuesday, january 4, 2022 and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with andrew ross sorkin and mike san tolli. joe is off this morning. the dow and s&p 500 marked record highs on the first day of the trading year for 2022. the dow was up by 246 points and the s&p was up by .6%. it was the nasdaq, though, that was the relative outperformer. it was up by 1.2% thanks to a positive session from meta platforms, amazon and alphabet all of the stocks moving higher. and the nasdaq the outperformer for the first trading day of the year it was the treasury markets that

were the outperformer -- let's look at what's happening this morning with fair value. dow futures indicated up 109 points this morning. s&p futures indicated up by 14 and the nasdaq indicated up by 43 as i mentioned it was the treasury market that a lot of people were really watching closely because there was some big movement here. the ten year this morning now yielding 1.635%. it was a rapid move higher for yields, lower for prices mike, i don't know what happened, what sparked that, but two things, treasury making the huge move and watching what we are seeing the first trading day of the year and green arrows this morning so maybe the indicators lining up to see what kind of month and year we'll see. >> yeah, i think there was relaxation, but certainly year end effects that probably were keeping a lid on yields a little bit, whether it's banks have to buy treasuries whether they want it or not for december 31st and

rebalancing out of equities into bonds. just mechanical stuff that seemed like it lifted yesterday. but in general, a strain in the market yesterdays suggesting that people were willing to look through this intense omicron surge feeling as if we're not in for a prolonged stretch of it. this has a lot to do with it, apple and tesla huge movers within the s&p 500 we're still watching what's happening with apple yesterday it became the first company to hit a trillion dollar market cap before closing just short of that mark they finished the year at 182.01 about 85 cents shy of the milestone, as best we can estimate it. apple hit the $1 trillion mark in april of 2018, hit 2 trillion in august of 2020. we never know it's an abstraction we never know how many shares there are, they're buying shares most every day

but it's ballpark where it is. as interesting as this market cap level, the fact that it's just about 7% of the s&p 500 is worth keeping in mind, too because that's another gauge of size relatively. >> i mean, if you're afraid of heights, something where you're looking at this right now and thinking what next although i have to say, mike, i'm still laughing right now you're talking about banks having to buy treasuries weather they want to or not, and i remember kevin bacon, remember, thank you, sir, may i have another? >> there has to be a place to put cash, the system has reserves overflowing and there's always these kind of regulatory and balance sheet management things going. i'm not saying that's all that was going on but it seems very con pick yous that in the calendar year a clean slate that all of a sudden people start selling bonds pretty hard.

let's talk about the other news just out this morning the u.s. reported more than a million new covid cases yesterday. set a record for the highest daily total infections, the highest numbers were maryland, delaware, alabama, new jersey and ohio so we have to keep our eyes on these numbers. of course, it doesn't look like we're going to be having any official shutdowns of any sort but clearly some people are shutting themselves down, as are businesses, at least changing some of how they're going about things meanwhile, it's been the drama, the soap opera that we've all been watching now for months and it's come to a close theranos founder elizabeth holmes has been found guilty of four charges in a criminal fraud trial, found guilty of one count of conspiracy to commit wire fraud and three counts of wire fraud against specific

investors. holmes will be sentenced at a later date but faces up to 20 years in prison. holmes was found not guilty on four charges and the jury was deadlocked on the other three, resulting in a mistrial on those counts we'll take you live to the courthouse in the 8:00 hour, guys but lots of action op twitter and elsewhere of folks trying to sort of make sense of the decision 20 years in prison, fair, unfair you can make a great argument -- >> i heard somebody saying this morning it could be 60 years somebody brian sullivan was interviewing earlier. >> i've seen people make an argument based on the four counts you can have concurrent sentences so you can go up to 80 years, in fact but with whether they would sentence her like that i'm not sure does this create a deterrent effect unfortunately, and peoplehave made this comment before, there is lots of people who have made

fraudulent claims, i'm not sure they made fraudulent claims the way she made fraudulent claims but would a decision like this have a deterrence, would people in the valley, in business say look at that, oh my goodness, she went to prison for 20 years, 80 years, whatever number you think that is. i have to be more careful than i ever was >> you would hope that would have a deterrent effect. >> you would hope. but we have not seen these type of cases since early i remember covering so many of them, whether it was the dennis, tyco, adele fee ya, enron bankruptcy case and the related individuals. then there was the martha stewart case and then we didn't see so many of these white collar criminal cases be brought. in fact, there was so much blow back that cases weren't brought after the financial crisis

because people felt the crisis unto itself was a crime and those at the top of the banks were responsible for that and should have been prosecuted. i'm not arguing they should or shouldn't have -- >> these are cases that are hard to win i think the verdict you saw yesterday lays that out. i have to say, i thought, if you break it down, it was the cases of fraud committed against the patients who were using the testing, that's where they found her not guilty i thought those were the more important crimes schcommitted potentially, those are the ones that mattered the most you feel bad for the investors but these were well healed investors and it was the patients relying on the testing they shouldn't have been i've heard people saying it would have been tough to prove those cases and maybe that's what happened here yeah, i can't imagine this doesn't have a chilling effect >> scott cohn i think can speak to this better than anybody.

i was trying to follow the case as close as you could from afar. the fraud case against investors was a strong case. it was, you could see the documents, what she was saying to investors to raise the money and what, in fact, was happening. what they were saying to the customer in terms of the product they were receiving on the other end was a very sort of different offering and so, i don't want to say it wasn't surprising -- >> no. it just seems the more egregious issue when you're playing with somebody's health. i know there wasn't as much of a paper trail, harder to prove, obviously that's how things played out when looking at this from an outside observer the things that bothered me more was playing with people's health than people's money. >> i'm not going to defend her, but they were running the test on their own systems and then separately running them on other systems that actually worked that was one of the distinctions -- >> sometimes.

>> -- in why you saw the jury come back with the ruling they did, in part because there was not clear evidence that the tests themselves were coming back with -- regularly coming back with inaccurate results they were coming back with results just not for their own machines. >> tougher to prove intent in the paper trail that there was a plan set out to try and deceive or defraud patients. that probably is also the tougher one. i think it's -- you know, sometimes when you see a jury that clearly considered each charge on its merits and true distinctions, that's often interesting, too, they clearly got deep on the details of it. and, you know, andrew, to your point, it's tough to get away from the idea that the sheer amount of attention and publicity that elizabeth holmes got on the way up has a lot to do with why this was, you know, something that prosecutors wanted to go after that's also what fed the fund-raising

so it's all together. >> and back to your original point whether this has a chilling effect. the idea they came back and found them guilty of fraud to investors not patients should have a chilling effect. you can't say this is different because they were dealing with patients and not just investors like we are. so we'll continue to talk more about this. >> this happened for a long time in the private market. you can make some arguments even in potentially the spac market has been looser in many ways than the traditional public market has been. i am sure if you were to go look at presentations or draft presentations that were put together for the public and some of the things and numbers that were provided internally and how they were laid out, you would be surprised. so it's an interesting one, and i wonder whether it changes any of the culture. >> i think it should, if people are paying attention and i think it probably will have that impact, people go back and look and say will i get in

trouble for what i'm claiming and saying here? is it no longer fake it till you make it? is it more of a you better tell the truth, the whole truth and nothing but the truth. >> all along, silicone valley and people deep in the industry have been saying it wasn't the big funds in theranos, it was people from the outside throwing money in people who are prominent and had money. andrew, it reminds me of when madoff went down yes, there were sfophisticated people he took down. people who were in the industry were like, no, this was not. this was an outlier and we set him aside for a long time. >> i think andrew is right when you point to the spacs. >> absolutely. that's a buyer beware thing we're putting five year projections out there, you bought the sto stock, read the

disclosures. it's wild but that's in effect right now. >> we are speaking to scott cohn later this morning he's been following the case closely at&t and verizon have agreed to delay their rollout of a new 5g service for two weeks, reversing their course after previously declining a request by the u.s. transportation officials. the company said they already pushed back the use of the new wireless band by a month and will delay it to i a low regulators to look into safety issues sources tell "the washington journal" that yesterday the faa was preparing to impose flight restrictions that would have disrupted air travel and cargo shipments around the country but they backed off when the wireless companies delayed the launch i don't know what two weeks buys you, how you fix the system in two weeks, alleviate all of those concerns or if we'll be back in the same position 14

days from now. >> i could be wrong about this, i'm of the view and spoke to people inside the telephone companies about this their view is they are going to persuade or it's going to become clear, if it isn't already clear, to the faa that this is not an issue if you go and read through the technical materials, there's very little, it appears at the moment, scientific evidence that this is going to actually impact the altimeters, which is what the argument is. the d.o.t. even has looked at some of the altimeter issues so i think part of what this two weeks is buying them is more of an opportunity to show some of the evidence, some some scientific data. again, i'm not a scientist, i don't know how it works. but you can read through the literature and it seems like the telephone companies may be on the right side of this >> it's still crazy, though, just thinking this is happening this late into it when the fcc

sold those licenses, at&t and verizon spend i think $65 billion, they've been working on this for years. and to still be raising questions like this this late in the game and have different government agencies on different side of the debate, yeah it's a mess. >> let's hope they sort it out for sure coming up, meantime. apple's rise to $3 trillion market cap, what's next for the company after the break. check out shares of tesla, stock rose higher 13% yesterday after fourth quarter delivery numbers beat analyst estimates the stock adding a little bit up about .5% at the $1,200 mark we'll be right back.

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apple's market cap briefly hitting the $3 trillion mark yesterday afternoon. it took the company about 17 months to make the leap from 2 trillion to $3 trillion. joining us to talk more is silvia jablonski good to see you this morning a few ways to get your arms around the size of this. i mentioned earlier it's 7% of the s&p 500 just about, so obviously the market cap up 50% in 17 months others have been up more, microsoft probably up more over

that period. but what does it tell you as an investor whether you want to allocate towards something that's gotten that big, has that much momentum, or do you want to say this is a culmination of a move and maybe time to calm down. >> i love apple and it's been one of my favorite stocks over the last couple of decades i think what apple has in its favor is the company continues to innovate. every time we say the multiples are too high and they overvalue, they come out with something new. now talking about the augmented headsets planning to come out, a big player in the metaverse. and they had massive growth, 25% year over year in services, 20% in wearables towards the end of the year they have loads of cash on the balance sheet. i just love the stock and it's one of those names i continue to allocate to. the gdp of spain and portugal

combined multiplied by two is now the market cap of apple. they're innovating and it's currently paying off >> you mentioned it's a favorite and you would continue to allocate to it it looks to me at your firm, in your etfs, you focus on more n niche disruptive companies would apple have a big position in your etfs. >> apple could potentially fit into them if they fall into the mix. so if they heavy investments in the metaverse and augmented reality, they could potentially be a candidate for an etf. we look at things like quantum computing, hydrogen, nfts. and apple is part of that ecosystem. >> to get to your favorites here, in terms of plays on that theme as well.

nvidia worth asking the question as how it's gotten to accrue the market cap it has but you think it's worth new money here? >> this is another one i think there are a few stocks that stand out in terms of they have high multiples, look overvalued but they keep innovating so keep going with them i wouldn't be surprised if nvidia is the first billion dollar semiconductor company they're part of artificial intelligence, 5g, the fourth industrial revolution. and the company has done extremely well they've had 50% revenue growth year over year, every quarter they beat earnings, beat on top and bottom lines and i think about the future it's ev, the metaverse, it's going to be quantum computing and names like nvidia and apple are players in those spaces so you want to have some exposure there. >> weigh in on plug power.

this is a wild story for many years. a boom/bust thing and gets people excited about alternate energy. >> plug power has had a sad story over the last year, massive returns and last year, down 60% but this is a macro theme for me i think about the future and in terms of alternative energy and commodities perhaps the noncorrelated trade to what we were just talking about in tech is going to be things like hyd hydrogen, so plug power provides hydrogen solutions for stationary and mobile applications they help power cranes and different trucks and forklifts in the bare warehouses of amazo nike things like that. so if we're going carbon neutral by 2050 and there's a huge investment in getting there, hydrogen is the most abundant

element in the universe and plug power can harvest that energy. so i think that's a name that plays out in the next decade. >> more abundant than lithium. thank you, silvia, appreciate the time this morning. what a difference a year makes, new york real estate prices jumping back to pre-pandemic levels. robert frank joins us next to talk about it. blackberry, shutting off ckrvices to their devices today. bey, are you ready for this? details right after this break

welcome back to "squawk box" this morning manhattan real estate sales are breaking records in 2021 and robert frank joins us with more on this massive rebound and if it will continue in 2022.

robert >> good morning, apartment and townhouse sales in manhattan hitting an all-time record of $30 billion last year, more than 16,000 contracts were signed that's also the highest ever what started a z a buyer's market a year ago is now a seller's market. 98% of apartments sold for their asking price or more last year prices jumping 11% in the fourth quarter. an average apartment will cost you 1.95 million so we're back to pre-pandemic levels the sales are being driven mainly by the top, especially penthouses and three to four bedroom apartments, inventory for new development falling by a third in the fourth quarter, the fastest decline in history bidding wars hit the highest levels since 2018. there were eight deals over $50 million, the most expensive was joe size $157 million

purchase of two floors at 220 central park south and jeff bezos buying up five apartments in a building in downtown. andrew. >> so the question is who are the buyers where are these buyers going to come from. there was a view, at least in new york, there were going to be foreign buyers come in, but that's not happening >> it's not the foreign buyers who really just returned to the market in november and december, and they're not buying much yet. i it's puzzling because new york city lost residents during the pandemic and only a third of the office workers are back. so who are the buyers? a lot of them are investors, people that do not live in new york, pay income taxes in new york but buying their second, third or fifth home in manhattan knowing that manhattan real

estate has been a stable investment, even through the pandemic and in the future there's been so much wealth creation during the pandemic, so much excess liquidity, so it's going into new york real estate. >> robert frank is anybody buying or changing their thinking about buying in new york city because of the new mayor, eric adams? i ask because if you remember under mayor de blasio there was speculation they may tax second homes, make it harder to travel in and out of the city and the like without paying taxes? >> i think, you know, the jury is still out on what kind of job eric adams is going to do. the biggest concern for real estate buyers in manhattan is safety, security, pre sum bli he's going to focus a lot on that but even absent a change in s.a.l.t. prior to the pandemic, the high end of real estate was

the weakest sector because of the s.a.l.t. tax and limit of deductions there doesn't appear to be a move in washington to change that so i don't know that politics or tax policy has a big impact right now. >> so interesting because we did hear the opposite literally probably 12, 18 months ago robert frank i'm sure we'll talk a lot more about this over the coming days and weeks. we have to send it over to becky, because this is a story that i know is dear to her heart and dear to her pocket, right? not anymore. no, not anymore. i haven't had a blackberry in so long but it is the end of an era. blackberry is actually discontinuing service for classic devices today. that means the phones will no long er function for data, phon calls, or 911 functionality. these phones were once a status

for celebrities and news anchors. they pivoted to security software that's the basis for why so many folks on wall street wanted to use these, and government too because it had tough encryption i found this this morning, it was upstairs i found it awhile ago. it's an old phone i'm shocked how muchsmaller the screen is. you know i wanted to hold onto this thing forever, i got addicted to it it's been a long time i switched to the iphone because it was better at connecting to the internet, giving you a big screen, being able to scroll through things and do things this thing was never going to do it makes sense -- is that me >> we have b-roll of you we have you, becky we have you on the screen here this is becky quick -- >> i think this is probably the same blackberry. that was so long ago >> it might have been. >> never wanted to let go of

this thing. >> back in the day. >> here we are >> are you going to keep it. >> i can't believe i found it. i'm going to keep it i don't have a charger so i don't know what's on it. but i have the feeling there's probably old photos and context and things i want to keep. i didn't throw it out. can't part with it. >> i got my first blackberry in 2000, back when it looked like a pager, do you remember that? like a little baby -- >> i do. >> and then it had just the black and white screen and all of that. >> it was back when e-mail was kind of the innovation, right? that was really the killer app for -- distinct from a regular cell phone, amazing to think back. >> or pager. and just thinking back it does take you back to how dominant this thing was and makes you question all the dominant tech companies that we see today. can they hold on can they continue to innovate? can they continue to stay on top? we'll see. when we come back, another

sale of an iconic music catalog. how much warner just paid for david bowie's songs. as we head to a fwbreak, les look at yesterday's s&p 500's winners and losers hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee and get the best deals on every smart phone.

good morning and welcome back to "squawk box" right here on cnbc. look at the futures this morning, because the dow looks like it's going to up higher about 117 points higher, nasdaq up 46 points, s&p 500 up a little over 15 points right now. starbucks is going to require employees to be fully vaccinated or test regularly. the company preparing to comply with the biden administration's covid requirements for private businesses employees have until this coming monday to disclose their vaccination status and until february 9th to become fully

vaccinated after that they have to submit negatives on a weekly basis, becky. >> starbucks pushing forward in the meantime, warner has bought the music publishing right to david bowie's catalog from the singer's estate a source told "the washington journal" it was worth $250 million last month you may remember bruce springsteen sold the rights to his music for more than $500 million, and have a lot of people wondering $250 million sounds like a lot but david bowie might be worth even more. when we come back, the impact of the covid surge on small businesses we'll get a data from paychecks right after this plus the fda expanding vaccine booster eligibility to include 12 to 15-year-olds we'll talk to dr. kavita patel for the latest a reminder you can watch or

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moment wherever you chose. it is jobs week in america, but before we get the government's december numbers we want to get a read on small business job growth. for that we turn to paychecks and ihs market, and joining us is marty, the chairman and ceo of paychecks marty, what's happening with small businesses we've kind of watched this incredibly closely to see what's happening. how are small businesses faring in a time when it seems like everybody is having a hard time finding workers? in. >> it continues in that same pace we had a nice seventh consecutive growth in jobs for businesses under 50. the biggest thing is probably the wage increase. we saw 4.27% wage increase over last year, the largest we've

seen since we started measuring this ten years ago the hourly rate over all is $30 per hour and leisure and hospitality wages up 11% so we haven't seen an impact on the variant on the job growth at this point at least at this stage >> when you say "this stage," how recently was this data collected? in this seems like something that's probably changing on a daily basis at this point? >> this was collected until the 25th of december so it's pretty late. but we really saw that surge probably in the middle of december to the end. so we may not have seen all of it but overall not seeing a big impact i think the biggest thing is going to be, you know, we're still under about 4 million jobs from prepandemic, a third of those are leisure and hospitality. leisure and hospitality growth is up 20% from a job perspective last year, wages on a weekly basis are up over 13%.

i think the jobs are going to come back stronger in this first quarter of the year. >> marty, when you talk about the wage growth, is that year over year or is there a way to measure it back to pre-pandemic? are these people making that much more than they were before the pandemic, too? >> yeah, really that's year over year but there wasn't that much change pre-pandemic last year at this point so we're seeing the over 4% pretty consistently now. and even a part-time worker is averaging about $19.72 an hour you know, think two years ago, the big argument was could we hit $15 minimum wage now we're seeing almost $20 an hour and that's excludeing bonuses. and you're seeing 60% are getting paid some sort of bonus when they're hired or on an annual basis >> how resilient do you think the wage gains are will they last or what do you know from as long as you've been

looking at the data, talking to the people >> it's hard to unwind wage growth i think it will last it may not last quite at this level because of the bonuses you see on top of this but i think it's going to last and i think the big thing when you talk about child tax credit, you talked about it before, now that that has stopped at least for now from a government stimulus perspective, that was having a big impact. you know "the wall street journal" yesterday an article over 30 million households were getting money from the child tax credit on a monthly basis. now that's gone away, that could have a big impact on driving people back to the workforce >> just in terms of these big bonuses handed out, the pay increases handed out, are businesses still having a lot of trouble trying to find enough bodies to fill the jobs they have open? >> they are. we're hearing it consistently. it doesn't matter really what kind of business you're in particularly front line, whether

they're receptions, waiters and waitresses, front line, all are having a difficult time finding people maybe it's because many of the things we've talked about over the months that we have a benefit of the tax credit that additional dollars if you have 3 to $600 per child per month coming in, it made people feel like they could get by without going back to work, particularly when they have covid health concerns and other child care issues and things like that. that may change now. >> marty thanks for your time. we always appreciate talking to you. i know this is something you'll be monitoring closely. we'll talk to you soon about it. >> fanatics is acquiring tops trading cards. terms of the deal haven't been made public but the deal is worth roughly $500 million according to industry sources. it excludes the candy and gift cards line it comes after fanatics captured

major league baseball rights last august. tops had held them for decades that scuttled top's plans to go public so the deal will allow fanatics to obtain the mlb trading rights immediately instead of waiting until 2025 when the tops deal ends it adds major league baseball, soccer leagues to what it holds including the nfl and nba. i don't know if this is going to hurt the value of a 1980 tops set that somebody has. >> i think it preserves it michael rubin is a stone cold killer the way he did this deal it was unbelievable he basically came in, right under the folks at tops before that spac, without them knowing after a relationship of what, decades and decades with major league baseball, somehow swoops

in, gets this deal with the commissioner, gives them equity, meaning the league and the players, in fanatics to get the transaction done and then, after undercutting effectively tops which no longer has the license, he goes over to tops and says, hey, you guys aren't worth what you used to be because you don't have the license anymore i'm going to try to buy you for a song it's pretty incredible -- >> making friends. >> -- and i'm sure there's a -- what did you say, becks? >> making friends quickly, i'm sure >>making friends, but i think making probably his investors very, very happy. >> smart business, but, yeah >> we will see what happens to that deal. but it's incredible to watch the dynamics play out within all of that >> and it's just the up ending of having money and being able to change those long-term relationships. it's what happened in television

remember when fox came in and started bidding on the long-term relationships that cbs had with the nfl and different things. it's when you have new money that comes in and shakes up relationships. >> michael has interesting ideas what he can do to the card business, not just reproducing what tops was doing prior. it's how cards are sold, nfts are part of it, create ago marketplace they control and run. this move is not new for him he's done this in the apparel business before, where basically he went in, yusurped the clothig and went back to the people who had the license saying you don't have the license i'll buy you for a song if you're within the sights of michael rubin, you should probably watch out it's incredible to behold. coming up when we return,

the ceo of clear joins us with data on how omicron has been impacting travel right here in the unit steedtas. we'll talk about that and so much more right after this break. you have to deal with higher expectations and you have to lower wait times. with ibm, you can do both. your business can unify apps and data across your clouds. so you can address supply chain issues in real time, before they impact your bottom line. predicting and managing operational issues that's why so many businesses work with ibm.

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next back on "squawk box." the travel nightmare does continue as the covid wreaks havoc. another 1,000 flights have been canceled karen becker, we're going to get to your exciting announcement in just a moment. i do want to talk about the travel and amid covid cases and your data is saying. has it slowed down a bit

>> happy new year, andrew. travelers were traveling this holiday season we saw very strong numbers in fact, our volumes were up versus 2019. what you are seeing is a change in travel pattern, so actually, people were traveling a week before those volumes were up significantly. the stays were longer. clearly omicron is starting to have an impact, not only on the demand side, but on the supply side if you can't have your team members show up for work, right, that's what's creating the snarl in travel. i think that will work its way out. look at the data from south africa the sharp up and sharp down from omicron. travelers are traveling. we continue to be extremely bullish in 2022 on travel. >> you have been a great beneficiary dare i say, people want to get through the airport quicker than ever, given what's happening? >> the experience and convenience and economy are

incredibly important so, yes, people want predictable connectionless frictional experiences, that's one of the things the peer brand is known for. >> by the way, you have a big announcement, what do you think of the airlines in all of this because there is a big debate, given the bailouts they were given and the responsibility that may or may not come with those bailouts which were specific to that industry. are you surprised at what's happening in terms of how many employees they have on tap obviously, a lot of people are going for covid. should they be better positioned than they are in >> i think when you have work forces, large swaths of your work forces, i think a million plus people, we're ahead of omicron yesterday, which means, are you out for five days. i don't know any industry that can withstand a large percentage of their work force being home for five days. these are fragile industries in transportation it's not just an airline

it's somebody at the ramp. ticket person, it's tsa. it's employees across the board. we're all connected. so trying to keep your work force safe, having these industries say opened is a very difficult challenge. i know the airlines are working very hard to serve their travellers and come out of this stronger >> and you have relationships with the airlines is worth saying, including investments from some. the other related question to that in terms of the responsibility the airline has or the airline community has, you know some ceos have pushed back on masking in certain case, pushback on using, testing, whether everybody should get tested on the plane and the like domestically what is your take given the opportunity it could present to a company like yours >> my case is safe and open. we cannot shut down again. we cannot find ourselves where we were a year ago i think you are seeing industries, including travel,

try to stay opened and stay safe, both from their team members and from their customers. i think it's a fine line i think we've achievedist post-9/11. i think if the public and private sector are working together i don't know you can have broad sweeping mandates in this country. i think you can find ways through masks and other ways, through vaccine, since we are big advocates of to keep people safe >> you have a deal you are announcing this morning. tell us about it >> yes we said from the very beginning, we're accepting the frictionless experience, in travel and beyond, we want to bring it to as many industries as possible and as many geographies. we are announcing a why line, the same way you make a reservation. it does it for you, in airports

and our geographic expansion our footprint in the u.s so we're experiencing to add our seam of seamless products and drive that frictionless experiences to many verdicts as possible. >> what does it mean to queue up virtually, i'd rather much do that than in person. >> starting here in orlando, why line is doing this in airports, there are long lines at banks and dmvs it means you make a reservation, an appointment when you show up at 10:20 and your appointment was 10:20, you walk right in. people want predictable frictionless experiences, that's both identity and also knowing when you are supposed to be some place, not wasting time. we like the whyline, that's what virtual queuing is >> karen, you will put a lot of

people out of business i remember people watching people hire people on the street oftentimes to wait in lines for them have you seen that i've never done it, myself i've seen it i am now feeling bad, will you have to keep them with this product. but -- >> we don't believe in lines we believe in frictionless experiences, heat lines. >> congratulations, we will follow your progress and look forward to you coming on back to give us your analysis of what's happening with the travel landscape as says this pandemic, unfortunately, continues a bit longer than we hoped blackstone's byron wien, he joins us for the 2022 edition, including record-high presic from one important commodity "squawk box" will be right back.

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futures are pointing to modest gains following record

closes for the dow and s&p 500 on first day of 20 two a day looking at markets straight ahead the fda expanding boosters to those between 12 and 15 years of age this as america sets a new sippingf-day record for covid cases. the latest of the rise in infections and the impact on the work force around where does the economy stand one year into joe biden's presidency new data and reactions straight ahead. the second hour of "squawk box" begins right now good morning, welcome to "squawk box" right here on cnbc, i'm andrew ross sorkin, along with becky quick joe is off we have a lot going on this morning. it looks like we will start the morning in the green the dow up 800 points, nasdaq

below 43 points, s&p 500 trading right now. if we opened at 15 points higher perhaps the big news in this trial we have been watching. theranos founder elizabeth holmes, she was found not guilty on four other counts and the jury was unable to to reach a verdict on three separate counts we will have a lot more on cnbc, all 15 weeks of it we have so many questions about it and the implication and then, of course, the sentencing, which depending on to him of the math could run between 20 or 80 years if not a lower number. but we'll talk about it and i am sure debate it as well. meanwhile, verizon and at&t delayed the 35g band carriers saying the deployment

would interfere with current electronics. they are keeping it from developing all the telecom industry has been experiencing apple has become the first to exceed $3 trillion before dipping back below that mark apple now up more than 40% since the beginning of 2021. it's tripled from its march 2020 pandemic lows. i don't know if you've seen, but there is some math that would show that am has been a better investment than bitcoin, depending on when you look at the calendar >> yeah, i was looking at berkshire hathaways investment i think they had a $34 price they paid in over all of that time so their investment has done pretty well, too >> it's done great it's a pretty big percentage of

birkshire's market cap he is not selling, apparently. >> nope. not that we know of, at least. the surge in omicron cases over the last month is having a direct impact on the nation's labor market it could put a damper on friday's employment report, too. steve leishman, the december numbers are going to be important, but it will probably measure before thing really kicked in with the highest levels of omicron, too >> well, actually, becky, it's funny you say that, because of the high frequency data, we can see it week by week, omicron creating challenges for the economy, for sure. it's showing up and could be seen in the official data as soon as this friday. i'll tell you why in a second. but unclear at this point. how deep or widespread are the effects? verbio counting more than 1300 schools closed nationwide, among other things that could reduce the availability of workers. the hr software company cease

job growth down 1.7% compared to the previous month i'll come back to that in a second airline traffic still off 15% compared to before the pandemic. ukg says the impact of the virus on jobs showed up actually in the first week of december they can measure week by week. it's continued each month. the foreign jobs could be a little too optimistic. you will see, though, it missed the last strength. it did not show up unfactor for the weeks ahead, school closures, their numbers are reyesing quickly the verbio matthew see here, shows they are focused in the northeast and mid-west local officials, what's happening now, they're trying to keep schools opened. so they're testing before they're closing. closures could spread with the virus when those tests come back positive for teachers and students short turndowns, doesn't startle

with workers with 12 million open jobs. airline passenger jobs, 15-to-20% now below the pre pandemic level amid widespread flight cancellations hey, it's not getting worse. even we seen a little improvement despite the flight cancellations in the past couple days we'll have to watch that little doubt omicron is a challenge to the economy the effects are showing up in the data already now the question is whether the economic symptoms end up ultimately being mild, like the variant seems to be, itself. so, becky, we can track this week by week remember we used to wait a month after the final month that passed to get information on the economy. we can do it week by week. in some cases day-by-day i'm looking at the j.p. morgan credit card spending that's trailed off as well we are definitely seeing an impact you have to lay in your view, how bad is this virus, ultimately how much does it loo ed to a decline in labor supply or hireing? >> we had marty mucci on

earlier. he was talking about small business numbers, what they are paying big pay hikes to do the jobs his point was with the child tax credits not being renewed, because build back better was never approved, maybe that means people will have to come back into the work force, whether they want to or not, if they're not getting three to $600 a month for kids >> that could be a factor as well but you know, here we are, a session, becky, i think you know more than others, the effect of these potential school closures. now, it's not huge right now look at the map again, it's northeast and mid-west sorry. >> i was going to say, i can't imagine school closings are anything like we had seen in the past just based on my own experience, what i've seen around here, schools are reluctant to close, public schools, you can't force people to test so you can offer testing, but it's optional and nobody has to take it.

and from what i've seen with all the local school boards around here, they are extremely reluctant to close maybe they'll change their minds once we get into this. but again, some of the rules that they put up they know omicron is spreading they know it's an issue. they're coming up with things like, okay, put your mask up between bites. >> what you see, though, is for example, the city of chicago did all these testing. they couldn't process them san francisco doing a whole bunch of testing look, if a teacher has only chron or has the virus, you don't want that person in school so there is going to be that thing. the question, though, is this variant -- and again you got to step out of your lane, which is hugely out of my lane and talk about the epidemiology of this where is joe when you need him ultimately, if this ends up being shorter, an easier virus, we can come back and i can be here a week or two from now and

show fewer school closures rather than more you just don't know and school officials, you are right, they are testing before closing if those tests come back and they're positive, they have to close for at least some period of time. that makes the situation for a person with kids uncertain and they may have to stay home for that period of time. so certainly january data will be really noisy with this. i am more focused on whether this ends up being february and march as well, or the south african experience, a fast peak and we're on the road back to use a term to normal already by next month >> right the testing disaster has been such a huge problem with all of this we tried to get tested through the school right before christmas. we didn't get the results for one of our pcr tests for a week. a week after taking it, after standing outside in the cold for two-and-a-half hours to take it. it's a complete desert i didn't go back last night to get the testing done i've done my at-home testing

a lot of people can't get the at-home tests. it's useless if you can't get a pcr test back in 24 hours. >> on the local facebook boards here in my town, people are telling each other where they can find tests i feel i am back in moscow in the '90s, when we had shortages and people would say, oh, there is lemons on the corner of the squire people run down to get get lemons it is a bit of a travesty on testing, which would allow people to do the right thing and figure out the right thing to do, if they had the information. >> steve, thank you. >> a pleasure. all right. coming up, the fda expanding booster eligibility to kids 12-to-15-years-old as schools struggle to stay opened amid the omicron surge. we will speak to dr. kavita patel. what it means for parents and the companies they work for. we will add the yesterday's

gains, s&p 500 up 15 points. that would put it between the mark it did close as a slight new record high yesterday. "squawk box" will be right back. make fitness routine with pure protein. high protein. low sugar. tastes great! high protein. low sugar. so good. high protein. low sugar. mmm, birthday cake. pure protein bars and shakes. for every fitness routine. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

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are reporting from the holiday weekend may be a factor. in the meantime, the fda is expanding booster eligibility to include children above the age of 12, shortening the time from receiving the booster from six months to five months. joining us is dr. kavita patel she's also an nbc and medical contributor. dr. patel, it's always good to see you. we watched these numbers as we have been for the lost two years during this entire pandemic. i wonder how useful they are at this point first of all, you have a lot of people testing at home second of all, these cases don't seem to be quite as severe as the ones we have seen in the past and though the hospitalization numbers are the ones that we really should be focusing on. again i wonder there if we should be focusing more on the people who are hospitalized because of covid

not those hospitalized and happen to have it? >> right, becky, you are pointing out a trend obviously from a year ago where cases mattered and we didn't have hardly 18 people vaccinated. it shifted to your point we are teasing out the course of our databases are because states measure things differently and disasterous such as myself might put a heart attack we discovered their covid, we were checking everyone or did covid precipitate their underlying conditions? that i don't think we will these out. i think what we know is these trends are de coupled. that's critical. you are right. other, honestly, becky, than to tell people there is so much of this, it's everywhere, a kind of feeling and acting and your actions say the day of treating this ends up everywhere, because it truly is, maybe one out of three people that are positive as of this week in the d.c.

area so i think that's critical but other than that, it's not as useful >> yeah, those numbers you mentioned one out of three people in washington, d.c. this weekend. i this i in new york city, one out of three people getting testing is coming back with a positive result. that's kind of phenomenal. i don't think we've seen it to have one out of every three people getting a test and getting a positive result. >> yeah. that's right the pretest probability is almost self ev department, the people presenting, the conversation you had, because they're at milestones, they need to go to school. or they have symptoms after back from a trip. we are getting high probability time periods that makes it a higher chance their test is positive but we are seeing as you pointed out, the limitat limitation on e tests, i will cry, swabbing hands and noses, am i getting a critical difference on the rapid tests the. it feels like we are flying

blind. we have tests, they work we just can't get them as you pointed out. >> doctor, i don't know if you saw this, yesterday, the florida surgeon general went public with this idea that he said that florida plans to quote/unquote unwind the covid testing psychology in florida effectively, doesn't believe we should be testing. believes that effectively covid is so rampant that there is no reason for it and that it's going to be endemic and we should just stop this caused a fury from a lot of folks in the medical community but then there is this argument that here we are and maybe it's just unstoppable >> yeah. i will say this, testing is just a main frame of surveillance so it's exactly why we shouldn't pay attention to the numbers to the point where well today here at 500,000 cases, that means we're beckett than yesterday if we were at 6 h.00,000

we know this is a regional surge. testing can become correct am always because of the very reasons we fell short with omicron. we need to do more genetic sequencing how do we do that if we don't have a proportional sample of the country to surveil now we're at the point it honestly reminds me of a couple years ago, we thought we were testing too much at the beginning of the pandemic. that was absolutely not the case i think this is just confusing people more than ever. i think in florida, especially where we see cases rise 900% over the last two weeks, it feels like a convenient excuse to ignore public health measures. >> why has the government and frankly medical practitioners done a terrible job, if we're honest, describing and explaining to the public what these tests actually do? a part of the problem you take

people taking a test in the morning, coming back negative. then later that night or the next day, they're turning out to be positive, throwing their hands up in the air and saying, oh, my goodness, the tests don't work we are not advertising them properly, a rapid test or pcr test is you at a moment in time based on frankly how infectious you are at that particular moment maybe that test lasts four, five, six hours at best. that may change the dynamics how often you need to be testing, which creates the own problem given we don't have enough resources or tests >> yeah. look, i have been trying to say, you can't test your way out of covid. are you right, it's a complex set of messaging, trying to tell people, use the rapid tests, there is such diplomacy on it focuses on the wrong thing saying test, itself, gives you a

green pass to go about your merry way is exactly the wrong message. the test is one of several things we can use. it's easy to say this when nobody can get and at-rapid test i think the administration, scientists, mile, medical community, all of us have kind of understood the limits of these tests. we've talked about how they're not 100% in fact, if you are symptomatic, they're help if you are asymptomatic, they're less help. i think this has become as airlines and industries used to move the test as that path to get you into a grocery store, a restaurant, back to work that's where we became over dependent and over reliant and not listening to common sense. if you feel cirque don't depend on the test, itself, to give you clearance, to your point, andrew, four, five, six hours later, you may have a negative test still you would still have symptoms of covid andwith omicron, you may be treated as summit

that's what we're asking we're critically speaking. don't change the way we use tests, the nature we're understanding about these tests and their limit his and the incubation period. that's the other critical piece. the wuhan strain, we had a better handle on the incubation testing. a lot has changed and been truncated with omicron. >> speaking of the confusion, last week the cdc cut the recommendation for how long you had to isolate if you got covid from five days to ten. over the weekend, dr. anthony fauci suggested the cdc might be reconsidering that guidance and saying you need a negative test before you can get out of ice lachlt isolation. which get nothing sense, which leaves school boards, businesses, state and county boards of health trying to figure out what the heck they're supposed to do at this point. >> i'm smiling, only sunday

night i was testing friends in and out of government saying, is this changing tomorrow morning what are we going to do? so i completely commiserate with that here's what i think, it's going to be hard they don't have enough tests to make a very hard bar to say everyone needs a negative antigen test by the way, i think there is still controversy how much infectiousness with omicron and negative or positive antigen tests confer we know some people want infectious even after an antigen test is negative it's much less likely. here's who we do know, a positive is a positive if you test it, remain in isolation. don't think we will see this black and white. they're not much. >> to your point, the reason that maybe they haven't done this is they know they don't have enough antigen tests. how different is that what the cdc is saying than the florida

surgeon general? sorry, the science would be better, but we can't keep up with it, so forget it. >> no, look, that is a different, i think it's critical what the florida surgeon general is suggest i watched and read the language to make sure i'm accurate in what he is company indicating he is communicating, we're doing too much text, it's useful and from is no point in it i think it's critically wrong, by the way, we're seeing covid flu, in children, and it's very critical if you have symptoms to try to understand what has happened, even if you are dealing with isolating so i think the difference. we shouldn't talk about the lack of testing as a reason not to test we need to hone in on that positive. >> i'm not trying to say what these florida guy has said is the right way. i don't think it is, but what the cdc has said is not that much different go ahead in five days, you are free we don't know if science can keep up with that or require to

you take a test. it's not practical >> sure. i think the cdc, we have talked. i'm not a fan of the cdc put out that i'm not a fan, if you don't have tests, you tell people the test is useless then i'm not a fan of people trying to gain their own symptoms and feeling pressured by a friend, employer, a household that they are quote improving their symptoms so i do hope that language -- >> that's what the indictment says >> i agree no, there is no question that needs to be clear if you are sick stay home. that's the message it's very hard for americans to keep that up right now so i think you have to go back to the basics, becky if you don't feel good, you don't feel good. you need to find out why don't leave your house it's too critical. >> by the way, let us find out using nasal swabs and throat swabs. i heard the same thing tell us what you find out today. >> all right take care. >> all right thank you. when we come back, a year

into joe biden's presidency. where does the economy stand we had new data. we'll speak to former adviser and check out shares of under armour they're higherafter that outgraded the stock to outperform from usual, expecting them to benefit in cyclical recovery "squawk box" will be right back. . 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. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world.

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. >> still to come omicron continues to tear through the country. but will the resident case count have an impact on the fed's decision this year plus, veteran investors byron wien will talk to us about the year ahead stay tuned are you watch u watching "squawk box" and this is cnbc. >

. as the biden presidency hits the one-year mark, they check out whether they're better now than a year ago. kayla tausche joins us to break out the results. good morning >> reporter: good morning, in short, the workers do not think the economy worked in the last year, a poll conducted between december 17th and 20th the economy the top issue for nearly every demographic despite a new pandemic surge, covid-19 fell to the sixth overall concern as the supply chain, inflation and jobs

continue to be top of mind for voters 73%respondents think that. respondents gave him a d on the overoverall, personal finances and helping the middle class an eye opening response considering the 1.9 trillion dollar rescue plan to help alleviate pandemic stresses and pay bills. respondents weren't sure that helped 58% of president biden's voters and 99% of voters who cast their ballots for president trump said that made no difference and left them worse off at odds on what policies will grow the economy and create jobs going forward. biden's voters large lisa i the bipartisan infrastructure plan and the stalled build back better pro elf will do just

that but president trump's voters say they won't looking out over the next year, 52% of respondents say the economy will only get worse, not better becky, that is a bad omen for the administration as the mid-terms approach >> so, kayla, the voters gave him a c when it came to the stockmarket. but the stockmarket soared over the last year. did they kind of break down why they don't give him credit for that >> reporter: no, interestingly, becky, a lot of respondents say they think about the stockmarket a couple times a week or not at all. there were a lot of respondents who say they recognize the stockmarket has improved whether they give president biden credit for that they do not. the largest category of respondents on that metric, 40% say they give president biden no credit for the way that the stockmarket has performed under the first year of his presidency >> kayla, thank you very much. okay for more on the omicron impact

and the fed's policy change, i want do bring in our guest, glenn hubbard. he serves to the economic advisers under president george w. bush, currently, an economics and finance professor. a new book is all, the wall and the bridge, fear, opportunity disruptions, also with us is wendy everythingleberg, the brookings institution economic studies senior fellow. good morning to both of you, glen, happy new year i will start with you in terms of where we think this bill is i know have you some pretty critical views about it, but what do you think has to happen, especially given the environment, which is inflation continues to persist >> well, it's a great question i think there are a number of issues one is the bill isn't the right set of policies, in my opinion, it's not helping the people continue to help putting that aside, there is still real questions about the cost of the bill, aboutfest financing in the near term,

things that have confronted senator manchin. so i think that those things would have to be addressed for this bill to be politically liable although, it would still leave the economic concern >> wendy, i don't know if you see this you see a lot of democrats now effectively criticizing business, criticizing industry, saying its corporations are create texas head winds and effectively the head winds in the country. they're now talking about the fed. is that just political expedience >> i think the overwhelming effect is that every product that's not on the shelf is a lost profit opportunity for business and they say that and that gives them every incentive in the world to iron out the supply changes i don't lay what's happening at the fed's feet this is all very much focused on

the good sector so goods inflation is off the charts. goods inflation is like rung like 12%, which is astronomically high. where services inflation isn't doing much to write home about this is really about the crazy composition of consumer spending that i certainly didn't predict i'm not sure other companies -- >> are companies gouging the public which is what you hear democrats saying or has the federal reserve and possibly the government given some of the money sent to people during the pandemic, has that led to an environment where consumers are willing to pay maybe we describe it as exorbitant fees or exorbitant payments to buy this stuff at these kinds of prices, glen, what do you think? >> well, i do think that this is in large part a supply chain issue, but i think the fed has contributed to it.

we have trade to accelerate demand growth at a time when supply constraints were binding. it's going to be very hard for the fed to segue to a more normal economy without inching into a resession it's not impossible but it's very hard particularly with the labor market being this tight. i think the fed was behind the country. it did contribute to the problem. supply chain issues are important. i don't see evidence of business gouging, whether it's the supply chain. >> can i just, so, here's the thing, the overall level of consumer spending is not actually hugely surprise in the context of other business sookles. yes, the fed's done a lot. but we also have an incredible amount of pent-up demand on consumers who aren't spending on service. it's not the overall level, it's the composition of consumer spending and that's much more about the

pandemic than it is about the fed. >> obviously, wendy, if you can waive a magic wand, what do you do about it? and is it fiscal or monetary policy or something else in terms of anti-competitive policy is that something else you hear from the white house, they believe it's a competition problem in this country? >> if i wave a magic wand, i get the pandemic under control then we pivot back to goods and services, with the pandemic under control, my hope is the labor market does more to recover and we get labor force participation back up. that makes most of these problems go away. >> gwen, does it, though >> i think getting the pandemic under control is important for a variety of reasons, including what we are talking about here i think the fed still has to move faster towards a more normal policy. i think federal reserve policy, not just government policy, has

contributed to the problem and in a supply-constrained world. the fed can pull it off. but it's not going to be easy. >> glen, play this out, if you believe this pandemic persists longer than all of us imagined and hoped, you never have it to given with but if this continues and you start to see a pullback in travel or in going to restaurants or what all those types of items do you think j. powell has to rethink how quickly he tightens? >> well, i think the fed is rightfully already thinking about what you are saying, what itself the likely future path of the economy? the fed is always data dependent. but we are in a world where the labor market is doing well, healing further. we are in a world which supply rather than demand is the problem. so i think directionally, the fed should still be pushing towards a more normalizing monetary policy. >> wendy, the build back better

plan bill i should say, if it went into effect, do you think overall, i mean, you used to score this stuff, so you know, what do you do what the white house says or not? >> absolutely, i would do what the white house says it would improve the strength around resimmience of the economy. it would make growth more equitably distributed. it would have only the modest effects on economic growth over the next year or two this is not a some lus package this is not an economic recovery package. these are long-term improvements in our social insurance system >> glen, you know a lot of republicans obviously disagree with that. what is your take on what wendy just said? >> well, i don't disagree ethat it's not really a stimulus bill. it's a modest deficit effects, near term and long term. but the real issue is what the policy is. i think we need to be doing more as a country for preparing

people for work for modernizing our social insurance system, not just widening it and deepening it i think build back better is the wrong answer i'm not sure what it's bidding back >> glen, wendy, we will leave the conversation there of course, it's a debate we know will continue. i hope to have both of you back to have more of it thanks, guys >> thank you. coming up, legendary investor byron wien joins us with his market surprises. later, ford's big bet on evs in the announcement it is doubling production capacity after the all f-150 lightning. we'll speak to the president of the international marketing group. "squawk box" will be right back. >>

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. welcome back to "squawk box" the dow up about 95 points nangs up 17 points the s&p 500 looking to open about 11 points higher where were you, surprise, surprise, black tone's byron wien will join us with his list of 2022 which may or may not impact markets you don't want to miss it.

it's an annual tradition, "squawk box" returning after a quick break.

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kicking off the new year we have top ten surprises for the coming year. the chairman of blackstone's solution tos group joins us now. byron, it's great to run through these with you i have been following the vast majority of the 37 it's good to have you bring

these to us today. >> it's always great to kick them off on "squawk box" >> well, i did go back and look a year ago you had shome good hits. you thought oil was going to come back strongly and a few other things, very strong u.s. nominal gdp growth inwa i want to get to some this year. do you believe the public says there is a one in three chance of happening that you think are more probable than that? >> right better than 50% chance >> better than 50% in your assessment okay the bond market begins to respond to rising inflation and tapering by the federal reserve. the yield on the treasury rises to 2.75% the fed completes its tapering and raises rates four times in 2022 so you this i the fed has to hustle here? >> i am not in the transitory camp i think inflation is here to

stay you may get some correction in commodity prices, all may come down before it goes back up. but i think represents and wages are headed higher and that's going to drive the overall consumer price index and employer cost index higher consumer, personal consumption expenditures will be up 4.5% also >> so that's all pretty strong in terms of an economy running hotter just to get. you feel like the stockmarket will be caught in the middle here a bit when strong earnings growth and economic activity, fighting the head winds of race. >> right i think the market isn't going to do much this year we've had three great years. i think 29, 16 and 27% i don't think we're going to g have the fourth great year

on the other hand, i don't think we will have a bear market i think we can have a correction along the way. basically, i think the market will hover around where it is right now for the rest of the year >> well, let's get to another surprise about business activity and reopening-type activity. you say in spite of the omicron group meetings and convention gatherings return to pre-pandemic levels by the end of the year. people spend three-to-four days a week in offices and return to theaters, concerts and sports arenas en masse? >> i do. i think secular changes are put in place here. i think people will want to have flexible work schedules. i don't think people are going to be as zealous about coming into the office five days a week they may not come in on fridays or take some other day off you know, and i think theater

and sports will be slow to come back and travel may be slow and there will be fewer business meetings, because we have all learned how to use zoom. basically, i think by the end of the year, we'll be all most institutions and offices will be functioning pretty much the way they did in 2019 >> well, that's a hopeful one. here's one on the transition towards green energy that's maybe a little bit cautionary. you say the u.s. finds it cannot buy enough lithium batteries for the vehicles for production. china controls the lithium market, as well as the markets for cobalt and nickel in the transmission rods and it opts to reserve most of the use. what are the transition to evs, diplomatically, industrial policy, all the rest >> well, we didn't make much progress in improving relations with china last year

hopefully, we can break through this year. but what i'm saying is that the production of electric vehicles will be limited by the raw materials that need, that we need to manufacture them and that's the key point so it won't be manufacturing capability it will be getting the rare earths and other materials that we need to complete the cars so that's going to become an issue. and you see that in the newspapers quite recently during november and so far this year, about shortages of cobalt, lithium, nicknickel, et cetera. >> we have it's a bit precarious on that supply chain front gold, interesting call here. certainly contaxparariancontrarn

i mean gold hasn't been really been able to work, byron, everyone with negative interest rates and things you think would be benefiting it what do you think leads to the rediscovery of gold here >> i think people are getting suspicious about the volatility of crypto currencies i don't think they're going away i think they're here to stay but i think people will recognize if they want to park their money somewhere, where it's going to hold its value, in an inflationary environment, gold is one of the places to be. so i'm just saying that gold is going to be a chosen alternative. but it isn't going to be a displacement of crypto >> right i mean, thoughts, if you could situate us in terms of where we are in this general market cycle and just this feeling that we might have in the market in terms of public participation. we're talking apple being a $3

trademark market cap again some criticism, in maybe the market is ahead of itself or a little top heavy what is your sense >> i think it's a little top heavy. i think valuations are full. i think we're in a very long business cycle i don't see a recession for several years because we're still coming back from 2020. so, i think the business environment is going to remain favorable. i think the market is a little bit ahead of itself. as you said, i have 4500 target for 2021 and we exceeded it. i think the market can hover around present levels, but i think it's going to have trouble making forward progress from here >> right when you are talking about the fed having to raise rates four times this year, up one percentage points on short-term

rates, do you feel that might be it for the cycle or do you think this is going to be more prolonged? if you look at the way the bond market is situated right now, there is some skepticism the fed would be able to get a lot of hikes done >> i think the fed will reverse policy they have been accommodative that's one of the reasons the market is at 4700. but i believe that it recognizes that an employee takes away the gain and real wages and so skwens consequently, they feel it's their responsibility to act to hold down the inflation the way to do that is to stop the tapering and start raising rates. and you are going to see that. i think the market is built in to rate increases, but i think it could turn out to be poor because the fed will be really serious about bringing inflation under control. >> interesting, byron, that

absolutely would be a big shift a couple years after they pivoted in the other direction it's really great to have you run through these, good to see you. >> i hope we can continue the from d tradition for many more years. >> thank you again coming up, new year seeing supply chain issues. we'll talk about whether or not we will leave the troubles behind in 2022 plus, florida announcing plans to nearly double production of the f-150 pickup truck we will talk to the president of the americas on the ev race. you are watching "squawk box." we'll be right back. zblmpbls

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>> good morning, markets set for new gains. covid cases also getting a new record more than a million new infections yesterday plus, theranos founder elizabeth holmes found guilty. and the next trillion apple hits another historic milestone. we'll show you how far the stocks come during the pandemic. the final hour of kwaux begins

right now. >> ghorm, everybody. welcome to "squawk box" on cnbc. i'm here with andrew ross sorkin and mike son tolly joe is off today the s&p and dow set records and the nasdaq was the outperformer. the dow futures indicated up 95 points the s&p futures indicated up by ten. the nasdaq indicated up by nanny. then you had those huge moves in the treasury markets this was significant with prices falling, yields picking up substantially. yesterday's yield was the biggest starting 84 in two

decades. you see u.s. treasury yields higher it was just last week when we finally crossed 1.5% for the ten year so this is a rapid pace for all of these moves to be happening you also see the 30-year above 2% let's get you up to date on today's top stories. the u.s. indicated 1 million new cases in a single day as omicron surges through the country. the volatile seven-day average is approaching that mark hospitalizations are up a third from a week ago. in business news, verizon andstst will delay the rollout of some 5g service for two weeks. they've cautioned the new service could cause disruptions with architect electronics you see shares of at&t up .6

verizon up a third of a percent. am hits $3 trillion for the first time apple share prices more than tripled since the pandemic marnths saw bottom in march of 2020 shares of apple up 34% from last year the question, how big is it going to get >> we want to dig deep near apple. some of the mega cap, brethren mike stepped away from the desk to the telestraiter, looking for the biggest influence on the overall market. >> yes, apple along with tesla were the vast majority modest upside in the s&p 500. that's been the case, in the last few months, it has turned to the giant companies upward drift right here. the 4800 level, we're kind of trading above there in the premarket. we crossed a few times, settled below it it seems like going to challenge

it again today we are riding this line that's been in place since the spring and people are saying, you get up, if we got it to 48/50ish in a hurry, take a look at apple compared to where you should say comparable big nasdaq and s&p companies, microsoft and alphabet this is a two-year chart. it goes back to before the pandemic you see they swap leadership around here. apple goes in these kind of aggressive sprints you see it lift off relative to the other two. it chops sideways, the others catch up we are equal here. now apple is around 30 times forward earnings, microsoft call it 34-ish. at this point an alpha bet more like 25 looking like a value player in this group if you consider them, know roughly comparable longer term

i did mention the big cap stocks have taken a lead. etf, that, ovk to the small cap. there has been some separation it has been more large caps. however, for 2021 as a whole, the equal rate and the s&p, itself, were exactly on par pretty much. it wasn't a domination by the larger stock os, the entire calendar year. in the latter part of it, it certainly did lean much more towards the megacaps. >> that goes to the point the white house is making about concentration in the business. if you go back to the chart you were looking on the apple versus microsoft/alphabet if you extend that chart out say a decade, does it look a little different? >> it looks a little different i would say apple is the outperformer microsoft is pretty -- they're all pretty close there is your decade

apple next- neck-and-neck with microsoft. they're pretty consistent with how they perform 2007, the iphone era starts. that's when you get lifted up with apple what is really interesting, though, a for a long period, you were able stay apple is cheap. it discounted in the market. that's no longer the case. what's so interesting about that chart, especially if you take the chart prior, you are looking at i don't want to calm it under performance, it's been remarkable performance on a regular basis, alphabet underperforms. once you hit 19 there, you are into this sort of unique under performance. is that naked a value? or do you think it's actually is up a different business? >> i think part of it was. it was very expensive beforehand, so it's a matter of

what starting point you want to take they definitely had a bit of an issue there. they were not relying on profitability to rely on core search before you have more of a management transition to really exploit things plus youtube coming on in a big way as well. >> okay. mike santoli thanks so much becky. >> theranos -- >> i love we can look up 769% as under% it tells you the gains we are talking about with some of these stocks you are right, theranos founder elizabeth holmes found not guilty of defrauding the patients that got bad test results. that verdict from the jury in the heart of the silicon valley. we have more on that story, he has been following it from the beginning. scott. >> reporter: thanks, becky, yes,

elizabeth holmes had promised to change the world now she is almost certainly going to prison. it took this jury about seven days of deliberations, finally towards the end of the day yesterday, the eight men and four pim delivered the verdict a stunning fall for a woman once hailed as the next steve jobs, elizabeth holmes guilty on three counts of wire fraud one count guilty of investors, not guilty against patients. the jury could not reach a verdict on three additional charges of defrauding investors. holmes you will remember dropped out of stanford at age 19 and eventually raised more than $900 million from investors, claiming her kane could perform a wide range of tests on a tiny sample of blood she had big deals, defense contracts with the military, which the jury ruled yesterday a pack of lies >> reporter: what does it say about the dream that you had all

those years ago? >> holmes showed no emotions in court as the investigators were read the jury not buying her testimony on the witness stand she never intended to defraud anyone the jury did buy the argument from the defense the talked about false test results going to patients, that was all anecdote am. th anecdotal no sentencing date yesterday on the most serious charge, she could face 20 years in prison. >> so many things to be clear with this, the message september in terms of defrauding investors and defrauding patient markets -- patients, i thought it was more difficult to prove that. >> reporter: it was with the evidence the prosecution had we know she performed something like 8 million tests when it was

up and running for consumers beginning 2013 but there was no persontage of tests that were wrong. so we did, in fact, have anecdotes from a couple patients who got false test results, one got a false hiv positive mpgs another a false indicator for prostate cancer. they talked about what that did to them, the fact that they were false. the prosecution was never really able bring home the idea that this was systemic. even though, there was a lot of testimony about big robs in therano is' labs and elizabeth holmes knew about them >> in terms of sentencing, it could be four counts, will they serve consecutively or at the same time going altogether and that's got to be a huge question at this point too, just how the judge determines this, what they come out and what they say. >> reporter: sure. i mean, he'll be guided what by the federaling guidelines.

if you break this down, there are three counts of wire fraud, which carry 20 years apiece and one count of conspiracy, which is five years. so theoretically, she could do 65 years in prison but she has no prior offenses, so that will certainly bring things down and the judge is more likely we would think to have her serve the time concurrently as opposed to consecutively. but there is also the fact that there was a substantial loss to investors. that's factored into the guidelines so it's pretty likely barring an appeal, which is almost certain, she will do some very serious prison time. >> scott, we were talking about this early this morning, whether this will send a signal or a chill to silicon valley with that whole adage of fake it until you make it has been the way of the world for quite a while there. you have been covering cases for a long time, back to enron, following what happened there. in the after math of the verdict like this, would you expect to see changes tacking place in silicon valley and beyond?

>> reporter: well, based on all those cases, fraud is never going to go away it sometimes takes different forms. you are right, the issue has been talked about a great deal here in sill lie convalley does this change the culture we've seen so many companies over the years that have made grandiose claims to raise a whole lot of money eventually, that pays off. the difference, of course, with theranos is we were talking people's lives and more grandiose claims than a lot of these companies made so it was capturing a lot of attention. there is so much money at stake and so many companies trying to raise it it's hard to imagine it will change much beyond the margins >> scott, bottom line what kind of sentence do you think we really see and when longdo you k it all goes down given the appeals process? >> reporter: she will be back in court next week and we'll get

more on whether the government plans to recount those hung, those are three additional fraud counts against investors as i said, she could theoretically if you go the statutory, she could face 60 years in prison. it's highly unlikely, but it will be serious. we'll see when the sentencing happens. we'll get a sense of that next week the other thing we have going on, coming up in february, is her original co-defendant, the chief operating officer, who she tried to pin the blame on. he goes on trial in february and it will be interesting to see how the verdict yesterday affects that trial coming up next month >> scott, thank you. scott cohn. coming up, we've heard 2022 is when supply chain crunch is supposed to ease up. what exactly will that look like on the ground?

ahead of the port of los angeles will tell us next.

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gene, it's good to see you again, thanks for being with us this morning >> you as well, good morning, becky, happy new year. >> happy new year. why don't we start with an update of where things stand right now? you've had a traffic jam at the ports for months at this point any sign of relief of things easing up? >> we've seen progress, becky, as i've reported previously. but we are in the midst of another mini peak at the lunar new year in asia the the caravan of cargo continues to come in strong numbers into california. >> i know one of the things you look at are the number of containers taking up space on the land there the capacity at this point is 100%, meaning you can't take any additional containers. is that the case right now >> that's a snap shshot in time. yes, it is we have worked down the imports by about half since we first put into place the threat of the penalty on long aging

containers those containers also hit a low resistance level over the holidays when many workers took time off to be with family and friends. we'll see a good productive week here first week january 3rd to start working those down as well but we're watching very closely as folks come back from that holiday of what infection rates may look like. we're all battening down >> if you improved by 50% the number of containers stuck there, how are you still at 100% capacity >> because we started to see another trend under this elongated import surge, as the empty containers that have been piling up at the port. we sat yesterday evening at 71,000 containers empty on our marine terminals plus in adjacent yards an additional 10,000 looking amount those containers overall, two-thirds have been signature nine days or longer.

so our work with marine terminals and shipping lines is to how best balance this effectively designate those for export use the rest evacuate them back to asia to pre position for the next round of imports. >> you guys have been threatening for a while, the shippers will charging them if they stick around nine days or longer in different time trades or periods, but you never actually imposed those fees. the shippers howl about it and say it's not anything they can control, if they can't get truckers to take things out? is that a big stick that you guys are never going to use? >> we'll see we still have a number of containers, 21,000 to be specific that are nine days or older on the import hide here at the port that need to be moved off. we'll continue to monitor this closely. i did say publicly back in october that we would be successful and we did not collect even a nickel off this

proposed penalty we will continue to work with the markets to move this as fast as possible. we do have latent capacity the two railroads union pfk and northern santa fe and all available truck appointments 55% are going unused since we began measuring this closely october 9th. we got capacity. we got to use it and squeeze every hour, every ship work out that we can. >> where is the holdup then? if you have this additional la at the presen latent capacity? is it getting the trucks to move from the ports to the trains some other thing in between? not having enough productivity what happened? >> two main pieces, number one, importers generally have ordered just in case no longer just in time they were trying to get those orders into factories before their competitors did.

we saw a lot of cargo pile up here as you may remember back in the fall, whether it's be lounge chairs, patio furniture, large screen tvs ahead of super bowl, including 20% of our imports factory parts and components the other thing as the summer rolled on last year and folks were getting quite concerned, the rail service deteriorated. we had almost 50 trains backed up out of joliet, illinois, the two paused service for a week that cargo shifted to discharge here locally in southern california and it gretz transloaded intodomestic containers we have not seen it on dock and moved out into the superior of the united states. >> bottom line, when are things going to get better? when will things clear up? >> we will see a little break

after luan ar new year, landings in february. and replenish inventory in the second quarter if we do those things well and continue to make progress, we may have the ton in the of a little gap before an early peak season this summer but we got to chip away at this every day, every week. >> gene, thank you so much for coming to us from the port of los angeles. >> okay. coming up right after the break, key hedge fund picks missing badly the mark last year plus we got a big interview with ford's president of the americas, a new investment in the company's highly anticipated f-150 pittsburghup don't go anywhere. "squawk" coming back right after this

. we're going to get a deeper read on the market's performance in 2021 and the winners and losers along the way it looks like famous hedge funds missed the mark. what sounds like a little of a familiar trend, leslie >> yeah, i feel a little like a broken record these days, mike but beating the market not an easy feat in 2021. however, a basket of popular hedge fund longs didn't even come close goldman sachs is back to 50 names that appear most often among the top ten foldings hedge funds. the vip list returned 11% last

year that's about a third of a return for the s&p 500. top names in that bask include microsoft, amazon, acebook meta platform, google parent company alphabet and salesforce, they largely outperform a lot of data there but the nextyear, including names like uber and mast evercard helped returns last year equity hedge funds go short, it turns out a group of vip shorts by dollar value was up 23% last year that's opposite where investors want the bask to go. however, the top names in this group include tesla, s&p global. moderna, bank of america and home depot you can see there all of those dramatically outperforms the index. the hedge fund returns year-to-date we should be getting december numbers soon, which encompasses the long and short side.

that was 10% for equity funds. that's the year-to-date through november and yet total industry capital surpassed $4 trillion in 2021 as investors maintained or boosted tear expose year to hedge fund really it's about macrofactors like inflation and fiscal and monetary tightening. that means investors will want to part with the so-called smart money, hedge funds institutional investors. however, we talked about, we heard that story before. maybe 2022 will be their year it's been a frequent refrain for sure >> it is plausible i have to say, i think a lot of hedge fund managers can can go and say the biggest pullback was 5%. hem funds are not built to keep pace with a market like that on the other hand, so many stocks got blasted

you would have thought there was more opportunity on the short side, outside good companies like home depot. if that was a crowded shore. >> that's right. equity funds, in particular. it's changed their pitch over the years. you invest with us, you make these concentrated ricky bets in order to outperform the markets. there are funds that have been able to accomplish that in 20 up with there are popular bets, excluding what we saw with the vip basket and large tech names. there were china tech space. there were popular bets that really missed the mark in 2021 a lot of fund managers were thinking they might. so you know, it remains to be seen whether those investors will be punished for investing in those names or that pitch for 2022, the idea that these were macrofactors and you want to

protect the down side still holds. >> we will see if it works any better this year, leslie, thanks so much, talk to you soon. >> coming up next, ford's president of america live on the ev announcement the company just made this morning. news just out with politico reporting the senate banking committee will be holding hearings next week on the nominations of j. powell for fed chair and lineal brainard as vice chair stay tuned this is "squawk box" and this is cnbc because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work. you could wait... all night... for an email response from steve,

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welcome back to "squawk box" this morning ceo david mccormick stilli telling staff he will be sting down he signaled that with an ad that touted his military record and christmas tree farm. the chief executive nir bar dea to formerly belong he had been serving on the board, mark betterolini a friend of "squawk box" taking the helm

of co-ceo role at bridgewater. >> an interesting next act for him. covid adding an extra shot it will require u.s. workers to be fully vaccinated or face weekly tests starbucks says it is acting due to an osha rule, that requirement has been challenged in court the supreme court is said to consider the rule this coming friday, so starbucks proactively saying they will go ahead with it as if it is going to last as a long. >> they're dock it the question is, is that leadership to the extent it will be seen by other companies as the way forward? and are people going to follow starbucks? we'll see. meantime, in the wake of tesla reporting 88% delivery for 2021, a legacy vehicle making a big move i want to welcome the former president of the americas and its international group. we have an announcement, it's

playing double production for the upcoming ev pickup the f-150 lightning. thank you for joining us, let's talk about this. because there has been so much demand in fact, i think after the first 200,000 orders were placed or requested replaced, you had no cut it off because it was too much >> yes the reception, first of all, thank you for having me. the reception of this vehicle has been absolutely incredible so after we showed the vehicle, lots of orders we doubled capacity next year. the orders continue to come in now we're announcing today that we're increasing capacity to 150,000 lightning per year right here in our iconic electric vehicle center, where i am talking to you from. >> is that going to change the dynamic with which orders can be

plac place now? >> so the way it works, on thursday, the folks can start converting those reservations intoer orders. yes, because there was such a long backlog, more and more folks in waves can start placing orders this week folks who haven't made reservations yet, i would recommend can go to ford.com and sign up for regular updates. so because as we increase capacity, obviously, there will be more room for new customers to place reservations and their orders for 150 light nipgs. >> when you look at the landscape right now. you look at this f-150 are you sitting there saying, we got to think about the cyber truck. we're thinking of rivian, what gm is doing? how does it stack up in your mind right now in terms of the competition for this truck specifically >> yes, so, you know, we've f-150 has been the best selling

vehicle for nearly 40 years in this country, best selling truck for 45 years so that's a pretty strong record we know our customers really, really well. we know what their needs are we know what their unanticipated needs are. we have been working with them all along to korea it this vehicle. the f-150 lightning. interestingly, 75% of the orders that we receive are actually from people who haven't owned their ford in a while. so the demand is really strong we know our commerce really well we're basically developing the vehicle for them competition is always great. competition makes us all better. we look forward to the competition. >> kumar, the comment you made on the stats of who is placing these reservations is interesting. you are saying 75% effectively of buyers were people who were not commerce or at least current customers so what does that say about how the marketplace is changing i was thinking when you sea e

said you know your commerce so well, you were going to say 75% were people who owned a gasoline powered f-150s, now they want to transition this is a whole new space. >> it absolutely is. that doesn't mean that our guests win when our customers are not converting several of them are converting as well. we saw this with marketing we are saying we are seeing this with f-150 lightning as we put forward compelling battery electric vehicles, there are customer who's have previously not given ford a chance are now willing to come to ford for a really compelling electrified vehicles >> when you think about the overall market and let's play it out five years, even ten years from now, if you look at the valuations that have been ascribed to tesla, to the entire auto industry collectively let's include tesla, it's

important. it's at a level we never seen before do you think long-term the pie will expand that much? or do you think it gets divvied up in a completely different way? or divvied up the same way, fra fra frankly? >> that's difficult to mix the u.s. it's been about 17 million units. it's clearly not going from 17 to something like 30 million units. so it will be around that number it might grow a little bit how it gets divvied up will absolutely show. it will shift more towards electric vehicles. that's why we are investing incredibly heavily in these vehicles we are putting forward compelling products. we are starting to see with marquis and f-150 lightning and transit, more and more customers will move to electric vehicles

frankly, with the work we are putting out into the number two in that market very quickly over the next approximately 24 months and shoot for number one >> you said number two, that means that tesla, i imagine, you are referring to, would be number one that would also mean that gm would be number three. you heard mary barra say she wants to be number one how do you think the tesla, gm, ford match up plays out? and what are the fault lines within it? >> well, two big things. one is obviously the product i would argue that with the mustang marquis, we put forward really the first extremely competitive and compelling product that challenged the battery electric leaders with f-150 lightning, the facts speak for themselves product is going to be obviously very, very important the second part is going to be the execution of increasing these volumes and that's why

today's announcement is so important. the moment we saw the demand, we doubled the capacity to 80,000 demand continued to pour in. we are increasing it to 250,000. we are increasing the capacity for marquis to 200,000 next year that will bring our total capacity to 600,000 in the next 24 month globally for battery electric so the logistics of not only designing great vehicles, then securing batteries and securing all the other parts, the motors, the controllers. doing it as quickly as possible to ramp up a gentleman to be really important in who wins and who doesn't with in. >> two big questions on that, it appears right now the battery seems to be in shorter supply if you will than the chip shortage issues is that correct? and what has to change >> they're both very challenging issues the chip issue is here and now we're working through it

literally every day. we have been through it more than 18 months the later one is slightly more difficult in terms of longer the. because the battery to secure the raw materials, the capacity to build cells, the capacity to build battery packs and batteries for vehicles there is a substantial leap into that that's why we are betting now, we have announced two really significant battery plant locations. one in tennessee, one in kentucky along with our f-series assembly plant we will put in tennessee, so we are ready as this demand increases. all of those battery capabilities i talked about in tennessee and kentucky, they're not even included in this 600,000. they start coming on board in 2025 >> finally, in terms of margin, how far off are you in terms of getting the margin of an f-150 lightning to match that of an

f-150 combustion engine? and when does it surpass that margin >> yeah. this is where, as you hinted, markets are obviously at the moment i would say lower for battery electric vehicles but getting better all the time. marquis is profitable and the f-150 lightning is going to be profitable the key there is going to be scale. you know, we saw over 600,000 f-150 gas vehicles that scale is really important to our margins because it brings the scale down as we pla i to and announcing today, those margins will improve substantially. exactly at which point the two cross over is difficult to predict at the moment. but as you can tell from our investments, we're all in. because we're highly confident in the longer term, we can be incredibly profitable and provide confident and compelling

battery electric vehicles. >> it's a fascinating story and discussion and a very cool vehicle. we appreciate you being with us this morning thanks. thank you for having me. >> you bet when we come back, jim cramer will bring us his trading day. plus much more on the marks, the future is looking up, the dow is 144 points right now "squawk" is back right after this this >>a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary> retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab.

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box. ecommerce company fanatics acquires trading cards from topps. the deal is roughly worth $500 million, includes topps' name and exclude the candy and gift card line after they captured major trading rights last august topps held them for decades. they plan to go public by a spac merger, that deal will allow them to maintain trading cards rights immediately instead of waiting for a top deal to end. we talked about how remarkable a deal and the deal-making mechanics and back and forth were it to get that to happen, michael reuben really making a unique play directly to the mlb, usurping topps in a long-time relationship, saying, hey, you got nothing. i'll take you. by way, $3500 million is

actually paying more than i thought he would in a way, if you go book and look at the topps spac, they're going to value it over a billion. half the business was ba zook ka maybe it gets close. there is definitely leakage in the transaction. not what i think had been initially expected to the total valuation. >> that's the way to do it andrew, thank you. let's get down to the new york stock exchange. jim cramer joins us right now. you have been a fan of ford for a long time. i wonder if you thought about this new announcement being able to double the production for the f-1250 lightning >> i think it's terrific i think it's more with the inverters and batteries. i have been a big backup for the travel trust farley has done a remarkable job. he's ahead of musk on when it comes to the pickup truck. the mach-e makes a lot of money.

he doesn't like to make things that don't make money. i think he won't be able to to do 200,000 battery-powered vehicles in 2022 remember, he does have a substantial ice business but that's valued at zero when you look at what rivian is valued at a lucent is valued at. >> in terms of profitability and demand for that product, seeing that demand that's built up and being about it respond to it when it comes to the electric version, too >> i got a maverick, the hybrid, not as big, the f-150s, remember, they will not have any problem getting chips. they are prioritize all of the expenses, the bicker chips, to these and i think that that's one of the reasons why the sky is the limit for ford this year. it's going to be terrific. >> i'm not sure if you've heard earlier this morning

andrew was just talking about is fanatics deem, michael reuben going after thompson, finding this way to do it. it reminded me when fox entered the game for the nfl negotiations with cbs. it made more sense to spend more on it. this is a similar situation, michael reuben sighs different things he can do with it >> did you notice that an draw dropped his initial way he described reuben, once he figured out the actual bazooka price. he used words that were exciting it was 640, right, andrew? >> like a stone cold killer. stone cold killer. >> i love that >> think about that. think about that deem, though. >> who goes in basically gets the major league baseball to completely upjend a relationship it's had 50 years, more than 50 years. who does that? how do you do that then have you the audacity to go

to people you screwed and say, hello, we'd like to buy you now for a lot less >> how about he got this great part everything other than the on-field uniforms. everyone is claiming it is a good deal for reuben he grew up ten minutes from me the guy is stone cold killer i kind of like that. >> i say it in the best sense of the word, joe. i called you joe >> you didn't say he's a gangster you didn't say he was scarface right? i mean did you say he was scarface and i didn't catch that >> no, no, this is one of the great deal makers, if you will i say it with that intent in mind >> he s. by the by a, he's funny. he does not carry himself as if he is anything other than a regular guy, of which he is, by the way. and i enjoy it as if philadelphia, i love see him him pants everybody. that's a very good verb.

pants. pants. >> i like it unless it happens to you, then it stinks. >> i don't have anything reuben can take with me his foul mouth was so perfect for philadelphia perfect for perfect for philadea it's thick, you know let's go have a cheesesteak. then it was like, beep, beep, beep of course, he says it, i don't i'm the gentleman. >> there you go. >> anyway. >> loving your show this morning. how about the way andrew took it by saying, look, tested every 17 minutes. thank you, andrew. thank you. if you had a pcr in the morning, how did i get omicron? pcr in the morning, gave it to me by the end of the day that's fabulous. >> snapshot of the time. >> if you're going to test your

way out of this, you need more than 500 million tests. >> bingo >> biden, omicron, the great thing about getting it, i don't test twice a day anymore. >> there you go. jim, thank you >> two lines >> by the way, we want to remind you about the new cnbc investing club you can sign up to find out more at cnbc.com. "squawk box" will be right back. will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.

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it's the final day for major averages to add to theirsanta rally returns. joining us now, head of investments at nuveen and head of global equities at sofi good morning to you both sarah, i wonder if you could set the scene for the year ahead markets have not gone into a defensive crouch in the face of this omicron surge yields going higher and this general sense out there that investors are willing to look through, maybe a little bit of a soft patch in growth how does that play into what you're expecting for this year

>> for 2022, we see two key themes, broader market leadership and pricing power the companies that win will have pricing power to overcome inflation and preserve their already multiyear high emeremermargins. n we're going to lose the benefit of monetary support this year. moderately bullish for this year as we see markets usually have positive returns in the early cycle of rate hikes. that leads us to preferring small caps, select technology companies and cyclicals. the question for this year is, will it hold past the first quarter? we didn't see that last year. >> right if you think you have broadening market leadership and small caps actually being able to perform, does that mean you would implicitly be fading the moves

in things like apple and microsoft, both of which now are above 6% of the s&p? >> if you look at apple, most likely the trade is upward demand remains very strong because of this covid environment. at some point, that usualliy hih demand will go back to normalized we're not seeing that yet. and i think the will continue to move upward and companies like amazon, which have a lot of control over their logistics business, they can outperform. >> liz, obviously the trend is favorable still coming into this year wondering if you're seeing anything out there that might disturb that picture >> yeah, i think we're facing some headwinds in 2022 that we haven't faced in a very long time and to the point made earlier about broader market leadership, i think what's really going to happen here, we're going to see some of the sectors that we've

been talking about, supposed to lead the market, actually lead the market through 2022. you talked about fading some of the trades i think on some of these short-term rallies, i would be fading trades in tech. it's not to go completely underweight tech but i think that tech is going to face a decent amount of headwinds in 2022 in a rising-rate environment, in a liquidity-strained environment as we move through the year. i think it's important to, as an investor, look at what you're overweight as a sector and make sure you're positioned for what's going to do well in a reopening and in a rising-rate environment. i don't think that's a lot of tech stocks. >> if those are the sectors that are going to lead and capitalize on a reaccelerating economy, i guess that means you figure the market can live with higher bond yields if they're coming for that reason. where do you think yields ultimately get to? >> yeah, i mean, definitely parts of the market can live with higher bond yields.

we're going to see volatility early and often in 2022 because of those movements in rates. we've seen a pretty aggressive move in the ten year just in the last 24 hours. the market has trouble digesting that, what's the pace of it going forward? there are sector that is can do well in that environment and financials is one of them. some of the industrials are another, and small caps. i agree with that take small caps can do well in an environment that we're expecting to see in 2022 not only for the sector makeup, you've got health care and financials as the biggest sector in the small cap index, both of those either have a tail wind from rising rates or insulated from rising rates. small cap has a lot of its revenue coming from domestic sources. they're insulated from that as well >> you do look at the global picture as well. does broadening leadership also mean non-u.s. equities have a shot >> we're bullish on non-u.s.

equity emerging markets still have a lot of risks around china. we would be looking like taiwan and korea or mexico. we like international development. in this higher inflation trade it should be good for european markets. our top sector pick for the year is energy actually because we see tight supply, strong demand based on an emerging markets recovery and very good producer discipline. these producers are focusing on returning cash to shareholders rather than just on aggressive volume growth like we've seen in prior cycles. >> is that premised on much more upside in the energy commodities themselves. >> we think oil prices from the 62, 100 range. we like the structural behavior in the sector. companies returning 75% of cash to shareholders could raise their dividend and is capping

volume growth at 5% or less. >> sarah and liz, thank you very much appreciate the time today. >> thanks for having me. >> thank you >> okay. in our final minute right now, let's take a quick check on the markets. it looks like we're going to open up the green. you're looking at the dow up nasdaq looking to open higher as well 28 points higher the s&p 500 up about 15 points mike, it's been a ball thank you. make sure you join us tomorrow, "squawk on the street" begins right now. ♪ good morning welcome to "squawk on the street." i'm carl quintanilla along with david faber and jim cramer ten year, 1.67 oil at 77 as the market looks past the record high covid case loads in the u.s we begin with a series of