pioneered that company's listing. nvidia's deal for holdings for softbank collapsed that is ahead. it is tuesday, february 8th, 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 who both got haircuts yesterday is that the case >> i did not get a haircut >> oh, you guys look good. >> i just styled my hair >> looking very nice >> i did not although, i like to think that i style it well every day. andrew you have good days and bad days. >> i saw you both.

they look very, very nice. anyway >> thank you >> i had some wig comments yesterday. i was going to walk up to the camera and right up to it and put it right there and pull on it just because -- >> don't do it it's high def. trust me i keep my distance i'm good where i am. >> it's real yesterdaywas a mixed day for the markets. decline for the s&p down 16 points that is a decline of 3% you saw weakness over .50% for the daweow, it was an up day one point. virtually flat this morning, you willsee some green arrows at this point dow futures indicated up and s&p up by 4 and nasdaq up by 10. treasury yields hit the highest level since january of 2020. higher yet again with the ten-year yielding 1.934%

two-year yielding 1.315% if you want to see the "squawk stack. we talked about meta with the worst week ever. you may expected a rebound stock down another 5% yesterday. you can see this morning indicated down by another 1.9% bitcoin was up sharply yesterday. highest level in a month back up to 44,500. a month ago it was trading over 47,000 gold with the best day yesterday. and rbob gas hit the highest close since september of 2014. wti with the rare down day yesterday. down 1% to 91.32 this morning, wti is down back below $90 a barrel 89 89 89.61. we will talk about ukraine and

russia and the expectations of the market that's where we stand right now. >> that's a stack. we'll add something to that stack right now. some news on peloton breaking this morning peloton's ceo john foley is stepping down to become executive chair. the company plans to cut costs and overhaul the board the company hired barry mccarthy he served as cfo of netflix before spotify where he pioneered the direct listing route that spotify used to go public mccarthy will join the board peloton will cut 2,800 jobs. that is 20%. it will not cut the instructor roster it is dropping plans for a new factory in in ohio we will get reaction to this news we have talked about this for the past several weeks as we see the down draft on the shares

dan ives jumping in this morning. research analyst at wedbush securities interesting move, but does it change the game? >> i think it clears the deck. fully this is the biggest impediment given the majority on the b shares i think really viewed by the street as one of the impediments to the potential sale. with him gone and a black eye to end his chapter, there will be more and more pressure for the company to sell, especially with foley gone he was the pioneer, the dna of the rise and fall. >> dan, i don't disagree this may change the sale, but doesn't change the class structure he is still the executive chair. if you think he was impediment before, why doesn't he remain?

>> that's a good question. if he stayed ceo, it was ultimately a sign he felt like he could turn it around. he could turn the ship around. dark days ahead and had confidence him leaving, whether it is board or self move, i think with this, it sends a signal. he has been the pioneer. he has been the pilot on the plane. with foley stage left, they can bring in anyone. it indicates, to me, they have to ultimately sell with growth challenges ahead >> you think there's no possibility that barry is there to actually run the company? to operate the company and run it into the future rather than to a sale? >> he could obviously run it in the near term. in terms of whatever the spin is and whatever they will talk about tonight, the reality is this paints a picture that the growth challenges are stronger in terms of headwinds than they

expected there is more and more pressure for them to sell we could watch a two-minute documentary on fitbit or gopro and see where it goes. >> the stock is down apparently on the news this morning in the pre-market off close to 4%. not up what does that say to you? >> investors know it will be a nightmare on elm street tonight on earnings that is with cuts and guidance you hope for a sale. we talk about a significant opportunity here foley, he has been the core dna of peloton him no longer as ceo sends an onminous sign to investors that they were hoping he could turn this around. >> dan, we were talking about this yesterday the prospects of the company who would want it? is there really a bidding war taking place for the company

is this something where everybody will look it over and say maybe. is there onebidder that you think would absolutely want this and do you think this is a bidding war or do you think this is everybody looking over the wreckage at this point >> i think it is important for the situation for foley and the board. ultimately if you look at the asset, i believe apple and amazon and nike are potential legit bidders. apple with the subscription piece on the health and fitness side this is an asset i think especially for apple or nike or defensive move if amazon went after it, apple would have to go after it to block it i think there are a lot of core bidders here of the premium asset. it comes out to window of opportunity. the board and foley and which path they take today is an ominous sign with him leaving.

it means more pressure with the supermajority rights for them to sell it goes back to the history of companies that cut costs during growth and try to turn around is generally not a good story or cinderella story we have seen. >> dan, to go back to the list of quote/unquote suitors and what they considered the last two years with the growth of the company not knowing if there was an opportunity to buy it when you look at that list and i understand the apple piece of it i don't know if i really understand the nike piece of it if i'm honest with you where does amazon stand? there are other players? are we for getting about other companies in the gym and fitness industry unto itself >> no doubt. you could really start to expand the suitors. the reason amazon is because of the subscription service more and more in a crowded

content world, you have peloton which gets into roughly 3 million subscribers. that could grow in a broader ecosystem. it is about touch point to the consumer exercise and fitness a work from home fading, that will be there. peloton is a premium brand that is why there are many potential bidders here it comes down to clock struck midnight for peloton and which way do they go. >> dan, while we have you here can we ask about meta quickly? last week was the worst week ever yesterday was followed up with another 5% decline and this morning down almost 2% what does that tell snu. >> that tells us the apple ios took facebook down it wasn't the beltway or whistleblower. it was that. the core of the business model along with tiktok competition. when you look at snap and digest

what is happening. it looks like the uphill battle for facebook to get back to growth this is a different story. >> dan, before you go, final question from me valuation is always a huge issue if this company gets bought. i think when you put a new ceo in place, you are not trying to sell the company at least this individual we'll see about that what's the price tag this company is fairly valued at such that a buyer would be rewarded for buying it as opposed to pu punished >> i think anywhere in the three times. you look at multiples in the 12 to $15 billion let the ceo takeover and miss and execute and stock 30% lower. then the valuation goes 8 billion to 10 billion. that is how potential suitors are watching this. >> dan ives, so great to have

you on the show this early in the broadcast and jump in on this news. thanks again take-two chair shares are f. revenue short of estimates it was the fourth quarter booking guidance which is a measure of revenue that was quite a bit below expectation. we will delve into that at 8:30 a.m. eastern with ceo strauss zelnick and talk about his fountain of youth issues he says he is 63 years old i don't believe it. the video game grab is part of that. up next, stock futures areflat dow with a gain as we noted.

the s&p and nasdaq were down we'll talk strategy ahead of the trading day. and why nvidia's deal fell apart. you are watching "squawk box" live from our site in times square >> announcer: this cnbc program is sponsored by truist securities your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do.

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welcome back to "squawk box. the nvidia deal with softbank collapsed. citing regulatory challenges the value at the time of $40 billion in the stock and cash from nvidia. now they will prepare for a public offering by march of next year arm makes technology for

smar smartphones. running on qualcomm chips. the view was regulators around the world were not going to allow it to happen. >> it was not just one country that had problems with this? it was regulators in every country. it was an uphill battle. we should tell you about shares of bp this morning. trader higher after a jump in profit for 2021. swinging from the net loss of $5.76 billion in the prior year to $12.8 billion a swing of almost $20 billion. the recent rise of oil and gas prices that helped the company and others rake in better than expected revenue you see bp shares up bp performing better than brent. bernard looney will join us in the 7:00 hour. the futures right now are flat not a lot happening with pfizer

coming in this morning joining us is the global market strategist at jpmorgan chase you point out, gabriella, the inflation data between now and then is a bit of sideways action? >> the hyper growth area of the market will stay extremely jittery. taking a lot of cues from the moves in yields. we have seen them shake up 56 basis points to date in response to inflation forcing central banks hands into the tightening cycle. compared to the post-pandemic cycle. it will not settle any debate about when and how fast tightening happening

that should really be much more with the march cpi which will be our first peek at the month with a much easier base last year remember it was march when inflation started to shift upwards. if that inflation is strong, all bets are off until then, we stay jittery in the hyper growth area of the market >> does it appear to you that the second derivative, the rate of change and inflation is starting to moderate we saw that in the more recent reports and you point out that the comparisons are easier since it was already happening does that mean that what's priced in for the market is what it is thinking about the fed action that is in the market already. five hikes or whatever we have seen most people have read that and know about it. if inflation were to not worsen, maybe we dealt with that psychol

psychologically. >> i think it is even more not just about the rate of range of the headline level or inflation at the core level. it is happening with the sticky elements of inflation. are they sticky enough to keep central banks on edge in the faster tightening cycle? that goes back to the rental measures of cpi which have not decelerated. they are strong holding at decade highs it is watching the sticky elements of inflation. in terms of what's priced into the market good news-bad news the good news is priced in more. think back to labor day. one priced in and now five priced in for this year alone. in terms of is that enough, i don't think so that's because we think further out and look at the terminal rate that's priced in, that is 1.8% right now it is the expectation that not a

lot more rate hikes are coming next year. it is a quick rate hike cycle. think last time where rates got to 2.5%. that's what the fed thinks is a neutral rate there are more discussions coming about next year and that still needs to be priced in. in additionto what will happen in the balance sheet which can continue to affect a longer end of the yield curve we think the end of the year is up and that keeps investors on edge and hyper focused on valu valuations. >> we can't count on the rest of the world to anchor us >> that ecb meeting last week was a potential game changer when we translated back to u.s. long yields. we had the artificial anchor on yields not just from the fed buying bonds, but extremely low

yields everywhere around the world and very strong foreign investor demand. if you have yields moving higher across the world as well, german bund is now positive we are back in positive territory moving up 60 basis points in a little over a month. that's potentially anchor that is lifted off the long end of the curve. this is really a potential game changer. it is higher inflation forcing the ecb's hand. >> you need to change some of the color of your portfolio to some extent to reflect all of the things we just talked about. >> absolutely. i think for a while now valuations haven't mattered. the areas of the market have become extremely distorted and hi hyper focused on growth which is ex-spenpensive for the market

that didn't happen since 2018 with the trade war and further with the pandemic. this shift by central banks is the catalyst that makes valuations matter. if this is a feature not just right here and right now, but the cycle ahead, then that absolutely means we need to reorient from the expensive areas of the market to the cheaper areas of the market. it can be as simple as moving to take profit in the u.s. and moving overseas or taking profit in growth and moving to value. it is intra within tech. software or discounted with semiconductors it is a cycle more alpha, not beta >> thank you, gabriela santos. thank you. coming up, when we come back backlash after the bank of england asking workers not to

ask for raises to keep ilaonnfti in check we have that story after the break. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. or necessity. we can explore uncharted waters, and not only make new discoveries, but get there faster, with better outcomes. with app, cloud and anywhere workspace solutions, vmware helps companies navigate change-- meeting them where they are, and getting them where they want to be. faster. vmware. welcome change. cody! hi!! hi! how are you? i'm good! i'm crocheting. i see that. started off as a hobby. kind of snowballed from there. and alex, i don't want to stop. well, i don't see why you should have to. let's set you up with a side gig savings goal on the u.s. bank mobile app. this way, you can turn it into your main hustle before you know it. you're my hero, alex! what are you working on now? pool cover. that's fun. oh! i made my wife a bathing suit.

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welcome back to "squawk on the street." bank of england governor telling employees they should not pressure their bosses into boosting wages he said it would be painful for workers, but moderation of wage raises is needed to prevent inflation to become entrenched he asked to assert restraint in pay negotiations this drew ire of worker unions and prime minister boris johnson. it was quickly pointed out his salary of 770,000 pounds, $

$770,000 is much higher than usual wages. >> everything else is going up so they have to suck it up >> it is opposite on what everybody else is doing. peculiar other people say stop gauging us on the costs of products >> both of those are price controls that ignore the reality of the pressure causing this to happen we tried this. you guys weren't around. i had a win button >> i heard of it >> the whole notion. you know, elizabeth warren says it is not enough companies in that business so they are gauging. these are real things. these are real economic issues did they not go to econ 101?

that's all i had >> costing are up for a reason >> it happens. >> price pressures have gone up for input. higher for labor and higher for shipping with the issues with the supply chain all of those things. by the way, if farmers don't get to charge more for what they put in for the food, they will lose their shirts they had to put the money up front for higher prices for fertilizer and everything else >> and the supply goes down. it happens with commodities. copper if prices are too low, you stop doing it it is all so simple and function of supply and demand sdp >> it saulis all true. there is price gaunging on top f it >> you can find places like dealerships where they are charging an extra $2,500 >> you can see it at the gas

station guy where it is -- it is not anywhere else. they always have something. >> we had a great tweet over the weekend about the chanel bag that hadgone up $3,000. >> $5,000 and up to $8,000 which is ridiculous. i can't believe people pay that to begin with. this is the problem. there's so much demand and so much money people have so much money to spend. they are willing to pay higher prices >> live cattle futures that did not go up enough. was it leather >> it was. it was one of the really small ones a real chanel bag. it doesn't matter. they raised prices three times over the past year and still incredible amount for the overpriced bags. >> chanel bag is like an nft >> useless >> no way to assign intrinsic

value to a chanel bag. never ask for intritrinsic valun anything the entire world thinks sell without intrinsic value. i bought a couple. i paid for a couple of those that other people bought for christmas. no you really didn't -- that's really the price it goes for $3,000 >> now it is $8,000. >> $8,000? >> for a little chanel that fanny pack of yours is chanel >> you can't say stop asking for raises and stop giving raises. the workers have the power to walk away. that is why you see wages go up. it is an inflationary spiral find another way to stop it. you put too much money in the system by giving people money for anything and everything.

slow this down don't expect the workers to say okay that's okay. we won't ask for a raise >> great idea for management help us out here. >> right when we come back, an update on the situation in ukraine with russian troops amassed on the border we'll take a look at how the crisis could unfold from here. as we head to break, look at yesterday's s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business keeping your business connected. so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment.

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good morning welcome back to "squawk box. the dow with a slight gain. the s&p is down after yesterday. nasdaq was down. now in the red this morning. becky. thanks, joe.

president biden and german chancellor scholz are committed to working together to address the volatile situation in russia and ukraine as western leaders try to ease the crisis tensions run high as vladimir putin is considering invading its neighbor the white house says this invasion could happen anytime. joining us is michael hanlon a senior fello michael, you think this would not be the case, but the tension seems to ratchet up. president biden told u.s. citizens to leave to avoid crossfire. what is the latest scuttlebutt >> it is true, but it is true that president macron is going and scholz is going next year. there is a number of business to attend

i think we have to calibrate the amount of anxiety correctly. i think the anxiety is, itself, vladimir putin's goal. my best guess is he will not invade the enormous cost that would ensue would dominate the rest of his presidency in russia i don't think you could ever imagine a normal relationship are russia and the west. we will try to get off russian oil and gas. i think he is playing a psychological game and wants to change the fundamentals of the ukraine security my best guess is they will still have a fair amount of business the next few days and weeks even as president biden is calling for other people to leave ukraine. >> how do you think he is doing in terms of getting the diplomatic pressure he wants to make sure that ukraine is never added to the nato alliance >> i think in a way this is a

funny thing to say this could wind up that everybody accomplishes their minimal goals. if you mean how putin is doing, i think he can back off and maintain facade that he was doing a big exercise none of us willbelieve that. it was all coercive diplomacy. if he does eng invade, everybody will breathe a sigh of relief. we will continue with the commerce europeans are still buying russian gas. it's winter. they need it we are still buying russian oil. if you are president biden, if war is averted and this threat of sanctions combined with the ally threats is the reason we pursued putin to do this, it would be a feather in biden's cap. i hope this is a win-win we will see. >> is germany committed to shutting down the nord stream 2s

>> if scholz buys it or not, i cannot see that. i feel like whether we realized it or not, we will essentially cutoff most business with russia over an indefinite period of time as fast as we can europeans still need russian oil and gas. it will take a while i can't imagination how you do business with russian troops in the path of ukraine. i think the chancellor scholz had that pointed out to him yesterday. i think he needs it. if it goes well beyond preventing nord stream 2 from operating. that is preventing a future source of revenue for russia i think we will work to scale back existing revenue if putin invades which is why i think he won't invade i think he realizes that >> to your point, the united

states is importing russian oil right now. why are we doing that? >> you know, it's a wonderful free market. part of the goal here is that we like to engage russia with the same philosophy with china for 40 years and still do to an extent if you engage, they will have a stake in the national order. the problem with that philosophy, if you build up too much dependency, they use that against you and feel like you won't confront them with the crisis that's about the best answer i can give you mostly it is because people are looking for the cheapest oil and gas they can find. >> michael, you talk to generals and a lot of people. free market was driving things for a long time with the oil markets. how much more is that discussion becoming one of national security and one of looking around and saying we have this in abundance and we are not using it as a result, we are getting into problems with national security.

>> i'm glad you asked. in the united states, we don't do a good enough job of integrating the military side with the economic side the military side doesn't think about sanctions. sanctions folks don't think about weaving those ideas. secretary austin has the idea of integrated deterrence which has a lot of potential we are seeing economic threats at the forefront of the strategy with russia right now over a security issue we would do the same thing with the actions china would take in the western pacific. we have to look at how people study when they go to graduate school and public policy and learning these fieldssimultaneo. we don't think how a war plan can lead with sanctions or other puni punishment we slap the sanctions on that is the response of the united states.

>> the plan with the secretary of state how would that work? what are the practical implications i'm thinking of this from the market we watched oil prices run up to $90 a barrel with all of the tensions and this gets into a more cohesive plan, how does that play out? >> it is not clear how much the secretary of state or the white house buys in. secretary austin has given speeches and we will see what the biden administration says in the coming weeks to your point of how it plays out, it is really the right strategy when you are talking about potential aggression against countries that are not american allies and we shouldn't be willing to risk u.s. lives or power war over a military response where the consequences are too great to ignore or do a token response it has to be at the centerpiece of the american strategy it is not yet.

>> michael o'hanlan is with the brookings institute. great to see you. >> thank you, becky. >> that would be good, becky i don't know most people assume it will happen it is 70% people think i think that is the number they said >> probably. >> i wonder. he has already done all. this he has accomplished what he wants. he can really look like a m magnanamous world leader >> the only way to save face and accomplish what they were looking for. on another note. andrew, i have been thinking about a fanny pack i don't have one. >> a fanny you're right you don't. >> what do you use it for? phone? trail mix? whatever you would not have in your pocket? >> lipstick. >> it's very practicpractical. unless are you going to wear

cargo pants. >> you can put a water bottle. medication in there. >> a lot of things >> all of the above. >> i don't have one. you know what? this is appealing to me. coming up, pfizer reporting in the next few minutes. we will bring you the mbnuers and reaction on wall street when big pharma and vaccines report keeps has given me the control of my hair back. seeing the progress was awesome, seeing my hair grow back so quick. i feel great, i feel confident. i feel very happy about my journey so

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as promised, pfizer releasing quarterly results. let's get to meg tirrell with the report hi, meg. >> reporter: adjusted earnings at $1.08 a share revenue was a slight miss for the quarter. $23.84 billion versus $24.12 billion. in terms of guidance, coming in light. revenue projected to be $98 billion. analysts were looking for 105 po105$.5 bil billion. in terms of the covid business, this is massive. the covid vaccine, $32 billion in 2022 sales. up $3 billion from last quarter. that is based on contract signs.

for the covid anti-viral drug, sales of $22 billion guys, we will have a lot more to talk about with pfizer with the ceo albert bourla who will join us today at 3:00 >> that is lot for paxlovid. is that units or both? >> well, in the united states, it costs $500 per course based on the deal signed the u.s they can make a lot of this and they are planning on delivering it throughout the year it does reflect how much they will supply. >> what did pfizer do before covid, meg add it up. the vaccine and paxlovid is that $50 billion? >> reporter: yeah. 32 plus 22 >> are you kidding me? >> reporter: that's a lot of money. >> you said 99 total

>> reporter: yeah. 98 to 102 is the forecast for the year this transformed the company albert bourla talking about that how it changed pfizer completely and how they plan to carry that to other therapeutic areas that is the question that investors have for pfizer. >> think of moderna being more sensitive to a setback good news on covid is a setback for the vaccine makers, i guess. you think moderna moves a lot more pfizer, that's a lot of -- these have a lot at stake with the covid business thanks, meg. we'll talk about it more you have albert bourla on. andrew thank you, sir coming up, how companies can survive the ongoing great resignation. our next guest is here with e th future of work we will discuss it all when we come back.

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welcome back to "squawk box. this morning as covid cases start to decline across the country business leaders are trying now to determine their plan for returning to the office joining us right now is a harvard business school professor and author of a new book "deep purpose, the heart and soul of high performance companies. congratulations on the book. we're all grappling with this new reality of hybrid work i don't know if that actually is the new reality or something else and the idea of the great resignation. and you've been spending a lot of time thinking through and talking to a lot of folks about what that looks like in the future >> well, if you told me five years ago i was going to write a book about purpose i would tell you you were crazy i was starting high growth companies and i found there was an unlock among some of these high growth companies. they had found a way to leverage something they called purpose as

an mating force for their employees, for their strategy, for their customers, for their markets. and that to me was intriguing. it wasn't just having a purpose statement. there was a lot of confusion about the idea there was much more something profound understanding your customer engagement, what your strategy is. and that was the whole story behind this i was trying to understand to bring fast forward -- >> no, go ahead. >> fast forward into covid times we're talking about the great resignation and what's going on around us today and need for more work. i think we've completely missed the mark on this one because we think about this in terms of, okay, this is all about the great upgrade, yesterday somebody said, which is about pay people more but what's really going on i think people expect more from their lives and more from work covid has done something that is forcing us to reconsider our own purpose. and if organizations don't

understand, i think it's not the great resignation. i think it's the great rethink we're all re-imagining our lives and the role of work in our lives. we want to work in an organization which cares about us but also i'm connected to what the company does and it means something. and if you look at spotify it's a great example where you're seeing employee rebellion saying i don't really believe in the company. >> but, raj, let's just talk about this because this to me cuts two ways. one is the purpose in many ways represents culture and has created a culture at firms that historically didn't really have a central theme or thesis beyond what they did. and oftentimes now there's been this sort of new purpose layer so one question i have for you is is this just marketing? is this part of creating -- i don't want to say pretend

culture, but a little bit. there's a bit of a market -- internal marketing story to each other. but at the same time how does this impact the idea of culture in a hybrid world because to the degree that you can successfully implicate people to believe in this, quote, purpose, maybe they don't have to be all in the same room together. >> so the first thing you said there's a lot of purpose washing going on it plays into the hands of cynics that say this all a bunch of side screen, what people call virtual side hustles or cloaking a lot of these companies pull out a purpose statement when it's convenient for them, so i think we need to -- the company i looked at, you look at microsoft, you look atetsy, you look at lego and look at an unknown company you wouldn't have heard of, gotham green, these organizations have found a way to really leverage purpose into something that connects

with their employees now, you use the word culture. culture is about the norms and rules of behavior, how we do things here. purpose is a why question. you might say this is an academic question. why is a forcing question? it forces you to ask what's your financial engine for growth short-term and long-term, how we're going to create value. it's about understanding your markets and customers so you have a clear strategic a agenda. it's about engaging. it connects with your customers, supplies, ecosystem. but, unfortunately, too many companies take it superficially i think and hasn't caught onto the idea that purpose does translate to profit. and i think that connect is i think what we are missing right now in a lot of the popular discourse. >> ranjay, it's a longer

conversation we congratulate you on the book and hope to have you back to continue this discussion thanks so much >> thank you my pleasure to be here with you. a big line-up still to come this morning including the ceo of oil giant bp, market guru ruben stein. the futures this morning are mixed right around the flat loin, though dow futures up slightly, s&p futures down slightly. nasdaq down about 34 "squawk box" will be right back. esg is responsible investing. who's responsible for building esg into your investments?

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breaking news this morning, peloton ceo john foley is reportedly stepping down, and the company is said to cut 2,800 jobs we've got more on this and other market movers coming straight up bp reporting its highest profit in eight years thanks to soaring commodity prices the ceo bernard rooney will join us live. and just how much are americans planning to wager on the super bowl the numbers could break records. that story straight ahead as the second hour of "squawk box" begins right now.

>> good morning and welcome back to "squawk box" right here on cnbc let's show you u.s. equity f futures on this tuesday morning ahead of what looks like is going to be a very busy day in terms of both earnings, news on peloton. the dow up about 11 points but the nasdaq down about 31 points and the s&p 500 down a little over 5 points. >> the earnings just crossing in the last few moments or so, within the last 10 minutes more of a mixed report here that the earnings appear to look like they're doing better than expected, however the revenues do fall shy as do some of the expectations for its outlook in both revenue and earnings in this coming year as well so if you take a look at pfizer

shares, those are the ones down now just about about 3% of the premarket trade. keep an eye on pfizer shares also watching what's happening right now because you did mention those headlines with regard what's happening with pel pawn-touch it is now official. we do so john foley, the former ceo stepping down. barry mccarthy, the former cfo at spotify and netflix will take over those shares right now down about 6% right now, off the session lows, but peloton still volatile and there's an executive shake-up there happening, so we'll see how that plays out with regular trading today. also watching what's happening with headlines with regard to things in technology sector right now. we do see nvidia lower by roughly 1.5% nvidia is now scrapping its plans to take over armed holdings owned by softbank instead softbank will look to pursue an ipo for armed

holdings and then take two interactive, a big report last night. earnings come in better, revenues were just shy of expectations with some traders and investors and analysts may be disappointed with regard to its outlook for bookings and take two shares down roughly 2.5% of the free market trade. and take-two ceo strauss zelnick will be joining us to talk about the results and recent consolidation within that video game sector. of course a lot of activity there. and of course a very, very big must-watch interview i'll send things back over to you. >> we're all going to be in the meta verse just playing games, woo and we may not even leave the house anymore. so we're going to talk to strauss about that i think, dom. >> i don't know if you've ever

watched star trek the next generation, the holodeck where you walk in a room and everything appears around you. >> i was talking about what was that the pixar film where everyone is fat in the chair >> walle >> no muscle tone, don't go out, no fresh air eat potato chips all day long and play video game. >> that's because they made robots do everything for us. >> right it's appealing to me on some level. let's talk about some of this morning's movers including peloton, nvidia and pfizer managing partner at dcla and a cnbc contributor joins us. i think it's good we can focus on some individual names it's an old and tired and hackneyed expression it's a stock pickers market or a market of stocks not a stock market, but i think it makes sense given

the overall backdrop right now you need to be selective because i don't think you can just count on everything moving higher because of easy money. so what do you like? >> in terms of where you want to be i think you've got to look at secular growth stories companies in health care like j&j could have a catalyst soon spinning off there, consumer division that have great farmer products, companies like charter that had polling demand but trade 15 times earnings and cash flow are going to grow 15 times. i think if you look at those type of companies you don't necessarily have to be in the index or sector or etf you should look at specific companies and look at morgan stanley. that's got 60% of its income coming from wealth management. that's a great tail wind, balance sheet in great shape and they just double the dividend.

>> can you speak to pfizer, though, since it's in the news, just reported results. >> sure. >> adding $50 billion of incremental revenue to a company we've heard -- pfizer is not like moderna it's got a lot of other moving parts so it's not as dependent, but there's been some multiple compression. i mean, that stock has not moved to the same extent you would think based on the way its business has improved. what's it trading? at this point the multiple -- >> eight times trading at eight times earnings. it trades eight times, so did bristol so what the market looks at is not the short-term next 12 to 24 months earnings, it's really what is the future of your pipeline and really what are we going to discount that at so in fact it's kind of perverse if you look at it -- if you ge

a low pe it means "e" is going to down and go back to market multiple at 16, 17 times earnings it's really going to be what is pfizer going to talk about what are the benefits of having the vaccines for pfizer is now they have a bulletproof balance sheet. so i think you can take solace in that, but you also have to say what is the rnd for this company? what is it for bristol why are these stocks trading at single digit multiples because they're not getting credit and you have option value for the future so i think there is some potential there, because you do actually have this balance sheet, but it's really a show me story because the market is expecting all the vaccines and all the anti-virals to eventually end and hey, what's this company really going to be like? >> so society's gain could be pfizer's loss. is the action in the stock almost telling us that, you know, that we're not going to be like this forever? >> yeah. i mean, it's actually saying to

you we are going to be reopening, so two things one is we might not need your vaccines as much, and by the way if we do we're not going to be paying as much because now we've got other competitors out there, and the demand is going to be such that all the governments in the world are going to actually put pressure on what you can charge because you do have moderna and for the others so you're basically discounted and if you have another issue then all of a sudden the demand comes really up in the six months so it's really do you look to the future or say, hey, this company is keep on producing what it's doing right now? >> yeah, they need something people get every year, something that doesn't kill you that people get every year. and this is all or nothing with covid. you can't -- obviously that's not being valued very highly by the marketplace. eight times earnings thanks a lot for that explanation. >> you're most welcome >> see you later

the news on peloton, it is now official i want to walk through some of this we've been pouring through the release. it's pretty interesting. there is no mention specifically just yet of this -- of the cuts that are going to take place at the company. but in terms of the transition and really the question now is this company for sale? is this company in play? i'm going to take the position, i think, that it may not be in the way that maybe some investors thought. barry mccarthy was going to be taking up this role, of course, had roles at spotify and netflix. we don't know what his compensation arrangement is going to be. when we do see that, you imagine that being in it filings with the fcc, we may have a better understanding whether this company is really up for sale or not. but in many ways as you look through this release, there seems to be -- it looks like over the past several months this board had been talking about a transition that's what they're saying if you believe them about finding a

successor to john foley. so clearly the writing was on the wall, i think, for foley he of course does have effectively a control of the company. and he has decided to do this. but here's the other interesting point. if you think that john foley's really not in control, you might also want to think again because john foley specifically says in this release that one of it reasons that he's hiring barry is because of the, quote, tremendous success that barry has had in the past in partnering with founder ceos at other brands and that's in specific reference to read hastings at netflix and daniel ec at spotify >> real quickly, the market agrees with you. look at the stock is now down 10%. it was down earlier this morning. it's down more steeply having seen this release and what they're saying >> the language in this release just wouldn't suggest that this is a company setting itself up

for a sale having said that, that's not going to stop necessarily if you believe that a nike or an amazon or an apple never wants to buy, they can come forward with an offer. but this doesn't feel and read like a company that's ready to sell itself tomorrow >> i agree with you. the one thing i didn't realize about barry mccarthy is he's got a background in investment banking, too >> which does lead you to the deal making side of it he does lead to the direct listing of spotify, so he does have clearly experience with the capital markets, which is probably i imagine another reason they wanted to hire him because there's going to be a cell job to be done here with the institutional investor class and perhaps the retail investor class as well. why don't we try to bring in an internet analyst on this topic now. analyst at mkm partners. what do you make of this do you think this is dres up for a sale or do you think this is a plan to operate?

>> barry has been the pcb of the silicon valley investors and it's one of the top holders in peloton. it used to be a top holder in netflix, spotify, and barry is coming in probably to turn around this ship in the next six months beyond that we shall see, but i feel that's where they're headed right now. >> but are you looking at this as a temporary turn the ship around to sell, or are you looking at this as operate into the future and john foley wants to be there and this is -- this is the beginning of something else >> my biased quick reaction to reading all this and processing, they are hoping to be a better improved company, which means

probably continue to operate as an independent entity over the longer term. barry mccarthy in my opinion wouldn't step in for a temporary job to turn it around. >> as becky just mentioned the stock is off it's maybe a little bit better than where it just was it was at one point off about 10% and now about off 7%, 8% investors don't seem to be happy. this is not what i imagine they were hoping for. >> again, i feel over the last couple of days given all the things that we have heard on all the media outlets i think investors are hoping for a good sale so, again, this is not something they would have expected so therein lies the disappointment he has led to the largest

internet subscription platforms. and if peloton has aspirations to get there, i think there's no better person than barry mccarthy to bring in the expedience and of course investability that barry has so i think this is long-term and short-term probably brings out investors who were looking for a quick buck here. but if peloton is going to be leading over the longer-term i think this is a good long-term for the company. >> real quick, is this a buy >> would you be long this company today at these prices? >> by the way, we're going to be getting earnings and give barry a new shot at opportunity moving forward. >> yeah, exactly we are neutral on the stock, but

given how the company is looking to turn around the ship and what they have to say in probably 75 minutes or so, it was going to be after hours yesterday and it is going to be before market so we should see earnings released shortly i believe they've already announced a whole bunch of optics and cap ex cuts. it would get them back into being a company that can execute in this new normal >> as you were speaking they did just announce their earn they're slashing their full year outlook to $37 billion from $38 billion for the full year. we're going to dig through that release over the break and come

and talk about that. but we appreciate your perspective in realtime this morning. also when we come back we'll talk more about oil and gas giant bp which reported a massive upswing in profit. it was its highest in eight years. bp shares this morning up by about 11 cents and the ceo will join us after the break to talk about the quarter. and then co-founder and cochairman of carlyle group david rubenstein joins us to talk about the markets, atn d much more. "squawk box" will be right back.

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welcome back to "squawk box. shares of energy giant bp are higher this morning after the company posting a big jump as you imagine profit for 2021 swinging a loss from that $5.7 billion the prior year to a profit of $12.8 billion. joining us right now is bernard louie, bp's ceo. great to see you this morning. obviously given the price of oil things have looked up in a major way for the company. let's walk through the earnings but let's also sort of walk through what the future there for it looks like. >> andrew, good morning. and thanks for having me on. great to see you

it's been another good quarter for the company. we did deliver good earnings we're doing what we said we would do we're strengthening the balance sheet. our net is down for the seventh quarter in a row we're growing returns. we actually reported a return employed about 15% for the year. and we're growing districts. we announced another $1.5 billion of buy backs this morning taking us over to $4 billion in buy backs on top of the dividend last year so the business is doing well, and at the same time we're leaning into the transition and investing in the bp of tomorrow so to speak. so performing while transforming that's what we call it here, and thankfully the results show we're doing that this morning. >> wer nard, i want to talk about the transformation in a moment but i also want to talk about the spotlights these are going to put on the company. as you know there are calls in the u.k. and elsewhere wind fall

taxes given the price of oil we're now at 2014 levels they haven't been this high since then where do you see them going? and to the degree you keep making enormous profits, is there a risk in that at this point? >> well, look, we are aware, obviously, of the conversations here in the u.k. where some people are calling for a wind fall tax our position obviously is what the u.k. needs today is more natural gas supply, not less and we need to incentivize production in natural gas supply to do that and wind fall taxes aren't exactly going to do that i think the other question is what are companies like ours doing with the profits we make and today, andrew, we announced that by 2025, which is only a few years away, we'll invest over 40% of our annual capital into transition growth businesses in bp, into things like bioenergy, biofuels and ev

charging we just did a deal in america to buy a fleet charging business into hydrogen, into renewables so that's what we're doing with the profits. i think i understand that people think this is all down to the price environment. it, of course, helps i would also draw our attention to the fact over the last two years we've taken out $2.5 billion of cost inside the business we just completed the largest restructuring in our history, close to 10,000 people left in the company. go to $4 billion cost savings over the next few years and we're digitizing the business and growing our skreens business over 10% yes, price helps but there's an enormous amount of self-help inside the company as help >> given that price helps in a big way, let's talk about where you see the price headed over let's say the next 12 and 24 months >> well, as you know we've all

learned not to predict the price of oil because we know that's one sure way in life of being wrong. but, look, what i think we can say is there's obviously a lot of uncertainty in the oil and gas price environment. we've got what's going to happen year round in oil. we've got in your home country what's going to happen to u.s. shale and how it's going to respond, what's going to happen in libya will there be another variant? all of these things clearly are factors one has to take into account. can you see a tightening oil market later this year you can. and we can see that. that's not a prediction. that's just you can see that but at the end of the day i think what we'll expect in both oil and gas markets, andrew, in the coming months is a lot of volatility we're running the business on a break even of $40. we don't know what the price of oil is going to be we don't set it. we want to run our business with an eye on the down sietd there's a lot of uncertainty out there and that's what we're

focusing the break even on around $40 if prices are higher than that, clearly we'll reap more profits so to speak and our shareholders will see more in terms of distributions. >> president biden in the united states have talked about trying to do something to help the american consumer when they go to the gas tank. is there anything you think he could reasonably do? >> look, i think -- i think we're all agreed that the energy transition is happening, and it must continue to happen at pace. what we need, of course, is that before we turn the supply off we need to know what we are replacing it with, and therefore this is a difficult and complex transition, which, by the way, plays very much to the strengths of a company like ours that has natural gas and renewables so we can give consumers what they want which is clean and reliable and affordable power we can mix that together in one company as opposed to buying your renewable power from one

company and your natural gas from someone else. so i think high drocarbon supply is important i think we must continue to invest in that i think it would be a real tragedy if high oil prices and high gas prices and high gasoline prices were somehow linked to the transition because you run the risk it could turn society off of the transition we all believe we need to make. so this needs to be a planned transition, and we need investment in those hydrocarbons to enable us to do so. >> final question, your car chargers apparently are going to overtake pumps in profitability for the first time how does that change the dynamic in which you invest in that part of the business? >> we're leaning into that part of the business heavily. it is one of our five transition growth engines we will increase investment. we've accelerated our targets in this space and we're putting in 115 charge points every week in our global portfolio we sold 4 1/2 times more energy

in our charging business last year than we did the previous year, and you'll see the same happen i have no doubt this year this is a massive growth opportunity. people need that convenience offer on top of that so we'll obviously service that. we see this as a plus and end conversation people will continue to need fuel but ev charging is a massive growth business, and we're leaning right into it. >> great to see you this morning. appreciate it. >> great thanks, andrew when we come back carlyle group's david rubenstein will join us to talk about the fed, future and markets now we're a little weaker across the board. dow futures are down only about 2 points s&p futures down just about under 10 points. nasdaq down about 60 points. not massive moves but certainly

a change in direction. stick around "squawk box" will be right back. is people. people who see healthcare a little bit differently. where technology helps doctors provide more precise care... leading to faster, better outcomes and puts improved health in all of our hands. because seeing a healthier world isn't far in the future. we're building it... now. ge. building a world that works.

still to come on "squawk box," going to talk to the carlyle group's david

rubenstein, gold belly ceo joe ariel, and take two interactive ceo joe zelnick. we're celebrating black history month and featuring some of our cnbc contributors. and here a contributor with his advice for america's future leaders. >> my advice for future leaders is to be very careful in terms of diversity, inclusion and equity it has to be created but it also has to be managed. so we have to understand how to put different perspectives into our discussion making and our brands and organizations and those different perspectives we have to cultivate and manage them appropriately so we can create the type of organizations that can be successful

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bank of america issuing the most aggressive fed call on wall street this career calling for seven rate hikes and four more next year. joining us right now is

billionaire investor and philanthropist david rubenstein. david, it's great to see you this morning thank you for being here >> my pleasure, becky. thank you for having me. >> why don't we talk about inflation first. we do have cpi data coming this week it is expected to be very hot. we've been looking at the hottest inflation numbers all the way back to 1982 you start to hear about the potential for sevenerate hikes first of all is it warranted and do you think it will happen? >> remember in the 1970s when i was in government we had a different situation. t inflation was double digit we're not looking anything like that the fed telegraphs much better than it did in the 1970s it's a different world i think the market is anticipating when the fomc meet in march, middle of march this year it will increase fed fund rates by about 25 basis points 50 basis points is possible with the data between now and march 15th or so, but i suspect

anything less than 25 basis points which would say no rate increase would be a big shock. something more than 50 basis points would also be a big shock. i expect the fed will move gingerly each time it meet probably looking at quarter point basis points, 25 basis points each time it meet this year seven times overall and it's already met once, so six more times this year. i suspect it won't increase at every one of those meetings but something around 25 basis points >> no question this is not what we saw of inflation in the 1970s. we're not looking anywhere near that when you're talking 7% increases in cpi that is significant we were talking this morning about comments made in england about how they think workers should stop asking for raises and bosses should be more strict in stopping handing out raises

to cut inflation but that seems a little crazy when you look at the price increases consumers are dealing with right now, whether that be food, heat or gas to fill their cars at this point. inflation is here, and it is having an impact >> inflation is here it's not double digit inflation. we think it's probably due more to things related to covid because the supply chain got disrupted. manufacturers started moving things away from producing new products and ultimately in the market it wasn't able to produce them so now the supply chain is coming back from a more normal situation. it may take another year to get there, so i don't think we have the enormous wage increase we had in the 1970s that produce inflation. other things produce inflation as well. oil prices are driving it as well i do think it's likely we'll get this under control i don't think it's quite as systemic as we saw in the 1970s, but there's no doubt the fed

needs to do something. i think the fed recognizes that. >> david, i realize it's nowhere near as bad as what wii saw in the 1970s. i realize it's not double digits you do hear so many stories about workers asking for raises and getting them i heard another story about a restaurant owner who had the dishwasher ask him for a raise from $25 to $18 and when he said no the guy left and the owner's been washing dishes himself for the last three weeks and family ofs of -- these parents are staying up all night not able to sleep to keep their children alive and there are some real world implications of what's happening right now and it is showing up in wages >> remember we do have a very low unemployment rate and the worker participation rate has

increased, so it's hard to get people at lower wage levels to work, and a lot of employers are having trouble doing that. remember we never did increase the min pm wage. minimum wage is relatively low in this country. i don't think it's going to be so systemic you're going to see a sustained 7% inflation i suspect it'll come down closer to 4% or 5% later this year. >> so if the market knows that this is coming, if this has been pretty well telegraphed and the fed moves at an orderly pace, two questions. first of all, does the market react to any of these moves, or has it already done the reaction we've seen a 10% cut to the nasdaq seen other stocks come down significantly more is that enough is that a reflection of what you think is going to happen >> well, the s&p 500 is trading around 23 times multiple

normally the s&p 500 is around 1700 or 18 times you tend to see a much lower ratio you have now so the markets are still a little bit full i would say probably compared to where they are normally so a slight correction wouldn't be unwarranted or wouldn't be impossible to see. >> and i guess the second part of my question is the fed is also going to be tightening the balance sheet at the same time we've never seen a tightening like this. how will that play out what will that change? what are the market implications of that? >> when we had quantitative easing the first time in the great recession the fed did do a good job of reducing its balance sheet. it's going to take a bit longer to get the balance sheet reduced, but i think the markets anticipate this, and i don't think that's going to be as big a problem. i think the big problem is something comes unforeseen if there's a war in rushy or

aukraine, if something happens in taiwan. when there are geopolitical events that come along we don't anticipate, that would mess up the markets much more than anything else we're likely to see. >> the market is anticipating russia doing something in ukraine. that's why we've seen oil prices moving so high so quickly. >> i think the market is uncertain as everyone is uncertain about what's going to happen in ukraine. i think president putin is looking for a way out, in my view i don't really have any inside information, but i suspect he'd like to get off the precipice if he can find a way to do so ultimately if he looks for a face saving way out it won't be seen as a terrible loss. on the other hand, i think it's very important as when the soviet union fell president bush didn't jump up and down and say look how great i am, look how wonderful i am and i got the soviet union to collapse if putin does back down not to brag about how wonderful the

diplomacy has been but to give him a safe saving way out and let him take that face saving way out and not say how great we are in coming up with this diplomatic triumph >> just in terms of the rotation we've seen in the market where people are getting out some of these high growth names and some of the leaders and getting back into more value oriented names, is that a move that makes sense to you right and do you think that continues or have you seen that play out, too? >> some of the biggest names in the market have incredible valuations that are hard to justify. so when some of the air is out of the bubble of some of these things i think it's not a big shock. i think that's unusual and i think not expected, but i suspect that market value will come back a bit. >> you're talking about meta >> yes losing 25% of your market value in one day is unusual. it's a very strong company but that is unusual loss i think some of the biggest

names probably have a bit more air in them and might be expected at this time in the cycle, but i don't see a big market correction of the type that's going to push us into a recession. i don't see that at all. i think market correction will be modest relative to what we've seen in the past when you have a gigantic correction. >> what's been interesting about this has been the strength of the consumer through the economy. if you listen to bank of america they talk about how people paid so much off their credit cards during the fourth quarter so much than they had been a year ago or two years ago the strength of the consumers it seems almost every level how much money there is to spend from consumers and businesses, makes this time a little different. is there any time you can go back to and say this reminds me of "x" time? >> well, the consumers do have a fair amount of cash and i think they are paying down as you suggest. i don't think we have an over leverage situation as we had in the great recession. there was an enormous amount of

personal credit we had in 2008 and 2009, and we don't see that right now. i think right now we have a bit of a confidence problem. people are uncertain about the future and i think people are also unsure about what exactly the fed will do and the impact will be. on the whole i don't think the economy is in dire shape i don't think anything like a recession is imminent. so i do think you'll have air out of the bubble and nothing i would say is really never wracking in my view. >> thank you for your time, sir. it's good to see you >> my pleasure thank you very much. coming up, the super bowl is expected to smash gambling records. we'll tell you how much money is going to be on the line this sunday stay tuned

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welcome back to squawk peloton shares sliding again in the premarket this morning in the wake of a significant shake-up peloton ceo john foley is stepping down to be replaced by former spotify cfo barry mccarthy and cutting 2,800 jobs peloton lost $1.39 per share for its latest quarter analysts had anticipated a loss of $12.21 per share. the reason why barry took this job was to work with him so we'll try to read into more

of this when we come back. squawk returns after this.

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like a lot, a lot. millions literally of americans are expected to place a wager of some type on the super bowl contessa brewer is here to tell us what has changed as states continue to adopt and liberalize legal sports gambling. i don't think it's legal yet online in california, is it, contessa >> no, it's not legal in retail

sports books in california, joe. and that's a big problem if the state of california going into the super bowl we're likely to see an enormous spike in the number of people who bet on the big game this year according to research just released this morning by the american gaming association, it predicts 31.4 million americans will make a wager on the big game, up 35% from last year, and they'll bet an eye popping $7.6 billion up 78% from last year that dramatic rise attributed largely to broader access. well, since last year ten states have launched illegal sports betting meaning 45 million more americans can wager in their home state than last year. and in total betters can legally wager on the big game in 30 states plus washington, d.c. with three more states having legalized it but not yet launched one of those states, ohio, home of the super bowl contender

cincinnati bengals so get this, fans in ohio can root on their team but can't place a legal bet on them. that's okay neither can the california fans of the l.a. rams nor any of the spectators at the super bowl not legally. research by sports handle.com suggests we'd see an additional $400 million wagered on the game this year if those two states had live legalized betting and also has ten betting platforms a game competitive to the fourth quarter and all the others are hoping for, too >> all right, contessa, new jersey i'm good, i can do it, i can do it on the bengals i'm plot saying i'm doing the bengals, probably. our next guest has a front row seat at what will be served at

super bowl countries super bowl's great and specific events are great, but in general food e-commerce has flourished during the pandemic. i can't imagine it's going to continue to be great but 30% growth still expected per year for the next three or five years, right, joe? >> that's right. why not? food is a $1.7 trillion market people want convenience, people want experience. and i think in regards to what we do an emotional food experience, right? why is it in fashion, in travel, in gadgets you can have the best stuff no matter where you live we do the samefor food it's not about where you live. it's about what you love it's the foods that bring you happiness. and that's the business we're in >> and you're speaking to me because you specifically mention what are trash can nachos?

it's got everything on them or -- and emotionally i already feel connected to those. are those going to be big this sunday. >> you should. yeah, you would love trash can nachos so guy fieri created this dish and you get to choose brisket, pulled pork or beans on top, and it's a whole experience because you actually shuffle out the can and this pile of gorgeous nachos appears in the middle of your super bowl table it's a good thing. >> yeah, you are making me emotional. i'm feeling a bit teary. you know, i thought about something. you know what the meta verse is never going to disrupt, gold belly. i don't even want to eat on the meta verse i want to eat, eat, eat.

eat, eat, eat. so tell us exactly how gold belly is different from other -- for people who don't know, other food e-commerce sites. >> sure. so, yeah, we're the first national platform for food e-commerce and we've created the first ecosystem of food makers, restaurants, iconic restaurants and chefs all across the country, that now for the first time can reach customers no matter where they are. so, if you're in alaska and you're craving new york bagels we'll ship it to you overnight the same thing is true if you're in new york city but you love barbecue and want some kansas city barbecue or texas brisket basically we've made the entire country and eventually the world one ecosystem, one platform where you can actually experience your favorite foods no matter where they are, have them at your table and create the first really at-home restaurant dining experience

>> that is pretty cool so you can get a philly cheese steak from one of the great -- one of the great places down there. there's like five of them. you could probably get a sal's pizza. what about montgomery and ribs or some skyline? >> some skyline chili, one of the top sellers right now for sure pat steaks we ship it. and you can't forget anchor bar wings, they invented buffalo wings in the 1960s, and you can get the original buffalo wings >> how bad is inflation, joe all this is all great, but what are you seeing what are you hearing from suppliers and just for you in general? i mean prices must be up how much 20%, 30%? >> we're seeing more 5% to 7% across the board, so nothing too crazy. fortunately, we work with about

1,000 small and medium sized food makers across the country so supply chain-wise everybody has maintained creativity and stayed pretty strong but inflation 5% to 7% is what we're seeing >> so you saved a lot of restaurants, i would think or at least helped save a lot of restaurants. will there be a reversal of that trend once we return to some -- whatever normal is >> yeah, i don't think so. i think the future -- and you can talk to most folks in the restaurant industry. the future of the restaurant industry is on the channel and in regards to what we do that means if you are a restaurant and you have fans and followers and people who love what you do but they don't live in your neighborhood, you want to reach them. and i think that's really the magic of gold belly for food makers now all of a sudden you can ship an order 3,000 miles it's not just about who lives in

your neighborhood or who you can reach on a local delivery platform the entire country is a potential customer >> you raise $100 million, got a new partnership with martha stewart. what else can you tell us? you can describe more food for me or actually talk the financials. >> one thing i'd love to mention we recently launched gold belly tv which is the first platform for video foodies we're giving them a microphone to show you how to make their dishes and show you how to reenact those dishes when you have them in your own home. we think it's going to elevate what experiential e-commerce can be it's something that's going to be really exciting for the future >> all right, joe, they're playing the music, thanks.

guacamole has got to be up like 10%, 15%, 20%. i don't know, there's always an avocado shortage when you really need it for super bowl coming uptish you see right there toyota robert carter. we'll be right back.

keeps has given me the control of my hair back. seeing the progress was awesome, seeing my hair grow back so quick. i feel great, i feel confident. i feel very happy about my journey so far with keeps and where it's going in the future. get started at keeps.com/tv. breaking news, a big shake-up at peloton amid acquisition rumors the company's ceo stepping down and a veteran executive is

stepping up. we're going to bring you the details and talk about what it all means on this beaten down stock. and new earnings from pfizer and fresh off some new quarterly numbers we've got a special interview from video game giant strauss zelnick. and the sudden rush of consolidation in gaming. think microsoft act division 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. u.s. futures this hour up around 18 points, down 36 on the

nasdaq, the s&p down 6 it's my clear broth jell-o day and i just had the gold belly guy on i picked the wrong day to be on the clear broth -- they're talking trash can nachos anyway, let's take a look at treasuries a little teary about it. as i said for a different reason there you can see the treasury market about 1.945%. >> big story this morning pfizer shares falling on the company's fourth quarter earnings report meg terrell joins us with more on what's happening, and meg, this is a big one. >> yeah, becky so it's not so much the quarter people are focused on what's driving the stock lower this morning. there was a mixed quarter, a beat on the bottom line but a slight miss on revenue really it's the full year

forecast missing estimates on both the top and bottom lines. and really the concerns seem to be in what's is happening outside of this massive covid business pfizer has forecast $54 billion in combined revenue from its covid vaccine and covid anti-viral pill. $2 $22 billion on the anti-viral pill side. they're learning now sustainable those revenues are going to be going forward as we move through the pandemic and worried about the rest of the business growing underneath it. the company also putting out slides ahead of that call and showing the trajectory of renting out the manufacturing of that anti-viral pill you can see so much of it is in the second half of the year, 90 million courses of the 120 million they plan to manufacture this year, 30 million coming in the first half 24 million in the second quarter so you can really see how this

ramp up is kind of exponential for this pill. the company also saying they're already working on a next generation version of this pill to improve upon it and make sure it can counter any resistance that might emerge. they're also starting to test this anti-viral in kids, the paxlovid, the one that already exists the question will also remain about the rest of the business becky? >> one thing about this company is they do have an enormous amount of cash because of what's happened this year, what's anticipated to happen next year, all these incredible sales coming through from covid. they're having questions raised about what they do with that cash pile. do they go ahead and make acquisitions or move in a different direction? >> yeah, that will be a question for them as well the question is does pfizer buy something really big and if so what does it buy and of course biotech valuations down so much there's a lot of hope among

investors pfizer continues to be a big buyer, but we'll have to see what their plans are on that front and what kind of target it starts to look >> in the meantime the stock down by about 4.03%. let's get a look at other top stock moves in the premarket and top super bowl foods in terms of what dom chu thinks dom chu joins us top super bowl food first. >> i love wings. i do like wings but i'm getting more into hjalepino poppers we're seeing another earnings related mover popping here and getting some attention, and

that's harly davidson. it's up about 6% of premarket trade. harley davidson comes out with better than expected profits revenues also coming in better for harley as well, and that was thanks in large part to demand for higher end motorcycles on the harley davidson side of things a lot of folks have asked this morning why we haven't talked about it yet but i will talk about it now this is due in large part to analysts over at morgan stanley who have downgraded this stock from an overerate rating to an equal rate rating. and also cut their price target and cited for the most part general motors guidance for the coming year is what drove them to do this

they also changed some of the methodology they value general motors on. some of the parts so to speak, and now they're looking at it from a discounted cash flow analysis so how much money they make each year going forward and then as we do in this hour, andrew, a check on the most popular tickers on our website yesterday monday's full session. meta platforms are still in the number one spot, still a lot of interest there of course peloton had a lot of interest yesterday, and i can only imagine it's going to be even more so as well digital world acquisition, i'm not sure if that caught your attention yesterday. this is the trump linked spack, the media technology spack and the reason why it shot up about 15% at one point yesterday before closing in the red, and was due in large part to a lot of the speculation surrounding what's happening with joe rogan and spotify. does it move and all of that

stuff. so that caused a lot of interest in some of these spacks linked to more alternative areas. >> dom, thank you at the domino. we're going to continue this conversation and talk about these two or maybe more of the stocks on that screen because one of the top ones there peloton replacing its ceo john foley and cutting close to 3,000 jobs, the news coming as peloton has now seen shrinking demand for its exercise machines and the company viewed as a possible acquisition target former spotify netflix cfo taking over as peloton's coo here to weigh in is the founder and managing director. there's a lot of speculation i think wrongly, frankly, over the last couple of days of possible sales of this company ahead of this earnings report are you of the view this changes that dynamic, this is again a setup for a sale or do you believe barry is

coming in to run it? >> i think he's coming in to run it, and i had that same view it's easy to speculate about a company being sold that's actually more difficult to get a deal done on a lot of levels i think john foley stepping down, barry stepping up i think changes the trajectory of the conversation understand why the stock is down today because i think that the easy read on this is a deal's less likely. but my sense is having barry at the reins here stabilizes the leadership and changes the conversation when talking to nike or other suitors. because instead of being a fire sale conversation it comes down to a reasonable valuation conversation and second, barry is the right person to take this company over not only is he a cfo who understands cost, and that's one of the achilles heels of the peloton story is related to cost, but he also understands content with his background at spotify and netflix. and he understands how to raise prices and so i think when you put this together the company despite

what we're seeing in the premarket here, i think it's actually in a better spot and stabilized the conversation. they do report tonight so we're going to get more details on what the actual growth rate is going to look like but for a first step i'm impressed. >> by the way, they did report -- we're going to bring you those numbers in just a second but the thing i would ask about is what the role of john foley is going to be going forward clearly investors wanted him out, but from my read of this he plans to continue to be very involved as the executive chair. one of the reasons that barry it appears was selected was frankly because of how well he's worked with former or current even founders reid hastings at netflix, daniel eck at spotify and barry my understanding is he's going to be moving from california to new york most people don't move themselves if that is a short-term strategy. >> oh, yeah. i don't think he does.

to your question john foley is still going to be a force inside this company he is one of the largest shareholders he has super voting rights as do many tech founders, and so nothing is going to move around peloton without his approval but i do think that, you know, his sense probably -- his legacy here if he still wants to shepherd that forward, and i think if you were going to put the simple odds on this, odds are they remain a stand alone company. i agree with you on barry's move i think it's more than window dressing around a notion and at the core this company has been punished, and they've made some significant mistakes. but i think they also have a significant asset. they have about a billion a half in subscription revenue. the retention rate around that revenue is spectacular, 90% annual retention if you're curious gym memberships in the u.s. have about 50% annual retention so this company has a core

asset. they've got a growth trajectory problem and they've got an expense problem, but i think this company can rebound and kind of put it to the final point here at least in term of what barry needs to do is get the costs under control, but he also needs to get innovation moving because fitness by nature is a hit driven if we probably remanence noir not the same things we're doing today so i think for peloton to be a leader long-term they need to stabilize near term. but long-term they need to continue to create product innovation and new devices and work outs when you think about peloton in the years to come you may be thinking about a totally different work out that is a real asset in is my opinion worth much more than $10 billion its current valuation. part of the reason the stock was down this morning is what you were saying about this not being the take over target people were thinking, okay, thursday not going to be a premium paid

if it's not being sold off immediately that influences the stock coming down. about the 90% retention, that's great but those were 90% retention numbers when gyms weren't open would you be concerned if the retention numbers fell as people kind of get back to life as normal and by the way, if they were raising prices at the same time. >> that would be a big concern if the retention did fall previous to the pandemic it was about 88% retention, so it did improve but, you know, even in 2018 it still had some impressive retention, a much smaller base the base was about a quarter the size so we didn't have as big of a sample there >> what's more important retention or raising rates and if you raise rates and you don't keep the retention, then what do you say? >> you need to do both and if i zero in on who their customer base is, they tend to be more affluent they tend to value convenience as a big part of it. it's currently running around

$50 a month, and so i think they can really walk that line. it does come at the cost when you raise prices -- it does come at the cost of growth, and i kind of see this long-term they were in a hypergrowth phase. i think this is probably a 5% to 10% annual grower and a opportunity to raise prices. i think it's a much bigger comfort than $10 billion >> while we have you here we always talk about facebook, obviously parent company meta. that stock has not moved in fact, it's moved marginally lower. i think there was a view maybe it would move in the right direction. do you have a view on that does gnat have any impact for you? >> it doesn't. we're investors in meta. what a disappointing last few weeks this has been. and ultimately we're staying the course in part when you look at the

news and what's happening in europe those two come at a time when the company is tainted in a negative view understandably given their guidance i think if you really parse what's going on his departure is about him wanting to play a bigger role in politics and commentary what's happening with joe rogan and spotify and content more broadly and how these platforms need to play middle of the road, and peter teal is not one to play middle of the road. so chalk that up as personal differences not something core to meta. what's happening in europe is different. this is the second time they've threatened basically to exit europe instagram and facebook and it may seem like just a veiled threat like is meta actually going to exit europe? it seems absurd, but when you think about all the things that have been -- that facebook has been through and think about zuckerberg, he is a shrewd operator, and i wouldn't past

him to pause the service for a week and the reason is that i think it would really punctuate that this is not a one-sided conversation it's not just that tech is reaping benefits from these other countries. the people, the small businesses i think they actually do geta business from it and if they did pause the service i think that lawmakers would hear about and so i actually welcome -- i think it's a lower probability, but i doeng it's out of the realm they actually flex that muscle in europe either way it's a messy one. >> yep gene munster suggesting a reverse boycott. haven't heard that in a while. when we come back an exclusive interview with one of the top executives in the video game industry. joining us to break down his company's first quarter results. in a world moving toward all electric cars why is toyota

betting big on hybrids rtamics ar from the company' noh eran sales chief after this stay tuned you're watching "squawk box," and this is cnbc ♪ music ♪ ♪ dream, dream when you're feeling blue ♪ ♪ dream, dream that's the thing to do ♪ ♪ music ♪ when you see value in all directions, you add value in all directions. accenture. let there be change.

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sales, and it's u.s. plans this year include a big year on hybrids. phil, good morning >> good morning, becky let's bring in bob carter joining us from the toyota headquarters in plano, texas bob, let's start first off with your outlook for 2021. hybrids, one in four vehicles you sold last year was for hybrids. what's your expectation for this career >> our hybrid demand is going to continue to grow this year as you pointed out last year it was about 26% of our volume. we're seeing that go up to over 30% provided that we have the supply chain disruptions settled by the 2/2 of this year. >> is the supply chain is it improving? because when we talk to other auto makers they say yes it is

improving. >> what we're seeing is improvement throughout the supply chain both in terms of microchips as well as -- as well as covid shutdowns across the supply chain we believe the demand will remain strong this year. we're forecasting a 16.5 million auto motive industry for the u.s. and that will come on a little bit later in the q2 of this year when we start seeing stuability boosts to the supply chain across the entire industry >> bob, how much do you expect with hybrids that the demand there is being driven by higher gas prices, or is that a short-term phenomenon, that you look at it and say it may bring a few more people into that market but generally speaking the hybrid buyer is the hybrid buyer. >> well, we're seeing that change rapidly, and hybrid is

becoming a mainstream power train for many of our models we have currently today 18 different models in our line-up that have hybrid power trains. and the reason they're so popular is because they fit the needs of so many customers i'll give you an example, a hybrid i'm driefing today is a plug in hybrid it delivers 40 miles of ev range which gets me through my daily commute. but then if i need to go a long distance it switches over to a very fuel efficient four cylinder engine. so it's the best of both worlds. what we're still seeing today is many consumers that are in the battery electric -- full battery electric market still need a second car to fit their family's needs. so the demand for hybrid has been strong. we expect it to continue to grow as the entire industry transitions over to electric later in this decade >> and yet at the same time you

have your first electric model, the bz 4x coming out a little bit later this year. still on schedule for that vehicle to go on sale here and what's your execation for the first year of sales here in the u.s. >> well, it'll be a slow ramp up as we -- as we enter this new manufacturing world of battery electrics. but as you point pointed out, phil, we right now have about 62% market share of the hybrid market we have about 40% to 45% market share of the plug in market. now we're entering this year with not one but two battery electric vehicles. the one sitting behind me is the toyota version, which will be out this spring. and then later -- very late this year we'll be introducing our second battery electric vehicle as a lexus called the lexus rz and that's the first of many battery electrics that are coming so we think right now the

infrastructure as well as consumer demand is at the tipping point we're going to start entering and bringing more and more of these mawales to the market >> real gik was bexar running up against a break here you finish with general motors in terms of sales this yearor do you think last year is a one off? >> well, long-term, phil, it's not sustainable. we have our plans. we have our plans and we take care of our customers, our suppliers and dealers and the results are the results. but much of that has to do with the supply chain stability, but i'm very, very optimistic we're going to have another great year in 2022 because the economy is doing extremely well and demand for our products is at all-time highs. >> bob, next time we talk hopefully i'm down there in plano with you bob carter, the head of sales for toyota north america joining us this morning exclusively on "squawk box.

andrew, i'll send it back to you. thanks, phil coming up next, disaster alert what happens if california doesn't have enough bacon? well, it's actually a possibility. jane wells, only jane wells goes onto tell us why >> what do you have for us coming up? >> the smell of live stock in the morning. i'm at the world ag expo we're looking at machinery sales and prices are up. not just machines. we're going to talk breakfast inflation when we come back and why california wants everyone to have hpyap hogs. when squawk returns.

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save your bacon. that could be the rallying cry in california if a new law stands jane wells is live at the golden state's annual world agriculture expo i don't -- and then you got to tell us how does it smell there, jane you're in -- you're in -- >> usually tulare. usually you smell the dairy farms when it's hot so i was a little surprised when i walked out this morning and it's 40 degrees and, whoa. but you get used to it after a while. i'm in the middle of the number one farm state in the country, at the expo.

i don't have to tell you everything is more expensive for the farmer, for you even when it comes to our belove bacon. bacon prices are up 24% year over year and could go up more because california has this new law called proposition 12, and for part of it it forces hog farmers to change their ways if they want to sell pork here, and those farmers are squealing all the way to the supreme court about it now, the law mandates any pork sold in california has to come from mother pigs that have 24 square feet a piece to move around and can't be confined during pregnancy the whole time. even though hog farmers say it makes them vulnerable to injury from other pigs. why not just blow california off? well, california eats 15% of the u.s. pork. we produce almost zero, so we put a lot of financial lipstick on midwest pigs. but complying with the law here could be costly.

>> short-term when prop 2 comes into place there very well could be some significant price rises in california because there's simply not enough pork being produced that's compliant with the law. in inlonger run the market will figure it out. there will be extra costs on the system and it won't be as profitable to be a pork producer >> futures have already been up because of tight supplies. a california judge has postponed enforcement for a few months because the rules in the new law are still too vague. and the u.s. supreme court will decide any day to hear the case because pork producers say it is unconstitutional for california to tell other farmers what to do >> do we know do the sows really like the bigger -- are we sure that really improves the quality of life? because i know pigs are sweet animals. people have pigs that they say they're better than dogs, so i mean i understand this to some

extent but do we know for sure this is a law definitely is worth it for the pig? >>. >> well, i haven't asked the pigs the theory being generally animals want more space. pigs tend to be social so they will end up all in a pile together but the big deal is also when they're pregnant, when they're in gestation, they're often put in crates which can be seen as cruel. hog farmers will tell you some of the times those crates are necessary to protect pigs because sometimes they can get aggressive during pregnancy. >> and the breathing exercises, it does make a big gap california never ceases to amaze and entertain. jane, thank you. >> you're welcome. >> i was thinking back to when i was pregnant try to put me in a box, wouldn't have been too happy with it either we'll be joined by take-two

interactive chairman strauss zelnick and that other big industry deal out there. stay tuned you're watching "squawk box," and this is cnbc ♪♪ what do we want delivered every month? clumping litter? salmon pate? love that for me. just choose the frequency and ship it! i feel so accomplished. now you can pet me. get fast free shipping for all your pets' needs. chewy.

chairman of video game maker take-two trading lower the company trading lower and guided to lower than expected fourth quarter revenue this was take-two's first report since announcing that deal to buy zinga for close to $13 billion. joining us now to talk about the quarter and the sudden rush of consolidation in gaming the ceo of taketwo it's good to see you let's start -- we'll do the consolidation in a second but what about the guidance for booking in the fourth quarter? what do you attribute that to? how did the street get it wrong or was it below your own previous estimate for the quarter, was it not? >> look, we had great results in the third quarter. we're up 6% year over year for

bookings we've gone up per year in net bookings, and quarter to quarter that's to be expected as our schedule changes a bit, but we're incredibly excited about outperforming our guidance and the street year over year. >> if we were to just try to explain to people watching what is it that goes into the quarterly bookings that can influence it one way or another, is it timing for new games what is it that can move the needle one way or another, strauss, in general? >> certainly timing for new games would matter and also expected performance performance is very strong across the board we're not a quarter to quarter company. we manage the company from year to year, and we will move around when it's necessary to make sure to deliver a highly pall ygsed, very high quality release. we have great releases coming for the fourth quarter

that has a score and we're incredibly excited and of course wwe is coming, grand theft thoughto so the quarter is very strong, year is very strong. we're generating over $400 million free unrestricted cash flow for the year. >> why do you think at this point that the consolidation, which really ramped up even maybe you kicked it off to some extent, but that's a huge deal why do you say it doesn't change the landscape for you? >> two minutes ago there were pretty big ones. we were a pretty distant third with the zinga compbination and the sale of activation of microsoft to become a close number two we think that's a powerful competitive landscape, and we're excite today be in that

position in the entertainment business you compete with everyone and compete with yourself because people don't need our products, they want our products and if we put out the best properties in our business, and that's our goal, when we achieve that, people show up and whether we have ten big competitors or one really doesn't matter we still have to deliver >> well, everybody i guess now is in play and you at $20 billion as far as a market cap you'd seem like you'd be a great addition for someone. are there any -- don't you expect to be approached? >> look we don't have any expectations we're here for the shareholders. the market cap was $700 million, and our average revenue was for $700 million and we were losing a bunch of money

and we expect to close the first fiscal quarter of this year and next year. and we're incredibly excited about that that makes us a substantial enterprise, and certainly we're able to compete veryively. >> strauss, regulators are certainly taking a look at the microsoft activation deal. you say it's an area you'd like to compete in. you think your odds are good when you're a close number two >> look, i'm not an expert but the business is still very fragmented it's a very open market. it's a very competitive market microsoft is a great and we're thrilled to be in business with them and we're completely convinced

our business relationship with them will only be enhanced over time >> strauss, to that point -- clearly is looking at these transactions in a different way and i think i'd ask you specifically microsoft trying to build tself as a platform with almost its app store-ish kind of situation. how do you think that plays itself out over time in terms of these more gated communities >> it's a good question. they definitely do see themselves as a platform, but i think they see themselves as an open platform and encouraging and i fully expect all of our properties will be represented on microsoft platforms and so i think their path forward

requires them to own property. equally, i don't think it concerns us. >> can you make the case for how nfts totally changed the game for gamers because a lot of people think it's crazy to buy even if there's a limited number of, you know, take your pick or whatever they are with all the little tokens and things that go with gaming, this would be a way of creating really a secondary market for awards and, you know, it could really be the game -- no pun intended -- it could be the game changer for really embuing nfts with some inherent deegs i don't know if it's inherent value, but more value than most people think they have right now. >> well, right now anything that's going on in web 3.0 is clouded by the overlay of speculation. and all speculation comes to an

end and to a good way and not so good way when that changes and will change and it's not a question of weather but a question of when, are nfts meaningful to our business, the notion that you would have a guarantee or a singilarity that's reflected in an nft and there are other technical ways to do that as well makes sense to us there are exchanges for digital goods before inside video games. we have to be sure everything we do appeals to consumers. so we're not excited in engaging in speculation but very excited in doing anything we think consumers will value

if so we expect to be there. and you'll see us experimenting in the space >> so you would argue take-two is like one of the leading currently already one of the leading companies in the meta verse, or are you the leader >> if you define the metaverse as everything real becomes ephemeral and everything -- if you define one form of the metaverse as highly engaging digital worlds where you can go and tell stories, play basketball, ride bikes, do yoga, engage in action and adventures, connect with other people, talk to people, have meetings with other people, well, we own three of those worlds. and we generate millions of

dollars a year in the metaverse. i don't believe the expression of the meta verse would be one singular area owned by one singular company other than the internet is one single company we'll also meet needs of health care and military applications and in many other ways >> okay. and you've written a book about -- i don't know about, you know, remaining youthful obviously it's on my nightstand. i live by it >> i know. >> i'm a living, walking example of what can be done if you follow these -- 60 is the new what, strauss, 40, would you say? >> it all depends how you live >> what are you 63 don't answer that. >> i'm 64. i'm six months away from low priced movie tickets

>> are you doing blood transfusions with teenagers? are you meditating, drinking a lot of red wine? what is it what's the current secret? exercise probably doesn't hurt >> i don't drink any wine. and i just came from the gym where i train teenagers so maybe that helps >> all right they told me to rap but i said i can't rap until i get to the youth question and a really good rinse. what's a rinse people think i use a rinse what is a rinse? >> i do not use tarinse and i would own up to it if i did. >> so would i. so would i and i hate it when people say it's obvious because it's not. thank you, strauss see you later. >> thanks for having me. >> keeping the speculation alive, i love it when we come back an update from peloton on this big executive change news.

and which hedge fund investors got hit the hardest in january and which ones posted profits amid all that market volatility? we've got the new numbers that will keep you up-to-date stay tuned you're watching "squawk box" and this is cnbc 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. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ♪♪ care. it has the power to change the way we see things.

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breaking news this morning from peloton and a lot of it it's about the company's ceo stepping down, sort of the company cutting jobs, slashing its revenue forecast, sliding out some early earnings or lack thereof. diane oleck has been listening to the earnings call and joins us with the latest on this >> rebecca, john foley now former ceo started the call with three simple words, i love peloton. he said i love what we've done for connected fitness and delivering on our vision to a loyal following. but then he got right to it. he said we have made missteps along the way. we scaled our operations too rapidly. we own this, i own this and we are holding ourselves accountable. that starts today. he talked about incoming ceo and president barry mccarthy as a

long time and passionate peloton member he said i'll be partnering closely with him and working to deliver on the value inherent to peloton. he said that he expects a meaningful reduction in teams across all of operations that means lots of job cuts that have already been reported we know they're looking to cut about 20% of their fall work force. he said this was a very difficult decision for our management team, but it is a necessary one for our company. he said he'll be building margin into hardware and reducing owned and operated networks, winding down development of peloton output park, the midwest facility where he was very intent on doing all production in the u.s that was the first bit of trouble they started to have he said we believe our third party manufacturing partners can support our growth and then finally he said member experience will not change, and i think that's important to a lot of the viewers out there wondering about the star-studded system of peloton trainers out there who have their own

businesses as well and what will happen to them he said we'll invest in our platforms through innovations, we remain committed to the increasing accessibility and he finished by saying this is a very humbling time >> whenever he's saying it's working to some extent the stock is slightly higher no. there was a slew of releases it's taking people teem to get through and figure out what it means. >> yeah. i think there was disappointment at first there was all that building up they would be bought by the likes of an apple or amazon so maybe they were concerned, but now that they have a new system in place, it seems with this new ceo, there will not be a sale imminently since he's moving to new york from california that maybe be helping to boost of stock a bit by saying they'll be investing more in the company. >> diana, thank you. meantime, we are finding out how hedge funds have been faring

in the bubble. we want to go to leslie picker, who joins us with new numbers. >> stock picking hedge funds closed out the month of january in the red, but on average long-term funds declined less. within this strategy, fund managers posted divergent returns, energy funds were the only ones in the green and barely, while activist investors and technology-focused firms each lost around 8%. melvin capital and more facing declines, thanks in part to the tech sell-off. activists were also in the red last month the standout performers among hedge funds were macro funds who were positioned for inflationary pressures.

posting average gains of more than 5.5%. bridgewater's facto fund had the -- now, we're starting to piece together some clues on how hedge funds were actually trading the volatility as well during january they've been piling into short sells. the firm's counter-party short sales were outpacing long buys 1.7 to 1 fund managers have been buying into u.s. tech companies, especially in software, while aggressively shorting u.s. financials, so kind of a reverse of the trade we saw earlier in the year guys >> i daresay, exact opposite is there anything -- >> mirror trades. >> is there anything that's a non-exact opposite >> it's a very binary market these days >> thanksings, leslie. up next, what to watch when the opening bell rings on wall street, coming up in just at a

little more than half hour stay tuned you're watching "squawk box" on cnbc

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the futures are mixed this morning. the dow is indicated up about 68 points, s&p futures are down by about five, nasdaq down by about 40 points. interest rates have ticked up with the ten-year getting closer

1.9%, ever so close. anastacia and prym, prettia, why don't we start with you, first what are you telling investors at this point? >> we're telling investors that the bond market globally, and this is a global rate, as -- the fact that global interest rates australia ten-year moved significantly last night i think that's having an impact. really the market is the balance sheet as well as rate hikes. in our view rate hikes are very well priced into the treasury bill it's not fully priced so we're looking for the ten-year to

continue to head higher past the psychological mark that's all it is we think it's likely to get to 2.25, 2.5, so there's still more room for the rates to rise it's the speed of that rise. that's what the market is looking for. i think there's more room for interest rates to continue to rise in the long end. >> anastacia, what about the equity markets we have cpi on thursday. >> i definitely agree with prya, but i think the equity markets are starting to look past the first fed rate increase, i think the inevitable picture is if the fed is trying to tackle inflation, which they finally are and woefully behind the curve doing it, they have to slow down the demand

they can't make more semiconductor chips, but what they can do is slow down the demand by hiking the interest rate if you already look at the manufacturing pmi, we have seen it peak and slow down. we've seen housing lose a bit of steam. retail sales have been a bit sluggish the last couple months. so i thigh theory focusing on what's next, and that will be a gradual slowdown and cyclical parts of the country you mentioned the segment before this, that you saw the hedge fund rotating out of some of the financials, and back to the software stocks. i think that's going to be the right move for the duration of the year, because we're going to likely have some steam come out of the cyclicals and value that everybody has piled in i would rather by buying things that have been on sale recently. >> the cpi number coming out,

people are looking north of 7% is there anything that could shock the bond market? >> i think given these effects, the number in the seven range is almost a done deal it's really the month-over-month change we'll be watching you get a five-month increase or higher, i think the stock -- we don't think the fed wants to start with 50, because then it reinforces the idea they're behind of curve, they have to go significantly faster, really slow down growth so it's the monthly change i would be watching other is is it the range component, the shelter component, is that starting to pick up? the other issue is more trending if that's rising, i think the market will extrapolate, that it's going to accelerate from here, again resulting in the

fed. >> thank you both for your time this morning good to see you. in the meantime, very quickly take a look at the futures. dow is picking up some team. it's now indicated up by about 81 points. we will all be back here tomorrow -- joe, will you be back here? >> no, but i'll have a camera with me. >> tmi good luck, joe time for "squawk on the street." dow futures holding some gains despite the ten-year just four basis points. oil backing off big news today earnings from pfizer, harley, dupont peloton is slashing the outlook,