good monday morning, welcome to "squawk on the street." tech under pressure once again as the ten-year flirts with 1.1. powell's confirmation here this week, q4 earnings kicking off with the banks on friday five straight declines, nasdaq futures are down 1%, despite early hopes that omicron may be

peaking on the east coast. >> take-two is buying zynga for $ $12.7 billion. and the ceo of gilead will joins us in a bit. >> it looks like that's the day it's going to bounce, and then rates start ticking up crypto teem to play a role in this continuing, and then most of the stocks you follow are down three, four points. they're just down. >> it was a rough week last week, to put it mildly you know, the indexes, as we

obvious say, don't tell the story. not really the story of so many technology names that you have pointed out, particularly the higher multiple names, but even those with fairly strong earnings and growth, significant growth, but nonetheless high multiples getting hit hard. >> i saw a downgrade of airbnb airbnb is doing pretty well, but doing pretty well is not inspiring buyers anymore i think one of the things that happened a we have so many companies that look like other companies, i can't keep track. software as a service for the x industry, and no one wants they stocks, david. there's no backing, they came public, and now to hell with them >> how long does that go on for? >> i'm thinking the people that

did these spacs, did they understand the way wall street works? you need analysts to stay behind them most of these company have no numbers. if you're any sort of fiduciary, you can't buy a spac there's no there there you're point about the airbnb downgrades is interesting. it is piper. they go neutral. they argue that at least americans are getting desensitized to virus headlines. they'll go back to traditional hotels, and as dr. gottlieb suggested we might be seeing peaking cases. >> if you look what's happens across the east coast, new york city, washington, d.c., maryland, probably florida as well, may have already peaked. you're going to start to see that in the statistics this week you'll start to see the epidemic curves bend down

hospitalizations are down relative to cases, but cases are up substantially, so many of the hospitals on the east coast will reach or surpass their previous hospitalization totals maryland, maine, d.c., all 10% below the peak >> i don't want to minimize this, but it's become something like, people are like, okay. no one -- what i've been calling in high school sweating the program. i mean, david, don't you find -- you probably saw people in various parts of your work they have a runny nose, you -- >> and they did. >> they say they tested -- i gave it to carl. i tested like seven times, sat down next to carl, it doesn't matter we don't know when it clicks in. >> it doesn't help if you have three shots and you

don't have that much to be concerned about, you may get sick, but highly, highly likely not to end up in the hospital. it's hard to measure exactly, but a significance percentage are people who went to the hospital for something else, and then tested for covid. that's not why they were in the hospital >> led me go back to the airbnb. now we're told to sell airbnb. people are saying i'm not playing this silly game. i'm just not going to be involved you have retail stepping aside. >> i was going to ark just as you were talking about it.

>> yell, carl, no one thought the era -- these stocks have been going down for months, and nobody cared suddenly people were like, wow, these are bad points b of a had a note over the weekend. fundamentals have been slobby. >> we've been through this for months >> a lot of those are doing well, but it doesn't seem to matter. >> maybe you're looking for more reasons to sell. that's just yet another one. >> crm has been tight as a drum. there's not anyone indicating things are weak. >> ashanti was on, and yesterday

suddenly people are looking at price targets everywhere so, i mean, i find, carl, the difficulty i have, if i'm just going to look at the ten-year, what edge do i have? >> i have no edge. there have been times when i was a hedge fund manager, no, jim, it's the 30-year >> i bought mirror for my daughter it comes in a couple pieces. i can't lift it. it's been sitting in the hallway the last three weeks you have -- if it breaks, it's

like, i'm done. >> you have to hire somebody to come in. right. that's suboptimal. it's easier for me to high a yoga instructor to come in >> there's lululemon there some comments from the ceo and not being helped by this downgrade of nike. nike has just been a pinata. it was a surprise to the upside. my god, that's a really bad charts there's a lot of really bad charts, which begs the question, where is it time to consider >> you love this joke. it goes back months, right our zynga jokes. >> is it too early

months, it goes back years carl. >> i think zelnick changed the whole narrative. >> we used to talk about -- it was right, about was it too early. >> but if you like that farmville? >> i don't play farmville. >> they just play candy crush. >> candy crush is owned by microsoft? >> no. >> my wife is watching the "mayor of kingstown" and a lot of people multitask. >> i've watched it i'm not watching the kingtown. is that on paramount -- >> paramount plus. >> the name you wanted to own this year was discovery.

it's not because of -- >> how about viacom today. >> jessica reef got involved last week. >> i call her that -- >> let's get to the take-two deal, guys 9.86 a share we see colallers, but -- you're going to have that -- take-two looks like it will be down as much as 2%, but that will not impact the overall value of the deal, at least or until -- it is below the 156 of the bottom of the collar you will start to see a bit of value erode. the ratio, though, the collar is 156 to 181 or 182, therefore the

ratio changes to maintain the of 36 in -- by the way, jim the all-time higher is higher. it was -- >> i'm sorry, right. the fact is it's a big discount. >> well, 64% premium -- >> versus six months ago >> yeah, at the same time there were a couple things that are quite shareholder-friendly for zynga shoulders. a 45-day go shot, i'm told with people familiar with the situation. is the reason to ask strauss about it, they didn't shop it, there was no competitive process. typically we see those world trade center go privates and it requires a vote on both sides. you have the collar, so you can argue quite friendly to a

certain extent for zynga shareholders, but does this bring another wave of consolidation within this instrument in not necessarily amongst the biggest. activision has had its own said of problems, ea, now take-two. but at the next level where there are a number of aches. >> is it because they needed a good mobile presents >> yes, but -- >> i think it's been terrific for them >> they missed their deadline this year over the new games that's the kid of test on wall street. >> got to feed the beast, no doubt about that. >> yes. when we come back, a very busy week at the jpmorgan

healthcare conversation. that kicks off today there's futures. more "squawk on the street" in a moment ♪♪ ♪♪ ♪♪ at vanguard, you're more than just an investor, you're an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner. wondering what actually goes into your multivitamin? at new chapter,

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dan odea, i want to ask about remdesivir, as we're in the thick of omicron right now we've been hearing a lot about the potentially for this to be used similar to the antibody dryings, where if you get it early, it can be helpful >> thanks, meg, thanks for having me. remdesivir has had a major impact upon this pandemic over the past now close to two years. it is the standard of care in the hospital setting in fact three out of five patients administered to the hospital are receiving remdesivir that's making a big difference for patients it's getting patients out of the hospital sooner, stopping them going on to more severe consequences of the disease.

this is a major impact, particular at this time when hospitals are under such stress. importantly, it's working across all known variants today, including omicron. thanks to the investment, we have adequate supply, and, you know you also mentioned the new data that came out in the "new england journal of medicine" just before christmas, that it's close to 9 on% effective, stopped patients from going into the hospital setting this is making a big impact. we certainly look forward to making sure that the nih guidelines that now have it in the outpatient setting are communicated to clinicians and hospital centers to provide yet another option for patients with covid. >> it's even more important now, as we have lost so many treat options in two of the antibody

drugs. dr. fauci has talked about it as being a luke -- but it's three days much intravenous administration, and we saw how different it wass it was for an even one-time treatment. >> i think the antibody drugs have help to make sure the outpatient settings are more capable than, say, 18 months ago. i would say that, you know, with 30 years of experience, gilead has a lot of experience in knowing that we're going to need multiple different options in the outpatient setting, and in the hospital to really attack covid and bring it to its knees. you know, i think it won't be appropriate for all patients necessarily, but for those centers that are -- that have outpatient capability, this will be a very important tool

and in addition, meg, we're also working on an oral form of remdesivir it's going into early stage trials now, and what we know, for sure, after 30 years of experience in hiv, is that we're going to need a lot of different mechanisms to attack this virus both in the hospital and outpatient gilead stance firm and committed to make sure those thamps being available. >> oral, are we talking a tablet that you swallow >> we're talking a tablet that you swallow. we decided that given the facts that our tablet was about the same stage as the inhaled version, we're putting all our resources into the oral version. when one thinking about our -- you know, legacy in hiv, with a disease like this that mute yates frequently, and is involved in large populations,

we're also thinking this had neat multiple different medicines, perhaps for a patient to really be effective against all the potential variants so many of our -- have two or three drug combinations in a single pill. that's our strategy longer term. not to think about oral remdesivir, but combining that with poenchally other types of ways of fighting at the virus, to get us into a stage where we can manage this disease on a daily and yearly basis. >> of course, you're working in other areas as well. one area is your cancer drug, and an expected readout of a clinical trial in breast cans ser. what can you tell us about the timeline for that? is that when you're still expecting it and your confidence in what that

will look like this is a real ly important tim in gilead. we're evolving into a company that has a leading portfolio in anti-cancer medicines, which of last year alone we had five fda approvals, four of which were in cancer one you mentioned is a medicine that brings an anti-cancer killing agent directly to the cancer cells we have seen actually in late-stage breast cancer, hard-to-treat late-stage breast cancer, is already approved for being used and more that doubling their survival. this is a medicine to be used across many different cancer times. now, the read outcoming up you mentioned and another type of -- many other cancer types as well,

including lung cancer, which would potential replace chemotherapying. we announced a collaboration this morning with merck, look to go bring it in with the pd-1 agent into frontline after announcing a collaboration with them there's a lot of promise here, meg. we expect more than 20 new indications for cancer medication between now and the next dedicate. >> all right dan o'day there's a lot of exciting information there >> thank you. and we continue with stan e erck in the next hour.

strauss zelnick is sup with us, but take a look at futures, the nasdaq is down four straight, close to a three-month low. don't go away.

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>> announcer: the opening bell is brought to you by -- before we get started with trading here, we'll see if it's another different week for

stocks, at least if you happen to open them lucid hanging in there, actually >> a lot of people are short lucid. they were thinking this january expiration, that included the saudi invest fund -- that's actually a strategic investment, meaning it pays for them to stay >> the saudis had a big stake, an important part of putting that deal together, back when it was a spac, the relationship with the saudi, yeah a lot of the hedge funds are short betting -- they're saying they've except the sectations really low, because the nasdaq is bad, lucid is down anyway

it hit its ipo price, last week. >> it's the one, as jon that is likes to call it >> not a lot of bones to that. boy, i've got to tell you, the damage that's happening in the market is totally amassesed by the facts, which make the dow jones average look so good lulu was an institutional favorite i just find this market is treacherous. we need to see some stabilization in megatech, and we have not. by the way, at the big board this morning, it is the jpmorgan healthcare conference. we are going to get jpm and citi and wells and blackrock on friday how much is riding on it >> i think a great, but i also think that, you know, this is

one where every single day that the ten-year goes down, people get excited about this group they have to deliver incredible numbers. david, the expectations being created by the ten-year will make it so bank of america has to say we're going to make a ton of money this year they're a responsible company. i don't know if they can do that. >> you don't you don't know if they're going to actually articulate it. >> brian moynihan is so not a hype artist. i think they have come to know he's a straight shooting guy that's just not his style. >> the name that's impend fitted the most is wells fargo. it's up almost 16%. >> wells is different. charlie scharff can now say i've fired everyone there's no one left.

it would shock me if there was anyone on the senior team that is now left. so that's charlie scharff, ceo, has a very compelling story to say. at the same time, you have to remember in 2018, this stock was at 60 before janet yellen took a look to it all it's doing is getting back to where it was in 2018. the rest of the banking have stored. >> by the way, speaking of all this, it is the same old story this morning, financials and energy they say it's going to be a good year for card issuers relative to the s&p. >> i think it is i think that was a spend call, that 13e7bding will be up this year i think that's a good call the stock has had a decent run the fintechs themselves, we saw paypal -- i think we ran a

headline that said paypal discussing whether it might even do crypto. i mean -- stable coin. you can't put that out either you're going to do that our not. they were strong on thursday, weak on friday they are a nightmare oh, look at that. >> nvidia has given up another 4% today, gjim. we've been talking about cloud, software, semis, relative to that, have held up, as far as the fundamentals go. >> nvidia, david, you know nvidia has still not declared that the arm deal is over, but they had a great present tuesday, completely ignored by

both the investors and the analysts i mean, i watched them t. they were quite impressive. people want out. is it doesn't matter high multiple. >> again, is this going to be something we're talking about three months, six months from now? is it going to be something we're talking about at the end of the year? is it all depend president on rates, or do we hit some sort of point at which earnings come through? >> and with incredible top-line growth, at least as of the last couple quarters. i mean, alphabet which had a very good year last year, is down over 7% so far this your.

carl, let's say rates were back to 175 jay powell said, look, omicron, we really don't know the damage it's doing, so we're going to keep looking, and then you'll get a big reversal nvidia is a great secular growth name, but i think people say i'm not waiting for the call just get me out. we're going to hear from powell tomorrow, and brainard, some may argue, on thursday, constint a great note last night, it does qualify as a two-plus standard deviation movement. >> you know, this game is like playing the over/under the guy who goes to five is staking out the territory of

multiple rate hikes. it's almost as if there's a leapfrog game going on until they bim so cheap, you're saying, why am i selling a value tech name? we're not near that. particularly, but also on cybersecurity where people are fleeing, as if the bad guys have lost, and you know, the bad guys haven't lost. >> no, but those are names that are extremely high multiples they do have significant growth rates, but this is not a market for that particularly with rates moving higher. >> i get a lot of calls in the lightning round, i hate to say it, but no one is going to buy it. >> it reported d. you know, david always loves it. it's got an ebitda that looks pretty good there.

>> no, they don't care about can cannabis the same way they -- >> if mate damon does an ad, then we know >> who is the future favorite? >> future favor? the bold, not the brave. it's possible -- i love mad damon, but that is literally -- who is that guy he's pointing to who is that guy? >> magellan made it. >> who is the guy climbing up something? >> i think that was mallory. >> meanwhile, take-two is down 12%. >> well, the future -- zelnick

says it's multiple gaming he's coming up we're not going to talk about ads we're going to talk about the deal of the day, as he is buying zynga. >> you didn't invite hem to the tilray call. i think that sara and wilf have. they have. >> late, by the way. i do i remember this. irwin is irrepressible >> we've been watching yields, as we're watching the vick as well, above 21, a busy week, of course, later in the week. we're back in a moment

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shares of take-two interactive are down sharply, after announcing its plans to buy zynga. strauss zelnick, it's good to have you with us what do you tell your investors as to why this is the right thing for take-two to do? >> it also positions us to grow our collection of owned intellectual property. one of the things we lovett about zynga is, like take-two, they have a multiplicity of great titles, what they call forever franchises we think that's a great opportunity going forward.

we just announced this, but we expect a combined company to grow top line about 14% annually >> by improves the quart of our, so we think it's extraordinarily exciting >> there's sometimes a natural arbitrage, but it's still down almost 13%, strauss, what do you tell those shareholders right now? the math is the math if you solely focus on the stock

components and the premium paid, you can understand however, we're building this company for the long term. while one would never want to be cavalier about one's stock performance, because there are real investors trading, we're trying to build a business over a long period of time. we've paid attention to creating value for our players, our colleagues, more importantly for our shareholders that's worked out for a very long period of time. we believe it will work out here, too. >> one thing i was confused by, this is normally a level if you weren't doing a deal, you why books the stock. what do you do with the exist inchally crisis saying my stock is down so low, i would love to buy it

of course, within a range. we did do a buyback recently as you know, we can't project our intraday movements we have to make long-term strategic bets in the fullness of time, i believe this will prove to be a successful one >> there has been some disagreement about how much it matters, say there have been some new defects in grand theft auto, and you have held this we won't put out any game before its time can this smooth out a longer-term view that also adding mobile to make your earnings less episodic >> this will give us a larger, more diversified financial and

creative footprint wrafs to the gta trilegitimate, we had a glitch at the beginning, and that was resolved and the title has done just great. so we're very excite d there wa also a 45-day go shop, not necessarily typical of a deal. why is that excluded why is that something you agreed to >> look. zynga's board requested that the details will be filed in the next couple days we are protected in the event the deal does not come our way

in terms of a breakup consideration. we think this deal makes the most sense for shareholders. my understanding is there wasn't a competitive process. so this protects them. >> do you expect another deal here -- >> very heard for me to say. >> what about the landscape overall, in terms of what you have now done with this deal how are you positioned with those competitors? we've been saying for year, that the one burden we couldn't resolve organically was scale. to go competitive, to address the most interesting opportunities in the future, and to deliver competitive operating

mar marginens, we needed scale. we're now on a pro forma basis at $6 billion in net bookings, growing 14% annually for the next three years that puts us at a position where we're highly competitive in the business, and i think scale will matter i think it matters more than ever. >> you mentioned culture there's always a concern on the part of shareholders perhaps it's being plea flected, that it's difficult to integrate. what assure you do you have that you have to undertake this to make sure the cultures do mesh and you do get the synergies

that are so important for this deal you're talking about. >> fair questions. we have gotten to know this management team over a long period of time, a very friendly combination. one of the key issues was, do we fit together culturally? we're so excited that they're going to run the zynga division, which encompasses the operations insigh the take-two family, and we're all on the same page the way we need to integrate the real win is creating new revenue. we will also be able to reduce costs, but the exciting opportunities are all about taking our existing titles, marketing them more effectively.

we have great deal intellectual property that so far has expressed on console and pc, not been brought to mobile that is not reflected in the revenue synergies that we discussed. that's to mobile and that is not reflected in the revenue synergies we discussed. that's incremental. >> i was out at nvidia and it's clear that jensen has unbelievable ideas about the actual -- i'm talking about life-like, maybe more than life-like characters where you can insert them into current video games. where are you with using the new chips that nvidia has that make it so it's not just life-like but pure reality >> it's great question we haven't talked about specific chip manufacturers and, you know, nvidia is a spectacular company and now a favorite of yours and it's been a great call

i've said many times within the next 5 plus years -- always hard to call the exact timing -- we're going to be able to make interactive entertainment that looks like live action inside a computer not all titles will want to look that way in the same way not all motion pictures is live action, there's different creative expressions in interactive entertainment in certain instances, for example, sports games, basketball, i think you can expect that they will look more life-like as a result of what technological advances are enabling our creative teams to do combined, we're going to have 8,000 people who developed video games in the zynga and take two operation. >> kind of on that note to an certain extent, i would include yours amongst them get a very tough review these days from either the doj or the ftc, what

assurances can you give shareholders that you're going to be able to pass the review coming your way on an anti anti-level >> we're still smaller than our biggest competitors, a diverse business, a huge market in terms of the overall market relatively small enterprise. we feel cautiously optimistic. >> strauss, appreciate your joining us on this important day for your company thank you. >> thank you for having me take break here this morning. s&p is working to hold 4600, which we've not breached since december '21 banks, s&p banks, hit an all-ti hmeigh and bitcoin below 40k. we're back in a moment.

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let's get to jim and stop trading. >> one of the most important stocks to watch is dell. dell is meeting this week and there are terrific comments we've been getting about dell and how cheap it is. today is bernstein i happened to think that watching dell is the exact

opposite of watching what's happening in the high multiple text the proof in the pudding about both the relationship with bonds but also the notion of tangyble makes things, customers, tax flow, money in the bank, that's what people want watch dell dell is going to be the determiner about whether there's going to be a reversion to the octaves of the world dell a remarkably good company. >> bernstein ups to outperform this morning today. >> i have dexcom a remarkable stock it's tight it's googless monitoring it's really invented the category abot labs has something called libra too. medtronic, used to be a powerhouse, now the subject of multiple downgrades in the last few weeks. people will start questioning the execution. >> another one, btig goes to

neutral. the pipeline there for a while. >> that stock was down very, very big i remember a couple years ago it was under 100. seems like it's headed there again. >> jim, a lot to watch this week. >> thank you >> buckle up we'll see you tonight "mad money" 6:00 p.m. eastern time. as we go to break, the dow down 365.

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>> good monday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber here live at the new york stock exchange we have a 2% decline on the nasdaq today and the dow is down almost 400 the jpm health care conference is under way meantime. we'll talk to the ceo ceo of nov novavax ahead of a busy week. >> we are 30 minutes into the trading session, some of the big movers waerpg watching, lululemon expecting q4 earnings coming in at the low end of its projected ranging, due to staffing shortages and shortened core store hours as covid cases surge in the u.s

plus deutsche bank upgrading viacom cbs to buy from hold based on upbeat prospects for its streaming business, now down a little over 1% finally we will end with the deal of the morning, which is take two interactive buying zynga for $12.7 billion depending on how you look at it. we have a lot more on that move, that deal, later this hour you can see, though, shares of take two are down 12%. zynga soaring more than 46%. we're going to turn to the broader markets. stocks moving lower to start the second full week of 2022 joining us schwab cio omar and morgan stanley analyst brian. good morning to you both omar, i'll start with you. the fact that we have another day with a lot of red arrows, we've seen this big rotation from growth into cyclicals as interest rates have moved higher and moved higher quickly i feel like we've had this conversation and seen this playbook before, probably a

couple times in 2021 alone how sustainable is this move we've seen and how are you counseling investors right now >> good morning. and thanks for having me a few things yes, you're completely right these sort of headfake changes into the business cycle have been common over the last two and a half years, but we have seen consistency in many other areas. now, what i think is different this time is that unless -- unlike the last time we talk about the potential rotation, is that we now have higher inflation that we actually see and observe, we also have the prospect of higher interest rates and a reduction of the fed balance sheet. those two variables are different from the last time that we actually spoke about cyclical rotation and cyclical leadership the biggest part in this particular phase or moment is the fact that investors just don't know how to price, you

know, the potential for those higher interest rates. that is very well confirmed by the fact that last week alone, we saw 20 plus basis points moving the 10-year yield which, you know, in equity dimensions is not a lot, but you think about that move and what represents over the last 2 1/2 years is more than a deviation. >> brian, what we have seen is a sell-off in software, internet, growth, some of the more speculative names that trade publicly how low can we go from here when you look across your coverage universe >> good morning. thanks for having me you know, i think when you look at the sell-off in the space, a lot of the higher multiple enterprise software names have been impacted as well as some of the higher multiple consumer names like snapchat, pinterest, et set ter rap i come back to the far more oriented big cap tech we are in a situation where companies like alphabet,

facebook, amazon, these are companies that now, because of last year's performance and now the initial sell-off, are sort of trading at low double-digit forward free cash flow multiples for what's likely to be high teens to maybe 20% free cash flow the next few years. we go through these periods of reset and tur beaulation, but i do want to emphasize, big cap tech is not that expensive relative to history or relative to what we think is going to be the forward growth potential. >> brian, to dig into that more what's on sale from your standpoint right now what should investors be buying? >> we are very bullish this year on amazon. we think uber is under appreciated for the potential cash flow to come from the ride share business then just to come back to the online advertising industry with alphabet and facebook we think the overall online advertising markets continue to be strong heading into 2022 and so those are the areas i would look i would look at amazon, i would

look at uber and then i would sort of step back and say, what's still happening in online advertising and the answer is more dollars are still moving in the online ad markets faster than before and in larger quantities than before, and so these big cap companies like facebook and alphabet, we think also scream very attractively in a valuation perspective. >> omar, we're going to learn more, we think, about the fed's thinking later in the week, but there have been some forecasts this morning for four more hikes, balance sheet runoff than expected are people beginning to get over their -- in the forecast, there's so much about labor supply that is unanswered right now? >> yes carl, this is probably the biggest source of uncertainty in the market today, is just trying to anticipate what the fed moves are. i think if you look at the different set of forecasts around the street, you know, they all assume that fed is behind the curve and therefore is really just about that

reaction function that people are trying to speculate about what the fed might or might not do you know, we all have to remember that the fed mandates start to look very clearly at what the labor market is actually doing and how close we are to full employment i think based on last report that we see, i think the biggest understanding is how the fed is going to think about the new curve and what does that actually mean for them to try to keep inflation under the 2% target when you think about all those components, yes, the march seems to be an overall consensus and completely pressing to the market, it's starting to raise rates and the question whether or not it will be 3 or 4 with a lot of that related to, you know, a lot of what we're going to see this week on cpi readings but also in general how the labor market continues to strengthen to the extent that the fed feels that we're getting close to their definition of full employment. >> so omar, we know the fed's tightening remains to be seen over the next couple months how

agreesly to your point and what that data brings to us and how it colors that policy, how much onus does this put on earnings as we have a new earnings season kicking off now? >> well, i think, you know, the good news about this is that corporate america has still significant, strong balance sheet with a lot of cash in it while there has been withdrawn a little bit, the projections for growth are still good, not as good as they were in the last year and a half, but still pretty solid for the remaining of this year i think the biggest part of what we're seeing today and we're going to see in the earnings season in the first quarter is that this stock dispersion is probably going to be the biggest we have seen, you know, in the long while, where we actually see how different corporations have put into their forecast, you know, what the new level of rates might look like. i think that's still between analyst valuations and everything else the dispersion is going to be bigger. >> okay. gentlemen, thanks for kicking off the hour with us omar and brian with the s&p down

1.5% right now. let's get back to meg tirrell covering the jpmorgan health care conference all week and joins us with a special guest. meg? >> david, thanks so much novavax ceo stan erck joins us now around jpmorgan fresh off your presentation. thanks for being with us you're gearing up to file in the united states for your covid vaccine. tell us what you think the prospects look like for your vaccine here in terms of any folks still holding out for it as a primary series or booster for potentially the fall >> well, the whole thing is coming together and we've got several regulatory approvals already, we're in now 170 countries, and we've got ten regulatory agencies including the u.s. we filed for and i expect in the next 90 days we could have all ten including the united states. i think we harmonized our filings.

we've got good responses to the fda. they have to review it we have product being shipped and we have product being shipped last month to indonesia and now to europe. and we're actually vaccinating people in indonesia right now as we speak it's all coming together and we're excited. >> and do you expect, you know, here in the united states that the initial emergency use authorization will be for just as a primary series or could you get the booster clearance at the same time? >> it's possible to do both. and i think the demand for the vaccine -- and we've also got -- there's a pediatric trial that we're going to be filing this month and so there's all three of these primary -- you look at my e-mail box, you'll see that there's an incredible demand for people who want to get into our vaccine. so i think there's plenty of demand in the u.s. as well as a global demand.

>> how are you looking at whether you need to switch over to that omicron specific strain and when that might need to happen >> no. that's a great question. we're going to decide it when, you know, as we talk with -- as we get more data, but as we talk with regulatory agencies and health care experts, it's going to be a hard call because our -- actually our 2373 vaccine works well against omicron, and it has very broad protection. that's one of the hallmarks of our vaccine, is we get protection and we've been able to show it in our phase three clinical trials that we get protection against variants and we get a very potent immune response against omicron data will tell us whether we'll make that switch over or not. >> do you feel, stan, that we're in 2022 now, still waiting for the u.s. to clear your vaccine,

it is a different technology than the three currently on the market in the u.s., could you use more help from the u.s. government either in terms of manufacturing support or even in facilitating a partnership the way we saw j&j and merck get put together, for example? >> i'm not worried about hindsight. we've got capacity and global capacity to supply the u.s i don't know that it's productive to talk about whether someone could have done something better or not in the past year. >> just touched on this, it's morgan, there are the mrna and viral vector vaccines on the market here in the u.s., the fact that novavax is a protein based vaccine which is a technology or based on a technology around for much longer, you said you expect there to be a lot of demand here in the u.s. and globally where do you expect that demand to come from when you do have countries like here in the u.s.

or in case of israel, tripling down even quadrupling down the technologies >> right well we have boosters so as i say three markets, there's been a -- the pediatric market which is a very large market, there's been some hesitancy about recommending the mrnas for people under 30, for instance, and i don't think, you know, so that's a market that we can go to we've got good boosting data against people who have been hesitant, that could be used for people who have been hesitant for just because they don't understand mrna vaccines and they do think they have more confidence in ours, and i think there's also, remember, there's 30% of the u.s. population that hasn't been vaccinated now we're not going to get all of those people, but that's a big market in itself >> so stan, just to follow-up -- >> you mentioned pediatric -- >> sorry i'm sorry, meg, just to follow-up on that, does that

mean you're going to more directly market some of the people who have been vaccine hesitant >> well, we will be -- make the product available to people who have been vaccine hesitant for sure. >> stan, i was wondering what pediatric population, which you just mentioned, i think you're planning to file fairly soon for 12 to 17-year-olds, but you haven't yet begun trials in younger kids is it right that your vaccine, perhaps, has a more tolerable safety profile as to when you get the shot you don't get the side effects you sometimes do with the mrna, the reactive genic side effects, that could be something a lot of parents want to see, but how long will it be until we see some results in younger kids? >> you'll see the results for kids in the next 30 days or so i think that all along, we've -- when analysts have compared our vaccine data, our safety data, to other vaccines, we always come out on top on tolerability.

that's good. i think parents will see that's a positive aspect of our vaccine. >> next 30 days, which age group is that? >> 12 to 17. >> i see younger kids -- yeah >> and we will start based upon that data, we will start a trial and go down 5 to 12. we will be stepping down the next six months. >> got you as parents of kids under 5 we are still waiting, stan. i have to ask you about the combo of your flu vaccine and the covid vaccine. this is something that i know a lot of folks are excited about what's the timing for that >> well, we're going to get data and the data are coming by the end of this quarter and based upon the data we'll have the pathway to start a phase 2 trial that will lead to pivotal studies. we've got a year or two before the vaccine can go into a pivotal study. >> all right

stan, thanks so much for being with us this morning off your presentation at jpmorgan we look forward to all these updates. >> okay. thank you for having me on. >> guys, our coverage continues next hour with the ceo of merck, rob davis, he joins us on "tech check. we'll send it back to you. >> meg, great stuff as usual meg tirrell. selling accelerating here. dow is down 500 and we have reached 4600 on the s&p r e foth first time since december '21.

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we've been showing you the declines to start the week dow down 500 all sectors have gone red. we did have financials in energy in the green at theopen. vix is troublesome above 22. we're going to keep our eye on all of it and rates eaahd of a lot of news in the next five sessions don't go anywhere.

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watching the crypto space bitcoin down to the lowest level since september. ether at the lowest level since october 1. joining us the mayor of miami, the city racing against new york to be the country's crypto capital and the mayor, like mayor adams, taking salary in bitcoin for a bit. good to have you back. >> great to be with you. >> i guess the obvious question is whether or not the price action and these multimonth lows does something to change your strategy regarding crypto? >> not at all. for a variety of reasons the first is, when you look at a

crypto as a function of pricing against the u.s. dollar you're still getting 40,000 u.s. dollars to buy one bitcoin, which is the market's way of telling us they have a lot of confidence in the bitcoin network. when you look at the year over year performance up in 2021 over 100% i'm not day trading bitcoin and not worried about the day-to-day price fluctuations i'm focused on the fundamentals and how it can change and reorder our society going forwarded. >> right i do wonder, i mean, there's plenty of use cases and arguments to be long crypto in jenl, but do you believe that the argument it's an inflation hedge has taken a hit? >> you know, it remains to be seen i think it's a little too soon to make that determination i think it was definitely an inflation hedge and should continue to be an inflation hedge. when you consider not just the inflation hedge but the fact that there's so much in the market, generally speaking, because the u.s. government is

printing money and because the fact that the bitcoin is sort of the antithesis of what the fed and federal governments do across the world, by printing money, dealing with pandemics, or to deal with other kinds or just bad policies, so it remains to be seen whether this is something short term, short-term sell-off, or something that's more sustained in the fundamentals. >> right as far as the effort that not just miami, but lots of cities are doing, to attract crypto talent, you've got miami coin going on, the public investment in making the industry work. are you beginning to game out what you do if prices really fall in a serious and long-term way? >> not really because when you think about what happened in the last year, we've got, you know, ftx that made 200 million dollars, to rename the arena here in dade county, resulted in a gun reduction program paid up front, and we had a historically

low homicide rate in part as a result of programming some of those funds to directly deal with those issues. secondly, we have a tremendous amount of jobs that have been created in the last year alone just from some of these exchanges like blockchain.com and others coming down here and also crypto funds coming down here this has been an economic boom for the city job creator. a separate and apart from the fundamental analysis of the values of these coins, you know, from my perspective this is the second i think of a nine-i think g -- inning game. it doesn't both mer it's experiencing some declines right now. >> mayor, i just want to dig into -- i mean you talked about bitcoin and certainly you're not a day trader, but whether it is bob bitcoin or the other assets, miami coins specifically, given the fact that we have seen these recent down draft in this asset

class, are you realizing losses on the balance sheet right now, or is this still a revenue generator for you? >> it's completely a revenue generator. it's not on our balance sheet. this a collaborative project we did with an organization and essentially what happens is, as the miami coin is mined, it creates a benefit for the city this is not a balance sheet item at this moment this is something completely beneficial it's generated close to 25, $30 million of funds in just less than six months and we're doing what that is, staking it, meaning we're essentially lending it out and 10% of the yield of that transaction is going to be paid out to all of our residents in bitcoin this is a complete benefit no detriment or risk to the city >> yeah. how does this factor into budgeting then how are you thinking about that in the coming fiscal years and how would you expect that to grow if you do >> right now, it's not a function of our budgeting because we're just going to give it back to our residents

but in the future, depending on how big the yield is ap how much it's generating, it could theoretically, depending on the market camp, sue plant our taxation function, $475 million a year, depending on the growth rate >> mr. mayor, it's david faber just a quick move to vicovid if you don't mind curious what you're seeing on the ground in miami right now. people can eat youds outdoors, but in terms of hospitalizations and impact on the local economy? >> in terms of case counts and hospitalizations like everywhere across the country, omicron is continges you and a lot of people are not able to test and we're expecting our testing capacity dramatically. approximately 75% of the people hospitalized are not vaccinated so we're pushing a pro-vaccination message. 80% of our residents are vaccinated so that's important

and so what we're seeing is we're seeing higher hospitalizations in part because the case infection rate is so high, it's significantly higher than its ever been so that's driving hospitalizations, but a lot of hospitalizations about 50/50 are people being hospitalized with covid as opposed to for covid. >> right we've heard that as well, people actually go in for something else and test positive for the virus, so it's not necessarily indicative of the virulence of the virus itself >> sure. that's absolutely correct. >> mayor, if i might on a broader subject, the economy itself in your city, i was a visitor recently, it's booming everywhere you look you see the signs of it. miami does have a history when it comes at least to the real estate market of kind of boom and bust i wonder, do you feel like your city has hit a scale velocity where the rate of growth is so high it will continue for some time to come >> i do.

because it's not the typical boom and bust you describe accurately in a real estate cycle. it has to do with bringing in industries that did not have an enormous stronghold in the city. one is tech and the other finance. what we're seeing is we grew over 200% in venture capital dpleels one year and moved about $200 billion worth of assets under management companies to the city in the last 16 months that's resulted in the fact that we have a 3.7% unemployment rate, which is almost 1% lower than the rest of the state we're number one in the nation in tech job growth, number one in tech migration. we were ranked the happiest and healthiest city in america so, you know, things are going very well in our city and we want to replicate that model nationally >> yeah. you keep showing up on all the top ten inflow cities in terms of migration it's been fascinating to watch finally, i wonder, if omicron is sort of the last push that we have to get through as many

believe, do you expect international tourism to show a big jump, maybe tail end of q1, kwoo q2, something like that >> we saw a bit of it when the restrictions were lifted and we saw, you know, a lot of activity from south america, a lot of activity from europe, and, you know, i think people from those markets, which tend to drive our economy, are clamoring to get back and to be part of what they see as the new miami so i absolutely think we're there on top of, you know, this influx of people and capital we're going to layer on some international expenditures as well >> yeah. a lot of cities hoping for that for sure mayor suarez, always good to have you look forward to next time. thanks. >> good to be with you guys, thank you. >> it's time for our etf spotlight. we are going to check in on cathie wood's ark innovation ticker, arkk is the symbol there.

it's down double digits since the beginning of the year and by the way, today alone, it's been down over 4% you can see it down 3.7% right now. of course, speculative tech, we've been talking about it recently has been getting hit very hard and there are any number of names in that etf that would be falling under what you call speculative tech. five year to put it in perspective, but as i made the point many times, oftentimes you will see asset managers here she gives advice to etf, who really lose more money than they make over time. in other words, the asset growth is enormous after enormous periods of out performance, only to then hit a wall that has been the case of late but miss wood on a call that we're hearing about just moments ago was posted, 47-minute talk to her investors she said, quote, investor asset retention has been, quote, pretty phenomenal and said keep your eye on the prize. what's going on in the markets right now is ir rrational and

you're going steets turn sooner rather than later. the other side of what we've been going through, she says, is going to be the light bulb in her opinion. one key name in which miss wood made her name is tesla goldman naming that company a top stock pick for 2022. it also hikes its price target to 1200 but as you can see, morgan, that stock is still down about 1.5% now. time for a news update rahel solomon has that for us. hi >> hey, morgan, good morning here is your cnbc news update at this hour. negotiators for the u.s. and russia are talking right now trying to find common ground on ukraine. the u.s. warns that it will respond to any russian military escalation with severe sanctions. russia wants a guarantee that ukraine will not join nato head of that alliance the meeting will not resolve all the issues but does hope they will produce a process for more talks. the omicron surge has pushed

known u.s. covid infections above 60 million new cases averaging around 680,000 a day. they've more than tripled over the past two weeks deaths however are not increasing as quickly. they're averaging more than 1500 a day. that is, however a 16% increase. representative alexandria owe casa cortex, she's experiencing symptoms while recovering at home and novak djokovic posted a picture of himself with his team on a tennis court. he says that despite all that has happened, he does want to stay and compete, even though a judge overturned his visa cancellation, the australian government apparently thinking about trying again to deport him for failing to get a covid vaccine. morgan >> rahel solomon, thank you. a check on the markets as we head to break here all the major averages lower again today. the nasdaq is suffering the biggest losses, down 2.2%. the s&p down about 1.6%.

4601 the level there and the dow down 466 points. about 1.3% every sector in the s&p in the red with consumer discretionary, tech and communication services names suffering the biggest losses. stay with us. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

we continue to watch the sell-off, early morning low appeared to have just been below 4600 nasdaq leading the major indices. cloud stocks and fin technology with the biggest losses, cathie wood the arkk fund under pressure basis bob pisani has all the moves. >> the important thing is while this is a tech decline, 5 to 1 declining to advancing stocks. the sector, tech and even mega

cap tech not just speculative tech is weak today that's the key thing in general, the middle part, the industrials, energy, bank stocks, the cyclical sectors down but not as much, and more defensive groups, of course, like health care holding up even better that's not surprising in a risk off day. if you take a look at mega cap, yes, we do see declines here and remember, these are declines that are a little more severe than we've seen recently the trope has been the metaphor we've been using, mega cap tech is down, not as much as speculative tech that's true but today there's more damage. nvidia 25% off of its recent highs. some of the other ones like zylence 21% off its recent highs. the damage is starting to accumulate you heard david talking about cathie wood's ark, most of her funds, including her flagship fund, the arkk fund at the top

there, these are all 52 week lowes. almost everything she's launched in the last couple years sitting at a 52-week low not surprisingly the biggest holdings in those cathie wood funds the speculative as we call it, teledot, zoom, square, roku, twilio sitting at 52-week lows and suffering bigger declines than overall technology. there's pressure on tech and semis in general i think the bad news is the market is geared for a very, very hawkish fed and maybe powell can change that perception a little bit during the renomination hearings. i don't think so it doesn't seem like he's going in that direction but that's the issue here the good news, the economy is strong we're going to get terrific earnings reports the margins appear to be holding up not far from records. 12 or 13%. all this is pretty good news i think the issue, carl, is whether the positives for the overall economy and the positives for the cyclical sectors can outweigh the

negatives that we're seeing and, morgan, the sell-off in technology what we're seeing here is evidence that investors believe the money that was paid up for these cathie wood stocks was very extreme and as keep pointing out, cathie wood did not lose the argument. she won. she convinced everyone that these kinds of disruptive technology sectors were the way to go and everyone bought in the problem is, they drove the prices up very high and now there's a reevaluation as we see interest rates going to the upside >> some key context there, bob the fact that it is such a big week, you have the hearings with senior fed officials in the senate, two key inflation readings, and then, of course, you have the commencement of earnings season when it comes to the earnings report what is the key metric that investors are going to be honing in on is it going to be guidance, margins, something else? >> no. it's margins i'll tell you why. what is earnings what's the component of earnings what makes up earnings

earnings composed of revenues, growth, revenue shrinkage, it's composed of how much stock is actually out there and this is why we look at buybacks because if you reduce the amount of shares outstanding you're going to improve the earnings, then in the middle is margins. what is a margin margin is kind of what happens everywhere between the top line and the bottom line. and at this point, margins are going to matter a lot because if you can navigate the supply chain problem here your margins are holding up most companies are navigating those supply chain problems. but a lot of companies have very, very thin margins throughout this is why the cathie wood stocks are getting hit so badly. they don't make much money or their margins are very, very thin, so in a rising interest rate environment, historically investors are told to sell those kinds of stocks. that's what you really want to see here you want to see the price has to come down for the speculative names, but you want to see

evidence they're improving, not just their revenues, but improving their margins and ability to make money. morgan >> all right bob pisani, thank you. a good setup for here and what's going to be a big week with a lot of market moves, i suspect speaking of market moves, you have the selling accelerating for all the major averages with the dow now down 540 points and the s&p dipping below 4600, 4591 speaking of the s&p, take a look at some of the laggards. take two, the worst performer in the s&p down 14% right now we're going to have more on that deal coming up here in just a few moments on the show. you can see some of the other names that have been reopening plays like las vegas sands and retailers like the gap, leading the losses as ll n'gonyere.we have you want your data to be protected and secured. and your customers want seamless and easy.

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. we're keeping an eye on shares of take two interactive it is not having a good day at all, down almost 14% this after the company did announce its purchase of mobile game company zynga, the overall purchase price about 986 a share, cash and stock. the value is coming down a bit because even though there's a collar, it's actually below the collar the collar kicks in at 156 which conserves the stock value portion which is $6.36 a share and then $3.50 a share in cash the stock is getting hit also includes a 45-day go shop in other words, the opportunity for zynga go out and solicit other potential bids as well, should it choose to do so. you can see, you know, it's going to be owned anywhere between 67 and 70% of course take two shareholders will own that creating one of

the largest gaming companies out there. mobile, of course, is the key and we did have strauss zellnick join u chairman and ceo of take two and talked about how this is going to give the company kind of an opportunity to compete in a way that it hadn't in the past >> one burden that we couldn't resolve organically in the timeframe we would like to was scale, and to be competitive to address the most interesting opportunities in the future, and to deliver competitive operating margins, we needed scale we're now on a pro foe ma basis at $6 billion and growing 14% annually for the next three years that puts us in a position where we are highly competitive with the two bigger players in the business i think scale will matter given the opportunity that we see ahead. i think it matters more than ever >> you hear that a lot from ceos who choose to undertake a large

acquisition and in this case the largest they have undertaken given the respective market values of the two companies. although for its part take two is losing a good deal of market value right now. >> you asked his opinion about the shop he didn't want to go into who else might have interest rate. >> that's something you would want to see zynga put in if they're one of their shareholders will another company emerge to compete here hard to say. doesn't appear that activision, which already has king and issues of its own, would necessarily be interested. we do know netflix is moving into gaming, but again, you know, this was a 64% premium, morgan, at least it was to zynga's stock price. although it was not above its high which was around $12 a share some time last year. >> it was a great interview and i just think it's really interesting because this is very much a mobile play i mean you have webb bush saying

this is going to take take two twr from 10% mobile to over 50% and smooth out their growth given the fact that zynga is maybe a steadier grower because of the types of games that it has and the fact that it does have this large mobile footprint. it was only a number of years ago that zynga was going through its own remake, and its own transition because it had been slow to the uptick on mobile and now it has become a bet on the fact that that is the future and where so much of the growth is going to come within gaming to your point, you mentioned netflix. who isn't getting into gaming right now. it's become such a -- such a fast grower. the pandemic has turbo charged it it's now competitor to things like netflix with streaming. this is where more and more younger folks that are such a key advertising demographic are spending more of their time. >> yeah. and as you know, morgan, one deal can beget others, not necessarily, carl, going to see

consolidation amongst the biggest players, wonder ain't antitrust on that front, but will we see others pick assets up as well given he's saying now take two has the scale it needs to combine. >> fascinating good stuff with strauss this morning china did trade okay overnight, but we are watching rising covid cases there taking measures to prevent the spread ahead of the olympics, imposing a partial lockdown after two cases of omicron were detected. eunice is in beijing hi, eunice >> hey, carl ten minutes from now, 14 million residents in the port city of tanjian will have been tested to contain the omicron outbreak just outside of beijing about a half hour by train travel away so the chinese capital has been on high alert with the vaccination centers such as the one behind me urging residents to get their shots what we know so far is that two

cases have been confirmed in tynejian of omicron. 39 suspected there as well, two in onyang are linked to tianjian that makes electronics including iphones. what we don't know is the source and then how long omicron has been circulating in that community. the authorities have said that cases they detected are called three generation, which means that they've -- the infection has jumped human to human for at least two rounds now on social media, tee yan gin is described as the front line in china's battle against omicron in addition to the mass testing, 76,000 people have been quarantined. bus, rail and air services have been suspended and the officials are requiring that residents obtain permits from their employers or from community

organizers in order to leave the city tianjin said operations are normal and ramped up testing for its workers but hsbc has warned that omicron could become the mother of all supply chain stumbles with omicron so infectious in fact, president xi jinping has been repeated several times at this point that he intends to keep these controls very tight in order to try to make sure that the olympics are going to be a success carl >> yeah, eunice, back here in the states there's very big guessing game as to when, if ever, those zero tolerances begin to lighten up. clearly not before the olympics but people are looking further out into the year, national's people congress. is there any consensus where you are? >> reporter: i think most people believe that the zero tolerance approach is going to be in place for the rest of the year

mainly because president xi is going to be the middle of the campaign year, campaign in a chinese context, where there's supposed to be a leadership reshuffle, somewhere in october/november so, because of that and because he wants to be able to maintain his position and perhaps for an unprecedented third term or longer, most people believe that he is not taking any chances that omicron or any other variant can in any way undermine his goals. >> eunice, you know, i realize public operation may not be as important here, but the cities, enormous cities are being locked down is there any point at which you believe not just public opposition in some way or certainly people battling against the severity of the lockdowns but also the concern about the overall economy and the hit that the economy may take from these lockdowns. is there a point at which that starts to change the approach at

all? >> reporter: well, you definitely see that the leadership is sensitive to some of the public pushback to the zero tolerance approach. for example, in the city of xian, home to the warriors, there was a public backlash against the approach because a lot of people were saying that they couldn't get food because they were in lockdown in their houses and that the protocols were just so tight they weren't -- people were getting into fights with the police and, in fact, there was one woman who was outside of a hospital and ended up losing her baby so there are just -- because of that, you definitely see these situations happen and then the central government does react, but that usually means that the local authorities apologize, try to make amends and then eventually get fired >> the policy itself has huge

implications for global supply chains and inflation, eunice we appreciate that very much coming up in the next hour, don't miss merck's president and ceo rob davis as that jp morgan healthcare conference continues. close to session lows here with the s&p, 4589. be right back. competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is. workday. the finance, hr and planning system for a changing world. mount everest, the tallest mountain on the face of the earth. keep dreaming. [music: “you can get it if you really want” by jimmy cliff]

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for the foster kids who need it most— at helpfosterchildren.com ♪ welcome back to "squawk on the street" i'm dominic chu. stocks are selling today off to the worst start to the week here on the day so far on intraday basis, every sector is in negative territory led by declines in discretionary but utilities are relative outperformers. they tend to hold up better during bouts of volatility duke energy among those names holding on to some gains so far this morning keep it right here, there's more "squawk on the street" after this stay with us

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tillray. it reported earnings this morning. revenue that increased by 20% from year earlier on strong demand for cannabis products as we get earnings season kicking off this week, david. >> yeah. we're going to start getting the banks really soon. here we are again, morgan, thank you. that will do it for us on "squawk on the street. "techcheck" starts now ♪ good monday morning. welcome to "techcheck" i'm carl quintanilla with jon fortt and deirdre bosa today, tech investors, the nasdaq is down 2.5%. tech's rocky start continues touching a three-month low going back to october. we'll break down the action in just a moment. one trade that i