roku has signs of life in the struggling ad market. sam adams' boston beer is getting hit hard in the hard seltzer market. it is february 16th, 2023. "squawk box" starts right now. >> good morning. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen andrew is out today. you will see a mixed picture to start the day. dow futures are almost exactly flat bouncing back and forth. s&p futures down 2%.

nasdaq off 1%. if you watch treasury yields, you are looking at the 10-year treasury and an almost 3.8%. 2-year treasury is the 4.58% bitcoin moving higher. the value of the market rose $85 billion in the last 24 hours up 2.5%. it is constantly trading >> if you look this year which is market watch or s&p or cnbc, it is up 11% it depends >> it is constantly trading. >> that would have it up nine when it stopped yesterday at 23 and change there it is. the chart shows you the better way to look at it.

up 14% in the last two sessions. it has been leading. although ethereum looks to be catching up a little bit it was weird the back drop the last couple days the cover of "the journal" today is the s.e.c. wants to make it harder moves to tighten rules for advisers handling crypto we had the great interview yesterday. my favorite of the day not everyone liked it. >> the senator who was on. >> tommy he was the auburn coach for nine years. u.s. senator he was on talking about his bill that he co-authored to allow -- i like some of the stuff he says what's next? if the federal government says fiduciaries cannot invest in bitcoin, this administration could do oil and gas and defense st stocks take your woke stance on

everything and the government could say you are not allowed to invest in anything >> he is the william wallace of money. my point is we have some limits. you don't want to be allowed to invest in new companies because so many go belly up and you lose money. you want to invest in real estate and other things. there should be some limitations. my point is why don't you regulate it so it is an easier asset class. he wants to see the cftc in charge he is on the aeg committee aeg committee has cftc there is it the cftc or s.e.c. it is taking far too long to figure out who is in charge. >> right being on the cusp of getting somewhere on the regulation is why it is starting -- although, it is up technically all of the fundamental back drop has nothing to do with it. we will have katie stockton on she said 25 and we're not out of

the woods until we're above 25 >> we are almost there >> 24,6. 2 24,9 yesterday anything short of that, then you fail 14,000 did you see the reddit suit? all of the reddit people are mad at the wall street bets guy. we will talk about that a little i thought they were joined at the hip. >> i thought so, too >> right they all gang up they were from the meme stuff. >> why >> i don't know. we'll talk about it. it's coming up it's coming up in the segment. we'll talk about it. cisco shares real stories cisco shares higher. earnings of 88 cents a share revenue also beat. the company lifted the full-year forecast here is ceo chuck robbins on the

call >> backlog remains robust. we drew down backlog, but total backlog grew year over year. these metrics along with i increasing visibility caused us to raise the outlook >> chuck will be on at 9:30 a.m. >> he said last night he thinks the company is in the best shape since he took over eight years ago. >> eight years already >> contessa, on "worldwide exchange" said the companies are doing well because they are drawing down backlog it may not be a macroeconomics picture. they are catching up with orders. >> where do the consumers get the money? up 3%? >> that was a surprise you know, how much speaks to inflation with the strong jobs

market the first time we have seen a positive number. >> if you feel comfortable in your jobs situation then you are comfortable spending more. shares of roku rising. the company reported a loss of $1.70 a share. that was 3 cents better than expected wow. revenue beat the quarter that may be why the stock is up. $1.70 loss of 3 cents and your stock goes up. spending in several categories in restaurants and travel which is hot, hot, hot. ford says the production halt of the electric f-150 lightning pickup will continue through next week. it halted production to address a battery issue that resulted in a vehicle fire on february 4th

ford believes engineers found the cause of the fire. it expects the investigation to be complete next week and followed by adjustments to the battery adjustment process that they say could take a few weeks. this is a huge headache for ford. > . we talked about layoffs, but fidelly ity is looking to fill 4,000 roles. the job adds come as rival firms are cutting. >> that is different than goldman. financial stock. adding i don't know about this. it's not april 1st, is it? >> this news, when i saw it, wow. no go, austin >> the white house -- i love that this is true we're not yanking your chain

white house is considering nominating austin goolsbee to replace lael brainard. brainard is leaving the fed to lead president biden's economic team he must be impressing people top economic adviser to president obama. other candidates are karen dynan and northwestern professor janet eberly and boston fed president susan collins. no relation. congratulations. >> great >> we haven't heard from him much i'm surprised. you know, if i got some type of getting anything above what i'm doing now. if i were to get a promotion, i

wouldn't leave my friends behind >> you would write me every day? >> he hasn't said anything you think the doors at the chicago fed have been enlarged for his head to fit through? >> i think he is busy trying to get up to speed for the new job. maybe if you keep talking, we can get him to respond >> he is nasty on twitter. maybe he is trying to be funny, but -- >> he hurts you? >> sometimes he does you only hurt the ones you love. >> there you go. the congressional budget office says the u.s. is on track to add nearly $19 trillion to its national debt over the next decade that is $3 trillion more than previously forecast because of rising costs for interest payments and retirement benefits and military this could add fuel to the fire over taxes, spending and nation's debt limit. we will talk to the director of

the cbo in the 8:00 hour to hear more about this. >> he can't be a smart -- >> he can. you can call him all you want and he won't fight back. >> he can. he has been de-faanged. coming up, sam adams' parent boston beer down 70% we will tell you why next. and later this hour, new details of the company wide email at google. what it says about the company's a.i. chatbot you are watching "sqwkoxon bcua b" >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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seltzer brand. that category remains in decline, but twisted tea brand logged double digit growth consumers moving from one drink to the next. the company expects another net loss for the quarter that stock off 11%. futures right now are flat dow is now down 9 points we are all in the red. we have a long way to go that doesn't tell us anything. let's talk markets with lisa erickson lisa, put a synopsis on your viewpoint. it takes a while to turn a big oceanliner around. we are seeing signs that disinflation is on the horizon at some point. it is not clear sailing yet, is your view. a lot of the concerns and worries are inflation and rising

interest rates and corporate earnings you have to be careful they are here for a while. >> you put it together well, joe. we really are moderately cautious it is on the back of the fact we see neconomic activity to continue to flow we still have the headwinds that could further impede progress. inflation is starting to come down, but it is still on a bumpy ride if you look at the levels, it is a meaningfully above the 2% fed target you have policy on the restrictive side with the monetary environment and that just makes it tougher sledding for the u.s. stock market. >> the other thing i thought was interesting and steve liesman has been pointing this out that the fed and the markets are

coming together more in your view, that is good it removes one risk to equity pricing, but still there are headwinds from the absolute level of interest rates and inflation. i didn't think the absolute level of interest rates -- you mean mean they are still too low? the historical basis and the economy is great with 5% interest rates >> well, that's a good point, joe. in the context of a longer-term history, the levels are not excessive. however, just coming from where we have been in terms of very low interest rates for quite a period of time and having those higher levels of 4% to 5% can make a difference in the equity market valuation if you look at multiplemultiplee is a step change up when you

move to levels of 4% to 5% in rates. certainly as well as those inflation levels have been higher as well again, just where we are overall in terms of pricing pressure and the knockoff effect of the fed needing to be attentive to slowing down inflation provides risk to the economy. >> for your clients that do want to be in the market and can't wait forever, you only like a couple of things if you are in the market for less than a year, you would be defensive? otherwise you would stay up? >> we are advising clients be underweight equities with the cautious outlook again, to your point, things aren't excessive with interest rate land and we see green shoots with month over month activity and a few things picking up our general advice would be cautious and relatively to put that more in the real asset

category including both listed real estate as well as listed global infrastructure. what is really nice about those latter two categories is they offer relate toughly high dividend yields and tend to have outgoing lower beta. when you have periods of potential chop in the markets, they can provide nice balance to the portfolio. >> do you think we'll see new lows in the averages you think we will be below 3,500 in the s&p in the next year, lays -- lisa? >> we are concerned about the second repricing with the next few months of the year it is based on the fact that the fed is needing to maintain v vigilance and keeping the monetary policy on the restrictive stance until inflation is coming down all sides on the economic activity front is showing low levels of activity and general

slowing. a couple of green shoots, but in general, we are seeing that difficult environment. again, there is the risk of equities continuing to really continue to come down even though we had some pick up in the beginning of the year. we are concerned about the further downtrend. >> lisa, thank you lisa erickson. head of the public markets group at u.s. bank wealth management thanks, lisa. when we come back, charlie munger speaking out at the daily journal annual meeting about a lot of different topics. the cnbc cameras are the only ones to bring it to you. we have what he said up next we will talk about his take on a.i. and tesla and elon musk and more as we head to break, let's get what munger called venereal disease and rat poison

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charlie munger of berkshire spoke yesterday at the annual meeting. munger is the publishing and technology former chairman he took shareholder questions for two and a half hours yesterday. covered a broad change of topics including artificial intelligence >> i think artificial intelligence is very important, but also a lot of crazy hype on

the subject. artificial intelligence is not going to cure cancer or do everything we want done and there's a lot of nonsense in it, too. so, i regard it as a mixed blessing with artificial intelligence >> munger said his favorite stock ever is byd. the chinese ev maker that munger invested in back in2008. this is something that charlie brought to berkshire and one of the best things he has done. they invested $230 million in 2008 it is now worth $8 billion that stake they have in the company. it is up more than 17-fold since 2008 they got a better deal than what average investors would over that period of time. in answer to the question, he compared byd to tesla. >> tesla, last year, reduced

prices in china twice. byd increased prices we're direct competitors we're so much ahead of byd i mean byd is so much ahead of tesla in china it is ridiculous. if you look at byd, which most people never heard of and you count all of the manufacturing space in china to make all of the cars, it would amount to all of the percentage of land in manhattan island >> when asked about the ceo musk, he compared it to a minor miracle to what he has been able to do with tesla over the years. when you ask about twitter, munger said social media is not really this hithing. >> i don't use twitter

i'm not a good judge on that amount my pulse on elon musk is he is a talented man, but peculiar i don't buy him and i don't sell him short. i just say he's a very unusual person >> he said more than that. he called him a genius a couple of times munger, at 99, has done almost no exercise during his life other than the army air corps and forced to exercise he was asked about his age and longevity. one shareholder said how he likes to get out of bed on his 100th birthday which is coming up in ten and a half months. >> i step out of my bed these days and sit down in my wheelchair i am paying some price for old age. i prefer it to being dead. whenever i feel sad, you know, being in a wheelchair, but

roosevelt ran the whole damn country for 12 years in a wheelchair i'm just trying to make this wheelchair thing last as long as roosevelt did. there is no question you lose mental acuity. some get shrewder. so far, i had plenty of decline, but shrewd about how i handled it so far, the results have not been that bad in my old age. now my sex life would be a different subject. >> what? >> his sex life would be a different subject. >> we can talk about anything, then i'm just -- i was immediately struck with i know how old i am and he is. you don't just get up in the morning when you are 100 i'm just wondering if i just

were to extrapolate how bodily functions change -- >> based on your own experience? >> yeah. would i be up 30 or 40 times a night? i guess that is specific to the individual. >> everybody ages differently. >> you know what i mean? he is getting up more than just to get up for the day, i would think. i guess -- >> well, i don't know. i don't know your experience i haven't been there >> i'll not say it it depends i'll not say that. >> i will say, charlie took questions for two and a half hours. he was ready to go. >> no exercise >> he had no idea what questions were coming. >> his mind is sharp. >> everything that came out under the sun. everything from climate change by the way, he admits when he has limitations. he said i don't know the answer to that. i think climate change is not as

bad as people are running around saying >> you think >> he spoke far and wide he is funny when he is talking through these things. >> everybody is different. it is kind of a sad commentary i don't know there are so many kinds of dementia and alzheimer's it can be debilitating in your 70s. there is something different there. >> genetically >> he is not even close to being, you know, people you see that started losing. >> he is funny every time you talk to charlie, warren will say the same thing he learned something and he laughs >> he is stubborn about some things i think he is wrong on crypto. >> charlie will say his problem with it is he doesn't trust it he doesn't trust what is happening.

he cites what happened with sam bankman-fried. >> the only use for it is money laundering and trading. >> he has made that case he thinks it is a spurge he thinks elon musk is a genius. he is incredibly thoughtful and well read. >> no exercise. >> a sharp memory. >> i was going to do something today. >> if it was playing tennis, he would have fun doing it. he doesn't like to examercise >> i walk in like mr. hyde and walk out as dr. jekyll. >> it is over and you are happy. >> the endorphines kick in you have to drag my sorry butt

to get in there. my trainer has to yell at me and count reps i would blow it all off. now i might blow it off since he is 99. i thought that once i got married it stopped stopped dating stopped exercising right? >> personal -- >> yes yes. >> no more teeth brushing? >> flossing. google's ceo asking employees -- toenails, let them go -- spend some time testing the a.i. chatbot details of the company email next. and celebrating black heritage with the cnbc teammates and contributors in business here is debora lee who is founder of leading women defined. >> growing up in the segregated

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. little change. single digit losses in all three major averages it has been an interesting week so far not as bad as it could have been we are still somewhere holding on to these gains since the beginning of the year. a very strong year we had with data points that certainly would shake anyone's confidence that we conquered inflation or rates would stop rising. the 10-year treasury and 2-year

treasury rising. we talked about this earlier. founder of wall street bets which leaphelped inspire the me stock frenzy of 2020 and 2021 is suing reddit crazy. according to the filing, jamie is accusing the platform of wrongly banning him from moderating the community -- good job -- and undermining his trademark rights he said he was removed as the moderator of the subreddit reddit said he higviolated the rules by trying to monday ties. i'm not adding to this story i'm feeling it >> you are radiating it. >> i am. they deserve each other. all those people

different. >> go after him. @joesquawk >> the "c" in cesspool comes from in twitter. >> what happened the mob mentality. >> mob mentality >> the same with wall street bets now you are dragging me into your bull's-eye with you. google's ceo urged employees to take a few hours to test the companies a.i. chat tool in the company wide email viewed by cnbc, he asked workers to spend two-to-four hours of their time on bard he reminded staffers that google has not always been first to release the product, but it hasn't hampered its ability to win.

the pressure is on and after last week with meta and google the showed off the product last week venture capital started to sky rocket fundsing increased from 2020 to 2022 joining us with the next big venture in tech is jeff lewis. he is the founding partner at bedrock capital. jeff, you had a lot of success in picking early winners on this is the rush that we're seeing for a.i. right now, is this a fad or is this something that we've seen where every company puts dot-com or is this the next cloud and has staying power? >> it has more staying power, becky, than google engineers

testing something for two-to-four hours a day. i don't think they work two-to-four hours a week that said, it is one of the situations where most of the value in a.i. is actually going to accrue to the incumbent big tech companies bullish on microsoft and then in practice, you need power to train the models to drive inference from the models and it is not a massive start-up opportunity. i would say it is analogous to crypto in 2021 with the hype and probably a few things endure the downstream a.i. infrastructure that enables big tech incumbents to integrate a.i. to the products that is where the value accrues. >> you think microsoft is in a better position because of the relationship with chatgpt? this is the relationship with

open a.i. and you are an investor i want to understand >> i think in practice, if you are a start up in the space, really the core area you can really offer value to customers with the application layer if you think back to the platform shift to mobile back in 2009 which played out over a decade plus. ultimately, there are startups building applications to allow you to order a potato chips to your couch from the mobile device those ended up not being valuable in the end. there is uber and lyft where i was an earlier investor, but in practice, the platform shift an cued to incumbents apple owned to a lesser extent with google. ultimately true of the a.i. wave right now. >> geoff, i want to understand

your investment so we understand people are talking putting your money where your mouth is. i want to understand you are still an investor in open a.i. and open a.i. is the back end for what microsoft is doing, correct? >> correct we are bullish on open a.i that is the core infrastructure play here. you want to invest where the value to capture long term we believe that is open a.i. and google has a shot. i don't think it is a huge start-up opportunity today >> i don't know, geoff, whether you have an opinion about this, but long term, and philo philosophically, do you believe and is this questionable that this is a point in time? everyone is saying a.i. is great, but it will always need humans it is a tool

it will never take the place i believe the curwelian notion of computer knowledge of everything humans have learned and there would be a quantum leap where a.i. could solve cancer charlie munger said it would never solve cancer if you have all that data, is this possible or no longer possible >> to the extent it is possible, joe, i think it is many hundreds of years out the singularity, a.i. takes over humans i hope it doesn't happen could a.i. cure cancer yes, at some point it would be that good. you are right. >> we need the rules we need the rules for robots

they can never hurt a person science fiction. people think of these things, geoff. we are watching it happen in much quicker -- the advances are happening in shorter times with the internet and everything else >> you are right i think right now i would be most worried if i was an engineer at google the biggest use case right now for a.i. is actually co-generation. the first group of folks that will get displaced is a wide swath of engineers we are a long way away from the complete singularity >> you are scared. you are thinking about linda hamilton in "hunter killers. we might be hiding underground they don't need us >> we have bigger problems and more things to be scared about than that.

at some point -- not climate change >> you saw what happened in ohio that worries me more than trace co2. chloride is raining down into your house geoff, as we know about the workers down at ground zero. think about toxic things and think about that hype. coming up, some of china's wealthiest people are using the end of zero covid to leave the country. details are next we'll be right back. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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the easing of covid restrictions in china is allowing residents to travel again abroad that includes the wealthiest citizens taking their fortunes with them. robert frank has more with the wealth migrating out of china. hey, robert. >> good morning, joe this is an increase in chinese wealth flight. the number of chinese asking for migration spiked 600% in the

three weeks after china lifted the lockdowns. that is according to the advisory firm henley and partners last year, 11,000 chinese m millionaires left the country. this year, the number is expected to be even higher >> vast majority of clients are looking for plan b but now it is plan b and plan c and plan d what we see is a lot of them looking to develop a portfolio or at least geographical diversity in terms of where family can go. >> capital flight could be even larger the chinese wealthy expected to move more than $150 billion out of the country just this year. there are growing concerns of the chinese economy and the government, those are the main reasons. president's xi crackdown on tech and real estate and the common prosperity campaign against big

wealth officealso creating new threats. the favorite destination for wealthy moving in europe portugal and greece topping the list and australia and an singapore. the u.s. is not as popular, but seeing a rise in applicants. all of the capital from china c expect to boost the real estate markets, and the economy in those destinations this is a wealth migration that has big ripple effects around the world. >> yeah. i see that not italy. that makes no sense to me. i would make a b line -- >> great food. beautiful climate, but they don't have the golden visa program that, let's say, greece or portugal has where you can buy, you know, $500,000 condo and get your five-year residency. >> that's the only thing stopping them. because it is incomparable, i

think. you've been watching "white lotus" too did you see that place >> both seasons. the second one, the second one italy was better than the first. >> the place they certainly was. though i love hawaii. >> it was nice. >> the worst island in hawaii is better than anywhere else in the world. thanks, robert see you. >> thanks. sld rying to think the ian with the -- trywhen we come back, potenl portfolio paciicks

cisco shares moving higher this morning in early trading. the company reporting profits of

88 cents a share that beat estimates by two cents. revenue also beat expectations and the company lifted its full year forecast. we want to talk more about cisco and maybe another stock or two in the news with mark lehman who is the ceo of jm securities. you have been watching cisco shares before. i think we talked to you before any of this news came out and you thought that even though the environment is kind of soft overall, that they do okay because they would still be shipping orders from the backlog. that's exactly what happened what else did you think about what the company reported? >> well, i think cisco, like a lot of big cap tech, benefitted from an obvious talent at the beginning of this year and a new backdrop of people are buying big cap tech and expecting the profits to be more important than the top line growth and new opportunities from these big tech and we have seen this explosion of market cap for big cap tech at the beginning of the year and obviously cisco benefitted from

that, like a lot of others as they reported the fourth quarter. >> you have a hold, though, or market perform, which is basically a hold on cisco. if you thought they would be doing okay in spite of it, what did you need to see, what would make you change your mind? >> i think we with want to see an exacceleration of revenues relative to the other names we cover at jmp i think that was the bigger issue. but i think the reason the stock continues to perform well, and like i said a lot of large cap tech does, is that we really have gone from a real focus on end markets and growth at all costs to really focusing on profits. and i think that will continue to be the backdrop as we get this crowded interest rate environment to be less crowded that's one of the themes we're seeing at jmp. there is plenty of opportunities for the marketplace and i think some of the growth at all costs is in the rear view mirror and the market, it seems to like

that and will continue to do so through the rest of the year. >> what does that mean for a stock like roku? >> i think the same thing. i think the bigger cap names, which have been nipped at by an explosion in venture investment for the last two or three years, are going to find a benefit both from an ability to buy companies that are no longer financeable as well as from the ability to focus on the bottom line as opposed to the top line. the old anthem from some of the companies we talk to on the buy side, the constitutional investor was grab market share at all cost and that's stopped for the last couple of quarters and will probably continue to for the rest of the year and the foreseeable future. >> is roku a big cap its market cap is $7.7 billion that's nothing to sneeze at, but nothing like the ciscos of the world. >> agreed. i think -- but it is a large market, streaming is the way -- it is big enough there is smaller competitors like google and others who are not quite as large who are having a tougher time scaling the profitability

roku is not as afflicted as they are. that's why we would expect that to continue market share. >> okay, mark, thank you >> thank you have a good day. coming up, get ready, we have a new report on the fed's rate hike path and how the market is finally maybe pricing it in a little more. man a good thing. later, katie stockton's take on the markets bitcoin, everything seel, yields "squawk box" will be right back. so cozy. how many rooms are in there? should we go check it out? yeah. we get to stay here all weekend! when you stay at a vrbo... i call doing the door code!

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good morning futures muted this morning after yesterday's retail sales report suggested that the fed may have further to go to try and tame inflation. get a breakdown of the markets and what is ahead for rates. lawmakers facing a debt ceiling dilemma. what can be done to prevent a default? and no topic off limits for berb berkshire's charlie munger why he's calling crypto as the

second hour of "squawk box" begins right now. >> it is an absolute horror. i'm ashamed of my country that so many of you believe in this kind of crap and the government allows it to exist it is totally absolutely crazy good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen with becky quick. andrew is out today. u.s. equity futures now turned just slightly -- the dow has positive the other two still in the red, barely, by a point treasuries this morning are aboutwhere we have seen things recently 378. not back to 4 yet on the

ten-year and the two-year, 4.58%. oil has been a little bit stronger in recent sessions. back close to 80 at this point at 78. and then we mentioned bitcoin up about 11.5% or so. we always say 2% there but it was at 21,000 and change a couple of days ago now at almost hit 25,000 we'll talk to katie stockton about whether the crypto winter has moved into a crypto spring or whether the groundhog saw his shadow and we're going back to -- >> 66 degrees last night when i walked out of the house. >> i know. >> a little warm. >> did you complain in. >> not at all. i was thinking how fantastic it is to not have to be driving in here in the snow and worry about -- >> there is upside to driving an suv. there is if we could get north carolina up here permanently, weather, would that be that bad >> i would not complain.

not in february, at least. strong economic data and stubborn inflation suggests the federal reserve could be hiking into the summer. steve liesman joins us right now with that. that's not what the market had been thinking, steve >> right it is a rethink going on right now, becky i hope for spring pause could be off for the federal reserve after a week of data showing inflation declining more slowly than expected and the economy growing faster the fed may not hike until may and build away a june rate hike could be in play here. markets have been increasingly pricing in this possibility of hikes including the june meeting as they take account of the data and hawkish fed comments 54% probability that the fed stops on or before the current average forecast of 5.13 45% probability, add up the two bars to the right there, of another quarter point hike in june that probability has been as high as 50% or above it.

those probabilities show up in the fed rate outlook where the peak funds rate is now in the august contract at 5.22,$5.22, h is ten point or more above the fed's forecast markets debate whether that's off a bit by year end, to just about 5% the important thing is it is now very little gap between markets and the fed. markets pricing even suggesting the fed may do more than it is forecast that read could end up being correct. this new more hawkish outlook comes after tuesday's cpi report showed less improvement than wall street expected and that big yesterday retail sales report showed better growth. in fact, that report prompted a rethink among forecasters of just how weak this first quarter is going to be in january we saw a 0.2% average gdp forecast. that number now stands at 1.5% a few of the forecasters we surveyed are above trend at 2.5% the fed wants below trend growth

to try to bring inflation out of the system while a 50 basis point hike remains a possibility, fed officials seem more likely it use quarter pointhikes, allowing them to move more slowly in response to the data and that could mean that we are still in business in june with fed rate hikes. >> oh, boy oh, boy. >> i got a couple things, steve. number one, the markets are now in sync. that's a good thing. the one market that still isn't in sync is the stock market. so that's where there is still a big gap, i think and that's the one that is most troubling that if it is going to be rectified one way or the other, the market is wrong about the fed, it is too high. if the fed is right, maybe the market is too high the yield curve is caught up what about the stock market? >> you know, joe, there is two points of view on this i take my cues from guys like santoli who say, look, the market has behaved very well

among this repricing so, you know, joe, i worry, i worried a lot about how that gap was going to close we talked a lot about it 80 basis points wide on the year end and now it is -- i'll give you -- >> not the month. >> it was right, for now. >> i don't want the fed -- the stock market, that's the problem. >> right now the gap is 12 basis points i thought actually that the closing of that gap could be more tumultuous than it has been so i would have to look at what is exactly happened to the market but it hasn't really sold off that much. so, you don't know i guess you got to get on the phone and call these guys and say do you know what the bond market is saying is going to happen here? i don't know i think -- >> what i really wanted to talk to you about and the producer's head is going to explode, i alluded to it yet, recorded just last year who is the keyboardist? really, really good, the guitar was great, it wasn't jerry

is john mayer in that band >> john mayer is in that band. and the keyboardist is a guy i'm proud to call a friend of mine, jeff kanetky, an unbelievable talent. >> beautiful >> he's just -- i have rarely seen a person bring a whole house down with a piano solo as jeff it is just remarkable. and the thing -- the thing that is so awesome about my friend bob weir, he's a great ceo, he gets all the right people in the right place. now he's playing with this horn section, and at 75, he's still cranking it. you and i would be well to do half as well as he -- >> he says he likes it he doesn't care. the only other thing, we had an argument with two senators, blumenthal and one from tennessee, marsha blackburn about musicians. >> jerry or bob? >> nobody from connecticut and john mayer is now in my

eyes, he's grown immensely from finding out that he's now -- does he play -- >> they were one of the largest -- speaking of the business side of our job here, they were one of the largest grossing touring bands in the past several years >> brought it back to our -- >> see that? and you know why, joe? the economics of rock 'n' roll are such that you make them money playing live the recording, because you're getting -- you're getting .0001 for a stream on spotify the way people are making money now is live music the economics of it. >> used to play for silver, now they play for live they said that. >> exactly >> thanks, steve our next guest -- >> a pleasure, joe >> i'm sorry i'm sorry. our next guest says the takeaway from this earnings season is that estimates still have farther to fall. she remains cautious on tech and

her s&p 500 target year end is 4,000. joining us is jill kerry hall, head of small and midcap strategy at bank of america global research. you weren't rolling your eyes. you were fine. we'll put that quickly we had someone -- it opened my eyes to the possibility, we had someone say we will test the lows, chief guy at piper, and 3200 is not unthinkable, given what kind of slowdown we could eventually see from the fed and especially earnings revisions. >> mm-hmm. >> that's not in your forecast 4,000 is not very far below where we are. >> right 4,000 is your end target as a downside risk, we certainly thought as a bear case the market could go into the low 3,000s, but our base case is we end the year at 4,000. i think, you know, there can be more downside risk near term, so, you know, heading into the year sentiment on -- had been very poor in the first half, so we saw the big january rebound, but there is risk we could see

volatility from here we are expecting two more fed hikes, we are expecting a mild recession to start in the third quarter. so it is possible that we do go down before we go up and i think right now the focus is going to be on the economy and the backdrop and we do think earnings still need to fall further. >> is the s&p at this point what doesn't kill it makes it stronger or is it whistling past the graveyard? why the disconnect nobody who doesn't -- hasn't heard what you just said i said that to this gentleman the other day. what are you saying that isn't known right now or at least assumed, this is already sort of what is assumed for what the future looks like. why isn't the s&p 500 cooperating by going down? >> there is still a lot of opt mi optimism and we have seen a lot of optimism on earnings calls. corporates have been resilient margins contracted slightly this quarter. there is a lot of cross currents going on right now the markets are not fully

pricing in a recession in our view i think there is more opportunity in pockets of the market, small caps that have been more adequately pricing in the risks and where we can see more upside. >> it is going to be a grinding -- only -- is it february, i think it is february, valentine's day, i think i got that right, february the rest of the -- >> the 16th. >> okay. so we're at 41.47. the rest of the year, 10 more months, we end up at 4,000 a grinding tough slog. you think it could be 3800, but pick your stocks >> i think there is risk we could go down before we bottom and usually the market bottoms about six months before the recession ends so could argue for at some point later this year we see more of a firm bottom and upside i think there is so many cross currents going on within the market this year that we think it is going to be a year more about picking your spots, active management over passive, we think the rest of the market outside of the top 50 megacaps

looks more attractive than the megacaps we like small caps as i mentioned. i think tech looks risky we still think even amid all the layoffs there is labor relative to the real sales growth is still relatively bloated. >> petering out, tech? >> yeah, we think there is -- we have peak globalization. there is all these things that benefited tech for many years, low interest rates that i think on a techler basis are reversing and tech is still a cyclical sector if we go into a recession. >> are you less equity weighted now overall or always fully invested >> when we think about equities, we still like equities relative to fixed income. cash is an asset class has grown more attractive, given the yield. when we think about asset allocation, we prefer equities over bonds, but we highlighted the cash is certainly grown more attractive and within equities we would focus on a mix of some cyclical areas and some defensive areas, consumer

staples is seeing some of the inflation head winds ease. we like energy, still cheap. still now an area that has a very attractive free cash flow and cash return potential. >> all right very good. jill, thank you. >> thank you >> as we said, you're in a sacred chair i just hope you can feel the gravitas of being in that chair. thank you. >> thank you. when we come back, budget committee chair jodie arrington will join us on the debt ceiling and avoiding a default. and charlie munger not one to hold back when it comes to crypto wait until you hear what he said at the daily journal's annual meeting yesterday. "squawk box" will be right back. ♪♪ inner voice (kombucha brewer): if i just stare at these payroll forms... my business' payroll taxes will calculate themselves. right? uhh...nope. intuit quickbooks helps you manage your payroll taxes, cheers!

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the house budget committee continues debating a resolution to the debt limit crisis to avoid defaulting which the congressional budget office says could be as early as midsummer at this point. following the cbo's latest report, our next guest says things are worse than we thought and that it is time to rein in spending before it is too late joining us now is jodey arrington, the chairman of the budget committee, and congressman, thank you for being here

let's talk through what we know now from the congressional budget office. looks like another $3 trillion in deficits over the next decade, part of that is because of rising interest rates but the other issues they cited are defense spending and care for veterans among other items >> well, if we didn't believe that spending was out of control, we now have an updated projection the last time this nonpartisan budget scoring group gave us projections was in may and just from last may to date we have $3 trillion more we're going to have twice the level of annual deficits from 1.5 trillion this year to $3 trillion ten years from now. it is more spending. it is more soaring interest rates. and record inflation and the sum of it is our nation's health is in decline.

and our fiscal trajectory is completely unsustainable and it would be totally irresponsible for this president and our democrat colleagues not to negotiate some limitation on our spending going forward >> brendan boyle, the top democrat on the budget committee with you, said recently it is almost as if they want to take the hostage first and then figure out what they're doing later. i think democrats have complained that gop lawmakers said they want to broadly call for cuts but not make tough choices. you have been sitting down looking through some of the things that you would cut. you want to lay out some of those items? >> well, it is a long list, actually i think there is tremendous amount of waste and unnecessary spending, especially coming out of covid let's just start with covid. there is $100 billion in unspent covid monies we know that the covid relief, so-called covid relief, is what ignited inflation.

we should rescind that we should rescind the public health emergency that's tens of billions of dollars. we can look at budget caps our budget is going to freeze 24 at 22 levels we think we ought to right size and reset coming out of covid in terms of discretionary spending. and then there are lots of low hanging fruit opportunities for savings on the mandatory side, for example, we have a labor shortage because this administration has pained people it stay home and not work, they repealed reasonable work incentives, we should restore those, that's tens of billions of dollars and i haven't even gotten to the i.r.a.'s climate subsidies. i haven't talked about obamacare subsidies that have been increased for those making over $200,000 a year. so, there is a long list to start with and we need to do right by our

children and their future in this country that's what this debate is really about >> in terms of what happens with default, the potential default for the united states, do you think we will hit that would you allow us to default on our debt you think these are negotiations that can take place beforehand and if there is any bipartisan sort of support. i know you've looked at this pretty honestly, and said you're not going to get everything you want, and it is not going to come anywhere near the sort of savings that you would like to do >> that's right. i mean, that's the reality of any negotiation. i think we have to all be adults about it this is the greatest country in the world. we want to keep it that way. i think our fiscal health and the trajectory we're on is the greatest long-term threat and so, you know, this president, for example, has been a part of those negotiations he has supported freezing the

budget he has supported budget caps in the past so this isn't new to him we had a debt ceiling around for 100 years. we have never defaulted. we will not default today. and we will protect the good faith and credit of the united states but we will not give this president or any politician an unlimited line of credit with no guardrails and especially now that we're looking at 120% debt to gdp, the most we ever had and the largest amount of indebtedness in the world. >> i know some of these issues that you have mentioned, i think probably like clawing back some of the covid unspent funds, cutting down on fraud when it comes to food stamps in other areas, you may get bipartisan support on things like that. are you willing to also put limits on issues that are really

historically republican priorities, something like defense spending >> there is no question that there is waste at the pentagon the largest bureaucracy in the federal government and i know mike rogers, the chairman of armed services is totally committed to rooting that out we know there is improper payments of upwards of $280 billion across the government. some of that, maybe a lot of that, is in the pentagon but i will tell you, in terms of lethality, and bullets, guns, tanks, bombers, the things that we need to do to prevent conflict, to stabilize the world, it protect our interests abroad, and basically to be ready against great power threats like china, that's our first and most important priority as a government you can strip almost everything out of it, we have to do that to survive, so, of course there is

inefficiency there, but we're at lowest levels per gdp, per capita, and in terms of investment in our defense and our readiness, i'm concerned about that i think you can do both there, make the investment, root out inefficiency, but the nondefense waste is tremendous. and that's where we're going to start. but everything is on the table in terms of defense and nondefense discretionary in these conversations. >> chairman arrington, thank you for your time. >> thank you, guys god bless. and a quick programming note for you, we will be talking to the director of the cbo, phil swagel at 8:30 a.m. eastern time. shares of paramount global are falling following its fourth quarter results, revenue at $8.13 billion, share of estimates with adjusted earnings of 8 cents a share, well below estimates of 23.

and a record 9.9 paramount plus added a record 9.9 subscribers during the fourth quarter, reaching nearly 56 million total subs. long discussion earlier this week about relative performance of shares of that company versus other media stocks >> five years over -- >> james stewart and -- it is not pretty coming up, berkshire hathaway vice chair charlie munger wants to ban crypto his latest thoughts on digital currency next. and southern company and tom fanning, ceo, will talk about the energy company's latest quarter and the fed and energy prices we'll be right back. time now for today's aflac trivia question. who is the first president to throw out the first pitch at a baseball game? the answ wn bc "erhecn'ssquawk box" continues

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now the answer to today's aflac trivia question. who is the first president to throw out the first pitch at a baseball game? the answer, william howard taft

in 1910. charlie munger, berkshire hathaway vice chair and daily journal board member and investor, answered shareholder questions for about two and a half hours yesterday at the daily journal annual meeting we got the chance to watch this and ask him a lot of these questions. one of charlie's great observations over time is that whatever you are, age and money make you more so well, munger is 99 years old now, he's always been blunt, he's always been truthful, and he's even more so now. every single question he answers honestly, even when it comes to talking about his own mistakes >> we live in a world of misdecision, that's what we get to cope with in our days of life i don't expect the world to be free of folly and mistakes and so forth

i just hope people have more good judgment than bad judgment. i don't know anybody who is right all the time >> but charlie munger is pretty sure he's not wrong when it comes to cryptocurrency, which he thinks should be banned now, he answered a question that came in from a shareholder, a clever question. the shareholder said, back at usc, many years ago, you gave a speech where you said you should never be able to kind of publish your opinion or put it out there if you can't argue the other side of that position more effectively than just about anybody out there. so the shareholder wanted to know, you said crypto is something you would never touch, make the other side of the argument and here is what charlie had to say to that. >> i don't think there are good arguments against my position. i think the people who oppose my position are idiots. and so i don't think there is a

rational argument against my position this is an incredible thing. naturally people like to gamble where other people lose. the people who invented this crypto crapo, my name for it, sometimes i call it crypto crapo, and sometimes i call it -- well, crypto [ bleep ], and it's just ridiculous that anybody would buy this stuff you can think of hardly nothing on earth that has done more good to the human race than currency. national currencies. it is just unspeakable it is an absolute horror and i'm ashamed of my country that so many people believe in this kind of crap and the government allows it to exist. it is totally, absolutely crazy,

stupid gambling with enormous house odds for the people on the other side and they cheat in addition to cheating in the betting. it is just crazy >> i think what has been unveiled and what we have seen so far with ftx has him more fired up about some of these issues being offshore, being able to create tokens, take money from people as a result of that, and then the money disappears and the tokens are worth zero that's really what got him fire up i asked him about gambling in general, because there is so much gambling taking place at the super bowl over the weekend, and i thought would be something he would rail on because he's talked about gambling at all levels and i don't mind that nearly as much as crypto this is the issue that has him fired up. >> he's a smart guy, obviously there are some really smart people that could give you a really good case i don't think he could give you a good case because he has no idea how it works.

>> not sure he's read the white paper on it. >> i don't think he knows the very first -- i don't think first page of the bitcoin standard or whatever book you want to go through, i don't think he's read the first page and, i mean, that's the most pedestrian viewpoint that i've heard from people for 20 years they all say the same thing. none of them know anything about it but they -- that's fine. he's smart other people are smart. >> this reminds him of patterns. >> exactly. >> that's kind of what his concerns are. >> what did he think of tech >> but they -- >> kick and screaming into the new world. >> but they will -- >> the internet, all those things >> they will say they're not tech investors >> i know. well, then -- >> by the way, when they bought -- >> don't opine on things you have no idea about. >> but i think they look at some of these deals, particularly the coins that are just made up -- >> you're not talking about bitcoin in that regard

but there is some very smart guys that are maybe a little more tech savvy that -- i could give you a list of them. peter keel -- >> you agree with a lot of things he said yesterday, california driving out all the wealthy people with the policies. >> i don't expect him to understand bitcoin still to come -- southern company out with earnings. we'll get through the quarter with ceo tom fanning

our next guest will be stepping down as the ceo of southern company this may. tom fanning has been in charge of the second largest utility in the u.s. for more than a decade. will remain on as executive chairman the company reporting stronger than expected profits of an adjusted 26 cents a share and revenue came in at $7 billion versus estimates of $5.4 billion. that's up more than 22% from a year ago tom fanning joins us now to discuss his results. power demand, energy policy and the move toward renewables it is february, number one, tom. we're burying the lead i have to do things myself you were never on the cover of "usa today," you've seen this? >> no, no. >> chris womack, your successor, is on the cover -- >> he's fabulous. >> he is fabulous. >> he deserves to be on the

cover. he should be "time" man of the year. >> he was my golf partner for three days in a tournament where he -- you get to know each other pretty well when there is galleries. i love this man. now he becomes the fourth black ceo in the s&p 500 and he points out progress being made but a lot more to do, but it is a great move and we look forward to -- we'll miss you, but we look forward to having chris on the show from time to time. >> he's fabulous >> you didn't know that? >> i call him -- >> you didn't know he was on the cover of "usa today" today >> i did not, no. >> your people are worse than mine, i think, in terms of -- >> my people, they're terrific >> okay. i think they would know if your next ceo is on -- anyway, that's neither here nor there but, southern company, what ado the results reflect at this point? a rebound, a looming recession, higher interest rates, inflation? what can you tell us from your

results in the last three months that shed light and as your former role at the atlanta fed and everything else? >> yeah, and i think it is really interesting stuff our total sales for '22 nearly doubled what we thought they would be i think part of this reflects the new work environment, but residential way up, commercial way up, industrial down a bit. if you exclude plant closure, look, they were about flat the more interesting data, i think, goes not to year over year results, but to what we call momentum, essentially the first derivative of that growth rate almost all i think all of the top ten industrial segments show negative momentum. so even if you had growth, the growth was slower. that does suggest what we're seeing is a little bit of a slowing in the economy but let me give it a glass half full that is when you look at our economic development data, it

continues to be really strong. job growth, 130% year over year. capital investment, 250% so here's what i think is happening here i think we're going into what could be the proverbial soft landing. i think the fed, you know, as much as people love to sit on the sidelines and opine, the greek chorus of america, look, i think we're going to see a bit of a slowdown, but i don't think here in the southeast anyway we're going to see a recession i just think it is going to slow a little bit and come out fine all the long-term data suggests that go to the long-term demographic data we continue to see people moving into the southeast about a percent moving in every year for the next five years is what we project. historically low unemployment. i think evs has been a big story here last thing, you guys did a great piece last year with visa,

talking about people moving to atlanta because of technology, engineering and innovation hires, particularly in diverse communities. southern company and apple have invested and are building something called the propel center, it is going to be located at hbcus, it will develop, i think, a critical mass, an engine for continuing to build this for the future look, i think all the right pieces are in place for the southeast to outpace the united states broadly and continue to grow >> broaden this out a little you've been there for a long time you have steered southern company into the future, and second biggest utility, you provide power to the grid and everything else, you see the ongoing debate about esg and reaching zero carbon levels and, you know, renewables are great, but they are a ways off and we need a bridge to the future. how have you structured -- you

haven't built a nuclear plant, you wish you could have, tom, or do you think we should -- you did build one. yeah >> yeah, yeah, yeah. we are building one. in fact, you know, we're projecting the first unit being in service and the second quarter and the next unit, maybe the end of this year potentially into the first -- >> what else should we be doing? natural gas, clean coal, how do we supply the energy needs of the world in a responsible way, tom, what is your solution >> look, you know, i'm an old finance guy, i believe every option has value even if it is out of the money in the -- today. so, look, we need all the arrows in the quiver, all of the above. natural gas has been a terrific boon for the united states economy. let's unleash the power of natural gas and get that going we'll be able to manage the carbon affluence from that in the future through increased technology and all that. we need to continue with

nuclear. renewables certainly have their place, but they also have their drawbacks. you saw last -- around christmas time, we had this big cold wave come across the southeast. some people had to do load shedding in order to manage that demand, because in a winter peak day, where is solar? it is just not working we have been able to work in our integrated regulated model here in the southeast with our regulators to build a sustainable, operational model that is resilient for the benefit of our customers so, there is a way to do this, joe. it is going to be all of the above, gas, nuclear, renewables, and then we need to add as a nation more investments in technology, development, r&d, et cetera >> all right very good, tom, thank you for playing along and do say hi to chris and tell him you'll be okay when he's on here, like

every quarter? that's not going to be a problem for you? you won't say, i'm young, why did i do this? you're not going to -- >> i'm old i'm almost as old as you are, joe. and womack, you know the commercial in the super bowl about rock star. he's a rock star. >> he will be. look forward to that but you'll be chairman, maybe you can still come on. maybe we'll get both you guys on at the same time. >> that would be fun. >> that would be good. you're a big thinker you're not nearly as old as i am neither one of us are old. did you see charlie munger he's 99. >> i did i did. i'll be 66 in a couple of weeks. >> that's not old, man if you think -- >> that is not old. >> rock star, doesn't like that. at who doesn't th's right >> "squawk box" will be right back

tech names that were tossed aside in 2022 have a new lease on life. and yesterday's earnings are a prime example. roblox spiked 26%. nerd wallet did too. on valentine's week, should investors love this growth tech

rally or leave it? >> love it or list it. i love that. >> we're going to hear about both options jon fortt is here to weigh in. >> yeah, joe, leave it i know it is hard for investors to see those charts going up and up every week while you got money on the sidelines by the end of 2022, you licked your wounds on losses and said you were done with that risky unprofitable stuff, and now look at it. c 3ai was 11 bucks, and now 25 tesla doubled off its lows of the first trading day of the year so why leave it? the most important things about this economy and this market still haven't changed. inflation is far from tame with the january consumer price index up 6.4%. the labor market is hot with more than half a million jobs added last month and the names that have been rallying most are some of the riskiest it is like in high school, where you can tell how a party was going to end by the mix of kids who showed up late virgin galactic up 78% for the

year and bitcoin back near 25k, which charlie munger is very excited about. the cops are breaking up this rager by 1:00 a.m. >> it is not as if everything that rallies is low quality. there has been a rebound in -- across the board in tech >> well, joe, unlike charlie munger, i'm going to argue the other side on the other hand, there is a lot of treasure in this rally. understand it, you have to admit the 2022 growth tech sell-off went too far we got to the point where investors were openly saying to avoid tech at the moment when we're standing on the cusp of an artificial intelligence driven revolution investors realized ai is more than a buzzword. microsoft can use it to challenge google and search and c3 has real customers like baker hughes or raytheon or nerd wallet that did more than half a billion of revenue in a year

roblox isn't profitable, but its model is working and bookings are up 21% so it is not to say there aren't trash stocks out there there are. but there are interesting long-term bets too, joe. >> there is a lot of analogies i don't know if it is the early days of the like th early days of the internet or all these they can we're going to see, the time between major advances is closer and closer. there's no doubt you can take that back a billion years, would you like to be paul krugman and had said -- >> no -- >> -- and said the internet will be no better than a fax machine, in general he's on record, he said that you could say the same thing, maybe people sake that about bitcoin. >> or ai

do you remember that innovation was speeding up on the web, you were able to put different data sets together. that's where we are with ai. this is quickly monetizable. how quickly it changes competitive dynamics is yet to be soon. how much of an advantage will microsoft get, is some small company going to get from ap applying a.i once we start seeing those toppled, then that's something else. >> thank you, job. good to see you in person, as always john hill bryant will joining on the state of small business and the president's agenda "squawk box" will be right back.

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congressional republicans outline dueling economic plans, our next guest tells us what's working for small business and what isn't operation hope founder and ceo john o'brien, it's been a while. good to see you. >> it has. >> let's talk about what is working for small business the economy is good, jobs market is strong, but when we talk to business owner in general, they say it's a bit easier to find workers now. what is working for small business right now >> they're finding the optimism note

rainbows follow storms so this is almost like a clinton moment, in the sense you're trying to find this compassion but capitalism in the same breath at operation hope we have a 1 million initiative we created that many black businesses in a month, and we have 185 black businesses in this 1 million black initiative since the pandemic, in the last two years. unbelievable that's 25% of all black businesses in america. most earn their income through their they're, of course, making less than what we would view as a taxable rate, but they all want to grow to become the next goldman sachs or nasdaq or cnbc, so they are employer, they are paying their fair share. i think the optimism and the

hustle of the bottom of the pyramid reminds me at the beginning of the century, where the small businesses become the behemoth of today. >> we've had lots of liquid, a lots of money sloshing around that have allowed all these kind of good things to happen bad things when you esqueeze get overinflated that time has come to an end, no matter who you talk to there's going to be a lot of fallout from that. is it much harder to start a business these days now, too >> yes and no. >> the sba -- guzman is a great administrator, they show 124% increases in searching for people who want to start a new business, a 38% in black business start-ups 15% of latino startups

the biggest start upare with black women. people are seeing, yes, there are challenges, less liquidity, but you also have they corporations that have put up $56 billion of capital during the pandemic you have to qualify, that has never been available before. those programs are mostly working. folks -- we're getting credit scores up 50 points to 1 points up, so even en masse can qualify for this it's like a james brown version. open the door, i'll get it myself >> are you worried that companies are less philanthropic. >> there's a whole movement, i think it's wrong, to take on a more limited view -- an austere

view you cannot not care for people when you're a front-facing -- i want the kind of policies in the kind of country where i'm not just getting your attention -- i'm messing with you, joe, because you're working on a story. >> i'm not working on a story -- i was going to ask you some something. >> but joe's the one who told me about my friend chris womack on the cover of "usa today. so everybody is concerned -- >> i hate to interrupt you why can't we dosupply-side -- more jobs, more success, greasing the path for the private sector, not raising rates. are you frustrated with the fed and this position you're in right now? >> i find it's interesting we're on the opposite side of it we'll get to the promised land together

i actually think it's good, the fed raised rates i actually think that was healthy. >> why >> it took the froth off an overheated market. people thought you were brilliant. no, you weren't brilliant. the fed put a floor on equities. the interest rates are so low. i think we're out of -- >> i'm talking about the real economy, not the profit in the stock market you're going to raise unemployment, and you're going to raise interest rates and make it harder to borrow money and to expand your businesses, hire people and flourish, that's the way you deal with this >> we're not that -- we're used to not getting prime anything. half of black folks have a

credit scores below 620. i'm trying to get them to a point where they have prime credit where they have a problem to complain about. when you're ready to pivot, you need it as a credit. we're trying to create that holistic environment. >> you don't want as many people working as possible. that's a messed-up way of running -- >> i think the pandemic was a manufactured crisis. in other words, we didn't create the pandemic, but we had to have a manufactured response, so it created more deficit, more chall challenges and we had to have a responsible to the response, which was the fed raising rates to get us back in the control. i think by the middle of the year, we're going to be stabilized by the middle of 2023, the fed will have done its job, and we

can all say chill -- >> another half point. >> i think anotherhalf point, in my view is more than enough we have proven it works. we brought the inflation down, have taken the froth off the beer now we're all sober again and ready to go back to work. >> we'll see >> the biggest big creatorers are black women. it's really quite inspiring, actually. >> good to hear some optimism this morning. >> and it's data-based optimism, things that my man joe respects. i love you, joe. >> i love you, john. we'll see you later, becky. you are watching "squawk box" on cnbc i'm becky quick, along with joe kernen, andrew is off today. we've been watching u.s. equity futures right now things are a bit lower, dow futures down. s&p futures down about 11,

nasdaq down about 45 as well treasury yields, as you know, have picked up pretty substantially over the course of last week. the ten-year this morning is almost at 3.8% the two-year is above 4.6%. >> talking about the broader markets and key technical levels, jointing us is katie sto stockton, a cnbc contributor katie, the nascent rally we talked about last time, since the beginning of the year has kind of held on to its gains, and i've talking about the s&p as well as bitcoin, is anything alternate this point done enough work in terms of building solid underpinnings to make this last? or do you still think that the support levels that you constantly talk about, those are still in play, much lower? >> we did see in january a lot

of breakouts from a bottom-up perspective. that's something we like to see. however, since then we have seen enough of a pull back, and it brings us back total mega cap stocks and how important they are. we've seen massive outperformance from the nasdaq 100 versus the s&p 500, and that seems to be fleeting, and we think we'll see retracement. we've been talking a lot about sentiment lately in housing, and it's gotten what we call extremely greedy we can see it maybe yet in bitcoin. that greedy sentiment makes for a fragile -- as much as we've seen -- i would say it's more short term to medium term.

it's not yet impacting the long are-term gauges, so that does tell us the support levels are still very much realistic. i think 3200 is probably made less likely by what we saw in january, the 3800 levels that was tested successfully test still at relevant levels the initial support for the s&p 500 is around 3900, but it's not a major support level. that's a minor support level based on our cloud model there's an overhang of resistance on a longer-term basis. that's roughly 4228. so we're going to reverse the down trend technically speaking per that model we would need to see a couple solid above that level. >> i was i was wondering if you raise support levels, and it just sounds like you're

describing something that perhaps is higher highs, higher low, but still a trading range. >> that's right. they did but i would say a higher low that's closer perhaps to the lows than 3900. the nature of the 3900 support level, which, of course, rises over time, you follow that as a gauge of the intermediate trend and sort of the support going forward, so that's why support levels rise. so we revise them accordingly, yes there are variations in terms of how strong they appear to be. we do have a bit more of that speculative positioning underway here you referenced bitcoin and kind of looking at it, shakeses you're heads it has reclaimed the losses from this month we've seen a pullback, even though it's somewhat modest, but now it's sort of reclaimed after

of this in a matter of two to three days, which is remarkable really with that, we have bitcoin now going into some importance resistance of its own. 25,200 is the level we're watch i ing, and very simply, it's the upper boundary of the trading ranges we think that's overbought readings are a bit of a headwind and also the speculative positioning. and what makes it -- >> but once again, just like the s&p, probably not down to 13,7, in it does fail, you can raise the lower level for the bitcoin support as well. what do you think the low end of the test would be? >> we're watching in farther the

200-day moving average, and coming up -- that's just shy of 20,000 for bitcoin you can see how it great not the best profile >> 20,000 is a lot different than 13,800. >> for sure. >> thank you, katie. we'll talk soon. coming up a look at the morning movers. plus the cbo is saying the u.s. is on track to add nearly $19 trliilon to its debt over the next decade. i'll take the over

welcome back to "squawk box" here we want an update on some of today's top stocks on the move for that, we go to frank holland. >> in the quick-service restaurant space, shake shack, shares up 6.5% with revenues in line and smaller loss than -- than expect ed streaming company paramount global falling off top and bottom-line misses, the tv

media segment, the streaming service paramount plus beat estimates for subscribers. they got a boost yesterday, when filings showed that berkshire has more shares. cisco, the shares move higher an a beat on the top and bottom lines. they're as much as 8.5% higher yet. if the ceo chuck robbins said the supply chain issues we are continuing to ease, and demand was strong cisco also raising the dividend by 3%. coming up today right here on a first on cnbc exclusive, ceo chuck robbins will be on "squawk on the street" about 9:30 a.m. eastern to talk more about this quarter. becky, back over to you. >> i think chuck himself said the, it will be interesting to hear all of that

thanks, frank. we'll see you later. >> thank you. when we come back, january look it producer price inns detection. appeared the direct offer of the chron gressional budget office joins us on the newest warning he'll explain why. but next, head of a key house committee opening up a new onfrt against america's tech giants we'll talk about that when "squawk box" returns what if you were a global energy company? with operations in scotland, technologists in india, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world.

new hurdles from washington for wall street's tech titans. eamon javers joins us now with more hey, eamon >> good morning, joe new house judiciary committee chairman jim jordan fired off subpoenas to some of the biggest leader in tech, they're looking for internal communications and communications with any outside third parties. the investigation is based on the long-held concerning month conservatives that liberal san francisco-based tech executives may be using -- and amplify liberal ideas. the companies say they'll cooperate and a microsoft spokesperson says we have started producing documents, are engaged with the committee, and committed to working in good faith. a meta spokesperson says we have

already begun produces documents, and will continue to do so moving forward all of this follows on the heels of a contentious hearing we saw last week at a different committee house oversight in which the new republican majority there sought to expose twitters's role in the suppression of the hunter biden laptop story at the same time, on wednesday, "wall street journal" reported that the department of justice has ramped up work in a potential antitrust complaint against apple. that one would allege that apple abuses of monopoly power, and that follows an antitrust suit against google that was filed at the end of january a lot of pressure from both sides here on big tech another thing to flag for you, speaking of the department of justice, the deputy attorney general, lisa monaco is speaking in london at chatham how,

announcing a new initiative. it's a focus between law enforcement at the department of justice and the commerce committee, a new strike force, all about protecting american intellect why will property in regard to what they're calling disrupt imp tick knowledge they're looking at the supply chain for tech, protecting it from cyber-thieves, from criminal elements, from spies, autocratic governments they're also focusing on sipheus compliance if you're doing a deal in china, expect the united states government will look more carefully at capital outflowing from the united states to china. all of that a sea change in the way washington approaches china and globalization more generally. back over to you >> it's amazing, eamon we're so divided, that the two sides can't even agree on why they both hate tech. they're not even close. >> right

>> they hate them, but from entirely different directions. >> and if you remember the new math -- the part -- all they agree on is that they hate it. >> yeah. >> everything else is out here nothing similar as to why they hate it. >> so if you're apple, what do you do with that >> i don't know. you're getting clobbered for allegedly suppressing views, and also getting clobbered for being a monopoly >> right i think the answer will be they guys will spend more money in washington, just open the floodgates of cash >> like my twitter feed. they hate me from -- >> is that what it is? >> way too liberal, way too conservative -- >> i thought you were talking about opening the floodgates of cash i read your twitter feed all the time and don't get any money from it.

>> you know what i mean. my god, he's a right-winger, my god he's a communist you get both. >> as a reporter, you get criticized from both sides, you're probably in the sweet spot, but you develop a thick sin. >> or you're just always wrong. >> that's the other possibility, which i even admit to myself. >> i consider only one side an insult i won't tell you which. >> i have no idea which. [ laughter ] let's talk more about d.c. pressuring big tech and brings in anish chopra. he currently heads care of injury is this a situation of no matter what you do, you're damned >> the theater -- there is a quiet and strengthening movement that suggests we need to have

some pro-market, pro-innovation policies as it relates to gatekeepers on what was previously the open internet so there may be in the ven diagram that joe is outlining, i think that's where we put our time and energy. how do we ensuring the jobs and businesses of the future will be born on increasing gatekeeper-led platforms >> nobody would disagree with you when it comes to technology. it's just how you get to that. i'm not even sure what you need. >> here's a pragmatic point of view the app source, the apple case that was highlighted to some degree we're in a due oply, that's ram le only get apps through the big stores, but

what if i had the freedom to bring apps to my phone because i necessarily knew about them or friend shared. i don't need to go through the app store where they have terms and conditions that make it less financially advantageous to the app. if i had the freedom to use my phone in the way that i want, might i have more ability to find that next version of apple or google or twitter that's not yet the household name to some degree this is about our rights -- >> i get that, aneesh, but if you're not cutting edge for doing these things, i appreciate one place to easily find what i may or -- as a consumer, i think more consumers think it's easy, it's right here. i understand complaints from competitors that i want more of the mindshare and i don't want to pay you anything for it, but from the consumers's perspective, i don't know. >> listen, let's separate out

the ease of experience, which is i like to shop on the app store. that deserves compensation for sure the question is, to the extent that we have what i'll consider to be the more open connectors, so that if there are these early indicators, to test out what works, those may not necessarily be constrained by having to pay extra fees just to get access to basic features of the phone. what constitutes effectively the net neutrality for the got internet we were pretty clear in the 2000s, 2010s that we need easy access or open access to the pipes to our home. the debate mow is what does it mean to have open access to the phones there may be some mixture of consensus, and some political

pressure that gets us to a place that's a cake and eat it too option that's what i'm hoping for is a bit of a step in the direction of more competition. >> got it. aneesh, thank you. i think it's a very kind of difficult road to see through, and we appreciate your help guiding us through it. >> thank you. thanks when we come back, new inflation numbers. january producer prices in just a few minutes. "squawk box" will be back after a quick break. after college. ♪ finally we can eat. ♪ you know you make me wanna...♪ and then we looked around and said, wait a minute, this isn't even our stroller! (laughing) you live with your parents, but you own a house in the metaverse? mhm. cool...i don't get it. here's to getting financially ready for anything! and here's to being single and ready to mingle. who's ready to cha-cha?! ♪ yeah, yeah ♪

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welcome back to "squawk box. on cnbc. we're a little over a minute away from new producer price invasion and initial jobless claims they have got redder, down almost -- nasdaq off about of 3. the ten-year note, to memory, just under 3.8, 3.795. we have the two-year note right now at about 4.608 i wish there was a simple equation that could tell you

whether cpi translate exactly into ppi, but that could be totally different. you could have a hot number, a cold number, just right number, you can't really tell the relationship. >> they tend to move in the same direction, but they don't step in tandem. >> do i dare hope for a cool number i don't know time for the numbers we dodd don't knee to wonder anymore. >> headline number expected to be up 0.4 of a%. coming in hot. the best it's been was our last look, and that was down half of 1% if we consider taking away food and energy, it's still hot, up 0.5%

we strip out food, energy and trade, up 0.6, triple the expectations, and the high water market there in march also last year, 1.0. if we look at year over year, 6% on headline. we are looking from 5.4, sequentially it does follow 6.2, so it's lower. high watermark was 11.7, so 6.2, now down to 6.0, that is the lower year-over-year high water market we strip out food and energy, it's 5.4%. that high watermark was -- and 5.4 is the low since the high of last year. finally last year-over-year number, 4.5, expecting 4%. so all these numbers are hotter than expectations.

in the rear-view mirror it follows 4.6, the lowers since the high water mark since last year you looked at the housing starts, this sequentially follows a slightly revise the 1.371 million. on the permit side expecting a bit light. sequentially very close. if we want to put a percentage on these housing starts headlines down a little over 4%, it's high le close, call it up a smidge initial jobless claims, 170 -- excuse me, 194,000, 194,000. that follows 195,000 183,000 was where we finished january, that was the lowest since april of 2022.

continuing claims. 1,696,000, almost exactly on top of expectations. that follows 1,680,000 the fact is, under 1.7 is the way i would look at it, that's the easy way to tell last time we were over it was mid december of last year. finally, we now have six negative signs in a row with respect to our february read on philly fed business outlook. six months in a row with negative signs this one is minus 24.3 that is the worst level going all the way back to may of 2020, when it was minus 43.2 if we look at interest rates, we know it would be hotter than expected ppi, rates moved up, basically test the yesterday's high, preopening equities, we see the futures tipping down just a bit hovering around 34,000

if there's something important to say, this is the way i would interrupt it the month-over-month numbers like yesterday were hot. the year-over-year numbers were hotter than expected, but they were still the lowest since cycle highs in march of 2022, and i think there needs to be a built there, and if we trade above 382, yesterday's high yield, and we close above it, i really don't see how we test 4%. close today would be critical. back to you. a lot of numbers sorry, it was such a long, long, long presentation, but we want viewers to know all the complexities that go with this data >> i heard you a couple times go back to the march -- what year was that when we ahead those, did we know how hot those we are

as you point out, we were hoping for better news, but didn't get it when you look any big picture, the trend is continuing. i want to get to tease liesman now. you're looking through -- where are the problem spots? we had pepsi on, and pepsi and both coke said they aren't seeing any easing. is it lay costs in. >> it's still hot. let's start there. that's the obvious thing they had some relief on finished wholesale prices for finished consumer foods those were down 1%, and if you just squint a bit -- you do see some pipeline pressure easing, for example.

these senior well before they get to the consumer level. they were down 1.5%, but generally, rick, he sliced and diced the numbers six ways to sunday, and it's a pretty hot number i think you have to understand that what the fed has been trying to tell folks is it's not a straight line from here under low inflation. there's a lot of bumps along the way. it's going to be up, down. i think generally you have the strong numbers rick was talking about dropping out of the year-over-year comparison, that should help along the way. consumer demand remains pretty strong we had this very interesting debate in the 7:00 hour -- is the storm incorporating this new outlook for a more hawkish fed

what i did, joe, is i went back and looked at how the stock market has performed over this period of time that the market has increased its outlook. the funds rate over that period of time the fed funds outlet is up by -- the s&p is up by 6% over that period of time i don't know maybe it would very a lot higher, our maybe, as i think you were suggesting joe. >> that was my point the bond market and the yields are in sync, finally coming around, but the stock market is still resisting, it seems like. >> i don't see the resisting

markets don't forecast, and they priced in the here and now they priced in anything you see on the screens is good as right now. >> if it was always perfect, you wouldn't have 30%. >> it's not even useful. it's not useful to say this is what it is. >> we can all see where it is. we need to know where it's going. >> that's the only thing that's real >> it doesn't do us any good. >> right -- >> it's noose to have an idea. >> those are all guesses we never know until we're here and now. >> how much am i enjoying this

[ laughter ] you guys going at it, not me >> that still doesn't mean you drive forecasts to where it will be -- >> can i just say one thing, joe? >> go ahead, steve. >> the market has to also incorporate earnings, which maybe haven't been as bad as forecast, and the economy and the consumers which hasn't been as bad as forecast stocks have to incorporate. >> maybe it would have been 20% higher if we didn't see these rates. higher >> does the market holding up with this other bad stuff, is that a good sign, rick or is it a bad sign or is it just you're agnostic? >> you know what it means? it means in the united states, we see stock as a valuable invest from a global

perspective, even though most believe there is a potential recession down the road. the fed is hot everybody knows this there's no secrets. >> it might be worth 3200 on the s&p, but it's still a valuable investment it would be nice to know within 30% of what's, you know, what's good and what's not. steve, rick, thank you all right. coming up, an interview you don't want to miss, the congressional direo director much more "squawk box" is ahead.

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charlie munger answered lots of hours of questions yesterday from shareholders at the daily journal annual meeting he took a question about the potential for 1970s-style inflation today. >> investment life is there are headwinds and tailwinds. one of the headwinds is inflation. i think more inflation over the next 100 years is inevitable, given the nature of democratic politics politics in a democracy. i think we'll have more inflation. that's one of the reasons "the daily journal" owns securities instead of government bonds.

>> he wasn't very sure about the shorter term, but definitely down the road, he experts inflation to continue to climb here's what he had to say about the leadership of federal chair jay powell >> well, the way i feel about jay powell, i feel he's about as good as we have any right to expect i think he's honorable, intelligence and doing the best we can i have no feel that there would be a lot of other people that could do it better i'm glad we have him. >> watches the futures, that came out that immediately sent the futures lower. we've been flatlining maybe a little higher this morning when you numbers hit, that's when things tavlged dow futures off by about 200 points. s&p futures, if you're just tuning in, the ppi numbers showed that producer prices were

up by 0.7%, that compared to an estimate of just by 0.4% the yields have gone up as well. the ten-year is now well above 3.8% at 3.813, two years solidly, at 4.638% right now, we want to get back to steve liesman he has some comments from a fed official >> thanks very much, becky loretta messner speaking to the global talking about a super bowl metaphor, saying we are in it to win it we have more work to do. we will need to bring the funds rate above 5%, and reviewing that she supported actually a 50 basis-point rate hike at the last meeting, of course, when they raised by a quarter she said it's too soon to say that inflation is on a sustained path to 2%, and that strong

labor demand has been outpay -- more hawkish comments from another fed official >> we're down -- we're down 80 or 90, it almost looked like we had is someone anticipating or worried, and we're right to be worried. now we're down 200, and then mester saying she was in the 50 -- is it back on the table? >> let me answer that. i can tell you what the probabilities are right now. for may, you have only -- for march, a 7% probability of a 50,

and yeah, not much right now, just 7%. it's kind of off the table, but i wouldn't rule it out if things start to go north when it comes to inflation and, i guess, the economy. i think the fed really wants to do 25. >> when is that? >> march 22nd, joe then early may, may 3rd, then june 14th. so three meetings coming up before we take a summer break here i think the fed wants to do 25 they prefer that to feel their way, but they will do 50 i think what's happened is an understanding by the market that the fed is serious, and singular and monolithic about it. >> we'll have february inflation numbers by then, i guess >> yeah. yeah yikes. the treasury will exhaust

emergency measures to present a debt default as early as july, unless congress raises the debt limit. that's the new word from the nonpartisan cbo. they'll know more in april in addition, the cbo raises projection for the annual federal budget deficit over the next decade to close to $19 billion from a prior -- sorry, trillion -- as if it was only billion. joining us is phil swagel. we did $8 trillion since 2020.

it's hard for elelehman to understand, a, the extraordinar and b, what goes into being able to be exactly when we won't be able to use those extraordinary measures it has to do with tax revenue by saying july, you've giving guys to do more time they've said they're highly confidence, and after that, flect be highly confident. from july on, and it's -- you know, we go into the details, the outlay by budget line, by the timing of the yow lays, and then a projection of revenues.

that is the key uncertainty, revenues the i.r.s. will start opening envelopes when the bulk come in april, early may, and we need to see the strengths of those revenues >> phil,i know you're nonpartisan, but when you hear the president say, under no circumstances will will there by negotiations whatsoever, and then you hear speaker mccarthy say, well, you know, we aren't going to just give a blank check time and time again to the federal government, do you see how the two finally come to some agreement? do you think that people that want to be more fiscally responsible should use this at least to get the discussion started about where $31 trillion is going to take us in terms of interest expense and everything else >> yeah, as you said, we're nonpartisan, so i don't give policy recommendations

i can tell you there is a lot of focus on this. i think there's broad understanding in congress, both chambers, both sides, of the fiscal challenges we face. there's disagreement on when and how to address it, but i think that's the good news people are focused and understand this is a challenge >> and you know, we've seen it again and again. when they -- the other thing that the republicans say is, we're not going to default they say that. should we believe them, that they can wrangle some of the more, i don't know, some of the more hawkish members of the caucus eventually we're going to be okay, do you think, phil >> you know, i have faith in our country and our political system, in the leadership, even with all the division and kind of all the back and forth, i do have faith i can't tell you how we're going to get there, but to address the fiscal challenge, both the near-term one and the debt ceiling and the longer term one

of the adjustment, i have faith in our country and our ability to deal with it. >> people even disagree when we call medicare or social security entitlements they don't like that but when you look at interest expense and medicare and social security, we know what we're up against. so, that leaves us very little wiggle room on how to handle these things both sides have taken so-called entitlements off the table if we don't do anything, and you do some of your projections for the next ten years, isn't some type of action being called for right now, something that we need to do or else it's going to be even a worse problem? >> yeah. and you have put your finger on what i would say are the two key challenges facing us within the budget window, so inside ten years. one is rising interest payments that are going up sharply, both as a perspectcent of gdp and in dollars, and that crowds out

everything else. if policymakers want more tax relief or more spending, if they want, those interest payments will crowd that out. the second challenge is that social security, that we have the trust fund now exhausted within the ten-year window, so if nothing is done on social security, if nothing is done on entitlements, every beneficiary will see a reduction in their benefits of more than 20% from what's promised. so, doing nothing does not save social security. it does the opposite >> okay. right. so, it's going to cut itself if there are no -- it's like almost a catch-22. it's going to end up cutting itself if we don't address it in some way, but the politicians talk past each other and demagogue and point, and we get absolutely nowhere you need to be more partisan, phil i think you need to help us and stop being so objective. no, that was good. phil, we got to run. thank you. please don't use your phone. we'll call you back. we need to have you on depending what happens "squawk box" will be right back. futures nodo 2 pnt w wn60ois. there are some things that go better...together.

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well, the futures falling pretty hard following this hour's ppi data that was hotter

than had been expected, also followed up by new hawkish comments from the fed's loretta mester dow futures off by 250 points and joining us is the chief market strategist of carson group. ryan, what do you think? does this mean maybe the fed has more work than the market had been anticipating for the last six weeks or so? >> yeah, thanks for having me. good morning, becky. it could most of the inflation data has been positive. yes, today's weak. i just want listeners to be aware, this is the third best start to the year ever for the s&p 500 as of valentine's day. the second half of february into early march is a weak seasonal time after that strong start, maybe we could have a pullback, and think about this like all the valentine's day indicator, looking at the ten years that were better than this year started as of valentine's day, the rest of the year, becky, higher nine times, up 11% on average, only down once so, you know, the whole, so goes january, so goes the year. there's a lot of momentum. we've been saying, we're

avoiding a recession, look for upside, and we think any weakness, we would sure be buyers here, especially in a pre-election year. >> weakness, meaning, what down 250 in the futures? you mean, down 5% or giving back the gains we've seen >> great question. the s&p 500 is about 5% away as of last night's close. if we had that type of pullback, it's going to scare everybody, but that would be a really nice potential sign we don't think it would be much more than that, especially considering we kind of are on a waek seasonal period for the next three to four weeks or so >> what about this idea that there's a lag effect that we haven't seen yet, just in terms of how much damage to the economy, what the fed's already done is going to have, and if you're looking at another hike, that stuff starts to add up, and it could look scary for the economy. >> people are definitely talking about, but we're not seeing it yet. i get it carson group, we've been saying for a while, consumer makes up

two-thirds of the economy. consumer is really strong. what i really like the last two days, the strong cpi, what'd the stock market do? nothing. small caps led i know we're down today, but i just think the economy's still in much better shape than people give it credit for and that's likely going to mean we're going to have good equity returns when this year is all said and done >> what do you like best >> we like small caps. economy avoids a recession also cyclical value, sticking with those two groups, overweight those in the models we run for our partners at carson group, and we think they're going to do pretty well. >> ryan, good to see you thank you. final check now on the markets. just alluding to it. we're down 260 points. still orderly at this point. that's not going to spike the vicks, whether that's coming, nobody knows, but i can think it both ways. these are the coolest numbers we've seen since the hottest

numbers, but still much hotter than people thought, and anyone who thought that it was a slam dunk in terms of disinflation being here has to probably revisit that should be an interesting session. 167, that's a pretty big selloff from the nasdaq. s&p down 43. tomorrow's friday, so we have one more day to settle things. make sure you join us. "squawk on the street," meanwhile, coming up next. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, mike santoli at the new york stock exchange cramer has the morning off premarket really didn't like the macro today. appro ppi comes in hot, up 0.7, although the year on year is a fresh sicycle low. >> lot of fed speak. our road map is going to begin with the murky macro