improvement, decreasing rest of the restaurant inflation, that's when it is tough to see people go into the restaurant. >> fair enough. i want to thank you for joining us this morning. i feel it every time we walk into a restaurant. guess, emphasize that we are on the same team, we are on a team -- >> yes, we are on the team. we have our whole "squawk" team. >> it's not my team, it's our team. >> make sure you join us tomorrow. "squawk on the street." there's no me in team. no, there is a me in team. "squawk on the street" is next. good wednesday morning, welcome to "squawk on the street" i'm carl quintanilla with jim cramer and david faber. premarket breathing a bit of a sigh of relief as november's cpi comes in in line across the board, although the fourth consecutive month up 0.3 on core. we will talk about sbermts, two year steady at 4.12.

watch the path to bringing down price pressures appears to be stalling a bit, what that could mean for another fed rate cut next week. >> plus the deal is dead, albertsons terminates its merger agreement with kroger, also files suit against kroger for breach of contract. we're going to have those interesting details. and this hour we are joined by the ceos of ge vernova and southwest airlines, both will be right here at post 9. let's get to market reaction on cpi this morning ahead of next week's fed decision, jim. wow, there's some growing controversy about whether or not we've stalled out at least on core goods disinflation. >> this darn shelter is just going the wrong way and i saw barclay's downgrading the home builders. no one is putting up the amount that we need, nowhere near in shelter and of course that's rental, it's not home pricing but that was taken out of cpi. also cars. i mean, we have incentives all over the place but we do not

have any decline in used and going out to dinner. i mean, david, you still have to change your lifestyle, you still have to say, listen, i'm not going to go out, i can't buy a used car, i can't get any break on my rent. if you're powell -- we've did what we can so far, let's see if we can't lean on it more. the higher you put the mortgage rates the fewer -- >> you pointed out housing as you always say punches above its weight. >> a mess. >> toll brothers yesterday -- >> that downgrade. >> -- and the mortgage rates not where they need to be there. >> we got the biggest jump in refis this week, jim, since september of last year. >> look, there's a lot of irrational behavior when it comes to rent and it's almost like we don't know what to do. we find ourselves paying more for things that really make us feel not great. we don't -- we go out, it costs a lot of money, we travel, it costs a lot of money, but we're addicted to travel and we will

talk to southwest air. there's some variation in the grocery, grocery is not a horrendous place, but it says, listen, you know, i've been saying this to the fed, but you have to go to costco, fly cheaply, go to bookings, find the best fare, you have to go to carvana, get the best used tar prices and i don't know where to go for household. what are you going to move? go to salt lake city? i don't know. >> there is a big piece in the "journal" about wall street getting into the business of rental to people for long term because the dream of home ownership they argue is dying. >> it is incredible that we're building so few homes, but then again when you dig deeply you discover that the home builders, david, they absolutely love making money. >> yes. >> home builders are like the oil companies, they have discipline. if they have discipline america is a loser. what are you going to tell doug yearly at toll brothers, we want you to lose money because it's really important for the

country? i mean, is it a capitalist business. >> it is. it is. and as we pointed out many times of course during a period of rising rates, you actually wanted to own the home builders. >> look, we also have that problem. we had that once in a lifetime -- i was going over my mortgages and i'm like at 3.2. what am i going to do? sell that to pick up a 7? >> no. >> let me lose some money and buy a smaller home. >> i know. i think mine is up in '27 but at this point i had hoped there would be significantly lower rates perhaps by then but now back to the cpi. who knows. >> it's just not working. the fed is in a tough place, carl. they tick rates up, then the home builders are not going to put up as many. there's nothing that seems to bring more homes to the market -- there's nothing that seems to say that they're building a huge amount of apartments -- i mean, new york being the fulcrum. they're putting up thousands of units in brooklyn and they're all taken. they're all taken. i mean, my thinking was, wait a

second, before you get too negative on the price going up, look at all the used coming up. we do have household formation, we do have demographics that make it so that we can't find cheap rents. >> meanwhile, groceries as jim mentioned food at home biggest month on month jump in almost two years and it kind of leads us to a discussion about grocery stores. >> we've got a nod on expected outcome and albertsons/kroger, we've been talking about it for quite some time. albertsons now has terminated that planned merger with kroger, but here is the surprise, it's also suing the company for breach of the merger agreement. now, federal and state judges in washington, i think oregon as well, had blocked the proposed deal. the ftc won here. they argued the combination would basically raise prices for consumers and, in fact, what you got here is an agreement by a judge who issued the preliminary injunction saying we agree. as our viewers well know at this

point, of course, we spent a lot of time talking about kroger's argument which is we don't compete against your neighborhood supermarket, we compete against costco, we compete against walmart. >> right. >> that didn't ultimately pass the test with the judge. by the way, i would point out in the risk community there was not a lot of broad ownership here. many anticipated what the ceo of kroger did not, which is this deal was not going to get past regulators and not going to win in court. by the way, it all comes -- and there is a look at mr. mcmullen, it comes as the news of the president-elect has kicked andrew ferguson to be the ftc chair. ferguson currently serves on the commission. he is not going to need to be, therefore, approved. he already has been. he perhaps following this line in the new administration taking a tough focus on big tech, but perhaps not as much on everything else. the ftc has kind of had some wins lately.

we know tapestry, capris and now kroger/albertsons after some big losses as in activision microsoft, horizon/amgen ending with a nice tone here. guys, the lawsuit is what's really unexpected. in fact, yesterday after the court issued its opinion i was hearing hopes perhaps amongst some shareholders, well, maybe they will try to bring it back in the new administration. stephen feinberg, big trump supporter, his firm is the largest owner of albertsons, he is on the board at albertsons, he may take the number two position at the pentagon, maybe they try to bring it back. no. >> no. >> no. no. it's dead. they've called it off. and now, jim and carl, kroger says that -- excuse me -- albertsons says kroger willfully breached the merger agreement in several key ways including by

repeatedly refusing to divest assets, ignoring regulators' feedback, rejecting stronger investor buyers and failing to cooperate with albertsons. whether that will be proved in court, who knows, they're seeking billions of dollars in damages. don't see that too often. that's not coming back. now they're suing their ormer merger partner, jim. rodney mcmullen made a mistake here. >> yeah, he made a mistake. i remember when it first came out, we talked about that, because there is, just as, you know, page 30 of the ruling, you go into this elimination of significant competition. and it doesn't matter. you can't just say, do you know what, you think these competitors -- who cares? i mean, it's costco. they didn't buy that. they even looked at the price of eggs. the price of eggs in this country, i mean, damn bird flu. let's get some more damn eggs. the eggs are this or the eggs are that. david, the industry has tried to combine before and it's failed

and they just have done things where they've tried to spin off, these people thought they had a spinoff. >> they thought they had a well capitalized divestiture that would represent a true competitor in certain markets. obviously the ftc didn't believe that, nor did the judge who issued the ruling believe that that was going to be a real competitor. >> divestiture made sense when you listened -- because -- >> by the way, now albertsons doesn't believe it was a real competitor. obviously -- i mean, this is the most interesting part of it. it's care that you see a former merger partner immediately sue. >> it's incredible. and i do think that the c & s, the well capitalized, very different from when way. i remember speaking to rodney and i said you're going to lose.

he said, listen, jim, you have to understand, you know, you do all this stuff about costco and walmart, ultimately that's who it is. i found myself thinking, okay, rite aid is a pitiful helpless giant and we are going to get to the idea that someone might want to buy wall green. it's a foot race between destroying wall green, amazon and some outfit -- if we put water on that, please. >> i did yesterday on our air. it's a story, actually, sycamore's exploration of a potential purchase of walgreens that i was aware of for weeks, but chose not to report in part because of so many of the gating issues involved there. i will get to it in more detail a bit later, but suffice to say the size of the deal from an equity check perspective, the debt load at walgreens, the challenges that jim just discussed, not to mention further opioid litigation. i mean, you go on and on, and the need for the 18% -- 17%

shareholder to roll in or 18% shareholder. so many gating issues there. >> he took it right when we went to the jpmorgan conference he was so bullish and i said this is a bad one, man. >> j.t. wentworth is a fantastic guy when it comes to pharmacy benefits but that turned out to not be the issue, it's the actual brick and mortar. timothy wentworth is a winner. >> guys, between albertsons/kroger, more on hershey's and mondelez, back to sycamore and walgreens. carl, plenty of m&a news, related news, not necessarily deals that are going to happen but stuff to occupy us and investors. we will get to apple, google. a lot on the corporate side. ge vernova on a tear, more than

doubling since being spun off from general electric months ago. the ceo will join us at post 9. cpi on headline 0.3, on core 0.3, although the year on ye headline the warmest since july. stay with us.

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there's a smarter way to save. comcast business mobile. you could save up to an incredible 70% on your wireless bill. so you don't have to compromise. powering smarter savings. powering possibilities. shares of ge vernova more than doubled since general electric completed the split back in april. they hosted their investor update after yesterday's close of trading. i have to tell you i was excited about this presentation. the ge vernova ceo is with us right now. yesterday was a tour de force. i ealized when i first met you i thought that this thing was, are you kidding me? i felt so bad for you. >> come on. >> no, i felt bad for you because i was worried about the balance sheet, i didn't know about the cash flow you could generate. i knew that this division was poorly run. i want you to take people on the journey because the journey is short but the win is big. >> no question. i mean, in the last nine months

we've really shifted from areas where we talk about market opportunity to market reality. i mean, its reality is the world needs electricity right now and very well positioned to serve this market. we see it every day in both our grid and our gas businesses, with substantial increase in demand at the exact same time we're running the businesses better. you see that in the margin expansion in all three of our business segments, we're starting to generate a lot of cash. >> talk about that. there was this -- you generated $4 billion in cash in the first nine months as a public company. i thought this was hemorrhaging cash. >> you bet. $4 billion in the first nine months. we will end the year with $8 billion of cash. we talked yesterday about the fact that we will generate $14 billion of cash the next four years and that's after investing $9 billion in innovating with research and development and capex to strengthen our footprint. especially in the u.s. for the market that's coming our way. >> now, let's just talk about demand for a second. there was a discussion about how backed up you are. i mean, you're about 60% of the

market, i think you're working as fast as you can. you have the facilities but don't you have to expand remarkably given what's going on in the data center? >> yes, and we're doing that every day. for gas that's in greenville, south carolina, nuclear is in wilmington, north carolina. our history is a benefit for us. >> you had 32 nuclear when you talk about offshore wind. >> nuclear is important. we have 65 plants in the u.s., 65 gigawatts running with our equipment today. we have real opportunities to upgrade those plants and create new nuclear in this decade. it will play an incredibly role in the next decade. >> 2032? >> 2032 in the u.s. is very practical. >> we have uranium pieces running all day long. i want people to calm down. did you get to read the article

yesterday from google. >> i'm familiar but not the piece. >> why are they not calling you? they're doing this thing -- they have google, tpg rise climate partner and intersect power. where is -- go is gev? >> we're working with all of these companies, working with all of the hyper scalers right now, we work with tpg rise. there's going to be a lot of solutions, very much an all of the above technology solutions. we will do over half a billion dollars, the only company -- >> half a billion dollars in what, sorry? >> half a billion dollars in direct orders with the hyper scalers this year, primarily electrical equipment, transformers, switch gears, to support those micro grids -- >> behind the meter stuff? >> that is supporting a lot of behind the meter electrical equipment and the next step in this chapter is the power generation that needs to support this. >> a lot seem to be smrs are a little ways away. >> they are. >> natural gas seems to be where a lot of them have to go,

despite their carbon footprint commitments. >> that's right. we talked yesterday about the fact that we've taken 9 gigawatts of slot reservation agreements in the last 30 days for gas, very closely tied to the hyper scaler demand that's coming. so that is becoming reality. now, with a lot of those customers it will be unabated gas this decade, but we also have active discussions with them on how they decarbonize that gas over time. carbon capture, hydrogen, both will play a role, but gas is going to play an incredibly important role this decade. >> i keep hearing about potential shortages for transformers. are there concerns? >> we're working hard to ramp up our capacity. most of our bidding for transformers goes into 2028. we're working to improve our cycle time to serve this market. >> 2028. >> 2028. >> you're working to improve your cycle time to do what? >> to add -- to do more for this market because they will take as many transformers as we can build. >> they will? >> no question.

>> is there anything that equates to this, maybe the beginning of electricity? i don't know. >> i would say -- listen, i am a student of general electric's history and when you think where we have been most impactful, think after world war ii and the role we played in building out the electrical grid then, both the economy and stabilizing the world. if you look at the load demand we project in the next 15 to 20 years it's most analogous to that period of time. >> what about policy risk. there's been a lot written about classic nimbe, municipal push back to having something nearby. maybe you can tell us how you think this new administration thinks about wind in general. is there policy risk there? >> when i hear the new administration talk it's very much an all of the above technology discussion and the reality is ge vernova is well positioned to serve that all of the above technology solution, whether it be wind, gas, nuclear, investing into the grid. we talk about u.s. competitiveness and innovation not just for the u.s. but exporting that for the world for economic development and peace. we see real opportunities to

serve this administration with all of those objectives. >> you mentioned $9 billion in i think it was capex and r&d. >> that's right, four years. >> that going to be enough? >> we may go higher than that. that's where we're starting right now. we're increasing our r&d next year 20% to serve the growing demand, increasing our capex budget. it will go higher if the customer orders come through to fund the need to go higher with capex. >> natural gas has been up in the last few months but would it make sense for a hyper scaler to buy a natural gas company, lock that auto price in, deal with you and get everything done? >> i think they're gergt smarter every day on the full value chain of what the art of the possible is for them and we will keep iterating with them on many different solutions that they could use but it's very clear for the economics in flay for them and the data center buildout more power is critical. we will have to look at many different alternatives to serve the growing market. >> do you ever sit back and say,

wow, these guys just keep talking about renewable and yet all they do is keep ordering natural gas? >> we're having productive conversations with them to help them understand all the solutions that are practical this decade and then how we work our way through decarbonizing those in the decades that follow. >> timing, man. timing is very important. when you guys were planning this spin, i don't think he had the whole ai data center thing in mind. >> i said it point-blank, i said will you stop it that there could ever be investment, stop t larry. he said, no, we could get lucky here. lucky is better than good, isn't it? >> no lucky. we have a lot of work to do. we have an incredible opportunity to serve this market. we are going to get better every day but i like our chances. >> stay humble, man. you have it going. >> guys, thanks for having me. i appreciate it. when we come back this morning southwest chief bob jordan is with us here at post 9. we will talk about the airline's outlook for next year, holiday travel demand, maybe some boeing. take a look at the premarket

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is at the top. mondelez as well, this $9 billion buyback posing questions about a would be hershey deal. we will get cramer's mad dash and the opening bell in four minute s.

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all right. let's get to a mad dash. we've got an opening bell a minute from now so be quick, my friend. >> i like discipline and mary barr showed discipline, he's not going to lose money on robotaxi. saves $2 billion. she's going to stay focused on self-drive -- >> why don't you give people the news. >> they're getting out of the rob owe taxi cruise. staying in cruise. i spent some time in the robotaxi, i love these things, but expensive, ex pin sieve. david, it's way know -- >> and it's tesla. >> waymo -- tesla has more miles. >> there you go. >> carl vogt is back there with me, the person who had derisive things to say this morning on twitter about gm, no need to

repeat, but i would say if you want a company that is showing we are not going to take our multiple anymore, it's marie barr and i salute her for cutting her losses. [ bell ringing ] >> let's get a look at the opening bell. the big board it is manufacturing company olin brating an investor day at the nasdaq, crypto exchange, coin check group, as we're hanging on to roughly 0, 65, jim. i wonder, argument has been made this morning that the market may pause focusing on growth and shift a bit to sticky inflation. do you think that's the story? >> it's hard to tell because the sticky inflation would cut against the food stocks we are going to be talking about with david mondelez. i do think that yesterday was the beginning of a move back to the industrials. that spiked on the election and then came down hard. those saw a lot of money coming in. i find that what people -- when

you talk about inflation, what you tend to think is the highest multiple stocks, 40 stocks, the enterprise software stocks are going to get hit and they were all clipped yesterday. i think they will try to make a come back and be thrown back for losses. they just don't have it. some stocks like palantir when you go into palantir between, say, 3:00 and 5:00 a.m. there's people -- this now overnight market, it's just people walking the stock up. it's fun to watch. >> whatever it was, 3:30 this morning. >> manipulation is okay especially now gensler is leaving. he did care about things like this but those are now passe. they're trying to walk up stocks but don't have the horses. takes big money to keep these -- enterprise software, they are so darn rich. mongodb collapsed 100 points, took my breath away. >> we had them on at the 11:00, the argument was that the

ceo/cfo transition was part of the story. >> michael gordon -- one of the thing so hip democrat cal of theablists is they were bullish on the conference call and this one person who had been there for ten years is so important. i beg to deliver. that was a sign that this group is in purgatory because you don't buy these stocks when we are in inflationary mode because their multiples, david, are just too high. >> i did want to look at hershey. it's been in the news lately. >> sure. >> down about 5% this morning. we've been talking about it of late because a eport of interest from mondelez in the company. you know, any number of different data points i can give you here but let's start with news this morning that's pressuring the stock. mondelez put a press release out this morning approving a $9 billion share repurchase authorization and within that were some comments that have both impacted its stock price,

but also tamed perhaps some of the emotion around weather hershey will actually get sold to mondelez. more on that in a moment. the paragraph in question, given current market conditions, share repurchase remains an opportunity and key priority. the company remains committed to an acquisition strategy that is focused on bolt-on assets, similar to recent acquisitions and you see them listed there. that does not sound like a company preparing to make an enormous acquisition. and that may be a fair assumption there. as we've said throughout, and as we said back in 2016 when mondelez first came after hershey's it's all about the hershey trust. an enormous sum of money there, a significant holdings of hershey's b shares which give them super votes, some $10 billion worth of that.

talking at the last 13-f, 54.6 million shares of the bs. what does the trust want? well, from what i'm hearing right now what they really wanted was more money than perhaps had been at least in the early approach discussed. >> more money, more problems. >> more money, more problems. you know, you've got michelle buck who is from what i've understood made it no secret, thes the ceo of hershey, that she's look to o potentially leave the job, jim, at some point. she is in her -- 62, 63 years old. we have a stock price that topped out at 260 in april of '23, hit the low 100s, rebounded from there. certainly questions around profitability due to cocoa prices and hedging issues. i'm not going to get into that. what i will share is the following from one interested observer which is mondelez will always and forever want to buy hershey but the question is when will the timing be right in terms of the hershey trust's willingness to enter sent sear

negotiations that conceivably would result in a deal. again, you come back to the idea that even if the ceo of hershey wants a deal, they can't deliver a deal. i don't have a lot of transparency beyond that, jim, in terms of what really may or may not have happened or be happening here, but that paragraph is not unintentional. >> no. but, david, this industry needs consolidation because it just doesn't have any pricing help. the pricing power belongs to costco and it belongs to walmart and the only way that they are going to be able to try to even defeat them is to get together and otherwise i think they're just -- they are at the mercy of the two giants plus amazon, and i don't think anyone in that food business ever saw that coming. >> that they can just -- they can say you can't raise prices. >> can't raise prices. give it a try. try it, you're out.

i mean, it's an incredible thing to see the consumer leverage that these companies bring. we don't talk about them enough. costco is a member. remember, they want volume, but they will sell -- they will go to any one of these companies and say, listen, you want chocolate? we'll make chocolate. a lot of times, by the way, they end up going to the chocolate company -- did you see that kimberly was making product for them and then kimberly decided to withdraw? i mean, i just -- the power belongs to those companies, it's never been like this, which is why going full circle back to kroger, they were so wrong, the judge was so wrong. the only way to compete is to be huge. >> the hershey trust just really quickly, i always like to explain to people, it serves the trustees of the miltsen hershey school trust, the foundation, the perpetual care maintenance, but the hershey school trust, they house and educate what they call an indefinite class of poor

children through their beneficiary and have a perpetual time horizon. they also have -- i mean, it's the size -- i'm trying to find the numbers, but it's enormous the numbers here. so they are under no pressure from a fiduciary duty perhaps, jim, to think about, well, shouldn't we be more diversified as part of a larger company? at some point it may come. the ag of pennsylvania also has a role here. it's not clear that today is that day. but, again, i will continue to obviously report as best i can and see where we end up when it comes to hershey. i wanted to also quickly transition to walgreens because yesterday the "wall street journal" did a story about sycamore having had conversations with walgreens about what would be an enormous leveraged buyout essentially. i had indicated this yesterday in my reporting. i had investigated this as well a number of weeks ago when i first heard about sycamore's interest and at least it wasn't sufficient enough to me to

believe that the -- that this actually had a chance of happening. doesn't mean it wasn't news, by the way, and the journal may certainly have more than i do. there are any number of gating issues here and i would reference morgan stanley comes out with a piece as well this morning where they're talking just about the capital structure here. a buyout is harder to contemplate given its sizable debt burden, pallet ri cash flow making the value creation pathway harder to decipher. outstanding debt, 2.8 of which is due in fiscal year '26. doesn't include $23 billion of lease obligations, $7 billion liability associated with opioid-related claims and litigation settlements. not all of that litigation is completed. as i referenced yesterday, in its history sycamore has raised roughly $10 billion for all the deals its done. this deal alone would require an equity check given a premium on the equity, the assumption of

the debt that you would have to imagine would be enormous. i mean, morgan stanley estimates 9 to $10 billion. it may not be that much in an equity check. they have been out there looking for this. they would have to be out there. of course, it's not like they haven't an exist gs fund no way no how. they would need stefano to roll in as a shareholder in the new company because that would add to it. jim, so many gating issues here in terms of imagining a real deal that could come to fruition, even if you wanted it to happen doesn't mean it will. very much unclear where things stand in terms of a real conversation between walgreens and sycamore about said possibility. >> i thought there was a cogent piece talking about a lot of moving pieces. i agree with you on this entirely. i think that -- i think, boy, this would be a deal that we would be talking about not that long after, say, they have had to restructure the debt. >> yeah. right. i mean, that becomes a question. >> we don't even know how many

of their stores lose money. remember cvs closed all of its stores. >> you will add new debt to an already indebted company whose cash flows are in real question, to put it nicely. >> cash flows are -- >> it's just when you pencil it out, as i kind of tried to do a few weeks ago when i first heard it, man, it's tough to imagine it happening. that said, heavily shorted stock, up sharply yesterday on the "journal" report, down a bit today. >> shorting stock because people feel if amazon wants to wipe them out they have the ability to do it. i know that tim wentworth the ceo is trying to do a situation where you would have the drugstore there and not necessarily have to go through the cheeto's aisle. >> eating my cheeto's on the way to get my glp-1. >> exactly. tim is very, very smart. it's been so daunting.

i want to hear from him that he's given up before i presume that this thing is not happening. he is not a giver upper. >> got it. >> here we go. >> how are you doing? >> doing fine. we have mr. jordan here from southwest air. >> no mr. >> no mr. >> just bob. >> i like that. i know we have to talk about the market for a second but when i see you i immediately want to jump in. >> do it. >> let's start. let's go. >> all right. this is one of these moments -- first of all, thank you for coming on. >> absolutely. thanks for having me. >> i read through all the things -- and particularly your terrific talk that you gave at goldman sachs and you just gave, and i come back and i say, oh, my, boeing being able to make planes again means a great deal to you and i think that people don't realize some of the hobbling that you had really was related to boeing. >> oh, absolutely. i mean, boeing is obviously a huge piece of what we do. we need them for our capacity.

the good thing is we planned for right on what we received from boeing this year. they thought they would give us 45 airplanes, we planned at 20, just got our 21st. we are also planning '25 the same way. boeing is a great company. kelly ortberg is going to get them together. may take several years. the other thing, too, you look at boeing, you look at the issues with airbus and the engines and it actually provides a constructive backdrop to the industry. >> well, i've got to tell you that in terms of constructive backdrop, i want to quibble with you. i think you're too conservative in the plan you've laid out. i think you have a lot of room, i know you're probably not happy with where your stock is versus the other guys but there's been a levitation in united, american caught it, but how big of a change of what you're doing. let's -- assigned seating. these are big changes technologically for you. >> this is a transformational change for southwest airlines. we are looking to meet our

customers' needs, assigned seating, extra premium, extra leg room, partnerships to get you around the world, getaways by southwest, the best vacations product on the planet. we are putting in technology that manages the operation, reduces turn time, adding red-eye flights. all the capacity, we're adding '25, '26 and '27 is coming through initiatives, not just buying aircraft. we have a lot of aircraft, access to a lot of aircraft at terrific pricing and we just don't need all of those and our intent is to take them all, to monetize the fleet and to return that value to our shareholders. >> before i let our other guys talk, i mean, is it possible that when you get those planes that will not be flying an extremely full flight and not be able to put my baggage in the overhead which seems everywhere i go is the case. >> we're installing larger overhead bins. our employees love them. in theory you should never have to gate check a bag.

we're putting in power in the seat backs, large overhead bins, the extra leg room. we are aim to go meet our customers' needs. we did a lot of surveying, tens and tens of thousands of surveys and 80% of our customers today want assigned seating and 86% of customers that will not choose southwest want assigned seating and premium extra leg room. the other thing we're able to do, add the extra leg room section, about 30% of the aircraft, because we already have terrific itch we are not having to take a row out of the aircraft. so we are not losing a unit cost advantage. no, this is exactly what our customers want and our people are very excited about it. >> do you think there is any risk of if we got a serious economic downturn the industry returning to true no frills like removing -- we have frontier adding new classes of seats. >> well, you know, everybody's costs are up. labor costs in particular. so it's very hard to be profitable if you are not generating the revenues that you need. but the industry has a history of seats in, seats out.

you know that. again, the good thing for southwest is we are not removing seats to be able to add the premium extra leg room section so that risk to me is something that we don't bear. if the premium didn't show up, and i'm a firm believer that we are going to have the premium demand, we have not taken a row out to be able to meet that because we have terrific pitch in the aircraft today. >> some of us are old enough to remember prior regimes at southwest where they were beginning to flirt with airbus because of the problems at boeing. can we assume that is dead? >> i'm old enough to remember that as well. but, you know, it's something we test on a regular basis and i would just say that as we think about where we're heading -- you have to look six and eight years out in terms of what your customers want and where they want to fly. if we were to order an airbus aircraft today i don't think we would get that before '28, '29 at the earliest. as we think about what our customers need, that will determine the aircraft that we need and that will enter the

aircraft choice discussion. no, we owe it to our shareholders to look at everything. >> bob, a lot of your previous interviews on our network were about that fight with elliott, it was nasty but came to an end. you have a lot of new directors as a result. how would you describe the boardroom now? i know it was only as of november 1 so i would imagine you haven't had that many meetings but i'm curious as to what the conversation is like now and how it's different. >> you bet. it was an interesting summer with the elliott and i will tell you despite all that went on the elliott -- despite our whole plan was already under way but the elliott work sharpened our plan, and the new board and the new board members sharpened our execution. it will. we have had a board meeting, we have five new board members that came from lliott, we had also added the cfo of chevron, we added a former ceo of spirit and air tran and we had added an industry veteran that started indigo. so a lot of new board members. but the very first thing that we

did in the board meeting was talk about how we're going to work together and we are all dedicated not -- not as elliott members and former southwest prior board members, but we are dedicated as a board to do good for southwest airlines and our shareholders. so we are aligned around that cause. if anything, the new board will push harder, more challenging discussions and i think that is good for southwest airlines. >> of course, it must be a bit startling to step into a boardroom and basically look at almost all new faces. >> it's about 50/50. we do have four former airline ceos on the board now. i view that as a good thing. the folks we have added have run everything from legacy carriers to ulccs so they know a lot and can challenge me. i welcome the challenging because it will make us a better company and push us to hit our plan and i'm accountable to that. there's one ceo of southwest airlines and that's me and i'm accountable to delivering on the plan we put in front of us.

>> i read a cnbc article october 23rd when the deal occurred. i believe in respect for executives who have done a great job, i preface this saying that. the lead southwest airlines and elliott investment management struck a deal to avert a proxy fund in exchange to name six board directors and early retirement for gary kelly, southwest ceo bob jordan will keep his job. i mean, is that dignity, mr. kelly served pretty well, give him the boot, you get to keep your job. hey, terrific. i don't know. i don't know. maybe it's the nfl and i don't understand it. >> yeah, i don't know that i view it that way. the first time i have had a trip to an activist investor and your desire and all of your other shareholders' desire is to come to a workout and move the distraction away and we did need to add board members and diversify our board. one of the questions, ton honest, we did a lot of work

both management and independent board members to hear from the shareholder base. one of the questions was the executive chair role and my role. >> right. >> what are the relative roles? who is in charge? can you execute the plan? gary did a fantastic job for southwest airlines, leading us through the pandemic and the financial crisis, but there's one ceo and that is me. i set forth the plan that you see -- that you saw at investor day, i'm accountable to delivering. it adds $4 billion in ebit through 2027 and is going to produce terrific returns, roic in excess of 15%, margins 10% or greater, 2027, and we're going to do it. >> well, you have a ton of cash. i mean, your balance sheet has always been excellent. >> we do. >> is there pressure in the boardroom to say we're behind, let's jack it up, buy a lot of stock and get to where united is and the kind of numbers we're seeing from delta? is it on the griddle, that kind

of thing? >> we have cash and short-term investments roughly $9.5 billion, a net cash position. we just announced recently the $2.5 billion share buyback and last week when we upgraded our unit revenue guide, which is because the initiatives are showing up and the tactical initiatives are showing up we announced the next asr, $750 million accelerated share repurchase. so the intent is to close that 2.5 out in 2025. effectively that works down the excess cash and second it pulls back the equity delusion that we did during the pandemic. no the intent is to be prudent. we have always had a terrific balance sheet, always had guardrails around how we think about our financial position, but, no, we're going to work the cash down to something that's reasonable. >> one of your colleagues at another major in recent weeks was complaining about what he called government overreach when it came to, say, fees and so forth and regulation. do you think this new

administration will have a truly lighter touch? and if there is a push on efficiency at agencies, is there a risk that they cut into some muscle for industries highly regulated like yours. >> we weren't part of that hearing because we don't have junk fees, change fees and bag fees. we've always been able to work with any administration. i do think priority one is the faa, we have to get controller staff, we have to really work on modernizing atc and faa technology. mike whitaker has been a terrific job and we need to keep that momentum. no doubt the focus is on the faa and the ability to run the system at its capacity. >> bob, we have just seen the spirit deal but at the same time everyone is buzzing about how the new administration will let a lot of m&a happen. have we seen the high water mark in your industry and no one talks about m&a anymore? >> i obviously can't speak for the doj and i can't speak for

spirit, but there is a general thought that those transactions could be easier under this administration. one thing you look at the industry and there's been so much consolidation. there are in my mind a limited number of transactions that are actually left that could be considered. but you could see more m&a. we're focused on southwest airlines. i'm focused on our southwest even better transformational plan, i'm focused on delivering on the $4 billion in ebit through 2027 and focused on getting roic well ahead of 15% just like we did in 2019 for our shareholders. >> i want to thank you for coming on. ceo of southwest, bob jordan. >> always good to be with you, jim. >> you've always been willing good and bad times as has your predecessor who i personally felt like should have not been able to -- i admit it, he deserved more. >> no comment. >> thanks, bob. >> as we go to break let's check bonds today. we've got that important cpi number. a ten-year note auction as well.

short end a little lower on yield today, i think 4.12 two year and the ten year holding on to 4.21. stay with us. to go further, you need to be ready for what's down the road.

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jim, what's on "mad" tonight. >> hyper scalers, enterprise software. how about if i told you that utilities have been much better return in the s&p and one of the best, maybe the best is sempra, sre. the s&p is up 559%. utilities can kill it and sempra is the best. i can't wait to speak to jeff martin tonight. you might get nasdaq 20 k today. >> the mag seven everyone wrote them off. >> mag seven beating the s&p by the best percent analogy since may of '23 this month. >> i think apple the downgrades we saw at 169, not that

effective. it just turns out that apple -- oh, it's at 249. i think that was a premature -- >> alphabet shares really on a surge here, too. >> waymo. >> waymo. >> waymo. >> buffett sell too early? >> quantum. >> apple. >> amazon now that they've destroyed walgreens. what did that leave? oh, tesla that's been upgraded. >> we will see you tonight, jim. >> if it is the laggard -- >> "mad money" 6:00 p.m. eastern time tonight. nasdaq, 20 k. stay with us. in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance.

cla - cpas, consultants, and wealth advisors. we'll get you there.

it is all for club members. >> it is much more interactive with jim on a daily basis, so i can stay on top of things and actually i have gained so much knowledge for >> i watched the morning meaning every day. it provides a good framework on what he thinks is going on. >> get invested to join the club today. go to cnbc.com/join jim. good morning and welcome to another hour of squawk on the street.

>> david paper, it is a pleasure to be at the new york stock exchange. stocks are higher. they have been pretty stable since the open. nasdaq is a leading peer tech is in charge again, 1.3% gain right now. really bouncing back today. the dow a bit under pressure, down 57 points. one reason why? rallying treasuries. we do have a big auction later today and we have the cpi report, which we will talk about. the rally means lower yields. 4.2% on the ten-year. 4.1% on the two year. we are 30 minutes into the training session. apple had a new time high. the tech giant releasing new software, which includes a long- awaited chatgpt integration with cereal and also reports of their first server chip design for a.i. also, watching shares of kroger and albertsons. albertson's terminating the

merger after a judge sided with the ftc to block the deal. much more on the fallout and what comes next with those stocks later in the show. shares of hershey and mondelez going in opposite directions as they are looking at -- we have more on that after mondelez makes a decision with cash is ending its shares higher and hershey lore. first, the story of the day, inflation. there is good news and there is bad news. overall, the headline number comes in in line and the market is taking that as good news. no big surprises. here is the point we saw in november. it was higher than the month before, but importantly, it was also consensus. again, no surprise on that. the bad news is the year-over- year number accelerates. 2.7% inflation from 2.6% inflation. also bad news. core cpi, food and energy prices, 0.3%. that was in line with the forecast, but look at the

trend. four months in a row where we are seeing 0.3% jumps in core cpi. the fed wants to see continued further progress towards -- this is not progress. this is stock. good news and bad news. the good news is it is pretty stable, the trend, and we are not climbing into scary levels like we saw, but the bad news it is stabilizing at a level that is not at the 2% mandate of the fed. if you strip down where the inflation is coming from and where some of the hot-spots were this month, we have broken it down. food, 0.4% jump on food. that was a bigger job that we we have seen in food prices than in previous months. it was actually food at home that was the culprit. so, grocery prices, see that jump? 0.5%. it had been -- that had been

some of the problem, pressuring food prices higher. also a big jump in used car prices. 2% higher. utility piped gas, even though energy overall was pretty stable. and shelter, at 0.3%. it is still contribute in two inflation, but the good news, david, that is a step down from where we have seen it in recent months. if you look at the deflationary spots, not many of them with a negative sign ahead of the number, but a few. electricity, good medical care commodities, goods. there is enough -- >> what is keeping us at 0.3? are there any -- we just went through the mall, but i guess what was expected perhaps to decline more than it is or unexpectedly stubbornly high? >> there is nothing really too surprising, but what is keeping us high is food prices are still high and we saw meat in the last month being high.

eggs continue to be volatile and higher. we are also seeing the coffee prices. we have seen coffee futures jump up and that shows up in the monthly numbers we have seen. food is one. shelter is still stubbornly high. it is not at the levels we have seen in prior months, so that is good news, but it is still stuck. inflation is still elevated. if you're getting auto insurance, that is a costly part of the market. medical insurance as well. these prices just remain high and the question is, are they going to continue their downward trend enough that the fed can feel confident cutting interest rates? what is interesting is after this number, market odds for the fed cut next week actually rose. they are above 95% if you look at the tool. the market is looking at the fact there were no big surprises and that the fed is pretty much committed to a rate cut next week. the funny thing is it really feels like call to market is --

even if there is some hesitancy, because of these firmer inflation the numbers and the fact that every data point is coming better than expected, which does not argue for a cut, the market is pointing them into the cut. something to talk about with our next guest. wells fargo has a 25 outlook. seeing some growth acceleration in this country and some solid investment returns. dale kroc is with us, a wealth and investment cio. to sarah's point, three-month annual is above the year. are we in trouble spot? >> i do not know if we are in a trouble spot, but i think sarah has the right point, which it is not about the december cut, which will happen. >> why? could that be a mistake? >> it could down the road because i think what the fed is still thinking as we have to bring rates down. policy is still restrictive and we are above neutral rate. they want to keep walking that down. >> where is restrictive? how do we know we are above restrictive? >> you have to be somewhere

around 4% on the policy rate and most of the street would argue 3.5%. when we do it, we get ready to turn the calendar out of consensus almost across the board. so, we are higher on gdp growth, 2.5 versus the street at two. we are higher at inflation by almost a full point. we are 3.3 versus the consensus at 2.4, which means nominal growth will be higher, which we know that earnings are in nominal terms, right? we have our earnings growth number higher than the street is. the street has walked it back to 2.75 for the s&p and the street is down to -- we think interest rates, naturally, will be higher for longer on the long side of the curb. our tenured numbers are at 475 versus 422. >> so, a lot of people are on the other side of us. we will see. we could be the out of

consensus idea, but if you get that inflation, to sarah's point, we will close the fourth quarter with 3.3% if you look at the dvd tracker. it is steady unemployment and higher than anticipated inflation, but not maturely. the fed, we think there is one cut extra. >> i was going to say they're looking at december and one more. any idea when? post tariffs? >> i think it is a january and february time frame, where they skip january and they look at february. >> then they might be done with a while? >> it plays into your narrative. they do not have the ammunition to cut it. if they only go 15%, why would the fed need to cut? the economy is humming along at 2.5 or 3%. >> you agree they will just cut next week because the market is telling them to cut? >> i think it is a baked in.

>> it is a little late. >> it is little bit late to change. he did not get anything out of cpi other than non-consensus, which is where it should have been. i think they'll move forward with trying to normalize policy. they call it a normalization, not lights are flashing red and we have to cut. sectors, you have to be heavily procyclical. financials, industrials, calm services, full weight on technology. if you unpack earnings for next year, carl, take her 30% growth, you have to get 5%, 6% out of tech. tech is still well over a 3rd% of contributions, which means tech has to play. if it does not play for some reason, we will be wrong on our earnings. >> i assume you do not go with smith? >> i would call a full weight, but not favorable. we just do not see that environment playing out well. what i do think, and it has been well publicized is the environment lights up next year because large body small.

we have large outperformance of small. credit spreads are ight, which creates a cheap environment and then we get the deregulation and the ftc announcement. more favorable environments. then some animal spirits picks that up. >> and those sectors most leveraged remains what? financial? something else? >> i think financial is in the small and medium-sized. i consumer discretionary is one of the key areas and maybe some industrials, right? with those tight credit spreads, if rates trend down, you can find those activities that have been just anemic and dead post-covid. >> what is the biggest risk to the benign market view next year? is it higher inflation? >> that people have inflation run. not just 5% or 9%.

it is wrong at 3.5% inflation, which means the long side of the curve has to be priced differently, which means interest rates have to be higher than what people expect. the fed cannot cut and becomes of grind. >> you do not think that they will -- >> no. they might put an extra cut in just as a precautionary thing, but i think they -- they are not in the game of guessing. they let the data play out. i do not expect as much noise out of the s and p numbers as people think there are. >> it will be fun to see your playbook next year. >> it will keep us honest. >> we will see you soon. >> as we go to break, here is the run out. albertson's ending their merger agreement with kroger and filing a lawsuit for breach of contract. it comes after a judge blocked that multibillion-dollar deal. what is next for these two supermarket chains. apple has new a.i. features on the newest divided including access to open gpi's chatgpt.

now what this means for the dealmaking environment other the next administration as squawk on the street continues. finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

take a look at tech, ending on a strong note. up sharply. we have the nasdaq at -- you can see some of the reasons. that alphabet up over 4%.

perhaps gm getting out of the robotaxi business. you can see medi-share's, nvidia up 1.8% and test also up 2%. interesting to note. in part, president-elect trump names his victory replace the ftc chair and he may not be a huge fan of that as well. we have more on that choice. >> david, think it is very fair to say that president-elect donald trump selection for chairman of the federal trade commission will be a sharp departure from the current chair . this new person is promising to repeal regulations and stop what he calls a war on mergers. andrew ferguson is a current republican member of the commission, which means there is not a confirmation process on capitol hill before he can assume the job in january. in the announcement, they said that she would be the most

america first and pro- innovation ftc chair in our country's history. ferguson is seen as a sharp critic of tech companies like google and amazon. he promised to go after, quote, quote, collusion on diversity and equity and environmental initiatives. he also promised to fight back against the trans agenda, as he said. one significant point of divergence with the curative ministration at the ftc? ferguson wrote a 45 page dissent against the ftc's effort to ban anti-compete agreements between companies and their employees earlier. he said companies should have the right to enter into such agreements while lina khan says a harm workers. a judge later struck down the measure and that whole debate is sort of in limbo legally. separately, a trumpet -- he announced mark met her to be a commissioner on the ftc. he is also seen as someone who is aggressive on big tech like google and amazon. he co-authored a brief in

support of the by the department of justice and their position on banning tiktok. a lot of scrutiny coming from big tech, for sure. >> also, i would reference our interview with him coming federal communications commission chair. there does some -- seem to be a lot of focus on this free speech argument and big tech perhaps preventing it from taking place. as opposed to everybody else who seems to be perhaps thinking it will be a cy-fair when it comes to allowing mergers. >> i think that is right. you have two separate mna entirely and not look at this as a green light for all of it, but as a green light for mna in certain sectors. they could say there might be some m&a activity. if you are big tech, if your mediacom if you're in a company caught in the culture wars, and

you see what a statement was about the trans agenda, di, environmentalism, all those things, that might attract more scrutiny from the strap ftc in the future. >> okay, this was one everyone on wall street was watching. thank you, eamon javers. a lot of drama. calling off their merger with grote or after a federal judge yesterday blocked the deal. albertson's also filing suit against kroger, saying that kroger failed to exercise their best efforts to win regulatory approval for the deal. it is seeking billions on top of the breakup fee for what it says is basically kroger not being serious about divesting some of the grocery stores to satisfy the regulators. kroger just responding to the albertson's lawsuit, calling the claims "baseless and without merit." they refuted the allegations in the strongest terms. they say in light of the repeated intentional material breaches and interference, throughout the merger process, this is getting pretty ugly. they continue saying they're

trying to deflect responsibility and that kroger looks forward to responding to these baseless claims, what they call baseless claims, in court. they went to lengths doubled the merger agreement throughout the entirety of the michael trihey process and the facts will make that abundantly clear. so, now comes a legal fight of kroger versus albertson's and not just the ftc. that is what the fight was all about and that federal judge yesterday announcing that they are blocking the deal. perhaps not such a big surprise? >> not the biggest surprise. we have spoken about it many times at this desk. the arguments you often articulated them on behalf of kroger in terms of they are competing against the cost goes and the walmarts, not against other competition. i did not passed muster with the judge. there were many who believed this would happen to this deal. i think mcmullin was steadfast in his belief that he would get

it through. not only has he not gotten it through, but he is in a tussle with his firm or -- former merger partner. >> i thought that -- what kroger openly said is we are looking at our options. i thought maybe there was a chance that they would appeal and try to go to a new administration because what kroger also said, this is interesting, if we do this deal, $1 billion we will invest towards lowering grocery prices. $1 billion we will invest toward grocery workers. $1.3 billion we will invest in refurbishing albertson's stores. you know what president-elect donald trump mentioned yesterday? anyone who invests $1 billion into america will get rid of red tape. i sort of thought that was a signal. >> you are not alone and that there is some hope among some investors and stephen fienberg at 26% -- mr. fienberg is on the board of albertson's and somebody who is close to

president-elect donald trump, potentially will take the number two position in defense as well. that was part of a scenario. will they try again under a trump administration? no, they will not. they will not try again. albertson's is having, as you said, terminating the merger agreement and suing their former merger partner and kroger saying, hey, does not our fault. you guys -- you had multiple breaches of the agreement. that does not sound like two companies that will ever get back together. >> it is more legal issues for these companies. this deal was announced in october 2022. this has been going on for quite some time. albertson's is seen as the weaker link coming out of this as an independent company, but stocks are up, which is notable. kroger up 1.5%. you spoke to though -- to the ceo. >> for all the talk about a wider aperture for mna, in the past few days, scuttle deals are the prospect -- apparel and

steel and grocery and staples, although we do not know how far that one god, but it is not the kind of environment you would think would lead to things going bust >> they are giving their parting gifts, i guess, to corporate america. >> the ftc -- >> positive ruling for two big ones that we followed on tapestry and now this one. neither one of which i would argue was an unexpected outcome. >> tapestry was a little more surprising. >> may be for you. but there were plenty of people who believe the outcome, but not -- not horizon. they did not succeed there. to your point, there will be a lot more mna coming. there will. there are lot of active discussions. i'm just hearing it every day. it may not be hershey's and it may not be a walgreens, but there is going to be activity. it will not include, perhaps,

this company. >> grocery prices are still high. >> the five-year stack is 38%, 39%? >> more unexpected jobs in everything. >> the biggest month for month for food at home in a couple of years. we do get some commentary from goldman and jp morgan about that. we will talk about that and the speculation continuing regard telling -- regarding mondelez ay hershey's. st with us.

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we continue to follow the developments around the murder of unitedhealthcare ceo brian thompson. the suspect, luigi mangione, held without bail on gun and forgery charges. hello, bertha. >> new york governor kathy hochul says she is coordinating with the manhattan district attorney's office to file what is known as a governor's warrant, a formal exhibition request with the court of pennsylvania to allow man joni to be tried on murder charges for the fatal shooting of brian thompson. the attorney said he is

advising his client to plead not guilty to charges in pennsylvania and fight extradition. >> i have not seen anything. i have not seen one spec, one drop of any evidence. so, we will be that today. >> he has not seen any evidence. police say following mangione's arrest, they found a 3-d printed gun and suppressor in his backpack similar to what the gunman was seen using an surveillance footage and a handwritten manifesto of sorts, which investigators say lashed out at big corporations, the healthcare industry, and unitedhealthcare in particular. the new york times reporting this morning the notes described going to an analyst conference and killing an executive, quote, what do you do? you whack the ceo at the annual

convention. it is targeted, precise, and does not risk in a sense according to the times reporting, citing two unnamed law-enforcement official sources who said that the notes were written in a notebook found with mangione in a reddit thread belonging to mangione. you liked using a spiral notebook to, quote, organize his thoughts clearly. >> thank you. let's get a news update. we will go to -- >> good morning to you. u.s. officials say that russia may use their new intermediate range ballistic missile against ukraine in the coming days, however according to u.s. as men's mother the so-called missile is not a game-changer. russia launched it last month for the first time. russian president vladimir putin has claimed the missile is impossible to enter -- intercept and has destructive powers is similar to a nuclear weapon. a bankruptcy judge rejected the onions bid to buy out the far-right conspiracy outlet. he

cited with jones after a 2-d hearing saying the onion had not submitted the best bid and was wrongly named the winner of the auction. the sale is part of the bankruptcy case after he was ordered to pay $1.5 billion in defamation lawsuits for calling the sandy hook school shooting a hoax. the franklin fire in malibu has grown to nearly 4000 acres since interrupted late on monday night. some 20,000 residents from the malibu area fromvan to cher has been forced to evacuate . i will send it back to you. >> still to come, apple launches their long-awaited chatgpt integration with siri. t will take a closer look a what is next for the tech giant. you can see the stocks at another all-time high. we have a number of them. we are back in three minutes.

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a 10% gain over two days on google, announcing breaking news. let's get to derek. >> google now announcing the next generation of their large language model, gemini 2.0. it is calling at the next era of models built for the era and experiential version called gemini flash, available today to all users along with new features that include reasoning capability and advances in multimodality, meant to get us closer to that next leg of the a.i. race, a universal personal assistant or agent. google leaning into the distribution advantage by bringing more advanced reasoning capability to their a.i. overviews, which now reaches 1 billion people. they are still using traditional search, but they are getting google's a.i. answers. i also want to show you this develop. a new i/o event, it got an

upgrade and it leans into this new form factor, smart glasses. >> can you see if there any supermarkets along the way? >> this demo, another part of it shows off better memory capability, giving the user that you saw in the video the door code after it was told that code hours earlier. google says that there is more news coming shortly on the glasses, but this also just the era of a.i. could involve new consumer hardware and user applications as questions swirl around whether advancements in the actual model themselves have peaked or plateaued. this release from google also follows a spree of products and feature announcements from rival openai as part of their 12 days of -- it feels as like there is a lot of urgency among gen a.i. rivals to get user applications

out. >> as we watch alphabet reached an all-time high come up almost 38% for the year, i can recall it was not long ago that we were having a conversation about whether their monopoly was threatened, particularly by openai and chatgpt and so many of the advances being made. where do things stand in terms of investor expectations or what we are seeing in new products when it comes to that key question for this company? >> it is complicated. it is search business, where it has been dominant. it is under threat from the doj lawsuit and the lawsuit goes further than looking at threats. it suggests the doj is suggesting remedies that could hurt google's position in the generative a.i. race. as i mentioned, google has this huge distribution advantage. it can use their dominance to get a.i. overviews to a much larger group of people who might experiment with it and say go and sign up for a jet --

chatgpt subscription. google reportedly asking the ftc to look into the microsoft openai partnership. the way these things were signed in earlier stages of this gen a.i. race a few years ago made it so google had -- microsoft had an exclusive partnership in all of these ties were made -- we are looking at the monetization of large language model. that was sort of the path looking forward. google has a really good position to really capitalize on getting this through their search dominance and the worries over that are not insignificant. we have made this point a bunch of times. even though they had all the success in the technology and quantum computing, it has the lowest evaluation on a forward pe multiple of all the mega caps. may be underappreciated or that threat is very appreciated. >> interesting. between gemini, quantum, the

headlines come a lot of headlines going this way just this week. thank you. let's get to some breaking news on nvidia. >> we had a supreme court decision this morning on nvidia. the supreme court is saying it is not going to take up a case involving a shareholder lawsuit against nvidia. they say that was granted initially by the supreme court, meaning we are sorry. we should not have taken of this case in the first place. what that means is the lower court ruling involving nvidia will stand. the lower court allowed a shareholder lawsuit against nvidia to proceed. that will now proceed -- this is about an initial shareholder lawsuit against nvidia, suggesting nvidia did not properly disclose how much exposure it had to crypto mining as opposed to gaining in

terms of use of its chips. the idea here is crypto mining is a much more volatile segment than gaming and if they did not disclose properly how much people were using chips for crypto mining, that might have given investors a bad feel for how volatile potentially the earnings would be back in 2018. this case now is suggesting that lawsuit can go forward. also, some impact potentially for other publicly traded companies that are deciding how much nuance to share in their disclosures as they file with the federal communications commission, how much detail and investor insight do they need to provide on the mix of customers they have and the volatility of the customer base. all of that. that will give people across corporate america something to think about and it gives a potentially new risk to nvidia they might have to settle their shawl -- lawsuit at some point in the road. we will bring you nvidia's, and as soon as we have it. thank you. joining the big party we are seeing today. apple two, the tech giant leasing their iphone and ipad

and max offer that includes a long-awaited chatgpt integration with siri. there are reports that they're working on a jik a.i. chip with broad calm. shares are rallying big. we have a hold on that, a price target of 215. what you think is driving this recent surge? is it about the new pple intelligence features? >> clearly, there is a lot of investor enthusiasm for apple's a.i. strategy. the rollout integration with chatgpt is very important for apple. the challenge is, will there be a huge a.i. fueled upgrade cycle to the iphone remains to be seen. when you think about the fact they rolled out the hardware in september, now we are here in december, they are looking at the much-hyped software. a lot of consumers might wait until the iphone 17 for next year to get an apple device, given the disconnect between the hardware and software timing. >> is that really where your biggest hesitation is on your

view on apple stock? where will pass to her price target. >> you are looking at a north of 30 times -- with potentially missing earnings and i think there is enough reason to cast doubt in this potential a.i. field upgrade cycle. when you think about that, they also have regulatory challenges to overcome in europe and china, so it is possible a lot of these a.i. features will never make it to the base. >> even if it is delayed, is it still coming, the supercycle? >> yeah. i the other reason we may not see the a.i. supercycle is while investors are well schooled in the potential benefits of artificial intelligence, what you're seeing is a lot of education on the consumer front. i google has done a great job with their gemini ads to promote the benefits of a.i.

to consumers and by way of comparison, apple has not done as well showing how apple intelligence and a.i. features are going to make buying a new iphone. >> do you see apple becoming the victim of some trade war crossfire with china next year? how would you grade. ability to develop relationships with china and the new administration? >> sure. i look at tim cupp as ceo and -- he has excellent relationships with the chinese government and american government. if anyone can manage it, he can. i think the good news for apple, when you think about a second trump term, is that he is going to maintain the low corporate tax rates, so i think they will have to navigate a challenging environment for tariffs, but the good news is

apple generate massive profits, so to be able to have a much lower tax rate, i think there is also some positives for a second trump term for apple, even with the terror of challenges. >> is there regulatory risk? >> absolutely. if you look at the regulatory risk, what you will see is a second trump administration could be challenging for big tech. if you go back and we talked about google, the antitrust came came about in trump's first term. i think it will be challenging for big tech and there is definitely that risk as well for apple. >> all right, tom. thank you very much. a somewhat skeptical take on the apple rally, which is building on its gains even more today, along with the nasdaq. it is fueling the s&p 500. tom forte, thank you. >> just about 25 points away. another name we are watching is tesla. they raised their target to 345. they were at 250, but they do reiterate a neutral, saying they say they will face

headwinds in the core auto business over the near to medium term, including slower global ev demand and some pricing pressure. stock has been surging so far this month. we will be right back. growing your business is easy once you know the moves. with godaddy websites plus marketing, you can quickly create a website, and ai will customize it for you. get your business out there and get more customers in here. no sweat... for you anyway. create a beautiful website in minutes with godaddy.

the goldman sachs financial services conference is wrapping up and iist putting another big spotlight on an are performing sector and the broader s&p. we will speak with one manager holy out the best stories he has heard during the event and which stocks are best positioned for future success. tune into our market navigator segment on power lunch, 2:00 segment on power lunch, 2:00 eastern timesparent advice,

every day, over a million multi-millionaires, trust schwab with more than three trillion dollars of their wealth. ♪♪ (intercom) t minus 10... (janet) so much space! that open kitchen!ealth. (tanya) ...definitely the one! (ethan) but how can you sell your house when we're stuck on a space station for months???!!! (brian) opendoor gives you the flexibility to sell and buy on your timeline. (janet) nice! (intercom) flightdeck, see you at the house warming. let's look at shares of mondelez and hershey. hershey coming off their lows of the session at this oint, following this closely, of

course, since reports of mondelez having approached hershey recently. i believe it may have been around thanksgiving-ish. what would in fact result from that? at this point, it is unclear to say the least that a deal will result as sarah and i made clear previous reporting. it is the hershey trust that holds much of the power here. even if the ceo of hershey wanted to deliver a deal, it is far from clear, as was with her predecessor, that a deal can be delivered. as one interested observer said , mondelez, it will always and forever want to purchase her cheek, but it does not mean it is going to actually be able to do so now. i reported earlier and we will reiterate my understanding is while that approach came, it was not at a price as indicated initially that god the interest of the hershey trust.

therefore, it may not be getting anywhere in terms of progress and then there was this from mondelez itself. in a press release designed to tell us about their plans for capital return, and the share buyback, they included the paragraph given current market conditions, a purchase is an opportunity and key priority. the company remains committed to an acquisition strategy focused on bolt on assets to similar acquisitions. so, sarah, the trust holds so much power here. it is a $24 billion colossus, $24 billion as the end of fiscal year july 2023. they hold 54+ million shares of hershey. but they are the key here. so, that becomes the key question as to whether a deal can get done mondelez having tried to do so back in 2016 and faced opposition within pennsylvania and -- >> report is interesting.

it is your understanding that they made an offer and the price was too low? >> the approach. you certainly gives some idea of what kind of value you are willing to offer in the initial approach, and if that value is something you can come back with, then you have a negotiation. it is not clear to me that took place. again, my understanding is that perhaps the number was simply too low for the trust to have interest. you tell me about the future and it is difficult when you're the hershey's ceo. you are constrained to some extent. they wanted -- mondelez was also interested potentially in mars. what you do if you are trying to create value and you are prevented from doing acquisitions? do you consider a sale? >> probably. that is why the market got so excited because it did seem like a good option in a

business where we should talk about the backdrop, which is low growth. they have given back a lot of the pricing increases in margin gains they were able to get in the post-covid environment when they had a ton of pricing power. the consumer pushed back. it was elastic. the consumer pushes back and the volume gains have been given up and the margin gains have -- focal prices have risen, like sugar. >> whatever rfk jr. will bring to the table. >> true. maybe if he bans dyes. it could be more desolate cold -- difficult, especially for domestic companies. it will be more costly for them to make the changes because international companies have been dealing with laws like this in canada and europe, so they have more scale and maybe can manage the cost side better. this is also a tbd. the market has not been so hot on these companies. when we come back, we are going

to talk about money movers to the former nbc director, gary cohen, talking from the inflation number two cabinet pics to what we can expect on the trade policy. it starts at the top of the hour. we will be right back here on squawk on the street. the dow has joined the s&p into positive territory. it is really tech that is the star of the show. plenty of games in industrial and staples. we will be right back. at t. rowe price, we help advisors move forward by building agile etfs designed to outperform the index. that's the power of curiosity. better questions can lead to better solutions. t. rowe price. invest with confidence.

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cnbcwith their annual people's priorities report, serving over 3000 consumers across locations, incomes, gender, and race, impacting issues that matter most to americans from corporate leaders. we have some highlights with brandon gomez. >> these are the issues that will shape the 2025 rankings and we will unveil it. if you're in corporate leadership, you will want to hear this. americans agree workers are

specifically -- wages should be the top priority of companies. the number one issue? paying a fair and living wage, meaning they can pay their bills and support their families and have a bit of money left over to save. interestingly, emerging, ethical leadership rose 5 places to become the second most important issue for americans. ethical can be subjective. they say it is transparency and honesty about business operations. how can leadership actually do that? take for example fair pricing. another issue that emerged for the first time. focus groups found more americans are expressing economic anxiety, concern for the personal finances, we talked about it around the election as their more aware of price hikes and gouging than in previous years. they expect more from ceos when we get cpi data, like today. you said food at home, seeing the biggest month on month jump in two years. more americans want leaders to focus on core operational and financial matters. that is compared to four years ago, when ceos were expected to

address hot button social issues. interesting given all the dei pullback. >> yes, thank you. gomez back at hq. i do want to focus on the health insurers. obviously, rightly so, we have been focused on the horrific murder of brian thompson, the ceo of unitedhealthcare. there is a stockmarket story here as well and the stock of unh, if you recall, it was their investor day and guidance receives well into the positive, but the stock price is down sharply since then come along with many other insurers in part because of the chorus, i guess, of questions about our healthcare policy and healthcare system and the frustrations with it. you can take a look at what has happened to the stock. >> on the health side, there is this journal piece about the senate bill that would require

insurers to divest their pharmacy businesses, sponsored by josh hawley and elizabeth warren. just to talk about the circularity of some of these policies. >> it is not just insurance, but drug prices and the pharmacy benefit managers owned by the likes of cbs or unitedhealthcare. notable for the declines, particularly in light of a stronger market overall right now with the s&p up 0.565%. as we indicated, while the nasdaq is often high, it is having a strong session, led by mega captech. we have more right after this. at least, not the way it could work. your people are buried in busy work. and you might be thinking... can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. because when your people work better, everything works better. so, let's get to work. idris elba works here? mm-hmm. ya, he's super nice.

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insurance. good wednesday morning. welcome to "money movers." i'm carl quintanilla with sara eisen live at the new york stock exchange. goldman sachs director gary cohn with us, the president-elect's leadership picks and future of policy in washington. >> and. why the fed may scale back rate cuts in 2025. and a.i. and data centre creating more power nuclear rapidly rising in popularity live on