good morning love for inflation data. u.s. futures turning higher as investors wait for the first of two big reports that could definitely be market moving. tesla workers in new york want to unionize demands to musk. higher pay unless workplace monitoring. and palantir getting investor love today after results. it is tuesday, february 14th and love is in the air we'll play the song you just can't hear enough. "squawk box" song. valentine's day. "squawk box" begins right now. good morning welcome to "squawk box" here on

cnbc happy valentine's day. we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. we hhave red sirens to add to things dow futures indicated up by 48 the s&p up by 10 this comes after big gains yesterday. the dow had the best day since january 6th yesterday. today, we are focused on cpi out at 8:30 a.m. the expectations were .40% year over year, 6.2% core rate is expected to be up by .3% year over year, up by 5.5% expectations are looking for the things if you look at hotter numbers, the drop in the

numbers. we have coca-cola at the top of the earnings calendar we get the results at 7:00 a.m. eastern time we will speak with the ceo james quincey at 7:30 a.m. about the numbers. we talk to him about what he is seeing in inflation and the economy around the globe and consumers are feeling and quite a bit more ahead of that, we look at the equities if you have been watching the treasury market, the 10-year treasury is yielding 3.69% that is the number to watch when we hit the cpi it's back up >> great to have james quincey on we had pepsi on. no abatement in inflation. they make all the toes doritos and tostitoes.

we had the market up a little on flags inflation. you know who we have coming on >> james stewart >> no. >> we do >> a person that we unceremoniously canceled last week amy wu silverman i'm glad we canceled her now i want to see what the options are saying i looked at her notes. nothing weird going on with options. it is expiring friday and you think there would be actions based on people positioning for hot or cold. not so much. we will talk to her. you can't wait to get to lael brainard >> moving at the white house >> from the fed to the white house? telling people about it. white house shuffling the

economic team. we will go with this conversation president biden said to name lael brainard to serve as chair of the economic council. the official announcement is expected this week she will succeed brian dees. this opens up a conversation at the table in a political nature or not >> plus the fed is a big job >> vice chair of the fed >> i would not necessarily walk away >> in fact, we are so -- we're not losers, but a long conversation that is the first thing on valentine's day we're talking about. the fed does view you with a lot of credibility it is like janet yellen. i think of her treasury secretary is pretty good look at austin goldsby i used to make bets with him

now he is mr. chicago. he says you have to call me mr. president. >> we will never get him back. >> you prefer to be the vice chair of the fed >> i would rather -- >> or in the white house right now? >> well, the white house has its own perks. maybe she wants to make a difference >> then the question is where do you make a difference? >> right >> the fed, you just got to nod when jay powell talks. it has to be 13-0. >> she has been outspoken as vice chair of the fed. at the white house, you have to do what they want you to do. >> brian dees said he is doing what -- >> they have so much money to spend with the chips act and the inflation reduction act. yeah >> i listen to everything she

says as vice chair >> right now they have to implement this because nothing else is happening for the next two years. zippo. not a single bill passed move on. japan nominating 71-year-old central bank member kazuo ueda as the next governor of the bank of japan he will be there 30 years. he's 71. confirmed and he would succeed kuroda he has advocated for looser monetary policy. keeping the policy at the rock bottom levels. the shakeup could mean changes and higher rates in the near term tesla workers in new york state are reportedly launching a union campaign

the employees who label data for the auto pilot technology at the company's buffalo plant want better pay and job security and curbing workplace monitoring the workers told bloomberg that tesla monitors key strokes to see how long they spend per task the workers sent an email to musk with the intent to unionize this morning i also believe those helping with the unionization efforts, andrew, are the same ones helping starbucks employees and amazon shares of palantir soaring after the first ever profit in thing fourth quarter it expects to be profitable. the ceo alex karp targeted profitability in 2025. our collective focus on ai with

the natural language process is not misplaced. the demand for customers for the platforms has gained additional momentum with the significant part of the ai embrace that stock up 18% as we speak. receiving a classified briefing on the three objects shot down by the military on friday biden administration is facing scrutiny over the objects. secretary of state blinken is considering meeting the top diplomat of china at the munich conference this week this according to a report from reuters. blinken postponed the trip to beijing after the balloon was downed on the coast of south

carolina on february 4th we, yesterday, early on said there is a less than zero chance this is a ufo. no one is saying it is a ufo all day long listen to where i'm going with this fox yesterday. all day long i didn't watch it. the times i did, lower third won't say whether they are ufos. over the weekend, he said i'm not going to comment on what these are, you know what fox does won't say whether -- won't say like martha. come on! really will you do anything >> you know how it will play in the conspiracy >> i thought fox would tie it to the border. >> a different take. >> aliens. they will conflate the term alien. coming up, the market is gearing up for the consumer price index.

you say never trash competitors. >> that's my view. >> this is not trashing. this is poking fun >> you think the new york post is up there with the new york times in your mind >> i love what the new york post does and what they are trying to do i think it would be a different thing than other newspapers. >> different how accurate info like the laptop? they are not -- that is the different way. you walked right into that the consumer price index how will the inflation data impact today's action? amy wu silverman of rbc capital joins us next. you are watching "squawk box" on cnbc

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it's like, you know, the best network imaginable. what the heck is that? those are the bad guys. are they friendly? the 10g network, only from xfinity. one giant leap for mankind. markets are counting down to the cpi data this morning. our next guest says the market action has been a tale of two tenor s. we have amy wu silverman with us before i looked at the notes, i was looking forward to see how things are set up for that number you said the implied volatility is about average ahead of it i thought it might be more important. you are not seeing that. >> yeah, it is interesting

because the s&p yesterday was applying 1.75%, joe, as the move for today. as you look to other cpis is fairly average the other thing which is the demand for call buying with the focus has been important in other cpis it is still important, don't get me wrong, but it is more muted this time. i read that as folks have gotten more into the market now than the last couple times we had cpi and forced to participate when things turn out better than expected >> you also point out that the losers have become the winners foul is now fair, i guess. it has already happened to some extent now people actually do have something to hedge which we didn't see right at the beginning of the year.

>> yeah. investors i talked to had relatively unkind names for the rally. the trash rally. whatever you want to name it the stocks that have really cleared the most this year carvana, peloton, amc. they were the losers of 2022, but free cash flow negative names and names highly leveraged. there are two camps right now. folks who any what else would you consider low quality this would rally more. i have investors asking me for names that are low quality, but haven't rallied as much as carvana. then i have the second camp with the belief of what we are seeing with the fed on the path of continuing to hike i think things like cpi today becomes crucially important because we are still data dependent and you see the surge

of zero data trade happening >> amy, there has been a lot of action in calls. you call that hedging. i'm not sure if you are saying they are selling calls against the gainers they had already or are they actually buying calls in case it is a cool number today for the cpi. >> let me clarify a little this is why it is a tale of two t tenors short-term, people are buying calls. that is the focus. people are still demanding the need to participate. there is an up crash in the rally in the market. interestingly, four-to-six months out is where we see traditional hedging, by that, buying puts or put spreads or vix calls which is expressing down side on the market.

that is happening in later teor s. essentially what it is telling me is a debate going with options with some people saying we think maybe it is higher for longer or maybe we think that the cuts don't makes sense in a couple months down the road. >> so, there is still some people that think we see fed cuts in 2023 that would -- the market would embrace that, but if the fed is cutting, the economy has slowed significantly. some things are good for equities and others are bad. if the economy slows more than expected to the point where the fed has to cut, then you would think maybe that would not be great for equities six months out and they are not

really bullish >> yeah. it is interesting because, you know, i think that is part of the view that is expressed the other thing is how specifically are these trades expressed? we see a lot of these expressed through not just s&p, but credit proxies. the options market essentially if you look into the different etfs and you see a lot of hedging in s&p, but hyg. high yield etf you see in lqv it is not just saying so there is question about where we will be with regards to what jay powell said. jay powell has not actually said -- he said higher for longer or just staying and the market is debating that. you are seeing the confusion coming from the credit side as well as the s&p side and less from growth stocks if i can put it on a plate, i would say the bullishness is

still in tech and growth short term, but longer term, you see the concern in the credit side and s&p >> you mentioned something about the vix. are you surprised that how -- is it too quiet is it portending -- is something wicked this way comcoming give us a heads up what is the canary in the coal m mine >> i get when we see the vix breaking through the psychological 20 ha that is really higher and that has sunk like a stone. one thing that is happening is this is related to some rotation within the sectors what happens is there is a lot of movement within the sectors

that dampens volatility on the level. that is a combination of volatility and correlation if we start to get some numbers that move things in one direction, that vix number could move quickly obviously, there is the risk of anything geopolitical happening that can spike it. i don't necessarily think you need it to go to 80 or something like that to tell you that or portending something scary what is interesting with vix is it is correlated to positive spot loops normally vix should go in the opposite direction of the s&p stock prices go. that is opposite s&p and vix moving in the same direction because people are buying so many calls that is flipped what people are going and flipped the correlation in the vix and short term. >> so, the princeton thesis

prize for imperial economics you did your thesis on what? something i am permperical >> i did it with burt who wrote -- >> no, really? >> yes >> that is amazing you coul you couldn't get into a better school amazing. amy, doesn't surprise me with listening to you great to have you on especially on a day like this. burt is he at princeton >> yeah. >> he is okay >> the legend. >> yeah. >> he's a legend like woz. >> he is he is still active you know who i'm talking about here you don't. >> i don't >> all right see you later. thanks, amy. >> i wanted to apologize to amy personally on the air. is amy still here?

>> she is still listening. >> amy, i wanted to say i'm super sorry when woz walked in it was a thing i don't know what to do. i wanted to say thank you for rolling with us. amy -- >> do you think it was better i got to do the extended i have no options. no, i'm serious. i can illicit more useful. >> i was excited to be here. thank you. when we come back, is nbc sports about to take a shot at the nba with a 20-year hiatus? the court is getting crowded. a programming note charlie munger, investor and board member at the daily board corporation is speaking at the annual shareholder meeting streamed exclusively on cnbc.com tomorrow at 1:00 p.m

guess what if you have questions you would like to get to charlie, go ahead and send in the questions. send questions to dailyjournalquestions@cnbc.com charlie penned a column on cryptocurrency recently and talked in the past about what he thinks about gambling and other issues anything you like to ask send theueionsnd qst a we'll get to as many as we can we'll be right back.

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the nba cannot begin to negotiate with anybody other than warner bros. and discovery until 2024 until they waive rights amazon also has an interest in buying rights. we don't know the price tag. >> it will be high >> the question is does apple or amazon use it as a leader for much of the other business and then hint to broacasters look for something else. the nba is something i love more than anything. did you watch "nba inside" on saturday morning ahmad rashad and the wife of on bob iger it was on nbc.

they moved that show over. it would be so great >> there is content that's not -- you can't watch still i tried to watch it last night my daughter went to the game and take a little bit of pain off sunday she went to the sixers and rockets game blew out the marrockets. >> you couldn't find it? >> fubo. >> i paid for fubo to get the sixers games it is a lot. >> put it on somewhere we have a million different -- i just can't believe it. i looked on espn plus. everything is worth more with draftkings i wanted to watch it >> it goes back to your point, andrew, when the nfl was lost by cbs to fox >> could they split up the

rights >> that is my guess. >> the nfl has done. when we come back, we talk hoops and recession risks and doing business with china. it is all on the table when we chat with bain capital adviser steve pagliuca during february, we are celebrating the black heritage month. here is phillip, nbc's vice president of business operations >> having a father from ghana and mother from new york with southern roots, i felt connected to my african and american heritage the values of education and perseverance were instilled in my in an early age i take those through my career my advice is to identify your talents and work to attain the skills necessary to succeed in

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as we await the latest cpi number later this morning, our next guest can give us a sense of the global picture amid recession fears and rising tension with china we will bring in steve pagliuca. steve, it is good to see you this morning thank you for joining us >> great to be here, becky thanks >> let's talk about what you are seeing in the environment right now because there are so many questions about where valuations stand right now and what it means for private equity and what it means for dealmaking what are your thoughts on where we stand overall

>> i think there are probably three trends that are happening. one is we have seen a normalization of interest rates. as you know, when i first got in the business and probably most of the career, t-bills were 4.5% to 5%. it is an anomoly of chieap mone for years. we appa we operated in that environment and we are back to the basics. the second thing happening is this china issue where there is a decoupling i think that is overrated as well we are talking about 5% of trade last month with record trade with china what we have to do is pull back strategic things like chips and medical equipment. things we need for supply in

america. the third trend is concerning with inflation is the energy transformation from carbon to non-carbon that will take more than people are saying to get off fossil fuels. we have to come up with a plan to do that that won't cause inflation or hurt the poor the worst. then the wild card is the war in ukraine and global tensions -- highest tensions since the cold war when we grew up. >> let's go through this piece by piece the anomaly of cheap money the whole market got itself around that. maybe got addicted to the cheap money. now it is not here, even if it is back to basics, what does it mean in terms of what people are willing to pay for things? >> i think the markets still hasn't capitulated to valuations

the cheap money -- everyone thought that every company could be uber or amazon. it turns out 99 out of 100 were not amazon you can't just buy market share with the weight of money and be successful that was a bad strategy overall and driven by cheap money. back to basics means you have to invest in businesses that grow market share and have new products and acquisitions. that is what bain capital does that is the fundamental principle. back to the future for us and back to the future for the market the market has come down some companies are still overvalued >> when you say -- did you say at the beginning the market has not capitulated completely or it has? it begs to question if you think there is more pain >> i think we are mid-leap in it

and there is more pain to come it takes a while for sellers to recognize that we are seeing more valuations and the public companies selling divisions. we have been at bain capital have been conservative and not done deals at 30 times revenue because we thought something would happen in fact, it happened later than i thought it would it has happened. i think we are mid-leap in that. we have more capitulation more to come. >> we talked to david rubenstein and others in pe it may take another year or year and a half before the private markets completely catch up and the public markets with where valuations needs to come buyers are still looking for more than or sellers are looking for higher prices than buyers are willing to pay at that point. would you agree? >> i agree with that although it differs. a lot of the issue was caused by the tech sector and some of the valuations and industrial and

non tech are more reasonable this was a semi tech/growth company re-evaluation. that is what is ongoing today. we are actually looking at properties that people want at 9 o $00 million out now $400 million now. it hasn't happened yet >> steve, you pointed out the transition to get away from carbon fuels is going to take longer than some people think. there have been questions raised about financing for the projects and how it has become more difficult. would bain be in position to put financing up for some of the projects >> we are looking at that and there are many offshoots of energy transformation like hydrogen power and wind power. we were already in wind companies. there will be major investment

opportunities. i think the only way out of this is some kind of technological change or massive government support to make this transition. one of the two things has to happen we've only reduced carbon -- non-carbon energy 7% in the last 20 years i don't know how people think we will get down to zero. it will be tough governments around the world and the environmental forum have to talk about the plan to get there and how to get there and how do you support technology to get there. ulti ultimately, the answer will come from some kind of technology. >> the projects out there are not profitable if governments don't heavily subsidize them >> oil prices are at the level where the projects are not profitable you have to make an investment in the transition for the future so i think the government will have to get involved in that if

they want that to happen quickly or a lot of investment by the government or investment firms to decakarcdecarbonize. nuclear is much safer than people think especially is left with chernobyl. the united states will have to address there energy transition so we don't contribute to burning the planet up. >> it is possible that technology allows us to deal with whatever these -- i don't know, these hysterical prognostications what actually comes to pass, we'll see. there have been many years we have been hearing about it technology could allow us to deal with a lot of the things that we're talking about as well because it is very unlikely that you will get there

the government can help, but really helps is when it is possible for the private sector to do what the market is telling it to do the market is not -- just like you said -- 7% difference. we are dependent 85% fossil fuels that is not going to 30% the only time it is going there when it is economically possible to do it i want to talk about basketball. you have the best record in basketball is this the year 41 wins. >> all i can say is we have probably the closest team since 2008 a bunch of great gentlemen playing hard every night we beat the sixers missing four starters that was the most satisfying wins we had in years the nba -- there are more stars

in the nba now than in the memory 30 or 40 stars can power a team. denver is strong milwaukee is strong. it will be exciting for the nba season our guys are competing diving at balls every night. >> i saw it the other night. the grizzlies came back. john morand. you should bring him over. that could be the -- >> he is amazing joe, if i talk too much about john, they would fine me he is an incredible player and great for the nba and grizzlies. >> what about the rights battle? nba may jump in the frey a lot of demand and interest >> we talked about this before the 20 years with the celtics

and the football/soccer team in italy. sports is global now 20 years ago, you could not get a premier league game and now you can on demand. therefore, fans that used to be in the millions are now in the hundreds of millions or 500 million fans for soccer. basketball and soccer are global games. only thing left since cnbc as must-see-tv. the technology, i think, is dramatically changed the landscape as you see yahoo! and apple battling with the current networks like disney and the rest the properties are valuable and the life blood of television viewing. >> the big question, do you think, no question huge value. the question is whether amazon or apple whose economics are

fundamentally different than disney or comcast or warner br bros./discover sy start to pick off the licenses for the assets and that changes the dynamic for the traditional broadcasters >> it is going to be incredible battle you have seen apple sign up major league soccer for an attractive deal and folks that run apple and amazon are smart they will say how do we get the most eyeballs and certainly major league sports, nba and soccer, are answers to that question it is interesting. we have been investing and studying the media markets for 30 years now you see constantly bundling and un-bundling and the latest un-bundling caused by delta trade can stream to anybody. you have a piece of software to do that. now we are in an un-bundling

stage. who are the winners? netflix? youtube? apple? amazon traditional networks there will be a fist fight on that over the next few years. >> quickly, yes or no. would you wish the lakers were not in last place or are you happy they're in last place? >> you know, joe, i take it one day at a time. we care about how good we are. >> i know. it's an old rivalry. the show and everything in red i wondered secretly you are like -- just glad. kidding around >> i love playing the lakers good to see you, joe coming up, we get into rising tensions in china witush with kyle bass in the 8:00 a.m.

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coming up, there has been hype around artificial intelligence, but how does it impact the labor market? we talk to it with fiverr ceo micha kaufman after this and cultural treasures. because when you experience europe on a viking longship, you'll spend less time getting there and more time being there. viking. exploring the world in comfort. why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can gently raise your partner's head to help relieve snoring. so, you can both stay comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday.

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welcome back to "squawk box. since chat has come online, joining us now in a exclusive interview, is micha kaufman, and

he sent a memo to employees about a.i. you wrote, quote, so who is the hero in this story you started the service, originally it was 5 bucks, and that's how it started. pea people would create content for 5 bucks, and now folks will do it if not better than human. >> first of all, happy valentine's day. thanks for having me i am an optimism i think a.i. plays a critical role, and while i am not blind of the benefits, but the benefits outweigh the risks if used responsibly, but a.i. tools

are just tools, and what matters is how humans use these tools to create new things. i saw an interview steve jobs gave in 1981 about personal computers, and he said it could free people to do much more creative work. this is exactly what a.i. is doing. we used to have, you know, microsoft paint and then we had a.i., and all it matters is how human beings are using a.i., and it's less about job displacement jobs are being displaced by technology since the 18th century and automation in the past 100 years, but the fact is so many new jobs are being

created. you can find those new specialists on our platform, which is i don't think we should be worried about this. >> the question, and i used your platform before for a number of things a lot of the services people used were effectively out sourcing writing, copy righting, logo design, and it appears the same kind of things, unfortunately, can be produced now by these a.i. services long term, do people just use those services and that displaces these people do you think the humans on your service, for example, then sort of leverage a.i. and improve it in some other way? how does that work >> they absolutely leverage a.i. when you look at the most impressive work done by a.i., essentially it's because of the experts that know how to use a.i. to create results, which

probably you and i don't know how to do. so essentially, it's a new breed of professions that know how to use the tools to create super creative things. >> while i have you here, i do have to ask you about what is happening in israel, because there's a big fight, as you know, over judicial reform there, and strikes taking place among high-tech workers, and jpmorgan out with a report that people should start to worry about investing, and what do you make of all that >> i am not a political commentator, but as a citizen, i can say israel is a pluralisic state, and voices are coming from all corners of society that

are asking government to slow down, listen, consult, think quietly and understand what we have democracy is bigger than politics i think that the reform is not a done deal yet. i am not definitely as an executive i am not going to make any hasting decisions at this point. >> you think the judicial reform piece, do you think the politicians are listening and seeing this concern about investment around the world and saying maybe we should not go this direction, or not >> i think that if anything at this point it's about slowing down i think there's probably -- there should be a reform because the system evolves with life and it shouldn't be constant, however what those changes need to be should be agreed on a very wide basis which requires time i think this is, right now, what

is at stake if this is going to slow down and listen to the different voices in israeli society. >> thank you appreciate it very, very much. we were talking about buying roses, you could do other things on fiverr, too coca-cola came in with numbers in line with the adjusted earnings per share estimates. we will have more on this after the break. check out the stock right now. plus, we have an exclusive interview with coke ceo, james quincy "squawk box" will be right back. an approaching car, a puddle, and knew there was going to be a situation. ♪ ♪ ms. hogan's class? yeah, it's atlantis. nice.

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good morning investors getting ready for key inflation data we will get a preview of today's cpi report and what it could mean for interest rates. coca-cola reporting results. the company's ceo, james quincy, joins us to talk about result to talk about the job market, marketing and other things plus, congress getting tough on tiktok and other social media p platforms as they push to protect children online, as the second hour of "squawk box" starts right now

♪ good morning welcome back to "squawk box" here on cnbc we are live at the nasdaq market times square along with joe kernen and becky quick s&p up about 800 points and nasdaq up about 36 points. treasury yields right now, the 10-year note, we are looking at 3.692. the 2-year up. coca-cola came in with adjusted earnings per share at 45 cents, if you are looking at the top line, $10.1 billion. estimate was for $10.0 billion, so better than anticipated revenue was up 7% year over

year, but the organic revenues for the quarter, up 15%. organic revenue was strong against all operating segments including 12% growth in price and 2% in concentrate sales. operating margins were strong, too. for the quarter, operating ma margin up compared to a year ago. the nongap was 22.7% versus 22.1 from a year ago. and the body armor acquisition and higher operating costs and increasing marketing investments versus the prior year and currency headwinds if you are looking through market share, coca-cola says for the quarter and full year they gained value share in what they call total nonalcoholic

ready-to-drink beverages we will get the chance to talk to james quincy, he the ceo, and he will join us at 7:30 eastern time and then more likely to be cpi and markets bracing for january inflation reports, and we are going to get it in just under 90 minutes steve liesman joins us with a preview. >> we expect the january report to come at a time when the market is closer to the feds more review on inflation and hawkish on interest rates. here's the data. you have to know the prior data was revised on friday because of new seasonal adjustments and waiting. 0.4, and that's against 0.1%

the core year on year rate does come down. what happened during the month energy prices rose as did food those are two areas bringing the headline inflation number down, and the decline in used car prices has helped the core near the end and it could be too early for the index to pick up declining housing costs because of the way the index is calculated and the market is positioned for an inflationary matter, prompting the fed to raise more and not less take a look at this. the peak trading around 5.19 the gap, we talked a lot about this between the fed and the market, and not just 24 basis points, down from 79 basis

points at the beginning of the month. the market dialed out rate cuts that the fed insisted were not cut in at best, today's numbers are showing the road to inflation will be a bumpy one. at worst, it takes longer for the fed to bring down inflation and require more action. andrew >> real quick, what would be your goldilocks number? >> i think if we come in at 0.3, 0.4, that's okay we hear about talking about up-side surprises on the headline it's hard to estimate this kind of stuff even if you know the exact change in the price of oil, for example, or gasoline on the month, you are never sure how much of it is picked up by the

government being at the bls, and it could be all of it is picked up at the month and maybe some next month i would love to seat year on year number keep coming down, and i think it will, but not at the pace it has been coming down >> okay. meantime i want to ask you about this, because we were talking in the 6:00 hour, and i would love to get your take president biden reportedly set to name a vice chair of the economic council, and i want to get your take because if you could have more influence in life right now over the future of society, would it be as the vice chair of the fed or be at the nec? >> it's a good question. i would think it would be at the fed. you know, she'll be missed over at the fed i think she has been a voice for -- what do you want to say,

more moderation when it comes to rate hikes, and she has been onboard when it comes to the fed and the rate hikes, but has spoke more dovishly about the inflation and talked about ways inflation could come down without harming the labor market quite so much. she has been tough on cryptocurrency regulation, and talking about the fed doing a digital currency i covered her in the financial crisis when she was secretary of national affairs as well, and she played an unsung role there, and so she will bring some of the international experience, i think, into the administration if she does, indeed, go. >> steve liesman, we will see you in a little bit as we await the big number >> yeah. coming up, a couple senators, marcsha blackburn and richard blumenthal trying to

combat the impacts of social media on young teens, and we will discuss that and the rules they are trying to put in place. as we head to break, let's get a check on the markets "squawk box" will be right back. . if i knew about upwork. i would have hired actually talented people from all over the world. instead of talentless people from all over my house. why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can adjust your comfort and firmness on either side. from all over the world. your sleep number setting. to help relieve pressure points and keep you both comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday.

lawmakers want social media companies to do more to protect kids online. there's a bipartisan effort under way for stricter rules that would change the way kids' data and accounts are handled. senator marsha blackburn of tennessee and richard blumenthal of connecticut are committee members and sponsors of the on online safety act. there's a divide, i think, about how we approach this in terms of partisan nature of this -- we talk about it all the time if you look at all the arguments about what happens in social media. i mean, republicans and democrats have very different views. is this truly something that there are enough things you two have decided should be in this to make it bipartisan, senator

blackburn? >> yes, indeed, there is in the last congress, this bill came out of the commerce committee with a unanimous vote, and that's something that is significant. the american people, moms and dads, principals, pediatricians, psychologists are all saying this is good legislation it will put in place a duty of care it will bring some transparency and accountability to the process. this needs to be passed. it needs to be signed into law social media platforms need to be responsible with how they are addressing interaction with our children and what they are doing with their data. >> senator blumenthal, i guess structurally i was aware of that, but did you know what i was getting at in the divide of what republicans are calling wokeness in social media i believe you can't -- you are

going to look at the algorithms and some algorithms one way or the other skews the way information is obtained, and around the edges you could agree on some things but there has to be serious differences by the way you approach this. >> first of all, senator blackburn has been an amazing partner and we have focused on common ground, and that's the only way to get things done in washington the popular imagery invoking the wokeness and all the other phrases and images and so forth makes no sense when you get down to the basic ways social media operates with algorithms, which is essentially black boxes and

nobody has any visibility into them, and our bill would require transparency, some disclosure. it would also hold social media accountable when they do damage to our young people. the last point i make, everybody, republicans and democrats knows children and parents who have been through the hideous kind of harm that can result we will have a witness today at our hearing, emma lempke, how she suffered through three years of really the most horrendous impact and the cdc just released a report saying 3 out of every 5 girls suffer from deep, often prolonged depression so social media is aggravating that trend >> the genie is out of the

bottle that's the first article i read this morning the 60% -- i mean, these numbers, i couldn't believe the numbers that i was reading about with kids, both boys and girls, and thinking about suicide 30% seriously considering attempting -- almost 1 out of 3 seriously considering attempting suicide in 2021. there's something really wrong with what's happening on social media, and i don't know if you can fix it or not but it almost makes bullying a -- you don't even have to go to school to get bullied. you can't escape it. it's going to happen wherever you are. there's something that needs to be done, senator blackburn, because our kids are already being severely affected. >> indeed they are being severely affect. some of the social media platforms, on tiktok and

instagram and twitter and youtube, it robs them of their childhood and pushes forward with the acts of depression and duh spawneden see, and as we talked with psychologists and parents, what we did was ask how to bring the accountability and transparency, the duty of care, and the disclosures that are necessary for parents and teens to have the ability to protect themselves in this online space. i had a mom tell me during the pandemic, she said, you know, i thought that when i had my kids home at night the doors were locked, that we were safe and then i realized that the threats to my children were coming in on their devices. as you were talking about, the bullying, the exposure to

pedophiles, and there should be an ability to verify ages, to give the parents and the kids the tools to block that data and that information that's why this piece of legislation is widely supported by republicans, democrats, independents, and supported by parents and teachers this is something that says let's join together and protect our children in this online space and put the duty of care, that standard, on these social media platforms. >> senator blumenthal -- go ahead. >> there's economic truth here, and somebody might call it a dirty little secret, and no longer a secret, but the business model is to attract kids, repeating content and

often content, bullying, that means more eyeballs which means more profit, and that's the business model that produced the drive to algorithm that directs toxic content to kids. we can no longer rely on social media to police themselves they have proven they will just go to the bottom line of the profits rather than protecting kids >> yeah, and our kids are not their product. it's time to draw that line. we're so pleased to have wide bipartisan support to draw that line >> when i was -- you know, 20 years ago we talked about drugs being addictive, and that was the surge of our high schools and elementary schools, we worried about that i almost think -- it's in combination of drugs, too, and it almost seems more debilitating and dangerous than where we are right now with the

social media modern living is hard enough in 2023, and i wonder what it would be if there was no social media, and it's still difficult to be a young person and to go to school we all had experience with that. this seems like it mamplifies it exponentially. i don't know if it can be done >> from the kids themselves and parents who want back control over their lives, their online lives, and you are right, drugs are still a problem. in many ways social media can amplify or exacerbate by providing information about drugs. it really a aphenomenon we need to address >> i can see how partisan it gets, because i can take one side or the other and point to,

i don't know, you know what i am saying, senator blackburn, and you are from tennessee, i think, right? i would point to certain extremes on both parties and say it's your fault, so there must be a lot of this with what is going on it's difficult and i am glad you two can work together on this. >> i would never do that to senator blackburn. >> i can bring up things going on on the far left that says you see why we have problems, and you can do it on the far right, and you wonder why we have problems, but i don't wonder why we have problems when we look at the two extremes but you are both there >> right >> thank you >> good luck >> i hope they get something done with this >> no kidding. the first thing i read this morning, i thought the numbers were wrong so depressing.

>> 60% >> it's been a long time coming, and if you have support on both sides of the aisle >> youth is wasted on the young, and if they are just depressed and suicidal >> and led to being anxiety producing situations -- >> that's for us >> we are the ones that should walk around and look like we do. >> you are anxious already, before social media. when we come back, the ceo of coca-cola will join us to talk about the soft drink's latest quarter, and what he sees in the job markets and how consumers are feeling about the economy, and much more later, u.s. companies are going back to doing business with china ford moving forward on a $3.5 million plant in michigan that will use chinese technology and other ceos planning a trip

"squawk box" will be right back. it's hard to run a business on

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still to come, coca-cola ceo, james quincy, will be with

us later, new york columnist contributor, james stewart will join us. you're watching "squawk box" on cnbc why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can gently raise your partner's head to help relieve snoring. dition smart bed. ends monday.

all right, everybody welcome back coca-cola out with quarterly results in the last hour adjusted earnings came in at 45 cents a share and that matched what the street was anticipating, and revenue came in better than what was anticipated. the stock is up by 40 cents. joining us is ceo, james quincy. a better than expected number on the top line, but there are questions people have about behind the scenes. what are you dealing with on the plus side and what are some of the headwinds you are facing right now? >> good morning. we had a good finish to the year we generated in the year, the momentum carried in into the fourth quarter, and we have

increased innovation and execution. in the fourth quarter we still have the suspension of our business in russia and there were mobility-related restrictions in some countries, particularly china in the fourth quarter. we were able to continue our main momentum despite that we were pleased with the year. as we look into '23, we are going to see some deceleration and moderation in the macros but we are confident the momentum we generated will carry us through and we will have another strong year >> what do you see so far this year is china opening up and does that make a difference >> yeah, we see china opening up it makes a difference. china is an important market for us and the release in the restrictions did generate a wave of covid restrictions, and if you look at the beginning of the year in china, many features got back to 2019 levels, not

necessarily all of them. a big bounce back, not unlike what happened in the u.s. and europe once the restrictions came off, so we think there's a similar trend that will play out in china and it will be much more normalized by the time we get into the second quarter and beyond to the rest of the year, and we see that playing out in the coming weeks we have had a good start to the year at the highest level, our momentum from last year carried so far into january of this year despite all the pluses and minuses out there in the world, our strategy allowed us to carry that momentum and that confidence forward so far into 2023 >> coca-cola nbc, the switzerland coca-cola said it would have to increase prices to tackle higher costs. are you seeing some of the pressures? >> yes, there's still a number

of cost prerssurers, particularl in some parts of the world, whether it be inflation in emerging markets like turkey, and there are still inflation pr pressures and inflation is likely to moderate as we go through the year, and there are we expect the rate in which prices increase will start to moderate and become more normal by the end of the year, but there certainly is pressure in the system at the beginning of the year >> you guys raised prices last year, too, and that's part of the reason your margins look so good at this point did you see any pushback from consumers. is there hesitancy to buy. we are hearing we are headed for a downturn >> the consumer generally is quite resilient. the price increases have been passed through, and offsetting the price increases, there has

been a tremendous amount of stimulus injected into the economies in one way, shape or form around the world. that money is sitting out there with consumers, and wages, too, have been going up at a higher rate than historically, and not as fast as inflation on the other hand there is money in the consumer's pocket going into their bank accounts everybody expects that to stop being depleted through the year, and also imperilled to see wages continue to grow and inflation to come down there's a scenario of a gently softening economy that runs in parallel having said that, clearly the lower income consumers are under pressure, and you will see downsizing and we can see that in categories like water and

some of the juice categories, but we believe if we invest in the marketing innovation and affordability, getting the right packaging and price point, we can continue to keep consumers in our franchise and that is what is happening so far >> you are talking about spending more, but you didn't have an ad in the super bowl this year, and pepsi did i don't think you're advertising anymore or marketing anymore on twitter. if you are spending more, where are those dollars going? where are you getting the most bang for your buck >> yeah, we have continued to spend our marketing money across a broad range of channels. we use tv, radio, outdoor, social media, digital channels, and we have been spending more money in experimental type of markets. we are balancing where we think we will get the best engagement

with consumers and the best response and where the brands will be most engaged relative to the cost of buying marketing, or buying those channels, and that's always an ongoing calculation we do. we ultimately see the opportunity to continue to spend more marketing to engage with consumers and it's broad-based for us >> is it a situation where you think you are spending more digitally year over year or more on some of the old line advertising? >> in most of the developed countries, developed economies, on some of the emerging markets, we have seen a continued shift towards digital spending in general relative to tv it was certainly part of the long-term trend to see the mix shifting from television to digital-types of media, but for us, as well, we have been increasing our investments in

exspeartial marketing and we see that trend going on into 2023. >> i think coca-cola gets one-third of its business inside the u.s., so the strong dollar is an impact, and are you worried that trend could continue, too? >> i wish i knew the answer to that question. that would make all of our lives a lot easier clearly -- clearly we make almost 80% -- the revenue is skewed to the u.s., but profits are almost 80% outside the u.s it matters a lot to us clearly the other piece of the equation that matters is not just does the dollar strengthen but what is the global rate of inflation and is that offsetting the strengthening of the dollar. there was a period in our history where we had a strengthening dollar and no global inflation, and that was painful for the coke company and shareholders in terms of earnings we have seen recently the dollar

strengthen and also the ability to take pricing and offset that, and in 2022 the dollar strengthened materially for us, and we were able to work our way through that our first object is to win locally, and we will take those corporate actions and take our portfolio and make sure we are working for our shareholders, and it looks at the stronger end to hit history at the moment >> is it harder to hire people in the united states than around the globe? >> the u.s. market has got easier, and when i say it got easier is because last year it was very, very difficult at the moment it's just difficult, particularly in the blue collar end of the market. we had a lot of trouble with our

markets in blue collar sectors, and it was well into the third quarter last year where we had trucks driving with our partners, and it has gone from very difficult to just difficult, and we are still hiring throughout blue collar jobs the white collar market, we found it relatively straightforward to attract talent to come work, and we see it on the road to normalizing. it also depends on how the macros are doing >> you have been experiencing in the alcohol business, and i been interested in what you are doing with the spiked lemonades, and

you have got the aluminum and lemons and all you have to do is add the alcohol. does it work is there a bigger market >> i think we made a lot of good learnings where there's the spike, simply, and i think we saw there is an opportunity to do something, but clearly the next big phase of this experiment is the launch of jack daniels and coca-cola. so jack and coke is coming in a premixed can it started in mexico at the back end of last year and strong initial results coming to the u.s. through our partners in march of this year i think that will be kind of a big steppingstone for us to seeing clearly where this could all go >> rum and coke, that was the

first alcoholic drink i ever drank. >> i was going to ask, james, when you look at the market for those types of drinks, what is the age range which you think about? >> i think these drinks are generally looking at people in their 20s and 30s. it often adds a new occasion i mean, we started with jack daniels and coke, because that's the most popular bar call in the industry, so if you are going somewhere where you are not going to the bar and you are not at home, then a premixed can is a perfect compliment, so it's really in that 20s and 30s range where you tend to see the consumers who are going to find this most appealing. then there's obviously -- it doesn't take too much imagination to realize if chico sales works and jack daniels and coke works, there's pretty obvious combinations out there that we could continue to build out. >> james quincy.

james, thank you for being with us today >> thank you coming up, new images of the chinese spy balloon have been released questions are piling up about three other objects that were shot down, and even as geopolitical tensions run high, some big u.s. companies are pushing forward to plan new business with china. and kyle bass will also be joining us that was 15 years ago, that picture. "squawk box" will be right back.

we are hear and great to have you both here we are talking mna, and we know there has been a slow down inactivity, but bring us up to speed because there are still deals being made >> yeah, strategic deck deals, and the amount of money companies have on their balance sheets, and companies are looking at transactions to transform their businesses >> when it comes to transforming, there's mna, but what about the flip side >> we conducted a survey where one-third of companies are focussed on running their core businesses more prauf taubly right now, and the word focus comes up quite a bit >> steven, how did your spin out from ibm create value for

kendral? >> well, it was from a products sepb treubgss company. we could deliver technology solutions to clients and help them get a faster value. >> thank you so much for joining us welcome back to "squawk box. nikki haley officially tossing her hat in the ring, announcing this morningll run for president in 2024. i believe she's the first one out of the gate, and she, of course, has been hinting this was coming >> there's another guy right

there. >> absolutely. he's more than hinted as well but not made it official >> tim scott and ron desantis. there's a lot. quite a few. sununu is making -- larry hogan. >> it's going to be one of the stages -- remember last time there was 12 people, and i am thinking about the other side. >> does anybody challenge the president? >> that's a good question. >> everything is being written about that right now that would be -- >> i don't think gavin newsom is going to do it >> well, supposedly the party is warming up to the idea of the president running when he is 82. >> well, it's difficult internally when you take on a sitting president in the white house if he's not stepping aside and saying, okay

it's a pretty -- when is the last time that happened, jimmy carter >> yeah, i -- jimmy carter i voted for him. new this morning, flutter, the parent company -- the first -- once. once the parent company of fanduel sports book announcing the board will be consulting shareholders in order to pursue an additional list in the u.s. the flutterboard believes an additional listing would enhance the company's profile in the u.s., and better recruitment in u.s. talent, and fanduel is a $3 billion business flu flutter currently trades on the london stock exchange. in the meantime, the risks of doing business with china

we are counting down to the cpi report it's the number of the day, perhaps the month. we will see. we will give you the market react reaction and all of that straight ahead all of this could move around when we get that number at 8:30 eastern time we're coming right back. it's time for the ultimate sleep number event on the sleep number 360 smart bed. science proves quality sleep is vital to your mental, emotional, and physical health.

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welcome back, everybody. we have a couple corporate headlines for you this morning bloomberg reporting that tesla workers in new york state say they want better pay and job security along with less workplace monitoring the workers sent an email to elon musk with their intent to unionize, and you can see that stock is still up by 4%. and right now pallentir is up. and cnbc universal is making an ufrt to win back nba broadcasting rights after more than a 20-year hiatus. they cannot formerly begin negotiations before april of

2024 unless they waive their rights china ford working on a supplier the top ceos are are returning china. for more on the risks now of doing business in that country, we're joined by joanne litman, a cnbc contributor good morning we've all been sort of whiplashed by the back and forth between this changing relationship between the u.s. and china and the big question, i think, has been, how concerned multi-national businesses are supposed to be about backlash from china, but maybe increasingly, from western countries, including the u.s >> yeah, absolutely. thanks, andrew we are in an incredibly perilous moment right now in this relationship with china. i was talking to a china expert

just yesterday who said to me, alarm bells are going off. and if companies are not hearing this, they need to be aware of it i mean, you know, it's not just the balloon, which is in the headlines now, it's the mounting concerns about repression on the ground in china since the pandemic it's tiktok concerns on both sides of the political aisle, it's concerns about taiwan, china's intentions in taiwan and i do think it's a really overlooked data point, these protests that were in china in the fall these -- mostly students holding up white pieces of paper a lot of them have been disappeared. i teach at a university with multi-national students. there's a lot of asian chinese students in america. and i know that they're fearful that they're being spied on for what they say about what's going on in china and how it could hurt their families. so there's a lot of issues, well beyond the balloon and we are in probably the most fraught moment since the cold war >> okay, so what -- i think

we -- i don't -- maybe everybody doesn't appreciate the risks at play, but given what you know, what is the answer which is to say, let's start with companies that are already doing business in china. and there's different kinds of companies doing business in china. a tech company might be in a different category than a financial services company, which might be in a different category than a starbucks. >> yes, okay, so this is a really great question, because we're so intertwined in china in so many different levels right? there's the consumer level, there's the b-to-b level, there's the supply chain level and so each one is going to require different considerations here but i think the bottom line for any company that is going in fresh or coming back in to china and trying to rev up business there is really going to be, you know, do you have a plan "b" are you aware of what the geopolitical risks are and is there a tipping point

and if there is a tipping point, what is that tipping point for you? >> how do you, though, make distinctions if you do between tech and, as i said, like a nike or a starbucks is that different to you yeah, clearly, the tech issues are going to be much more complex, complicated there's more of the, you know, national security issues we saw several companies being sanctioned last week after the balloon. so clearly, in the tech sector, i think we're going to be seeing actually a lot more pressure the pressure right now, we have bipartisan pressure on tiktok. and you can imagine a situation where we go from tiktok to other technologies and particularly, as we get to know more about what this spy balloon was and how they're using data, how they're using technology here in the united states, you could definitely see an increase in pressure, you know, we haven't

seen the overwhelming pressure that we saw when russia invaded ukraine, but you could imagine an increase -- >> straight up, do you think if we were having this conversation six months from now, 12 months from now, there would be a timeline that tiktok is on my phone or not on my phone, by a government measure >> i am not in the business of making predictions, so i'm going to pass on that one. but what i would say is i do think that there's increasing pressure, so that we are -- i would imagine that we are going to see some move that is going to have an impact on tiktok, and not just on tiktok, though, andrew, i think we're going to see this on other technologies we're going to be more of a deep dive and pressure into how integrated, how intertwined chinese technology is here in the u.s. and i would imagine we're going to see some pullback and some

increasing pressure, consumer pressure, political pressure, to try to extricate ourselves technologically from china >> where do you put tesla in the mix? >> you know, that's a good question, because you never know with elon musk where he's going to fit in, in the mix. so i wouldn't imagine that tesla is going to be -- tesla is not in the same category as tiktok, let's put it that way. and elon musk is not in the same category as anybody else, so that's a tough one to predict. >> and what about financial services i mean, we've had black rock is trying to do business there. the big banks are trying to do business there or not. is that something that you -- and by the way, there's not a lot of business that they've been getting frankly over the past couple of years from them >> yeah, you know, i actually think, i was thinking about this recently the first reporting trip i took to china was probably maybe 15

years ago, maybe more. and at that moment, the -- there was so much optimism, we have this new consumer middle class in china, this is going to be this great market and it's going to become increasingly democratic and this is going to be great for financial services, great for consumer products, and, you know, we're at a moment now where you can see that sort of, in some cases, it hasn't come to fruition at all and in some cases it's pulling back as you said, in financial services, it just hasn't gotten to where i think a lot of people would have hoped >> joanne litman, appreciate it. great to see you thanks >> thanks. coming up, number of the morning, january cpi is out in just over 30 minutes we'll bring you the data and the instant market reaction. the future ahead of the numbers, seeing some green so far this morning, a little bit, anyway. after yesterday's gains. "squawk box" will be right back.

good morning 30 minutes and counting to breaking inflation data. markets and the fed paying very close attention. meanwhile, what do those four objects shot down over north america mean for the fraught u.s./china relationship? we'll ask head fund manager kyle

bass and money, power, and hostility, inside the house that sumner redstone built. we'll speak with the author of a new tell-all on the late media titan. the final hour of "squawk box" begins right now good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm joe kernan along with becky quick andsorkin. might be the calm before the storm. we'll see. k cpi numbers have been market moving in recent months, as you know in fact, some of the firmer tone we've seen since the beginning of the year had to do with cooler inflation numbers will it continue it's a big question. u.s. equity futures ahead of this and after yesterday's big gains showing some more green arrows this morning.

83 points on the dow nasdaq up 52 the s&p 500 up about 15. treasury yields, obviously, after that 500,000 plus jobs number, which is also always an important number, maybe cpi and jobs the most important to watch for, did move from -- remember, we were in the low 3s, 3 and change, all the way back up in testing 375 again. but this morning, 368. that could change, as well two-year now just under 4.5. our first guest this hour is a big one, because he's at the desk he's at the set. he's on the set. not everyone gets to do that you know that? like, this is -- i'm honored he's predicting the s&p 500 will end the year at 32.25, and that's a 22% drop from yesterday's close. was that -- yeah, that's really something. joining us now is michael

characterowitz, chief investment strategist does it is start with a hot number today, do you think >> does the sell-off start with a hot number today >> is that what eventually causes it? >> no, i don't think that today's cpi report is going to make or break anyone's thesis for the year but ultimately, i think it's as these hot new inflation numbers as the past plus the fed's tightening cycle, plus the fact that banks have been tightening lending standards for well over a year, that combination has proceeded every single recession. so we've got kind of the three ingredients, when you look historically, that have been there before a recession >> that's not news to anyone, what you just described. >> that's true we all know that spring is coming we all know that summer is coming and that will come regardless of whether or not we know it or not. >> you don't think that we've had last year and the -- what do you calculate the drop for the nasdaq to be last year you don't think that that was

because of what you just described? >> no, i actually think that while that is i think the general view that markets last year went down because we were pricing in a recession that was going to come at some point -- >> or a fed rising rates >> yeah, and that's exactly what it was, it was a bond bear market where equities were the victim, something we haven't seen to this magnitude or duration since the '70s, so the first impact of a fed tightening cycle always comes through the market through p\e compression. that was the story of last year. the next effect with a lag, the long and variable lag, we always hear about hits the economy about 15 to 18 months later. i think the large majority of that is still ahead, earnings. earnings employment. >> so you think employment goes to what? >> we think it starts rising in the middle of the year, looking at unemployment claims, looking at the unemployment rate >> but how high -- >> just do the headline rate

>> by the end of the year, our economist believes we're about a percentage point with upside risk >> a full percentage point if we're at 3.4%, we're at 4.4%. >> which is minimal. but what we knew throughout history is that the things that proceed a rise in unemployment are very consistent throughout history. we have again those conditions today. how much will the unemployment rate rise? some of that is still path dependent. how many more hikes do we get. will oil spike in the next several months >> how much of this is a function of jay powell versus everything else? >> well, jay powell, i would say he's one of the legs of the stool that gives us a recession. so i think the fed has already done enough to put us into a downturn in a recession later this year. >> are you the lowest on the street >> yes >> that's definitely an outlier call, but you're willing -- >> i'm making friends. >> but you're willing to put it all on the line for that the only thing i would say is

that, there would have to be some really big downside surprises to be worse than what is already anticipated by most people because that's well -- what are the -- what do you calculate the lows for the s&ps? 3,600 or so, or 35 >> last year >> the recent lows since the sell-off >> 34.91 >> so you were not only going to get back down to those, but we're going to breach those and goes all the way down to 32 and change >> which is about a 15% drop in earnings expectations, where they are today so the street is still expecting for next year, for 2024, earnings to hit about $249 we think that's 16% or so too high and that by the end of the year, that number will be 16% lower and with that, as we always see, when earnings expectations fall that sharply, credit spreads will widen, p\es will compress and i don't think -- you know, we're not calling for an '08-like explosion in the credit markets. we're looking for high-yield credit spreads to get back to where they were in september,

which is about 6.5, which is consistent with a p\e of the market at about 15 >> it's not because of inflation or anything the fed does >> it's the lag effect of inflation. >> that would be two of the worst years, back to back. that would almost be putting out back in almost a '70s-type virm. but we've had a 40-year bull market in bonds and stocks that's the thing that some people worry about a sustained, below-average market environment. and that's what you're z describing here, i think midwest people think it's either close, it's either time or close to be getting back into what will be a new bull and that's not what you -- >> and i think that reason is because most investors i think see last year's market as pricing in well ahead of this downturn and the irony is that most of the market's strength in the last six months has been on the back of weaker economic data, softer inflation, you know, bad news good, this narrative that

the worse the data gets, the less the fed will do >> but you're saying bad news is bad news >> as this continues, bad news and when it flows through into earnings, which all of this macro data is at the end of the day, it's all company earnings that roll up into macro data and we saw this earnings season wasn't exactly fantastic and importantly, guidance and earnings estimates continueto melt down. >> mike, could you have planned, if this doesn't work out -- >> i do carpentry. electrical >> that's definitely an outlier. that's a thousand points, s&p points >> at the core of our story is that, you know, the debate right now is, are we having a soft landing or a hard landing? so when you look back throughout history -- >> does it have to be hard to get us down to 3,200 >> yeah, i would say a recession. so when you look back across history, there's, you know, at a fed tightening cycle, there have been four periods that have given us soft landings, 2019 was the most recent, before that,

1995, 1985, and '66. >> one news you can use question here, which is assuming you're right, with the exception of maybe shorting the s&p or something, what would you do with your money then right now? >> right now over, you know, again, time horizons matter, but if we're looking at over the next 9 to 12 month, buy long-duration treasuries would be out of equities that are most cyclical, low-quality, highly risky. a lot of the stuff that's -- >> long-duration treasuries -- >> buy the ten-year -- 30-year or ten-year? >> the longer -- if this plays out, the longer the better but so, every soft landing we've had has, yet, been proceeded by a fed tightening cycle, but they all had mild inflation and banks that were easing lending standards at the same time >> all right >> today we've got -- >> all right >> tight lending standards, high inflation -- >> oh, they're playing music >> all right >> thanks, michael

>> thanks. when we come back, hedge fund manager kyle bass reacts to new cpi data he'll tell us inflation number at the moment and also talk about rising u.s./china tensions but next, the true story of the battle for sumner redstone's media buyer. you knew it was weird, but wow, this gets into some serious details. we've got "new york times" reporter columnist jim stewart, who will be joining us to talk about his new book, "unscripted. "squawk box" will be right back. (vo) this is more than just glass, walls, doors and carpeted floor. it's a place to change the world. loopnet. the most popular place to find a space.

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you're characters in our video game! video game? yeah, it's what we do with xfinity 10g. it's like, you know, the best network imaginable. what the heck is that? those are the bad guys. are they friendly? the 10g network, only from xfinity. one giant leap for mankind. welcome back to "squawk box. a new book out takes us inside the back room dealings and drama of a media giant known as paramount global joining us is james stewart. good morning to you. >> good morning. >> this new book is called unscripted, the epic battle for a media empire and the redstone family legacy. and it is a real-life version of "succession" in so many ways >> well, yeah. i mean, we thought in the beginning it was kind of the me-to movement meets the corporate board room >> it started as a moonves book,

no >> moonves, cbs, corporate governance sort of thing, then we realized, it's so much bigger than that and there's so many unbelievable interesting characters it turned much more into this family drop president it is very much like "succession," but logan roy has nothing compared to sumner redstone the reality is so beyond anything you could dream of. >> it is all very twisted. we were talking in the commercial break, all of the so if sumner was alive today and he read this book, what do you think he would say to you? >> i think he would say, it's accurate and you know, one of the interesting things about sumner is he was self-aware he was always saying, you know, i'm going to live forever. but he confided in one of his many mistresses, if that's what you want to call it? >> you don't think alhe knew tht all of these mistresses were taking advantage of him, which is what you report >> later in life, he was deteriorating, which is part of

the story. part of the story is the vulnerability, which anyone can relate to with an elderly relative he was self-aware, he said, i don't want a to die, because i'm going to go to hell, i'm going to be judged when i meet my maker. so he knew that there was a lot of that -- >> what do you make of the relationship ultimately between sherri, his daughter, and him? because there is some sense thattic she still loves him in many ways. and that runs deep, but his view of her, at least during some moments that you report in this book are so tortured and so horrible that it's almost hard to understand what those feelings could be like today >> that relationship is so interesting. and i think a lot has been written about fathers and sons, but not so much about fathers and daughters. and it's a very complicated relationship here. you see the gender issues, the sexism, his admiration for her at times then his -- is it his compe competitiveness, his jealous, his resentment when she actually

succeeds or gets some credit for something. again, i think anyone, and particularly women, who have struggled with relationships with their parents will find this really interesting and rich but i can't explain it and i'm not a psychologist >> when you think about what's happened to paramount and cbs today, which is to say they've been merged back together, that's something that sumner redstone did not want to happen. something that sherri did, and it's clearly something that les moonves didn't want to happen, which was his undoing to some degree, how will that be measured >> well, i don't think there's really any doubt that sherri was right about that scale, the business is growing through upheaval as anybody who watches your shows knows, and scale is important and they needed scale. they should have merged a lot sooner >> you think they should have merged a lot sooner, or do you think they could have sold off one of the businesses 45 years ago when valuations were at a completely different place >> what's hard to rerun that they would have been better off

merging and selling the whole thing when valuations -- could they have, you know, sold off cbs, you know, maybe, but i think sherri was probably right, merge them and sell them by the way, i think most people still think it probably needs to be sold. it doesn't really yet have the megascale of a netflix or an amazon or a disney plus. but i do feel that sherri has pretty much been vindicated, although as we all know, the market has turned viciously against the whole streaming model and that's what all of these companies pen their futures on >> and if you look at washington right now and the regulatory environment for any sort of a merger or a deal -- >> the obviously candidate would probably be something like netflix that doesn't have a studio but trying to combine a broadcast network, a big major hollywood studio with a giant tech company like that, i don't see that happening right now >> update us on les moonves today? >> well, you know, les moonves was very popular he was, you know, named the most

powerful man in hollywood before his downfall he still has many friends out there. some of my friends have said, look, i don't really kind of know what happened there he really helped me in my career i would never count him out. obviously, he's lying very low, but has the support of his very popular wife, julie chen >> is it still moonves center or usc? >> no, no, he's -- he is out he was stripped of -- >> here's the thing that i think a lot of folks really want to know and it's papted i painted in th. do you believe that when les went after sherri or effectively say, i don't want to do this deal, that that was his undoing and that she did it? >> it was definitely his undoing. and you know, we were really lucky that we got all of these confidential documents, the transcripts, the texts, the e-mails. somebody said, no ceo will ever text again after reading this. but you see it in realtime the

agony moonves goes through he decides to declare war on the redstones, at the same time knowing he has these dark secrets in his past. he had no option he couldn't lose face with the board. but there's no question that that was, frankly, pretty insane strategy under the circumstances. and it did prove his undoing but it's not because of what sherri did there were all of these rumors that sherri planted these stories. >> that's what i'm asking. >> there's no truth to that. one of the fascinating things is that the board always believed the worst about sherri and the best about moonves i had so many rumors to track down i wasted so much time. none of them turned out to be true she did not plant those stories. she heard the rumors, passed them on to the board, the reaction of the board was disgraceful. the sexism, the realtime comments, the remarks, like, who cares about that, we all did it, it was astonishing to me >> and that's the idea that you have the texts and the e-mails

and so much of this that goes back >> we have all of this original material, it's like, you can't really argue with the facts, because it's right there in print. you know, transcripts, e-mails, texts. >> exactly i thought i knew this story until i started going through your book. and there's so much more there i wouldn't believe this if i saw it in "succession" on hbo because it doesn't seem like it's possible. it can't be this bizarre the truth is stranger than anything anybody's made up >> my jaw has dropped so many times. i've been a reporter so many times and i've seen a lot. this is one of the great things about being a reporter you think, you've kind of seen it all, and oh, my god, something else surfaces. and it was during the pandemic, fortunately, i had a co-author we would call each other back and forth and say, can you believe that we needed somebody to talk to. >> rachel abrams >> we should mention rachel. definitely deserves a lot of credit >> you guys are amazing. >> thank you >> i don't think i'll ever write a story like this again.

i kind of hope not >> the book is called "unscripted. thank you. >> thanks for having me. >> inflation data is still coming, breaking inflation data still at 8:30 on "squawk box." next, though, are america's farmers headed for tough times jane wells is live at the world ag expo in california's central valley so that's what's going on in the central valley right now, jane what's coming up >> reporter: joe, i'm usually on a really big piece of equipment, but i'm on a small piece today for a reason ag has had a great season, and while silicon valley is firing, ag tech is higring we have two trends when "squawk box" returns

welcome back to "squawk box" right here on cnbc it is a critical time for the nation's farmers and farm equipment makers jane wells joins us from the world ag expo in california with that story jane, good morning >> hi, becky yeah, you know, over 100,000 people are expected here to see this and kick the tires. and hear are two trends to watch. the first is electric tractors this is one from feint owned by agco, coming out next year, first in europe. price unknown yesterday. the small evs may not be good yet for a big farm in the midwest. they could be perfect here in california, where you have high-value crops like wine grapes and you can pass along

any premium you might pay. and here's a second trend that farmers are watching >> move over, tesla! you're looking at fully autonomous farm equipment from ag tech company. a start-up has a machine being tested at a vineyard for silver oak winery and napa. and then there's this. a driver-optional tractor from monarch that's already on the market it stops when it detects humans. it's being sold for $90,000, but here in california, you can get up to 80% of that covered by state government subsidies these machines reduce the need for labor, reduce the wear and tear on a farmer, and go 8 miles per hour when they're not on the freeway, they're probably not going to be involved in some sort of ntsb crash investigation. >> autonomy is one area where we're actually seeing adoption

that could accelerate faster than what you would anticipate and certainly faster than what we've seen in the onroad market. >> all right a third trend, though, is to watch, potentially farm incomes are projected to fall from a record 163 billion last year to 137 billion this year smaller tractor sales are also falling. deutsche bank and bernstein think we have already reached peak ag spending, but volumes are still 25% below the last peak in 2013, partly due supply chain problems, which could mean the peak might last another year her biggest concern, guys, tensions with china, by far are number one ag export country and south america is standing by to fill the gap back to you. >> is there real demand for an electric tractor is that something farmers want or something that they'll take if it's subsidized

>> i think you've got it there in the second. they're interested in it they want to know how much the range is, how much it saves them money in the long-term you don't want to spend money up top. they're more interested, frankly, in the autonomous vehicles and a company like agco are trying to make them completely autonomous. farmers will want to buy a regular old tractor that can do a lot of its stuff on its own. if it's not fully autonomous, it's less wear and tear on the farmer if less on the tractor can be done without him or her getting out all the time to check the sprinklers, tir gags >> jane, as always, i learn something from you every time. jane welles, we'll see you later in the day when we come back, breaking inflation data we've got the january cpi number that is when "squawk box" comes

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welcome back to "squawk box" right here on cnbc we're just a few seconds away from that january cpi inflation number you're looking right now at the

futures. and ahead of this, you're seeing a little bit of optimism yesterday was a very strong day for the markets and we're carrying through with the futures this morning dow right now, up by about 97 points s&p futures up by 13, the nasdaq up by close to 50. the ten-year yield has been picking up over the last couple of weeks, if you check things out right now, especially over the last week or so. you'll see that the ten-year is yielding 3.679%. so getting back towards 3.7. let's get it over to rick santelli rick >> yes, the january read on the consumer price index, headline number expected to be up 5/10 of 1% and we know that minus 1/10 originally released for december was modified a week ago with benchmark revisions up 1/10 of a percent. so this was expected now we strip out the all-important food and energy, also up exactly the expected amount of up 0.4%.

now, the big numbers cpi year over year, and this number has been going down it is 6.4% 6.4% this follows 5.7 and it is the fourth number in a row in this series to move lower and if we look at the year over year core, it is 5.5, higher than 5.6, but sequential lower than 5.7 in the rearview mirror, extending the runt of 7 from the -- excuse me, excuse me. on the core, this is four in a row at 5.6 6.4 headline is seven in a row down from 9.1% that was in june and that was the four-decade high now, here's the fly in the ointment, why rates are going up even though the year over year numbers are each 0one-tenth lowe

than the rearview mirror, they are both a little bit higher than expectations. 6.4 was expected to be 6.2, 5.5 was expected to be 5.5 that's now known as the super core i can't dig down into the data that deep, but many are doing that as we speak because shelter last look in december when we were up year over year 5.7%, was over 50% of that number. super core is important. all of a sudden, the federal reserve is concerned with what's going on only with the core service sector that's what's left in the super core when you take out food, energy, and shelter. rates have moved up, but not that much. we're at 370, we were right at 366, 367 pre-number. the pre-dow futures are hovering just about at the same spot. remember, if they go much over 34,407, and they're close, they

will be the highest number going all the way back to january 17th, on an intra-day basis. so, this number might be higher than expectations on year over year, but it's behaved on actual numbers and the markets seem to be taking it in stride >> stay with us. we want to bring in a few more voices on this steve liesman, meta eastman, over george w. bush, and associate professor at georgetown and jason ferman, who is a harvard professor and former chairman of the white house council of economic advisers under president obama. we will go to you first. the market swooned on this, because this is a very important number kind of take a look at it and came back to where we started almost with the futures. >> oh, up by 218 i was looking at 31. >> not necessarily, becky, though in -- now we've got a

move the other way i'm going to say rick was right. there was a moment they tightened up a bit on the fed fund futures now they've loseened up. i think the story here is energy giveth and energy taketh away. we were up again 2% on energy, so a lot of the decline has been energy related food up again up 0.5%. we did get some help, which have the sort of unexpected from used car prices, down 1.9%. but a key here is shelter or housing, up 0.7% we can't get a break in terms of getting what we think are some of the indicators outside of the cpi, showing housing and shelter going down it's not filtered into the index. when it happens, that will help. and it also sort of underscores this idea, which has been coming from the fed, that the road to disinflation will be a bumpy one. and just one other thing, if i

read this correctly, workers did get a raise. 0.7% rise in real earnings for january. and that's a reason why we had some people rethinking the weakness of the consumer in january after two bad months last year, becky so still an issue as to whether or not growth is going to cool quite as much as had been expected, especially with people getting a real raise when you look at the differencebetween what the wage they got nominally and the inflation that was taken away becky? >> let's talk this through a little bit i think joe nailed it when you said, this is a situation where the market looks at it and says, no news is good news, basically. >> i'm not so sure of that given that we started this journey now almost a year ago, i would have expected that we be further along. it is good news that inflation is not going up, but it's also not really coming down very much and what worries me still is the labor market

we've seen no signs at all that the market has -- that the labor market has slowed down we had a very strong jobs report last month and i still worry that we're not getting a good handle on that. >> meaning, you think that the fed is going to continue to act, even if we don't see higher inflation, because the strong labor market is going to force their hand they will assume that inflation will come roaring back >> to me, this report confirms that the fed needs to be aggressive i don't know -- i mean, i think they've been sending somewhat mixed signals over the last month. but i think that that's premature. we still have a ways to go before we have comfort that this -- that we have a handle on inflation. what i worry very much about is that we think that we're coming down, we slow down, and then towards the end of this year, inflation comes back up again, which makes it even harder down

the road >> mr. ferman, do you agree with that assessment? >> i think the markets are just ridiculously complacent about the inflation situation right now. i look at tips, i look at swaps, they have break-evens of inflation of around 2% i just don't see that. i don't see how we have inflation much below 3% this year i don't see it coming down below that without a decent-sized recession. and nothing in this number gives me comfort it's not a surprise relative to the expectations that we had yesterday, but compared to the narrative we had a month ago, where we thought inflation was coming down, where we thought, you know, it was jumping off from a low point, we now have core this month that an annualized rate for the month of january at 5.1%, even if you take out shelter that has lagged, you're at an annual rate of 4.3% for this month

that's faster than the pace in the last two months. and that is with some special things that we're helping. used cars, we got more relief there than we were expecting to. medical services also fell those aren't things you can count on continuing to happen. so i think this inflation issue is real. i don't think it's going away anytime soon and i think anyone who's overly calm about it is making me nervous. >> okay. so, jason, how do you explain what we heard from jay powell last time? because i think it was the use of disinflationary forces so many times that made the market think, okay, the fed is starting to cam down on this. did we misinterpret his words, or does he, you don't think feel the same way you do? >> i don't know. he also says that he doesn't expect inflation to come down without the labor market loosening some

he says we haven't made much progress in the core services "x" shelter. so i think his words have not been, you know, fully consistent in this regard but he often says, i think the right thing and people aren't listening. and, you know, financial conditions have eased a lot. i think the fed is going to need to do something about those financial conditions whether it can do it with words and dots and things like that at the next meeting is one possibility. but it might need to do a 50-basis point hike to really get the market's attention and put in place the economic conditions that really could start to bring down this inflation that remains very, very high. >> rick, your reaction what do you think would happen to the markets if there was suddenly a 50 basis point hike at the next meeting to try to grab our attention >> the yield curve would dramatic invert, even more because the fed most likely on the backside of this is going to have gone too far. listen, we have a lot of smart people on this panel but i would rather look at the

market and take the assimilation and accommodation of current numbers, seven in a row in terms of headline year over year drops in inflation sequentially, four in a row for year over year core that is the concrete tangible, can hold it in my hand, even though seasonable adjustments and a lot of issues may make the numbers slippery, numbers have always been slippery this is what traders have to work with. and they are working with it if you look at the dow futures, high of the session today, the high of the session from an intrad intraday basis was all that was traded of 2023 i'm sorry, if i'm going to make thea bet on the back half or end of this year as to what position i make in the marketplace, i don't know that i would put all of my chips on economists' and the soothsayers of the future. i think i'll go with the markets. they will continually update as information becomes available,

and if you -- >> rick, rick -- >> can we talk about the sequential decline in inflation. >> there's no money left people trade to make money >> can we talk about that sequential decline in inflation? >> jason, make your point and we'll go to steve. >> we had an inflation rate of 9% it's come down to 6.4. 6.4 is incredibly high no one ever thought that 9% was going to last. the fed doesn't look at the 12-month moving average. they're looking at what's going on in the month and what's going on in the month has kicked up. >> they did! they were wrong! they said it would last. >> no one thought inflation was going to stay at 9%. >> you know what, they said that inflation would be super sticky and they were wrong. >> no one predicted 9% inflation. >> they're just wrong with respect to how long a period of time >> why would i put my money on you versus the market? >> if all i'm here to do

recite what the market thinks, i'm not that useful. i just tell you, i think 6% inflation is a lot higher than most of us thought it would be at this point in time. >> it is it's super high! >> it's come down from 9 -- >> in six months, it will be lower than that. it's going down -- >> it probably will be lower than 6.4 i agree with that too. i just won't be 2. i don't think it will be 2 six months from now. >> i never said it would be 2% >> rick -- >> go ahead. say that -- steve, what was your point? >> rick and jason are both missing the point here is that there is very little difference right now between the fed outlook and the market outlook. this is the big story. i'm a little confused as to how jason can say that the fed needs to tighten financial conditions when, in fact, financial conditions have tightened dramatically this thing is working in a really, i want to say good way in the sense that if you can call up that fed rate, i'll look

at it right now, you have the market peaking at 522. the market actually, the fed funds futures for the august contract is above the fed for year end, which is a good place to look. we're at 495 the fed is at 5 and an eighth. the economists are kind of saying the same thing. >> i'm talking about the price of the s&p 500, the price of the nasdaq, the price of the dow, and interest rates that's what i'm talking about. >> i don't do stocks >> obviously -- no, obviously, what economists see at this point, what some of the investors see at this point are two different things and we watched this play out in the markets. you can even watch it between the equities futures and what you're seeing with treasury prices, too. >> the fed -- what the market -- yeah, but, but, jason, i think -- >> the market seems to think that the fed will be done for

looking at a recession and cutting rates for the end of the year we could easily have a fed funds rate, because they have to raise every meeting to get rid of this inflation. >> jason, love you to death, but the cut story is gone. that's yesterday's news. by the way, if you look at the five-year, five-year forwards, those have been going up, up near 230, 240. so the market has been baking in more inflation so, look, i don't --i cannot look to the stock market for the stock market's view on either the fed or rates, because it's not as clear a picture as when i look at the fed funds futures or at the interest rate complex that's where i look for my clue for what the market thinks about the fed. right now, there's very good alignment. >> i want to get a quick comment from netta, how long of a lag delay do you think there will be for all of the rate hikes that the fed has already put in place. i guess that's what people worry about. will there be this huge wall we hit at some point because of what's already been done >> so my view is, we have done

the easy part. it's from now until the 2% target, if we're still aiming for that, it's going to take quite a bit more i'm with jason on this one i think we have not seen after nearly a year of rate increases, much of slow down in the job market without that, i don't see how we get down to anywhere near the 2% inflation. so i think there may be -- there is a lag, but i just -- i don't see that it's going to get us that much further down the road. we have a ways to go >> all right i want to thank our entire panel today. and hopefully to see all of you back soon. thank you. coming up, the always-outspoken hedge fund manager kyle bass will join us to talk about the collection of unidentified objects shot down over north america this month. at least one of which was definitely from china and possibly others. we'll discuss it all with him after this

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coming up, heiman capital's kyle bass will share his views of the chinese spy balloon, where the u.s./china relationshipig be ad mhtheed from here. stay tuned "squawk box" will be right back. e jobs installing windows, charging something like a hundred bucks a window when other guys were charging four to five-hundred bucks. he just didn't wanna do that. he was proud of the price he was charging. ♪♪ my dad instilled in me, always put the people before the money.

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senators expected to get a briefing today on the high altitude objects -- that's what we can say now -- brought down over north america which is about as much as we can say in recent days. we've got the yukon, south carolina, north carolina meanwhile, the military says the u.s. has recovered key electronics from the original

chinese balloon. that's good. they had to go down deep for that maybe joining me to talk about what this can mean for the u.s.-china business ties, hayman capital's kyle bass. kyle, start with what you do know and then tell us what you actually think it all means. >> well, we know that the sensors that were loaded on the original balloon shot down off myrtle beach, south carolina, were not weather sensors we all talk about imaging and the press is focused on imaging. i think it's important to think about what a stationary balloon loaded with sensors could actually map i believe that those sensors were mapping the gravitational field and the structure of the earth of the it can do that down about a kilometer. if you remember where it was sitting over montana, it was over our icbm base

i think that chinese spy balloon was mapping the underground architecture of one of our most valuable assets, the minute man icbm missiles in montana this is a problem for relations. we had congress vote 419-0 on condemning the brazen chinese spy balloon. i'm not sure we could get that progress to wrote 419-0 on the sun setting in the west. this is one place where our lawmakers are starting to think more about our national security. >> what would that information allow them to do do we have to think of it as some type of ominous thing wouldn't we like to know the infrastructure of a similar facility in china? and aren't we probably trying to figure it out one way or another as well? or is this a hostile -- is this

the first foray of a hostile act? >> it's a direct incursion into our airspace that's why the biden administration decided to shoot it down. we can't be armchair quarterbacks about whether we should have shot it down over montana or the midwest or the east coast i think they really wanted to wait until they could shoot it down over fairly shallow water and we had catch boats out there. again, i think our government actually did its job we sent jamming signals up to the balloon as soon as we found it, and we're now studying the contents of what we could reclaim at the moment. you know, when we talk about what relations between the u.s. and china are, there's still this big gap between wall street and the ic the director of national intelligence submits a report every year to congress detailing the next year's threats, the largest threats to u.s. national security china has topped that list for many years, and yet on wall

street we can't wait to buy the next ipo in hong kong of a chinese company. at some point in time, joe, this has got to stop. >> you figure that the information they gathered was sent back, so they didn't need to retrieve it, they already have it, whatever they gathered. so you've talked about farmland in close proximity to sensitive military bases being bought by china. is this all part of the same, i guess, plan for them does it necessarily mean they're going to use this information down the road? i'm sure we're gathering similar information. we want to know it it doesn't mean we're going to start something with china, just if we gather intelligence. >> joe, you look at -- they play an asymmetric warfare game hell, they wrote the book on asymmetric warfare and we allow them access to our social media. we allow them access to buying

big swaths of land between our most active military bases and our borders. we allow huawei to sell telegram equipment cheaper than it costs to manufacture it in rural areas around all our military bases. we still haven't ripped the huawei equipment out the chinese military exploits every nook and cranny of our openness, joe. what we've got to figure out at some point in time, we've made a bet on china back when kissinger decided to go over there in the early '70s and pivot from russia to china we made that bet hoping that, if we invited their students into our universities and invite their people to travel in the west, that they would see a better way of living and better way of growing an economy. all they've done is go the other way with xi jinping and his death grip on the population,

running it as a totalitarian almost dictator. it was a good bet at the time. it turned out to be a bad bet. now on wall street and corporate america, what we've got to do is start going the other way and not relying on a government that doesn't share our values, that is clearly the number one threat to our national security wall street must wake up. >> at this point one of the main reasons for us being so passive as this is happening is the interest of our multinationals so you're saying that has to change >> joe, we should have learned this lesson many times in the past if you remember, the u.s. and our allies were actually funding germany's rebuild of their military capabilities post world war i, and we helped build the german military machine that ended upbringing us into world war ii we did the same thing with russia

putin took crimea and saf vast poll in 2014 and we acted like nothing was wrong. our financial institutions kept buying russian government-run companies because they were cheap. back when i was working on compliance programs, sanction compliance programs in 2017, i was trying to shake some boards of investment firms to say, hey, why on earth would we invest on russia given what putin has just shown us what she's going to do? if you read xi's speeches and pay close attention to what the chinese communist party is telling you, they will forcibly take taiwan. they will forcibly reunify with taiwan the rhetoric has become extremely bellicose -- >> we have less than a minute left at this point, you've seen kind of a passive -- using that word again -- passive response from some on the left and even the biden administration that this is no big deal do you think this was a big

deal, and will this galvanize corporate america to change anything i don't think so you think they should. do you think this event itself is a watershed >> i think it's just the next ratchet. when you look at the way the chinese government and military has handled, let's just say, relations in the taiwan strait, they ran a zone defense in 2014. then they went to the man defense post 2014. now post pelosi's visit they're on a full-court press. now blinken canceled his trip as a result of the chinese spy balloon and we've got mccarthy headed over there. if you think about it, the ratchet only moves one way, joe. is it an important incident? yes. i think it galvanized the american public to realize that the chinese government isn't our friend this is not a great power competition as rules i think they violate the rules

of engagement. >> and there's more to come. we're turning up our radar to make sure we can see the next one. i guess this is -- we're like in the middle of this whole incident and it's continuing kyle, thanks we've got to toss it over to "squawk on the street" in a second it's good to have you on, kyle bass where are we now 14 >> be sure you join us tomorrow. happy valentine's day. love is in the air see you tomorrow ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm krint, mike santoli at the market 6.4 year on year, the market seems to have priced that in well futures relatively steady. our roadmap begins with that sticky inflationat