december 27th, 2024. we will have the latest on "squawk box" right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm andrew ross sorkin with melissa lee. day two. very nice to see you. joe and becky are off today. we have a bunch of things going on. u.s. equity futures. still in the red. another 135 points. looking like we open down on the dow. nasdaq down 83 points. the s&p 500 to open down about 22 points. yesterday, the dow eeked out a narrow gain. the dow now on track for a gain of more than 1%. the s&p up 1.8% and the nasdaq up 1.3%.

the santa claus rally continuing to some degree. take a look at treasuries. the two-year note and ten-year note at 4.609. i don't know if it is our favorite gauge. i like to look at it because it gives me a sense -- >> risk appetite. >> -- the animal spirit situation. that's what i think it is. michael saylor might disagree. $96,415 a coin this morning. the south korea leadership crisis. voting to impeach han duck-soo. it is raising questions of who is in charge of the government. constitutional court will decide to remove his predecessor. the south korean yuan plunged

against the dollar. the kospi is on the biggest losing streak since 2008. new data in china overnight. industrial profits declined dropping 7.3% in november. the drop in profits was less than declines in the previous month. meantime, in a post, by the way, a lot happened on x in the past 24 hours. we will talk about the free speech thing. we'll do there in a moment. there's this. vivek ramaswamy criticizing the culture of mediocrity. leading the department of government sish as efficiency. in the post, america has celebrated mediocrity since the 1990s. he writes the culture that celebrates the prom queen over the math champ or jock will not

produce the best engineers. he calls for american culture to fully wake up. i'm not sure this was the 1990s. at least when i grow up, before that, the jock was always given the credit. >> for decades. >> the valedictorian was considered the nerd. that was going on. it would be great to celebrate more. i have gone for years to the celebration of scientists where they really try to glamourize it up like the oscars. it is put on by mark zuckerberg and folks in silicon valley. there is not enough of that where we celebrate the greats. we do celebrate the greats in the context of elon musk. >> elon musk, jeff bezos, mark zuckerberg. look who is controlling the emerging industry. >> it is very interesting.

they become -- here we are on a business network celebrating them. we do genuinely celebrate their accomplishments. there is also this thing in the united states where people say it's a plutocrasy and autoocrasy. we haven't done that for athletes. the great jock, i don't think people say michael jordan. they say wow, he's the g.o.a.t. across the board. it ising question. >> here he is saying the jock and the prom queen which doesn't necessarily mean they have those great talents that are rare to find. we say michael jordan, he is the g.o.a.t. not many team dispute that. it is the celebrating true talent as perceived alent.

>> underneath those posts is a nuance and complicated topic around immigration. if you really understand where this post and what this post is saying, it's about we need really tall p ented immigrants. there's a debate and backlash against sri put on this a.i. committee who is indian, but american citizen. a backlash against him where people are saying, we didn't vote for this. i mean, it's very interesting the sort of icated nature and the question of who will do jobs that sometimes and this goes to the american culture thing that americans don't want to do. there's a conversation going on about coders. do americans think -- i would have thought coding would be a great job. >> maybe it is displaced by a.i. at this point. >> yes. that's the flip side of people saying we don't want folks who

are going to pick strawies on the farm. >> bus the dishes at the restaurant. >> somehow, americans don't want to do that. i think we need to get this in order. the conversation has gone -- >> it underscores the need for immigration to allow talents because we are not cultivating those talents ourselves. >> i don't know if i'm saying that -- i don't know i'm saying that. i think that's being said here. elon musk was making that point yesterday. this goes to the hb-1 visas. bring in the top talent. think about the united states as a great basketball team. the nba happens in addition to the fabulous players including lebron james and michael jordan and al those players, have brought in talent from around the world. >> there's no backlash against that. >> exactly. the nfl on netflix on

christmas day set the biggest audience for the match up. the ratings fell short of the christmas games on broadcast networks. netflix averaged 24.2 million viewers. it peaked at 27 million viewers at halftime performance at the ravens-texans games. the viewership jumped collectively. the games averaged 5.52 million viewers on espn. sad news to tell you about this morning. a long-time friend of the show and somebody i have known since i was a child, if it you can believe this. richard parsons has died. he led the turn around of so many different companies across this country. time warner after the merger with aol. served as chairman of citigroup in 2009. he stabilized that bank after the financial crisis. in 2019, he was named the

interim ceo after donald sterling was banned for life. he stepped down after a month at cbs citing his health concerns. he has been battling multiple myeloma. the cause of death was cancer. i just e-mailed with him a couple of weeks ago. he was off to hospice. you know, started his career with rockefeller and became ceo of dime bank. he was considered a fixer upper. he would walk in a place and through force of personality and sheer will and spirit of good faith more than anything, he was able to take a situation that was impossible and work with

complicated people, i think of carl icahn. he found a way toward peace. that's who he was. he was a very, very special man. dick parsons was 76 years old. ok guys, instead of getting weathertech, i saved a few bucks and got some cheap, foreign made floor mats. but they really stink, so put these on. ♪♪ really, gary? mom, i'm thirsty. don't settle for cheap, stinky floor mats. at weathertech we make our floorliners and cargo liners here in america, out of pure non-toxic american materials. dad, next time get weathertech. they don't stink! i'm on it. find out everything we have at wt.com.

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stock futures right now

pointing to a lower open. joining us on what to watch is jay woods. >> great to be here. >> you think we are at the beginning of a 10% correction? >> i do. i'm unfortunately calling for something like that. we had a tremendous run. 10% corrections do happen on average every 18 months. what we are seeing is horrible market breadth. great leadership with the mag seven names. the divergence is too much for me. once we get to the new quarter, we will get new headwinds to deal with and the mag seven names will give back. i don't think the rotation will be enough to keep us from having a correction from the 200-moving day average. when you live through it, it's not going to be fun. the setup right now and the uncertainty coming in with the new administration, tariffs, possible unemployment ticking up with the elon musk and vivek

ramaswamy's deal, doge, that was the name i wouldn't think of. there are a lot of questions coming into this. tariffs are going to hurt the bottom line. that could lead to trepidation and we get a normal correction. i don't think it's that big of a call given what we've done the last two years. >> under the macro back drop, does the mag seven look defensive and the mag seven could hold up to the other part of the market? the divergence you cited has existed for the entire length of 2024 so far. why at this point is it troubling and why wouldn't the mag seven be defensive? >> it was the story of 2023 and took off in 2024. we saw every sector lead. materials led. materials is awful right now. right now, the leadership is starting to wane a little bit. i think a pullback could be great buying opportunities. you look at app, all-le, all-ti

highs. google. right now, it is a situation where we're tired. we saw in the beginning of the third quarter in july where they stopped going up. nvidia struggled to get back to the highs. tesla stalled for a long time. tesla is different. it's its own little animal right now. overall, these stocks with go neutral for a while and pull back naturally and great buying opportunities especially amazon and apple. >> what about the defensive sectors? do they become defensive because utilities aside, because that's an a.i. play and power generation story that has a whole other boost to it, but healthcare stables. these sorts of sectors. >> the healthcare and staples have been beaten up. i don't know if it is a safety

trade. that is going to be something that is brought up again and again and again. utilities, yes. that would be a safe haven to go to and there's more of a sdoir story there. they are not there for the safe dividend. i think the strength is still in the a.i. story. the a.i. story has changed. it's not what's the hype? what's the cap ex? what is the cap ex done and where is the growth? salesforce is the perfect example. you look at what salesforce came and they are adding 2,000 jobs. we have stories. if you were to look at one sector, the software sector etf, service now looking phenomenal. microsoft still a wart. how we utilize a.i. especially the leadership you see in the etf, to me, that is

the opportunity. i still think over the course of the year, we will be up 12 % to 15%. >> in 2025? >> from where we are right now? sure. >> remarkable couple year run. you know, really unheard of historic run. >> this is a secular bull market. my thesis has not changed. you do have normal corrections. 2017, we were up every month of the first year of the trump administration. no day with a 2% drawdown. not one. we rode the 50-day moving average. touched once. i don't think we will get a repeat of trump 1.0 in the first year because tariffs are going to be an issue. tariffs are what derailed us in 2018. if we come out of the gate firing with tariffs, people will be shocked and the market hasn't

had a little bit of that shock and uncertainty in some time. october of 2023 is the last correction. to see it pull back to the 200-moving day average. bull market. think great buying opportunity and the rest of the year will be set up strong. to come on and say, yes, the next six-to-eight weeks is rough. the big picture, this will be an opportunity and when we go through something like this, this change, it could be never racking. we need to get back to healthcare. let's see where we go with rfk administration if that comes to fruition and what happens there. overall, technology still you want to be in financials. financials look fantastic. there's a great tailwind. m&a activity will pick up. we have not seen a lot of necessary. we have seen people come because

they need each other in the regional sector. we haven't seen an acquisition to grow and we will see that. >> what is the fed back drop? >> that's the one. the fed, that last meeting, usually jay powell is something where they cut. we had a different difficult dissenter this time. the fed is at a tipping point where they are not certain where the path is going to be. two cuts. that sounds fine. watch the ten-year. we are up 100 bps since the low when we started to cut rates. if we get to the high in march or april of 4.7%, we are looking at possibly a run at 5%. i think that is another head headwind this market faces. the fact the ten-year continues to tick higher in the face of all this will eventually have a little bit of the impact on the

stock market. the fact it hasn't yet is telling. >> we crossed your forecast for the 10% to 15% rise? >> that will be the accelerant for a 10% correction. >> and cap on the forecast for the year if we are at 4.7%? >> i think once we get a little turmoil in the market, that will change the tune in washington and -- the market is a report card for the incoming president. you know, we'll see what happens. right now, there is a lot of uncertainty. even at the fed and the way they speak. they don't seem to be on the same page with the dissent. the dot plot is not as aggressive on the way down. tariffs lead to inflation. unemployment could rise. there are a lot of x factors that i think could lead into a little uncertainty. we saw that in the beginning of the third quarter when those mag seven names did take a hit. you know, what held up?

small caps. small caps aren't going to hold up this time around. i hope i'm wrong. i think the section six-to-eight weeks are problematic. set us up for the great last quarters of the year. >> jay woods, thank you. coming up, it has been a tough year for french billionaires and eye popping numbers between the wealth loss among the titans of the french luxury companies in the last 12 months. don't laugh. >> very specific story. all this in the world. a small violin. >> they ake beautiful thgsin. maybe they make small violins. "squawk box" coming right back after this. right? - mmm... this store doesn't have agentforce, so an ai agent didn't tip off the stylist as to what i might actually wear. - yes. - oh. that's a commitment. [glass knocked] hey bud! whaddaya think? you know, people can see you out here. ha ha ha ha, yeah, yeah, right, right, ha ha. love you, too.

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welcome back to "squawk box." it's been a rough year for french billionaires including lvmh bernard arnaud. according to the bloomberg billionaire index. the companies have suffered from slower spending not in france or elsewhere, but china and weakened appetite for french assets with the political volatile climate in france. i know the violin is tiny. it's the tiniest of all tiny. >> a statement on luxury goods. >> and actually a statement on china. >> of course. the slowdown there and how profound it is in terms of the impact. >> and even in some of the shifting winds about what people are buying in the u.s. and elsewhere in terms of what luxury is. there is a little bit of that. there's a stepdown.

you go to the stores and they are trying to sell lower priced products. >> which lvmh said they will never do. >> they are doing just a little bit. >> you would know. i don't. new year's eve drone show in central park has been canceled after the failure of the show by the same company in florida last weekend. several drones that collided -- collided in the show injuried a 7-year-old boy. the central park drone show was set to replace the fireworks show that was canceled by mayor adams after the drought. the organizers said it was too late to pivot back to the drone display to the fireworks show. i guess there's nothing. better safe than sorry. >> it is interesting. i was under the working assumption having seen these cool drone shows that they were safer than fireworks. in fact, i hadn't thought about

the prospect if the system isn't designed properly, the drones will hit each other and they will fall to the ground. >> if you have hundreds of drones operating in a small space. that seems calamoutous. coming up, we have leslie picker on reports of m&a deals. this is what everybody is talking about. bank deals, bank deals, bank deals. she has the update on which ones. as we head to break, a look at yesterday's s&p 500 winners and losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. deadline in five! finished and sent. [sending swoosh] we have tight turnarounds. at&t business helps us deliver.

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good morning. welcome back to "squawk box. we are live from the nasdaq market site in times square. take a look at futures.

red on the screen. nasdaq off 86 points. there is this, folks, banks set out to close a banner year. the sector supportis up 20% hea into 2025. the conversation on banking is deregulations which another word is merger, merger, merger. leslie picker joins us now with the naughty and nice list for us. good morning. >> reporter: you are right, andrew. it is deregulation and consolidation and banking bulls see that consolidation as giving a boost to the sector in 2025. over the past few quarters, we have seen a rebound in activity within the u.s. banks notching $14 billion worth of mergers this year surpassing 2022 and 2023 levels. the question is whether that momentum continues and accelerates into the new year.

banks may be emboldened by the peers at kbw pointed out. old national bank and umb. the house financial services committee proposed measures to reduce obstacles for community bank mergers and sit the regulators. this is the vision of representative french hill, the former bank ceo, who was named the next chair of the committee. the flip side, deregulation brings down iance and they may use the capital to expand capabilities else's where. additionally, 2024 saw quite the cautionary tale of bank m&a with flagstar. this pushed above assets which

was an important issue with the bank rules as the commercial real estate soured. >> leslie, the punishment in 2008 could be lifted in the first half of 2025. what does that pave the way for wells fargo? >> it's a great point. the asset cap, of course, has limited that bank for the last few years over its sales practices scandal. there are reports, serious reports that could be lifted in 2025 and that's contributed to a rise in that stock price. in terms of big bank &a appetite, there are questions for the administration to make the bigger banks bigger through m&a. it allows wells fargo to grow the sales and trading and grow

the deposit business as well as long as the loan demand is there. in terms of big bank appetite for m&a, that is a really interesting story. >> leslie picker, we will see where it all heads. it's going to be fascinating. fascinating 2025. maybe not big, big deals, but smaller banks. >> plenty of room in the super regionals, definitely. >> then the question if people start to say we care about our community bank. there is a sacreligious element in the united states to allow the smaller banks be gobbled up. that is the other side of the coin we'll talk about. thanks, leslie. >> absolutely. coming up, russia responding to president-elect trump's call for a cease-fire in ukraine. details next. reaction from richard haass, council on foreign relations. get the best of squawk pod on

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welcome back to "squawk box." russia's foreign ministry rejected president trump's call for cease-fire in the russia-ukraine war after the christmas day attacks in ukraine. russia may be open to talks. let's bring in richard ha ass. he is senior counsel withn part. good morning, richard. >> good morning. >> we are 25 days before he becomes president. he said he would solve this within 24 hours of becoming president. is that possible? >> it is ambitious, but not

inconceivable within the first year as president, the focus will shift from the battlefield to the negotiating table. i don't take russia's announcement it rejects the cease-fire as the final word. what mr. trump has to do is persuade mr. putin. i think it would be good if he allowed ukraine to inflict more pain on russia. i think it's quite possible that russia could be brought around, however, reluctantly, to negotiate seriously about a cease-fire in place. >> what would have to happen to be brought around, if you will? >> it would be the united states and ukraine reach a deal on the open end arms support. i think mr. zelenskyy is prepared to so doing along those lines and that sends a message to russia that time is not on

their side so long as ukraine has established war games that are reasonable in this phase. i think if that happens given the state of the russian economy, which is deteriorating, there is a decent chance. we can persuade a reluctant putin. it doesn't mean russia gives up the long term ambitions or ukraine. that is the genius of the cease-fire. it's not peace, but it is preferable to war. >> it also would mean russia would maintain defacto control over a percentage of the territory it occupies right now, richard. is there a line in the sand? do you think there is a percentage that would be acceptable to both sides that could be agreed upon? that seems to be a decisive factor in this whole agreement. >> if you look at the last three years of this phase of the war, the amount of territory control has not changed that much.

at the end of 2024, they still control around 20% of ukraine territory. something like cease-fire is more than ukraine would give up or less than russia wants to grab. it is interim. i think both sides could probably live with it. >> richard, could we change topics to another country which is china this morning and we'll make it a business topic and throw tiktok into the mix. the president has talked about tiktok openly about, i think he would like to keep it running, if possible, but january 19th, the day before the inauguration, effectively, is the day this thing is supposed to stop, not stop working, but unable to download it or get updates for it on, you know, apple and google. what do you think happens here? >> giving it a lot of thought. donald trump, as you know, has

the penchant for the dramatic. he intervened on behalf of tiktok continuing to operate in the united states before. despite all the rulings up to now, i don't dismiss the possibility that he will try to find a formula where tiktok to continue. he has his friend who is involved and a lot of popular support for it. my enthusiasm for tiktok, shall we say, is limited given that too many young people use it as a source for news when it is anything but. i don't have evidence, but my reading of donald trump and his past behavior, he will try to find a way to intervene. it is also a way for him to try to put some money in the bank, so to speak, with the leadership of china. the basically i have done you one thing, what can you do for me? that is consistent with the transaction transactional approach donald trump brings to the presidency. >> how do you forecast the

relationship with the u.s. and china? right now, people are jumping to the worst-case scenario. right now, xi jinping has been invited to the inauguration. what signal does that send? >> this is a relationship that has been deteriorating for a number of years under republicans and democrats. donald trump deserves some credit for his first term as president because he introduced a degree of sobriety and realism into u.s.-chinese relations essentially saying the whole policy of assuming if china were integrated into the world economy t would moderate its behavior at home and abroad. he called them on it. it hasn't worked. he introduced tariffs and the biden administration kept the tariffs. this is a difficult relationship. i think over the next four years, i'm skeptical, i don't think so much what donald trump and jiepz jiepz xi jinping can . can we avoid a chriss in the

south china sea or crisis in taiwan or avoid a limited tariff war? i think the jury is out on all those things. i think there is a debate in trump world for those who view u.s. and chinese competition in an economic prism and those who see it geopolitically. that could have a real impact on the type of deals that trump can can strike with xi jinping. >> richard, great to ee you. fabulous to get your perspective. we will see ultimately what happens. we wish you a happy new year. >> thank you as well. coming up, it's been a volatile week for energy prices and natural gas in particular. more after the break. and congress member chip roy will join us and including electing a speaker nt exweek. "squawk box" will be right back.

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the price of natural gas has been volatile ahead of the january contract exploration. it traded at $4 yesterday. the forecast for extreme cold in january to boost heating demand. and new york will fine fossil fuel companies. the law was signed yesterday by governor kathy hochul. fines fossil fuel companies the amount of greenhouse gasses they release between 2000 and 2018. the money will be paid into a climate super fund in 2028. it will be spend on roads and sewage systems and other infrastructure to mitigate the impacts of climate change.

the department of conservation will apply the fines to companies it determines are responsible for greenhouse gas emissions. energy companies are expected to file legal challenges. they say it is preempted by polluters. i don't know what to say about this. we clearly do have a climate problem. the way this is being approached legally seems -- >> seems like a money grab. >> seems like a challenge. in this moment, there's a lot of priorities that need to get fixed in the city and state. we all know about them. i'm not suggesting this is a big long term problem. coming up, we will talk about artificial intelligence and the ing of the industry for the trump administration. we will talk about high profile companies like nike and

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chatgpt suffered an outage yesterday. it stopped working at 1:30 p.m. eastern time. the chat bo, it was experiencing higher or rates. the service was restored at 6:15 last night. it reported a power issue at the data center that started the same time and affected x box cloud gaming. colorado and california are forging the way for a.i. regulation in the new year. joining us is mark weatherford.

mark, great to have you with us. >> good morning, melissa. >> obviously, under the new administration that's incoming, there will be a big a.i. push and a.i. czar. from your standpoint on, the law in january is the blueprint. what are some of the great things about the law as a blueprint and what are some of the bad things? >> i think it's -- the great thing is it's going to incentivize companies to provide more transparency about what they're doing with their a.i. and this is really important because in the past, a lot of things have happened that we didn't -- it wasn't as transparent and we weren't really aware as we should have been. this leads to some, i would think, privacy issues surrounding as the a.i. model is moving forward. i think the downside is it can

then inhibit innovation. people are going to have second thoughts about what they're pushing out and how they're pushing it out which, you know, could slow things down a bit. >> in terms of transparency, what exactly do you mean by transparency? what are the main issues that need to be more transparent? >> i think how -- how people are developing artificial intelligence and how they are deploying artificial intelligence. what kind of data they're using. as we know, a.i. doesn't exist without data. data is everything. so where are they getting the data? how are they using the data? what kind of data is it? is it including privacy or sensitive or personal information that's the transparency aspect of that. >> okay. where the data comes from, not necessarily the quality of the data and the fact that data -- because a.i. is only as good as

the data you put in, right? >> exactly. >> a.i. data sets are embedded in the historic data sets are biases, that is not necessarily part of the transparency. i'm getting at the point that some of the issues with a.i. cannot be regulated. or it doesn't seem it could be regulated. >> well, that's why we think synthetic data does have a role here. synthetic data can mitigate the bias and mitigate the quality issues and certainly mitigate some of the privacy issues that we're seeing with existing data sets that organizations -- especially in the healthcare industry and the financial industry where there is a lot of sensitive personal information in that data. the synthetic data can be a catalyst for better quality data. >> can we just talk about the

better quality piece of this? that's the fundamental question of synthetic data. i understand how certain kinds of data can be manipulated in maybe a positive way, but overall, is that -- is your take it can always be made better this way? >> um, always. whoa. synthetic data is really, it generates data that preserves the statistical characteristics of he original data without revealing the real identities and details. so, i think, you know, synthetic data is not going to replace real data, but the ago degree gags of synthetic data is where the real value is. synthetic data can help make the data for modelling better. >> can we just for the sake of

people joining this conversation -- >> explain what synthetic. >> it implies creative and that may not necessarily be a good thing. >> well, synthetic data, simply is, artificially data that mimics the properties and structures and patterns of real-world data. what we have done at gretl is generate a platform for data to help companies create artificial data sets that act like real data while protecting sensitive information. >> mark, you are also the former obama deputy under cybersecurity. is there an intersection that companies need to think about now in the earlier days to prevent hacks into an algorithm or data set for that matter? >> yeah, of course.

and this is a fundamental piece of what a lot of companies and it is an unsung, unsung concept that a lot of the a.i. companies are investing a tremendous amount of money in cybersecurity to protect their a.i. as you might imagine, there's an entire new industry growing up around a.i. to protect a.i. so, i think, you know, we're going to see -- we're going to see more and more of that and it's really important that as the government looks at regulation that we -- we don't create many new laws and too much legislation that inhibits innovation, um, and creates unintended consequences. >> all right. mark, thanks for joining us. great to get your take. mark weatherford.

>> thanks, melissa. it is just before, literally, 20 seconds before 7:00 a.m. i'm andrew ross sorkin along with melissa lee. joe and becky are off today. a number of stories this friday morning.netflix, that christmas day game -- i should say games, plural, set a record for the biggest audience for a streaming matchup, but the ratings fell short of the audience for last year's christmas games that ran on broadcast networks. netflix's two games averaged 24.2 million viewers. we should talk about this, by the way n just a moment, melissa. meantime, south korean lawmakers voted to impeach interim president hand duck soo. the acting president refusing to appoint judges to fill vacancies in the constitutional court which will soon decide whether to reinstate or formerly remove his predecessor. and 36% of u.s. consumers took on more debt over the

holidays according to a serving by lending tree. averages balances this season are just under $1,200, up from $1,028 in 2023. my question to you about netflix and the nfl -- >> is how much was beyonce paid. >> that is still on my mind, but with the ratings down, do we believe that the ratings would have been down on linear broadcast tv as well? >> right. >> and do we believe -- how much do we believe the nfl cares about the total size and scale of the ratings, versus the amount of money they are able to capture from a netflix deal, meaning one of the reasons that the nfl has always wanted to be, for example -- have the super bowl on linear tv is because they want to reach as many people as humanly possible because they have other component parts of the business, right? they have sponsors, they have to put people in stands, they have all sorts of other products that they sell.

>> right. >> so total eyeballs, addressable eyeballs is super important. the question is does the christmas game matter in terms of the scale and scope? >> i think that it wasn't a drop in terms of order of magnitude. >> right. >> a drop. and also the benefit with netflix is that netflix those games were viewed globally. >> yes. >> so for the nfl it's a public relations win for them to be seen all around the world. >> and maybe next year it gets even bigger because people know to go there. i don't know. >> exactly. >> this is a question. let's check on the futures here. quiet, quiet friday. >> it's a quiet friday. what a nice quiet friday. >> we are looking at a lower open, the dow looking to dozen 126 at the open, s&p looking to be down by just about 19 and nasdaq looking to be off by 65. let's get to seema mody with a look at the premarket movers. >> shares of novo nordisk in focus as they continue to rebound from last week's selloff

following disappointing trial data on the obesity drug. shares continued to get a lift from growing optimism around weight loss drugs and the innovation we will see in the space. shares are still down about 14% this year. let's take a look at shares of tesla, moving lower, continuing to pull back after ending thursday in the red. the automaker is on deck to report fourth quarter deliveries next week and investors are looking to see if they can surpass expectations especially as the stock reached record highs following president-elect trump's victory in december. shares of mick row strategy falling, bitcoin's drop down to 95,000 on thursday, bitcoin crossing back above 95,000 at this hour sending crypto stocks like microstrategy higher as investors continue to weigh how the cryptocurrency can fair and which policies president-elect trump will i wisher in. micro strategies on pace to end

the week down by around 5%. >> seema, thank you. seema mody. let's take a look at market technicals as we head into 2025. joins us is chief u.s. strategist ned davis from ned davis research. good morning to you, ed. technically speaking, what do you think? what do the charts show you? >> the market is in pretty good shape, most stocks are above their moving averages, most industries are trending up. even though the market has been dominated by the mega caps, the ones driving the biggest returns, you have an equal weighted s&p 500 up 28% this year, better than what it does in most years. what we've seen over the past several weeks, the first half of december, is that the market pulled back and a lot of stocks, you know, experienced some declines, in fact, a 14-day run of more declining stocks than

advancing stocks in the s&p 500, which is a -- ties for the record high longest winning streak over the past 50 years. that was an odd anomaly, but now coming out of it, we have had a nice pop over the last few days. looks like we've been digesting that pull back and will come out of it in pretty good shape. >> do you have a santa claus rally prediction between now and the new year? it's very short term, i know. >> it is, but, you know, it's a pretty good indication of how the next year could go because that's the best time of the year, tax selling is done, most people reposition their portfolios so there could be money coming into the market at the very end of the year. there's very little reason to sell. that's really the strongest five to seven days of the entire year. so when you do get the santa claus rally usually it does mean good things going forward. of course, that's just one data point in the context of everything, but the fact we have gotten a little bit of a rebound this week after what we saw the

first half of december is a pretty good indication that the bull market still remains in pretty good shape. >> we just showed the russell 2,000 on the screen when you were speaking. the real question is does this whole thing broaden out? we have lived in this mag 7 land for a very long time. >> no, it really is important that we get more of the smaller cap stocks to participate. that is a sign of a more healthy economy, in addition to, you know, just more opportunities for stock pickers to find winners. the real challenge for small caps is that the bargain investors make with small caps is they get better earnings growth but you have to deal with the volatility. in the last decade we haven't gotten the earnings growth, the better growth has been from the mega caps. that's what we have to see next year and the challenge i think is on the interest rate front. there are a lot of unprofitable companies in the small cap indices and if the fed is near done or even raises interest

rates next year that's going to rekindle some of those problems we've seen for small caps and they will have to recapitalize, go to debt markets again and that's going to be a struggle. so until the large caps are proven to not work, probably that's going to be where people put their money. >> speaking of interest rates, do we recapture the 2024 high on the ten-year yield, 4.7 or so? because a lot of people are thinking that's going to be the headwind for stocks next year. >> the value is a little bit above where we are now. probably you could get close to 5%, which is 2023, i think if we got up to that level the equities would really take note. of that we probably would see a bigger pull back. at some point next year i think that's going to be the risk. what it comes down to ultimately is this disinflation we have seen since 2022 which has been

probably the single biggest driver of the bull market. is that over? do we get inflation to trickle back up towards 3%? if that's the case you throw on a term premium on interest rates and you could see the ten year getting close to 5% again. if i were to list my areas of concern for 2025, higher long term interest rates would be near the top of it. >> that said, technically how do the mag 7 look? if you look at some of them, apple, for instance, apple hitting a new high in yesterday's session, on pace right now to get to $4 trillion. some of the others are not too far from their highs as well. >> unfortunately we're not allowed to speak about individual names, but overall -- >> nasdaq 100. >> yeah. so they have held up pretty well as a group and i think the challenges we're getting into next year is whether or not the earnings growth is going to be really strong for these again. some have had such great numbers over the past couple years,

they're probably going to have slower earnings growth. if that's the case we will see if they technically can hold up as well. >> ed, i want to thank you and wish you a happy new year. a lot more coming up on "squawk box" this morning. what the charts could be saying about the markets heading into the new year. plus, from starbucks to boeing there are several ceos facing pretty major challenges in 2025. we are going to lay out the problems, the potential solutions, all of it later this hour. the good, the bad, the ugly and maybe some promising optimistic stuff, too. "squawk box" coming back after this.

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panama's president pushing back against president-elect trump's threats over the key water way. trump has threatened to retake control of the canal alleging that panama allowed chinese soldiers to control the shipping route and overcharge american ships. panama's president now denying the claims and said there is no chinese interference or involvement in anything that has to do with the canal. he said there are no chinese or any other world power there. coming up, president-elect trump's tariff policy he could slap mexico and canada with 25% tariffs on his first day in office, not to mention higher taxes for china. we will take a look at how these actions could impact our economy. "squawk box" is coming right back. >> announcer: time now for today's lac aftrivia question. how many lights are on the rockefeller christmas tree? the answer when "squawk box" returns. wake up, come on man! you gotta tell employers to take another look at all the benefits they're offering. everybody wants to build the best team and offering aflac can help attract

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rockefeller christmas tree? the answer, 50,000 led lights, on about 5 miles of wire. welcome back to "squawk box." let's take a check on how futures are faring on this friday ahead of new year's. s&p 500 look to go lose about 19 at the open, the dow looking to be down by 135, the nasdaq down by about 64 points here at the open and of course we are watching apple, apple shares on track to hit that $4 trillion mark. hit an all time high in yesterday's session and it is marching higher in morning. check out the price of bitcoin, up by 1.2%, 96,614, the cryptocurrency is on track for a second straight week of losses, though. bitcoin year to date still up a whopping -- well, more than 125%. let's check out the price of gold. gold, a little bit of a downturn in recent days as the fed has gone more hawkish, but here we are, 26.44 down by a third of a

percent. checking on crude prices, topping $70 a barrel this morning, wti there at $70.13. president-elect trump is looking at signing an executive order on his first day in order that would impose a 25% tariff on goods from mexico and canada, in addition to threats for more tariffs on products from china and other countries. joining us to talk about the potential economic impact, former white house counsel and economic adviser, senior trade economist christine mcdaniels, and richard stern is a federal policy director at the heritage foundation. christine, i will start off with you. is this just an opening salvo or do you think that it actually gets signed, you know, via executive order on the first day? >> we don't know yet. you know, what we do know, though, is that, you know, if the tariffs do come into play, they won't be costless, and so, you know, i'm really hoping that the administration can get something out of these tariffs. you know, by either working with

other countries, if it's for protectionist purposes, making sure the domestic industry has a plan, and, you know, importantly, knowing what you want. right? president trump can be very good at making deals and we see that, it works when there is a clear getable win. and so i'm hoping that, you know, this administration knows exactly what they want from the tariffs and other countries are willing to make deals. >> let's talk about that getable win, richard. some are saying that mexico in response to the threats has already, you know, moved to stop immigration across the border, has moved to stem the flow of fentanyl across the border. you know, is that a getable win? because ultimately who is going to pay the costs of that tariff? it's going to be the american consumer. the "wall street journal" had

this article yesterday about the most affordable autos, most of them are made in mexico. it could mean a $3,000 increase to the price of a $30,000 vehicle if there are tariffs put in place. that's part of the risk/reward here that we're balancing. >> absolutely. but i would say this, though, so some of the tariff burden is felt by foreign producers and the other piece of that also is keep in mind that we're going into a tax debate next year as a lot of tax provisions are expiring. the revenues raised from these tariffs could easily be used to cover the deficit impact of cutting taxes, pro growth to the economy, put money back in the pockets of american families and, in fact, most of those tax cuts that we would like to do and extend are vastly more productive for the economy than the model harm that tax foundations and other groups have talked about for some of the tariffs. using that that way would be a win to raise revenues to use to cut other much more harmful taxes. but certainly a third of mexico's economy is related to

exports to the u.s. i think the movement you're talking about are already showing that they are willing to work to try to avoid those tariffs by following through on their commitments, by closing the border, by not just letting cartels and drug groups run the southern border. i'm very optimistic about what will come from this. >> let's talk about the money raised. the tax foundation is saying a 20% universal tariff could raise $3.3 trillion for the government from 25 to 34, christine. that's not costless. there is a cost, you know, for businesses who are anticipating the onslaught of tariffs. they're bringing in goods right now, they're storing those goods right now. all of these things cost money, even if it's to store inventory gotten at current rates, christine. how do you sort of weigh the $3.3 trillion that is just the dollar amount on paper versus the sort of unintended consequence, the side effects, the other costs that are hidden? >> yeah, no, i mean, look,

richard is exactly right. i mean, the tariffs can at least partially pay for the tax cut extensions. you know, the problem that, you know, you worry about, though, is the inflationary effects of all of this. so that's where i'm really hoping that the plans to cut government spending can be materialized. we know that for every 1 percentage point of government spending to gdp ratio that they can shave off, you know, that can have some material, you know, anti-inflationary effects. and if you just use the black of the envelope to pay for these tariffs at least in terms of the inflationary effects to combat and counter that, they could find $1 trillion to shave off government spending. that could definitely do a lot to counter the inflationary effects. >> right. you know, richard, i want to talk about these tariffs through the prism of the financial markets because when you talk to market participants, investors,

traders, they will say that, you know, with an onslaught of tariffs that's going to be bad for the markets. can you talk us through why it won't necessarily be bad for the markets? >> well, first of all, whenever tariffs are imposed but certainly if we do what i would like to do, peter navarro has written about it as well which is a border adjustment, where you tax imports coming in but you also exclude your exports going out the door from your own tax base. then the u.s. dollar would strengthen tremendously. in fact, the strengthening of the u.s. dollar would offset an enormous amount of those costs. it's a stronger dollar makes it easier to purchase imports and it deals with a lot of these issues. so that's certainly first would calm markets. the other thing to keep in mind is that kind of dollar appreciation makes it vastly more enticing and lucrative to invest right here in the united states. the other part i'd bring up about this, of course, is that all of our trading partners, including mexico, have that

which work like sales taxes but mexico's is 16%. all of these are not applied to these countries' exports but they are very much employed on our a ports to them, their imports. so that works like a tariff. so all of our trade partners have these taxes, that mechanically work very similar to tariffs. so by not having some kind of border adjustment like this it's actually meant that for decades the american taxpayers subsidized foreign production being imported into the u.s. and double taxed our own production that's exported. so working to correct that both can raise those revenues to cut taxes here that are much more harmful, but also could close that loophole that has been dis disastrous for production year. >> it's interesting that you say the stronger dollar would be good because for multinational companies that bring their profits back home it's not a good thing. not a good thing for the markets

or earnings growth. how do you reconcile that? i get your point in terms of the benefits of the stronger dollar, from the market perspective that's a negative. >> that's true of any kind of tax loophole that's a subsidy for a particular way of doing things. the firms that are subsidized always have a problem during the transition period, but what i'm looking at here is what's good for the overall economy. at the end of the day the reason why the original version of the tax cuts and jobs act had a border adjustment is it would get rid of this subsidy that's good for a handful of companies, but opens the door to vastly more prosperity from a lot more companies than that. so this happens -- in fact, this happened during tcj, there were all kinds of loopholes and carveouts that we got rid of and there were companies then that we complained about. but what did we have? we had the lowest unemployment in 50 years, massive growth, higher wages for all american working groups, for the ddle

class. i think we will do that again, modernize our tax code to fit the way our trading partners work to level the playing field and use it to cut our taxes and make our tax code finally competitive. we need to build the full amount off the down payment that was tcj, we will have more prosperity if we do that. >> at the same time american consumers always want to pay the lowest prices. you make the point as long as u.s. consumers me included are always looking for the cheapest price these tariffs won't work in the short term. we need to really change the global supply change. since trump was in office you also had a rise of a schenn or temu. how does it play out this time around? we saw the impact before, we saw some companies change their supply chain, move away from china and yet consumers, especially now, under the pressure of inflationary forces

are still looking for the cheapest goods and will just go to that. >> exactly right, melissa. consumers are constantly looking for the lowest price and, you know, unfortunately tariffs and taxes hit the lower-income consumers the hardest. so here is the thing, i mean, if we are -- president trump campaigned on lowering inflation and to do that, you know, means a number of things, but including cutting government spending. and, yes, lowering -- you know, keeping the tax cuts permanent or at least lengthening them, that's great, but, you know, to counter the inflationary effects of the tariffs we've got to cut government spending. until we're really serious about that, then it's going to be really hard for president trump to fulfill his campaign promise on bringing inflation down. >> all right. christine and richard, we will

have to continue the conversation another time. thank you for your time. i appreciate it. >> thank you. >> always a pleasure. thank you. coming up, the u.s. in a productivity boom, it could be a major challenge for federal reserve chairman powell as he considers the next move for interest rates. steve liesman is going to break it down for us. we will have the professor on the broadcast in just a moment. as we head to a break take a look at some of the money center banks posting solid gains for the year. "squawk box" coming back after this.

welcome back to "squawk box." now a critical but largely untold story we want to talk about this morning. the u.s. productivity boom is a boom, it's been going on even before ai hit the economy. the professor is here, senior economics reporter steve liesman joins us now on how this presents a big challenge, perhaps, for the fed in the new year. good morning, steve. >> hey, good morning, andrew. yeah, the u.s. has experience add productivity boom which is a good thing but also presents jay

powell and the fed with one of its great challenges for 2025, how do you steer monetary policy through it? productivity has averaged 2.6% over the past six quarters a turn around from negative numbers after the pandemic, it averaged 1.5% from the great financial price is to the pandemic and this is likely before any impact hits the economy. even a full or half percentage point of extra productivity growth is a very big deal, raising how fast the economy can grow without creating inflation. investors they have to figure out where to invest in it. the fed has to figure out if its real. powell in november was skeptical it would last, but hopeful because it's been around for a little while. >> the high readings you should assume they're going to revert pretty quickly to the longer-term trend. that has always been the case for 50 years. >> back in 1996 then fed chair alan greenspan faced a similar

dilemma. he famously saw productivity in the economy even when it wasn't obvious in the data. with the economy running hot and threatening inflation, greenspan held the line on hiking interest rates even when colleagues wanted it to go higher. he ended up being right. so the questions for the fed right now are like this, is this a short term or lasting post-pandemic increase? will ai, trump tax cuts and deregulation push productivity up even further? could tariffs and deportations derail some of it? and of course how does monetary policy react? no easy answers there, but higher productivity means powell and the fed can let the economy run somewhat hotter like greenspan did in the '90s but also could mean a higher terminal funds rate because demand for capital it's higher when investments have high rates of return in terms of productivity. andrew? >> so let's go through this for a second. if it's not ai, what are the

possible sources, if you will, of this productivity boom you think we're having? >> so this is something that a lot of people are really thinking about right now. a couple of the -- one of the more interesting things i've read in the literature is this idea that a lot of people changed jobs in the pandemic so what could be happening is you had this right fitting of people into jobs they were more suited for. you also had a lot of people hired in the pandemic. now they may be trained up and more productive than they were before. you have work from home, a lot of debate about whether that ends up being more productive. you had companies learning to do more with less, i call them pandemic efficiencies. there's another down side to this, andrew, which is really fascinating. this idea of uncounted hours. people working from home, they may be working longer and that would tend to increase their productivity numbers if the hours aren't accounted for. also the influx of undocumented immigrants working and perhaps some of their hours not be

counted. that's really treacherous for the fed if it ends up being that at least some of the productivity boom is a data illusion and not real. >> okay. steve liesman, great to see you. happy new year. >> thanks. you, too. coming up, elon musk and far right activist laura loomer are clark over h-1b visas, we will get into that high-profile dispute next. and these four companies going through leadership changes this year. stocks are seeing better days. which new ceo has the best chance to turn things around. that cveatn onrsiois coming up in just a few minutes. "squawk box" is coming right back.

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do not go to purple.com do not visit a purple store welcome back to "squawk box." in the category of business meets politics meets policy, here we are this morning, a fight now breaking out on social media between elon musk and far right activists over h-1b visas. earlier this week activist laura loomer criticized president-elect trump's choice of indian born tech investor sri krish nan as a senior policy adviser.

elon seen as very close with trump said that by supporting krish nan that krish cast nan supported removing some caps on h-1b visas. musk of course once held such a visa and has hailed the program and krishnan as a key way for tech companies to recruit the world's best talent. there has been a whole sort of now battle over whether loomer has been blocked or sort of moved down the pile without a blue check mark on her account. now she's turning it around, claiming there is a free speech thing and that elon musk is not allowing free speech on the platform. so all of a sudden you have this turmoil, if you will, inside maga world over this. >> right. and we should make clear laura loomer is a far right activist. >> yes. >> so does this sort of, you know, foretell divisions amongst

the right in maga world, right? because you have a number of his -- of trump's appointees, elon musk, vivek ramaswamy. >> right. >> david saks who would be in favor of h-1b visas. donald trump himself has made it clear that he's in favor of legal immigration. >> right. >> and that people with a college degree or graduate diploma should be allowed in this country. that would be welcomed to stay in this country. we need the talent. >> right. >> and so does this show a division to come? >> it's fascinating. by the way, you also have folks who are big fans of elon musk who have taken loomer's side in in free speech issue which is how apparently how he handled loomer criticizing him. so there is a whole separate debate. this is happening on sort of a multiple level situation but we will keep our eyes on it and of course will bring you the story as it continues. as the world turns, it's a soap opera. the problem is it's a soap opera

that's real. coming up, new ceos, same challenges, companies like starbucks, nike, boeing and intel all going through leadership changes in 2024. will this new group be able to turn their companies around? well, yale's management guru jeff sonnenfeld lle he wi bre next to assess it all. "squawk box" comes back right after this. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one. growing your business is easy once you know the moves. with godaddy websites plus marketing, you can quickly create a website, and ai will customize it for you. get your business out there and get more customers in here. no sweat... for you anyway.

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welcome back to "squawk box." many ceos will face a changing environment in 2025, brian niccol is going to be looking to replicate his successful chipotle playbook at starbucks, same with ceos at nike, boeing and intel. joining us is jeff sonnenfeld. professor, get your grade book out because i want you to give some grades or at least some predictions. you know these students. you know these students in your class and the question is how well are they going to pull it off by the end of the semester next year, if you are back here, are you going to be looking at

these names and these students and saying, they got an a plus, or do you think you're going to be giving them an f? >> well, i would try a cramer lightning round, throw at me whoever you want. do you want to start with starbucks? >> we will go brian niccol first. >> brian niccol, i think you teed it up right, he has a fantastic record of turning around young brands, as he turned around taco bell that had disasters before he fixed them in product safety, employee morale and customer trust. then he repeat it had many times over at chipotle. now coming into starbucks, it hasn't been easy. the stock is up 19% since he's been there, which is sort of, you know, encouraging, but they've mishandled new brands, they have had promotion problems, obviously they have a labor situation, they have 170 cafes, i think that's about 5% of their workforce is unionized and they are talking about maybe shuttering 300 cafes.

but he has a way of empowering workers, he's really cutting the speed, he wants to have your delivery done in four minutes after order and he's dealing with the mobile apps very well. he's excellent on ai back before chipotle, but it's his employee-centric focus i think that's going to make a big difference. he's also looking at the in-store experience in the cafes, much more comfortable settings in there. i'm very hopeful on brian niccol. who is next? >> okay. let's go boeing. is that a fixable proposition? >> not so hopeful there. i'm actually kind of surprised that they picked kelly ortberg, just between us. nobody has ever mentioned -- >> just between us? i'm glad that we're -- yeah, it's good. >> intimate. >> i like that. >> i always tell you my secrets. you know, he had been the ceo of, of course, rockwell collins who created the mcas that seemed

to share some responsibility for the disasters that took place with those -- with those horrible crashes on the max and the 747 max, but they've got a humongous backlog there. they have over 1,000 planes are backlogged. they've got -- they've got, you know, giant issues before them with, of course, labor situations, they lost eight weeks of production. the faa, whitaker who will be leaving soon, has given them some encouragement. so there is some good news there. just two weeks ago they got cleared to resume all of their production, but it's essentially, you know, i think 4,200 planes that are behind on, just on the 737 maxes and another 1,000. so they have a lot to make up. they just produced about 13 jets in november, which was way less than a quarter of what they did even last year and they did about 56 last year and that was

not such a great year for them. the starliner fiasco, it's a human concern, of course, with two astronauts brand stranded for nine months up there to be saved by spacex. what a symbolic black eye it is, too, for boeing. they have a lot to work on and i guess they will have the spirit merger, hopefully take place. i think they vote on that in january at spirit air systems. something that should never have happened. it's the -- >> i will give you a harder one. you're fading in and out. not your views, of course, but the technology. so here is the question for you, though, talk about technology. intel. pat gelsinger is out. is intel a fixable proposition? there's been talk about whether they should merge with another chip company, whether the u.s. government has either given them too much money, too little money to try to create chips in the united states that could compete with nvidia and the like.

what do you do? >> i am probably the only one watching this show, and i'm watching it on my little computer here, who actually was a fan of pat gelsinger. the stock admittedly was down 57% this past year. that is a hard one. i think it was -- he had spent decades inside intel before going off to run vmware, you would think he was the perfect candidate to run it. andy grove who i knew personally very well saw him as a protege. andy grove the great patriarch and one of the co-founders of intel. pat was terrific, a very spiritual, principled person, but a great engineer and a decent human being. i actually blame -- as you know i'm often a fan of different parts of the biden administration. i think treasury was way too slow in clearing what he needed. it was a very patriotic mission to bring this fabrication back to the u.s. so we aren't so

dependent on china and asia for the production of virtually all of our chips. that is really a shame. about $11 billion i think that he was owed, which -- in direct grants that would have made a big difference. 95% of what was in the chips act i believe didn't clear yet, just on the bureaucracy. >> right. >> so i think he got a raw deal, but the performance is what it is. right now we can't say too much because we have two interim people in there, we have the cfo who is very good and we have a product manager in there who is very good and they are kind of -- i'm not a big fan of -- other than in crisis and transitional times the co-ceo situation, andrew. that's what they have there. we have a wait and see on intel. i hope they make it independently. >> give me -- give me a surprise for 2025, meaning is there something that you think veryone doesn't think is going to happen that actually is in terms of the corporate governance world? >> too close to home but i

really think a bad news situation is what they have at warner brothers discovery. we have this newly announced spinoff weeks ago, the separation of streaming and films and then the linear television. it's a little bit different from our friends, you know, brethren at the parent company of comcast, how they're putting together the split, but it's down about 9% and that's -- that's really problematic. it's -- ironically some of the cable businesses that are dragging it down. to try to sell that now into somebody else's hands with the comcast deal out there, which you know so much about, but you also have paramount is somewhat reenergized, you actually have other holdings, liberty media being spun out. it's going to be a crowded space to see how that works and what kind of a price they would get and the internal confusion with that i think is going to be

problematic. i think that would be, you know -- i would be surprised -- surprised if that one works well. i also think that some of the upside surprises which we probably don't have time to get into is that when you get away from ai and get away from a lot of the exciting drama of this market you have companies like motorola, greg brown, up 50% this year, glen fogle of bookings up 50% this year, a doug mcmillon of walmart up 75% this year. you know, despite all the kind of silly gossip that people love to attach to david solomon at goldman sachs, he's done spectacularly well, they are up about 50%, but it's tripled under his reign by the way and glen fogle under his reign it's tripled at bookings. this is taking companies with a tremendous rebuilding -- i should mention jane frazier is also underappreciated in terps of what we actually talk about. she's up some 35, almost 40% and it is going for recurring

revenues, which she did and david solomon did at goldman. it's hard to take an existing battleship and turn it around. these five are really the upside surprises that i think don't get the attention that, you know, citi group, goldman sachs, bookings, motorola and walmart are ones that i think are something that -- they've used a lot of technology. i mean, the ai story at walmart is the amazing secret there. they have the highest ai, in fact, online advertising and beat amazon. >> jeffrey, always good to see you. want to wish you a big and happy new year and i'm sure we will talk a lot more in 2025. >> thanks a lot. same to you. coming up, let's go to the movies. the box office numbers for christmas are in and disney -- >> can we go to the movies right now? >> no. >> no? can i go to the movies? >> no. are you going to leave me alone? this is your show. >> i'd like to go to the movies. i want to see "dillon."

>> will the holidays help hollywood and what is ahead for 2025? brk.re going to ea "squawk box" is coming right snup we are going to break. up. we are going to break. >we are g. . . ♪ [music] i could unlock my front door ♪ ♪ while i dine in baltimore ♪ ♪ no lock box to explain ♪ ♪ ♪ at 9:00 the doors would lock up ♪ ♪ save me from forgetful slip-ups ♪ ♪ if my home just had a brain ♪ ♪ ♪ i could make a custom pin ♪ ♪ watch the dog walker get in ♪ ♪ so ziggy won't complain ♪ ♪ ♪ when my in-law comes a-knockin' ♪ ♪ i can open, maybe lock it ♪ ♪ if my home just had a brain ♪ - [narrator] this is my coffee shop. we just moved into a bigger space, brought on another employee, and ordered new branded gear for the team. it was so easy.

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on christmas day disney's "lion king" prequel "mufasa" ed the pack, it follows by the art house vampire film -- i don't know if i can pronounce this properly -- it's "nasforatu." sonic the hedgehog coming in third. "dillon" made it's debut in fourth place, drawing strong interest from older audience with most over 55 years old. joining us is paul -- i also mispronounce. paul, you've got such a complicated last name it kills me all the time. i love you, though. nice to see you, sir. what do you think is going on at the box office? were you surprised at what's happened with the disney film? >> to number one over the weekend, almost double the amount that "mufasa" opened to

over this past weekend, but for christmas day "mufasa" the "lion king," disney has been really -- what a come back for this year. i mean, for that movie to then rise to the top of the pack and be number one on christmas day is no small thing at $14.7 million. "nosferatu" $11.5 million, sonic the hedgehog number 3 for that day and timothee chalamet he has to get an oscar nomination, what a great movie. the turn around in the box office since june right before "inside out 2" opened to $154.2 million the year to date box office at that point was down 27.5% according to our com score data. now we're going to wind up the year probably around 8.75 to $8.8 billion in domestic box office, which will put us down about 3% versus last year.

considering the headwinds we had at the beginning of the year with the release calendar thrown into disarray as you recall, the strikes and the work stoppages impacted production, which then impacted the release calendar and that threw everything off but we sure got our groove back here at the end of the year with an incredibly diverse slate of films on the docket over this past week and the final week, we have our final weekend of the box office coming up. this is great for movie theaters, no flash in the pan, '25 and '26 are going to be particularly strong. >> particularly strong. who is the winner? who is the winner and who is the loser? >> i think "superman" is. they released the trailer last week and that trailer for the new "superman" movie has 50 million viewers, "crypto the super dog" a reboot of sorts, i think for d.c. to get back on track. you also have mission impossible the final reckoning in may next

year, a captain america movie on february 14 of '25. so it's going to be, i think, back more to normal, more orderly release pattern. the frequency and cadence of the box office will be more stable and that's good for business. >> what do you think about the secondary windows and a light and one of the things we've seen a whole number of films. netflix occasionally putting films in theaters for a hot minute at least. how do see that universe shifting in this new year ? >> in the new year -- we have lessons from this year. we've got this search at the end of the year with record $425 million from the wednesday before thanksgiving to the sunday after.

that movie got a big boost on disney plus because of the first wonna movie driving the attention to that brand. disney plus had ads on the platform or other types of content related to the movie. i see the streaming world as additive and complementary to movie theaters not adversarial. that's important. they work together. it's this giant ecosystem but really the movie theaters is the thing that drives that cultural moment and we are seeing that with the trailer on the small screen for the big screen superman that's coming up next year. pretty exciting stuff. great time to be tracking box office. even at 5:00 a.m. here in los angeles. >> i want to thank you for waking up early and tracking everything. we look forward to talking in the new year. >> thank you, andrew. happy new year. >> it's after 8:00 here on the east coast. could be p.m.

where you are. you are watching squawk box. i'm angela along with melissa. the future is right now. i'm afraid to say we are in the red. we will see seat with things land. it's been a good situation last week or so. the dow off 143 points. the s&p 500 down about 22 points. we've got breaking news right now. this is from open a.i. >> open that is officially laying out plans to change the company's corporate structure saying in a blog post they will become a for-profit company specifically a benefit corporation after being found it is a nonprofit research lab a decade ago. says in the blog post its existing for-profit arm will transform into a pbc with what

they call ordinary shares of stock. we reported this pivot is in the works for the first time 157 billion-dollar a.i. company has addressed it. they are acknowledging cash reality saying quote we once again need to raise more capital than we imagine. investors want to back is, at this skill of capital, the conventional equity and less structural bespoke nests. pvcs a break with governance but have a dual mandate. the fiduciary duties are greeted value in public stated mission. you've got ben & jerry's and pack pannonia and. open a.i. did have what they describe the structure. it was a capped profit company. they do say nonprofit is still going to exist and higher staff to pursue charitable initiatives with a quote a significant interest in the pvc

an affair value determined by independent financial advisors and also saying the current structure does not allow the board to consider the direct interest of those who have financed their mission. plenty of details are left out including when this will happen. the elephant in the room right now for open a.i. is elon musk. trying to block this in court. he's also an open a.i. founder. he sued to block its. he described it as a total scam alert in the month. open a.i. fired back saying musk is trying to fill his own competitor.

>> it's going to be interesting.

>> yes you have to make many for your shareholders they have this mission which a lot of these a.i. companies have. for any a.i. company. i talked to folks who say it gives you a legal shield. there's a point which you say there's artificial general intelligence we need to pull the plug or safety issue, you can point to that other mission. we know we lost money for the shareholders because of that also have this tool mandate. there's a legal benefactor that's interesting when it comes to a.i. >> did you see the story in the information ? >> which one quick >> this one about the 100 billion dollar mark ? >> walk me through it. >> my understanding is i read a

story yesterday suggesting that it's not just about reaching agi which the group can decide on. but it's mathematical. meaning it has to be the company can create $100 billion in revenue. >> there interest may not be line going forward. we will see if that relationship stays on track. fascinating stuff.

>> we will discuss this. open a.i., microsoft in the $100 billion agi question that they put it in the contract. $100 billion is the number. that is how they would decide if they reached agi. >> that makes more sense if they have a number to measure it by. i was seeing another interesting report. check gpt five and the reported delays. the journal had the story how much money it's taking to create the next model. there's been delays. and sing half $1 billion to train a model. it's been delayed. looking at this public structure and how uch this company has raised, the bar is getting higher and higher for them to wow investors and consumers and more competition. talked about musk. there's x a.i. all the tech companies getting

into it. as they convert, this is table stakes. they have to do to raise money and be the leader. >> thank you, kate. let's get a check on this morning's key stop movers. >> an hour and a half to the market opens pictures of united health are in the red. united health and healthcare services firm agreed to extend the deadline to close their regulatory filing. let's look at shares of broad, moving higher. the chips stock is on track for its best month ever extending games on this big december rally and outperform its competitor in video follow its latest earnings report. the bullish guy from ceo is a partner will custom their in-

house tips. let's look at bitcoin. getting back its gains but still up 126 % this year. you're looking at coin base which is moving higher in bitcoin up half a percent. >> thank you. let's bring in brian. great to have you with us. 2025. 8 % to 10 % kind of year. that's okay. >> normal is what i would say. it feels abnormal since we've had a two year run up 50 % in the smp. where's my 25 % return year over year. what we see in 2025 is a restoration to normal.

that brings with it more threat of volatility. the one thing we didn't have was a lot of downward volatility. we expect more normal trading activity. more normal evaluations. we see a positive outlook overall. eight to 10 to the of site is a good number. earnings growth of 14 % on the s&p 500. the issue is most of that is being given by the magnificent seven. we take away the madness of and seven stocks, it drops to about 4 %. we could see more volatile market caused by any miss of those seven names because they account for so much of the earnings growth in 2025. that's something we have to pay attention to. a risk you want to address and manage your portfolio as you put pieces together for the new year. >> you are forecasting that markets will be dominated by the magnificent seven. it's a higher return the rest of the s&p 500 saw that number. >> they do have the most

earnings growth. what you would be concerned about is if the share price growth was driven by nonprofitable companies that would turn it into an acid type of bubble. the earnings are real. revenues are real and still dominate the market. what we do expect i the back half of 2025 is more competition for those magnificent seven stocks. we see more people invest in their selves. a.i. starts to be monetized by other companies and that return on investment will be important. that will be the raced to the back half of 25 to see who can monetize a.i. more going forward. >> will that be an investable theme in 2025 ? you say kroger is monetizing and tell me that a health company is monetizing that doesn't tell me i should be putting money they are. >> we are talk about real a.i. at the moment we are the leading edge of this

technology. we acknowledge that. there's two type of businesses. the large language models. those are creating real revenue for ball and she's through a subscription model. you can wait and measure not like netflix and things of that nature. there's a real customer closing the loop. that's monetization in our view. on the other side you have generative a.i. self driving taxis. a lot of investment there but not quite closing the loop and engaging with enough customers to collect a real business. investors will want to see more progress made along those businesses as well. >> thank you, brian. coming up, the spending challenge that away congress when they return to washington in the new year. lawmakers are about to be thrown into a new set of battles. we will talk about those when we return to squawk box when we return.

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welcome back to squawk box. congress managing to avoid a

shutdown but a battle of the debt ceiling is brewing. final bill to fund the company tournament march included 100 been in disaster aid and one your farm bill. notably that the debt limit increase that trump called had called for. joining us on the spending and debt fights ahead is the economic policy studies director at the american enterprise institute. former biden white house office and management and budget official michael linton. take off the gloves, gentlemen. help us understand -- we can do the fight right now if you want. i must have to give you your last names first. lay it out and lay out your best argument for what you think should happen. >> i've been listening to the democrats for years and years and years. correctly criticizing

republicans for trying to use the debt ceiling as leverage to force spending cuts during crisis situations when the nation is running up to default. president-elect donald trump offered this -- disarmament. he said lisa spent this thing for two years. he said it for four years and later on he said let's eliminate it. this is what democrats have been wanting. it's the best interest of the nation. if you care about prosperity, if you care about the united states, maintaining full faith and credit in our bond obligations, i should be in favor of suspending the debt ceiling. the democrats should have said president-elect donald trump you want four years about 50. let suspended for 50. my guess is president-elect donald trump will go along with that. democrats -- >> we can talk about the debt ceiling. i'm more curious about what you think comes after the debt ceiling debate ? what happens

with taxes and what happens with this budget ? are we going to try to balance the budget, or taxes going to go lower, we going to try to do math ? >> it's going o be a big part of what we are fighting about in 2025. i suspect it will end up with a deficit increasing. >> the other michael. >> yes ? >> how concerned are you about -- i imagine he don't let the

tax policy to state where it is. what you think will happen to the budget ? >> i agree with my colleague. what will happen is donald trump will cut taxes. largely and disproportionally for wealthy people and corporations. that has historically been the main contributor, not donald trump by himself but tax caps for rich people and corporations up in the main contributor to the increase in our fiscal risks over the last 25 years. people like to talk about the spending but spending has come in lower-than-expected from 20 years ago. we know older people have started to retire and that push up costs. the big problem with had in the budget for the last 25 years is keep cutting taxes over and over. mostly for people at the top and corporations. when you are in a big hole, he

should stop digging but unfortunately agreed with michael. what will happen is donald trump and the republicans in congress will cut taxes mostly for rich people and corporations and end up with a larger deficit and more fiscal risks than when we started. >> strain, what you think ? would you agree with that until your republican colleagues do not do it then ? >> i would not characterize it that way. we have good evidence from the 2017 tax cuts from president- elect donald trump's first tax cuts that the business tax cuts increased investment, increased the wages of workers, increased the earnings of the working class. i disagree with the characterization. >> hold on. that's not true. we have good evidence there was zero wage effect for the bottom 90 % of workers we have from actual data from the last eight years literally zero wage increase for the bottom 90 % of workers. you are right executives in the top 10 % of workers got a big increase in their wages and they got more take-home profits. the got to put money back into share buybacks.

zero wage increase for the bottom half. >> what about the labor market ? let's take wage growth out of it ? >> that's a fair question. there's a lot of confounding variables with covid. you look at a few years after the tax bill passed in 2017 but before covid there was no appreciable change in job growth. no appreciable change in wage growth. no appreciable change in overwrought gdp growth. >> that's not my recollection.

>> let's get our facts straight. i would encourage congress in 2025 to focus on additional reductions in business taxes not to focus on additional reductions in high income household taxes. i would encourage congress to keep in place the base broadening like the cap on the state and local tax deduction. that race taxes on higher income americans. >> on the corporate taxes, what you want to bring them down to ? >> i would like to see the full expensing of business investment put into permanent law. that would not affect the corporate tax rate. that would allow usinesses to fully deduct the cost of investment spending in the year that spending is made. that has been shown to increase this is investment, product

pretty and wages for workers up and down the wage distribution. >> linden ? >> i will be brief. at the end of the day when we cussed taxes for big business and rich people somebody has to pick up the bill. you see that with calls to cut basic protections and services for working people or you end up with higher taxes for working people. those tax cuts are ot free and trickle down. we have to stop making the same mistakes we made for the last 25 years. if you're worried about the long-term fiscal risks, we should not be cutting taxes for rich people and corporations. >> michael and michael, happy new year. we get to do this a lot in 2025. thank you. >> happy new year. coming up, the umbers are in for the christmas day nfl matchups on netflix and they are impressive. details after the break. will talk about the

spending, deficit debt ceiling with congressman chip roy. the president called him out personally last week. that's ahead when squawk box returns. ♪ (animatronic santa) ho, ho, ho! (vo) time to move? make it easy with opendoor. sell your home in any season, for any reason.

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christmas delivered for netflix and the nfl in a big way. here's more. >> the nfl two christmas day games with most streamed nfl games ever proving that netflix can support a massive streaming audience and the nfl can reach a total audience of nearly 65 million u.s. streamers. that's the many people watch the games for at least a minute

according to nielsen. the ravens-texas and chief and steelers games reached 24 million viewers. viewership peak with beyonci bolt reaching 27 million viewers. the games did bring in 5 million fewer viewers than last year's christmas afternoon games that ran on linear tv on cbs and fox but did surpass the prior streaming peak. peacocks wild game with 23 million viewers earlier this year. this is the first in a three- year deal for netflix to stream nfl christmas games and see if netflix looks for more rights as the nfl expands its international games with plans to go to 16 international games. netflix says global ratings will be released on december 31st. a source tells me given these numbers do not include all the u.s. viewers or international data that when it's factored in they expect the numbers to be

closer to average ratings of 30 million viewers a game. the christmas nba games were also strong. they averaged over 5 million viewers which was 84 % higher than a low last year. >> a huge appetite for sports across the board. there was not any cannibalization of the audience that appears right now. i'm wondering how do you think the nfl will think about the success of this given that they are reaching international audience not just u.s. audience that they normally reach if they were on linear tv ? >> this is a huge opportunity for the nfl. this year they had five international games. next year there will have eight international games. the commissioner said they may have 16 international games. if you look at the relationship with netflix and the fact that netflix is a perfect partner for the nfl when it comes to the international range. you have to wonder with the nfl puts together the new package of games outside the u.s. will

netflix be a good partner for them to be licensing those games. the fact they can pull off the streaming without the glitches that they suffered from during the tyson fight was a big relief. when you have the nfl they don't want have any issues with the streaming capabilities and netflix showed they can handle that. the nfl's growth is due to streaming and international. netflix covers both those things. >> thank you. coming up, the energy sector. one of the key places expected to see changes once president- elect donald trump takes office. we will talk about with the industry and investors should expect in 2025 and beyond. apples march to a $4 trillion mark. stay tuned. you're watinsqwkchg ua box. this is cnbc. amazing new ipho!

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president-elect donald trump takes office in about three weeks. he's promised to get work on day one expanding oil drilling and fracking. what a view with that come:00, let's have the former secretary

of energy under president-elect donald trump. great to have you with us. he may want to expand drilling for oil in this country. do the oil companies want to do that with oils at $70 a barrel quick >> happy new year. great to see you. the president is going to apply a common sense approach to this. he wants to make production expand the production. that's market-driven. what he wants to do is make the production more efficient. what we've seen in the u.s. is well production numbers have gone up so have the cost of that production. that's why retail consumers for things like refined diesel or gasoline nothing the benefit of that increase supply in the marketplace. we are not wasting that oil and gas but other places in the energy space. >> can you enlighten us in terms of those production costs that are a direct result of governmental requirements,

bureaucracy et cetera. >> if you look back at the earliest parts of the biden administration, the department of interior is required by law to conduct leasing sales for offshore production. the biden administration delayed those lease sales out of the department of energy and so much so a court forced the dl i to conduct a sale. what the department did in respond was to raise the fees on those auctions and also to raise other elements of the sale is self so they reduce the acreage and raise the fees. consumers will pay the price in the long run. >> the biden administration unleashed a huge wave of investment in the clean energy space. when the election happened and mr. trump won, green energy stocks dropped. that was the initial reaction. from your standpoint, are some of those things in the ira

flexion reduction act will get will back ? will though be less investment in clean energy under a trump administration ? >> i don't inc. they will be less investment on renewable type production. what happens in congress is an open question at the moment. we have to wait and see. i suspect this tax credit will stay in place. the bottom line is if you look across the united states, what we are noticing we are short on electrons, short on electricity. as this demand comes online from a.i., continued manufacturing growth in the united states, we have to increase our duration of electricity. we have to increase our ability to transport that product to market. transmission towers, distribution networks will be necessary. you will continue to see investments across the board. >> what sort of investments need to happen to make to

transport those electrons. it's not just a. if mr. trump wants to bring in bitcoin money to the u.s., you need energy for that. that's a huge energy consumer. bitcoin minors can get cheaper electricity and other countries and why it's mind overseas. in terms of modernizing the grid, what needs to happen ? it seems like the grade is made up of regional sections that don't necessarily interconnect. energy cannot be transmitted to any to get to. >> i agree. interconnections throughout our grades. we can modernize our electricity grid. one of the vaccine challenges to buildout infrastructure is a permitting processes. if you look back over time for you've seen is a lengthening of those processes which adds money and costs for consumers.

it's something with the address of the nation. congress took steps to do that. we need to do more. we need to make it more efficient to do business here in the u.s. >> what other things do you think a doe could do to in incentivize investment ? at this point, if you look at the stock market the stocks have done well related to a.i. utility companies. people recognize the need for energy. is there a way to capitalize on that investor demand for these types of investment on a government level ? >> what policymakers tend to do in washington, d.c. is offer funds, spend money. it's usually what makes a good press release if you're and elected official. we don't need to do that. capital is not usually the issue. i don't want to suggest it's easy to raise money for these projects but easier than some policymakers think. what we need to do is address the real hurdles. it's what i mentioned earlier.

it's allowing the permitting for the development of this infrastructure. we figure out the production question. we know how to produce oil and gas. we are the world's largest producer. with the largest producer of lng. we provide most of europe's natural gas. we know how to do those things. what are challenge has become is moving the product to the markets. it's getting the electron where the load is where the demand is. it's getting the molecule from the upstream production to the open ocean so can have our allies. it's helping the process. the doe, federal regulatory commission and others in washington, d.c. can help with. >> has a permitting process gotten worse in terms of the redtape you need to go through in order to do these things that need to be done or is it they need to be removed given the urgency of the situation right now for energy demand ?

>> it's gotten worse. over the last four years, i can tell you when i was secretary so the average time for a permanent was around 108 days. that's well over 180 days of the department of energy. clearly things have slowed down over the course of the last four years. in this business, time is money. if it takes time to get the permit that means you are hiring more personnel to help you get through those processes. consumers are bearing the brunt of those costs. >> thank you for joining us. >> thank you. coming up, texas congressman chipboard will join us on the fight over government spending after getting name check by president-elect donald trump during last week's funding battle. u ar tuned. yoe watching's squawk. this is cnbc. (♪♪)

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welcome back to squawk box. in the run up to last week's passage of the continuing resolution to fund the government, president-elect donald trump took to social media platform to blast texas republican congressman chipboard. trump wanted the debt ceiling to be raised as part of a funding package but roy 18 companion spending cuts online, the president elect called for a republican of -- obstructionist and we have congressman boy with ice. he is the freedom caucus policy chair. welcome to the broadcast. thanks for coming on. let's start with this. what did you think when you first read president-elect donald trump's comments about you ? >> merry christmas and great to be on the show. this policy is a tough business. president-elect donald trump

knows what he wants. north the debt ceiling pushed aside so senate majority leader chuck schumer cannot use it against republicans. we know senate majority leader chuck schumer has been going around the senate saying he wants to use it to strained president-elect donald trump's agenda. president-elect donald trump wanted it gone. we did not get that tweet until one tonight at 6:00. the president didn't tell us any that debt ceiling or nurse year before christmas. the bill had been built up like a normal christmas tree to respond to public leadership. it was a bad bill. blue up wednesday afternoon. those known and consistent in our track record that we don't agree to borrow more money without forcing some discussion about spending cuts, we said no. it was the just that freedom caucus were chipboard. there were 38 republicans who stood up and said we can't do this. since i've been home in texas, everyone i've seen, everyone i've talked to has said thank you. they are tired of it.

tomko did not run on racking up more debt. you ran on controlling inflation, driving down the spending and securing the border. i stand up and not going to blame. i will not vote for debt ceiling increase unless we have significant spending cuts. >> have you spoken to president- elect donald trump since he made those comments ? >> i don't talk about private conversations. i've been in contact with mar-a- lago probably republican leadership. they know where i stand. everyone understands. tweets and trying to pressure that way. that's not going to change what i got elected. i got elected to reduce spending, drive down inflection -- inflation and shrink government. i'm not going to go away from that fight. >> let's talk about that. there's a question mark what we saw in the last week and a half and what that is for 2025 as it relates to the budget, as it relates to taxes, tax cuts or maintaining the current tax

policy in this country and whether we can balance a budget doing these things. how does that late out for you, if you will ? >> well, we've got implant we put together as conservatives. we are working on the speaker with that work with the president. we are working with the incoming folks of the administration from j.d. vance and the treasury secretary in coming. everybody thinks it's a joke. we run a deficit of $2 trillion a year. we've got to use the right reconciliation process that requires republican votes to unite around spending restraint. coupled with the debt ceiling or whatever tax policy we believe is important for democrat dish democratic growth. this is cnbc and squawk box and i've been watching the show for years. we believe in tax restraint but also need spending restraint. we have to work together to do

what's necessary. the wall street journal had an editorial yesterday with a talked about the reason we don't cut spending is because these programs are popular. people like these programs. they are right. that's when these guys came in, the lawn and i point to my republican colleagues and said the problem is here in this room. we have republicans and democrats who never met a program they didn't want to promote for political gain. what i'm saying is we have to pay the piper. the piper is here. we have to do our job. we have to stand up and do what we've said. >> how influential do you think elon musk and victor wembanyama -- vivek ramaswamy will beat. i'm not sure they were thrilled about the bill that went in. trump wasn't there either. >> i think they will have

significant influence. they are identifying spending ways they can use their poll. they can broadcast that and shine a light on it. >> how ig a cut -- what do you think it will be able to go after ? do you think they will touch healthcare ? the department of defense ? are we talking about just discretionary stuff and if that's the case is it just on the margins ? >> if we were turned not defense spending to pre-covid explosion and spending, we could save something like $200 million a year with scores. if we were to go and put in restraint over the use of food stamps to feed our people sugar for example, always tied to the farm bill, we could save hundreds of billions of dollars. if we feel the efficient reduction act which is crippling our economy, empowering china we could save $750 billion. we can do a lot of savings out of the gate to reverse the biden damage and get the

economy going, reduce regulation but not touch benefits that seniors rely on. we need to address medicare and social security in the long haul. no question. right now we should reverse biden damage getting reforms to be put in place, tax policy that matches that and do our job to constrain the yurok receipt. cutting not defense discretionary. that would be a 13 % cut. we can find 13 % of ways. these guys can also. the american people would cheer president-elect donald trump and republicans if we do that. >> they can find cost savings. how does it play out in terms of the process ? once they identify these cuts, you guys get into the fried and have the same humans. how does this work ? >> we've got reconciliation and a few bites of the apple. we need to get our plans going right away in january.

we've been laying those out. we have to work with the incoming administration to use reconciliation. for people that don't understand, reconciliation is a process that allows us to make sure we are striving for reduction for bouncing the account between taxes and spending. that's our job. the democrats use reconciliation to jim obama care through. we have to -- the process is we come together and put together a step one conciliation package to give the president tools he needs to secure the border, make sure the defense is in the right place and make sure everything is paid for. reverse the biden damage and do that in step one of the debt ceiling increase the practice and wants. you coming in a second package deal the tax policy and deal with a significant mandatory spending reforms i alluded to whether it's food stamps, some of the stuff that's been jammed in medicaid and a lot of things

we can do to reduce spending. now working with peanut oil. we can do our job. >> congressman chip, thank you for joining us. we hope we have an opportunity to talk about these issues with you in the new year. >> happy to do it. let switch gears to the tech sector. apple hit $1 trillion mark in 20 now closing in on $4 trillion. joining us what's next is the capital managing director. it sounds you think this has been since june when this was outlined. a lot of it is frost. why ? >> i believe in apple. i'm in on an apple device right now. the revenue has not gone up. when you look at the overall market and look at nasdaq and

what max seven has done, it looks like hat chart. what you are seeing is apple is getting rewarded for the fact the market is pretty frosty in that doesn't mean there's nothing wrong with apple. it means maybe things are not as right as a stock price in the case. >> what is the big thing need to see from apple to justify its evaluation ? do need to see the improved siri it will unveil ? what a since do you need to see ? >> i would take a step back and say we don't use apple software. apple has software and it works perfectly well. it is on all your apple devices and most of us do not go to pages or to the word competitors. we do with imessage. in the you s we are locked into that. other than that, we don't tend to use apple software first. at the end of the a -- day, it is software. we think apple will be we go

for search instead of google or even chat gpt ? i don't know if i see that right away. part of it is understanding what apple has been good at which is making great devices and yes i will work on those devices and a.i. ready works on those devices. siri has been around for a long time. i don't know if apple will release something that makes us shift to them as the first stop for a.i. software. >> we've got half a minute left. who do you think will be the winner in 2025 in terms of these chat functions ? will it be chat gpt, microsoft ? who ? >> i think where we are now. for most americans and worldwide that means you will be on meta-devices. people overlook what they are doing in a.i. the reality is that's where we

spend our time. instagram, facebook. that will be a huge sleeper win for 2025. >> great to speak with you. thank you. happy new year. >> quick check on the markets. we've got read on the screen as we head into this friday. dow jones off 192 points. nasdaq off when 11 and s&p 500 off 28 points. bitcoin. >> melissa, thank you. >> see you tonight on "fast". >> see her on "fast." we'll see you soon. have a great weekend. join us next week. "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street." i am saraizen with brian sullivan here at post 9 of the new york stock exchange. carl, jim and david have the morning off. take a look at futures as andrew just noted. headed for a lower start on the final trading day of the week. nasdaq futures down 110. we're still looking at really nice gains for the week. talking about more than 1% gains. actually, 1.8 for the s&p 500