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 trading restrictions

former sec chair joining us to discuss that issue we'll start with the markets, of course, and the reaction to the new cpi data a lot to dig into here both headline and core run hot markets pricing in closer to six hikes rather than five this year. >> yes market coming in today was leading at least lightly in the direction there would be a pleasant surprise. it did not happen. higher than expected obviously headlined higher than expected so it did reprice fed intentions something close to maybe 50/50 or half percentage point increase in the march. meaning we were talking earlier this week after the report in the 50% range. fed probably has to come out and lean one way or the other and say, yeah, that sounds reasonable or, you know, talk it down and it's a quarter put. what is interesting to me is the market, you know, is basically just kind of handing back yesterday's rally at the preopen level. it's not really panicking about

this it's a little bit of a we got into a neutral spot s&p 500 at a one-week high by the 50-day average. let's see if we get lucky with cpi. didn't happen. two-year note raising higher on the yield and that's where we sit. as we hear from lots of companies that are just building in assumptions for continued price challenges the rest of the year. >> yeah. every day it's more companies saying that they are battling inflation. the inflation will continue this year and wherever possible, if they have the pricing power, if they have the brand strength, they'll push it to consumers coca-cola this morning, pepsi this morning, unilever talking about this morning there's a huge and growing list around this. of course, those are just some of the companies that are disney which continued to see strength despite the fact it was rising prices across many different segments on the flip side, you have other companies that are still struggling with some of the higher costs that maybe don't have as much pricing power in the marketplace or maybe aren't

consumer facing and will have to absorb some of the costs i mean, this is inflation is something that is affecting every corner of the economy right now. we're going to be speaking to the ceo of huntington ingals industry in the next hour. you're seeing it affect margins supply chain issues for national security is concerned. nonetheless, mike, to the point you made, we've had a number of fed officials in the last couple of days basically tamp down or at least try to calm some of those greatest aggressive hiking fears that are playing out in the market right now how large the rate increases can be are concerned, too. it seems like the fed is continuing to walk a tight rope here >>well, yeah especially given the fact there's still five weeks to the next meeting there's still another cpi report to come before we get to that meeting. >> uh-huh. >> and, you know, it seems as if there is a lot of place. the market will have to sort this out on some level on its

own. and, you know, remains the case that it's not like the debate is over because we knew that january and february were going to be the months very low inflation. they rpg were going make the comparisons look eye popping terms of percentage gains annually interesting long-term yields are going up in the 10 years, 190 and close to 2%. going up slower. the market is saying, look, whatever the fed has to do, it'll probably work. at least for now, it doesn't seem it's undermine growth the final point is the market continues to reward companies that persuasively say they can push pricing power the prices higher to their customers. and that shows you the dynamic has flipped a little bit no longer are they talking about efficiency on the cost side and productivity it's more about, you know, basically being able to keep traction with customers, as you put prices up.

>> yeah. the cost saving programs take time. >> yeah. >> that was certainly working for clorox last week normally something you can institute in 12 to 18 months maybe it takes longer this time. mike mentioned the 10-year there was 19 5 so technical -- >> it probably did giveaway. it was a bit of a per received sailing. fascinating yesterday the 10-year treasury auction was better than expected more demand right close to 19. so it's sort of showing you that at some point it will be a little bit of a damper on this move but, you know, we don't know where it is. i don't think there's a magic level and all of a sudden the market panics about it it's going up in this kind of lock step way. it'll take some sorting through. i think a lot of people are short bonds.

let's see how corporate yields react to this credit will be key to watch and not so much about the print, in his rue view, but what happens to inflation expectations here is what miller said yesterday. >> i don't think the headline inflation numbers mean much at all. inflation expectations and the three years i'm telling you there's real worry there with the tips are telling you there's worry there. the prices could be wrong. 0 look at 12 months or five years. i guess it takes some to burn out. >> are if sure it absolutely true the market faced expectations have moderated from the highs recently again, is that because they think the fed will have to do enough to slow the economy down

or just they can walk the line we have a good enough bit of momentum in terms of nominal growth, you know, morgan, we have good consumer corporate balance sheets it's not as if we're at stall speed on the economy that we can navigate this path. >> yeah. look nobody thinks you speak to that pays attention to the market or pays attention to the economy think that inflation stays at the crazy elevated levels the key question around expectations is what does it come down to where does it settle in the coming months and coming years that's where so much of the debate to bill miller's point is kind of centered we are starting to see areas of inflation that are pushing out that we didn't see before. so case in point, this morning the fact you had motor vehicle insurance up 4%. more than 4% year on year. you had reports, i believe the "wall street journal" last night saying that some car insurers are raising rates anywhere from 6% to double digit increases as they are seeing the higher

costs. they are seeing more people begin to hit the road have accidents, et. cetera. i mean, we talked about it yesterday with housing, too. okay, so we've got 2% on the 10-year yields we have mortgage rates climbing back to prepandemic highs. how will it ripple out to something like services. even as you see the good side of the equation come down how is it going to affect consumers? i keep coming back to that point and i realize the bond market is telling the story it's telling and the tips is telling the story its telling but consumers, to me, it seems to be are key to the equation given the fact we keep hearing from so many companies, carl, about how strong consumers are and about how they're able to absorb these prices but for how long. >> yeah. so the argument that .6 is a deceleration and average earnings are up .7 there's a little bit of an

offset there also, if you talk about consumer surveys about inflation. tell me what gas prices are. it's almost one for one. that's what happens. we'll see if it rolls over or not. >> futures here session low. disney is up for the premarket or at least it was the company posted a quarterly beat held by parks and the addition of $12 million disney plus subscribers yesterday on "closing bell" bob told us he's optimistic about subs growth. >> we're reaffirming our guidance of 230 to 260 as we gave last december that's our target and continues to be our target and what is driving us, as we said, great content. we'll have more franchise-added content on the big franchises added this fiscal year double what we had in '21. >> fascinating quarter espn

23.3 the street was looking forless than $19 million moffit said the execution of parks, in their words, was sterling was the sheer operating leverage benefitting from both volume and price is that the biggest surprise, though, the drop in hulu it has to be interesting to see if it's a approximately for the overall. >> yeah. they tried to bundle things together with hulu and maybe it helped on some level i think it was maybe slightly pleasant surprise on the streaming side things seem to be on track i think the parks story, though, 100% was the real take away here the pricing power, the fact that operating income in parks was well above prepandemic levels. it's been the big hole in the entire income statement for disney for two years if that's coming back at these levels, all of a sudden the stock looks less expensive it had started to look expensive even after the decline so that's an interesting, you know, element of it.

that's pricing power you're getting people to pay these premium levels for, you know, faster access and privilege, you know, kind of access in the parks. >> yeah. people are paying it what is amazing, they haven't seen the return of international travelers yet, which prepandemic was something like for the domestic parts here were something like 20% of overall attendance so, to your point, you're seeing more profitability but fewer guests attending what does it look like as you continue to see the reopenings ramp up? of course, that then helps to subsidize everything we're seeing play out with streaming it's incredible between hulu, espn plus, and disney plus, you're talking about almost 200 million subscribers now. netflix has 222 million subscribers. it's a lever it can pull because it's a diversified business, carl, unlike netflixs of the world. so we'll see how it continues or -- mike, we'll see how it continues to shake out. >> yeah. we absolutely will let's talk about it. here to discuss more on disney's earnings from the parks to

streaming and the rest joined by analyst doug croats. good to see you this morning you heard us chatting about the main drivers of the quarter map is your top line on it all >> yeah. i think you guys hit the nail on the head the parks results were remarkable i think investors have been capitalizing on a full recovery before last night. we learned a full recovery of the parks looks better than we thought. if prepandemic domestic margins topped out at 25% range, if you look at this quarter and full parks capacity, you can see at 30% ebitda margins at parks and that would be a tremendous lift to the overall business. >> yeah. you did raise the price target to 132 below where we are now and essential at the opening levels what keeps you skeptical

the rest of the execution on the streaming side >> yeah. it's their media business as a whole. they're losing millions of dollars. if there are any other businesses losing money, i'm not aware of them. they said they'll be break even in '24 but it doesn't mean not for profit margins it means modern profitability. in the meantime, the business is bleeding out we're skeptical of the ultimate profitability of media business. >> how about espn? i mean, before disney launched the streaming platform, the disney plus platform, it was so much of the focus for investors. it seems like bob and the rest of his team talked up the opportunities around espn and sports betting, as well.

kind of dampening any kind of speculation that we could see a spin-off. >> yeah. look, the supports bet still generates a lot of cash flow for disney they really have the only sports business that does that. most run close to even i think doisney's is pushed in that direction over time it is still a big free cash flow generator that can fund other things in the company. i don't think there's much chance. >> what is the read through from disney to the other streaming players that are considered more traditional media? i mean, we know the landscape has gotten so competitive. is it kind of disney and netflix and then everything else is it this a template we can use to assess other companies? >> i don't know there's a lot of read through i mean, obviously, netflix had a soft quarter disney had a good quarter. hbo and peacock reporting their quarters were okay

we have a few to go. it's netflix, disney, amazon i don't think lbo is going to discovery soon that entity isn't going away viacom is a player comcast isn't going anywhere you have six very well funded players in this segment without any real visibility on when the increases in spending on content will slow down and netflix is sort of indicating they're going to get into the video game business now. we're opening up a second front. you know what they say about that >> some on the street is saying the print is really good we mentioned that rerating of netflix that does affect disney's evaluation and i think they said they're in a evaluation causam. how much did that netflix guidance hurt the overall sector >> i mean, i think after seeing disney's results, people macon

collude that netflix's issues are netflix's issues more than sectorial issues that could help. but, yeah. in part because people feel like they have better chance of coming on the back end of this with a profitable streaming business the spending keeps going up. i think there's a point go from okay the business will eventually be profitable to saying okay how profitable is the business going to be '02 putting multiples now on current level earnings that are depressed but if you start to think about what it's like in fiscal '26 if the multiple becomes high, it's harder to sustain that. >> yeah. absolutely a battle ground on that front thank you very much, i appreciate it. >> thank you when we come back this

morning, a lot more on the earnings front we'll get market reaction to results from uber and twitter along with pepsi, coke, kellogg, data dog, mattell, there's a ton. take a look at futures here. the 10-year gets the 2%. disney will help the dow out a little bit to the tune of about 60 points at the open. i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system

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welcome back to "squawk on the street." futures are lower now. we start with uber

up sharply after posting better than expected quarterly results. helped by a rebound in ride sharing and strengthen the uber eats delivery business you can see the shares up about 3.5% now ceodara khosrowshahi will be a guest on "squawk box" tomorrow stock is now trading about flat for twitter. carl, but uber in particular got my attention part of what helped propel the results was investments in other ride sharing and tech companies. in some way uber results have swung dramatically based on how the investments have been going. >> yeah. the street giving them the benefit of the doubt

expense growth just run away i think that's another piece of the story. i mean, they more or less hit top line targets in terms of guidance but, you know, people are wondering about the productivity not a lot to carry forward in terms behalf is next in terms of, you know, audience expansion and adding engagement. it's a little bit of a work in progress they point toward the 2023 goals. >> yeah. exactly. we haven't mentioned aggressive selling of twitter over an arc. >> yeah. it's a little bit of a give up on that front, of course, arc is, you know, they're selling one thing to buy another, for the most part.

it seem it's disrupting. if you go back to 2012, i know it's a maybe unfair comparison but twitter revenue up by 10 times. facebook up 20 times i mean, that's just, you know, the market caps are about that ratio now, too it's something people like the financial engineering in this case because in the absence of a clear path toward operating, you know, kind of a real step function change. that's what you have. >> yeah. corporate earnings, of course, may take a backseat to the overall macro picture. today if you missed it cpi for january up 7.5 year on year for headline it takes you back to 1982. it looks like according to futures, we get back some of the 2% gain the s&p had over the last t ssis.woeson

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question mentioned cpi that's the reason futures are in the red. claims come in 223,000 we're watching the 10-year which barely kiss 2% and the two-year got to 1.45. opening bell in five minutes

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twilio surging in the premarket. posting a narrower expected quarterly revenue loss eps loss they see a bit of a wider loss than the street expects. the evaluation picture on some of the software is clouding now. >> absolutely. without a doubt. in fact, it's trading very close to that group of younger cloud stocks that we tracked you know, down by 55% or something going into yesterday's close. from its peak. so, obviously, reassurance on the revenue line let's lift the short bets and give it a little bit of credit

it's a big question, morgan, in terms of whether there will be a savl advantage operation in that tier of technology as even the, you know, the nasdaq 100 itself is, you know,10% or 12%. >> yeah. totally. i mean, just given the fact we're talking about it a few minutes ago, you know, a 10-year yield that was hitting 2%, you know, going back to 2019 and that push pull between the macro dynamics and currents of the market, mike and the companies specific how they're weathering opportunities, as well at what pointdo investors see value in the growth plays hit so hard. >> yeah. obviously, you know, the yield story has been part of that. it's obviously not determining the entire move in tech. right now nasdaq is also the weaker index in terms of how deep a decline and the strength of the come back it hasn't proven as much if you look at the s&p, actually, the average s&p stocks -- [ cheers and applause

a busy floor here nice to see. we hit the opening bell on the cnbc opening exchange here. >> it's an amazing chart on the street a lot of ad commodities -- >> you know kind of pockets of strength fertilizer stocks breaking out we talked about just the general agricultural futures deere and atd co had good number this week. that's kind of what we're seeing there. >> yeah. a great example of that 45 cents does beat by 4 cents

organic up 9 some of the organic numbers on consumer products companies, i'm am amazed we haven't seen numbers like that in awhile. a lot ofs was volume and price single digit percentage head wind. >> yeah. they know how to work in an environment like this. >> yeah. in a normal year they'll try to get a little bit of pricing through. there was a definite effect. a reopening effect it helped the volume numbers and, yeah, the guy is a little bit squishy. dividend yield on coke data. it's pretty much a low end of the range. organic umm almost 12.

about 6. street at 5.5. pepsi in for a big weekend in los angeles with the pepsi halftime show at the super bowl. >> yeah. and i believe that you will be there in person come tomorrow to talk even more about it. so a nice little, i guess, teaser there to your point pepsi and coca-cola it's similar dynamics playing out there. in terms of pepsi, the fact they raised prices on sodas and snacks in the fall and winter of last year, they're planning more increases this year. we can talk about food inflation and what we've seen in ag commodities. also, i mean, aluminum at multiyear highs, too we've seen it propel stocks, as well so we're seeing some of those inflationary pressures in a number of different materials lines, too guys, i would just, in terms of i guess other if you want to call it commodities, something else i'm keeping an eye on has been the psychedelics and also cannabis so you have cathie wood buying

life sciences. it was -- it did jump this week. up something like 12% before the opening bell today we're seeing similarly strong moves in cannabis, too keep in mind these are beat down stocks with some of them something like 80% off their 52-week highs. we talk about the metaverse. i mean, these are kind of the original metaverse. >> yeah. your own individual metaverse, i guess. that's the path in to those. i would point out, obviously, with the rates move we're seeing bank stocks are getting big. you can have the classic dynamic. bank of america up 1.4%. basically sals at an all-time high up about a third of a percent. so if the more rate sensitive banks kind of coming in and taking up a little bit of slack of these losses and for the s&p

as whole, you know, essentially we are just, you know, not quite giving back. it's going to sound a little bit like a tired line, we probably have peaked in terms of the upward force of the monthly inflation numbers. i think there's some confidence in the market that in the coming months it's going to go in that direction. >> it's just the math. some degree there's going to be a statistical restraint to it. and the idea, by the way, we're not really seeing as much in the way of product shortages and they have rebuilt the semiconductor pipeline, to some degree all of those things seem like

they should be a little bit net friendly relative to the worst fears. >> yeah. >> the mass adoption in terms of tech and everything, as well it's been the bullish theses around certain analysts' calls with retailers, for example. you see the cost pressures come up and you see a consumer start to and a little bit, margins stay in place for the companies that executed so well you can see it carry through to other industries as well reopening continues to be in focus, carl. you had are mgm results after the bell las vegas is coming back the stock is under a little bit of pressure again this morning it returned to profitability they did see some cancellations in january theyty it's short term limited impact beyond march. similar commentary to the passenger airlines it had been up until today pretty strong week for some of

those recovery names whether it's airlines, mgm, or cruise ship stocks which continue to be so hammered by all of these different covid variants >> yeah. to your point royal caribbean awfully close to a three or four month high they initiate a buy on rcl what else? six, fun theme parks clearly there's some halo effect to the news out of disney's park. >> without a doubt is this the fourth reopening trade? i think it might be. i can't keep track sort of in the past cycle we had a debt scare it would put a good fright into

the market we saefed the world again. >> as to your point about the consumer, everyone sort of chatting about tapestry today. >> yeah. >> a big top line beat coach up 24. kate spade up 23 it was a little bit strange. they missed by 5 credibents mostly in asia-pacific and europe the ehyatt consumer counting on them. >> it's a key point. the tale of two apparel makers this morning even in the luxury end of the market which has continued to see the rebound resilient. based on the commentary, it continues to, resilient. it comes back to mgm in some ways, too. you continue so see so much weakness in the companies

exposed to asia given everything in china with a zero covid policy continue to be hampered or hindered the hardest. how it's averaging the local markets. >> yeah. no doubt about it. i would say to look elsewhere in terms of consumer cyclical stuff. gifting a pretty standard decline in the home builders this morning it says rate sensitivecyclical are the ones that will get hurt. and home builders as a group have managed the kind of hold the line a little bit. they haven't broken down supply demand looks good affordability questioning questionable there's the sensitivity there. but there's definitely the reflex move this morning to take some out if you look them down 2.5%. >> and, you know, normally an day like this, you would see a move to defenses i guess we are but kellogg today

83 cents beats by 4 cents. revenues in live organic almost double. more than doubled expectations all the supply chain conversation, mike, the labor strife is sort of being washed away in an environment you're looking for more revenue stability, i guess. >> yeah. for sure stock is at a choppy run and the food companies within sumers staples have been hit or miss they don't seem to be as able to pass along cost increases as seamlessly there was a talk in the pandemic of the serial renaissance. so you had some give back there, if we had any reopening effect pretty reassuring numbers. i think, you know, it follows along the lines of, you know, some of the other ones that say, you know, we have this under control. even if -- and top line really helps to cover up a lot. i think that's something very different that we got used to in

previous fed tightening cycles we were worried about 2% real growth down to zero. now we came into the year relatively hot. >> disney is helping the dow avoid a more pronounced decline. on the mdx not so hot. only a half dozen names in the green. we'll get to bob. >> we're off the lows on the russell and the s&p and also on the dow jones industrial average. it's not a great open. 3-1 declining to advancing stocks a bit of a sort of a knee jerk reaction here. bank doing a little bit better energy stocks a little bit better in the open industrials slightly down. when i say knee jerk, there's tech not just speculative tech but big cap tech i put up the names here. you can see the usual suspects some of the semiconductor capital equipment names like lam research, some of of the megacap semis like nvidia, and you get

big cap in general all down in the area of 1% one guy messaged me and said usual knee jerk reaction here. i think it's a good point. the debate is when inflation is peaking. nobody expects inflation to peak in january the question is, when is it going to peak? february, mark, april? i want to show you a comment that was made. one of the biggest ocean shippers in the world. maersk controls about 20% of the ocean shipping volume. they came out with the report today. they expect supply chain disruptions to persist into q 2. it means into june but they said after that normalization in ocean shipping, normalization meaning things will get back to normal, they're expecting it in the second half of the year. that's a very important comment from a company that controls 20% of the ocean shipping in the world. their stock is holding up well and i think that's where everybody needs to look. on the earnings situation, we're getting tail ends from a lot of earnings today everyone knows that the earnings

revisions are not as strong as they were. what matters is the economy is still strong you can see that in coca-cola. a lot of reopening stories their volumes were up 9% companies hit the fourth quarter mark the first quarter away from home volume was ahead of 2019. there's the reopening story. they're telling you people are going out a lot more it has been a great performer in the last month it was historic high in the last day or two as you can see also up again today. as for tech earnings, know they got hit badly. we had real messes in speculative tech stocks. uber today an excellent report we had the problems with not being able to get drivers and yet the mobility unit did very, very well. they've been bouncing in the last couple of weeks and the

earnings reports for them are general reassuring they talk about rising demand. there's the reopening story. and they said the said thing demand remains strong. it's the reopening story back to you. >> thank you so much when we come back jay clayton with his take on banning members of congress from trading stocks before we go to break, of course, we'll check in on the bonds on the morning in which the 10-year yield touched 2% just one basis point shy right now as the 2-year is about one basis point shy of 1.5 the dow is off the initial lows. 1.48

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>> gaining momentum in the house to ban members from congress trading stocks some arguing some proposals go too far or might be too difficult to implement

joining us tis jay clayton good morning it's great to see you. >> great to see you, too thanks for having me on. >> fascinating to hear the speakers' viewers on this and how they have evolved in the short period of time what have you seen that is proposed that you like or don't like >> well, carl, what i've seen so far is what i would say is -- because this is an issue where sound bytes mean a lot i've seen a lot of very -- of what is a multifaceted issue and, look, very important. and it's getting better. the debate is getting better because people are recognizing the many sides to this if you don't mind, i'll lay out four. >> sure. >> any kind of program here, you have to have fairness. you don't want people taking advantage of information they have through the public service. absolutely it's the law.

you want the american people to have confidence if we have the rules they're being enforced then what you want to have is our people in government to be investing alongside the american people you don't want them excluded from the market. in our country, you're saving for your own retirement. if, you know, 300 million people someday one way or another will rely on market performance to pay for their retirement we want our elected representatives to be sitting alongside them last, we don't want rules that exclude people from serving in government this is particularly important we've seen over the last few years how important it is to have private sector, up to date expertise in the government. bear with me, and you'll see it from both sides of the aisle it should not be a partisan issue. two people who are on you

program a lot scott gottlieb and gina -- when they speak. they have the private sector, public sector expertise and tie it together. we need it in a number of areas. >> yeah. i see your point and not closing the door to all talent and public service. some of this hits close to home for us in financial media. we're not allowed to trade individual securities. i wonder do you think it's about individual securities or holding periods or just sheer disclosure or some combination of all the above? >> you make a terrific point as we go through this, and it was 10 years ago the stock was passed it's time for it to be updated but we're not painting on a blank campus we have people in the media industry, financial services industry, people who are run companies. there restrictions and disclosures. your point around -- versus other what i would say prop

lactic measures is a good one. what we want is we don't want people trading but want to allow people to invest say, for example, on single stocks if you're a senior executive in a company, you have essentially mandatory periods for single stock of you jay powell identified others let's say you want to enter into xyz company. have a ten-day delay from when you make the decision to when the trade is actually executed so it prevents the sort of market timing immediate trading people are worried about those types of thins be done discretionary accounts those types of things can be done i'm not in favor of an outright ban, but i am in favor of transparency and some of these measures. >> yeah, both of those things would go a long way. out of curiosity, jay, how about

family members, husbands and wives? how should they fact he into the discussion a number of lawmakers, they have had family members who have been active. >> this is a thorny issue and in many ways, including for some of you and me, it's a personal issue. my spouse was a professional before i went into government and we determined that she should leave her job i don't think that that should apply in many government jobs, including in congress. we can't ask people who are giving up their careers to come into congress and serve, to ask their spouse to make a sacrifice of giving up their career. there are ways forward, whether it's discretionary counts, clearance with ethics officers and the like here is where i think congress is different than like the s.e.c. or the fed.

>> jay, while we have you, wondering what your thoughts are on some of the floated proposals that your successor chair gensler put out yesterday about enhanced disclosures from private funds and hedge funds and market structure changes that might reduce the delays in execution and things like that. >> on the market structure changes, i am all foreshortening the settlement cycle and using the thenology the technology to improve market function i think the commission is doing a great job pushing that forward, not just in the equity market, but also in the fixed income and treasury market it's overdue it was on our agenda i am very pleased to see it carried through. on the proift fund disclosure and some of these other measures, i need to study them more you know, one thing about information and the government

that i firmly believe is that the government should not be asking for information unless there is a reasonable expectation their going to use it, particularly sensitive information. so i think i need to look at that one more closely to have a reaction >> jay, it's not -- we are not done talking about it. it is a midterm year we will be hearing more in the kpomk months appreciate your guidance good to see you. >> thank you. the markets here as the dow, which was down 288 at the open, now down 77, andheas t ndaq has cut its 2% decline more than in half back in a moment 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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performance for mattel we continue to outpace the industry and gain shares globally for the second consecutive year and in every measured market. we had the highest annual growth rate in decades, free cash flow and more than double earning per share >> that was the ceo of mattel earlier this morning on "squawk box. quarterly beats sending the stock higher, 53 cents crushes 32 revenue up 11 and the guide is good, too. >> 52 week high for the stock.

talk about a turnaround. 18% growth in barbie, which until not that long ago was really the thing that was sinking this stock that offset declines for hot wheels and fisher-price, which goes back to something we were talking about earlier in the hour, factory and retail closures in asia across the board, strong growth expected this year >> yeah, i was going to say years ago i talked to a previous ceo of mattel who said play patterns around the world are all the same for little kids so he is emphasizing the emerging markets growth, which suggests that there is traction there. >> continue to watch the evolution ts ofhiopen the sa&p's down 22 in the wake o cpi. don't go away. you're a one-man stitchwork master. but your staffing plan needs to go up a size.

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good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and mike santoli david david has the morning off. as we mentioned, market set up for a cooler than expected cpi didn't happen. the initial sell-off has reversed a bit, dow's down less

than 100 points and the ten-year kissing off 2%, now 1.98. >> here are three movers we are watching uber beating the street. company's ride hailing business rebounding and seeing strong growth in the food delivery business as well shares up 5.5% twilio surging after reporting a lower than expected loss you can see shares up 13% right now. finally, another name in the green. that is disney a big earnings beat helped by growth in the disney plus subscriber base. shares up almost 6% right now, helping the dow. julia boresen caught up with the ceo. she joins us with those highlights hi, julia. >> well, morgan, disney beating expectations in the top and bottom line. also reporting better than expected streaming growth. the company adding nearly 12 million subscribers to disney plus that's about 4 million better than anticipated disney also reiterated its

subscriber targets for disney plus for 2024. it was the parks division which drove the company's financial strength with record revenue and operating income at the domestic parks despite capacity constraints. that growth driven by higher spending, visitors opting for add-on services like the skip the line service disney genie plus as well as higher prices. >> essentially, we are providing options for customization and personalization so pef people can, if they want to come to the park at a relative value, they can come in. we have kept the lowest ticket price the same the last three years at disneyland and walt disney world we want to give people options if they want to upgrade their package. >> saying they expect the international parks to continue to be impacted by covid-related volatility for the remainder of the quarter but the demand for the parks especially the domestic parks in the current quarter does remain strong

now, their number of bullish analyst notes out this morning j.p. morgan reiterating the buy rating at $220 price target saying tzvi remains our top pick in media we believe the company has the best ip in the industry and has yet to benefit from the flywheel of consumer interactions from d to c parks, theatrical releases which should propel the stock higher long term i kpd about the metaverse and it sounds like he sees the parks as a way to expand those physical worlds into new virtual spaces >> which makes a lot of sense. julia, it was a great interview yesterday. i was curious about the content piece of the puzzle. we saw the strong numbers, stronger than expected numbers, not only for disney plus but across all of the streaming platforms. this idea that general entertainment program is going to become a bigger piece of the puzzle for disney plus, how does that fit into the strategy and not cannibalize hulu

>> well, look, i think it's all part of the same bundle. they are increasingly trying to bundle together disney plus, hulu and espn plus the more people are paying for that whole bundle the idea is they are less likely to cancel their service because it becomes their new mainstream sort of default entertainment service. but one thing that i think is interesting is he talked about how they have to feed the biathletes, how there is this insatiable demand for content and they know they have to spend more for content one area where disney fell short of expectations was in operating income for this direct to consumer streaming business because they are spending more on content even than anticipated. mike >> yeah, absolutely. it's expensive every character seems to get a series we will see the extent of what their ambitions are. thanks again we will talk to you again. the broader market, the losses now over the course of the morning, the s&p 500 touchdown one-third of 1%.

the dow flat the russell two 2000 just about flat we saw the ten-year treasury yield hitting 2% for the first time since 2019 after cpi sees the steepest year over year increase since february of 1982. joining "us" now joe amato good morning to you both guys, i wonder how we filter in today 'cpi number with what the markets have been contending with for months, which is persistently hot inflation and a fed aggressively turning towards the likelihood of multiple rate hikes. the s&p 500 went down from 21.5 to 19.5 at the lows. you have seen more selectivity in the market as investors have also grown more cautious are we there yet so do you think the market has digested what's to come? >> i would say, mike, that the

sort of, you know, continuing sort of backdrop, you know, is that the markets, and i would say it's not only really about the equity market, it's really cross-asset, is treating, you know, inflation and the higher inflation as basically transitory so you are going to get a reaction but i would say more broadly for the equity market, this is really a question about rotation rather than defining moment for the market going down just yet >> and rotation, obviously, having run in the direction away from the more expensive secular growth names into more cyclical and value. are you suggesting that that should continue as we go through this year? >> i think it's been hatching and i think it should continue i think that when if and when

yields start rising, basically, too rapidly, then that rotation becomes a lot more messy because you get out of one thing and then there is hesitation before you buy the next but today, you know, despite the print, the upside surprise, the rotation looks pretty smooth and a lot of the losses are coming back you are seeing the sick acco sick accounts, energy, financials positive so that's encouraging rns joe, how are you counseling investors? i ask that as we saw the dow slide into positive territory. now it's basically at the flat line but off the lows of the morning. >> i think broadly we feel that we're a long way from being done with this. i think the market is going through a very, very significant shift in policy, financial

condition and companies are tight ended and will continue to be tightened whether it's three, four, five, six, seven rate hikes, whatever it may be. these are tightening conditions that we haven't seen in a long, long time. so i this this repricing of risk over the course of the of not just year to date, but back in the fourth quarter is going to continue so we think what we said to clients is be prepared for lots of volatility in 2022 because it's a year of transition and a year of lots of inflection points that are going to be driving financial returns. >> is the risk of a possible recession real here if the fed tightens too fast, especially given the fact that we are seeing really hot inflation numbers, joe >> i think it is i think it is. i think as you think about the meaningful shift in fed policy tightening conditions, as i referenced but if you have got multiple rate hikes and higher energy prices, that could set up '23 as a pretty rough year, and that's not our call right now, but we

don't think the risk is zero because of, you know, the fundamentals that we've referenced here. >> binky, i know you do a lot of work on tracking investor flows and how they are positioned relative to different asset classes. it seems as if many investors, institutional investors, playing defense at this point. what does that tell you about where the markets might head from here? >> i mean, the basic and simple fact is that two weeks ago, on monday, when the market was down by more than 10% intraday, you know, our take is basically there was a pretty complete sort of capitulation in terms of investor positioning but if you look at the institutional side, if you look at the retail side so, you know, our measure of equity positions, put us down at 20th percentile and, you know, when you are down there, obviously, you can still go

lower, but the risk/reward turns, you know, distincty positive as we've basically seen all i'm saying is that as far as investor positioning and flows is concerned and the risk of it kind of already happened and it's already in the positioning. the market is already pricing in, basically, in terms of positioning, it's pricing in an ism in the low 50s so pretty significant slowdown from where we are currently. >> yeah, maybe accounts for a bit of the cushion we have built up since then, s&p up about 8% from the intraday lows binky and joe, thanks very much. >> thanks. as we head to a quick break, our roadmap the rest of the hour, peloton's bumpy ride the new ceo's meeting getting crashed. details next plus, travel stocks getting a boost amid easing mask mandates expedia hitting an all-time high after the bell. >> and the ceo of kellogg on their latest quarter as well as

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those travel-related stocks that have had stellar runs since the depths of the pandemic going back to 2020 if you look at stocks like marriott and expedia, both which hit record highs in yesterday's session, expedia another record high today we could add gains if these continue on pace for the most part, many of the travel-related stocks fall under the consumer discretionary sector some of the best performing leisure names hotel operators like hilton, up 43%. mgm resorts up 32%, royal caribbean up 31% stock picking and travel stocks has been big way for investors and traders to bet on the recovery, some investors are using efts to take that view one the bigger ones out there is the invesco dynamic leisure and entertainment etf, a mouthful. the ticker is pej, a $1.3 billion eft that counts stocks like booking holdings,

expedia, marriott, live nation among some of the top holdings the etf managers group, ticker away, away, get it it's a $270 million fund so smaller, but it holds names like expedia, booking holdings as well as stocks like airbnb and uber so there are ways for investors to play through the eft. by the way, morgan, expedia just hit a record high in trading today. expectations are pretty high going into the big earnings report after today bell. >> that's right. dom chu, imparting the eft knowledge, thank you on a quick programming note, tied to that, tomorrow morning at 10:00 a.m. eastern we will have the ceo of expedia, peter kern, on the show. don't miss that. well, turning to the latest on peloton, a virtual meeting yesterday meant to introduce incoming ceo barry mccarthy did not go as planned. it was halted after former and

current employees outraged by layoffs took to commenting on a chat function touring the ming joining us now lauren thomas wh has just been breaking story after story around peloton as it's going through this tumultuous time. what exactly happened here and how were ex-employees on this meeting? >> yeah. thank you for having me. so, essentially, what happened is peloton did hold this all hands meeting yesterday. that was the day after they reported quarterfinal results and this is a typical thing for the company to do these meetings the day after those results come out. this event, obviously, you know, was more highly anticipated as others have been as peloton was introducing its new ceo barry mccarthy to the entire employee base now, i learned that there were some laid off employees that were able to gain access to that meeting. it's not exactly clear how that ultimately happened. but again you could see in this chat section just some angry

comments beginning to circulate about, you know, just how these people feel about the company. as you can imagine, employees that were just laid off might have some bitter feelings towards peloton. now, to be fair, you did see some comments coming through of people really optimistic and supportive of barry mccarthy, incoming ceo, and what he can do to, hopefully, right the ship at peloton. a day earlier i also obtained an email that barry mccarthy sent to peloton employees where he really laid the groundwork for his vision of a turnaround and what he can do at peloton on multiple occasiones in this email he said that peloton is positioned to be a comeback story, the great comeback story post-covid so that's how he feels coming into this position again, you know, peloton announced about 2,800 layoffs earlier in the week. that's 2,800 people circulating in the work force now looking

for jobs and, you know, might have some harsh feelings still towards the company for how they handled the layoffs. >> given the dramatic rise we've seen in the stock this week, although shares are under pressure this morning. we can talk about the supply chain issues, talk about waning consumer demand, changes in executive leadership but how does the situation also speak to what might end up having to be an overhaul in terms of corporate culture as well >> yeah, absolutely. i mean, i think that this, you know, what really shook out during this meeting that really speaks to yet another item on barry mccarthy's to-do list, right, and that's improving company morale you know, i have heard from multiple folks that still work at the company who, you know, are considering other jobs you can only imagine, i am not in this position myself, what it's like to work there right now when you have lost so many of your co-workers i mean, i think that the entire company is going through a bit of a reset right now, trying to figure out, you know, what

priorities are moving forward. that's again barry mccarthy's job to kind of set the tone. but he said in this message that he still plans to work very closely with john foley, obviously, the peloton founder and former ceo so, you know, again, morale very important, right and i think you nied that, arguably, to have that really strong employee morale before you can do anything else and be successful as a business so can only imagine that will be top of pbarry mccarthy's to-do list. >> lauren thomas, thank you. >> thank you. let's check shares of coca-cola. topping earnings expectations, up 25% over the last year. just a couple of pennies shy today of an all-time high. coming up, investing in nbas howard business school dean. john rice told us b school graduates still struggle after their degree, it's about who you

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. welcome back to "squawk on the street." we are focusing on diversity, equity an inclusion, discussing pathways forward to higher level executive positions in the work force. joining us anthony wilbon, howard university school of business dean. great to have you with us. thanks for your time >> thank you, carl, appreciate having me on. >> howard and a lot of hbcus have done a lot of good work lately trying to accelerate the pipeline to executive leadership sort of paint the picture of what is happening right now. >> well, i mean, i think there is -- i think all the companies in the country realize there is

a need to havthe work force, particularly the executive levels studies demonstrate that companies that have diverse executive leadership have an opportunity to outperform the competitors at a greater scale the need is there. there is a financial recognition that the profits are impacted by not having a diverse leadership. so they are coming to us with -- trying to find answers to that a couple of companies have made significant investments at the howard university business school to address those needs and create pipelines, our kids directly into the executive suites a couple in particular, we had marriott invest in a center for hospitality leadership, which is going to be zbliend to pipeline students directly into the leadership levels of the c squooet and hospitality, which is having a huge problem with diversity, although it's diverse at the lower levels. when you get to the executive suites, less than 5% of the ceos

are african american or minorities and so this is again across all sectors where this is happening. >> what i think is interesting about it is that it starts, if i am not mistaken, the marriott foundation's program starts the freshman year. so you are not in a situation where you are in your junior, senior year, starting to think about what comes next, and then you get started on this process. you sort of plant that ceda lot earlier. >> absolutely. and i think what's important to note is that the pipeline is incredibly important you have to get the students early in their careers ads they matriculate through the system and understand what the opportunities are. freshman year is a perfect time to do that they are figuring out exactly what majors they are in, trying to understand exactly what career they want pursue we built this program with marriott, we tap into the freshman early and we are going to put them together with mentors in the industry, senior-level moentors, specialized internships after

their freshman year so they can get an idea about the operational functions. by the time they graduate, they can jumpright into the management levels. one of the things in the past, students particularly in hospitality once they graduated would go into low-level operational jobs and try to work their way up we are trying to bypass that and give them operational experiences while they are undergrads and then launch into more management roles by the time they graduate >> we pay a lot of attention to diversity within financial services for obvious reasons i wonder how you think about diversity within banks and whether or not success there is some sort of super powered look at true success overall. >> yeah. so again similar to what we did with marriott, we created a center for financial excellence. the issue there is that again the dearth of minorities and african americans and other people of color in the private equity space what we have is a very low

number of folks that are in that space. i heard you mention, talking to mlt, they will be helping us to get folks in the alternative financial sector the challenge is that they have been targeting most of that sector has been targeting certain schools for a number of years, harvards and the chicagos and those kinds of things. so our students have not been able to find that pathway into the private equity banking wealth management space. similar to what we did with hospitality, we are trying to build a program to give the students those experiences through workshops and bootcamps and specialized internships to launch into the senior level spaces, executive suites of hospitality. i think it's kcritically important to have a ovoice when we get in the room of these investment strategy meetings and i think that program we are creating will have an impact not only for howard, but the hbcu landscape. we are doing things with apollo and oak tree, finance program

they created through a $90 million investment >> we look forward to watching that evolve. hope you keep us updated such an important topic. appreciate your time thank you. >> thank you, carl appreciate the invitation. after the break, we'll speak with the outgoing ceo of america's largest military ship builder, huntington ingalls industries, about ongoing geopolitical tensions and what that might mean. plus, the latest quarterly results. we're back in two. most. plus, zero-dollar commissions for online listed u.s. stocks. [ding] get e*trade and start trading today.

welcome back i'm rahel and here is your cnbc news update. laguna beach, california, a brush fire fueled by strong winds is prompting evacuations so far no homes have been damaged. the cdc is moving to lift

its recommended dosage limits for opioids used to street chronic pain doctors will instead be encouraged to use their best judgment proposed guidelines also urge doctors to try non-opioid therapies first for chronic and acute pain. donald trump is denying a report that he flushed documents down a white house toilet. he says that it is categorically untrue an upcoming book says that the staff in the white house residence sometimes found ripped up paper clogged in the toilet. and more economic fall lout, a key bridge linking the u.s. and canada again motors has canceled a shift because it doesn't have enough parts gm canceled a shift yesterday. moments ago the governor of michigan called on canada to reopen traffic. you are now up to date mike, back to you. >> rahel, thank you. markets wobbled this morning, trying to regain

footing following the highest cpi reading since 1982 our steve leishman has more. hi, steve. >> hey, mike yeah, the hotter than expected consumer price index causing markets to expect more aggressive federal reserve rate hikes with faster and more hikes priced in for this year. the chance of the 50 basis point rate hike now at 50% it's going back and forth, 50, 49, 48, 47 and that's up from 30% before the cpi number the fed hasn't hiked by 50 basis points since june 2000 that's all because yearly inflation in january surging to a new 40-year high at 7.5% core rate also importantly up 6%, up both measures, rising 0.6 on the month there wasn't much in the report that suggested prices could be peaking or there could be any relief on the way. just some downturn in hotel prices, probably due to omicron and maybe some relief on autos with new car prices flat that's the end of the good news

because used car and truck prices up 1.5% 40% year over year energy up nearly a percent along with food and that's 27 and 7% year over year housing starting to get into the mix here up 0.4%. and that's a big part of the cpi. so that 4.1% year over year helping drive. markets at a rate hike at all but one of the remaining meetings for a total of six by december it used to be by february. and that would bring the funds rate to the 1.5, 1.75 rates for one of the fastest rate hike sequences we have seen in a while. i am sure the fed doesn't want to do the 50 at the first meeting. here is the thing. if the market expects it and it's not a big surprise, the fed may just decide to take that flexibility from the market and deliver what the market expects, morgan. >> steve, thank you. geopolitical tensions rising

as russia begins military drills in belarus could 2022 be a year of heightened defense spending. outgoing ceo of huntington ingalls industries, mike petters. mike, great to have you back on the show >> great to be with you, morgan of the thanks for having us. >> quarterly result and what we can expect this year first, i want to start with your assessment of the geopolitical landscape right now. obviously, the russia ukraine tensions are very much in focus. we can speak to what is happening with a series of missile tests in north korea, possibility of a deal in iran as well right now how would you assess the geopolitical landscape and what does it mean for the company >> you know, morgan, thanks for that i think just going back to something i was told early in my career, that whatever we want to do with security and how we want to invest in it, at some point the rest of the planet gets a vote and i think what you see that

the rest of the planet is voting and so i think national security is going to become a front and center issue it has been the last several years. i think it's going to be a front and center issue going forward and we feel like we've positioned our company to play pretty prominent role in that effort. >> and i want to get it the details around that role first, the fact that we have a u.s. government -- we have passed -- the government has passed, the congress passed a defense bill, a policy bill, but has yet to actually fund that with ongoing continuing resolutions. looks like we will get another one through the senate next week as well. these temporary funding measures, how does it hinder your ability to continue building out some of those military ships and what does it mean for military readiness? >> well, it's a self-inflicted wound, in my view. we have a process that looks for a budget at the beginning of october. we have a machinery industry

defense security environment that plans on a budget at the beginning of october, and then here we are in february. we still don't have a budget you know, it seems that the sense of urgency about getting it done in october, we have notten so used to not getting it done in october we have kind of gotten used to it. i think i may have mentioned before that if this were a private enterprise, we would incentivize in october budget and funny thing about our sector is that if you incentivize it, you get it so we need to get back to that regular order. i wish i knew how to do that, but this is not helpful to any of us, any of the stakeholders in national security. >> inflation is front and center this morning for investors after that hotter than expected cpi number looking at huntington ingalls results this morning, margins have decreased year on year. looks like a softer margin guide for 2022 as well how has inflation, whether it's

labor, whether it's supply chain issues, impacting national security in your business? >> well, for us our contracts as you know are pretty long term. so we are able to lock in some pretty good rates across all of our products and across our work force is a pretty predictable. inflation as a direct result on our results is not the largest factor yet what i would say for us this year in terms of the guidance, it's really more about the product mix and where we are in the maturity of our programs as they mature over the next, you know, in the '23, '24, '25 timeframe, you will see opportunities for margin expansion again. >> aircraft carriers, you have the most, i believe, at newport news shipbuilding now and a number of decades. some analysts are questioning whether large aircraft carriers

are going to be need inside the future given the fact that war fight something changing, and things like space-based assets and hypersonic missiles and drones are becoming a bigger piece of the puzzle. what do you say to that? >> well, first of all, i think a lot of analysts look at this in a binary fashion and see either/or. it's really, i think, more of a this and that. and i think they go together the ford class is just a tremendous platform. it's the most powerful platform put to sea its capability to expand over the 50-year life into those new technologies and bring them to bear wherever we need it whenever we need it is going to be something that will be very valuable to the security of this country for decades to come. and, frankly, the last thing i would say, if aircraft carriers are so bad, why does everybody want to build them let's keep building what we already have.

>> aircraft carriers are just one of the vessels you build you have been making a lot of investments in awe tonmy, whether it's underwater investments, underwater drones, essentially, or above -- on surface, i should say, autonomous ships as well how does that mix continue to evolve- evolve and what does it mean for the future of huntington ingalls' business and how it should be assessed by investors? >> i think huntington ingalls, we are in the business of national security. if you think about where national security is going to go over the next decade, it's going to be in the areas of unmanned and autonomy it's going to be in the areas of artificial intelligence. it's going to be in the areas of c 5 isr. it's going be to the areas of enhanced and synthetic training for our sailors and our soldiers that are in harm's way we have spent a tremendous amount of effort the last several years positioning ourselves in those areas, and

again it's not a either/or circumstance you take an unmanned platform and you augment and amplify the capability of a manned platform, you have just now brought, you know, several times the amount of capability to the space that you would have had before when it was only unmanned, and it's a significant difference than just having an, you know, a platform there. so we think national security is going down those lines we are a national security company. we are very proud of our position we have a leading position in the unmanned autonomy space. also a leading position in the artificial intelligence space and in the synthetic training space. we're expanding our c 5 isr footprint across -- around the world right now, and of course we are going in a dominant position with our platforms supporting the navy. we think the skp is very well positioned to move ahead not just for the next year, but the

next decade. i am excited about what we have done here. >> mike petters, the outgoing ceo of huntington ingalls industries thanks for being with us you have been at the helm since huntington was spun out of northrop grumman in 2011 stock has quintupled under your leadership. >> thanks, morgan. it's been nice working with you all and i look forward to watching huntington ingalls succeed the next ten years. >> thanks. big show coming up on "techcheck" today. an interview with patrick spence shares up 8% above the 50-day for the first time since november and the ceo of binance, announcing this big investment in forbes. coming up at the top of the hour as the dow goes green, the mt stoney goes green and the s&p not far behind you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria.

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this toilet won't quit it's fine. s&p's recovered the early losses it was down more than 1%, now

just about flat. here is a check of the top gainers on the morning for the s&p 500. international flavors and trade, wa walt disney, micron, mosaic, and franklin resources rounding out the top five after the break, a first on cnbc interview with the ceo of kellogg. going to talk eainrngs, their earnings beat, inflation impact and a lot more we'll be right back. (doorbell ringing) - it's the truth though-... ...-and then what happened? - [announcer] pizzahhh: when the pie, you know and love is still the pie, you know, and love.

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. kellogg is out with an earnings beat despite a challenging operating environment. they site cyclicals like high inflation, supply chain disruption and a labor strike in four of the company's u.s. manufacturing facilities ceo steve cahillane to talk about the quarter. street knew what you were up against. i am not sure they counted on you pulling it out like this >> well, thanks, carl. great to be with you i am really pleased with the way the team came through in the fourth quarter you mentioned the on going labor strike the strike is over we got through that at the end of the december. it lasted the entirety of the fourth quarter delight today have our people back they are pack in full production, trying to ramp up

and recover inventory. it was a terrific performance. the rest of the portfolio really stepped up and delivered our snacking business, international businesses, our frozen businesses all performed very well to make up for what was a very, very challenging cereal quarter. >> yeah, i mean, before we get into price and mix, what is the situation on cereal right now? you talk about momentum in snacks, and momentum in emerging markets. what about core cereal >> well, core cereal was affected in the fourth quarter because of the quarter long labor strike to be sure. and for 2022 what we're really looking at is the first half of the year a recovery of our inventory, a recovery of our distribution, a restoration of our commercial plans, which will lead to a back half of the year that sees growing momentum in our cereal business and a real return to normal but it was an unfortunate circumstance, a challenging one for us, but as i said, the rest the portfolio stepped up more than made up for it, and, you know, when we get to the second

half of next year you will see the type of performance that we know our cereal business and great brands are absolutely capable of >> steve, talk a little bit about how you are absorbing the cost increases, what your trajectory looks like in terms of potential price increasing for last year, you saw a very, very strong performance on price mix. mostly driven by price that was really accentuated in the fourth quarter we are still seeing double digit cost inflation in the q4 obviously from across packaging, ingredients, labor, freight, ewe name it. it's pervasive and it's ever where. we'll see the wrap around benefits of the pricing we took in 2021 into 2022 and we'll always evaluate the environment to see if there's more that we need to do, but our goal is to cover all of those input costs with pricing and productivity and we think we're in a very good shape to do that. our brands have responded

incredibly well. price elasticities have been at historical lows. it's been very inelastic but we're cautious as we look forward. we always keep the consumer at the heart and soul of everything that we do we don't want prices to get too high but we're in an environment where it's broad based, it's across everything, but we've been able to cover it. our pricing performance has been very solid. >> steve, i'm wondering how you're thinking abpotential m & a in this environment right here, filling out the brand portfolios perhaps and thinking about some very narrowly based food-related ipos of last year that really didn't do that well. sort of companies without scale but maybe with a brand and a plant-based area and wonder if any of that is on your radar >> yeah. you know, when we look at our capital allocation, we're very pleased about the way we exited the year with very strong cash flow and delevered balance sheet. so our leverage is lower than it's been in several years so we've got dry powder to think

about additions to the por portfolio, if they add share owner value. if you look at our portfolio and what's really doing well, it's snacks, wellness, emerging markets. if we see opportunities to add to our portfolio, we'll look at it but we're very disciplined when it comes to price and of course always be on the lookout for opportunities that would add value to our portfolio. >> you mentioned snacks and wellness and we were talking about cereal a moment ago. you seen a direct correlation between a shift in consumer eating habits and what they're grabbing for on store shelves in pandemic and lockdown mode versus reopening mode? >> you know, we're seeing a lot of the same things we have seen over the course of the last 18, 24 months continued bifurcation of the consumer. well zns a growing segment, but there's nothing like snacking. look at our snacking performance in the fourth quarter, it was over 20% in north america. that's really heady growth for

brands that are quite big. so people are very much treating themselves to snacking occasions throughout the day as mobility comes, we're seeing different snacking occasions that were in the past much more on the go start to return to where they were -- not where they were pre-pandemic, but better than they were last year. so we're seeing growing trends in snacking across the world that really sets up for our portfolio very, very well and it was the key driver in our fourth quarter results. >> steve, when do we move on from a period where you're trying to take price inagoraget and get more inventive on things like packaging size, marketing spend, sg & a, those second round cost saving initiatives? >> yeah, carl. so, we're in an environment like i said where the consumer is still been very resilient, but we're very mindful of that and so, we always say that productivity is our first line of defense against inflation

but we're seeing the type of inflation that we're seeing you do have to go through the whole growth revenue tool kit. part is price but the other things you mentioned promotion management, trade management, making sure that every dollar that we spend is getting a return for us. and so, you know, it can't be just price it's got to be the full tool kit of what we look at, but we're not looking at reductions in advertising and promotion. we are very firmly committed to continuing to support our brands to make sure that, you know, from a share perspective they perform and that they're very healthy. but to your point, it's the whole tool kit of productivity across the patch that companies are going to need to look at in inflationary environment like we're seeing we're seeing growth and inflation in the coming year on the back of what we just saw last year. so it's really quite significant. >> interesting you know, and of course we were checking in on you well into the early period of covid where shortages were so dire and so obvious that it was literally

bare shelves are there lessons from that period that are really being incorporated now and paying off? >> yeah. to be sure and it's about resiliency of supply and so, we've had to make sure that we've got a lot of different options when it comes to ingredients, when it comes to packaging, when it comes to transportation and so, that continues but i think the muscles that we built early in the pandemic are serving us well because the unexpected keeps happening what's happening in canada and the border crossings and so forth. there is a continuation of this unexpected disruption in bottlenecks that continue to build agility and creativity in supply chain is absolutely fundamental to make sure that we can continue to have full shelves and inventory in a position such that we can make sure that we're there for our customers when they need us. >> yeah. definitely we're getting some disruptions in the auto sector today on the canada news

steve, appreciate it very much good to see you again. steve cahiline from kellogg. aswe head into tomorrow morning, we'll be live in los angeles ahead of the super bowl on sunday talking everything from the ad market to viewership to gambling and a lot more 'rba io sst.nt tmi i wee ckn two.

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welcome back to "squawk on the street." we're keeping an eye on spacex and so is nasa spacex was previously approved for 12,000 satellites in its broad band starlink, but now the company is seeking authorization for its second generation expansion. constellation would nearly double the number of tracked objects in orbit but that's not the only reason spacex is in focus today either because elon musk tonight is getting ready to discuss starship from the company's star base in texas. this will be the first update on the megaspacecraft in over two years. so, reporters such as myself, mike, will be up very late tonight. and i would also just put a reminder out there, that you can listen to the latest episode of my podcast, "manifest space"

which has rocket labs ceo and founder peter beck this week >> will do, morgan, yeah stay up late but you'll be here tomorrow i know that. bright and shiny. >> exactly bright eyed and bushy tailed that will do it for "squawk on the street." "techcheck" starts now ♪ ♪ good thursday morning, welcome to "techcheck. i'm carl quintanilla with deirdre bosa, and jon fortt and julia boorstin with us for the feed tech is trying to claw back early losses after a sharp drop following that harder than expected inflation number now at the highest level since '82. ten year has gotten back above 2% and financials and energy are leading as a result. disney does bring the magic back