u.s. soil. after u.s. authorities transported him on the flight from the bahamas last night. now two of his former associates that we thought might have flipped pleaded guilty to fraud charges and cooperating with prosecutors. it's thursday, december 22nd, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen andrew is off this week. we have been watching the markets. joe mentioned we looked at strong moves yesterday we saw the best days for the market this month.

november 30th was the last time we had gains better than this. this comes after the indices were up 1.5% dow up 1.6%. that did claw back the losses we have seen for december so far for the month, dow is down 3.5%. the s&p is off 5%. the nasdaq is down 6.6%. we are waiting to see if the santa claus rally shows up this morning. the dow is indicated off by 40 points you see red arrows for the s&p and nasdaq if you are watching the 10-year treasury, you see the surprise with the bank of japan move raising their yield. here it is trading 1.6%. and hedge fund titan david tepper will join us at 8:00 a.m. you don't want to miss him it is rare when he comes on for

an extended interview. in the past, he has had some very important calls many of them are borne out he is one of the most successful hedge fund managers around people like our friend stan druckenmiller said he doesn't do personal investments he has intestinal fortitude. this is the guy who hmakes numbers that start with a "b" and it is performance based.

i don't know how appaloosa did in the past year it has been a tough year for everyone. >> it has. i think back to the big calls he made the tepper tepper taper-tantrum he is good at figuring the macro and the bets he should make along the way as a result. >> i talked to him occasionally. not necessarily for air. he said a couple of things to me that if you thought the fed put was still around he said if you think the fed put is still around, you are sorely mistaken >> that is really interesting to see how he changed he saw the fed moving everything that was going to be the only way to play things you can't fight the fed. how did he change his playbook up as the fed put is just gone

>> he is socarates. i made the bet with mohamed el-erian i said if you have seen a lasting bottom without some type of capitulation. >> oh, great. >> that was a while ago. >> that's the same thing druckenmiller was saying at deliveri delivering at alpha. >> i want to ask him that. >> less excited about this >> 40-year highs in inflation and tightening cycle 75 basis point increase. all these things -- what are you holding? what were you holding? >> tea >> what was i holding? tea. just a little tea.

thanks for asking. >> i watched this yesterday. what a reception he got in congress volodymyr zelenskyy capping off a busy day in washington with the plea to members of congress and american people urging to maintain support in the war against russia >> thank you for financials you have already provided us with and once you may be willing to decide on. your money is not charity. it is an investment in the global security and democracy that we handle in the most responsible way. >> we're going to talk more about volodymyr zelenskyy's u.s. trip at 6:30 with michael o'hanlon from brookings institute. it is nice to have him come here

and speak and in english if i had to give a speech in ukrainian, i think a lot would get lost in translation. >> i would agree >> he went from comedian -- people said how can he be president. over 300 days. patriot missiles now putin sabre rattling on nuclears again. >> and no limit on any amount to spend on the war we will speak to michael o'hanlon about what this means with the rising tensions. >> calls for peace henry kissinger talk about that. you hear putin say never >> and putin and volodymyr zelenskyy say never. we'll see. the question is does that

message carry over to the next congress was he successful? we will see. ftx founder sam bankman-fried is back on u.s. soil after the flight last night. that news comes as two of his former associates have pleaded guilt to fraud charges we have mackenzie sigalos. we learned they are cooperating after he got on the flight >> the plea deals were on monday and sealed which was the day sam bankman-fried was expected to come back. last night, the u.s. attorney for the southern district of new york held the press conference damion williams said the former head of alameda research and an gary wang pleaded guilty to

charges they helped orchestrate a years long scheme to defraud ellison pleaded guilty of charges including wire fraud wang pleading guilty to securities fraud we had parallel files from the s.e.c. and ftc neither defendant received a deal here. a former federal prosecutor said they will likely spend years in prison ellison's plea deal has a max sentence of 110 years. this puts sam bankman-fried in a difficult position it is tough to beat the charges against him and prosecutors have no incentive to cut him a break which explains why the feds felt comfortable indicting him quickly. >> kenzie, did they play him in this situation he gave up his right to

extradition. they have kept it secret for a while. the plea deals coming out. how did they get quick cooperation when they aren't getting leniency for the people who flipped? >> to your first point, we knew for weeks that someone on the inside was likely cooperating. someone speculated it was ellison. it wasn't much of a surprise there. we found out another deputy of his who wasn't named in the paper work is ryan salame. he talked to bahamian regulators and headed to washington, d.c. that wasn't much of a surprise to your other question, was he played was there some sort of bad deal with the understanding he would have more lleniency? i think they will get time shaved off sentence. ellison will get years on the

110--year sentence this is the best-case scenario. >> if everybody is sippnging, yu better sing quickly. >> the u.s. attorney was saying that last night. get ahead of this. we are going aggressively after everyone tied to the empire. you are better off coming to us now. we are coming after you. he has made good on these indictments and rolling them out quickly. >> maybe we will figure out sooner than later what happened. sam bankman-fried had twice tried to get bail in the bahamas and was unsuccessful there's been talk he will try to do that here is there any chance he will be given bail, particularly facing 100 ap 0 100 plus years in prison >> conditions at fox hill is notorious terrible

there are reports that his legal team had been in conversations to get him out on bail once he arrived in new york. we will see if that happens at the arraignment that probably will happen today. it has to happen within 48 hours of coming back to your point here, he is a flight risk. that is what the bahamians cited as not giving him bail it is unclear if he has the resources to put up sufficient collateral he said he was down to the last $100,000 madoff had to put up $10 million and multiple mansions. >> gary wang and caroline ellison? >> there are reports they are out on bail. $250,000 for each of them. i have not confirmed that yet. >> mackenzie sigalos, thank you.

micron plans to cut jobs more after the commercial. and at 8:00 a.m., weave h the exclusive interview with david tepper you are watching "squawk box" here on cnbc ♪♪ ♪♪ ♪♪

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pst. girl. you can do better. lear at least with yourirs. big-name wireless carrier. with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill over t-mobile, at&t, and verizon. wow. i can do better! -yes you can! i can do better, too! see how easy it is to save hundreds a year on your wireless bill over t-mobile, verizon, and at&t. talk to our switch squad at your local xfinity store today. we have stocks to watch this morning. micron shares reported a loss of 4 cents a share. analysts were looking for a loss, but a loss of a penny.

guidance calls for a bigger share loss in the current quarter. micron will reduce the head count by 10% in 2023 through voluntary departures and layoffs. it is suspending the 2023 bonuses and salaries and capital spending plans for 2023 and 2024 that stock down by 2.9%. here is the ceo on the conference call. >> the industry is experiencing the most severe imbalance in supply and demanded in the last 13 years micron is making significant cuts to our cap-x. maintaining a competitive position we are taking measures to cut costs. >> micron shares are down 46% year to date i think this raises lots of questions about what the future is going to look like over the

next year. >> yup let's talk more about that investors gearing up for the final trading day of the year. we are almost in next year for the month, stocks in the red with the dow down 3.5% s&p down 5%. nasdaq down 6.6% joining us is cio at family office and jackie who is the portfolio manager at putnam investments. 40 years, carol. nothing like this. you point out people are exhausted. investors, c-suite types everybody exhausted because we had a dual bear market that is rare. >> that exhaustion won't carry over you have extra volatility in the markets this week. people are checking out. you see the major storm that

many of us are faced with and the travel issues. next week, i would expect more volatility and lighter trading people are ready to put the period on this year and get a fresh start at next year >> we know the discounting n mechanism of the stock market, ca carol. if 2023 is more of the same and let's say we have a choppy range in trading, does that mean most of 2023 the fed is still in tightening mode because we don't get out of it if the market discounts six to nine months >> whether it is 6 to 12 or 12 to 18, the fed will watch the data the data is moderating it is tough for the fed and economists to project. we have never been in the

situation where it was a medical shutdown, not an economic shutdown you have good major floor underneath the housing market. you have demographics where there would be bea lot of deman if people get used to the prices in the economy, the consumer is driving it they are feeling the prices are down at the pump you see that confidence creep in while it might be volatile, people are getting used to the current set of events. inflation is running higher, but not as rapid a rate as last year you have moderation there. >> i want to get to you, jackie. it was in the notes. carol, it depends how consumers behave in ny in new york. there are people who think that. in the new year. >> yeah. new year.

>> people on the set >> that is not me. >> i'm not saying it >> someone on the set. >> there are people who think the only thing that happens in the world is happening outside that is not what you meant, carol. the new year >> especially not for those of us in the midwest. >> it says ny. >> new year. >> slowgging. >> thank you, joe. good morning i think it will be a slog for the first half certainly for 2023 people who are coming out of 2022 with the exhaustion you were mentioning, will be more. it will be a slog for the fed and markets. carol mentioned the consumer the consumer is still very strong they have cash balances at the banks that are 30% above where they were pre-pandemic when you look at the lower income, they are still 12% to

15% above pre-pandemic they have cash to spend. we are seeing that and what they are spending on is changing and moving to experiences over goods. they have confidence to spend. the jobs market is about as good as we have have seen in the las0 or 50 years. that is a tough nut for the fed to crack when the consumer is 70% of the economy this will be a slog for the next eight months the market has a discounting mechanism. the market thinks we cut in november and that's too soon s>> you talk about how strong te con soumer -- consumer is not just in new york

is that good or bad? jackie, that makes the fed's job harder and maybe they have to go higher for longer. >> it does it is good listen, the fed is trying to thread the needle of slow the economy and not engineer a major recession. we are likely going to have a modest recession it will be a garden variety recession. not tech bubble bursting or gfc. the consumer is strong the fed is trying to slow that the way they have to get after this and i hate to say this to be the grinch two days before christmas, but they have to get slack in the labor market. that is what i really think we need to be watching. you know, the 6% plus wage inflation is inconsistent with the 2% fed target. they have to create slack in the labor market

especially with so many businesses with the traumatic event 12 months ago and they had to hire and couldn't find people we do think this is a grind. they will go probably higher than the market currently is expecting. i think it is north of five. the market at 4.8 now. they will sit and sit and sit. >> carol, to end on a little glimmer of hope. you think the base case next year is for a soft landing you think they still with orchestrate that i guess it is not guaranteed you think odds are better for a soft landing over a hard l landing? >> that is our base case you have the support in the markets with the consumer. even if inflation ticks higher, which we think will and we

concur the fed keeps rates high for a long time. we won't see cuts until the end of next year because the fed has to trend things down we think they can pull it off. it is important to remember economists are modelling or creating models to project the outcome for the economy. we don't have prior period to base models on everyone is doing educated guesses and assuming how consumers will behavior. consumers are getting used to paying more at the grocery store. the delay is filling up the vehicle with less gas. you are seeing some of those energy prices come down. that makes consumers feel confident. again, you know, i think going into the year end, it will be hard because companies are putting wage freezes in so that willingness to jump ship might be impacted.

>> thank you, both, carol and jackie you are from the real putnam george's from 1937 there is another one that comes on here that is called putnam. they don't make it clear who are they >> i'm from the original the george putnam. >> okay. all right. >> thank you >> nobody has to copyright a name >> are tthere's only one joe ke. >> there's a governor. >> really? >> also someone banned from russia on that list. >> spelled the same? >> spelled the same. the one in indiana was an. when we come back, we talk about the biggest trends in the job market and what it means for

the new year and don't miss hedge fund titan dad vitepper "squawk box" will be right back. ♪ ♪ a cyber-attack can grind everything to a halt. cisco security keeps your company moving forward. because if it's connected, it's protected. cisco.

whoa reset. let's do this over new buzz words for 2022. everything from layoffs to cush cushioning sharon epperson looks at the trends and impact of the workers in the year ahead. >> reporter: chandra left her job in banking during the great

regular -- resignation >> the top priorities were creativity >> reporter: unlike workers through the great regret after resigning, admitting they should have stayed put, she was ready for a change sd >> i tried to prioritize making space for habits to lead to the life i want to live. >> reporter: she joined a start up and landed a position in six months while stillf for yoga and other interests. >> it is interesting to take a step back and still having the job i think i love >> reporter: it is a trend some hr experts call a career correction instead of quiet quitting or doing the minimum on the job, w workers are quick to praise long hours to one that puts value on

lives outside of work. >> individuals certainly are trying to exercise their right to find employment anywhere that meets their needs and family needs. whether their work needs or location needs >> reporter: the hr buzz words may fade from shift shock to boomerang employees who return to jobs they left. to career cushioning after loud layoffs. for employers, this is still clear. >> the trend will continue to be an emphasis on talent and the right skills and getting that talent into the right positions within organizations >> reporter: recognizing the need for flexibility outside of workbe essential for filling roles. >> making space for your kids or

hobby or life. that is protected. that tells other folks that is a regular habit that a squccessfu leader can have. >> reporter: research shows 1 in 4 employees say leaders are responsive to their needs. communicate regularly with them and make them feel team members are treated equally. this could set the stage for new workplace buzz words and career trends in 2023 becky. >> sharon, we have people asking quiet quitting that meansyou stick around and don't quit, but do the minimum, right? >> exactly. >> okay. looking ahead to the new year, what are the important factors that business leaders need to be aware of to ensure employees are motivated and engaged? >> it starts with several

factors. having opportunities to advance and having control over what you do and your work most important, feeling your work is meaningful that leads employers to say they are thriving at work that is according to the survey released this week what is surprising is being paid well is far less important to workers who say they are thriving. >> sharon, this all seems like things that people can do in a very strong job market which is what we had to this point. if the market collapses and there are lots of layoffs and a serious downturn or serious recession, it seems to me like people will be okay whatever job i can get at that point. >> it's not the employees market anymore. no there will be changes. i'm sure many employees who think they have the control or want the kind of agency and control in their careers may find they have to take a step back if the job market changes

>> if you become a game of musical chairs with fewer chairs sharon, thank you. great to see you >> sure. good to see you. coming up, ukraine's president telling congress that aid for ukraine is an investment in global secutyndri a democracy. more on the historic speech straight ahead [phone: go straight.] but, to navigate the complexities of modern work... [phone: turn left.] ...you need more than technology. you need cdw. [phone: you have arrived.] so we'll implement cloud based microsoft modern work solutions like microsoft 365, teams and azure, so your teams can collaborate with zero trust security anywhere. [phone: destination ahead.] microsoft makes modern work possible. cdw makes it powerful.

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good morning

well welcome back to "squawk box. we are live from the nasdaq market site in times square. it is so empty out there now it is a phenomenon that the world, we think the world, pays attention to it. i wonder where people go to the bathroom. >> i know. >> you know? we do have a place outside here at our entrance that gets used frequently that won't accommodate everyone? >> there's nowhere to go you stand out there for eight to ten hours. >> it depends? >> or the street at large. let's look at the futures. the futures right now down 80. down 77.5.

nasdaq down 21 s&p down 7. ukraine president volodymyr zelenskyy speaking with president biden and a joint session of congress net. kayla tausche has the latest good morning, kayla. >> good morning, becky in the first trip outside of ukraine since the war began, volodymyr zelenskyy spoke to the american people and congress as the war continues in the second year which will be a turning point. >> our two nations are allies in the battle next year will be a turning point. i know it. the point when ukrainian courage and american resolve must guarantee the future of our common freedom the freedom of people who stand for their values >> reporter: volodymyr zelenskyy still donning military fatigues

praising the american military might that has helped his army succeed. he said with some levity, they need more. >> we have artillery thank you. we have it is it enough honestly, not really >> reporter: several other elements of assistance remain off the table according to the officials and lawmakers. that includes fighter jets and longer-range missiles that could hit inside russia and more lethal drones seeing as having the potential to widen the war volodymyr zelenskyy's plea for more aid comes as house republicans grow skeptical set to top $100 billion this week. the message was this is not charity. >> thank you, kayla. let's look closer at the visit from volodymyr zelenskyy to the

united states and what to expect in the next year michael o'hanlon is with us from the brookings institute. michael, good to see you what do you take from the speech and the message with congress? how do you think it was received especially with the new congress coming in? >> becky, i think it was a good speech we don't know where this is going. there is part of the republican house that is going to simply oppose this because they want to divert resources elsewhere and oppose anything that is important to president biden there is another part that is a fair question as the year unfolds. is this war winnable on the terms that zelenskyy thinks it is can he liberate all of ukraine and drive russia off the territory? a lot of analysts are skeptical. there may come a time where we have to think is it advantageous

and prudent to persuade president zelenskyy to look for a comprcompromise whether crimea or donbas region or the nato membership in trying to bring ukraine in the western alliance is a bridge too far we will continue to provide weaponry we are topping $100 billion in 2023 if this is producing a stalemate, what should u.s. policy be at that time it is a fair question for republicans to ask >> what is the reality at this point, zelenskyy and putin will say there is no room for negotiation. >> they will test their theories for putin, see if they will crack and for zelenskyy, the republicans and the direction.

keep getting better weaponry and stre strengthen the army. i think both sides will go into the winter and spring and see how well they will do. people, i hope, will take stock of complete victory is plausible by the time we get to late spring or summer that is the early window for negotiations willarise. >> zelenskyy said if we have given enough, he said no and you heard the feedback i don't know if it was shock or laughter he is asking for longer range missiles are those things we should give him? >> i would provide the tanks i would help him build a maneuver force pounding away at russian positions with artillery is a slow way to win back territory i don't think it is going to get him that much. i try to do estimates based on

excellent work for the study of war and the maps they are providing. i think russia holds 17% of ukraine going back to pre-2014 borders. the max they held in the spring was 22%. for all of this fighting, ukraine won back 5% of the total territory and a quarter of what russia once held this will be a long, slow war. yes to tanks, but no to long-range missiles. i agree with president biden's decision not to give ukraine that capability. >> who has the upper hand here ukraine or russia? >> ukraine at the margin i don't think it is enough to win back crimea as you know is a geographic peninsula which has been held by russia for eight years. the idea that ukraine can get that back or the donbas region

we are seeing trenches look like world war i trenches they have deepened preparation it is hard with a slow slog. for that sense, stalemate has the upper hand >> michael, thank you. >> thanks, becky when we come back, under armour tapping a new ceo. and you don't want to miss our interview with appaloosa management founder david tepper. joe has been talking to him. "squawk box" will be right back. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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we are watching shares of under armour today the company has hired marriott president stephanie linnartz as ceo. she helped the hotel digital presence linnartz is on the bethoard of

directors of home depot. collin brown who is interim ceo will take over his position as chief operating officer. joe. coming up, it has been a rough year for bitcoin down 63% we will talk about the crypto winter that's coming up right after this break >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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♪ senate majority leader chuck schumer signaling a spending bill breakthrough. speaking just before 2:00 a.m. last night, schumer says he believes the chamber will be able to lock in an agreement today, but the work still not done yet they plan to hold a rare vote to

get the ball rolling on a finalized deal but that deal could still fall apart. >> more than 4,000 pages what do they agree to change that makes you say, okay, now it's okay, now it's fixed? >> right it's not -- >> you've seen the stuff -- there was some clause that made some senator happy to say, okay, now i'll vote for it and my guess it was not a takeaway of spending, my guess is it was additional spending for their state. >> there's border protection money that they're funding in there. >> i saw that. not allowed to be used in some places. >> not here. over in the middle east. three or four different countries where we're going to do border protection. >> you argue for a few hours, now we're set. >> none here down there right now, it's so cold, down at our southern

border a new bill introduced in the senate yesterday seeks to force social media companies to submit internal privacy protection data to independent researchers it will compel companies like facebook and twitter to submit data on ad libraries, statistics, viral content data and ranking and recommendation algorithms they have to disclose it to researchers who have been approved by the national science foundation the ftc would enforce the policy and companies could lose immunity from section 230. hundreds of tyson food employees are set to leave the company as it consolidates its corporate offices next year. the country's largest meat supplier gave them the option to

relocate to springdale, arkansas 90% of the employees in the chicago office said they weren't moving they plan to depart the company by the time the offices close in the middle of 2023 it's a reflection of a strong jobs market. if you think you can find a job elsewhere, you're not going to move your family. when we come back, sam bankman-fried is back on u.s. soil this morning. that news comes as his former associates plead guilty to fraud charges. and then at 8:00 a.m., david tepper will join us to talk markets, the fed and much more "squawk box" will be right back. >> announcer: squawk coin is sponsored by bitwise the world's leader in crypto index funds.

good morning can stocks build on what is now a two-day winning streak not according to the futures they're slightly lower ahead of the opening. we'll see where things head from here part of the reason for yesterday's positive session, that surprise in consumer confidence data showing resilience

we'll speak to mickey drexler. and a powerful storm wreaking havoc for millions of americans. we'll tell you what areas of the country will be impacted check your flights before you head to the airport. the second hour of "squawk box" begins right now ♪ good morning and welcome back to sidewalk s"squawk box" c i'm joe kernen with becky quick. we're still -- it hasn't been a great start -- it's not a start anymore. it's the -- we're almost done. it's been sort of like the rest of the year. so we're ready for december 31st at this hour, you can see, right

across the board, check out treasuries take a look there. about where we've been after since the doj with that surprise move 3.64 oil, closing in on 80. it had been down at 70 $79.87 and crypto managing to stay at 16832. a developing story overnight. two former executives at the top of sam bankman-fried's crypto empire pleading guilty to federal criminal fraud charges this comes as the disgraced founder finds himself back on u.s. soil today. the u.s. southern for the southern district of new york says that caroline ellison, the chief of his crypto hedge fund alameda, and gary wang, one of the cofounders of ftx, pleaded guilty to criminal charges that they helped orchestrate the year's long scheme to defraud

investors of ftx both are now cooperating with prosecutors. that was just released this morning. this happened under sealed charges that took place on monday when sam bankman-fried was first expected to be back in the united states. it makes you wonder if this was all waiting until he had signed away his extradition, the right to be extradited back to the united states. all of these charges were released last night. that's the same night that bankman-fried was en route from the bahamas to new york where he now faces eight federal criminal prosecutors from t-- criminal c. let's get over to dom chu. he's got a look at this morning's premarket movers dom, what are you seeing this morning? >> so we're watching earnings in the tech sector. chipmaker micron reports a loss

of 4 cents a share that was a bigger loss than analysts were looking for. micron also announced it would reduce its head count by 10% in the year 2023 through voluntary departures, it's cutting executive salaries and cutting back on its capital spending plans for this coming year and 2024 as well you're talking about a 2.5% decline in shares of micron coming uphere. carmax shares are taking a hit right now. late-breaking earnings, we're talking down 12.5% on just around 6,000 shares of premarket volume they report profits and revenues that fell shy of analyst estimates due to declining sales for their used car inventory on balance right now, 11.5% loss for carmax

we're going to end with a check on chinese tech stocks jd.com, baidu, pinduoduo, some of the bigger advances right now on the nasdaq 100. this is tied in large part to optimism about easing covid restrictions in china. this time tied to travel bloomberg is reporting that officials are considering a change to travel policies that would get rid of requirements to quarantine in a hotel or some kind of isolation facility, opting for a monitoring program that would last at least five days after arrival that's according to a person familiar with the discussions. travelers are required to isolate for at least five days or more. but a monitoring program might be a step in the right direction. becky, back over to you. >> thank you very much >> did you read some of the

recent -- coming out of china. the crematory are overwhelmed, hospital beds overwhelmed, there's a lot of evidence. but they were up to seven deaths this weekend and they took one back they revised one oh, wait, it wasn't seven. it was six >> you heard scott gottlieb here yesterday, there's way, way more than they're telling us. would you believe any of the numbers that ever come out of china, but especially these numbers? >> right three-year total is something like 1500, they say. which if you were the ccp, you would be like, global pandemic, we've lost 1,500. >> i don't know who they're fooling. they're not fooling us or anybody internally people are going to know more people than that people are going to know people in their own circles who have passed away. >> or the smoke from the crematory. a recent report suggest that is the bureau of labor

statistics might have overstated job growth in the second quarter by a million jobs. once again, steve, i could take that as a good thing or -- it could be good or bad maybe the fed doesn't need to be quite as mean, quite as grinchy. >> yeah. you're absolutely right, joe there are huge monetary policy implications for this. first, we need to understand what's going on. this new data series creating some economic and political controversy by estimating the national job growth might have been overstated by a million jobs in the second quarter it's called the -- an early benchmark revision they use quarterly data. it's designed to give an early read on payroll revisions by state but they also calculate national chains and that's where the controversy comes in the philly fed believes its early report could show turning points in the economy before the

other payroll data that we all follow, especially when it comes to states. they warned that it can help show the direction of revisions but it's not come payable to the bls. in the fourth quarter of 2021, they think payroll grew by 7%, more than the 5.3% reported by the bls. in the first quarter, they think it grew by 3.7 by 4.4. and the second quarter, it was especially zero growth over the three quarters, the difference is 0.7 percentage points, less job growth. senator rick scott saw this data he called it a coverup sent a letter to the biden administration demanding answers. the twitter sphere is alive with this controversy they say it's the result of different data sets. they agree the job market is slowing, but they point to this

other strong data that's out there in the second quarter and since then including you've got high wage growth, low jobless claims and say it's tough to say that there was zero job growth in the second quarter. this data is eventually going to be used by the bls to revise numbers for the whole year, for the whole country, but we won't know who is right and what's right unfortunately until early 2024 joe mentioned the monetary policy implications. another question here is whether the bls could find a way to use this data for quickly. give us a better picture of the job market in realtime it doesn't work in this world today with all this high frequency data to have to wait more than a year to know what's right here >> how long have we been talking about cooking the books on these numbers too? it goes all the way back to welsh. i'm not sure what -- that brings us back to what would be -- >> jack was unfortunately just

wrong about that, joe. >> i know. there's always people that say, oh, my god, the election, these numbers aren't real. there would be no reason at this point -- it's kind of counter -- i don't know what the biden administration wants the fed to do i guess they want them to be neutral. but, you know, nobody loves interest rates going up 75 basis points at every meeting. that doesn't help the current administration when you're trying to put the breaks on an economy and trying to raise unemployment and hurt the housing industry >> yeah, i mean, this -- it's not the way you would orchestrate a conspiracy, i don't think. but the other thing that i find always interesting is when people say this is a government conspiracy, i ask, how do you know it's a government conspiracy guess what, there's other government data that shows it's a conspiracy it's always the case when somebody says, this is the real unemployment rate. how do you know it's real?

there's other government data that shows the real unemployment data i wish they would urge the bls to do a better job and maybe provide them with more funds and a mandate to update the way they gather this data this data is out there, joe, and i've been pounding the table for a long time. they must be able to find a way to get that state data and move it over to the national data so that we can know in realtime because as you say, joe, the consequences, the implications are huge let's say the fed is making a mistake here and the job market isn't as strong as they think. you're right, they shouldn't be hiking quite as much and then, of course, there's the other data, unfortunately, which shows that the job market was pretty strong. we would all benefit from better data and i just can't stop pounding the table enough on that >> all right thanks, steve. >> sure. >> going to say, he dropped the "l" and it's just bs, right?

i'm not going to say that. >> okay. >> too late. >> that's right, i did. when we come back, china's rollback of many covid-related restrictions has been jarring and sudden china's beige book, international ceo leland miller will join us on what's ahead for the country and companies that do business there. later, mickey drexler, the founder of drexler ventures and gap ceo will join us to talk about inflation, consumer and the holiday shopping season. "squawk box" will be right back.

nike shares have soared this week they outran estimates delivering a beat on second quarter earnings and revenue nike's china sales rebounded as covid restrictions eased a closer look at china's growth picture, we want to bring in leland miller. leland, this was pretty good news, the idea that things looked better in china when they opened up restrictions at this point, it's hard to figure out what's happening here it sounds like in shanghai, at least, and probably other places in the country too, things have shut down once again schools are closed, plummeting numbers of people taking public

transportation it's hard to believe any of the numbers that china produces publicly what are you watching? what are you seeing? what do you think about what's actually happening right now >> i think there was a lot of optimism when covid zero was pulled back, you would see a resumption of economic activity. that was never going to happen simply because the virus was going to take over the second covid zero went down you have a number of tough months ahead at some point, you're going to see a bounceback you're going to see at least this wave of covid past us and you're going to see a reactivation of the economy. but i think people have been way too optimistic on how fast this could happen you're going to have to have the virus sweep through all of china. you have firms who have held off for months and months and some cases from years from investing, borrowing and hiring because they're worried about zero covid lockdowns. it's possible you see some of those depending on how bad

hospital -- capacity looks if there is a big rush of the hospitals. a lot that we don't know we know it's not going to be good for the next several months at the very least. >> i had seen estimates that maybe 60% of the chinese population will have been infected in the next 90 days does that sound plausible to you. >> we've heard numbers that are higher than that so we're not epidemiologists we're watching the economy and are as interested in the spread of the virus as anyone else, but we don't know. and china's government is not making it easy for us by claiming there's only one or two or three deaths in the last three weeks despite the fact that you have, you know, funeral homes overflooded, crematoriums overflooded. it's very hard to get an idea of just how hard and how fast this is hitting china in some people think they have covid but they have the flu because they've been trapped inside for at least a year the situation right now is very

unclear. but it's not -- it doesn't look like there are the conditions for an economic reactivation any time soon. it will happen, it's just not yet. >> i mean, second half of this year, the second half of next year, probably a very different picture, maybe even the sector quarter, though. >> yeah, i think so. and this is going to depend on the spread of the virus. when you have covid zero and covid this wave past us, you have a very interesting situation. you have terrible 2022 numbers that are going to be the basic comparison the economic data are going to jump and look great. investment -- you'll have investment spending for the first time in awhile theoretically, consumers will jump in. you'll probably see some modest stimulus on top of that. i think this will get people excited and this is the than the funds have been going so far into chinese stocks for the last month or so. again, this is something -- it will take awhile to play out when it does, i think it could be potentially a very impressive

rally, but, you know, this is sort of a hid fake if you're a long-term investor you'll see two to three quarter rally and the dynamic will be the long-term structural slowdown on top of it. we're in for a little bit of a roller coaster going forward. >> leland, how do you try and best figure out what's going on, because the numbers seem more and more ridiculous coming out of china, not just from what they're saying about the number of covid deaths, makes you question every other number they're putting out there. >> well, i mean, this is why we started out over ten years ago because even under optimal conditions, the numbers aren't good enough. so what we do is we track business conditions around the entire country what's very, very important for us to track right now is investment, borrowing and hiring what are firms looking at in the future that encourages them to either be active in investing, borrowing and hiring or not active and the most important takeaway was probably that until all this

is over, corporates don't want to get back in the mix they don't want to borrow. they don't want to invest. they don't want to hire. there's been this optimism, you saw that last spring when you had lockdowns and they were eased and everybody expected this explosion in economic activity that was never going to happen and didn't happen for the simple fact that corporates don't like what they're seeing. when they see the coast clear going forward, you're going to see our monetary stimulus jump, fiscal stimulus. we see that next year in modest amounts. then all of a sudden we're back to a more stable economy we don't have that now and we haven't been seeing that for the past couple years. >> these are international multinational companies, u.s. companies, who are you talking to >> all of them we try to have the most representative reflection of the economy that we possibly can we're tracking state companies, tracking private companies, foreign companies, chinese companies all over every sector and really the message has been quite clear for the past year,

they don't like the policy they don't like covid zero and they don't like covid right now. but this too shall pass. >> leland, thank you >> pleasure. coming up, right after this, is justin bieber's creative work really worth $200 million? jon fortt will be here to weigh in. and next hour, a rare interview with david tepper. "squawk box" returns after a quick break. >> announcer: time now for today's aflac trivia question. what state is the leading producer of cranberries? the answer when cnbc "squawk box" continues what's this, a hospital bill? mm-hmm. for 1,100 bucks? ga-a-a-ap! looks like your wallet may need a sling too. tell me about it. did that goat say "gap"? he's talking about expenses that health insurance doesn't cover. eh-ehh-eh! well i'm talking about the money aflac pays to help close that gap. aflac, huh? aflac! ga-a-a-ap! aflac! gap... uh-oh!

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>> announcer: now the answer to today's aflac trivia question. what state is the leading producer of cranberries? the answer, wisconsin. the state accounts for 63% of the nation's cranberry supply. justin bieber is on the verge of selling music rights to a publicly traded uk investment company backed by blackstone in a $200 million transaction according to "the wall street

journal. could his work be that much or are the pop songs the last hyper en inflated asset due for a correction i have a little bit of a bone to pick with you. you didn't do this about bob dylan or bruce spring stream are you not a believer >> let's talk about this joe yes, bieber is a giant, giant pop star but he's 28 and his music can't be worth $200 million 81-year-old bob dylan's catalog sold for 300,000,002 years ago last year, bruce springsteen sold his catalog for 500 million. but he's the boss. those prices might be crazy too, but we know their libraries have staying power.

blowing in the wind and born to run are part of the great american song book love yourself and baby might get there, but we might need a few more years to be sure. we've known that bodies of work had value in the modern age since michael jackson bought the publishing rights to bomost of h beatles catalogs these days, in the streaming era, asset managers like blackrock see catalogs of hit song as gold, movies, video games, and they want to own the hits and the hits do have major value. but not 200 million for bieber's catalog 15 years in his career it's a bubble, joe >> the value, though, of these catalogs has held up well. beatles or mj, those things -- they don't go down think of taylor swift. maybe investors know what they're doing. >> yes, be careful

on the other hand, bieber's catalog is probably worth every penny of $200 million. there's more to these music investments than you think case in point, ryan tedder he sold a sake of his music catalog for $200 million last january. he's the lead singer of one republic he helped produced the 21 and 25 albums from adel and 1989 for taylor swift and helped right songs for beyonce and black pink his catalog includes slices of all that and more. for some of these artists, it's not just about the song itself in this era where tiktok, spotify, and all kinds ofother services need music to operate, the powers that own hits get data, special insight into emerging trends and services, early insight into the hot new thing.

because bieber was the standout male solo artist of the last decade, his music will be a marker for millennial tastes for decades to come. by owning a piece of it, investors will get royalties and valuable clues into what digital projects and services young consumers will want next if you think that's not worth 200 million, what do you mean, joe? >> all right they have more stuff written in here, but then i want to talk to you on the data side he's got a little piece of so many different kinds of songs, is that a -- i don't know -- >> despacito, it's the top latin hit. >> a trillion views or something. >> he's like the kevin bacon of millennial tastes and trends it's like connected to everything so if the new service pops up that the young people want to be on and music starts streaming there, if you own pieces of

bieber's catalog, you're probably going to see that and understand it first. you can buy shares in it >> i guess, john, we all live in our little echo chambers i'm always saying, all right, even an average one-hit wonder from 40 years ago, the scorpions or 38 special -- >> they both have more than one hit wonders. i >> i'm saying we're still listening to their songs i don't know of any other -- is there a single millennial rolling stones, pink floyd, even deep purple, is there anything -- >> here's the disturbing thing, joe. go into spotify and look at the number of streams of some of these classic songs and compare it to drake or bieber. you'll see from a data perspective, the number of, like, little data points that light up, some of these newer artists are going to get you a lot more intelligence into what

young people -- >> i'm telling you that i'm not -- >> taylor. taylor would be -- i'm not the person to ask. but i am -- it's me, though. when i have classic -- >> it's not us, it's you. >> i have classic vinyl on i here led zeppelin. i hear things from the late '60s and early '70s. >> i do too. >> i go, when was that oh, my god, 45 years 40 years, whatever it is but just do not be dissing the biebs, man. >> half was discussing the biebs and the second half was full bieliber >> you didn't put your all into the first half. >> sometimes it's going to be that way this is my last on the other

hand of 2022 of the year. >> that was a good one, though got a lot off my chest thanks, john ♪ my mama don't like you and sh likes everyone ♪ >> who is that >> bieber. >> is he bringing consex back >> that's justin timberlake. >> harry styles, is he an actor or a singer? he just has nice hair? a little out of touch. still to come this morning, mickey drexler will be our guest. we're going to talk retail this holiday season, the inflation picture, how the consumer is doing right now. what they're interested in buying and later, we've got hedge fund titan david tepper he will be our special guest that interview is coming up at the top of the hour. meantime, check out the futures ahead of the jobless claims data that will be coming out in a

little over an hour. the nasdaq off by 36 infor ofes after two days gas the markets. big gains yesterday. "squawk box" will be right back. ♪ ♪ a cyber-attack can grind everything to a halt.

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welcome back to "squawk box," everyone we've got a few stocks to watch this morning let's start with shares of under armour that company has hired stephanie linnartz to be its next ceo. that is effective in late february she's been with marriott since 1997 and is also a member of home depot's board of directors. the company's founder said he would remain in the executive chairman role. the stock right now up by 5 cents. micron shares are lower after the chipmaker reported a larger than expected quarterly loss and revenue that fell slightly short of what the street was expecting the company announcing a 10% cut of its workforce and a note from piper sandler this morning naming yeti one of its top picks for 2023 the firm says that lower straight costs next year should help the gross margin recovery the price target that that company has right now on yeti,

$57. the stock is at $41.65. as we close out 2022, we're ending a cycle of subdued m&a. joining us now is cohead of global mna at global markets any reason to think that next year will be better than the last >> thank you for having me this morning. i would say if i look at '23, i expect the first half to be subdued like the second half of this year. but i also look at '23 as being the baseline for as what we've done this year, which is still a $1.6 trillion year in the u.s., 3.6 trillion globally. maybe a little bit below those numbers. if you compare it to '21, it's down 37% globally. 43% in the u.s but the reality is, it's only off about 8 or 10% versus the prepandemic levels

and i think there's such pent-up demand, joe, that when we start getting into the back half of the year -- and the second quarter is a key inflection here, when do people start getting comfortable with the new normal do they feel comfortable financing deals? we're seeing deals get done right now that are some glimmers of hope in terms of what might happen going forward >> what is goldilocks for m&a? low interest rates are great for m&a but valuations are high, and then interest rates go up, you've got everything -- everything is bargain prices because they've all sold off 40 and 50 it brings in different buyers. maybe you get corporate buyers versus p/e buyers. is that how it works >> look, i think, joe, when we look at what's, quote/unquote, goldilocks, i think ultimately it comes down to when is that ceo, when is that buyer, when is

that board of directors confident enough to pull the trigger on a transaction right now the last two quarters we've seen ceo confidence as the conference board measures it at the lowest levels since the '08/'09 credit crisis. when you look at that level of confidence, the peak confidence level was in the second quarter of last year, which, by the way, happens to be the largest volume of m&a that we've ever seen in history. so as that comes back, as ceos, as boards get more comfortable with the current environment, i think then at that point you start seeing people finding ways to do deals. right now, the parties that are doing transactions are those that aren't well capitalized, well-financed, have access to cash if you look in the private equity space, you're certainly seeing deals being done by firms focused on enterprise software they have just raised some --

one of the largest deal -- the largest tech-focused fund in history. they have access to the direct lenders who are basically focused mainly on sectors like software, like annual reoccurring revenues you've got cash-rich companies in tech and health care doing deals. so when you look at the transaction last week, certainly they're sitting on a fair amount of cash, but they have access to investment financing those are going to be the parties that are leading the way. as soon as we start getting a baseline that people are comfortable with, joe, if you back up to when the pandemic first started, everything shut down in the second quarter of '20, but everybody got comfortable with that environment. they started figuring out how to render businesses in that environment. once they had that confidence, then you started seeing deal flow really pick up. so we think the first quarter is going to be challenged but really, the second quarter of next year is that inflection point. people get comfortable that i have a line of sight as to what

this, quote/unquote, potential recession or time frame of recession could look like. i understand the new rates in terms of borrowing maybe it's a matter of getting comfortable with where valuations are, whether you're a buyer or seller. certainly bridging that gap is a big issue. and in today's environment, i think parties are looking around and saying -- if you're a public company, you see where public stocks have traded and you're having to re-adjust your thoughts on value. if you're private, i think that takes a little longer. because you don't have a day-to-day marker that tells you what you're worth, what your peers are worth. >> can you just say with any certainty, is it a c conglomerizing environment there's companies of scale that

aren't doing very well >> look, i've been at this for over three decades, and you certainly see consolidators eventually become, quote/unquote, deconglomerizers. we've gotten the news in terms of ge and j&j discussing how they were going to simplify their businesses last year you're going to continue to see a bit of that, and especially when we're coming through a time period where folks have been focused internally when you look at the last couple of years, i think a lot of companies have looked at their own businesses and tried to decide, okay, how am i better positioned going forward maybe it makes more sense to divest or split a business into pieces if i look at our own pipeline, that's a high level of activity. corporate -- i do expect some

larger corporates to consider significant divestitures or significant spends or splits >> are you at home or rbc? >> this is a real tree, joe that i bought i'm sitting here -- >> i love that >> i love that place >> okay. >> it's great shopping >> fun things for the kids >> have you been out -- you've been to great swamp out in -- >> no, i haven't been to great swamp. but we're -- we're in the office four days a week, sometime five, and, you know, today we just happen to be at home. >> okay. great. all right. appreciate it. happy everything happy everything i don't know what to say happy everything merry christmas. >> merry christmas, happy holidays, happy new year

people get so uptight -- >> what's the right thing to say? >> should we still keep using -- you saw stanford don't use it don't do it. a lot of countries in the americas u.s. citizen the virus must die look what happened to that guy. >> somebody this morning got mad that i said happy holidays to somebody >> that's a backlash -- when we come back, freezing rain, snowflakes, frigid temperatures, all wreaking havoc and impacting millions of americans ahead of the christmas holiday. that was all written into the prompter, by the way we're going to get a live report from reagan national airport next and then an outlook for the retail sector ahead of santa's

arrival. former j.crew ceo mickey drexler will join us you can get the best of "squawk box" on your favorite podcast. "squawk box" will be right back lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network.

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if you are planning on traveling for the holidays, you better make sure you check your flights before you head to the airport, a powerful winter storm is wrecking havoc from the northern plains over the next few days katie, what's the scene there behind you >> reporter: good morning, becky. it's pretty much business as usual right now in washington, d.c. we're not seeing a lot of delays and cancellations just yet but we don't expect that to last as the storm makes its way and specifically into those midwest regions, the airports there are going to be at a standstill and that's going to affect the hubs like dc and atlanta as well. so we are expecting to see a lot of delays and cancellations later today and into tomorrow. also, the two busiest travel days of the holiday season, there's going to be more than 7 million americans making their

way across the country to try to get somewhere for the holiday and that's a third of the country that is going to be en route somewhere. so we do do expect this storm colliding with busy travel days, will make for a lot of headaches. airlines are trying to get ahead of it. american airline has issued travel alert and is they've waived any change fees between now and the first of the year saying if you can change these flights and try and get out of a different time, go ahead and do that try and beat what could be a potential snag in your plans so they are advising passengers to check before they leave the house to see if their flight is delayed or potentially canceled and then maybe be on the front end of rescheduling that because there will be a lot of people over the next two days trying to reschedule their way to a holiday gathering. becky? >> my guess is even if the weather was perfect across the country there would have been some snags this time around. so many people traveling we know the airlines have had trouble getting staffing issues

up and running how are we going to know which of these problems are caused by staffing which are caused by weather. >> absolutely. we are actually reaching prepandemic travel numbers the volume of travelers is going to be particularly high this season already you can imagine these flights are already booked for christmas and now you're going to have people trying to rebook on those flights. there's going to be a logjam across the country as this storm collides with these busy travel days >> katie, thank you. coming up, pretty soon -- this right away. mickey drexler talks inflation, the consumer and pressure on the retailer this holiday season and then at the top of the hour, david tepper is going to be our very special guest for all those things and much more, "squawk box" will be right back

it is the holiday season, but retailers are still facing pressure from high costs that pressure has resulted in deep discounts in sales. maybe good news for the consumers, but not such good news for the retail companies that are going to have to take those margin hits. joining us right now is mickey drexler. the founder of drexler ventures. he's also the former j.crew and gap ceo and a retailing legend mickey, thank you for joining us today. i know you've seen a lot of

holiday seasons, a lot of christmas seasons, shopping seasons, what does this one compare to what does it match up like a friend of mine just called me. he told me not to be too depressing but i'm not sure this will measure as too depressing. what i see -- again, this is myy opinion, is slow business, headline wise, slow business, tough business since early october. too much inventory, and the reason, if you want to know about inventory, most of the goods were placed nine months ago. this is what was good then, there was supply chain issues then which there are no longer and i think all of us got a little into bulliant about the future and a perfect storm happened and october business slowed and therefore inventories

climbed. and you know how depressing tlas i'm not very optimistic and i think that discounts are rampant, starting with pre-black friday and so i don't see -- there is only five days left, four days. alex mill's business is quite good, because we're a little store shop that acts big big -- small is the new big in my opinion i think i've been involved in big companies. i'm nowinvolved in the relatively small companies so the bottom line is -- and it is supposed to be crazy cold in the next three or four days. so that is what i see. toughness still.

and it is -- it is thursday, friday and saturday. >> three days left before it is under the tree that is why we love you. somebody calls to try you to be a spin doctor and you say no, i'm going to say what i'm going to say any way we appreciate that. >> thank you. if you have a lot of discounts, ithat does mean the margins will take a hit. is there anybody -- >> 100%. >> yeah. >> there are some outlier are who are doing quite well but the margins will have to get hit in my opinion because we all want to be clean for 2023 the question i have, i don't know the answer, is how much is too much inventory to be clean in 2023. >> and that is what everybody is trying to figure out nike shares were significantly h higher after it had got

inventory down a little bit but it is still high i think it was 43% versus 44% before >> well, i don't know how much growth there is in sales but that sounds leike a lot of inventory. >> they were able to shake it off. the street it had up, and it was direct to consumer business. they're doing much more direct to consumer and much improved and also what they said about china, that china had picked up. but i think that question of how much to order, what is too much heading into next year is the big one. what does it mean -- >> yeah go ahead. >> you said you don't have the answer, but you have to do something. you have to put orders in now. >> well in my opinion, well we're be conservative on inventory and sales. because too much inventory is the worst enemy one can have because that creates the perfect

storm. and i think the conditions out there, and i'm not an economist, but i don't think in three months things will be, oh, it is all good stock market and inflation is still with us. certainly in the apparel business and when they say in flation was dropping, so if milk was $5 a year ago and now it is $8, that is measured as dropping. but it you look at prices, or even the consumer demand, housing et cetera, restaurants, tvs, my new tv, i still haven't figured out how to work it so i need a ph.d in television but there is too much product out there. in and our business, for sure, to go online, aside from the discounts, you have to scroll for like five minutes to get finished with the sweater

category we're all guilty of that we've cut back at alex mill dramatically and because people want the best they're very selective and so our spring assortments, style wise are down at least 30%. and it is good good news. some of our people, team members, oh, it is less. less is more in most businesses today. you go in and you need a point of view and in terms of merchandise, product is always number one and the way the store looks and feels, the marketing and the buying and i don't know if that is in the industry, and i'm just an observer of what i see and read, is a priority. produ product sells goods. >> and very quickly we have to run, this is a situation where the retailers were chasing out

the sales and now the sales moved on and now the retailers will slas back their inventory that is the way it is going to be for next year you think >> 100%. but everyone reacts one way or the other. we all overreact we read things that happened yesterday. rearview mirror. but in my opinion, we can do the same or more business with less inventory that is more focused in depth on the best and our campaign for november, december, which i think is helping us, is keep it simple. this is what you buy, and we're staying as much away from clothing sizes because the returns, when it is a fit issue, are the biggest reasons that online people return goods it doesn't fit that well >> so you have to con vvince thm

that the one size fits all. >> well scarves and hats and at alex mill we're doing that and i'm a student every day. i should have thought of this years ago, keep it simple and not too many sizes. >> mickey drexler, thank you, sir. >> thank you appreciate it. have a nice holiday. >> you too coming up, david tepper joins us next right after this break. for his thoughts on the market and inflation and the fed and so much more. the futures now ahead of all of this, down about 58 points on the dow. 'rin t rwee heed across the board. but it is early. we'll be right back.

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join the millions to finding success on their own terms. start your journey with a free trial today. good morning, stocks coming off the best day of the month. the dow shot up more than 500 points yesterday, the futures are lower at this hour in just minutes we have an extended h extended interview with david tepper meantime, we could see movement this morning on the $1.7 trillion government funding bill we're going to speak with tennessee republican senate big hagerty about that and two former colleagues of sam bankman-fried just pleaded guilty to federal charges. that is likely to significantly

ramp up the pressure on the ftx founder as he arrived in the united states so face the music. as the final hour of "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the market site in times square and i'm becky quick along with andrew. you'll see how things are shaping up, keeping me in the picture. >> u.s. equity futuresa could see are in the red there they are about 61 points now. 8 on the s&p nasdaq down as you could see about 37 points. treasury yields, we'll take a quick look at those before we get to david

there you could see, 3.65% in the two-year and 4.2 we're joined by a very special guest to talk smarkt markets david tepper, founder of appaapa lisa management. when i say happy new year, we're at times square. where it is going to be crazy in a little over a week and in your view, is it going to be a happy new year with what we saw in the last year, it couldn't be -- i don't know whether we characterize it as happy. family issues matter but 40-year highs in inflation and the fed in a tightening phase and a bear market. similar for next year, do you think? >> similar in that we'll have this big of a decline, is that what you're saying >> will it be a teetightening yr for the fed. will inflation be on our radar

screens for the foreseeable future >> talk about things one at a time inflation, it is coming down you see it every day i think that it is backed that and it is forecast and people are -- because of that and other the other hand, you have a dislocation, a structural change in the laish mbor market labor shortages for as far as the eye could see. once we get down to a certain level of inflation, whatever that level is, it is going to be very stubborn and the fed knows that and because of that, this fed and the ecb and the boe, and as we saw with yesterday, the day before yesterday, i get my days in japan mixed up sometimes, the boe actually have tightened. and the ecb and the fed have --

and boe have signaled bigger tight ebbings. and sometimes they just tell you what they're going to do and you got to believe them. i kind of believe them. >> and it is global for that matter so we can always -- >> yeah, you have the fed. it is at -- it is 4.25 or 4.32 or something like that this morning. they put out the forecast. probably reaching a quarter of 5.25 this year and they're going to keep rates higher for a while. that is what forecasts say if you believe there is an underlying inflation rate, labor based inflation rate, that makes a lot of sense it alsomakes a lot of sense to the ecb and the boe, and i think they see that and not try to get out of control if you look at the -- i mean the

ecb last week on either the fed came out and he wasn't easy, but he kind of projects like a teddy bear you want to cuddle him when he speaks and so the market kind of cuddles him. ee even though he's a bear. he's a soft fuzzy bear and the next day ecb comes and she's like a grizzly bear and she's growling and saying we're going to 50 now and doing 50 again, next i guess in february 3rd and then we're going to do another 50 and we're likely to do another one after that. we'll see how data goes. so she's telling me going to go to 3 or 350 in europe. they have in the beginning of january here, the boe is doing qt i don't know i have everybody tightening and telling me they're going to tighten more and i have markets that don't believe it.

i have a german two-year at 252. when they'll be able to make money putting in the bank if she goes to 350 by 350 april 14th. so i can't like bonds that much particularly in europe i can't love the two-year here which is trading at 420. they tell me they're going to go higher and stay high how do i like that stuff when i don't like the short end of the curve and i don't know how long into the curve at some point, it makes it kind of a very tough competition for other assets >> yeah. >> that is what they're telling you. i don't tell you that. that is what they're telling you. >> and you told me, i don't know when it was, but you've believed them all along and you told me that. >> two things. a long time ago.

it was a long time ago, joe. it feels like i've been married to you for a long time you nag me as much as if we've been married for a long time. >> in a good way >> in a good way always a good way. but, um, back then, we talk about the white paper that did with the banks and they told you what they were going to do i believed what they were going to do. and thenin 2010, i said listen had a put. they're telling you what they're going to do. so i kind of tend to believe when they tell me they're going to do something. then they change it but that is what they told me they're going to do. and now after that great formula, now i'm not going to believe what they're telling me they're doing. i'm not going to believe what they're telling me they're doing. now the market is saying okay they're not going to carry forward because we already see the inflation going down but they're looking at services

inflation and not looking at what may be structural or misaligned labor market versus labor supply that is participation rate of older folks over 55. it is sinking and you can't -- migrants can't work in this country despite we have to change that policy to get them in here and working. we're a million short. you read that all over the place. so, i think there is those sort of things and that they're worried about all of the feds are at the same time i hate when i had coordinated tightening we have coordinated tightening and then tightening -- now three central banks say they're going to do more i had a pretty swift $95 billion starting in january. the ecb, the boe, qt i don't know i'm a simple guy, joe, i'm not

that smart but i listen to those sort of folks. >> and you told me that the fed put, that you rode to great success, that is gone, dead and buried what about you also point out -- >> but it is just maybe a thousand points lower. or 1500 s&p points lower but it is nowhere near. and they're basically, listen, they're basically not happy to have asset inflation here. to lean into the -- >> the fed's job is tougher because as you point out, some financial conditions have actual actually loosen and you mentioned a few seconds ago that the market doesn't seem to believe the fed. what does that mean? so they have to act tougher, talk tougher and do more things to -- >> well here is the risk you have yesterday, you saw the

decline but the truth is that was november when mortgage rates peaked in early november well they're down 90 basis points since then. that doesn't really help you a lot. junk spreads, got 150 basis points since it peaked in early october, late september. that doesn't really do a lot for the fed. the 10-year treasury, which you see every day, down 60 basis points all that doesn't do a lot for the fed. all of these different things being easier since then obviously the stock market seen the 3600 lows near 10%. but that doesn't do much if you're the fed and talking about how much the market is down and not down, since '19, before covid, we got 7, 8% annual returns that is not so bad historically now this year is not good but the last three years and i'm talking the end of '19, before covid, i mean we have reasonable returns for the last few years based on that rate

and you know, i don't know if 19 was there, or if it was a low point in the market before covid struck so, i mean, i'm looking at that and i've got -- i've got to -- i mean, we don't have coordinated tightening around the whole world. and everybody tightening at the same time too often. and i don't. and i don't have people tell me they're going for further tightening and they don't tell me where they're going to go and you just don't and two years here below where they tell me, if they're going that way on average, so far below it you just don't so i have these -- if you want to call them and i understand people say in flation is down and they should do this and do that and they'll telling me all of this stuff because they're worried about this other underlying mismatch in the labo market but they don't want inflation to take hold and get higher

you don't want to have a steady state that you think after you do things at 4% or 4.5%, they want inflation at 2% so, they're looking at the on when the inflation comes down from 8%, it is going to come down to 4% or something like that they don't want to get in front -- they want to get in front of that. they're nervous about it and the ecb is nervous about it. so it is -- it is what it is >> david, i can't -- >> and it is -- >> and closing up shop, what do you do >> say that? >> i can't imagine you're throwingin the towel and closing up shot over this. it is a tough environment, but what are you doing >> no, we're not closing up shop listen, what i do and what other people do, what a normal investors look at this, you should hold stocks and look

through these things and for the long-term. so to a certain extent that means if you're stock portfolio is -- you're stock market from 50% to long term, you will probably be less long that is what it means to me. because the average person should not be moving around. we're going with a warren buffett would keep things forever so he doesn't have to pay taxes on it. but me, as a hedge fund manager, i'm going to lean short. i'll be short once and i'll democ -- i'm generally an optimistic. i just have that sort of -- lean that way and so it is like, i would probably say i'm leaning short on the equity markets. you know, so, right now. because i think -- i think the upside down doesn't make sense when i have so many people telling me so many central banks

telling me what they want to do. what they expect to do i mean they have -- and it has -- and everybody come on and say well this is going, well they know that stuff but they're worried about the underlying stuff and by the way, if you think that they're wrong, you know out there because it is going to go down, well maybe, maybe they'll pause and realize that -- and i don't know what they're saying, but maybe there will be a small recession of sort and effect prices and with the market, listen, you see these -- i saw somebody else on your show the other day they have a 220 earnings estimate for the s&p. well at these interest rates, where do we have multiples when we have 1% rates so that is the question in the stock market right now what should be the multiple. and joe, you've been around for

a lot of markets, not to give your age away on tv, but these multiples, what should the multiple be. we've lived through multiples, when we were talking 2010, the multiple was like 11, 12 back then, okay coming out of 2009 and those were those rates i mean, to get to this multiple now, if you have 225 times 16, it is 3600 i'm not suggesting 225 is right or you could see what people are forecasting on your show if it is a 16 multiple, you would have said great. going from 2010 and i go to 16, that is a 33% increase in multiple. >> david, will there be a time when -- and i don't know what your gut tells you on when things improve and what leadership would you see coming out of this and in your gut, saying coming out of this, we

have stan brockmiller and he thinks we have muted returns for a longer period than we're used to because of some of the -- of our unfunded liabilities, for whatever reason, do you see this eventually and what is your gut and for how long and what would lead us out of it? >> there is still so much post covid fed balance sheet and that is why they're taking it down. people have a lot of cash still from covid savings and money given to them. so the market probably staying higher than it should be if that is the case, i think sam is probably right. obviously if the market went down 1 ha,000 s&p, you won't hae an upside. i'm not sulgggesting it is going down 1,000 by the way. it is going to be 200 next year,

that is 3200 and 15 is more the right multiple, you know, if you're at 220, that is 3300 or something of that sort i think that is right. with math of some sort so then the returns will be bigger from here, i would have to tend to agree with stan this is going to be -- this is a tough level to talk about robust returns. particularly in the next year. particularly when you have the feds, feds plural is in such a ti tightening mode and the u.s. treasury, i could just deposit my money for the ecb, so much below what that average is going to be over what they're forecasting to be over the next two years. so that this two-year and our two-year, the u.s. two-year and i could go further out, but it

has to go up in yield. it has to go -- if that happens, it has mathematically has to go up in yield. yield do a lot better over the next few years if they do that and that is a big deferential right now. so it is kind of what it is. i mean, those are the numbers. i don't make up those numbers. you could go read -- just go by what they said last thursday you understand what i'm saying this is like, it is what people -- >> believe what they tell us we may not nail exactly what the s&p is going to be, whether it is 220, 210, 230 and then you have to worry about profit margins too, maybe that is too optimistic and then if you put 15 on that you're down in the low 3000s. it is simple. >> this is my problem. i understand that the fed could be wrong, that maybe they're

being too tight or maybe the ecb is too tight and people are thinking they're going to go away from the path why? what did they know that they're looking at that i'm looking at that they think that they're going to go away with that of course the headline is coming down but that is not what they're fighting so i'm trying to understand that but i just -- it is what it is you know what i'm saying these central bankers are where they are they may be very right, that they have to get ahead of this other stuff and that is what they think if they don't want to be known as people who didn't get ahead of this. 4% or 3.75% that they have to get close to to get close to 2%. >> david, do you think that the st stubborn inflation is because of the different labor market and do you think that we have too much stimulus during the

pandemic creating too many dollars for too few goods, the supply chain disruptions and energy policies, is it all above for the inflation? >> if you look at numbers and i'll just talk about the numbers, the participation rate of over 55 is low around the world. that is the people that aren't back in the work force and i don't know why they're going so back so fast with this covid as they get closer to social security. an you have the big baby boomers in here. and we're short migrant labor in this country for different reasons. and whether it is just that we don't -- we haven't had a good immigration policy for a while because of covid or trump policies and migrants stop getting into the labor force they came out of the labor force and it is hard to get them back in the labor force these political people that are coming on now, we don't have a good policy to -- you hear and read the numbers about being a million people short so from the lower participation

rate to a structural thing, this probably doesn't come back around the world and now we have a mismatch so they have to figure out what is that mismatch it is what it is you know the job openings. whatever it is 10, 11 million openings and 6 million unemployed that is a gap. that is not going away so you know, you have to deal with that and not letting that cause inflation to a certain extent i mean, that is typical, that is e-con 101 cost inflation and i think others -- i think that is what they're worried about you have to talk to them but i think they're worried about that inflation rate that is going to be stubborn at 3.5%, 4% and the market is getting excited because of rates coming down from whatever it is 8% to 7%, 6% great. that is great.

that is good but the problem is the underlyin underlying that they're looking at and very difficult and this is why the ecb said we are behind the u.s., the fed will say we're going up to 5.25. because if you believe that number, i'm just filling it out, it is very hard to kill it with a 4% feds fund rate. >> david, you have been such a sage about following the broader macro pictures especially with what the fed has been doing and other central banks for a very long time how long has it been since you've been leaning, i guess short on equities? >> well, i was probably leaning a little long on equities before -- in the last couple of weeks i probably lean short. i was leaning long i've been having very small positions to tell you the truth, becky, in the equity market. as a hedge fund person, i want to be clear, versus what people should do with long-term

investments. but, i mean, the ecb, she grizzlied on me. i was like, you got to be kidding me and i censured a little paragraph that she said to you could have it on your phones you have on your emails or whatever you could read it yourself she said 50 next time and then after that and after that. okay that's good. that's not a fuzzy teddy bear. i like the other guy he still did say we're going to 5.25 but call 75 basis points higher but this was going up. she wasn't warm and fuzzy. she was protecting the german -- >> david, when it was not synchronized then, but everybody was thinking that the long bond, the yield would rise very quickly and you were talking about japan. what was happening in japan.

and you made the call that we're going to stay about where we are and tread water and rates wouldn't just skyrocket and that lasted for like 10 months and then it was totally against consensus thinking but your view point then was informed by what was happening in japan we don't have that any more. you have coordination everywhere. >> you do have that. and unfortunately it is going the other way. when they move their ban 25 basis points it has a tendency to raise our ten year, because of this 7 or 8 basis points. maybe that will move a little further to catch the move that japan just did to widen their band they're 38 basis points, as i look on my screen, i could go to 50 bips, they could widen again to 75 when they tend to do the 10-year. if the fed, if they were worried about going down 100 basis points could play a twisty sort of game and not that they would do this, but they have done this

on the other side, could sell ten nyears, if they're worried about the pick up in the spring of the economy you have recent rate moves in the real market rates, right, and this is just a fact. when you move from the low of 4.25 to 365 and our 60 bips and you when move 100 basis points from the lows from the high yields down on the cdf, on the the high yield, that is a big moving market rates. when you move 90 basis points of mortgage rates in the peaks, that is a big move an it is all easy moves in the markets. in the longer parts of the curve. that cannot lead to tightening, financial conditions have not tightened, okay. recently in the last month now we're getting housing data based on the highest rate possible it came out yesterday. it was i think yesterday morning. yeah so, listen, it is what it is you know what i'm saying everything i'm saying is just what it is

it is what the fed is saying, what the ecb is saying, i could go to quote the boe and what they just did and to answer your question, becky, i have to now lean and it is unnatural for me because i'm an optimist so i have problems with it, but i'll do it. you know, i have to lean a little short as a hedge fund person and again i'm going to tell you, for normal people, for normal investors out there, you should always keep your book and we still have it inside of the book, we'll sell futures or something. but i'll still have my four positions because i don't want to turn them because i hate that kind of mismatch just running a book for regular investors if they have a 50% or sustained for the long-term, but don't be too long if you have a range that you're comfortable with 50% to 80%, i don't think you should be closer to the 80% side of that right now. >> if i'm a normal person trying to play along at home based on

following what you're doing, i think my option would be if i have some cash sitting around, i sit on it and wait and i want to wait for better prices. >> i guess that is right but we're trying to do what i do i can be, listen, if something happens, i'm not going to change so fast right now because there is too many moves, you know what i'm saying but i can't tell you to follow what i'm doing you want to tay long because you don't want to -- your portfolio that is for the long-term. i just think if you have extra cash, maybe you do settle a little bit >> david, there is another time where i asked about, and i keep everything between us what you tell plea to keep it between us. but you intimated tho me that yo don't see a bond unless you have a good flush we never got the flush but we

haven't meet the bottom. could this be a duration flush it may not be a spike like that but it just goes on and on. >> what stan was talking about, which would be, for me as a investor, as a mutual fund, hedge fund investors, whatever, you would hate that, you don't want to that that because it just means it is -- i don't call it misery, but it just makes it less -- it is harder to make money in this situation. it is much easier to make money on the long side of the markets than to puts around and go that way. you know i'm an optimistic in the united states of america i like to be an optimist in that way and i believe in the long-term we'll have growth and stuff. but we're in one of those periods where you have these things going on. and i condition -- you can't ignore it. and everybody can't. and what you said is true, joe, you could sit here more or less

and putz around this level for while and it would make it a very -- for people like your professionals who can make it a difficult environment. and over the long-term, like i said, it will be fine in away. but it kind of is what it is >> right. >> but i think the important thing in the message, if there was a message here today, is just don't ignore what these guys are saying. and people disagree with their policies and what they're doing. but they -- you have to believe in a they see the landscape, and they're doing it for the reasons, some of the reasons i'm talking about. and if you're afraid of it, and i don't think -- i think they won't let a deep recession happen in some sense but it doesn't necessarily bear well for earnings and what the -- you know and the outlook and where i am on -- like we just said when the short end of

the curves are problematic to me you know, just because i tend to believe as a base case when these different central banks and other government officials tell me what they're going to do it has worked for me over time and it has because i talk about it, it was a really great thing on the one side, and a real big opportunity in 2010 with the qe and saying, i said to you a long time ago, what will go up? everything now it is going to be just difficult. just difficult for things to go up right now i'll say it that way, okay because of the banks because of what they're saying and i have to believe them. >> right it could be a while. you've been really generous with your time. >> joe, can you not whine at me and nag at me for six months now. >> you did it.

i do the same thing with stan. everybody complains. that is what i have to do. i'm not above begging. i'm just not and i do it. and i told you i wouldn't. we wouldn't talk any football. but are you optimistic on the bengals at least don't answer that. i don't -- i really wasn't going to ask you >> have a great holiday season and merry christmas and happy hanukkah and all of the rest. >> thank you for the time, david. >> thanks. >> that was interesting. because that felt like one of his big calls. he's come on in the past and talked about how the tide is going this way and it is hard to fight it. >> qe, and everything is going up >> and he said it. and he said it at the time the tide is going out. and that is a big macro call it's next to impossible to fight central banks. now the mark has been of the opinion that central banks are either bluffing or wrong and that they will pull back.

>> that is what i've been hoping for. >> they're telling the truth at least that is what he thinks at this point. >> and it is worse when you made point that it is worse when the markets don't listen because then their job is harder conditions loosen, even though their raising rates. and then they have to try even harder for credibility which means more rate increases. >> he called it qt, quantitative right tightening and we don't know the impact of shrinking billions and billions of dollars around the globe i guess we're going to find out. >> chuck schumer said negotiations are close to an agreement on the more than $1.5 trillion omnibus spending bill but not the finish line yet. our next guest wants to use the bill to alter a recent tax change that could effect many who make regular use of venmo and paypal

and joining us now, senator bill hagerty of tennessee >> good morning. >> good morning. have you read the -- how do you know what isin there about venmo and paypal does anyone know what is in this. >> we just had this dumped on us a day and a half ago it is more than 4,000 pages, joe. what is not in there is the fix that i've been working on for months and that is to address the 1099 k problem for people who use small transactions, anybody that has transactions north of $600. if this goes through without the amendment that i've been working on, we're going to see 300,001,099 k issued by the paypal and flood the irs and put a huge burden on the american public but as of today this is being held hostage in broader negotiation as senator krumer tries to cram this massage package through. >> the chances that this

happens? i think it is going to happen. it is almost like, i don't know what you call it, it is like a immovable force moving one way we're not going to punt this that is what might be the prudent thing to do but we've gotten used to this. we wait and wait and then everybody wants to go home for christmas and it is -- and the american people are just going to be sitting by while wash does this stuff that beats to its own drum, to its own beat it seems like. >> joe your describing the washington kabuki theater and that is what happened last night. we were supposed to vote on this and finish it up in the wee hours of the morning they negotiated everything except they found out one thing. that is that there is bipartisan support to keep title 42 in place. there is an amendment there that would have passed last night and that is would have been a huge problem for chuck schumer and the radical left so what they're working on is another washington trick that will create a process, if you will, that will allow those

democrats that do support tigtitle 42 allow them to vote for that and funding the border wall even voting for more funds to protect our border they'll vote for that and turn around and vote against it and so it will fail and we'll go right back to what you described and i think this is sickening to the american public. they're tired of seeing this coming out of washington and i think this is what it is setting up for and we'll probably be in the night again but that is my sense, we'll wind up in the situation, having passed through but not of substance. >> how will republicans say, well, they gave us this so we're going to do it what do you think little window dressing do you think we're going to hear? >> i think republicans are very frustrated about where we are right now. and if you think about what is happening at the border. just to stay on that topic, what you're see is a different set of the messaging points one side will say we've plussed up another almost $2 billion to go to the customs and border patrol but if i look at fine lines on

page 753 of this massive bill, it said those funds can't be used for border security or border protection. they could only be used to accelerate processing of people across the border and transporting people into the united states. in my home state of tennessee. they won't tell how many or what the burden might be on our schools or our hospitals and our social services. that is what the funds will be used for that is not protecting the border that is just accelerating the prose and ensure more people come flooding across the border. it helps protect against the political problem of the camera angles seeing people lined up at the border so it is so accelerate up the border so i don't think the american public is supportive of. >> and then we'll be in 2023 and we're wondering what if a will look like at this point. with a more divided government we have to run appreciate your time in morning. >> thank you becky. thank you very much. we're going to recap

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quarter gdp coming up in 3.2% compared to an expectation of 2.9% and jobless claims rose slightly joining us to talk about the new data and the state of the u.s. economy, julia coronado, who is macro policy perspective and and allison slager and our very own rick santoli and steve liesman steve, talk about the jobless claims an other data and then rick i want to get your market analysis of this you go first, steve. >> jobless claims up a little bit. the continuing claims fell for the first time if a bit. so that was something that we were watching to see if it was expressing some weakness in the job market it is still higher than it was but it is been many weeks since it is actually declined. and the gdp data, you got a little more gdp than expected. and that came with a little bit more inflation than had been previously reported. the consumer did a little bitter

and it might re-set the fourth quarter in the sense that the third quarter now is higher than expected so the data in the fourth quarter has to be higher to meet it so we'll see but it maybe there is a little more growth in the third and less in the fourth but again it is not an economy that slowed or stopped on a dime in the third quarter, rather it accelerated in the second half and that is really the big story here >> the futures have gotten weaker since the numbers have hit even though their better than expected numbers. down by about 128 points rick, is this because the market is concerned about hearing better than expected news, because it means the fed is going to hang in there >> you know, i think with rates ticking up and we're not looking at huge numbers. it did turn the ten-year from lower on -- or higher on the day, lower yield to the opposite yields were just a smidge higher, closer to unchanged. but fact of the matter is we went from 4.3 to 4.4 on the price index. we went from 4.6 to 4.7 encore

pce quarter over quarter so both of those were higher than our last look even though their significantly lower than their high water mark the high water mark on the price index was q2 of this year at 9%. on the core pce, quarter over quarter, that is the highest at 6% and that is the second quarter of last year that went back to '83. so the fact of the matter is, like stocks lately, they're looking at the potential for recession, and historically high inflation. the treasury complex is looking at the fact that peak inflation is pretty much in the rearview mirror, based on data. and it is the latter that i find interesting. it is still much lower than the extremes but the fact that it ticked up, and it is not linear, makes this the market a bit nervous they are holiday markets i want read too much into it

>> allison, you look at this jobs market right now and it is still a hot market how long do you expect that to continue >> well, i think it is really hard to say. i think it would be a while. because often what takes down the economy is a decline in demand which isn't happening right now because household balance sheets are still pretty strong but eventually this high inflation will eat away at inflation balance sheets we're seeing that with rising credit card debt so it could be another couple of months. >> there was somebody on twitter this morning who said there is never going to be enough jobs to fill demand. that strikes me as maybe a little naive, if you look at these things, they tend to go in cycles and it is a pendulum that swings one way to the other. is this time really different. >> -- well it is different, in the sense that we have one of the broadest strong strength in

a couple of generations. sos a broad base of jobs and that positive feedback between jobs and consumer spending it is pretty hard to tip over. the u.s. is a diversified ocean liner of an economy and has proven resilient as rick noted. we're definitely slowing consumer spending came in a little tronger in the third release. it is a very trend-like reading just above 2%. it is not like the labor market isn't cooling, the demand and supply are in better balance now which is what the fed has been looking for. >> right. >> but it is still a pretty resilient picture overall. >> i see that for right now. i just mean, would you think it is a safe assumption to think there is always going to be a strong jobs market and that you don't have to worry about making sure you keep your job you go from a take this job and shove it market and the pendulum swings to the point where the

boss has more control again. >> yes we've been through a few cycles haven't we so these are cyclical factors and dynamics we're seeing the most sensitive sectors cooling off. we're learning that tech turned out to be a very inter sensitive seccor in the sense that its feeling the pain of monetirry and fiscal tightening and is laying off workers at all levels in size. so, yes, can you see the job market turn. that was the hottest job market. now it is the weakest job market and that will spread across more sectors over time. >> julie and, allison and -- did you have a quick point. >> you could cyclically change the idea of we need more or less workers but you cannot change the sect nor that 10,000 baby boomers are being retiring every day and they are not being replaced. >> and the fact that we're not

allowing people in for a lot of jobs but there are people under a certain age that haven't seen a job market to go against them and ask for anything and you're going to get it forever. i think the tide shifts on those things i just do. >> sure. >> two people nodding and two people say no. any way, thank you very much we are appreciating it this is a conversation nor another day. >> coming up, jim cramer's first take on the trading day straight ahead as we head to break. check out the shares of amc, announcing a $110 million equity raise and proposing a 1 for 10 rev reverse stock split. down almost 24%. trouble it looks like. i don't know nothing really effects the apes. $4, though stay tunes you're watching

"squawk box" on cnbc live from the nasdaq market site in times square

i would probably say i'm leaning short on the equity markets. you know, so, right now, i think the upside down side doesn't make sense when i have so many people telling me so many central banks telling me what they're going to do. what they want to do what they expect to do >> let's get down to the new york stock exchange.

i've been doing some math, jim do you have an s&p, do you have a hi confidence in what your s&p earnings number is for 2023 and then -- >> i haven't put it together yet. mostly dealing with individual companies trying to add them up from the bottom up which is hard becausethere's, obviously, 500 of them but i listen to dave, and i think as dave said, it is what it is, and the central banks, christine lagarde didn't pay enough attention, japan wants these up, we want these up even though the number for the gdp was revised up, i'm starting to see price decreases across the board in a lot of different areas. carmax, different foodstuffs are going down in price. automobile going down in price, for new cars too housing, down 7% the fed's winning, and i think that that was left out of what

dave said. i mean, he presumes, i think, that the fed can't win, and i think that the fed is winning. >> i hope so i've always hoped for that i've always hoped for that and that would mean, jim, that maybe some of the so-called markets not listening to what the fed's going to do, maybe the markets are responding to what they know about what you were just talking about maybe it's not that the markets are stubborn maybe the markets are sniffing out that cooling of inflation. >> look, the layoffs are big we're starting to get real layoffs now. >> could we do under 200 -- someone sent in, they're looking at under 200 next year on the s&p, and then that just -- that's pretty frightening. i guess multiples could stay at 18 or 19, but -- >> in order to keep the earnings up, they're going to fire a lot of people. i think that january's going to be a horrendous month in terms of firing.

doesn't mean it's going to be a horrendous month in terms of the s&p. i think that we overhired for the, really, overhired for covid, and never really let these people go, and the enterprise software, technology, 26% of the s&p is too high, but that's okay because i think people, if they're being done with tech, and they go elsewhere, it's actually good for the market i don't share dave's negativity, i just don't >> how about micron? >> micron is terrible. micron's problem is that samsung is just a very irrational player they've not cut back at all, and if they cut back, i think you would see something in 2023 that would be good for micron, but micron told you that things are not good, and they have layoffs, and they are not able to make their numbers because the demand's weak, it's getting -- again, what i think the central bank should be listening to, and the supply is overwhelming

so it's just not a good situation for a very good company. >> all right jim, we'll be joining you in about seven minutes or so. we'll be right back with what to watch ahead of t oni bl wl reetpengel ♪♪ this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor

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well, the futures have moved lower in the last half hour or so you can see now the dow futures off by about 230 points, couple of things happened in the last

hour one would be the data that we got that showed gdp was a little stronger than expected jobs data didn't budge by all that much. and then you had david tepper telling us earlier that he is leaning short in the equity markets right now. let's talk more with the managing director at ubs, and michael, what we heard from tepper was a pretty straight and easy analogy he said, when central banks around the world are tightening, it's going to be much more difficult for equities to go up. he's shorting the bond market too, because he thinks they're telling you rates are going higher, and he believes them what do you think? >> i'm not far off from that view i mean, i think the market is underpricing a hawkish fed the fed is clearly telling you to be wary of persistent inflation, and they're offering 4.6% rates on 6-month t-bills, so even if you think this is a worthy debate, you're being paid pretty well to stay on the sidelines and watch the action

unfold so, we think short-term bonds, you know, 4%, 5% coupons in various investment grade t-bills make a lot of sense, we are positioned a little bit underweight on equities, a little more defensively, and i think, you know, just -- i don't know, doesn't sound like the santa claus rally's been talked a lot about this morning, understandably, but i would also point out, you know, when you look at the levels of the current vicks, which is around 20, which is near the lows of the year, that is generally coinciding with peace in the s&p this year, and you fast forward the calendar to next year, january 6th, we have the jobs data january 12th, we have the cpi data then we roll into earnings and concerns about the earnings recession, and so i guess there's a good chance the market's underpricing risk a little bit the good news for investors is, if you have uncertainty, you can enjoy great rates in money

markets and t-bills and corporate bonds, and you can still be assured of a decent return and the last thing i would say is, look, if we do achieve a soft landing in the economy, that's awesome, and markets probably have bottomed if that's the case but as we're seeing from earnings reports this morning, the market probably hasn't quite really priced in the likelihood of a harder landing, the likelihood of an earnings recession, so staying defensive, more on the sidelines makes a lot of sense to us >> what kind of a drop would you need to see in equities markets before you thought, okay, this is a better price point? this is where i would get back in >> yeah. i think i would take my signal from the fed and what their tone seems to be, because you know, in order to evaluate whether a market has bottomed, you really need to see selling exhaustion, and the basis of the beginnings

of an uptrend, to the way we're thinking about it is the federal reserve probably needs to see four good months of cpi and job prints before they even begin to hint at any kind of dovish tilt. so, that brings us to the march meeting, so we're going to be a little careful before then, you know and we'll get a lot of information over the next month. we'll get the earnings reports beginning to come in on the 13th or so of january that will give us a lot more info so, it's not a price level to me, per se, becky. it's more market expression and what's going on at the time relative to the information. >> got to be in tune with the market's feelings. michael, thank you >> thank you >> why don't we take a final check on the markets this week, the last couple of days have been really good for the markets. yesterday, the dow was up by more than 530 points

the market giveth andt taketh away the nasdaq off by131 if you're watching the ten-year, yield's been hanging around the same price it's been it's -- ten-year yielding 3.86%. that does it for us today. make sure you join us tomorrow we'll be right back here hope you are too right now, it's time for "squawk on the street. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. futures do lose some ground here as david tepper suggests caution on equities. hotter than expected final q3 gdp revision doesn't help but yields in the dollar still within yesterday's range our road map begins with legal pressure building. two former top ftx associates