nasdaq much worse. we will show what you is moving now. tesla falling short of the delivery target. new numbers straight ahead basically guided down. plus, drama in d.c today could be the first time in 100 years that a speaker vote fails on the first ballot. it is tuesday, january 3rd, 2023 "squawk box" begins right now. 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 and andrew ross sorkin. the gang is all back together. we are here for the new year guys, i missed you i have seen each of you

individually >> we have been corresponding. >> talking more than we should this morning >> a lot of love a lot of resolutions we made to be closer and more cooperative sort of way. >> in fact, i have presents for you guys tomorrow that i'll bringing in. i bought something for each of us >> that's nice >> when do you finally start writing 2023 on your checks? when is the last time you wrote a check in. >> i write checks all the time personally >> i haven't seen a checkbook in years. i don't have access to one >> incidentally, wrote 2023 on a check last week. >> before 2023 >> yes >> were you post dating it because you wanted to keep the float? >> no. >> he is thinking ahead. >> i made a mistake and my smarter than myself wife said

know, you wrote 2023 >> it takes three or four weeks. then it is 2024. >> you haven't seen a checkbook in years because you are in a conserv conservatorship? >> i have no access to funds no i have a credit card >> for essentials? >> yeah. i have no access to the actual checking account why? >> i consider myself a limited partner. >> you are definitely not the general partner. all right. let's look at u.s. equities at this hour. you will see green arrows to start the year maybe we can finally put 2022 behind us. it was a lousy, lousy year for the markets. this morning, dow up 272 nass ddaq up 122 s&p up 35. the first day was a good one in 2022, but if you looked at the end of the year, dow down 8.7%

s&p lost 19.4% almost bear market rough year nasdaq down 33.1%. these are the worst returns since the financial crisis in 2008 if you want to look at what is happening with treasury yields the yields this morning are lower. 3.745% for the 10-year treasury. you have bonds and stock equity futuresi both looking higher energy prices with wti down 1.5% $79 a barrel natural gas is something to watch. really warm weather in europe. we'll talk about this later. that is a result which is putting pressure on natural gas down 8%. >> we agree to not say after 2022 -- oh, it can't get any worse? can we not say that, please? with this guy in russia!

who knows? it could get worse it could the stock market isn't guaranteed to suddenly, you know, when everyone finishes with the tax loss harvesting last year. that doesn't mean this is headed higher let's not say it let's hope springs eternal let's be surprised by a better year in 2023 do not say it can get worse. >> is that optimistic? in washington, the new congress will con seevene and ft item is electing the speaker kevin mccarthy is looking for the job and mccarthy cannot afford to lose votes from four members of the party the house convenes at noon the speaker will begin shortly after the nomination speech and follow that by roll call vote. if the candidate doesn't win majority, another roll call vote

is taken no speaker has failed on the first ballot since 1923. republicans are gridlocked lawmakers will call an emergency meeting in private if mccarthy cannot sway and an alternative can emerge steve scalise has been mentioned as a possibility he is firmly behind mccarthy thus far we will talk about this and more with frank luntz in the next half hour. >> four votes? unless a bunch of democrats vote for him. >> not likely. two of the four republicans have said there is nothing he can do to sway them you have to imagine. >> that guy matt gates is one of these guys he's still around. i thought something happened >> he hass sats santos in the bg

>> i don't know anything i know nothing i know nothing i was in a different state undisclosed location >> luckily you got back. same can't be said for people on southwest. an update on that situation. the airline says it maintained a regular schedule over the weekend after the disruption over the christmas holiday cancellations over the weekend were less than 1% of scheduled flights. it canceled 4% of the schedule on monday with fog in chicago and heavy snowfall in denver some customers separated from bags last week say they are still waiting for them southwest recruited volunteers to sort through the deluge of missing bags you were talking about 2,000 flights canceled

investor bill ackman saying coke and pepsi has caused more harm to global health than any comp companies. look at diabetes and soft drink consumption. he had no economic interest, long or short, in any soft drink company. ackman says chains that hold the soft drinks. he accused the software -- soft drink maker -- these days, everybody is a tech company of probably quote having done more to create obesity and diabetes on a global basis than any other company in the world i remember we talked to warren buffett about that the at the annual meeting he scoffed at the whole thing.

he said i drink how many cherry cokes a day and i'm still kicking. >> 92. you know who is 99 >> charlie munger. >> i drink it is a rare pleasure. full lone coca-cola. still love it. i know i'm fat i don't blame coke for my fatness. i can't eat meat because cows fart take care of your own life, bill leave me alone. buffalo bills safety damar hamlin is in critical condition after he suffered cardiac arrest during the game against the bengals. he collapsed shortly after a tackle his heart beat was restored after several minutes of cpr on the field. he was taken to the nearby hospital university of cincinnati medical center players on the field were

visibly upset. formed a wall around hamlin to protect his privacy receiving medical attention. the nfl suspended the game the bills returned to buffalo after midnight the league enters the final week of the regular season. i actually saw the bengals score the first touchdown in the first quarter. it had just gone up and nobody came up and told me. start again? start over it looked bleak. she came up. i was pleased to see he is alive and hopefully in critical condition. hopefully. he's 24 and strong make a total recovery? >> they were going back and showing the hockey player who took a slap shot straight to the

chest back in 1995 same thing stopped his heart. he was back on the ice 12 weeks later. he managed to play for another 12 years >> in the late '90s, two pitches in the home tgame the home plate umpire. dead this is weird. sporting events. once again, realized every morning you wake up is a pretty good day. >> damar hamlin's mother was there at the stadium they had to find her and bring her back thoughts are with her and the family and with him and the team for recovery >> i saw things on twitter did the nfl -- >> it took them an hour and a half to call the game. >> arm twist

i know the bengals coach there was no way they were sending anyone back for a warm up after that. the nfl dragged kicking and screaming to p comply >> it took an hour and a half. >> i assume it took time to figure out what to do. >> i don't think we need to be mad at anyone. no one can prepare for something as shocking and unexpected it wasn't a hard tackle tee higgins. he was worried >> you saw the picture of him with his mother afterwards >> i saw games the hits are still pretty hard >> do you think this has any impact long-term on the game of football >> i don't think i wouldn't draw or connect any dots to the game itself in this at all it wasn't a hard hit

i don't think we know anything about his cardiac condition or hereditary we know nothing about the gentleman or if football had anything to do with it do we? >> no, i don't >> head injuries are still not fixed. trying with targeting. >> concussion protocol there will be short-term economic impact to the nfl and the question of the longer-term prospect >> the usc quarterback did you see that the f word utah. yeah >> on his jersey >> on his fingernails. >> not very nice >> no. utah they played >> who did tulane play >> that was a good one wait a second.

wait it was -- i have to get my facts straight sc played tulane it was sc and utah >> we will figure it out and come back. >> utah and penn state in the rose bowl. tesla delivery jumping 40% in 2022, but falling short of estimates. in that is next. plus, a scoop of funding for spacex "squawk box" is coming right back harge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work.

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welcome back to "squawk box. tesla delivering 405,000 cars in the fourth quarter that is the good news. it is up 40% year over year. the bad news is it fell short of expectations of 427,000. the quarter was marked by several challenges for tesla including covid outbreaks in china and cause temporary suspension of zhanshanghai facty reuters reporting that tesla's china chief has been promoted to take oversight of the carmaker u.s. plants in north america and

europe the number of analysts coming out today and saying that tesla to continue to grow at the pace it wants to grow, it will have to reduce costs. reduce customer costs and eventually create a vehicle that costs less than the current one today. tony is out with an analyst report today >> what was it it is still up delivery 40% >> that's what i said. 40%. they were targeting 0. the question is can you do another 40% or 50% at this rate or will that slow? that is the question for tesla you see folks on the chart >> low market penetration overall for evs still. a long way to go we will see if mass adoption comes. you need more stations what about the situation in buffalo? it is hard to have an ev in cold

weather. >> that is a battery issue i was thinking evs in general. i got a new phone. >> congratulations >> i didn't realize how bad my battery was before and infrequently i need to charge it >> it doesn't last. >> is it the same with the car >> the same thing. a battery is a living organism of sorts >> it slowly dies over time? >> yes >> this was so good right when i got it >> i don't have to charge this two days >> i never get down to 10% "seinfeld. have you seen that when he does that with the cell phone news on another musk company. spacex is raising $750 million in a new round of funding that values the company at $137 billion.

according to information obtained by cnbc likely lead the funding round and that is a big deal what you have seen with other companies, technology or any innovation, they all had lower funding rounds valuations have been cut significantly. not with spacex. >> side business for elon musk $137 billion. check out futures right now. up 228 points. joining us is sylvia jablonski looking to summarize, sylvia we do a lot of that at the beginning. it is january 3, 2023. we are looking ahead given the valuations of a lot of tech stocks, obviously much cheaper than a year ago. if you are going start gathering

assets or starting to move in, it might be a good time. we're still in a storm the rainbow is coming some day at this point, we're still looking at it raining, basically. >> yeah. that's right >> that's a good metaphor. >> we will continue the ch choppiness it will pass the fed is getting to the end the rate hike cycle. he will keep rates higher longer he is looking to shake out a soft landing what is different about this year than past bear market years, you are unlikely to get the sprint to positive performance because you don't have that fed put in place you don't have anything coming into the market. i think it will be a neighborhood stroll. it will be volatility in the markets. what will change and move them forward and make things like tech stocks rebound is if

earnings hold up and stay decent and we get to the point where the fed says enough. we will stop and see what happens. you eventually will get the investors off the sidelines and back into the market. this is where value creation happens. if you just look historically, the s&p 500, tends to be up most of the time after a double digit down year to the tune of 12.6% on average we could very well get that. i don't think it will happen in the first month or two of the year as it has post covid or 2008 when the fed came in to support the market we have to wait it out >> that sounds like a secular, at least, i don't know if you call it a secular bear that would be a two-year period where no one makes any money unless you pick the right stocks the nasdaq goes down 33 and we understand what it means to get back to the beginning of last

year even the s&p down 19 and getting back 12 which you don't expect not getting back to even this is a tough two-year period. i wonder if it is a five-year period it is nice to know that, sylvia. >> it would be nice to know that i think it is very difficult to predict that there could be so potential tailwinds. one is the fed stopping. two is margins holding up. corporate balance sheets even with the fed hikes in play and the softened economy and softened demand. if the earnings season is okay, that gives investors confidence to come back into the market china is almost completely shutdown again because of covid. the foreign minister there is very america friendly and looking to do business again past the covid wave.

you get increase in global demand there are factors that will help companies like tech and broad market economy in general. they will take time to play out. i don't think it will be two years of negative returns. i think we're not going to see a 25% return like post 2008 or post covid i think it will be the 9% to 12% and maybe the average falls a bit. after a year, we will see things shake out. i don't think we have much longer last year was terrible it was one of the worst years for the global economy in two decades. >> to get to new highs, you are not expecting new highs in any of the averages? >> i'm not expecting new highs in any of the averages i would be in the plus 9% to 12% range by the end of the year mainly because corporations will surprise us and earnings will hold upper than expected the consumer is weakening and

there is some impact now of inflation and pricing power. we're starting to see how play out. the consumer is still in pretty good shape in spending you hear stories like tesla. tesla stock is falling only produced 40% growth that's amazing in a recession year we wanted 50%, but we got 40%. i think demand slows for big companies. it is still allargely growing. there is still a pick up and need for technology growth you have to resolve that we need robotics and ai to power fac f factories. >> all right thanks get ready for the rich session americans could get hurt more than usual economic downturn is harmful for

the lower and middle class this could be bad for the rich you expect assets with the five-year period of asset inflation from ezero interest rates, that could come up. it could be housing. it could be stocks there are people, bears would say this is the biggest bubble 9% to 12%. they need to wipe the slate clean and think 9 to 12. that would be a good year. it doesn't get back to the new highs. you are willing to take that >> i would second that i would take that. >> dividends >> i don't know. >> 9. when we come back, data on wage growth formal bu msmall

businesses we will hear from paychex. and drama in the house the speaker vote today "squawk box" will be right back. th pre-configured hp notebooks with hp wolf security. ai-enabled threat detection and remote management protect your endpoints 24/7, giving your defenses some real teeth. bummer. hp makes always-on remote security possible. cdw makes it powerful.

welcome back, everybody. we mentioned it before, but formally wish a happy birthday to charlie munger. he turned 99 on sunday still active vice chair for the company and still active when you talk to him. we will talk to him in february. we talked to him recently. congratulations to charlie munger happy birthday. the world is remembering barbara walters. she died last week at the age of 93 tributes have been pouring in. i spoke with warren buffett over the weekend. he remembered a story from barbara walters as well. back in 1985 or 1986, about the

time abc deal came together, he was invited to the dinner with tom murphy and dan burke respresunning capacities that is the reason they were able to finance that him buying into the purchase he was a long time friend with murphy and burke dan burke was steve burke's father they invited him to the dinner they are getting together with a dinner with barbara walters. he showed up for the dinner and one of the efficfirst things shi is how much do you need to retire in new york city? you need to be schauffeured. he said probably $50 million he was in contract negotiations. she played a good game with coming through with that >> it was warren who was near negotiator >> unwittingly

>> amazing >> big numbers she was somebody who worked so hard and blazed a trail for so many journalists watching through the interviews she was able to book and how hard she worked on a constant basis. >> some people i know say where is the barbara walters special it wasn't that long ago. >> 2020 i remember you saying it >> that was because she was on the show "20/20. >> it was about 2015 >> that long >> i think she was 93 if you are still 85. >> still one of the best >> i remember meeting her a couple of times. always very gracious >> i will not hold it against her she was the founder of "the view." >> and many other things. right now, it is time for executive edge hourly wage growth slowing at

small businesses across the country according to the latest data from paychex. joining us to talk more about the employment ahead of friday's jobs report is john gibson he is the ceo of paychex john, the question is if the fed moves is having an impact on anything you have seen what is the answer >> i think the answer is yes we see wage growth continuing to slow jobs growth really remainss steady for small business owners we go back on 2022 and we will see a small business environment and employees showing a lot of innovation and resilience. as we get into 2023, that will shape up to be a lot more complex than 2022. we are already seeing small business owners and employees to seek support to navigate >> would you say more complex? what do you mean

>> they will withenter a markett a tight labor inflation. there is a lot more regulation, believe or not, wage growth going up 50% in the states transparency rules department of labor is ready to release guidance with employees and contractors which could be inflationary california had over 1,900 regulations. you put that together and small businesses have a lot of complecomp complexity to navigate with the tight labor market. >> that tight labor impacted small businesses more than large businesses and mid size business it has been the number one issue that small business p oowners complained about how does it stand in terms of finding workers? >> you know, it is still as tight, but it is getting better. we are seeing that in at least our survey with clients.

becky, you see other issues being raised inflation on top of the agenda the last several months. now funding for small businesses is an issue. as you can imagine as interest rates are going up, credit costs are going up we have helped clients to access assistance with the employee retention tax credit that is critical they get the support while the fed is raising rates. >> john, i thank you for your time good to see you. >> good to see you happy new year >> you, too. llercoming up, frank luntz, the post, will talk about the speaker race in washington today. "squawk box" will be right back. >> 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

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good morning welcome back to "squawk box. live from the nasdaq market site in times square. checking the futures they're green. it's the first day can't be any worse this year than last year we decided we weren't going to

say that it could always be worse hope springs eternal >> let's see where washington will start out today. republicans take control of the house and 118th session of congress opens officially today. it will be highlighted by the vote on who will become house speaker. we will find out shortly at noon if representative kevin mccarthy shored up votes for the bid for speaker. we have frank luntz, the pollster and political strategist frank, let's talk about all this and what you think is happening here what will happen we should say you are a close friend of kevin mccarthy's before we get into it. >> yes, i have known him for 29 years now. i look at where we are in washington and with the markets should expect. the challenges that the public actually want to get things done they want the parties to work

together on inflation and work together on immigration. new retirement savings legislation put forward in the bipartisan way in the senate and the house by tom tillis and john hickenlooper they expect washington to get it done and find a way for workers to save for their future the problem is this race is pulling the republican party apart. you have the conservatives versus those on the extreme and right now it looks very difficult for kevin to put together a majority on the first ballot because, unlike what ronald reagan alerted us to, if you are 85% in agreement or 990 agreement, you are allies. the vote will not be in the first hour you should not tune in until

1:15 they go through each name. you have to stabbend up and recd it by person the vote of present does not count to the majority. it is not likely the winner needs 218. you can get 214 or 215 enough people will not vote publicly for the republican leader and we will have a very, very long day. >> can i ask several questions you know speaker mccarthy, or kevin mccarthy why not condemn santos the man is a serial liar i know others will say president

trump years ago. i would be happy to condemn that if that is the case. this seems to be relatively egregious. >> the amazing thing and i felt this way going back 25 years the presidency of bill clinton that is not -- i question whether you remove somebody. my issue is doesn't santos have personal respect doesn't he feel shame for what he's done? why doesn't he, himself, step aside? >> i don't disagree. kevin mccarthy needs him maybe he can't condemn him i don't understand >> the issue now is focus on what you face at this moment at this moment, the question is, is the more that unites the republican are ten members and hold back the entire congress from doing what it is supposed

to be doing. now what this has done is caused people to pay attention to the news and learn the rules of the house. that's a good thing. you have new apps like facts that are talking about this and talking about santos every single day if you want the latest on santos, these apps like facts provide you with what's going on that's a good thing. when you don't have accountability and don't have personal responsibility and you don't have the desire to get things done, it is about results the public is looking for. i'm not concerned about whapt happens today. i'm concerned whether or not a democracy can get its credibility back or mojo back. when people tune in and think about washington and it starts today and starts right now, is this a place they can trust or do they believe this is a place that doesn't deserve -- >> you shouldn't do resume

padding. i have seen a lot of people last week they were all up in arms on twitter. elizabeth warren how about lumenthal? >> the governor said he should -- >> he shouldn't be around. it is hard to throw stones as far as you go back to the '70s for biden i'm not sure he knows if he is lying. that's the problem at a certain point, he never talked about hunter or any business >> we don't know about that. >> go ahead, frank >> don't do this don't do this. >> oh, yeah. mr. come together. you stirred up a lot of stuff over the years, frank. this is the country we're in right now, frank i'm sorry. you and arthur brooks can hold hands and sing cukumbaya.

>> you have things that the public desperately needs we have a savings crisis to fix right now. we have flags that is still out of control and arguing over something that happened 20 or 30 or 40 years ago. >> and we started with santos. you talked about santos. it is all fair game. >> our viewers want results. they want aspects of the economy to be addressed. they want foreign policy to be addressed. you are arguing oversomething that is minute get your act together. >> i would love to hold hands with you through the screen. we have to run is there anything from the public perception and maybe that is all that can be done with

where congress is this year and what they can and cannot do? >> it is about spending accountability and wasteful spending if the republicans link and take control of congress today, the very first thing they should do after they remove the 87,000 irir agents that are not needed, they should cut 1% from every program because that can get the wasteful spending under control. that will have a significant -- >> it is a longer conversation i want to have the debate about the irs piece. i think if you look at the i investment at the irs and return on investment, it is huge. again, conversation for another day. thank you. still to come this morning, the futures are pointing to a higher open right now. check it out dow futures up 130 points.

that is well off the session highs just 45 minutes ago up 100 points s&p futures up 15. nasdaq up 47 we will show you what is moving straight ahead later, we will talk to katie stockton for what she is seeing in the charts as we head into the new yearor f stocks. "squawk box" will be right back.

coming up, we will talk about a new push for jobs in the u.s. military in fields like tech and cybersecurity. reminder, get the best of "squawk box" in the dail dct.y follow squawk pod on the favorite podcast app and listen any time we'll be right back.

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the army is ramping up its recruiting strategy to attract more skilled service members in the ranks.

there's a growing need in technology, science and security and science in medicine but the competition is fierce from the private sector we are joined by general must be tough to compete against the private sector how do you do it give me three or four main points on what could make it attractive to go the military right? >> thank you, joe. thank you for the opportunity to be here today. this is about precedents we have a great united states army we need motivated, quality

enthusiastic individuals for the united states army we have over 150 jobs plus, and if you want to be a soldier and jump out of planes, you can do that, or you can work in medicine and you can be a lawyer as well. a lot of our job opportunities offer certification and credentialing offered in service and when the soldier decides to get out of the service also, i will share with you, and this is very attractive for the soldiers young men and women that join as well, our retirement packages and the opportunity to invest throughout their military career, and offered with that it can be very -- a financial incentive as

well with the bonuses a soldier may get as they continue on with the service years, and re-enlisting years and benefits. >> we look at thecurrent state of the employment arena in the united states and there's a skill gap and we're trying to figure out how to do this. money gets thrown at stuff i am not sure it's always effective. this seems so simple and seems like a slam dunk where you can subsidize a little bit, and with the military and army, for example, bring people in and introduce them to the fields and then when they leave the army, we know how attractive they are in the private sector when they get out, and it seems like a win/win for everybody involved

so many government programs don't seem to be that effective, and this one -- >> it's very much a big win. i would entice all of our men and women to join the united states army. we do give you high quality training and certification credentialing as well, and it's indeed valuable from a leadership and discipline and work ethic perspective when they get out of their enlistment or retirement >> these kids need to go into engineering, and it's, like, you go into engineering, it's difficult. we are not going to compete globally if we don't and work hand and hand with the army or any branch of the military seems like a great solution for everybody, general but good luck today.

>> thank you very much for the opportunity. >> at the big boards good to have you on. we wish you success. thanks >> we will succeed thank you. coming up, when we return, furepotitus inng to a strong open of what will be the first trading day of the new year. we will show you what is moving next two big hours ahead, after this.

good morning, everybody. kicking off the new trading year, investors looking for a fresh start after stocks suffer their worst year since the financial crisis the futures are pointing to a higher open this morning, though we are off the highest open so far. we break down the numbers and what it means for investors. washington gearing up to get back to work, and lawmakers returning to the hill today with a key house speaker vote we will talk about the key items investors need to watch out of d.c. the second hour of "squawk box" starts right now

good morning welcome back to "squawk box" right here on cnbc we are live at the market, and i am andrew ross sorkin along with becky quick and joe kernen we will show you where things stand right now. we are going to open higher, at least looks that way two hours from the open, of course the dow open up. you look at the 10-year note, and it's sitting at 3.761. might not be such a bad deal these days the oil, wti crude, 79.14. i paid a bunch, by the way >> i got 2.99. >> i got, like, 3.50, 3.80

>> yeah, i got 2.99. >> the bitcoin complex, and by the way, sam bankman-fried will be at a hearing today where he is expected to plead not guilty, and we will see what happens there. bitcoin sitting at6. a bold call. >> people laugh -- i mentioned it to somebody -- frank, bear with me. and somebody at the gym kept laughing, and i said why are you

laughing, and he started laughing more. kept laughing about bitcoin. i go, why are you laughing i think that's representative of -- i go, did you ever buy on the way up to -- no, no, no. frank, what is up? what is going on at tesla? >> great to see you guys we will start out with tesla news jpmorgan cutting the price target from 1.50 tesla's china chief promoted to the highest executive behind musk these are stocks tied to macau wynn shares up more than half a

percent. and then melco also up to the payment space now, paypal moving higher on a truest upgrade. price target also citing $6 billion as a positive cash, and paypal shares up 2% right now. also want to look at airlines. of course that was a big story during the holiday season. southwest air moving a percent higher in general on a downgrade, and the price target from 42 bucks to 35 bucks. delta airlines, you can see those shares up a percent as well the top pick for 2023, over all in the new year for airlines, it's positive. in washington today the new

congress will convene, and one of the first items on the agenda, electing a speaker congressman kevin mccarthy worked yesterday to try and lock down support, but a group of five hard-right republicans plan to block his bid the house will convene today at noon the speaker vote will begin shortly after with nomination speeches followed by an alphabetical roll call vote. no speaker has failed on the first batter since 1923. if the republicans remain gridlock, lawmakers expect an emergency meeting in private, and an alternative candidate could emerge steve scalise has been mentioned as a possibility, and he said he's firmly behind mccarthy. for more on the markets,

joining us the ceo of a bared company. we are turning the page on 2022 and get into 2023, and what do you see that lies ahead of us? >> one problem is likely to subside, which i believe is the fed. i don't think we are going to obviously have as aggressive fed tightening in 2023 as we had in 2022 i think the fed has done a good job at least pricing into the markets' expectations in higher inflation and higher interest rates. that's the good news the bad news is the affects of that tightening have not been reflected in the markets which will likely be lower earnings,

so while multiples have come down,or the economic troubles that are usually associated with fed tightening have yet to have really been felt that's the bad news. that's one of the things we will have to work through this year >> we're watching the futures this morning and they have come down we are still up about 95 points for the dow utures, but when w started the show about an hour ago, they were up 132 points it's unusual to see stock market futures and treasury prices moving higher at the same time, and that's what we have seen this morning, and which do you think is right which do you think is the better indicator? >> i think the era of negative rates, i believe, is over, and i think quantitative easing, in hindsight, it will be considered to be policy because it was used

for so long, not because it was used initially but because it was used for so long while inflation probably has peaked and come down, there's a chance the long-term interest rates stay high, and that's because people have forgotten that normally you require some premium over the rate of inflation to lend people money, even the federal government. my own opinion is that this is going to be another year where the rates stay high and will put pressure on the multiples in the market, and not to the extent it did in 2022, but certainly for a long time to come. i am kind of betting really, on the bond market a little bit this morning, if i had to guess, but by the same token, i think it will be, unfortunately,

another challenging year >> that microphone is not working. it has some stuff going on with it >> i'm sorry about that. first day back we have all sorts of troubles here >> i hear you. it's tough getting back into the swing of things. i will say the same thing in our household trying to get everybody ready for school and work again, not a easy transition to make so you like bonds. what else would you tell people, if you were going to dip your toe into equities, would there be anything you like here? >> we like -- >> that's a little better. >> we like consumer stables in health care, and those would be sectors we would like to be in, and it's a little bar belled to what we like in some sectors,

and the energy sector, i think we are making a policy error by not taking advantage of our fossil fuel resources in the west you combine that with less cap x from the energy companies, and we have been encouraged to distribute money back to shareholders energy stocks, i think, are going to continue to out perform. becky, maybe you could not hear what i was saying, and i think bonds may be up this morning, but long-term interest rates are probably going to stay higher longer than people think the idea that they are going to make some sort of big u-turn, i think, is unlikely because inflation, in my opinion, is going to stay sticky >> i could agree with that j it's great to see you. happy new year >> happy new year. >> we will talk to you again

>> sorry about the technical problems >> not easy getting back into the swing of things after the break. >> thank you when we return, new year, new resolutions. one of the most popular trends, yep, jim memberships we will hear from the ceo of planet fitness >> will go for, like, three weeks. >> and then mick mulvaney will ins jo uto discuss what is ahead today in the house speaker vote. you don't want to miss that.

just look around. this digital age we're living in, it's pretty unbelievable. problem is, not everyone's fully living in it. nobody should have to take a class or fill out a medical form on public wifi with a screen the size of your hand. home internet shouldn't be a luxury. everyone should have it and now a lot more people can. so let's go. the digital age is waiting. pst. girl. you can do better. at least with your 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. elon musk's spacex is raising 50 million that values the company to $750 million right now. and a16z participated in elon musk's buyout of treuter crypto battle, a big one taking place over the weekend. gemini co founder and digital currency groups sparring on

twitter. here's a little bit of the background it allows retail users to lend their crypto in exchange for very high interest rates, as high as about 8% after the collapse of ftx, though, genesis halted redemtions after it couldn't meet the withdrawal request wiping out anybody who still had holdings in the gemini, and now gemini banded together with others from genesis to figure out a way to get those assets returned. they said they repeatedly tried to get together with sillbert, and he responded, refusing the claims saying his company had developed a proposal on december 29th and had not receive add

response meantime, if you were on the other end of this, you are out of luck and you have got nothing. by the way, underneath all this is a question, which barry sillbert says is not right, but the larger company at the parent level effectively has a loan to genesis and that that's what is happening here there's other people that say, if, in fact, genesis were to have to pay people right now, it would kill the bitcoin market and it would unravel the value because there would have to be a lot of foreselling i know it's a complicated story and there's a lot of elements to this, but it's a gaming situation -- >> is that allowed under the contract of these things >> the whole thing is the wild west i think technically there's an allowance for this, but this is

the question, and i am imagining they are hoping the further out you can push this the more time they will have to fundraise and get money in there they can succeed at that, and therefore that would prevented the run on the bitcoin piece it's worth noting barry owns grayscale, and we have had them on many times. there's a huge disconnect between the nav of the value of how they are holding, quote, bitcoin, if you will, and actual bitcoin, and there's a whole number of people i believe, at least it was insin yao kwraeuted.

there's accusations on what barry is doing and there are accusations about what the twins are doing and it's hard to make sense of exactly where things really lie >> all i will say, if you were getting 8% to be loaning out your bitcoin, you have to assume there would be risks attached to that you don't get 8% return with no risks. >> hello i would say the grayscale thing to me is a separate issue. >> yeah. >> that's pretty common among -- >> that's less related to genesis at the moment. >> yeah, it trades remember, the late great marty

zwy. >> yeah, and you are paying 2% on top of the case of grayscale. i think it's a real issue, and i don't want to say it's a side show but it's a separate issue with what is happening with gemini and genesis boy, does that make it confusing it sounds like the same word coming up, planet fitness. you need a trainer we discuss the gym membership trend. all of these people with their stupid resolutions and they won't be there next week >> yeah, and you will find a parking spot just fine as we head to break, a check on the winners and losers on the

first trading day. "squawk box" will be right back.

welcome back to "squawk box. new year's resolutions fresh for 2023, and it's primetime for gym

memberships. kris rondo is the ceo of planet fitness. good morning to you. i don't know if joe said it during the commercial break or on air, but he said the parking lot was just packed yesterday. this is what always happens. but what does the parking lot look like on february 1st? >> this is the first quarter in almost four years this industry has not been interrupted so it's great to see people working out and not afraid of the virus and omicron and everything else going on it's great to see the momentum we are seeing. people do join and fall off the wagon, and people seem to get too gung ho and come in seven days a week and then get burned out. seven days a week is unrealistic, you know. >> is the real margin just in membership and, frankly, this is

going to sound terrible, actually hoping they don't come? >> no, we know nonusers lead to a cancellation eventually. 80% of the u.s. population doesn't have a gym membership, and at $10 a month, we can get more people off the couch and we can make it up through the volume it's the lowest price since the '90s >> what do you think about the future of the pelotons of the world and the movement in doing training over zoom, and apple's efforts in this regard and others >> yeah, i think home fitness is not new. peloton was the newest one that came around and you go to jane fonda and they have always been

there, and everybody has a room in the house to put it in, and not everybody has that, and the gym membership, 1,000 square feet and locker rooms. better experience. i think to your point, digital, i think, is key in the. point where people train themselves, and in the '90s when we started the business, the only way to workout was to hire a trainer, and there was no place to go online, and now people are training themselves, and we see that in the gen z population these gen zs are coming in with perform. it's amazing >> how much of it is classes >> we don't have any of that tons of cardiovascular, and trx

and kettle bells and so on, and not really classes the issue with classes is not many people have the flexibility to know they can be there at 5:15 on a thursday, and it's the convenience factor, rather than having to meet a class and then miss the class >> i have done it myself, and show up at a gym and zoom with a trainer that is not part of the gym or the program, if you will? >> yeah, almost like a uber trainer, right >> yeah. >> and it's the way of the future, and as technology gets better and the younger generations come out to work and they are tech savvy, as you know, and let's face it, some of our trainers in northern new hampshire are hard to find with

the quality of those outside of boston here, and the experience and quality, they could be anywhere >> what kind of pricing are you given with the inflation and given where the economy is and may be headed? >> we have a unique business model in the sense that we don't have cost of goods, and we don't have straws, paper cups and burgers or tvs coming through. our equipment has gone up some, but with every mental, after we break even, every member, it becomes a margin to make up that we had 53 straight quarters, over 13 years of sales positive averaging 12%, so it outpaces

inflation. we are getting more people off the couch. >> are you seeing distinctions of behavior in certain parts of the country now that people are more aware of their own health in terms of hopefully getting healthy and ripped and what not, but also just their health itself, given that you are actually a health center >> yeah, i think what we are seeing now is people walked away from covid with definitely a higher appreciation for wellness and exercise as we saw through covid, the people affected the most around overweight or what have you, and in the rise of rsv and flu-like symptoms, people are still coming to work out and are not afraid of that, and the cleaning, people are feeling more comfortable

>> it's nice to see you. we did not get to talk about the trend of ozempic >> okay. thank you. we will talk to a trump's lveyk us chief of staff, mic muan stay tuned you're watching "squawk box," and this is cnbc

in washington today the house will hold a vote to elect the next speaker congressman kevin mccarthy has been working for support but a group of five hard-right conmember say they will block that in your gut, what do you -- play it out for us. how do you see this going today? will it be short will these guys -- who is going to fold and throw in the cards, who do you think

>> who will blink first? that's the question. the vote probably starts between 1:00 and 2:00, and they will go through the first vote it will take a while, it's a roll call vote, old-fashioned one by one vote, and that takes probably 90 minutes or so. it's unlikely kevin mccarthy will get the necessary number of votes regardless of what that is the five folks said they will not vote for him it's not exactly clear what happens next, because this has not happened for 100 years, but it's most likely they will go to a second vote and i think that's critical if the second vote is exactly the same as the first, there could be a way to short circuit this, because it will send a message that everybody is dug in and nobody wants to drag it out, and if kevin loses votes on the second ballot, it could show weakness and things could drag

out to a long time the house cannot function without a speaker. the house does not technically exist without a speaker because they don't have any new members. the speaker is elected and the speaker swears in all the new members, and until that happens the house cannot conduct business, they can't vote on legislation or raise the debt ceiling or vote on resolutions there's a chance it could drag out for hours, if not days, and if not longer. >> there are a lot of members that say they won't vote for anybody but kevin mccarthy, and then you have others that will not vote for kevin mccarthy, so do you expect it to be weeks or months >> no, i really don't. i hope it's not weeks or months because you can't do anything. what happens if we needed to pass a piece of legislation in the next couple of days and the house doesn't exist. i think what you have here is a small group of folks that don't want to go along with the will of the larger majority ironically, joe, one of the

things the conservative group is asking for is the ability to make sure anything that comes to the floor has the support of the majority of the majority this makes sense, they are tired of having a republican house pass bills when they are by democrats and they don't abide by the overwhelming majority when they are picking kevin as the speaker. he's the overwhelming choice of the republicans in the house and the small group doesn't want to go along with it that's a little irony. you hope they see through that and you hope what it's about is leverage and getting advantages in terms of process, procedure, committee assignments and so north and things come to a conclusion relatively quickly, but i think it will be messy either way >> there was all this conventional wisdom, if it goes

to one or two votes, they would have a private meeting and work it out as of the middle of the morning, the house has no rules, just as you have been pointing out, and so recessing after one or two ballots requires a majority vote, and they could be sitting there and all this will play out on the house floor >> it could. keep in mind, what might happen is they go one or two votes and somebody makes a motion to adjourn, and you vote on that right away and it's a majority vote, which means technically, unless all the republicans vote to adjourn, you will need democrats' support would you like to have this go forward on the house i think it could be long it could be drawn out and all in public here today. again, nobody really knows because it has been, i think, 98

years since we did this last time >> do you think it's more likely the republicans will end up figuring this out among themselves, or do you think if it gets really difficult you see mccarthy reaching out to the other sides and offering concessions to the other side to vote for him >> anything is possible if things don't go per plan if kevin is not elected in the first couple of ballots, all bets are off kevin might seek to cut deals with democrats and i don't see that there's a large group of centrist republicans who are angry about this there are a large group of centrist republicans who think the right wing get all the media coverage and concessions in the negotiations and they may break off separately from kevin and make a deal with democrats there are all sorts of possibilities. there's a possibility that somebody not in the house ends up being a nominee that's unlikely and never

happened before but technically legal. we are in unchartered waters now and it's going to start happening soon >> so if you are called you will serve? >> well, i saw andrew there -- >> i was searching the list, s. sorkin -- >> yeah. boehner had trouble with this wing of the party. what do you think -- we spend too much money, obviously republicans and democrats, you know, sort of the unholy alliance over the years, but is that what they want? power? what's in it for matt gaetz? >> i think it's television time.

>> you are on tv right now >> yeah, exactly, but i am not an elected official anymore, and i just do this for fun when we try to prevent boehner from being speaker, there were a couple things that were different. we did believe he was marginalizing the conservative wing in the party, and you can't make that argument for kevin mccarthy this is not something we dreamed of when boehner was president, and at the same time under boehner we knew there were other people in line to get the votes to be speaker, and we had alternatives if we could prevent boehner from being speaker none of those things exists now, and there's nobody standing in line who is a viable alternative. things are very different. when i talk to these guys, the never kevin five and i ask them why are you doing this they give me answers like we are losing our country okay, you are losing our country

and your proposal to speak this is not vote for kevin as speaker, okay. >> how do you let yourself get held up for random by wackadoodles it may push them to a different alternative? >> i never thought of that word because that's the word john mccain used to describe me years ago. >> there's no logic in what they are talking about. >> long-term damage -- i don't know whether there's long-term damage can either party be more damaged than they are already damaged in the eyes of the american people? >> if you end up -- if the republicans end up with somebody who's a centrist republican or a right-wing centrist democrat as the speaker of the house, and one of the challenges we face as republicans is what is the

difference between us and democrats? what is the difference if the electorate sends a republican majority to congress and gets a nonrepublican speaker, that could damage the republican brand >> kind of interesting january 3rd. first thing we are going to do the news cycle gets shorter and shorter, but we will be watching first of all, we will know by 1:30 >> you will get a flavor for the first vote around 1:30 or 2:00 >> mick, thanks. >> thanks. coming up. a rough ride for tesla shareholders now we have year-end production delivery numbers we will break it down after the break and find out what it means for the ev maker for0 2tw23 we will also talk about where china stands on a full reopening. "squawk box" is coming right back

this is realtime insights. kathy, thank you for being here. we know the economy is slowing and we know consumers' wallets are worthless. what does this mean for businesses >> we know the american consumer is good for it, and i believe we will shop our way out of any downturn what will be interesting is how retailers respond to how and where those consumers spend the dollars. >> companies navigate the how and the where? >> it's about value, and 60% of consumers are still hyper focused on value

vale value really is important. >> how can businesses use data better >> well, it's around data analytics. we are helping our clients think about which kind of data or enterprise across the ecosystem, and what could really drive data insights to build those experiences. the brands and retailers that come out of this are the ones that will nail this in the near term >> thanks for sharing your expertise. >> thanks. it has been fun.

val welcome back to "squawk box. futures now have paired their gains basically in half. the dow now is indicated up about 130 points nasdaq up 75, and s&p up 17. time to go inside tesla's production and year-end delivery numbers. tesla's talk is down about 5%, or 4.18% this month, and jpmorgan cut it. let's get over to phil lebeau. he has the details on this >> the commentary from analysts is mixed because largely they say look at the numbers, and even if you were a bull, the

deliveries came in below consensus which was for 417,000 vehicles to be delivered here's why that is significant that 1.31 million, that's growth of just 40% compared to deliveries in 2021 remember the company's general guidance, which they gave -- i want to say about a year, year and a half ago, is they would have average, 50% annual delivery sales growth. this is clearly not 50%. tesla bulls will say, look, they said they would average that over many years and so you will have years where it's not 40%, and now it's well below expectations we talked about this in november and the end of december, and covid restrictions were a great

reason there as you take a look at shares of tesla, remember the fourth quarter results will be reported in just about three weeks from now, january 25th. two things will be in focus between now and then first of all, does the company, does elon musk say anything about the annual delivery guidance do they bring it down? do they say, look, in the future it will be 35 to 40% annual delivery growth? or do they also talk about the impact of margins, and the compression they will be facing. i don't expect any commentary in pre-earnings margins, but we will get that when elon musk does the earnings call on january 25th, if he does the earnings call. i suspect he probably will we will be covering this all day long, guys not surprising to see the stock under pressure with them short

of expectations. >> with the discounts they were offering to help people deliver, accept delivery by the end of december, and -- >> correct >> and in china, there were additional ones for people to accept by the end of february? >> yeah, if tesla starts doing this on a regular basis, traditional automakers, and for a long time that was the thesis for tesla bulls, they won't have to get into the incentive game like everybody else in the industry has for decades now the question is you did that at the end of the year, and occasionally you see that in the past from them, but very rarely. now has this become a regular part of tesla's business if that's the case, why are you giving it a multiple here? yes, they have higher margins, and that's not going to erode immediately and that's going to

weigh on the margins and that's the question analysts are trying to figure out right now. what kind of multiple do you give the company if you see demands slow down and margins come under pressure. >> and if they can't get the government subsidies they used to get as well >> sure. >> thank you we will be watching throughout the day. when we come back, dr. scott gottlieb will be with us, and at the top of the hour, katie stockton boy, has she been right. we will be back right after this

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state media in china playing down the severity of a surge of covid-19 infections there ahead of an expected briefing today by its scientists to the world health organization. joining us right now is dr. scott gottlieb, he is former commissioner of the fda and a cnbc contributor who serves on the boards of pfizer and illumina scott, let's start with where we think things are in china at this point i've been seeing reports that perhaps the biggest waves have peaked and some of the biggest cities, but that it's moving on to the countryside at this point. >> yeah, that's right. it looks like there's some indication that infections have peaked in cities like beijin and shanghai, they still have a ways to go in those cities, but it's a big country with a big population, it doesn't appear that the infections spread to all parts of the country and they have a ways to go lunar new year, which is january 22nd, is also going to be a

point in time which propagates additional spread. they dropped sequences over the weekend, some additional sequences, they put out about 600 sequences since christmas and it looks like from what they're putting out, and this is probably sampling that's going on inside larger cities, but it looks like a mix of b f-7 and ba.5, which are two variants -- one variant we've seen here, we have seen ba.5, we have not seen b f-7, although we do have cases of t they have a smaller amount of ba.5 bq and xbb which is growing here in the united states the fact that they have both an omicron variant ba.5 and b f-7 also suggests that they could have multiple waves. i think that they're going to have some successive waves we've spent the last three years adapt to go this virus, they're just beginning that process right now. i don't think this is going to be one wave and done there is some potential that if they have one variant spreading in the city and another variant spreading in another city they could swap places and see

successive waves of infection in that country. >> meaning if you've gotten one variant it doesn't necessarily mean you will be immune from the next one that comes along because there's so many variants that are all over the place at this point >> that's right. b f-7 has evolved to have immuno scape properties from people acquired various variants like ba.5 you could have a wave of ba.5 in the city and a month later have a wave of b f-7. it may not be the same intensity because you will have some cross immunity and people will have recent infection but it could be continuous cycles of infection, i don't think this is going to sweep across china quickly in sort of two months and they will be done with it. i think they will be grappling with this for a while. delta to get back into the country as well. they could have to deal with some of the older variants we have had to grapple with already. >> i've stopped tracking all these variants, i guess xbb has jumped out more recently

are any more dangerous or highly spreadable anything we need to be concerned about? >> it's hard to tell with xbb. we have a version of xbb in this country that wasn't in other countries, it has a slightly different mutational burden. singapore had an intense wave of infection in the fall with xbb and didn't cause an appreciable increase in hospitalizations, in fact, at the time the peak infections in october were about 8,000 infections a day and at the time they put out a statement saying 99.7% of them were mild or asymptomatic. there's also some data out of a lab in japan, albeit in hamsters which suggests it has less pathogen isity so far no reason to believe it's more pathogenic, some reason to believe it's less pathogenic, so less severe. it could cause a wave of inn north texas in the united states, hard to tell, it doesn't necessarily have to. my guess is at this point in the northeast it's probably 100% of all newinfections or close to it, it was 75% in the last reading by cdc last week and that's backward-looking.

it's been growing quickly, you haven't seen a significant increase in hospitalizations although they're starting to tick up. covid hospitalizations are coming up at the same time flu hospitalizations are coming down and flu case right side coming down very sharply. i think the health care system will be able to grapple with this there is no reason to necessarily believe that xbb will cause a big wave of infection but that's always a concern when you see these new variants come along that have the potential to escape some of the immunity we have acquired. >> we've been talking recently about how difficult it is to get children's tylenol, children's medication for any of these issues because there's been so much illness that's been floating around. have we pulled it forward? can we look forward to maybe an easier couple of months after the last few >> yeah, there is some evidence that the supply chain is starting to get restocked. there is nothing systemically wrong with the supply can chain, no shortage, no shortage of ingredient, this was basically a demand and supply mismatch and distributors and manufacturers didn't anticipate the early intense demand for some of the

medications, particularly the oral suspensions which need to be made closer to the point in which they're going to be used, this he don't have a long shelf life they've been increasing production, there is more supply in the supply chain. i think people will see spot short arjs for tamiflu start to evade. >> i just mean are we going to be facing less illness have we pulled forward for the illness, have we pulled forward the demand side of this equation and can we maybe relax a little? >> it's a great question with respect to flu it does appear to be the case. so we had a very early sharp intense wave of flu infection, i think when we look back at this season the overall number of flu cases actually isn't going to be higher than previous years, it will be about average relative to lhistorical norms barring the possibility we may have a second wave of flu which we sometimes see in a season, so

far it doesn't seem like flu cases overall or flu hospitalizations are going to be appreciably up from prior seasons. what happened was we pulled forward those cases, same thing are rsv. a lot of the infections that happened over the course of a winter happened early this year and happened in a very sharp wave >> dr. gottlieb, thank you >> thanks a lot. coming up, katie stockton will join us to talk about what she's seeing in the charts as we head into a new year for stocks. then later tech investor dan niles on his top picks in the sector including the bull case for meta 'she anyway. "squawk box" will be right back.

good morning futures pointing to a higher open ahead of the first opening bell of the year one thing to remember, though, stocks were at a record one year ago and it was all downhill from there. meantime, tesla reporting a record quarterly delivery number, but it's not enough for wall street. the stock down this morning after that record came up short of expectations. we're going to get you up to date with all the numbers. and california congressman kevin mccarthy goes for speaker of the house today, but will he

get it no one is quite sure what's going to happen when lawmakers convene. we will talk more about it ahead as the final hour of "squawk box" begins right now. ♪ ♪ good morning, and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times jair i'm verona long with becky quick and andrew ross sorkin. u.s. equity features were up 250, now up 135 on the dow abysmal years -- or year last year, down 33 or so on the nasdaq, almost 20 on the s&p, less than 10 on the dow, which was interesting when it was all said and done, but a little bit of a rebound this morning, but not as much as we saw early on there is the ten year, 374, two year 435, so that is about 60 --

not quite 60, so the inversion is a little bit less here is how things -- i was just talking about -- ended up last year, the dow, the s&p and the nasdaq all had their worst year since 2008, and all broke three-year winning streaks the broad-based s&p was down more than 19%, but here is some potential good news, according to cfra sam stovall, since 1945 when the s&p 500 has posted a negative year, it's been up the following year 81% of the time with an average gain of more than 14% a couple big stories that investors will be talking about likely today, the big one tesla, shares lower to start the new year, over the long weekend the company reported fourth quarter delivery numbers and although they came in at a record 405,000 cars, that still fell short of analysts expectations compiled by fact set. the expectation was 427,000 vehicles for the year,

deliveries road by 40%, that's huge compared to 2021, but third quarter investor presentation tesla said it expected to reach 50% annual average growth in deliveries over a multi-year horizon, so we will see what's going to happen. analysts, some saying they're going to have to come up with a lower price vehicle if they will try to hit those growth numbers. meanwhile, tesla's chief in china promoted to a new job overseeing the company's u.s. assembly plants and european and north american operations, that's according to reuters which viewed an internal posting of reporting lines in tesla. the move names zhu the highest profile executive at the company after elon musk. southwest airlines back to morph a normal schedule following thousands of canceled flights last week according to flight aware, just 1% of the car carrier's flights have been canceled today 4% were canceled yesterday according to the company on friday ceo bob jordan telling employees the company is planning to invest in more tools and technology, but that it will work in the short term to try to understand what went wrong after

that winter storm caused massive disruptions to its operations. just under 90 minutes to go before the first opening bell of the new year on wall street. cnbc's senior markets commentator mike santoli joins us with what he is watching. mike, happy new year. >> happy 2023, becky, and also i guess happy anniversary to that all time closing high which was one year ago today, january 3rd of last year around 4800, by the way, january 4th of 2022 was the intraday high, 4818 here is a two year look at the s&p, kind of a near round trip, just a little bit above that two year ago level a couple of relevant things, here at the high we were at about 21 times forward forecast earnings for the s&p, right here we're under 17 times so nobody would say 17 is cheap historically, but it certainly is a big reduction and relatively uncommon level of valuation decline over a single calendar year. a lot of that excess valuation

relative to history still is in the largest stocks the other relevant thing i think is most of the down side happened in the first several months of the year and it's been a little bit more sideways for six months investors collectively have not fully given up on that soft landing prospect so the market has remained supported take a look at value versus growth this is an explanation of why the market has managed to not go down more. so you see here they were pretty much in synch right at the market highs but value has held itself higher. we have obviously health care, financials, energy, some industrials in there really what it is is there's not a lot of tech, not a lot of amazon, tesla, internet stocks in there, so that has managed to stay higher. dividend shares also have been a strong area. so you've had places where you could find some shelter. take a look at -- speaking of value -- berkshire hathaway is the largest component of the russell 1000 value here compared to apple it's largest public shareholder,

holds close to 6% of apple, one-sixth of their market value, they moved in synch, that makes a little bit of sense because there is a lot else going on within berkshire but this divergence is interesting, you have the value quality play in berkshire plus a lot of defensive stocks outperforming that rush lower in apple it doesn't match up so well, but kind of interesting to watch this dynamic, becky. >> mike, did you hear what joe was just mentioning, it was a statistic from sam stovall i think he said 81% of the time if the s&p is down last year it will end up this year four out of five times it will be higher the next year. do you have any insights as to what that really means, how often we see these two years in a row down, especially if it's really steep >> yeah, you know, first of all, the market goes up most years so you start with that tailwind of, hey, two out of three years just in general the market goes higher, and when you have had a reset lower, prices going down means risk coming out of the

market or means some bad news has been discounted. i don't think you can bank on it because some of the years you did have back to back negative years, 2000, 2001 and '2, you had a similar dynamic to now, tech collapsing in the midst of that i think you have to keep an open mind and say that the market down close to 20% and 25% from high to low last year did build in a lot of those negatives. so i think you can't just be completely kind of, you know, doctrineaire about what has to happen even though everyone seems to be expecting a recession of some description. we have had the typical decline the s&p gives you in a normal cyclical recession so we'll see. >> mike, thank you we'll see you later. let's get back to the broader markets, talking about where we ended last year, what that could mean for this year. joining us is is katie stockton founder and managing partner at fair leads strategies. i guess there are some things on

the calendar technicians pay attention to but in general i would imagine there are overriding factors that have nothing to do with what month it is or what year it is. so has anything really changed since last time you were on, katie, in terms of looking for, long, more sideways activity with potentially getting -- testing the lows with -- across the board in stocks and bonds and crypto >> yeah, we've really seen no improvement relative to our last discussion we were looking for some firmness into year-end and that was based in part on a so-called santa claus rally which is actually still in force today and tomorrow so we expect more firmness this week, after which i think we can see volatility pick up to the down side and we're watching the vix for one very closely if you look at the vix it's testing its 50 day moving average. a breakout above that 50 day moving average would suggest that it has room to next

resistance of roughly 35 you can imagine what that might mean for the related s&p 500 we're watching for the s&p 500 right now for support around 3800 which does appear in jeopardy breaking maybe not this week but perhaps even next week and then of course we set our sights back on that 3500 level we're looking for even a volatility event potentially this month into next month and we would be managing risk accordingly. the seasonal influences are sort of petering off here, you know, in terms of that santa claus rally. we're losing that tailwind >> so in terms of percentages, it must be a lot more likely that we see new lows than we see new highs this year. so what would be the percentage in your view, probability that we see new lows just take the s&p and what is the probability we see new highs in the s&p? you can't say never for new highs in the s&p do you think it's twice as likely we see new lows as new

highs? >> oh, yeah. i think at least that. i think new lows are highly likely, maybe 80/20 if i had to assign a percentage, and new highs are not likely this year, but perhaps next year. i do expect this year to be an inflection year and that makes it really hard to predict where we might see the s&p 500 at year-end, but we do look for some kind of major low to be established on the back of a volatility event we don't have the long-term positive divergences that we look for to signify that major low as of yet, but that is something that we could see perhaps in the coming months, maybe the next four to six months we think that is pretty likely so, remember, the market is looking forward, looking past a recession. >> so we don't get positive divergences that you're looking for from sideways activity, you're talking about some type of move to lower levels that would set up for positive divergences that could then have a sustained uptrend associated with it.

so no matter how you look at it, are you looking for more trouble ahead? >> i mean, it could be sideways action i think it's less likely, though, because i do think that the market needs that kind of capitulation that tends to be associated with bear market lows corrective lows don't always see it, but bear market lows pretty much always do so i think we need that volatility event, we need the vix perhaps even closer to 50 before we can really get out of this down trending mode. the long-term momentum is still very much to the down side and unfortunately after december's 6% decline in the s&p 500, that also means intermediate term momentum has deteriorated as well in the short term oversold condition really only has shelf life for perhaps the next week or so and once you remove that tailwind, of course, the risk is greater to the down side we've seen very defensive sector positioning, value over growth none of that appears to be

changing to us as of yet, the uptrends and the ratios of consumer staples, health care, utilities, you name it, they are all in uptrends versus the s&p 500 and those trends still look very much in force and we would expect it to remain the case until we get out of this bear market cycle, after which we would look for technology and consumer discretionary to reassert themselves, but with apple the leader within the technology sector breaking down, that of course kind of sets that back another potential couple months. >> do you think the events that you're talking about, the fundamental backdrop, will be related to inflation and the federal reserve or you don't even venture a guess as to what would, you know, sort of cause us to feel so bearish or cause the markets to feel so bearish do you think it's the fed and inflation? >> yeah, i mean, those are the known issues right now from a macro perspective and the charts aren't going to tell you why,

they will tell you what, and it tells us that we're not in the clear yet. so on that front of course there could be an unknown. >> you can tell us about the ten year. >> we might need that. >> you can tell us what the interest rate complex looks like, technically. >> well, you know, the uptrend is very much intact for ten year treasury yields and we've seen a pretty good corrective phase alongside a corrective phase in the dollar we are looking for rebounds in both and a greater rebound than we've already seen the ten year yields are facing initial resistance now around their recent highs of 433 and then beyond that the next resistance is 5.25 we would not rule out 5.25 this year and, again, that tells us to brace more more of the same where we have just a lot of asset classes in the red, at least for a few months potentially, and that leads us to look for safe havens, you know, things like gold, which is really the known outperformer in this kind of environment

>> and then as far as bitcoin or crypto in general, it's been hit with a lot, it has tried to make a stand, but it doesn't look much different than the previous stands that it's been making you still see new lows there and the next support for bitcoin is -- what did you tell me -- 12.9 the last time we were on. >> it's 13,900 with the recent lows around 15,600 what we've seen with bitcoin and ether is a nonreaction to oversold readings and that to me is a message from the market that it's not ready to catch a bid off of that oversold reading which tells us then that the down trends are still very dominant we have bitcoin testing some key long term support based on our monthly cloud model and if that's taken out to us that's another longer term set back we have no indications yet that we have a final low in place we would have expected to have

seen some divergences to that end, but that's what we will be of course looking for. we think that bitcoin and other, you know, risk assets will all bottom together and that's -- after that point once we have that major low, that's when we will be rewarded for doing more deep dives on the fundamental front and really getting into the various coins or the various companies that we're looking to invest in. >> okay. great. all right. that covers all of our bases, katie. anything that -- anything that goes up when people buy it is not going up it's basically what you just said >> that's right. for now. >> huh just maybe the vix is going up, that's about the only thing that you're bullish on. all right. katie, thank you it is what it is who said that? someone said that. >> it is what it is. >> coming up, we're going to start the year off by talking to one of the best in tech, investor dan niles will reveal his top picks for 2023 and you

may be surprised at one of the names on that list like the major averages the s&p tech sectors just posted their worst year since 2008, 29% drop. speaking of tech, cnbc will be live at ces in las vegas this week for the first time since 2019 we have a stellar lineup of guests including amd's ceo and ceos of qualcomm and roku. team coverage with julie boorstin and phil lebeau bring you the latest tech trends and analysis live coverage thursday and friday stay tuned you're watching "quack" and this is cnbc. squack" and this is cnbc

well, we fell in love through gaming. but now the internet lags and it throws the whole thing off. when did you first discover this lag? i signed us up for t-mobile home internet. ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about. as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data

or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to 60% a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities. welcome back to "squawk box," everybody. first trading day of the year and so far the futures are still in the green right now dow futures up about by 112 points, s&p phi tours up by 15, the nasdaq up by 62 something that is not up this morning, the energy complex, wti is down by 1% and check out natural gas, it's actually off by more than 9%. this has to do with what we've seen the warmer than expected year of weather in europe. in fact, not just warmer than expected, unseasonably warm weather. it's been in the 60s and even the 70s across many areas in

europe over the last several days guys, i don't know what that means for davos, what your wardrobe will be looking like, but they have been talking about mid 60s even at night in some of these areas. and, you know, it's the spoiler for vladimir putin who has been hoping to hold europe up for ransom. >> better than my experience at whistler last week a negative of 20, negative of 30 >> you were out? >> i was -- >> you went? you did it. >> we were skiing in crazy weather, yeah. >> windy >> some of the days -- on the days it was windy you could have out for an hour and a half before you had to call it a day. it was tough >> what's our long-term abilities for davos? it's like that now, we're talking about two weeks, right >> i think this weather is expected to continue through january 9th, it's a little harder to see what happens after that natural gas, though, at its lowest levels this morning since february of last year.

these are significant declines in natural gas prices and, again, it's the weather in europe it's been much warmer. the big fear factor had been that it would be a colder than expected winter and that would lead to lots of suffering. >> for us in davos >> for us in davos >> oh, you are not talking about us, you are talking about in general. >> in general, that would lead to huge suffering because they don't have all the -- >> as usual you're thinking of all your suffering. >> as usual i'm thinking about, you know, what it's going to be like for us. so at this point -- you know, when you walk like two miles to these site there and back like six times per day, you do have to think about how cold it's going to be, especially when there's ice and you need spikes on your shoes and everything else. >> that is part of the reason i'm thinking about this stuff, but it's playing out in the markets as well. meantime, let's talk crypto. the latest chapter in the collapse of ftx is taking place.

sam bankman-fried being expected in court today he's been freed on a $250 million bond since his extradition last month to the u.s. from the bahamas. we should stop using the $250 million number because as we discussed it's sort of a -- >> right. >> a fake number of sorts. >> i mean, it's interesting, though, not guilty plea after his two lieutenants have both pled guilty and are turning evidence against him >> well, i think what happens in this case is if you're him or if you're the defense, you plead not guilty today and then you try to see if there's a deal to be had i imagine -- >> figure out what they have. >> there's no deal that's going to be offered up front i would imagine so you assume you say i'm not guilty today and depending on how things progress and what -- >> how much they actually have --

>> i think it's what kind of deal you can -- you could get, you know he's 30 years old. i would imagine if he went through a trial and was found guilty he would be in prison for life so then you have to start thinking, okay, is there anything better than life? you know, if i told you that -- would prosecutors agree to a 30 or 40-year sentence, in which case you would get out when you're 60 or 70 years old, would you do that? would you take your chance as soon as would you not? if you are on the prosecutorial side you say to yourself would you prefer doing through the trial, does that demonstrate justice to the american people more than some other kind of agreement? does the cost of that trial, which i imagine would be in the millions of dollars for the u.s. government, is that a better way to spend your time or not? i mean, i think all these things are tradeoffs and that's what's going through the minds of both sides and i've been trying to report on all of them. that's sort of what's at play. how it all works out i think

will take a long time, though. twitter facing a lawsuit for allegedly not paying rent on office space in san francisco. a landlord says that the social media company is on the hook for more than $136,000 says it told twitter in the middle of last month that it would be in default if the rent wasn't paid within five business days since acquiring twitter owner elon musk has slashed head count and spending, responding last week to a report that some twitter employees had started bringing their own toilet paper to work after janitorial services were cut. musk tweeted, lol, it was true for half a day coming up, 2022 was the year that inflation spiked and seems to have peaked, at least we hope we want to know what's in store for 2023 and when we could see the fed start to execute a policy pivot we will talk about that. a reminder, you can get the best of "squawk box" in our daily podcast, just follow

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♪ this is how we work now ♪ coming up we're going to get into the biggest questions for the u.s. economy in 2023, from inflation to the fed to whether we're likely to have a recession. stay tuned, "squawk box" will be right back should be trading. look!

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♪ welcome back to "squawk box" right here on cnbc just an hour and counting to go until the inaugural opening bell of 2023. this morning we are looking at some green arrows when it comes

to the stock market futures, but those gains have really paired back over the course of the last couple hours s&p futures up by 15, the nasdaq up by 66. elon musk's rocket company spacex is raising $750 million in a new round of funding that values the company at $137 billion. that's according to correspondents sent to prospective investors and obtained by cnbc spacex raised more than $2 billion last year and was valued at $127 billion during an equity round in may neither spacex have responded to cnbc request for comment. treasuries, the 10 years starts around 3.75%, this time last year it was about 1.5%. talk about where things could go from here and bring?

our own rick santelli. i was just talking to katie stockton, the markets don't know what month it is or what year it is there are some technical things that i guess traders do for tax reasons, et cetera but has anything really changed from where we were a week, two weeks, three weeks ago, rick i mean, we're in the same sort of pattern >> yeah, i think we are. i do think there was some end of the year volatility, i think the fact that we saw rates escalate basically as a helium balloon would the last couple weeks of the year and then to come in for the first session today and see double digit drops in everything beyond the mid part of the yield curve i think is important i do think that interest rates are going to have a propensity to move higher, but i think that the general feeling about how high they're going to move is a bit overzealous and i think today's opening is going to reflect that in large part

just because the fed is following this path, certainly doesn't mean that the economy is going to be able to withstand the medicine and even more to the point, i think the type of slowing that we're seeing is just makes the possibilities of interpreting what's coming ahead that much more difficult and i think that the biggest issue without a doubt for 2023 is when the market senses the fed is done i'm not even saying that they need to reverse. when they come to the pause that's going to be a big deal for the equity market psychologically and i think that should not be underestimated >> we had, as i said, we were talking to katie stockton about some type of event that could cause a more lasting low and, you know, nothing that i -- we really want to talk about is very pleasant that can cause a low in equities. do you think it's -- inflation stays stubborn do you think we've already done too much or will do too much and we have a harder landing than we

thought and that causes equities to take another move lower what do you think it's going -- i mean, there's no way to know what we don't know, but do you get the idea it could be a recession or harder landing than we think >> you know, the whole notion of any type of landing always seemed a bit foreign to me i think what we've been going through already pinpoints the landing is unpleasant in my opinion. i don't think there's going to touching the pad now, this is the landing. you could say that's when we reach the terminal rate, whatever that may be, with regard to fed funds. i personally think that the problems that are going to be left for most of 2023 obviously are going to be the services side of the equation for inflation, it's fueled in large part by the fact that there's still large pockets of capital from previous policies and programs that haven't been spent. we have $1.7 trillion that's thrown into the equation

there's a lot of money sloshing around the system, joe, and i don't think we should underestimate how that's going to make certain aspects of inflation a bit stickier, but i think in the final analysis, even the sticky wage issues, remember, bottom of the food chain, you look at states like california, boosting minimum wage to areas over $20, these things are all going to come home to roost. everything that we buy is going to be more expensive down to the train station issues that we saw with the transportation side of the equation, moving goods is probably going to be somewhat inflationary but it really is all about the services so it's going to be an easy setup. it's going to be the notion of a recession and how deep it is versus how much stimulus is still sloshing around in the system, and whether we have that psychological advantage that the fed is done raising, don't need to talk about lowering the problem with all central

banks, joe, and it's been a problem forever and i don't see it changing anytime soon is that it's an admission of failure for them to have short forays into either being is stimulative or pulling away stimulus. in other words, they like long-trending streaks. now, sometimes i don't think that fits with the marketplace, but anything less than that is an admission of failure in the eyes of a central banker >> all things to consider, rick. thanks glad to have you we will have you, you know, more analysis, but -- >> one question, joe, i have for you. i have for you kevin mccarthy, you've had some great discussions, mr. mulvaney this morning, i would like to know what you really think because if i look at the past when we had all three branches of government it seemed like the conservative agenda didn't really push too far down the road i think what's going on with kevin mccarthy is more of an issue of the efficacy of the republicans and the messiness is

a good thing what are your thoughts >> i try not to think too much, but -- did you get this -- did judd send you anything, becky? >> i haven't seen it >> hand me the envelope, please, and the speaker is steve scalise. >> is that what his guess is >> fourth ballot by he didn't say not to say t i hope that's okay. >> that's interesting, though. if mccarthy have so many people saying no they won't vote for him, scalise is pledging himself for mccarthy if there is no fix or way around it. >> you know, rick, i don't know. just to keep the peace in the republican party in the past the republicans -- >> see, isn't that the issue >> no. >> the issue is they've been keeping the peace for so long. >> the near term solution saying i like the policies, let's just go with it, you know, that hasn't worked out so well. i don't know whether you try to keep the peace in the party so

say, look at us, we are not fighting or whether, you know, you have four guys who -- or five guys -- i'm trying to figure out what their real end game is, too. >> five people, not just guys. >> yeah. >> i'm trying to figure out the rest of them the other guys, not the five guys, the rest of their agenda. >> i'm sorry, six. >> the five guys i can see, they're disrupters. >> you're going to get sixth man of the year, i don't mean basketball all right, rick, thanks. >> thanks, joe. let's talk to our next guest here to share their predictions about where the economy and fed could go in '23 joining us dafl wessel director of the brookings institution's hutchinson center and the heritage foundation's joel griffith. good morning to both of you. david, how persistent do you think inflation is going to be and take us inside the mind, if you could, of jay powell and how you think he's thinking about it >> i think inflation is going to be coming down because a lot of the supply side problems are

easing the price of shipping a container across the pacific has come down, used car prices have fallen for five months in a row, housing prices are beginning to soften i don't think it's going to come down fast enough for jay powell to relax i think jay powell very much wants to avoid being seen as the fed chair who let inflation get out of the bottle. he doesn't want to be the guy who undid all the progress that has been made since paul volker's years i suspect they pretty much have baked in another 75 basis points and i suspect they will go higher because i think he wants to err on the side of doing too much rather than too little. >> joel, what do you think >> i think that throughout all of this it is unfortunate that the chair of the fed, chair powell, has not accepted responsibility for the situation we find ourselves in were it not for the fed printing trillions of dollars to fund the explosive growth in federal spending under both presidents trump and president biden, we would not be having the inflation that we're

experiencing today and even if those inflation rates ease off of those 40-year highs that we saw last year and come back down to, say, 4 or 5%, that does nothing to relieve the pain of the middle class that now have seen their real wages decline by more than $6,000 over the past two years >> david, do you think that he needs to take more responsibility what does that mean? >> i think he's actually been by fed chair standards, fairly candid when he spoke at brookings a few weeks ago he said flatly, we made a mistake we should not have said that we would keep interest rates low despite falling unemployment until inflation started to pick up so, yeah, i mean, the guy hasn't exactly gone out there and flaj lated himself, but compared to greenspan so i think admitted one mistake in 20 years, he has done that. i think when we do the anatomy of what went wrong here is that

the fed was slow they didn't react when fiscal spending was a lot more than they had anticipated i think that's going to be a factor now i suspect the last burst of federal spending, the stuff that recently passed, will add another quarter percentage point to the fed's terminal rate. >> joel, are you satisfied with that response? >> no, because if you go back over the past two and a half years it was the federal reserve coordinating very closely with congress, with president trump and with president biden to ensure that the explosive growth in spending on the federal level would be financed by the federal reserve printing trillions of dollars to purchase government bonds and of course to also inflate the housing market by purchasing trillions of dollars in mortgage-backed securities. the primary issue here is not the that the federal reserve lass reacted too slowly by raising interest rates, it's that they actually worked hand in hand with congress in a disastrous manner that ensured that we would have this huge

burst of inflation that we experienced in 2022. this was forecast by many, not just free market economists but also by president obama's former top economist larry summers. so for the fed to refuse to acknowledge their rhone role in this because of all the money printing that is a travesty. >> how much of this is just about rhetoric versus what you actually want them to do, joel >> well, we need to have congress going forward ensure that the fed has less latitude to make these types of decisions in terms of purchasing such an array of assets. the authority right now that the fed has, very vague congressional statutes, is virtually unlimited. if anything we should learn how dangerous that power can be and i really don't think the middle class can afford to experience another extended period of inflation running 5% to 10% higher than their living -- than their wage increases

>> david, we have to run. >> i think that's too harsh. first of all, we got something for all this money, we got extraordinarily low unemployment, we got a recovery from the pandemic recession much sharper than most forecasters anticipated. so we got something for this the price of it is we got too much inflation and i don't think we'll really know how painful this is until we see how hard it is for the fed to bring it down yes, in periods of crisis like the 2007, '8 and '9 crisis that you know well and the pandemic, we expect fiscal and monetary policymakers to be rowing in the same direction for the good of the economy. i think the problem is that -- that they read it a little too hard at the fed and now they're catching up. they did quite a bit, 4.25 percentage rate increases in one year is a substantial increase in rates and i think the economy is beginning to respond to that. the issue for jay powell seems to be he's still worried that

wages are going up too fast and he doesn't think that the wage increases -- the wage -- the atlanta fed wage tracker said people who stay in their jobs have gotten 5.5% nominal wage increases over the last year, he thinks that's too fast for -- to be consistent with the 2% inflation goal so that's why i think it's going to be tough. >> david and joel -- >> with nominal wages increasing 5.5% and inflation increasing 8% that is a wage decline and that's the problem here. we're losing 2600 full-time jobs each and every day since may and that's something, too, chair powell and the biden administration refuse to acknowledge. >> it is a longer debate, gentlemen, and i'm sure we will do it with both of you very, very soon again. david and joel, thank you. >> you're welcome. >> thank you. >> happy new year. >> happy new year. >> happy new year. all right. some news just out from blackstone, the university of california is investing $4 billion in its real estate investment trust blackstone will then contribute $1 billion of its current

holdings as part of a strategic venture with the university's investment arm black tone president and coo jon gray will be on "squawk on the street" that's coming up at 9:30 to talk about that partnership when we come back jim cramer's very first take of 2023 and tech investor dan niles will join us with his top picks for the year ahead ayst tuned, you're watching "squawk box" and this is cnbc. went through a divorce. she had a lot of questions when she came in. i watched my mother go through being a single mom. at the end of the day, my mom raised three children, including myself. and so once the client knew that she was heard. we were able to help her move forward. your client won't care how much you know until they know how much you care. [music - cover of blondie's “dreaming”]

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let's get down to the new york stock exchange. jim cramer joining us now. a bull market somewhere, i know, jim, at all times, but i still think back to what katie stockton said, the odds we hit new lows versus new highs, she

said like 80/20. it's going to be tough to get back to those new highs this year and do you think we hit new lows >> you know, i don't think we do i think some stocks can still go lower in the nasdaq, but i think that -- i think that we've had a lot of damage and, you know, some of the big cat nasdaq can go lower, smaller nasdaq can be lower but i do like other stocks thinking that we're going to be done tightening at one point this year. i wanted to ask you, joe, because you're from cincinnati and i know this is off base, but i think the country is thinking about what happened last night. >> no doubt. >> i'm going to say it i'm going to say it. i want the kid to -- to do well and his family to do well. look, i'm going to be focused on the market at 9:00 because that's my job but i thought of you because you're from cincinnati immediately i think if we all don't mention it, we are making a mistake because this was -- this was one of the most horrifying things i

have ever seen and i just hope that everybody -- god, i hope this guy, you know, does okay. >> i immediately thought back to when these young -- hank gathers, remember hank in hoops and -- >> yeah. >> obviously for totally different reasons but lenny bias was going to be one of the greatest celtics of all time it's just so shocking and it's so sobering and it brings mortality home to all of us, i think. >> it sure does. >> when we see something like that that's what i said, from now on my resolution every time i -- every time i wake up i'm going to be happy because i'm waking up. >> you know, look, i think that -- you know it's not my style to bring up anything other than the market but i think that -- i will be right back, but, you know, you're from cincinnati, i thought about it you, i said, man, if joe had been there, i mean, i don't know, holy cow so, anyway, let's hope for the best. >> a great hospital, i grew up there.

>> you do. >> state of the art, children's hospital in cincinnati is one of the great hospitals in the country. uc medical -- it's good. and i'm hoping that this guy defends against another pass at some point in the future full recovery, in other words. i don't know whether that -- the i don't know if that's a likelihood we don't know, sometimes there can be some damage or you can have a heart problem or it can be one of those weird -- where your ventricles or the other chamber fibrilates it may not be permanent. he may make full recovery. that will be amazing. >> we don't want the burst a aorta. we want things to come back. i thought of you immediately geez, who knows. i don't know a lot of bengal fans you need to know a bengal fan to know >> those two coaches, there's no way anyone was coming back out regardless of what the nfl said.

i don't know what the nfl was saying, but it was-as it turned out it's the best that anyone could have done with the circumstances, jim >> agreed. >> i just missed i'm not unhappy. i was informed, you know, about it in deep sleep because i can fall asleep quickly. >> no one could. you're checking espn every 15 minutes because you just want good news. that doesn't make it good news. >> thanks, jimmy. >> love you guys let's all be -- let's think about this man this was not -- this was different. >> it was. certainly don't think about the game when that's happening thksjian, m. we will see you in a couple of minutes. "squawk box," we'll be right back 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?

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all right. just a little more than a half hour before the first opening bell of 2023 our next dwes is a highly respected investor on wall street he is here to share some of his best topics of the new year. dan neiles for satori fund you say don't fight the fed. don't fight the fundamentals. >> last year investors tried to fight the fed in the face of raising rates, you suffered because multiples compressed off of that. i think the thing you want to remain very focused on is what is the federal reserve going to

do obviously that's driven by inflation. then the second part of that is fundamentals in the sense that last year it was really about multiple compression which drove the market down and then in june you started to see estimates starting to come down. i think as you look at 2023 you're going to start to see earnings estimates really starting to get cut as the economy starts to slow down, following the rate cut -- rate hikes in 2022. and so those are the only two things that make up a stock price or the s&p, right? it's earnings and a multiple you pay on those earnings and i think both of those will be going down in 2023 the. >> okay. so let's talk about what you do like maybe that's telling of your first pick, which is cash basically. three-month t-bills. >> yeah. i mean, our single point estimate on the s&p, and we've written this up and if viewers want more details they can go to our website. 3,000 on s&p 500, today it's at

3,800. obviously our picks are meant to be on the defensive side the markets can go down 20%. with cash, you started last year if you wanted the 3-month t-bills you got .003%. now you can get 4.3% on a t-bill you're essentially getting paid to wait for the fundamentals to bond and the second one is health care. it's very defensive. we saw that last year. it was down 4% with the s&p down 19 you saw that in 2001 and 2000 as well where health care was up, when the s&p dropped 19% it's a pretty defensive space as well i think a lot of people like myself, unfortunately, put off going to the doctor during covid and now there's a little bit of catchup left some of that happened last year. there's a little bit more to go. my investment thesis is no one

wants to die so it's not a bad place to be. >> i agree with that thesis. the third pick that you like is a play on uranium. you think there's not enough of that to go around? >> yeah. i mean, if you go back to 2011 you had fukushima happen and at that point everybody was like, okay, we've got to get away from nuclear. you know, it's a bad investment area to be in for all the damage it can cause then russia happened invading ukraine. so then people started to think about we need to get to energy independence also at the same time you have this push towards clean energy that combined with things like small modular reactors people are looking at nuclear as a way to get to energy independence as well as clean so i think you're going to see that continue to gain momentum as we move forward >> all right >> so i -- ura is our pick.

>> let's also talk about mitsubishi financial group that's your fourth pick. i watched the yen today pushing higher against the dollar. as the moves from central bank come into play >> so if you think about -- go back two years to what happened in the u.s as rates finally start to go up, the banks absolutely wrecked in 2021 because finally you can lend at a rate to make you money. and so if you look at what's happened in japan, this has been called the widow maker trade, right? people are thinking rates have to go up for a very long period of time. it's never happened. now they're starting to see inflation. japan is starting to get away from yield curve control and the two-year treasury in japan went positive for the first time since 2015 it's been negative this whole time so if you are a bank, you can't make money in that environment so if you look at mitsubishi financial group, you know, it's

the biggest bank in japan. the stock's actually down since 2001 from its listing in april versus the nikkei which is up 100% and s&p is up 235 i think you're going to see them start to behave like the u.s. banks did starting two years ago when rates finally started to go higher. >> okay. finally, let's talk about meta we don't have much time left that's a stock that has taken a significant haircut. >> yeah. i mean, the short version there is what's within their control is what's affecting the multiple which is they're spending on the metaverse. we bought it after that disastrous q3 guide. we bought in size. we still like it at 11 pe we can short views like hulu against that to hedge the risk of advertising slowdown we think you'll see continued expense reduction and reels which competes against tiktok is doing quite well read more on our site. >> dan, thank you.

we appreciate it and appreciate your top five picks. >> thanks, becky. let's take a quick check on the markets as we get ready to hand things over to "squawk on the street." you're going to see the dow futures up 143 points. s&p up by 22 the nasdaq up by 93. the folks, that does it for us today. >> tune in tomorrow. andrew's getting a haircut so we're all going to be -- >> not a meta typer. >> no, a really good one tune in. >> we'll see you later bye. good tuesday morning happy new year to everybody. welcome to "squawk on the street." i'm david faber with jim cramer and we are live from the new york stock exchange. let's give you a look at futures as we get ready to start a new trading year looks like we're going to open on a positive note, at least for those who own equities also a few moments from now we're going to have blackstone's pred and coo jon grajo