and the fed's neel kashkari said only an inflation surprise derail a december rate cut. don't know, the ten-year saying something. more data on that today from the october consumer price index. it is wednesday, november 13th, 2024. "squawk box" begins right now. good morning, everybody. and welcome to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. we have been taking a look at what's been happening with the equity futures this morning. right now you see red arrows. this does come off a down day for the markets yesterday. the s&p 500 and the nasdaq both breaking a five-day winning streak. this morning you got the averages slightly lower.

dow futures off by just over 60 points. s&p 500 futures down by 8. the nasdaq off by close to 20. treasury yields, which, again, have picked up just about every day this morning, the ten-year slightly lower, 4.42. you can see the two-year sitting at 4.35. and then the price of bitcoin, which touched above 89,000 earlier this week, now sitting up by about 87,668. president-elect trump announcing more picks for key roles in his administration, eamon javers joins us this morning from west palm beach, florida, with a whole bunch, a whole bunch of new names. >> reporter: yeah, that's right, andrew. we have some insight into president trump's thinking about how he wants his second term to go last night with all these announcements. let's start with pete hedgeseth, the fox news anchor who the president-elect announced last night. he wants to serve as his secretary of defense. he served in the minnesota army national guard, served two tours

in iraq and afghanistan. the co-host of "fox and friends weekend." it is going to be an interesting unconventional pick and we'll follow along in washington to see whether he has the votes to get confirmed. your instinct is he does have the votes to get confirmed in a republican senate. but pete hegseth never has run a large organization, never worked in the pentagon, so seen as somebody unconventional. he's known on "fox & friends" for ing against wokeness inside the u.s. military and a real critic of gender and diversity and inclusion efforts by the pentagon. he's somebody who is simpatico with the incoming president of the united states on woke issues. that's the department of defense. now, let's move on to elon musk and vivek ramaswamy, who you guys were talking about in the intro. the former president announcing last night he wants to create a new department of government efficiency. you see doge, you see what he did there with dogecoin.

elon musk and vivek ramaswamy would co-head this new organization. take a look at what said last ns announcement about this organization. he said it is going to exist outside of government. he said it will provide advice and guidance from outside of government and will partner with the white house and the office of management and budget to drive large scale structural reform and create a entrepreneurial approach to government never seen before. so, the key there, guys, i think is the outside of government piece. this is not something that is going to have the force of law. it is not going to have the backing of congress. at least initially as it is described in this press release last night. and that means it won't have the actual authority to make cuts. so think of this as more like a blue ribbon commission along the lines of simpson bowls back in the 2010s, where they're going to recommend cuts and then it will be up to congress to implement those cuts. and congress, you know, of course, has its own preferences about spending. that's why simpson bowls failed in the end, because they

couldn't find political agreement about the right balance between tax increases and spending cuts. in this case, though, both elon musk and vivek ramaswamy suggested they want cuts that go far beyond what simpson bowles ever contemplated. elon musk talking about cutting $2 trillion out of the $6 trillion federal budget, vivek ramaswamy talking about cutting a million federal employees. and he's argued that he has a way of doing that cut, which works around the civil service protections for existing federal workers that prevent them from being fired. his argument and he's willing to take this to court, he said in the past, is that you can do reductions in force at a large scale level inside the federal government and if you do that, then you get around the civil service protections. he's willing to take that up to the supreme court and the supreme court might back him on that, given that it is a very conservative court at this point, guys. back over to you. >> in fact, it appears that this effort by elon and vivek is going to be much broader in some ways than i think some people

had expected, in that broader in that the recommendations are -- may encompass all sorts of parts of the government that couldn't otherwise be touched or will require congress to touch it. there were early expectations he might be brought in, elon, and try to touch those component parts of the government that could be touched using executive orders and the like, right? >> reporter: yeah. no, this is clearly a whole of government effort. if you're talking about cutting $2 trillion, you got to look at the kit and caboodle here. the problem is politically, right, the reason that these kinds of efforts to find waste, fraud and abuse typically fail in washington is that, you know, one man's waste is another man's essential government project. somebody benefits from every single dollar that the federal government spends. all those people who benefit have their voices in washington, have their representatives to speak up for them, who argue for that particular piece of spending. every dollar has a constituent city. the more you try to cut, the more political enemies you make. the interesting dynamic here is

just the total sweeping victory that donald trump had in the election, the popularity and dynamism of figures ike elon musk and vivek ramaswamy, these are interesting, fascinating, social media popular people who are going to come in and approach this in a totally different way. that might get momentum of its own to get congress to buy into a lot of that. but at the end of the day, you're going to talk about cutting spending in individual members of congress' districts that affect their constituents. and a lot of those folks are not going to want to take the political pain from that. >> though, by doing it this way it also means that both those gentlemen can continue to work in their day jobs and hold the corporate holdings that they have, continue to keep those. if you worked for the executive branch, you have to divest all of those issues and that raised a lot of questions too. what would happen if elon musk wasn't still able to run all of his companies. so i think this answers some of those questions too.

>> reporter: elon musk has been in public fights with a number of federal regulatory agencies and now that could happen at a time when he's proposing to cut the budget for the s.e.c. or the faa or any kind of other large government agency that he's tangled with in the past. that raises just inherent conflicts of interest issues and one of the questions here is going to be, you know, what kind of authority does this, you know, new quote, unquote department have. it will be an outside of government advisory board that will make these recommendations, presumably the president-elect as president will take on board some of the recommendations if they come up with ways to actually cut the federal budget through executive orders and the like. but at the end of the day, you're going to need congress for this and members of congress generally don't like, you know, cutting spending that benefits their own constituents. >> but, again, we watch the internal process trying to do it through washington insiders with simpson and bowles. in the end, they made a lot of recommendations, but they weren't able to be effective

with it for those reasons. maybe if it is coming from the outside -- >> they needed legislation for that, didn't they in. >> you will for this too. >> and certain things -- right. >> and then the $2 trillion, is that over one year, over ten years, do we know the answers to that yet? >> reporter: we don't. we don't know ultimately what he's going to do, but he's talked about, you know, $6 trillion annual budget and he's talked about cutting $2 trillion out of it. >> the entire discretionary budget plus. >> reporter: it is bigger than -- exactly. and the president-elect has said that he doesn't want to cut, you know, some of the mandatory spending like social security, medicare, medicaid, those things that benefit people and his voters. you cut the entire department of defense budget. >> you cut the bone. i guess we got to go, i'm wondering, can you define caboodle? do you know what a caboodle is?

you used that. >> reporter: i don't know what a kit is. >> a kit is a collection of things. >> i thought a kit was a -- that's a kid. goat. baby goat. >> reporter: i thought caboodle was the last car on the train. >> no. it is actually from -- that's the old english for bottle, bottel, a collection of things and to make it alit literative, they added caboodle. if we use it, we should know what -- i go what the hell is a caboodle? it is a funny word, a fun word. >> because of these discussions you started and got into, now i cringe -- i cringe every time somebody says chomping at the bit. it is champing at the bit. now i can't hear it. >> i think i should do it, the boomer report. you're almost there. not quite. but probably like it. >> reporter: i'm solidly gen x,

man. >> are you? solidly gen x? gen triple x. >> reporter: i don't know about that. >> thank you. corporate news today, directv is abandoning its acquisition of dish assets, a group of bond holders refused to accept the terms of a proposed dead offer. directv will soon be wholly owned by a private equity firm, ppg would have assumed $10 billion worth of dish's debt and pay a nominal fee to acquire dish. that was contested. directv made a revised offer, a little more than 70 cents on the dollar and the bond holders rejected that offer earlier this week. 70 is better than 0. directv now said it has no choice but to terminate the acquisition by midnight on november 22nd. sources tell cnbc that directv does not plan to offer any

further concessions. and shares of cava soaring. same store sales grew by 18.1% at the restaurant, that beat estimates of 12.2%. it raised its full year outlook for a third straight quarter and that stock, by the way, up nearly 300% year to date. the ceo brett schulman will join us on the first on cnbc interview coming up at 7:50 a.m. eastern time. that stock this morning up by more than 16%. and food startup wonder is buying delivery service grubhub from europe's just east takeaway. wonder is going to be paying $150 million in cash. it will assume $500 million of debt. just east takeaway brought grubhub in a 2021 deal valued at more than $7 billion. if you watched the show, you probably know that wonder was founded by former walmart executive mark lore, former internet entrepreneur, who created diapers.com and others. this was founded in 2018. that company is building out

kitchens that house multiple restaurant brands with dine in and delivery options. the combination will allow wonder to tap into grubhub's fleet of delivery drivers and create a meal app. the idea was it was going to be vans that drove to your house and made dinner for you fresh there. they're into this idea of the super restaurant locations where you can dine in, but most of it is for take-out, but they only do take-out for really big name brands and good food in a small circle because they want the food to be warm when it gets there. >> i understand uber eats. i don't understand sending the whole kit and caboodle to your house. >> we were showing the vans. that was the early concept. i don't think that's what they're doing now. they have gotten away from it, because it is expensive and you can only do that -- they were starting it out by your house in really ritzy areas. >> you should see all the

leaves. very leafy. >> you must live out there because that's where he was starting the service. >> even if you get a meal made for you by the staff away from the main part of -- done that on the beach once, staying at a ritz-carlton or something, you can't afford it. you can't. it costs too much. >> i think that's what they want. and that's what they have learned. we're just using old video. >> did you think kit and caboodle works there? whole kitchen sink. where's that from, sorkin? the whole kitchen sink? >> now i think of elon musk. >> where is it from? why the sink? coming up, key inflation data, why not the -- hopefully not -- the whole kit and -- 8:30, getting you ready for the consumer price index. and then live to washington -- >> thanks to the early 1900s. >> and why the sink? we don't know. >> i don't know. haven't gotten there yet. >> -- washington for the latest on the senate majority leader vote. this is kind of it.

we need an election for a week to keep us excited. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

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all right. it's -- we have a squawk planner for you. here's today's. key inflation data is coming. the october consumer price index is due at 8:30 a.m. eastern.

the full forecast is expected to rise .2% from september and up 2.6% year over year. also on today's agenda, cnbc's 14th annual delivering alpha investor summit in new york city this afternoon. the theme, ambition and opportunity for the new year. joining us now, with more on the markets, stephanie link, hightower adviser's chief investment strategist and she's quite a strategist and cnbc contributor. looking at your notes, stephanie, and you have thoughts here. i would actually call them deep thoughts, look like that "satu night live" segment. some of these are deep. you also -- when you come on, first we do macro, then we do micro. so let's do it again. there are three things that you think the outcome of we now know that might be helpful with the uncertainty problem. what are those? >> yeah, look, i think we

checked a few boxes last week that were -- they were an overhang on the overall market and sentiment. the elections, the fed and china. and basically we got answers to all of them, and on the election front, it was a surprise sweep. but now we look forward to a new administration, with faster growth, more deregulation, and less government spending, but i think that will be more than offset by higher business investment. joe, one of the things that i have heard from companies over the last year is that they were holding back on business spend and plans because they just didn't know the outcome. they wanted an outcome. so now they have it and i think you are going to see stronger business investment. and that bodes very well for corporate earnings. that's what i really care about, right? and by the way, the trump administration, they're actually inheriting a pretty good economy, running a 2.5% gdp,

inflation is coming down, we have a big number today. but it is coming down, and you have the consumer remaining pretty resilient and, of course, we talk about this manufacturing renaissance that is happening with regards to a.i., data center, power the grid, that's really helping that part of the economy as well. so, we're in good shape, and now we have faster growth ahead of us, and i think that bodes well overall for the overall markets. >> i think it would be -- i don't know about the economy, might be right, and i hope a.i. is such a game changer that it can extend this business cycle even longer. but if we were worried about a slowdown two years ago because we were due, it has been two more years without a slowdown. just, like, night fall is day, sooner or later, usually, maybe it is policy mistakes, maybe we conquered the business cycle. i would not want to be an

administration coming in at 23 times earnings for a stock market. we -- i don't think the market knew what was going to happen, i think all that liquidity and all the money on the sidelines have helped propel it to where it is and all the fiscal spending, but for whatever reason, it is richly valued right now and that's not a good time to take over. >> it's richly valued in certain parts of the market though. so, certainly tech has had a heck of a run. there are a lot of expensive stocks within tech. there is also a lot of stocks within tech that are not that expensive. there is financials that are not that expensive. there is industrials where we have this evolution happening. revolution happening with regards to a.i. so, there are a lot of areas, by the way, energy, energy, that sector is trading -- anywhere from, like, three to four times free cash flow. so there are pockets of the market that i think are attractive and i think that's why you're seeing a broadening out. we have been seeing a broadening

out in other sectors. and maybe, by the way, joe, maybe it becomes a stock picker's market which i would love. >> well, that's what we're going to do now. we had these -- those two guys, not twins, are they, the brothers -- >> they are. the home improvement -- the property brothers? >> are they? they're bros. are they twins? >> they're twins. they have another brother who is not a twin. >> then it would be a triplet. >> yeah. >> they made such a case for home depot yesterday. and -- >> now you got me double-checking. >> and earnings were good and it finally looks like it can go to new highs, steph. >> yeah, i mean, it had a nice run, up 18% on the year, but i was surprised it sold off yesterday. they beat on earnings revenues ebit margins were good, comps were better than expected. they were still down at 1.3%, but the expectation was for negative 3.3%. whispers were negative 2.5%. and they did get helped out by warm weather as well as the

hurricane rebuild. but they are doing much better than they did in the first half of the year where comps were running down 3.4%, 3.5%. the most important thing i'm looking at is sales are actually better than inventories. they actually were faster by 2 percentage points and for the six consecutive quarters. can you even imagine when rates come down and the housing market really takes off what this company is going to do? the profitability, the operating leverage that they're going to be able to see. so, i like this one very much and i follow -- i own it, i'll be adding to it on any weakness. >> we're almost done, but cisco and you mentioned a couple of others, i think. what was that rockwell collins or something? >> we can run real quickly through these. cisco reporting tonight, their enterprise spend, we heard from juniper extreme that enterprise networking spend is on the rise. that's the surprise.

we also get security from cisco that i think is underappreciated, trading at 16 times ersus 18 times historical. rockwell is a new name for me. it is about that whole a.i. data center grid, power renaissance, and the reshoring, which i think is a $10 trillion opportunity, this stock has not participated. we have talked about anta and ge, rockwell is down on the year and the new cfo is going to be very good in terms of margin expansion. i like that one. >> all right, we got through a lot. we got through, stephanie, we got through the whole nine yards. >> there's another one. >> got through the whole nine yards. what the hell does that mean? what does that mean? steph? we got through the whole nine yards. we did the whole kit and caboodle, whole kitchen sink and whole nine yards, thank you. >> you ask and she's typing. >> figuring it out. >> we don't need to know every

one of these things, but it is fun. three-hour show. >> three-hour tour. when we come back, a south korean firm is planning to create a leverage berkshire hathaway etf. we have the details on that next. plus, the parent company of fanduel echoing rival draft kings in a warning that betters had a great run on nfl games in october. "squawk box" will be right back.

a south korean retail brokerage is planning to package berkshire hathaway into an etf leveraged to provide 200% of the daily performance of berkshire. they're teaming up with title investments to launch that etf.

the idea might not set all that well with warren buffett. he called ed derivatives finan weapons of mass destruction. it is awaiting approval from south korea's financial regulator. etf that would look at the class b shares which are now $467. that was the affordable way to get in, still more affordable than the class a shares, north of $700,000 a piece. when berkshire had the class b shares, part of a transaction that would allow average investors to get in instead of buying in bits and pieces that you would see in other places too. >> why does he have an -- >> of all the cash? >> cash arc? >> why? why? can you tell me? >> i can't. >> we can speculate. >> we can. and -- >> the speculation -- >> he's done pretty well over the years. not all micro. >> he's never been a market timer. >> no. he's got a lot of cash.

and he's been raising -- >> more than $300 billion, selling off everything from apple shares to bank of america and building up that cash hoard. part of it has restabilized the portfolio to some extent. >> i'm not convinced it is a great time to come in as an administration. it looks like it is, it is almost as good as when we were in davos and he was the toast of the town. remember? that was the worst time in the world for what was -- >> the pandemic, yes. >> but everything else. but -- >> you're saying from how long we have been in -- >> the markets. we had a 40-year bull market in bonds that is over. i don't know. maybe we got it under control again. a number today. >> the big question is if you really cut government regulation and unleash business, what that does. >> but, cutting all this stuff to the bone is initially -- >> there is going to be temporary pain.

>> as elon musk pointed out too. palantir technologies renewed a multiyear deal with rio tinto. palantir saying rio tinto could use the platform to help manage plant operations and coordinate dozens of unmanned trains that carry iron ore. rio tinto planning to build and test such use cases and then deploy them safely and we'll see whether this turns to even a bigger business for palantir, that stock, of course, has been on a massive run this year, up now at $60.42. and shares of flutter, flutter entertain rmt high ment higher. it beat estimates for the third quarter, it warned a tough start to the current quarter. draft kings made similar comments last week, saying that fourth quarter sales had been hurt by less favorable betting results, people were winning. flutter ceo peter jackson said sports betting perators across

the board had been hurt by october nfl results that s tha bookmakers by surprise. it would have to be that a lot of the favorites ended up winning. for a while this year, a lot of the underdogs were winning. our producer thinks you actually have bought a kit and caboodle for your cat. like a sweater. >> no, i have not. >> that would be a good name. >> my cat would not like it. >> if you're a clothier for cats, kit and caboodle might be good. a good name. coming up, i don't know where to go with this, little known government agency shaping clean energy policy may be on the chopping block with the trump administration. we'll tell you what's going on with that right after this. as we head to a break, a look at yesterday's s&p 500 winners and losers.

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welcome back to "squawk

box." we are live here at the nasdaq market site in times square. look at the futures at this hour. just after 6:35 a.m. on the east coast. you're looking at some red on the screen, about 91 points off on the dow. the s&p 500 down about 10 points now. the nasdaq off about 33 points. a little known agency shaping clean energy policy could be on the chopping block. pippa stevens is here and has that story. hi, pippa. >> we are talking here about the loan programs office which could be all but eliminated under president-elect trump. part of the doe, the lpo provides financing for projects that are cutting emissions, clean energy bank of sorts. it has been super charged under president biden, growing tenfold to $400 billion. thanks to the inflation reduction act. the lpo has noted that federal programs continue across administrations, it could become largely dormant under trump, which is what happened during his first administration.

now, there are currently 210 active applications seeking more than $300 billion in funding, which includes 17 conditional loans or ones that had been approved by the energy secretary, but haven't yet been paid out. publicly traded ev go, plug power and ioneer are no doubt rushing to get the loans squared away ahead of the inauguration or as peter davidson from alined capital told me, we could see a shift in the types of jects they fund, including hydrogen and carbon capture. >> if you listen to elon musk, he has said that they should strip away all the subsidies and help being given to clean energy, but also do the same thing with oil and gas and other forms of energy. if you take them seriously, what they're saying, they're saying they're going to strip away a lot of the taxpayer subsidies. >> there is a lot of discussion about the inflation reduction act and to what extent it could be repealed, especially since more than 80% of that funding

has gone to republican held districts. but if you look across the ecosystem, there are a lot of industries that have been subsidized and even if you look at energy as a national security issue of sorts, looking forward, we have already ceded a lot of the manufacturing, things like critical minerals, refining to china. if you want to bring that back to the u.s. and make that competitive, people who are proponents of the program say there has to be some sort of government back stop there. they're not the ones, they're not putting taxpayers on the line here, but they can do things like provide irect lending or loan guarantee. >> are they -- did they build that one charging station, do you know, for the 400 billion? is the agency that was -- they got some money left over. >> yes, they do. >> they got like -- out of the 400 billion, they have like a billion left. >> they have -- they have a lot of that left. they have to provide conditional loans to ev go. but they did have a very black spot back in the day when they

loaned to solyndra which went bankrupt. that was a more than $500 million loan. they loaned to tesla. that was one of the bright spots. after solyndra, they have been careful about the companies they are lending to. there are very strict stipulations, you have to set revenue aside so that solyndra 2.0 does not happen again. >> pippa, thank you. >> almost a word, solyndra is almost a word. kleenex. meantime, when we come back, senate republicans voting this morning on the next majority leader. we're going to take you live to washington for the latest there. and then in the next hour, the ceo of fast casual chain cava will join us. that stock soangri after earnings that beat estimates. the stock now up more than 650% since last year's ipo. we're coming straight back after this. that's the power of curiosity. better questions can lead to better solutions. t. rowe price. invest with confidence.

welcome back to "squawk box." on today's political agenda, president-elect trump is going to be meeting with president biden in the oval office today. it is going to happen at 11:00 a.m. eastern time. trump also expected to meet with house speaker mike johnson, also meeting with the new senate majority leader after republicans vote this morning. joining us on the majority leader vote, steph kite, she is the co-author of the axios hill news leaders newsletter and emily wilkins as well. what is the actual state of play, folks? steph? >> we will see and in just a couple of hours who republicans decided to anoint as their next leader after nearly two decades of leadership under mitch mcconnell. it is not clear when one is going to end up taking the majority of the votes. 27 votes is the magic number today. there is going -- there could be multiple rounds of voting,

republicans will vote first time around on all three candidates, john thune, john cornyn and rick scott. and if none of them can get that 27 number of votes, then they will move to round two with the person receiving the lowest number of votes being eliminated. thune had from the beginning been viewed as a front-runner, but, you know, vibes don't necessarily matter. all that matters is how senators actually cast a secret ballot vote. cornyn is also a top contender, most people see rick scott as the least likely of the three of them. he's, of course, picked up a lot of support over the weekend from people in trump world and where his supporter might go on a second ballot might be something to watch. >> emily, that's what i was going to ask you about, from some of the reporting out there, there is all sorts of machinations behind the scenes about rick scott, about whether there is too much pressure coming from the trump camp on the senators because -- and what

is -- can you speak to what the vibes or the feelings really are? >> it has been really interesting. i mean, for something that is supposed to be a closed ballot, senators had protests outside their offices, they have been getting emails, they have had full inboxes when they come into work in the morning of people saying, hey, you need to back rick scott. but, look, this is a private ballot, and the senate is widely a chamber that is supposed to be immune from outside pressure, right? that's why these senators serve for six years. to that point, the senate has historically been somewhere that does not have some of the pressure that donald trump has tried to put on it. you saw in the first term that the senate really did act as a check and a balance on trump. i think the big question that we have right now, can we expect the same from this senate as we did from the senate in 2017. and today is the first big test of that. rick scott is clearly the one who is most aligned with trump, the most in sync with trump. trump has not come out, he has

not endorsed yet in this race. there is still a very good chance that we could see majority leader thune and majority l leader cornyn. that's a big tell from the results we see today is how much senators feel like they have a mandate. and to that point, trump has gone around talking a little bit about allowing the recess appointments, that would allow him to bypass the senate's authority to approve potential cabinet picks and other top level administration officials. and some members actually most members who i talked to last night said, look, we totally get trump wants to get people through the senate quickly, we're 100% on board with that. we have a responsibility to advise and consent and you can tell these lawmakers, they do not want to give up that power that the senate has. >> stef, what do you think about the pressures being brought to bear. and is thune a trump guy, not a trump guy if that's how this all gets played out? >> look, both thune and cornyn have had a very rocky relationship with the former

president. there were times where trump was even threatening to try to mount a primary challenge against thune, just a few years ago. but, of course, thune and cornyn read the writing on the wall. they know in today's day and age in the gop, it is not acceptable for a republican leader to ot have a good relationship with the former president, now the president-elect, and both have put in the time to kind of rebuild those relationships. and it is something that both of them, you know, talk about a lot to the press and also with their members trying to prove that they are someone who can work, you know, with the president and get things done on the republican agenda. but there are still some who don't feel like it's enough. and that's going to be the big question. and you're seeing a lot of the closest trump members, a lot of the senators who we know have the closest relationships to trump come out publicly and back rick scott, so that is certainly a dynamic at play. also, you know, throw out there that while there is a growing

number of voices in the senate, who are very ardently supportive of president trump, there are also others who are much more old school and who are, you know, will push back on the president-elect and who may not, you know, be moved by those arguments. >> emily, just to your point that, you know, senators have six year cycles, so they're a little more immune to some of these things, a third of them are up in two years in 2026. you look through it, 13 democrats and 20 republicans who are up. if you look through the list of republicans up for re-election in two years, john cornyn is on the list. you have names like shelly moore capito, bill cassidy, susan collins, maybe some of the senators in the past who would have been more independent-minded. you wonder if the pressure of going through this knowing that you have to face re-election in two years changes that dynamic. >> i mean, it could. it is a secret ballot, though. so a lot of these individuals could, you know, just not simply say who they voted for and

ideally that would be respected. it is interesting that you brought that up. >> emily, does it stay a secret? do you guys know? >> a lot of times they say who they voted for. >> previously it has been a close ballot, the last time they had a vote. >> you could come out and get shamed even, i would think, stef. >> some can say how they voted. some announced how they plan to vote. it has remained a secret ballot and this is -- they go in, write a name on a sheet of paper, and senator barroso, currently the conference chair and also running for whip, he'll be reading and counting the votes himself. unless he can read handwrite and decides to try to share that -- >> i write with my left hand. >> yeah. sounds exactly like conclave, which is a big movie out. >> one other question for you, we have been talking about some of these names that have to get

confirmed. department of defense probably the biggest quote, unquote outlier in the kinds of traditional person that has been put into those roles. what is your sense about whether that is -- whether that's confirmable, if you will? steph? >> there was a lot of surprise last night, a lot of senators were telling me they just need to figure out a little bit more about the nominee before they're able to actually make a decision on it or not. >> okay. we're going to leave it there. steph and emily, thank you. >> thank you. >> coming up, morning movers, we'll talk grocery delivery and d geaming audio next. ant the best of "squawk box" in our daily podcast, follow squawk pod, your favorite podcast app and listen anytime. we're coming right back.

shares of instacart, they are falling, earnings and revenue beat estimates, order volume at its core grocery delivery business came in higher than expected. here's what happened. current quarter guidance coming in below analyst estimates, the company saying part of that slowdown in growth was due to a web outage by one of its retail partners, the parent company of food lion, giant. the outage was caused by a cyberattack, being investigated now by the grocery giant. you're looking at the stock off on the back of that news about 9%, almost 10%. when we come back, disney casting a wider net for potential candidates to succeed bob iger. we got more on that story. plus, a preview of tomorrow's quarterly results. and we're counting down to the cpi, steve liesman will tell us what the markets should pe on the inflation front. that's a number we get at 8:30 eastern time, that's just over an hour and a half away.

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the board is extending its search for bob iger's successor to includextnaates as well. joining us now is tom rogers, orbit gaming chairman, and former cable president and cnbc contributor. great to see you this morning. >> great to be here, becky. >> the big deal of earnings this week is the disney report. that comes tomorrow at 8:30 a.m. and i know we're going to be watching pretty closely on a lot of fronts. we want to know how things are going at the streaming service, with disney plus, know how the theme parks are going. what do you think we should be on the lookout in particular?

>> well, just to set the table a little bit, disney is number one in terms of viewership overall when you aggregated streaming and its traditional tv services. so, in a position to show some leadership here, in terms of engagement, having said that, it is hard to talk about disney without talking about netflix. and netflix enterprise value now is actually bigger than disney, warner, paramount and fox combined. just to show what the traditional tv world is up against in terms of netflix growth. netflix free cash flow is presumably going to surpass disney's next year. but the thing that i'm impressed with, with disney, is they have gotten their streaming revenues up to about two-thirds of netflix and last quarter their streaming revenue was about equivalent to what their

traditional linear television revenues are. no one else among the traditional media companies have done that. so they're getting some revenue scale. the big question that everybody is going to be focused on is, yes, they established their streaming, yes, it is scaling, but the big question is can it be as profitable as their traditional television business was. that's a question of margins, and the margins on the streaming business have a long way to go. and with all the sports rights that they have acquired, as you begin to have to allocate a lot of that sports rights to streaming, we can talk about espn launching its streaming in a second, that allocation of sports rights is going to change that profitability picture, i think, potentially quite substantially. >> you know, the sports rights have been so important for getting eyeballs to go anywhere on the streaming services. it is something amazon wants access to. apple wants access to some sort

of sports rights. you see it with peacock, it drives the numbers when they put on the football games on peacock on some of these things, but the big advantage that the old line media companies had to this point is that they have not only the ability to stream, but also to put it on the traditional broadcast networks, on the cable systems if they choose to do that too, to make sure everybody and anybody can get access to these things and it is important to the sports leagues to this point. we see more and more people going to streaming. is there a point where one of the amazon or netflix or somebody has to get involved with the broadcast partner or do you think this gradually is a situation where broadcast becomes less and less and less important? >> well, i think you raise a great point. broadcasting still remains critical to the broad distribution of sports, and sports and nfl in particular is really the key element of what is still left in terms of viewer aggregation on traditional tv.

but the streaming world now is such that take the nfl, about half of all nfl games are outside the cable bundle now, in terms of being accessible. and the big strategic issue as we approach next year is going to be the launch of espn flagship, the so-called digital streaming version of espn. and that is a real jump ball in terms of its consequences for disney. and for the whole industry. is it really going to accelerate cord cutting. is espn available in streaming form going to have a massive impact in terms of additional cord cutting which doesn't have a floor anymore. many thought 50 million subscribers might be the floor. with espn going out of the bundle, there is a view now there may be no floor.

and the question is what will the price be? and if the price is too high to recoup all the sports rights that they have done, is that going to have a real impact on the ability of streaming to scale? so they have this balancing act of having to create a strong profitable sports streaming service, but at the same time, protect the linear cash flows that are still very significant coming out of the cable bundle. and that's probably the biggest thing to watch in disney going into next year. >> so the linear, that's the analogy. linear cable, the analogy that the ice cube that you're using. and it says it looks like there is no floor at 50. have you seen an ice cube get to a point and stop melting? oh, look, it's -- no. that doesn't happen. does it? >> if you stop time and put it back in the freezer, but i don't think there is any stopping time in this case. it is getting too expensive.

you can get about 40% of nfl games by taking peacock, paramount and amazon for i think about $25 a month, relative to what the cable bundle costs. and antennas to pick up the broadcast versions of the nfl are becoming increasingly popular. and so there really are far more economic ways to get nfl games going forward. >> tom, is the market overvaluing the netflix of the world or undervaluing the, you know, if you want to look at disney plus or peacocks, the old lines, or you think neither? >> i think the market has it about right. it takes true global scale to create the kind of margins with the revenue that global scale can create that netflix is way

ahead of everybody else. has a premium valuation, which has soared recently. but -- and all the traditional media companies are selling at a real discount. and until they can show that they're streaming entities are going to be at least, if not more valuable than their traditional television business was, there is reason that they sell at a discount. that disney is better positioned to be the number two media company in terms of global scale, but, remember, hulu and espn are basically domestic services and disney plus lost last quarter international subs, international sub number will be a big one to watch. and the projections for international sub growth on disney plus are not that robust. so, questions about the global scale and how that will -- how that will go for disney. >> tom, thank you. we'll have you back soon to talk

about the succession planning. we're out of time right now, but we appreciate seeing you today. thanks. >> thanks for having me. it is just after 7:00 a.m., about 7:05 now on the east coast. you're watching "squawk box" right here on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. we got some red on the screen as it comes to the futures. about 102 points and the dow down. nasdaq to opening down as well, off 32 points. the s&p 500 ff about 10 points. inflation data is due out at 8:30. october cpi set to hit the wire -- hit the water. steve liesman joins us now with more. this is what a ten-year over 440 now. >> yeah, and right around there. up about 8 basis points from yesterday. >> i'm still thinking about jim grant and, you know, when you see a 40-year -- the biggest bull market ever and then you -- if it is anywhere close to the other side of that is some type of bear market, if it is anywhere close, we were just -- we barely touched it.

and that worries me. >> yeah, and 450 being maybe another worrisome level to think about. let's talk about inflation. we'll come back to the -- it is all related. bracing for an inflation report that is going to underscore, i think, how stubborn inflation has been of late. this morning and last night, a recalibration of how much the fed will cut. i'll get to that in a second. 0.2 on the headline. unchanged 0.3 on the core. what that does to the year over year is it bumps it up to 2.6 on the headline from 2.4. the core remains stubbornly unchanged at 3.3%. we'll put that in context here. and headline inflation, it moves sideways earlier this year. resumed its downward track in the spring at 2.4, that's not the problem. it is around the fed's target when you convert the cpi to the fed's preferred inflation indicator. core in the 3.2 to 3.4 range,

moving sideways, since at least the spring. many economists think the outlook is still -- see the current levels as a bump on the road downward. piper sandler offered this list yesterday of reasons to be optimistic on inflation. you have continued goods deflation, especially for absent autos, lower rents coming through the system, easing labor pressure and no net fiscal stimulus for now. and still weak credit growth. add to that news yesterday from the new york fed of a drop in consumer inflation expectations. but the market is marking down the outlook for fed rate cuts. sometime between when i went home last night and came in this morning, i don't know exactly when it was, maybe it was because of the fed speak yesterday, the chance of a december cut now 63% from 87%. january falling to 18. and what is interesting to me is not so much the other two months, but this one here, march now below 50% at 47%. one of my guys who trades this stuff says might have been a couple of big trades that made this happen, not sure.

but tom barkin presented the idea that inflation could fall or get stuck where it is. as two equally possible outcomes. and minneapolis's neel kashkari said only an inflation surprise could derail a september cut. i don't know. maybe there is future prospects from the new administration or some kind of combination of the two or some crazy trading going on. i don't really know. it is an interesting rethink that i didn't hear barkin and kashkari yesterday as being overly hawkish. >> if they changed and decided not to, i just think about the political blowback that might come if they didn't cut after signaling an end to this point. it would have to be a pretty big inflation number, i would think, to be able to say -- >> you're echoing what neel said yesterday. it would have to be an upside surprise to inflation. couldn't imagine that the reason for not cutting in december would come from the employment side. so that's pretty much what he

said. >> does the lower probability force the fed to take a look at what they're doing or does the fed start looking at what they're doing and then probability changes? what happens first? >> it is a really early for an existential question, like -- >> you know what i mean? >> chicken or eggs. >> it is a combination. >> it is true. i listen to jeff gundlach and he thinks the fed follows the two. i don't think it is that simple. probably talking to jeff about this, because he's a super smart guy running a lot of money, making a lot of money on it, but the idea the fed i think does sort of lead the 2 and the 2 leads the fed, it isn't the single way the information is transferred. >> gundlach. >> he's not on "squawk box." if he's not on "squawk box," i don't know him. >> he wants his views known, he needs to come on the show. it is something worth watching. i don't know if you have the october 25 contract in the back. i'll look at that now. that's been the better metric

for knowing where we're going. joe, this is your favorite argument, right? about the terminal rate. right? so if you guys can get that, what you'll see is that we're now at 392 and if you go back to mid-september on that chart, we're 280. >> we know that -- >> we put 100 basis points of cuts back in. >> we know there is a term inal rate except for maybe our time here, right? >> that's for sure. >> we made that point the other day. you said it ends and then, of course, we know it never really does end. >> it doesn't end. that's a constant discussion and -- >> there is no terminal rate, just a near terminal rate befor next terminal rate. >> it is all points in time. >> it moves in time. it is a good point, because the interest rate balances the supply of savings, with the demand from investment. that's what keeps going. and there are things that the new administration is talking

about that would change that supply and demand ratio. but also kashkari yesterday did talk about the idea that he believed that the neutral rate was indeed higher or the terminal rate because of higher productivity, other stuff coming down the pike. and, beck raises fabulous points about how the fed responds with whatever the new administration does. >> want to be political, but it is hard not to live in that, you know -- >> we don't have to be powell. we just get to lob -- >> a lot easier. a lot easier to sit on this side of things. thank you. >> thank you. when we come back, more on "squawk box." former u.s. ambassador to japan is going to join us to discuss president-elect trump's cabinet and key advisers. later, ceo of cava will join us to discuss last night's earnings release and state of fast casual in the food industry. the stock up nearly 300% this year. it has been on a remarkable ride and we'll talk about that when "squawk box" returns.

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♪ ♪ ♪ something has changed within me ♪ ♪ it's time to try defying gravity ♪

♪ ♪ welcome back to "squawk box." president-elect trump is going to meet with president biden in the oval office today 11:00 a.m. eastern time. trump is expected to meet with house speaker mike johnson. also going to be meeting with new senate majority leader, that's going to happen after republicans vote this morning on the chamber's next leader., assuming one is picked. in other transition news, trump announcing the creation of the department of government efficiency and tapping elon musk and vivek ramaswamy to lead that group. they technically won't be part

of the cabinet, but almost as we said a blue ribbon commission of sorts, almost as on the advisory side, which allows them to stay as we talked about in the private sector. joining us now, one lawmaker reportedly up for multiple positions. that doesn't describe exactly who this gentleman is. tennesseesenator bill haggerty, you're called a trump whisperer, i'm looking at a politico piece, you're the hope of many mainstream republicans that you can be a governor on what it says in politico on some of president-elect trump's most extreme impulses. so you're almost an enigma. how would you describe who you are right now? >> i think that article completely misses the point. i've just been good at understanding president trump's

policy objectives. there is so much noise in the media, it is hard to ascertain that. >> really? tell me about that. >> i've been in a position of implementing his policy. we did so successfully when i served in his administration. what we're talking about is the ability it see what the goal is and execute on that goal. i've continued that process coming into the senate, i brought 17 members of the former administration over on to my staff. we have continued to advocate for policies that place america at the forefront. >> you know, i'm looking at some of the people that have -- i don't know, complicated relationships with the president. they still, they love you and they say you could be commerce, you could be treasury, you could be state. it is really across the board. can you give us any -- can you foreshadow what might be in the cards for you, senator? >> the decision that presint trump is going to make on his cabinet are highly personal to him. i've known him for a long time,

i get along with him very well and have the highest respect for him. in that regard, it is his decision. i'm the last person that will get in front of that. he's going to put together a wonderful team. already in the process of doing it. i've been very impressed with the people he brought on board so far. >> you're in the middle of what has turned into quite the saga with between the three possible majority leaders. and it is really been quite remarkable. i think you would agree that sort of the ascendancy of rick scott as a -- i don't know, i hate to use the word maga, but it is used so much as you say by -- in the media. he's almost the maga pick right now. that could backfire. this is not supposed to be a public campaign or people aren't supposed to get endorsements for this and then people vote anonymously. could that backfire, that people don't like being forced into what they're going to do in the first place, which might have been thune or cornyn? how do you expect it to play out? >> i don't think it is going to

backfire. and after the election, look, i campaigned with president trump throughout the past month or six weeks, i was on the trail with potential senate candidates. what i can feel is very real. there is a palpable desire for change here in america. and what i've told each of the candidates is that it is absolutely critical they work arm and arm and hand and hand with president trump as he affects the agenda that the american public overwhelmingly voted for. an agenda that they supported and that we have seen absolute support, but we haven't seen in decades. 36 years since we have seen a landslide like this. that's a sea change. and i came out after the election and said i'm going to endorse rick scott because he's most aligned, his stated positions are most aligned with that of the trump agenda. i have seen many more senators come along and say they're going to vote for rick scott too. we'll find out later this morning. that will be my expectation now, a major change in the senate. >> do you think it is not anall

anallagous to republicans that when we see republicans go too far, that the country sees a reckoning, don't you think there could be some losses in both houses if it gets too, you know, if you have rick scott, you have, you know, all the cabinet appointments and you have vivek ramaswamy, and elon musk and president trump, it just sounds like it could be -- you think americans are ready for this and want this? >> well, i think given the magnitude of the landslide that president trump won with, if we don't step up and address the agenda that he ran on, that's where we run the risk of losing a majority. i think we got to step up and deliver on the promises that were made, that's our objective right now. president trump is putting in place people -- look at the government efficiency department that he's putting in place with vivek ramaswamy and elon musk, two extraordinarily talented individuals that will look at what i see as the most ineffective bureaucracy that

i've ever dealt with. there is a huge opportunity to reduce cost there. you think about the deregulatory thrust, he'll put us back into the oil and gas business again, every one of these activities will lower inflation. that's going to have a dampening effect on inflation. it seeps most s it seeps most eems most are loe package coming through. they need to be 120% focused on bringing together tax package early next year that incentivizes more capital investment in america. we're not talking about the cuts, we're talking about incentives that will create a faster growing economy. i think the american blic will resoundingly support us. >> we were talking about what elon and vivek will come up with. it will be a recommendation and it will be up to you and other elected leaders to follow through or not and vote on what they're doing for the most part, unless you think it will come with executive action. how does this take place? >> i think it ill be a mix.

that's a very insightful question. we look at what they come up with. and decide what can be done rapidly through executive orders, what we can put into legislative product here, and, again, that's why i think it is critical we have a leader that is fully aligned with the program. that's what we're going to need, that's what the american public expects. and it will be a mix of outcomes. but we're ready to work in the senate and house of representatives i'm sure as well to align ourselves and make certain we deliver a more efficient and more effective economy for the american people so their lives can get better again. >> do you think it would be better for them to go super broad and bring you a big package that has all sorts of offsets and this and that, or do you think they should sort of come to you, specific with items as they come. i ask, because if you remember simpson bowles was a large and nuanced proposal but required a lot of buy in on a lot of different sides and never got there. >> i'm old enough to remember, i

met peter grace after the grace commission went through the process. we have come at this before. and i think you ask a very insightful question, but one that is not mutually exclusive. i think we can find near term opportunities, low hanging fruit, we should go after with gusto. at the same time, i hope president trump does challenge them to come up with an overarching framework we can use both legislatively and through executive orders to come in and make major change that will improve the efficiency of what is the world's largest bureaucracy. it has got to be addressed, needs a hard look, i can't imagine two more talented people to lead that effort than elon and vivek. >> very quickly, on that point, i think back to simpson bowles and a big part of the problem was they were trying to balance the budget by making a lot of cuts and also raising taxes and revenue in other places. i don't think this committee is going to do that or this department is going to do that. they're looking for ways to cut cut out waste. is that an easier lift on capitol hill? >> i think so. and if you think about with the

treasury secretary's charge, getting a tax package through early in this coming year, that will incentivize investment, help lay the groundwork for high growth here in america is going to be absolutely critical. to do things together will create an expanding economy at the same time a more efficient government, that's a great way to get at the deficit problem we're facing. >> that's the hard thing to handicap, senator. if you do -- people think deregulation is very bullish and could grow the economy, provide a real spark for the economy. then, if you're cutting almost to the bone in terms of spending, that almost sounds like it could be deflationary, but also could slow growth. layer in the tariffs and what might happen from there, i don't know what kind of gdp growth we're looking at, at that point, it seems like they're -- there are opposing forces in certain cases. >> as you highlight, joe, there are multiple vectors here we got to work on. if you think about tariffs, a lot of angst over this, but look

back at history. after world war ii, the united states put in place favorable trade terms with countries like japan, europe, whose economies have been devastated. we should have time limited that, put some sort of limitation because these are fully developed economies now. we're worried back at that time they would turn toward communism and socialism. that's not the case. fully developed economies, yet they have much more favorable trade terms than we do. we do not have reciprocal arrangements there, that needs to be fixed. i think what we're going to see is more manufacturing move back on shore. i saw steve madden will bring more shoe operations here. that's good for america. rebuilding the manufacturing base is critical for national security. let's incentivize more investment, make it easier to invest here and get regulators back to the point of regulating markets as they should be, rather than trying to implement social policy that creates all types of added confusion and certainly extra cost. let's make this market as strong as possible and we'll see america thriving like never before. we saw that in the first trump administration. >> you've been ambassador to a

key country, senator. is there one of these posts that we mentioned that you feel like you would be really good at, most qualified for? is there one you would want in particular more than the others? you're not going to answer? >> as i mentioned, i'm not going to get ahead of the president. if i were dumb enough to answer that question, i wouldn't be smart enough for his cabinet. i've been honored to serve in his administration and i'm honored to serve the people of tennessee and the united states. >> we better not hear, hagerty, so you don't know anything right now. >> i think the president is focused on getting a cabinet together that is going to serve the people of america. it is very personal decision for him, so, it is his choice. >> as long as we had you here, what the heck, maybe we would figure something out. good luck, senator. and we do appreciate you. >> thank you very much. >> all the time you spent with us this morning. thanks. more to come on "squawk box"

this morning. stocks on the move and then former td ameritrade chairman joe moglia on the post election rally. and later, eric cantor is going to be with us, talking deal-making and president trump's policies. "squawk box" coming right back after this. >> announcer: time now for today's aflac trivia question. which company has topped the fortune 500 list for 11 years in a row? the answer when "squawk box" returns. aflac pays people money for the expenses health insurance doesn't cover. aflac! health insurance does leave a gap. but aflac gives people money to help close that gap. aflac! oh! coach prime got one on the line too baby! uh huh! see that's how you hold up a trophy. trust me. get help with expenses health insurance doesn't cover. find an agent. get a quote at aflac.com. i hope you're hungry. i'm glad i brought my own dinner. uh huh.

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>> announcer: now the answer to today's aflac trivia question. which company has topped the fortune 500 list for 11 years in a row? the answer, walmart. all right, let's look at the futures this morning. red arrows so far. you got the dow futures off by 75 points. s&p futures down by 6. the nasdaq off by 21. we are awaiting that cpi number that is due in just an hour's time. and in the meantime, let's check in with dom chu with a look at the morning premarket movers. what are you seeing, dom? >> good morning, becky. earnings reports are the big driving forcemorn morning movers today. we'll start with spotify.

shares up 8.25%. it actually missed both profit and revenue estimates, but its monthly active users were better than estimates, grew 11% year over year. its current quarter forecast topped expectations. so those spotify shares up 8%. moving to shares of rocket lab, which are rocket fuel this morning, up 25%, 26%. this is the space launch company and spacex competitor. it beat profit and revenue estimates and forecast current quarter revenues well ahead of expectations and announced the first customer for its upcoming neutron rocket. that stock is nearly tripled over the course of the last three months alone. we'll cap things off with online gambling fanduel company flutter expecting expectations, those shares up 5%, but it did warn the results were partly offset by unfavorable sports results. that echoes similar comments you may recall sports competitor draft kings made during the last week. now, they still raise their outlook for the full year off the back of strong u.s.

momentum, flutter also announced, by the way, it started the first leg of its $5 billion stock buyback program, so flutter shares, fanduel parent company up 5%. back over to you. >> dom, thank you. when we come back, a food delivery deal for investors. and then cava ceo brett schulman will join us to talk about the fast food chain's latest quarter and much more. "squawk box" will be right back.

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>> . welcome back to "squawk box." food delivery startup wonder buying grubhub from europe's just eat takeaway. onder is paying $150 million in cash and assuming $500 million in debt. wonder founded by former walmart executive mike lore in 2018. the company has been building out the kitchens that house multiple restaurant brands with dine in and elivery options. wonder can tap into grubhub's fleet of delivery drivers and create a meal time super app.

that's the goal. we'll see how it all ultimately works out. not a ghost kitchen, exactly, the way the other guys are doing it, but -- >> easier ways to get incredible meals. >> you know about ghost kitchens? >> yeah. >> that's the other way this is happening. this is like a pseudoghost kitchen. >> all these things are happening while the diatribes are soaring. >> i've ordered from wonder's place. they have pretty healthy food. you can eat the solid, you can get healthy food too. a lot of options. >> there is a lot of folks doing it. goop kitchen, that's a ghost kitchen, goop kitchen is a ghost kitchen. >> goop? >> in l.a. they do amazing food. there is no place -- you can only get it on the app. >> and i don't know anybody who has eaten in the wonder places yet. but i know a lot of people have had it delivered. >> when is doughnut day? i always look forward to that. >> first or second week of june, right? >> so you know? >> just because -- i always look

forward to it, as you know. coming up, joe moglia on the retail investor, the trump transition and market expectations. he'll join us after the break. as we head to the break, look at shares of low cost carrier spirit airlines. the story there, b, the b word, bankruptcy. spirit reportedly preparing to file within weeks after merger talks with frontier breaking down. the stock down 65%. now trading at just over a dollar a share. you're looking at 94% down. we're coming right back. mr. moglia will be with us in a moment.

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welcome back. joining us right now with how investors are reacting to president-elect trump's victory is joe moglia, the former td ameritrade chairman and ceo, the coastal carolina executive adviser. i want to talk to you as a former ceo and leader in somebody who looks at what has been happen, what is proposed from the trump administration at this point. markets are pretty excited about what's happening. what do you think? you want to look at the pros and

cons how you would be looking at this if you're trying to run a business right now? >> i think from a business perspective, most businesses are going to be reasonably excited. just the fact that he's pro business, just the fact that he's going to be aggressive with deregulation, all those things are positive, talking about lowering the corporate tax, all those things are positive. by the same token, while the market has gotten off to a tremendous start and there is a lot of euphoria as far as the market goes, it is still a lot of questions as to how is he actually going to execute all the things he's got to execute. what is musk really going to wind up doing with regard to the $2 trillion that they have to make. are they going to make those, can they do it legally? what is going to happen? i would think with regard to the tariffs that trump keeps talking about, that's probably a negotiating tool. i would think on his part. if he's selective and strategic with that, that could be very helpful. if he's doing some of the things he talked about, 100%, 50%, those things are not -- they're kind of crazy.

i don't think he's going to do that. i think right now from a business perspective, and investor perspective, it is certainly far more positive than negative. >> you talk about markets' initial euphoria and the questions that remain. look, we have seen a huge reaction and if you want to look through the areas that have particularly done well, maybe in an area like bitcoin. >> well, several years ago, trump wasn't a big fan of bitcoin or cryptocurrency. now he's mr. bitcoin. and we're going to have a strategic reserve, he's going to have friendly regulators with regard to that. wants the united states to be the center of the cryptocurrency world. those things are incredibly positive. very specifically bitcoin, ethereum, et cetera, this is a home run for bitcoin. that's very, very different than where he would have been several years ago. but a lot of people have changed the tune from where they were several years ago.

jamie dimon talking about bitcoin being pet rocks. all those things have changed. and bitcoin, i think, it is legitimately here to stay and i think it is going to have significant growth head of it. >> looking at mark warner is going to stay, senator mark warner is going to stay at the intel, you know, the democrats' top intel, committee chairman, that leaves the way open for elizabeth warren to go to the top democratic slot on the banking sector. is that something that the finance company should worry about or if they don't have control in the senate, okay, so be it? >> i think just having warren heavily involved with financial regulation or finance in general or banking in general is not a positive thing for finance. >> clearly. >> but because the democrats are not going to have nearly the authority, the influence that they had in the past, and because trump will come out -- is coming out so powerfully, in the different areas, in terms of that he really feels strongly about, the deregulation, et

cetera, i would think the administration and the sweep of congress will overshadow what warren's perspective will be, that would not have happened a year ago. >> right now we're following so closely what the trump administration is doing in the days leading up to the inauguration to get ready for things. but if you talk to business leaders, they're doing the same thing. they are talking very specifically about their wish list, things they would like to see happen, they are preparing their lobbyists to try and figure out some of these things. what kind of things would you be hearing behind the scenes about what is on the wish list, maybe for financials, maybe for other areas. >> i think the biggest thing is that deregulation, so we had the s.e.c. has not been particularly friendly toward big business. not been particularly friendly toward m&a, not particularly friendly toward cryptocurrency. all those things are going to change now as we go forward. just that, just that, think about the possibility of m&a going forward and the impact on

financial services and the entire brokerage world. we haven't seen a whole lot of m&a activity or investment banking revenues. and i think that is going to be a home run, spending the next year or two. everybody is going to have their individual issues, but you got a president now that is very much pro business and very much pro deregulation. and i can't imagine too many businesses that are not going to be -- whether you like him or not, whether you voted for him or not, not going to be excited about the forecast for their actual businesses. >> if you have business exposure to china, and there are a lot of u.s. businesses that do, how do you feel today? >> i'm concerned about that. china does not like us. china has all sorts of -- china had real significant issues with regard to the economy, the spend over the last several years. they have a horrible, horrible -- 20% youth unemployment rate. because they're a totalitarian state, the chinese government said we're not going to count

that -- >> a lot of people trying to figure out what am i supposed to do with apple, for example? what do you do with starbucks? there is a lot of ceos in america that have massive smiles on their face right now. but i also think it is a more complicated smile for some. >> i agree. i agree. i think you got to look at -- how much of your actual percentage of business do you actually have in china? how much is that already affected, and how much is that going to continue to be effective going forward? if you don't believe it is going to be affected, you're naive. a lot of times where ceos, they -- they -- their objective is the shareholders and the people. sometimes they think it is about them looking smart in front of the public. if you have not been paying attention, over the span of the last couple of years, regardless of who is in the white house, the issue with china is a serious issue. like after covid and all the businesses that did so well during covid, and so many businesses had troubles later on because they anticipated that the demand they had for their

product was going to continue for the next two or three years. that's not reality. >> do you have a take on one of the best performers in the last week, which is tesla? and whether that makes sense to you. i don't know if that's a meme stock, if you think the i.r.a. goes away, all the benefits to the boards and the general motors disappear. there is going to be protection from china evs coming in, they're the last man standing. is that the bet? what is the bet? >> tesla, if it is tesla, tesla is not a meme stock. tesla is not a meme stock, not going to be a meme stock. >> is it that they can do auto pilot in a way they didn't before? i'm trying to understand how the stock could be worth 30%, 40% more in a week. >> the only reason why is it is an emotion associated with that, the relationship between trump and musk. if you own tesla, to trim back a little but of tesla now, i own tesla, and i'm not getting out of tesla, i think trimming tesla

with -- a handful of stocks expanded over the last couple of weeks, is it prudent for the investor to trim back, there is emotion associated with that. when you get an emotional reaction, the stocks either do extra special good or extra special badly. but i'm not worried about tesla long-term and i think musk will figure it out. and the fact he's buddies now with the president and they're best friends, those things are not going to hurt them going forward. that doesn't mean they're not going to have any issues or problems. if some ceo figures it out, i think trump -- musk will figure it out. and i like to think he's been thinking about this all along. >> did you buy bitcoin? do you own any bitcoin? >> i do. the reason why i own, i've been a fan and friend of cathie wood. i got bitcoin at 217 when she was talking about it as well as bitcoin. >> you have your own wallet. >> i don't have my own wallet, but i own bitcoin and have owned it for a while.

i've got -- i got grayscale, cathie wood's got some funds that are specific away from the etf, more hedge funds. >> guys like us don't usually own it. >> you're not allowed to own it, right? >> yeah, we are. >> you can own bitcoin? >> they saved me from a lot of other stuff. >> so do you own it? >> i owned it since 2019. >> so two years after me. i think i told you. >> no, you didn't. no, that was somebody else. >> that wasn't me. >> joe, thank you for coming in today. >> thank you to all of you. >> joe moglia. right now, a quick check on the futures. this morning, we have been under a little bit of pressure. right now, dow futures down by about 90. s&p futures off by 10. the nasdaq down by 50. we're going to get some investment ideas and talk markets with chief investment officer saira malik in a little

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coming up, cava ceo brett schulman on the fast casual food chain's latest quarter, the state of the consumer food prices, all next. and we're counting down to inflation data, october cpi set to be released. economists expecting headline prices to tick up year over year to 2.4%. those numbers and market reaction is straight ahead. we'll be right back. ♪♪ i have type 2 diabetes, but i manage it well. ♪♪ ♪♪ jardiance! -it's a little pill with a ♪♪ ♪♪ big story to tell. ♪♪ ♪♪ i take once-daily jardiance ♪♪ ♪♪ at each day's staaart. ♪♪ ♪♪ as time went on it was easy to seeee, ♪♪ ♪♪ i'm lowering my a1c! ♪♪

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>> welcome back to "squawk box." this morning, take a look at this, shares of cava, they are surging just this morning, again, and they're up more than 400%. are you ready for this, from last year. probably wish we told you that a year ago or the fast food chain reported stronger than expected third quarter profits and revenue raised its full year guidance, same store sales jumping 18%.

talk about a growth story. joining us right now to break down the results is cava co-founder and ceo brett schulman, stock up on the back of this, close to 17%. dare i ask, do you look at stock price? and what is going on? no, like, inside the head office, how is -- i assume there is a lot of smiles. >> well, we tell the team stock is going to go up and down every day. and the night before the ipo, i said to the team, look, this is not the destination, it is the next chapter in our journey. if we keep our heads down and focus on our mission, that over time that stock price will go up and it will take care of itself. >> talk about taking care of itself, what is the growth story from here? that is the big question. people are betting it will continue on pace. when you see a stock move as far as it has moved, there are others who say can this keep going at this rate? >> yeah, well, first, i want to give credit to our 11,000 team members strong who deliver on that mission every day to bring heart, health and humanity to

food. our oal is 1,000 restaurants. this year we have been able to exceed that a little bit. we raised our guidance to 56 to 58 new restaurants, closer to 17%, 18% and we gave preliminary guidance for next year at least 17% plus given the health and strength of our real estate pipeline. >> when you look at 1,000 restaurants and what that looks like, there is a moment oftentimes where you get into this kind of period where people start to question whether you cannibalize business in other restaurants. where is the -- what is the magic number where it gets a little bit more complicated for you? >> we see that runway extending every year. i think the thing that gets us most excited and i think has investors excited is we have so many ways to win. when you look at the broad appeal of our mediterranean cuisine, the consistency of performance across the country, whether it is brian park here in manhattan or in boston or mobile in alabama or we just opened in merriam, in kansas. you look at the top restaurants,

it is everything from suburban shopping center we have an end cap location, exurben small town with pick up by car digital lane, freestanding building, college adjacent site or urban location with residential. it allows us cannibalizing exis locations. >> we did hear about you early on from steve case was here. i think it was ted who brought it to steve, i think, if i'm remembering this correctly, but they identified you really early, and it's great food. it's healthy, you feel like you're eating well when you're getting it. >> spicy. >> it's good food. what's the mote that keeps others from copying you? is it getting big enough that it's too hard to take you on? >> we believe we are the category defining brand, and we are creating the next cultural cuisine category in mediterranean. so whether that's our over 90,000 square foot of production facilities where we make our fresh dips and spreads, just like my cofounder used to make

taziki, with fresh dill, fresh cucumber, taking that complexity out of the four walls of our restaurants and delivering to you with the quality, and cost effectiveness we're able to produce, and our technology investments, digital order ecosystem, and our people and culture we have built this brand on delivering that mediterranean hospitality and mediterranean cuisine. >> what kind of pricing power do you have right now, and what's happening in terms of food prices and the like, we keep talking about inflationary pressures? >> we see low digit inflation on the food beverage packaging side. as we have been able to leverage the model, it's a powerful model. you think a walk the line format as the assembly model. allows us to invest in food quality and invest in our team and invest in our guests. if you go from the end of '19 to

the end of '23, we took price about 12% during that time period when cpi was up almost 18%, and the department of labor noted fast food was up over 30%. at the same time, we have been able to expand restaurant level margins. this year we took less than 3% price, again, trying to invest in our guests, and i think that's what you've seen drive the traffic growth. we think we have pricing elasticity. we're not looking to take it just because we can. >> what percentages of the business now is walk-in versus pickup via mobile? >> i think this is really interesting. we have been taking a bit of a contrarian point of view, the demise of the dining room, we have great channels, 36% of our revenue came through those channels. we have physical channels, you can walk down the line, have the interactive experience and share a meal in our dining rooms, that's about 64%.

>> i think it's one of the great challenges starbucks is faced with. they have had success with the mobile ordering, but as a result, you walk into the stores, you are like a second class citizen in some cases, you ordered online first, you're winning the sort of competition of who's going to get the attention of the barista. how does that work? >> you have seen the growth of fast casual as an industry, and you have seen other segments, like legacy, casual dining shrink. our format and the way we're oriented with our physical spaces is able to deliver both the digital and physical channels without creating a lot of that friction. brands are trying to figure that out in many ways, whether leveraging technology, automation, or the design of restaurants to be able to, basically what we have tried to do is create a multichannel format and give you the control of opting into your channel of choice depending on what your need state is, and where you are in the moment. >> i want to thank you for coming in. congratulations, it's been a hell of a run. >> good to see you.

>> thanks for having me. it is just after 8:00 a.m. on the east coast, you're watching "squawk box," i'm becky quick along with joe kernen and andrew ross sorkin, and among told's top stories, key inflation data coming this morning. the october consumer price index is due at 8:30 a.m. eastern time. forecasters expect a rise of 0.2% from september, and 2.6% year over year. president-elect trump tapping elon musk and former presidential candidate vivek ramaswamy for what's being called the department of government efficiency. that is expected to work outside government to provide guidance. members of congress will end up getting a say on any recommended spending cuts. >> and check out shares of rivian, volkswagen increasing its planned investment in a joint venture with the ev maker. the size of the deal could total $5.8 billion. that would be up from an initial investment of $5 billion. the first vw models to use

rivian software and architecture could arrive as soon as 2027. >> the futures have been in the red for most of the morning, after a little bit of a mini selloff yesterday. let's get to mike santoli, sort of some bond nervousness. i guess it's called a note, the ten-year, right? >> yeah. for sure. that got stock market's attention, joe. bond market reopens after the veterans day holiday. the sellers came in, we're testing the limits of where yields can go and have equities be comfortable with it. when you look at the s&p, it's kind of hesitating at these all time highs after the sprint hire in the last week, which cked on to a longer day up term. when it gets to short-term, a little bit of a stretch to the up side, right here, back in mid-july, that was around 5% above the 50 day average in mid-october. 4 1/2 at the highs a couple of days ago. you were about 4 1/2% high. obviously it doesn't mean that

the up trend is over. often it wouldn't be surprising if you get a backing off consolidation. these levels in the mid 5800s, that's the former highs, perfectly routine if we went back and revisited them in the short-term. here's a changing of the guard type of chart. semiconductors, versus capital market stocks. that's brokers, investment banks, exchanges, asset managers, private equity. that's in orange. kce. this is a two-year chart. it shows you, it was about semis, including nvidia in the halfway part of the year. that started to converge, we got clarity on the fed was cutting into a likely soft landing in july. the massive ccelerant, m and as, and deregulation of the finance. it's getting heady there. the vertical move obviously shows you what can happen on a short-term basis. take a look at commodities, three-year chart of the commodities index. we're going to be worried about

core inflation a little while. headline is a little bit subdued because of what's going on in commodities, despite that kind of reflation type trade in equities over the last week, guys. >> mike, thanks. let's bring in saira malik, chief investment officer at nuvine. the inauguration is not until january 20th. mike just showed how much the financials have already moved based on prospects for a different administration. are these trends going to continue? or have we seen most of them move already in the lo a lot of that could be impacted by a new administration? >> it's the backup in the ten-year yield pouring water on the trump trade. markets are looking at taxes, tariffs, and deregulation. the concern is how is that going to impact the deficit economy, and inflation? first of all, we'll get cpi shortly, and will all of these

enactments cause inflation to be more sticky. looking at the deficit, is this going to cause it to increase or will elon offset, and the economy, we'll see less fed rate cuts next year. how do we think about markets? first of all, markets will continue to broaden. that's going to be important. we're going to move away from technology stocks leading. we need to consider valuationings here. the s&p 500 is trading at 22 times forward pe. if you look at the last quarter century, the last time we were higher, march 2020, so we definitely have pulled forward some of this trade, and markets are not cheap. >> i actually said that at the top of the show, i wouldn't want to come in at 23 times earnings as a new administration necessarily. and you said will the economy overheat? isn't the range of possibilities from overheating to actually slowing if elon musk has said,

we do what we'd like to do, there will be near term pain, and i think he's talking about certain sectors of the economy. i mean, the government supports a lot of parts of the economy, not necessarily the best use of capital, but it just is a fact. >> sure. decreased government spending can have an impact. also tariffs can have a wild range of outcomes that could cause a slowdown in the u.s. tax cuts, of course, positive for consumers and corporationings.corporations. there is one area of the market that looks cheep, small caps, trading at a two-decade low versus large caps, and all will be positive for small caps. more domestic consumption. we probably aren't going to get five rate cuts by the end of 2025. lower rates, we will get some of that. >> how much is already paid forward in small caps? what have we seen in the last three months? >> we have seen a little bit of

a rebound, still at the very cheap valuations. a play on demographics and ageing and home care, which is less expensive than hospital care. lumentum, an optical photonics play, a positive play on data centers and ai, that's another company we like. there's great small companies trading at discounts, i think that's where you want to be fishing to get some exposure to the u.s. good valuations. >> could there be a time where people that own large amounts of bonds, vigilantes where they say enough is enough, 4 1/2, if the deficit, if he does cut taxes, if he followed through on every one of those promises of who's not going to be taxed and then continues defense build up and cuts corporate taxes, isn't all that going to add to the deficit? does there come a time where enough is enough or does that never come? >> i think there's a time markets get concerned.

you saw last year where the ten-year hit about 5%. that was concerning across equities and fixed income. fixed income, you need to be selective. we like leverage loans, less dependent on the degree of rate cuts we expect. bigger picture, it's not all about overheating. we'll be watching closely the employment markets, and payrolls mr. coming in plus 12,000. we blamed it on strikes and storms. i don't think september plus 254 was a sign of strong employment mashlgt. market. it's coming back in balance. the wide range of outcomes is uncertainty. employment is slowing. the consumer is dependent on the high end consumer. we may see, you know, the economy actually more balanced than we think, and it may not be as overheating as much as investors are concerned about. >> is it true you've saved half of your most important stuff for delivering? that you think, and we should point out, you're participating. >> i am. >> so you really didn't bring

your best stuff right now. >> joe, i always save my best for you. >> you did. but you have some other stuff, then, for delivering at alpha. it's an incredible roster, including sarah for speakers. there's still time to register for the event. it kicks off at 1:00 p.m. eastern time. when we come back, some breaking inflation data, plus, former house majority leader eric cantor will join us. "squawk box" will be right back. deadline in five! finished and sent. [sending swoosh] we have tight turnarounds. at&t business helps us deliver. okay! client wants his head bigger. wow, fast response. sent! okay, oop! even bigger. sent. [sending swoosh, notification alert] still bigger. okay, yeah i'm not doing that— [typing noises, sending swoosh] i think it still looks good!

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welcome back to squawk box this morning. a very busy day ahead for president-elect trump. he's going to be meeting with president biden at the white house this morning. that's supposed to happen at 11:00 a.m. this morning. house speaker mike johnson expected to meet with trump. we'll be finding out about the leader the president-elect will be dealing with in the senate. hopefully we'll learn that today. the race to succeed mitch mcconnell is set to conclude today. joining us on all the former republican house majority leader eric cantor, now vice chairman

and managing director. good morning to you. >> great to be here. >> i want to hear all of your thoughts about how this is going to impact business, but to the extent we're talking about what's going on in washington today, do you have a gamble here on thune? do you have a view about rick scott, everything that's going on there and everything else? >> i think it comes to the fact that there is, you know, 27 being, i think, the magic number that one has got to acquire in terms of votes, and if rick scott's in there, he could be the spoiler where they go to a second round. i think that is my sense, looking from the outside. and, you know, these leadership races, typically, even in the house, outside forces don't really make a lot of difference. and let's see if we're in a new era now. i do think that -- >> even when the outside force is donald trump? >> is donald trump. yeah, i mean, that's what i'm saying. you know, the fact that there have been protests from what i read and hear on -- at senators' offices and their homes, that is

new stuff. it's just not -- >> but elon musk has, and -- >> this is a clear signal being sent. i think also trump realizes, you know, this is just -- has always been an insider's game, and not sure he can influence it. at the end of the day, it's a secret ballot. how secret it is after the vote. >> there have been a couple of senators who have said they're going to vote for rick scott. >> somebody like marco rubio, but that's understandable. it's a fellow state, you know, senator. >> he's now part of the cabinet. >> haggerty, lee said it. >> there's also people vying to, you know, be a part of the administration, and there's a signal that's been sent. i do think that, you know, we'll see how it plays out. my gut is it will stay in the sort of more traditional lane. >> talking about this administration, by the way, on the finance end of it, i assume you were spend ago little bit of time trying to figure out who may ultimately be the treasury secretary, who may run commerce.

>> it's a very -- >> who's on your list? >> listen, i think what president trump has demonstrated is not too dissimilar from what has gone on traditionally with modern day presidents. they want people who are loyal to them. they want people who can execute on their agenda, and that's exactly what's happening here. and so i don't think it's so outlandish, this process. >> do you think we're talking about lutnik, scott besen? >> i have no ability to see who's really in the lead right now, but i think there's one thing clear, that we are about robust growth, and that's where the focus is going to be. >> are you absolutely sure it's going to help your business? and i'm thinking about peter yesterday orzag who has a real job. it actually matters. he was in a good mood. i swear to god, he looked

like -- it didn't go the democrats' way, but i almost said to him, you are happy. you are happy. >> there's a reluctant acceptance of the fact -- >> if you're in a business like lazard, it's going to be better for you. >> what we have seen is typically, and you know, in my short time on wall street that's getting longer now, typically washington is a side deal, right, and people are figuring out how to work around it. i do think over the last six, eight weeks, there has been a real pause to see what's going to happen, and now, you know, we've already -- we've all seen the return to some of the market of the sponsors now. you know, we have all seen, you know, sort of people now. i think a breath of fresh air on the regulatory front because you think about the changes that are in store at the ftc, there was nobody like lina khan, and i think it was more individually driven with support from the

biden white house, that will be gone. and we're going to have a much, i think, more clear visibility on what regulatory prospects are in m and a. yes, trump has been and was a little bit active in that, but i think it was isolated. >> in terms of where that deal activity comes from, besides, by the way, just going to -- there's going to be the a lot o great fees coming to the investment bank, flying on the back of the news, so that we know. the question is, you look at some of the smaller banks, do you say it's going to happen in financials because, you know, we have 4,000 banks in this country. are they going to come together? do you look at energy? clean energy? there might be some companies that are going to actually struggle that may need to merge for other reasons? >> 100%. i think all of the above. we see, you know, activity, dialogue is strong across sectors now, and i think a lot of it does have to do with just the sentiment that came with

this election. >> why are you pointing at me? >> because i think you're in agreement that we're going to have now a much more sensible regulatory outlook, and it matters. incentives matter to business, to investors, it just does. >> big tech being able to make acquisitions, do you think that's in the offering? because that's been one of the places where it's been less clear, that even in a trump administration, if apple, if google, if amazon wants to make a big acquisition, or even, by the way, a small acquisition that is challenging, i ask, by the way, because there's questions about whether they should be relying on media companies and the like. >> i think, first of all, it starts with the trump administration has individuals there who are business people. that is very different from what's in the administration now, where you have ideologues, you have academics, and they have never been on the side of trying to make a decision, run a

p and l. so you start there, and i do think that when you look at the overall discussion about m and a, and the option of m and a for a founder, for someone who sits in silicon valley, many of whom now are very favorable towards a trump regulatory framework, m and a is an option, right? it's an exit option. it helps our in its dynamism and capital to its most efficient use. overall, the sentiment has shifted. who knows in particular instances -- >> the reason i ask, you do hear from president-elect trump, i want fair trade, i don't want to break up the company necessarily, but then i wonder about, you know, for the last couple of years, you have seen open ai make partnerships with microsoft in a more normal world, microsoft might have bought an open ai. anthropic might have been bought by amazon or google, and whether

those type of things can happen in this new universe? whether they should is a different question. >> right. i think, again, there will not be this construct that lina khan, jonathan cantor, and ultimately, it was elizabeth warren who went and enabled these individuals to go sit in those seats and adhere to a framework which was completely anathema to what m and a is about. so i think we've turned the corner on that. we're going to see a much more, i think, conventional or traditional approach. i'm not saying that you're going to have, you know, a concentration of power that is going to squelch competition, no. >> we have to go. i have one last one for you. different, but pete, who is now going to be up to run the pentagon, i don't know if you want myself or joe or becky to run the treasury, i mean, i guess we could. >> you know, i know a little, but i'm not ready for treasury.

>> we just play it on tv. >> exactly. >> everyone at this table has been to a respectable -- has respectable education and background, and i think -- >> bruce springsteen and harvard. >> i'm not holding that against you. >> i would assume you would hold that against him. >> it's not the traditional route. >> it is an interesting pick, you know, again, i go back to my original statement, in modern day, presidents have insisted on loyalty. i think that what we're in store for in this administration is one that's being heavily driven out of the west wing. i think when you look at not just these appointments but even in execution, it will be very driven, and i think the president is entitled to that. >> he has two bronze stars, too. >> thank you for bngerei he. appreciate it. >> thank you. when we come back, breaking inflation data, we are just a few minutes away.

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welcome back to "squawk box." rick santelli live at cmhq with october breaking cpi news. headline cpi expected up 2/10, delivers up 2/10 exactly as

expected. inflation, 3/10, exactly as expected. year over year, 2.6, as expected, but .2 hotter than the rear view mirror. that is basically a very important issue to pay attention to considering that this really has been, out of all the invasion metrics, following a linear path down, pretty much every month this year. so we see that pop. if we look at year over year core, that's food and energy. 3.3. and once again, it's exactly as we expected, like all of this data was, and this one does equal the rear view mirror at 3.3. 3.3 is the highest since it was in may at 3.4. we've had 3.2, two months in a row prior to to this. so you can say it's a bit warmer. now, if we look at the indexes, and i like to look at the indexes. the indexes, once again, continue to move higher to all

time forever highs. whether it's the index headline or the index core. now, i very rarely look at real average hourly earnings, but they are so lofty, on a year-over-year basis, 1.4. that's real hourly earnings, year over year. if we look at weekly earnings year over year, 1.4%, that's the best since march of '21. real means inflation-adjusted. we need to pay attention to that as the equities have been on a tear for the most part since the election. the yields initially moved a bit lower. i would suspect that that's going to reverse a little bit. we see pre-opening equities, of course, have popped as well. the market seems to have it right. it saw yields run up a little bit on inflation yesterday, and these numbers, though as expected, certainly don't have a frigid air about them. andrew, back to you. >> thank you, rick. we've also got some other breaking news. and we're going to get back to

you in just a moment. i want to get over to david faber down at the new york stock exchange. he's got some other breaking news to bring us just now. david. >> andrew, it involves liberty media, of course, a company run by greg mafae for a number of years. tomorrow investor day for liberty. they've got a lot of news they're announcing right now ahead of that investor day tomorrow. the first bit is involving charter, the large cable company, of course, of which they own about 45.6 million shares. have owned a stake in that for a long time. they have been in talks to try to basically collapse the structure. come up with a deal in which charter would buy liberty broad band, they've done that. it's an enormous stock buy back by issuing stock in a sense from charter to liberty buyback. it's not going to close for a long time. shareholders have been waiting for them to get to a specific ratio, a specific deal.

they have done that. .236 share of charter will get you one share of liberty broadband. you may look right now and do the math and say, wait a second, there had always been a spread, that's what they're trying to deal with here. this deal is worth less than liberty broadband is worth right now, that's because gci, the converge cable broadband business in alaska, that's not included. that's going to be separated, and that has value, obviously. and so that is why liberty broadband stock price is going to actually be a bit above where charter, where the ratio implied on charter would be. this has been in the works for some time. again, it may take place sooner than that date in 2027. shareholders have been waiting for that for some time. another announcement involves liberty live and live nation, which seem to be moving down that same path. that's not that they have announced that, in other words, where live nation would be

buying in the holdings that liberty has of its stock, some 69.6 million shares. but they are now making that possible because they've done what we call, create an asset back structure. it's no longer going to be a tracking stop. liberty live, it will now be a separate public entity. and, again, this is all part of a simplification process that chairman john malone is going through at the company as well, and has been for some time. started with the atlanta braves and charter, and now seems to be moving or is moving toward liberty live. what you're going to end up with here is liberty media, which is just basically going to be formula one, and this new entity that is going to be the shares of live nation, would seem the possibility down the road of doing a similar transaction to the one i just described between charter and liberty broadband. finally, the biggest news is that greg is going to be stepping down as the long time ceo of liberty media.

so many deals through the years and the simplification basically has kind of happened towards what is now going to be the conclusion of his 19 years running liberty media. he will be stepping down at the end of the year. he will be holding on to various board memberships, chairmanships, and the likes of all that, but he's going to be thinking about doing some other new things is my understanding. what those are is unclear. 83-year-old john malone is going to step in as the interim ceo of liberty media. and he says he's acutely focused on rationalizing the structural discounts at liberty media and growing their attractive cash generative businesses. of course the focus there will be on f1. that's basically what heroes got left to deal with. i'll be speaking to maffei

tomorrow at liberty's investor day. i will also have my annual interview with john malone as well. we taped that very recently, but that will also be part of it, and chris winfrey, the ceo of charter. andrew, an opportunity to talk about this important news tomorrow with greg. >> with greg stepping away, and this idea of john being the interim ceo, what kind of bakeoff do you imagine is going to happen now to effectively be what might be described as the head of f1, right? >> i don't know. and frankly, it's not completely clear to me what the plan will be in terms of f1, the opportunities there. malone is serious when he talks about simplifying. that said, i think he's perhaps complicating his life a little bit in the interim by becoming ceo again. >> right. >> but that's where the focus

is, ndrew. atlanta braves, all of these entities that had so much complexity, because they were part of the liberty family, and so many transactions in part for tax efficiencies have been resolved. i named one other with charter, the other with live. the expectation will be is there a possibility of another transaction involving f1, or what will the plan be. certainly going to talk to maffei tomorrow. >> charter, live nation, sirrus, trip adviser, zillow. >> they're not involved with that, but that's right. he will keep all of those positions, and my understanding as well is that he's going to -- he's not done. he's far from retired. even though he's a little bit older than me. he's still going to keep at it. >> we will look forward to your interview with him tomorrow where i know you'll get a lot of answers about all of this.

thanks for bringing us the news. let's get to our cpi panel, looking through the numbers. we have seen an uptick in futures. tiffany wilding, economist at pimco, and our very own steve liesman. steve, why don't you go first. dow futures up by 80 points, the nasdaq up by 45. >> we understand how and why the market was trading as it was before the number. they were taking a position, it would appear, on this number being hotter than expected. so what's happened is that whole trade now has kind of backed off. >> just meaning for anybody who's looking at the stock market move on this, they were thinking that if inflation was higher, the fed would not be able to cut rates at the next meeting, and that would be bad short-term. >> the whole complex of fed probabilities had come down before this number, and now they are right back up to where they were. i don't know if my terrific producer has been able to create that chart. i asked her to do before and

after the number, which i just asked her 30 seconds ago, so it might be a little bit early to ask her for that. for example, take a look at the two-year. two-year is going down. the s&p is going up, almost 20 points on this number. the market was scared of this number. we thought we had gotten to a place, there's the u.s. treasury there. can you see it's coming back down? >> amazing. >> that explains -- i didn't know what was going on this morning. now we know. there was a big trade we talked about in the december silver contract. i'm taking a bet against the fed cutting. it's right back. 86%. i'm seeing inflation up and down across the board. the problem is not anything inside it. it's the top line numbers. it's that they're kind of stuck, kind of stubborn, especially on the core rate, which at 3.3, the 2.6, you could argue is within the fed's target. it translates to pce, a half a point hotter. that's okay.

the core is where the problem is. we didn't get help in housing. it's 04 and oer. >> at least it wasn't the market discounting trump's tariffs. not everyone's doing that yet. but people will be very eady if there's a move in yields higher. we'll be very ready to attribute it to the upcoming policies. >> i am talking to people i believe who are either neutral on the president-elect or is supporters. they're all sort of saying that this rise in yield is linked to the outlook for fiscal policy, be it tariffs, spending. >> that's what i mean. >> that's what i'm hearing from the supporters. >> i understand. and i'm not saying that that's not -- it's a real thing, but it looked like it was happening before he's inaugurated. now we know maybe this wasn't the beginning of a long-term move up based on tariffs. this looks like it had to do with fear of -- >> but overall, you're still up on the ten-year.

>> since the fed cut 50 basis points. >> and we have moved up steadily higher. tiffany, why don't you jump in and weigh in on your concerns. >> make some sense of this. >> is it a big deal, is it not? maybe the 0.3% on core is higher than it had been in the past. but it was expected. we're still dealing within that range. >> exactly. i think this number is online with expectations. you know, you had amazon which had a discounting event that happened in october. it looked like that resulted in broad based discounting in goods prices. on the other side of that, you had rents that were a little bit firmer. overall, i would say this is a kind of down the fairway event. i don't think it would change the expectation for december. i know the markets are kind of moving. in terms of the fed's expectation for whether they cut or not in december, i still think it is an open question though. i think there's definitely the possibility. the economy does look pretty strong. data, you know, has reaccelerated outside of

inflation that you could get a fed that just decides to skip, and go slowly. you know, and the other thing is they probably will revive that forecast. >> you're saying skipping december, is that what you're saying? is that part of your thinking right now? i want to make sure i get that. >> i think it's certainly possible. obviously the markets are pricing in a probability of this as well. the thing i would highlight, if you look at their forecast from september, they had the unemployment rate coming in at 4.4. that is likely to get revised down. the labor markets have looked better than expected. in addition to that, they had core pce at the end of the year coming to 3.6. and it looks like it's going to come closer to 3.8. they will have to make some upward revisions to their forecast, which could be consistent with some upward adjustments to their rate path as well, and just how and when they decide to skip in their cadence. i think they're still on a gradual path lower, but nevertheless, could be adjusting

that in december. >> hey, rick, why don't we get your reaction to the market's reaction, and what you think would happen if the fed did skip in december? >> well, i totally agree with steve. what we are seeing is a reversal of a trade. it isn't only the sulfur trade, it's everything. interest rates climbed yesterday. it really put the ka bosh on the rally that had been ensuing on equities post election. i think the market response makes sense, but what will also make sense is part two to that philosophy on what happened is that rates will find a footing at a level right around 4.35 to 4.38. the ten-year, 4.25 and a two-year, and they will reassess. it's not that inflation is cooler. it's that the worst case scenario didn't develop. anybody out there watching, joe, you remember that old ketchup commercial, anticipation, when they're trying to get the ketchup out of the bottle, that's how you can describe what's going on in the equity

markets. i know that you guys were talking about economists. steve was talking about economists maybe being right down the fairway, boy is that not true. whether it's the economists that talked about the inflation reduction act not causing inflation or the 23 nobel laureates who said we're going to really see the market get whacked after trump gets in. you know what, if there's anything to be learned -- >> i was talking about traders, but okay. >> you said economists. >> i didn't. >> is that economists are politically motivated like many people in society, i don't know that there's anybody i have ever met who has no opinion on politics, but they should keep it from coming into the marketplace, and as far as being blamed for everything that happens with rates going higher, joe, of course you're correct, and maybe there will be some truth to that, but they will make it a truth long before that information is evident. >> steve will be here to discount it. >> i was talking about -- i agree with him that the economists have been down beat on trump's plans. i want to make one quick point,

what tiffany was saying, what i'm hearing from the fed right now is not so much december being, it's doubt being imparted about next year. that's where the doubt comes in, and there's those probabilities. betsy gets it going for the win right there. you can see what's happening. >> that was this morning. >> blue bars being higher than the yellow bars, you don't have to read the numbers. the probabilities are higher. that trade went away, and the key here is that i think december is still a good bet. but the fed is imparting a lot of uncertainty about what it's going to do next year, and that may be linked to the fiscal outlook. >> steve, rick, tiffany, thank you, all. >> okay. coming up, we're going to take a deep dive into the potential tariffs in the next white house administration. he.not go anywre we're coming right back right here on "squawk box" on cnbc.

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president-elect trump vowed during his campaign, as you know now, that if he won, he'd hit

china, and other countries with some tariffs. let's talk about what those could look like and their impact, and, bob, we've talked about this before. it sound like the first time. let's talk about it. so he's mentioned tariffs. i don't know if you're familiar with that. but goldman sachs international, but let's talk about it. okay. this is great. move up. and also nazak kakactar, is that good? >> pretty good. thank you. >> close enough. you are welcome. and you are obviously an undersecretary of commerce in the trump administration during the first -- the first one, now national security law practice chair at wiley law. can you make the case that this is going to help in terms of the trade imbalance and not be inflationary? is it possible to walk that fine

line? >> absolutely. and thank you for having me. look, in the first trump administration, we introduced tariffs to correct the distortions in the market. and those tariffs, the u.s. international trade commission, we imposed tariffs on a range of chinese goods to counter ip theft and steel and aluminum products to counter china's incredible overcapacity that had been destroying the u.s. markets. the bipartisan unit of the government, the u.s. international trade commission, did a comprehensive study and found just a couple of years ago and found that the tariffs that president trump had imposed had zero inflation narrow effect. the reason we see that is when you are introducing corrections to the market to correction for price distortions, you're going to get improvements in the market and not the arbitrary inflation pressures that folks keep talking about. there's no basis for that. >> bob, you have, you know, had

so much -- so many dealings with china over the years, you're fully aware of the -- of the positives that we get from our relationship with china and the negatives. is there any other way to get their attention? >> well, let me first say, i agree that there are opportunities and there are purposes for utilizing tariffs for what we call safeguards or if other countries are violating international trade rules or there are national security reasons for it. those are perfectly appropriate and legal under american law and international law. the issue that i think is going to be broadly important is whether these safeguards are across the board and whether they are for taxable purposes or strategic long-term purposes, in other words, he's going keep these broad based tariffs for

many many countries for a very long time. that would have inflationary purposes. but i particularly want to make the point that for specific purposes, they are appropriate and probably don't have very much inflationary impact. with china, the question is going to be what is his goal, is his goal to put 50 or 60% long-term tariffs on and keep them on? or is he going to use them for taxable reasons, to renegotiate the old trade agreement or to get china to make changes in intellectual property protection. in other words, are there specific objectives that he wants to get by either threatening to impose these tariffs or actually imposing them, and nen then going to chi and saying if you want to get these reduced or eliminated, we've got to renegotiate the old trade agreements so it works, or we've got to work on a whole range of other trade issues, and

so he would use them as leverage. we don't know the answer to that. but broad-based, long-term trade agreements on a whole lot of countries, including our allies, i think, would be counter productive, specific ones for specific goals have been used, are appropriate, and i'm sure he's going to use them again. >> i was going to say, i want to add something. we can't just -- the u.s. government, u.s. laws, we can't just arbitrarily impose tariffs on things. there's certain legal requirements the statute provides mechanisms to introduce price corrections into the market, and that's the way we impose tariffs, so this notion that anybody is just going to impose tariffs arbitrarily is inconsistent with the law. the laws give us certain pathways to impose tariffs, and when those statutory criteria are met, correct for price distortions, that's when they're imposed.

every single tariff that president trump introduces will be in accordance in the law, and allows for the imposition of tariffs, when there are price distortionings. i i want to refute the notion that they're arbitrary. the law doesn't allow for that, and president trump is going to follow the law. >> the law does -- you're exactly right. there's section 201, section 301, section 232, all are within the lawsuit of the united states. we've used them before for other countries. and it's perfectly appropriate to use them again to achieve exactly the kind of objectives you want. it's not just price distortion. it's national security issues. it's countries taking advantage of us by surging particular goods in the american market. we have a program for doing that, called safeguards. it's mandated. what he was talking about during

the campaign is across the board tariffs in general, and the fact that you've reassured me that it will be done on a specific issue-by-issue basis under the laws that we've got, that doesn't trouble me. in fact, that's appropriate. it's the broad use of very high tariffs against a lot of countries that he talked about, and i'm wondering if he's going to do that or not do that or if that's a tactic in order to get something. >> we're out of time. but the total that has been proposed or worried about in the media, wherever, versus what actually happens, what percentage do you think actually happens? we only got 20 seconds, but you think 50%, 10%, what do you think? >> i think, look, the tariffs on china are going to be substantial because of china's

overcapacity, industrial subsidies, et cetera. i want to add, china has disported the global markets in terms of trade of goods. there's going to be instances where tariffs on the entire global market to correct for those issues will be appropriate. >> okay. very good. (♪♪) (♪♪) (♪♪) everyone has goals and dreams. and everyone deserves a way to get there.

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target. . final check on the markets. dow up 40 points, reversing things here. nasdaq up four points. the s&p 500 up about five. not a lot to talk about tomorrow. make sure you join us then. "squawk on the street" begins right now. good wednesday morning. welcome to "squawk on the street." post 9 at the new york stock exchange. futures holding gains here after the first red s&p day in six. cpi in line pretty much across the board, although year over year ticks up to 26. the october inflation coming in as expected ending that cooling streak. what could the latest meeting mean for the fed rate cut path.