good morning the "i" word yes, biden is calling it an invasion we'll talk about the potential market impact. lowe's set to report we'll bring you the first. and elon musk is acocusing the biden administration of

ignoring tesla it's wednesday, february 23rd, and "squawk box" begins right now. ♪ good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe kernen. becky is off today nice to see you, joe. >> we're here. >> let's start with the markets. >> we survived yesterday, right? >> what did you say? >> we survived yesterday, 1% that's not too bad. >> not too bad, not too bad. major indices each down 1% with the dow falling 480 points s&p 500 dipping into correctio territory down more than 10% from its record close from january 3rd of this year take a look at where things stand right now. we've still got 3 1/2 hours to go right now things would open up by 200 points. s&p 500 up about 30 points

treasury yields, though, always something to keep an eye on. we're going to flip the board around and show you where things stand. right now you're looking at 1.967 on the ten-year. >> but we are a -- you know, that's us right there. that's -- that's us. even yesterday, even as i was sort of talking to different market strategists and saying, you know, it's interesting because previous market strat jits that were on only voted ukraine in the context of what it's going to do to the fed and interest rates here, and i was trying to get them to say, yeah, that's sort of interesting and ironic i saw jeremy siegel and he said, yeah, that's exactly what i'm looking at in terms of what's important. >> it's the only thing at the moment. >> as long as it's not a brand-new cold war that destabilizes not just our relationship with russia, which is not obviously as important, but we referenced that

yesterday. what about china what if china throws in, you know, its lot completely with russia and russia goes further than any of us think and then it sets up really a -- you know, a diametrically opposed major super power? that could be bad for the global economy you would think. but so far maybe we're not seeing that. it's still -- we'll see, the eastern regions. new cases plummeting 90% from a pandemic record that was set just five weeks ago. the u.s. average of 84,000 is down from the high-water mark of 800,000 on january 15th. and hospitalizations have also fallen sharply and the death toll which typically lags arise by seven weeksalso showing signs of easing a report says apple will no longer require customers to wear masks when visiting stores in

states where protocols have been eased. this is bloomberg that is recording this masks will still be required in states where they have not changed or relaxed their protocols. the capitol bracing for trucker protests this will be similar to the disruptions in canada. police in maryland, virginia, washington, d.c., they've been monitoring truck protest groups, approving 700 national guard members and 50 large vehicles. one is telling one affiliate they plan to shut down the highway today. vaccine mandates, critical race theory, and the jailing of people facing charges related to the january 6 insurrection others are planning protests,

convoys orange nating from california, d.c., ohio, and north dakota. >> we didn't talk about that much yesterday i thought for a second to say something tongue-in-cheek, but i didn't want to get you going i was going to say something like, well, who knew there would be the emergence of a dictator in 2022. and then i was going to say, and then there's also putin. get it >> rim shot. where's our -- >> also -- but i didn't say that i'm not going to. >> you just did. >> i said what i wasn't going to say. so you can't respond in any type of -- you know, hostile way because i said i thought about saying that, but i didn't. stocks to watch, barclay shares rising in london they came in at 1.1 billion pounds a fullyear net profit also bea

expectations thanks to strong performance from the corporate and investment banking divisions. and shares of "virgin galactic" are higher the company lost 31 cent as share in one quarter that wasn't as bad as the 35 cent loss analysts predicted shares of palo alto network hi networkis earnings higher. i'm not sure i could get anywhere anymore if they shut down my gps on my google maps or something, i'm not sure i can get home anymore. do you know how you do that? you know how you put your own phone numbers in and everyone

else, i don't even know phone numbers. >> don't you think gps is one of the most transformational technologies of all times? >> i do. i always say how iphone changed my life, especially if i go to los angeles and i was stuck on a freeway. i see an exit, no, no, i can't do that. i'll never -- now i'm driving through places, hey, shortcuts, you wouldn't believe, and it makes it a lot better. it spreads everything out. >> okay. >> how quickly do you think -- that must be on like a -- that happened one time, andrew, like 12 years ago. >> you look the same. >> i was driving a car that the company might go public. that was like a 12-cylinder porsche in traffic. >> let's talk about earnings

adjusted shares of $1.78 beating estimates of $1.71 revenue. $21.3 billion. that's above current and wall street consensus marvin ellison is going to join us on "squawk box" in just a little bit at 7:00 a.m. coming up conversation you don't want to miss we'll talk about what's going on people doing home improvements and the like we talked than yesterday. coming up, president biden calling out russia's actions we've got tadeils next you're watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird. visit baird difference dauchl.

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president biden addressed the crisis in ukraine yesterday. he called russia's actions the beginning of an invasion and announced sweeping sanctions a president said nato will continue to operate in a defensive capacity also warning russia about taking further steps. >> as russia contemplates its next move, we have our next move prepared as well russia will pay an even steeper price if it continues its aggressions including additional sanctions. >> president biden acknowledging gas prices would likely rise as a result of the conflict but would limit the pain the

american people are feeling at the gas pump we're seeing crazy prices out in california $4 here in places. when's the last time you took a car out? have you ventured out? >> last weekend i had to get some gas i think i was paying about -- high $3.87 maybe. >> $3.87 do you get $8 worth for where you're going or do you keep your tank full? what do you do in. >> i keep it full. it goes so quickly i have to say, i have become more enamored with the idea of an electric car every passing day. >> i have no doubts about that where you just plug it in and it's like, whoa, ready to go >> plug it in. why waste time to go to the gas station. think about that. >> you don't go far away you don't drive like a 12-hour drive typically, do you? >> no. an hour or two.

>> yeah. >> but meantime let's talk about some of the market impact on the rising tensions in ukraine, the major indices each losing more than 1% with the s&p 500 now more than 10% below its january 3rd record close, landing that index in correction territory. for more on that situation we're joined by the president and ceo of atlantic council and covering others, greg branch. fred, lay it out for us if you were playing the prediction game, which i know is a dangerous prediction game to play think through the permutations of what happens not just through russia but perhaps, you know, depending on what happens with china, how this could all go, and is there a game of dominos here a dangerous game of dominos? >> i think there's no doubt that president xi is looking at our response to yukraine saying if

the eu and the united states don't stop putin and ukraine, do i have to worry about anything in taiwan. he's not going to do a full frontal military back on taiwan either, but he'll see the hybrid approach, the cyber approach, and see whether the west can actually have any sort of lasting wave don't forget president xi and putin a couple of weeks ago did a joint statement on the first day of the olympics. 5,300 words, orwellian parts of it the bottom line is this is the first time the two leading authoritarians have come across. that's going to influence technology standards, influence international bodies some of what's at stake in ukraine is much larger than just ukraine. >> hey, greg, you know, when fred says that, i think a lot of

people hear that and they get anxious. but right now the markets and investors don't seem to think that this is dare i say that big a deal i seem to be much more focused on the federal reserve is that right? >> i'm not sure that's the case. i think what you're seeing is the market is relieved that there are very few or direct energy sanctions that's the inflationary part of this the inflationary impact is what the prices will rise to most predominantly in europe. certainly we'll feel some effect here the inflationary effect is the areas are relying on input like metals they further exacerbate inflation here as they further impair the supply chain. so i think we're going to teeter on this every day, andrew. right now we haven't had our president come out and say

anything explicit about energy sanctions, and i think that gave the market a bit of a respite. >> but, fred, are you surprised? i know you're not a markets man per se, but you've been living around the world quite some time is the market taking this seriously enough >> yeah. i never quite understood how the market prices were a geopolitical risk. but president biden is nation the greatest geopolitical risk of any president in years. it's not just russia and ukraine, china and iran. they're not going to stand by and just watch that. the u.s. still looks pretty good on theenergy front, i think th question is more the u.s. putting on energy sanctions and more if the sanctions get tougher and tougher on putin,

will putin shut off energy to western europe they put themselves in that position by shutting down nuclear. we've only also seen the beginning of the sanctions i think yesterday was an incredible start and a good start. but the next steps as i hear it from u.s. officials will be going after more knee-jerk russian banks, and it will also be going after semi-conductors, chips, things that -- it's things that a u.s. license -- it's not just what it makes. this is what was done during huawei that could have a real hit on the russian economy. i think you could see what the russ

russians' impact is on that. >> what do you think of that, greg >> maybe that shouldn't be the case i think this will not be as lasting in nature as what we will see from the fed and given what james bullet said last week that the interest rate will be 1% by july 1st i fully expect 50 bips mid-march and i think that combined with the inflationary we'll see for february, which i think will be higher than consensus expects. the decelerating corporate earnings growth, we're going to see it across many sectors of the economy as well as the bottom line challenges should be what we're mostly focused on, but in the short term, will be driven by this and putin's countermoves, i agree, will largely determine where those prices go and the secondary inflationary effects we're talking about. >> okay. we're going to leave the conversation there fred and greg, we want tothank

you both. coming up, elon musk calling out the biden administration for, in his words, pointedly ignoring tesla we have new details from his email exchange later marvin ellison, ceo of lowe's will break down the latest quarter "squawk box" will be right back. >> announcer: this cnbc program is sponsored by truist securities event planning with our best business unlimited plan ever! with 5g ultra wideband now in many more cities and up to 10 times the speed at no extra cost, the downloads are flying fast! verizon is going ultra, so your business can too.

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welcome back to "squawk. in an exchange with the ceo of

tesla, elon musk, he's accusing the biden administration of ignoring tesla he said, if you were invited to speak at the white house, quote, they would have nothing to worry about. i would do the right thing now nbc has contacted musk musk says, quote, the notion of a feud is not quite right. biden has pointedly ignored tesla at every turn and falsely stated gmy leads the electric car industry when, in fact, tesla produced over 300,000 electric vehicles last quarter and gm produced 26 the public outrage and media pressure about that statement forced him to admit that tesla does about, in fact, lead the e.v. industry.

a white house official praised tesla on tuesday in an email to cnbc saying tesla has done extraordinary things for electric vehicles and that's a big part of why the whole industry now knows e.v.s very the future well, i don't know, joe. i mean a lot of this came about, frankly, because we -- how many times did i have to can pete buttigieg on this show, what is happening here this makes no sense. and then mary barra, a deal book, why are you going to these meetings >> you immediately said what it was all about, the "u" word. >> the unions. it's been a union story. that's underneath this >> democrats and unions, you're not going to -- you're not going to -- that's never going to change, you know that. that's never going to change. >> it doesn't make sense, though, and i've made this point with mary barra and aisle make it right now

if you go and do the math, it appears that tesla employees, in part based on the stock, so it depend os china way the stock goes at this point, in part, based on the stock, they're paid better than gm employees, benefits and everybody else included >> you said that about starbucks. there's a lot of places where that's the case. there's a reason -- >> absolutely. >> -- that membership has dropped. maybe it's rising a little now it used to be a real number. it's single digits now. coming up -- we don't want to make anyone feel bad. i play a neil young song, i'm a union man. i play that aroundnd play alongh neil young. >> on spotify? >> on spotify. he's back in bag way. stocks are surging, but is

the cost too high? that story's coming up. as we head to bring, here's a look at s&p 500's winners and losers >> announcer: executive edge is sponsored by at&t business, keeping your business connected. . oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee and get the best deals on every smart phone.

alright, so...cordless headphones, you can watch movies through your phone? and y'all got electric cars? yeah. the future is crunk! (laughs) anything else you wanna know? is the hype too much? am i ready? i can't tell you everything. but if you want to make history, you gotta call your own shots. we going to the league!

good morning and welcome back to "squawk box" right here on cnbc. take a look at the futures dow up about 176 points, nasdaq about 135 points and the s&p 500 about 25 points. joe? >> red-hot inflation and ongoing supply chain issues, how should investors play that sector it's weird because i hear that word and, boop, i see dom chu. you're a brander you're a brander extraordinaire.

the domino joins us now. that was from james bond domino -- >> "thunderball. she was one of the bond girls in "thunder ball. i think it was anyway. anyway, i'm going on the coattails of other dominos before me. there's the increased focus on inflation and data points like retail sales and consumer sentiment become a lot more important in understanding the dynamics behind the state of the consumer so in that spirit the folks over at y charts, they take a look at the consumer discretionary sector and how the retail sales interact with some of the stocks now. there's the retail sales figures andthe ticker xly which tracks the sector if you look at this over the course of the last 10, 20 years, the two are highly correlated except in periods of economic

downturn like here with the great financial crisis and here with the pandemic. the correlation has turned here. the reason why we want to look at that, the discretionary stocks that are most closely correlated are 2001s you want to look at. according to y charts data, companies like poolcorp, domino's pizza, and the home depot, they track pretty closely to each other. other names that are not tied to the correlation are companies like ford motor, tapestry, and ralph lauren as well these are some of the data to keep in mind as investors look to play or look at the current environment. retail data from the economic standpoint is a lagging piece of data, but sometimes they track pretty closely y charts looked at that, and that's some of the data they

came up with, joe. >> you do get nervous? i heard you say bond girl. i don't really think that's appropriate. i think bond person is the preferred. and then i thought, you do remember mark haines and kathleen heayes >> i remember her. i worked with her. >> they used to call her the bond babe. >> i don't think i would use that word. >> the late great mark haines would be canceled so fast. we've been taken to great places i think we've got things squared away much better now i think you agree with me, don't you? >> i would say yes. >> you get a little bit nervous. thanks, dom. >> no, not at all. >> you're ready to talk about things like this okay. >> i'm ready if you are, joe. >> that's very dangerous. >> i know. >> let's get going

thanks, dom. >> you've got it. coming up, sports gambling surging in the state of new york, but is the cost of acquiring new customers too high that's next. plus lowe's earnings are out we'll talk with ceo marvin ellison on our cnbc inrvw.teie you can listen to us live any time on the cnbc app we'll be back. >> announcer: sector nomices is sponsored by sector spdy etfs. ♪ ♪ it's electric... made extraordinary. ingenuity... in motion. it listens, learns, adapts and anticipates your every need. with intelligence...

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welcome back to "squawk box" this morning it's 6:36 on the east coast. nasdaq up 145 point, dow up 185 points and s&p 500 up 28 points. i don't know, joe, what they're going to decide they're doing, but system of the news between russia and ukraine but wti crude right now at 91.57. that's down just marginally. joe, what do you think >> great leap of faith are we ostriches do you think? do we think, okay, is this a minor incursion? is this the minor incursion that president biden was talking about that's not so bad? maybe it's okay. >> i don't know. the thing i worry about -- we talked about it yesterday. i was asking questions in the

8:00 hour. it's just the idea of if something bad happens, what kind of retaliation there could be, especially in the cyber world. and i'm not sure we've totally got our hands around what that could mean it may not be some kind of physical war if you will, but a cyber war could have real impact and real extension, cost globally. >> that's why if we have more kids, either one of us -- i don't know you probably still could, right from the start we should get in to security, cyber security, just like from grade school. just start -- go to the high school for cyber security. that's going to be a burgeoning industry forever, don't you think? what's your degree in? cyber security. >> right it used to be you would tell your kid to be an engineer first. then they were supposed to take mandarin do you remember that every kid should take mandarin now you're saying cyber security.

>> cyber security. i remember when people said study chemical engineering it's like, you study chemical engineering. that is hard that is hard that is hard you're not going out you're not going out at night. you're not going to enjoy college. but we need those people and i admire them greatly, mechanical, civil, all of them huge numbers from mobile gambling the super bowl accounting for a quarter of the bets in entire country. the mad rush to sign customers has resulted in huge bonuses for new users, and some analysts are questioning the strategy joining us now for more is tom rogers, executive chair and cnbc contributor. tom, why do i just feel like i could be talking about streaming and all the entrants and acquisition costs or this, and i

will say i do play on draftkings, but i've had the same $150 in draftkings for like 12 or 13 months. maybe that's part of the problem. >> well, joe, thanks for having me i don't usually have to make disclosures when i come on, but i do have to disclose that the company that i am expect active chairman of, engine gaming and media, has a major patent suit against boefts draftkings and fanduel. new york as you say came out really strong. 2 million accounts since january 8th established in the state, over $2.5 billion of basalt ready. it's all driven off all kinds of hugely expensive promotions, all kinds of free betting credits, risk-free bets, signing bonuses,

caesars was giving people dollar for dollar up to $3,000 match in their accounts plus a $300 signing bonus, and as you say, analysts believe that that's just not sustainable and there are really three issues plaguing the industry one is to your point about streaming. netflix, disney plus, they can amortize what they have globally or at least nationally the content that they create every time a draftkings or a fanduel light up a new state, they're starting from zero and so each of these are competitions within a state where they have to start from the ground as if they're entering an entirely new territory, and it takes a few years for a state to go positive about 20 states have lit up.

there are about 30 that haven't. that creates a very different dynamic state by state starting from zero. two, it's a fairly highly competitive state. i think in new jersey where you are, there's as many as 20 different betting options on mobile and, three, there's nothing exclusive here everybody's got the same bets, the same odds, the same interface. at least netflix, disney plus, going back to your analogy, have exclusive content relative to themselves, and that's just not something that the betting players have so those are clearly plaguing the industry and driving this massive promotion to try to drive market shar through those kind of customer acquisitions. >> so the whole arena is getting a reset after the initial excitement about all of the states legalizing it

it is widespread there's nothing wrong with the idea, tom, but it's the number of players and how much it costs to try to get -- you know, to try to differentiate yourself from all the other competition. so two, three, four, five years from now, will it be a low multiple stock i mean even at that point, do you think they're not going to be great, you know great investments? >> your point about differentiation, i think, say big one. i think there are four fixes for this industry that are going to have to be pursued to fix these three big problems number one is differentiation. what our unit at engine gaming does, while we don't engage in gambling, we have cash entry, social games of skill. you may not be able to beat the house, but you could beat andrew, and fans like to play other fans friends and family like to play each other so social games that engage the

fan passions more relative to odds against the house, which is more of a solitaire expry exper, is one key differential way we are pursuing two, i think there needs to be much more focus on in-play, based on with ease going to happen next in the game to keep the excitement and the viewing engagement going, which media companies really need for ratings purposes 75% of all bets in europe are that kind of in-game/in-play betting. three, there clearly needs to be some kind of consolidation here. there are too many players, and to your point multiples and consolidation will have a lot to do with that and, four, i think that we need to see -- the betting sports cycles are over now, but down the road we'll see joint bidding

between gambling companies and media companies to develop some degree of exclusivity for betting companies which today they don't have. i think all of that will drive for a more differentiated consumer experience and probably a healthier industry overall >> the media companies making significant inroads to betting themselves, meaning buying these companies, or do you actually see the betting companies turn themselves into media companies first? >> it's a great point, an druchlt there's been a lot of talk about espn and whether they're going to enter into some kind of exclusive deal there's no doubt media can tloer costs of betting companies, which has become a frenzy of expenditures recently, but, again, the companies that have

most closely tried to integrate media in their gambling operations have not done particularly well. pen national has tried to do it, barstool has tried to do it. the leaders in the industry are fanduel, draftkings, bet mgm, caesars. so those who have pursued more integrated strategies so far have not faired so well. having said that, media companies as we talk about here all the time are suffering all kinds of decline in their core revenues, subscriber fees from cable and satellite, and need to find some kind of substitute revenue to make up for that. gaming revenue is a natural place for that to be so i would expect much closer venturing, partnering between betting companies and media companies down the road, particularly relative to the big

tech companies who have the balance sheets to be able to bid sports rights away if the gambling and media companies don't find common ground. >> i don't know how you differentiate that, tom. the streaming analogy breaks down because the streaming companies have -- you know, have content that can be -- that only they might carry we read about that all the time. people join a service just to get a hot item but you could never see a league having a relationship with one specific book, could you one specific bookmaker i can't imagine that that could ever -- so it's a commodity. everybody's got everything, so the only way to differentiate yourself is promotions, which eat into your profitability once again. >> the more the end game play is integrated, the more games might be exclusive, al thoerks i totally agree with you

the leagues are pros at creating a perfect market auction place and you never want to get into a single exclusive relationship with anybody for these kinds of purposes, but that's going to evolve over time obviously the current bidding cycles are pretty much behind us. but i do believe social gaming fans, friends and family playing each other, is key to what sports tell sigs is about, fathers and sons watching with each others, buddies watching with each other. we think that will set things apart. >> yeah. we have the divorce bowl in my house. i went to colorado, and my wife went to s.c. so every year it gets a little bit ugly the kids always leave the room anyway -- tom, do you betta at

all. >> no, i was thinking about it with curling but i couldnd find a betting line for it. i would have bet money on sweden, but i wasn't able do it. >> i wouldn't have bet on curling. all right. curling is awesome we tried it, remember, sorkin? we fell on our ass. >> do you remember that? >> yes that thing is heavy. that stone is heavy. you've got to admire those people it's not easy. thanks, tom. >> great to see you. >> all right good to see you. >> do you remember when we got on ice skates, joe >> yeah. hockey too. >> like a decade ago we were making a commercial on ice skates where they blacked out our teeth. remember >> they didn't have to do that with mine. i've already got that ready maid. coming up, the s&p 500 enter thing negative territory is it the time to buy?

more after the break checking out cryptocurrencies. you're looking at bitcoin, back up at $39,000. we're back after this. ♪ ♪ ♪ ♪ with a bit more thought we can all do our part to keep plastic out of the ocean.

the broader markets all losing more than 1% yesterday as tensions between russia and ukraine escalate the dow's now 5% from its highs, the s&p 10%, the nasdaq 17%. joining us now stephanie link, chief investment strategist and individual names, some of the biggest fliers which are are down a lot more than just 17 or 25, stephanie. so we had the developments

yesterday and over the weekend, and then people look at those developments and try to figure out what the fed is going to do, and a lot of peoplehi looking at energy prices and inflation and how that's impacted. so there was a lot to put in a blender and see what you finally get. what do you come up with what comes out of the blender? >> it's not easy i'll tell you i've been doing this a long time there's so many moving parts right now. clearly, we're having a rally this morning because we did get oversold, but it does seem like we have some sort of game plan for ukraine and we'll see have to see how that works out. we have a lot of inflation across the spectrum. we have to wait probably for the fed meeting to get a clue, a tone from them we know they're going to be tight. we know they're tightening is it 4, is it 7, we don't know. it means we're going to have to

be data dependent, and the pmi was good and confidence even good but we've got to watch the data and then watch oil prices. jobs and wages and as i mentioned the confidence yesterday was good we have to watch all these moving pieces. the good news is, though, we just got through earnings. and i like to circle back at the company that beat and raised and had good fundamentals and stories to tell, and their stocks are down. and that's a company like mcdonald's, expedia, hilton, the reopening name i still like within the consumer. what about diamondback energy? last night they just reported and it was a very good number, and they're committed to shareholder distribution

so i think you can find names that you have to make your list and be patient and not jump all in all at once >> the numbers initially on home depot looks like it was continuing to perform well at least in the prior quarter, but the tock in 2022 has been hit by worries, i guess, the combination of higher interest rates, maybe housing, maybe housing gets impacted. what did you see you made some interesting points that really point deep into that report that was concerning >> yeah, i thought the inventory numbers were a little alarming, up 33%, in the quarter up 52% on a two-year stack basis they did have good sales, but that compares to sales of just 22%. again, you're looking at a much higher inventory number. and so while i think it's good they have products on the shelves and i think lowes probably did the same thing, i

just feel like that's a warning of sorts, it's a yellow flag now, the stock is down 22% year to date and trades up 22 times earnings it's certainly interesting it's a blue chip, right? and they've done really well over the years navigating the ups and downs. qua, since we have higher interest rates we're going to have to monitor as well. it is sort of getting interesting as well. it's one of the names on my list that should have pulled back even further >> i know i don't have to tell you to keep watching because i'm sure you have us on all the time thanks, stephanie, we'll and get more insight about that business a little different, softler, gentler, nicer color on lowes. do it yourself is not ply middle name i don't think it's andrew's

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good morning sfoks looking to jump at the open as the s&p tries to climb

out of correction territory. we're going to talk to jp morgan's chief strategist. and the home improvement ceo will join us live in just a moment plus the continuing coverage of the geopolitical story dominating the headlines david petraeus will be our second guest as the second hour of "squawk box" begins right now. just after 7:00 on the east coast. i'm joe kernen along with andrew ross sorkin. becky's off today. u.s. equity futures are bouncing from the weakness we saw yesterday, the weakness that was contained. at one point it looked like it could get pretty nasty down over 500 points, 600 points closing down just a little over a percentage point but the s&p we should point out

is now in correction territory although it indicated up 19 today, dow bouncing back 120, nasdaq up 111. meantime lowes posting fourth quarter numbers earlier this morning topping expectations, raising guidance as well from the next fiscal year same store sales also beating estimates. marvin elson, lowe's chairman and ceo. it's great to have you on the broadcast this morning let's talk about what's going on in the economy because you have become a bellwether of it and what you are seeing. >> hey, thank you. it's great to be with you this morning. >> when you think about the macro environment for home improvement it's very positive you have continued home price appreciation, and when home prices go up, consumers have confidence to invest in their homes, and a data point i've used frequently is that in the usa 50% of the homes are over 40 years old, and that drives

repair and maintenance activities, and for lowe's two thirds is driven by repair and maintenance. we're all driven by some macrow economic challenges. if you look at our consumer base right now you have $2.5 trillion of additional savings versus pre-pandemic levels. so we feel good about the macroenvironment specific to improvement, and we're still in an undersupply home situation. we estimate that we have 1.5 million less homes available than what demand is seeking, and so all of those factors bode well for lowe's and for home improvement. >> marvin, to the extent there are skeptics, there have been skeptics that had a view that when we return to normal whatever normal is supposed to look like, and if the fed really did take its foot off the gas that housing, that the lowe's of

the world, the home depots of the world would become more challenged, the american public would spend more on services, all this money that had been effectively moved towards home improvement would be moved back. you don't think that's the case? >> andrew, i don't there's a couple of fundamental things we look at. i think we all would agree in the last two years when we spent more time in our physical homes than we have in our lifetime i think we also will agree there will be some fundamental changes that will persist, you know, post pandemic and one is work from home. i don't know about you, but i took additional steps modify my home to ensure that the workspace for myself and my wife were more adequate and because we have millions of people who will now permanently work from home the general wear and tear tied to that will be

something that will persist for a very long period of time the other thing we've done is we've done a survey of consumers, home owners and professional contractors asking fundamental questions about what do they see in their purchasing behaviors today and in the future and over 50% of the home owners that we surveyed are saying they're going to invest in a home improvement project in 2022, and equally the same percent said they're going to be hiring a contractor. so although we think there will be some adjustments to purchasing patterns, we think that the fundamental use and purpose of the home has forever changed. and the question is who will be the most customer centric business that provides convenience for customers to shop in store, online and we think lowe's has positioned ourselves very well to serve that customer population >> i want to talk about that in a moment i also want to talk about the consumer versus the pro-sumer if you will and what you guys are

doing for contractors and the like, but speak to the issue of supply chains because you still hear stories if you want to get a refrigerator, you're to have to wait for that refrigerator to show up on your door what are you seeing there? >> andrew, it's obviously still a challenging environment, but i do believe because we're such a large importer of goods and we have so much scale that we've had the ability to perform much better than other retailers. we're one of the largest importer of containers in the u.s. we have a very mature supply chain, and we've also spent quite a bit of time making sure we're trying to meet the demands of our customers now, are we in a perfect position the short answer is no, but there's no way we can deliver the level of sales growth, the level of profitability and be one of the few retailers to have year over year gross margin rate improvement if we didn't have

really high execution and an understanding how we can maneuver through the challenges in the supply chain. one of the things we're able to do is build what we call coastal holding facilities on the west and eastern ports of the u.s. so we can bring in goods earlier, we can land in and take possession of it so we can distribute if as we need to our regional distribution centers and our stores and we've also leveraged scale to make sure we stay on top of the demand again, we are not perfectly where we like to be, but we feel like we're performing much better than a lot of our competitors and our results reflect that >> can we talk about commodity prices, though actually across our screen right now commodity costs climbed higher you've been able to pass most of them on it appears to the customer will you continue to be able to do that especially as interest rates continue to move higher? >> if you look at 2021 in the

back half of the year roughly 50% of our sales increase was driven by inflation. the other half was driven by average ticket growth, and just execution within the business. as we look at2022, we think specifically lumber is going to normalize in the back half of the year but we think we'll see inflation the first half of the year, but we also believe that the fact customers continue to modify their home we're going to be in a good position. because there is a supply demand issue with the availability of homes to the demand for homes, we just think it puts your home improvement in a really nice position oftentimes home improvement gets combined with home building, and it's two very different sectors. it is actually beneficial to the home improvement marketplace to have fewer new homes on the market because it gives customers incentives to invest in their existing homes. you know, when i moved to

charlotte, my wife and i couldn't find the home we wanted because there were very few homes on the market, so we bought an existing home and remodelled it. so you're seeing a lot of that activity yeah, you're going to see impact with inflation, we think the net effect of it is if you can offer competitive prices and offer innovation, customers will continue to buy. >> what do you think about interest rates i don't know if you know what percentage of your customers coming in either with a construction loan or taking money out of their home either through a second mortgage and the like, i imagine a lot of people obviously putting purchases on credit cards and such, but how do you think that may effect things going forward? >> as you can appreciate we spend quite a bit of time looking at historical correlation between home improvement and what the data tells us is home improvement traditionally delivers strong growth if you have broader macrow indicators that are

positive things like low unemployment and consumer balance sheets. like i said earlier consumers have excess sheets of $2.5 trillion versus pre-covid you also have elevated home equity meaning value are up, consumers have confidence investing in homes there's not a direct correlation between rising interest rates and economic head wnd for the home improvement market if there's other positive economic indicators in the macro and we feel the home improvements are going to persist beyond 2022 >> and finally, marvin, let's talk operationally between the consumer we're very good at screwing in light bulbs, but after the light bulbs, it gets challenging i hate to admit it i often have to find the pro-sumer or the contractor to help me do what i'm supposed to do you've tried to shift the business over the past several years so to appeal more to that

contractor, right? >> yeah, andrew, we have and let me explain why the traditional diy, do it yourself customer shops a home improvement environment roughly 45 times a year. we have certain, you know, examples of contractors shopping with us over 100 times a year. so that contractor drives productivity throughout the entire store, every department throughout the entire store. so when you look at our results for the fourth quarter our contractor pro-business grew 22% and a two year basis grew. we're trying to find the right balance. if we look at our segments today you could argue that our diy customers still represents about 75 plus percent of our sales and our contractors are a little less than 25%. we want to grow that just

because of the productivity of that customer, and we're pleased to launch nationally our pro-rewards loyalty program. we call it the mvp pro-rewards and partnership program. this will give us for the first time a national program that will allow our pro-customers to accumulate points, to buy more and save more and to have all types of things that they can gain because we now have a loyalty program. so that's one of the things we heard loud and clear from our pro-customers they wanted to have a robust partnership and loyalty rogram we didn't have one we're rolling that out nationally over the next couple of weeks the early indicators have been great. specifically we found out customers if gauged with our pro-loyalty and credit program spend 300% more annually than customers who don't. we think our continue will grow. and we think our pro-loyalty program will be something

advantageous for our customers as well. >> marvin elson, thank you for joining us this morning. i like your outlooks >> great to be here. >> great to see you. >> andrew, even with the light bulbs it's not easy anymore. what kind of fixtures do you have in your house i've got -- there are at least 15 different types of light bulbs in my house because of these treatments that i don't know -- >> fancy treatments. >> i'm not exaggerating there are at least i would say 15 different types of light bulbs and i've got to find those, so i wouldn't say i'm a complete amateur at diy just from the

expertise i've developed with the light bulb >> i have no one -- it's me. i like that when people say you want to have lunch, give me the contact of the person i can set that up. i don't have one >> the s&p closing in direction territory, the nasdaq and dow down for they are fourth straight negative session, but the domino -- the domino is looking in some bright spots in the market >> it's probably appropriate you're talking about lighting right now because i put some outdoor floodlighting, let's talk about indoor. let's working right now, let's shed some bright light on some of these, no surprise energy the best performing sector by far in the s&p 500, 21% the up side so that massive gap there seems to be getting wider, but we'll

see whether or not it gets back towards normal ranges the next couple of weeks here also what's happening with one of the outperformer, i'm not going to say positive just yet but many of the financials are doing pretty well thus far in 2022 driven in large part by companies like m & t bank on the large side a kind of out-performance on by the regional bank performers here also travel and leisure, we've talked a lot about booking companies have been really bell so far expedia and alaska air helping to lead that charge. but american express, it's the kind of financial, travel related play a lot of people are looking at is up 18% during that time so american express one of the ones we'll talk about with the broader travel and leisure reopening trade coming and then one place a lot of people aren't talking about these days that much anymore, tobacco stocks i'll show them to you right now because on a year to day basis

both philip morris international and the domestic arm of kind of that tobacco side of things are up 14% and 19% respectively. as we talk about the places that are working, andrew, it has been energy for sure, financials in very much the regional banks and keep an eye on tobacco we'll see if that kind of stays in a trend format for 2022, guys >> dom, thank you for that coming up when we return georgia gubernatorial candidate and author stacey abrams joins us to talk about her new book which focuses on small business, the state of the democratic party and so much more here are the futures take a look. dow up about 168 points. squawk coming right back getting the incredible iphone 13 without t-mobile, makes as much sense - as playing hide-in-seek... - ready or not, here i come. ...in the desert. really guys? t-mobile has more 5g bars in more places.

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welcome back to "squawk box" this morning the number of new small businesses soared in 2020, hit a record high in 2021, but the pandemic was not the only challenge for the new entrepreneurs. inflation on goods causing price increases and the hardest labor market in years. stacey abrams, democratic candidate for georgia governor and the coauthor i should say of this new book, level up, rise above the hidden forces holding your business back, which is

about the lesson she learned from starting three different businesses stacey, thank you for being here i want to talk politics with you, but i want to talk about this book first, and i'll just go with some of these business issues people think of you as a politician rightly, i think, but they don't often think of you as an entrepreneur. and i'm curious how much you want people to think of you as a business person. >> i absolutely believe it's necessary. i'm running to be the executive of the state of georgia and i bring with me a great deal of experience for three companies including the successful fin tech company who create and retain jobs for businesses across georgia and we're expanding to do national work, more than $700 million put back into small businesses by monetizing their invoices. that is the kind of leadership we need as we watch small businesses grow, but we also watch them stall out, and our book is about how do we make certain we tackle those systemic

challenges that stops small businesses from scaling up >> when you look at what's happening in the economy broadly and its impact on small businesses, and we're talking about inflation and commodity costs and supply chain issues and the like, and then you think about what the administration is doing and the approach the democratic party is taking, do you think it's working >> i think we have to look at what has been happening for small businesses for quite some time there has been a tendency regardless of regardless of administration to think about solutions for small businesses as scaled down fortune 100 we see these macro solutions for what are typically small businesses and the capital market solutions for small businesses are different than the capital solutions for large businesses small businesses do best when they have customers, when they can sell their products into the marketplace, not when they sell their equity to investors and to loan companies and so one of the challenges we talk about is how do we monetize

and make certain that the most important capital market for small businesses, which is the fact they spend their money often funding larger companies, funding their customers, how do we put that money back into small businesses so it's not a partisan issue it really is a challenge of having a lot of corporate leaders who never run small businesses making those decisions. >> stacey, i know we both love the state of georgia, and somehow georgia is back like the center of the universe i couldn't believe last election how important it was so you're kwoeg to do it again you're going to run again. and i know you've answered this question again and again but i want to ask it a bit differently because you continue to express a nuance view of what happened in 2018. on one hand you say i think at the time after the election a concession means to acknowledge an skz is right, true and proper, i cannot concede and it got more nuanced where

you said under the rules of the game at the time, but the game was rigged against the voters in georgia. so i can tell you for a fact republicans are going to use this against you and ask you questions. you've answered it before, but they're going to say it's hypocritical for democrats to criticize people that question the integrity of an election when you did the same thing. one even said you were ahead of your time in claiming the results of an election were rigged do you think this next election is the the game changed? is it still rigged, or do you think at this point it will be a fair election in 2022 in georgia? >> what i've always spoken to is the ability of voters to cast their ballots and have their ballots counted. there is not a single politician including myself who's entitled to win an election, and that was never my point the point is we have to make certain that the voters have the ability to register and stay on the rolls, cast their ballots and have their ballots counted,

and decidedly in 2021 in response to the safest election in georgia history we saw the p promulgation of sb 202 and that should concern every georgian and every american. the larger issue and this goes to the systemic issue we're talking about for small business, we have to make certain that the process is fair and that those who want to participate whether you're running a small business or casting your ballots, you have the ability to do so in a fair and equitable planner, and that should be our mission. i can't do a thing about what republicans or others are going to say, but i can be true to my word and do what i've done for the last four years as a private citizen, and that is work to make certain things are made better for others. as a small business owner i work to put money into the pockets of small businesses during this last time and i'm going to do

the work i can to make sure as governor we can ensure voters have access, small businesses have access and the state of georgia is seen as a shining star no matter where you start, no matter your background, zip code, your acesses to power your ability to succeed is strong in the state of georgia >> it might be interesting on the other side just seeing who your opponent is, stacey you've got one i think david perdue, the former senator has president trump's -- former president trump's endorsement. and brian kemp who you faced last time. do you have a preference who you face who do you think your opponent is going to be, and what will that bring into the dynamic of the election itself? >> well, the republicans fight amongst themselves about who will be their standard bearer. my responsibility is to fight for georgia. and my mission is to focus on building one georgia where we have a diverse economy, a diverse electionorate, where we

have opportunities that focus on the needs of communities, rural communities have a different set of needs and while they're having their battles internally, my responsibility is to articulate a plan how we fully fund education going forward, we ensure we pour resources into the economy that actually lift everyone because right now while the numbers look good on the top, people are in pain i mean the conversation you just had with lowe's, these are real challenges people are feeling, and we cannot gloss over it by highlighting only the numbers we like and we have to focus on health care in georgia that is a massive cost uncompensated care in georgia runs into the billions of dollars because we refuse to expand medicaid, bring billions of dollars back, georgia taxpayer dollars and invest that to create 60,000 jobs in the state of georgia that's going to be my focus. that's the conversation i'm going to have with georgians and i'm going to bring my business acumen, and the time i

have spent across the state making sure i'm the right leader for the state. >> mike bloomberg says, quote, the party is headed for a wipeout in november. you think that's true? >> i think prognostication is fun, but i believe in building my own destiny i look at the numbers. i look at what's happening, but then my responsibility as a leader is to shape the future that i believe we need and while i appreciate the mayor's insights, i think that we are several months out from november, and our responsibility as a party, my responsibility as a candidate and any leader's responsibility is to see the warning signs and do what we can to shape a future that guarantees opportunity for every citizen, and for me that's about focusing on the people of georgia. >> and stacey, i also wanted to ask you about corporate funding -- individual donations versus corporate funding interestingly, and this has really happened since january 6th. you've seen corporate funding and corporate donations come

down remarkably, down now 28%, corporate giving to democratic members -- i should say to all members down 8%. down for congress fell 19% what's your take on the distinction between individual giving and corporate giving? do you think corporations should even give at all >> right now we have a system and we have -- we have language from the supreme court that treats these donations equally, and they are corporate citizens. they want to participate in our elections, they should do so but they need to do so paying close attention to the longitudinal history of the candidates they're supporting. and any candidate who was willing to subvert this nation and participate in the january 6th insurrection should be looked at a stance my responsibility to the their my vision and values with the state of georgia, and that's how i'm going to approach this

election i encourage every donor, whether individual or a corporate donor to look at my record and look at the success i've had as a leader in the corporate sector and non-profit sector and as a political leader >> stacey abrams, the book is called "level up." we appreciate you being with us. >> thank you so much >> look forward to seeing you again. thank you. before we head to a break, a look at a couple of stocks to watch. fans of popular call of duty video game series will have to wait for the next the stallment. this according to bloomberg activision blizzard is going to be delaying the game they planned for next year, marking the first time the franchise will be without a yearly release in nearly two decades. not having an impact on the stock because it's really being bought by microsoft. net income came about 1.1 billion pounds, much higher than the 756 million pounds expected full year profit, net profit i should say also beating expectations thanks to strong performance from the corporate

investment banking division. "squawk box" coming right back after this time now for today's aflac trivia question. in 2021 lowe's acquired what flooring and carpet company? the answer when cnbc's "squawk box" continues 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. ♪ ♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪

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now the answer to today's aflac trivia question. in 2021 lowe's acquired what flooring and carpet company? the answer, stain master we feel good about the macro environment specific to home improvement and we're still in an undersupply home situation. we estimate that we have 1.5 million less homes available nan what demand is seeking, and so all of those factors bode well for lowe's and for home improvement. >> that was the lowe's ceo right here on "squawk box" just a short time ago the home improvement retailer reporting an adjusted earnings, beat wall street estimates of 1 171. revenue also topping expectations >> still to come more on the

rising tensions between russia and ukraine. we'll talk to general david petraeus for his take on the situation next plus kraft heinz getting into the plant based food business. going to talk to the country's u.s. president about the products, inflation, eryinvethg. stay tuned you're watching "squawk box" on cnbc trading isn't just a hobby. it's your future. so you don't lose sight of the big picture, even when you're focused on what's happening right now. and thinkorswim® is right there with you.

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defending freedom will have cost for us as well and here at home we need to be honest about that. but as we do this, i'm going to take robust action and make sure the pain of our sanctions is targeted to the russian economy and not ours >> that was president biden announcing new sanctions on russia after tensions rising in ukraine. kayla taushe joining with the latest >> reporter: activity by two russian banks with about $8 # billion in assets, five elite individuals and their families deemed close to president putin and the operation of the nord

stream 2 gas pipeline to germany. it notably stops short of limiting oil and gas exports, cutting off high tech exports to moskow our blocking its access to swift payments all of which could impact consumers, and while biden also held out a shred of hope for a negotiated resolution, his top diplomat, secretary of state antony blinken said there would need to be a reversal of russia's actions canceling his meeting with russia's counterpart citing the invasion >> now we see that the invasion is beginning and russia has made clear it's wholesale rejection of diplomacy, it does not make sense to go forward with that meeting at this time >> in the last 24 hours nato countries have added thousands of new troops to eastern europe and the baltic states to counter russia's more than 150,000 troops surrounding ukraine a russian separatist leader said military mobilization is gaining speed, but not yet at the stage of claiming new territory.

joe? >> okay, kayla, thanks joining us now is general david petraeus, retired four star general of the u.s. army nobody knows what lurks in the minds of men, i know that general. but in your view what are we witnessing an attempt to reverse some of the concessions that follow the cold war and reconstitute parts of the soviet union, or genuinely concern with security and a buffer between, you know, that ukraine provides for him theoretically for him between russia and the west. >> a bit of all of the above, joe. great to be with you clearly if you listen to vladimir putin's speech the other day which is slightly surreal, bizarre, all these grievances pouring out, it's very clear he would like to essentially renegotiate or undo

much of what happened since the end of the cold war. he's certainly also intent on making russia great again, if you will although, interestingly, what he's really done is make nato greatagain i spent the weekend at the nato security conference and i've not seen unity such as we saw there since the days of the cold war when i first went to such a conference as a speechwriter for the supreme allied commander in europe, the nato commander we're all wondering what happens next there's no question about the positioning of the forces. i also know what an invasion force looks like when it's ready to cross a border having been a division commander of the 101 great airborne division for the invasion of iraq and the fight to baghdad they're positioned there's no doubt i don't think in many peoples minds that the russian forces would overwhelm the ukrainian forces even though president zelenskyy of ukraine has now finally ordered a state of emergency and called up his reserves and therefore allow his

military commanders presumably to start placing serious obstacles and other defensive measures that will be very important if indeed they have to fight. but it's up to putin i think right now. he's made a first step, which is of course to put russian forces on the ground in the russian separatist controlled areas in the south eastern part of ukraine. the question now is does he push out farther in those two provinces if you will to fully control all the area of those two as he has said that he recognizes all of them wheres as independent and then what after that he has many options we could pursue all very dangerous and set about very severe various sanctions in addition to the ones announced yesterday by the german chancellor and u.k. prime minister and president biden >> so many different questions about it

china looks like it's signed onto some of this. do you think if he decided to go past the areas that you said all the way to the capital and the entire country, do you think china -- and i think he needs someone -- obviously the west is not going to go for that do you think they would be okay with that? or does that risk too much global instability you know, china needs a global economy, maybe more than russia does >> look, china on the one hand it wants to stand with russia. we heard that after the meeting that president xi and president putin had on the eve of the olympics in beijing. on the other hand, we heard the foreign minister of china at the munich security conference say the territorial integrity of countries should be recognized and honored. keep in mind ukraine's biggest

trading partner is china interestingly, and a sort of destination that china would like to pursue for belt and road initiatives and so forth so there's a real -- i think it's beyond. i think the chinese would like to see nothing further happen kooepg in mind the chinese president subject is -- >> is there a level of sanctions that would deter from what putin wants to do? >> it's also possible they have not. he has stood down, stared down sanctions in the past. it is noteworthy that they were very swift they're significant but a lot of runway left for additional actions by all of the countries

involved here. so, again, we will see what it is in his mind, what the calculations are he has to recognize as well that digesting all or part of ukraine could be fairly difficult. many of us met with the ukrainian parliamentary delegation at munich we heard from president zelenskyy. it's pretty clear they intend to fight. they're not going to give in you can see a situation in which it's pretty easy to ache over a country. again, i've been through some of this as well it's much tougher if the citizenry and insurgents and so forth develop to keep it, to hang onto it, to occupy it that's a big challenge and 190,000 troops if it's that many sounds like a lot, but counter insurgency is a very soldier intensive endeavor, and when you strip out all the other odds and sods of support

elements, logistic, all the tanks and everything, when it comes down to tanks on the ground, boots on the ground, there's a lot fewer than 190,000. can they also replace them when they're a year or two or whatever has ended so there have to be some alarm bells going off in the back of president putin's mind who's old enough to remember afghanistan and to wonder if that could be the problem here >> we've learned about counter insurgency here as well, unfortunately, over the years. like to haveou b yack again soon as developments play out "squawk box" will be right back.

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welcome back to "squawk box" this morning quick check on the markets right now. we're in the green, still staying basically where we've been all morning and the s&p 500 up about 32 points >> let's talk more about the sanctions, russia's invasion, ukraine triggering fresh sanctions from the united states from some of the country's banks and against individual russian

elite and their family members joining us now on this the deputy secretary of the treasury so when president putin was made aware of the proclamations yesterday of the sanctions, what do you think hethought at that point -- about what you expected, would you say? >> president putin and his allies thought they were taking steps to project power in the future spending on on things like his military and also elites close to him and make it harder for him to take actions like the ones he took yesterday >> was there a notion to keep something in the tank for the future is that the way you proceed with this in other words, if he does more, you do even more

and is that the right way to do it the fed has to decide 25 basis points or do we go 50 right away should we have canceled, for example, nord stream 2 instead of looks like almost just kind of, well, i'll suspend it, see what happens was more needed or is it a wait and see approach >> so one of the critical things we did was we outlined for president putin very directly what we would do in response to his invasion we would take significant financial sanctions. we would cut off his access to technology and cut off his elites and we started that process yesterday. the president made clear yesterday that was our first traunch, and one of the most significant things we did is we acted not alone but with our allies and partners in europe which sent a clear message to president putin, and we have more we will do if president putin decides to further his invasion into ukraine, more significant actions. in 2014 i was here, i had a chance to work in the white house when president putin went into crimea, and what i can tell

you is that the actions we're contemplating are far more significant than what we did then >> will sanctions be enough if he has it in his mind he's going to, you know, reconstitute the greatness of russia? if that's in the back of his mind, is there anything economically that would stop him if he has that in mind, do you think, wallie? >> ultimately this is choice president putin has to make. he has to decide if he wants to launch an invasion inside a country, and if he does that we have to launch but the choice belongs to him if he doesn't choose diplomacy, we'll have to use significant sanctions to stop his ability to project power into the future. >> it's been pointed out that a lot of class five intelligence

that maybe in the past the administration would have kept under wraps to try to maybe prevent this or put a lot of transparency on it that the biden administration disclosed a lot more of what it new of what was going on in your view does it appear that this initial traunch is going to prevent him from going further than just these break away areas of ukraine because it seems like the president says he's -- president putin will do much more than he's done so far >> president putin clearly has the ability to do much more than he has done so far you're right that the information we shared has demonstrated russia's amassed a number of troops around ukraine and is in no position to further and the key thing president putin needs to consider is whether he wants to ensure russia's economy is able to grow, that he has the resources he needs to be able to project

power into the future. if he chooses to invade what we're telling him directly we're going to cut that off. cut him off from western financial resources that will be critical to feeding his economy and also to enriching himself, and those are the choices we put before him at this point >> very good thank you. we have a pretty good insight into what the administration is thinking after this, wallie. appreciate you coming on this morning. >> thanks for having me. >> all right, you're welcome good luck. else elsewhere kraft heinz introducing a new venture. it's the company founded in 2015, valued at $2.5 billion last year. kraft also increasing its long-term growth targets jouning us now in a first on cnbc interview with this is carlos abrams rivera, u.s.

president at kraft hineinz tell us about this, carlos am i going to like it? anything i should feel bad about eating this new stuff? >> incredible. thank you for having me, but i will tell you i think for us the goal is actually to democratize. we know that a third of america actually is following a vegetarian diet. now we'll have the advantage of bringing all the great prurkts from the brands you trust also with a plant-based option. it's about thinking can i have hot dogs and can i not have hot dogs, and no matter what you do you should always put heinz ketchup on it, by the way. >> you've got something for everyone i don't know if we talked about it on the show, but the whole process of the way we do a lot of the things we eat is brought into the fore again by carl

icon did you see the way that sows that are with piglet, the way they're kept, it's not a great situation. it would be nice if we could get to the point where there's humane treatment of everything we do. i know they're bred for eventual consumption, but how do you strike a balance there at kraft heinz and trying to be as humane as possible with the treatment of animals, live stock >> for us we're going to continue to work with different industries and government officials to make sure, you know, that we do the right thing in term of how we go to market with our products. and i think that's a lot of the beauty of the kind of partnership now which is making sure if we think about our commitments, we're also driving with the spirit of sustainability and the things we do i think the fact we're going to continue to evolve our portfolio to have more plant based options that actually have a better footprint in terms of food

stability only allows us to actually improve our focus we have as we go forward. >> it definitely checks a lot of boxes that aren't all not talking about the same issues. can you comment on input costs and whether you raise prices, whether the prices are able to stick, even comment on the notion we hear from certain circles that big companies shouldn't be raising prices just because they can, that they should let their margins narrow to try to i don't know be good corporate citizens and not add to the inflation we're seeing in the country. >> i think we're seeing certainly a complete focus on inflation across the entire industry and really end to end, and it's affecting all parts of our business we have said from the beginning we're going to look at pricing but not as the first option. so we have looked at other parts

how we deflate inflation in terms of regulatory options and prices here at kraft heinz one of the opportunities we have is we can leverage our scale to actually ensure so we're able to think about different ingredients that can be switched at different price points, different package materials in order for us to make sure we're providing consumers the best options at the more accessible price. as you think about the portfolio we have options at different price points, so if you think about coming into the mac and cheese category i know you're a fan of you can go all the way from the original blue box to an easy mac and cheese, and they will give you different ways in which we approach the category, and that will happen as well so the idea is making sure we have options for consumers at all price points, the way they continue to enjoy their family

favorites. >> remember, it goes with everything, all the new varieties. carlos, thank you. good to have you on this morning. carlos abrams rivera, kraft heinz u.s. president coming up, we're going to talk about markets, russia, and the impact of the invasion of ukraine on your portfolio. plus elon musk accusing the biden administration of ignoring tesla. we're going to show you the e-mail exchange on cnbc. ob, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi.

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it is just after 8:00 a.m. on the east coast, and you are watching "squawk box" on cnbc. i'm andrew ross sorkin along with joe kernen and becky is off. take a look at the futures because they're looking up this morning dow up about 219 points nasdaq up about 160 points, and you're looking at the s&p 500 right now about 33 points. lots moving the markets this morning, earnings and more straight over to dom chu let's start with the earnings and move onto more earnings right now in terms of a mover just in the last 15, 20 minutes or so we got some breaking news out of tjx companies, the parent company of tj max, marshalls, home goods. it's a miss by the way on expectations for both profits and revenues overall taking a look at the forecast and future growth prospects. tjx companies down about 7.5% in premarket trade. and over the last year it's been

a range bound trade but down about 14% watching companies on earnings also watching what's happening with thebounce back on crypto currency prices, and that's bitcoin which is currently just about 3% for the up side, and either prices up about 5%. some of the ecosystem stocks in terms of trading, coin base up 3%, robin hood markets up about 1.5% and microstrategy up 5%. a check on yesterday's full session amid the session, very much about interest rates. if you take a look at the overall picture it was companies like tesla, also apple and others and by the way, andrew, in the top ten right now is digital world acquisition company tied to the social media and group

then truth social, which is the social media product they're trying to launch right now has launched to the number one spot in apple's free apps as always the rest of the top ten on my twitter feed at the domino andrew, i'll send things back to you. our next guest the russia-ukraine tensions is a low risk but the knock on risk could hurt investor sentiment and growth the chief u.s. strategist and global head of quantitative research for jp morgan good morning to you. everybody's looking at this in different ways, but i think maybe the one way to look at it is what is going to be the impact on the fed. is that one way to look at it? >> yes, i think the big question here is just these indirect effects, second order effects, impact on inflation, higher oil price and how does monetary policy respond to that and i'm not sure that monetary policy will even necessarily be

that effective because how is the central bank going to be oil based supply issues? so, yes, that's definitely on our mind >> how is the fed if they can at all do anything about oil prices, do they try? does this even factor into their thinking what do you think the answer is? >> look, it's a tricky one expectations have gone -- have become quite hawkish on the fed -- on the monetary expectation side so i think the central banks will have to try to strike a more balanced tone because they'll have to make sure that the growth outlook and demand outlook doesn't weaken and it doesn't basically throw us into potentially some form of recession or commit an outright policy or hard landing so it's a bit tricky >> and what do you think the risk of that is? >> so, again, you know, so far it's all been about guidance and

adjusting guidance as we're unraveling this it's called a surprise factor yes, there is some risk. it's very hard to gauge. i'm not that worried in the next call it three, four months i think the economy and the market can sustain, you know, the first call 100 basis point increase i think the bigger question really becomes where do we stand and how are they guiding later this year? and what does that mean for 2023 outlook? >> so what do you expect the 2023 outlook and to the extent investors are watching us right now thinking about whether you want to be in this market, out of this market, where you want to be in this market, what are you telling them >> i think you have to be very nimble i think you have to be quite dynamic. so there's a few areas of the market that we really like where, again, i would say higher conviction, views from our side, energy is the first one i'll mention. that's been our hayest

conviction overweight sector in 2021 and if you look at our outlooks we think there's a good valuation argument, fundamental story, dividends story, and i think there's a pretty attractive -- you know, it serves as a pretty attractive hedge against not just inflation but in this case geopolitical risks like the one we're facing in russia and ukraine. so that's one area we're highlighting travel is the other big call it theme we like. so areas like cruise lines, airlines, leisure, we think that still has plenty of juice in it. and i think it's time to start looking at parts of growth, whether you look at high quality growth or the tech segment i think there's quite a lot of good opportunities and time to start stock picking here as well >> we want to thank you so very, very much. appreciate it. good to see you. >> thank you coming up we've got the ceo

of bet joins us to talk the changing media landscape and its parent company's recent rebranding plus the big moves in markets, crypto and much more. stay tuned you are watching "squawk box." looking over all of times square he loves that. pretty muted outfit for him. behet wishes he had one of his crazy outfits on for that. "squawk box" will be right back.

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the latest salvo in the streaming wars viacomcbs rebrandingch the parent company now counts over 56 million global streaming subscribers the big part of that success is bet. the only media brand that focuses on serving the black community at scale for a look at the role of streaming and big media, we're joined by the bet ceo scott mills. scott, it's good to see you all month. throughout the month bet has been focusing on hihighlighting as you point out pivotal figures in black history past and present and looking towards the future culminating on saturday with the naacp image awards.

it almost in your view is a tent pole for what you try to do throughout the year at bet >> that's exactly right. that's exactly right we focus on celebrating the best of black culture in the black community. and the naacp image awards is really the event in that it's the ultimate celebration of black excellence across the entire creative community and the social impact community, and it allows us to play the important role of supporting one of the most important organizations in our community, the naacp. so it's really a perfect culmination of our mission >> i mean more and more companies have corporate purpose now, as you know, scott, but i think bet always has sort of emphasized that. i mean you want to do well you want to make money, but you've got a lot of other things in mind that probably in many respects supercede just the

profit motive. >> that's exactly right. we think of bet as a community asset. and what ultimately drived bet is our commitment to serving community. we serve by engaging it and ultimately empower our community. and what we focus on is is that the commercial success of bet allows us to play the critical role of supporting the empowerment of our community the example we like to use is in 2020 when we saw that it was going to disproportionately impact the black community, we worked with partners and a coalition of interested parties to raise nearly $20 million in a matter of months to assist black americans adversely impacted, disproportionately impact by covid. and then after the summer of 2020 when we really saw just the wrenching impact of the murders of that summer that the calls

for change and justice, we created content for change, which is an initiative that's specifically designed to identify narrative devices and techniques that can be used to counteract the kind of presidential programming and presidential messages that are foisted upon so many in this country. so it's really using our platform, our commercial success, our partnerships and the support of our parent company, paramount global, to drive the support of our community. >> but content -- content, you obviously need to think about that to affect all these other things and i think, what, the biggest -- the biggest talent agreement in viacom history with tyler perry. you've got that, lee daniels, rashida jones, a lot of these -- that's important you've got to have things

that -- they're not just going to turn on bet you've got to have things with great content. >> that's exactly right. and, you know, our real driver is always serving the needs and interests of our community, and it drives the talent with whom we partner, the shows we create, the platforms we build and the new ventures we create so it drove our decision several years ago to do a groundbreaking partnership with tyler perry, and we quickly followed that by working with people like lee daniels like you mentioned and a partnership with ken and we understood it was important to service our audience in the streaming space, and we quickly scaled to be the largest streaming space supporting and serving the black community. and then in 2021 we decided that once again in service of our community recognizing kind of the fragmentation of the media

landscape that we would create our bet studios, that we could create content under the bet brand that would then reside on an array of platforms to be in front of our audiences >> it's a tough business, streaming, to some extent. and you're taking care of content. in certain ways maybe you actually have a leg up based on all the things that you just said to differentiate yourself from every other streaming service. >> well, bet is unique with respect to traditional legacy cable brands in that we've demonstrated that the brand is able to extend and excel outside of the cable ecosystem and what we've really landed on is that bet thrives at the intersection of content, community and culture, and that's where we're thriving today. but what's important to understand is it's also about where we can thrive in the

future we're all students of media. media is constantly changing, right? i've now been in this business for nearly 25 years, and 25 years ago, you know, the big thing was the emergence of the internet, how that was going to change media and then it was local, and how that was going to change media and all these seismic changes. today it's streaming it will be ten years from now something else, and the important thing and incredible thing about bet is that the nature of the -- of the brand and the nature of the business is such that it can scale and establish leadership positions on any platform that's important to our community >> scott mills, thanks bringing us up-to-date what time saturday >> it'll be 8:00 saturday eastern. >> 8:00. and the naacp image awards screening. thanks for being here. coming up on the other side of this, the 12-figure economic

shield that will help russia weather new ukraine related sanctions. we're going to speak about that. and the market falout on the escalation in eastern europe we'll talk macro, and yes, we'll talk crypto with him you're watching squawk on cnbc i may be close to retirement, but i'm as busy as ever. careful now. nice! you got it. and thanks to voya, i'm confident about my future. oh dad, the twins are now... ...vegan. i know, i got 'em some of those plant burgers. - nice! - yeah. voya provides guidance for the right investments and helps me be prepared for unexpected events. they make me feel like i've got it all under control. [crowd] yeah! because i do. ok, that was awesome. voya. be confident to and through retirement.

welcome back to "squawk box" this morning take a look at the futures now a little over an hour of the opening bill right now we're going to open up higher 242 points higher s&p 500 up about 35 points joe? >> thanks, andrew. president biden announcing economic sanctions on russia after that country's troops moved into the two separatist regions in eastern ukraine, but it turns out russia's elite may have a buffer against any pain the west tries to impose on them just can't believe there's elites over in russia, too, robert i thought they were all here >> here in manhattan but apparently not >> there are a few here. there are a few in london, a few all over the world, and this is just the first phase of sanctions targeting two small

banks. russian sovereign dead market and the russian elites who quote, and their family who share in the corrupt gains of the kremlin policies, and as biden said yesterday should share in the pain. but the pain is likely going to be limited at least initially, and that is because of a financial shield that russia has been building since the 2014 sanctions. russia's foreign currency and gold reserves now tomenting over $630 billion that's enough to cover two years of imports or pay off russia's entire external debt which of course they don't need to do can also support russian companies, banks and these oligarchs for months and months. you add to that a debt to gdp ratio of only 18%. they've got a current account surplus and we have of course oil closing in on $100 a barrel. russian officials saying the sanctions will be, quote, unpleasant but fundamentally change nothing now, because of the 2014

sanctions russia actually diversified away from treasuries and u.s. dollars and developed this whole new debt structure that's largely bimt on euros and gold right now u.s. investors are currently banned from buying russian currency bonds directly, but europeans are are the big buyers and the secondary market the big question is whether they close off that market. russia literally has money in the bank to get through these sanctions even if they escalate at least in the near term. >> need a lot of details on nord stream 2 also. it's not dead, is it, robert you could kill it but it's not there yet. it's like paper shuffling, isn't it >> well, one of the big questions about sanctions, you know, if they escalate they're going to go up to the oligarchs. they're probably not going to ban them from the swift financial payment system they may go after more of the

big companies, but they're not going to do anything that limits energy sales by russia because that's going to increase prices in europe and u.s. at a time of high inflation what they do with nord stream 2 and broader sales of russia, it's not just going to be cut off, and even if they do cut it off russia will find other ways to sell natural gas. that's going to be a piece of inflation and because of u.s. consumers right now they probably can't go there. and when we come back an update on the spreading unionization effort at starbucks cafes today could bring important developments here's some of today's top business stories mortgage applications falling more than 13% last week. that's the lowest level since late 2019. the average contract interest rate for the 30-year fixed rate mortgage was 4.06%

and as far as earnings tj maxx, parent tjk companies missing top and bottom line for the fourth quarter. stay tuned you're watching "squawk box" on cnbc live from the market site in times square. every big idea every game changer every "how'd they do that?" starts here the blank page artists and writers know the tyranny of it well but so do developers, data scientists, ctos the new creators

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welcome back to "squawk box. futures right now indicated a

bounce back from yesterday's somewhat steep sell-off in the averages we see the dow back up or up 219 -- 216 points. the nasdaq indicated up 146, and the s&p which closed in correction territory yesterday up 31 points let's talk about starbucks because they're looking at yet another union vote, but organizers accusing the coffee chain of dragging its feet kate rogers joins us now with the latest what's happening, kate >> good morning. starbucks is facing three more union votes today in buffalo, but there's a catch. the coffeegyne has requested a review from the individual stores as it's maintained a store should be voted on as a group instead of individually. if there's no decision on that request until 1:00 p.m. those ballots are impounded to be counted at a later date. the store's union vote postponed

and as the movement organized has spread across the country very rapidly more than 100 stores in 26 states have filed petitions to organize starbucks workers united told me earlier last month this took off even faster than they had anticipated. starbucks has maintained and stood firm in its position that its relationship with its employees is best served without a third party within the two it's also encouraged workers to vote no on unionizing. but things have also gotten heated recently with the union sharing a starbucks job posting, seeking a communications worker. and starbucks declined to comment on that. and seven pro-union workers in memphis were fired this month after starbucks said they violated the company safety and security policies. the union called it retaliation. those firings are in part related to an interview partners gave to local media in the store unauthorized and after hours andrew, back over to you >> so will this be how starbucks responds to each vote before the

national labor relations board meaning are they going to be trying to group these things each time if this continues? >> they are. so they want the stores to vote as a unit instead of as individual stores. and the union has maintained a single store is enough to seek a union vote, and that's how it went forward in december and we saw two stores vote to unionize starbucks has maintained its firm position they should be voting as a group, representative of the whole area they did push initially for the entire buffalo market to vote together so they keep requesting these reviews before each vote, and the union saying they're stalling, and it worked last week because we didn't get a decision in time for the vote to take place, but we'll see what happens today. >> and dare i say what's the betting line at the moment in terms of whether this goes through? >> it's hard to say. the union has been really confident particularly in the buffalo area because remember

that's where they got their first two votes of yes to unionize, so we'll see what happens. they just need a simple majority, and these is three stores so we could see the stores go in either direction stores could challenge the vote. this has the potential to be dragged out a bit. >> what do they want do we know exactly what they're seeking? >> they really want to engage directly with starbucks on contractors they believe would benefit workers for things like better hours, store pay. and now it argues it has some of the best benefits in the industry and has done a lot to take care of workers throughout the pandemic, but the workers say conditions inside these stores really did worsen throughout the last two years when things got down so down to the wire throughout the pandemic and they changed operations and were short staffed remember. though, they have to negotiate a contract in good faith but don't have to agree to it. >> kate, you discover this industry and this space for

quite some time. is there a fast food chain in america that you think provides more or better benefits than starbucks at scale >> i don't know that i would say more or better starbucks often comes up as a company that does really provide good benefits for workers. another name that comes up in that same breadth for having good benefits for workers. that's been another big union target with the fight for 15 movement workers have a lot of power right now and definitely asking for more, so i don't think this is the last of the unionization push in the industry for sure. >> kate rogers, thanks for bringing that to us. appreciate it. when we come back we're going to talk to galaxy digital talk about russia, ukraine, what the conflict means for markets worldwide and yes for crypto ice , will see any sustained

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welcome back to "squawk box" this morning home improvement giant lowe's

beating analyst estimates for the top and bottom line for the fourth quarter the company also issuing guidance he said half of home owners his company recently polled reported they were planning on a home improvement project this year. this despite all the up grades people did during the pandemic already. >> so although we think that there will be some adjustment to purchasing patterns, we think that the fundamental use and purpose of the home has forever changed. and the question is who will be the most customer centric business that provides convenience for customers to shop in store, online? and we think lowe's has positioned ourselves very well to serve that customer population >> and take a look at shares of lowe's this morning, up 3% on the back of that news. >> i think probably it was down yesterday in sympathy with home depot which had a tough session. in this story tesla and ceo

elon musk detailing some of his frustrationwise the current white house. in an e-mail exchange with cnbc musk accused president biden of ignoring teslaand paying more attention to legacy auto makers, but he also sought to reassure white house officials saying if he were invited to speak at a white house event -- in his words -- they have nothing to worry about, do the right thing. cnbc contacted musk regarding new reporting that president biden and the white house have no immediate plans to invite musk to potential upcoming meetings with corporate leaders. and musk said, again, in his words the notion of a feud is not quite right. biden has pointedly ignored tesla at every turn and falsely stated to the public that gm leads the electric car industry when in fact tesla produced over 300,000 electric vehicles last quarter, and gm produced 26. it got to the point, hilariously, where no one in the administration was even allowed

to say the word tesla. the public outrage and media pressure about the statement forced them to admit tesla does in fact lead the ev industry, so i wouldn't exactly call that praise i have nothing against president biden otherwise in part from general concern about more deficit spending, which would apply to any president and actively supported the obama-biden election a white house official praised tesla on tuesday in an e-mail to cnbc saying tesla has done extraordinary things for electric vehicles, and that's a big part of why the whole industry now knows evs are the future and there's no doubt i mean, it is glaring. the admission is just glaringly stupid, and i mean if you think evs -- nobody thinks anything -- now, i like the new portia, going back to that it's a cool looking car.

i don't know if it ranks up there with tesla >> my question is do you think biden should just invite him to the white house as a one-on-one, do it as a photo op? >> let me ask you when you hear elon say, hey, i promise i'll behave, do you put that in the bank >> i actually think he probably would. >> you do? >> he might make a dig or comment about unions or something like that, which, you know, given the numbers we've talked about in terms of pay for some of the unionized auto makers -- >> title doesn't matter to elon especially seeing some of the comments he'll make about senator warren or senator bernie sanders -- >> twitter is a very weird place. people are willing to say things on twitter that i hope they would not actually say face-to-face, right? >> is that how you write off some of of these -- i guess i'm

going to start saying somebody like cramer, jimmy, if they comment or are watching i guess k-e-r-n-e-n. just pel sp right. >> i'm saying it's very rare people go after each other in person as they do on twitter >> that's true has anyone come up you in public and said something nasty >> about you all the time >> no, about yourself. i got 100% approval from people that deigned to come up and speak to me. >> they go to twitter in 10 seconds. >> they come up and say they like you >> occasionally. i know it's hard to believe, very hard to believe >> oh, the world is funny, isn't

it and twitter makes it so much nicer, a cesspool. let's go back to russia and ukraine and biden and easy i-word, invasion one of the biggest concerns for investors is what they could actually do the cost of energy brent crude touched $99.50 a barrel yesterday this morning oil prices are kind of flat, holding off again capital founding partner a cnbc contributor, and i'm seeing some comments, john, about a separate thing from germany saying, you know, the suspension of nord stream 2 isn't just a matter of days, we couldn't redo it it would actually take weeks to start recertifying it again. that is not a cancellation certainly of the project >> that is not a cancellation of the project, joe the pipeline is filled with gas right now ready to go, cheap gas

as a matter of fact. so i think that project is very much maybe on some life support, but it's looking good. it's a medically induced coma to put in the analogy >> what do you expect -- i don't know how you make a determination, john, because we don't know, you know, what's next in terms of putin's plans but what's your price target on where brent goes or wti? >> well, i mean, if this is it, joe, if this is as far as putin goes we should begin to grind lower again. importantly, the first round of sanctions announced by all the world leading countries here, the coalition, it's hands off energy it's hands off russian oil so right there the biggest fears in the market was the loss of any russia's 6 million barrels per day of exports and not being

touched, really, i think breathes a sigh of relief here by traders in the market because that was the big, and that's no longer on the table at least for now unless something else happens now we're seeing reports russia is pulling their diplomatic folks out of ukraine is that another warning signal we need to process and mean, yeah, maybe. but i'll tell you i was instructed by your interview last hour with general petraeus who reminded us all how difficult the invasion part is almost for lack of a better word easy, it's garrisoning the country and that might not be attractive to putin. as this is uncomfortable and untoward, prices should grow lower. we're well ahead of this thing

shooting above $100. once a commodity brints something like that, the next level, $100 level, it will go through it like a hot knife through butter so we're very vulnerable so there's a very wide array of price outcomes at the moment, but, again, as long as we don't get the next step by russia as far as the incursion or invasion goes here, we should be okay because we're going into the shoulder demand period as we head into the northern hemisphere spring, we don't have the heating demand pressures on the crude barrel and supply. we don't have to really worry about a spike higher in demand again until we get into the summer, and there's a lot of runway between now and then for more supply to come in the market and the build up over the next several weeks. >> john, seeing reports certain producing areas that were shutdown are being reopened.

i'm not sure -- we were the swing producer are we no longer the swing producer could we become the swing producer again and the dominant leader in production could we do it again and how long would it take and could we do it under this administration, or is the industry handcuffed? >> well, this is definitely not a drill baby drill administration, that's for sure. there's a level of hamstring here that is certainly in place, and it's retarding what would have been probably more rapid rebound if the administrations were favorable towards the exploration and production industry having said that anything above $80 a barrel is just almost too enticing for many of these companies not to get going, not to get drilling. i'm still expecting to see u.s. oil production numbers start to ramp up over the course of the next several weeks because of the significant rise we see in the recount over the next

november, over 60 rigs in the united states and keep climbing every week, so there's more to come >> great j john, thanks coming up billionaire investor and crypto bull joining us live. stay tuned you're watching squawk on cnbc (rhythmic electro rock music) (crowd cheering) - bito, bito, bito, bito! - [announcer] bito, the first u.s. bitcoin-linked etf.

let's get down to the new york stock exchange where jim cramer joins us now. i said if i had anymore kids i'm going to tell them cyber security from day one. you were talking about palo alto yesterday what it's going to be up like $40 or something >> i think when you talk to -- if you thunk russia is going to come here, they're already here and he's got the stuff to try to stop them and actually will stop

them also has new ai that detects something in seconds, minutes and it used to be days obviously the offense is easier to play than defense both soup to nuts from off the -- off premise meaning of course the work from home right to the cloud nobody else really has that, and i think it's important as far as kids, no, they can't ever participate in this stuff twitter, i mean jimmy chill tries so hard to at one point to actually appease these people, but i'm not an appeaser. jimmy chill likes to go after every single last one of them. you call them short timers they're teledoctors. >> no matter how nice you are, never answer but if you say something usually it's the hair dye or to toupet

>> i thought they were going to go under she made clear they were going to pass the die of intel, which an extraordinary prediction. initially i laughed but no one is laughing now. that's a remarkable run, and that has to do with a great team but an amazing leader who doesn't get nearly enough credit the stock is so cheap they merged one of those stocks down 30% going into yesterday i think it's just a strong buy >> all right, jim, thanks. >> absolutely, thank you >> okay as long as we don't get cyber attacked between now and 9:00, we'll see you at 9:00. and tonight don't miss a star-studded mad money with the ceos of peloton and goldman sachs. starts at 6:00 p.m. eastern. "squawk box" coming right back

i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. s. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones 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.

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welcome back to "squawkbox." bitcoin on the rise. joining us now for more is ceo mike dove roex let's talk about macro how we should be thinking about bitcoin in the environment it seemed to have moved, frankly, with the rest of the market. >> yeah. it's certainly trading with the nasdaq like a risk asset i think beyond russia, the biggest story this year is inflation. and, you know, you get distracted when you think like russia because it's real but if you watch the way the market

trades, the moment there's even a thought of calmness around russia, it sells back off. we have an inflation problem the fed is behind the curve. they have to hike aggressively this year. if you look back historically when you have inflation this high you put the economy in a recession. bitcoin will be interesting. will they have the gumption to be a, you know, recession, you know, provider inflation killer einstein said i think the guy usually creates a problem doesn't solve it powell created this problem. we'll see if he can solve it and i think bitcoin will rally a lot again if he starts flinching. but there's no end sight look at chechnya inflation was off the charts >> the thing i think a lot of investors are grappling with if

bitcoin is supposed to be digital gold, it should not trade like a nasdaq stock. >> right why does it trade like a nasdaq stock? the same people that bought it that bought in nasdaq. it was bought in the speculative frenzy of all the money in the system powell is acting like he's going to actually be fairly hawkish. if you think about the treasury has been buying treasuries they'll stop buying them, i think, this month and start selling them and so we're in for a year of tough trading in both stocks and in crypto. it's going to be defined by a short covering bear rallies. bear market rallies are brutal but in general asset prices are over valued in the last 18 months you look at the chart of the s&p post covid, it went para bollic for straight line. that has to correct at one point. and so there are two kinds of investors now. the hawkish ones macro guys and

then the younger guys equity thinking this won't be so bad. inflation will roll over by the end of the year. base effects kick in supply channels reopen and as long as 10 years stay below 2.5%, stocks are fine. i'm in the camp wait and see. >> are you the old guy or the young guy? >> you know, believe it or not, i've become the old guy. it bums me out [ laughter ] it's funny, i started wall street april 1st, 1989, 10 years at 9 rnt most people started 10 years after me, you know, never saw rates that high. and, again, i'm not saying rates can get back to 9 %. i think i tnflation can be hardr to put back in the bottle. >> do you have an equity portfolio? what do you do when it comes to bitcoin and the cryptos, which

seem to be trading like equities listen, you know, we are rangy in crypto, i think the only good side that crypto has there's an adoption cycle. people want to buy that want to buy into web three and see what is happening in the nft space and buy into bitcoin a lot of people don't think powell will be able to pull it off. so they think it's temporary so we kind of see 30,000 50,000 range in bitcoin and lighten up at the top of the range and increase the bottom of the range. and stocks upselling rallies i think we'll have the year lower than here. mostly i'm hedging everything by as short rates as i can. because you priced in a lot of front end but 10 years at 190 don't make any sense to me. >> but you said you think equities are lower by the end of the year >> i do. >> do you think crypto is lower by the end of the year >> i think crypto could be in this range

what is different about crypto, we're so early in the adoption cycle. i was just at two different conferences. there are tons of wealthy families and big institutions that aren't in yet that want to get in there's a ton of money in the venture space that hasn't been put to work yet. so i think over time crypto will be coupled it's not decoupling now because you are washing out the late covers in the space, but bitcoin trades very well under $35,000, is my guess. think about where we were a year ago and all the new players and infrastructure, and the work done, it doesn't make a lot of sense bitcoin would be lower than a year and a half ago. >> so you think 30 is your new low? we talked about different lows remember it was 33 at one point and then came down to 32. >> yeah. at that point you're picking -- 33 was the lowest. >> when you speak to big institutions and we've had the

conversation with you now for a bunch of years, there's been the expectations that the big institutions are coming in or about to come in this is just massive money sitting on the sideline waiting for their chance do you see them taking advantage. >> i do. i see people -- >> or do you say, you know, it seems coo coo for cocoa puffs. if you believe they are missing it >> i think the coo coo argument got put away and buried last year i think institutions see it as an asset class and accelerating when they get in i was traveling and meeting with big pension funds and starting to write checks. most of those checks start in venture but some are going into the coins themselves. >> i want to go back to what you said about equities. cash on the equity position? what do you think if the end of the year is worse than where it

is now >> listen, i think you s sell equities. i think you look at the oih it's pricing at $50 oil in the future so oil stocks probably have upside so there's a lot of stocks that have already been beaten down. there's probably some decent value. i'm not a day-to-day stock picker but i'll pick some areas. but, yeah, i think as crazy as it sounds, inflation is at 7%. cash is safe for short periods of time. >> we've heard cash is trash now we heard cash is safe. >> and let me look -- last thought, i don't think it's a long-term thing. why people are buying bitcoin, they don't think we'll be able to get out of this they don't think powell will be able to raise rates enough. >> right. >> right now it looks like he

is. >> we'll see we'll see, my friend mike, thank you. final check on the markets it looks like in the green across the board with the dow opening at 234 points higher joseph, what a ball it has been. [ laughter ] >> it's been real and fun. so it's been real fun. >> it's been real fun. >> see you tomorrow, my friend. >> becky is back tomorrow. >> yep literally. >> join us tomorrow. "squawk on the street" begins now. good wednesday morning i'm carl quintanilla with david faber and jim cramer the s&p with the lowest close since october. now 10% off the highs. ukraine's focus as diplomacy takes a backseat to sanctions and the vix near 28. road map begins with stocks bouncing back. s&p closed in correction territory and th