through january 2nd. 40 million. >> 40 million? i'm happy they get paid to do that. they're not furloughed. >> i hope some of them are nice. i guess it's hard job, isn't it. >> it's a hard job. i hope we're nice. >> when we're talking to the tsa people. >> yes. thank them for their service, honestly. happy holidays. we'll see you tomorrow. ""squawk on the street"" begins right now. good monday morning. welcome to "squawk on the street." sara eisen here with tom wapner. futures, the holiday-shortened trading week. market closed wednesday, then open for a full day on thursday and friday. futures are a little under

pressure. dow futures down 200. nasdaq, down a little less, our road map begins with the market. s&p 500 coming off its best day in a month and a half but its worst week since the election. >> president-elect donald trump reacts to the attention elon musk has been receiving. >> eli lily is rising after fda approved zepbound for the treatment of sleep apnea. start with the good news or the bad news for the bulls? >> there's bad news. >> the bad news under the hood there's sign of decay. 11 of s&p sectors are under. you could argue that stocks have more catchdown to keep up with that. the good news is, we're in the back half of december and typically the second half of

december is historically very strong, it's been up 83% of time in fact in presidential election years according to bank of america, also tomorrow begins the so-called santa claus rally, the last five trading days of the year and the first two days of the new year. a very strong period on average, adding 1.3% during that period. >> i got a stat of my own. bespoke today, decidedly negative has finally turned positive. 14 consecutive days where we had more down stocks than up. but we finally reversed that. to your point about the fed and the rates we still know that cuts are coming despite the tantrum that happened on wednesday afternoon after powell spoke and goolsbee reminded us of friday. >> but he's always dovish. he'll be a voter next year, important, the message from the

market was that it was a confusing message from powell. even though it shouldn't have been. the market had priced in two cuts for next year, and this was just the fed catching up to the market. it got the rate cut. the market's tantrum on the fed is more confusing to me because it was a delayed reaction. a little counterintuitive and not supposed to happen. which signals a few things -- we've had a better economy, that's good. inflation has been a little bit sticky on the way back down. >> c.e. was good. >> it was. and core also not as high as it has been. >> i think what set the market off, too, was the realization when powell said that the fed

had upped it own inflation expectations, that kind of upset the picture, too, we've been on this belief and they've been telling us we're getting back to 2%, that we're on our way back to target but then we stalled a bit, but pce kind of reignites the conversation that we're on our way back to 2%. goolsbee underscored that, suggested that we're still a ways away from neutral. i think another thing of what the fed chair said maybe we're closer to neutral than some people would like to believe, which would obviously lead to fewer cuts and there are still some who suggest even though they say a ro jex of 2 next year, i don't know, maybe we won't get 2, we'll have to see what happens with inflation. >> there are eight meetings next year and now the fed has pencilled in two cuts, is that march, october, december? we're basically into a pause

period, a little less clear what the fed is going to do in that pause period and what the fed is going to react to as far as when it makes its move. the other thing that's happening is the outlook, a lot depends on the trump administration and what he actually carries out relative to what he's promised on tariffs and how widespread they are, whether that can be inflationary, again the pause period leads to uncertainty, the longer they're on pause the market will question, are they in a hike? worried about inflation. he said 40% odds that they hike next year. that's higher than probably most everyone on wall street and certainly consensus and that's not in the fed's funds future at all. that's what happens when they pause. they told us before they were targeting labor market, they were worried that labor market was softening too much.

now they're worried they're not making as progress. for more on the markets and all of us let's bring in david zebros. what do you think of the market's reaction from the fed, whether uncertainty is going to reign here? >> you hit on at will of the important points. uncertainty is higher, a new president coming in, lot of new policies. people are debating tariffs, deregulation, energy policies, lots of different things to put in the pot and figure out for 2025, historically this fed hasn't been, at least the powell fed hasn't been that cooperative with the trump administration and i think we saw a little bit of jitter that might be happening frequently in the beginning of 2025 and into the end of it as well where the fed and the administration may not

be on alignment path. the market got a little messy on it. i don't expect it to be like 2018, i don't think it's going to be real fight, the market doesn't like to see that and they kind of got shades on it on wednesday. i think that's the story, we'll see much more disinflationary data in 2025 and the fed will be cutting. >> david, you don't agree with apollo, among other things suggesting that the ten-year will move above 5%, that there's 40% of that happening just as he said 40% the fed is going to hike rates next year, agree, disagree if. >> i disagree. i love those numbers because you're never really wrong. if you say 30, 40, well, if it happens i called it.

i didn't say it was a likely thing. >> the idea, but the idea that you can have rates moving higher that would be uncomfortable for the market? let's start there. >> i think there's much lower probability of that, scott. never rule anything out. to me it's like a 10 delta or single-delta story. i think the real story is one that we should focus on the deregulation and smaller government, people are overfocused on tariffs, they're overfocused on immigration, they're getting very hot and bother by inflationary problems that i think really are going away. i thought jay talked in the big picture about inflation in a very positive way, they've come so far over this last 2.5 years since we peaked in the cpi. we should focus on the good news as they fought back that incredibly high shock on inflation.

>> but they haven't gone away, david. the inflation pressures, they've come down, yes, it's great progress to go 9% to above 2%. but the fed's target is 2% and we're not there. >> yeah, well, we're a lot closer than we were at 9. >> sure. >> we have had one of the fastest decision inflation in post-world war ii history. the thing that i'll always kind of push back on, we never saw long-term inflation expectations. the five year, any of the data break significantly to the upside. inflation at 9. we saw break evens at 2.5. they've been lock step for four years now if not more. the fed really i think have won that battle.

we have more work to do. we may get a shock. oil may go up, then do down, but i think the trajectory is one of disinflation, back toward 2, possibly even lower, i'm just optimistic on the deregulation story. that was the biggest part of the trump administration's moves in 2017, 2018 and 2019. it dominated the tariffs and we had very little inflation in those first three years under trump. >> if we're overbothered as you suggest on tariffs, on immigration, on inflation, then what kind of return do you think we can expect in '25 for the s&p. >> i'd be looking for something again in the 15 to 20% range, possibly, possibly a little bit higher if the rate news starts to cooperate, if the fed

cooperates with the administration and if we don't see a battle line like 2018 where we're debating neutral might have moved a little higher, i really think there's a risk, scott, that the fed is going to overstate neutral, that they've misunderstood what happened particularly with the balance sheet over the last two, three years. they're misinterpreting that stimulus from the balance sheet that's been in the markets and has been given to us as a way to have a higher neutral rate. that's basically to 2% to 2.5%. if we get there quickly this market rips. if there's a fight, then we'll have a little slower slog. bumps along the road. which is fine, we'll have to just play the bumps as they play. i think we're going to back to

2019 neutral rate. that's my call. that's a big different, unusual call from everything else out there on the street. >> david, great to kick off the week with you. thank you. >> always a pleasure, guys. when we come back, president-elect trump's message who are calling the world's wealthiest man president musk. he shot back.

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a government shutdown has been avoided but we could see more drama ahead on capitol hill. emily joins us with more. >> reporter: congress managed to avoid a shutdown. the messy process to get there shed light on some of these

must-pass bills will be for republicans xt year. the debt ceiling is currently suspended but the clock is begin ticking again on january 2nd. the true deadline is more in the summer, treasury has those extraordinary measures they can use. republicans also struck a hand shake agreement on how they're going handle the debt limit. they're going to raise it 1.5 trillion using a process that won't require any democratic votes. in addition to that they'll look to cut spending by $2.5 trillion, it's not clear how they would do that, but they'd likely to find cuts in some programs in medicare and medicaid, before any of that gets started one thing congress will have to do is elect a speaker. mike johnson currently has the backing of trump but even a few lawmakers could deny johnson the

majority he needs during the vote. one of the main concerns is the number of times that johnson has had to turn to democrats other than his own members to get must-passed bills over the finish line. >> and i think a lot of our colleagues are losing confidence. >> reporter: trump's also adding more names to his cabinet. he nominated stephen mirrian to lead his council of economic advisories and houston rockets tillman fertitta to be ambassador to italy. enlisting a bunch of other positions that will have to be confirmed by senate. confirmation hearings will begin as soon as the new year does. >> thank you very much for that. crisis averted for now.

but you know you raised some interesting issues regarding the debt limit. a guy you know very well david wrote about this morning, he called fake the debt limit, it only pretends to limit the debt. he suggested a couple of changes that should be made going forward. >> they should get rid of the debt limit. every time we get near a debt limit brink it's a fake fight. right, and it's -- they play politics with it and they shouldn't because it takes us to a serious brink. it's led to downgrade of u.s. government debt when it happened a few years ago, as far as the musk thing i don't know why people get so upset about musk. he's top adviser especially in our world, they're very happy that he's advising the president on certain decisions and also

creating this doge committee to cut. we need to focus more on that. the efficiency and the deregulations than different tariffs and or miran, an interesting appointment, he's known a little bit for this paper inside academic circles where he wrote about just in july 2024, he accused treasury secretary yellen of sort of being very strategic, being strategic about issuing certain treasury bills, going after her that she was sort of did torting the federal reserve's core role and just making it easier for the biden administration and keep borrowing costs artificially low. it's academic. . the important point is, it's pretty critical of yellen and powell to some extent during the biden administration and how

they managed debt sales. >> at the outset, he's getting the tax cuts re-upped and all of his effort is going to be certainly principal part of his effort will be shepherding that process from beginning to completion, while at the same time, as they're talking about utting more $2 trillion in spending, how do you do that? how do you keep the deficit in mind. >> keeping inflation in check and the economy growing. >> the musk thing, i'd suggest that the criticism isn't necessary from people about the quote/unquote advising, it's about the almost legislating from his seat or certainly impacting the legislative process from the laegs lay or thes themselves. that seems to draw up the criticism. >> he has a big megaphone. >> that's for sure, the biggest. a big wallet, too. coming up, apollo global

enters the s&p today. we'll look at what to expect from the group in the new year. we begin the final stretch of 2024. wel 'lopen mixed. nasdaq will get a little bit of bump. "squawk on the street" is back after this. your people are buried in busy work. and you might be thinking... can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. because when your people work better, everything works better. so, let's get to work. idris elba works here? mm-hmm. ya, he's super nice. (♪♪) (♪♪) (♪♪) everyone has goals and dreams. and everyone deserves a way to get there.

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take a look at that chart 10 year yield. year to date. sort of bottomed in september right before the fed actually started cutting interest ratings and is near the high of the year at 4.5%, a headwind for stocks? those higher interest rates despite the fed cutting. we'll talk about that with the opening bell just moments away. don't forget you can catch us any time, anywhere, listen to and follow squawk on street opening bell podcast. we'll be right back.

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welcome you back with breaking news. just moments ago, that's luigi mangione arriving in new york for his arraignment on those state charngs, one count of first degree murder, two counts on second degree murder. charged for the murder of the

unitedhealthcare ceo brian thompson back on december 4th. so mangione arriving this morning, just from a few moments ago for the official arraignment now on those state charges in new york city. he does face a max sentence of life without parole if convicted on those charge dmrs the federal charges could carry the possibility of the death penalty. maximum for state are life in prison without parole. of course manhattan d.a. alvin bragg announced this at the news conference when they announced the state charges. they added terrorism application reflecting what he said was the frightening well planned targeted murder that was intended to cause shock and attention and intimidation. >> the laws in new york state where you need extra circumstances to be charged with first degree murder. premeditation not enough even though they clearly say this or they allege that was the case.

they add the terrorism charge on top of that to get the first degree murder count as well. >> he's in manhattan after he was extradited in very dramatic fashion from pennsylvania. after he was arrested at mcdonald's five days into the search after the brutal murder of brian thompson, which prosecutors say was premeditated and that it was done by him. anyway, the opening bell. want to show you what's happening with futures at the moment. we recovered a little bit. nasdaq futures have turned positive. off of a very strong day on friday, but a weak week overall for stocks, the worst week since e early november. we had seen a bit of a divergence, scott, where the dow has underperformed, certainly the nasdaq and the s&p 500 heavily influenced by these tech stocks, also the equal weight, sort of a way to look at the

general average stock has underperformed as well, because big cap tech has been in driver's seat. >> the weakness in unitedhealthcare group has played a factor in the dow's losing streak. accounting for half of the losses on the dow during that period. >> opening bell, happening as we speak. cnbc realtime exchange here at the big board. it's ameicares, celebrate the season of giving and highlight the importance of increased health care access around the world. world. >> all right, we have apple higher. i note it because it's at an all-time high. you talked about megacap is skrout performing again. we're on that $4 there will

market cap watch for apple as well. a look at where we currently are, it has been anal world, alphabet and amazon are higher as well. nvidia the only one that's been short. uber is higher today. >> the bull on apple, a new note out this morning, where he said demand for iphone 16 since september's launch is slightly ahead, he thinks that apple will have a strong holiday season ahead as the iphone 16 upgrades are trending well into christmas based on and he does this, the recent asia supply checks. so a little bit of news there as far as dan ives. he thinks the release of the apple intelligence will bring

more engagement and more buyers. outperformed longtime bull price target. >> the stock market has been on a tear since wwdc. reports this morning they're apparently exploring face i.d. for a doorbell in a push for their smarthome exploits. >> that's what amazon does with ring, right. >> apple wants a piece of that prize, too. among the megacap stocks helping to separate the nasdaq from the pack. nasdaq up 30% year to date. all of those megacap stocks have helped tech have its leadership role that it has this year. >> it's continuing today, the s&p opens positively here, nasdaq opens .4% better than it looked this morning. what's driving it is tech, meta

and alphabet are our leaders this morning. alphabet adding another 1%. it's had a great month so far. it's really played catch-up for the year up more than 40%. meta, 70% gain on the year. it had this comeback despite concerns of antitrust, they've around new remedies on concerns around search dominance. its search engines dominance with the rise of a.i. >> the issue with the rest of the market is the move in rates from september to today. the 10 is up 80 basis points -- >> like 3.8 before the cut. >> to now, you got yields up again today. so anything that's little rate sensitive, small caps, the russell got destroyed last week on the wednesday after powell finished talking and the market

started selling. russell took it on the chin the worst, you can see the late week there move, lower there, see it right there, you have wednesday, end of powell, the big sell-off there, down about 5 .last week. which is why you know the equal weight has underperformed so dramatically to the s&p and the market cap weighted index because it's harder to think about an environment where you'll continue to broaden out if you're going to get fewer cuts and higher rate. >> reporter: the market was ignoring that, post-election, it was about a better economic outlook, by the way the data was really strong. third-quarter gdp, 3%. better than expected. consumer confidence, small business confidence has been rising. the data has looked good and even the inflationary data while a little bit stubborn, we got pc on friday that showed progress.

the market has been able to brush off the rise rates until it doesn't. same with the dollar. that cuts into earnings for companies that do business overseas which is the s&p 500, so the question is how much can the market tolerate when it comes to things like higher yields and stronger dollar both of which we have seen. you mentioned the lagging equal weight, there's another group to group about lagging is semiconductors. the index is an important group, a market leadership group, and historically it's an important leader or at least coincident group with the market, it has been lagging over the pa few weeks. >> take a look at if you want to go a step further, if you back it up six months you can start to see the two diverge and then as you get closer to, you know, now, you'll really see the divergence become more stark

where software has outperformed semiconductors although more recently because of broadcomm, the gap has closed a little bit, but to your point software semis i should say have underperformed. >> it was pointed this weekend this goes on the bear side of the ledger. semiconductors are never a lagging indicator, they're always leading or at least in line with the market, and so it spots his belief that the action in stocks could be a problem. some news you'll follow interesting. it's now official nordstrom is going to be acquired by the nordstrom family along with liverpool. something that's been longed talked about. the news is official. it's up 2% year to date, up

303%. the consumer has been resilient. >> the consumer has been resilient but department stores have not been. that's the story here. why the nordstrom have wanted to take this private. the latest bid, $4 billion, it came a few months ago, it was under the decision of the special committee. it looks like that's going happen. this is the brothers, eric, pete and jamie nordstrom being joined by this mexican retailer liverpool to acquire the rest of the outstanding stock, $24.25 a share, expected to close next year, i don't think anyone who follows retail is surprised by this. >> macy's, just to check it out, it's down 18 prkt year to date.

the way americans shopped took a dramatic turn and hasn't looked back. not to mention with the proliferation of how we buy things online. >> and how all the brands moved into direct to consumer. that's where the growth is. their own websites, their own stores, their own loyalty programs, something that nike did for instance did really early a few years ago, they in the post-pandemic cutting the relationship with wholesalers. getting people to pay more in a value-seeking environment. we should talk about the container store, which also said late last night it's filing for chapter 11 bankruptcy protection, the retail space

under pressure. container store, again, they sold the big storage. they hadorganizations. >> when you start putting kids in college it will be your thing. not like they're liquidating. i was thinking of party city around this time of year. anyway, seriously, when you start doing that in terms of the progression of your life you definitely get more acquainted with the container store, you need everything. at the dorm moving in, you need to find the nearest container store. >> mike santoli has put a kid or two into college, probably knows, he's joining us, senior market commentator from our

headquarters. you know about those plastic shelves that you have to get for your dorm rooms. >> trying to do it on two different coasts. so, yeah, no doubt about it. it's very light, light stuff that amazon can bring to you. there you go. >> what stands out to you about the market today and whether this rebound, you know, it was important to see follow-through from friday after a tough week, are you convinced. >> i don't know if you can say you're convinced in any settle way, i think friday's action was encouraging in a few ways, the market was looking pretty washed out, oversold, we respond to that with a pretty decent rally, also the time of year you think once you've cleaned up positioning you had a pretty good flush last week in a variety of stocks, you do actually have this sense out there that after the options expiration on friday that basically exposures have been

adjusted and maybe you have the room to drift higher because of the seasonal strength. as you guys have been talking about, the challenges of this particular moment have been brought to the surface and it's a matter how does an expensive market deal with this march higher in treasury yields beyond multi-month highs. usually the market's great when yields are going up and we're taking recession risks out. right now it's a little bit more ambiguous on that front the leadership areas, nvidia has been dead money for six months, no longer -- also to me the other cyclical groups that have been under pressure. keep the market on a shorter leash, most of what's going on this month i'd argue is an attitude adjustment, about 2025,

and all the targets came into the upside, a lot of speculative fraught talked about for weeks, there you see microstrategy overtaking nvidia on a one-year basis. so, obviously, some of that might have to come off the boil a little bit and then the policy kind of trade-offs i think have been a little more clear to people, i think you're coming out of the election and every investor and every fund manager decided what policy mix we were going to get and decided that was going to be the optimal one. now it's a little bit more properly unknown what the priorities are going to be. >> you mentioned the other day, mike the market's ability to work out these issues on its own. if things were too frothy even when they came down back to some level of what felt like normal

it didn't wreck the whole show, the market has been able to really from the last couple of years when the bull market started to deal with all that. >> it has. no doubt about it. it's done that by rotating toward megacap stability at times of macro uncertainty. the nasdaq 100 just grabbed the baton from the average stock out there. that can last for a while and it mitigates the equal weight pullbacks. the market cap weighted s&p merely went back to mid-october highs around election-day levels. i'd be interested to see some of the sentiment surveys as we come out of this period, some of the other market-based indicators like hedging demand and things like that. it cooled the market off a little bit in the last week or

so, you want to have a little bit of reset. if earnings expectations are correct it's hard to see the overall market getting into a tremendous amount of trouble. it's supposed to be broader earnings growth story and all the rest of it, but along the way i think we have to acknowledge that the reward to risk ratio has been really high this year for index investors and on a 2 year basis you should merely expect to have a little generous equation there in terms of risk/reward. >> mike, thank you very much. we're talking about lagging semis, they're leading today. >> broadcomm straight up. >> nvidia. qualcomm, best performers today. before we head to break, it's time for the bond report. how treasuries are faring this morning. higher yields despite the fed

cutting interest rates. we see that again today. selling bonds, yields a little bit elevated 4.54 on the 10 year. we'll be right back on "squawk on the street".

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happening now in a manhattan courtroom, luigi mangione the man accused of fatally shooting the ceo of unitedhealthcare brian thompson. pleaded not guilty this morning to murder and terrorism charges. in the state case that's running parallel to federal prosecution, 11 charges in the state case formally, multiple counts of murder, including murder as an act of terrorism. this is his court appearance in manhattan and the news, scott, is that he's pleaded not guilty. >> that video you're watching just moments ago, from the arrival which took place as he was going to be arraigned in a

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welcome back, apollo global management joining the s&p 500 today. joining us now is for more on apollo and what its inclusion on s&p is bill katz. on anticipation on this and what's going to be a better environment for dealmaking and realizations and everything seemingly that private equity wants to do. >> should be a good year in '25, lot of different drivers to the story, you have the inclusion which creates a nice -- little technical tailwind. a re-evaluation of the stock now that it's in s&p. significant growth drivers ahead of them in 2025. >> what's not in stock already. it's up 85% on the year. >> sure, the interesting thing it's only 17 times 2026 and the market is much more expensive

than that. the investors will start to look at earnings growth over the next couple of years, much faster than the s&p. the conversation starts to get to, what's the multiple? i think that's a big one. what's in front. an acceleration of opportunity to growth into the retall democratization area, they're selling it into the retail. >> alternatives that have become all the rage. >> they want to get into retirement. why buy apollo. >> they're all good. we're recommending all three of those. >> different business with the insurance inside. >> the nice thing about apollo it gives you offensive and defensively. if rates stay higher for longer apollo should well and if rates go down, apollo should do well.

>> how much of apollo is private equity, how much is private credit, how much is the insurance business. >> it's combination. the company, roughly speaking half of it comes from the insurance business and half of it comes from the asset management business. they both should grow very nicely. the biggest grow coming out of the asset management and steady growth coming out of the insurance business. >> why hold ratings -- >> valuation for us. focus on higher conviction calls, some differentiate of growth going forward and the bigger plays blackstone and kkr doing very well of gathering assets in the retail space. >> how do you assess the incredible growth of private

credit as you look at potential risks down the road for any of these businesses that are making a key part of their growth strategy. >> sure, much more difficult for the smaller players to get in, they don't have the same scale, asset quality, credit underwriting capabilities and depth and deal sourcing. as we look ahead the private market business isn't as risky as people think. it's very good due diligence here. credit quality still seems to be very good at the end of the day. >> you covered the exchanges as well. there's been a lot of momentum around these names because of the expected pickup in trading activity, we're talking about bitcoin and crypto every day, we're anticipating a robust year for the economy, et cetera, yet you have holds on both the cme and the nasdaq, why the other two as a whole if there's

optimism about most of these businesses. >> it's just relative value, relative impact of what you're talking about, for more perspective, we're taking macroeconomics into consideration. ice is a great opportunity here in terms of the derivatives. >> we'll leave it there. bill, good to see you. >> thank you for having me. we got consumer confidence data due right after a quick break. don't go anywhere. "squawk on the street".

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good monday morning, again. welcome to another hour of "squawk on the street." i'm sara eisen with scott wapner today, live at post 9 at the new york stock exchange. carl and david have the morning off. stocks are higher for the most part, at least the s&p 500 and nasdaq are.

it's been a tech outperforming day. broadcom, nvidia, tesla, meta, amd, apple is also in that group. most of the rest of the sectors right now are a little bit lower. i'm looking at staples, utilities, energy, industrials, they are all weaker this morning. that's why the s&p 500 is wavering around the flat line. treasuries have been a big story. higher treasury yields potentially standing in the way of equity gains, and they're higher again today, 455 on the ten-year, two-year, 4.3 after the hawkish cut we got from fed chair powell last week. >> outside of the markets, luigi mangione, the man accused of shooting unitedhealthcare ceo brian thompson arriving at a manhattan criminal courthouse. he pleaded not guilty to eleven charges including first-degree murder in furtherance of terrorism. we'll keep certainly our eyes on that developing story throughout this day as well. but these were pictures from within the last hour here in manhattan. >> we are 30 minutes now into the trading session. here are some big movers we are

watching. honda and nissan officially beginning merger talks to create the third largest auto maker. if the deal goes through, the merge group has the potential to deliver revenue of roughly 190 billion u.s. dollars. it's certainly been helpful to nissan shares in the past week or so. novo nordisk shares rebounding following friday's big slide, down 20%. eli lilly gets a boost after the fda approved the treatment of sleep apnea. apple hitting highs as mega cap tech continues to march higher. the stock doesn't take much but it is adding to recent gains. sales are better or in line with expectations. economic data crossing the tape. rick santelli has that for us. >> we have our december reads on consumer confidence from the conference board, expecting a

headline number around 113. comes in on the light side. 104.7, and last month, well, it upgrades from 111.7 to 112.8. 104.7 would be the lightest going back to september. that's coming off the best read. last month's read was the best going all the way back to july of '23. headlines still holding up pretty well. it was a bit of a disappointment with regard to this month. the present situation, 140.2. that follows a 141.4. these are back-to-back the best numbers we have had since february and march of the beginning of this year. and finally, if we look at expectations, what will lie ahead, that's 81.1, big miss there. the lightest level to june of this year. in addition, we see that new home sales are out close to expectations, 664,000 seasonally adjusted annualized units and

that follows a slightly revised 627,000. we see the interest rates are to the up side. 455. it equals the up 3 basis points we're seeing in a two-year, and steepening curve, we're back over 21 in twos to tens. sarah, back to you. >> thank you very much, rick santelli. not having much of an impact, the data on the treasury yield story. what's the problem? partly, the stickier inflation on the road down to the fed's 2%. we heard fed chair powell, and the market threw a tantrum, hinting at pausing the rate cuts, doing fewer rate cuts, the dot plot showed they only expect two rate cuts instead of four that they had three months ago. the problem is inflation. i decided to look. and there's so many inputs, pce was better than expected. cpi, which was a little bit sticky. decided to put that all

together. atlanta fed does a sort of inflation tracker and look at the inflation measures from the fed's preferred gauge to the core gauge to the cpi, and what it's showing you is that we're seeing a lot of -- we'll try to work on getting the chart. what it shows you is while we have made a lot of progress, certainly from where we were this time last year, and the year before that, we're still not quite at the 2% level, 2.4% is not bad. that's where we are on pce. some of the other indicators show it's a little bit firmer between 2 to 3%, and that is potentially why the fed is not feeling as confident, continuing to cut rates in the market too. >> investors aren't feeling as confident either. i know their outlier calls, but you do have some suggesting that the fed's hand is going to be forced next year, to hike, when

he was asked directly in the news conference, didn't see that as a likely outcome, anyway, with the induced uncertainty now, as well, on the introduced uncertainty over coming policy. tariffs, tax cuts, more inflation as a result of all of that. we're trying to figure that out as we make the turn to the new year. >> how about panama canal issue? president-elect trump brought it up, he wants to reassert control over the panama canal. he was confrontational about that. elicited a response from the president of panama, which had declared their sovereignty and control over the panama canal. we'll see about that says president-elect trump. basically what's happening here, and i think this comes from, i don't know for sure, president-elect is taking a lot of meetings with a lot of people in business, and in shipping,

and in these industries where they are flagging some of these issues, and there is a little bit of a chinese -- the u.s. still dominates trade in terms of the panama canal, but china is increasingly influential, here's a good chart we made to talk about this. five countries in terms of the tons of cargo that is going through the panama canal. here's china, panama denounced their relationship with taiwan recently, sort of in an allegiance to china, we have seen that across south america. i think you're getting hints of what the foreign and trade policy of president-elect trump is going to be. confrontational, focused on tariffs and trade, it's going to be economic and it's going to be done by truth social or other ways, you know, in terms of standing up for territories. he also went after greenland as well. >> i was reading. >> last time he wanted to buy it, now he wants to take it.

it's territorial in terms of the strategies. to your point, it factors in in terms o. inflation outlook and the trade outlook. if we're going to see tariffs or trade disruptions here. panama, one thing to watch. let's turn to the broader markets, our next guest says inflation is a bit stalled but points to sweeping changes to come with the new year. joining us now is dallas fed chair kaplan, great to have you, welcome in person. >> good to see you in person. >> so you have been warning about all of the fiscal spending and how that has kept inflation higher. where are we now? >> to me, the big news last week was on the fed meeting, but there was a couple other news stories that i think relate to this and what you're talking about. one, over the previous -- in the previous week and over the weekend, it was reported that a very large bond house had publicly said they are going to reduce exposure to u.s. duration because of the fiscal situation and the path to fiscal.

i think you saw a little bit of a backup. then the fed had its meeting, and what was a little concerning was the outlook by the fed participants showed that the path of inflation had stalled a little bit. in fact, maybe even deteriorated a little. and it made for an awkward press conference. if that's true, why are you cutting. the third thing that happened, in and of itself got resolved was the debt ceiling and that isn't that consequential, but it reminded people. we've got four or five big structural changes that are going to have to happen next year. some will require congress, and maybe they're not going to be as easy, maybe more challenging than people thought. i think all of those things together, you know, put a little more uncertain backdrop as we head into the new year. >> what does it mean for the fed? which now there's some uncertainty about whether they cut next year and when it happens. >> i think that's good that there's uncertainty because if i were there, i would not be willing to go any further unless

i saw below 4 1/4, 4 1/2, unless i saw demonstrable improvement in inflation. >> did they make a mistake last week? >> i said before the meeting, i would go in concerned but with an open mind. i think once i saw the dot plot, which participants didn't see until probably monday night, and you saw the inflation forecast of my colleagues was inching up, i think that would have pushed me not to want to cut. it would have made for an easier press conference for jay powell. in the long run, we won't be talking two years from now about this meeting. we're going to be talking about a whole range of other things. i think they're in decent shape. might have been easier from a risk management point of view if they had done nothing. >> you said your mind is made up at this point. you wouldn't do anything here forward, barring, yo u.n.u know change in data? >> i need to see demonstrable improvement in inflation here. we are running deficits at

historic levels. we just, as the current administration ends their time, they are pushing c.h.i.p.s money out the door, other money out the door. it's not surprising that inflation's a little bit sticky, and so, no, i want to see more evidence of improvement. >> when you say demonstrable, are you suggesting that you wouldn't cut until inflation gets to the 2% target? >> no, i just want to see progress and evidence of progress, and by the way, we may see it as we head into next year, and i'm also hopeful, if some of these big government and spending programs are stood down, if doge has an effect and makes a dent, it might actually be helpful in terms of the inflation outlook, even though there's some other things that could go the other way. >> i think like we're talking around this thing that's not being discussed. this fed, fed chair powell does not like to surprise the market, and when he goes into the meeting with 98% odds and the fed funds futures pricing in a

cut, he cuts, even if he has to talk around it and it doesn't really make sense to cut. why is the fed not able to surprise the markets anymore? >> sure. i think the fed should be willing to surprise the markets. if it did it once or twice, it might even be healthy. listen, i knew they would have a tough debate and the market probabilities didn't help. >> right. it's like they got bullied by the market into something they didn't want to do. >> not every fomc participant, you'll notice a number of them in their sep suggested pause. there was at least one dissent. i think you've got healthy debate there. i think that's a good thing. now, given where they are, they need to wait for demonstrable progress. >> what are the odds of the fed getting closer to thinking that they might have to actually hike? we were debating earlier a call at apollo, a 40% chance. >> i saw that. i don't think that's on the table at this point. and i think you got four or five

big structural changes. they're going to change this discussion. you've got -- it's a substantial regulatory review economy-wise. you're going to have a change in energy regulation and the energy ecosystem. you're going to have a stated attempt to reduce or bend the curve of government spending which would be helpful. on the other hand, we don't know what they're going to do on tariffs. i have said publicly if it's tariffs on china, but you allow a corridor in north america, and you don't put tariffs on mexico, i think we can manage this tariff situation, but we don't know what they're going to do. and then the big thing for me is you deport people and seal the border, how much do you curtail work force growth? work force growth is disinflationary. we need work force growth, and i'm going to be watching that carefully. >> here's my question on tariffs. even if we get tariffs, is it a

one-off inflationary impact or a prolonged inflationary impact? >> the theory is it's a one-time increase. again, it depends on how it's done. and my concern is there are many u.s. companies that are open to reshoring if they can use mexico for part of the reshoring. if you take that away, i worry that this adjustment will take longer and might have more lasting effects. >> i mean, we were just talking about the panama canal, which isn't necessarily going to be super disruptive, just it's an interesting example of how he's going about it, confrontational, sort of the art of the deal style, here's what we want, and here's what we're going to get. i do wonder, as far as trade relates to growth what we're going to see next year. >> and i'm wondering too, and i can guess, but i don't know. i think the hope is we'll have less government-led growth, more

organic growth, more private sector growth, incentives to reshore here, more productivity improvement from regulation, but that's the hope and we'll have to see how it plays out. >> robert kaplan, it's really great to have you at pose 9. former dallas fed president. let's turn to the broader markets, s&p coming off the worst week since november 5th. liz anne saunders, charles schwab chief investment strategist, joining us now. good to see you. welcome back. >> thanks very much. good to see you too. >> mr. kaplan was suggesting here there's going to be a level of uncertainty at a minimum related to the fed, what about the markets at large? >> what has been happening since the election and the early part of the post election period, there was a lot of enthusiasm about how strong was market was, but of course that represented a shift back up to the mega cap, and tech-related names, magnificent 7 kind of names, and throughout that process, we have

seen correction level declines, and bear market level declines f you look at the average member, maximum draw down, whether it's for the s&p, minus 11%, for the nasdaq, minus 21%, since that election period of time. at some point, that breeds opportunity, that's similar to what happened in the first half of 2024, where you had all the performance, up the cap spectrum, there's a lot more churn in weakness under the surface. that represented the setup for some of the broadening out that we started to see in that mid july to early august period of time, so i think it does represent a setup, at some point, i'm not quite sure we're there yet, though. >> the more there is this level of uncertainty, the more chance you have of the top cap stocks leading the show, again, right? i mean, you need rates to come down, and you need some degree of certainty to underscore why the broadening of the market would be likely to happen. >> yeah, i think rates coming down is an essential ingredient for a continued broadening out.

that was part of the trigger for that move, starting in mid july for equal weight outperforming cap weight, russell 2000 doing well. there is more sensitivity as you go down the cap spectrum, smaller companies that have more variable rate, and they are at the mercy of what's going on in the interest rate backdrop both on the short end and long end. given this move that we now think has cemented at least in the near term of the fed having gone from easing policy to pause mode, i think that has been one of the contributing factors to the shift back up the cap speck truck to those stocks that don't all else equal get hurt by that stickier, higher interest backdrop. i think lower rates is certainly an important support if you want to see that small cap grind higher again like we saw earlier in the year. >> so you would stay away, just to be clear, from small caps?

>> well, small caps is a pretty wide universe. if you're talking about the russell 2000, almost 2,000 names, viewing it through a monolithic lens, doesn't make a lot of sense. you can separate profitability, versus nonprofitability, zombie versus nonzombie. when moving down the cap spectrum, stay up in quality. there was a portion there of the small cap rally, where we did see the lower quality trade kick in. you saw it in the nonprofitable, you saw it in the zombies. we were saying through that process, that's what you want to fade in the small cap rally and lean into higher quality. i think there are opportunities. in fact, if you look at the top ten best performers in the nasdaq year to date, none of them are in the magnificent seven. they're all small to mid cap names. there are opportunities there, but you want to maintain that focus up the quality spectrum from the factor standpoint. >> what do you make of this notion that was put forth earlier by david zerbos of

jeffries who became the 9:00 a.m. hour with us who said there's too much being made, too much emphasis being put on tariffs and immigration, and all of these other issues that the policies that are going to be pro growth, tax cuts and everything else, are going to be -- are going to just supercede all of that. we can get a 15 to 20% return out of the s&p in 2025, possibly even hotter than that he said. what do you think? >> well, that's possible. we have to remember there's a timing mismatch because at least if we go by the word and not to mention, executive order versus congressional approval, you're talking about tariff and immigration policy being front-end loaded at the beginning of the year, and assuming not much gets done on tax policy, unless you actually get to the point of expiration of the 2017 tax cuts. that's later in the year. you can bring the deregulation piece a little bit earlier in the year. it's the timing mismatch that adds to the uncertainty

associated with tariffs and immigration because those can be done via executive order for the most part, and don't need that congressional approval. >> how do you factor in the trade agenda, which we were just talking about, on company earnings, and what's happening overall with earnings into next year. >> you have to look at which products, which goods are likely to be tariffed, how long they stick. we learned from the 2018 playbook that policy announcements often come via social media posts and you, at least, based on 2018's playbook, you had significant hits, at least in the immediate after math of announcements in terms of, okay, what products are being targeted, what is the -- what is the level of the tariff or tax on the u.s. companies importing those products. you could break it into inflation categories, if you look at tariffed goods versus non-tariffed goods, you look at a huge k shape.

with much higher, price level adjustment or inflation. it was a valuable conversation you had with robert kaplan on the price adjustment. that said, you saw a huge differential, and it in turn led to demand changes and the goal to have supply changes but those are longer term in nature. i think given that we're talking about broader scope, higher amount in tariffs this time, not just in intermediate goods, which is where the concentration was in 2018, but more into that sort of final consumer good, i think it could have implications for individual companies, those that trade in those goods are likely to be impacted. >> liz anne, good to see you. we'll talk to you soon. >> thank you. here's our road map for the rest of the hour. qualcomm and arm holdings moving in opposite directions following a big court ruling.

we'll share the details. a look at geopolitical risks and their potential impacts on the market in 2025. the ai holiday impact, how shoppers and retailers are both using ai to choose the right gifts. "squawk on the street" will be back with the dow down 241, the s&p 500 in negative territory and the nasdaq still holding firm. (vo) memory and thinking issues keep piling up? it may seem like normal aging but could be due to a buildup of amyloid plaques in the brain. the sooner you talk to your doctor, the more options you may have. learn more at amyloid.com.

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a federal jury ruling in favor of qualcomm over arm holdings in a chip licensing dispute, seema mody has more. >> whether qualcomm breached its licensing agreement with arm holdings, ended friday with an eight-person jury, two of the three points of concern, qualcomm was in the right. it was a week of intense testimony and exchanges involving both semiconductor company ceos, seen as a win for qualcomm and supportive of its acquisition of nuvia. technology analyst, in the courtroom, saying it would have been detrimental if it resulted in a pause in the key license. qualcomm is one of arm's biggest customers, and nearly all of qualcomm's chips use arm's technology: arm holdings in a statement saying it was quote, disappointed and will seek a mistrial. experts say a future trial could

be on the table, but we're unclear on whether it would lead to a different outcome. what it does suggest to wall street analysts is the prospect of paying arm higher royalties is off the table. you're seeing shares get relief with the stock up 1.7%. arm holdings, as you see, down 5%. scott and sarah. >> seema mody, thank you. our next guest has nvidia has one of the top picks, saying the ai cycle has legs. cantor fitzgerald analyst s us now. you have a buy rating, welcome. let me get reaction to the news related to qualcomm since you cover it, and you only have a hold rating on it. how meaningful is this? >> well, you know, i would say that, you know, obviously arm is trying to juice up the royalties stream, and you know, i think that on the other hand, qualcomm, you know, has been very successful in court over i

think the last four or five rulings. whether apple or everyone else, so i think, you know, it substantiates nuvia, it substantiates their track record on the legal front. but, you know, at the same time, it doesn't change, you know, the challenge for them, which is that the most heavily levered is smartphones and at the diversification strategy is going to take some time. clearly on the margin, a positive for them. >> is this still, as we take it towards nvidia, is it nvidia's world and everybody else is living in it, is that the way it's going to be for the foreseeable future? >> when broadcom reported, outlined division for custom silicon, that was a changed statement in the market, appreciating how the world is led by and dominated by nvidia, but that there's also a rising tide here for custom silicon that will help the likes of

broadcom and marvel as they support, in broadcom's case, google, meta, tiktok, and in marvell's case, amazon and microsoft. there's different spots for the different areas of kind of silicon. at a very high level, as you think about nvidia going into their best product cycle in the history of the company with blackwell, you know, it's hard to not, you know, think of them as the top outperformer for all of semis in 2025. >> but how do we know how long the cycle is, and how many quarters we could see growth like this? how does it compare to other previous semiconductor cycles? >> well, this cycle is unlike any other. you know, i think most investors look back to the advent of the internet and how long, kind of the internet infrastructure investment cycle played out.

but this one's very different, right, where the companies that are making the investments predominantly, the hyper scalers, they're generating meaningful free cash flow, despite, you know, spending hundreds of billions of dollars, building out ai. and let's be clear, this is existential for these companies as they all try to get to agi, and so i think this is a multiyear investment cycle and on friday, open ai released '03, and this model is incredibly important in the sense of the improvements that they're making, the reasoning that they're using. so it's post training reasoning where the more compute you apply to the large language model, the better the outcome, and really, the big take away is that it's driving even incrementally more compute requirements to get to agi. the short answer, you know, i think investors are going to be

surprised by the magnitude and duration of the investment in ai, and i absolutely believe that, you know, if there is a pause for nvidia, the first we would see it would be 2027, and if i'm right with that assumption, then there's clear line of sight for growth for the top ai accelerator companies, so nvidia, you know, broadcom, marvel, i would say the key arms dealers underneath that, you know, whether it's dsmc or arm or, you know, semiequipment players or test companies like teradime, i think this investment ai cycle really has lighted. >> thank you, c.j., we'll talk to you soon. >> great, thanks for having me. you can catch the 10:00 a.m. hour of "squawk on the street" anytime, anywhere, listen to and follow the "squawk on the street" podcast available on spotify, apple music, and more. a bk jt montwereacinusa me.

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overtime is about understanding what happened in the markets that day, and preparing for tomorrow.

we continue to stay on top of developments surrounding luigi mangione, the suspect in the shooting death of unitedhealthcare ceo brian thompson. he has pled not guilty to state murder and other charges this morning. here's what mangione's attorney had to say just moments ago. >> he's a young man and he is being treated like a human ping-pong ball between two warring jurisdictions here, the federal and state prosecutors are coordinating with one another but at the expense of him. they have conflicting theories in their indictments and they are literally treating him like he is -- like some sort of political fodder, like some sort of spectacle. >> he's appearing there in manhattan court for arraignment on the state charges, and that's the first we have heard of the lawyer, his lawyer, scott, and you can hear some of the argument and the pushback, again, the dueling federal

charges and state charges that mangione is facing. silvana henao has more news this morning with our update. hi, silvana. >> hey, scott, good morning to you. president biden announced today, he is commuting the sentences of 37 out of 40 inmates on federal death row. they will now face life imprisonment without patrol, and the three people still facing execution, which includings the man who killed nine members of a black church in south carolina in 2015. the boston marathon bomber and the man who killed eleven congregants at a pittsburgh synagogue in 2018. police are trying to identify the sleeping woman killed after she was set on fire in a new york city subway sunday. authorities tracked down a person of interest within hours of the gruesome crime. the suspect was arrested at another subway station with a lighter in his pocket. officials are investigating what caused a colorado ski lift to crack over the weekend forcing the evacuation of 174

stranded skiers and snowboarder. the gondola at winter park resort automatically stopped working when it detected the crack in a structural part of the lift. now, no injuries were reported during the rescues, which took about five hours. i'll send it back to you. >> nightmare. thank you very much. stocks are trying to rebound. lost a little steam here this morning, following the worst week for the dow and the s&p. that was last week, since early november. our bob pisani looking at today's big movers. what are you watching? >> the important thing is where is the santa claus rally. we're waiting. we're supposed to start tomorrow. nothing going on here. we have a brief rally friday, and now back to the down trend that we have today here. all the other sectors are lagging again here. this has been the trend here. if you take a look for the month, mega cap tech has been holding up. all other sectors are remaining weak. december has been a particularly

poor, all sectors, sub sectors, really. interest rate sensitive stocks. real estate and youth, consumer staples and health care have been weak. even cyclical sectors like industrials and materials, near a 52-week low. the story in big cap tech is, of course, broadcom replacing nvidia as the new darling. that's the big broad story, up 40%. this month, nvidia is down 1%. that is something to see. as far as what's going on right now, the last time we had a big mid-december decline, remember this, 2018, there were very similar concerns about inflation at this time. in december of that year, the fed implemented its fourth and final rate hike of the year. that was 2018. that was the first increase since 2008, the s&p went from 2650 december 13th that year to 23.51 on december 4th. that was a drop of 10%. we haven't seen that in years in december. the fed was trying to prevent

excessive inflation then, just as they were earlier this year. this time around, the fed is cutting rates. it's not raising them, yet the market has seen the return of bond vigilantes who are worried about persistent inflation, debt refinancing costs and the impact of the potential trump tariffs and tax cuts. so the question is, is it going to be a santa claus rally, where is this thing? it's the tendency of stocks to rise the last five days of the year. still plenty of tail winds to support stocks going into the year. however, we've got a strong economy, we've got a fed easing, hopes for deregulation and tax relief under the trump administration. i think the problem i've got with the santa claus rally is it happens because the end o.f the year is quiet most years. it's boring the last two years, this is the opposite of boring. this is why i don't have a lot of confidence. when you've got these concerns about inflation and the incoming trump administration, and what effect that's going to have, it's hard to argue, oh, it's going to be 1.3% rise in the

last five days, that's the santa claus rally, i think things are very different this year. a lot like it was in 2018. and that's why i think you should be a little bit more careful, about, oh, there's going to be a rally. >> backup in rates has obviously played a role. there's the argument, as we heard almost two years ago, the good still outweighs the bad of policy that's coming from the next administration, and that's why people are still overwhelmingly bullish, despite the activity over the last week or so. >> and there's good reason to still be bullish. i listened to a few of them. the economy is strong. a 3% gdp, and if you look at the earnings estimates, it's remarkable how consistent they have been this year. we started off the year, earnings up 11% in the s&p 500, it almost never wavered throughout the year. we're ending the year, earnings up 10%. that is remarkably close to an initial estimate. you get a much wider movement throughout the year. 2025 estimates up 15%. it's been that way for six, seven, eight months, still up

15%. when you get that kind of steadiness in the earnings picture, that provides a lot of support underneath the market. and i think to me, that's the most important thing. corporate america profits are still great. companies are learning to use technology very efficiently. the ai story is still very real. >> i think the stock market has to decide whether the backup in rates is happening for the right reasons, that's from the bachelor. you're there for the right reasons. because of the stronger economy, and maybe that means it's a little bit harder to fight inflation. we have still made so much progress. so the fed can take it easy. that's a good thing. the market has rallied through the march higher in treasury yields. now it's like a big problem. >> what's a little disturbing to ne, me is we're not getting the broadening out of the rally. the advanced decline line moves up. that's a strength in the overall market. that's not just a bunch of big cap tech. we have reversed that this december. >> we have 14 days where breath

was negative. we just literally reversed that on friday. >> the equal weight is down 6, 6 1/4%. s&p down 2%. the average stock has been down dramatically, that's another way of saying the advanced decline line has been crummy. the rsp is 4 percentage points below the s&p 500, the equal weight. if the economy is really that strong, then why wouldn't we get a broadening out of the rally. you get people arguing, there may be weakness. most important story of december, return of the bond vigilantes. they seem to be back in the market in a big way. that's what people are talking about. when i talk to stock traders, they talk about what the bond people are saying. that's a sure sign. >> they have been powerful, making the fed come to it, the bond market. >> that's bob pisani. still to come, what a second trump term might mean for the global markets in '25 as president-elect trump threatens if ain t rfsgasthe biggest trading partners. we'll discuss just after the break.

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the dow and the s&p pacing for their worst month now since april. our next guest says the markets are vulnerable to economic and geopolitical uncertainties as we end 2024. we are joined now by charles delaura, partner group advisory partner, and charles, it's great to have you. welcome back. what happened to all the euphoria over deregulation and lower taxes and better economic prospects and a pro-growth administration. why now all the uncertainty? >> good question, sara. first, let me wish you and scott a happy holidays, despite the market anxieties. i think what's happened in the market recently is simply an acknowledgment that the uncertainty surrounding the potential adverse consequences of tariffs has crept into fed thinking and fed outlook for 2025. and that's against the backdrop,

and it's important to underscore, it's against the backdrop of a very sticky inflation rate, hovering around 3%, depending on whether you look at the core or the cpi, and that's not a comfortable level at all for the fed as we enter 2025. will the fed tariffs exacerbate that? we don't know because we don't know exactly what is intended. is this an opening salvo leading quickly to negotiations or is it going to be a persistent feature in 2025 that complicates the inflation effort? i think we also have to realize that the word of the day seems to be uncertainty, but i think that in my 48-year history of global finance, i don't think i've seen so many layers of uncertainty, sara, and that's what's hovering over the market, the near term uncertainties regarding interest rates and inflation, the near term uncertainties regarding ukraine and whether or not the

government in syria, stabilizing or destabilizing. medium uncertainty is regarding the u.s. fiscal position. we've got other issues, i think, hovering over markets, which i think are not going to be resolved anytime soon. >> how are you gaming out, charles, what the next year, let's say, is going to look like as the trump administration takes office once again? i mean, we know from prior history, and even through some of the rhetoric already regarding whether it's panama or greenland, he can be a little rough on the furniture, but at the end of the day, he can also be successful in negotiating what he wants for the betterment of the united states. so how are we supposed to game all of that out, and think about market outcomes, given what we know relative to what obviously is still a little uncertain? >> well, that's a very good question, scott, and i think fortunately some of these uncertainties will be addressed and reduced in my view within

the first month or two of the administration. i think we're going to see whether or not these tariff proposals are the initiation of a lengthy, difficult period of a trade war. given the interrelationships that have increased significantly since president-elect trump was in office a few years ago, i think that we will know quite soon whether or not we're in a trade war because it's not at all clear that china, canada or mexico will sit by idly here in the face of these tariff statements. on the other hand, you're right, trump in his prior term and even in recent statements indicates he's willing to negotiate. i think one potentially optimistic threat i do see on the horizon is not economic per se, but it could reduce uncertainty, and that is the potential understanding over

ukraine, which involves a cease fire and armistice, if you will, and security protection toward ukraine. i think that would add an element of confidence into the markets that is lacking there now. but i think fundamental question, really, is whether or not the fed is going to have sufficient comfort to resume rate cuts or whether or not we indeed are looking at a possibility of however remote it may seem or may have seemed a month ago that we may see rate rises in 2025. after all of this bond market reaction increasing, what, 30 points since the election, is nothing to be sneezed at, and i think that robert kaplan made an important point. creeping into that is not just the near term uncertainty, it's the medium term uncertainty whether or not the government can cope with the rising fiscal imbalances that we have. this past week's performance by congress was frankly symbolic, and i think it underscores the

uncertainties as to whether or not congress and the administration are capable of wrestling these physical problems to the ground over the years. >> charles, i don't know if a lot of people remember. i feel like you rose to fame during the greek debt crisis. remember, negotiating the greek debt, on behalf of the bondholders, and we were talking to you all the time, and you had a really good front row seat to all of that chaos. i wanted to ask you about europe right now, and the risks and whether investors are appreciating some of the risks that are happening now in the political landscape, and economic of europe, i mean, france still doesn't have a government, as far as i can tell. they're trying with the new prime minister. there are issues in germany, in the uk, across europe at a time where they're not growing, not nearly as fast as the united states, how do you think that plays out next year? >> europe is in a extraordinarily difficult position right now, and i think

you put your finger on the fact that we see this confluence of political difficulty and economic difficulty. the economy is very weak, but the prospect of very little growth in 2025, and then you have the two largest economies in europe swirling in the midst of tremendous political uncertainty. behind all of that, you have a structurally weak economy, where little progress has been made since that greek debt crisis. and integrating the european economies, there's lots of talk and great ideas put out there, being put out by mario droggi, and the president of the ecb. i think the reality is there's little movement in the direction of integration, particularly with populist governments on the scene: i do think as some of your prior speakers have pointed out we hopefully will see a wave of deregulation in the u.s. economy, which is needed under the trump administration. are we going to see something like that in europe? i sorely doubt it.

i think we're in for a difficult time, and that's exacerbated by the fact that italian deaf silts are seriously problematic. i would underscore the problem of the french deficit right now. this will require close monitoring, and the markets aren't adequately attuned to this. markets seem to kind of let these issues go until they suddenly wake up one day, and realize, oh, we've got a debt crisis. >> i'm glad you highlighted it. that's sort of what i was getting at. they don't really do deregulation in europe, do they, charles, thank you for joining us, charles dallara. >> have great holidays. bye bye. >> thank you so much. we're getting news out of d.c. let's get to emily wilkins with more. >> the house ethics has found that matt gaetz did use illegal drugs as well as paid women to have sex with them. the report says that he paid over tens of thousands of dollars over the course of several years, and the report

says that at least one of those women was 17 and therefore under age, and matt gaetz potentially violated some of the te of florida's statutory rape laws. this all comes now that gaetz has left congress. he was quickly in line to be trump's attorney general. these reports and allegations quickly derailed that. >> thank you. that is emily wilkins. we're going to take a quick break, attack a look at stocks real quick as well, as we are into the rladeay tre, dow and s&p are negative, nasdaq is a smidge positive. we're back after this.

this holiday season, a record number of shoppers and retailers are enlisting ai to help find the right gifts. our julia boorstin joins us now looking at holiday shopping getting an ai boost, julia. >> that's right. ai is playing a key role in holiday shopping this year, a recent survey finds 62% of consumers say they plan to use ai for gift recommendations while three in five retailers say they have deployed ai chat bots to help the customer experience. sierra ai is one startup helping retailers ranging from sonus to

shoes, to create custom ai tools trained on each company's data. they are able to answer questions and assist with the purchase. the agent it created for hawaiian brand uses relax tone to reflect the brand, even can answer questions about visiting the hawaiian islands. sierra cofounder, clay baver tells us during the holiday shopping season many of their retail customers did not need to hire more support staffers because sierra's ai agent could pick up the slack. >> we can help companies in particular surge in scale around holiday times where one of the challenges is how do you meet peak demand without having call times go up and so on. so there are meaningful operational services there. >> there are a range of customers helping customers who have not landed on a brand's page. jeff bezos launched an ai shopping tool which includes the

ability to search for products based ond photos, compare products products and complete a sale on the platform. and giving shoppers personalized results and find the best prices, amazon says customers have asked the are rufus ai too billion questions. just like they're asking a question to a human, but without the human, and without the wait. >> julia, thank you. i just asked chatgpt what should get scott wapner for the holidays. >> anything good? >> books on investing or finance, luxury desk accessory, or personalized cufflings. >> you can go with three. the other two, come on. >> i'll see what the committee th be.s are going touy m ey're going to bring you a big trade. i'm telling you that, a big trade. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star.

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♪ good monday morning again. welcome to "money movers." i'm sara eisen with frank holland today. welcome. live from post nine of the new york stock exchange. has the markets post fed fear slipped away? can investors trust the bounce