a miss cisco chief, chuck robbins uber ceo dara. a final check on the markets, what did you have? you were eating when we came back >> a protein bar >> a protein bar and i think the viewers might have seen me eating it. >> they saw and heard and enjoyed it with you. >> bye, everybody. >> we'll be back tomorrow. good tuesday morning, everybody. welcome to "squawk on the street." i'm david faber with jim cramer. we're live from post nine at the new york stock exchange. carl has the morning off we get started with trading. 30 minutes from now, first trading day of the week, of course, but it is a tuesday, don't forget you can see, we're looking for a slightly lower open. let's get to our road map. it starts with the banks which we also started with on friday this time, goldman posting its

worst miss of earnings in a decade morgan stanley, though, notching record wealth management revenue. those stocks moving in opposite directions we'll talk a bit about activism. ryan cohen takes a stake in alibaba, increasing for the stock buyback there, and crypto comeback bitcoin rallying 28% that's just so far for the month. let's begin with the holiday shortened trading week and quarterly results from goldman sachs and morgan stanley let's start with goldman, which clearly does not appear to be a good quarter i want to get your take. >> well, we needed to have more m&a in order to offset some of the things we saw both management and expenses not good spending a lot of money, david, on consumer. not being offset by anything that's involved with investment banking. so you also had some -- a big

balance sheet. they spent a lot of money and it wasn't clear, the return they got on it. so i would use the term disappointing straight out i think they're going to feel disappointed it's not up to snuff of goldman sachs. and they didn't make nearly as much off of their equity i think you and i both know, that's pretty much what you need to do. >> noncomp expenses i'm looking at a quick report from jpmorgan, a flash report after the earnings noncomp expenses up 13% year over year. >> that's not acceptable either. look, it would be one thing if you had a gigantic wealth management business or a big jump you saw at morgan stanley another thing if you said, look, we have a big compensation increase, but we don't have -- we don't have a complement growth in equity earnings. david, this was a quarter where goldman, i think, should have made more. you can fall back on how much

they made last year, but i do think it exposes there's a little bit naked here that you need some m&a and some investment banking to offset the growth, what they had in wealth management and david, i know they're going to say the card business is not the problem. but i remember another banker, another ceo at a major bank that i'm not going to reveal who said you can't touch the card business if you have to do it from scratch that's important it's not clear that they're getting the return >> we should differentiate between the card business and also the other efforts in consumer banking, namely the markets named that people know well, where they seem to have taken their foot off the accelerator. >> they made a couple acquisitions david, goldman sachs is a high net worth company. that's who they work with. and this lower net worth, i think if you can do it all -- look, if you had artificial intelligence, by the way, the artificial intelligence of wells

fargo is going to be ignored today, but they did great things bank of america, the technology is superior. i didn't see anything in goldman to like. i know that's -- >> the equity, for the fourth quarter at 4.4%. >> that's unacceptable an unacceptable quarter. >> contrast that with jpmorgan on friday, we got results from all the banks. we sat here watching the stocks begin the day down, ending the day higher something you had actually called for, because you were relatively positive. again, i'm contrasting jpmorgan had a great quarter >> it was the most defensive buy. you can say listen i want to own a bank during this period. they have superior worldwide businesses number one in pretty much a lot of the businesses that made money, but most importantly, jpmorgan is killing it on their holdings, how much they have so did bank of america i think bank of america deserved better, but jpmorgan will be the

bank jpmorgan at $1.50 is probably wrong. wells fargo pulled the trigger, went to hold that's probably excessive given the fact charlie talked about the end of the liabilities and the beginning of playing offense. if i hadnone there would be $6 billion in problems there from the old regime, i would have been shocked that charlie took the job, but he's almost there almost there is hard to believe given this is -- but this is the year >> that stock did perform quite well as the day went on friday i want to come pack to goldman and hit morgan stanley because we're getting the conference call when is the goldman conference call it is 9:30 >> you're going to hear unacceptable >> again, looking at a couple notes. focus could be on the ability to control cost, generate positive operating leverage as they undergo at least one analyst says is a strategic realignment. >> they're not going to do

layoffs. they're going to say they're still hiring and there's no sense of that kind of, i don't want to call it urgency, but a sense to need to do that they're more hopeful about that, don't need to make that, but i think david when youlook at what they made on their balance sheet, it's questionable versus what jpmorgan made on its balance sheet. then you have wells really going pure consumer and trying to get this consumer financial -- the board, that's more than $3 billion. we knew it was coming, but they have nine more consent decrees they have to complete. >> we're talking now about wells? >> we're jumping to wells. i think morgan stanley was the cleanest >> let's get to morgan then. we'll come back to c goldman a b of times earnings were $3.32 a share. a lot of estimates in the high

5s, maybe six bucks a share. >> you're going to hear goldman fall on the sword. i don't think david solomon is going to say anything he felt was acceptable out of this quarter. >> morgan stanley, a different story from james gorman, one would expect, even the quote from the release solid fourth quarter results difficult market environment strong year for the firm, clear strategy, balanced business model, and that got us to an rtc of 16% despite what he calls the complex macro backdrop >> i think that the snap judgment journalists, but not analysts, is that their trading wasn't that good but trading was a strange environment. i'm not going to say this firm -- this is a firm that i almost went to work at, where trading was huge but that was yesteryear. this is a wealth management company, plain and simple, including schwab and they killed it they brought in $50 billion of

new money. almost like, well, black rock had exceptional money. but the number one, you know, still number one in equities trading and they went after wealth and goldman didn't. it's important to distinguish these two. morgan stanley changed its business model >> we talked about this for years. this is not news hopefully to anyone following this. that change has not occurred over the last quarter. that's been many years obviously a number of significant acquisitions along the way too. >> you're right. e-trade. they look more like schwab but i think what's important is that i was shocked that goldman was as badas it was. i thought that they could offset - >> or navigate what was a difficult capital market >> did you see how much bank of america made in fixed income, jpmorgan made in fixed income? these companies. jpmorgan, can i say, david, if you had told me jpmorgan could

make this much without any m&a, i would say it's impossible. jamie dimon is not capable of doing it that was a complete misjudgment by me. i am shocked at how well they were able to put together this quarter. this environment >> there have been these reports of goldman embarking on layoffs. not a surprise >> not true. >> what's true >> playoffs. >> aren't they going to? >> no, they're still hiring. >> they had to hire 3,000 younger people each year to replenish the ranks >> so great your mentioned that. >> they have 48,000 employees. these reports that they're laying some people off are not wrong, jim >> i think they're going to be net long employees by the way, back to office i know you care about them >> yeah. without a doubt. but also technology and engineering, where that's where they sort of have to update. they'll continue to spend. again, that gets back to noncomp

expenses going up. >> yes, noncomp. i would tell you that bank of america has the least exposure to need to upgrade technology. they are very current. they have spent a fortune on it and it's paying off now. bank of america is -- was a clean quarter. jpmorgan, i still think they're underspending on technology. look, wells is -- wells is behind on everything >> we'll monitor the goldman call we'll keep an eye on the stock as well. but right now, two divergent stories. want to move on to another story. >> just another thing, they're my favorites so far, and then bank of america. >> wait, weren't we here on friday talking about wells fargo so positively. >> jpmorgan and wells fargo. one is great and the other is bad to good. look, charlie sharp -- >> you seemed to indicate wells fargo of the stocks, i don't want to put words in your mouth, but the way i took it was more

upside perhaps with wells fargo than any other banks of the big banks. am i wrong >> jpmorgan was a great quarter. distinguished because it made great money without investment banking and m&a. wells fargo is going from bad to good, and the market prefers a bad to good situation with a big buyback and only a $1 million slap before dissent decrees are removed. give me something new, tell me something i don't know, about another industry >> i don't have anything to tell you right now. i want to talk about china actually >> china >> i want to move on to china because that's another important story from this morning that the market is going to digest. >> sure, the fact they're not growing anymore? >> not just not growing. their economy is still growing but their population is shrinking. >> when you have 900 million people with covid, it puts it in perspective.

>> china did post sharply declining economic growth, gdp kaem in at 3%, the second lowest level in three decades the covid lockdowns, they did impact households, businesses. they have been lifted and now they have a lot of covid there at the same time, the economies national bureau of statistics say its population decline last year, that would be the first time in roughly 60 years the decline is very small, but more people did die than were born in the country, and of course, once that begins, jim, it just doesn't stop >> no, and i don't mean to disparage the government too much, but if you do not have seniors on vaccines, then your 900 million covid people will produce a lot of deaths. and whether it's heartless or whether you just think they just discourage use of vaccines because they're western, whether they took the pfizer drug for if you get it for the people who are elite, i think it's a very

suboptimal situation evolving in china. >> now, they of course told us last week it was 60,000 covid deaths many people still questioning that even though it was far above any number they had previously provided, jim >> i think their numbers can't be trusted but the real question, though, is what will the reacceleration of the economy be off of this 3% number given they have opened up again, they have relaxed the regulations to some extent, or at least pulled back a bit, it would seem, in terms of the stringent regulatory regime tech firms found themselves dealing with and there is a lot more commerce about to take place or already taking place despite the fact that many people are getting covid. >> janet yellen was surprised me, top official of china, her meeting will be substantive because she's a hard liner moe of the discussion private equity this morning in davos is about without a doubt, really clear about this, that there's

going to be a thaw that the war -- the cold war is ending i see no signs of that none whatsoever. >> jim, i want to move on to a story you and i have been following as well, as of last week that is this disney fight. because it's a fun one and i say that in the sense of somebody who has covered so many activist campaigns for such a long period of time. nelson peltz is seeking a board on -- a seat on the disney board. he joined us last week as a guest. we had a very interesting long conversation about his desire for that seat, why he's looking for it, what he wants to try to accomplish if in fact he is successful in that proxy fight this morning, i want to tell people now, we have disney firing back. and coming back hard at mr. peltz on a number of different issues that he raised during both his interview with us and his presentation as well in the course of his filing of his proxy.

a number of different things to share with you from the background that disney shares of its conversations with mr. peltz and of the presentation as well that disney is just releasing at this moment. the key thing in the background, of course, that contrast at least with the story that mr. peltz has been sharing is that there was a lot of engagement with disney's board and mr. peltz. that at least is what disney is telling you at this point, beginning on july 11th, continuing on july 15th, july 16th, when actually it was bob chapek who was still running the company, engaging with him a lot of activity involving perlmutter as well still the chairman of marvel >> largest disney shareholder. >> i asked nelson last week when we interviewed him about his relationship with perlmutter and how if in any way it impacted his decision making. he did not really answer that question, per se, other than to say he talks to a lot of disney

shareholders when you look at the background here, you see many references to perlmutter he held a call with chapek in july peltz and perlmutter held an hour-long call to advocate for him joining the board. also several calls with christine mccarthy in august multiple calls with chapek several calls with christine mccarthy in november perlmutter separately contacting them to advocate for peltz in november that's interesting, the background here contrasting from disney's perspective saying we had plenty of engagement we took peltz seriously from the very beginning, but what they get into are the reasons why they don't want to offer him a board seat >> they're putting out the idea that he's disruptive one person can hurt a board. i understand entirely about the perlmutter relationship and perlmutter correctly saw there

could be a gigantic write-off with fox, that write-off with fox has dogged iger, who is sensitive to it. but it's his it's not chapek. >> they are very sensitive to fox, as you say. they spend a good amount of time in their deck here responding talking about the fox transaction being critical to position in the company for the direct to consumer business, of course, they point out as well that remember, they did get $15 billion back from our parent company, comcast, when they bought sky out of that here's one of the more damning things that comes out of the background despite months of engagement had not presented a single strategic idea for disney, that their assessment seemed oblivious to the secular change ongoing in the media industry >> this is a vicious quote i know this instantly got very personal i do believe that peltz to some degree feels there needs to be a

discipline in the board. there were some people who felt this board lacked leadership the difficult thing is mark parker isn't here. a board member who is now lead director >> a serious guy >> oh, a serious guy >> he will take over as company chairman after the meeting >> i don't like that after what i saw with bret taylor he's lost a lot of time being chairman of twitter. david, peltz is really here as if he was not a good force at procter & gamble that's something david taylor said is not true, that he was not a good force at heinz. bob johnson came on "mad money" sxdz that is not true, and that -- well, that he didn't help any place he's been involved in. yet, unilever chose him as a board member you could say yeah, because they wanted information on proctor. i think that's unfair. wendy's liked his analysis

david, they -- >> this is going to be an interesting battle >> they really think they can defeat this man with the stock being destroyed. >> well, at the same time, they come back at him on total shareholder return as well he shared that at the very end of our interview, he came back to the idea, look at the total shareholder return and disney's rejoinder would be, take a look at it because when you actually look at the tenure of mr. iger over the period he was ceo from '05 to 2020, you'll see at least in their opinion that in fact he had the best long term track record of any ceo of -- and of course, we did know this, and again, we're talking, by the way, appreciation plus reinvestment and dividends, stock price apprec yashz disney up 554% versus the s&p's 224% gain in that period so their rejoinder to him is simply, you looked at a different timeline, and in fact they did

pelts went back to when iger was president but joined the board for their tsr. they included the end of theizener era. when you look at from iger ceo to iger stepping down as ceo, it was an impressive tsr. >> exactly and i agree with that. but peltz does add the executive chairman is a working executive. and that that period has to be included that period was not a good period the number of chapek - >> well that did include the pandemic >> it did surprise me there was such a firm effort to try to engage chapek. i felt that when i listened to the -- look, this is your presentation you have this. you have an edge on me, and i always want to admit that. i don't have this. i will tell you that i think this is -- >> no, but i want your take. it's important to get your take in the moment, especially because you have covered it closely. you were part of the interview with mr. peltz and by the way, you were the

first person to basically call for chapek's head. you were correct in having done that because the board followed not too long after >> i'm going to quote my wife on this if i have the self-importance to think i played any role in this, i really don't deserve to be in this business. i'm a journalist >> i think we gave them ideas from our interview because they go on to quote about msg sports and peltz's time on the board there. that was something i brought up with him, of course, when he said they have a good hockey team >> i know they're telling a very negative story about ge and his time on ge >> but they do come back to the fox transaction because it is something you brought up many number of times can you mentioned earlier in the $71 billion. >> pelts said $30 billion. >> they did sell sky for a premium to comcast and reduced that >> we distinguish them because they are in a war with comcast and therefore it's okay? >> their response would be very simply in terms of the balance sheet, because that is a concern

for mr. peltz. >> the destroyed balance sheet >> their net leverage is effectively the same as post the closing of the deal, and it's only one term higher than 2017 they say it was the global pandemic that dramatically impacted disney. they lost billions in cash provided by operations and that's where they suffered in terms of the balance sheet and not as a result of the fox transaction. try to defend the fox transaction. >> i think it is a distraction it's got to be to a certain extent >> do you think the narrative he just wants to be in the papers is a correct one >> i come back and i have said this, i don't quite understand either side. i don't understand why disney -- i don't understand why peltz is persisting i don't quite get it, what he thinks here. why this is so important to him. and at the same time, i can understand why he would have thought, well, disney is going to say yes to me why wouldn't they? >> i think he felt that he could

bring some discipline, but i know they feel very strongly that they don't need discipline, no, i don't want to say that everyone needs discipline and iger is going to bring discipline i think the mark parker versus susan arnold, the previous chairman, makes it so that the secession is real. and that is something, if i had to disagree with nelson peltz on anything - >> real succession going on. they changed out the ceo in the period of time he was talking -- >> who picked chapek >> say again >> who picked chapek >> the board and iger. iger was the chairman of the board. >> who - >> they would say, jim, they would say -- >> mr. covid was on the board in. >> they would say it was the pandemic and every time they have done a deal, obviously, nub the size of fox, and i remember this because i remember the p pixar deal, marvel, lucas, everybody said they overpaid smaller deals. they said hey, it was right

around what the multiple would have been. >> i would call them thin skinned. >> there you have it, the back and forth we have right here is a lot of what shareholders will be thinking about when it comes to disney. >> one more look at futures. an opening bell six minutes from now. we have to get to a break. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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applause building at the new york stock exchange. we're going to get an opening bem in two, one. there it is. the big board, celebrating an anniversary at the nasdaq, for rates, equities, money markets a mixed bag this morning coming off what's been a pretty strong market so far, at least for the two weeks we have had of trading thus far in the year, jim. >> it's reasonable to think the so-called -- i think we had the goldman quarter, so different than bank of america bank of america killed it in equity goldman has always done that that's going to color things because it makes you feel like friday was an aberration makes you feel like the head of

steam that's in the 7% for small cap may be abhorrent, but i come back to the fact that there's a lot more to owning companies in the end of a tightening cycle. mike wilson was very negative and staying negative that's a dangerous thing i want to talk about tesla for a second >> sure. >> tesla as well as netflix. >> tesla shares starting up about 3% this morning. >> this tells me maybe tesla is immunized by a piece where tony says how low could fiscal '23 numbers go a lot of people feel, no kidding. w why do you think tesla has been so bad when you push a negative story on tesla, it's a sleeping giant now. you have to be worried that there might be a backlash. >> what do you mean when you say a sleeping giant >> yes, it's true, they're c cutting prices but they have

good margins some people talk about how it could bring down the whole industry that's a powerful thought, that evs are no longer going to be so called where the action is i don't want to bet against tesla as much as you would when it's down so much. i still would bet in favor of netflix, even though it's up a lot, as there are multiple analysts saying look, you haven't seen yet - >> let's not finish the conversation on tesla. you saw some of the market share in china ev is representing almost half of all new sales the domestic - >> what, the numbers that were good >> the domestic manufacturers were doing well in the chinese market it's an important one for tesla. then i would also come back to that trial that we talked about. it's going to begin i believe today in san francisco >> right >> that's a securities fraud trial. the question really is whether those tweets were material in some way to misleading people. in the sense of this is from

2018 >> a distraction from the distraction. >> have funding secured from the saudis, but it's another distraction. >> look, i think when you look at what elon has been doing over the weekend in terms of polls about how to change twitter, i like it. i have always felt the big users of twitter have been completely ignored. look, tesla, david, maybe it's just a car company that's the thing it's a car company, so therefore it doesn't deserve anywhere near -- not the multiple, but the market capitalization, and that's the charge being leveled. but how about the fact the long odds were ow on tesla and the stock is up. what does that say >> it has a decent gain for the year still well below that of gm and ford which have both had a nice start to the year. again, all of these stocks were crushed last year. tesla more so, but ford and gm did not have a good year either. >> did you see the tactical

positive evercore on apple saying they may guide up that's not the theory that i was using. i think that's important because apple has become one of the only mega caps that's left that people are behind. witness the microsoft downgrade. savage >> guggenheim down graded microsoft to a sell. >> savage. >> price target is below, as you would expect a sell to be. a $212 price target. they don't expect microsoft to miss numbers but they may disappoint investors nevertheless for the second quarter of '23 and guidance for the year, is what they say greater exposure to the smaller and medium sized market. small and medium size businesses fare worse than larger enterprises in a macro slowdown. it goes on from there, jim i'll defer to you on whether this has any real credence >> the actual notion of what guggenheim was talking about, i

thought that he represented himself well, but neither here nor there, i think these are all of a piece this is the decline and fall of enterprise software. and you're seeing it, by the way, in some of the holdings of banks. they also invested in enterprise software it's being valued now as something that turns out to be not as great this is also long odds for salesforce marc benioff talking about trees growing fast i want the trees growing fast at salesforce i feel that enterprise software had turned out to be more related to advertising, more related to growth. >> he does do an interview for davos. i want him to be less political and more about - >> trees you want the trees >> i bought 20,000 trees >> i want to come back to microsoft for a mbt, not the downgrade, but they're going to

be incorporating ai, sauch yeah nadella said in an interview, in azure, all of their different offices. we haven't been talking too much about the chat gbt and what that really means obviously, there are efforts under way at other companies such as alphabet, one would imagine, when it comes to a.i., about things we're not really as aware of but are perhaps equal to or exceeding what has din done >> this is not alexa, they can't -- >> microsoft, this is an important relationship, and the journal reporting about the possibility of them investing -- maybe it was other reporting, $10 billion. >> have you used it? >> i tried yesterday and it was busy said sorry, whatever it was. >> i thought it was like emerson throw cramer it was insane. you can be smart this is kind of like when i spoke to myself when i was at

nvidia and it asked me what was my feeling on the market i mean, there's a lot going on that i think is rivaling china, by the way, where you basically can be somebody else and, i mean, i painted like picasso at nvidia, i did a seascape this is similar. >> but we have been talking about a.i. >> it's finally there. >> in terms of commercial importance exactly. >> not in terms of commercial importance, right? >> not yet, but it's going to start to be incorporated in the enterprise in ways we're just beginning to get a sense for when microsoft we're going to include it in all of our offerings for azure, that's not unimportant. >> companies like amazon and alphabet, not amazon, but alphabet multiple is frightening to me because it's kind of what a steel company would be trading at >>ar a very low multiple they have an a.i. effort under

way. >> i look at things, there are other things happening in the m&a world. >> there are and i'm going to get to that, but you didn't finish your point on netflix >> it's so loved all of a sudden >> stock up 2.5% still up 10% for the year. >> it's the slate. people are talking about these, again, and they have a lot of good things. people are talking about how it underearned and how it underproduced. and i go back to that conference call, when they were going around once again and talking about what they watch. which was they were devoid of that for the last two years. by the way, there's a lot -- i mean, streaming is maybe better than we think in terms of product. worse than we think in terms of growth, except for netflix the theme is subscriber growth is going to return >> whether or not it's going to be a profitable business strategy for so many companies that have pursued it, an enormous expenditure of capital. >> once again i'm going to

reference a book that comes out opvalentine's day, unscripted. the company spent a lot of time trying to figure out if they should be viacom or cbs, dealing with the problems. they were distracted like no other company during a period where you had to make a move their move seems to be very, let's say, post apocalyptic for streaming. meanwhile, disney, sure, everybody can say what a great move it was that they have more content. >> well, they did. a lot more content >> mandalorian, instead of schefter last night. i wanted to hear about coaching change instead i got the mandalorian. >> i watched the first two seasons. my daughter is a big fan >> i want to know what's happening in the nfl >> i'll tell you what's happening in the nfl, the giants are playing your eagles on saturday night at 8:15 >> i run scared. 7 1/2. that's nonsense. >> wait. you're worried about the giants?

against your eagles. daniel jones did look good he did look good you want to talk m&a >> no, i want to talk about containing jones yeah, let's talk - >> tough to contain. although your guy is pretty good >> thank you and we're rested >> really rested and a saturday night start after sunday -- that seems unfair to the giants, six days instead of seven. every day of rest is helpful >> talk to the commissioner. >> i'm going to do a faber recover on the emerson hostile and i want you to chime in and share your thoughts. >> i have a lot to say >> if you're just joining us, by the way, a company called national instrument has received, it's a hostile, at least the way we used to describe it, the company making that bid doesn't ever want to refer to it that way they prefer unsolicited. but it is hostile. it's got the stock up. national instrument on friday

came out with an announcement saying we're going to begin a strategic review process little did we know at the time one of the key reasons is because emerson has been trying to buy them since may, and this morning, emerson comes out, guns blazing. when i say that, i mean all the background to the different bids they have made and the attempts they have made to engage with them, more on that in a moment they started at 48, now they're at $53 a share you can see the stock is trading around that and the expectation perhaps, this would end at a higher price or maybe there's another company that might be interested they also purchased 2.3 million shares of the company, they also have said, hey, this is one of their last letters in november, we're going to come after a c couple of your board seats, why not, includingthe chairman they're coming on all fronts at emerson to buy this company. does have a staggered board, but the fact is they now have begun

a process. remember, again, the announcement on friday was the key one. commencing a strategic review process. it seems highly likely that this company will be sold will it be sold to emerson well, that is perhaps more of a question in speaking to people who are familiar with the situation, i am told that emerson, jim, did engage with national instruments over the last couple three weeks. but came away from that engagement feeling their price expectations were unrealistic. and there you go just the last eight months they felt their price expectations were unrealistic. when i broached the idea of a final number having a six in front of it, they said not us. >> i thought they could complete this my travel trust owned emerson, and obviously, the stinks when you don't have a completed deal. i liked national instrument. it fits in well with going -- digitizing various industries.

aerospace digitizing by the way, testing measurement will help them with their grid work for electrical grid when i see this kind of thing, and i know this management team and think it's a good team - >> they just did a deal with black stone. very active when it comes to m&a. >> head to head, i felt -- >> the ceo of emerson. >> i thought this deal could get done i understand that it's extremely disappointing to shareholders who have said, why would you ever do hostile? people don't like hostile. >> no, but i will give them this if you're going to do it, just do it. and they are owning shares, coming after the board, they're not screwing around they have, to their point, tried to engage with the company for quite some time. there does appear to be some engagement that took place more recently, but resulted in the fact there was a price discrepancy they didn't feel they could bridge, at least in a friendly manner. we're left with a $53 bid right

now. we'll see whether there are other companies. you would imagine, though, that national instrument having at least for the last eight months been sort of saying no, so to speak, to the letters they have been getting from this company, that they might have gotten a sense for who else was out there. >> i don't want this to be a distraction and i know emerson has a lot of firepower and i like the fact that, say, they get rid of whirlpool, was able to do a jv, making it so their european losses were ameliorated and they didn't have a good quarter last quarter, but i think emerson, i wanted this news to be -- >> you wanted a friendly deal. i'm told they're valuing the company at what they say is about 23 times consensus ebitda. excuse me, 17 times 2023 consensus ebitda, when you back out stock based comp, which i guess is fairly significant. they say it's 21 times they say that's a heck of a multiple from their perspective. or at least people close to

emerson indicate that is a multiple that should be accepted by the company it obviously is not. by the way, national instrument going to more of one of those recurring revenue models saying they're going to have higher margins as a result. they had an investor presentation a few months ago. >> david, the question is, if you approach in good faith and you're giving a stiff arm, what is your -- >> most ofthe times you go away 95% of the time, you go away if you're a company. but every so often you say no, not going away >> that's why i was discouraged by this. i know i wanted them to do a deal i wanted him to work toward the future but david, i don't -- a hostile to me is in this environment is never what i want to see >> interesting we do have some m&a. by the way, maybe that will help goldman sachs which is advising emerson, i should add. >> they're long time goldman >> but that stock, goldman sachs

down almost 4% the conference call has begun at 9:30 we want to share whatever we get from that with you >> goldman is not happy with itself >> let's get over to bob pisani. not sure if that's having an impact more broadly, but i want to get your take on the markets. >> the s&p is flat dow is down .5%, because goldman is weighing very heavily take a look at the sectors kind of a believe it or not flattish open in terms of sector advances consumer staples were up health care was up, now it's flat semi-conductors, there's a big story off global growth on the year, and the banks are weighing on things now. look at the banks. goldman, of course, is 90 points of the dow, that's a big stock, big price stock. so it's weighing heavily on the dow. that's probably 90 out of the 160 points morgan stanley is up there jpmorgan is another 20 points or so so 110 of the 150 points in the

downside on the dow are due to jpmorgan and goldman sachs key is also a little bit on the weak side. goldman sachs, my favorite report, an uncharacteristic dud, that's what evercore said about goldman's report we talked about the higher expenses, the higher provisions for loan losses there. i want to show you other things. the global economy is starting to look a little bit better, and the players in the global economy have been doing better this year. i noted last week how the strong performances we have seen this year in caterpillar, in general electric, in cummings, deere, these are all at or near 52-week highs last week and the same situation now. they're outperforming. we lookatogen so far, and we see this is not a bull market, but it's starting to approach one. let me show you why. we're up 4% for the year half of the s&p 500 is above its 200-day moving average that means they're generally in

an up trend. metals and mining, global s signifiers of growth, up 12% the global markets are starting to look a little better. how many years have we seen underperformance in emerging markets and europe, yet not this year the hang sang is one of the better performers of the year. the stock 600 is up 6% that's the s&p for europe. korea is up 6% the s&p is up 4% we're outperforming. for once, it looks like some of these fund managers are positioned correctly we make fun of the bank of america global funds survey managers who used to be behind the curve. this time, they were on top of things this just came out this morning. they're underweight, a survey of global fund managers, underweight the united states and overweight europe and the emerging markets heavens, they actually are right this time. that was the correct call on a short term basis what's interesting is their theories about how the global economy is looking the odds of a recession are

declining. 68% is awfully high on historic basis, but it was 77% in the last survey. so the recession odds are declining here the inflation expectations also appear to be peaking the expectations for high inflation were greatest in the prior months and they have been declining in this particular monthly survey contrary to trade, of course, is long u.s. stocks it looks, david, to me, it looks like these global fund managers are starting to embrace the sort of peak inflation story and the soft landing hypothesis that so many other people in the united states are currently embracing the people who are not right now are the global -- are the u.s. strategists, most of them, david, still believe we're going to have negative earnings and a rather weak first half of the year back to you. >> that is kind of where one of the key, if not the key debate, is taking place, bob >> did you see the empire report just shows you employment growth

stalls index of employees fell 11 points lowest level in more than two years. >> that's new york state all right, let's head to break, but before we do, we give you a quick bond report. how our treasury are faring this morning? yields, there you have it. this snoerng yields, two-year's down, ten-year is up 3.52 on the ten. we're back after this.

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payments, and customers in sync across all the places you sell. it doesn't have to be lonely at the top. join the millions to finding success on their own terms. start your journey with a free trial today. two earnings reports two very different market reactions. goldman sachs reports a number well below consensus estimates not so for morgan stanley, the stock is up er%.ov 5

let's get to "stop trading". >> you never want to hear your ceo say, this is not all we aspire to, goldman sachs some of these costs, platform for solutions, pretext lost, $778 million, credit loss.

the goldman i worked at was like a dry cleaner. you have never have anything left, you always return it >> morgan stanley, on the other hand, doesn't want to be compared their trading firm is -- >> very different complexions. that's different, that quote you got. not what we aspire to. >> i don't understand those losses we need more information. >> you'll have time to do that i bet on "mad money" you'll have a lot more of the story for us, right? >> absolutely. coming up, palo alto network ceo will be live from davos. ahead, actor dwayne johnson, known as the rock, will talk about the energy drink business, hollywood, wwe. >> ask him about his tequila, it does very well. >> keep it here. - psst! susan! with paycom, employees do their own payroll. - what's paycom? a magic payroll genie? - it's a payroll app. - payroll is way too complicated for the average person.

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on

good tuesday morning, everybody. welcome to another hour of "squawk on the street. i'm david faber with morgan brennan. carl has the morning off let's give you a quick look at markets. we are up across the board

i don't really count the dow for me, we're up across the board because the s&p and the nasdaq are both in positive territory. we're 30 minutes into the trading session. here are three big movers. goldman sachs and morgan standing headed in opposite directions we'll break down the numbers goalman down 4%, morgan stanley up 6%. alibaba on the rise after investor koehn has a stake in the company. shares are down about 0.5% not responding so much to this. finally, cheesecake factory is responding, falling after two downgrades this morning from citi and gordon haskett as analysts warn of challenges ahead in terms of valuation, demand, profit margins shares are down almost 4%. as morgan mentioned, goldman

and morgan reporting earnings, very different responses in the stock market to what was a goldman disappointment and much better numbers from morgan stanley. dom chu joins us with highlights from the conference calls. i know the goldman call, dom, is probably still going on. >> it absolutely is. when i left, the prepared remarks are still going on like you said, a taleof two different banks/wealth managers. those stocks going in opposite directions, as you can see here. when you take a look at some of the moves we are seeing, going in opposite directions, you have these particular stocks that are at least showing some signs today with goldman sachs shares on the decline, down 4%, 5% near session lows it reports profits of revenues both fell shy of analyst projections. revenues fell as expenses rose goldman setting aside money for bad loans. the goldman sachs earning call,

ongoing, but ceo david solomon did make some comments with regard to some of the stumbles it has had since embarking on more consumer-based banking lepding activities here's what he said from taking a step back from those consumer efforts. >> our ambitions in consumer strategy and made some key decisions. we started a process to cease offering new loans on the market's platform. we will likely allow the book to roll down naturally, although we are considering other alternatives in addition we have postponed the launch of our checking product. the right time in the future we intend to offer checking to our wealth management clients. for now, our priority is to strengthen our deposit franchise, card partnerships and greensky our approach will allow us to reduce forward investment spend and rationalize expenses. >> that's the consumer ambitions there. on the other hand, have you morgan stanley, those shares on the rise after it reports better than expected profits and revenues driven in large part by record wealth management

revenues in the fourth quarter morgan stanley as been in the process of trying to pivot more business towards what is seen as more stable fee-based wealth management revenues in recent years. with regard to the drop-off in investment banking activity, morgan stanley not immune. ceo james gorman did have this to say about what it will take to get that m&a, that ipo deal activity flowing again take a listen. >> i'm highly confident that when the fed pauses, activity and underwriting activity will go up. i would bet the year on that, in fact a ceo's job is to drive growth in their businesses. they do that two ways -- organic and inorganic. i've been doing this a long time and i've done both and the only tricky part about inorganic, once you have your strategy set, is timing. and sometimes you've got to ignore timing, but if the market is really volatile, it behooves

ceo, particularly those early in their career, to be a little cautious, and that's what we're seeing. >> we're going to continue to monitor the news out of the big banks and bring you as we know more that's the current state of play with these banks again, a tale of two of them, morgan stanley a little more optimistic about what's happening with the future for deal flow if the fed and macro conditions start to permit, morgan. >> dom, a tale of two today, but really a tale of six over the last two trading days. is it safe to say we have broad themes emerging overall from america's biggest banks? if so, how does it speak to this whole, quote, unquote, mild recession discussion that's taking shape >> that's the theme, morgan? pretty much every bank ceo and cfo has been a little more conservative with regard to how they view the world. the mild recession talk we heard a lot of from the big four that announced on friday is carrying through to the investment banks here but it's a little more nuanced with regard to the investment banks because there's not as much of that kind of overall banking assessment we would get

from the likes of a money center like jpmorgan, bank of america or citi. this is much more geared towards capital markets activity the capital markets commentary coming out of both these ceos has a lot to do with what happens with the bigger picture economic kind of, you know, environment we're in if you do see these banks start to get a little more stability with regard to the capital markets environment, sales and trading, also just the interest rate world, then you'll start to see deal volumes pick up again the interesting part about this is, morgan, there's been a lot more focus from morgan stanley on that more stable fee based revenue from management, and that's a transition they've been starting for years now this is seen playing out a little better. it's buttressed them against downturns we've seen in the market goldman sachs a little more levered to that capital markets activity again, interesting themes developing for right now again, going in opposite directions >> all right dom chu, thank you. the world's economic forum

in full swing in davos this year, right now, as business and government leaders descend upon switzerland to discuss the biggest threats to the global economy. brian moynihan striking a cautious tone on "squawk on the street," talking about it, we're still on the path for recession. >> the consumer spending across our customer base has slowed, which means that's good news and bad news so, first quarter of '22, 14.5%, about 5% fourth quarter '22 over fourth quarter '21 so far this month it's back up 6%, 7% it's resilient but that 5% is more consistent with a 2% growth economy as opposed to a faster growing economy or lower inflation. but that consumer spending is strong consumers have money in their accounts my belief is a mild recession. >> a mild recession. we've heard that from a number of ceos the last couple of days. i actually think the question

that all of this raises even more than this idea of recession or no idea, mild recession or not, is what does it look like coming out of a potential recession? is it a mild recession and then a quick bounce back? is it a mild recession and then we sort of stay in this middling, slower economic place for a while? and certainly there are all the caveats associated with banks, like bank of america where they're putting loan loss reserves or increasing those numbers and the expectation that, perhaps, maybe this could even be worse than that. >> and also goes back to the idea, we get to a terminal rate, whether it's 4.75 or 5%, and how long do we stay there before the fed starts to loosen, which is not necessarily in a lot of people's forecast. clearly, moynahan's comments -- not clearly, they may be having an impact on shares of bank of america or jpmorgan, both of which are down after what were positive responses on friday to their earnings. >> okay. let's bring in senior markets commentator mike santoli for more on the markets.

especially in light of this broader macro conversation maybe we're seeing green shoots, in light of the rally last week. >> a lot of people looking at the character of the first two weeks of the year and you can measure technical supply demand that looks encouraging, the breadth of the rally to set off when we're moving out of a potential base of the market it raises this interesting point. if we get another few percent from here, it would take the s&p 500 above that line that goes back to the january peak of last year so, if this was just another kind of bear market rally, this is just about exactly where it would stop that's why we're in this proving ground at the moment now, the question is, if you are able to look back and say, we've gotten some escape velocity off that october low, that would be very textbook. bear market in october, before election, as investor expectations hit a trough. all of a sudden earnings look

like they're coming into line to be beatable once again big question, where is the valuation ceiling? is the bond market correct the fed is essentially done and might have to turn a little more dovish for a while i think it's more of an even debate bull/bear than it was and people are trying to seize upon those technical signals to say, maybe we can get lucky here. maybe the fourth quarter, later part of december, was a bit of a washout in the growthier parts of the market. >> if we were to get a recession, doesn't history suggest the valuation ceiling is much lower and we have further to fall? >> that's exactly what history would suggest. you're at 17 times earnings for the s&p forward from this point. i say you swipe away the top biggest four or five stocks and you're more equal weight that's fair value, not cheap that's one of the things if october was the low, it wasn't one of these bear markets that created the basis for really great forward returns going ahead.

because that's one of the things they do. i'm really cautious about doing the pattern cycle work in this instance, though, because everything was scrambled the market was supposed to rally in the first year after the fed rate hikes that's what history said it didn't. we crashed before the fed started raising rates. if october was the low, it was too soon because we're not in a recession yet, if we're going to get a recession. all these things we use as rules of thumb don't necessarily seem to apply, at least want very neatly, with the cycle we're in right now. >> it's fascinating. and then, of course, there's the whole 60-40 breakdowns of portfolios -- >> people love the 40 right now. bonds are doing great. that's another one of those story lines early this year. >> thank you. as we head to break, here's our road map for the rest of the hour recession warnings at the world economic forum, but the consumer is holding up. we've got more on the data giving hope to the bulls this week plus, disney is firing back at activist nelson peltz we'll give you the latest on that fight. and finally, he's an actor,

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and now a lot more people can. so let's go. the digital age is waiting. disney firing back at activist investor nelson peltz last week peltz wanted to join the board. it's a proxy fight still in the early stages but it's gotten

pretty heat. nelson peltz joined us last week on cnbc to discuss his reasons for wanting to take a place on that disney board. disney this morning in a deck responding says, nelson peltz does not understand disney's businesses, lacks the skills and experience to deliver shareholder value in a rapidly shifting media ecosystem they go on from there to dispute a number of mr. peltz's contentions and give us some sense as to the back and forth between mr. peltz and the company and its board of directors and management detailing meetings that go back as far as july between mr. peltz and bob chapek, the ceo at the time, numerous directors, the company's cfo and ike perlmutter, a part of trying to lobby various board members and

management to put mr. peltz on the board. unclearexactly how that role plays out given, of course, again he is an employee of the company. for its part, disney also responding to a number of criticisms, including one that has been quite common over the last couple of years namely that it overpaid for 21st century fox. of course, saying that, you know what, every time disney's done an acquisition, we've been criticized for overpaying, whether it was pixar or lucas or marvel, of course all were smaller than the much larger fox deal pointing out that basically the deal did accelerate their strategic shift in direct to consumer, that synergies, in fact, were over or as much as $2 billion as had been promised and that the multiple paid after synergies was consistent with precedent multiples. that was not the reason for the degradation of the balance sheet, but really it was covid that was responsible for that.

of course, mr. peltz, as you might imagine, has a different take on it he also has a different take on -- well, on the total shareholder return that disney has been able to put up. a reason he cited for why he wants to be present on that board. take a listen. >> we have skin in the game. you know, we looked at a company and we looked at disney and we say that this is the most advantage consumer company on the planet and we love it that's the reason why we're here however, the tsr, the total shareholder return, over one, three, five, ten years has particularly underperformed the s&p and underperformed the proxy peers that the companies selected. >> disney takes issue with that. in fact, in their deck, in their

presentation, they take a look at the total shareholder return, morgan, under -- during the period that bob iger was ceo essentially 2005 to 2020, 554%, that does include both price appreciation and dividends far exceeding the s&p and far exceeding pretty much every company in their universe. thankfully, comcast is not that far behind, 448% return in that period but their point is, hey, they were measuring from when iger came on the board but was not running the company to the current day. obviously, that looks a lot different than when iger was ceo. >> what a difference time makes. of course, comcast being cnbc's parent company even before we got news of this proxy fight, you've had speculation and analysis, and i think about wells fargo a month ago, that disney -- in addition to hulu, disney could spin off

an espn or abc do you think those plans now and the possibility of assets being spun off or being thought about differently now accelerated regardless of whether peltz ultimately makes it on the board or not >> i really don't see him that connected to that kind of potential outcome. because even in his own presentation and discuss with us, he was much more focused on balance sheet, on capital allocation, not necessarily on any of those sort of transactions that other activists typically focus on trian often likes to get into the nitty gritty operations of the company. that said, certainly these are important decisions iger is faced with he's only been ceo for two months, roughly, at this point you do bring up an important point, which is what is the future of espn bob chapek in responding to another activist, dan loeb, said, we're keeping it, even though loeb suggested they spin it off

it's not clear iger has come to that same conclusion. >> disney shares are up 16% to start the year. five years after the infamous 420 secure tweet, elon musk is facing securities fraud trial that could cost him millions jury selection starts today. we're watching that and more on tesla's stock in general, which is up almost 6% right now. we're going to break that down after the break. to adapt in the changing world, you could hire a professor of theoretical mathematics. we all know this equation, right?

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elon musk is heading to federal court. tesla investors are seeking millions in damages for musk's tweet that, quote, considering taking tesla private at $420 funding secured. jury selection begins with a shareholder lawsuit today. of course, even if -- even counting for last year's historic drop in the stock, you're still very happy he didn't succeed in taking it private at 420 because the stock is up some 450% since then let's talk about the stock now, joining us to discuss that, wells fargo collin langan who

lowered his price but maintains equal weight and craig irwin, his price target, 185. neither one of you guys are particularly positive but a stock up 6% just today collin, any reason why the move for today? >> yeah, i think if you look at it, this is a very momentum-driven stock. there's been a slew of bad news over the last month and a half the price cut investors think is maybe one of the last pieces of bad news and sets up possible good news going forward. i think people are looking at the news flow starts to change, they have earnings, we could hear them talk about the demand surge with the price cut and they'll have investor day march 1st. again, an opportunity it talk about new products and future growth maybe this story starts to change a bit >> it hit your price target, 130. saw it hit right there i guess my question is, you're not a believer, necessarily, in this move or at least the more

positive story in terms of demand building. >> i definitely think this is going to drive demand. i raised my delivery forecast by 27% on this news but i'm pretty negative on the long-term strategy here. i mean, tesla owners on friday took a big hit they lost a lot in their residual values. that's going to have a permanent long-term consequence. it's not going to show up for many years but this price cut is about $9,000 on average, definitely going to turn some heads with the credit, you could get a price similar to ford explorer, highlander it's definitely going to boost demand if it doesn't, that's a big problem. i'm sure it will boost demand. >> craig, i want to get your thoughts on the stock and whether fundamentals are part of what's driving it right now or if this is a name, as we've seen in the past, basically moves, in part, based on sentiment around elon musk or around other issues

or other topics associated with elon musk, in particular today the focus on the lawsuit in san francisco. how much does that factor into what we're seeing in terms of where the stock is trading right now? >> yeah, so there's a lot of people trying to pick a bottom in tesla here. you know, this chatter out there about the ceo replacement for musk over at twitter someone like jack or dick costello may be coming back to grab those 80 advertisers lost would be a catalyst for tesla, would free up elon musk to focus back where he's lost so much value. myself, i've been very bearish on tesla for about two years my $85 price target is not as of last week. i've said that, you know, tesla should not be valued at more than toyota. where we are now, price cuts will get the sales going, but the momentum is going to be pretty negative. the i.r.a. is going to benefit

t materially all those other oems growing faster than tesla. tesla is looking long in the tooth. i'm still bearish here i think people are better off investing in other names in the sector because there are great companies out there putting out come pelling products. >> craig, they do have more products that are coming i realize every time we get a date for when those new products, like the semitruck, which is starting to hit the road or the new -- i don't want to call it a pickup truck, but -- >> cyber truck. >> the cyber truck, thank you. they're still coming if i'm reading through what you're saying here, you do not see this as a tech company you see this as an automaker so, in light of that, if not tesla, where else would you be inve investing? what would it take for you to get bullish again on tesla >> so, there are a lot of mainline oems putting out come

pell compelling items when i start to charge my car, the lightning from ford, there's a reason the ticon is outselling the 911 porsche. these are strong brand identity and the ceo rz not making political missteps or spending too much time in other places. they don't have brand damage from slashing prices take a look at ford and their e-lightning truck, they're raising prices instead of cutting. execution in the rest of the sector is actually pretty interesting. some of the more entrants like polestar, again, crushing it people love that company people love that product if they own one, they're a brand ambassador like the early tesla customers. i look at the sector and i say, you know, it's a compelling long-term play evs are inevitable

i just think tesla is egregiously overvalued toyota has everything tesla has, they just don't have the appetite to invest as hard there given they're making money in their vehicles. >> right collin, is 23 times consensus numbers egregiously overvalued, in your opinion? >> i do agree -- well, first of all, i think consensus numbers are going to come massively down we're talking about making variable profit of $20,000 per vehicle and now it's $11,000 or $12,000. that's painful so it's not really 24 times those numbers because that number is probably going to float down further yeah, i wond say i'm -- i'm equal weight for a reason. i think there's a lot hf long-term uncertainty and a lot of damage they did to current customers from a brand i also think -- i have a different view on the broader industry

i don't think i'd own any of the automakers right now i think what this just declared was a price war and i think others will have to respond with some price cuts themselves that is not good for anybody the only part of the industry i like right now are the suppliers. >> got it. gentlemen, appreciate it thank you. >> thanks. still ahead, actor, tequila brand founder and wwe champion, we'll check in with dwayne "the rock" johnson on how he sees the consumer that's next. we're back in two. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade

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the street." i'm bertha coombs. here's your cnbc news update for the first time in 60 years, china's population is shrinking. birth rates are sinking far faster than predicted. the declines will make it harder for china to grow its economy and to take care of growing numbers of the elderly

china also reporting its gdp grew just 3% last year that's the second lowest level in more than four decades. at davos, ukraine's first lady is urging political and business leaders to do more to help ukraine and stop russian aggression she said the war in ukraine is a threat to national sovereignty that is also causing starvation and driving up inflation around the world. and in california, flooding is easing as the state emerges from a series of massive storms. but the tenth atmospheric river since christmas is expected tomorrow though its storms are expected to be less severe. president biden will travel to california on thursday to survey recovery efforts and determine how much additional federal support is needed. they've really gotten whacked out there. david? >> thank you, bertha. some hope for the bulls this weekend ahead of fresh consumer data steve liesman joins us with more on that. steve?

>> david, good morning you know, inflation taketh and in the case of worker earnings, when it falls, it giveth back. the decline in inflation over the past six months along with strong wage gains means real or adjusted earnings are actually rising, giving workers a boost and offering hope that the u.s. economy might avoid a recession. the real hourly earnings are up 2.6% on a six-month annualized basis. the decline in the work week means the weekly paycheck is up somewhat less at just 1.34%. they're both the best gains since early 2021 and they stand in stark contrast. you can see the numbers on the bottom to the big declines registered in june with continued savings from the stimulus package is a reason why goldman sachs has an out of consensus call the u.s. will skirt recession. talking to jan hatzius, he says it's one of the reasons we have

a more optimistic forecast, it's the stronger real income and inflation will continue to come down kpmg analyst is more focused on the decline and hours worked the declining savings amount and the possibility of more unemployment she says -- she's the chief economist and tells me, i'm pessimistic. i'm humbled that consumers have been remarkably resilient and falling gas prices have really helped i worry as you get into the year and you see further constraints on the ability to generate jobs. the key for both economists, jobs, 4.3 million more americans getting paychecks last year, that could be as important as inflation. we get the final retail sales of 2022 tomorrow. that will wrap up the spending for the holiday season morgan, just because they have more in inflation wadjusted wags doesn't mean they're spending. >> thank you. our next guest, you know him from his time in the entertainment world and also

hyped several consumer brands that could be facing the same inflationary pressures steve talked about dwayne johnson, ceo of zoa and teremana tequila dwayne, welcome back to the show great to have you. >> thank you, morgan good to see you again. i appreciate you having me on. >> so let's talk about zoa, because it came into being in 2021 how did it come into being how quickly is it growing? and why specifically the energy drink market >> well, for years myself and my co-founders, dany garcia, dave ramsey and john schulman, we were energy drink consumers over the years, being a big advocate of going to the gym and trying to remain as healthy as we possibly can there was a growing reticence in terms of trust and i wasn't sure

exactly what i was drinking and i was getting tired of the proprietary blends in the energy drinks we decided to make our own and make sure our lead foot was transparency we like to say, if it's not on the can, you won't see it in the can. so far, we've done incredibly well, knock on wood. we've had a tremendous first full year. we've crossed over $100 million in retail sales. we have a lot of work ahead of us but things are trendily nicely one of the things, i would say the main anchor, is that he can quit of trust we've been able to build with our consumer. >> to your point, the energy category has been outperforming everything else in beverages and anything that's healthy energy has been particularly strong so, i do want to get your sense of the consumer who's buying this product and whether, given the fact it is a crowded and competitive marketplace, you can

continue to grow at those gang buster levels. >> that's the hope, morgan keep your fingers crossed and you roll your sleeves up and you keep your head down and you continue to put in the work. our consumers, what we have found, is they're very health-forward, they love the transparency, and, you know, we do deliver a very balanced drink here so, you know, well aware of the competition. i think one of the main things that have allowed us to get in and pierce the category, as you said, it's a $20 billion category, we're lucky enough to take a little bit of that share. one of the main things that have anchored us with the consumer is the story behind the brand, faces behind the brand one of them is my big face here. and the trust we've been able to build with them. i'd like to think we have nice tailwinds ahead of us and we'll continue to grow that's zoa plus, that's our preworkout energy supplement it's doing very well as well

fingers crossed, we're doing pretty good. >> of course, you have the teremana tequila brand, which is the last time you came on and joined us. whether it is the energy drink, whether it is the tequila, what is the endgame >> the endgame is to continue to grow these brands and the endgame for me, i can't speak for my co-founders in all these other brands, but i can tell you the endgame for me is to continue to find brands and create brands that i'm incredibly passionate about. as i like to say, the thing that gets me out of bed those products, those brands i run towards, and zoa is one of them certainly, teremana tequila as we continue to build out that brand as well, and some other cool things we have coming down the line, which i'm sure i'll come back ask talk to you about. there's teremana. >> just shifting gears here, there's a lot to get to in terms

of the entertainment industry with you, but something in recent days is wwe you are part of the wwe franchise during the boom years, the so-called attitude era of the late '90s and early 2000s. you know the mcmahon family, you came up with hhh what is the next chapter for wwe? what is a future involving new owners actually make sense here? >> i can tell you this, it's an exciting brand, a brand i've been fortunate enough to have tremendous success over the decades. also for your viewers here in the business world who may not know, the lineage goes way back, multigenerational with the wwe my grandfather wrestled for vince mcmahon sr.in the '70s, my dad wrestled in the '80s and i came along with my bad haircut and fanny pack and continued to wrestle for vince. i think it's a very attractive company.

i'm excited. i wish vince and that company all the best >> dwayne, it's david faber. you seem to make this point, vince mcmahon will never be able to separate himself from the wwe, so a sale becomes difficult to imagine, unless it's a buyer that continues to let him run it and be in charge would you tend to agree with that >> i would that's a great note, david i think with the world of professional wrestling and the world of wwe, it's so unique the fan base is very large and very passionate. there's nothing like the wwe i think with the new owners, if there are new owners, and aquierrors that come in, i think they have to share that same passion that vince has for the company and for the world of pro wrestling, which isn't always easy to do as you know with a company like this that's been so incredibly successful over the years, a sale and acquisition can be very complicated. but there's that unique added

anchor to this, i believe, that vince feels where you've got to find the right buyer who still has that passion and the love for this very unique world >> yeah. dwayne, whenever we have you on, i followed your career for so many years, i do find myself wondering what your day is like. i ask that with the so many things you're pursuing, your movie career and brands and businesses you're behind, and not to mention spending time, i would imagine, in the gym. how do you go about segmenting your days? do your days look the same do you allot a certain amount of time for the various efforts or each day a different experience? >> that's a great question i get asked that all the time. i used to have the mentality for a lot of years, my plate is full, however i'm going to make room for it. i would find a way to do that. and, you know, there's that great quote and book about power versus force a lot of ways i was forcing

things throughout the years. that caused somewhat of an imbalance. we all look for that balance my days are very full, but what i've learned to do, and that's really helped me and i called on a few mentors in my life, bob iger being one of them, who you know very well, was the idea and power making sure you surround yourself with people who, i'm not speaking for bob, i'm speaking for me, who are much smarter than me in the various areas i need them to be. that really helps my day move along nicely a got a lot of great people in various industries who i look to and who i'm able to, fortunately, galvanize a little bit. you know, that's a tricky thing. you know, when you're busy and ambitious, as we all are, to some degree, finding that balance. you did mention the gym. the gym is one of my anchors i love movement, i love action, i love just the sort of physicality. i do need that in the morning. i try to start my day off with some sort of physical activity

and then there's businesses and brands and movies and film and television, but also most important thing is my number one bosses, which is, one is 7 and the other one is getting ready to turn 5. they're all girls. so, i'm surrounded by the wonderful estrogen in my family. >> would you say at this point you devote more time to your business interests than you do to your movie career >> that's a great question it's balanced. right now. because movies take up so much time when i expose the movie side of my day to people who really aren't aware of it, they're really shocked with how many hours of work it really takes to make a movie and long it takes to make a movie. the editing process, et cetera i would say it's a good balance. what has helped is i've reached a point in my career, david and morgan, where when it comes to movies, i only want to make movies that i really love and i'm so passionate about.

they really give me an opportunity, i think, to reach a global audience, and entertain a lot of people around the world those are the kind of movies i like to make these days. >> you mentioned bob iger. any advice as he takes on the fight for the future of disney given the proxy situation we're seeing unfold right now? >> well, bob does not need any advice from me bob has been a tremendous partner over the years my very first movie with bob and disney was in 2006 called "the game plan. we saw great success with that, but over the years he's been a tremendous mentor and a friend i'm very happy to see him back and there's tremendous ambition with that man that i really admire again, i admire his friendship and mentorship he was very instrumental with our xfl partnership with espn and abc, who launched that season next month. coming up. very excited

so, he's great hardest worker in the room >> it is whole media industry is going through changes right now, including leadership changes i do want to ask you about black adam, which was released last fall won't see a sequel under the new dc comic studio. there's a report out earlier this month from "variety" saying you took a meeting and pitched a multiyear plan for "black adam" that ruffled feathers internally i want to get your comment on that situation given all the media speculation about how it's unfolded >> yeah, sure. you know, you've got to tell you, morgan and david, one of the hardest things that i've had to do, and it's one of the greater disciplines we all have to practice when we're in this position, is you want to be careful how much you get pulled into a sludge of media reporting. now, i'm not -- that's not an overall criticism, but you do want to be careful about it.

so, it was very difficult -- let me rephrase that it was challenging to exercise that kind of discipline just to let these reports come out speaking directly to what you said, that's simply not true had a great meeting with david myself and long-time business partner, dany garcia, she and myself sat down and talked to david. we did not pitch a ten-year plan at all what our meeting was the future and how can we build across the entire platform of warner bros. and discovery. with "black adam" we were all excited. this was david's first one out of the gates we were introducing a new superhero to the world, four that represented black, brown, diversity, et cetera you know, and i will say this, with as much as swirling around "black adam," at the end of the

day, we made a great movie, we kissed roughly $400 million. we had some headwinds to break even but we managed our way through it it was such a passion project for me, guys, 15 years in the making we found a great partner to deliver it to the world. and it wound up being my biggest opening of my career as a leading man. a lot to be thankful for "black adam" won't show up in this first iteration of the dc world. we'll continue to work with dc to see if there's a version where "black adam" shows up down the world. >> dwayne johnson, that was a wide-ranging interview we very much appreciate your time thank you for joining us. >> thank you we cover a lot every time i'm on thank you, guys. >> thank you that was interesting we're an hour into trading here. s&p is down, nasdaq is up. you can see sort of a split market if you look at the real-time exchange. still to come, palo alto's

vonesh arora will be live from das xt

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welcome back to "squawk on the street." let's get back to sara now with a special guest. sara >> hi. good morning, david. i'm with the ceo of palo alto. the snow is really coming down always when you come extreme weather. last time we did it in may so the world leaders are all talking about the outlook right now. it depends where you sit, what industry in terms of the answers for how people you are you have a good read on it spending what are you seeing right now? >> we were sitting here in may people were looking at impending disaster it seems like we all have come to the realization that the fed is going to get an outcome

and i think the outcome seems to be that people believe it will be a moderated outcome that's good because what it does for our customers, that they are not imaging an outcome for their own spending, their own budgets. in that context, i think security is the most resilient. >> you don't see any pullbacks in spending at this point? >> i just read a survey this morning of 100 plus done by citi bank at this point they do not see security spending going down. they don't see it going up but they are sticking with what they are expecting to spend. things they do like automating stocks and doing transformations are on top of the list. >> so they're not cutting the spending are they trying to renegotiate better prices? we're seeing the tech industry pull back. >> i have said this repeatedly that, you know, when i see the reemergence of the cfo for many years in this hyper

growth environment people were spending quickly to drive growth and the cfos are having to call them back. now everything is going through the cfo review so things are taking longer. you have to get ahead of it sooner. >> is there a price war in cyber? >> you know, cyber is -- people want good prices but you can't buy cheap security and wait for the day you get hacked and say, my, god, i bought the cheapest. people always want to buy the best security. no, security is not a price sensitive area yes, people like to get good deals. what they do wantis consolidation and cost savings if you can provide a consolidated outcome, then you get -- you give them cost benefits. >> who is your biggest competitor on that front >> you know, we spent the last four and a half years building the business

we have competitors in our security business and fire walls. we have smaller ones in cloud security we have competitors in the stock where we are the december instst dec >> the rising tide lifts votes because there is so much demand and necessity? >> i think as you are seeing in the overall environment that this market is creating a separation between good execution, good products, good companies and people who have to still prove their worth. i think even in security you will see the same. people have to prove their execution in a top market. you have to be careful because on the margin there is that. >> as you build all the services for your customers, you have been fairly invisible. we have seen prices come down across the cloud space are you -- what is your appetite at this point? are you eyeing better deals? >> look, we're not looking for

acquisitions because things are cheaper. we will do what's right for our customers. i still think the allegation has not fully settled in with many players in the market. yes, prices are lower for our competitors, but i don't think the market is fully rationalized yet. it's really coming down. >> it is really coming down. you're playing it very cool, though, as you are getting pounded by the snowstorm a lot of people are talking about chatgpt and wondering is this the future. you look at all these technologies what do you think about it >> it's interesting. it has been around for a while now. i was in india at a graduation speech i said the iphone legitimized mobile data. i think what chatgpt has k kritalized the power of ai we always maintained that security is not a human problem. it is an ai problem.

look at what it can do to create consumer things. imagine if the same technology was applied to security. you would need to hire by all accounts millions of more cyber security people to solve the problem because inherently security is an ai problem. >> is that a company you would be interested? >> we have already been doing it people haven't appreciated it, but i think it's brought to the forefront. i'm told the next version is 100 times more powerful. just imagine if we could get something a thousand times more powerful and you could apply that to security specific data. >> what does the security landscape look like right now? i remember when the war started in ukraine, everybody was worried about russia it feels like it's been fairly quiet, or at least there are things that are not public happening. what's really happening behind the scene? >> i don't think the pace of cyber activity or cyber hacks has gone down.

i think the pace is pretty consistent we continue to see that. a lot of that is not in the public domain because people are more keen to fix them before going out to proclaim they had a problem. i don't think the pace has slowed down. what has happened is we had a lot of cyber debt that has to be paid because we were never set up in a way to create all this connectivity we're doing with all the digital transformations we hear people talk about. i think it will be many years before that cyber debt is fully paid i think we are one of the most resilient industries and we will see people get better time and effort. >> you know, there are some nation states out there that have great offensive capability, including the u.s. we talked about this the other day that in the u.s. we are going to be very responsible but you can't expect that everybody out there is going to deploy the same kind of rational to using offensive technology. you have to be careful when there is offensive technology out there that it could be used

for the wrong purposes. >> thank you very much always good to hear from you on some of the big topics that we are discussing here in a snowy switzerland. the ceo of palo alto back to you. >> thank you a focus here for us, morgan. in some ways what we started the show with at the 9:00 and the 10:00, morgan stanley up goldman sachs really getting shellacked after the conference call that did nothing to make people feel or investors feel better about a quarter where they missed the numbers significantly. >> yeah. as thom said worst miss versus expectations since 2011. travelers is down 5% as well right behind goldman it preannounced this morning as well that it will miss fourth quarter earnings winter storms are to blame we have been talking about that around the airlines, but

something to watch with the property and casualty insurers as well. also worth noting, all the major averages turned well right now the s&p, which i care more about. i know david does. >> they're both in the dow. >> yeah, exactly it is at 39.96 right now. >> all right that will do it for us on "squawk on the street. "tech check" starts now. ♪ >> happy tuesday welcome to "tech check." coming up this hour, citi group ceo has mixed messages from the banks who kicks off earnings season including that $2 miss on goldman this morning that stock down 6% so far. plus, disney drama a fiery response to nelson phelps calling him, quote, oblivious. new details on that growing proxy fight are next and later, call it bet