might make sense i guess, you know, it's what we need to deal with. seth, we don't have enough time. we have to be out at 9:00 a.m. i would like to talk to you more because i don't -- i want to understand more about this analysis hopefully we can see you again soon. >> yeah. >> thanks, seth. i think we're done, guys make sure you join us. >> yeah. >> squawk on the street is next. good wednesday morning welcome to squawk on the street. i'm karl consistent nia. futures are solid on this day as more strategists say buy the sell-off that the fed will walk back some of the hawkish expectations. and microsoft, abbott, vix below 28 road map begins around with turn around or bounce for stocks. futures point to sharp gains as investors await new tea leaves from the fed

plus a wider than expected loss and big revenue miss for boeing the ceo dave calhoun will join us and break down the quarter. shares of at&t seem to be rallying a bit ahead of the open the ceo john stanky talks with me about the warner media deal, the quarter, of course, and the future for wireless. and start with the overall market this morning. we mentioned the strategists out with some bullish notes out of goldman, citi, jpm, it's across the board. >> i think we're cynical and t therefore we think they can't be right. these are people who have called it right i'm reluctant to say you know what a bunch of penguins on the upside they've been telling you to be careful. if they tell you to be careful, maybe they're interesting. i have no problem with that. that's pretty good. >> you're happy with that? you're okay? >> well, i mean, it's not like

said the whole way down and double down. these are strategists who were correctly calling and saying, you know, this is not -- you know, it's an unsustainable decline. it'll happen now they're saying it's not going to keep -- it's an interesting level. and jay powell -- a lot is about how fed chief powell is not about to take the wood to the economy. now if anyone says that he's worried about the stock market, that's wrong that's not his style he's a consider rate person. >> it may not be his style anymore. but we heard the last guest referring to 2018. >> oh. >> dramatically -- they reversed course dramatically -- >> okay, that was the rookie coach. >> i see. >> that was the rookie coach he got blown out in the wild card round okay this is the real coach this coach is every bit the andy reid. >> understood. >> when it gets grim.

>> you know the big question is at what point, if the market's dislocation becomes steep enough will the fed back off. because they're -- see, there's a belief that at some level this fed will never raise rates into a significantly declining market >>well, i don't think that's true. >> clearly you don't. >> that's the question. >> that data determined. that's the way powell has been. >> how are we going to get back to 4 or 5% >> maybe if we have a high inflation. what happens if this supply -- >> what do you mean high >> we had 7%. >> what sustained? >> are you listening -- >> look, there's such a thing called supply chain. it has to get better one of the things that happens, if you get sick -- you haven't gotten sick. you have to quarantine suddenly you're not there. everybody who met you is not there. there's nobody there you have to ship everything from portland to st. louis. >> you think we get back to normalized correct i numbers with, which are far lower than now, therefore, you

don't need to raise as much. you'll never get to 4%anyway. >> it's crazy talk. >> it's a large company. >> microsoft right? >> bingo. >> got it. >> and they tenored the call, which, by the way, andy hood said those who have listened amy hood put the wood to the people who don't really listen the wholepoint was this, we have to be the way that business gets back and not be expensive by the way, the meta verse throughout the enterprise you said i think technology can get us some of the way i think if we did not have the unions in charge of long beach -- by the way oakland has no issues. i don't know about oakland -- what is that about let me give you a list i think it's time to let david understand my game plan here here is a couple of companies. j & j ab proctor and gamble, microsoft, united health, travelers, american express, wells fargo, bank of america, raetzon.

you see a pattern there? what did the companies do? they beat and guided high. >> oh. >> that's a lot of companies hold on a second there was netflix -- >> that was bad. >> netflix i want to stack netflix against the others maybe, yes, some people watch "squid games" and their conclusion was "i don't know." why you're not thrown by jpm's expense? >> he threw a temper tantrum he's allowed to do that. he's been there forever. he's probably bought a million shares in the last four days we'll learn about that but if he hadn't lost his temper if he hadn't started raving, i think we would have lived jpmorgan by the way, abbott guided higher but, you know, jamie shot himself and, like, the foot the left foot, the right foot, the hand i mean, it was -- it was -- it closed a new wave in that conference call. >> didn't make it to broadway.

there's not as much as you would like, these days. >> look, i screwed up. >> jim references the aftermarket action of microsoft. if you can see that there azure came in at 46 versus the prior 48 all though, as jim points out, amy wood talked about the growth trajectory for azure. >> azure, we expect revenue growth to be up subsequently in constantly currently proven by the azure consumption business the strong growth on a significant base. >> i'm laughing, karl, because it was probably around 15 minutes into the call and she said that. but everyone had already sold it they sold it because they were stupid if you listen to amy hood, i listen talked to her at goldman. she doesn't come out and say things idly. that's the most positive she's been about azure we got the call azure -- remember when she said you see the dollar suddenly appreciate it did

suddenly appreciated that's not the same color. >> every day. >> all right all right >>well, i'm going. >> should the calls be quicker to follow the report >> we should shoot all the machines why don't we just say we don't know yet about azure i mean, amy is so good i feel like -- i like amy. and amy likes the show. >> that's good to hear. >> i'm completely about that i think she's worth listening to and wait for her she's so good. she just -- no one wants to wait the 15 minutes they're on to the next i mean, you know they think they have 13 seconds. let me tell you what you can do in 13 seconds. >> okay. >> we're going to talk more about microsoft, though, especially the pc division which was a big part. >> yes, yes. >> boeing is out with quarterly results this morning and a big charge our phil leb beau brought that

in. >> you talked about your results, dave. nearly $4 billion in charges i think before we get into the some specifics here. i think people are looking and saying what happened last quarter? >> yeah. none of us like charges. it's a big one and it reflects our reality expect with the delays, the rework process we've been involved with, and the time it'll take to work the way through the process. so we to reflect the charges it's a little bit of a double-edged sword for me in the sense that i don't like any of the charges, the progress has been significant i feel good about the deliveries and ticketing process, for example we can't rush it we won't rush it we'll maintain our disciplines by the fact we are where we are. with respect to the quarter, as you know and we've talked about for now, a couple of years, free

cash flow has been our focus and continues to be our focus. we have restructured operations. we have returned the max to service. it's going beautifully as a result, we got our head above water with respect to free cash flow. we probably did a little earlier than we might have imagined. i feel very good about that progress i feel very good about the progress on that same met trick going forward. >> you said the same thing last quarter, dave, regarding the dr dreamliner you haven't delivered any since last may why should investors be confident that perhaps april or may you finally get everything worked out with the faa and can resume deliveries. >> the work in south carolina, with respect to the puget sound has been fantastic we're working through real conformance issues not safety issues. conformance issues meaning is the airplane built exactly and precisely according to the engineering drawings we have this is a healthy process for

anybody to go through when we're looking at every part of it. so the rework process is going well it's long. it's disciplined it's going well. i think we're progressive in the fast rate. i feel good the outcome will be great and the program will be great. what i can't do is predict the moment i cannot do that. >> and yet your customers, some of the airlines that have dream liners, they're expecting to take delivery of them have come out and said in the last month, we expect april or may are you comfortable with the airlines saying that >> here is the point, the customer knows everything we do it's their regulator, as well. they've seen the airplanes they inspect them regularly. so, yeah, they've seen everything we know i don't -- again, i don't want to get into a who is right about what date. because it's the faa's job not ours. >> i know you have a question, jim. >> absolutely! thank you, phil. so, dave, china.

so important to the market right now we are in a cold war, basically, with china and china has frozen us except for maybe starbucks, nike, and apple what makes you feel that there will be actual orders from china given the antipathy they have for united states? >> hey, jim. great question china is critically important to us in every way. what i can talk about is what i see, which is a set of customers working with us methodically to bring the max back into service and flying test flights. we anticipate the return to service in very near term. and we expect the deliveries to proceed from there every single weekend at an operating level is forward progress disciplined -- umm, frankly, it gives us a lot of confidence going forward. we have a big backlog, as you

know it's very important to the year ahead that we deliver on the backlog and the airplanes and i remain confident that china wants boeing airplanes in their fleet and they'll continue to do business with us. >> i'm glad you mentioned backlog. judging from what the airlines are telling me about post omicron what is going to happen. a boom people need inventory. i know you have inventory. not the way you necessarily want it with the 737, but if this demand materializes, will you have the right planes, planes that, by the way, are far more energy efficient and you stand ready to be able to deliver for the next two years, given how many planes you have >> yeah, jim i'm, again, i've always said i'm optimistic about demand. for our customers with respect to passenger travel, therefore, the desire and the need arebuil

fleets and the max and the 787 and the 767 in the freighter world, et. cetera, it's a strong product line i'm confident we will receive the orders that ultimately are lead into the industry you are right about fuel efficiency and emissions both are additional and significant drivers on demand. not just the growth and passenger traffic. >> okay. dave, when you look at the max, you have increased your production rate. you were at 26 in the third quarter. went up in the fourth quarter. you're expected to get close to 31 relatively soon. do you hit 42 by the end of the year, as many people are expecting? >> yeah i can't -- i'm not going to try to look that far forward. we have a philosophy one at a time one at a time. and, yes, we are confident we'll move up to 31. we'll do it in the near term when i think about, you know, the supply chain constraints that exist out there, you know, i hate that we got here the way we did having the inventory and

finished airplanes particularly as it relates to the max is an advantage at that moment we'll take full advantage as we think about the market going forward. we'll move it at a steady space. i believe the 42 question will be more a question of the supply chain than demand. >> covid hit you it continues to impact your production talk a little bit about what we discussed at the beginning with regard to the defense side it's not the same as on the commercial side where if you have a bunch of people who are exposed or sick you can perhaps get some replacement work in there relatively quick or move around it's different on the defense side, right? >> yeah. for sure we take covid management for granted these days when we get the omicron, presumably we get back to flu-like treatment of this, but productivity opportunity for our company and probably most industrial companies is huge as we reduce the lost time in a big way. you're right our defense business because of

clearances, because -- >> security clearance. >> we don't have a whole bunch of clear peoplesitting around able to move into jobs and when shifts have to move on our defense business definitely taking it much harder than the commercial business because of that. >> one last question, 5g this played out over the last month and i think a lot of people were looking at the airline industry and the wireless industry and regulators in washington and saying seriously? in this day and age we can't get this straight? what happened? >> well, we'll get it straight we were at a moment. it was a difficult moment. i heard your -- my customers explain to you just how tough that was looking so rather than look back, i'll just say now we have a good coalition industry, participates, both on their side and our side altimeter manufacturers, et. cetera we're working on technical solutions, i think, will soften and dampen this to the point where it won't be noticed.

i give a lot of credit for stepping up. they volunteered with respect to slowing down the rollout of their 5g but anyway it's a good coalition now. the administration is doing a pretty good job with this. our transportation secretary booth is doing a terrific job and director dietz said the economic council is doing a terrific job finally, we're all on one page the technologyists will help us solve the problem. >> i know you have a conference call to go to. analysts are waiting you're not giving guidance for this year but there's plenty of questions about that thank you very much for joining us guys, back to you. on a day where, yes, they missed on the top and bottom line, as you heard dave say, they're optimistic that they are getting their arms around the 787 dreamliner ever issues wack to you. >> phil. thank you. thank you for bringing that to us they don't seem to be in a position to get particularly hard it may be up despite the results. i want to move on to another

name people watch closely. certainly among those in retail. given still broad ownership of at&t that stock looks to be up after the company reported its fourth quarter numbers. wireless, which, of course, is going to be the only real -- well, wireless and fiber, excuse me of this company as of let's call it the second quarter of this year pretty strong. we got a lot of these numbers already because the cfo presented a few weeks back at an investment conference and fwaif us a preview of the numbers. kind of a mixed picture overall in terms of warner media, and data which may have been lighter on the margin side than people anticipated. i want to look deeper into that. i had a chance to speak earlier this morning prior to the conference call with john stank key, at&t's ceo. here is a quick raf of what he said when it comes to wireless and what they've seen overall in terms of performance >> more postpaid phone net ads in 2021 than we've done in the

previous 10 years. it was our fourth consecutive year we're increasing the foot print and have an opportunity to ramp it up and, look, at 13.8 million hbo max ads, and what we're able to do to launch on two continents and ultimately broaden that product and not only be a subscription-based service but have advertise and support associated with it, look, it was a home run for the team this year. >> he says home run. the stock is up. it has been moving higher through this year, of course, since the announcement in may, though, to the end of last year. it was a very poor performer i want to continue the focus a bit more on the warner media side that may have an impact on discovery shares and what does appear to at least have been disappointment on the part of analysts we're looking at fourth quarter numbers in terms of margin and whaechb they're guiding towards. it may be a bit messy so we're trying to get a bit of a cleaner

look there so we can compare it it. >> but the stock is bottomed out. you hadn't, frankly, had a lot of people leave the stock. i happen to like verizon. >> yeah. they were more positive than at&t. >> we're going have a lot more we had a long conversation about competition and wireless about the future of warner and whether it's going to be a spin or a split in terms of how they actually dispose of their ownership of warner, which is very important and being watched closely. so stay tuned for that. >> look forward to that. >> yeah. and the animosity is over. what more can you say? stock bottomed i mean, there's not much more to say. >> yeah. >> all right you're right about the verizon jpm. >> yeah. >> the other callstoday including calls on chipotle, draft kings, along with a bunch of other earnings. abbott, kimberly, texan and more as the nasdaq 100 looking at ceaiofhepen. don't go away.

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of other earnings. new year, new start.

and now comcast business is making it easy to get going with the ready. set. save. sale. get started with fast and reliable internet and voice for $64.99 a month with a 2-year price guarantee. it's easy... with flexible installation and backing from an expert team, 24/7. and for even more value, ask how to get up to a $500 prepaid card. get a great deal for your business with the ready. set. save. sale today. comcast business. powering possibilities. we'll get to "mad dash." it's hump day, by the way. >> yes, it is. >> yeah. now tmx. >> once again people shot first. asked questions later. it was just a direction. texas struchlts ended up having an amazing quarter people were selling and selling. and people realized, wow, this

is great it why because awe motive was on fire, industrial was on fire, pcs, again, tough to compare, were quite good david, this is an internet of things is real and i come back and say these guys -- someone that all the analysts keep saying, listen, it's cyclical. so when are we going have another crash? instead what they say is secular, the growth is great we know that secretary is talking with the ftc there is no inventory. these guys admitted the inventory is well below. it was a conference call that caused people to realize, you know, these guys are in the -- because everybody needs auto chips so badly everybody needs industrial and they have the right form factor. so the question is only can they meet demand? i love stories where they can meet demand. versus kimberly clark, obviously, clorox. not worried about meeting demand but this is an electric, exciting story i think people -- texas

instruments is not a promoter. if anything, they're buzz kills. i always feel like when i listen to texas instruments it's like, all right, get out my calculator from i was at goldman. the fact is you have to go to hp the fact is it's good. and, you know, the people have sold it made a big mistake there couldn't be more anything more bullish. >> yeah. again, it goes back to the point you've been making listen and wait for the conference call. be patient. >> people don't want to. >> they react to a press release or the machines. >> the machines react to machines. >> by the way they are doing well this year we should -- we need to differentiate. >> smart versus dumb i'm sure there are people who don't take it from the headlines. >> no. they would be selling abbott if they did that. >> all right as you heard, of course, we have a lot of earnings to get through. we have an opening bell five and a half minutes from now followed

by more of my exclusive interview with john stankey. don't want to miss that. ke ihe ept re

we believe innovation is on sale and we believe it'll be important for investors to get -- to move toward the right side of change given the amount of disruption that we do expect. >> that's cathie wood offering her deference saying innovation is essentially put on sale as the tape has an interesting piece on a new fund that is two times leveraged. >> that's all you need more moronic stuff create anything and make money look, here is my problem be what she's saying what is on sale are companies that make things that provide a good service, that sell at a profit, sell everything at profit, and can give you a buy back and dividend. the other stuff is just kind of,

well, software is a service that -- >> the momentum trade ended. >> yeah. >> a lot of what was going on in this market. >> but it's okay it's okay to say, okay, momentum ended. her style ended. and now move on to some other things and you don't have to -- look, i changed, too she hasn't she continues to focus and now, look, she'll get her draft kings today. and the opportunity is too big to ignore. her thesis doesn't work in an environment where the fed is hostile. just doesn't that's exactly they would have said don't fight the fed. meaning don't fight the fed buying stocks that sell 40 or 50 times sales when you haven't done your home work. you're overrun and too stretched and haven't done -- spent the time i know those are cost -- >> they are. they are [ cheers and applause well, if you were to look. i happen to like draft kings i worked for draft kings

i did at one time. at 55 i don't think anyone thought -- maybe jason thought it was going to be a good time i mean, you're buying, you know, if patrick mahomes is at the game, you make $500. it's buying that did she do any homework or understand what gambling is? no too big to ignore. [ opening bell ] >> and, frankly, didn't pan out. >> i'm sorry didn't pan out. >> yeah. people make mistakes. >> is it over? >> we'll hear the fed at 2:00 p.m. then, yeah it is over there was the opening board. celebrating a listing via spak earth observation satellite company celebrating its listing via spak jim mentioned draft kings. morgan stanley. >> draft kings is --

>> right and now they did a good job. they -- this is the anti-cathie wood let the stock come down. >> draft kings upgrade today makes sense to me. it discounts the fact that new york is not that great no, obviously, the deals is to open accounts are just horrible from the bottom line but, yeah, now it's fine price matters. you can't just stand there and buy a stock. i bought stocks all the way down for my travel trust and i have at 10.20 i do the morning show and every day i self-logic one stock like paypal i got wrong in her world, you're never wrong. >> that's quit a big move up not maybe the timing of the upgrade. it's well played here. >> what is more football season is over. >> when it comes to these, and, obviously, anybody who watched football in the new york area was besieged with the ads given you can bet in new york now. >> yeah. >> you know it's about customer

acquisition. >> yes. >> enormous costs. >> yeah i would say $400 per -- >> how do you view it in terms of out years and, i mean, is it a discounted cash flow model based on how many they'll be able to get here they're losing money. >> i think last man standing model. >> you get $1,000 credit for signing up now. >> fanduel gives you money back. you can take it back last man standing. we don't know. two or three companies will be in the business. it's not a great business. it's great only if you wipe out the other guys cost of acquisition -- we all see it it's one of the things that made me so angry about the style. we all knew that these deals crushed the bot toll line except for her. i question whether she understood what a parlay was did she understand what the over was? or how about you create your own line i'm telling you, if she were here now, she wouldn't know the difference between the over and

the under and wouldn't know weather to give or take points she's not -- or she would be buying it. >> make an argument that robin hood business's model is not dissimilar. >> no, it isn't. no robin hood not even in tights. >> they're doing a low. >> and the investigation they're continuing to have -- my buddy. >> yeah. he was on my show. >> my buddy. >> yeah , you didn't like it it's something i do to you not done to me you can't hammer me. it's my job to hammer you. >> he's still support to the company. >> yeah. he is customer acquisition i follow him on twitter. he's funny. >> yeah.

i follow "people" magazine i learn and people i've never heard of and they kiss they kissed. >> the shots on the beach. >> yeah. "people" is a great follow i learn about everything who is completely unimportant. >> okay. yeah great way to spend your time microsoft above 300 jim. >> yeah. they'll keep going higher. the quarter was amazing. they have more on shorts to cover. and, you know, talking about extensive notes about it it was a good call they start by talking about do you said we should talk about it but digital technology it's the current business environment. and particularly because we have a shortage of people the enterprise metaverse, david, you have loved it. i think what he basically did was lay out all the different divisions, how well they're doing, and ties in meta verse to almost everyone.

i'm sure the only division i wasn't happy was with gaming what does he do? buys the number one gaming company. this is one of the most opportunistic ceos i've ever come across. i shot him an e-mail i said i'm sorry for what people are doing. i'm sorry they're idiotic. >> and potentially are positioned for the future of the meta verse becomes what some people believe it will, and particularly for enterprise. we talk about the idea of it now. imagine if you're able to collaborate. it's years away. >> digital twins i disagree with that. >> these things seem to be further away than you think. i remember sitting here five years ago talking about antonymous vehicles and what it means for the truck drivers and everything else. it seems like we're no closer. >> and the electrified f-150. >> new yorker articles tend to be long but they're informative.

the number itself 51.7 billion quarterly revenue number it's amazing a 20% top line growth for a company around since when when when did microsoft go public >> 1986. >> yeah. >> yeah. >> yeah. i mean, this is extraordinary story. and i urge everyone. it's not a long call it's orchestrated because we said it's good are you people listening if you're listening, you realize he's weaving a tale of the metaverse and how it'll play and everything from act vision, blizzard to the digital twin concept. why i was in your face saying it because did you read the line? i would bring people's attention to the holistic nature in which he answers it.

her level of rigor is so frightening i would be frightened to ask a question. >> microsoft is adding the most points to the ndx. 80 this morning all from microsoft along. and as for nadella, as jim said, weaving meta verse into the discussions. about the quarter, take a listen. >> it was a record quarter drivenby continued strength of the microsoft cloud which surpassed $22 billion in revenue. up 32% year over year. we are living through a generational shift in our economy and society. digital technology is the most malleable resource at the world's disposal to overcoo over constrains. with it announced last week, we're investing to make it easier for people to play great

games, wherever, wherever, and however they want. and shapes what comes next for games as platforms like the meta verse develop. >> we were watching the commerce department report yesterday. >> that was amazing. >> yeah. and said that, you know, 119 but it was a mosaic of different orders i think nadella is taking a vision we adhere to the supply chain problems we're going to address them. and we're going fings fix them the stern way in which he approaches it is basically for me to say i feel more confident if i'm jay powell and i listen to that call then i don't have to come in with guns placing and shoot everything down. he has people like nadella on his side and nadella has a lot of divisions. he's not idle, david it's not some platoon.

what you should say, yeah, i agree with you, jim. >> that's what i'm supposed to say? we'll move on to stankey and. >> i'm curious. >> it may be overowned, obviously, a big split is coming up i'll explain more lately but did get a chance to speak to mr. stankey earlier this morning. the ceo of at&t about his just-reported quarter. the stock has reversed and down ever so slightly some focus there on the warner media side of the business in terms of what seemed to be a guidance that is below at least what some have been anticipating on the street. all though i am hearing different numbers in terms of using the right base case impact from dtv and xander. but as for wireless, that business does remain fairly strong take a listen to mr. stankey. >> if we just kind of went through the golden age of television we're about ready to get into an golden age of connectivity

how do we take the robust capability we've become acustomed to in our homes and office and take it everywhere we go and what enable for innovation and when i think about where at&t goes with that is one we start with the largest fiber footprint in the united states the most dense and distributed fiber footprint in the united states i think to be in this new age of connectivity and be able to deal with the demands that are occurring with, that's kind of a basic fundamental infrastructure piece that needs to be there two, what happens at work and what happens at home is now blurring and, you know, the pandemic kind of brought this to a head. everybody is doing everything they do within their life. no matter where they are i think a company like ours that has incredible strength at the top end of the business market and also incredible strength at the consumer market and everything in between distribution channels, how our fracture lines up, our ability

to do product development, the position of our brand for reliability, and how we can bridge those things. i think that's where we play moving forward. >> yeah. all right. does that mean that differentiation then will move away from what i would argue, at this point, for those who watch football, for example, is largely about price or how much i can get for my trade in? >> well, look, i think customers are always going to be value centric. i think that's just part of what you're in a competitive market, they think about those things. and i believe the wireless industry functions that way today. as you know, there's a pretty broad difference between the different players in that market so there's clearly a segment of the market like many of the customers that choose at&t that are looking for that very consistent execution and kind of scale and the kind of reliability that we can bring in when we do things like build our network to accommodate first responders and the extra reliability they need around those things, those are things our reputation and brands stand

for. so i think value will be an element that value doesn't necessarily mean low price. >> yeah. i mentioned t. do you see comcast the parent company of this network and charter with spectrum offering as real competitors in the wireless industry? >> well, look, as i just said, i think what a customer wants is a customer wants to go to a provider and say handle what i need to be connected and they don't want to really think about it say handle what i need to be connected at the house or handle what i need to be connected on the go i believe where the market is going to go. they want to go to one provider. as you alluded to earlier, value is going to be really important. i think what we've seen in capital intensive and infrastructure intensive businesses over time, it's difficult to be competitive if you don't own and operate fracture and have owners' economics on things over time.

so my belief is, well, it will be a segment of the customer base or they'll be able to put an attractive bundle l together from a resale perspective as using more capable, fixed solutions and more dense fiber being deployed as you see wireless networks evolve in the way they are i think it's going to be important to own both sides of the infrastructure to meet the customer's expectations and have the kind of economics that are necessary to be successful in this industry moving forward. >> yeah. which gets to, of course, broadband, which you mentioned you continue to have your fiber footprint. you're building it out, well we're talking 30 million locations by year end 2025 with a is the vision there from, john from a competitive standpoint, coming after the incoupleumbent mentioned, charleser and -- charter and comcast. what is the hope of at it.

>> our product does well in the market today in the 16 million plus households we offer it to we see differentials and customer satisfaction between us and our competitive base over 10 points we're moving share and what we have is really kind of, i think, a once in a lifetime opportunity with the government from a policy perspective making a decision there's going to be avert policy that every american should be connected to the internet and in places where the market doesn't necessarily support investment of infrastructure, government coming in in a public/private partnership and subsidizing some of that investment, i think county a t&t can be a key playe in bringing every american on the internet and partnering with governments around the country to use our expertise, add scale to build the networks in a responsible way, and actually, in the next five years, see us accomplish what i think would be an important social policy

perspective, to give every american household on the internet in competent and capable to use it. >> of course 50 billion being allocated for internet access under the infrastructure bill. the infrastructure spending that is going take place. so there you kind of get a broad sense of his ambitions this company, obviously, transforms into pure wireless and broadband, which he believes are, obviously, a product that work well together and that will be more competitive with the comcast and charters of the world in their world and, obviously, you heard him say he thinks they're less competitive on the wireless side because of their inability to have owner economics. >> right you've been very forthcoming about how you can package competition. >> yeah. spectrum, for example, which you see endless customers for is basically giving you verizon's network at, you know, half off >> i know. it's an issue. if you go to t-mobile, they give

you a phone. >> yeah. >> it's very -- >> t-mobile also has its own network which is very good. >> yeah. spectrum position. >> it was result in part of him and his predecessor's deal to try to acquire t-mobile and give up. >> it doesn't have a dividend. it's a good company. >> i don't know. i go to you on those kinds of things. >> i think people want steady and verizon will continue to raise rates and dividend a lot of our viewers are not looking for -- to own stuff. they're not looking to own software you know, software is a people business. >> look at the dip hikes this week alone wells 25% last night. >> why didn't people talk about that >> halburton is the big one so far. >> halburton was such a great call i have to tell you, you know, you get the calls it comes on a monday and no one pays any attention to -- jeff miller i had him on and he was not the ceo then

and basically just said, look, you don't understand we have a lot oil in this country. now he has got double digit growth in literally every single one of the markets and as far as the eye can see. it's such a strong company i just commend him and what he's done they make a lot of money before we even see more drilling. >> there's a ton going on in energy we have brent close to 90. a lot of june-december calls of 100 as people are watching ukraine. are we going to get lng over there, if things get worse >> we own chevron. we have the morning call at 10:20 and we were stunned how much oil is up oil stocks are up this year versus the rest of the mark 17%. chevron purchased weak not too crazy. conoco doing very well david is quick to point out that exxon has done well.

>> incredibly well. >> it's not really -- >> cash flows are very significant. none of this has to do with the changing of the guard. it's because the price of oil. >> they have a $30 break even and highest yielding stock in the s&p. got to like that. >> unbelievable. reminder, you can get on the cnbc investing club with jim sign up to find out more at cnbc.com/jointheclub. >> yeah. and the 10:20 call a lot of people are pusbuzzing about. it has theatrics. >> you and theatrics no. >> i went out for -- >> you didn't make it? >> you're not a song and dance person. >> i didn't succeed. take a look at bonds today, as well, with the fed decision a few hours away and the presser shortly after that 10-year 178. microsoft adding almost a third

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those results from the microsoft and texas instruments leading the cloud this morning there's a look at the nasdaq 100, up better than 2% catch us anytime anywhere, listen and follow to the podcast. the dow is up 440 right now. we'll be right back. competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is. workday. the finance, hr and planning system for a changing world.

let's get to jim >> i'm going to give you today's trade. abbott is notoriously conservative the number that's freaking everybody out is way too conservative a lot of the business is doing well it's always light. and if we buy at it right now. >> jim, what's on tonight? >> qualtrix, sort of

controversial. these big money makers i want to know whether cathie wood understands the concept of the over when you buy the stock of draftkings, you better understand >> one of them reports tonight she needs to know about power trains >> they'll make a lot of money, and she'll say, i to do you sol. you know what? i'm not a genius >> it's had a lot of down years, too. >> he wasn't a they've an

unlimited capital there. remember joe klein >> ran the schools here in new york for quite a while. >> quite a show. at 10:20 i'm going to do some theatrics, though david says i do it every day. >> you do. that's why i love you. s&p, don't go away

good wednesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber. we have some optimism about the fed today, with the s&p with almost a 2% gain rick santelli has new home sales. >> a business surprise on the december read on new home sales. remember, november was a strong number, ds super-strong, 811,000, well surpassing the expectations of 760,000, and

811,000 adjusted, it's the best level metropolitan over month for this particular metric since march of last year there's probably several good reasons. one, thank the fed here. interest rates are reportedly moving higher over the next several years, many that may be sitting on the fence to purchase a home may be more mott rated. completions are up close to 5%, and there may be an inventory thaw no matter how you sliceit, a powerful number. let's aim east and see what diana olick thinking >> rick, like you said, it is a strong number, well above expectations i would note, though, that november's was revised lower you know i'm always looking at prices median, 377,700, that's just up

3% year over year. in november, the price gain was over 18% so maybe a bit of mix on the pricing, maybe it's a mixed shift to lower-priced homes, but again we're seeing a small price increase year over year. we did get the total year sales in, down significantly from a year ago 822,000 in 2020, 2021 came in at 762,000. why? supply chain issues, builders slowing their sales, because they can't build the homes fast enough, having issues with land, labor, materials one more thing to note in december, mortgage rates were about 50 basis points that are they are right now these numbers are based on side contracts to build newly built homes. that means people out shopping in december before rates run up. we'll see what rates happens in january. that will be the one to watch next month morgan >> we know you will be, for us

here are three big movers. microsoft surging after beating on earnings revenue, we're going to have more on that name later this hour, which is leading the dow higher plus corning also in rally mode net income up 93%. it was a being earnings beat as it sees growth in areas like optical components, life sciences and automotive. those shares were up 16% finally aerospace and defense giant boeing reporting a loss of $7.6 per share the company taking a $4.4 billion charge -- i should say charges, much of it tied to the 787 dreamliner delivery delays last hour, dave calhoun on though charges. >> it's a big one, but reflects

our reality with respect to the 787 delays, the rework process we've been involved with with respect to those delays, and the time it will take to warrick or way through the faa ticketing process. we had to reflect those charges. it's a bit of a double-edged sword for me, in the sense i don't like any of the charges, the progress has significant i feel very good about the forward view, with respect to the 87, we can't rush it, we won't rush it, we'll maintain our disciplined, but the fact is we are where we are. >> the max is back in the air as well, so it's a focus on production rates and deliveries, and what that will shay up to look like in 2022. you pressed him on that forecast as well, certainly something that investors would be keen to hear about boeing is one of the biggest defense contractors in the

world, also has a sizable spaceport folio. one of the charges they took was a pretax charge on the aerial refueling tankerer, which is a program that's been an issue for boeing on and off, for which they have taken charges before the defense business also swing to go a loss, and the covid perhaps on the defense business, we've seen it from all the prime cryers, has been particularly in focus between labor shortages, and of course the supply chain issues there >> indeed. you did say they expect the return of the max in china in the very near term, that will be a big deal for boeing. david expects passenger traffic to return to 2019 levels sometime between 2023 and 2024, which is important, because we barely got a million passengers through tsa on tuesday, the lowest since april of last year.

>> and continued concerned about whether china will follow through with the orders, carl. that was certainly a key question, of course, that calhoun was asked about by both phil and jim cramer when we spoke to the ceo of boeing earlier. >> yeah. i would also just node, another mover is general dynamics. it speaks to some of these trends from where an investor standpoint, we're seeing recovery, in the case of gd, ongoing strength where business jet orders are concerned even as we're seeing softness in things, given ahmet uncertainty around the defense budget so we're going to turn back to the broader markets, stocks higher, the nasdaq still down 15% from the all-time high with us now. chief investment strategist jim

paulson, and amy wu silverman. jim, i'll start with you we're seeing a bounce today, but in general the correction we have seen across the major averages, does this have the risk of becoming something deeper, especially given the fed could, at least, this afternoon for now continue on this aggressive tightening path >> yeah, i think it could. you know, we're in an emotional state in the markets this is an emotional sell-off, which they always are, so fundamentals don't really rule in this environment, this emotion does it wouldn't be surprising at all, morgan, if we go back and revisit that monday intraday low, for sure, to see if that has some support but overall, i just think that the fundamentals here, the fundamentals in the economy, the balance sheets of corporations and the household sector, the

earnings that are coming out and are likely to continue to be good this year, are just too strong for this thing to get out of bounds on the down side right now. the things that brought it about to begin with was a fear of surging yields blowing through 2% on the ten-year mpgts they have taken a pause here for the last 10, 12 days i think that's allowed for fundamental to say catch up. this morning's reports refocus on fundamentals and how good they are, i think that will win the day ultimately. >> amy, what is the options market telling us right now? >> yeah, it's interesting, because, you know, through this entire sell-off, even through the rally, equities view has been really low. just to translate that, that means the demand for hedges, even as we're selling off, kind of remains at one to two-year lows, which was not true three or four months ago one reason i think that was the

case is people simply aren't as long people took money off the table rather than hedge, but i think the wrinkle is the super tales of the three standard deviation market correction has remained high, so a 10% as to 15% market downrange to remain low, that catastrophe insurance has added a bit to it. i'm watching that closely. there are more geopolitical risks on the horizon, even if those 24th don't necessarily come from what the fed says today. >> we just had new homes sales jump three instead of 18, conference board wage expects of expectations coming way in lumber limit down, seven days in a row. how do you think that gets processed? >> i think they have to recognize there's certainly

strong evidence that it's certainly slowed, real gdp terms in terms of the fourth quarter we may take a hit all the way down to 2% growth, all because of omicron primarily i think the fed's got to recognize that, you know, industrial commodity prices have been plate for the last several months you have the break-even rates are as low as they were in may of last year you know, so there's certainly some things the fed can reference that says, look, we're going to start the tightening process, but we may be able to go a little slower. >> amy, you mentioned geopolitical risks how do you see those factors into the market, and how do you play that? >> yeah, you know, i guess one point i would make is when we look at volatility, and ex-u.s.

volatility that ex-u.s. volatility, the international volatility has actually been quite cheap compared to domestic volatility. so like fxi, or emerging markets in europe, are always relatively cheap, and the beijing olympics are starting soon. we now there would be a lunar new year soon and omicron has been detected in china ukraine is an ongoing situation, and while people are distracted obviously with the fed today, those are pockets of volatility that could be realized even while domestically other things are going on that. >> thank you both for kicking off the hour with us the s&p up 44.32 at the level there. here's a road map for the

rest of the hours, including microsoft's monstrous quarter. plus at&t reported largely better than expected fourth quarter results. don't want to miss my interview is john stankey, the ceo. and at the moment the best day for dow, s&p and nasdaq since december 21. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed.

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we saw demand increase because of the strains on corporations and the increased consumer activity. coming out of the pandemic, we're seeing a lot of constraints in the economy, and the only resources i said in my remarks that can help drive productivity while keeping costs down is digital tech on the call last night shares getting a bounce. after results did top estimates and microsoft delivered some upbeat guidance. joining us is keith. >> thank for have you me azure growth accelerating. fair to say that software spend

looks solid? >> yeah, definitely. i think microsoft is a very good validating data point the overall software environment remains robust this validates what we have seen in our cio survey, where cios are telling us the growth that have goods in 2021 will continue to be strong in 2022 digital transformation, and securities to make sure that takes place in a secure environment. >> you write, as of last night software valuations hit a new low, down 38 from the peak any reason think they deserve to come down from here? >> i think we're getting to a player where software valuations are looking very interesting here across the board there's still pockets where names are pretty expensive, but names like microsoft trading on our

numbers, that's the longer five-year average. if you look at the overall group on a growth-adjusted basis, that also hasn't come below the five-year average. we call it our software gut check that we published on monday night, there are interesting valuations in software with this pullback. you match that you had with a night environment, and we're starting to pick our places in software where we want to get more aggressive. there's also names like palo alto networks that have good free cash flows, and accelerating cash flows that look interesting at this level definitely more of a live signal from our perspective in software given strong spending environments matching up with interesting valuations >> just to dig deeper on the valu valuation, you talked about accelerating cash flows, what

kind of numbers are we look the at here. >> yeah, so if you -- again we're talking about microsoft, we're looking at that on a fed ratio on our numbers, historically the five-year average has been closer to a 1.9. for someone like adel force, we see it close to 30% growth and right near again, on our numbers, that's closer to 28, 29 times. historically, software trades much more expensive on that. so names like these are actually trading inexpensively versus the growth we expect some of the bigger names that have higher multiples relative

to their historical levels, like service now, we like that name as well. also, when you look at free cash flow multiples. >> some actionable suggestions there, keith to go back to microsoft specifically, though, the fact that a little bit later this quarter we are expecting price increases for office 365, which includes word and the teams app. how big of a boon could that be? >> yeah. price increases are interesting for two reasons. one, the office commercial franchises have a big revenue number one the broader microsoft, so there's enough dollars to move the needle the price increases are not insignificance this rolls in over a three-year period, so we only get one month in the upcoming march quarter, so that is pretty de minimis so it could all to the overall

growth as we roll those out. that could shore up the office franchise. that's a big franchise for microsoft, so it's part of the equation, with microsoft it's always going to be an equation of there's multiple components of growth. there's azure, which is a great franchise, office 365 is obviously a great franchise. all of these are contributing positively to growth, and the price increases are part of that mosaic, part of the incremental impact that keeps us ahead of the street we're looking for microsoft to sustain 50% took place-line revenue growth that's more aggressive than its peers. the overall consensus on the street is more like 30%. it's good for the bottom line, too, because price increases tend to be high incremental

margins. >> and we'll save some discussion about activision for next time. keith, appreciate it good to see you. keith weiss. ranks are based on issues like paying fair wages, cultivating a diverts and inclusive workplace and sustainability microsoft ranked thirdoverall based on some of those issues. now it says it will very to reevaluate the score based on the decision to buy activision, which ranked in the bottom 10% of companies >> it's a particular question, whether there will be objections there, not to mention the antitrust review. still to come, more of my exclusive interview with john stankey. we'll be right back.

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innovation is on sale, and we do believe it will be really important for investors to move toward is the right side of change, given the amount of disruption that we do expect shears of her flagship arkk etf are down over 50% in the last year you can see a bounce in the broader rally. we're seeing, among stocks, up about 3% the fund's top three holdings over the same one-year time span tesla is the only one that's been in the green, up 8% over the past 12 months we'll get result from that name after the bell also teledoc and zoom. you can see on that chart, all

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so far one body has been recovered in the operation it beganwhen a man was supported on an overturned boat, suspected of a human smuggling operation. uk prime minister boris johnson angrily rejected a labor party demand that he resign. >> we have taken the tough decisions. we've got the big calls right, and in particular i am getting on with the job.

back here in the states in atlanta, the world's oldest male gorilla in captivity hats died ozzie was 61 he had been at the zoo in atlanta since 1988 there are currently two female gorillas older than he was, but, carl, cause of death still unclear at this point, but sad news back to you. a little past an hour in trading on this wednesday morning fed day. we have cooled off a bit now up 172, a lot of crosscurrents. bob pisani has more. >> we are 200 points, almost, off of the lows earlier in this week quite a turnaround thank in particular tech in part nice to see. on energy z energy is also

important, consumer tapeles. microsoft was the real keep. remember something here, tech can work in a rising interest rate environment, but earnings have to sound positive it provided the positive body language that people were looking for. that was the real key why we're moving to the up side. nvidia was down 35%, all the semis bouncing today this is a critical turnaround. the other beg theme is oil, inflation, geopolitics, the new high list is basically just energy stocks. exis -- seven-year high in oil a lot of geopolitics around oil and supply issues higher cost is

still a big issue, but some companies are able to raise prices successfully, corning had a good report because they were able to raise costs. over the last -- this is corning -- we negotiated with our customers to increase prices in our contracts to share increase in costs more appropriately i we expect gross margins to expand accordingly. well, good for them, and that's one of the reasons a lot of the companies are continues to do well we're about a fifth of the way through the earnings report. here's the key story the percentage of people are bidding, way, way, down. boeing bought this number down, very big today on their miss, so we're closer to average numbers, 4%, 5%, 6%, remember the last quarter and quarters before, 20% earnings beats

no, that's not happening much more normal earnings expectations, even with microsoft. speaking of microsoft, can i just show you the chart yet? earnings came out just after 4:00, drops 5%, and then when the guidance comes out at 6:00 on the call, moving completely back up 5% think about this the second-biggest company in the united states swings in a 10% range in the afterhours. i know people say it's the bots doing most of the trading, but i say a lot of strayed at 100 shares some of that is definitely retail regardless of whether bots or individuals are trading, carl, thing about this this highlights the dangers of trading in the after hours, regardless of whether it's bots or whether it's retail, 10% swing in the second biggest company in the united states, that's rather breathtaking. >> thanks. see you in a while, bob.

the fed decision may provide in clarity this afternoon. joining us is former governor frederick mish kin great to have you back good morning. >> a good morning to you, too. >> there's a thought that powell or the committee will take in the weaker regional surveys, cooling wage expectations. that's causing the market to price in as of this morning, fewer than four hikes this year. how valid do you think that's? >> i think the fed is behind the curve, so despite some weakness and we're worried about omicron, when you're behind the curve, you have to do your job. the fed has talked about raising rates much faster than originally had, that's good

news, but there's no reason for them to move in the other direction. if anything, they're still a bit behind the curve we've had inflation much, much higher than we expected. i had a "financial times" piece recently that pointed out the flaws in the basic frameworn they've been using, so they need to tighten and get to it temples do you think 50 basis points is warranted? >> no, i don't think they need to do that i think moving gradually makes sense, and similarly, moves gradually on shrinking the balance sheet also makes sense there's no panic here. they just kneel to basically move faster and communicate that it's that simple. >> how quickly should they move to reduce that number, which is

almost unimaginable sum of money? >> i think previous episode, where they increased the balance sheet tremendously during the global financial crisis, they were much more gradual than they should be now in terms of reducing the balance sheet in fact, in this case, in fact, at one point they reduced a bit too much and had to back up a little bit with a new operating procedure, as a result of the changes that they made now, it's clear that they had to get back and get back to something much more normal also, because you want that ammunition ready, when interest rates fall to zero, so i think that they should be much more aggressive in actually not starting with reinvesting, but actually have a plan for shrinkage, not to roll over the debt i think that's what they need to start doing and doing it very soon

i think we'll start to hear more about that, both in terms of the minutes, the announcement and so forth. that's what they have to plan on it's got to be gradual, explained up front, so there's no surprises it's a technical direction, but they need to move in a a very different way. where the economy still was weak and inflation was too low. now maybe the economy is a little too strong, but we don't k know. >> you talk about the fed is behind the curve it's such a tricky tight rope here americans are experiencing some of the highest price increase and costs in, what, 40 years right now? and a fed may tighten moe aggressively than anyone

expected, so nigh huer borrowing costs on top of that i realize that's to tamp down inflation, even if it's a short-term situation around inflation expectations for consumers and for americans, how real is the risk that could translate into longer-term expectations and cause is its own slowdown the fed basically, when inflation gets out of control, frequently they have to tighten so much it causes a recession. that's happened many times in the past t doesn't have to happen there's one episode, i was there in 1994, when the fed was actively aggressive. we raised rates 75 basis points in one evening and that was a

success. they got it done right that time, but on average, it's really tough to do it on average when you get behind the curve and have to tighten. sometimes you miss and overtighten. so i think it's just tough on the other hand, if the fed doesn't do its job, if the center bank does not keep control, you get disasters take a look at turkey, for example, and what happened there, with the political pressure by erdogan to prevent the central bank from doing its job properly that's not a good outcome. it's a tough job the bottom line is, the fed's got to do its job. we don't want it happen in the 60s. we're in a precursor, a strong

economy, much stronger demand than the central bank expected, and in the ' 0s they diplomat do their job when that happened and we got what was called the great inflation by academic economists that was a very, very bad situation. to get rid of it required voelker to take out the baseball butt the federal funds rate went to 20%. we don't want to go back there we don't want to be back in a period where those bad things happen >> a lot of those lessons are coming to bear frederick, always good to check in with you. good to see you again. thank you so much. >> my pleasure. as we head to break, check out the biggest gainers. corning leading the way after that big earnings beat, up 13% also some chip names

we'll be right back. stay with us when you're looking for answers, it's good to have help. because the right information, at the right time, may make all the difference. at humana, we know that's especially true when you're looking for a medicare supplement insurance plan. that's why we're offering "seven things every medicare supplement should have". it's yours free, just for calling the number on your screen. and when you call, a knowledgeable licensed agent-producer can answer any questions you have, and help you choose the plan that's right for you. the call is free, and there's no obligation. you see, medicare covers only about 80% of your part b medical expenses. the rest is up to you! that's

why so many people purchase medicare supplement insurance plans like those offered by humana. they're designed to help you save money and pay some of the costs medicare doesn't. depending on the medicare supplement plan you select, you could have no deductibles or copayments for doctor visits, hospital stays, emergency care and more! you can keep the doctors you have now, ones you know and trust, with no referrals needed. plus you can get medical care anywhere in the country, even when you're traveling. with humana, you get a competitive monthly premium and personalized service from a healthcare partner working to make healthcare simpler and easier for you. you can choose from a wide range of standardized plans. each one is designed to work seamlessly with medicare, and help save you money. so how do you find the plan that's right for you? one that fits your needs and your budget? call humana now at the number on your screen for this free guide! it's just one of the ways that humana is making healthcare simpler. and when you

call, a knowledgeable licensed agent-producer can answer any questions you have, and help you choose the plan that's right for you. the call is free and there's no obligation. you know medicare won't cover all your medical costs. so call now, and see why a medicare supplement plan from a company like humana just might be the answer.

welcome back shares of at&t almost done 3%. the stock had originally reacted positively to the earnings numbers earlier this morning perhaps now some focus on the direct-to-consumer business, at warninger media. hbomax being that key property it's one thing that we covered when we spoke earlier this morning prior to the company's conference call. giving hbomax has had quite a good quarter take a listen. >> when you look at valuations kind of where netflix stands today verse maybe a valuation of

the components of at&t that were represented by media, or when you think about the combined discovery/warner media, there's a pretty big chasm between those two valuations my belief is they built an incredible franchise, and there is a great business and distribution direct to consumer. you've heard me say it before. i don't think there will be a about is where there's six or seven companies globally, but just a small handful there's a race to see who establishes themselves i believe in 2021 we clearly indicated that hbomax and what we're able to do on that platform will be one of those. i would like to see our valuations actually edge up to what netflix is. >> john o. that note, of course, through last year, after the announcement in may, your stop underperformed against competitors. since then, by the way, it's been outperforming this last

month. were you taken aback at all by that wall there a lack of understanding do you think, among your investor basis, in terms of the value you believe you'll be deliver through this often very important transaction. >> it's a good question. if you go back to may of last year when we announced the transaction, at least in my comments and discussions with folks, i made it clear we were doing what we thought was the right thing for the year and long-term. we understood there were a lot of moving parts. admittedlied to this and avoid things like tax leakage. there's some moving parts to this deal. there's some moving parts and restructuring to make sure that capital structure is set up properly i'm not surprised that it went

on obviously in my job i would have preferred that it didn't and there was more stability around it, but i do believe what we have set up, in the combination of warner media with sdroifrs, the respective capital structures and charters and missionses for each of those companies is a very, very compelling value-creating equation as you alluded to, as we get closer to the close date, as the uncertainly comes away, as all the questions about whether or not this is going to happen and when it's going to happen, i think we're seeing investors look at it and say, it is compelling one of the key questions is whether you're going to do it as an exchange essentially a split or a spin. i know you're not ready to share that decision, but can you at least share the thinking behind either one of those? whether you essentially give a

percentage share of discovery, warner/discovery or do an ecchanges offer, whereby you would end up retiring. we wanted to assess the state of market as we got closer to the close of the transaction when we think about going through the dynamics of a split, it's what you said earlier, we would like to possibly over time reduce the at&t share count. this may be one way to do that however, it is a very, very large split. it's unparalleled, in terms of anything that's been done ever in history you know, that certainly gives me some pause. we have a very large retail base in the at&t stock right now as well, and that retail base sometimes isn't quite as deep in some of these issues as the institutional base is so i'm mindful when was we decide to do it, it has to be something clearly indicated so there isn't

confusion in the marketplace one of the things that's guiding us, we wanted to see this for shareholder value. everything we're doing right now is about shareholder value as you know, to execute a split, especially one of this size it would require some value leakage to execute that and get the shares in place. i'm not sure i'm a big fan of that value leakage dynamic right now. i'm also pretty interested in moving through this as quickly as we can. there's some advantages to doing a spin in term of how mechanically it can be done. on the dividend question, let me understand something. a total basis for what you expect in terms of your payout obviously if you did an exchange offer that would shrink the number of shares do you have a dividend number for 2022 in mind >> the day we announce the

transaction. we did clearly, in like the first page say that we expected the payout level was going to be between $8 billion and $9 billion. we gave that range the reason we needed the range is because we didn't know what the market tdynamics would be. anywhere in that range, even if it's at the low end of that range at $8 billion. the yield on at&t's dividend and the restructuring of the business will be in the 95 percentile range so it's a very, very attractive return at current levels >> i mean, why pay dividend at all? if you're going to fashion this, why not pour a lot more money into potentially paving ways not that 4 person isn't

something, but perhaps not reflective of the growth that those investors would expect >> david, you have asked me before, and i think the answer to some extent i have given is, you know, what you need to be able to do as a management team is to gain the confidence of the investor base that we're allocating capital in the and in their best interests, i think last time you and i spoke maybe several months back, i indicated that i was well aware that, as a management team, we have to establish that kind of credibility, and i think six quarters of performance in the way we've done it has started to establish a track record that, when we say something, we get done what we say we're going to do >> a lot of focus on the split or spin question the value leak question he was talking about is the discount they'd have to offer at&t shares at if they were to undertake this massive exchange offer. carl, it sounded more to me and people can make their own judgments they'll go the spin route which is one has its drawbacks in terms of

shareholders getting stock they don't want to own but that's what i heard there again, no decision as of yet, but it's an important component of the transaction >> between ibm, ge and this, there's some complex transactions taking place over a matter of months here. we're going to watch closely great stuff. as we go to break, settling back a bit just south of 4,400 this morning we'll get a check on the cryptos as well trying to rally, 38k a key level and just south of that as well as a new report suggests facebook's crypto projt e em association may be coming to an end. we'll do that next hour on "tech check. don't go anywhere.

watching shares of virgin galactic trying to rebound, up 2% keep in mind the stock is still down 80% almost 80% over the last 12 months, a similar story for most of the newly public news space names, where we've seen big double-digit drops amid the draw down in growth reminder check out my new

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almost 10%, announcing a global licensing agreement for the disney princess and "frozen" franchises it will develop lines of toys for consumer products of disney for games and publishing, fashion dolls, small dolls and morgan, figures as well. they had this and lost it to hasbro, i think they had it until 2016, and then lost it to hasbro, now they have taken it back the market likes it. >> the market likes it hasbro is under pressure down 1.5% on this news as well. disney princesses a hot commodity in our household as i'm sure many parents of young children, little girls also keeping in mind we've got more earnings after the bell in another busy day, four reports already. the two biggest names that i think are going to be in focus, two big tech giants, it's going to be tesla and going to be intel. now in terms of tesla, david, we've seen those shares are up

almost 3%. 2.5% elon musk who said last year he won't always participate in the quarterly conference calls is expected right now, as of right now to be on the call tonight to give a product update to investors and of course cyber trucks in focus, the austin giga factory and production levels around model y will be in focus and things like battery and supply chain constraints and semiconductors which, david, takes us back to intel. >> yes, it does, intel obviously also getting a reversal of something in the eu, the stock is up 1.9% tesla is interesting as particularly if musk is on the call $53 billion expected, $5.3 billion in profit works out nicely in terms of our profit overall of revenue is. won't hear much about space, will we? >> probably not.

the cyber truck is designed with the same steel they're using in the next generation starship rocket, for what that's worth. record annual profit expected at tesla. intel we get results on the heels of that news for that major investment $20 billion in ohio for more chip-making capacity so a lot to be watching for after the bell that does it for "squawk on the street." "tech check" starts now. good wednesday morning welcome to "tech check." today three 1% swings in the first hour of nasdaq trade where do you look to for buys? microsoft beating estimates again thanks to strength in the cloud from gaming to pcs, a