we get you ready for key inflation data and earnings season 15 times was the charm congress member kevin mccarthy winning the speaker gavel. we'll tell you what he had to give up to win over the critics. and jack ma ceding control of ant financial and popping up on social media in a rare public appearance it's monday, january 9th, 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 along with joe kernen and andrew ross sorkin. as joe mentioned, we had a

really strong week last week the best week since november that is thanks to the best day since november 30th on friday. you have the average up by 2% or better across the board. nasdaq up 2.5% on friday after that jobs picture we got you see the u.s. equities continuing to push ahead dow futures up triple digits 108 right now. s&p up 15. nasdaq up by almost 40 points. joe, you were saying that this could be a new turn. >> labor soft landing. >> right >> potentially that's what we saw for one month. mike wilson from morgan stanley is saying this is the time he would sell he is worried the equities picture is not focused in on the idea you could be dealing with lousy earnings season and hasn't fully priced in recession. this is a turning point where people take both sides of the trade. >> great question of our time.

whether we need a real flush and people still holding on to that which is testing the lows or my preferred view is the length of time we have been churning around which has done enough to turn everyone bearish. robinhood and people watching with so much negativity. i think we have already done it. >> what about mr. powell >> he is looking at wages. >> i come out more on the morgan stanley camp in you can't fight the fed. he is not finished >> 10% they are telling us what they are going to do. i think e harnings have come don also i don't know i'm hopeful. i'm hopeful. i'm back on the first week of january, so goes january as january goes, so goes the markets.

>> that did not happen last year what i will say, next week will have a really good idea. we will be in davos. whatever they say there, do the opposite. >> what is it? nfc or afc >> the nfl >> if were you one of the old ones, you counted. you wanted the nfc to do well? >> i don't know. it has been so long since i relied on that >> i think the eagles are good >> jets. >> dallas. dallas stunk to high heaven green bay? hard to watch. kansas city. bengals. >> kansas city >> jim nantz would say the bengals. >> let's look at treasury yields after the jobs numbers we got.

3.6% on the 10-year treasury up slightly. in the meantime, the drama in d.c. coming to an early end on saturday morning. early end. a long end. >> sunday morning. >> yes republican leader kevin mccarthy winning the election for house speaker on the 15th ballot after six republican holdouts opted to vote quote present drama after the 14th vote failed mccarthy walked over to matt gaetz and mccarthy ally mike rogers shouting at gaetz before being restrained by another congress member. it turned iingturned into somete here is what mccarthy said after being elected house speaker. >> now the hard work begins. what we do here today, next

week, next month, next year, will set the tone for everything that follows tonight, i want to talk directly to the american people as speaker of the house, my ultimate responsibility is not to my party, my conference or even our congress. my responsibility, our responsibility is to our country. >> the question now is what tone has been set which have ylan mui here with the rules and what mccarthy agreed to and what it means for legislation going forward. ylan >> reporter: good morning, andrew the first order of business is adopt the rules to govern the 118th congress that has to happen before any bills can happen

they promise sweeping changes. proposals are prevent bills increasing mandatory government spending from getting a vote and force the cbo on inflation and scoring of legislation the rules would eliminate a mechanism to automatically increase the debt limit when the budget resolution is passed and require three-fifths of lawmakers to hike taxes instead of simple majority here is james comer on "meet the press" yesterday >> you look at the republicans we wanted to balance the budget which means we have to make spending cuts in every area of state government except social security and medicare. that is a tougher job. that is tough for republicans to get to 18. i believe we will. >> reporter: conservatives say they want kmcommitments to tie e debt limit and cap the spending

at last year's levels. the hardliners have the power to hold gop leadership accountable. back to you. >> what do you think ylan, go back to the idea. joe mentioned the word parliament before. you were talking about how people tried to hit each other the other element of parliament is the snap votes which can basically upend the whole place in a hot minute. how likely is that do you think at this point in terms of putting aside the legislation you are talking about from the governance perspective >> reporter: the phrase they use is it is difficult to govern with the gunpoipointed at your head that is allowing any single member to force a vote to oust a speaker. that hasn't been done at least in modern history.

it is unclear how that would go. one question is what does it mean for democrats would democrats vote to oust mccarthy joining republicans who are unhappy and force him out of position would democrats come in and save mccarthy and vote against that so many dynamics here that could eventually come to the floor i think that's why the rules package is so important because republicans are saying no matter what happens with who is speaker and whoever will be leading the ship, they want to make sure that there are codified processes in place so that their ultimate goal or policy goal which is to restrain government spending and that remains something that has to be followed you need to have all republicans together in order to change these rules. this boxes future lawmakers in >> what happened if the rules package isn't passed

is that a situation? >> reporter: that's bad. that would be really bad you already had one week of trying to elect a speaker. part of the way he got to be speaker is offering concessions. if that deal falls apart today, then you couldn't get off the ground to become speaker and you can't institute to organize a congress that would be another humi humiliating defeat for mccarthy. the house doesn't come back until 5:00 we will see what happens >> did you stay up, ylan >> reporter: i didn't, joe i had a wex hit that morning i had to go to bed. >> i was up at 3:30. everybody was around i wanted to watch. did either of you watch? >> i wasn't up that late i never watch c-span >> it is watching it first time in 150 years

in the 14th vote, you knew it was a done deal. for matt gaetz, at the very end, anyone who is not there for the initial vote, they go back and poll them after everybody has already voted. he left on purpose went to the bathroom he wasn't there. matt rosendahl was no or present or something it would come down matt gaetz knew because he left and he knew he would be the mccain up or down vote he totally planned it that way at that point, it is going to happen he either says present or he says okay, you're in he knew it was the next one. he still don't do it it had nothing to do with policy all it had to do with is

grandstanding. i'm matt gaetz some people if you like publicity, it was a genius move to go to the bathroom to be the pivot guy. others say during the federal investigation into the sex trafficking of a minor that gaetz underwent, he is still mad that mccarthy didn't mount enough of a defense for him. nothing happened mccarthy did not strip him from the committee assignments. it never went anywhere that is what it is all about it was a "rolling stone" report. there were other things involved >> am i shocked by that? no it almost came to fisticuffs on the floor. the guy from alabama grabbed him around his mouth to pull him back >> it was cool not cool it was riveting to watch as it was happening.

>> i have to say the c-span cameras. we know more about what happens. they are never allowed to train to look at the cameras with the speakers and order and the party ruling is able -- here is the moment where mccarthy walked up. the congress member from alabama getting pulled away. >> i don't know if there is an actual swing he was pointing and yelling. >> the other guy wrapped his hand around his mouth. >> becky is right. we should figure out a way to get cameras in there for transparency of america. otherwise it is all propaganda >> you see who trump called on d.t. on margmargerie taylor gre. >> of course, we're not governing the country. >> these are elected officials

you should have cameras. >> why are they on that person and all of a sudden, kevin mccarthy or hakeem jefferries >> you learned more of the names of the people. >> i hope we get mccarthy this week i like to talk to him. when we come back, it is key inflation data and kickoff of earnings season. we get you ready for both next. later, two interviews from jpmorgan chase healthcare conference we will talk to the ceo of gilead sciences and ceo of biogen you are watching "squawk box" and this is cnbc we all w >> announcer: this cnbc program is sponsored by truist wealth.

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wells fargo and city grigroup ad delta airlines let's get to lisa erikson and greg branch. lia l lisa, we are riding high after the jobs report on friday. you have the cpi number and earnings coming this friday. are you ready? how are you place being your bets >> we are cautious and really the reason why to your point is progress to continue to make on both those fronts. in terms of the inflation numbers, we have seen an encouraging trend to see some of the price pressure drop. if you look at the levels, they are still high in our mind, we have an x axis and y axis on inflation. not only do the levels come down

over time, but the absolute levels and where they land we have concerns on earnings front as well and we had expectations come down and we are awaiting what the guidance for 2023 >> greg, what do you think >> they didn't give us everything we wanted in that report, becky. inflation dipped and wage growth slowed the unemployment rate dipped from 3.7% to 3.5%. the fed has been explicit it is likely we need to see about a 4.5% unemployment rate to curb wage growth in such a way it will then curb service inflation growth while that gap exists, sorhort a major contraction in the economy or reduction, we have not seen that yetpositive, but e fed will stay the course

net fed rate is 25 basis point hike in february and indicating 4.8% terminal rate i don't think any of that will actually happen. terminal rate of 6%. i'm looking at 50 bps in february and followed by another 50 i don't see us talking about cuts until the back the half of the 2024 largely, to second our colleague, all of the heavy lifting is in front of us rather than behind. >> greg, what happens if on friday you start getting earnings rolling in and these companies start beating what is lowered expectations at this point? >> dramatically lower, becky six months ago we were looking at 8%. now negative 4%. i'm not sure that beats on expectations that came down that quickly. earnings expectations came down

6.5% in the quarter. number one, that is not indicative of any change in the macro. two, we're looking at 2023 estimates that are likely too high not as insanely high as 2022 still too high i'm not sure how we get from negative 4% in the fourth to low single digits in the first and second quarter and high single digits in the back half. i think we will undergo negative revisions even if this comes back at the draconian expectations >> i hear your point about how one month of jobs numbers does not an inflation picture make. maybe that is why thursday's cpi number is going to be more important to macro outlook and what we first hear on earnings coming in. the fed will still play a major

role and when you talk to the big power investors, they are saying they are watching the fed and taking kcues from that >> we agree, becky policy and inflation and interest continues to be key this year. as greg is pointing out, one of our big concerns with the overall picture is the market is relatively optimistic. believing in a lower terminal rate and that coming faster than what the fed dot plot expects. when we hear the fed commentary, it is clear even in release of the minutes last week, that they are holding on to the higher than longer messaging. with that disparity, that is a risk of the market expectations resetting the fed levels that is a concern going forward. we're going to want to continue to watch the data, but also the fed reaction policy to that will be key >> all right lisa and greg, thank you both.

we will see what this week brings. coming up, news on layoffs now. reports say that the cuts at goldman sachs will start this week details straight ahead. later, jack ma ceding ra plil of ant group and making a reubc appearance more on that story later this hour [music - cover of blondie's “dreaming”] [music playing] ♪ imagine something of your very own. ♪

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goldman sachs signalled it plans to cut jobs and multiple reports say it will happen this week the bank will layoff about 3,200 people covering mostly in the core trading and banking groups. a cnbc scoop salesforce ceo marc benioff announcing it would cut 7,000

jobs or 10% of the work force. banioff expressed concerns of the productivity in the sales organization half of the account executives brought in 90% of the deals. salesforce revenue growth is slowing and they face an activist investor which is concerned about operating leverage worth noting, at the moment, they brought their employee base down to 71,000 if you bring it all the way down to what it was pre-pandemic or right when the pandemic began, 50,000 they took it down to 80,000. cuts of another 20 if you live in a pre-pandemic universe, he would look more

dire in the terms of layoffs >> do you know i think salesforce invites you they will have it. it was a horrible discussion they were having i would stick needles in my eye before i go to that. you know the big party with u2 playing? i guess they will not do that this year. >> i don't know. i bet they still would they are in the sales business there is still a business they have to operate. >> tell me how it is. >> i'll let you know >> a lot of companies when you deal with layoffs don't think -- >> i'll wash my hair of that. coming up, we will talk about kevin mccarthy's election as house speaker and concessions could impact the legislative agenda. later, rapper flo rida is suing celsius. he will join us in a "squawk

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good morning welcome back to "squawk box. we are live from the nasdaq stock market in times square

we have been watching the futures this morning so far so good dow futures up triple digits gain of 103 points above fair value. nasdaq up 31 this comes after gains of better than 2% for each of the major averages on friday nasdaq up 2.5% the best week since november for all three. the best day since november 30th we will see what happens this week. supporters of former president of brazil bolsonaro stormed the presidential palace and supreme court in brasilia. many called to remove president da silva who was sworn into office last week bolsonaro refused to accept he lost the october election. he left last week for the united states instead of taking part in

the ceremony for his rival the brazil stock market opens for trading today and there is concern of the emerging markets as a result. after 15 rounds of votes and concessions, california congress member kevin mccarthy was elected to lead the republican party. lead the house as speaker of the house. the political fight is raising questions of how he will govern especially with the debt ceiling. joining us now is mick mulvaney. also former u.s. congress member donna edwards. let's start with mick. did you stay up? >> i was actually there on tuesday, wednesday and thursday. i couldn't handle it i came home on friday and watched on tv. nat fascinating. you think this would be worked out in back rooms.

they could have shutdown the room but they could not agree on that it was messy i think kevin is right you judge by how it ends not how it begins. >> what do you think it means for -- i don't know if they will try to get anything done the republicans don't control the senate they can do other things, obviously. if someone -- if one person can challenge mccarthy's leadership, that doesn't mean he is at risk. all you can do is bring it up for a vote i don't know how awful that is >> that rule is in place for 240 years. the only speaker not to face that rule was nancy pelosi they will be playing defense not a bunch of great republican legislation passed into law in the congress there won't be any they will do the same thing when you are the minority party

they will do the same as the democrats in 2018. you are playing defense. trying to stop the administration from putting their genagenda in play will there be fights over spending yes. there will be that regardless of the changes. >> congress member edwards, what do you think the biden administration and democrats are going to try to accomplish the next two years >> i think clearly given the divide among republicans, i think there will be opportunities for democrats to really leverage their minority that was certainly the experience when nancy pelosi and her caucus were in the minority. there were times when, you know, deals had to be cut with the republican leadership. you know, peeled off some republicans and passed the votes

with republicans on spending and debt ceiling and those must-pass pieces of legislation. i think the chaos that ensued last week is only going to continue in this congress. it is not just the six who voted present, but a range of freedom caucus members where there is a lot of divide in the republican party. some of it very personal i was actually shocked to hear the personal attacks made on the house floor. if that is taking place in public, i don't know what is taking place in private. it will make it very difficult for mccarthy to govern with the unanimity he will face on other side with democrats squarely united >> mick, what do you think the biden administration tries to do at this point? >> the power of censure will switch

this is the replay of the trump administration the power will switch from congress where we, the republicans, used to control the first two years of trump's term,ing both house and senate it will move down the street to washington, d.c. you will see an aggressive executive branch more rule making as of the night of the election, ron had folks in his offices and say what can we do more? they will try to push more of the agenda through the same thing we did. yes, they will have paralysis on the capitol, but that is is by nature with the split. the balance of things is move down pennsylvania avenue you will see a more administrative approach for the next two years >> do you think -- what is the dynamic, mick, and then i'll let you weigh-in as well,

congresswoman. where is the republican party right now between now and 2024 in terms of donald trump and in terms of, i don't know, you probably remember some of the guys and know them well from the boehner saga >> oh, sure. >> what does the republican party look like at this point? >> nine folks voted against boehner. one voted against mccarthy i know a lot of these folks. what do i think it will be like? the trump angle was interesting, joe. at the end, trump's candidate wins and that's good for trump he was supporting kevin mccarthy there were the couple of truth socials in the middle encouraging people to move and they didn't move that was insightful. trump commands a great deal and authority with the right-wing of the party and maga group i don't think it is exactly as much as everybody thinks you did not see a single one of

them change their vote because of his tweet or request. you saw them change votes when they got the deal they wanted. his intervention did not directly get a vote. his guy wins, ultimately that is good for him it would be terrible if kevin mccarthy lost. the dynamics may have changed. that is interesting to see over the next 18 months. >> congress member, i can't say there was any the alcohol. maybe a flask. there was popcorn. the democrats did enjoy all 15, maybe not 15 all 14 of the opportunities to talk about hakeem jeffries i think there was shadowing going on what does it mean for democrats going forward? >> i think anybody who thought hakeem jeffries coming in as a new leader was not going to be up to the task actually clearly saw from the action on the floor

that he was able to galvanize and maintain and continue support of the democratic caucus so, i think that speaks well and bodes well for his continued leadership of the caucus it will be strong. look, the administration and congress with democrats passed a lot of key legislation over the last two years i think for house democrats, they will welcome appearing at events with a president with infrastructure projects in their districts and states i think going forward, look, i broke out a couple of drinks during the marathons i don't know what was going on over there i'm sure not on the floor, but those at home watching this show, definitely had the drinks and popcorn. >> that's exactly right. i said that last week. congresswoman, that is the first thing i said

i don't know what they are doing on the floor, but i was having a couple that was a scene, wasn't it? i didn't have popcorn. we have goldfish crackers. mick >> if there are two things to take is democrats were united. they may have one or two people skip a meeting >> mick, almost like tomatrons if there was any question of how democrats stick together and you -- it is almost like the borg, right? the borg collective. >> what he did was really hard to do. >> the borg collective >> the borne >> go ahead. >> democrats were enthusiastic about their new leadership >> it was 212 every time we could have saved a lot of time >> democrats like their leaders,

that's for sure. >> all right you know whati mean. it was the borg. perfect. i came up with it. i don't get any credit for remembering something 20 years ago. >> the borg collection from "star trek." >> the swedish singer? borg >> bjork >> bjorn borg. >> i like him. when we come back, billionaire jack ma swceding control of ant group. and we will talk to judy sheldon and why she says inflation is coming down reminder, you can watch or listen to us any time. make sure you have the cnbc app. we'll be right back. producer s wt company's advanced-stage projects located in north america, headlined by the cariboo gold project in bc and

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billionaire jack ma is ceding control of ant group. he doesn't hold an executive role, but he has controlled it through the position in the investment entity. ant will not hold dominant position, but voting rights. the change in control moves ant one step closer to the overhaul after the china tech crackdown

for the ipo in november of 2020. shortly before the change, photos of ma appeared on instagram. one posted on friday where ma appears to have visited. ma disappeared from public view in 2020 after giving a speech critical of the china regulation system he has maintained a low profile since then rarely appearing in public view. coming up, a lot more on "squawk. nasdaq with a 1% gain. we will talk tech stocks to consider. in the 8:00 hour, don't miss the interview with rapper flo rida with his lawsuit with celsius energy are drinks. it is fascinating. "squawk box" is coming right back

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welcome back to "squawk box. tesla stock falling 40%. bringing the market cap to $357 market cap which stands at $341 billion after rallying 35% over the same time frame here to talk about tesla, meta, investing in tech more broadly, senior research analyst. it's great to see you this morning. there's a lot of folks who have -- they've held on. they've been on this wild ride and they're waiting to know if this roller coaster goes back up again. >> good morning, andrew. i think there are a lot of opportunities in the technology industry at current levels, specific to tesla. they're being impacted by cyclical forces and i expect that to remain a factor in the

near term. but i think the bigger story there is that tesla is a leader in electronic vehicles and part of it is that their business model enables new services like self-driving to be delivered over the air and i think that's powerful meta, which you mentioned, remains important to advertisers and to users we're focused closely on that transition and we prefer google in this space given the durability of search but we do see opportunities across the space >> so if you take the big names out, where are these opportunities and who are they >> so if we look at artificial intelligence, you have a company like nvidia which is really a critical partner for a lot of the new workloads in ai, areas like drug discovery, fraud detection. look at the world of public safety motorola solutions which is a leader in delivering video and

analytics. a lot of modernization needs to happen for the first responders. if you look further afield in area like mobile devices, even though there's a lot of skepticism on the near term, qualcomm is a leader there, which has a lot of intelligence property and security and this notion of connecting everything. there are opportunities beyond some of the giants that you referenced >> i'm wondering among the faang names that have been so widely held, whether you would tell people to hold them if they're still holding them i think there is sort of this c contingent who we've taught people over time, you're not supposed to sell when things are going down for a long time things have been going down and folks are not selling. what are you supposed to be doing? >> my recommendation would be that you hold on to those names that we think are attractive in

the face of challenging demand drivers globally for example, apple, which has pulled back along with others, their iphone franchise remains durable. yes, they will be impacted by demand softness in parts of the world. china remains a wild card there. if you look at microsoft, they can't escape some of the challenges in enterprise spending, but azure positions them well. and so what is able to hold on what is, of course, a challenging period, i expect the market to look towards a reacceleration in the growth later this year and more so into '24 and '25. we appreciate the market as a discounting mechanism which can help drive better performance for these shares assuming there's growth and innovation. >> what would you do with tesla? >> i would be a buyer of tesla

at current levels. >> and thinking it goes to >> i see significant -- i see significant upside in tesla. i can't give you a specific number if the automobile growth is there over the next couple of years and the free cash flow growth continues, i expect to see the shares significantly higher it will, of course, be volatile. but if they execute, i think they will overcome some of the cyclical dynamics that we're seeing in the near term. >> great dan, nice to see you, sir. thank you. i hope you're right. >> thanks. airlines are making it tougher to earn travel perks this year. the largest carriers, delta, american and united are raising spending requirements to earn some of the elite frequent flyer tiers that grant things like free upgrades and early boarding those status levels have become too crowded thanks to pandemic

extensions of status requirements and high levels of spendings on rewards cards over the last three years the airlines are raising the requirements because as united's chief customer office said, if everybody has status, then nobody has status. you can read more about that story right now at cnbc.com. >> steve liesman is going to tell us why the fed is beginning to sound tone deaf beginning? that's straight ahead. two big interviews from the jp morgan health care conferences. "squawk box" will be right back.

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behold... all that talent! ♪ this is how we work now ♪ good morning investors look to build on friday's gains in the markets. futures this morning pointing to a higher open. we're going to find out what's moving in the premarket. picking up the gavel what house speaker kevin mccarthy's win means for business a big day for health care. we will hear from the ceo of gilead sciences who will join us live the second hour of "squawk box" begins right now.

♪ good morning and welcome back to "squawk box" right here on cnbc live at the nasdaq market site in times square. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures at this hour the dow up about 95 points right about now. nasdaq up 33 points. the s&p 500 looking to open about 13 points higher we got the treasuries. the ten-year note, 3.599, the two-year at 4.276. it's up just a little bit. oil, though, take a look here at wti crude, you're looking at -- by the way, $76.16 interesting. i paid a small fortunate for gas over the weekend.

>> where >> like i was almost at $4 or something. >> it's weird. recently i paid $2.99. >> i was up at $3.85 or something. >> was it premium? >> i don't do premium. you know that. take a look at crypto, think about risk on/risk off you're looking at bitcoin sitting at over $17,000. becky? a slowdown in wage growth, a service sector now in contraction. the fed is still talking as hawkish as ever. steve leishman joins us right now with a look at whether the fed is paying attention to the data and what we should think about it all hey, steve >> hey, becky. the fed is supposed to be listening to the data, being data-dependent, but it's sounding tone deaf these days. inflation slowed, but the fed

remains as hawkish as ever focused on the inflation risk, not the economic risk. rafael bostic telling us there's more work to do. esther george told us that the 5% rate should go well into 2024 barken said the inflation fight i isn't over the ism services contracted. wage growth slows. five-month analyzed inflation is running around 2.5%. to be sure the unemployment rate did fall by 0.2. here's how the market reacted to all that data on friday. the two-year fell in two steps, in the jobs number and ism services a sign that it sees the inflation and the economic weakness that's out there. you couldn't see that kind of drop in the fed rhetoric anyway. the appearance by looking at the comments is that fed officials are not really data-dependent.

it looks like they've got this idea in their head to go to 5% or higher almost no matter what. former columbia professor, talked to him over the weekend, he said what's strange at this moment, when things are so ambiguous, is for the fed to be acting like their actions are so predictable. the fed may have it right. inflation is a persistent threat or they may be making a mistake similar to the one they made last year when nearlyall decided wrongly, of course, that inflation was transitory rather than a debate and different takes on the data, they all sound like they're talking or singing from a script that is ignoring the data. becky? >> how much of that is because of just their concern that the market is going to be off to the races if they at all indicate that they're backing down? that's what i kind of took away from the fmoc minutes last week when they released it, that that is a topic of conversation, something that comes up in the

room >> i guess you could call it -- it's all rycc, rhetorical yield curve control, or cheap talk. >> that is not catching on >> steve, you -- >> ycc is something they use that's something the fixed income guys talk about rycc >> i wanted to talk to you today, and you said exactly what -- i'm not kidding, you said exactly what i wanted to say. here's what -- my conclusion on friday it was very simple they had no idea when they were talking transitory, they had no idea better than anybody else because i thought they were looking at the data at the time. that's a problem when you're looking backwards. it doesn't help. now they're absolutely sure that they got to get to this new level because they're absolutely sure they know what's going on with inflation

why have anymore confidence in what they know now than the confidence that we had and what they knew back then for the name reason you may say they're not data dependent, but that's what they're using. everything they're basing it on is stuff that happened three months -- for the last three months they're no good at looking ahead and being right about forecasts. so why should they be so dogmatic about it? >> i think you're 100% right, joe. if i were the fed, i would have run a little bit of a public -- what do you want to call it -- lookback at why they got the transitory story wrong why they made the mistakes they made, to provide that confidence, joe, that they learned from their mistakes and moved on what interests me, joe, is the absolute uniformity of the rhetoric i'm not seeing or hearing any doves -- i'm not -- you look at

the market, joe, and you see a dispersion of view some guys think the fed is just right and they support what the fed is doing some guys are sort of in the middle and some guys think the fed is dead wrong. why with 19 members are we not seeing that dispersion of views which is really the reason why there are 19 members, from 19 different places apparently. what you hear right now, joe, is this talk, and the result of this, it's not cheap change here we're talking about the risk of a recession. and if it's possible for the fed to avoid a recession, i think it ought to grab that possibility. >> did you look at what's in the lei? we pretend that the market is stupid and it's a bunch of traders -- in the back of their mind, they want things to go up, so they won't listen and they keep -- >> yeah, yeah. >> but leading economic indicators look at markets because they supposedly have more wisdom than trailing

indicators and so the fed, all it wants to use is trailing indicators and it ignores what everybody else uses to try to gauge what the future looks like. it's almost like they're mad that the market doesn't do what it said it was going to do in the past it seems like the wrong indicators to use to decide what they're doing. >> i'm not monolithic about this, joe. i don't think the market is always right the way some people do i think a good framework for thinking about inflation and economic growth, it's one that's used by the market if you have a good framework, a good model, it's something you ought to be taking into consideration here i just -- not exactly clear what the framework is here. there's one bit of framework which is that a tight job market will lead to service sector inflation and that will keep inflation high but you see these reports out there about rents coming down and then the friday story, joe, not to get too technical here,

what i'm reading is a lot of people saying, it really is blowing this idea of the phillips curve out of the water, you had the unemployment rate decline, but also wages decline. this tight labor market, you have moderating wage growth and that's been a big part of the discussion that i was reading in the commentary over the weekend and whether or not the fed is thinking about that particular relationship >> all right, steve. thank you. >> thank you, steve. >> he's right. >> he said both sides. >> yeah -- hold on bring him back. >> he started with tone deaf. >> i don't think he said both sides. steve, are you still there he's gone. >> i just want to go back for ten seconds to the beginning of the show 6:00, you were very optimistic i'm a little less optimistic, though i want to be optimistic -- >> have you been optimistic in

the past 14 years. >> i have. >> not once. >> but the point is -- the point is, i think that steve is more in the tepper camp or maybe tepper is in the steve camp. you can't find mr. powell. i know he gave us both sides steve has been on that side most of the time. is he changing sides >> we've done enough. >> i don't think so. >> we've gone up enough. they've done enough. they went crazy raising rates. there's going to be a deep slowdown oh, boy, steve, pick a side. >> i feel like an 8-year-old where the parents are talking about me and i'm just kind of sitting there and it's amusing >> kids say that all the time. >> i think it's time -- look, my observation is two-fold. the first is that it's amazing to me that amid this data, the fed remains monolithic in its hawkish rhetoric and guys from bostic to george i think there is -- there should

be at least some of variation or debate on the fed given the mistake that it made the second thing i think is -- i do believe it's time for the fed to start thinking about a pause here because -- >> does that sound like your side >> no, no, hold on >> does that sound like your side >> steve is saying he thinks that they should do this he's not saying that he thinks they will do this. and that's the distinction. >> finish your thought, steve. what was it? >> my distinction, i think that service sector number coming in is a potential game-changer here and i think we ought to be paying close attention to that. >> yes, and they listen to you. >> and that is an important warning signal that came out on friday. >> you're the 20th person. you're the 20th person you got 19 board collective types and then they got leaseman is the 20th opinion that jay

powell loves you, watches you, respects you and listens to you. this could be a game-changer with you on my side. >> um, i don't consider myself that i try to be a neutral observer here i'm making out commentary here that i was -- you know where i was last week? i was in washington for the minutes, kansas city for esther george, new orleans with bostic. over that time, i probably read five or ten fed speeches with the help of my producers and we did a great job i think covering this stuff and i was just amazed at how monolithic it all was amid all of the data that came out and look at how the two-year reacted it lost 25 basis points. and they rallied, markets rallied and i think it has to respect what the market is saying here. >> the services sector you think is important because it signals a rolling over the consumer? what does that tell you -- >> see, becky, i think i've been

pretty straight about this for awhile here. we all focus on the manufacturing sector because there's a lot of variability and volatility in the manufacturing sector the service sector is the bigger part of the economy, two-thirds of the economy when that starts to roll over, that's when you ought to stand up straight and put a little curve in your back, put your shoulders back and start to pay attention. >> thank you, steve. >> can't mention any names but there are some really big-time, smart guys that were hawkish that we've heard from. >> yeah, i can think of a few names. >> that have said they're more concerned about how tough it could be this year in terms of -- >> now you're leading me to make guesses. are you hearing from tepper? are you -- >> there's a hundred people i talk to and they're all smart. >> are they optimistic or negative. >> this person is negative about the markets but more negative

about the -- not because the -- the fed is going to have to quit quickly because things are going to fall off a cliff. >> because it can go bad both ways >> it can. but if it did go bad that way, i think the markets would rally. >> if it meant the fed put was back >> there's some people that think there's going to be qe before the end of the year, it's going to get so bad. >> i've seen some of those. >> let's get to dom chu. i don't know if he's one of those people you don't have to say if you are, dom >> i'm an optimist i think i have to be an optimist you have to believe in the long run that things are going to be good or else you would never been invested in the market. you have to figure that ten years from now we're going to be better off and things are going to go the way that they are. i guess the point is, for my segment, is to take some of those big picture economic things that you were talking about the and talk about how

they might be affecting some individual companies and kind of put some rubber meets the road commentary in here as well it's the first full trading week in 2023. we'll check on the financials first. you got investment banking giant goldman sachs, a bloomberg report said that goldman will start one of its biggest round of job cuts ever this is according to people familiar with the situation over there. possibility over 3,000 positions could be cut as soon as later on this week, roughly a third of that coming in the bank's core investment banking and trading divisions. some of the other big banks here, jp morgan, citi, wells fargo. job cuts, services sector economy, that could be part of the story about the economic narrative playing out. another key part of the market to watch here is technology. a slate of computer chip names

in the headlines, nvidia, marvell. wells fargo call them amongst their top picks in semiconductor due in part that the industry could find valuation bottoming in the first half of this year speaking of markets. and we're going to end with a check of lululemon down 15% they're updating their fourth quarter guidance this morning. it's narrowing its profit guidance for that quarter and that does lower the upper end of its previous range it says profit margins will be hurt more than previously expected a lot of these economic themes playing out in some of these companies premarket. i'll send things back over to you. >> thanks, dom coming up, what house speaker kevin mccarthy means for the business community we're going to speak to former

eny global chairman and ceo about what's ahead for congress. later, can the fed pull off a soft landing we're going to hear from an economist whose model has predicted a recession correctly since 1988 but he thinkths is time, it may be wrong you don't want to miss this interview. "squawk box" coming right back l. harness the power of 7 moisturizers & 3 vitamins to smooth, heal, and moisturize your dry skin. gold bond. champion your skin.

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following a dramatic week on capitol hill, kevin mccarthy was finally voted in as speaker of the house. speaker mccarthy made many concessions to get the needed support and now that the house can get to work, there are some questions about how much the new speaker can accomplish joining us right now is mark weinburger, the former ceo of ey i know you've been watching all of this play out and thinking about what it means for businesses typically businesses will look at a divided government and say, great, this is good news this time, you think it's a little bit different why is that? >> becky, good to be with you. yeah, the risk is on for business this year so many risks out there, whether it's the economic concerns or inflation. going into this year, the belief is risky new legislation, whether tax increases, massive new spending bills are kind of off the table.

but the business community still needs government to do its job and pay its bills and stay open. as we get to the middle of this year, we're going to see the net ceiling increase come up that you talked about on the show and heard a lot about. if you remember back to 2011, around the time leading up to the massive standoff, we had a 2,000-point drop in the market, we had significant loss of confidence in the economy, we had great volatility and that wouldn't be good for business, adding that additional risk on top of what that would do to interest rates and spread rates for bonds and equities would go up even higher than the fed is trying to take us. those are concerns we have to watch out for. >> mark, i watched this and thought that the far left of the democratic party must have been watching and thinking, wow, these people know how to really get their choices heard within leadership, taking notes on that the far right and far left are

not big fans of business what does that mean going forward? >> yeah, i think the business community is going to try and keep their head down and focus on the policy issues as they come up and take positions on how they're affecting the overall economy and their particular industries and companies. but we saw the weaponization of the esg debate and i'm sure there's going to be hearings on one side, and the house coming after some of the initiatives we saw from the institutional investors and how they're viewing esg. we saw some of the battles with the chamber of congress that has the new speaker has. the business community is going to try to keep its head down, stay out of politics, focus on initiatives that are coming up that could hurt our workers, the consumers and weigh in when appropriate. >> the new speaker, kevin mccarthy, has already madeit pretty clear that he's not happy with places like the head of the chamber of commerce. how do you feel about the

chamber of commerce, the business round table, some of these positions that have been taken that may draw the ire of kevin mccarthy at this point >> well, listen, we have to work, the business community with democrats and republicans, obviously. we have issues that are not monolithic, even within the business community we have different industries that are trying to pursue different things but it's never good to be in a battle with any members of congress i think that we have to just keep focused on what we think is the right thing to do. we can't turn our head and do nothing. congress isan incredibly important overseer of what we do and they write rules and regulation, they have incredible impact on us we have to make our point, as you know, becky, i spent time with each of the last four presidents in different capacities and i would much rather be in the room and try to help the people in congress figure out what's going on i think business can't turn a blind eye on what's going on in

congress but they have to stay away from the politics and stay focused simply on the policy. >> how do you do that when so much of what's playing out in politics right now is either you're on my side or you're against me if you're in the room, you're going to have to pick sides. how do you do it >> you should pick sides based on the long-standing policies that are good for your clients, consumers and good for the overall economy. but not get weighing into state battles on various pieces of legislation, not get into picking certain politicians and make a long-term view on things you know about that's where some ceos get into trouble. >> i just wonder how this plays out realistically on things like proxy votes that are coming up you're on at least three boards, johnson & johnson, aramco and metlife is another board you're on how does this come up when proxy

battles are being used by both the right and the left to say, again, force the company to say, we're on your side or we're not. and if you're not with us in the proxy battle, we vote whether that's on esg or some other issue. we're going to make sure you pay for it >> yeah, spending a lot more time sitting down and talking to institutional investors and try to make our positions known and understand exactly what we think is going on and why we're doing what we're doing that's what's important. whether or not congress changes the rules on how -- or let the agency change the rules, in this case very particularly, what the rules are for how and when they bring up different matters we can't control. we have to make sure they understand why you're taking certain policies around the environment, around our people and our workforce, how we're paying our executives. and that has increased tremendously over the last several years. >> mark, thank you

we appreciate it >> always, becky, thank you. >> joe, just so you know, it's the nfc that's the bull, the afc is the bear. >> that's not good i think -- i don't know. don't you think the afc has some better teams this year >> i do, i do. my better team didn't make it. i'm a steelers fan >> steelers did what they had to do they didn't end up losing that game >> the steelers won but the jets beat the dolphins. i'm sorry, the dolphins beat the jets which was the problem. >> right, right. i had the steelers i don't know but i didn't have anybody else i had detroit last night, the money line and the under that was the only bet i won, though i lose, lose, lose i'm a loser. >> moving on

coming up, nurses are on strike after contract negotiations fail. we'll bring you the details after the break. and later daniel oday is going to join us lss.g us, rapper flo rida suin ceiu he's going to join us in the 8:00 hour. "squawk box" coming back in just a moment can she help? how about a comprehensive point of sale system... that can track inventory, manage schedules- and customize orders? that's what u.s. bank business essentials is for. (oven explosion) what about a new oven, can u.s. bank help us there? we can serve loans in as fast as 12 minutes. that would be a big help! huge! jumbo! ginormous! woo! -woo! finding ways to make your business boom. that's what u.s. bank is for. we'll get there together.

more than 7,000 nurses from two of new york city's major hospitals went on strike this morning. nbc news correspondent vaughn hillyard joins us right now at the scene with more on what's happening there. this is an unbelievable situation. >> reporter: you're right. it ultimately happened at 6:00 a.m. this morning, the nurses at these two facilities are on strike. one here in the upper east side of manhattan and the other in the bronx. here in new york, you see hundreds of nurses outside protesting here in the streets this is a situation where now the city of new york is looking to backfill through public and private agency, but also beginning to work with the new york fire department to reroute emergency services to other medical facilities around town this is a situation that not only the city, these hospitals, the nurses association were trying to avoid for weeks, but ultimately the negotiations broke down in the middle of this

morning, and now the two hospital facilities are looking largely to be missing key portions of their nursing staff. >> i want to thank you, vaughn hillyard, again, from nbc. guys, this is a huge situation i know it's a local new york story, but it points to the problems that we've seen with organized labor, coming back and feeling like they've been put upon -- especially frontline workers. the situation is one where they've been offered a pay raise of 19% which sounds like a great pay raise, offered to higher more nurses to help them out, but the nurses say they're exhausted from what happened over covid there were times when they've been called to have at least 20 patients per nurse in the emergency room and they say that's happened on a regular basis. i mean, that's concerning too. if you've been in a hospital, you've seen the staffing situations you see what happens with these things it is years of pent-up frustration of living in covid and the aftereffects of what's happened with it all of the hospitals who were involved were able to settle and reach agreements the governor has been asking for

binding arbitration. we'll see if something gets done you go back and look at situations like transportation, where the railroad workers were told they can't strike they were moving babies out of the nicu if you're a family who has a family member in one of these hospitals what you're thinking at this point. it's horrible that it's gotten to this situation. >> nobody goes into nursing to get rich you figure -- and -- i've been in -- rarely, a long time ago, but just watching the nurses with my mother, my father towards the end of life, they do it for a reason. it's a calling. >> and they're exhausted. >> but it makes a huge difference too >> great nurse makes a big difference >> it does still to come, gilead ceo daniel o'day joins us live from the jp morgan health care conference he'll talk about the latest

cancer treatments and pricing and much more. plus, heather boushey. futures at this hour are adding to friday's -- a positive tone pretty good week it's january maybe we can put 2022 in the past stay tuned you're watching "squawk box. this is cnbc

welcome back to "squawk box. slows ra slowing wage growth was reported friday but it's still flashing a recession. this man is 8 for 8 in forecasting recessions since 1968 says this time around his model is giving off a false signal joining us to explain this is a professor of finance at duke university good morning to you. you've been right the whole time you say that your model is flashing red and yet you think it's wrong what do you mean >> well, it's a model.

and all model are simplifications of reality and it's a -- like a really simple model, if you think about it one variable the slope of the yield curve long rates minus short rates and i think that models sometimes fail and this is a particular situation where if you look at the other data, it's just not consistent with at least a hard landing. it is consistent with slower growth so the yield curve is saying that growth will be slow, but it's not obvious to me looking at other information that my model is giving a correct signal >> okay, but let's go backwards for half a second. we were talking about this model i believe since 1968 you've been right across the board. is the model that's been right across the board or you personally have been right across the board have there been times when you have effectively looked at the model and said, i don't think the model is right >> no.

in the out of sample period, this is my dissertation from 1986 we've had four recessions and there were four yield curve inversions and i went with the model every single time. this is the first time where i'm saying, well, looking at other data, i'm not too sure >> let me ask you a separate question, though the model may have been right over all of these years, but how do you take into consideration or factor in what the fed is or is not going to do in any particular cycle, if you will? because part of the outcome can be affected by a group of people >> that's exactly right. again, this model is very simple so there's other things going on in the economy that basically is not incorporated into the model. for example, the fed is a wild

card here. they effectively inverted the yield curve to slow down economic growth. and the wild card is whether they will continue to basically, in my opinion, overshoot and drive rates up to such an extent that we put full brakes on the economy and the fed drives us into recession that is a wild card. i'm not sure what they will do. >> how do you handicap that part of the situation that may be the -- that is the wild card, but that may actually be the pivot point that determines what the outcome is >> yeah, so the fed, as everybody knows, including the fed, we're very late to start to deal with the inflation problem. so the question is, will they will late again? looking at the inflation data, it's clear to me that we peaked, and i think it's unnecessary to

do additional tightening, but if they push really hard, they will drive us into a hard landing that's completely unnecessary. >> why do you think they won't i would have always -- if i had some work eight times, i wouldn't all of a sudden presume to think i know more than my great model. that seems like the first mistake you make you think the fed is going to back off they're going to find religion i'm with you they were so wrong before. why do you think they had any idea better than last time, because they don't it's all backward-looking stuff they look at. >> with the model, one of the key things with the model is to know when to apply it and not apply it it's a simplification of reality. my model is not a model about the fed. it's hard to handicap what they will do. i'm hoping that they learn from their mistake when they were so

late to start tightening and they will actually see the data and hopefully not be fooled by the most recent inflation announcement that's forthcoming and actually re-evaluate and basically stop the tightening. the time to stop is right now. >> i know you agree. the question -- the question -- here's a different question. what do you think unemployment has to go to and what is a politically palatable number that you think the fed is targeting. employment always was -- i don't want to say always but the emphasis has clearly moved there. >> so this is one of the issues in terms of the potential false signal from the field curve, that the employment situation is very unusual and that you've got access demand for labor. unemployment -- we can lose jobs and given the excess demand, we're not going to see a very

large rise in unemployment and unemployment is one of the key things that the nber looks at in terms of dating a recession. so that gap is very unusual. this idea that you've got excess demand i think the fed is probably more focused on wage growth and the last announcement of wage growth suggests that's moderating and that reduces the probability that they will act to increase rates let's say by 50 basis points that's good. and the market has figured that out already. so i certainly hope they look at the data, they see that inflation has peaked and they layoff if they don't, then i guess my model will have a correct prediction >> okay. harvey, professor harvey, rather we should see whether the model or your view of the model turns out to be right.

when we come back, gilead sciences pushing close to a six-year high. its lung cancer drug getting a lot of attention from investors. daniel o'day will be joining us live in just a few minutes from the jp morgan health care conference right now that stock is at $87.80 the nasdaq futures up by 61. the s&p continuing the big gains that we saw on friday. a reminder for you, you can get the best of "squawk box" in our daily podcast. follow "squawk pod" and you can listen any time. we'll be right back. these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you...

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welcome back to "squawk box. u.s. investigators have subpoenaed hedge funds over their dealings with crypto exchange bifnance. they're looking at the relationship between the two sides as part of a broader probe into whether binance bypassed money-laundering moves they're still discussing a potential settlement with the exchange and weighing whether they have enough evidence to bring charges. of course, there had been

reports earlier which cz had denied about money-laundering related to iranian money at one point. elon musk is making a case to move a trial over a tesla shareholder lawsuit from california to his home state of texas. lawyers for musk are arguing he won't be able to get a fair trial in the golden state because negative local media coverage against musk has biased potential jurors the trial stems from musk's tweets back in august of 2018 when he said he had sufficient financing to take tesla private. it's slated to begin next tuesday. coming up, gilead sciences ceo is going to be live from the jp morgan health care conference we're going to bring it to you. in the 8:00 hour, biogen ceo is going to be our guest and then heather boushey

take a look at the dow this morning. tesla is up 3.5% right now "squawk box" is coming right back lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

just look around. this digital ageis fast, we're living in, it's pretty unbelievable. problem is, not everyone's fully living in it. nobody should have to take a class or fill out a medical form on public wifi with a screen the size of your hand. home internet shouldn't be a luxury. everyone should have it

and now a lot more people can. so let's go. the digital age is waiting. jp morgan health care conference, the largest health care investment symposium in the industry kicks off today featuring the biggest names in biopharma.

meg tirrell is there with a special guest. gilead sciences, that's got to be one of the top five, i would think at this point. biopharma. >> certainly gilead has been among the four horsemen of biopharma. we're here with daniel o'day. >> it's great to be back. >> i know. you're the first guest this is the conference people talk about as setting the stage for the year in the industry how would you look at the industry broadly given drug pricing, where we are with new innovation, the political environment, sort of everything. what are you looking at this year >> i think we saw what an important role in the pandemic the industry played. and it that continued with many industries i'm impressed with what the industry has contributed for gilead, this is a different time than when we met three

years ago at this conference it's a different place the team has implemented well on the strategy we're in a strong position in terms of the diversity of our portfolio and the promise of our portfolio and that's true in both hiv, which has been our strong legacy part, building on that, but also incredibly important new medicines for cancer and for covid-19. >> let's talk about your hiv business because you have a new approval with a new drug that you don't have to take so frequently and you're looking at this as both treatment and prevention. >> yes. >> and even with the possibility of ending the hiv epidemic at some point is that how you'relooking at it. >> that is our goal. to end the hiv epidemic. it is hard to overstate this medication it was approved just before the holiday. and gilead has been first in treatment and prevention and we have once daily oral pills for treatment and prevention this medicine is reducing that

frequency to once every six months the approval before the holiday was for late stage hiv patients. but to your point, we're doing now studies in prevent and in earlier lines of treatment i'm most excited about the prevent. because today we have about one out of every four patients in the united states that could ben frit from prevention medicine on an oral daily pill we think this twice yearly regimen, if approve and the trials could more than double the amount of people on prevention so that could significantly change the nature of the epidemic both ear in the united states and the developing world. >> let's talk about another virus, the covid-19 virus. and you have remdesivir. and we have some issues with like paxlovid, and tell us about the progress with the oral pill

and how you're looking at covid-19 as a market opportunity at this point. >> well the team has done amazing work first with having the first approved temperature with remdesivir during the pandemic they kept looking at ways to find an oral medicine. even with the current oral medicines out there with certainly patients and we believe that went into late stage trials in the united states here in the first quarter of this year that is news at this conference, actually and we're looking forward to bringing that for a benefit to patients in terms of the overall nature of the business, we look at both the impact of our covid-19 therapy on your business but we look at our underlying business in hiv and cancer add the other areas that we're working on. they are both important and want to bring the next advancements to patients in all of those diseases. >> people are wondering about

your business development plans. that is another thing that happens at this conference how are you looking at m&a and partnerships. >> we're in a strong position because of what the team has done over the past couple of years. we more than doubled our portfolio. we have a lot to do with our portfolio in house, including in the cancer fields being the world leaders in cell therapy today. but we have more than 14 late-stage trials in many different types of cancer. breast cancer and lung cancer are two of our immediate focuses. but when we think about m&a, we could be quite selective at this stage. we also don't have any patent -- any medicines that are susceptible to patent loss between now and the end of the decade which is unique in the industry so we're going to be very selective for things that will complement our portfolio and that is the kind of work wore doing on the m&a front. >> and a broader question. we're talking to a lot of business leaders about the chaos we saw in the house of representatives last few days.

how much, if at all, does that effect the way you think about how your industry and your company will be interacting with washington does that change what you expect to be coming from sort of the political front over the next year or so >> well, we always believe in working in a bipartisan way. let me just say that there is an issue here in the united states with patients paying too much out of their pocket for medicines compared to almost any other country in the world and so we're going too be working with the administrative branch and the legislative branch on things like the inflation reduction act. there are two things about the inflation reduction act that are really important number one, it does very little to help with out of patient costs and secondly it has the potential to discourage innovation in certain diseases patients don't get to choose what disease they're afflicted with and so we're going to be working closely with both the administrative and legislative branch to make sure that the best things go into -- into

action that will be in the interest of patients. >> so does what happened over last few days matter to your industry in terms of the way you interact with washington? >> we always have to be sensitive to how things are happening. but as i said, our focus will be on making sure we are the voice for patients and that sensible legislation is being implemented. we have to pay attention to what is going on in washington and how congress is operating. but that is true and that has been true for decades. >> and in terms of the inflation reduction act, you hearing from companies saying this will change the way they think about drug development and the industry will change maybe deemphasize on pills for cancer, and go for the infused drugs because of the way they could get paid over time is that something that gilead is thinking about. >> gilead is less likely to be impacted because of what we talked about, the youth and diversity of our portfolio but i have significant concerns

relative to, i think unintended consequences of the inflation reduction act. to your int po point, discouraging certain forms of diseases and that could effect underserved communities even more so when we're working strong on health equity and trying to balance that so, yes, and we're committed to working with legislators, with the administration and make sure those -- the worst case scenarios don't happen. >> dan o'day, thank you so much for being our first guest. >> thank you, meg. >> we have more coming up from the jp morgan health care conference including the ceo of bio gen in the next hour. >> a big event and a lot of big names. we look forward to them. when we come back, heather boushey will join us for latest out of washington for the risk of recession we've been hearing about that all morning. and the friday job numbers and so much more and rapper flo rida suing

selsyus for breaching his contract we're going to have an interview with him and his lawyer. you don't want to miss "squawk box" coming back after this now we'll make it up again. ♪ ♪ we'll build freelance teams with more agility. ♪ ♪ the old way of working is deader than me. ♪ ♪ we'll scale up, and we'll scale down ♪ ♪ before you're six feet underground. ♪ ♪ yes, this is how, this is how we work now. ♪

good morning, welcome to the first full trading week of the

year futures pointing higher, after investors cheering friday's jobs report and republicans set to get to work in the house today after a week of dysfunction. kevin mccarthy finally seizing the gavel as house speaker we're going to speak with the top white house economist about prospects for the two parties working together over the next two years or not and the intersection of celebrity and advertising, rapper flo rida will join us as he gets ared to go to court over an energy drink endorsement gone brong. the final hour of "squawk box" begins right now ♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square and i'm joe kernen with becky quick and

andrew ross sorkin and the futures are in the green again. kind of a wait and see tone given the big moves that we saw on friday which ended up making the holiday shortened week, the four-day trading week. first one of the year. last year, a pretty good week. up 700 points on the dow on friday another 100 being added today. one of the big moves that we saw on that employment report was in the yield curve, especially at the shorter end and we'll take a quick look at that and you could see the two-year, 4.27 and the ten-year continues to be below 3.6. so if the markets weren't listening to the fed before, they're either still not listening or didn't learn anything or whatever their thinking, they felt emboldened by the details that was a very good report for a lot of reasons last week

>> that the right. >> jimmy page is 79. happy birthday can you believe, jimmy page is 79. >> seriously >> 79. i don't think -- there is no arthritis in his hand. >> okay. it is a big week ahead for the markets. >> happy birthday. >> mike santoli joins us right now. and mike, we have big things coming up. you have cpi on thursday, and earnings kicking off in earnest and the question is whether the cpi in particular repeats what we saw from the jobs data last week >> exactly, becky. what we saw in the jobs data and also what we saw in the week ism services number which did again confirm the idea that prices have been in decline at the wholesale level. so people leading in the direction of peak inflation and downside momentum there is probably the assumption for the moment we'll see if the day bears that out. we have let the ultimate high of the prior bull market, january

3rd and 4th,that is moved off the one-year chart what you see right now, though still down. [ technical difficulties ] >> you've seen spl outperformance overseas. the dollar peaked at a few months ago at this point and they dent have the valuation, the excessive that we did in our growth stocks and you see some resilience, i guess you would say, in the face

of commodity prices coming down in europe in particular. so some outperformance, maybe that could continue, it is been about 10 or 15 years of u.s. dominance over the rest of the w world. so a long-term chart looks very different. so credit markets sending a signal in the sense there is a huge demand for yield out there. this is the high yield bond etf outperforming the treasury over the past six months or so. a lot of issue aps in corporate debt last week it was swallowed up. there is some novelty effect, you could lock in 4% to 5% and there is positive real yields so all of those things working together keeping things together for the moment, becky. >> all right, mike thank you. we're going to wait and see and we'll see you just a little later. slowing wage inflation in -- in friday's jobs report. renewing some hope that the u.s. could avoid a recession despite historic rate hikes from the fed. joining us now is white house

economi economist heather boushey and across the board a lot of people -- our own rick santoli who is a tough critic as you know, heather, was really thought that was a solid report for a lot of reasons there was good job growth. but also one of the primary concerns of the federal reserve and that is if wage growth were to get out of hand, a wage price inflation, that that could be a problem. did you see some signs of an easy labor market in friday's report >> so friday's report was really quite excellent. i think it was that goldilock place we want to be. we're continuing to see jobs being added across the economy that is good for american families, good for american workers. those jobs are there we saw that unemployment is at 50-year low. and that both 2021 and 2022 were record years of job creation so that is all good news for workers. but at the same time, we've seen

that pace of job creation slow down to a steady pace that is more sustainable when we were trying to come ou of the depths of the pandemic recession, we needed the blockbuster rates of job creation, that $600,000 a month that we were seeing over a year ago, about a year ago. and now it is down to about 223 last month for an average of little under 250,000 over the past few months so that is a more sustainable pace it is exactly what we wanted to see happen in the labor market and then as you noted, joe, on top of this, we're also seen wages start to continue to see wage growth. but in a more sustainable pace so coming down to an annualized rate of 4.6% last month. and with the monthly rate more in line with historical averages so all of that is getting to the kind of labor market that we could sustain over time that is continuing to build on the gains that workers have seen over the past couple of years

>> you see in the fed minutes, heather, they're sticking to their guns and there are some that say not only 5% eventually, but maybe 5.25 or 5.5 on fed funds and that causes some people to think that the fed is not going to rest until it gets unemployment back to somewhere around 4.5% or 5% to ease inflation concerns. is the white house on board with that that, number one, we don't want wages slowing, the white house wants waging growing and we really don't want unemployment rising they're an independent body, the fed, but do you think that the white house at this point is kind of saying, hey guys, guys and gals, be careful >> so here is the thing, joe, as you know and we say this every time we talk about the fed, we do not comment on fed policy and we're focused on the things that we can do and the president makes that very, very clear. he made that clear at a cabinet

meeting last week where he talked to all of the officials and made clear we are focused on the economic policy that the president does have say over and right now one of the most important things that we're doing is focusing on executing on the robust economic blueprint that the president has put in place over the past couple of years. making sure that those bridges are getting built. being very excited that the cost of insulin is coming down to $35 for all of the americans all across the country that need it. making sure that we're executing on the ability of families to get that over 3,000, 3200 tax credit to make their homes more efficient and saving families money and at the same time helping us create the industries and zwjobs in the cla energy sector. >> what do you tell -- what do you tell the president about the likelihood of a recession this year and i know he made some type of comment that, yes, we could see

a mild recession, i think he conceded that. what is the base case for you and the council of economic advisers on whether we do see a recession and what do you forecast it would be at this point? >> no, it is a great question. so right now, looking at the data, from the end of 2022, we do not see indications that we're currently in a recession we saw job gains last month. we continue to see wages increase, but albeit at a slightly slower pace we got upward recisions to the most recent data on gdp and it is faster than many of our economic competitors and inflation is coming down on a monthly level for the past few months we look forward to that data this week. but that, too, is moving in the right direction. we've been able to -- you'll see that progress on gas prices for families around the country, coming down sharply from those peaks last summer, saving f

families lots of money each month at the pump. so combined with that, gives us hope that we are able to find this soft landing that everyone has been talking about but we're getting new data this week. >> heather, an employment question to the degree that the white house is able to campaign/applaud the low unemployment number, should he be and the reason that i ask is i would mimagine that the federal reserve is looking at that unemployment number and saying it may be too low, it may be what is causing inflation. >> so one of things, one of the bright spots when you big into the unemployment report from last week, that unemployment number fell even as people came back into the labor force, or joined the labor force newly and that is a good indication that american workers still see opportunity. but we know that some employers

are still have you goneling to get the right mix of workers so we still need to solve those real world problems. >> do you think that number has to go up before the fed is able to take the foot off the neck of the economy when it comes to the issue of inflation. >> what the fed, the fed's job, is to focus on full employment and price stability and right now of course we all know inflation is too high and that is what they are focused on. but, you know, they have made clear time and time again that they understand both parts of their mandate and when we looking at jobs report, i think one of the key things that we wanted to see, we want to see continued wage gains and the pace more in line with what the economy could bear and i think there was good news. and the fed is focused on inflation. that is their job. that is where their focused an the administration is focused on so many other parts of the economic agenda. >> heather, we just had daniel o'day on from gilead, the ceo there and one of the concerns he

brought up for this year, he's speaking at the jp morgan health care conference in san francisco, setting the tone for what they're discussing there. one of big issues that he brought up was the caps that exist in the inflation reduction act for drug prices and what that could potentially mean. his point was that the united states is one of the few places, few countries where patients are expected to pay so much out of pocket and worries that some of the caps could lead to real caps on innovation as well. i realize your speaking from the economic per spect tspective, wd be done about that and some of the concerns that could come out. >> well, you know, the point of that part of the legislation was to really make sure that we are giving families that breathing room that they need. and making sure that the prices of prosecutor drugs are not increasing wildly out of control or faster than the face of inflation. and so, or what they feed to be. and so that is a big part of

what that piece of the legislation is doing it is making sure that drug prices are fair and reasonable we know that this is a sector of the economy where there are issues around market structure and competition, where you've seen a lot of profits in that sector we need to make sure that the gains are shared with worker and their families drugs are so important to family economic well being because it is about health and making sure that the prices that families pay are affordable and fair is core to that we do not believe that this is going to dampen innovation and there has been so much investment that the administration has been making across different fields to spur and to heighten economic innovation that this is a place where i think we are really focused on making sure that families are paying fair prices. >> had some success with energy. we have to go, heather, next time we'll talk about investments in clean energy. i'm wondering if the view point has changed at all on fossil fuels, whether things will loosen up there and what we do

with the spr at levels like this we got lucky with europe the weather hasn't been bad but we don't want that to happen when you came out, do you see all of the guys behind you it looks like they were playing corn hole to me. >> they removed a man hole i asked. >> oh, becky already asked >> i can't see what is behind me i'm only looking forward >> i asked her as soon as we saw it >> i saw a guy look pretty good -- are you good at that >> heather, thank you. >> we'll see you and then they turn around and left >> careful walking back. >> don't fall in the man hole. >> it is a human hole. >> former federal reserve board nominee judy shelton is going to join us ahead of another big week of inflation and we'll talk to her before it and next an interview of the ceo of bio gen

off the fast track approval of a new alzheimer's drug it is an important conversation. don't go anywhere. you're watching "squawk box" and this is cnbc ward. so you can enjoy more of...this. this is the planning effect.

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executives at jp morgan health care conference in san francisco. and meg tirrell joins us now with another special guest hey, meg >> hey, joe. that special guest is the new ceo of bio gen chris v bacher. thank you for being with us. two months into the new job, off the heels of this approval on friday of your new alzheimer's drug let's start with taking the job. you were the ceo of sante fe, and you does some venture type stuff in boston. why bio gen now. >> it is great to be with you, meg. bio gen is one of the founding companies of our industry. in fact it was probably one of the first companies presenting here over 40 years ago it has had some great people and great products, provided a lot of talent and inspiration i think to the industry which has now grown so amazingly so, it's had a few challenges in the past and we need to get it back on a growth track so it just felt like it was a great company to come work with

and it is actually a lot of fun being become with the team. >> so tell us about that strategy to get back on the growth track you haven't laid out the specifically strategy but how are you looking at it in broad strokes? >> well i think there is a lot of things underestimated at bio gen. we have two great products to launch we just had the approval on prove, we have a novel new a antidepressant and so that is already exciting because i think both of those products will be quite significant. there is a pipeline. there is a couple of products that i'm really interested in. i think there is actually more that we could get out of the existing product portfolio cost base probably also is a lever for growth for us. because it is probably, there is some things that we could do there. and then we have the capital to perhaps do some external growth. >> a lot of questions to dig

into there but i have to start by asking you about the alzheimer's drug it doesn't have coverage for medicare, which is important for people with alzheimer's. what is your expectation for the timing of when cms might change its decision on that >> well i think right now, according to the guidance, they'll be looking for full approval so, they just filed for full approval on friday evening and then we don't know how long the fda will take to do that so somewhere, i think, probably towards the latter half of this year the product will be reimbursed there are some patients who have commercial insurance and so the companies will be at least making the product available immediately. but sales will take off once we get the cms approval. >> so latter half of this year, cms. so that is sooner than we have -- we had scott gottlieb saying it could be 2025.

>> well, you know, who knows if we get the approval, the data have been extremely compelling when you think dr. alzheimer's found these plaques over a hundred years ago and it has taken us the century the bern fit of removing that on cognitive function. >> and the first drug was adieuhelm and everything went wrong after that are you still investing behind that drug. does that make sense to keep investing in. >> we have a regulatory requirement to do trials and they are ongoing our focus is now shifting to lekemby. and you have the 50/50 profit share and how that breaking down >> woo we've been working together for over eight years. we have collected literally spent billions of these two

programs i've known hero knitto for many years and i think we have a lot of mutual respect and we have shared values. what combined this partnership is our commitment to fighting alzheimer's and i think alzheimer's is an underestimated disease when i hear well maybe it is a little memory loss it is a devastating fatal disease and, you know, this is our -- the first time we've actually seen a product that has demonstrated a benefit. >> they announced the price of around $26,000 a year on average per patient. are you expecting pushback to that it is lower than where you ended up with aduhelm. >> i think the real thing to fo focus on is where is the benefit of the product and a lot gets focused on this 27% which was this cognitive score one of the things that i don't think get talked about, there was a part of the study that looked at activities of daily

life and then we saw a 37% increase there are something like 16 million people who are caregivers, many of them family members. a lot of them have to give up their jobs to take care of a loved one. it is devastating also for the family members i have a friend actually whose husband died recently and she was saying it was so hard because he was there, physically, but he was gone. and so this is a huge societal burden and i think we have to say this could start to make a difference now i think they'll be other new medicines coming along i think we are with alzheimer's about where we were with oncology 30 years ago. so, but, ten years ago when i was at sante fe, i said until we understand the underlying biology of the disease, i couldn't see spending a lot. so this is the first time we've had an answer to one of the puzzles. and i think it could make quite a difference

and that is i think the perspective one has to take with them. >> thank you so much for being with us this morning we look forward to more conversations as you continue your time as ceo >> great to he soo you. >> guys, back to you we have more coming up today from jp morgan including the ceo of merck andrew. >> meg, thank you for that and as you said, another big interview coming up later today from the ceo of merck. when we come back, we have an exclusive interview with rapper and pop artist flo rida on his lawsuit against energy drink company celsius. which he endorsed since 2014 >> we just finished at wimbley what is up, my man can't go without celsius healthy energy, baby even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do. getrefunds.com

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welcome back to "squawk box. rapper and pop artist flo rida suing energy drink company celsius for allegedly breaching an endorsement contract and not delivering compensation, he said he was entitled to once the company hit certain financial benchmarks in a statement to cnbc, they said they enjoyed working with flo rida years ago and wishes him the best and disappointing he's participating in this litigation we take our relationships and obligations seriously and look forward to vigorously presenting our defense in court today the company is now worth more than $7 billion flo rida joins us now along with

his attorney john ustall it is nice to see you this morning. tell us how this relationship came about and what is now at stake? >> well this started back in 2014 i was asked to be the brand ambassador to celsius. i mean, this was a young company. out of the state of flo rida and thrive on health since being in ninth grade, all i did was love fitness and knowing that health is really wealth. so i was in this thing for the long haul and basically when it came down to getting compensating, it was a time when the pandemic when i got a chance to sit back and check out all of my business and this one in particular, i checked it out, they were telling me that one of the products that i was endorsing wasn't selling and then i got a chance to really look at the numbers and i was doing more than well so i mean, basically their poaching me i was doing a fitness dvd out in l.a. and the product represented what i represent healthy lifestyle and

this is basically the ome one and i said i think i could do something with this because everything that i ever touched, being when it comes down to music, i was the first to introduce the world to lady gaga with star struck i introduced a lady who is well-known by the name of sia. did he her first record. i did kesha, who she was on my record i introduced people for the first time and they became very successful so, taking product, i knew that something that represented me and was parallel to what i believe in, i knew i could make it very successful and i was in this thing for the long haul. >> it looks like from the complaint that you've made that that they were supposed to issue you bonus compensation once they achieved a specific dollar amount in terms of the gross cumulative onthe co-brand itself when did that happenand how much are you seeking at this point? >> it's, man, i was once told, just joining the company and

seeing how my success was and then taking the product that could be very disruptive, that this would he about a product that could possibly make me a billionaire because this product, you know, has done over tens and tens of millions of dollars since i joined the company. i'm talking about the likes of doda cat and you have kim kardashian saying i like that drink and i knew that you represented a healthy lifestyle. i want to test the drink out so sent her some cases she did this thing for free. i'm talking about an international star so i'm the reason why you see this product in dubai. i'm the reason why you see this product in asia. i'm the reason why you see this product in 7-eleven. those people that came to my shows and they've seen the passion and believed in, if flo

is going to touch, when i see that he's going all the way, with this, i mean -- >> right >> and if you want -- >> you want to talk specific numbers. >> how much money is at stake and also have they entertained settlement talks with you? what is the state of play here >> so, look, you have to understand the stock was -- the company stock was a dollar or less when flo got involved it was a local company here in miami. he was already an international icon this is a small local company. he believes in this product. the stock has now on some days over $100 and there are 750,000 shares at stake. so there is a lot of money at stake in this $75 million. and so the question is, yeah, where the benchmarks met and you have this small local company that is now a billion dollar company and, you know, evidence shows that it is flo rida was a critical part of

that. >> john, from what i've read on this, it sounds like the contract had some ambiguities in it that it was maybe not tightly written. that is the case and is that where you plan on to focus on this lawsuit. >> so the judge has ruled that there is some ambiguities in the contract other wise the judge would have just decided, it means this or either the bench mark was met or not. but there are some things that we think are clear and celsius things are clear too the people running the show now. the people flo worked with are gone they were family in his mind but a lot of these people are gone so the people now they think it is clear, so the judge said it is ambiguous but you have to sell a certain amount of units. what is a unit and some of the clauses don't have deadlines so they say well there is a deadline even though it doesn't say it so those are the issues that the jury will have to decide and we look forward to hearing what the jury said. >> and i guess that is the

biggest issue. you cut a deal with the people you trust and those people are gone >> yes and my thing is, i shared my likeness, there is videos out there with me with pit bull, and the green video i'm showing a product that i took on aspy own. this was my baby i birthed this product so i had no -- it was all in good faith that in the long run, you know, i would be compensated and get my -- what i was well deserved of. this video, if you know the likes of maluma, hundreds of millions of views and the product is in there. so, i mean, at this point, if i was to give anyone advice, and it could just like what president ronald reagan once said, trust but verify that is what you should always do but i'm very well, you know, um, i've always been a fan of the product. still a fan of the product i represent a healthy lifestyle.

you go to my shows, my fans, sometimes they're drinking because i'm drinking it on stage andthings like that. and this is the thing. >> flo, i know, are you still drinking the product on stage? >> i ask only because i knew there was a product that was named after you. this is flo fusion they now changed it -- it was on the go and now they're just calling it on the go. >> yeah. they're just calling it an owe the go and this is quite sad that you trust someone that is family and you look for things to -- you look to be honest, you look to be trustworthy, and you know, it boils down to this but like you said, i'm still excited. i love the product and i look forward to, you know, i'm going to be a person of faith and i trust in god and i know god will definitely bless me with what i deserve. >> flo, we appreciate you joining us we appreciate you joining us what were you going to say.

>> i saw him drinking it yesterday. he loved the product. >> yes. >> we look forward to following your progress in all of this and come on back thanks. >> thank you so much >> you bet when we return, former federal reserve ward nominee judy shelton will join us with her take on u.s. inflation after an encouraging wnuer iage mbn friday's job report. "squawk box" will be right back. (woman 2) you know it's from the most reliable 5g network in america? (vo) when it comes to your business, not all bars are created equal. so switch to verizon business unlimited today. (voya mnemonic.) there are some things that go better...together. burger and fries...soup and salad. thank you! like your workplace benefits and retirement savings. with voya, considering all your financial choices together... can help you make smarter decisions. for a more confident financial future. hey, a tandem bicycle. can't do that by yourself.

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markets rallied on friday after the december jobs report showed evidence of slowing wage inflation. let's talk about what that could mean for the feds calculations, considering how much the slower stop rate hikes. joining us now, judy shelton, a former federal reserve board nominee and a senior fellow at the independent institute. judy, you say inflation is coming down not because of the fed's efforts but in spite of the fed's efforts. >> i really think so the feds plan is to raise unemployment and that is how they would intend to fight inflation. but what we're seeing from the numbers is in spite of their effort to raise interest to a level restrictively to curtail

economic growth, we're getting some growth, and we're seeing that unemployment is remaining not only at record low levels, lowest in 50 years, but we're even seeing the participation rate and if you think of it, i always thought that the solution to inflation is going to come from the supply side. so the fed is only focused on reducing demand. but if it weren't for all of those workers, out there producing the goods, and providing the services, inflation would be much worse. so, i think that in spite of the feds efforts to styme that process, the economy is performing in a way that will help us reduce inflation gratg -- gradually, as the excessive savings through covid could result in a portfolio increases, that plays out >> well the fed is going to get

credit, probably then, judy. and i don't -- gwould it be so bad if we were able to get out of this pickle of inflation coming down and have unemployment stay low. have a very minor recession, if at all and then people would -- should we be chagrinned that the fed gets credit if we have that favorable outcome? >> it really does matter when you have a favorable outcome who gets credit, right that is the famous secret to success. but i think it is very important that we understand cause and effect and if it is happening in spite of fed efforts to curtail growth and increase unemployment, then we have to ask if something fundamental has changed. and that there century this curve tradeoff between inflation and employment because otherwise the federal reserve is going to have a negative impact on financial and economic outcomes and that is

unnecessary. so i think it is not enough to say, oh, inflation is coming down let's attribute that to the fed's action because then you could have a situation where the fed doubles down i mean, the fed's model requires workers to feel reluctant to ask for wage gains, commensurate with inflation the fed plan only works if employees are willing to accept wages lower than what would keep them even with inflation so from an economic point of view, that is a dubious strategy and i think morally it is questionable i don't think a government agency should base its strategy and carry out its plans accordingly and in a way that requires people to get less than they should be compensated because of inflation which they have nothing to do with. that was in the their mistake. so it is important that we learn

from what has happened and not attribute to the fed's actions of a reasonably positive outcome in that inflation does appear to be decreasing. but again, i think maybe by mid this year, we'll see that those savings have been spent on goods and the portfolio gains, that is still -- we don't know how the fed will respond to that i mean, what we're seeing is there is a wealth effect if the market does well, including if the market does well because i think the fed is going to pivot, the fed doesn't really want that because that would encourage more pressure on the demand side and making people feel more at ease and they could spend more so now i see forward guidance is kind of turning into psychological operation. because the fed has engaged in sigh ops with the market because otherwise people might feel too flush and the fed doesn't want

that. >> it is almost a fed short call it is almost a short call. they don't want to -- they've sold a call and don't want to go above a certain level. did you want to -- >> just want to go back to the unemployment question. the same question i asked heather boushey, what unemployment rate has to go up to stop the effects of inflation. >> i thought this was a great question and it is interesting to me because if you look at president biden's website, he is really crowing about this he's saying, we have the lowest unemployment in 50 years and that proves my economic plan is working. but, that means that the fed's plan isn't working because there is no point in having a restrictive interest rate if you're not going to have people kicked out of work so they're willing to accept lower pl wages. and some people are getting job offers within weeks and it is still two to one ratio

so we don't know if they're getting higher wages when they accept those jobs, if it appears that they're willing to take wage gains, 4.6% is what we learned from the december figure, does that mean inflation is at 4.6%, does the market know something that the fed doesn't because the fed is probably hoping to get in the mid s6s in the cpi announcement on thursday or lower and then the market would respond to that. and if the market is positive because they think the fed will ease off, well then that complicated the feds job again from the point of view that the -- the illusion of wealth, if people's 401(k) go up, it might start to put more pressure on demand once again so, it is a very complicated situation that i think we have to ask if we're better off having the fed decide the interest rate, have the small committee determine the cost of capital, versus if we really knew what was the neutral rate

if we knew through supply and demand what the interest rate should be, i think that would go further toward helping the economy adapt to our post covid situation, and maximizing prosperity. >> but i could explain why that will never happen. it is all pretty simple. so if we do self-correct here without any supply side stimulus, any supply side moves that would help, then we'll be okay again then congress will start thinking all right we're going to fix everything, and we're going to make this a more equal society and then they'll spend more money which won't help the problem in the first place because they make it worse and then the fed will enable them to do it but keeping interest rates low like they did the first time and then we'll get inflation again and we're going through it all over again and do it again and again because we're never going to go to what you're asking for, to where market

forces dictate the cost of capital and to where supply side answers and you know, trying to generate jobs, trying to generate wage growth, trying to generate, trying to keep interest rates low so that entrepreneurs could do what they want to do to compete globally we'll never do that. so you just have to accept this and go play golf or something. >> no, wait a minute >> corn hole. >> i thought you had that american optimism. >> i've given up >> never despair >> i want to go to good restaurants here and hang out with all of the people in new york and i can't now >> you're part of the problem, see. you're part of the problem >> i know that. >> you're willingness to play for the service to enjoy life. >> it is bad but this is the way it is going to continue. that is the way it's been, right. >> but i see hope for congress to be talking seriously about sound finances and balancing the

budget it gives many he hope that we could also rethink the way that the monetary system works. because there have been proposals in the past to say are we better off in terms of economic performance when we do have a hands on central bank and when we have markets so addicted to the latest pronouncement by a fed official i think we could do better than what we have now. >> you're right. i'm just devil's advocate. that is what we do andrew, becky, we have to do devil's advocate otherwise we've just be nodding. >> >> good for you >> when we come back, we'll get jim cramer's first take on the trading day and week ahead stay tedun you're watching "squawk box" and this is cnbc what's this, a hospital bill? mm-hmm. for 1,100 bucks? ga-a-a-ap! looks like your wallet may need a sling too. tell me about it. did that goat say "gap"?

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the "new york new york stoc and jim cramer joins us. health care out in california there, i don't know if you have opinions there or you want to get into some of the debate over the jobs numbers on friday and what it means for inflation. >> well, i still think that people want to own health care and want to own it because they still see a slowdown all the research is about a slowdown which is in keeping with the numbers we saw on

friday so i think that where meg is where the best ideas are the company -- i mean i think merck which we all know is good will rally on one more interview. against that, we have a lot of retailers people don't want to own and a lot of -- there's just this plethora of companies led by macy's where people think, this is where you have to get away from because consumers are so weak and we feel that friday's numbers are beginning to impact the analysts cutting what they think is fast growth and recommending what they think is consistent. >> jim, here's the question, we've been debating it all morning. now that these earnings numbers are going to come down and that's what's happening here, is this a good sign meaning have they come down as low as they've come down or is jay powell not finished >> very good sign. i think we're all surprised. i think they'll talk a strong game

i think they can add 25 basis points but i think there's a tremendous -- other than the highest multiple tech, tremendous recognition that we've had so much damage that we could tread water. some people are trying to get ahead of it. micron is up from where it was a couple months. so i mean i think that there is definite opportunity against that, lululemon changes by a penny and gets annihilated. you got to be careful of high multiple and be more aggressive than you like to be. that's perfect exactly what it should be. >> what do you think of the report that salesforce may need to or be planning to do even more job cuts? >> i think that there was a sense that brit taylor is supposed to come in, be more of a successor and integrate the last two in tableau and didn't do it and there are a lot of people who are there who

shouldn't be there a bunch of changes for the people running those divisions and it's time for salesforce to integrate after not integrating. i think that brett really did do some damage because he was not focused. >> this is so interesting. brett taylor, does brett taylor get more credit for what he did as chairman of twitter or does brett taylor get more credit or in your case, in your estimation more credit for what he didn't do, you're arguing, at sales force? >> depends on if you're a salesforce shareholder. >> this is how people think about reputations. >> he did an unbelievable job against elon musk and that's what matters, but salesforce can now reorganize look, there were two gigantic acquisitions, slack and tableau and they have not been integrated they just haven't and there are a lot of people not needed anyone who uses salesforce, you don't need three salespeople so what i think you'll see huge

number of people, there's another 10% that could go. but it still has the highest growth that's an example of what has to happen if you're going to be in enterprise software in tech and most companies have not bit the bullet meta has, and salesforce has that's very significant. i think salesforce is a buy. >> jim, we'll see you in just a couple minutes. >> i think this is the question is if you want your ceo to be chairman on a board anywhere because if things run into trouble, i mean, you want -- >> and do you brand it as a function of distraction elsewhere, right, or is it something else >> i think it would have helped to have 100% focus on the one company rather than the other. irjust -- i wouldn't want my ceo to be chairman of another board. >> right jim, we'll see you in just a couple minutes "squawk" returns after this.

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a little more than 30 minutes to go till the opening bell joining us on the markets is j.j. kinahan here we go we're looking pretty optimistic after a strong gain on friday. big numbers this morning ahead of the open. but there are still questions

about what's going to happen with inflation, that's going to happen with the fed and what's going to happen with earnings and probably get answers to some of those this week >> well, i think we'll get a lot of answers this week and most importantly i think, friday, becky, after the cpi we'll get a look at those who have insight into the world and what they see in terms of slowdown and potential opportunities so i think as we see the bank earnings coming out friday, the best thing about the earnings to me will be what the ceos say afterwards for the rest of the year and how do they see interest rates playing out because, again, i think they have as good as ink sights as anybody. the encouraging thing to see from last week, becky, is that we started to see our clients come back this a more bullish tone and we have talked about how retail clients have been a lot more index based or etfs

based. last week we started to see apple with a definite bullish tint to the buying so, you know, and microsoft, those two are really important the interesting thing people still aren't fully convinced because tesla we zhu a lot shorter holding period almost exactly even on buys and sells which tells me people still aren't sure what to do as far as individual stocks because that's such a confidence barometer. >> jj, the action you watch, is this traditional something that's lagging, leading indicator, how often does it turn out to be right in terms of being predictive >> i think, you know, it's been very right over the last couple of years to be quite honest. now, that said, of course, a lot of that part was in a bullish market over the last six to nine months, it hasn't been bad what we have seen is that the pace of buying, again, retail clients are going to be a little to the buy side overall because of i.r.a. accounts, et cetera,

but the delta of what they buy will start to slow down when people get nervous, et cetera, so this is -- you know, a time when we started to see a bit of a jump more than we've seen over the last couple of months. >> jj, thank you always great to see you. >> great to see you, becky folk, that's it for us today. right now time for "squawk on the street." good monday morning, i'm carl quint that nia with jim cramer and david faber back. stocks continue to try to break out of this range. retail guidance, a key health care conference. road map begins with stocks looking to build on that the big rally friday >> plus, shares of lululemon sinking. retail lowered holiday gross