correction territory. that means 10%. that move putting pressure on the dow futures which after all is said and done, it closed lower yesterday. eight straight sessions for the dow. it's tuesday, december 17th, 2024. "squawk box" begins right now. ♪ ♪ good morning. welcome back to "squawk box" here a cnbc. we are live at the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen. becky quick is reporting live from the bank of america. >> good morning, guys. we will talk about a lot of things at bank of america. i'm here on the new york trading floor. this happens as the fed kicks off the final meeting of the year.

we will be joined by brian moynihan and checking in the market experts. the question that joe was just asking why cut rates right now? the question we have of jay powell. we will ask that of mark, the head of the rate strategy at bank of america. we will get to the question because, joe, you are right. we have been asking that question a lot trying to figure out what's going on. we will get views from the bank and maybe with the future might bring with the new administration coming in and what we think of inflation and what bank of america, which has a huge number of customers across the country in terms of the business side and what you see from the consumer side. just how the economy is standing up right now and try to get answers to all of that. >> okay. a lot coming up. brian moynihan and so much more. thank you for that. we will be back with you shortly, becky. take a quick look at markets right now. the dow off 114 points. nasdaq up 6.

the s&p 500 off 10 points. let's show you treasury yields right about now. the ten-year note and two-year note. ten-year at 4.24. the two-year at 4.26. yes, the price of bitcoin. looking at $107,000. pretty nice. >> tom lee. >> yeah. >> 125 to 150 before the end of the year. >> before the end of the year. i don't know. >> i saw people say you really need to -- you know, he said 125, 150 before the nd of end o year. you need to hold it. it's december 17th. getting from 105 to 127. it's not over yet. it's not 2025. >> you need another headliner about the strategic bitcoin reserve and maybe we'll see. >> i don't know. so many different things.

there's a lot of reasons it just keeps going and going. you know, maybe at the point where it is a melt up. i don't know. nvidia melting down a little bit. not too bad. 11%. that is correction territory for recent closing high from last month. the move could signal profit taking on wall street after marquee year. the stock is up 160 % year to date. broadcom hit a record high jumping 11% after the 4% gain just on friday alone after the company reported strong earnings. other chip stocks rallied yesterday amid the nvidia decline. marvell and lam research. on the squawk planner, the fed begins a two-day policy meeting. forecasters are expecting a quarter point rate cut. you have consumer data head today. we have the latest read on

retail sales. economists are expecting an increase up to .50%. that would be up from .40% the month before. bipartisan framework bill to fund the government and an vert shutdown has hit a snag. steve scalise said the main sticking point is aid for farmers. speaker johnson needs vote from republicans, but securing billions in economic assistance would likely force him to make concessions from democrats. here we go again. lawmakers have until midnight friday to prevent a government shutdown. punch bowl's jake sherman will

join us in the next hour. >> it's crazy e haven't talk about this. this time i feel like we haven't discussed it basically at all. we assume it's going to get done. >> they will figure it out. >> probably, yeah. >> we always -- we know what the movie is. it's the 11th hour and it happens. maybe it's a bad bet? >> it's the house. now the house is going to be different because you got, you know, obviously, not january 20th yet. >> narrow majority. >> when it finally happens on january 20th. you still have this de facto head of the republican party now that can put pressure even on some of the factions, maybe. johnson's used democrats before. i don't know if he has to worry as much about it this time. >> mike johnson, the speaker of the house. i think you are right about

losing his job as a result. >> right. meantime, let's bring you up to date of the headlines from the trump transition team. ken griffin planning to donate $1 million to donald trump's inauguration fund. he did not donate to trump during the campaign, but did contribute more than $100 million to pro-republican political action committees that did not directly support trump. trump meeting with the tiktok ceo at mar-a-lago yesterday. that came on the same day that the company asked the supreme court to block a law that would ban the app in the u.s. by january 19th. cnbc confirmed that the netflix ceo will meet with trump at mar-a-lago today. the judge rejected the argument from the trump legal team upholding the president-elect's felony conviction to cover up the sex scandal. the recent supreme court ruling nullified the case in new york.

the judge said it centered on unofficial conduct and not official conduct. trump is expected to appeal that ruling. and shares of pharmacy benefits managers fell yesterday after the president-elect trump said he plans to knock out drug industry middlemen. >> we have a thing called the middleman. you know the middle man. the horrible middleman who makes more money than the drug companies. we'll knock out the middleman. i'll be very unpopular after that. >> cvs health and united health and cigna fell 3% or more. they all own the largest prescription drug middlemen. they used to be independent, but wrapped into the pharmacy companies and pharmacy ben efit managers. we talked to the executives in the industry and say the pbms

have outlived their time. they avdiivka used to be there e out prices for consumers, but they are wrapped up as profit centers for the pharmacy companies. >> existing for their own sake. remember your friends in investment banking and merged and demerged and merged again. medco. >> that's what they were all trying to do. take the middleman out and putting them in the middle. middleman. >> pbms are the new hmos. you guys remember this goes back to the clinton administration when hmos were the bad guys to tackle healthcare costs. part of the problem is this system that's been built upon a system after system and ways of trying to squeeze costs and simplifying things and never come to fruition. you need transparency, you need

to understand how these things work. you find a way to help the private sector and do what the private sector does which is bring costs out of these things. >> people living a lot longer and they want everything that you can get. they want the state-of-the-art healthcare which is expensive. you know, the aging population. i'm not speaking personally here, but the population of people over 65 years old is going to swell and swell and swell. you get up with chronic diseases that cost so much to maintain and you got lifestyle issues, too. again, i'm not speaking personally about being fat or i am. obesity is an issue. less weight cures a lot of things. >> yes. that's the solve. we should talk about this story. we know this guy.

>> i think we were part of this guy. >> we had him on air. >> explain. >> carlos watson was sentenced to nearly ten years in prison in a federal financial conspiracy case. prosecutors accused him of inflating revenue numbers and touting deals and offers nonexistent or not finalized. we talked about it. remember they would pick a headline from somewhere that was describing the company and then they act like the newspaper was endorsing. >> it was worse than that. they would buy -- they would buy ads themselves. >> right. >> in the l.a. times. write an article in the l.a. times in a paid premium paid post. they take that post and they would buy a billboard somewhere and say, you know, l.a. times.

that wasn't. that was the least of the issues. the bigger issue was there was -- >> the numbers weren't real. >> there was a moment that he apparently was on the phone with goldman sachs pretending to be somebody else using some kind of machine to change his voice so it would appear that it was a youtube executive. they were trying to prove they had a special relationship with youtube and they didn't. i'm curious how you feel about this. >> wire fraud. >> how do you feel about ten years? >> imagine what he could have done with a.i. if a.i. was as advanced as it was today instead of a machine where you change your voice? >> he did speak to cnbc, i guess, in his regular voice after yesterday's sentencing. here it is. >> what started as a very unfair and selective prosecution and led into the really egregious

railroad of the trial has ended up with an unfair sentence. how does elizabeth holmes with a fake product end up with 11 years in a $135 million house and carlos watson drives a 15-year old car and eats chipotle and puts money no his company ends up with ten years? even if you elieve everything they said, which you should not, the average person for this gets something like two or three years. >> he does plan to appeal. >> right. what do you think? what do you think of the sentence for real? i'm, i'm, i'm very mixed views. i do think -- he's right about the sort of -- i'm not -- i'm condemning the whole thing. this is the fake it until you make it.

elizabeth warren. >> her, too. >> elizabeth holmes. >> that was one of your best freudian slips. >> elizabeth holmes got 11 years. i'm going back. dennis kozloski with seven years. >> there are sentencing guidelines for whatever. >> this is federal. it's very hard for the number to actually go down materially. >> there are laws. there are guidelines for sentencing. you might think that's harsh. >> look, the good news is if there's not a deterrent out there for folks watching this show who run their own businesses or thinking about, if i could skirt a little and fake it until i make it, yes, i hope you are watching this and saying that's a bad idea. >> it did -- he was trying to mislead people about the

finances of the company and once you go to the point of yeah, high, this is -- you know something's wrong there. you know that's a bridge too far. you can't nd that, right? >> the whole thing is indefensible. >> where do you buy one of those? >> a machine. >> you can buy it for $20. >> do i sound like batman? >> no, no, no. the voice. >> it changes the voice a little bit. >> i don't know just to be 100% clear. i don't know if they ultimately determined that it was him doing it. just that it was not the executive from youtube and the speculation from the folks at goldman sachs at that time was that it was potentially him. >> yeah. just a general rule that there are things you know you are doing wrong that can't be good.

don't do it. >> don't do it. becky, don't do it. >> just say no. >> i won't. i won't. when we come back, the fed kicking off the two-day policy meeting today. we will get you ready for the decision. i'm live on the trading floor today and be joined by the head of the rate strategy. by the way, later, we get comments rom ceo brian moynihan. we while hear ill hear what he with the consumer and economy and the market expectations next year. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by truist securities. experience, expertise, execution.

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welcome back, everybody. investors are gearing up for interest rate decisions by central banks this week beginning with the federal reserve and the widely expected quarter point rate cut at the meeting tomorrow. we want to bring in mark abana at bank of america securities. the question we have been asking is why? why do the cut now if you are not sure and clearly signaling and telling people that you will slowdown after this and you may even stop cutting rates.

why go ahead with it? why not wait until january and see how things settle out? >> that is a great question. thanks for very me. we look at a hawkish cut. your question why. the fed has long believed they are in a restrictive stance and normalize monetary policy. we are worried about monetary policy too tight for too long. while they have seen progress on inflation slow, but they have seen the labor market continues to moderate. they want to balance things. they likely worry if they don't cut, they risk upsetting markets. they will go ahead with the cut and signal they are likely moving to a gradual pace. >> if you look at the labor market, we're in great shape. if you look at the unemployment rate. most of the data we see suggests

not only is the economy including chugging along, but inflation is stickier than expected. what happens if we go into four or five years of inflation that is above target? >> if we go into that period, i would certainly expect to see interest rates remain high and a risk of inflation expectations to unanchor to some extent. the fed is going to monitor the inflation expectations. that is the single thing they care about most. if they see the inflation expectations risk of unanchoring, they will start to hike again. that is a risk not on the market's mind. we expect and price in rate cuts in 2025. it is a risk that if we see inflation stay high and accelerate, the fed would do that. >> what would you do? >> i would do what is widely expected to do. i would go ahead and cut because i signalled that is my intention. markets are expecting it.

>> can we go back. everybody who says cut, we expect it. if you were just looking at the data, would you still cut? >> i think i would largely because inflation has been a little bit ier, there are signs the labor market is moderating. it is healthy. the fed wants to keep it that day. you have seen continuing jobless claims tick up a little bit. there are signs, i think, the labor market is continuing to cool and the fed doesn't want to stay too long and result in any type of unnecessary tightening. >> let's talk about the debt. $28 trillion total marketable debt, but $36 trillion in total public debt. it starts to add up after a while. >> it does. as we were mentioning earlier, it starts to add up quickly with elevated interest rates. interest costs comprises a larger share of the total amount

of debt outstanding and that causes the debt outstanding continuing to grow. >> is that on the fed's mind? >> i think they are focused on labor and inflation. certainly they are aware of the total amount of debt that is outstanding. i don't think they will cut rates to help the treasury department to a large extent. >> what is the perception, quickly, from the debt markets? is there a point where bond vig i am vig vig vililantes. >> we think the market is essentially going to price in greater amount of treasury cheapening. when i say treasury cheapening, we look at the asset swaps and the path to the overnight rate. you are already seeing the market pricing in 30-year

treasuries that are 80 basis points cheaper than the over flight rate. that will continue to grow and that is going to continue to put upward pressure on rates over time slowly. we think in terms of what matters for rates, it's really the expected path of the fed and growth and labor market. as long as those things continue to cool, the rate fed will we mn check. >> mark, thank you very much. i appreciate it. great to see you. >> likewise. >> andrew, back to you. thanks, becky. when we come back, elmo is looking for a new home, folks. after hbo declined to renew the deal for "sesame street." not the elmos walking around times square. coming up, peter navarro will be with us.

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welcome back to "squawk box." "sesame street" looking for a new distribution partner and warner bros. decided to shift away from children's programming. partnered with hbo back in 2015 granting the service a nine-month window of exclusivity before the shows were broadcast for free on pbs.

it expanded from 35 episodes a year to 18. apple tv and netflix and amazon were mentioned to pick up the long running series. what do you think? i know you are looking for el mo outside. >> we're on the second floor. we can't see elmo. >> it is a big deal. we still have elmo in our house. >> i feel bad. i feel bad. is he okay? >> he's okay. it was a different thing. >> it is for free on pbs. >> you get it for free on pbs, but you have to pay for the episodes on hbo. i went to "sesame street" live a few weeks ago. >> i thought this would be super valuable programming because kids love it and netflix made a

business out of baby sitting children. that is part of the proposition. >> that is part of netflix and apple or amazon. maybe they have the money for this. hbo dealing with different economics at this point. >> right. >> we'll see. >> i don't know. i don't know. if you give it away for free, that is the other part. you are getting it ahead of everybody else. >> it bothered me they charged for it because this was supposed to be how you train kids in the inner city and caught up with the peers in the suburbs were able to get. >> that was the original proposition. >> we miss elmo here. >> i love "sesame street." i do. years ago, i went with my son to the studios and when i was a kid in central park, you could see them and i would love that. i love that. big bird. come on. >> we didn't have that when i was a kid. i had "gomer pyle."

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good morning. welcome back to "squawk box." we are live at the nasdaq market site in times square. look at the screen. we have a lot of red. nasdaq up 6 points. the fed beginning the two-day meeting. expected to cut rates by a quarter point. senior economics reporter steve liesman joins us with the cnbc fed survey results and what has become a little bit controversial in terms of the cut. steve, do you think there will be more dissent this time

around? when will we find out how everyone voted? >> tomorrow with the statement they put up? >> will there be dissent this time? >> what happens is sometimes someone logs their dissent and goes along with the committee. all eyes on michelle bowman on that. there may be the idea they may not be voters, but they may getting something in the statement. sometimes what the chair does in the right or committee does in the writing of the statement is i see you're concerned about this, so we'll give you something about the outlook for policy. right now, joe, the survey thinks the fed is going to cut. not everyone thinks the fed ought to cut. 93% of the respondents say the fed will cut rates.

only 63% say the fed should cut. that's our economist strategist and fund managers, 27 of them, saying they should cut. a quarter point cut. only two quarter point cuts are expected in 2025. that removes a quarter from the last survey. 3.84 is the fed rates. 81% say the fed should for now ignore fiscal policy. here's the rate outlook for from the survey. 4.62 at the end of the year is where we go after the quarter point cut to 4.37. down to 3.84. 3.48 against a neutral rate or average between 3.30. the idea is that the fed does remain restrictive over the whole time. comments by the president-elect and nominee for treasury secretary appear to have calmed concerns about whether donald trump will respect the fed's independence. 56% now say he will respect that

independence. up from 30% in november. one-third still believe he will remain unsure. asked about the impact on inflation of all president-elect's policies likely to be enacted. 11% see it as extremely inflationary. 56% say somewhat inflationary and 19% say no impact on inflation. 15% expect a deflationary effect. 48% say it will be positive for growth. economist robert frye writing in expressing the sentiment of a lot of people. i can't remember being this uncertain by the outlook. president-elect trump is offering a mix of inflationary and disinflationary policies. who knows what combination we end up with. overall, respondents see more inflation this year and next and unemployment a bit higher than

the current rate, but down from the november forecast. the comments suggest a wide band of uncertainty around that outlook at least for now, joe. >> okay. steve, i really think about what you said. i just think you're wrong. all eyes are not on michelle bowman. i would say the number of people in the country that know who that is is uscule. did. >> did i say all eyes? >> tens of dozens maximum. tens of dozen maximum are on michelle bowman for what happened. maximum. to be absolutely accurate. >> i thought you might ask me a different question and i prepared a different chart. >> go ahead. do the answer first. that's how "jeopardy!" works. you do the answer and i'll give you the question. >> steve, is this uncertainty

normal for this presidential election? joe, yes, it sort of is, but relatively elevated. what i did is i looked at the small business uncertainty index. this is a very clever index designed by bill, our friend there. what he does, joe, he totals up the toll answers that say don't to the survey. you see it was elevated in october to a very high rate with the election coming and it's come down, but it's still about the second highest in the 40-year history of this. it's about as high as it was before in the pandemic and if you go back even further, it's about the same rate as 2016 when president trump was first elected. there is a lot of uncertainty and exuberance. both of the things. your question, joe, is this

uncertainty normal? i would say a little bit abnormal for this kind of cycle. >> i tell you what strikes me, steve, was on the way up -- do you remember we were waiting for a pauses on the way up. everybody wanted a pause. everybody talking about this fed is so worried about volcker. they are so worried they will let this get out of hand and the predecessors to volcker which we say was horrible, you know, fed managers. they're so worried. it's not like that. all they think about is volcker, volcker. now it's like that's -- i think they should be thinking about what happened back then now because inflation, if it's not laid to rest, it seems to have a second life like jason. he had 14 or so.

on "friday the 13th," right? that's why people are wondering. >> i hope that is a terrible analogy, joe. comparing this to one of the most famous horror films. i hope it doesn't work out that way. another way to think about this, joe, if you guys in the back can put up the chart about the funds rate. i have another chart. put up the neutral rate debate chart. joe -- they're so good in the back there. this is the high, the average and the low estimate from the september forecast of the fed from the neutral rate. you could actually come away with the -- assume the fed does a hawkish cut today and say, you know what, we're pausing. this is sort of a kind of a hawkish place to pause if even the most hawkish member puts the neutral rate at 3.8%. if it is lower than that, the fed is pausing in a restrictive

place and going to hang out there for a little bit. yes, they are off the highs, but they are not necessarily coming down even close to what the hawkish member believes the neutral rate to be. does that make you feel better? >> it makes me feel better and i feel bad because on the way up, on the way down. now they are ing on the way down. >> the toughest job out there. >> can't win. >> yeah. i still don't understand what gets them to neutral rate and how they come up with those things. you are right, we criticize no matter what happens. we'll see. we'll continue talking about all of. this steve, thank you. when we come back, we will talk about the deal to keep the government from shutting down on friday. we will hear from jake sherman next. and later, ceo brian moynihan will be our special guest. yesterday, 15 years ago, was the day he was announced he was

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♪ welcome back to "squawk box." a bipartisan framework to fund the government to avoid the shutdown hasn't been what speaker johnson wants. the main sticking point is the awed for farmers. we have jake sherman here with us. good morning to you. you know, we always say i don't know, i don't know. do we know how the movie plays out and it goes to the 11th hour and then, and then there's a deal and that's what the movie

is or does the movie take a different twist, jake? >> the movie takes a different twist, but it is a tortured movie where you want to run out of the theater with a bag on your head. andrew, mike johnson said he was done with he christmas era big picture, big bill legsislating and we have nothing to show for it. johnson is trying to get an economic aid package for farmers and democrats don't want that. they re holding him hostage for it as republicans would do to democrats if democrats wanted and republicans didn't. listen, at the nd of the day, this shows a few things. it shows how difficult it is to change washington. the more things change, the more they stay the same. number two, we are back in this

place on march 14th with an all republican washington and with expectations ex-tremely high wih donald trump trying to pass a large and ambitious agenda and i think that's going to -- we're going to see a lot of difficulty there as well. >> okay. so, let's walk through this. what do you think this farmers issue. the true sticking point now. what gets it over the hump and talk about 2025. >> first of all, all indications, i talked to mike johnson last night before i level the capitol. he thought the bill could be filed last night. once they have a deal in place, it takes a while to turn it into legislative text and get it on the floor. all indications is we will have a bill. mike johnson better hope he has one in two hours before he goes into front of all republicans to present this bill. that's number one. number two, this is just about

ing the equities and calibrating what the republicans wants versus mike johnson. this is going to pass, with i imagine, a majority of democratic support. that's the way things go in the capitol. republicans have no ability to get things over the finish line on their own, especially in the house of representatives. this leads us to 2025. >> walk us through into 2025. this is going to be a pivotal inflection point as it relates to tax policy in america for a very long time likely. i'm just curious whether you think that the republican party is one, two, three different parts. do they stick together? do you think tax rates actually go down when people are going to argue that it's not going to generate more revenue? what do you think's going to happen here? >> this is the question in the next six months, andrew. you have to remember in 2017 when republicans passed the tax cuts that trump passed in 2017,

13 republicans voted no. 13. now they have a one-seat margin. meaning if they lose one vote, the bill does not pass. the big question is when do republicans try to get this done. do they try to get it done early in the year? if they try to get it done early in the year, that is extremely difficult. first of all, my base case is they do get a tax cut. or they do keep tax rates consistent. the same as they are now. the easiest thing for them to do is just to extends the current rates. that's not going to be enough for trump or not enough for congress. i view this as a summer/fall story rather than a winter/spring story. that is what i have covered. >> we lked about corporate rates coming down to 15%. we see a lot of businesses like to see that potentially. then there is the other question

whether you think, you know, the income rates are going to come down as well. >> i don't think the corporate rate will get to 15. i don't think the corporate rate will get to 15 when trump is also promised to cut taxes. i don't have enough time to tell you all the taxes trump has promised to cut. social security, tip wage, first responders, people living abroad. the s.a.l.t. deduction. all of these things add up to money and add up to big money. i think they will have to get to choosing very soon and the longer it takes for them to choose a path forward, the more difficult it gets as you get closer to the end of the year. i just think 15% is very low. there's a reason they went to where they went last time to 21%. that was because they couldn't get it any lower. you have a less experienced speaker and less experienced ways and means chair and less experienced congress this time around. to be honest with you, steve

mnuchin for all his flaws and he had flaws as every human being does, he handled the tax debate in 2017 expertly and did a very good job. so, i think congress is just swimming against the current here. >> what's your bet on scott bessent? >> oh, i don't know him well enough to know. easily confirmed. i think to be honest with you, this is best when it is an ill-driven process with light input from the administration. >> okay. jake sherman, great to see you. coming up, more from capitol hill. amy klobuchar and senator ted cruz will join us at 7:30 a.m. eastern with the take it down act. that is to force siaocl media companies to remove graphic deep fakes. "squawk box" is coming right back. ing!? ing!? he was actually saying goodbye to his old phone. i'm switching to the amazing new iphone 16 pro at t-mobile!

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the news alert for you this morning. pfizer issuing an update. the company is confirming guidance for 2024. looking ahead to 2025, they are expecting $61 billion to $64 billion and adjusted range to $3 a share. fios are said it achieved the goal of $4 billion of net cost savings through to 2024 and does expect $500 million through 2025. year to date, it is still down close to 9.5%. when we come back, the holiday shopping season is in full swing, but which stocks will bring happy returns to

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welcome back to "squawk box." it is 7:00 a.m. on the east coast. you're watching "squawk." i'm andrew ross sorkin with becky quick who's at the bank of america's new york's trading floor this morning as the fed kicks off its final meeting of the year, and she's got ceo brian moynihan who's going to be joining us all at 8:00 this hour. very excited about that, becky, and then we've got this. big top story. tiktok asking the supreme court to step in and block a federal law that would ban its use in

the u.s. unless its china-based parent company sells it. they're calling for the court to make a ruling before the law's january 19th deadline. the ceo of tiktok meeting with president-elect trump yesterday at mar-a-lago. cnbc has confirmed reports that netflix's co-ceo will meet with trump at mar-a-lago today. he has traditionally backed democrat party candidates making donations to support president joe biden, former president barack obama, and democratic presidential nominee, hillary clinton. and we are watching bitcoin this morning trading just below $107,000. it was over that -- before that earlier this morning. it's now 150% in the last year. all right. let's take a look at the futures this morning. you had the nasdaq closing at a new high once again yesterday, but the dow has now been down eight sessions in a row. we haven't seen that happen since 2018. this morning, the futures are in

the red, but the dow futures off by about 130 points. you've got the s&p futures down by ten, and the nasdaq is flat. let's get to dom chu. what are you seeing today, dom? >> good morning. we're going to start with broadcom and invid why. nvidia shares are dipping further into that so-called correction territory phase since the stock's post-election highs. that's a 10% drop from recent record or 52-week highs. broadcom shares about 1%, nvidia down about 1.5% right now. chip maker rally is falling on broadcom's earnings, but that stock up 160% this year. nvidia and broadcom, real monthssteres so far this year. also turning to a couple of analyst calls. goldman sachs' top picks in their respective industries for 2025.

analysts say despite the socks outperforming the markets, goldman expects a.i. infrastructure demand to continue to lift those stocks higher and higher. dell is up around 55%. arista is up, and keep an eye on the move. we'll end with a check on tesla. mizuho has outperformed from a neutral, and raising the target price all the way to $515. it's a bit of catchup trade here. they're seeing a looser regulatory environment under president-elect donald trump, and musk's alignment with trump to potentially boost robo tax evaluations and cut auto spending as well. keep more tesla shares, and for more on that and other analyst calls, head to cnbc.com/pro. subscribers get more access to detail and analysis behind all of these big calls. becky, i'll send things back down to you and the trading floor. >> all right, dom. thank you very much. we're going to check in with you in just a little bit. joe, you've got some news that you're watching this morning too. retail sales.

november is out at 8:30 a.m. eastern, expected to show an uptick from the prior month, indicating that consumer spending is up. let's bring in an analyst in consumer spending. good morning. >> good to see you. >> macro concerns yet in your universe, 65% of companies grew sales and had improved margins. >> not great. i think we think about -- and to be fair, there are macro concerns. i don't want to belittle that. we know inflation and we foe all the conversations, but for better or worse, the consumer is resilient. during covid, when every company was growing, we're seeing winners grow and gers not, and that's how it's supposed to be. >> in terms of macro, from that, you can say the consumer is still strong although there are winners and losers and divergences within retail, but the overall message is consumers

still have a lot to spend? >> i think it's an interesting juxtaposition. consumers are still spending. whether consumers are still strong, that's a different conversation, and i think that's about what we see. for better or worse, people are scared about not having something under the tree, and in a normalized environment, you have companies that are taking share of others and others that are giving it. with stimulus, everyone benefitted. >> for the actual stock prices, do you think people are paying up for the good ones and the bad ones? people are actually not even buying them. >> i think that the appetite for a turnaround right now, the appetite to take risk is very low. the way we're thinking about it is right now, you can either choose to take risk on the business, on how the company is going to do or you can choose to take risk on the multiple, what it's going to be worth. when we're looking at businesses like tjx, companies like walmart, costco, like the scarcity of quality, companies, and consumer means people are paying upward. whereas when you look at other

businesses that have turnaround, and you have inexpensive reasoning. you can find winners in both though. >> nike is a turnaround you like. >> i do. >> that's different than what you said. >> i like turnarounds. i have to acknowledge my job is to find the tjxs that are going to compound and be willing to spend up when the market is telling me to spend up, but i also should hopefully -- if i want to earn my paycheck, find things people aren't wlooking at.at -- looking at. we have been talking about under armour. >> what are they doing? >> they're going to work. >> you do? >> why now? >> it has been. when we think about the now, the last time you and i spoke, this was a company that had the same negative perception. people call it dead. we may or may not want to be wearing the product, and yet $6 billion worth of revenue. there are people buying it, and so that's what i love. there are certain companies

where really large revenues and no profits, right? in my world, not in tech, not -- this isn't some capital business. it's shirts, shoes, cloth, and if you are selling a lot and not making money, under armour is doing that. >> they haven't yet. >> the stock hasn't been working. revenue is down double digits and gross margin is up over a hundred. kevin plank that has adopted a different tone and he's achieving more by doing less. we're on the path. >> ny ike reports thursday. >> that's a similar conversation here in and they're not perceived to be dead. they're perceived to have trouble. we see people take share. the interesting thing about it is up until the last two quarters as well, actually, they have been generating more dollars. they have been selling a lot of product and what they need to do is do what under armour is doing and pull that back. our checks through november show them pulling back a lot of profit. they had to clear through that product that they had now that was the jordans and air force ones we have been seeing. they need to work their way through that, and start

rebuilding. starting december, so for the last few weeks, we have been seeing a pullback in promotions. that could be -- it's early. we find out in two days, but it could be the beginning of elliott's plan to return nike to where they were. >> simeon, thanks. do you know what a b-mo is? >> i love b-mo. >> do you know what it is? a big frisbee disk. >> as you're talking about it, i'm thinking about my firm. tell me about this one. >> the last person that was on didn't know either. google it. you can buy one if you don't know what to put -- do you have kids? >> i do have kids. >> put it under the christmas tree. it's a big disc with a whole in the center and it's made out of, like, a cloth, and it's like a frisbee only it's much bigger. >> i will bring you one next time. >> bring me one. i don't know why the firm doesn't get more involved with that as a -- sort of a marketing thing. >> i'll go speak to my marketing team and i will give you credit. >> he's into under armour and

nike and selling frisbees. coming up, when we return, more frisbees and different kinds though. this time, a preview of the fomc meeting which kicks off today. the former kansas city fed president, esther george will throw us the frisbee, and then building social media companies to remove graphic deepfakes. the coauthors of the take it down act, amy klobuchar and ted cruz from both sides of the aisle will join us here on "squawk box." do not go anywhere.

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welcome back to "squawk box." the fed's two-day meeting kicking off today with a rate cut expected. joining us right now, former kansas city fed president, esther george. esther, it's great to see you. you've probably been hopefully listening to so much of the conversation, reading so many of the various articles opining on what jay powell should do, and it appears that there's this fear now that maybe inflation has not been dealt with, and that maybe cutting rates right now is not the right move? what's your thought? >> yeah. well, good morning. i do think this is a time to be very cautious as you read the data. the committee, i think, has taken confidence in the fact that inflation has come down significantly, but of course, they're very clear about what their target is, and as we're

watching inflation data come in, we're seeing that it's not -- it's not continuing to decelerate in the same manner that it had earlier. so that, i think, is a reason to be cautious and to really think about how much of this easing of policy is required to keep the economy on track. >> so if you were in the meeting, you would say, no cut? >> i think i would be inclined to say, no cut. let's wait and see how the data comes in. again, you know, andrew, 25 basis points usually doesn't make or break where we are, but i do think it is a time to signal to markets and to the public that they have not taken their eye off the ball of inflation. >> so i think, you know, all of the sort of signaling that's gone on, even in the last couple of weeks, has been around this idea that there would be a cut, and maybe then there would be a pause. maybe even a lengthy pause. does that strategy still make sense to you or -- or -- i mean,

if that were the case, if we woke up in the morning tomorrow afternoon and we heard, okay, they're cutting 25 basis points, but then through language said, we think we're going to be paused a long time after that because we know we haven't fully dealt with inflation, and we're going to watch that, and also watch what the new incoming administration does, would that temper things? >> well, i think that will be. >> reporter: -- very important, of course. i do expect we will get a 25-basis point cut based on the communications we've heard so far, but remember at this meeting there's an important communication coming out which are the dot plots, the sum of economic rejections which will give us clues about how the committee at large is thinking about the path ahead. so i do expect that we will see in there, some adjustments in their inflation path. i think we'll see some

adjustments in the fed fund rate's path to show that it'll be a slower, more gradual downward move over the next year or so, and, you know, whether that is a pause, a skip, an extended period f leaving rates where they are, we'll watch for the communication coming out of the press conference tomorrow to get a better sense of that. >> esther, as they're putting that dot plot together, and this goes to the question of, you know, how do you predict what's going to happen under this new administration, how you think about tariffs, how you think about tax policy, how you think about all of these things that are going to converge in the year 2025 that may actually have a genuine economic impact, how the fed should or shouldn't think about that as it tries to project forward. >> yeah. so i think the way i look at this right now, andrew, is you have inflation running well above that 2% target, and it's shown to be sticky right now.

regardless of how precise one could be about potential policies coming forward in 2025, i think all of them so far suggest a caution light around this. whether it's tariffs, whether it's taxes, whether it's a fiscal policy in deficits in general, the reading i get is, if you are a risk manager at this point, if you are thinking about what lies ahead, and you've yet to achieve your 2% target, you will move carefully to make sure that you're not ceding the credibility that you want in terms of low and stable inflation. so i think it's a time to just be careful. >> esther, we got to go, but just from a credibility perspective, because they've signaled and signaled so directly that there's a cut coming, a quarter-point cut coming, does it impact the credibility question or issue if for example they were to say, you know what?

we looked at the data, and changed our minds, e're not cutting, and they followed your recommendation? >> i think they would get a reaction in the markets for sure. i don't think they like do those kinds of surprises, and so i don't think that's likely, but they would have a story to tell if that's the direction they went. >> esther george, great to see you this morning. thanks for your perspective on it. >> good to see you. thank you. >> if we don't see it before the holidays, happy holidays, thanks. >> same to you. >> becky? thanks, andrew. up next, from restaurants to rails. a number of companies in the crshosairs of activists in 2024. bank of america's global head of activism, talking about what boards are preparing for in 2025. we'll be right back.

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thanks fr taking the time to talk with us this morning. >> thanks so much for having me. >> so there's this feeling, i think, overall that basically it is game on for mergers and acquisitions again, and, you know, got lower rates that are coming in. you have a new administration that is coming in and will be much more open to deals taking place and while there's a lot of excitement for companies among that, there's more concern about what that means for the activist side of things. what do you see happening? >> we agree. i expect to see an increase in m&a, and activists that we isn't even over the last year or so. whether that means calling for strategic alternatives or outright sales of the companies or whether that's pushing for divestitures or breakups, we expect to see a significant increase in that, when the past year we saw a big increase in the number of operationally focused campaigns, so campaigns saying we think we can run the company differently and we think there's going to be a big pivot. >> what does that mean for boards? what does that mean for

companies? how are they kind of planning and prepping for that? >> i don't think it necessarily changes in terms of the way company haves to prep for activism. companies have to have a view in terms of what their value is, and i think that that's something that courts to annually anyway, so i think companies are just generally more prepared, and one of the reasons why they just have to be more prepared than ever before is that more and more of the companies we work with tend to get surprised when activists show up. it's much less likely that you have that ability if you are a company that engages before the company finds out at the same time, and we're preparing much more regularly. >> if you are running your company well, st paying attention to profit lines, margins, operations, is that enough of a safety factor? >> one of the things we talk about, is referring to them as good company. they're doing most things right in a fundamentally good financials, fundamental lip good brands, but for one reason or another, the stock is priced

cheap, and to it's a very attractive entry point for an activist to come into a company and so that's really what we're seeing more and more. it isn't necessarily companies are doing badly, are the only companies that are doing targets. there are a lot of companies doing things right, and it's primarily an easier way to make money if you are an activist. a lot of less downside risk. >> a company that's well run, and the market doesn't recognize it, kick things around, make some headlines and maybe the market starts looking at you as a more profitable place to be. >> exactly. >> so what do i do as a company to try to defend myself against that? that seems like an impossible task. >> i think one of the things we tend to spend a lot of time with, is how do you make sure you're thinking about your messaging and communicating to your shareholders well before someone tries to come in and come up with an alternative solution for the company? so how do we make sure that we think about being proactive in terms of the company's narrative? how do you make sure that if you're -- if you are going to do something that's unexpected, that you're laying the groundwork for that. so a lot of it does have to do with communication, and making

sure communicating to the different shareholders that you have, in the appropriate ways because different shareholders have a different cadence for engagement, and care about different things at a company, so making sure we're being thoughtful about, that and a lot of it is also preparing just to your point you were making before, making sure the board is ready for someone to come in and have an alternative solution. >> are activists always bad or is there a time when you should invite them into the tent and say, okay? let's talk about this, and let's give you a seat at the table. >> i would say more and more companies are very open-minded to the shareholders broadly, so whether it's an activist or anyone else, i would say that maybe the perception is that company is just automatically assumed that an idea from the outside is not something they would consider, and that's very rarely the case. in most cases, boards and management teams are very open to hearing the ideas of their shareholders and they take those ideas very seriously, and sometimes they have great ideas, and sometimes the companies decide to actually follow through with some of the suggestions that were made or sometimes it was something the

company was going to do anyway, and they do them faster or maybe they were in the process of doing that, and the activist didn't know, but sometimes it does change. other times, just fundamentally there's a disagreement on how the company should proceed. >> you think of the most recent cases, maybe elliott with honeywell trying to split things up. maybe the most acrimonious one that i can think of is disney giving the stiff arm to carl icon and what happened to those. what types of battles do you expect to see more of? which ones are pretty unique? >> i think the hardest one is when the activist is coming through, and calling for a change in management. >> we wouldn't want you out. >> that's the biggest responsibility of the board to decide who's going to lead the company, but we believe from the outside, we should be the successor. that's really hard for a board to necessary -- to go along with. those have been quite challenging, and i think it's just harder for companies to

actually view that as open-mindedly as they might when you have to deal with something else. >> you do expect increased activity in 2025? >> definitely and back to the points you were asking, right when we started this conversation, we do expect to see an increase in activity, and we expect to see that m&a theme, and we have been seeing these high-profile, large companies probably going to see activism go back down into that mid-cap range of companies who are likely to be targets and probably shift the types of companies and the industries in which we see activists targeting certain companies where they think there's more likely to be transactions, and the other question is the who? so we were talking about big name activists that everyone knows and i think we're going to see a larger variety of investors using activist themes, whether it's newer funds that are, you know, just launching as activist funds or whether it's occasional activists who are going to be using activist tactics to push for change. >> amy, thank you.

>> thank you so much. by the way, folks, coming up right here from the bank of america trading floor, we've got ceo brian moynihan who will be joining us just a little later this morning. that's coming up at the top of the 8:00 a.m. hour, joe. that sound good. coming up, powell financial advisers are positioning finance with bitcoin, and should be part of your long-term investment strategy. and then a bill to force social media companies to remove graphic defas.epke the co-authors of the take it down act, senator amy klobuchar and senator ted cruz will join us. we're coming right back. 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.

welcome back to "squawk". what are we at? $107,000? maybe a little under right now. howard financial advisers positioning their clients in crypto. should it be part of a longer term investment strategy or not? we have sharon epperson joining us with more. what do you think? >> well, i'll tell you what the financial advisers say. how about that? >> okay. >> crypto has soared since the november election. this is the coin index bade up

of mostly bitcoin. ether and solano and other cryptocurrencies. it's up 100% since the election and trades about 24 hours day. still financial advisers are wary. >> as traditional, long-term planners, we do not include crypto in our portfolios. we advise clients put that what you're not needing for retirement, what you're comfortable losing. >> many advisers are reluctant to recommend crypto. in april, 2024, when prices were half of what they are right now, an annual survey of 2,000 advisers found that more than half of advisers, 59%, said they don't use cryptocurrencies or plan to in the future. while more than a quarter said they don't use it now, but expect to in the future. about 12% of financial advisers said they use ies based on clients' requests, yet

less than 3% of advisers said they use crypto based on their own recommendation. now deciding what type of crypto to recommend may come down to this. >> it's truly depending upon what the client is looking to achieve and how easy they feel in navigating this market. they're looking for an easy solution, etfs might be the best way to go. >> experts say whether to have crypto in your portfolio depends on your risk tolerance and goals like any investment. >> so i think the question is how much cryptocurrency appropriate for someone having their portfolio on a percentage basis? >> on a percentage basis, the advisers we talk to say never more than 1% to 5%. >> right. >> really, they're encouraging their clients to understand how it works, what the risks are, and if they're not comfortable, then they're saying, maybe you don't need to have crypto in your portfolio, but that 1% to 5% is what they're suggesting and what they're suggesting to make clients more comfortable is

the etfs. many are saying bitcoin etfs are the way to go. >> thank you. before you go, because you're mr. bitcoin -- >> i am? >> you are. did you follow this quantum computer chip that google created last week and all of these questions people have? >> some comments about it. >> whether the quantum chip five years from now -- >> at least five years before it can happen. would it ever happen? >> will they be able to break the encryption of something like bitcoin and whether you could build another layer on top of it or what you would do? >> we'll work on that this weekend. >> well, someone should. someone's going to have to. >> i mean, i've got a couple of algos in mind. i'll let you know what i come up with. >> if the thing was breakable in five years -- >> it's going to be your next reason to -- >> look. i'm throwing out the risk issues and i don't know what they all are. >> honestly, i'm not -- when it comes to something like that, i told you i read, you know, i read one book about it, but that's all it took, which other people should do.

coming up, what are they -- all the bitcoins say, enjoy being poor. pushing for legislation that would require social media sites to take down explicit imagery and make publishing it a federal crime. cosponsors of the bill, senators amy klobuchar and ted cruz will be joining us next. "squawk box" will be right back. . no sweat... for you anyway. create a beautiful website in minutes with godaddy. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job on indeed, it's easier for talented candidates to find it. which makes it easier for you to hire them. visit indeed.com/hire (intercom) t minus 10... (janet) so much space! that open kitchen!s it easier for you to hire them. (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.

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welcome back to "squawk box." the bipartisan legislation take it down act would force social media companies to remove graphic deepfakes and criminalize the act itself. joining us right now is senator amy klobuchar of minnesota and senator ted cruz of texas. two folks on two sides of the aisle agreeing, something we like to see. >> really? >> so let's talk about this. let's talk about what this bill would do, but also let's talk about -- when you say we criminalize it, how would that work? >> well, it's a growing problem. we're seeing this happening all across the country. number one, nonconsensual, intimate images that are real images. a boyfriend or girlfriend are together. they take a picture or video and

they have an ugly breakup and one or the other decides to publish it to the world, which is a grotesque violation of privacy. we see that happening with increasing frequency, and there's a new problem with theed a advent of a.i. which we see targeted at teenagers. we see teenage boys frequently that are taking images of teenage girls, innocent pictures from social media, using a.i. to create a deepfake of what appears to be either a naked picture or a naked video and then distributing it to all their classmates and this is happening -- this has increased 3,000% in the last year. 95% of the victims are women or teenage girls, and so amy and i teamed up together to pass legislation to address this problem, number one, make it a criminal offense to post nonconsensual intimate images, but number two, to put a legal obligation on the tech platforms to take that garbage down when they know a victim is being victimized. right now, far too many

platforms leave the images up and won't respond to the victims when they ask to have it removed. >> senators, and i'll go to senator klobuchar. in terms of how long can it remain on the platform before they would either be fined -- i would imagine that's how you would be dealing with this. i don't know, and do you have any penalty for the folks who are making the tools to allow for the creation of such things? >> so there's time limits, but to be very clear, this is a criminal penalty, right? the people that put it up, this makes it a clear federal crime, and then also requires that these platforms, and you and i, andrew, have talked at length about the platforms before, and some of the reasons that we might want guardrails and some new obligations here with the new world we're in, to take it down. that's why it's called the take it down act. we got this through the senate -- >> yep. 100-0. >> i know you don't expect the two of us to be together on your show, but here we are. at the end of the year here,

trying to get it through the house, and as ted was saying, 1 in 12. it's 1 in 12 americans have experienced something like this, because with the advent of a.i., they're literally making up bodies on the faces of girls or faces on bodies, and they're putting this stuff out there, and it's destroying lives. the fbi director testified in front of the judiciary committee on which we serve, that 20 suicides occurred in just one year of young kids. why? the boyfriend or girlfriend puts the image up. the kid is very young. they think, my life is over, and that's it, and they kill themselves because they don't know who to turn to because they think their parents would not believe they did such a thing. these are statistics from the fbi, in just a instances of death. so you cannot imagine how big this problem is in the real world. >> senator cruz, how much pushback has there been from the big social media companies about the -- the provision to

criminalize leaving it up or not taking it down fast enough? >> well, in terms of the platform, it doesn't make it a crime for the platform itself if they're not -- >> just the individual. >> it's for the individual. what it does is we actually borrowed from a different federal law, the digital millennium copyright act. right now if you tweet out a song from "the lion king," within an hour or two, they'll pull it down because that's required by federal law. every tech platform has offices that deal with requests. you can't tweet out copyrighted material. we use the same mechanism. one of the girls is a 15-year-old girl from texas, and she came by my office. she and her mother, telling me her story about how in ninth grade when she was 14, a teenage boy took images of her, created deepfakes, and sent fake naked pictures of her that appeared real to all of her classmates, and she was horrified. she was crushed, but her mother told me how she had spent nine

months trying to get snap chat to pull the pictures down. she sent emails, made phone calls, and they just wouldn't respond. i'll tell you, i turned to my staff in the office and i said, i want you to get the ceo of snapchat on the phone right now. i want those pictures down today. they pulled them down within the hour. now frankly, it should not take a sitting senator making a phone call to get that kind of garbage down. the victim ought to have a right, and to this bill, it's bipartisan legislation to empower the victims and prevent them -- not only are they victimized when it first happens, but they're victimized every time someone else sees those images. this gives them a right to take it down. >> and sometimes years later, the image has come back. >> yes. >> right? it is to -- we have to do it right away, and that's why we called it the take it down act. >> so senators, i don't know -- you know you're agreeing on this. i don't know if you would agree on what i'm about to not suggest, but maybe ask. >> oh. >> it's an a.i. question because we have had large conversations

about whether a.i. needs to be regulated, and whether, you know, obviously there's individuals who are going to use these tools in nefarious ways, one of which may very well be this, and the question is whether the a.i. companies that are developing these tools should have any liability at all or should be prevented from allowing their tools to be used in such a way. i know that's not part of this bill, but i'm very curious about how you think about it because i know there's a lot of talk and conversation in washington about regulation as it relates to a.i. >> either of you can take it. >> a.i. needs rules and regulations. when you've got elon musk himself saying there needs to be rules of the road, maybe we should be istening, and those can break down into making sure people can own their own images and senator coons and a number of us, such as senator tillis have worked on a bill that makes

it very clear you can't steal people's images in some way. senator thune and i have a bill that sets some standards for how this is going to be regulated for nondefense uses of a.i., and then finally when it comes to democracy, i have a bill with josh hawley just to show you, these are bipartisan efforts that says you should be able to take down some of these deepfake political ads or at least have labeling on them. so there is a lot of work to be done on a.i. a bipartisan group led by senator schumer and young and thune and rounds, and heinrich have been bringing all of us together, and i hope that is really on the agenda at the beginning of the year, and senator cruz is going to be chairing commerce so we'll be in a good position to move some of this along. >> i'll say on that question, amy and i have some common ground here, but we also have some differences. i agree it's important to protect privacy, to protect children's privacy. amy and i have worked together on children's privacy legislation. that's going to be a major

priority for the senate committee on commerce, science, and transportation. i'm the incoming chairman. amy is a senior democrat on the commerce committee. we work together on a lot of matters. i do think a.i. has incredible potential impacts on productivity. i think a.i. is as transformative a technology now as the internet was three decades ago, and i think it's very important that we don't have the federal government come in with a heavy hand with a prior approval regulatory approach. i think that would effectively cede leadership of a.i. to foreign nations. i think that would be a tragic mistake, and so in my view, the right ay to approach a.i. is actually what amy and i are doing on take it down, which is focus on specific, narrow problems that need to be solved, but don't create a system -- don't create a system frankly like europe created for the development of the internet that resulted in stagnation. i'll tell you an amazing stat. 1993, bill clinton was president. he put in place an executive order with a very light touch on

the internet. it proved to be exactly the right policy. at that time, the economy of the united states and the economy of the eu were virtually identical. europe went down the road of prior government approval. today, the american economy is 50% larger than the eu, and i think the growth of tech in the united states and the shale revolution are the two main drivers of this. we can't screw up a.i. and so a real priority of the senate commerce committee is going to be to ensure that america leads the world in the development of a.i. and the jobs of productivity that come with it. >> but we only can lead the world if we have some rules in place so that we don't have rampant scams going on, and we don't have people losing their intellectual property because there aren't any protections. so we hope to find common ground on this, but we do have to put some rules into place or i'm afraid -- >> oh, this common ground stuff. i'm going to bring up some nominees. >> it would take us to heaven. okay, joe. >> what about tulsi gabbard?

i'll get this going. that was andrew all along, senator cruz with those really good questions. now if i'm going to get in, i'm talking about hegseth or something to get you guys -- to get you guys going. >> okay. amy told me she's voting for all of trump's nominee. >> stop. the last time i voted for half his nominees on the cabinet because i carefully reviewed each one and made decisions, and i just don't think you should give a president a blarng slate when it -- a blank power when, in fact, we are supposed to have advise and consent, and have an oath that we take ourselves. >> no doubt at all. >> for the constitution. >> i thought i should get on cram just camera for the holidays. everything was going so well. >> you decided to join the party. >> i did that in jest. >> we're saying merry christmas and you jumped in and said bah humbug. >> happy holidays. thank you for joining us this morning. great to see you. >> thanks. >> thank you. >> hey.

i just want to give a huge shoutout to both ted cruz and amy klobuchar for that. that bill that they're talking about, take it down, really, really important. it's about time somebody did that. hearing what ted cruz had to do to get the photos of that poor girl down, if a senator can call and have it down in an hour, if any copyright infringement can have it down in an hour, that should be the case for everybody. so power to them. i hope that works. when we come back, fedex says today is the final day to order from retailers to get christmas delivery without an additional charge. we've got the details right after the break, but yes. christmas is coming. you better watch out. and later, bank of america ceo brian moynihan, will join us from right here on the company's trading floor. we're going to talk about what to expect from the fed decision. we'll talk about where he sees the economy both from the consumer and small business and big business. talk about the markets and what to expect in 25.02 by the way, yesterday is 15 years since it was announced that brian moynihan would be heading up as ceo of this

company. we'll be right back.

nvidia shares are in correction territory after falling more than 10% from a closing high in early november. joining us now is john vin. actually, we want to take a break first. i'm reading what's here, but we're going to go to a break and then we'll be back with john vin.

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okay. now nvidia shares are in correction territory after falling more than 10% from a closing high in early november. joining us now, john vin, keybank quity research analyst. i like the way you approach this, john. it almost reminds me of a -- a ben franklin. you've got everything i could possibly use here. you've got a bold case. you give me what your bullish fiscal year, '26 earnings per share estimate is, and what a premium multiple would look like, and then you give me the reasons why, and you've also got a bear case with a lower multiple and a much lower earnings per share estimate. so nobody really knows and you've given me a lot of reasons for both. what you finally come to though, is that you're overweight with the stock of a price target of 180. let's go over some of the bull and bear case. the last -- the latest earnings were pretty solid, and so was the outlook.

>> yeah. that's correct. you know, these guys continue to put up numbers that are above expectations. you see continued upper divisions in estimates. they're on the verge of kind of ramping a new generation product called blackwell, which is going to give, you know, provide them with kind of a stuck function up left in terms of kind of the pricing that they're going to get, and also just the performance in a.i. trading for their customers. >> and you gave a lot of good reasons. going to continue to outstrip competition for gpus and a.i. if the company were able to earn $5.30, your high end estimate and you put 38 times that, you get -- you could get to $200. although you've got a $180 price already. let's talk about the bear case because no one ever really -- we don't hear that much, but if

it -- instead of $5.30, you think the downside possible earnings per share would be $3.50, and if you put 29 times on that, you're all the way down to $100. so you can get to a range of $100 to $200 on what's fair value. what goes into the bear case? >> yeah. there's a couple of things that's driving the bear case, and probably a little bit what's driving kind of the more recent pullback that you've seen in the stock, is two things, right? these guys are dominant in terms of their market share in the market. they probably have about 85%, 90% share. so if you are a customer of nvidia, you've got two alternatives right now, right? you can buy another merchant solution from, you know, probably the second biggest merchant provider of a.i. it's probably going to be indeed, or you can kind of build your own kind of like google has with its cpu.

so, you know, i think what's driving some of the recent concerns is broadcom reported last week, they've got three major customers right now that they're working with, and they build a.i. chips. right? it's google. it's bytedance from china and it's meta, and they put out a forecast of $60 billion to $90 billion in fiscal '27 which would imply that their a.i. revenues are going to quadruple in three years. so if you kind of do the math, that would imply that that is potential share loss at the expense of nvidia, right? so that would be some of the concerns that's driving kind of the pullback in nvidia that we're seeing right now. >> you've got the possibility of eventually not being, i guess, the only game in town, but when you take everything into account, you still think it's a good buy here at under $150. >> yes, absolutely. i would say, you know, a couple of things, right?

one, this is -- we're far from being a zero-sum game right now. the a.i. market is growing well north of 100%. it's probably going to grow, you know, 60% to 70% in '26. so you've multiple winners here including nvidia, marvel and broadcom are all going to benefit. with the launch of blackwell, this is a pretty big step up in performance. we think they'll maintain a dominant share of the mer chant market. on the customer side, broadcom and marvel will come in, obviously they have big customers who are investing a lot of r&d dollars into building their own ai chips. there's a little bit of uncertainty there. other than google right now and maybe aws to some extent with tritium, there's a little bit of uncertainty about whether a

hyper scaler or another ai provider can be successful building their own ai chips. >> right. so either -- you either worry about some of the seems like lesser concerns for nvidia or what seem to be pretty major concerns about doing it from scratch, i guess. thanks, john. appreciate having you on this morning. >> thanks for having me. >> okay. you're welcome. it is 8 a.m. on the east coast and you're watching "squawk box" right here on cnbc. i'm becky quick live from the bank of america trading floor in manhattan. joe kernen and andrew ross sorkin are at the nasdaq market site in times square. we're going to be speaking live with bank of america ceo brian moynihan in a few minutes. among the top stories, the fed about ready to kick off the final interest rate soeting ses year. they're expecting 1/4 point cut.

pfizer forecasting 2025 profit in line with wall street's expectations. shares of the drug maker up by just over 3% and robotaxi developer waymo says they will test the autonomous cars in tokyo earlier next year. that would be waymo's first step towards international expansion. they plan to partner with japan's highest taxi producer. andrew? last-minute shoppers, you can listen up because time is running out if you don't want additional charges. frank collins joins us. he's at a fed ex distribution center in new jersey. good morning. >> reporter: good morning. first let's start off with the overall look at the holiday season. around 106 million packages are being shipped from thanksgiving to christmas. that's a 29% daily increase year over year, daily increase. however, that's largely attributed to holiday peak being

five days shorter than 2024. >> it started on sign bother monday and each monday it has increased. we keep in constant contact with the shippers so we can understand what the volumes are going to be and we'll increase the resources on a daily basis. >> reporter: again, we're hit being some key deadlines now. according to fed ex, walmart, wayfair and the gap, today is the final day to order from them for christmas delivery without having to pay extra. amazon says it depends on the product. let me get back to those big retailers. holiday surcharges that ups and fed ex charge, a big driver of profit and margin as they charge retail customers an additional fee per package during the holiday peak. also this year we're seeing a record percentage of retailers using big delivery companies to deliver same day and next day.

jitsu and veho, the delivery company for lululemon. shipt. they're based both on delivery speed and providing retailer decisions for customer data. >> it's a shifting of markets between thinking of a pure cost center which is a pure commodity. how do i spend the least all of a sudden to how do i maximize the return on the shipping, the roi on my shipping span? >> reporter: so the increase in ecommerce overall is good for fed ex and ups on a daily basis and along with full truckload carriers and warehouse companies. they're telling me they're seeing a pull forward in freight. i'm going to get back to holiday shipping season. today is the deadline if you order from a retailer that works with fed ex for delivery without having to pay the extra fee, but fed ex, ups, amazon, they also

have options if you are willing to pay. you can still order from december 23rd. options on all of those websites. if you are a procrastinator, there is still hope. if you don't want to pay extra, today is the deadline. back over to you. >> thank you, frank. sounds like i have some work to do. joe? deadlines. someone said yesterday. >> frank just said. >> becky of course was done in september. >> you guys know nothing -- you guys know nothing, nothing, nothing. you're not the one who are buying all of the holiday gifts for everybody. >> it is a big job and the deadlines are real. it makes me angry, but i do have something really good for you guys. i don't know if it's going to get here in time. i have something really good for each of you, i just don't have it in hand yet. i'm hoping it gets here this week so i can surprise you with it. >> you said you weren't getting

me anything. >> anyway -- and then i saw something that was really awesome. it's just for you. >> oh, boy. >> it's just for you. it's special. no big pressure. it's small. >> a bemo. a frisbee. >> that's what i was thinking. >> that's a good idea. it was that -- >> personal hygiene. >> that's a good idea, too. no, i didn't get you spanx. our can't-miss interview with bank of america ceo brian moynihan. we are live from the bank's trading floor in new york city. stay tuned, you're watching "squawk box" and this is cnbc.

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welcome back to "squawk box," everybody. we are here at bank of america's new york trading floor this morning, and joining us right now is bank of america ceo brian moynihan. i want to thank you, first of all, for hosting us here today, and doing it on a day when there's a lot of market activity that's coming. i didn't realize until i got here this morning that this is

actually 15 years since last night since you were named ceo. you took over in january but you were named just last night 15 years ago. what a long, strange trip it's been, huh? >> it's been great. it's been an honor to lead them. it was 15 days ago yesterday that the board met and announced it. then i had my first town hall with everybody today 15 years ago. it's been great to see this company take its position as a leader in all its businesses with great scores from those customers, great scores from the teammates, delivering for shareholders doing what we can do to help society. it's a great company and i'm very proud of what we've accomplished. >> the stock price has more than tripled over the time that you've been here. i know this year has been a good year, too. up 34% year to date, 36% over the one year. there's been a lot of enthusiasm recently about financial stocks in general given what we're seeing with the new

administration that is poised to take over. why don't we start talking a little bit about that. i heard you say in the last week or so that you thought it was very rational to see these stock prices taking off like this. you want to explain? >> that's part of the thesis. the bank industry's valuation compared to others you spend all of the time talking about is a little lower than usual. at the end of the day, we had a swing in regulation that went too far and there's hope it will come back. the ability to merge together slowed down in the investment banking firm, we can't buy anybody because it's not legal, hasn't been for 30 years. as an investment banking firm, we like that. there's belief that the economy is going to grow. the market is up, all of the activity. i know you have jimmy demar, my teammate, on talking about what's going on in the markets. the activity in the market. enthusiasm for non-banking clients getting through and it happening. there's a lot of enthusiasm. the it would be completely

rational if the optimism came out. >> do you tie this back to the election with the regulatory oversight that's coming or changes in the regulatory oversight that's coming? >> president-elect trump ran on a position that there was too much regulation and too much had to be dealt with. obviously inflation, immigration, regulation. that, obviously, for people who have been in this industry for a long time like myself, we've got to get the thing back to the middle, and he's clear about that. i think the appointments, which is treasury secretary, haven't gotten to the bank level appointment, are clear that they're going to operate and push hard on the reg ulatory sie to get the place back in the middle. >> scott bessent is the choice for incoming treasury secretary. have you spoken to him? >> i've spoken to him. he's terrific. he'll be great for the industry. at the end of the desk, he has a big budget deficit. we have to get our eyes and

stomach aligned. we have an $8 trillion deaf sit deficit last year. we have to get that aligned. he has to be a leader to figure out the balance of the ideas to see how they all work. >> it's a tricky task, especially when you listen to everything that incoming president trump has had to say about things. on the regulatory, obviously that's going to be great for growth. big deal for a lot of businesses but there have been a lot of fears and concerns about tariffs, for example, what happens with some of those talks, what happens with trade. how do you balance it all out? i've seen what the bank has said, but what do you think? >> i think candaces team has taken the position that if you really see the regulatory relief and other activities increase the profit margins and the tariffs come through, they will eat more. so the effect of the inflationary side of the tariff will be lower because the companies will be willing to eat it because they're making more money. it's a very competitive market. you raise the price for whatever reason, even the pass for goods

prices, people feel it's well balanced. at the end of the day, i think this discussion went on during president trump's first administration, it will go on again. it's already started up in advance of even the inauguration and it's about a fairness. we buy a lot of stuff from other people. we have a largest economy in the world. buy a lot of stuff from other people. why aren't they buying our stuff? the reality is, they're trying to get balance to that. that creates jobs, more opportunities for american companies. it's hard to argue with that. the question, it has to be balanced against the impact on the inflation, impact on slowing down the economy and also what we can realistically do in this country. there are things that are made in other countries that have been made there for so many years. you have to see if you can bring them into this country. >> the bank's official policy has been that it's going to be a wash. it sounds like you are a little more positive.

>> more positive on the enthusiasm. there was always increasing gdp growth rate. for this quarter and into the early part of next year. in fact, you've gone from where if we were sitting here last year, this is 1% plus this quarter. now we're looking at 2% plus. next quarter 2% plus. that was -- only a few months ago we were 1.5%. we're increasing it. the consumer spending is solid, companies making money, companies investing. as you came through the summer, then you had to kick, well, maybe there's more ahead. so now those economic projections have gone up by a point to half a point. that's what's leading to more optimism, rather than whether tariffs will cause a little bit of inflation. if the economy is growing, everything is easier. >> you made some comments very recently, maybe in the last week at the goldman sachs conference,

you're expecting 25% rise in investment banking fees, 20% increase in wealth management fees and record trading level revenues. those numbers, how much is tied to the growth that you're talking about? how much is tied to either consumer confidence or company confidence that has built post election? >> i'd say that and continue more strongly. that's created some enthusiasm. you don't have an investment fee m&a. this quarter wasn't already signed up for the time frame. so i'd say if you look across the businesses, what they're seeing is what we're sort of pro forma conversations. people in the summer and they say, we have to take the company public, financial sponsor. we have to get the company out when the window opens, when the evaluation is right. strategic buyer would say, look at those companies. that looks interesting. it's more pro forma. the pitch is here's the ideas.

let's talk. >> is this later? >> yeah, this is later. it's get in and out. we have to try to hit the windows. we're going to try to sign the deal up. we're going to move. that's bookings for this year. what's coming of o f of this ye is the summer to the fall. >> what do you expect come january? >> expect you're seeing more deals signed up now and more deals. even in the banking field you've seen three or four deals announced recently. i think the pace of pickup. the biggest issue, you had amy on earlier, the biggest issue for board when someone's making a proposal to buy you is what's the certainty of getting it done. the price is there. it's obvious. the question is what's the duration and how destabilizing is it to the company itself prior to getting it done. if it's a year's process, it should be a three month process, that's tough. if everything gets looked at two or three extra times, not everybody has the staying power to sit on a deal for two or three years. that moves people ahead.

if you look at the markets, they rose based on all of the enthusiasm. the activity and volatility kicks up. if you look at the consumer, the consumer is more fundamental. what's happened is in the middle of the summer we were talking various things. the consumer had slowed down. i was getting concern that the fed was going to get behind and been on cutting rates. we saw the consumer enthusiasm pick up and more activity. they realized in the future the rates started coming down. that started happening september time frame. the spending picking back up and right now for the two weeks around thanksgiving it's 5% plus of all kinds of spending over last year. and that's strong er than it would have been last year or the year before. interesting more on cosmetic and clothes versus luxury goods. more on experience and travel. that means be the breadth of the economy is strong. the only segment that's still fighting to get along is because the high rate structure is the housing and housing-related

projects. >> is that the higher rate structure or the supply? >> supply of housing, even the higher rate structure, even on the home equity lines. the they're still 30% below where they were pre-pandemic. the person has the right to borrow. rates are relatively inexpensive. facilities set up if you want to put a new bathroom in. the the rates are high enough, i'll think hard about this. that will change over time because people get used to wage growth, the wage structure. we don't expect the medium term rate structure to move down. we expect it to sit around this level which is more normal. we expect the front end to come down. the consumer gets used to that and the wage growth sets up. >> if you were worried around the summertime that the fed was maybe behind the curve in terms of cutting, what do you think now? we've had a lot of people questioning whether they should be cutting rates? >> i think they've got to get -- i think our team thinks they're going to cut today. a couple of times next year. think about what they're really

saying is the end state of the fed funds rate will be in the 3 1/2 to 4% range, not the 2 1/2 to 3% range. that's base inflation still doesn't get down to sort of lower 2s. they have until '26. so that length of time they've got to stay higher. it's a real rate -- it's very restrictive on small and medium-sized businesses. that's who they were bore roying 300 bases points, sold for 50. now you went to 300 basis points to 5.5. now down to 475. that's still a lot of interest costs. they've slowed down. the activity year over year was okay. it will be a lot stronger as rates come down. the real rate structure is there. they have to come down. >> brian, 15 years ago when you came in, you inherited a bit of a mess stepping into this place. you spent the first year trying to make sure that the bank had enough capital on hand. we were talking back in 2010, just after the financial crisis

hit. part of what you did was take $5 billion in cash from warren buffett. he has a huge position in the bank. he's been the largest shareholder for quite a while, but we did see in the third quarter that he's been cutting his stake in the company. i think he sold something like 200 million shares. he's still the last we've seen in the public filings had 9.99% stake in the company. still a major holder. dune why he's selling? have you spoken with him? >> i have not. that wouldn't be right. >> i'd ask him. >> you can ask him. that's your job. at the end of the day, he made two investments in the company. he made one in 2011 and for the first time he told me the first time he's ever done it. he made another major investment in '18, '19. that's a higher basis. he sold that down. he came to us in 2011, called me up, he's reported on it. he said, i want to put 5 billion in your company. from that day it was up as much

or more than he is frankly in terms of economic value. he did it to stabilize the company. at that point we had 260,000 people, whatever it was. they all came back to work. the best investor put it behind us and it kept driving us forward. he's done very well. he's been a great shareholder. at the end of the day, he owns a lot of investment in this company and we have to keep producing for him. >> i think it's still around $35 billion of stake in this company. when you started in 2010, i think bank of america had a cost structure that was in the high 60s maybe? >> 70. >> 72 actually. >> okay. so 72. where is the cost structure today? and i'm thinking of this from the perspective of hearing what doge is planning on doing with the federal government. elon musk and vivek ramaswamy want to make sure they're more ee fish oebt and effective. you have some experience. what would you tell them?

>> we had 285,000 people. we went up to 305,000 people. now we have 213. that is all made possible by digitization, efficiency, eliminating work. when you do that, it sticks to the ribs. this year we'll end up expensing 66, $67 billion. >> which is below when you took over. >> it's below where it was in '16. nominal. >> with inflationary pressures. >> nominal. >> far more profit that you all -- >> our compensation expenses are 30% higher than pre-pandemic. >> it's the cost. >> it's all compensation. we're 60, 70% compensation. at the end of the day it's all of the talented teammates getting paid more for more activity but the way you did that is when they work. that's the key, make it to stick to the ribs. we constantly engineer the company. take 1 to 2% of the heads out and replace it with 3 to 4 spending inflationary growth.

the adjustment of the pandemic took a while to settle in. we're starting to settle in. my advice is eliminate work. there's a lot of things that are waste. if you don't eliminate the work, automate the work, digitize the work, get rid of the work because it's duplicative, it's not going to stick to the ribs. think about it, 285,000 people, 213,000 people. this company's consumer base is twice as big since then. the customer experience scores went from 60 up to the 90s. teammate scores went from the 80s up to 85, 86 of. you have happier teammates and happier customers. that's all digitization and customers' behaviors change. you have to eliminate the work, you can't just wish it away. >> there was a report in "the new york times" this past week. i want to ask you about it. they saw a congressional memo that suggested they ere looking into sars reports, two sars reports, suspicious activity

reports that the bank made for transactions from leon black to jeffrey epstein. the report suggests that those came much later. they were after jeffrey ep stein killed himself and not in the same timely manner. why did the sars reports come later? >> at the end of the day, believe me, we comply with the law and do everything. it's out there and we're examined heavily. i'm not sure all of the facts came out right. you should rest assured we have a lot of people looking at what we do all the time. >> okay. last year you came back into a position at brown university and took over as chancellor at your alma mater. people kind of speculated at the time that's a big job. there's a lot to do. what are you thinking about your job 15 years here? what are your plans? >> just to be clear, the chancellor is the chair of the board. the it's not a job. president brown has been president. it's terrific. our job is to be the chair of the board of directors. so i dropped the chairpersonship

because i had other nonprofits, ng ngos, trade groups. my job is 53 board members and i've been on the board since 2010. i owe that university a lot, that's why i'm sitting here today. my job is just to help that board govern the place. i've told the board i will stay here as long as they need me to stay here. i have great enthusiasm. it is amazing what these teammates do for the customers every day, whether they're consumers, wealthy consumers, small, medium-sized businesses, biggest trading investments in the world and trading companies in the world. you watch that going on. every day i see some of that going on, what happens, get a note from a customer. it shows you what a great company this is. so, you know, with that enthusiasm, i can go as long as they want me to go. it's up to them. >> what do you think of markets next year?

what's your he expect station i >> you've had our teammates on. we've had a big bump. 6,000 in the s&p. everybody is talking about 6800 next year. if you went back and said, what happened three months ago, they would have been a little different. i think we have to be careful about getting ahead of ourselves. earnings are growing. that's what candace reminds us. if earnings are growing, the market ought to grow. >> brian moynihan, i want to thank you for joining us and hosting us on the floor. >> happy holidays. >> thank you. happy holidays to you. "squawk box" will be right back. with the best full-service wealth management skills in the biz. tech asst: actually i'm seeing something from schwab. (uh-oh) producer : yeah, schwab lets you invest and trade on your own. and if you want they can even manage it for you. not to mention, schwab has a team of specialists for taxes, insurance, and estate planning. both producers: all with low fees. carl: we're experiencing technical difficulties... uh, carl... schwab! schwab. a modern approach to wealth management.

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welcome back to "squawk box." rick santelli live from cme hq. breaking news. november read on retail sales expected on headline to be up near half a percent. it's up more. up .7 of a percent. that's the best level, well,

just recently, since september when it was up .8. but that .8 is the high of the year. as a matter of fact, going all the way back to january of last year, 2023. now let's strip out autos and it drops, but it's still solid but it's half of expectation. so we can see how autos played a large role. drops down .2. .2. of course we look at last month, it also now is revised to .2. the prior month was up 1%. strip off autos and gas, it remains up .2. light to expectations equaling slightly revised .1 which is up .2 from last month. september was a strong month. back-to-back .2. september was up 1.2. finally, the control group, which is the core retail sales, that came in as expected, up .4. a very solid number that will

get inputted to other higher up the food chain economic data points. up .4, well, you guessed it, it's the best level since september when it was up 1.2. so there's a couple of things here. we had some positive revisions. september was a solid month. we've come off a bit, but we haven't given a lot back. the from a cumulative standpoint, these are solid numbers, but they are a bit of a disappointment to expectations. that is the main reason you're watching yields move down a bit. even with yields moving down, 10-year, basically 441. still up one basis point. 2s at 425, basically unchanged. both those maturities, well, the two-year should it close here is a little less than a 1-month high yield close. 10-year should it close will be more than a 1-month high yield close. the spread, hovering at 15 plus, is more than one-month wide. maybe the most important issue here is that we are only, get

this, we're only about 30 -- 28 to 30 basis points away from the high yield close of the year in 10s, and that's quite important to pay attention to. andrew, back to you. >> great. thank you for that. want to get over to our own steve liesman who joins us with his analysis of the numbers, sir. >> yeah. hey. what i'm looking at here is the control group, which is 0.4. rick is right to point out, that's a good number. i think rick also reported this, that the prior month, october was minus 0.1%. there's going to be a little bit of a hurricane in this number, bounce back from the hurricane, and a little bit of help from warmer weather in october and cooler weather for apparel in the month of november. looking at the details, it looks like interesting, merchandise stores were down 0.1, minus 0.6

on department stores. miscellaneous stores, internet, down 3.5%. some of that again, looks like it's bounced back from something that happened in october. the vehicle sales number obviously flattering it. i think you have a steady consumer here. i wouldn't be jumping on the headline number of 0.7% and saying this is a consumer that is accelerating here. it looks pretty much steady as you go, andrew, between what happened in october and some hurricane effects and some hurricane bounceback effects in november. we saw some of that in our data from the cnbc retail monitor. i'll leave it there. it's going to factor in. it probably will flatter the gdp numbers which are running north of 3%. that's really part of the debate, andrew. this idea that we're running above potential. that suggests underlying inflationary trend here and we'll see if that's something that affects the fed, maybe not

this time around with the cut but down the road when we think about what happens in january after we hit pause there. the. >> we appreciate it. talk to you soon. coming up, an interview with economist peter navorro newly named by president-elect donald trump to be a senior counselor for trade and manufacturing in the administration. stay tuned. "squawk box" will be right back. ♪ ♪ ♪ ♪ whether your phone's broken or old, we've got you. with verizon, anyone can trade in any phone, any condition. it's your last chance to get iphone 16 pro with apple intelligence, on us. and, ipad and apple watch series 10. all three on us. that's up to $2,000 in value. only on verizon.

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president-elect trump choosing peter navorro for a top economic position in his next administration. trump writing on truth social his mission will be to help successfully advance and communicate the trump manufacturing tariff and trade agendas. peter navorro joins us now. been a while, peter. what a long, strange trip it's been. don't know if you're a grateful dead fan, but what a long, strange trip it's been. i guess for all of us, but you in particular i would say. >> joe, it's really great to be with you. want to congratulate andrew and becky for your longevity, and i have an interesting experience here. i'm one of only three trump people who was with the boss all the way back in the 2016 campaign, through the transition, all the way till

now, and the good news for both wall street and main street is that things are progressing beautifully at the transition in a way where we're going to have peace, prosperity, security in a way where i don't think we've ever had a presidential administration achieve that. and it's partly going to be the personnel. we're getting that absolutely right this time, and it's also, of course, going to be the policy. we're hitting the ground running. i've been spending a lot of time down in palm beach at the transition, and i think laf's going to be great. >> i've seen it said that hopefully this time around maybe wall street advisers don't have quite as much influence on policy, and i think you are on the record saying that some of

the wall street, i guess, co-cabinet members or co-advisers in the last administration got in the way of some of the things that you wanted to do and had the president's ear so they didn't get done. is that fair to say? >> that's fair to say looking in the rear-view mirror, but the issue isn't wall street, it was the mindset that was brought to the white house. it was just a lot of people who were against the trump agenda. what we have now, i mean, look, if you go, for example, to the econ team, scott bessent, i mean, that guy, he's a chess player. he knows the financial markets cold. he's going to work with kevin hassett as the national economic council director. they're going to do a beautiful job. you've got howard lutnik over at commerce who's going to bring dynamic innovation to that agency. by the way, joe, small business is going to outperform everybody

in this country because of the kinds of innovations that are going to be done. and then you have the musk/ramaswamy team doing the doge and cost efficiency. for me, joe, what this all adds up to, first of all, is we're going to be able to break the back of the persistent inflation we've been experiencing, and it's going to happen first and foremost with drill, baby, drill. the team we have at energy and interior is the bergham and wright. they're going to get that right. joe, just going from an average of 75 to $80 barrel of oil, which we've been suffering through in biden land back down towards 50 where we were with trump, that diffuses through the economy in a beautiful way. we're going to deal with the cost push inflation. all of these government efficiency reforms that the batman and robin there of elon

and vivek are going to do, that's going to help break the back of inflation. and then on the demand pull side, what we have is, first of all, the green mandates. that ev mandate, that is gone. that's gone like the wind. that's going to help mute prices, the price level. then i think you're going to see in the next month or two as these negotiations over the tax cuts and budget and all of that, some significant clawbacks so we're able to reduce our deficit overhang and all the printing of the money we've been doing at the fed. i just love what's going on. we're getting that right. sergio gore, let me put in a plug for him. he was my publisher with the new maga deal with don jr. he's moved into that personnel position. personnel is policy as ragan said. they're doing great job of

vetting people, just hiring people like this. >> personnel is policy. that's what people think, that your appointment made it much more likely that tariffs aren't just a negotiating tool but they're actually a pawn and to some people that's the -- that's a horrifying thought. to others, maybe not so much. but when you talk about inflation, how do you make the case that if you are there to make sure the president follows through on some of these tariffs, how do you make the case that that's not inflationary? >> because you have the experience of the first term. joe, we put on significant tariffs on china, steel, aluminum, dishwashers, solar, a lot of increased countervailing duties to stop the dumping. we had zero inflation from any of that. inflation s both a monetary phenomenon here we run a federal reserve that prints too much money, and they do that to

accommodate fiscal irresponsibility. and if you look at how the biden inflation emerged, it's no secret, joe, how it happened. it's fiscal irresponsibility. spending too much money. and i'll tell you, they just destroyed strategic energy dominance for the united states which is sitting on the motherwe it strategic energy dominant. so i would say just go back and play all of the interviews that were done on cnbc of people back in the first term with their hair on fire warning about inflation. it never happened. and it's the same movie this time. i think what we need to focus on -- by the way, the news yesterday was interesting with son. you're going to see over a trillion dollars of investment increased in this country because of the president's tariff trade policies, america first policies. people are wanting to come here,

not just to be inside, but also because of all the good things we're doing in terms of tax relief and regulatory relief. joe, i can't stress more this regulatory relief that's come and going to come through the lutnik chain, it's going to come through the elon/ramaswamy chain. it's going to dramatically reduce the burden on corporations, small businesses. that's why i said a few minutes ago, small businesses are going to outperform -- small caps are going to outperform. they got the biggest back for the buck on reduced regulatory loads and tax loads. >> do you think that mnuchin and cohn, you're on the record saying this, it would have been a different outcome? it seems like you're talking about how great the outcome was in the first administration. at the same time saying that, you know, a lot of your efforts were blocked by individuals like

the treasury secretary and gary cohn. >> joe, it was just a matter of phasing at the time. gary cohn, steve mnuchin, they slowed down what was -- what was going to happen, but ultimately the boss did what he was going to do not because of with their help but in spite of them. the result is a beautiful thing. i mean, let's be clear, the first three years of that administration before the pandemic, that was the strongest economy we had. by the way, there's -- there's a lot of benefits for wall street in peace and prosperity, right, that's going to come with donald trump dealing with gaza, dealing with ukraine, dealing with all of the geopolitical fires around the world not letting them get out of control. >> you've heard -- i know you've heard the counter argument that both the biden administration and the trump administration spent -- and even before covid spent too much money. maybe the tax cuts probably did

spur investment, kept taxes under a new high in terms of what's clerkted, but the deficit did increase greatly under the two administrations. if we do all the things the president said he's going to do, cutting taxes, many even removing the s.a.l.t. tax, taxes on tips, taxes on social security, how do you keep the deficit under control? why don't we have a repeat of what happened in the last two dministrations which caused some of the inflation you're talking about. >> let's go back to the first term remember, we lost that fourth year in terms of -- >> even before that though. >> revenues. yeah, but my point is that we were steadily, steadily -- not slowly but steadily gathering more and more strength in the economy, and if we had had a clean fourth year without the pandemic, i think you would have seen a much different fiscal

picture at the end of the first term. the the what we're lining up now is the situation where the drill, baby, drill is going to spur growth. we're going to have tremendous cost savings within the government to pull back the fiscal overhang, and we're keenly aware of the need to engage in fiscal responsibility and improving fed policies that will help the american people afford what they need. joe, the goal of the trump administration is and always has been a strong growth rate coupled with a strong rate of growth in real wages. that's our target. what i'm saying, joe, if you just go around all of the agencies that the president is lining up, this all alliance

beautifully. you're seeing it in your confidence indicators, both in investors and consumers. you're seeing just a different attitude. and effectively, look, donald trump's president right now. i mean, joe biden's checked out. the president's down in mar-a-lago being president, and you're seeing things happen. the masa son thing, i'm seeing more than a trillion dollars coming in in investment. >> you know how everyone wants to talk about tariffs, peter. so it's good -- you know, we're going to need to come back and, you know, make the cares for them, because a lot of people are going to be very controversial and with you there, you come on in and explain the benefits. maybe you won't have someone on the other side. >> the case is they can cause inflation but they protect american ers manufacturers.

really good to seeou thank you, peter. >> all right, brother. >> be meeting you again. all right. "squawk box" will be right back. the fearless investor. the type a cpa. the boot strapper. the boot maker. hee-ha. but many do have something in common. we all trust schwab with our wealth. thanks to our award-winning service, low costs and transparent advice, every day, over a million multi-millionaires, trust schwab with more than three trillion dollars of their wealth. ♪♪

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all right. welcome back, everybody.

let's take a final look at the markets this morning. been watching the futures. you'll see right now that we are still looking at the futures, yeah, in the red at this point. dow futures indicated off by about 165 points. joining us right now is jim demar. he is bank of america's president of global markets. this is his trading floor behind us. first of all, thank you for hosting with us, having the troops in working all through the morning. >> thank you. >> let's talk about the markets and what you're seeing. >> sure. >> you all have 66.66 is your price target for the s&p 500 next year. >> yes. yes. >> so% up from where it is right now. >> yes. >> why 10% next year? what do you see happening? >> you've heard from savita and brian was mentioning it. savita is constructive on earnings growth coming in from next year. michael hartnet, he thinks we get there. savita thinks it's an end of year target. michael thinks we get there in the first quarter. as you can see, divergence of

opinions even inside the firm. >> what do you think based on all of the activity that you see behind us? >> it's been super interesting. the bump post election, which is the clearing of some uncertainty out in the marketplace. there's revived enthusiasm, i think both from investors. you've seen it and you've seen it from surveys for ceos of both large and small companies. i think that's a very good support base for a good year in 2025. you know, there's some obviously material and serious topics that people have concerns about, whether it be tariffs, taxes, immigration all having large impacts on the economy, and i think that's where, you know, you have some extreme optimism and extreme pessimism. i think for the first half of the year there's a little bit more of a lean towards optimism. >> just in terms of what to expect from the fed tomorrow, if we get our 25 basis points the

market's expecting, if the fed then slows down, how's that impacting things if we're no longer in a steep rate cutting cycle but maybe we're not raising rates? >> i think that's the base case now. i mean, i think most wall street firms have adjusted down, which is a material change from where we were. >> adjusted down the number of cuts? >> i'm he sorry, the number of cuts. depending which wall street analyst, even this time last year expect the cuts anywhere from 150 to 200 basis points over a 12 to 18-month period. i think the returns about a hard landing, i was thinking about it this morning, the discussion hard landing, soft landing, no landing doesn't seem to be as prevalent as it was just about 12 months ago. i think the fed policy, obviously it's clearly important. monetary policy has a big influence on the markets. as you've talked about on the show in the past, fiscal policy has been a push and pull for the

better of two or three years. we'll find more soon as far as how that policy will remain the same or what tweaks we will see. >> what's your biggest concern? obviously you're optimistic. the what's the biggest thing you worry about? >> i worry about a lot of things. every day i think my real job is to think about what risks then are out there. one of the more difficult things to anticipate but something we always look at in the market, you know, liquidity gaps can be very disruptive and they can also cause a great deal of disruption outside of where that liquidity gap occurred. we've seen it, you know, a year ago in the u.k., gilt market, pensions. and we've seen, you know, it snowball. we always seem to find a liquidity gap so the thing is to be prepared for it, to make sure that we're in a good position and make sure clients are anticipating it. >> good advice. jim, want to thank you again for hosting us on the trading floor. >> thanks. >> andrew, we'll send it back over to you. >> great. thank you.

>> thank you. mean time, a quick final check on the markets. looking at red on the screen. dow off 160 points. nasdaq off 43 points. s&p off about 17 points. i want to show everybody bitcoin for a second . good tuesday morning. welcome to squawk on the street. post nine of the new york stock exchange. futures are weak as the dow exchanges it's losing streak to eight straight days. ten year yield hits a one year high before backing off a bit on a slightly softer than expected core