high a lot has to do with some ten year numbers we haven't seen in quite a while. tell you what's moving right now. blackrock's larry fink is defendsing stakeholder capitalism as not about politics and not because it's woke. he explains his comments to andrew in an exclusive interview straight ahead plus airport delays could soon get worse, several airline ceos issuing a warning over at&t and verizon's push to finally roll out those 5g networks that were delayed. it's tuesday, january 18th, 2022 and "squawk box" begins right now. good morning, everybody,

welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. check this out, you see at this hour dow futures down about 250 points but that's nothing compared to the nasdaq, down 286 points, much bigger on a percentage basis, s&p down as well by about 53 this is coming as you see a spike in treasury yields the 10 year up to 1.813% the higher yields, 1.04% for the two year all of that putting severe pressure especially on the high multiple stocks. that happens to be a lot of the technology stocks which is why the nasdaq is slhowing a decline the faang stocks you see across the board down by 1 to 2%. facebook down by about 2%, 2% at

the cline for amazon alphabet down by 2% as well. again, the high -- those high multiple stocks that react so sharply every time you see yields go up crude oil prices hitting a 7 year high after militants launched an attack in abu dhabi. the uae vowed to retaliate but this morning, wti up $85.25, something that's definitely getting attention this morning >> that it is. it is time for the squawk planner. earnings season, it is picking up steam this week we hear from goldman sachs today. tomorrow we get news from bank of america, morgan stanley, proctor and gamble and united airlines and united health thursday, take a look, american airlines, travelers and the first of the faangs we'll hear from netflix that just rose

their prices won't hear about that in the earning report but on the call on the data front we get december housing starts and thursday we get jobless claims and existing home sales. joe, are you up for paying 20 bucks a month for netflix? >> i thought it only went up -- what price did i see it looked like it was going up $1 or something. i'd pay anything for netflix, i think. >> okay. >> they've done this in the past, if it's a dollar or two dollars a month that's a different scenario than when they jacked prices before. i think you're right, they're more price elastic than in the past. >> still not enough to watch. >> on the high end it's getting close to 20 bucks a month. i think there's got to be an upper limit there, especially when you start to think at some point the other streamers are going to have to start moving their numbers up to make any of

this make any sense, you know. >> we're lucky, obviously because we're in a position where that's not a lot of money to us. for what i use netflix for, that's like the greatest deal on the planet that's like one movie, andrew. there's so many -- i saw a great jane campion movie about john keatts i saw power -- another jane -- there's so much there. i saw the torso killer, which all of that happened in times square it's a ron howard, brian grazer thing. and it all happened in times square this was deep. >> great looking around. >> times square is disneyland now. it used to be so dom and ga mora all rolled into one. >> still is before 4:00 a.m. here

>> netflix is -- >> they lost me on that shot >> really? >> you stopped getting netflix because it's $15 >> no. i'm saying it's going up to 20 but at some point if you're going to hold onto cable, this is the other question. if you're holding cable plus plus you put all of these services on top -- >> it's so much more expensive. >> -- at some point the dam is going to break. >> if if you do the streaming services it's more expensive than the cable box i have every service. >> i still need more i need more. and i'm going to make one more confession before we get serious. i watch me tv now. i watch "gun smoke" and i watch "bonanza" and "the rifle man". >> rolling rolling >> chuck connors, he was really

cool, went to seton hall, do you know that, becky >> i did not >> love him. johnny crawford. researchers in israel releasing new data suggesting that a fourth vaccine dose had limited success in combatting omicron, a hospital in that country began administering the additional jabs of the pfizer and moderna vaccines to nearly 300 medical workers last month the trial found an increase in antibodies was slightly higher than after the third dose but not enough to prevent the spread of omicron back in the u.s., the covid surge fuelled by this variant is showing some signs of slowing in areas mitt hard earlier. data shows new york, maryland, connecticut, new jersey, and washington d.c. have all seen dramatic drops in new cases and hospitalizations recently following that spike i'm ready to -- you know,

omicron go away, don't come back another day. now i'm worried about another variant. but hopefully omicron will give some type of protection against the next we've been around a long time as a species. and there have been scourges in the past there have but i don't know of -- there hasn't been that many times where something like a coronavirus keeps getting worse in terms of virulence. >> you can only hope the question is, and scott gottlieb was talking about this just yesterday if you build a -- if you build a vaccine that's omicron specific for the fall and, in fact, we get a new variant, you'll be back in the soup the question is whether you have another version of omicron that's less -- you know, less virulent in the fall i think joe and becky, i don't know if you feel this way, the next two and a half weeks in this area we may be back to early december, thanksgiving time. >> i think so.

>> in terms of where the virus was. >> everyone i know has got it. >> i think people have to appreciate there's still a back end to this. you hear it's peaked and some people say i can go outside now and do everything i was doing before, i don't know about that but getting close. >> yeah. i've been doing that for a while. >> i know. >> omicron, you know, lucky to have boosters and vaccines and everything, i guess. because i don't think it's -- it's not that much difference than a bad cold. it's nothing to sneeze at, so to speak, and you have to take it seriously obviously but the next variant, if it's similar to omicron and gets less virulent we can live with this like the flu. >> cross your fingers. >> hopefully it can be endemic we have to hope for that, unless you never want to see another broadway play. i feel bad about kids.

jen psaki says i take the mask off for people to understand me. what about kids in school? how do you get a 5-year-old to wear masks. >> mine does >> i have a 5-year-old she does too. >> kids are pretty good. do you have to explain >> she started wearing it when she was 4, and, you know, kids, i think, pick up new habits probably more easily than a lot of the rest of us do so they're okay with it. it's not like she loves wearing it, she doesn't like it when i wear it, she wants it off my face but she's okay. >> mom my. >> can't see you we should tell you about another big story, too the heads of delta, american, united, southwest and others sent a letter to the yesterday, the faa, fcc and department of transportation saying a new 5g wireless service set to be deployed by verizon and at&t could make a significant number

of wide body jets unusual and could strand thousands of americans overseas the faa has warned potential interference could affect sensitive instruments. at&t and verizon agreed to buffer zones around 50 airports to reduce interference they argue the service has been launched in several countries with no problems we'll talk to phil lebeau about this later this hour but i'm hearing the decision needs to be made by noon today because if it goes into effect by noon tomorrow they need to know before the planes take off from china, other parts of asia because by the time they land here, they could be dealing with a different situation. this is a different day, this is a battle that's been brewing up. it's the two arms of the government that have come to different conclusions. >> we don't need anything additionally grounding planes. it is did you look at somethin

called flight aware, you can see it, problem spots, there's been a lot of delays and cancellations. it's misery. there's a misery chart on flight wear, that shows you where the -- >> i think in this case is the faa being too overprotective for years they would tell you you had to turn your phone off -- >> you're going to bring the plane down. >> right >> i was like -- >> and the view was it was going to impact instruments in the plane and clearly the information was just like fundamentally wrong. >> thank god >> i don't know what to do >> the issue is, when you're phased with this and faced with this tough decision if you're somebody in the administration at the department of transportation or something, do you want to be the one responsible in case anything goes wrong it's scary stuff.

>> 100%. >> it's a difficult decision, but again the government chose to sell the spectrum band and say they could use it. >> that part is true too when we come back we have an exclusive interview this morning you have to see with blackrock's larry fink he'll explain why he says shareholder capitalism is not about politics and is not woke he has a letter out this morning, the annual letter to ceos around the country about this very issue. something that's been widely paid attention to by corporate america for quite some time. also a programming note, tomorrow at 10:00 a.m., don't miss a special edition of capital exchange we'll speak with lina khan and her first on camera interview since becoming chair of the federal trade commission she's the watchdog over businesses and in certain cases big deals. you can watch that interview

live at cnbc.com we'll bring you all the highlights, of course, right here following on "squawk box" the next morning we're right back after this. i may be close to retirement, but i'm as busy as ever. and thanks to voya, i'm confident about my future. voya provides guidance for the right investments. they make me feel like i've got it all under control. voya. be confident to and through retirement. at fidelity, your dedicated advisor 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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letter is out this morning, he writes shareholder capitalism is not about politics, a social or ideological agenda it's not woke. i spoke to him and started by asking him what he means by all this. >> what i'm trying to say is many people believe social values or environmental issues are political and woke i don't believe that, and by the way, andrew, we are connected with more and more owners than we've ever been before i believe our voice resonates more and more with more owners as evident now last week as we have now over $10 trillion in client money and it's about building deeper, broader connectivity with your stakeholders and for that you're building that durable

profitability. it's about having a voice. i write about in this the world, your voice is being high jjacke times by the media, by the extreme elements of society today. but i believe more consistency in your voice, a louder voice, brings that connectivity to your stakeholders >> but at the same time in this letter there was almost a defense of capitalism as well where he writes the following, make no mistake, the fair pursuit of profit is still what animates the markets and long-term profitability is the measure by which markets will ultimately determine your company's sysuccess so i asked him if people should interpret that as a bit of a walk back from previous claims that he's mad? >> there is no walk back i always said about a corporation and its purpose and those companies who have a

strong purpose are going to have more dubability profitability. if you read in my 2019 letter i talked about the same essence of long term profitability what animates the markets and moves forward. this is a theme i've been saying quite a bit. other people may be misinterpreting it, but i'm repeating, and that specific sentence i'm repeating exactly what i said in 2019. >> so one of the things you've been very outspoken about and perha perhaps singularly changed the conversation around the world is about the environment and pushing companies to focusmore on the environment but at the same time you say in this letter this year, you say we focus on sustainability not because we're viern env environmentalist but because we are capitalists and fiduciaries to our clients

maybe this is a chicken and egg thing. how much is this your view that the environment does matter and how much is it your view that the profits matter and you think it's going to become because people are focused on the environment? >> i am just as much focussed on environmental issues as i've ever been and i believe we need to be moving forward i'm pleased to say that $4 trillion of money has moved into more sustainable strategies and it's accelerating. i talked about in my 2020 letter about the shift that we are seeing we are going to see it and if anything, covid and the way we live and work today has accelerated the investments towards sustainability with that being said, i had a great deal of frustration in 2021 about the means we were moving forward i wrote over the last few years about to move forward in a more

sustainable decarbonized world, it requires a combination of government and private sector. and that's just not happening. we are not seeing the totality of society moving forward together we need to be working with hydro carbon companies, not against them we need to be working with the communities involved in hydro carbons, not against them. but we also need to be working with all -- with new start upcompanies to rapidly deploy and create new technologies so we can get to a decarbonized world by 2050. at the present pace, andrew we're not going to get there. >> how do you distinguish and how should the public and the investor class distinguish between a hydro carbon company that you think is on the good side of being a hydro carbon company and a hydro carbon company you think is on the bad side because right now it appears

these things are thought of in a binary way you're either a hydro carbon company or you're not. >> society is dependent on hydro carbons right now. we need to rapidly admit that and we need to have fair and just solutions about how do we utilized hydro carbon as we move forward a decarbonized way we need to advance ideas about green and blue hydrogen. we need to advance mechanisms to decarbonize deal and cement. we need to find technologies to -- so we can afford the sequestering of carbon these are all going to be the doo d the tools in which we can create a more sustainable world

but it's not going to happen overnight. if we want to admonish the companies, we can say stop investing, get out of your business we're going to have a very unequal outcome. >> possibly one of the most vocal defenses both of his letter guys but of hydro carbon companies. there's been blow back the past couple of years by activists on one side but also pension funds in states like texas on the otherthat have said what are you doing here we may pull our money if you push these issues against hydro carbon companies so trying to thread a needle in a way i don't know that he has historically we'll have more of the conversation with him including discussions on markets and the

fed. i think people will want to hear about the equity market and what's on tap. this next story, major -- a lot to talk about with this. major hitting the fan, though. palihapitiya had to clarify comments he made over the weekend after comments over the weekend. he said nobody cares about a uyghur j uyghur genocide unless you're a uyghur in china. and he has a stake in the nba. so here we go with the nba coddling china again and reports expected from mellon, pnc charles schwab

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billionaire investor, chamath palihapitiya is clarifying, clarifying, clarifying, people always clarify, remarks he made over the weekend that unleashed social media backlash on his podcast he said nobody cares about human rights abuses against the uyghurs in china he said i'd rather not lie to you and tell you the truth, that's not a priority to me. there are all these things he worried about and that didn't come close to making the list. if you haven't been to china, not a uyghur, haven't seen what's happening it's easy to come part mentalize that, and

you don't believe it's happening, fine. but if you know it's happening, would you say that in a tweet he said last night, in relistening to this week's podcast i recognize i come across as lacking empathy. i acknowledge to be clear, human rights matter whether in china, the united states or elsewhere full stop. there are a lot of basketball fans in china. >> yes. >> there's more basketball fans than we have people in the united states. there's got to be something to that when you -- >> i don't -- >> no. maybe not in this case but in the houston rockets case and in some of the other things that we've seen -- >> sure. >> -- there's just no doubt -- andrew, i'm giving him the benefit of the doubt at least there was some rational for him to say that. >> i watched it. >> there's no denying what he's

meaning. >> right. >> the apology can't be an apology based on what he said. >> if you watch the entire tape, it started with him saying i'm more concerned about grocery store shelves not having other things on them and then as the host was beating up on him, how can you say this when this is an equivalent of a million people -- >> i don't care -- >> he started backtracking a little until we fix things in this country you can't say anything about any other country. you could see he said something, got beat up about it on the podcast and then the statement last night was very different than what he intentionally said at the beginning >> look, we are all, as i -- if there wasn't that quote in "the g godfather" we're part of the same hypocrisy. i don't spend every day thinking

about children starving in africa we should. we live in these beautiful places and don't have the problems people have, and don't spend our time thinking about them i understand but that doesn't make me feel good about not thinking about it all the time you can devote your life to issues like this but i don't understand that comment at all i guess if you want to be honest that all of us could be doing a lot more to help those that need help -- >> he wasn't saying it like that, though he wasn't. >> how the -- okay we're all agreeing on this that's just -- that's a weird person to be i wouldn't want to be that person, i guess. i don't want to be judgmental again. i hate that. i hate thinking i'm better because we're all part of the same hypocrisy when we come back, stocks set to dip to begin the holiday shortened trading week, the dow

down by almost 300 points. there are several key earnings reports on the way this week we'll talk strategy right after this 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.

futures are down this morning, down 250 on the dow the nasdaq taking it even worse on the chin as rates move up the ten year now all the way at -- with a 1.8% -- that's pre-pandemic levels. let's now talk markets with amy wu silverman and kevin simpson, author of the new book "walk toward wealth" okay amy, i'll start with you, just as our options maven, what are we seeing in this country with pr premiums, et cetera, and what's in the market that might shed

light on the yield curve and what its eventual effect could be. >> good morning, joe what we're seeing i think is a disconnect because, you know, from 2020 to 2021 to now we've had the biggest volatility normalization on record in the history books. so we're actually down on a realized volatility basis to pre-pandemic levels and that's the fastest time it's taken for our options market to normalize compared to other crises, like the global financial crisis. i think that probably doesn't make sense in the face of what we're seeing from the fed and other things ahead so i think the options market has not been telegraphing that much fear so that's going to change even as we start to engine earnings season. >> while i have you here, you did have some interesting comments one of the lead stories in the journal today is suddenly, china realizing, wow we're not going to hit a lot of the numbers we were hoping for,

cutting key interest rates as omicron, i guess, effects the overall economy. you saw some things in the option market, i don't follow them closely in china, but tell us what the disconnect there was, amy >> yeah, i think the discorrnne, i'm using fxi as the proxy, i think volatility is too low in options land we think about events because events are what is going to drive uncertainty. there's two big events coming up, a lunar new year on february 1st and the beijing olympics on february 4th we know how transmiss sieve omicron is, it's been detected in china and the tight controls they keep, it's still tough to stop this thing. i think that's going to drive volatility far-off the levels we've seen >> kevin, is the ten year on your radar screen?

it's obviously dictating some of the action we're seeing, especially in tech stocks. >> yeah, joe there's signs here to start the year. we were talking about the ten year a few weeks ago starting off at 1.51, a few weeks later and it's over 1.8. that's a huge jump i think the reality is this is probably where we should have seen it trading for most of the fourth quarter so the shock, the surprise to the system is always hard to accept, you know, the fed's told us they're going to raise rates and until we see it, it's hard for us to believe it as a stock market i agree with amy, the vix is low, we'll see it increase, it's not telegraphing necessarily the volatility ahead but i'll be surprised if we don't see it increasing like we saw the ten-year yield increase. >> how does this set things up i want to hear about -- i'm inclined -- i get out of breath

easily these days, i'm inclined to run towards wealth or a fast trot, what's your point with walking? take it easy, do it measured, is that what you're talking about >> exactly, joe. the free money trade is over the momentum trade is over we had fun with meme stocks but real wealth is built over time you invest in great companies with increasing earnings, growing dividends. you reinvest those dividends you compound that over time and it's created incredible wealth for generation it's a strategy that works as we see a fed tightening environment and this whole dynamic and landscape change, back to basics is how you make money. doing it slowly is appropriate walking towards it is fine i know so many wealthy investors and iknow so few successful an wealthy traders that i wanted to bring some of that back to

reality. >> post pandemic some day and post fed emergency accommodation, i wonder if anyone -- if we can all really get back to what we did for so long, just fundamentals and innovation and prospects for -- you know, for new technologies it's -- i guess it's all in reference to the pandemic and interest rates we'll never be free, totally look at the stay at home stocks, reopening stocks and i guess we always worry about where rates were headed. remember 8% on the ten year? we'll never be free of it. but we certainly have been held hostage by these two events, the fed and pandemic are you ready for a world where you go back to basics, kevin >> yeah. it's starting to feel like the 70s and '80s again, bengals are winning, gas prices are up.

>> joe buroughs is so different. i don't want to curse the bengals by joining the band wagon again. i'm kind of there. they almost blew it towards the end. i'm like, they're going to blow it. >> i was pulling for you i saw you doing the icky shuffle with your dolphins. >> icky put on a few pounds but i love him. >> amy wit, kevin thank you. >> a dire warning from airline ceos saying a 5g rollout could ground planes. and later, talking about what is moving markets this morning. jerry is here! j! mate, how are ya!? it's so good to see you. 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.

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several airline ceos are issuing a dire warning, the 5g rollout plan for tomorrow could in interfere with flight instruments and make a number of wide body aircraft unusable. phil lebeau joins us with more this is the deadline that hits that hey there's a lot of fallout here. >> reporter: we should know by the middle of today, late afternoon, early evening, whether or not this truly leads to either cancellations or the airlines saying we're going to bring back our schedule because

we're concerned about flights going to certain airports like seattle, chicago o'hare, those are two airports where there's genuine concern within the industry there could be 5g interference with some of the aircraft landing there 5g deployment is going to be turned on tomorrow, that's the plan at midnight, 12:01 a.m. on wednesday. airlines, cargo operators may cancel flights all of the major ceos issued a warning yesterday, the concern, interference from 5g close to 2 miles. in a letter yesterday, the ceos said unless our major hubs are cleared to fly, the vast majority of the traveling and shipping public will be grounded steve dickson has also issued what their analysis shows the number of planes set to land in tricky conditions they say it's

about 45%. so they say 5g could affect flights unless there's a resolution reached jetblue's ceo sending a letter to the staff yesterday saying the airline must prepare for the worst, the possibility of canceling or scratching future flights. and american and united report q4 results this week united issued a warning saying that 5g could impact, could impact, up to 1.25 million united customers this ultimately comes down to what happens with verizon and at&t along with sprint paid $82 billion for the 5g spectrum auctioned off during the trump administration they said they worked with the airlines, that this is safe and ready to go. nonetheless, you guys, this comes down to the faa, the fcc, and the biden administration

they're going to have to work something out. at this point, the airnes wi start canceling flights, and that's when you start to see people saying, wait a second is this really as big of a deal as the airlines are warning or is this something that can be managed more effectively remember, we've had a two week delay, this was to go into effect on january 5th. so it will play out in the next 24 to 48 hours. >> phil, what's the science? because obviously the airlines aren't going to do this without a real concern they're not going to shutdown flights, but what's the science? how do we get to this point? >> reporter: it depends on who you talk to, becky you can go back and look at the auction. and the wireless industry will say, the spectrum that will be used as part of this 5g being turned on, there's a buffer zone between that and where the faa uses with the airlines the concern is that you may have bleed over from their spectrum into the one that the airlines use. the airlines say they have

brought this concern up, they brought it up during the trump administration's auction of this spectrum and that those concerns were ignored the wireless industry will counter with, look, these are overly broad concerns that have never been fulled backed up by any true science so this is what you have, guys you have two industries and the two agencies that represent them going head-to-head here. and there really isn't a referee. there should be a referee, there wasn't a referee when this was auctioned off during the trump administration and as a result you have what you have right now >> this is a mess. and my guess is, look, from what i've heard, these decisions need to be made by noon because you have flights leaving from overseas, from asia -- >> yeah. i will say, becky, we will hear from -- yes. that's when people will say, wait a second, what's going on here and that really -- really what needs to happen is somebody needs to sit down with the two

industries, beyond this cooling off period that was negotiated on january 5th and it truly needs to be worked out. it's inexcusable to be quite honest that you had this percolating for as long as it has been. >> phil, thank you we'll continue to watch this through the day. >> you bet. up next, crude oil prices hitting sen-arveye highs we'll take a closer look at that move next. "squawk box" will be right back. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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the year up 20% just over the last month. joining us right now to talk more about it is steven richardson head of oil and gas production research

stephen, what's the reason that oil is up, once again, this morning above $85 a barrel now in. >> well, thanks, becky i mean, i think the really immediate term is just the fact that we are seeing continuation of this trend, which is the market was set up to think a lot of the covid impacts and omicron coming out of thanksgiving would be more significant than they were they clearly haven't been and demand has continued to go along. we've continued to have a number of outages globally, generally, those outages have tightened the parks more significantly than people thought, hence the price. obviously you can see on the tape an uptake of geopolitical risc and those are the drivers driving the absolute near term. >> so how high do you think oil goes >> it's an interesting setup as i just mentioned, most people in this market were expected

loosening balances this first part of the year and opec bring back barrels him now it looks like opec will bring back barrels but capacity is dropping the market is very anticipatory. it's looking forward to the second half of the year, where markets start to tighten up, triple digits is not out of the question by any means for periods of time. we still think this market can find balance in the 70% range. as equity investors, we focus more than the spot certainly, this has been a one year surprise year-to-date >> in the past, high prices stalled prices, it would encourage the bigger and smaller drillers to pump away again. this time it's a little different because of esg concerns, what shareholders seem to want, which is not big

expenditures poured into the oil companies. they've responded in kind and have not tapped into the wells that they would have in years past how difference does that make in. >> i think you are right, there is a difference, there is no doubt we do have, we will have growing production in the u.s. this year. more than half of that will be coming from you know private entities, as you mentioned, we're doing a lot of catch-up calls, a lot of our counterparts if houston, denver and elsewhere. there is very little mention of incremental spending on drilling each at these oil prices so i think you are right and so i think it is a little bit of a different market. i think that's what makes the equities that much more interesting is how this resolves itself and as we get away from this hyper cyclicality that we've had in the past, as prices rise we see a number of activities there are a number of problems coming on later this year. there is some growth in the oil

park there are aspirations against opec many of the opec markets are having a hard time meeting their quota. i do think the pack of the curve is supported here base mid-on exactly the dynamic you are talking about. >> for the last ten years or so we said opec doesn't patz anymore. does it matter again because it's controlling so much of the supply at this point >> very much so. there are two dynamics one is beyond the opec group, including russia, is we have seen partially because of outages and maybe also because of some reservoir disappointment, some under shooting of quotas it becomes clear there is perennial production in some of these areas. there is no question the opec members that can raise production will. i think that's a key to watch for the mark yes, with the u.s. producers pretty much on the side lines,

russia not having grown in the number of months here, opec is back in the mark, certainly much more relevant than we have been talking the last 18 months. >> thank you for your time oil is above $85 a barrel. good to see you. coming up, the federal government's website where you can order free at-home covid tests set to launch tomorrow we have more on that and new vaccine data out of israel we will talk with dr. scott gottlieb plus, what is moving markets at this point who better than mohammed eller ra ell erian stay tuned stay tuned sidewalk will be right the daybed slash dog bed.

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look out below the future ifs are playing to a lower open on the markge we get you caught up on what's doing this morning new information from johns hop tins, one in 19 have been

affected by the pandemic black box larry fink says shareholder capitalism isn't woke, pressuring companies to put society ahead of profits his comments are straight ahead. the second hour of "squawk box" begins right now welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernon. the dow looks like it will open up down 226 points off, the s&p off as well about 48 points down the nasdaq looking to open down 260 points here's what's making headlines at this hour a couple biggies at&t and verizon set to roll out

new 5g services on wednesday the major airlines say a quote catastrophic crisis could result airlines warn a significant number of wide body jets will become unusable due to interference the wireless companies say it's been deployed in other countries without issues a fourth vaccine shot does raise anti-body levels but not enough to prevent infection by the covid-19 only chron variant. israel's chief center said the level of anti-bodies needed to prevent infection is likely beyond the reach of any current vaccine. a senate panel is set to debate a bipartisan bill that would change the way lawmakers who's sponsored the open acts market act say companies like apple and google have too much control over the market. the senate judiciary commit will

take up that bill on thursday. becky. >> thanks. let's go over to dom chu he has this morning's pre-mark movers you have plenty to choose from >> there are we will start with what's working within the s&p 500 i was listening intently with that conversation you were having with regard to the oil mark overall we know they are a seven and eight-i eight-year highs what is working is occidental petroleum. devon energy and marathon is up 1%, that's the green focus on the pre-market trade meanwhile, a specific focus will be on the semi conductor stock nvidia is down and lam research is down more in the course of the last 20 minute or so watch those, what's working, oil and gas. and what's not working,

technology, specifically semi conductors we saw a high of casinos, los vegas, sands, wynn, many are in focus again this morning because analysts have over the course of a past couple of days taken up their target price and/or looked at upgrarkdes. the folks at goldman sachs think some of the valuations are compelling given the pullback, given the clarity around casinos. watch those particular shares. ceasars and wynn were named top picks the entire casino complex will be a focus today a. search on friday's full session on our website cnbc.com, maybe no surprise, the banks were a full focus. j.p. morgan, ford and citigroup

some of the top ones many are caught up in the downdraft today. with goldman sachs earnings coming up, some of the banks continue a huge investment for investors. back over to you. >> thank you the financials closing at a new record high once again on friday we'll continue to keep an eye on it expectations are growing for a potentially much more hawkish response from the federal reserve to try to curb inflation. steve leishman joins us with more hi, steve. >> reporter: good morning, joe yes, stronger inflation and hawker comments prompting a reset in expectations for tighter interest rate policy four hikes plus qt, an upside rick to that forecast. here's what fed probabilities. a near certainty as the futures market at what is that 95% a second hike in june carries

85% probability according to definitive and more like september with strong otdz ofdd of a hike in february. federal expects qt or quantitative tightening, the fed will reduce its balancing this year that's an equivalent of another rate hike or two some believe the fed should or could do more. goldman sachs says if the fomc wants to be a more active inflation, then it will need to do enough to tighten financial conditions materially that i have not tightened materially at all. bill ackman writing the federal reserve could work to restore its credibility with an initial fist base points which would demonstrate its resolve on inflation. the fed is losing the inflation battle and is behind where it needs to be. to be sure, there are some out there.

our friends at pantheon says the recent economic data suggesting these forecasts are a bit ahead of themselves, the strong trend has been to raise the tune iting with how much help the fed gets from the market, itself, tightening as you know, joe, if the market does more, the feds could have to do less >> the numbers last week, steve, i thought, okay, your numbers are scary. but it looks like there was a little bit of things subsiding a little if the fed went up 50, i think people would think, wow, they know something that maybe we don't know or do you think they got enough fear mongering about inflation that people might welcome that, what do you think in. >> i always thought this was an argument for the fed to take back what it gave on an emergency basis, i don't think that's what ackman is talking

about. i always that back in 2001 when the fed did a 75-point basis cut in response to 9/11, it should have raised 75 to get back to even a. lot of what we are talking about is getting to even where we were before the pandemic and now we feed to do more i think 50 problem interesting i think powell has to prepare the market for that. but you are right, every time the fed discuss something like that, it will be a question of does it know more than we think that we know and that could raise that question it could be tough for the fed to do that again, i don't think the quarter points may be enough at least the way they're shaping up right now. >> it would be shock and awe for the markets. i am wondering if the markets would welcome the resolve from the fed that they're taking it seri seriously? >> i know the music, but even with the ten year up 180, i think at least the bond market

believes the fed will handle it. i'm not sure what the stockmarket thinks i think the bond market. >> what's the terminal rate for you? what's the latest terminal rate in you follow me in. >> you know, the fed wrote down two-and-a-half, really in the market 2004 talking 1 and three-quarters to 2% on to be two year on the overnight rate. >> thanks. when we come backing black rock's larry fink out with his annual letter this morning, defending the movement that pushes companies to work on society as well as profits we gotis h comments right after this "squawk box" will be right back

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welcome back to "squawk box" this morning blackrock larry fink's annual letter is out this morning and the fink argues in this letter that it is not "woke" for businesses to think beyond profits. the world's largest asset manager oversees $10 trillion. i asked larry where he sees the economy right now and his outlook on federal reserve policy this is what he had to say >> you have supply chain problems you have real big increases in capital goods spending you have inflation that was created by some of the sustainability measures by not

focusing on demand or on supply mitigation and we also have an economy that's paying the cost right now of having less immigration and we have raising wages. raising wages in many cases is a blessing and great but are companies having the ability to pass on those rising wages and rising inflation or are they going to be absorbing them in their earnings do they have ability to keep their margins high and absorb all of this through better operating successes? all this will be transcending into, are we going to have higher inflation or lower inflation in the next year i believe we will have higher inflation and an aggressive federal reserve over the course of the next two years. i am not worried about that. i think having a two-and-a-half year short-term rate

that's ten tightenings if they had that a two-and-a-half short-term rate will help savers earn money in their savings. the big question we have to understand, if we have a two-and-a-half year short-term rate what does that mean for the ten-year rate? does that mean it will stay at two-and-a-half or two or four-and-a-half? the shape of the yield curve is going to be the critical issue that will determine the economy and there has been lot of noise about a lot of people think the yield kev will be very steep i don't believe that i think i said that in your show in the past. i think the yield curve will be flattening, you know, i can even see if the federal reserve is very aggressive. i can see a you know negative yield curve. but you know, i do believe we will find ways to arrest inflation over the course of the next year or two, but we're making all these adjustments right now.

we are in an inflationary period, the last frame was 7%. so this is something wrong and i have to adjust to it and we're all going to have to live with but that does not mean the equity marks have to fall? >> what does it mean to the equity markets we seen them crest for example in the woes of technology, clearly. >> well, unquestionable, when your discount rate is zero, you know, having high pes, it makes it easier. it changes valuations, the growth trajectory. this has all been an adjustment. some companies will be benefiting from this some will not. we are seeing a big rotation out of growth income value, in my case, my view, that may be overdone a little bit. >> why do you say that why do you say it's over done? >> i actually am a believer in the great companies continuing

to do great things the big pharmaceutical companies. the freight consumer companies continue to do great things. maybe their pes have expressed that already and it's priced in, in some cases, in some cases, i think they will be surprising on the upside i'm not terribly worried about the direction of the stockmarket. i don't believe the stockmarket has the same upside we have witnessed over the last three years. it will be a lot more muted until we have better certainty i think the key thing related to the stockmarket is what is the shape of the yield curve in that will tell me where the equity marks are if a year. >> i asked larry, what this market environment means directly, though, for his business if that's the case. >> big stimulus checks from the fiscal stickmulus, they have received huge tax increases,

this is why the municipal bond has done well. tax receipts have been huge. the real question is what does that mane going forward? you know you asked about states and higher interest rates. the bigger question, you know, i believe deficits matter and there has been a narrative over the last two years that deficits don't matter and the question will be is what will, you know, what does this mean for our future deficit if short-term rates have been up two, two-and-a-half% and whatever that means for the long end. that's going to add a huge amount to our deficits versus what we are paying now >> we have a lot more of that interview in the next hour with larry fink joe. >> talk to me a little not from him, andrew, but from something paul tudor jones said last week in terms of stake holder, capitalism

usually i mean i would have thought like milton free pap, if i do reputational damages you don't stay in business long. you don't take care of customers, the environment, take care of things, you're gone, you're done. it's sort of a self-correcting mechanism. then he brought up purdue pharma it's like -- >> going babaing to the paul tudor jones interview. >> i said that stiffening, not from anything larry said i'm softening from what paul couldor jones said so i have been trying to figure out how you could have stopped purdue, they're out of business, 400,000 people died from oxycontin. >> took a little too long to work to shut them out. >> the guardrails that people are talking about and the things you need to consider up front, logically, i'm trying to figure out how the milton freeman mantra, i have been, you know, the whole stake holder stuff, i

think it is woke and i think a lot of it is virtue. i haven't said that in a while now i'm in a quandary. >> it goes to the question whether you believe it should be a free market. >> i'm stumped on purdue. >> and the government should reg lace interestingly, larry fink in the letter specifically this year says companies cannot be what he calls the climate police he actually wants the government to step in, something i don't know if you would want the government to step in. >> i sent larry a note he sent me a copy of the letter. i want him to read a book that talks about when you talk about the environment, there is a million things that you are talking about where you don't even have to say the word carbon, which is carbon dioxide anyway there is ac says to clean water. there is clean water the particulate pollution in china, the sufficiently fur dp sulfur dioxide, plastics in the

ocean. to stop that and get off hydrocarbons, there are so many things out, b yorn land -- it encompasses environmentalism encompasses a lot more than just that buzz word decarbonization, which will be difficult. >> looking at pcbs in the hudson river. >> it's amazing they believe in regulatory oversights. >> well, the 'you are due things they still got billions, too so it didn't really -->> i unde. >> coming up, speaking of plux, beijing on high alert after the first case of omicron was detected in the estimate it could have arrived via a package from canada. later, what will drive the

markets? we will hear from mohamed el-erian in a bit. "squawk box" we'll be right back

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that's what's happening with goldman sax. and as a result, i feel a little bit more comfortable giving you the bottom line number which a lot of times there's items that skew that number but $10.81 is the number that the company is operating

and the street was above that at $11.06 that's rare to see a goldman miss on earnings per share but as i said, we'll be seeing whether there's items that skew that above or below the revenue number was okay. it was $12.64 billion. talking about okay versus analyst's expectation right around $12 billion even. there is a lot of other metrix as there always is book value 2.84 a share. you can see it's trading sometimes one book, other times somewhere in between there there is a lot of compensation and benefit expenses, always one of the major expenses at these operations, big banks, 3.25 billion operating expenses, 7.2 billion. consumer and wealth management

equities revenue up 2.12 i know we have other things going on everything in here, let's move on, quickly. >> we will talk a little chinese jokes for a moment here. beijing is on high alert after a case of covid omicron variant was detected there eunice euan joins with us more good morning. >> reporter: good morning, andrew, because of that one omicron case, china has mandateed that all companies that hand him packages, including the one behind me have to make sure they step up their disinfor example stories suggested the person who was sick was infected by mail that she received via the united states from canada now this theory which hasn't been confirmed yet by chinese authorities is related to a theme we've heard quite a bit

that china has been pushing since the early days of the pandemic, that covid has arrived in china through a cold chain of imported goods, mainly cold chain foods up from documents. now china is an outlier in the scientific community it shows even more heightened concern that beijing has about covid spreading in the run-up to the winter olympic games, beijing tightened further, requiring covid tests to get into the city and again after entry. only three omicron cases have been confirmed in the community. but entire buildings here where the cases reside have been shut down without warning to the people inside. now companies in nearby beijing such as boeing said the community-level lockdowns

impacted their staff that's where omicron was first detected other companies they they are raising costs and extending delivery times by weeks. this, of course, comes at a time when the economy is slowing down, other bad news for anybody who had hoped to watch the olympic games here, the chinese government said they are not going to be selling tickets to the chinese public pause they considered the pandemic to be severe and complex enough that they won't be selling to chinese specttators, in addition, as you well know, to foreign spectators, either >> eunice, thank you very much. let's bring in a guest to talk about all of these things that are happening here. we are joined by dr. scott gottlieb, the former head of the fda and a cnbc contributor on the boards of pfizer and illumina you hear of these extreme

measures to prevent the spread, zero tolerance they call it. we hear of some of these ideas people got through the mail. does that sound at all plausible? >> no, it doesn't sound plausible. it sounds to me like a lot of fear they called more than 200 hamsters and mammals are banning them as pets, presumably, someone contracted the virus from a hamster look, i don't think this is sustainable him i don't think they will be able to keep the virus out. they're playing whack-a-mole right now. one of the large things they've restricted severely the ability of people to come in and out of china, including their own citizens once they normalize some of this movement, they will have this virus coming into that country i think they need to figure out how to get more vaccinated there is some inevitably it will spread around the world.

>> are you including -- >> the demonstration recently demonstrated the vaccine doesn't hold up against omicron. that's true in the united states the vaccine in particular the live virus vaccines that china initially deployed seems to be less effective against this new variant. so they will need to reformulate that vaccine that other countries will need to as well it's going to be a bicker enterprise there getting that population vaccinated with a vvenlths they pvaccine. >> you are talking 1.4 billion people you look at the problems with getting enough tests, vaccines, making sure there is enough of the new treatments coming out, including from pfizer and other companies, what happens when you ramp that up to such a larger population that does not have the same sort of natural immunity from having as many people getting it?

>> that's right. they've shown a better capability to systematise these things if they have a more effective vaccine, i think they will be able to rom it out with some efficiency right now they don't have that i think china probably among countries in the world is the most vulnerable, to your point, they've had very little spread that we know of. i think we would see it if there was more spread. outside of wuhan, there is not a lot of immunity in the population they've deployed vaccines less effective against omicron. they are vulnerable. they can't keep restricting her to people in their country their economy will suffer. i think they have to normalize some travel. they probably have more spread than they are detecting. it looks like omicron is breaking out in some parts of the country. it's a highly contagious

virulent it becomes very hard to control. >> scott, we have some idea that maybe if you had delta, you got some protection against emchron. if you got omicron, maybe have you some protection against other strains of covid-19 so fauci was out talking about future variants that could be problematic. is it your view that this is how we get to an endemic covid situation every year or do you think it might be different than past viruses we've seen where a very virulent variant that's very contagious could come in future years and would we have any, if you've seen omicron, if you've seen delta, would you have some immunity to it or maybe from the worst case scenario in your view? i guess these are all questions

we don't know? >> yeahing look, we never seen a coronavirus undergo shift where you see a dramatic strain. what you've seen is these virus undergo drift. that's what we've seen, this virus continue to drift and undergo gradual evolution. that's how we've gone these new variants there is a presumption we will have a dominant future mutations will occur and omicron may be it it may be delta. it's unclear i think the conventional wisdom is it's likely to be omicron and we will formulate vaccines going forward that will evolve in ways to partially evade our immune system and will achieve some new fitness level. that's why we will have to reinoculate the population for a period of time whether we get to an endemic state, this becomes a low prevalent virus. i think that's the case. that remains to be seen. we're not certain about that i think the worrisome scenario

is you get something that represents the one that omicron did, the variants circulating right now. most people think that's unlikely to happen most people felt, including me, it was unlike lib to happen before and delta would be the dominant lynnian and omicron came on, it had a mutating skwsk sequester pockets and there is mutation. >> omicron we saw in the other place around the world started and it tailed off. is it still possible that this will be a positive for the pandemic, itself, in that omicron is signaling the end stages of the pandemic and that so many people, i don't know what they eventually, who will have omicron, it seems to be everywhere is it possible to be hopeful that this is the end stage of the pandemic, omicron that it represents that or now do we think it doesn't

>> yeah, look, i think the base case is that this signals the end of the pandemic phase of this virus it doesn't signal the elimination of this virus in human circulation. we will deal with this with pathogen there is so much with the omicron wave and vaccination as well on top of that, that you are hard pressed to see how something can drift through the pop liegs with the same speed and efficient -- population and speed and efficient. and we have not seen a lot of the diversity from this virus. there is a lot of ways it can mutate we've seen the successive variations we have incurred at this point there is some belief that omicron provides protection against delta in the setting of vaccinations, so people who are vaccinated either before or after they get omicron seem to have pretty broad immunity people infected with omicron, probably don't have a strong immunity so that will be a little of a

concern going forward. that's probably a small pocket of people at this point, most people unvaccinated probably have both delta and omicron. >> scott, there were headlines just in the last 20 minutes or so about pfizer's oral treatment for covid and the effectiveness even in cases of omicron, too, can you tell us a little bit more about that? >> well, look, i didn't see the headline that crossed. but the data does show and this might be clinical data that is out in the public domain right now. prior data did show the drugs should be equally effective against omicron, or other versions of the coronavirus. what we had seen in the clinic and in laboratories was that if you mute, if the virus mutated its prothese, this drug prothese which is an enzyme the virus uses to replicate. if it somehow mutates in a way that can evade the drug, it becomes a much less efficient

virus so we felt the prothese inhibitor the way it was formed in the virus and the drug targeted it, was something made to the function of the virus and really couldn't change >> dr. gottlieb, thank you for joining us as always, lots of headlines to run through. we appreciate your time. >> thanks a lot. folks, some news just out from energy giant exxonmobile. the company has announced the goal of achieving net zero greenhouse gas emissions by 2050 back that up for a second. they will be net zero carbon emissions by 2050. this is an oil and gas company the new plan the details are contained in exxon's advancing climate solutions report they say they have won the numbers, gone through all of their assets, this including everything from chemical assets to refineries. they're doing things like making sure you have infrastructure in place for wells so they don't flare. they think they can do this by

2050 they will talk an awful more about that right now stock up 1.36%. exxon getting help today from higher oil prices with wti above $85 a barrel this morning. we will be sitting down speaking with ceo darren woods. woods says that exxon is committed to playing a role in the world's energy transmission. he will join us on "squawk box" in the next hour to talk about how this company will achieve those goes "squawk box" will be right back. to be on autopilot. and to be prepared if anything changes. with ibm, you can do both. your business can bring data together across your clouds, from suppliers to shippers, to the factory floor. so whatever comes your way, the wheels keep moving. seamlessly modernizing your operations, that's why so many businesses work with ibm.

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welcome back to "squawk box" a. quick look at the futures, right around here for most of the pre-market session you see down 279 points on the dow the nasdaq down 253. kind of interesting that the dpou is not down further after goldman missed estimates which is unusual $10.81 for the fourth quarter. now "squawk alley" is down 13 points compared to an estimate of $11.76. revenue dig deep wall street forecastch that's sloughing x number of point off the dow at this point so we'll see what happens, andrew >> thanks, djokovic meantime, walk's most powerful

contradiction of big tech are mapping out an again da for a very busy -- agenda for a very business 2022. ylan mui joins us. >> reporter: you are right, what ug is gearing up for another hard look at this year this week, the senate judiciary will discuss anti-trust bills with bipartisan support. the first with senators amy klobuchar and chuck grassley, including by use's third party seller's data to compete against it or search results the second bill the open app marks act. led by senator blumenthal and martha blackburn in a statement, the senator said this, breaking the ironclad grip of these two behemoths on the multi-billion dollar app market

is long overdue. this measure has large momentum. it's unclear if they will go to the senate floor remember, the house judiciary packed big anti-trust bills last year those are still stuck in limbo that makes regulation even more important. today they are slated to provide updates on a merger guidance the agencies are supposed to get more to handle the flood of mergers that happened last year. that bill is stuck as well, back to you. >> okay. thank you for that we should mention that tomorrow at 10:00 a.m. a special edition of capital exchange. i will be headed down to host this alongside kara swisher, we will be speaking with lyina khan since becoming chair of the federal trade commission she is overseeing the big tech deals. you can watch that live only at

cnbc.com/capitalexchange we wilbring you the highlights in the morning on "squawk box. becky. >> looking forward it to, andrew when we come back, mohamed el-erian will join us to talk about the markets and what you need to know about your portfolio. after that, exxon's mobile chairman ceo, darren woods joins us about greenhouse gas ementions, a plan to be net zero by 2050 a. strange thing for an l d oiangas company. he will tell us their plan "squawk box" will be right back.

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checking out some taxes figures from mohammed, talk markets now, mohamed el-erian, the president of queen's college cambridge. inflation, what deck killed a was that, was it the same decade as herschel walker the benefit gals won, i was a toddler, what's next what was the last jet's win, na math super bowl >> jets, super bowl. are you back on the -- >> i love joeboro and nixon and i like what's happening, but i'm not going to curse them.

but getting back to what i'm getting to with inflation, it's been a long time is it here and you have said that the fed is a little behind the curve. can they catch up when they do 50 basis points? the ten year is above 1.8. after the weekend, what do you think? a lot to digest given the playoffs and the market. >> the marks have been digesting all of january a couple of things one is that high inflakes will per high inflation will persist. we have china, labor shortages and the market has recognized the fed is way behind. let me use the football analogy that comes from a friend of mine, if the market realizes the fed has to play hurry-up offense, they are way behind, that i have to play hurry-up offense, mistakes can happen

so the marketplace is trying to embrace both higher persistent inflation and the fed pla having to play even more this rurhurryp offense. >> if the fed were to play hurry-up, let's say they did a 50 basis point move at some point, would that make the stockmarket participants feel better about the fed's ability to get things under control? and there are some good things happening. the reason why rates one of the reasons, globally, maybe we're going to recover and consumers are flush and spending has saved money. maybe there is good things happening in some added growth that causes rates to go up could be a little of a good thing or do we think this is going to be bad for equity >> oh, there are definitely good things happening, there is a lot

of dynamism in our economy we have a very good labor market the problem, joe is that the fed got stuck on this transitory call for way too long. it has fallen significantly behind and what the market worries about understandably is the bunching of three things that didn't need to happen, but they are happening now one ending qe. two, increasing rates, three, four, maybe five times this year and three starting qt, reducing balance sheet. now when you bunch these things together as the fed is going to have to do because it is late, there is more risk out there to the marketplace and to the economy. >> okay. so, you would stand pat, you would buy dips, you would not buy dips, what does that all mean at this point you'd selectively move out of some areas, would you move out of tech, or buy tech on dips how would you play

>> so, first, the buy on dip whatever you want to call it, that conditioning is still there. we saw it again. but the more the liquidity with changes the more it will be under pressure i like people who have pricing power. that's what you are looking for right here people with pricing power. tech comes in that category. they have pricing power. they're not affected by inflation on the cost side as much as others are so look for pricing power because that's going to be a key determinant in going forward. >> pricing power people have said that. is it going, so it's going to be a mark of stocks, that's what you are seeing, it's not going to be a stockmarket, you don't think we are due for a big day of reckoning in 2022 or early 2023 where i don't know multiples come down significantly, even though maybe earnings, maybe there is no

recession, maybe multiples come down, interest rates are coming up do you see 15, 20% in the card going down >> i don't see it in a risk, how would it materialize from the fed policy mistakes, a, the policy mistake, b that leads to stagflation that itself the one scenario that delivers what you just talked about i don't think that's the baseline. but that itself a rick the parter that you've got to keep out there, because the fed has a very tricky maneuver in front of it. >> what about a roaring '20s scenario, up 20, is they're baseline up 7% something like that with dividends? >> yes so my baseline is low single digit. that's what i think the baseline is in terms of the balance of risk, it is slightly tilted two ready the downside but the good news and if you want to look at the positive, if

the fed delivers this normalization and the economy continues to build momentum. we do have headwind from the rest of the world, china in particular there are geopolitical issues, there is oil prices, so it's not a done deal, but there is an upside scenario. i would focus on single low single digits as the baseline with a symmetrical risc. >> they're telling me to wrap the titans are favored i think three-and-a-half points. >> we talk about your patriots being knocked out? >> my patriots i'm from cincinnati. i was a brady, no, i like bob, i think belichick is great it's sad i feel bad it's tough. so that's what you are hanging your hat on, no the mets, no in the jets you are hanging it on patriots >> the rams.

like the rams. >> that's evil, though, you are getting so much shout from the patriots, it's evil, evil. >> you said it, not me. >> all right thank you. talk to you later. okay coming up after this break, exxon ceo darren woods the latest, the nasdaq points to a two-year high, take a look at the biggest losers right now. looking at moderna down close to 4% this morning. stay tuned "squawk box" is coming right back back

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and feel what it's like to get your money right. . >> good morning, futures deep into the red we kick off on wall street, goldman sachs posted it quarterly results. and new commentary on the $so trillion man we will bring you the highlights and exclusive sound you can only here on "squawk. breaking moments ago, exxon possibly saying it's aiming for net zero carbon issues by 2050 we will speak exclusively with oil giants here as the final

hour of "squawk box" begins right now. good morning, welcome back to "squawk box" here on cnbc. i'm joe concerning along with becky quick and andrew ross sorkin the u.s. equities you heard proved a little but the dow still down 250 points, nasdaq down 232 points. treasuries if you haven't been paying close attention back with a 1.8. panel, can there bethree letters in a handoff maybe not. we haven't seen two numbers in there. we haven't seen 1.8 in a while pre-pandemic levels. still not 2% still not far off, especially given what we're hearing what might be coming this year from the rate increases and qt, we got to get used to

that, not qe, yeah qt shifted around, quantitative tightening crude oil might play into a lot of different scenarios this year if we stay here $55 now on wti crude. i don't know whether that's high or headed higher here's some of today's top business stories, goldman sachs out with fourth quarter earnings the bank beat for revenue. stills for revenue but which is rare, missed on the bottom line, operating expenses jumped 23% from a year ago on higher worker pay. increased reserves for litigation stock now down almost 5%, almost 5% the dow has paired its losses a little, even though goldman is now down through i don't know how many dow points that is points on goldman. so that's quite a bit on the dow, just from that stock one

stock alone, unilever, the company made a $68 billion bid for glass so submit klein's consumer health billions unify lever's made a series of offers already they have all been rejected with gas so believing they under valued that business unilever has a lot of slow-growing name brand food items. they want to restrnew. they are looking for kohl's to increase in value. 5% of kohls, telling them they need to change the board or hire bankers for a possible seam or other transactions breaking news, exxon mobile announces next year's greenhouse gas emissions by the year 2050 they have a new climate report

out today. all of this comes as joe was just mentioned wti hitting a seven-year high $85.11 per barrel darren woods, ceo, joins to talk more about these plans when somebody hears you will be net zero carbon emissions by the year 2050. they may think, okay, nice idea, but you will not be around probably as the ceo when that happens, so how serious are you about this what do you mean when you sa i this and how seriously has the company undertaken this? >> yes, i think it's a very relevant question. i think you have to look at the context o. work we have been doing some time. if you go back to 2018, we set them for 2020. we achieved those. in 2020 we set objectives for 2025 we're working with our facilities all around the world to put in plans to make those reductions we're successful in implementing those plans, in fact, what we expect in 2021s a those numbers

come in, 23 will achieve our 2025 reduction plan. that let us to set more aggressive plans for 2030. so we have emission reduction plans we announced back in december for 2030 and this 2050 ambition with that work we have done, we have a much clear road maps around the facilities to deliver those reductions so there are plans behind this ambition and it takes us clearly through 2030 and beyond. i think that should give folks some confidence. this is more than just how they're positioning on something. this is actually work that we are doing to help meet what i have been talking about for several years now, which is the dual challenge how do you continue to supply affordable reliablenergy, people all around the world, so important to maintaining their life styles, while at the same time advancing this objective of a lower emissions future, which we believe is an important objective, one we have been working hard to achieve. >> when you run through the

assets, you are talking about the capital plants, the refineries, how do you do it in these locations? can you do it using today's technology or do you have to create the technology before you can get to it >> so a couple years ago, we brought together a lot of technic only experts within the company, formed a team to start working with each of the facilities as you can imagine, a lot of different variety in terms of equipment, sources of emissions across the different that silt and types of businesses we are running. this team is working with local management to develop what we call our abatement curves for each of those facilities, that lines up, the lowest cost reduction steps and we're stranz lateing those abasement curves, which involves reducing emissions, leaks, new equipment, a number of different sterngs li steps, translating those into plans, road maps with a time

line and executing those by facility and, obviously, the further you work down that abatement curve the higher the cost goes our view is as you go through 2050, if society is going to achieve this ambition of net zero, policy will come along, market incentives will come along, advances will come along, that will drive the cost of the outer years down, that itself the work we are doing today. >> what specifically in terms of policy has to happen for this to become a real why it. >> the one position continually it is the best way to incentivize all of society and kwipts, business,ing academic, individual consumers is a economy wide price on carbon transparent stable that incu incentivizes 2022. that has to be done to bring net

zero in the future, recognizing many places around the world, that is a difficult evasion today. so we're working on other policies that support that reduced emissions. we're looking at low carbon transportation fuel system how you can effectively incentivize industry to reduce carbon across the value chains they are looking at that for power generation, working with policy miakers around the world to drive those things. 45q here in the u.s. is a policy today that's helping drive emission reduction if that incentive, tax incentive increases, you will see more reduction coming on, it helps incentivize higher cost, larger scale mission reduction steps. >> hey, darren, andrew here. >> hey, da andrew. >> given a lot of competitors

got to the statement place to make these types of pledges earlier, do you wish that you had done this earlier in >> no, this is, as i said earlier, andrew, this is more than just a pledge we have been doing work several years now to make sure we were confident we had a line of sight of how to achieve this that's the work we have been doing and the technology advances we have been working only so my perspective, when we come out and commit and say we will do something, my intention the to do it the time horizon in terms of becky saying it is long, i respect that, many decisions stem from a long-time horizon. we've taken the same disciplined approach that we do in the base business and think of these long time horizons, what is required to achieve those business directives we've taken that same approach and applied it here. we've come out to talk about it ween we have this clearer line of sight i will tell you too, the new

board is encourageing us to be more transparent and people understand the work we are doing. historically, we tried to hold back a bit until we are doing it i think in this case helping folks understand what we are trying to do and the work we are doing today to achieve sit an important emphasis the board has given us to help people better understand the work we are doing. >> darren, do you think your peers, though, who may have come out earlier on these issues didn't have a line of sight or a plan, it was just word, is that what you are trying to say >> i don't know, i can't speak where the peers are at i can speak what we are doing and what was required to have a clear line of sight. all i can say as we go forward in time, the results will demonstrate, whose got good plans, who is executing? we feel good about the progress we made and confident the progress we will make. that's how we will judge ourselves. that's how the board is judging the management too many. i feel really good about what we

are doing a and the substance about that you will have to talk to the other folks to understand their plans and what lies behind them. >> so darren, we used to watch exxon, we'd see how you would replace reserves every year and how you would build production we'd watch that so, will that start? i guess that will start going down at some point it's 30 years we're talking about. i'm wondering with oil now at $85, what do you think, where will it be if you and all your peers start de-emphasizing the production of hydrocarbons what will plastics cost? what isn't made out of hydrocarbons at this point and what are all these things going to cost five years from now if the entire industry is moving away from producing hydrocarbons >> i think that's a great question, joe. i think that's the difference in terms of the approach we are taking the complicity in your question is an assumption we start to ramp down our production

that is not what our plans are doing. in fact, the challenge in this case has been how do you continue to moot the need but in a way with less emissions. our view is technology will solve that, that will underpin the success of the company for quite some time. that's where we placed our bets. that's the work we have been doing for years. it will toad low carbon solution one example, if you look of the next several years, our production coming out of permians is growing. yet se same time we are lowering emissions. we made a commit to have our permian operation at net zero w carbon at 2030 those two can go hand in land. layout the technology and challenges i don't think it's ntd p an either or. i think there is an-and-equation. the challenge is how do you execute that how do you bring those things and do it in a cost effective way? and the plans that we put in

place are helping achieve that you can look at our 2021 results. we made significant reduction in our missions at the same time we grew our earnings and cash flow. >> with wti above $85 a barrel at this point, does it change your plans at all in terms of what type of drilling you do, where you do drilling? how quickly you ramp things up i know you talked about how you will suspend $15 billion over the next several years or so to reduce emissions, how do you have flxibility in how you move with oil price changes, with policy changes with different things that you might want to do with emugss too? >> you will remember, becky, in the depths of the pandemic, when oil prices are very low, obviously, time seeing there is not enough revenue coming into the industry to support the capital investments required to offset the equation, that as the economies around the world recover from the pandemic, there

would be a growing demand for oil and gas and we would find ourselves in a tight supply situation because the industry simply didn't have the revenues and the cash flow to sport the investments required to offset deflation. so i would tell you what we are seeing play out broadly is in line with those fundamentals around the need for oil and gas we'll we work on new technologies and alternatives. so if you are not making those investments, you get tight today we find ourselves in an environment frankly we unde understood was on its ways and built our plans in anticipation with that we don't get enamored the price out the window today we think how can we over the medium to long term build a competitive supply business. so the extra investments we choose to make will be investments in production that is on the very far left-hand side of the cost of supply curve. that under any scenario that you

envision out there, that will be competitive and advantage versus the rest of industry that's how we are thinking about our investments. as we look to add additional investments, making sure they are competitive and robust across a broad range of price environments, not just the ones we are in today. >> obviously, you can't say with 100% accuracy where prices will be you said this is kind of the range that you expected. up expected prices to pick up. do you anticipate them staying around these levels? do you expect them to go higher based on what you know about global supply and demand right now? >> you know, i would tell you the, when i say we expected it, in the macroyou'd see a recovery and a recovery that would justify investments to again begin to offset that deflation and meet that demand, exactly what price we were going to settle out we couldn't couldall that it's difficult to say how much higher would we go we say as you get supply and

demand tighter, vents that happen around the world, incidents that happen lead to a lot more volatility. there is less than a buffer. i think we will see that for some time now until industry begins to ramp up production, increase the level of supply to meet this growing especially or supply and demand comes down and opens up a little supply and demand space, you will see i think a lot more volatility. how long that takes, you know, it's difficult to judge, frankly, there are a lot of diplayers with motivations out there. to see how that plays out, yet i come back to we anticipated higher prices. we also anticipate a lot of volatility, frankly, we're anticipating lower prices going forward. makeing sure our plans are robust and then run the business efficiently, cost competitively, reliably, make sure you are doing that, taking care of your emissions and that's kind of the

base plan that we are executing today. >> with this new plan, what does that mean in terms of the employees, the number of employees and times of employees? does that change from where are you right now? >> you know, that's one of the i think the unique features of our strategy that we have in this space, it gives us a lot of flexibility to manage the uncertainties. one of the challenges you think of a transition, particularly in such a large global system that's so critical of people's day-to-day living. what is the rate and pace of that transition? how do you prepa for that? the areas we are focusing on, which a number of third parties have pointed to is critical to being successful and society transitioning, carbon captured, storage, biofuels, hydrogen. the skill sets, the cape aenls, the talent you need to grow those businesses and meet that need for the transition are the same tool sets we use in our traditional business, so we actually have a talent base and

a capability and skill set that lends itself to both sides of that equation, which gives us a lot of flexibility that as this transition moves forward, we can adjust those resources to one side of the equation over others so we set out a plan today that has that balance construct we have a lot of option amendment to shift those as the environment evolves and we see the trends or policies comes into place or greater incentives sooner we can make thosed adjustments o skill sets that aren't consistent with what we need in the base business. that's one of the real beauties of the strategy we've laid out, it makes our business fairly robust when the iea net zero put a scenario out, which was a fairly aggressive scenario, what will it take to achieve net zero by 2050 we tested our strategy and what we found and put this in the

report, what we found is our business actually gross cash flow in the iae net zero we ship those resources out of traditional oil and bass gass into these higher growth lower carbon business him we feel pretty good about the flexibility we have and the optionality it gives us. >> dhar rarren, thanks for your today. darren woods is the ceo of exxo. >> andrew. >>in okay. thanks, more from black rock, we are talking more about the issues we are talking about right now. you don't want to miss highlights from our exclusive interview. mr. us four banks down, wehave four more to go. financials, interest rates rise, stay ted u are watching "squawk" on cnbc

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welcome back the dow took another leg down 300 as you can see, right there, the nasdaq down where it was

from most of the early pre-market session down 260. here are some of the biggest losers in the dow, losers. losers goldman sachs the biggest, anywhere on a percentage basis down almost 4% microsoft down two and change. apple down 1.48% and walt disney as you can see is down walt disney featured a writeup in the cover of the journal about some of the big names that are already down a little bit from their highs even though we don't think of the i don't have all market as being down that much andrew >> okay. blackrock ceo larry fink's annual letter is out i wrote about it it's not a social or ideological agenda and it is not woke. i asked him by what he meant by

that this year >> what i have to say is that many people believe social values or environmental issues are political and woke i don't believe that by the way, andrew, we are connected with more and more asset owners than we have been before i believe our voice resonates with more owners as evident of now last week and as we have now over $10 trillion of client money and it's about building deeper, broader connectivity with your stakeholders and for that you are building that durable profitability. it's about having a voice, though i do write about that in this diversion world, your voice is being hijacked at times by the media, by the extreme elements of society today but i believe more consistency

in your voice a louder voice brings that connectivity to your stakeholders >> we got some breaking news i will send you back to becky right now. very big news in the world of technology, becky. >> there is, this is some good news that's coming out right now. it looks like microsoft will be buying activision blizzard activision blizzard shares have been halts on the news coming out on there microsoft shares down 2.78%. activision blizzard jumping all the way to where that deal is anticipated to happen at $90 a share. it closed at 69.49 on friday the company at that point with almost $51 billion market cap, this is a big deal, a very big deal, activision blizzard shares up by 37% up to $90 as i

mentioned. microsoft shares coming under a little more pressure although we've seen them under pressure because of the higher yields you have seen in the treasury complex 301.55. still looking for the details of this again, it looks like this is news that's just coming out and just reading through some of the headlines on this, bobby kotic will serve as the ceo, reading through more news, this is hitting the wires right now microsoft will be acquiring activision blizzard for $95 a share this says in an all cash transaction valued at $68.7 billion. it's a big premium after about 45%. watching what happens with this and obviously there has been a lot of news, gentleman, coming out about activision blizzard. the news has come out over the last several monthsles andrew >> i was going to say, the stock had been down 27% in large part because of the controversy that

we've seen in the "wall street journal" and reports about work place culture. i would argue, microsoft buying this company at this price is a bit of a rebuff, if you will, about some of those reports or at least an acceptance that the culture is acceptable to them. of course, they had their own challenges, just last week saying that they were going to be looking into their own workplace culture, but this does appear to be a big win for bobby kotic. the big question i am looking at is just whether regulators will ultimately approve a transaction like this under the traditional antitrust theory between microsoft and act ivision. you seen the biden administration take an all encompassing approach. meanwhile, microsoft remained largely outside the target of washington in large part because

it dealt with that, if you will. >> is it a metaverse >> more than two decades ago >> is it more of a metaverse play >> by the way, guys, we should mention we have interviews with bobby kotick and phil spencer. in an hour from now we'll be sitting down talking to betoth f them >> talk about a kitchen sink, cleaning house did you know that it was like how many people were at activision, did you see that in the "journal"? >> i did >> so cleaning the decks now it's all dressed up, ready for seam how many people did they have to deal with in they got rid of accidence of people and they had to speak to or take action on another 40 or 50 people, so it's kind of interesting.

they get that done and this happens. bobby is still left standing but a lot of people are off with their heads, they're done at that company so maybe it's taken care of. >> you want to talk about zero tolerance and watching the changing culture that's something bobby has been talking about a while is making sure they are clear and up front with some of these things, there is some pressure to do just that as andrew mentioned, microsoft has its own issues to deal w. they have an external investigation they announced last week, it's been brought there because of shareholder pressure to come up against that, too. i think are you right to go straight to the metaverse and think about what this means, if you have this content and the resources with microsoft to put it back together i think that is pretty important probably too why you would see such a big premium. the stock activision blizzard, $95 a share. it puts that back up in a big way, kind of looking at that

time overall valuation of the company, too >> look, i was going to make two other points related to this, which is it catapults them way ahead of facebook almost immediately as you thinkabout it in terms of just the context here facebook is wanting to dominate the metaverse by having these games that's almost a required component of the metaverse i am trying to look through what is coming out here, sources telling me, i imagine we will be seeing this soon, that there is a brake-up fee it is huge, something on the order of $3 billion, which would demonstrate their confidence that washington would accept the transaction like this. again, though, i think it will be very, it will be a long slog and really puts microsoft back in the spotlight in washington in a way that hasn't been in many, many years >> yeah, washington, the regulators have kind of been spoiling for a fight you wonder if this is something

that they're going to gono after you see other companies that won't make a meal in this environment. you wonder what the test case will be. i guess this could potentially be just that let's get some more reaction to this news. cnbc senior commentator mike santoli joins us what do you think? >> obviously, very opportunistic. it looks like a huge premium but it's below the highs where trading was not that long ago. so it seems there was this middle for that. in terms of the broader strategy, obviously, it makes gaming that much more important within microsoft you know, in terms of the regulatory scrutiny, now owning the xbox console business and there will be sensitivity around that i think it exists elsewhere. the question is, as you were saying, is it a multi-trillion tech company are you going to come in for scrutiny on that front? i think microsoft generally has a lot of confidence among investors as being a good

allocator of capital, they're not willy nilly going for big splashy deals without a good strategy inside. that's been an expensive stock microsoft up 53% last year they have all the cash they could need for anything. right now a little 2% decline in microsoft shares yes, it's been weak already. that might tell you people will give the company the benefit of the doubt that this makes some sense. >> that's right. watching through some of the technology issues and, mike, just watching the premium on the meta platform. metaverse and seeing all these things that come out, this is something talked a lot especially by the company formally known as facebook >> sure. >> what's there, what kind of promise does this exist? when you put it with context, with content. >> i would actually go to a place that said that the financial rationale and the strategic rational when it comes to microsoft, they probably have

to be confident it has to work based on activision and how they have done historically it used to be a super expensive stock. they used to have these huge premiums it hasn't been, there has been a little struggles obviously, activiactivists, it'n seen less than a sure thing. so i actually have been sure everybody has to figure out what the metaverse means and it has to work on its own terms as a game publisher for their game business, of course, with minecraft and the consoles and everything else. so to me it makes a lot of sense. i remember when microsoft bought linked in. it made no sense whatsoever. what are they thinking about here the market loved it. they were turning inert cash into a business called linkedin, now we know, they were largely about workplace, business communications, business commuting and linkedin fit in

with that. this bolted into the other side, the consumer side of microsoft >> mike, thank you andrew, i know we have another voice. >> yep, i was going to see we will bring in dan ives we georgia him on the line of web bush securities. this is a company that's been on to a b2b company, this is moving them back to much more of a b2c and as we have been discussing this met ja vrmetaverse. >> it's been the consumer piece, nadella are going on the aggressive here. this is at a time where they know other tech platforms, amazons, apples and others they can do an acquisition this size so this is them flexing their muscles in terms of doing a bigger deal here to really get an aggressive fund it's not on gaming near

metaverse and other areas. nadella, once he missed out on tiktok, there was an appetite for a much bigger consumer play. >> dan, there is no question that 91 of the others, i would argue, apple, amazon, google or alpha bet would have an almost impossible time in washington getting this deal approved the question i ask is whether microsoft will be able to? >> that will be the beg question i think microsoft because of the anti-trust issues in the late '90s and 2000s, they feel they're a little more teflon-like to do a deal like this that's something that's definitely been an issue with other tech starl stallers. they had their wings clipped this is nadella realizing with what's happening with activision stock, they need to get aggressive on the consumer side. it was kind of a now or never opportunity.

they know they're the only one that can bid yield stocks a bit. >> i am hearing there is a breakup fee sizable upwards of $3 billion trying to get the details on it. is that a real risk? >> i think it's a risk ultimately, just given what's going on in the beltway as well as brussels, this is not gentleman to have you know what i'll say a smooth road there will be complexity here. you need a breakup of the hedge as well as activision, their back is against the wall and some of the black clouds, microsoft recognized, there was an opportunity here for them to really step it up on the consumer side. not just on gaming metaverse and the other areas, because that's been the one thing, the consumer strategy has been on a treadmill while, of course, the cloud story has continued to try to rock it forward. >> dan, two things, one is there is a deal for azure as well,

there is gaming and other things they will create a business out of azure for gaming and the metaverse. the culture piece, we've read these articles about activision's culture and microsoft facing its own challenges is this redemption in your mind for bobby kotick is this a cleanse here about that culture or is this something else >> that continues to be something microsoft is going to have to noveavigate. after the acquisition, would he be staying at microsoft under activision would this ultimately be a time to step away because microsoft with a deal like this, the it adds added scrutiny there is of course clear positives and opportunities and challenges as well both internally and externally. that's something nadella who has been the boy scout relative to

the other tech stocks, now this is something they need to navigate in terms of some of the regulatory as well as other issues that activision has dealt with >> okay. dan ives, thank you for dialing in and doing it so quickly right off the news as it was hitting appreciate it. >> thanks. when we come back, tech launcher gene munster will join us with his take to activate activision blizzard. we will continue with this news in the moment. coming up, don't miss our interviews with activision's bobby kotick and microsoft's phil spencer stay tuned, "squawk box" will be right back that helps you build a future for those you love. vanguard. become an owner.

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welcome back good morning, jared, we have been looking through these numbers. are you surprised at the reaction in the marketplace? >> andrew, not really. the expense line as you said when you look through the numbers, the investing were nom nam. trading results, however, were below expectations and sex penss similar to j.p. morgan last

week they are running into having to pay very high salarys to keep people satisfied that's the same with goldman sachs as well from in t >> in terms of-a highlight, is it a negative this morning >> on the negative side it's down in pre-market trading is partly due to the expenses they also have a harmer than expected revision to build up reserves goldman also pointed out that their backlogs are a little bit lower at the end of the fourth quarter versus third quarter but generally speaking, andrew, we are seeing all the investment banks which had a phenomenal two years, 2022 will be a tough year in comparison to '21 and investors are moving more to the traditional commercial banks to benefit from the rises everybody

are expecting in 2022 from the fed. >> and is that what you would be suggesting investors do or have people moved too far too fast? >> we are recommending investors do that, the rate increases, nobody knows for sure how many there will be this year and into 2023 and that's a real benefit again to a traditional commercial bank. with the investment banks, once again, the comps will be so difficult. the numbers were so elevated as you saw goldman numbers were record level numbers in 2021 it will be tough to beat those i think you will see those evolution and movement from the investment banking space into the commercial banking space as the year progresses in our view. >> okay. it's great to see you this morning. sorry which have to cut it short. big deal news out this morning with microsoft and activision. talk to you soon thanks coming up, jim cramer on

this morning's dig biel news, microsoft buying activision blizzard in the next hour, don't miss the interview with activision's bobby kotick and microsoft's phil spencer stay tuned we'll be right back. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire well, would you look at that? jerry, you gotta see this. seen it. trust me, after 15 walks... gets a little old. i really should be retired by now. wish i'd invested when i had the chance... to the moon! ugh. unbelievable.

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let's get down to the new york stock exchange, check in with jim cramer. the deem of the morning, activision bought by microsoft it was a company run by bobby

kotick 31 years next month go back to 1991, bobby and a small group bought activision out of bankruptcy for $3500,000. now based on this deal is valued at $68.7 become. what do you think about the deal >> it's just a wow it's big i have known bobby 35 years. i have always thought he was a genius, when i met him, i said, oh my god, this guy will do big things he did do big things we can talk about problems well documented by the wall streetdown am. i think this is about microsoft getting premier first party content to go with their big suite of x-box x-box has more than 100 million people they offer games it's not the important -- becky, you and i both know this is the one company that can get away with it. it will be a hard time for facebook and apple and google.

but microsoft flies under the radar screen i think this will be a go. great job for bobby in terms of shareholders. >> in terms of the meta perspective, this is a brand new world, a gold if you world what will this mean when you pile that on top of the company? >> well, look, this is next year will be the year, not this year, people think for ar. my problem is we don't have enough devices, there is the graphic cards that nvidia has make it so you can build on it we have to write on it i think bobby's team can write on it. you have to draw this stuff out. i think that only microsoft wants a gigantic revenue stream. they're going to get it. you are going no get a prescription business so stick question, i think it's genius for both of them it's great bobby got there

i like the x-box franchise, by the way. we'll talk with both i think it's a deal that will get done i think when you look at the overall market it's out of sync with the deal we are seeing this morning. >> andrew. >> hey, jim, you said it's a deal that gets done. >> yes. >> we have been talking about the anti-trust implication all morning him i'm hearing from is a breakup fee that's huge something like $3 billion. i'm going to talk to lina khan from the sec you don't think washington will make this dealt? >> they can scrutinize it. an industry, look, if she says there is three companies, take two, electronic aerts and there is only activision blizzard, yeah, lit have a hard time to me, everybody is in gaming. anybody can write up gauge road blocks is into gameing. right. there are so many companies apple is into gaming

i i it's one of the more fractured universes, someone as active as she is may say, look, no one can crack into this business other than those three companies. i think that is a very bad call, but, obviously, this will be a real test. it will be great tomorrow. >> you mentioned bobby kotick and phil spencer both joining us in the next 45 minutes or so and you mentioned sub sten subscription services. >> i was away this weekend and i have a bunch of subscribers. this product and turbo charged and i'm excited about it we're going to do a program this morning, everybody who is a subscriber should tune in. it's going to be a blast thank you, becky. you can still sign up to find out more at

cnbc.com/investingclub or point your phone at the code on the screen it will take you directly there. "squawk box" will be right back. when it comes to payroll. d intuit quickbooks helps you easily run payroll in less than 5 minutes... ...so you can stay... one step ahead. you could be working with someone outside your company and wait for back and forth e-mail, or a call to be rescheduled for the third time. orrr... you could use slack. and work faster with everyone you work with, together in one place.

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breaking news this hour,

microsoft buying video game giant activision blizzard for 95, $95 in cash. let's get to gene munster because we're not at 95 yet. sometimes you see something like this, gene, if someone else could be interested, you actually see it trade above 95 if there's a possibility of someone else i don't know if anybody else could do it. and it looks like the market is not even sure that microsoft is going to get the go-ahead on this why isn't it at $95? >> the simple answer, this is going to be some good drama that's setting up and the market sees it coming down around the corner and probably the title of this episode is "silicon valley/dc collision course".

they're saying, we don't buy it, dc, we don't buy it that you want to create greater control around these companies we don't believe you want to break up these companies i believe that's the disconnect is that this seemingly flaunting by microsoft about everything that we've heard from washington i suspect that the legal advice and the banking advice that microsoft and activision have here is top shelf, no doubt. and so i think if dc doesn't stand up and do something here, just kind of fast-forward one, two years down the road and they start talking about greater regulation, i think most people won't buy it, most companies won't believe they're going to actually take control. and so i think that's the disconnect is this is really setting up for some good drama here around how this plays out >> yeah, because you got $6 guaranteed if it goes through here and for some reason, i think

microsoft's check would clear. i'm pretty sure they have $69 billion. so that's -- when it's all said and done, we have seen a more -- who knows s with the biden administration what do you think they'll do in terms of antitrust >> so -- as i said, i think there's going to be some drama, i think there's going to be a lot of arb i think in the end the deal gets done and part of the reason, i think a lot of the saber rattling that we've heard from capitol hill, i think it's been off base and it's been anchored in this belief that's doing what is best for the consumer in the end, these big tech companies, display frustration from many about the wealth they've created for themselves i think they're making consumers' lives better.

i think it happens because i think in the end, dc doesn't have the ground to stand onto ultimately block this. >> is there any metaverse without gaming i'm trying to qufigure out whate would be doing i don't understand what it is without gaming, without gaming, it's nothing, is it? >> you're exactly right. the two takeaways from this announcement, we've discussed, number one, is this collision course between silicon valley and dc thsecond takeaway is just the significance to the metaverse. this is the biggest news on the metaverse since facebook changed its name, which was more than just a name change that was anchoring in the company's direction. and you're right, gaming -- the metaverse gaming is going to be the foundation i want to add one vector to the conversation, the definition of the metaverse is still

ambiguous. i believe it will be 2d and also immersive experiences, some form of wearables what you just described, i think, is a version -- is a part of the metaverse, but there's this massive gaming opportunity and i think it just sets up well i think jim did a good job in the previous segment when he talked about just the subscription revenue the beauty of this for microsoft, they get the benefit of a subscription business on top of the optionality around the metaverse, of us medicating ourselves with this immersive gaming experiences which are going to come in the next decade >> i guess facebook -- meta already is ahead zuckerberg is already an avatar, or is he real? i'm not really sure. would you be buying any game

stop >> we own activision, we also own take two take two, by the way, i think one of the benefits there -- >> i don't know. i would be worried about now game stop has to go up against this i just wonder about that -- >> don't own gamestop. >> it's still -- way down from where it was all right. very good, gene munster. we'll stay tuned we need to tap your exercise again as we -- as this goes ahead. $89 now. microsoft has the money back >> it does it does. $89.96 you're right still leaving $5 on the table. don't miss our exclusive interview coming up with bobby kotick and microsoft's phil spencer. we will talk all about the deal, what brought it together, what made it happen and any concerns they might have about regulatory and beyond

very quickly, let's take a final check on the markets this morning. you'll see the dow futures indicated down by 285 points after a down week last week for all three of the major averages. s&p futures down by 43 nasdaq down by 240 points. treasury yields have picked up rapidly. the ten year now at 1.823% that does it for us today. we'll see you right back here tomorrow right now, it's time for "squawk on the street. ♪ >> good morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber earning pick up speed this week. we've got some blockbuster m and a to get to this morning goldman with a miss. >>