next two hours. stock trading ban for lawmakers looking more likely after nancy pelosi dropped opposition. and peloton all-hands meeting cut short yesterday after the video conference chat section was flooded with comments from recently laid off employees. it is thursday, february 10th, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm rebecca quick along with joe kernen and andrew ross sorkin. check this out the dow futures are higher up 50 points s&p futures down 6.5 the nasdaq off 43. the house of mouse is helping

disney the earnings out last night and stock up sharply disney accounts for 75 points of gain in the dow. without disney, you are looking at negative futures for the dow. we'll talk about disney in a moment check out treasury yields. you will see right now the ten-year note yielding 1.9376% we get the all important inflation number cpi coming out at 8:30 we say all eyes watching this. a lot of eyes watching this number this is the one that people are really trying to figure out what to expect. we know it will be a hot number. expectations are north of 7% the white house said they are expecting hot numbers. they expected bad numbers last week we will see if there is a surprise with the up side or down side. a lot of eyes on this with the fed poised with this and wti is now back below $90 for a couple of sessions and now this morning up above $91.

rbob up .70% people are watching that across the board with what you pay at the pump >> absolutely. let's tell you about shares of uber. they are not paying at the pump. the revenue beating estimates. the core business starting to bounce back after the omicron variant. the booking came in at $11.3 billion. that is up 67% airport bookings rose from the prior quarter and 200% from the same quarter a year ago. you have to think about what a year ago looked like delivery business brought in $13.4 billion. we should bring in a programming note tomorrow is the first on cnbc interview with the ceo of uber dara khosrowshahi in the 7:00 hour joe. >> $1.53

the company reporting on the adjusted basis for pepsi. organic revenue up 12%. 9.5% for the full year 12% in the fourth quarter. $25.2 billion in the fourth quarter versus consensus of 24.2 that's not bad core earnings up 13% growth profit margin increased 10%. looking for comment on input costs and inflation. >> it is the organic revenue growth is 5 percentage points of volume growth and 7 percentage up price and mix they were able to raise prices that is the tale of the earnings season which companies are passing on higher input costs

pepsi is at this point >> you get your bag? >> i did i didn't eat anything. >> what? >> super bowl sunday, man. >> it will last. i had a day of fasting can you believe it >> welcome back. how do you feel? >> i feel good once again, are they prok proctologists? >> yes. >> i ask if they do that all day long they see a lot of stuff. he said one of the most exquisite colons he had ever seen it was exquisite i had never seen one -- i said thank you. thanks, doc. that was waiting for me after it was all done and free to eat again. >> fill back up. >> was that a good idea to go to the doritos that were so hot

>> you tell me >> you didn't try anything you tried zero >> no. andrew how about you? >> i don't have any special food i don't have any special food. >> it's probably here waiting for you. >> maybe we will have hugh johnston joining us at 7:00 to talk about it it still holds true. salty snacks and sodas i get it not everyone -- coca-cola went a different route. pepsi. a lot of people think that business model really has been effective. obviously during the pandemic, i don't know if i call it a pandemic play, but if you are home, it is nice to have salty snacks. >> looking through this. for 2022, they expect to deliver 6% organic revenue growth and 8

percent growth and share repurchase program of $1.5 billion the stock up 1.5%. then check out disney. we mentioned this at the top disney shares are higher this morning. that alone is helping the dow futures. disney shares up 7.6% after the company came in with earnings of $106 a share the street was looking for 63 cents. revenue beating and subs subscriptions ahead of estimates. the ceo bob chapek says they bidding on nfl sunday ticket >> we're bidding for it. we always say that if an investment is creative for the shareholders, we'll do it. the moment it is not, we'll back out. we hope it is. >> the real story for the quarter was the parks revenue. $7.2 billion that was double the total from the same quarter a year ago. disney said more people attended

theme parks. they stayed in the brand of hotels and booked cruises. my guess is they spent a lot of money at the parks i don't know if you have seen it, to get into the park for a single park ticket, the lowest tier is $103 consumers are flush. if they have the money, they will go and spend. i think this is another one of the companies that was able to post how strong the consumer is at this point. >> with how much people want to have fun and had fun cut short for a couple of years. that is cheap for a day at the park is whatthat what you say? i'm going to disneyland. that is like kleenex >> can we go back to the streaming question the streaming issue is the big one. it has an impact on what it p

portends for every media company. what i can't tell from the numbers is is it translatatranse did it come from outside of the united states? how are investors supposed to think about that and other companies that are trying to do the same thing >> i think it is back to two economies again. there is us where i'm craving content that i don't think about what it costs. not everyone can afford ten streaming services you said netflix what did they raise the price? >> $20 on the high end. >> we're lucky we're in that position i don't think we should extrapolate that everyone can just have every streaming service. >> that's what i've been saying. i think there is a top on all of this in terms of what people will pay you are seeing the churn in the u.s. here we are seeing the growth. what you are seeing in the headlines is people are

suggesting look at disney. they out performed netflix didn't i wonder if you are running any of the companies today or in investor, how much do you take away from disney >> i don't know how you can take away without more information. you are right. they are giving it for lower nar be margin international disney has content that translates international, too. it may be difficult for other companies to do that you are right. i don't know how much you can take away. we don't know the profit numbers. it will be a while >> it is supported models that are cheaper or free may become -- you can get it there is the content you want to see it watch a minute they put the thing up there so you can see how long you are in for on the commercial. the totally ad supported network

tv abused us they do four minutes at a time sometimes. you can leave and go to the store and come back and you barely make it before they come back from commercial the short ones i like it. it let'ss my mind relax. >> it lets you look down at your other screen. >> a minute to a minute and a half is fine >> guess what? we have a two and a half minute break. that is longer. >> content is this good. >> three and a half minutes coming at you right now. >> i just said that? >> set your clocks look at your second screen run to the bathroom. get your cup of coffee come back. go get your coffee come back. when you do, we'll talk to former fed vice chair roger ferguson he joins us next to talking fl inflation and the fed's next

move. and nancy pelosi dropping her opposition for stock trading ban for lawmakers. we will talk about what it means. you are watching "squawk box" and this is cnbc 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

labor shortages and rising cost and omicron variant took a tool on business leaders conf confidence

the latest report shows confidence among ceos fell for the third straight quarter in the first quarter of 2022. for details on the survey and more, we are joined by roger ferguson fellow on the council of foreign relations. former vice chairman of the federal reserve. he is a cnbc contributor roger, this is really interesting to see that ceo confidence is dropping overall it is surprising when you see how strong the economy is at this point what happened? >> you are right it is surprising i could argue this is the third survey and results have been down slightly. let me emphasize it is 57 which is still positive territory. they are expecting growth still. this is telling us the challenges continue to remain from the ceo standpoint. this was fielded a couple of wee

weeks ago. omicron was still on people's minds. and there is an expectation that interest rates will go up. the cost of money will be rising i think this is saying it is a challenging time for ceos right now. >> you pointed out this was taken a few weeks ago when omicron was hotter if you were to retake that survey today, do you think people might feel a little bit better we are talking about dropping mask mandates and people going back to the office does that change the outlook >> i think so, but only slightly if this was reported yesterday or done yesterday, you would see the same general trends. the changes are moderately better, but it is moderate importantly, the expectations of the future conditions come down a little bit i think this is really an accumulation of many quarters of stresses and strains all of us

felt, including the folks at this level. >> we are looking for the other number today one thing i thought was interesting in the data. when you asked ceos about what they thought overall, they were more pessimistic when they were asked about their industry they are optimistic when they talk about what they are actually seeing. i wonder if that means they are susceptible to the rest of us with the bad headlines out there. >> i think that is true. in your industry, you know the levers to pull and the dynamics in the industry which you have worked in some cases decades it may be for ceos a little to understand how to move in their industry or other sectors where they don't have the same visibility some of it may be familiarity breeds a certain degree of comfort so to speak. >> roger, yesterday, we spoke to

the representative from the fed. he is looking at the inflation picture as the markets are set up at this point it is high right now, but not anticipating getting out of control and thinking the inflation picture will get better for the end of the year what do you think putting your fed hat on >> i want to put two hats on the ceo survey indicated many ceos expect the inflation will continue for the year. maybe not get worse, but when we asked them, they said effectively about 75%, the fed increasing rates probably won't have the impact on inflation as his ttorically has been the cas. having said that, i do think we have seen the worst behind us. it is not over yet i do expect it to come down and i think how quickly it will come down to the fed desire in the 2% range and how much tightening is

called for to make that happen those are both unknowns. >> do you think the fed is behind the curve will it take more rate hikes to slowinflation and as a result, do you think the market has gotten it wrong to this point? >> i think the fed is probably a little behind the curve. not dramatically so. i don't expect them to feel pressed to do anything potentially to risk the economy. it is a tight maneuver to do at this stage to engineer what we call a soft landing given where inflation starts and the uncertainty of the dynamics for inflation. some of this has to do with tight labor markets in the survey the ceos said maybe 3% or more which is relatively high number. they are also focusing on supply chain issues it takes time for that to unr unravel. the challenge for the fed is the

factors influencing inflation, some of them may be well in their control and driven by the price of lending some may be outside of their control. i think that's a tricky maneuver for them right now >> as a former fed official, is that the key number of the survey expectations to increase pay this year? you would be looking at that >> i think it is that's the reason that we decided to ask the question. the other number that i found interesting was the ceo expectation and how quickly they can pass through the price increases and most of them said during the year, within six months, and becky, the reason i wanted to ask that question is it tells us about something called inflation expectation the ceo states that they can relatively pass through inflation pressures they he are feeling. that says there are inflation expectations and customers and

consumers and counter parties are expecting companies to say guess what our input costs have gone up and we have to raise our prices to you. i think there is a beginning of the survey showing us a little bit of inkling of expectation built in as well. >> that becomes a self fulfills prophecy >> yes counterparts will ask for price hikes. it is more difficult to bring it under control. that's the risk. >> roger, it is always great to see you. especially right now given everything we're facing. hope to have you back again soon to give us more analysis of what is happening with inflation and what businesses are thinking and ceos are thinking. thanks for your time >> i would love to come back, becky. thank you. >> see you soon. before we go to break. we kidded around yesterday since we spent so much advice on this show, get that done if you

are 55 it is a breeze the easiest thing in the world it is. it is so good to know. it is good to know one of the things you can do and take that -- everything else can go wrong get that done. and rutgers, rutgers, rutgers. ohio state they scored the last ten points. >> they pulled it out. >> purdue last time. >> michigan state last time. purdue before that >> you're in. >> if you don't go to the big dance -- >> you worked your way back into the big dance. >> darius paying off on a bet. michigan state and rutgers he paid off. he has something here today. good on him for paying off on a bet. unlike some others >> amazing i'm ready to payoff. i don't know

do i have to go with austin somewhere? >> yes coming up, a rough start i blocked him on twitter for misinformation he is so -- you know, i'm allowed to do that misinformation a rough start for peloton's ceo after his all-hands meeting was crashed bylaid off employees we'll coming right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. what happens when we welcome change? we can transform our workforce overnight out of convenience, or necessity. we can explore uncharted waters, and not only make new discoveries,

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mccarthy has his work cut out for him. the all-hands meeting yesterday was meant to introduce the ceo to employees, but the conversation went south quick between mccarthy and the former ceo. it was disrupted by former and current and recently laid off employees. cnbc obtained messages sent through the chat function of the conference that said and this is a quote. i'm selling all my peloton apparel to pay my bills. this is awfully tone deaf. to the end of the conversation, mccarthy asked if employees who were laid off had gained access to the chat. he replied no comment. you can read more about the peloton meeting right now at cnbc.com interesting story. february 16th next week. charlie munger is set to hold

court at the journal he will answer shareholder questions virtually starting at 1:00 p.m you can submit yours today by sending an email to dailyjournal questions@cnbc.com get your questions in now. coming up, i'm looking forward to that. he is fabulous i'm glad are you doing that. when we come back, a huge line of executives will give us the pulse of the economy including the cfo of pepsi and the ceo of duke and ceo of mattel and cfo of twitter. and february is kbblack history month. here is cnbc contributor talking about what needs to be done to empower the black community financially. >> how can our country help empower the black community financially? that literally is the 1 trillion

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good morning welcome back to "squawk box" here on cnbc the dow looks like it will wopen higher the s&p is off 7 points. we will talk about the bills that will be preventing legislators from buying stocks first, check this out. it turns out they are good investors. according to data by capitol trades, the spouses and dependents are loading up on ten stocks including microsoft and alphabet and energy stocks.

and of the purchases of the congressional members and families, more than half topped the s&p return of 22.2%. the lawmakers traded $355 million in stocks in 2021. >> andrew, that is interesting if you look at the stocks. all of the tech stocks they have been buying. does that tell you tech regulation is not high on their priority list? that surprises me. >> it raises the question if they anticipate ever regulating them this is what we talk about all the time i don't know >> immediately raises that question you couldn't help yourself if you knew your best performers and the action you would take would impact their business? you couldn't help but have that in the back of your mind it has to be -- i think we will have mulvaney on >> you need to have a blind trust or own index funds

if you own a bunch -- i understand not wanting people to not take the jobs and do it. a blind trust solves for all of that >> here's the issue. the reason why the newest bill that elizabeth warren doesn't include a blind trust is because there is the question of get into congress or senate and you say i'll put in a blind trust. there are two issues one is, now just because it is in a blind trust, you know the assets and is it an arm's length blind trust? it is still a slippery slope. >> arms length blind trust if dependent children are trading with your money? >> what you have to do to make the blind trust work is you have to sell all of the assets in the blind trust or at day one when you get into congress and the

blind trust can do whatever it wants after that the issue is people pay taxes. some people will not sell at once and ask for permission to do what members of the administration can do which is tax-free into treasuries it gets complicated quickly. we should. we have to figure out how. >> it is nice to participate i the american dream, if you will, and be able to find -- people don't make a lot of money in congress i say that and i think some of these people have four or five houses and have been in politics since they were in their 20s i don't know how that happened i know president obama knocked down magnum p.i.'s house and putting up a wall around the hawaii estate. i don't know if it is as nice as martha's vineyard estate they seem to do okay one way or the other. hook or crook.

not crook. joining us to discuss this two former members of congress democrat donna edwards an nbc news political analyst. she is running for her old seat. if you do that after you leave office, that's fine. and former white house chief of staff is mick mulvaney the co-chair of acting consulting mick, you put things at an arms length in a blind trust? that needs to be done? >> it was a really blind trust hello, donna, good luck in your race i was in congress before i was in the white house we were good to hold anything. i did not hold equity. once you got to the administration and in the cabinet and learning about the guy that runs the science and technology place when you are in a cabinet level, you are required to diffivest

one thing nancy pelosi talks about the proposed bill moving forward, it should apply to all branches of government you have a problem with the fed and judges all over the country. it will be complicated to put in place. it bears looking at closely. >> this is, congresswoman, this is bipartisan at least >> i think that's true look, i'm a little out of my league i think when the ratings came out, i was always the least wealthy member of congress i do think that for appearances sake, we want to make sure the public has confidence we are doing public service in a way that is not influencing our pocketbooks. i think this doesn't mostly apply to most members of congress it is probably prudent to establish some rules i heard that discussion about an arms length kind of blind trust or other rules that have

thresholds for the amount of investment one can have in individual stocks. i think there are ways to put in place some guardrails. i think you go a long way when you start applying this to extended family members. especially spouses what happens when you marry a person who is an investment broker does he or show need to divest everything we need to be careful and not apply a rule because it affects a handful of people or 20 members of congress and then apply that across all branches of government. >> mick, there's spouses and offspring. your children and there are things that may not be publicly traded that you can do i don't know we have seen good examples of that shouldn't it be the spirit of the law? people know what is right and

what is wrong. you will never get in the letter of the law to get it to cover all aspects of conflicts i don't think we can count on poll iticians to act on the spii of the law. >> you can, but you will never legislate everything certainly not legislate morality keep in mind, insider trading has been illegal since before the stock act before the "60 minutes" piece on nancy pelosi the next monday after the show ran accusing her of insider trading, we got a memo that said insider trading is against the law. that was before the stock act. a lot of this is window dressing you get into the good details. it sounds easy to do and it is not. what about cryptocurrency? i have been on the show talking about cryptocurrency for ten years. it was $200 a coin when i started this i didn't buy any, but i could have crypto is not addressed in one of the proposed bills or in

warren's bill. this is great. people love it they love to pat them seems on the back and say we're doing something right. will it change activity at the end of the day probably not the folks who will break the law will figure out how to break th law. insider trading continues to be against the law. you are looking at mutual funds. it will pass it should pass we will make the best of it. >> congress member, i think something is coming. will it be watered down or window dressing, i guess, as mick said? it is already illegal. can you make it more illegal >> i don't want to be a keskept. i think people who go into public service do it for the right reasons and boeehave appropriately. let's not misunderstand the

circumstance elected officials don't have a conflict i think it is possible mick said you can't guard against every single behavior. those who are breaking the law will get found out that is appropriate. most members of congress are not breaking the law and maybe we just need guardrails in place to make sure that the public has confidence that politicians are acting appropriately by the way, i'm a candidatefor congress, but not now a paid contributor to nbc i want to make that clear as well no conflicts >> i'll tweet about that that answers that question, congress member. thank you for disclosing that. >> you know, we talk about, joe, the obamas then you talk about credibility in the marketplace and in washington i think, mick, you'll agree with

me president trump made $1.6 billion while president and there were questions perhaps the entire time about this joe, i hope you will agree that it raised questions in the public's eye about what was going on in the white house in front of everybody in the most remarkable way we have seen in history. >> trump went in a billionaire these other people went in with no net worth whatsoever. they come out billionaires you think trump's business has been helped by his presidency? you think trump people like? >> no? no do i think more people stayed at the trump hotels in washington at the time? mick is an honest guy. mick, you will agree, there were questions raised fairly about what was going on while trump was in office in terms of this issue, no? >> certainly they were raised.

i think the law is different as to the president and i think that might be constitutional i think i'm getting out of my legal denpth. it has been a long time since i practiced law. the president and vice president are different. to donna's point soon orrer later, they have to c the public this is good to take a look at across government. did trump make more money at the hotel if he wasn't president sure did he lose money some place else yeah did he give all his salary away while in office? yeah did he have billions going on? yeah it is complicated when you have folks who are extraordinarily wealthy. i think donna made a good point. these are the exceptions, not the rules. we have to tailor a rule that doesn't throw out the good with the bad. congress, and i know i'll say

something not popular. congress hasn't raised since 2008 only citizens in the country not allowed to participate in a employersponsored health care program. they have to go on the obamacare exchange as we continue to make it harder to run for congress, especially with inflation eating away at the salary, will we look to folks who need the money and salary or people who are super rich that is a good discussion for another day. we are making it harder and harder for good people to run for congress >> all right thank you, mick. congress member. a lot of people go in for public service. those who can do or can't, maybe a good idea to run for office and come out and live well thank you. when we come back, we have a rundown of the morning's big movers, including the shares of mattel we will dig through the numbers. mattel up 11% this morning

we will talk to the mattel ceo ynon kreiz that's in the 8:00 hour. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

shares of mattel are sharply

higher this morning. we showed you the stock. mattel shares up 8%. that added to the drop in hot wheels with barbie sales up 10%. the 14% sales up in north america with barbie and building sets mattel's ceo says the company's turn around phase is now over and now they are in growth mode. the street is hearing the message loud and clear up $2.50 this morning. ynon kreiz will join us in the 8:00 hour. thank you, becky when we come back, what part of the company disney's ceo bob chapek has the beast to feed shares jumping sharply we'll talk about it next

it's a hungry beast to feed, the direct to consumer platforms, but our consumers really love it, and it's a good investment for us and a good investment for our shareholders. >> that was bob chapicec yesterday talking about direct to consumer after a strong earnings report. these are great earnings in so many ways but i think we're trying to extrapolate. a, what does this mean for disney but what does this mean more broadly for the media space? >> good morning, andrew. clearly it's a good comeback covid quarter for tem, some good news here, but i wouldn't say any game changers either for them or for the industry got to tip the hat to them on parts particularly on international travelers yet and

really give them good marks on better disclosures on the subs but since so much of disney trades on those headline subnumbers, let's go into that a little more. good that they had 11 million subs for the quarter that were not mostly the cheap india hot star subs. that's good news good for the year they were up 35 million subs to netflix 18 for the year but you take out all those hot star india cheat subs and they're about the same place as netflix for the year good that espn was up 9 million subs for the year with not a lot of product there all that's good news look under the hood and the story is not so good and about where i think people thought it was relative to looking at the netflix situation. if you take out from disney these three subs that they're counting from having included disney plus and espn plus in the hulu channel bundle where they

just gave those subs the disney plus for free, they only did about 4 million incremental subs for the entire year for the u.s. now, a year of pandemic, families being at home, 4 million growth of paid subs there, is not something i'd say you'd really celebrate given that they only have half the subs in the united states of netflix, i would say they should be grow at a faster pace than that in fact, if you take out the hot star subs for the quarter and these free give away subs, they really did fewer subs than netflix in terms of truly paid good margin subs for the quarter, same with hulu. hulu has got half the subs of netflix. it grew in the u.s. about the same rate netflix did over the quarter. >> what -- so it sounds like you like netflix more than you like disney when it comes to the

streaming wars >> well, netflix has a lot of advantages, but i always say, look, it's not just the headline subnumber. you've got to look below that. you've got to look at pricing. you've got to look at time spent watching the service you've got to look at the program spent, and i've got to say disney made progress on all those fronts its pricing was up 15% year over year on disney plus, 15% year over year with espn plus and indicated it was going to spend much hoar on programming obviously i think that will push out the profitability on streaming services and mauft had some interesting data about december where the combination of hulupgu plus disney plus time together reached about 71% of netflix viewing time that's some real progress, and if that holds that's some indication than greater stickiness than in the past.

>> what does this portend for a future warnermedia discovery plus are you long that acquisition? and i'd love your thoughts on the departure of jeff zucker and the future of cnn. >> i think it's about time hbo and discovery will come out strong they know what they're up against. they know what they have to do they do have some real international strength coming off discovery's distribution in so many countries i think will be a formidable asset for them but it's all a question how they're going to integrate discovery plus and hbo max the biggest issue discovery has is the one comcast is causing with the exit from hulu still not happening and needing to get hulu under 100% ownership so hulu and disney plus can come together in a single service which i think will do a lot. jeff zucker is a formidable

executive in every way and did great things throughout his news career i don't have any idea what that will mean for the future of cnn, but obviously there'll be some tra transitional upheaval there while they figure out the leader issue. >> it's a long discussion and debate tom, always great to see you thanks so much >> thanks for having me. coming up, executives weigh in on the health of the economy. up next we're going to dig through coca-cola's numbers and here from pepsico cfo hugh johnson. you're watching "squawk box" on cnbc and your customers want seamless and easy. with ibm, you can do both. your company can monitor threats across your clouds, address all those regulations, and still create all new experiences. trustworthy ai powered security. that's why so many businesses work with ibm.

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futures are trading in a narrow range ahead of today's key inflation data we're going to find out what's on the move ahead of that number and get market reaction right after the release. twitter reporting results. the numbers in just a minute plus we have pepsi cfo and duke energy ceo joining us to talk about their numbers. and states are starting to lose the mask mandate. we'll speak to connecticut governor ned lamont on his decision to lift masks in schools. the second hour of "squawk box" begins right now welcome back to "squawk box" right here on cnbc i'm andrew rosorkin along with

becky quick. dow up about 33, 34 points, nasdaq off about 45 points the s&p 500 off about 8 points let's get to twitter's results, just crossing the wires right now. adjusted earnings coming in at 33 cents a share that was 2 cents below the consensus forecast revenue was slightly below estimates as was the company's current quarter forecast another key metric, monetizable daily users came in at 217 million. the street had been looking for unt -- and the company talking about how they think they can reaccelerate growth both in the united states and internationally, talking about 25% growth when it comes to the top of the funnel, 35% in the

sign-ups, and that's pretty key, too. a lot of questions about this. you probably know cathy wood has been dumping her stocks and been selling about every week in december low mid-20s revenue, they did see mid-20s expense growth, and that does tell you there's a bit of margin compression but did tell people that would be the case in terms of expense growth and at least back in october the new ceo would be focused on margins and that's part of what they're going to be talking about here as well 4 billion share repurchase, $2 billion of that coming in the near term. the company did have about $7.5 billion of cash the beginning of the year, in part because of the sale they did with the company they sold back in october they made a billion dollars for that so that's what they're going to be doing with some of this money

they're putting to work. right now it looks like the shares are up 4.4% we've got the chief financial officer ned segal joining us a little later in the next hour here on "squawk box. beating estimates by a penny with adjusted earnings of $1.53 a share. pepsico has also had to deal with supply chain issues and inflation. joining us in a first on cnbc interview is hugh johnson, vice-chairman and chief financial officer of pepsico and should mention hugh also serves on our counsel as always good to see you thrpg. are we in a post-omicron phase yet? i guess maybe the past three months you wouldn't say post, but it appears we're getting close. what was business like with that in mind, with the waning status

of hopefully the pandemic in mind >> yeah, good morning, joe good to be with you all. i'm going to weigh in on the post-omicron thing i'm not an epidemiologist but i think in general you've seen our business perform awfully well. you saw 12% revenue growth for the quarter, which we were quite pleased with so we feel really good about the momentum we have in the business right now. as you all noted in the open, certainly there is lots of cost challenges out there supply chains are certainly still challenged to some degree, but as we look forward into 2022 our expectation is 6% revenue, 8% eps we ought to get through the year with our margins pretty much intact because with the strength of our brands and innovation we think we have pricing power to manage the cost input inflation we're facing >> all the different cross currents people stayed home and snacked obviously, but they

didn't go out and get soda drinks from maybe restaurants, so that's a plus and a minus there. there's supply chain there's inflation. there's all types of variables the last three months what we're -- was there something more important than another in term of either helping or hurting your business? >> well, i think as you saw during the course of the quarter people earlier in the quarter were getting out a bit more. obviously with the omicron variant there was a little bit more return to home, and now you see people getting back out again. one of the great strengthens of our company, though, is wherever we're going to be, we're going to have products for you if you're out on the road our convenience business is growing triskly well if you're doing more at home obviously our grocery business is doing well. and when people go back to restaurants, people are going to consume our products regardless of where they are. >> you're going to have pay more for all types of things,

ingredients, transport, logistics, all those things. are you able with your products are they that near and dear -- are people going to need to read those no matter what >> yeah, we do have a lot of pricing power. we have seen the elast tisties actually stay pretty low thus far. how that plays out over the course of the year is obviously the great question i think the thing we look at is as long as we keep investing in our brands, we keep investing in our ability to bring products to market, generally speaking especially in stressful times as we're in right now, people are looking for smiles they're looking for simple pleasures, and that's really what we bring to them. whether it's sort of tearing open a bag and having that cool ranch flaming hot dureteo as you were talking about earlier or having a simple pepsi, getting together with people at the super bowl, they're willing to

pay for our products because they're relatively inexpensive and are part of the fabric of what makes people smile every day. >> we were speaking to roger ferguson earlier just talking about ceo expect agdss specifically when they're looking at inflation and we were just talking about in some ways it can be a self-fulfilling prophecy ceos think they have to have to rise prices because they know and expect input costs are going to have to go up and as a result how much are you planning on raising prices for the rest of this year? >> yeah, so for the year we're expecting commodity inflation really about low double digits it's going to be pretty high for us you may recall, becky, we tend to buy ford on commodities anywhere between 6 and 12 months, probably averages about 9. so i understand where roger is saying people are trying to get in front of it for us it's we give ourselves pretty good price certainty by buying ahead so therefore we plan for

potentially higher inplationflation, but we react to our pricing to the facts. we have pretty good certainty on what's going to happen >> so what does that mean? how much do you plan on raising prices this year >> i think you'll see prices up single digits this year. >> super bowl is coming up, hugh i guess that makes you happy this is going to be a big one, i think. we all are ready for it. >> yeah, i think it's going to be great i know as a cincinnati native the bengals have got to be exciting for you, and obviously super bowl is a huge thing for pepsico. one of the things we've done is we've got the super bowl package in the l.a. market really just celebrating the super bowl and it's a pretty good-looking package. as well as the pepsi is going to have terrific set of artists i think it's the first time

we've ever seen five artists on stage for a super bowl half time show and we're translating it into business results we have about 125,000 displays up this week across the retail trade. >> you have a big staple obviously of products. you're always on the lookout you've got any -- where are you looking? and drinks they've got to be -- i don't know, they got to be new age? >> yeah, innovation is a funny thing. we tend to follow what the consumer wants, and we lead a little bit one of the things a big trend right now people like products with a little bit more air in them, so they're a little bit more lighter this product lays layers it's really almost a potato puff so it's very, very light, has terrific flavor to it. did you like them? >> i like it all i don't like cauliflower stuff,

and it doesn't like me have you -- answer me honestly, are some of your bags have even less stuff in them now or did you raise prices or are you doing both >> it's a little bit of both and sometimes what we'll do is we'll raise prices and put more in the bag as well >> these bags are not full these bags are not full. i've been complaining about that i think for over 50 years probably and you always say the same thing, oh, it's settling the things are settling. no, you are taking -- you are giving us less you just admitted it >> joe, sometimes the bag gets a little bit bigger, sometimes the bag gets a little bit smaller. >> sometimes you eat the bag, okay i understand these are all important considerations that obviously companies need to make, but do you see inflation

subsiding at least a little bit, food inflation >> yeah, it's a great question we planned for inflation to be high through the course of thi year that's our expectation right now, but we'll react to the facts. if in fact it does come down then we'll manage with that. if inflation stays high we're in a position we can manage our way through it as well so i think it's tough to estimate where all of these things are going to go, so our approach is to create scenarios under any set of outcomes and then we know what actions we need to take >> all right, hugh, thank you. we make the -- becky, we like the package, right we like the package. we look forward to that. i had to fast the day before, and i came home to my pepsi products, so you can imagine that just brightened by day a little bit >> joe, our whole role in our life is to bring smiles to peoples faces. i know you guys haven't tried

them yet i hope you guys try them i think you'll love them >> thanks, hugh. we'll see you later. well, we're going to talk about dow component coca-cola because they're out with quarterly earnings as well coke beating 4 cents with adjusted quarterly earnings at 5 cents per share and also expects commodity price inflation to be in the mid-single dimg utpercentage range for 2022 so you can compare and contrast >> single dimggits and hugh just told us they're anticipating high single digits i guess 6 to 8, 6 to 9% this is where you start talking about inflation and whether it's going to cool down or not. when you have companies that are already looking ottheir input costs and know they're going to have to raise prices the rest of the year to make up for what they're paid for they pay everything and buy all

their commodities early. you get into that inflationary spiral and that's the question, how you get out of it. you've got those numbers coming up, andrew, at 8:30 this morning cpi, and that will give us the latest look what's happening with inflation >> yes, as well. and there you have it, 8:30 is the time we're going to get a preview of what investors should expect futures at this hour, dow up about 45 points, nasdaq up about 22 points. s&p 500 up about 5 points. later president biden pushing his build back better program in a meeting with utility executives we've got kedu energy ceo lynn good she was there and going to join us in just a bit ine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that.

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all right, time to go over to dom chu he's been taking a look at this morning's premarket movers >>ia guys mentioned the twitter pepsico coca-cola story. you've got that late breaking news roughly 1% right now about 170 shares of volume beat on profits, beat on revenues full year outlook did fall shy of some expectations the latest company to really kind of cite the higher input costs going to hurt earnings throughout the course of the year so watch coca-cola up about 0.5%

there. and then there's the disney giant and beat estimates for earnings and revenues beat expectations as well thanks in part to a doubling of its revenue its theme parks, consumer products division disney also reported strong numbers for the disney streaming service. so those shares up about 7.5%. and next up you've got uber. shares about 5% higher, 270,000. the ride sharing company, food delivery company reports results generally better than consensus estimates. revenues to top expectation. and uber says its business is tarting to recover from the omicron variants and ride shares higher and then, by the way, those shares up 6% and then going to end on shares of mattell surging higher by

over 12% the toymaker easily topped profits for revenues and came in above estimates the mattell ceo will be here on "squawk box" in the 8:00 a.m. eastern time hour. >> i think it's some of the comments he's made at mattell just talking about how the company's structuring is over. now they're onto the growth stage. and there's been so many questions about will people continue to spend on toys like they did during the height of the pandemic when people were locked in at home and people were really willing to spend on toys it doesn't seem like the consumers let up >> and you and i both know as parents we'll spend on kids before we spend opr on ourselves. you're focusing on the revenue side of things i thought the comments made with regard to the cost side of

things were interesting as well. they think they can weather with the supply chain issues and maybe rather raising prices can help set them off. the cost side of things if mattell is confident they can navigate the supply chain issues maybe things look pretty bright for the toymaker >> that is the key question this earnings season. we'll see you a little later and another inflation report, could be ugly. report expected this morning could keep pressure on the fed to raise rates senior economics reporter steve liesman takes a look what the january cpi tells us about the economy and the outlook for rates. >> good morning, joe the main question surrounding this january consumer price index is how bad it will be. it's beginning to pick up some new factors that could be driving the cpi even higher in the months ahead inflation expected to make a new 40-year high with the year over year rate hitting 7%

there may be some temporary good news consumers might have shied away from some of those services during the recent outbreak, but that's about the end of the good news because those sectors could be about to turn around themselves my sense is that the inflation picture is getting worse as the incidence of firms raising prices is broadening you just heard it on our air here from pepsi. wages are accelerating and the likelihood of supply bottlenecks unraveling anytime soon is largely receding so the january reports should show hot food, hot car and hot housing prices along with a host of other sectors that would likely drive prices up and likely learn wages didn't keep pace with inflation.

trouble is this, wage inflation has probably not shown up much yet in the cpi there's likely more housing inflation to come. so while inflation is forecasted to decline this year, today's number could be a steppingstone to worse data before there's any improvement, joe >> all right, steve. given the expected numbers we're going to see how far is the fed behind the curve, which you've been talking about and are they really? i don't know >> so there's two ways to look at on the one hand the yields on inflation are still deeply negative, which means you take outinflation from the nominal yield and we're still in the negative territory on the other hand, the fed has not raised rates at all, hasn't taken a dime off of its balance sheet. and if you look at what's happened with things like the two-year since powell pivoted since

november on a different policy since the december meeting, the minutes came out, the two-year yield is up 84 basis points. so just their change in rhetoric, their jawboning so to speak has imparted so tightening to the economy i was talking to roger ferguson in that great interview you did in the last hour and he said not so much. and i think he's talking ability this chart here which shows the fed has indeed imparted some tightening of financial conditions to the economy without yet raising rates. >> okay, steve, we'll be waiting. we'll see you again at the appropriate -- afore mentioned time when we come back, several states are moving to end mask mandates in some public places and in schools connecticut's governor ned lamont will join us to talk about why he made that decision and what he thinks happens next. right now as we head to a break it's time for today's aflac trivia question.

what is the oldest winery in the united states? got a coupleines mut to think about this we'll have the answer when "squawk box" comes right back. this idea of making a movie about caring, it resonated with me. and not only caring, but how does that apply to someone from our community? it's about taking care of each other. she is an example of strength. ♪ ♪

welcome back to "squawk box. the answer to today's aflac trivia question, what's the oldest winery in the united states it's brotherhood winery which was founded in 1839 in washingtonville, new york, by john jeac, a cobbler okay, still tocome duke energy just out with results we're going to dig through those numbers with the company ceo next plus connecticut governor ned lamont is going to tell us why he decided to lift the school mask mandate in his state. ay tuned you're watching "squawk box" on cnbc

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welcome back to "squawk box. this morning peloton stock has lost more than three quarters of its value since the highs of last january, and new ceo has announced layoffs as he gears up for a turn around. but is peloton salvageable that is the question of the morning. what do you think, john? >> of course it's salvageable. peloton made a big mistake and

misjudged demand it's got both premium hardware products that people are willing to pay more than $1,000 each for and a premium with fitness instructors. the new ceo took a tough step toward fixing them growth stocks throwing the baby out with the bathwater, just because peloton has major problems doesn't mean it's a lost cause fortunately the company is not resting on its laurels it's got new product coming out for strength trading and there are no some no-brainer things peloton should do. instead of positioning the bike and tread as an alternative to jim membership, so peloton members get special access, so this is a setback not an implosion. >> a setback okay, those results as you know

showed real problems with the demand picture, right? >> well, andrew, on the other hand maybe it's not salvageable. fitness product and services run hot and cold, right? everybody is in the gym in january but after valentine's day it thins out exercise bikes turn to clothes hangers. that's what's happening with peloton. it seemed like the perfect solution when everyone was stuck at home. at the height of the pandemic in 2020, the fall, they dropped the price of the bike from 2250 to $1900 and in the latest quarter peloton doubled spending on sales and marketing and on rnd here's why it's really not salvableage. peloton has become a classical hardware logistics nightmare its warehousing and shipping process is too inefficient meanwhile sales are slowing and it's been dropping prices.

to fix all that it should take the painful step of trying to retool for more efficient manufacturing and delivery higher margins instead it's launching new products to boost revenue. >> at the same time they're laying off 2,800 employees and the question is is that enough >> well, andrew, here's the tough thing i remember 20 years ago there were so many of these like device companies, palm, apple, et cetera who were trying to launch product and they kept running into this similar hardware logistics nightmare where if you get the cost wrong at the beginning then it causes so many problems for so many quarters you're playing catch up. we'll have to see if that's the situation peloton is if it is, this might be even tougher than it looks. >> and where are you on a buyer? >> what do you mean? >> i don't think they want to sell, but if they did do you think -- >> oh, a buyer that makes sense

for peloton. here's how i look at it, andrew. they need somebody who's got logistics figured out and buying power. so if they were looking to sell somebody like an amazon that's already got it's own logistics operation and has so many products in its pipeline already, hardware products that they do might make sense because they can probably get better deals on some of those components they're overpaying for, and amazon could probably use a premium hardware brand apple's got one already. like do they really need that problem? i don't know >> john ford on the other hand appreciate it. good to see you. coming up president biden meeting with utility ceos at the white house. yesterday duke energy ceo lynn good was there and will join us after the break to talk about the meeting, also the company's quarterly results. and later the twitter cfo ned s segalwill join us.

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welcome back to squawk becky was just about to tell you this so i will tell you this for her. on february 16th she'd going to be talking to charlie munger he's going to answer questions of shareholders virtually. that's going to begin at 1:00 p.m. eastern time you can send an e-mail to daily journal questions at cnbc.com and she'll be combing through them and asking charlie as many as possible. i'm always looking forward to what charlie has to say and what becky is going to be getting and sorting through. exciting and i'm sure going to be fascinating wednesday mark your calender in the meantime duke energy out with fourth quarter results just a couple minutes ago. joining us now to break down the report lynn good i want to talk to you about this lynn was a among a group of utility ceos that met with president biden at the white

house yesterday about the build back better plan also at that meeting tom fanning and nick atkins and there's so many questions about the grid and where we're going here, but why don't we talk about the earnings first it looks like a very positive report >> andrew, thank you it's a pleasure to be here, and we did have a very strong 2021 finishing toward the top end of our guidance range, delivering $5.24 to our investors, and setting expectations for the future to grow at 5% to 7% over the next five years, $63 billion of capital, 80% of which will be directed toward clean energy, and we see that number growing to $130 billion over a ten year period as we pursue the transformation that our industry is under >> when you look at that break down in terms of where that cap x grows is it solar, wind, what

does that look like? >> the clean energy investment is in a couple of places of course solar energy, storage, some wind. also investment in our grid both distribution and transmission to enable the introduction of renewables we're at 10,000 megawatts of renewables today we'll be at 16,000 by 2025 and 24,000 by 2030 some of the investment is to prepare the system to take on all that renewable power o it's a great opportunity for us to deliver returns on investors but also make progress on carbon reduction. >> i wanted to talk to you about the grid we had pete buttigieg, the secretary of transportation on yesterday. of course we're talking about electric vehicleales and the like and one of the questions that keeps getting raised is whether we have the infrastructure in place to support the growth we're seeing in that space right now. do we? >> i would say the bulk power system, the distribution and

transmission system here in the u.s., andrew, is very strong and we have the ability to begin introducing and are introducing an incredible number of new resources and technologies on our system north carolina, second or third in the nation in solar capacity already. but as we look ahead we do see the need for additional investment to make the circuits more flexible, take on electric vehicles, et cetera. so there is a lot of investment to come, but we start from a strong place, and we also know how to do this, so as we think about the future of putting technologies and investments in place to keep going, it's exactly the strategic priority of duke and the industry >> can you take us thereicide the room at the white house yesterday with president biden what was his pitch like to you and did you think it was well -- well-received? >> yes, andrew, it was an honor to be there. and the discussion really centered around the clean energy task provisions and what those

could mean not only to complement the work already under way you and i are discussing in this transformation, but what it means to our customers regulated companies we have an opportunity to take advantage of these tax provisions what it does is lower the price. so you think about an industry basically transforming infrastructure to meet the needs of the future, if we can do so at lesser cost, it's a winning formula. and so the discussion centered around those provisions also touched a little bit on infrastructure because our industry is also very committed to the development of clean energy technologies that we'll need in the 30s and 40s to get to net zero. >> i want to ask you about two other things one is your solar energy plan because there have been some activists as you know who believe the plan you put in place which is a net metering plan, and i don't know if the audience totally understands what that means. you can explain -- it may be

helpful for you to do that, but there's a concern that the approach, which i believe puts a flat rate design, if you will, ultimately could be helpful in the immediate term but longer term may get less accessible over time to those who might be considered lower income, if you will >> andrew, net metering is kind of a hot topic in our industry, and it really goes to how much should a residential customer receive for the power they've put back on the grid for rooftop solar. what i would say to you is we have reached a very innovative and constructive settlement around this very issue finding the right balance between the owner of the solar and the rest of the customers on the system who are benefitting not only from solar but the grid investment they use every day. so there are solutions to this it requires some innovation, which you should expect. if you think about an industry

under transformation, some of our pricing and tariffs and methods of pricing our product also need to transform and duke has been a leader in this, in developing solutions we think mabes sense for all our customers. >> you heard the critique effectively it turns out to be less money for those putting the energy back into the grid ultimately >> i think it's an ove continuum these prices will adjust over time and as part ofthese net metering provisions there's typically a grandfathering period so customers have some certainty on that price, and certainly communication and discussion is important to make sure everyone understands the commitment, but i think we're getting to the right place, and the innovation we've delivered here in the carolinas has been very well received from a wide range of stakeholders recognizing the transformation that's under way >> and i have to ask you about this because this is something i worry about personally, maybe everybody worries about this in south carolina there was a surge on your system as you

know, and this apparently damaged a lot of peoples homes there was a power surge. and now, of course, they're coming to duke energy, your customers and saying you've got to pay up for all the stuff that was busted there was almost too much electricity that went through our home how do you think we should deal with that? >> we take our responsibilities very seriously to our customers, andrew, because they count on us 24 hoursa day every season we want the reliable power to be there, but we also want power quality meaning no surges. and so working through these issues with customers is something we're committed to it's not only residential customers but our industrial customers expect perfect power because of the impact it can have on the manufacturing operations so we remain in conversations and communications with our customers and are committed to delivering reliable, affordable and high quality -- >> but this is an interesting question by the way, i have surge protectors cl clearly would not have helped in this circumstance, but does the company take on the liability in

those instances? because that's clearly what i think is the debate now in south carolina >> i think the facts and circumstances depend in each area, andrew and our commitment is to work with our customers in a way that gets to the right answer i know i've been in many conversations with our industrial customers on the impact that power quality has on their operations and we always work to find a solution that works for our customers. >> we very much appreciate you being with us. congratulations on the earnings report it's fascinating to hear your conversations and experience at the white house yesterday. talk to you soon >> andrew, thank you coming up, connecticut governor ned lamont on lifting school mask mandates and later the ceo of toymaker mattell joins us to talk quarterly results and the consumer "squawk box" will be right back. t your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

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welcome back, everybody. connecticut joining states like new jersey and delaware in ending mask mandates in schools and other places, too. joining us right now to talk more about it is governor ned lamont of connecticut. and governor, thanks for being with us today. we have seen just in the last week or so i believe it's eight blue states that have said that they are going to be ending mask mandates now or very soon after. and there's been a lot of discussion about this, just what prompted this at this point when the cdc is still saying people should be wearing masks even if they're vaccinated >> hey, good morning, becky. yeah, we worked on this together as governors throughout the

region we thought this was a good time. we think it's a good time because our infection rates are back low hospitalizations are way down. most importantly people have the ability to keep themselves safe now. they have the ability to get the booster, wear the mask we've got n95 masks to everybody. you're going back to school we want you to get tested to prove you're safe. i think we can do this safely. >> is there frustration that the cdc didn't kind of move sooner to find an off-rampor to describe when they thought things should be changing? >> i guess they have a nationwide mandate, so we decided to act on our own, act regionally and by the same token here in the state of connecticut, i'm not saying no masks. i'm saying i'm going to leave it up to the city of new haven. i think they have the position to make the call now >> what do you think will happen i mean just based on what you've seen so far and based on what you've heard, do you think that means places of business,

schools will pretty quickly drop those mask mandates as well? >> if i had to guess, becky, i think our major metropolitan areas will keep the masks on a bit longer, they were perhaps hit harder, less likely to be vaccinated i think our small towns will be quicker to say on february 28th we're ending the mask mandate in our towns. >> this decision you all made, was it based on your expectations for where the virus is, where you expect it will be in the coming weeks? is there a level of transmission that would make you say, okay, the masks need to go back up >> well, first of all, you know, we had dropped by two-thirds, three quarters over the previous few weeks. we're not implementing this until february 28th so it give us another couple weeks or so to make sure the trends hold. there's no absolute metric though, becky, because delta you probably really worry about an infection rate lower because it's so much more lethal

it was a bad case of the flu for anybody who's vaccinated >> this is a situation it seems is pretty heated on both sides of the debate. i'm guessing the thread the teachers union has pushed back on this, they don't want the mandates dropped at this point what are the contingencies you hear from and how do you sort it all out? >> we kept our schools open not just last september but a year ago september. i have given my state speech today at the same time we're ending our mask mandate i had 500 protesters >> it's been something to behold over the last couple of years. governor, there's so many issues you are facing right now we are talking about the new cpi number, the new inflation number going to hit in just about 40 minutes time from now. it's been something private employers have moved quick leto raise rates to make sure they

can maintain their labor force in such a tight labor market, and i wonder how things are playing out there. i know connecticut has a pretty special situation where you're facing a huge number of your employees potentially retiring by this summer because july 1st there will no longer be these cost of living increases that go in i know there's a bcg report that said something like 27% of the state employees could retire by june 30th and 75% of that are leaning towards it how do you maintain that work force in this environment? >> great you did your homework. first and foremost work has got to pay and that's in the public sector, private sector 15 years ago having a job at state government, that was great. you've got this pension, you get to retire and today we've got -- we're a very different competitive environment, i think. we've got to work hard to recruit people and train people. we're doing that

we have signing bonuses as part of our budget, helping people when it comes to nurses and essential workers, forgiving their student loans, doing everything we can to make it easier for you to keep working and get a job. and finally for me day care is so enormous. we've lost so many women from the work force i need them back and we can provide a really affordable health care for every -- child care for everybody, that will make a big difference >> governor, maybe it -- i don't know the state of the world where we are right now or social media, but everything gets politicized, and this has been politicized all along. and here's the latest, and there are republicans saying it's perfect timing democrats suddenly ditching science whether it ever was science at this point. ditching science for politics as they see the internal polling based on what's going to happen in the mid-terms and then they -- i mean kevin, a republican from oklahoma said i'd love to see whatever

internal polling went around last week. this is certainly no coincidence as all these blue states are rolling back mandates. what do you say to that? >> i think that's nonsense, joe. i mean look where we were five weeks ago. everybody was desperate to get their rapid test they were waiting in line five hours in many cases. now we're on the backside i hope of omicron the numbers have come down, and the metrics are pretty clear we can get rid of these mask mandates, and we can do it safely if the world changes, we can change with it >> the question about if there's a point where you would put the masks back on, and there's not a clear metric that says we're taking them off because we've hit this level of community transmission there's nothing that says if something comes back and there's this level of transmission they'll go back on we don't know what the science is underneath that says why now.

>> i think two things. one is the most important metric for me now is hospitalization. we're able to do, you know, all the electives we need. number two is we get the masks on a little bit during delta as you know and omicron because i didn't want to see a lot of quarantines or shutdowns over schools like you saw in those states where they didn't have the masks. i think now we're in a different place. i think numbers say we're in a different place, and i think the people of connecticut have earned it. they've got the right to make the choice you talked about the regional coalition with other governors did you all discuss or is this a situation people are so tired of wearing msk masks you think it's difficult for people to go back once the masks are off for good. >> becky, i don't think there's an absolute number obviously infection rates for omicron are very different in terms of impact than they are for, say, delta.

so we have to see what happens next but i think if we keep the hospitalizations down, we keep our schools open, the kids don't have the wear masks. >> governor, where does testing fit into all this for you? i just went to a dinner last night. everybody was tested ahead of the dinner i think it made everybody feel pretty comfortable that hopefully we're all not getting it but over time one of the things we've seen is testing ramped up and testing almost disappeared completely that became its own problem when it came back how do you think about that now in term of investment around it? >> it gives people a great deal of security and confidence, andrew, and that's really important for me it's not simply a matter of masks in schools it's a matter of making sure our educators and teachers feel safe coming into the school, work force. and being able to test to know you're safe is a big part of

that six weeks ago everyone wanted to test twice a day, we were so nervous. i think it's more likely if you're showing symptoms, if you feel like you maybe were exposed we're going to get you a rapid test at no cost. >> thank you good to see you today. >> good to see you, becky. coming up, we're going to talk to the ceo of mattell after that company's latest rngseain and later dig through twitter. stay tuned "squawk box" is coming right back power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools, and interactive charts to give you an edge. 24/7 support when you need it the most. plus, zero-dollar commissions for online listed u.s. stocks. [ding] get e*trade and start trading today.

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good morning futures calm ahead of some key inflation data now just 30 minutes away we're expecting the hottest cpi read in about four decades coke and pepsi specifically. and new numbers from twitter we're going to talk with the company's cfo this hour, and our turn around is now compete that's the word from the head of toy giant mattel the final hour of "squawk box" begins right now

good morning and welcome back to "squawk box" here on cnbc live from the nasdaq markets. i'm joe kernen along with becky quick and andrew rosorkin. u.s. futures in the green. the nasdaq indicated lower but had a big session yesterday. the s&p down as you can see about 3 points or so treasuries are in that range now that includes somewhere between 185 on the ten-year and maybe where it is now 1.95, haven't quite seen 2 yet, but it's within reach at this point and oil prices stubbornly higher and maybe it's a given at this point for wti. >> let's get you caught up on other stories investors are going to be talking about today. first up dow component coca-cola out with results the company beat expectations for both revenue and profit. coke projected that commodity

price inflation would be in the midsingle digit percentage range for the year and that stock right now up about 1.5% on the expectation they've got pricing power. we spoke with the cfo hugh johnson earlier in the show and here's what he had to say. >> for the year we're expecting commodity inflation really about low double digits. it's going to be pretty high for us we give ourselves pretty good price serpt by buying ahead, so therefore we plan for potentially higher inflation, but we react to our pricing. >> we asked you about prices for pepsi products themselves and he said he expects to see prices up in the high single digits this year for the fourth quarter pepsi beat analyst earnings and announced a $10 billion per share buy back program and it's going to be raising its dividend by 7%, and that stock right now

up about 56 cents. and check out shares of twitter, those shares up despite the fact the company missed quarterly expectations for profit and revenue. investors cheering on thestock buy back program 4.1% is the gain you're seeing in twitter shares right now. we're going to be speaking with twitter cfo ned segal later this hour >> and take a look at coals, they're rising this morning. reporting the private equity firm leonard green expressing some interest in bidding for the retailer nominating ten directors to take control of the retailer's board. remember they called for khol's to consider selling itself and adopted a poison pill plan to avoid a hostile take over. so maybe more pressure on them meantime i want to get over to dom chu.

90 minutes for the opening bell, and at the domino taking a look at some of this morning's top premarket movers >> we're going to stick with the retail theme you mention the drama over at khol's right now we've also got fundamental earnings drivers so far. first off i'll call your attention to what's happening with shares of tapestry right now. this is the parent company of coach and kate spade brands. saw better than expected profits and revenues and forecast results for the same year that beat expectations as well. moving higher 3.7% of the up side meanwhile a more mixed picture when it comes to auto maker canada goose canada goose comes out with profits that miss expectations, revenues that beat expectations, but it did cut its full-year

forecast due to sales and supply chains and it's down roughly 36% from the highs that we saw just this past winter. so canada goose and kate spade slash tapestry doing some different moves here check on the most popular tickers on cnbc.com, among the top ten you have walt disney up 7% on the heels of earnings. meta platforms continues to see a lot of interest given the sell-off we've seen. uber up there because of earnings peloton a big interest story with regard to the changes happening there. and as usual, joe, the rest of the top ten and highlights from the top 50 are on my twitter feed at the domny if you want to check those out. >> we don't necessarily take requests but we certainly are aware and been requesting that -- some coverage on that

one with an 18% gain, pretty noteworthy there disney beating profit and revenue expectations in its latest quarter with particular strength from theme parks. disney plus. julia borstin sat down with julia for our first on cnbc interview. she joins us now >> disney also beat expectations when it came to streaming growth the company adding better than expected nearly 12 million disney plus subscribers. the company is on track to hit its goal between 230,000,260 million disney plus subs by 2024 saying they're ramping up content spending to hit those targets with as much as $1 billion in cost in to current quarter. >> it's a hungry beast to feed, the direct to consumer platforms, but our consumers really love it, and it's a good investment for us and a good investment for shareholders.

>> as for the record performance of the domestic parks with the whole division more than doubling revenue and operating income from the prior company, told me that demand is strong and that visitors are paying to upgrade their experience >> essentially what we're doing is providing a lot of options for customization and personalization so if they want to come into the park for relative value they can come in. at the same time we want to give people the options if they want to upgrade their package >> you can find my whole interview including his thoughts on bringing disney brands into the metaverse on cnbc.com. guys >> andrew, you want to weigh in. >> i don't know if you heard tom rogers at the end of the 6:00 hour this morning as he was talking about what he said going on under the hood of the

numbers. you know, surface level headline he made the argument as everybody has that they look a lot better than the netflix numbers on the streaming side. but interestingly he said when you actually "x" out some of the numbers in india and "x" out some of the freebies all of a sudden the numbers look relatively similar to where netflix is what do you think of that critique, if you will? >> i will say netflix and disney are in different situations for two reasons. one is netflix is a much more mature service than disney plus is disney plus is a couple years old and has aspirations of getting to the scale netflix is right now. i would just say netflix is much further in that journey and disney also is playing a different game it is a smaller service in terms of the type of content it has, and it's the bundle of services, disney plus, plus hulu, plus

espn offering this package that is in a lot of ways more competitive with netflix whereas netflix has a huge volume of content but doesn't have any of the big brands that disney does. >> right what was so interesting, though, about tom's comment was here's a company that should be growing, that disney should be growing faster, and he was arguably effectively they aren't, and he doesn't think the investors and analysts appreciate that point >> we also don't know yet what's going to happen when disney really expands this product globally, because it's still not fully rolled out so i still think the comparison, it's not really an apples to apples comparison yet. third quarter, one reason the stock dropped so dramatically far less anticipated that did accelerate to nearly 12 million, but i think you're right it's still too soon to say whether this is going to be a company

hitting those targets laid out >> all right, thanks, julia. appreciate it. when we come back we are awaiting some breaking inflation data that officials are going to be watching this one closely as they consider when and how much to hike interest rates up next the ceo of matel will join us fresh off solid fourth quarter results and also weigh in on a key license his company just took back from hasbro here's a hint it's related to the company we were just talking about. stay tedun you're watching "squawk box" and this is cnbc what the world needs now... is people. people who see energy a little bit differently. where a switch to cleaner power means a more resilient grid...

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shares of toymaker matel surging in the premarket the company beat fourth quarter top and bottom line expectations and gave a pretty good outlook for 2022 as well the ceo says the company's turn around is now complete and that matel is at this point in growth mode that's a pretty bold statement growth mode, what does that look

like at your company >> yes, becky. this was another exceptional component for mattel we continue to outpace in the industry and gain shares globally for the second consecutive year, and we had the highest annual growth rate in decades and double free cash flow and double earnings per share. as you said the headline is turn around is complete, and we're now in growth mode we expect to continue to gain share and have strong growth in 2022 and 2023, and we're not stopping there >> where are you stealing growth is this growth you're stealing from hasbro, other companies, and what are the product lines delivering this growth >> it's been pretty broad-based. six of the seven categories we operate and one is american girl

in three of the four regions we operate. so pretty comprehensive, sixth consecutive quarter of growth and continuing to gain share >> it is safe to say that parents are not stopping this increased spending they've been doing on their kids all through the pandemic >> that's right. we see strong growth, a lot of demand industry is very resilient the toy industry is a growth industry it has been growing for the last ten years and projected to continue to grow at more than 5% for the next five years and reach $100 billion in 2023 so the industry is reill-iant, and within that environment we expect to continue to dpan market share >> you faced inflationary prices just like anybody else out there. you managed to fight off any margin compression because you were able to raise prices last year how much do you anticipate raising prices this year >> pricing is one of the options we consider in terms of

inflation. it's too early to announce anything, but whenever we raise prices we always keep the consumers in mind and being very thoughtful and committed to maintaining the balance of quality and value for consumers. >> but is it fair to say you do plan to raise prices do you have to because input prices have gone up? >> it is one of the options we consider when given inflation. >> what are the other options, having margins get hurt? >> no. it's about improving our core structure, continue to adjust the product mix and remaining productive, and this is something we have been doing for the last four years very productively we improve our cost structure, achieve cost savings, tracking very well this year. we already saved $97 million as our outlook for growth last year, and expect to hit our target between 2021 and 2022 of

the cost saving. >> you know, i've been wanting to talk to you for the last month or so since it was announced that you all won back the license for disney princes that you'll be doing that toy line again and this is a partnership that was a very long running partnership with mattel. things fell apart before you were the ceo there how did you change this? >> this was a great win for mattel disney princess and frozen together are one of the crown jewels for the disney company with a huge wealth of characters to build on. and we couldn't be more excited. the relationship with disney is very strong. we've been doing a lot of things recently we just won the license and we expect to grow the business from the current level. given our position in the

category, our strength and capabilities and proven expertise to manage, grow and develop evergreen franchises we expect great things from this partnership. and like i said grow it meaningfully from the current level. >> really, how did the talks start, because thiswas a huge win for you all. it was a huge loss for hasbro, and it happened after things kind of went wrong in 2016 or leading up to 2016 i know disney was unhappy with how the brand was being managed. what happened? how did you change that? >> it's about trust. it's about relationships, and we've proven over the last few years that we know how to manage franchises, how to develop brands and if you look at our own track record over the last few years filling such high level of growth this in the past year additional growth, having broad-based success across multiple categories with toys

that resonate at levels we have not seen in years we're able to infuse our brand with relevance, create demand and then work hard to fulfill it with very strong supply chain and broad-based capability >> i know this time it's going to be managed by your team that also manages barbie, and that was pretty significant, too. was this a discussion you had or did it take place underneath you? >> i can tell you i was very involved and this was an important priority for the company and yes, disney princess and frozen will be managed by the same thing that managed barbie barbie just reached record high this year in terms of sales in terms of growth. barbie was the number one property globally. globally across the entire industry for the second year in a row. it hit 24% growth for the year so it's -- you can see that with our capabilities, with our expertise, a lot of expectations, and we're very

confident we can deliver on those expectations >> barbie is turning 63 years old this year. it's kind of phenomenal to imagine a doll hitting new heights even as she turns 63 it gives all of us a bit of hope for the future what happens next? >> i know she's going to be making an appearance at the super bowl this weekend. >> that's right. that appearance will be very exciting and we can't wait for people to see it second quarter and barbie at 63 is still the most diverse in the market it continues to evolve more relevant than ever, both timeless and timely, and it's a modern reflect of the world, and how kids and practice it it in daily life life. barbie continues to grow, and has a very exciting product line, and we expect another growth year for barbie in 2022 >> i think part of the reason investors have been so excited about you running this company

is because of your background in entertainment. making sure you're going to be kicking off new ways to kind of market these toys and new ways to try and get people involved in the story lines that leads to higher sales i know barbie has got a major motion picture what else do you have cooking when it comes to hollywood connections? >> we have one of the strongest catalogs for children franchises in the world we currently have 14 movies in development. and as you said barbie is about to go into production this coming month or in march it has an incredible cast. we just announced american ferrera to join the cast and one of the most prolific film makers of our time to write and direct. we also announced we're going into production and in partnership with netflix this summer and in addition to everything

we're doing on the film side, we also see a lot of activity on the television side, on the episodic content we have 13 shows and specials that we launched in 2022 we have more than 20 shows in production and more than 25 projects in development. so a lot of activity on the content side and expect to see some really good programs coming out of the mattel field and mattel television. >> thank you very much for your time today stock up by about 10.5% right now. we appreciate your time and we hope to come back soon >> thank you, becky. >> okay, coming up some new consumer inflation data and another first on "squawk box" interview with twitter cfo, twitter missing on the top and bottom line for the fourth quarter but the stock is up this morning. ay'll explain why. st tuned you're watching squawk on cnbc

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welcome back to "squawk box" this morning take a look at the futures ahead of a big inflation data number we're going to be getting at 8:30 eastern time. dow up about 66, 67 points nasdaq off about 19 points, s&p 500 up about 3 points. andrew, one week from today charlie munger is set to hold court at the daily shareholder meeting. he's bogue to be answering

shareholder questions virtually starting at 1:00 p.m. eastern time on february 16th. you can submit yours today by sending an e-mail to daily journal questions at cnbc.com. i'll be going through all those questions and ask charlie as many as possible guys, you know charlie never holds back he says what he thinks he's 98 now, and he's sharp as a tack >> it's still rat poison >> he doesn't trust it he doesn't like things that fluctuate like that. he never has >> fluctuated from a $1 to 44,000 coming up, breaking inflation data, new cpi numbers are next "squawk box" will be right back.

welcome back to "squawk box. we're just seconds away, about a half a minute actually from inflation data and new jobless claims futures are about where they've been for most of the session, green for the dow, but the s&p and the nasdaq both fractionally lower.

the ten-year note could be impacted by what we hear from chicago, from our rick santelli in just a couple of seconds. 1.934 is where we're indicated right for you. standing by at the cme in chicago, rick santelli the numbers, please. i think they should be hitting right about now. >> they're going to be hitting the screen right about now we're going to have initial continuing claims and of course our january read on cpi. 223,000 on initial jobless claims, a bit lower than expected still, the 188,000 from early december as the post-covid low and not only that it goes back into the late 1960s. our continuing claims about as expected, 1,621,000. of course the best we've seen at the end of december at

1,555,000. so sequentially those a bit lower. here we go, cpi headline number up 0.6%. the high-water mark on that was up 0.9 several times, october being the most recent. if you strip out food and energy it was up 0.6 as well. both these hotter than expected. and on the core side up 0.9 of the high-water mark from april so these were supposed to moderate they did not moderate. now for the biggies, 7.5 on year over year headline, 6% on year over year core let's go to the white board. so 7.5%, and that is of course on headline. you have to go to 1982 to find a higher number, and of course when we look at 5.5 on core, well, 5.5 december of '21 was

5.5. so therefore we are equaling what we have seen last, but, no, it came in at 6% so now we have to go down on the white board to august of '82 so those are your numbers on the year over year that's what everybody's most concerned about. we were supposed to see some alleviated pressure on the monthly read one-third of cpi is housing is rent, home equivalent rent and we all know it's very unlikely these rents which have been surging are going to be going down anytime soon. we know labor costs aren't probably going to be down anytime soon even though they're far from at least at this point competing with the actual rate of inflation it's lagging so even though wages are up close to 5%, they're not keeping up with inflation but also not likely to go down. these are the issues we need to pay attention to there's going to be plenty of other aspects of cpi i would

think will moderate over time. it's just that time frame is much longer than anybody anticipated about 6 to 8 months ago. >> stay tuned because we're going to talk to paulson who points out a lot of things and it almost sounds like he's saying transitory but we'll talk to him in a second first, though, we have the day's edition of liesmania and the liesmaniacs are gathered >> yeah, this is not a good report i don't know how much of those were affected. you had food up on the month used car prices up 1.5%. apparel up 1.1%. and airline fares up 2.3%. owners equivalent rent up 0.4. and there may be worst to come i did not expect much alleviation there. i thought maybe there could be some help at all from some of

the omicron related sectors, but it doesn't appear as if they helped either. so we have high inflation, joe, and i think this keeps the fed in its appointed rounds of raising rates. i do want while i'm talking to take a quick look at the chance of a 50 basis point rate hike for march. i don't think that's a possibility. i don't see it up -- oh, wow, it is up a lot. it just spiked, joe. i went at it it was 30% probability going in. it is now the odds on mark here, my friend. i don't know if rick can see the same thing i know he does the math there. i have a 54% chance of 50. i don't think that's the what the fed does listening to them i'm just telling you the market now has shifted, and we'll see if that comes down this could be just an initial reaction and i didn't see what happened

to the two-year -- i know you have somebody else to bring in zoom, zoom, zoom 145 >> and you're absolutely correct i'm better than 50% of a 50. and i'll tell you what, if anybody on the federal reserve board is listening, please, please avoid guidance on 50 and then do 50 okay, we need to get ahead of this you're putting the markets through death of 1,000 cuts. it's time, in my opinion, even though i have to admit the s&p 500 up 7 out of 9 sessions is rather impressive. but get on with it, and i especially think when we look towards europe, europe made this big pivot. they made their pivot for a reason, and also did you see what the bank of japan announced, steve they're going to be doing some more yield curve -- >> rick, if you keep talking you might -- rick, if you keep

talking we might get over 2% on the ten-year now it's 1994 and we could take out the party hats here on "squawk box" getting over 2% it's interesting, rick, if you want to get down and dirty here what's happened to the two tenth spread which is declining as we speak. >> 53. >> 50 nothing. 50 nothing basis points. does it tell you the market concerned -- >> it's a question of how you deal with it >> we're going to have some pulse and salve to put on this let'sbri in jim paulson, chief investment strategist. are you just saying calm down, jim? >> there's been a lot of fear around the fed and inflation

and i on one part of me says all that fear is good. we've been discounting this for a long time. i don't think it comes out of left field really because we've been worried about inflation for at least the last six months and worried about excessive fed tightening, and that's exactly what we got this morning yeah, there's bad numbers. i mean it's not just base effects because 0.6, that's a hot number even as the basis comes up a bit we're going to get another hot number next month as well. and thereafter, joe, i think it's going to start to calm down a little bit a couple of things i say you mentioned, you know, industrial commodity prices, those things were soaring early in this recovery, and they have really stopped doing that in the last four or five months they've been moving more sideways i think that's sensitive and break even rates within the bond

market, the ten. year, the five-year. flat right now as far as inflation expectations going back to may, the five year's flat going back to october so there's not a lot of inflation expectations in the bond market going up anymore but i think the biggest thing, joe, for me there's a sense that the fed's not doing anything, the fiscal authorities aren't doing anything they're just ignoring inflation soaring without tightening, but the reality is we've had a lot of policy tightening that's gone on in the last year. real m2 money growth was 20% last march it's now 6%. fiscal deficit spending to gdp last march was 8.5%. it's now 10.5% 8% tightening relative to the economy. the yield curves, which steve and rick were mentioning was 1.6% last march. it's now 50 basis points so a huge flattening in the

curve. and then the dollar is up 8% over the last year it's 20% higher than it was in the first five yeerlars in the s recovery if someone tells you we've had a significant reduction in money growth, significant flattening of yield curve and a significant rise in the dollar, i'd say that's going to lead to lower inflation. that one-year window is going to come up starting in about april and start to work i think not only on slow economic activity but also i think inflation in general. so i think the fear that we have had in this thing, i think i like the combo of a lot of fear and then having a situation where i think there's some likelihood that some of those fears as before and that's a powerful combo forstocks and bonds. >> that is -- in all your notes you -- i reference that's the way you felt

have you moderated your sort of more sanguine feelings about inflation? are you less sanguine after seeing this today or are you sticking with what you said and that is 3.5% by the end of the year, which would basically be we can go back to having said it was transitory it was not a permanent long lasting wage -- so we can bring that word back based on what you think, or are you now getting more hawkish >> well, i think that -- i think going into today's numbers, there was pretty high expectations we're going to get a hot number there's high expectations we're going to get a hot number next month. if the numbers are continuing to be this hot in june, july, august, that's a different story. and i'm not saying i know they won't. that could certainly happen. it's certainly a risk, but i really like the fact we've had a

fair amount of -- of easing that led to supply challenges here. and now we've had a fair amount of tightening. and now i also think omicron is playing a huge role in this early cycle inflationary surge that we've had and i think those two things and omicron is starting to move to endemic which is going to free up supply chains look at the growth in the labor force in recent months it was 1.2 million jump in the labor force last month that kind of thing might start to happen more where supply starts to catch up with demand and then we've got tighting with it i still lean towards the view i don't know if i want to call it transitory but i bet theflation rate at the end of the year cpi is down. but if it gets to even 4% i think it'll calm some of the fear we see in the markets right now. >> and you even brought up some

yesterday demographic overall secular forces still in place. rick or steve, do either one of you guys feel any better i feel better. i'm a contrarian i love what he's saying. i just love what he's saying because i don't really believe much of it and i agree usually with everything he says here's the problem, okay, pre-covid inflation was 2% now it jumps huge, and everybody's right from 2% up to what 7% plus, we're going to start to come down, no doubt about it and you're going to be right it's going to be 4.5%, 5%. the issue is just because it came down from 7%, the real issue is where it started. and i think that's where everybody's going to fall into this trap. oh,my god, look it half of thi inflation as disappeared, but it's still significantly higher than pre-covid, and that is the point. and the other issue is in my

opinion where's the tightening been give me a break. we're 0 to 25. they're still buying 30 billion for the three-year note okay, i don't see any tightening i can't imagine you have a microscope bigger than mine. >> rick, there's 90 basis points of tightening in the two-year. >> that's the market >> the market is doing it because the fed is behind it >> but that's the fed. that's how it works, rick. >> the fed has done nothing, blah, blah, blah, blah, blah >> rick, i totally agree but the free market has come to the rescue here in tightening. and the inflation is tightening this as well i mean, it's brought money growth, nominal money growth >> an economy that's got to be slowed down of course is going

to experience less pressures on the demand side. of course. that's the whole point of it >> right the other thing to think about, rick, is -- >> but the growth rate is stronger, too. real gdp is not going to return to 2% either i think it's going to stay 3% or a little more. so if we get 3% real growth with a little higher inflation, i don't know if that's such a bad thing. >> go ahead, steve jim, i think the problem -- >> gdp is going to come down faster than inflation in my opinion. >> jim, the problem with your sanguine outlook i think is the following. i think you're still going to get wage inflation, work through the consumer price index i don't think much of that has shown up you had relatively muted inflation from housing show up and i also think you have other price increases to come before it gets better the other thing i'd like to point out for joe's sake here is

that bacon prices actually fell 0.2% i think bacon prices at the super market are actually up joe, i'm sorry but -- >> silver lining >> it doesn't affect me at all >> i didn't know we had that one. can we run that again? silver lining, that's the only data point i saw that, oh, bacon prices are down. all right, gentlemen, what about those demographic issues, rick 20 years we've been trying to engender inflation we've overdone it, i guess overcooked >> yeah, they put too much miracle grow in the water, i think. >> yeah. steve, you you guys, suddenly i see a lot of agreement the fed is behind the curve between santelli and

liesman. >> i don't think it's about as far behind the curve as rick says because i think the market has done a lot of heavy lifting. i think if i might the secular things you were talking about, things like legalization, things like globalization, those are going away and we can have less imimmigration in this country and higher trade we can have those policies that's fine, but people understand there's a cost to them, and that cost -- >> energy prices, energy prices. rare earth, you know -- >> that too, rick. >> the demand we have all these battery cars and then you can't get a mining license for rare earth pretty much anywhere in the country especially not

california, so what are we going to do? >> agreed. >> if you want to worry about pricing make sure november you vote for people that understand you can't plug in your car to charge it if there's no grid power, please. >> how about those people that want to close borders and oppose free trade and keep prices high for that reason? >> i did tighter this border thing. what's cool about it, i can see all their pictures on ellis island, that's cool. i think we have to keep some kind of a record for something the government has gotten so sloppy, okay, that's my opinion, anyway >> i just say about the demographics, you know, in the 1970s the labor force discovered it was 2%, higher than any from the post-career. mostly from the '50s, '60s and

we're going to struggle to grow 1% in this recovery, i think so we're going to grow the labor force half as fast which will help also to dampen inflation pressures, not make it anything like the 1970s in addition to that we've got elevated productivity going on, so we can handle wage increases in a way we couldn't in the last 20 years and the automobile industry and even thischy is led by a disinflationary force, technology where sticker prices go down every year those forces are still there, and they're going to come back home to roost and not turn this into the 1970s >> one thing that did not disappoint was the market reaction to those numbers. wow, seeing across the board, bonds, spreads, equities, bitcoin. just across the board moving on a hot number

thank you, rick, steve liesman andjim and here i thought, becky, steve and rick were on the -- i don't know, i guess it was very temporary. it was temporary >> you know, transitory. >> transitory. >> take a look at the futures right now. dow futures down about 130 after being up about 40 or 50 points it's affecting just about everything nasdaq futures now down by 220 points s&p futures down by 42 when we come back twitter chief financial officer ned segal will join us live straight off fourth quarter results. we've got a lot to talk about with ned including his ceo and a programming note for you, don't miss a big interview with uber's ceo tomorrow. we'll be back in just a moment [children laughing] doug? [ding] never settle with power e*trade. it has easy-to-use tools and some of the lowest prices. get e*trade and start trading today.

all right. we got the cpi numbers and in case you missed it, it was a doozy. we expected it to be hot but maybe not this hot 7% year over year. the highest level going back to february of 1982 it was higher than the market anticipated. as a result, you saw a lot of activity futures this morning coming under some pressure. this happened just at 8:30 just as the number hit. dow futures went from being in the green to down 143. the s&p futures down by 42 the nasdaq hit the worse by 226. the 10-year the yield spiking there getting much closer to 2% sitting now at 1.98%. >> thank you, becky. we'll talk twitter shares jumping in the premarket. missing analyst' expectations. investors don't seem to care they may be cheering a fact that twitter announced a $4 billion stock buy back program

joinings now is chief financial officer ed segal great to see you this morning. let's talk about the earnings report and talk about the buy back let's talk about the operations of the company, first. because there was a miss i think there are people who are going to focus on that we can talk about the focus on the buy back in a moment >>well, thanks for having me it's great to be here to talk about our results and our outlook. we came into the top half of the revenue guidance that we gave. we came in in line with the audience outlook that we had given for q4 and thought we were set up for a strong 2022 we said we would grow revenue low to mid 20s and we would grow expenses in the mid 20s. we've done some important resource reallocation to hold things to that level and it feels like advertisers are off to a big start in q1. >> when you think, though, about this buy back, which is what seems like everybody is focussed on, what was the rational for

that relative to using that cash for other needs? >> so we ended the year with $6.5 billion of cash we added a billion in early january from the sell which allowed us to focus more resources on the ads opportunity on twitter so $7.5 billion in cash. we feel we can continue to invest in the growth opportunities inside the company but also return cash to shareholders inside of that $4 billion share repurchase, we've planned to enter an accelerated share repurchase program to buy $2 billion worth of shares in the very near term and then to have the flexibility to buy back more over time. so we hope we can continue to grow the company through hiring people, building out our fra infrastructure, continuing to be inquisitive, and the share repurchase program. >> i was going to ask you, we've had a lot of conversations over the past couple of years about acquisitions you've been inquisitive mostly

with smaller companies does it suggest you don't think there's a better buy with your cash now than your own stock >> we'll have lots of cash to concentrate on growing our head count. we'll grow it about 20% this year and being inquisitive we bought over 25 companies over the last five years. as you mentioned they're usually technology and talent. we have bought businesses when they helped us accelerate our work we'll continue to bring that same mind set to m & a as we look at opportunities in front of us. >> i was struck by this advertising revenue total of 1.41 billion it's up 22% year over year 24% on a constant currency basis. total ad engagement appeared to decrease 12% year over year. why is that? >> well, that's a sign of our success, actually, in our direct response ad formats. as you know, our brand direct response has been 85-15 historically there's a big opportunity for us

to show more direct response ads to people on twitter and to help advertisers with what we call down funnel ads opportunities. where people are clicking to download something or buy something. when you click on an ad, that's a higher threshold in an engagement when ad engagements are going down because of the mixed shift to higher direct response ads where there's a higher threshold for the engagement because you're not just watching the ad, you have to click through. there's a call to action of some sort it's a sign of progress for us that the mixed shift for the performance ads is working that's why performance ads grew faster than overall ads in q4. it was driven by our app install or map product. >> what should investors take away it's the first time we're talking to you since the new ceo has been put in place. jack is no longer in the role. any difference >> well, prague is off to a

great saturday in build -- start on building on his success jack had. jack set the strategy and put us on a great course and he's building on that by reorganizing the team we have a gm structure so there are three people who are responsible in delivering outcomes and they have all the resources available to them to deliver on the outcomes. he's also got us more focussed on metrics doing everything we can to move faster that mind set is contagious across the company as we think about all the work we have in front of us. he's off to a great start! >> you still talking to jack about what is going on at the company? by the way he's been let loose on twitter all of a sudden he's no longer running the company, he says things on twitter he used to never say before >> well, jack has been provocative. i think it's part of what lead him to found two incredible companies and to have as much impact as he has an the world as one of these iconic founders it's fun to watch what he has to say and he still is on our board

through may. so we benefit from his insights regularly. >> what do you make of the rerating that has happened in the technology world and maybe you can speak specifically to the way investor communities look at facebook and, frankly, how for so many years, they compared twitter to facebook. >>well, it's a fascinating time in the markets with so many different factors affecting how people think about equities and share price from inflation to covid to other factors that affect us. when we step back and look at it, we see $150 billion ads opportunity for us outside of china, outside of search we're 3% of that today so we feel like there's so much in our control where we focus less on what is happening somewhere else and more on what we can do at twitter to earn more direct response ad dollars to grow our audience we talk today about 35% year

over year growth in sign ups in q 4. it's a great example of the opportunity to grow our audience over time. >> and then finally i want to ask you joe rogan, spotify, dealing with at lot of issues that you've been dealing with. what do you think they're doing over there how do it you think it relates back to the issues you've confronted >> well, it's a fascinating time for a lot of companies who find themselves making decisions about both how to invest in content and what decisions they ought to make and what the principles are behind the decisions. hard for me to judge somebody else on these, but when i think about twitter, we try to be principled and consistent in what people can expect from us when you see content on twitter, for example, it's created by the person who posted it sometimes we share ad dollars with content partners but you don't see us paying for content the same way it's a different set of challenges than you might see for them or for somebody else

out there. >> ed segal, great to see you. i appreciate it. thank you so much. we'll talk to you soon. >> thank you that's it for "squawkbox" this morning join us tomorrow squawk on the-- "squawk on the t begins now good thursday morning. i'm carl quintanilla futures go red as cpi print get dashed .6 on headline and core yields pop. the month on month gain does decelerate from december the 10-year below two. road map begins with rising pressure for the fed inflation hits the four-decade high and increases the likelihood of substantial rate hikes this year. >> and the return of disney magic. the park business roaring back and streaming subs delivering better than expected results for disney plus. and congress eyeing stock tr