who have been written in for the presidential election, and yours truly, andrew ross sorkin, was one of the write-ins in bergen county. i don't know who that person was. i want to thank them for your vote, and i appreciate it very, very much. >> you know, lee cooperman said mitt romney. i'd much rather have you. >> thank you. have a great weekend, everybody. "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david david at post nine of the new york stock exchange. futures wrapping up an historic week and a prior day session that almost got us to records. china stimulus underwhelms again. our road map begins with a big week for investors. dow s&p eyeing their best week

in a year. the fed cuts again, the chair stands defiant in the face of possible pressure from trump. plus china unveils a new $1.4 trillion stimulus package. it is designed to help shore up its economy, particularly at the local level, but it may be short of many expectations. and nvidia becomes the first company ever to hit a market cap of $3.6 trillion, closing at a record high officially joining the dow as well along with sherwin williams this morning. let's begin with this post-election rally and the china stimulus. jim, $1.4 trillion in a debt swap. people are calling it more stabilization than stimulus. >> i think that's right. i think that one of the things we keep thinking is that we're going to wake up one day and they will do something nuclear to get this thing going. they'll keep doing things until it does go. so, those who are playing this game, you probably want to buy alibaba because it's down,

betting there will be still one more. they'll keep stimulus going, carl, until they win, and they have a command economy, and i think we keep thinking that, well, it's one and done. david, they're in too much trouble to do one and done. you know that. >> yeah, but they're not doing what many had, i think, hoped when there was the initial pronouncements. >> you're right. >> and you have referenced tepper, of course, who was on our air that day. >> i'm familiar with his position. >> but since then -- >> i mean -- he's over in munich, by the way. >> getting ready for the giants? >> yeah, pretty interesting. >> since then, there hasn't been as much as might have been hoped based on the language at the time. now, this is designed to basically swap government bonds for some local debt and therefore -- and reducing the debt load, making it a lot easier and more transparent, clearer and helping the balance sheets to some of these municipalities, which have gotten overloaded with debt that they took on to help their own

economies when they were able to sell land to, you know, to meet the interest costs for that debt. that has stopped. but in terms of getting money into the chinese consumers' hands, we haven't done that yet. and i would reference richemont today and the luxury is going to be down again on this and it's largely because the specialist watch makers division at notably weakness in the greater china market. >> richemont was a way to be able to show you're wealthy since you're not allowed to show a big house. show a big watch. we see over and over again, carl, all the specialty -- everything that costs a lot of money that the chinese were using to show off, that's no longer flies. and i think they're not even -- look what happened to estee lauder. estee lauder was the -- i'm going to use this because it's a big hack phrase, and i like it. canary in the coal mine. that was the one that told you, well, you know what, the $30

mac, they're not going for that, and if you look at estee lauder, the evisceration of a great company, where it finally cut its dividend, that may be where these companies go. i don't feel like anyone's going to get bailed out by the government. >> interesting debate about u.s.-china trade. on the one hand, they don't have a consumer economy, so they need to protect their exports, right? they are going to have to make up for those tariffs if they come. on the other hand, we also rely quite a bit on chinese goods until we can make a lot of stuff on our own. so, who's first to get self-reliant? >> i think that there's this sense that there's going to be a 60%. my intel says that's absolutely untrue. it will be applied where it doesn't hurt us, and it will not be applied where it hurts. president-elect trump is not blind to what could hurt us. david, i know that there's a sense that what this president-elect wants is

hardline and ideological. i'm saying it's to be a deal that has to be made, and you know, that's his position. 60%. and then you work it down. it's "the art of the deal," which actually was a decent book. >> written by, who was it? tony schwartz? his co-writer. >> good memory. co-author, who ended up being a big trump critic. >> very critical of him over time. >> that turned out to be not a partnership. >> jim, there is an expectation that, obviously, we know -- it's not like this is new to us. he was president. we remember. he is transactional. >> he's a deal maker. >> certainly, and i think there is an expectation, perhaps, even on the part of the chinese that there will be something that can be done here in terms of quid pro quo that will not result in bringing the world's economy to a halt. >> let others do the -- >> jim, at the same time, nobody knows. >> i like being right. >> nobody knows. >> no, but some people have more intel than others.

>> some people will be surprised, and others won't. >> listen to him. sage. >> we also had a deal they were going to buy a bunch of our stuff. that never happened. >> where's soy? >> what happened with that? >> david, you know, it got kind of overlooked. >> it did. >> yeah. >> you know who could tell us more about this is eunice yoon, joining us from beijing. talk about stimulus and whether those china deals provide any kind of antecedent. >> well, you know, this long-awaited stimulus is not really stimulus in the traditional sense. the headline number is big. it's $1.4 trillion, but it really isn't meant to directly stimulate demand, so about 60% of it is a program for local governments to issue new bonds over three years, including this year, to pay off what the government has described as hidden debt. so, this is off the balance sheet debt that is unrecognized, and that has been a primary

source of risk in this economy. in addition to that, local governments will be allowed to issue more special bonds over five years to raise funds for the same purpose. the finance minister today also signalled that china was open to the idea of a larger fiscal deficit next year, so suggesting that we could see stimulus then. the stimulus in this package so far today is mainly going to be indirect, so it's a refinancing of the debt so that these local governments would have more cash to be able to spend. about $85 billion over 5 years. that's what the fitnnance minisr said, which he said would be helpful. the finance minister also added that new measures would promote state purchases to buy idle land and unsold homes, so that should, in theory, help the property sector, but overall, what this stimulus package was missing was really getting money into the hands of consumers and

companies to stimulate demand. that's what the market wanted, and that's why you saw a lot of the chinese-related stocks selling off today. >> well, eunice, one of the things that you taught me about this economy is when you hear $1.4 trillion over multiple years, that's just way too little, and i think that people in our country think, well, resolution trust was so much less. i mean, this must be big, but the problem is so much bigger than ours, and why is it that people don't realize that? >> yeah, well, i think that the policymakers might realize it, and -- but the signal that they're sending is that the priority is not growth as much as it is stability, and i think that fits into the kind of larger shift that we are seeing here where the priority used to be economic development, and now it's more national security. so, when you have risk reduction in the financial sector, coupled

with self-reliance, as you guys were talking about, that is all security oriented, and one of the other things that the finance minister was really pressing on, he said that the government here has zero tolerance for hidden risk, so the government is looking for ways to prevent any unforeseen crises because security is becoming much more paramount. >> how about taiwan geopolitics? how do you think that all ties in with this discussion, eunice? >> well, it's really very uncertain right now. i think that china is a little bit on the back foot with the idea that president-elect trump could be, you know, shifting things around. you guys have talked about trade and tariffs. there's a lot of concern about the 60% possibility of a 60% tariff on everything coming out of china, because the economy is already doing so poorly with the jobs market and the excess capacity issues, but in terms of

taiwan, that might be an area where president xi jinping would welcome, if there's any shift from president-elect trump, who's suggested that -- or at least signalled, perhaps, that he could have a weaker position on taiwan, which would be welcome in beijing. >> well, eunice, if taiwan pays the united states, puts in its fair share, then that pragmatically, a deal gets made with trump, then why wouldn't trump call xi and say, okay, listen, here's the way it's going to work. you touch taiwan, we will start something that you will very much regret, which has actually been the president-elect's way. >> i mean, it's possible, but i think this uncertainty is really leaving the chinese policymakers scratching their heads, watching and being very cautious in their response so far, but because president-elect trump has in the

past signalled that he could be potentially willing to cut some sort of deal on taiwan, he's criticized taiwan, you know, saying that they should be paying more or that they somehow ran off with, like, the chip industry versus the u.s., so because he has been suggesting that the relationship might not be as close as, you know, president biden has mentioned, you know, president xi, as well as the chinese authorities, could see an opening there. >> eunice, interesting times continue. we'll talk to you soon. eunice yoon in beijing with us today. when we come back, ev makers and elon musk in focus from tesla's big post-election rally to the latest results from rivian and lucid today. we'll get to draftkings, paramount, airbnb, expedia, pins, affirm in a minute. clem's not a morning person. or a... people person. but he is an "i can solve this in 4 different ways" person.

you need clem. clem needs benefits. work with principal so we can help you with a plan that's right for clem. let our expertise round out yours.

♪ ♪ that's right for clem. with so much great entertainment out there... wouldn't it be easier if you could find what you want, all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month.

tesla among this week's biggest gainers on the s&p, up nearly 20%, fueled, of course, by the president-elect's victory. that surge resulting in a windfall for elon musk, who now has a net worth of $290 billion. that's according to the bloomberg billionaires index as the stock gets awfully close to even the most ardent bulls' target of $300. >> i think it goes much higher, and i think that because, like palantir, this has become an adopted stock. i think we have to get a little more used to what was happening in the stock market. i think the people don't understand that it's no longer about divorced from the fundamentals. it's about how much certain people love a stock. and we've seen it with palantir, which is that no matter what is said, it's regarded as pertinent and positive, and tesla, i mean, i've been reading some article about how, well, you know, maybe he's doing china, doing -- getting -- currying the favor of the president-elect for china. give me a break.

he's a worshipped man in this country, and there is no pe to worship. david, that's what's going on, and we don't -- we keep thinking this market is like other markets. it's different. >> how is it different? what do you mean when you say there's no pe to worship? >> well, there are people who like elon musk, so they buy the stock of elon musk. they don't say, this is expensive. they just like him. djt. well, i like it. i'm just saying that we have a cohort of investors, david, who are not investors. >> yeah. >> they are fan boys. fan girls. and they are about buying a stock to be able to say, you know what, i own a piece of elon musk, and that's what it is. it's kind of like owning a piece of green bay packers. >> okay. >> okay? well, fight me -- >> i don't know how much time we've spent talking about tesla over the last year but an awful lot, and a i've never necessarily heard you say that. i've heard you talk about

robotics. we debated full self-driving and how important it will be to the company. we've talked about evs endlessly, but i've rarely heard you talk about the cult of personality being the reason. >> let's say i'm a younger person. thank heavens. if i were a younger person, do you think i'd be sitting here with you? do you think there's any sense that you might say, you know what, this guy has accomplished so much more than anyone. he's worth several hundred billion dollars. >> agreed. >> i want a piece of that. >> the stock has been dead money for three years. >> new ethos. new ethos. >> that's what's changed? >> yeah, the new ethos, and i think it's also part and parcel with president-elect trump. i think people feel like he -- not only did he help elect the president, but he also has all these cool things and he's got starlink, whatever. i want a -- this does not even include starlink. i'm just saying that we have to get used to a new kind of buyer in this market. a buyer who's not wedded to price to earnings multiples.

>> meantime, rivian, they did leave their delivery target unchanged, but b of a cuts on the notion that make for things x-tesla, red credits are at risk. >> that was a frightening note that people should really take very seriously, which is that if there are no credits, then maybe there is no car. what's difficult about this one is if that becomes the chatter, then people will say, well, why do i buy rivian? maybe i get stuck with a ricvia and it's an edsel. maybe there will be no repair shop. >> or hard to get parts. >> all true. but they haven't changed their targets. what are you looking at? >> i was looking at the rivian full-year earnings. >> the rivian release. >> yeah. >> yeah. >> well, i mean just -- i'm focused on rivian. >> as you should be. >> thank you. i'm just saying that you have a -- it's kind of reverse musk. it's like, rivian? well, if i buy one, will there be somebody who will fix it?

>> they consume an enormous amount of capital. that's -- i mean, they've raised an enormous amount of capital. what was their -- that negative, you know -- they got operating expenses in the third quarter down by $270 million from $963 million the same period last year. they're moving in the right direction in terms of expenses, but what was their, you know, their negative ebitda, some $57 million. >> i know. >> that's still -- consuming an awful lot of capital to get to the point where -- >> it's also why lucid's recent capital raise, they mentioned, is going to get us at least into '26. >> you have to do that because people do not want to own something where, at the end of the day, no one can fix it. i happen to believe in rivian. i know they've got the money from germany. i tell you what i do worry about. the average person going to the showroom and asking that question. how do we know? and they're going to say, well,

you know, right? >> that's why auto start-ups are so hard. >> they really are. that's why many revere musk in terms of what he was able to accomplish through tesla. >> how would you like to get a piece of him by buying tesla? no, i don't want to do that, it's too expensive. but who cares? he's able to make the money. well, i think you should think about price to earnings multiple. i want the guy going to the left, not the guy going to the right. >> that number we began with, i don't know whetherbloomberg includes the 303 million shares that he has yet to receive from the compensation plan that was voted in favor of by shareholders yet again last june. pointed out many times, chancellor mccormick has yet to sign off on that in delaware but that will increase his net worth enormously, adding to his already sizable position. what are you looking at? >> your label, for heaven's sake. oh.

not bad. >> that's in your neighborhood. >> yeah. you know what? you stepped up your game. what were you talking about? mccormick? mccormick spice? were you talking about the guy who won in pennsylvania? are you talking about the chancellor? >> the chancellor in delaware. just pointing out that musk is going to get even richer when that goes through finally. >> i want a piece of musk. >> we are going to keep our eye on the senate and the house as the count continues. little bit of a split futures this morning as we see some of the trump trades get a little exhati tayusonod. we'll keep our eye on it. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some research and called coventry direct. they explained life

insurance is a valuable asset that can be sold. we learned we could sell all of our policy, or keep part of it with no future payments. who knew? we sold our policy. now we can relax and enjoy our retirement as we had planned. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance.

municipal bonds don't usually get the media coverage the stock market does. in fact, most people don't find them all that exciting. but, if you're looking for the potential for consistent income that's federally tax-free. now is an excellent time to consider municipal bonds from hennion & walsh. if you have at least $10,000 to invest, call and talk with one of our bond specialists at 1-800-376-4376. we'll send you our exclusive bond guide, free with details about how bonds can be an important part of your portfolio. hennion & walsh has specialized in fixed income and growth solutions for 30 years, and offers high-quality municipal bonds from across the country. they provide the potential for regular income are federally tax-free and have historically low risk. call today to request your free bond guide. 1-800-376-4376. that's 1-800-376-4376.

take a look at the market cap of the most valuable company in the world. nvidia, $3.6 trillion, of course, going to get added to the dow today. we'll talk about the impact that's going to have on the index, at least, and the perception of jensen huang's empire. opening bell coming up in a few moments, and don't forget, you can catch us any time, anywhere, just listen to and follow the "squawk on the street: opening bell" podcas t.

it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow!

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. time for our "mad dash" as we get you ready for an opening bell to end a very busy trading week here. >> oh my. oh my. >> sweetgreen is a name, of

course, that you followed since it came public. you were correctly positive on the stock. >> thank you. >> from ipo. >> today, goldman pulled the rug under sweetgreen. they said, david, this is something that i think you'll like. they think it's now fairly valued. >> wow, it's having quite an impact. the stock was up on earnings yesterday. >> yes, i have them on tonight. there were ebitda estimates being shaded down. it's the infinite kitchen, they think, is maybe a little too expensive, david. this downgrade is heresy. don't -- why don't they get with the program? >> you're not happy with them. >> no, i don't like this downgrade. >> 75% move in one year? >> david, this is a great place, and people judge these things as who is going to be the next chipotle. >> okay. fair, but shouldn't an analyst be able to apply typical fundamental analysis and come to some sort of a conclusion, even if it's not necessarily one that aligns with your view? >> no. like jay powell. no.

i think it's a great company, and i think there's a good chance to buy it. not unlike when i said buy dutch bros when it hit $28. these companies are sticky, david, because you go, they've got multi-city road map, a really good model. >> they have a lot more room to grow? i remember him coming on. >> he's very good. they kept this company private for a very long time before they were ready. they did. that's antithetical. most people say, oh, let's go public. i think that what happened is when you get the stock to $42, i can see people saying, enough is enough, but then they come back like cava. they came right back with cava. >> it's funny, cava performed quite well. sweetgreen, and outside of this, i'm thinking of the handful of ipos that we focused on. reddit. >> steve is doing such a great job. >> we have yet to see any specific flow. >> that's why we like these. there's a scarcity value to these new companies.

and this company, when you go, and you look at the infinite kitchen, david, you say i want to buy something. i want to buy some of the infinite kitchen. i think it's a great company. >> let's get to the opening bell. at the big board, it's robertson ryan, a veteran-owned broker dealer, recognizing veterans day. at the nasdaq, krane shares, a.i. and technology etf. interesting, ark, with its best week of the year, ark innovation up 11. >> i know, and she was -- she was saying good things. i mean, i think when you think of the animal spirits and the, as david said, the divorce of the fundamentals, see, ark always plays a very solid role in doing that. very solid. >> yeah. >> if you don't care about the fundamentals, unless you want to do the fundamentals over the long-term, and i have found that to be, let's just say, a way of

investing that is good if you're, say, 18 to 20, because if you go down a lot, it doesn't wreck your retirement. >> people are still dissecting, jim, the wednesday rally. we had the s&p up 2.5 and only 70% of nyse issues green. does that worry you? >> no. it doesn't worry me, because what's happened in this market is you're worried, and then the rest of them go up, and you feel like, well, why did i keep people out? like the great midcap revolution. what happens is that you say, well, listen, the midcaps haven't worked so i got to be careful, and then they work, and they work because of something that david just said that's really important. there's a dearth of supply of new stock, but the buybacks have been incredible, and david, the s&p money keeps flowing in over the -- we just don't have a lot of stocks splashing around. if you want to go buy -- let's say you decided, i'm going to buy sweetgreen, it's down. you buy 300,000. next thing you know, it's up a dollar. there's not a lot of stock

around. we don't talk enough about how there's a scarcity. >> and if there is a boom in ipos, does oxygen get taken out of the room? >> i don't think there will be a boom. i think that there will be a select group of stocks that come public. >> this is the new reality. it's not just a slump, so to speak, that many of the bankers certainly hope, but it's -- >> i meet people who say, you know what, i don't want to take my company public. i don't want the scrutiny. i don't want to be regarded as being some rich person in an era where you can be targeted. >> i hear it all the time. >> you get it too, right? >> absolutely. there is a frustration with the -- amongst some who are public, in particular sort of a certain market cap area where you can't get the sponsorship, you struggle to sort of get a shareholder base that you really, you know, want, not to mention all the things you deal with as a public company. >> we got to convey this. >> and then there are the private companies are happy to stay private, not to mention, as we've said so often, the opportunities to gain liquidity however you may want it in

markets that didn't exist ten years ago, whether it's private credit or it's the secondary market for equity. >> larry fink told us the other day, again -- >> yep. >> you may be right, jim. we may simply be in a new era where companies don't come public at the rate they once did. >> i was with a prominent banker last night with a person who's bringing a company public, and the banker said, enjoy yourself, but once it comes public, get ready. get ready for the scorn, the difficulty of leading your life in a whole new way, and i think that people have gotten the word, which is that unless you need capital, whoa. >> if you can figure out a way to stay private, you may want to do it. >> you think a gensler type can change that if he leaves? >> when is his term up? he will leave, right? >> yeah. >> he's going to be replaced, without a doubt. >> he often mentions being a villain during this year, and i think he did his best. >> yeah. >> yeah?

what does "yeah" mean? >> i think he did his best, of course. i don't question his commitment to the job. he leaves in 2026. that's when his term expires. i think he did sometimes question how long he was in front of that fireplace. >> that was questionable. >> when the s.e.c. was actually coming back to the office. >> he ended up being the yule log right around christmas, he kind of ramps up. >> fireside chat every day. >> yeah. >> by the way, speaking of ipos -- >> don't you like my analysis, david? >> i love it, but i'm going to get back to the market. >> i was talking about the market. >> well, i'm talking about airbnb, and i want your take. >> i have my view. he does it every time. david, that's the game he plays. >> they missed earnings expectations. the revenue was ahead of some of the expectations of the analysts who follow the company. $3.73 billion. that was up 10% for the top line at airbnb. gross booking value also up 10% to $20.1 billion. they did have an 8% uptick in

nights and experiences and a 1% increase in average rates. we can take a look at the stock, though. it is down almost 9%. >> yeah. he did say things got better as the quarter went on. >> yes, he did. >> ended in the double-digit range. what's interesting is the split between airbnb today and expedia, which did raise, and then you add on top of that, jim, this morgan stanley survey of corporate travel, up six, going to be mid-single digits again, nearly half of respondents are above pre-covid. >> i heard when bookings reported, look, it's all europe. expedia's u.s., it won't happen, and then expedia puts on tremendous numbers. by the way, if we have a chart of expedia, this is another parabolic move. traffic -- travel is just still strong. it's royal caribbean. i'm wondering -- let me talk to the skeptic for a second. disney has six ships coming. >> they do? >> will they ship come in? >> six? >> six. >> that's a lot. >> they're like 10% of the

market. >> it's going to be here soon, i think. you're going? >> i think i might go. what is this "we," kemosabe? y . >> you and me. >> you just got in on my booking? >> i think i may have been there first. >> david, i will take everything, because i learn by example. >> yes, you do, and i know whose example you follow. >> we're going to get disney next week. and we got paramount to watch today. listen, paramount's getting bought. as we know, that deal continues to move along in terms of the regulatory review. you're going to see a close -- sometime early next year? let's leave it at that. kind of the same trends, though, overall, that we've seen for some time. the stock is down a bit. we all know linear cable networks, they're not doing so well, and they continue not to. the cfo talked about the profitability of their direct-to-consumer offering,

paramount plus, and set up for 2025. we do continue to expect the business to get to domestic profitability next year. that has been the target. they continue to maintain it in terms of, again, direct to consumer where they did increase subscribers and increased the overall price for a subscription. to paramount plus. so, you're going to have a big change in ownership there, and that's when it's going to get a lot more interesting, guys, in terms of what david ellison and jeff shell will do in terms of managing that company in a way that they will certainly say has not been the case for these media companies. >> linear. trade desk being streaming down badly today, i went over what jeff green said in a really fabulous conference call, and i say those who are selling that down 14, that reminds me of the sellers of arm yesterday. remember, they were selling and selling and selling? and then rene haas came on and

they were just chumps? the sellers were chumps. jeff green is bankable, and there's a great part of there where they talk about the google, the lawsuit with the justice department, going to go jeff's way. i don't know. he's got ten ways that he's going to win, and they're selling the stock. i suggest they read it. >> which stock are we talking about now? >> trade desk. you mentioned linear. i switched to streaming. >> i think they didn't quite catch up with you because you suddenly went to jeff green. >> i was with you, jim. i heard you. >> i didn't. sorry. >> okay, and then lamar passed it, but you know what? chase got it and then chase brown got it and every chase got it and they still lost. they still lost. good -- >> that was thursday night football last night? >> no, i was speaking about what happened in the conference call. >> so, your point here on trade desk, jim, is that you'd buy it on this because it's similar to the move early that arm made yesterday? >> well, that would be fatuous. i'm just saying that it was a really good quarter, and

people -- historically, the stock has sold off because of the valuation and then people realize, wait a second, they're doing such a good job in linear, let's just go along. new clients. fabulous new client list. i really like it. i think jeff green -- i was telling people in the justice department, you say that you got -- that google's a monopoly. have you seen jeff green? have you seen what trade desk does? they don't read the conference calls. the only people who read the conference calls went, oh my god, david, you'll love this. the capri tapestry, the judge read the conference calls and the conference calls were basically just -- and the notes. they put out notes like, we can own the accessible market. don't put that -- if you're buying someone in order to have a little, like, monopoly thing, don't put monopoly unless it's the game, monopoly. >> the discovery gets you every time. >> yeah. do not pass go, man. >> no, the discovery gets you every time. >> discovery. discovery. how's discovery doing? >> we talked about warner bros. discovery yesterday.

today, it's retreating a bit. >> how's it doing? >> significant gains yesterday on hopes of consolidation, which, by the way, you're talking about the ftc's victory in tapestry capri, but i said minute one on wednesday, and everybody else has been talking about it all week, we are going to see what appear to be a wave of m&a, the likes of which -- you know, so much pent-up demand and so much need in certain industries for consolidation. it's going to be very busy. it is going to be very busy. oh, by the way, speaking about paramount, don't forget, ben affleck and gerry cardinale joining me on stage. affleck is an amazing businessman in addition to being a great director, writer, star. >> okay. >> all right. let's move on. >> okay. >> speaking of consolidation, the kre, best week of the year.

>> i know. >> nice piece out of maike mayo this morning looking at how the trump 2.0 era will be a sea change for the banking industry. >> when you get together with bankers, they were so always afraid to talk about how good things were because they were afraid to draw the wrath and ire of the regulators. david, wrath and ire are done. >> they are? >> in praise of banks, in praise. >> you trying to do a little shakespeare for me? >> no, it would be somewhat more b biblical. >> i love this line in the "journal." a top m&a banker said he was personally disappointed by the outcome, but as he sat on the couch and watched the results come in, many of his clients texted in elation. >> there were some good parts of that story. >> you know, wells fargo had been one of my biggest positions and that's got that salary, you know, the cap, the investment

cap where they're not allowed to be as good a bank as they'd like to be. that's been hanging around there since february of 2018. janet yellen put it on and yellen, what was she? she was -- i saw -- what was it? treasury. treasury. that was a -- i knew she was treasury. she was trying to get -- >> you have an odds-on favorite for who's going to get the job? anything you're picking up in your network? no? okay. you're mum? you're still hoping it's you? >> great piece today, jim, looking at the people clamoring to become power brokers in this new administration. >> this is amazing. >> we mentioned lutnick, gary cohn. >> they're coming out of the woodwork. >> jay clayton. >> i'm going -- i'm putting him at a very high level in this next administration. >> john paulson will conceivably be treasury secretary. >> i thought that the rap was that nobody really wanted to be with the man.

that's been proven to be incorrect already. already. >> true. >> right? >> it does appear to be the case. >> they want in. now, what's that? >> that was good. keeping an eye -- you know, i got notes here. i still go old-fashioned. >> how about fanny and freddie? >> did you see that? >> don't look at mine. >> i didn't know you could read my writing. >> that was bad. >> fannie and freddie are interesting to me because i have been following them for so long. the preferreds, if you haven't focused on this, and why would you, have gone up dramatically over the last few days on a trump victory. at the end of the last trump administration, there were real attempts being made by secretary mnuchin, treasury secretary mnuchin, and by the way, a steering committee that included none other than john paulson, who's a huge holder at his fund of the preferreds to take this thing out of conservatorship. they didn't get there. so, the thought is that when it comes to the preferreds of

fannie and freddie, and we may have a chart for you, they don't come up that easily, they are up dramatically. it won't happen immediately, but certainly there is an expectation that they will be taking out of the conservatorship and become, by the way, public companies. >> oh, god, again? so they can be bailed out again because we just -- >> they will be well capitalized. and i did want to clarify something i said at the end of a broadcast the other day. under the obama administration, all the money they made went into the federal budget. it was essentially a nice deficit reduction tool, if you want to call it that. but since the end of the trump administration, i believe, they've actually been retaining their profits. that helps the balance sheet. that means when they do go into the capital markets or become public again, fannie and freddie, conceivably, they will not need to raise as much. there's various preferreds, but you'll have conversion of preferreds to common. we'll keep an eye on it. it's something we'll follow as things go along, but as we talk about an incoming administration here, certainly that's one.

now, john paulson's role would be interesting if he were to become treasury secretary because of course his firm holds, i think, as much as at one point as $4 billion, face value, and this thing was trading at 15 cents on the dollar at one point. face value of preferreds. that's all i would to say. no charts to be able to bring it up with that. >> i see you that and i raise you with molson coors. liquor's been one way the whole way. so, fannie, freddie, molson coors. >> thank you for that. >> i like to bring it. >> yep. yep. tap gets upgraded to overweight over at wells. we haven't done affirm, which did beat on sales, offer net, the percentage of u.s. gmv now in e-commerce is almost 8%. >> i know, and i think that max levchin, his stock has gone up a great deal, so you got to sell the good news. like us, a lot of the other

stocks that i'm seeing, like a trade desk, let it come in and then buy it because these stocks don't sell off very often, and everything is really fabulous. some people say, wow, it's down, i guess something's wrong. there's nothing wrong with affirm. it went up a lot. people are taking profits, and then you got to go buy it. max levchin has proven over and over to be a winner. >> toast has gone up and is going to add a little bit more. >> there's a lot of shorts in toast, thinking that the restaurant industry isn't strong enough. oh my god, there's so many shorts in that. it's actually a technology play. it's a good company. i was doubtful one time, and then i got in that restaurant biz, and it's pretty good. toast is a good company. >> i know you've talked a lot about pins over the years. and they use up 11. they guided below at the midpoint. >> yeah. i was disappointed in the guide, because it gave me -- i don't have enough to hang my hat on with that. the ones that did get -- the ones that got it down, i mean a

real guide down, are very hard and problematic to get behind because there's so many that have actually said good things. so, i wish i could be more pins, but instead, i'm more reddit. >> i wonder if you're looking at really dramatic thematic plays, geogroup, yesterday, jim, as we start talking about private prisons, deportations, detentions, this name has soared in the last couple of days. >> there's always the idea that the president-elect thinks that the government can't do as good a job as private. >> this is ticker geo, by the way. >> you got to be careful of those because they need a lot of new prisons. you can't just make it from existing prisons. you need new prisons. prisons are expensive, and they just don't have the horses very often. they don't have enough prisons. david, the whole prison business, so to speak, requires lots of money, and states saying, we got to build more prisons and then privatize them,

and that tends not to be the case when the states don't have all that money. >> there was a boom period for private prisons. >> then there was a bust period where if you stole less than a thousand bucks, it was catch and release. not unlike the pond i have. >> right. >> actually, i saw a guy was stuck -- pulled a knife, stole money right in front of me. he was in front of me. >> i think there was a proposition in california. >> he cut in front of me, and the policeman, i said, why are you letting him go? i just saw him. maybe we testify. and he said, do you like to fish? i said, yeah. he goes, we got catch and release here too. >> take a look at bonds this morning as we got all-time highs on the dow and the s&p. 5,985. we'll get umi ch in a few minutes, and then bowman will talk at 11:00, give us more color on the fed decision yesterday. stay with us.

(♪♪) (♪♪) (♪♪) everyone has goals and dreams. and everyone deserves a way to get there. wherever you're going, getting there starts here. state street invest in your future with dia, the only etf that tracks the dow. (♪♪)

(vo) this season, try opendoor's turducken of offers. the only etf that tracks the dow. at the center is our all-cash offer. then comes the option to list for more. all wrapped in the certainty of a simple sale. this holiday, sell your home your way with opendoor. [ screeching ] [ chuckling ] [ vocalizing ]

that's a choice. [ vocalizing ] think of what we could do together. good morning, and welcome back to "squawk on the street." i'm sara eisen live today from the famous pebble beach golf course, hole one, not for golf but to talk to some of the biggest names in technology, media and banking. this is the site of citi group's tech and media conference, and we have a lot to talk about with some of these top ceos. the new outlook for the u.s. economy, regulatory agenda, which will affect everything from ai. we'll talk to the ceo of ibm about that, to financial markets, we'll talk to the nasdaq ceo about that. cyber, palo alto , to telecommunications and of course the host, jayne frasier, ceo of citi, her stock is up 7% this

week alone about everything from regulation to the fed. that's all coming up in the next two hours of "squawk on the street." we'll be right back. tamra, izzy and emma... they respond to emails with phone-calls... and they don't "circle back" they're already there. they wear business sneakers and pad their keyboards with something that makes their clickety- clacking... clickety-clackier. but no one loves logistics as much as they do. you need tamra, izzy and emma. they need a retirement plan. work with principal so we can help you with a retirement and benefits plan that's right for your team. let our expertise round out yours.

at way star, we passionate believe our software has the power to transform health care in the united states. look forward to supporting wave star's mission to make health care payments more human. way star is purpose built for this moment and for what lies ahead. we see the way forward.

jim, what's on tonight? >> bought a lot of stock at 22.6. there's no doubt he watched "squawk on the street," and he said i better buy some. >> that was the main factor in his decision. >> definitely. and that's because i'm a self-agraded son of a bitch. i think people have realized it's come down many times. and christine barone who stopped the willy nilly building of dutch bros and became targeted and is a hero to those of us who say please don't destroy a new company trying to please wall street. you please main street, and look how your stock does. she's sensational. >> next week, 11 s&pers. disney, adm, a few others.

>> they're trying to get their act together. disney, i think david and i are taking the cruise, cruise to nowhere, partner. >> is that soon? >> we're going to sit in the harbor. >> why not? maybe they have good shrimp. sometimes they have good shrimp cocktail. that's all there is to do. >> there you go. >> we'll see you tonight. >> have a great weekend. i'm going to dallas to see the cowboys. say hello to jer. >> have a great time. >> that catch was incredible last weekend, yes. dow is up 131, all time high, s&p going to make another run at 6k, also all time high. stay with us.

good friday morning. welcome to another hour of mosq "squawk on the street." i'm carl quintanilla. did david faber, sara eisen,

some big interviews, citi's jane fraser, ibm, and a lot more over the next couple of hours. all time highs for the dow and s&p. we're keeping our eye on a potential six handle, best week of the year for regional banks. some of the movers, china announcing $1.4 trillion stimulus package over five years to tackle local government debt. the panel falls short of expectations. capri holding, monster beverages, down on weak demand. nvidia and sherman williams join the dow today. nvidia is the first company ever to hit a market cap of $3.6 trillion. let's get consumer sentiment with rick santelli. hey, rick. >> indeed. now, these are november preliminary. in a couple of weeks we'll get different numbers. we'll update them. what's important here is a real mixed bag. pay attention, headline number, much better than expected. 73. it's about 2 points better, and

sequentially higher than 70.5. that's the strongest since april of this year. now, if we go to current conditions, it's coming in on the light side at 64.4, it's the lightest since september, on the expectation side, much stronger. 78.5. this is about 3 points higher than expected, and sequentially, really powerful versus 74.1. 78.5 would be the strongest level going all the way back to july of '21. now, the inflation data and here's some surprises. if we look at the one-year inflation rate, it moved down, again. it's been steadily coming down. it's not near 2%. but it's getting closer. 2.6. it's 1/10 cooler than the windshield, 1/10 cooler than the rear view mirror. since 2020. i want to let you know that the last couple of months, event a 2.7 would comp to the same as

2020. here's the other direction. it was one year went down, five to ten-year went up. 3.1%. we're expecting 3 rear view mirrors, 3.1. it equals where we were in september, to find a higher number. you have to go to last year, november, when it was 3.2. as we watch the market, not a huge amount of change. we're actually seeing the long end continue to drain on yields a bit. and our comp was last week at 438. that was jobs, jobs, jobs report when rates went up. we're basically down ten basis points in a ten-year. lots of curve movement. carl, back to you. >> rick santelli, important numbers. we'll chew on those throughout the hour. let's get back to sara in pebble beach, talk about what's on the way? >> couldn't ask for a better time to talk to some of the top ceos in specifically the banking and tech sectors. these are two of the best performing sectors in the market

this week, post trump win, but also year to date, it's top three performing sectors. so really excited to hear from citi group's jane fraser this hour about what she expects now that trump is going to be back in the white house. everything from tariff policy to the regulatory agenda. by the way, what also is going on with her own transformation in the bank, the stock is very much outperformed over the past year, and questions about ai, what that looks like under a trump administration. the ceo of ibm is going to join us with an outperforming stock on the year. excited to get to big picture questions, now that we have a completely different outlook for the markets and the economy and the federal reserve. there's something to talk about here as well, carl and david. i read the fed transcript, the news conference transcript three times, and i still could not tell you if there was a hint about what he was going to do in december. clearly they still have an easing bias. they're in that mode. but fed chair powell, many

times, spoke about the strength in the economy, and said that we're not in a hurry to do something. what is the market telling us this morning, well, still more than 50% odds that the fed cuts again in december. but those odds have come down from last week. and the odds of next year, there's only a 100% chance now that they cut two more times next year. and then maybe three. odds are around 50%. i think it will be interesting to see next december, where they had their own forecast. in september, guys, they expected four rate cuts in 2025. trump coming back into the white house, and improved economic outlook, based on deregulation and lower taxes. one thing we got for sure ch clarity on is the defiance of fed chair powell that he will not step down if asked. a simple no on that. that was probably the biggest news of the conference. and doesn't think it's legal for him to be rufemoved as well, ife

does come under scrutiny and attack from president-elect trump, as we saw in the last time. the only other thing i would watch going forward here with regard to the fed is these bond yields. as rick said, they're coming down. the move up in bond yields since the fed cut 50 basis points in september has been interesting. usual when the fed cuts, fields come down. they have gone the other way on a stronger economic backdrop and an improved economic outlook. here's what fed chair powell said about it yesterday. >> we have watched the runup in bond rates, and it's nowhere near where it was a year ago. the long run rates are well below that level, so we're watching that. things have been moving around, and we'll see where they settle. i think it's too early to really say where they settle. >> i'm going to say he was a little dismissive of it because it could be a problem if it starts to restrain, restrict the

economy. we have seen the move up in mortgage rates, for instance, since the fed cut, since the election. diana olick has been covering that, carl. and so that will be something to contend with for the fed, possibly, and for president-elect trump as well, if he wants to sort of stimulate the economy. lower rates is key. >> yeah, but, you know, listen, obviously the fed is data dependent, and it's a lot to be seen what will happen under a trump presidency. but, sara, we have talked about the inflation narrow impact of potentially across the board tariffs whether they be on china or across the board for every country. higher deficits conceivably could have an inflationary impact, particularly if you get the extension of the trump tax cuts and further tax cuts. i would assume a lot yet to see in terms of next year when it comes to what the fed will choose to do. >> right. and fed chair powell, wouldn't tip his hand one way or the other. they're not going to prejudge what president trump is going to do, and certainly not out loud,

and talking about it, and clearly that will matter. are the tariffs going to be across the board. last time around, they were more targeted, the tariffs, and they didn't have an inflationary impact. that very much is a question. if we get blanket tariffs, 10 to 20% on all the imports coming in from overseas, consumers will no doubt feel that, that will result in higher prices, but will it be offset by lower taxes, lower corporate taxes in particular, deregulation, if that is aggressive, i think the market is telling you that they're pretty optimistic on the overall economic outlook, on the trump presidency, and, yes, powell is going to have to be data dependent and watch it. but the yield story is something to continue to watch, and what that tells us and how much higher those yields climb as we hopefully hear from president-elect trump, and he outlines more specific plans. >> yeah, which is interesting watching the ten-year come back to 427, even with that

discussion continuing, sara. let's continue the conversation about the broader markets, dow, s&p, nasdaq, all fresh, all time highs as the post election stock rallies continues as the fed cuts race. bob dall, and ernie tadeshi, lab director of economics joins us, and former chief of economics at the white house council of economic advisers. happy friday. great to have you with us on an eve eventful week. the list of bull food is long, seasonality, fed cutting with stocks at you will a time high, double digit earnings growth, tax cuts, deregulation, is the risk that the economy gets too hot, is there risk at all? >> yeah, there's always risk out there, carl, as you know, and you just mentioned double digit earnings growth, well, the consensus now for this year is down to plus 9%. it was not that long ago plus 12 for quite some time. estimates are coming down a little bit, if you're asking me to be the bearer, i would throw

12,000 new jobs last month, got overshadowed by the election when it was reeleased last fridy and revised by 130. the tail winds are good as a result of the election but it's not a perfect world out there, and valuations suggest it better be close to a perfect world. >> right. ernie, there is the additional bull argument that hiring and capx was waiting for the election to pass, making sure we didn't descend into civil discord and now that that's done, you know, you've got a green light. >> yeah, so i think that in some ways, this was a risk on outcome in the election. so we're not going to see the, you know, the, you know, the electoral risk that some had feared. i think 2025 in many ways will be bullish. but there are some medium-run head winds that remain to be seen. i think in terms of fiscal outcomes, this was the worst

outcome for markets, having unified control. you know, it's the worst for fiscal discipline, and i think that's what you see in bond markets with rising yields. they're worried about fiscal deficits rising, and they're worried about unchecked, you know, meniscal fiscal legislati out of congress. they're worried about the direction that tariffs are going to go in congress and out of this administration. i think there's still a lot yet to be seen coming out of this administration, and markets are, in a sort of wait and see pattern right now. >> ernie, you know, i don't know that there's been any work done on this specifically in terms of this campaign promise ofmass deportations. and what that would mean. but, you know, i know the president-elect has reiterated that, i believe, to nbc news as recently as last night.

do you have any sense for if, in fact, that were to be the case? we're talking many millions of people conceivably, what the impact might be? >> yeah, so, look, you're talking about literally reducing the capacity of the american economy. you know, i think what is often not appreciated by people who advocate for that policy is that, you know, immigrants in this country support the businesses of native born workers as well. if i'm, you know, if i run a construction business and i depend on immigrant labor, i can't run my business at all without that labor, and if those workers are deported, then i have to lay off my native born accountant, my native born manager, and i have to close down my business as well. and immigrants provide both supply and demand to the american economy, so it's, you know, one of those cases where the medicine might be worse than the disease in that case.

and that's a whole separate question from the immigration system itself, which clearly needs reform, and you know, really needs some bipartisan focus over these next four years, and i hope it gets it. but just in terms of the economics, it would really be def s devastating to this economy if depor deportation were the policy being pursued . >> bob, on that point, there is a school of thought, why would a president trump shoot himself in the foot in aggregate on labor supply. why would he threaten fed independence and powell's job with the risk of unleashing the bond vigilantes at a time where he's trying to build on what's already been built? >> there's no question the politics of this can be conflicting with the economic reality. i think what he's likely to do is quickly shut the border, maybe deport convicted criminals. that will get a lot of attention

and headlines, but mass deporting everybody that showed up illegally is a tall, tall order physically, from a cost standpoint, and as ernie just pointed out, from a supply and demand of labor standpoint. >> bob ernie, we're going to be having really interesting conversations in the coming months, hopefully with your help. thanks, guys, have a good weekend. let's get to sara now in pebble beach. >> when we come back, we're going to talk to jane fraser, the ceo of citi group about how her expectations have changed for the economy, regulation, policy, now that president trump has had that extraordinary victory and the shifts in congress. we're going to talk to her about o r transformation of citi grgroup and what more she has to do. that's all when "squawk on the street" comes right back. you can sell your policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought

we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some research and called coventry direct. they explained life insurance is a valuable asset that can be sold. we learned we could sell all of our policy, or keep part of it with no future payments. who knew? we sold our policy. now we can relax and enjoy our retirement as we had planned. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance.

jen b asks, "how can i get fast download speeds while out and about?” jen, we've engineered xfinity mobile with wifi speeds up to a gig, so you can download and do much more all at once. it's an idea that's quite attractive. or... another word... fashionable? i was gonna say- “popular! you're gonna be pop-uuuu-larrr!” can you do defying gravity?! yeah, get my harness. buy one line of unlimited, get one free for a year with xfinity mobile. and see wicked, only in theaters november 22nd.

welcome back to "squawk on the street," we are live from citi group's tech and media conference from pebble beach, california. our next guest here to success everything from yesterday's fed cut to the expectations for the incoming trump administration, shares of her own company, trying for their best weekly performance this year. citigroup ceo jane phfraser, th host of the meeting joins me. welcome. >> it's wonderful to have you back for the second time, thank you for joining us.

>> thank you for doing this a few days after the election. we've got a lot to talk about now. i am curious. financials have been some of the biggest winners post trump reelection. your own stock up 7% this week. does that make sense? >> it was a good week in the markets. and it's on the back of a quick, a clear, and a decisive result, which i think really helped drive what was an anticipation of a pro-growth agenda, and we saw that clearly as beneficiaries in the bank sector. small and medium-sized companies as well the tech stocks today. >> does it change the outlook for your business? >> we are expecting some lighter regulation. we'd already been having some pretty constructive discussions with chair powell, and we're headed, i think, in a better place. that will help access to credit. that will benefit the consumer, that will benefit smaller and

larger companies in their access and cost of funding. so we're expecting broadly this to be pro growth and beneficial. >> i'm curious what happens to basil 3, the originally proposal was the 19% increase in capital, came back with 9% increase in capital. that didn't pass. what is your expectation at this point? that it gets delayed further? could it go away? . >> there are a variety of scenarios that could play out here. we will have to wait and see what happens. but our expectation will be that it will be the lighter version. any bank ceo will tell you we feel very well capitalized indeed. >> the lighter version of the increase. >> i would expect a lighter version of the proposal. we would hope so, yes. >> what about the cfpv. i imagine you're looking for a change there. i wonder if you think it's realistic to expect a roll back of, for instance, the late fees rules, and how beneficial that would be for you. >> as always, personnel will

drive policy, as we have been talking about this morning. we'll see who are the individuals that are chosen, what will their policy agenda be? we'll just have to wait and see. but a lighter environment on that front, and i hope that will help drive competitiveness. we feel the u.s. financial system, it's the best in the world. and we want to make sure that it continues to be competitive and a global strength for america. >> speaking of the best in the world, there is a question mark of tariffs. president trump throughout the campaign has been pretty clear and consistent that they will increase, and you are the most global bank. i'm wondering how you expect that to influence the global economy, and the u.s. economy? >> what we've often found is that what's said and then what actually happens tends to be more of a negotiating ploy to get certain expectations too high, and then we'll see what actually passes. these things take time. tariffs, tax policy, they don't

tend to happen overnight. this is going to take a bit of time to play out. there will be some winners and losers. at the end of the day, the goal there is to drive more activity into the u.s. so i think for the u.s. broadly, it will be beneficial. but we have to wait and see what the actions are. >> on our panel last week in riyadh, you were fairly optimistic and positive on the u.s. economy. does your outlook now improve further. has it changed? >> the u.s. economy is resilient. it continues to surprise to the upside when we look at the third quarter. it's a combination of push and pull factors here, and i think some of the pull factors will be amplified. on the push side, europe is not that competitive. we're seeing it really struggling to get out of s sta stagnantcy, and there's not as much confidence that they will be able to execute against it.

we're seeing questions about the stimulus being enough in china to drive growth, so a lot of roads lead back to the states in investments, and then, you never bet against the american entrepreneur alive and well as we see them here today. it's not just this sector. it's in health care, it's in energy. it's in all the different industries with tech adjacencies. the u.s. has had a number of incentives that have been pulling investment in. broadly, i feel pretty good about the u.s. economy and the prospects ahead for continued investment. >> do you think that regulation during the biden administration has been holding us back and that it could unleash even further activity? that's what the market is telling you? >> i liked a regulatory framework, i think we'll certainly help ensure the different industries where the u.s. is leading globally can continue to do so. >> the u.s. consumer, we got a good consumer confidence read.

spending appears strong, you have a good window. what are you seeing? >> i'm encouraged on the consumer front. we're seeing a healthy balance sheet for most of the consumers, the delinquencies that were rising have stabilized. spending is growing. in some areas, the consumer is being more mindful about where they're spending, but i do feel good about them. labor markets have been strong, and i think the prospects here are pretty positive. >> what about your own transformation that you have been doing at city, where we spoke about it last year at this conference. you're well into it. where are you right now as far as progress? >> the third quarter results we had were very strong. i think the proof points is working. revenues in every business were up. we had positive operating leverage in every business. we had market share growth in banking, in equities, in cash management, in securities

services. our wealth business which had a lot of eyes on it showed very strong momentum, both in terms of revenue growth, good improvement in margins. where he saw very strong investment flows coming in, so i like the fact that those core drivers were important proof points, again, for our investors, and then we were innovating, that we did one of the most exciting deals of the year as the sole adviser with mars kellanova, we announced a $255 billion private credit partnership with apollo. a lot of opportunities for our clients. where do we stand on the transformation, you see a ceo who wants to thank her people. they're working incredibly hard and they're delivering. >> since you mentioned the progress on the quarter, the stock was down because there was confusion about regulation. you had to come out on the call and say that you are not under a new asset cap after senator elizabeth warren expressed some concerns. can you address those investor anxieties about regulation?

>> we are not under an asset cap. we are modernizing our bank. this does not happen overnight. a lot of different work we have to do to address the regulatory issues are beneficial for our shareholders at the end of the day. it's about driving more modernization, a modernization of our infrastructure risk and controls. >> has it been holding back your progress on the transformation that the regulatory fines? >> you would rather not be under a regulatory order, but there is a good synergy here. these actions that we're taking will transform the bank. they go well beyond the regulatory order. we have simplified citi. we know what we stand for. we have set a clear strategy. the strategy is delivering, and we're modernizing the bank. it doesn't happen overnight, but we are making good progress. >> i wonder if you think it will be easier to get rid of those consent orders under

republican-led regulators. >> we're going to get our head down and get on with it. we have a job to do. we're getting the job done. >> you mentioned the pieces of strategy and the businesses where you have seen results, capital markets, for instance, investment banking, what's your outlook for the rest of the year and into 2025? >> we have a -- we see a good, positive outlook. the pipeline is strong. and i think now it's game on in areas that have been more restricted. we're expecting to see the return of the sponsors in a much more meaningful way now. we have been waiting for that. that whole ecosystem has been rather gummed up. and now with the valuations that we're seeing and with the markets very much open for business, i think we can declare the sponsors will be back. >> private equity? >> private equity across the board. we've got many of the key sponsors here at the conference, and i could see them last night. they're active. they've got a lot of energy about them, and they're ready to do business. the same with the corporates.

and m and a is up materially, expecting to see that continuing and some. very active in tmt. very active in north america, and then financing, a big year this year for investment grade debt. now we're seeing much more of the leverage finance opening up as well. so there are two years with a tough wallet. now i think it's game on. >> yeah, i mean, i wonder if the election helps those prospects. >> i think unquestionably it helps those prospects. >> just having the certainty and the change in leadership. what about the wealth business? you mentioned some signs of progress there, but still questions about how to boost the profitability. >> yeah, we had very good progress on the profitability. we're heading in the wealth business with a 25 to 30% margin. we're looking at changing the mix on the buildout of our investment platform.

we had big inflows of investment assets this year, and we're just going to keep on building. we have a wonderful platform globally. and it's really showing the results. >> and then in the consumer business, i mean, tough competition, bank of america, jpmorgan, especially when it comes to return on equities. so what is your plan there and does it involve opening more branchs? >> the cards business is one i'm very excited about and the strategy. we have been making a lot of investments in innovation. a lot of engagement. we have been coming out with new and refreshed product offerings and we've got some fantastic partners as well, like american airlines where we have been very much innovating the offering. we're seeing the consumer more engaged. we're seeing them really responding to loyalty. you'll see us growing in our own branded cards portfolio, and in our partnerships going forward. it's been the head wind. this year has been the cost of

credit. some of the delinquencies are rising and the credit builds as we have been growing the volume, but i feel very good about this business, and i'm looking forward to next year. >> and then there's generative ai, i mean, here at this tmt conference it's what everybody wants to be talking about. where are we as far as banks using generative ai to become more productive and grow and how many how much of a game changer is it? >> i'm excited about opportunities in ai and the space in general. we have been seeing the benefits coming through in sumization, we have been seeing it in personalization. we have adobe here, fantastic partners on that front. dario here as well from anthropic. satya talking about night, and all of us are talking tabout scaling up the use cases,

playing defense and protecting consumers and our corporate clients as well. it's early. we're beginning to see more of the benefits in productivity, in testing. ultimately it will benefit the revenue side of the equation as well. >> is that soon? >> we'll start to see some of the areas beginning as you're able to get more insights for consumers and the per personalization will be important. >> i'm looking forward to the conversation, thank you for having us, specifically on ai. thank you for catching up, especially on a week like this. thank you. >> thank you. >> jane fraser, ceo of citigroup, back to you. >> we'll see you in a bit with the ceo of ibm. take a look at s&p gainers on the week. benefitting names like expedia, that's going to be the highest level since 2022. tesla as well is reapproaching a

$1 trillion market cap. dow is up 233. session high, stay with us.

♪ welcome back. i'm pippa stevens with your cnbc news update. a federal judge ruled against president biden's program, offering a path to citizenship for undocumented spouses of u.s. citizens. the judge said in the ruling the biden administration didn't have the authority to create the program. it's notclear yet if there will be an appeal. about half a million people would have been eligible for the keeping families together program. hungary's prime minister predicted today president-elect donald trump will end u.s. support for ukraine. the nationalist leader, viktor orban called on the european union to rethink its support for kyiv, saying it cannot finance the war alone.

meanwhile, russian president vladimir putin congratulated trump on his victory yesterday. and dodged a question about what he expects from trump's second term. and detroit is the largest u.s. city to accept bitcoin payments. the city's mayor announced detroit will accept the currency through paypal in mid-2025 through city fees and taxes. three u.s. states, colorado, utah and louisiana accept cryptocurrency for payment. big week continues. >> pippa stevens this morning. airbnb one of the laggards on the s&p, they miss on earnings. the travel trends did get better in north america during the quarter but not helping the stock today, down better than 9%. plus, can an old dog learn new tricks. look at the changes to the dow, and what it means for the index, when we continue. prz difference. at humana, we know that's especially true when you're looking for a medicare supplement

insurance plan. that's why we're offering "seven things every medicare supplement should have". it's your free, just for calling the number on your screen. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free. and there's no obligation. you see, medicare covers only about 80% of your part b medical expenses. the rest is up to you. that's why so many people purchase medicare supplement insurance plans like those offered by humana. they're designed to help you save money and pay some of the costs medicare doesn't. depending on the medicare supplement plan you select, you could have no deductibles or copayments for doctor visits, hospital stays, emergency care and more. you can keep the doctors you have now, ones you know and trust, with no referrals needed. plus, you can get medical care anywhere in the country, even when you're traveling! with humana, you get a competitive monthly premium, and personalized service, from a healthcare

partner working to make healthcare simpler and easier for you. you can choose from a wide range of standardized plans. each one is designed to work seamlessly with medicare and help save you money! so how do you find the plan that's right for you. one that fits your needs and your budget? call humana now at the number on your screen for this free guide. it's just one of the ways that humana is making healthcare simpler. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free. and there's no obligation. you know medicare won't cover all your medical costs. so, call now and see why a medicare supplement plan from a company like humana just might be the answer.

. what a week it's been for shares of tesla. carl mentioned this just moments ago, but worth noting again, the company's market cap is in excess of a trillion dollars. it is up some 27 1/2% now for the year, and that performance actually eclipses that of the s&p. here it is. there's a week to date or a month to date. up 27% for the month. so almost all the gains for year in the last month, and again, it is now performing better than a very strongly performing s&p, up some 25 plus percent for the year. by the way, if you like to keep tabs on elon musk's ownership sake, he's got some 411 million shares currently, worth some 129 billion, let's call it, and then another, let's call it 88 billion after you exercise at 2 2344 on roughly 340 million shares. given shareholders said yes to

the 2018 compensation package up to over $200 billion. i think we also have shares of djt. those were also reversing course after losses in the last session. apparently in a post on the truth social app that is owned by trump media, the president-elect said he has no plans to sell the company. >> the tesla thing is interesting. as we said in the 9, flat from october 21 to today, but maybe that's been a function of who's been in the white house, and that's changing. >> it may be. you go longer term, and you made this point at the beginning of the 9 this morning, it's not up really. right? >> it was 315 in october 2021. yeah. let's get to technology as well. sara eisen is in pebble beach with more on what's ahead, hey, sara. >> how does the outlook change for ai and potential regulations

around that now that president trump will be back in the white house, republican congress. we're going to talk to the ceo of ibm about that and the appetite for corporates right now to spend on technology, the consulting business, the software business, and what he has new on generative ai as well. we'll be right back with that interview. policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some research and called coventry direct. they explained life insurance is a valuable asset that can be sold. we learned we could sell all of our policy, or keep part of it with no future payments. who knew? we sold our policy. now we can relax and enjoy our retirement as we had planned. if you have $100,000 or

more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance.

the incoming administration promises to be more friendly to crypto. how could that translate into opportunity? reial talk to one of the pennl first movers in the space about his regulatory experiences and outlook for the best bets. tune into our market navigator segment on "power lunch" at 2:00 p.m. eastern. yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice.

every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth. you founded your kayak company because you love the ocean. not spreadsheets... you need to hire. i need indeed. indeed you do. our matching platform lets you spend less time searching and more time connecting with candidates. visit indeed.com/hire we are live at citi group's tech and media conference at pebble beach, california, this

hour. shares of my next guest company outperforming on the year, as they lean into generative ai. ibm ceo arvind krishna joins me now. good to see you. >> always good to see you. >> everyone is rethinking the entire outlook because of the election. how does your view change of what's ahead? >> look, i think taking uncertainty away always helps business, so now we know what we have in terms of roughly, we don't know exact, but we know roughly what u.s. policy will be. i think it's going to lean in in favor of innovation, in economic growth. the president-elect has been clear about that. that's what the nation is founded on. that is going to cause tail winds to spending, both capx as well as technology spend. >> you see an improved picture for your own business. >> absolutely. 2025 is going to be better than 2024. >> does that include the consulting business? >> that was one of the weaker spots in the last quarter. it's not a quick fix when it comes to discretionary spending

to companies. >> when i look at the last quarter, it showed the underlying health of the business was extremely good. we grew software at 10%, and consulting was soft. consulting was flat, as opposed to 2, 3, 4% growth, which is what we might have expected. yes, that comes from people pushing the brakes slightly, on discretionary spend. why? we think that's because partly uncertainty, partly geopolitics, partly interest rates and inflation. so if two of those four get moderated, that implies people are going to spend. i think if interest rates stay moderately higher, then technology becomes a way for people to get their way out of the other costs, and that i think is going to drive tail winds in 2025. it's hard to predict by the month. i'm optimistic we'll see a turn around during the year. >> during the next year? >> early 2025. >> what about regulation? you've talked about how everybody is looking forward to a more deregulatory environment, at least in the market. how does that affect your sector

in particular and your business? >> we always need regulation. let me acknowledge that. regulation provides guardrails. this goes back to the foundations of capitalism, you needthe market to be free, and provide guardrails so you don't get bad actors. we acknowledge that. regulation creates friction. if you give too much friction, regulation becomes overzealous, it causes a pause, a massive slow down, which none of us want. then the economic growth is not there to propel the economy forward. i think a lighter touch on registra regulation is going to be beneficial. that means for citizens, employees and the nation. >> does that include antitrust regulation, particularly tough in the biden administration. a lot of people are looking at you to see what your appetite would be to do deals in a different regulatory environment? >> if you can get certainty that the deal is going to get done in a certain amount of time, a conversation between the regulators and business to be clear about what they want and

don't want, then it causes an acceleration in what we can get done. that causes capital to free up. that means companies are "para private. that money goes back in the market. i would predict m and a volumes will be up from '24 and '23. >> ai regulation, the president-elect on the campaign has promised to overturn the executive order from the biden administration on ai. what do we expect? >> look, we believe in responsible ai, and we have been very public and talked about that model developers should be accountable and responsible. we want open innovation, not closed. i think the pieces where there was talk in the administration and you could interpret as saying you need third-party assessment just causes way too much friction when it's such an early stage. being accountable, good, but asking for third-party assessments i think is not a good idea. we are in favor of a lighter touch on regulation, other than

extreme cases when it involves life and death. >> your generative ai book of business has been growing. $3 billion is what you last updated. where does that go? how much of the company is going to be gen ai, whether it's the software or consulting business? >> the $3 billion is where we ex explicitly measure gen ai. i think it's going to touch most parts of the business. it's going to power what we do inside our mainframe. nobody talks about that. that's not in the 3 billion. it will power every element of our consulting business, the entire $20 billion book of business there. it's going to embed itself in every piece of software. we see that, and it's coming. so in the end, it's a threat that goes across the business. now, that 3 billion is where we say, these are software sales that involve large language models. these are consulting models, both ours and our partners.

that's the 3. and that we're very pleased by, given its growth rate over the last 15 months. >> how are customers approaching the roi, return on investment, when it comes to gen ai. >> i think the competition has been much higher in 2024 than it was in 2023. that's why you see people talk about, i need to know not just what roi is, but what's the cost, can i get a model fit for purpose. can i drive down the costs of implementation are all playing into the conversation, and that's why we invest in models that are much more fit for purpose. our family of models is sometimes 30 times better than a very large public model, and it's got to be equally good, but you're narrowing the width of what it can do. >> you have business in china, i wonder if you think about that differently after the election? >> look, gchina has been an isse in china for a while. the election may accelerate some

of it, but it's not changing the vector of the trend, just changing the slope. >> you mean the weak snns. >> china has been on a downward trend for half a dozen years. i see that hard to reverse in general, but there are still opportunities. there are multinationals in china. there are chinese companies expanding outside of china. that remains the opportunity. but selling into china is tough. >> and will remain so, it sounds like. most important question. you signed a deal yesterday with f ferrari, the formula one team, a team that has a partnership with ap inc. i have been reporting on how businesses are falling over themselves to get into f1. what's the plan here? you do this with the masters and the u.s. open. >> f1 gives us a place and a way to bring fans in that are very distinct from the golf fans around the masters or tennis fans around the u.s. open and wimbledon. at the end of the day, the

ferrari f1 team is driven by technology. they leverage a lot of technology, and what we offered to work with them on is fan engagement. how do we bring all of our experience and how we do fan engagement at the other events and build a wonderful app, both the mobile webb and on the premises of engaging the fans. that will expand the market for them, and allows us to showcase technology. >> and you have lewis hamilton joining your team, which is a plus. thank you very much for your time today at the citi conference. good to see you. >> always a pleasure. >> arvind krishna, we are not done here at the summit. don't miss the ceo east of nasdaq, palo alto, and tob-mile with us on the next hour of "money movers" i've on pebble beach. "squawk on the street" will be back in just a moment.

growing your business is easy once you know the moves. with godaddy websites plus marketing, you can quickly create a website, and ai will customize it for you. get your business out there and get more customers in here. no sweat... for you anyway. create a beautiful website in minutes with godaddy.

lot of different sectors benefitting from the various possibilities that are going to be posed from an incoming trump administration. perhaps none so more than the financials. we have talked about it any number of times, including of

course that significant rally, the likes of which we have rarely seen among some of the bigger names, not to mention the regionals as well. it continues, you can take a look there in terms of the week, up almost 6%, and another 1% today. and, carl, the likes of goldman sachs, up 53% for the year, approaching a $200 billion market value, obviously would be a beneficialry of an m and a wave. more animal spirits when it comes to the capital markets overall. >> some calls where people said we're entering environments where you're going to be able to let goldman be goldman, for example. the other one is this upgrade of b of a from city today. they argue, look, these banks are going to converge on a multiple basis. the best way to play it is not the sector as a whole. they look at potential imp from a t 15. probably it's going to help.

maybe not as much as the first time around. >> you heard jane fraser's comments in terms of the regulatory burden being lessened in some way, not to mention the possibility of more consolidation, which would not include the biggest of banks, but might mean that many of the regionals are able to gain some scale as well. so certainly one of the key moves we have watched this week, of course so many her veotmos to continue to watch as our market coverage continues right after this. (♪♪) ♪ well i was raised by careful hands ♪ ♪ yeah, they made me who i am ♪ ♪ so i'm off to see... ♪ we invent them. we design them. we build them. and one day, we have to let them soar.

♪ i'm always coming home ♪

good friday morning, welcome to money movers, i'm carl quintanilla, live at post 9. sara eisen is at the city tmt conference in pebble beach. a lot to come from sara today as we've already seen in the past hour. coming up, what comes next for the market following the fed's most recent rate cuts. stocks trying to continue their move higher following their big rally. >> plus, our big line up of industry leaders continues this hour. we'll sit down with the ceos of nasdaq, palo alto, and t-mobile, their post election reaction, future of regulation