alcohol? i have had that. alcohol, popcorn and something else >> the booze and laughing. >> can you blame them? why not? put your feet up settle in. amazon set to layoff far an m -- far more workers than initially thought. it is thursday, january 5th, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick with joe kernen andrew is on assignment. you will see modest advances

these are modest s&p futures up 3 nasdaq indicated up by 16.5. that comes after gains for the major averages in yesterday's session. if you were watching, it got volatile to the end of the session. after that, the close, you were looking up across the board. dow up .40%. s&p up .3% if you check out treasury yields this morning, you will see right now it looks like the 10-year treasury is yielding 3.96. we have seen pressure on yeield in the new year. the second straight night adjourning without a vote to secure enough support for the speaker post thes ho the house adjourned without voting for the seventh time.

>> i think we will talk some more s>> voting is expected to resum today at noon. it sounds like an arbitrary number if you drink before noon, democrats or whomever watching this, that was funny you don't think republicans would be settling in if they were watching this mess? cheering with popcorn and brew is that why it is noon they feel bad about it it has to be mimosas >> long sessions >> i think the republicans should hand everything over to this person. lauren boebert and matt gaetz. she said former president trump had been urging breakaway republicans to support mccarthy.

>> having my favorite president call us and tell us we need to knock this off it needs to be reversed. the president needs to tell mccarthy, you do not have the votes and it is time to withdraw >> telluride is in her district. >> wow. >> no one in telluride votes that part of colorado is conservative >> second homes? >> nobody. now we're learning more about concessions that mccarthy made to the holdouts. matt gaetz said mccarthy is agreeing to a provision to allow any one member of the house to call for a removal at anytime. mccarthy agreed to place caucus members to committees.

and for what it is worth, elon musk tweeted, kevin mccarthy should be speaker. we will talk to former senator judd gregg this morning. this is a snapshot of the future for what it is like to wrangle these cats it sounds like a double entendra why do you think boehner threw in the towel other people don't want it it is easier to be the opposition and nothing is expected of you and you complain all the time if there is compromise, any comp compromise, they don't want any. i'm not saying they don't have relevant points over the last two years. if you want to be part of the --

you want the house now you have the house it will take governing >> this is an attack on the rest of the caucus. this is the 10% versus 90% they want outside influence within the caucus. they don't want compromise by the way, this is -- if you work in any organization, you see this take place. it is rewarding bad behavior bad idea that is a cancer to the organization if you play to the babies and play to the loud mouths, you are antagonizing all of the adults in the room. >> when lou dobbs throws trump under the bus, you know we are in uncharted territory lauren boebert i don't know whether if mccarthy puts off his arm whether that would be a c

concession >> that gets you to the point this chaos is what happens for the next two years in congress that is a ridiculous bargain to make >> we know that scalise or jim jordan wants judiciary he doesn't want it byron donald no one knew him that well until this latest and he voted for mccarthy the first time and then himself. >> i don't know how much of this is personality clash with kevin mccarthy if you caved to the 20 loudest cry babies who are making this public, and by the way, this is not to say this horse trading doesn't happen all the time in politics at this point, everybody knows about it you are inn feurefuriating ever. >> you saw how many votes andy

biggs got in november. 31 votes. >> i don't know if he can beat mccarthy or not. i know if you cave into the demands and demands are shifting and the group of 20 asked for have changed you have never apiece them that is a terrible situation. it looks more like israel or uk. >> or italy. >> any of the coalition governments. in the meantime, let's talk about amazon we have the news last night that the company is cutting more employees than the 10,000 that had been previously reported in a blog post, andy jassy said it would amount to 18,000 workers. the new cuts will focus on the ecommerce business and human resources and technology jassy said the company made cuts to departments in november at the time, those were the moonshot projects. things that were not profitable.

the new things they were trying out. they said they would cut more jobs in january. he was forced to address reports of additional cuts because an amazon teammate leaked this internally the wall street journal got a hold of it you are looking at 80% more job cuts than initially reported. european nations imposing new restrictions on travelers from china amid fears of the increase of covid cases. passengers departing from china coming to eu countries may have to show proof of negative covid tests and wear masks on flights. it is up to the member states to

adopt the recommend minuations similar measures to the u.s. and uk and australia could we add davos to that could we petition maybe? >> we're in favor. >> so we're headed over there. usually a large con contingent >> i thought about it. >> have you thought about it you have your double duck mask china confirming the hong kong border will reopen on sunday after being closed for three years as part of beijing zero covid policy. a 48-hour negative covid test will be required testing on the mainland will be scrapped i'm checking nearby locations just in case somewhere to drive if something were, god forbid -- if i'm stuck in davos, i'm not staying. you can drive places

i can drive. >> if you get covid, you are spreading it that's your plan >> i'm going to sit in my hotel room for two weeks >> that is the responsible thing. >> with german speaking law and order episodes i don't know coming up, the fed affirming commitment to fight inflation. >> get on a plane. see how many places you can take it >> i'll sit alone somewhere on the coast. >> i was thinking lake como. >> there you go. all right. we can talk. both of us are talking italy we know that >> yes after the break, esther george will join us for an interview. you are wahi "ua b" here on cnbc

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fed officials are committed to fighting inflation and expect higher interest rates to remain in place until results are made. that is according to the december meeting some warn the public about reading too much into the move to step down the pace of rate increases. we will speak to the kansas city

fed president esther george. speaking of change at fmoc kansas is the rotating position off along with jim bullard and cleveland's loretta mloretta me. joining us on the phone to discuss this is joanne feeney and zachary hill these are the inaugural appearances. it is important for the new year it sets up the next 12 months, joanne how is it looking for you?

>> good morning, joe we will still have the fed news and risk of recession and concerns of interest rates still pushing markets around investors should expect that volatility in this situation, labor markets continue to be tight the fed made it clear they will get the inflation under control. they need to maintain that credibility. they are facing that with the shortages in the labor market which will keep pressure on upper wages. they have to hold firm are raising rates and holding it high for as long as it takes investors should be careful to read into the data that might make them think rates will be cut soon we have labor hoarding in the market which is a signal that firms might be talking about threat of recession, but ultimately think it is a good idea they hang on to the labor they hire. it will not be as deep or as

long as we experienced in the past with recession. it is not a bad set up it is important to be selective with stocks. the market is not cheap. we think there are real opportunities for positioning for growth over the longer term. >> i'll come back to you, joanne zach, i don't want to speak for you and if you have feeling about 2023 let's say we're in a trading range and it is range bound. its does go two or three times and tests the lows is that time when you buy stocks you like if you are long term? does it matter your age? does it matter if the trading ri range is resolved? i assume it will be resolved some day and markets moved higher can we go down and trade at 3,000 on s&p for the next two or three years? if it will not do that, shouldn't you buy the names when

they're on sale? >> great to be here, joe happy new year i think that is probably right i agree with what joanne said. this is going to be a difficult year again not as hard as it was last year. you have a different set up around policy and where interest rates are. that does have us cautious to start the year i think you are right. you can think of this as a sell rally and buy dip market not quite as aggressively as customers are aggressive to doing the last ten years as when the fed had your back. it is not that set up. we are not looking for the fed to rush to the markets rescue this time around certainly the fed minutes yesterday told you they were not going to do that we very much believe that message. >> you said sell rally if you are long term, you wouldn't just buy dips

i was thinking about acquiring the stocks you like for the next five years something like that. that doesn't make sense? >> the next five years, absolutely it depends on the mandate and goals. depending on you are looking at that, that's how we think about this year. >> joanne, does that make sense to you or people can take a year off and go to the two-year >> joe, the two-year will not afford a lot of return given the rate of inflation. we expect inflation to come down it will not do a lot for you we see opportunities here. joe, we do individual stock investing for clients. we can be selective and jump in on those dips. looking to hold for a stock for several years. we like to look at things right now where we think investors willmove toward. last year was energy this year is less so

look for este lauder we think it will benefit from china reopening after the covid surge and more travel does well and more people moving through airports this is a resilient company. pets will need care. this is a company providing therapeutics for pets. good resilience play both bring a dividend yield with the underlying stock prices over a volatile year. >> pets. four dogs now. >> a lot >> 17-year-old, the 8-week-old and two german shepherds in between. i think the municipal people out

there. i'm not sure they were legal >> if you had cats, i would call you a cat lady >> yeah. one is not staying supposedly zach, you got individual names for us >> no, not individual names. i would, you know, on the sector basis say we do continue to like energy i don't think we will have a year like we have seen this year you know, we are favoring energy and value stocks in general across the portfolios to start year it was a record year for value last year versus growth. i think we have to go back to 2000 to see as big of a spread as last year we are notike likely to see that going forward they will keep the rates high and that has investors prioritizing cash flows and dividends. that is how we think forward this year.

>> happy new year. joanne and zach, thank you we'll see you again soon thanks when we come back, we will talk about holiday spending. it was up in 2022, but so was the amount of debt con sierms t -- consumers took on. and later this hour, we will talk about the apple slide with alan patricof. he was an early investor in the company. "squawk box" will be right back. you ok, man? the internet is telling me a million different ways i should be trading.

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the holidays are over. now it is time to pay for all that spending. surveys show it to take months

cnbc's sharon epperson is here with steps to lower debt >> good morning, becky c holiday spending increased in 2022 the average amount was over $1,500 according to the survey from lending tree. 37% of those with holiday debt said it would take them at least five months to pay it off. to get rid of it faster, set a goal or timeframe of three-to-five months to pay off the debt if you used a buy now and pay later program, make sure you comply with the terms to make sure it is truly interest free if you miss a payment, you will be charged a late fee. focus on paying high interest credit cards first since it costs the most apply for a zero percent trans

ctr transfer balance you can call your credit card company and ask for a lower rate one study found 70% of the time they will lower the rate if you are not able to lower the rate, you may want to consider taking out a personal loan of 9% to 10% which is better than credit card rates which are 20% on average right now paying lower interest or none is the best weapon in getting rid of holiday debt. for many, $1,500 is the tip of the iceberg with the overall debt load. >> i would warn if you take out a loan, don't do a heloc you are taking unsecured deid h tell you -- unsucceeecured debt

can claim for bankruptcy >> not you will go and spend it on other things. >> what if you are in the hole >> it is foreiis important to tn expert you can go to the national foundation for credit counselling. work with them on a type of strategy to pay down the debt. it is not just the holiday debt or credit card debt student loans as well as car loans. a lot of things weighing on people going into 2023 it is important to talk to someone if you need a debt management plan, they can help work out a plan to come up with terms you can meet >> sharon, thank you >> draftk kings

trying to win it back? >> nope. >> nope. i have a couple of sure things i knew that. coming up, former senator judd gregg weighs in on the speaker battle now entering the third day in the house of representatives. as we head to break, here is a look at s&p winners and losers from yesterday >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast,

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good morning welcome back to "squawk box. live from the nasdaq market site in times square. check out the numbers from yesterday. no gain is guaranteed during a regular session. it could be anything usually it is some body language from someone on the fed that does it again saying we're going stay higher for longer again, the yield curve doesn't

show the markets take that seriously yet. >> if you were surprised by the minutes, you weren't paying attention to the press conference >> i said that today we said that ten times in the last few weeks >> the market may not believe them the market may think and it seems to think they will have to cut sooner i will say if there is anything in the message of the fmoc minutes yesterday, i read something that was more dovish if you were looking at the back and forth. the fight with those who think we need to be careful not to cause recession because it will hurt the lowest income people the most versus thought who fight inflation who hurts the lowest income the most that is the battle the brewing. the house of representatives adjourned for the second night without a speaker after gop leader mccarthy failed in the sixth vote to secure enough support for the post of speaker. voting is expected to resume today. we are learning of the concessions mccarthy gave to

holdouts mccarthy agreed to the provision to have any one member of the house to call for a removal at anytime. gaetz said mccarthy placed caucus to committees joining us now to discuss all of this is former u.s. senator judd gregg who previously served in the house and governor of his state. s senator, welcome let's talk about what you see playing out. we talked to you last week and you thought it would be messy. you thought kevin mccarthy would not be speaker maybe scalise would be named after four votes now six. what do you think? >> i go back to the cartoon where you said we met the enemy and he is us the simple fact is the republicans have been given the

reins to govern and they don't want to appear to govern that is bad. that is unfortunate for the republican party it is not good to be the congress whoever comes out as speaker -- there will be a speaker and it will be a republican speaker -- and that person will probably be chosen this weekend. that person will not have any power. the party is hollowed out speakership. if you don't have strong speakers in the house of representatives, you don't govern i served to tip o'neill. the house is traditionally an autocrasy. the party in power doesn't have to acknowledge the my mainority

party. this is not good for the republican party which has been given the chance to govern again. it is not good for the country because congress cannot act over a period of a couple of years is not healthy. >> you look at the situation the 20 or so holdouts and what they want. it looks like the list of demands keeps changing mccarthy has given in to every one of the demands and it is still not enough. eight or ten would still hold out with all of the crazy concessions he made. what do you do >> he is giving them everything about the furniture in his office i suspect that's next. the situation is that they don't like him some of these folks. i certainly look at them as rope republicans. they are there because they like chaos and revolution governing is what it is all about. if you are standing in the corner and shouting, you are not

participating. you have to get in the middle of the ring and make progress these folks are not interested in doing that. so as a result, i don't know that mccarthy can get to the speakership. somebody will get there. it will be a republican. obviously they will not cross the aisle to get votes that would be extraordinarily destructive to the purposes of why they were elected. just a question of who that person may be. maybe mccarthy will pull it out. maybe at some point people will say enough is enough even hardcore -- >> i think you are an enabler. you opened the door. right from the very start, you sort of said mccarthy doesn't have what it takes >> yeah. that's my view >> why what's wrong i don't think of you as a freedom caucus guy you are closer to mccarthy he is right of you

>> i would be -- >> he is definitely right of you. it doesn't take much >> that's very possible if he is not right as i do whatever my wife tells me to do. >> she can speak >> it would be nice to have more charismatic stronger leader. the way he handled the desantis situation is despicable. he didn't show leadership. that was the defining moment if he wanted to be a leader, he should have said i want to lead. >> we can get liz cheney >> no consensus for liz cheney >> why not you said he would have alienated the entire maga 30%. >> i don't think so. this is one individual who acted terribly and really shouldn't be

reflective of the party. it was one vote for him. that's why he didn't do it that's not the big issue here. those are all ancillary issues the bigger issue is if they can't elect the speaker, how will they govern the issue is governing there are things that need to be done in the country and require crossing the immunocoaisle to dt you have a democratic senate and democratic president if the next speaker of the republican party in the house is not allowed to have the flexibility to lead the republicans to some sort of compromise on big issues like immigration and social security which is going broke, things that ronald reagan was able to go across the aisle and reach agreement and that would be unfortunate for the nation what is happening here is they are displaying tremendous lack of interest of governing and great interest in fomenting

shouting >> and grandstanding and their personal brands to get forward judd, let me ask the question is not being able to lead and not being able to govern if no one can and we are looking at two years of not getting anything done, that is a big deal and one wall street will set up and start to pay attention to to this point, this is theater and circus and entertained by it and getting plays out the next two years in congress. >> that's right. i hope we come out of this with somebody who can actually lead lead in a way that keeps the party and coalition that works and lead in a way that is able to cross the aisle and make

major agreements on big issues which is what you have to do in divided government there is obviously a lot of folks who think divided government works best because you don't get a lot done and there is some truth to that. i wish the omnibus had not been passed and pushed into this year they would have ended up with a continuing resolution and probably a defensive appropriation bill rider which would have been better for the deficit and debt it is a horrible omnibus they passed in the end, things do have to get done the house of representatives is one that has to be in the mix. so i'm hopeful we will get a leader out of this who can basically lead the republican caucus or the vast majority of republican caucus and understand he or she has to be strong enough to say to some members of the caucus and say we have to reach across the aisle because

that is how the government works. >> judd, if they are watching you right now, they are saying we are right we need to stick to our guns and not let it happen. the moderate republicans are ready to work. you said you want to work with the biden administration and the senate and do a bunch of things. >> how about the debt ceiling? >> okay. that's about the only thing. >> that may be the only thing that gets done. >> that's what i mean. the markets would like that at this point >> well, i would presume that biden would work on the debt ceiling. how are you -- i suppose they can pass bills in the senate and they die just like the last two years they can obviously have their hearings and a lot of hearings on things happening. >> those 20 are pointing to you as part of the problem that thinking in the republican party right now.

that's what they are saying. this is why -- yeah. this is why we need to stay strong >> governing is bad? >> yeah. with a democratic senate and th views with the governing the last two years was it bad >> terrible. >> there you go. >> we spent a lot of money we should n't have spent. >> becky, i heard that point and you made it well you have to remember this is a business that relies on votes. if you have the votes, you win if you don't have the votes, you lose right now, mccarthy doesn't have the votes. maybe he can get the votes if he does, he wins. if he can't get the votes, he can't be speaker it's that simple >> byron donald has 20 >> the next person. >> you remember schumer couldn't get the votes without manchin

and sinema the senate democratic caucus was led around by two members of the caucus the same thing is happening in the house today. you have the vast majority of the house of republicans want to have mccarthy and move forward and govern you have the group of ropes of republicans who want chaos you got a deal of them it comes down to votes you don't have the votes, you can't do anything. >> you will be in the dog house in the judd home >> i am in trouble one more time. >> i know. i know isn't she yelling right now? where is she >> she's probably just getting ready to explain things to me. >> you are in trouble. you will be cooking for yourself for a couple of days >> judd, thank you very much we appreciate it coming up in the next hour, we talk to representatives from the problem solvers caucus josh

gottheimer and nicole malliotakis. wel rhtac'lbeig bk. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

still to come, we will talk about apple's slide with the

early investor in the company. alan patricof. shares right now at $126.73. you can get the latest on "squawk box" andou y can listen anytime. we'll be right back.

michael rubin's sports platform company if a nettics is divesting its stake in candy digital. that's according to an internal memo they will be selling its interest to a galroup called galaxy digital he said, over the past year, it has become clear that nfts are unlikely to become profitable as a stand-alone business remember in january of 2022,

fanatics acquired tops trading cards. after also acquiring the rights to produce mlb trading cards ruben wrote, divesting allowed us to ensure owners were able to recoup most of their investments in fanatics, especially in an imploding nft market apple's market cap hanging around the $2 trillion mark after dipping below that level earlier this week. it came one year to the day after the market cap topped the $3 trillion level. the stock giving up 27% in the last year. joining us to talk about apple and big tech is alan patricof, the co-founder and chairman for prime time partners and was an early investor in apple and, allen, when you look

back -- it's good to see you when you look back at the last, n i don't know, take your pick, is it more complicated than that, what's happening to tech right now? the advances are coming across qua quantum leaps. the stocks have plummeted. it's all about the fed anyway, isn't it or do we look at it individually with what the ceos of these tech companies are doing? >> i think it's -- first of all, happy new year i think it's a combination of factors and you can't just lay it on the fed. in any period, there are cycles and i think that we have -- we are going through a very heavy period in the technology world, particularly which was accelerated by the pandemic when, for example, the uses of computers and zoom just had to overwhelm usage compared to

normally what had been personal interactions i just not an email yesterday from a young man who was an intern to me ten years ago, when he recounted to me what is happening on the line, every single person in his family and extended has covid today and people are afraid to go out into the workplace and what he told me, they're all going on vacation for the first time. they have this relief of getting away and they're running for vacation lands and i think that, you know, the problems that are coming out of china are not going away they're going to accelerate. and on top of that, i've been saying to you and so -- on this program and others that i really believe that this legislation that's been going on in europe and pending in the united states and congress in both the senate

and the house is going to affect online advertising you saw that facebook and google for the first time in years went under 50% of digital advertising with the 48% they're rejecting 44% next year. i think these rules that are going to restrict people -- restrict the companies from following behavioral ads and tracking us and making real requirements for people to have to opt in to accept the ads, apple's had the same kind of problems when they've been restricted in europe and here also from following their own internal use of -- of their apps and using that for tracking. i think that we're entering a new phase of computer usage that is going to be -- is going to change the environment

well, not directly related to this particular point. i think we're -- 2023 is going to be a year in which we're going to see people coming back into the office place. i think we've overused that method of people working from home the opportunity of interaction on a personal basis has gone too far and there's a thirst, particularly younger people, to have some kind of personal interactions so they can actually learn something from being around people not necessarily as old as me, but seniors and have something to share on an interactive basis. i think on the whole, all these things are having -- going to have a serious impact. i don't know if you saw the legislation yesterday in europe that -- $400 million which is now up to a billion and a half in the last 12 months. we're going into a new era of

tech and it's not -- it's not serious. i mean, but it will slow down i think the growth of a lot of these companies, including apple. >> interesting you throw in china and all the other things you talk about. some of it sounds like growing pains. we'll get this -- i guess i get -- if i search something for toe fungus and i get all of these ads for toe fungus medication, i haven't done that because i don't have that -- >> asking for a friend. >> but that kind of stuff seems like growing pains what we're able to do just in terms of physics and political engineering, that's positive too, but multiples are going to swing around it's a great time to invest in tech, all the time, wouldn't you say that >> it always is. but -- what came out of the news was -- ai last week, two weeks

ago, it was the holiday time so i lost a little bit of a track of time. it was so exciting i've never seen -- the excitement that came out of that and what the implications of that is -- you know, we don't know yet. >> we got to run you bring up a lot of good caveats. and that does explain a lot, throw in the fed and we've obtained -- some of the worries, some of the angst. it's great having you on -- >> don't forget, the fastest growing part of the population is people over 60. i don't know if -- >> the best people, i know i know you're right and i'm looking directly at that, at that happening, near term. >> joe, i can't resist throwing out the last crazy thing i did on december 31st, i went paragliding in mexico. >> we all want your life the marathon --

>> i don't know about that the paragliding. >> you live well bye, an,e' s yla wlleeou later. right now, up across the board, but not by much we have more after the break i love to help people understand the world through their lens and invest accordingly. you can call us christmas eve at four o'clock in the morning. we're gonna always make sure that you have all of the financial tools and support to secure your financial future. that means a lot for my community and for every community. to adapt in a fast changing world, you could hire a professional pit crew. go, go, go. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve...

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good morning investors are digesting the fed minutes and awaiting labor data. we're going to get adp private

payroll data this morning ahead of tomorrow's jobs report. green arrows we'll keep an eye on that. and day three and still no speaker after republican leader kevin mccarthy failed to secure enough votes for a second day in a row. we'll hear from two lawmakers, one on each side of the aisle. amazon announcing major layoffs. we'll break down what it means for the business and your portfolio. the second 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 square i'm joe kernen, along with becky quick. andrew is off today. u.s. equity futures are surging. they're up a point now they're down never mind the nasdaq is up a little.

we did end in the green yesterday. over -- it was triple digits for the dow. but not as good as some of the earlier gains we had seen. we'll see. how about the -- as the first week of january goes, so the first month goes. >> i'm so done with that >> as the first -- as the first month goes, so goes the year if the nfc team wins, it's really great >> blah, blah, blah. >> none of it works. causation isn't the same as correlation in so many areas of ground and then you got the two years, the only one that's up this morning. the ten year -- i'm talking about the principal itself check out oil which got up -- i thought it was at 80 last week now back down to $74 growth concerns. obviously, and supply looks better with -- wasn't it really cold like two weeks ago? now we think -- >> yeah, we have a very short

attention span. >> six days of freezing weather is washed out by five days of warmer than anticipated whether. it has made a difference in europe for natural gas. >> crypto, 16,800. fed officials expect higher interest rates to remain in place until more progress is made some members cautioned against prematurely loosening monetary policy and warned the public about reading too much into the move to step down the pace of race increases we're going to speak to esther george that's coming up at 8:30 she's set to retire later this month. she's going to tell us everything that's going on speaking of changes at the fmoc, kansas city is one of the voting positions that's rotating off in the new year along with

st. louis's james bullard, susan collins and loretta mester the new members with philadelphia's patrick harker, lorie logan. >> walgreens earnings out. let's get to bertha coombs glad for you to handle this for us take it away. >> walgreens reporting a net loss of 3.7 buildings for its first fiscal quarter of an adjusted basis it posted earnings of $1.16 per share. on the top line, 33.4 billion in sales also topped expectations walgreens reports in three different segments total sales of 27.2 billion topped expectations. it's a spike of cold and flew

off set lower testing demand prescription revenue was flat year over year if you take out covid vaccines, it was up 2.1% expenses continue to weigh, this is a rebuilding time for walgreens, continued expansion of the company's automated fulfillment centers. international sales missed a bit at $5.2 billion hit by a 15% currency headwinds comps were up 8.7% and the health care segment, this is where they're building sales also came in light at $989 million the revenues were up nearly 49% year over year now has 376 clinics with walgreens. as a result, the company is

raising full year sales outlook to 133 1/2 to 137 1/2 billion while maintaining guidance street not impressed with that the company is announcing that it is going to pursue certification for dispensing abortion medication prescriptions following new rules from the fda this week joe? >> all right bertha, very good. thanks for handling the walgreens duty this morning. let's get to frank holland with a look at this morning's premarket movers i got to throw you another curve ball you're going to want to hear this did you see the news from southern company >> i did not see the news from southern company >> i did not. >> guess who is taking over. our friend chris womack. >> oh, chris he's a great guy he's your golf buddy, i believe.

>> he's any golf buddy >> great guy i was very surprised when he said you guys were friends [ laughter ] >> tell me why be more specific, why would you be surprised at that. >> because he likes him. >> it was surprising on many levels, joe. becky is looking at you, she knows. >> i'm going to ask chris. >> you know what shocked me, he only had good things to say about you. it really threw me off. >> we spent three days together in a foxhole at pebble beach you learn how to rely on each other after you totally embarrass yourself. >> you're right. adversity builds character the whole time at pebble beach, you were probably roughing it. >> play five rounds in a row i like toxicm.

i think chris will come on now too. >> we're going to do a graphic right here thomas fanning stepping down time for morning movers. we're going to start with one of the big stories from yesterday amazon shares are moving higher right now, up 2% on news the company will cut 18,000 jobs those job cuts focused on its e-commerce business as well as human resources and tech the ceo said the company added qui employees too quickly during the pandemic. goldman upgrading a number of banks, including bank of america, along with wells fargo. you can see up a quarter of a percent. analysts say bank of america and wells fargo should continue to have the best net income trends in the industry. bank stocks are moving higher in the premarket. also potential merger news western digital reports it has

started with kioxia. it could create one publicly traded company back in june, western digital said it was exploring strategic alternatives coinbase trading lower this morning after a downgrade. you can see right here, shares are down 3.5%. the analysts cite elevated regulatory risk after the ftx bankruptcy a price target of $36 now. it was cut from 75 bucks shares of coinbase also plummeting more than 25% since the ftx bankruptcy you can see now, though, down about 3.5% back over to you joe and becky. >> very good tom fanning -- he's not my friend not anymore. tom fanning is not that old, is he >> no. he's been on the show for a long time. >> he talks more broadly about the economy, not just what happens in the company

i'm surprised by the sudden step down. >> i wonder if this means chris is not going to play as much golf. >> probably. >> that's not good. >> maybe it will make you look better by comparison. our next guest has portfolio resolutions for 2023 joining us right now is gabriella santos it's good to see you happy new year. >> happy new year. >> i think your first theme plays into what we heard yesterday. this idea that they are standing pat, a little bit of dissension there between the people who want to make sure there's not a recession because it hurts the low-income people versus the people who wants to make sure there's not high inflation the message is pretty clear that free money is gone >> absolutely. and that's the first portfolio resolution here is really make sure that your portfolio is

engineered for that end of free money. i think in the very short term, we're still talking about is it 25 or 50 basis points, what's the terminal rate, is it 5% or above, and that matters tactically but i think longer term the read-through is, even when rate cuts do arrive which we think is next year, we will have a period of interest rates above the neutral level and we are not going back to zero interest rate policy. >> what does that mean tactically how do you change your portfolio as a result? >> so i think pboth tactically and structurally this means that we're in the old era of investing we have to focus much more on the knitting of investing which is looking at earnings, right, does a company either -- is the company profitable, does it have the path of profitability, we've seen the damage that it can do, especially within the tech sector when the answer is no

i think it really behooves us too look at valuations again, and specifically the value factor what price are we paying for that future profit ability and it means focusing on risk-reward. are we being paid to take risk >> it's been 15 years since that's been the case the fed has been the biggest player since the financial crisis. >> exactly and i think that's why it takes time to recondition investors in this new reality so it's no longer the reality where it's buy on any dip. it's no longer the reality where we can just focus on a handful of companies or styles or sectors as the opportunity it means it's really much more about alpha. it's much more about active management not just beta. and the other thing i really wanted to mention is the second portfolio resolution which is that you don't just have to take risk and really one of the main themes for us is that it's back to bonds again.

>> and that's been a long time coming too the idea that you are looking at these things, not just treasuries, corporate bonds, that's a place you would like to be again. >> we finally have real yields back to their average levels so you're getting paid for the yields, you're getting paid to wait this is without having to stretch into things like high yield and leverage loans you can just focus on core bonds and find income, recession protection, and find a good risk-reward. if yields rise from here, the ag would be down 1.5%, total return if yields fall 1 percentage point, then it would be up it's very favorable risk-reward. >> your third point is one that's particularly interesting, giving this week's imf announcement they think a third of the globe is going to be in a recession this year. you like international and

emerging markets. >> we would say the third resolution is, increase international again. and i think before we even get into the overweight international, it's reducing the underweight to international which we find in our clients' portfolios is 10 percentage points underweight we're talking about a different investing environment. it can mean that you're more cyclical sectors can work again. and you also have very favorable valuations there, 30% discount, double the normal. you have currencies trading at multidecade lows and you have extremely depressed sentiment and positioning. any less bad moves can fuel a powerful rebound. >> i want to get to your fourth point. that is looking for value when it comes to all of this tech wreckage that we're seeing. >> absolutely, and i think the main point to think about, if we look back at what happened in the 2000s, the companies that hung in there were the

profitable ones. the next step is focusing on which companies have a path to profitability and that's where the value is some will never rebound. it's about actually using active management to find the value within the growth sector. >> we will dig in deeper to some of these themes the next time we have you on. >> nice to see you. >> >> thamazon says it's going e cutting thousands of jobs from its workforce. jon fortt joins us to talk about the plan. still no speaker for the house after kevin mccarthy failed to secure enough votes for a second day in a row. we will hear from both sides of the aisle about trying to resolve the washington drama "squawk box" will be right back. [music playing] ♪ imagine something of your very own. ♪

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amazon's preparing for steeper than expected layoffs of more than 18,000 employees in the next few weeks the company announced that last night. the news comes hours after salesforce announced the 10,000 person cut should these layoffs matter to investors or does a tight labor market make them a niche event jon fortt is here to weigh in. >> happy new year, joe first of all, any job cut has a person, probably a family behind it in that case it matters.

from a big picture perspective, it's been a tech -- it's not a huge deal. for starters, we've heard about so many layoffs in tech over the past few months and it hasn't tanked the job market. cisco, doordash, intel, meta, salesforce, spohopify and i'm sr i missed a couple. according to a survey, four in five laid off tech workers were able to find a new job within three months the tech cuts alone aren't going to move the overall unemployment rate they make up a fraction of the overall u.s. workforce finally, tech is somewhat unique snap doubled its workforce to 6500 people from march 2020 to the end of last year

normal companies didn't hire that fast. that makes this a niche. >> but it has to mean something, that so many companies are trying to cut spending. >> joe, on the other hand, these job cuts are a flashing warning sign for investors especially in the first week of january. salesforce's core product helps company generate more sales. amazon is the dominant e-commerce retailer. they saw massive discounting to drive traffic. put that together with other signals we're getting like tesla's delivery miss, this is bad. yes, we've heard about lots of layoffs over the last six months, but, of course, those haven't had an impact yet because it's like a snowball rolling downhill but as fear grows and the economy worsens, there are fewer places to go don't misread the stat about tech workers finding jobs in three months most of the people laid off from

tech companies aren't engineers, they're recruiters, marketers, salespeople, project managers. here's how we'll know for sure if it's bad. if q-4 earnings reports show a lot of misses, as a result even more layoffs. >> we've heard so many times -- i don't know if tech is different, companies can cause a slowdown in the economy. they see -- they hear everybody talking about a recession. they hear the fed is going to keep raising rates so they start planning for a slowdown in 2023, so they start pairing back before it happens, and then it's self-fulfilling. in this case you're saying that, for example, salesforce had seen front and center sales slowing already. >> i think what might have happened, and this is just me, is the opposite in this case companies were trying to create a better environment that actually existed that's why they did all this hiring they wanted to keep the workers because they were hard to get in the first place and now as things are slowing down, we're

seeing them say, can't do it >> that's what gabby just said, her first thing in the portfolio is there's no more free money. a complete change from what we've seen the last 14 or 15 years. that means you have to justify every dollar -- >> they got too big, though. >> they did. >> and the pandemic didn't help -- or did help. >> but now you're going to have a hurt effect in the other direction. once other companies see amazon is cutting 18,000, how many are we cutting what are the margins going to look like then >> and watching what the street does every time there's a job cuts announcement. people are thinking that investors want to see. >> this is good for the fed. you're right, it's single-digit. it's not the overall workforce but at least if the labor force is so tight and employment is actually above maximum, supposedly, this is at least filling some of the jobs that other people need that that company did not need. >> maybe it brings that number

down maybe it affects inflation expectations, that sentiment where people don't think they ought to be spending even if you -- if you get laid off and get a new job, yeah, you got a new job. maybe you're not feeling as free to spend if there's a layoff at your company and you don't get laid off, maybe you're still not feeling as free to spend all of that. we'll see if it ripples. >> you don't want a lot -- >> not me. >> well -- i'm at 31 years >> maybe ihod take us to break before we say anything else thank you. when we come back, apple and tesla are facing major headwinds in china the company's u-turn on covid policy is partially to blame we'll break down the reopening of the country and what it means for business bmw looking to charge up sales of electrical vehicles phil lebeau has a preview on that >> bmw has said it has the

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>> announcer: now the answer to today's aflac trivia question. the first white chocolate bar was introduced by what company the answer, nestle >> white chocolate is not chocolate and it's disgusting. bmw wants to close the gap with tesla when it comes to ev sales and the ceo is outlining his strategy phil lebeau spoke to him about his vision and he joins us right now from las vegas hey, phil. >> you know that vision is not just about electric vehicles but also what they're calling digitalization of vehicles in the future it's not surprising that last night they unveiled what they're calling their i-visiond which has a lot of technology that they will be incorporating in

the future this is pie in the sky stuff that we're probably never going to see, like panels on a vehicle that change colors but some of it will be advanced in next generation, according to the ceo, you will see that in the not-too-distant future. >> especially the headup display technology we will take to the next level you've seen it today in the show some glimpses of what you will see in the market inside the next two to three years. this is very concrete. this is not science fiction. this is the real world, very soon >> a big push is the conversion to electric vehicles the company wants to have half of its vehicles worldwide. sales of the vehicle by 2030 being electric but you can see here in the u.s., they're still not in the game relative to tesla but they do expect that to be changing as they expand their portfolio, including bringing in

some more affordably priced evs. >> bmw offers electric cars in all segments and, of course, if we scale things up, there will be a tendency that things become cheaper. but electric mobility will never be cheap and that's the next task for this industry, to bring the prices down further. >> remember, bmw is a luxury automaker. so it will always have evs that are going to be on the higher end of the price range but no doubt, guys, when you take a look at bmw, it's about investing in electric vehicles they're pumping 1.7 billion into their plant in south carolina as they do conversion into building more electric vehicles and that's going to be a focus of a lot of the discussions that are taking place here at ces we're going to talk to some of the folks at mercedes-benz later on this morning and a number of the automakers who are out here. >> any big differences at ces

this year? any big themes >> well, separate -- it's become a transportation show in ways. you have the automakers here we're going to talk with the ceo of delta air lines this afternoon on closing bell. they have some news here as well so you're going to have that component continue to grow here at ces ju hard to say that it's different. one thing you do notice, everybody saying, wow, we're all back together post-covid remember when this was a big event? for two years, it was a muted event to say the least. >> all right good to hear phil, thanks we'll watch for you later in the day. >> you bet. >> still to come, the house is going to try to elect a speaker. in the meantime, nothing is getting done markets indicated higher maybe as a result. we'll talk to two members of the problem solvers caucus what this

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china's rocky reopening and spiking covid infection rates are major headwinds for companies like apple and tesla the world's second large economy accounts for about 17% of apple sales. for more on what's going on in china, let's bring in a visiting fellow at the hoover institution who has served as the director for china and as senior adviser on china to the secretary of commerce matt, what's your take there's been maybe some softening around the edges with some comments that we've heard recently from people who are stepping down. but this is a drastically changed relationship than it was four or five years ago >> thank you and good morning i think the rivalry between the united states and the prc is likely only to become more pronounced and more intense as time goes on, even if we see a

softening in some rhetoric, mostly around -- focus on domestic issues, but also on an effort by both sides to convince other powers around the world that they're the ones who are responsible and it's the other side's fault >> why do you think that is? >> well, i think that -- i think, you know, from the -- the arrangement that the united states and the prc sort of came into about three decades ago to integrate beijing into the global economy, the circumstances for that are beginning to break down. the idea that -- for the united states that the prc would converge with the united states in a market economy and international system which privileged democracies, that's just no longer the case.

and both sides increasingly see their national interests and national security concerns to be foremost in the relationship each side -- that is likely just going to continue as time goes on and that's going to have important ramifications, i think, for businesses that have spent, you know, the last three decades establishing themselves in the prc and hyper concentrating their manufacturing there. >> we mentioned tesla and apple at the top but you think of companies like a starbucks, a nike, that have built up so much of either their manufacturing or their business there. is it your expectation that this is just going to be a much less friendly place for business and those companies need to look to other markets? >> well, i think there's a bit of a difference between those who operate in china for the china market, and i think to a certain degree, time will tell

whether or not the chinese communist party allows them to continue to operate. i think there's a good reason to believe that they'll continue to operate there and be able to make profits i think the real challenges for those companies that hav manufacturing inside the prc to sell to the rest of the world. in that case, there are going to be pressures for them to diversify and find alternatives for their manufacturing and to ensure that their supply chains are not dependent upon the whims of beijing >> i think maybe the bigger issue is trying to walk a fine line if these are two nations where hostilities are ramping up, how do you walk a fine line and not irritate either one of those administrations or either one of those consumer bodies? >> well, i think it's also good to keep in mind that this is not just a u.s. prc dynamic. this is a japan prc dynamic and increasingly a european union

and prc dynamic. the rival and hostility that is rising is not just simply a u.s. dynamic. >> so two markets, china or everybody else >> i suspect that that is the outcome that we're going to see. and of course that is going to be a costly transition, but we've gone through costly transitions before it's going to be particularly difficult on incumbents who have made an awful lot of investments in the way in which the world worked for the last 30 years but new companies and new entrants will find opportunities. those who don't have those cost and is those who are able to make new investments in other places >> yeah. if i were looking at -- if i were looking at southeast asia, south asia, latin america, these are the places that are going to be the winners as this rivalry unfolds. >> matt, thank you for your time today. >> thank you coming up, we're heading

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♪ barclays naming starbucks its top pick for 2023. joining us now is analyst jeffrey bernstein. good to have you on. five reasons why it gets all the way to the top, valuation one of them >> that's not typically the top reason, per se because it is a high-growth company. it does demand a high valuation. but, you know, we use starbucks as a premier large cap we have been recommending it in the past, in fact, it is still our top pick, it was our top

pick this past year. it seems like there are more catalysts going into 2023 that could lead to outperformance. >> like what >> they have a dominant u.s. retail and consumer products business as we now come out of kind of work from home, work from school -- work from home, i go back to more normal behaviors. that's proven to be a tail wind for them that should continue the international side of things, china has been in full lockdown for awhile. that is the largest company operated by far. we don't believe the brand has been damaged you should see significant recovery coming out of china otherwise their digital platform is best in class and their digital membership continues to grow which allows for more one to one marketing and significant labor investments that have gotten a lot of publicity over the past year which should lead to more favorable compares all with a brand-new ceo that has been shadowing howard schultz for the

past few months. he takes the helm on april 1st. >> i ask about valuation it's not down that much. it was down a couple of years a lot more, down in the low 40s. it's been, what, above 120 but it's not -- as far as most stocks go, it's not that far from its highs. >> it has proven more resilient than most have expected. it's trending at 25 times next year's earnings. but if their new algorithm comes true which for 15 to 20% earnings growth in the near term, 25 multiple on -- if they can deliver over the next couple of quarters at the new raised guidance, which is the biggest push back we get but if it's achievable, the multiply is likely to expand it's going to be a lot about the new ceo, what his vision is, how it differs from howard schultz'

vision and we believe they have tremendous momentum. barring a recession, which is the biggest risk to a starbucks store, we believe it's well positioned to trade at the higher end of ranges >> your price target would be a solid double, not a home run, but certainly in this new world, 15, 16% is pretty good thanks good to have you on, jeff. >> thank you coming up, two members of the problem solvers caucus joining us to discuss the chaos in washington revolving around the house easpker vote "squawk box" coming right back

the house remains at a standstill after adjourning last night without a speaker. kevin mccarthy fell short of majority on the second day of voting to discuss what it could mean for the agenda, democratic congressman josh gottheimer and republican congresswoman nicole malliotakis. both members of the problem solvers caucus josh, i haven't seen you in awhile new jersey still -- >> happy new year. >> still the number one state in the entire country not everyone realizes that or admits that, i think jealousy has a lot to do with it.

>> i totally agree >> did you ever receive anything about maybe joining up with mccarthy on this have you been approached >> right now as you have the red nicole could talk more about this, we're focused about getting to the speaker on working with their colleagues and some of the more extreme members. i'm always open so discussion. many of us are but my number one goal is making sure that we can move forward here and i know i'm sure nicole feels the same way and i want to make sure we could govern in a bipartisan way and get things done i'm sure nicole has more on that but we're always open to conversation. >> haven't been approached it would have to be people approaching democrats, it might not be kevin mccarthy, i think

ro khanna mentioned a couple of names. you are not involved in what the other side is contemplating at this point you're eating popcorn and having a brewski? >> no, i'm not enjoying this i want the country to -- >> oh, come on. >> when you have a branch of government offline i think right now the republicans have made it clear they're trying to work this out on their side and get forward. i just want to make sure at the end we're able to get things done like we have in the last couple of years in a bipartisan way and we saw yesterday the president in kentucky with senator mcconnell on one of the things that we're able to get done together, on the infrastructure package so there is work to do on affordability and issues for the country. so i'm hoping with he could get past this and not go into yet another day of gridlock here. >> congresswoman malliotakis, i could imagine that seeing mitch

mcconnell and president biden together, that might even just embolden some of the 20 holdouts, do you think >> the reality was the infrastructure package was a good thing for your country and great for new york city. we're seeing a lot of investment into my district, whether is the staten island ferry or the sea wall and the transit system, our ferry system and our ports that are so needed to get this economy. we can't have third world infrastructure situation in this country and i thought it was an importantp legislation that is why i'm working with josh to get that across the finish line. we want to see more dcommon sene policies coming up we want to ramp up and lower food and gas prices for american families we can't do any of this if we don't have a speaker i think kevin mccarthy has been

open and honest and opened the suggestions of the entire conference we didn't like the way things were run under nancy pelosi. we want to know the impact of bills on inflation p we want to shake sure if we're spending money on a program that it is coming from somewhere, it is not just adding on to our $31 trillion debt and what we need to do is come together at this point because he has made those changes into the rules and there is 10% that are holding out are really hurting the entire institution that is trying to move forward here and govern, do what the american people elected us to do. >> were you at any of the meetings last night that were going on after congress had adjourned again with some of the 20 because we're hearing that they are still listening, i guess, and still talking. are you involved with those or

do you -- >> there was a handful of representatives from each side that were in the meetings last night. i'm going to be joining a meeting shortly to see what has evolve and see if it is something that the other 200 can support. but the reality is they about of to have jim jordan, and he support leader mccarthy and they respect the opinion of president trump, president donald trump, supporting mccarthy as well. at this point these are serving as obstructionists, to get on particular committees and get assurances of certain pieces of legislation and that is not how a representative democracy works. we all have a say in what bills will be passed or who -- no one is going to tell me that i need to vote for a particular bill. i haven't done that yet and i don't intend to do that ever

so they should be putting the petty personal interests aside and do what is best for the conference and the country considering that leader mccarthy has done all of the things that they wanted in terms of changing the terms of the house so things flow better and works better for the people and for those elected to represent them, not the way nancy pelosi did. >> josh, you keep voting for hakeem jeffries. you want a speaker and the house to do its business, blah blah blah, all of that stuff. and you and ten other guys and gals could -- >> and nicole could vote for hakeem jeffries. >> that is not the same thing. because the republicans control the house now, josh. if you really were concerned with -- >> no, they don't. that is the point. >> well they do. they have a majority they can't control themselves.

they could control the house. >> as i said earlier, we're open to any conversation and i continue to have conversations that is our job. i i want to get things done and make sure we could govern after this is all over and i think nicole and i agree on that. and it is bowing to extremists and letting them control the institution and unable to get things done and make sure that we stand up to china and address ukraine and affordability in the united states. as we proved in the last congress, standing by our veterans, dealt with prescription drug prices and the infrastructure bill and standing by law enforcement we got a lot done. i want to make sure that whatever comes out of this, you don't have a few people controlling the institution from the extreme right. we need to be able to govern. >> and i think the entirety of your group is you don't want anybody on the extreme right or the extreme left. >> so vote for mccarthy then.

>> is there a point where mccarthy loses your vote, because it looks like he's offered to cave to every demand that the group of 20 extremists have come up with, and they want committee placements and they want to take him out with one vote or take a vote with one person saying i want to be able to remove the leadership is there a point where he gives away so much that you won't vote for him? >> i don't see that happening. look, kevin has earned this. he has crisscrossed across the country recruiting candidates, supporting candidates. if it were not for kevin mccarthy we would not be in the majority he's worked to bring us to the place where we are he is our leader and we should be working altogether moving forward which is real frustrating about this entire thing is we have a conference agreed on the first pieces of legislation that we wanted to see passed, right. 87,000 irs agents need to be repealed, we want to pass our

security border, my bill to hold rogue prosecutors like manhattan d.a. held accountable and that can't pass either and these were all things that were on the agenda for this week and unfortunately we can't get any of to done we want to stop the president from raiding strategic pell roleum reserves so we can't do anything because this 10% is hijacking us and this is really a -- look at this this way, in what company do 10% of the individuals, whether it is a board of directors or the shareholders dictate what is happening in that country. >> all right congress humans -- i think that makes me feel more in tune with where we are congresswoman, thank you we'll have you back. problem solvers. so we do have an exclusive

interview with esther george stick around "squawk box" will be right back.

good morning, we're get ug up forea big hour ahead. we'll get both the adp empl employment data. kevin mccarthy has now lost six votes in his quest to be speaker of the house maybe there could be progress

today. we'll bring you the latest details. and new minutes from the fed show officials expect higher interest rates to stick around for some time. but does the market believe it will it finally believe it we'll hear from kansas city fed president esther george as the final hour of "squawk box" begins right now good morning welcome back to "squawk box" right here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen, andrew is off today. we went from up slightly to down slightly on the dow futures which are down about 12 points s&p futures up by about 1 and the nasdaq up by about 17 points if you've been watching what has

been happening with the treasury yields, we've seen continued pressure, after the fed minutes suggesting that the fed would still keep rates higher for longer markets not really buying it the 10 year at 6.89% wti is coming off the worst day in more than three months. yesterday brent crude has the worst day in close to four months and this morning up by 2% you have wti back at $74.38. and layoffs at amazon will be larger than the company said last year. the ceo andy jassy saying in a note to staff that 18,000 jobs will be cut. reports last year put that number at closer to 10,000 jobs. jassy said that amazon typically lets workers know about layoffs before going public to the news but someone leaked the layoffs and amazon said they will impact human resources, the newer cuts and the older were more of the

moon shot things, they will begin on january 18th. and tesla's china delivery hitting the lowest level in five months, just shy of 56,000 cars according to the china car association, the number represents a 21% drop year-over-year they were forced to cut prices among weakening demand and rising inventories. and chips made in china by 2024 according to nikkei asia, this is what we were just talking about in last hour, dell wants the suppliers to reduce the amount of other china made components as well. >> let's get back to the broader markets and get to our own mike santoli joins us live from the new york stock exchange. less than 90 minutes before the opening bell happy new year, mike. >> happy new year, joe and thank you very much. and a hesitant start to the day and the year by the broad

market the s&p 500 didn't make too much use of the typical late december strength although the market has been kind of sticky with not falling below the 3800 level and the equal weights version of the s&p is up a% percent and a half this week because of the big weakness in the large market cap stocks like tesla and apple to a degree. so it is a similar story also a lot of reversion doing on -- every one of them have outperformed except for tesla. a lot of leaders spilling back you have to let that settle out at the beginning of the year take a look at the ten-year treasury yield becky mentioned kind of soft did not get back up to 4%. there is a uptrend line that is still in place that is a rough version of it. but you see that it is still in tact at it point going higher. but people will look at this and

say maybe we're sort of rolling over here and the markets estimation inflation is going to be coming down over next year or more it could be the hard way through an economic contraction, could be the easy way just through some kind of asofter landing but that is the message at the long end of the treasury curve. take a look at natural gas prices gasoline is hitting negative on a year-over-year basis as did crude oil, natural gas this is a long-term look at natural gas because it is volatile in the short-term and look at the huge spike this goes back 12 years and we're right in the range of where it is mostly sat for a while. of course the economy is much bigger and you have the super spike that has come in this is relief on the inflation front. it has somewhat eased at this point. it is good flnews but outlook fr global growth might be easying back as well, joe. >> thanks, mike.

stay tuned esther george is coming up that could shed some light on all of this. and coming up, breaking jobs data, the december adp employment is on the way all of that when "squawk box" returns. ♪♪ i don't accept this. i can't do this anymore. impossible odds, save the world. i'm done. what do you have for me? a new way to transform our agency. strategy to execution. oh, looks my laces have come undone. a business card? yes, for ey. tech expertise? $2.5 billion invested. impressive. okay, you've convinced me, i'm back. just gonna... get this...

the house is set to reconvene at midday to try too choose a speaker again california republican kevin mccarthy has failed so far to do that in the last six times they v voted. elon moy has the latest on this. >> so far republicans are still deadlocked over who should be speaker of the house lawmakers will gather again in just about four hours after narrowly voting to adjourn last night to give the negotiations

more time. kevin mccarthy fell short of the votes he needs six times over two days told reporters that another round of voting would not have been productive. >> i think it is probably best that people work through some more i think -- i don't think the vote tonight does any difference but a vote in the future will. >> now there was some movement last night they struck a deal with conservative club for growth to not spend money in open republican primaries in safe gop districts, the group committed to support his bid for speaker and mccarthy made some key concessions on house rules matt gaetz, one of the biggest critics said mccarthy allowed to a single member to force a vote to oust him from the job and meanwhile democrats have tried to steer clear of all of this chaos, no public indication that their willing to help republicans. they say this is a crisis of

congress that republicans should own. becky. >> elon, even after all of the latest concessions which seem extreme. if he can't get the 20 votes, is it game over this is personal even though they say it is not personal, they're not going to ever vote for kevin mccarthy >> this is the problem, becky. i'm not sure what the path is for mccarthy at this point he doesn't need all 20 to vote for him and someone like matt gaetz will never vote for him but he could only lose four republican lawmakers so could he get 16. >> that remains to be seen his strategy is try to leverage different divisions within that group of hardline conservatives to see if he could peel off at least a few people but, you know, a handful is not going to do it he needs more than a dozen in order to secure the speakership and really it is just not clear who the alternative might be at this point and that is why republicans seem stuck in that

groundhog day loop of voting with no resolution. >> we've watched the markets, elon, and i said i wonder if the market will crack with each one of those votes and yesterday again and i go, well, the market is just going to be -- and then i thought about it it is like, no no, that is not going to make the market crack that may be not having a functioning government might actually be better except for the debt limit. >> there are things that the government needs we need to have a functioning government there are things that congress has to do. >> i know. tongue and cheek work with me >> yeah. >> it is tongue and cheek. work with me very good. thank you. and we are approaching december adp employment report, the futures are indicated maybe this is it. maybe this is the beginning. >> but i will say that adp over the last five months has verged

away from the government numbers. they used to be more neck-and-neck, adp numbers have been weaker than the government numbers. >> what do we want >> i don't know. even in the fed minutes released yesterday they talked about how some of the strength in the market was cause for concern this is what we've been speculated but it was laid out in the notes that jay powell and company get worried when the markets start to trade up and they don't want to do things that market reads into an idea that their pivoting and that is a huge issue of concern. >> all right treasuries, they could be more important overall and we're going to obviously be speaking to kansas city outgoing president esther george, that is coming up soon but here is where we are ahead of that interview. we're at 382 on the 30 year. 10 year, 3.7 and the two year 4.4.

>> could you do the inversion. it is a significant spread still. it was 60 two days ago and it is more. >> but i could quickly do the 70 and the 40. >> you could subtract. the dollar has been weaker this year if you've been following that, too. it is been significantly weaker over the last several days as other central banks try to catch up with ours. >> let's get the adp report numbers. >> good morning, 235,000 abt saying the job growth was 235,000. the job market once again showing unexpected strength. if you look at it, the estimate on the street was 153,000. they are using a new method of calculating it so the street hasn't figured out how to do that what we'll see in this number is a fragmented job market. goods up 22,000 and services up

213,000 and the estimate nor nonpharm payrolls is 200,000 and that is for friday and looking at it by business size, small business doing up 195,000. and medium size businesses 50 to 500eems up 191 but large employees were down 151,000 and that is reflecting some of the headlines from companies like amazon by industry, leisure and hospitality that is a sector whose job levels remain below the pre-pandemic level up 123,000 professional business services also doing well is a long with another sector that has been a source of strength for the job market and education and health services up 42,000 manufacturing down along with trade transporting utilities and you don't see it there by the financial sector also down and then another important part of new adp calculation are wage gains. up 7.3% for those remaining in

their job. that is down from the prior month, but still a very high level. if you're changing jobs, though, according to adp anyway, you could look for 15% year on year annual growth for job changers we're going to talk about the issue of the resilience of the labor market coming up in the next 15 minutes. we're going to talk to outgoing kansas city fed president esther george joe? >> that is significant sorry to jump in here. if you change the job, you could get double the increase if you stay put >> that is what adp is staying i have not done a deep dive into the data but that is what they're saying now and also showing 7% wage gains for those staying in jobs which is higher than some of the national or official government data that we see. i'm sure this is good data for the universe of adp clients.

it is not what we're seeing nationally but i think it still tells you that this job market remains tight. and you don't focus on a single number look at what we had yesterday, ism component there was also strong we've had other data, the jolts data show job openings remaining 10.4 million and the pana plea suggests that. >> and paychex ceo talked about how small business owners are feeling comfortable in terms of keeping and get new employees. it is not as bad as it has been up to this point jan said when he talks to the retailers, they are not having as much trouble. jan jan will be on with us tomorrow to talk about it

because that is so important to the fed. >> and the other thing, becky, as you know, you and i have been talking about this for i think decades now, is you have these anecdotes like the big story of amazon letting go 18,000 employees and that is a big headline grabber but it didn't tell you the evidence and the data that may be out there how quickly do those folks get new jobs there is a story in the journal a week or so ago that said the tech employees losing work are finding jobs very quickly. >> tech employees are one thing, but a lot of the job losses are until the e-commerce division. so you could talk about some of the tech jobs in some of these positions too. >> the thing that makes understanding this economy so difficult is i think we're still in the middle of this post pandemic churn here. where people are playing musical chairs we had too many folks over here and we have to get them over there. the service sector of leisure and hospitality are below where they were before the pandemic

and maybe amazon and others over-hired and they have to let some folks go. >> steve, thank you. looking forward to see youi in few minutes. a big interview coming up. >> in a few minutes. bed bath & beyond has substantial doubt about ability to go as a growing concern it will consider strategic alternatives including restructuring or seeking additional equity capital. the market capitalization is now smaller than $200 million as you have seen those shares fall. right now they're down about 17% on this news that is a drop of 43 cents below $2 when we come back, two critical interviews first with the ceo of chesapeake energy and then with kansas city fed president esther george. don't go anywhere. "squawk box" will be right back.

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the biggest names in energy are gathering at the goldman sachs energy and clean tech conference in south florida. brian sullivan joins us now with a special guest in south florida. gee, bri, how are you? >> good to see you made it here a lot of people still stuck at the airport is getting there is half the battle and nick dellos oso, thank you for joining us. >> happy new year.

>> i don't have some great insight question at the beginning other than what in the heck is happening with the price of natural gas it is absolutely imploding >> so natural gas interestingly has come down quite a bit as we go into 2023 but we're still at a level that is really profitable for the industry when we talk about bad prices we used to talk about prices below $2, so $4 is a great price for our company. and given as we enter 2022 we had hedges from past prices and realize price for 2023 will be about the same in 2022 so we see a huge future for natural zbas as the supply is tremendous for the long-term and we're excited about where the price is today. >> the median stock price for chesapeake is about $144 and you're at about $89, $90 a share and so you're hugely below where wall street thinks you should be talk to your investors right

now. the $4 difference, how much is pure net income and pure profit versus higher other costs. >> quite a bit but we've never had $8 nat gas price embedded in our stock price. if you look at the price that is implied in our stock price over the last year, it is always been in the 3's at the best the low 3s so we still think there is a tremendous amount of upside. >> and we just had a chart dallas fed just had a survey of folks like you, asked where you see natural gas prices at end of this year. 35% saw it between 5 and $5.99 how would you have answered that, nick >> we think that in 2023 natural gas prices will remain around where they are now we don't see an increase in gas prices until you have the structural demand increase of

l&goff coming online, 2024, 2025 and into the second half of the decade and then we think there is a huge amount of grow for price as we have a big increase in demand. >> and this is such a critical point in the industry. there is no new natural gas export capacity coming online this year and maybe not until later in '24 >> that is right. >> how important is that to the price of natural gas >> well it is very important we do expect prices to stay around where they are now. and in the short-term of course prices could always drop a bit or go up a bit based on weather or anything else but what we know is that with the very best assets in the industry and the best balance sheet of the natural gas producers, we're better positioned to handle the volatility of gas prices that you've seen over the last six months and the last year. >> and the administration is asking for more production and oil and natural gas and the industry has been trying

there are still some labor issues and inflation issues. is there a price of nat gas, maybe it is $3.90, at which you pull back your capital spending, you take away the drill bit as they say. >> of course there is a price. >> is it $3.90 >> at $3.90 we're still making attractive profits and we have the best rocks and returns and best runway in assets. so we like the price where it is today. we're running a relatively modest program our production is going to be essentially flat over the next couple of years and that is designed intentionally to be flat -- >> and why are they imported from trinidad when you have a giant gas field 200 miles away. >> we don't have the infrastructure to deliver the gas there. this winter new england will pay about three times the national average to heat homes and with more infrastructure we could levelize that to the average

very, very quickly. >> nick dell 'oso, thank you very much. joe, they have all of this gas about 200 miles away, but new england would rather ship it in from trinidad as l&g or run oil and refuge to heat their homes. >> thanks to rube goldberg that is perfect. it is one of those things that have all of these -- why do it simply, brian, when you could do it that way. thanks, brian. up next, kansas city fed president esther george joins us "squawk box" will have a live interview. we're coming right back. differ? aren't we all just looking for the hottest stocks? (fisher investments) nope. we use diversified strategies to position our clients' portfolios for their long-term goals. (other money manager) but you still sell investments that generate high commissions for you, right? (fisher investments) no, we don't sell commission products. we're a fiduciary, obligated to act in our client's best interest. (other money manager) so when do you make more money,

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welcome back to "squawk box," rick santoli here live on the floor at -- well not floor, but at hq of cme with breaking news trade balance for the month of november, minus $61.5 billion. this is noteworthy because that is the smallest trade deficit that we've had since september of 2020. yes, september of 2020 initial claims 204,000 that is lower than expected. which i would think is a good thing if you're an economist but not so much if you're a fed follower and 204,000 happens to be the lightest level going back to september the third week of september of last queer.

and finally continuing claims expected to remainover 1.7 million, no, they're back up 1,694,000. so that reverses the trend of over 1.7 million which lasted exactly one week we see interest rates are the highs of the session and a ten-year hovering just under 3.25 and leading the charge which makes sense considering the hawkish comments by the fed yesterday with regard to the minutes. but i will bring up one point very fascinating if you look at the june fed fund futures of this year, it is now trading at the lowest level, the lowest level since november 23rd we have a chart there. why is that important? whether fed fund future prices go do you know and the possibility and potential probability of more aggressive tightening are going to higher levels increases

steve liesman i'm sure will play on that. but finally it seems as though the fed has some of the market's attention and we could see that showing up on the interest rate complex this morning joe, back to you. >> thanks, rick. now as promised, to a very special guest. she joined steve liesman live in kansas city, missouri. hey steve. >> joe, thank you very much. i am here with esther george, the kansas city fed president. leaving after 40 years at the kansas city fed. >> that is right steve. welcome. >> and i think we've been talking for at least a decade of that so at least a quarter of it. i want your viewers to see what rick santoli has talking about if you have that fed outlook chart, when the prices fall, the yield prizes and we're back over 5% for the peak funds rate esther, you've been watching markets versus the fed for many years. how much of a deferential do you

see and how much is there a concern that you have that market is pricing in the cuts after hitting the peak rate as you are not pricing that in. >> right so i think this is a very different time if you think about where we've been over the last two decades, we hadn't had high inflation and low rates, we're moving into a very different time and i think for myself and for my colleagues we understand that higher inflation will require our action so we have been moving our forecast up to higher levels you saw that in the most recent dot plot that came out in december and i think holding that until we get confidence that inflation is actually coming down is really the message we're trying to put out there. >> i don't have to ask you this question because i got to 17 out of 19 chances of being right you're over 5% when it comes to your outlook for the funds for -- >> i have raised my forecast. >> could you tell us where you are. i can't remember if you're one of the folks telling us that.

>> i think i'll be over 5%and see staying there for sometime again, until we get the signals that inflation is really convincingly starting to fall back toward our 2% goal. >> give us an idea of what that could look like to you what would you need to see in order to be comfortable that maybe you could bring things back down from the prestrictive levels >> well we know we've having an effect on demand and where we really see the persistence if that inflation is in the non-housing part of the services side of the economy so, i think that is going to be where i'll be watching for the real clues to see whether we are getting traction with our policy and in that area and then, again, depending on the broader dynamics, as you see inflation coming down, we'll be the signal it is hard to know what that timing is going to be. so in my own forecast i hold that rate high until we see? action and then would you be willing to move it. >> is that well into 2024?

>> it is for me. >> wow when you think about the idea of keeping rates that high for that long, you've said in the past you don't see it possible to avoid a recession here >> well i'm not forecasting a recession. but i'm quite realistic that when you see below trend growth and the idea that our street is going to work on demand, bringing that down, it doesn't leave a lot of margin there. so any shot could come, any risk to the outlook could send the economy in that direction. not my forecast, but i do understand that bringing demand down creates that sort of possibility. >> so it is important for me to ask you specific about what you just said, you don't think the shock is currently in place that would create the recession but you think what happened right now is the economy is vulnerable to another shock that could create a recession. >> i think the economy is vulnerable when you're in a

rising rate environment. and we see a global outlook that poses certain risk to the u.s. as we look at that so, i think, again, i understand and a rising rate environment where people are very attuned to demand coming down but we continue to see a tight labor market we continue to see persistence around inflation that i think will require our attention for the while. >> there are those fed observers and on wall street who say the fed is not paying attention to very strong signals that inflation is declining they look at the three-month annualized rate and looking at shelter and rents and the decline in money supply. thousand do you respond to those three that say that the fed is looking at past indicators and not looking at either coincidence or leading indicators when it comes to inflation. >> i think we're looking carefully at that. and i think the last couple of months inflation numbers are

beginning to schhow encouraging signs. >> but it did not change. >> because i'm looking at other things as well there is a lot of money sitting on household balance sheets right now. to the extent they hang on to that money, it might make it easier for inflation to continue to come down and see that rotation if that buffer of money begins to be spent out, then we'll have a harder time i think in terms of bringing inflation back to our target over time >> you were, i believe, and i could double check this, the lone descenter and you had it for a very specif reason not because you were dovish, but concerned about protecting the balance sheet reduction process. how is that going? are you satisfied that there is enough balance sheet reduction actually happening and it is at the right level of where it needs to be. >> so that process has begun, bringing the balance sheet down. and i think it is very important

that committee follow through on its plans to significantly reduce the balance sheet this is only the second time that we've done that with quantitative tightening if you will we didn't get very far last time because we moved to an ample reserved regime and now we've doubled the size of the balance sheet. so it brings more challenges this time but i think it is important that we bring that down and take that duration that we brought on to our balance sheet and put it back into the market where i think it could be best priced. >> sometimes i'm afraid you're too kind you really didn't like this idea of increasing the size of the balance sheet when it began. that is was not something that you were in favor of it. and asking about your ten-year, do you think it was a mistake for the fed to get into the business of raising and lowering the balance sheet in response to economic conditions? >> yeah, i did have concerns about these balance sheet

policies te were largely untested these were new instruments, clearly when interest rates moved to zero it created this issue of was it enough and was there other ways to provide it so it was an experiment of sorts. i think we still have a lot to learn about the consequences of the balance sheet policies and i think in this episode, we have now done considerably more we have a much larger balance sheet. and i think the research needs to continue on what does it mean because what you said in place is really substituting the central bank and its role in how duration is priced in the market it complicated the removal of an accommodation for that policy and that was understood early on. >> do you think the fed did too much during the pandemic, of balance sheet -- >> i don't think you could have known at the time. as with many things, those become counter factuals. i think we'll see whether too much as we see if that bngs

balance sheet is able to come down my own team is looking at this issue. they've put out some research, looking at how much accommodation does the balance sheet provide, what challenges will come with that and i think that is worth paying attention to in the years ahead. >> but you could sort of not counter factually, but factually say in that whatever happened over the course of the pandemic has led to double-digit inflation. that it was factually too much, wouldn't you say that? >> well, we saw coming stimulus from the fiscal side, some $6 trillion. you had a federal reserve. >> but you didn't react to that. >> we reacted to a pandemic shock that i think was unprecedented. >> shouldn't you have reacted once the fiscal side came in i get that the last time this happened there was no fiscal and this time it happened. should the afed have adjusted, is that something that you would tell your successor, next time this happens, god willing that it does. if the fiscal side comes in, the

fed needs to back off. >> i think that is a learning from this of how much that was and i think also remember we had an experience over a long period of time, the last time we did quantitative easing and began to remove that was a very different time markets were a little more skittish about what we were doing. it took a long time to get to a peak funds rate of 2.5%. and so that playbook clearly didn't apply this time and inflation absolutely was the reason >> two more questions, i just want totell them in the contro room are you concerned given the decline of the balance sheet and what is planned for this year about financial stability? >> i think you always have to be concerned about financial stability. that doesn't mean i see something on the verge of blowing up but i think we know from history, those things don't manifest themselves until they do and so you're constantly looking at what are the conditions it is why i think you have to think about what yield could result from having this duration on the feds balance sheet.

>> and then just the last thing. president george, some people leave a letter for their successors could you tell me what would be in that letter, that you have learned in 40 years with the fed. >> it has been a tremendous privilege to serve this region to carry out the fed's work. and would you tell my successor, stay connected to this region and make sure that you represent the economic interest here when you go back to the fomc meetings and do everything that you can to both listen on the ground to what is happened and attach that to data that you're making decisions on. >> congratulations on a long career and a successful career and you'll be leaving the end of this month your successor, we're waiting for the name. >> we're waiting >> okay. thanks very much becky, back to you in -- at the nasdaq. >> steve, thank you. that was a lot to listen to. we've been watching the markets during all of this and --

>> and they're down, steve and that interview the markets are -- >> no, she was making it very clear that she is looking at rays getting to above 5% and looking at them staying there for a relatively long period of time for a long time i think is what she said we watched the dow futures tick steadily lower during the course of time. right now the dow futures are down by 142 points and they were do you know by as much as 70 points while that interview was going on and talking about the tight inflation and those are things that are pushing markets the ten-year is on a steeper move, i should say, at 7.45% right now. and a programming note, steve is going to be fedding with rafael bostick, that is tomorrow at 10:00 a.m. eastern time based on what we've just seen with the markets reaction this is another interview you do

not want to miss. >> once in a hundred year chaos in the house of representatives was good for up 150 yesterday. >> it tells you the fed -- >> one retiring fed head >> a fed official who speaks for the majority i think it is something like -- >> that is true. >> but it is what is going on there. >> the point we're making it true, the fed is more important than what is happening which is -- >> when we come back, we'll check in with jim cramer at the new york stock exchange and talk about job cuts and technology as we head to a break here is what jim had to say about amazon last night shortly before we got word of those larger layoffs at the e-commerce giant. >> do you think that amazon needs as many workers, waiting for boxes. waiting on amazon deliveries retail amazon is undersold, the web service business is slowing

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let's get to the new york stock exchange and check in with jim cramer hey, jim, props. i was watching last night, whe you made that call just saying, look, it probably doesn't make sense for amazon to have as many people heading into this we got the news right after that you're divining what is it happening on the street right now. what needs to be happening with

some of the big tech names. >> yeah. i mean, look, amazon has web services under assault had a lot of advertising business, that was another thing that we were hoping for, for amazon i think don't that is strong any more but they hired a huge number of people last year not unlike alphabet, they just hired a lot of people. firing 18,000 people is frankly is nothing they have a bigger group of people than that are in the armed forces some people say they have as many as 1.5 million. they added a lot of people last year they're not done one of the reasons the stock is not up more is they dent fire enough people. well plus the esther george interview, which was really very, very good. it is just a lot of -- a lot not to like here. >> adp showed a stronger number than expected, about half an hour ago and that maybe suggests that the fed is not going to be able to let up any time soon. >> no, it can't.

>> but that strong jobs market, that is something that esther george pointed to as well. adp was showing if you leave your job, you'll get an increase in pay for 15% versus if you stay. >> yes, i'm sorry to interrupt the job number was way too econt you're getting some layoffs in tech land, salesforce, amazon, but you're not getting large ones large enough to be able to make a difference unless you're meta, which really did take the wood. it is worrisome, that's worrisome. i think the debt ceiling is worrisome depending on who the republicans pick there's just not a lot of good things the only thing the bulls have for it is every piece of research is negative when you have all of that negativity, things tend to settle down. >> we had gabriela santos on from jpmorgan earlier this morning and she made this

interesting point, in terms of rejiggering your portfolio for the new year, to realize free cash is gone and it's not coming back that's kind of the move you're seeing, even with the layoffs with the big tech names, the big cap stocks there we saw valuations that were justified by free money. when the free money goes away, it's a different game. >> too high multiple, that's the theme. if it has a high multiple, look out. i think that the drugs will shine. i don't even know if all health care will shine. i think select industrials will shine, but that's because of infrastructure oil will shine because there's going to be less oil pumped. listening to chesapeake, a good interview by brian they say they have a lot but not enough pipe to take it to the market i don't want to be too negative because everybody is negative. that's a big mistake, but wow, interest rates are going the wrong way. >> i like what you said yesterday on "squawk on the street."

you were talking about oil prices, where everybody was positive, like $100 a barrel, now you get back below $75 and then you have people who -- who was the analyst you were talking about? >> that's carly garner there was an extraordinary number, large number at $110, $120, and we got the lowest number of people who are long, right here, and to me, that means look out that one can pop probably near the lower end of that, but it doesn't really help the market, obviously, but i do think that's the place to go it's just -- look, i think we came in too hot in terms of the number of analysts who had high price targets. and they're all taking them all down, and that's what we're feeling, versus amazon, meta, salesforce layoffs salesforce layoffs were very big versus the number of people there, but amazon no >> jim, thank you.

>> we'll see you in a few minutes. "squawk box" will be right back. 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. ibm. let's create

futures moving lower and

treasury yields higher over the past 25 minutes in the wake of jobless claims data. steve liesman's interview with kansas city fed president esther george let's bring in sarat sethi, also a cnbc contributor nice to be a bottoms up guy, as we always say. what do you like, and regardless of the macro backdrop, what are you buying >> what i'm looking for is earnings resilience. companies that can provide earnings given what's going on here with every day it's like a seesaw, so we like health care, we like a lot of the pharmaceutical companies i like consumer staples even though some of them are rich, but you know what earnings you're going to get. commodity prices are coming down, and the consumer spending, so you have companies in there like hallion, nestle, things

that people will buy even when the environment is slowing down. so bottoms up, there are good opportunities out there, but macro level, you know, the market can pull everything down, and to jim cramer's point, there's a lot of negativity out there. as a glass half full guy, i like that at times because nobody is looking at anything positive it's all about how low are we going to get the next two quarters >> keep saying once every 100 years. we're saying it more and more. are things just -- i don't understand what's 2023 going to look like when it's all said and done? could we have sort of a year that's not quite as tumultuous overall, or people say, it can't be as bad as last year it could be as bad it could be worse, i guess, but we have a pandemic, the house has never been gridlocked like this in terms of a speaker you know, every flooding or cold snap or warm snap is 100 years since the last one

what do you make of all that do we have a normal year or are you scared >> i think we could have a normal year, joe a lot of this is built in. if you really step back and say, what is causing all this, it's caused too much demand i would rather have too much demand causing this than not enough demand. at some point, and i know the fed, they're going to stick to what they're saying, but at some point, you're starting to see companies lay off. you're also one of the things people aren't really talking about is in the past companies weren't laying off people because they were afrar of hiring people. that's starting to change. i think we have enough levers that if things get really bad and ugly, you can say, hey, we can slow down the destruction of demand and i think you come out of this, balance sheets are really strong in the corporate world. they have refinanced at low rates. the consumer, even if they stop spending at the rate they're doing, they still have a strong balance sheet. housing values are strong compared to where they were even a decade ago, and look, right

now, we don't know if this is long, but you don't see that in the market ten years ago, the great financial crisis, that was one for 100 years. all this right now, we have to go through it, and yes, earnings come down, but i think we get through it because we have positive tailwinds you can't just buythe market and say i have to be in these stocks because interest rates are not going to come down like they were back to 0 or 1%, and you have to be selective and pick your spots. >> all right maybe once in 100, maybe one of us will some day shoot our age at golf. but then i worry about the back nine you know what i'm saying >> probably the first six holes. but yes, one of these days >> all right it's good to have you on he made some good points domestically, we have a lot going on enough positive things, not

including the fed maybe and inflation, but then with china, how are we going to handle that? it's a lot >> issues that haven't gone away >> if we really thought about it all the time, we would sleep less than we do. make sure to join us tomorrow. "squawk on the street. it's coming up a year ago during the tail end of the pandemic, amazon had 1.1 million employees in the u.s. that's about as many as in the armed forces how many of these people does it need now the same amount? do you think amazon needs as many workers waiting for boxes, waiting on our amazon deliveries it's not just retail amazon that's under assault, it's web service business also slowing, so again, if there are too many people, they need to let some people go. even if thei