cpi report before the fed's next meeting. we'll tell you what you may expect for the reading today it is thursday, january 12th, 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. let's look at futures. we are higher at the moment. the dow up five points s&p is down a point. nasdaq down 11 points. nasdaq yesterday was up along with the major averages. nasdaq up four days in a row

that is the first time since september. all averages closed above the 50-day moving averages that is good news for what we have seen for the start of the year everything is waiting to see what happens with the inflation number we are getting at 8:30 today. the cpi. if it is negative, as some are anticipating, that would be big news if not, we will see. things are holding steady. if you look at the treasury, the 10-year treasury yield is 3.52%. andrew. we are watching shares of tesla this morning here is what is happening. bloomberg report out in the last hour says expansion of the plant in shanghai has been delayed tesla calls for work to begin mid-year to double the capacity of the plant to 2 million cars per year the report saying the chinese officials are concerned about the connections to the starlink

which could bypass the computer systems. the octopus that is elon musk's enterprises are complicating things. >> had thithis is what a lot of companies are doing. looking to diversify with china. what we were talking about yesterday with the idea of not being so reliant coming from china. >> you mean in terms of -- yes this is using the spacex piece to facilitate the internet of the cars which is something you think he would want from an integration perspective. i don't know how much of that is to get away from china elon wants to get into china more >> the combination of thomas edison and ben franklin and you -- that is amazing what you just said

>> right it touches everything. >> amazing it's amazing i was talking about the boring company. is it true you want a boring tunnel in davos to get back and forth quickly? as davos man, it is a lot of traffic. >> build a tunnel under the promenade. >> you could get up at 5:48. >> i would love that as you now, the boring company has not necessarily had as much success as we want >> wouldn't it be easier to put up an individual satellite from your st. croix space beam it in here. >> i'm thinking about that now maybe mickey mouse would be

beamed in. disney in a proxy fight with nelson peltz after his fund took an $800 million stake in the company. trying to confirm a nomination to the disney board. disney appointed mark parker and forming a new succession planning committee for bob iger's departure a lot going on here. the first is when was nelson peltz in the stock how much did disney know how much did that precipitate the bob chapek and bob iger move and nelson peltz has been on a number of boards with success. you may say put him on the board. >> he has been opposed to bob iger reinstated. >> what is that about? i'm not sure at the time -- i don't know if he was opposed or

just not -- just supportive of bob chapek anyway, i don't know susan arnold in the job for 15 years. she gets pushed out. they say it is because she had the job for 15 years and they have a lifetime tenure the flip side is bob iger will have been on the board for 20 years. >> i looked at this from the perspective of nike. i would not be pleased to have my ceo and chairman of the board that will go through a proxy battle and messy one at that >> very good point >> i don't know. i don't understand i don't have time to volunteer as the assistant mother or room mom for any of my kids classes because of what i do think about the ceo. i think about how crazy my life

is how could you have time? >> that comes back to the salesforce and twitter situation we talked about yesterday. >> and if he can navigate china for one, he can navigate it for the other. important place for both companies. and the next story, also, he can do something for starbucks as well >> right we are going to talk about the disney story with the man behind the disney war. he will have to write a book jim cramer cramer jim stewart. new york times columnist "disney war" author. "den of thieves. >> this next story reminds me of the eight minute abs you can't get -- >> i don't know why we are not doing more with tim ferris here before work. >> he is saying they are begging

them to come back for three. >> he begged them on air. >> come in for three who is in charge here? are employees really that -- >> first of all, not the store or baristas. the white collar workers. >> this is me. waiting for you. starbucks ceo howard schultz told employees to come back three days a week. this comes days after bob iger told disney employees they would come back four days a week we are talking in private what we will demand i'm not sure what we decided two and a half is that good for you on wednesday, we work until 7:30 does that sound good in a memora to staff, schultz si

that badging data showed employees had been complying with the request last september to work from the office 1 to 2 days a week. they weren't able to show up for that you wonder why we have problems in this country. schultz said the three-day in-office policy is to rebuild our connection with each other and singync teams and efforts. >> this is for commuting distance in the office i didn't get that. it is a little unruly when you make the request and people don't follow the one to two days a week. >> are there really zero sales tax in florida thinking about us. >> what about new hampshire? >> either way. we could come in once a week drive down from new hampshire. and stay up there.

>> why don't we do florida in the winters. new hampshire in the summers how do you feel? >> i have to correct myself. mark parker is not the ceo of mik nike he is the executive chairman that is different than ceo >> right >> mr. donohogue. we get you ready for the cpi data that is coming up next do we look forward to this number with anticipation, trepidation, excitement or nervo nervousness? all of those emotions. >> we talked about this this morning. if it comes in and it is weaker, hallelujah >> how much have we already paid that forward four straight days in the nasdaq better start to the year than we

have seen in recent years. programming note of the delta airlines ceo ed bastian will join us to talk about the results in the cnbc exclusive. wait until you see who we have next week. we will would be a world away. lots of ceos you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most. the hiring process used to be the death of me. but with upwork...

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countdown is on. the government's latest inflation data due at 8:30 a.m. eastern. polled forecasters show a decline of .10 of 1% for headline cpi consumer prices are still expected to show 6.5%. that's the benchmark that we're looking for in terms of expectations above this last year in december this is the final cpi report before the fed decision. let's look at the markets today. joining us now is the head of morgan stanley and chief economist of stifel. mira, you are perplexed like all

of us. there is bad news in the markets already. since the markets discount better than the rest of us over what will happen in the future, the markets are discounting something. is it a soft landing is it no recession at all? is it set up for if there were a bad recession, that is not in the markets right snow? >> the market is not set up for severe recession the consensus is recession in 2023 likely something a bit milder. i'm not sure that is fully priced in yet. i also don't think the upside surprise of a soft landing is what is in the cards what we're likely to see is as we progress to the year and we continue to see weakening on economic growth, some further slump in the markets what we tend to see is markets bottom before the worst of the economic trough before earnings and labor market hits the most

challenging period we expect markets move lower here depending on the economy laying out, it is not priced for the upside of a soft landing >> if there is one thing you could know about the next 12 months, would it be economic growth or lack thereof is that what you like to know to make decisions in a portfolio? >> if i had a wish list of one thing to know for the rest of the year is inflation. i don't think it will be that hard for inflation to move from 7% to 4% we could probably get to a 4% year over year headline number by this summer the challenge is how does that number move from 4% closer to the fed's 2% target? that will govern rates we do think the fed will pause at 5%. we want inflation to come down and if we don't get to the 2%

target, but stays within a lower range. inflation will dictate what the fed does >> lindsey, what do you have a higher degree of confidence? economic or inflation? what can you help meera with >> as we have seen, the market and fed underestimated the sticky prices. we will continue the downward trajectory in terms of headline costs. a lot of the improvement we have seen has been concentrated in energy costs particularly. that is reflected in the report this morning when we move outside energy and look at key components like food and housing, here prices are continuing to rise again, complicating the inflation picture for the fed. when we strip out food and energy and just look at the core

inflation report, we only have two data points of improvement with that annual pace peaking as recently as september. so from the fed perspective, with that as a back drop, and waging elevated 5%, they are focused on staying the course to drive down inflation they made a policy error on the front end and maintained that transitory language and crisis level an accommodation well beyond what was appropriate. they are not about to make a policy error on the back end by taming inflation and retreating policy too soon. >> we will see the demand side of the economy why isn't that a policy mistake? >> remember, the fed is not concerned about overshooting yes, that would be somewhat of a policy mistake in terms of being able to thread the needle perfectly. when we look at the consequences for the economy, overshooting the fed can control and retreat

back to a neutral level. if they do not raise rates enough and allow inflation to become entrenched, that can have more dire consequences for growth by allowing inflation to become embedded into the economy. >> it sounds like you are comfortable with sophie's choice 5% to 5.5% to 6% unemployment. all of you people who lost your jobs, thanks for taking one for the team. >> the fed said it would be painful. they have been clear about that. they are willing to inflict that level of pain in order to offset the longer term potential gain of getting inflation under control. >> so meera, you think the markets react better to what getting inflation under control or making the landing as soft as possible >> i think getting inflation under control is the key here. the uncertainty over growth and

if we have a soft landing and we continue to have the conversation for the last year then recession is in the horizon and you can price that in with forward looking indicators we want to see more projected decline and closer to the 2% target. >> as long as we don't break anything. >> things might break along the way. to reiterate the pain the fed has forecasted for the future. it is not necessarily reflected in the forecast. the way they have been talking about the future of the economy that we could experience they are taking that into account. that economic pain might be a byproduct of what we see to see inflation come down in a more meaningful way. >> it really is tough love it is easy for us to talk about that it's crazy it is a sophie's choice. meera and lindsey, thank you

when we come back, the tech taking a toll on the california tax revenue. robert frank has that story next. and jim stewart will talk about the proxy battle at disney "squawk box" will be right back. designed to help you keep more of what you earn. this is the planning effect.

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the state of california is going from the financial surplus to a projected deficit the tech wreck is likely to blame. robert frank has more details. robert, good morning >> reporter: good morning, becky. last year, california had a $100

billion surplus budget and now expecting a $20 billion deficit for the next fiscal year the reason is tech stocks. half of california income taxes are paid by the top 1% much of that is capital gains in tech ipo and stock sales and option grants revenue expected to fall from $31 billion last physfiscal yeao $16 billion. 15 companies went public which was down 200 in the previous year layoffs at salesforce and meta and twitter and other tech companies hitting the payroll tax collections. end of covid and hiring programs

and anthe gubudget approval fory is the issue becky, this is the consequence of the two states, california and new york, dependent on the highest earners being the volatile income stream when we see a turn around, that quickly affects their fiscal picture. >> robert, a huge part is budgets that anticipate the good days will be there for eever new york city, at least, budgeted as if that money would be around forever. >> exactly california did something smarter than new york that back in 2014 under jerry brown, they created a rainy day fund for this situation. the good news for california is they have about $25 billion in that rainy day fund to help out. the problem is the legislature wants to spend that.

now they spent the last three years building it and they want to fund the programs and that would wipe it out. new york would think about something similar. >> robert, thank you robert frank coming up when we return, nelson peltz storming the magic kingdom. trying waging a proxy battle with disney we talk about it with jim stewart next. as we head to break, look at the s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected

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good morning welcome back to "squawk box. we are live from the nasdaq market site in times we are awaiting a big number from the cpi out in two hours

time the nasdaq is down by 11 this is after the big gains for the markets yesterday. nasdaq has been up four days in a row. t-mobile is considering the acquisition of mint mobile that is backed by ryan reynolds. that is according to bloomberg that reports that the carriers have been in talks, but no final decision has been made reynolds owns a quarter of the company. take a look at t-mobile shares up 20 cents this morning. sandwich chain subway is exploring the sale of the company. the deal could value subway at $10 billion. the company has been owned by the two founding families for five decades it has 21,000 u.s. locations which makes it the biggest restaurant chain in the united

states taiwan semiconductor bracing for a downturn despite profits a 78% jump in the fourth quarter in sales, but expect sales to slow with revenue falling as much as 5% in the first quarter. despite the concerns, the company ceo believes the semiconductor cycle will bottom in the first half of the year before returning to a slight growth year. let's talk about this fight with disney. facing a proxy fight from nelson peltz pushing for a seat on the board. disney is opposed to the board appointing mark parker as the chairman i have jim stewart here with us.

jim, what do you make of what is happening? are you surprised that disney is pushing back >> this is an extraordinary development. it is worth noting as i wrote in "disney war" that it was by the disney family. you have an outsider investor wh with an impressive track record and wanting internal data on the company and wants on the board i'm not surprised they are pushing back particularly at the time with the transition going on and iger just returned and disaster with the previous chief executive. i think the issue will be is where does he go now he has been rebuffed by the board. will he set up a campaign? he is putting the pieces in place. this means this will not go

away we are in round one. >> we were talking earlier how much does nelson peltz like or dislike bob iger? >> he said he doesn't want to replace iger he also said he wants to, you know, strictly limit iger to the two-year contract that he just entered into when he agreed to come back. i would say that is not exactly a vote of confidence there is a lot of skepticism that iger can right the ship at disney after what has gone on the last couple years and find a successor. a task which, you know, should point out is the board's job to find the successor he will play a role. they failed in the recent past iger -- >> lay it out. i don't think i heard it fully

articulated the nelson peltz plan for disney? >> all i know he has said is primarily they need to cut costs and get more profitability he wants to restore the dividend he wants to limit iger to the two years he has left. you know, cut costs. iger said himself he needs to cut cost $1.45 billion loss in streaming is not sustainable obviously cost cutting at disney in the creative industry at this juncture in the streaming wars will be very hard. the long-term strategy was to spend and achieve dominance in the streaming world and raise prices you are not going to secure a dominant position if you cut too much in spending sure, some can be cut. iger will no doubt cut

serious cuts enough to restore a dividend at this moment will be very challenging peltz has not outlined any detailed knowledge of the entertainment industry or streaming world or where he would target those cuts. >> jim, if there is a proxy battle, how much does that complicate what is already a tricky job of trying to come back in and handle some big problems and change in the way that wall street values streaming? >> it is enormously complicated. i mean, from iger's perspective, the last thing he needs is an active shareholder breathing down his neck and demanding changes and let alone a shareholder battle you know, disney shareholder base is bound to be restless the stock performance has been terrible the last quarterly earnings report shocked investors

the market has turned and the sentiment has turned with dizzying speed focusing on only how many subscribers do you have to profits. what is the average revenue per subscriber and where are the profits coming from? that is the recent change. that is more than enough to have to worry about without having somebody, as i said, meddling from the outside >> what do you make of the mark parker ascension departure of susan arnold? the 15-year tenure limit that she was up against there were others that mentioned that bob iger has been on the board 20 years collectively. is she being held responsible for decisions made earlier she was a supporter, i believe, for some period of time according to reports about bob chapek over bob iger it sounds like mark was less a

fan just like mary barra depends who you listen to. >> the board gets a failing grade on the question of succession that is a significant responsibility what do boards really do the choice of the chief executive is the most important function not only did they have to get rid of chapek, but bear in mind it was a few months ago that the board led by arnold entered into another three-year contract with them the board never really explained what changed in that period of time in their thinking to take a drastic action nor have they ever really explained why chapek was selected in the first place. that still remains a mystery it seemed abrupt how well did they know chapek? what emerged we never got an explanation.

i personal would like to see the board address those issues i hope parker will be more transparent as they go through a search for iger's successor. >> jim, you were involved in a number of campaigns over the years. some of those including nelson peltz. he joined many boards including to be successful with him on it. sometimes a result of him being on it and others by coincidence. others have not worked out as well when you think about all of the challenges at play and issues with disney, do you think he can help them? do you think it would be helpful for him to be on the board >> i'm not sure. his specialty is management efficiency he is not known for major restructuring. i'm not sure -- he hasn't said anything about selling espn. entertainment industry will be a

challenge for him. i haven't seen anything he said so far or in his background which is really unique business which i don't know he has any particular expertise in. >> jim, the proxy is out now they filed the proxy i'm reading through it now apparently in the background to the solicitation where you are going through it, he has been in this for a while nelson met with bob chapek on july 11th. he talked about the long-term interest in disney and working with companies they had conversations in july and on or about november 8th he call ced chapek. in december, when iger came in, he said he could not speak to him without talking to

gutierrez. they looked to communicate this has been back and forth for a long time. this is not necessarily a new position or something that nelson is just doing he sounds frustrated with the back and forth on this he says on november 22nd, he contacted one who informed she was not permitted to speak to mr. peltz. this is a long-time coming the complaints are what you listed the stock under performed on the ten-year basis and one-year basis. going back all on these things it was not a successful situation for a new ceo. not a successful search. this sounds like a long boiling frustration on nelson's part which is why he is seeking a seat on the board. >> that raises the question because i didn't know the timing of it. i suspected whether you believe, jim, when they gave the job to bob iger, they felt pressure

from peltz or others it wasn't they were just unhappy from chapek or thought something else was amiss or a'comin', if you will. >> they would have felt pressure within peltz involvement what was the pressure? what was going back and forth with chapek and peltz? what is the relationship now i have no idea if there is one, if there was a conduit there established, that would be very interesting. >> we need to find out what we need to know is how much bob chapek shared with the board of disney and nelson peltz was in the board. >> on november 15th, they

informed they should not speak further about disney and should speak to the senior executive vice president and chief financial officer of the company. the board must have known. there was back and forth >> christine was the prime mover to get bob iger back into the seat. >> yes, absolutely this is very interesting because why would the board say he should be communicating with the chief financial officer and not the chief executive? there is no obvious answer >> reading through this. this is fascinating. the representatives emphasized the group did not want to engage in a lengthy and costly proxy fight. they supported the agreement of iger returning to the board. they conveyed to iger and other representatives that was not their interest

they wanted a direct board repres representation then things broke down from there. >> remember, the independent was the solution to the dan loeb interest in disney he accepted that they had that template the fact you repeated it is significant. there are a lot of questions here there was a prolonged interaction with the outside investor that led the board to indicate that he could not talk to chapek and talk to the chief financial officer. he was privy to the decision to remove chapek and support iger return all of that is very interesting. something we didn't know before. it makes me wonder, as you pointed out, andrew, how much peltz involvement had to do with the ouster of chapek we never got an answer there. >> that's right. the way it has been presented in

the press is that this was a decision that happened quickly and happened by the board with and happened with christine, if you remember, after that earnings call being so frustrated how it happened and the public upset and that was the trigger. perhaps there was more to it >> and also the creative forces at disney had been grumbling and discontent and about to revolt against chapek this is a different perspective on that decision >> right jim, i told you, there is a sequel here, my friend. >> fascinating story it will be an ongoing fascinating story. >> we have to have you back. look forward to talking to you again. thanks. >> sure. coming up, we will talk more about disney in the next hour with media executive tom rogers.

and nelson peltz will be on "squawk on the disstreet" at 9: a.m. "squawk box" will be right back. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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welcome back, everybody. the new artificial intelligence tool chatgpt is raising questions about the role of ai in education new york city schools are blocking the chat bot concerned

it could turn into the ultimate cheating machine however, there's a new op-ed that's out in "time" magazine arguing the opposite, saying that it should not be banned in schools. joanne litman wrote the article. she's a cnbc contributor joanne, when i first heard about it, i thought the same thing, kids are going to say write my essay for me on x, y and z and it will do the trick why do you think it's not going to be a problem? >> so i had the same initial reaction that you did, i teach a class at yale, and your immediate thought is, oh, my gosh, students can just go and tell it to write their essays. in fact, as you think about it, it really is -- it would a terrible mistake for schools to ban chatgpt. and the reason is, our students are growing up in a world where artificial intelligence is intertwined with absolutely every aspect of their lives and it's only going to get more so

and by ignoring chatgpt, these emerging, it's not going to go away we need to help these students to understand how to use them, what are the perils, what are the flaws, how to use them responsibility because they are going to inherit this world where they're going to be leading the way, and so it's just completely unrealistic. one of the things, becky, that i was really struck by, you mentioned new york wants to ban this technology in schools what i was really struck by is their reasoning was, it's going to hurt critical thinking and problem-solving skills yet, if we're trying to teach critical thinking and problem-solving skills in a vacuum, not in the real world, it's not going to help these students they actually need to understand how to interrogate and understand the flaws and how to use this stuff responsibly.

>> that's a very valid argument. to stay ahead of it, though, as a professor, do you change of what you are asking for students, are you no longer having the students write essays >> chatgpt, if you ask it to write an essay and then you ask it again, it will write two different essays on the same topic. it's hard to check plagiarism. there are guardrails that are coming up in place for example, some teachers are now saying you have to write your essays by hand or you have to write them in class there's a college student who came up with a program that claims to be able to flag it if something has been written by chatgpt, open ai, which owns the technology, has said that they're looking for things to mitigate it. so there are certainly guardrails that we can put in place. but at the same time, i do think it's really important to

understand and for students to understand what the flaws are. there's a lot of flaws -- we know chatgpt is -- has information that is not correct. we know that it can be used to spread misinformation and hate speech students need to understand this stuff and they need to understand where the flaws are so that they can figure out when it comes to their -- >> long term -- joanne, do you see this being used to write entire papers or i think in the shorter term, you're going to see this technology get built in i don't know if you're familiar with grammarly, for example, which a lot of kids use just to have better grammar. it's like a -- it's an improved version of what used to be spell check, if you will, on microsoft word but, you know, if you enter in -- if you bring in the kind of technology that chatgpt has into it, it can actually not just improve the grammar, but can improve a sentence or two at

a time and it seems to me that's where you're going to see it do things that are extraordinary, that are good in certain ways, but bad in other ways because i don't know whether students will learn this stuff. >> andrew, you are picking up on i think the most important point here which is that, ultimately, where these technologies hopefully are leading, is to be a resource, not to be a substitute for learning, but to be a resource, and think about this historically. we have seen hysteria in the past over google when google came out, there were academics saying that students would lose the ability to marshall information when wikipedia came out, it was banned when the personal pocket calculator came out, there were arguments that students would never learn how to use math. what instead has happened is

that all of these tools have turned into exactly that, tools, resources, but not a substitute for learning and chatgpt, if used correctly and rolled out in a responsible way, could turn out to be the same thing by the way, microsoft, you guys have been talking about, obviously, microsoft thinking about an investment in it. if that were to happen, if they were to put their $10 billion into it, you could see down the line some of this functionality being used within word, within outlook and some of the other programs. >> can you do long division, joanne >> i can can you, joe >> i might be able to do that. what if i gave you the square root or something? you definitely can't do -- a derivative or calculus. >> i used to i was a very excellent calculus student. don't ask me -- >> i haven't done it --

>> shows you how important it is in life. i think calculators are fine got to learn how to use a calculator there's buttons you can -- >> we're over. >> joanne, thank you lots to think about. thanks. >> lots more this morning. we're going to talk about nelson peltz big proxy battle at disney girls... the chess club has gained an edge on our bake sales. we need more ways of connecting with customers, fast. i know some consultants with great ideas. can they help us improve our digital experience?

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inflation report with a reading, too hot or too cold? what those could mean for stocks disney on defense as nelson peltz launches the biggest proxy fight in nearly a decade. and new data suggest that is the labor market could be cooling. the second hour of "squawk box" begins right now ♪ good morning welcome back to "squawk box" right here on cnbc we're live in times square i'm andrew ross sorkin along with becky quick and joe kernen. as we talk about the food fight in the -- at disney. we'll talk about it in a second. u.s. equity futures at this hour dow right now up about 27, 28 points nasdaq off about 8 points and you're looking at the s&p 500 up

just about a point treasury yields right now, the ten-year note at 3.524 the two-year sitting at 4.22 oil, right now, wti, cost you about $78.28 and crypto, 18 things are moving. >> from about 16 >> yeah. >> bring it on >> i would even say that that might bottom first we have breaking news from american airlines. phil lebeau joins us with more. >> reporter: american airlines out with new guidance for the fourth quarter, a substantial increase in what it expects to reports next week. take a look at the old guidance and new guidance when i say substantial, check out earnings per share they're expecting to earn $1.12,

$1.17. that's double their guidance and the operating margin, essentially double what the company was previously expecting. now expected to come in 10.25 to 10.5%. strong demand is driving the increased guidance from american airlines we knew they would have strong demand going into the holiday season but that clearly has filtered down to the bottom line. in addition, you've got a company that is dealing with capacity now, down just 6.1% compared to the same quarter of 2019 so they're almost back to the same amount of capacity as prepandemic. take a look at shares of american airlines, it will be reporting its earnings for the fourth quarter next week that's when it will give guidance for 2023. but we want to talk with the ceo. we'll get his perspective on the

new guidance and what he's seeing for 2023. lots to talk to him about. becky, we'll also be talking to him about his thoughts on the fact that the faa outage sort of highlight what is a lot of people in the industry have talked about for a long time, it's a robust system, but it could probably be much more robust lots to talk about with robert isom, that's coming up in the next half-hour. >> some of that might have been suspected that things were going to be better, i guess. it's up a little, up 3%. >> sure. >> we're supposed to ask you, what happened yesterday? did they -- when they rebooted it, did they restart it or unplug it and plug it back in? do you know exactly what happened >> they called the i.t. department and the guy said, i don't know, did you turn it off? turn it on slap the computer. >> i bet we need a hearing, gosh darn it. can we have a hearing? maybe it will be televised on

c-span all our stories are converging. >> could be. everything coming together right there. >> if we can put a man on the moon, we ought to have a state of the art system. it was self-inflicted, but what did they cancel, 1,000 flights or something you get a bad storm -- southwest does something -- how many flights were canceled during southwest, thousands and thousands. and by 9:00, it was over, right? >> it was over but the ripple effects are still being felt something like 400 delays today. i know, you want a hearing you want somebody in washington to say what went wrong >> those can-do guys in congress i want them to get involved. we'll have it fixed by 2300? >> if that's that outdated,

there's not a redundancy factor when there's one corruptive file, how old is this stuff? how does it get fixed? how does it get updated? how do we feel safe about -- if it's that outdated and how quickly can they actually fix it >> becky, all good questions the only thing i would say is, you will hear this from people on both sides of the aisle that there needs to be a more robust system everybody agrees that that should be the case it happens when the faa funding comes around the last time funding came through, i think they approved 97 billion that was spent over a five-year period through 2023. now you have the next round of funding that will come up. everybody will say the exact same thing the question becomes, how is it actually implemented so you are hitting on the key question here, which is the money is going to be there how do we ensure that it actually goes where it needs to go so that this doesn't happen

again. >> as if that ever happens never mind just talking about in general, thinking -- think pandemic, think whatever you want. that's the ultimate question it would be nice to get a dollar in -- a dollar goes to where it's going to do some good instead of 92, 93 cents. >> absolutely. >> i don't think anybody who would argue that. >> you need somebody who is not a political appointee running the faa who can put this to work. >> right look forward to isom, phil, good job. look forward to that. >> it will be a good interview lots to talk about with him. i want to get straight to dom chu with a look at this morning's premarket movers. >> let's start off with a look at streaming content we have shares of netflix on the rise jeffries have upgraded that stock to a buy rating. they have an expectation that

advertising, base subscription tiers and crackdowns on password sharing. spo spotify and roku are both. roku goes to underperform. also spotify goes to a hold rating given some -- what they see as slower recovery in gross profit margins then you got shares of tesla which are down a percent or so premarket. we've got some headlines out of bloomberg to possibly building a production facility in indonesia. elon musk did try to throw a little bit of cold water on that story through a tweet replied to a link on that story on twitter. those shares down about -- flat right now. you have shares of t-mobile saying that the company is

looking to buy mint mobile that's according to people familiar with the matter mint mobile is the wireless carrier that is backed by ryan reynolds shares up 0.1 of 1%. and we'll end with what andrew alluded to earlier, a big focus on disney. peltz has been nominated to disney's board andrew, we do know that there is no intention, at least for right now, from peltz to seek bob iger, the ceo of disney's, ouster replacing him, or a breakup of the company they want to get in there and see if they can help make things better an interesting development there. what you call the food fight and i'm not mentioning that nike executive chairman mark parker is going to be the chairman at disney because he's replacing

susan arnold there's a lot of stuff going on over at disney these days. >> and we're going to continue to discuss it and debate it all morning. thanks, dom. less than 90 minutes to go from the cpi report, a key report that investors are going to be watching steve liesman joins us right now with more. steve, there have been some pretty huge expectations that this number is not going to be hot. >> yeah, it's going to solve all our problems, becky, that's what people are looking for, anyway but the battle here when the fed and the markets, that's what it is, about higher or lower rates. the cpi, the street looking for cpi to decline, and it's unclear how much any of this is going to matter to really move fed officials. down 0.1% on the headline. it had been up 0.1 that's the force of goods prices declining. 6.5% is the expected year over

year down from 7.1 core cpi up 0.3% with the year over year falling to 5.7% as higher rates drop out of the equation here. the key to the reported is going to be the tension between declining fuel and goods prices, still high rents and service inflation, along with rising food prices. close attention is going to be paid to jay powell looking for that part of the equation that is most moved by labor and wages. the fed futures market, two different ways it could react here the january/february meeting trades with a 75% probability of a 25 basis point and a 25% of a 50 a hotter number could turn the pricing towards a 50 a cooler number could mean 25 and it could mean the end of the rate hike cycle. a hotter number could push up

the peak rate back towards five and above. you see that right there on the right part of your chart there, expectations for cuts later this year long commentary from the folks at mizuho. disinflation is under way, but the market will be characterized by disagreement over preferred inflation indicators when and at what levels prices on the goods side are likely to level off, what degree of slack in the labor market is required to see a greater moderation in core services inflation. even after this number, the question is going to remain if the fed is really data-dependent or is it headed towards that 5% rate to stay there whatever the data may say, with its decision to hide at least as much to the jobs market, wage data, as it is the inflation report becky? >> and maybe not being swayed by a few good numbers maybe being concerned what happens if it gets colder, if

energy prices go back up waiting to see how it plays out in wages in particular >> i think that's right, becky i thought -- i don't know when we had a conversation probably six months ago, the fed would need three reports this will be really the third good report, especially when you look at the goods -- or the core side of it if it comes out the way the street is expecting, that year over year rate is coming down. but the fed says it is 5.7%, year over year core rate my goal is 2 i can't be cutting rates here. i still need to be hiking. the question becomes how much it's incorporating, the lagged effects of what it's already done, the balance sheet reduction that has been going on and, of course, just the slowing of the economy that we keep hearing about in a variety of different metrics. >> steve, thank you. okay coming up, we're going to talk more about disney as we said before, gearing up for a boardroom battle with

billionaire nelson pleltz he wants to join disney's board. the board pongopsi the move. "squawk" coming right back

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and now a lot more people can. so let's go. the digital age is waiting. nelson peltz's fund trying

to get him elected to the board. disney is opposing the news. joining us now, tom rogers, former abc cable president, cnbc contributor. it's good to see you i like -- disney said, we shuffle the board frequently, but we like to put someone on the board who actually know something about the media business but nelson peltz knows about other consumer goods companies, if you want to call disney that. could he help? >> well, disney has a boatload of problems. so the idea that it's on the right course right now is obviously easily challenged. nelson peltz has a hell of a track record you're right, not in the media space. i think he and iger agree in certain respects, it was a failed succession plan disney needs to cut costs and

disney lost its way. that's why the board asked iger to come back there really isn't a lot of agreement there. probably is disagreement on the extent of the cost cuts that nelson peltz would look for. probably also agreement on the issue of weathhether the fox de was a bad deal it certainly was it was iger's deal so i'm sure there's contention there i think the issue here is that disney has kind of been kicking the can down on the road on its biggest issues what to do about hulu, what to do about espn, allocation of capital between streaming and the core business. should it just slim down to be a family-oriented company and drive its fly wheel? and bringing iger back, while an important move, isn't necessarily in and of itself the kind of catalyst for change when you have iger himself saying

it's core business, it's on the precipice. who knows when it's going to be pushed off that sounds like a crisis. but disney hasn't been acting as if it's a company in crisis. i'm surprised about the timing i'm sure bob iger will have a lot to say in february about earnings, this move by nelson peltz comes before even hearing that and i think that maybe hearing that would have been a better launch point for this kind of critique, but there's plenty to say about what disney needs to do. >> things must have been pretty bad to bring in a guy who's primary role is going to plan for his succession it's kind of -- it doesn't make sense. in the old days, compensation didn't matter as much when you're killing it with pixar

what you pay for pixar doesn't matter that much when you're killing it afterwards. that's not where they are anymore. maybe you shouldn't overpay no matter how attractive the assets are. it's a different world is iger the right guy at this point to turn things around? or is it a cost-cutting world. a make streaming profitable world, if that is even possible? >> well, you make a good point, joe. i'm sure nelson peltz is looking over at warner brothers discovery and what they're doing there on cost cutting which is much more of a private e equity/everything you can cost he's saying if warner brothers can do this, i might not know the media business, but there seems to be a model for cost cutting and maybe disney should be going down that path. i'm sure bob iger is saying to himself now what i thought when

he first made this announcement, why would a guy with the exit that he had as one of the greatest ceos of all time, especially in the media world, want to come back with so many issues and problems? now that all those problems and all his moves related to it are going to get the kind of public scrutiny, criticism and challenge that a proxy fight involves, he may be asking himself that same question i was asking when he made this move, do i really need to come back? >> what do you think is going on behind the scenes with hulu? is that -- i mean, who has the leverage is the valuation going up just because of this structure, the way that it's shared now is it going to be worth a lot more can one party hold the other one hostage? what finally happens there >> well, this is a major

strategic decision and it's one that everybody has been waiting for resolution it's unclear if it will come before 2024 when the agreement calls for one way or the other for this to be resolved. when i was last on the show, i made a suggestion that to me is still the best playbook here for both comcast, nbc and peacock, as well as disney, which is they have a joint venture neither of them on their own look like they have great answers to the decline of the legacy business in a way that creates a streaming business that will be more profitable than the legacy business, which was one of the greatest business models ever seen and building on the joint venture, rather than dissolving it, going all in and creating a streaming service together that would be far better than what anybody else could create by

putting all their streaming resources together might actually create something that would -- for both of them, exceed the decline that they're both going to suffer on the legacy side. far-fetched a bit, given the strained relationship between the companies, but, hey, it's an extraordinary circumstance and they may go for it >> tom, i agree that that -- i think it's a fascinating idea. i don't know whether the two sides are going to cooperate in that way my question to you is, if it were to be separated, meaning, disney were to sell hulu, how much value is in hulu? the reason i ask is, so much of the content on hulu now is so superintegrated into disney, i can't imagine that they would also be selling fx and all of the sort of disney -- unless you think that comes with it in which case, that might create

its own antitrust problems and then are you talking about buying a platform which becomes a new shell with lots of subscribers and maybe some kind of licensing arrangement for content for some period of time, but then if you're nbc universal comcast, you have to fill that shell over time with not just the peacock stuff, but a whole other set of content >> great play on words i think that you make a great point, hulu, without fx today, which comes from the fox transaction, are very difficult to separate. and i think it would be very difficult for bob iger to sell hulu in part because it was the essential ingredient in the fox deal which got them control of hulu and selling that would certainly be an admission that the entire fox deal was a failed

undertaking. but if they do make that decision, and many think it may be the right decision, you would probably look at disney concentrating on the family disney franchise, its core areas of expertise in children's and family programming, and focus exclusively on the whole fly wheel with the parks, with motion pictures, that really goes to the core of disney and give up the ambition of being a broader general entertainment service chasing netflix and others and that would be a bold decision it would probably be one that would involve an awful lot of additional moves when it comes to espn and sports rights costs which are getting hugely difficult for disney to continue to afford as espn subscriber base declines and there's less ability to advertise the costs over a substantial service

but that may well be the kind of direction that nelson peltz comes up with. he's going to have to come up with clear positions, i think, on a number of these issues, hulu, espn, the family fly wheel, as this goes forward. right now we don't know his views on that. but that -- i don't think a proxy fight solely on cost-cutting and ceo succession is going to convince people that there's real input there that's going to benefit disney -- they're going -- he's going to have to commit himself on some of these other issues. >> very good mr. rogers, thank you. good to have you -- good to see you this morning nelson peltz is going to be on "squawk on the street" at 9:00 a.m. eastern time when we return, american airlines ceo robert isom will join us to talk about the airline's updated guidance and react to yesterday's faa outage

fiasco the futures at this hour, looking up for the dow s&p is up by five points and the nasdaq up by three we're awaiting a number that is just over an hour away, cpi hits at 8:30 eastern time. >> announcer: time now for today's aflac trivia question. if 2005, this internet entrepreneur founded mega upload and in 2012 was charged by the doj for copyright infringement and wire fraud who is he? the answer when cnbc "squawk box" continues looks like your wallet may need a sling too. tell me about it. did that goat say "gap"? he's talking about expenses that health insurance doesn't cover. eh-ehh-eh! well i'm talking about the money aflac pays to help close that gap. aflac, huh? aflac! ga-a-a-ap! aflac! gap... uh-oh! that duck can motor! get help with expenses

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welcome back to "squawk. i went to get over to phil lebeau who joins us with a special guest and an exclusive interview. phil >> robert isom, ceo of american airlines we gave the numbers on the new guidance for the fourth quarter. you're doubling what you were expecting on all the key metrics. what drove the better than expected performance >> really pleased with the guidance today you know, it's been about, what, nine months since we were here and we talked about americans' goals. return to reliability and profitability. certainly we've done some nice work on reliability, especially over the holidays. from a profitability perspective, we've put the planes in the right places in terms of demand, it's been strong throughout the year accelerated in the fourth quarter. and really our beat is revenue-related. >> when you're talking about the fourth quarter, let's talk about the christmas storms

separate from what happened with southwest, for american airlines, you had an impact as well how much did it cost you and what did you learn from earlier in the year that helped you better prepare for what happens happening? >> we can talk about cost more in a couple of weeks -- >> but it did have an impact >> it did have an impact some customers came over to american but the quarter was largely settled by the time we got to the holidays the impact lasted four or nafive days we did a remarkable job that we said, hey, let's set the airline up for recovery. we did that over christmas day we were back faster than anybody else in the industry we had the best completion factor performance and departure performance in the industry and that all came from a lot of -- the learnings during the pandemic and even before that. we've invested in technology to make sure that our crews and our planes, we know where they're at and we can put them back

together and get them back to where they need to be sooner we've done work to make sure our planes are as efficient as they can be all of that led to really nice results. >> let's talk about the outage yesterday. does the faa have the financing and the capability to ensure that its systems are robust and won't fail and this won't happen again? >> first, it's safety. i'm really pleased with the faa in terms of calling a time-out yesterday. we put the ground stop in place. all of the airline ceos and acting administrator nolan were on the phone and we talked about, hey, what's best to do? we've built the largest network in the world and we're really pleased with the safety and we always have to keep that in mind investment is required no doubt and from that perspective, i know from running the airline, the hundreds of millions of

dollars that are required in technology, the same is required, but when we take a look at the investment within the faa, it's something that's -- it's going to be billions of dollars. it's not something that's done overnight. it's something that we have to plan for and build over a number of years. >> but you and i both know, within the airline industry, it has long been a complaint of many people in the industry that not enough is being spent in the key programs and the key areas to ensure that it can be even more robust. >> right. >> is that an accurate complaint? >> you know what, we could always spend more and it takes minds to come together and really look at the future where we wanted to go and that takes leadership and i know with secretary buttigieg and the administration, that we're going to find our way. incidents like this, right, they happen we all know there are computer outages for whatever reason. how we recover and then how we learn from that is absolutely the key. >> you're going to give guidance for 2023 when you report your financials in a couple of weeks.

broadly speaking, how strong do you expect this year to be fourth quarter is really strong. we've only had a couple of weeks here of bookings in 2023 but we like what we see. and that portends for the future, i think a strong 2023. and for us at american, we're on the downside of the investment cycle -- >> you got the tail wind >> so we're entering a period where profitability means free cash flow. profitability means we can deleverage you saw that we paid off some debt, some term loans, $1.2 billion that kind of effort to reduce debt and achieve our goals of reducing, you know, debt by $15 billion by 2025, we're 50% of the way through our target and in just a short period of time, i'm pleased with where we're headed. >> becky, has a question for you, becky go ahead. >> going back to the shutdown yesterday with the faa's systems, i mean, how big of a deal is this is this really outdated technology what does it require to fix

this i remember going back over a decade and hearing from airline ceos who were concerned about the quality of the faa's systems, how up to date they were, how up to date they weren't, how much needed to be invested, more money coming from the government what's your take on it just from your perspective >> becky, i think that we're talking about billions of dollars ultimately to address all the needs that we have, whether it's an air space or, you know, just in antiquated systems. but i'll go back to -- we've built with the faa the most reliable, safest airline environment in the history of the world. we have to make sure that we take measured steps to address any issues because we're talking about safety and confidence factors, 99.9 to the fifth and sixth decimal point. we have to make sure that what we do is as reliable and safe as we've ever been. and to that extent, it's going to take time and it's going to take people coming together to

really chart out the future. not for a year or two or three years, but really making sure that we have a five, ten-year plan out into the future >> separate questions which goes to maybe bill of rights for customers in the u.s. versus bill of rights for customers in europe they differ meaningfully i'm curious how you actually think about that in terms of the benefits for consumers, the forcing mechanisms that some of those bills of rights in europe may produce or not as we're sort of seeing a lot of these types of issues playing out or problem issues play out for customers. >> hey, andrew so for us, it's really about running the most reliable airline that we can. we have to take care of your customers. the rest of the company is taking care of another half million customers. taking care of customers is the first priority in terms of making sure that

when disruptions happening and the vast majority of disruptions, they happen for things like we saw over the holidays when you had unprecedented storms and there's always maintenance issues that we have to account for as well on those types of things, when it's our responsibility and we don't recover the way we should, we owe the customers and that's something that you know we work with the administration on. i think that we have a program in place right now where we can take care of customers, but it's always incumbent on the airlines and here at american airlines to do our best. because at the end of the day, that's how you build loyalty at the end of the day that's how you're more efficient. and i think it's better for the company overall to run a really solid airline when we're taking care of customers and addressing their needs. >> robert, thank you very much robert isom, ceo of american airlines look at the stock. it's up almost 5%. that's what happens when your guidance is saying, we're going to give you double the eps that we previously told you we would

give you. >> did you have an important question >> it's a slightly different issue in terms -- there's a regulated -- there are regulations in that require certain amounts of money and he may be acting in the best interest of what he think is the customer, but i'm saying there are programs and i think there's questions right now in this country about whether we should have different programs and what that does to the impact of pricing, by the way, just broadly. are the prices higher. it sounds like we'll have to do that conversation another time. >> absolutely. thanks, andrew quick programming note for tomorrow, delta air lines ed bastian is going to join us following the release of quarterly results tomorrow at 7:00 a.m. eastern time coming up, something incredibly important some big financial names set to kick off earnings season tomorrow morning we'll have a preview aerhe eak.ft t

america's biggest banks start reporting earnings tomorrow we've got jp morgan, bank of america, citi and wells fargo kicking things off

investors will be looking for the impact of rising rates and how lenders are preparing for a potential recession. most of the stocks are up sharply over the last three months with jp morgan gaining 37%. joining us now is is morgan stanley's global head of the banks and a diversified finance research we're heading into this expecting that the banks will start taking some decent-sized provisions to prepare for bad times ahead. what are you looking for from these four what would stand out >> thanks so much for having me on, becky. a couple of things, number one is going to be what is the asset sensitivity, what's the benefit of higher rates on the net interest income that the banks are looking for, not just, you know, in the quarter, but going forward for the full year, and that is going to be on the positive side. on the negative side, we have two things, one is outlook for expenses we are anticipating that expense guides will have to move up above what consensus estimates

are anticipating right now and the second piece is what about the loan losses, what about your provisions we are anticipating that these banks are going to have to raise their reserve ratios yet again, given not only deterioration in the economy, but also in their own portfolios >> you lowered your price target in the last week or so for both citigroup and goldman sachs. are there any other banks that you expect to be standouts >> we are positive on a few names going into the quarter that includes jp morgan, one of the key reasons there is we're anticipating that they will show that they are more asset-sensitive than the street expects and they will look to deliver positive operating leverage in '23, different from last year in '22 wells fargo, also an underappreciated asset bank.

and northern trust doesn't really tell you too much about what to expect their peers have already indicated deposit outflows are slowing. we will that will be end up being a positive for northern as well. >> what is it that you don't like about citi or goldman sachs? >> for citi, the expenses are going to be coming in higher than the street is anticipating and as we look to this coming year as they exit, some of the consumer businesses, there's a little bit of a tail of higher expenses for longer as they work down some of the costs associated with that business. as it relates to goldman, look, the reason for bringing down the price target was a function of what we're expecting for market, market activity, as well as what the starting point is for earnings, and going through the fourth quarter, there were some haircuts we had to take to our own eps outlook for goldman and

that's what's reflected in our base rate, the liftoff for 2023, and that's where the price target production came in. not from the multiple as much, but from the expected earnings. >> thanks for the heads-up >> thanks, becky, appreciate it. also a programming note for you, next week, we will be live at the world economic forum in davos. we have interviews with the ceos of bank of america, goldman sachs, jp morgan and morgan stanley. our coverage starts tuesday 6:00 a.m. eastern time -- >> next week >> next week get ready, baby, here we go. are you packed >> this coming week? >> yeah, we're leaving and it's going to be cold. get ready. >> it's cold outside don't forget your booties. what was that? no, don't forget your -- something -- keep saying it over and over again coming up, it will feel like

groundhog day -- we didn't go last year. how fast it last year? >> it was warm outside because it was in may. >> that's right. >> it was great, i have to say. >> they just love -- and we love having an outdoor studio what is the thinking here? good. >> coming up -- and then you get the heater and the heater is so hot that -- >> your butt is hot and the rest is -- >> your butt is on fire. for today's cpi data, that could be taken out of context, today's data validates the market's enthusiasm about waning inflation or will it spoil and then at the top of the hour more on the brewing battle between disney and activist investor nelson peltz. "squawk box" will be right back.

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you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. welcome back to "squawk box," the december cpi report due in just a few minutes. and it is either going to validate friday's optimism about waning inflation or it could spoil the party. and the earnings season kicks off bank of america, we'll hear that tomorrow. and what is more pivotal for markets in '23, policy or earnings and guess who is here to weigh in on both sides the one and only john fortt. >> well it is policy

we're in the early days of q1 after an under-whelming holiday season and the wage data we got from friday's job report and the price data today because the fed impact interest rates continue to have on both stocks and bonds this is not the last word. if q4 guidance comes in better, some say there is a soft landing, good for stocks, other says it clears the fed to hike more bad for stocks but if the earnings are bad, the fed will have to ease up and it is evident we could be heading for a hard landing either way in 2023 where what actually happens matter less than the fed's reaction. that is until we get to midyear and it is time for congress to raise the debt ceiling and that is probably the ultimate policy event of the year. and last week's house speaker vote was just a preview of the game of chicken we should expect to see with the economy on a nice edge. the fed and the house carry far

more weight than earnings per share do >> here is the question then doesn't it depend to some degree on how strong that you think some of the earnings reports will turn out to be and if they surprise folks >> well, yeah, on the the other hand earnings are going to matter a lot more than policy. starting with margin and guidance in the upcoming batch of reports investors have been in a bit of a stupor coming out of 2022 with runaway inflation and four basis point hikes. and that ends over the next three weeks starting with apple. lululemon warned of a margin miss and flex port yesterday said it is laying off 20% of the work force we'll see a lot more this season the sales and earnings miss where they blame the macro and promise significant cost cuts an the solid sales quarter but gross margin comes in light and

gu guidance is a disaster and when that happens earnings have to come down except for the airlines we're not talking about the size of the fed's next hike, we're talking about the whole economy and playing chicken with america's credit rating doesn't seem like such a hot idea any more >> so the fed meeting, we have it in there weeks, at this point, right, and we're going to see a lot of evidence which side we're on here. >> a couple of days before the apple report we're going to see arguments on both hands >> are you going to show your hands at this point, or no >> i went into this one thinking it is more on the earnings side, but, gosh -- >> can't fight the fed my friend. >> the way i could be wrong is by framing the argument wrong and what i said matters doesn't matter that is how i could be wrong. >> what i noticed for the first time ever. you start on the one hand with the pen in your left hand and then you swap ore to the right

hand i just figured it out. >> literally on the other hand. >> wow could have been just a good -- a lot of clues >> does it indicate what you really think. >> no, just start on the left and move it to the right >> got you thanks when we come back we're over half an hour away from the all important cpi report we'llbring you market reaction and instant analysis on the street as soon as those numbers cross. future as head of that we've been pretty flat dow up by 75 and the s&p up by 8 1/2 and the nasd ubyaqp 16. stay tuned, you're watching

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good morning, we are now just 30 minutes away from brand-new inflation data that one is going to be critical for the fed's calculus on rate

hikes. and a fight is coming. nelson peltz seeking a board seat at disney we have details ahead on the active investor's big proxy battle with the mouse house. and a new push to ban stock trading by lawmakers we have the bipartisan pair angling for changes in congress. you don't want to miss it. the final hour of "squawk box" begins right now ♪ good morning, and welcome back to "squawk box" here on cnbc and in this nice, cozy, warm studio. live from the -- >> you have taken for granted for far too long. >> live from the nasdaq market site in times square. >> it is going to be snow next week that is why you're thinking that it is warm it is not that warm this morning

here just saying. >> compare that to next week it is pretty warm and comfy. >> you told me it was warm in europe you told me it was warm. >> that is my fault. i i think i said that. >> it is in the teens at night. >> it is going to be cold. i'm joe kernen with becky quick and andrew ross sorkin i'm looking forward to it. u.s. equity futures at this hour indicated up we'll see. at 8:30 it could all change. we're up to four straight days and today would be five. is bitcoin a buy because we never show it any more. >> it is at 18,000 >> we stopped showing crypto so probably a buy. it has moved from 16.2 to about 18 and there are some people that say it is speculative and nasdaq-like, that it could not be the tail.

it sounds insane to say it could influence equities or bonds but you could see that it could bottom and actually start going up before everything else. or we have a big cpi number, a hot cpi number and it is back to 16,000 and it gets to where katie stockman said it would go, which her latest was 13,900. activist investor nelson peltz launching a bid for a board seat at disney. what i don't know what this is going to cost us david faber. you have an alarm clock? >> you know i do. >> you get one recently for a gift or something? >> actually i use this old ipad. it is like 15 years old. it is cracked but all it does is act as an alarm clock, joe i'm going to enjoy -- >> what are we going to do with hulu >> what are they going to do with hulu?

disney is going to spend $9 billion to pay comcast to buy what is already doesn't own. >> what is it worth? >> i don't know. >> i love it i hope it is $90 billion. >> i know. that would be good for all of us i'm still imagining you walking to the hovel in davos over the ice-covered streets and freezing your butt off. >> the butt gets hot because the heater is right next to us. >> so when you're walking home. >> oh, that walk home. oh, it is horrible you want to talk -- >> walk home at night. you'll be fine you'll be fine it is just down the road >> just down that glacier. just go down the glacier. >> if you don't fall and crack your head open >> all right have fun have a great time. oh, yeah, joe, i'm here to tal about nelson peltz is who going to be joining us on squawk on the street about an hour from

now looking forward to that. late yesterday we got the news that mr. pelts wants a board seat at disney he's been talking to the company about. they started with informal conversations this summer back in july as they had a position that is some $900 million worth. those conversations got more serious. first if bob chap eck or with iger but the board of directors at disney was just not interested and that is in the background of the proxy that is filed. and so we're now at a point where he's challenging for that one seat remember we have universal proxy access now now make it a bit easier for him. they're reducing the board from 12 to 11 susan arnold is going to step off to be replaced by mark parker, the former ceo of nooik. most people are wondering --

[ technical difficulties session planning they claim and also what he called over the top compensation and also talking about corporate strategy and operations, it zp does talk abo the direction of consumer struggling or over cost. so this is an interesting fight. certainly we'll get probably more attention than it deserves. but it will at least allow shareholders sort of to weigh in here on what has not been a great period for disney. they would say, as you well know, well we have a deal with this pandemic that shut our

company down or a lot of it that is almost three years ago but they're still dealing with. >> are they holding down compensation he wanted the disney investment to work out better so he makes -- that is a little bit weird. if you have a great ceo like iger presumably is, he might be worth, what -- sorry, go ahead. >> i was going to ask a separate question was we were speculating this morning about what role you think or we think nelson peltz may or may not have played in the ascension of bob iger and his return to the company given that we now understand that nelson peltz was in and around the hoop at least trying to talk to chap eck and others and was put together with the company ceo who played a role with the board in terms of her no confidence in bob chap eck and

whether these things were all connected in ways that we didn't know before. >> i wouldn't read too much into it, andrew just based on what we've read hear in the proxy and the timeline and my also reporting the board was aware of mr. pelts presence and so that is true was that in mir mind when they made that move to fire mr. chapeck, certainly you could allow for it was that a driving force that is harder to say. it also didn't work. if they thought it would get rid of the headache of mr. pelts coming after them, they were inconnect in that. it is worth saying he does not advocate for replacing iger though he doesn't appear to be a great supporter, continuing to question how much was spent on that fox acquisition which was engineered by mr. iger and the fact that in their opinion at trian, that has hobbled the company, at least in

terms of the capital allocation, and we're talking to tom rodgers about hulu and joe alluded to h hulu and that is a major division and comcast our parent network. one sale is what happens to the content on hulu in part, the fox content which was something that -- that of course bob iger strategically was trying to buy or did buy and whether that would actually come with or not and then if it doesn't come with, if that is a deal, what is hulu >> well, my thought was that if you own all of hulu, you get all of the content there but i'm not certain, andrew. you're right, of course, this is something that shareholders need to be thinking about because if you're already thinking about a company that is levered where it is and wants to get the leverage down before it considers reinstating a dividend, it is

difficult to do that when you're potentially spending another $9 billion more perhaps, and it is yet to be determined what that number is going to be if you want to buy what you already don't own, the 33% that comcast owns of hulu an that is coming up soon. because that is a '24 transaction and you could accelerate it if you wanted to but that is something that may happen this year there are no shortage of challenges for mr. iger in terms of trying to put the company on sound footing overall and focus on the direct to consumer and profitability as had been promised by the previous ceo and this just adds to another headache you know that. and not matter what you say, it takes some time. iger is not chairman of that board. but nonetheless, it is a distraction, joe. >> a lot of sources over in davos. do you want me to talk to anyone

about -- about whether you could be like sort of a roving, like a source chasing financial type guy? are you interested and then we could put the band back together and we could go out at night are you interested >> that is a long time ago >> do you want me to do anything. >> sure. you do whatever you think is appropriate. >> we have a spare bedroom in our flat, i think. >> you do? >> we do. >> is it a dorm situation? it is a nice dorm. it is like a graduate student dorm. >> did you see the movie "hostile"? >> i missed that one. >> it is lost a hostel with a futon. >> last time we were down in philadelphia in 2004 last time there was a proxy battle for disney we were in philadelphia because that is where their board meeting was. >> we go back to the winnebago,

when haines was flying around. he didn't ride that winnebago with us. >> he loved that winnebago when we talk or "squawk box" road trip when was that? >> in the '90s. >> before the internet at least it wasn't cold. we were going south. >> you're right. exactly. >> have a great time in davos, everybody. we'll be thinking of it. >> we'll be watching you at 9:00, too, david thank you. >> thank you >> it is late over there like 3:00. december cpi inflation data is due out at 8:30 eastern time. this is probably going to be one of the most important data points that the fed take news account when in decides whether and by how much to raise interest rates at next meeting joining us now professor of finance at wharton school of business and jeremy, let's point out for anybody who hasn't been listening and maybe they're new viewers, you have been saying for quite a while that the fed

really needs to slow down. if this cpi number today comes in negative, let's say, i guess that really adds some fuel to the fire behind your argument? >> yes and good morning, becky. i think we have to realize how much upward bias the reported cpi is the shelter bart of the cpi, which is the biggest single part, over 40% of the core index for the last three months, it is averaged plus .7% in the feds because they use lag data. but if you use k-schiller, and housing data and the federal housing authority data, if you use the zillow rental index, if you use the apartment list rental index, they're all down .7% per month. and so, but you have is an

upward distortion, just like in 2020, 2021, you had a big downward distortion in how much inflation we actually had much more than the fed and the government reported. we are actually having much less today. you really should be subtracting about .3 or .4 off the inflation, which is expected to be down .1%, but actually even the core, now it is expected to be up .3% because i think we're going to see another plus .6 and plus .7 index shelder and that will be in that index for almost a year so by looking at the lag way the fed looks at housing, it is overestimating that inflation and that is run of the withins when i say they've got to slow down we're in a negative inflation

mode right now >> what happens if the cpi is hotter than anticipated? >> well, you know, the market thinks the fed is -- is eventually going to get it they're a little slow, but they're eventually going to -- there is talk about the housing index and i've been bringing it up for months and months and months and i think they're saying on the ground there isn't as much inflation. some people say we're going to have to see, you know, the actual labor market decline before the fed actually does something. i also think, by the way, the fed fed's infatuation with real wages. we're going to get real wages and they're going to be negative year-over-year the worker is in catch-up mode i think that jay powell is way

to concerned about the wage part contributing to inflation. workers are trying to catch up to inflation we have a labor shortage we need that wage to go down it is wrong for the fed to crush the market -- crush wages when the workers is true iing to cat -- is trying to catch up and there is a labor shortage which powell has admitted so both fronts should not be looking at wages if you look at the actual rate of inflation, with good housing data, not a lag housing data, we are in a deflationary mode it is a time to stop raising rates. you're right, if we come in above these numbers, the initial market reaction will be negative but i think a look at how much that sheller will go up even though it should be going down and i think people looking at the whole picture will say, you

know what, we basically have won the job. there will be a little more inflation on that front, but that structural, the fed should not be pushing those down. >> 13 minutes and 10 seconds and we'll be getting the answer to that jeremy, thank you for joining us ahead of that. great to see you. >> thank you. breaking inflation data. about 13 minutes even now. and instant market reaction. but next the bipartisan pair of lawmakers pushing for a tngressional stock trading ban inhe new congress. squawk will be right back. if you have to share a house with a host? ♪ only with vrbo

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welcome back to "squawk box," a fascinating new sub stack post that was just put up by ftx founder sam bankman-fried who is under house arrest, awaiting his trial on fraud and of the charges in it, he blames binance ceo cz for the collapse of alameda research and said a substantial recovery for ftx customers remains possible it is -- for those who are interested in crypto, and interested in this entire saga, it is a lengthy post it goes into quite some detail about the math it makes a couple of fascinating arguments. one about customers of ftx u.s. saying that he believes that ftx u.s. customers should be, quote, fully solvent and should be able to return all customer funds one of the other fascinating notes of this is he comments on

sullivan and cromwell, representing ftx in the bankruptcy recently, and he notes this, senators have raised concerns about potential conflict of interest from sullivan and cromwell because they represented ftx in some transactions earlier and he said in this note that sc and the general council were the primary parties strong arming and threatening me into naming the candidate they themselves choose as ceo of ftx including for a solvent entity in u.s. who filed for chapter 11 and is counsel to the debtor entity there is a piece of this worth exploring. he goes through some quite interesting math just on what assets believes are inside of ftx international, which is important in terms of the creditors looking at this company. makes an argument that he

believes there is more assets there than have been, at least articulated or described thus far. we'll see. >> we should put this in con tex. john ray iii who was brought in to over the bankruptcy and restructuring said that sam bankman fried, every time he talked about these things has made inaccurate and crazy claims and that he's not telling the truth. this is a guy who was there for the enron bankruptcy who said this is the craziest thing that he's ever seen whatever he's saying here, go tell it to the bankruptcy advisers and criminal proceedings against him but the guy in charge now said this is nuts. >> well i'll accept that as one version of the critique. i think there is another version of the critique when you think about the moatations of everybody involved in this

two pieces on the sullivan and cromwell piece, i don't think they should be involved. >> but who the incentives are. and here is the other important incentive. it is very important if you are running this on behalf of the creditors, you would purchase prefer that this entire thing be a complete criminal enterprise than something else if this is -- >> because -- >> if it is civil, it is a much harder case to make. meaning if it is all a crime and this happens now covering white-collar crime for 20 years, if it is a crime you as the shareholder have a much easier case to make to go get the money. if it is not a crime it is a much harder case to make. >> you know who has the biggest incentive, sam bankman-fried. >> and i say that having lived through so many of the cases in the early -- one of the things that you saw were boards that

would purchase prefer to accuse everybody of a crime and i'm not saying sam bankman-fried is innocent in this at all. >> that is just it. >> but when you hear john ray or others say what they say, i also -- my antenna goes up on all of these everybody has a motive on all sides of this. >> what about the people who have flipped and said that, yes, this is all a big scam and they are responsible for this and probably going to do jail time based on their own admissions of what was going on there. >> and they have their own incentives, they are worried about being prosecuted and how long they would be sentenced i'm not saying guilt or not guilty. >> this sounds like a conspiracy theory. >> everybody has a different motivation for the decisions that they make and so when i look at john ray, i don't go oh,

my goodness, everything that he said is perfect and spf, i think there are a lot of things are clearly wrong. >> i give por credence to john ray than spf. >> that may be. >> 100%. >> all i'm suggesting is when you think about how john ray got the job, who supported him and why they did it. it becomes complicated. >> no way. >> meantime, we have a whole other story. a pair of lawmakers is now trying to prevent cleg colleagues from trading individual stocks. they will reintroduce the trust act today. they join us today abigail spanberger is the virginia representative and chip roy of texas what do you think? you guys don't like this. don't like trading, which makes sense to a lot of people but i don't know how your colleagues feel. >> i guess you just made some

breaking news that my friend is a republican. >> i'm the republican. >> my apologies. >> go ahead, abigail >> thanks for an early morning laugh, chip. so, congressman roy and i have partnered on this now for three congresses and our idea, our principle of this issue and of our priority in this reform is simple that members of congress through our votes and actions have the ability to move markets and as a result of that reality, members of congress should not be able to buy or sell individual stocks we think it is a common sense reform that makes real sense to the american people. it is a way to ensure that we're making decisions in the best interests of those we represent and that the information that we need to have access to along the way in our ability to do our job is also that information that we might use to our own benefit. >> so, but what are your colleagues thinking? >> well, i'll jump in here

and abigail makes a good point and there was a recent "new york times" article showing about a fifth of the members of congress, almost 100, made trades and had equities and -- and investments in their portfolios that potentially directly conflicted with their duties and there was conflicted of interest in the committees they sit on or the legislation that they're on i don't know the motives of any of my colleagues, i think it is natural that it raises questions of trust with the american people every single issue of our economy is touched on by congress on a regular basis. so abigail and i thought we should get out there and try to change this and give us a path to be able to break away from the connection of investments in our decision-making in congress. now a lot of our colleagues are interesting in this. we had i think 60 co-sponsors on the bill last congress bipartisan and 12 republicans. i'm talking to my colleague now going into this session, we're just getting set up and our

committees are getting structured and we're saying that our bill is our way or the highway. we want to start this conversation and put out legislation out there to frame it we were early in doing so. june of 2020 we put this out there and it is coming up on 3 years we think it is a good model. if we want to talk about different ways to make it work, let's -- >> where do you see the fault lines. when you talk to your colleagues, since this is regulating yourselves, where do you see the fault lines. when people say i can't support this, they tell you what >> well, and so arguably, it is interesting because this is a bill that across the political spectrum we have support the most left of the democratic party, and the most right of the republican party and everybody in between we have co-sponsors across time in congress, across geography. across committee representation, across ideology spectrums and

we're introducing it today with more co-sponsors than we've ever had at the point of introduction and i've received texts from additional colleagues and i read that you are introducing it today and i want to put my name on it when you introduce and some of the pushback from colleagues is just what would be the impact on them, how would this sort of change things, and what chip and i have said all along is it is really straightforward. we go to classified briefings and we have meetings with ceos of large companies who share openingly their challenges and their experiences and what is working and what isn't and the american people should not be meeting that congress had a classified briefing on covid or a potential invasion of ukraine as was the case last year and then we see lawmakers buying stocks that so clearly would benefit because of those difficult situations or selling stocks that would be expected to potentially lose value in that

circumstance >> if i might -- >> if you take it off the table. that restores trust. >> we have to jump we have some data that is coming across the tape in just a couple of moments but thank you again for joining us though. >> it is about 10 seconds. time for the december cpi number we all need to take a deep breath rick santoli has it. rick, what is it >> our december read on cpi, expecting the headline to be down one point of 1% high water mark, the highest since 2005 strip out the all important food and energy it is up .3% and that is up .3, high water mark in this series was april of 2021, up .9 highest since 1981 year-over-year, expected up 6.5,

exactly up 6.5 high water mark june of this year, 9.1. this is now the sixth consecutive lower month and the high water mark goes back to 1981 finally, in my opinion, the most important metric, cpi year-over-year food and energy, expected up 5.7. all four of them exactly as expected, up 5.7 and high water mark september of this year at 6.6 this marks the third consecutive month that this metric is lower. and it is as you look at what is going on here, interest rates, well they moved lower and now they're hovering a bit but the fact of the matter is that for whatever reason, the equity markets are going lower, interest rates have moved off of the best levels aand i think the reason that we're still looking at numbers that are a bit sticky and i think expectations is something that we, the insiders, pay a lot of attention to but in

the final analysis, i think the issue is that many would have liked to have seen it a smidge lower. let this thing simmer. my opinion is, you goodet a lot of cross currents based on what positions investors had going in and what they're trying to put on now but ultimately i'm not sure if stocks are going to be that much lower as the dow futures indicate and do remember that stocks were trading at the new highs of the week before this number and interest rates were trading at new lows for the week before this number. i think that about covers it, joe. back to you in and the panel >> yeah, we've had a kuble -- a couple of numbers that were so positive in terms of maybe allaying some fears. cooler than expected i think people were hoping for a continuation of that trend and we had already ratcheted down expectations and they hit those expectations they just didn't surprise us with even being cooler than expected and who knows where the market ends up today

but the initial reaction was, wow, i wish we had gotten an even cooler than expected number and that obviously isn't what happened >> exactly i think you nailed it there, joe. and once more, ultimately this now becomes an issue where the markets have taken much of the slack out of the rope in both directions in terms of interest rates bucking guidance by the fed, the equity markets and the entire notion of easing financial conditions, that really is going to bump up against most of the fed guidance, which they're not going to change. they're not going to change until it is so apparently obvious that the high water mark is in the rearview mirror and it is not that inflation stops going up or goes sideways, we're now at the point where people would like to see the headline number. >> and the commodity tail wind of some commodities coming down and china is reopening and who knows if we could count on that.

let's get to our panel mona, senior at edward jones dana peterson. betsy stevenson and currently an economics professor at the university of michigan michael strain, director of economic policy studies at the american enterprise institute and we have for -- steve liesman is sheer and back. and rick is still here so let me start, mona. i don't know whether you want to talk about the market reaction let's talk about the report itself we're expecting -- expectations were probably ratcheted down and then it didn't overdeliver there, that is what we're seeing. >> i think you nailed it on that the market is up about 2% and the nasdaq up 3% some of this good number and we think it is a good number has been priced into markets already. but keep in mind, expectations have come down so the 6.5% year-over-year

figure we got was down from an earlier expectation of 7%. the 5.7% on the core side is also a lower number. so we are moving in the right direction. and when we see leading indicators of inflation and including the isms, including the supply chain and break even inflation and consumer expectations of inflation, all are moving lower so our hope is that the trend does continue in this direction and, in fact, we see core inflation heading towards the 3% levels by year end of 2023. so continued good trends >> and we've seen a reversion back to where things were in stocks and bonds the dow is back up, dana so, is this just another data point? can we discern anything from this the trend is it going our way if you're hoping that inflation cools? >> yes, it is a good trend and certainly what is important is what is in the guts of the report, whether or not it is tht

areas that are demand driven such as rents and services but this is in a positive direction and we think the fed will look at this favorably. but it is probably not going to cause them to not raise rates. we think do think they will hike two more times 25 basis points each. >> michael, what is most important as far as components we worry about labor but we saw that in the last employment report santoli is here too. so i'm talking to michael strain at this point. wow, that is an eight-box. one morrow and we've had 12 and really get some decent analysis here but, michael strain, is china going to be -- wouldn't commodities, couldn't we see the coolest numbers if china totally reopens and then we're back to -- maybe labor becomes a tail wind at that point if it does ease a little. >> it could happen i mean, when i look ago the

re -- i'm looking at the numbers, i think overall headline inflation is clearly heading in the right direction. we saw another month where goods inflation decelerated but we didn't see a further deceleration in core services inflation. and that is really where the inflation is coming from what we need is for the labor market to cool down, wage growth to cool down, and that is how we could get inflation kind of from 4.5% down to 2%. i think going from 8, 9, down to 4.5% is what we're seeing. that should be relatively straightforward. the hard part will be getting wage inflation down, which will allow the fed to kind of get the final -- final mile done by returning price inflation to the target these numbers don't indicate that is happening. we're not seeing an

acceleration but we're not really seeing a deceleration there either. that is what we need to start seeing. >> kind of interesting movement in the dollar, i just saw, mike. and the stock market, who knows what happens you watch that it was a quick knee-jerk reaction but now the two year yield is lower than it was prior to the number. >> yeah, but we did come into this number with the premise being, inflation is decelerating and there is some downside momentum and we've been saying that the burden of proof is shifting towards those who believe it is sticky at a higher level. it is the shelter and the rent areas that seem like they are the sticky parts that is the part the market is gaining confidence all that being said, not sure about the direct fed implications of a faert point or a half point hike in february. i'm not sure it matters. fed is just about done they're going to let the higher for longer idea do the work from this point on.

and expectations are lower earnings are seeming reasonable. and inflation expectations are come into line so i think the market in general is okay with this. it is now all about are we going to see the lag defected on economic growth, which right now it is just not giving way that quickly and i think that is good news for the economy, whether you think that is bad news for the fed, i'm not convinced we could make that leap just yet. >> i haven't talked to steve liesman yet. if we can't do 12, i don't think with eight we have a ten box. so we get 25% more bang for our buck here. steve, what do you make of this? we're working on adding a few more we're going to have paris hilton >> i think viewers are missing out on the real added value if we all talked at once they would be able to get more out of it. >> we do that on a lot of these panels, steve. >> let me give you a little bit

here food remains stubbornly high zero two for foot at home from 05 but the food away from home remains 0.4% that was up. i think the story here, santoli just touched on it you have this rise in the owner's equivalent rent number and it is up on the year-over-year and that pushed up energy less services, the core energy. that pushed up the core services number and i think what is happening, and mike was right on this, is the market is looking through that and they're saying rents in the real world, that we know, are coming down and that is going to filter into the index in the month ahead the other thing i want to say, joe, is i want to rise in defense of the much beleaguered headline index it is down 0.1%. everybody said let's take out

this and that. and let's go back. it is the surge in fuel prices that created the double-digit inflation, that freaked everybody out. and now that it is coming down, why are we ignoring it it doesn't make all that much sense. i get that the fed doesn't use it but if it is the headline number and gas prices that creates the expectations for inflation that the fed is so worried about, let's not be so quick to dismiss and when it goes in enegative. >> rick, you gave us some number or analysis. and do you have more and should i go back to the top and get through all ten. we're just there to look pretty, us, is that right? >> always. >> real quickly, i want to say that while this great discussion was going on, interest rates as you pointed out came down to pre-number levels. the equity markets have firmed up i think this is a big day for stocks to the upside i think you'll continue to see interest rates drop and you know

that 5.7 that we had, to me that is the issue to pay attention to the 6.5% year-over-year, and steve is exactly right, all of those month over months are going to give us all the new year-over-year data over time and to see that first step, the first minus sign, i have a data base in my brain that goes back to january of 2020 there is no negative number in that for the headline. so i think that is a significant positive, my hats off to steve to point that out. >> we have a couple minutes left but back to, as i said, mona, have you been -- are you inspired to say some additional things based on what you just heard? >> it is interesting i think that some of the things that we've talked about in terms of wage growth services and inflation, those keep in mind are lagging parts of cpi and we've talked about how shelter and rent prices in realtime are coming down and we could all see some real life

examples of that, but it does take about six months to show up really significantly in these cpi numbers. similar similarly, wage growth, 4.6% below of expectations of 5%. the fed would like to see 3.5% to akmeechieve the 2%. the leading indicators are moving in the right direction and some of the lagging indicators are starting to show signs of easing as well. so i think the direction of travel is still good i think the fed has two more rate hikes as was noted but i think the market and the fed are coming around that 5% terminal rate which is a good sign we're greating clarity around that. >> no they're not. that is the problem, mona. it is one of the realities that we're dealing with right now the conflict is the market is not taking on that 5%. it is rejecting it and it is rejecting it more this morning when you see the two-year yield fall. and then i'm just going to take

a look at fed fund futures outlook. i need my glasses for that we're at 444 for january, which means that the market sees the fed cutting rates after reaching that 5%. >> we have to get to betsy i know you have some -- >> we're getting further apart. >> know you have something coming up, steve so i want to get to betsy. i'm sorry, it is confusing, a deck of a boxes. but what do you make of these numbers? >> they came in -- hitting expectations but let's combine this with that fantastic jobs report we got. when you consider that inflation is coming down at the same time, we still have pretty red hot employment growth. it looks like the fed is just really orchestrating this move really well. you know, we keep hearing people talk about recession, but what we're seeing is continued economic growth, continued higher, while prices are coming down and in terms of looking athe

that headline number, i agree with steve chair powell said, the fed normally looks positive but we're not going to look past it any more because we know that is shaping people's expectations. so hallelujah, we see a negative number on the headline number and i think that is going to calm people down further and give us more hope to continue to have employment growth and economic expansion. >> all right. >> at a time -- we have to get to steve thank you one and all. and i did mean that. but steve you're sticking around and now you have breaking news that we want to get to immediately. >> yeah, philly fed president patrick harker makes some comments he's come after, but i don't know if he wrote a speech but he expected to raise rates a few more times, 25 basis point hikes will be appropriate going forward. again, i do not know if the new -- about the cpi number, making these comments. he expected the fed to be sufficiently restrictive sometime this year and that it will hold at that

restrictive rate the goal is to slow the economy. modestly harker said the unmistakable sign of the interest rate sensitive sector and national economy is relatively healthy americans are still spending even if they are digging into savings to do so concerns about commercial real estate, something we've talked about on this show quite a bit but the labor market as betsy just talked about, excellent shape. we'll top at 3.5% for inflation and not recasting a inflation. and i'll leave it there unless we want to hear from some of the other brilliant panel. >> they are gone i was just considering, so five and five if it was nine, we could do a full hollywood squares thing you know what i mean >> is that your dream, joe that what you all wanted to be who was the guy that was -- >> charlie weaver. the guy with the hat

i don't want to be him all right, thank you, steve. we do -- andrew, i clincluded yu >> yes, thank you. when we come back, we're going to get jim cramer's first take on the new cpi data and the market reaction and the dow keep pushes back into positive territory with the furutes stay tuned, you're watching "squawk box" and this is cnbc. why are 93% of sleep number sleepers satisfied with their bed?

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let's get down to the new york stock exchange and check in with jim cramer. the cpi numbers were weaker but not weaker than although at this point the dow has come back to be up by about 50 points >> look, becky, i think that the cpi, we were looking for this. the big rally pulled it forward, but i think there are some signs within this that maybe make it so that the number's not nearly -- that's even weaker you've got things that if you look at the companies versus what the numbers say, i mean, it says apparel is up 0.5, but all the analysts will tell you, including after the macy's number on friday, apparel has come down. there's a big glut in it natural gas is at an incredible low, and to think that's not a great number, i don't buy that at all shelter, we know from kb holmes

last night, a large number of areas have had some very big cuts in the price of homes, so i like to, you know, i like to meld the actual companies with these numbers and the numbers look too strong versus the reality. >> that's interesting. that's what jeremy siegel has been saying too. he was on before the numbers, saying, these are outdated numbers to some extent if you're looking at the real numbers that are hitting the real economy it tells you there's more weakness to come >> jeremy's very right on that we can go over every line and come up with definitive numbers, and some things were incredible. who thought that natural gas was going to be the cheapest fuel in the world in our country i mean, who thought there would be such a tremendous glut in apparel, and why doesn't that come out in these numbers? it just doesn't make sense i'm with jeremy. and i think shelter, you have to be careful thinking that's hanging in there kb homes tells you it's definitely not we can look at the companies, take these numbers, and come up

with something that is weaker than they are, which is why i think that the dow could be running. >> before you go, since we're going to hear from nelson in just a bit, you got a quick take on this disney situation >> i do think that there was a sense that they really put the heisman in nelson. he tried very hard to get on he had a lot of things to say, but you asked a good question earlier, how much of what he was doing precipitated a very rash or quick decision to get rid of chapek and put in iger it may not be fixable any time soon the balance sheet is the balance sheet from hell. i want to know what nelson can do about that. >> jim, thank you. we will see you in just a moment >> great show this morning great show >> we're looking forward to nelson peltz we will be right back with what you edo wchg ead ne tbeatinahof the opening bell on wall street. the futures are back in positive territory.

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welcome back to "squawk box. december cpi coming in as expected, down 0.1%. year over year, it stands at 6.5% futures have been volatile since the data hit i want to bring in paul hickey

what to you make of the data i don't know if you heard jim cramer's comments about how lagging these numbers may be and perhaps maybe cpi is even less, you know, less strong, if you will >> yeah. i mean, i think you're exactly right, andrew. you look at the data, it is lagging. housing costs, up in this report nothing is suggesting that housing costs are up here. and that's the danger of looking at -- relying on lagging data to base your monetary policy on so, that's the concern here. and i think what the market is showing here, you know, we saw it up a little bit, but the market was right in line with report, with expectations, and i mean, that's down 0.1% six months ago, when cpi was up over 1% on a month over month basis, no one would have ever thought we'd be looking at a minus 10.1% cpi for the month o december i think that's encouraging if you saw cpi crashing further,

that wouldn't be a positive signal that would be a sign that the economy is doing really weak only 4% of cpi readings throughout history since 1950 have been less than minus 0.1% that would be pretty ominous >> it sounds like you're suggesting that things are weaker today than these numbers are suggesting, and then the question is, is that good or bad news in this sort of perverse, what does the fed do about it situation? >> so, i think the fed really should start to look at some of these indicators a little more closely. the fact is, every day that goes by, we see another indicator suggesting the economy is weaker rather than stronger the only thing holding things up seems to be the employment picture is holding in. we have both isms below 50 25 out of 26 prior readings where that's occurred throughout -- going back to the

late '90s have been in a recession or coming out of a recession. there's only one exception the one difference this time around is that employment is holding up so, i think in that respect, it's something that we can, you know, breathe a sigh of relief here for when we looked at our -- going to the year ahead last week, looking at what's working in the market's favor and what's not working in the market's favor, surprisingly, we saw more things working in the market's favor than against it. so, that's something that, for the market perspective, keeps us slightly positive here, and i think the message going forward to the year is what you think should happen doesn't always happen in the market take europe, for example everyone thought this was going to be a brutal winter. we were going to be on the verge of a depression in europe, and look at the major averages in europe right now they're all in bull markets. the footse is within an all-time

high that's not the picture that most people were looking at six months ago in anticipating this. >> we're going to have to run in 30 seconds what do you do about all this? >> i think you take, you know, an approach to the market, like i said, there's more positives than negatives in the market's behavior, so i think from a longer term perspective, you want to be looking and putting money to work continuously here, and if you do get a weak day, you want to put some money to work overall, the market is more working against -- more working for it than against it >> fair enough paul, thank you. appreciate it. >> thank you >> going to get a final check on the markets. got about 45 seconds before we hand it over to our friends on "squawk on the street" who have a big interview with nelson peltz as they discuss the future of the mouse house and his efforts to wage a proxy battle but right now, it does look like the market isn't up on the back of the cpi news. >> rick was right. he said, wait and see what happens. check it out >> here we are

>> bonds have sort of -- the yield curve's sort of -- >> down by 200 points, s&p up for now. we'll see where all of this lands both at 9:30 and then at 4:00 p.m. today as everybody weighs it all. make sure you join us tomorrow we're going to be standing by right now to watch our friends on "squawk on the street." >> we're here? >> we're here. see you tomorrow ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber, live at post nine of the new york stock exchange. futures trying for a rip here after cpi comes in negative by 0.1% we'll talk about the implications for the fed and the markets, along with this new proxy fight at disney in a few moments as the guys on "squawk" told you nelson peltz seeking a seat on disney's board we'll begin, though, with december's cpi, in