and four of the world's biggest banks. jpmorgan chase and goldman sachs and bank of america and wells fargo. tesla slashing prices for its cars in the u.s. making them available for a federal tax credit. and apple tceo tim cook telling the board to cut his pay after shareho hs dipped it is friday the 13th. "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 kejo kernen and andrew ross sorkin.

it is friday we are awaiting ernarnings. look at equity futures dow up 32 points after the gain of 20 points yesterday s&p is off by 1.5. the nasdaq down by 24. we should point out nasdaq has been up now for five sections in a row. that is the longest winning streak going back to july of last year. s&p was up yesterday it rose by .30%. the nasdaq up .20% you have treasury yields by the way, from the start of the year, decent couple weeks we have now have compiled strength across the board. the 10-year treasury is yields 3.5% the cryptocurrency is coming back bitcoin is above $19,000 >> wow wow. meantime in crypto land, the

s.e.c. charging genesis and gemini with selling unregistered securities with two firms partnered in 2021 on the project called earn with yields up to8%. it is like an interest product according to the s.e.c., genesis loaned gemini users crypto and sent a portion of the profits back to gemini they sound the same. and deducted an agent fee and returned the profits to users. the s.e.c. saying genesis should have registered that product as a securities offering. the leaders of the firms, the winklevoss twins and barry silberg have been at odds after a function wiped out gemini's earned customers in the next hour, we talk to the former chief of the s.e.c. enforcement branch about this case it raises questions about what

genesis and gemini were doing and why the s.e.c. to some degree did not act sooner. this was a publicly available or known product. it wasn't being done in secret you can go on to the sites and see the product. now a question of what will happen to all of the customers the other piece of it is in some respects, there's a connection to ftx on one side which is ftx or alameda, i should say, pulled back a loan and whether they become -- gemini -- becoming a creditor and gets their money back and a separate question which the winklevoss twins saying did they commingle funds lots of questions.

bitcoin moving higher today. and crypto.com plans to reduce work force by 20% the company's ceo citing the ftx collapse which damaged trust in the industry singapore company announced this days after coinbase announced a similar job cut. >> you saw the bill ackman thread he put out? >> no. about sugar? >> no. this went into why he has been open to potentially believing sam bankman-fried. he explained his comments and experience when he made accusations. when he shorted. before that. nbia he shorted nbia and elliott sp spitser came after here. he accused him of market

manipulation he put him in a horrible place he went through that entire experience and then talked about how spitzer apologized to him when it blew up. it was a long thread that he tweeted out. that made him understand his position better. others said stop being sympathetic. >> pollyanna. >> to sam bankman-fried. it was interesting i forgotten about that chapter of his life. >> spitzer forgot about him twins. winklevoss gemini >> you're quick. united health just reporting. united health. we saw bertha last hour. reporting fourth quarter results that beat on the top and bottom

lines. adjusted earnings at $5.34 a share. 17 cents above estimate. $82.8 billion beat guidance. this is something i'm not sure united health reaffirm guidance to $3.60 did they reaffirm guidance before do you know? >> i don't >> if this is the first time -- >> just an affirmation >> yes >> the gemini twins. >> there you go. now one on succession. rome a pet name above cese consensus we shouldn't say it. full year earnings estimates fell short just to give you an idea, this

company was going to be put out of business with obamacare you know the market cap? just under a half a t. yes. 465. somewhere around there it is indicated higher today oh, you can see it almost $500 a share at $495. it was 4$463 billion and a dow i'm told thank you. tesla is cutting prices in the u.s. and europe. the move in the u.s. will qualify more of tesla's models for a federal tax credit including the model y suv and model 3 sedan. which was a wordle word the other day. the purchase price drops from $63,000 to just under $54,000. the model y from $66,000 to

$53,000. do you do that anymore >> no. >> do you do that? you too busy you can't spend two minutes having fun with something your company bought >> i say definitely on the weekend. i feel like i have been less consistent than i would like to be. >> it keeps you sharp, my friend. >> that's my problem very evident >> go all the way through. wordle the one i like best. it is really hard. >> i never heard of it. >> they give you eight and they start it they give you a couple and you work from there and get it in less than nine or less than eight. it is hard really good. we should tell you about apple ceo tim cook who asked for and received a pay cut of more

than 40% for 2023. don't feel bad for him that will bring his compensation to $49 million that would be down from his $84 million target from last year. cook earned more than $99 million laust year because of te stock last year. the change came in response to last year's say on pay vote in which 64% of shareholders approved of his compensation that was down from 95% saying they approved back in 2020 forbes estimates cook's net worth to be $1.7 billion he has joined the giving pledge promising to give away most of the money to charity if you look at the compensation. up over 900% it has been down last year it was the year before it was higher >> 99. couldn't get up to 100 million >> it was close.

>> not a founder a lot of money a lot of money for not a founder. you can take a bunch of guys >> the concern when he took over for steve jobs and when steve jobs left, there was concern that you couldn't run this company without him. tim cook has done an incredible job. >> we don't mention steve jobs he did a great job tough shoes to fill. i don't have a problem with it performance based. i don't know do you have anything you want to weigh in >> you know the company walks on water. no fabulous >> really? 99 million. >> i'm okay with it. >> that's awesome. that's good. >> he created a remarkable scale. >> yes yes. preach. >> under appreciated for the new

products that have come out of apple. most people think there haven't been a lot of great products i will tell you where are my ear buds that innovation is -- and all of these little things which have been mind boggling >> the reason i'm saying it. i have seen a lot of progress. i have there is a mindset that no one should get that much or be worth that much because they can't use it these people think it is a zero sum game people think the 99 million and another million people that could have used that $99 that he is not going to need then they use it in the economy from the ground up and all of us would be improved. a lot of people that have that viewpoint. there should be a cap that any one person is able to make in a given year based on so much to go around. >> he has pledged to give away.

>> i know. >> i don't disagree with that. there is one other difference. >> i'm trying to figure out how you got to this good position you have right now >> it's very successful company and under his leadership somewhat of an evolution >> i'll give him credit. i do believe this. do you think some of the executives -- >> could get the same amount of money somewhere else they have buddies on the board and old boy network. i got that it makes me think of margot robbie who will make $40 million. she is very good did you see "babylon" movie? what are we paying justin verlander? he is very good especially for 40 years old if you are really good at something, you will make a lot more you can make 1,000 times what a really hard working teacher

makes. there may be that grand scale. >> i agree coming up, big banks >> we agreed >> we fully agree. that's good. it is rare we usually switch. i end up being far left on things that you are suddenly far right on bizarre. we are sad about bed bath & beyond >> true. big banks set to kickoff earnings season this hour. how much are they putting away i want to know are they seeing weakness later, reaction to nelson peltz's campaign against disney. disney management. you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist wealth

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on today's squawk planner, we hear from the banks jpmorgan chase and wells fargo and citigroup and goldman sachs. next week, we are speaking -- any anxiety coming davos? sorkin the red carpet over there for you is so good >> i get all excited >> you do. you do it's almost a coronation i like to trail you. other than the show, i leave twice, my hotel room

>> come with me. >> the stockholm syndrome is an lov alive and well we will speak to those ceos from bank of america and goldman sachs and jpmorgan chase and morgan stanley coverage starts at 6:00 a.m. on tuesday or noon in davos >> it is >> weird to get on that schedule sleep in and have breakfast. it is almost time to start thinking about your evening plans by the time the show is over it is different than it is here. this morning, we get results from delta airlines and bring an interview with ed bastian. that is coming up in the 7:00 hour which would be 1:00 p.m. in davos. i can do this all three hours if you give me a second wall street bracing for a weak earning season.

our next guest says bonds could be more important than earnings for stock. gunjan is the leader writer for the markets. we were just talking about the bank earnings you think these are important for a lot of reasons not just for the individual companies, but get a fix on where we are within the economy based on what they are saying about loans, et cetera >> joe, the companies set up the heart of the u.s. economy and they are always really important financial results to watch i think they are especially important this time around because of the worries with the recession out there. we could see that creep into earnings how much money are they putting away for potential loan losses and what do mortgage originations what does it say about the health of the economy? jamie dimon's comments say rates

may have to go as high as 6% that is not what the market is pricing in right now it will be interesting to see what mr. dimon and his peers are sayingabout the u.s. economy while recession fears have hit a fever pitch lately >> and the information we use to try to gauge the fed and explain the disconnect between what you are looking at right there on the 10-year treasury and repeated insist tensance that te is going to 6% or beyond can the market pivot for does the fed have to pivot and the markets follow can they force the pivot >> no one got it right in 2022

who saw rates go as high in 2022 then again we don't think you will raise rates as high as you say you will the fed is saying we will raise to 5% and keep them there longer than investors think we will just after every report and inflation report yesterday, it grows wider and wider. i think someone is going to have to blink someone will end up being right or wrong that is the biggest questions facing markets in 2023 i think one bit of bad news for investors is a fed pivot may not be this saving grace that they think it will be i think the kind of wisdom out there is the fed pivot is really good for the stock market. i was looking at data recently in 2001 and 2007 when the

interest rates fell and went no rece recession, the stock market was down those years in the six months after the fed started raising interest rates investors betting the fed pivot is good for stocks and you need to think again >> i think the last tightening cycles and within seven months they were cutting already. i don't put anything past the fed. to get it so wrong a year and a half ago and why should we have this confidence that they know they will not cut within the next year or so? it depends they could breaking something. it could be a harder landing than we suspect. a lot of reasons to suspect. for some reason investors are grasping at that we could have cuts this year which i can't imagine. >> relying on the 2018 and 2019 and 2020 playbook where you pointed out when the fed started

trimming rates then we did see the nearly decade long rally in the stock market maybe this clearly isn't the same economic environment. maybe you can't use that playbook this time around. yes, we're seeing signs that inflation is easing, but it is still incredibly high. this is a market and economic environment we haven't seen in decades. at times, it looks like investors are using that playbook >> gunjan, if estimates come down enough to where we will be in line or is it the forecast that will cause maybe some surprises with earnings? i think expectation is down 8% or 9% from where they were can we beat those or will it be worse? >> taking a look at the earnings season and seeing what the next shoe to drop is.

they are asking is this earnings season going to make it worse? and analysts expect this to fall deeper >> gunjan, thanks. the journal calls. money never sleeps get going. thank you. let's talk earnings right now. blackrock reporting a beat on the top and bottom lines earnings came in adjusted $8.93. the street was expecting $8.11 revenue came in $4.3 billion ahead of estimates the stock off $1.66 right now. continue to keep an eye on that. numbers are better on the top and bottom line. big interview you don't want to miss larry fink will be on "squawk on the street" in the 9:00 hour lots to talk about with him with the view on the markets and possibly retirement, too

when we come back, retirement shock are you factoring in life expee expe expectancy larry fink talked about this sharon epperson will be with us right after this thank you! like your workplace benefits and retirement savings. with voya, considering all your financial choices together... can help you make smarter decisions. for a more confident financial future. hey, a tandem bicycle. can't do that by yourself. (voya mnemonic.) voya. well planned. well invested. well protected. ♪♪ i don't accept this. i can't do this anymore. impossible odds, save the world. i'm done. what do you have for me? a new way to transform our agency. strategy to execution. oh, looks my laces have come undone.

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why are 93% of sleep number sleepers satisfied with their bed? maybe it's because you can adjust your comfort and firmness on either side. ♪ your sleep number setting. to help relieve pressure points and keep you both comfortable all night. the queen sleep number 360 c2 smart bed is only $899 - save $200. ends monday with high inflation, many americans worry that they have not put enough money away for reti retirement sharp increases in food may impact retirement savings. another important factor to consider with all of this. you want to make sure you don't out live your money. sharon epperson is here with more >> good morning, becky a study from tiaa institute at george washington university finds that people don't know how to live in retirement which can

keep them from saving to live. many retire in the 60s men live until 82 and women at 85 after they stop working, smafgs h savings may have to last two decades. you can put up to $22,000 in a 401(k) and $7,500 catch up for a total of $30,000 you can put up to $6,500 in an i.r.a. 50 is a key age for adding more money to the retirement accounts also 59 1/2. you want to know that number that is the age you can start to withdrawal without penalty other issues, apply for medicare at 65 where you pay a penalty if you are not covered by another plan and 73 has become a very important age this year. a new law requires you to start

making withdrawals or required minimum distributions in i.r.a. or 401(k). that age will continue to trend higher in terms of when you take the rmd. it increases to 75 in 2033. >> there are exceptions if you are working as a senior or is it age dependent? >> it is age dependent you need to make sure you take it out after the year you turn it was 72. infacreased to 73. >> twhen you think about inflation, it was a crazy exercise to figure out how much money. i remember doing this in the 20s. how long do you expect to live the dumbest question if i knew that, i could figure out the math. >> to have an idea that you will live a lot longer. if you think you are retiring at

60, that is something to keep in mind how much money do you need every month? >> you don't want to out live my money. i want to out live my money. >> you want to do that. >> yeah. what is the alternative? death. not only that, if i save some, if i'm going to out live my money and save it, you want to know when you will die. >> you want to pass it on. >> you want to know when and where. so i won't go there. you don't know that one? these are all things you start thinking about in a few years. >> yeah. yeah >> i do think about it >> i'm kidding >> sharon, thank you these are all good points. >> i'm on record i want to out live my money. i want to out live my money. >> okay. meantime, we will talk about delta airlines just reported earnings let's get to phil lebeau with

the numbers. phil, good morning >> reporter: good morning, andrew this is a beat on the top andy . earnings $1.43 a share if you are a delta invest or, they gave guidance in december it is exceeding. revenue coming in better at $12.29 billion when you look at the metrics within the earns, strong across the board. revenue up 19% compared to 2019. domestic passenger revenue up. international passenger revenue up 5%. corporate travel down 20%. down 20% 80% recovered compared to 2019 it improving every quarter cabin revenue up 13% then there is the question of

guidance that isis why you see the share improve. reaffirming guidance full year between $5 and $6 a share. in the first quarter, delta airlines guidance to earn 15 and 40 cents a share the consensus is 58 cents a share. delta is factoring in the full cost of the pilot contract that it has a tentative agreement with the union they expect that ratification. once that happens, you have full costs factored in. they do it starting january 1st. they are bringing down the expectation in tune of the guidance or the consensus over what the company is expected to earn earning 15 cents to 40 cents in the first quarter. when you look at the rest of the guidance, revenue up 14% in the first quarter. operating margin is coming in at

4% and 6%. lots to discuss with ed bastian. that is coming up in a half hour, guys little over half hour from now when we talk to ed about the fourth quarter and better than expected numbers and about guidance for the first quarter and strength of the market they are seeing guys, back to you. >> phil lebeau, we will see you in it just a little bit. coming up this hour, we should say big banks set to report we bring you the numbers as soon as they hit the tape as we head to break, a look at yesterday's s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure e to our third bark-ery.

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coming up, activist investor nelson peltz and we dig into the goals and his mouse house issues. we dig into the inflation data and u.s. equity futures this morning on the friday down. dow off 52 points. nasdaq off 62. s&p off 13 points. we are coming right back

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i'd like to see this company stop running like a matrix and start running like the companies we have been involved in where they have real ceos of businesses with real p & ls and real projections and cash flows. >> that was nelson peltz yesterday. he opposes the disney app appointment of mark parker as the board chair. joining us is dan primark. dan, what kind of success do you think nelson peltz will have here and clear bob iger and the board are giving him the heisman. >> right now, this seems like a little bit of ego cloash. iger once invited peltz to speak to the board you have iger bristling.

you have peltz in the response yesterday, i guess, or statement talking about how he was pushed off. he was given the heisman as you said right now, i think you have an ego clash. these two sides have to get together and put it behind them. disney has too big problems for this to be the headline. >> i'll do arm chair psycho analysis of what i think bob iger is doing as ceo of disney, i think. he has come back to the company because he loves the company and is trying to set the company up not for the next two years or four years or five years, but a decade this is about, for him, a legacy situation which i think is a different goal to some degree than what nelson may be after in the short-term

i'm sure nelson would bristle he is short-term and bob long term. activist investor gets in and there is an exit i think there is something else going on am i wrong >> i think you are right about that if these two guys were in a room, peltz response is you had a lot of time to set up legacy and you left i h you had to come back now let me get a seat at the table to realize the vision. if we make money in four or five years, good for everybody. >> one of the things you hear inside of the disney universe is they go, ugh what does nelson peltz know about the media business >> i don't think they are wrong. he doesn't have a huge amount of experience in the media business the reality is he has been and this is true of activist this is true of peltz. he is not just tech or consumer

products he has been in a variety of places he will look at it and say the things i want to do, the things nelson wants to do is about structure and a lot about deciding which business lines are working and streamlining some things. iger and disney will look at this and say we are doing this leave us alone peltz says you have an open board seat let me sit there and being a board member/adviser and vote like other companies i can help you grow and adapt to media like i can adapt to other things >> we have to run. it sounds like they put him on the board or you are arguing they should? >> my argument is they will. maybe they should because this is a giant distraction and headache disney has challenges and this is not something to spend time on right now >> it is a longer debate i hope we can have it. dan, have a great weekend. >> you, too.

thanks >> when we come back, earnings season gets under way in earnest. we are expecting results fro moan chase and bank of america any minute now "squawk box" will be right back. ♪♪ built-in security protects me from malware and forgotten passwords. i've got enough battery life to get me halfway around the globe. and lower overall costs leave more money in our budget. for more practical furniture? this was supposed to be hip. no. can you help me up? with mac, configured by cdw, a solution that works for everyone isn't just possible, it's powerful. dad, we got this. we got this. we got this. we got this. we got this. yay! we got this.

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welcome back to "squawk box. bang of america just reporting dom chu has numbers. >> andrew, earnings for what looks like on the wire at85 cents per share for bank of america. as often the case with the bomt line with bank of america, we are evaluating if the earnings per share number is comparable to estimate. it appears to be an 8 cent beat.

refinishtive estimates we are seeing a $24.66 billion revenue side of things to beat the 23.33 consensus. that is equal to reflect a roughly 11% year over year gain. backing down the report, net interest income which is the bank profit margin $14.7 billion is roughly 29 29% year over year gain. investment banking fee at $1.1 billion. that is in line or better than forecast that is, by the way, 54% drop which is not unexpected given the lower deal volumes underwriting activity drops

across the industry. sales and trading revenue. 27% gain here year on year due to fixed income currency and commodity trading up 49% in the fourth quarter equities with a gain of 1% with bank of america focus on the commercial and retail banking with the relationship of half of american households. it did increase the provisions against the possible bad loans in the future by $200 million from the previous quarter to a total of $1.1 billion. that is roughly in line with estimates. the bank points out asset quality remains strong net chargeoffs increased at $169 million from the previous quarter due to higher losses in the commercial and credit card units. overall loss on the fronts still near historic lows we continue, guys, to go over the results and bring you more as we know

shares up 2% as trading volumes pick up. andrew, back to you with more. that's the state of play right now for bank of america shares up 2% on balance >> dom, thank you for that we have a programming note we speak with we'll do that in the alps at the world economics conference in davos at 6:10 a.m. eastern time. jpmorgan trading higher. up 1.25. reporting $3.57 cents a share and the estimate was $3.07 the income was slightly above expectations as well the 34.343 was what the revenue number was and be it came in at 34.5 the so just a little bit above that the provision for credit losses is what we're waiting for.

$2.29 billion. $2.29 billion. now whether that is, you know, a surprise or not, whether it tells you what the bank is planning for, jamie morgan -- jamie dimon has been outspoken in terms of, you know, that there may be something wicked this way coming in 2023. >> although he did recently pull back and say he should not have used the word hurricane when he was describing the potential outlook for things it will be interesting to get his take on where things stand is it a little better than we thought before >> or, you know, category 1 hurricane versus category 5 hurricane? hurricane might be okay, just some rain and wind >> yeah. >> wells fargo i think -- >> wells fargo out as well >> we'll be speaking with jamie dimon on thursday next week in davos. wells fargo earned 67 cents

a share. that was about a penny better than the street had been expecting. 66 cents was the estimate. the revenue line came in a little weaker than had been expected $19.66 billion versus the $19.979 billion that the treatment estimates pinned that number for a lot of different numbers to run through here it does look like net chargeoffs a fourth quarter efficiency ratio 82%. return on assets of 0.61%. noninterest income $6.2 billion. i'm still working on headlines i don't have a number to tell you to tell you what the chargeoffs number was. the profit came down for the fourth quarter because the bank was paying regulatory penalties. those chargeoffs still waiting to get the exact number on that. looks like the stock is off by almost 2% right now. wells fargo talked about how it would be pulling back from the mortgage business. it's always been a huge part of its business, but it's going to be pulling back in that business

and trying to make this a less complicated bank again, that stock down by 2.6% a quick programming note for you, wells fargo cfo mike santomassimo will be on "closing bell" coming up at 3 p.m. eastern time we want to bring in stephanie link stef, let's just run through the numbers that we just heard wells fargo, bank of america, jpmorgan what's your quick take away? >> yeah. so here are the themes for the fourth quarter we probably will see better net interest income. so far we've seen that better at bank of america -- a little bit better at bank of america and jpm jpmorgan i don't have the wells numbers yet. >> 6.23 billion. >> okay. so it's -- so -- and so net interest income sensitive companies, fed funds are up about 160 -- sorry, 146 basis points sequentially so that

benefits some of the more sensitive companies. wells fargo for every 100 basis point move in fed funds, that's 2.6 billion in net interest income not surprised that the numbers were pretty solid there. that's the positive. on the negative side, clearly we're talking about reserve bills, loan loss reserves, net chargeoffs going higher. i'm not alarmed at all at those numbers. expenses are probably going to be higher. the key is going to be guidance. expenses have been running about 2 to 3%. we know 55% of banks' costs are personnel. we know the core pce is 4.7% the guidance is going to be keion expenses i expect those numbers for next year -- for this year and for next year to go higher, maybe more like 4 to 5%. where i think wells fargo can tweak things and outperform is on the expense line and net interest income line so far the numbers look pretty

much in line there was a conference in december and a lot of these companies did give out updated guidance and numbers not a lot of surprises so far if i look at all three, it looks like bank of america has come in a little bit better versus the other two >> give you another headline out of wells fargo they're saying credit losses have continued to increase slowly but credit quality remains strong does that give you -- does that kind of fit in with your theme with where the economy stands right now? >> yeah. absolutely look, i think the consumer is in better shape than people are thinking or talking about. i think real incomes are actually going higher because wages are going up, jobs are plentiful and inflation is coming down, right and that's a good combination for the consumer they've got $5 trillion of savings. i think the consumer is okay but, again, you're going to see reserve builds because banks need to do that given what's going on with the macro and given what people are expecting in terms of an overall slowdown.

it's healthy and these are off of very low levels though in terms of chargeoffs and provisions and that sort of thing so we want to see them do it because we know we're going to slow, but i don't think this is alarming by any means. >> stephanie, i actually applied for a credit card from my bank they finally got me on this thing where 4% you get back for every time you fill up your car. 3% back on restaurants 2% back on grocery stores. they offer double that for the first year i signed up. i always pay my credit card off on a monthly basis the apr ranges from 18.25 to 29.25. that's insame. that seems like usury rates and what they're offering to people. all of these people racking up higher debts on their credit card, the consumers over the holiday period, that's going to catch some people off guard. >> oh, for sure. by the way, i want those terms too so i'll ping you after this

show that sounds pretty good. but, look, i think on the card business it's extremely competitive and we are going to see chargeoffs go higher and that's just kind of a fact as we slow down as a consumer -- as a country, but i think the consumer is actually, as mentioned, in better shape than they have been in prior down cycles and so we're going to see some blips here for sure, but i do think the companies can certainly handle it. but the card business, yeah, that is a completely very competitive business and, you know, there are other places within the banks that i prefer, like wealth management, for example. and i do think, by the way, another piece is capital markets. capital markets were terrible last year, but i think we're coming to the point where you're seeing kind of trough numbers and i think that's why it sets up well with goldman sachs and

morgan stanley into the year as we see a recovery. >> stephanie, thanks very much we will see you in a few minutes. thanks for hanging out with us this morning. >> sure. thank you. when we come back, we are still awaiting more bank earnings citi group is set to report in about an hour. we'll bring you those numbers and market reaction as soon as they hit. plus, an exclusive interview with delta airlines ceo ed bastian. delta shares, they're down by 4.7 p 5% "squawk box" will be right back. you need to pull it together. so you call in ibm and red hat "squawk box" will be right back. % "squawk box" will be right back. % "squawk box" will be right back. e anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world.

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good morning the big banks kicking off earnings season. jpmorgan, bank of america, wells fargo and citigroup all out with results this morning we break down the numbers and get an outlook for the stocks. the sec charging crypto firms with allegedly selling unregistered securities. plus, is the market wrong when it comes to inflation could the fed be forced to hike further than expected? we'll talk about that, too, as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square

i'm andrew ross sorkin along with joe kernen and becky quick. 2 1/2 hours before we're set to open things look like they're going to open down we have a couple of earnings reports. dow off 71, 72 points. nasdaq off 54 points s&p 500 off 13 points. we'll show you treasury yields right now. think about the 10-year note looking at 3.470 the 2-year at 4.1 or 2 oil, wti crude as we always say, if you buy it by the barrel, you can do it right now for 79.05. crypto take a look at where bitcoin is especially with all of the commotion not around just ftx but around gemini, genesis situation with the sec crypto at one point -- bitcoin had gone over 19,000. >> the dow is up now it jumped more than $5 it had been -- it closed about

139.50 had been up to 140, 141. it's now 145 down $4.49 >> bank of america, that also -- yeah, that's okay. that's unchanged >> bank of america, from what stephanie said, it looked like it was the best performer -- >> that was my bophone. >> i'll do it. let's get to dom and he can go over some of the big names, especially jpmorgan. i hope you had a good reason for that it looked good on the surface. >> it did on the surface the reason why there is still some confusion among investors and traders, overall they're still trying to figure out whether or not -- we are as well here at cnbc, trying to figure out whether $3.57 earnings that

were reported from j.p. morgan chase are comparable to the estimates that we've seen. there's still a question about that right now we're trying to ascertain whether that is. that's the reason why there's still a little bit of confusion about the jpmorgan bottom line report what we can say more definitively is j.p. morgan chase's revenues came in slightly better than expected. roughly $35.75 billion versus $34.34 billion estimate. again, these are managed revenues reported by jpmorgan, not fully gap or generally accepted accounting principles there. they're getting a little bit of some help here as traders try to figure this out. also want to get to what's happening with bank of america what we can say is we see bac

betterer than the 77 cent estimate revenues for bank of america, $24.66 billion that does top narrowly estimates for roughly $24.33 billion and for bank of america, again, we know the investment banking revenues were going to be bad, but it looks as though some of the sales and trading results, especially in fixed income, currency and commodities did help void some of the results there. that's jpmorgan and bank of america. on the wells fargo side, again, that's taking the bigger hit right now among the banks that we've seen although, again, off the premarket lows down 2.5% we saw it down 3 to 4% earlier on again, some comparability issues with regard to the 67 cents that was reported it appears as though it could have been a beat but it does include 70 cents in terms of charges for the impact of the litigation that they announced pre back in december now, remember, the operating loss that they had estimated back then was around $3.5

billion if you factor in the big settlement with u.s. regulators over some of its business practices. that number, by the way, has been revised for wells fargo to $3.3 billion slightly better improvements than what it was they had estimated back in december as of overall net interest income at wells fargo was up 45% as we can see year over year the knowledge for the bad loans as pretty much every other bank is doing at wells fargo here has been raised $397 million sequentially, quarter over quarter, to a total of roughly $1.53 billion at the end of december 31st. they, like many others, are seemingly positioning for what could be more bad loans in the future again, that number for allowances down 1.53 billion as of the end of last year. also want to point out overall that they are highlighting wells fargo that they are now again

looking in terms of possible litigation related losses in excess of what they have already accounted or accrued for that number now as of december 31st is roughly $1.4 billion it was earlier this year as high as 3.7ish billion dollars. what that again tells you is that wells fargo is seeing better trends in terms of what it could be on the hook or liable for in terms of litigation costs down the line it's reducing the amount that it thinks it could pay out in excess of what it already has accrued for. so we'll keep an eye out for those. on balance, bank of america shares up half a percent jpmorgan down 2.5% same for wells fargo still awaiting citigroup roughly 8 a.m. eastern time. also want to point out in a note here, wells fargo cfo mike santomassimo will be on "closing bell" and a big interview with brian moynihan coming up on

"closing bell," a cnbc exclusive. two big bank c-suite executives making an appearance to go over the results and maybe they can bring more clarity on what exactly is going on here joe, andrew, becky, on balance it seems to be a mixed picture b of a seems to be the outperformer. stephanie, i think 3.57 is the number jamie diamond then warned about head winds however, we still do not know the ultimate effect of the headwinds coming from geopolitical tensions including the war in ukraine, the vulnerable state of energy and food supplies, persistent inflation that is eroding purchasing power and has pruchd interest rates higher and the unprecedented quantitative tightening jamie dimon, a litany of things to would every about in terms of headwinds. have you looked into whether

there are extraordinary items that would make it difficult to interpret the $3.57 versus $3.07. $3.57 sounds like it might be leenl. >> he sounds like he's in a really bad mood this morning the quarter itself, joe, was fine i really don't pay that much attention to the earnings number because, to your point, it's so messy. all three of these, by the way, are a little bit messy on the earnings figure. the net interest income number for jpmorgan was 20 billion. i was expecting 19 billion the net interest income story is playing itself out the commentary is not helping. expenses, by the way, the guidance forex pens looks like it's a little higher than expected at 81 billion that's a little disappointing. he has said many times they are going to invest in any cycle, up cycle, down cycle. that's why they have such great technology and that's why they are the leader in the industry, right? the problem is it trades at 1.6

times book the rest of the sector trades at 1.2 times book just a couple of other things. bank of america, the net interest income was a little bit light but still up 29% year over year is very good. investment banking, bracing for down 55 to 60% it came in down 54%. in line. no worse trading was actually the bright spot at bank of america. wells fargo, absolutely messy. it's going to be messy for a while given the litigation, given all the things going on. underneath the surface net interest income up 45% that's why you own wells fargo, because of what we talked about before net interest income sensitive banks are going to benefit from higher rates in fact, wells fargo just guided 10% growth for net interest income what i'm waiting for on wells is that expense number. i think that's going to be the bright spot versus other banks that's where they have wiggle room to lower costs. >> okay. but higher reserve costs at

wells fargo. how about the overall market, stef it's now down. we had five straight days of the nasdaq and beginning of the year sometimes a good start allows us maybe to put the year before in the rear-view mirror is this -- december this poor t tend a better year for you or are you still waiting to see >> i think there's a lot of negativity out there, right, joe? everyone is so bearish i think that there are some bright spots first, i think earnings are going to come in better than feared, right? everyone's expecting down 4.1% i think the numbers are going to come in a little bit better than that that is because the economy is actually still doing okay. yes, it's going to slow. but for now we're actually getting some pretty good data points not only here in the states. look at the atlanta fed gdp now number for the fourth quarter is at 4.1%.

that's not a recession by any means. i know we're going to slow the numbers are telling you we still have momentum. then i look around the world right? we're revising numbers higher for europe because of the weather and because of china opening. china is opening, by the way that could be a nice tailwind as well japan. the boj two days ago actually increased their assessment of their economy. these are all little changes this is not big stuff. however, that being said against a very negative backdrop, i think that there are some tailwinds that people are just overlooking at this point. as i mentioned earlier, i still think the consumer for now is in pretty good shape. >> all right, stef still have to go i'd like to put money on who blinks, whether the fed's wrong, the market's wrong about the three-point -- wherever we are on the 10-year today it's almost like an inverted -- what's that called, the fed market inversion we're 80 basis points away from where the fed says we're going and where the market says we're

going. >> i know. >> who has egg on their face at the end. the market rarely has -- >> i think we focus on fundamentals companies have pricing power, costs are coming down. demand will slow but i don't think it's going to contract. >> all right we will see you next week and next week speaking to the big bank ceos live from davos including the ceos from bank of america, goldman sachs, morgan stanley and jpmorgan >> i felt like if he was pushing back but -- >> saying i wish i hadn't said it. >> he said i probably shouldn't have said hurricane. what he just laid out was a tsunami. >> unprecedented quantitative tightening. >> this goes to his nature and the nature of his bank the reason risk management is the what they do and do so well. they're always going to be overprepared for something

that is the nature of jpmorgan that is the nature of jamie dimon being readily prepared for what comes his way that is saying we are prepared for these things and as a result you might anticipate some of the actions that they're taking are going to be a little bit more conservative with those things. >> coming up, delta reporting quarterly results. we're going to bring you the numbers in a minute. ceo ed bastian is going to join us after the break to discuss that quarter "squawk box" coming right back

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"squawk box," delta airlines reporting earlier this morning sales and profit topping estimates. i want to get straight to phil lebeau he has the ceo ed bastian. >> reporter: thank you, andrew ed, better than expected on the top and bottom line. they were saying look it was a month ago and you gave guidance and you're exceeding guidance. what changed >> first of all, great to be with you thanks for coming down our team did a great job in the fourth quarter we had a significant double digit operating margin it did come in a little bit better than guidance a lot of that was cost driven. fuel prices came down a little bit. they gave us a little bit of benefit. we were able to deliver the

revenue. there was a lot of customers looking for airlines given some of the southwest challenges. we've got a benefit from that as well that kind of offset our own decline where we had to take some of our own capacity down because of the weather i want to give kudos to our team our team gave fabulous job and i think this is one of the most difficult years operationally we've ever had as we brought the air traffic system up fully for the full year. $2.7 billion of profits in the year for our company the it's the seventh highest profit level in our 100 year history in a recovery scenario that tells me something about the strength that we're building going forward. we also generate positive free cash in the full year while investing $6billion into the future and the best news of all for our people is after returning be to a great profit sharing payment which we'll be doing on valentine's day, $5508 million will be going out to the women and men of delta airlines, the hard working women and men

of delta airlines for the great work they did this year. >> reporter: once the earnings came out stock dropped on your q1 guidance. you're expecting to earn 15 to 40 cents, street is expecting to earn more. a lot of this comes into what you were baking into the costs of the anticipated other contracts. how optimistic overall, separate from that, are you about what you're seeing in the first quarter? >> well, first quarter is always our weakest quarter of the year. even though we're in a travel surge, that's not going to change as we move forward. so you're always going to see the first quarter on the lower end compared to the other quarters secondly, we did put the full cost for the full quarter in for our new pilot contract on the assumption it gets approved. we're not -- we don't know, it's just an assumption for the street for modeling purposes i think a lot of the street forecasts didn't have the numbers up because we hadn't given them no fault of theirs and the other thing is that as you get into the quarter, you

know, the travel period between really the second week of january to the second week of february is the softest for the entire year. so the fact that we're going to make a profit this quarter, kwlaurts ter -- last year first quarter we lost over a billion dollars. i think it's going to be a good result. >> you've reaffirmed to earning 5 to $6 a share this year. a lot of that is because you're noticing more people who are paying up for premium cabin and that premium cabin experience. if the economy slows down, does that hurt the demand for that premium cabin? >> premium has been leading the recovery so, yes, we're seeing great demand there we're seeing great demand everywhere i don't want to put it entirely on the premium sector. when we were together last month at our capital markets day i spoke of the $300 billion of inherent unmet demand that this industry has not been able to fulfill because of the pandemic from the 2020 to the 2022 period we're going to see and we're going to continue to see tens of

billions of dollars of incremental demand coming into our space. we're already starting presidents' day february the real surge, the pickup in demand, the return to travel i think this is going to go on for several years to come. >> you've paid down some debt. you're expecting $2 billion of free cash flow you're optimistic you might get back to investment grade metrics, next year, the year after. when do you get that investment grade rating how optimistic are you do you see a path to that rating >> i would expect by the end of '24 we'll be solidly in investment grade like metrics. we'll not make the decision. one of the agencies has obtained the investment grade rating. over the course of the next 18 to 24 months we'll get there. >> i want to ask you about the outage with the faa. you know a lot of people in the industry have said for some time, look, they are investing but they need to be investing even more and the system needs to be more robust.

are you optimistic that will happen, that this is going to be one of those incidents that will be a catalyst that there will be the investments made that need to be made >> i hope so it was a difficult day on wednesday for our customers as well as our own employees and candidly it's unacceptable i don't recall us ever shutting down the national air space due to a similar type of technology outage for several hours we recovered quickly the system is safe it works great but we need to do better by the way, this is not the faa's fault. i lay this on the fact that we are not giving them the resources, the funding, the staffing, the tools, the technology that they need to modernize the technology system. we need to build -- we need to fortify it we need to build resiliency. we need to modernize it for efficiency sake. hopefully this will be the call to our political leaders in washington that we need to do better. >> you know how this works in washington everybody says, yeah, yeah, i'm in favor of it it's the other guys who aren't

in favor of this does this perhaps shine a little bit of light on everybody and say, okay, let's make sure we are all giving them the money and the resources that are needed >> i certainly hope so we've been asking for this for years and these outcomes are unacceptable you can't lay it any more clearly than that. >> last question you guys hear a fair amount of grousing from people about what's happening with -- whether it's your sky clubs or premium -- access to premium products you're restricting the access to the sky clubs. frankly, they're overcrowded as somebody who has been through and seen them in person. do you understand where people are coming from when they say, hey, look, we had access during the pandemic and now we don't have access or the delta employees who are now saying we should be able to retain that access. >> well, first of all, it's a good problem with all due respect, it's a great product we've created. the fact that people are trying to get in the door, paying to get in the door is a good problem to solve

we're investing, building additional clubs, additional space. looking at new formats we could apply. the pandemic certainly created an unnatural place -- first of all, people wanted to get to the clubs because of the pandemic and get away from people and now everyone is back it's not any different than what we're seeing with the system with crowded airplanes, crowded airports we have to continue to invest in the future we're doing that even our delta employees, myself, i have decided for the last several months i try to avoid going into the clubs we want our customers in there there's a better future than having people stand in line waiting to get in. >> ed bastian, ceo of delta airlines becky, a day where they beat on the top and the bottom line, it's the guidance and baking in the costs and the anticipated costs of the pilot contracts, that's the reason the stock is under a little bit of pressure right now. send it back to you. >> excellent

phil, thank you. ed, thank you. when we come back, gig workers and side hustlers may be breathing a sigh of relief there's a requirement for payment apps like venmo and paypal but the delay may only add to the confusion around the rules. robert frank will have that story next. by the way, take a look at crypto bitcoin below 19,000 but it was above that level earlier this morning. right now it's at 18,900 crypto firms genesis and gemini charged with the sec for selling unregistered securities. we will have that story in just a little bit "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. what year did richard anbrson found virgin atlantic? the answer when cnbc "squawk box" continues mm-hmm. for $1,200? ga-a-a-ap! did you say "gap"? yeah, he did. he's talking about expenses that health insurance doesn't cover.

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>> announcer: now the answer to today's aflac trivia question. what year did richard branson found virgin atlantic? the answer, 1984 welcome back to "squawk box. gig workers, side hustlers and the self-employed can breathe a sigh of relief

the irs holding off on payment apps with over $600 in income. we'll have the latest for all of the side hustle rules. >> reporter: good morning, andrew the irs is cracking down on that rule this would have required venmo, paypal, e bay to send 1099s to customers with transactions more than $600. that's up from the current threshold of $20,000 those would have gone to the irs. it's going to start next year instead due to concerns regarding the, quote, time line and confusion around the rules accountants say this may only add more confusion here's what taxpayers need to know this does not change the actual tax requirements if you receive any business income through a payment

platform, you owe taxes on those payments only payments labeled as business on those apps will be taxed. personal payments are exempt so if you reimburse a friend for dinner, you pay a roommate for rent, for instance, those are not subject to tax if you sell something for a gain, profits are taxed. so if you sell your couch for more than you paid, you owe taxes. if you sell it for less than you paid, you don't oni taxes. now accountants suggest you create two application accounts on these payment apps if you have a side gig or business so create one for business payments and one for personal, that way there is less risk that your personal payments get reported to the irs or challenged to income, but for now, andrew, the irs is giving you at least another year to catch up on all of this. the. >> then what about a

baby-sitter? in the old days you would hand the baby-sitter some cash maybe or something like that now maybe you venmo it. >> yes. >> historically that cash should have been taxed but wasn't i don't know >> yeah. this is the wall street editorial board accuses the irs now of going after teenage lawn mowers mowing lawns. same thing with baby-sitters yes, unless it's reimbursement from personal. unless it's income earned, you would have to report it. you have to report that baby-sitter income to the irs. that's what a lot of people were concerned about. if you earn over $600 over the year that income would have had to be reported. >> and it sounds like the truth is in '23 it won't have to be reported but in '24 it will. >> that's correct. in other words, you'll start

worrying about this this tax year in 2023 you should start at least delineating in those payment apps what's a business payment or what's a personal payment. pay close attention to that because next year the irs -- those forms are going out next january for this year. >> if venmo, zelle and all those were smart they would have a little button you'd press, business expense, personal expense just on it so it would keep track of it for you >> yeah. most of them do. most of them do. they ask -- >> they already have that? >> they tell you which is it they already have that a lot of people aren't quite as aware. it's unclear whether those forms will include both those forms of income when those 1099s are sent to the irs, that's why you have to keep track of it. >> your kids are on their own next year. yours? >> yeah. it's fascinating because there may be a tax but interestingly, most folks will tell you that

venmo and a lot of the things at restaurants and services where people are paying people electronically, the tips actually have gone up so materially that people actually make more money that way than they ever did before it's actually a -- >> more money than they -- >> maybe it's counter intuitive, maybe it isn't. >> as a waitress you always made more on your tips than from your -- $2.01 an hour. >> people are getting less tips because you're getting less in cash it's called toaster, 20%, 25%. >> not only that, there are people at the register behind starbucks giving all the time if somebody helps you, do you want to give 15%. those are big tips that go right through too. >> still to come, the sec charging crypto firms genesis capital and gemini for selling

unregistered securities to investors. what that means for the crypto market and regulation with a former sec branch chief. that's next. take a look at the futures right now which have worsened. they were down 200 at the moment now down 18le 0 on the dow jpmorgan, that's come up a little up $4. we'll be right back. this tiny payment thing- is a giant pain! hi ladies! alex from u.s. bank! can she help? how about a comprehensive point of sale system... that can track inventory, manage schedules- and customize orders? that's what u.s. bank business essentials is for. (oven explosion) what about a new oven, can u.s. bank help us there? we can serve loans in as fast as 12 minutes.

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welcome back to "squawk box. the sec has charged crypto firms for selling unregistered securities what it means to the already battered crypto market maybe not so battered in just the past week and a half here. lisa braganaza >> bragaza. >> chief enforcement officer of the chicago sec. lisa, why was this something that you think just happened now and not earlier? this was a public event.

it was advertised. it's taken quite some time for this to happen >> right that is an interesting question. the sec has known about this product for a long time. we understand based on a tweet today from -- or late last night from tyler of gemini, we know that gemini had been under investigation for this product for quite some time, more than a year, and yet the sec allowed this to continue for some time they were in talks with gemini and then the crash happened in november, you know, because of ftx. gemini was no longer paying any funds to customers and two more months went by so it seems to me that the bigger issue, the thing that

triggered this was the answer that gemini filed in a separate case, in a class action against gemini brought based on -- on behalf of gemini customers for the failure to continue payments under the gemini earned product program. >> i guess the bigger question is here we have a situation where all of these customers are now in trouble, right? they don't have access to their money. the entire point of the sec is to protect the public from instances like this. this was something the company knew was happening because they were under investigation, something the sec knew they were working on because they were investigating and yet we got to this place >> that is an interesting question the the sec -- the sec has been clear for years that something like this earn program is a security so it's puzzling why

they didn't come to a resolution of this a long time ago, months and months ago. >> right so who do you blame though in this do you blame the sec for not coming to a conclusion do you blame the winkleby twins for offering the -- this product, if you will,s to their customers? do you blame barry sillber for offering this to the winkleby and their customers? how does it line up in your mind >> boy, there's a lot of blame to go around i think barry sillber it sounds like has a lot of responsibility the winkleby twins seem to have relied on barry sillber providing from the parent company to genesis a guarantee or promissory note and they didn't inquire into what that

looked like further. so basically genesis has been operating in a non-solvent way since around june of 2022 and the winkleby twins say, well, we got an assurance from genesis that they were solvent i'm not sure that that assurance that they got in the form that they got it was adequate and, you know, when you're dealing with these sums of money and it's customer money, i would think the winkleby twins have a little bit more obligation to dig deeper to see what's really going on. >> where does the liability lie? let's talk two issues. there's civil liability, that's all this is, a civil case by the sec but also there are customers who are suing, class actions and the like by the way, there's also accusations that the winkleby

have suggested there's been co-mingling and the like which is a serious accusation because all of a sudden you then get into the other f word which is fraud. >> right so -- but i wouldn't minimize the sec's civil charges. they're civil enforcement charges and the sec is seeking an injunction, which, you know, sounds like it's fairly innocuous. you have to comply with federal securities laws with respect to unregistered offerings and registered offerings, but that can be a death sentence for a business like gemini and certainly genesis, too so, you know, they're seeking a lot of the same type of relief that they would get if they were charging fraud but they don't have to charge fraud they're charging a sort of strict liability violation the so it's going to be a

laydown, but they get the advantage now of getting possibly an injunction and disgeorgement, which means give back every penny that's connected to the gemini earn program. that's a lot of money. >> right. >> and then penalties. so, you know, that's -- that's where the sec is going i wouldn't minimize that at all. >> it's a fascinating case we're going to keep our eyes on it the we hope to talk to you more about it in the future thanks >> thanks. still to come this morning, is the market wrong about inflation? steve liesman will join us to have some fed options when it comes to the up side inflation risks. we will be right back.

and in a sign that the fed is concerned about the level of rates, st. louis fed president jim bullard said he thinks the market is too optimistic about inflation in failing to price in some up side risk. so what options does the fed have and what if the market is wrong? steve liesman joins us now with that i'm more about commodities again because of china, steve. i have some empathy for this. >> it's an interesting idea, joe, for sure. let's focus now on the gap between the fed and the market on the outlook for rates it continues to widen nearing levels we haven't seen since this summer raising questions whether the fed is going to need

to respond perhaps pushing rates even higher or if it will ultimately relent. as of yesterday the fed funds future markets look for the overnight rates to end at 4.39%. the feds projecting 5.31% so you can see the gap there. 74 basis points. among the biggest we've seen since the summer when it was 1.14 percentage points the market -- separating the fed and the market that led to fed chair jay powell's speech where he said the fed will be focusing on inflation. it worked then and rates rose. former fed vice chair told the exchange yesterday the fed may have to do more than talk. >> the more the markets don't listen to the fed or don't believe the fed, then the harder it is for the fed's policy to have an effect and it's going to have to possibly increase more than would otherwise be

necessary. >> trouble for the fed here is the market may push rates lower if the feds hike with the thought the fed is making a mistake. i want to zoom in on the right-hand side of the chart we showed you markets just about rejected the fed's forecast for a 5% funds rate after the december meeting. it reduced rates again with the jobs report friday and again with the inflation report yesterday. yet fed officials speaking this week, they didn't change their outlooks at all for hitting and holding that 5% plus funds rate despite the data so three ways this all works out. first the fed turns tail, brings down its forecast. might be some up side in that trade. second, the market and the fed meet somewhere in the middle fed, for example, mike hike less third and most painful, the market adjusts to the fed. that could mean an adjustment downward in stock and bond prices and it's what bullard was

warning about yesterday. joe? >> all right, steve. i had something but now i got thrown off and i don't have anything for you i guess we're -- oh, no, i know what it was. steve, that's kind of interesting that it could be -- that they're counterproductive they're hikes. if people are already convinced they've done enough and more hikes are going to even hurt the economy more, you'd think, oh, my god, they're going to end up cutting rates even more than we thought. you could end up pushing rates down by keeping -- by continuing to raise rates that's insane. that could happen. >> yeah. the hey, joe, i'd like to answer that question. guys in the back, if you could put up that first chart i used what we'll see there is it looks like there's a limit to which the market can bring the fed -- the fed can bring the market to a place it doesn't want to go. look in the middle where the fed upped its forecast from 3.8 to 4.6. the mavlgt was on the way and

the fed did it and the market adjusted look to the right. the fed notches above 5 and the market is just like kareem a abdul-jabbar in the center there. no, we reject it. >> all right, steve. we're in a rush. thank you. that is an interesting point where you could actually, you know, be making rates go down. at the top of the hour, white housenational economic council director brian deese going to join us about the steps the president is taking to tackle inflation, whether he's actually had a deri in that corvette, and much more. "squawk box" will be right back.

i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? 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. i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? 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. quick show note before we get to our next guest "squawk box" will be live at the world economic forum starts on tuesday. huge lineup of guests including brian moynihan talk to the ceo of qualcomm and chevron. you want to tune in all week starting at 6 a.m. to hear from all these names and so much more got a pulse on the economy and maybe get an idea where it's all headed. the latest cpi data showing prices are cooling off slightly but fierears of wage inflation our next guest says he thinks pressure is starting to abate. joining us is jan niffin

you spent last week talking to lots and lots of retailers what did you learn >> there were a couple hundred retailers there. there were discretionary retailers. they think inflation is over and they think the wage problems are basically over they're much more optimistic on inflation than investors are or apparently than the fed is they think inflation in their business at the end of the year, remember, their year doesn't end for a couple weeks yet, is going to be running on 3% where it was running 6% into the last year. and they think it's going to fall over thecourse of 2023 to the 2, 2 1/2% range. they were telling me unlike six months ago that there is no wage pressure right now and that they

can hire about -- as many people as they want not about as many, they can hire as many people they want at the current wage rates they're even looking at the premiums they're paying saying do i still need that premium to bring in beginning wage workers? so they think the inflationary component in their side of the business is basically over and it's going to fall faster in goods than it does in expenses so their biggest concern is margin impression. >> jan, it falls faster in goods than in services because it started in goods, first of all, and that's where the demand for it was demand for consumers has moved on from goods to the services sector as steve liesman has pointed out, the services sector makes up 3/4 of the economy. inflation in the services sector is the bigger thing and bigger thing to watch do you think what started in the retailers will kind of spread out through the rest of the economy, too

>> it is ever thus and i believe that will be the case. you're right, it will be stickier in that side of the business than it has been in the discretionary retail side of the business it's two pieces, right not only was the demand there but the supply wasn't there. >> right >> the supply is back and the cost for shipping containers is down, putting them on boats are down the transiting the ocean costs are down it will be deflationary in those components in 2023 which is one of the reasons it pulls numbers down so fast yes, i think if it starts on that side of the economy and continues and filters through, the question is how fast will it happen that's not my side of the business, but i'm telling you in my side of the business it's already there and it's going to be down to normalized levels in 2023. >> we're almost out of time but you bring up the idea of margins. what does this do to retailer's margins? if inflation is coming down, that's great news. maybe they have to drop their prices as we saw the discounts in the holiday season.

>> yeah, that's part of why we're seeing it. recognize that's going to be an issue for 2023 so they're looking hard at the expense side of their fwis and they know there may be compression on the market side. >> jan, thank you for the heads up we know you'll be speaking with people at nrf. >> when you get back from davos, i get back from nrf, sort of the same. >> we'll catch up. coming up on the other side of the break, nec director brian deese joining us from washington and president biden's comments that his economy and the economic plan is working. plus, media stocks posting big gains to start the year following a number of analyst upgrades could this be a turn around year we'll get topics in the sector next "squawk box" returns after this.

good morning welcome back to "squawk box. earnings season kicking off. messy results from some of the bank's biggest players we'll get you the results and be citi bank just hitting the tape. shares of delta airlines falls on earnings. less so for first quarter guidance what does this week's cooler inflation number mean for the fed? president biden's economic programs we'll speak with brian deese as the final hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen and we're here with becky quick and andrew ross sorkin we started the session higher pre-market after five straight days of gains for the nasdaq and a pretty good beginning to the year jpmorgan came out with earnings a little bit above revenue was above. jamie dimon did warn of some headwinds. he went through kind of a list of talking points including unprecedented quantitative tightening and words about --

more words about whether -- >> political. >> political, ukraine, you name it he mentioned them all. subsequently jpmorgan their stock is down 4 points we should also point out that united health care, which initially was trading higher, united health care is now adding to the angst it's a very high-priced stock. it's turned around and it does add up to a few points of down pressure wells fargo and bank of america and now -- >> citigroup we want be to get over to dom chu. he has the numbers for us. good morning. >> becky, here's what we have. overall we have the earnings per share looks like it comes in at $1.10 adjusted now it's unclear if that is the kind of number that we're going to compare to analyst estimates right now. we have some numbers here of

$1.16. we're not sure if that's gap earning, accounting principle and whatnot. if you take a look at the overall earnings revenue picture, it is looking like $18.01 billion that is a slight beat on a consensus basis for $17.9 billion. this is a -- unclear if it's a beat or not. the revenues are certainly a beat for citigroup as we take a look at the results elsewhere, the profit's up $1.16. we're looking whether they're comp comparable, whether that will been issue the revenue clear. 16% higher than the same point last year. total revenues at $9.2 billion year on year now within that there's obviously a focus on some of these money center banks like citi within institutional, sales and

trading gained roughly 18% to $3.9 billion now like bank of america earlier this morning, results driven in large part by a 31% gain be in fixed income, currency, commodities. or fic trading volumes that tops consensus estimates. equities trading saw a drop of 14% to $789 million worth of revenue. along that same vein, banking fee revenues fell by 58% to $645 million which still, by the way, does top estimates citigroup not immune as others aren't immune to the dry up in deal volumes, underwriting activities, ipos and whatnot facing the rest of the business and industry on the personal banking wealth management front, the other big psy of citi's business, that side faces individual high net worth individuals. up 5% to $6.1 billion.

they were driven by 10% gain in personal banking to 4.4 billion. citi did see double digit growth we're going to comb through the rest of this for the other big numbers, net interest income, credit losses for the future for now we're, working to see if this is comparable to analyst estimate on the bottom line number revenues do beat but on balance you can see the shares down in the pre-market trade, becky. >> dom, i'll add the fourth quarter results included divestiture of $192 million in earnings before taxes, $113 million after taxes because of the gain of a sale i don't know if the analysts included that or not you can see down by 2.36% and we will continue to track that. it's keeping pace with what we saw from jp morgan.

>> no. forecast, loan loss. >> bad loans. >> credit provisionals. meanwhile, should we talk delta airlines for a minute? >> sure. >> why not >> delta airlines out with earnings that stock down thanks to first quarter numbers. delta ceo joined us in the last hour. >> one of the most difficult years operationally we ever had as we brought the air traffic system up fully for the full year $2.7 billion of profits in the year for our company it's the seventh highest profit level in our 100 year history in a recovery scenario, so that tells you something about the strength we're building going forward. >> ed bastian commented on this week's faa system outage he didn't blame the faa. he said they are not getting the funding, tools, technology they

need to modernize. december cpi inflation numbers. it did show a cooling meeting expectations and amounting to the largest month-over-month decline. >> it all adds up to a real break for seniors and more prove my economic plan is working. >> joining us right now is national economic director brian, they have this as the lead story, inflation down for the first six months in a row. i'm sure you want to talk about that >> it's great to be here yeah, we were heartened by yesterday's inflation data it was the sixth month in a row of decline i look at last year's last

quarter. core inflation 3% on an annualized basis those are down from double digits early in the year and we've seen that progress on the inflation side while maintaining a resilience in the labor market that you all have been following as well as a resilience on the consumer side. bank earnings. one of the things that's been notable is in the past six months in addition to inflation coming down, real wages have actually turned positive we've had real positive wage growth for the last six months what that's doing is that's helping to sustain the consumer and maintaining these historically low levels of credit card delinquency, mortgage delinquency even as we see this uncertainty in what is an uncertain economy right now, we are continuing to see these positive signs that this transition that we've been talking about for some time to more steady and be stable growth is not only possible but looks increasingly likely. with all of that said, we take nothing for granted. there's a lot of risks and

uncertainties out there. our focus is on how can we keep this going from a policy perspective. big focus on how we can keep the cost reductions going from health care and energy. >> the federal reserve is very concerned. part of that is the wage inflation you were just talking to the idea wage inflation is something you have to be very careful of it gets more endemic and harder to stamp out there's another measure that in december if you look at inflation, ex, food, shelter, that that inflation was up by 6.8% on a year-over-year basis that's another concerning point. that's why fed officials are just going to stop i'll leave the actual monetary

policies to the fed. i will say as we look at the inflation picture it is helpful to decompose it. housing where we're continuing to see printed inflation economic data we're seeing rents come down. very significant reductions in real time housing crisis the largest since the great recession. then there's the category of services x housing it's still at an elevated level. it has come down and moderated and i think a question we will all focus on is do we continue to see that moderation as well but the big question is could we see this progress on inflation without giving up all of the economic gains that we've made the data should lead everybody to be more confident that that is possible as we look into an uncertain path going forward the one thing that i would flag on this front though is that the

policies we have taken and put in place to provide a long-term certain investment context for investments in semiconductors, innovation, clean energy infrastructure are really now going to take hold in 2023 companies were looking at their forward investment for the next couple of years. i hear a lot that notwithstanding the uncertainty in the first, second, third quarter of 2023, the investment environment over the united states in the next two, three, five years looks very promising particularly if we look globally those are things we need to keep our eye on, but i think there's reason in this data to see a pathway where we come through this historic transition, we don't jettison all of these economic gains we've made, get to a more stable position of growth and see more of that productivity enhancing investment we need across the economy and an area like semiconductors is case in point. >> we try to figure out what the market's telling us versus what the fed says it's going to do,

brian. you're looking at that going, i don't know some of the recent wildcards is the reopening of china we seem to be making -- maybe we're making some gains on the sticky part of the inflation on the wage side, the labor side. we saw a cooler number what if inflation comes back when china reopens europe, things aren't as bad as they could be. you could see commodity inflation. should the fed see that as transitory and not worry as much as what's in the service sector or the labor sector? >> well, look. there's a reason why economists and the fed focuses onco core inflation. i think you're right as we look into 2023 into global energy markets we have uncertainty. we have uncertainty with the pace of china's reopening. we have the uncertainty with the ongoing war in ukraine

i would say compared to four, five, six months ago when we were thinking of risk and risk uncertainty. a love of us wrf projecting -- we can't take anything for granted but a lot of the worst scenarios of that are behind us. obviously if the reopening path happens and if europe does better through this transition, that will mean more demand globally, but i think it also needs to be met with a supply response on the energy side as well that's something we have been working for some time. all of which is to say those are important issues, issues we are certainly working on from the policy and diplomatic side they do have more volatility associated with them we saw them in the food inflation data, of course, core food inflation has moderated that's typical for those with

eggs, prices are' regulated. it's obviously not something that's about the long-term dynamics of inflation in the economy. >> brian, we've got the bank earnings today the banks have done okay because of higher interest rates to some extent, but we also know that they're taking bigger loan losses that's what we've seen across the loan loss reserves to prepare for the businesses not being able to pay their bills if you look at those things do you think the fed is being conservative or is that what they should being doing? is. >> the way i look at that is where the american consumer is and where their balance sheet is how are american consumers and families doing in the economy. this is where the person who is

paying for health insurance, at the pump, can send their kid to college and get an education that reduction in gas prices is really meaningful for the american consumer. probably almost 200 bucks a month in additional savings for a typical two-car family and also we know when he they come up. i will say a note on the household balance sheet which affects the bank earnings. if you look at the core metrics of economic security, does a family have health insurance are they delink went on their credit card? are they deal link went on their mortgages? on all of those the levels where we are now are significantly better than before the pandemic. we are seeing movement in some moderation, in some cases a

course the delinquency, overall defumpt and that they were in a stronger position. that's a sign we should feel like we've made a lot of progress over the last six months on that front and obviously that means we've got to keep this momentum going, keep what we're doing going as we move through this transition. >> hey, brian, there's a complicated maybe political messaging question, i don't know, which is really about employment and unemployment. what to you think a completely palatable unemployment figure could look like given what the fed is trying to do to slow inflation down it is likely unemployment will have to go up. i don't think jay powell will finish until unemployment is higher than it is today. as you can imagine, it becomes a conundrum in terms of how the administration may want to explain that to the public >> yeah.

well, look, over the last six months we've seen headline and core inflation come down a lot of people said that wasn't something that's possible or feasible that's now happened. looking forward, i think it's absolutely the case that we can maintain, strengthen and have resilience in our department while making the progressof seeing inflation come down the labor market dynamics that we have today are resilient and strongs but also unique, historically unique. as you all have talked about repeatedly, we have a very significantly elevated number of job openings and job availability that's something we're watching if you see some of that come down certainly when i talk to operating ceos, a number are saying some of what we're thinking of doing is taking down some of the additional hiring that we would have done.

so the labor narkt forces are unique the last six months should give us more confidence that the core message that the president has been saying is possible, which is we can bring inflation down we can get prices down for families while maintaining a strong and resilient labor market and while maintaining these economic gains one of the things we need to do on a policy perspective. obviously that goes to one of the key things congress is going to need to do, which is raise the debt limit without conditions >> yeah. that's a much longer conversation i'm sure we'll have you back to talk about it. brian, thank you brian deese. >> thanks, guys. big-name media stocks are surging to start the year. eric cantor's going to join us on the ma landscape and i'm going to ask about kevin mccarthy's first week as speaker in d.c stay tuned for all of it

you're watching cnbc i'm so glad we did this.

i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones i screwed up. mhm. i'm so glad we did this. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? 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. i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? 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 futures sitting at the worst levels we've seen after a pretty good two weeks in a row. some gains but we now are down

244 points on the dow. 117 on the nasdaq, 119, which was up five straight days and the s&p now down about 35 points. 2023 so far, counter intuitive, has been a strong year for streaming stocks. they're all up over 10%. we want to know if this is a flash in the pan or the start of something great. is it because they've just been so beaten down what is it is happening here john crockett. what is happening, barton? >> well, i think what is happening is that the year is starting out better than had been feared. we have a lot of worries about the macro. we had a lot of worries and then we have a goldilocks inflation yesterday. we have warner brothers disdo

have -- discovery, we have it coming out at the citi conference and talking very confidently about what they're seeing in their business and talking about some loose kind of representation of green chutes that they then hasten to kind of back away from but the chatter is better than i would have thought a lot of the stocks had ripped i had spogs to buy some special situations as my first priorities in media and those stocks have worked as well so i think part of it is just, you know, a broad, you know, return of comfort. >> right do you feel comfortable with the fundamentals here? do you see this as a

fundamental. i'm not sold the secular headwinds on pay tch aren't still there. people are still cord cutting. perhaps it being a seller rated in the third quarter, perhaps not in the fourth quarter but it continues at pace, meaningful pressure the macro, i have my fingers crossed that could be better if the economy feels we can hang on to a better macro, you might be able to get somewhat more constructive you have to weigh that against the secular headwind. >> what's a fair -- part of this is a multiple story more than just about anything right at this moment at least. >> yeah. >> what's a fair multiple for the stock and which ones do you like and which ones are you more reticent about >> okay. so i think you got terminal value kind of questions.

i would mark it at a low double digit for the heavy media focused companies where i think the growth and streaming offsets meaningfully it doesn't make them a growth story. in terms of things i like, i've been lacking some special situations that don't care about the macro. i put liberty braves i put six flags which has a real estate play. i put lions gate which is splitting up into a content and streaming business on to our best ideas list for 2023 if you feel better about the economy, i think you can look more constructively at things that have been beat up like disney i think you can feel maybe a little bit better about an apple. so i think you can look at -- i wouldn't go too far down the quality chain. i'm not ready to bank on this economy out of the woods yet i'd like to have some protection >> where do you land on -- look, we're looking at netflix down 37%. warner brothers discovery off

55%. paramount still off 44%. comcast, parent company of this network, down 25%. where do those fit in your matrix >> okay. so, look, i think the -- i'm not a buyer today of warner brothers, discovery, paramount i have sell ratings. those were good ratings last year, they've been challenge ratings this year because of the macro questions. i'm not changing that stance today. i think that the -- you know, the cable companies, i've got a neutral on comcast but i've liked a little bit more charter. very steady eddie subscription businesses great share repurchase stories and a very durable business that people will hang on to even when times are tough. they'll hang on to their broadband. i think i'm still positioning to be careful and -- but clearly we're mindful of the macro which might be changing before our

eyes right now. >> barton, we appreciate it this morning. have a great weekend. >> great thank you. >> we'll see you very, very soon thanks. when we come back, much more on this morning's earnings season kickoff by the way, check out the big banks that posted the numbers this morning here's the reaction in the market so far. jpmorgan down by 2.7%. bank of america down by 2.4% wells fargo down by almost 4%. "squawk box" will be back after this quick break

welcome back to "squawk box. all sorts of earnings coming in. things are coming down comments from jamie dimon coming down dow down 256 points, nasdaq down 175 points s&p down 37 points crypto is up under 19,000 but still it's been on the move despite all of the ruckus over both ftx and now the gemini/genesis situation let's talk tesla because it's cutting prices in the u.s. and europe it will qualify more tesla models for a federal tax credit. that includes the model y, suv and model 3 sedan. dropping from 63,000 to just under 54,000 the model y dropping from 66,000 to $53,000

we'll see what that does for the company earnings stock should mention the result. these coincidentally this morning off 6%, 5.5%. new this morning, crypto.com says it will reduce its workforce by 20% the company's ceo cited the reason, he said ftx collapse which he said significantly, in his words, damaged trust in the industry the sing dwa poor based company's announcement days after rival exchange coin base announced similar cuts. coming up after the break, what the new gop house majority means for business in the next two years. key issues like government spending and the debt ceiling. former house leader eric cantor will join us stay tuned, you're watching "squawk box" live from the nasdaq market site in times square

welcome back to "squawk box" here on cnbc we've been watching the futures this morning and it has been a steadily decreasing picture since we heard from some of

these big banks. you're now talking about the dow futures off by 275 points. s&p futures down by 38 nasdaq off by 127. the dow was actually in positive territory. the dow when we started the show 2 1/2 hours ago. s&p and nasdaq weaker but you are talking about strong gains since the beginning of the year for all three of the major averages s&p has been up and that's the first time that's happened since july of 2022 let's take a look at the big bank stocks that are really responsible for the drags that we've seen for the most part bank of america down by 2.6% same for j.p. morgan chase wells fargo off by 4%. citigroup shares are flat. two more earnings movers dow component unitedhealth which came out early this morning be is off by less than a percent and delta airlines is down by about 5.7%. inflation, friday the 13th

giving investors a lot to think about early in the year and what's happening in washington and what it means in business. this is especially true after what we saw, the 15-round brawl. eric cantor now vice chairman and managing director of moelis and company. you're a really good person to have good to have you on set and in the studio, eric now you're in the business of worrying about money and investing people's money you used to be in that other business is there anything that people at home, investors should take away from what we saw with speaker mccarthy being elected and having a slim majority now, republican majority in the house. does it mean anything for investors? >> sure it means something. >> what's it mean? >> what it means is we have now seen the reflection of the american voter desire to have a

check and balance in terms of what was going on -- >> barely. >> -- the last two years. >> barely. >> but, you know, the bottom line is there is now a republican majority in the house and what that means is you won't see this continued skyrocketing in spending. you won't see any discussion of any kind of tax raises what you will see is i think an effort underway in the house to provide some oversight to what i believe is a hyper regulatory mode against business on the part of this dministration. >> but with what we saw with -- seeing how it works now to try to get a majority, what does it mean for doing anything? let's say -- could those 20 guys prevent us from raising the debt ceiling, shut down the government >> so we've sort of -- i've seen this movie before, right >> yes. >> because when i was -- >> it can happen. >> right but when i was majority leader and kevin was the whip, you

know, we were in a similar situation advice a have i the obama/biden administration we had a much bigger majority. that has to be said. he's got a much more difficult challenge this time, but in that process we sat down and there was discussion we had actually meetings with vice president biden then for many, many months and what happened in the earned was a reduction in spend ing. it did happen. there was almost a trillion dollars in additional savings compared to the budget baseline. so i -- listen, i think they get there, but it's going to be a very messy process but we've seen this before and i sort of think people in the markets understand that. >> you do? we just talked about your political life the life you're in now, making any money m&a wise do you expect to how's the fed doing? what's it doing? why are these -- why doesn't the

market believe the fed >> it is -- i've listened to discussion earlier today that you were having about the sort of disjointed fact that we've got now between markets and the fed and, listen, from moelis's standpoint, certainly this year and the one we just came off of, no question deal volume's down you've seen be it in all the earnings reports today on the brackets no question it's about high interest rates, challenging credit markets, inflation and the geopolitical uncertainty that i know we'll all talk about next week. i think it's all weighing on things, but what we're seeing at moelis is increased activity on a dialogue front because when you've got discounted volatility, people want to sort of begin to rethink the competitive position where are the opportunities in a time like this. >> are you seeing that more as a divestment because people are hurting or are you seeing that more as a situation of folks who feel good about their business and have some semblance of

confidence they should be buying something on the cheap or something else is it. >> i think there's both. i think people are re-evaluating their competitive position given these macro elements i do think you've got some increased activity on the activism side too right now and that also can produce m&a. it can produce sales of parts of companies as we've been talking in many of the discussions this morning. there's that and i do think because of the situation in the public markets there's a lot of dialogue on the part of the sponsor community about take privates and of course you continue to have the challenges in the credit markets. >> right. >> gets back to the fed. when is that certainty going to come back? so all of this, i think, has produced a lot of robust dialogue, and i think our view at moelis is we're going to see a pent-up demand for m&a given where we are and what we came off of. >> on a relative basis -- no, on an absolute basis interest rates are still low.

on a relative basis this has been jarring and it's gone up quickly. what kind of economy can we expect six months from now or a year from now? is the fed down enough do they need to do more? >> i think given the fact we're a 70% consumer economy, the discussion about inflation, i think, is very meaningful to go in and then to apply that to the prospects for business, right? and so, you know, it is about inflation and brian deese was on talking about all the -- what he said was good news, but in absolute numbers people are still facing significant costs you know, services, going out to eat, i mean, it -- this is real for families and we've got to get a handle on that i'm not sure that the fed in terms of trying to destroy demand, trying to get wages under control is going to be okay with that to your point, this uncertainty is what is challenging certainly on the deal side of things

it's challenging everywhere. let's go back to your question of d.c., that that uncertainty doesn't add to the aggravation. >> can i ask you one regulatory question about transactions right now? >> yes. >> we just had lena in last week. >> saw her. >> given what she's doing, given what the doj seems to be doing, how far due do you think you can go as far as headline grabbing transactions >> andrew, i think no question that when you think you have a high profile transaction, everyone has to sort of reset their expectations for the time it's going to take, the effort it's going to take -- >> but you just mark your calendar and say we can't have this conversation until '24 and maybe '28? >> doj, they've not had a great track record when it comes to

the disposition in the courts. >> if they lose in the courts big time, then -- >> that's where they've been that's where they've been thus far. >> but then you still have to take the risk they're going to take the chance -- >> that's all about shareholders. >> and whether they want somebody else to go first. you go first you attract the attention and we'll sneak in around behind you. >> right i just think the position this administration is taking in trying to change the standard of antitrust is so beyond what's in the law and, you know, it's -- i go back and i -- i point to and give credit to frankly somebody like elizabeth warren because this has been part of her plan all along and because she didn't get the presidential nomination, she didn't get the treasury -- secretary of reasury, what she did is she kept her head down and she put all of her people in these agencies that reflect that view and it's i think very destructive to the competitiveness of our country.

>> what's going to happen in congress now you know these people well are we going to face a government shutdown at this point? brian deese said to us at the top of the hour, let's hope we don't have something like that. >> i don't want to diminish the gravity of the government shutdown but a shutdown is different than a debt ceiling. >> debt ceiling. >> the debt ceiling default, i think that there is a way in normal course to get something done just as we did back in 2011 with obama/biden, but if not, if the resurgents dig in, there is a fail safe what they call break glass way to make this happen. the democrats are already talking about what's called a discharge petition to leverage their numbers in the house and to attract enough republicans to

go along with them to get something passed they're already talking about that so i do -- i think we're going to get through this, it's just going to be a lot of drama. >> the journal points out it's weird to have two special prosecutors for what they say are going to be the two presumptive nominees in 2024, joe biden and donald trump do you think donald trump -- you're from virginia, it's a battleground state i don't know what you -- you have a pretty good feel for that >> first of all, i'm from virginia i'm looking at glenn youngkin, right? >> but the journal seemed to assume that -- i thought that after the last election that that was much less -- >> joe, listen, no question that donald trump is still, is still the most impactful candidate in terms of the republican base there is, and if you have somebody that comes in with a block of voters the way he does and then there are another dozen candidates that hop in, you're going to see a replay of what happened in '16. so i do think that he is the

strongest right now. we've still got a long way to go in terms of -- >> does desantis outperform him? >> in florida. the in florida in florida but i think in terms of the republican activist base nationwide, no question he's still the strongest. >> all right eric cantor, thank you the it was pretty tumultuous when you got primaried, too, wasn't it? >> i always said we may have been the tip of the spear on the rise of populism certainly my party and -- >> you like what you're doing a lot more >> i feel very lucky to be at moelis and to experience the markets almost practicing what we preached when we talked about the private sector when in public office. i was in public office for 25 years. >> see you in vodka -- vodka and

caviar in davos. they're solving climate change with vodka and caviar. >> absolutely. absolutely but you're flying commercial >> absolutely. >> good for you. coming up, jim cramer's first take on the final trading day of the week. we'll be right back. new retinol overnight means the smoothing benefits of retinol are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin. this tiny payment thing- diminishes wrinkled skin iis a giant pain! hi ladies! alex from u.s. bank! can she help? how about a comprehensive point of sale system... that can track inventory, manage schedules- and customize orders? that's what u.s. bank business essentials is for. (oven explosion) what about a new oven, can u.s. bank help us there? we can serve loans in as fast as 12 minutes. that would be a big help! huge! jumbo! ginormous! woo! -woo! finding ways to make your business boom. that's what u.s. bank is for. we'll get there together.

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maybe it's because you can adjust your comfort and firmness on either side. at&t 5g is fast, your sleep number setting. to help relieve pressure points and keep you both comfortable all night. the queen sleep number 360 c2 smart bed is only $899 - save $200. ends monday welcome back treasury secretary janet yellen making some comments about inflation now on npr she said inflation has been,

quote, quite modest for the last six months although rent is still high and rising. she said that she expects rents to come down substantially in the next six months. she said her priority now is to see inflation come down to lower levels and keep the job market strong we'll see where it all heads, of course. >> all right we've big banks that have reported this morning, been waiting all day to get down to the new york stock exchange, check in with jim cramer to get your thoughts. not just the four big banks, but blackrock too, and i know you've got larry fink on. what are you thinking? >> there's a lot of people, including the analysts, who didn't understand that there is a dramatic repricing going on. we thought that you were making a lot of money if you were a banker off the deposits, because you can invest the deposits at a better rate. they didn't do that as much as we thought, so the net interest, free money, basically, did not develop. however, i want to point out that, for instance, wells fargo, that's a regulatory story, and they're getting closer to being

finished with the regulation, so i wouldn't sell that bank of america was definitely the cleanest one of the major banks. i thought jpmorgan did a terrific job, but had run into the quarter. blackrock is amazing what can i say i'm glad we have larry fink. they just make a lot more money than people thought, even though the stock market was down. i know that wells is looking awful. i think charlie scharf is going to tell a pretty good story. i don't have as good a line on citi yet because it is the most opaque of all. brian moynihan really delivered. that stock is correctly up and probably up more >> bank of america's up or down by 2.8%. >> i'm sorry, bank of america should be up >> okay. so, i mean -- >> i'll tell you this. there's a lot of mistakes about how people were looking at how these companies were going to be doing, and that's the problem.

i mean, wells, they have to spend a lot of money getting past the regulators. why don't people realize that? they just didn't seem to realize that they're getting out of a lot of businesses that are not good they're getting their expenses down jpmorgan is just a clean, solid quarter, but jpmorgan ran in advance. i just think that there are some misinformation here, becky there's just misinformation. >> we just had eric kanter on, and he threw out an interesting line, that he thinks m&a is going to be up sharply this year because prices are down because people need money, if it's going to be taking out money ahead of stuff or repaying back loans because there's all this activist activity that's taking place. does that make sense to you? that's a big part of the reason the stocks are down. >> normally, it would, but i've got to tell you that the ftc, lena khan is so anti-every single merger. jonathan kanter at justice, he, too, is inclined to -- just look

at the -- he stopped a book deal i mean, a very small book deal, random house, simon & schuster, so i'm not going to count on it. the regulators under this biden administration are too negative, but the banks are doing much better than it seems this morning, and i don't want people to make quick decisions about this group it is very undervalued >> jim, we are looking forward to this conversation with larry fink this morning. really interested in hearing his views on the markets, what he's expecting on a lot of different fronts, so i know we will see you with that in just a few minutes. >> thank you very much, becky. great to talk to you >> thanks, youoo t, jim. we'll be back with more bank earnings stick around

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♪ welcome back to "squawk box" this morning the first big morning of earnings season is now officially in the books. among the highlights -- i don't know if these are highlights or low lights joining us now, hightower's chief investment strategist, stephanie link what do you make of this wells fargo is off close to 4%,

jpmorgan off i think those jamie dimon comments have spooked the larger markets, and i'm curious if he's spooked you. >> no, he didn't spook me. i think that bank themes are -- they're playing out just like i thought, right you saw pretty good net interest income, and that's actually a highlight, for sure, especially if you look at the numbers bank of america, net interest income, up 29% year over year. wells fargo, up 45%, year over year jpmorgan, up 48%, year over year so, net interest income was at advertised these companies are rate sensitive. better trading overall, and i give a shoutout to bank of america at 29% trading year over year growth, but citi group had 31% fic numbers, which is impressive, so those are the two positives. i think expenses came in line. i think the guidance from wells fargo on expenses, much lower than expected at $50 billion it was $54 billion at two years

ago. fees are ugly, but at least they're troughing in terms of the fee business, especially capital markets, so i think it's basically as expected. i'm surprised the stocks are down, but they always trade weird around the reports i think you buy wells fargo on weakness, add to bank of america. jpmorgan's just a little too expensive for me, but really solid report overall >> but there's not a takeaway here, to you, about the larger economy, either pro or against >> i think they're hanging in. i mean, that's positive, quite honestly >> so, when you look at the dow off close to 300% -- not 300%. that would be something. 300 points you think that's a mistake >> i do think it's a mistake, but the fact of the matter is, we've just rallied the markets are up 4% year to date, and the nasdaq is up 5% year to date we're up, what, four, five straight days, so we can pause a little bit, but i think overall, earnings are going to be pretty good by the way, shoutout to united

health care. i know we're not talking about that all they do is continue to beat and raise and just delivering, i mean, on a very consistent basis, and so that's a highlight as well today. >> obviously, going into next week, and we're going to talk to a number of ceos in davos. often you get a critical or worrisome sense when you're there. sometimes also the counter -- what do we say countersign. >> we get the worse at the bottom and the exuberance at the top. >> what do you want to own going into what is going to be a continuing parade of earnings? >> well, i still think that -- well, first and foremost, i want to hear what the bank ceos have to say about the yield inversion, because obviously, that's the biggest conundrum at this point we're all watching it. and also, i want to hear a little bit more about the consumer and inflation and that sort of thing. i think they'll be pretty conservative overall what i want to own is what i already own and am overweight in my portfolio, and that is cyclicals, industrials, materials, energy, financials,

and on the margin, i have been adding to discretionary because those stocks have been hit really hard, and i do think the consumer's going to hang in there. >> steph, i want to thank you for your analysis of all of it join us on tuesday where we'll see you in the alps. >> yep >> from davos, switzerland >> rise and shine. >> don't forget to boot your booties on "groundhog day." ♪ good friday morning, everybody, welcome to "squawk on the street," i'm david faber with jim cramer. we're live from post nine right here at the new york stock exchange carl has the morning off let's give you a quick look at futures. of course, we get started with the final trading day of the week, 30 minutes from now, you can see that we are expecting a lower open, so to speak. equities will be down across the board when we begin trading, it would appear big day for financial sector earnings this morning. in fact, blackrock's ceo, larry fink, is going to join us. that company