2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm becky quick with joe kernen and andrew ross sorkin tgif we will look right how at the u.s. equity picture. dow is down by 100 points. that doesn't seem like much compared to the week s&p is down 8. nasdaq up by 40 points if you look at the week, it has been a heck of a week. you know this if you have been watching you will see for the week the dow was down the s&p was down 1.6%. nasdaq off 3%. for nasdaq, you can add the

number of weeks we have been seeing this. the dow is down 7.5% from the all-time high. s&p down 10.2% it is in correction territory. nasdaq is off 17.6%. you are talking close to bear market territory we dipped into that during the trading session and came back out of it. 17.6%. we will see how things close treasury yields. 10-year is yielding 1.8376%. that spread between the two-year and ten-year is tightening that is a source of concern. >> that s it is. joe said shares of apple surging. beat estimates of $1.89. here is the breakdown category by category.

iphone up 9% services revenue up 24%. other products revenue which includes home and wearables up 13%. then this one, i think, surprised a lot of people. nobody focuses on the mac. up 25% mac computer revenue up 25%. ipad revenue the disappointment on the list down 14% that missed estimates. apple ceo tim cook expects supply constraints in the march quarter to be less than the december quarter he also said apple was seeing inflationary pressure just like everybody. that is probably making people less excited it was a beat, guys. with the exception of the ipad piece, i wonder if everybody bought the ipad during the pandemic i can't figure out the mac piece.

they got their act together in terms of macs. they put attention on the computer over the last 18 months that's done something pretty powerful >> i have personal questions i usually go to andrew on this, becky, about the products. i was listening to dom dom said the ipod is old there are new ones that are evolutionary >> ipod is really old. it is very old >> are they bringing anything out similar? i could use something instead of a big phone when i have gym shorts on. that's too big. >> is that a phone in your pocket >> i put it on my arm. the other question is would you use something that stays in your ear better i wonder if you are going to get

my a gift, sorkin. would you send me one with wires? are those back can i have a little small thing i can clip i like the little things if they can make it better, i would use it >> here is the present coming your way how about an apple watch that you can strap to your wrist. >> you can wear it when you're running. >> phone on your wrist, joe. we can get you ear pods. wireless to the wrist. >> still wireless? i heard we are going back to the wires. >> i still go wireless it is more comfortable easier i don't understand people with the wires. >> they sell them in different sizes. >> i want to get the apple tags in my kids

is that legal? >> no. >> there is a consent issue. your kids are old enough to consent. you guys can work that out. >> i didn't think about that it seems like it i would like it. much better than find my iphone. >> should we sayit on the air? you know -- i don't know how you su set it up with the kids. you can track their phones >> i know that i would not be that intrusive. if they wouldn't know. >> you can track the phone if you like your kids are older. >> i know. >> you have to work that out yourself >> okay. >> for safety reasons. scary world. >> one of the things with apple is the new things they come up with

we used to wait for them to come up with the car. tim cook talked yesterday about the car and how the growth has been phenomenal. people want to get an apple card did you get a download it messed up my phone. it is now the first icon it is now moving everything around it is the incremental things to give you more value and make it mor better for you a million things i'm using it for to make it harder to leave home without it. >> i'll start asking becky the apparentle is back and big nano 5th generation apple ipods. do you not know about these? >> i did not realize the ipod.

>> you were dismissive you gave me the boomer look. >> get off my lawn boomer comment. >> get off my lawn once again, you were wrong i got it from dom chu who said they used to be revolutionary and now evolutionary send me one of those >> you are talking about an ipod touch? >> nano. they $129. $199 search apple ipod. >> i still have my old ones. >> i don't know how you can make a better aipod >> maybe the watch is the answer >> i'm going to go out on a limb, joe, here, and say the

ipod nanos -- >> are used? >> from a different generation, my friend. i don't believe these are still manufactured >> what was he talking about these are evolutionary >> we have to get dom here. >> they make the ipod touch, but not the classic ipods. you need to buy one used. >> they still make the touch it is like a mini phone without cell service. >> will that work for me >> not for what you are talking about. it's too big you want the nano it was a cool things that clipped on your shirt. >> it is complicated >> while we're on the topic of music. we should talk about the big issue in the industry. that would be sirius gain off s

spotify loss neil young pulled his music. sirius announced the return of the neil young channel introducing his songs and telling stories. wall street journal reports that they reached out to young's team on wednesday the channel was on a limited run and now returned for seven days. it is streaming for a month on the app. i don't know if you saw the story that how cost by tcostly i was. he said it was worth it to lose it and he is in a position to say something because the money is not as important as it would be for the new artists coming up he hasn't sold his catalog that's why he can do this. >> i would feel inclined to do it. >> if you have all of the money you need, maybe you like to control your catalog

can you imagine your songs used for stuff you didn't intend? "ring of fire" used for a hemorrhoid cream >> some of these deals, they are selling the catalog and putting restrictions in place of what can be done with the catalog interesting things happening if you look through the bruce springsteen agreement. i don't think it was made public. >> you can't pull it off spotify if you don't own the music >> there are things you can limit. >> the taylor situation where "red." what was the first "red" song? the way to re-release to have control. >> updated version. >> i like the title. one of my favorites. when we come back, we

will -- >> i can listen to it on my ipod >> shares of robinhood are plunging this happened after earnings yesterday. down about 14% right now we will take a closer look at the trends in retail trading right after this later, don't miss the first on cnbc interview with chevron ceo michael wirth. he will jo uins in the 8:00 hour "squawk box" will be right back. 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. thanks for coming. now when it comes to a financial plan this broker is your man.

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shares of robinhood losing ground in the pre-market the stock is down almost 14% after the loss of the fourth quarter and predicted weak revenues for the current quarter as retail trading explosion cooled off from last year. the stock is now off 30% this month. down more than 70% since the ipo last july. exactly one year ago today, robinhood halted trading in gamestop and amc and some of those concerns still rippling through. with the wild ride on wall street, our next guest says retail traders are buying microsoft and apple. joining us with more details is jj kinihan good to see you. >> thanks. >> let's talk about retail traders. part of the reason there is so much pressure on robinhood shares is the company said their

average modaily users was down is that the trend you have seen? have retail investors pulled back or is this a robinhood specific problem >> if you look at the volumes we are seeing overall in the market, becky, you rings refered one year ago we are above the 2019 areas in terms of volume. you know, to match the volumes last year at this time, i think for everybody has been difficult overall. that said, our clients are staying engaged and it was interesting to see as we talk about what has happened so far in january although january has been five months long by itself so far this year. the end of 2021, something interesting happened to the clients. in december, becky, they were

sellers of equity. retail traders tend to be buyers they were sellers in december. maybe for tax reasons because people were concerned. with that, when microsoft and apple. when things are in trouble, those are the places people turn overall. going into apple earnings, we saw overall people turning there right away microsoft not as much as people do until the last few days where they really ran to that stock. when people talk about buying the dip. those are the first two stocks that retail traders start with >> jj, were they buying the dip before we heard from microsoft and apple? they came out with strong earnings did they wait until they saw the

good numbers >> apple absolutely microsoft, there was more trepidation than i would have expected in downward movements when we see the downward movement, those two get heavy activity apple was normal microsoft, people had trepidation this time. a lot of analysts were nervous also it wasn't until tuesday when or clients started to buy that more heavily. >> that's part of my question. this situation where retail traders are thinking show me the money. let me see the earnings report before i'm willing to jump back in >> i think overall yes one area that is interesting you talk about tesla obviously a bit. it is interesting for retail traders. actually the ev market continues to be pretty popular overall with our clients you know one thing that is interesting to me, ford was a

buy every single month by clients and heavy by last year december, they started to sell some of it that has continued even though as people are taking nice profits, but in the ev space, we he see great interest. a lot of people played ford for ev exposure because in pure dollars, it was less money to do so it is interesting that one started to turn which makes my think tesla is one that obviously popular among clients. i use that stock as a measure of confidence people get more confident and they jump into that one. yesterday afternoon, we started to see more of our clients going in as it sold off. i'm interested to see what happens in the next week. >> jj, i'm wondering about the retail trader. you have the s&p down 10% and

nasdaq down 17%. that is a scary thing to retail traders. especially those who have not lived through a market like this they are used to markets only climbing higher. you said your retail traders were selling what is has happened in january so far >> so far in january, becky, it is more normal trading toward the buy side than sell side it is not, you know, last year as you discussed, a lot of people went in and bought and they were rewarded good or bad many people rewarded for buying more blindly this year, we have seen people be more cautious as they go in to buying things and we're seeing more names that you know, so to speak. we are not seeing the name stock mania. the names are buying are stronger >> that's what i'm trying to

figure out we lived through the dot-com bubble bursting. i wonder if this is a similar shakeout or not. are these people committed to the markets or long-term investors or will they get shaken out with the vix off? the market is getting worse. dow futures down 187 points. nasdaq is down by16. s&p futures down by 20 this is not what they were looking for this week. >> absolutely not. becky, one of the things that is a surprise to many is people are continuing to be engaged with the markets. many people who came in for the first time last year, we thought there might be a wave. back to the first question people bailing out of the markets overall. people are still engaged with the markets. one of the things, you know, we will see is if they continue to do so. we settled in on a nice level.

i think we will stay there people started to get in their 30s, et cetera we had 20-year-olds and 30-year-olds for the first time excited about the market the loss here before last year, the biggest concern is how do we get younger people interested in the markets overall. we didn't think they would come at once so to speak. it is great we are seeing people engaged in the markets and want to trade and invest overall. >> jj, great to see you this morning. >> have a great weekend. >> thanks. andrew. thanks more to come on "squawk. executive edge is next we have shakeups softbank and home depot. that's ahead look at the reporting from caterpillar. we will have instant reaction and the teinrview with the ceo

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welcome back softbank confirming reporting from yesterday marcelo claure leaving the company after nine years he joined softbank in 2019 he later became the ceo of sprint which merged with t-mobile in 2020 recently, he led the turn around plan for wework after adam newman's departure it sis a big move inside softbank raises questions of who will take the same role they have appointed somebody to do that. marcelo had been a chief arch architect. created as we look at the

numbers with $60 billion of value between what he had done at softbank through sprint, which merged with t-mobile and then wework. lots of speculation and reporting of what led to it. part of it was a fight over money as so many of these things are. there had been an expectation and contract between him and masa unclear if the board was on board with that arrangement. that would have been worth billions of dollars. that didn't happen sources tell us that there awas understanding made and expectation now we may see claure start his own fund and make his go at being the next masa son >> it sounds like he was able to say i created $60 billion in value for you. you will not give me the billions you promised as a cut

because the board said no way? this is too much >> my understanding and a bit of a style situation here in terms of who thinks what clearly there was some kind of understanding. some kind of contract with metrics and a model that would have paid out marcelo an enormous amount of money based on the understanding and arrangement with masa son. given the pressures in japan and inside softbank, it sis unclear if the deal was signed off by the board and when it came due, if you will, meaning the metrics and model showed there was going to be the very large payouts there were others inside softbank that said no and became

a legal fight over how these payouts should or should not be made that is what led to the departure. there was also a view he may want to go run his own fund as well i think you combine the two. nothing is black and white it is somewhere in the middle. >> you bring up japan. you see what happened with ghosn. we should tell you about home depot ted decker will take over the ceo role that starts on march 1st decker joined in 2000 and served as executive vice president of mercha merchandising. craig menear has done an incredible job since he took over in 2014 home depot shares are up 260%.

this is a guy who has been there for a long time. definitely did a great job managing the company we don't have time southwest is going to bring back alcohol. they hadn't had alcohol on flights. >> i know. i haven't been on a flight it is unruly enough. you don't need to add alcohol. >> and diagio. people at home imbibing. >> running out of the long term stuff. >> anything that is barrelaged it takes years everybody is staying home and trying new things and you can buy liquor high end tequila and margaritas. this is getting serious. >> the champagne usissues at ne

year's you can't buy high-end champagne. coming up, steve is here wth t fook atheerheed can pull off a soft landing. that's next. >> announcer: executive edge is sponsored by at&t business keeping your business connected. , 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.

stoer . welcome back caterpillar with adjusted earnings at 269. refe revenue came in at $13 billion. if you listen to the chairman, amid the ongoing supply chain constraints, they continue to execute strategy for profitability and striving to meet customer demands. this happened in what proved to be a dynamic operating environment. that is whatis what they have ts far. beat on the top and bottom lines. andrew. meantime, all of the concern

of the hawkish fed in the market there is little consideration. can the fed pull off a soft landing? we will get to reporter steve liesman who looks at how the fed could pull it off. i like the optimism, steve >> you got to give the idea a chance let's walk through jay powell and his conference emphasized the inflation risk and uncertainty over how much the fed will have to address it. that freaked the market out. he laid a path for price increases could come down without drastic measures that is the fed not doing much more than what they would to normalize policies he could tighten the fed could tighten modestly at first the supply chain issues begin to resolve over time this year and later next year. virus impact eases and fiscal drag helps restrain the economy.

>> i would say it isn't just monetary policy. it is supply side improvements and less fiscal impulse likelihood monetary policy will do. >> powell said the job market and economy are strong he believes it is possible to tighten policy without doing damage to either the key is the bounce back from the economic week for the next couple months with the winter brought on by the omicron variant. it is a best guess the fed tightening policy begins with steady rate hikes faster. not much more than the fed would do to normalize policy you get balance sheet reduction. it goes on auto pilot in the background the fed escalates if the inflation does not respond and declines powell made clear he would act if inflation would not respond to the initial set of policies

that is not the first impulse of the chair or committee soft landing is not out of the question i'm not sure it is powell's first forecast it needs a lot of help from other factors and with luck, not much more than what the fed would otherwise do andrew >> how would you handicap that if you were to put a bet on that, what is the percentage >> i knew you would ask that andrew, can i claim humility i didn't see the forces coming together that led us to the inflation where we ware right now. i understand how they will work themselves out i thought the fed argument of transitory made a lot of sense i would say i thought the fed should have eased back on the policy gas pedal earlier things came together in ways people didn't expect i guess there is some possibility they improve in ways

people don't expect. you can have people come back to the work force if you don't have another virus wave and you don't have another supply problem and we can catch up in the ports and other places that is possible i do think the fed needs to do the policy tightening it will do, but at the moment, it looks like it will do. if you look at the futures and what it is priced at, it will not do more initially than otherwise do if it was normalizing policy you get 1% or 1.25% in the current year that is not that bad >> a humble steve liesman. thanks coming up when we return, apple shares jumping after a big beat on earnings and revenue we will dig into the numbers next. and godr. scott gottlieb wi talk about the covid headlines cknd 4tys in new york ci

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welcome back to "squawk box. apple reporting a record profit of revenue shares are higher in the pre-market this morning. joining us is gene munster gene, we talked about it pretty much beat on every

metric i was surprised. happily. we all were on the mac side. nobody was focused on that ipad piece was the only disappointment the question is if we didn't have the supply constraints, where would we be? >> we would have 18% revenue growth in the reported december quarter. they reported 11%. it would be 7% higher. guidance, if you back into it and implies a 3% increase from where the street was at and they would have gotten it up around 10% if not for the continued fx headwind or supply chain headwind with the fx that is normalizing it there i want to jump back to the bigger picture to put some perspective around this quarter. i have seen a lot of apple quarters i have seen many impressive, countless, impressive quarters

they blur together at some level. there is a recent bias i want to guard against when i say this. this was a particularly memorable quarter given the strength we outlined the headwinds. it wasn't supply chain ships parked outside ports workers not working from corporate. you've got, obviously, the pandemic you have a spike in logistics cost multilayered they just, with the exception of the ipad, they crushed it. i'll remember this one >> do you relate tre-rate this stock? i don't know if you think of this as a growth stock or value stock at this point given where it is at relative to the other what's the take? >> the take is the environment is not very supportive of these

tech companies, that is pretty obvious here it is just a high bar. if you put a typical beat like this and all of the context, i expect the stock up 10% today. there is a dynamic and near term which is, i think, clouding the significance of the strength they have. ulti ultimately, fundamentals will win and cash flow will win i suspect this cloud, too, will pass around the broader market investors will look back and re-rate these higher my boldest prediction is ultimately, the multiple expands on apple they get the credit for continuing to deliver hardware that operates as software business and separate with the other markets with augmented reality and metaverse and car.

put it together. i still think this is a $250 stock in the coming years. >> how important are the next generation inventions in terms of your thesis one critique, and it is often unfair, but one critique is they have not innovative. lots of innovations happening under the hood than what people are used to when they look at the creation of the iphone or creation of the ipad >> i think about the core business today if you think about it. the 5g upgrade cycle i think that core business is probably around $200 that is probably not enough upside for many investors to own this for the long haul you do need these other markets. it is not just about introducing other products the products have to be introduced to massive markets. that is the combination that

they need to unlock. so, to answer your question, it is important to get to 250 and you have to have optimism and expansion around the markets what ultimately it comes down to is getting into the markets and delivering growth. i put this in the perspective on the markets. some form of headset wear wable we may not see it until next year if they get into those, they are three years out when they add up with the income statement. you could see react-acceleratiof growth >> gene munster, we will see thank you. >> thank you >> joe coming up, just three. only three nfl games left this season media companies are making the most of what has been an incredible surge in viewers after the four unbelievable

games last weekend more on that after the break >> announcer: what's working is sponsored by comcast business. bounce forward at comcastbusiness.com. throughout history i've observed markets shaped by the intentional and unforeseeable. for investors who can navigate this landscape, leveraging gold, a strategic and sustainable asset...

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looks like it's unanimous.

welcome back, everybody. chevron just out with its earnings and on an adjusted basis they came in with earnings with $2.56 a share. the street was looking for $3.13, so a miss on that level but if you're looking at revenue came in better than expected 48.13 48.13 billion versus the $41.6 billion. a miswhen you're looking at the adjusted numbers but i'm not sure what the analysts were anticipating they also had losses onearly retirement of debt and pension settlement costs and foreign currency effects that all

decrease the number. so you can see the stock is off on this. we should point out yesterday chevron shares hit an all-time high after the company announced a bigger than expected dividend increase for the court 6% dividend increase and of course that's happening as oil prices are hitting these highs before these declines were up by about 55% for year to date and as oil prices touching at $90 a barrel and trading earlier this week. we're going to talk a lot more about this and in fact in the 8:00 hour we'll bring you a first on cnbc interview with ceo michael wirth, really dig through what kind of pressure they're feeling on shareholders rather than give the money back and reinvest and drill more wells talk to him about all these issues coming up in the 8:00 a.m. eastern hour joe? >> meanwhile nfl conference championships are this weekend after last weekend's ratings

bonanza for the four stellar games. joining us now former partner at -- big games coming up. the nfl season is going well, and certainly there was some conjecture i don't know the nfl had been damaged from a plethora of crazy issues. but now it's all said and done regular season was up 9% versus last year, flat with 2019 pre-pandemic the wild card was up 22% from last year as you point out, down 3% from 2019, but then the divisionales with those four games up 20% and even up 12% from the pre-pandemic 2019 so that's back all the way now we've just got to think about this weekend and the super bowl >> that's right, joe yeah, things are really great for the nfl and their partners we think because it's sports family everyone in new york anyways is being given free money to

gamble and it's translating into much stronger ratings for the nfl >> i was going to say that i was going to say was that the most important or is it obviously fans are back in the stadiums, the excitement is there i don't know whether it's a better line-up of teams. those are pretty -- for me it's interesting, obviously, this sunday with the bengals and the chiefs as far as the possible super bowl, is that matchup whether it's the 49ers or the rams versus the bengals or the chiefs, is that setting up for a really solid super bowl, do you think? it's nbc i know on super bowl sunday >> it's going to be great. if you had a choice you'd want the chiefs coming back again or you'd want the rams. the bengals are a small market team so maybe that's not the one

you want but it's not going to matter as long as the game is good >> i cannot believe this article, michael, i don't know if you saw it in "the wall street journal" today, but they spend -- and i read it and it's fascinating. it's about mahomes and burrow which you just alluded to have small hands, but it's very different from the way they used to grip the ball but maybe it doesn't matter bret farve, peyton manning had these big mitts, but these guys do it without that which is remember his signature move he'd go like that and not throw it and fake everyone out did you see this today it's fascinating but just made me more excited for the game with these two quarterbacks on sunday >> i could have been a quarterback, joe i wasted my time

>> now i could see with receivers, but i don't understand with -- when do you see actual new highs because i would think gambling would eventually -- sports gambling would eventually propel us to all-time ratings in some of these -- some of these games. >> well, here's what's shocking. last week's games were the highest rating in five years for that weekend what's shocking we have 20 million less homes watching tv you're seeing new highs just because the base is up as you're seeing more states become legalized you're going to have a great couple years of sports gambling ratings. that's clear as day. >> overall what's it say about cord cutting, streaming? once again it's content. content is king, doesn't matter how you deliver it but what -- does it change your

outlook for the landscape, media landscape? >> we've been saying forever the bottom of the cord cutting, the floor is going to be 50, 60 million homes, people who are sports gamblers, who are sports fans we think the button stays for sports fans as long as the best content stays in the bundle for sports this is part of the path we've seen it's great to see the nfl being so strong. because it's part of the thesis it's not going to die. it's going to keep eroding to a base of of course sports fans, and it's going to happen the next three or four years >> so you wouldn't take the bengals even with -- are you just saying they don't have a chance is that what you're saying you have to make picks, don't you? >> it's going to be chiefs, rams i really wanted the bills. >> why don't you just sell everything you have in the stock

market and put it on the chiefs if you're so smart, nathan go ahead if you know this for sure >> maybe i'll do that. >> doesn't it worry you everyone's betting on the chiefs is it that simple? it's just a slam dunk. >> we'll see monday morning, okay i'll make a side wager with you. >> i'm hoping against hope borough and his buddy they are a wild card, but the chiefs, wow was there any defense in that buffalo game, though but do we want any defense maybe we don't >> thank you, michael. we'll talk next week you can watch -- as i said you can watch this year's super bowl on nbc on sunday, february 13th. i don't know if it's al or mike but i know chris is going to be there. >> feel like i was just

listening to my son and his fourth grade friends talking about it when we come back carlos gutierrez will be with us. he's going to talk to us about the challenges of running a consumer business in a time of rising inflation it's something he knows very well about from his time at kellogg. stick around "squawk box" will be right back. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ hi, my name is cherrie. i'm 76 and i live on the oregon coast. for a changing world. my husband, sam, we've been married 53 years. we love to walk on the beach. i have two daughters and then two granddaughters. i noticed that memories were not there

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one more trading session to go in what's been another wild week on wall street. we'll tell you what you need to watch in today's trading

session. inflation nation former commerce secretary and kellogg ceo carlos gutierrez shares his thoughts on the current business environment and what ceos should be focused on as we head into a rising rate environment. he knows well from his own time dealing with inflation and a variant of the variant ba2 is being called the stealth variant of omicron and researchers are on high alert. we're going to speak to dr. scott gottlieb about what it could mean for the country as we continue to battle against this pandemic the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" right here on cnbc. on a friday morning opening up in the red on the dow. let's show you u.s. equity

futures at this hour did i say down what did i say >> it's going to open up down. >> it's going to up down, that's exactly right. the dow looks like it would open down about 160 points. nasdaq would be off close to 10 points s&p 500 if it opened up would open down. apple would open up. some headlines at this hour. $100 per barrel of oil could be the price tag for what we may see this summer. it'd be the first time since december 2014, all seeing that happening later this year. they're saying continued increase in demand combined with lower inventories in production. meantime softbank confirming that reporting from mine yesterday the chief officer

departing. the departure centered over a dispute over pay and a possible eventual successor to soft bng chief executive officer. meantime home depot getting a new ceo who had been chief executive officer since 2014 he's going to be stepping down march 1st and succeeded by chief operating officer ted decker and he'll remain as the board chairman joe? >> okay, let's get this morning's pre-market movers and for that we go over to dom chu who joins us who made no plans for sunday, i'm sure >> no, i have no plans for sunday especially sunday evening. that's the game i care more about even though i do want to see the bengals do pretty well against the chiefs, i'm very much concerned about the niners and the rams i can't imagine sean mcveigh is going to lose seven games in a row to the rams. but anyway, we'll talk about the

morning movers first of all, the earnings crossing not too long ago. chevron coming out with mixed results. revenues did come in better so on balance with rising oil prices over the course of the last year plus you can see chevron shares down about 1.75 so we'll keep an eye on chevron. also watching what's happening another economic bellwether of sorts. that's caterpillar both profits and revenues beat expectations due in large part to continued global demand for their construction and heavy equipment machinery, because, yes, the world is trying to recover from the pandemic and economic activity is going higher nonetheless, though, shares are down about 1% in the pre-market trade after a gain about 14% in the last year. then there's apple, the talk of the town right now it's going to be a positive contributor for the dow even though we'll open lower for the dow so far this moring apple shares up 4% right now would contribute roughly 38, 40

points or so to the overall dow. apple better expected profits and revenues 11% revenue growth over the same time last year supply chain issues still a worry there. apple shares up 4% right now, and robin hood is probably the big decliner to talk about this morning. the brokerage firm comes out with results that were mixed the loss was wider than expected but revenues were slightly better the concern is about a decline in monthly active user and a forecast for this current quarter that fell below wall street estimates as a result on balance robin hood shares down about 13% to 14% in the pre-market trade. so four big movers, very thematic with regard to things happening in the marketplace right now. but if you want to take nfl i'll talk nfl >> four teams. to me subbliminally, but did you

say you're hoping for the bengal so your 49ers face the bengals not the chiefs that's what it sounded lake to me >> so here's what i would say. the common denominator is the niners in the super bowl i want the niners in the super bowl because i'm a california native born and raised in the bay area, big niners fan i would say there's a poetic kind of thing that would develop. >> and you'd think you'd win just say it. >> well, we won the first two. >> and you'd think you'd win >> we also beat that team earlier this year. here's what i would say, it would also be fun to watch the niners and chiefs play again and hopefully the niners come out on top this time in the super bowl. >> i'll be there on -- in your hometown monday i think. >> oh, really? >> yes but i'll be back in time for you with the super bowl. >> just work on the golf game.

we want you on tv out there doing that >> nobody needs to see that. nobody needs to see that that's one of my big fears i'm nervous enough in front of like the caddies >> i took a screenshot of you one time hooking one in the water. >> you did >> i did >> when was that that's really f'd for you to bring that up for no reason. it's like gratuitous nastiness well, that wasn't the only time i've done that it could have sliced it in the water too depending on which side the water was on. >> i'll see you next hour, joe coming up when we return managing through inflation a number of ceos running top companies they've never seen a scenario like we're seeing now we're going to speak to carlos gutierrez, get his advice on today's corporate leaders after the break. take a look at futures we are opening in the red this friday morning

dow down about40 pnt 1ois. we're back after this. what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

it is our job to get inflation down to 2% in a situation where the two goals can be intentioned it's a difficult one. but i don't think they are here, though because i think a really significant threat to further strengthening the labor market

in the form of higher participation over time is high inflation. and also high inflation is taking away the benefits of some of these large wage increases that we're seeing now. so we do hope to achieve -- and our plan is to achieve both of those goals. >> that was fed chairman jay powell with his latest thoughts on inflation, and they are concerning inflation does seem to be one of the biggest concern for ceos these days but our next guest there's an entire generation of managers who haven't managed with inflation and what we're seeing now. the former ceo of kellogg where he managed kellogg mexico when inflation was waging, and it's great to see you this morning. we think inflation is bad at 7%, but you were doing it in mexico when anything was 60% to 100%.

i can't even imagine running a business under that environment. what did you do? >> yeah, we had hyperinflation you know, there is a play book for inflation. obviously the intensity of the tactics a lot different when you have 60% versus 7 or 8, but they're pretty much the same and the -- the first principle, i believe, is protect margins. and very often the debate is do we increase prices if inflation is 6 can we get away with a 2% price increase? is your goal is to protect margins at all costs, then you will take a price increase as close to inflation or higher as you can. very difficult to get back your margins when you're under inflation. you'll get back the volume you'll get back the business you may have some short-term impact on sales, but number one priority is to protect those margins.

and my concern is that with this statement of temporary inflation, you know, there's almost a lull, a complacency, and that worries me. i think that term has done some damage because what it tells some business people is we're going to be okay, don't worry about it, it's just temporary. but it's not as if though inflation goes to 7 then it goes back down to 0 or, you know, minus 7. inflation is here, and managers have to deal with it right now >> you know, i think a lot of ceos weren't lulled by that whole transitory inflation thing. you know that there are a lot of companies that are raising prices they've announced price hikes already. we know there will be more that will be rolling in the next several months and many of these companies from proctor and gamble on have made the point they're able to get this pricing power, that consumers are still buying, and they're willing to pay up at this point

is there a point do you think consumers -- where consumers will not continue to do that is there a point where -- what's the tipping point? again, when you were dealing with 60% inflation, how frequently were you rising prices and by how much >> we were raising prices probably once every three months and the -- the thing that we need to do we used to call it next in, first out you raise prices on the basis what you think your costs are going to be four, five months from now today people are raising prices based on the cost today. and that's okay, but it is a little bit of catch-up because by the time your price increase comes through you're already having to pay for new materials that come in at a new price. but the idea is to get ahead of it so if inflation is at 7 and you increase prices at 2 or 3% because your financial planner said it was transitory, temporary, not to worry about

it, you're going to be behind the curve. you're going to lose margins, and then instead of raising another 5 or 6 you're going to need more because, again, you missed it. you fell behind. and what you can't do is fall behind so in the short-term consumers may say, boy, this is a big increase, i'm just going to go away and buy something else. they will be back, and also you will have the ability to invest whereas your competitors who don't take a price increase and want to take advantage of volume will not have the ability to invest to drive the business because their margins will be impacted so over time you're better off protecting margins, taking the increase, taking a hit, looking at operationally looking at the balance sheet. we're very much a pnl culture,

but businesses need to start looking at working capital there are very easy tricks, very easy tools to measure working capital. but over time what companies learn is you want to collect early and pay late and when everyone starts playing that game, someone loses but as interest rates rise, working capital becomes a big deal and that's not something that operators today in the u.s. are, you know, accustomed to look at, and rightly so >> carlos, i understand it entirely from a management perspective and trying to make sure you're protecting your company, protecting your margins, protecting your shares and your shareholders. but i also as you were talking realized why jay powell may have been talking about transitory inflation for a while. because what you're suggesting the smart way to do it as a business leader is to not raise your prices based on what you're paying now, raise your prices based on what you think you're going to be paying in four or

five months. and that sounds like a self-fulfilling prophecy if companies everywhere are raising their prices to what they think to protect their margins and don't get their lunches eaten, if everyone is doing that inflation necessarily will continue to rise. >> i think that's a great point, becky. and i often wonder if jay powell used the term transitory so that people would calm down and not get overly excited but regrettably at the end of the day our job is to protect our business and one way to protect the business, the most important way is to protect those margins, so i understand exactly what you're saying and it's a bit of a philosophical issue. and i do wonder if he said that because he didn't want people to get too excited. but, you know, people need to get excited. we have to protect the business and we have to protect shareholders interests >> it reminds me when they were saying you didn't need to wear

masks because they were worried about getting ppe running out. when you start talking about the shortages the shortages create greater shortages because people want to hoard. thank you very much for your time this was interesting let us know if you see additional things with this. coming up, student loan debt on the rise, and some borrowers are questioning if it's worth it and then later a call to unionize at starbucks growing, and young baristas are leading the way. what it could mean for the company. that's straight ahead. "squawk box" coming right back time now for today's aflac trivia question. founded in 1916 what company was originally known as the pacific airplane company

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about 43 million americans have federal student debt amounting to nearly $1.6 trillion total. yet a new survey finding many burrowers are questioning whether it was worth it to take on that debt some of the results of cnbc's invest and new student loan survey may surprise you. cnbc's personal finance correspondent sharon epperson has more >> reporter: after taking out student loans and working her way through school kate earned a masters degree and owed about $100,000 in debt >> i don't think i went in understanding how long i would be paying those loans back >> reporter: it's been nearly 20 years and the 39-year-old senior communication specialist still owes over $30,000. was it worth it for what you're doing now? >> i used to be roly proud i had a masters degree but now it

feels a bit foolish. >> reporter: she echoes the sentiment of many borrowers. a new survey found more than half of those with federal loans 54% say taking on student debt was not worth it >> it's a mortgage without the house at the end of it >> reporter: like her many borrowers said once the government's pause on student loan payments ends in may they'll have to delay buying a home and other financial goals to pay down their debt economist kristen brody says that can create an endless cycle. >> you have less money to pass along to your own children, which means they're more likely to need to take out student loans if and when they get ready to go to college so forgiving student loans could help mitigate some of that cycle. the national survey found 57% of believe president biden should make student loan forgiveness a priority >> it will forgive the loans not just of people who are experiencing economic distress but also people who are perfectly capable of repaying

their student loans. >> we should be forgiving $10,000 minimum in student loan debt >> reporter: president biden campaigned on this proposal. some democratic lawmakers want to go further, canceling up to $50,000. but these proposals haven't made it into major legislation. for burnic who held job at nonprofits and government for over ten years there may be another solution last fall the biden administration made it easier for certain borrowers who have worked in public service to get credit for payments and have their remaining debt forgiven. >> the federal student loan held by the department of education, we appreciate your patience. >> reporter: but it may take some time. she and other bahoars have until october 31st to take advantage of the temporary changes to the federal government's public service loan forgiveness program. the education department says over 70,000 student borrowers have qualified for debt

forgiveness since it overhauled the program last fall. andrew >> so before you go, student loan forgiveness i should say, you know, is such a hot button issue. how do people in the survey beyond the majority saying it should be a priority for biden >> well, you know, views on how to do it exactly, andrew, were mixed. about one-third of the respondents, 34% said all loans should be forgiven another third, about 35% said they should be forgiven only for those in need. and one in four or 27% said they should not be forgiven for anyone and we have a lot more about this survey on cnbc.com/investinyou and i'll be breaking down the survey results even further in a special chat on twitter spaces today at 12:00 p.m. eastern. you can join me then andrew >> very cool sharon, very cool and it is a hot button issue and a debatable one. and those figures demonstrate that we should note that nbc universal and comcast ventures are investors in acorn

thanks, andrew much more "squawk box" still to come this morning. we're going to be digging through the latest covid headlines with dr. scott gottlieb next. plus don't miss our aeterview with chevron ceo michl wirth. that's coming up in the next hour stay tuned "squawk box" will be right back #1 for diabetic dry skin #1 for psoriasis symptom relief and #1 for eczema symptom relief. gold bond. champion your skin. 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. they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world.

starbucks stores across the country seeking to unionize with young baristas leading the way kate rogers joins us now with more hi, kate >> hi, joe,gle good morning. since notching a win in early december two buffalo cafes have formally organized and more than 30 from boston to seattle are now seeking to do the same collaborating with baristas in buffalo in zoom to talk more starbucks said the speed has been surprising as young workers seek to improve their earnings and working conditions referring to this cohort as a part of generation "u" for unions. the shift toward unionizing comes as americans approval of unions is near record highs at 68%. the highest rating since 1965. what's more 77% of young adults ages 18 to 34 approve of unions.

baristas like leo hernandez are hoping that organizing provides a direct line into management and will lead to better pay and working conditions at the tallahassee cafe where they work >> i love starbucks and all the benefits they have they could always be better. what i make currently does not sustain what i need to pay between car loan, car insurance, rent i am the main provider in my household currently, and it just doesn't add up i currently have four jobs in total. i would like to cut that down to one. >> now, starbucks stock down about 15% over the last three months when the majority of this union activity took hold you have to remember and the company does point out starbucks has about 9,000 stores company owned in the u.s., so 30 stores looking to unionize is still a very small amount and this could take a very long time. joe? >> kate the -- i thought that in recent years we were seeing a little bit of a move towards union participation rising in the u.s., and then that didn't

appear to be the case with some recent numbers i saw do you know -- i saw 6%, so i don't know whether this is a watershed moment or not. >> yeah. it stayed about the same in recent years and that's a great point, but what has shifted is americans approval toward unions as i mentioned the highest level since about 1965 and the younger generation kind of opening up their eyes to the potential of what this could do for their wages, for their benefits remember starbucks does pay relatively well all things considered rather in the restaurant industry. their average wage about $17 an hour this summer, and these baristas are already starting to flex their power they did stage a walk out in buffalo at just one store. remember at all 30 locations across the united states start doing more and more of that, that becomes a larger issue for starbucks and something that may be need to be taken into consideration. >> not all unions and created equal, and you hear some stories about one union versus something with another union so you need to look into, i

think, each individual case to see if it makes sense and if it makes sense for you as an employee to join a union all right, thanks, kate rogers okay coming up we are going to talk earnings, the fed, the impact on markets. we're going to do it after the break. and then a variant of omicron putting scientists and doctors on alert we're going to be speaking to dr. scott gottlieb about that and much more. take a look at futures looking to open this friday morning in the red. dow off about close to 300 points right now s&p $500 off about 31 points we're back after this.

welcome back to "squawk box," everybody. if you thought this week was going to go quietly into the books you better think again because things have gotten worse through the course of the morning. right now you're looking at the dow futures down by about 288 points the s&p futures off by 31, the nasdaq about 58. it's been a rough week especially for the nasdaq. the dow is down just about 0.3% as of yesterday's close. if you're watching the nasdaq it's down by 3%. and for the -- off of the highs you're talking about the dow

7.5% from the high, the s&p 10.2%, and the nasdaq 17.6%. this has been the worst ever january so far for the nasdaq and also the worst overall month for the nazdic since october 2008, and andrew, we'll continue to watch this as we get closer to the opening bell. >> absolutely, becky and three major averages solidly in negative territory this month. joining us right now is gabriela santos we're at this moment and we see where the fed is i don't know what you really think is going to happen in march or later this year, but do you think there's more room to go down, or do you think there's some kind of floor being built in here right now? >> andrew, i think it'sgoing t stay and the reason why ultimately it's because about repricing the expectations of

the fed. this is going to be a very different economic cycle, so it means it's going to be a very different monetary tightening cycle. so there's a lot of uncertainty which is why it's likely to remain high both in fixed income and equities it's going to take us some time to see exactly what the cycle is going to be like we really are looking at inflation since the fed is citing that as the up side risk, the cycle. it may take us until the april inflation price to see inflation come down. that's when the base effects come in, so we might need to wait until that's released in may to get greater visibility. so we're really trusting this is the end of the era of free money. things are going to stay choppier, and it's really important to take interest rate risk and concentration risk into account in portfolios, to take some action here >> so, what does that action look like, though, before i get to chris because i think there's a lot of people wondering if you think

it's going to be choppy whether they wait. and market timing has always been a fool's errand >> absolutely. so market timing is never going to work. what i think we have to do is separate what are transitory market moves from what are more sticky market moves. what's transitory just stops being down double digits this year we still think the direction of travel is more upward especially more reasonably valued companies. so that's a reason to like into those kind of companies. what is more structural is everything that's interest rate sensitive is going to stay under pressure so that means everything that's expensive in the stock market you still have growth, the most expensive versus value in 20 years you still have pockets within growth that are particularly expensive and you still have the u.s., the most expensive versus international than it's ever been. so those are still going to remain areas that are sold when there are pockets of strength as

investors reposition to other areas. the other thing that's structural really important to mention the danger zone for fixed income the ag is down over 2%, second consecutive year of negative returns. we really do think that is going to be the case for this year, so reducing duration, leaning into high yield credit is still really important in fixed income >> chris, you want to take the other side of any of that? >> we're checking a lot of boxes for things we like to see develop at or near tactical lows, but let's remember nasdaq down 18, high and low, s&p down 12 high and low. we look for two things to develop at tactical or tradeable bottoms. number one, we look for stress in sentiment we see it with put calls put calls in the 95th

percentile secondly, we look for stress in price. those are conditions you tend to get at or near tradeable lows. i don't know if it's today or next week, but i think we're in the ballpark here where we can get a pretty good rally into the spring it's consistent with the mid-term election seasonal as well weakness in january and february, rally into the spring. i would also just note arb andrew, what's been so important to us is how the character of this correction has looked different than anything we've seen in 13 years of the qu regime this is market that's down, bond yields up. we haven't seen that in 13 years. this is a market down with energy stocks up we haven't seen that in 13 years. something is changing, the regime is changing value based growth just had its best two months in about 15, 16 years. so we're seeing the character of this decline very different than what we've seen in the past. >> what do you do about financials then in a market like

that given what you just said? >> i think what's been unique, and this is distinct every sector every sector has its faang-like stocks look what's not working publicly traded private equity, exchanges. look what's working globally where you have european banks breaking out, you have japanese banks breaking out so this value based growth shift i think we're all observing is not just about owning energy and selling tech, it's in every single sector. you see the value oriented names exhibiting leadership, community banks, regional banks, european banks. i think that reflects the rate environment. we have german yields about to go zero. there was a regime shift that's under our feet right now, and i think we ought to pay attention.

>> gabriela, do you agree with that you work at a big bank so maybe you have a different view. >> absolutely this is a regime change the last 13 years is not the blueprint we should be looking at we should be looking at the previous growth before that. and that's an environment where not just growth can do well but also value, where not only the u.s. can do well but other cyclical regions as well and where it's really important then to take profit in those areas that worked over the last 13 years and rebalance into the areas that haven't worked but are likely to participate in a rally going forward. and one of the things we've been really stressing to clients is that this is a very different beginning of a cycle than it was in 2008. valuations already extremely high at the index level that suggests very muted returns going forward, from data we

project only 4.3% in and 60-40 portfolio. so it's really the dawn of alpha, and that requires action, rebalancing, looking at new asset classes, new regions >> we're going to leave it there. thank you oth. >> thank you coming up dr. scott gottlieb will join us with the latest on the battle against covid and then in the next hour chevron ceo michael wirth will join us in the first cnbc interview to talk quarterly results and landscape. "squawk box" will be right back.

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welcome back to "squawk box," everybody. it is yet another day of some pretty concerning numbers. in fact, things have turned lower in just the last couple of minutes. the dow futures now indicated down by 379 points s&p futures off by 46 and nasdaq down by 130, so this pressure kind of capping a week and a month that has been a very difficult one especially for technology stocks. nasdaq down significantly. this is the worst month ever, the worst first month of the year january for nasdaq ever you can see that incredibly steep slide down by more 15%, and right now the nasdaq is down by 17.6% from its all-time high. if you look at all these charts

from over the last two months you'll see the dow down by about 7.5% over that time. 7.5% from its all-time highs if you were looking at what happened the s&p is down by 10.2% from its all-time high, and the nasdaq as i mentioned down by 17% from its all-time high this week has been a chaotic one, apparently volatile one you've seen some very elevated numbers there going back to the highest levels we've seen since 2020, and that's kind of playing out at the end of theis week. >> kind of weird the markets navigated a new variant which threatened to close down the entire country and have economic implications, and we've continued to set new highs. but the minute you talk about coming off zero on interest rates, that's really -- it's just markets are funny let's get right to dr. scott gottlieb, former fda commissioner, cnbc contributor also serves on the board of pfizer and alumina

and what about the latest thinking or data or opinion on this new variant tell us what you know because i've read things i don't know what's true and what's not maybe it's not anymore virulent or is similar. but what do we know about it, scott? >> yeah, look, there's some critical questions right now we don't have perfect answers to. is it more contagious? it does appear to be more contagious it's spreading in areas where the old omicron variant has become prevalent sweden put outdata it shows increase 25% infections to about 45% of infections over three weeks. so it does appear to be more contagious it is more virulent, more dangerous of a strain, it doesn't appear to be the case. the data out of sweden and the u.k. suggests it's not anymore severe, not causing more severe illness than what we've seen previously and is the immunity that we've acquired from the current version of omicron going to be protective against this new

variant? that does appear to be the case just looking at the contours of the spike protein in this new variant, this b2 variant it does seem to have a similar profile. so hopefully if people were infected with this current version that immunity is going to be good to acquire. if that is the case you wouldn't expect this new variant really to take off here in the united states or other countries that have already had their omicron wave it could be that if it comes in here and starts to spread at any levels that you could get a longer tail on the decline in this epidemic, but it's unlikely that this is going to displace omicron and create a new wave of infection in the way delta displaced b 117. >> in a similar line of thinking, the immunity you're

talking about from people that have had original omicron strain have you seen data that seemed anecdotally the immunity was pretty good. is the natural immunity from omicron better than that >> yeah, look, it's going to take time to make that determination. i think what we've seen overall is that people who develop an infection with a particular variant have pretty good protection against subsequent reinfection with that variant. and maybe as good if not better protection than those who were just vaccinated. but what the vaccines provide is broader and better protection overall against all the variants so if you had delta infection you're probably better protected or as good in terms of the protection you have against subsequent delta infection as someone who is vaccinated, but you don't have as good protection against omicron as someone who's vaccinated if in fact this omicron variant becomes the dominant variant right now and future limitations

happen in this people who have omicron infections should have pretty good protection against subsequent reinfection from omicron. this b2 variant is another variant from that omicron lineage. what i would expect if b2 is slightly more contagious than your run of the mill omicron that would probably become your prevalent strain of omicron we take forward in the future >> scott, i don't know if you've been asked this question yet i've seen some reports pretty detailed about some of the things that went on at the early part of the pandemic when it was -- and there were recent e-mails that came out from dr. fauci and francis collins talking about the wuhan origin, the possible lab origin and a real effort to tamp down that conspiracy theory, what they called it back then even though there were certain virologists that seemed to switch their opinion really quickly have you seen all that reporting, and do you have any comments on the way that was handled? what we know in terms of actual

data and science should always take precedence over even public opinion or massaging data, you know, for a certain end, a political end. >> yeah, look, i think we should always be keeping an open mind about these kind of questions. and i know the people who, quote, change their mind in those reports and i believe they change their mind based on the reading of the science the bottom line we should have an open mind about this all the way through. people who raise questions about whether or not this could have come out of a lab early on were either dismissed or criticized and it was always a plausible theory this could have come out of a lab, not that this was something engineered, deliberately manipulated and released from a lab, but it could have been something brought into a lab and through sloppy practices, the lab became the point of departure for this epidemic so we should have had a more open mind about that question all along. i think there's more evidence that suggested this could have come out of a lab that's come

along as time has progressed we certainly haven't gotten more evidence this came out of nature we've debunked the theory this came out of that wet market. and even after an exhaustive search for thenered meetiate host we haven't found it that certainly has to go on the side of the ledger that says there's a possibility this didn't come out of nature and the behavior of the chinese government in terms of what they've deliberately withheld certainly looks suspicious so i think we need to take forward an open mind around this question the bottom line this is going to be a battle of competing narratives and perpetuity. barring in line a smoking gun or barring our ability to find that intermediate host i don't know we're ever going to find an answer to this question. >> i want to go back to this new omicron variant and how you think that may or may not impact plans by pfizer and other vaccine makers to update their vaccines for new boosters come

next fall. >> yeah, look, it's a very good question, and that's being looked at right now, but presumably if this new omicron variant has an antogenic profile very similar to the existing version of omicron and provides cross immunity, you would expect the vaccine based on the current version of omicron to also offer protection against this new variant. in fact, the data that came out of the u.k. albeit it was a small study and the confidence levels overlap, but it suggested the efficacy of three doses of the existing vaccine is actually more protective against symptomatic disease with respect to this new omicron variant than the existing omicron variant, the one we've all been infected with here in the u.s vaccine efficacy, three doses of vaccine for someone recently vaccinated they had about 60% protection against symptomatic disease against the existing version of omicron again, the confidence intervals overlap, so it's possible this isn't a real effect, but certainly the vaccine seems to be as protective if not more

protective against this new version, this b2 version >> scott, what, though, will you tell our audience some of whom may take away from your earlier answer that if you've already had omicron you are more protected about taking vaccines in the future? >> yeah, look, what i would say is that you have a period of immunity that's probably quite robust you're not going to get reinfected right away from omicron. now, there certainly are cases and case reports, and we hear those. but that immunity is not going to persist in perpetuity unless you plan to get reinect iffed and i wouldn't recommend that to anyone, the way to maintain immunity against all these variants generally is to get vaccinated it's likely to be the case at least for the foreseeable future this is going to be annualized vaccine like the flu vaccine so we take peak immunity into covid season, which likely to be the fall and winter months so i think people who want to afford themselves a reasonable

measure of protection against reinfection during the fall and winter should seek out vaccines. >> hey, scott, for upcoming sporting events i saw something about the super bowl and some mask protocols, et cetera. is it still recommended to wear masks at outdoor events if you're in close proximity to another 100,000 people would you because i don't see people doing it if you're supposed to be doing it. >> look, as prevalence declines i think you judge everything against your own individual risk and what the risk is of the overall environment. if you're someone at risk for covid more generally and you're in an environment of declining prevalence and outdoors i would judge that to be a low risk setting. and i've certainly seen people i don't wear amask when i'm outside even when i'm in small groups of people outside because i judge the risk to be really low right now. i've been fully vaccinated and i think the outdoor setting a lower risk setting overall

>> okay, good. dr. scott gottlieb, thank you. good to have you on. all right, folks, let's take another look at the futures because things have gotten quite a bit worse on this friday morning. when we came in this morning we were looking at the futures, the nasdaq when we started the show just two hours ago was actually in positive territory. now it's down by 100 points. the dow has gotten much weaker and the s&p is down by about 42. part of the weakness with the dow is coming from caterpillar we heard from the dow component earlier this morning and came out with pretty phenomenal numbers for the fourth quarter they were talking about earnings per share and revenue much higher than had been anticipated. if you dig through some of the things they're saying about the current quarter it's dropped off 2.5% after caterpillar warned its first quarter operating margins could take a hit they talked about the same issues everyone is seeing out there. higher labor costs, and just having to pay higher prices for

shipping they will be raising prices higher this year to mitigate some of that but the stock is off close to 2.5% chevron also out with earnings this morning toe in gngchael wirth isoi bjoing us to dig through the numbers right after this stay tuned "squawk box" will be back. does your vitamin c last twenty-four hours? only nature's bounty does. immune twenty-four hour plus has longer lasting vitamin c. plus, herbal and other immune superstars. only from nature's bounty. you are an electric vehicle. plus, herbal and other immune superstars. electricity powers your heart. want to feel your heart beat faster? drive an electric car. made by a company whose evs have gone five billion miles. for every highway...

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good morning here we go again stock futures tumbling they've been deteriorating all morning. we're going to see how investors

elt react to new inflation data. that's out in just 30 minutes. we get you caught up on the numbers and talk about the possibility of $100 oil with chevron's ceo michael wirth. and apple reporting a blow out quarter. we're going to tell you what ceo tim cook said about the start of this year and talk about what apple's numbers mean for the tech sector at large the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew rasorkin. and raining on our friday

parade, these futures are not helping sentiment this morning down 350 points after a tough week, tough month. and it's tough to catch a falling knife, that's an old expression and a lot of times it -- you don't know when you've hit the floor if you're on the fifth or sixth floor, you don't know when you've actually hit the basement because there could be a few more what is the big problem? it's not really treasuries today. >> no, it's not. it's earnings that came in from two dow components you've got chevron and then you've got caterpillar that's down we'll talk about both of those in just a second go back to the futures board for a minute because the intraday lows that we hit this week came on monday, and for the dow you'd have to be down another 1,000 points, so not down 333 but down about 1,000 points in the futures to getback to those low levels for the nasdaq you'd have to be about 258 and s&p down by about

104. and hats off topeter shackner for that >> 338 at this point, and if you do the math -- but you've still got another cup of points on top of those two dow components and the nasdaq has been weak all morning. but not as bad as previous premarket sessions >> and we do have those key earnings hitting the take this morning. let's start with chevron because the oil giant did beat the street expectations for revenue by a long shot however, it did come in below what the street was expecting just in terms of the earnings per share. this was coming despite rising oil and gas prices and that stock right now down about by 4.4%. this comes after chevron hit a new high yesterday announcing it was raising its dividend by 6% so it's giving back all the gains yesterday and a little more in the premarket this morning. we're going to get more on chevron's quarter in a few minutes speaking with ceo michael wirth. the company topping profit and

revenue forecasts for the fourth quarter. sales were actually up 23% from a year ago they had these great sales and that came despite the supply chain issues, but the company also talked about how for the first quarter it is facing some margin pressure, and that's coming because of higher labor costs, also just supply chain issues, having to pay more to get the things there, and that is concerning about the profit margins for the current quarter, that stock off by about 2% and then of course there is robin hood shares of the trading platform sliding after it warned the current quarter revenue could fall significantly from a year ago. the new results show a decline in active users on a monthly basis. it reported a wider than expected loss and that stock is down by 13.8% this morning a bit of robin hood trivia for you, and today is exactly one year since that company as well as interactive brokers imposed sudden trading restrictions on both gamestop and other retail

out there as retail trading spiked stimulus money in peoples bank accounts and other factors, too, but those are some of the weaker stories today. >> yep a little under 90 minutes until the opening bell there's still time on wall street dom chu joinlz us with a look at the morning's top movers >> there's always more time. viewers out there can see that little bug in the corner of your screen saying it's lower by about 300 points for the dow right now. roughly 6 to 700 points is roughly caterpillar trade. they've taken a leg lower alongside other futures markets, and a lot of that is driven by some of the -- i wouldn't call it weakness. i would say slowing momentum in the pre-market right now for certain key names, not the least of which is apple which is off its prehighs right now as well as microsoft and amazon and alphabet shares in the premarket. they're not decidedly negative

it's just they've all taken a turn down from the highs of the session so far that's what's been driving the futures which had been outperforming for the better part of this morning just in the last maybe 20, 30 minutes or so we've taken that a leg lower here we're going to keep a close eye on those nasdaq futures. they have been the epicenterfo the activity and also watching what's happening with the big consumer products and retail giant behind clothing brands like north face and vans as well down just fractionally it's off the premarket lows. they came out with better than expected revenues and profits, but it was their full year forecast that was cut, and they did so because of ongoing supply chain issues and labor shortages that could crimp their sales going forward. and as we do often on this show a check on the most popular ticker searched on our website cnbc.com over the last 24 hours. yesterday's full session no

surprise apple was the top search on the heels of its earnings report, but tesla was the second place stock in terms of searching and microsoft and intel, or wintel if you can remember back in the days. if you take a look at the moves it's going to be a focus on these particular large caps. the rest of the top ten at the domino >> meantime we'll talk more about apple right now because tech giant beating top and bottom line expectations for the just completed quarter giving a bit of insight into the current one. good morning >> good morning. apple grew its revenue 11%, $123.9 billion and every single one of apple segments beat expectations and hit new records with the sole

exception of ipads and i spoke to ceo tim cook, and he told me, quote, the last two weeks of the quarter were the best two weeks for iphone customer demand during the quarter that's not odd because that is associated with gift giving, but it bodes well to the momentum. cook also told me and said repeatedly on the earnings call that supply chain issues are set to improve from the december quarter to the march quarter take a listen. >> i think our supply chain actually does -- does very good considering the shortages because it's a fast moving supply chain, the cycle times are very short looking to apple's march quarter the company said they expect to achieve solid year over year growth and set a march quarter revenue record but they also noted their revenue growth rate would

decelerate from the december quarter tew do the timing of the iphone launch last year as well as foreign exchange head winds andrew >> so, the question i'd and ask is what do you think the analysts are now going to say about apple's quarter. we heard some of them last night and new reports out this morning. >> yeah, the analyst reports are starting to come in, and overall i would say, andrew, a lot of relief that apple has really managed to overcome those supply chain issues, to have such strong numbers, particularly around the iphone there's a lot of commentary about that strength in china. and i think looking ahead to the march quarter the fact that he did say so many times that those supply chain constraints are going to be moderated, some hope perhaps that we'll see other companies reflect that same improvement in those supply chain issues, and also just arb andrew, you have to note how massive the install base is for this company they noted they have 785 million subscribers, so that is of course a record high

>> extraordinary extraordinary. ju julia borstin on the west coast, thank you. when we come back some new inflation data but right after this we have a can't miss interview chevron ceo michael wirth is going to join us after the oil giants fourth quarter financial results. wti once again hitting its highest levels in seven years in trading yesterday. this morning ubyp 1.75% don't go anywhere. "squawk box" will be back. ♪ ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪

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welcome back to "squawk box. futures looking to open lower this morning on this friday. we're about to open 323 points down nasdaq, it's gotten worse actually off by about 113 points. s&p off by 141 points. some of the stocks leading the s&p 500 lower. let's show you the list right now. you can look at the rest of the list, but chevron in particular we're going to talk about that right now off about 4%, becky. >> that's right, andrew. and energy giant chevron out with fourth quarter results this morning, and revenue beat expectations by a lot. it was billions of dollars that

came in, but the profit did miss on the earnings per share number and the stock is off by more than 4% in the premarket joining us right now is ceo michael wirth. thank you for joining us >> good morning, becky >> let's talk a bit about the quarterly numbers. the stock's off this morning earnings per share was weaker than expected but there are a lot of things in there, some charges that were taken in the quarter that the street might not have anticipated i don't know, maybe they did but the revenue was quite a bit better again, billions of dollars better than had been anticipated, so what did the street miss here what were they notopying that show up in those numbers and the earnings per share >> well, becky, it was another strong quarter and frankly a record year. the quarter had some non-cash charges that are very difficult i think for the street to anticipate and to model. but the headline is we're more efficient, generating more cash and lower carbon this is the second quarter in a

row with record free cash flow, and the full year free cash flow was 25% higher than the best year we've ever seen before including periods when oil was over 100%. a and that cash is flowing back to shareholders earlier this week we anounounce 6% dividend increase a second year of higher dividend pay outs when others in our industry actually have cut their dividends. and our share buy backs are at the top of our guidance range and represent about 2% out of our outstanding shares per year. so we're in a very strong position >> you know, the stock did hit a new high after that dividend increase because it was higher than people had been anticipating, up 6%. what is this telling us, though, just in terms of what you're priorities are aright now, giving money back to the shareholders in term of the share buy backs, in terms of the dividends and not necessarily spending more on cap x to go

after and drill more frequently. that's the pattern we would have seen in the past from any of the big oil major. when oil prices got so high you would immediately see companies everywhere start to reinvest and take the money and say we're going to chase more oil so that we can sell at these higher prices it's a verydifferent disciplin right now, isn't it? >> it is, becky, and i think you used the keyword, which is discipline and for years now we've been talking about higher returns and lower carbon, and that means you've got to maintain capital discipline in your organic capital, in your mna activity. our budget this year is at the lower end of our guidance, and our capital spending is down 50% from what it was in 2019 if you lock at chevron and noble energy who we acquired in 2020. we're down significantly in capital spend. our operating costs down 10% we've got a clear strategy to leverage our strengths and

deliver lower carbon energy and we intend to keep getting better but that discipline is at the core of our strategy and has been for years >> i mean, that's something the market likes to see and that shareholders have certainly benefitted from, but we are seeing how that plays out in higher oil prices, just for everybody else in the market opex at the point where they're either not supplying or can't supply more demand has been skyrocketing recently. and we've watched oil prices go up incredibly quickly as a result we did see oil above $90 earlier in the week. you expect that is going to be the case, that high prices stick around and maybe push higher from here because of the demand supply picture >> well, becky, we're certainly in an up market right now. demand is coming back strong, and we still don't see office commuting, business travel or international travel really at the levels that it was prepan

dem. so there's likely still further demand growth ahead of us. we've come through a remarkable time where demand collapsed in 2020 as the pandemic set in. we saw oil prices actually go negative and there was a concern about being able to store the oil that the world was producing, running out of storage capacity. that whole equation now has flipped with this surging demand, supply had to adjust to deal with those conditions just less than two years ago. and we're on the reverse side of that now with extraordinary demand strength and supply struggling to keep up, so we are in a period of time where there's been some upward pressure on the markets. i think longer term markets are rebalancing these things and moderate but exactly when and how that happens remains to be seen >> the biden administration has expressed some frustration, put the pressure on opec to get them

to drill more. have you felt any of that pressure, heard anything from washington suggesting you drill more, or are there kind of initiatives on green energy taking the lead here >> well, we certainly have had dialogue with the administration about some of these topics and understand their concerns. you know, we respond to market signals, in both commodity markets but also eckwty markets. and as you mentioned this is an industry that hasn't always demonstrated the greatest discipline and we believe the capital discipline is important, and there is oil supply out there. opec has been gradually bringing supply back into the market. there's a meeting coming up shortly where they're expected to further increase production and so these are -- these are markets that, you know, are global in nature and lots and lots of players. our intent is to maintain that discipline and really focus on

safe reliable operations and delivering returns to our shareholders >> hey, mike, we have not talked much about the ukraine situation today. some people are pointing to that for some nervousness in the market as well as i guess medical personnel are now being moved into areas where i don't know what any of it means. that's not what we're here to talk about, but the energy dynamic of putin's leverage over europe and germany, but for a lot of reason natural gas but in germany the last nuclear, you know, power, that fukushima caused a lot of europe to pull back on nuclear. we had john killdoff a war analyst on earlier who said this could be our future in the united states if we transition too quickly. you said carbon like 100 times already, and you run chevron

so if we transition too quickly to this european model of energy we could be in a similar situation in terms of prices or supply and everything else and i know when you're in with your board or your strategists maybe there's things you wouldn't want to share publicly, but you're still going to produce hydrocarbons, right? >> well, the situation in europe and these concerns about russia and ukraine in some ways demonstrate the importance of energy to the global economy for sure russia's the second largest oil and gas producer in the world behind the united states, by the way. and europe is a very large destination for that production. so concerns about possible interruptions have, you know, resulted in i think some upward pressure on prices, which shows us that supply and demand are tight. because we've seen geopolitical issues not really influence oil

markets here over the last several years, and now that's returned i think the this broader issue that you're talking about is an important one for us to continue to engage in discussion with -- with policy makers on. and that is how do we balance the energy supply going forward to ensure that markets have reliable and affordable energy supplies at the same time as we lower the emissions impact, which is certainly what our intent is. but it's a balancing act, and i think it's one that we'll continue to talk about and will be even more important as we move forward >> just to put a finer point on it, i know you continue to have these conversations with the administration, but what do do they want more at this point for you to push toward these environmental and climate change points that you're trying to hit, or have they at any point kind of said we need you to start drilling more right now just so that oil prices and gas prices don't go through the roof >> well, the answer is yes

we've actually heard both messages from the government and there are different time frames involved in these things. and this is a long cycle business, and our investments are predicated on our view of not today's prices but what the -- what the world needs in the future there's lead times involved in these things, and in order to deliver energy reliably you need to invest in a way that you can execute well andso we don't invest based on the price of the day or frankly, you know, certain current requests from various stakeholders it's really about a longer term view on what it takes to meet our customer needs and remain competitive. so as i say there's tension in the system again because we really are seeing that energies central to the economy and now we've got an inflation challenge in the united states and globally, and it's important

that we meet that demand for affordable and reliable energy today even as we work to create a lower -- lower carbon economy in the future. and so there aren't easy answers to these things, but i think, you know, there are a lot of good companies in our industry that are working hard with policy makers to try to help navigate this in a way that creates an orderly future and not -- not one that's unpredictable and volatile >> hey, mike, i want to thank you very much for your time today. we always appreciate talking to you, and these are pretty important topics, so thanks for being with us especially on this earnings day good to see you. >> you bet coming up in just minutes brand new inflation data it's a new report. and the fed just teased an interest rate hike in march as you know stay tuned you're watching "squawk box" on cnbc

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coming up when we return, breaking inflation data, new pce numbers, plus we're going to bring you consumer spending and more plus we're going to get into apple's record breaking quarter and what it all means. the stock coming off its highs but still up in the pre-markets. stay tuned a lot more coming up on "squawk box" right here.

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welcome back to "squawk box. rick santelli here live at cme, hg with breaking news fourth quarter up 1% that's eased back a bit. we are expecting 1.2 sequentialliy that follows 1.3 personal income for december, up 0.3, and we were expecting up 0.5. sequentially that's following unrevised up 0.4 down for spending down 0.6 and

not a good number. if you look in the rearview mirror we were up 0.6 down last time and the month of october we were up 0.7 it was one of the best numbers going back to, well, about 14, 15 years and we look at the deflater here's the important data now, the deflater month over month up as expect. the year over year number up 5.8. so that takes out 5.7, and 5.8 per, well that is the highest since 1982 and if we look at month over month pce core deflater up as expected, up over 0.5. so the personal consump up 4.9%. 4.9%, and that indeed is hotter than expected. it follows 4.7 the last time we were up at

4.9%, well, to find a higher number you have to go back to september 1983 as the way back machine just showed me so we continue to see that the pressures build with regard to many of the year over year comparisons. yesterday's gdp was a powerful number, but it was really promoted by much of the inventory build, which is not a bad thing. we need to rebuild inventories, but it also had to be scaled back for a much bigger nominal gdp due to the pricing measures, so we continue to monitor those. and as we look toward interest rates we see weak over week numbers. we want to continue to monitor as we're potentially flirting with the highest yield close for 2022 andrew, back to you. >> thank you, rickster have a great weekend i want to bring in steve liesman now also looking through these

numbers. what do you think? >> there is two pieces of good news here i want to say, good news with quotes around it the employment cost index which is followed by the fed 1% versus the 1.2% that was expected and the 1.3% in the prior quarter. i'm not saying that stuff is coming down, it's just not rising as fast as i expected the core pce was higher than expected what i'm interested here, andrew, this is maybe the first piece of data in the new fed regime here which is there's no guidance anymore we're taking this piece by piece. ware going to reset. and i don't know if rick is still there but one of the big stories this morning is the dollar was flying. it was up over 97. the 210 spread was crashing, all kinds of stuff going on out there. and then, you know, i had my idea out there which is probably a terrible day to be talking about it, the idea that perhaps there's a soft landing is rick there, guys? i don't know if hewants to

comment and tell us. >> yes, he's here. >> and rick, you and have been talk off-line about this 0.2 spread and what it means and doesn't mean for the outlook for the economy. >> i think a soft landing is deft possible because i still think we forget a couple of things, that there's still lots of money sloshing around the globe. remember about 2:00 every afternoon we learn about that parking lot of reverse repos which is hanging around $1.5 trillion. there is plenty of capital around the world i will continue to say that we're experiencing all this volatility because we are anxiously awaiting what we expect we expect to get a bit of a punch as they remove stimulus. and here we are waiting for it, but we have to wait months for it this is the volatility, the very volatility the fed is trying to protect us from we're experiencing because of some of these delays they should just get on with it.

i think the dollar, the dollar is a huge positive, a huge positive and the fact that it is flying that's probably about, what 16-month highs maybe more now it's about 97 and sustainably, these are very good things and the dollar index is textbook here because rates are beginning to rise. it's doing better. the fly in the ointment and steve has talked about it, i've talked about it, we don't want the yield curve to get a little snaky on us. if it looks like three months to ten. year or various parts of the curve start fooinvert it immediately leads to the r-word, and, you know, that's what it's all about. the fed and central banks need to try to tighten to a point to control inflation without strangling off the economy and there's your soft landing. it isn't going to be easy, but whud yike like to make sure to remind everybody is we are not alone. whether it's the u.k., the bank of england, the bank of canada, many central banks are embarking

on very similar paths. >> i want to make one point. >> go ahead. >> very quick point, which is rick is right. the fed does need to follow through here, but this is maybe a good thing, which is they've already gotten 70 basis points of tightening in the two year it hasn't had to raise rates at all so the idea that monetary policy, the fed pivots and the market does some of the work for it, that's a good thing, i think. if the transition mechanism wasn't working we could be worried about that it's curious what's happening on the long end here that it's not really followed, and then you've had this curve flattening here but at the moment the idea the tightening is coming through the economy, through the transmission mechanism of the two-year and short rates, i think that's a positive. and maybe, hopefully, limits what the fed may have to do on the back end we will see especially these inflation numbers behave themselves, which they are not at the moment. >> okay, a debate for another

day. have a great weekend, gentlemen. about an hour before the opening bell on wall street. joining us now as we get ready to wrap a volatile week on wall street when the dow has swung more than 600 points every day, the author of the new book "in praise of profits. whenever we used to talk, ed, and what year were you -- were we there together? >> late '70s, early '80s >> so we were. i think if you more bond-like, and i was going to talk to you all about the fed, but you're making some really definitive statements about what you think investors should do with the stock portfolio. so let's -- you think we've hit a capitulation low in the s&p on monday in 42 and change. so no further big down drafts, no grant them 45% off of your

principal or not even a bare market in the s&p. >> i think it was a capitulation bottom >> to many traders around right now, not enough investors. >> correct >> investors should be using any weakness to add to positions >> absolutely. look, i think the starting the new year and probably most of the year should be energy and financials you just had the head of chevron, and he basically said they're being very disciplined about their capital spending and that's going to lead to higher prices for the energy sector, and i think financials do pretty bell in an environment where the economy is doing well, rates are going up and the important thing is loan demand is coming back and mna

acsifbt is very strong technology over hindsight was clearly valued and now it's less valued that's where the investor comes and buys but across the board my thinking is that we are going to probably remain kind of volatile here for a while. maybe january got rid of the volatility for us for a while, but by the second half of the year i think the market will be following an earnings high >> the idea of buying the dips, at any time dependent on a soft landing? we just were having quite a discussion about whether the fed can really orchestrate that. for some reason we think that, i don't know, it seems like a very difficult thing to do when you've been easy for this long but it doesn't mean it's impossible it just means we'd have really skillful central bankers is it possible >> well, i -- i agree with steve liesman's notion we could very

well have a soft landing here. the economy was very strong in the fourth quarter there was a lot of inventory building, consumers slowing down and consumers are starting to resist high prices and that's a good way to bring inflation down i think the strong dollar rick mentioned i think that's another powerful disinflationary force here i think we're seeing a peak in the inflation rate now, and i'm not going to tell you it's going to come straight down the next few months, but by the second half of the year i think it is going to come down a big contributor has been consumer good particularly new and used cars, and i think you're seeing resistance to those prices, and i think you're going to find some of these companies are going to find the semiconductors i am concerned about tesla saying maybe they're still having supply disruptions, but japanese car production soared in november suggesting they are getting the semiconductors to finish off the cars. so i don't think that's going to be important the offset is going to be rent inflation is going to be a problem. so i don't think we're going to

see 2% inflation anytime this year or next year. i think it stays -- it comes down maybe to 3% >> i could see a return to some of the years where we saw where we had maybe a 5% bond, ten-year, 5% note and where we had some inflation we don't want japan-style deflation. a bit of inflation we've been sort of almost hoping for a while. so in moderate single digit, let's say low to single digit inflation and notes a little bit higher shouldn't be a death nel. >> i don't think so. i think the market discounts the fact -- it's already discounted the fact we've been at 1% by the feds rate at year end and everybody is talking about 2% next year. but the big conundrum here is the bond yield is at 2, 2.5% already.

and i think that reflects the fed purchases. we'll see if it goes finally to 2, 2.5%. but it may not go up to 3, 4, 5% because there's a lot of albatross going in yields. populations are getting more geriatric and that's fundamentally disinflationary, and i think it's going to keep the bond yield from soaring to that 3, 4, 5% level. >> markets -- you're amazing, ed, down 36 now -- no. probably those numbers we got at 8:30 obviously but i don't think the dull set tones we're hearing they're so soothing. i like the name of your new book "in praise of profits" because in the past that would have seemed like a fairly normal thing to say, but this is going to be very controversial in today's world. and millennials will probably be

about 50% inpraise of profits, 50% in praise of losses just for i don't know why, just because that's where they are. >> joe, let me tell you my book will have like 75% appraisal profits. >> only 25% of people are looking for losses in socialism nowadays that'sthy the world -- nothing surprises me anymore the nasdaq suddenly that had 100 plus loss now up about 40 points pretty amazing and when we come back we'll get jim cramer's first take on all of it and dig into the market movers this morning we'll talk about apple, too, much more. you can always watch and listen to us live using the cnbc app. stay tuned "squk x"ilbeig bk. awbo wl rhtac 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.

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we told you the futures had turned positive, but, wait, take another look it's like the weather, changes instantaneously. dow futures down by 100 points, the nasdaq still hanging in there barely in positive territory, but it has been a wild ride. why don't we take a look at how the futures have been fairing through the course of the morning. you saw us down by almost 400 points fighting all the way back to the flat line relatively speaking this morning. and we're continuing to watch it same story with tech shares.

they were down as joe mentioned by -- the nasdaq shares were down by more than 100 points, more than spo, and they fought back into positive territory, up by about 22 right now. so all the wild rides we've been intching this week are going to contue right into this friday morning, which means you can't miss a minute. stick around "squawk box" will be right back. , we can harness the energy of the tiny electron. we can create new ways to connect. rethinking how we communicate to be more inclusive than ever. with app, cloud and anywhere workspace solutions, vmware helps companies navigate change. faster. vmware. welcome change.

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all right, let's get down to the new york stock exchange. jim cramer is standing by. and jim, if you thought you were going to get rest on this dlais last day of the week, forget about it here we go again >> but i like the fact that we're open down. you need help to just go away. you don't want no help and no hope from any of the companies apple doesn't help, that's fine. chevron -- obviously, the numbers were really good but i'm looking for a day where people just say, i give up the advance decline line -- more decliners than advancers for ten straight days. that's the longest in 20 years obviously, we're bear marketing our way, barreling through price target cuts. and so you probably get, in the old days, we used to have in the 1990/1992 period when we had a

problem, obviously with iraq/kuwait, we used to get a recovery on friday people would be afraid to go in short over the weekend >> although you just said a couple of words, we're barreling our way into bear market you think that's where we end up right now, the nasdaq is 17.5% in the hospital quite in bear market story the s&p is only about 10%. >> the s&p will have to come down a little more it's hard, because a lot of the s&p companies, the dow companies in particular are reporting great numbers. but we have to have a total giveup and i still think that we haven't had the giveup that i would like to see. we're starting to get it the dow stock, visa, fantastic dow stock, apple, fantastic. chevron actually was good, as mike explained it on your show but we have to have these stocks go down, too and when they all go down, then i think we finally get a bottom. but it may be a december 2018 bottom without the fed, because jay doesn't have enough wiggle

room this time but it's clear that we're in a phase where people just say, get me out and that is, you know, you've got those periods of denial and now there is just acceptance and i think people are going to say, i can't take it anymore and the i can't take it anymore phase will last a couple of days >> we spoke with j.j. can hahn and he was talking about retail investors, what they've seen december, they were net sellers. and if you've watched this before, you wonder if these new retail investors are going to stick it out when they're getting hit with their first downturns like this. correction territory, potentially bear market territory. will they stay when it's not as fun, when you're not winning every day? >> j.j. said that on the special we did what is really interesting, a year ago, obviously, there was this revolution that didn't really happen. and now there are just people who say, get me out. look at robin hood, the makeup of their quarter once again is people who do options, a lot of doj coin, and they're not going to get through this.

they're just not, becky. in the end, they don't get to the other side of the jordan river. >> robin hood with their average monthly users dropping, i don't know, from 18 million to 17 something million. and their answer is, they're going to go longer extended trading days if you can't make up for it in new numbers of people coming in, you have to get everybody there to trade more frequently does that sound like a sound strategy >> no, look, they have a good app, a very narrow business. when i read that, i said, oh, they're giving away free beer. can we just please admit that our business isn't doing well? that would be much better. the app is great but really, the definition of what's happening right now, which is like, i can't take the pain these are not seasoned pain takers these people right now are trying to figure out whether they should give 7.5 -- right now, they're thinking, do i give 7.5 to the bengals do i take the 3.5 -- honestly,

these people, it's no different. >> or do i take the long on robinhood or on apple or whatever other stock i'm watching today >> they're thinking the under on robinhood and they're going to taking the bengals, i think, take the points. that's how stupid this is. that's what's happening. >> you're talking about gambling, not investing. >> i'm saying that that's what they are if you're doing that much options and that much doj coin, your mosaic is so horrendous >> where are you getting 7 where? on draft king? >> yeah. >> 7 >> tell me what you do what would you do? now that you've brought it up? >> the problem is, with mahomes, there could be a second touchdown right at the last minute, because they're so good. i like the bengals so much, joe, but i think it's next year you know -- definitely a

half-point game. >> fascinating piece in the journal today about the hands of quarterbacks i don't know if you saw it, but it's fascinating >> it doesn't matter anymore, because they hold it differently. but remember brady, supposedly -- but now, for receivers, i think it matters. basketball players, i would definitely like to be able to -- which i can't. >> so fascinating. we used to say, that guy's hands are too small. you know that line the rams' -- >> 3 1/2 >> don't you think that's interesting with a home game, three-point spread for a home? i don't know, joe. we have now spent more time figuring this out than any of these customers on this robinhood have spent on this with chevron down five they want chevron plus five. i say take it, money line. you think they know money line maybe. >> maybe >> money line might be good, too. >> i got to tell you, joe. they are going right back to gambling

because that's what they never left that and wordle. >> i got wordle today in four. becky beat me. >> i got it in three i don't know how >> jimmy fallon taught me. >> the robinhood guys are taking the under -- they don't know -- i don't want to slam a whole group of people. there are definitely people who know what they're doing on robinhood. >> jim, we got to run. we'll see you in just a few minutes, though. >> they're taking the over >> thanks, we'll see you >> the 8:30 economic data giving the majors an average shot in the arm. this morning's big earnings movers, caterpillar and chevron, and of course, there is apple. it is up now after that blowout first quarter earnings report. joining us right now to talk about all of this volatility, managing partner, portfolio manager at dcla and a cnbc contributor. we've got four minutes and 30

minutes to the open, sirat after your four minutes with us, what are you going to go do about it >> when you look at it and the companies that are reporting good earnings. so today at apple, just look at last week, american express, really strong earnings, trading at 18 times earnings that company has a huge runway ahead of it. and you look at j&j, positive earnings, buying back shares and go back to financials. there are some really good companies here that are doing very well. and i think when you look at the market down 10 plus percent, and what you were just chatting about, we don't really have a bottom yet but if you have cash on the side, there are some really high-quality companies that i think are going to do really well in the next three to five years. and through all of this noise, you can pickup and create this diversified portfolio. you just to be -- you have to have a strong stomach for it interest rates will go up. that's going to be a natural,

you know, disconnect to the market, because when you got negative yields, valuation doesn't matter >> but i just heard you say, you think the bottom is not in you're with jim. >> it's very hard to pick a bottom, but what you're looking at right now is the fed saying, we're going to raise rates the markets saying, are you really going to raise rates? and at the same time, you've got a lot of the retail investors -- a lot of people who haven't seen a downturn -- andrew, there were a lot of people who never saw 1999 and now they're seeing something like this. markets correct 12 to 15% every 12 to 18 months. the consumer strong and rates need to normalize. let's look at companies that have the strategy going forward that are not just one-trick

ponies and you saw a lot of that air come out of a lot of these ponies >> what do you tell the investor that bias index funds or etfs? >> one of the things you've seen is one of the top ten stocks in the s&p trade at 30 times earnings you look below, you look at the morgan stanley, amexes, chevrons of the world and be careful. diversify and make sure that you are not in just one index. otherwise, do what we do, is pick stocks in a core portfolio and say, hey, i think these are the sectors, these are the areas that will be interesting it doesn't mean that you have to be completely in all value or all growth it means that you can actually participate in the market by saying, where are the opportunities going to go? stay invested, but stay within your risk profile. that's another thing, andrew, that a lot of investors who kind of went to one side and said, wow, i'm never going to lose money, kind of like '09, i'll never lose money in real estate. you've got to be diversified

across asset classes, but make sure that the risk in that etf or that index or that single stock that you have is not going to bring you down, because there are other opportunities in the market >> it's a good final word. we'll leave it there want to wish you a very happy weekend. we'll see whether it turns into one friday at the close later today. have a great weekend, everybody. make sure you join us next week. "squawk on the street" begins right now. good morning welcome to squawk ont street premarket is coming off the early morning lows as today's wage data comes in a shade light. that's welcome news to a market where the 12-year lead at 122. sales reaching recor