problem. we will tap into the sector. intel hasn't suffered two successive quarterly losses in the past three decades that's a possibility depending on next quarter. layoffs outside of the tech sector hasbro slashing jobs is the labor market going -- in the labor market it is friday, january 27th "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 andrew ross sorkin along with joe kernen. becky is off today we have a lot going on for this friday with the boys three and a half hours before the market is set to open. we would open lower 11 points

lower. s&p off 10 points. we should mention the dow is up five straight sessions s&p and nasdaq snapped two-day skids. nasdaq on the pace to finish the week higher. if things stay this way, maybe not. look at treasury yields. the 10-year treasury and 2-year treasury right now, 3.548 on the 10-year treasury the 2-year treasury at 4.213 when we think about the energy and price of oil, look at this we are looking at wti crude sitting over $82.10. another big morning for data and earnings the markets get a read on the consumer with the personal income and spending report for december income expected to rise slightly and spending expected to decline. the inflation report that the fed likes to watch

personal expenses and price index will be released year over year core prices are expected to rise by 4.4% only a slight increase is expected on month over month chevron jumping more than 4% yesterday on news the company is launching a $75 billion buyback. the company hiked dividend by 6% that comes ahead of chevron's fourth quarter report out this morning. analysts expect growth of profits of 70% and sales to $52.76 billion the chevron stock rose more than 50% last year. let's talk about intel joe and i were talking about this before the show intel shares sliding after missing expectations for the fourth quarter now a weak quarter ahead sales coming in at $10.5 billion and $11 billion. that is 21% below consensus and nearly $14 billion which is

below the lowest wall street estimate ceo pat gelsinger is saying they are facing low product demand with the slow pc market. we have seen pat gelsinger out and about talking policy in places and trying to build the big fab in the middle of the country. when it comes to the business of the business, things are more complicated. you will hear directly from him about all of it because we have a programming note he will join the gang on "tech check" and i'll say that again, "tech check" at 11:00 a.m. >> i liked it when it was squawk something. very short article if you look at the journal for intel. the environment is tough a glut of chips because of people worrying about recession or if we have one or not

gdp was good that might be the last number that sounds like 2.9% according to lebiesman the president said it is not maga-types talking about recession. it is not just the fed everybody could be wrong i guess they could be. >> i don't think the prediction has come off the table we talked to the big bank ceos of the cash balance sheet for the consumer the consumer has been holding up the game if you believe the accounts get more dicey come june or july, tell me what happens this fall that's the pessimistic view. >> 2.9%. as far as globally, that is a good number. china is 3

that is the headline economy slows down because of capital spending and the slowdown there and what it could mean for subsequent quarters i feel for intel down 50% from its all-time highs. $27. these numbers. when you guide from $14 billion in sales next quarter to $10.5 billion to $11 billion that is like falling off a cliff. you can't make money when it falls that quickly it is expensive to make the chips. i don't know whether you blame gelsinger or not i don't know if anybody could have executed better chips -- is there anything more cyclical in that industry? >> i will say to his credit and you could argue it is his job. he pushed the chips act across the finish line. >> if you like industrial policy someone said that yesterday. you know that most people don't

think that >> some don't like industrial policy if you are the ceo of the company beneficiary of the chips policy, you did your job if you got the chips policy to the finish line. we can debate if it is good policy or bad policy or industrial policy is good or bad. in terms of clocking in and clocking out and doing what you are supposed to do in that record he did that >> you know, we talk about visa. there is another dow that will report today where the propofits will be eye popping. >> buybacks and dividends? >> whenever you try to ascribe blame to the biden administration about oil prices, everybody will come back and say it is a global market. it has nothing to do with what happens in the united states the united states does not set oil prices you can't control global oil

prices on the one hand you say that on the other hand, chevron is responding by doing what it does and selling oil by the barrel that it produces in this global marketplace and profits add up to this because prices have been so much higher because of what is not set here and not the biden administration's fault suddenly it is chevron's fault because they are making too much money. >> i will buy into what you are saying go back and get the tape we used to have debate notice mor -- debates in the morning and you would say it is the biden adminis administrationes -- administration's fault >> i just made that point. by saying you are the one that says it is not the biden administration's fault it's global. if you are going to admit that, don't trash chevron with good

numbers. >> you can't have it both ways i'll go along with you buybacks are okay. let's shake hands on the buybacks and dividends are okay. it is not -- i'm not here to support the biden administration or other administration. >> it is the biden administration goes along with the global sort of war against fossil fuels we saw so well at davos and everything else. there is pressure everywhere to at least rush the transition we saw what happened in europe if it could have been a cold winter you can't rush us. we have a 21st century lifestyle. we depend on it. if you want, we can go back to the 18th senscentury. >> let's go with not in your

back yard. >> the upper west side >> this is the problem nobody wants it in their backyard if you want -- by the way, you can make the argument that the transition is too slow or you can argue that there wasn't enough investment and it needed to come faster we can argue that might be unrealistic. i don't know how quickly you could have pulled this off >> nuclear might eventually include these new breakthroughs on controlled fusion >> there is really cool stuff. >> if this is coming in seven years -- >> i don't believe the singularit singularity is coming in seven years. >> i'll be like a cyber -- >> i want to think nuclear power is a reality >> it is >> politically in the country for reasons inexplicable to me

>> well, fukushima there are concerns you worry about trace levels of co2. you know if cesium gets out and there is a concern >> i think there are reason able concerns, but i think there are unreaso unreasonable concerns. >> you would never been a nuclear power person. >> excuse me >> you would not >> i have been a nuclear power person for a decade. >> a lot of people -- >> as i said, very unpopular to say this alaloud. i watch the twitterverse >> it is all of the above. we were at 6:10. dow reporting stronger than results for visa topped estimates for the quarter. visa announcing ryan mcearneny

is taking over on march 1st. shares up 1.5% on that news this morning. getting close to the highs stock looks good. coming up, the dow's current winning streak could be in jeopardy we say that every day. it was just up in the red a second ago we have earnings from chevron which had a big day yesterday and american express this morning we will find out what investors need to watch next you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. by working with you on a retirement-income plan designed to balance growth and guaranteed income. because doors were meant to be opened.

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a big week for big tech. next week, several large cap tech companies due to report quarterly earnings including meta and alphabet and amazon that could set the tone for the markets. let's bring in stephanie link. st strategist at hightower and gunjan she is a cnbc contributor. left to right, stephanie quickly, has the market surprised you in recent sessions that it is down in the morning

and it seems to rally. are you bullish about the rest of the year based on the action? in times past when the market doesn't want to go down, sometimes that can mean a good thing. it can go down in one fell swoop in a three-day period it is acting better than last year at the end. >> yeah, i think today will be having after intel's report. you talked about how disappointing it was we will see if it can make a turn around. i don't think intel can. there are specific problems with intel. the rest of semis and technology has been interesting as we have seen the dip p buyers this week. earnings are okay, overall that is why the market is hanging in 20% of the companies reported. next week is a big week as you mentioned. we have seen 71% beat rates. those that are missing are 27%

it is not a disaster for every poor report for microsoft or texas instrument or verizon, you have others like dh horton i think it leans more positively i think that is why the market is hanging in there. >> gunjan, you pointed out it wasn't working last year it is working this year in terms of speculation is it the beginning of something lasting or is it what happens when year end selling ends and you move into the next it started to look like it could be >> joe, that is the big question out there. this year looks nothing like how we ended 2022 in terms of speculative assets are back. bitcoin up 40% we are seeing heavily shorted stocks think the carvanas of the world.

sitting on double digit gains. tech bounced back. it has been a wild rally one that has held up through the week with the big intraday reversals. investors are telling me this is position driven. so many ientered the year bearish. they may have to chase the market higher since we have been on quite a tear lately i think one word of caution is these types of rallies have cropped up from time to time during the prolonged bear market we have been in now. so far they have been short lived. >> we have seen this movie before fits and starts. you get bearish and a terrible year like we had and how many sharp reaction rallies do you have before you have a real one that's lasting that's just the nature of the market tries to shake everyone's conviction and what they know. that's the beauty of it,

stephanie. by the time, you know, when you finally finish saying this is the not going to be anything lasting, suddenly you missed it. then that can add and get out to where it is too hot to buy the train leaves the station >> i think everybody got so negative about the macro i get it i understand there's a lot to worry about with hfrousing and manufacturing. how much worse can housing get in my opinion? on the flip side, look what is happening globally the estimates are going higher for gdp in japan and in europe china is about to reopen you have a weaker currency in terms of the dollar. that will help u.s. multinational companies. costs are coming down. supply chains are easing i don't think all is so horrible and everybody was absolutely positioned negatively starting the year i think of that's why i point to earnings stocks follow profits.

earnings are not that bad. there are places to absolutely invest and to double down on and as i mentioned, really encourage the semiconductor side they were the first in technology to lead us down i think they will lead us back it is interesting to see they report disappointing numbers and they actually turn green on the day. >> vix at 20, gunjan now below that 18 below 19 do you watch that? a lot of people do they say when it gets to those levels, usually you are looking at maybe a topping process for the most recent short-term rally. >> it has been super, super calm out there. i do think that makes tech earnings next week incredibly important to watch one thing that is shocking to me is tech finished off its worst year since the dot-com bubble

burst in 2001. the tech companies still make up a huge of the s&p 500. five biggest like apple, microsoft and amazon made up 18% or 19% of the s&p 500. that is still above historical levels of 15%. based on the huge post-earnings moves with tesla up 10% yesterday and intel down 9% pre-market we could be in for fireworks next week as big tech earnings come out >> you both think earnings are important. they always are. this week, i guess, they have been okay. some have been bad microsoft and some others. 3m the market still ended positive. earnings do matter maybe there is something behind the scenes going on here we'll know stephanie, thanks. gunjan, thanks coming up, we have the story of all stories

joe, this is a crazy situation the owner of the new york knicks, rangers and msg. threatening out to cut off alcohol sales at the garden. he is in a spat over the use of facial recognition technology. i don't know how far we will go in terms of what we will say on the air. we could be banned >> i thought if we can't have alcohol, we're not going. >> that's a separate issue that story and more on "squawk" next my dad was a hard worker.

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garden threatening to hold a sporting event without alcohol for the fans this is james dolen. this is the use of facial recognition technology lawyers affiliated with law firms with cases against msg have been denied entry to events because of the facial recognition sees them and stops them as they are trying to walk in >> law clerks. >> in the interview, ceo james dolen accused the liquor authority of taking away his liquor license he would pick a night when the rangers are playing to not serve alcohol. there is a rule that says if you have a license, you have to serve. dolen said he would still go to games. he posted emails and phone numbers of the state liquor

authority. this story has multiple levels >> one who was thrown out was not working on the case. he was employed by the same law firm. >> let's start with how do you feel about using facial recognition, which i did not realize, msg has been using since 2018 as you are walking in, they figure out who you are and maybe it is for security purposes. are you cool with that let's start with that. >> i'm cool with security reasons, but once you go down the slippery slope >> now you are on james dolen's you know what list. >> we could be >> depending what we say >> right >> how do you feel about being stopped? you bought the ticket. >> it is orwelian. it is not the government obviously people are watching. >> private is it private property or do you consider it a public venue

this is when it gets more -- >> you know there are places where, for exkexample, israel ds well with security they see someone that fits the profile. over here, we have the grandmother in the wheelchair. we have the same tsa check on her as everybody else. it depends on where you want to live >> i was doing it in a private property way >> my face is my private property >> no, the side of dolen's house. he can let anybody in the house. >> it is also a place where everybody goes to see the rangers. >> i know. this is why it is public policy issue. >> i think in the big brother vain let's say china. >> it is ccp is at 34th street.

that's what it is. >> we know what they do. they can see dissidents. >> right >> it is almost like ccp you are not getting any free tickets. >> you think i won't >> i wouldn't. you might get -- they may ask you not to come in maybe for a lot of things over the years. >> you know, i'll go to brooklyn that's what i'll do. >> you're welcome there. >> the nets are not bad. >> look. >> you see last night? >> i did not. >> pistons mighty pistons durant's out coming up, expecting results from chevron shares jumped on the buyback announcement layoffs spread beyond tech sector dow and hasbro slashing jobs.

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good morning welcome back to "squawk box. live from the nasdaq market site in times square. there are the futures on nasdaq with intel and the state of the state which is down relatively a bit more than what we are seeing in the dow it is almost flat. the s&p off 10 points. market volatility continues and some investors looking for stable income from dividends dom chu joins us now with the sectornomics dom, i don't know. is the 2-year treasury what is the symbol for that?

>> that's the point, joe you hit the nail on the head in utilities, you found a sector that is typically a bond proxy a place where a lot of investors go for income. you could do that over the better part of the last decade and a half because interest rate policy has kept rates near zero. where can you go utilities and consumer staples the shine has come off that sector a little bit in recent months because of the rise in interest rates why go to stocks that pay dividends like this if you can get free gauaranteed yield from the government this lost a lot of shine partly because of investors found risk free income in treasuries. the sector overall is not that important to the market narrative. it is the third smallest sector out there. only 3% of the s&p 500 when it comes to the dividends,

the sector overall has 3% yield. with that in mind, we took a look at the utility sector and said how many of the stocks in the sector have positive six months medium term price performance and one year and still have a dividend yield better than the overall sector better than average yield, but not there because of the stock which has fallen so much and yeelg yields are higher. that being said, there are three stocks in the sector that fit all of the criteria. the ones you want to pay attention to here are some interesting utility names like pinnacle west. a utility company in arizona you see 4.76% yield. edison international and ppl with 3.1%. these three stocks in the entire utility sector, andrew, are the only ones that have positive six-month one-year price appreciation and better than sector yields.

andrew, back to you. >> okay. thank you, dom when we come back, the labor market in focus as labor layoffs spread beyond the tech industry. we have more on the job cuts we talk about it next. and president biden talking about the progress craralk to deputy treasury seety wally adeyemo when "squawk box" comes back. >> announcer: "sectornomics" is sponsored by sector spdr etfs.

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welcome back to "squawk box. chipotle is launching a hiring campaign looking to add 15,000 employees for the busy start of the year for burrito season. restaurants have added jobs for 24 straight months since the height of the pandemic i -- i'm -- burrito season it is always burrito season. chipotle needs more employees. i had bad experiences. >> yeah? what >> i've ordered online and gotten there and it has been 45 minutes. just not a good experience

you know, success breeds more success or breed about that coming up >> let's talk about it >> some people have to go to work, andrew. >> look at us. s spreading beyond high growth tech hasbro and dow and 3m and s.a pf p. are the latest to down size here with the rising wave of job cuts is jason greer and jessica kriegel. good morning to both of you. we have been talking about the wave moving, jason there are two questions. how quickly do you think people

are picked up on one end the other side is how big is the severance? the big thing is the consumer spending for the economy so far, it is unabated i wonder if the severance packages, i don't want to say rich, but something. >> severance packages have been big. we see in the tech industry is people who have been laid off are picking up jobs within a month to three months baecause they started networking before layoffs. they have skill sets people are looking for. it comes back to the companies because they don't want to look bad and giving generous severance to the high-skilled talent. >> jessica, one of the questions and there are studies on this, actually, that if you have large severance packages, some people have looked, not scientists, but

professors have looked and said maybe they are not worth it. >> absolutely. the harvard business review did studies on how companies navigate through recession and the top 9% of companies thriving post recession were companies who did not have layoffs they reacted with a calm state of mind. staying calm right now is the ak act of non conformity. others are taking advantage of the headlines and getting rid of dead weight. they can do it >> jessica, you are arguing it is a mistake >> yeah. >> there is a look at growth and employment at some companies and say it has been wild >> it is a mistake that is what the research shows. the economy goes through cycles. the recession lasts 15 months.

by the time you lay those people off and re-hire or re-train people the others who stay get burned out and others leave because they are irritated with the management >> the research, most of the research looks back at companies -- more industrial companies over the last 20 years. the last study was up to a couple years ago if you look at the tech s industry, a lot of hiring went on ceos in tech land said we over-hired we should not have done it it was a mistake that is different from the classic situation with layoffs >> there are two things going on there is the mistake of having layoffs which is not the right move going into recession as the research shows the other thing is many tech companies don't understand workplace culture. they think it is the perk.

it is hiring a masseuse. google laid off the highly paid masseuses. >> 27. >> unbelievable. when you hire masseuses, maybe you are fat and happy. those are not what makes workplace culture. that is the experience we have when i get a zoom call and my manager calls me >> i have to get back to jason jes jessica, if you have 27 masseuses, maybe layoffs are warranted. that is why the studies have suggested that layoffs don't work it might be applicable to a different generation of business >> well, let's seie what jason has to say. >> the tech sector moves fast. whether we like it or not, we have the group of tech executives who are consistently thinking about the next big thing. they went about and hired a bunch of people when remote work was a big thing. now they are moving to machine

learning microsoft tried to dump into activision what it comes down to is for a tech company, they don't care about layoffs. it is about the business and about the money. i agree with jessica that it has a negative impact on workplace culture. what we are finding is with the executives, they don't care about that they care about the shareholders being happy and they continue to thrive in the industry >> i'll give awe n example. salesforce under pressure with activist investors. they are looking at the balance sheets and staffing and saying a mismatch they are looking at the twitters of the world and see what elon musk did it is still running. we can debate twitter if you like it seems to be working he cut 2/3 of the place. >> i would be worried.

>> here is what i would say. you have to be careful about setting that dangerous precedent. think about the mindset. if the idea is, well, we're operating well we're making cash. everyone else is laying people off. let's lay people off we are financially thriving and that is a dangerous precedent. you have to consider the negative impact this will have on the people who are still remain within the organization you brought up elon musk elon musk has basically taken twitter as his treasure chest. he is having fun with it whatever the case may be you look at the negativity and look at the staff to the point where people are calling him out on twitter what the organizations look at is if i layoff 5% or 10%, but still thriving, financially, what does it say to the rest of the employees and what will they do as a result >> folks, we have to say thank you. we have news out i want to thank you.

we will continue the debate about layoffs. joe. yes, fourth quarter adjusted on chevron which i don't think the stock is necessarily going to respond to these numbers which are going to be, you know, eye popping. fourth quarter adjusted net $4.09 a share. the estimate is actually $4.38 should be apples to apples it anis adjusted. cut fourth quarter earnings by $405 million the actual numbers is staggering as far as revenue. $56.47 billion we know if you average8 $80 a barrel, that will be big they hidt $66 billion last

quarter. prices have come down whether it is the spr or the winter in europe wasn't as bad as we were pointing out earlier in the show it is a global price set for crude. whether it is wti or brent always interesting to see upstream and downstream. upstream earnings is production and exploration of $5.49 billion. good business to be in wasn't always. wondering how good a business long term. when you return $75 billion to shareholders, it is weird because the business you're in, obviously, as a return, buying back store is a better investment than what you do. it is sad. >> we have been talking about that for a long time >> we're in a position people say rewarding wetalthy

shareholders shareholders, you assume get their capital back because it is not deployed in the company's operations there is nothing conspiratorially anymore you are trying to juice the stock to get the higher compensation for the ceo if it is set on that i don't think that's what's going on here. in the past, we have seen from nike, buying back stock at $90 a share. ge they loved buying back stock they can buy it back now. coming up, intel shares weak on guidance. is this just an intel problem? we will look at the sector which had been moving higher to start the year maybe i didn't notice. amd and intel -- intel market cap may be below amd with the move we are seeing today we'll talk to an analyst reminder, we get the best of

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intel shares are under pressure this morning after missing earnings and revenue estimates and issuing weak guidance for the current quarter. results were hurt by lower pc demand after the pandemic. losing market share, rising competition. the disappointing report comes amid a rally in the overall verdict. vaneck up 16% this year.

you follow this industry i don't want to blind side you with this, but have you seen amd's market cap go above intel? i never thought it would happen. i've been following that company since i knew of jerry sanders. i never thought i would see the day. i think today amd might be above intel's market cap >> thanks for having me on the program. i want to highlight the fact that it's well understood that intel is losing market share, especially when it comes to the server application you also have increase optimism around increase investment by cloud service providers where amd is well positioned so in one hand, you have intel and execution on a cost control that has created a lot of anxiety and then you have amd

that has game share and a hope that cloud spending will pick up and those two has created market cap situation that you just described. >> so it's not -- it's simple to just say that there's a glut of chips and that, you know, there's -- people prepared for pc sales to infinity and after the pandemic, that slows down. intel just isn't responding to industry pressures there were some miscues. should they have had different strategies should they have adopted some of arm's infrastructure >> i think you're looking at two different situations you're comparing apple to oranges. yes, there is a glut of inventory and there's a hope that inventory will be absorbed and we're back to the races come second half.

there's increased optimism remind you that the cloud infrastructure is like a black box. no one can forecast chip demand by the providers like azure and aws. so, yes, intel has executed, issues, expand the business model but we also have a situation where there's a hope that increased consumption, cloud spending, with the excess inventory situation. i'm not so sure if we have a clear path with that kind of a v-shaped recovery. >> would you -- do you prefer it amd at this point. who is in a better position? >> when i look at some of the optimism around suppliers to sh cloud infrastructure, i'm concerned that there is too much

optimism on the reboundin the spending -- in the second half if you look at the cloud spenders, at least 60% of the revenue is generated from advertisement and in a slowing global economy, those ad dollars are going to come under pressure and to that extent it's going to slow down their investment in that context i think companies like amd, nvidia, would have more disappointment coming mid to late this year i like at intel from the foundry side, they have competition from global foundry, from samsung they're building fabs in u.s intel has to u.s and they need subsidy with those investments and they have to tell us, what is their -- not only they're losing market

share, they have a foundry competition. it makes it very complicated to answer your question on amd, i'm not so sure if cloud demand is going to show a v-shaped recovery and that can lead to disappointment. >> thank you for the quick turn around on all things intel and chips. we'll see you later, thanks. >> we have a lot more ahead. chevron's $75 billion stock buyback getting blasted by the white house. and they want to slap oil giants 'rgo windfall taxes. wee ing to have a debate a big conversation ahead two hours as "squawk box" rolls on you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities.

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do you have those budget markups? thank you. mmhm. [bubbles] good morning earnings and the possibility of a soft land b for the economy have the market on track for a winning week and the debt ceiling impasse, we're going to hear from the new chairman of the budget committee about what's ahead for congress, plus, is time running out for tiktok's new calls by congress to ban the app over national security concerns we're going to hear from tom freedman about that. we're going to talk ukraine and much more with him as well

as the second hour of "squawk box" begins right now. ♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. it's friday. i'm joe kernen andrew ross sorkin is here becky quick is off this morning. the dow is up. the nasdaq is down it's been down most of the session, diverging a little from the dow jones. but the s&p has been down for most of the early market -- early morning session. a lot of data coming, though so that could all change and the markets have had an upward biased recently. in the morning they've been done, by the end -- i don't like saying by the at the end of the day -- in this case i'm really

saying at the end of the day >> yeah. >> going forward treasuries, i saw that -- after that better than expected gdp number we were back above 350. 355. look at crude which seems to -- i don't know if we need to set a floor. seems like it has a floor. somewhere around 80. it's $82.30. and crypto up 40% since the turn of the new year, 2023. let's get over to mr. dom chu with a look at this morning's premarket movers what's on tap? >> the earnings report so far is for chevron. the dow component was up in the news big yesterday after announcing that massive $75 million stock buyback. i didn't sit well with officials in the biden administration. now today it's an earnings story.

shares are down roughly a half a percent. just about 30-some thousand shares of volume the profits came in lighter than expected but revenues did come in better, so mixed. and chevron did face headwinds including falling oil and gas prices during last quarter but on balance right now, down half a percent for chevron another dow component is intel this morning chipmaker shares are down 10% right now on over 1.1 million shares of volume intel reports quarterly results after the close yesterday. they missed expectations it also issued weaker than expected guidance for the current quarter. intel was hurt by bigger than expected drop-off in sales for chips used in personal computers. so those intel shares are down by the way, 11:00 a.m. we're going to talk to pat gelsinger,

the intel ceo. we'll keep an eye out for those shares as well and then we'll look at shares of chewy. the online pet products retailer is up 3 1/2, 4%, just around 15,000 shares of volume. helped along by analysts at wedbush. they raised the target price to 55 bucks it was 35 before they like chewy's ability to add new customers to its platform and profit markets chewy shares up 3 1/2 percent, up 6% over the course of the last 12 months that's pretty good in this market back over to you. >>. dom, thank you for that. >> stock market earnings and the chances for a soft landing for the economy. joining us now with more is liz young. head of advertisement strategy at sofi. any change to your sentiment after watching what has been a

pretty solid january so far, liz. just sort of a relief rally, is that all >> look, it has been a solid january. it's been surprisingly resilient in the face of a lot of economic data that's pointing towards a slowdown that's not something that we can ignore i've sharpened my pencil many times this month and looked at it and tried to say where could i be wrong, where could i be missing something, and the answer continues to be, yes, i still want to be cautious. i recognize there are still bright spots in the economic data, although they're waning and there are some bright spots in earnings. if you just look at the broad data so far on earnings, the number of companies beating is below all of the longer-term averages earnings are not really all that impressive, especially considering that we've already revised them down. so if we're -- we're beating at less than average rates on estimates that have already been revised down, that's not a great

outlook. there's a lot of leading indicators in the economy that you have to watch as well. so i'm still cautious. i think that the economic data has not been seen entirely >> so what does that mean for someone that -- in your business are you looking for an entry level 10% below where we are if you knew that was going to be the extent of it and then we were going to be back in a better market, wouldn't you just buy now anyway, buy the names you like, and buy more if you were correct about another 10? or do you think you're going to get a chance to buy things 20% cheaper? what goes into your calculus there? >> i don't know that we're get a chance to buy 20% cheaper. we came into this hiking cycle and this tightening cycle with a lot more bubble wrap around markets and the economy than ever before. it may not go down as deep as

average recessions in the past or average bear markets in the past however, if you are looking over the long term, sure, you could buy now. everything is down quite a bit in 2022 and a lot of the high growth names down a lot. there's probably part of the nasdaq and tech indices that have bottomed. so you could enter now, but you have to enter now knowing that there's a high probability that things likely get worse again before they get better if you're going to enter some of those growthy areas, i think it's okay, things like software, cybersecurity, that's okay but then close your eyes for about six months and make sure that you're not having knee-jerk reactions to some of this market volatility if you're trading and you're trying to find a two to three week upside, i don't know that this is the right entry point. we have 18 times forward earnings on the s&p again and a nasdaq that's up 10% year to date that feels a bit overly

exuberant to me. >> the market likes to shake your conviction in whatever it is, and i guess it's -- it's now testing the bears. but the -- you never know when you're going to be in one of those -- you talked about it earlier, in one of those environments where you increasingly are feeling like you're missing out and the train might be leaving the station and maybe you -- maybe the vix, though, gives you some conviction that all -- that it's not clear sailing quite yet. it's so low. >> right so, here's the three things that i would need to see in order to really question the bearish thesis and question the cautionary tone. first and foremost, we need to see the s&p break above the resistance level and is stay there -- >> 4100? >> somewhere -- more like 4,000. if you look at the 200-day moving line.

we're above itnow. let's say break above it by at least 5% and stay there. the vix stay below 20 and move closer to 15 and stay there. and then the third piece that has not materialized yet, and this is why i continue to stay on this train is that yields on the long end have come down for sure, 30 basis points to start the year, short end down 20 basis points which means that the inversion actually deepened, i didn't flatten if it starts to flatten and looks convincingly flatter, like it may come out of inversion, then i'll have a different tune. >> all right, liz. the disconnect between the fed and the ten year, can you explain that to me who is not facing reality, the market or the fed? >> well, so i tend to think that the fed has to project what they're going to do with some sort of linear assumption.

they have to assume that inflation is going to come down in a linear fashion and this is going to work the way they want it to work things rarely work the way we want them to work. either the market is going to be wrong or the fed is going to be wrong. the fed is saying by the end of the year, they're upper bound will be 5.25%. i would be very surprised if we're at 5.25% by the end of the year i think there is a chance that we have to start doing some cuts before december 31st so i would tend to think that the market is more right about this however, the ten-year, again, the ten-year rallying and showing a decrease in rates is about fear that's not about optimism. >> okay. gimlet eyes is not right rose-colored glasses i don't know people say that market players are doing that i think they're looking and

saying, what did the fed know about inflation on the way in? they're projections were not worth the paper that they were printed on maybe they're getting it right this time. thanks, i'm going to remember those three things to call the exact bottom earnings coming in from american express reporting record revenue but the fourth quarter missed the street estimates on the top and bottom lines american express expects full year revenue growth of 15 to 17% and that's raising from where the street was the street was at 11.3%. let's tell you what's coming up here. the new chairman of the house budget committee, jodey arrington is going to join us after the break. mick mulvaney is going to join

us along with congresswoman donna edwards for a debate you don't want to miss "squawk box" returns right after this. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. impossible odds, save the world. i'm done. what do you have for me? a new way to transform our agency. strategy to execution. oh, looks my laces have come undone. a business card? yes, for ey. tech expertise? $2.5 billion invested. impressive. okay, you've convinced me, i'm back. just gonna... get this...

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home internet shouldn't be a luxury. everyone should have it and now a lot more people can. so let's go. the digital age is waiting. welcome back to "squawk. president biden yesterday saying that he won't let the gop use the debt ceiling as a bargaining

chip and as drama ramps up, our next guest says it's time for america to rein in spending. joining us now is jodey arrington. you think spending is about to get out of control i feel like it's almost impossible at this point for there to be meaningful spending. >> yeah, well, spending has been out of control for awhile. i'm not going to say that republicans haven't made their contribution to our unsustainable debt trajectory and the fiscal irresponsibility in the washington. but for the last two years, rather, $5 trillion in inflationary firestorm, soaring interest rates, and an entry that's teetering on recession and many predict we'll have a sustained recession. and then you have a debt crisis situation on the horizon that would reck havoc not only on the

economy, it would undermine our security and idenquite frankly,i think it is the crises of crises it's our biggest long-term threat to our away of life in america. we have to evaluate our debt position, financial health as a nation, exeand then we need to e course correction. it's what americans expect from our president and from all of our leaders. >> chairman, by the way, i don't disagree with you. i think the debt issue is a meaningful when i wrote the word too big to fail, the phrase was used in the context of banks today we use it in the context of municipalities, cities and countries. i fear and worry about that issue. when this debt ceiling is going to be used as a bargaining chip in some way that could turn dangerous. >> i believe it will and i

believe it has to because in -- just a few numbers for context for your viewers, 16 trillion over the next ten years, half of that is interest, we'll spend more on interest payments on the debt than on all of national defense. and then it's twice the size of our economy in 30 years. so we have to do something to put commonsense spending controls or -- and/or other fiscal reforms -- >> iunderstand that. i'm just saying, if you think about the full faith and credit of united states and you start to think about the debt ceiling, if we get into a terrible sort of midnight situation, as we have, unfortunately, all too often, what that actually ultimately does not cost of credit and all of these other issues >> yeah. well, i think what could happen to the cost of credit is for our creditors and future investors

to say, i don't think america can pay back their debts i don't think at $2.7 trillion in annual deficit, which is in ten years, i don't think that their full faith and credit is good anyway. to me, you got a debt crisis looming over the heads of our children in this country and you've got an opportunity to have an adult conversation and we're not going to default on your debt. we're going to protect the full faith and credit of the united states we're going to -- >> but there are folks in your party who would be almost okay with that, right >> almost okay with a default? >> i don't know about a default, but putting the situation in a pretty precarious place as perhaps a negotiating maneuver >> well, again, this is -- we've had the debt ceiling for 100 years. we've had some of the best fiscal reforms in the last 20 or

30 years that have come from debt ceiling negotiations. i think it's more irresponsible to not have this conversation and just have a clean debt ceiling and just sort of keep skipping down the road as if nothing is going to happen if we don't start reining it in. i think the american people are on our side here i think they're going to bring the president and democrats to the table and i don't think you're going to have this apocalyptic scenario i think we're actually constitutionally obligated to pay the debt but i think republicans are going to put sort of affirmations of that and paying other things that are going to be important to the country. but there's a lot of gloat, a lot of waste, a lot of unnecessary spending and we got to get control of it i don't know how much longer we have, but as for me and my position, we are not going to retreat or surrender until we get our fiscal house in order. >> can i ask you just a totally

separate question on a different issue. you're a texas man, oil man. we've been debating this morning, we're going to debate it a little bit later aswell this issue of chevron announcing buybacks and dividends you heard the white house upset about this people talking about windfall taxes and the like what do you think the right answer is? >> i think when you tax and regulate something like this administration has as a whole of government assault on this industry, you get less of it if you get less of it, you're going to pay more for it so i think that this situation of high energy prices and the numbers that you said on dividends is a result of the -- of this administration's energy policies this is a self-inflicted problem by this administration and it's one of many. >> and then finally, are you a

tiktok man are you on tiktok? >> no, no. i'm not a tiktok man and i don't like the time my kids have spent on tiktok. >> do you fear it's a national security threat or just a threat to the mental health of our kids >> both. both i think it's a problem for our kids but i think this is just another way for china to infiltrate our society, collect information on us and i think we need to wise up states are doing that on their own. i think our country ought to do it >> chairman, we appreciate you joining us this morning. hope to talk to you again soon >> thank you god bless. >> thanks. coming up, trouble in toyland. hasbro falling in the pre market after announcing it's going to cut jobs and forecasting a ba

humbug holiday quarter. american supexpress had a pretty good quarter and helping out the dow. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. who is the creator of the starbucks logo the answer when cnbc "squawk box" continues what's this, a hospital bill? mm-hmm. for 1,100 bucks? ga-a-a-ap! looks like your wallet may need a sling too. tell me about it. did that goat say "gap"? he's talking about expenses that health insurance doesn't cover. eh-ehh-eh! well i'm talking about the money aflac pays to help close that gap. aflac, huh? aflac! ga-a-a-ap! aflac! gap... uh-oh! that duck can motor! get help with expenses health insurance doesn't cover at... aflac! ...dot com.

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corporate buybacks are back in focus after chevron announced a big share repurchase program, a significant one, a substantial one. is there another word that we

could come up with besides massive or do we not even try? what do you think? it was significant, substantial. >> sizable. >> the white house called out chevron that they should be increasing oil production. that's a switch. instead of handing out money to wealthy shareholders joining us now is mick mulvaney. former u.s. congresswoman donna edwards. i don't know if you have an opinion about so-called stock buybacks corporations, obviously, do try to satisfy shareholders and other stakeholders but the shareholders are the people that risk their capital in whatever business endeavor that the company is involved with sometimes ceos decide or boards decide we're going to issue shares because we've got a lot of great investments we want to

make and expand. sometimes they reduce the balance sheet by buying back shares do you think inherently we can make a value judgment about whether a buyback is somehow an evil or some insidious sort of action by a corporation? >> well, in this case, i mean, chevron and other oil companies have complained about not having production capacity and drilling capacity, and so here -- i mean it would be one thing if chevron was spending your money to increase production, to innovate, to invest in new technologies, but instead, in this buyback, sure, shareholders are getting paid, but those ceos are also getting a great payday as well. and i think what president biden was speaking to is to your average consumer who is just being stretched to the limit and this seems just really

extraordinary. there's nothing wrong with making a profit. don't get me wrong about that. but this is really extraordinary and unbelievable at a time when consumers are being stretched to the limit. >> we know -- we don't need to revisit it again but president biden is on record saying we will end the fossil fuel industry. we know about the immense pressure from esg and from the climate lobby about wanting these companies to transition or basically -- i mean, a year and a half ago, members of congress were excoriating oil executives for not cutting production as much as europe had cut in terms of emissions suddenly there's a -- putin invades ukraine, oil prices go up, now the administration turns around and says why aren't you producing more that's the total 180 if an oil company decides the

business isn't going to be viable five years from now, why not return money to the shareholders that's what a prudent corporate executive would do that. >> are you asking me >> i don't see how you can argue the opposite i'll get mulvaney to make that point. you see what i'm saying? do you think the government should be in the business of telling corporations what to do in terms of satisfying their shareholders who own the company? congresswoman? >> oh, okay, yeah, look, look, i think that nobody is arguing that in this environment that these companies are making money. the question is what do you do with that? sure you return some of it to shareholders, but they also have a lot that they can do in terms of investment in their own infrastructure so they can make -- so that they can make

their production capacity much more efficient you know, while i do think that we have to wean ourselves off of fossil fuels for all kindsof reasons and not the least of which is, of course, the climate, and the impact on the environment. but at the same time we also know that we're going to have a multi-tiered kind of energy source that are going to last into the -- at least the near future so i really -- i get where the white house is coming from on this and at a time when there's so much -- so much strength, you would think that oil companies would show a little bit of change here in terms of what they're deciding to do with their -- with their 75, whatever, billion dollars it is. >> mr. mulvaney, you're like ambassador, former congressman you don't -- as long as i call you to dinner, you don't care where i call you

>> as long as you're buying the beers at the golf course. >> we're worried about the beer at madison square garden i imagine, mick, in my view, once you go down this slope of industrial policy with like the chips act, why not have the government tell chevron what to do with profits? >> because it leads to a misallocation of capital the government doesn't know what to do with money as efficiently as creatively as the private sector does. the irony here, joe, it's democrat policies that are leading to this. last night in the house, for example, 150 amendments on an energy bill and almost every single democrat amendment to that bill made it harder to produce energy so you've got the democrat party saying one thing and then doing another. the other irony here is that chevron did invest heavily in exploration and other expenses, twice as much money as they're returning to the shareholders.

over $8 billion last quarter you have to put yourselves in their shoes. we've got $10 billion to spend we just invested 8 billion, but we did so in an environment where it could be really risky to do this because the administration said they want to put us out of business congress is trying to make it more difficult for us to do our job. is it safer to give the money to the shareholders and let them do something with it? that's why you're seeing this sort of turnaround the real question, joe, it's a longer discussion for another day, what's the purpose of a corporation? is it there to sort of help people get together and invest so they can become creative and productive, or does a corporation exist to perform the functions of a political party that's the larger discussion about esg, but it underlies this discussion and complaint by the democrats today about how chevron is spending its own money because they're not spending it the way the democrats want >> i guess in a perfect world, mick, one that adam smith or milton freedman doesn't -- where

it's not absolutist, they would be somewhere in the middle, i guess, people would say. that there are -- there's other stakeholders other than shareholders i would think that -- if it's going to satisfy shareholders, i can't be environmentally irresponsible. i can't be fi-- if it's not a go wage it's not going to survive if a corporation does try to maximum profits, which sounds evil, eventually all those other things fall in line. but there's a big movement that other stakeholders, community, customers, the environment, ef everything else needs to be considered as well do you have a problem with that, mick >> absolutely not. who gets to make the decisions, is it the people who own the company or the people who are trying to pass laws using other people's money that comes down to the basic allocation of capital question there's no one out there saying, look, chevron should maximize

profit to the determent of the environment. it's illegal for them to do that and many oil companies have gotten in trouble in the past. when it comes to stock buybacks, the end of the process they've done what they're supposed to do, they followed the law, they've taken care of the environment, maybe even a little bit more. they paid their employees, maybe a little bit more is required and they have money leftover in the end. how do they want to invest it? back into themselves in an environment that might make that a bad investment or give it back to the shareholders. the white house should shut up about it it's really not their money even though they want it to be. >> congresswoman, there's a move for windfall profits do you think when an oil company, putin invades ukraine and oil goes up, they make all this money, do you think they shouldn't be able -- in a period like that they shouldn't be able to keep all those profits, that they should be taxed

>> well, i mean, look, first of all is white house is not making the decision about what chevron should do with the money they're expressing a view that --making sure that shareholders get the benefit of their bargain and their investment is one thing. but corporations also have a public -- in addition to their private enterprise, they have public responsibilities. and i think what the white house is questioning is whether chevron is other companies are meeting their public obligations in addition to satisfying their private investment. >> no. the government is responsible for making sure they follow the law. that's it. the public obligation should fall to the shareholders, the directors of the company, the people who rub the company the job of the government is to make the law and enforce the law. if you want to put a law on the books that says shareholder buybacks are illegal, which we did under covid, let's do that but it's not the government's business to tell you what your public obligations are beyond following the law.

>> we got to go somewhere. i guess that's our obligation to shareholders we're going to go to a commercial congresswoman edwards, thank you, ambassador, congressman mulvaney, what's your full name? >> it's john michael, believe it or not. >> john michael. and someone came after mick. after jagger >> my dad was a baseball fan and my mom wanted to name us after kennedys, split the difference. coming up, we're going take a look at what is moving in the premarket and growing calls from tiktok to be banned from washington down to the state level. is the app a security risk or not? we're going to hear from tom freedman about that and so much more st ted ayun

welcome back to "squawk box. the futures right now, the dow has turned negative, maybe somewhat due to this 10% loss that we're seeing in shares of

intel. american express offsetting some of those losses. up $8. something other than just intel in terms of what's ailing the dow itself and the nasdaq and the s&p were both lower for most of the premarket session calling to ban tiktok are growing louder on capitol hill we'll talk about security issues, china relations and the war in ukraine with tom friedman after the break. take a look at a the s&p 500. "squawk box" will be right back.

welcome back to "squawk box. a growing number of u.s. lawmakers are calling for a ban on tiktok over concerns that the chinese-owned social media platform puts americans' data at risk josh hawley introduced legislation to prohibit use of tiktok on all devices nationwide the commit on foreign investment in the u.s. is investigating the potential for national security risks as well and tom friedman joins us this morning. he's the "new york times" foreign affairs columnist. it's great to see you. what do you think here >> andrew, i think we need to stop for a second, let's go to 30,000 feet and ask, what kind of relationship does the united states want to have with china because it feels like we're kind of willy-nilly, going into a cold war and i think we really have to ask ourselves, where is all this

going? where do we want it to go? on tiktok in specific, i think there's a legitimate reason for concern. four bytedance employees were dismissed for basically hacking into the ats of four journalists who had written articles exposing workplace issues inside of tiktok and they used tiktok to track them. bytedance released this and -- but that's a very serious thing. that's actually the nightmare scenario since then -- let me say one more thing bytedance has in its discussions with cfius, which oversees security issues with u.s. exports, has offered to basically put all their, you know, cloud data in the united states in oracle servers that could basic be monitored by cfius or basically a team from

cfius and a third party. and i raise this because i think it's very important, we have two choices here, we can basically say, anything coming out of china is a national security threat because anything that has a chip in it is going to be accessible my chooinese-based toaster. or they can create content that inspire them to better behavior. we need to think long and hard about which track we're going to go down there. >> let's start there which track do you think we should be going down >> i think we should be going down the track of creating context where we can basically test and encourage chinese companies to behave better let's take huawei, for instance, i would not be against saying to huawei, we're going to let you wire with 5g idaho we're going to watch you for two years. we're going to watch you with

everything if you do well, we'll give you montana. i think it's important to give them a ladder into better behavior otherwise, this goes everywhere. >> is the risk in your mind that americans are going to be hacked, the chinese your mind tt americans are going to be hacked, the chinese are going to know where people are, going to know details about them, is that what people worry about? is that what you worryabout? is it the power and the influence that the platform could be used for in the future, which is to say to try to influence politics is it the scale and scope of it in so far as i have had people say, look, we would never let a foreign country if not foreign adversary own every local tv station in america and maybe

that's what tiktok is especially for a new generation. >> they're all serious problems and challenges, but for me, andrew, you have to ask, again i go back to where does this go? are we going to ban any chinese company? i'm worried about facebook than tiktok today and the information facebook has, how it was used to hack one of our elections. they're hugely problematic in terms of privacy issues. i don't use tiktok at the same time -- >> there are folks who would hack your phone itself >> yes i don't trust -- by the way, i don't use facebook, either i think we'll wake up one day ten years from now and realize how destructive hall this media was.

that's another matter. but we have to think where the u.s.-china relationship is going. it's extremely important to global stability we got to, are we basically going to run around and saying, the chinese are coming or take the threat seriously and create ladders for better behavior. that's where i would lean. >> would you believe, i interviewed the ceo of tiktok and we talked about this oracle cloud and trying to separate these things some people believe it's possible meaning, the algorithm would be different, on a different server others say it's impossible what do you think? >> i'm not enough of a technological expert to know if it's possible or not possible. my general view on the whole

u.s.-china trade relationship we should identify what's truly important for our national security and build very high walls around it and then we should create a space that aren't really a threat to our national security where we can engage in trade that are mutually beneficial for our two countries. >> tom, we've been talking about moral relativism and trying to navigate through this very difficult geopolitical period. we had secretary pompeo on he got a lot of criticism about some of the comments he made about khashoggi. there's a bigger -- there are bigger concerns and sometimes i get that same feeling from you with china that there are over-riding concerns where more people would

benefit from softening our tone with china, knowing what's going on, we're not going to china and maybe through cohergs, but in the meantime it's a world where things like this exist is saudi arabe worse than china with what happened to khashoggi. >> that's a very important question two things can be true at the same time. one thing that's true, what saudi arabia did to khashoggi was inexcusable. one of the worst things i've seen a government do to an individual at the same time, the very same government, leader who ordered that has also initiated the greatest social and religious

reform in saudi arabia's modern history a reform that has huge national security interest for the united states. because saudi arabia is home of islam. it affects the entire arab muslim world when they took the right turn in 1979 what started then, took this turn, that ended up in 9/11 started in 1979. a saudi leader reversing that's a huge in u.s. interest. you can't excuse what he did to khashoggi. >> should we be upset with germany? are they fully engaged are they part of the solution here or just a lot of feet dragging we had to i don't know when they get the abrams tanks, it's going to be a while, we have to build

or something, but this was to get china to get something -- >> to get -- >> i'm sorry, germany. >> yeah, they've had a long relationship with russia, they're basically right next door, their concern as is the united states' concern, ukraine would usethese tanks to basically create, to ride over to the boarder in russia and trigger world war iii. at the end they came around n the historical context, the fact that germany which has been 25 pacifist power has tilted as much as it has toward ukrainians, that's a pretty big deal the fact they've done it incrementally doesn't bother me. i think they came out on the right end of that decision >> they finally did the right

thing after they didn't. >> right. >> okay. okay, tom friedman, always good to see you, sir >> you guys, too. when we come back, a lot more on "squawk" president biden touting progress more on the president's agenda plus, we're expecting a slew of economic data in the dow is off 13.5 points we're coming right back. 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.

good morning 30 minutes and counting to some brand-new inflation data new to us. occurring. we'll find out what it was policymakers will have the numbers and instant reaction and new earnings from two dow components, american express and chevron, both out with fourth quarter numbers and president biden hailing u.s. growth even as wall street remains split on whether we see a recession later this year. just minutes, we'll go over the latest signals with the deputy

treasury secretary as the final hour of "squawk box" begins right now. good morning welcome back to squawk box it's just the boys, andrew sorkin along with joe kirwan becky is off today apologies to the audience. u.s. equity futures, red arrows across the board nasdaq off about 72 points let's show you treasury yields as well. you look right now at the 10-year note and the 2-year note mike santoli, straight over to him down at the new york stock exchange what are you watching this morning.

>> mild pullback in futures. one feature of the market so far this month has been that gift-buying instinct has returned the stock market in general has answered some of the skeptics' questions coming into this year, the demand for stocks. we're on the verge perhaps of winning a few more points for the bulls in terms of breaking this long trend line nothing magic of getting above that but it does show you we're not bumping up against that same line that has contained rallies up until this point. i do think you have to also keep in mind we're still below levels that we hit basically late november so it's healing but not necessarily cured is the way i would put that take a look at that leadership,y so this clearly shows that perhaps people overanticipated a

weakening of the household sector another theme in this market and we're seeing wit this pullback we'll get in semis this morning on the intel news, a preference for old and real assets over digital ones that's obviously a split from the past couple of years take a look at the steel stocks. versus semiconductor stocks. the peak before the pandemic hilt, steel has now surged above what semis have done very long-term basis semis still up huge on a 5-year basis. we're seeing signs of capital spending, manufacturing reawakening around the world with china and steel stocks have been hitting new highs most days >> lots to chew on see you in a little bit. president biden cheering a better than expected

fourth-quarter gdp number in his first economic speech of the year recriticized the republicans for not raising the debt ceiling 2.9 on the global comparison basis, mr. secretary, some troubling or at least some warning signs about capital investment it looks like it could press aj some weaker numbers for the rest of the year in terms of gdp. >> good to be with you i think that you're right, we had a strong growth number coming out of q4 the thing that encourages me in talking with ceo, many of them have looked at the inflation reduction act closely, you're right, we have a bunch of headwinds many of them coming

from abroad, be it russia's war in ukraine or china's slow reopening. in the united states i feel very confident that there are great incentives out there for companies to continue to investing and for the economy to continue to grow. >> we have the federal reserve, birds got to swim, fish got to fly, i know i said that backward think about our debt ceiling and what that means we're going to have to spend just to service that instead of on things we really like to be doing. take your pick there's wish list on both sides of the aisle with what we could do i don't want to do the math on a higher interest rate will mean that we're paying on that. do you blame people for maybe trying to force some reckoning with using maybe a debt limit, debt ceiling, just to focus the

issue on what we need to do, secretary? >> i think we've got to create a plan to deal with that deficit and the president has one and he's happy to talk to anyone about it i also know the last thing we need is a manufacturing crisis as you know well, throughout the history of the country, the thing america has been known for is paying our bills. to say we're not going to pay any of our bills in order to start negotiations is not a acceptable fundamentally the president has a plan for bringing down the debt and deficits. he's happy to talk to anyone the thing we can't afford to do in this country is to create a manufactured crisis. we need to continue to invest and take the steps that america will continue to grow. >> you think that the pandemic

spending, post-pandemic spending, some of the trillions that we spent in the last couple of years, do you think that's exasperated prices and that's why the fed is forcing its hand to do this kind of self-inflicted or do you think it's pandemic reopening, supply chain, the war in ukraine, do you at least acknowledge that maybe the fed had to enable all the spending on the fiscal side and stayed at zero for too long? >> so what we both know inflation is an american phenomena loan headline inflation around the world. central bax not only in the united states but europe andth uk are dealing with that that spending happened during the biden administration, but also during the trump

administration but you have to think what the alternative was. we're seeing that alternative in china today, they've dealt with the virus far longer and their economy has struggled. the investments we made allowed us to get out of the covid recession and now we're addressing the supply chain issues over the last six months we've seen inflation come down while we still see the economy grow and we're still able to create jobs we're working through the pandemic-induced high costs that only impacted the united states but the rest of the world including places like the american rescue plan that ultimately helped us create jobs >> do you think the administration and you yourself, do you agree with the fed's hawkish comments and hawkish tone, or when you see inflation come down and the economy is still growing and when you hear, you know, the stock market has gone up a little bit this year,

then you hear all these things were bad we got to raise unemployment make sure the stock market doesn't rally. slow down this economy are you onboard on this? >> i'm not going to comment on the fed. we appreciate their independence but what we're doing on the administration's side, the president is focused on lowering costs, we're doing helping get supply chains back in order and we're seeing the costs come down we've done a lot to reduce c costs, things like the inflation reduction act. created ways to grow the economy going forward. ultimately the goal of the administration is to bring down costs. >> we're at 120% of debt to gdp.

i don't know what the deficit is going to be this yhigher if you had, if the administration had friends in the house, in other words if the democrats still controlled the house, would you be okay proposing another x amount of -- let's say another trillion, 2 trillion on social programs or some type of outlay, student loan forgiveness, would you add another 2 trillion or 3 trillion on, wally, if you had cooperation of the house in congress in. >> the thing i will mention the deficit did come down dramatically last year and i think we can take steps to bring it down as well. the president proposed sets of plan will do it. including modest tax increase allowing us to bring debts and deficits >> would you spend more?

would you propose -- another i.r.a. 2 no shortage of ideas as far as democrats go on spending for a lot of this i think redistribution would you spend more >> so what i'm doing today i'm working on implementation on the laws that already passed i do think one thing we need to i think through going forward we have an package that allows us to continue to invest in america. the president has a plan to do that he proposed a plan of increasing taxes modestly we both know in order for the american economy to grow we've got to make investments. the inflation reduction act is not only america companies but companies around the world

they're thinking about making investments in states like ohio and new york we got to bring in revenue by modestly increasing taxes on those who make more than $400,000. >> we wish the fed, or at least certain people wish the fed had another tool to have any supplyside instincts at all, or is that, it doesn't enter your thinking? we could do more oil leases, less regulations in certain areas. we tried to help the chip sector there are times you tried to help the private sector. >> i completely agree we got to do more on the supplyside. i think about the labor supply in the economy how do we more worker training when i talked to the energy majors in those companies, what

else could we do to help them? one, they need more workers and two is reform. it should be bipartisan, it will help us in terms of energy security, producing more fossil fuels and we're able to move toward a clean-energy future as well things we can do on the supply side that will unlock. >> thank you >> thank you coming up, breaking inflation data before that, we'll take media ahead. one of the industry's top voices and our big earnings movers today. american express expecting full-year revenue growth above analysts' esmatites. and chevron. the dividend and buyback

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check out some of wall street's top media stocks one of media's biggest and most influential banker he points out that some companies will have to, quote, grow down before they grow up. it's great phrase. his firm has over 250 major media deals over the years, totalling more than $750 billion. good morning to you. >> good morning. >> we should have a big chess board out here on the table, i think, and each one could be a piece in the media sphere. because everyone thinks there are supposed to be all sort of consolidation and yet frankly nothing is happening right now is that a function of washington, is that a function of the mindset what's happening here? >> i think -- thanks to becky

for giving me her seat for a few minutes here i think it's a function of digestion and rates going higher and being more difficult and challenging to get things done now that you have management teams in place, the fact that you changed the business model, business to business environment to a direct to consumer environment you got to get to scale and prove that those models -- >> so what does it mean to grow down a phrase you invented in this year's letter. >> i played with a few different titles growing down is obviously starts with a personal reflection when you get to the end of the year, you start to get to what is your competitive advantage? center around that before you grow again get to self-sufficiency.

profitability not just to grow and push off those deferred costs and getting closer to showing the shareholder base what the streaming wars could look like for their benefit not just for the sake of business models and for the tech companies not to overhire to contract down to the core strengths and show that strength in the future as well. when rates go higher you have to make choices. >> let's talk about those c choices. the other piece of that choice, so long in media companies trying to follow in footstep of the fever dream like netflix the question is, is that dream still alive or something else? >> netflix may be the only one they can get to the other side of the ocean, which is to say, you actually show that you have both content that consumers want

and profitability that shareholders want. both of those things are hard to accomplish the media industry has moved into the ocean and used a lot of their core business models to get there but haven't shown a scaleable structure. >> if you're whispering in the ear of the media elite, what are you telling them what to do about this >> well, consumers now have gotten a lot of benefits of this great content, renaissance we've been experiencing, and the business models changed. the shareholder landscape has changed. we used to like growth and spending for growth. now we want to cut back to survive and show much more in near-term profitability and management teams are going through that right the leverage has to come down as well, because financial capacit

is important as well profitability has to come first. >> we always hear that analog dollars are going to get digital dollars. spend on content, why did we think that always wouldn't down? i was talking about, i realize how much i like content, al jazeera is the only media, i want to relax in front of, you know, a screen, why does it seem like neither cable or streaming the holy grail it's going to be digital nickels, not analog dollars. >> the cost of content keeps going higher growing up we watched espn and

sports center. now you watch live sports content. >> lots more player are making less per player. >> when you watch the nba you're watching it on broadcast television, abc, you're also going to watch the regular season, for the finals, regular season on tnt, turner, or espn then you're increasingly going to watch some games on digital as well. not one party can afford all those packages you have to stlies that up partnerships is okay not everyone can do that so, that transition takes time and shareholders have to be brought along. >> the appetite for what we're talking about is going to go up 10% a year >> there's too much of a good thing as well. you're getting fed a lot of

content scripted on the streaming platform lot of sports content on the front end. we're not getting content like seinfeld and friends >> you're trying to consolidate to take costs down, one business model. but the other is, people need growth right, how do you growth-growth? i know for years you talked about gaming we have microsoft trying to buy act have beenivision netflix is trying to get into gaming the redstones owned a little bit of gaming. >> if you have ip or intellectual property or unique library value which disney is known for, more than netflix, core library value, how do you

fully monetize that? >> effectively just license, sells to everybody else. you have to own -- >> it depends. >> on a great library you can own that content and you have to monetize if you don't need to own the content you can lease the content. you have to grow down to make choices. there are other extensions of that geographic extensions. we talked about saudi, las vegas anew in the desert there are very few places for structural growth left >> you helped put the at&t or warrenmedia deal together with discovery.

long term, is that company an independent company, merge with somebody else, what do you think? the calendar is starting to get to a point where a transaction becomes more palatable warner discovery. >> the transaction gave at&t a lot of financial flexibility and gave warner a lot more of a broader set of assets now to extend the content of discovery and hbo max and warner brothers studios, cnn, et cetera. they're digesting the debt, grow down, it's an operating model right now. maybe some assets here and there. build back the cash flow and shareholder confidence that's the near-term goal. not expected to be any kind of major transaction any time soon. once you have stability and profitability, you'll go back to that profitability and that mernler environment.

>> what happens to at&t? >> t-mobile sprint is the now the most powerful, most profitable cell phone or wireless carrier in the country. >> i think you'll see consolidation with the telecom companies. not only in the u.s. but globally that's a function of now renewed financial flexibility. >> you think -- i remember years ago, now 20 years ago when people thought verizon and vodaphone were going to merge. you think that's still in the cards. >> i don't want to be specific on any certain companies, but i think the content of national carriers pending regulatory approvals in the united states or other countries will happen and i think whether it's latin

america, europe or the u.s., or even eastward, i think this will be more telecom consolidation to come i watched break point and i watched the super league documentary on apple tv, actually, that was really good >> what do you think taylor is going to be worth? >> great programming. >> i can't turn on >> all of the spin-offs. >> we got so many other questions. we're going to run out of time >> we got to go.

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good luck young man. realtor.com to each their home. welcome back to squawk box this morning right here on cnbc. new inflation data, rick, the numbers are -- >> yes, spending for the month of december, some of the fed's favorite metrics regarding pricing better than this report. the headlines, personal income expecting to rise by two-tenths of 1%. do keep in mind, in october it was up seven-tenths. the largest number since january of 2022 it was minus 110 the spending side, minus

two-tenths of 1% the lightest number. it equals december '21 you have to go all the way back to february '21 to find a bigger federal government tif number. that isn't good. real spending adjusted for inflation it's down. personal spending expenditure is up one tenth of a percent. that's about what we were expecting and arguably, you can say it's little hotter, we're expecting it unchanged in the rearview mirror between july and now, up four-tenths last month, but that was revised. now we look at the big year over year number, 5%, the deflator year over year is 5% as expected this is good news. 5.5% in the rearview mirror.

on the core deflator month, exactly as expected. two-tenths number. high-water mark was in april 2021 we've made some real progress there. the most important, personal consumption core deflator year over year, delivers at 4.4% which was expectations exactly and in the rearview mirror it was 4.7% the high was 5.4% in february of '22. the last time we had a number smaller than 4.4%, you have to go back to october 2021. andrew, if you put a 10-year note yield chart, we're at 3.5% now. it gives us a notion that the

market isn't nervous about this number in any way. we can always see inflation lower. still too high historically but we made significant progress back to you. >> rick, thank you very much over to steve who joins us with more who's been looking at those numbers. what do you think. >> i think they're pretty good numbers, andrew. i'm looking at the inflation data inside and what i see 0.7% decline on goods inflation, however the unfortunate part the thing that powell looks at, which is services inflation was still 0.5% compared to 0.3% in the prior month. look, income is doing okay up 0.2%. it's the spending, we had a contest here, andrew, we had a split decision between a strong

ob october and lousy november and december the impact on services versus goods spending overall, take me one second to look at that that's been an issue, whether or not this decline in goods spending has shown up in the service sector i got to run the table table 6 here or table 7 to look at it. service inflation did -- it looks about flat actually. service spending looks about flat this month. i'll go back to that andrew the key here is the extent to which service consumption has taken the place of goods for the consumer. you had something of a rebound in the savings rate, so you had a big decline in the rate of savings, people had a lot of money stocked up now they're building that back up, a key getting to a more

stable economic footing here get tag savings rate back up to a better place. >> steve, thank you. have a great weekend. coming up, former dallas fed president richard fisher helps us break down inflation data stay tuned you're watching "squawk box" on cnbc from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring. purposefully divergent.

we've got some breaking news from salesforce this morning a company that has now been the target of activists, i say that plural, announcing this morning they're going to be appointing three new independent directors, arnold donald, the chief financial officer at mastercard and the chief executive officer of value act one of those activist firms and we'll see whether that does anything either to the stock or to the pressure that has been placed on the ceo of that company and the company itself in terms of cost and the like. that news just crossing just minutes ago. we'll continue to watch.

>> all right, what's the stock doing? >> the stock's doing virtually nothing right now. we'll see whether this placate folks. the big issue has been cost and how much that company has grown. >> for more on the new inflation data that we just got and the impact of the fed, former dallas fed president richard fisher senior adviser at barclays cnbc crontributor, does that go ahead of the dallas fed stuff? equal billing, right at the top in. >> cnbc definitely the top, top.

>> we haven't talked in a while, richard. are you -- everything that the fed has done and said, do you have a problem with any of it at this point >> i think they're doing well, they made a mistake, we talked about this before, joe embracing this transitory argument which is silly. the inflation, bring it back, they've been bringing it back in, i think they moved quickly, but very important in terms of the value they've been telegraphing everything. we know this coming meeting it would be a quarter point it's already been leaked out to the wall street journal. he's the fed whisperer so, i give him credit for being transparent. and i think we're likely to have obviously another quarter point

increase that was after that. >> given the economy and the numbers that we're seeing and we get mixed things sometimes the economy looks pretty good and other times it looks like there are some cracks can they do it with words still? they can say it and they don't have to get there. >> ben bernanke used to say words are as powerful as rates themselves i would assume they will still be determined, determined to be forceful because he doesn't want to have two errors in a row. stopping early, having inflation continue on, not coming back toward the 2% target the numbers we discussed today, joe, i like to say instant

analysis is an oxymoron. i need to send some time as steve mentioned time to look at the data but the market reaction has been bland. and we'll just have to see what they can sort of deduce by setting the numbers. >> do you think that, that the 2-year and 10-year will get in line with the fed or do you think fed comes down to what the 2-year and 10-year how do you explain it? >> well, we've had this inversion for quite some time, joe, and everybody's been saying this the harbinger of the recession. the 2-year has been steady but

it came off as well from 4.7. >> nowhere near 5% >> i agree >> 3 .5% on the 10-year. someone's lying, either the market is lying or the fed's lying. >> look at the demand for treasuries, joe, central banks have, they have been reducing their holdings cayman islands, we're seeing a lot of private money flowing into the 10-year flowing into the 1-year, 2-year, 5-year notes i'm not surprised to where these levels are trading and i don't think they're telling as much as economists input into this inversion. >> if inflation is a global problem does that vindicate policymakers here and the fed

here in the two years that, prior to the pandemic when we were spending, which people probably said we needed to, we spent a lot afterwards, too, are they vindicated or without blame? we just had the assistant treasury secretary saying it's a global phenomena, inflation. >> well, i disagree with that. but without trying to be at all partisan because i'm not a member of either party i'd say you'd have to put it in perspective, joe, when the cold war ended, since then the equivalent of $17 trillion has been saved in terms of what we spent on defense we're now ramping up again and we replaced a lot of that 17 trillion with social spending and infrastructure spending and all kinds of things the government loves to spend money on so, here's what i'm worried

about. i'm concerned about and what to see better analysis. every country in the world will float more paper probably trillion and a half more treasuries coming into the market every government, japan settled their spending on defense, becoming offensive rather than defensive, having that capacity. the europeans are going to have to float more bonds in order to finance their fiscal spending driven heavily by defense spending who's going to buy that paper? at what price? we have yet to see it. so i think this in a way, joe, puts a bottom floor on where yields might go and i'm not surprised to see them hold up to the level they've been holding even as they come down they're still at high levels. >> what the deficit is going to be this year what does that mean for gdp this

year, in exyear and the year after? permanently muted by spending so much >> i think the cost is $800 billion, it's a big number and -- remember janet yellen, i know you're a critic of her, she was right when she said go big at the 1%. now the rollovers are coming and the rollovers are coming in the 4% range and slightly less that changes the whole equation, joe, and more deficit spending means higher cost to carry and it elbows out the need for ramping up defense so this whole debt ceiling crisis as they call it, the question is, what kind of spending do we carry forward and where do we cut? the cost to carry has almost

tripled since the big numbers started coming out on the infrastructure program this is a real challenge, joe, i puts a floor on rates regardless of where the fed function is. >> sorry, did you think the cowboys were going further than that what would you do at this point? i don't know jerry jones is -- >> he's a financial genius glit's about money. >> i'd get another quarterback dak is great in the locker room but a terrible performance i they'll have to lock these guys in for a lot of money. >> they locked dak in for an awful lot of money. >> exactly, i think that's going to be a real problem meeting their payroll.

he's a remarkable -- financially, his daughter who runs the business, charlotte, the brains in that family in my view, together they're a dynamic duo. how's that >> jerry's got no brains the only person with a brain >> no, i mean, jerry -- >> you're not sitting in that box anymore. >> charlotte controls who sits in the box hello, charlotte. >> glad we could help. coming up, jim kracramer's first take on the trading day ahead. a look at the futures. we'll talk to him about salesforce, whether this new news about the board will change touch, sight, sound,

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♪ got some breaking news salesforce appointing three new independent directors, effective march 1st. the directors are the ceo of krarn value cruise line, and the ceo of value act capital let's get down to the new york stock exchange jim cramer joins us now. jim, your thoughts what -- how does this change the calculus >> well, you know, elliott wasn't involved, so it's a little more problematic, because i think elliott had other ideas about who should get on, and that's going to cause a bit of a conflict elliott is tough they may like some of these

people the mastercard cfo is -- actually, all these people are really good. huge arnold donald fan, and i know he's close to marc. the directors who retired have been there a very long time, but i think there's still -- i think there's still going to be a tussle i think that elliott's not going to necessarily be happy with these picks. >> yeah, former ceo, obviously, of carnival cruise so, you're not sure that -- you're not sure that this is not going to assuage what is still a likely to happen >> i think elliott wants someone on the board, and they've got millions they spent billions of dollars, and they've analyzed the situation pretty closely look, i think that marc has developed a fantastic product. i think that the costs still need to be a little more in line, but they all want him because the product's so great, they think a lot more money can be made, and i think that elliott in general likes to be consulted before any big move like this, and i think that

these -- this was in the process before elliott got involved, so it will be interesting to see what elliott wants to do it's not cut and dried to me >> what do you think about value act on there, though does that give them some kind of peace of mind? do you think, no >> yeah, i think it does i mean, value act's important. but remember, elliott is about elliott with a plan. and they don't come in, idly, and i think that they may not necessarily like the skill sets. look, elliott likes their people on, and i don't know whether elliott's going to say, wow, that's so great, we have the former ceo of carnival and a dynamite cfo from mastercard it doesn't resonate to them, i don't think. >> american express is a juggernaut, i guess. >> i love american express here. they blew away the numbers there's going to be some who say it's too high. that's a person who's never been in business and doesn't know anything >> i asked someone earlier, is amd's market cap -- when was the

last time or has it ever exceeded intel's market cap? >> it's been, but now it's historic, the decline. it's historic. and somewhat tragic. it's like u.s.steel versus new corp., fnkraly >> kind of "squawk box" will be right back. 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 ♪♪♪ there's no going back.

welcome back to "squawk box. take a look at the futures right now. this is after we got some new inflation data, and we're going to talk about that in just a minute take a look.

dow right now off about seven and a half points, the nasdaq off about 60 points, the s&p 500 off about 14 points. i want to bring in the managing partner at veritas group your sense on these inflation numbers, and are you surprised by the way the market's taking them >> i'm not necessarily surprised, andrew. at the end of the day, the market has been hoping, and joe referenced this earlier, we see this in the fed funds futures rates, we see this in the ten-year and the two-year, the market has been anticipating some type of pivot the market has been anticipating some type of relaxation or at least pause by the fed, and we're just not there yet you know, what will rightfully grab headlines is that on a year over year basis, the number came down, but probably more importantly, when you look at a month over month basis, it's likely gone up about 20 basis points as long as that number is still increasing, we can look for comfort in saying that the year

over year went down, but that probably ignores the base effect in that we're lapping some pretty difficult comparisons as we go forward. >> what are you doing about it what do you think viewers should be doing about it? >> i think you'll be shocked, andrew i actually looked to be more bullish when i looked -- did my year-end lookout and i looked across 2023 and tried to write down my expectations i actually started to get very bullish about the fourth quarter in particular. i think we lack some very easy compares, particularly with some of the technology companies where ad spending fell off, et cetera. i felt that analyst estimates, which are still a problem, still too high, i thought when we reached mid year, we will have gotten the expectations in line with what we're likely to see, and i think -- i thought that we would be past the fed and looking to the fed for all of our market movements i'm now less optimistic about those scenarios. one of them, we also touched upon earlier, that we are now

425 basis points into a rate hike cycle, and yet we still have unemployment at 3.5%. remember, the fed is targeting 4.5%, if not more, to get that wage inflation under control, which is the primary driver of services inflation and if there's going to be a duration between when the fed acts and when we actually see that play out, we get the desired results in the market, that means this is going to be with us for a while longer than we expected. >> but i think part of the question is, i think we know what the fed's going to do in the near term. the real question to me is what you think the fed is going to do next fall, and i know that's maybe we're looking too far out, but that's basically what people are betting on, one way or the other, at this point >> i don't think it is looking too far, andrew. and i think that's why you hear a lot of folks now subscribing to higher for longer their higher is probably less than my higher remember, i'm on record as saying i think the terminal rate will likely end up being somewhere around 6%, but i think we'll be in that range for a couple years

>> what do you think -- what did you -- >> 6%. >> take that back. >> we're eventually going to see -- >> oh no >> i don't want i want to be that don't get me wrong >> we're out of time >> let me ask you this, guys >> you'll come on back, greg, and we'll talk more about it we got to go and send it over to our friends on "squawk on the street." it's been nice to spend time with you, sir. >> do it again >> see you monday. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange david faber has the morning off. pretty steady premarket despite that historically bad quarter and guide from intel last night. meantime, the data today, fairly constructive core pce, the fed's preferred measure of inflation, the slowest annual rise in a year and a half vicks is below 19. our road map begins with intel's no good, very bad quarter, pat